January 23, 2007

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 Amyx presiding and members Highberger, Hack, Rundle, and Schauner present.

RECOGNITION/PROCLAMATION/PRESENTATION:

With Commission approval Mayor Amyx presented the Foundation Award to Kinedyne and the recognition of The Lawrence Association of Neighborhoods 20^th Anniversary on January 29, 2007.

CONSENT AGENDA

As part of the consent agenda, it was moved by Schauner, seconded by Hack, to approve the City Commission meeting minutes from January 9^th, 2007.  Motion carried unanimously.

As part of the consent agenda, it was moved by Schauner, seconded by Hack, to receive the Parks & Recreation Advisory Board meeting minutes of December 12^th, 2006.  Motion carried unanimously.

As part of the consent agenda, it was moved by Schauner, seconded by Hack, to approve claims to 475 vendors in the amount of $2,059,483.89 and payroll from January 7th, 2007, to January 20th, 2007, in the amount of $1,753,256.96.  Motion carried unanimously.

As part of the consent agenda, it was moved by Schauner, seconded by Hack, to approve the Drinking Establishment License to Free State Brewing Co., 636 Massachusetts; the Retail Liquor License to Glass House Liquor, 2301 Wakarusa Ste. C; and Taxi Cab Licenses to Ground Transportation, 301 Maple No. B; and Affordable Taxi, 952 North 3^rd.  Motion carried unanimously.

As part of the consent agenda, it was moved by Schauner, seconded by Hack, to concur with the recommendation of the Mayor and appoint Kevin Johnson to the Human Relations Commission; and reappoint Mike Porter to the Uniform Building Code Board of Appeals to a term which will expire November 30, 2009.  Motion carried unanimously.

As part of the consent agenda, it was moved by Schauner, seconded by Hack, to set bid date of February 20, 2007 for the Crack Seal Program.  Motion carried unanimously.                   (1)

As part of the consent agenda, it was moved by Schauner, seconded by Hack, to place on first reading Ordinance No. 8057, for special use permit (SUP-10-04-06), authorizing a special use permit for certain property located at 917 Delaware Street, Lawrence, KS.  Motion carried unanimously.                                                                                                                            (2)

Ordinance No. 8046, amending the public offense of illegal camping to include camping on public property within the CD zoning district, was read a second time.  As part of the consent agenda, it was moved by Schauner, seconded by Hack, to adopt the ordinance.  Motion carried unanimously.                                                                                                                     (3)

Ordinance No. 8060, establishing the office of the City Auditor, including responsibilities and duties of the office, was read a second time.  As part of the consent agenda, it was moved by Schauner, seconded by Hack, to adopt the ordinance.  Motion carried unanimously.                   (4)

Ordinance No. 8072, establishing “30-minute parking” on the north side of 9^th Street adjacent to 616 and 620 West 9^th and 846 Indiana, was read a second time.  As part of the consent agenda, it was moved by Schauner, seconded by Hack, to adopt the ordinance.  Motion carried unanimously.                                                                                                         (5)

As part of the consent agenda, it was moved by Schauner, seconded by Hack, to authorize the Historic Resources Commission review, on behalf of the City as property owner, of the proposed use of a portion of the City parking lot in the 800 block of Vermont Street for the redevelopment of the building at 123 West 8^th Street.  Motion carried unanimously.        (6)

As part of the consent agenda, it was moved by Schauner, seconded by Hack, to approve request from Bob Sanner, Lawrence Visitor’s Center, for the 2007 USA Cycling Collegiate Road Criterium.  Motion carried unanimously.                                                         (7)

Commissioner Schauner pulled from the consent agenda for a question the Engineering Services Agreement with Walter P. Moore Engineers for design repairs to Kaw Water Treatment Plant.

He asked if the City was looking at substantial additional repair costs for that facility.  He said if that building was one of the newer buildings, than he suspected the Utility Department might be looking at substantial repairs on the remainder of those buildings.

David Corliss, City Manager, said even a building built in 1954 was old.  He said staff had the engineering firm take a general look at the problem the City was experiencing.  As a result, they had identified the problem which turned out to be a more substantial issue with that building and they needed to design specifications for that repair work.  The general repair work and rehabilitation of that building was in the City’s Capital Improvement Plan for the Utilities Department, but this project was a substantial undertaking and they needed to proceed with the design. 

Commissioner Schauner said his concern was that a lot of money was being spent out of the Utility fund with the Wastewater Treatment Plant Facility and he was curious if those repairs would be more of a problem than anticipated.

Corliss said there were funds in the City’s Capital Improvement Plan for this type of work and staff frequently looked at the Capital Improvement Plan along with the budget to see where they were and compare projects that were underway that were in the actual plan.  Some of those costs for projects were up, some were down, and some projects staff was able to defer.  He said they were looking at a major project, the Wastewater Treatment Plant on the Wakarusa, and looking at the entire program more comprehensively.  He said when they had recommendations on the delivery system they would see additional analysis that might need to be done later this year on the rate study because of the cost changes.  He said this project was not one of those projects that staff thought was spiking that list.

Commissioner Schauner said when discussions were held with the County and School District, as they built new capital projects, he asked if they were putting back enough money to handle depreciation repairs over time in the City’s reserve budget whether it was sales tax reserve or utilities reserve and if they were fine, but if they were not, he would like to have some conversation about how they would deal with those as the next budget cycle approached.

Corliss said a depreciation schedule was not being followed and they were putting money away for projects in place.  He said it was fair to say what staff was trying to do was to have resources available that could meet the City’s capital needs in a timely manner.  He said he did not think they were doing that on streets, but staff was playing catch up now they knew the conditions of the streets and established a service level and finding the way to get resources at that service level.  He said those comments needed to be part of the continuing conversation about getting the right practices, so they had resources up to the City’s service standard level.  He said for some reason when the resources were chosen not to be at that location, then there needed to be frank conversations about the service log.

Mayor Amyx called for public comment.

After receiving no public comment, it was moved by Schauner, seconded by Highberger, to authorize the City Manager to amend the Engineering Services Agreement with Walter P. Moore Engineers to design repairs at the Kaw Water Treatment Plan, extending the contract delivery date until January 2009 to support a two year construction schedule and to increase the amount of the original contract by $98,170.  Motion carried unanimously.                   (8)

CITY MANAGER’S REPORT:

During the City Manager’s Report, David Corliss said Patty Ogle, Stormwater Quality Engineer, was working on creative practices to encourage the community to use rain garden design as an opportunity to improve storm water concerns.

Also, the Legislature was discussing Senate Bill 20 which would mandate the City’s participation in the Kansas One-Call System for Utility Operations.  He said it was staff’s opinion this was a bill in search of a problem and a vendor in search of more clients.  He said there was no need for the City of Lawrence to be in that program or for the City’s ratepayers to pay additional costs to be in that program.  He said staff and hopefully some senators would try to convince the delegation to harvest out of that bill.  He said some communities decided it was the best way to locate their facilities, but they were the City’s facilities.   

Vice Mayor Hack asked if staff should inform the public of those rain gardens as a way to handle storm water problems.  She said with a little bit of work those problems could be alleviated for a long time. 

Corliss said informing the public was a good idea.  He said there was a very strong and healthy gardening community already in Lawrence.  He said the City’s role was educating the public and would discuss with staff, any additional ideas to encourage those rain gardens.      (9)

REGULAR AGENDA ITEMS: 

Receive staff report on Williamsburg Drive special assessment benefit district issue.

Toni Wheeler, Interim Director of Legal Services, presented the staff report.  She said the Williamsburg Homeowners’ Association approached the City and requested that a benefit district be established to assist the Association in financing repairs for their private streets, Williamsburg Court and Williamsburg Place.  The work included replacing curbs and gutters and milling and overlaying the asphalt streets.  The City could include this work in their 2007 Mill and Overlay Program to help the association to obtain better pricing.  The City would not be a participant in the district and 100% of all costs for those repairs would be assessed to the property owners. 

