HomeMy WebLinkAbout1992-07-01 MinutesIiv
SPECIAL MEETING OF THE CITY BOARD OF DIRECTORS
A special meeting of the Fayetteville City Board of Directors was
held on July 1, 1992 at 8:30 a.m. in Room 326 of the City
Administration Building at 113 West Mountain Street, Fayetteville,
Arkansas.
PRESENT: Mayor Fred Vorsanger; Assistant Mayor Mike Green;
Directors Dan Coody, Shell Spivey, Ann Henry and
Bob Blackston; City Manager. Scott Linebaugh; City
Attorney Jerry Rose; Director of Public Works Kevin
Crosson; Director or Administrative Services Ben
Mayes; and City Clerk Sherry Thomas; members of
staff, press, and audience.
ABSENT: Director Julie Nash.
CALL TO ORDER
Mayor Vorsanger called the meeting to order. He explained the
purpose of the special meeting was to address a proposed
alternative method for financing the 36" water line.
Director Coody asked whether they would be voting on this matter.
Mayor Vorsanger explained they could vote since this was a special
board meeting.
36" WATERLINE FINANCING
City Manager Scott Linebaugh addressed the Board explaining this
was basically the City's last chance to approve the funding for the
36" water line in order to have the line completed and working by
the Summer of '93. The 36" water line has been discussed in detail
by Staff and the Board of Directors. The importance of the line is
not in dispute. The funds for this project are being held up by
Arvest awaiting a decision on the appeal to the Supreme Court of
the sales tax lawsuit.
Linebaugh stated Staff has worked diligently to.,.establish an
alternative for release of the' construction funds: Arvest has
discontinued their efforts to assist the City in this endeavor. He
reported the Llama Company has proposed three alternative methods
for financing the 36" water line.
Linebaugh reported Staff recommends the City proceed with the 36"
water line by way of refunding the old water/sewer bond issue.
This method would allow for a present value savings of $219,000,
which is greater than the cost of the $10 million bond issue that
was previously discussed. In°•the event that the Supreme Court
would rule in favor of the City of Fayetteville, those funds can be
turned over to the sewage rehab program where there was a bond
issue planned for later in 1992. -N
az
July 1, 1992
He presented a resolution to the Board for their consideration
which instructs Staff to proceed with the 36" water line, and
proceed with bond financing. The resolution states the City will
incur costs (i.e. engineering/legal services) between now and when
an ordinance is presented to the Board on the bond financing.
He reviewed a memo dated April 20, 1992, from City Engineer Don
Bunn, which sets out the City's need for the 36" water line, and
the problems experienced in 1991 and expected in 1992 and 1993 due
to the current inadequate system. Linebaugh further reported that
the engineer's accelerated schedule for construction of this
portion of the 36" water line (Part A) is 9 months, although it
would normally take one year. The engineers believe that the
projected completion date of July 1, 1993 can be met as long as the
winter of '92 is normal and not harsh. In addition, they are
accounting for six weeks to complete the design and obtain delivery
on the pipe. This phase of the project would run the water line
down to the North portion of Fayetteville, connecting it into the
existing line, in order to provide enough water to avoid mandatory
water rationing and cut-backs during the summers.
David Hausam, representative from Llama, addressed the Board with
a presentation on the recommendation for funding the 36" water
line. He introduced Bob Coswalk, Vice -President of Llama, who was
present to answer questions. He explained his firm was consulted
to develop a scenario that would not involve a rate increase on
utilities, or any other increased cost to the citizens of
Fayetteville. They reviewed a rate study report done by Black &
Veatch several years ago which contained (1) a $7 million bond
issue program planned for this year, (2) an additional $1.9 million
bond issue for 1994, and (3) paying off the old bond issue from
1985 which is at higher interest rates.
Hausam began the presentation by posing a number of questions to
the Board regarding the need for the 36" water line. Does the City
have sufficient water for the next two summers? Is rationing or
another alternative possible? Will a 36" water line resolve the
problem in terms of the Fayetteville water supply? Does the City
have adequate cash to fund the 36" water line until the resolution
of the sales tax appeal?
