03/24/1998 - City Council Special AGENDA
SPECIAL CITY COUNCIL MEETING
Tuesday
March 24, 1998
5:00 p.m.
Municipal Center Community Room
I. ROLL CALL&AGENDA ADOPTION
II. VISITORS TO BE HEARD
III. YANKEE DOODLE PARK& RIDE EXPANSION
IV. T.H. 55 REDEVELOPMENT DISTRICT STATUS & DIRECTION
V. DISCUSSION RE: PROCESS FOR SCHEDULING A PUBLIC
INFORMATION MEETING TO CONSIDER WINTER TRAIL
• MAINTENANCE
VI. PRESENTATION RE: PROPOSED TEEN CENTER
VII. DISCUSSION RE: PROPOSED TOBACCO ORDINANCE
VIII. DISCUSSION RE: GENERAL FUND BALANCE
IX. OTHER BUSINESS
X. ADJOURNMENT
MEMO
- city of eagan
TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS
FROM: CITY ADMINISTRATOR HEDGES
DATE: MARCH 19, 1998
SUBJECT: SPECIAL CITY COUNCIL MEETING/MARCH 24, 1998
A Special City Council meeting is scheduled for Tuesday, March 24, 1998 to discuss and provide
direction to staff on several public policy issues. The meeting will be held in the Municipal Center
Community Room.
YANKEE DOODLE PARK&RIDE EXPANSION
The City has received correspondence from the Minnesota Valley Transit Authority(MVTA)
regarding expansion and possible joint use development options for the Yankee Doodle Road Park
and Ride site. Enclosed on pages_ through_ is a copy of the correspondence from
the MVTA.
Direction to be considered: Provide direction to the staff g expansion reardin anion of the Park and
g
Ride facility. It should be noted that if it is the intention of the City Council to further explore an
expansion of this Park and Ride site,representatives of the MVTA would be asked to attend a
future meeting when a definite plan is available for review.
T.H. 55 REDEVELOPMENT DISTRICT STATUS&DIRECTION
Considerable activity is occurring in and around the Highway 55 redevelopment area in northeast
Eagan. Staff will provide an update and respond to questions concerning the current status of the
district at Tuesday's meeting. In addition,direction is being requested with respect to next steps in
dealing with the remaining property owners in the area and how best to facilitate a comprehensive
redevelopment plan.
As the Council is aware,the City has taken possession of the five homes on Lawrence Avenue and
Linde Lane. In addition,a demolition agreement to permit the removal of the Airliner and Spruce
Motels and an assessment of the costs to the property owner has been tendered to Phillip and Ann
Kor. The homes will be removed or salvaged and demolished in late spring or early summer. The
motel could be demolished in the same time frame. During the months of April and May,
arrangements are being made for the motels and homes to be used for police and fire training
exercises.
In the surrounding area,Wispark has acquired the properties surrounding the pond counter-clockwise
from their development at Dodd and Blue Gentian through and including the former Pepsi property
abutting the Airliner and Lawrence Avenue homes. As the Council is aware,the Imre family of T.M.I. i
Coatings has also acquired a number of the properties on the south side of the pond over the past
several years. Staff has facilitated a series of meetings among these property owners to encourage
them to work together in the development of a master plan for the area. Some progress has been made
in this regard,but at this time,it appears that little additional consolidation is occurring. The possible
exception is that Wispark has made an offer to the Kors for the motel properties. This transaction may
hinge on the costs of demolition for the motel property.
In the same area,but outside the redevelopment district, a group of investors led by Charlie Hendrick
have acquired the former MacLean property and they have expressed interest in the potential of
acquiring some or all of the residential properties on Blue Gentian. A number of the residential
property owners have participated in the traffic circulation meetings hosted by the City and MnDOT
and facilitated by SRF. As the homeowners have viewed the need for additional road connections and
the potential for business activity in the area,they have requested that the City distribute a survey to see
how many of them would be interested in selling their properties to be incorporated into the
development of the area. That survey is being distributed at this time and results will be available
within the next several weeks.
At the present time, staff is requesting general direction with respect to several points:
• Should staff continue to encourage cooperation among the remaining property owners to bring
about a comprehensive redevelopment and incorporate the City properties at that time?
• Should the City solicit proposals from exiting property owners,partnerships of property owners or
outside developers for redevelopment of the Lawrence Avenue and Linde Lane areas?
• Is the City in a better position to solicit proposals at the present time with several property owners
or in the future if additional consolidation of ownership occurs?
• Under what circumstances would the City underwrite any additional redevelopment costs besides
the acquisition of the Lawrence and Linde homes?
• Under what circumstances would the City be willing to facilitate redevelopment of the homes on
Blue Gentian Road?
Direction to be considered: To provide staff direction on the issues outlined above.
DISCUSS PROCESS FOR SCHEDULING A PUBLIC INFORMATIONAL MEETING
TO CONSIDER WINTER TRAIL MAINTENANCE
The City Council has received correspondence and public input suggesting that the City consider
expanding its winter trail maintenance program. It was determined that an informational meeting
would be held to allow testimony and input from the community regarding an expansion of the existing
winter trail maintenance program. Before scheduling the public informational meeting,the City
Administrator is directed to schedule an item on this workshop schedule to discuss the process for
scheduling the meeting.
The City Administrator and Director of Public Works have discussed this item and for additi nal
• information refer to a memo prepared by the Director of Public Works enclosed on pages
through�. This memo addresses a schedule for the community to provide input and the City
Council to consider a policy relative to the winter trail maintenance program.
Direction to be considered: To provide staff with direction on the process through scheduling the
public informational meeting as outlined in the attached memo. It should be noted that the purpose of
this agenda item is to discuss process for the public informational meeting,not the pros and cons of
implementing a winter trail maintenance program. There will be background information provided in
advance of the public informational meeting on this matter.
PRESENTATIONS RE: PROPOSED TEEN CENTER
The City Council was presented a proposal by the Southwest Area YMCA to participate as a partner
in the construction of a teen lounge/meeting room addition t the existing YMCA facility located on
Opperman Drive. Enclosed on pages A6 through is a copy of the teen center proposal.
(A copy of this proposal was forwarded to the City Council approximately two(2)weeks ago.) Mr.
Tim Staley,Executive Director for the Southwest Area YMCA,and Don Chapdelaine, Chairperson of
the YMCA Branch Board of Directors,will be present to make a presentation and answer questions.
The City has also been approached by Mr. Michael Vincent on behalf of the Eagan Lions Club to
consider space on the mezzanine level of the Civic Arena building that could be enclosed as a teen
center/teen meeting area. Mr. Vincent's proposal was not available at packet dictation;it will be
• distributed to the Council at Tuesday evening's meeting. Mr. Vincent will be present at the meeting to
make a brief presentation and answer questions regarding this proposal.
Direction to be considered: To provide direction to the Southwest Area YMCA and Eagan Lions
Club regarding their proposals for providing space to accommodate local teen groups.
DISCUSSION RE: PROPOSED TOBACCO ORDINANCE
During the 1997 legislative session a state law was passed with the primary purpose of reducing illegal
youth access to tobacco products. There has been a great deal of discussion about the most
appropriate mechanism to implement the law in individual cities. Dakota County cities have discussed
the merits of having a similar ordinance countywide. The success of the countywide curfew has been
noted and has served as a model for implementing a similar approach to the tobacco ordinance.
