HomeMy WebLinkAbout2007-12-11 - MinutesCity Council Water & Sewer Meeting Minutes
December 11, 2007
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Member Aldermen
Mayor Dan Coady Ward 1 Position 1 — Adella Gray
V10
Ward 2 Position l - Kyle rt Cook
CityAttorney Kit Williams � 1 Ward 3 Position 2—Robert Ferrell
Ward 4 Position 2 - Lioneld Jordan
City Clerk Sondra Smith ARKANSAS
City of Fayetteville Arkansas
City Council Water & Sewer Committee
Meeting Minutes
December 11, 2007
A meeting of the Fayetteville City Council Water & Sewer Committee was held on December
11, 2007 at 5:15 p.m. in Room 326 of the City Administration Building located at 113 West
Mountain Street, Fayetteville, Arkansas.
MEMBERS PRESENT: Alderman Kyle Cook, Chair; Alderman Lioneld Jordan;
Alderman Robert Ferrell
MEMBERS ABSENT: Alderwoman Adella Gray
STAFF PRESENT: David Jurgens; Gary Dumas; Ron Petrie; Paul Becker
OTHERS PRESENT: Stephen Davis, Davis Business Planning (representing Elkins)
Alderman Cook called the meeting to order.
1. Approve Minutes
Alderman Jordan moved that the minutes of the November 15, 2007 Water & Sewer
Committee meetings be approved as distributer. Alderman Ferrell seconded the motion and it
passed unanimously.
2. WSIP Update
David Jurgens said the pipe is installed on all of the primary system of line work going to the
West Plant. That includes WL -1, WL -2, WL -3, WL -4 and WL -5. All the piping needed to make
the plant operate is in the ground. We still have some testing and cleanup to do. He said the West
Plant project is proceeding very well. The expectation at this point is we will have water going
into the plant in May. Most likely the first effluent produced will be coming out in June. We will
be at substantial completion in May. The Noland plant and east line work is happening. We do
have two easements that have not been acquired yet on EL -2 (the 42 -inch pipeline from Happy
Hollow to the plant.). One of those is where a house was built on top of the easement and it is a
matter of getting all the documents straight between the two sets of attorneys. There shouldn't be
any problem. We just have to make sure all the documents are straight and all the is are dotted
and is are crossed. The other easement is related to a development with Flying Monkey LLC.
The development name is West Fork Place. They show the permanent easement on their
subdivision plat but because of the slow down they have not proceeded any further with the
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proposed subdivision. We have gone back to them to have them sign the easement and they are
dragging their feet. It could be that we have to condemn the property just because they are being
so slow.
Alderman Ferrell asked for the total that was budgeted for easement acquisitions.
David Jurgens said the best number he can remember is about $1.7 million. He said that is
going to be pretty close to what we spend. He said he doesn't know what was budgeted four
years ago but this is the number as of when we first put the rainbow sheet together about
eighteen months ago. He said if the subdivision owner he was speaking about earlier doesn't
sign the easement, he will bring that one in for condemnation. He said again that the easement is
shown on their subdivision plat but that is not a legal document that gives us a right to work on
the property.
a. WL -6 Change Order
David Jurgens presented the WL -6 change order #3 in the agenda packet. The change order is
for $31,663. This covers minor adjustments, some of which were discussed at the last Water &
Sewer Committee meeting. We now have firm costs on these items. This is the smaller of the
two change orders discussed. The other one was for the Channel Monster (bar screen grinder)
and Mr. Jurgens said he is still reviewing the specifications on that item.
Alderman Cook asked when we will see that change order.
David Jurgens said we are planning on two ways of doing this. He said there is a 120 -day
delivery time on the Channel Monster so we are going out for bids for the City to buy just that.
At the same time the engineers are doing the design on the concrete vault that it has to be put
into. Once the design is complete we will do the change order with the contractor. So while we
are going through that paperwork and taking that change order to the Council, we will
simultaneously be receiving bids on the hardware itself so we can order it about a month earlier.
