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HomeMy WebLinkAbout2008-02-12 - MinutesCity Council Water & Sewer Meeting Minutes February 12, 2008 Page l of 12 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 February 12, 2008 A meeting of the Fayetteville City Council Water & Sewer Committee was held on February 12, 2008 at 6:00 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; Alderwoman Adella Gray STAFF PRESENT: David Jurgens; Gary Dumas; Paul Becker; Ron Petrie; Tim Conklin; Lori Johnson; John Coleman OTHERS PRESENT: Duyen Tran and Denise Georgiou, OMI; Stephen Davis, Davis Business Planning (representing Elkins & Farmington); Mike Johnson, U of A; Scott Turley, U of A; Bill Ramsey and Virgil Neuroth, Fayetteville Chamber of Commerce; Steve Rust, FEDC Alderman Cook called the meeting to order. 1. Approve Minutes Alderman Ferrell moved that the minutes of the January 8, 2008 and January 16, 2008 be approved as submitted Alderwoman Gray seconded the motion and it passed unanimously. Alderman Cook announced that the Committee would deviate from the published agenda and start with the discussion of the rate study. 2. Water & Sewer Rate Study Discussion (formerly Item 5 on the Agenda) Alderman Cook said HDR has sent the latest rate information based on the last discussion by this Committee. This included three tiers on the water side and a third option on the sewer side. He asked for any comments from the Committee regarding the new HDR information. Alderman Jordan asked if he was correct that the first 2000 gallons will be billed at $2.11 straight across the board for everybody. Paul Becker said that is the case for all residential customers. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes February 12, 2008 Page 2 of 12 Alderman Cook explained that the first tier is for use up to 2000 gallons, the second tier is for use of 2000 to 15,000 gallons and the third tier is 15,000 gallons and above. The rate goes from $2.11 per thousand to $3.98 per thousand in 2008. Paul Becker said that for the first 2000 gallons the City does not actually recoup the costs. We don't start recouping average costs until the usage increases because that is the way it is designed. He cautioned that this could cause a seasonal cash flow problem in the water and sewer fund but he feels that it can be monitored and we can deal with it. However, if usage goes down dramatically at one time in the year or if consumption patterns change radically, we might have to look at revisiting rates. Alderman Cook asked if that is possible in any year of the study. Paul Becker said that it is possible. He said we are talking about going out four years with these rates and he doesn't foresee any major impact in the first two years. He suspects if the rates aren't keeping up, we will see it in years three or four. Alderman Cook opened the floor for public comment. There was none. Alderman Cook suggested splitting the vote on the rates into a vote on the water side and a vote on the sewer side. He believes there is a pretty good consensus that we like what we see on the water side of the rates. Alderman Jordan moved that the water rates be approved and forwarded to the Council. Alderwoman Gray seconded the motion and passed unanimously. Alderman Cook said at the last meeting the Committee voted on Option 2 on the sewer side. Since then Option 3 has been added. Option 1 involved a 20% increase in rates in 2009 for industrial customers and Option 2 involved a 30% increase in 2009. Option 3 hits the middle ground for industrial customers with a 25% increase. He said the majority of our revenue comes from the residential side so any changes will have the greatest affect on the residential customers. Option 3 would make the residential rate go to 18% versus the 15% increase discussed at the last meeting. Alderwoman Gray asked for some idea of the dollar amount involved. Paul Becker said his estimate is that the difference between Option 1 and Option 2 for the average (6000 gallons of water and 5000 gallons sewer) residential customer would be about $1 a month. The difference between Option 1 and Option 3 is about twenty-three cents. Using Pinnacle Foods as an example of the industrial customer he said the difference between Option and Option 2 for them is approximately $8000 a month. Alderman Cook opened the floor for public comment Bill Ramsey said at a meeting last week, Pinnacle Foods said that they are going to take steps to reduce consumption in lieu of paying a higher bill. They are prepared to spend more capital money to do more pretreatment and reduce their usage. The statement was that they would not be paying more than they are paying now once they do that. He wondered how that might impact the situation. