November 9, 2004
The Board of Commissioners of the City of Lawrence met in regular session at 6:35 p.m. in the City Commission Chambers in City Hall with Mayor Rundle presiding and members Dunfield, Hack, Highberger and Schauner present.
RECOGNITION/PROCLAMATION/PRESENTATION:
Mayor Rundle proclaimed Wednesday, November 17, 2004 as “National GIS Day”; and, Thursday, November 11, 2004 as “Veterans Day.” The Mayor also recognized current City employees who have served in the United States Armed Forces.
CONSENT AGENDA
The agenda item authorizing the City Manager to execute a contract with Bartlett and West Engineering for North Lawrence Pump Stations 1, 2, and 3 Improvement Project-Design and Construction Services in an amount not to exceed $313,702.30 was removed from the Consent Agenda. (1)
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to approve the City Commission meeting minutes of November 2, 2004. Motion carried unanimously.
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to approve claims to 278 vendors in the amount of $1,872,286.90. Motion carried unanimously.
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to approve the Drinking Establishment Licenses for the Mad Greek, 907 Massachusetts; Last Call, 729 New Hampshire; The Granada, 1020 Massachusetts; and the Retail Liquor License for Sprit Liquor, 600 Lawrence Avenue. Motion carried unanimously.
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to concur with the recommendation of the Mayor and appoint Scott Bailey to the Hospital Board, to a term which will expire September 30, 2008. Motion carried unanimously.
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to set a bid date of December 7, 2004 for the construction of Fire Station No. 5, 1911 Stewart Avenue. Motion carried unanimously. (2)
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to authorize the City Manager to execute a contract agreement with BG Consultants for $71,982.40 for final design of the first phase of the downtown waterline improvements. Motion carried unanimously. (3)
The City Commission reviewed the bids for the Clinton Parkway Bike Path for the Parks and Recreation Department. The bids were:
|
VENDOR |
TOTAL BID |
|
Morgan Concrete Services |
$ 43.95 lf |
|
RD Johnson |
49.80 lf |
|
LRM Industries |
49.90 lf |
|
GSR Construction |
51.49 lf |
|
Kansas Heavy Construction |
61.50 lf |
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to approve the bid of Morgan Concrete Services, in the amount of $43.95 a foot totaling $27,029. Motion carried unanimously. (4)
The City Commission reviewed the sole bid for the biosolids basin cover for the Utilities Department. The bids were:
|
VENDOR |
TOTAL BID |
|
CAS Construction |
$ 339,900.00 |
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to approve the sole bid of CAS Construction, in the amount of $339,900. Motion carried unanimously. (5)
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to set a bid date of December 14, 2004 for 23rd and Haskell Stormwater Mitigation Pond. The project is funded by 80% Federal Transportation Enhancement Grand and 20% city funds, which were previously allocated in Resolution No. 6399. Motion carried unanimously. (6)
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to place on first reading, Ordinance No. 7836, rezoning (Z-08-41-04) 90 properties in the Western Hills neighborhood from RS-1 (Single-Family Residential District) to RS-E (Single-Family Residence Estate District). Motion carried unanimously.
(7)
Ordinance 7834, rezoning [Z-06-26-04] a tract of land approximately 2.6638 acres from A (Agricultural) District to PRD-2 (Planned Residential Development) District, (the property is generally described as being located at the west side of extension of Folks Road, south of West 6th Street), was read a second time. As part of the consent agenda, it was moved by Hack, seconded by Schauner, to adopt the ordinance. Aye: Dunfield, Hack, Highberger, Rundle, and Schauner. Nay: None. Motion carried unanimously. (8)
Ordinance 7837, rezoning [Z-08-33-04] a tract of land approximately 1.33 acres from PCD-2 (with restrictions) (Planned Commercial Development) District to PCD-2 (with new restrictions) (Planned Commercial Development) District, (the property is generally described as being located at the southeast corner of West 6th Street & Comet Lane), was read a second time. As part of the consent agenda, it was moved by Hack, seconded by Schauner, to adopt the ordinance. Aye: Dunfield, Hack, Highberger, Rundle, and Schauner. Nay: None. Motion carried unanimously. (9)
Ordinance 7838, annexing approximately 36,960 square feet located at E 1338 Road (North Minnesota) (Shoemaker Tract) Lot 4, Wells Acres subdivision, (the property owner is seeking permission to establish City sanitary sewer service), was read a second time. As part of the consent agenda, it was moved by Hack, seconded by Schauner, to adopt the ordinance. Aye: Dunfield, Hack, Highberger, Rundle, and Schauner. Nay: None. Motion carried unanimously. (10)
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to concur with the Planning Commission’s recommendations to approve the Final Plat (PF-09-27-04) for Diamondhead, a proposed residential subdivision and planned commercial development containing approximately 96.563 acres, located south of West 6th Street (U.S. Hwy. 40) and west of George Williams Way (extended); and accept the dedication of easements and rights-of-way subject to the following conditions:
1. Provision of a revised Final Plat to show the following:
Motion carried unanimously. (11)
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to concur with the Planning Commission’s recommendations to approve the Final Plat (PF-09-31-04) for St. Margaret’s Church Addition, a proposed addition containing approximately 10 acres, located at 5700 West 6th Street; and accept the dedication of easements and rights-of-way subject to the following conditions:
4. Correct legal description and ownership label to the west.
Motion carried unanimously. (12)
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to concur with the Planning Commission’s recommendations to approve the Final Plat (PF-09-30-04) for Westwood Hills 4th Plat, a replat of Lots 5-12, Block Two, Westwood Hills 3rd Plat, a proposed single-family residential subdivision containing approximately 1.833 acres, located north of Eisenhower Drive and west of Wakarusa Drive (extended); and accept the dedication of easements and rights-of-way subject to the following conditions:
1. Provision of the following fees and recording documentation:
a. Current copy of paid property tax receipt at the time of submittal of the final plat for filing.
b. Recording fees made payable to the Douglas County Register of Deeds.
c. Provision of a completed Master Street Tree Plan per Section 21-708a.