In addition, the City would not acquire any new responsibilities for future maintenance.  All responsibility for future maintenance of those streets and the repair costs would remain with the Association and long term maintenance, including snow removal, would continue with the Association. The City would not incur any long term liabilities or assume any long term responsibilities with this benefit district. 

To establish a benefit district, the City needed to have a property interest in the property and to that end, the Association agreed to give the City an access easement for public use of those streets. 

Staff had attached a draft resolution for City Commission review setting a hearing date for the creation of the benefit district and staff would not proceed with that hearing date until they had all the access easement documents from the property owners.  In speaking with the representatives of the Association, staff understood the property owners were in support of this benefit district and would give the City the necessary easement.  She said staff was requesting City Commission authority to proceed with the creation of the benefit district. 

Mayor Amyx asked if Resolution 6694 would need to be placed on a future consent agenda and could not take action tonight.

Wheeler said staff would not recommend adopting that resolution because staff did not have the easement documents from the property owners which needed to be in place before proceeding with the resolution.

Mayor Amyx called for public comment. 

After receiving no public comment, Commissioner Highberger said he would like obtaining access easements as a part of the benefit district and would like that practiced from the beginning when dealing with any private streets.  He said he would like to have a conversation about the concept of private streets at some point.  He said he would support moving forward.

Moved by Hack, seconded by Highberger           , to direct staff to proceed with program as outlined.  Motion carried unanimously.                                                                                            (10)

Conduct public hearing on the proposed Neighborhood Revitalization Area Plan for the 800 block of Pennsylvania.

Mayor Amyx called a public hearing on the proposed Neighborhood Revitalization Area Plan for the 800 block of Pennsylvania.

David Corliss said John Miller, Staff Attorney, had received a revised Neighborhood Revitalization Area Plans and developer agreements from the developer.  He said staff did not have enough time to analyze that information and were not ready to proceed at this time.  He said the City Commission had this opportunity to close the hearing and set a new hearing date on February 6^th and staff would notify the Neighborhood Association. 

He said this was the City’s first NRA and it was important this plan was done correctly.  He said staff was using the tool a little bit differently than envisioned in that they were using the rebates back to the property owner as means for the property owner to pay for the public improvements.

Commissioner Schauner said he had some concern about the developer version in only permitting the City 30 days to respond to some of their inquiries for payment.  Also, he had a concern about the attorney’s fees provisions which he thought was not a very good result.  He said he clearly supported closing the hearing and moving forward.

Mayor Amyx called for public comment.

After receiving no public comment, it was moved by Highberger seconded by Schauner to close the public hearing.  Motion carried unanimously. 

Commissioner Rundle said it seemed there were significant differences.  He said the purpose reflected in the City draft was about the addition of renovation of new structures and the way it was phrased and the developer focused almost entirely on infrastructure.  He said he would be curious to know some of the background on those.

Corliss said both of those comments were good and staff would work on those.  He said staff would have some extensive discussions with the developer and more likely the developer’s attorney to see if they could achieve all of their goals together.

Commissioner Schauner asked if they had any sense about when the school district would take up this issue as to their participation as well as the County.

Corliss said one of the things they would need to talk about with the developer was that the County and school district’s participation was required, and a new issue that was entering into the discussion.  He said staff made it clear those public improvements required for that development were not part of the City’s Capital Budget this year because the funds were not budgeted.  He said this was the best vehicle staff could come up with as an incentive for the developer to proceed with the project.  He said staff could do their best, if directed, to try to get the County and school district to participate as partners.

Mayor Amyx said concerning the Neighborhood Revitalization Area Plan, he said it was the City’s program and not any particular developer or property owner’s responsibility.  He said it was the City’s responsibility to advocate for their plan to the school district and the County.

Corliss said he thought that it was in the City’s best interests to have the school district and County participate.  He said it would allow the developer to get those public improvements paid off sooner as opposed to the City being the only entity continuing to pay. 

Commissioner Schauner said as he understood the NRA’s in other cities, it was a rebate of new tax dollars generated by virtue of improvement in property and asked if that was the central agreement in that area plan or was that solely a rebate program based on paying back to the developer the cost of infrastructure creation over placement or improvement. 

Corliss said the City was saying they were not going to pay for the public improvements that were required public improvements for various phases of redevelopment.  He said the City’s development policy indicated that for those types of improvements the city-at-large did not pay for those improvements.  He said what could be done, because there would be fairly substantial improvements to property in that area which would add value, was the City would be willing to rebate back to the property owner, the increase in property taxes that would come from the eligible property in that area,  That is, the incremental value.  He said it would be 100% up to the dollar amount of the cost of the public improvements.  He said if all the public improvements cost $1 million, the City would be rebating back property taxes to the property owners until the entire amount was rebated, which would probably take some time.  He said they did not know how quickly the property was going to be redeveloped and did not know what the incremental assessed evaluation was going to be.  If the County and school district participated, those entities had more property taxes than the City and would be contributing as well and the rebate would occur quicker.  He said it was in the City’s financial interest for the County and school district to participate.  He said the way the developer viewed this issue, it was a requirement of their participation in the project, but if either the County or school district did not want to proceed or even the City decided they did not want to proceed, the agreement the developer required was something the City could not live with as opposed to what they had prepared, then the developer was left with approved land uses, but still the requirement for those public improvements.

Commissioner Schauner asked hypothetically, if the City entered into this agreement and improvements were made by the developer, but no new construction occurred on the west side of the street, therefore, there was no incremental increase in the value of that real property,  would payments or rebates be made to the developer under those facts or would the developer need to wait until there was property built enhancing and improving the value of that property before the developer was entitled to any rebated tax dollars.

Corliss said staff had phased the rebates based upon when certain public improvements would be installed.  He said for example, the re-bricking of Pennsylvania did not make any sense until the private improvements were made.  He said they wanted to do the work on the west side and contemporaneously do the re-bricking. If, for some reason, the work on the west side of Pennsylvania did not happen, then there would not be the public improvement cost to be rebated back and would not be the incremental increase on which to base any type of rebate. 

Commissioner Schauner asked if all of the infrastructure costs that were attached to both the City’s proposal and developer’s proposal would be incurred in phases 1 and 2 alone.

Corliss said the project would be phased so that the improvements of Delaware, the storm water that was associated was public improvements that would happen and then the Poehler Building and the building on the east side of Delaware would be improved.  He said those improvements would increase the property taxes on those properties and that rebate would be given back to help pay for those public improvements.

Commissioner Schauner said he wanted to be sure there was no circumstance in which the City would be rebating back monies each year that had not been collected. 

Corliss said staff would make sure that issue was very clear in the agreement.  He said that was one of the advantages how this was structured in that the City was only rebating taxes that were actually paid and were that incremental value.  He said if the improvements or the private development were not made, there were no rebates.  He said it was a little bit different from a TIF, as learned in the 900 Block of New Hampshire where the City was paying for the public improvements, parking garage, and the private development was not completed.  He said under this structure if there was no private improvement, there would not be enough of a rebate to pay back.  He said there was incentive for the developer to do the entire project.    

Commissioner Highberger asked if it allocated the risk and incentive to the developer.  

Corliss said he thought it did because if the developer did not complete the private development, then there was no public incentive.  The public incentive only occurred as they placed additional property improvements on the tax rolls.

Mayor Amyx said since this was the City’s first attempt at an NRA, he asked who would be the individual that would be in charge of managing the City’s interest.

Corliss said he and Miller would be working the project together along with working on the Economic Development Coordinator position which would be a team approach.  He said it was unfortunate that the City’s first use of the NRA was very complicated.  The NRA was not all that sophisticated of a tool when talking about a designated neighborhood.

Mayor Amyx asked if the rebate was handled through the County Treasurer or a City office.

Corliss said the rebate was handled by the City.  He said it would be part of an Inter-local Agreement in that if the County and School District do participate, they could work out arrangements as to who could administer all of that.  One way to convince the County and School to participate was for the City to handle all of the administrative work for those entities which he thought was only fair.                                             

Moved by Schauner, seconded by Highberger, to adopt Resolution No. 6699, establishing February 13, 2007 as the public hearing date for the Neighborhood Revitalization Plan                                                                                                                                             (11)

Receive staff implementation plan for Matrix Consulting Group study of development process.