Enclosed on pase(�is a copy of a letter outlining the process to be used to attempt to meet the
objective of a countywide tobacco ordinance. Enclosed on pages,_through _is a copy
of the proposed draft uniform tobacco ordinance as prepared by county staff. Also enclosed on pages
@,3 through c�,'are some additional options which may help to fin ther reduce youth access
to tobacco products. Enclosed on page_ is a copy of a memo from Police Chief Gegan
outlining enforcement efforts by the Eagan Police Department over the past few years.
.3
Direction to be considered: To first decide if Eagan desires its own tobacco ordinance and if so,to
provide direction to City staff on the proposed tobacco ordinance by determining which if any options
should be added for inclusion in the ordinance.
DISCUSSION RE: GENERAL FUND BALANCE
The City has maintained the policy that the fund balance from the General Fund be at a level of 30%to
35%of the following year's operating budget. That level is determined to be the amount necessary to
provide adequate working capital for operations and to provide an additional reserve to deal with any
emergencies,revenue shortfalls or opportunities. Due to very successful years of operations in both
1996 and 1997,the fund balance has become higher than the overall policy target set by the City
Council and in order to meet the 35%level of the 1998 budget, a transfer of$4,122,612 is available.
The City Administrator and Director of Finance have discussed the status of the fund balance through a
memo prepared by the Director of Finance and are offering a variety of suggestions as to the
appropriate use of the money if it is to be transferred from the General Fund. The only
recommendation is to transfer a portion of the General Fund balance to the Equipment Revolving
Fund and to the Debt Service Funds to defense those bonds. The remainder of the fund balance is
clearly a public policy determination by the City Council.
For a copy of a memo that provides additional information about the fund balance and some suggested
uses for the fund balance refer to pages v) -9 through ' /
Direction to be considered: To provide direction to the City Administrator and Director of Finance •
for an appropriate use of the fund balance that currently exceeds the 35%to 401/o level.
/S/ Thomas L. Hedges
City Administrator
. . D
FEB 1 919 %
. 1 E S J.S.I n,• r•;,,, M .
AL
February 17, 1998 -
Mr.Mike Ridley, Senior Planner
City of Eagan
3830 pilot Knob Road
Eagan,MN 55122
Dear Mike:
I am writing this letter on behalf of the Minnesota Valley Transit Authority(MVTA)to request
assistance from the City of Eagan regarding expansion and possible joint-use development
options for the Yankee Doodle/Pilot Knob Road Park and Ride lot. Specifically,we are asking
the city to determine if joint-use is appropriate for this site,to define their review and approval
process(PUD or otherwise)and zoning requirements.
BACKGROUND
1
In January 1996, MVTA took ownership of the park and ride property from MnDOT for future
expansion and possibly combining commercial/retail uses at the site to enhance passenger
convenience. Part of the property transfer agreement from MnDOT to MVTA included the
provision that MVTA relieve them of all operations and maintenance responsibilities for the site.
MnDOT has decided to not provide maintenance for any transit facilities as part of their effort to
reduce costs throughout the region. MVTA,as the primary ustr of this site,must now seek a
funding source to cover these costs.
The land area is approximately 5.5 acres with opportunities to add 0.5 acres of additional
MnDOT right-of-way for parking area along the I-35E side of the lot. The lot currently holds
260 vehicles and has been completely full for over two years. Preliminary designs estimate that
the lot can be more efficiently designed to hold up to 500 vehicles along with 8,000 to 12,000
S.F. of retail building pad area.
MVTA has completed a facilities inventory and has determined that this location should be
expanded due to increases in ridership. Ridership is increasing at a rate of 6%to 8%each year
over the MVTA service area with over 70%of all riders accessing the system using park and
ride. Historically,as park and ride is increased, so too does ridership. MVTA needs to stay
ahead of park and demand or,potential new riders will become discouraged trying to access the
system because of the lack of adequate park and ride facilities.
-
Mike Ridley
Page-2
JOINT USE TRANSIT STATIONS
MVTA, since the initial development of the Burnsville Transit Station,has sought to bring"Joint
Use"opportunities to the majority of large park and ride stations. There are four primary reasons
to work towards Public-private partnership within the transit system context. First,they generate
capital funding sources to complete facility expansions and terminal improvements, second,they
provide an alternative funding source for operations and maintenance of terminals' and park and
ride facilities,third,they provide an active mid-day use to reduce vandalism in otherwise
stagnant park and ride lots,and most importantly,joint use provides convenience services to
transit riders which may succeed in attracting new ridership.
These conveniences, such as food take-out, dry cleaners,postage centers, and ATM banking also
help to reduce ancillary SOV trips in the area by providing services as part of using transit. It is
our intent to try and work with existing businesses within the City of Eagan to provide satellite
locations at the Yankee Doodle Road Transit Station. As an example,we would like to initiate a
relationship between MVTA and Byerly's to allow transit patrons to order take-out food or
groceries and be able to pick them up at the station site within a"food-court"type environment.
These"window fronts"would provide great convenience to passengers while providing
enhanced opportunities for existing businesses within the community. This general concept,
while nationally has proven very successful on larger scales, continues to provide challenges for
the MVTA as well as city and county governments with regards to legal process, zoning and
ownership issues. S
We are requesting that you initiate discussion at the appropriate City Council work session to
review this issue and provide us with some direction. A potential retail/commercial developer
has contacted MVTA with interest in our concept at the Yankee Doodle site. We feel this would
be an excellent time to review development options and come to an understanding with the city
on our best course of action.
Sincerely,
LSA Design, nc.
Jame B. ache ASL
c: Beverley Miller—MVTA
Leslie Vermillion—Dakota County
File C:\95-22\020998DR.let.doc
Revised 2-17-98
MEMO
' city of eagan
TO: MAYOR& CITY COUNCIL
C/O THOMAS L HEDGES,CITY ADMINISTRATOR
FROM: THOMAS A COLBERT,DIRECTOR OF PUBLIC WORKS
DATE: MARCH 20, 1998
SUBJECT: WINTER TRAIL MAINTENANCE PROGRAM
PROGRAM/POLICY REVIEW PROCESS
The City Council has requested the staff to schedule an item for a future Council workshop agenda
to address the continued requests being received regarding expanding the current winter trails
maintenance program. It is my understanding that this item has been scheduled for discussion by
the City Council at their March 24, 1998 workshop session.
BACKGROUND
. From its early township, village and small but growing City years, the City of Eagan has slowly
been adding sidewalks and trailways in conformance with a master Comprehensive Trailway Plan.
These sidewalks and trailways have been installed primarily with the adjacent major road
construction and subdivision developments. As the City continued to develop, these isolated
segments of sidewalks and trails began to provide a continuity throughout our community
interlinking neighborhoods, schools,parks and commercial retail centers as well as interconnecting
with County and other regional systems. Presently, there are approximately 100 miles of
concrete/bituminous sidewalks/trailways within our community.
