11/01/2001 - City Council Special~4;- ....
~ ~~
MEMO
' _ city of eagan
TO: HONORABLE MAYOR AND CITY COUNCILMEMBERS
FROM: CITY ADMINISTRATOR HEDGES
DATE: OCTOBER 26, 2001
SUBJECT: SPECIAL CITY COUNCIL WORKSHOP/NOVEMBER 1, 2001
The Special City Council Workshop for November 1 is scheduled for 5:00 p.m. in the City Hall
Community Room. The purpose of the meeting is to discuss the following agenda items that include; 1.)
water, sanitary sewer, street lighting, storm drainage and water quality budgets, 2.) ownership proposal for
Wescott Square Apartments, 3.) amendments to MVTA Joint Powers Agreement and Bylaws, and 4.) the
every other month Goals Update.
CONSIDER WATER, SANITARY SEWER, STREET LIGHTING, STORM DRAINAGE &
WATER QUALITY BUDGETS
Each year as part of the City's budgeting process the City Council reviews the budgets for all of the
City's Enterprise Funds in addition to the General Fund. The Enterprise Funds consisting of water,
sanitary sewer, street lighting, storm drainage, water quality, Cascade Bay and the Civic Arena aze all
self-supporting in that user fees support the annual operations. The review of the water, sanitary sewer,
storm drainage and water quality budgets is usually completed at one or more special City Council
meetings in the November/December timeframe. Since there aze no tax levies involved, there aze no
County or State deadlines as there aze with the General Fund and completion is somewhat later for
these funds. For all practical purposes the Civic Arena operates on a yeaz different than the fiscal year
so that budget was given preliminary approval during this past summer to allow rates to be adjusted for
the entire winter season. Likewise, Cascade Bay requires mazketing efforts to take place before the
new fiscal yeaz so that budget has also been given preliminary approval, as the new rates were set.
Finally, all of the budgets are given final, formal approval at a regulaz City Council meeting in
December in advance of the new fiscal year.
ACTION TO BE CONSIDERED:
Consideration at this meeting is to provide the City Administrator and staff with direction for the final
prepazation for the public utility operations of water, sanitary sewer, street lighting, storm drainage and
water quality within the Enterprise Funds.
Special Note: The detailed worksheets and budget materials will be distributed and presented at the
meeting on Thursday.
ADDITIONAL BUDGET INFORMATION
Duector of Administrative Services VanOverbeke is completing the research to address the questions
raised about softwaze licensing at the special City Council meeting held on October 9, 2001. That
material will either be presented at the meeting or in subsequent correspondence.
At the meeting there was also a question raised about the number of cities levying to the levy limit.
Enclosed on page ~ is a copy of a survey completed by a metropolitan city questioning whether or
not cities aze levying to replace HACA and whether or not they are levying to the levy limit. The survey
was not undertaken by Eagan but was provided to staff at approximately the time of the preliminary levy
certification. It is possible that some cities already have or will make changes as the final levies aze
certified before the deadline in December.
Finally, enclosed on page ~_ is information regazding the cumulative revenue verses expenditures
and cash position for Cascade Bay, also requested at the meeting on October 9, 2001.
CONSIDER OWNERSHIP PROPOSAL FOR WESCOTT SQUARE APARTMENTS
Recently, at a Council work session, Common Bond Communities to explore ownership and management
of the Wescott Square Apartments was discussed. It was determined that City Councilmember Bakken
would represent the Council at any subsequent meetings with Common Bond. A meeting was held on
Wednesday, October 24 with Joe Errigo, President, Douglas Mayo, Director of Housing Development
and Joe Holmberg, Senior Vice President and Chief Operating Officer, all of Common Bond. Common
Bond Communities develops and maintains affordable homes for thousands of families, seniors and
people with special needs. Common Bond Communities' housing is located in 40 housing communities
and 28 municipalities in and azound the metropolitan azea. They currently have over 3,000 rental housing
units. Discussion points range from a proposal to build an Advantage Center that would provide
activities and services for residents of the Wescott Squaze Apartments, how the property would be
acquired, exploring various funding possibilities and to reseazch how other communities have partnered
in the acquisition of similaz properties. As Acting Mayor, Councihnember Bakken has placed this item
on the November 1 agenda to report back to the Council on his findings.
