04/15/2008 - City Council Finance Committee
AGENDA
FINANCE COMMITTEE MEETING
TUESDAY, APRIL 15, 2008
5:00 - 5:30 P.M.
CONFERENCE ROOMS 2A&B
1. AGENDA ADOPTION
II. NORTHWOOD PARKWAY BRIDGE AND INTERSECTION
IMPROVEMENT FUNDING
III. OTHER BUSINESS
IV. ADJOURNMENT
MEETING NOTES
FINANCE COMMITTEE MEETING
TUESDAY, APRIL 15, 2008
5:00-5:30 P.M.
CONFERENCE ROOMS 2A & 2B
Committee members present: Mayor Maguire and Councilmember Carlson.
City Staff present: City Administrator Hedges, Assistant to the City Administrator
Miller, Director of Administrator Services VanOverbeke, Public Works Director Colbert,
City Engineer Matthys and Transportation Engineer Plath.
Northwood Parkway Bridge and Intersection Improvement Funding
City Administrator Hedges reminded the Committee that at a special Council meeting on
February 12, 2008, the City Council discussed the status of the Northwood Overpass
Project and directed that the project be advanced from 2009 to the 2008 construction
season. Hedges added that the Council authorized bids for the project on February 19,
2008 and directed that the bid process be dual tracked with the Finance Committee's
review of the financial package being prepared.
Director Colbert noted the favorable bids received for the project.
The Committee and staff discussed the federal funds that were remaining towards the
ring-road. It was the recommendation of the Finance Committee to allocate the
remaining approximately $650,000 in federal funds to the Duckwood portion of the ring-
road in order to get the project bid ready.
Director of Administrative Services VanOverbeke reviewed the proposed financial plan
to fund the Northwood Overpass, which included the sale of Municipal State Aid (MSA)
bonds. Mr. VanOverbeke noted that the work on financing options have assumed a $5
million bond issue to finance the Northwood Overpass, although that number would
likely be reduced as a result of the favorable bids on the project and through potential
cost sharing with Dakota County.
It was the recommendation of the Finance Committee to proceed with the sale of the
MSA Bonds to fund the Northwood Overpass Project.
401�
City of Eagan va
To: Finance Committee:
Honorable Mayor Maguire
Councilmember Carlson
From: City Administrator Hedges
Date: April 11, 2008
Subject: April 15, 2008 Finance Committee Meeting
Please find attached the agenda and materials for the Finance Committee meeting
scheduled for 5:00 p.m. on April 15, 2008 in Conference Rooms 2A & 2B.
Given the special nature of this meeting with the very significant City Council action
regarding contract award on the regular agenda for later that evening, I want to take note
of the following:
1. With a myriad of assumptions and a page full of numbers, the enclosed material
may be somewhat difficult to follow without an in person explanation. Staff asks
for your indulgence and will succinctly present, explain, and respond to questions
at the meeting.
2. It is most important at this time to focus on the funding concept and not
necessarily on the long-term projections. The actual numbers for all project
approvals (budgeting and contracts), tax levies, and for any bond sales will be
presented at the time of formal approval of that particular component. Timing
and unique circumstances will continue to be major factors with future steps.
3. This packet material will be forwarded to the entire City Council with the
Administrative Information on Monday so all members will have this same
information in advance of Tuesday's regular meeting.
Please contact the Office of the City Administrator if you have any questions or if there is
any other information that you would like to have available at the Finance Committee
meeting or at the regular Council meeting.
City Administrator Hedges
City Councilmembers
Director of Public Works Colbert
Director of Administrative Services VanOverbeke
AGENDA
FINANCE COMMITTEE MEETING
TUESDAY, APRIL 15, 2008
5:00 - 5:30 P.M.
CONFERENCE ROOMS 2A&B
I. AGENDA ADOPTION
H. NORTHWOOD PARKWAY BRIDGE AND INTERSECTION
IMPROVEMENT FUNDING
III. OTHER BUSINESS
IV. ADJOURNMENT
Agenda Information Memo
April 15, 2008, Finance Committee Meeting
II. NORTHWOOD PARKWAY BRIDGE AND INTERSECTION
IMPROVEMENT FUNDING
ACTION TO BE CONSIDERED:
To prepare a recommendation for the City Council regarding the funding of the
Northwood bridge and intersection improvement project.
