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HomeMy WebLinkAboutSP May 14, 2003 Q,~ Q./.Y ~ (,/3-03 CITY of ANDOVER SPEClALANDOVER CITY COUNCIL WORKSHOP-AUY 14,2003 MINUTES The Special Workshop of the Andover City Council was called to order by Mayor Mike Gamache, May 14, 2003, 7:05 p.m., at the Andover City Hall, 1685 Crosstown Boulevard NW, Andover, MinnesotL Councilmembers present: Don Jacobson, Mike Knight, Ken Orttel, Julie Trude Councilmember aDsent: None . Also present: City Administrator, John Erar AGENDA APPROVAL Councilmember Trude advised there are a number ofiterns on the agenda this evening that are shown as discussion and approval. She indicated the Council would be receiving a lot of information for the first time, and she would suggest they not expect to act on all of the topics. Mayor Gamache indicated he hopes they will be able to make some decisions, as they have talked about some of these topics for a long time. Councilmember Trude noted the park dedication fees as one example. She indicated she talked to the City Attorney about it today, but she will bring up her . concerns under that topic. Motion by Jacobson, Seconded by Orttel, to approve the Agenda as presented. Motion carried unanimously. Mayor Gamache noted there were quite a few items on the agenda, and he welcomed those here to discuss the issues, but asked that they not belabor them. He welcomed all the members of the various task forces present and thanked them for their work. DISCUSS AND APPROVE BUILDING SITE ORIENTATION/OUTSTANDING FACILITY DESIGN ITEMS Mr. Erar indicated there were some outstanding issues concerning the site orientation and facility design, and asked that Mr. Rozeboom review them for the Council. Mr. Rozeboom indicated he wanted to go through the highlights of the construction document they received, and review the site plan options. He indicated they have several options, and have gone through several designs and layouts since they started, with modified spaces. He indicated there are several decisions they need the Council to make to move forward, and one item for discussion is the Special Andover City Council Meeting Minutes - May 14, 2003 Page 2 field house size. He stated they are still in the pre-design phase, and with these decisions will settle on the scope of work so they can proceed. Mr. Rozeboom explained that the first program option is 144,000 square feet, with a smaller field house size and an aquatic center versus a water park. Other cost issues, such as intersection upgrades, storm water retention and parking needs have also been incorporated. There are four building site options for review, two each of north/south and east/west configurations. He noted the committees they have worked with are leaning toward the north/south schemes. Also in the document are assumptions on building quality, with a discussion needed of material options and engineering schematics. He stated under the Council's direction, they are looking at a 50 year building, which would be of quality materials. Councilmember Trude stated she thought they were going to have a discussion of materials. She indicated it looks like ceramic tile is used a lot, which she thought was more costly, and while it might make sense in some areas, they had talked about using less costly material where they could. Mr. Rozeboom indicated they would have that discussion. Councilmember Trude asked if these materials were then considered the 'high end'. Mr. Rozeboom stated they were not; the materials were comparable to other community centers and institutional grade. They used tile in the bathrooms and shower rooms, which is acceptable, but you have to look at where you put the high- end material, it carmot be used throughout. The aquatic center and primary lobby would have wood beams, which are more expensive but make it a warmer space. They have made some decisions but are looking for discussion on what the Council wants and where it will go. He reviewed each of the four site plans, indicating the east/west schemes are A and B. He explained that with A, they lost a ball field, and found out very early those were important. B left all three fields, but split up the parking. It also created the least attractive building, as you see a lot of the back from Hanson. It has the aquatics facing north, although that could be flipped, and would have northeast entries, which are not preferable in this climate. C has the building on a north/south layout, and relocates one ball field, which has an additional cost. The building is fairly linear, but it has a friendly face to it. They would suggest the smaller spaces have lots of brick and glass. He indicated one problem with this is there is a fair amount of exterior wall, since the buildings meet end to end, so it is more expensive in that respect. He explained that the main parking is on the east, with some available on the west. The parking counts change ITom scheme to scheme, and one question they would like to have decided tonight is whether the Council wants nine foot or ten foot stalls. He advised that each of the others have the field house specifications that is reflected in the document. Mr. Rozeboom explained that D has a smaller field house, and rotates some of the building layout to an east/west orientation, creating more shared wall space. In this scheme they would need some backside parking, which is not shown. He indicated that if the softball field need is truly three, D is the recommended layout. The question is can three fields be kept and still have a good, solid site plan. He realizes the committees would prefer to keep them, but there is a big investment in this building and the City will want it to be right. He indicated that the important decisions needed to finish are: --- - - ,-- Special Andover City Council Meeting Minutes - May 14, 2003 Page 3 · Confirmation of the program to use, including the size of the field house. There is a 19,000 square foot difference in the plans. · Parking requirements, nine foot or ten foot stalls. Mr. Erar noted that item will go to the City Council separately, and information is being gathered to present to them at this time. · Softball fields; preservation, how many are appropriate. · Quality assumptions; ceramic tile can continue to be discussed; the more important issues tonight are the