2. Pinning of the lots per Section 21-302.2.
3. Execution of a Temporary Utility Easement.
Motion carried unanimously. (13)
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to concur with the Planning Commission’s recommendations to approve the Final Plat (PF-09-28-04) for Apple Valley Subdivision No. 2, a replat of Lot 19B, Addition No. 11 in North Lawrence, a proposed single-family residential subdivision containing approximately .407 acres and is located at 865 Elm Street; and accept the dedication of easements and rights-of-way subject to the following conditions:
1. Provision of the following revisions to the plat:
a. Change the word “plan” to “plant” in general note No. 1;
b. Change “Ninth Street” to “N. 9th Street”; and
c. Provision of necessary perimeter utility easements.
2. Provision of the following fees and recording documentation:
a. Current copy of paid property tax receipt;
b. Recording fees made payable to the Douglas County Register of Deeds; and
c. Provision of a completed Master Street Tree Plan per Section 21-708a.
3. Provide an Agreement Not to Protest Formation of a Benefit District for street and sidewalk improvements to Elm Street and to N. 9th Street;
4. New driveway culvert pipes must be installed per the approval of the Department of Public Works. Submit a plan and profile of the existing and proposed roadside drainage system fronting the property. The profile must extend far enough along the right-of-way to identify optimum system grades. Identify all pipe sizes and flowlines for construction. This study must be approved by Public Works prior to release of building permits; and
5. Execution of a Temporary Utility Agreement.
Motion carried unanimously. (14)
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to approve the site plan (SP-08-52-04) for a building addition and parking lot expansion at St. Margaret’s Episcopal Church, property owner of record, located at 5700 West 6th Street, subject to the following conditions:
1. Execution of a site plan performance agreement per Section 20-1433;
2. Filing of all easements with the Register of Deeds prior to issuance of a building permit;
3. Revise property ownership label to the west;
4. Label existing 40’ and 80’ rights-of-way for Stoneridge Drive;
5. Provide Book and Page references on site plan for utility easements;
6. Add note under General Notes: “No access permitted to W. 6th Street or Stoneridge Drive (hatched area)”;
7. Filing of the final plat at the Register of Deeds office prior to release of site plan to Neighborhood Resources for issuance of building permits;
8. Revise legal description to include: “to be platted as Lot 1, St. Margaret’s Episcopal Church Addition”;
9. Include note on plan that states a revised site plan must be submitted for review and approval prior to issuance of building permits for future phases;
10. Submittal and approval of photometric plan;
11. Screen south side of proposed parking lot with appropriate landscaping;
12. Include “quantity” column on Landscape Schedule; and
13. Revise proposed parking lot to meet accessible space requirement.
Motion carried unanimously. (15)
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to receive notice from the Kansas Development Finance Authority for planned issuance of approximately $43 million in revenue bonds for a multi-disciplinary research facility on the University of Kansas, Lawrence Campus. Motion carried unanimously. (16)
As part of the consent agenda, it was moved by Hack, seconded by Schauner, to receive the annexation request for approximately 13.3625 acres generally located north of Clinton Parkway and north of Lake Pointe Drive extended. Motion carried unanimously. (17)
CITY MANAGER’S REPORT:
Ed Mullins, Finance Director, presented a summary of the Third Quarter Financial Report - 2004 for the City of Lawrence. The report covered the first (9) months of 2004. He said this report was a new format and asked the Commission for feedback on the new format.
Commissioner Schauner asked Mullins what he predicted the increase in the use tax to be. He said he understood that there was an $800,000 unbudgeted increase in tax this year.
Mullins said the tax law had not been in effect for the entire year of 2003. He said the use tax for November 2004 was not going to be a lot greater than November 2003. He said the City would not see a growth as a result of the statutory change, but as a result of consumers buying more.
He said the City’s sales tax for the first 9 months was approximately 6 percent He said in the future the sales tax would be approximately 5 percent.
Commissioner Schauner asked if the 5 percent would be the increase expected on sales tax as well as the local use tax.
Mullins said yes.
Commissioner Schauner asked Mullins what he anticipated the total use tax to be for the current physical year.
Mullins said that figure was not broken out, but the total use tax would be approximately one million.
Commissioner Schauner asked if it was fair to say that 105 percent of a million dollars would be a reasonable expectation for the next fiscal year.
Mullins said correct.
Commissioner Schauner asked Mullins if it was his expectation that the general fund expenditures would come in at 70 percent of budget when the year was completed or were there larger expenses the last quarter that were not reflected in the first ¾ of a year.
Mullins said the City was at 70 percent of budget at this time and the City would see more expenditure growth in the 4th quarter. He said to keep in mind that while looking at 5.5 million revenues over expenditures, all the property tax was in already and there would not be a major revenue source coming in at 4th quarter. He said by the end of the year, the City should see a 2 million dollar increase in the fund balance. In terms of the budget, the City would be approximately 95 or 96 percent at the low end and 97 percent at the high end of budget.
Commissioner Schauner said for ¾ of the year, assuming there was an even expense of the general fund throughout the year, the City could theoretically be at 75 percent of budget at the end of the 3rd quarter, rather than 70 percent.
Mullins said the City was a little bit below, but there were some expenditures that departments had a tendency to put off just to know that the funds were going to be available. He said there were some expenses the City accrued at the end of the year which would make that 4th quarter heavier than some of the previous quarters.
Commissioner Schauner asked if sales tax revenue was better in the 4th quarter.
Wildgen said that information would not be available until next year.
Mullins said what was shown on the sales tax was on a cash basis, but when the financial report was being done staff would shift that money over to when it was actually distributed.
Commissioner Schauner asked about the water and sewer revenue being $570,000 less than the same period last year in which that decline in revenue was attributed to a wetter summer, but in Mullins oral remarks he said he expected that revenue to be down approximately one million dollars for this fiscal year. .
Mullins said the two major sources were water and sewer revenue with sewer revenue being greater. He said water revenue was approximately 10 million dollars last year and 9 million dollars this year to date. He said when looking at total revenue, the City was only down about $570,000 between those two sources.
Commissioner Highberger said he liked the new reporting format, but would also like to see the percent of budget from the previous year added to the report.
Mullins said he could add that percentage in the report.
Commissioner Schauner asked what the expected percent of general fund unspent was at the end of the current physical year.
