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HomeMy WebLinkAbout1989-04-04 MinutesMINUTES OF A MEETING OF THE CITY BOARD OF DIRECTORS A regular meeting of the -Fayetteville City Board of Directors was held on Tuesday, April 4, 1989 at 7:30 p.m. in the Directors' Room of the City Administration Building at 113 W. Mountain Street, Fayetteville, Arkansas. PRESENT: Mayor William Martin; Directors Russ Kelley, Paul Marinoni, Jr.,Shell Spivey, Fred Vorsanger, Michael Green and Ernest Lancaster; City Manager James Pennington, City Attorney James McCord and City Clerk Suzanne McWethy; members of the staff, press and audience • The Mayor called the meeting to order with seven Directors present. The Mayor 104. welcomed those present and watching on television. He said everyone would have an opportunity to speak, but asked that comments be concise and non -repetitive, be directed to the entire Board, and that any questions be addressed to the Mayor. CONSENT AGENDA The Mayor introduced consideration of items which may be approved by motion, or contracts and leases which can be approved by resolution, -and which may be groupedtogetherand approved simultaneously under a "Consent Agenda." Martin said any director may request the removal of any item from the Consent Agenda. Martin reviewed the items shown as follows:' 104. Approval of the minutes of the March 21, 1989 regular Board meeting; 104. B. Approval of a budget adjustment, in the amount of $596,774, to be 104. transferred from Unreserved Fund Balance to cover the expense of completing the construction of the Wastewater Treatment Plant; The staff recommends approval of these funds being rolled forward from the 1988 budget to the 1989 budget, because the project was not completed in 1988. C. Approval of a budget adjustment, in the amount of $155,520, to be 104. transferred from Unreserved Fund Balance to cover contract expenses with R. W. Beck and Nixon, Hargrave, Devans and Doyle, for engineering and legal services performed in 1989 in connection with the incinerator disengagement project; The staff recommends approval, with the cost expected to be covered by a future rate increase. D. (deleted at Board Agenda Session) 104. E. (deleted at Board Agenda Session) 104. 1 v s 105.1 105.2 April 4, 1989 F. A resolution authorizing award of contract for engineering services in connection with sewer replacements on Davidson, Willow, Calvin and Halsell Streets, and in Walker Park; A staff selection committee, using the City's Professional Contract Policy, evaluated five proposals and recommended award to CEI Engineers of Rogers, proposing a fee of $17,000 for the project. The project is part of the City's capital improvement Plan and is to be funded by a Water and Sewer Bond Issue. $30,000 was budgeted for this expense in the Water and Sewer Bond Construction Fund, but funds will be used from the Water and Sewer Fund and reimbursed after bonds are sold. RESOLUTION NO. 27-89 APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK G. A resolution authorizing the Mayor and City Clerk to execute a Quit Claim Deed for the vacant lot on the south side of the Downtown Square; A potential buyer of the property, E. G. Bradbury, makes this request because of a reverter clause in the chain of title which necessitates a Quit Claim Deed from the City, to remove a "cloud" on the title to the property. The staff recommends approval. RESOLUTION NO. 28-89 APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK 105.3 H. A resolution authorizing the Mayor and City Clerk to execute an agreement with M.C.W.W. Corporation; M.C.W.W. Corporation owns property which abuts the Fayetteville Industrial Park. The agreement would give the City the right to enter onto M.C.W.W.'s property for the purpose of improving the appearance of the entrance to the Industrial Park, and will allow the City to market the property for sale along with City - owned property in the Industrial Park. The cost of fence removal, mowing and other maintenance is estimated to be $1,211.84. Funds are budgeted in the Public Works Department Street right-of-way account. RESOLUTION NO. 29-89 APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK 105.4 I. A resolution authorizing award of contract for sewer flow monitoring design and installation services; V V April 4,1989; • A staff selection committee, using the City's Professional Contract Policy, evaluated six proposals and recommended award to ETC Engineers of Little Rock, proposing a variable cost contract, which has a base cost of $47,000 with a not -to -exceed cost of $110,000. $350,000 is budgeted to cover the expense of the project. RESOLUTION NO. 30-89 APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK Approval of a budget adjustment, to transfer $200,000 from sludge 106. management project retainage funds and the Sludge Site Construction Account, into a contingency fund to cover the cost of completing the sludge management site project; The staff recommends approval of this request. The fund would be used to cover the cost of OMI completing work left unfinished when United Pacific Bonding Company walked off the site in August of 1988. A resolution authorizing approval of a change order to a contract 106. with Sweetser Construction Company, for improvements to Helen, Lee and Duncan Street; The original contract called for.: construction of street, sidewalk and storm drainage improvements on Helen, Lee and Duncan Streets. The staff recommends approval of the change order, which would allow for the construction of a concrete storm sewer discharge basin on Duncan Street, for the purpose of correcting an erosion problem. If approved, the change order would mean an increase in the contract price by $3,550. A budget adjustment is requested in that amount, to be taken from 1986 Community Development contingency funds.. RESOLUTION NO,'S"31&32-89.APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK L. A resolution authorizing the Mayor and City Clerk to execute 106. acceptance of grant funds for a Master Plan Update Study for the Fayetteville Airport_ The Mayor told the Board that the staff has requested the removal of Item L from the Consent Agenda because the request was premature. It was moved by Director Kelley to approve the Consent Agenda, with the exception 106. of Item L. The motion was seconded by Director Spivey. Upon roll call, the motion passed, 7-0. .07.1 April 4, 1989 REZONING APPEAL/1728 MISSION BOULEVARD The Mayor introduced an appeal from a decision of the Planning Commission regarding denial of rezoning property at 1728 Mission Boulevard, from A-1 "Agricultural" to R-0 "Residential Office, submitted by J. D. Crouch. .07.2 The Mayor explained the Planning Commission, at its public hearing on February 27, 1989, recommended denial of the petition by an 8-0 vote. L07.3 The Mayor told the Board the Planning Management Director recommendation was that the staff could not support unconditional spot or strip rezonings on Mission due to the residential character of this street, that due to the adjacency of the property to the actual cemetery, it could conceptually be suitable for a funeral home, and that the staff could support R-0 zoning only with the offer of a Bill of Assurance that the property would only be used for a funeral home. L07.4 The Mayor said that, at the hearing, a petition was submitted with approximately 50 signatures from neighbors asking that the rezoning be denied. He said about 10 to 12 citizens were present at the hearing to express their concerns relative to (1) a potential increase in traffic; (2) safety hazards to children using the crosswalk near the cemetery; and (3) a potential for a decrease in area property values. L07.5 The Mayor said the petitioner was requesting that the Board reverse the Planning Commission's decision. 107.6 It was moved by Director Green that the petition be denied. The motion was seconded by Director Kelley. 107.7 Director Vorsanger said he had received mostly negative, but also some positive, calls and letters regarding the issue. In answer to a question from Vorsanger, Crouch said the cemetery office would be housed in the funeral home. 107.8 Crouch submitted a petition to the Board which he said contained over 500 signatures of area residents. The Mayor asked Crouch to tell the Board how he thought the Planning Commission was in error in denying the petition. L07.9 Crouch said he felt the Commission acted largely on the assumption that the majority of the people in the area were opposed to a funeral home at that location. He said, based on his research, that was simply not the case. He said he visited all the people in that area of town and had received overwhelming support in response. He said the Commission based their decision largely on the petition with 50 names which he said were friends and a few neighbors of Patty Riddle, who lives next door to the cemetery. He said he talked to a good number of people who signed the petition and said they were misled into believing he was going to build a huge, ultra -modern funeral facility. He said he proposed to replace the old office with a modest, colonial -design structure. He said he felt that after a lot of people got the facts they were not at all opposed to the idea. He said a good number of the people who had signed the petition submitted to the Planning Commission have now signed his petition. L07.10 Crouch said the major objection he has received has been one of traffic in the area. He said he didn't feel the traffic would increase to a great degree, pointing out that because