HomeMy WebLinkAbout1997-02-04 Minutes?5
A MEETING OF THE CITY COUNCIL
A meeting of the Fayetteville City Council was held on Tuesday,
February 4, 1997, at 6:30, p.m., in the Council Room of the City
Administration Building, 113 W. Mountain, Fayetteville, Arkansas.
PRESENT: Mayor Hanna; Aldermen Stephen Miller, Kit Williams, Len
Schaper, Heather Daniel, Cyrus Young, Randy Zurcher,
Trent Trumbo and Donna Pettus; City Attorney Jerry Rose;
City Clerk/Treasurer Traci Paul; staff; press; and
audience.
Mayor Hanna called the meeting to order with eight aldermen
present.
STATE OF THE CITY ADDRESS
Mayor Hanna gave the following prepared speech:
In 1995 and 1996 I said managing growth was our biggest challenge.
I believe we have gone a long way toward meeting that challenge,
and, though we are still growing, our rate of growth has slowed.
For instance, city building permits were down by 11 percent last
year, largely because multi -family permits dropped by more than
half.
In many ways 1996 was a banner year for Fayetteville, certainly the
best since 1992 when I took office with a new City Council. I
believe three things account for this -- a dedicated city staff, a
responsive City Council and cooperative citizens, all with the best
interests of our city at heart.
Without a doubt, our greatest achievement of 1996 was settlement of
the incinerator lawsuit and associated third -party suits. That
litigation has hung over our heads for years and has impacted
almost every other decision we have been called on to make.
Other major achievements of 1996 include:
Completion of our biggest water project ever: the $15 million
42/36 -inch parallel water line from Beaver Lake and the Loop
to the west which hooks up with two six -million gallon water
storage tanks off Cato Springs Road. This project more than
doubles the amount of water we can supply to our citizens, now
up to 40 million gallons a day.
February 4, 1997
► Dedication of the city's Waste Transfer and Recycling
Facility. This $2.2 million center, financed in part by a
grant from the Four County Solid Waste District, gives us
better control of our solid waste and also helps other cities
in Washington County.
► Opening of the Yvonne Richardson Community Center in Southeast
Fayetteville. Many people helped with this project - Walter
and Marjorie Niblock, our City Council, our city staff; the
governor's office, the attorney general's office, our area
legislators, and; most importantly, a board of local citizens
who worked to make this dream a reality.
► Completion of a $1 million odor control project at the city's
Wastewater Treatment Plant. Three aluminum domes were'
installed and a scrubber was put in place. These efforts have
significantly reduced odors at the plant.
1996 was also a year in which we had no fire deaths in the city and
no major fires. That's an achievement we can all be proud of.
Fayetteville remains in sound, even enviable, financial condition.
City Council members got preliminary, unaudited financial
statements for 1996 last month, and a copy is on file for public
inspection in the City Clerk's office. An independent audit will be
conducted later this year with a formal report to the Council.
In 1997, we once again have a balanced budget and will continue to
maintain an uncommitted cash reserve of at least 10 percent.
Tax revenues, the city's major source of funds, continue to
increase. City sales tax revenues totaled $9.1 million last year,
up 7.2 percent from 1995. The City's share of county sales ,tax
receipts increased 7.5 percent, to $6.6 million. Thattotals to
$15.7 million, up 7.5 percent or $1.1 million from 1995 tax
revenues.
Hotel/motel/restaurant taxes collected in 1996 added up just over
$1.8 million. A little more than half of this total, $956,000, came
from an existing tax pledged to promote tourism and visitors. This
represents a 2.4 percent increase from 1995. This is the tax which
will be pledged to pay off bonds for a . new town center if the
project comes together and wins voter approval.
The rest of the HMR money, $870,000, came from a new tax approved
by voters in late 1995 and earmarked exclusively for parks and
recreation programs. We began collecting this tax in January 1996.
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February 4, 1997
We had other significant accomplishments in 1996.
I want to brag, first of all, on our in-house overlay program. I
probably get more compliments on this city effort, now beginning
its fourth year, than any other. We bought a new milling machine
last year and milled about half the streets before overlaying them.
In 1996, our crews overlaid more than 7 miles of streets, including
the downtown Square and streets
abutting it.
Last year the State Highway Department opened a new stretch of
Razorback Road from the bypass to 15th Street, greatly improving
traffic flow for UA events. And, in another important move, in the
north part of town, Joyce Boulevard is being extended west to Gregg
Avenue.
Last year we adopted standard specifications for streets, water
lines and sidewalks. And we hired a sidewalks and trails
coordinator, Chuck Rutherford.
Last year, we also completed the following parks projects: first
phase of work on a girls' softball complex; a walking, jogging
trail around Wilson Park; re -naming of Lake Fayetteville South, now
Veterans Memorial Park, and construction of an open air pavilion
and a third volleyball court there; addition of two soccer fields
at Lewis Avenue Soccer Complex along with construction of a parking
lot, sidewalks, a concession stand and restrooms; and addition of
an eighth baseball field at Walker Park.
I would also like to point out the continued improvements at Lake
Fayetteville. A volunteer group headed by Bill Ackerman has added
more fishing docks and they continue to improve that facility.
In cooperation with the Humane Society, we also opened a Parks for
People and Pets near our Animal Shelter.
Last month our Solid Waste Division started two new recycling
efforts: a curbside program for smaller businesses, which targets
the Square, Dickson Street and Colt Square for initial efforts; and
a pilot commercial white ledger paper program to go along with the
commercial cardboard recycling program already in place. This
latest effort allows recycling of copy paper, computer paper and
printing paper.
We continued the popular household hazardous waste round -ups last
year and plan two again this year.
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February 4, 1997
At our airport we hired a full-time marketing director, completed
Phase II of the terminal expansion project, and installed an
instrument landing system for which we are now seeking final FAA
approval. Passenger boardings at Drake continued to increase last
year, though at a slower rate. Boardings at 238,726,,were up lees
-than one percent.
In other ways, 1996 was a special year. We sold the old Ozark
Theater to some local people who are renovating it for retail and
office space. Our Community Development Department rehabili- tated
27 homes for low to moderate income. owners. CD also earmarked
$300,000 for a new program which will get off the ground this.year.
This program allows our CD.folks to buy affordable houses in need
of `repair, make the repairs and then help low income citizens
secure loans to buy the -homes. We get most of this money back to
buy more homes and continue the program.
We improved security at our City Jail and added seven new positions
in the Police Department and four new positions in the Fire
Department.
We continued EPA -mandated sewer rehabilitation efforts. To.date, we
have spent $18 million on these improvements and havereduced
overflows by 90 percent.
We hired a consultant to draft preliminary plans and complete a
feasibility study for our north researchand development park.
Finally, we bought a 3 -acre trailer park near the entrance to the
UA's south entrepreneurial campus.'
What's in store for 1997?
First, we need to finish the projects we outlined in our 1996
goals. These include:
► Extension of 6th Street to Huntsville Road. We also plan to
add a turn lane on 6th, east of School.
► Improvement of 24th Street from South School (Hwy. 71B) to
Country Club Addition at the top of the hill. A construction
contract for this project was approved earlier this year.
► Intersection improvements at North Street and Mission
Boulevard (Hwy. 45).
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February 4, 1997
► Completion of the sewer system/wastewater treatment study now
underway so we can proceed with plans to make improvements
needed to meet expected increases in demand for these
services.
► Continuation of our tree -planting efforts and installation of
at least three entryway signs.
► Award of contract for the new Adult Senior Center north of
Walker Park. Our CD and Parks people have pledged $875,000
toward this project; the Area Agency on Aging has pledged
other funds. A fundraising drive to cover the rest of the cost
is now underway.
► Complete renovation of the old Armory building for use by the
Northwest Arkansas Free Health Clinic. This $250,000 project
will also provide additional space for the clinic.
