Eagan looking toward future projects

The city of Eagan is thinking big about its future and what it wants to do with money that will be freed up by the early 2020s after debts for the community center and road work are paid off.

Merging three fire stations and giving city staff more office, work and equipment space will be the priorities in the coming months as the City Council decides how to renovate public buildings.

In December, council members told City Administrator Dave Orsberg and Finance Director Tom Pepper to prepare potential schedules for construction and for borrowing on some projects.

Eagan currently has a yearly $1.1 million loan payment for money it borrowed in 2001 for its community center and a $1.2 million payment the city loaned itself for road overpasses and exchanges. When those debts are paid, the city will have $2.3 million each year that it can spend on new projects without raising taxes.

There's no shortage of projects that money could help fund.

Three of the city's fire stations, for example, aren't centrally located and there are not enough volunteer firefighters to staff each one, Pepper said. The city would like to replace those three stations with a new $4.5 million Fire Station 1. The Police Department and City Hall both need more office space, which could cost up to $9 million.

The city's maintenance building was built more than 25 years ago, when Eagan was a smaller city. Building a new facility with more than double the storage for vehicles and new space for making repairs could set the city back more than $8 million.

Council members and administrators agreed in December that several more projects could be funded.

A new filtration and pump house system for the city's water park, Cascade Bay, will cost $762,000, and adding more space to a firehouse on the city's east side is estimated to run about $800,000. Restoring the Old Town Hall, damaged by an arson attack in 2013, is penciled in at $290,000.

Council members and city staff emphasized that the schedules are preliminary and the estimates are liable to change.

"Everything is still very flexible at this point," said Pepper. "I don't think there's a rush to do anything. Buildings aren't falling down or anything."

There may not be a rush, but there are factors that will likely drive up the project cost over time. A growing economy means that there is more demand — and higher prices — for construction work, and if growth continues, the Federal Reserve could raise interest rates for borrowing.

Overall, the city is in sound financial health, said David MacGillivray, the city's financial adviser. The city's AAA bond rating puts it "in the top 2 percent [of] all ratings," he said, and the amount of debt the city has in proportion to its tax base is also low. By law, the city could borrow nearly five times more than it does each year, based on its annual $2.3 million debt payments.

At the December council meeting, however, Council Member Paul Bakken said the city should be cautious and look into having some work done in phases to save money. "If we get another huge hit for medical care costs," he said, or if the city's tax base shifts, "that will throw [us] in the wrong direction." Nobody saw the recession coming, he added in a later interview.

But there will be time to discuss that and more, starting with a final report on renovations needed by police and city hall, which city staff hope to present at a council meeting in January.

"There will be many, many more public hearings on these issues to come," Bakken said.

Graison Hensley Chapman is a Twin Cities-based freelance writer.