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Home My WebLink About1996-05-21 Minutes187 MINUTES OF A MEETING OF THE CITY COUNCIL A meeting of the Fayetteville City Council was held on Tuesday, May 21, 1996, at 6:30 p.m., m the Council Room of the City Administration Building, 113 W. Mountain, Fayetteville, Arkansas. PRESENT: Mayor Fred Hanna; Aldermen Stephen Miller, Kit Williams, Cyrus Young, Woody Bassett, Jimmy Hill, Len Schaper, Heather Daniel; City Attorney Jerry Rose; = ' • • ' members of staff, press, and audience. ABSENT: Alderman Steve Parker CALL TO ORDER Mayor Hanna called the meeting to order with seven aldermen present. NOMINATING COMMITTEE REPORT Mayor: Alright, the first item on tonight's Agenda is a report from the Nominating Committee. Daniel: We have one nominee; this is in the form of a motion, is Keith Horne, for the Environmental Concerns Committee, the Science position. Hill: Second. Mayor: Okay, we have a motion and a second; do we have any comments? Call the roll, please. Upon roll call the motion passed by a vote of 7 to 0. NICK PATTON - 3RD PARTY LITIGATION Mayor: Alright, next we have a report from Mr. Nick Patton, who's handling our litigation on the incinerator lawsuit. Patton: Mayor, members of the Council. I have a recommendation that Fm going to make to the Council. I have given you a memo; there have been some changes since the memo was drafted in my office late yesterday afternoon In fact, today, Scottsdale Insurance Company has offered $400,000 to settle their portion of the case. This, obviously if the entire settlement is considered favorably by the council, is a matter that FGIC's attorney and Scottsdale will have to work out. Whether FGIC wants to accept that money, or whether they want me to go forward with the law suit against Mr. McCord's insurance company. I told the council when I was hired 1 fi 188 May 21, 1996 that what I wanted to do was to put together as quickly. as I could, if it was at all possible, some type of agreement where Fayetteville could lay this incinerator waste disposal issue at rest forever. We have been presented with a proposition where we can do that with one exception. That is the one thing that nobody can guarantee, no matter what happens; no matter what kind of litigation is pursued and that is- a taxpayer lawsuit contesting the result of the lawsuit settlement, payment of attorney's fees or what have you. There's nothing I can do about that. Theattorneys, and I want to give credit to the attorneys for the defendants whom we have sued. These people have worked hard. They have all been agreeable There has been no animosity arising out of these discussions and there have been three formal meetings among the attorneys. The Mena and Tisdale Law Firm, which both were partners at the time the original bond issue came about has offered $550,000. A. G. Edwards & Sons has offered .$250,000. Mr. Inglesby's firm has offered $300,000. FGIC has agreed to be responsible for $12,300; hoping they can get - a million of help from Scottsdale. The City of Fayetteville, as I had told some of you earlier, in this settlement, would contribute $2.6 million to the settlement. The parties on the other side have agreed to pay me a $200,000 attorney's fee I am agreeable, in writing, to waiving my contingent fee contract with the City of Fayetteville. Under this scenario, I. assume, that I would be entitled to a fee of $3.2 million or something along those lines. I'm willing to waive that fee if the City Council does want to go forward. The reason I'm willing to waive this fee is very simple. It's the only way a settlement, frankly, can be put together at this stage and time. I can't collect a $34 million fee out of this pot and there be enough money that FGIC is satisfied. We have not done a tremendous amount of work on the actual lawsuits themselves, although the Federal Court lawsuit has entitled great deal of work by various attomeys, not me. But because of that and because of my strong desire that if Fayetteville wants this issue resolved and I can be of assistance in resolving that issue, then I will, in writing, waive the 25% contract. There is always going to be questions about whether or not Fayetteville should by $2.6 million to get this matter behind them. I am making the recommendation to the City Council that you do so. I am making the recommendation that you accept the offer basically as it stands right now with the FGIC directing me as to whether or not they want me to go forward with the lawsuit against Scottsdale. I will be very frank with you that I do not think that Mr. Inglesby's firm has offered a sufficient amount of money, but I do want to explain to you that they have an extremely high retainer. In other words, they are self-insured up to a ratherlarge figure. Since the money is coming-out of their pockets and they don't do this kind of thing for a living, it's kinda hard to choke money against ... I had told some of you earlier that we might end up with a proposal where we settled with everyone except Mr. Inglesby's firm and we would go on. I would recommend.that to you today, except I'm of the opinion that we cannot settle the entire thing with the other defendants unless we settled with Mr. Inglesby. Some of the defendants are nervous about Mr. Inglesby's firm filing a cross -action against thein bringing them back into the lawsuit and, therefore, they have accomplished very little in this settlement as far as expenses and attorney fees are concemed. 189 May 21, 199.- I frankly can't think of anything else to say to you except this. We may be faced with the unenviable proposition of the City of Fayetteville having to take one position in one of the pending lawsuits and another position in another of the pending lawsuits. It places the lawsuit which will be tried second in a rather unenviable position and I think all of you know that the lawsuit against the different parties by the City of Fayetteville in the State Court will be the second lawsuit tried. I would answer questions, or I would discuss that more thoroughly: I really don't feel I can do that in a public forum because of the fact it does involve strategy of the lawsuit and I would rather not answer questions in that matter. That concludes what I have to say to the Council. Am certainly amenable to any questions you've got I'll answer them if I can. If I do feel that a question that you address to me involves the strategy or might effect the potential for settlement, I will tell you so. If you direct me to answer, I obviously am going to answer, but that's where we are and I will take questions from any of the members of the council that desire to ask. Schaper: Mr. Patton, you talk about two suits. You're including the Federal suit as one of those, is that correct? Patton: The Federal lawsuit is one of the lawsuits I'm talking about where the trustee has sued the City and Mr. McCord, that is one of the lawsuits I was referring to . Schaper: And the trustee is suing the City on behalf of the bondholders. Patton: That is correct. Schaper: Now under this proposed settlement, the bondholders would be paid. Patton: That's correct. Bondholders would be paid; the Federal Court action would be dismissed. The State Board action would be dismissed with exception of the possibility of FGIC continuing on against Scottsdale. Wouldn't involve the City at all, it involves, Mr. Schaper, an assigmnent of a Cause of Action, Contract Cause of Action, which is valid in Arkansas. It would involve no expense; no involvement whatsoever by the City of Fayetteville. Schaper: Let me just continue since I'm not a lawyer and I'm so confused by this whole thing. Patton: I understand. So am I, Mr. Schaper. Schaper: If FGIC is willing to put up $12.3 million and, let me correct you just for the benefit of the TV audience, you said $12,300; you meant $12 3 million. 190 May 21, 1996. Patton: I meant $12,300,000. I'm glad you corrected that; there is a little difference. Schaper: People are going to wonder where the $16 million comes. from if .it weren't for that. That's a substantial piece of the $16 million. Don't answei this if you feel it's inappropriate. Is not FGIC basically admitting that they have a very large responsibility in this matter by being willing to pony -up $12.3 million? Patton: I can answer that for you and I, obviously, Mr. Schaper, I'm giving you information that has been given to me, I think it is true. In fact, I have no doubt that it is true FGIC has to pay the bondholders. That's -a.totally separate issue that is away from anything else involved in these lawsuits. FGIC has a policy of insurance that covers these bonds for the bondholders. They have to pay the bondholders. Now, as a separate issue, FGIC has sued through the trustee, and I have sued FGIC in the State Court. FGIC is claiming that Fayetteville backed out of the bond issue; that there was a contract, there was .an agreement: whereby. Fayetteville agreed to indemnify or hold FGIC harmless or pay them back; however you want to put it. What FGIC is doing is exactly as yousay; they are acknowledging that they have to pay the bondholders off. They are attempting to get some help in doing that from, by me, getting money from these third parties that we have sued and from the City of Fayetteville. Now, there has been discussion that the Arkansas Supreme Court decided all these issues and they've decided that the City of Fayetteville doesn'thave to pay the bonds off under the terms of that contract. There are a number of ways, Mr. Schaper, where FGIC might collect from the City of Fayetteville. Securities Fraud has not been decided. Breach of contract clauses have not been decided. FGIC recognizes though that Fayetteville, from the standpoint of finances, can't pay the $16 million. They've undoubtedly; if there is a judgment against Fayetteville that says you've got to pay the bondholders back, Fayetteville's looking at bankruptcy, so I understand. They are looking at a terrible financial situation for certain, whether it involves bankruptcy or not. So in answer to your question, I believe that FGIC thinks they have a fair shot at getting Fayetteville to pay the bonds offin its entirety as far as a written piece of paper is concerned. They have a poor shot of that actually coming about. financially. ,Therefore, what's being done here, Mr. Schpaer, is what is done in all settlements. People are trying to position themselves in the best position financially;. getting that amount :of money out on the table and hoping that it will settle the case. And in all honesty, that is the reason 1 am recommending to the City Council that we do this. Because I can foresee lawsuits going on that my grandson is trying when he becomes a lawyer 25 -years