Beyond these things, I anticipate good progress on other projects:
► Four-laning Joyce from Old Missouri Road to Hwy. 265. Contract
on this was let late last year.
► Widening of Wedington Road from Garland to the bypass. The
Highway Department awarded a contract for this work last
October, and the City will soon have the water and sewer lines
relocated. In conjunction with this project we will do
drainage improvements along Holly and Vista.
► Reconstruction of 20th Street from South School to the UA's
Entrepreneurial Campus.
► Extension of Sunbridge from Villa to College.
► Improvements to Stone Bridge road from Wyman Road north.
► Intersection improvements at (1)Township and College to add a
turn lane east of College; (2) Old Missouri and Zion; and (3)
Salem Road and Hwy. 16 west.
► Preparation of plans to four -lane Sycamore Street from
Leverett to Garland, for construction in 1998.
► Construction of Mud Creek Bridge and approaches on Gregg west
of the Mall.
► Continuation of sewer rehabilitation projects.
► Completion of the Girls' Softball Complex on Salem Road.
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February 4, 1997
► Sidewalk and Trail improvements. We have budgeted this year
for a three-man crew to work with our sidewalks and trails
coordinator to repair existing sidewalks and install news
ones. This will be a continuing effort for which we hope funds
will be approved each year. We are in the process of setting
priorities for this work.
► Continue work toward drafting plans and specifications for
construction of a multi -use trail system and bike lanes. We
have a federal grant forportions of this project and have
approved an engineering contract. A public hearing. is
scheduled for Feb. 12.
► Complete improvements to extend city water service to some
former customers of the White River Rural Water. District.
► Add three more bicycle patrol officers and establish a police
substation at the Northwest Arkansas Mall. These patrol
officers would serve the Mall arid surrounding businesses, Lake
Fayetteville North and Veterans' Memorial Park.
► Complete the special census begun late last year and apply for
additional state turnback funds if, as .we expect, our
population has grown.
►"� And last, we hope to complete work on the unified development
ordinance which will implement our 2020 plan and submit it to
the City Council for adoption.
In conclusion, let me say I expect 1997 to be anothergood year for
Fayetteville. We'll have more changes and challenges. We all know
we can't stay the same, but it's my goal and I'm sure that of most
citizens, to preserve the special qualities that make our town one
of the best places in America' to live. Working together; we can
make that happen.
OLDIBUSINESS
ALCOHOL IN SEXUALLY ORIENTED BUSINESSES
Mayor Hanna introduced an ordinance making it unlawful to bring,
consume, or allow to be brought or consumed intoxicants or
alcoholic beverages in commercial establishments permitting the
exposure of specified anatomical areas.
City Attorney Rose read the ordinance for the second time.
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February 4, 1997
Alderman Williams explained that the Ordinance Review Committee had
met briefly last week to discuss the two ordinances on the agenda
and no changes were suggested. There was a general consensus to go
forward and pass the ordinances.
Alderman Schaper moved to suspend the rules and go to the third and
final reading. Alderman Young 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 comments from the audience.
Michael Corso, Sharon Drive, heartily agreed with the ordinance and
wished it could be stronger. He would like to discourage this type
of business.
Mayor Hanna pointed out the Ordinance Review Committee is working
on a third ordinance that will regulate the location and placement
of these businesses.
Shay Wright, citizen, asked if another sexually -oriented business
was to be established, would it go before the citizens to oppose
and where would the line be drawn.
Mayor Hanna responded the third ordinance being worked on may
include a provision that every new business of that type would have
to go before the Planning Commission and ask for a conditional use.
Alderman Daniel asked City Attorney Rose to explain what is new in
these ordinances that is not in place on the State level, ABC, or
our municipal ordinances.
Rose responded that the ordinance being considered has to do with
drinking or bringing or allowing alcoholic beverages to be brought
on premises. The chief change from what is already in existence in
State law, other than making it a municipal offense, is that it
allows you to have some degree of control over the alcohol that is
brought into establishments that are not licensed by the ABC, by
the State.
There being no further comments, Mayor Hanna called for the vote.
Upon roll call, the ordinance passed on a vote of 8 to 0.
ORDINANCE 4015 APPEARS ON PAGE OF ORDINANCE BOOK
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February 4, 1997
Mayor Hanna introduced an ordinance prohibiting those who have
received a license for the sale or dispensing of alcohol from
permitting any person to appear on the licensed premises in such
attire as to expose certain specified anatomical areas and
providing for the suspension or revocation of licenses for
violating such a prohibition.
City Attorney Rose read the ordinance for the second time.
Alderman Miller moved to suspend the rules and go to the third
reading. Alderman Williams seconded. Upon roll call, the motion
passed on a vote of 8 to 0.
City Attorney Rose read the ordinance for the third time.
Alderman Williams pointed out that this is exactly what those clubs
have already agreed to do and this is a good ordinance.
Mayor Hanna asked for comments from the audience. There being
none, he called for the vote.
Upon roll call, the ordinance passed on a vote of 8 to 0.
ORDINANCE 4016 IS FOUND 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 January 21 regular City Council meeting;
B. Removed from consent agenda (rental car agreements);
C. A resolution approving an agreement with McClelland Consulting
Engineers, Inc., in the amount of $62,040 plus a 10%
contingency of $6,204 for engineering services for the
construction of Sunbridge Extension;
RESOLUTION 9-97 AS RECORDED IN THE CITY CLERK'S OFFICE.
D. A resolution approving an agreement with McClelland Consulting
Engineers, Inc.; in the amount of $68,380 plus a 10%
contingency of $6,838 for engineering services for the
reconstruction of the Old Missouri Rd. and Zion Rd.
intersection;
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February 4, 1997
RESOLUTION 10-97 AS RECORDED IN THE CITY CLERK'S OFFICE,
E. A resolution approving a contract with McClinton -Anchor in the
amount of $218,992 plus a 15% contingency of $32,848.80 for
the construction of Trust Street and approving a budget
adjustment;
RESOLUTION 11-97 AS RECORDED IN THE CITY CLERK'S OFFICE.
Alderman Williams moved to
Daniel seconded. Upon roll
to 0,
accept the consent agenda. Alderman
call, the motion passed on a vote of 8
NEW BUSINESS
RENTAL CAR AGREEMENTS
Mayor Hanna stated this item had been removed from the agenda.
ANNEXATION & REZONING RZ96-19
Mayor Hanna introduced a resolution and an ordinance annexing and
rezoning property located east of Dead Horse Mtn. Rd. and north of
Stone Farm Rd. as requested by Jim McCord on behalf of Meadow
Enterprises.
Mayor Hanna stated the annexation is the resolution requesting to
annex 765 acres as A-1, Agricultural. The ordinance is a request
to rezone 37.97 acres from A-1, Agricultural, to R-1, Low Density
Residential.
City Attorney Rose read the resolution accepting the annexation.
Rose explained that these have normally been done by ordinance in
the past. However, the statute that requires us to do this
specifically says it may either be by ordinance or resolution. The
petitioners have requested a resolution. There is no legal problem
with that. In the distant past, we have done it by resolution.
Rose confirmed this resolution could be tabled if the Council
desired further study.
Alderman Williams stated because this is such a large portion of
land there should be opportunity for public opinion.
Jim McCord, attorney, stated the developer had no objection to
deliberation and doing this by ordinance in three readings.
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February 4, 1997
City Attorney Rose read the ordinance accepting the annexation for
the first time.
Mr. McCord explained they'd proposed a resolution because it became
effective immediately. He could not see how an emergency clause
could be justified for an ordinance. They wanted the annexation to
-be effective when this board makes a decision.
Alderman Schaper stated he had asked on the Council tour what the
real development potential of this -land is. Development requires
infrastructure, which we may not have for a piece of land this
huger, He asked the staff how this land is laid out, how much is in
.the flood plain, etc.