He said he believes we will be seeing the change order at the 2nd Council meeting in January, or
even possibly at the 1't meeting in January.
b. WSIP Farmington Area Work
David Jurgens said the RFL loan closing is scheduled for December 21.
Steve Davis said the loan documents have all been signed and we are now just waiting on the
State's calendar.
David Jurgens said the first bids have already advertised on the two pipelines and bid opening
is scheduled for January 8, 2008.
C. WSIP Easement Update
This item was discussed earlier during the WSIP Update discussion.
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d. Contract Legal Review — West Plant Construction Contract.
David Jurgens said the Selection Committee selected Williams & Anderson PLC for this
contract. We have started the contract negotiations and that item will come forward at the next
Committee meeting. He said we have not talked price yet.
Alderman Cook asked what that schedule is.
David Jurgens said it will be a fairly short work item. The idea is to review the contract, tell us
exactly how to handle change orders. He said he doesn't think it will take more than a couple of
weeks to review.
Alderman Cook said they are basically going to review what we have been doing and verify that
we are doing it properly, protecting our interests. They won't be involved in anything during the
close out process. We are going to learn from them and carry that forward.
David Jurgens said that is what we are anticipating.
Alderman Ferrell asked who the Council member on this selection committee was.
David Jurgens said it was Robert Rhoads. He said Mr. Rhoads participated in some of the
meetings but not in all of them.
Paul Becker said Mr. Rhoads was not there for the final selection but he was aware of the firm
that was selected. He said this particular firm had a lot of very direct experience in this type of
process.
e. WSIP Construction Schedule & Cost Update
David Jurgens distributed the updated Rainbow Sheet. He said there weren't many changes. He
said we are working on all the preparation to put this whole new system into functional operation
and ironing out all the details of the scope of work on the final parts of the project. He said the
key dollar amounts remain unchanged. The Fayetteville area project total is still $178,595. The
grand total is $186,090,684. The net Fayetteville cost, including the West Fayetteville/
Farmington area is $180,683,701. Those numbers have not changed. When we go out to bid for
the Farmington work, there will be some tweaks to those numbers because the Farmington part is
an estimate.
In answer to a question from Alderman Ferrell, David Jurgens said when we first put this
sheet together the grand total for the Fayetteville portion was $178,595. The grand total for the
whole thing was $183,320. In looking at the work, Farmington opted to do some redesign,
lengthening the time that the Farmington construction would last. They took it out to a 2030 time
frame, which caused the pipes in the lift stations to be a little larger and that increased the
Farmington portion of the cost and therefore increased the Fayetteville proportional share of that
cost. The Fayetteville portion is the same but total project cost went up some.
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3. Sanitary Sewer Rehabilitation Project Update
a. Farmington Area
David Jurgens said the Farmington work is nearing completion. It should all be done this month
though this week's weather might slow it down a little.
b. Basin 15 and minisystems 2, 5, 6, and 13A manhole rehabilitation
David Jurgens said the manhole rehabilitation was bid earlier this week. Bids came in too high.
The engineer's estimate was $1.1 million and the bids came in at $1.5 million. This was a little
bit of a surprise. We are getting back with the contractors to see what is up. We did have two
bids which were pretty consistent — one was $1.5 million and one was $1.6 million. Both are
from good contractors who have done work for us over the years so we are trying to figure out
what the differences are. We're changing the specs some and trying to bring down the amount
and get it back into the ballpark. We also want to establish if we just have an estimate that was
lower than it should have been. We will be opening bids again in about five weeks with the
modified specifications.
4. 36" Water Line Improvements
David Jurgens said there is a misstatement on the agenda for this item. The agenda item states
that work at Hwy 412 is underway and should be complete this month but that is not correct. He
said work at Hwy 412 is underway but because of the timing of how long it takes to put the
hardware in the ground and because of the need to only shut off one transmission line at a time,
we are allowing some extra time and the work will probably be completed sometime in March.
