March 6, 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 proclaimed Tuesday, March 6, 2007 as “Friends of the Park Day.” 

CONSENT AGENDA

As part of the consent agenda, it was moved by Schauner, seconded by Hack, to approve the City Commission meeting minutes from February 20 ^th, 2007.  Motion carried unanimously.

As part of the consent agenda, it was moved by Schauner, seconded by Hack, to receive the Mechanical Code Board of Appeals meeting minutes of December 6^th, 2006, and January 17^th, 2007; the Planning Commission meeting minutes of January 22^nd, 2007; and the Aviation Advisory Board meeting minutes of January 25^th, 2007.  Motion carried unanimously.

As part of the consent agenda, it was moved by Schauner, seconded by Hack, to approve claims to 408 vendors in the amount of $4,468,195.14 and payroll from February 18, 2007 to March 3, 2007 in the amount of $1,721,713.51.  Motion carried unanimously.

As part of the consent agenda, it was moved by Schauner, seconded by Hack to approve the Drinking Establishment License to J.B. Stout’s, 721 Wakarusa Drive; Marisco’s, 4821 West 6^th Street; and Yokohama Sushi, 1730 West 23^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 Doug Dillon to the Contractor Licensing Board as a Plumbing Board Representative, Kevin Chaney as a Mechanical Board Representative, Larry Frost as an Electrical Board Representative, all to terms which will expire December 31, 2009; appoint Barry Walthall to the Contractor Licensing Board as the Building Official; and reappoint Pete Easterwood to the Fire Code Board of Appeals, to a term which will expire January 31, 2010. Motion carried unanimously.

As part of the consent agenda, it was moved by Schauner, seconded by Hack to authorize the purchase of replacement uniform items for the Fire/Medical Department, from Alamar Uniforms and Jay’s Uniforms, for $40,000, (as noted in the table below):

Alamar Uniforms:	UNIFORMS, DAILY - Part 1	$14,752.00
Alamar Uniforms:	UNIFORMS, DRESS - Part 2	$2,456.00
Jay’s Uniform	UNIFORMS (SILK SCREENED/EMBROIDERED) - Part 3	$8,468.00
Jay’s Uniform:	BADGES & INSIGNIA - Part 4	$2,020.00
Alamar Uniforms:	UNIFORMS, FITNESS - Part 5	$1,120.00
Alamar Uniforms:	ACCESSORIES - Part 6	$11,184.00
Total		$40,000.00

Motion carried unanimously.                                                                                             (1)

Ordinance No. 8080, amending the franchise fee for Kaw Valley Electric Cooperative to construct, maintain, extend and operate its facilities for the purpose of supplying electrical services to the City of Lawrence, was read a second time.  As part of the consent agenda, it was moved by Schauner, seconded by Hack to adopt the ordinance.  Aye:  Amyx, Hack, Highberger, Rundle, and Schauner.   Nay: None.  Motion carried unanimously.           (2)

Ordinance No. 8081, adjusting the franchise fee by Southwestern Bell Telephone, L.P., d/b/a AT&T Kansas as a single adjustment to the fee rather than a phased adjustment, was read a second time.  As part of the consent agenda, it was moved by Schauner, seconded by Hack to adopt the ordinance.  Aye:  Amyx, Hack, Highberger, Rundle, and Schauner.   Nay: None.  Motion carried unanimously.                                                                                            (3)

As part of the consent agenda, it was moved by Schauner, seconded by Hack to adopt Resolution No. 6694, setting a public hearing date of March 27, 2007 for the creation of a special assessment benefit district for the improvement of Williamsburg Court and Williamsburg Place.  Motion carried unanimously.                                                                                                      (4)

As part of the consent agenda, it was moved by Schauner, seconded by Hack to authorize the Mayor to sign a release of mortgage for Neby Smart, 509 Lincoln.  Motion carried unanimously.                                                                                                                        (5)

As part of the consent agenda, it was moved by Schauner, seconded by Hack to authorize the City Manager to enter into negotiations with Parsons Brinkerhoff, transportation planning consultants, for the completion of the Long Range Transportation Plan (T2030).  Motion carried unanimously.                                                                                                               (6)

As part of the consent agenda, it was moved by Schauner, seconded by Hack to receive 2006 system development charge report.  Motion carried unanimously.                       (7)

            As part of the consent agenda, it was moved by Schauner, seconded by Hack to authorize the Mayor to execute Addendum to Contract for City Manager employment agreement.  Motion carried unanimously.                                                                                  (8)

As part of the consent agenda, it was moved by Schauner, seconded by Hack to receive draft final report from TischlerBise on the cost of growth study, scheduled for a future study session item. Motion carried unanimously.                                                                     (9)

Commissioner Schauner pulled from the consent agenda for a staff question Ordinance No. 8083, authorizing a Special Use Permit (SUP-07-01-06) for a 150’ T-Mobile monopole cellular tower and equipment shelter, located at 2206 East 23^rd Street and Ordinance No. 8084, authorizing a Special Use Permit (SUP-07-02-06) for a 150’ T-Mobile monopole cellular tower and equipment shelter, located at 3420 Bob Billings Parkway.  

Commissioner Schauner said from an engineering standpoint, he asked if it was possible to combine those towers or make those people who wanted to construct those towers, work together so there was not such a horizon of those towers.  He said he recognized those towers were necessary for the kind of mobile service people expected, but he asked if other communities did anything to make those vendors put their equipment on fewer towers.

David Corliss, City Manager, said he and Sheila Stogsdill, Acting Planning Director, discussed co-location requirements in the City’s zoning code regarding the issue of multiple uses on one tower.

Stogsdill said there was a requirement for co-location in that all towers constructed must be able to accommodate a total of at least 3 antenna array.  As part of an application for a new tower, part of what the applicant needed to provide was evidence they had attempted to co-locate on any towers that were within their search ring or any structures that might be able to accommodate antenna which was part of the application process before staff considered moving forward with a new tower.  She said from the number of meetings she sat through, typically there were going to be distance requirements because of the different frequencies that the wireless companies were using and that sometimes determined it needed to be within a certain area and there was nothing within that area that was available, which was why the applicant was proposing to construct new towers. 

Commissioner Schauner asked if Stogsdill knew if other communities had a more rigorous requirement than just an attempt to co-locate.  He said he was curious if other communities had a higher standard of an attempt to cooperate.

Stogsdill said it was not just an attempt to co-locate.  She said the applicant had the requirement to co-locate if it was available which had been part of the City Code for approximately 10 years and she knew that staff did not invent that part of the code. 

Commissioner Schauner said he was curious if this City’s code requirement was more restrictive or less restrictive than other cities that faced the same type of issues.

Stogsdill said this City’s code requirements were somewhat similar, although with the adoption of the development code this City had more rigorous requirements for review of those towers by an outside consultant firm just to make sure the City had that extra layer of review so those towers were not frivolously being built.   

Mayor Amyx asked if the application for the towers on East 23^rd was the tower the City Commission considered last summer or early fall in the southeast part of town where the fire station was located.

Stogsdill said she believed that was where that proposed tower was to be located, but she was not 100% positive.  She said there was discussion about trying to locate the tower on the Zarco property or on the City’s water tower.  She said she was not 100% positive if this was the same carrier. 