mechanics. Mr. Rozeboom stated in the proposal, air conditioning is shown in all of the specifications, including the field house. Councilmember Trude asked if it was functionally possible to have air conditioning in all of the areas. Mr. Rozeboom stated they are trying to create a visual connection between activities. If they are going to air condition only parts of the building, they may need to create a material barrier, such as with glass. He indicated another issue is elevated versus a conclave track, but that does not need to be decided this evening. Councilmember Trude indicated that for the air conditioning cost, they need to know the cost difference both now and on-going. Mr. Rozeboom stated he believes the on-going cost is more what they need to look at. He indicated those are the items that will help them finish and be able to move to the design phase. He would like to come out of the workshop with one of the four schemes chosen, so they can more fully develop models and provide the community committees with the tools they need to move forward. Mayor Gamache asked if the YMCA see the softball fields as being a benefit. Pat Lynch indicated any activity space helps, but they do not necessarily need three. Mayor Gamache asked if the only difference between C and D, besides moving the field, is turning the buildings. Mr. Rozeboom stated it was; this provides more shared walls but reduces the space. Mayor Gamache asked if they would then have room for another sheet of ice or something else. Mr. Rozeboom indicated they would. Mayor Gamache asked what would be needed for west access to the buildings. Mr. Rozeboom stated they would have to shift the building slightly from what is shown to provide a service access, but they could do that in D. He indicated one of the problems with the east/west layouts is the parking is split from the entrance. They did that because they do not want to move the field house into the existing tree stand. He stated he likes D because you have public parking by the entrances, the back side is screened by ball fields, and it allows for expansion. Mayor Gamache asked about the size of the field house, clarifYing that D has a field house that would fit three basketball courts. Mr. Rozeboom indicated that was correct. He stated there are two options; option one has three courts and an outside running lane. Another option is to elevate the track, which would have a little bit smaller field house. He indicated the cost was a wash, because you either have a larger building or the cost to elevate the track. He stated the court sizes were competition size, so you could have volleyball or badminton there too. The size of this is 35,000 square feet. The second option for the field house is 52,000 to 55,000 square feet, and there are several ways they can change the outlay of the courts. - ~.- Special Andover City Council Meeting Minutes - May 14, 2003 Page 4 Mr. Erar indicated there were two or three key issues, noting that the project budget that has been approved does not include option two. He added that he wants the Council to understand the cash flow issues, indicating the field house does not pay for itself. If the City is striving to have the field house support itself, neither option will. He noted, however, that the expanded option would allow the possibility of converting one section of courts into a short-field soccer field and still having three basketball courts. If the Council goes with only the three court option, you could not have both sports playing at the same time. He wants the Council to recognize that either way they would have trouble with cash flow, since the model that was advanced by the task force was trYing to achieve a facility that would pay for itself. Councilmember Trude asked if the field house was less costly than the other space. Mr. Erar indicated it was, but the aquatic area pays for itself, whereas the field house will not. Councilmember Jacobson asked how they would have a floor for both. Mr. Rozeboom indicated they would pick something that would be sufficient for both uses. It would be softer than a regular basketball court but a synthetic surface that is compatible with both sports. He noted this would not be a competition facility for basketball; the only thing that is competition compatible is the size. Mayor Gamache stated that in terms of the quality assumptions, what part of the mechanics are they to decide. Mr. Jensen stated that they have mechanical equipment that will fit any application, so there are a number of things to consider. First is the initial cost, then the operation and maintenance costs, third the life cycle of the equipment. He indicated they are proposing a dedicated mechanical system for each of the spaces. He advised that when talking about the aquatic center or the ice arena, just about all the equipment they would see would be inside. He indicated those systems not onJy heat and cool, but control humidity as well. For the field house they see about 50 percent each way; both inside and outside, which is why they are asking for a decision on this for the design phase. He explained that units on the roof tend to be harder to access, and are therefore not always properly maintained, so their lifespan is typically shorter. He noted that rooftop units usually have a 15 year lifespan, some more, some less, and within rooftop equipment there are various levels of quality. For inside equipment, they have seen some units last 30 or more years, but the average is 20 to 25 years. Ductwork is another consideration; if you put it in the center of the roof, there is less ductwork. If the unit is inside, it will probably be at one end and there will be more. Councilmember Jacobson asked if with a rooftop system, loading would have a factor on the roof cost. Mr. Rozeboom stated they would probably but on the roof of a support base, not the center of the roof, so ductwork costs would really not be saved. There are also screening issues to be aware of. Mr. Erar indicated there are significant screening requirements in the city, which could present a significant cost. CounciImember Knight asked if they could speak of the actual costs. Mr. Kronholm stated that you would be building a room, but without fInishes and no roof Councilmember Trude asked if it would affect noise. Mr. Kronholm stated it would have to be baffled. Councilmember Orttel stated he believes they need more information on this. He thought the choice was clear cut, but if they are only talking a five to ten year difference, that is not much. He stated .