from now. This thing seems to be never ending, Mr: Schaper I think this is a reasonably inexpensive way, and don't misunderstand nie, $2.6 million is a lot of money and I know that. But I think this is a reasonably inexpensive way at this time to put this matter away. - 4 191 ;May 21, 1996 Young: So as elected officials, we swear an oath to the Constitution and all that here in this state. Arkansas Supreme Court says that we cannot pay those bonds. So how can we pay the $2.6 million? Patton: Well because you're settling a lawsuit, Mr. Young, rather than paying off the bonds. Young: We would be looking at possibly citizens filing another lawsuit and we'd be right back where we started. Patton: Well, I don't know you'd be right back where you started. You would be right back in a citizen or a taxpayer lawsuit, Mr Young. On the other hand, if we go forward, Fayetteville loses the case, gets hit with a big judgement, I go over in the State Court and recover that amount of money to pay it off, then you're going to get a taxpayer's lawsuit then saying you're paying off a bond issue. The point, Mr. Young, and I know this is difficult for people to understand, but the Arkansas Supreme Court can't tell Judge Franklin Waters what he's supposed to do. He has the Federal Court lawsuit and Mr. Bassett and Mr Williams and Steve Parker, if he were here, and I can tell you that you can go up in front of a Federal Judge and say, "Judge, here's what the Arkansas Supreme Court says" and the Federal Judge can say, "Yes, but there's a Federal question involved in this lawsuit and I'm deciding this case based on the Federal Statute". I think, Mr. Young, that the City Council, I'm not saying you're not going to say you're going to get sued. I can't guarantee that for you. But I think City Councils are authorized to settle lawsuits. What you're settling here is not a lawsuit where Fayetteville is agreeing to pay bondholders off. What you're settling is a case pending in Federal Court by the trustee against the City. Young: That's the question in my mind. Is that what we're doing? That Federal Case is one place and your suit is another. Patton: No. But we're getting rid of both. Young: But it's your action that we're settling, right? Patton: I was saying both of them. Young: But your suits in Court or the $95 -million suit that you've brought. Patton: What about it? Young: Is that State Court? 5 May 21,:1996 Patton: That's in State Court. Young: That leads me back tp the Arkansas Supreme Court. That that's.what would settle it. Patton: You've got to understand though, we're being paid in that court. : We're not taking anybody. We are being paid; we're not paying anybody over in the State Court: See what I'm saying? Young: We would in a settlement though. $2.6 -million. Patton: No, sir We would not. ;Were settling both cases; the Federal Court case and the State case. Young: Well, the Federal Court case just goes away. Patton: No. It doesn't just go away. It has to be settled, just likeany other case. Young: Are you telling me then Boatmen's is in this settlement? Patton: They would be. Young: But they aren't right now. Patton: Yes, sir, they are. If this settles, Boatmen's settles. Both lawsuits settle End • go away. Federal and State Court. Schaper: You have that agreement from Boatmen's. Patton: I have that agreement from FGIC, who is running the Boatmen's show . That's correct. Young: In other words, once you get down to writing this down, it•would be made clear in any settlement. Patton: Oh, yes, sir. Let me tell you, Mr. Young. What I am proposing to the City Council wipes all of this bond issue out with the one exception; the thing that I can't guarantee, nor can anyone ever guarantee, and that is that some taxpayer may come in here and sue you. I can't make that guarantee; there are too many of them out there. :But all of the lawsuits that are pending now go away. They are settled. Orders of Dismissal With Prejudice and settlement agreements are entered. t 193 May 21, 1996 Bassett: If the, you're obviously, and I think everybody understands this, now you're talking about completely wiping out everything, but you've mentioned the possibility of a taxpayer's lawsuit which we'll have to discuss that of course. But if there was a taxpayer's lawsuit, would the extent of the City's liability then be $2.6 -million instead of $16 -million? Patton: Woody ... oh, sure, because the bondholders are going to be paid off and the thing that is so intriguing about a taxpayer's lawsuit is they could sue the City for $2.6 -million and if they won, does the City pay itself? Schaper: Where does it come from? Patton: Who does the City pay? Bassett: You don't want to hear what I have to say about a taxpayer's lawsuit. Young: The City would be paying the lawyers who brought the suit. Patton: I understand that Mr. Young, and that's, I will ask you to give me a little special consideration because I am a lawyer and I'm up here giving you $3.2 million. So all lawyers are not trying to get as much as they possibly can. Bassett: Mr. Patton, let me ask this, if you feel like you can answer it because it might be on the minds of some of the Council members. Why is it that this is the most appropriate, other than the fact there's an offer on the table, but beyond that, why is this a very appropriate time, in the stage of this litigation to try to settle it? Patton: There is getting ready to be a ... two things. There's getting ready to be a very important decision in the Federal Court; one way or the other. It may be in our favor. The other thing is what I alluded to earlier. There is the distinct possibility that the City will have to take a position in the Federal Court case that is the antipathy of the position I want to take in the State Court case. And it is a serious; an extremely serious problem for me, pursuing the State Court case. It involves, Woody, damages. But it's a conflict that if resolved against us, could be devastating financially, to the City. Mayor Does anyone else have any more questions for Mr. Patton? Thank you, Nick. Patton: I do want to say this, Mayor. Obviously I'm going to abide the Council's wishes; the fact that I make a recommendation is nothing more than that. You folks have hired me and am going to do what you ask me to do. Daniel: Mr. Patton, when do you need our decision. .: 4 19.4 May 21, 1996 Patton: Pretty quick. Daniel: Like a week or ten days? Patton: I really would like the decision of the Council and so would the lawyers involved in the other half of this litigation within a week. If it requires a special meeting, next Tuesday. Young: I'm not in favor of a special meeting on this. That's how this incinerator came about. Patton: I beg your pardon. Young: This is how that incinerator came about. That type of attitude, the approach to government that we through out here in Fayetteville. Patton: I'm not sure I know what you're talking about. Young: A special meeting In other meetings are held. That's when they assume things are happening in a special meeting. that's how we got ourselves in this mess. words, everyone knows when the regular Council things are going to be happening. They don't know Thirty -minute session before the Agenda Session; Patton: That, of course that'sentirely up to the Council. I will tell you that time is of the essence. We do have media here, in fact' I contacted Rusty today to tell him that I was going to appear tonight. I'm not trying to hide anything at all, Mr. Young. It's just that time is of the essence. Daniel: I disagree with Alderman Young that those interested parties should be following this. We've tried to include them and as Mr. Patton said, time is important and the citizens do have some.responsibility for keeping up and keeping themselves informed. As Mr. Patton says, we have the media here; our meetings are televised and individual Aldemien want to make some phone calls to, but it's advertised that we've been on the Agenda that Mr. Patton was going to be here. Patton:: , I think Mr. Garrett will tell you that I told him a couple of weeks ago that I would be more than happy to inform him when I was coming and I think he'll tell you that I did. Young: But when you speak in terms of time is of the essence, I thought you were going to be here two weeks ago. 8 195 May. 21, 1996 Patton: Those were rumors you can't attribute to me. Last week I did intend to come; things were happening with the settlement that made me realize that it was a mistake to come make a proposition to the Council at that time because there was a lot of movement going on so I didn't come. again, I wasn't trying to avoid the Council at all. Obviously, I'm here tonight. I think talking rather openly to you. Williams: I certainly appreciate what you've done and that you've spoken with us and I do agree with Alderman Young though. This very issue tore Fayetteville apart; changed the government here and this is not something I think that, even though we like, time, get this thing over and done with, I think we would be making a real mistake if we decided this before a full two weeks or before our next regular meeting. Passions run high on this particular issue and I think that the citizens should have plenty of time to digest whatever's going to be said tonight and other reports and, frankly, I do too. I have certainly not made up my mind on this particular issue. This is a very tough call. There are things that go both ways on this particular issue. I wish it was a black or white issue; boy that would be nice, but it's not. Daniel: I don't see a lot of folks here tonight, you know, that have been interested and that have been, well, key -players in this whole thing ... hum ... where are they? Mayor: I would like to ask if there is anyone here that would like to address the Council or ask questions of Mr. Patton. Evans: My name is Marshall Dale Evans. I think most of you know me and I just want to say that we take the position that anything paid by the citizens through their City Council is contempt of court and that's what our settlement agreement specific that we have, we reserve the right to bring that action of this Council should pay any money. Now all due respect to Mr. Patton, and I understand the legal concepts and that he's going to present the matter that it is a settlement and not a payment of bonds. However, we still feel an ethical obligation to our class to bring that issue before the Court. I think that's an element that the Council needs to know because the Council may be aware, we have told you we're going to do things in the past; we've done every single one of them. We intend to this one as well. We want you to have the full understanding of what the actions may be taken by every one of the players. When we settled our case, we entered into a settlement document that each of you all have a copy of. We have brought a copy if you want to see it. It reserved for us, the lawyers for the class, one right to be re -involved in this litigation and that's a contempt of court proceeding to enforce the Supreme Court's decision. We take the position and want to make it very clear that we take this position that the payment of any money by the City of Fayetteville is a contempt of that supreme court decision and we will bring that action before the court to be decided. 