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01/12/2010 - City Council SpecialAGENDA SPECIAL CITY COUNCIL MEETING TUESDAY, JANUARY 12, 2010 5:30 P.M. EAGAN ROOM -EAGAN MUNICIPAL CAMPUS I. ROLL CALL AND ADOPTION OF AGENDA II. VISITORS TO BE HEARD - III. JOINT MEETING WITH EAGAN'S LEGISLATIVE DELEGATION 7 0 • 7- IV. FIRE SAFETY CENTER UPDATE f V. UPDATE ON CIVIC ARENA GEOTHERMAL GRANT VI. ADJOURNMENT Special City Council Workshop January 12, 2010 III. JOINT MEETING WITH EAGAN'S LEGISLATIVE DELEGATION ACTION TO BE CONSIDERED: No formal action is needed. Eagan's Legislative delegation has been invited to the workshop to dialogue with the Council regarding Legislative issues of importance during the 2010 session. FACTS: • The City of Eagan is represented by State Senators Jim Carlson, District 38 and Jim Metzen, District 39, along with State Representatives Rick Hanson, District 39A; Sandra Masin, District 38A; and Mike Obermueller District 38B. • The City Council has various opportunities to meet with members of the Eagan Legislative Delegation, including certain Senate and House committee meetings and regional breakfasts, such as the Chamber of Commerce's Regional Legislative Breakfast. • It is the tradition of the City Council to meet with the Legislative delegation in the beginning of each year prior to the start of the legislative session. • In addition to the many legislative priorities the City of Eagan supports through its membership with the LMC, MLC, and Metro Cities, the enclosed list of legislative priorities and positions has been established to serve as discussion guide. This list is not intended to be comprehensive of every legislative issue important to the City; however, it does represent the more critical issues facing the City. • As of Friday, January 8, the City has received confirmation that Senator Carlson, and Representatives Masin, Obermueller, and Hansen will be in attendance on the 12 In addition to the letter inviting the delegation members to the meeting, each legislator was contacted via e-mail and phone to follow up on whether they would be in attendance at the workshop. ATTACHMENTS: • Enclosed on page is a copy of the letter that was sent to each member of Eagan's legislative delegation, inviting them to attend the January 12 meeting. • Enclosed on pages L3 through Y is the City of Eagan 2010 Legislative Priorities and Positions handout, intended to assist the Council as a discussion tool with the Legislators. 4 11/)) City of Eaaall Mike Maguire Mayor Paul Bakken Cyndee Fields Gary Hansen Meg Tilley Council Members Thomas Hedges City Administrator Municipal Center 3830 Pilot Knob Road Eagan, MN 55122 -1810 651.675.5000 phone 651.675.5012 fax 651.454.8535 TDD Maintenance Facility 3501 Coachman Point Eagan, MN 55122 651.675.5300 phone 651.675.5360 fax 651.454.8535 TDD www.cityofeagan.com The Lone Oak Tree The symbol of strength and growth in our community. December 2, 2009 State Senator Jim Carlson 75 Rev. MLK Jr. Blvd Capitol Building, Room G -9 St. Paul, MN 55155 Dear Eagan Legislative Delegation: On behalf of the Eagan City Council, I would like to invite each of you to attend the January 12, 2010 City Council workshop, at which the Council would like to dialogue with you about the issues and priorities the City has for the upcoming legislative session. The City Council always appreciates the opportunity to meet with the delegation each year at the beginning of the session, and hopes that you will each be able to join them on the 12 The meeting will begin at 5:30 p.m. in the Eagan Room, which is located on the second floor of City Hall. In order that we know who will be able to attend the Council workshop on January 12, please RSVP to Mira Pepper, Administrative Secretary/Deputy Clerk, at (651) 675 -5013 or tnpepperacityofeagan.com. Also, if you have any questions prior to the start of the session regarding issues of importance to the City, please feel free to contact me at 651/675 -5007. Si y, Thomas L. Hedges City Administrator Ciip of Eau The following requests and positions represent the Legislative priorities for the City of Eagan during the 2010 Legislative Session. In order not to duplicate what has already been provided to our Legislators, this list does not include every position on the issues that have already been addressed through policy documents set forth by the League of Minnesota Cities (LMC), Metro Cities (formerly AMM), or the Municipal Legislative Commission (MLC). The City of Eagan respectfully requests the support of our Legislative delegation on the following initiatives: 2010 - 2011 State Budget and Impact on the City of Eagan • Eagan has incorporated the unallotment of the estimated 2010 Market Value Homestead Credit (MVHC) into its 2010 budget, tax levy, and budget projections for future years. The Legislature must recognize the pressure the loss of MVHC places on the local tax levy and that City services, including public safety, will likely be impacted by reductions in MVHC and other State actions that