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12/11/1984 - City Council Special MINUTES OF A SPECIAL MEETING OF THE EAGAN CITY COUNCIL EAGAN, MINNESOTA s~ a December 11, 1984 A special meeting of the Eagan City Council was held on December 11, 1984, at 5:00 p.m. at the Eagan Municipal Center building. Present were: Mayor Blomquist and City Councilmembers Wachter, Egan, Smith and Thomas. Also present were City Administrator Hedges and Director of Finance VanOverbeke. ARTHUR YOUNG JOB EVALUATION/ SALARY COMPENSATION STUDY Mr. Mark Christianson, representing Arthur Young & Associates, was present and provided a further update on the status of the job evaluation/ salary compensation study that is currently being performed for all non-union and collective bargaining positions within the City. He stated that the study for non-union personnel is basically completed and can be considered for adoption in early January. He recommended that the City Council consider adoption of the band/grading of each position, a salary range for each of those positions and further consider the adoption of a performance appraisal system for monitoring the pay plan in future years. He stated that adoption of the band/grade will provide for internal equity; however, a final plan for initiating a pay plan that achieves comparable worth will not be achieved until the fall of 1985 to be consistent with comparable worth legislation. Mr. Christianson presented the development of a pay plan outlining the external factors and internal comparisons that were used to formulate the comp- nsation plan. The wage plan was then reviewed in detail by the City Council. City Council members expressed a desire to adopt a plan that derives longevity for compensation as opposed to an alternative merit plan. There were a number of questions raised regarding the ongoing implementation of a pay plan. After further discussion on the matter, it was the general consensus of the City Council to use a longevity step system for all non-union positions to formalize a compensation plan for all non-union position classi- fications. There was no formal action taken with the understanding that the final report and additional information regarding the pay plan will be further considered at a workshop session and regular City Council meeting in January. CITY CELEBRATION COMMITTEE Mayor Blomquist recommended that Carol Berg be appointed as a member of the City Celebration Committee. In a motion by City Councilmember Thomas, seconded by Councilmember Egan, with all members voting in favor, Carol Berg was appointed to the City Celebration Committee. CONTINUATION 1985 PUBLIC ENTERPRISE BUDGET City Administrator Hedges reported that the Director of Finance has a presentation that will address the questions that were raised at the November 13 special City Council meeting regarding operating income, retained earnings and the net income before operating transfers as it relates to the proposed public enterprise budget. The Director of Finance presented some exhibits that illustrate how the fund balance is calculated for general fund, the calculation of net income for the public enterprise fund, and more importantly, a revised format that better illustrates the purpose for a net Special City Council Minutes December 11, 1984 Page Two income and retained earnings as it relates to the public enterprise fund. Members of the City Council raised questions regarding the level of depreciation that is being funded by the current rate structure stating that it is most desirable to fund depreciation at approximately 50 - 60% as opposed to 100% or no consideration for depreciation. The Director of Finance explained the retained earnings as the difference between assets and liabilities. The amount which is forecast for 1985 is projected at $3,186,000 and represents approximately 10% of the total public enterprise fund assets. The Director of Finance reviewed the format to the net income approach and after discussion, it was agreed by the City Council that interest earnings should not be used for operational expenses. The City Administrator presented the proposed rate schedule stating that the building permit surcharge and user rates that are being proposed by the consulting engineer for 1985 are substan- tially lower than the numbers forecast at the public hearing when the Water Treatment Plant was under consideration. After further discussion on the matter, the City Administrator was directed to prepare the 1985 public enter- prise fund budget with a change in the current format to a net income approach which will better illustrate the reasons for projecting a net income and continuing retained earnings within the public enterprise funds. City Councilmember Smith expressed concern that future city councils do not lower rates or use monies from the public enterprise fund for general fund purposes and, therefore, asked that language be offered in the operating budget that specifically reserves an amount of the retained earnings to the repair, replacement and future expansion of the sewer, water and streetlighting opera- tions. GO BOND REFUNDING City Administrator Hedges stated that he has met on several occasions with representatives of Miller and Schroeder Municipals, Inc., and it appears that a refunding of the August 1, 1981, general obligation assess- ment bonds in the amount $4,530,000 and the December 1, 1981, general obliga- tion assessment bond issue in the amount of $2,875,000 would be in the best interest of the City at this time. He stated that a number of schedules have been reviewed and it appears that the refunding of these two general obliga- tion assessment bond issues is recommended due to the projected deficit of the December 1, 1981, general obligation assessment bond fund caused primarily by the high number of prepayments. An overall debt service savings of approximately $800,000 will be realized while the refunding bond issue will be retired approximately two years earlier than the referenced, outstanding general obligation assessment bond issues. After further discussion and a review of how the prepayments are affecting the status of the December 1, 1981, general obligation improvement bond fund, the City Council indicated support for this bond refunding. The City Administrator further indicated that a memorandum will be provided with the December 18 City Council packet when the resolution providing for the issuance and sale of bonds is to be further considered. He further indicated that if the interest rate for refunding bond issue and the rate of investment at the time of sale is not favorable to the City, the bond sale will not be finalized. There was no further action on this item. Special City Council Minutes December 11, 1984`, Page Three ADJOURNMENT There being no further business, the meeting was adjourned at 8:45 p.m. Dated: December 11, 1984 TLH City°erk