-- -- Special Andover City Council Meeting Minutes - May 14, 2003 Page 5 that often equipment does not last that long anyway due to energy concerns and improvements. Councilmember Knight stated some of the biggest sports facilities are using rooftop units. He is wondering why there are so many out there if there is not much difference and they are the worse of the two options. Mr. Kronholm stated that some spaces are better for indoor equipment. Councilmember Orttel stated he would be in favor of the most cost effective option. Mr. Erar reminded them they would have to factor in the cost of screening the unit or adjustment in the building to hide it. From a risk management standpoint, he believes the most important issue is air quality. He stated the City would want to avoid mold, mildew or any other environmental issues. He indicated that throughout the process that was the number one issue they heard about, whether talking about an interior unit or an exterior one. Councilmember Jacobson stated they need to make a decision if they want a single or double field house, which would determine the size of the equipment needed. Councilmember Knight indicated that it seems to him if they do not have a double field house they are going to have competing priorities. Councilmember Orttel asked if it was correct that it would be $1.5 million per side in the field house. Mr. Kronholm indicated that was correct. Councilmember Knight stated when they were talking about moving the ball field, they heard the cost was included in the proposed budget. He asked where it was accounted for in the money. Mr. Kronholm indicated it was included in the soft costs. He stated the figure was $135,000 originally, then they increased it to $175,000 for the lights. He agreed that if they did not have to relocate a field, that $175,000 would disappear from the budget, not be allocated elsewhere. Councilmember Orttel stated it was a good comparison to look at $175,000 for a ball field or $1.5 million for a soccer field, but he thought they needed all three fields. Mr. Kronholm indicated that what they heard from the task force was the city needs the fields, but there are plans in the future to move them. That is why they feel they should not compromise this site and building to save a field if it is going to be moved in the future anyway. Mr. Erar stated there have been several meetings with input on this, and the idea to eliminate two fields was not well received. They have come back with two plans; one drops one field and one maintains three fields, either in their current location or by relocating it. Councilmember Jacobson stated that since they are looking at a building that will be here for 50 to 70 years, and they want it to be a showplace, he recommends they do it right. He indicated to save $50,000 now does not mean much over 50 years. He would propose they go with plan D, stay with ten foot parking stalls, take out the back ball field and go with indoor mechanics for the aquatics area and ice arena and an outside room for the field house. He would rather do it right now than say in lO years they should have done it differently. Councilmember Orttel indicated he did not hear them saying they could not have 10 foot parking stalls and still keep all three ball fields. Mr. Rozeboom indicated they can, they would just have fewer parking stalls. Councilmember Orttel suggested they have a row of bigger stalls and a row of smaller stalls. Special Andover City Council Meeting Minutes - May 14, 2003 Page 6 Councilmember Knight suggested they have bigger stalls closer to the building where the kid traffic is, and nine foot stalls further out. Mr. Erar asked that the Council defer the size of the parking stalls until the workshop scheduled for this issue, since staff is preparing a lot of good information that may help them decide. Councilmember Orttel asked if there were a particular number of stalls needed. Mr. Erar stated they need 650 stalls. The difference between having nine and ten foot stalIs is the amount of impervious surface they would be adding, which not only decreases the land left but increases the water retention needed also. He indicated they have heard that Andover continues to go with ten feet, when it is not necessary. He stated maybe in commercial settings, but not in institutional ones. Councilmember Trude disagreed, indicating you still have the same issues in institutional settings. Councilmember Orttel asked if there were enough spaces available either way. Mr. Erar stated one suggestion has been to add parking on the north end. He stated they could meet the parking count either way, it just is a matter of how much surface space they want to have. Councilmember Orttel asked if there was a way to orient the building to add on to the field house later. Mr. Rozeboom stated he does not think that would be realistic. You would be talking about removing one entire wall and re-doing the entire roofto add on to it. Councilmember Orttel indicated he was told at a recent meeting that they would not want to use just one side for a soccer field, because for competition you need two. Councilmember Trude agreed, indicating with two fields they can rotate teams. With one soccer field they could use it for under eight years old leagues, but the teams usually do not rent indoor space for that age. Councilmember Jacobson reiterated that if they are losing money on one side, they will lose more money on two. Councilmember Orttel stated that was why he wanted to know about future expansion, as it pays to consider their options. He agrees with the layout ofD, and wants the most effective way to deal with utilities. He recommends leaving the third field, installing air conditioning in the entire building, since they can shut it off if they do not want to use it, and having one soccer field in the field house. Councilmember Trude asked if they have good numbers on the revenue from the field house. Mr. Erar indicated at the meeting on April 29 they received information on one field versus two, showíng a loss either way. He stated the revenue potential was greater with two fields, but