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HomeMy WebLinkAbout2006-06-05 - MinutesCity Council Joint Water & Sewer & Street Meeting Minutes June 5, 2006 Page 1 of 9 Member Aldermen Mayor Dan Coody Ward 1 Position 1 - Robert Reynolds Tav�e 1 Ward 2 Position 1 - Kyle rt Cook City Attorney Kit Williams 1 Ward 3 Position 2—Robert Ferrell Ward 4 Position 2 -Lioneld Jordan f City Clerk Sondra Smith ARKANSAS Ward 2 Position 2— Don Marr City of Fayetteville Arkansas City Council Joint Water & Sewer and Street Committee Meeting Minutes June 5, 2006 A joint meeting of the Fayetteville City Council Water & Sewer Committee and Street Committee was held on June 5, 2006 at 6:00 p.m. in Room 219 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. MEMBERS PRESENT: Alderman Don Marr, Alderman Lioneld Jordan, Alderman Kyle Cook, Alderman Bobby Ferrell; Alderman Robert Reynolds Staff Present: Steve Davis, Gary Dumas, Tim Conklin, Ron Petrie, Susan Thomas, Chris Brown 1. Call Meeting to Order Chairman Kyle Cook called the meeting to order. 2. Discussion of the financing options for the remainder of the Wastewater System Improvement Project and the proposed Citywide Transportation Improvement Project Alderman Cook said the meeting will begin with discussion of some financing options for the WSIP. After that, the Water & Sewer Committee meeting will be adjourned and the Street Committee meeting will begin. Steve Davis had already distributed a handout and Alderman Cook now reviewed it with the Committee. The total identified financing need at this point is $55,185,000. Part of that, $4,725,000 is for the Farmington Lift Station. That portion may be pulled out because it will be a separately financed item between Farmington and the City of Fayetteville. Currently on hand we have $5.1 million in sewer system cash and through May of 2006 we have wastewater impact fees totaling $2.5 million. At the last meeting the Committee asked staff to come back with recommendations on where additional money could be found in the CIP or elsewhere. Staff has identified two items out of the Water & Sewer fund. Out of the sewer system rehab CIP projects through 2007-2009 they have identified $1,590,000. Also $200,000 has been identified from the ongoing Mt. Sequoyah sewer improvement project. From the sales tax capital improvements fund, the Hwy 265 appropriation, $1 million has been identified that could be pulled without hindering the project. Out of the community park appropriation, $613,000 has been identified that would not hinder that project. The total of the items identified is $15,700,000. Potential future resources include the 35 acre land sale at the new treatment plant. Adding that into the total gives us an additional debt amount of $38,357,000. For that amount the Committee would ask the voters to extend the 3/4 cent sales tax 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Joint Water & Sewer & Street Meeting Minutes June 5, 2006 Page 2 of 9 and initiate a '/4 cent sales tax for a total sales tax of 1 cent. This would be roughly a three-year extension. Alderman Marr asked if the sale of the 35 -acres at the wastewater treatment plant site would limit the City in any way if there were future expansion needs for this project. Steve Davis said the acreage is the northern -most portion of the site and would not limit expansion of the project if needed. He pointed out that though $200,000 from the Mt. Sequoyah sewer improvements project had been listed as a possible place to pull funds, he now advises that if the City is going to be on Mt. Sequoyah doing the water improvements anyway, it might not be cost effective to pull the $200,000 from that project. It might be better to complete the project now rather than have to come back at a later date. He suggested that the engineering division might look into what sort of an impact drawing away this money would create. Alderman Marr asked how the "staff recommended" minimum was determined. Steve Davis said the staff recommended minimum was determined by the need to have cash by March 2007 for the WSIP so we would be able to award contracts. Most of the items listed have readily available cash. The exception is the sewer system rehab project where some of the money will not be available until 2008-2009. The cutover expenses with the WSIP aren't programmed to start until 2008-2009 so that timing would work out well. The $1 million on the list for Hwy. 265 is part of the current appropriated budget and we have the cash readily available that could be used on the WSIP if we need to. Gary Dumas said the $1 million from the Hwy. 265 project connects to what will be discussed at the upcoming street bond program portion of this meeting. If we do the bond program as being discussed, consolidated with the WSIP sales tax. then this $1 million could be freed up. If we don't do the bond program, the $1 million will be required for the Hwy. 265 project. This is the only instance where the use of funds listed as possible funding for the WSIP is contingent upon the bond program passing. Steve Davis asked Dennis Hunt of the Stephens Group to review some of the information handed out to the Committee. Dennis Hunt said the analysis and the plan of finance assumes that there is voter approval to renew the /4 cent sales tax that was previously