of the proximity of the funeral home to the cemetery, the need for a funeral procession on the city streets would be eliminated. • April 4, 1989 Crouch said concerns had beenNexpressed about decreasing property values in the 108. area. He said he obtained opinions from four appraisers in the community. He said the Board had received three written opinions which all agreed that, since the existing business had been there for 65 years, there would be no increase or decrease in property values. Crouch said he would be cleaning up the old site, eliminating the old office and maintenance shed and beautifying the area. 108. In answer to a question from Director Marinoni, Crouch said he had about 9,500 108. vacant burial lots at the cemetery and said he has 100-110 burials per year. He said the cemetery has 85-90 years left to its life. He said he hoped about half the clients using the cemetery will also use the new funeral home. Director Green said he thought, whether or not there is a funeral procession, the same number of automobiles will enter and leave the property at some point. He said he thought traffic problems and safety problems would probably get worse. He said he thought more people usually attend a funeral than attend a graveside service, which could mean more traffic coming to the funeral home than would be generated from a funeral procession. He said he thought there would be an increase in traffic because of added visitations to the viewing rooms in the funeral home, and because of delivery vehicles. He said he was concerned because of the location of a major crosswalk used by children, joggers and others. He said the city may have to add a traffic signal device to increase safety in the area. He said he didn't see how any of the benefits could outweigh the additional burdens. Crouch said he didn't think delivery traffic would increase any more than it now. He said, although some people come to the office to make arrangements, for the most part counselors visit people in their homes. He said the woman who guards the crosswalk signed his petition. He suggested the City consider adding some crossing stripes to the street to help children cross more safely, and install a traffic signal in the future. He said he thought traffic in the area would increase regardless of whether the funeral home is built. Crouch showed the Directors a photograph of the type of facility he wished to construct, commenting that it would certainly beautify the neighborhood, would extend a service that has been provided in the area for 65 years, and would provide healthy competition in the funeral industry. Director Green asked Crouch if he thought the parking area and its lighting would adversely affect the residents in the area. Crouch said he didn't think it would and said he would comply with the City ordinance. He explained the parking would be to the north and west of the funeral home, and the view of the parking would be blocked from Mission Boulevard. He said they would provide landscaping that would be appealing to the eye, and would work with Patty Riddle to provide privacy fencing. 108. 108. 108. 108. Director Kelley said he had been unable to find significant evidence to overturn 108. the 8-0 decision of the Planning Commission. He said he thought it was the position of the Commission that the rezoning could set a precedent for changing the residential characteristic of the neighborhood. Mark Davis, resident of 1709 Mission Boulevard, said he lived across the street 108. from the property. He said the objections of the neighborhood were to a commercial business of any size, no matter what the building looks like. He asked the Board to look carefully at the 500 signatures on Crouch's petition to April 4, 1989 L09.1 see where those people live, compared to where the residents on the other petition live. L09.2 Davis said the Root School area is predominantly R-1 and should stay that way. He said once the property is rezoned, others would use it as a precedent to continue commercial zoning. He said he and Patty Riddle discussed the matter of property value depreciation with three realtors who said a house near a funeral home would sell for less and be harder to sell than one in a purely residential area. He said a larged paved parking lot with street lights would not blend well into a neighborhood setting even if it is behind a building. He said he thought the addition of the funeral home would have to increase the traffic, since Crouch's business would be increasing. Davis said there would be hazardous chemicals used in the funeral home for embalming. He questioned where fumes, leftover chemicals, body fluids and odors would go. Davis asked the Board to deny the request. L09.3 John Warren said he assisted Crouch in obtaining signatures on the petition. He said a number of the signatures "re from residents on Mission Boulevard. He said some Ramos appear on both petitions, explaining some people were led to believe that the funeral home would not beautify the community and was strictly for economic gain for Crouch. He noted there was no heading on the petition which had been submitted to the Planning Commission. He said some people who signed Crouch's petition who live further away from the cemetery use Mission Boulevard every day, own expensive homes and are affected by the site. Warren said the crossing guard herself felt the funeral home would enhance the safety of the children. Warren said a Bill of Assurance would not set a precedent for commercialization. 109.4 Patty Riddle said when she circulated the petition, she left a letter with each person, explaining what they were signing. She said about five people called her last week questioning Crouch's petition which they had signed. She said she didn't think it seemed too fair to get into an argument over the petition. L09.5 Riddle said the neighborhood is now relatively free from business traffic and she would like to keep it that way. She said the rezoning in the middle of a neighborhood was extremely inappropriate. She expressed concern about the safety hazard to children using the crosswalk, walkers, bicyclists and others. 109.6 Riddle said she thought the whole point of rezoning is to have planned development which is intelligent and organized, and to prevent shotgun, hodge- podge zoning. She saiu her realtor told her the rezoning would decrease the value of her home. She said a parking lots with lights and general business congestion will not blend with the neighborhood. 109.7 Riddle said as an adjoining property owner to the cemetery she has been asked to discontinue outdoor activities (hammering, power tools, and general summertime activites) for burials. She said this has not been a problem yet but she felt it would become a nuisance with the addition of the funeral home. Riddle asked the Board to vote down the appeal. 109.8 Kirk Elsaw, of Lindsey and Associates, said he lived in the area. He said if the appeal is denied there are other available locations for the funeral home. He said if Crouch is determined to have the facility in the area, "we need to realize the best location for it." He said there was a site across the street which Crouch had considered, which he said would be more of a traffic concern. He said there were other locations down the road. • 1 J. V April 4, 1989 Tom Marrs/resident of 1940- ;Winwood, said.dhe`4yed around the corner from the 110. proposed location. He said the neighborhood was not only residential but had lots of young children who use the sidewalks. He voiced his strong opposition to the funeral home which he said would destroy the character of the neighborhood - and create an additional hazard to children. Director Vorsanger pointed out to Marrs that when he bought his house the 110. cemetery was already there. Marrs said he disagreed with the proposition that the funeral home would not create additional traffic. Vorsanger said the funeral home was far away from Winwood. Marrs said he and his family use the sidewalk on Mission Boulevard frequently. Bill Harrison, groundskeeper for Fairview Memorial Gardens, said he had lived 110. there for 13 years. He said he thought traffic would slow down as it enters the property. He said processions coming into and leaving the cemetery have a police escort which will take care of that traffic problem. He said delivery trucks have been coming to and from the property for many years and will continue whether or not the funeral home is built. He said toxic wastes will not go down the drain. He said the funeral home would be a benefit to the cemetery property which has been run-down for the past ten years. A. J. Adkins, resident on East Oaks, said he was City Editor for the Northwest 110. Arkansas Times and a personal friend of J. D. Crouch. Adkins said you could see the growth when you drive the highway every day, noting it was not only residential growth but potentially commercial growth. He said he didn't think the City could stop commercial growth in that area, and said he hoped the Board would consider, with vision, what eventually will happen in the area.. Latrece Delaney, resident of 2134 Camelot, said her main concern was the welfare 110. of children. She expresseu concern about the addition of any more businesses on Mission Boulevard. Upon rollcall, the motion to deny the rezoning passed, 5-2, Directors Marinoni 110. and Vorsanger voting in the minority. Before voting, Vorsanger said it was a.difficult decision for the Board for 110. several reasons. ;He asked if it was possible to refer this back to the Planning