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08/08/2016 - City Council SpecialMINUTES SPECIAL CITY COUNCIL MEETING AUGUST 8, 2016 5:30 P.M. EAGAN MUNICIPAL CENTER City Councilmembers present: Mayor Maguire, Bakken, Hansen and Tilley. Councilmember Fields arrived at 6:25 p.m. City staff present: City Administrator Osberg, Assistant City Administrator Miller, Director of Parks and Recreation Pimental, Assistant Parks and Recreation Director Flewellen, Public Works Director Matthys, City Planner Ridley, Finance Director Pepper, Assistant Finance Director Feldman, Director of Communications Garrison, Police Chief McDonald and Fire Chief Scott. ROLL CALL AND ADOPTION OF THE AGENDA Councilmember Tilley moved, Councilmember Hansen seconded a motion to adopt the agenda as presented. Aye:4 Nay:0 VISITORS TO BE HEARD There were no visitors to be heard. FIRE ADMINISTRATION BUILDING UPDATE City Administrator Osberg introduced the item noting the City Council last discussed the Fire Administration Building at its February 9, 2016 workshop. At that time City Council directed staff to work through the Finance Committee and report back at a future City Council workshop. Osberg noted updated cost projections from CNH have been received along with feedback from a reputable commercial real estate broker with regard to the options associated with renting or selling the building. Art Works Eagan submitted a proposal to rent the Fire Administration Building that has previously been distributed to the City Council. The Finance Committee conducted a meeting on July 20, 2016 and has provided the following recommendation for further consideration and review by the Council: a) The Parks and Recreation Department should move its operation to the Fire Administration Building. b) The City Hall/Police remodeling project should be downsized accordingly. c) Once the Eagan Convention Visitors Bureau (ECVB) has completed its obligation to pay the City back for capital costs of its space at the Community Center by 2026, the City and ECVB should evaluate the ECVB moving into the upstairs of the Fire Administration Building. Mayor Maguire provided a brief history of the Fire Administration Building. He noted the proposal received from Art Works Eagan. He stated he is comfortable hearing a presentation in September from Eagan Art Works on their business model, and encouraged Art Works Eagan to be open to exploring additional locations other than the Fire Administration Building. Finance Director Pepper walked through the Cost Comparison Analysis Spread Sheet. The Council discussed options for the future use of the Fire Administration Building. Potential concerns were raised with the City entering into a tenant relationship with a group of citizens. It was Special City Council Minutes August 8, 2016 Page 2 suggested that Art Works Eagan explore and demonstrate how the eventual purchase of the building could be a possibility. It was the consensus of the City Council to hear the presentation from Art Works Eagan at the September 13, 2016 Special City Council workshop. GENERAL FUND BUDGET PRESENTATION City Administrator Osberg introduced the item noting Council will be reviewing the preliminary 2017 General Fund operating budget and the proposed property tax levy. Any modifications to the proposed levy and budget will be presented to the Council at the September 6, 2016 regular City Council meeting. Finance Director Pepper noted the City is required by State law to certify a proposed payable 2017 property tax levy to the County Treasurer -Auditor on or before September 30, 2016. Any adjustments requested by the Council can be made in time to meet the September 30th deadline. Pepper provided additional background pertaining to the preliminary general fund balance, market value and tax capacity, and local tax capacity trends. Osberg provided additional background pertaining to the proposed increase in the General Fund expenditure budget. Osberg added the proposed General Fund Budget reflects an increase of 4.48 percent over the 2016 budget. He provided an overview of the proposed General Fund Budget as it relates to specific departments and operations, and summarized the public policy issues for the City Council's consideration. Assistant Finance Director Feldman walked through the General Fund Budget and Fund Balance. Finance Director Pepper gave a staff report on Market Value and Tax Capacity. Osberg noted formal action on the levy and preliminary 2017 General Fund budget are scheduled for the regular City Council meeting on September 6. Dakota County is holding its Truth in Taxation hearing at the first December regular City Council meeting. The City Council will be asked to adopt the final 2017 budget and levy at the December 15, 2016 regular City Council meeting. The City Council discussed the proposed 2016 budget and the proposed payable 2016 Property Tax Levy. There was Council consensus that the budget level at a 4.5 percent increase was appropriate. There was Council consensus that the proposed department budget items were appropriate. There was Council consensus that the proposed total tax levy of 4.5 percent was appropriate. There was Council consensus that the allocation of the preliminary tax levy was appropriate. Mayor Maguire directed staff to research and bringing back information for the Council to review at the September 6th meeting, the following questions: 1) what are the implications of taking one million from the fund balance and buying down the levy for the purpose of dedicating that amount to either capital projects or debt service? 2) What would be the impact in the current year? 3) What would the impact be in future budget years? 4) And, what is staff's opinion on such utilization of the fund balance? City Administrator Osberg commented that staff is working on a new approach for the budget open house, including greater use of social media to engage the community in the budget process. Special City Council Minutes August 8, 2016 Page 3 There was no other business to be heard. OTHER BUSINESS ADJOURNMENT Councilmember Tilley moved, Councilmember Hansen seconded a motion to adjourn at 7:42 p.m. Aye:S Nay:O �i Mayor Offlu.izzlEm'. City Clerk