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HomeMy WebLinkAbout1988-12-06 MinutesMINUTES OF A MEETING OF THE CITY BOARD OF DIRECTORS A regular meeting of the Fayetteville City Board of Directors was held on Tuesday, December 6, 1988 at 7:30 p.m. in the Directors' Room of the City Administration Building at 113 West Mountain Street, Fayetteville, Arkansas. PRESENT: Assistant Mayor Bumpass; Directors Lancaster, Martin, Kelley, Marinoni and Hess; Assistant City Manager.Linebaugh, City Attorney McCord, City Clerk McWethy; members of the staff, press and audience. ABSENT: Mayor Johnson ROLL CALL Themeeting was called to order by Assistant Mayor Bumpass, with six Directors 372.1 present. CONSENT AGENDA Bumpass introduced consideration of items which contracts and leases which can be approved by and approved simultaneously. grouped together follows: A. Minutes of the November 15, 1988 Board meeting; may be approved by motion, or 372.2 resolution, And which may be under a "Consent Agenda", as B. C. 372.3 Award of Bid #883, for an underground storage leak detector system for 372.4 the City Shop; Recommendation: Award to only bidder, Hooten Equipment Company of Springdale, Arkansas. Bid: $11,947.95. Budget: $14,000. Award of Bid #885, for purchase and installation of a chain link fence 372.5 at Gulley Park; Recommendation: Award to only bidder, Springdale, Arkansas. Bid: $3,429.38 Parks Director for heavier gauge metal total expense of $3,593.38. Budget: parking lot and hiking trail. Arkansas Fence Company of plus $164 recommended by for the top rail, for a $6,500 for fence, gravel Award of Bid #887, for purchase of a' tilt bed trailer for the City 372.6 Shop; - - Recommendation: Award to low bidder, Moody Equipment and Supply Company of Little Rock, Arkansas. Bid: $9,683. Budget: $18,863 373.1 373.2 373.3 373.4 December 6, 1988 E. Award of Bid #890, for purchase of an automobile for the Economic Development Coordinator; Recommendation: Award to low bidder, Lewis Ford Sales of Fayetteville. Bid: $11,811. A budget adjustment is requested in the amount of $11,811, to be taken from funds budgeted for office furniture and computer equipment. F. Budget adjustment to cover the expense of temporary secretarial services for the City Manager's Office; This expense was incurred during a period of time when a full-time secretarial position was vacant. $2,086 is recommended to be taken from funds available in the City Manager's salary and wages account. G. Budget adjustment to cover fine assessed by EPA for City's failure to report a May, 1988 bypass of untreated wastewater from the collection system into Mud Creek; $10,000 is recommended to be taken from funds budgeted to pay for part of the Sunrise Mountain Road Sewer improvement project which has been delayed. RESOLUTIONS: H. Authorizing the Mayor and City Clerk to execute a one-year lease agreement with Mutual First, dba "Days inn" for advertising display space at the Fayetteville Airport terminal building; The lease would provide for a rental rate of $80 per month and extensions for up to five additional one-year terms. This space was formerly leased by the Holiday Inn. RESOLUTION NO. 85-88 APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK 373.5 I. Authorizing the Mayor and City Clerk to execute a one-year lease agreement with J. Michael Johnson for space in the single-engine T- hanaar at the Airport; The lease would provide for a rental rate of $115 per month and extensions for up to five additional one-year terms. RESOLUTION NO. 86-88 APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK • December 6, 1988 Authorizing a revision -to a contract with McClelland Consulting 374. Engineers for additional engineering services in connection with a lighting and obstruction removal project at the Airport, being done under a grant from the Federal Aviation Administration; Because of an expansion in the scope of the project, engineering fees have increased from $69,400 to $77,000. The Public Works Director reports funds are available and recommends approval. RESOLUTION NO. 87-88 APPEARS ON PAGE OF ORDINANCE AND*RESOLUTION BOOK Authorizing an agreement with the Arkansas State Highway Department for reimbursement of preliminary engineering fees associated with the relocation of water and sewer facilities at new Highway 71 and Cato Springs Road; 374.: • Although the agreement calls'for reimbursement based on a maximum fee of $10,240, the percentage of reimbursement will not be known until the completion of the preliminary engineering. The staff recommends approval of the agreement. RESOLUTION NO. 88-88_ APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK Authorizing approval of a change order to the construction contract for 374.: , the wastewater treatment plant project; This change,; Contract Modification No. 24would amount to a total of $5,497 and covers the following items: 1. Repairing leaks in the fire protection system, 2. Repair of existing water lines and additional subbase material replacement adjacent to the original administration building; and 3. Credit to the City for approval of smaller size maple trees than were originally specified. The Public Works Director reports funds are available and recommends approval. RESOLUTION NO. 89-88 APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK In -answer to a question from Director Marinoni, Public Works. Director Mike Batie said that contract modification no. 24 was anticipated to be the final change order on the completion of the construction for the wastewater treatment plant. 374. , December 6, 1988 375.1 It was moved by Marinoni and seconded by Lancaster to approve the consent agenda. Upon roll call, the motion passed, 6-0, Mayor Johnson being absent. CD BUDGET 375.2 Bumpass introduced consideration of a resolution approving the 1988 Community Development Block Grant budget. Bumpass explained approximate funding available amounted to $514,202, less program administration and indirect costs of $67,550, making net funding available of $446,652. He said the staff recommended funding as follows: EOA Weatherization Housing Rehabilitation Parks & Recreation: Bates Park Playground Equipment Asbell Park Playground Equipment Walker Park Security Light, Picnic Tables, Sand Voileyb Sidewalk & Street Improvements: Block Street, Rock to Archibald Yell (reconstruction & Watson Street, Campbell to St. Charles reconstruction) Code Enforcement: Youth Bridge Emergency Shelter Construction 5,000 162,600 22,900 all Court 151,152 sidewalk) 40,000 65,000 375.3 Director Martin, seconded by Kelley, moved approval of the resolution as proposed. 375.4 Joe Robson, speaking from the audience, asked how many houses would be rehabilitated with the funds allocated. Planning Director Merrell responded that, theoretically, 16 houses could be completed, but it was hoped that perhaps more houses than that could be rehabilitated. 375.5 Upon roll call, the motion passed, 6-0. RESOLUTION NO. 90-88 APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK "YOU CAN" PROJECT 375.6 Bumpass introduced a request from Director Jeremy Hess for consideration of the use of restructured residential housing bonds to fund an educational/job training program for impoverished Fayetteville citizens. 