He said he sent a proposed timeline for shutting down the 36" line and then the 42" inch line to
Beaver Water District yesterday.
Alderman Ferrell said a citizen asked him where the intersection of these lines is in relation to
Hwy 265.
David Jurgens said the 36" waterline and the 42" water line come in to the City side by side.
Then at about 150 yards east of the Hwy 265 and Joyce Blvd. intersection they split. The new
36" line crosses Hwy 265 and runs along the north side of Joyce Blvd. and goes west and then
south from there. The older line actually comes across south of that intersection by about 50
yards or so and then goes diagonally across Hwy 265 and follows Coy Kaylor Road into that
apartment complex and goes right by Mud Creek. From there it cuts across Par and Birdie Streets
and through Sweet Briar Park.
In answer to a further question from Alderman Ferrell, David Jurgens said for the Hwy 265
job we would actually link right there at Joyce. We want to make sure the linkage is such that we
are not relying solely on the old line. The recommendation is to come all the way to Township
with the 36" line and further south to Hwy 45 with the 24" line to link to the existing 24" line
that is now parallel to Crossover Rd.
Alderman Ferrell asked if right-of-way acquisition will be necessary other than where it crosses
at Joyce and Hwy 265.
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David Jurgens said we will have to have right-of-way acquisition no matter what because we
have an existing 12" water line there now that will almost certainly have to be relocated. So
instead of the 12" line we are going to put in a 36" line and put in some distribution lines off of
that.
Alderman Ferrell asked if this has anything to do with Hwy 265.
David Jurgens said the 12" relocation does have to do with Hwy 265 and because we are going
to have to put a line in anyway, this would be the right time to go ahead and put in the larger line.
Alderman Ferrell asked if it would only be at Joyce and Hwy 265.
David Jurgens said it would be from there all the way south along the entire highway widening
to Hwy 45.
Ron Petrie said we will remove the 12" line along this route and replace it with 36" line.
Alderman Ferrell asked if we are in the existing right-of-way with the 12" line.
David Jurgens said he thinks we are in existing easement outside of the right-of-way.
Ron Petrie said we should be reimbursed for the cost of the 12" relocation.
David Jurgens said we will receive a partial payment for the replacement we are doing.
5. Noland WWTP Clarifier Replacement
David Jurgens said we ran in to a law we had not been aware of until the last year. This law
requires that any public works construction project over $20,000 has to be stamped by an
engineer. We had not planned on doing engineering plans and specifications for this project.
OMI was simply going to supervise the construction based off an actual specification. He said he
doesn't want to have to spend money on an engineer for this, at least no more than is absolutely
essential. He is proposing that we take the clarifier project and merge it in with the East Plant job
(the EP -3 which can't be done until after the West Plant is on line). We can supplement the
WSIP money with the money that is already allocated for the clarifier (keeping the funds
separate by using separate line items). He said the advantage is that we already have an engineer
on board for this work and a lot of the electrical specifications that have to be done are already
done because they are in the EP -3 project anyway. He thinks we can significantly reduce the
engineering costs on this project by merging the two together. It is simply adding a subset to the
East Plant job as part of the WSIP but keeping it as a separate line item so the construction
funding can remain pure. Each would be paid for out of its rightful pot. This way we would do
the two clarifiers this year. It would also give us the signed and stamped plans and specs for
doing the future clarifiers.
Alderman Ferrell asked if this will help us keep from spending money out of our non -bond CIP
fund.
David Jurgens said that is not what we are proposing. He said it will save some money out of
the CIP Water & Sewer project, not CIP sales tax.
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Alderman Ferrell said that will help us down the road. He wondered if it would be a significant
amount of money.
David Jurgens said it would probably be less than $10,000.
