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03/12/1985 - City Council Special MINUTES OF A SPECIAL MEETING OF THE EAGAN CITY COUNCIL EAGAN, MINNESOTA MARCH 12, 1985 A special meeting of the Eagan City Council was held on March 12, 1985 at 7:00 p.m. in the City Council Chambers in the Eagan Municipal Center. Those present were Mayor Blomquist, City Councilmembers Egan, Smith, Thomas and Wachter. Also present was City Administrator Hedges. Director of Public Works Colbert and Director of Finance VanOverbeke appeared during the meeting for specific items. TAX INCREMENT FINANCING/CAN AMERICAN PROJECT Mr. Brian Webber appeared representing the Can America Corporation and spoke to a request for an interest rate reduction application which is under consideration for the Cinnamon Ridge project. He stated that a land use classification and multi-family revenue bond financing were both approved during 1984. Mr. Webber stated that he was concerned about the time schedule and financing involved to complete an interest rate reduction request for his project. He further stated that since the neighborhood is agreeable to the Cinnamon Ridge development he is hopeful that the City will give consideration toa tax increment financing proposal for the project. Mr. Webber stated that the increment is necessary to assist the high tax rates that are in existance and also will help provide a better subsidy and an adequate return to the City for the overall project. He further stated that the increment is similar to a loan (U-DAG loan) and then continued to provide financial illustrations to show how the subsidy is returned to the City. Mr. Webber then stated that tax exempt rates were tightening and many of the federal programs were shrinking, making it difficult without local assistance to develop the Cinnamon Ridge project that was outlined before the City Council. City Councilmember Smith asked Mr. Webber if the project will be constructed if tax increment financing is not made available. Mr. Webber responded, stating the Can American Corporation will not build the project without tax increment financing. City Councilmember Smith asked Paul Eckholm what the possibility is to the City in not receiving the tax increment owed from the project within ten (10) years. Mr. Eckholm explained that if the worst scenario should occur and the units were not appreciated, the project could still be sold as condominiums which would provide the necessary tax increment. He stated that most of the big eight auditing firms were suggesting a minimum growth of 5% which provides a successful increment. Mr. Webber stated that rates are projected to be $485 to $585 for the Cinnamon Ridge project and then reviewed some area comparables for discussion purposes. Mayor Blomquist stated that it is not possible for the City Council to take any action regarding the proposed tax increment financing prior to an official public hearing. The City Administrator stated that the necessary approvals have been given regarding the acceptance of an application and once a tax increment district plan is compiled and reviewed by the City's HRA, a public hearing can be held to give further consideration to the tax increment financing application. There was no official action taken on this item. GENERAL OBLIGATION IMPROVEMENT BOND REFUNDING OF SERIES A & SERIES B BONDS Pat Woolridge and Steve Emerson of Miller & Schroeder Municipals, Inc., appeared and discussed the need to change the bond size by reducing the Series A from $3,395,000 to $3,245,000. In a motion by City Councilmember Smith, seconded by City Councilmember Thomas, with all members voting in favor, the low bid at a net interest cost of 8.1728% for a $3,245,000 General Obligation Refunding Improvement Bond of 1985 Series A was awarded to Norwest. In a motion by Councilmember Egan, seconded by City Councilmember Thomas, with all members voting in favor, the City was authorized to pay Miller & Schroeder Municipals, Inc., front money in the amount of $168,561.73 for Series A and $226,475.69 for Series B. In a motion by City Councilmember Egan, seconded by City Councilmember Wachter, with all members voting in favor, the transfer of funds from Issue B to Issue A was authorized in an amount necessary to pay this front money not to exceed $168,561.73. TRANSITION/DIRECTOR OF PUBLIC WORKS The Director of Public Works and the City Administrator reviewed a transition plan that is necessary until a new Director of Public Works is hired. The City Administrator stated that he will provide a regular review and coordinate maintenance activities with both the utility and street superintendents as it relates to public works maintenance. He further stated that the Assistant City Engineer, Mr. Rich Hefti, will become the Acting City Engineer and is in charge of special assessments, private improvement contracts, public improvement contracts, development agreements and all activities performed by the City's consulting engineers. He stated that Mr. Hefti will be compensated at a rate of pay equivalent to his current base pay plus 10% until a new public works director is hired. Mr. Colbert stated that he will be available for consulting services after April 13, 1985 on an hourly basis for meetings and