Mullins said the fund balance would be approximately 18 percent
Mayor Rundle said he would like to see some of the verbal comment in a memo since there was good information stated at this meeting this evening.
The Commission concurred to receive the report. (18)
REGULAR AGENDA ITEMS:
Consider request from The Ecumenical Fellowship, Inc. for funding of $5,000 for the 20th Annual Martin Luther King, Jr. Celebration.
Reverend William Dulin, Chairman, Martin Luther King, Jr. Celebration, presented the request for funding. He thanked the City for their proclamation and support. He wanted to bring in knowledgeable speakers to honor the celebration, but that costs money (travel, lodging, honorarium). He was requesting funding for the celebration from the City. The celebration was the first community wide celebration of the year. It was a great celebration and has grown, but there was still room for more growth.
Reverend Leo Barbee echoed Reverend Dulin’s comments. He said they really wanted to step up the celebration. One guest this year was Terrance Turner, who was one of the “Little Rock Nine.” Carl Boyd, an educator and motivational speaker, would also be speaking this year. He said they appreciated what the City had done and they were asking for an additional $5,000.
Mayor Rundle asked Dulin to explain the total budget for the public’s benefit, since this request was a small part of the overall budget.
Dulin said the overall budget would run around $15,000-$20,000. The honorariums for the speakers alone were approximately $9,500 and did not include airfare, lodging, or meals. That figure for those speakers was reasonable in comparison to other speakers. They tried to get Caretta Scott King a few years ago, and her honorarium alone was $12,000 plus her aid.
Reverend Paul Winn said the City of Lawrence had set a precedent of excellence by holding a large scale event for this day. This event was community education. He asked for the City Commission’s support and approval.
Barbee said they tried to add new dimensions to the event. He said this year’s event would include a presentation at the Boys & Girls Club. It would include a film to share some of the challenges the country has gone through which would broaden our scope of continuing education.
Commissioner Highberger said the Martin Luther King Celebration was a strong community event and he strongly supported that event. He said his only concern was being careful not to fund religious events. But funding a speaker was perfectly acceptable. He said this year we should try to fill the Lied Center.
Commissioner Hack said the Martin Luther King Celebration was an event that promoted community building. Lawrence students learn about those figures in their History or Civics classes and it would be great to have those speakers in this community. She said she spoke to Reverends Dulin and Barbee before the meeting about the importance of character and this event provided an opportunity to celebrate character.
Commissioner Dunfield said after sharing the stage on two separate occasions observing this event, it was a powerful and moving event. He said he strongly supported it. He wanted to be careful not to cross that line between religious and civil liberties, but certainly this was an important and powerful day in Lawrence.
Mayor Rundle echoed the comments of his fellow commissioners. Students were aware of those figures and giving teachers the opportunities to connect those events back to the classroom was impressive.
Commissioner Schauner said he agreed with the comments of his fellow Commissioners.
Moved by Schauner seconded by Hack, to approve the request from the Ecumenical Fellowship, Inc. for funding of $5,000 for the 20th Annual Martin Luther King, Jr. Celebration. (19)
Receive information from Black & Veatch and City staff regarding rate alternatives; CIP projects proposed for the Water and Sewer Fund; and various billing scenarios
Steve Phillips reviewed a PowerPoint presentation. He wanted to convey the importance of an increase in the rate structure for water and sewer. He gave examples of the effects of different classes of customers.
He said the first objective was for the organization to determine what they were trying to support. That activity occurred through the wastewater and water master planning activities that had been discussed on many occasions. The plan needed to facilitate growth in the community, providing full compliance with state and federal regulations, and being sure the utilities were reliable. He briefly discussed the capital improvement planning process. He discussed what it was going to take to manage that utility and what the current financial conditions were for that utility. The weather could have a drastic role on utilities, water, and wastewater.
He discussed the rate development process, concerning the current financial conditions and needs. It needed to maintain the existing systems and fund the future growth needs.
He noted the rate development philosophy. He said all rate structures were developed and based on recovering the costs of service while at the same time meeting any and all the debt coverage requirements we have for the portions of the program that were debt financed. This was the foundation for all the alternatives that would be discussed.
He asked where we were with the existing water and wastewater rates in Lawrence. He said the existing rate structure was inadequate to meet the capital requirements for the future.
He asked the City Commission to consider changes to the amount of revenue and in some cases how that revenue was collected.
Commissioner Schauner said the current rate structure could support the capital improvement plans if the rates charged within that structure were increased.
Phillips said that was a fair statement.
Phillips first reviewed the water rate proposed modifications. The basis for the work that staff worked on would have some very fundamental characteristics. One characteristic would be to eliminate the current minimum charge and to initiate a new system of monthly service charges that would be based on size of the meter that the customer had and to focus on two different ways to recover revenue based on the volume of water a customer uses. This requirement was there because of the capital improvement programs developed in the master plan.
The two alternatives that were focused on were:
Alternative 1 – Uniform volume charge system (UVC) which for every unit of water that was purchased there was a rate within a class of service; and
Alternative 2 – Modified declining block rate (MDB) which included changes that would benefit certain customer groups.
He said the uniform volume charge established rates for each of the four customer classes in the water system which were residential customers, multi-family customers, commercial entities, and industry. Compared to the existing rate structure, this UVC would be most favorable to low to moderate volume users in each of those four classes. The tables would define a low to moderate user. He said when looking at the current rates that would be charged and the rates that would be used in the future, the people who would gain the most advantage from a UVC were those low and moderate users in each of the classes.
The modified declining block rate was similar to the existing rate structure but has a “lifeline” block, or special rate, for the lowest volume users. It provided those users more relief from cost of service because those were extremely low volume users. This was a response to an earlier discussion.
He said when comparing the current rate structure to the declining block tables, to look for the advantage that accrued to those very low volume users and the high volume users. He said this uniform volume charge system favored the very low users and very high users.
Commissioner Dunfield said it appeared that the difference for a very low volume user at the most, between those two rates, extended out to 2009 to the highest point, was only 43 cents a month. He said when saying that this favored the very low volume user, it favored those users by a very tiny margin.
Phillips said yes, it was not a large amount. This number or favoritism was set by picking the ends of that lifeline block and how much was wanted to be decreased in the rate for those people. They had worked with communities that culturally chose to make that lifeline block significant or not.
