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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 a,_ vS . [;,y 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 Ir.lnanl M..~IhlinFtion . \lnhrr (:ra(( Eagan City Attorney 411rn I). Ranlar'1 1{i h l 4 P Apple Valley City Attorney r an rlrrvln . . ".Ilan J. t:hriaianwnl.,f. Severson Sheldon Dougherty & Moleda PA F rank J. \\aIz Frank \..KI , , 7300 West 147' Street, #600 J~Ihn11\`ikln ;'i~lll~•~~•J~ Apple Valley, MN 55124 Jumr- C. Dir:n lrx kuFrr k. k.». )r. kularl L. Mrllrr. Jl. Roger Knutson Mnm~ E. Auupl Jndial a. kn,~u.hrrkr Burnsville City Attorney `' °" " F""' Campbell Knutson PA F. J".rl,''':,Fa,r #317 1380 Co orate Center Curve I:rrR..n 1). ~Ilulr , Lalll, F:. /:nrlin Eagan, MN 55121 Palri.-k Ii. Hrnnr-_~ 7~inmd„ A.Sullilan "°"``~' "~u ''"'""' Charles LeFevere Ual id J.1.uhkr ;Ir,.rl, li. I,nl,:,•r Rosemount City Attorney Paul F.. F.nwm.ki Rn.. ~- F.Innru Kennedy & Graven Chartered ~~",~;; I:a;~'„ 470 Pillsbury Center , "°~'°r" "' """ 200 South 6's Street l::Hh"rinr J. Cuunnr. Jrannil•r M. -irlhnp Minneapolis, MN 55402 tii1l'aIl (.rl {IIM'n MalllWnl kulan I1. Mnhrr ulrian,lhrr u. Jnhna"' David Keller ru I{. I.I„rr "ani"' ~. "al,'°° Savage City Attorney k.dan \l.lrwi- Irnnl,. V•Ilrmrr Grannis & Hauge PA Ccmhia L HrFanc Mal lrnr ~. I'rlrrwn , #200 1260 Yankee Doodle Road l:nn (.. (.auurllr T-+,~g.~ ~ $5121 Cl 1' Uarid C. Mur).hc ' i Hazrl J. L1 Hrian L. FdJI RrI..K. a a. clla(Irr 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 - t~M-~ / ~~ik w~ct~ ~ , (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