Hausam further reported the alternatives considered as follows:
1) Bond participation note - a note at today's interest
rates for a year, followed by a bond issue if necessary
to cover the cost. This option was rejected since it is
a temporary solution, due to interest rate risks and the
additional costs associated with this method.
2) Leave the existing debt outstanding on the 1985 issue,
with a new money issue to provide the same amount of
construction dollars to complete the project. This
July 1, 1992
option was also rejected since a $219,000 present value
savings could be achieved by refunding the old bond
issue.
Hausam stated they are recommending the City refund the old 1985
bond issue, with a 8.96% interest rate, and issue new money for the
construction of the water line or the sewer rehab program. This
option gives the Board flexibility to make certain decisions, such
as utilizing the funds temporarily for the 36" water line until the
sales tax issue is resolved. Any funds expended on the water line
can be reimbursed out of the sales tax funds when released and
deposited back into the construction fund to be utilized on the
sewer rehab program, which is already budgeted for 1992.
Hausam stated Llama's attempt was to structure a plan that would
provide several things such as:
1) Flexibility of the Board of Directors to address the
issues most pressing;
2) Reduce the cost to the City in terms of not having two
bond issues;
3) Structure of a temporary bond issue to take care of the
36" water line, for eventual pay off through the sales
tax funds when released; followed by another. bond issue
to fund sewer rehab which provides an either/or option;
4) Structured in such a manner that it would be kept
bank qualified.
Hausam explained the basic structure being proposed is to have
"Series A" bonds issued which would pay off the 1985 refunding bond
issue. "Series B" bonds would follow to pay for the water line.
If a resolution in the sales tax issue favorable to the City would
occur, the City would pay off the "Series B" bonds,and turn around
and do a "transparent" switch over` to "Series C" waste water bonds.
This method would not affect the -bond holders;'the interest rate
would be locked in; and cost of.issuance would be reduced.
Mayor Vorsanger asked Hausam for his opinion whether the banks
would buy these bonds. He responded although he could not answer
this question in the affirmative-until,some marketing of the bonds
has occurred, but from the standpoint thatbbanks.are generally more
sophisticated. investors, he .feels these bonds .would not be
adversely received by the banks..a.x.
In addition, Hausam noted utility revenue bonds have been through
numerous tests and are considered a "cleaner" bbnd.than sales tax
bonds.
July 1, 1992
In response to Mayor Vorsanger, Hausam stated the average interest
rate they were projecting is 6.67%. There is a 2% premium that
will have to be paid if the old bonds are called early. Even with
this cost figured into the calculations, there is still a savings
of $219,000 over the issues.
Director Coody stated the current water/sewer rates are already
accounting for sewer rehab, and he stated his understanding was
that Llama would request that EPA and/or DPC&E permit the City to
use sewer rehab funds for the 36" water line.
Hausam responded that from their standpoint, it would be advisable
for the City to explain their program to DPC&E and reassure them
that the sewer rehab program is not being forgotten.
Director of Public Works Kevin Crosson explained the City received
an Administrative Order in 1989 which outlined a series of
activities that they were required to take on the sewer system.
This included a pump station, monitoring telemetry systems,
rehabilitation of lift stations, manhole flow monitoring, and a
series of projects on the Illinois River watershed collection
system. The City is on schedule and/or has completed all the work
in those specific areas, and currently is in total compliance with
the order. The largest, broadest portion of the administrative
order was that by 1994, the City will have to eliminate all
infiltration and inflow. Since 1989, the City has presented their
sewer rehabilitation program to DPC&E and EPA and provides progress
updates on a quarterly basis on the specific programs which address
the infiltration/in-flow problems. However, Crosson explained if
the City discontinues spending funds toward the program they
outlined for DPC&E and EPA, they will then be out of compliance
with the Administrative Order and will be subject to $10,000 per
day penalties.
City Manager Linebaugh stated that this bond issue will do nothing
to slow down the sewer rehab program since they are beginning this
bond issue earlier than necessary to handle the program. He
further stated that they anticipate that the sales tax funds will
be released by January 1993, so they can continue on with the sewer
rehab program without missing a beat. Secondly, he felt assured
the raises built into the Water rates by Black & Veatch were built
in to handle an upcoming $7 million bond issue.