Alett Little, Planning Director, stated she had contacted Mr.
McCord and the engineer for the project and asked for a map showing
how the 300 hundred acres that this developer owns relate to the
rest of the site.
Dave Jorgensen, engineer, provided maps to the Council.. These had
been done in a hurry but gave an idea of where this property is.
The area that is to be a golf course was shown. The rest of the
area will be developed one of these days. He anticipated housing
in this area. Meadows Enterprises purchased approximately 300
acres from the Goff farm. The part taken to the Planning
Commission last week was Phase I on the east corner that comes off
Highway 16, 38 acres. The flood way line goes in an arc. He gave
the rough calculation of 240 acres actually in the flood way.
Little explained the reason the flood way is a significant number
is that in order to stay in conformance with FEMA regulations the
City does not allow any building in the flood way. That amount of
land needs to be subtracted from what would be considered
developable land. Under our flood plain management regulations, we
have restrictions on development within the flood plain.
Alderman Schaper asked how much of the 1,008 acres of
undeveloped land is developable, if you leave out the flood
the restrictions of the flood plain, and the golf course.
Mr. Jorgensen replied we have 1,000 acres and we take out say 250
for the flood way, so down to 750, and 200 in the golf course, down
to 550, and it is very possible that in the grand scheme of things
there might be another golf course that will be another 200 acres.
At this time, the developer has only taken on 300 acres.: The land
on the west side is still owned by Mr. Goff.. The only part that
Meadows Enterprises owns is the shaded area, 300 acres.
now
way,
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February 4, 1997
Alderman Schaper arrived at a figure of 450 acres of total
developable land, including the flood plain, and 1,350 dwelling
units that generate 13,500 auto trips per day.
Little felt he had made a leap from the A-1 zone this would come in
as to assuming it would eventually be R-1, the General Plan shows
it to be residential.
Alderman Schaper stated the land use plan shows it residential and
we have a responsibility to look at the potential development
impact of land.
Mr. McCord pointed out that if the City annexes the property, it
will have zoning control. If the remainder is not annexed and is
developed, the developer just has to meet the 10,000 sq. ft. per
lot minimum requirement subdivision regulations, which could be
much higher density than if annexed and the City has zoning
control. It is in the City's best interest to annex the entire
property to retain zoning control and to ensure that any
development is on public sewer and not septic tank which could
pollute the White River, which this developer wants to avoid at all
cost. That is his primary reason to seek annexation, to get on the
public sewers. This developer only owns 303 acres. If the Council
does not want to annex the 777, or whatever, this developer would
not object because he just has an option to buy additional property
from Goff Farms. Mr. Goff joined in the annexation petition
because after conferring with staff, we thought it was the City's
desire to have all the property annexed so the City would have
development control.
Alderman Williams agreed this is a good development that would
provide a lot of green space, open space, and be a very good use of
flood way that otherwise would not be used. It is close to Highway
16 East. The biggest problem is the bridges, which would have to
be addressed as development goes forward. If they require
increased structures, that would have to come from the developer
that creates that new requirement. It makes sense to annex the
entire area to protect the neighbors and to provide an attractive
development in the south part of town.
Alderman Schaper was not arguing that the Council should not do
this, only that the Council should fully understand the potential
implications on the infrastructure. Nine thousand more vehicle
trips a day on Highway 16 East, where the road is already at
capacity, is a substantial impact on our infrastructure. It is a
State highway and it is in the State program that this road will be
widened, but 9,000 trips a day almost fills up the four -lane. The
capacity of a four -lane is 22,000 trips a day, somewhere in there.
We need to look at the past of perpetually playing catch-up. If
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cit. 36
February 4, 19,97
this were developed to its capacity, even at less than the average
intensity, this would almost fill up the four -lane road noteSeri'
built yet.
Alderman Pettus asked Mr. McCord about his remarks regarding
greater density development if not annexed.
Mr. McCord explained that the City under Arkansas law does not have
zoning authority beyond the corporate limits. :The City does` have
subdivision regulations within its designated planning area, but
the only density control is minimum lot size, which is 10,000 sq.
ft., a higher density than this developer is proposing.
Alderman Pettus asked if the access shown on the 'map in, the
northeast corner, right up at the top of the hill., had poor
visibility.
Mr. Jorgensen responded that was one of the Planning Commission's
requirements, that they check the visibility. It abides by the
minimum requirements. The 50 ft. right of way is owned by Meadows
Enterprises.
Mr. McCord added that, as required by staff, Mr. Jorgensen had made
calculations on sight distance .and determined that the sight
distance to the east and west from the proposed access meets or
exceeds the minimum requirements set -out in the American
Association of State Highway & Transportation Commission's green
book.
Alderman Young asked what the less and accept areas area
Mr. Jorgensen explained that is property retained by Goff and
Meadows Enterprises would like to'develop that one of these days.
It is developable land and included in the figure of developable
land.
Alderman Young asked Little about the density if it is not annexed.
Little responded she would have Added the additional constraint of
septic tanks. Ten thousand square foot lots are permitted and we
have a City policy of not extending sewer, so that lot 'would have
to be granted permission by the State to have a septic tank on it.
It is possible to do, but we would -not have control of it.
Alderman Daniel had questions about other possible ingress and
egress.
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February 4, 1997
Mr. Jorgensen agreed the Planning Commission required that there be
two points. The Planning staff thought it would be a good idea to
have another access over to the east. The western side is bordered
by the golf course. We did agree to another access to the east and
that is going to extend to the limits of our property, a stub -out.
Alderman Schaper asked City Attorney Rose if the City can bring
annexed property in with certain conditions or restrictions to
account for eventual development impact or certain requirements
when that property develops.
Rose replied the sole decision is whether or not the Council can
accept this territory as the County Court has given it. He
reminded the Council that this is lust the first step. Conditions
on future development are not a proper concern of annexation.
People are annexed to come intothe city as any other citizen.
Alderman Schaper had concerns about property being developed in
small increments, as this one is, 38 acres out of a thousand, and
how the City sometimes lets the off-site improvements go by the
wayside. Taking a look at the entire development potential, we
could say we have 900 homes here and you are going to build 78
therefore you are in for 78/900 of the off-site improvements that
this total tract will require.
Mr. McCord stated this will be a tremendous asset to the community.
The developer is spending several million dollars to construct a
championship -quality, public golf course and a quality subdivision
around that golf course. He is complying with all off-site
requirements recommended by the staff and confirmed by the Planning
Commission and will continue to do so if future property is
developed by this developer.
Little stated they have considered off-site improvements. One
decision reached by the Planning Commission which was recommended
by the staff concerned the very large street, a minor arterial,
that cuts through a portion of this property. Staff felt it was in
the best interest of the City to require the right-of-way for that
street at this time, so that further development would be planned
around that, and the Planning Commission made this requirement.
Other things were required, safety improvements to the bridges,
improvement of Goff Farm Road.
Mr. McCord stated that Mr. Goff agreed to dedicate that portion of
the right-of-way that crosses his property, that Meadows
Enterprises does not own at this time, to the minor arterial.
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February 4, 1997
Alderman Daniel had had a -question about the waste water treatment
plant. -Staff had answered that we can handle this first phase; but.
after this it might get tight if we don't haveanother'treattnent
plant. -
Little stated the City undertook a survey of its sewage treatment
capacity. As a part of that, planning has worked with engineering.
What is receivedfrom that study will be exactly. what treatment
capacity will need to be developed to serve future development.
Mayor Hanna asked for comments from the audience. There were none.
Mr. McCord suggested tabling the resolution until the next meeting
and doing it by resolutionasopposed to an ordinance. Tabling the
resolution would give plenty of time for public input. If the
annexing is final, the financing can go forward.,
Rose stated there is an ordinance on the first' reading. He could
get the Council wherever they wanted to be. -
Little explained an ordinance takes 30 days to mature; a resolution.
is effective immediately.