shift costs and/or reduce revenues. • Eagan has maintained low property taxes and has been fiscally prudent for decades, and therefore strongly opposes any measure that would look to address the State deficit by taking money from cities' fund balances. • If the State further reduces LGA or MVHC from cities, then cities should be given the authority to levy back lost aid outside of the levy limits that have been imposed by the State. Transportation City of Eagan 2010 Legislative Priorities and Positions Secure funding sources to expand and maintain Eagan's transportation infrastructure. • Since 2000, the City of Eagan has spent $3.6 million of local funds on State Highway improvements and $6 3 million of local funds on County Road improvements, for a total of $9 9 million that has been diverted away from the City's local street needs. • The City of Eagan has a projected deficit of $42.1 million over the next 20 years for its Transportation Infrastructure Needs Analysis (TINA). • Dakota County, Inver Grove Heights and Eagan are financing the Regional Roadway System Visioning Study to identify future improvements to the Northeast Eagan/Northwest Inver Grove Heights area's transportation system. The study also involves the cities of Mendota Heights and Sunfish Lake, as well as the Met Council and MnDOT, due to the regional significance of the needed transportation enhancements. • While not yet complete, the study appears to concur with components of the TINA, but also seems to indicate likely additions to the list of transportation needs in the TINA, including a new interchange at Argental Trail/Delaware Avenue and I -494. Secure Funding for Proposed Ring Road • The Ring Road would provide relief to the intersection of Yankee Doodle Road (Co. Rd. 28) and Pilot Knob Road (Co. Rd. 31), which is the 2nd highest county road traffic volume intersection. • The Northwood Parkway Overpass was completed in 2008 at a cost of $4.4 million of local funds, and the Duckwood Drive Overpass is estimated to cost $5.6 million, which is beyond the means of a local agency to be able to fund for a regional improvement. • Approximately $430,000 of the $1 million in Federal funding appropriated to the project has been used to design the Northwood Parkway Overpass. The remaining funds will be applied to the design costs of the Duckwood Drive Overpass. • The City Council recently authorized SRF Consulting Group to design the plans and specifications for the Duckwood Drive Overpass. City staff is also negotiating the acquisition of future right -of -way for this improvement that had been previously officially mapped. Land Use Consider Modifications for TIF Redevelopment Districts to Offset Affects of the Current Development Economy • The League of Minnesota Cities has adopted a number of Legislative Policies related to modifications of tax increment financing. • In addition, the LMC TIF Task Force is discussing challenges presented to current and potential TIF districts (particularly redevelopment districts) resulting from the recession's recent and ongoing impacts on the financial and development markets. It will be important for cities to have greater flexibility to extend or modify existing TIF districts that are not able to proceed with new development to generate new tax base until markets stabilize and support new construction. • The Cedar Grove Redevelopment District faces many of the same development market challenges as other redevelopment districts in the state. The City is currently exploring whether_to submit a request for special legislation for the Cedar Grove District during this session. However, if there are bills proposed for other districts that address issues similar to those at Cedar Grove, the City may request that the Cedar Grove District be added to the legislation. Support TIF for Businesses Producing IT Products • Current TIF law limits the establishment of Economic Development Districts to those situations that support the expansion of businesses and creation of jobs that manufacture a physical product. • An increasing number of businesses in Minnesota are creating software and on -line publications. The ability of Minnesota cities to support the location and expansion of such businesses will be vital to the state's competitiveness in current and future economies. • Eagan's recent experience with Thomson West's proposed expansion illustrated the point. While it was clear that the firm's expansion project would create substantial property tax base and a large number of head of household jobs, current TIF law did not recognize it as being the equivalent of manufacturing, which would have permitted the City to consider the formation of an economic development TIF district to support the project. • Instead, the City needed to pursue special legislation to request permission to apply the statute to Thomson. While not all information businesses create products comparable to manufactured goods, state law should be amended to create criteria under which production of information technology products may be defined as manufacturing for TIF purposes. Oppose Industry Efforts to Oversee Building Codes • The Minnesota Department of Commerce uses an effective system to consider the implementation of international building codes and amendments of codes specific to the Minnesota environment and economy. The Code adoption process provides ample opportunity for input from interested parties including the construction industry, building officials and the general public. 