Crosson commented that the sewer rehabilitation program is the
City's number one priority in terms of not letting the project
drop, and the proposed funding plan for the 36" water line assures
this.
Director of Administrative Services Ben Mayes verified his
department has performed a cash flow projection of the needs of the
sewer rehabilitation program.
July 1, 1992
Kevin Crosson further explained that by the end of 1992, the City
will commit approximately $2.5 million to sewer rehabilitation.
The cash flow projection reflected that the City's water and sewer
fund will carry the sewer rehabilitation through the end of 1992.
Director Coody stated that it was his understanding that Llama
would take a "go slow" approach on this, providing weekly progress
reports, and wouldn't proceed on this bond issue option without a
proper written. legal opinion.
Hausam responded that Llama has been working closely with Staff;
however, if the City Board desires to receive updates directly from
Llama on a regular basis, that can be provided. He further stated
that bonds would not be sold without a "clean" legal opinion, and
that is necessary before investors will become involved.
In response to Director Henry's question whether Llama has received
such a "clean" legal opinion, Hausam stated Llama has consulted
with a firm in Little Rock and described the basic structure of the
bond issue plan, andthey have agreed with the process. The City
has a contract with Brown & Wood out of New York, who bid ron the
services for bond issues, and have an additional 3 years to run.
There was some concern that Brown •& Wood may not want to be
involved; however, upon Staff contacting them, Brown & Wood has
indicated that they do want to be involved. It is his
understanding from talking with Staff and City Attorney Rose, that
Brown & Wood has discussed this particular structure and indicated
that they have no problem with it.
City Attorney Rose stated Brown & Wood has not given their final
opinion; however; it has been considered and preliminarily, they
see no problem with the proposed bond issue structure.
Hausam stated they are current1y_•at a point of limbo.until the City
Board gives their support for proceeding with the'36" water line
project. Once this is done, theibond counsel can begin their legal
research, trust indenture, escrow agreements, and the preliminary
offer and official statement can, be prepared. Hausam projected
that if they could start the process today, by the end of August or,
first of September, the money could be obtained.,;
/ ; i u
Director Henry stated the question seems to be;.whether the City can
.re -market the old bonds and get a•lower4nterest rate for a long
term investment in City infrastructure..wIf successful, they could
proceed with the 36" water line. However,'until the -first part of
September, the City will not know whether. they will have the money
to proceed.
: " I '`meq
With respect to a timetable, .Hausam responded to Director Henry
that the bonds would be marketed around the end of July and would.
be immediately followed by a pricing meeting. There would be a
market period of 2-3 days in which;theactualroffen would be made
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July 1, 1992
to potential customers followed by a return to the City Board where
the bond ordinance would be presented for adoption. Upon the
ordinance's passage, it would proceed to the EPA for approval, and
following a 30 day referendum period, the bond issue is official.
It is projected that they can be on the market and come back to the
Board with EPA approval by the 27th of July; thirty days later, or
roughly August 31st, the bond issue would be official. At this
time, everything hinges on the bond counsel. If they can perform
a lot of work quickly, this process could conclude sooner. He
reiterated that bonds will not be issued without a "clean" opinion
from bond counsel.
Director Coody stated this plan seems to be predicated on the fact
that the City may win the sales tax lawsuit, and he questioned the
procedure if the City were to lose.
Hausam responded that the bottom line is that the City has two
projects that must be done - the sewer rehabilitation and 36" water
line. In 1990, the voters approved the major portion of the water
line funding from sales tax to avoid a utility rate increase.
Therefore, in the event that the Supreme Court would overturn the
decision on the sales tax issue, the City has sufficient funds to
pay off the $33 million issue. The worst scenario - if the sales
tax collection is stopped, the City pays off their bonds, and they
are back to square one as to how the sewer rehabilitation and 36"
water line projects would be funded. In that event and at that
point in time, the City would be faced with either funding these
projects from sales tax, requiring another election process, or
fund the projects through an increase in utility rates.
