The big problem, of course, has always been money. Constructing a full long-term solution to this interchange was estimated by the MnDOT to cost around $180,000,000. However, earlier this year MnDOT and the cities of Eden Prairie, Edina and Bloomington reached an agreement to support a project that was reduced in scope that was estimated to cost $140,000,000. The problem with the compromise solution was that the Federal Highway Administration (FHWA) did not support the reduced project scope. They continued to support the full project and said they would not contribute any federal dollars toward any project at 494-169 that did not include the full long-term solution.

That was a problem – until earlier this week.

Earlier this week the FHWA announced that they changed their mind. They will support the reduced scope project at 494-169 as a “demonstration project.” This is a big deal. The project can now move forward through the federal government’s TIGER grant program which is a competitive federal grant program for significant national transportation projects, like the 494-169 project. If the feds did not support the reduced scope project, well then our project wouldn’t have much of a chance of getting federal grant dollars. The fact that the feds now support the reduced scope project doesn’t guarantee TIGER grant dollars for the project, but it does put the project in the mix, which is really the best we can hope for at this time.

Working on this initiative has been a good exercise for our city. Our City Council, Mayor Young and Council Member Brad Aho in particular, have been working hard behind the scenes with their peers in Edina, Bloomington and Scott County to push the advocacy efforts for the project at the state and federal level. State Representative Jenifer Loon (R-42B) has also devoted a lot of time and energy to working with MnDOT and federal officials to help bring them along to their change of heart. And I’d be remiss if I did not point out the fine work of our Economic Development Manager David Lindahl. David always kept this issue in the forefront. He did a lot of little things to keep people thinking and talking about solving the 494-169 problem.

We’re not done yet. This is a notable event, but it doesn’t mean any federal money is on the way yet. We’ll keep working on this until it’s done.

There is one thing that we are not doing in response to the pandemic: Panic. There is no need to panic. Yes, according to the World Health Organization, there is an international influenza pandemic right now. But even so, that does not give us cause to panic. It should give us cause, however, to prepare. And that’s what we’re doing in Eden Prairie’s city government right now — we’re preparing.

Minneapolis Star Tribune reporter Mary Jane Smetanka had a story in Monday’s paper about how various Twin Cities municipal governments are preparing for the pandemic. We’re doing pretty much everything mentioned in the story, even though we weren’t part of her story. For example, we’ve reviewed and adjusted some of our personnel policies to clarify what we’ll do when we have good reason to think an employee is at work, yet sick. Response: We’ll send them home. No more heroic, sick employees at work during the pandemic. Their dedication is admirable, but it’s not what we need right now.

We have reviewed and strengthened our ability to have employees conduct work from their homes, if necessary. Getting our IT staff together on this one to check our hardware, software and train our employees on how to do this was key. We also experimented for a day by requiring all of our IT staff to stay home and work remotely. We discovered that it could be done. We also discovered some shortcomings from that experiment. It’s good that we discovered the shortcomings then rather than during the height of the worst case scenario.

We did a social distancing experiment for several days in our Police Department. We are cross-training our Parks Maintenance employees how to drive a fire truck and operate the truck’s pumps. We are updating all of our information about employees’ home addresses and telephone numbers. We are making sure that every operating division in city government has a backup plan to their backup plan to keep their key operations going in the event of unexpected employee sick leaves.

We’ve met with the City Council to review our plans for service preservation and reductions. We have set up a system that preserves public safety and public health services at normal levels for as long as we can. Maintenance of public infrastructure and public facilities is a second priority. Most of everything else we do comes after that.

I believe that if the worst happens we are going to get a lot of direction from the state about what we can and cannot do, so I think it’s important not to over-plan for the pandemic. But I think that we’ve got our ducks in a row, so to speak. I’m not looking forward to the flu pandemic, but I think we’re about as prepared as we can be to face the unknown threat.