_'Alderman Williams Movedtotable the resolution. Alderman Young
`se'c`onded: Upon roll call, the motion.passed on a vote of 8 to 0.
City Attorney Rose read the rezoning ordinance, RZ96-19 for the '
first time.
TAiderman Schaper asked for. better maps and computations by the next,
.meeting.
AMENDMENT TO THE PUD ORDINANCE
Mayor Hanna introduced an 'ordinance amending the Planned < Unit
Development Ordinance.
City Attorney Rose read the ordinance for the first time.
Alderman Daniel understood this is -simply a clarification of the
PUD • ordinance. As it is, it could 'be read that additional density
in a PUD is mandatory.
Alderman Schaper added thi-s is an interim measure. The PUD
ordinance has serious problems. We need new proscriptions of
absolute densities.
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February 4, 1997
Alderman Williams moved to suspend the rules and go to
reading. Alderman Miller seconded. Upon roll call,
passed on a vote of 8 to 0.
the second
the motion
City Attorney Rose read the ordinance for the second time.
Alderman Young moved to
Alderman Zurcher seconded.
vote of 8 to 0.
go to the third and final reading.
Upon roll call, the motion passed on a
City Attorney Rose read the ordinance for the third time.
Mayor Hanna asked for comments from the audience. There were none.
Mayor Hanna called for the vote.
Upon roll call, the ordinance passed on a vote of 8 to 0.
ORDINANCE 4017 IS FOUND ON PAGE OF ORDINANCE BOOK
ANIMAL SHELTERING AGREEMENT
Mayor Hanna announced this item was pulled from the agenda.
VACATION VAC97-01
Mayor Hanna introduced an ordinance vacating a utility easement
located at 670-672 Martha Drive as requested by Dave Bevis.
City Attorney Rose read the ordinance for the first time.
Alett Little, Planning Director, stated that there was no survey
performed on this property when it first sold. Surveys are not
required by the lending institutions but are required for title
insurance.
Alderman Pettus moved to suspend the rules and go to the second
reading. Alderman 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 Schaper moved to suspend the rules and go to the third
reading. Alderman Miller 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 comments from the audience.
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February 4, 1997
A citizen asked if the easement was used by the sanitation
department and utility vehicles.
Mayor Hanna informed him it was not as this is just about 18".
directly behind the house, the overhang of the house.
Alderman Miller added the utility easement is still wide enough.
There being no more comments, the Mayor called for the vote.
Upon roll call, the ordinance passed on a vote of 8 to 0.
ORDINANCE 4018 IS FOUND ON PAGE OF ORDINANCE BOOK
PUBLIC FACILITIES BOARD ACTION
Mayor Hanna introduced a resolution approving the issuance by the
Fayetteville Public Facilities Board of refunding revenue bonds
(Butterfield Trail Project) in the principal amount of $29,100,000
- and ratifying the resolution of the Fayetteville Public Facilities
Board.
City Attorney Rose explained this is an unusual happening for the.
Council. The statutes of Arkansas allow public facilities boards
to be created by municipalities. In 1978, the City created the
first public facilities .board, called the Residential Housing
Facilities Board. It was to obtain financing for residential
housing facilities.
In 1981, the name changed by ordinance. This ordinance created the
now Public Facilities Board. It was. determined by ordinance that
this Board was authorized to issue bonds in accordance with
procedure described in Act 142 of 1975 for the purpose of financing
health care facilities.
In 1984, we passed another ordinance to amend those ordinances
which allowed the Fayetteville Public Facilities Board to issue
revenue bonds to finance the construction of health care and
residential facilities for elderly persons. That is how the
Council gets before it the Butterfield Trail Village project, a
product of those bonds initiated in 1984.
The State statute does not require the Public Facilities Board to
have any further connection with the City Council afterit is
created. It is created, ". . . to have perpetual succession as a
body politic and corporate and to adopt bylaws for the regulation
of its affairs and the conductof its business." In other words,
the Council does not take it to raise; it is a separate child of
its own.
X16
41
February 4, 1997
In 1984, when the Council established this Board, it provided
within the ordinance that the issuance of the revenue bonds that we
talked about to finance the construction of health care and
residential facilities for elderly persons had to be accomplished
by resolution adopted by the Board but ratified by the Fayetteville
Board of Directors. Rose stated he did not take this to mean the
Council has to agree with what the Board has done, but ratify the
resolution and show they have indeed considered all that needs to
be considered under the ordinance and have ratification approval of
what was adopted by resolution. That resolution is before the
Council.
The other question asked is whether or not the City has liability
for the bonds issued by the Board for this project. Rose stated
his legal opinion is that the Council does not have any financial
responsibility for them. He read from the statute, "It shall be
plainly stated on the face of each bond that it has been issued
under the provisions of this chapter, that the bonds are
obligations only of the Public Facilities Board, and that in no
event shall they constitute an indebtedness for which the faith and
credit of the creating municipality or county or any of its
revenues are pledged."
Rose stated the Public Facilities Board is a separate legal entity.
It is a body corporate created by statute and incurs no liability
on behalf of the City. This Board is completely separate from the
Council. The only touching was the creation of it. What is before
the Council is that resolution from the Public Facilities Board,
and they are asking for ratification of it under the terms of the
ordinance.
Alderman Young asked if the Council could amend the ordinance one
more time and take out the provision that the Council ratify their
action.
Rose believed that was possible.
Alderman Williams would not favor that amendment. It makes sense
to have the Council overlook something as major as a $29 million
bond issuance.
Alderman Pettus, referring to what was to be plainly stamped on
front of the bonds, was not willing to say that would relieve the
City of all liability.
Steve Gunderson, representing Butterfield Trail Village, stated the
Council had received a packet from him in which he addressed
concerns he felt the Council had.
17
42
February.4, 1997
Don McGuire, Chairman of the Board of Butterfield Trail Village,
gave a brief historical perspective. Five Fayetteville churches
came together in the early '80s to organize a nonprofit corporation
to develop, build, and operate a life care retirement center. It
sits on a 20 -plus acre campus on E. Joyce and presently has over
350 residents living in 244 independent living units and receiving
such services as transportation; food service; laundry; house
cleaning; and skilled nursing care from the 60 -bed, state-
licencensed health care center. The health care unit provides the
service that makes Butterfield Trail Village a unique place.
Through this service, life care is provided to the residents. If
necessary, residents move to the health care unit at absolutely no
increase in cost. March 1, 1997, will mark 11 years of successful
operation.
The initial financing of Butterfield Trail was through the sale of
municipal bonds in the early 1980s. These bonds were also issued
through the Faytteville Public Facilities. Board. Because
Butterfield Trail Village was a new entity and because of the
exceptionally high interest rate in those days, from that bond
issue they were paying 12-13% interest. They operated successfully
at those rates until 1989 when they saw a window that allowed a
refinancing which lowered interest to the 9.5% range. These bonds
were also issued through the Fayetteville Public Facilities Board.
The Butterfield Trail Village Board operates specifically through
the finance committee which has been studying this refinancing
effort for the past 13 months. The committee again considered the
rate structure of a straight, fixed rate municipal bond issue.
Currently, that rate is'in area of 7.5% However, the structure the
committee has chosen involves credit enhanced, variable rate bonds
with current range of 5.5% This .interest rate results in
tremendous savings in interest costs to the Village. At that rate
it will be some $900,000 the first year alone. More importantly,
this would translate to some $4,000 decrease per living unit in
Butterfield Trail. He assured .the Council that members of the
finance committee considered very carefully the implications of the
variable rate structure. However, after factoring the possibility
of substantial increases in the interest rates with the advantage
of this bank letter of credit, they would still have considerable
savings if the interest rates increase. After due consideration,
they have chosen to move forward and request the Council to approve
the Public Facilities Board's. resolution.