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes February 12, 2008 Page 3 of 12 David Jurgens said it will take awhile for them to do their capital improvements and we probably won't see an impact in the first year. However we will see more of an impact later on and we will be reevaluating rates in three years. If we see that changes in consumption are causing the revenue stream to not match what we are projecting, we may have to evaluate the rates sooner. Mike Johnson asked what percentage of water & sewer come from residential and non- residential as opposed to industrial. Paul Becker said he believes residential is between 60 and 70% of the total. Mike Johnson talked about the challenges of the University since they are categorized as residential and non-residential. Steve Rust said based on his discussions with Pinnacle Foods he believes they prefer Option 3. Alderman Cook said he believes every industrial customer likes Option 1 best but Option 3 is out there and the Pinnacle representative did mention that Option 3 is doable for them. David Jurgens said that Pinnacle Foods is the City's largest customer with approximately 1 million gallons of water purchased each day. Alderman Ferrell said if industry has to absorb the increase in cost, he assumes they will have to act as expeditiously as possible to make the capital investment to lower their consumption and sewer bills. They have to remain competitive. He believes it may not take three years for them to make changes. Also, he asked what carrots we have to offer industrial users to accomplish the two basic economic development principles we are trying to promote - retention and expansion of local industry and jobs and attraction of new industry and jobs. He asked that we are looking at those two things and remember that our industries are working in a very competitive environment. Alderman Cook said he does not argue with that but he hates to use water and sewer rates as an incentive. He said he wishes we had other options to help companies out but currently we don't have many. He said he adamantly supports cost -of -service. We are giving the major industrial users some break on that because cost -of -service takes into account that it is cheaper to service them as opposed to residential customers. He said he will support Option 2. He believes cost -of - service is the fairest way to justify the rates and it is legally defensible. The bottom tine is that the City has to collect its revenue and cover our bottom line. It will be a painful process to get there but we will get there. Alderman Jordan said we did a good thing tonight by voting on the reduced rate for first 2000 gallons of water usage. He believes that will catch most of the elderly people in the City and will help those on a fixed income. He said there has been a lot of discussion about whether it will hurt the City if customers cut back their water usage and sewer usage. He said we have come to a time that we are going to have to look at our water consumption and he believes a day will come when we will be glad we made decisions to promote the conservation of water. He said this was part of the discussion three years ago and he hopes adjustments have been made during that time. He said he had supported a flat rate but he will now support cost -of -service and Option 2. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes February 12, 2008 Page 4 of 12 Alderwoman Gray said she went with Option 2 last time but she has thought about it and doesn't feel good about it now. She is happy to see Option 3 and thinks it is a good compromise. Alderman Cook said he doesn't expect to get a consensus on this but for the record he just wants to know where everybody stands when we take this to the full Council. David Jurgens distributed a packet of information which included a potential timeline. He reviewed the information. He said we have discussed metering and billing all legitimate non- emergency water consumption but no firm decisions have been made. As an example he used the water used for flushing a newly constructed water line which he said is not currently metered and billed. He said he believes it should be metered and billed as a cost of that project and we have a mechanism to do that. He said though we should not meter and bill emergency water consumption he has talked to the fire chief about the water used in training firefighters or calibrating their equipment. This is also a cost of doing business and he doesn't feel the water utility should provide that water for free when it is measurable and billable. Alderman Ferrell said he wonders how this will help since it is simply a paper transfer of the cost to the different departments and there will be a cost associated with billing. He asked if it is true that we would not be paying the cost as a rate payer as part of the City utility. David Jurgens said last year about 20% of our water did not go through a meter and was not billed. So this would bring that percentage down and in the cost -of -service evaluation it means that more of the water is billed. Right now that 20% is overhead to every customer. This will take that 20% and apply it to those other customers who currently don't pay for it. Alderman Ferrell argued that the City won't actually pay for what it uses because it is part of the City. There will only be a paper charge to each department. Gary Dumas used the example of the Parks department irrigating a ball field. They would pay for the water. The money will go from their account to pay the bill. Paul Becker said it is a cash transfer. In the case of David's department, there wouldn't be a cash transfer. David Jurgens said a very tiny percentage of the 20% is water used by the City. We bill almost all the water used by the City. Some of it will be the fire department for training purposes but more of it is used by contractors working on the City's capital projects and also extending water lines for developments. Alderman Ferrell said he understands this and that we want to encourage the preservation of the water. But each City department is being allocated a cost on the amount of work they do and cross charged so there will be more of a charge billed to the City and that charge is going to be added to the total cost that the taxpayers will have to take care of at the end of the year. Paul Becker said that's not really the case. He said this usage is unidentifiable currently so it is being absorbed by the Water & Sewer division. What is being discussed is a mechanism to shift the cost to the identified classification. It will not raise the overall cost. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes February 12, 2008 Page 5 of 12 In response to a question from Alderman Cook, David Jurgens said the water will be billed at the rates for the highest user At a request from Alderman Jordan, David Jurgens explained again what he is requesting. He said if a water line is constructed, no matter who builds it, the water used to flush those lines is part of the function of building that water line and should be charged to that job, whether it is a development water line or a city water line. That water should not be given to that job for free. Right now 20% of the water that we buy from Beaver Water District does not go through a meter and is not charged to anybody. It is simply part of Water & Sewer's overhead. What we want to do is bring that 20% down. Steve Rust said that 80% of the customers are paying for 100% of the water. David Jurgens said that is correct. He said in the water business, a normal number for unmetered water is 15% but we were at 20% last year. Alderman Jordan said we are basically losing 20% of the water and the ratepayers pick that up. Alderman Cook said he agrees with bringing it down but would request that there be some sort of education out there. For instance, a construction business shouldn't have this thrown on them without giving them a chance to put the cost into their budget for that project. Paul Becker said that Mr. Jurgens' proposal is to recoup as much of that unmetered water as can be identified. We will not be able to identify all of it. David Jurgens said in the case of the fire department use, it is good for the employees who have access to the system to have the awareness that the water is not free. He said if we were to get the unmetered water down to 15%, we would be recouping about $4200 per day. Alderman Ferrell asked Gary Dumas if he could ever foresee a water rate reduction in Fayetteville even if we woke up tomorrow and had 95% efficiency in water metering. Gary Dumas said what we are doing is making the system more efficient. And while there may not be a rate reduction, we could delay or minimize increases. Alderman Ferrell said that is a reasonable nexus. Alderman Cook asked if the Committee, on the sewer rates, wants to move to the Council with two options or three. It was decided that all three options would be presented to the Council. David Jurgens reviewed the timeline being proposed. He said the timeline would put the rate ordinance taking affect on or about May 1, 2008, or thirty days after the approval. Alderman Cook said he had asked John Coleman, the City's sustainability coordinator, to talk about what other cities are doing with regard to providing programs for citizens to try to reduce the use of water. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes February 12, 2008 Page 6 of 12 John Coleman said in his research he found three programs that are widely used across the country. One is the Lifeline rate program which is focused on low-income families. There is also a low-income donation program where folks can donate by checking a box on their bill. The bill can specify an amount or the customer can write in an amount, or there could be a "round up to the nearest dollar" option. A non-profit organization would manage the funds received in these donations. This is the program Rogers has in place. The third program is a rebate program and is focused on all users, residential and commercial. Austin, Texas has such a program and their rate structure is similar to what is being discussed here. They provide rebates for low -flow toilets, energy star clothes washers, etc. He explained how they figure their rates and the rebates. He said if the Committee is interested in any one of these options, he can do more research to get more detailed information. Alderman Cook said the Committee has discussed the Lifeline rates as well as the second option which Rogers currently uses. John Coleman said that option is pretty common around the country though there would be costs associated with having a third party manage the funds. Alderman Cook said he is interested in the low -flow rebates program. He isn't sure how that would affect rates, staff time, etc. Alderman Jordan said he has done some research into this issue and he believes San Francisco started a pilot program where they provide a certain percentage of citizens with packages that include such things as low -flow shower heads, energy saving light bulbs, etc. They took the savings they saw with these customers and applied it to another percentage of the City the next year. It is sort of an educational program. Alderman Jordan and Alderwoman Gray expressed interest in more information about the rebate program. Alderman Ferrell said if we are working to be a sustainable