375.7 Hess said that in February of 1987 the Board discussed what to do what approximately $550,000 in restructured residential housing bonds. He said delays in making a decision were caused by the development of the capital improvement program and the bond issues approved by voters in the recent election. He said some ideas that had been initially proposed for the use of the funds, such as rehabilitation of the Youth Center pool, and funding for the senior center, will December 6, 1988 now be funded through other means. He added that $170,000 -of the total has 376. already been allocated to economic development.• Hess said the "You Can" program is proposed to help a minimum of 35 people per year in educational or job training programs, and help nine people set up child care programs in their homes. Ralph Nesson, Executive Director of the EOA of Washington County, addressed the Board. Nesson said the project was•designed to move people from poverty to •self- sufficiency. He said existing programs which assist low-income persons don't address the issue of helping people to become self-sufficient, by assisting them in completing their education and obtaining job skills that will enable them to earn a living wage, and skills that will be attractive to businesses and industries. Nesson said the project would offer the incentive of $500 scholarships to people who now don't have the means to go to school, will help pay for child care, will help people find opportunities through the Job Training' Partnership Act, will provideintensive counseling for 35 individuals who will participate each year. He said the program would help low and moderate -income families develop their own businesses by opening day care centers in their homes, and would lend individuals $2,000 to help bring their homes up to day-care standards so they can be licensed by.the Department of Human Services. He said EGA's Head Start staff will"train nine families per year to operate child-care homes. Nesson asked the Board to support the project and promised the EOA, in coordination with the Department of Human Services, and with the Fayetteville United Way, would bring the Board information on the program as it progresses. He• said he would snake quarterly reports to the Board on the success of the participants, and would ask for the Board's suggestions on improving the program Kelley asked Nesson if there were any success ratios to indicate that a certain percentage of low-income families better themselves economically by the use of such programs. Nesson said the EOA presently operates a single -parent scholarship program which gives an average of $3400 scholarships per semester to impoverished women in the county. He said the success rate of that program is 75% - that three out of four women who participate go on to finish school and obtain professional positions. Marinoni asked if the program could become self-sufficient after five years. Nesson said if the project was successful other sources of funding would be sought for its continuance past the five years. Lancaster said he would prefer funding a one-year program rather than a five, -year program, commenting that he didn't want to commit future boards for five years. Martin said he supported the program but wanted to be sure the concept was viable, commenting that the community does not have enough money for everything it needs. He agreed with Lancaster that only a one-year funding should be considered. He said he thought the City Manager should be authorized to 376. 376. 376. 376. 376. 376. 376. 376. December 6, 1988 377.1 negotiate an agreement with EOA as to exactly what results are expected over the first year. 377.2 Hess suggested the agreement state that, if specific results are met, the Board would be inclined to fund the program for another one-year period. 377.3 Bumpass said, of the $57,950 requested for the first year of the project, $15,000 is allocated for the salary of someone to manage the program while the actual scholarships amount to only $17,500, with $18,000 for loans to set up day care centers. Bumpass suggested the City fund the incentive scholarships and another $2,500 which could be used to raise matching funding from other sources. He said he was reluctant to get into an experimental program and the day care business. Hess pointed out that $18,000 would cover loans which would be repaid to the City. 377.4 Marjorie Marugg, speaking on behalf of Northwest Arkansas Vo -Tech, told the Board the person who would be hired to manage the program would not be just an administrator, but would be a social worker who would do follow-through with the recipients of the program to make sure they are successful. 377.5 Director Martin, seconded by Hess, moved that the City Manager be empowered to negotiate an agreement with EOA for funding of the "You Can" project for one year, at an amount not to exceed $57,950. 377.6 Marugg said it could be difficult to find high-caliber applicants to manage the program if it is just a one-year program She said that, if there was assurance that there would be a favorable response to re -funding the program if the program met the standards, she would feel comfortable with the initial one-year funding. Martin said it was his intent, when he made his motion, that the program should and would be funded again so long as it was successful. Hess suggested that intent be made clear in the contract. Marinoni suggested an addition be made to the motion - "with the option to extend the funding at the end of one year, each year annually, for five years" - but that the program would still be subject to scrutiny at the end of each year. 377.7 Bumpass said he had a problem "burdening City government with this program" He said there was literally "millions of dollars coming into Washington County for social welfare programs". He said there was a $1 billion state-wide budget. He said he didn't think he could support the program. 377.8 City Attorney McCord advised the Board that, after a contract is drafted, it would be brought before the Board for its approval. 