Within the last 5+ years, the City has received increasing inquiries and comments from the public
requesting that these trails be maintained year around. Because these sidewalks and trails were
installed gradually and incrementally, the City had assumed a policy of all sidewalks and trails
being available for only three-season usage. No provisions, equipment, personnel or budgets were
allocated to expand this three-season program into a year-around program incorporating winter
maintenance until 18 months ago.
In October of 1996, the City Council formally approved and authorized a limited winter
sidewalk/trail maintenance program(incorporating 5+miles)with operational policies. This was to
be implemented on an experimental basis for only those sidewalks and trails that would serve the
local schools under the school district's transportation policy for walkers. The Council also
adopted an Ordinance requiring adjacent property owners of local residential sidewalks
07
Page 1 of 3
(approximately 1.7 miles) near elementary schools to perform the required snow removal
operations. The remainder (3.3 miles) became the responsibility of the City with snow removal
being performed through contractual services. This experimental program was subsequently
renewed for the 1997-98 winter season. There have also been isolated cased of voluntary snow
removal of trail segments by unknown parties throughout the City.
ISSUES
The primary issues before the Council at this time are as follows:
1. Whether or not to continue or expand the current limited winter trail maintenance
program and, if so,to what extent.
• Entire system(100+/-miles)
• System-wide minus internal and duplicate trails(60+/-)miles
• School related trails(20+/-miles)
• Any combination of above, plus other factors: High density vs. commercial
retail;bus stops(MVTA and/or school);recreational destinations; etc.
2. How to finance the increased costs associated with program expansion.
• Increase taxes
• Reduce other existing programs and transfer funds
• Obligate adjacent property owners
• Any combination of above
3. What level of service should be provided.
• Total accumulation required before removal is required(i.e., 1"vs. 2")
• Start and completion timeframes (i.e., 24 hours after snowfall cessation;
completed within 24 hours)
• City forces/equipment vs. contractual services
PROCESS
City Councilmembers and staff have received several requests from citizens that the winter trail
maintenance program be expanded. Several have also requested an opportunity to discuss and
support the expansion of this maintenance program. In order to provide the public an opportunity
to participate in the discussion and allow the Council to receive pertinent information in a timely
manner,the following process is proposed:
1. Process Adopted. At the Special Council Workshop of March 24, 1998, the Council
will discuss the extent of public interest in expanding the winter trail maintenance
program and establish a process for formal consideration.
2. Public Informational Meetine. If scheduled, a.community informational meeting
could be held in the Council Chambers on either April 14 (Tues.) or April 16
. U
Page 2 of 3
(Thurs.). If appropriate, a live telecast of staff's presentation and community
. feedback could be coordinated along with a tape delay rebroadcast on another
evening. Staff would provide a background of the trail maintenance program
complete with video excerpts, cost estimates, trail system maps, differing criteria,
etc. Community input would be recorded and the record would remain open for 2-4
weeks to allow follow-up written comments,e-mail,phone calls,etc.
3. Council Consideration of Innes The Council could then review the public's input
and comments along with various.program options,propose a budget and method of
financing along with other program and policy issues. This could be scheduled for a
Special Council Workshop(May 19).
4. Presentation of Proposed Proomn/Ordinances. In June, the City Council could
present their proposal and hold a formal discussion at a regular Council meeting.
Based on public input and other information provided, the Council could proceed
with whatever formal action they deem appropriate. Any costs associated with the
final program could then be taken into consideration with the 1999 budget process
during the following months.
SUMMARY
In summary, while the winter trail maintenance program is scheduled for the Council workshop
session of March 24,the discussion should focuse on:
•
1. The process to present program proposals to the public and receive input for Council
consideration of establishing a formal program.
2. Discussion and subsequent direction to staff as to what should be presented at the
public informational meetings.
3. Confirmation of various community and Council meetings identified in the process.
Sensitivity should be considered for those property owners who may not be aware of the March 24
workshop session and may be interested in providing input.
Arnie Erhart, Superintendent of Streets/Equipment, and myself will be available at all meetings to
help the Council through their public information and decision-making process.
Respectfully submitted, cc: Arnie Erhart, Supt. of Streets/Equipment
Ken Vraa,Director of Parks&Recreation
Paul Olson, Supt.of Parks
Director of Public Works
AC/jj g
Page 3 of 3
.,
Southwest Area YMCA
f
550 Opperman Drive
Eagan,NEN 55123
612'456-9622 1d n-o
( 1 1�e build saong kids. •
fax(612)683-4704 strong families,strong communiti�
PartnershipProposal
To The _
CityEaganof
February 25, 1998
l�
Proposal request:
Request for funding for a Teen Center to be located at the Southwest Area YMCA. This
center will be the base for all YMCA teen programs as well as a location for local teen
groups to conduct meetings and activities. This request is that the City of Eagan become a
partner with the YMCA in this project. As a partner in this community project,the City
of Eagan would contribute$75,000 to the.cost of the project. All staffing,equipment,
training and program expenses would be the responsibility of the YMCA. The YMCA
will also commit to continuing its leadership with healthy community initiatives that can
be based at the YMCA.
Funding and costs:
The teen center will be a part of a$300,000 renovation and expansion project that will
add approximately 2,500 sq. feet to the YMCA and renovate an additional 2,300 sq. feet.
The project cost for the teen center portion is approximately$90,000. This new teen
center will complement other facilities such as the computer lab,the gyms,pools,fitness
center and new climbing wall. These program areas will also be available for use by teens
during specific times. The teen center will be open during afternoon and evening hours
on weekdays and all day on weekends.
Operations:
The teen center will be staffed by the YMCA on weekday afternoons and evenings,and
on Saturdays and Sundays. Staff costs are projected at$8,000 to$10,000 per year. The
YMCA will offer a special teen center membership that will let a teen use the teen center
and the computer lab. The fee for this membership would be only$25 per year. This fee
will help offset the cost of staffing the center. The entire YMCA would be accessible
during special teen nights and other program times. Teens would also have the option of
the normal monthly membership for use of the entire YMCA at$20 per month.
Background and need:
Currently there over 700 teens ages 12 to 18 that are members of our YMCA and another
200 to 300 that have been involved in programs or activities. This makes up 11%of our
membership base and 13%of our total users. Eagan residents alone make up 80%of total
memberships at the YMCA and of all users. We believe this percentage will directly
correlate to the amount of teen usage. Adding new programs and new facilities for teens
such as a climbing wall and the teen center,in addition to our computer lab,we feel that
we will be able to offer quality activities for teens of our area.
Currently there are almost 4000 teens at Eagan High School,Dakota Hills,and
B1ackHawk Middle schools. Many of them are looking for a place to go to relax,have
fun,and not get hassled. We feel the YMCA is a place teens can do that. Currently,the
first and third Saturday nights are teen nights at the YMCA.Up to 100 teens have
attended these events but with more facilities and additional promotion,the YMCA
would become the place for teens to go Saturday night. The teen center capacity would be
between 30 to 35 kids at one time,along with other program areas,the YMCA will have
sufficient room for many teens. There is no plan to limit the number of teen memberships
to the YMCA.
