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HomeMy WebLinkAbout1996-06-04 Minutes223 MINUTES OF A MEETING OF THE CITY COUNCIL A .meeting of the Fayetteville City Council was held on Tuesday, June 4, 1996, at 6:30 p.m., in the Council Room of the City Administration Building, 113 W. Mountain, Fayetteville, Arkansas. PRESENT: Mayor Fred Hanna; Aldermen Kit Williams, Cyrus Young, Woody Bassett, Jimmy Hill, Steve Parker, Len Schaper, Heather Daniel, and Stephen Miller; City Attorney Jerry Rose; City Clerk/Treasurer Traci Paul; members of staff, press, and audience. CALL TO ORDER Mayor Hanna called the meeting to order with eight aldermen present NOMINATING COMMITTEE REPORT Alderman Daniel, seconded by Williams, moved to nominate to the Airport Board Frank Burgraff; for the Walton Arts Center Council, Billie Jo Starr and Marla Hunt, reappointments; for the Walton Arts Center Foundation, Mary Ella Earle, also a reappointment. Upon roll call, the motion passed on a vote of 8 to 0. THIRD PARTY LITIGATION UPDATE Nick Patton, stated there has been one development since he spoke to the Council last. He'd spoken to all but Alderman Miller about this. In the Federal court action pending between Boatman's Trust- -actually FGIC is the real party --the City of Fayetteville, McCord, and the Authority, Judge Waters, the Federal District Judge, has entered a temporary restraining order --or a temporary inunction -- pending a hearing a week from this coming Thursday, nine days from now. That inunction enjoins the attorneys and the parties in the Barnhart case from pursuing any remedies in the State court until a hearing is held in the Federal court, at which time Judge Waters will do whatever he thinks he needs to do, either set it for hearing, set a briefing schedule, or set it for oral argument, or whatever. Patton stated Judge Waters has entered an order where the City Council can, if they so desire, vote in favor of the settlement, the $2.6 million payment and all of the other matters contained in the settlement, subject to Judge Waters' later approval. Patton stated he saw absolutely no downside to this. He stated he foresees the possibility or probability that because of the fact that Mrs. Barnhart on behalf of the class has filed an application for an injunction of the City Council in the State court, all of these matters are getting ready to come to a head. He needed to say candidly to the Council that if the Council thinks it is in the best interest of Fayetteville to try to settle this case, to try to pay the $2.6 million, this is an opportunity to do that subject to 1 .224°` �r June 4, 1996 ::Judge Waters'. approval or nonapproval.at a later date. Patton could not see anything to lose, if the Council.. felt. the settlement was in the best interest of the City. He stated it was his recommendation that the Council vote that way and reminded:the Council that he had recommended two weeksagoattempting to make this. settlement. He stated such a- vote most likely will be approved by Judge Waters. Alderman Daniel repeated a question a citizen asked her concerning possibly being slapped with some kind of fine eventually for any contempt of court. She asked if Patton saw this happening. Patton responded he did not see this happening. We are approaching. this in a completely open and aboveboard manner. As a lawyer,he did not think the Arkansas Supreme Court's decision prohibits. Fayetteville from settling this lawsuit. He could not believe that any court would hold the Cityin contempt, particularly when all you are doing here is saying we want to do this i -f the court says we can. That seems about as good faith an effort toget something tended to as he could imagine. There has been no'attempt to hide anything. Court orders have been entered in courts of public record. Petitions have been filed in the State court. Papers have been filed in the Federal court. The Supreme court may fuss at him for telling the Council he thinks they can do that, but he would take that risk. Patton responded to a question from Alderman Schaper regarding the substance ofthe hearing to beheldin nine.days. The Council has received no paperwork on this.' Patton stated the reason for no paperwork is because Judge Waters invited any opposition to the proposal to appear in Federal court andstatewhat their opposition is. He could anticipate a couple of things. They would say it='is a violation of the Barnhart decision,- maybe that the Federal court didn't have the jurisdiction to do what it is attempting to do; but he did not know exactly what they would raise. It is simply that they areibeing given -an opportunity by Judge Waters to formally object. They will have a fair hearing on that. Mayor Hanna asked for comments from the audience. Clay Mason, from the audience, wondered why this $2:6 million deal was the best possible deal for the City. He thought We had a lawyer that would aggressively go after the third parties sowe could get some of that $2.6 million down to a more reasonable figure. He asked why we seem to be paying the lion's share compared to some of the other parties. He -did not think it was the best deal and hoped the Council would vote no. 2 • 225 June 4, 1996 Joe Robson, citizen of Fayetteville and appointed member of the selection committee that reviewed and interviewed the proposals made by the attorneys who wished to represent us in the third party claims, reminded the Council of the fee arrangement that was understood at that time by the citizen advisory committee and by the Council as it was represented in numerous newspaper articles. This was to be a contingent fee based on the recovery. Nick Patton essentially said to us that he always works on a contingent fee. This settlement, which is significantly different in a couple of regards, is not what this person was hired to do. Robson reminded those who don't know this that as far back as '88, before he filed the initial taxpayer litigation, he, too, had asked for a settlement. His opinion is that the only reason the third parties will consider settling now is that they know they have to pay it all. FGIC seems on the face of it very generously willing to pay some $12 million or so. The figures regarding this settlement have not been released to the public. He would like this to slow down a little. The FGIC insured these bonds only under the condition that they would not insure these bonds unless the citizens and ratepayers of the City of Fayetteville unconditionally guaranteed to pay off this bond debt, even if an incinerator was not built. So the constitutional questions should have been resolved initially by the FGIC and their attorneys. A.G. Edwards, which issued the bonds, knew or should have known. James McCord under the old city manager form of government was not an elected official and was able to collect an additional fee; he knew or should have known. Those who wrote the legal opinion on the front of the bond said this will never be an indebtedness of any city, because Act 699 of 1979 said no city shall ever be indebted to pay off this. On the back of each bond, in the legal opinion itself, it says this will never be an indebtedness on the City of Fayetteville. Act 699 of 1979 stipulated very clearly that has to be put on each bond, because the constitution says that. The constitution says cities cannot guarantee the debts of other corporations. James McCord, whom Robson stated he believed had liability, has not offered to pay anything. Attorney Patton stated McCord's insurance company has offered $400,000. Robson stated the FGIC will contribute $12.6 million. Patton stated the FGIC's contribution is reduced by whatever anyone else pays. As it stands now, there is a tacit acceptance of all the offers of settlement with the exception of Scottsdale Insurance, McCord's insurance, offer of $400,000. We think there is more money there but don't know exactly how much and don't know whether we want to take it or not. 3 226 June 4,. 