Alderman Trumbo stated he understood the Council was not saying
this is what they would do as a governing body.
18
. 43
February 4, 1997
City Attorney Rose stated all he had to go by is what the ordinance
says. It says the Council is ratifying the resolution passed by
the Public Facilities Board. He read the definition of ratify from
Black's Law Dictionary: "In a broad sense, the confirmation of a
previous act done either by the party himself or another . . . The
affirmance by a person of a prior act which did not bind him but
which was done or professedly done on his account whereby the act
as to some or all persons is giving effect as if originally
authorized by him." Rose stated his best opinion is that the
Council does not necessarily have to agree with the Public
Facilities Board's decision but should listen to any fault and
questions which give reason to make this an unrational decision or
one that a reasonable person would not or should not make, then the
Council ought to have answered those objections. He did not think
the Council was necessarily supposed to substitue its judgement for
that of the Public Facilities Board.
Alderman Trumbo asked, regarding the reasoning of the refinance and
adding the $1.1 million, if the $200,000 a year was an annual
letter of credit fee to the bank.
Matthew Weaver, FORCE Financial Group, answered that the letter of
credit fee is a point and a quarter a year. He stated the reason
for the letter of credit is to secure the bank's triple A rating,
which allows the bonds to be sold to tax exempt money market funds.
Those rates today would actually be in the 4.5% range. 5.50,
including the add on fee, would be the average of the bonds over
the last ten years. It has a 10% cap on the float. The minimum
principal payments will be stretched out over a 30 -year period.
That gives Butterfield the flexibility of having a low required
payment. The way the transaction is structured, the interest rate
savings will be required to be used by Butterfield to optionally
redeem their debt. According to these projections, the debt would
be paid off in nine years. They will pay approximately $19 million
less in interest costs by retiring their debt over the nine year
period. There is no prepayment penalty and the bonds can be called
in about 45 days.
Alderman Trumbo asked if the Public Facilites Board has changed,
because the last nine years they did not wish to prepay or redeem
earlier, so this is a change in their philosophy.
Mr. Weaver agreed. With the non -rated bond that was issued in '89,
these bonds typically have a ten year period in which they cannot
be prepaid. On top of that, there is a two or three percent
prepayment penalty. One of the advantages of this debt structure
is you can prepay it at any time without a penalty.
19
February 4, 1997
Alderman Schaper asked if the intent is to not just pass the
savings on to the folks who live there, but to take that money and
pay these, bonds off in approximately nine years.
Mr. Weaver agreed that is the business transaction.
Alderman Trumbo questioned not using the excess liquididty in cash
flow now to. pay the closing expenses and not finance those
expenses. The Council did not have a balance sheet so the exact
amount was not known.
Mr. Weaver replied this is a life care community and a number of
residents have selected refund contracts, which means if they were
to move out or die the estate would be owed a refund. The facility
needs to keep an adequate cash reserve.
Alderman Williams reffered to the charts on page seven of the
handout and asked if the existing debt service is a little over $3
million. Being told this was correct, he asked Mr. Weaver if it
was his statement to the Council that if Butterfield continues to
make that payment, that they can .pay off the current debt under
this new plan within nine years.
Mr. Weaver repliedif they do this refinancing and apply the
interest cost saviings to optionally redeeming the new bonds, they
can repay the debt in nine years.
Alderman Williams asked if it would be the same basic payments of
$3.1 million or would they have to make more than that.
Mr. Weaver responded it could very well be more than that or less.
The optional redemption is tied into the amount of excess cash
balances they have. The way the formula works is once they build
up cash balances above 25% of their outstanding debt, those excess
balances will be used to pay down debt. The 25% is selected to
insure adequate reserves.
Alderman Williams stated certain assumptions were being made. One
was that the interest rates would not go up significantly. He
asked about the existing principal payments from 1998 until it is
paid off in 2014. The exisiting payments on the principal total
$25.5 million. The new principal payments from 1998 to 2027,
thirteen years longer, total $29.1 million, $3.5 million more in
principal. $600,000 goes to Butterfield and he asked where the
other, almost $3 million of principal now owed goes.
Mr. Weaver answered that it ties into the Federal tax code as well
as the need to provide enough cash flow to redeem the old bonds
when they are callable September 1, 1999. The way this works is
20
•
45
February 4, 1997
Butterfield will borrow their pot of money today and they will
invest that money at 5.5% to make interest payments on those old
bonds that are costing 9.7%. In order to make interest payments of
9.7% and pay off those old bonds, you have to borrow more than the
outstanding amount of the old bonds. You need to do that and set
the money aside in escrow to properly defease the old bond issue.
The money has to be on hand before you can defease it and you
cannot pay off the old bonds until September 1, 1999, the first
call date of the old bonds. So that escrow will remain invested
with the trustee at approximately 5.5% until that time. The fact
that the principal outstanding goes up is certainly a deterrent to
creating interest cost savings. Therefore, the interest cost
savings have to be enough to counterbalance that principal
increase.
Alderman Williams asked why it would not make more sense to wait
until next year so they wouldn't have to buy the bonds and have
them earning 5.5% while paying 9.5% for a year and a half before
the bonds can be defeased.
Mr. Weaver replied the availability of the letter of credit and the
ability to lock in to a triple A rating guarantee is the primary
reason for that. It locks in the bank committment today.
Alderman Young returned to the ratify term. He asked if all the
Council would be doing is observing that the Public Facilities
Board did pass the resolution.
City Attorney Rose thought the Council had a bigger responsibility
than that. It is a confirmation of a previous act done either by
a party himself or by another. They are trying to be sure the
Public Facilities Board has made a rational decision, a reasonable
decision under the circumstances. Past that, it is not the
Council's duty to substitute its judgement for theirs. The Council
is under a duty to be sure that what they are doing is rational;
that there is no fraud; that there is no misdealing; that there is
no irrationality about what is being accomplished or asked; that it
is an arm's length transaction, one which Butterfield Trail Village
has considered intelligently; that the Public Facilities Board has
taken their recommendations, has considered intelligently, and
brought to the Council. That process is what the Council is being
asked to ratify and confirm.
Alderman Young had questions about the letter of credit.
Mr. Weaver responded that if there is a default by the facility,
the letter of credit will be drawn upon and the bonds issued by the
Fayetteville Public Facilities Board would be paid off, they would
no longer be outstanding. They would be paid off by the bank.
21
•
February 4, 1997
In response to a question from Alderman Trumbo, Mr. Weaver stated
that FORCE Financial Group has done financing similar to this over
30 or 35 times. They specialize in retirement communities.
Alderman Pettus asked if the bank had recourse if they are required
to pay off the bonds pursuant to the letter of credit.
Mr. Weaver replied the bank has recourse to the facility. They
will be secured by a mortgage on the property and a first lien on
cash and cash balances. If the bonds went into default, the letter
of credit would be drawn upon. The facility would then have a loan
from the bank, and the bank would charge them approximately prime
plus 1%. There is a usury law in Arkansas that restricts that rate
-
to 10%.
Alderman Miller asked if in a worst-case scenario the City would be
held somehow liable for these bonds.
Rose read the statute again, "It will be plainly stated . . . He
could only say it appears the City is not lending its credit to
this; it is not our indebtedness and is plainly their indebtedness.
'Alderman Pettus had questions about the wording of the ordinance.
,She asked City Attorney Rose if when we take on the responsibility
to ratify what they have done, have we waived our right under the
statute.
Rose thought not. He was not sure if the City had the power to
waive the State statute.
Alderman Pettus had questions about Ordinances 2485. She noted
Section 9 appoints the law firm of Friday, Eldredge & Clark as bond
counsel and in none of the amendments had she seen them as bond
counsel.