11 City of Cap Transportation City of Eagan 2010 Legislative Priorities and Positions The following requests and positions represent the Legislative priorities for the City of Eagan during the 2010 Legislative Session. In order not to duplicate what has already been provided to our Legislators, this list does not include every position on the issues that have already been addressed through policy documents set forth by the League of Minnesota Cities (LMC), Metro Cities (formerly AMM), or the Municipal Legislative Commission (MLC). The City of Eagan respectfully requests the support of our Legislative delegation on the following initiatives: 2010 -2011 State Budget and Impact on the City of Eagan • Eagan has incorporated the unallotment of the estimated 2010 Market Value Homestead Credit (MVHC) into its 2010 budget, tax levy, and budget projections for future years. The Legislature must recognize the pressure the loss of MVHC places on the local tax levy and that City services, including public safety, will likely be impacted by reductions in MVHC and other State actions that shift costs and/or reduce revenues. • Eagan has maintained low property taxes and has been fiscally prudent for decades, and therefore strongly opposes any measure that would look to address the State deficit by taking money from cities' fund balances. • If the State further reduces LGA or MVHC from cities, then cities should be given the authority to levy back lost aid outside of the levy limits that have been imposed by the State. Secure funding sources to expand and maintain Eagan's transportation infrastructure. • Since 2000, the City of Eagan has spent $3.6 million of local funds on State Highway improvements and $6.3 million of local funds on County Road improvements, for a total of $9.9 million that has been diverted away from the City's local street needs. • The City of Eagan has a projected deficit of $42.1 million over the next 20 years for its Transportation Infrastructure Needs Analysis (TINA). • Dakota County, Inver Grove Heights and Eagan are financing the Regional Roadway System Visioning Study to identify future improvements to the Northeast Eagan/Northwest Inver Grove Heights area's transportation system. The study also involves the cities of Mendota Heights and Sunfish Lake, as well as the Met Council and MnDOT, due to the regional significance of the needed transportation enhancements. • While not yet complete, the study appears to concur with components of the TINA, but also seems to indicate likely additions to the list of transportation needs in the TINA, including a new interchange at Argental Trail/Delaware Avenue and 1 -494. Secure Funding for Proposed Ring Road • The Ring Road would provide relief to the intersection of Yankee Doodle Road (Co. Rd. 28) and Pilot Knob Road (Co. Rd. 31), which is the 2 highest county road traffic volume intersection. • Recent legislative efforts by the industry to create "code councils" made up of industry representatives and intended to control the Code adoption process would tilt the process away from the public interest and toward industry interests rather than balancing those interests as the current system does. In the past, industry representatives have also proposed authorizing private inspectors, hired by property owners or contractors to take the place of the unbiased inspections by municipal inspectors. The City opposes these efforts. Provide Additional Tools to Minimize Impacts of Foreclosures • Like all cities in Minnesota and around the country, the City of Eagan is focusing efforts on monitoring vacant and foreclosed properties and taking steps to minimize the impacts of vacancies on the properties themselves and their neighborhoods. • Cities will continue to need to use traditional and innovative tools to address this issue. In 2008, Legislation was enacted that requires private utility companies to share information regarding gas and electric shut offs with local units of government to aid in efforts to identify vacant or uninhabitable properties. Cities use this information as part of their database for and monitoring those properties for maintenance issues and to minimize vandalism and theft. • To build on the value of the utility shut off notice requirement, the City would also support legislation that would authorize water shut offs to properties whenever cities receive information from other utility companies that would suggest that the home is not heated. Currently cities may not shut off water service to unheated or vacant