still will not make up the lose. Councilmember Knight stated they are saying then that the field house is not feasible. Mr. Erar indicated the community expectation is that there wilI be a field house; the issue is not whether to provide a field house, but what size it should be. He added that the ice rink should do well when you consider operational expenses. Mayor Gamache agreed that C or D would be the best option, with the smaller field house, three fields, and air conditioning with the option to cut it off. ----. - '--- Special Andover City Council Meeting Minutes - May 14, 2003 Page 7 Motion by Orttel, Seconded by Jacobson to recommend option D, with three fields, looking at the most cost-effective mechanics, air conditioning in all areas and the smaller field house design. Further Discussion Councilmember Trude stated she is not comfortable going ITom a double field house to a single field house without discussing it with the residents. She stated they do not know how much it will cost per household, but she does know if they have five courts they can run tournaments. She also knows they need gym space, and she knows they have to subsidize their part, but does not know what that means. Councilmember Knight stated he is having trouble calling it a community center when there is little to no community space. Mr. Erar stated there are meeting rooms that are public spaces available in this model. Councilmember Knight indicated he thought the multipurpose rooms were part of the YMCA. Mr. Erar indicated not all of them are; there are meeting rooms that are community rooms. He indicated this has the same components originally articulated by the task force, with the same community features. They did not lose anything by joining with the YMCA, but they gained a lot. There are still cornmunity rooms. Councilmember Orttel stated if they go back to the survey they relied on to get this project off the ground, the residents said they want these amenities, but that the city should share the cost with someone else. He thought they were past that. Councilmember Knight indicated he is not sure about what they are sharing; who has precedence on scheduling and that type of arrangement. Mr. LaSalle indicated they have talked a lot of sharing spaces, and the YMCA does not have any impact on the field house. He agreed they have not talked about scheduling, as they have not gotten that far in the process, but it will have to be discussed. The YMCA's need for the field house will be discussed too. He indicated the problem with the field house is everything will be happening at the saine time, but the Y' s use of field house settings is dropping dramatically; the only scheduling problems may be kids programs on Saturdays. Councilmember Trude asked that with scheduling, are they talking about member access only at the YMCA facilities or would it be a shared use. Mr. LaSalle said they would have to come up with something everyone could agree on. Pat Lynch stated what is key in their mind is what does the community want. The programs for seniors and parents with young children are usually at different times than the prime programs. It is important that residents do not view the Y's involvement negatively. They want to have a shared approach with the city, but the YMCA does not have a big need for a field house. The partnership is the most important thing to the YMCA. They have a reputation of 150 years of community partnering, and that all stays within the community. It needs to be clear the YMCA is not driving the cost up. Councilmember Trude indicated the question she gets from residents is can they use the YMCA portions if they are not members. Pat Lynch indicated there are several models they have used in other communities, such as community nights or no member fees for residents. There are several contract models, and it is up to the City to decide. Motion carried. Councilmember Knight opposed. Councilmember Trude abstained. ~--- - _.- Special Andover City Council Meeting Minutes - May 14, 2003 Page 8 RECEIVE REPORT ON CAPITAL CAMPAIGN EFFORTS Mr. Scott LeDoux stated excitement has been building since January on this project He advised that February 19th was the fIrst meeting of the cabinet, and everyone was very excited at that time. They recruited volunteers for four sub-cabinets, and after only one week had enough volunteers. They started their meetings of the sub-cabinets in March, and the progress has been amazing. He explained that where they are now is the communication task force needs some decisions so they can get information out to the residents and maintain the excitement. The leadership development task force has identified someone to take over, but needs some more information before commitments can be made. Without additional information and direction, they cannot go any further. He reiterated they have great volunteers, but need more direction. He advised that the communications team needs to know what the project is going to cost, and how it will be funded. He added they need to know the general terms of the YMCA agreement, noting everything they have seen from the YMCA has been impressive and they are excited to have them here. He stated they need decisions so they can go forward and keep the momentum. He advised that the first phase is to get the hockey rink open by October 2004. There is a hockey association volunteer on each task force, and it is imperative they meet the October 2004 commitment. He commented that the city needs a central place in the community to gather, and he thinks the field house will provide that. Councilmember Jacobson stated the last he heard ITom the committee they were looking for donations of $3 - 4 million. He asked if they still thought that was achievable with the economy such as it is. Dave Assmus stated when they did the study, they came up with the $3 - 4 million, and he still thinks they can accomplish that. They have found that even when the economy weakens, there are still people willing to stand behind the community fmancially. That is the purpose of the capital campaign committee. Mayor Gamache thanked all the volunteers of the sub-cabinets and task force. REVIEWIDISCUSSlAPPROVE CITY OF ANDOVER/YMCA MEMORANDUM OF UNDERSTANDING FOR YMCA PRINCIPLES OF PROJECT PARTICIPATION Mr. Erar explained the draft before the Council is a working