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HomeMy WebLinkAbout1992-09-15 Minutes1 MINUTES OF A MEETING OF THE CITY BOARD OF DIRECTORS A regular meeting of the Fayetteville City Board of Directors was held on Tuesday, September 15, 1992 at 7:30 p.m. in the Directors' Room of the City Administration Building at 113 West Mountain Street, Fayetteville, Arkansas. PRESENT: Mayor Fred Vorsanger; Assistant Mayor Mike Green; Directors Ann Henry, Shell Spivey, Bob Blackston and Dan Coody; City Manager Scott Linebaugh; City Attorney Jerry Rose; Acting City Clerk Gaylene Bunch; Director of Public Works Kevin Crosson; Director of Administrative Services Ben Mayes; Director of Planning Alett Little; members of Staff, press and audience. ABSENT: CALL TO ORDER Director Julie Nash and City Clerk Sherry Thomas. The meeting was called to order by the Mayor, with six Directors present. The Mayor asked those present to stand and recite the Pledge of Allegiance, and then asked that a brief moment of respectful silence be observed. Mayor Vorsanger reported that City Clerk Sherry Thomas, although not critically injured, wasrecovering from•.a serious automobile accident. In Sherry's absence,` Gaylene Bunch was serving as Acting' City Clerk for the Board meeting. z. Mayor Vorsanger recognized and welcomed the presence of Dr. Roy Reed's "News Reporting II"class from the University of Arkansas at the meeting. ` f The Mayor welcomed comments.onr any- item•ion the Agenda. He explained that in order to,.allow equal;attention to all items on the Agenda, the Board requests that comments be limited to 3 minutes per person per item, and ,a spokesperson be elected for comments made on the same issue. —, REPORT TO THE PUBLIC A report to the public and•Board is.presented by the City Manager at the second Board meeting of each month.:, This report, for the month of August, includes financial information, an update on staff activities, and items of general interest. ,Linebaugh introduced a presentation on the City's Pilot Curbside Recycling Program, to be made by Director of Public.Works Kevin Crosson and Solid Waste Superintendent Greg Fields: He further announced that there would be a report from the City's legal counsel, regarding the recent ruling on the incinerator disengagement lawsuit. • yt,v September 15, 1992 CURBSIDE RECYCLING PROGRAM Director of Public Works Kevin Crosson addressed the Board stating that the proposed pilot curbside recycling program has received a generous amount of press, and announced that he and Mr. Fields would be updating the Board on activities towards implementation, and answer any questions before proceeding with the curbside recycling program. Crosson stated that Staff has compiled a considerable amount of data on various regional and national curbside recycling programs. The City of Fayetteville has been hindered from proceeding with a curbside recycling program primarily due to a lack of funding and funding problems in addressing the City's current inadequate processing capability. He reported that the City presently contracts with Abilities Unlimited to process recyclables through the drop-off container system, and a problem exists with available space. Crosson briefly outlined potential methods for providing the necessary processing capability, either through the 4 -County Solid Waste District; through the City's capital funds set aside for a processing facility; or a combination of both. Crosson stated that the initial pilot curbside recycling program will provide the City with invaluable information to help determine the direction that the future City Council will want to proceed in the area of solid waste management for the City of Fayetteville. Due to the fact that the pilot curbside recycling program is coupled with once -a -week solid waste collection, plans include compiling very important general information on the City's solid waste stream. In addition, data will be collected on solid waste and recycling volumes, and information on public acceptance of both curbside recycling and once -a -week collection in order to better define the City's infrastructure needs for processing capabilities. Crosson further reported that a future pilot recycling program would address the second step by incorporating volumetric rate studies to determine the most cost-effective method to charge residents for services, and to encourage recycling through that process. Solid Waste Superintendent Greg Fields addressed the Board with a breakdown of the particulars in the pilot curbside recycling program that will be implemented, an explanation of how the program will work, and detailed information of what is hoped to be accomplished through the curbside recycling program. Fields reported that one route of approximately 900 homes had been selected for the initial pilot recycling program, and the 90 -day program was planned to begin the week of October 5 and conclude on December 31. Informational materials are being produced to provide to each residence prior to implementation of the program. Fields explained that all household trash on this particular route would be collected on Mondays with recyclables collected on Thursdays. September 15, 1992 He reported that the initial program would implement a "blue bag" system, in which each of the 900 residences would be provided with 20 blue bags. Due to the City's limited processing capabilities, only one material would be collected each week; beginning with newspaper,proceeded by clear glass containers, and finally, collection of aluminum cans. Fields stated that the City would use existing manpower and equipment for collection, and they feel comfortable at this point that Abilities Unlimited will be able to provide the adequate processing service needed. In addition, a survey will be conducted within the next week, with the assistance of the U of A Journalism Department, to collect initial feedback of citizens' attitudes toward recycling, and what citizens expect from such a recycling program. In response to Mayor Vorsanger's question, Greg Fields stated that this particular route of 900 residences was chosen on the basis of the good terrain and cohesive, dense housing in the area. In addition, the City already maintains some of its best equipment in this area which is necessary to carry outfthe pilot program. He further explained that theroute chosen lies between Hwy. 45, north of Hwy. 45, and east of Old Wire Road to Township. Director Henry commented that this route would provide experience with multi -family housing; to which Fields responded that for the sake of convenience, thesinitial pilot program will not include apartment complexes that use dumpsterlservice. Fields further stated that multi -family units are generally handled differently, if at all, in curbside recycling programs;_this is one area that the City will address in future pilot programs. Mayor Vorsanger reported receiving public inquiries on how the collection of one recyclable per week would"be handled and how the public would be advised ofrthe schedule. r A Greg Fields responded that to make -this process easier for those residences involved in the initial pilot program, a "Start-up Kit" would be provided which includes a,printed calendar, setting out which material would be collected on,each day.,,, In addition, Fields verified that the "blue bags" were"to be.used for all recyclables, and the bags would in turn be recycled.aftertheir use. 7. k Director Green asked whether they would have'adequate information in the data base, following the initial pilot curbside recycling program, to accurately project costs and actual response figures. Greg Fields responded that they should have a good start from this data. He pointed out that since they are:only addressing three recyclables in this pilot program, instead of realizing a dramatic drop in additional trash volume which would'occur if they were also collecting plastic, three colors of glass, and tin cans, they anticipate there to be a significant amount of trash remaining to collect from pilot residences on Mondays. September 15, 1992 Director Green stated that one of the most important results from any kind of a pilot program is the collection of accurate data. Greg Fields reiterated plans to conduct an initial survey with assistance from the University; plans to collect data throughout the pilot program; and plans for a follow-up survey at the conclusion of the program, to receive public input on their perception of the effectiveness of the pilot program, as well as to gather suggestions for future programs. Director Coody reported a suggestion made at a conference he attended that collection of recyclables in blue bags from multi- family housing could be accomplished by posting a central area at such complexes (i.e. using a blue stake), where everyone could place their recyclables. Greg Fields responded that he found this suggestion to be an interesting and potentially suitable method for dealing with multi- family housing in a curbside recycling program. Director Coody asked Mr. Fields whether besides distribution of the education packets and information printed in the newspaper, there had been any neighborhood meetings held. Fields responded that to date, no such meetings had been held. However, Fields stated there would be ongoing educational process throughout the pilot program, reference numbers for citizens to call, and a method of resident notification by removing and tagging recyclables that have not been properly prepared or that are not included in the program. In response to Director Henry's question regarding the tagging process, Greg Fields further explained that the sanitation crews will be opening the blue bags, and if they notice items that are not included in this program, those materials will be pulled, tagged and left behind. He further stated that if a recyclable was put out on the wrong collection day, those materials would also be left behind. Director Coody reported that his research has uncovered that the giant corporation BFI handles a lot of recycling, and it is his understanding that if you send BFI a biography of your town, including for instance, population, average age, medium income, terrain, and presence of a university, they will in return profile and advise, as far as the type and quantity of recyclables that can be expected in recycling programs. Due to BFI's management of over 25 million customers, they have the ability to produce a very accurate profile. Coody suggested that the City of Fayetteville send BFI such a profile requesting an estimate from them to compare to the data collected locally. Greg Fields responded favorably to Director Coody's suggestion, stating that he saw no reason why they could not work with BFI on a recycling data profile. 