377.9 Upon roll call, the motion passed, 5-1, Bumpass voting in the minority. SENIOR CENTER LEASE December 6, 1988 Bumpass introduced a request from the Economic Opportunity Agency of Washington 378.: County, Inc. for approval to amend the City's lease with the EOA for the Sang Avenue Senior Citizens Center. He said the EOA, at the request of the Area Agency on Aging, was asking that the following clause be added to the current lease* . "...However, the Lessor [City of Fayetteville] shall be obligated to enter into a similar lease with the Area Agency on Aging of Northwest Arkansas or its designated subcontractor which has been awarded funds to provide services through the Sang Avenue Senior Center." Bumpass explained the AAA is requiring this amendment be made to the lease before they will expend any funds for the repair or upkeep of the Sang Center Building, which presently is in need of a new roof. The City Attorney advised the Board the additional language was necessary to continue funding and, if the Board was receptive, the necessary action would be adoption of a resolution authorizing the execution of a modification of the existing lease. He said it did not significantly change the City's contract with the EOA. 378.: 378.: In answer to a question from Bumpass, Planning Director Merrell explained the EOA 378.1 was funded in part by AAA. Merrell said AAA wants to reserve the right, if they for any reason ever become dissatisfied with EOA, to put a new tenant in.the building for the duration of the lease, which Merrell said expired December 22, 1989. • It was moved by Kelley, and seconded by Martin, to approve the resolution.. Upon 378.! roll call, the motion passed, 6-0. RESOLUTION NO. 91-88 APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK - REZONING/R88-19 In reference to rezoning petition R88-19, submitted by Jim Hatfield, for property west of Lee Avenue, Bumpass announced he had been contacted by the petitioner whose father is, still extremely ill. Bumpass said Merrell had requested tabling the rezoning, at least for one more meeting. Bumpass said Hatfield will contact Merrell when he gets his paperwork together. Director Hess, seconded by Marinoni, made a motion to table. Upon roll call, the motion passed, 6-0. 378.1 378.' 379.1 December 6, 1988 REZONING/R88-20 Bumpass introduced an ordinance rezoning 47.86 acres located north of Highway 16 West near its intersection with Carlsbad Trace and Carriage Way, from A-1 "Agricultural" to R-1 "Low Density Residential", submitted by Randall and Ruby Garrison. 379.2 Bumpass said the petition was considered in a public hearing before the Planning Commission on November 28. He said the Planning Management Director made a report to the Commission recommending the rezoning for the following reason: 379.3 379.4 Based on the favorable development potential of the property, the property's recent annexation, the general conformance of the proposed subdivision to the Land Use Plan and surrounding land uses, and based on the availability of water and sewer, the staff recommends that this property be rezoned from A-1 to R-1. Bumpass said no public opposition was expressed at the hearing and a motion to recommend approval passed by a vote of 8-0. The City Attorney read the ordinance for the first time. Director Hess, seconded by Kelley, made a motion to suspend the rules and place the ordinance on its second reading. Upon roll call, the motion passed, 6-0. 379.5 Bumpass asked if anyone present wished to speak in opposition to the ordinance. No public comments were expressed. 379.6 The City Attorney read the ordinance for the second time. Director Lancaster, seconded by Martin, 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. Upon roll call, the ordinance passed, 6-0. ORDINANCE NO. 3389 APPEARS ON PAGE %�'S OF ORDINANCE AND RESOLUTION BOOK XX/V UNSIGHTLY PROPERTY/LYTTON AVENUE 379.7 Bumpass introduced an ordinance ordering the abatement of unsightly conditions and the razing and removal of an unsafe structure located at 515 Lytton Avenue; left on first reading on November 15. 379.8 Planning Management Director Merrell reported that late yesterday an application was received for a building permit from a relative of the property owner. Merrell said a conditional building permit was issued to the property owner for a period of sixty days, with the requirement that progress must be shown within the first twenty days, and all violations must be corrected within sixty days. Merrell said since the owner was making an effort to improve the property, he was 1 December 6, 1988 n recommending the ordinance be removed from the agenda. Merrell said if the owner 380.] does not meet the deadline, the ordinance would be brought before the Board after sixty days. City Attorney McCord advised that it would be appropriate to table the ordinance 380.. and if it is necessary to bring the ordinance back before the Board,it would be scheduled to be read for the second time. Marinoni, seconded by Martin, moved to table the ordinance. Upon roll call, the 380.: motion passed, 6-0. - Bumpass said it would be appropriate if the staff would notify the writing of the status of the. ordinance. - UNSIGHTLY PROPERTY/SOUTH SCHOOL AVENUE owners in Bumpass introduced an ordinance ordering the abatement of1unsightiy conditions and therazing and removal Of an unsafe structure located on the west side of South School Avenue north of the Bypass; left on first reading on November 15. Merrell reported that it was observed this morning that removal of the demolition had started. He recommended the ordinance be tabled. It was moved by Kelley and seconded by Marinoni to table the ordinance. Upon roll call, the motion passed, 6-0. WEDINGTON SEWER DISTRICT CHARGES 380.4 380. 380. 380. Bumpass introduced an ordinance setting sewer rates and deposits for residents of 380. the Wedington Sewer Improvement District. Linebaugh recommended the item be tabled until December 20; at the request of the District Commissioners who wish to meet with the staff regarding the item. It was moved by Kelley and seconded by Marinoni to table the item. Upon roll call, the motion passed, 6-0. CLAIM FOR DAMAGES/1230 EASTWOOD DRIVE Bumpass introduced a request for approval of payment of claim for sewer back-up damage done to a residence at 1230 Eastwood Drive. Bumpass said the staff recommended approval of payment in the amount of $8,017.44, based on a proposed settlement prepared by Bexley Claims Service. He said the payment would cover the damage which occurred on August 12, 1982 to a residence at 1230 Eastwood Drive because of a backup in the City sewer main on Eastwood Drive. 380. 380. 380. December 6, 1988 381.1 It was moved by Lancaster and seconded by Hess to approve payment as recommended. Upon roll call, the motion passed, 6-0. CLAIM FOR DAMAGES/NORTHWEST ARKANSAS MALL 381.2 Bumpass introduced a request for approval of payment of claim for damage resulting from a water line break at the Northwest Arkansas Mall; and a request for a budget adjustment. He said the staff recommended approval of payment in the amount of $4,554.41 based on an examination by Bexley Claims Service. He said additional claims are expected to be forthcoming which are estimated to bring total payment to approximately $6,000. He said the budget adjustment was requested for $6,000 to be taken from funds slated for a water tank painting project which came in under -budget. 381.3 It was moved by Lancaster and seconded by Marinoni that the payment of $4,554.41 be approved. Upon roll call, the motion passed, 6-0. 381.4 7t was moved by Marinoni and seconded by Kelley to approve a $6,000 budget adjustment. Upon roll call, the motion passed, 6-0. ENGINEER PRESENTATION 381.5 Bumpass introduced an evaluation report from R. W. Beck and Associates, of the MK Ferguson termination settlement proposal for the Northwest Arkansas Resource Recovery Facility. 381.6 Speaking on behalf of R. W. Beck and Associates were Bob Schafish, principal engineer from Denver, Colorado and Don Filiis, Assistant Manager of the construction services office from Seattle, Washington. 