Commission, since the Board had been presented with information the Planning Commission had not received. Vorsanger said he had attended the Planning Commission meeting where the Commission had only one petition in opposition. Vorsanger said he thought the biggest cause of traffic congestion on Highway 45 was from vehicles going to and from Root School, and from the east. He said he was reluctant to overthrow an 8-0 vote of the Planning Commission. He said he would feel better voting if he knew the Planning Commission could give •consideration to the additional information. Before the roll call was completes, Mayor Martin told Vorsanger that if the vote 110. failed, a motion could be made to approve the request or to refer, it back to the Planning Commission. Before voting, Director Lancaster said in all his years on the Board he didn't 110. recall the Board overturning an 8-0 vote of the Planning Commission. He said he would vote to refer it back, but wouldn't vote to overturn the Planning Commission. April 4, 1989 Director Vorsanger asked if he could make a motion to refer the rezoning back to the Planning Commission. The Mayor explained that only a Director voting in the affirmative could ask to reconsider. RECESS 11.2 The meeting was recessed at 8:40 p.m. and reconvened at 8:45 p.m. DICKSON STREET DISTRICT L11.3 The Mayor introduced a report from the City Manager regarding the status of negotiations between the City, Lhe Dickson Street Central Business Improvement District, and Citizens Against Unfair Taxation (CAUT), concerning the District Plan of Improvement for construction of parking spaces for the Walton Arts Center. L11.4 City Manager Pennington said a number of issues had been discussed in meetings which have been ongoing and some issues had been resolved. He said no agreement had been reached over a few major issues. Pennington said the City has two positions: (1) it can build the parking facilities; or (2) it can make loans or grants to the improvement district for them to make improvements. He said revenues would be realized after the parking is built. He said he would lean towards the City building the parking facilities. L11.5 Pennington recommended that the City build the parking facilities contingent upon the continuance of the improvement district, but changing the scope of the district to redevelop the Dickson Street area. He said this would require a new Plan be drawn. Pennington said any agreement the City would enter into would be contingent upon a Plan being developed by the district and CAUT. He said he didn't believe it would be appropriate for the City to just go ahead and build the parking or offer grants or loans to the district until some of the issues are resolved, and until there is a plan of action. Pennington said the time frame is limited because construction of the Arts Center is hoped to be completed by early 1991. 111.6 Pennington explained the formation of the district had been originally recommended by the City Board, in order to build parking facilities. He said the concept he was now recommending, to look at the entire area from a re- development standpoint, could also be tied into the downtown area and into the City's community development program 111.7 Pennington recommended that, whatever action is taken, the City's involvement be contingent upon a new plan acceptable to all parties, to mitigate the financial impact on the members of the district. 111.8 Director Vorsanger asked how much it would cost the City to build the parking and from where the money would come. Pennington estimated the cost to be roughly $700,000 to $1 million. He said in no way would this cost affect the amount of money available for the Arts Center. He said one possibility for funding the parking would be for the City to take the funds from reserves, to be paid back through sales taxes or a bond issue. He said less than 500, or around 400, 114 April 4, 1989 parking spaces could be bpilt. In answer4rt'o.a questioh from Vorsanger, 112. Pennington said if the City nunt the parking no assessments would be levied to cover the cost of the parking. Marinoni asked, if the district's purpose was to build parking when they obtained 112. the signatures on the petition to form the district, won't the district have to be restructured. Pennington said improvement district law is quite broad and the district's program can be changed without re-forming the district. He said, however, the district would have to develop a new plan to be presented to the City Board for approval. Pennington said agreement had been reached that the City pay for the parking, 112. and he believed there was an agreement "in general terms" that the district continue and that its scope be changed. Marinoni said some objections he has heard have been concerning the powers of the improvement district. 112. The City"Attorney said the petition to form the district requested authorization 112. to construct parking lots and other improvements - landscaping and lighting - authorized by the central business improvement district statutes. He said the petition was broad enough to include the proposal now under consideration. He said before any improvements other than those originally contemplated could be constructed, the commissioners would have to file with the City Clerk a new Plan of. Improvement and cost estimates, and then a new assessment of benefits based on the new plan and cost estimates would have to be levied and collected. Pennington said the power of the improvement district was still an item under 112. negotiation. McCord said there had been concern that the district has the power to levy additional assessments for maintenance purposes. He said that was true, under the statutes, but the original petition did not purport to seek that authority, so before the district could levy additional assessments for maintenance, it would have to recirculate a petition to get the consent of 2/3 of assessed value of the property in the district. He said, as it now stands, the district does not have the authority to levy additional assessments for maintenace purposes. 112.. Director Marinoni asked if there had been discussion about the City contributing 112. 50% of each person's assessment. Pennington said that had been discussed before the City became involved in negotiations. He said CAUT presented a proposal with made about eight requests. In answer to a question from Director Green, Pennington said the City does not propose to enter into a contract with the improvement district to build the parking, but would do so on its own. Green asked if there was a time limit on the City's offer to build the parking lots, in the event an agreement cannot be reached between CAUT and the district. Pennington said, according to law, the district can proceed to build the parking. He said what concerns him the most is that the district continue intact. Pennington added that negotiations need to continue. He said at some point the time will come when a decision will have to be reached. 112. Cyrus Young, resident of 210 North Locust, spoke on behalf of Citizens Against 112. Unfair Taxation (CAUT). Young thanked the City for its positive indication of the City possibly taking over the parking lots project for the Arts Center. He said CAUT would like to end the controversy with the district and channel its L13.1 April 4, 1989 energy into fixing up Dickson Street. He said CAUT would like a lot of the money scheduled to be spent on parking lots spent on fixing up Dickson Street He said CAUT had agreed to virtually all the terms negotiated with the district. He said the district had agreed to take input into the planning from the people in the district. Young said CAUT has asked for a cap on the amount of tax that the district would be collecting and, before any additional taxes can be raised above the cap, that the owners in the district must vote to allow the new taxes. He said mgt. has been a stumbling block in the negotiations. He said the commissioners want to have unlimited ability to tax without a vote of the members of the district. He said CAUT did not think theirs was an unreasonable demand and said the commissioners were unwilling to agree to it. He said, as far as CAUT knows, the negotiations are over and they have failed. L13.2 Young said as recently as last week CAUT requested information from the commissioners which they still had not received. He said the commissioners agreed to respond to allegations made by CAUT, and asked Attorney Ron Bumpass to respond it writing. Young said it has been well over thirty days since the request was made and no response has been received Young said if the district remains intact, he thought there would be bitterness and resentment. He said the district can reassess every year and raise the taxes. He said if there is no response from Ron Bumpass, CAUT will be requesting the City conduct an investigation. 113.3 Director Green asked Young what cap CAUT would accept. Young said CAUT had mentioned a cap at $500,000 but said, with the lack of a plan and cost estimate, that is just a ballpark figure. Green said whatever cap CAUT chooses will be arbitrary. He asked if that wouldn't limit any development and direction that Dickson Street could possibly take. 113.4 Green said he thought there were built-in checks and balances, in that the commissioners are paying the majority of the assessments. He said he thought that would tend to keep the assessments reasonable. Young disagreed, and said the commissioners had spent close to $100,000 on attorneys and assessors. He said the commissioners can put their assessments off on people who rent their property. 