Hausam further reported the initial proposal presented to the
citizens of Fayetteville in 1990 was that $11 million from the
sales tax would go to funding of the 36" water line with the
remainder coming from cash, either from other sales tax revenues or
other utility revenues. He stated the City is attempting to do a
"balancing act" trying to get both the sewer rehab and 36" water
line projects accomplished. Llama is trying to give the City a
method whereby they can accomplish both projects at the least cost
to the citizens of Fayetteville. Their proposal does not require
the City to look at a rate increase unless the City would lose the
sales tax lawsuit.
Hausam stated that with a bond issue of $7 million, plus the
existing debt service, the rate study indicated the total debt
service would be approximately $1.2 million. On the proposed bond
issue, they are coming in with an average of $875,000 debt service,
which allows approximately $300,000 leeway in the rates that could
be utilized to do a small issue for a completion project.
Director Green expressed his concern with the actual construction
phase of the 36" water line and when it is projected the City would
begin receiving water through the new 36" water line. He feared
July 1, 1992
they may go through this process, in order to achieve their target
of completion by the summer of 1993, and if they would miss the
target date for completion and the peak period for water
consumption passed, all of these efforts would be for naught, and
they will still be in store for severe water rationing.
City Manager Linebaugh reiterated his previous discussion regarding
the construction schedule for the 36" water line. Staff believes
this is really the last opportunity for the City Board to gives its
"go ahead" in order to meet the July 1, 1993 deadline. This
projected schedule would be contingent upon a normal winter, as it
will take a full nine months to complete the construction of the
water line. In addition, it takes six months to get delivery of
the pipe, etc.
Hausam pointed out that at this time, interest rates are the most
attractive they have been since 1972. Whether the money is spent
on the water line or on sewer rehabilitation, the City is still in
a good position of locking in a very attractive rate which will
benefit the utility rate payers for the next twenty years.
In response to Mayor Vorsanger's question, City Manager Linebaugh
explained that initial plans were to recommend a $7 million bond
issue, followed by a $1.9 million issue. The only difference is
they are proceeding earlier than originally planned. In addition,
it would take some capital improvement funds to pay back monies
used on the 36" line. This allows the remaining funds to be used
for sewer rehabilitation and other planned water and sewer
projects. The water and sewer rate study approved in 1990
recommended these two revenue bond issues, and they are built into
the rate structure.
•
Crosson explained while the water and sewer rate••study of 1990
recommended a new money issue of $7 million, Llama is recommending
that $3.5 million of the $7 million be used to pay off the old bond
issue. Therefore, the remaining funds for construction for the 36"
water line project or the sewer rehabilitation is in the vicinity
of $6,250,000, plus interest earnings.
Director Spivey asked Staff how many wholesale customers there are
and others that the City supplies water to, and whether they are
under contract. Crosson responded they supply water to their
growth areas which is the unincorporated County portion, the Cities
of Greenland and Farmington, on an individual basis.,sjust like the
residents of Fayetteville. The City has a wholesale'contract with
the City of Elkins, the Water Association of Mt._Olive, RDA - the
Rural Water Authority, and the City of West Fork.
•
Director Spivey stated that he assumed under, the wholesale
contracts, the City has guaranteed�a-certain amount of water. He
asked whether these users were utilizing more than,is allowed under
the contracts? 4
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July 1, 1992
City Manager Linebaugh responded some of the wholesale contracts
are recent and right on line; however, the oldest contract the City
is involved with, which is also included in the lawsuit, is
considerably above their contract limit.
Director Spivey asked the worst case scenario be considered -
whereby they experience a terrible draught like in the early 1980's
and a rationing program would be instituted. He asked how would
this affect the outlying areas of Greenland and West Fork and the
wholesale contracts?
Crosson responded that peak usages come from the City of
Fayetteville residents, and there is not much fluctuation from the
wholesale customers or outlying areas.
Don Bunn, City Engineer, stated last year during the midst of
Fayetteville's water shortage and rationing period, 66% of the peak
demands came from the City of Fayetteville, and about 30% came from
the growth area, leaving less than 5% of the peak demands that come
from the wholesale water users.