homes unless the City utility account is delinquent or the owner of record requests/consents to it. This is despite the fact that an unheated home is not safe for occupancy under the building code. • In addition, the City would support similar legislation that would obligate the owner of a property that is in foreclosure or vacant for any reason to provide contact information to the City that would permit prompt attention to matters that arise through property monitoring programs, including the need to secure buildings, the need to keep them in good repair during vacancies, the need to remove trash and maintain yards, etc. Telecommunications Broadband • State Task Force Recommendations: Eagan would urge the Legislature to adopt the key recommendations of the Minnesota Ultra High Speed Broadband Task Force, including 1) state speed and ubiquitous service goals by 2015, 2) the creation of a Broadband Advisory Council for MN, and 3) placing the overall oversight for progress toward the goals within one state agency. As Eagan had two representatives on the Broadband Task Force, Mr. Rick King of Thomson Reuters (Chair) and Eagan Communications Director Tom Garrison, both would be happy to be resources. While supportive of the statewide goals, it should be noted, however, that there is no comparative International benchmark for the speed goals, and that the statewide standard does virtually nothing to encourage next generation broadband deployment in Eagan and Dakota County. (See attached video DVD.) Lastly, it should be noted that cities are looking for more flexibility to partner with providers (existing or new) to deploy next generation broadband, but existing law can be a barrier to either area served or a fair process to partner that won't end up in lengthy & expensive lawsuits. • Mapping: Legislature made great progress with the first statewide broadband maps, but information must continually be updated to be of use, and current data to the census block level per provider is not disclosable, even though all providers are using the public rights of way. Cable TV & Franchising • Eagan is significantly concerned about H.F. No. 2396, regarding state video franchising. The Bill would amend Minnesota Statutes Chapter 238 and create a new "State- authorized video providers" that would be able to obtain a certificate to provide video service within 30 days from submission of an application, which means there would be little opportunity for input by affected jurisdictions and very limited time for serious consideration by the MPUC. There also appears to be no criteria on which an application could be rejected or denied by the MPUC. Legislation in other states generally requires that the agency charged with granting certificates adopt rules and procedures to implement an application and certification process. The Bill contains no such regulatory authority for the MPUC. Moreover, the Bill contains no enforcement authority for the MPUC once a certificate is granted. The League of MN Cities has an excellent policy paper with critique of the bill's shortcomings. While not opposed to modifications of the currents statewide cable franchise law, particularly for area served, as currently worded, with a statewide franchise, there is no local accountability, nor staff to take complaints about the franchisee's performance, as there is now. Finally, the U of M study which looked at others states with state cable franchises found that promised consumer cost savings did not occur, and in some cases existing providers abandoned current local franchise obligations in favor of state certificates. Memorial Tribute to Public Servants • The Eagan American Legion and Eagan Lionesses are raising funds to construct a memorial in Eagan to honor public servants who have lost their lives in the line of duty. The Eagan City Council adopted a resolution in December 2009 in support of the construction of such a memorial on City property. The City supports the efforts of the Legion and Lionesses to obtain State funding, in addition to private fundraising, for such a memorial. • Recent legislative efforts by the industry to create "code councils" made up of industry representatives and intended to control the Code adoption process would tilt the process away from the public interest and toward industry interests rather than balancing those interests as the current system does. In the past, industry representatives have also proposed authorizing private inspectors, hired by property owners or contractors to take the place of the unbiased inspections by municipal inspectors. The City opposes these efforts. Provide Additional Tools to Minimize Impacts of Foreclosures • Like all cities in Minnesota and around the country, the City of Eagan is focusing efforts on monitoring vacant and foreclosed properties and taking steps to minimize the impacts of vacancies on the properties themselves and their neighborhoods. • Cities will continue to need to use traditional and innovative tools to address this issue. In 