FACTS:
• At the special February 12, 2008, meeting the City Council discussed the status
of the Northwood overpass project and directed the following:
1. The project to be advanced from 2009 to the 2008 construction season.
2. Authorization of bids to be placed on the February 19, 2008 regular City
Council agenda.
3. The bid process to be dual tracked with the Finance Committee's review
.of the financial package being prepared.
• At the regular February 19, 2008, meeting the City Council approved the plans
and specifications for Contract 08-06 (Northway Pkwy — 35E Overpass) and
authorized the advertisement for a bid opening to be held at 10:30 a.m. on
Thursday, April 3, 2008.
• Action to receive bids and award Contract 08-06 is on the agenda for the
regular April 15, 2008 City Council meeting.
In response to previous direction from the Finance Committee, staff in
cooperation with the City's fiscal consultant, Springsted, has prepared a
possible funding scenario/model for consideration by the Finance Committee.
The following scenario tries to be responsive to the previous direction and
includes the following elements/assumptions:
1. While the model projects to 2043, the numerous assumptions will require
annual monitoring and potential modification. The objective has been to
show a practical funding concept/scenario that is feasible both short and
long term. Future circumstance may ultimately require delaying certain
projects, reducing costs in some manner, or in incorporating other
additional revenue sources. Those issues will need to be addressed
with subsequent CIP adoptions and future planning.
2. The model is prepared to maintain positive cash balances or relatively
small cash deficits at the end of each year.
3. In this model, Municipal State Aid (MSA) bonds would be sold in a net
amount necessary to fund the overpass/interchange project(s). The
work on financing options has assumed a $5,000,000 bond issue to
finance the Northwood overpass, although that number will be reduced
resulting from favorable bids on the project and through potential cost
sharing with Dakota County.
4. The County has acknowledged benefit to its transportation system from
this project even though it is technically "off -system" for them. County
staff will be recommending to the County Board a participation amount of
$675,000 as a part of this year's Capital Improvement Program.
5. Current MSA advances are repaid and subsequent MSA allotments are
first directed to debt service on MSA bonds.
6. The City's MSA allotment will increase per the estimates resulting from
the recently approved transportation funding bill through 2018. The
current model assumes an annual 5% increase each year after that date.
7. The City acknowledges the efforts of Representative Wardlow to obtain
State funding to assist with this project; however, State funds are not
assumed to be available in this model. Any future commitment by the
State to assist in Ring Road funding will reduce the overall cost to the
City and will be dedicated toward subsequent Ring Road project
components.
8. In general, no other outside funding sources are contemplated in the
current funding package.
9. Receipt of any other outside funds would also reduce the required bond
sale(s) amount. The final bond amount for the Northwood overpass
would be determined and given formal approval when bonds are sold,
probably in the summer of 2008.
10. The City's historical levy for the Major Street Fund will continue to
increase by 5% each year.
11. The City's supplemental $1,000,000 levy for bridges and overpasses will
continue and is increased by 1.0% annually. A lower bond sale amount
may eliminate the need to program any annual increase into this levy.
12. The 2008 -- 2012 5 -year CIP for streets and highways is fully funded.
The current model assumes that those costs will increase at 3% per year
from the five-year average beginning in 2013.
13. A second MSA bonding allocation of $15,000,000 for the Duckwood
interchange is placed in the model in year 2022. That is a gross cost
and the project is delayed into year 2022 to meet the. cash flow objective
in combination with the other assumptions used in making the
projections.
14. No interest earnings are incorporated into the model.
15. To simplify the process and to expedite the timing, the account balance
of approximately $350,000 in Federal funds is retained by the City to be
allocated to future Ring Road design and implementation.
Approximately $650,000 of Federal funds has been spent on costs
related to the Northwood bridge.
ATTACHMENTS:
• Enclosed on page is a copy of the funding model.
• Enclosed on pages _ and - rt is a copy of the letter from Dakota
County staff outlining the County's potential cost sharing.
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Physical Development Division 2008
Gregory J. Konat, Director April 9,
Dakota County
Western Service Center
14955 Galaxie Avenue
Apple Valley, MN 55124-8579
Russ Matthys, P.E.