product of the YMCA and City staff. They are not looking for the City Council to approve the document this evening, as he is sure they will want to take it home and review it, but he does believe it addresses all the key issues that were raised at the beginning of the partnership with the YMCA. It addresses the key questions raised by the City Council on how the partnership will work. He added there is a memo from City Attorney Hawkins indicating he has no problems with the document, and this is not legally binding, but will set the stage for legal documents between the two parties in the future. Mr. LaSalle stated there were items besides this that they will need to address, such as scheduling and also the YMCA is looking at a way to add six slides to the aquatic center and make it a water - ------ Special Andover City Council Meeting Minutes - May 14, 2003 Page 9 park, which would add wording to the document. They are currently looking at this internally, and he thinks it would be a great asset to Andover and the YMCA. Councilmember Jacobson acknowledged it was not a legal document, but questioned who drafted it. Mr. Erar stated the original template is ITom the YMCA, with comments incorporated ITom staff. Councilmember Jacobson stated he lopked at the timeline, and if they go ahead, they will have to decide in the next couple of weeks how to fmance this. The document says they do not go to a legal lease until November. He asked what happens between June and November, as the City will be incurring expense; ifit comes to November and the City and YMCA cannot come to terms, the City will have all the architect expenses. He does not know why the lease should take to November, and would prefer it was closer to the City's decision. Mr. LaSalle stated they share that concern, and he does not want to see them not come to an agreement from a public perspective. He agrees they need to get the lease done as soon as possible, but there is a lot oflegal cost to get it done. He stated they could get as much agreement as possible and get a start on a legal document. He would like to have YMCA and City staff expand it as much as they can themselves and then go to the legal departments when they have a pretty good document in hand. Mr. Erar stated his understanding was the YMCA was hesitant to get into a fmallease agreement before costs are fmalized. Also from the City's perspective, if costs come in high and we have a signed agreement, it may not be appropriate. They will have the lion's share of work done, but for the fmal timing, the YMCA Board will want to know the exposure, as will the City. Councilmember Orttel stated they could refme this document, as was stated, without dollar amounts. Councilmember Trude agreed it would be important to have something more binding before incurring a lot more cost. Mr. Erar advised that the City Attorney indicated this is a very standard approach; when both the City and YMCA are in agreement on issues, the lease process will go much smoother. He would like to get the Council's comments, and develop it further for the June meeting. Councilmember Jacobson indicated he wants to clarify it should not take until November to complete. He asked if the YMCA Board has looked at it. Mr. LaSalle stated they have to go through the same process. Councilmember Orttel stated that at some point, if you are going to be partners, you have to trust each other. They are not going to be able to cover each detail, but to go forward both parties have to trust each other. Councilmember Trude stated she does not think that is in question, she just wants something more solid before November. Mr. Erar indicated this will not even go to bid untilJanuary or February. For the record, this is probably the best document they will see until they have all the figures. Mr. LaSalle added they would like to have the Council give their comments, and the YMCA Board give their comments, and maybe get to a document that lays out both parties intent. -- Special Andover City Council Meeting Minutes - May 14, 2003 Page 10 Mr. Rozeboom indicated the value of pre-design is when they are done, the budget will be set and that number cannot be exceeded. Mayor Gamache stated they will take the document and get back to Mr. Erar with comments. CounciImember Trude asked on page 3B, where it talks about areas shared by all users, will it get more detailed. Mr. LaSalle indicated it would, with attached exhibits. Mr. Erar cautioned they do not want to be too specific. Mr. Rozeboom indicated that with the decisions tonight it gives them the opportunity to develop a building plan which will help the rest of the plans develop. DISCUSS AND APPROVE PARK DEDICATION FEE CONTRIBUTION Mayor Gamache reviewed that the park dedication fee is currently at about $160,000, and the next area would bring the total to about 80% of the $500,000. Mr. Erar noted staff did not believe they would have any problem meeting the $500,000. Councilmember Trude stated what came up when she talked to the City Attorney is that he is not sure it could be used for debt, so it may have to be structured differently. Councilmember Orttel noted that he was under the impression United Properties were going to make a dedication often percent. He thought this was outside the normal park dedication fee. Motion by Orttel, seconded by Knight to apply park dedication fees from Andover Station South to the Community Center project. FURTHER DISCUSSION Councilmember Jacobson indicated he would vote against this. He has been in discussions on other park projects and lighting needs at parks, and they are several hundred thousand dollars short. He would like to see money used to get Prairie Knoll Park up and running and let the community center stand on its own. He added the Park Board will never be able to bond like the community center project can. Councilmember Trude agreed. Prairie Knoll Park is going to have a football field by 2004, which the city needs, and she agrees they should use this money elsewhere. Councilmember Orttel stated he thought this was only part of the money available, and there was more coming. Mr. Erar confIrmed that was the case. Councilmember Trude asked if they could use some for other projects now and dedicate $500,000 oflater fees. Councilmember Orttel asked when the fees will be paid. Mr. Erar indicated $500,000 