2008, Legislation was enacted that requires private utility companies to share information regarding gas and electric shut offs with local units of government to aid in efforts to identify vacant or uninhabitable properties. Cities use this information as part of their database for and monitoring those properties for maintenance issues and to minimize vandalism and theft. • To build on the value of the utility shut off notice requirement, the City would also support legislation that would authorize water shut offs to properties whenever cities receive information from other utility companies that would suggest that the home is not heated. Currently cities may not shut off water service to unheated or vacant homes unless the City utility account is delinquent or the owner of record requests /consents to it. This is despite the fact that an unheated home is not safe for occupancy under the building code. • In addition, the City would support similar legislation that would obligate the owner of a property that is in foreclosure or vacant for any reason to provide contact information to the City that would permit prompt attention to matters that arise through property monitoring programs, including the need to secure buildings, the need to keep them in good repair during vacancies, the need to remove trash and maintain yards, etc. Telecommunications Broadband • State Task Force Recommendations: Eagan would urge the Legislature to adopt the key recommendations of the Minnesota Ultra High Speed Broadband Task Force, including 1) state speed and ubiquitous service goals by 2015, 2) the creation of a Broadband Advisory Council for MN, and 3) placing the overall oversight for progress toward the goals within one state agency. As Eagan had two representatives on the Broadband Task Force, Mr. Rick King of Thomson Reuters (Chair) and Eagan Communications Director Tom Garrison, both would be happy to be resources. While supportive of the statewide goals, it should be noted, however, that there is no comparative International benchmark for the speed goals, and that the statewide standard does virtually nothing to encourage next generation broadband deployment in Eagan and Dakota County. (See attached video DVD.) Lastly, it should be noted that cities are looking for more flexibility to partner with providers (existing or new) to deploy next generation broadband, but existing law can be a barrier to either area served or a fair process to partner that won't end up in lengthy & expensive lawsuits. • Mapping: Legislature made great progress with the first statewide broadband maps, but information must continually be updated to be of use, and current data to the census block level per provider is not disclosable, even though all providers are using the public rights of way. Agenda Memo January 12, 2010 Special City Council Meeting V; FIRE SAFETY CENTER UPDATE ACTION TO BE CONSIDERED: No formal action is needed. Staff will update and seek feedback from Council on the Fire Safety Center project and proposed timeline. FACTS: • On August 11 2009 Council reviewed and provided consensus on schematic design of the Fire Safety Center. At this meeting Council authorized proceeding further with the design of this project. • On December 15 2009 Council was given a brief update of the project design during a Council Listening Session. • On December 28 2009 the City formally closed on the four acres of land for the project. • Staff continues to hold regular weekly meetings with the architect and consultants to further develop the plans for the Fire Safety Center. • Sam Bontrager from SEH Architects and Fire Staff will present updated design plans to Council for review, input and direction. • Tom Ginter from Bossardt Corporation and Staff will review proposed timeline for the project and provide an update on the budget for the project. • On October 6 2009 the Finance Committee recommended that two remodeling projects be included with the Fire Safety Center as alternates. o The projects are the interior remodel of Fire Station #3 (built in 1978) and the remodel of the former dispatch center in the Police Department. o Both of these projects had been proposed as Renewal and Replacements projects in the 2009 budget. o Being included as alternative bids with the Fire Safety Center project will allow the Council to decide if the projects should proceed once formal bids are received for the overall project. o A brief summary of both projects with anticipated costs will be provided. ATTACHMENTS: • An updated Schedule will be provided at the meeting 7 Agenda Information Memo Eagan City Council Workshop January 12, 2010 V: UPDATE ON CIVIC ARENA GEOTHERMAL GRANT ACTION TO BE CONSIDERED: • To provide staff with direction regarding the City Council's desired process (e.g. Finance Committee, special or regular City Council meeting) to determining and choose financing options for the 50% grant match for a ground source heat pump demonstration project at the Civic Arena. • To provide staff with direction