First remark: "utf8_general_ci" is a collation, not a charset. If I use your code, I get
Fuel\Core\Database_Exception [ 42000 ]:
SQLSTATE[42000]: Syntax error or access violation: 1115 Unknown character set: 'utf8_general_ci' with query: "CREATE DATABASE IF NOT EXISTS `DEV`DEFAULT CHARACTER SET utf8_general_ci DEFAULT COLLATE utf8_general_ci"