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10/26/1999 - City Council Special 00307 MINUTES OF A SPECIAL MEETING OF THE EAGAN CITY COUNCIL EAGAN, MINNESOTA October 26, 1999 A Special City Council meeting was held on Tuesday October 26, 1999 in the City Council Chambers of the Eagan Municipal Center Building at 4:45 p.m. Those present were Mayor Awada and City Councilrnernbers Bakken, Blomquist, Carlson and Masin. Also present were Civic Arena Manager Vaughan, Assistant Finance Director Pepper, Assistant City Administrator Verbrugge, Chief Building Official Reid, Senior Planner Ridley, Aquatic Facility Manager Organ, Police Captain Swanson, Police ChiefTherkelsen, Director of Public Works Colbert, Director of Parks and Recreation Vraa, Director of Finance VanOverbeke, and City Administrator Hedges. AGENDA ADOPTION In a motion by Councilrnember Carlson, seconded by Councilrnember Bakken with all members voting in favor, the October 26, 1999 Special City Council Agenda was amended by adding the item "Roundtable and Additions to Department Head Business" to OTHER BUSINESS and approved. VISITORS TO BE HEARD There were no visitors asking to be heard. DRAFT 2000 BUDGET FUND REVISIONS City Administrator Hedges first introduced new Chief of Police, Kent Therkelsen, who began work at the City on Monday, October 25, 1999. General Fund Mr. Hedges then presented an overview of the budgets on the agenda to be considered at this meeting and explained previous action taken on the General Fund Budget. He noted that after the preliminary levy and budget were approved by the City Council at the Regular Meeting on September 7, 1999, that information had been certified to Dakota County to be used for Truth in Taxation notices. Mr. Hedges explained that included in the materials for this Special Meeting was a recommendation for the same bUQget total of $18,200,000 previously presented, with all adjustments having been run through the Contingency account. The adjustments consisted primarily of corrections to the preliminary document except for the increase to the 4th of July fireworks allocation increasing that account from $10,000 to $20,000 and the insurance premium changes resulting from new infonnation. He noted that the Contingency account was now at 2% of the operating budget, which is within the City Council guideline, and that a History Conunittee budget will be proposed when received resulting in another adjustment being made to the Contingency account. There being no further questions or comments the City Administrator noted that the budget will than be presented in this manner at the Truth in Taxation hearings in December. EAGAN SPECIAL CITY COUNCIL MEETING MINUTES; OCTOBER 26. 1999 PAGE 2 00308 PUBLIC UTILITIES BUDGETS City Administrator Hedges stated that the primary purpose of these operations is to provide utility service to customers. He noted that no additional personnel were being recommended for any of the utility divisions. Water Mr. Hedges noted the continuation of the contractual meter reading program and the success of that program. He also explained the reduction in debt service costs resulting from a bond issue being called and another issue being refunded. Sanital)' Sewer City Administrator Hedges explained that the majority of the cost associated with the Sanitary Sewer utility was for treatment of the sewage and the Metropolitan Council Environmental Services Division handles that. The City's costs relate primarily to the local collection system. The City Council had no questions about either the Water or Sanitary Sewer utility budgets. Street Lighting Mr. Hedges noted that the Street Lighting utility operated primarily as a pass through operation providing for energy costs for the operation of intersections, neighborhood and some stop lights in the community. In addition some administrative costs are charged to this utility. The City Council had no questions about the Street Lighting utility budget. Stonn Drainllfe/W ater Ouality Mr. Hedges explained the background of this utility operation and the Water Quality Management Plan. He pointed out how valuable the program has become to the City through its educational component. He pointed out that the major portion of the budget increase has to do with an increased allocation for chemicals that are to be used primarily in Fish Lake, although other water bodies are expected to benefit from the use of additional chemicals as well. He explained that no additional staff is being proposed for this utility. Mr. Hedges pointed out the background information on the cash flow of the utility and how the capital program has been incorporating a pay-as-you-go funding process. The City Council had no questions about the Stonn Drainage/Water Quality utility budget. Mayor Awada inquired about when the enterprise fund budgets would be fonnally approved and City Administrator Hedges responded that that would be done in December after the Truth in Taxation hearing at the same time that the General Fund Budget was approved. CIVIC ARENA BUDGET City Administrator Hedges provided an overview on the background of both arenas. He noted that the issues being responded to and incorporated into the budget for the newer East Arena result from a change in how the facility was originally contemplated being used. While the original use had been defined as providing for a practice facility, it was now hosting tournaments and other similar activities requiring improvements such as better seating and heat. Mr. Hedges noted that the proposed year 2000 Arena budget incorporates both debt service payments and the EAGAN SPECIAL CITY COUNCIL MEETING MINUTES; OCTOBER 26. 