9 196 May 21, 1996. We think Mr. Patton has done. a marvelous job in getting these other parties to pony -up as mach as they have; he just needs to get $2.6 million and then the:decision, as Mr. Williams has said, would be much more black and white. If the City pays no, money, we have no interest in pursuing anything and we think the citizens would Support. the City Board •. 100% if they pay no money. That's what six years of litigation was about and we sure hope it ends here, but we feel compelled to hold the Council's feet to the fire, so to speak, on not paying these bonds in any form. I realize you can typify it in a number of ways, but we will take the position that payment of any sum of money is payment on the bonds. Bassett: Dale, do you think the citizens will support us 100%,if we got hit for a $16 - million judgement? Daniel: Yeah. . Evans. I don't think that's a risk, frankly, but everybody's got a different opinion. Bassett: We're the ones that would have to answer to 50-60 thousand people if we're wrong though. Evans: That's correct and I don't envy your position. I think that everyone should be working toward the same goal and, the attorneys that have represented the Cityhas no obligation to contact us, but we feel an obligation to contact you and to tell you the way we see it. You have to make the decision thatyou have to make, -but we spent six years trying to get. the City to not be in the situation they. were in. We offered to settle this thing for peanuts compared to where it is now. No one was interested then. • Mayor: I'm glad you said that, Dale, cause I was going to ask you that when part of us came into office, some havecome in since then. ,We had two large suitspending against us; . sales tax lawsuit and the incinerator lawsuit. I was told, as a layman at the time, that the chances . of us losing either suit were pretty slim. The incinerator practically nil; and I do recall, you telling us, one time previously that you had offered to settle for a much smaller amount. I think I remember $100,000. Evans. Well, no. I think that was the other one. We offered to settlethis suit for about $5 -Million. There are people in this room tonight that know that offer was discussed. Mayor:. That's probably the sales tax lawsuit. But anyway, what I'm getting at is, just what Woody asked, I don't think, personally, you'll disagree with this, of course, but I didn't much think the original lawsuit was right and I didn't think the Supreme Court decision was right, but you know, that's what happened, so obviously, I'm wrong, but I'm, as a citizen, didn't think it was right. But now then, we're faced with the same kind of decision again and all we want to do is bring a closure to a problem that hag been plaguing this community now for six or seven years. 10 197 May 21, 1996 I can see a window there, but if we don't take advantage of it, we're going to miss it, but I also see the chance we'll be mvolved a lawsuit for many, many years; could have an exposure as much as $21 -million. I just hope that some other Council sitting here is not faced with what I am now; looking back at two recent lawsuits and saying, "Gee, those guys sitting there to settle that, we wouldn't have had to pay the money that we had to pay on the sales tax lawsuit; we wouldn't had to pay the money we've had to pay on the incinerator lawsuit". It's a tough question. Evans: Absolutely, Mayor, and I said, unfortunately for you and everyone involved, it's a tough position to be in and that's the reason I think it's only fair that we come here and tell you the view that we have. No one is ask what we thought or what our position going to be and we think it's only fair that you have all the information as possible to make a decision. We want to see closure come to this as much as you do. I would add to what you say, I didn't ever tell you those lawsuits weren't any good Mayor: I know. Evans: I offered to discuss those things, however. Williams: No settlement offer was made to this Council Daniel: That's right. That's what I was going to say. Williams: Maybe to the previous board that did not accept it, but at the time we came in, the lower court had already ruled, virtually, and we basically had to go forward with that, I felt, even though I was uncomfortable with the incinerator, and the whole way it was brought about and was unhappy that we had been saddled with a debt for something we never got. Jerry, I almost criticize you for giving me this 100 -page document; this motion and brief on our Motion for Summary Judgment with the Federal Court and I told you I didn't think I could read it, but I did read it and it's a very good brief and there's one portion of the brief at the very end, I think that we City Council members should listen to, on page 98, it says, " ... in Barnhart, the Supreme Court squarely held that the bonds were not the obligation of the City of Fayetteville; did not provide for recourse against the City of Fayetteville; that the bonds were solely the obligation of the authority and were payable solely from the revenue derived from the operations of the authority" ... the incinerator, in other words, " ... the court then held that the City had no authority whatsoever and was totally without power to pay the authority's debts ... the import of the Court's holding was that Fayetteville could not do so indirectly that which it could not do directly ... the holding that Fayetteville was wholly without power to pay the authority's debts means that Fayetteville could not pay the short -fall in any way, shape, form, regardless of how Fayetteville, or the Plaintiff in this action, might characterize it" ... 11 • Ip 198 May 21, 1996 I think that statement, in our own brief, seems to say that if we settle this case,that's payment in another form of the authority's obligation. I believe that correctly states the law. I do not know. This is complicated material. But I have real .reservations on payingany money to settle this case, even though I certainly appreciate all the hard work, and I would love to settle this case and I think if we had it in our power 'to do it, we've already. spent so much and wasted so much money, it almost seems like $2.6 million is not that much more if we could just get it .togo away. Daniel: If that's true, what you're saying, Kit, it seems like to me your salary, -Dale, would be in the wrong to have paid you. - Evans. Pardon me, I don't... Daniel: It seems to me like we would have been in the wrong to have paid,your salary. Evans. The law specifically required that, ma'am. Williams:. That is not paying the obligations of the authority; that was paying our obligation. Evans. Our lawsuit made the law. Daniel: Still, it comes from the taxpayers' pockets. Evans: The law that Mr. Williams was referring to, was made in our case. That is the law in the State of Arkansas; now it came from the Barnhart case. Young: Dale, so your main problem is with the $2.6 million. Evans: Absolutely. I don't want you to get the wrong impression. d think Mr. Patton has done a marvelous job in trying to get these responsible parties to come to the table and pony -up. Young: What you're saying is, if these other people would just go away; in other words, this is one offer settlement. Another settlement would be that these other parties come up with the $2.6 million amongst themselves and they just go away. That wouldbe an offer. That Fayetteville would drop its action against them. Evans: That is exactly what. I'm saying, Mr. Young. What I'm saying is that • Mr. Patton can get the other parties, the ones that already come to the table with money to, among -them, to come up with $2.6 million more dollars, you will hear absolutely nothing from us. 12 199 May 21, 1996 Williams: That would be an easy decision, but obviously, that's not going to be the case. Mr. Patton, if he could have, would have come up with that and everybody here would just be happy and we wouldn't be anything to be concerned about. That's not the offer that we have to consider. Evans: That's not the offer that we understand it right now. That's correct. Young: So therefore, the other, those other parties are looking at $95 -million. That's what our suit is about. Williams: Well, potentially, you never know what you're going to get out of that. Obviously, if we thought we were going to get $95 -million we wouldn't settle for anything; we'd take that $95 -million. Young. We're talking about $16 -million on one side, so we're talking about $95 -million on their part. Do we want to look down the road and possibly have that liability or go ahead. Schaper: If Kit's argument is correct, of course, we can't pay the $2.6 -million. Williams: This is not my argument. This came directly from the brief prepared by our attorneys in the Federal Court case. Schaper: And this is clearly the problem that Mr. Patton is alluding to. Young: And Dale Evans is saying that he will bring it to the attention of the courts. Schaper: Yeah, great. Patton: That's not the problem I'm alluding to. Schaper: Oh, there's another one? This is one of them. Evans: I'm not trying to allude to any of his legal work cause I haven't been privy to it and I take that Mr. Patton is very competent in the things that he's doing. I'm simply saying on behalf of the class, we have a serious problem with the City paying $2.6 -million. We have a serious problem with the City paying any one thing that would be in the nature of paying the bonds. Whatever, you call it, and that it is the only right that we have retained in our settlement is that if we determine that the City is paying that we think the Supreme Court says you cannot pay, then we have the right to bring that before the Chancery Court for the purposes of contempt. But the only reservation we have, only right we have, the only one we would desire or exercise in any way. That's what we view this to be. 13 • 200 May 21, 1996 Bassett: Let me just remind everybody again,.of the part that. Kit read out of the brief is certainly relevant, certainly important. and it's a persuasive argument. I wouldn't argue to the contrary, but, that issue's not going to be. decided by any of us or any of these guys. It's going to be