special projects, reports, etc., that are required by the City Administrator. CAR ALLOWANCE City Administrator Hedges stated that during 1984 a car allowance was budgeted not to exceed $2,400 for the Planning Department. He further stated that the City Planner was reimbursed at the City's per mile reimbursement schedule for all mileage incurred during that calendar year. The City Administrator then reported that an expenditure of $10,000 was approved for a vehicle in the City Planning Department for 1985; however, due to further study of the issue, it appears that a monthly amount for a car allowance would be in the best interest of both the employee and the City of Eagan. He stated that after researching other communities, a monthly amount of $165 to $200 was the average paid by communities where a monthly car allowance was provided for that employee. Members of the City Council discussed the concept of a monthly car allowance allocation. After some deliberation, it was decided that department heads should either receive a City automobile, if their position requires 24 hour call, or a per mile reimbursement for actual miles driven to meetings or other city wide purposes. The rate per mile was then discussed and it was suggested by City Councilmember Smith that the per mile reimbursement for all City employees be increased to $ .25. After further discussion on the matter and in a motion by City Councilmember Egan, seconded by City Councilmember Smith, with all members voting in favor, the per mile rate of $ .25 was approved for all City employees who use personal cars for City business purposes. In a motion by City Councilmember Egan, seconded by City Councilmember Wachter, with all members voting in favor, the $10,000 budgeted under Capital in the Planning Department was redistributed by allocating $2,400 to a car allowance within the Planning Department and the contingency fund should be increased by $7,600. VACATION SCHEDULES City Administrator Hedges stated that due to the increased activity relating directly to community growth during 1984/1985, there is a difficulty being experienced by certain department heads to utilize vacation time. He stated that department heads have made concerted efforts to use the compensatory time that was readjusted and will be discontinued at the end of 1984 in addition to the vacation time that has accrued the same as all other employees. The City Administrator explained that most of the employees were able to use their vacation time. However, due to the number of activities and issues that are requiring attention by the department heads, it has been very difficult to use the vacation balances which were allocated to these individuals. The City Administrator recommended that the City Council consider a one time cash payment on July 1 and/or at the end of December for each department head who is unable to use vacation time as allocated through the personnel policy. Members of the City Council recognized that due to the growth and ativities at city hall during the past several months and an effort to phase out the compensatory time balances, it is necessary for certain department heads to receive the one time cash payment. It was also made clear by members of the City Council that this adjustment will only occur during 1985 and is not to become a practice for any future years. The City Administrator stated that vacation limits are not a problem to all department heads. For those who will experience a problem during 1985, every effort will be made to reduce the vacation accrual so the cash payment can be minimized. In a motion by Mayor Blomquist, seconded by City Councilmember Egan, with all members voting in favor, it was determined that a cash payment would be allowed to department heads for their unused vacation time balance as opposed to losing this benefit during 1985 due to the amount of work activity they have experienced during the past several months causing inability to utilize vacation benefits. MANAGEMENT BY OBJECTIVE (MBO) The City Administrator presented the Management by Objective list which was prepared for discussion. The City Administrator was directed to continue working on those items listed as objectives. BANKING SERVICES The City Administrator stated that one of the objectives outlined in the 1984 MBO was to implement an RFP for banking services. He further stated that a draft was prepared by the Director of Finance and reviewed by his office and is now ready for consideration by the City Council. Director of Finance VanOverbeke appeared and stated that the RFP for banking services is quite technical and lengthy; however, a review of the document is recommended. He presented a review of the document, stating a number of services that are being considered by the City in considering its banking needs. After a lengthy review and several questions, a motion was introduced by City Councilmember Thomas, seconded by City Councilmember Wachter, with all members voting in favor, that the City Administrator and Director of Finance proceed with the request for proposals to consider using a local financial institution for its banking needs and services. ADJOURNMENT The meeting was adjourned at 11:15 p.m. Dated: March 12, 1985 TLH City Clerk