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08/05/1997 - City Council Special 00255 MINUTES OF A SPECIAL MEETING OF THE EAGAN CITY COUNCIL Eagan, Minnesota August 5, 1997 A special meeting of the Eagan City Council was held on Tuesday, August 5, 1997 at 5:00 p.m., in the Lunch Room at the Eagan Municipal Center Building. Present were Mayor Egan and City Councilmembers Awada, Blomquist, Masin and Wachter. Also present were Director of Finance VanOverbeke, Director of Public Works Colbert, Fire Chief Jensen and City Administrator Hedges and members of the Volunteer Fire Relief Association. VOLUNTEER FIRE RELIEF ASSOCIATION PENSION City Administrator Hedges stated that he along with the Director of Finance have had several meetings with the relief association in an effort to prepare information regarding a potential switch of the retirement plan for the volunteers from a defined benefit to a defined contribution plan. He further stated that there are two (2) matters that require City Council policy direction including 1) agreement by the City Council on the appropriate pension amount for the firefighters and 2) consideration of a change from the defined benefit plan to a defined contribution plan. . City Councilmember Awada asked several questions including what is the liability to the City if the investment market does not do well for the relief association members under the defined contribution plan, is the relief association plan at $5,250 per year under the defined benefit and what is the rough equivalent for a similar contribution for the defined contribution plan. Director of Finance VanOverbeke responded that there is no additional liability to the City regardless of market conditions. The amount shown as an example for the defined benefit plan is $5,250 per year and the rough equivalent under the defined contribution is $3,650 from a cost standpoint. City Councilmember Awada stated that she is very supportive of the Volunteer Fire Department and its service is extremely valuable to the City, however, the City cannot afford to increase the pension program at an 8% annualized basis as it has the last several years. Mark Sportelli, representing the Fire Relief Association, stated that the original proposal submitted to the City Administrator was a higher number, however, at the direction of the City Administrator the amount was lowered from $4,300 to the $3,650. There would also be no up front contribution by the City for a conversion from the defined benefit to defined contribution. City Councilmember Awada agreed that the defined contribution in concept is the appropriate methodology for the retirement pension program, however, what is an acceptable rate. Mayor Egan stated that this process should be easier to budget with the defined contribution and supports the same in concept. Director of Finance VanOverbeke stated that the proposal is $3,650 with a 4% annual increase. City Councilmember Awada stated that a different methodology such as inflation, the CPI or other arrangements should be made to control the annualized percentage increase. Mayor Egan proposed that the City consider the $3,650 at the approved rate equivalent and, further, that the adjustments be tied to the percentage salary increase for all non-collective bargaining management personnel. He further stated that negotiations should not be considered for a ten year period of time. Special City Council Minutes August 5, 1997/page 2 OC256 Director of Finance VanOverbeke stated that there are various parameters that are not within the City's control such as the 2% insurance contribution. He stated that the City Council may want to address the issue of what if the 2% insurance contribution ends. Is the City automatically responsible for the full amount of funding required for the pension program or would this type of action require the City to reopen the negotiations. After further discussion, Mayor Egan suggested that staff prepare funding scenarios that include the $3,650 and a number less than the $3,650 for consideration and, further, that these numbers be compared to the cost for a lump sum benefit such as $4,400, $4,600, $4,800 under the defined benefit program. City Councilmember Awada stated that it is awkward to negotiate a pension amount with the Relief Association present and suggested that this information be brought back to the City Council for review without the Relief Association and, upon direction to the City Administrator, he will present the information to the Fire Relief members. PROJECT 689 - HAYES AND DELOSH STORM SEWER Director of Public Works Colbert stated that he would like the Council to review the proposed assessable area for the storm sewer improvements to the ravine through Hayes and Delosh Additions. He stated that the original project that was approved at the public hearing proposed to spread these costs on an area wide basis. Director of Public Works Colbert further stated that the assessable area, in addition to including the Hayes and Delosh Additions, extends into the Valley View Plateau and Post Additions. He further commented that while a pre-project appraisal supports the majority of the proposed assessments, the staff would like feedback regarding the proposed assessment amount and extent of assessable area and relationship to pending future public street improvements. The Director of Public Works discussed the appraisal and whether the assessable property should be limited to those with the adjusted appraisal, should the pre-assessment appraisal amount be capped? He stated that approximately 63 lots are proposed for assessment. City Councilmember Masin stated that it would be her recommendation that the City consider combining the street improvement and storm sewer improvements into one assessable project. City Councilmembers concurred that to assess for storm sewer in 1997 and then streets in 1998 would be extremely difficult for the residents and the City. PROJECT 717R - RAINIER LANE STREET IMPROVEMENTS Director of Public Works Colbert stated that at the May 6 City Council meeting, the Council cancelled Project 717, however, due to the insistence of several residents that something be done with the current gravel road conditions on Rainier Lane, the Council directed staff to look at alternative improvements other than the City standards. The Director of Public Works presented several options that would help stabilize the gravel street which include 1) full standard City streets, 2) a two inch bituminous overlay pavement, 3) double seal coat application, 4) double calcium chloride application, and 5) do nothing. City Council member Awada stated that she supports the concept of the two-inch bituminous overlay pavement. City Councilmember Blomquist stated that she would like two options presented to the residents, including 1) a full standard City street for the entire subdivision and 2) a two inch bituminous overlay pavement as suggested by City Councilmember Awada. After further discussion, there was a consensus by the City Council that two alternatives, including the two-inch overlay and the full City standard street improvement, be given consideration for the entire County Home Heights subdivision. Mayor Egan stated that this direction would allow the staff to initiate a formal public improvement process, which requires notification of the residents. Special City Council Minutes August 5, 1997/Page 3 00257 OTHER BUSINESS There being no Other Business, the meeting was adjourned at 6:20 p.m. TLH AUQUst 5, 1997 Date