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HomeMy WebLinkAbout1994-11-01 MinutesNovember 1, 1994 MINUTES OF A MEETING OF THE CITY COUNCIL A meeting of the Fayetteville City Council was held on Tuesday, November 1, 1994, at 6:30 p.m., in the Council Room of the City Administration Building, 113 W. Mountain, Fayetteville, Arkansas. PRESENT: Mayor Fred Hanna; Aldermen Stephen Miller, Kit Williams, Conrad Odom, Woody Bassett, Len Edens, Heather Daniel, Joe Box and Fred Vorsanger; City Attorney Jerry Rose; City Clerk Traci Paul; City Treasurer Glyndon Bunton; Administrative Services Director Ben Mayes; Planning Director Alett Little; Public Works Director Kevin Crosson; members of staff, press, and audience. CALL TO ORDER Mayor Hanna called the meeting to order with eight aldermen present. MEDAL OF VALOR AWARDS Mayor Hanna presented Medals of Valor to Fayetteville Police Officers David Corley and Anthony Carney for their rescue of an occupant of a fire •at 1941 W. Berry Street on October 6, 1994. RECOGNITION FOR HISTORIC PRESERVATION AWARD Mayor Hanna recognized David and Ellen Lewis for an award they received from the Historic Preservation Alliance of Arkansas for the restoration and preservation of #1 Mt. Nord in Fayetteville's Mt. Nord Historic District. APPEAL - V94-5 This item was left tabled. PRESENTATION OF THE •FINANCING PLAN FOR THE NORTHWEST ARKANSAS REGIONAL AIRPORT Stan Green, the City's representative on the Northwest Arkansas Regional Airport Authority, explained the NWARAA was created four years ago by five city governments and two county quorum courts. The agreement that created the Authority included a provision that the Authority come back to the: city and county governments for approval of its financing plan. There is a concern that the governmental entities would become liable for the debt that the Regional Airport Authority plans to issue in connection with the project. A restated and amended agreement will be presented tonight to clarify the intent of the Regional Airport Authority and to help alleviate the concerns about the Authority's financing plans. The agreement will reconstitute the Regional Airport • ._ November 1, 1994 Authority and will eliminate the requirement of the Council to approve the financing plan. The Airport Authority Board is committed to the provision in the new agreement which says that the city and county governments will not be financially responsible for the Authority bonds. The Airport must stand on its own financially. The Airport Authority Board will not ask the city or county governments to back the Authority bonds. Scott VanLaningham, NWARAA staff member, reviewed the revised restated and amended agreement and listed changes made in the restated agreement since it was originally distributed at the Agenda Session. The changes eliminate the approval of the financing plan by the Council and remove any financial responsibility of the City. David Hausam, of the Llama Company, reviewed the estimated project costs and funding of the Financing Plan for the Northwest Arkansas Regional Airport. VanLaningham presented a model of the proposed Northwest Arkansas Regional Airport and explained possible future expansions. Terry Comerford, of PaineWebber, explained the objectives and assumptions of the financing plan and discussed the plan's utilization of bond issues. Greg Taylor, of PaineWebber, explained the two steps in the process used to develop a financing plan. Taylor also explained the use of cash sources and bonds during the anticipated three year construction period as well as the financing strategy for the airport's future. John Elrod, Legal Council for the Authority, discussed specific legal issues relating to the NWARAA. The following issues were discussed: the creation of an Improvement District; the enacting of a sales tax; members being prohibited from leaving the Authority; and non -liability of city and county governments. Alderman Williams questioned the estimated enplanement figures in 1998 for the Regional Airport. VanLaningham stated the figures would vary depending on the airlines who use the airport. The figure which is from the Master Plan was based on the assumption that there would be no commercial airline traffic at Drake Field. The numbers will be reevaluated when the program management firm is hired. In answer to a question from Alderman Williams, Hausam stated the debt service and coverage required for 1998 is based on the scenario of the expenses equaling what was presented in the Master Plan. November 1,.,1994 k Alderman Williams stated the revenues received.from Drake Field