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04142011CouncilMinutes-WS CITY OF AMMON CITY COUNCIL MINUTES – WORK SESSION THURSDAY, APRIL 14, 2011 AGENDA: CITY OF AMMON 2135 SOUTH AMMON ROAD CITY COUNCIL AGENDA – WORK SESSION THURSDAY, APRIL 14, 2011 – 4:30 P.M. DISCUSSION ITEMS: 1.Tom Kershaw Jan - June 1970 Past Mayor - Passing (Leslie) 2.User Rate Analysis (Ted Hendricks)* 3.Accrued Interest on Water and Sewer Loans (Ted Hendricks)* 4.Animal/Dog Cruelty Ordinance (Shawna/Ron/Animal Committee)* 5.Garbage Rates (Ray)* 6.Ferguson Waterworks Meter Options (Lance) 7.Misc. MINUTES City Officials Present: Mayor Steve Fuhriman Councilmember Dana Kirkham Councilmember Lee Bean Councilmember Brian Powell Councilmember Rex Thompson Councilmember Sean Coletti Councilmember Russell Slack City Clerk Leslie Folsom City Engineer Lance Bates City Planner Ron Folsom City Treasurer Jennifer Belfield City Officials Absent: None DISCUSSION ITEMS: Mayor Steve Fuhriman opened the meeting at 4:30 p.m. at 2135 South Ammon Road. Council discussed the budget. There were various items of coding corrections that Jennifer will be making on the budget. It was discussed that there are four primary payments for liquor apportionment with a bonus payment of any overage. Council discussed with Husk from Forsgren concerning the overages on the sewer project and their concerns with the amount going up. Husk stated that Shelley borrowed more per constituent, than Ammon. Councilmember Bean asked Lance what the rate is for processing our sewer lines and if they can do it cheaper than we can, why wouldn’t we hire them. He asked Lance to check and see what the amount would be. Jennifer advised the Council that the residential and commercial sanitation revenues and expenses are separated. Councilmember Slack said the building fund is showing a shortage and asked if the City has planned for this. Jennifer advised that would be Council’s decision. Council asked about certain line items going over budget. Jennifer said we look at the sections as a whole, so the proper areas are coded correctly. Discussion ensued if the budget will need to be opened up in the future and how it might not need to be opened, since we are currently living within the budget. Lance advised that he would like the Council to allow him to carry over certain amounts for the next year’s purchases. Council felt that overall things are looking good. 1. Tom Kershaw Jan - June 1970 Past Mayor - Passing (Leslie): Leslie stated out of respect for his position as a past Mayor with the City, she wanted to honor his passing in the minutes. Sergeant Karl Noah was introduced to the Council. Council Minutes – Work Session 4-14-11 Page 1 of 5 2. User Rate Analysis (Ted Hendricks)*: Rick Miller, Development Company of Rexburg went over the charts, with the different totals and interest rates on the funds, which have been borrowed. He stated that the monthly operation and maintenance are at $9.50 and $8.00 for the collection system operation for both Ammon and Shelley. Leslie said these reflect lower operation & maintenance (O&M) expenditures than Lance has said. Rick said if the City decides to go to a 30-year loan then the rate will change from 2% to 2 ¼%. Leslie asked if they are looking at raising the sewer rate that they do it at the same time as they change water rates in October. Councilmember Kirkham asked how you go to the people for $25 million when it was originally presented at $15 million. Husk Crowther said it was budgeted in 2002 with 3000 ERU’s and you now have 4600 ERU’s. Councilmember Kirkham said this isn’t true, since IBSD was there in the beginning. Leslie said the water project has come in on target. Discussion ensued concerning the short fall. Husk said the price per constituent came down. Councilmember Kirkham said we brought it down, but it probably shouldn’t have gone down. Lance said his $20 O&M including some capital reserve, which Forsgren has included in another area. Councilmember Powell said $8 per month at 4600 ERU’s is $36,800. Lance said Idaho Falls already has the manpower, trucks, etc. Councilmember Bean wants Ammon to look at contracting Idaho Falls for the sewer maintenance. Councilmember Powell said he took our numbers for six months from Feb 2010 to Aug 2010 and removed Idaho Falls flow charges and the actual costs were $41,000 per month. Lance said this was before new trucks and manpower needed when we go to EIRWWA. Husk said when the budget was originally set up he didn’t take into account the equipment the City would need to handle the sewage. He did look at