David Corliss, City Manager, presented the staff report.  He said staff had been working on an implementation plan for the Matrix report received last November.  The memorandum provided the City Commission with background and a link to the report which had a number of recommendations.  One of the key recommendations staff wanted to discuss with the City Commission was the proposed merger of the Planning Department with the Neighborhood Resources Department.  

He said staff shared the report last year with Douglas County and the County Commission and they understood how it impacted the arrangement for the City/County Planning Department.  He said if the City Commission approved the merger of the two departments, staff would begin the recruitment of Planning and Development Services Director as soon as possible.  He said the County and City had been in discussions with the PAR Executive Search Firm Group and were ready to proceed with retaining that firm and moving as expeditiously as possible to begin recruitment of that position and hiring the Director of that merged department. 

The implementation plan hit some of the highlights that were found in the executive summary of the Matrix report.  One of the major recommendations of the report was to review and eventually acquire a new software program for the development process.  He said it would be a substantial undertaking because it was not only going to be the merger of two departments, but they wanted to be sure to receive the best software package available that allowed for an efficient use of those merged resources that would also be transparent to the public.  He said it was an important value and had seen a lot of value in the number of improvements made about getting information out to the public about the development process and wanted to make sure that was an important value.  He said it also needed to translate from cradle to grave or initial submittal of application through the certificate of occupancy and beyond that as far as the enforcement of zoning.  He said they needed to have a system that could go seamlessly throughout the development process.  He said to some extent the development process never ended because they had responsibilities of built structures around the community as well.  He said he read the portions of the report and staff and others were familiar with opportunities for replacement to the existing system.  He said the first initial step would be to draft a request for proposals where they would invite proposals from vendors and the analysis. The drafting of the RFP was going to be a major undertaking, but they would like to proceed and see if they could select a vendor.  He said funds were not budgeted this year for the software and he was not sure about the cost, but he would like to see if they could find a vendor to help.  

Vice Mayor Hack said during the meetings with staff and the Matrix firm, the conversation was if they should stay with H.T.E.  She said during that conversation, it was indicated the software could not be enhanced enough.

Debbie Van Saun, Assistant City Manager, said she thought there were enhancements to the existing system that could be explored concurrently with an RFP and an analysis of which was the better route was what she thought happened.  She said they had received information from Matrix on RFP’s that other cities had used which would help as well as some of those vendors that were available.  She said they had information, but they had not pulled that information together yet.

Corliss said proceeding with an RFP did not mean that HTE could not participate.

Vice Mayor Hack said the conversation was steering them toward saying it was okay, but these are better.

Corliss said he had a lot of confidence in Information System in they would be wise shepherds as far as telling them which path to go. He said Ron Hall, Information Systems Director, had a lot of experience and would be able to steer them well.  He said the merger of the departments was the next recommendation which there was a number of advantages outlined in the report.  He said there would not be a physical merger of the departments right now.  There were discussions about possible one stop shop locations and that idea was still being pursued.  He said the organization chart was the illustration of the merged departments as they happened, the day the Director walked into the department, but those departments were not physically together.  He said there would be a lot of opportunities for efficiencies whether it was the support staff once they were physically located together to be cross trained so if a citizen walked up and had a question about an addition to their home and it involved both planning issues and building code issues, that staff would be conversant with both of those issues.  He said the chart illustrated the size of the department and complexities of the different issues.  He said he did not think any of the functions were being diminished by the merger of the department.  Clearly, the Director would be someone involved in managing the projects and development process and would greatly rely on the staff placed under her or him to achieve those goals. 

He said there were some other important elements of the organizational chart as well.  One of the recommendations for the Matrix was the enhancement of the number of positions in the different departments, particularly in the Planning Department where they would be moving toward Senior Planner positions.  He said he had conversations with the City Commission about the importance of improving the transportation planning function. 

He said they had also done planning review management and probably one of the areas where they had not provided the level of service that other communities did that was expected of code enforcement.  He said they had done some of that and talked about additional personnel. 

He said $112,000 was placed in the 2007 Budget, in the general fund, for additional staff.  He said staff did not know what the final Matrix report was going to be, but in discussions with the consultant, the consultant indicated if the City was going to have a certain service level, the City would likely need additional resources. 

He said staff could recommend adding some key positions such as a Senior Transportation Planner, Senior Specialty Planner, and Plans Examiner.  On the plan review side, they had the Plan Review Manager, Tim Pinnick, and a Permit Technician support staff person, an individual that checked the validity of the plans, the completeness, some basic information and code knowledge, but not as extensive as Pinnick or the Plans Examiner position as well.  He said staff was recommending funding one of those positions.  He said the Matrix Report indicated they should have two of those positions, but they were only recommending one.  He said staff was able to use the resources in the general fund to be able to accomplish those three positions. 

He said staff had been in discussions with the County and were committed toward following through on some of the concerns the County had regarding the Planning Department specifically focused on the enforcement of the new subdivision regulations. 

He said also, there was a recommendation to adopt the international codes.  He said staff would place on the City Commission’s agenda, two options: 1) the adoption of the international codes; and, 2) adoption of the plumbing codes.  He said it was important that the Boards that had concerns about the pure adoption of “I” codes and the City Commission receive information about those issues.  He said staff would implement whatever the City Commission directed staff to do in that regard. 

Some of the other items in the report were the development of the home improvement center on the web page, conducting training sessions with community members, particularly the development community on the new zoning code and the new subdivision regulations was something they thought was wise and needed to continue.  He said there were a number of administrative recommendations as well in the report and staff planned on proceeding with implementation. 

Mayor Amyx said it seemed staff was laying out the organizational chart for the Planning Development Services Director and asked if it made sense to wait until that Director was on board. 

Corliss said he thought the Director was going to want to speak to about how the department was organized, but in order to recruit the best Director, he needed to let him or her know what areas of responsibility they were going to have and whether or not they needed to have some understanding of community development type issues and whether or not they had the ability to work in a blended department.  He said he was not saying there would not be some changes that Director might want to do.  He said they gave Directors pretty good latitude about how they wanted to organize their departments as Department Directors within resources the City had, consistent with Commission goals and recognizing they wanted stability in the organization for City employees.  He said there was likely to be some changes the Director might want, but they wanted to have the right managerial resources in place so the director could support the missions of the one department.  He said the Director was going to be very much a manager/liaison to the community, working closely with staff and others in the City Manager’s office on key items.  He said he thought it would largely reflect what they were going to do, but it was not cast in stone, and was something he wanted the City Commission to see.  He said he needed a general direction from the City Commission before he recruited a Department Director.

Mayor Amyx said he did not have a problem with that idea, but as they looked at organizational charts and the addition of new people, he asked, what kind of latitude would the director have in making changes.

Corliss said the Director would have the ability to comment about the administrative support, now that they had a blended department.  He said the Director might want to move that administrative support from that position to something else which was seen in many cases where there were vacancies.  He said there might be better ways to organize the department based on the person’s experience and one of the key things they would want from this person would be that they had the ability to work in a department of that size.  The decisions about how to allocate those positions were not crucial for the recruitment of the Director, other than if the City Commission had major opposition to wanting to have the Senior Planning positions.  He said he would like to have that discussion because he thought it was important to have that level of status for some of the planners so that those planners would be in a supervisory role over others in the department and could get the work done in that fashion. 

Mayor Amyx said he did not have any problem with the allocation of funds in the 2007 Budget, but rather than spending that money, he asked why they would not just hire the individual to be the Planning Development Director, use the organizational chart, and give that individual the flexibility on how that new chart should look like.