Crosson reported for this summer, they anticipate having to sit
down with each of their wholesale customers, the City of Greenland,
and the City of Farmington and work out the same water management
program that will be implemented in the City of Fayetteville. He
further stated the new contracts with RDA and the City of Elkins
contain language which addresses a draught situation.
City Manager Linebaugh reported the language Kevin Crosson refers
to is basically that these wholesale customers and outlying areas
are secondary to the City of Fayetteville. In an extreme situation
where the City of Fayetteville cannot get water and rationing
doesn't appear to be working, they would have the option to either
cut-off these customers or cut-back on businesses. Linebaugh
further reported that the voluntary rationing programs that the
City has implemented the last two years have been disastrous and
totally ineffective.
Director Henry stated the same language applies to the business
contracts whereby residential customers are preferred over
businesses.
Director Spivey stated considering the City's track record, they
will probably be sued over this bond issue, too. He voiced his
concern that if the appeal filed by Mr. Lisle is unsuccessful, then
the City has done all of this effectively for nothing. Then the
City will probably end up in another lawsuit. If the worst case
scenario would happen, the City of Fayetteville will be putting all
of these communities in jeopardy. For these reasons, this is a
tough decision to make right now - do they take the cautious, more
conservative approach and don't put the community in jeopardy for
what may never happen?
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July 1, 1992
City Manager Linebaugh stated either way, the City could face a
potential lawsuit --either by the same group that files lawsuits on
everything else or by businesses, such as Tysons or Campbell Soup,
when they are cut back and lose profits.
Director Henry asked if all Board members were in agreement that it
is possible that the City could run short of water during peak
demand period in the next 18 months and is rationing an acceptable
alternative?
Director Green responded that the magnitude of rationing determines
whether it is acceptable. Watering his lawn on odd days is all
right with him; however, if he was -told -he could not water his lawn
at all, wash his car, and had to minimize his household's use of
water, then it becomes a different issue altogether.
Director Blackston stated rationing seems to work in cities that
have to ration on a regular basis, but he can't see it as being
effective to enter into a strict rationing program in 1993 because
people have to get a mind set toward this type of restriction. He
believes it would be ineffective at the timewhen the City needed
it the most.
Director Green stated his opinion that rationing is neither
acceptable nor feasible for the.City.of Fayetteville. There is no
effective method to enforce mandatory rationing, and believes it
would only help 20% to 30%, when a 60% reduction would be required.
Mayor Vorsanger stated his opinion that rationing has more
implications than with watering lawns and washing cars and is not
an alternative because half of the -citizens will: be concerned that
the City had an opportunity to settle the problem and didn't do it.
3. ,
Director Coody reiterated his previous comments that•rationing may
be an acceptable alternative under certain circumstances. He
stated if they experience- a cold .winter, if /the construction
contract isn't met exactly on schedule, if the City doesn't lose
the $33 million lawsuit, and if the;City.,doesn't"get sued on this
particular situation, the City may be'°in the same situation no
matter what they do. Therefore, he,.considers Director Henry's
question moot. #
Director Henry responded at ,the point any of -these situations
occur, at least the City will have done.all they could to avoid
them.
Director Coody stated they all agree, the, City needs to do
everything possible to avoid ,rationing, tbut'r there are no
guarantees, and there may be situations when they cannot avoid
rationing. He stressed the importance''of'water, conservation
measures and stated if the City had amended their\codes and adopted
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July 1, 1992
certain water conservation measures in the past, they wouldn't be
in this situation today.
Director Henry stated it will be hard to convince the citizens,
when they have a water supply but it simply cannot get to them,
that they should be pleased with a rationing program.
In response to Director Coody's suggestion that promoting
conservation would be received better than mandatory rationing,
City Manager Linebaugh responded this issue has been addressed
before, and the problem is that conservation will not save enough
water in order to keep the City out of the problems they face.
They have an engineering study that reflects conservation brings
approximately a 20% savings, and the City needs a 60% savings
during peak periods.