in place and continue the'/4 cent sales tax to fund $38,300,000 in wastewater system improvements and $62 million in street improvements. He said the feasibility of looking at the wastewater system improvements hinges greatly on the fact that the street improvement amount has been reduced to a more manageable level. He walked through the assumptions, which are: - there will be a 4% annual growth rate in the sales tax, which is consistent with the information given at the March 6 meeting. - that the assumed interest rate associated with these debt issuances is 4.70% - we will have interest only with mandatory redemptions until the 3/4 cent sales tax pays off the current wastewater project, which is anticipated to be Oct. 1, 2013. - we begin principle amortization, outside of the principle that's being amortized with the mandatory redemptions, on Sept. 1, 2014. - the total project amount, adding the $62 million and the $38,300,000 would be $100,300,000. We would envision asking the voters to approve the combined total of 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Joint Water & Sewer & Street Meeting Minutes June 5, 2006 Page 3 of 9 those two amounts, approximately $110 million. That's primarily related to establishing debt service reserve funds that are associated with these issues He said they have looked at the previous twelve months of sales tax revenues and the '/4 cent for the previous twelve months and they believe that $3,925,000 is a very realistic estimate. That would grow at 4% per year and when the 3/4 cent is released you are looking at approximately $21,500,000 per year. He would propose that the City issue three series of bonds: $40 million in 2006; an additional $40 million in 2009; and $20,300,000 in 2012. He said they would structure all the issues with the same 20 year maturity and the anticipated payoff for all three of the issues would be in 2018. The key to this analysis is that we are attempting to do wastewater system improvements that have a fairly urgent cash flow demand and we also want to accomplish certain transportation improvements. He reviewed the project funding needs associated with wastewater and transportation and options for meeting those needs through sales tax proceeds or short term bridge loans between bond issuances. He said there would be two separate questions for the voters to approve: for the wastewater project and for the transportation program. They could vote up or down on either one. Alderman Ferrell asked why it was not being recommended to use sale of the remaining property where the fire station is going to be built for the WSIP. Steve Davis said there is still a lot of uncertainty about what the City Council wants to do with the rest of that property. The bond issue for Fire Station 3 and Fire Station 5 is on the City Council agenda for June 6, 2006. Fire Station 3 only takes up a portion of the property on Huntsville Ave. There has not yet been a consensus on what the Council wants to do with the rest of that property. In response to a question from Alderman Cook, Steve Davis said there is one line ($6 million) that runs from Razorback Road to Happy Hollow Lift Station that could be deferred. The line will need to be built at some point in the future but does not have to be done right now. The line that that is absolutely necessary is the line ($14 million) from Happy Hollow to Paul Noland Plant. In response to a further question from Alderman Cook, Dennis Hunt said removing the $6 million from the equation would reduce the payback by roughly 90 days. Steve Davis said that leaving the $6 million pipeline in the project would complete the WSIP. Alderman Cook said he understands and he advocates that. Alderman Ferrell thanked staff and Stephens for coming up with the numbers. He said he is a strong opponent of raising water and sewer rates for the residents. Steve Davis said the sooner the Council calls the election the better. Even if it is added to the June 6 agenda, the soonest the election could be held is probably Sept. 12. There is a possibility that it might be held on the 2nd Tuesday in August but that is a very short time period. Alderman Cook asked if any of the options outlined would negatively impact any of the street projects, such as Hwy. 265. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Joint Water & Sewer & Street Meeting Minutes June 5, 2006 Page 4 of 9 Gary Dumas said that the street bond program had $6.5 million in it for Hwy 265. The million dollars would have to be added to the bond program. It would reduce the right-of-way acquisition/cost sharing from $10 million to $9.3 million. Of all the options available, keeping both of the programs alive and moving, he thinks this is about as good as it can get. Alderman Marr asked if both issues are written up the way they are presented today, in terms of the numbers of the bond issue and what citizens would be voting for, and the citizens vote for the wastewater plant and against the street bond program, how would we handle the $1 million that wastewater had taken from the Hwy. 265 program? Can language be written that would adjust the right-of-way acquisition money? Gary Dumas said if the bond issue for transportation failed, then we would be $1 million short in the CIP for Hwy. 265. We would have to make it up in 