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HomeMy WebLinkAbout1986-12-05 MinutesMINUTES OF A SPECIAL MEETING OF THE FAYETTEVILLE BOARD OF DIRECTORS A special meeting of the Fayetteville Board .of Directors was held on Friday, December 5, 1986 at 8:00 a.m. in Room 326 of City Hall, 113 W. Mountain Street, Fayetteville, Arkansas. PRESENT. Mayor Noland; Directors Johnson, Lancaster, Martin, Orton and Hess; City Manager Grimes, Department Directors Burch and Linebaugh, City Attorney McCord, City Clerk Kennedy; members of the press and audience. ABSENT: Director Bumpass CALL TO ORDER The meeting was called to order by Mayor Noland with six Directors present. WATER & SEWER/FINANCE COMMITTEE REPORT The Mayor reported that, since the Board Water and Sewer/Finance Committee meeting of November 26, correspondence has been received from the engineer for the Wedington Sewer Improvement District, Iry Wimberly, asking the Board to consider changing a previous contract (to extend sewer service to Ozarks Electric from the north) to cancel that .project and include funding to extend a line from the South instead. Director Orton made a motion to cancel the project from the north and place funds designated to that project into the improvement district project on the south side. The Mayor reported that correspondence in the agenda indicates that the Ozarks Electric Board of Directors had approved the concept. Iry Wimberly confirmed that he had met with them following the committee meeting. Wimberly emphasized that the company is willing to wait another year for sewer service by the Improvement District if the City agrees with this proposal. In answer to a question from Director Lancaster, City Engineer Don Bunn said the City will incur some costs in cancelling the contract, estimated to be less then $2,000. It was clarified that this offer from Ozarks Electric includes transferring $40,000 of $100,000 (funding for the project from the north) to the District should the District system not be constructed. The Mayor noted that this means the City's total investment would be 455 455.1 455.2 455.3 455.4 455.5 456 456.1 December 5, 1986 $460,000 plus another $40,000 towards the Wedington project. Wimberly pointed out that would be recovered by tap fees. The motion was seconded by Director Lancaster. 456.2 In answer to a question from Director Martin, Public Works Director Burch stated he recommended this as the way to go. He added that Ozarks has asked that, should this not go through, the City still extend service to them from the north. Burch said he concurred in this plan. 456.3 Director Orton amended her motion to add that, if for some reason the City does not go ahead with this within a year, then the City will reconsider the District to the north of Wedington. Upon roll call, the motion as amended passed, 6-0. 456.4 It was decided that a plan for recouping the funds would be considered at a later time. CONSTRUCTION & OPERATION LEASE 456.5 The Mayor introduced consideration of a resolution authorizing the Mayor and City Clerk to execute a lease with the Northwest Arkansas Resource Recovery Authority for the construction and operation of a Solid Waste Disposal and Resource Recovery facility. 456.6 The City Attorney stated there was a change to Section 16 of the lease, which was revised to track the all-risk insurance requirements in the construction and operating contract under which M -K Ferguson is required to obtain and maintain all-risk insurance at an agreed upon replacement value during the construction and during operation. 456.7 Director Martin commented that, despite his vote against proceeding with the project, now that the majority of the Board has decided to go ahead with the project, he is going to do everything he can to help make the project work. 456.8 Local attorney Gordon Cummings addressed the Board, stating that he considered "this $22 million boondoggle bond issue as the biggest waste of money since the war in Viet Nam". Cummings said he was not directing his comments towards Directors Bumpass or Martin. He said he believed Director Bumpass, for many years, has held the common sense, good judgment, cost effective, financially responsible attitude of "wait and see" or at least put it to a vote of the people. He said he believed Bumpass and Martin were heroes and champions of the democratic process and financial responsibility. He said the other five members of the Board have consistently refused to consider an election by the people who will be paying the rates. He said he thought he was the only citizen in Arkansas who ever got sued for $600,000 a day for December 5, 1986 asking the Board and the City to have an election on a bond issue. Cummings said he never believed it when the Chairman of the project said at the trial that the monthly