decided by a United States Federal Judge and then after he rules, it's going to be decided by the 8th Circuit Court of Appeals, and after they rule, there might be an effort to sent it onto, or get it on up to the United States .Supreme Court. I guess what I'm saying is, this case is going to live longer than me; will live longer than some of you and I don't know, Dale, this case has tom this town up for far too long, and I don't like the idea of paying another single penny,. but I also don't like the idea of this case continuing to' hang over this City like. a black cloud; continuing to divide people and continuing to be a source of concern to all of us over here ... I'll be gone at the end of this year It will .be somebody else having to grapple with it if we don't . resolve.it...But, as long as we have this hanging over our head, even after it's gone up on appeal, it's going to force us to conserve .money that we need to be spending on streets and water 'projects and police and fire protection. and. a hundred other things. • Evans:• That's the $2 6 million I'm talking about. "Bassett: And also, I'd like to point out and I think most everybody up here recognizes.this, how many times have people sat up here since 1985 or '86 or '87 or whenever and said, "gosh, we've got a good argument here, I think we're going to win". "gosh, we've got a good argument here, this thing will be over before long"; "gosh, we ought to ride this out because this thing will be over before long and we can forget about it". Hasn't worked. Hasn't happened. There's been a lot of good people who have made a lot of good faith decisions up here in the past that just hasn't worked out. Maybe this would work out and maybe it wouldn't. It just seems to me that it's time to end this nightmare and put it behind us. Yogi Bearer said "when you come to a fork in the road, take it" and I wish that we could do that here. But we don't have that luxury here. This is probably going to be the last chance we have to end this. If. we don't do it now, then we're stuck with the consequences. It might tum out alright; . but it might not and I feel somewhat of an obligation to the people who electedme to do what I think needs to be done and in this instance is to try to end this thing. It is somewhat of a bitter pill to swallow, .but there's been a lot ,of bitter pills to swallow on this incinerator case. There's nothing good you can say about it. Evans: Woody, I just want you all to have the benefit of the information that we shared with you. Also I think that Mr. Patton very aptly told you that it may not be over if a citizen wants to bring an action and I think that it's also important for you to understand that if they do bring an action on the $2.6 million and succeed, they will be entitled to attorney's fees. Bassett: : Oh, I think we all understand that... Daniel: Yes, very well, Dale; thank you. 14 • 1 20]. May 21, 1996 Schaper: We've paid your salary, now you want your pension too. Williams: What bothers me is that we could try to settle this case for $2.6 million and there could be a quit -suit by a citizen where we could be enjoined because we would be in violation of the Supreme Court's order and so we wouldn't be able to settle it anyway and we'd be facing another citizen's suit and we wouldn't have the case settled. Daniel: Don't give them ideas. Schaper: I guess, let me be real ignorant, I guess there's no way to get an opinion from the Supreme Court as to whether or not we can settle this case ... you can't get them to do anything until you've already done something. Bassett: It took three or four years to get the last one. Schaper: Doesn't work that way. And there's no body, the attorney general can't ... no. Daniel: These lawsuits came about because of some wrongs, perceived wrongs, against the citizens, but the continuation of this lawsuit is going to damage the citizens and the City and hurt the citizens more if this litigation continues. You can look at it that way. That there were some mistakes made; this Council was not in on that, but I think the City has paid, the citizens have paid and paid much more than they should have, so, I perceive that as people who are anti- government who just want to continue to hurt the city. I mean, I think it's time for everybody to cooperate and let's get this behind us and this threat of more lawsuits is certainly no good. Hill: That's what's concerning me, Mr. Evans, I believe you were here asking us to settle before on your fee and, that you would not have anything else to do with this suit. Again, that wasn't explained, except for this one thing, it was in the brief but it was not brought out at the time of the hearing or the meetings. And since then you've filed a related lawsuit, I understand, to recover some other fees related to this, but not from the City. Evans: That's correct. Hill: And you're here now threatening another lawsuit if we do settle. Evans. No. I'm not threatening any additional lawsuits. What is being explained is the exact legal document that was executed and I would differ with you in that I believe that Mr. Rose explained we agreed to not be involved in any of these other law suits, even though we agreed to help. No one has asked us, really for the help, very much, a couple of calls have been made. Not in any interest to get into a legal analysis of what these other lawsuits are because I'm sure our opinions would differ, but we also informed your attorney, and I think he informed the council that we stood by the Supreme Court's decision to the extent of enforcing it and that's 15 202 May 21, 1996 all that we're trying to explain to you now. That's the deal that was made; that's been the deal from the beginning and that we've honored it to the this point and this is also honoring that agreement, that that Supreme Court decision would be enforced. We take that this action is in violation of that Supreme Court decision. Now, we have asked; I don't have any qualms addressing any of the other related activities going on in this case cause we believe FGIC should pay their respective share of the fees. And the City paid a portion, but we think that they should pay their share as well and that the City shouldn't be the only one paying and that's the only reason we brought an action for them. We think they should pony -up because they are the culprit. I don't understand why the City Council seems to believe that they're totally at fault here. The only fault they had was trying to pay the bonds in the beginning. If they had not done that, they would not have had a lawsuit. The one that we brought would never have been brought; there would be no fees paid. That was_what the action was that, in my opinion, was in error and now that's exactly the situation we're in again. The City's being asked to pay on bonds. We. maintain that they're not supposed to; they're not obligated to and thatthey should not. We believe that the insurance company, who this City paid a half a million dollar premium to for the insurance should do what they contracted to do and that's pay the bonds. Normally, when you buy insurance, and you have a loss, you get to collect on it, you don't have to pay the loss yourself and that's what, in effect, is transpiring here. The insurance company bought that risk and they need to pay it. Now, Mr. Patton's just explained to you that they've agreed they have that risk to the tune of $12.3 million. If they have that risk to that extent, we think they should have it for $15 million. Daniel: Well, I'd like to hear Mr. Patton's response to that; to all that's been said. Patton: Let me tell you first, Ms. Daniel, that there is no law in Arkansas; there almost never is that answer this question completely and I think the other lawyers here will tell you that: Whether or not we are "settling a lawsuit" or "paying off bonds" is something that no body can truthfully answer except a judge. I am of the opinion that we are within our authority in settling a lawsuit. I will say this, and I really do want the Council to understand this. First of all, the insurance policy that was written here, I was of the exact same opinion of what you just said, except that I found out within the last couple of months that all bond issues are insured just like this; with the right of indemnity by the insurance company from the generally the municipality or the authority. All those insurance policies are basically the same and it astounded me that, like you say, somebody pay a half a million dollar premium and you're truly not getting a thing except you are getting a guarantee that the bondholders will be paid. Now, whether FGIC, under the Supreme Court decision can figure a way, to get Fayetteville to pay back like they agreed to do, the Supreme Court said that agreement's invalid. I truly can't tell you. I can tell you this FGIC can only be required to pay a total of $16 -million. We have gathered up $13.4 million from the other defendants and FGIC, actually we may have gathered up $13.8 million now, depending upon what they say about Scottsdale. I try to be practical in 16 203 May 21, 1996 my practice of law. I love Fayetteville The only reason I came up here to interview for this job is because I was requested to submit an application. I did it because of my deep love for this city and the university that resides here. I am not saying my advice to you is right, but it is my advice that you are better off in the long run paying the $2.6 million, accepting, I don't call them threats, these two lawyers are simply telling you what they are going to do. But, we can have utter financial devastation within the next 60 days occur that will destroy this city's financial worth. If the credit of the City of Fayetteville is destroyed and I am not as confident as lawyers are that the Arkansas Supreme Court has told us what the law is regarding this. The Arkansas Supreme Court has answered some questions about this but there are any number of questions that have not been answered, securities violations, securities fraud. Something else that I am concerned about, let's say that we continue on with the lawsuit against the other parties. I worry, you know at some point in time I have got to quit giving my services away and I've got to say you guys are going to have to pay me 25% of what we recover, which was our original agreement. I am afraid that there is a very good likelihood that we could reach a very satisfactory result at the end of this lawsuit, I could take 25% of it and Fayetteville would be worse off than they are if they settle right now. I do appreciate the courtesy and the kind comments that these lawyers have made about me but I don't have any vested interest in this thing other than a genuine desire that this