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HomeMy WebLinkAbout1993-05-04 MinutesMINUTES OF A MEETING OF THE CITY COUNCIL A meeting of the Fayetteville City Council was held on Tuesday, May.. 4, 1993, at 6:30 p.m. in the Council Room of the City Administration Building, 113 W. Mountain, Fayetteville, Arkansas. PRESENT: Mayor Fred Hanna; Aldermen Kit Williams, Conrad Odom,, Woody Bassett, Fred Vorsanger, Len Edens; Joan Chapman, Heather Daniel, and Stephen Miller; City Attorney Jerry Rose; City Clerk Sherry Thomas; City Treasurer Glyndon Bunton; Administrative Services Director Ben Mayes; Planning Management Director Alett Little; members of staff, press, and audience. CALL TO ORDER Mayor Hanna called the meeting to order with eight aldermen present. CONSENTAGENDA Mayor Hanna 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 April 20, 1993 regular City Council meeting; A resolution approving an amendment to the 1993 Community Development Block Grant Final Statement due to an additional allocation'of $94,000, and approval of a budget adjustment increasing the appropriate expenditure accounts. kA 'final amendment to the CDBG Final Statement must be submitted to HUD before the funds can be awarded. The additional funds will be used to increase activities already planned and approved for 1993. RESOLUTION 46-93 AS RECORDED IN THE CITY CLERK'S OFFICE Miller, seconded by Odom, made a motion to approve the consent agenda. Upon roll call, the motion passed by a vote of 8 to 0. STREET PAVING EQUIPMENT Mayor Hanna introduced consideration of a resolution awarding Bid 93-1 to Mitchell Machinery Company for $202,000 for a Crawler Mounted Hot Mix Paver and awarding Bid 93-2 to Clark Machinery Company for $146,600 for a Wheeled Heavy Duty Excavator. This is the first phase of the Street Paving Program by the City. ,These items werebid in January, 1993, but because of the sales tax r lawsuit, the purchase of these items has been delayed. 1 May 4, 1993 Alderman .Edens stated.these items are the first two of four that will put the City in the paving business. The ADR Committee approves these items because by doing the road maintenance in house, it should save the City money. City Staff will be paving all the gravel roads left within the corporate limits. The City will not be doing new construction of roads. Alderman Vorsanger asked why the ADR Committee and Staff are not recommending the low bidder for the paving machine. The recommended vendor is about $15,000 higher. .. Randy Allen, Street Superintendent, stated the Cedar Rapids equipment is being recommended over the Caterpillar brand because from talking with several people in the industry, they have had trouble with the Caterpillar equipment. It has had afairly frequent breakdown problem, and then the downtime waiting for repairs has been a real problem. It would be too costly to the City to have much downtime. The City currently has some old Cedar Rapids equipment, and we have always received good support from them on the equipment repairs. Alderman Vorsanger stated the four pieces of equipment will cost a little over 1/2 million dollars. He asked•.if.we have personnel trained in operating this type of equipment. He also stated most cities are leaning toward privatization, and this is a reversal of the. trend. Allen stated the City is really not reversing the trend inasmuch as we will only being doing repair work and not new construction which will still be bid out. Alderman Edens stated the size machine being recommended at this time does not have the capacity to handle building new roads. It is capable of paving approximately 14-20 miles of road per year. Allen stated the City had a study done about 4-5 years ago that stated City Staff was ineffective in building new roadways. So, the City got out of the overlay business. However, the study did recommend a maintenance program be looked into in about 4-5 years down the road. Allen stated following this study, he has investigated the possibility which has resulted in this recommendation before the Council. Allen stated the purpose of this program is to save the City money. He also outlined some indirect costs to citizens associated with.gravel roads such as tire wear, dust, etc. Alderman Miller stated this equipment is being funded from the Shop Fund rather than from CIP funds. It is anticipated the Cedar Rapids equipment will outperform the other brands. He feels money will be saved over the long run with the purchase of .the Cedar, Rapids equipment. . ,., May 4, 1993 Alderman Edens stated the company with the high bid even stated the Cedar Rapids equipment cost less for repairs. Alderman Daniel asked if the company would provide training on the equipment. Allen stated that was part of the purchase price. In addition, he stated he has street department employees who have been with the City 48 years, 28 years, and several between 15-20 years, so they have quite a bit of experience with this type of equipment. Alderman Daniel stated her street was not paved several years ago because one of the residents on the street did not want it paved. She asked if the