over eight years. Councilmember Orttel indicated they do not have to take it all here; they could probably do both. Councilmember Trude asked if they could use $175,000 for Prairie Knoll. Mr. Erar advised there was $170,000 now, and $330,000 from development of the commercial and residential Special Andover City Council Meeting Minutes - May 14, 2003 Page 11 portions, so there is $500,000 that will be generated ttom Andover Station South that is not earmarked. Councilmember Jacobson asked if there could be a friendly amendment that of the money generated from Andover Station South, they use $200,000 for other projects, then everything over and above that can go into the Community Center. Councilmember Orttel stated he cannot accept that. He believes they need to be more specific with fmancing, and he is afraid if they were to do that it would jeopardize the fmancing. Mr. Erar stated he would like to suggest looking at the total yield of Andover Station, and the timing. If the money is not needed until 2004 and is spread over eight years, there may be a way to use money available now and not jeopardize the money allocated to the community center. Councilmember Trude suggested the City Attorney be brought into the discussion, as she is not sure how it can be used, and the City Attorney wanted to research what would need to be done. Mr. Erar suggested they dedicate a specific dollar amount to the Community Center, and excess monies available before the Community Center needed them could be put into Prairie Knoll. Councilmember Orttel agreed, adding they should not limit it to Andover Station South, but all Andover Station projects. Motion amended by Orttel to designate $500,000 from TIF projects to the Community Center. Seconded by Knight. Motion carried unanimously. APPROVE/CONFIRM PROPOSED PROJECT BUDGET Mr. Kronholm stated he has met with everyone involved in the project on soft cost issues, including the County, who asked that $500,000 be added for road costs. Money has been added for a zamboni, kitchen equipment, materials, etc. He noted if it went to bid today, he thinks it would be less, and this is a not to exceed number. Councilmember Jacobson noted they were supplying the YMCA with water and sewer, and asked if that was included. Mr. Kronholm indicated it was. Mr. Erar noted fitness equipment for the YMCA is not included. It will be YMCA equipment, but it still needs to be discussed how it will be fmanced. Councilmember Orttel asked if personal property could be included in the lease. Mr. Erar indicated in some cases, yes. Councilmember Trude stated she would like to have them try to bring the costs down. Mr. Kronholm stated the design picked tonight will help with cost due to the shared walls. As to durability, the Council said they wanted something that will last. They are looking at material that is very durable, but there are many things they can still look at, such as the ceramic tile mentioned earlier. There will be a budget that cannot be exceeded. . -----~ Special Andover City Council Meeting Minutes - May 14, 2003 Page 12 Mr. Erar noted that on April 29 the City Council met and made a decision for program model one. This budget is $600,000 more. He asked that they explain what has increased. Mr. Kronholm stated that one thing that happened is when some people started to lean toward plan C, they had to cover the extra cost of more exterior walls, so some of that money will come off. Mr. Erar added that another item that Mr. LaSalle mentioned was they are looking at a waterpark. As those are YMCA costs, it will affect the overall number, but not the bottom line of cost to residents. Also, some of the revenue generating aspects need to be considered. If things come back that help increase revenue and decrease the need for subsidy, he would like to be able to pursue them. Councilmember Trude stated that sounds like a blank check. Mr. Erar indicated he is not suggesting a blank check, he is just saying if the YMCA says they want to put in tubes for a waterpark because they can make more money, he wants to be able to bring it back to the City Council. Councilmember Orttel stated that if the City is responsible, there is an issue, but if the facility is responsible, it is not such a problem. Mark Ruff stated the specific question is, is the facility the security behind the bond, and the answer is both yes and no. He indicated ultimately the City is who the bond holder will turn to. Councilmember Jacobson asked how much over the $17 million the bonds would need to be to cover for interest. Mr. Ruff stated $800,000 is the fIrst year interest alone. The fmance costs would probably be about $1.5 million total. He noted staffhas some other revenue options, and currently the plan is to only bond for project costs and finance costs. Mr. Erar added they have capitalized interest built in, with 29 payments, and one payment held. Councilmember Jacobson confmned that on a $17 million project they would be issuing bonds for $18.5 million. Mr. Erar agreed. Mr. Ruff indicated the numbers the City has used for their pro forma includes all of that. Mr. Erar stated the tax impact covers the extra amount. Councilmember Knight stated that typically a pro forma is done by a third party. He asked if Mr. Ruff could do one for them. Mr. Ruff stated he has not been asked to comment on staff's pro forma. Councilmember Knight stated he would like him to, and Councilmember Trude agreed. Councilmember Jacobson asked if he had done them for other cities, and which way they go. Mr. Ruff stated they can go both ways. Sometimes the architects do them, and are maybe not the best third party to do it. He stated aquatic facilities are the most common, so are easiest to do. Councilmember Trude noted they have high maintenance, so may be lower performing as well. Mr. Ruff indicated that was correct. Recess 9:50 p.m. Reconvene at 9:55 p.m. Councilmember Jacobson asked if there was anything in the legislature now or proposed that would limit a city's ability to bond. Mr. Ruff stated the Senate passed a tax bill yesterday that prevents tax increases for two years. So unless the City could find a way to delay tax increases to Special Andover City Council Meeting Minutes - May 14, 2003 Page 13 2006, it could limit their ability to bond. The House proposal does not limit them. He noted they may