1996 Robson wanted to know all the details before the vote. Patton stated that, in all fairness, FGIC has agreed to pick up the difference, whatever it is that Scottsdale is not willing to pay. Patton responded to Robson's question regarding. Boatman's. He stated Boatman's is the trustee. They have $4,954,000 in unused bond funds. That is bond money, not their contribution. Robson went on to say what he thinks is not good about this settlement. A.G. Edwards, which was the market maker, accepted a $382,087.50 fee. The total contribution from A.G. Edwards and the Rose law firm, which advised them, is less money than what A.G. Edwards had accepted. These•people have more liability than this and we need to hammer out a better arrangement. Robson stated we now need to deal with the issue of Boatman's. The threat is thatwe might have to pay a lot more than what we pay under this settlement. If you look at Jim McCord's responsibility, he gave bad advice. He's going to make some contribution. If you look at Rose law firm and A.G. Edwards, they are not making much of a contribution. Wright, Lindsey, and Jennings is taking a hit but would be spending more in court and paying us back $2.6 million. All these sold advice that was no good; but when they put the ink to the paper, they walked away from it. Itwas over for them. Boatman's is Union National Bank. They are the trustee to the bondholder. The unique set of circumstances here is that they did what.everybody else did. Their fiduciary responsibility is to the bondholders. We should not be afraid of. Boatman's. This is not a good, deal. You need to vote no on this thing. Robson responded to a question from Mayor Hanna asking if we should settle if we got an extra $150,000 from. A.G. Edwards, $i million from Scottsdale. Robson said no; we should also get something from Boatman's. He would want a least a million from them. Robson stated he is willing to drop our lawsuits, settle, and bite the bullet on the $2.6 million, but not spend another penny._„ Let Boatman's cough up a million or so.. That's the best thing to do. We should be willing to courageously say we'll forgive you, but move forward and ask for recovery. We need to work something else out. Robert Royce, citizen, agreed with Robson. The citizens of Fayetteville are probably less culpable than the other .parties involved. He would like to see a better deal. He did consider the citizens of Fayetteville tobe partially culpable for having neglected democracy and letting things get to the point they did. He would not oppose some kind of payment on the City's part to 5 settle this. : 4 227 June 4, 1996 Mayor Hanna answered Royce's question regarding where the money for a settlement would come from. He stated there is still a little reserve left and did not anticipate a tax increase. Morty Newmark, citizen, stated that when the City Attorney called him, as a member of the attorney selection committee, to tell him there was a settlement afoot, he anticipated the City being paid and was shocked to discover the City would have to pay. It was proven by the State Supreme court that the City had taken the wrong advice. If anyone was blameless in the incinerator deal, it was the ratepayers. Newmark stated he was not after blood but felt we had given our fair share. A settlement that pays more is getting right back into the same position the former City directors took in making the citizens have to pay. Citizens don't want to pay any more money. Let's get out of this thing in some kind of just fashion. If settlement is the way to go, settle it without paying another penny. Attorney Patton responded to Newmark's question regarding time constraints by saying we are under a severe time constraint. Newmark noted that severe time constraints in the past have led to wrong decisions. Dale Evans, attorney, contradicted Patton's statement regarding severe time constraints. They sued him today to stop him from getting a resolution as to whether or not the City can do this. They are wanting the decision made in Federal court instead of in the State court. They have extended the time to September for a resolution in Federal court. There is no emergency and it is not correct to say so. Evans stated he did not even know what all they are asking. He was served with their lawsuit in Federal court and intends to respond on behalf of the City because they don't want the City to do something they can't or shouldn't be doing. This issue should be litigated. We can do that in State court and get a resolution of that. If the State court judge says the settlement is okay, you won't hear any more about it. If they say you can't, you'll have an answer and won't be guessing. Guessing has cost the City much money in the past. He asked that the decision not be made now. It's not something that has to be done. Let the process of resolution take place. There is a difference of opinion, but a resolution of that can take place in State court. Mayor Hanna closed the public hearing and asked for comments from the Council. Alderman Daniel stated she talked to 16 individuals, 13 of which favored settling. Citizens was to resolve this. 5 228 June 4, 1996 Alderman Parker stated his opinion on this ., -was, based on his understanding of the law. The controlling law in this case is that of the State of Arkansas. The final authority on Arkansas law is the Arkansas Supreme Court. In interpreting Arkansas law that is not based on Federal law, the U.S: Supreme Court has to defer to what the Arkansas Supreme Court says about Arkansas law. That is where we have to look for guidance in this case. In the Barnhart opinion, in more than one place, the Arkansas Supreme Court said Fayetteville cannot pay off the bonds with taxpayers' money.. This proposed settlement would pay off a portion of the bonds with taxpayers' money. We would be defying the expressed opinionof the Arkansas Supreme Court and would not bring a resolution to,this. It would be opening us up to getting this overturned eventually. Alderman Miller stated there are a couple of organizations in this that should be held culpable, for example the people who gave bad advice. FGIC is a culprit. Boatman's let quite'a bit of money slip through their fingers. Also, the State supreme court said we are not liable for this money. There are too many unanswered questions to vote for this settlement. Alderman Bassett recognized the tough responsibility of the Council in this issue. Mr. Patton represents what is best about being a lawyer. He has given us his best advice.. He was hired to resolve this issue and is presenting that chance. now. city Attorney Rose has also recommended this. Hehas given it a.lot of thought and knows what the issues are. It is important to pay attention to.the advice of our lawyers. We all understand what the Supreme court said. No one wants to violate that decision. We are talking about a settlement and not a payment of bonds. We are trying to get this behind us. • The incinerator started in 1979, the