6. HDR Water/Sewer Rate Study Addendum 1
David Jurgens said this was on the agenda earlier. The addendum is for $9300 which is less
than he expected. Mr. Jurgens said he got an e-mail from Tom Gould during the agenda session
and Mr. Gould said he would have the information out tomorrow afternoon or Thursday
morning. As soon as Mr. Jurgens gets it he will e-mail it to the Committee. He will also put
paper copies into the Committee's boxes. He said he is now requesting that this addendum
remain on the agenda for the Council meeting.
7. Outside City Customer Refund Final Report
David Jurgens said this is just a reporting item. He said the deadline for requesting these
refunds was September 30, 2007. They have all now been processed. He said he didn't get the
number of requests that were processed but the total amount was $420,587.04. He said he
believed $650,000 was budgeted.
8. Decentralized Sewer Administration Agreement with Washington County
David Jurgens said we have annexed in one decentralized sewer and we recognize that we could
well annex in more. We need to have a mechanism in place for administration of those
decentralized sewer systems. The County has one because they are required to have that
oversight in place when they approve the subdivisions. They have one full time staff position that
is funded by the revenues they receive from these sewer systems. What has been presented to
this Committee is essentially an agreement whereby we let the County continue to do the
administration. We won't do any billing and the County will continue to administer directly with
the POA or responsible management entity of the subdivision. Functionally there is nothing for
the City to do relating to these systems. We also won't make any money off of it. He said the
bigger risk is that we will annex one in, forget to get the bonds and have it fail. He said the
potential for failure is a lot higher if we keep it. Since the bonds are originally done to the
County when the development goes through, the bonds remain in place. Staff sees this as a way
to prevent us from making mistakes on anomalies.
Paul Becker said this is good for us because it takes the liability off the City.
Alderman Cook said the agreement mentions a $2 fee and if that becomes insufficient, the City
would have to pay its share and would then pass it on to households. He wondered what the
process would be for this. Would that be a City Council action against those households that fall
under this?
David Jurgens said it would probably a City Council action. However, the County bills directly
and they are the ones who set the fee. They would continue to deal directly with the owner and if
that fee has to go up because the County's costs are going up, it would probably be completely
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invisible to us. He said Kit Williams put this language in (with the County's attorney) so we have
the ability to have costs if it starts costing us money
Alderman Ferrell asked if the County is the RME (responsible managing entity).
David Jurgens said that would be the POA or whatever organization similar to a POA that
subdivision has.
In response to a question from Alderman Ferrell, David Jurgens said the County is currently
billing these customers and they will continue billing the customers. But the customer is not the
individual homeowner. The customer is the POA. The POA will in turn collect it from the
homeowners.
Alderman Ferrell read from the agreement that "the County shall be entitled to a $2 monthly
fee per customer with community sewer system for the proportional administrative costs as
described below including but not limited to salaries and fringe benefits for any staff retained to
assist in administering the County ordinance and regulations". He said if the bill to the citizens
goes from $2 to $3 a month, the residents inside the City limits are going to come screaming to
the City.
David Jurgens said that is pretty much what he has been saying all along about decentralized
sewer systems. He said he understands and agrees.
Alderman Ferrell said he thinks we need to take that into account in this language. He said he
doesn't think this language is very clear about what the City's control over this is. He said he is
all for the County continuing to bill and he believes the people should have to pay a fair charge.
But we can't have an arbitrary rate increase to cover fringe benefits and costs without some kind
of hammer.
Alderman Jordan said basically if we hooked up with the County and they set the regulation or
prices then there is nothing the City Council can do about it.
David Jurgens said the City Council has the authority to cancel this agreement.
Alderman Cook said it is the same problem we have had with the ambulance agreement. It's
circular because if the City cancels the agreement, we take the full responsibility.
Alderman Jordan agreed.
Gary Dumas said we might add to the agreement that they would have to establish their rates
based on some type of rate analysis, something internal since this is a fairly small population.
David Jurgens agreed and said if they spend $5000 on a rate analysis that might add $1 per
house because there are probably less than 5000 houses on these systems right now.