1 September 15, 1992 Mayor Vorsanger further suggested that they also send the City's profile data to Northwest Arkansas Waste Management, and others in the business, who may offer the same service. He stated his concern that it may appear to some, by requesting such a data profile from only one entity, that. particular entity has a "leg -up" on privatization. Greg Fields further concurred with Mayor Vorsanger's suggestion regarding the City's responsibility to use any and all sources to collect data. Director Coody further addressed the expansion aspect, asking if following the outlined 90 -day pilot program, whether the City is planning to compile information to develop a similar pilot program for the entire City, or plan to completely re-evaluate the program to determine what type of curbside recycling program will be implemented by the City. Greg Fields responded to Director Coody's question and stated they would probably return to the basics and completely re-evaluate the entire program. He stated that up to this point, they have envisioned implementing other pilot programs; and hopefully with additional processing, and in order to evaluate different systems, will have the ability to effect more than one.program at the same time. Fields projected that at the ,end- of the 90 -day pilot program, the City will have the answers to some of the funding questions. If all goes well, hopefully theybcan thereafter proceed with establishing a processing facility, which is the real key in terms of expanding recycling from the initial program. Director Spivey stated individual. Board Directors could contact Greg Fields at his office directlyrat anytime to ask questions regarding the proposed .pilot program. ' .Fields stated he is available'to answer questions from anyone at anytime. f l ` INCINERATOR DISENGAGEMENT LAWSUIT City Manager Scott Lineb ugh introduced Thomas M. Ingoldsby of McDermott; Will & Emery, and Walter R. Niblock of the Niblock Law Firm, legal counsel for the City of Fayetteville, who would address the Board with a report regarding the; recent ruling on the incinerator disengagement lawsuit. F Tom Ingoldsby, representing McDermott, Will:& Emery Law Firm from Washington, D.C., addressed the Board stating that Judge Oliver Adams recently handed down his decision in the incinerator disengagement lawsuit, and he would therefore be reviewing with the Board, the implications of that decision; to discuss the appeal process; and to review the status of claims existing against the third parties involved in the transaction. September 15, 1992 Mr. Ingoldsby stated that to discuss Judge Adams' opinion, it was necessary to discuss his findings in the context of the transaction as a whole. In December 1986, the Northwest Arkansas Resource Recovery Authority (Authority) issued $22 million in bonds, the proceeds therefrom to be used for funding the incinerator. The sole source of revenue to pay for these bonds were the tipping fees to be paid pursuant to the Waste Supply Agreement, an unconditional obligation whereby the City of Fayetteville and other members of the Authority agreed to pay tipping fees sufficient to cover the debt service on the bonds. Ingoldsby--stated that the Waste Supply Agreement was the pivotal agreement of the entire transaction since if this agreement was not enforceable, or if the parties did not adhere to the terms of the agreement, said actions would result in insufficient funds to pay the bonds debt service. When the City of Fayetteville decided to withdraw from the incinerator project, the Board determined that it'had both a legal and moral obligation to pay the short -fall on the bonds. Following this determination, the City adopted an ordinance increasing sanitation rates paid by both residential and commercial establishments, to provide funds necessary to pay the short -fall on the bonds. Ingoldsby further explained that shortly thereafter, the lawsuit was filed to enjoin the collection of the $2.02. Since the ordinance was premised on the Waste Supply Agreement, the suit also raised the issue as to whether or not the agreement was a valid contract for which there were a number of inherent issues attached. The incinerator disengagement lawsuit was tried this summer, and Judge Adams addressed the questions head-on and rendered his decision, as follows: 1) Judge Adams' initially looked at the question of whether the Waste Supply Agreement was a valid contract, and concluded that the agreement was enforceable as a legal contract. Therefore, as the matter now stands, the City of Fayetteville has a legal obligation to adhere to the terms of the contract; one of the said terms being that the City guarantees to pay the short -fall on the bonds. 2) Secondly, Judge Adams addressed the question of whether or not the City had authority to increase the sanitation fees. He determined that the City did in fact have this authority; the decision to increase said sanitation fees was for a reasonable connection to its obligations in providing sanitation services; the City's inherent powers; and that adoption of the ordinance was valid. Mr. Ingoldsby stated that the ramifications of this decision are very important, and outlined them as follows: 1) The terms of the contract itself are enforceable; therefore, whatever the Waste Supply Agreement provides, the City is obligated to abide by. The agreement states in several places September 15, 1992 that the City has an obligation to pay the debt service on the bonds. This now means that the City not only has whatever moral obligation perceived, but also has a contractual obligation to pay the short -fall. 2) During the history of this matter, there have been a number of questions raised regarding the adoption of the Waste Supply Agreement, and whether this agreement violated the Arkansas Constitution. Both of these issues were addressed in the Court's opinion, and held that the contract does not violate the Arkansas Constitution, that it was properly adopted, and that the Board members were informed as4,to the terms of the contract. Ingoldsby continued to explain that the plaintiffs have until October 5th to appeal Judge Adams' decision; and if they elect to do so, the case will proceed directly to the Arkansas Supreme Court. It is anticipated.that a final decision would be rendered by the Arkansas Supreme Court nine months to a year after filing of the record. This doesn'tnecessarily meen•that it will literally be nine months to a year from'October 5th,tsince there can be some delay in submitting the record. ' Therefore, Ingoldsby estimated that they would be looking at a'totalelapsed time of from 12 to 15 months. In terms of the City of Fayetteville's further obligations in connection with an appeal, if the'same is taken, Ingoldsby explained that the City would be required to submit a brief to the Court,. and if oral arguments were held, the City would be expected to appear and participate'in any such proceeding. Otherwise, the balance of the work and responsibilities lie with the plaintiff, as the party moving for appeal.,' Ingoldsby further addressed the effect of Judge Adams' decision on any third party claims. He explained that throughout the history of this project, council has,discussedewhether any parties other than the City of Fayetteville,. would be liable for all or a portion of the short=fall on the bonds. Those parties.considered to be the most likely to be responsible as third parties are the underwriter and the lawyers who put together the transaction. Ingoldsby stated that the City has preserved any claims that they have against all parties -involved throughoutthe pendency• of this case. He explained the two theories -considered for• pursuing any claims against these third parties as follows: 1) If the Waste Supply Agreement was invalid, the transaction was put together premised on an invalid contract; therefore, they would share all or a portion of the liability resulting from an incorrectly structured transaction. Under the court's current decision that the Waste Supply Agreement is held to be valid, this argument is not available to the City. 2) Unrelated to the Waste Supply Agreement, the second theory of liability is that the transaction was funded and closed in September 15, 1992 December 1986 because of prospective changes in tax law; and the transaction was closed to be subject to the prior law. In fact, the transaction was closed before it was ready to be closed because it had not been fully developed. In particular, a site had not been selected. If all facts related to this project had been developed, and the site had been selected, the opposition to the project would have surfaced, the parties would have been informed, and the transaction would never have proceeded. Ingoldsby stated that under theory #2, there are a lot of factual issues and decisions that would need to be made once there has been a final decision made in the case. However, under the current scheduling, it appears that these are not decisions that the current Board will be requested to make. The City would be advised if there were any change in that status. In conclusion, Ingoldsby stated that this case has had a long and tortured history and has represented a difficult period in the City's history. With respect to this history, he made note of the following three important points: 1) The Court's decision is unambiguous on one point - the Waste Supply Agreement is a valid contract, and the City is going to have to abide by the terms of that contract, as it sets out clearly that the City guaranteed that the debt service on the bonds would be paid. It is now a contractual obligation of the City to make that payment. 