thing be finalized for this city. I wish I could guarantee that it was going to be but I can't do that. In answer to your question in a long fashion, Ms. Daniel, is there is a chance, whether it is a great chance, small chance, of losing the Federal Court lawsuit. If we do, it is a disaster. It is an absolute financial disaster for the City. Daniel: Thank you. Kent Hirsch: I represent the rate payers also and I don't think we are any strangers. I'll be very brief but I'd like to review just a little bit of history. Forgive me if I miss my dates, but I believe t I believe it was August of 1989 when we heard potential financial gloom and doom and this Council passed Ordinance 3444 to pay off the incinerator bonds. We immediately filed a tax payer action. Defenses were raised that it's really not a tax, it is a fee and it's really a settlement of the lawsuit or the potential lawsuit. Here we are seven years later. First the ordinance was passed to pay off $7 million or $5 point some odd. Now here we are seven years later whereas to do essentially the same thing. Although this time it is $2.6 million. The court has told us that we can't pay any of it. That is where we are and I concur with everything Mr. Evans has said. We will be there to enforce the Court's opinion. One exception though, we did reserve the right to enforce contempt action in the Supreme Court as well the Chancery Court. That is the only thing, Mr. Evans, that I disagree with you about. Katherine Barnhart: I am Katherine Barnhart. I am the plaintiff of all of these lawsuits. It is a difficult lawsuit. I have stood before many people for many years observing, listening, trying to figure out where the truth lies. As an average citizen of the State of Arkansas, I believe that the State Supreme Court is the one who makes the final decisions on what is law and what is not law. The State Supreme Court interprets the State's laws. The State Supreme Court has made 17 204 May 21, 1996 a judgement. The judgement says the City cannot spend one more dime on this action. You cannot take anymore of the citizens' money and use if to pay off a debt that the Supreme Court , said is not the City's debt, that the City is enjoined from paying it. I am not threatening anything but I'm still here watching, and I will be, and I'll be very interested to see how the City Council acts. I appreciate all of the work that all of these attorneys have done. I know negotiating a settlement like this is not easy. Mr. Patton has done really well, however, the City is not supposed to spend anymore of the taxpayers' money. Miller:. I am kind of overwhelmed by all of this because I am not an attorney. The definition of a rock and a hard place keeps popping in my head. We are in a real situation here and I am going to be studying this and asking lots of people questions over the next week. And I'll tell the people of Fayetteville that I'll be earning my $1.60 per hour that I make as a City Council member over the next couple of weeks working on this. I do want to see this come behind us because I have been up here now for almost four years and I'm really tired of trying to clean up other people's messes. I am a little jealous of lawyers because I went to college for about ten year, got some degrees, and make $15 per hour. Sometimes I wish I could make $150 an hour but I don't, so I really don't want to make anymore lawyers rich either. My bottom line is I got some homework to do in the next week and I'll tell the people of Fayetteville right now that I am going to work real hard on this. I will make the best decision.I can. There have been some very good arguments here tonight, one way and another. People that I respect on both sides have made very good points. The only; decision being made is my decision now and the Council's decision. All of us have very tough jobs to make here in the next couple of weeks. Hill: Do we have two weeks? Patton: If that is what you guys want; I suspect we can arrange that. If there is an emergency, I can notify you. Perhaps then it would be appropriate to call a special meeting.I will say this, the lawyers involved have all been most cooperative. The only thing that worries me is sometimes judges don't really care how cooperative lawyers are. They want something done or a decision could be rendered that makes everything mute one way or the other. I think that we have got two weeks. The lawyers involved in both lawsuits have no problems informing both the courts of the necessity of giving us a little time. Miller. I appreciate that because this isprobably the most important decision we have made up here. . • Patton: I would ask, Mayor, I certainly want to be here, if for no other purpose than to answer questions when the Council does discuss this. If you could give me as much notice as possible, I would appreciate it. 18 205 May 21, 1996 Bassett: It would be on June 4, 1996. That is our next regularly scheduled meeting. I agree that that is the proper thing to do, to give us and the citizens two weeks and it be done at a regularly scheduled meeting because my own view is that I want everybody to know what I am going to do on this. Somebody is going to have to answer for this decision later on. I want to be on record to as many people as possible. Rose: I have tried to analyze the decision and have truly agonized over it because I know it is very important to this community. I don't in any way want this decision to open back up the wound that this City has at least scabbed over some little bit since it first started when I got here in 1989. I look out there now and I see eight Council members and not a face was here in 1989 and my client has changed somewhat. I even went back and read the canons of professional ethics. I thought maybe that might help. I think that my obligation to you as a City Council and to the citizens of Fayetteville is to try to give you enough information to make an intelligent choice. I think that is my job. In that regard, I would like to be available to you within the next two weeks if there are any questions, I will get them answered for you. I will see that you get the right information. I'll do my damdest to make that happen. The other thing that I have attempted to do is to make the settlement negotiations as open as possible under the circumstances. We have sought to involve a wide range of folks within the community. We have tried to involve and keep them approached of what is going on. I don't want anything to be done surreptitiously or in any dark corner anywhere. This is an important decision for this City and one in which you have to make an intelligent decision, be it yes or be it no. Whatever your decisions is, that is fine and that is what were committed to living be. I know Mr. Patton agrees with that as well. Let me tell you the things that I looked at in trying to analyze it. I have got a trial in Federal Court The City is being sued by the trustee over five different issues, over two constitutional issues of the United Stated Constitution. In addition to that we are being sued as an Arkansas securities violation. Also, a breach of contract under state law and a breach of warranty. It means that we are being sued over not building the incinerator which they say, the trustee, was an obligation of the authority which was our alter ego agent or we were the controlling person of. That is the cause of action. What are our defenses? I gave you all today a copy of a motion. We also filed a list of exhibits. We can boil all that down and our defenses are really two. One, were saying the Statute of Limitations has run on all or most of their claims. In other works, they did not sue in time, regardless of all the tolling agreements. Secondly, it is the exact same thing you have heard from Ms. Bamhart's attorneys and from Ms. Barnhart, that is that the Barnhart case is determinative of this issue. Now, if we are right, we are fine. If we are wrong, of course we are not. If we are wrong, what is at risk? The trustee has $5 million approximately over there. I know what they are going to ask for by way of damages, that is Boatman's the trustee. I know that because the Authority defaulted and they tried to get a judgement against the Authority. It is the same one they are going to try and get against us These are the figures they tried to get against the Authority which they will try to get against us. The total unpaid principle and interest on those bonds is $35 million and some change. They asked for a 19 206 May 21, 1996 „judgement against the Authority in that full amount of $35 million. I have no doubt that they . will attempt to in our case as well. I don't think that is realistic I think the realistic amount is `.$16 million. That is the amount of money it takes to defease. Defeasance is a weird deal, it is ..where you go out and buy some other bonds to pay off these bonds or you buy some other t .^ securities to pay off these securities. That takes $21 million but thetrustee already has $5 million. I think that is realistic, plus attorney fees, plus expenses, plus costs, plus all of those things. Do I have a royal flush? Do I have the highest hand in poker where it would be stupid to back out of this thing? I don't think so. I cannot tell you as the City's attorney that my evaluation of this case is that I have got a royal flush that cannot lose. I have got to tell you that I think we could be, that it is possible, that a judgementwould be entered against us..I sure hope not. I hope what Kit Williams said and quoted out of our brief would be exactly right and be taken as truth and I hope what Ms. Barnhart attorneys say is exactly right, that this case is over with and were out of here. I hope that is true but I can't tell you it is a royal flush. If it werea royal flush, it would be stupid to settle. It almost be a fraud on people to settle if it were a royal flush because what would be the reason to settle? If you are lead pipe certain, as some people are and I respect their opinions, then probably there is no reason to settle. But if there is a reasonable doubt in your mind to think that we might be held liable, what are we risking? If we settle, we eliminate the risk of that $16 million being a large claim. We spread the responsibility toward this total $16 million fiasco among five parties. We eliminate all of the claims that are in action right now. All of the State Court claims and the Federal Court claims would be gone Looks like, and I take Mr. Evans at his word, incidentally they have been excellent help to me in my Federal Case and I really appreciate it, they want to defend this. I take them at their word that they will sue or at least attempt to prevent the City from settling. Trust me, if it were a simple case; if that factor were not there, if we were just left with should you risk $16 million or should you risk $2.6 million. To me, I would have no trouble with the decision, especially if it would stop the bleeding on this and get this behind the community. The thing that makes it difficult is the possibility of continued litigation. That is the bone that sticks in your throat. As hard as it is to swallow that bone, I still believe that the settlement is still in the best interest of this City. I wish it were a better settlement. I wish they were paying all of it and that we didn't pay the $2.6 million. I wish that we didn't have the threat of another lawsuit and have to think about that but that is not reality. That is my best opinion. I want you to make an intelligent decision so if there is any question that you want answered, you ask and I will do it. That door is open to any citizen of this town, anybody wants to know what is going on or what are the factors or .why I said what I said or they want some more information, I welcome them to call. Schaper: Mr. Evans case, of course, is a class action lawsuit. What does it take to make class? 