113.5 Bill Underwood, one of five district commissioners, spoke on behalf of the district. Underwood said he and Curtis Shipley had been primarily the two district commissioners negotiating with CAUT. He said their meetings had been interesting, productive and pleasant. 113.6 Underwood said that when it was decided to build the Arts Center on Dickson Street three years ago, it was conditioned upon the district being fn -Tined to provide about 500 parking spaces. ne said those who formed the district felt a strong, moral obligation to the City, the University and the citizens to live up to their end of the bargain. He said they didn't want to see the district dissolve. Underwood said he thought the district could have done a better job communicating with CAUT earlier in the process. He said CAUT's attorney, Larry Froelich, has charged fraud, material misrepresentation by the City Board, the organizers, the conuuussioners and the assessors, and filed a lawsuit last May in Chancery Court. Underwood explained the Court ruled that the district had been properly formed and there had been no fraud and misrepresentation. He said that decision is now on appeal. Underwood said the commissioners thought it would be prudent to meet with CAUT directly to try and iron out the differences. 113.7 Underwood said in their meetings, CAUT presented ten points they wished to see resolved. Underwood said the district agreed to change the make-up of the April 4, 1989 district commission from d five=member 'to'"a"seven-member body. He said the district agreed to a reduction in taxes which CAUT requested. He said CAUT wanted a planning committee to which tut district agreed. Underwood said seven of the ten points were very good ideas, but the district had a problem with three of the points, one of which was to dismiss the district attorney, Ron Bumpass and their assessor, Cary Schultz. He said CAUT claimed those two individuals had not performed their jobs well, among other things. Underwood said the commissioners have had no reason to tell Bumpass he had not done a good job, since the courts have supported him. 119 114. • 114. Underwood said CAUT wanted the district to fine Bumpass some of the fees they 114. had paid him, and give them to CAUT's attorney, Larry Froelich. Underwood said the district had a problem with that. Underwood said the second point was'Froelich's fee. Underwood pointed out that 114. the district had not hired Froelich and, in fact, Froelich's efforts had cost the district about $18-20,000 in legal fees of their own. He said CAUT wants the district to pay Froelich a $20,000 fee, $5,000 of which would go to CAUT to reimburse them for some expenses. Underwood said the third point had to do with limiting the improvements the district can make in the future, and having an election before any future improvements can be made. Unaeiwood said CAUT members represent less than 5% of the assessed valuation in the district, yet wish to have full voting privileges on potential improvements. He said CAUT was fearful the commissioners would go on a wild spending spree. Underwood said there was a built-in governor on what the commissioners can spend. He explained that any amounts the commissioners vote to spend is taxed proportionately to each property owner in the district. He said CAUT, for example, has an annual assessment of under $50 per year per person (except for the doctors' building) and their total assessment for all -their properties is $1,465 per year. He said, by contrast, the five commissioners have a total annual assessment of $13,088, or an average of $2,617. 'He said this was a ratio of 64 to 1, meaning that every time the commissioners vote to tax CAUT $1, it will cost each commissioner $64. He said he thought that was a powerful deterrent. • 114. Underwood said he would not vote for expenditures. that are not prudent. He said 114. he and the other commissioners feel a moral obligation to do what's right about improving and sprucing up Dickson Street. He said, whether that's for cosmetics or for parking, the district has an opportunity to make the Arts Center "the shining jewel" of this community. He said to limit improvements for the future would betray the trust the community has placed in the district, and is untenable for the commissioners. Underwood said he was sorry a compromise could not be reached, since three points could not be resolved. Mayor Martin asked if there was a way to limit any future expenditures, above 114.' an agreed-upon cap, to assessments only on a select group, or to exclude a small group from any future assessments. Although Underwood commented that that sounded good to him, the Mayor cautioned that negotiations should not take place at the Board meeting. Underwood said the district wondered if the City staff could help with the 114.. negotiations, by acting as a facilitator. The Mayor said he thought the City Manager's recommendation was an admirable 114.! "half-step forward." He said he would like the City to take the initiative to .15.1 .15.2 April 4, 1989 provide the parking, and use it as an incentive for the parties to get together and agree jointly to make improvements in the Dickson Street area that will enhance the Arts Center. Martin moved that the City Manager's recommendation be accepted- that the City agree to construct the necessary parking places for the Walton Arts Center, contingent on a plan of action being adopted by the Dickson Street Improvement District commissioners and CAUT, which would include a new Plan of Improvement for development of Dickson Street, said offer to be outstanding for 45 days The motion was seconded by Director Green. Upon roll call, the motion passed, 7-0. RURAL run ..ONTRACTS The Mayor iw*roduced consideration of a resolution authorizing approval of revised rates for outside -city standby fire protection. The City Attorney advised that approval could be done by motion. .15.3 The Mayor explained that several years ago the City Board established the policy that standby fire protection would be offered rural residents who lived within a certain distance from the city limits. He said the fee for this ability to call the Fayetteville Fire Department is presently based on a formula which takes into account what city residents pay --through the General Fund, Revenue Sharing, and Fire Pension Fund, divided by the number of households in the city --plus a $5 per year administrative surcharge. L15.4 The Mayor explained that each year the Board must approve revisions to the rates. He said the fees for individual tire contracts in 1988 were $294 per year while those for a neighborhood association contract were $147 per household per year. L15.5 The Mayor reported the City Manger recommended approval of an increase of $2 per year for individual fire contracts and an increase of $1 per household for neighborhood association contracts. L15.6 It was moved by Kelley and seconded by Marinoni, to approve the request. Upon roll call, the motion passed, 7-0. "YOU CAN!" ADVISORY COMMITTEE L15.7 The Mayor introduced appointment of two representatives to serve on an Advisory Committee in connection with the "You Can!" program, administered by the Economic Opportunity Agency of Washington County. L15.8 The Mayor explained that when the City Board authorized funding for the program in 1988, an agreement was entered into with the EGA, which included a provision for establishing an eight -member Advisory Committee to be made up of representatives of professional human service providers, educators and the City of Fayetteville, two of wnom were to be chosen by the City Board. Martin said the director of the program is to provide copies of monthly reports to the committee and convene the committee on a quarterly basis to review and evaluate program progress. Martin said that, with assistance from the program director, the committee is to submit minutes of its quarterly meetings to the City's Community Development Director following each quarterly meeting. .15.9 The Mayor said there was no mechanism for choosing the committee members. He said alternatives were to advertise the positions, or the Mayor or someone else could be authorized to make the appointments. • April 4, 1989 ,It was moved by Kelley and seconded by Green that the Mayor be authorized to 116. appoint two people to the committee. Upon roll call, the motion passed, 7-0. • 11 ADVERTISING & PROMOTION BUDGET The Mayor introduced a resolution authorizing approval of the 1989 Advertising and Promotion Fund Budget; and allocation of excess CEC/HMR. funds to the Advertising and Promotion Fund. 116. The Mayor reported the Advertising and Promotion Commission, at its March 20, 116. 1989 meeting, recommended (1) approval of the transfer of $150,000 from surplus CEC/HMR funds from revenues from the Continuing Education Center Tourism Revenue bonds; and (2) approval of the 1989 Advertising and Promotion Fund Budget in the amount of $661,570. Martin pointed out the bulk of those funds will result in a transfer for bond amortization. It was moved by Green, and seconded by Kelley, to approve the resolution. Upon 116. roll call, the motion passed, 7-0. Martin announced that at their last meeting the Commission elected Director Green 116. as their Chairman. RESOLUTION NO. 33-89 APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK NO. DRUG CONTROL GRANT The Mayor introduced a request for approval of an application for a federal grant to fund the second year of the City's Drug Law Enforcement Program, operated by the Fayetteville Police Department. 