ACTION TO BE CONSIDERED:
To provide direction to the staff on this item.
PROPOSED AMENDMENTS TO MVTA JOINT POWERS AGREEMENT AND BYLAWS
The City Attorney has received and forwarded to staff a letter from Best & Flanagan LLP, the legal
counsel for the MVTA outlining proposed changes to the MVTA Joint Powers Agreement and Bylaws.
The primary motivation for the changes being considered at this time is the withdrawal of the City of
Prior Lake from the MVTA effective at the end of this yeaz. In addition to the changes required by the
change in membership, the MVTA Boazd is also proposing to make various other changes as outlined in
the cover letter, which is enclosed on pages ~Q_ through _~. Additional changes were made to
the proposed Joint Powers Agreement and Bylaws at the MVTA meeting held on October 24, 2001. The
excerpt of the minutes including those changes is enclosed on page ~_. The City Attorney and staff
aze reviewing the documents in detail and will be providing the City Council a synopsis of the proposed
changes at the meeting on Thursday. The documents ultimately require formal approval by all five cities
remaining as members of the MVTA.
ACTION TO BE CONSIDERED:
After presentation of the synopsis, the City Administrator will be seeking City Council direction on how
they would like staff to proceed.
/s/ Thomas L. Hedges
City Administrator
3
HACA RECOVERY SURVEY:
Ciri:
ANDOVER
ANOKA*
BROOKLYN PARK*
CAMBRIDGE
CH[~~NHASSEN
CHAMPLIN*
COLUMBIA HEIGHTS*
COTTAGE GROVE*
EAGAN
EAST BETHEL
EDEN PRAIRIE*
EDINA*
ELK RIVER
FOREST LAKE
FRIDLEY*
LEVIED FOR
HACA RECOVERY
YES
YES
YES
YES
YES
HOPKINS*
INNER GROVE HEIGHTS
LINO LAKES*
MAPLE GROVE*
MINNETONKA*
NEW BRIGHTON*
OAKDALE
PLYMOUTH
PRIOR LAKE
RAMSEY*
RICHFIELD
ROSEMOUNT*
ROSEVILLE
SAINT ANTHONY
SAVAGE
ST. LOUIS PARK
SHAKOPEE
SHOREVIEW
SHOREWOOD*
SOUTH ST. PAUL
WEST ST. PAUL*
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
HACA LEVY RECOVERY: - 36 CTTIES RESPONDING
LEVIED TO LIMIT
NO
YES
NO
YES
NO
YES
YES
NO
NO
YES
YE5
YES
YES
YES
NO
NO
YES
YES
YES
NO
NO
YES
NO
NO
YES
YES
NO
NO
YES
YES
YES
YES
YES
YES
NO
YES
NUMBER OF CITIES OPTING TO LEVY FOR HACA RECOVERY 36 -100%
LEVIED TO LEVY LIIVIIT 22 - 61.2%
UNDER LEVY LIMIT 14 - 38.8%
4
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MEMO
city of eagan
TO: Tom Hedges, City Administrator
FROM: Tom Pepper, Chief Financial Officer
DATE: October 26, 2001
SUBJECT: Cascade Bay financial results -1999 and 2000
At the October 9 Special City Council meeting, the question arose as to Cascade
Bay's financial results of operations since it opened in 1999. This will recap the results
for 1999 and 2000. While the 2001 season is over, not all the bills have been paid, so
2001 results are not presented.
From the outset, the understood goal for Cascade Bay was to generate sufficient
revenues to pay all the operating bills and the annual debt service payments on
$2,000,000 borrowed internally for construction, as well as to provide a predetermined
set-aside for capital replacement. The structured debt service payments to the Housing
Fund and the Community Investment Fund total approximately $160,000 per year. The
capital replacement set-aside was established at $50,000 per year for 1999 and 2000.
An additional $1,000,000 for construction was loaned from the Community Investment
Fund structured as a balloon payment due in 20 years. The annual set-aside that would
be required if annual payments were made on the $1,000,000 loan is about $85,000,
but is not reflected in the figures below.