decisions that forced.us into the predicament we are in occurred in the mid to late 1980's, and here it is 1996. We have perhaps our last opportunity to end.this case. This has been .a political, financial, and legal nightmare: We have to find a way to put that behind.us.. This is.a settlement... This is a compromise:'. This is the best we can get. Our. lawyers have advised us of that and arerecommending that we do it: • -There has been a lot of discussion about the law, lawyers, legal arguments., and everything surrounding this. incinerator:case. That is necessary, but this decision is about a lot, more-than_the law: ItAis about the heart and sole of this town. We•cannot put this behind us until we end this case. .There may be some risk involved; 'but it is minimal compared to what could happen. There isno .,question that the suit pending in Federal court could present unmitigated financial disaster for Fayetteville. If we lost, we would be in a.financial position that would take years and€years and years and years to.recover from. While there are those who 229 June 4, 1996 believe the City has a throw down hand on the claims against the third parties, that may not be the case. The City has responsibility for decisions it made when it unilaterally cancelled this project. There is a thing in the law called proximate cause. There are a lot of things that could go wrong in Federal and State court. Bassett stated he hoped the Council would take this opportunity to end this so that no other Council member ever, ever has to go through this. Alderman Young agreed we would all like to put it behind us. The question is how to put it behind. He had spoken to Patton and Rose about this. Once you get past the technical aspects, you get to the moral questions. The City government is part of State government and is subject to State law.• The Supreme court has stated for us very clearly what the law is. This whole incinerator started with some people here in Fayetteville who wanted to solve a problem in Fayetteville. They thought their cause was so right and important that they ignored the law, circumventing and bending it. If they had just simply followed the law, we wouldn't be in this mess. If we settle tonight, then the City of Fayetteville has not learned anything from these mistakes. We'll be doomed to repeat them over and over again. We have changed the form of government; but if we don't change the way we conduct the government, we haven't changed anything. The Council has to judge the larger issues. It is tempting to go for the settlement. But are we going to continue bending the laws here and there? The law could have protected the former City board members, if they'd just followed it. This Council has an opportunity to change the direction we are going and start following the law. Alderman Schaper stated it would be desirable to get out of this endless stream of litigation. In the past, people have done the expedient thing rather than the right thing. It is tough to know what the right thing is. We've got the State Supreme court saying we can't pay off the bonds and we've got Judge Waters' order of May 30, which raises some thought that we might be able to participate in this settlement. Schaper read two stipulations from the document, stipulation 0, which does not say it is the opinion of Judge Water's or any court that we have the authority to enter into this settlement, and stipulation P, which states it is the attorneys' opinion that Judge Waters' court has the power to prevent a challenge of this action in any other court. If these stipulations are true and correct, we could be done with this suit; but it has not yet been decided if these stipulations are correct. They are the assertions of several attorneys. We do not need to act on this tonight. There is a hearing nine days away. We have an order that says this action will be dismissed upon the occurrence of the last to occur of all 7 230 June 4, 1996 the listed conditions. It does not say they have to occur in order. One of them is the determinationby the court that the City has the power and authority to settle the claims. We can wait until Judge Waters, himself, says he has jurisdiction in this case and make the. stipulations stick. There is no rush and no reason to act before we have an opinion from Judge Waters as to whether or not he has the jurisdiction in this case and whether it is legal to settle this case. Alderman Schaper stated he would move to table this until such time as we get a determination by our Council and by the Court that. we are allowed to enter into such a judgement. Alderman Williams stated a motion to table is not subject to debate and has to be voted on ianmediately and maybe others would want to say something before discussion is cut off. Alderman Schaper agreed to this delay his motion.. Attorney Patton appreciated Alderman Schaper's comments. In fact; what he wanted to do was to get Judge Waters to enter an order that the ..City Council did have authority to do this. Judge Waters cannot issue advisory opinions. The only means left to us is to vote on it and submit it to Judge Waters and he will then tell us or ,it will never come up before him. He is not going to tell us beforehand, before the issue is actually laid out on the table before him by.a City Council vote. ' Patton stated that if the City Council does vote to settle the case on the terms mentioned he thought Judge Waters will say we have the authority. He can only give an opinion about that because Judge Waters,has told us in no uncertain terms that he is not and cannot give an. advisory opinion. If we vote to delay, :we might as well not vote at all or might as well vote against it. Patton responded to a question from Alderman Williams concerning another route through the State court to get a decision because this is a State issue and if we had not enjoined the ratepayers from going to State court we might in fact get a decision from the State court and possibly even the Supreme court on this decision. He did not know whether we are in a position for those issues to be presented to the Arkansas Supreme Court. Assuming we, are what would happen to this city if in the meantime we lose the Federal court case and Judge Waters enters a judgement against the City for $30 million or $16 million? Patton stated the reason he is recommending this is that this is a settlement of a lawsuit and he is of the opinion that we have reached the point where we are gambling too much against too little. That is the only reason heis recommending this. Alderman 8 231 June 4, 1996 Williams' scenario would be a wonderful solution, but it puts it in a position of attorneys' fees, litigation, and everything ad nauseam. The City ought to vote on this. He would respect any vote made; but if the City wants to go on and take the gamble, let's acknowledge that fact. He will go on and start taking depositions and gathering documents in a State court case and take our chances in the Federal court case. That is an enormous potentially bankrupting gamble. He felt it was his duty to inform the City Council of that potential. No judge can issue an advisory opinion. Alderman Schaper asked why the Judge has written his order in a way that says ". . . upon occurrence of the last to occur of all of the following conditions . . ." He does not say they have to occur in order. Attorney Patton responded that one of them is his finding that the City has the authority to do it. He can't find that