Alderman Ferrell said he thinks we would have to spell out who would determine that.
Alderman Cook said it is the Board which consists of the mayor, the County Judge and one
third party person.
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David Jurgens suggested language saying the rate would have to be approved by both the City
Council and the Quorum Court.
Alderman Jordan said he could agree to that.
David Jurgens said we will have to see how Kit Williams feels about it because he is the one
who developed the original language.
Paul Becker asked if it is the Committee's direction to follow up with changing the wording.
Alderman Cook said it is.
Gary Dumas clarified that the wording should include a rate analysis and approval by the City
Council.
Alderman Ferrell asked if the rate analysis would be paid for by the users.
David Jurgens said it would just be part of the County's administrative costs.
Alderman Cook said the agreement states (in SectionG) that any amendment to this agreement
has to be approved by the County and the City Council.
David Jurgens said maybe we don't need that wording change then.
Alderman Cook said he thinks the point is if the price goes up we have to have some sort of
proof.
Gary Dumas said we need something to justify the increase so we can respond to the citizens.
David Jurgens said we will go forward with the rate established by and approved by the City
Council.
Alderman Ferrell asked if where the agreement says, "this agreement may be amended from
time to time by the governing bodies of the parties" if the "governing body" is being interpreted
as the City Council.
Alderman Cook said he is so interpreting this.
Alderman Ferrell said he would like to have it spelled out more clearly. He would like for it to
say City Council and Quorum Court. That would make him feel a lot better.
Alderman Jordan said that sounds good.
Alderman Cook said it is the same thing but he doesn't have a problem with the change.
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Additional Item — Elkins Sewer Contract Amendment
David Jurgens passed out information regarding the City's contract with Elkins. He said our
sewer contract with Elkins specifies that we will bill them based on 85% of the metered water
volume until such time as there are three consecutive months in which the wastewater flow is
different from that by a certain percentage. At the first part of this year we ran into the situation
where that number was exceeded. Per the agreement, this required that we would go back and
look at the volumetric determination by which we would bill Elkins. Staff met with Elkins staff
about six or seven months ago and discussed how to bill. We have to make sure the billing
remains fair for both the Elkins and Fayetteville customers. What was discussed in the earlier
negotiation (Alderman Cook was the lead in this negotiation) was that we would not charge the
full sewer rate (including all the components of the rate) for volumes over 85% but we would
charge enough to ensure that we at least covered our costs, essentially eliminating two of the
components of cost. He said there are four basic components of cost: the cost of operations and
maintenance; the cost of the depreciation; the cost of the impact fee piece (which per the Elkins
contract is 25 cents) and the cost of the rate of return. He said we have to include the operations
and maintenance cost because that covers actual costs. He said the excess water that gets in
(infiltration and inflow) is an impact on capacity, which is what the impact fee is specifically
designed for so this amendment would keep that impact fee but remove the depreciation portion
and the rate of return, both of which are covered by the 85% of the water usage. This means
Elkins would pay the full rate, which is currently $2.81 for the 85% of water usage and then a
reduced rate for everything above that amount (which is the I & I). They would still pay for all
water that comes through the sewer meter. The contract says they would only pay for 85% of
what goes out of the water meter. So there is wastewater we've been treating for which we have
not been billing. He said we had planned to do this hand-in-hand with the rate study piece but
Elkins has requested that we settle the 2007 part so that they can get their books closed before
year end. We agree with that. Then for the future we would bring it forward as part of the rate
study.
Alderman Cook asked Steve Davis if he could speak for Elkins.
Steve Davis said he could in part.
Alderman Cook said his concern in the negotiations and the reason why that paragraph is
worded as it is is Elkins I & I issues. The discussion initially in the contract was that they would
do their due diligence and try to correct those I & I issues. They have done this some but that is
why we are seeing this fluctuation in the meter. He said he is willing to work with Elkins but at
the same time he wants to be assured that they are doing everything they can to take care of these
I & I issues.
