Minutes - Council Work Session - 02/27/2007

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Fire Chief Kapler stated staff was directed to implement parts of the first option and also to obtain bonding scenarios for new construction. Most of the minimal stabilization issues have been completed. Mr. Kapler advised there is an approximate 18-month period of activity that is required before groundbreaking. Staff was directed to include construction of the new Fire Station No.2 in the 2009 CIP. Some of the preconstruction work which involves architectural space needs and engineering work would need to begin in mid to late 2007. Finance Officer Lund advised CIP bonds allow slightly lower interest rates than utilizing EDA or HRA bonds; however, an opposing petition from 10% of registered voters would require a referendum or bonding through the EDA or HRA. She provided an overview of the following three bonding scenarios: CIP Bond; CIP Bond with City contributing $1 million towards the debt; and HRA Bond. Finance Officer Lund indicated the 2007 proposed levy was set at a 39.44% tax capacity rate. With the possibility of levy limits in 2008 taken into account, the estimation for the 2008 levy based on growth and an increase in taxable value is at a 40.37% tax capacity rate. With the construction of the fire station included in the calculation, the tax capacity rate estimate increased to 44.33%. Ms. Lund noted Council had discussed the possibility of an internal transfer to help with the cost of the fire station construction. She advised a $1 million internal transfer would bring the tax capacity rate down to 40.31 %, which is almost exactly the estimated rate based on growth and taxable value increases. Councilmember Olson inquired about the land value where the current fire station is located. Councilmember Elvig indicated the land value is approximately $3 million. Fire Chief Kapler advised the cost to remove the building is estimated at approximately $170,000. Councilmember Look stated his understanding is that the School District would require an acreage minimum of approximately 40 acres for a school site. He inquired about the acreage at the old city hall site. Fire Chief Kapler replied the site is approximately 30 acres. Councilmember Elvig indicated the School Board had said they could work with 25 to 35 acres for a middle school, less for an elementary school, and quite a bit larger for a senior high. Councilmember Strommen noted there was also an assumption of the schools sharing facilities with a smaller sized site. Councilmember Look stated he will need a hard selling on this project with the things the City has purchased to date. He has not heard any information about why the current fire house is not acceptable. He would shy away from spending another $2.5 million on something that is already in place. He needs further information on this project. City Council Work Session / February 27, 2007 Page 2 of 5