the City has the authority to do it until the City has voted that they want to do it. Otherwise, it is an advisory opinion. Alderman Schaper stated that saying we want to do it is different from saying we are going to do it. Patton clarified that what he is asking the Council to do tonight is to vote to approve the settlement subject to Judge Waters' approval. If he doesn't approve, it's just as if you had voted not to approve it. He was not asking the City Council to approve the settlement without any safeguards. You have got the safeguard that Judge Waters must approve it. If Judge Waters does not approve, the vote will have been of no consequence and he'll go on with the State court action. The Federal court action will go on. It will be decided before the State court action. If there is a favorable result in Federal court, he could go into State court and try to get back the damage to the City by virtue of payment of attorneys' fees, expenses, and the damage to the City's credit; but that is an awful gamble. Alderman Schaper stated we are still left with the problem of whether or not Judge Waters has the jurisdiction that is alluded to in the stipulations. Patton stated the ruling of the Arkansas Supreme Court has nothing to do with Judge Waters' jurisdiction. It may have something at some point in time to do with what Judge Waters can do in his jurisdiction. The reason that the Federal court jurisdiction was invoked was there were two pleas that involved constitutional issues. Those can be and sometimes must be brought in Federal court. There were three other allegations made. 9 232 June 4, 1996 Patton stated that when talking about jurisdiction,he asks whether the judge can keep this case in his court. Patton believed Judge Waters could .keep this in his court.-, Even if he dismisses the constitutional issues, there.is something called supplemental Federal court jurisdiction. It means once he has held.on to a case for awhile and has entered orders and has done discovery -type matters, if he wants to he can continue with supplemental Federal court jurisdiction. That is entirely up to Judge Waters. Patton stated he believed Judge Waters is going to keep the Federal court jurisdiction but could not'speak for him and would not attempt.to. If he wants to keep it, he can keep it. We could end up with conflicting decisions from a Federal appellate court and perhaps the Arkansas Supreme Court. This thing has gone on for 17 years and there are no clear-cut answers. Patton stated all he can do is make a legal judgement based on his experience and knowledge of this case that passing this resolution is the right thing to do now. He was hired to gather up money and has gathered up $13.4 million and is willing to waive his 2596 fee don that $13.4 million. Hehired on as he doesevery time on a contingent fee basis and the purpose of his representation is to gather up money for his clients. That's all he can do. Alderman Parker asked a question regarding the negative repercussions of losing in Federal court. The Arkansas law. we are going from is case law specific to this issue. Given the potential negative consequences, if we approve it and the Federal judge says it looks okay but other legal challenges are raised and the Arkansas Supreme Court says no, we meant you could not do that, we told you you could not do that, you did it anyway, what would the negative fall out from that be?. Attorney Patton stated the negative fallout would be we are back where we are now. He assumedsomeone has answered whether or not we can do this. If he recovers money for the City, what .can .be done with it? There has to be an answer to this. He sees the Federal court as a better vehicle because the Federal court isin a better position to bring all this stuff under one roof and send it up where it needs to go, where a final decision could be made. He has not researched if that apple cart could be tipped over by the Arkansas Supreme Court then deciding you had decided wrong. He did not think that could happen. Alderman Parker asked if the Arkansas Supreme Court did say that, would it .even overrule the U.S. Supreme Court on questions of Arkansas law. 10 • 233 June 4, 1996 Patton stated he never fooled himself that any State Supreme court ever overrules the U.S. court on anything. He understands the theory; but as a practical matter, the U.S. Supreme Court said just said the other day that punitive damages are not going to be decided by a State Supreme court, they are going to be decided by the U.S. Supreme Court, overruling Alabama. The Arkansas Supreme Court is not going to tell the U.S. Supreme Court what they think the law is. Alderman Williams stated this is a State statute, a State constitution; and usually the State Supreme court is final arbiter of the State constitution and State statute. Patton stated this is exactly what occurred in Alabama and the U.S. Supreme Court said that is too bad, you aren't doing it that way. They claimed it was a violation of due process and they can say that here if they want to. Patton asked who would pay for all of this as we go through this long arduous process of getting it decided. It will be the people who live here, just like they have in the past. He wants to see if we can't put this thing to sleep. He personally sees this as the only possible relatively quick method of doing it. He is willing to do it at great personal financial sacrifice, including representing the City at no cost as these matters go hither and yon. Alderman Hill stated the Council hired Mr. Patton to advise and try to settle if possible. He has done this. We have an offer on the table. The citizens he's talked to are overwhelmingly in favor of fair settlement which can minimize our liability and put this issue behind us. Judge Waters will decide whether this settlement is legal. Let's give him a chance to decide this. We haven't lost a thing if he decides against it. It seems to be our only chance to put it behind us. He appreciated the opinions of the attorneys on the Council, but we hired Mr. Patton. He urged everyone to vote for this settlement. Alderman Williams thanked Mr. Patton and Mr. Rose. There is no problem with how Patton has put together this settlement and any fee he would receive. Williams stated he had problems with this particular proposal, not because of Patton's work. He looks at what Fayetteville is being asked to pay. We have a million dollar policy with Scottsdale and they are not offering to pay any of Fayetteville's liability for this. He would feel more strongly toward it if our own insurance company was willing to pony up some money. He has problems with the fact that the Ingoldsby firm is only offering $300,000 when we paid them over a million dollars for very poor advice. 