The results of operations are:
1999 2000
"Cash basis" operating profit
Less:
Structured debt service
Capital replacement set-aside
Amount in excess (deficient)
Cumulative excess
(amounts in thousands)
$ 185 $ 290
(159) (160)
~~ (50)
~24)
$ 56
Through the first two years, revenues exceeded expenses, including debt service
and capital replacement, by a cumulative total of $56,000. Again, the $85,000 annual
amortization of the $1,000,000 balloon-payment loan is not reflected in these figures.
BEST & ~' LANAGAN LLP
ATTORNEYS AT LAW
4000 US Bank Place
601 Second Avenue South
Minneapolis, Minnesota 55402-4331
Telephone 612 339 7121
Facsunile 612 339 5897
www.bestlaw•.com
Writer's Direct Dial No.:
(612)341-9722
E-Mail Address:bross@bestlaw.com
October 5, 2001
tinl.•n I.. (:nN-1~ Michael Dougherty
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1380 Co orate Center Curve
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Lalll, F:. /:nrlin Eagan, MN 55121
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Kennedy & Graven Chartered
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Re: Amendments to MVTA Joint Powers Agreement and Bylaws
OF la IL \nta.
Ganl R. Lrei~ Deaz Counsel:
~n•hilwld Fprm•rr
Klan \1. tikarr
J.Illll R. l:an.111 Enclosed for review by you and your City Councils please find an Amended and•
Jamr~ I1. (Ihln
"" v ~"`~" Restated MVTA Joint Powers Agreement establishing the Minnesota Valley Transit
J""'"'' k"'` Authority and Amended and Restated Bylaws of Minnesota Valley Transit Authority with
k.daA J. Flana_:m revisions that have been approved by the MVTA Board. I am providing the Amended and
Restated Joint Powers Agreement and Bylaws with red-lining to show where the proposed
'"` \"' " ''''" revisions are as compazed to the current language of the Agreement and Bylaws. The
Michael Dougherty
Roger Knutson
Charles LeFevere
David Keller
October 5, 2001
Page No. 2
Boazd is requesting that the cities review the proposed changes and provide feedback by
October 22, 2001 so the Board can consider the comments and issue final approval of the
revisions with the goal of having the Amended and Restated Joint Powers Agreement and
Bylaws approved and signed by the end of this yeaz. It is important to MVTA to have the
revised Joint Powers Agreement in place by the end of the year to coincide with the
effective date of the withdrawal of Prior Lake.
The proposed revisions to the Joint Powers and the Bylaws address changes in
voting requirements with one less city, plus MVTA is proposing the at-lazge commissioner
be eliminated. The original purpose of having an at-large commissioner was to provide an
extra vote for the three lazgest cities which were members of the Joint Powers Agreement,
but with the withdrawal of Prior Lake the three lazge cities now make up a majority which
really eliminates the need for the at-lazge commissioner. By eliminating the at-lazge
commissioner position, it also provides for an odd number of Board members for voting
purposes.
The Joint Powers currently provides that unanimous approval is required for
purchasing real estate and buses or leasing the same for five years, but the Board is
proposing this requirement be eliminated since funding will now be provided through the
Metropolitan Council with state motor vehicle excise tax, and not the local property taxes
levied by the cities. The Cities were concerned that there be unanimous approval of capital
projects when the cities were levying property taxes for transit. However, the funding for
transit is now appropriated to each city by the legislature pursuant to a formula in the
statute. The new statute is Minn. Stat. § 16A.88, and the opt-out statute, § 473.388, has
been revised to eliminate the property tax levy. The Met Council will approve MVTA's
budget each yeaz. Given this change, the MVTA Boazd proposes that the unanimous
requirement be deleted, so capital projects would require a majority vote by the MVTA
Boazd.
The revision regarding the executive director is simply to clarify the executive
director's authority to hire and terminate permanent personnel. The Bylaws has been
revised to provide authorization to the executive director for claims up to $10,000. This
approach is consistent with authority granted to City Managers and Administrators.
The provision rggazding insurance was the language that was approved by the cities
three years ago when MVTA had proposed amending the Joint Powers.