nearby areas and they came to $7 per month. Councilmember Kirkham said Idaho Falls has economy of scale. Lance said there is allocation of $250,000 to general and IT. Councilmember Bean asked Lance if he could keep two people busy all the time with O&M on the sewer. Lance said yes. Mayor Fuhriman asked why we don’t have the Region handle it. Ray said the equipment to maintain a 36 inch line is different than the equipment to maintain12 inch lines. Councilmember Powell said we are currently paying $55,000 to Idaho Falls and $30,000 to the region, so what will be the savings from Idaho Falls. Lance said he is budgeting $100,000 for the year to pay Idaho Falls for maintaining the lines. Councilmember Powell asked how soon Segment C will be ready to go. Husk said Segment C is ready for bid and then it is a 3-4 month construction project possibly 6 months start to finish. Councilmember Bean asked about canceling the Idaho Falls contract. Councilmember Slack said we will be continuing to have flows, so there is no end of the contract. Councilmember Kirkham said we will still have to re-contract for the lines that Idaho Falls will be serving. Councilmember Powell asked Husk how the connection will be made when the two lines are joined. Husk said there will be a time when the flow will have to be switched from Idaho Falls to the EIRWWA. Lance said there will be gate valves that while it’s being constructed will allow the flow to go through and after construction it will be sealed off. We will have the ability to flow to Shelley then flow to Idaho Falls during different peak times during the construction. Councilmember Kirkham said the City needs to go to the $42.61 rate. Councilmember Thompson asked if there was a way to keep the $20 million without going the extra ¼% interest. Dave said DEQ has the cheapest rates. Dave presented the loans with both Ammon and Shelley. The ratio of each City’s loan amount to the number of each City’s users – shows that Shelley borrowed more per constituent than Ammon. Shelley’s rate is currently at $39, but they are moving to $42 or $44. Councilmember Thompson said growth will help with the rates also. Dave said for every $1 million borrowed then it raises the user rate $1 per person. Dave said if you do extend it to 30 years you will be paying $3 million additional in interest and after 20 years you will have more expenses and still be paying for this. Council discussed that an additional 4% needs to be added to the rates, which will cover the current deficit. Leslie asked the Council to make the increases for the year all at one time and not some here and some there. Councilmember Kirkham said saddling the constituents with another 10 years of debt should make everyone pause. She wouldn’t do it with her personal finances. Leslie said it increases the interest rate by ¼% also. Councilmember Bean asked Husk if there are private companies that do O&M. Husk said there are some, but they aren’t local. Councilmember Bean asked Husk to email him the list. OMI and Oleya Water are two of the companies. Councilmember Bean again asked for names and numbers to be emailed to him. Councilmember Bean asked how often a line needs to be flushed. Husk said a large line with low flows will need to be cleaned more often. Ammon will be flowing at sub-standard flows, since IBSD didn’t join. Councilmember Powell said the Council Minutes – Work Session 4-14-11 Page 2 of 5 question is to think about how much the City wants to borrow. Council said the City borrows it and then pays it down. Discussion ensued on judicial confirmation details. Leslie said the judicial confirmation doesn’t need to be done if only the interest rate and term are changed, but only if money is borrowed will the City have to go to judicial confirmation. Ted Hendricks of the Development Agreement said Leslie is correct you can do judicial confirmation or hold a new bond election, which will take 60-90 days. There is a new judge and it should be faster, since this judge will decide while he is at the bench. He wanted the Council to think of borrowing $5 million more, but for a 20 year period. He is not recommending going to 30 years, since you might feel you will pay it back sooner than 30 years, but your successors probably won’t. Growth can fund the capital improvement funds reserves. He feels the 2 ¼% interest rate for 30 years is written in stone. It’s not uncommon for Cities to have sewer rates at $55 to $60. 