11 234 June 4, 1996 Alderman W-illiams stated he would love to settle this case and was willing. .to forego all the third party claims to lessen the insurance :company's payment. Because of the Arkansas Supreme Court's ruling and because there are certain. entities not contributing as much as they should, he could .not support this settlement at this point. It's probably the hardest decision he's made. since being on the Council. It could be catastrophic and everyone could point fingers and say you didn't take it when you could have. He would rather delay a final action and see what the _final hearing brings. Attorney Patton stated there will not be a hearing unless the Council votes for the settlement. Unless the Council votes for the settlement there will not be a hearing because there won't be an issue to present to Judge Waters. The Judge has told us that. Alderman Daniel stated she believes this settlement is worth _a shot. One of the big issues is that the citizens were not invited to take part in the initial decisions on the incinerator. Overwhelmingly, the people want to settle. Alderman Miller stated he has had twenty-two constituents contact him regarding this and all supported not settling on this. Mayor Hanna called for a motion regarding this issue. Alderman Bassett moved to accept the settlement. Daniel seconded. Upon roll call, the motion failed on a vote of 3 to 5, with Williams, Young, Parker, Schaper, and Miller voting no. The Council took a five minute break. OLD BUSINESS Mayor Hanna introduced for consideration an ordinance amending Section 159.33(E) of the Subdivision Regulations°to.'allow'the • Planning commission the ability to require improvements! to State' highways. This ordinance was left on the first reading at the May,. 21 Council Meeting. `y r.; 0 - Alderman Williams moved to suspend the rules to not read the whole thing, go to the second reading. Parker seconded. Upon rd114ca11, the motion passed on a vote of 6 to 0, with Bassett and Daniel noti•) present for voting. 1 ' oe City Attorney Rose read the ordinance for the second time. Mayor Hanna asked for comments from the public. There were none. 12 iJ 235 June 4, 1996 Alett Little, Planning Director, responded to a question from Alderman Williams regarding where this came from and what the basic reason behind it was. She stated it came from the planning department and from a number of cases where the rules were being enforced unfairly. If it were a City street, we were causing some developers to make the improvements; but if it were a State highway, we were not requiring the street improvement. We did check with the Highway Department and they were astounded that this was in our ordinance. Mayor Hanna stated this gives the Planning Commission the ability but does not make it mandatory. Little agreed. Alderman Williams moved to suspend the rules and go to the final reading. Schaper seconded. Upon roll call the motion passed on a vote of 7 to 0, with Basset not present for voting. City Attorney Rose read the ordinance for the final time. Mayor Hanna asked for further comments. There being none, he called for the vote. Upon roll call, the ordinance passed on a vote of 7 to 0, with Bassett not present for voting. ORDINANCE 3974 APPEARS ON PAGE OF ORDINANCE BOOK CONSENT AGENDA Mayor Hanna introduced consideration of items which may be approved by motion or contracts and leases which can be approved by resolution and which may be grouped together and approved simultaneously under a consent agenda: A. Minutes of the May 14 special City Council meeting and the May 21 regular City Council meeting; B. A resolution approving a contract with Wittenburg, Delony, and Davidson in an amount not to exceed $75,000 plus $10,000 reimbursable expenses for architectural and engineering services for various CIP and HMR park projects and authorizing the Mayor to sign each work order after negotiation and review; RESOLUTION 67-96 AS RECORDED IN THE CITY CLERK'S OFFICE. C. Removed from the consent agenda 13 236 June 4, 1996 A resolution accepting Federal Grant Offer..AIP #21 for a Master Plan Update and the purchase of.a snowblower for Drake Field. This grant offer is for $512,259;.$292,144 for the .Master Plan portion and $220,155 for the snowblower portion. total project cost will be $569,178; RESOLUTION 68-96 AS RECORDED IN THE CITY CLERK'S OFFICE. and A resolution approving a contract with Schmidt Engineering and Equipment, Inc., for the purchase of a snowblower unit to be funded 9Q% by the D.O.T./ Federal Aviation Administration and 5o by the Arkansas Department of. Aeronautics; RESOLUTION 69-96 AS RECORDED IN THE CITY CLERK'S -OFFICE. E. A resolution amending Resolution No. 25-96 removing the words "ADAAG and" from Section 2; RESOLUTION 70-96 AS RECORDED IN THE CITY CLERK'S OFFICE. Alderman Schaper moved toapprove the consent agenda. Hill seconded. Upon roll call, the motion passed on a vote of 7 to 0, with Bassett not present for voting. EOUIPMENT PURCHASE Mayor Hanna introduced for consideration a resolution awarding Bid 96-32 to the lowest qualified bidder, Ron Blackwell Ford, for the purchase of five utility trucks for a total cost of $161,579 Alderman Miller stated this was passed by the equipment committee and Alderman Parker had asked -to have this takenoff the consent agenda. Alderman Parker stated this was an expensive item. It had a response of a single bidder. It was sent out to 19 bidders representing 3 basic manufacturers. Even so, we are,doing our job and trying to get as much competition on procurement of City equipment as we can. Alderman Parker moved to accept this. call, the resolution passed on a vote present for voting. Miller seconded.. ,Upon roll of 7 to 0, with Bassett not RESOLUTION 71-96 AS RECORDED IN THE CITY CLERK'S OFFICE. 5 14 June 4, 1996 REZONING RZ95-28 237 Mayor Hanna introduced for consideration an ordinance rezoning 3.49 acres located north of Cato Springs Road and west of Garland Ave. from I-1, Light Industrial, to R-2, Medium Density Residential, as requested by Kenneth R. Mourton. The Planning Commission voted 8- 1-0 to recommend the rezoning at their meeting on September 11, 1995. City Attorney Rose read the ordinance for the first time. Alderman Miller stated he has viewed this property and warned the petitioner that the Council would probably not go through three readings at this time. There are single family homes on two sides of this and some not really good looking industrials on the north and west sides. He also walked the field looking for endangered perennials. He will support this; but in order to give the public time to respond, he did not want to go through all three readings at this time. Alderman Williams agreed this is good use of this land. Kenneth Mourton responded to a question from Alderman Schaper regarding whether these will be low -income -qualified dwelling units. Mourton has a contract to sell the property to Mr. Coleman, who will be the developer. This was before the Planning Commission back in September. One of the things that held it up from coming to the Council was that Mr. Coleman was waiting on approval of tax credits from the State of Arkansas, which were just approved on May 12. Speaking to Alderman Miller's concern for the public hearing, Morton stated a few members of the public did come to the Planning Commission meeting. The only concern there was the indication that it showed 128 units, which was ridiculous for that spot. Mr. Coleman was not there and Mourton could not commit for him. The only vote against it was because they wanted a bill of assurance to keep it to 56 units. The 128 units was a misprint or something. Mr. Coleman further addressed Alderman Schaper's question regarding the units. There are 56 units, as opposed to the 52 stated in the Council's information. Most apartments are now built, and probably 90% of all built in the last 10 years, through the low income housing tax credit plan, basically for people of 60& of median income. In Fayetteville, this would include policemen, maybe some school teachers' starting salaries, those kinds of things. It is not the old HUD low income housing. 