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HomeMy WebLinkAbout1976-03-30 MinutesaOt MINUTES OF A SPECIAL MEETING OF THE BOARD OF DIRECTORS March 30, 1976 The Board of Directors of the City of Fayetteville, Arkansas, met in a special session on March 30, 1976, at 7:30 p.m., in the Director's Room of the City Administration Building. PRESENT: City Manager Donald Grimes, City Attorney Jim McCord; City Clerk Darlene Westbrook; and Directors Marion Orton, John Todd, Paul Noland, Al Hughes, and Russell Purdy. ABSENT: Directors Ernest Lancaster and Morris Collier OTHERS PRESENT: Members of the audience and representatives of the news media. CALL TO ORDER Mayor Marion Orton called the special session to order and explained the purpose of the meeting being to consider the award of a sanitary land- fill contract, consideration of revenue producing tax proposal, and the consideration of an appeal in behalf of the City of a Planning Commission to approve the large scale development plan of Ellis Bogan for the Paradise Valley Golf Course. AWARD OF BID - Sanitary Landfill Award of a sanitary landfill contract had been deferred at the February 17, 1976 meeting pending invitation for and receipt of com- petitive bids. The City Attorney advised the Board that question had arisen as to whether the present landfill contractor, C & L Land Company, had a valid state permit as required by bid specifications. Based upon correspondence received from C & L, the City Attorney advised that it appeard the company did hold a permit from the Department of Pollution Control and Ecology and that the remaining bidder, Sunray Sanitation, also met specifications of the bid. One bidder, William Wolfe, was eliminated by virtue of the fact that a conditional use for his proposed site was not granted by the Planning Commission. In discussion of the Sunray Sanitation bid, the City Manager stated that the City was fully aware of factual data concerning the landfill site of that company. He stated that, even though use of the Sunray landfill would involve mileage increases for sanitation equipment, better road con- ditions would compensate for the additional distance. He reported that the Department of Pollution Control and Ecology had conducted dye tests at the site on this date in an attempt to determine whether or not allega- tions that the Sunray site was a major contributor to pollution of areas surrounding the site were founded. Should the tests prove positive, Grimes stated that the owner of the Sunray site had indicated he had con- tracted for the purchase of another site and would proceed with necessary 139 1 39 139.1 139.2 139.3 139.4 preliminary measures to acquire the necessary permit for the new site. In regard to any liability of the City that might be incurred should the Sunray landfill be utilized. Grimes stated that the City Attorney had advised thatthe landfill contract contained an indemnity clause whereby any liability for damages, resulting from the operation of the landfill, would be assumed by the owner. 140.1 Director Purdy was uncertain as to how much emphasis should be applied to the fact that Sunray Sanitation was currently involved in litigation instituted by area property owners alleging that the landfill operation was contributing to the pollution of streams, ponds, and water wells. Mr. Gordon Cummings, C & L representative, repeatedly introduced the subject of the pending litigation which he felt was substantiated. Director Hughes stated the purpose of the meeting was to award a bid for landfill services and not for the purpose of hearing merits of pending litigation. He cautioned Mr. Cummings of trying to place the Board in the position of a jury and reminded him that a decision would be based upon available information and not allegations of a lawsuit. 140.2 Mr. Hugh Kincaid, legal counsel for plaintiffs of the lawsuit, suggested the Board defer action to award a bid until results of the dye tests were known. While Kincaid believed results of the tests would be known within a week, Director Todd stated that he understood preliminary results would be inconclusive. Director Purdy expressed reluctance to defer action because of the expiration within two weeks of the current contract. 140.3 Mr. Cummings reminded the Board that his company had offered to ex- tend the present contract at no increase to allow receipt of test results. He stated C & L would hold its bid in abeyance if Sunray would also let their bid stand until test results were known; thereby eliminating the necessity for rebidding. 140.4 When asked by the Mayor if the Board preferred to discuss a temporary extension with C & L, Director Purdy objected and cited the possibility of losing the Sunray bid. Mr. Joe Tarvin, engineer for the C & L site, stated that the site could accommodate 328 operating days -- there being 287 operating days a year. He stated that the Department of Pollution Control and Ecology indicated that two additional areas adjacent to the present site would be compatible for landfilling operations and could be permitted after necessary engineering had been completed. 