2) This litigation has gone on for almost 311 years, and has involved three separate cases. The City of Fayetteville has initiated none of the lawsuits and has been a defendant in each one of these cases. The City of Fayetteville has always been in a responsive position as a named defendant and required to take action. Ingoldsby reported hearing discussion from many different people as to various positions that the City of Fayetteville could have taken in this matter, ranging from a full defense to simply rolling over and letting someone else handle the matter. He stated that everyone is entitled to their personal view as to what is good government and sound management; however, he pointed out that the City had no choice but to defend this action, if the view of any of the financial sources is to be accepted. During this period of time, the City issued two separate bond issues at very favorable rates, with good ratings. This unambiguous fact is not questionable, nor an option from the City's perspective, since the same was related to the City directly by the underwriters and the rating agencies. If the City had elected to forego and not comply with the constraints being placed upon it by the financial community, Ingoldsby stated that the cost of any September 15, 1992 future development would have exceeded by many fold, the cost of this litigation. 3) With respect to the expenses associated with this litigation, Ingoldsby stated that he well recognized that the expenses related to this trial have been •substantial, and is highly unusual for the City of Fayetteville and many other communities. He stated. that he is not ,trying to defend or argue about any particular charge rendered in this case. However, Ingoldsby pointed out that under the legal system, parties have the right to challenge:in actions of local and state governments, and those challenges represent expense and cost to all parties to the transaction. This same expense is also incurred by the government, and every party involved in complex, protracted,litigation,;of{this type. Director Coody reported that he°hae heard many statements made regarding the performance Of Mr. Ingoldsby and Steven Pflaum in the trial proceeding that they had acted with extreme professionalism. Coody further stated that:West Fork and Washington County are also members of the Authority, and asked whether the City was still withholding the 5% that these parties are responsible for from the billings, or whether Fayetteville:was paying 100% of the costs incurred. City Manager Scott Linebaugh responded 'that the Authority is responsible for paying legal fees to` Jim•,Rose. Mr. Rose is charging the City for Fayetteville's portion only and has submitted bills to West Fork and Washington County. Director Coody stated hisi belief that .neither West Fork nor Washington County have paid their portion of;,the legal fees. He questioned whether Fayetteville will be held 100% liable and the other members of the Authority will be held free from liability. Mayor Vorsangerresponded'reiterating Linebaugh's explanation that Jim Rose, Attorney for the Authority, has billed Fayetteville separately from West Fork and Washington County, and he assumes that these members are paying their legal fees just as the City has. In response to Director Coody's question whether the $10 million in short -fall on the bonds are the sole responsibility of the City of Fayetteville or if West Fork and Washington County are likewise liable, City Manager Linebaugh responded this remains to be worked out now that a decision has been rendered. Linebaugh stated that it is now the City's place to approach West Fork and Washington County in an attempt to collect their share of the short -fall. If this should fail, the City can always pursue the matter legally. Director Coody's asked if the City has the option to fall back on the third parties defendants. Mr. Ingoldsby stated there were two possible :claims against third parties. One of them was that a September 15, 1992 transaction was put together premised on an invalid contract. This was irrelevant in light of the Court's decision. However, Ingoldsby further explained that the other option, which is unaffected by the Court's decision, remained an option if the Court elected to pursue it. Mr. Ingoldsby responded to Director the City of Fayetteville currently Attorney Jim McCord, the law firm named defendants, as well as the Lindsay & Jennings, the underwriter Firm. Coody's question, stating that has tolling agreements against of Kutak, Rock & Campbell, as bond counsel firm of Wright, A.G. Edwards, and the Rose Law Mayor Vorsanger stated he knows how the law is written and understands how the courts operate; however, he has been advised that there are some theories surfacing whereby a city such as Fayetteville who has been sued and prevails, but at a tremendous legal cost, could possibly seek partial responsibility from the plaintiffs for the City's legal costs. Mr. Ingoldsby responded this is an issue which is controlled by Arkansas law as to the ability to recover against opposing parties in litigation; therefore, he would have to defer that question to Mr. Niblock. Vorsanger stated his reason for posing the question is that he understands that the Justices of the Arkansas Supreme Court are looking at this possibility, as well as other justices, as an avenue to obstruct the filing of frivolous lawsuits. Mr. Ingoldsby responded that the status of such a law in Arkansas is not difficult to ascertain, and Walter Niblock could easily provide the Board with the required information. Walter R. Niblock, representing Niblock Law Firm, addressed the Board stating that Tom Ingoldsby has reported on much of the history and issues which required addressing in this matter; therefore, what more could he say, except "We Won!". Niblock stated their original mandates were to protect the City's credit, to uphold the Waste Supply Agreement, as well as Ordinance 3444, and Judge Oliver Adams has ruled in their favor of the City on all counts. In response to Mayor Vorsanger's previous question regarding holding the plaintiff's responsible for a portion of the City's legal fees, Mr. Niblock explained that provisions of Rule 11 of the State of Arkansas enjoin lawyers from filing frivolous lawsuits; however, Niblock stated his candid view that this was not a frivolous lawsuit. Frivolous lawsuits are not litigated to the extent that this one has been. The Court has to make the determination whether or not a lawsuit was actually frivolous. If this is determined to be the case, there are provisions in Arkansas 1 September 15, 1992 law to address this matter. Niblock reported that there were "Rule 11" lawsuits filed by the plaintiffs against the Niblock Law Firm accusing them of filing frivolous defenses for which the Judge did not rule, and the cases were dismissed. In conclusion, Mr. Niblock stated that although he regrets that the lawsuits were costly, he is extremely pleased with the outcome, and hopes that this is the end of the matter. There is no way in reality to avoid the high costs involved ,in;litigations of this magnitude if defense is to be proper and a favorable decision is to be achieved. Niblock suggested that in treading the Court's opinion, the most important aspect is that the case was dismissed. Assuming that an appeal is not`filed, the case will be res judicata and finalized. On the question of an appeal „_Niblock stated that he has no inkling whether the plaintiffs will file an appeal or not. He has heard many different opinions on this issue; and everyone has the right of appeal within 30 days'after filing of the court's opinion and order. `r ... f Director Coody asked whether. in the -event the case is appealed, the Niblock Law Firm would be representing :the_ City in the appeal or whether this would require hiring the services of McDermott, Will & Emery. Mr. Niblock responded that the two firms work effectively as a legal team. This would ultimately be the decision of the City Board; however, Niblock stated that if he was to be involved in the .appeal process, he would request,that McDermott, Will & Emery be involved. He .stated that ,McDermott, Will & Emery did the "yeoman's" service in this case andcontributed tremendously to its success. Niblock further stated that it took a great organization like McDermott, Will & Emery -to get the'.job_done; as frankly, the Niblock Law Firm does not have the same kind ofresources and could not have done it alone. Director Coody asked since the body of the work has already been accumulated in this case, whether there is that much more work to be compiled. Mr. Niblock responded that, from