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HomeMy WebLinkAbout1978-12-27 Minutes1 419 MINUTES OF A SPECIAL MEETING OF THE BOARD OF DIRECTORS Tie Board of Directors met in special session at 12:00 P.M., December 27, 1978, in the Directors Room, City Administration Building, Fayetteville, Arkansas. PRESENT: Mayor Ernest Lancaster, Directors Paul Noland, David Malone, Philip Colwell, Ann Henry, and John Todd. ABSENT: Director Al Hughes. OTHERS PRESENT: City Manager Don Grimes, City Attorney Jim McCord, Community Develop- ment Director Rick Mason, Administrative Assistant David McWethy, City Clerk Angie Medlock and members of the audience and representatives N of the news media. CO ED CALL TO ORDER U The Mayor called the meeting to order. After roll call, he proceeded with the 419.1 first item of business. Q RESOLUTION / Street Department Funds City Manager Don Grimes explained the proposed resolution is asking that $241,000 419.2 of ).978 Revenue Sharing budgeted for materials be reassigned to salaries of the public works employees performing this work. There being no opposition, the City Attorney read the resolution. Director Colwell, seconded by Noland, moved the resolution be approved. The 419.3 recorded vote was: Ayes: Noland, Lancaster, Colwell, Henry, Todd. Nays: None. Absent: Malone and Hughes. The Mayor declared the resolution passed. RESOLUTION NO. 83-78 APPEARS ON PAGE 21 OF ORDINANCE AND RESOLUTION BOOK VII. COMMUNITY DEVELOPMENT Community Development Director Rick Mason explained that the Board had at a 419.4 previous meeting, indicated they would refund $10,500 made for sewer taps to either CD or the property owners, after HUD legal counsel made a determination of where the funds should go. Mason said he had received word from the HUD legal counsel that this money should be refunded to the Community Development program. City Manager Grimes said he feels the Board will need to revise the present 419.5 wording in the sewer tap ordinance to be more specific and state that the fee is a treatment plant amortization fee and not just a hook-up fee. Director Noland asked that they propose an amendment to the sewer tap ordinance as soon as possible. Director Noland, seconded by Henry, moved the $10,500 be transferred from 419.6 the Water/Sewer account to the Community Development fund. The recorded vote on the motion was: Ayes: Noland, Lancaster, Colwell, Henry, Todd. Nays: None. Absent: Malone and Hughes. The Mayor declared the motion passed. Community Development Director Mason noted that they don't have a percentage 419.7 determination yet on a joint City and Community Development installed sewer line. He said there were 45 property owners that CD paid the fulltap fee for because they qualified, but CD has since determined that 21 of those hook-ups were on CD constructed lines. Mason said the total cost of sewer taps for those 21 would be 12/27/78 420 420.1 $6,300, but that was a jointly funded project in which the City participated and we are waiting for McGoodwin, Williams and Yates Engineers to determine what percentage the City paid, and establish a final figure to be paid back to CD for those taps. 420.2 Director Noland suggested the City Board could vote to agree with whatever percentage figure McGoodwin, Williams and Yates Engineers came up with, and authorize the amount of federal government participation be transferred to Community Develop- ment. 420.3 Director Noland moved this adjustment be made as soon as the percentage figures are available from the engineers. Director Todd seconded the motion. The recorded vote was: Ayes: Noland, Lancaster, Colwell, Henry, Todd. Nays: None. Absent: Malone and Hughes. 420.4 Mayor Lancaster declared the motion passed. 420.5 CD Director Mason said Water/Sewer did an in-house audit of their projects, and out of this audit they came up with $4,072.34 which was overcharged to CD. Mason noted that some of these were water/sewer projects where the work orders were charged to CD rather than where they should have been. Rick Mason said he had talked with City Engineer Don Bunn about this, and he is in agreement with the amount. 420.6 Director Todd questioned if there is a possibility that HUD will not accept this figure and Mason said they could, but he did not feel HUD would change the amount. 420.7 Director Todd moved the City Manager be authorized to transfer from the water/sewer fund up to $4,072.34, the amount determined by the in-house audit to be due the CD fund. Director Noland seconded the motion. The recorded vote was: Ayes: Noland, Lancaster, Colwell, Henry, Todd. Nays: None. Absent: Malone and Hughes. The Mayor declared the motion passed. 420.8 Director Mason noted the amounts allowed for streets, drainage, and sidewalk work were based on as -built drawings which McClelland Engineers did. Mason said the street and drainage materials and labor and equipment total which would need to be refunded is $207,033. Mason stated that the concrete work was declared fully ineligible because of violations in the procurement process and labor requirements. Todd questioned if HUD is figuring any indirect costs into their figures and Mason said he didn't think so. Rick Mason said they could determine a figure for engineering and overhead and possibly that would be allowable as a deduction. 420.9 Director Todd questioned if administrative overhead, payroll taxes, etc. have been allowed and Mr. Grimes stated that there was an amount lumped in for administrative overhead in the total program. In reference to Todd's question, Rick Mason said there is a formula for determining overhead which could not be applied until a total cost could be figured. 420.10 Director Noland questioned the original engineering costs. Rick Mason said an amount was figured in the total cost charged to CD which is included in the figures. Director Noland asked if the City is getting credit for that and Mason said no. City Manager Grimes noted that the cost to construct a street, per running foot, less concrete would be $32.27, and HUD has only allowed $17.06 per running foot, less concrete. Director Todd questioned if a street could be built with $17.06 per running foot and Mr. Grimes said "no". 