Wooten Epes, attorney, replied they were appointed as bond counsel
in connection with the issuance and sale of the bonds. Section 7
says, "The Facilities Board is authorized and is limited to issue
this initial series of revenue bonds... That's the only bonds
this ordinance appointed them to serve for. That's the only bonds
this ordinance approves the Facilities Board to issue.
Jim McCord, counsel to the Public Facilities Board, concurred. As
a matter of factual information, he stated the Public Facilities
Board also issued in the 1980s special obligation revenue bonds to
finance the construction of Charter Vista Hospital and the bond
counsel for that transaction was from Illinois.
22
47
February 4, 1997
Mr. Epes stated it is clear this ordinance was the organizing
ordinance for the Facilities Board. It authorized one issuance of
bonds for residential housing facilities bonds and appointed the
counsel for the sale of the bonds. It doesn't say all bonds or any
bonds. It says the bonds.
Alderman Pettus stated the purpose of the first ordinance was to
benefit low to moderate income people. Subsequent amendments seem
added for the elderly and for health care facilities, but it is not
clear that they included everyone, that it wasn't originally and
still for the purpose of elderly and health care of low and
moderate income. She noted Section 3 of Ordinance 2708 pertains to
procedure, not purpose, and she is concerned about that.
Mr. Epes stated this is a residential facility for elderly and for
health care, not of low and moderate income, but they are two
different types.
Alderman Pettus stated she was worried that we have never changed
the initial purpose.
Mr. Epes thought Ordinance 2991, Section 3, does that.
Alderman Pettus did not agree that it did. She asked if bond
counsel would be willing to give an opinion letter.
Mr. Epes replied that bond counsel has on two occasions given
opinions that this ordinance permits this. They gave an opinion in
1984 when they originally issued the bonds and gave an opinion in
1989 when they refunded it. He stated he was ready to give an
opinion that this is permitted.
Alderman Pettus asked if he could give the Council a letter opinion
that this does not violate any of the ordinances and that the City
would have no liability.
Mr. Epes stated he could not do this as he is not employed as their
attorney. His job is to represent to the bond holders that these
bonds are issued properly and legally, and he is willing to do
that.
Alderman Pettus brought up the incinerator case.
City Attorney Rose stated there are a lot of differences between
the incinerator and this. The most dramatic of which is that in
the incinerator case the Authority and the Council were one and the
same. If Alderman Pettus's premiss is correct, the 1984 bond issue
is invalid and the '89 refinancing is also invalid. Rose did not
believe this is the case.
23
48
February 4, 1997
In response to a question from Ben Mayes, Mr. Epes stated his
letter to the Public Facilities Board will state that the bonds are.
properly issued under legal authority granted to the Public
Facilities Board and that the documents they ,execute have :been
properly executed and are binding and enforceable under Arkansas
law. He reiterated what will appear on the face of them, that the
bonds are obligations solely of the Facilities Board and are not
obligations of the City, State, or any political subdivisions.
Alderman Young asked if any of that language will be in any of the
documents that go along with the bonds.
Mr. Epes replied the bonds are a part of the trust indenture and
the official statement shown to investors will state it in bold
letters. That must be done accordingto the .Public Facilities
statute.
Alderman Zurcher moved to pass the resolution.
Alderman Williams had more questions for the banker. The current
issue would be paid out in 2014, which would take 13 years longer. .
He asked how fast it could be paid out under the sweep payments.
Mr. Weaver replied it would be nine years.
Alderman Williams stated the first payment would have to be $5.3
million and you'd have to continue payments of at least $3.7
million just to pay the principal off in nine years. He did not
understand how Butterfield is going to benefit tremendously or do
this realistically.
Mr. Weaver stated the sweep mechanism takes cash balances above 25%
of the debt and uses those to make optional redemption on the
bonds. With that formula and the interest averaging 5.5% over nine
years, the debt can be completely retired in the nine year period.
The concept they have tried to buildin. is thatexcess cash,
balances not needed would be available to redeem the debt.
Alderman Williams asked if the Butterfield Trails Board anticipates
making much larger payments.
Mr. Weaver stated he thought the Board has decided it is prudent to
use excess cash balances to pay off debt early. The prudent cash
balances retained will equal 25% of the debt.
'Aldeiman Schaper thought the confusing part is that if
Butterfield's cash flow is so good, why not just reduce the rent.
24
49
February 4, 1997
Mr. Weaver agreed they will have excess cash flow. This financing
does not take the discretion away from the Board to alter rates.
Alderman Williams noted that monthly fees for apartments in the
next ten years are projected to go up over 57% and the nursing care
monthly fees almost double within that period.
Alderman Williams had another concern in assuming the cash flow
doesn't go up quite as fast. Page seven shows minimum payments.
Initially it shows that Butterfield Trail is saving money. The
first year they have to make a $2 million payment instead of $3.1
million. In the end, if they do that, they will end up paying $7
million more total in interest and principal than if they went
ahead and just paid the other bonds off as it is now. He asked if
that is what the chart shows, if they didn't make any of the sweep
payments and if the rates remained at 5.5%.
Mr. weaver replied that if rates remained at 5.5% and the other
assumptions held, they would make the sweep payments and pay off
the debt in nine years.
Alderman Williams stated page seven just shows the minimum payment
and if that happens they would end up having to pay $7 million
dollars more.
Alderman Schaper stated they do get another 15 years to pay it off.
Anytime you extend the maturity on a bond issue, you wind up paying
more.
Mr. Weaver turned to page eight. The present value of the debt
service savings is $3.7 million. In his opinion it is prudent for
Butterfield to extend the minimum payments of the principal which
will give them more room in the event they run into operational
problems. Those payments would be lower than they would be in the
current bond issue, thus if they run into problems they will go
into default slower than they would with the current bond issue.
Alderman Williams stated that at the current time, the bonds are
all going to be paid off in 2014. Assuming the sweep payments are
not made and the chart on page seven goes forward, from 2015 to
2027 you are still paying and paying interest on an older facility.
He wondered if the Board had considered this.
Mr. Gunderson stated the governmental body and finance committee
has addressed those concerns every year. There are capital
improvement and a renewal and replacement funds that are fully
funded every year and will go forward every year. Adequate funds
are reserved.
25
50
February 4, 1997
Mayor Hanna called for public comment.
George Blackwell, a citizen, asked if they were asking the City to
finance $29,100,000 or to stand behind that. He was told no to the
first and that it was a matter of opinion regarding the latter.
Alderman Williams explained this is to continue the financing that
enabled the initial building. Mayor Hanna added it is a
refinancing to take advantage of a lower interest rate.
Alderman Trumbo stated a problem to look at when refinancing is
extending the amortization and the fee for the bank for the letter
of credit. That is $200,000 a year the bank gets for the next 10
to 20 years.
Lamar Pettus, citizen, stated the ordinance is real clear. In the
ordinance, a bond counsel is appointed for the Facilities Board and
the City Board. It is part of the law. That bond counsel is not
the one designated in the resolution, nor is that bond counsel
being represented at the meeting. If the City expects its citizens
to live up to the law, then the City must honor their laws and
commitments. If that means putting this on hold and changing the
ordinance, that should be done. There is an issue as to whether or
not the City is liable. It is not much to get an opinion from
legal counsel and to ask to see a malpractice policy first.
City Attorney Rose stated he has no malpractice insurance but does
have a policy of insurance provided him by the City for errorsand
omissions. He would never purposely advise the Council to gb
against the law.
Rose read Section 9 from the 1978 ordinance establishing the
Residential Housing Facilities Board. The first eight sections of
this ordinance establish the Board and the funding of some bonds
for housing. The operative words in Section 9 are, . .the
bonds. . The only bonds related here are the bonds related to
this ordinance before they had the authority to do anything else
and any other bonds. The way he read it is that Friday, Eldredge
& Clark is being appointed for the bonds which are mentioned in
this ordinance, the housing bonds and not the Butterfield Trail
bonds. As to liability, he has read to the Council what liability
is by statute and discussed waiver and other instances in which the
Council may be in some way liable through misdealing or collusion.