3. Accrued Interest on Water and Sewer Loans (Ted Hendricks)*: Ted Hendricks from the Development Company presented the interest expenses to the Council. To date, on the water project, the City has accumulated $731,000 in interest expense. There has never been any interest expense budgeted, it has always been anticipated that the user would pay for the interest expense. There is approx. $325,000 in interest expense on the wastewater loan accrued to date. There has only been one payment for the sewer of $25,000, but the water has paid $205,000 in interest. Councilmember Bean asked Ted if the bond repayment of $25 million at the time the bonds are closed does not include the accrued interest. Ted said yes, you will also have to pay the accrued interest when the bond is closed. Ted said the balance on the sewer that would still need to be borrowed is approx. $1.8 million. Councilmember Powell said with current expenses the City is at $8.50 per month without cleaning the lines. 4. Animal/Dog Cruelty Ordinance (Shawna/Ron/Animal Committee)*: Ron said this item is being tabled. 5. Garbage Rates (Ray)*: Ray showed the Council the charts and the inequities between the different groups. Ray said he looked at cubic yards per dump versus the current rates. Some of the commercials, etc. go way up and some go down on the per dump rate. The per dump rate is $19.40 on a projected budget of $376,000. He would like to propose moving the apartments to $10 per unit from the current $12 per unit. Leslie said it would make it the same rate as individual home residential is now. If everyone in the City opts out, the City will be in trouble since it has fixed costs. Ray said he thinks the City would require a base rate at a fixed cost, plus so much per service. There will be some inequities since we deal with 3, 5, 6, and 8 yard dumpsters, some full and some half full. There are a lot of variables. Very few independent operators use two people in a truck, they only use one. We would need a front load or a side load truck for the City to safely use only one person to dump. If the City had two new dumpster handling trucks, we could cover the commercial side of the City in three days. Council asked Leslie to add the decrease on the apartments to the next meeting. 6. Ferguson Waterworks Meter Options (Lance): Lance said they have a system called mosaic and it has the opportunity to shut off and turn on water through a computer switch. The quote is basically $200 for every one of these. To run a pilot project of 50 water meter ends, 10 electronic shut offs, Ethernet gateway, software, freight, and installed is $27,200. Leslie said it would help with repeat offenders who turn on their own water, which we have to supervise continually. Councilmember Coletti asked how many the City does per month. Ray stated approx. 50 notices with 20 shut offs per month. We have to have two people do this for their protection. Councilmember Bean said you would have to install a meter to those we will apply this to. Ray stated $180 for the meter and $150 for the radio reading equipment. Lance said this will replace the radio unit. Ray asked if it will talk to Sensus. Lance said no, it is a different system entirely. Councilmember Bean said let’s just keep with misdemeanor citations. Councilmember Slack said he struggles with the fact that this software will not speak with our other software. Lance stated he just wanted them to know this system was available. Council decided not to go forward with the program. Council Minutes – Work Session 4-14-11 Page 3 of 5 7. Misc.: Bruce Patterson, System Administrator updated the Council on the broadband program. There are 8 miles of fiber duct in the ground, spools are waiting, 5 miles of fiber is in and it is being spliced together at a price less than half of the average per mile. When the ground is open he is putting the conduit in to accommodate the fiber when it is needed. Most of what he has done has been on the west side of the railroad tracks; however, the two bores under the tracks are done. He has picked the cheapest routes possible and he tries to choose ditches and the canal companies are ok with it then he has to go to the property owners and their verbal responses came back yes, but he has been dealing with staff at the School Dist 93. The School Board had a meeting last night and they pulled the item. Councilmember Powell stated the district made a motion and voted unanimously to pull the item. Lance said the board chairman called up Todd Hicks and asked where Ammon was on the easement for the sewer line. He has the plan and profile, but he doesn’t have the sprinkler system information and he thinks that is why it was pulled. Councilmember Powell said that