increase would be $2-$4 per month per household; and that he doesn't believe it now that it's going to be $4-$7 per month per household. Cummings said he believed that, after cost overruns, refinancing and repairs, it will be $20-$50 per month per household. Cummings said this was unnecessary, as the City has been landfilling for 15 years for $5 per ton. He said the City will admit it will be'raised to at least $56 per ton, but his figures show that before it's over it will be $85 per ton, and he has some reasonable figures that show it will ultimately be $102 per ton. Cummings asked the Board to ask the elderly residents at the Highrise, the black residents of the City, those living on a fixed income, those living in rent houses, and City employees if they want to pay $7-$25 more per month. Cummings contended there was no community support to raise the rates for this project. Cummings said the Board had support from those who supported this from the beginning - "the idle dreamers and the greedy schemers". Cummings said before the citizens are encumbered for 27 years for a total payout of $50-$60 million, they should be asked by an election whether they want to be encumbered. Cummings said he thought we had five members of a "Fayetteville politburo" telling people what's good for them without letting them vote on it. He said he thought it was outrageously expensive, unnecessary and impractical. Cummings said Fayetteville was going to become a "no growth community" whether we liked it or not, because the Board was going to raise the utility rates so high that people can't afford to live here. Cummings said most of the bonds will be sold out of State and there was no question that most of that money will leave the community. He said he was going to put bond buyers on notice that there are certain people in this community who consider anybody that buys one of those bonds to be buying "tainted and poisoned bonds" at their own risk. Cummings said suits for declaratory judgment can be filed to tell the City Board how to let the people vote. Mayor Noland said the City's projections show a $1.93 increase per month for five years, but it is not known what it will cost in five years for the cost of electricity or the cost of landfill burying. Noland said he received over 200 letters last year about this project from people of all walks of life, and 90% of them favored the proposition. Noland said people in the Wheeler community are concerned about protecting their wells, and there is concern about the recently permitted landfill near Beaver Lake. Noland said the proposed technology has been successfully operating in Europe for over 30 years. 4J1 457.1 457.2 457.3 457.4 457.5 r 417. December 5, 1986 458.1 The Mayor told Cummings it would cost Fayetteville citizens $1 million if there is an election, because arbitrage earnings from the bond issue will be lost. 458.2 Director Orton pointed out that the City will be selling electricity to itself, something she commented would be a sure thing. She said this was the best and cleanest technology in the world as far as air pollution is concerned, and getting away from landfills will get away from water pollution. Orton said she felt very strongly this was a good deal for the people. She said the monthly increases should be modest and would happen even if we stayed with the landfill. 458.3 Marlene Ray, speaking from the audience, asked what the tipping fee is now and who will own the plant once it is paid for. The Mayor responded, stating the Authority (West Fork, Washington County and the City of Fayetteville) would own the plant after it's paid for. Orton added that the degree of ownership would depend upon the amount of garbage put into the plant, meaning that the City of Fayetteville would own about 98%.- Ms. Ray stated she had received many calls from people who say they cannot afford to have their water bill go up. Ray asked if the City had made any effort to find a landfill that would not be so costly. Director Orton said they had heard reports on what land is available, and land which is most desirable is located near where people are living. Director Johnson said geological surveys of northwest Arkansas indicate there are no areas which will provide an acceptable landfill site, and new State regulations indicate that if the City is going to establish its own landfill, it must be within the City limits. Johnson said she thought a landfill was not a long term solution as it will eventually become full. 458.4 Director Lancaster stated he lived on a fixed income and will have to pay a higher water bill, but he thought for the future this project is the way to go. 458.5 In answer to a question from Ms. Ray, Director Orton said the City of Springdale is not a member of the Authority but chose to stay with landfills near their city. Orton pointed out the plant is designed to be enlarged for growth, should others decide to join the Authority. 