420.11 City Manager Grimes stated that he feels the best thing the City can do if they want to salvage the Community Development program is to accept the figures HUD has submitted and ask HUD if the City could submit revised figures for labor and equipment costs for streets, after bids have been taken for future construction and possibly get a revision of what they owe on street labor and equipment. December 27, 1978 Grimes further noted that the cost per running foot iriclUding concrete to construct4 2 1 a street is often as high as $75.00 and HUD is permitting about $24,00, including 421.1 concrete. Mr. Grimes suggested asking HUD officials that once CD has taken bids III to then look again at the figures allowed for streets, and try to determine.what is a fair amount to the City and a fair amount to HUD. He said he feels the bids will clearly indicate that the figures which HUD has submitted are quite low. Grimes stated that there is approximately $257,000 now due for street work, $8,300 for rest - rooms and a concession stand at the Industrial Park, and approximately $20,000 due for housing rehabilitation, for a total of approximately $285,000 which would have to be reimbursed to CD to clear the discrepancies in the program. Mr. Grimes further suggested they ask HUD to give the City 4-5 years to pay the money back. He noted that the General Fund Reserve is the only fund which could stand to repay this amount. Grimes said he felt the taking of bids for street improvements would show what labor and equipment actually costs in those type of projects and (V the City could then ask HUD to reconsider those items. CO Director Todd asked if there is any question that the wage rates paid by the 421.2 ID contractor are different'and asked if this is only a technicality and Grimes said U it fs a technacaki.ty:... Mr. Grimes=exp7•ained that there has been non-compliance with several technical aspects, and he doesn't think HUD is "in the mood to bargain" with Q the City. He said in order to be able to proceed with the CD program, he would Q recommend that the City should pay back the recommended amount. Director Todd stated that he is not quite sure the City should pay back the 421.3 recommended amount without at least trying to negotiate. He said from the City's standpoint, he is not sure the Board is serving their responsibility by accepting that figure. Todd said he doesn't feel the City has violated the spirit and substance of the CD act and the City doesn't have the funds to repay the money. City Manager Grimes agreed that the City has complied with the intent of the program from the very beginning butsaid he is afraid if the City tries to further negotiate, the CD program may be at a standstill for up to a year's time. Director Noland said he thinks one thing the City should note is that all of 421.4 these projects were needed and would have been done by the City at some time in the future. He said the City is merely trying to use CD money to build these projects five -ten years sooner than the City could have done using City funds. He said it seems the City is trying to come up with $285,000 in order to get approximately 1.3 million dollars in CD funds for the coming year, so if the problem with CD is not settled, the City could jeopardize the 1978-79 CD project money, which seems to be quite a substantial amount. Director Noland questioned what is being done to prevent a recurrence of 421.5 of this problem. Mr. Grimes explained that the City and Community Development have completely revised CD accounting procedures and are not bringing CD account funds through the City at all. He said all checks must be signed by either the CD director and the City Manager, or the City Manager's assistant. He noted that this puts the responsibility directly on the CD Director's shoulders to make sure all records are in order on each project. Grimes said from the project construction standpoint, the staff is recommending the City do no more force account work and are also asking that the water/sewer and street departments do no more work with Community Development funds because of the problems in the past. Mr. Grimes explained that all work will be done on a contract basis, and all street projects will be lumped into a one-year contract for engineering and a one-year contract for construction. He said water/sewer will be handled in the same way. Grimes said Rick Mason would be in a position to look at everything to be sure CD is complying with all regulations. IIIDirector Colwell questioned if HUD officials and the City are willing to work 421.6 together to keep from having a recurrence of the problem. Rick Mason said HUD doesn't have the personnel or time to do this. Mason stated, however, if there is something he is not sure of, he would get in contact with HUD before proceeding with any project. Director Malone arrived 1:00 P.M. 421.7 December 27, 1978 422 422.1 Mayor Lancaster pointed out that HUD did come and monitor the Community Development program and letters were sent to the Mayor and forwarded to the Board of Directors that there were problems, but the Mayor was assured by the previous CD director that the problems were being corrected, when they actually were not being corrected. Mayor Lancaster said he thinks the City needs to settle this on HUD's terms and said if the City drops the CD program entirely, they still need to settle what has happened in the past. Mason noted that when CD reprograms the money, they will have to go back through the public hearings and the Board will make the final determination of how the money will be spent. Mason said he felt CD money could be used under Economic Development, for both Morningside Drive and Old Pump Station