Schedules and Activities:
A teen council will work with our program staff to design the teen center,schedule
programs and plan activities for the YMCA. These programs will not be limited to
YMCA members but all teens in the community. Programs and activities will be offered
year round including summer,school release days and on weekends. Coordinating these
programs with existing local church programs,school and other community agency
programs will be instrumental in maximizing programs and activities for teens without
duplication.
Recognition:
As a lead partner with the YMCA,the City of Eagan will be recognized on the YMCA
Founders wall as well as recognized on the Teen Center itself. At the completion of the
construction,the YMCA will also conduct a dedication program to thank all contributors
for their participation in the project.
. � II
7300 WEST 147TH STREET SUITE 504 ST. PAUL. IAN 55124-7580 (612) 431-4433
Main Entry
Membership
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Existing Meeting
Rooms
Existing
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Optioned
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wall
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Teen Lou e/ II
Ston. Meeting R II
1C1d's (1121 sq. )
Gymnasium II
(1159 sq.ft.) II
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13
DAKOTA COUNTY DOBNA MLA DIREC- R
(612)552-3100
PUBLIC HEALTH DEPARTMENT
COMMUNITY SERVICES DIVISION
" REPLY TO: C 161 North Concord Exchange D 14055 Galaxis Avenue West
_�►- Suite 450 Apple Valley.MN 55124
South St.Paul.MN 55075 (612)601-7500
(612)552.3100 Fax(612)601.7565
Fax(612)552-3130
February 24, 1998
Dear City Administrator,Township Official,Police Chie&
The Minnesota Legislature during the 1997 session passed a state law designed to reduce illegal youth access to
tobacco products. The law states that cities may and counties shall enact a youth access tobacco ordinance. The
State statute, effective August 1, 1997, creates statewide minimum standards allowing cities to enact additional
stricter policies that best fit the needs of their community. Any city or township without an ordinance could come
under the jurisdiction of a county government tobacco access ordinance.
At the November 13 City/County Managers meeting, the managers discussed the value of a uniform tobacco
ordinance that could be applied throughout the County. This ordinance would be similar to the Dakota County
curfew ordinance that was effective August 1, 1995. A task force comprised of City Manager/Police Chief and
County staff met to discuss the steps needed to develop a uniform tobacco ordinance. The following
recommendations were made by the task force at the City/County Managers meeting on December 18, 1997.
• All cities/townships should wait to develop or adopt their own tobacco ordinance.
• All cities/townships will have the opportunity to provide feedback on the model tobacco ordinance to Count's
staff.
• County staff will draft a uniform tobacco ordinance based on the feedback.
• All cities/townships will be asked to comment on the draft uniform tobacco ordinance.
• Cities/townships can decide whether to adopt the uniform tobacco ordinance or develop their own local tobacco
ordinance.
Enclosed is a copy of the model tobacco ordinance which was developed using the League of Minnesota Cities
model ordinance. In addition to the model ordinance, a copy of `Beyond the Minimum: Additional Options for
Reducing Youth Access to Tobacco" is included. This document, developed by the Smoke-Free 2000 Coalition,
was included in the training manual from the fall informational sessions that were offered to help local government
better understand the legal requirements and implications of the new law. These informational sessions were
sponsored by the League of Minnesota Cities, Association of Minnesota Counties, Minnesota Department of
Health,and the Smoke-Free 2000 Coalition.
Please review the enclosed model tobacco ordinance and give feedback to Gina Adasiewicz, Dakota County
Community Health Educator at 891-7509, fax 891-7565, or email GABR4@wsc.co.dakota.mn.us, no later than
March 20, 1998. Steps will then be taken to move forward on an ordinance so that Dakota County youth will have
decreased access to tobacco.
Sincerely,
q�av� A. V
Donna Anderson Brandt Richardson Tom Hedges
Public Health Director County Administrator Administrator,City of Eagan
Chair of City/County
/ Managers Group
Printed on recycled paper.20%postconsumer �� AN EQUAL OPPORTUNITY EMPLOYER
t
MODEL TOBACCO ORDINANCE
Ordinance#
The hereby establishes an ordinance relating to the sale, possession and
use of tobacco, tobacco products and tobacco related devices in the City of and to
reduce the illegal sale,possession, and use of such items to and by minors.
Section 100. Purpose. Because the City of recognizes that many persons under the
age of 18 years purchase or otherwise obtain, possess and use tobacco, tobacco products and tobacco
related devices, and such sales, possession and use are violations of both state and federal laws; and
because smoking has been shown to be the cause of several severe health problems which
subsequently place a financial burden on all levels of government; this ordinance shall be intended to
regulate the sale, possession and use of tobacco, tobacco products and tobacco related devices for the
purpose of enforcing and furthering existing laws, to protect minors against the serious effects
associated with the illegal use of tobacco, tobacco products and tobacco related devices, and to
further the official public policy of the State of Minnesota in regard to preventing young people from
starting to smoke as stated in Minnesota Statutes, Section 144.391.
Section 200. Definitions and Interpretations. Except as may otherwise be provided or clearly
implied by context, all terms shall be given their commonly accepted definitions. The singular shall
include the plural and the plural shall include the singular. The masculine shall include the feminine
and vice-versa. The term "shall" means mandatory and the term "may" means permissive. The
following terms shall have the definitions given to them:
Subd. 1 Tobacco or Tobacco Products. "Tobacco" or "Tobacco Products" shall mean
any substance or item containing tobacco leaf, including but not limited to, cigarettes;
cigars; pipe tobacco; snuff; fine cut or other chewing tobacco; cheroots; stogies;
perique; granulated, plug cut, crimp cut, ready-rubbed, and other smoking tobacco;
snuff flowers; Cavendish; shorts; plug and twist tobaccos; dipping tobaccos; refuse
scraps, clippings, cuttings. and sweepings of tobacco; and other kinds and forms of
tobacco leaf prepared in such manner as to be suitable for chewing, sniffing, or
smoking.
Subd. 2 Tobacco Related Device. "Tobacco Related Device" shall mean any tobacco
product as well as a pipe, rolling papers, or other device intentionally designed or
intended to be used in a manner which enabled the chewing, sniffing, or smoking of
tobacco or tobacco products.
Subd 3 Self-Service Merchandising. "Self-Service Merchandising" shall mean open
displays of tobacco, tobacco products or tobacco related devices in any manner where
any person shall have access to the tobacco, tobacco products or tobacco related
devices, without the assistance or intervention of the licensee or the licensee's
employee. Such assistance or intervention shall involve-the actual physical exchange
of the tobacco, tobacco product or tobacco related device between the customer and
the licensee or employee. Self-service merchandising shall not include vending
machines.
Subd. 4 Vending Machine. "Vending Machine" shall mean any mechanical, electric
or electronic, or other type of device which dispenses tobacco, tobacco products or
tobacco related devices upon the insertion of money, tokens or other form of payment
directly into the machine by the person seeking to purchase the tobacco, tobacco
products or tobacco related device.
Subd. 5 Individually Packaged. "Individually Packaged" shall mean the practice of
selling any tobacco or tobacco product wrapped individually for sale. Individually
wrapped tobacco and tobacco products shall include, but not be limited to, single
cigarette packs, single bags or cans of loose tobacco in any form, and single cans or
other packaging of snuff or chewing tobacco. Cartons or other packaging containing
more than a single pack or other container as described in this subdivision shall not be
considered individually packaged.