381.7 Schafish said the City asked the firm to make an independent review of the termination proposal presented to the City by MK -Ferguson, the prime contractor for the project. Be said they were asked to provide their professional opinion as to the costs presented in the proposal and the representations made by M -K and their subcontractors, and present a verification of the existence and condition of equipment which was fabricated under the terms of the contract. He said these results were presented in their report (previously distributed to the Directors). 381.8 Schafish said MK had approximately 12 subcontractors providing various pieces of equipment. He said two of those pieces account for about 75% of the total cost, the boiler and grates which were manufactured by Volund, and the turbine and generator which were manufactured by Coppus-Murray. 381.9 Schafish said they evaluated and provided an opinion as to the three alternatives presented by MK. He said the alternatives were (1) based on costs of materials and equipment to -date for each vendor or subcontractor less a credit for those materials that will be reused or disposed of by the vendors or subcontractors; (2) based on the various vendors or subcontractors cost -to -date and shipping all December 6, 1988 materials as they currently exist to the City; or (3) based on completion of selected equipment being manufactured under MK -F's existing purchase orders and subcontracts and shipment to the City. Schafish said in their opinion, the second alternative - delivery of parts to the City as is - provided no benefit at all to the City. He •said the third alternative - completion of the equipment, having the - subcontractors ship the equipment to the City, and having the City re -sell it- appears to have some merit. He said in their evaluation, they focused on two pieces of equipment, (1) the boiler and grate assembly and the ash collection equipment, and (2) the turbine and generator. He said they determined the number of, other projects which might exist or are being planned in the United States, where this equipment might be used. He said in order for a project to use this equipment, it would have to be of comparable size, and the project would have to be in the planning stages only. He said they found approximately 1.5 projects in that size range in the planning stages. He said they contacted project developers and equipment vendors for those projects to discuss whether they would have. any interest in the possible purchase of the equipment. He said some interest was expressed in components but no one was positively interested in. purchasing the Package (boiler, turbine and generator). He -said some project developers pointed out that it would be several years before they would be in a position to accept delivery, since their projects are only in the planning stages. He said another risk pointed out was that thepresent equipment could become outdated, since other _technologies could become available. He said another detriment was that a potential buyer would have no warranty or guarantees from the equipment manufacturers. He said Beck would be extremely reluctant to recommend a client purchase such equipment without the manufacturer's guarantee. 382.] 382.: 382.: He•said the -proposal includes a rebate to the City of approximately $700,000. He 382.• said the .City would have to spend an additional amount if it chose to have the contractors complete the fabrication of the equipment, meaning the City would have,to sell the equipment for at least $1.5 million to "break even" under the first alternative. Schafish said delivery of outweighed by 4. it was his firm's opinion that the fabricated equipment and the benefits of the proposal. • the risks to the City, to accept • 382. attempt to resell it, were far He said the film was asked to verify that Volund .and Coppus-Murray had in fact 382. fabricated the equipment. He said this was done by visiting both facilitiesand inspecting the equipment. He said, in the case of Volund, they found the equipment had been fabricated up to the point claimed and its condition was as represented. He said similar conclusions were found in the case of Coppus- Murray's equipment. Don Fillis reported they reviewed the .documents provided them by the•City and 382. those on file at MK Ferguson in Cleveland, Ohio. He said their analysis centered around the MK cost submittals, the vendor subcontractor cost submittals and the methodology used in determining the proposal costs and credits being proposed by December 6, 1988 383.1 MK. He said the MK costs presented represented extra work items consisting of items performed prior to termination notice by the Authority. He said those items represented work MK performed relating to re-siting, re -permitting work, and re -analysis of the interconnects on the electrical system. He said they looked at cost data and the history of events surround the items and concluded the costs were reasonable and in line with work that was to be performed. He said MK's termination costs were well-documented and represented by payrolls and cost account numbers set up specifically for the termination of the project, and covered the period from the termination notice until the end of September. He said one other cost in their proposal was for interest due on payments not made on invoices they had provided from March through the end of September. He said the interest charges were in line with industry standards. 383.2 Fillis said the costs presented by each of the twelve vendor subcontractors represent their costs to date. He said they did not isolate termination costs. He said they reviewed all the documentation and found these were reasonable and in line with industry standards. He said some of the computations they used included "proprietary information" they were not able to copy but were able to observe and review in their offices. 383.3 Fillis said the conclusion they reached after their analysis was that Alternative 1 as presented in their opinion provides the least risk and the most economic benefit to the City. He said they found the proposal presented by MK to be straightforward and they found no hidden or inside costs, and no other costs they felt were not within the realm of the industry. He said the proposal represented a reasonable accounting of the costs. He said Beck's recommendation to the City was that the Authority accept Alternative 1 as presented by MK -Ferguson. 383.4 In answer to a question from Director Marinoni, Schafish explained that, under Alternative 1, the City would have to receive $1.5 million for the sale of the equipment, to make it equivalent to the termination agreement. He explained the credit being offered under Alternative 1 is approximately $740,000. He said, under Alternative 3, where the fabrication of the equipment is completed, another $385,000 would be required to be paid for that expense. He said those two figures total approximately $1.1 million. He said in Beck's judgment, approximately another $400,000 would be spent between now and the time the equipment is sold. 383.5 Marinoni asked what price would have been paid for the equipment if it had been installed. Fillis estimated the cost to be $4 to $4.5 million for all the equipment. He said the rest of the cost of the project would have been for engineering and construction. 