City Engineer, City of Eagan
952.891.7000
Fax 952.891.7031
3830 Pilot Knob Road
www.dakotacounty.us
Eagan, MN 55122-1810
Environmental Mgmt. Department SUBJECT: Northwood Parkway Overpass
Farmland & Natural Areas Program
Office of GIS Eagan Project 758 Cost Participation
Parks Department
Office of Planning Dear Russ:
Surveyor's Office
Transit Office
Transportation Department This letter is in response to your letter dated February 15, 2008,
Water Resources Off Ice requesting Dakota County's participation in the cost of the Northwood
Parkway Overpass project.
As you are aware, it is unusual for the County to participate in the
construction of improvements to the city's roadway systems. City roads
generally serve a predominately local purpose and are most
appropriately paid .for with local funds. It also is difficult for the County
to participate in off -system improvements considering all current and
future needs on the County highway system. This request is not guided
by any current cost participation policies.
We understand, however, that this situation Is unique in a number of
ways:
The City and County recently conducted an extensive study of
Yankee Doodle Road (CSAR 28 Corridor Study) that clearly
identified the importance. of the Northwood Parkway Bridge as
one of the actions required to maintain mobility along this stretch
of CSAR 28. As noted on page 28, "This analysis concluded
that if the Northwood Parkway Bridge were not in place by 2030,
the Denmark Avenue/CSAH 28 intersection would be operating
at LOS F, meaning that it would be severely congested. This
would occur even if all the other recommendations for the West
Segment were to be carried out."
Page 2
Russ Matthys, P.E.
April 9, 2008
2. Aside from the CSAH 28 Corridor Study recommendations, the City and County
do not have any other practical options for relieving congestion on CSAH 28.
CSAH 28 already is a six -lane road through the 1-35E interchange area,
including the intersections of CSAH 31 and Denmark Avenue. Adding through
lanes or separating grades in the future will not be practical or feasible.
3. The City has done a good job of planning for and developing a ring -road system
in the area, including the Northwood Parkway connection. We also understand
that a freeway overpass is an unusual expense for the City to pay as part of
developing a collector roadway system; and, therefore, can be difficult for the
City to afford on its own.
In the specific case of the Northwood Parkway Overpass, County staff does believe cost
participation is warranted due to the reasons cited above and will be recommending
County cost participation to the County Board as part of this year's Capital Improvement
Program. The level of recommended participation is estimated at $875,000 based on
traffic level reductions to the County system identified in the Yankee Doodle study dated
August 2007.
We appreciate your proactive approach to enhancing the transportation system and
taking advantage of the current competitive bidding climate. Please submit the
Northwood Parkway Overpass project as part of this year's County Capital Improvement
Program request. As you are aware, the Dakota County Board of Commissioners will
make the ultimate decision on any participation.
Again, we thank you for your efforts in enhancing the transportation system. if you have
any questions regarding the Capital improvement Program or the County's
recommended level of participation, please contact Brian Sorenson, program engineer,
at 952-891-7122.
Sincerely,
Mark J. rrl'bach
Transportation Director/County Engineer
0
Agenda Information Memo
April 15, 2008, Finance Committee Meeting
II. NORTHWOOD PARKWAY BRIDGE AND INTERSECTION
IMPROVEMENT FUNDING
ACTION TO BE CONSIDERED:
To prepare a recommendation for the City Council regarding the funding of the
Northwood bridge and intersection improvement project.
FACTS:
• At the special February 12, 2008, meeting the City Council discussed the status
of the Northwood overpass project and directed the following:
1. The project to be advanced from 2009 to the 2008 construction season.
2. Authorization of bids to be placed on the February 19, 2008 regular City
Council agenda.
3. The bid process to be dual tracked with the Finance Committee's review
of the financial package being prepared.
• At the regular February 19, 2008, meeting the City Council approved the plans
and specifications for Contract 08-06 (Northway Pkwy - 35E Overpass) and
authorized the advertisement for a bid opening to be held at 10:30 a.m. on
Thursday, April 3, 2008.
• Action to receive bids and award Contract 08-06 is on the agenda for the
regular April 15, 2008 City Council meeting.
• In response to previous direction from the Finance Committee, staff in
cooperation with the City's fiscal consultant, Springsted, has prepared a
possible funding scenario/model for consideration by the Finance Committee.