Road into the Industrial Park. 422.2 Director Todd stated that he hadn't heard anything which would justify the City giving CD $300,000. He asked Mr. Grimes if Grimes feels the City has done as much as they can to try to get things cleared up. Grimes said the feedback he is getting from the CD staff people is that HUD is fed up with Fayetteville. Grimes said the City has so many technical violations that HUD can come up with many reasons why they think they should terminate the CD program entirely. Mr. Grimes stated that he doesn't want to jeopardize the entire CD program. Todd said it seems it is worth an extra two-three weeks to try to negotiate further with HUD. 422.3 Rick Mason said he had a meeting November 30 in Little Rock with several of HUD's top officials and discussed this meeting with Mr. Grimes. Mason said he believes the City has exhausted all of their recourses unless they want to take this to court. 422.4 Mason said he had talked with HUD officials concerning the sidewalks and streets and HUD says there is no correlation between cost per lineal foot and what they have allowed. He said the problem with the concrete work is we were operating under an annual concrete contract with no labor provisions. He said HUD has been charged to administer 36 federal laws, one of which is labor and even if HUD wanted to look at it, they could not give final approval, as a wage rate waiver could only be given by the labor department. 422.5 Rick Mason stated that no proper contract was negotiated. He said all concrete work done by Sweetser will have to comply with wage determination. Todd pointed out that Grimes said Sweetser was in compliance on CD projects. Mason acknowledged that Sweetser was in compliance on CD projects. Marcia Mclvor, Chairperson of the CD Committee, said the finding is that 422.6 there was not compliance with the act. She noted that CD can't even let bids while CD funds are being held up. Director Todd questioned if the City Attorney has reviewed this aid City Attorney McCord stated that he doesn't think the City is in a very good position. 422.7 Director Noland said he would be willing to try to pay the money back over several years and stated that he would hate to jeopardize the CD program or delay other projects if the City could, with CD funding, go ahead with some projects the City is wanting to do. 422.8 Mason stated that now they have no 1977-78 CD funds, and he feels if the City doesn't resolve something by the time CD submits the 1979 application, HUD won't give Fayetteville any funds. He noted that the 1979 application must be in by March 1. 422.9 Director Noland asked Mr. Mason if HUD would allow the City to pay back this money over a five-year period and Mason said he felt they would. He said HUD has asked that the City submit a proposal saying how they can pay it back and HUD will review the proposal. Director Malone said he feels there are only two real alternatives--one is to make informal contact with HUD officials and try to negotiate a little more before deciding on a final figure, and 2) pay the money back. Malone said he didn't think the City would gain anything by taking this to Court. Mason said he feels they have negotiated as much as HUD is willing to negotiate and he thinks the City is going to have to admit some wrongdoings and pay the money back. December 27, 1978 423 Director Malone noted that CD can reprogram the money inside the City limits 423.1 of Fayetteville and said he would be inclined to go along with Mr. Grimes' 111 recommendation that they pay back the money. Director Henry agreed with Malone. After a discussion, the Board agreed to ask HUD for permission to pay the money back over a 5 -year period. Todd questioned where HUD gets the figures for overhead and Mason said -423.2 HUD has a formula which they will use, which City Controller Tobin has looked at. Todd said he feels the City's CPA should look at this formula for the benefit of the City. Director Malone said he would like to get a firm figure of what the City 423.3 needs to pay back. Rick Mason said he doesn't feel the amount will be any more than what is there now. He said it could be reduced if HUD finds other costs which are allowable deductions. iV McCord suggestedthe motion be to authorize a proposal to pay back the 423.4 CO specified amount, less administrative expenses, over a seven-year period. 1.0 City Manager Grimes suggested they indicate the City is willing to pay back the 423.5 U funds but ask that when CD takes bids for future street construction and sees what Q it really costs to build a street, then look at those bids and deduct an inflationary factor and reevaluate the amount HUD has allowed for streets. Q After a discussion, Director Noland moved that the City Manager, Community 423.6 Development Director, and. Director Todd, as chairman of the Finance Committee, go to Little Rock and try to negotiate the number of years and the street and sidewalk amounts. Director Malone said he would agree with this as long as the Board indicates a willingness to settle the problem. Director Henry seconded Noland's motion. Mayor Lancaster suggested the City Attorney also go to the meeting. Director Todd suggested the City have their own CPA review the records before 423.7 III going to Little Rock for a meeting with HUD officials. Sandra Carlisle noted that the City has been receiving monitoring letters 423.8 from HUD noting problems in the Community Development program for three years. Director Noland moved that the City pay back a maximum of $285,000 over a 423.9 seven-year period, and this Spring after letting bids, reevaluate the figures HUD came up with on labor and equipment, and administration, and ask for reconsideration of those figures. Director Henry seconded the motion. The recorded vote was:. Ayes: Noland, Malone, Lancaster, Colwell, Henry, Todd. Nays: None. Absent: Hughes. The Mayor declared the motion passed. The meeting adjourned at 1:50 P.M.