Steve Davis said, as has been reported in the media, Elkins has had its share of internal issues
over the past several months. He said they had expected to be further along on a water and sewer
line improvement project than they are today. Part of the reason they are not further along
involves issues other than the water & sewer utility. Over the past 90 days the Elkins Water &
Sewer Committee has activated an ordinance that was passed a few years ago making them
independent of the city. They are now in the process of setting up their own bank accounts and
computer system and taking control of their own affairs. The next twelve to eighteen months will
be a transitional period for them and the Elkins mayor has committed to support Elkins going out
for a dedicated sales tax to fund a portion of the water & sewer improvements that are necessary.
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Some of those sewer improvements will probably specifically address some of the I & I issues
that Elkins has faced over the last several years which have contributed to this fluctuation in
flows we are discussing with this contract amendment. Mr. Davis said he was not a party to the
original discussion several months ago. Elkins asked him about a month ago to see if he could
begin discussions to get a resolution to this issue by the end of the year so Elkins can start 2008
off with as clean a record as they can have. Mr. Davis began by opening discussions with Mr.
Jurgens and they have now come to this point. Mr. Davis said that Elkins has not seen the
contract amendment and they haven't seen any of the potential units costs so for him to say they
are in agreement with either the contract amendment or any potential unit costs would be
inappropriate. However, he will be discussing both the contract amendment and the potential unit
cost with them Thursday night and would request that this item be carried over to the meeting of
this Committee scheduled for next week. He said it is Elkins' intention to actually write a check
for the overage if they can come to an agreement in principle on how it will be computed and the
volume rate.
Alderman Ferrell asked if this independent water and sewer commission is appointed or
elected.
Steve Davis said they are appointed by the Elkins City Council. He said he does not think they
have a specific term length. He said he believed the organizational structure was approved two
years ago and they just didn't choose to activate it until the last 90 days.
Alderman Ferrell asked if this change will have any impact on the model the City of
Fayetteville has chosen for charges.
Steve Davis said this change only addresses the stuff that is based on the $2.81 rate. And this is
only to solve the 2007 overage in volume. Another contract amendment is envisioned to address
the 2008 and forward overage and that will be at a different rate because it will be based on the
new cost -of -service study. He said he is trying to help Elkins close up their books and balance
the accounts between Elkins and Fayetteville as of the end of 2007.
David Jurgens said from the Fayetteville standpoint we want to do the same thing. Right now
we have wastewater that has been metered and the charges have been accumulating in our books
and we want to get this reconciled so we will have 2007 closed out.
Alderman Ferrell asked if we have any idea how much money we are talking about.
David Jurgens said we have not done the December meter reading for 2007 but the total
variance in consumption for the first eleven months is 8 million gallons out of a total actual
consumption of 50 million gallons. So the maximum amount at the $2.81 rate they are currently
paying for 85% of their water usage is $24,500. That is the full rate. What we would be looking
at is some reduction from that amount.
Alderman Cook said the bottom line to the Committee is whether we are willing to cut Elkins
some slack for 2007 to clean up this overage, making sure to cover the Fayetteville rate payers
costs.
Alderman Ferrell asked if there would be a promise for future rehab.
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Steve Davis said he thinks that Elkins understands that rehab is a necessity. They are working
through their system to be able to have a routine, ongoing rehab program for not only their sewer
lines but their water lines also.
Alderman Ferrell said if we are going to take this to the Council meeting he would like to see a
little description or formula for the benefit of the rate payers of Fayetteville.
David Jurgens said we will bring these numbers forward when we have that final number and
an agreement in principle from Elkins later this week.
9. Water/Sewer Committee Meetine
The next Water & Sewer Committee meetings were set for Wednesday, December 19, 2007 at
4:30 p.m. in Room 326 and for January 8, 2008 following the Council Agenda Session, also in
Room 326.
There being no further business, the meeting was adjourned.
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