Subd. 6 Loosies. "Loosies" shall mean the common term used to refer to a single or
individually packaged cigarette.
Subd. 7 Minor. "Minor" shall mean any person who has not yet reached the age of
eighteen(18) years.
Subd. 8 Retail Establishment. "Retail Establishment" shall mean any place of
business where tobacco, tobacco products or tobacco related devices are available for
sale to the general public. Retail establishments shall include, but not be limited to,
grocery stores, convenience stores and restaurants.
Subd. 9 Moveable Place of Business. "Moveable Place of Business" shall refer to any
form of business operated out of a truck, van, automobile, or other type of vehicle or
transportable shelter and not a fixed address store front or other permanent type of
structure authorized for sales transactions.
Subd. 10 Sale. A "Sale" shall mean any transfer of goods for money, trade, barter, or
other consideration.
Subd, i l Compliance Checks. "Compliance Checks" shall mean the system the
uses to investigate and ensure that those authorized to sell tobacco, tobacco
products and tobacco related devices are following and complying with the
requirements of this ordinance. Compliance checks shall involve the use of minors as
authorized by this ordinance. Compliance checks shall also mean the use of minors
who attempt to purchase tobacco, tobacco products or tobacco related devices for
educational, research and training purposes as authorized by state and federal laws.
Section 300 License. No person shall sell or offer to sell any tobacco, tobacco products or tobacco
related device without first having obtained a license to do so from the City of
/6
2
Subd. 1 ARplication. An application for license to sell tobacco, tobacco products or
tobacco related devices shall be made on a form provided by the City of
The application shall contain the full name of the applicant, the applicant's residential
and business addresses and telephone numbers, the name of the business for which the
license is sought, and any additional information the City of deems
necessary. Upon receipt of a completed application, the shall forward the
application to the for action at the next regularly
scheduled meeting. If the shall determine that an
application is incomplete, he or she shall return the application to the applicant with
notice of the information necessary to make the application complete.
Subd. 2 Action. The may either approve or deny the license, or it
may delay action for such reasonable period of time as necessary to complete any
investigation of the application or the applicant it deems necessary. If the
approves the license, the shall issue the license to the
applicant. If the denies the license, notice of the denial shall be
given to the applicant along with notice of the applicant's right to appeal the decision.
Subd. 3 Term. All licenses issued under this ordinance shall be valid for one calendar
year from the date of issue.
Subd. 4 Revocation or Suspension. Any license issued under this ordinance may be
revoked or suspended as provided in the Violations and Penalties section of this
ordinance.
Subd. 5 Transfers. All licenses issued under this ordinance shall be valid only on the
premises for which the license was issued and only for the person to whom the license
was issued. No transfer of any license to another location or person shall be valid
without the prior approval of the
Subd. 6 ':Moveable Place of Business. No license shall be issued to a moveable place
of business. Only fixed location businesses shall be eligible to be licensed under this
ordinance.
Subd. 7 Display. All licenses shall be posted and displayed in plain view of the
general public on the licensed premise.
Subd. 8 Renewals. The renewal of a license issued under this section shall be
handled in the same manner as the original application. The request for a renewal shall
be made at least thirty days but no more than sixty days before the expiration of the
current license.
Section 400. Fees. No license shall be issued under this ordinance until the appropriate license fee
shall be paid in full. The fee for a license under this ordinance shall be a set in accordance with a fee
schedule adopted by the
3
Section 500. Basis for Denial of License. The following shall be grounds for denying the issuance
or renewal of a license under this ordinance. [Except as may otherwise be provided by law, the
existence of any particular ground for denial does not mean that the City of must deny
the license. If a license is mistakenly issued or renewed to a person, it shall be revoked upon the
discovery that the person was ineligible for the license as provided under this section.]
A. The applicant is under the age of eighteen(18)years.
B. The applicant has been convicted within the past five years of any violation of a
federal, state, or local law, ordinance provision or other regulation relating to tobacco
or tobacco products or tobacco related devices.
C. The applicant has had a license to sell tobacco, tobacco products or tobacco related
devices revoked within the preceding twelve months of the date of application.
D. The applicant fails to provide any information required on the application, or
provides false or misleading information.
E. The applicant is prohibited by federal, state, or other local law, ordinance or other
regulation from holding such a license.
Section 600. Prohibited Sales. It shall be a violation of this ordinance for any person to sell or offer
to sell any tobacco, tobacco product or tobacco related device:
A. To any person under the age of eighteen (18)years.
B. By means of any type of vending machine, except as may otherwise be provided in
this ordinance.
C. By means of self-service merchandising whereby the customer does not need to
make a verbal or written request to an employee of the licensed premise in order to
receive the tobacco, tobacco product or tobacco related device and whereby there is
not a physical exchange of the tobacco, tobacco product or tobacco related device
between the licensee or the licensee's employee
and the customer.
D. By means of loosies as defined in Section 200 of this ordinance.
E. Containing opium, morphine, jimson weed, bella donna, strychnos, cocaine,
marijuana, or other deleterious, hallucinogenic, toxic, or controlled substances t exce
8 p
nicotine and other substances found naturallyin tobacco or
added as art of
p an
otherwise lawful manufacturing process.
F. By any other means, to any other person, in any other manner or form prohibited
by, federal, state, or other local law, ordinance provision, or other regulation.
4
Section 700. Vending Machines.
tion #1: It shall be unlawful for any person licensed under this ordinance to allow
the sale of tobacco, tobacco products or tobacco related devices by the means of a
vending machine.
ti n #2: It shall be unlawful for any person licensed under this ordinance to allow
the sale of tobacco, tobacco products or tobacco related devices by the means of a
vending machine unless minors are at all.times prohibited from entering the licensed
establishment.
Section 800. Self-Service Sales. It shall be unlawful for a licensee under this ordinance to allow the
sale of tobacco, tobacco products or tobacco related devices by any means where by the customer
may have access to such items without having to request the item from the licensee or the licensee's
employee and whereby there is not a physical exchange of the tobacco, tobacco product or the
tobacco related device between the licensee or his or her clerk and the customer. All tobacco, tobacco
products and tobacco related devices shall either be stored behind a counter or other area not freely
accessible to customers or in a case or other storage unit not left open and accessible to the general
public. Any retailer selling tobacco, tobacco products or tobacco related devices at the time this
ordinance is adopted shall comply with this section within days. New retailers selling
tobacco commencing business after the adoption of this ordinance shall comply with this section
immediately.
Section 900. Responsibility. All licensees under this ordinance shall be responsible for the actions
of their employees in regard to the sale of tobacco, tobacco products or tobacco related devices on the
licensed premises, and the sale of such an item by an employee shall be considered a sale by the
license holder. Nothing in this section shall be construed as prohibiting the City of from
also subjecting the clerk to whatever penalties are appropriate under this ordinance, state or federal
law, or other applicable law or regulation.