Corliss said the only disagreement was they had a report from Matrix Consultants that stated the City was not providing the level of service in some of the areas that other communities had expected and planning review was an example.  He said they were seeing some beneficiaries in that if they were able to review the plans thoroughly and completely, the inspectors would be in better shape in knowing what to inspect and ensure fidelity to the code and also ensure that other items had gone through the land use process.  He said that Plans Review Manager had a substantial undertaking and staff was seeing the benefits in having an additional position.  He said it was essentially an additional service and not so much volume driven.  He said he understood the comment about building permits were not at the level they had been in the past.  He said they did not have a Transportation Planner or Transportation Intern now. 

Mayor Amyx said the report was fine.  He said he wanted to know what order they needed to hire people.  He said there were not a whole lot of plans to take care of.

Corliss said the City was not at the volume that it had been in the past and thought that was fair to say.  He said that might change fairly rapidly.

Vice Mayor Hack said they were in deep trouble with the transportation issue and particularly since they were working with Traditional Neighborhood Design, the Southeast Area Plan, Farmland, and transportation issues, absent of a Transportation Planner.  She said she understood where he was going with the Plans Examiner, but the City Commission was told a number of times in those meetings the City were not providing a certain level of service. 

Mayor Amyx said he was asking why the City should be spending money at this time, when people were not knocking down the doors to do things.  He said this position needed to be filled and he was asking if there was a better way to fill the positions that were already on the organizational chart once that Director was hired.

Corliss said in his opinion, no.  He said the City needed a Transportation Planner at the level they were talking about and proceed with that expeditiously.

Mayor Amyx said they could go position by position, but he wanted to make sure the latitude was there for the new director to place individuals in those slots as he or she saw fit in that organization.

Corliss said they were getting at that issue and thought a good director was going to be able to organize the department appropriately to accomplish those goals.  He said regarding the City’s mandates for transportation planning, the City needed to get that position filled.  He said there was value in proceeding with the Senior Specialty Planner Position, given their emphasis in long range planning that was not going to continue.  He said they were talking about long term investments that were beyond the current building horizon.  He said he was looking at the Plan Review Manager position as to the level of service the City wanted to provide the community regarding reviewing those plans.  He said clearly, the number of inspections or plans was not going to be at the level it had been in the past.  He said he supported the recommendation he provided.

Commissioner Schauner asked how many new personnel the City would be adding to the now combined departments and of that number, how many were managers.  He said the only concern was there seemed to be a large number of managers.  He said the Plan Review Manager would manager two people and a Permit Technician and he wondered whether that manager-to-managed ratio was reasonable.  He said he did not have the technical expertise to know but just raised the question. 

He said he believed the candidates for the position for Planning and Development Services Director would like to have an organizational structure like this to at least look at and know what was at least currently thought about as required and needed to raise the City’s level of service.  He said once this organizational chart was adopted, he wondered whether institutional slowness would take over in making changes.  In other words, institutions did not move very quickly or make changes very quickly and he wanted to be sure that if the City Commission adopted this chart that changes could be made in something quicker than a fashion of turning a large ship.  He said he thought what the Mayor was trying to get at was what flexibility this new person would have in making changes to actually fit the conditions on the ground.

Mayor Amyx said his concern was that if they proceed with this plan, this plan was going to look just like this chart and they would be adding positions from that chart.  He said he did not think they were doing enough right now to justify the addition of some of those positions. 

Commissioner Schauner said that would be a concern as well.  He said he wanted it on the record that this could be what the Planning and Services Director positions looked at, with an understanding that based on needs on the ground, it might be too many people and might need to be adjusted to fit whatever conditions might exist in the building, planning, and inspection area. 

Mayor Amyx said he would stand with his support of the monies added to the 2007 Budget because the positions outlined, transportation, and all the things said were important.  He said his question was before they started adding some of those other positions, that he was not sure they needed at this point in this year, should they hire that Planning and Development Services Director first, and then redo the organizational chart.

Corliss said he did not think the Transportation Planner position could wait.  He said the City had a mandate to have that plan in place by August.  He said one of the key things to remember was that it was funded 80% by the federal government.  He said it had been approved in the City’s Transportation Plan that had to go through the federal government as to how the City would those allocate those resources and thought it was appropriate to proceed.  He said they were not filling the current Senior Planner position now on the organizational chart and not filling one of the two Plans Examiner positions on the chart because the City did not have the resources.  He said they were recognizing they wanted to provide a certain level of service to the community, saw a great value in merging the department, wanted to proceed to enhance the plan review function they saw as a value to the community, and wanted to do with the senior transportation side as well.  He said they were adding two general fund positions and one of those positions was funded 80%.

Commissioner Rundle said he did not know if this had been set in stone and clearly they were not going to have all those positions filled in one or two more budget cycles.  He said he was confident the City would continue growing and while the City might be in a slight downturn now, he expected things to turn up.  He said what the chart reflected was the City’s commitment to give to whoever came into that position this kind of broad staff support.  He said again, it was all about service levels and that director might want to make minor or major changes in the structure, but he thought this taken as a whole, was more than it reflected.  He said it was a comprehensive coordinated staffing that was going to deliver what they were trying to respond to which were all the concerns they heard from the development community.

Vice Mayor Hack said having sat through the meetings and with the expertise this group, they were the ones who were saying this City was behind the times, particularly with the Transportation Planner, but also with the Plans Examiner and the way it was organized, they needed to be more in tune with what worked with other communities.  She said she agreed with Commissioner Rundle in that they wanted to have things in place and the toolbox so they could do what they wanted to do which was make the whole process fair, efficient, predictable, smooth, not only for the person who was developing a monster development, but for someone who was putting a deck in the back yard and everyone in between.

Commissioner Highberger said he concurred with Commissioners Rundle and Vice Mayor Hack.  He said he especially thought they should move forward with the Transportation Planner because transportation was critical and there were jobs they needed to get done.

Mayor Amyx called for public comment.

Bobbie Flory, Lawrence Homebuilders Association, said she wanted to thank the City Commission for hiring the consultants and undertaking this development review process.  She said she participated in some of the focus groups, read the entire Matrix Report, and felt the report addressed their concerns and there were so many positive things in that report. 

The Lawrence Homebuilders’ Association had put together a study group and due to the holidays and vacations and now conflict of schedules, unfortunately they had not formalized a report to give back to the City Commission on areas they thought were especially good and areas they thought might have been missed.  She said she was not saying there was anything that was missing, but they had not gotten to that point yet and it would be coming soon. 

She said she appreciated in that Report, the strong desire in every department to provide transparency, online services, and increase the number of permits that would be provided over the counter.  She said it would take awhile to implement all the suggestions, but over time it was all adding up to something that could be really positive for not just the development community, but hopefully the City as well; they would have fewer headaches just like them. 

She said she could not appear before the Commission without throwing a plug in for the International Codes.  She said she thought they knew the Homeowners Association supported those codes and there would be more discussion about those codes in the future

The home improvement center was a fantastic idea as well as the community education on the codes.  She said codes were complicated.  She was a former Planning Commissioner and worked for the development community and would probably be in the front row of that education opportunity when those come up.  She said right now without making a formal statement on this plan, she wanted to let them know that so far everything looked really positive and appreciated the effort.  The one point she e-mailed the City Commission was regarding the Plans Examiner position and while she did not want to make too much of an issue over this, the point was it was not just a short economic downturn; it had been a trend.  Hopefully that trend in building would be turning around.  The national economists were talking about towards the end of 2007 things would start changing.  She said she was asking the City Commission to be cautious about adding more staff at this time for that reason.  She said the builders perceived the Neighborhood Resources level of services as excellent.  She said they worked closely with Victor Torres and Barry Walthall and they had done a tremendous job.  She said they have excellent inspectors and while they were hearing staff say that they were not providing the same level of service as far as what other communities were doing with Plans Examiners, but from their end, they were not seeing that and were seeing the level of service being very high and that was a compliment to Victor Torres and that was to the Building Inspection division. 

Hubbard Collingsworth, Lawrence, said regarding the City’s GIS mapping system that used Internet Explorer as the browser, he preferred Firefox.  He said he did not know how many people in the building community that might use a different browser to search the internet or use the City’s website, but that needed to be one of the considerations of upgrading the City’s computer systems.