He did not believe anyone was trying to evade the ordinances or go
against any law.
Mr. Pettus stated if the Council had wanted to change the bond
counsel, they could have changed that ordinance the two times they
amended it. There is $30 million at issue and not so important
that the Council can't delay acting on this and get the opinion in
26
51
February 4, 1997
writing so if someone challenges this we'd have something to help
pay it. He asked if Rose had put his opinion in writing to take to
the insurance carrier if its wrong or has asked anyone on behalf of
the City to do that.
City Attorney Rose responded he has not but his opinion is on
record and the Council is perfectly clear on what his opinion is.
They do not have to take his opinion.
Mr. Pettus asked that the Council not take that opinion and get a
written opinion from a lawyer with a negligence policy the City can
go back on. His primary concern was about the purpose of the
ordinance. The Council had two chances to change the bond counsel.
Alderman Young asked who changes the bond counsel. He asked if the
Public Facilities Board would have the authority to change the bond
counsel if they wanted to.
Rose responded that if Mr. Pettus's premiss is correct, that it is
etched in the ordinance that Friday, Eldredge & Clark shall be the
bond counsel for any and all bonds issued by the Public Facilities
Board, that could only be changed by ordinance. It could be a
simple thing to do. Regarding the purpose problem, if you assume
there is a problem, we could add additional language to eliminate
any perceived ambiguity. This might be a good time to do that.
Alderman Williams recommended doing that so there will not be any
potential problem. He did not disagree with Mr. Rose's
interpretation but thought we should be as careful as possible.
Alderman Schaper suggested tabling this and having the Mayor
appoint a committee of the Council to work out whatever changes
need to be made.
Rose stated the goal is to make everyone pleased with the decision
and to eliminate any possible risk. He reminded the Council they
had discussed at the start whether or not the City might be
eliminated completely from this decision.
Many of the Council agreed they would like to explore that.
Rose stated an ordinance has been prepared that will eliminate the
City's obligations. He asked if that is done, would the Council
wish to proceed with the other changes as well, as there could be
some liability potential on the other.
Alderman Williams suggested fixing up the ordinances as there is no
reason not to make sure the ordinance is crystal clear.
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52
February 4; 1997
Rose clarified the will of the Council. The Council wishes him to
prepare an ordinance to eliminate the Council's involvement with
the issuance of the bonds with the Public Facilities Board; the
Council wishes additional language in the present ordinances to
eliminate any ambiguity as to whether or not these bonds may be
reissued; and the Council wishes to eliminate Friday, Eldredge &
Clark, if there is any uncertainty, as the bond counsel ofchoice
under the ordinance; and the Council wishes him to clarify the
purpose. He could have this for the next agenda session.
Alderman Trumbo asked if the bank would be just as happy to do this
a year and a half from now.
Mr. Weaver replied their commitment runs until the end of February,
1997. It may or may not be able to be extended. It isnot common
to ask the bank for a commitment a year and a half out.
Alderman Trumbo did not understand the urgency, as the financial
conditions of the bank and Butterfield will be the same a year and
a half from now. Regarding reissuing these bonds, he asked if the
.Butterfield people would entertain paying the cost of an attorney
to give the City an opinion.
Don McGuire, Chairman of Butterfield's Board of Directors, stated
this turn of events was entirely unexpected. He has been involved
with this for 16 years. When they approached the refinancing, he
assumed it would go forward the way the previous two have.
Butterfield has incurred several thousand dollars to bring the
experts on board. -
Mr. Gunderson asked if a special meeting could be called and an
emergency clause attached to the ordinance.
Alderman Williams would not have a problem with an emergency clause
but would not favor a special meeting. There is a regular meeting
before the end of February.
Alderman Pettus asked Mr. Gunderson if he was saying the bank would
say no if the Council waits two weeks.
Mr. Gunderson said it is scheduled for everything to come together
at the end of February. .If it does not, and other events between
now and the end of February which cannot happen unless this
resolution has been ratified, then the closing will not take place
as scheduled. If that happens, the bank has said no. The letter
of credit and commitment of the bank is only good through February
of 1997. They have been working for 13 months with the bank to
hammer out terms.
28
53
February 4, 1997
David Lashlee, Butterfield's Finance Committee Chairman, stated
they have over 300 taxpayers they are working for. The committee
has been engaged in considering all of the documents and have
retained five attorneys. The Council is putting a dead end to what
they have been considering for the past year. The committee is
composed of three public accountants and a retired accounting
professor. To ratify what the Facilities Board is doing is just to
say what they have done is legal.
Alderman Williams stated this is a $29,000,000 decision and the
documents were presented just a week ago and some less than a week
ago. The Council would go forth with all due speed and were not
trying to put up any hurdles.
Mr. Gunderson asked if the Council amends the ordinance with an
emergency clause, is there not a 30 day referendum that would allow
a challenge.
City Attorney Rose explained the purpose of the emergency clause is
to make the ordinance immediately in effect. Whether or not to do
it would be something the bond counsel would be better able to
answer. You may not want to issue the bonds until the 30 days has
run.
Alderman Williams pointed out their interpretation was that they
don't need any changes, so this would not slow them down.
Mr. Epes stated if you pass a change it subjects that ordinance to
referendum, as well as rejecting the City's counsel, his own
opinion, and others by saying there is a problem with the
ordinance.
Rose stated it would be the part that is changed that would be
subject to the referendum.
Alderman Williams stated this is the part Mr. Epes did not think
was necessary anyway.
Mr. Epes stated it would be great if the Council would take his
opinion of that. He gave that opinion to bond holders to the tune
$29,100,000 for which his firm does in fact have insurance.
Mr. Pettus pointed out that Butterfield is paying for that opinion.
Mr. Weaver asked what exactly would be subject to the referendum.
City Attorney Rose stated he understood the Council would vote at
the next meeting on an amendment to the ordinance establishing the
Public Facilities Board. That amendment will do three things.
29
54
February 4, 1997.
One, it will eliminate the City's involvement.in any ratification.
Secondly, it will eliminate the Friday firm as the bond counsel.
Finally, it will make clear that health care, is an addition to the
other named purposes of the ordinance. Once the Council votes on
that with an emergency clause, it will become immediately
effective. At that point, there would be no need for a resolution
.from the Council. The Council would be eliminated from the loop.
Alderman Williams thought they could still contest the ordinance
that eliminated the Council.
Mr. Weaver stated the soonest bond issue would be 30 days from the
time the Council meets two weeks from now.
Alderman Williams stated that is not correctbecause he would
oppose not having any overview; If the Council continues to have
overview, they can pass the resolution and Butterfield could have
the bond issue immediately because that cannot be contested. The
resolution cannot be contested.
Rose agreed the .resolution 'would be effective immediately and
cannot be taken for referendum.
Mr. Weaver asked if bond counsel could give an opinion they could ,
close on.
Mr. Epes replied not if they amend the ordinance which gives the
Public Facilities Board the authority to act.
Alderman Young 'stated the ordinance could be passed .after the
resolution.
Alderman Pettus moved to table this. Alderman Young seconded.
Upon roll call, the motion passed on a vote of 8 to' 0.
Park Land Purchase
Mayor Hanna introduced a resolution approving the purchase .Of 2.5
acres from Mrs. Fred Gulley for additional park land at Gulley
Park.
Alderman Daniel was in favor of this as the Park" Board was
recommending it. It seems expensive but is an ,opportunity we
should take advantage of and probably won't come around again.
Bill Ackerman, Parks and Recreation Advisory Board, explained this
is==a. continuation of a facility we already have. We need ..
additional parking space. Theopportunity to pick up the 2.5 acres
is a one-time shot. We can use it to access on the north side for
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February 4, 1997
a number of uses in the future. We have congestion on Township
where the only access to the park exists. We have parking problems
there. There is not adequate parking for the use the park gets.