116. R The Mayor explained the budget for the project period, from October 1, 1989 116. through September 30, was projected to be $198,250. He said the cost to the City would be 25%, or $49,563. He reported that funds were currently budgeted for the period from October through December of 1989. Martin told the Board that in 1988 a federal grant was awarded in the amount of 116. $188,255, to fund the first year of the program He said the State contributed 71(towards the total, and the cost to the City was $31,547, or 17%. •It was moved by Lancaster and seconded by Marinoni, to approve the request. - 116.' Police Chief Watson told the Board that, although the program has been in 116. operation only five months, it has been a great success. He said that 115 ' arrests had been made on drug charges. Watson distributed information on the program to the Directors. Martin expressed appreciation to Chief Watson and his officers for their work on the program 116'. : Upon roll call, the motion passed, 7-0. 116.: A. 1 • L17.1 L17.2 April 4, 1989 PROJECT COORDINATOR CONTRACT The Mayor introduced a resolution authorizing approval of an agreement with Robert W. Franzmeier, Project Coordinator for the City's Wastewater Treatment Plant construction project; and a request for a budget adjustment. The Mayor explained that, under the terms of the Agreement, Franzmeier's current duties as Project Coordinator for the Plant would continue until final plant completion and grant application finalization. Martin said both State and Federal authorities have recommended this action be taken. He said that, in addition, Franzmeier would be responsible for coordinating the City's inflow and infiltration maintenance program. 117.3 Martin explained the agreement provided for a 5% increase over Franzmeier's 1988 salary, or a total annual salary of $41,103. He said the staff recommended approval of a budget adjustment in that amount, to be taken from Unreserved Fund Balance. L17.4 It vas moved by Lancaster and seconded by Green to approve the resolution. L17.5 Director Kelley asked if it was anticipated that this would be a 12 -month contract. City Manager Pennington said that was all the City was anticipating at this point. He said the only reason it would continue beyond 12 months would be if the federal project is not closed out. Pennington pointed out that the $41,103 will cover all services, not just salary. 1 117.6 Upon roll call, the motion passed, 7-0. II/RESOLUTION NO. 34-89 APPEARS ON PAGE OF ORDINANCE AND RESOLUTION BOOK NO. OTHER BUSINESS AERO -TECH CLAIM 117.7 The City Attorney told the Board that Jack Butt, Attorney for Aero -Tech Services, Inc. wished to make a presentation regarding a claim that Aero -Tech (fixed base operator at the Airport) has regarding a contract dispute and operation of the airport. McCord said the basis for the claim arose within the last month, demands were made upon the City, he negotiated several sessions with Butt in an attempt to resolve the dispute, and a tentative settlement was reached but has not been finalized. 117.8 Butt estimated his presentation would take about thirty minutes. The Mayor asked Butt if this was anticipatory of a lawsuit, commenting that, if so, perhaps it should be heard in court rather than at the Board meeting. Butt said it may and that he had tried for the last two weeks to reach a settlement with the City. He said the City breached its contract on February 7 and admitted such breach may have been done on February 9 or 10. He said an audit was "called in" around the second or third week of February and the audit showed the City was in error. He said on February 20 he made a settlement proposal for damages incurred from the breach, a copy of which he said the Board received in the afternoon on April 4. he said he had negotiated with McCord since that time. Butt said he thought the attorneys reached a settlement in principle and agreed to take that settlement back to their clients. He said Aero Tech has accepted 11C April 4, 1989 the settlement but at least.cpart of McCord'srecommendations were apparently 118. turned down by the City Manager or "city staff." Butt said he didn't want to go to court if the issue can be settled, commenting that a court battle would be long and costly and the "ante" would go from tens of thousands of dollars to hundreds of thousands within the next week or two. The Mayor said he was delivered a letter by representatives of Aero Tech at about 4:30 p.m. today and had not yet had an opportunity to read it. He asked if it was a fact that the City had rejected the settlement offer. City Attorney McCord said there was an initial dollar figure requested by Aero Tech which was negotiated to a reduced figure, was discussed with the City Manager last week and, upon meeting with the City Manager this morning, McCord said they wanted to verify that evidence was available that actual damages were incurred.. He said the City Manager stood reauy to recommend up to a maximum settlement amount, subject to verification by the City Manager and the City Attorney that these were actual damages incurred because of actions by the City. 118. 118. Butt said the breach of contract occurred on February 7 when the City sent a 118. notice to Aero Tech saying that its Fixed Base Operator lease was terminated. He said apparently the city's independent and "in camera" audit showed that Aero Tech was several tens of thousands of dollars short in reporting revenues and several hundreds of dollars short in its 2% "override." In answer to a question from the Mayor, Butt said the "in camera" audit was one which was undertaken without input from Aero Tech. - Butt said there was a need for an immediate settlement based upon two reasons. 118. He stated there had been a long-term, chronic demonstration of gross disregard by the City staff for Aero Tech's contractual rights. He said it was time these be aired and resolved and Aero Tech be treated in "normal, business good faith." He said there was an immediate financial crisis with respect to Aero Tech caused by the accumulated results of the City's illegal treatment of Aero Tech under the contract. He said if there was not a settlement tonight, tomorrow or the next day, Aero Tecn s cash flow was such that it may not be able to continue business. Butt said, however, that Aero Tech may be able to remedythe situation with the proposed settlement of $52,000 now. He said, if Aero Tech cannot "meet their creditors" tomorrow or next week, and their bank calls their loans due, which he said their bank was considering, then the losses are the total amount of loans and all the lost profits for the next ten years. Butt said this would easily exceed $1 million. Butt said in March, 1988 Aero Tech extended their lease with the City into a 118.1 second three-year option, and renegotiated the rent. He said it was agreed at that time that a third -party independent appraisal ought to be done, after which there would be a retrospective adjustment of rent back to March of 1988. Butt said in August of 1988 the appraisal report, done by Vance Tuttle, was completed. Butt said, based on that appraisal, Aero Tech was paying $7,500 too much per year. He said Aero Tech was not told about this but, on March 20, 1989, found out "through the grapevine" that SOIL= kind of appraisal was in and, after some difficulty, obtained from the City Administration building a consultant's report, containing an entire evaluation which he said incorporated the appraisal report. Butt said the City owes back rent since March 1988 of $7,500 to Aero Tech. Butt said McCord told him he would verify that figure as soon as he can. In answer to a question from McCord, Butt said that was not the basis for his original claim. .19.1 .19.2 L19.3 April 4, 1989 Butt said Aero Tech is obliged under its lease to keep the airplane hangars in good repair and is entitles to be reimbursed for its expenses. He said they had accomplished this throughout 1988 and had submitted bills for repairs as they have accumulated. He said through 1988 the total of those bills was a little over $3,900 but have not been paid by the City. He said it was not until an audit done at the City's request in February of 1989 that the City's auditors confirmed the City did owe Aero Tech $3,900. Butt said Aero Tech thus far is short $10,000 in rent. Butt said the City, in late 1988, did an audit of Aero Tech's records to see if they were keeping the appropriate records to determine the 2% "override" on services, which Butt said never comes to more than 5% of the lease. Butt said Aero Tech has to pay for a certified, independent audit at the end of each year and said they have done this. Butt said the Airport Manager audited the records and was told by Aero Tech he was auditing the wrong records. He said Aero Tech generates two copies uk its records - one being a "working copy" and the other being copies which go into a computer-generated accounts receivable program, and constitute actual receipts. He said when the Airport Manager was advised he was using the wrong records "he didn't say that mattered, that he would do his own independent audit." Butt said the Airport Manager came up with the calculation that Aero Tech had under-rtrorted some hundreds of thousands of dollars of revenues and, based upon that, were some $2,000 short in their override. Butt said this was not reported to Aero Tech and they were never consulted about the accuracy of the audit or