an appellee standpoint and cast once again as the defendant, and based on what the appellants do, will determine what will be necessary in the form of the appellee's response. However, the great majority of legal research has already been completed and is available to anyone. Niblock explained their hope had been that the case would be ruled on by motions for summary judgement; however, for reasons which he does not fully understand, the plaintiffs insisted they had a large case and a lot of testimony to put on. When the parties appeared before the court to present their cases, everyone was shocked that the presentation of plaintiffs' case concluded as quickly as it did. Director Coody questioned if the City would attempt to sue the complainants in this case, specifically Barnhart and Robson. It September 15, 1992 seems obvious that neither one of them have the resources to pay millions of dollars in legal fees. Mr. Niblock responded he is unaware of the complainants' financial status; however, under state law, there is no provision for awarding attorney's fees except in certain set circumstances, such as in domestic relations cases or breach of contract cases. In addition, it can be agreed to in an agreement for the allowance of attorney's fees up to 10% as determined by the court, similar to that contained on bank notes. This particular case is not one in which attorney's fees would be allowed, except if the lawsuit was determined by the court to be frivolous. Niblock reiterated his opinion that although the plaintiffs were mistaken in their judgment as vindicated by the court, they had a legitimate legal right to file the lawsuit they filed. Director Green stated from newspaper reports, Plaintiff Barnhart has no plans to file an appeal; however, her attorneys, Kent Hirsch and Dale Evans, still hold that option open and purport that they may perhaps resurrect yet another plaintiff. Green asked if it was legal or ethical for an attorney to generate or seek out a plaintiff in order to perpetuate a case such as this. Niblock responded that it is not normal procedure for an attorney to seek a party to represent; however, class action suits differ in that they are almost promoted by both state and federal governments with the idea of protecting the consumers. Therefore, although he could not say for sure whether it occurred in this case, Niblock explained that it is normal procedure that lawyers are given more leeway in class action lawsuits to actually seek out and almost solicit a class representative. Niblock agreed with Director Green that this was a strange situation where the lawyers are saying one thing and their client is saying another. Director Green addressed Mr. Ingoldsby stating that from the synopsis of the opinion, it appears the court did not rule on the credit rating issue. However, it was his understanding that McDermott, Will & Emery presented high-powered expert testimony on how this would effect the City's credit rating. Green asked Mr. Ingoldsby whether the plaintiffs argued this point or offered any expert testimony to support that this would not hurt the City's credit rating. Mr. Ingoldsby responded that the plaintiffs offered no evidence at all on the issue of the City's credit rating limiting their evidence solely to the Waste Supply Agreement. In this regard, Ingoldsby explained the City's position was that the Waste Supply Agreement was valid, and even if it wasn't valid, the City had the inherent authority to proceed in paying the short -fall to protect its credit rating, and it had the right to settle claims. These were secondary positions to the Waste Supply Agreement because if the agreement was valid, then they simply had a contract to enforce September 15, 1992 on its terms. The court never addressed the secondary issues because it ruled in favor.of the City on the -first issue that the Waste Supply Agreement was valid. r Director Green stated the fact this was a valid agreement would further ensure that if the City had defaulted, it would damage the City's credit rating. Mr. Ingoldsby concurred with Director Green's statement and further commented that at that point,. the -City would not have been legally prohibited from doing something;Ywhereas'now; they would simply become irresponsible in choosing' hot to honor their contractual commitments. He stated that. individuals,:. corporations or cities simply do not borrow money, default, and still get a favorable credit rating. a Director Green stated he was one of many who was conscious of the fact that if it was judged'to be a valid agreement, how devastating those results could be. Since the plaintiffs did not offer their own expert testimony that:the City would not be adversely affected, indicates to him that no such witness could•be found. 1 With respect to selection of,a class representative, Mr. Ingoldsby explained that the idea in this lawsuit was that the plaintiffs were representing both thejrate payers and taxpayers of the City of Fayetteville, and Ms. Barnhart was the nominal representative of this large group. If Ms; Barnhart would elect not to pursue this position, it is possible'to change the nominal representative to another person who is equally qualified for such representation. Ingoldsby further stated• that the question of how another representative is obtained and the lawyers' -'right to generate a client is subject to a lot of ethical considerations. There has been litigation in this area, and a number of rules and restraints have been established as to what is proper and improper. Director Coody addressed Mr. Ingoldsby inquiring whether the billings from his law firm, which in the past have been submitted to the City 3-5 months after the fact, could be presented in a more timely fashion. Mr. Ingoldsby responded that the hourly fees portion of their bills are always current, and billed in the following month; however, there can be a 6 to 8 week lag on his law firm's receipt of charges, such as xeroxing and telephone. Director Coody asked Mr. Ingoldsby his opinion whether in the event of an appeal, that the Niblock Law Firm could handle the appeal to the State Supreme Court. Mr. Ingoldsby responded that his general recommendation to a client in a matter such as this would be that this is a matter of complex litigation with a number of issues that require the ability to devote substantial resources and ability in preparation of pleadings. Without the same type of resources as September 15, 1992 the other party possesses, they would be at a very substantial competitive disadvantage. Mayor Vorsanger stated that decision would be made by either this Board or the new Council and will include the option of using only the City Attorney. In response to Director Spivey's question regarding the appeal process cost, Mr. Ingoldsby stated the costs in an appeal are much more restrictive. Ms. Carol Conger, resident of Fayetteville, addressed the Mayor reporting that she had been advised by City Manager Linebaugh that it was customary for public comment to be taken at the conclusion of the City Manager's report. In response to Mayor Vorsanger's inquiry, Linebaugh stated that he advised Ms. Conger that it had been a practice by the Mayor, following the City Manager's Report, to ask the audience for comments or questions. Carol Conger, resident rate payer of the City of Fayetteville, addressed the Board with regard to the tolling agreement against Mr. McCord, in the event that the lawsuit would be appealed and Mr. McCord would win the race for City Attorney, did they foresee any problems with Mr. McCord being in the position of potentially suing himself. Mayor Vorsanger responded that this point could not even be conjectured, nor did it pertain to the subject report. He further added that this same scenario would apply if Ms. Conger were to become an alderman, or Vorsanger was to remain the Mayor, as well as being ratepayers. With regard to Judge Oliver Adams' opinion, Ms. Conger addressed the recurrent statement therein that as the dominate party in the Northwest Arkansas Resource Recovery Authority, Fayetteville did not lend its credit, but they used their credit. She asked if there has been or is now any distinction between the Northwest Arkansas Resource Recovery Authority and the City of Fayetteville, or whether they are one in the same. Mr. Ingoldsby responded that the Northwest Arkansas Resource Recovery Authority and the City of Fayetteville are separate entities. Mayor Vorsanger stated he felt very uncomfortable discussing litigation the City was involved in with an appeal yet to be decided upon. Ms. Conger stated she is simply trying to use the attorneys that they have paid for to better understand the Judge's opinion. In 1 September 15, 1992 addition, Ms. Conger asked why the judge repeatedly stated in his opinion that he was not there to determine -the "wisdom" of the actions taken by the City:_ {'1. Director Henry responded thatilegal counsel should not be asked to answer Ms. Conger's questions', as they/are being asked to explain what the judge meant by his opinion. Ms. Henry further suggested that Ms. Conger take herecomments to Public Access for her "politicking" on other than City time. Mayor Vorsanger stated he�.wasnot goingtoaspeak for Judge Adams, nor should anyone else be asked to. t Robert Reus, resident of. Fayetteville, addressed the Board stating it was the City Board of Directors who voted to spend millions of dollars on the incinerator fiasco and on the ensuing lawsuit, and not the citizens of Fayetteville. In. addition, Reus stated the plaintiffs in this lawsuit had -very. few resources, and the overwhelming resources used 1y tlie'City of.Fayetteville may only have acted to vent