Mayor Amyx called for public comment.   

After receiving no public comment, Ordinance No. 8083, authorizing a Special Use Permit (SUP-07-01-06) for a 150’ T-Mobile monopole cellular tower and equipment shelter, located at 2206 E. 23^rd Street, was read a second time. As part of the consent agenda, it was moved by Schauner, seconded by Hack, to adopt the ordinance.  Aye:  Amyx, Hack, Highberger, Rundle, and Schauner.   Nay: None.  Motion carried unanimously.                       (10)

Ordinance No. 8084, authorizing a Special Use Permit (SUP-07-02-06) for a 150’ T-Mobile monopole cellular tower and equipment shelter, located at 3420 Bob Billings Parkways, was read a second time.  As part of the consent agenda, it was moved by Schauner, seconded by Hack to adopt the ordinance.  Aye:  Amyx, Hack, Highberger, Rundle, and Schauner.   Nay: None.  Motion carried unanimously.                                                          (11)

CITY MANAGER’S REPORT:

During the City Manager’s Report, David Corliss said the City Commission received statistical information concerning noise complaints which showed a reduction in some of those numbers.  He said staff thought those numbers reduced as a result of Police Department response to the enforcement of the noise ordinance.

Also during the City Manager’s Report, Corliss said this was the time of the season for pothole reporting.  He said the City had a website for online pothole reporting and staff encouraged the use of that website.  He said staff would be presenting information to the City Commission regarding the street maintenance program in the next few weeks as well. 

He said information was available concerning census estimates regarding the City practices; and finally, as a seasonal reminder, yard trimming collection was taking place.      (12)

REGULAR AGENDA ITEMS: 

Conduct public hearing on the request for a fifty-five percent (55%) property tax abatement from API Foils to expand the existing facility located in East Hills Business Park.  Receive recommendation from Public Incentive Review Committee.

David Corliss, City Manager, said API Foils was an existing business in the East Hills Business Park and had submitted a request for 55% tax abatement pursuant to the City’s policy.  He said a cost benefit analysis had been conducted by the University of Kansas Research Group, as well as a meeting of the Public Incentive Review Committee in which the City Commission had received a copy of those draft minutes. 

He said staff’s report looked at the provisions of Ordinance 7706 to determine whether or not the application complied with the following requirements:

1. Business is environmentally sound;

2. Business is small to medium size – to avoid a situation where the City becomes dependent upon one (1) industry, and to maintain the character of the community;

3. Average wages paid per employment category meet or exceed the average in the community as determined annually by the Kansas Department of Human Resources Wage Survey;

4. Wages paid are at or above, an amount which is equal to 130% of the federal poverty threshold for a family of three (3), as established by the United States Department of Health and Human Services (currently $10.73 per hour);

5. Business provides one of the following: 1) the availability of covered employees to obtain an employer-sponsored health insurance policy, pursuant to employer guidelines, in which case the employer provides a minimum of 70% of the cost of such policy; or 2) as an alternative to offering an employer-sponsored health insurance policy, the employer shall pay the covered employee a wage which is at least $1.50 per hour above the amount required in item 4; and,

6.   A combined positive cost: benefit ratio of 1:1.25 or greater over a 15 year period as determined by the City adopted econometric model.

He said staff would also be looking at the provisions of the amount of the tax abatement, the City shall use as a guideline the following basic schedule:

(A) fifty percent (50%) property tax abatement for ten years on investments less than $20 million in adjusted 2001 dollars;

(B) When the investment under consideration exceeds $20 million dollars in adjusted 2001 dollars the City Commission may consider a property tax abatement that exceeds fifty percent (50%);

(C) a company that has been on the Douglas County property tax rolls for at least three (3) years shall be eligible for an additional five percent (5%) tax abatement for a new project; and

(D) the governing body may vary the amount and duration of the abatement provided the net abatement to a business shall not reduce the net tax revenues as would be received pursuant to the above schedules to the local taxing units over ten (10) years.  It shall be the policy of the City to approve a tax abatement for the real property and personal property portion of a project if the project meets the requirements of this ordinance.

He said the policy also provided the applicant, if approved, would enter into a performance agreement and staff drafted an agreement to provide to API Foils for their review. He said the City’s policy indicated it was the policy of the City to approve the tax abatement for real property and personal property if the project met the requirements of the ordinance, which was staff’s review of this document. 

Corliss said this was the public hearing and appropriate notifications to the County and School District regarding this tax abatement request were completed.  He said staff also published this request for tax abatement as well. 

Mayor Amyx called a public hearing on the request for fifty-five percent property tax abatement from API Foils.

Beth Johnson, Vice President Lawrence Chamber of Commerce, said API Foils represented an established company with a good track record that was looking to expand in Lawrence to meet the needs of their industry.  This project was a perfect example of true economic development where the Chamber, and their partners, work together to increase the industrial space and add additional new jobs. 

She said API Foils would invest approximately $17 million dollars and add 31 new jobs.  She said this project not only met, but exceeded the requirements set forward in the tax abatement policy, and was critical as they competed with other communities.  She said the Chamber worked closely with API in the past and would continue to do so as their part of the partnership.  She encouraged the City Commission to continue to support API Foils in approving the tax abatement.

Bill Piercey, Vice President API Foils, said API Foils had been a member of the Lawrence community since 1995 and had a good relationship with the City of Lawrence.  He said their company was excited about the potential for expanding their operations in Lawrence.  He said if moving forward with the project, it would create new jobs and provide other economic benefits which would benefit the City of Lawrence in the process and would appreciate City Commission support.

Mayor Amyx called for public comment.    

Allen Ford, Lawrence, said he also appreciated the expansion of this business because Lawrence needed to increase its tax base, but he wished API Foils was not requesting a tax abatement.  He said he understood why API would request tax abatement and he wanted to make sure that any of his comments were not meant to be critical of API.  He said he was probably more critical of the City’s policy because the City’s policy somewhat begs companies to come and ask for that subsidy.  He said he would like a company like API Foils to join with companies like Hallmark and Pearson who provide many high quality jobs with no tax abatements. 

Ford said in 1995 the City gave API Foils about $1.6 million of tax abatements.  He said the City took an enormous risk when approving that tax abatement because this company did not buy the land and building, they only leased the land and building.  In fact, this company only bought the building and some equipment, and leased a lot of equipment from someone else.  He said nevertheless, the City gave API the abatement although the City was concerned about giving that abatement.  He said one of API’s officers made a comment that it would be folly to go anywhere else and made a commitment to stay in Lawrence.  He said oddly enough, that abatement was granted twice because the original abatement went to Astor, which sold the business in 1998.  He said when selling a business, the business would lose their tax abatement.  He said it was not until the year 2000 when realizing their company had lost the tax abatement and API came back and asked to continue the tax abatement.  He said the City certainly did not need to approve that tax abatement because API was already established in Lawrence. 

He said at that time, the officer stated API expected to continue to grow in Lawrence, which was exactly what API was doing and what the City wanted in the business development process, but at some point, the City might want companies to pay the full property tax.

Ford said for every $6 of benefit that API received, it cost the City approximately $10, which was a real poor, inefficient balance, which was part of tax abatement and not API’s fault.  He said that was the way tax abatements worked and why it was an incredibly inefficient program.  He said this was not a really big or small abatement, it was about $128,000 a year and that amount would change depending on mill levies and things of that nature and was about $77,000 for API which was a really small amount given the amount of expenditures this company had in an annual year, it was not a very significant amount.