gravel streets would be paved even if someone did not want it to be. Allen stated the road would probably be paved. He has to look to the good of the overall City. The cost of maintaining a paved road is less than for a gravel road. Alderman Chapman asked if there were any other advantages to owning this equipment. Allen stated the City will be able to do "skin patches" with the new equipment. Edens, seconded by Miller, made a motion approve resolutions awarding Bids 93-1 and 93-2 for the purchase of the street paving equipment. Upon roll call, the motion passed by a vote of 8 to 0. RESOLUTION 47-93 AS RECORDED IN THE CITY CLERK'S OFFICE RESOLUTION 48-93 AS RECORDED IN THE CITY CLERK'S OFFICE ECONOMIC DEVELOPMENT REPORT BY THE CHAMBER OF COMMERCE Mayor Hanna introduced a report from the Chamber of Commerce on the Economic Development activities for the first quarter of 1993. Jim Crider, the Economic Development Chairman, outlined the highlights of the 1st quarter report. He stated he had 4 new industrial business recruitments during the quarter. He continues to receive lots of inquiries and feels the trend will continue to increase. He attended the Trends 2000 conference in Anaheim, California, and made several good contacts. There has been an influx of inquiries from service industries. In the area of research, he has received 32 general inquiries asking for demographic data. Crider stated the 1993 Economic Development Plan will be submitted to the Chamber committee this month. k May 4, • 1993 Alderman Daniel asked. what type of service industries have been making inquiries. Crider stated several insurance companies have been looking at this area. Alderman Daniel -stated Al Raby felt Fayetteville should encourage industryto move to this area, and she appreciates the Chamber's work on this. Jim Crider stated he currently is working with 4 manufacturing clients who are in the final stages of deciding if they will be coming to Fayetteville. He stated the quarter had been very positive, and•he.feels this trend will continue. ALLEY VACATION V93-5 Mayor Hanna introduced consideration of an ordinance vacating a 20 foot section of a north -south alley in the 900 block of Ernie Jacks Boulevard as submitted by Curtis Jones onbehalf of the Lindsey Family Trust. The Planning Commission voted 8-0-0 to recommend the alley vacation subject to the retention of a utility easement over the entire area being vacated. City Attorney Rose read the ordinance for the first time. Vorsanger, seconded by Miller, 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 8 to 0. The City Attorneyread the ordinance for the second time. Williams, seconded by Vorsanger, made a motion to further suspend the rules and place the ordinance on its third and final reading. Upon roll call, the motion passed by a vote of 8 to 0-. The City attorney read the ordinance for the third .time. D Alderman Miller stated the petitioner is already using the alley, and he would have appreciated it if the request for vacation had come before the.•alley had been utilized Alett Littlestatedthe alley was not yet vacated. It is located immediately to the east of a development area, and it is being used for utility access. Upon roll call, -the ordinance passed by a vote of 8 to 0. ORDINANCE 3700 APPEARS ON PAGE 1//4 OF ORDINANCE BOOR X XV/ REZONING R93-17 Mayor .Hanna introduced consideration of an ordinance rezoning=0.21 acres located at 1702 N. Lewis .Avenue from R-1, Low. Density Residential, to R-1.5, Moderate Density Residential, as submitted by David and Patricia Chance. May 4, 1993 The Planning Commission voted 6-2-0 to recommend rezoning. City Attorney Rose read the ordinance for the first time. Miller, seconded by Vorsanger, 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 8 to 0. The City Attorney read the ordinance for the second time. Miller, seconded by Vorsanger, made a motion to further suspend the rules and place the ordinance on its third and final reading. Upon roll call, the motion passed by a vote of 8 to 0. The City attorney read the ordinance for the third time. Alderman Miller stated he viewed the property and asked if R-1 zoning would allow 4 units per acre. Alett Little stated the minimum lot size is 8,000 sq. ft. and this lot is 175' x 122' which is well over the minimum requirement. However, it does not meet the minimum lot size to build a duplex the owner is wanting to build. Alderman Miller stated if the they build a duplex, they will have to save almost every tree on the lot to comply with the tree ordinance. Little stated the tree ordinance is enforceable for new development or when there is more than 1 acre. It does not apply to the owner of single lots. Compliance in this case is only voluntary. Alderman Williams stated he felt the zoning request was reasonable for this area. Upon roll call, the ordinance passed by a vote of 8 to 0. ORDINANCE 3701 APPEARS ON PAGE /)p OF ORDINANCE BOOK XX VI REZONING R93-18 Mayor Hanna introduced consideration of an ordinance rezoning 0.21 acres located on the east side of South School and north of Cherry from C-2, Thoroughfare Commercial, to