the law.._in,favor of the City. He also considers threats coming from the Board•of Directors that a potential appeal on the court's decision tc(be totally out of order. Although the current Board of Directors 'did not make the .decisions leading to the situation they are in, he would like to see someone from the City take responsibility for their mistakes. : r . . { Mayor Vorsanger stated the'current Board ofeDirectors inherited the incinerator mess; however, as long as he has been on the Board, he has followed the law and the principal that the City pays its just debts. Director Green asked Mr. Reus why a vote wasn't taken on the plaintiff's decision to file a lawsuit. Mr. Reus responded that the plaintiffs were simply using their authority as citizens to express their opinion that the citizens of Fayetteville were getting a bad deal on the incinerator project, and the law was not being upheld and asked the judge to make a ruling. However, this does not obligate the defendants to spend $1.5 million on attorney fees which is his objection to the actions of the current Board of Directors. Director Coody addressed Mr. Reus stating that he, like the judge, can privately pass judgment on the wisdom of a previous Board and any other Board of Directors. He can't explain some of the decisions that have been made, and he is sorry they have reached the debacle that they are in which has divided the community more than any other issue he knows of. However, it is time to cut the losses and move on to the future, remembering the lessons learned from this incident in any future projects the City enters into. September 15, 1992 OLD BUSINESS Items that have been brought before the Board but were tabled or no decision made to allow for further information to be presented. REZONE R92-24 City Manager Scott Linebaugh reintroduced an ordinance rezoning 3.39 acres located on the south side of Old Farmington Road and west of One Mile Road from A-1, Agricultural, to R-1, Low Density Residential, as requested by Mike Price on behalf of Nelson D. Curtis and Glenn A. Oldham. This ordinance was left on its first reading at the September 1 Board of Directors meeting. The Planning Commission voted 7-0-0 to recommend rezoning. Blackston and place read for motion to third and a vote of time. , seconded by Henry, made a motion to suspend the rules the ordinance on its second reading. The ordinance was the second time. Blackston, seconded by Henry, made a further suspend the rules and place the ordinance on its final reading. Upon roll call, the motion was passed by 6 to 0. The ordinance was read for the third and final Upon roll call, the motion passed by a vote of 6 to 0. ORDINANCE 3641 APPEARS ON PAGE ;702 OF ORDINANCE BOOK )(XVI REGIONAL AIRPORT AUTHORITY Mayor Vorsanger reintroduced a resolution as requested by the Northwest Arkansas Regional Airport Authority that if and when incurred, all obligations of the Authority will be obligations only of the Authority and not of its governmental members. Henry, seconded by Green, made a motion to adopt the resolution. Director Coody stated the language in the resolution, ". . . all obligations of the Authority will be obligations only of the Authority and not of its governmental members. . .", it was his understanding that once the Authority is formed and becomes liable for debt, the Authority has no real assets other than the property, and he doesn't believe the bond holders would be satisfied with this arrangement. He believes the Authority will probably evaporate and come back to the members of the Authority for payment of any shortfall incurred from the debt. Bill Martin, citizen of the Northwest Arkansas addressed the Board in regarding the viability Airport. He concurred the City of Fayetteville, and appointee to Regional Airport Authority (Authority), response to Director Coody's observation of financing a major project such as the with Director Coody's statement that the September 15, 1992 lenders to the Airport Authority would have to look to the project itself, which is one reason the Authority has taken such an effort to ascertain the precise financial viability of the Airport. If the project is not financially viable, then no one will lend to the project in the first place. The resolution pertains to project financing which says that the recourse of the lenders is to the financiers of the project. John Elrod,• legal counsel for the.,Authority, addressed the Board stating one of the cornerstones of Judge Adams' decision in the incinerator case was the fact that 'even though the City of Fayetteville was the dominate member;ofIthe incinerator Authority, the authority was in fact .a'separate corporate body politic with its own ability to enter into itsowncontracts, separate and apart from any obligations of the=members.and!creators of the authority. In a like manner, the Regional Airport Authority is a separate body politic with its own ability to enter into -contracts that will stand on their own merit, _ Elrod explained the resolution before the. Board as an agreement between the Airport Authority and the seven member governmental entities that created the Authority, underlining once again the fact that Arkansas Statutory flaw prohibits any of the members who created the Authority from being guarantors of the revenue bonds that are perceived to be issued as part of the financing package that is creating the Authority. He further stated the Authority has, been emphatic that in order to be successful, this project is going to stand on its own. Director Coody stated his research into enabling legislation for Airport Authorities has found that revenue bonds are just one small part of financing airports. He stated his concern about the financial viability of the proposed airport, and his job is to look out for the taxpayers of Fayetteville first. At the time Fayetteville joined the Airport Authority, it was to be a cargo maintenance facility, not a passenger facility, and wouldn't affect Drake Field. However, once into the Authority, the plans change to a passenger facility, which in Coody's opinion, changes the situation entirely. Mayor Vorsanger questioned Director of Administrative Services Ben Mayes for verification regarding the statement made by Director Coody that Drake Field brought in $22 million to the City last year, equivalent to revenues received from all the students of the U of A. Mayes stated that Director Coody was probably referring to the amount of economic development and benefit Drake Field has brought into the community. Director Coody stated his concern that the new airport will be eliminating the economic impact that Drake Field has on the community. He stated that it is important for the Board to act as a regional cooperative governmental unit. For Fayetteville to have September 15, 1992 the enormous cost benefit ratio difference to where they might gain benefits from a regional airport, in his opinion, they will also gain an enormous liability. Coody stated that he believes the economic benefit is outweighed by the economic risk. In response to Director Coody's reference to the regional airport as an economic risk and a "moving target", John Elrod responded that what is occurring is a study in progress for a dynamic and fluid situation that is developing, as the study occurs. He does not believe that an objective study process should be criticized as a "moving target". In addition, Elrod stated that the Authority will be receiving another financial report in the next thirty days, and it appears that the original estimate of $260 million for the regional airport project is coming back into the range of $100 million project. In addition, Elrod stated that 90% of the dollars necessary to land aircraft will come from the Federal Aviation Administration Trust Fund, non -taxed dollars generated by usage fees and revenue bonds necessary to support the remaining portion. Mayor Vorsanger commended the Airport Authority for offering the City this kind of contract, which has gone way beyond that which would be expected, in order to protect the municipalities and county governments from any financial obligation; and stated that he does not know what else they could do to satisfy everyone involved. Director Blackston commented that they are here to consider a resolution which does no more than make an offer to the City and not to argue the viability or feasibility of a regional airport. In further response to Director Coody's question regarding whether the Authority would be presenting a supplemental financial agreement, Mr. Elrod responded that presentation of a supplemental financial agreement will be the City's final opportunity to withdraw from the Authority. Director Coody stated that to give the impression that the City of Fayetteville will have no liability in this endeavor is misleading because the law states that once the City signs the financial package and the Authority obligates itself to build an airport, the City will be liable for their share of whatever debt there is. Director Green disagreed with Director Coody's perception that if the City does nothing, they are assured that Drake Field will remain forever and income that the City receives from it will be locked in. In response to Director Coody's inference that John Elrod, attorney for the Authority, was misrepresenting or "lying" to the Board, Mr. Elrod responded that throughout this process, there has been a lot of name calling which he sees as totally uncalled for. His opinion of the 14 individuals making up the Authority Board is totally to September 15, 1992 the contrary. They are a_strong-willed,.,strong-minded group of individuals. As attorney for the Authority, Elrod stated he has