15 238 ar June 4, 1996 Alderman Schaper had some concerns regarding the density. The neighborhood is not a rich neighborhood and has a fairly low density, certainly no more than four dwelling units an acre. This plan has about 15 dwelling units an acre, avery large density difference from the surroundings. It would also be an entirely rental project. Mr. Coleman stated he would, assume that most of the properties built in Fayetteville have been in the 15 -.plus range in the .multi- family density. Alderman Schaper disagreed; a lot of them have been built 8-12. . Coleman responded to a question from Alderman Miller regarding ingress and egress on Garland as well as Cato Springs. The problem you have with two entrances is you get a lot of pass through traffic. The property is looped with no dead ends or cul-de-sacs. Alderman Schaper did not think having 56 units coming out on Cato Springs Road is a problem. He did have a problem with 56 units of one socio-economic strata. It has been shown all over the country that -grouping large concentrations of low income. housing is not a good idea. He has advocated mixed income neighborhoods.. Alderman Daniel agreed with Schaper. Coleman stated 56 units is hardly a concentration. The difference here is his company signs the note and. has responsibility, guaranteeing to the investor that it will work. It has brick veneer, vinyl siding, aluminum soffits, concrete paving, a lot of playground area. It will be an improvement to the neighborhood. Alderman Williams agreed. This is not a real large project. There are single family homes in theneighborhood so there would be a mixture. Alderman Schaper still had a problem with ,the density this represents compared to the surrounding area. He agreed there are some eyesores in this neighborhood, but he did not want to bring in another one. He would go residential at some density but not this high. • Mr. Mourton addressed Schaper's concerns.Two or three years ago he had the opportunity to sell that property to the cement plant up by the railroad tracks. He made the decision that was not a good use for the neighbors. This development would be a great addition to the city compared to that situation. 16 239 June 4, 1996 Alderman Schaper has found that the cost of land in the city is still relatively inexpensive, so reducing the density in this case would not detract from the profitability of the project. Alderman Williams stated we need to keep in mind we need affordable housing. Mayor Hanna expressed his surprise that the discussion was going this way on three and a half acres of industrial property. A plant employing up to 200 people would be worse density than with 50 -some residential units. We have been working hard to direct development to the south part of town. He envisioned that area becoming much nicer. The Council approves apartment complexes regularly for many more units in the north of Fayetteville where we have much more traffic with not as good infrastructure. Alderman Williams spoke as the alderman from that ward saying it would be a good addition. He was happy to see this rather than a cement plant there. This could help to lead the way to renovation of the neighborhood. Alderman Parker recognized the concerns of Alderman Schaper but leaned towards the Mayor's position and that of the ward's representatives. While in some areas of the city putting apartment buildings of this density on overcrowded roads is a real problem, another problem we have to consider is redevelopment. This does direct redevelopment into an area that needs it. We have the infrastructure to support it. The reasoning of the representatives of that ward is convincing. Alderman Bassett pointed out that the Planning Commission recommended it eight to one and the two aldermen from that ward have made their feelings known. He agreed there is a need for more affordable housing. This is a much better use of that property than what we could end up with. He intends to vote in favor of it. Alderman Daniel liked the idea of the day care center. Mr. Coleman informed Daniel that the day care has been eliminated and the density increased. We all like to do things that are really good, but you get into the financial part which has to work. Our investors and tax credit people drive a lot of this. They said they don't want it. There is a day care center right across the street. Alderman Schaper did not disagree with his Ward 1 colleagues that having housing was better than having a cement plant but did not see this as an either/or situation. It is the Council's job to look to reasonable densities for development in the city for the long term benefit for the citizens. Folks are going to want to 17 240 11, June 4, 1996 maintain a reasonable profit..and push on the envelope; .we push back, which is a reasonable thing to do. It is not a take it or leave it proposition. Alderman Miller stated that the Council has vote on what is going in but only on the rezoning. R-2 would allow 24 families an ac they are not pushing the envelope. been told they cannot compatibility of the re, about 90 units, so Alderman Bassett moved to go to the second reading. Parker seconded. Upon roll call, the motion passed on a vote of 6 to 2, with Schaper. and Daniel voting no. City Attorney Rose read the ordinance for the second time. It was decided to leave this on its second reading. REZONING RZ96-7 Mayor Hanna introduced an ordinance: rezoning 4.73 acres located at 3373 N. College Ave., from A-1, Agricultural, to C-2, Thoroughfare Commercial, as requested by Dennis Moore on behalf of Lewis Ford. The Planning commission voted 7-0-0 to recommend the rezoning. City Attorney Rose read the ordinance for the first time. Alderman Daniel stated she would not vote on this as the Council did not tour it and the maps provided in the agenda packet were unclear. Dennis Moore reviewed the map he had, which was more clear. In response to a question from Alderman Schaper, Planning Director Little stated street connections would be addressed when they,go through large scale. During the rezoning, they tried to make them aware of the connections they would be looking for. Some are on the master street plan. Plainview is a collector from Longview south. Moore stated that Mr. Lewis is trying to get to large scale and asked the Council to do what they could to speed that up. There was a public hearing at the Planning Commission level and no one attended. Lewis does own the property directly to the south of the rezoning. :Alderman Williams moved to suspend the rules and go to the second reading. Bassett seconded. Upon roll call, the motion passed..on a vote of 8 to 0. City Attorney Rose read the ordinance for the second time. 18 241 June 4, 1996 It was agreed to leave this on its second reading. Mayor Hanna stated agenda items 5, 6, and 7 --two rezonings and an annexation and rezoning --all have to do with the same property but will be discussed separately. REZONING RZ96-9 Mayor Hanna introduced for consideration an ordinance rezoning 2.73 acres located at the northwest corner of Mally Wagnon Road and Highway 16E from A-1, Agricultural, to R -O, Residential -Office as requested by Dave Jorgensen on behalf of Gordon Wilkins. The Planning commission voted 7-0-0 to recommend the rezoning. City Attorney Rose read the ordinance for the first time. Planning Director Little apologized for the poor maps. Mayor Hanna stated the Council did tour this. They asked for C-1 and the Planning Commission asked them to accept R -O. • Mr. Jorgensen, petitioner, stated the original