20 207 May 21, 1996 Rose: It takes one person that the judge and the court certify as being representative of the class of people that he seeks to represent. Schaper: There was some big class action suit that was an airlines or somebody and since I buy airline tickets they asked me if I wanted to be a member of that class. People can exclude themselves from a class. Can they not? Rose: They can. Under some circumstances they might. In fact, some individuals in both the sales tax lawsuit and in this lawsuit sought to opt out and were not given the opportunity to do that but yes, generally you might. Schaper: So if the good folks of Fayetteville decided that they have had enough of this, they could opt out of the class. Bassett: They decided that years ago. The lawyers just would not let them do it. Williams: The class has already been certified though as a case continuing. Ms. Barnhart as been recognized as a class representative. If they bring a contempt action in that case, there is no class considerations. That class is still there, I think. Schaper: So we are stuck with the class even if everyone in Fayetteville except Ms. Barnhart decided that they did not want any more of this nonsense. Young: They want to sue themselves again. Mayor. I assume that it is your pleasure to leave this item on the table unless you want to make a motion. Daniel: I just want to make one more statement. I want to appeal to the humanity of Ms. Barnhart and the lawyers, please, for the people of this City. Patton: I do want all of the Council members to know that you are free to call me. If you have a question and you need to talk to me, give me a call. Young: I plan on calling you tomorrow. Mayor: Thank you very much. 21 :208 May 21, 1996 OLD BUSINESS - Mayor: We'll move onto the regular Agenda. The first item being old business: Item "A" is the Ordinance amending the Zoning Code of the Code of Fayetteville to add definitions of facilities emitting odors and facilities handling explosives, to provide a designated use unit for such and require conditional use approval. The ordinance was left on its first reading at the May 7 Council meeting. Williams: - I move we suspend the rules and go to second reading. Miller: Second. Upon roll call, the motion passed by a vote of 7 to O. Rose: Read the ordinance for the second time. Mayor. Did you all discuss this in the Ordinance Review Committee last time? Williams: It was discussed a long time ago. It's now ready, for decision. I think we just wanted to give the citizens a chance to comment. Mayor: I don't know, I've looked at this real close; that's a pretty broad brush you're painting with there. Some of this can come back to kinda haunt us with business we've already got operation in Fayetteville. Williams: Well, there are variances, of course, in, conditional use rather, that would be in for any expansion and every business that's already operating are grandfathered in anyway. I think I've got confidence in the Planning Commission to grant conditional use if one is in best interest of the citizens. Mayor: That facilities emitting odors, any function that involves the process or emits or has a potential for emitting an odor is pretty broad. • Miller: `._ So is Hanna's Potpourri. Mayor: That's right; perfume factory or soap factory. Williams: I think we did put in there it had to be an noxious or clearly offensive odor; didn't we have that in there, Jerry? Miller: Well, that would be like B -B -Q places to me. 22 Mayor: 209 May 21, 1996 I think the intent of the ordinance is good, particularly with the obnoxious odors and explosives and so forth. Kit: Schaper: "reasonably odor". Daniel: Schaper: Williams: Schaper: Rose: Schaper: reading. I think we did put that in there ... We put Item "D" in, but I think there is a little bit of a mis-print. It should say, satisfied that the permitted use will not generate a generally offensive or noxious Just put an "s" on odor. You could do that too. Let's put the "s" on odor. Put the "s" on odor. I think that's a type -o. I move to suspend the rules and put the ordinance on the third and final Williams: Second. Mayor: Would you call the roll, please? Upon roll call, the motion passed by a vote of 7 to 0. Is there anyone in the audience here to address this particular ordinance? Rose: Read the ordinance for the third time. Williams: Mr. Mayor, I initially started this by just recommending that we have an ordinance to make a conditional use out of rendering plants and paper mills, but ... the Planning Commission wanted to include this ... we had a lot of discussions in the Ordinance Review Committee about this and I think, even though I was concerned about its broad sweep initially, I still think it's probably still a good solution now. Mayor: Do you have something you'd like to say, Steve? 23 210 May 21, 1996 Steve Ward: This was taken to the Manufacturer's Group within the.Chamber of Commerce and reviewed. There was some concern about what a noxious odor was and that was going to be clearly defined and to my understanding it was The industry shared the same concern. They do not want industries brought in producing foul odors and/or causing a hazardous situation; that's their neighborhood and they're very much concerned about it too. There was no objection from the manufacturing community. In fact, there was support for it, so, again, I hope that common sense prevails, if indeed somebody, as we've seen and been discussing earlier tonight, all it takes is one person to come out and say that Hanna's Potpourri is a noxious odor and away we go. Williams: It's not like one person coming in, it would have to be a fairly objective standard, a community standard. Steve Ward: Maybe we could get a class action suit going with one person. Miller: Mr. Mayor, I would like to make a statement on this real briefly. I had tried to get in on the process a couple of times; unfortunately, whenever meetings came up, I was somewhere else. I at first was probably going to oppose this because I didn't think it went far enough. I mean it's nice that we ban things that smell and things that go -boom, but I was more concerned with toxic materials; things that. you can'tsee; things that you can't smell; things that kill people by mutagenic properties, carcinogenic properties, just flat out poisonous. I still would like to protect the people of the City of Fayetteville from mutagens, carcinogens and poisons; however, because not so much due to my fault, although it was a little bit, that I didn't get into this process as much as I would have liked to, I will support this ordinance tonight and get down and do my homework after I do the homework on the incinerator lawsuit, of course, and put in my 2 -cents about things that I think far more dangerous to people than things that smell; things that make noise and explode. However, like I said, I will support this at this time and attempt to' bring any amendment that I have in mind at a later date. n _ Mayor:` 4 Shall the ordinance pass? Upon roll call, the ordinance passed by a vote of 7 to 0. ORDINANCE 3971 APPEARS ON PAGE OF ORDINANCE BOOK CONSENT AGENDA-; Mayor: Okay. The next item on tonight's Agenda is our Consent Agenda; consideration of items which may be approved by motion, orcontractsand leases which can be approved by resolution, and which may be grouped together and approved simultaneously under a "Consent Agenda". 24 211 May 21, 1996 A. Minutes of the May 7, regular City Council meeting. B. A resolution approving the fifth amendment to the Articles of Incorporation of the Walton Arts Center Council, Inc. RESOLUTION 62-96 AS RECORDED IN THE CITY CLERK'S OFFICE. C. I've been asked to remove "C". We'll discuss that separately. D. A resolution awarding Bid 96-31 to the lowest qualified bidder, Midwestern Equipment Co., for the purchase of Sewer Wash Equipment in the amount of $108,616, less a trade allowance of $4,000 for a total cost of $104,616. RESOLUTION 63-96 AS RECORDED IN THE CITY CLERK'S OFFICE. Daniel: I move the Consent Agenda. Miller: I believe in clean sewer pipes so I'll second that. Upon roll call the motion passed by a vote of 7 to 0. Item C Mayor: Okay. Item No. 3C which was "C" that we removed from the Consent Agenda is a resolution approving a budget adjustment and an amendment to the Community Development 1996 Action Plan to increase funding for the Yvonne Richardson Community Center to complete parking lot and site improvements. Kit had some comments he wanted to make. Williams: Well, I drive past the Community Center and I've noticed it's coming along real well now and I just wanted to have this off the Consent Agenda so we could talk about it very briefly. I think it's looking real nice. I don't know if we got any slides or anything taken. Miller: I've got slides ever since the first slab was poured: I'll be bringing them. Williams: I strongly support this and I think this. I wondered for a while if we were ever going to build anything there. We had a mountain there for a while but now it's finally being constructed upon and it's amazing to see how fast it goes and I just hope we can get this thing open as soon as possible. Mayor: We have been offered the opportunity to buy a little more property around there so we may be able to offer some more outside room for parking for outside play and so forth and would like to mention to Stephen and some of his neighbors down there have done a lot of work 25 212 May 21, 1996 cleaning the lot across the street which is going to be part of the park and I'm real pleased the way it's coming along. I just regret it's taken so long to get this far, but