as to whether or not the replacement of the west arena floor should be wrapped into the financing considerations. BACKGROUND FACTS: • On August 3, 2009 the City Council approved the application for a 50% matching grant as part of Recovery Act - Geothermal Technologies Program for Ground Source Heat Pumps. The category was a ground source heat pump demonstration project so it would need to be visible in the community. • The grant was submitted on August 6 and on October 30, 2009 the City was notified that the application had been selected for negotiation leading to an award of $1,338,000. The grant requires a 50% match by the City. • On November 17, 2009 the City Council approved moving forward with the grant to complete Phase 1 which includes the comprehensive technical study and final construction estimates for the project. • Once the engineering process is completed and the actual costs are refined the City can choose to move forward with the grant or terminate the process and remain financially responsible for the $25,000 engineering costs to date. OPPORTUNITIES: • If the City proceeds with this geothermal grant there may be an opportunity to leverage the grant dollars in a way to wrap in the west rink floor replacement. While the cost of the replacement floor would not be eligible for the grant dollars, the guaranteed energy savings could easily wrap into this project to maximize long term energy savings. • Very preliminary estimates to replace the west arena floor are lower than what was originally projected due to the current bidding environment. S • Without the replacement of the west arena floor the energy savings may not be maximized. It is expected that there will be significant savings by wrapping the energy enhancing components of both projects together. COSTS: • The geothermal grant award of $1,338,000 is based on a preliminary project cost of $2,676,000 • The original estimate to replace the west arena floor is $500,000. • The preliminary cost estimate (without energy rebates, which are expected to be considerable) for the total project is $3,176,000; $1,338,000 of that is funded by the grant with the balance of $1,838,000 ($1,338,000 geothermal and $500,000 floor replacement) to be funded by the City. • The preliminary estimates indicate that with the geothermal component, combined with the low E ceilings will result in the near elimination of natural gas costs for the arena. That equates to $72,000 in 2009 ($91,000 in 2008). FUNDING OPTIONS: • Given the size of the City's match obligation and the cost of the floor repairs, it is fairly certain that borrowing will be necessary to raise the upfront capital to complete either or both of these projects. Per existing operational policy, current cash reserves are not large enough to finance these proposed improvements. • Arena operations are currently paying approximately $125,000 per year in debt service for borrowing used to finance construction of the 1997/1998 Arena expansion, adding the east rink. The last payment on these bonds is scheduled for October of 2018. • Staff is suggesting that discussions be undertaken with the City's fiscal consultant, Springsted, to put a financing package together that essentially includes the following components and parameters: o Additional borrowing is utilized in an amount to be determined. o All available energy rebates are utilized to reduce borrowing. o The cash flow from energy savings is to be directed to debt service payments. o Debt service on new bonds would be coordinated with the existing debt service payments to minimize the impact on current and on -going arena operations. • The new bonds could perhaps refund the existing bonds to get one new manageable debt service schedule. • Without a refunding, debt service on the new bonds could be back end loaded to step up when the existing bonds are paid in full. ■ The City Council could direct some sort of contribution from the Community Investment Fund as a component of the financing. 9 • The City has historically not placed operating dollars in the renewal and replacement account for major replacement items like the roofs and the floors, instead expecting the debt service cash flow savings at the time the bonds are paid off to be available for that use. The above financing scenario will require an acknowledgement of the reprioritization of expected future cash flow savings as to timing, amount, and availability. NEXT STEPS: • Final engineering estimates are expected to be near completion by January 15. • If after reviewing the final estimates the Council chooses to move forward with this project, Phase II could start as early as March which would include approval of final project contracts, confirm funding, confirm guarantees and get contracts in place for completion in July. • To provide for minimal interruption to arena operations it would be helpful to dual track investigation of costs and project scope with funding options, even though final cost estimates have not been determined. ATTACHMENTS: (None) f