Minutes - Council Work Session - 02/26/2008

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2) Review Bury and Carlson Land Acquisition Agreement City Attorney Goodrich stated that he revised the proposed agreement after the discussion at the last meeting. He stated that he has heard back from Bury and Carlson's attorney and other than a few minor issues, they have agreed to our changes. Mayor Gamec asked when closing is scheduled. City Attorney Goodrich stated that it is anticipated to be on March 31, 2008. Councilmember Strommen arrived at the meeting. Public Works Director Olson stated that there were questions raised during the last discussion about the financing for this purchase. He stated that there are three options: acquire property beginning January 2009; acquire the property beginning January 2011, or no early property acquisition and obtain land on April 1, 2018. He noted that they used a conservative 3% for appreciation. He understands that this is a difficult decision with the possible issues in the next budget cycle, but noted that Finance Officer Lund had put together a debt service levy and asked her to review this information. Finance Officer Lund stated that the toughest time will be the next 3 to 4 years for the municipal center building. She stated that they had looked into the possibility of refinancing, but it did not come out as positively as they had hoped. She stated that the plan for an internal loan from the water utility of $1,000,000 and a levy is included to start to pay back this fund in 2010. She stated that this would be an increase in the debt levy for 2009 of approximately $80,000 and for 2010 of $39,000. She noted that by 2011, the debt service levy will decrease because of equipment certificates. Public Works Director Olson distributed an additional layout of the possible options relating to this property and reviewed the information. Councilmember Dehen asked what the realistic need is for a Public Works campus and whether it was needed sooner rather than later. Public Works Director Olson stated for the past 5 years or so, the City has put "Band-aids" on the existing buildings in order to meet the needs of the City. He stated that the City put up a manufactured home for offices, has equipment stored on Highway # lOin RALF buildings, that the water tower is utilized seasonally and noted that they are using just about every building they can. Councilmember Dehen asked why the City was projecting taking over the property so far out if there is a need right now. Public Works Director Olson stated that they are trying to look long term and if Public Works knows that they have a future campus, they can begin planning for the best ways to accomplish what the department does today in a new building. He stated that he knows it will be difficult for City Council Work Session / February 26, 2008 Page 2 of 4