Mayor Amyx asked Corliss if his recommendation in the RFP was for the software package; the merging of the Planning and Neighborhood Resources Department in a two step approach; proceed with the hiring of the new Planning Development Services Director; and, additional personnel which was the Senior Transportation Planner, the Senior Specialty Planner, and the Plans Examiner. 

He said the consideration of the ICC Building Codes would come before the City Commission in February.  He said staff would be developing the tool for the home improvement center webpage and the development of the training sessions.  He asked if the City Commission wanted to start hiring at this time.

Commissioner Schauner said the question was, of the $112,000 that was set aside in the 2007 Budget, what could be accomplished with that money with those recommendations the Mayor listed.

Corliss said the Senior Transportation Planner could be hired with the 80/20 federal dollars, the Senior Specialty Planner, and the Plans Examiner. 

Commissioner Schauner asked if the software issue would be a 2008 purchase.

Corliss said the software issue would be studied this year and staff might be able to make a selection this year, but would probably rely on 2008 money.

Commissioner Schauner asked if those three positions were budget neutral in respect to what was already budgeted for 2007.

Corliss said yes.

Mayor Amyx asked what the new Plans Examiner position would do.

Victor Torres, Director of Neighborhood Resources, said one of the issues that had not been discussed was Contractor Licensing.  He said there were over 1,850 licensed journeymen and contractors and the Plans Examining Section of their department oversaw that entire operation which included new licensing, license renewals, continuing education, monitoring any type of activity that occurred on insurance, and monitoring training and renewals.  He said when the City started with the Contractor Licensing Program, additional staff was not hired and that work was done by the current Permit Technician, Barry Walthall, and himself.  He said they were trying to move that role into the Plans Examining function because there would be room in that area if there was appropriate staff to handle that function.  He said there would be a lot of work for the Plans Examiner and that examiner would be able to review plans.  He said if they were going to adopt the new energy code, it would require additional plan review and if they going with the blended code, there would be more emphasis on the plan reviews because there was going to be more codes for staff to review.  The Permit Technician would see some of those plans and identify what was missing up front before staff even began the plan review.  He said whenever there was a plan submittal to the Planning Department and Neighborhood Resources, it was done concurrently and staff wanted to help the contractors and developers by providing that good level of service. 

Mayor Amyx asked how much time would be saved by adding this position.

Torres said he thought that they would be able to recognize that time saved on their permit review time which was a performance measurement and staff was working with HTE, at this time, to help the existing system to start and stop the clock of the plan review.  He said he thought that in the long run, staff should be able to turn around permits quicker and that information would be shared with the City Commission via the performance measurement data staff provided to the City Manager on a monthly basis.  He said staff would have that ability to look back at their performance.  

Commissioner Schauner asked what it was that a Plans Examiner could do that a Permit Technician could not do and what was the salary differential between those two positions.

Torres said he believed there was approximately a two pay grade difference between those two positions.

Commissioner Schauner asked what that grade level meant in dollars.

Torres said they were probably talking about 25 versus 35.

Commissioner Schauner asked if it was about $10,000.

Torres said he was just guessing and could give more accurate information after he looked up that information. 

Frank Reeb, Administrative Services Director, said it was probably a little higher than the number Victor referenced, but somewhere probably closer to $15,000.

Commissioner Schauner asked what a Plans Examiner did that a Permit Technician could not do.

Torres said a Permit Technician generally reviewed plans at the time of submittal and looked to see if the application was complete.  That person would have very limited knowledge on the code and that was essentially the level of responsibility for that Permit Technician was to make sure they had a complete submittal.  He said it was the same thing with contractor license applications and if the application was complete, a certificate of insurance, the actual document submitted to the office a complete package.  He said that was the area of responsibility for the Permit Technician.  He said as time went on, he hoped that person in that position would gain more experience in background, additional certification, building inspector certification, planning certification as well.  He said there were complete separate levels of certification required for Plans Review Managers and Plans Review specialists.  He said regarding Plans Examiners there were different types of certifications that needed to be obtained and they did a more complex comprehensive plan review to include structural, electrical, mechanical and planning portions of those plans which the Permit Technician had no idea of that level of detail or code requirement.

Commissioner Schauner asked if a Permit Technician based on his or her experience in that position would be a good candidate for additional on job training that could cause them to be promoted to a Plans Examiner as the need might come up.

Torres said absolutely.  He said the long term in the plan review section was that they had a Permit Technician, a Plans Examiner, a Senior Plans Examiner and a Plans Review Manager and there was a hierarchy and the intent was as they cross trained and if there were any vacancies, they could promote people to a higher level within their own department so they in essence reward them for their hard work in obtaining certifications and higher levels of knowledge.

Commissioner Schauner said what he would like to consider was put the Plans Examiners positions on the chart and not fill those positions, add an additional Permit Technician position and if demand improved, they could always provide additional training to a Permit Technician and promote that technician.  He said he was not sure the work was there at the moment to add the position and if they could save $15,000 out of the $112,000, it seemed like money well spent.

Vice Mayor Hack said she concurred with staff’s recommendation in terms of their expertise.  She said it was Torres’ department and he knew what was going on.  There were discussions about plan submittals and the difficulties with some of those submittals.  She said to save $15,000 and not go along with the staff recommendation and who were in the trenches did not make sense.  She said she would rather see the City Commission proceed.

Commissioner Rundle said he agreed with Vice Mayor Hack.  He said the department managers and management team were undertaking a major change, had looked at those issues long term, and knew what sequence things needed to occur.

Commissioner Highberger said he saw a little contradiction in what was trying to be accomplished.  One, was he agreed with the Mayor and shared the Mayor’s concern in that the new Department Director should have the freedom to reorganize the department to achieve his goals in an effective manner, yet they were also trying to rewrite the organizational chart.  He said he did not think they saw every change in the city and ought to really.  He said the City Commission did not see every change in the organizational chart in the City and did not think the Commission should.  He said he would be comfortable moving forward with the outline as recommended with the understanding the individual hired as the new director of that department would have reasonable leeway to organize the department in order to achieve the goals set out.

Commissioner Rundle said they could be responsive to any major changes in the economic cycles, budgets, and whatnot.  He said nothing would keep them from making adjustments whenever indicated. 

Reeb said he reviewed the pay plan and the difference in the maximums for those two positions was closer to $12,000.  He said it was $44,000 for the Permit Technician and $56,000 for the Plans Examiner.

Corliss said that was the maximum for each one of those positions. 

Mayor Amyx said he did not want anyone in the room to think that he had a bur on his tail about this issue.  He said he understood what the Plans Examiner position was about, but he did not see the work at this time to fill that position.  He said he would agree with the Transportation Planner and other recommendations in the Matrix Report, but he had to justify whether there was enough activity today to fill that position and he did not think there was enough activity.   

Commissioner Schauner said about when that head person was hired, when they anticipated having someone at work to undertake that position. 

Corliss said finalization of the Job Opportunity Bulletin would be in February and advertising would begin at the end of February and hopefully hire someone in April for the director position.  He said that was a top priority in filling the director positions. 

Commissioner Highberger said the Matrix Report identified areas where the permit turnaround times were not acceptable.  He said staff was taking a step to improve that process and was unsure why staff was being asked to step forward right now.  He said according to Torres’, other than plan screening functions there were other functions of the job such as things related to contractor licensing.  He said he was willing to trust management on this issue in terms of whether those people could be put to productive work right now and improve their service level.

Mayor Amyx asked about the economics at the time the Matrix Report was completed.

Commissioner Highberger said he suspected there was a little more housing activity then.

Mayor Amyx said there was going to be a motion made to adopt the recommendation from staff, but he would make a friendly motion not hire the Plans Examiner.  He said in the end, he would support the Report, but he did not see a reason, right now, to hire a position that did not make sense. 

Commissioner Schauner said if the motion passed and they hired all the positions recommended, he asked staff to help him understand the work load standard that would be applied in determining whether that much staff was needed.  He said if he was in private business, he would have a way of knowing whether they could continue to hire people or meet them as a productivity level and where he would continue to hire.  He asked how they would perform that function.