know the answer to that in a week or not for awhile. Councilmember Orttel suggested they approve the proposed budget. Councilmember Trude stated she is not willing to do that yet. Mr. Kronholm stated he would be willing to lower the budget amount to $16,500,000 based on site choice, with the understanding any soft costs would have to come through the facility. Mr. LaSalle stated the concept of adding slides to the aquatic center is to add revenue that the YMCA needs to make it work. Mr. Erar stated that in a discussion with Mr. Kronholm today it was his understanding that the approved amount would be if all things remain the same. If the YMCA says they want to add a waterpark, it would allow them to come back to the City Council. He thinks there is a good revenue potential there, and would not want a motion to preclude allowing the Y to come back with other ideas. Councilmember Orttel asked when they would know about the waterpark and how much it would add. Mr. LaSalle stated one scheme would be about $1 million, and they have also asked them to look at including a lazy river, as well as outside options which might increase revenue. Councilmember Knight stated this would create a site change. Mr. LaSalle noted there was room on scheme D to accommodate these things. Mr. Rozeboom indicated he would prefer the Council wait until they have furner numbers. Mayor Gamache asked if the discussion tonight gives the task force what they need to move forward with communications and fundraising. Mr. Assmus stated it will be very helpful to have the site layout, and while they would prefer to have a furn number, they can use the $16.5 million. Mr. Erar clarified that on April 29th the Council approved approximately $16.5 million, so by not moving tonight, there is no difference. The other decisions were important, so the only caveat tonight is the waterpark. Councilmember Trude indicated they have not had furn details, and she knows they will get to that. Mr. Rozeboom stated they have spent weeks on this already, and there are things they can do to decrease costs, but he does not think it will drop 20 percent, if that is what the Council is hoping. Mr. Assmus indicated if they can say the City Council has decided on a model, and the costs will not exceed $16.5 million, they can work with that. They will add a caveat that the YMCA is looking at additional amenities. DISCUSS AND DETERMINE PROJECT FINANCING METHODOLOGY Mark Ruff stated Standard and Poors afÍurned the City's A+ rating. He indicated they also forecast this project to them as a 'heads up'. He indicated the City has two choices for financing options. The fIrst is to vote on it and in the process of voting say they are going to issue $18 Special Andover City Council Meeting Minutes - May 14, 2003 Page 14 million in bonds, giving an estimate of the debt service, with tax impact, which is a state law. He stated the if there is revenue, you do not always want to use this option, since you cannot tell them about the revenue impact on the tax amount. Also with this option taxes are spread on the basis of market value versus tax capacity. He explained that the difference is that on market value, a $500,000 house pays the same as a $500,000 building, where as with tax capacity, commercial property would pay more. He indicated cities and counties have this option. Councilmember Orttel clarified that GO bonds are market value, which is correct. Mr. Ruff indicated that roughly 80% of city facilities are done on the basis ofleased revenue. A lot of times they will use this method on smaller projects rather than having a vote, but he has recently worked on a new County facility that was over $10 million that used leased revenue. The City of Brooklyn Park approved a referendum last year for police and fIre, noting often use is more of a factor in this type of fmancing. He indicated sometimes it is easier to not have to explain revenue to voters. He noted Hopkins recently did one with a vote, and it passed, attributing their communication plan for the success of the vote. He noted the difference in bond plans was minor. He advised the city has an A + rating for GO bonds, and if they were to sell would have an A or A-. He noted 70 to 75 percent of the time cities opt to use GO bonds, and it is a very common fmancing tool. Councilmember Jacobson asked if the amount per year for residents would go up or down based on the fact that more houses and businesses would be coming into the city. Mr. Ruff indicated that with leased revenue the added amount becomes part of the budget, and can be adjusted; the City would have to make that decision every year. He noted with GO bonds you cannot adjust. Councilmember Orttel asked how a bond this size affects the City's rating. Mr. Ruffindicated the City is allowed to have two percent of its market value in debt by taxes, which is a pretty substantial amount. Since this is a revenue facility, it may not count against the City. He noted a new Fire Station is the only other thing coming up, since roads, sewers and utilities do not go against the rating. Frank Kellogg asked relative to the thought process of bond issues and the House bill, is that not more relative to non-revenue producing projects. He indicated the YMCA and Ice Arena, at the least, are revenue producing, and asked how that was affected by the bill. Mr. Ruff indicated the bill just says you cannot issue a bond if you have to increase taxes. There may be a way to get around it, but he hesitates to do that until they know they need to. Mr. Kellogg asked if he had any information on the grandfather clause, and if that would apply to this project. Mr. Ruff indicated to be grandfathered, all construction contracts have to be in place by May 31, 2003. The Senate bill is a little easier, and says only the architectural contracts have to be in place. The City cannot meet the terms of being grandfathered unless they were to issue bonds by May 31, which is not possible. Special Andover City Council Meeting Minutes - May 14, 2003 Page 15 Councilmember Trude indicated she would like to have a pro forma done by Mr. Ruff. Councilmember Jacobson asked if it could be done before the June meeting. Mr. Ruff stated that honestly, it could not. He can do a cursory review with the assumptions used by staff, but that would be all. Mr. Erar indicated they will