1999 PAGE 3 0(:309 renewal and replacement funding as previously approved by the City Council. He also explained that the newest program incorporated into the Arena operations was the acquisition and utilization of artificial turf for potential athletic as well as recreational activities. He pointed out that the estimated revenues for the arena operations for the year 2000 include $13,600 from this new program. It was noted that the estimated acquisition cost of $70,000 for the artificial turf bad been a part of the Advisory Parks Commission's recommendation for the 2000 Part ill Capital Improvement Program that will be considered for final approval in December. The funding for the capital acquisition is proposed to be provided from the Park Site Acquisition and Development Fund. City Administrator Hedges pointed out the additional information that was provided in the packet about the Learn-to-Skate program that has been very successful. He also noted that the budget was currently out of balance by $9,600 and stated that he would be correcting that imbalance, as his practice is to submit only balanced budgets to the City Council for consideration. Councilmember Blomquist inquired about when the City will decide on the artificial turf question. Director of Parks and Recreation Vraa explained that the Advisory Parks Commission bad already decided on recommending the installation to provide for the additional recreational activities. He further discussed the concept of an indoor park in the arena. He stated that there would be no program cost associated with recreational programs provided as programming through the General Fund. Other users such as soccer, softball, baseball, etc. would pay an hourly fee. Those types of users generate the rather conservative revenue estimate of $13,600 for the year 2000. Councilmember Carlson requested an update on several items and asked questions responded to by Director Vraa. She asked about the heat in the East Arena and that has been installed. She asked about a bleacher upgrade. The response was that it has not been completed and is not incorporated into the proposed budget. The proposed budget continues the use of temporary bleachers as in previous seasons. She asked about the sound system and the response was that it has been installed. The fourth item was an additional clock. It was noted that the first clock was donated and a second clock was not included in the proposed budget for the year 2000. Councilmember Carlson expressed her concern that the arena should be for ice first and that ice related enhancements should be taken care of before the City moves into other areas such as artificial turf. She noted that the skate tile around the ice is okay and no additional flooring is necessary. Councilmember Bakken inquired on how far along the procurement process is on the acquisition of the artificial turf Director Vraa responded that all contacts have been preliminary only and have been for the purpose of developing cost estimates. He noted that there is a time delay of approximately 90 days for delivery of the product. Councilmember Bakken further inquired about the newer turf product being utilized by the National Football League to reduce injuries and related liabilities. Director'Vraa explained that he was aware of the product, however it is considered to be a more pennanent application than contemplated for the arena. Mayor Awada inquired about the cost of the additional clock and the bleachers. Civic Arena Manager Vaughan responded that a clock would cost about $2,500 to $3,000. Director Vraa responded that the new bleachers meeting the year 2001 standard with the same seating capacity currently available would cost approximately $15,000. Councilrnember Carlson suggested that renewal and replacement funds be used to acquire the clock and the new bleachers. Mayor Awada inquired iffunds are available to finance the acquisition in that manner. Director of Finance VanOverbeke responded that the City would essentially be under funding the renewal and replacement account for the year 2000 which the City Council could decide to do through the EAGAN SPECIAL CITY COUNCIL MEETING MINUTES; OCTOBER 26. 1999 PAGE .. 00310 budget approval process. Councilmember Bakken raised the question about the risk to the operation of under funding the renewal and replacement account with the expectation that the payback on the capital investment would be beneficial in the long tenn. Director Vraa discussed the economic impact of tournaments and special events through increasing the use of the facility. He said that there is an obvious benefit to the facility and to the community in increasing these activities. Mayor Awada moved that the new bleachers and clock be purchased through using the renewal and replacement funds to be replenished over a period oftime. Councilmember Blomquist agreed that this should be done and noted that the bleachers can be used for other events as well. The only problem she sees is that the increase in capital equipment requires even a greater dedication to the required funding for renewal and replacement. Councilmember Masin seconded the motion and it passed unanimously. Councilmember Bakken inquired about the profit margin on fried foods suggesting that it was greater than on certain other food items. Director Vraa concurred, although he noted the caveat that there is a greater concern with waste with that type of product. Mayor Awada expressed a concern about the nutritional value of the food offered in the concession stand at the arena. Councilmember Carlson expressed a desire to see profit margins on sales. Director Vraa stated that staff is analyzing results from Cascade Bay to detennine profit margins and other infonnation to assist in establishing an appropriate product offering. He noted the importance of offering what the customers desire, that there be an adequate return on sales and the impact on the bottom line of both the product and the overhead, primarily labor, to sell the product. Councilmember Bakken inquired about when fried foods will be available at the arena and Manager Vaughan responded that they were as of last Friday. Councilmember Carlson inquired about the possibility of offering in-line skating on Friday nights through Parks and Recreation. Director Vraa responded that it is a potentially successful activity as a one-time event. Councilmember Carlson also inquired about the possibility of selling season passes for public skating. Director Vraa responded that as an alternative discount passes were used. He expressed his concerns about the expectations for specific times always being available that is typically generated from holders of season passes. Councilmember Carlson noted that she is not interested in utilizing more staff to further protect the entrances to public skating. She offered