He said there was also a question if the City was competing with another community.  He said he had only seen reference to one community that was Rahway, New Jersey.  He said Rahway was about 15 miles from Manhattan and he was pretty hard pressed to believe the City could not compete with Rahway, New Jersey, without giving a tax subsidy.  He said if the City Commission granted this abatement, most homeowners in Lawrence would be paying higher property taxes than what this company would be paying on its building expansion. 

Ford also said a major change in taxation had taken place Kansas.  He said the State eliminated the personal property tax on new business equipment.  He said that was a 100% tax abatement that applied to all businesses.  He said that was a pretty significant shift in the tax structure and the tax shift would go somewhere else, probably to homeowners.  He said it was very important to sit back and look at the policy.  He said in the past they were getting 50% on personal property and 50% on real property, and all of the sudden it was down to just real property. 

He said he read the discussion of the Administrative Review Committee and if the minutes reflected what happened in that meeting, the committee did a poor job of analyzing the application and thinking about that tax abatement.  He said it was clear that someone mentioned they did not have taxes on personal property, but hoped that some people would say that it would not make sense.  He said the City was trying to build the tax base and he got the impression the review committee would have given 100% tax abatement if it could be done. 

He said at this point, he did not think it would not be right, not to grant that abatement because the City led API to believe the City would grant an abatement.  He said he suggested scaling the abatement to 55% the first year, 50%; second, 45%; third, 40%, and fourth, 35%.  He said it made sense in a policy situation, but also made sense in terms of what the City had already done.   

Commissioner Schauner asked Ford to explain his point that homeowners would pay a higher tax rate than API Foils if API received 55% abatement.

Ford said the classification rate for a homeowner was 11.5%.  He said they paid lower property taxes than businesses, which was why the City wanted to get the businesses located in Lawrence to shift some property tax burden.  The classification for real property was 25%.  He said if they were going to pay 45%, then they would take 45% times 25%, which was a number less than 11.5%.

Commissioner Schauner said so then the effective tax rate on real property would be a lesser percentage than tax on a house.

Ford said that was correct.

Mayor Amyx asked what effect it had on the City’s tax base if a company did not grow their business.

Ford said the City would not have that addition to the property tax rolls.

Commissioner Schauner said he thought what he was hearing was that either the abatement policy ought to have a pro forma component and/or something other than a flat percentage of abatement over the life of the abatement.

Ford said he suggested not needing to have tax abatement at all, but if the City was granting tax abatements, then the City should work with what they had and scaling down would make more sense, especially if it was a significant effect on the decision making process. 

Joe Patterson, Lawrence, said he went to work for Astor Universal, the original company, in July of 1995 while it was still under construction.  He said he helped finish construction, helped start up that business and stayed with Astor until it became API Foils and left in April of 1999 when he retired from working.  He said it would be great if the City had not started those abatements, but the City did and it was part of doing business today.  He said the City Commission, as well as the people of Lawrence, could look back on things that had not transpired due to tax abatements.  He said having worked for that company since the beginning and knowing some of the people at that company it was a quality business with quality people and a quality product.  He said that company paid average or above average in wages and had good benefits.  He said he must point out that he also had a son that worked for API. 

Again, he said it was a very good business and the City needed to think about the possibility that Rahway, New Jersey, would take this plant to their location versus expansion in Lawrence.  He said API’s location was in the Midwest where distribution could be done in all four directions while in Rahway, New Jersey, they were basically going one direction or three.  He said they needed to think about keeping a quality company in the Lawrence area and helping that company become a bigger and better company for the City of Lawrence.

Gwen Klingenberg, Lawrence, said she understood there was a policy already in place when it came to tax abatements, but asked if the City could consider looking at the policy.  She said everyone was talking about how the tax burden was on this City’s residential property owners and not on the City’s commercial and industrial base.  She said the problem was the tax burden would stay on the property owners if the City kept giving tax abatements and this City would never get the companies to pay their fair share of taxes.  She said she knew there were people on low, medium, and fixed incomes, and if this City did not change the way they did their tax abatements, the City would be hurting the people of this community.  Again, she asked the City Commission to reconsider their policy. 

Jake Davis, Lawrence, said he agreed with others the tax abatement policy was in place and API qualified for abatement, but the City needed to reconsider that policy.  He said an important point in which the impact study did not address was the likelihood the firm would locate even without the abatement.  He said Rahway, New Jersey, was not the same city as Lawrence and had a completely different geographic location.  The average salary was $50,000 according to Rahway’s City’s website and had an 18% college graduation rate.  He said the tax abatement was not the main decision maker on whether or not API would come to Lawrence.  He said he hoped they did, but thought API was taking advantage of a policy the City had in place.  He said businesses were always going to take advantage of what this City had and suggested reconsidering the tax abatement policy. 

It was moved by Schauner, seconded by Highberger, to close the public hearing.  Motion carried unanimously.  

Mayor Amyx said the City Commission received, at a Public Incentive Review Committee meeting, tons of information.  He said the average pay was $34,200 with average benefits of $24,000. 

Corliss said that was correct. 

Mayor Amyx said that was the information provided by the Institute of Policy and Social Research and they had conducted the cost benefit analysis.  He said the wage floor calculated for 2007 was $10.73.  He said on the application the lowest proposed wage listed was $14.42. 

He said Ordinance No. 7706 discussed the property tax abatement might not be offered to every firm that was eligible under the state statutes, but the City’s property tax abatement had five targeted areas.  One targeted area was to encourage existing industry to expand and after the research was completed by the institute, encouraging existing industry was the area that helped with the abatement along with the numbers of the costs benefit analysis.  He said the increase in salaries and the fringe benefits had given them the 1:6 ratio and asked if that was correct.

Corliss said yes.  He said the proposed tax abatement, if approved, did not impact the existing building.  He said it was the expansion that would receive the tax abatement.  The existing facility remained on the tax rolls and information staff compiled regarding East Hills Business Park indicated API Foils, for 2006, paid $119,000 in property taxes which stayed on the tax rolls.  He said the abatement applied to the new building and there was no property tax on the machinery and equipment on the new acquisition. 

Commissioner Schauner said with the addition of the 100% tax abatement on the purchase of new equipment, as in this case, he asked if that was reason to look at this City’s abatement policy.  He said essentially it was a significant change from the way the State had done business in the past and that benefit went to API Foils and others and asked if that would be a reason to take another look at this City’s policy.

Corliss said it would be helpful to look at the tax abatement policy eventually after having a track record to see what the tax abatement policy was doing in this community.  The comment had been made that a lot of companies would be foolish to not ask for this tax abatement which might very well be the case, but the City was not seeing very many tax abatements.  He said if there were a large number of businesses taking advantage of this City’s tax abatement policy that might raise concerns about whether or not the City’s policy was providing the right value. 

