11/05/1992 - City Council Special
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MINUTES OF A SPECIAL MEETING OF THE
EAGAN CITY COUNCIL
Eagan, Minnesota
November 5, 1992
A special meeting of the Eagan City Council was held on Thursday, November 5, 1992 at 5:00 p.m.
at the Eagan Municipal Center. Mayor Egan and all Councilmembers were present. Also present were City
Administrator Hedges, members of the staff and representatives of the Eagan Hockey Association.
1993-1997 CAPITAL IMPROVEMENTS PROGRAM
City Administrator Hedges presented an overview of the capital Improvements program as it has
been developed by staff and refined by Council. He then Introduced Brad Schmidt of the Eagan Hockey
Association relative to the ice arena item in the CIP. Mr. Schmidt thanked the City Council for its openness
to discuss alternative approaches to ice arena funding and went over a proposal developed by the Hockey
Association in that regard. He stated that the proposal Included two alternatives; one would be to fund an
ice arena together with ball and soccer fields and the other would be to fund an ice arena only. He
Indicated that the Hockey Association wished to combine several funding sources including $1.3 million from
the City's community investment fund, a $200,000 contribution from the Eagan Hockey Association over 20
years, $50,000 in sweat equity from the Hockey Association and $100,000 from an ice arena hourly
surcharge for ten years. He stated that would leave a gap of $650,000 to $1,400,000 to fund the respective
proposals.
He stated that the Hockey Association would propose to meet debt service on these bonds through
the contribution noted above, and increased fee on adult recreational teams and two Impact fees, one on
account transfers for City utilities and another on new building permits. Together, these fees would generate
sufficient funds to pay the debt service on the proposed bond sale.
Councilmember Wachter indicated that an alternative funding mechanism for the debt service or
financing gap could be the use of pull tab proceeds dedicated to a recreational facility. Councilmember
Pawlenty asked if all of the interest from the community investment fund was currently being used. Finance
Director VanOverbeke indicated that the dollar amounts listed in the CIP consisted of 90% of the proceeds
of the community investment fund with 10% being returned to principal each year. Pawlenty also agreed
with Wachter that the City should define the amount being raised by pull tabs within the City and investigate
how much revenue pull tabs could generate for this purpose. Councilmember McCrea stated that the City
should be careful about how much of the pull tab revenue could be used since many positive community
activities are also supported by pull tabs, including the Community Action Council, the B. Robert Lewis
House, the Crime Prevention Fund and other worthy causes.
Councilmember Awada stated that she supports the use of the $1.3 million City allocation for an Ice
arena project. She stated that she disagrees with the fee Increases proposed by the Hockey Association
because they have no direct relationship to the use for which they are intended and therefore could be
considered to be additional taxes. She asked for further information relative to research which had been
prepared by the Community Development Department relative to the park dedication fee and its use. City
Administrator Hedges indicated that he had not had an opportunity to review the Community Development
memorandum in that regard and that additional analysis would be performed on its findings.
Mayor Egan commented on various aspects of the study, including the impact fees and the potential
for pull tab revenue and asked that the staff coordinate additional research.
Mr. Schmidt asked that the Council consider the possibility that interest rates would increase In the
near future and stated the Hockey Association's hope that the City would move quickly to take advantage
of the low interest rates. Council then discussed the specific allocations within the proposal. A question
was raised as to whether the fees proposed would raise the revenues projected. Community Development
Oc
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November 5, 1992
Director Runkle responded that the City continues to see a relatively high level of growth and that any
projections based on 1992 numbers would probably be high as compared to building levels over 20 years.
There was particular discussion concerning the additional $100 recreation facility fee for each building
permit.
Councilmember Awada stated that she was not comfortable in raising taxes or fees for such a facility
given the two defeated referendums proposed by the City In the past. She suggested that the $1.3 million
City allocation would be a significant base upon which to develop additional financing. She stated that the
Hockey Association should pursue private sector support for a large portion of the remainder and suggested
that pull tab revenue could be used to fund any gap. She stated that any surcharge on use should be
earmarked toward future facilities, such as a second sheet of ice or a community center.
Mayor Egan asked that staff review the budget and discuss the possible use of revenue bonds with
the City's fiscal consultant to determine whether they can be legally utilized. He also strongly urged that
the Hockey Association explore additional corporate giving. Schmidt stated that the Hockey Association
had been extremely unsuccessful in getting corporate contributions in the past and that only one Eagan firm
had volunteered in that regard. He reiterated the Hockey Association's request for an impact fee on the
building permit.
Councilmember Pawlenty agreed with Councilmember Awada's comments, but shared the Hockey
Association's concern that corporate dollars might not be as easy to raise until the project was certain to
be developed. Councilmember McCrea stated that the use of community investment fund would be
supported by all Councilmembers and that the concept of revenue bonds should be investigated. She
stated that the Hockey Association should pursue pull tab alternatives and asked staff to develop a report
on the annual pull tab proceeds in the City. She suggested that perhaps the City could require a percentage
of pull tab revenues be dedicated to this purpose. She said it was essential for the Council to understand
the feasibility and legality of all of the items proposed and asked that it be placed on a future agenda for
further consideration.
Councilmember Pawlenty stated that Eagan could not be a major city without an ice arena. He
stated that the City already subsidizes other sports activities and operations and that an ice arena is an
obvious next step. He also supported the use of pull tabs and private sector support for such a facility.
Mayor Egan thanked the Hockey Association for its presentation and indicated that staff would be
doing additional analysis of the proposal and its financing elements. He then asked staff to ensure that the
new City Councilmembers were invited to all future meetings, workshops and tours so that they could be
familiar with these issues as they transitioned into their new roles.
Mayor Egan stated that it would be necessary for staff to provide additional information on the cost
of a basic, aesthetically acceptable ice arena, that a basic site plan and operating budget be prepared, that
the financing options be returned to the City Council and that it be placed on a formal agenda at some point
in the future for public input relative to this concept. It was also suggested that a tour of the Circle Pines/
Centennial Ice Arena be scheduled for November 21 at noon for all Councilmembers, new Councilmembers,
staff and interested parties.
There being no other business, the meeting adjourned at 6:30 p.m.
JDH
November 5, 1992
Date NZ3 City Clerk