Vice Mayor Hack said that was what Matrix did in their report.

Commissioner Schauner asked if that was based on some hypothetical workload.

Mayor Amyx said it was based on the workload of the day.

Vice Mayor Hack said that was not two years ago.

Corliss said it was a year ago.

Commissioner Schauner said there was some baseline of expected production used by the Matrix folks in coming up with those recommendations and what he was asking was if that workload changed and if so, how did that influence the decision to retain that number of staff people in either department.

Corliss said he would walk through all three positions, but would primarily focus on the Plans Examiner.  He said he wanted a heightened level of service from transportation planning and in order to accomplish that, additional personnel was needed.  He said he was impressed with Matrix’s diagnosis of other community’s transportation planning organizations.  He said he was not satisfied the City or Planning Commission was getting the best advice about transportation planning.  He said there were some major items beyond the fact they had to complete the federal mandate of a new transportation before this summer.  He said they were looking beyond the work and look at the organization to see whether or not they needed that function and how that flowed with work demand.  He said they wanted to look both at the macro level, the large scale transportation needs relationship between mutual transportation issues, and the micro level.  He said when they get someone who wanted to put in a commercial facility in this community and another residential subdivision, how was it going to impact the area transportation network around that development.  He said they needed to have better data and better translators of the technical to the vernacular.  He said the best way to get that information was at the Senior Transportation Planner level and also the Transportation planner position and having those two professionals on that would meet the demands for the City and the unincorporated county the City was responsible for. 

The Senior Specialty Planner continued to show the City’s emphasis in long range planning.  He said they needed a manager and coordinator of that work and particularly needed additional assistance on some of the historic resources issues.  He said they discussed earlier about how they have added on their historic districts and those requirements and staff wanted to be timelier in responding to people who were asking those questions.  He said he thought that position was going to help along with other things and be there for that level of expertise.  He said it was a heightened level of service. 

He said similarly, he was looking at the additional Plans Examiner position as a heightened level of service.  He said it was simply not just responding to volume, but respond to the desire for more thoroughness of plan review, some of the complications of the plans as they anticipated they were going to add.  He said staff was getting by and doing the best job they could with the resources they had right now and would insist that whatever resources the City Commission gave staff, that staff provide with the appropriate level of service.  He said if the City Commission chose not to pursue any of these positions, he would insist that staff continue to aspire for that level of service.  He said he wanted the Commission to rest assured that if there were not that many homes to inspect or plans to review, they were not sitting around and waiting for the work to come in, but were off working on other items.  He said in slow times the Utilities Department did inventory of the existing systems.  He said one of the things the Code Enforcement staff was doing was helping with some of the other items such as sign code work and the work on accomplishing that rewrite an example.  He said the City Commission heard from Torres about the Plans Examiner position was that they were involved with the contractor licensing.  He said that was a new service enhancement which was a great value to the community and it showed the great workmanship staff had from that business community by their desire to step up from that licensing requirement and wanted to be sure it was on that side of the organization chart had that responsibility.  He said before they had a Plan Review Manager, they had building inspectors that reviewed the plans in-house and were also involved in the inspection.  He said there was a little bit of division of labor, but not a division of knowledge because they all had familiarity with the code.  He said he thought if they wanted that level of service, that it was desirable to have those personnel.  He said Matrix indicated the City needed two people, but they were only requesting one person.  He said if the choice was to wait on that position, staff would wait. 

Mayor Amyx said he appreciated the review that Corliss had provided and he thought Corliss did a good job of making his case, but with a comment that was made by Corliss he said staff should not be looking for things to do.

Corliss said he did not disagree.

Mayor Amyx said if that was the case, then they really had a problem.

Corliss said he did not disagree, but he wanted to ensure that if someone’s daily task was to go out and inspect new sanitary sewer installations and they did not have as many of them as they had in the past, the City’s commitment to that individual was that they were not going to not get the paycheck that they usually get because the City did not operate that way.  He said what they did was indicate there were other items on the list that were involved in that task such as going out and doing a better inventory of existing infrastructure and making sure they could get to that.  He said staff had a long list of things to do that were never accomplished. 

Commissioner Schauner said staff had discussed cross training and asked if he could get a Reader’s Digest version of how that cross training was going to take place.  He said he hoped, with cross trained personnel, it might not be necessary even if they see or ramp up a residential and commercial building, to add additional people.

Corliss said one of the things seen on the organization chart was the combo inspector.  He said that followed through on the department’s philosophy when there was a mechanical inspection needed and the mechanical inspector was at training or ill, they would have someone able to do that inspection.  He said on the plan review side, they were not simply individuals who had a limited area of certification they would have certification to help on a number of things across the department.  He said that had been Torres’ philosophy and had been their desire as well. 

Commissioner Schauner said he was trying to get at a way of flattening the chart even more as they moved forward with less differentiation between manager and combo inspector.  He said as they try to flatten out the organizational charts, he thought it saved money and eliminated the need for adding a lot of additional people which meant they could operate at a higher level of efficiency.  He said he was not making that observation with respect to those three positions, because he clearly supported a transportation manager and clearly something they needed to do, but moving across to plans examiners and others, it seemed more flattening might be possible and certainly something he would like the new planning director to look at when he or she was hired. 

Commissioner Rundle said he wished the City Commission achieved a higher level of enthusiasm as they were going forward, he thought they were going to be approving some positions.  He said he sat through the international code review process, the employee and citizen surveys, a task force that followed, and then the Matrix evaluation and through that there was room for City to be more thorough, to do more work.  He said he had no fear that staff was not going to have work to do, but it also struck him tonight that they were talking about residential development, yet they had ambitious goals to try to broaden the tax base.  He said he thought if they were going to base their decisions strictly on housing, they must be planning for failure in more important industrial type service.  He said he thought they needed to proceed and that those cautions were valid and did hope that they could proceed and plan for success in the economic development front and certainly had his fingers crossed the major economic trends nationally were going to be headed upward again.

Mayor Amyx said he would approve the plan recommended by staff, but with a friendly amendment not to include the Plan Examiner’s position. 

Commissioner Highberger said he understood those concerns, but this vote was verging close to micromanaging.   

Commissioner Schauner said he agreed with Commissioner Highberger’s comment regarding micromanaging, but he would like some conversation about flattening the organization in a way that added additional value to the money spent.  He said he would support the motion, but wanted a broader more macro discussion about the organizational chart, generally.   

Moved by Amyx, seconded by Schauner, to implement the plan recommended by staff, with the amendment of omitting the approval of the Plan Examiner’s position.  Aye:  Amyx and Schauner.  Nay:  Hack, Highberger, and Rundle.  Motion failed.

Moved by Rundle, seconded by Hack, to implement the plan as recommended by staff.  Motion carried unanimously.                                                                                            (12)

Receive staff report and recommendation to change the 457 Deferred Compensation Plan services provider from ICMA-RC to Diversified Investment Advisors.

Beth Frailey Krishtalka, Management Assistant, presented the staff report.  She said the 457 Plan was established in 1974, as an optional, supplemental retirement savings program for eligible employees.  Over the years, the eligibility had expanded and the plan was presently opened to all regular full and part-time employees, as well as extra-board employees. 

Once employees had enrolled in the Plan, those employees might elect to defer part of their compensation which was deposited in designated accounts.  Those employees could allocate their account assets among the investments options within the Plan’s portfolio.  Currently, they had approximately 37% of eligible employees actively participating in the Plan through payroll reduction contributions.  The City did not make employer contributions and all of the contributions in the Plan were deferred compensation. 

The current Plan assets exceeded $13.5 million, and those assets were invested across 44 investment funds within the Plan’s portfolio.  To date, all administrative, recordkeeping and investment services were provided by ICMA Retirement Corporation.

The current policies of the Administrative Services Department provided for regular review of the City’s wage and benefit programs and as Plan sponsor, the City had a fiduciary duty to exercise due diligence and reasonable care with respect to the Plan and its assets.   As a result of those factors, combined with a City commitment to Local 1596 of the IAFF, staff had conducted a first-time market survey of 457 provider services. 