He said the City was seeing a lot of employment center growth that might not have machinery and equipment.  He said the City’s largest private employer, Pearson Government Solutions, did not have machinery and equipment.  He said he did not know if with the new bioscience facility there would be a lot of machinery and equipment that would be an exemption anyway.  He said it would depend on the structure on what laboratory and structure of that facility.  He said he thought it would be good to look at that and see what terms there were in terms of the machinery and equipment.  He said that was good inducement and maybe the City needed to adjust the policy accordingly.  He said the City did not have a lot of track record on that issue and did not have very much experience.  He said the last tax abatement this commission approved was for Berry Plastics over a year ago.

Commissioner Schauner said he understood the final report of the last abatement was not made by API Foils with respect to investment and number of jobs created and so forth.

Corliss said he thought that was correct.  He said after the abatement had expired, API did not fill out the last form for informational purposes, but Frank Reeb, Administrative Services Director/City Clerk could provide more history.

Frank Reeb, City Clerk, said when the tax abatement reports were drafted, staff looked back to the previous year.  He said staff asked API Foils to provide information for the last year of their abatement.  He said API Foil’s past abatement expired December 31, 2005 and staff looked at the 2005 calendar year for the 2006 tax abatement report.  He said he sent a letter and questionnaire to the office in New Jersey asking that office to provide information on that last year.  He said he received a telephone call asking why they should provide that information.  He said he indicated 10 years worth of information would be helpful, but never received a response.  He said the nine years prior, staff received information but it was the last year staff did not get information.  He said staff received some valuation information from the County, but did not receive any job data or wage information from API Foils. 

Commissioner Schauner said for the 10^th year of the 10 year abatement, the performance level was unknown with respect to that prior abatement.

Reeb said staff did know the performance level with respect to the appraised value.

Commissioner Schauner said but not with respect to the number of jobs or wages.

Reeb said correct.

Corliss said one of the items now in the tax abatement policy was a performance agreement that required the applicant to give that information.  He said that agreement was not in the policy in the past, but most companies had a performance agreement.  He said staff did not pursue the discussion after it was raised at the Public Incentive Review Committee.  He said he did not know if it was an oversight on the City’s part, but it was an oversight on API’s as far as not filling out the information and staff did not pursue that information any further. 

Vice Mayor Hack said having sat through the meeting, Piercey addressed that he was unaware of the request and would be more than happy to provide that information if the City Commission decided they needed that  information.

Commissioner Rundle said he appreciated Ford being present because Ford was trying to educate the City Commission over a long period of time.  He said he personally agreed the City Commission needed to be very selective and did not think there was ever an abatement they had not agreed to.  He said he was hoping when the City hired their economic development professional on staff, the City could take a harder look and receive model research background.  He said he did not think the City’s analysis was as good as it could be.  He said they had a lot of research, but did not know if the analysis was present.  He said in connection with re-looking at the policy, it had been a goal to try and bring balance to the City’s tax base for 20 years at least.  He said he thought they needed to look at the performance of tax abatements over time.  He said if they had no affected ramp of bringing that balance up, he did not think the City was using that tool very wisely. 

Commissioner Highberger said he was not a big fan of tax abatements, but the City did have a tax abatement policy that was adopted by the City Commission.  He said for the sake of predictability and until the City Commission reviewed the policy, they needed to follow through.  He said he thought there was an expectation the company that put in a good report would get good cost benefit numbers and was going to have a very high chance of receiving an abatement.  He said he would prefer to move to approve the abatement.  He said he shared Commissioner Schauner’s concern about the new state policy on business equipment and that being a good reason to revisit the City’s policy to see what affect it had overall.  He said he moved to approve the PIRC report and grant the abatement.

Commissioner Schauner said it was clear when looking at the numbers, City policy, and what API was rightfully led to believe that an abatement would be granted.  He said he did not sense anyone on the Commission did not have any interest in not granting the abatement because API met the numbers and the numbers were strong and significantly better than some abatements seen in the past.  He said API had been a good employer and were people they liked to have in town because they were a clean industry and did a good job. 

He said the reason there had been discussion on his part tonight was as trying to move away from reliance on residential property tax, the more the City relied on property tax abatement, the less they were able to do that even if more jobs were brought to town.  He said he thought it was a good opportunity to have that discussion about modifying the tax abatement policy or not.  He said that was a policy question not being decided at this time, but it was an opportunity to begin to start that conversation.  He said the truth of the matter was the mantra that most businesses operated on was what was the best for their bottom line and he thought people had to believe that businesses were going to make that profit and would ensure the profit ability the best way they could, but the analysis was what he thought any legitimate business would perform to determine whether that company would stay in Lawrence or go somewhere else. 

He said he thought the entire Commission would say they were glad API Foils was staying and adding value to the community, but he thought there was a lot of discussion to be had about future tax abatements and the use of it.  He said if he heard Ford’s numbers correctly, he thought the expanded property would pay a property tax at a rate of 11.25%, which were 25 basis points lower than what residential properties pay.  He said there were obviously other benefits, which was why the cost benefit analysis worked, but he thought it was time to have another discussion. 

Vice Mayor Hack said she did not think that API Foils was led to believe they would be granted a tax abatement, but were led to believe the City would follow their policy and API Foils would be treated fairly, honestly, and straightforwardly.  She said she would disagree that any one company who applied for tax abatement would be led to believe they would be granted tax abatement. 

She said it would be helpful in reviewing the City’s policy and might be a good idea for those who were not part of the debate discussion that determined this policy to go back and look at the minutes and look at the kind of conversation that was headed by an incredibly diverse group of people led by then Mayor Jim Henry, who came to the conclusion the “but for clause” necessitated a crystal ball with it and did not seem to come with a crystal ball included in the package. 

She said the cost benefit analysis was an analysis.  She said there were pages of information they had gone through before the PIRC meeting.  She said one of the questions was whether or not, because the tax abatement was granted for 10 years and the policy extended to 15 years in looking at the cost benefit ratio, they were getting their dollars worth at 10 years. 

She said in addition to primary jobs that were coming in that API would bring to this community, one part of analysis was the secondary effect, and there was theory that this would not only bring the 24 employees, but because of the disposable income they would have an additional 14 jobs with an additional amount of disposable income. 

She said she did understand that it would be nice if the clock could be moved back and never have tax abatements as part of their economic development conversation, but it was part of that conversation.  She said to be in the economic development game to attract jobs to this community, this City had to play by the same rules that other communities did and for that reason she supported tax abatements and was pleased that API Foils not only wanted to be in Lawrence for 12 years, but wanted to expand in Lawrence.  

Commissioner Schauner said he was not suggesting that anyone promised API Foils an abatement, but if API met the criteria, they were eligible for the abatement.  He said API met the criteria which was why there was not a lot of discussion whether API Foils should receive the abatement or not.  He said it was a matter if this was an opportunity to revisit the concept of tax abatements.  He said if the City wanted an overhaul on their tax reliance on residential real estate, the City would need to have some discussion on how they would do that.  He said the discussion on the abatement process was one component. 

Commissioner Rundle said the cost benefit analysis was one analysis and thought there was more to an analysis.  He said the City needed to place it in the context of the current economic conditions.  He said this was a business decision as a public/private agreement related to business and the economic development coordinator should make sound business decisions based on the City’s own analysis.  He said he thought tax abatements had become automatic if a company met the cost benefit analysis. 

He said he told the Chamber that when the City did adopt the revised policy, that he was still not interested in tax abatements on jobs that paid $14.00 an hour because with Lawrence local economy, a person could not buy a house and other things at that income level. 