383.6 Director Bumpass asked what amount MK submitted for termination costs under Alternative 1, from the date of termination until the end of September. Fillis estimated these to be about $85-90,000 and said that included the bond costs and administrative costs. Bumpass asked what interest rate they were charging on past due payments. Fills said they were using "prime plus 5%" which MK represented as being the maximum allowed under Arkansas law. Bumpass said he 1 December 6, 1988 thought that would be "federal discount rate plus 5%." Fiilis said the bulk of 384.: the interest as they represented it to Beck involved Volund equipment. Bumpass asked if Beck found any record that MK tried to negotiate down any 384.: subcontractor -submitted invoices. Fiilis said . that was not found in the documentation they reviewed which consisted of letters to the vendors notifying that purchase orders or contracts had been cancelled. Bumpass asked if there would be assurance of full release from all contracts, if 384.: Alternative 1 is accepted. Fiilis said. MK did not say that tc Beck and Beck didn't look into that. Martin asked for further explanation of Alternative 1 which indicated a total 384.1 value of $5.i million plus credit of $742,000. Fillis explained the $742,000 represents, vendors and subcontractors' cost proposals and evaluation given to those costs by MK Ferguson, and was based on earned value of each of the bid items in the contract. Martin asked if that was all the credit which could be hoped for, and could part. of the $5.1 million in equipment be sold by MK. Fillis said the $742,000 represents all the credit that would be realized. Martin asked "haw does $5 million evaporate into $742,000?" Fillis said the total value represents the value of the work performed at the 384.' date of termination, and includes termination costs, engineering, administration, and equipment. He said the credit represents the value of. just the equipment as it was represented by vendors, and is credit over the amount already paid. Martin asked if there was any prospect that the boiler parts could be sold. 384.E Fillis said that prospect would be represented by Alternative 2, where the equipment would be taken as is. He said the difference between Alternative 1 and 2•is the value of the equipment to the various vendors and subcontractors. Director Hess asked what the "hard costs" were in the $5.1 million dollar figure. 384.' Fiilis said the reason they had no breakdown of those costs is that they don't know all the true contract values of all the subcontractors and vendors. He said they could probably prepare, an estimate within 15%. Director Bumpass asked if part of the $5.1 million included engineering fees 384.1 charged by MK Ferguson. Fillis said it did but they didn't have an exact figure on those costs, but it was in excess of $1 million. In answer to a question from Hess, Fillis said under the terms of the contract, 384.: 14K was entitled to keep any progress payments already made plus any termination costs. He said MK's settlement proposal represented the termination costs rather than a separation of the "hard costs" versus the "soft costs.' Martin asked if the firm had audited or reviewed the progress payments already 384.: made to MK. Fillis said this was not done specifically. He said they looked at what had been produced in the way of engineering drawings and their effort in administering the vendors. He said their general feeling was that the progress December 6, 1988 85.1 payments made to date were an adequate representation of the effort being put out by both MK Ferguson and the vendors. 85.2 Bumpass asked if the firm analyzed what steps were taken by MK to slow down the construction process after the moratorium on construction was issued prior to the termination. Fillis said he didn't recall anything specific MK did in the last two months of the project prior to termination that changed progress, although there was a letter that did cease some of the work. Filiis said he believed Volund continued with their work. 185.3 Director -Elect Mike Green asked if other options besides the three alternatives were ever discussed. Fillis and Schafish both said they did not recall any other options being discussed and felt the settlement being proposed was reasonable. 185.4 Director -Elect Fred Vorsanger commented that the Authority had already spent $5,191,000, and he asked if, for that amount, the Authority would be out of the project, and MK would keep the equipment and the $5.i million. Fillis said this was the case, except for the credit of $742,000. Vorsanger asked what the obligations were to the bond underwriters. public Works Director Mike Batie said Frank Lyman was present from the Nixon Hargrave law firm to answer those questions. 185.5 Joe Robson, citizen of Fayetteville, asked if the Beck firm had ever overseen the building of an incinerator. Filiis explained Beck was an engineering, not a construction firm. He said the firm had been associated with the building of an incinerator from an oversight standpoint. Robson asked if the firm had ever disengaged a city from such a project before. Schafish said Beck participated in a number of different termination projects, commenting that Fayetteville's situation was unique. Robson asked if any of the 15 projects they contacted were being built by MK Ferguson. Schafish said he didn't know, but pointed out the projects in the size range of Fayetteville's and in the planning stage would not be at a point where they had identified a contractor yet. In answer to a question from Robson, Schafish said Robson could receive a list of those cities which were contacted. 385.6 In answer to other questions from Robson, Fillis said the most expensive equipment is the incinerating equipment and then the turbine generator. He said the contract value for the turbine generator was $380,000. He said the value of the work which has been performed, and represented by the subcontractor, is $185,000. He said, of that $185,000, a $45,000 credit is proposed to be returned. 385.7 Robson said he would like a copy of the Beck report. Bumpass said there was no question that the reports would be made available to Robson. 