was the cheapest route and the City might lose our first customer without this easement. Bruce Patterson stated he has found a new route and would like to move forward and just accept we won’t get cooperation from the different agencies. Councilmember Bean said do what you need to do and not lose Syringa. Council agreed. Bruce Patterson discussed the police department getting broadband. Councilmember Powell said they will get to our fiber, but they will have to arrange to get to an internet provider. Bruce Patterson said if the police can get an agreement with Idaho Falls, then they can get hooked onto the network. They would be able to run at 1 gig and not have to have a secure line and could run their phones through it. Bruce stated he has found a new route, but it will take 90 days and the school would have been 60 days. Councilmember Kirkham asked what the additional cost was. Bruce said around $20,000. He said to remember that we are serving the people of the community and we should serve them. Councilmember Powell said let’s work around the district. Bruce said the new route will take care of Well 2. Council advised Bruce to go with the new route. Leslie invited the Council to go see the new SCADA building. Councilmember Powell said we did budget for the grant portion and there might be a little capital outlay and we might need to pony up with it. He would like the money to be left there for other needs. Council agreed. Councilmember Thompson asked when the IBSD ground is open, can he go in. Councilmember Powell said yes. Council discussed that whenever developers come in, they need to be putting fiber in. Lance said having the police in the SCADA building doesn’t work with the office space, because if they take two of the currently vacant ones, then there will be no space for growth for public works. Councilmember Thompson said there are only three empty offices. Ray said there is only planned parking for the employees. Lance has shown Karl the spaces and the allotted space is the same as they have now. Ron advised the Council about Jeff Ring dropping out of the Library District, but the document did not get turned in. The clerk told Bobbie from Elections that she would be there all day to accept the resignation, but she wasn’t there and Bobbie did not have permission to accept the resignation. The result of this is that the district will still have to have an election. Leslie said the risk is that Jeff Ring will get in and then resign, and they will appoint someone. Ray asked the Council if they have any interest for a clean-up day for the City. Last year they had very little response to the program. Council said no. Councilmember Thompson said he went to the library board meeting. The meeting is run by Robert from the City of Idaho Falls and his secretary Kim and they have never once thought of giving the County money to anyone else but Idaho Falls. There are no reserves and everything goes over to Idaho Falls every year and he feels it was the simplest thing for them to do. There is a June meeting and he would like the Council to go and to get th enlightened. The meeting will be June 28 at 2 p.m. at the Library. There would be reciprocity between the two libraries. Councilmember Slack said he feel Robert would like another satellite for the library. Councilmember Thompson said with the cost of gas, it costs approx. $4 to borrow one book. Councilmember Bean passed out a proposed contract for the electrical inspector. He asked Leslie to put it on the next agenda for Council’s approval. Councilmember Coletti asked if there have been any updates on the City of Idaho Falls meeting. th Councilmember Kirkham said one sub-committee is meeting on May 4concerning the area of impact. The rest will be contacted by the end of the month. Council Minutes – Work Session 4-14-11 Page 4 of 5 Leslie asked the Council if anyone needed new business cards. Council stated they were ok. Leslie thth advised the Council that the SCADA building open house needs to be changed from June 10 to the 17. Council was ok with the change. Councilmember Kirkham motioned to move into executive session pursuant to Idaho Code Section 67-2345 (1-b). Councilmember Slack seconded. Roll Call Vote: Councilmember Kirkham – Yes, Councilmember Slack – Yes, Councilmember Powell – Yes, Councilmember Thompson – Yes, and Councilmember Coletti – Yes. The motion passed. The meeting adjourned 7:02 p.m. _____________________________________ Steve Fuhriman, Mayor __________________________________ Leslie Folsom, City Clerk Council Minutes – Work Session 4-14-11 Page 5 of 5