Mayor Amyx said he was glad to have API Foils in Lawrence, Kansas and asked that information be passed along to every one of the employees.  He said there might be a lot of things missed in the cost benefit analysis, but there were a number of things they could look at in the cost benefit analysis. 

He said he was probably the only person on this Commission that did not have the benefit of the discussion that went into making the current policy.  He said based on the information the Commission had at the time and in adopting Ordinance 7706, laid out what the framework would be for consideration on receiving a tax abatement.  He said conditions did change and there was a possibility the City Commission could constantly look at upgrading whatever policy that was in place. 

He said everything he had seen in the cost benefit analysis showed that API would be good for tax abatement and should be granted for the 31 new employees brought to this community. 

Commissioner Schauner said he did not want to leave this discussion with anyone believing this Commission did not strongly support the API Foils tax abatement request.  He said that was not the issue the Commission was having the disagreement on because the API numbers did fit both the 10 year and 15 year analysis and he did not want anyone to walk away from this meeting thinking this was a conversation for API Foils.  He said this was a conversation, from his perspective, as the City’s tax abatement policy as a broader topic.  He said clearly everyone was clearly pleased with API’s decision to stay in town and believed it was a good business.  He said he wanted to be clear on the City Commission’s position. 

Commissioner Highberger said he was glad API was expanding in Lawrence.  He said the City Commission was trying to be good stewards of public money and some people would think the Commission did a good job and some people would not.    

Moved by Hack, seconded by Schauner, to approve the request for a fifty-five percent tax abatement request from API Foils to expand the existing facility located in East Hills Business Park; and direct staff to prepare the necessary documents.  Motion carried unanimously.                                                                                                                                   (13)

The Mayor requested that staff draft information on the change in state law regarding exempting machinery and equipment and the effect it had on the City’s current policy.

Corliss said staff would prepare that information.

Consider the following items related to the re-establishment of a benefit district for the construction of Stoneridge Drive south and north of west 6^th Street.

a)  Consider adopting Resolution No. 6701, ordering the construction of public improvements on Stoneridge Drive, south of west 6^th Street, and Resolution No. 6702, ordering the construction of public improvements on Stoneridge Drive, north of west 6^th Street.

b)  Authorizing the City Manager to execute an agreement with Landplan Engineering for design services for the signalization of 6^th Street and Stoneridge Drive for $17,500.

Chuck Soules, Public Works Director, presented the staff report.  He said on February 6^th the Commission held a public hearing for the re-establishment of benefit districts for Stoneridge Drive due to increased costs and additional improvements.  At that time, the owner of Tract 1 requested the method of assessment be based on square footage which that method was seldom practiced.

In June 2006, the City addressed the same issue and determined the method of assessment for Stoneridge Drive should be based on front footage.  Currently, there was a valid benefit district for the construction for Stoneridge Drive, authorized by Resolution No. 6656.  Those benefit districts were being validated again due to those increased costs and additional improvements including signalization and a right turn lane.      

He said the City typically assessed straight streets using the front footage method because it was equitable for the City.

The proposed method of assessment for the Stoneridge Drive Benefit District was front footage based on the following reasons:

1.	Stoneridge Drive is a straight street.
2.	The east side and the west side both have equal frontage along the section of Stoneridge that is not complete.
3.	Similar method of assessment used for other streets completed or proposed in the area, i.e. Stoneridge Drive (north of 6^th Street), Overland Drive, George Williams Way, Harvard Road (from George Williams Way east).

He said the owner of Tract 1 (Ms. Collister) raised several questions as addressed in the staff memo.

He said staff recommended the front footage method of assessment for both benefit districts for two reasons. 1) Stoneridge Drive both on the north and south sides were straight streets and both benefit districts had equal front footage on the side of the street.   

Mayor Amyx asked about the letter from Chris Collister.  He said if the City Commission changed the method of assessment based on changing the size of the benefit district, as was suggested by Collister, he asked if the process needed to be restarted because the size of the benefit district would change.

Soules said he did not think so.

David Corliss, City Manager, said if the size of the benefit district was reduced, the process would not need to start over, but if the benefit district was enlarged, the process needed to start over.

Commissioner Highberger said concerning the northern tract, he was curious of the development status of the non identified upper right corridor and if so, when or how was that tract going to pay its share of the cost of the northern part of that road. 

Soules said Overland Drive was also an existing benefit district.  He said Tract 1 and this tract was sharing 50/50 equally on a front footage basis and the assessment was for Overland Drive. 

Commissioner Highberger asked how far north on Stoneridge were they assessing.

Soules said Stoneridge Drive was only going up to the intersection.  He said if it extended further than Tract 4 and the tract that was not identified, it would be assessed based on current policy.

Corliss said Stoneridge Drive did not go further than Overland Drive.  He said it would “T” into Overland Drive and then stop.  He said the City Commission had approved the final plat for Oregon Trail Addition, which was Tract 4 on this map.  He said Stoneridge Drive stopped at Overland Drive.

Corliss said it was up to the developer to allocate those costs and that was part of the continued concern.  The City had followed a practice of when the developer chose to spread their portion of a benefit district over a larger tract of property staff had allowed the developer to do that because it reduced the costs on the different properties.  He said the method of assessment was probably a preference and there was not any great Public Works science or Public Administration science behind choosing front footage or square footage because it was a matter or looking a specific situations and determining the fairness of the allocations. 

Mayor Amyx asked if the City Commission could determine the size of that benefit district.

Corliss said absolutely.  He said the key was the adjoining property to the improvement must be in the benefit district.

Mayor Amyx said the City Commission could include all of Tract 2 on the south side of 6^th Street, east side of Stoneridge Drive.

Corliss said yes, all of the area that was originally notified in that benefit district. 

Commissioner Schauner asked about the breakout of the assessment between Tract 1 and Tract 2, south of 6^th.  He asked about the difference between the assessments of Tract 1 and 2, front footage versus square footage.

Soules said the front footage was approximately 624 feet.  He said both tracts had equal frontage, which made it a 50/50 split.  He said those estimates were conservative.  If assessing on square footage only on Tract 1 and 2, Tract 2 was the larger, 602,000 square feet and Tract 1 was less than 400,000 square feet so it would be about a 60/40 split.  

Commissioner Schauner asked if Tract 1 participated in any other benefit district.

Soules said Tract 1 did not.  He said only the west half of that tract was included in the George Williams Way benefit district. 

Corliss said that tract was in the benefit district, but the City and property owner entered into a deferral agreement where the City paid the special assessments for George Williams Way, on the west half of tract 1, until such time, if ever, that that property was developed.

Mayor Amyx asked if that assessment on George Williams Way was based on front footage.

Soules said yes.  

Commissioner Schauner said the benefit district for Tracts 1 and 2 for the improvement of Stoneridge south of 6^th, the owner of tract 1 (Ms. Collister), was unable to resist participation in that benefit district because more than 51% of the property owners wanted to participate.  He asked if she had any choice to participate.

Corliss said Collister would not be able to successfully protest the benefit district.  He said one of the requirements was that she was a resident property owner but her residence was in Iowa.

Commissioner Schauner asked if she was a resident property owner, would she be able to resist successfully.

Corliss said she would need 51% of the area and 51% of the property owners.