counselled that they should leave some flexibility in the contract, and all 14 members have consistently maintained, both publicly and privately, that if the regional airport.will,not fly on its own, it will not work, and they will be in_ favor of it. Director Henry reiterated the importance that the audience not misinterpret Director Coody's comments which implied that John Elrod, counsel for the Authority, was lying to the Board in his explanation of the proposed agreement. ' ., Director Green stated his'understanding`of the contract is that of a unilateral agreement with the City of Fayetteville not agreeing to do anything but receiving all the benefits; and he believes it is commendable for the Authority to go this extra mile. Barbara Moorman, resident,of Washington County, addressed the Board and stated her confusion that if comparing the subject agreement to Judge Adams' opinion as,:held under Act'699 of the Arkansas Legislature, the resolution the City is about to vote on is no guarantee at all considering that Judge Adams just ruled that this very same language could mean that the ratepayers of Fayetteville were liable for these bonds. In addition, Ms. Moorman stated the only guarantee with the resolution before the Board is a guarantee being made byanother party, the Authority, and not by the City itself. Unless the City is the Authority, how can they pass a resolution saying that the Authority shall not do something? She suggested the resolution should state that the "City" shall not appropriate funds for the Authority; shall not pledge its full faith and credit to back any bonds issued by the Authority; and shall not enter into a separate contract, etc., without a vote of the people." In response to Ms. Moorman, City Attorney Jerry Rose responded the difference between the regional "Authority" that created the incinerator, and the situation with the Regional Airport Authority, is with the Waste Supply Agreement which was an unconditional promise holding the City liable. He further explained the Authority promises within the subject agreement that they will not ask for any agreement obligating the City. In addition, Rose explained that the City has two representatives on the Authority Board, Dan Ferritor and Bill Martin, who are being instructed by the resolution not to enter into any agreement that will in any way conflict with the agreement proposed by this resolution. Therefore, Rose sees the contract as a benefit to the City in instructing their representatives to the Authority on how the City wants them to act. Director Coody stated that if the City of Fayetteville votes to stay in the Authority, then the City needs to know that they will be obligated to pay for their portion of the Airport if the September 15, 1992 revenues don't keep up with projections. He believes that they need to be prepared for unforeseen circumstances in a worst case scenario to support their moral, legal, and financial obligations. In response to Mayor Vorsanger's question, John Elrod stated that the only member of the Authority left to approve the contract was Washington County. Upon roll call, the resolution passed by a vote of 5 to 1, with Director Coody voting no. RESOLUTION 137-92 AS RECORDED IN THE CITY CLERIC'S OFFICE NEW BUSINESS CONSENT AGENDA Mayor vorsanger introduced consideration of items which may be approved by motion, or contracts and leases which can be approved by resolution, and which may be grouped together and approved simultaneously under a "Consent Agenda." A. Minutes of the September 1, 1992 regular Board of Directors meeting; B. A resolution expressing the willingness of the City to match the Federal Aid Bridge Replacement and Rehabilitation monies up to the budgeted amount of $40,000 and authorising the execution of the Agreement of Understanding with the Arkansas Highway and Transportation Department obligating the City's 20% share to the replacement of the bridge over Owl Creek; The bridge on Double Springs Road over Owl Creek was inspected and determined eligible for federal aid. The City's 20% share is projected to be $40,000, with a total project cost of $200,000 and is included in the 1992 Capital Improvements Program and budget. RESOLUTION 138-92 AS RECORDED IN THE CITY CLERIC'S OFFICE C. A resolution awarding a construction contract to the qualified low bidder for the replacement culvert/bridge at South College over Tin Cup Creek north of Jefferson Elementary, and approving a budget adjustment; The bids for this project were opened on September 8 and Sweetser Construction Company submitted a low bid of $129,745 for this project. A contingency amount of $15,570, which equates to a 12% contingency, is also requested for this project bringing the total budget for the project to $145,315. A budget adjustment is requested to fund this project from funds originally specified for Various Channel Improvements, September -15. 1992 • which is essentially projects to be identified such as this one. , RESOLUTION 139-92 AS RECORDED IN THE CITY CLERK'S OFFICE D . A resolution awarding Bid. 92-36' to' the low qualified bidder, Multi -Craft Contractors in the amount of $23,900 for rehabilitation of Lift Station #5; This contract will include: electrical -wiring, cleaning and painting the building. • RESOLUTION 140-92 AS RECORDED IN THE CITY CLERK'S OFFICE 3 E . A resolution awarding Bid 92-37, ',Item au, to the low bidder, Instrument & Supply Co., in the amount of $39,076.64 for a duplex bubbler control system and level control system used to control lift station pumps; and ',Iteme" to A.A. Chesterton for a sludge transfer pump in the amount of $19,634.08; These are budgeted items for the sludge treatment plant. RESOLUTION 141-92 A8 RECORDED IN THE CITY CLERK'S OFFICE F. A resolution awarding Bid 92-30 to the low bidders, Items 1 & 2 to Time Striping, Inc., for 312,000 feet of white and yellow reflectorized pavement markings in the amount of $16,380 plus tax, and Items 3, 4, & 5 to Sunshine Service Co. for arrows, words, and emblems in the amount of $2,700 plus tax; RESOLUTION 142-92 A8 RECORDED IN THE CITY CLERK'S OFFICE G . A resolution awarding Bid 92-35 to the low bidder, Tomlinson Asphalt, for asphalt overlay of the west side general aviation ramp in the amount of $98,350 plus a 5% contingency of $4,917; This budgeted overlay project is to begin at the south end of the Tyson Hangar ramp and proceed south to the end of the general aviation ramp.. This project bid had been reviewed and approved by the Airport Board. RESOLUTION 143-92 AS RECORDED IN THE CITY CLERK'S OFFICE Director Spivey stated that the minutes of September 1, 1992 were not included in the agenda packets. It was decided that this item needed to be deleted and taken up at the next Board meeting. Blackston, seconded by Coody, made a motion to approve the Consent Agenda, as amended. Upon roll call, the motion was passed by a vote of 6 to 0. September 15, 1992 BROPHY CONDEMNATION REOUEST A request by Russell J. and Juanita R. Brophy for the City to condemn a 50 foot wide street and utility easement across Reserved Tract C in Country Club Estates. The petitioners have been unable to purchase an easement from the Tract C property owners. The Brophy property is landlocked, and they state under Arkansas law they can condemn an access road but not a utility easement. Therefore, they are requesting the City condemn the easement on their behalf. They have agreed to pay 100% of all related expenses including constructing the street and utility lines. The ordinance was read for the first time. Green, seconded by Blackston, made a motion to suspend the rules and place the ordinance on its second reading. Upon roll call, the motion passed by a vote of 6 to 0. The ordinance was read for the second time. Green, seconded by Blackston, made a motion to further suspend the rules and place the ordinance on its third and final reading. Upon roll call, the motion was passed by a vote of 6 to 0. The ordinance was read for the third and final time. Jim McCord, attorney representing the Brophys, addressed the Board stating he has personally visited with all the adjoining property owners of Country Club Estates who generally did not object to the proposal and request. He reported one property owner's reservation about additional development creating additional lots, and he explained that the Brophy development concept will end at a cul-de- sac to preclude future development. The concept is for large, estate -type lots of approximately 7 lots of 3-5 acres each on this 30 acre tract. This development would include protective covenants of a minimum of 2400 sq. ft. and will attract corporate executives to Fayetteville. Director Green stated that the right-of-way through the property basically chops off one corner of this property, and asked whether this condemnation would result in segregating this corner lot, or whether the Brophy's intend to compensate the property owner for the loss of this corner. Mr. McCord responded that there is a small triangle to the south of the proposed extension of the East 29th Circle, of which the Brophy's have offered to purchase the entire triangle, including the proposed right-of-way from the owners of reserved tract C, but the offer was rejected. His understanding of the law of imminent domain is that if this case were tried and settled, the value of this triangle would be reflected as severance damages and included in the just compensation award; therefore, the property owners would be entitled to the fair market value of not only the 50 foot right-of-way, but also the small triangle. • ‘r September 15,, 1992 , Director Henry stated that._this is basically a land -locked piece of property under which the claw; under