asked for input. He said subsequently Arthur Young and Company was called to verify the audit. He said Aero Tech offered to show them whatever records they needed to see, but Arthur Young said they "knew what records they needed to see" and proceeded to simply compare the mechanic's slips with the recordations done by the Airport Manager andhis assistant, re -tally the numbers, and reached the same result. He said Arthur Young didn't consult with Aero Tech and didn't ask them which records they kept or how they came up with the 2% override. He said none of this was reported to Aero Tech. He said at this time Aero Tech presumed the City was satisfied with its lease. He said this was going on in the Fall of 1988 while the City was withholding rent it owed Aero Tech. Butt said on February 7 Aero Tech received a letter from the City Manager saying their lease was terminatea a,.d they had seven days to leave. He said immediately upon delivery of the letter, all Aero Tech's suppliers, creditors and customers were notified "Aero Tech is gone." Butt said the City had admitted that, prior to delivery of the letter, the Airport Manager made aggressive efforts to contact fuel suppliers and entered tentative contracts with them so that, when Aero Tech left, somebody would be there. L19.4 Butt said two days later they had reviewed the audit, met with City management and told them they had audited the wrong records. He said City management told him they would look into it and a day later said they would pay for another audit by Arthur Young. He said Arthur Young did another audit and three or four weeks later said Aero Tech's records were not out of line and that Aero Tech owed the City about $400. But said Aero Tech says the City owes them $10,000. L19.5 Butt told Mayor Martin that if he told the general public over television that Arkansas Western Gas had exceeded its tariffs and overcharged everybody by $50 per year and had profitted to the tune of millions of dollars, and if he was wrong, he thought Martin would be getting a little bit nervous that this was even going out as hypothetical. The Mayor asked Butt not to bring in the personalities of the Board members or impugn them or their motives or their companies, even hypothetically. April 4, 1989 Butt said "we will never know to an exactitude what Aero Tech's losses are." 120. Butt said student pilots pulled their deposits, gas supptzerb pulled their gas, their $40,000 line of nredit was immediately gone, they lost their pilot, ana they lost a contract with Wal Mart that would have yielded about $50,000 gross profit per year. He said damages were a matter of jury determination. Butt said he made a proposal to the City on March 20 and has been trying for two weeks to settle it in a low key manner. Butt said the Airport Manager didn't inform Aero Tech of the appraisal "he was doing", had failed to do anything to make sure Aero Tech would get paid money it is owed by the City, had made derogatory comments to "certain of Aero Tech's principals about certain other of their principals." Butt said Frederick had tried to create dissension among the owners of Aero Tech. Butt said there was a personality conflict at the Airport between Frederick and Aero Tech. Butt said, regardless of the outcome of the settlement, the problem would be back before the Board "for the next 12 years" unless either rrrderick or Aero Tech is gone. 120. Butt said Aero Tech requests the City provide all persons that it requests a 120. letter stating that its lease is in full force and effect. Butt said McCord agreed to do that. Butt said Aero Tech requests the City appoint an Airport Commission. He said 120. Aero Tech didn't think the Airport Manager, supervised by the Public Works Director, in turn supervised by the City Manager, can "truly understand, deal with, advise and be knowledgeable about the comprehensive problems of a general avaiation commercial airport." Butt said McCord said the City Board wouldn't have any difficulty in pursuing this. Butt said Aero Tech requests the 2% "override" be removed. He said their contract had nine more years remaining, and said in the last four years this comes. to "less Loan 5% of a $100,000 contract per year." Butt said Aero Tech would like this removed to compensate them for the future "to some degree undefinable" losses they have suffered from damage to their business reputation. He said they initially asked for four additional three-year options, and he told McCord his client would agree to one three-year option. Butt said City Manager Pennington has not agreed to this. 120. Butt said Aero Tech demanded $125,000 in cash losses. He said examples of some 120. of those losses were: over $5,000 spent training a pilot who resigned when he was told Aero Tech no longer had the fixed base operation, an airplane costing several hundred thousand dollars has "just set there" because they don't have a pilot to fly it, ana L„ey have been making insurance, overhead and upkeep payments on that plane, two line technicians quit as soon as the rumor was out that they have to retrain line technicians because of the concern that those technicians have for loss of their fob, approximately $4,000 spent to this date on attorney's fees, $4,000 for a private investigator Aero Tech hired to determine "who did what and said what when", they lost $1,200 when Continental Ozark pulled its gas out of their fuel farm as a direct result of the City's notification, they have lost substantial amounts from present and future business customers withdrawing contracts for repair, pilot training and charter air service. Butt said because Aero Tech's sales department was defunct, they believe their estimated gross sales for that period would have been about $10,000. Butt said Aero Tech initially demanded $125,000 but have agreed to accept $52,000. Butt said he was sure McCord will come back to the Board and say "all 120. L21.1 April 4, 1989 we want is reasonable documentation." Butt said he had no reason to expect a reasonable response from City Administration with respect to the Airport. Butt said "until we litigate this before a jury, nobody can tell us what reasonable is." Butt said the City has refused to pay $52,000. L21.2 Butt said there was a minor adjustment in the lease, where it was uncertain as to whether, from now on, the lease would be adjusted yearly on a consumer price index basis. Butt said McCord had agreed that change would be readily made. L21.3 Butt said the reason he pushed the Board to hear this tonight was that Aero Tech lost its customers, its business credibility and its line of credit with its gasoline and parts suppliers on February 8. He said most of that had not been restored. He said a loan at First National Bank of Springdale is past due, is supposed to "roll" annually, and the bank won't "roll" it because this matter is in a state of flux, and cash flow that shows on a balance sheet normally at $80,000 is down to zero." Butt said there was a probability that in the next three weeks Aero Tech would go out of business. He said if Aero Tech went out of business tomorrow, its losses will be over $800,000 in bank loans plus all projected profits. He said Aero Tech has been a very profitable operation. L21.4 Butt said he gave McCord two weeks more than the City gave Aero Tech to leave, but has not been able to negotiate, as McCord is still looking for more documentation. He said it Lhere was not an immediate substantial cash infusion into Aero Tech within the next two to three days, "this is not a $52,000 settlement - this is a $1 million lawsuit plus attorney's fees equal to 10%-20% of that." L21.5 The Mayor asked the City Manager if he had any reaction or response. City Attorney McCord said the City rescinded its termination of Aero Tech's lease within two days after it was issued, when the City became concerned that perhaps the termination should not have been issued. McCord said he and the City Manager find it difficult to believe that that short a termination resulted in the amount of damages that Aero Tech is claiming. McCord said he and the City Manager, however, wanted to give Aero Tech the benefit of the doubt and negotiated on that basis. He said the City Manager stood ready to recommend a substantial financial settlement to hopefully resolve the issue without litigation. McCord said he and Butt agreed to a figure but, after reviewing it with the City Manager, their proposal is to let the City visit with the clients which Aero Tech claims it lost, because of the City's notice, to verify the reason they left Aero Tech was because of the City's action and not because of some other reason. McCord said they would try to expedite that process because they realize the time constraints the financing dictates. He said that was what resulted in the settlement not being presented to the Board now. L21.6 City Manager Pennington said he was prepared to present to the Board a recommendation along the lines described by McCord but was informed by McCord just before the meeting that this was unacceptable to Aero Tech. L21.7 Butt said McCord had his proposal on February 20, that five days ago a tentative settlement had been reached and McCord said he would recommend that to the City Manager. Butt said McCord asked him if he could provide additional documentation, and he told McCord in two days he couldn't supply written depositions. L21.8 Vorsanger asked Butt if the statement in his letter that "they were advised by Dale Frederick in writing that their lease was being terminated" really meant • April 4, 1989 