2007, 08, or 09. It would go to the WSIP. Steve Davis said other choices for making up that shortfall would be higher collections of sales tax, looking in the CIP for other projects to eliminate or using street fund money. In response to a question from Alderman Cook, Steve Davis said there will be one ballot on this special election, with at least two, and probably three, questions. We would probably want a separate question regarding issuing sales tax bonds to pay off the bond anticipation notes that will be initially issued in the water & fund. The bond anticipation notes supported by water & sewer revenues would be interest -only notes. Alderman Marr said there had been earlier discussion about whether or not the transportation bond issue was one question or two questions — whether it would be roads and trails or the trails separate from the roads. He wondered if we have an answer to that yet. Ron Petrie said that City Attorney Kit Williams has told us that it should be two separate items. Dennis Hunt said it is not uncommon for communities to have four or more issues on the ballot. He said it is an education process and the voters need to understand what is happening, but it is not uncommon. Alderman Marr said it concerns him to have so many points of educating the voter on one election. Alderman Reynolds asked how long it has taken the City to collect $2.5 million on the wastewater impact fee. Steve Davis said we started it around October 2004. Alderman Marr asked if Mr. Hunt feels fairly comfortable that we will be able to get assumed interest rate of 4.7%. Dennis Hunt said it is as fair a number as you can come up with. However, we are talking about a long period of time. He said to keep in mind that every one of these issues becomes shorter and shorter in maturity. They are all 2026 which helps further. But there is no guarantee. He said the worst case scenario is that the City would have to go back to the voters at some point in the 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Joint Water & Sewer & Street Meeting Minutes June 5, 2006 Page 5 of 9 future and say we don't want to change anything, but we need to approve this again in order to get the usury cap taken care of He feels fairly comfortable on the percentage for two or three years, but after that he doesn't know. It's a good number right now. Alderman Cook said he assumes the transportation part would be funded in the open market and the water and sewer funded potentially through the revolving loan fund. Dennis Hunt said that yes, they have looked at that as well. That would further reduce the average interest rate, assuming that the revolving loan fund retains its current rate. Steve Davis said because the payoffs are structured so quickly, we would probably qualify for the 3% rate on the revolving loan. In response to a question from Alderman Cook, Steve Davis said the next step in this process would be for the Committee to refer the question to the full Council for debate. He said if that is the direction the Committee wants to go, staff will prepare the agenda item and the ordinance. Ron Petrie said that discussion of the transportation bond issue is also on this agenda in order to make sure the Committee agrees on the dollar amount. At that point, a decision can be made on the financing package. At this point, Alderman Cook, Chairman of the Water & Sewer Committee turned the meeting over to Alderman Jordan, Chairman of the Street Committee. 3. Discussion of comments received from the May 22, 2006 proposed street program public presentation Alderman Jordan opened the floor up for public comment on the proposed street program. He asked that comments be kept brief and courteous. Lynn Lorimer said he lives on Hwy. 265. He attended a meeting held in Springdale to review some of the transportation changes that need to be done in Fayetteville. One of his concerns is the plan to make Hwy. 265 up to 110 feet wide. This includes two lanes, an 18 ft. wide median, bikes lanes on both sides, greenspace and sidewalks. The medians are a concern because it would cause a hardship for those living along the highway to turn into their driveways and prevent them from turning left out of their driveways. He also expressed concern about the maintenance that will be required for all the trees to be planted along five miles of median. He believes the trees and the curbing create a driving hazard and didn't think bike lanes were appropriate for Hwy. 265. Jeff Erf said he understood that the City had already made the commitment to go ahead with the Hwy. 265 project whether or not there is a bond issue passed. Alderman Jordan said that was also his understanding. Alderman Marr said he believed the discussion on Hwy. 265 is now the current design and the price of that design in the bond issue. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Joint Water & Sewer & Street Meeting Minutes June 5, 2006 Page 6 of 9 Jeff Erf also asked if the Committee had any idea what the interest would be on a $100 million bond issue. Dennis Hunt said it would depend on when the bonds are issued and how quickly the mandatory redemptions occur. He said he would be happy to calculate it for Mr. Erf. Monte Schneider said he also lives on Hwy. 265. He said his main issue is being unable to turn left out of his driveway with the proposed plan. He is not in favor of a bike path and believes it would be unsafe to ride a bike along Hwy. 265. There being no further public comment Alderman Jordan brought the discussion back to the Street Committee. Alderman Jordan asked if the Hwy. 265 design is a State or City design. Ron Petrie said there is no official design yet. There have been two public meetings held by the State and they have shown some options. At this time they are completing the environmental studies and then there will be another series of public meetings setting the official design by the State. It is the State's project and the State's design. The latest information the City has is that they hope to have the draft environmental assessment in house by June 15 and additional public hearings could be held any time from the end of August to mid-September. In response to a question from Alderman Marr, Ron Petrie said the State had shown a design at the last environmental meeting that had a proposed median. Chris Brown said there are places where a median is appropriate and places where it is not appropriate. As the State goes through the design process, those sorts of things will come out and the actual locations for the medians will be established. Alderman Reynolds said it seems to him that if we build the highway to the north just like the south end and put in five lanes with sidewalks and do away with the median and bike paths, we would probably save a million and a half dollars. Ron Petrie, addressing the cost of the project, said the City has an obligation, by resolution, to pay 50% of the cost up to $7.7 million. These estimates were done by the State three or four years ago. He believes the actual cost will be considerably more than their estimate and that no matter what the project involves, we are going to reach that $7.7 million. He doesn't believe any changes in the project will make any difference on the cost to the City. Alderman Ferrell said he talked to the AHTD district engineer who told him that the reason for the design of Hwy. 265 was because it had been requested by Fayetteville administration. He said the public comment about the median and bike lanes were well taken. Ron Petrie said he wanted to remind the Committee that the City Council has adopted a master street plan that set cross sections for a principal arterial street (which Hwy. 265 is labeled) that include a 20 -foot median boulevard street. If city administration did make the request for such a street to AHTD, they were following City Council direction. He said he was not involved in any discussion with AHTD about this. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Joint Water & Sewer & Street Meeting Minutes June 5, 2006 Page 7 of 9 Tim Conklin said that the master street plan does classify all arterial streets as principal or minor. The median or boulevard does have benefits for pedestrian safety, capacity and vehicle safety. There are benefits to reducing turning movements on major roadways and also benefits with regard to looking at vehicle safety and pedestrian safety. There are costs associated with not having a boulevard or median with regards to calls for service and vehicle and pedestrian crash rates. Alderman Marr asked what other roads in Fayetteville are classified as a principal arterial. Tim Conklin said we have reclassified Rupple Road as a principal arterial. Others he mentioned are Joyce Boulevard, Howard Nickle, Hwy. 265, and Huntsville Ave. Alderman Ferrell said he believes Hwy. 265 needs to be widened, regardless of how it happens. He thinks the utility of the widening comes from having a turn lane and curb and gutter. Alderman Jordan said the design has not been finalized yet and he hates to hold anything up. Alderman Reynolds said the median on the west side of Joyce Blvd. was put in before development began there so the people knew what they were getting. But this is an established neighborhood and a median will lock them in so they can't have movement. Alderman Marr said this is a great reason why you should have connectivity. If we did, you would have more than one way out of your neighborhood. He also believes that, when you have a requirement that a street cross section be built in a certain way, it is normal that that would be what you would forward to the State when they are bringing a road through. At the same time, his common sense would say that if the road to the south doesn't have a median and the road to the north doesn't have a median, it might be good to think about making sure the middle section fits in with the ends. This is a State project and that's where the public and the neighbors need to get involved in their design process. 