Director Coody responded that he's not saying by promoting
conservation it will achieve all of their goals; however, they need
to promote conservation because it is the right thing to do.
Director Henry stated her point was that it appears there is a 4 to
2 split among the Board of Directors that rationing is not an
acceptable alternative. Therefore, would the new 36" water line
solve the problem? And if so, does the City have adequate cash to
fund the cost until the sales tax issue is resolved? The answer to
those questions brings them back to the issue at hand and the
various funding alternatives.
Director Blackston voiced his support for the proposed bond issue,
stating he doesn't see any alternatives except to run the risk of
not having an adequate amount of water. Weighed against the
alternative of a bond issue, which will cost money and possibly
cause a lawsuit, he believes the bond issue to be the lesser of two
evils.
Director Henry stated she doesn't disagree with Director Coody that
they should promote conservation measures; however, that is not
what they are considering.
Director Coody stated today seems like an appropriate time to begin
talking about conservation measures.
Mayor Vorsanger announced the engineer for the 36" water line
project was present to answer any questions, and he would take
public comments at this time.
Jerry VanHoose, engineer with McGoodwin, Williams & Yates,
addressed the Board stating presently the entire 36" water line
project is structured in one contract which would provide one
contractor. He reported there is a portion of the project which
could be separated out and wouldn't adversely affect the job and
will help the schedule. That section is the line which runs from
July 1, 1992
Hwy. 71B east along Joyce Street to Hwy. 264 where they will tie
into the present pipeline. He stated they plan to propose to Staff
this be separated into another contract, which may or may not
provide two contractors on the project, but .potentially will give
them more crews on the project.
VanHoose reported the proposed schedule was structured by
questioning the contractors and suppliers and gives the minimum
time frames they could follow without adversely affecting the cost
of the job. In addition, even though the timing appears to be a
month later than is set out, VanHoose stated this is not a real
problem because a contract would be awarded as soon as the
referendum period was over. The City would not need the funding
immediately because it takes some time to approve a pipe design and
for manufacturing and delivery to the project at which time funds
would be needed.
VanHoose pointed out when the City cannot deliver peak day demands
for water to their citizens, they verge on a serious health hazard.
He explained when the City cannot provide enough water, and when
people continue to use it.,' the system begins to depressure, the
reverse takes place and water flows into pipelines causing a
serious health hazard.
With respect to water rationing, VanHoose stated cities in Arkansas
are not typical cities across this country`when studies are done
regarding water rationing.,* Cities in Northwest Arkansas use
considerably more water per;capita,than most other typical cities
in the country. Our whole'economy-is based'onfindustry using very
large quantities of water.' ,By putting water rationing into effect,
you not only reduce the ,amount of water :people can use, you're
drastically reducing potential income.
a j
VanHoose further responded to concerns about the effects that
adverse weather would haVe.,oh this. -type of construction, stating
if any kind of construction can sustain inclement weather, pipeline
construction can. Only if it is pouring rain or intensely cold so
equipment won't operate and crews can't function, would inclement
weather effect the progress of this project.-
' I 4 [
Director Coody asked for clarification°of'how much leakage would
occur in the event of water infiltration-. VanHoose responded that
the City's unaccounted water loss is very good especially taking
into account the age of the existing system. This is something the
Public Works Department constantly monitors and attempts to fix
leaks, but this method is not cost effective until the leaks are
big.
Kevin Crosson stated the City has an ongoing leak detection
program which detects leaks on a severity level basis. However,
there are probably just as many leaks from service lines which are
undetected.
July 1, 1992
VanHoose explained when this pipeline was originally constructed in
the early 70's, the City acquired adequate permanent right-of-way
to build another pipeline along most of the route. The City's land
acquisition staff has been working for 6-8 months acquiring and
purchasing additional temporary rights-of-way for construction
activity to take place. Generally, temporary construction
easements are not perpetual, usually good for one year, and this is
an issue to consider without any further delays.
John Lisle, attorney at law representing the plaintiff in the sales
tax bond lawsuit, addressed the Board stating that in spite of
comments made, he has no vendetta against the City of Fayetteville.