Commissioner Dunfield said for all of those low end users, either one of those two rate structures helped them out relative to their current rate.
Phillips said that was fair statement.
Commissioner Schauner said the use of the word “lifeline” suggested that this rate structure was designed to help people who otherwise could not afford the water that they were currently using. He questioned whether that was a proper term and in fact, might be misleading. He said he did not know if they were trying to develop a rate structure based on some social welfare argument.
Keith Barber said correct and it could more applicably be called a “low volume” charge. He said there was no income consideration at all in establishment of that rate.
Commissioner Schauner asked if the word “lifeline” was a term that the industry had chosen to use in this type of case.
Phillips said that was a common term, but that term did not always mean that it had anything to do with economic circumstances. He said the term “low volume” would have been more appropriate.
Commissioner Schauner said when looking at the UVC Table No. 2, did that cost to the consumer of a $1.95 for a 5/8 inch meter zero usage, approximate the cost of making that service available to that customer.
Barber said that was the cost for meter reading and billing.
Commissioner Schauner said so it did not include any of the equity position that they might otherwise expect to have in the system or the cost of providing a line to the house/maintenance costs.
Barber said that was pure meter reading and billing.
Phillips walked through the tables highlighting the tables to illustrate to the City Commission the results of the Commission’s selection to implement one or the other of those two rate structures as they had been developed.
He said, the table indicated what the usage was in 1,000’s of gallons per month, what the charge was using the existing declining block structure, and for each of the next 5 years, what the month charge would be using the UVC.
He said the MDB structure would be more advantageous than the UVC. He said the table showed that the middle band, between 6,000 gallons and 20,000 gallons per month, received the most benefit from this program compared to the current declining block. He said in fact, below 6,000 or above 20,000, those particular customers would have more advantage if a modified declining block program were in place.
He said Commissioner Dunfield’s point was very well taken that in some cases the changes were small and in some cases, when looking through the chart, were significant depending on usage pattern and which one of the approaches to rate structure was being applied.
Commissioner Schauner asked what percentage of customers fell in the 30,000, 50,000 and 100,000 gallon use ranges.
Barber said Table 7 showed that information by class. He said that information was not totaled for all those customers, but it appeared to be 11% for both the 30,000 and 50,000 gallon usage and 13% for 100,000 gallon usage.
Commissioner Schauner said that would be approximately 35% of the residential customer base.
Barber said those percentages he had mentioned were for all customers. He said residential for 30,000 gallon usage was 2%, 50,000 gallon user was 1.3% and for 100,000 gallon user was .6%.
Commissioner Schauner said if he understood, less than 5% of the customer base would be better off under the MDB rate.
Phillips said correct.
Phillips looked at table and evaluated the multi-family using the UVC approach. He said the same type of information with all 5 inch meters and same usage range, the current charges from a minimum of $6.00 a month to a maximum of over $200.00 a month. He said for multi-family customer the UVC was more advantageous to them then a MDB structure. He said that group principally represented individuals who lived in apartments.
Commissioner Schauner said he received a call from a large family living in a single family home with a 5/8 inch meter. He said that family would not gain any advantage of the multi-family rate structure and would end up paying the same rate as if one or two people lived in the house.
Barber said that was correct. He said the only difference was how much water they used.
Commissioner Dunfield said he also received a phone call concerning that issue and he tried to reassure the citizen. He said it was said that the customer in that 30,000 usage range was only 5% of the total. He asked if it was fair to say that someone with a larger family in a household that used water ordinarily, that those people would still remain in one of those middle range categories. He said he understood that the typical individual uses approximately 3,000 gallons a month. If that usage amount was true, then a family of 8 would use an average amount of 16,000 gallons and would still be in the middle of that range.
Phillips said 70-85 gallons per capita per day was an accepted industry guideline. That amount would be slightly over 2,000 gallons per person, per month. He said individual water consumption varied dramatically. He said having raised 4 daughters, he had large water bills.
Commissioner Dunfield said irrigation of lawns and landscaping was a lot more of a factor than the length of a teenager’s hair.
Phillips said it could be agreed upon, if the data could be broken down, there would be more of the large residential customers, who were large irrigators.
Commissioner Schauner asked if there were any industry standards on what a residential irrigator would use on a monthly basis.
Phillips said the American Waterworks Association might have some background information, but he was not aware of an industry standard because of the fluctuation in use across the country. Contacting local utilities to see if they had information on that could work, but most of those utilities did not collect that detailed information.
Commissioner Schauner said it was possible at the local level to cross match those persons with backflow meter obligations with their water bills and have some better idea of what that usage was on average.
Phillips said that’s probably true.
Phillips addressed the UVC with the commercial and industrial customers. He said the impacts of the different sizes of meters were evident in the table. He said the usage was in the 1,000 of gallons but the numbers were significantly larger. The characteristic pattern remained the same that in the UVC the moderate to low users in the classes received the benefit.
Commissioner Schauner asked if it was possible to have one rate structure, such as the UVC, for residential and multifamily consumers and a MDB for commercial and industrial consumers.
Barber said those types of rate structures were possible and it was a combination of the two.
Commissioner Highberger said he noted in looking at Table 7 that there would only be two industrial users in the top two categories in the entire City.
Barber agreed.
Phillips said Lawrence was a growing community and this community needed to expand, upgrade, and maintain the high level of service in the infrastructure system which would require additional capital funding. He said that capital funding and the corresponding operations and maintenance funding would need to come out of the utility rate structure for day to day operations and to retire the debt that was necessary to provide the capital infrastructure that was needed.
He said on the water system side, there were two ways to address that issue. One was uniform volume charge and one was a declining block charge that had some reduction in the rate for people who were very low volume users. How the City Commission chose to evaluate those and move them forward was clearly an important policy decision for the City. He said they had the capability and the ability to do the numbers and develop the tables. The two programs and analysis was a policy decision for the City Commission.
Commissioner Schauner asked if the current declining block rate structure more accurately describes the full costs of delivering water across the spectrum of users from the very low to very high.