140.5 Director Hughes felt there would be no advantage in delaying action and extending the current contract. Director Todd pointed out that there had been no offer from Sunray to extend their bid for an additional three months. Mr. Cummings asked where the City would dispose of its wastes should the Sunray operation be closed and whether or not the City would want to be a party to pollution of the Northwest Arkansas area. Director Todd stated he concurred with Cummings' concern and that he would be willing to defer action but not beyond one week. Director Noland stated he would also be willing to defer for one week to allow results of dye testing to be known. 140.6 Mr. Cummings stated he would be willing to extend the bid for three months,regardless of results of the tests,should the Board choose to defer action for one week and test results were still not known. 140.7 In discussion of future facilities for waste disposal,Mrs. Lois Imhoff believed the City should realize that a landfill operation would always be necessary regardless of what method of disposal is used. She believed the City should be trying to locate a landfill site within the city. 140 Director Noland moved to defer action for one week. The City Manager cautioned that the City wbuld "box itself in" if it were to accept a 90 -day extension and would force itself into accepting the highest bid. Mr. Cummings then stated he would extend his bid for three months unequiv- ocally and at the same price currently in effect. Carl Carpenter, operator of the Sunray operation, was granted the floor. He stated tht during the 13 years of operation, his landfill had never received correspondence from a state agency indicating his landfill was not operating according to regulations. He stated that his company had expended several thousands of dollars in submitting the bid proposal with some of the funds being expended on the basis that the contract would be negotiated. He said they also proceeded on the basis that the City was seriously considering his site. "If you want to extend the bidding three months, then cancel mine, because I have put up considerable amounts ei- of money to take care of this proposed contract," he said. He cited his current two-year contract with the City of Springdale and the fact that he had sufficient land to perform the contract. He said it appeared that m the representatives of the Pollution Control and Ecology department believed his present site "looked very good" but that they would probably request he move his operations if results of dye tests were unfavorable. "I am still under obligation to Springdale. We will move; if further than we are thinking about, then certain compensation would have to be made for that. But they will not just shut us down," he concluded. His motion to defer bid award having died for a lack of second, Director Noland moved that the bid be awarded to the low bidder, Sunray ' Sanitation, in the amount of $64,800. The motion was seconded by Director Hughes. Director Noland stated that he was considering the $10,000 per year difference in the two bids. Mayor Orton indicated that she could not vote favorably with so many unknown factors involved. She asked if the motion should pass. The recorded roll call vote of the Board was: "Ayes": Todd, Noland, Hughes, Purdy "Nays": Orton Absent: Lancaster, Collier The motion was declared passed. FINANCE PROPOSAL The City Manager reviewed the recommended interim revenue producing proposal of the Citizens Task Force. The recommendations included a one percent increase in utility franchise taxes excluding Warner Cable and Southwestern Bell Telephone. The Task Force had recommended that the cable franchise remain at three percent until such time they request a rate increase when it would then be increased to four percent. They recommended that the telephone franchise be increased by 50¢ per tele- phone. Grimes indicated that recent discussions with representatives of the telephone company indicated that they felt the proposed increase would be inequitable and contended that the increase would amount to more than four percent of their gross revenue. Therefore, they proposed that the current franchise rate of $37,500 per year be doubled in 1976 then increased to $100,000 in 1977. The telephone company agreed to compile data substantiating their claim. Should their data support their contention, Grimes recommended their alternate proposal be adopted. 141 141.1 141.2 141.3 , 141.4 141.5 142.1 Also recommended by the Task Force was a business tax of $15 (to a maximum of $500 and based on a sliding scale) and a professional tax of $100. 142.2 The City Manager then presented the City staff recommendation which was in accord with the Task Force recommendations to increase franchise taxes. He did recommend, however, that the business tax be $25 with an employee tax of $10 per year per employee to be paid by the employee. He reported that feedback indicated support of the Task Force for the tax package could be weakened if the City's recommendations varied greatly from their's. He suggested, therefore, that the business tax be based upon number of employees and that it be paid by the employer. He suggested a minimum tax of $50 per business and $6 per employee. 