community his concern is that it is done on a basis where it does not load more cost onto the customers. Paul Becker suggested that Mr. Coleman check with Kit Williams regarding any legal ramifications of any programs we might be interested in. Scott Turley commended the group for the work that has been done on this. He said he is pleased with the direction this is going. He encouraged the City to somehow engage Beaver Water District in trying to work with cities upstream in terms of conservation. The City is doing all the right things but our rates go up because other cities upstream are not. David Jurgens suggested that when Mr. Coleman has more details on conservation mechanisms that are out there and the incentives that are out there, we might ask Beaver Water District to come back to a meeting to discuss these possibilities. 3. WSIP Update 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes February 12, 2008 Page 7 of 12 David Jurgens said there are 109 days left before we start taking water into the West Side WWTP. A letter will go to ADEQ notifying them of our intent (to start discharging effluent from the West Side WWTP). a. WL -6 Change Order Number 4 David Jurgens said this is the change order for installation of the channel monster and an automatic actuator on a valve. He said this is time sensitive in relationship to the 109 days number discussed earlier. He said he would like to distribute this change order to the Committee by email and receive their comments but also put it on the Council agenda as soon as possible. Alderman Cook said Mr. Jurgens had mentioned before that there will be some smaller items that will come forward on the Council agenda that may not pass through this Committee. He said he wanted to make sure the rest of the Committee is okay with this. Alderman Ferrell questioned the dollar amount involved. David Jurgens said this change order will be around $200,000 to $250,000. He said it is not that he wouldn't pass items through the Committee but because he doesn't want to have Committee meetings every two weeks, he would like to be able to distribute the information to members for review and utilize email for comments or questions. If the Committee then believes a time needs to be scheduled to discuss the items that can be done. Alderman Cook said everyone will have the information before Council meetings but this would limit the number of committee meetings needed to go over each item. The Committee members agreed with this method of notification for these items. Gary Dumas asked if the channel monster is in place. David Jurgens said the channel monster is being constructed. This is the change order for the vault in which it must be housed. In answer to a question from Alderman Cook, David Jurgens said that the Gregg Avenue Lift Station is going well. He said he does not see any project that will not hit substantial completion on schedule. The biggest crunch on construction on the west side is the channel monster. Other than that the Hamestring Lift Station is virtually complete. b. WL -4 Change Order Number 3 David Jurgens said this is also something that has been discussed. This will have to go before the full Council for approval because we will be exceeding what the contingency was on the project. He said the contractor found more rock than was expected. The change order should be for less than $100,000. The information should be coming in soon. C. WSIP Farmington Area Work David Jurgens said there are two contracts going forward to the Council at the next meeting. These have been approved by the Farmington City Council. He said in order to reduce the 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes February 12, 2008 Page 8 of 12 construction costs, we broke the gravity lines in Farmington into two pieces — the lower section (which we will build now) and the upper section (which will be built later). He asked for a recommendation that the cost shares for WL -10, Farmington Gravity Line and WL -11, Farmington Force Main items be forwarded to the Council at the next meeting. Alderwoman Gray moved that these cost shares be forwarded to the full Council for approval. Alderman Ferrell seconded the motion and it passed unanimously. d. WSIP Easement Update David Jurgens said we are 100% complete on acquisition of easements for the Westside line work. We have one easement left on the ELI and EL2 pipeline work. He hopes to have the information he needs to go forward with the condemnation on this property very soon. e. Contract Legal Review — West Plant Construction Contract David Jurgens said we have the contract language resolved for this review and we are now identifying scope of work and estimating the total number of hours required for the contract review process. L WSIP Audit/Accounting racking Information David Jurgens said two staff members (Peggy Bell and Lynn Hyke) will be meeting with the Audit Committee on February 21 to discuss the audit process for this entire project. Alderman Ferrell said the Audit Committee has asked that we have an overall audit of the WSIP. He thinks it is good to bring staff in to update the Audit Committee. g. WSIP Construction Schedule & Cost Update David Jurgens said the rainbow sheet is a part of the information distributed to the Committee as a supplement to the agenda. 