458.6 William Giese, speaking from the audience, said he thought the incinerator would pollute the atmosphere. He asked the Board to put this question to a vote of the people. 458.7 Director Lancaster, seconded by Orton, made a motion to approve the resolution authorizing the lease. Opon roll call, the motion passed, 6-0. RESOLUTION NO. 119-86 APPEARS ON PAGE 1024 OF ORDINANCE & RESOLUTION BOOK X X V l December 5, 1986 WASTE DISPOSAL CONTRACT The Mayor introduced consideration of a resolution authorizing the Mayor and City Clerk to execute a waste disposal contract with the Northwest Arkansas Resource Recovery Authority. Director Lancaster, seconded by Orton, made a motion to approve the resolution. The City Attorney reported two changes to the contract -- on page 10 of the contract, under (d), after "...operating and maintenance expenses of the Authority..." should be inserted "...(to the extent that said expenses are not offset by energy sale revenues)"; and on page 8 of the contract the formula will be revised to provide for any increase or decrease. Director Martin asked if the contract incorporated a guarantee. McCord said the City unconditionally guarantees to pay from sanitation fund revenues the debt service on the bonds. Upon roll call, the motion passed, 6-0. RESOLUTION NO. 120-86 APPEARS ON PAGE 9Y/ OF ORDINANCE & RESOLUTION BOOK XXV1I DELIVERY ORDINANCE The Mayor introduced consideration of an ordinance requiring that solid waste generated or collected within the city of Fayetteville be delivered to the Solid Waste Disposal and Resource Recovery Facility owned by the Northwest Arkansas Resource Recovery Authority. The City Attorney reported there were changes to the ordinance - in Section 1, "All solid waste" should read "All acceptable solid waste", and in Section 2, the term "acceptable solid waste" will be defined, and the effective date of the ordinance will be defined as the commencement date of the facility. The City Attorney read the ordinance for the first time. Director Johnson, seconded by Hess, made a motion to suspend the rules and place the ordinance on its second reading. Upon roll call, the motion passed, 6-0. The City Attorney read the ordinance for the second time. Director Johnson, seconded by Hess, made a motion to further suspend the rules and place the ordinance on its third and final reading. Upon roll call, the motion passed, 6-0. The ordinance was read for the third time. Director Martin asked for the meaning of "commercial operation". McCord said this would mean when the facility begins to accept solid 459 459.1 459.2 459.3 459.4 459.5 459.6 459.7 459.8 459.9 460 December 5, 1986 waste from the public after the testing procedure. McCord explained the contract between the City and private haulers contains a provision whereby they are required to deliver solid waste to the City when the plant begins operation. Martin pointed out that these people need to know when to terminate their contracts with landfills. The Mayor said the City ought to notify them of a projected startup date. 460.1 Martin asked, if for some reason the plant is not able to accommodate refuse, if arrangements would still have to be made to dispose of refuse which comes to the plant. Director Orton said that would be the duty of the company which will operate the plant. 460.2 Upon roll call, the ordinance passed, 6-0. ORDINANCE NO. 3232 APPEARS ON PAGE ! D %Z OF ORDINANCE & RESOLUTION BOOK A)0\/ \% ELECTRICITY PURCHASE AGREEMENT 460.3 The Mayor introduced consideration of a resolution authorizing the Mayor and City Clerk to execute an agreement with the Northwest Arkansas Resource Recovery Authority for the purchase of electricity at the city's Wastewater Treatment Plant. . 460.4 The Mayor said, if the ratchet charge is retained in the contract with Ozarks Electric, he felt that the WWTP should not have to pay the penalty in the event of implementation of the ratchet charge. The Mayor said he thought the agreement should protect the WWTP against any excess penalties which might be imposed. The City Attorney said it is the intent, during the two-year construction period, to petition the PSC for relief from the ratchet provision. He said, if the relief is not obtained, the agreement could be modified to provide that protection. The City Attorney advised adding at the end of the first paragraph in Section 2 "...less and except any charges based upon a ratchet provision", and changing "based upon the rate" to "at the rate". 460.5 Director Lancaster, seconded by Johnson, made a motion to approve the resolution. 