Section 1000. Compliance Checks and Inspections. All licensed premises shall be open to
inspection by the county official during regular business hours. From time to time, but at least once
per year, the City of shall conduct compliance checks to ensure compliance with the
provisions of this ordinance. Such compliance checks shall involve, , with the written
consent of their parents or guardians, minors over the age of fifteen (15) years but less than eighteen
(18) years, to enter the licensed premise to attempt to purchase tobacco, tobacco products or tobacco
related devices. Minors used for the purpose of compliance checks shall be supervised by designated
law enforcement officers or other designated county personnel. Minors used for compliance checks
shall not be guilty of the unlawful purchase or attempted purchase, or the unlawful possession of
tobacco, tobacco products or tobacco related devices when such items are obtained as a part of the
compliance check. No minor used in compliance checks shall attempt to use a false identification
misrepresenting the minor's age, and all minors lawfully engaged in a compliance check shall answer
all questions about the minor's age asked by the licensee or his or her employee and shall produce any
identification, if any exists, for which he or she is asked. Nothing in this section shall prohibit other
compliance checks authorized by state or federal laws for educational, research, or training purposes,
or required for the enforcement of a particular state or federal law.
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5
Section 1100. Illegal Acts. Unless otherwise provided, the following acts shall be a violation of this
ordinance.
Subd. 1 Illegal Sales. It shall be a violation of this ordinance for any person to sell or
otherwise provide any tobacco, tobacco product or tobacco related device to any
minor.
Subd. 2 Illegal Possession. It shall be a violation of this ordinance for any minor to
have in his or her possession any tobacco, tobacco product or tobacco related device.
This subdivision shall not apply to minors lawfully involved in a compliance check.
Subd. 3 Illegal Use. It shall be a violation of this ordinance for any minor to purchase
or attempt to purchase or otherwise obtain any tobacco, tobacco product or tobacco
related device, and it shall be a violation of this ordinance for.any person to purchase
or otherwise obtain such items on behalf of a minor. It shall further be a violation for
any person to coerce or attempt to coerce a minor to illegally purchase or otherwise
obtain or use any tobacco, tobacco product or tobacco related device. This subdivision
shall not apply to minors lawfully involved in compliance check.
Subd. 5 Use of False Identification. It shall be a violation of this ordinance for any
minor to attempt to disguise his or her true age by the use of a false form of
identification, whether the identification is that of another person or one on which the
age of the person has been modified or tampered with, to represent an age older than .
the actual age of the person.
Section 1200. Violations.
Subd. 1 Notice. Upon discovery of a suspected violation, the alleged violator shall be
issued, either personally or by mail, a citation that sets forth the alleged violation and
which shall inform the alleged violator of his or her right to be heard on the accusation.
Subd. 2 Hearings. If a person accused of violating this ordinance so requests, a
hearing shall be scheduled, the time and place of which shall be published and
provided to the accused violator.
Subd. 3 Hearing Officer. Such hearing shall be held before a hearing examiner as
determined by the , and shall be open to the public.
Subd. 4 Decision. If the hearing officer determines nes that a violation of this ordinance
did occur, that decision, along with the hearing officers reasons for finding a violation
and the penalty to be imposed under Section 1300 of this ordinance, shall be recorded
in writing, a copy of which shall be provided to the accused violator. Likewise, if the
hearing officer finds that no violation occurred or finds grounds for not imposing any
penalty, such findings shall be recorded and a copy provided to the acquitted accused
violator.
aL9
6
• Subd. 5 Appeals. Appeals of any decision made by the hearing officer shall be filed
• in the district court for the jurisdiction of the City of in which the alleged
violation occurred.
Subd. 6 Misdemeanor Prosecution. Nothing in this section shall prohibit the County
Attorney from seeking prosecution as a misdemeanor for any alleged violation of this
ordinance. If the elects to seek misdemeanor prosecution, no
administrative penalty shall be imposed.
Subd. 7 Continued Violation. Each violation, and every day in which a violation
occurs or continues, shall constitute a separate offense.
Section 1300. Penalties.
Subd. 1 Licensees. Any licensee found to have violated this ordinance, or whose
employee shall have violated this ordinance, shall be charged an administrative fine of
$75 for a first violation of this ordinance; $200 for a second offense at the same
licensed premises within a twenty-four month period; and $250 for a third or
subsequent offense at the same location within a twenty-four month period. In
addition, after the third offense, the license shall be suspended for not less than seven
days.
Subd. 2 Other Individuals. Individuals, other than minors regulated by subdivision 3
of this subsection, found to be in violation of this ordinance shall be charged an
administrative fee of 550.
Subd. 3 Minors. Minors found in unlawful possession of, or who unlawfully
purchase or attempt to purchase, tobacco, tobacco products or tobacco related devices,
shall be
(Note: The state law requires the City of to consult with interested parties
such as the courts, educators, parents, and children, to develop an appropriate penalty
of minors in that particular community.)
Subd. 4 Misdemeanor. Nothing in this section shall prohibit the City of
from seeking prosecution as a misdemeanor for any violation of this ordinance.
c�2/
7
Section 1400. Exceptions and Defenses.
Subd. 1 Religious. Spiritual or Cultural Ceremony. Nothing in this ordinance shall prevent •
the providing of tobacco, tobacco products of tobacco related devices to a minor as part of a lawfully
recognized religious, spiritual or cultural ceremony.
Subd. 2. Reliance on Proof of Age. It shall be an affirmative defense to the violation of this
ordinance for a person to have reasonably relied on proof of age as described by state law.
Section 1500. Severalbility and Savings Clause. If any section or portion of this ordinance shall be
found unconstitutional or otherwise invalid or unenforceable by a court of competent jurisdiction, that
finding shall not serve as an invalidation or effect the validity and enforceability of any other section
or provision of this ordinance.
Section 1600. Effective Date. This ordinance shall take effect
MD/C97-290
8
Page 40
Chapter 5
Beyond The Minimum: Additional Options for
Reducing Youth Access to Tobacco
CHAPTER HIGHLIGHTS
Other options for reducing youth access include_.
• Banning self-service tobacco
• Hanning vending machines
Requiring sellers to be of age
• Offering incentives to pass compliance checks
• limiting the number of tobacco licenses
• Limiting new tobacco licenses within a certain distance of schools
• Increasing administrative penalties
The new state law provides minimum standards for cities, townships
and counties to begin reducing illegal tobacco sales to youth. Many
Minnesota communities have already adopted more comprehensive
ordinances with provisions that are more effective in significantly reducing
• youth access to tobacco.
The following options are additional measures that communities can
choose to adopt:
1. A complete ban on self-service of tobacco.
Banning self-service tobacco displays is one of the most effective
measures a community can take to keep tobacco away from kids. Self-service
displays allow underage customers to help themselves to tobacco products
and present them to a store employee for purchase. In addition to reducing
theft of cigarettes by minors, this provision deters youth from attempting to
purchase tobacco, because asking for the product may increase the likelihood
that the clerk will ask for identification.
Until the FDA regulations take effect,the new state law only bans self-
service of single packages of tobacco, requiring individual 'packs of cigarettes
or canisters of chewing tobacco to be kept out of the reach of customers.
cw).,3
Page 41
Multi-packs and cartons are still accessible without the intervention of a store
employee.