ithe State of Arkansas would allow the property owner:to,buildY however, the amount that the County Court could award to .getto athe property, does not meet Fayetteville street ordinances. McCord responded that the statute that authorizes a land -locked property; owner; to have a private imminent domain action limits,the width of the right-of-way to 30 feet. In addition, the. statute only authorizes the private imminent domain action fora street right-of-way for utilities to the proposed subdivision.:.ln order to comply with the 50 foot right-of-way requirements of the City subdivision regulations and to provide utility service to the proposed lots, the request for City condemnation is being;made. r Mayor Vorsanger asked how the land owners would access Reserved Tract C. McCord responded that a road would benefit this tract. He further stated that Country Club Estates envisioned East 29th Circle being extended which would service Reserved Tract C. Director Coolly asked if Mr. McCord had brought forth any new information on this condemnation request which would cause the Board to change their minds from their initial decision not to take up the issue. He responded the necessary facts were outlined in the cover letter for the Board to make an informed decision. The Brophys have been in limbo for many months and would appreciate the Board making a decision on this issue. In addition, McCord confirmed that the Brophys have offered $25,000 for the property to be condemned, for which a counter-offer has not been made. In further response to Director Coody, McCord stated that it would have been counter-productive and a waste of time and money to file suit in County Court to condemn a 30 foot right-of-way since the City Engineer would not recommend a variance of the 50 foot right- of-way requirement. Director Coody stated that he would be more comfortable in approving this condemnation had the Brophys gone through every available avenue before approaching the City for condemnation, as the City's power for condemnation should be used sparingly. In his opinion, this should have been the last resort, instead of the first resort. Mr. McCord responded that the Brophys have attempted to deal in good faith with the out-of-town property owners for a number of years, and the property owners have adamantly refused to cooperate and accept their own asking price for the 50 foot easement. He further stated that it would have been duplicate legal proceedings to condemn a 30 foot easement in County Court, and then additionally ask the City to condemn a 20 foot easement. In response to Mayor Vorsanger's question, Mr. McCord explained that when a piece of property is land -locked, there is a statute authorizing a legal proceeding in County Court for filing a September 15, 1992 petition for private eminent domain action. McCord further stated there exists a precedent for this type of action which occurred with the Orthopaedic Clinic at Crossover Road and Joyce, where the property owner of Paradise Valley would not grant an easement to connect the sewer line, and the doctors made the same offer to pay 100% of the costs if the City would condemn, which they did and the case was ultimately resolved. Director Coody responded that in the incident case, there is an entire thoroughfare or 50 foot roadway which would set an even bigger precedent than that used as an example. Mr. McCord responded that this is to extend a street approximately 190 feet as envisioned on the existing sub -division plan. Director Green stated that his main reservation was using the City's power for private purposes, and he believes that his questions have been answered and resolved. Basically, there is no plat, and the master street plan did envision this street, and all adjoining property owners have been aware of this. In response to Director Spivey, Mr. McCord stated all property owners have been notified of this condemnation proceeding, 10 in Fort Smith and 1 in Tyler, Texas. Spivey stated if any of these property owners had a real strong feeling about this request, someone should be protesting. Mr. McCord further explained that he did not personally contact anybody; however, he provided with the cover letter, the names and addresses of all property owners. City Manager Scott Linebaugh stated that in the absence of City Clerk Sherry Thomas, who would be responsible for notifying all property owners of the condemnation proceeding, he has no way to verify whether or not this was done. Director Spivey stated that although he agrees with this condemnation proceeding, standard procedure would be for all property owners to be contacted regarding the same. Henry, seconded by Blackston, made a motion to table this ordinance until the next meeting. Upon roll call, the motion to table passed by a vote of 4 to 2, with Directors Spivey and Coody voting no. REZONE R92-29 Mayor Vorsanger introduced an ordinance rezoning property located on the west side of Garland and south of Wedington Drive from R-1, Low Density Residential, to R -O, Residential -Office, as requested by Pete Estes on behalf of Caroline Parsons. The ordinance was read for the first time. Blackston, seconded by Coody, made a motion to suspend the rules and place the ordinance on its second reading. Upon roll call, the motion passed by a vote of 6 to 0. The ordinance was read for the second time. Blackston, September,15; 1992 seconded by Coody, made a motion to further suspend the rules and place the ordinance on its third• and final. reading. Upon roll call, the motion was passed -by a vote of 6 toy:). The ordinance was read for the third and final}time. 2 ! s Pete Estes, attorney for`the'Hathcock Trust, addressed the Board stating that this property has been discussed since the end of 1989. The Planning Commission approved the rezoning 8 to 0, and Staff .has recommended the'rezoning. i + In response to Director Coody's question, Mr. Estes verified that the Parsons have agreed to grant a 40 foot easement on the southernmost side for the school's transportation easement. Upon roll call, the motion passed by a vote of 6 to 0. ORDINANCE 3642 APPEARS ON PAGE 0777' OF ORDINANCE BOOR XX V/ 1 UTILITY EASEMENT VACATION Mayor Vorsanger introduced an ordinance vacating a 5 foot portion of a utility easement at 6660/6662 Julian Avenue (Lot 44, Lenham Heights Subdivision) in Johnson, Arkansas, as requested by James and Joy Mathias. A duplex was constructed some 2.4 feet into the utility easement. The reason for the easement vacation request at this time is to allow for the sale of the property. There were no objections to the vacation of this easement by the utility companies. City Attorney Rose explained that the ordinance he will read abandons a 2.14 foot portion rather than the 5 feet listed in the agenda packet. The various utilities agree to waive and vacate this easement, but they only agree to the 2.14 feet. In his discussions with City Engineer Don Bunn, Rose reported they feel comfortable that the 2.14 feet will solve the problem. The ordinance was read for the first time. Blackston, seconded by Coody, made a motion to suspend the rules and place the ordinance on its second reading. Upon roll call, the motion passed by a vote of 6 to 0. The ordinance was read for the second time. Blackston, seconded by Coody, made a motion to further suspend the rules and place the ordinance on its third and final reading. Upon roll call, the motion was passed by a vote of 6 to 0. The ordinance was read for the third and final time. Upon roll call, the motion passed by a vote of 6 to 0. ORDINANCE 3643 APPEARS ON PAGE ,P74 OF ORDINANCE BOOR XX(//' September 15, 1992 WATER SERVICE REOUEST Mayor Vorsanger introduced a resolution approving water service to property owned by Dr. Gary Reneger and Mr Ronnie Hissom on Highway 45 East within the city limits of Goshen. The Goshen City Council has agreed to allow Fayetteville to service this property. In addition, the White River Water Association has released the property to Fayetteville for service purposes. A total of 5 water connections are planned for this 40 acre piece of property. The City water system is capable of providing water to this area. City Attorney Rose read the resolution. Blackston, seconded by Green, made a motion to approve the resolution. Upon roll call, the resolution passed by a vote of 6 to 0. RESOLUTION 144-92 AS RECORDED IN THE CITY CLERK'S OFFICE 1992 REAL AND PERSONAL PROPERTY TAX RATES Mayor Vorsanger introduced an ordinance levying the Real and Personal Property Tax Millage Rates of 3.8 mills on real and personal property for operations, 0.5 mills for police retirement, and 0.5 mills for fire retirement. Each year the City must adopt an ordinance setting the millage rate for real and personal property taxes. There is no change in the millage from last year's rate. The ordinance was read for the first time. Green, seconded by Goody, made a motion to suspend the rules and place the ordinance on its second reading. Upon roll call, the motion passed by a vote of 6 to 0. The ordinance was read for the second time. Green, seconded by Coody, made a motion to further suspend the rules and place the ordinance on its third and final reading. Upon roll call, the motion was passed by a vote of 6 to 0. The ordinance was read for the third and final time. Upon roll call, the motion passed by a vote of 6 to 0. ORDINANCE 3644 APPEARS ON PAGE )7g OF ORDINANCE BOOK )(XV) INDUSTRIAL PARK PURCHASE Mayor Vorsanger introduced consideration by the Board of approving a resolution exercising the fourth and final option for the purchase of Industrial Park property. 