amount to $120,000.this month'and less than-$1.million this year. He asked if there isaa $6 ;million debt.servide without including the operating costs, how is the Authority going make up the rest of the money and still be•competitive in cost'per-enplanement. Hausam stated ,the .actual cost"for`the airlines is the airline revenue required which takes in to account generation of revenues from the concessions, interest on earnings of various accounts, and parking revenue. There are other expenses to the airlines that use Drake Field. There are landing expenses as well as expenses from delayed flights or cancelled flights. Airlines will consider the. difference in the expenses when contracts are being negotiated. In answer to. a question from Alderman Williams, Hausam stated the construction of additional facilities to the airportwould be downsized if the enplanements were less than estimated. The program manager will be involved in this issue. In answer to a question from Alderman Williams, Hausam stated the next feasibility study•would relate to selling the bonds. Elrod stated 60% of Drake Field's business is from American and Delta Airlines. They have made a commitment to the new airport facility. The Authority will be negotiating with American and Delta to determine how many revenue bonds have to be sold in order to build certain size terminal. The driving force for the amount of revenue bonds to be sold is the amount they are willing to pay per enplanement, taking into consideration the other statistical issues that have been raised. Alderman Williams asked if American Eagle and Delta Connection are directly controlled by the major carriers. VanLaningham stated American Eagle is owned by American. Delta owns 20% of ASA. Alderman Vorsanger stated that questioning the Authority about the financing plan seemed inappropriate. The issue of liability has been addressed. He stated he appreciated the opportunity to review the financing plan. Elrod stated the Authority is convinced that from •a legal standpoint the City of Fayetteville bears no liability on the revenue bonds. The revisions presented to the Council are a result of a meeting of the Authority and the attorneys from the five cities and two counties involved. November 1, 1994 City Attorney Jerry Rose stated the statute establishes the Authority as a public corporation. The appointments to the Authority are not from the Council. Revenue bonds are the only bonds allowed to be issued and are strictly limited by the statute as to what liability the individual cities have. The relations that the Authority has with the governmental units involved are formal under the statute. There can be contributions of money and property if the Council wants to make a conscious effort to do so. The Authority must make a request to the Council. The financing portion in the old agreement has been true to its word. The proposed ordinance states that the cities and counties are in no way liable. Under the new agreement, the financing plan is presented for the Council's review, not for approval. The Authority is responsible for the figures presented. There is a section in the new agreement entitled Limitation of Liability. He stated he could not find anything in the statute, proposed ordinance, or the new agreement which holds the City of Fayetteville liable. The Authority could in the future ask each governmental unit for help should financial challenges occur. Alderman Bassett asked if things could change for the City of Fayetteville if there are problems with the airport in the future. Elrod stated financial failure of the project would result in a bankruptcy type status. In answer to a question from Alderman Williams, Elrod stated the bond holders would not own the airport. A receiver would be appointed to operate the airport. Wooten Epps, the underwriter's council, stated the bond holders would have a pledge of the airport's revenues. The trustee, acting on behalf of the bond holders, would take over and operate. Any revenues from the airport would then go to the bond owners. The airlines want to be able to use the facility for their business. The airlines meet with the airport and decide the type of facility they want to pay for. The airlines enter into a lease agreement in which they will probably agree to pay for whatever the residual costs of the airport are. Alderman Williams asked if it went into receivership would the trustee have the powers that we are granting in this ordinance. Is that how the trustee would get their powers? In answer to a question from Alderman Williams, Wooten stated the trustee would get its