R-1, Low Density Residential, as submitted by Charles Trantham on behalf of the Joe Edwards Revocable Trust. The Planning Commission voted 8-0-0 to recommend rezoning. City Attorney Rose read the ordinance for the first time. Williams, seconded by Edens, 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 8 to 0. The City Attorney read the ordinance for the second time. Miller, seconded by Vorsanger, made a motion to further suspend the rules and place the ordinance on its third and final reading. Upon roll call, the motion passed by May 4, 1993 a vote-of=8.to 0. The City attorney read the ordinance for the third time. Alderman Miller stated he -hates to see everything on the land bulldozed intoza pile. He hopes.the owners and developers will become more sensitive to the trees. Upon roll callthe ordinance passed by a vote of 8 to 0. ORDINANCE 3702.APPEARS ON PAGE y3o OF ORDINANCE BOOK XXV/ SALES TAX ELECTION Mayor Hanna thanked everyone that participated in the sales tax election and campaign, especially Phyllis Rice of the Northwest Arkansas Times>and Ron Wood of the Morning News for their excellent coverage of the issue He stated he felt the vote was a vote of confidence in this Council, and that they will live up to the trust that has been placed in himself and the Council. ART APPRECIATION MONTH PROCLAMATION • Alderman Bassett read a proclamation issued by the Mayor declaring the month of May, 1993 as Art Appreciation Month.. BOND. ISSUE. AND SALES TAX LAWSUIT UPDATE City Attorney Jerry Rose stated last •Friday he met with. Judge Dawson. Judge Dawson appointed former judge Richard L.Mobley from Russellville as a master to supervise the refund process.- Judge Dawson directed Judge Mobley to open an office in Fayettevillefor four months, and he hopes to get one near the square. Judge Dawson stated Judge Mobley should proceed with the following: (1).developi a form people could use to fill out for their refunds, and (2) formulate a set of criteria to get refunds, such as the type of proof needed, i.e., receipts, credit card receipts, canceled checks, etc. ,Judge Mobley is doing these things now with the assistance of the City. However, Judge Mobley will be the person in charge of the refund process. It is outside the City's hands. The refund filing period will be -from June 1 to September 30, 1993. Judge Mobley will publish in the newspapers the refund process=so everyone will know the process. Judge Dawson declared the settlement offer as final, so the lawsuit for all practical purposes is over. Judge Dawson did not get to the issue of attorney fees and will not until all of the "attorney time" has ended with this case. Rose stated the settlement of -the case:has eliminated the threat of default on the.bond-issue. He stated there are three things that could be done with the bonds:- (1) default, (2) accelerate the bonds which would make them due and payable on a specific date, and • May 4, 1993 the bondholders would receive their principle plus interest to the date of pay off, or (3) defease the bonds. Defeasance would involve taking the bond money and buying another security, such as treasury bills. The interest earned on the treasury bills would be used to pay the bondholders over the next 15-17 years left on the life of the bonds. The ability to accelerate is the choice of Capital Guaranty, the insurance carrier, and City has no authority in this matter. The City can instruct the trustee, Arvest, to defease the bond issue. But, he does not believe that is practical at this time given the current interest rates and the shortfall that would result. Rose stated Capital Guaranty has instructed Arvest to accelerate the bonds. Their request probably takes priority over the City's request. The City would not be able to defease the bonds unless all of the parties agreed and cooperated, and at this point, that would not happen. He has assured Arvest that he feels the City Council would cooperate in a defeasance if they so decide. Alderman Vorsanger stated there is a meeting of the bondholders tomorrow at the Hilton. Alderman Williams asked if it will cost the City more to defease rather than accelerate the issue. City Attorney Rose stated as he understands this, there should be sufficient funds to accelerate the issue, but there will be a shortfall if the issue is defeased. Alderman Chapman stated treasury note interest is variable, and the City could be subject to even greater losses in the future. Alderman Miller asked if $1.5 million is equivalent to the difference between the interest we would have been paying on the bonds and the amount of interest we would receive. City Attorney Rose stated he thinks that is correct. Alderman Vorsanger stated accelerating the bonds is a disadvantage to the bondholders but an advantage to the insurance company. The City paid up front the insurance premium for the life of the bonds. He hopes the City gets a refund after the bond issue is paid off from the insurance company. Rose stated Mayor Hanna has instructed him to seek a refund at the appropriate time, and he will certainly do so. Alderman Edens asked if the City's