385.8 Director -Elect Fred Vorsanger asked the Beck representatives for their professional opinion on the Authority honoring its contract with MK Ferguson, and renting the incinerator to someone in order to recover the costs. Filiis said there was a high risk of getting much less, because there is no guarantee of how fast the equipment could be sold or if in fact it could be ever sold. He added December 6, 1988 r that technology improves with time and the "state of the art" you buy today may, 386.1 five years from now not be the "state of the art." He said the firm did not recommend•the Authority consider Alternative 2 or 3. Fran. Alexander, citizen speaking from the audience, said the people understand that the project will cost them $10 to $12 million, even though a $5 million dollar figure was now being discussed. She asked what MK Ferguson had done to deserve millions of dollars on top of the "minuscule parts costs." Alexander said that AFI (citizen group) asked the City BoardandCity Manager to answer a few questions about the disengagement and "we are yet to have a response to our request." Vorsanger asked if MK Ferguson could, in essence, hold the Authority tb the full contract. Frank Lyman, representing the Washington, D.C. law firm of Nixon Hargrave Devans and Doyle, addressed the Board. He said they had been retained by the City as special counsel to advise it with respect to its rights and obligations in' connection with the wind -down. He said MK Ferguson is basically entitled to alit 'the money they have, plus their costs of winding.down the contract. Be said the Contract made this pretty clear. He said, on behalf of the City, he asked them to submit a termination proposal which reflected returning to the Authority as much of the value of the project as might be available to be returned. He said MK didn't have to submit a termination proposal but did so at the request of the City. He said MK didn't have to give the City the three alternatives they did. ,He'said it was at his firm's suggestion that the engineering 'consultant be retained to determine which proposal might be best and whether any of them were fair and reasonable. He said there was nothing to indicate that MK was at all at fault, so there was no way to "hold their feet to any fire." He said that his firm was locking to protect the City's interests. He said he had spoken to the lawyer for the trustee who has indicated the proposal is acceptable, and he had spoken with the attorney for the bond insurance company and they concur. He said the trustee is prepared to accept Alternative 1 and, if the Authority is wining to do that, there would be no action required on the part .of the City 386.2 386.3 386.9 Director Bumpass said the question has come up that there is a possibility of 386.E "lender liability.'." He asked if the lender should be put on. notice that it should review the proposal as well. Lyman said the project was Financed with bond sales and the lenders are the people who bought the bonds. He said bond buyers were "very passive investors" and their interest is represented by the trustee. He said the MK proposal and the R. W. Beck evaluation was submitted to the trustee and, on the basis of those documents, trustee's counsel has.indicated .to him that the trustee is prepared to "go ahead." Bumpass asked about the underwriting liability. Lyman said .he was not prepared . 386.E to address that but his firm will be .submitting to the City a legal report on its risks, rights and obligations in the near future. Hess asked if the trustee could "call the bonds." Lyman said the trustee could call the bonds but has been asked by the bond insurance'company not to call the 386.; December 6, 1988 87.1 bonds. He said as long as the trustee feels reasonably secure that the bonds will be repaid, there is no need for the trustee to call the bonds. He said the trustee feels secure because there is bond insurance, and as long as the trustee can be made comfortable that the bond holders' interest is protected, he shouldn't have any incentive to call the bonds. 87.2 Fred Vorsanger asked Lyman to give a "ballpark figure of how much money we're going to be out." Lyman said a rough ballpark figure would be on the order of $10 million. Assistant City Manager Scott Linebaugh said to date expenditures are shown to be $10.6 million, not including the interest earned on that amount. Linebaugh said interest on that amount was almost $2 million. Linebaugh said this was interest off arbitrage that would be a credit back to the total cost of the project. Linebaugh added that the $10.6 million figure included the $5.1 million figure mentioned earlier. 87.3 87.4 Director -Elect Shell Spivey asked about assurance of obtaining a release from MK and its subcontractors from any further liability. Lyman said the agreement was between the Authority and MK Ferguson and both parties would be asked to execute releases. He said right now the City of Fayetteville had rio obligation and so there was no reason to be concerned about MK or its subcontractors asserting lien rights against the City. Lyman said the Authority should receive lien waivers from MK Ferguson. Bumpass asked what the rough $10 million figure would do to residential sanitation rates if no other funds are used to offset the expense. Linebaugh said original figures estimated by Coopers and Lybrand anticipated the costs to be higher. He said at that point rates were proposed to be raised over a ten- year period in the vicinity of $4-$5 per month, per residential household. 87.5 Al Vick, speaking from the audience, asked what possibility there would be for using part of the one -cent sales tax instead of taking it all out of sanitation rates. 87.6 Joe Robson asked if Lyman had considered yet whether the Resource Recovery Authority was "a legitimate thing, in that Washington County has no obligation to pay anything by contract." Lyman said when the bonds were issued an exhaustive legal analysis was performed by the parties before the bonds were soid and everyone was satisfied at that time that the Authority was properly organized and that the project was properly authorized. He said reviews today do not reveal anything that appears wrong or improper. Robson said that the Attorney for the Authority was the same as the Attorney for the City of Fayetteville and was also was the recipient of money from A. G. Edwards, and personally benefited from the project. '87.7 Vorsanger said he realized that $5 million of the total costs go to MK Ferguson, and asked what was represented in the other $5 million. Lyman said the $5 million "earmarked" for MK Ferguson has already been paid. He said no additional money would be paid to MK Ferguson. Linebaugh said a lot of the remainder of the money is bond costs, engineering costs, and initial costs of the project which have been already paid back to the City of Fayetteville, Washington County and December 6, 1988 West Fork. .Linebaugh said he was nbt including bond reserves. Vorsanger suggested the Authority "eat the $5 million and keep the bond issue and use it for something else." Linebaugh said that was one of many alternatives now being studied. Linebaugh added that part of the $10 million included payment of interest from the beginning of the bonds. Bumpass said he assumed that any writtenquestions forwarded to the City Manager would be answered. STREET NAME CHANGES Bumpass introduced a request for a resolution naming County Road 667 as West Tackett Lane; naming County Road 638 as West Nicole Drive; and changing the name of North 54th Avenue to North 55th Avenue. T C1 388.: 388.: 388.: Bumpass said name changes were being requested for County Roads 667 and 638 388.8 because they were annexed to the City in 1982. He said the name chance from North 54th to North 55th was requested because information