request was for C-1, but R -O is acceptable. Alderman Parker stated he has talked to folks in Ward 3 who have no problem with this except for Mally Wagnon Road, which they consider a substandard road paved at the expense of the residents. They feel these rezonings will put a lot more traffic on it. They are hoping for an improvement, either by the City or the developer, of Mally Wagnon Road from its intersection of Highway 16E north to the edge of where the annexation property lies. The notes from the Planning Commission state this road is classified as a local street and at the time of development the developer will likely be required to dedicate an additional 5' right-of-way as well as a contribution for the improvement of half of Mally Wagnon Road. He asked what improvements are being contemplated. Planning Director Little stated the improvement issue would be addressed at the time it came through either for subdivision or large scale development. It is likely to be a subdivision. The requirement at that time would be for the subdivider to pay his share, which would be the improvement of Mally Wagnon Road from the centerline to his property line, the construction of a 15 1/2' street, installation of storm drainage, curb, gutter, and sidewalk. The timing of the development is unknown. Addressing the rezoning does not mean the subdivision would immediately follow. At such time as the subdivision does come through, the Planning Commission will address the improvements that would be required. 19 242 June 4, 1996 Alderman Parker requested that this be left on the first reading then taken through the next tworeadings if no one objects next time. REZONING RZ96-10 Mayor Hanna introduced for consideration an ordinance rezoning .39 acres located on the northwest corner of Mally Wagnon Road and Highway 16E from A-1, Agricultural, to R-1, Low Density Residential, as requested by Dave Jorgensenon behalf of Gordon Wilkins. The Planning Commission voted 7-0-0 to recommend the rezoning. City Attorney Rose read the ordinance for the first time. ANNEXATION & REZONING RZ96-11 Mayor Hanna introduced for consideration an ordinance annexing and rezoning 9.08 acres located at the northwest corner of Mally Wagnon Road and Highway 16E from A-1, Agricultural, to R-1, Low Density Residential, as requested by Dave Jorgensen on behalf. of. Gordon Wilkins. The Planning Commission voted 7-0-0 to recommend the annexation and rezoning. City Attorney stated this will be two ordinances. He read each one for the first time. Alderman Schaper stated this annexation would create the curious situation of having a piece of property that is -in the county but totally .surrounded by the city. Planning Director Little stated there is no law against it. The adjacent property owners have been notified and have not come forward. There is a State law provision .that, allows once a A•property.is surrounded by city property the City may initiate the annexation rather thanthe property owner. s aAldermanwj1liams noted this is on the outskirts of the city with only a tiny bit of city property between it and the county. He'd just as soon let the residents decidewhetheror not they want to be in the city or not. Dave Jorgensen responded to- a -question from Alderman. Daniel regarding what is on the property. There is a residence:_.. They were at the Planning Commission and had no objection to the'plan -in general and did not mention anythingin particular about their property being annexed. Their main concern was the boundaries and that there may have been a little overlap where their,fence line was in one location and a property pin was three or -four feet away. This needs to be. addressed. They did not have a problem with the 20 243 June 4, 1996 annexation or rezoning request. He did not recall the annexation issue coming up. They do not have any plans for the property other than living there. Part of the property is in the city and part of it is not. Alderman Schaper stated the surrounding use there and nearest adjacent use is residential, not commercial. In response to a question from Alderman Hill, Little did not know if this was the property Tom Brown spoke of at the Planning Commission. She would find out and let him know before next meeting. Mayor Hanna asked for further comments. There were none. This was left on its first reading. BIKE/PEDESTRIAN TRAIL DESIGN CONTRACT Mayor Hanna introduced a resolution approving a contract with the Mehlburger Firm in the amount of $147,123 plus a 10o contingency of $14,712 for bike/pedestrian trail design. The trails advisory committee voted 8-0-0 to recommend the contract. Alderman Schaper expressed concern about the size of this contract. The current budget is about half a million dollars and we are spending $160,000 on engineering and design. Planning Director Little explained that when we made the application to the Highway Department to use their ISTEA funds, they awarded us a grant in the amount of $500,000; we asked for $1.5 million. They further put a stipulation on the award that only the first year award funds could be used for consulting fees; therefore, all that we use a consulting firm for has to come out of the first year's grant, which is the $500,000 grant. The $500,000 will be used to complete the Butterfield Trail pilot project, but this contract will also give us the tool we need to provide the design, length of time for construction, and cost for construction. It will provide for us the budgeting tool to bring the rest of the trails along. It is a little strange, but we are trying to comply with what the Highway Department wants us to do in terms of their grant agreement. Alderman Schaper thought this was unique. We are hoping we will get more ISTEA grants to complete what's planned for and if not it will go into the capital improvements program. Little agreed it is a concern that we won't get more ISTEA grants but there should be other granting opportunities and with this kind of data, good plans and good schedule, there is a much better chance of securing these funds. 21 244 June 4, 1996 Alderman Schaper pointed out that the projects contemplated are all over town. This is a city-wide system. Alderman Miller moved the resolution, Daniel seconded. Upon roll call, the resolution passed on a vote of 8 to 0. RESOLUTION 72-96 AS RECORDED IN THE CITY CLERK'S OFFICE BID WAIVER Mayor Hanna introduced an ordinance approving a bid waiver and a budget adjustment for the rental or lease of operating equipment for use in the Solid Waste Program, Recyclable Materials Processing Facility. City Attorney Rose read the ordinance for the first time. Public Works Director Kevin Crosson stated the transfer facility is currently under construction. The shop superintendent recommended we take this approach and evaluate a variety of different kinds of equipment in the way of a forklift and a skid loader to determine what we will need and then go, back and bid at a later date. Alderman Miller stated we are up in the airas towhat equipment will be needed. This way we can rent temporarily, try it out, and ..see if it suits our needs without having to purchase what we find out later does not fit our needs. Alderman Hill moved the ordinance. Daniel seconded. Upon roll call, -the motion passed on a vote of 8 to 0. City -Attorney Rose read the ordinance for the second time. Alderman Williams moved to suspend the rules and go to €he third and final reading. Bassett seconded: .Upon roll call, the motion passed on