credit rating would be affected in any way by the acceleration. Rose stated it depends on who is being asked. Some people tell him accelerating is a blemish on the City, and some say it is not and the situation need only be explained. Rose stated this was a risk the bondholders knew was a possibility when they bought the bonds. Everyone is in agreement that if there was enough money, it would be wonderful to be able to defease the bond issue. Mayor'Hanna stated he feels that since a bondholder meeting3is being held tomorrow, what has happened to the City will be explained, and .the majority of the bondholders will ask for the bonds to be paid off. Alderman Bassett asked the date of the acceleration. Jerry Rose stated it was to be done immediately. Alderman Bassett asked who advised the bondholders of tomorrow's meeting. Rose stated Arvest called the meeting. Arvest wants the bondholders to ‘get together and make a decision based on written information Arvest supplied to them. , • Alderman Bassett stated he felt it was important to settle the suit in order to avoid actual default, which was done. If there had been a default, the City's credit rating would have been impaired. He considers the acceleration as perhaps a technical default, and he has asked many people who are security experts about this, and they all agree that this should not impair the City's credit rating if all of the facts are given. Alderman Bassett stated he agrees this is not a perfect resolution to the situation, but it is probably the best way to go. Alderman Williams stated this might be the best final resolution of the issue. However, he did not feel the City Council was on record wanting to defease the bonds as City Attorney Rose indicated. City Attorney Rose stated he did not intend to leave that impression. He has merely stated to Capital.Guaranty and Arvest that he believes the City would cooperate in a defeasance if .there was no cost to,the City. pa - Alderman Bassett stated since Capital Guaranty instructed accelerate, isv there anything the City can do to acceleration. Rose stated he was not aware of any way. • Alderman Vorsanger asked what if the bondholders decide do not want acceleration but want the bonds paid out original terms were when they purchased the bonds. Rose stated those are decisions that would haveto be made by Arvest. Arvest to stop..the that they like the Alderman Chapman stated the City does not know what the bondholders might do. She hopes there is a strong leader among the group that will deal with this in a positive manner. She feels acceleration is the lesser of two evils, but she can't be certain it will not have any impact on the City. May 4, 1993 Alderman Williams asked if Capital Guaranty or the bondholders make the final decision. Rose stated Arvest will have to decide whose instructions to follow. Mayor Hanna stated if the bondholders met and did not want the bonds called, could the City ask Arvest to release the money and let the City pay off the bonds. Rose stated the City could always ask. Alderman Vorsanger stated the bondholders might sue the City. City Attorney Rose stated he does not feel the bondholders have a cause of action on which to sue the City. The ability to accelerate is between Capital Guaranty and Arvest. Alderman Miller stated he would like to see this behind the City and would like to accelerate the issue and get on with running the City. COMMITTEES Mayor Hanna appointed Aldermen Miller, Odom, Vorsanger, and Chapman to the Water and Sewer Committee. He appointed Aldermen Williams, Bassett, Edens, and Daniel to the Street Committee. INCINERATOR LAWSUIT Alderman Bassett asked City Attorney Rose for a status report on the incinerator lawsuit at the next council meeting. He stated he would like to know (1) the expected date the case should go before the Supreme Court, (2) the status of the appeal, (3) if there is any way to expedite the process, (4) the amount, to the exact penny, of the debt on the incinerator bonds, and (5) an explanation of why the debt has increased from $7 million to $lo or $11 million. Alderman Vorsanger stated Rose should contact the trustee, Union Bank, because they should have all of that information. Vorsanger stated he would also like a report on who the City has tolling agreements with and which ones are still in force. Alderman Edens stated he would like to know how much money the City has taken in on the incinerator disengagement fees and where the money has been spent. He knows some of it has gone toward attorney fees. Alderman Vorsanger stated this is the first City Council where none of the members had anything to do with the incinerator issue. Alderman Chapman stated she feels that is a very important point to make. She wants the people of Fayetteville to understand that this May 4; 1993 Council"did not create this problem,' but it is this Council's duty to find a resolution to -the problem. Alderman Williams stated this City Council will not try to cover up anything. He thanked the citizens for their help with the'sales tax election. ADJOURNMENT The meeting adjourned at 7:40 p.m. • y., • • •