Barber said the current rate structure was designed to represent the various demands of the individual classes in a single rate structure. That was why the first block which applied to the lowest users was basically based on the demands of the residential class which would place it at the highest and as it declined the commercial class had lower demands and industrial had even lower demands. He said a uniform rate was being setup, but at a more of a declining block sliding scale. He said within each class there would be different customers paying a slightly different unit charge for their average use of water whereas under the uniform rates everyone in that class would pay the exact same rate.
Commissioner Schauner said under the City’s current structure, the lowest volume user currently paid a service charge. He asked if that service charge more closely approximates the full gamut of expenses incurred by the utility in delivering service as opposed to the uniform volume charge Table 2, where the $1.95 per month in 2005 would only approximate the cost of reading the meter.
Barber said there was a difference between the minimum charge and service charge. The minimum charge, in addition to the $1.95, which was for meter reading and collection, also had a requirement to pay for the first 2,000 gallons whether that water was used or not. If a customer did not use that water, they would be paying for system availability.
Mullins said by setting the block at 2000 gallons, the City there would be the possibility of those extremely low volume users subsidizing some of the other users as well as some the high volume users moving into the next rate block which would typically be for commercial or industrial customers. . He said that was where that 20,000 break came in and some of the residential units were getting into that lower rate block which was not what the system was designed for.
Commissioner Schauner said the cost of building and maintaining the infrastructure was greater on a per customer basis than the actual cost of treating the product. To say the low volume user was subsidizing the high volume user was a little misleading. The cost to maintain the infrastructure was the most significant cost.
Barber said under the existing system, those costs were covered through the volume charge.
Phillips then discussed the wastewater system rate modifications. The characteristics that were recommended were eliminating the minimum charge, initiating a new uniform service charge applied to all customers, and to recognize this increase was necessary to move ahead with the capital improvement recommendations from the master plan.
Commissioner Schauner asked if he was a 50MG user on the water side would he also be on the wastewater side.
Barber said you could be 50,000 gallon user on the water side and a 25,000 gallon user on wastewater if part of your water was for irrigation, product use, or use of evaporator coolers.
Commissioner Schauner asked how the system would know if a person was irrigating.
Mullins said for some of those customers who had that type of usage there would be a separate meter which would be read separately and there would be a different volume of charge for water and wastewater.
Commissioner Schauner said the typical person for whom a landscaping business would install an irrigation system, would not have that second meter reading.
Mullins said a winter quarter would then be used.
Philips said that was a typical technique to use some averaging of winter time periods to develop that wastewater chart base.
Commissioner Schauner asked about rates beyond 2009 and whether there were any projections about what would happen under the current rate structure, the modified block, or the uniform volume charge regarding additional expansions, infrastructure and operations and maintenance.
Barber said those rates went one year beyond 2009 and those rates looked similar.
Phillips said, from the facility engineering side of that discussion, there were some important decision points that would come about in 2010 and 2011 in the realization of some additional facilities that were scheduled and by then, they would know whether those facilities would need to be implemented at that time.
Commissioner Schauner asked if that decision would be based on actual growth or more current and timely projections.
Phillips said yes.
Mayor Rundle called for public comment.
Frank Male, part owner of Lawrence Landscape, said when someone new came to Lawrence everyone commented on the trees and landscaping. He said Lawrence was a true gem because of the foresight of many homeowners, businessmen, and City Council leaders. He said raising water rates would not bring this type of landscaping to a screeching halt, but like many things such as affordable housing and communities, it was one more cost that citizens would need to weigh. When those costs became out of line and it was not an essential expense, fewer homeowners and businessmen would make an investment in their outdoor environments. He said common sense water rates were one way to handle positive leverage on the investment people make on their outdoor environment.
He said with those issues in mind, he urged the City Commission to adopt the lowest rate increases that were reasonable.
Commissioner Schauner asked Male how many gallons a typical irrigator might use.
Male said that it was hard to tell. He said he did not have a good idea of that usage, but it varied from person to person.
Commissioner Highberger said he appreciated Male’s comments and the Commission was trying to establish reasonable rates. He said if the City was going to raise a large amount of money and no matter what was done, people would be experiencing unacceptable rate increases especially on the wastewater side. Most of that money was cost of growth to finance a new sewer plant and development.
He said as far as the water rate increases went, he was satisfied that the uniform rate was the way to go. He said the modified declining block structure unfairly penalized the broad range of the City’s moderate water user. He said he had some concerns about commercial and industrial users. After additional review, the uniform block did raise rates higher for those larger commercial users, but those rates were not a serious concern. He said the lower volume commercial users probably need a break relative to the large commercial users. He said there were only one or two industrial users in the highest categories that would be affected by changing to the uniform block. He suggested adopting the uniform block rate.
Commissioner Schauner said he was not convinced that what this City had was broken. Although he recognized that the City needed to raise more revenue, he was not convinced that going to either the UVC or MDB was required. He said it was reasonable to expect that even the low volume user to pay their fair share of both the cost of reading their meter and the cost of the infrastructure that provided the product for those users.
He said he believed there were a number of people he would like to hear from concerning this issue such as the school district, University of Kansas, and some other peoples whose budgets were under attack. He said he was not happy with the wastewater rate structure proposals because of the astronomical increases and he would like to look at development charges or some other way of modifying those wastewater rates for current customers, residential and otherwise. He preferred to extend an invitation to those groups to share their input with the City Commission before a decision was made.
Commissioner Hack agreed and said there were some large water users that would be affected that we had not heard from. She said Lawrence Memorial Hospital was another example of a large user.
She noted that the Commission not only needed to talk about growth, but regulations and reliability. She said those were components in those increases and the need for those increases.
She said one of the percentages that concerned her was the difference between the low volume users, which according to the data was 21% of the people using 30% of the water. She said it was hard to reconcile those numbers. If the City Commission would be giving a break, then they needed to put that in the right place.
She was not comfortable making a decision until there was an opportunity to take the information that was given to discuss this issue with other people affected.
Commissioner Dunfield said he was not interested in forcing the proposal if other Commissioners were not ready. He said this was the fifth time this year that these issues had been discussed. He said he also was disturbed with the wastewater charges but that issue was discussed extensively and system development charges were increased on the wastewater side significantly with those rates. He said he was willing to look at that question again.