they were advised in writing^by Jim Pennington. a aeButt said the letter terminating the lease was signed by Jim Pennington but delivered by Dale Frederick. Green said if the City had caused the company undue hardship, was there some way the City could assure Aero Tech's clients and creditors that their lease is in effect and negotiations are pending. Butt said that offer was made by McCord and rejected by Aero Tech because they weren't sure it would do any good. Martin said, if the Board agreed it wanted to be responsible for the losses that could be proven, perhaps a cash advance as partial settlement could be given, and some mechanism could be found for settling other differences. Butt said McCord had suggested that perhaps the Board would authorize settlement up to '$52,000, based upon the City verifying to their satisfaction that the losses have actually occurred. Butt said that was rejected because the offer has been in the City's hands for two weeks =1-eady. He said if the City would give that authority to Pennington and McCord, and impose some limitation on them so a prompt resolution can be made, and at the same time advance to Aero Tech rents it will have to pay to the City, hopefully a final settlement can be reached on a dollar amount. McCord clarified that the $52,000 settlement proposal had not been on the table for two weeks but was just arrived at a couple of days ago. He said negotiations had been ongoing ever since the letter went out. 122. 122. 122. 122. • Vorsanger said the Board was being asked to make a hasty decision on something 122. they just received. Butt said he didn't think there was a dearth of information, that it was just that the Board didn't have all'of it. Kelley asked the staff if they materially disagreed with all of the allegations 122.1 which had been made. He said he thought the Board could make a decision if everything which had been presented was, in fact, true. The City Attorney said he thought there was potential "exposure" which would dictate the City consider a settlement. Butt said Aero Tech had authorized him to settle, if the Board would give 122.' Pennington and McCord settlement authority up to $52,000 and give them two business days to verify and evaluate damages, and give Aero Tech a $20,000 advance. He said if no settlement is reached, Aero Tech would owe that amount back to the City. •The Mayor stated the City Attorney had said there was a basis for the Board 122.1 accepting a settlement. He said, barring a lawsuit, the City will never know how liable it is. He said it seemed to him it would be in the City's interest to try to settle the matter in a way to expose the taxpayers as little as possible from improper claims and..yet protect them from claims which could be very serious and much more expensive. Martin moved that the City Attorney and City Manager jointly be authorized to enter settlement negotiations up to $52,458 in as timely a fashion as possible, and that a cash advance (refundable if claims are not to that extent) of $25,000 be made immediately to Aero Tech. The motion was seconded by Kelley. Vorsanger asked if the City owed Aero Tech back rent. Butt said the City owed them $7,500 in rent, $3,900 in hangar repair, less $400 Aero Tech owes as a result of the audit. Vorsanger asked if that would be part of the settlement. McCord said those were minor issues which he said he was confident would be resolved. He said when the lease was renewed, it was agreed that a rate study of operations at the Airport would be undertaken by an independent consultant • 122.! April 4, 1989 L23.1 who would make a recommendation of adjustments, if any, in the various leases at the Airport. He said, as part of that process, the appraisal referred to by Butt was done to be utilized by the consultant in making his recommendations, not to be the basis for any adjustment as explained to him. He said that appraisal was received and forwarded to the consultant, and the consultant study was received recently. He said it indicated that an adjustment should be made in the various leases, that would result in a credit to Aero Tech. He said he was going to have Butt's figures verified by the appropriate staff, after which the adjustment would be made. He said apparently repairs were performed at the Airport by Aero Tech for which Aero Tech is entitled to be paid, and the City has agreed those should be paid, and that the amount due the City would just be a set-off against the amount due to Aero Tech for those repairs. Vorsanger asked how much the city owed Aero Tech. McCord said that was being verified. Vorsanger said maybe the City ought to immediately pay that bill to help Aero Tech on their cash flow problem. McCord said that was the City's intent. L23.2 In answer to a question from Marinoni, it was clarified by the Mayor that his motion did not address the other proposals made by Butt. L23.3 Spivey asked if Aero Tech was prepared to give the City a release of any future liability in exchange for the settlement Butt said "that's the swap" and that Aero Tech would take the risk what with the money it can replace its cash flow and mend its customer relations. L23.4 Butt said he would prefer the staff be given settlement authority on all his proposals, with the exception of the personnel matter. L23.5 Martin said in his opinion the letter to the creditors can go out or not, noting that Butt had indicated he might not want it. He said the question of establishing an Airport LOkmilsslon was under advisement by the Board and would not be made a matter of settlement of this issue. Regarding the 2% override, Martin said he had no feeling for that. McCord said, using 1988 figures, this was estimated to amount to about $48,000 over the remaining eight years under the existing term and the option terms. Butt said Aero Tech has to pay about $2,000 for the independent audit. He said this has been "a real sore spot" because it was the City's right to audit the records that gave rise to the problem in the first place. Butt said Aero Tech doesn't know how much 2% is and doesn't know how much business it has lost. Martin said he recalled that when Aero Tech was granted its first lease, it was a venture capital company and "it was a dirt cheap lease", because Aero Tech claimed they couldn't afford any more than a "bare bones" lease. He said the City wanted some independent verification of their financial status so the citizens weren't subsidizing a profitable enterprise, because Aero Tech was using facilities which were installed at the expense of the taxpayers. He said the audit was a necessary part of the original lease. Butt said "now that we have the benefit of twenty-twenty hindsight, we see that the City has made substantial profits and the profits Aero Tech are making are not so great." He said part of the settlement proposal was to set off 2% - $2,000 or $3,000 per year for the remaining nine years. Butt said Aero Tech would release the City from everything and take their chances from here on. -23.6 Martin re -stated the motion, that the City Attorney and City Manager be authorized in their sole professional discretion to settle losses with Aero Tech up to an amount of $52,458, and that there be an immediate $25,000 revocable cash advance towards the settlement of those losses. Upon roll call, the motion passed, 6-0-1, Lancaster abstaining, stating he could be accused of a conflict of interest because he had a young man who works for Aero Tech. April 4, 1989 Butt said this left unresolved Aero Tech's desires concerning the 2% override 124. and the additional option. He said he presumed if negotiations can be concluded quickly they would come back seeking some address of those issues. Martinsaid he would prefer that the City perhaps pick up the audit, so it did 124. not become the burden of Aero Tech, but he could not deal with the 2% override at this time because he did not have enough information. Butt said he came before the Board having everything settled but the $52,000. He said the Board was providing a mechanism for working out the $52,000 but taking away another "leg" of the settlement. Director Green said his interpretation was the authorization to negotiate for 124. the cash was an effort to help Aero Tech over their immediate cash flow problem. He said it was not a total, final settlement but was an authorization to give some leeway to the negotiations. Butt said he thought the $52,000 was being added to the settlement that was not in question. He said if the $52,000 was now in lieu of all other settlements, he misunderstood. He said Aero Tech would give a release in consideration for: (1) The personnel matter being left with the Board; 124. (2) The Airport Commission matter being left with the Board; 124. (3) An addendum being drafted to the contract with respect to the CPI; 124. (4) The mechanism authorized by the Board to work out the cash 124. settlement; (5) It was contemplated that the 2% override would be waived for the 124. future of the lease; and (6) The matter of one three-year option which hasn't come up 124. Butt said the 2% override and the three-year option were matters of material importance to Aero Tech and were not addressed by Martin's motion. He said those would not be the basis for a full and final release. He said if the City would settle on the 2% override and the three-year option, Aero Tech would give the City a full release. 