HomeMy WebLinkAboutCity Council - 03/15/1984 - Special Meeting APPROVED MINUTES
EDEN PRAIRIE CITY COUNCIL
SPECIAL MEETING
THURSDAY, MARCH 15, 1984 7: 30 PM, SCHOOL ADMINISTRATION BUILDING (5)
CITY COUNCIL: Mayor Wolfgang H. Penzel , Richard Anderson,
George Bentley, Paul Redpath and George
Tangen
CITY COUNCIL STAFF: City Manager Carl J. Jullie, City Attorney A
Roger Pauly, Finance Director John D. Frane, ;
and Recording Secretary Karen Michael
ROLL CALL: Councilman Anderson was absent. '
Also present was Marvin LaGrow, Development Commission.
The purpose of this Special Meeting was to hear presentations regarding IDB Reserve
Systems. The meeting was called to order by Mayor Wolfgang H. Penzel . City Manager
Jullie said three proposals would be heard by those advocating establishment of a
Reserve System and one proposal from representatives of two firms not advocating such
a fund.
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O'Connor & Hannan: Jim O'Meara and Arlin Waelti represented O'Connor & Hannan and spoke s
to the merits of having such a system noting that O'Connor & Hannan has been working with
the cities of Minneapolis and Blaine on their systems as well as the IRRB which has a
similar system. O'Meara and Waelti noted the pending federal legislation and reported
on developments through today. It was their feeling that there will be changes in the
Federal legislation and they would not advise the City to make a decision on a reserve
system until the legislation is passed. Waelti noted that the National League of Cities
has been working on legislation which is supported by the Municipal Finance Officers. E
She reviewed what is included in the proposed legislation. She indicated the language
is unclear as to whether the legislation refers to old or new IRDBs. A "Summary of
Proposed Eden Prairie IDB Reserve System" is attached to these Minutes as Exhibit A.
Mr. O'Meara indicated that the Reserve System would not be successful unless
all IRB proposals were required to go through the system.
Dain Bosworth/Miller & Schroeder Municipals , Inc. : Dick Miller of Dain Bosworth and
F. Warren Preeshl , Tim Long and J. Patrick Wooldridge of Miller & Schroeder Municipals,
Inc. were present. Miller indicated there are two benefits to establishing such a fund:
1) it creates jobs and a tax base which would not otherwise take place; the system is
designed to bring into public markets developments which would not be able to be financed
otherwise; and 2) it provides fixed rate, investment grade, long-term financing. He noted
that there is insurance available which would mean the bonds would have a AAA rating.
Preeshl reviewed what has been happening with Federal legislation. Preeshl stated he
felt it would be a good idea to set up a Reserve System now because once Federal legis-
lation is passed many cities will be racing to set up such systems. He indicated the
system is self financing; Eden Prairie is an attractive City and would be one which
people would want to come to. Miller said this City is the best example in the Metro-
politan Area of long range planning; this is another tool which can put Eden Prairie in
the forefront. Miller said it would take about 90 days to put together a Reserve System.
Exhibit B includes additional material presented.
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City Council Minutes -2- March 15, 1984
Piper, Jaffray & Hopwood/Dou hert Dawkins, Strand & Yost: Representing Piper, Jaffray
& Hopwood were Rodney Pakonen and Frank Fairman and representing Dougherty, Dawkins,
Strand & Yost was Tom Peterson. A summary of the programs which they recommend for
the City of Eden Prairie is attached as Exhibit C. Peterson noted that the system
they propose can ask local banks, acting as a consortium, to contribute via a letter
of credit. Fairman indicated an ideal system for Eden Prairie would have two common
reserve funds: the first reserve would be bond proceeds and the secondary reserve would
come from outside of the bond proceeds including CDBGs , tax increments , etc. ; these are
what the integrity of the system is based upon. Pakonen stated that Eden Prairie really
does not need this type of system, but this might encourage development which might
not otherwise occur in the City. Pakonen said the reasons the City should hire them
to establish a reserve system is: 1) their ability to sell "retail", 2) their knowledge
of alternative kinds of systems, 3) they have done work in the City prior to this,
4) they are not underwriters with anyone in competition with the City.
Dorsey & Whitney/Juran & Moody: Verlane Endorf, Dorsey & Whitney, and Russell Prince,
Juran & Moody, spoke against the establishment of a reserve system. For further in-
formation see Exhibits D and E. Prince reviewed the St. Paul Port Authority and how
that differed from systems which are being established now. He indicated you cannot
mix good credit with poor credit on a volunteer basis which is what would have to occur
to make the system work. Endorf said a system should be able to stand on its own as
it is too expensive otherwise for the credit enhancement. Prince said there are many
avenues available for financing -- so why should a city get involved.
Each of the above groups was allocated approximately 45 minutes for their presentations.
This was followed by discussion by the City Council . Bentley said he did not feel the
City has development goals; we have a Guide Plan but that does not establish goals or
criteria. He said he would like to see the City 1) establish development goals via a
clear plan,2) some sort of limitation placed on tax free development bonds, and 3)
priorities established as to how the development bonds are to be used. Tangen said
he felt the monies must be prioritized; the City should not be in the venture capital
business. Bentley said he felt that IRDBs were used by people who were looking for
a less expensive way of doing what they were already going to do. He said he felt it
would be appropriate if the funds were used for expansion of an existing facility.
MOTION: Tangen moved, seconded by Penzel , to table the issue of the establishment of
a Reserve Fund to a time uncertain and to refer this back to the Development Commission
and Staff for their recommendations. Motion carried unanimously.
MOTION: Bentley moved, seconded by Penzel , to direct the Development Commission and Staff
to work on establishing development goals through a clearly drawn plan of priorities.
Motion carried unanimously.
MOTION: Redpath moved, seconded by Penzel , to adjourn the meeting at 11:15 p.m.
Motion carried unanimously.
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