142.3 When Director Hughes expressed his belief that businesses having a larger number of employees would be penalized, the City Manager replied that it would be impossible to find a totally equitable business tax. Grimes said he did not believe the City could legally enforce collection of a business or employee tax from the schools and the university. Hughes asked if the telephone tax would include the university campus exchange, to which Grimes answered affirmatively. 142.4 The City Attorney advised that determination of those to be taxed would be determined with the definition of the term "employee" and that the Board could exempt any group of employees it so desired. Hughes believed that any business tax should be equitable for the entire community. 142.5 McCord explained the various methods for referring an ordinance to the vote of the people. George Shelton, member of the Task Force repre- sentint the banking community, reminded the Board of their recommen- dation that the tax proposal not be submitted to a vote. Mr. Dale Christy of the Chamber of Commerce felt there was substantial deviation between the City's recommendation and that of the Task Force. He noted that the City recommendation would produce an estimated $275-300,000 in revenues while the Task Force recommendations would produce an esti- mated $240-250,000. He believed the Task Force would have to review a draft of the ordinance before determining its acceptability. 142.6 Mr. Shelton felt the minimum $50 business tax would be excessive far smaller businesses and stated that the proposed increase in the telephone franchise was not inequitable in comparison with other Arkansas cities. He said the Task Force realized the need for a tax that would apply to those who utilize city services but do not pay any taxes. 142.7 The City Manager said he anticipated opposition from the telephone company should a 50t increase equal more than four percent of their gross revenues. Director Hughes believed that the amount of increase should not concern the telephone company since the increase would be passed on to the consumer. Grimes stated that the entire increase would not be passed on since the amount allowable to be passed to the consumer was determined by the Public Service Commission. 142.8 Director Noland felt the City Attorney should proceed to draft a proposed ordinance to enable the Board and Task Force to review the proposal in ordinance form. 142.9 In continued discussion, Director Hughes recalled that the Fayetteville community had assisted the University of Arkansas in the purchase of a parcel of land and that the land was purchased with donations received from the business and private sectors. He felt the University was negligent in not volunteering assistance in seeking new revenues for the 142 • tLi"TYY r" city and was not volunteering to pay their share. Mr. Fred Vorsanger, Vice -President of Fiscal Affairs for the University 143.1 of Arkansas, was presentanddelivered a statement in rebuttal to Hughes' comments. According to his computations, franchise increases would cost an additional $29,350; most of which would have to be paid by students of residence halls. He said the University was opposed to the business tax but not because they would not be able to collect.it. He was personally opposed to the tax, he said, on the basic principal that the businesses and people working in the City would have to pay for the tax. Although the University had to seek help in purchasing the land mentioned by Hughes, Mr. Vorsanger pointed out that as a result of construction on the campus, much new revenue had been generated within the City. revs Grimes asked if the Board members felt the Task Force recommendation 143.2 SCI for a 50¢ per telephone should be accepted even though it might be an amount in excess of the four percent proposed for other utilities. Director Noland said he would be inclined to favor a telephone franchise equal to Obis that of the other utilities and also to include professionals under the employer occupation tax rather than have a separate division. Director Noland moved that the tax proposal as recommended by the 143.3 City Manager be incorporated into ordinance for consideration at the next Board meeting, provided the telephone franchise tax is four percent of gross revenues or more and that professional occupation taxes be in- corporated under the employer occupation tax. Also, that the ordinance allow for a decreasing rate of tax for businesses employing larger numbers 9 of employees. The motion was seconded by Director Purdy. The recorded 111 roll call vote of the Board was: "Ayes": Todd, Noland, Hughes, Orton, Purdy "Nays": None Absent: Lancaster, Collier The motion was declared passed. The Board then discussed whether to submit the proposed tax package 143.4 to the voters for approval. Director Noland moved to defer a decision until all members of the Board could be present. The motion died for lack of second. Mr. Shelton opposed submitting the proposal to vote saying that a 143.5 mandate would not be received because of light voter turnout; and, more importantly, that the Task Force felt the proposal too complex to ask the people to consider it as a package. He felt the entire proposal might be rejected in its entirety