powers under a bond indenture and the Authority would enter into that agreement with the trustees Whatever powers the Authority has would be granted to the trustee. Alderman Edens asked what Fayetteville's future roll is in the Authority. November 1, 1994 VanLaningham .stated the Council would continue to appoint members to the Airport Authority Board. In answer to a question from Alderman Bassett, VanLaningham stated the airport will not cost the citizens any tax money and there is no liability. Alderman Bassett -stated under statelaw.4Washington and Benton Counties would have togo to fQuorumt Courtland. -pass an ordinance calling an election' to vote'on a sales tax. Alderman Williams requested;a1change in'the wording'of Article VII, Paragraph 702 and,Paragraph7O2.20 to; reflect current powers only. He also requested a change, -of .:Article. VIII 'regarding the Improvement 'District:; , :: ; - s r Alderman Bassett requested that City Attorney Rose draft a memo Outlining the differences in the airport issue and the incinerator issue. CONSENT AGENDA Mayor Hanna introduced consideration of items which may be approved by motion, or contracts an leases which can be approved by resolution, and which may be grouped together .and approved simultaneously under a "Consent Agenda": A. Minutes of the October 18, regular City Council meeting. B. A resolution approving the payment of $582.70 to the Niblock Law Firm for legal representation through the month of July, 1994, for the incinerator. RESOLUTION 127-94 AS RECORDED IN THE CITY CLERK'S OFFICE. C. A resolution accepting low Bid 94-71 and awarding a contract to Gus.Shaffar Ford in the amount of $57,319, less a trade allowance of $2,000, for a net amount of $55,319 for a passenger van and a cargo van. RESOLUTION 128-94 AS RECORDED IN THE CITY CLERK'S OFFICE. Box, seconded by Edens, made a motion to adopt the consent agenda. Upon roll call, the motion passed by a vote of 8 to 0. REZONING R94-50 Mayor Hanna introduced considerationof an ordinance rezoning .51 acres located at 3548 Huntsville Road from R-2, Medium Density Residential to R -O, Residential - Office, as requested by John Walker. November 1, 1994 City Attorney Rose read the ordinance for the first time. Vorsanger, 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; and 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. Kit Williams stated there were people who objected to the proposed rezoning and asked if someone could explain why. The petitioner, John Walker, stated the person who objected to the rezoning at the Planning Commission meeting had heard that the property would be used for a liquor store. The person has no objection to a barber shop. In answer to a question from Alderman Miller, Planning Director Alett Little stated a liquor store would not be allowed in R -O. Upon roll call, the ordinance passed by a vote of 8 to 0. ORDINANCE 3838 APPEARS ON PAGE 3600F ORDINANCE BOOK XX v// REZONING R94-51 Mayor Hanna introduced consideration of an ordinance rezoning 3.05 acres located at the southwest corner of Johnson Road and Highway 71 from A-1, Agricultural to C-2, Thoroughfare Commercial, as requested by Charles Hanks on behalf of Carl and Elizabeth Fite. City Attorney Rose read the ordinance for the first time. Odom, seconded by Williams, 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; and the City Attorney read the ordinance for the second time. Williams, seconded by Odom, 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. Upon roll call, the ordinance passed by a vote of 8 to 0. ORDINANCE 3839 APPEARS ON PAGE 36; OF ORDINANCE BOOK X K V/! OTHER BUSINESS November 1, 1994_. NOMINATING COMMITTEE REPORT Alderman Edens stated there 'were three openings on the Citizens Environmental Concerns Committee.. Two of the openings must be filled by citizens with knowledge in Science. The Nominating Committee interviewed people for these positions and discovered only one was qualified in the area of science. The second vacancy will be filled after the position is published in the newspaper. Edens, seconded by Odom, -made a motion to appoint.Louise Kraemer (in the science position) and James Glass to the Citizens Environmental Concerns Committee. upon roll call, the motion, passed by a vote of 8 to 0. HOUSEHOLD HAZARDOUS WASTE ROUND -UP Alderman Miller reported on: the .success of.the first household hazardous waste round -upheld on October. 22, 1994.i He read a list of..itemsco.11ected'and thanked membere of"City staff-; emergency personnel',volunteers,` and citizens who dropped off materials. ADJOURNMENT The meeting adjourned:at 8:05'p A .�.. •