4. Sanitary Sewer Rehabilitation Project Update a. Farmington Area David Jurgens said the work in Farmington is done. He said Change Order #3 with T -G Excavating has come in and he believes we are at $30,000 under the contract amount. He said we ended up putting in or replacing more footage of pipe for a lower cost. He said Shannon Jones, water & wastewater engineer with the City was the project manager on this contract and he did an excellent job. This change order will come forward on the next agenda b. Basin 1-5 Change Order #3 David Jurgens said this contract is also coming in a little under the contract amount. The final contract cost has been reduced by $10,683.57. This is a close out change order. C. Basin 15 and minisystems 2, 5, 6, and 13A manhole rehabilitation 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes February 12, 2008 Page 9 of 12 David Jurgens apologized for not having a map. This is mostly in the southern part of town and the Hamestring Basin. He said we had three good competitive bids on this project and Kim Construction had the low bid. They have done quite a bit of work in town about six or seven years ago. He requested that this go forward to the full Council at the next meeting. Alderwoman Allen moved that this item be forwarded to the full Council for approval. Alderman Ferrell seconded the motion and it passed unanimously. 5. 36" Water Line Improvements David Jurgens said we are still working on this. We should be finishing it up in March. 6. Water/Sewer Committee Meetings The next Water & Sewer Committee meeting is scheduled for Tuesday, March ll, 2008 following the Council Agenda Session. AGENDA SUPPLEMENT 1. WSIP Update a.. West Side WWTP Furniture, Fixtures, and Equipment David Jurgens presented a chart of costs of furniture and equipment to be purchased for the new plant. He said the only item that needs approval by the Committee is the furniture. He reviewed the items needed such as lab and computer equipment. Regarding the lab equipment he said there are certain samples that have to be taken on site and processed there at that plant. We will not have a full lab at the Westside plant like we do at the Noland Plant. The majority of the compliance samples will be taken and processed at Noland. But some work has to be done on site and that is what this lab equipment is for. He said most of the cost for the Operational and Security video is provided for in the Brasfield contract. He said we are combining the two processes and functions of security cameras and operational cameras. The intent all along has been to have minimal staffing at the West side plant. If we can put in a security camera and not have a person on site it is more cost effective. Once the plant is operational and functioning smoothly, the intent is that it not be manned around the clock. Alderman Ferrell asked how many hours a day there will be people present at the plant. Duyan Tran said for normal operation once the plant is running smoothly staff should be there at least eight hours per day. Initially we will staff it twenty four/seven. David Jurgens brought the Committee's attention to the detailed list of furniture to be purchased for the plant. Alderman Ferrell spoke about the cost of the chairs on the list and said he thought the price was exorbitant. Alderman Cook asked Mr. Jurgens how the list was generated. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes February 12, 2008 Page 10 of 12 David Jurgens said staff worked with the Purchasing division and looked at the costs of industrial grade chairs that will be seeing use twenty-four hours a day for the first year. Alderwoman Gray said the chairs in the foyer won't be used twenty-four hours a day. David Jurgens said that is true but the operational chairs, which are the most expensive, will be seeing a lot of use. Most of the chairs selected did go through the vetting by Purchasing to accommodate the "buy green" resolution. In response to a question from Alderwoman Gray, David Jurgens said the operators went out and determined the needs. They then determined what type of furniture would fit. He said the furniture is comparable to what we have in other places in the City. He said we did try to match the chair with the usage and need. Alderman Cook asked if this was budgeted initially. David Jurgens said we have $200,000 in the budget for furniture, fixtures and equipment. Alderman Jordan said Alderman Ferrell brings up a good point. We just went through a budget process and cut in many areas. It is hard to explain to the public how you can make those cuts but yet spend $1000 for two chairs. He said he thinks we should do a little shopping around. David Jurgens said we can certainly relook and bring samples in for review. Alderman Ferrell said he isn't really interested in looking at chairs but is interested in staff coming back with a lower estimate. David Jurgens said he thinks there is value in looking at quality and durability. Alderwoman Gray agreed with that. Duyan Tran said she helped to put together the furniture list. She said there were three criteria that they used to make the choices. She said they determined when the prices were comparable they would select the green option. They also determined that durability would be a key. The third criterion was that in addition to looking nice, the furniture needed to also be workable for the operator. She talked about the value of buying good furniture now to avoid replacing it more often and the costs associated with that. Alderman Cook said we have a budget of $200,000 for furniture, fixtures and equipment and if staff can beat or hit that price, however they do it is their business. David Jurgens said he could promise that staff watches every penny on this project. He said they are trying to make sure we get the best value, which may or may not be the lowest cost. He said he is doing his absolute best not to waste a single penny but also to not compromise the quality of the end product. Alderman Ferrell said just because you have $200,000 budgeted does not mean you have to spend that much. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes February 12, 2008 Page 11 of 12 David Jurgens reminded the Committee that several contracts have come in under budget on this project. Alderwoman Gray said she does commend the staff for wanting furniture that lasts. She completely agrees with that. Alderman Cook suggested this item be passed on to the Council for approval. b. WSIP Construction Schedule & Cost Update David Jurgens said there have been some changes to the Rainbow Sheet since last time, mostly in the Farmington project. There is no change to the bottom line in terms of the total Fayetteville cost. However since we are now starting to award Farmington contracts and getting updated estimates on the rest of the project we are beginning to move contingencies around some. The total project contingency remains at around $10 million. Six million dollars of that is not linked to any specific line item. Alderman Ferrell asked for an update on the piece of equipment we were not paying for because the contractor couldn't fix the wiring. He said he believed this was at the Noland plant. David Jurgens said we had several issues with which we are still concerned at the Noland plant. He said the odor control has been working without failure for two and a half to three months but we are still holding some contingency back. He also mentioned that we still have an issue with the magnetic water meter for the influent water line. He is meeting with the engineer on this later in the week. He said the problem items are getting resolved. Mr. Jurgens continued to discuss the rainbow sheet and mentioned a $9,000 change order for EP -1. He said when the wet weather basin is done it will be the biggest environmental safeguard that we have. When we have a high rainfall event the resulting combination of wastewater and stormwater can be stored. Currently it flows out of the manholes and into creeks. In response to a question from Alderman Cook, David Jurgens said the basin being lined right now holds around 17.6 million gallons. 2. South Pass Park Development and Cost Share David Jurgens said when the pipe sizes were established for this development they were based on ultimate buildout, a significant storm event and City of Fayetteville city limits. South Pass increases our city limits by over 800 acres. He said in doing an evaluation of the project it was established that a portion of one of the lines on EL -3 needs to be increased by 6" to encompass everything that would be expected to come from this development. While it wasn't specifically covered in this agreement, South Pass has said they will pay 50% of that cost increase. It is estimated that this increase in pipe size will cost around $560,000. Alderman Ferrell asked if there is a timeframe on this. David Jurgens said he is looking at putting the EL -3 pipeline out to bid in May. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org City Council Water & Sewer Meeting Minutes February 12, 2008 Page 12 of 12 Alderman Ferrell said in the conditions of purchase made with South Pass it was stated that the property would have to be annexed, committed to zone and brought into the Fayetteville school district. He wondered if these things would have to be complete before we would start spending money out there. David Jurgens said in terms of this pipeline increase, the pipe is usable for half the city. So in terms of the WSIP, the expenditure there will not be wasted. He said because of the timeline on this project we would be looking at this part of the agreement taking place prior to all those other things happening and South Pass gave us a letter committing to this part of the cost share. Ron Petrie said we typically won't bring a cost share forward until after the project is approved. This is an 800 acre site and is a little different. He said it is possible to move the cost share up before the Council sees the development but he isn't sure that makes sense either. Gary Dumas said there are probably other cost shares South Pass will request in the larger development, but this piece is critical to meet the WSIP timeline and also benefits South Pass because it prevents them spending a substantial sum of money if the pipeline size is not increased and is not adequate to their needs. Tim Conklin informed the Committee that the WSIP land sale for 35 acres has not occurred. He said we are not sure when it will occur but he will update the Committee on this if anything changes. David Jurgens said on the financing side of this, we did not count this money as being available in the last bond issue for the WSIP. There being no further discussion, the meeting was adjourned. 113 West Mountain 72701 (479) 521-7700 (479) 575-8257 (Fax) accessfayetteville.org