it's much nicer than what I envisioned when we started. Miller: I have to say, I bought a brand new lawn mower that day and I mowed my own lawn and it just wasn't enough. I.was in a lawn mowing zone. Hill: Are you tired yet? Nope. Okay, come on over then. Miller: • Miller: Anyhow, I hit a big ole rock mowing.that thing down there; had to get my blade resharpened, but anyhow, I want to add my 2 -cents. I've been watching that thing being built for quite a while because you get to ride past it, I get to go out my front porch, stretch and look at it cause it's a half a block away from me and I'm just pleased as punch that that is going down there I'm -also glad the City's willing to spend a little bit more in money on this We have built, including this one, three community centers in the last year; the two new schools have community centers attached to them too. I believe we've spent the least on this one..It turned out really nice. I was a bit apprehensive when I heard that there was going to be a metal building built there, the metal building actually looks quite handsome and I want to thank whoever designed that building and built it. It doesn't look as bad as I thought it was going to. Kit: It's got a nice brick facade on the front. • Miller: Right and, yes, it looks nice. I just want to say that this is money well spent. To me every thousand dollars spent on this community center is money we won't have to spend on prisons later on down the line and this is a.really good project and I am just as pleased as I can be to support this and tovote for this tonight. ti Mayor.. Would somebody like to make a motion? Miller. Unless somebody else wants to say something, I move the resolution. Mayor: We have a motion to second to pass the resolution, would you call the roll, please? Upon roll call the motion passed by a vote of 7 to 0. RESOLUTION 64-96 AS RECORDED IN THE CITY CLERK'S OFFICE. 26 213 May 21, 1996 AMEND SUBDIVISION REGULATIONS Mayor: Item No. 3 on tonight's Agenda is an ordinance amending Section 159.33 (E) of the Subdivision Regulations to allow the Planning Commission the ability to require improvements to State Highways. Rose: Reads the ordinance for the first time. Mayor: Anyone have any comments on this? Daniel: I did ask a question at Agenda Setting about delay; the public might want to know, like for example, if we decide that there needs to be a stop light ... we've had quite a wait at times, the City, to get the okay from the state, right? Alett Little: Yes and this should not have an effect on the amount of time that it takes. What it should have an affect on is the ability of the City to require a portion of those costs to be paid by the developments that are causing the need for the improvement. Daniel: So the City could assess. Mayor. Okay, this Ordinance is on it's first reading. Do you all want to leave it until next time? Miller: I would always kind of recommend that we don't blaze through something at one meeting. I would have no problems going through the next reading, next meeting passing this. I feel kinda strongly I always like to give the citizens a chance to respond. Daniel: Yeah. I agree. Mayor: Is there anyone in the audience that would like to address this proposed ordinance? Kit: I have a question for Allett. I see that we have taken out the part of the ordinance which previously said that the sub -divider shall be permitted to make a cash contribution in lieu of actual installation. Does this mean that if the sidewalk is not feasible that there's a waiver granted that there's going to be no cash contribution, so basically the developer is just going to be saving money on this? Little: The waiver, if the Planning Commission were to grant the waiver, would relieve the subdivider or developer of the responsibility as well as any financial obligation. The reason that this particular statement was taken out is because it conflicted with our recently passed ordinance which does allow the guarantees in lieu and just a little bit further it says, "which construction shall be an amount equivalent to the estimated cost of construction the required 27 214 May 21, 1996 sidewalk". We now require 150% of the cost of constructing the required. sidewalk if .they're wanting to postpone this. So we just took that out to make that consistent with our guarantees in lieu ordinance. . Williams: But are you saying then that if the Planning Commission decides to waive the sidewalk requirement, that's the end of it at that point; no sidewalks, no cash will be required? Little: Right. The only time that we take the case is when they have not constructed it. They intended to construct it, but their construction has not reached the point where they're able to construct it and they want to go ahead and final out their subdivision, so if they will final out their subdivision and place the 150% with us, they may go ahead and begin to sell the lots and ;do those sorts of things, and then put in the sidewalk. If for some reason they don't put iii the - sidewalk then the City has 150% of the cost of it and we would be left with that •responsibility. Williams. So basically, this really doesn't change whether or not they're going to payfor the sidewalk. Little: No. It doesn't. Miller: I would like to add too that the next Agenda item, No. 4, will require, and I assume that any state highway that's running through townis probably either a collector of a major/minor arterial and this next resolution you have coming up will require 6' multi -use trails on both sides so I think that that might solve our problems ... will the sidewalk be required or not and if we pass "for" it will be I'm jumping a bit on No. 4 though is that the Trails Advisory Committee will have input at the time because, it will be the Trails Advisory to decide if the trails are appropriate or needed in that area before it gets kicked back. That's the jist of this too. Young: So what you're saying is that it wouldn't require a waiver by the Planning Commission; that it would be reviewed at the very beginning and that decision be made there. Miller: Exactly. Then we'd make our recommendation. A couple of questions that were brought up just now might be resolved by our next act: Hill: Allett, what about Assembly Drive? Little: I beg your pardon. Hill: Is Assembly an arterial or a collector? Little: Neither. It's local or residential street. Hill: It's a state highway. 28 215 May 21, 1996 Little: No. We have exchanged Assembly Drive and the City has agreed to take over that maintenance. For Razorback Road, the state has agreed to take over the maintenance of Razorback Road as soon as it is constructed. Schaper: We approve that? Crosson: It was approved years ago. Little: I think 1989. It pre -dates Kevin and I. Mayor. Let's move on to Item 4 if we're going to leave 3 on this reading. Schaper: Let me just ask one more question on Item 3. The wording as I understand it; the only reason for granting a waiver for the sidewalk would be that the topography is such that it's just not practical to put a. sidewalk in, there's a slope grade or something and it would just consume too much land or just be really impractical. Little: That's correct; there's only one reason. Schaper: Otherwise sidewalk. Miller Multi -use trail, please. Mayor: Okay then well leave this on the first reading, it will be on the second reading at the next regular meeting. MASTER STREET PLAN AMENDMENT Mayor: We'll move on to Item No. 4, A resolution amending the Master Street Plan requiring newly constructed or reconstructed collector, minor, and major arterials to have multi- use trails on both sides of the street. Daniel: Mayor, I'd like to say something. Alderman Miller and I are on the Trails Advisory Committee and in the last week or so there was an article in one of the local papers called "World Watch Report" ... "we're still in trouble" from the Associated press and the first paragraph reads like this "the world set more records in 1995. Some good and some bad. The down -side, it's hotter and there's less to eat The up -side, people are earning more, voting in more free elections and riding more bicycles" Williams. Hopefully with helmets on. 29 J 216 • May 21, 1996 Miller: Thanks, Heather, for that. I guess I should say something here. Like I said, this comes under Trails, went to Streets, was slightly amended, went back to Trails, went to Planning, was slightly amended again and passed by Planning, unanimously, which I really appreciate them for doing that. They wanted to kick it back to trails, but I was not to be denied that night and, bless their hearts, they took it on themselves and made their own modifications on the spot, passed it unanimously. I am avid bicyclist: I think you've all probably caught on by that. These multi -use trails are not for me. I ride on the highways. I mean I ride on the streets. One of my favorite things is to blow past cars that are stopped in traffic and they can't go as fast as I can. It gives me a very vicarious thrill to be able to go faster than traffic, but this is for children and people that can't ride very fast. These are for people that want to ride their bicycles and go buy groceries or ride their bicycles and go to work and these are for trails for kids that want to get to school. We've been handed a cost estimate of this resolution over the next 5-6 years and it looks like a tidy sum. We're looking at perhaps costing the city a quarter of a million dollars over the next six years to widen what would normally be a 4' sidewalk to a 6' sidewalk. I don't know enough about estimates and things, but this came from someone I consider a reliable source and I consider these valid numbers and if you're balking at this number, I would suggest thinking about how much the City's going to spend the next six years on pavement for automobiles and would guarantee that's going to be in the tens of millions so I would ask that you don't flinch at this number and I think this is a modest and accurate number. Remember, we're spending this to keep kids safe on bicycles; to encourage kids to ride bicycles because right now this town is not friendly for kids to ride bicycles. The other day I saw on Huntsville Road to go to work and I saw about an eight year old boy riding a bicycle on a 1' shoulder along Huntsville Road with cars going by him at 50MPH. I don't like to see these things. I want to have a city that's safe for children to ride, to be happy and to become: healthy: One .thing I remember when I was a kid, I rode my bicycle every where and a still try to. I was a scrawny little kid but I was tough and I was healthy and I want to see kids stay that way. I want to make it safe for them and I really urge Council to pass this tonight. Crosson: I would point out