from Washington County while working on the E-911 project revealed that the City's operating map for this area was .inaccurate. Bumpass said the staff recommended that particular name change not go into effect until six months from now. Director Marinoni said he could not find a map in the agenda showing County Road 638. .Linebaugh said only a map showing North 54th Avenue was included in the agenda. Marinoni asked where County Road 638 was located. Glenn Smith addressed the Board, stating he operated "The Berry Patch" which used to be Route 2, Box 411. He said when they were annexed into the City the Post Office decided to change his zip code from 72701 to 72703. He said that the City,' a couple years later, told him he had to use 650 N. 54th Avenue. Smith said six months ago he saw a City employee putting up a new sign which read "N. 55th Avenue." Smith said he thought this was an act of arrogance on the part of the City to have given him no notification of the change. Smith said he and.a neighbor called the City staff and the City then "decided to back off." Sinith said his wife was an author and part-time instructor at the 'University and they operate a business and do a lot of correspondence. He said the last time they had a change of address they must have sent out sixty or seventy change of address notices. Smith said he'd like to keep things the way they are. Assistant City Manager Linebaugh responded by stating the reason it's important to make the chance "is basically on the grid map" and so the fire and police protection services will be able to tell where an emergency is When they get a call. He said currently in the City limits there are parts of Fayetteville where streets don't match up to "the grid." He said those are being gradually changed over time. Linebaugh said it'was important for everythingto match the grid so itcan be located speedily and without hesitation. Marinoni asked Linebaugh if, in referring to the "grid", he was -talking about streets running down section lines having specific numbers assigned to them 388.! 388.1 388.' 388.1 December 6, 1988 89.1 because they are on that section line. Linebaugh said that was correct, and that the grid tells you exactly what the address should be. 89.2 Smith asked if there could not be an exception made to the grid because of the rural nature of the area. Linebaugh said the reason it is being done in the way it is proposed is because in the future there will be a lot of other streets in that area, and if you don't follow the grid correctly, you will end up with a hodge-podge like some areas are now in Fayetteville. 89.3 Hess said he didn't see how he could vote on it without having a map. 89.4 Lancaster said he thought Smith would have plenty of time to make the necessary changes because the name change would not go into effect for six months. Smith said it wasn't a matter of time, but it meant having the expense three times. Marcella Thompson said the post office required them to make changes six months ago and she asked why the City didn't know the post office was changing their address in June. Linebaugh said that was because the street was drawn incorrectly on the map. '.89.5 Martin asked if it was possible to somehow modify the system so that Smith could keep his street the way it is, commenting that they have been put through a considerable inconvenience. Linebaugh said he thought that could be done but the City has been told to follow the grid because of the 9-1-1 system. Martin said the fact that the Board had no idea Smith had been put through this problem had some bearing on the issue, and he asked if the staff could attempt to come up with a more creative solution. 89.6 Bumpass asked if Smith had had an opportunity to visit with the City Manager or anyone on the staff. Smith said he called Traffic Superintendent Ferry Franklin about six months ago which was when "they put it on ice." X89.7 Bumpass asked if there was a consensus from the Board that the City Manager should give this situation special consideration. Marinoni suggested tabling the item and asked for more information on where County Road 638 is located, and more information on why the change must be made from 54th to 55th because of a grid system. Marinoni asked where 54th would go if it is changed to 55th. 189.8 Marinoni, seconded by Martin, moved to table. Upon roll call, the motion passed, 6-0. BID WAIVER/ENGINE PURCHASE 189.9 Bumpass introduced a request for an ordinance waiving the requirements of competitive bidding and approval to purchase a new engine for a 1984 Ford Tractor backhoe from Williams Ford Tractor at a cost of $3,689.39. 89.10 Bumpass explained the justification was that the backhoe was purchased from Williams Ford Tractor Company in December, 1983. He said the expense would be covered under funds budgeted for parts, oil and accessories. 1 The City. Attorney read the ordinance seconded by Martin, moved the rules be its second reading. Upon roll call, read for the second time. December 6, 1988 )il for the first time. Director Marinoni, 390.7 suspended and the ordinance be placed on the notion passed, 6-0. The ordinance was Bumpass asked if anyone wished to comment on the ordinance. No public comment 390.: was expressed. Director Marinoni, seconded by Martin, moved the rules be further suspended and 390.; the ordinance be placed on its third and .final reading. Upon roll call, the motion passed, 6-0. The ordinance was read for the third time. Upon roll call, the ordinance passed, 6-0. ORDINANCE NO. 3390 APPEARS ON PAGE f„,;27 OF ORDINANCE AND RESOLUTION BOOK XX/ BID WAIVER/ROAD SALT PURCHASE Bumpass introduced an ordinance waiving the requirements of competitive bidding 390.4 for the purchase of road salt for 1989. Bumpass explained road salt was a spot market commodity with fluctuating prices. The City Attorney read the ordinance for the first time. Director Martin; seconded by Marinoni, moved to suspend the rules and place the ordinance on its second reading. Upon roll call, the motion passed, 6-0. The ordinance was read for the second time. Director Martin, seconded by Marinoni, moved 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. 390.E Bumpass explained that competitive price quotes would be sought by the staff. 390.E Upon roll call, the ordinance passed, 6-0. ORDINANCE NO. 3391 APPEARS ON PAGE XXl✓ BID WAIVER/SANITATION ENGINE PURCHASE OF ORDINANCE AND RESOLUTION BOOK Bumpass introduced an ordinance waiving the requirements of competitive bidding and approval to purchase a new engine for a 1985 International Truck used by the Sanitation Division, at a cost of $3,250. Bumpass explained the old engine needs to be replaced immediately because of failure of the existing engine. The City Attorney read the ordinance for the first time. Director Marinoni, 390.E seconded by Martin, moved to suspend the rules and place 'the ordinance on its second reading. Upon roll call, the motion passed, 6-0. The ordinance was read for the second time. Director Marinoni, seconded by Martin, moved to further suspend the rules and place the ordinance on its third and final reading. Upon December 6, 1988 91.1 roll call, the motion passed, 6-0. The ordinance was read for the third time. Upon roll call, the ordinance passed, 6-0. ORDINANCE NO. 3392 APPEARS ON PAGE 't49 X X/ BID WAIVER/USED VEHICLES OF ORDINANCE AND RESOLUTION BOOK 91.2 Bumpass introduced a request for an ordinance waiving the requirements of competitive bidding and approval to purchase two used vehicles for the Police Department Drug Enforcement Program. 