The following scenario tries to be responsive to the previous direction and
includes the following elements/assumptions:
1. While the model projects to 2043, the numerous assumptions will require
annual monitoring and potential modification. The objective has been to
show a practical funding concept/scenario that is feasible both short and
long term. Future circumstance may ultimately require delaying certain
projects, reducing costs in some manner, or in incorporating other
additional revenue sources. Those issues will need to be addressed
with subsequent CIP adoptions and future planning.
2. The model is prepared to maintain positive cash balances or relatively
small cash deficits at the end of each year.
3. In this model, Municipal State Aid (MSA) bonds would be sold in a net
amount necessary to fund the overpass/interchange project(s). The
work on financing options has assumed a $5,000,000 bond issue to
finance the Northwood overpass, although that number will be reduced
resulting from favorable bids on the project and through potential cost
sharing with Dakota County.
4. The County has acknowledged benefit to its transportation system from
this project even though it is technically "off-system" for them. County
staff will be recommending to the County Board a participation amount of
$675,000 as a part of this year's Capital Improvement Program.
5. Current MSA advances are repaid and subsequent MSA allotments are
first directed to debt service on MSA bonds.
6. The City's MSA allotment will increase per the estimates resulting from
the recently approved transportation funding bill through 2018. The
current model assumes an annual 5% increase each year after that date.
7. The City acknowledges the efforts of Representative Wardlow to obtain
State funding to assist with this project; however, State funds are not
assumed to be available in this model. Any future commitment by the
State to assist in Ring Road funding will reduce the overall cost to the
City and will be dedicated toward subsequent Ring Road project
components.
8. In general, no other outside funding sources are contemplated in the
current funding package.
9. Receipt of any other outside funds would also reduce the required bond
sale(s) amount. The final bond amount for the Northwood overpass
would be determined and given formal approval when bonds are sold,
probably in the summer of 2008.
10. The City's historical levy for the Major Street Fund will continue to
increase by 5% each year.
11. The City's supplemental $1,000,000 levy for bridges and overpasses will
continue and is increased by 1.0% annually. A lower bond sale amount
may eliminate the need to program any annual increase into this levy.
12. The 2008 2012 5-year CIP for streets and highways is fully funded.
The current model assumes that those costs will increase at 3% per year
from the five-year average beginning in 2013.
13. A second MSA bonding allocation of $15,000,000 for the Duckwood
interchange is placed in the model in year 2022. That is a gross cost
and the project is delayed into year 2022 to meet the cash flow objective
in combination with the other assumptions used in making the
projections.
14. No interest earnings are incorporated into the model.
15. To simplify the process and to expedite the timing, the account balance
of approximately $350,000 in Federal funds is retained by the City to be
allocated to future Ring Road design and implementation.
Approximately $650,000 of Federal funds has been spent on costs
related to the Northwood bridge.
ATTACHMENTS:
• Enclosed on page is a copy of the funding model.
• Enclosed on pages and is a copy of the letter from Dakota
County staff outlining the County's potential cost sharing.
CRY of Eap ma
To: Finance Committee:
Honorable Mayor Maguire
Councilmember Carlson
From: City Administrator Hedges
Date: April 11, 2008
Subject: April 15, 2008 Finance Committee Meeting
Please find attached the agenda and materials for the Finance Committee meeting
scheduled for 5:00 p.m. on April 15, 2008 in Conference Rooms 2A & 2B.
Given the special nature of this meeting with the very significant City Council action
regarding contract award on the regular agenda for later that evening, I want to take note
of the following:
1. With a myriad of assumptions and a page full of numbers, the enclosed material
may be somewhat difficult to follow without an in person explanation. Staff asks
for your indulgence and will succinctly present, explain, and respond to questions
at the meeting.
2. It is most important at this time to focus on the funding concept and not
necessarily on the long-term projections. The actual numbers for all project
approvals (budgeting and contracts), tax levies, and for any bond sales will be
presented at the time of formal approval of that particular component. Timing
and unique circumstances will continue to be major factors with future steps.
3. This packet material will be forwarded to the entire City Council with the
Administrative Information on Monday so all members will have this same
information in advance of Tuesday's regular meeting.
Please contact the Office of the City Administrator if you have any questions or if there is
any other information that you would like to have available at the Finance Committee
meeting or at the regular Council meeting.
City Administrator Hedges
City Councilmembers
Director of Public Works Colbert
Director of Administrative Services VanOverbeke