            She said following a bid for consulting services, CBIZ Financial Solutions was hired by staff to provide the benefits and financial expertise needed to successfully evaluate the City’s proposals.  The Request for Proposals was issued on July 20 and received 11 proposals, one of which came from ICMA-RC and all those RFP’s were evaluated.

The RFP contained a detailed evaluation matrix and the matrix was used to evaluate the proposals across two broad sections of service categories.  The first section was administrative and recordkeeping services and the second area were investment services. She said based on the consultants’ recommendations and staff discussion, a maximum number of points was assigned to each criterion, then proposals were evaluated and scored, based on this matrix. 

            She said administrative and recordkeeping services criteria included such factors as implementation; operational and legislative compliance; statements and reports; internet, voice response and call center capabilities; quality control and the capacity to provide a retirement health care savings program. 

In terms of investment services criteria, factors included such performance factors as risk and rate of return, net rate of return and investment rating; fund management; and advice, modeling and education that would be part in parcel of the investment services.

In addition, the 2 broad categories of administrative and record keeping services and investment services were also evaluated based on each provider’s qualifications and expertise.  They also considered the related costs and expenses coupled with each proposal received. 

            She said frankly, this RFP process proved to be a learning experience. As staff read through the proposals, reviewed the consultants’ evaluations and researched various issues, staff became much more aware of the range of possible provider services relative to the City’s current arrangement, particularly in the area of investment support services.

After considerable evaluation and discussion involving the consultants, staff and the City’s Benefits Committee, staff determined the proposal submitted by Diversified Investment Advisors provided the City’s 457 Plan with significantly improved services within a competitive arrangement. 

Most importantly, in terms of investment support services, Diversified would help them improve the due diligence process.  Examples included assistance in creating an Investment Policy Statement for the first time, regular portfolio reviews on site with Diversified representatives, and the assumption of co-fiduciary responsibility for many of the investment funds they expected to be part of the new Plan portfolio.  She said a variety of education and enrollment strategies were being offered to increase active participation and improve participant investment allocations. 

In terms of administrative and recordkeeping services, Diversified’s proposal offered expanded communications and planned reporting capabilities, improved operational and legislative compliance and more comprehensive retirement savings reports for participants.

She said as it turned out, neither the current nor proposed ICMA-RC arrangement was competitive with Diversified’s proposal, particularly in the areas of investment services, enrollment and participant materials and in the operational components of its recordkeeping system.  Staff had met with ICMA-RC representatives to share information about the RFP process and staff’s report and recommendation.

Throughout the past months, staff had also gone to great lengths to inform City employees and Plan participants about the RFP process.  Materials and oral presentations were provided at each of the 19 Open Enrollment sessions held in at various City sites last October.  On December 8^th staff notified employees and participants about the proposed recommendation to change the plan provider from ICMA-RC to Diversified.  She said over the past 4 weeks, staff held 4 information meetings at various City sites providing more information and answering any questions.  Materials were also posted on the City’s intranet and mailed copies of materials to separated participants who were no longer within the City to receive those materials through other venues.    

Staff realized the transition to a new services provider and transfer of significant plan assets involved considerable planning and coordination among the current provider, ICMA-RC, their proposed new provider, Diversified, and Administrative Services and Finance Department staff. 

            She said as listed, the transition process would involve 6 somewhat overlapping phases: an information gathering phase, a planning phase, an implementation phase, a plan installation phase, a conversion phase, the phase during which the assets would actually go into a blackout period, a liquidation, wire transfer, mapping, and then deposit into Diversified accounts, and a post conversion phase where some of the final record keeping was done and the accounts were opened back up to the participants. 

She said should the City Commission decide to accept staff’s report and approve staff’s recommendation, those next steps were:

●          Appropriate authorizing resolutions need to be adopted;

●          Provide ICMA-RC with formal notice of our intent to terminate the current arrangement;

●          Enter into contract negotiations with Diversified so that they can establish a new provider arrangement with appropriate documentation; and

●          Start the conversion process.  Assuming the process was started in the next few weeks, staff anticipated the Plan assets would transfer to Diversified on or about May 1, with the possible exception of the Plan’s stable value PLUS Fund (Due to liquidity issues involving the guaranteed investment contracts held by this Fund, employer withdrawals may take up to 12 months to liquidate.)

In summary, and for the reasons stated in much greater detail in the Report, staff requested City Commission approval to terminate the existing arrangement with ICMA-RC and establish a new arrangement with Diversified.

Commissioner Schauner said in the liquidation of the existing funds from ICMA to Diversified, he asked if that meant assets currently held would be sold and invested in different products under Diversified’s management. 

            Frailey-Krishtalka said when moving through the process, staff would first develop the new plan portfolio.  Once that array of funds was established, Diversified staff would take a look at the current investment funds that the City’s participants had invested in and would do a fund mapping that would look at what those participants were currently invested and map over to what the equivalent fund would be within the new portfolio and provide that information to the participants who would have an option of making a reallocation within the current ICMA portfolio or have their funds mapped into what Diversified was proposing as an equivalent investment.  She said when the funds were liquidated and wire transferred to Diversified, they would be mapped into those new funds and once the accounts were open again for business, the participants would be able to make any reallocations they would like to do. 

Commissioner Schauner said he had two concerns.  He said the market was a volatile place to be and depending upon when he liquidated his asset, he might or might not suffer a loss whether it was a mutual fund or whatever it might be.  He asked if the participant would risk loss at liquidation.

            Frailey-Krishtalka said there was always the risk of market changes and impact on investments.  . 

            Cindy Orr, CBIZ Financial Solutions, said in the process of mapping they were liquidating those investments, however what they established was the new portfolio was in the same type of fund so if they were in a large cap growth fund, they had sold a large cap growth fund and purchased another large cap growth fund within a 24 hour period.  The likelihood of market change within that category and affecting negatively impacting a participant was minimal with the out of the market being only 24 hours. 

Commissioner Schauner asked what the cost was to the City employer or employees by selling those at liquidating assets and purchasing assets.  He asked if there was a sales charge or cost to anyone.

            Orr said absolutely not.  She said there were no sales charges to get out of ICMA and no loads or sales charges to get into Diversified.  The only current situation was with the Plus Fund which was the stable value fund where that money might not be able to move immediately.

Commissioner Schauner asked who assumed the cost of liquidating and purchasing.  He said there was a cost to somebody.

            Orr said she would say Diversified was assuming the expense of making the purchases on the front end when the money transferred.

Commissioner Schauner said none of the funds that ICMA offered had a back load that had to be consumed by somebody.

            Orr said no. 

David Corliss, City Manager, said he wanted to emphasize there was no City money involved.

Commissioner Schauner said as a City expense to the extent there was staff time expended on those processes

Orr said correct.

Commissioner Schauner asked if the net return on investment was projected to be better with Diversified than ICMA and if so, why.

            Orr said first and foremost, it was important to point out the current strategy with ICMA was approximately 45 funds from which participants might choose.  She said they had much research that indicated that tended to overwhelm a participant.  She said one of the tools that were available on the Diversified plan was not only to build a Diversified portfolio, selecting from all asset classes, etc, but also having pre-made portfolios and lifestyle funds.  She said when they did the initial RFP process and compared each asset class major categories and looked at performance, the Diversified portfolio outperformed the ICMA portfolio by quite a margin. 

Commissioner Schauner said they were talking about the benchmarks they were being measured against. He asked if there were any retirement distribution differences between ICMA and Diversified.  He said under the 457 plan there were certain limitations on what they could do with that money upon retirement or separation and asked if there were differences between the ICMA plan and Diversified Plan.

            Frailey-Krishtalka said no, they did not believe there were.  The distributions would be made in accordance with the plan document.  The City’s plan document had typically been a boiler plate document; they adopted the ICMA boiler plate document and staff would be working with Diversified and probably adopting something more or less along the same lines.  Those documents typically provided for all distributions that were permitted under law so the distribution options that were current participants would also be available after the transitions unless the distributions options were to be limited by law. 