1 September 15, 1992 i , He further explained that this is in compliance with a contract between the City of Fayetteville and the Fayetteville Industrial Development Commission regarding 40 acres at aytotal purchase price of $738,480. This fourth purchase makes a total purchase of 163.55 acres. The contract was initiated in 1989. The funds to purchase this property are not currently available due to the sales tax lawsuit, and it is recommended that if the Board wishes to enter into the final purchase phase of. this contract; that they do so with the provision that the funds will not be transferred until the sales tax lawsuit is successfully defeated. This is being addressed at this time in order to maintain an extension of time requested on the option. City Attorney Rose read the resolution. Director Green stated that he has abstained in the past from voting since he felt he had a conflict since his primary source of income was derived from one of the bond holders; however, Worthen Bank has helped him out of this conflict, and he feels free to vote on this resolution. Barbara Moorman addressed the Board asking how many of the lots in the Industrial Park are currently unoccupied. Steve Ward, representing the Chamber of Commerce, responded that the majority of the Industrial Park is not currently occupied at this time. Mr. Ward further explained that most industrial parks are long-term investments and do not fill up over night and immediate return is not expected. Ms. Moorman explained the purpose of her question was whether there was any land available at the Industrial Park for baseball fields. Robert Reus, resident of Fayetteville, addressed the Board stating that he has a problem with purchasing additional industrial park land, with the extensive inventory of unused industrial park land which already exists. In addition, he objects to the City budgeting funds for this purchase when the funds are frozen and not currently available. Reus further pointed out that in discussions for passing the millage at the last agenda session, it was stated that 4 new policeman and 1 new fireman would be required to be hired in 1993, and the milage just passed does not include funds for these purposes. He stated his belief that these funds could be used for better purposes than to purchase the proposed industrial park land, and he would prefer that this decision be left to the new Council and Mayor. • e a i Mayor Vorsanger responded to :Mr. Reus that -the millage the Board passed, the same as last year, does includeadditional positions for both fire and police, according to the commitment made in 1991. He further explained funds which are not available are for additional positions, over and above the normal increase previously dedicated. • r 1/40 vs. September 15, 1992 In response to Director Coody's question, City Attorney Rose confirmed the proposed resolution and purchase of industrial park land is expressly contingent upon the successful completion of the sales tax litigation. In addition, he confirmed the City is committing themselves to purchase the land once the sales tax funds become available, and it would be difficult for the new City Council to cancel the option. The new City Council would have to accept the legal consequences of changing their minds on any obligations made by the current Board. Director Coody suggested that since it is unlikely that the sales tax issue will be resolved before the election, they table this resolution and allow the next City government to make this obligation for purchase of industrial park land, if they so choose. Mayor Vorsanger responded the purchase of the industrial park land began in 1989, and the current Board inherited the obligation. He believes that a problem exists with the City not exercising its option in keeping faith with the original document. Steve Ward stated he was authorized by the Fayetteville Development Foundation Board to extend the contract one time, but has not been authorized to extend or renew the contract or expiration date presently extended to them. Director Green reported that when the Board in 1989 made this commitment for the economic development of Fayetteville, they sent out a very positive message and represented a turning point in the way Fayetteville was perceived as being conducive to economic development. He believes that the Board needs to fulfill the commitment made in 1989, by finishing this final purchase; and if they don't, they will be sending the signal that Fayetteville is not conducive to economic or industrial development. Charles Moorman, resident of Fayetteville, addressed the Board asking why there was no Staff recommendation on this resolution, but merely that of Mayor Vorsanger. City Manager Linebaugh responded that they were not asked for a recommendation. However, Staff's recommendation would be to exercise the fourth and final option for the purchase of this industrial park property, contingent upon available funding. Green, seconded by Coody, made a motion to buy the land. Upon roll call, the resolution passed by a vote of 6 to 0. RESOLUTION 145-92 AS RECORDED IN THE CITY CLERIC'S OFFICE BOARD OF DIRECTORS MEETING: Mayor Vorsanger introduced consideration by the Board of Directors to cancel the regularly scheduled City Board of Directors meeting September -15,' 1992 ". that is scheduled for November 3, election qday for the newly elected city officials .that will take office on November 4, 1992. 4 +:+w Vorsanger proposed that the first Board of,Directors meeting in November be the first board meeting of, the new Board and tentatively set for November_4th, contingent upon a change by the new Mayor. He further reported that the Election Commission has advised him that if there is a tie in any position or if there is a victory by one or two votes in any position, the candidates may ask for a recount, which would prohibit the Election Commission from certifying the election results. City Attorney Rose read the resolution. Henry, seconded by Coody, made a motion to approve the resolution. Upon roll call, the resolution passed by a vote of 6 to O. RESOLUTION 146-92 AS RECORDED IN THE CITY CLERK'S OFFICE METRO AIRLINES. SETTLEMENT Mayor Vorsanger introduced consideration of a resolution by the Board of the City's alternatives regarding a settlement submission from Metroflight., Incorporated, dba, American Eagle. Staff requests approval to accept Option (B) of three choices, offered by Metroflight regarding the bankruptcy filed in 1991. Metroflight has outstanding invoices and flowage fees receivable totalling $20,868.76. By accepting Option (B), 50% of the full claim will be paid to the City and considered by the Court to be full satisfaction of the claim. This request also includes a budget adjustment of $10,434.38 to amend the Bad Debt Expense Account so the unpaid amount may be removed from the accounts receivable outstanding balance. City Attorney Rose read the resolution. Green, seconded by Henry, made a motion to approve the resolution. Upon roll call, theresolutionpassed by a vote of 6 to 0.. RESOLUTION 147-92 AS RECORDED IN THE CITY CLERK'S OFFICE ARKANSAS COMMUNITY OF EXCELLENCE (ACE) PROGRAM DESIGNATION Mayor Vorsanger introduced a request made....by the Chamber of Commerce for the Board of Directors to consider allowing the City of Fayetteville to participate in the ACE Program as offered by the Arkansas Industrial Development Commission.- The mission for the ACE Program is to provide a vehicle to enhance the business climate i September 15, 1992 of Arkansas communities through economic preparedness and development. There are no membership fees or dues for participating in the program. Steve Ward, Fayetteville Chamber of Commerce, addressed the Board stating the program covers six distinct areas in economic development: 1) organization; 2) establish industry program; 3) industrial sites; 4) community information; 5) community evaluation planning; and 6) marketing the community. These areas have been determined by AIDC to be the areas which qualify a community to become certified in economic development. Ward stated Fayetteville is probably 80% to 95% qualified per this criteria which means there are some rough edges to be polished. With this, the AIDC requests that the City and the Economic Development Agency or Chamber of Commerce cooperatively enter into an agreement with AIDC to pursue this program. Henry, seconded by Coody, made a motion to enter into the ACE Program. Upon roll call, the motion passed by a vote of 6 to 0. OTHER BUSINESS TOWNSHIP PROJECT In response to Director Henry's inquiry, City Manager Linebaugh reported that the Township project is on hold pending utility relocation and resolution of the sales tax issue. Therefore, the project will not be proceeding in 1992. He further verified that the project had been modified to include four lanes at Hwy. 71 and Township and remain two lanes at Old Wire and Township. FOOTBALL GAME PARKING Director Coody reported witnessing 20 to 30 cars towed from Halsell Road during the last U of A football game. He assumed people believed the no parking signs would be voided for the day since no other parking was to be had due to street construction. Coody suggested a waiver be sought on the sign ordinance for a 4-5 hour period and place temporary signs which verifies that any vehicles parking on those streets will be towed. ADVERTISING AND PROMOTION COMMITTEE Director Green stated the Advertising and Promotion Committee has recommended Bill Clodfelter, Manager of the Park Inn, to replace one of its members, Pat Henry of the Hilton. Director Green, seconded by Blackston, made a motion to approve the nomination. September 15, 1992 Upon roll call, the motion was approved by a vote of 6 to 0. ADJOURNMENT The meeting adjourned at 10:30 p.m. • • • r. � v