Mayor Amyx said the square footage was if they continued to keep lot 2 on the east side of Stoneridge at the larger assessment, they would need to go to the right.

Commissioner Schauner asked if the remainder of Tract 2, under the second scenario, was in a benefit district of any kind.

Soules said no.  Stoneridge Drive was extended when that development went in at the developer’s cost.   

Corliss asked Soules if staff knew that information for a fact.  He said staff knew it was installed privately, but staff did not know how it was paid.  He asked Soules if that thinking was accurate because he wanted to be clear to the Commission.

Soules said that street was a City Street and staff inspected that street, but he did not know how it had been paid for.

Corliss said he did not know the financial arrangements.  He said all he knew was that the City did not pay for it. 

Commissioner Schauner said it was not a publicly financed extension of Stoneridge Drive. 

Corliss said that was correct.  He said all the streets south to Bob Billings Parkway had been privately installed City streets. 

Mayor Amyx said the reason it was set up this way was because the developer probably owned both sides of the street in that area and did not want to set up a benefit district.

Corliss said he was not trying to minimize the complexity, but wanted to be accurate on the information given.

Commissioner Highberger asked how the square footages broke out on the southern half of Tract 2.

Soules said it would be approximately 200,000 square feet. 

Mayor Amyx said in all fairness the City Commission should look at this benefit district from the standpoint of front footage, which made it 50/50 split or the other scenario making it the adjusted square footage in order to make all things equal in this particular case.  He suggested the Commission consider one of those two options because the amount of acreage in both areas was the same. 

Commissioner Rundle asked if the larger foot print was the applicant’s request originally.

Soules yes because that was how the benefit district was originally set up.

Commissioner Schauner asked if the benefit district was set up at the request of the owner of Tract 2.

Soules said yes.

Commissioner Schauner said his problem with street frontage was if he had more square feet across to spread the cost of the infrastructure, he made his property more affordable at the retail side as opposed to someone who had to shoulder more expense per square foot to make their project more saleable in the final analysis.  He said that was why he favored either a square footage approach or perhaps the modified version. 

Mayor Amyx said the only reason he suggested the modified approach was because to make the area all equal, the southern portion of lot 2, he was sure those lots had already paid for their share of what would have been an assessment on Stoneridge to the north on the west side of those properties.  He said he was sure those were pass through costs from that street improvement onto those lots.

Vice Mayor Hack said front footage was more consistent with the City’s policy, but was probably more true to the actual benefit of that road on those two tracts. 

Commissioner Schauner said the City Commission did not really know the financing of that privately installed public street.  He said those lots might or might not have paid for that improvement although it seemed logical those lots paid for that improvement, but he did not think it could be assumed. 

Commissioner Rundle said when deferring costs, he asked if there was interest added on those costs.

Corliss said he needed to check the agreement made with Collister.  He said he did not believe there was interest added and thought it was the total dollar amount.

Commissioner Rundle said when the applicant included the larger area there was an explicit statement in that he saw value accruing to that entire tract for the improvements to the intersection.  He said as he said before, it seemed the norm in the region was to assess based on square footage.  He said as Commissioner Schauner was pointing out, when either side was marketed and sold, if assessed on front footage with the original, larger parcel, his rough calculations made the parcel on the east pay $1.11 per square foot and on the west a $1.70 per square foot.  He said the fairest thing to do was to assess on square footage then whatever the square foot value, it would be shared by all the property and sold equally.

Commissioner Highberger said he thought everyone’s goal was to be fair.  He said he intended to ask the applicant the estimated cost of the southern portion of Stoneridge Drive that was already constructed.  He said if trying to be fair, they needed to take area already constructed into consideration.  He said if there was an impact fee system, they would not be having this argument because they would have already assessed a per square foot fee when the property was platted and it would be fair, but since they did not, he thought they were trying to be as fair as possible.  He said to be really fair, the Commission needed to consider the cost of the previously constructed street portion. 

Mayor Amyx said staff did a good job in providing the Commission with the additional information.  He said in all fairness, if taking the adjusted square footage proposal on Tract 2, and the assessment was based on square footage, he thought that was the fairest way because of the equal parcels of property.  He said if the Commission’s goal was to make sure the property owner of Tract 1 was treated fairly, he thought that was the best way. 

Commissioner Schauner said the deferral of the assessment on the western tract, Tract 1, would have a cost to the City since the project would be bid and built, and the City would be fronting that cost.  He said the lost opportunity cost for that construction did amount to something and frankly, he thought the fairest was no deferral for Collister because she was paid a significant amount of money by KDOT for taking of her property on the north, and a square footage assessment.  He said that honored the City’s obligation to the taxpayers because otherwise the City was carrying whatever the carrying costs were on whatever that construction cost shared by Tract 1.  He said it would not be insignificant because they did not know when that property would be sold. 

Soules said staff would have some costs on that portion of Stoneridge and there was city at large participation on both the north and south for additional widths at the intersection.

Commissioner Schauner said this would be in addition to city at large participation costs there would be other costs born by the lost opportunity to use the taxes not collected from Collister until that property was sold.  He said he thought that was going to be a significant figure. 

Corliss said he checked the agreement the City had with Collister on George Williams Way and interest was not charged, only the assessment amount. 

Commissioner Schauner said the ground was right for development because it was in a classic location to be developed.  He said for the City taxpayers to carry the additional debt at no cost to the borrower did not seem fair to the City.  He said the City had been focusing on what had been fair to Collister and thought there was another party the City should be taking into consideration and that was the general public paying the cost of the borrowed money plus the deferral of collecting those assessments. 

Mayor Amyx said he did not disagree with Commissioner Schauner’s comments, except for one issue was the owner of Tract 1, Collister property, had no way to opt out of this benefit district because of the ownership of that property.  He said Collister could not get out of that benefit district even if she wanted to.

Commissioner Schauner said he understood, but thought the Commission should be forthright because everyone needed to understand that was an inherent cost of development as a capital improvement project that was not on their capital improvement list in terms of that much expense to the City. 

Corliss said the City had done deferrals on George Williams Way and on Folks Road and the primary reason for those deferrals was because in all likelihood the City would force the transfer of that property to someone who would develop it.   

Commissioner Highberger said he understood the basis, but it was the policy of this Commission to give deference to property owners who were being forced into this situation of not wanting to develop yet.  He said there was a cost to the City, but was not willing to make a policy change without a discussion at this point.  He said this issue needed to be addressed directly.  He said he would be comfortable with either the square footage method with the lower portion of the property removed on the front footage, according to the policy.  He said more consistency would be shown if sticking with the front footage, but he could go either way.

Vice Mayor Hack said she would agree with Commissioner Highberger.  She said her preference was the front footage because that was consistent with City policy.  She said she would also entertain the idea of the square footage without the southern portion of Tract 2 removed. 

Soules said there were two separate benefit districts.  He said he had not heard any objections from the property owners to the north regarding the method of assessment.  He said there were two contracts for the design of Stoneridge, but those contracts were held up pending the re-establishment of those benefit districts because he did not think the current estimates would build those streets because of the increase in construction costs. 

Commissioner Schauner asked if the City Commission could defer part of that assessment, but not all of the assessment.

Corliss said the City Commission had complete discretion on whatever they wanted to do.