This 2.5 acres could be utilized for a police or fire substation.
The price is higher than the original purchase ten years ago, but
that is the nature or our current economy. A developer could put
in a number of residences that would add to the congestion. It is
a prudent acquisition. It won't get any cheaper and there won't be
any more.
Alderman Daniel envisioned this used as a park and hated to see any
more parking lots go in.
Alderman Williams wondered if building a parking lot off Old Wire
Road, a very busy road, would lead to overuse of the park and
remove a buffer from the road noise and danger.
Mr. Ackerman said the Council has a choice of acquiring the land
and using it for what it thinks is prudent, whether it is parking
facilities or to expand the park itself or they can let a developer
buy it and develop it.
Alderman Schaper stated if the City continues to pour money into
Gulley Park to the exclusion of other areas of the city, we'll
never have another large park in another area. The popularity of
the park indicates people need parks, not just sport complexes. If
there is overuse, it is because people are crying for this kind of
park. If we take the same amount of money and use it to buy land
in other sections of the city, maybe people won't drive from all
over Fayetteville to go to Gulley Park.
Alderman Miller agreed. On the south side of Fayetteville there is
a lot of park land that has not been developed. Combs Park has
basically been abandoned. Finger Park's trail has not been
maintained for years. Great House Park has been abandoned. We
have many other places that could use trails, lighting, bathrooms.
We could take this money and buy 10 or 15 acres somewhere else.
Alderman Williams thought one of the nicest things about Gulley
Park is that it is bordered on two sides by houses instead of major
roads. If we buy this seven -unit lot, instead of having seven
houses, we would have parking right next to a very busy road. This
gave him concern as to the direction of Gulley Park. Would we keep
it a neighborhood park or expand it and bring other people in from
other parts of town and give them a big parking area?
Alderman Daniel asked about sidewalks or trails along Old Wire so
residents could access it by foot, if there is no parking lot put
in or a small one.
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February 4, 1997
tKevin Crosson, Public Works Director, stated the Parks Director had
'looked at buying just one or two lots strictly for access. The
owner was not interested in that proposal.
Crosson assured Alderman Pettus that if the Council approves -this
purchase, they would not be required to put .additional parking
tthere. This just allows the Council to take advantage of that
:parcel...being available.
Alderman Daniel asked ifthiswas approved would it be out of the
Council's hands as to what is done with it.
Crosson replied the Council could ask the Parks Board to'bring a
plan back to the Council.
Alderman Schaper pointed out the owner might be interested in
selling a portion, once they were aware the' Council was not
interested in purchasing the whole thing.
Crosson agreed the Council. could ma
to the property owner with that kin
Dale Clark, Parks Director, stated.
who represents• Mrs. Gulley, and Mrs.
if they sold it, they wanted it to
reasons and to not be disturbed as
ke a. formal request .to go back
d of .proposal.
he had visited with Mr. Dunn,
Gulley., Their choice was that
all go together for financial
long as she is living there.
Alderman Schaper stated that- usually if you don't get the use of
something you are buying an option; you don't shell out the whole
purchase price.
Alderman Zurcher did not think houses in there would be a worst
case scenario.
Clarkstatedthe appraisal came in at $129,000 and the family
thinks it is worth significantly more than that. Theyffeel.they
are making concessions by selling it to the City.
Alderman Schaper suggested they would do well to sell part to the
City and part to a developer. He did not understand why the City
.would buy the house they don't need,- which is very marketable to
someone else.
Alderman Pettus asked how usable lots l
Clark stated the criticism he hears all
about the crowdedness for parking. This
provides access from Old Wire Road.
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-4 would be to the City,
the time of Gulley 'Park is
is a possible solution and
57
February 4, 1997
Crosson clarified that Gulley Park is similar to Wilson Park in
that it is a park for a large neighborhood area.
Alderman Schaper noted 130 cars could be parked on one acre of
land.
Clark stated they are trying to get 32 spots in the lot off
Township. This is not adequate, and somewhere in the neighborhood
of that many more is needed to accommodate the people presently
using the park. We are not anticipating 120 spots or anything like
that.
Mayor Hanna asked about making a parking lot on the land that
Sweetser gave.
Clark responded the City only has about 30 feet. He had not
explored whether this would give access to the land behind it.
Mayor Hanna asked for comments from the audience.
Allen Dunn stated he has been told by Mrs. Gulley time and time
again that her hope is that the City has the remainder of Gulley
Park. When she made up her mind to dispose of the remainder of the
property, she asked him to contact the City.
George Blackwell, citizen, lives in the south part of town where
there is park land that needs to be built up. He felt Mrs. Gulley
was being represented and not the Park Board. He could not see the
City paying this amount of money for 2.5 acres and letting Mrs.
Gulley retain possession of the property and taking it off the tax
rolls. At one time the City wanted to buy this and she did not
want to sell, which was her privilege. The property should be
appraised by two or three appraisers.
Mr. Ackerman stated the Parks Board evaluated this opportunity and
felt it was an opportunity to pick up 2.5 acres to be contiguous
with our existing facility. There is a window of opportunity that
won't be available indefinitely. It is common to not get immediate
access to land when acquiring it. Certain circumstances surround
each acquisition. Opportunities dictate the circumstances. The
Parks Board made what it felt was a prudent decision to bring this
to the Council. It would be an asset to this park, whether it will
be a parking area has not been determined. We could access the
park where we don't have access now. We are overcrowded at the
present access point and the neighbors are complaining and so are
the participants.
Mr. Blackwell felt if Fayetteville ever had a justifiable need for
this property, they could file eminent domain.
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February 4, 1997
Alderman Schaper asked if the original land had been appraised and
bought at fair market value.
Clark thought it was bought at fair market value but did not know
for sure if there was an appraisal done.
Mayor Hanna pointed out the siding on the house was asbestos and
asked if anyone had researched the cost of disposing of this. We
should be aware of what we would have to pay for this.
Alderman Trumbo asked if Mr. Clark could go back and ask for the
four lots without the house.
Clark responded he could.
Mayor Hanna asked if the City had any property adjoining Mrs.
Gulley's property on Old Wire Road.
Clark replied we have, a ditch cut in for drainage.
Mayor Hanna asked if we could buy just one or two lots and go back
deeper on the existing property we own for sufficient parking.
Crosson stated he would prefer, if they wanted to entertain a
lesser amount, that the Council do it by resolution.
' • Alderman Zurcher suggested an option for Mrs. Gulley, if she did.
not want this land to be developed, would be to sign over a
'Conservation easement to the Ozark Land Trust. A parking. lot is
not preservation. Buying other park land for where this
overcrowding is coming from is great preservation.
Alderman Williams moved to table this. Alderman Young seconded.
Upon roll call, the motion passed on a vote of 8 to 0.
OTHER BUSINESS
MUD CREEK BRIDGE AMENDMENT
Mayor Hanna introduced approval of the amendment and $10,000 to
fund amendment 3. to the engineering agreement with Development
Consultants, LLC, for the design of the .Mud Creek Bridge
replacement.
Alderman Schaper noted if thishadn't come so late, it would have
gone on the consent agenda.
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February 4, 1997
Alderman Schaper moved the resolution. Alderman Miller seconded.
Upon roll call, the resolution passed on a vote of 8 to 0.
RESOLUTION 12-97 AS RECORDED IN THE CITY CLERK'S OFFICE.
Announcements
Peggy Smith, Juvenile Concerns Committee, announced the committee
will be hosting a Mardi Gras party for the Fayetteville area teens,
Tuesday, February 11, from 7:00 to 10:00. She thanked the Council
for its financial support.
ADJOURNMENT
There being no further business, Mayor Hanna adjourned the meeting
at 10:10 p.m.
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