4. Recommendation of the Joint Street Committee/Water and Sewer Committee to the City Council concerning funding options for the Street Bond Program and the continued implementation of the WSIP. Alderman Cook said the question is whether we agree with the list and whether the $62 million is the number to bring forward. He said there is no question that every project on the list is a good project. Regarding bike lanes he said the State changed their minds about the cross section of roads with bike lanes because of public participation and comment. On the new widening of Hwy. 62 toward Farmington they are adding bike lanes and sidewalks, which is different than they have done in the past and it is because people had asked them to change the way they design roads. He said bikes have the exact same rights on roads as vehicles do. Alderman Lucas said the Committee is talking about money today and the resolution that the Council passed is a commitment, there is no way to get out of it. She does believe that Hwy. 265 should be widened. She thinks the discussion of boulevard vs. no boulevard can be made at the time the road is designed. She doesn't think that will affect the bond issue. She said she likes boulevards but since the south part of Hwy. 265 doesn't have a boulevard, she wondered if a traffic hazard might be created with a boulevard in this section. She thinks it will just need to be studied. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Joint Water & Sewer & Street Meeting Minutes June 5, 2006 Page 8 of 9 Alderman Marr asked if a motion was needed. He said he believes the Committee needs to move forward with the $62 million and list of projects. Alderman Jordan said he knows that Hwy. 265 may be a little bit of a source of contention right now but that can be ironed out later in the design with the State and the people. The City is already committed with over $7 million so we are in. He said we have talked about the bond issue for a long time and the bottom line is now the people are going to have to make the decision. If we don't get it before the people, a decision will never be made. He feels the time to put it before the people is right now. The problem of how many questions are on the ballot will have to be worked out. There is no perfect solution and he believes the matter should be brought forward and sent on to the Council. Alderman Reynolds said he agrees. He is in favor of the phase one list and he is ready to take the issue before the people. Alderman Marr said we will also find out how good our citizen survey is because streets have been the number one item of concern every year we've done the survey. Alderman Jordan said if the citizens decide they don't want the bond issue, we'll take whatever we have and work with it. Alderman Marr moved that the Street Committee move the street bond issue forward to the City Council. Alderman Reynolds seconded the motion and it passed unanimously. Alderman Jordan moved that the Water & Sewer Committee move the bond issue forward to the City Council. Alderman Reynolds seconded the motion and it passed unanimously. In response to a question from Alderman Cook, Steve Davis said if you put this issue on the June 20 agenda, by State law you have to have the election within 120 days. He said that is certainly doable. 5. Adjourn Water & Sewer Committee Meeting The Water & Sewer Committee portion of the joint meeting was completed and Alderman Cook adjourned the meeting. 6. Discussion of the Street Impact Fees as prepared by Duncan & Associates Tim Conklin said Jim Duncan of Duncan & Associates presented the Street Impact Fee study that was dated October 2005 at an earlier meeting. At that time the Street Committee asked Duncan & Associates to go back and take the updated numbers and figures for the proposed bond program and recalculate the fees. They have done that and it really did not change the fees much. It actually reduced them slightly. For a single family equivalent it would be $3,409 without right-of-way. With right-of-way, it would be $3,722. The May 2006 study is based on what it costs to produce a lane mile of road. He has placed an item for the adoption of this study on the June 20 agenda. The ordinance will have to be drafted by the City Attorney's office. The City Council will have to make several decisions, including whether or not to include right-of- way and whether to adopt the impact fee by ordinance or refer it to the voters. The estimated 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Joint Water & Sewer & Street Meeting Minutes June 5, 2006 Page 9 of 9 potential annual revenue without right-of-way is around $4 million; with right-of-way it is about $4.5 million. In response to a question from Alderman Jordan, Tim Conklin said when the ordinance comes before the City Council on June 20, a decision will have to be made on whether or not to give developers credit for right-of-way. With regard to what condition the road should be in when you develop a piece of property to provide access to your subdivision, staff believes a local street standard should be the minimum requirement and that the developer should pay for that. Charlie Sloan expressed his concerns about asking a developer to pay to help build the major roads such as Rupple Road, particularly when the subdivisions have limited access to that road. Alderman Marr said we have talked about this for a long time. The methodology has been approved and the Committee has talked about the dollar amount. He thinks this is ready to go to the Council for debate. Alderman Reynolds moved that the impact fee methodology be approved and that the issue be forwarded to the City Council for debate of the impact fee. Alderman Marr seconded the motion and it passed unanimously. 7. Scheduling of the next Street Committee Meeting No Street Committee meeting was scheduled at this time. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org