124. McCord said the City Manager's recommendation was going to be that the override 124. be waived for the remaining eight years, but he was not going to recommend that an additional three-year term be authorized. Martin moved that the 2% override be waived but only in receipt of a full release 124. from any liability, and that there not be a three-year extension of the lease. The motion was seconded by Kelley. Butt said is the Board voted to waive the 2% override and if a settlement can be re=ched within the staff's authority, Aero Tech wnhild waive their request for an additional three-year option. 124. In answer to a question from Spivey about whether there would still be an audit, 124. Butt said if there is no 2% override, there was no compelling reason for it. He said Aero Tech would maintain the records and the City can audit them at their expense. Martin moved that the motion to waive the 2% override be amended to include that 124. the independent audit be excluded but that the City be afforded reasonable access to any and all records it requires at any time. The motion was seconded by Vorsanger. Upon roll call, the motion passed, 5-1-1, Marinoni voting against the motion and Lancaster abstaining. Marinoni said it looked to him like •Aero Tech was rewriting their contract and in effect deleting part of their rent. 125.1 L25.2 April 4, 1989 Upon roll call, the motion, as amended, passed, 5-1-1, Marinoni voting against the motion and Lancaster abstaining. City Manager Pennington said that, in light of comments made by Butt, he requested the City Board go into Executive Session to discuss the personnel matter regarding the Airport Manager. 125.3 The Mayor suggested the Board take up any Other Business first. OTHER BUSINESS COMMENTS FROM WILLIAM GIESE L25.4 Giese commented that a local builder constructing apartments is responsible for construction site trash blowing onto Old Missouri Road and Zion Road. The Mayor said if the City could not get compliance from builders to take care of their waste materials, he thought we needed to consider an ,ordinance be adopted. 125.5 HAY HARVEST BIDS Gary Vaughn, speaking on behalf of OMI, said he wished to discuss the issue of harvesting hay on the City's sludge management site. 125.6 Vaughn said four bids had been received from local farmers to harvest the hay. He said three bidders bid $10 per ton, and one bid $12.50 per ton. He said he also received a letter from Arnold Christie asking for consideration of hiring someone to do custom bailing, which would then be stored and marketed by On fn" the City. Vaughn said he also considered the option of OMI purchasing equipment, harvesting the hay and marketing it. Vaughn asked for direction from the Board. 125.7 Green asked how other options could be considered after the bidding process had already been completed. Spivey commented that Vaughn's questions should have come before the Board prior to going through the bidding process. 125.8 Vorsanger commented that bids were sent out in good faith and he moved the bid be awarded to the highest bidder. The motion was seconded by Kelley. 125.9 A man in the audience addressed the Board, stating he had submitted one of the bids. He said he had a large herd of cattle and would like some hay now. He said for the Board to award the bid to an "outside man" and not to a farmer was not the right thing to do. 125.10 Quentin Skelton addressed the Board, stating that he and two other farmers harvested the hay on the site last year. He said it took 25 days working dawn to dark to harvest the hay and they only got about one-quarter the amount of hay that will be able to be harvested this year. He said he didn't believe one man could do the job. 125.11 125.12 Director Marinoni said he would be abstaining from the vote because he had submitted one of the bids. Ron Skelton addressed the Board, stating when requests for bids were given out, the bidders were told that money was not the most important aspect of the bid, but it was the ability to get the hay up in a timely manner, and have the fields available for sludge. April 4, 1989 ^k Gary Vaughn said the price paid for the hay last°year was more than either bid 126.1 received this year. He said he was hoping not to use price as a total determination, but didn't think anybody ever said price wouldn't be considered. He said the proposal read that it would be definitely part of it, that we would have the right to review whether or not they had enough equipment to get the job done. Kelley said there was a statement in OMI's recommendation that the high bidder did have adequate equipment to do the job. Kelley said he didn't think the City had any other choice but to accept the high bid. Lancaster asked if OMI would oversee the sludge site operations. He asked if there was a penalty clause in the event the hay remains in the field and doesn't get sold. Vaughn said OMI was responsible for management of the site, sludge application and maintaining of equipment. He said the contract will require either a cash or a performance bond, in the event the bidder does not perform. He said the bond would allow OMI to hire a custom bailer. 126.; 126.: Green said he didn't see why the Board needed to award the contract now. He said 126.4 he thought the issue was whether the City sticks to its bidding procedures or authorizes a new direction. He said if the City sticks to its bidding procedures a recommendation should come before the Board on the next agenda. Vorsanger said this was discussed earlier in the day when the Board toured the 126.`. sludge site. He said it was pointed out that arrangement have to be made now to be ready to cut and the unsuccessful bidders have to make arrangements to fertilize their own land and finding other sources fpr hay. He said he thought the City should follow its bidding procedures. He said the option's presented today should have been presented before' the bidding process started. He recommended the bid be awarded to the highest bidder and plans be made in the future to explore the options. Vaughn told the Board an evaluation was done over a year ago and these options 126.E were presented to the former Public Works Director. 4 Vaughn said the highest bidder was J. B. Hunt. 126.' Upon roll call, the motion passed 5-0-2, Directors Marinoni and Spivey 126.1 abstaining. Spivey explained he was abstaining because of a possible conflict. INCINERATOR DISENGAGEMENT/CITIZEN COMMENT Fran Alexander addressed the Board, stating that yesterday she read in the paper 126.' that the Board would have on the consent agenda a budget adjustment in the amount of $155,520, to pay accrued expenses of engineers and lawyers in 1989 for the incinerator disengagement project. She said she found it disturbing that close to $350,000 had been spent without a public itemization of what these funds are purchasing. She said there had been a blackout of information regarding the disengagement and the chronology of events taking place over the last year. She said the closed method of handling this information was wrong and perhaps more risky to the citizens in the long term, than running the issue openly. She requested the City publish a full report on the disengagement and an itemization of what the fees cover. also requested the City answer its mail on the issue in writing. L27.1 April 4, 1989 FILTER SCHEDULE/CITIZEN REQUEST Fran Alexander said she made many verbal telephone requests in 1988 for a schedule of filter changes on vents which go to the treatment plant. She said in January of 1989 she came before the Board and requested (1) the schedule of filter changes; (2) an analysis of gas emitted through the filters and vents; and (3) a notification plan in the case of an emergency spill at the plant. She said about a month later she made her request to Public Works Director Batie in writing. She said several weeks later she called Gary Vaughn of OMI who said he had discussed the letter with Batie and was working on answers. Alexander said she wondered if it was going to take an ordinance to get an answer in writing. 127.2 The Mayor asked the staff to please follow up on this and let the Board know the status at the next agenda meeting. EXECUTIVE SESSION 127.3 The Mayor said the City Manager had requested the Board meet in executive session concerning the employment of the Airport Manager. Martin moved the Board go into executive session to consider the employment of the Airport Manager. Upon roll call, the motion passed, 7-0. 127.4 The Mayor said the Board would reconvene the meeting following the executive session to discuss their actions. The Board met with the City Manager in executive session from 11:25 p.m. until 12:15 a.m. 127.5 The meeting was reconvened. The Mayor asked the City Manager to report on the session. 127.6 Pennington reported he and the Board discussed the situation of the Airport and he made recommendations for decisions to be made regarding the Airport. He said he had spent a considerable amount of time having the Airport operations investigated by a member of the Police Department to determine whether or not any illegal activities had taken place regarding the Airport Manager. He said information he has received and reviewed indicates there has been absolutely no illegal activity on Dale Frederick's part. He said this meant, in effect, that Ftederick would not be dismissed. He said the City would make every effort possible to strengthen the management at the Airport, to improve the communications between the Airport, Aero Tech, the station management of the companies at the Airport, those renting hangar space, and communications back to the City Manager's office. ADJOURNMENT 127.7 The meeting adjourned at 12:20 a.m.