Commissioner Schauner said there were two or three employees that had been with the City a long time, but assuming those employees were participants and was an employee for 25 to 35 years and might have a substantial stake in the 457 plan, he asked if those individuals would suffer no loss at liquidation and transfer at the threshold of their retirement.

            Frailey-Krishtalka said she supposed there could be a Black Monday on the day the transition would occur.  She said that seemed pretty unlikely, otherwise those employees were invested in the market with whatever those market investments were, would be subject to ebbs and flows on any day of any week during the year.

Commissioner Schauner asked if this proposal permitted certain employees that were in some window of retirement to retain their investments as they currently were and avoid any risk at all of suffering a loss.

            Frailey-Krishtalka said the City’s participants who terminated employment and were no longer employees would be able to take a distribution from the plan depending upon their age or tax consequences or they might want to roll over that money into an IRA.

Commissioner Schauner asked if a person could roll a 457 into a qualified document.

            Frailey-Krishtalka said they could roll it into an IRA and that way they could postpone distribution.

Commissioner Schauner said that was the difference between a not for profit 457 and a state or governmental 457.

Frailey-Krishtalka said those participants who were no longer employees had a couple of choices and decisions they could make even prior to this transition.  She said those employees could choose to start their distribution if they were in the appropriate age range and would not have any adverse income taxes to doing so or they could choose to take that money and roll it into an IRA and be in a tax sheltered arrangement, but would no longer need to be part of the transition.  She said staff looked into the possibility of possibly having part of the assets remain with the current provider and only moving over those assets of current employees and when they were in fact checking references and talking to people who had worked with Diversified and people who had gone through plan transitions they heard uniformly from everyone it would be a much better idea to make sure all of their plan assets moved at the same time not only because of the attenuated complications of multiple administrative services with multiple providers, but also more attenuated fiduciary responsibility to make sure everything was happening appropriately.  She said they would be moving over all assets and those people no longer employed would have certain choices they could make before the transition so they would not be required to move.

Commissioner Schauner said the net expense to the plan would be the same or less with Diversified than it was with ICMA. 

Frailey-Krishtalka said yes.

Commissioner Schauner asked if it would be the same or less.

            Orr said the net expense to the plan would be less.  Technically, at this time, participants were paying an asset management fee of 29 basis points in addition to the fund operating expenses of those in ICMA.  She said Diversified had provided a proposal that would not have any additional asset management fee and their average expense ratio was within 5 basis points of ICMA. 

Commissioner Schauner asked if it was 5 basis points higher.

Orr said she thought it was 4 basis points higher.  She said the weighted average expense ratio was 81 for ICMA versus 82 for Diversified.

Commissioner Schauner asked what weighting provided for in this case.

Orr said where the actual assets were invested currently using current demographics of the plan. 

Commissioner Schauner said he wanted to compliment Frailey-Krishtalka on her tremendous presentation.  He said within the same asset class, different funds performed differently and just to say they were going to map someone from one product into a different product within the same asset class did not mean it was an apples to apples trade.  He said he wanted to make sure the employees fully understood the risk of that transfer.  He said he could only take their word for it City employees understood the risk and were given that explanation.  He said he did not know what that risk would be on each account because it would be different for each person’s portfolio and if they were in a stable value fund, there was probably little or no risk.  He said if the employee was in something else with a large cap, small cap value, or whatever, then he sensed the employee would end up with more risk than was being suggested.  He said the ICMA fund family was not the same fund family as Diversified used and even within the same asset class, there would be different risk and different data. 

Frailey-Krishtalka said she could appreciate Commissioner Schauner’s concern.  She said staff’s plans were to have multiple on site meetings with Diversified representatives as well as multiple mailings to participants so that everyone was fully apprised of their choices, what the risks could be, and possible investment strategies they might want to consider depending on the risk tolerance.  She said staff expected to have multiple sessions where Diversified representatives would be able to meet with all the employees and participants could answer those types of questions. 

Commissioner Schauner said in some sense this was an employer sponsored plan and all accounts would be swept from ICMA to Diversified and employees might have the ability to put into a stable value front prior to transfer, but they would ultimately not have any opportunity to make an independent different decision than simply going to Diversified which was what he understood to be the proposal. 

Frailey-Krishtalka said correct, as plan sponsor, the decision was the City’s to determine the appropriate provider arrangement subject to City Commission direction. 

Bob Fischgrund, CBIZ Financial Services, said one of the things they tried to do was lower the risk of the asset classes, which was one of the things with the new funds that would lower the employee’s risk. 

Commissioner Schauner said a lifestyle model based on age and risk assessment they might want to change plan from Model A versus Model Q, depending how old a person was and how adventurous a person might be. 

Moved by Hack, seconded by Highberger           , to receive the report; direct staff to prepare the appropriate resolutions; provide notice of termination to ICMA-RC; commence contract negotiations with Diversified Investment Advisors; and initiate conversion activities with respect to a transfer of plan assets to occur on or about May 1, 2007.  Motion carried unanimously.  (13)

PUBLIC COMMENT:              None.

FUTURE AGENDA ITEMS:

02/06/2006	· Staff Recommendation on the Reuse of Old Fire Station No. 2 (Mass. Street) and Old Fire Station No. 4 (Grover Barn / Lawrence Avenue).   Staff is recommending that both facilities be kept in public use.
TBD	· Salvation Army Site Plan and Rezoning; · Retail Marketing Analysis Code provisions

                                                                                                                                       (14)

Mayor Amyx entertained a motion to recess the January 23^rd regular meeting and reconvene January 24^th, at 2:00 p.m., at which time the City Commission will recess into executive session for approximately two hours to discuss non-elected personnel matters with the justification for the executive session to keep confidential, non-elected personnel matters.   

Moved by Schauner, seconded by Hack, to recess the January 23^rd, 2007 meeting and reconvene 2:00 p.m. tomorrow.

The City Commission reconvened in regular session on January 24, 2007 in the City Commission meeting room with Mayor Amyx presiding and all Commissioners present. 

Mayor Amyx called for a motion to recess into executive session for approximately 2 hours to discuss non elected personnel matters.  The justification for the executive session is to keep confidential non elected personnel matters. 

It was then moved by Schauner, seconded by Hack to recess into executive session for approximately 2 hours to discuss non elected personnel matters.  Motion carried unanimously. 

The City Commission returned to regular session at 4:00 p.m. at which time it was moved by Schauner, seconded by Rundle to adjourn.  Motion carried unanimously. 

APPROVED                                                                _____________________________

Mike Amyx, Mayor

ATTEST:

___________________________________

Frank S. Reeb, City Clerk

CITY COMMISSION MEETING OF JANUARY 23, 2007

1. Bid Date Set- Feb 20, 2007 for Crack Seal Program.

2. Amend Engineering Services Agreement - Walter P. Moore Engineers for Kaw Plant, date changed to Jan 2009 for $98,170.

3. Ordinance No. 8057- 1^st Read, author SUP at 917 Delaware.

4. Ordinance No. 8046- 2^nd Read, amending public offense of illegal camping.

5. Ordinance No. 8060- 2^nd Read, establishing office of City Auditor.

6. Ordinance No. 8072- 2^nd Read, “30-Min Parking” N side of 9^th St. adj 616 and 620 W. 9^th & 846 Indiana.

7. Historic Resources Commission portion of parking lot, 800 Vermont, redevelopment of bldg at 123 W. 8^th.

8. Lawrence Visitors Ctr - Bob Sanner for 2007 USA Cycling Collegiate Road Criterium.

9. City Manager’s Report.

10. Benefit District - Williamsburg special assessment request.

11. Resolution No. 6699, public hearing date Feb 6, 2007 & public hearing discussion.

12. Implementation Plan - Matrix Consulting Group study of development process.

13. Change 457 Deferred Compensation Plan from IMCA-RC to Diversified Investment Advisors. 

14. Public Comment

15. Future Agenda Items.