The Eden Prairie Center is owned by General Growth Properties. One of our many points of interaction with the mall is that City staff must place a value on the mall for taxing purposes. The Feyder story leads one to believe that it is the County that values the property, but it’s really my co-workers here at the City Assessor’s Office who do the work that determines that value. The County reviews it and defends it, but it’s really a City-work product.

It’s important that we place a fair value on the mall because in Minnesota’s property tax system, placing a value on the mall that is too low means that the mall’s fair share of the total tax pie is shifted to all other property tax payers in the city. So while it would be easier just to give in to the large commercial property tax payers who appeal their assessed valuations every year, our staff does their best to do their best work and then defends it. I think that’s important for all tax payers to know because you’ve all got a stake in that valuation decision. It’s a small stake, but it’s a stake nonetheless.

When we can’t resolve a property valuation disagreement through discussion and negotiation, it’s off to the courts where one can typically expect a judge to split the difference. In the case of the Eden Prairie Center, the City had it on the tax rolls at $98.9 million in 2005. The City revalued the property, based on then current trends in the real estate market to $120 million. General Growth, owner of the mall, said it was only worth $72.7 million. But instead of splitting the different between $120 million and $72.7 million, the judge said we were both wrong and placed a value on the property of $132.7 million. She did the same thing for values in 2006.

I think it’s fair to say that we were stunned. This is not how these decisions usually turn out. General Growth has the option to appeal the decision to the Minnesota Supreme Court. The company, which is still in Chapter 11, hasn’t yet said if that’s what they’ll do. The decision will cost General Growth an estimated $1.8 million in additional property tax, which will flow back, eventually, to the governments that tax the mall. The City will get 2-3%. The School and County will get something similar to that. The biggest financial winners from this decision are the State of Minnesota and the Fiscal Disparities Pool, which together reap more than 60% of the property taxes paid by General Growth on the Eden Prairie Center mall.

While this decision was surprising, I think it’s the right decision. The value was what it was. The fact that the commercial real estate market it is in tough condition should not impact the property tax liabilities and values from three and four years ago. The market back then was pretty good here. And while I think it was the right decision, it’s certainly nothing to gloat about. Eden Prairie is stronger when the heart of its retail commercial district – the Eden Prairie Center – is stronger. General Growth will now need to shell out a lot of money to pay its back taxes. That’s regrettable, because they’re under financial stress right now. They’ll have to pay it out of their own tight revenues or they’ll have to go back and hit up their tenants for additional rent. Nobody is going to like that.

A new round of property valuations and tax notices are just around the corner. Oh boy.

To right of Secretary LaHood is State Representative Jenifer Loon(R-42B). Rep. Loon is the middle of her first term in the Minnesota House of Representatives. She represents District 42-B, which is the southern 2/3 of Eden Prairie.

The intersection of Hwy. 169 and I-494 is mostly in Rep. Loon’s district. She has taken on the legislative/political task of trying to help bring state and federal financial resources to this intersection to fix it. I’ve discussed the proposal to renovate this intersection many times in my blog. There is a design that will do the job, but it costs $100+ million bucks. MN Third District Congressman Erik Paulsen is also from Eden Prairie and also represented 42-B in the State Legislature. Congressman Paulsen is also well aware of the intersection issues and what needs to happen to fix it. I am optimistic that we’ve got the right people in the right places to help bring a resolution to the problems at 169 & 494.

On another road building note, there was a story in the Star Tribune today about how the State is bringing private money into public road building projects in order to better leverage the state’s transportation budget. Good for them. Cities and counties have been doing this for years. Decades, actually. I’m glad the state has discovered this strategy too.

The Minnesota Taxpayer’s Association also supports the operations and activities of the Minnesota Center for Public Finance Research. The MN CPFR and the MTA just released an issue brief about state and local employment and compensation in Minnesota from 1997 to 2007. It is a very interesting report. It answers some questions and raises others. I have included the link: MTA-CPFR Issue Brief 001. There is a helpful one page summary of the study on page 1. If that’s all that you have time to read, read it. You might end up reading the entire report. I did.