Further, the state law excludes cigars and other forms of tobacco, such
as pipe tobacco, from the self-service ban Cities, townships and counties may
adopt ordinances that include these other forms of tobacco in partial or full
self-service bans.
Several Minnesota cities, including Fergus Falls, St. Louis Park, Prior
Lake, Montevideo, Golden Valley, Hermantown and Hibbing, have passed
ordinances that ban all self-service tobacco products. Other communities may
choose to pass a similar ordinance.
2 A complete ban on vending machines.
The state law bans vending machines except in facilities that cannot be
entered by minors. Vending machines are a major source of tobacco for ►
underage buyers. Compliance checks conducted in establishments where
minors are not allowed find that not only can they enter, but can successfully
purchase tobacco regularly.
3. Require sellers to be above the legal age (18) to sell tobacco.
The new state law does not address age of seller requirements. Several
Minnesota communities, including Savage, Chanhassen, Eden Prairie, and
Prior Lake, prohibit youth under the age of 18 from selling tobacco products.
The rationale is that if minors cannot purchase or possess tobacco, they also
should not sell tobacco. It also eliminates the peer pressure that is associated
with youth selling tobacco to other youth. Research shows it is easier for teens
to purchase from other teens. This provision does not in any way prohibit
youth under 18 from working in grocery stores, convenience stores, or other
establishments that sell tobacco. It only prohibits them from making tobacco
sales in the establishment.
Page 4:
C Offering incentives to pass compliance checks.
Several communities have explored ways to provide incentives to
stores to successfully pass compliance checks. Options include:
• Potential to win _ One Compliance check prOject got a major airline
to donate a free airline ticket to the project. Each of the retail
establishments that did not sell tobacco to a minor in a compliance check
were entered into a drawing to win the ticket.
• Lower hcens@ fec+e _ Cities have considered offering tiers of licensing fees
that tobacco vendors could choose from. For instance, a vendor who is
willing to eliminate all self-service tobacco may be charged a license fee
lower than those that do not eliminate self-service displays. This provides
an economic incentive to ban the displays.
S. Limiting the number of tobacco licenses.
A city, township or county may put a cap on the number of tobacco
licenses that they issue to establishments. The fewer licensed tobacco vendors
in a community, the fewer places available for teens to purchase tobacco.
However, there could be substantial challenges to this, and should not be
attempted without research.
6. Limiting new tobacco licenses within a proscribed distance of schools.
Easy youth access to tobacco undermines the work being done in
schools to teach kids that tobacco is bad for them. Cities, townships and
counties could send a message of support to these educational efforts by
limiting the sale and promotion of tobacco within a reasonable distance of
schools. This symbolic ban may make it more difficult for students to buy
tobacco before, during, and after school hours.
7. Increasing the administrative penalties.
The penalties arrived at by the Legislature were a compromise. These
fines are lower than those imposed by most cities that have already adopted
ordinances. Licensing authorities could choose to adopt higher penalties.
MEMORANDUM
EAGAN POLICE DEPARTMENT
3830 Pilot Knob Road
Eagan,MN 55122
612-6814700
612-6814738 FAX
DATE: March 19, 1998
TO: Gene VanOverbeke
FROM: Pat Geagan
SUBJECT: Tobacco Sales Enforcement
The Eagan Police Department has actively enforced under-age tobacco sales and use for the past several
years. In August of 1996,we conducted a sting operation with all of the tobacco sales licensees within
the City of Eagan. During that first sting we had 40%of the licensees sell tobacco products to minors.
Approximately one year later we conducted another sting operation and found that only 9% of the
tobacco licensees sold to minors. We have also sent letters to all of the tobacco sales licensees
explaining the ordinance and advising them that we be attempting to purchase tobacco products using a
minor. During the last sting operation in July of 1997, it appeared that the people who sold tobacco
products to minors in several cases were minors themselves and not the owners. Out of the
approximately 46 license holders,we only had four sell tobacco products to minors.
The Eagan Police Department has also conducted aggressive ticketing of minors who are found to be in
possession of tobacco products. The following reflects that enforcement:
1995 32 citations issued
1996 82 citations issued
1997 79 citations issued
1998 29 citations issued to date
As far as enforcement,the Eagan Police Department is one of the most active in Dakota County with its
tobacco sales enforcement. I am not aware of anything else that we can do,but to continue as we have
in the past with our enforcement efforts.
C29
21
`
- city of eagan MEMO
TO: City Administrator Hedges
FROM: Finance Director/City Clark VanOverbeke
DATE: March 16, 1998
SUBJECT: General Fund Fund Balance
Introduction
As we have closed the books on the 1997 fiscal year and prepared for the
annual audit, I have continued to monitor the fund balance in the General Fund.
The very successful year of operations we experienced in 1996 followed by
another successful year in 1997 has caused the fund balance to become
somewhat higher than the overall policy target set by the City Council. A
number of factors have contributed to these successful years from a financial
perspective. I will address these factors somewhat generally and then look in
more detail at the results of operations from 1997. My focus is almost entirely on
the General Fund, although my recommendations will involve opportunities in
other funds as well.
Backaound
The City's Fund Balance can and should be looked at as a savings account and
the use of it provides all the same options and opportunities as any other
savings account. At the most basic level, the balance will increase anytime the
City spends less than it receives in revenues. The City has consistently
practiced a couple of philosophies that make that result likely. First, we have
budgeted a contingency account from annual revenues. By its very definition
the contingency account will be totally spent in only very extreme cases. For
example, an emergency such as a natural disaster or a similar problem would
probably cause the entire contingency account to be spent. Naturally, there
would be some opportunity to recover some of those expenditures from other
governmental agencies over the long run. Second, we use conservative
budgeting practices in that we are attempting to minimize the reliance on
development related revenues. Because we budget revenues conservatively,
variances are generally favorable. On the expenditure side, we try to budget at
appropriate levels to carry out desired programs while limiting program
expansion or new program introduction. We expect departments to operate
within those budgets while allowing for extraordinary circumstances and making
adjustments as necessary and as they can be justified.
Year end 1996
At year-end 1996 the fund balance increased by $1,821,262 from $5,914,248 to
$7,735,510. $500,00 of that amount was specifically reserved for abatements
and $5,000,000 was designated for working capital. The total balance was
48.5% of the 1997 General Fund budget. The increase was generated when
revenues came in $1,576,942 higher than budgeted and expenditures came in
$244,320 less than budgeted. Although the magnitude is greater than
anticipated, an increase was expected for the reasons discussed earlier. A
decrease or even breaking even would have been cause for concern.
Year end 1997
The results from operations will be similar for 1997 and even somewhat better.
While the numbers are subject to audit, we expect that revenues will exceed the
budget estimate by $1,381,070 and expenditures will be under the budget by
$767,662. Those favorable variances combined will cause the fund balance to
increase by $2,148,732 from $7,735,510 to $9,884,242. That balance is 60.0%
of the 1998 General Fund balance and far enough out of the desired range so
that it should be addressed. Again, this type of result was expected at budget
time, although not to this magnitude.
Target fund balance level
The City has developed a policy that the fund balance in the General Fund
should be at a level of 30% to 35°x6 of the following year's operating budget.