share the assumptions used by staff for this cursory review. Councilmember Trude stated she would want a more in-depth pro forma done before going to bonding. Mr. Erar asked if there were concerns with staff's pro forma. Councilmember Trude indicated an outside party review would just validate it. Mr. Erar asked if the cursory review supports staff's fmdings it would be sufficient. Councilmember Trude indicated that Mr. Ruff and his company would be with them through the entire process. She indicated an independent market analysis will help in bond sales as well. Councilmember Jacobson agreed, stating he would prefer an outside review. Councilmember KIllght asked how long it would take to do a full review. Mr. Ruff stated that depends on the programs. He indicated they could not really do that until things are fmalized, but he will work through it with staff. Motion by Orttel, seconded by Gamache to fInance using lease revenue bonds if the community center project moves forward. FURTHER DISCUSSION Mayor Gamache indicated the biggest hurdle is the Senate bill. If may be hard on this project if it becomes law, but he agrees this is the most 10gical way to move forward. Councilmember Trude stated she wants to see more information before making a decision, so she will abstain. Councilmember Orttel indicated he does not think the Senate bill will pass, and if the project goes forward, they only have two choices; GO bond or leased revenue bond, and they have heard the GO bonds "will not work. Mayor Gamache agreed. He does not see how they can move forward any other way. Councilmember Trude stated that considering the amount of material they have collected this evening and the number of factors still up in the air, she will abstain. Councilmember Jacobson agreed. Councilmember Knight stated that was his position as well. He also thinks they should have a public information hearing. Councilmember Orttel stated he would prefer to go to the public and say 'here is the plan we have', rather than present them with options that are hard to understand. He does not think they canjust say 'we want to build a community center, what do you think'. Councilmember Trude noted that a lot has happened in the last two weeks, and she thinks they need to get more information back on the changes. Councilmember Orttel stated he does not want to see this project fail for lack of action. If they can go a few weeks without harming the outcome, okay, but there are timelines that the City has committed to and he does not want to jeopardize them. Special Andover City Council Meeting Minutes - May 14, 2003 Page 16 Mayor Gamache asked if they had a drop-dead date. Mr. Kronholm indicated they had sat down as a team three weeks ago and refmed the timeline, coming up with June 10th as the fmal approval date in hopes of having equipment packages and other things this fall. He stated they could have bids in January and still meet the October completion date, but the June date is critical. Mr. Rozeboom added that June 10th would conclude the pre-design phase, which is the critical stage. If the Council is prepared, they will then go to schematics. He is not as optimistic as Mr. KronhoIm that they could go to early spring with bids and meet the October due date. The Council has chosen an easy plan, but he thinks they need to start this fall. Councilmember Trude noted they have a workshop scheduled for May 28th, and asked if they could have the cursory review of the pro forma by then, wruch would still give them two weeks to make a decision before June 10th. Mr. Ruff stated he would not be able to do it by then. He indicated the fIrst week of June would be the earliest. Councilmember Jacobson stated he still has an issue with the cost of the project. He indicated four weeks ago the project was going to cap at $12 million, now it is up to $16.5 million. He believes they need to know more and have fumer figures before they vote. He would also love to hear from the public that this is what they want. Councilmember Orttel stated his concern is he does not want to get to June 10th and not have a chance to go to the public. He wants to get some things wrapped up so they can go to the public, without waiting until the last minute. He rescinded his motion. Mr. Erar indicated that May 26th was Memorial Day, making it a short week and difficult to schedule anything with the public. He suggested they could hold a public information meeting the week of June 2nd if they published next week. He asked if June 4th or 5th would be acceptable to the Council. He advised they could update the report from the task force, and asked what additional information the Council would want to present to the public. He indicated when it comes to financing, it becomes difficult because if you want to get their opinion, and they opt to go to a referendum, the City will be unable to meet the hockey deadline. He does not want to mislead anyone that this would be an option. Councilmember Trude indicated the project has changed a lot in the last year, and she thinks they need more public input. She stated they would get some feedback from the meeting tonight. Councilmember Jacobson stated he does not necessarily want to ask the public if they want a referendum, he just wants them to tell him it is worth $18 million to them. Councilmember Knight indicated he is in favor of the project, but agrees it has changed so much the public needs to have input that this is what they want. Councilmember Trude added that with the YMCA involvement and the change in scope, she believes there will be questions. Special Andover City Council Meeting Minutes - May 14, 2003 Page 17 After discussion, it was determined a public information meeting would be held on June 4th at the school, with the Council convening in Council Chambers immediately following the public meeting. Staff will determine the best way to present the fmancial aspects to the public. Frank Kellogg applauded the City Council on working together and approaching this matter diligently. He sees progress being made and a lot of combined effort. The remainder of the agenda items were postponed until after the public information meeting. Motion by Orttel, Seconded by Knight, to adjourn. Motion carried unanimously. The meeting adjoumed at 11: 10 p.m. Respectfully submitted, Karen Whaley, Recording Secretary