As far as the water rates, he said his opinion had already been stated. He noted that either proposal would benefit the low end users from the current rate structure. He said it was important that people understand that either of those proposals would proportionately help those at the lower end of the use category. The UVC would also favor the middle category where the vast majority of users were at the expense of those in that top 5 percent which was sending the right type of signal. He said concerning the UVC, as far as all the difficulty talking to people about what those water rates mean, a gallon of water cost the same with the UVC whether using 10 gallons or 10,000 or 100,000 gallons and that simplicity had virtue.
Commissioner Rundle said the Commission had been thoughtful in anticipating the users that the Commission wanted to hear from. He said everyone was agreeable to move forward. He said this issue had been discussed before, but this issue was a clearer and more understandable presentation than before. He said this issue had been a difficult issue to get our mind and arms around.
He said he did not like such opposing scenarios because the Commission was faced with favoring or impacting one group. He would like to have something that was more uniform and equitable. He would also like to know if the Commission could get more input from the City’s bond counsel concerning the amount of cash that the City was raising compared to the normal range; the City’s debt financing and how much would be impacted; and was the City raising more cash than usual.
Wildgen said it would be more appropriate to receive input from the financial advisers.
Commissioner Rundle asked if it would be appropriate to put this issue on a timeline.
Wildgen suggested two weeks and invite KU, the school district, and the hospital.
Commissioner Schauner suggested inviting anyone that was a commercial/industrial user that might see a significant impact on their budget.
Commissioner Rundle said he would also like to hear from Lynn Parman, Economic Development Director, Chamber of Commerce, and how this would potentially impact attracting firms.
Commissioner Highberger said in looking at the numbers for industrial users, under either scenario, the factory industrial users were fairly low.
He was a bit frustrated and was not sure how much more information the Commission would receive. He said the only way to make this issue more palatable was to find ways of reducing the projected expenses such as reviewing the system development fees which were already approved, but he personally thought were too low or to review the Capital Improvement Plan and find some idea of reducing some of those expenditures
Commissioner Schauner said another option was based on the adage of “If it ain’t broke don’t fix it.” He said although he recognized the City needed more revenue, he was not convinced that moving to either the UVC or MDB was necessary. He said there was disagreement with the City Commission, but it did not seem right or fair that one class of user did not pay more than the cost of reading a meter and that was all those two proposals did.
Commissioner Highberger said the City’s existing rate structure was inequitable. He said the low end user was subsidizing the higher end user.
Commissioner Schauner said it was only to the tune of the first 2,000 gallons.
Commissioner Highberger said the way he understood the cost of providing water, some of that cost was for average daily use and some of the cost was for peak use. He said a lot of the peak use was yard watering. He said in order to pay for having that capacity sit around to cover the big use, everyone’s rates went up.
Commissioner Schauner said one of the issues that was misleading in this conversation was that yard watering was only one function of outdoor use. He said there was stabilization of concrete and foundations and a number of reasons to water outside that did not relate directly to just how green a person’s grass was. He said there was more to this discussion than just painting the person that waters his lawn as an abusive user.
Commissioner Highberger said 3.9% of the City’s customers were using over 30,000 gallons of water a month which was a lot of water. He said he did not think it was unreasonable to ask those high end users to pay the real costs of providing that service.
Commissioner Schauner said he did not think it was unreasonable to expect the low end user to pay their fair share of the costs of the infrastructure and operation and maintenance of the product as well
Commissioner Highberger said if the service charge was raised, the practical effect of that raise was to bump a large percentage rate increase into the middle users. He asked for verification.
Barber said any change in the monthly service charge would hurt the lowest volume user the most because that was dollar per dollar increase.
Commissioner Highberger said if the monthly service charge was raised above where the rate was now, the percentage increase from the middle users would jump up higher to where those rates were now.
Barber said that would increase all bills some, but it would affect the 0’s, 1’s and 2’s the most.
Commissioner Highberger said it would also have a noticeable increase in the percentage monthly bill for the middle users.
Barber said that increase could happen.
Commissioner Rundle said in addition with the information requested, he assumed that there was some further modified rate structure that would be coming back.
Commissioner Schauner said he would like to see what it would require, under the City’s current structure, to meet the City’s revenue requirements.
Mullins asked if he would like to retain the minimum charge and do away with the service charge. He said the City’s current rate structure had that minimum charge of $6.55 a month.
Commissioner Schauner said if $6.55 a month approximated the cost of operation and maintenance and reading the meter, then he did not have a problem leaving that at or very near its current rate.
Mayor Rundle said he liked the idea of a service charge that paid each person’s cost of that system.
Commissioner Hack said it was not only getting the water, but maintaining that infrastructure at that level with any other regulations that were unknown at this time.
Mayor Rundle said if all the costs were put together over a 5 year period, 67% of the costs were attributed to growth. He would like to see some way to address those fees as well in the cost of growth study.
Commissioner Dunfield said water and wastewater was excluded from that study because of the separate Black & Veatch study that was approved.
Wildgen asked if the Commission wanted to take another look at that study.
Mayor Rundle said that issue could be addressed over that 5 year cycle.
David Corliss, Assistant City Manager/Legal Services Director said the City had not retained the consultant yet which could be added to their scope.
He said the system development charges were phased in over 5 years. He said staff could bring that back to the Commission for further discussion.
Commissioner Schauner suggested modeling a couple of different approaches.
Mayor Rundle asked if there was a deadline.
Wildgen said technically no. (20)
Consider adoption of Ordinance No. 7841 establishing a temporary building permit moratorium for the development of the East Lawrence rail corridor plan.
David Corliss, Assistant City Manager/Legal Services Director, presented the draft ordinance. He said based on the work plan that was put together by the Planning Department, the building permit would be 12 months from the effective date of the ordinance. Permit applications that had been received prior to October 26, 2004 or where there had been a development plan or site plan prior to Oct 26, 2004 would not be affected. Also, projects that did not involve an increase in size of the footprint of the existing buildings or its repair or replacement of existing structures was not the intent of the ordinance to prohibit building permits in the temporary moratorium area for those situations.
He said there was an opportunity provided for someone who believed their property rights were being infringed on by the ordinance, could come before the City Commission.