a vote of 8 to 0. City Attorney Rose read the ordinance for the third time. Mayor Hanna asked for further comments. Alderman Parker stated it went to the equipment committee which thought it was okay. They drove a stake through the heart, of its evil brother, item 9, which was removed from the agenda; but this looked like a reasonable proposition. Upon roll call the ordinance passed on a vote of 8 to 0. ORDINANCE 3975 APPEARS ON PAGE OF ORDINANCE BOOK 22 June 4, 1996 AMEND PARKING ORDINANCE 245 Mayor Hanna introduced an ordinance amending Section 72.99 of the Code of Fayetteville to increase the cost of parking violations to $5 which would rise to $10 if not paid within 72 hours and establishing other penalties for habitual violators. City Attorney Rose read the ordinance for the first time. Alderman Bassett hoped this would not be voted on at this time. He has had several phone calls from people wanting to comment on it and knowing the incinerator issue would take awhile. If this item were moved up in the agenda, more people might show up to comment on it. He understood how we came to this point. Clearly, we can't satisfy everyone with the parking situation downtown. Hopefully, one of these days we can take the parking meters down and be done with them. There is a need for enforcement and getting people's attention, but he has had second thoughts about how much money we are talking about and the message it sends. Alderman Daniel agreed. The University has created a lot of ill will by being strict on their parking. She would like to see the fine stay at $2 and go up for repeat violators. Alderman Williams agreed. We do not want to discourage people from coming downtown. We have made great strides in the parking situation. He would not support this unless we keep it at $2 then raise it to $10 if not paid within three days to encourage people to pay quickly. When we are talking about habitual violators, it should be increased only from the fifth one on. We have a much different situation than the University. There, the students and staff have no other options. Consumers can go downtown or somewhere else where there is free parking. We do not want to discourage our downtown facilities. Parking should not be a way to raise revenue. Alderman Schaper stated that this was arrived at to keep long-term parkers from spaces that are needed by shoppers. We are trying to encourage people to shop downtown by making more and more parking available to them. He had a call which raised interesting points. The hours of enforcement are from eight to six. If we are concerned about office parkers, we may not need to enforce from eight to six. This may not need to be enforced on Saturdays. There is some inconsistency on the meters as to when they are enforced. As long as we are looking at this parking ordinance, we could clean up some other things. 23 246 June 4, 1996 City Administration Director Ben Mayes stated there has been a lot of miscommunication about why we've done this. The intent is to make parking more available, not punish those customers. There are 84 free parking spaces around the .square. There are meters and parking gates. There is a mixture of parking in the downtown area. There was a parking study done over a year's time in 1994. A result was the recommendation that the parking fee be raised. The Chamber of Commerce and Downtown Fayetteville Unlimited took that study and reviewed it. Those organizations also recommend that we increase the fine. A series of public hearings was held this year. There it was put forward that we raise the rates. The intent is to discourage workers in the downtown area from using short term parking. Many people don't consider $2 too much to pay for a space outside their building. Mayes stated there is some inconsistency in the parking signs. We have the authority to write tickets until 6:00., in essence we stop at 4:30. We have the ability by ordinance to write on Saturday, but we don't because there is not a need now. What we -were instructed to do was to make this simple and just address the fine issue -and that is what we have done. Alderman Williams stated we need to keep our eye on the goal of stopping long-term parkers. You can do that by giving morethan one ticket a day and moving on to the $25 violation for more than four times in a month. That is better than raising it for everybody. Alderman Parker stated the problem is repeat offenders, especially on unmetered parking up around the square.. Some businesses have run up mega numbers of tickets because they feel we don't have the enforcement power. We were told the City -didn't have a set of ordinances crafted to enforce the parking. City Attorney Rose stated there have been some enforcement problems in the past. But we are enforcing our parking regulations as they are written and there are no difficulties now. Alderman Parker stated he would support the current fine then higher -fines over time. If we are going to levy larger amounts; such as $25, it should be on the fourth or fifth and beyond. Alderman Schaper stated this would not deter the people• who consider a $2 ticket just the price of parking. If they pay those regularly you will not deter the problem, which is people parking in the short term and free spaces who shouldn't be there. Alderman Parker stated what Alderman Williams is proposing would address this as it is for five or more violations in the same month. We would be keeping track of the violations whether they are paid or not paid. 24 247 June 4, 1996 Alderman Young stated he does not like parking meters, especially downtown. However, what we are wanting to do is regulate the parking. He questioned whether you can treat multiple tickets the way that has been suggested. There was some discussion about the negative aspects of booting. AMEND BICYCLES ORDINANCE Mayor Hanna introduced an ordinance amending Section 73.05 of the Code of Fayetteville to allow the riding of bicycles upon sidewalks running along collector streets and minor and major arterial streets. City Attorney Rose read the ordinance for the first time. Alderman Miller stated that this would clean up the ordinance that allows for multiple -use trails along arterials and collector streets. He made a friendly amendment to add at the end of the first sentence, ". . . when so designated as a bicycle route." In other words, it would have to be marked as a bicycle route. Bicycle routes will be marked. It was not the intent to allow bicyclist to tear up and down Dickson street at 40 miles an hour. He had in mind streets like 6th Street. Alderman Parker suggested having a situation where you can ride unless it is so designated that you cannot. We want to be able to do it on most of the collectors and there are only a few specific areas like Dickson where it is not a good idea because of the high pedestrian volume. Alderman Miller said they would be marking with the universal sign for bicycle lane or trail. Alderman Bassett asked how everyone, including the police, would keep up with what is a collector and what is a minor. Alderman Miller responded this is why there will be markings. He announced there will be a public hearing the following night from six to nine about planning and feasibility of inner city trails. The Highway Department will be present. Alderman Williams suggested leaving this ordinance where it is and having the trails committee look it over to work out the wording and provide a map. The meeting adjourned at 9:38 p.m. 25