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2024.04.22 Specail City Council MinutesSPECIAL OTSEGO CITY COUNCIL MEETING MONDAY, APRIL 22, 2024 G�e��l7�il OTSEGO PRAIRIE CENTER Call to Order: Mayor Stockamp called the meeting to order at 5:30 PM. Roll Call: Mayor Jessica Stockamp and Councilmembers: Brittany Moores, Jeff Dahl, and Ryan Dunlap. City Staff: City Administrator/Finance Director Adam Flaherty, Assistant City Administrator/Human Resources Sabrina Hille, Emergency Services Director Daryl Rausch, City Planner Daniel Licht, and City Clerk Audra Etzel. Absent Council Member Tina Goede. Attended via video conference (*) 1. Financing Discussion —Fire and Emergency Services Building Project: Jessica Green (*) of Northland Securities reviewed the packet material regarding financing options for the Fire & Emergency Services Building. CM Dunlap asked about the maximum principal and interest payments for General Obligation Capital Improvement Plan Bonds, Ms. Green said it only applies to capital improvement bonds and reviewed the annual maximum of $5,986,404, Mayor Stoclamp asked about using certificate of participation. Ms. Green said it is more common for schools to use but noted that there have been a few Counties that used the financing method, but in general it is not common for cities or counties. CM Dunlap asked how often lease revenue bonds are used for capital improvement projects. Ms. Green found about 17 lease revenue issuances over the past few years that were mainly used by charter schools as conduit bonds and noted they are less common than Capital Improvement Plan bonds. Mayor Stockamp asked about past funding sources for City facilities. City Administrator/Finance Director Flaherty said the City used lease revenue bonds for the Prairie Center and Public Works facilities. CM Dunlap asked how much money was set aside for Prairie Center. Flaherty noted that he does not have that information available off hand. Ms. Green reviewed the steps needed to move forward with either funding source. CM Moores asked for clarification on the 20-year Preliminary Comparison correction to the materials. Ms. Green said the G.O. CIP Bond Total Principal & Interest should be $32,256,829, not $32,856,829. Page 1 of 3 MINUTES OF THE CITY OF OTSEGO SPECIAL CITY COUNCIL MEETING April 22, 2024 CM Dunlap asked why lease revenue bonds exist? Ms. Green said cities can finance projects when there is no clear borrowing authority for unique project, or when a City determines that the project is considered an essential service and there is concern over the statutory process. CM Dunlap asked since the lease -revenue bonds are issued by the EDA if there was a reverse referendum? Ms. Green noted there is not a reverse referendum for a lease -revenue bond. Flaherty said staff is looking for direction on the funding options to guide staff efforts on next steps in the issuance process. He clarified any direction at this meeting will not bind the City into one funding mechanism. Ms. Green logged off at 5:57 pm. CM Dunlap is trying to see the benefit of the EDA lease revenue bond. CM Dahl asked if the project were to be delayed to 2027, what is the cost the City will pay for contracted services. Flaherty noted the contractual costs are operating expenditures, and the discussion at this meeting is more focused on the capital expenditures. He mentioned that the capital expenditure would continue to increase with inflation. Mayor Stocl<amp asked when the 5% of the levy can be adjusted? Flaherty said once a reserve or fund balance equal to 5% is established, the levy can be reduced to match the annual debt service. CM Dunlap asked if any of the CIP funds can be used as a buffer. Flaherty said that is an option for the Council to consider rather than levying the additional 5%. Mayor Stocl<amp noted one Councilmember is not in attendance and due to the size of the project, she would like to get all council members opinion. CM Dunlap asked when the EDA last met. Flaherty said the EDA's last meeting was in 2020. CM Moores said the process for the fire station was a hot topic three years ago. She feels it is important to continue with the emergency services project and wants to move forward. CM Dahl moved to Otsego in 2013 and taxes have increased and wants to Know where those funds were used. Mayor Stocl<amp said infrastructure has been built, but no city buildings. CM Dahl said the fire study shows there should be three fire stations based on the population. CM Dahl is in favor of the project and would approve the EDA lease revenue funding. CM Dunlap said the lease revenue bond is only to avoid a reverse referendum, he is in favor of a G.O. CIP Bond and going to the ballot if needed; he will not support an EDA Lease Revenue Bond. Mayor Stocl<amp said the Council is elected to represent the residents and she would like all Council be present. Page 2 of 3 MINUTES OF THE CITY OF OTSEGO SPECIAL CITY COUNCIL MEETING April 22, 2024 Council directed staff to move forward with both options and agree to discuss at a future meeting when all members are present due to the time lines. Flaherty will speak with Ms. Green and start drafting documents for either financing option. CM Dunlap motioned to not move forward with a lease revenue bond. Motion failed due to lack of a second. 2. Preview 2024 Assessment of Property Valuations (Verbal). City Administrator/Finance Director Flaherty said the Local Board of Appeal and Equalization meeting is scheduled for Tuesday, April 23rd at 6pm. Flaherty reviewed packet materials provided by Wright County. The County Assessor will go into further detail, currently no residents have signed up for the meeting. CM Dunlap asked about the map included. Staff will let the Assessors explain, but it appears the highlighted homes are the year they will be reviewed. Mayor Stocl<amp is glad to see the values going down for Otsego. Flaherty noted changes to the homestead credit payable in 2025 will be discussed, this will affect the total net market capacity. CM Dunlap asked about the process for walk-in residents. Flaherty said the meeting can be continued to a future date or the Council can vote to have no change which allows them to continue their appeal at the County level. 3. Discussion of Proposes 2025 Budget Review Calendar (Verbal). City Administrator/Finance Director Flaherty reviewed the proposed budget schedule. Flaherty is looking to separate the Truth -in -Taxation to a special meeting to allow for more feedback. He mentioned there will be continued discussion on the calendar as budget discussions begin. 4. Adjourn. CM Dahl motioned to adjourn at 6:36 PM, seconded by CM Moores. All in favor. Motion carried 4-0. ,q r Audra Etzel, City Clerk City of Otsego f e3�ica �w��cainN, iv�ay�i Page 3 of 3