that this is a multi -use facility that you're approving. Bicyclists and joggers and walkers. Mayor: That figure, Stephen, thatyou're talking about is over a five year period. That conies to less than $55,000 a year. That's not a great sum in the scheme of our streets or even our sidewalk. Schaper: Nothing compared to our legal fees. Mayor: If we have the money to do any streets, it may be a whole lot more. 30 217 May 21, 1996 Miller: I just want to add, it's been a three years and there's some people I really want to thank. For example, we've hired a Trails & Sidewalk Coordinator whose job it will be to help formulate trails and multi -use trails and sidewalks and also to make sure the city is in compliance with the American Disabilities Act requirements of our sidewalks I thank the Mayor's office for doing that. I maybe brought that up a couple of years ago and I really appreciate the fact that that's happened. Also the Council has been very supportive on this and we're finally getting a little something going; hopefully in the next month or so, we'll get a few lanes in the downtown area; going to get some bike racks in the downtown area It will encourage people to get out of their cars and bicycle; be healthier people and make it a healthier city. Sometimes it seems like it has been a real up -hill battle, but we're really starting to get something going here and this is a project of love that's probably going to take a generation, but we've got a good start and I'm rambling on, so I will quit. Young: Are you going to move the resolution? Miller: I always want to make sure that everybody gets a chance to speak. Bassett: I just want to say thank you for all your work I know this means a lot to you and I think this is a good thing and I respect you for the work you've put into this and the other people who've worked on it. As usual, I deserve no credit for this, but I think it's a good deal. Miller You help make the environment. Daniel: It seems like it has been slow some on the Trails Committee has gotten a little discouraged, but I think it's sometimes good to go slowly because we've kind of won people over very slowly; maybe they're just tired of us talking about it. One Fayetteville citizen recently commented to me, "I always take my bicycle with me when I travel in my car and I ride in cities where I visit and I come back home and I don't have a place to ride", so maybe we'll have some places for our vacationers, our own people now. Schaper: I'd add one correction to what you said, Stephen. It's not just that it's not safe for kids to ride bikes in this city, it's not safe for anybody to ride bikes in this city and maybe you do it, but I have questioned your sanity in the past. Miller: You're not the only one. Schaper: I'd love to ride my bike and I don't do it because on the roads where I'd have to go I feel like I'm taking my life in my hands. I did it once out on Mission and we said "never again" ... no matter where you are in town, you wind up being on an arterial or a state highway and we know what the state highway department thinks about pedestrian facilities. Are we getting any pedestrian facilities on the Razorback Road extension? 31 `"218; May 21, 1996 Crosson: Quite frankly, can't tell you. Williams: I imagine, well, 6th Street has sidewalks along it and this is one of the most•recent projects they've completed: Miller: Sixth Street has 6' wide sidewalks on it. There is some breaks in the continuity. I have ridden it backand forth; there are also some curb cuts that need to be made, but that's also being done under the ADA Requirements, so eventually, hopefully, that will be at least safer. Schaper: The State's proposal for 265 has no sidewalks Crosson: That's included in that estimate as well. Schaper: We would go back and do that. Crosson: As recalled to me, Razorback does not have anything as well. Williams: Is that right? Crosson: I thought that to be right, but I want to verify that. Schaper: Yeah, I think that's the case. Miller. Well, after, this, we can start requiring it.. Williams. I should note for the record too that this went before the Planning Commission and passed there unanimously 8-0, so I think it's certainly been well looked at and I. think it's a good proposal. Miller. I went through every channel. Schaper: That's good; that's really good. Miller: Because Cyrus is wanting to second this, I will move the resolution. Young: Second. - Mayor: Shall the resolution pass? Upon roll call, the motion passed by a vote of 7. to 0. RESOLUTION 65-96 AS RECORDED IN THE CITY CLERK'S OFFICE. 32 May 21, 1996 BID WAIVER 4 219 Mayor: Item No. 5 is an ordinance approving a bid waiver for the rental of a large milling machine to be used in the In -House Pavement Improvements Program. Rose: Read the ordinance for the first time. Miller: I know we're doing the over -lays now and I know that we have a machine that does strip pavement, but from what I gather, it is very inadequate. Crosson: For this type of work, it's not suited for this type of work. What we're talking about here is full -width milling profiling and the machine that we have is primarily for taking out curbed areas and drainage work. Miller: It almost seems to be bouncing around my head that if we rent a machine that does the job faster than what we're doing now. Young: The machine we have now basically grinds off the top, but his machine here will plane it to a certain grade. There's a big difference. Miller: So it would probably be better paving over it Young: Right, that's exactly right, less asphalt to do it cause you can put it on grade. Miller. Almost seems like bit of investment here is very pragmatic Crosson: We are recommending rental of this. To purchase the machine is over a half million dollars and it's probably better to do this for the major streets that we're going to be doing it for, rather than buying that machine. Continue to use the miller we have for the other work that we have. Mayor: We need this in order to be able to do the number of over -lays we have planned for the remainder of the year, during our business season and, of course we've done a lot of the narrower and shorter stretches, but now we need this to. Miller: We appreciate the work you've done on the south side. This has probably helped on 24th Street going up there. Williams: We discussed this at the Street Committee Meeting also and it got unanimous approval there. 33 220 May 21; 1996 Schaper: I move to suspend the rules and go to the second reading: Miller: Second. Upon roll call, the motion passed by a vote of 7 to 0. Rose: Read the ordinance for the second time. Williams: I move we suspend the rules and go the thirdand final reading. Daniel: Second. Upon roll call, the motion passed bya vote of 7 to 0. Rose: Read the ordinance for the third time. Mayor: Any other comments? Daniel: Yes. For how long is this rental. Crosson: 3 -months. Mayor. Shall the ordinance pass? Upon roll call, the ordinance passed by a vote of 7 to 0. ORDINANCE 3972 APPEARS ON PAGE OF ORDINANCE• BOOK VACATION VA96-7 Mayor. Item No. 6 is an ordinance vacating easements located on property north of Joyce Blvd.. and west of Highway 71 Business as requested by. Northwest Engineers on behalf of the Northwest Arkansas Mall.. 1 `Rose: Read the ordinance for the first time. Williams: I move we suspend the rules and go to the second reading. Young: , Mr. Mayor, I work for the company that's presenting this, so I will not participate in the discussion and be abstaining on the vote. 34 4 May 21, 1996 221 Miller: Second. Upon roll call, the motion passed by a vote of 6-0-1, with Young abstaining. Rose: Read the ordinance for the second time. Miller: As I recall, this is an oversight that should have probably been taken care of years ago and we should take care of it tonight. Williams: Second. Mayor: Does that move it to the third and final reading? Miller: I move we suspend the rules and go to the third and final reading Williams: Second, still. Upon roll call, the motion passed by a vote of 6-0-1, with Young abstaining. Rose: Read the ordinance for the third time. Mayor. Any other comments? Shall the ordinance pass? Upon roll call the ordinance passed by a vote of 6-0-1, with Young abstaining. ORDINANCE 3973 APPEARS ON PAGE OF ORDINANCE BOOK OTHER BUSINESS Legal Fees - Federal Incinerator Case Mayor: We have another additional item to put on here tonight. The City Attorney has brought a request for the approval of expenditure, would you like to explain that, Mr. Rose? Rose: Thank you, Mayor The request I have is for an expenditure above the $50,000 for legal fees incurred in the defense of the Boatmen's vs the City of Fayetteville in the Federal Incinerator Case and approval of budget adjustment for that amount. When I received this case in January of this year, we had an answer immediately due and I formed a Professional Services Selection Committee which allowed Nancy Hamm to assist me in preparation of the answer in this case. I have authority under our City Rules and Regulations to pay her up to an amount of $20,000. Until this case is settled, or until it goes away through 35 4-1 ,222 May 21„ 1996 trial or whatever, I have no choice but to proceed and proceed vigorously. This is an example: of Ms. Hamm's work incidentally and this is due m almost total regards to her efforts on behalf- of ehalfof the City which is an incrediblepiece of work. She has assisted me and I have found her assistance to be invaluable. Her services are approaching that $20,000 mark and I cannot exceed that mark without 'your approval and so I picked the $50,000 level because that is the amount of money that you authorize insurance attomeys to incur under our deductible policy. Williams: Hill: So moved. Second. Mayor: Okay, we have a motion to second to pass this request for City Attomey. Jerry, if we, for instance vote next meeting to settle the incinerator lawsuit, does this stop this kind of expenditure? Rose: Sure will • Sure will. I assume it will. I hope it will. I say that my only hesitation is that if we're sued again in another case, we're obviously going to have to defend that case and I'll ask you for whatever resources I think ar necessary. - Schaper: But can we get sued if we vote to pay this9 Rose: No. .I don't think you can incur a law suit as a result of this payment. think of a way that that could happen. Williams: Doesn't mean there won't be one though. Mayor: Any other comments? Do we need a motion on this? Williams: I move the resolution. Second. Upon roll call, the motion passed by a vote of 7 to 0. RESOLUTION 66-96,AS RECORDED IN THE CITY CLERK'S OFFICE. Mayor: Is there any other business anyone had to bring up? There being no further business, the 'meeting adjourned at .3:30 p.ni.. 36 I can't