by voters who reject any one provision of the proposal. Director Noland agreed, but that he felt it was important the voters have the opportunity in light of past experience involving the industrial park issue. "I think we will have a difficult time to sell this package. If they don't approve, they will have to accept services the City can provide with limited funds," he said. Mr. L. M. McGoodwin, present in the audience, felt the matter 143.6 should be taken to the voters if thepeople's trust is to be maintained. If the measure were to fail, Mr. McGoodwin said the City would have to make personnel reductions in the fire and police departments. Mr. Shelton stated that the City could not afford to lose fire and police protection. "Your responsibility is more than just being representative of the electorate. ' More than just doing what they tell you to do. You are the leaders, you have a responsibility to lead this town," he stated. Mr. Curtis Shipley, Chamber of Commerce President, believed the Board should exercise its 143 leadership and adopt the tax package without a vote of the public. Mr. McGoodwin disagreed by saying, "For the first time you have the trust of the basic people of the City of Fayetteville and you will lose it if you don't bring it to the public." 144.1 Director Hughes mentioned that the package was intended to be an interim measure until such time theCity could find a proper and permanent solution. He then moved that the tax package be submitted to the voters at the May 25 primary. The motion was seconded by Director Purdy. The recorded roll call vote of the Board was: "Ayes": Todd, Noland, Hughes, Orton, Purdy "Nays": None Absent: Lancaster, Collier The motion was declared passed. 144.2 Mrs. Bruce Myers was present in the audience with members of the Southeast Fayetteville Community Organization (SEFCO) to present a prepared statement to the Board concerning additional tax revenue which would come to the City if intangible property tax laws were enforced. 144.3 The group contended that an additional $189,559 in revenues would be provided fortheCity if the banks and savings and loan institutions in Fayetteville paid 1975 intangible property taxes. Their statement reflected their opposition to an amendment to the Arkansas Constitution which might result in the exemption of banks from intangible property taxes. Also, that ACORN, with which SEFCO is affiliated, opposed any increased taxes for low and moderate income people. They asked that the Board join their efforts to initiate a workable system for taxing intangible property, and specifically proposed that small savings and checking accounts be exempted and banks and other large holders of intangible wealth be taxed at a rate which would not place undue financial burden upon them but which would be sufficient to remedy inequities of the present tax system. 144.4 Director Hughes was of the opinion that the statement was a misrepre- sentation by saying the banks would be taxed. He said it would be the individual who would have to pay the tax on savings accounts. He believed the greatest inequ ty existed whereby church -owned property, not used for church purposes, 's exempt from property taxes. 144.5 Upon conclusion of comments, the Mayor expressed appreciation for the group's concern. APPEAL OF LARGE SCALE DEVELOPMENT APPROVAL - Paradise Valley Golf Course 144.6 Director Hughes immediately moved to defer action. The motion died. 144.7 Mayor Orton, who had appealed the approval by the Planning Commission of the large scale development plan of Ellis Bogan for the Paradise Valley Golf Course, explained that she personally did not wish to alter the Planning Commission decision, but that she had been concerned that the Planning Commission misunderstood that the large scale development plan would be submitted to the Board for ultimate approval. She felt the Board might need to reconsider the dedications of street right-of-way since the Planning Commission had approved lesser dedications than required by the Master Street Plan. She felt any decisions to change the Master Street Plan should be made by the Board as elected officials of the City. 144.8 She withdrew the appeal on the basis that any future development plans of the Paradise Valley Golf Course would have to include necessary dedications. 144 The Mayor requested an amendment to the ordinance to provide that lesser 145.1 dedications of street right-of-way shall be subject to final approval by the Board and that the appeals procedure be amended to specifically provide who shall be able to appeal. McCord explained a proposed ordinance he had drafted to reflect the 145.2 Mayor's request. Following discussion, Director Todd moved the ordinance be referred to the Planning Commission for consideration and public hearing. The motion was seconded by Director Purdy. The recorded roll call vote of the Board was: "Ayes": Todd, Noland, Orton, Purdy "Nays": Hughes Absent: Lancaster, Collier The motion was declared passed. N ADJOURNMENT aa G7at There being no further business for the Board's consideration, the 145.3 Mayor declared the meeting adjourned. APPROVED: Marion R. Orton, Mayor ATTEST: pautlauv Darlene Westbrook, City Clerk • 145