alternatives such as hand stamps and lift ticket type passes as an inexpensive method to reduce the number of skaters entering public skating sessions without paying. There were no other questions on the Civic Arena budget or on the operations of the arena complex. AQUA TIC FACILITY BUDGET City Administrator Hedges introduced the Aquatic Facility Budget by noting that he had failed to mention during the discussion on the Civic Arena Budget the proposed addition of one employee to be shared between the two facilities. "He explained the benefit to both facilities in adding the position. Mr. Hedges went on to cover certain of the budget considerations highlighted in the budget narrative. Those included the fact that the proposed budget is based on only 2 1/2 months of operation from the 1999 season, final construction is not yet complete because of the overlap of the operating season with final construction, planning for the 2nd season is underway, there is a proposal to add payment of sales tax on season passes, there are capital outlay items included in the proposed budget and both debt service and renewal and replacement allocations are budgeted. City Administrator also pointed out the proposed rate change on daily passes and the non-resident season pass as options to increase revenues and/or utilization at less popular times. EAGAN SPECIAL CITY COUNCil MEETING MINUTES; OCTOBER 26. 1999 PAGE 5 00311 Councilmernber Blomquist inquired about the number of season passes sold for the 1999 season. Director Vraa answered that 8,100 had been sold. Mayor Awada stated that she felt there were three issues related to the proposed budget for discussion by the City Council. Those issues are 1) sales tax. 2) rate increases, and 3) capital outlay. In the area of capital outlay, consensus was reached that the proposed cost of the computer replacements were too high and needed additional study before allocations would be included in the 2000 budget. Concerns were expressed about the short season and getting maximum utilization out of the technology with the suggestion that new computers be placed elsewhere and used computers be recycled to Cascade Bay. Questions about potential up grades were also raised. Consensus was also reached that a used golf cart should not be purchased to transport bus drivers back and forth from the bus parking at St. John Neumann Church and that other means to address this problem should be considered. It was noted that the City currently uses a pager system to notify bus drivers of their need to report to Cascade Bay. The issues of sales tax. daily pass rates and selling season passes to non-residents were next discussed. Mayor Awada expressed surprise that the City had to pay sales tax on the admissions. Counci1member Masin inquired about how often when you buy tickets do you pay sales tax with the answer being that you always do, it's just included in the ticket price. Councilmember Bakken stated that we need to raise things somewhere and adding the sales tax to the ticket price and rounding off the total price along with showing the breakdown on the ticket was a reasonable solution. Councilmember Blomquist stated that everyone knew we were paying sales tax and the main objections were to the cost of daily rates not season passes. She said there were problems with daily admissions having to stand in line. Ms. Blomquist said she doesn't want to increase daily pass rates. Mayor Awada noted that the commitment was on getting residents into the facility and the complaints she received were from non-residents being unable to buy season passes. Councilmember Carlson noted that she likes non-resident passes after 4:00 p.m. Director Vraa suggested that there is capacity to sell additional season passes. He said that on the highest usage day there was no line due to how customers came and left through out the entire day. Director Vraa made the point that there should be improved marketing to balance utilization and that there is capacity for more season passes. He suggested that there could be a mark up for non- resident season passes and that the number sold could be limited. Councilmember Carlson noted her concern with season pass holders having to wait in line to enter the facility. She went on to say that she was not comfortable with the decisions tonight. She noted that season pass revenues were dropped considerably in the proposed budget and inquired if that was because of what she was hearing that numerous residents were not going to renew their season passes. Director Vraa responded that the changes in estimated revenues resulted primarily because the 1999 estimates were made before the Council established certain pricing policies and were not revised. He noted that the average price collected per season ticket bolder turned out to be approximately $33 and was considerably less than originally e'$-pected. He said that non-renewal statistics say there will be about 15% who do not renew their season passes, however there will also be another group of first time season pass patrons. Councilmember Carlson suggested another season pass idea of selling non-resident passes only after a certain date allowing residents to make desired purchases before non-residents were allowed to make any season pass purchases. Given the time, Mayor Awada noted that issues of opening earlier (10:00 a.m.), desired improvements in food service and additional lawn chairs remaining open for future discussion. Councilmernber Bakken moved and Councilmember Carlson seconded a motion to continue the balance of the Aquatic Facility budget and the discussion on "Roundtable and Additions to Department Head Business" to the November 1, 1999 Special City Council meeting agenda to be EAGAN SPECIAL CITY COUNCil MEETING MINUTES; OCTOBER 26. 1999 PAGE 6 0031.2 discussed if time pennits. Councilmember Carlson requested that the earlier opening time and the computer issue come back for more discussion. The motion passed unanimously. OTHER BUSINESS The other business item was continued to the November 1, 1999 Special City Council meeting by the previous action. ADJOURNMENT The meeting adjourned at 6: 15 p.m. to allow the City Council Chambers to be set up for the Advisory Planning Commission meeting. October 26.1999 Date