The provision on distribution of assets has been revised to reflect the impact of the
changes in the statute that allow the cities to directly levy for capital assets, and also to
incorporate requirements for federal projects and Met Council projects. Cities have the
Michael Dougherty
Roger Knutson
Chazles LeFevere
David Keller
October 5, 2001
Page No. 3
authority under the revised statute to levy property taxes for capital projects. In most
cases, capital projects will be funded with federal grants and Met Council grants. These
contracts require that the capital asset remain in regional use for transit purposes. If a city
does levy taxes for a capital project as the sole source of funds, the revised Joint Powers
provides the city could take title to the project if it withdraws from MVTA.
If you have any questions, feel free to call me.
Sincerely,
Bazbara M. Ross
BMR/pbb
Enclosures
cc: Beverley Miller
166797
_ _____o ___.........,},..,a.c wuar m a r~; envuonrnent. The
systems are currently networked and information is shared between platforn~s. The
consulting agreement was approved.
3. Meetinb Minutes were approved as presented.
~4. Barb Ross indicated she had t~eceived no feedback from any MV'fA cities regarding the Joint
Powers Agrc~ment. Several board n~emtxts raised concerns about the document as it was
forwarded iv the cities. Ruth Grendahl and Meg 'Tilley raised concerns about the elimiruition
of the "at-large" position. The thinking behind the chanbe was that the three targes-t cities
would carry a vote (as three cities would need to vote in the affirmative to approve an item),
so there was no longer a need for the ``at-large" representative to provide further weight to the
largest cities. Further, given that the cities no longer have the financial interest in the MVTA,
it would not be necessary to retain this position. Concerns expressed by Board members in
wanlinb to keep the "at-large" position related to the need to have a bus rider on the Board, as
well as the need to have greater representation from the population centers. Several
alternatives wCn; proposed, including the addition o1'a second "at-large" representative such
that the Board would not have an even irumber of members. it was also noted that a city
could appoint a bus rider as its representative to the Board. Several Board members raised
concerns about the eight-member boazd and potential pitfalls of tie votes.
10/YS/01 THU 15:44 FAZ 8128827600 YN VALLEY TRANSIT +---- 6a6an f~GG7
Page 2 ~ r -
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(here was also discussion regarding the Executive Director's authority. 'lie Board was
reminded that it currently provides the Executive Aircctor with the authority to hin; and fuc
based on its policies and Strategic Plan. The language in the Joint Powers Agreement was
designed to clarify that existinb practice. Severn! cities expressed cuncetn that the lixecutivc
Director would have broader authority than their cities.
The Board then voted to approve a revised Joint Powers Agreement with the following
changes and send it to the Cities for adoption:
• Re-instating the "at-large" position aad changing all of the necessary language
regarding that position
• Changinb the language regarding the Executive Director authority to state that the
MVTA may grant the Executive Director the authority to enter into contracts with
personnel, appoint and terminate personnel, and provide for compensation, insurance
and other benefits.
S. Next, the Board discussed the By-laws. A question was again raised about the $ l 0,000
amount that the Executive Director is authorized to appmve. 7'hc rccommCndation came
from the Finance Committee and was approved by the Strategic Planning Committee: and
disc~-ssed by the Board. The By-laws were then approve) and recommended for adoption
by the Cities with the following chanties:
• Making language consistent with the Joint Powers Agreement regarding the
composition of the Board per the revised Joint Powers Agreement
• Kevisins the dollar authority n to the Executive Director to $7,500.
6. Barb !toss discussed the status of th nsultant RrP to get an approved list of consultants.
Ct1P rrminl~Prl Rn9r/~ mPrr+l+o+~ f{~~~ ~~ ,~~ 1••••~ •-•
3
ADDITIONAL INFORMATION
SPECIAL CITY COUNCIL WORK SHOP
THURSDAY, NOVEMBER 1, 2001
t ~ Councilmember Bakken and Allison are at the hospital in labor
i
~ Council Retreat:
o Possible facilitators include Carl Neu or V~o eek /dates
available for Carl Neu are November 3' 6 27 ~ ~~
_.__~~
;;~ Legal Services /see attachment
Request for meeting space /Charter Commission
~, ~ Consider direction to APrC to include shelter building in Central Park
as a capital expenditure from the Park Site Fund
v~ Update on "high alert" /terrorism
^ Inver Grove Heights - Broadmoor Addition