An important person in the history of Eden Prairie died on October 13 at the age of 98: Helen Anderson. Helen and her immediate and extended families were early settlers, movers and shakers in Eden Prairie. They played an important role in making Eden Prairie what it has become today.

Mrs. Anderson was a teacher, historian, author and civic leader in Eden Prairie for much of her life. There is a very nice story in today’s Eden Prairie News titled “She wrote the book on Eden Prairie,” which is literally true. I have a copy of it, autographed by the author, in my office. I read it shortly after accepting the city manager position here in 2002.

Helen was a pioneer. She will be missed.

Rest In Peace.

The Council also approved a change in the City’s criminal prosecution contract. The City’s current prosecutor is from the firm of Gregerson, Rosow Johnson and Nilan (GRJN). The attorney at GRJN that serves as the City’s prosecutor has been doing the City’s criminal prosecution work for the past 18 years. The Council asked staff to conduct a competitive selection process earlier this summer. We received five proposals that ranged from a low cost of $180,000 to a high of $240,000. The current prosecutor’s firm submitted the highest cost proposal. The lowest cost proposal was submitted by the firm of Bonner & Borhart. The Council awarded the three year prosecution contract to Bonner & Borhart. The new prosecutor will take over our criminal prosecution work on January 1, 2010.

The final professional services contract handled by the City Council last night did not change. The City’s three year civil legal services contract was awarded to our incumbent City Attorney Richard Rosow from the Gregerson, Rosow, Johnson and Nilan law firm. Mr. Rosow’s law firm has been the City’s civil counsel for over twenty five years. City staff conducted a competitive proposal process for this contract as well, but received only one proposal – the one from GRJN.

Sometimes a change in professional services providers can be a positive experience. Our independent financial auditor and our criminal prosecutor are important services in our city government. They are not employees, but we work with them very closely. Change is hard, but we’ll make it work.

Eden Prairie wasn’t mentioned in article, but we also did a bond refinancing deal that produced a favorable outcome for our city. We refinanced the bonds that were sold to build Fire Station #1 in 2000. The new bonds came in with a net interest rate that will save our City (and our taxpayers) just over $100,000 in interest costs – including a savings of $30,000 in lower debt service costs in 2010.

If you click on the graphic, you can can see it in a larger scale in a new window. It shows the movement in bond rates during the weeks around our bond sale date. You can see in the graphic that bond rates were headed down, down, down to a low spot that occurred on October 1. They started to head up again on October 8 and went up again on October 15. We sold our refi bonds on October 6. It looks like we hit the market with our bonds at just the right time – thanks to the diligence of the City’s Finance Manager Sue Kotchevar and the City’s financial advisory consultant Paul Donna from Northland Securities.

Nice job Sue and Paul!

It’s time once again for the Eden Prairie A.M. Rotary Club’s annual Vino Classico wine tasting fundraiser. The event will be held on Saturday, October 24 from 6:30-9 pm at the Eden Prairie Community Center, 16700 Valley View Road. In addition to a wide selection of wine, there’s also a wide selection appetizers and snacks – and a pretty good silent auction.

The proceeds from the event go directly to the Rotary Club and then directly back into the community and into the world to help financially support Rotary’s community, national and international programs, including student scholarships, missions to Honduras and an annual recognition banquet for Eden Prairie High School “behind-the-scenes” achievers.

Tickets are $35 in advance and $45 at the door and can be purchased at any Eden Prairie Liquor Store location. In addition to the Eden Prairie A.M. Rotary Club and Eden Prairie Liquor Stores, major sponsors for the event include Flagship Bank, C.H. Robinson Worldwide, TCF Bank, AVI Systems, New Wave Components and Copperwood Real Estate.

It’s a wonderful event. For more information, call 952-345-6486.

There wasn’t enough snow to initiate a full snow plowing effort. Nothing to plow. But we did have our Street Division guys come in this weekend to go out to apply some anti-icing material to bridge decks and other areas that are prone to creating ice, and then creating traffic problems. They did the same thing today.

Winter is not here yet. But it’s coming. We will be ready.