Commissioner Schauner said KDOT paid $213,000 for the northern slice of Tract 1.

Corliss said the City and KDOT paid compensation for land and access rights.

Commissioner Schauner said it was not as if this property owner, at least on the surface, was without some ability to participate currently in the cost of that project and the assessments.

Mayor Amyx said if taking the adjusted square footage method of assessment, he asked how much the assessment was on the Collister property.

Soules said the estimated cost was nearly $600,000.

Commissioner Schauner said that cost was approximately 11% of the City’s annual capital outlay debt ability without increasing the City’s mill levy for that purpose.

Corliss said that estimated amount of almost $600,000 was not due all at once, but paid out over 12 years.

Commissioner Schauner said that was $50,000 of debt a year.

Mayor Amyx asked if Commissioner Schauner was recommending a percentage deferral.

Commissioner Schauner said he would withdraw the offer because the Commission needed to have a different discussion about those deferrals.  He said on Folks Road where people were still living in those homes, a deferral made perfectly good sense, but that was not the case with this situation.  He said this was a different situation because it was a commercial highway as opposed to a residential collector and there was a significant difference in the deferral discussion between Folks and Stoneridge.  He said at this point, he was supportive of the adjusted square footage with the deferral.  He said in the very near future there should be discussion about changing that policy and taking some of that deferral burden off the City’s capital outlay debt.            

Mayor Amyx said staff recommended taking out the southern portion of Tract 2 from that benefit district, and asked if that southern portion would no longer be in the benefit district.

Soules said staff would need to change the description.

Commissioner Schauner asked if staff changed the description and reduced the size of the benefit district, would the owner of Tract 2 be able to create a benefit district without the approval of the owner of Tract 1.

Soules said that tract was slightly over the 51.6%.

Mayor Amyx said that took them to the northern edge of the improvement of Stoneridge coming from the south.

Corliss said the benefit district must include all the property immediately adjacent to the improved street.  However staff drew the property in Tract 2 it had to include all of that property. 

He said in order to defeat a special assessment benefit district, there needed to be 51% of the resident property owners of record to sign a petition approving it in 51% of the area.

Commissioner Rundle a policy was a definite course out of a set of alternatives.  He said there was not a policy and the Commission did whatever the applicant at the time wanted.  He said he still thought the square footage was ultimately the fairest.  If the applicant included the parcel on the lower half, he or she saw that it was gaining value. 

Moved by Amyx, seconded by Hack, to adopt an amended Resolution No. 6701, ordering the construction of public improvements on Stoneridge Drive, south of west 6^th Street the amendments being that the method of assessment to be on a square footage basis and with the boundaries (Tracts 1 and 2) adjusted as described in the staff report and to defer the assessment on Tract 1.  Aye: Amyx, Hack, and Highberger.  Nay: Rundle and Schauner.  Motion carried.                                                                                                                           (14)

Moved by Hack, seconded by Schauner, to adopt Resolution No. 6702, ordering the construction of public improvements on Stoneridge Drive, north of west 6^th Street.  Motion carried unanimously.                                                                                                                 (15)

Moved by Hack, seconded by Schauner, to authorize the City Manager to execute an agreement with Landplan Engineering for design services for the signalization of 6^th Street and Stoneridge Drive.  Motion carried unanimously.                                                                   (16)

Conduct a public hearing on the proposed Neighborhood Revitalization Area Plan for the 800 block of Pennsylvania and receive draft Developer Agreement. 

David Corliss, City Manager said there were questions about the changes in the development agreement.  He said this had been necessitated because there would need to be a number of public hearing dates in order to ensure they had the current revitalization area in the plan.  He said they also had the draft developer agreement.  The key to this project was the developer was installing the public improvements that were necessitated by this project and the city was agreeing to enter into a developer agreement whereby property taxes would be rebated back to the property owner up to the maximum amount of the cost of those improvements which were public improvements and private parking lot improvements.  He said one of the key issues in the developer agreement and revitalization area plan was the developer had advised the City in order for the project to proceed, the developer needed the financial participation from the county and school district as well for those property tax rebates which was tied into the agreement.    

John Miller, Staff Attorney, presented the staff report.  He said staff was working in good faith with the developer.  He said the hearing was to create the Neighborhood Revitalization Plan for the 8^th and Pennsylvania District.  He said the 720 East 9^th piece of property was added to the Neighborhood Revitalization Plan from what was originally on the agenda because the developer requested an expansion of the Neighborhood Revitalization Area.  The Neighborhood Revitalization Plan created a 20 year tax rebate and also created a cap limit on the amount of rebate that could be received as a result of the public and private infrastructure improvements. 

He said staff was still finishing the details on both the plan and agreement with the developer.  He said staff needed to clear up a couple of legal issues, most specifically with what happened in the developer agreement and plan if the developer sold the property during the rebate period.  If the developer wanted to develop the property and then wanted to sell property to other commercial business owners or residential owners, staff needed to know how to create a situation where there was still a cap and the rebate went to the developer and the amount of rebate never exceeded the maximum rebate cap, which was the public and private infrastructure.  He said that was the essential aspect of the developer agreement staff was still working with the developer on in terms of trying to create some language. 

The most recent version of the developer agreement could be broken down to four areas and there were aspects that had changed from the last time and staff needed to work on which one would be phased.  In some of the previous versions there were phases for the development of the project and staff had essentially taken out the phases at the request of the developer.  He said it did not affect the cap in any way, but it addressed how the developer might want to develop the project.  The financing section, staff modified the language with an agreement with the developer in terms of how financing would be done.  One of the big issues was the tax rebate covenant and how to work with that covenant in context of the state statute and Attorney General opinion that required the rebates to occur a certain way and how to deal with the partial assignment of rebate rights to the future auditors.  He said those were the five major areas staff was looking at and out of those areas, the tax rebate covenant and the assignment of rebate rights was probably the focus of the continued negotiation with the developer for the developer agreement. 

He said it was somewhat unique because it would create a new revitalization plan and program and would also have a developer agreement that would be part and partial.  He said staff needed to get the details of both of those still done and could conduct the hearing today, receive comment from the public and City Commission and take direction from the City Commission on how they wanted to adopt an ordinance adopting a plan.   

Mayor Amyx asked if the public and private improvements would be paid 100% by the developer. 

Miller said correct. 

Mayor Amyx said what was being discussed was the difference of the basis estimate and what the future amount would be.

Miller said there was no disagreement between staff and the developer in terms of the plan.  The plan essentially created a baseline and any improvements that increased the property valuation, a rebate came out of the increase in property valuation.  He said the baseline, as it was established at the time of the plan was approved by the City Commission did not change; the rebate came out of the increase.

Commissioner Schauner said one thing he noticed in reading the agreement was every time the number 30 days was used.  He said there was no consistency whether it was working days, business days or just days and it would make a lot of enforcement sense later if there was some common definition of those days. 

Miller said staff would make those corrections.

Commissioner Schauner said secondly, as he looked at the tax rebate covenant, if the developer sold this property at any time during the 20 year rebate period, the developer, after filing a covenant, would retain the rights to all the rebate taxes.
            Miller said yes.

Commissioner Schauner said irrespective of whether there might be some other agreement between the seller and the future purchaser of all or part of that property.  He asked if that was Miller’s understanding of the covenant.