91.3 The City Attorney read the ordinance for the first time. Director Marinoni, seconded by Bumpass, moved to suspend the rules and place the ordinance on its second reading. Upon roll call, the motion passed, 6-0. The ordinance was read for the second time. Director Marinoni, seconded by Kelley, moved 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. 91.4 Bumpass said $10,413 was budgeted for this expense and the staff will shop competitively and rotate purchases of vehicles. He said the cars would be used under -cover. 91.5 Upon roll call, the ordinance passed, 6-0. ORDINANCE NO. 3393 APPEARS ON PAGE Y 3 0 OF ORDINANCE AND RESOLUTION BOOK XXi i OTHER BUSINESS CITIZEN REQUEST/SEWER & WATER EXTENSION 91.6 Julian Archer addressed the Board, stating he owned property at 2231 Markham Road. He said he spoke to the Board in August proposing the City share with him in the costs of extending sewer and water to his property. He said he also brought his proposal before City Engineer Don Bunn, Public Works Director Mike Batie and City Manager Jim Pennington. He said he received a letter from them stating that he should bring up the matter under Other Business. He said their response to his proposal was a negative one. 91.7 Archer said the property had been in his family for 90 years and consisted of about 200 acres on Markham Hill between Razorback Road and the Bypass. He said the houses were built between 1890 and 1929, and he was in the process of building a structure on the property now. He said the homes have never been served by sewer or by a City fire hydrant. He said about four years ago one structure burnt and nothing could be done about it. He said Northwest Engineers did a survey to determine a possible route to the closest sewer connection and the cost to reach that connection. He said two routes were proposed, one to the December 6, 1988 north costing $35,000 and one to the east costing $30,000. Archer said the City 392.: water tank is situated right in the middle of this property and the water main extension would cost $15,300. Archer said there is an antiquated septic system for each of the structures, and these need to be replaced. He said he would prefer to have all six of the houses connected to the City sewer. He said he felt the fire hydrant situation was almost an emergency. He said the.structures were from 800-1,000 feet away from the .nearest fire hydrant. Archer proposed a 50-50 cost sharing arrangement ,with the City on both the water and .sewer extensions. Archer said he was developina property nearby which would not lie included.in the proposal he was now making. Archer said if any development was tied into either of the lines he is proposing within the next 25 years he would reimburse the City plus 10% interest. He asked the Board to agree to consider his request on a Board -agenda. - It'was the consensus of the Directors to place the request on the next agenda. Archer said if he could not attend the Board meeting he would have Erd Wimberly of Northwest Engineers represent him. BID AWARDjTELLERETTB DRAWER. Linebaugh reported several meetings ago the Board awarded a contract to Weber Safe and Lock to install a tellerette drawer at the drive-in window at City Hall. Linebaugh said the company has not met its obligation of installing the drawer within thirty days. Linebaugh said over sixty days has passed and the company states it 'will be at least another thirty days. Linebaugh said the staff has notified the company that the City has cancelled its order and recommends the contract be .awarded to the second lowest bidder, Liberty Bank Equipment. Linebaugh said the cost would be an additional $307. 392.. 392. 392. Hess asked if the City had legal recourse against the first company. McCord said 392. the City did have legal recourse, if it wished to sue.the first company for the $307. Marinoni,.seconded by Kelley, moved award of bid as recommended. Upon roll call, 392. the motion passed, 6-0. Bumpass suggested the City write a demand letter to the company for the $307: 392. BUDGET MEETING SET Linebaugh announced, that, after polling Board members, a special Board meeting 392: has been set to review the 1989 Budget on December 13 at.8:30 a.m. in Room 326 of City Hall. He said a summary of the items to be reviewed in the meeting would be distributed to the Board this week. • December 6, 1988 SETTLEMENT OFFER/BANKS PROPERTY 93.1 City Attorney McCord reported he submitted a memorandum to the Board regarding a settlement offer from Banks relating to the condemnation of property on the southwest corner of the block for the Arts Center site. He said the Board considered previous settlement offers in this case. He reminded the Board the City's independent appraisal was $200,000 and the land owner's independent appraisal was $300,000. He said the owner now offers $270,000. He asked the Board if it wished to either accept, reject or submit a counteroffer. He said the City's standing counteroffer has been $239,800, or 10% above appraisal. 93.2 Lancaster, seconded by Marinoni, moved to reject the offer. 93.3 Hess asked about the cost of litigation. McCord said there already has been litigation on the land owner's challenge of "the right to take" which was tried in Chancery Court. McCord said the ruling was in the City's favor. He estimated further costs could 'oe from $3-5,000. 93.4 Upon roll call, the motion passed, 5-0-1, Bumpass abstaining. 193.5 McCord said he would continue negotiations with the owner's attorney. SETTLEMENT OFFER/DOCK OPERATOR 193.6 McCord presented a claim to the Board from the Lake Sequoyah boat dock operator for overtime pav due under the Fair Labor Standards Act. He said he submitted a memo to the Board with a recommendation from the City Manager and his office recommending a settlement of $10,000. He asked the Board if they wished to act on this matter now. He added that a similar claim was made and settled with the boat dock operator of Lake Fayetteville. He said the issues were the same. 593.7 Martin, seconded by Marinoni, moved to settle for the recommended $10,000. Upon roll call, the motion passed, 6-0. THANKS TO SWEPCO 393.8 Bumpass said special notice should be taken of a recent decision by SWEPCO. He said several weeks ago they were asked not to continue cutting trees in their rights-of-way - there were some citizen complaints - and there was a quick response by Biff Fouke of SWEPCO and others. Bumpass said they had their techniques reviewed and he thought they had changed their policy. Bumpass suggested issuing a proclamation thanking them for their quick response and in appreciation of their sensitivity to the request of the citizens. ADJOURNMENT 393.3 The meeting was adjourned at 10:37 p.m.