He gave his personal observation of the situation and stated first,
the Board needs to consider what is in the best interest of the
City, and second, is it legal. He stated it looks like it is in
the best interest of the City, and the need for both uses of this
money has been well established. He further sees no reason why
this action is not legal. Mr. Lisle assured the Board he has no
intention of filing a lawsuit. This issue has an entirely
different fact situation than the sales tax lawsuit raised in 1988,
that he has been involved in. There are different Board members
involved. Therefore, to worry about lawsuits and make that a major
factor when there is a problem that needs a solution is not putting
priorities in the right order. He further stated economically, the
proposed bond issue funding option is a good decision.
Director Spivey responded to John Lisle stating he wasn't surprised
by his support for the new proposed bond issue because basically if
he ends up losing the lawsuit and the City doesn't build the water
line and experiences a terrible draught, this would completely let
him off the hook.
Tiny Hamilton, citizen of Fayetteville, addressed the Board stating
that the water rate structure seems to indicate that the users of
the most water consumption could be construed as being rewarded by
lesser rates after so many thousands of gallons, he suggested some
thought be given to the point those who conserve water would be
given a break in their water bills. He further addressed the issue
of the 36" water line, questioning whether the City may need
storage capacity before they increase the amount of water.
VanHoose responded to Mr. Hamilton, stating water storage is the
second phase of the 36" water line; however, to get water to
storage, the pipeline needs to be in place first. He explained the
pipeline would be extended onto the storage site in the southwest
part of Fayetteville, putting the water in the portion of the city
where it is used in large water -using industries.
Robert Reus, citizen of Fayetteville, addressed the Board stating
that it was his understanding that the City had 17 million gallons
at the peak time last year. A normal average usage is 12 million.
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July 1, 1992
He asked whether the City is limited by storage capacity or by the
actual delivery capacity of the line?
Mr. VanHoose responded the pipeline has a capacity of approximately
16 million gallon per day which means that the pipeline is being
operated in an excess capacity. Last year the City had a peak day
of 17 million gallons, last year was not an unusual drought, like
in 1954, 1963, or 1980. VanHoose stated he doesn't believe 17
million gallon per day is the potential peak for Fayetteville, but
in a severe drought situation, there is a potential for a 20 to 22
million gallon per day requirement.
Director Green stated last year the City was using approximately 2
million gallons per day out•of their storage capacity. A new 4
million gallon storage tank is only going to give us two additional
days of operation, and would not be sufficient. Therefore, in
further response to Mr. Reps' question, more storage would help,
but only for a day or two.
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Mr. VanHoose stated basically storage is designed to provide peak
hour needs to give maintenance time for pipeline repair, and to
provide additional water during, fire protection times while
allowing industries to operate on a normal time frame.
Director Henry stated that,Fire Chief Mickey Jackson reported last
year that the City's fire protection was -;in danger during these
times especially those sites on hills.
Director Blackston explained when they refer to a drought, they
aren't talking about a couple days, but rather weeks and months of
very little or no rain. It is uncertain how they would cope with
the current water line system under these conditions. Therefore,
they need to look beyond short periods of drought.
Director Spivey addressed John 'Lisle's. previous statements,
suggesting the best alternative to the current situation would be
for the plaintiffs to dismiss this lawsuit, and they wouldn't have
to be going through this. Spivey stated he appreciates Mr. Lisle's
.statement that he had no ,intention of suing. ythe City over this
proposed bond issue; however,' there are people and attorneys out
there who would find a basis to file a lawsuit. In addition,
Spivey stated the second best alternative would be if Arvest would
release the sales tax funds, but they don't -`seemed to be prompted
to do so. Therefore, the third best alternative is the proposed
bond issue funding for the 36" water line.
City Attorney Rose read the resolution.
Blackston, seconded by Henry, made a motion to adopt the
resolution.
July 1, 1992
Upon roll call, the resolution passed by a vote of 6 to 0.
RESOLUTION 97A-92 AS RECORDED IN THE CITY CLERK'S OFFICE
ADJOURNMENT
The Special Board Meeting adjourned at 9:55 a.m.
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