Linda Finger said there was a draft timeline prepared. The time period covered 5 phases and a total of 181 work days starting next Monday on November 15th. She said staff was incorporating 8 to 10 public meetings and work sessions. The timeline was as follows:
Phase 1 (Nov. 15 – Jan. 10) (50 days – 27 working days)
Preliminary Work elements include:
· Field work, site survey, and mapping
· Review of ex. Plans
· Orientation meeting with neighbors and all three neighborhoods*
· Establish ad hoc committee to work with staff as sounding board**
Phase 2 (January 11 – March 20) (60 days – 46 working days)
Research & Study elements include:
(north of 15th; 15th – 23rd; south of 23rd)
Phase 3 (March 21 – April 25) (36 days – 25 working days)
(April 26 – May 31) (35 day public comment period)
(June 1 – June 25) (25 days – 18 working days)
Preliminary Draft elements include:
Phase 4 (June 26 – July 17) (22 days – 15 working days)
(July 18 – August 21) (35 day public comment period)
(August 22 – September 30) (40 days – 29 working days)
Final Plan elements include:
Phase 5 (October 1 – October 31) (31 days, 21 working days)
Implementation Plan elements include:
She said the timeline was a draft because staff did not what that timeline to be set in stone before the ad hoc committee was created and because staff wanted that committee to have input in finalizing that issue.
She said the areas on the map were more inclusive than staff would indicate, but if those areas change, staff would ask to reduce the moratorium on those areas so it only covered the areas within the actual corridor study.
Commissioner Schauner asked if periodic reports would be available on Planning’s website.
Finger said staff would like to set that issue up under the area plan section of the Planning Departments website. She said whatever was adopted as a timeline for this issue would also be placed on the website.
Rich Forney, Salvation Army, said concerning their site plan, he wanted to make sure this ordinance would not affect the Salvation Army’s ability to receive a building permit at the appropriate time.
Beth Anne Mansur said she understood that the Salvation Army was “grandfathered.”
She was curious why the cutoff point was north of 11th Street. She said she wanted the area to connect up to downtown if appropriate
Michael Almon said the request that was made included Hobbs Park. He said the north area should extend north of 11th Street for at least two reasons. One reason was because if it was the terminus of the rails/trails that connectivity, which was the main issue emphasized ever since the bicycle advisory committee brought the bicycle issues to the forefront, was key to any comprehensive bicycle planning. He said that north terminus had to be comprehensively looked at on how that trail would connect.
He said right now, the initial plan through the Burrough’s Creek stormwater section was that this trail would connect to Delaware Street, north to 11th Street along with the trail that went around the ball field at Hobbs Park. He said Huxtable and Associates at 12th and Delaware had requested that the north section of 12th and Delaware be vacated. He said he would not like to see that section vacated, but it might. He went on to say that the proposal would then end at 13th Street, west to Delaware and then north. He said the question was open ended because they did not know how that issue would be resolved.
The other concern of extending to the north was because the east half of the Delaware Street, from Delaware west to the alley was industrial zoning in the 9 and 10 hundred block.
He said he assumed that the October 15, 2004 when the Commission decided to proceed with this moratorium, that that was enough of an ordinance to initiate the plan. He said he assumed the plan was going.
Commissioner Hack said the plan would start on Monday.
Almon said the final issue concerned legalities for surrounding adjacent property owners on the right-of-way (abandoned railroad). He said as he understood it, nothing could formally change until the tracks were physically removed, which was one of the hurdles. Other issues involved right-of-way, easement, fee simple ownership, and claims that adjoining properties owners might have.
James Grauerholz, property owner east of 19th Street, said it was his understanding as well that the Salvation Army’s new facility would be allowed to proceed. He said there were 2 or 3 outreach meetings with a great flow of communication, reassurance, and understanding between concerned neighborhood residents, Salvation Army staff, and City advisory volunteers.
He said he supported the moratorium. He said as this region became populated the rails were a dividing line. He said now, the rails not only offered the absence of a dividing line, but the opportunity to knit together and connect the 3 neighborhoods. He said as Lawrence grows, the population of those three neighborhoods, east side north of 23rd Street was a small fraction of the City’s entire population. He said it would be positive if that group could come together and speak for the interest of their east side. As Lawrence would grow, the east side would become central.
He thanked the City Commission and staff for the receptiveness and cooperative attitude that this neighborhood based initiative had brought forth.
Finger said staff concurred with the public opinion that the moratorium was not intended to catch those projects that were in the pipeline.
Corliss added that site plan approvals are good for one year. He said if the building permit was not pulled on the site plan within a year after it was approved, then there was an opportunity to come back and ask the City Commission to extend that site plan. If the site plan was not extended, the project would be out of the pipeline.
Mayor Rundle said the other question was the question about extending the area further north.
Finger said staff’s concept was to use Hobbs Park as a trail head. She said 11th Street was used because it was a physical barrier, but could be extended to the north to pick up Hobbs Park.
She said as for the question of legal research, she said that was in Phase 2 for the ad hoc committee to receive the legal research and review that research as to ownership and status of the rail.
She said concerning authorization of the plan, staff took it that it was the will of the City Commission to implement that plan. She said staff intended to bring this plan back to the City Commission and at the point where the Commission received the plan and then the steps would be to initiate a text amendment to Horizon 2020 and send it to the Planning Commission. She said having one member on the Planning Commission on the ad hoc committee should provide that continuity.
Commissioner Dunfield said in thinking about going north of 11th Street, north of Hobbs Park was an active industrial area. He said when talking rail/trail that 11th Street was a natural terminus in that sense. He said it was a good point in that we should look at how that might go on from that location and how that might connect to downtown and ultimately might connect to the bridge across the Kansas River. He said however the physical boundary was defined, the consideration of how that trail ideally might be extended further north and west toward downtown was a legitimate issue.
Finger said that idea was one of the steps in the implementation plan.
Mayor Rundle said the best security for railroad right-of-way was the banking so that right-of-way stayed as railroad right-of-way in the event of future use as needed. He said there had been a lot of questions about who owned and could lay claim to the property. He said that seemed to be the most secure, to keep that area which could be added to the list.
Corliss said when staff received that information from the title company and when staff started that planning process, he could provide the City Commission with a general overview of the City’s legal options as the title research indicated.
Commission Schauner said he would like a report after the title company report.