That level was determined to be the amount necessary to provide adequate
working capital for operations and to provide an additional reserve to deal with
any emergencies, revenue shortfalls, or opportunities. Bringing the fund
balance to the 35% level of the 1998 budget would make a transfer of
$4,122,612 available. To achieve a slightly higher level of 40%, a transfer of
$3,299,522 could be made.
This situation is not a result of inadequate budgeting, poor management or
anything else that could be construed to be negative. The basic philosophies
incorporated into the budget and budgetary controls are sound and defensible.
The results are positive and provide opportunities that will be of benefit to both
current and future residents and taxpayers in the community.
1997 Revenues
On the revenue side for 1997, taxes were actually under the budget estimate by
$108,190. That is due primarily to delinquencies, although the collections are
approximately 99% of the levy. Licenses exceed the budget by $28,024 due
basically to how dog licenses were budgeted. Actual permit revenues are
$444,525 over the estimate reflecting more development than was budgeted.
Intergovernmental revenues exceed the budget by $234,481 which is due to
more state and federal grants than were anticipated at budget time. Charges for
0? k
services shows actual revenues of$360,824 over the budget estimate again due
. primarily to development related activity. Park program revenue exceeded the
budget by $35,483 and court fine revenue was over by $25,981 Program
revenues are under the budget estimate by$43,801 reflecting less project
administration revenue on special assessment projects. Interest income
exceeds the estimate by$272,694 which results from having a higher fund
balance to keep invested than was anticipated. Transfers into the General Fund
exceeded budget by$64,196. One transfer was carried over from 1996 and
consequently was not budgeted. An administrative transfer was also made from
the Spent'Tax Increment Fund and had not been budgeted. Finally, some work
done at the firing range was not budgeted and reimbursed by the Police
Forfeiture Fund. Other revenues were over budget by $51,994. The largest
items were the sale of City property, athletic field rent, contributions and
donations, and grants from non-government entities.
1997 Expenditures
On the expenditure side, nearly all operating departments came in under budget.
The total expenditures were 95.2% of the budget including the contingency.
Excluding the contingency, expenditures were 97.0% of the budget. The actual
departments ranged from a low of 86.9°x6 to a high of 105.1% of their individual
budgets. Community Development was significantly under the budget due to
personnel changes, etc. and Engineering was also significantly under budget
due to vacant positions. Of the favorable variance of$767,662, $303,400 was in
• the contingency account, $175,640 in Community Development, $142,858 in
Engineering and $144,629 in Parks and Recreation. These types of variances
are anticipated each year as circumstances vary depending on individual
department activities and personnel.
Possible uses of the fund balance
As I mentioned earlier in the memo, I believe that the level of the fund balance
should be addressed and changes authorized by the City Council retroactive to
12-31-97 for financial reporting purposes. The first component I am
recommending is to eliminate the $500,000 reserve for abatements. I believe
the problem with tax abatements due to valuation changes has passed and the
reserve is no longer necessary or appropriate. The reporting would then be a
little more straightforward and would more accurately reflect current
circumstances. The second component I am recommending is to transfer some
of the fund balance to other funds for specific purposes of City-wide benefit. I
have considered a number of funds and purposes for potential transfers. I think
the list is fairly comprehensive, although I don't claim to have thought of all of
the possibilities. It is important to acknowledge that I am not recommending
using the fund balance to subsidize future operations through any appropriations
to the operating budget. This is certainly an option; however, it would be like
supporting your standard of living from your savings account. It would work in
the short term but would cause problems when the account was reduced or
� q
spent all together. I think the recommended approach is consistent with how the
money was accumulated, is consistent with the City' budgeting practices, and •
finally benefits the taxpayers of today and into the future.
I have considered the following funds and uses and 1 am including my thoughts
on each of them as I go along. I have not attempted to quantify either the exact
cost of each use or the value of the benefit at this time. The possible uses are
listed in no particular order.
Equipment Revolving Fund This fund is used to acquire vehicles and
equipment for all departments and has been the source of a considerable
amount of study. The funding is currently a combination of an ad valorem tax
levy and the sale of equipment certificates that are repaid through a debt service
tax levy. We have been increasing the tax levy each year with the intention of
phasing out the use of equipment certificates or the credit card approach. A
transfer into this fund would eliminate the need to sell equipment certificates as
well as the resulting debt service tax levies.
Debt Service Funds The City could again avoid some future tax levies by
transferring money into one or all of the four remaining debt service funds which
are currently supported by a debt service tax levy. The principal amount
outstanding on the four (4) issues after the 1998 levy is collected is $2,410,000.
The bonds cannot be called so a formal defeasance would be required to avoid .
arbitrage problems by having the money on hand. That would involve a cost,
although I don't know how expensive it would be. Future tax levies could be
reduced by the principal amount of the bonds plus the interest savings.
Park Site Acquisition and Development Fund Given the limited amount of park
acquisition and development that can be completed from developer contributions
a transfer to this fund could supplement those revenues and allow for more park
development. This use would not avoid future costs and could be viewed as
contrary to the public's desires when the last referendum was defeated. On the
other hand, it could certainly be considered of community-wide benefit and might
allow for some development that otherwise probably will not get done in the
foreseeable future.
Special Assessments on City Property Fund The City has been levying
annually to pay special assessments on City property not owned by the utility
fund. Money could be set aside to eliminate this levy in the future. The dollar
amount of the levy is only $50,000 in 1998 and both future requirements and
especially the timing are uncertain. The plan is to pay all future assessments on
a current basis to eliminate any interest charges.
Aquatic Facility The City could transfer some of the balance to this project to
supplement the investment in the project from the Community Investment Fund,
30
if the project is authorized to be constructed. This would not necessarily reduce
• any future tax-related obligations but would be a reasonable use of the money.
Trail Maintenance Equipment In the event the decision is made to provide more
winter trail maintenance some of the balance could be used to purchase
equipment that would be required unless the entire program could be handled
through contractual services. It might be more practical to place the money in
the Equipment Revolving Fund to keep this option open, if it is desired for further
consideration.
Communitv Investment Fund Again some of the balance could be transferred to
this fund for future use on projects of community-wide benefit. Without a specific
project in mind, controversy could be generated when the money is actually
used. In spite of how the money was received, it may be subject to the argument
that it is the wrong use of tax money, if there is any controversy on a subsequent
project.
Post Retirement Health Insurance The City has an undefined liability for
payment of post-retirement health insurance premiums related to personnel
agreements. The City Council has determined that positions need to remain
vacant until savings cover the liability on a pay-as-you-go basis. This works
reasonably well in positions where there are a number of employees such as
police officers. It will not work as well for positions where only one employee
works and a long-term vacancy to accumulate the required money could work
against the City's best interests. It also does not match the cost to the benefit in
that future taxpayers are paying for a benefit being accrued today which should
be part of today's costs.
Recommendations
It is my belief that the most appropriate use of the money is to transfer it to the
Equipment Revolving Fund and to the Debt Service Funds to defease those
bonds and I would recommend that course of action. I believe the elimination of
future tax levies through the use of the money is the highest priority and
provides the most obvious and direct benefit to the community.
Please let me know, if you would like any additional information or if you would
like to discuss the situation.
VnCAe Director/City Clerk
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