460.6 Director Martin asked if the Authority would become a public utility. McCord said it would not, that the energy sale contracts, under PSC cogeneration rules, must only be filed with the Commission, do not require Commission approval and are not subject to PSC rate regulation. Director Johnson asked if the City may sell electricity to some other City facility. McCord said the contract would not preclude that. December 5, 1986 City Manager Grimes stated the staff is confident the ratchet provision can be removed because of a recent case. He explained that, if the plant were to be down very briefly during peak demand periods, there is 8-10 hours of leeway when the WWTP can use the emergency generator, thus avoiding the ratchet charge. Project Director Louis Watts said if the power demand at the plant is high, the charge is high -- meaning demand would be zero when the emergency generator is being used. He said there must be a lot of communication and coordination between the WWTP and the Resource Recovery Plant. Director Martin said he did not realize the ratchet clause involved both the generation and consumption of electricity. It was clarified that the ratchet provision could go into effect when the WWTP buys more electricity from Ozarks Electric, that there is a direct relationship between generation of electricity at the facility and usage of it at the WWTP, because anytime the facility is generating electricity, it is being "wheeled" to the WWTP. McCord said the ratchet provision would only apply during the high peak period. It was clarified that the price payable by the City to the Authority would never be subject to the ratchet charge when the facility is generating. The City Attorney pointed out an addition to paragraph one, "The Authority agrees to provide electricity to the WWTP on a best efforts basis. The failure of the Authority to provide electricity to the WWTP in the amounts requested shall not result in any liability on the part of the Authority." Martin said he thought this wording might contradict the other revision made in relation to the ratchet charges. McCord suggested adding after "...any liability on the part of the Authority" - "to the City, except the payment of higher electricity rates". McCord said the facility will never purchase electricity from Ozarks Electric and wheel it to the WWTP. 461 461.1 461.2 461.3 461.4 Upon roll call, the motion passed, 6-0. 461.5 RESOLUTION NO. 121-86 APPEARS ON PAGE 4/64,7 OF -ORDINANCE & RESOLUTION BOOK AXd/1- CONDEMNATION The Mayor introduced consideration of a resolution authorizing the City Attorney to introduce eminent domain proceedings to condemn a site for a Solid Waste Disposal and Resource Recovery Facility. 461.6 The City Manager reported he had received no information that the 461.7 property owners have accepted the offer. r. 462 December 5, 1986 462.1 Director Johnson, seconded by Orton, made a motion to approve the resolution. Upon roll call, the motion passed, 6-0. RESOLUTION NO. 122-86 APPEARS ON PAGE y`s OF ORDINANCE & RESOLUTION BOOK “V(1 COMPUTER PURCHASE 462.2 The Mayor introduced consideration of a recommendation from the Selection Committee to purchase an IBM computer. 462.3 In answer to questions, Linebaugh explained all the personal computers will be able to have access to the main computer, something which was not possible six years ago. He explained also that Police, Fire, and Municipal Court departments will be the only ones with access to the public safety package. Linebaugh said this will be a separate computer system. Linebaugh explained software packages will be adapted to the City's needs 462.4 In answer to a question from Director Martin, Linebaugh said the users were involved extensively in the selection process, and that the Selection Committee included the three department directors, the Purchasing Officer, the Data Processing Supervisor and the Accounting Supervisor. He said a Steering Committee, consisting of data processing experts in the area, made the recommendation to the Selection Committee. 462.5 Linebaugh said the staff recommends a lease/purchase agreement which would cost about $144,000 per year for five years. He said the City would enter into a contract with IBM for $483,000, and would go out for bids for the other approximately $90,000 (for items such as the personal computers). 462.6 Director Hess, seconded by Martin, made a motion to approve the recommendation of the Selection Committee to purchase the IBM computer system, on the assumption that the City will work out a lease/purchase agreement over five years. Upon roll call, the motion passed, 6-0. 462.7 Director Orton, seconded by Martin, made a motion to pass a resolution expressing gratitude to people who worked on this project, especially those in the community who donated their time. 462.8 The Mayor asked that proclamations be prepared for those persons. 462.9 upon roll call, the motion passed, 6-0.