Commissioner Highberger asked if there was any area north of 11th Street that was zoned industrial that currently was not used for industrial use.
Finger said she was not intimately familiar with all of those properties, but there were some of those properties that were marginal uses that might or might not still be at those locations.
Commissioner Highberger said in implementing this area plan that would be one of the issues that would be looked at with regard to all of that industrial zoning being appropriate in that area. He said for that reason, he would be in favor of extending the study area north to 9th Street.
Commissioner Schauner asked if the City Commission needed to amend the moratorium ordinance in order to accomplish that idea or just instruct that it be part of the plan.
Commissioner Highberger said if there was land that was industrial zoned, then someone could come in and put in an allowable industrial use at that location.
Commissioner Schauner said that was a good point. He said it might make sense to extend northward to prevent that sort of building permit or site planning to get in the way of that area north of 11th Street.
Commissioner Hack said the more information the City Commission, the better off the City Commission would be.
Mayor Rundle said if that land had been vacant and zoned for a number of years, it was certainly an open question.
Corliss said if the City Commission wanted to prohibit pulling building permits on property north of 11th Street, then the moratorium ordinance needed to be amended. He said as he understood, the western boundary was Delaware Street where Hobbs Park was located. He asked if the City Commission wanted to extend the moratorium to Pennsylvania Street.
Commissioner Highberger suggested Delaware Street.
Corliss said Delaware Street to 9th Street, east to the railroad tracks.
Mayor Rundle said as the process proceeded, if it was apparent that a particular property was not relevant that the moratorium could be withdrawn from that property. He suggested reassuring residents that they would have some avenue of recourse.
Moved by Dunfield, seconded by Hack, to adopt amended Ordinance No. 7841 on first reading establishing a temporary building permit moratorium for the development of the East Lawrence rail corridor plan.
PUBLIC COMMENT:
Mayor Rundle called for public comment.
Rick Renfro, Johnny’sTavern, said he wanted to provide the City Commission information on the smoking ban. He said he had been in business since 1978 and the bar business was a tricky business. He said in the last 8 to 10 years the market had been saturated with bars and restaurants in the Lawrence area.
He said he had experienced many small problems since July 1st since the passing of the smoking ban which were:
1. Confrontations with customer asking them not to smoke;
2. Cost of $4,200 for a roof and a mister for his patio in the summer and $3,500 for the heaters and other related materials for winter;
3. Fined $500 dollars by Alcohol Beverage Control for a smoker taking beer off the patio;
4. Unable to make small donations to different organizations; and
5. Lost staff because tips had gone down about one third;
He said those were all small problems, but the big problems were the following:
1. Lost revenue at 20-25% (lunch business not affected);
2. Regular customers were coming in less often; and
3. Outside business (Jefferson County, Tonganoxie, Topeka, Kansas City) was reduced.
He said the bottom line was that this was an economic issue and in order to keep Johnny’s open, he needed to address this issue. He said it did not seem to be fair that he had to bear the brunt of the social change concerning smoking issues.
He said there should be some type of a compromise. He said the City was looking at losing a lot of local business around town. He said the smoking ban would not hurt businesses such as Applebee’s or Old Chicago because they had deep pockets, but the small local bars or bar/restaurant businesses were the businesses that would get hurt.
Kathy Bruner, Clean Air Lawrence, presented liquor tax information for certain months in 2002, 2003, and 2004 to support the contention that there has been no loss of revenue since the smoking ban went into effect.
Moved by Schauner, seconded by Highberger, to adjourn at 8:55 p.m. Motion carried unanimously.
_____________________________
Mike Rundle, Mayor
ATTEST:
___________________________________
Frank S. Reeb, City Clerk
CITY COMMISSION MEETING OF NOVEMBER 9, 2004
1. Contract – Bartlet & W Engineering for N Lawrence Pump Station 1, 2 & 3 for $313,702.30. (Tabled)
2. Bid Date – Fire Station No. 5, 1911 Stewart Ave. on Nov 30, 2004
3. Agreement – Downtown waterline improvement to BG Consultants for $71,982.04.
4. Bid – Clinton Pkwy Bike Path to Morgan Concrete for $43.95 a ft., totaling $27,029.
5. Bid – Biosold basin cover to CAS Construction for $339,900.
6. Bid Date – 23rd & Haskell Stormwater Mitigation Pond for Dec. 14, 2004.
7. Ordinance No. 7836 – 1st Read, rezone (Z-08-41-04) Western Hills from RS-1 to RS-E.
8. Ordinance No. 7834 – 2nd Read, rezone (Z-06-26-04) 2.6638 acres, A to PRD-2, W side of extension of Folks, S of W 6th.
9. Ordinance No. 7837 – 2nd Read, rezone (Z-08-33-04) 1.33 acres from PCD-2 with restrictions to PCD-2 new restrictions,
10. Ordinance No. 7838 – 2nd Read, Annex 36.960 acres, E 1338 Rd (N Minnesota) Shoemaker Tract) Lt 4.
11. Final Plat – (PF-09-27-04) Diamondhead 96.563 acres, S of W 6th & W of GWW.
12. Final Plat – (PF-09-31-04) St. Margaret’s Church Add., 10 acres, 5700 W 6th.
13. Final Plat – (PF-09-30-04) Westwood Hills 4th Plat, Lts 5-12, Balk 2, Westwood Hills 3rd Pat, 1.833 acres, N of Eisenhower & W of Wakarusa.
14. Final Plat – (PF-09-28-04) Apple Valley Sub No. 2, Lt 19B, Add NO. 11 in N Lawrence, .407 acres, 865 Elm.
15. Site Plan (SP-08-52-04) St. Margaret’s Episcopal Church, 5700 W 6th.
16. KS Development Finance Authority - $43 million for multi-disciplinary research facility at K.U.
17. Annex 13.3625 acres, N of Clinton Pkwy & N of Lake Pointe Dr.
18. City Manager’s Report.
19. Ecumenical Fellowship Inc., request for funding $5,000 for 20th Annual Martin Luther King Jr. Celebration.
20. CIP Projects- rate alternatives from Black & Veatch for water & sewer fund.
21. Ordinance No. 7841 – 1st Read, temp bldg moratorium for E Lawrence rail corridor plan.