Miller said yes. 

Commissioner Schauner said he was curious why a neighborhood revitalization fund was being established and asked if was necessary under this arrangement.

Miller said yes.

Commissioner Schauner asked if it was something needed.

Miller said the way the statute was set up, once the City Commission approved the plan, the Commission would be also approving a fund and as that property value increased, that money went to the fund and the rebates were then sent to the developer, the taxpayer, out of the fund.

Commissioner Schauner said the county would collect the taxes and then a rebate of whatever portion of those taxes collected were appropriately related to that incremental improvement.

Miller said yes. 

Commissioner Schauner said phasing had been an issue and obviously not all the work was going to be done in the same tax year.  He asked if they would be creating a headache for someone at the county level trying to figure out how much of the work had been done during a given taxable period so that they knew when the 20 year rebate period started.  He asked if they were creating a problem that would be difficult to sort out in the future.

Corliss said it was going to be a challenge because it was their first one.  He said it was a defined area.  The public improvements and private parking lot improvements would be clearly set out as to what those costs were.  He said staff would approve those costs that would give the maximum dollar amount. He said it was important to note there were still some additional approvals the project needed to go through as far as the multifamily on the west side of Pennsylvania and there was some additional property acquisition the developer had to undertake.  He said it was very likely to be a phased project.  He said Mr. Harris, the developer, could go into the likely elements as far as the project on the east side of Delaware extended the Poehler Building and some of the other buildings.  He said it would take time to get all of those projects under way. 

Commissioner Schauner said as he read the agreement, staff did not know today what the maximum cost of the development improvements were.  He asked if staff had an estimate of those costs.

Corliss said staff had an estimate of the public improvements and the parking lot improvements.

Commissioner Schauner asked if that public improvement participation level would be a fixed number at some point before this agreement was signed or would it be a number based on what was ultimately spent.

Corliss said it would be the latter.  He said any public improvements that were ever built, staff approved the contractor and the dollar amount because staff was out there inspecting.  He said there was not an opportunity to say they were going to put in a $100,000 storm sewer project and it was a $10 million storm sewer project. 

Commissioner Schauner said the bid received for re-bricking Mississippi or Ohio was significantly more and he was curious how that number comports with the City’s experience.

Corliss said that was a good point because staff did not know what that was going to be.  He said staff had a number of different estimates on the re-bricking and were looking at Ohio Street right now. 

Commissioner Schauner said he would like to know with more precision about the ultimate rebate exposure over a 20 year period. 

Commissioner Highberger said the program right now was planning a 20 year cap.  He said he realized that was designed to be long enough to cover everything.  He said based on the numbers now, was there an expected pay off time if all the tax amenities participated.

Miller said he believed the developer would probably have more knowledge as to what that pay off period was in terms of the cost of the public/private infrastructure and how long that might take to get the rebate.  He said he knew that was part of the discussion staff had with the developer and one of the reasons the developer requested the rebate period to be extended from the 10 year to the 20 year period was because they needed the opportunity to be able to recover those costs as part of the rebate.  He said the developer might have more information regarding the pay off timeframe than staff.

Mayor Amyx said if the City Commission directed staff to prepare that neighborhood revitalization plan and program, he asked if that program included the hard cost and figures that Commissioner Schauner requested and would the Commission have a better idea of what those costs were going to be and what the improvements would cost.

Miller said there was still going to be an estimate.  He said as late as Thursday last week staff was discussing with the developer what those costs were going to be and trying to get the estimates down.  He said that had taken awhile, but it was still going to be an estimate.  He said there was a section in the developer agreement that would be required as part of the plan that discussed the certification of expenditures.  He said when the developer submitted expenditures, soon staff would have an opportunity to review those expenditures and inspect the work to make sure those costs were reasonable and rationally related to the project at hand. 

Commissioner Schauner said as one of the City’s former Commissioners stated: “it costs what it costs” and if $120 a square yard was off by $120 and really cost $250 a square yard to re-brick that street, doubling the price to half a million instead of $243,000, he asked what authority did the Commission have under the certificate completion argument to say they were not going to pay for it because it was substantially greater than the Commission’s expectation and estimate.

Corliss said that was the trade off.  He said there were earlier discussions about the “but for” issues and whether or not an inducement would get this type of project underway or not.  He said unlike tax abatements where there was a lengthy history, there was not much of a history on revitalization and inducements and those kinds of things.  He said this was a unique project and the developer should get a lot of credit for the tenacity of staying with this project to see it this far.  He said it had not happened without the inducement and they also knew to some extent, revitalization projects could be more expensive.  He said the City did not have the resources in the budget this year to build those streets.  He said the City’s development policy indicated not to participate in those types of improvements.  He said the issue was how to provide the inducement and incentive and this was the best vehicle to be found.  He said Mr. Maxwell a person who practiced in this area of the law, in two different states, pointed out the City was using a tool that was not really meant for this type of inducement.  He said it could have been tax increment financing, but that still would required the City to issue bonds or at least been involved in some of that obligation, even if it was pay as you go.  He said this was an opportunity to provide an inducement to increase the value of the property because if the property value was not increased, there would be no rebate.  He said if the developer did not make the property more valuable by restoring the Poehler Building and doing some of the other things the developer indicated, there would not be any increment to rebate back.  He said it would cost whatever that brick street would be, but the argument would be the developer would not have constructed that brick street or other improvements on the east or west side of Pennsylvania except for the fact the developer knew the property taxes would be increased because of the improvements to that block.  He said staff wanted to make it a successful project and also protected the public interest.  He said staff thought there were vehicles for checking the dollar amount of the projects, having a cap on the total costs, having the cost over time, and the County and School District would be participating as well. 

Korb Maxwell, Attorney for Polsinell Shalton Flanigan Suelhaus PC, said the NRA was a fairly complicated process and not only new to the City of Lawrence, but new in the way it was being used.  He said it had taken all of them quite a bit of time to get to this point to have the document available at this time.  He said their firm felt confident about the document and with a little more tweaking, the document would be in a final form that was ready to move forward through this Commission and hopefully get the approval of the county and school board and allow this project to kick off. 

The document represented a public/private partnership between the City and the developer where both would be entering into an agreement that would assist them in moving forward with this project. 

He said on the developer’s side, they would construct the infrastructure, but the benefit was they were provided a long term financing mechanism through those tax rebates, over time, to pay for the entire infrastructure being built.  He said they had gone through the zoning process and the historic approval process, but getting this development agreement completed and the neighborhood revitalization plan in place was the last hurdle to this project moving forward. 

He said on the City side, the real benefit was they were out building the public infrastructure on the private dollar with the ability of no outlays from the City’s general fund or debt being issued from the Capital Improvement Plan or other mechanisms to end up paying for that infrastructure.  He said he wanted to highlight some of the infrastructure being built was not just specific infrastructure that benefited their structure, but streets, sewers and storm sewers that also benefited the deferred maintenance cost for the East Lawrence Neighborhood as a whole that had not had City investment. 

He said the project would bring a diversity of housing stock.  He said some of the housing proposed with the plan was different than some things in Lawrence at this time which would be a true benefit to the community.  He said as discussed several times through the zoning process they were committed to a long term affordable housing component which was important to the neighborhood and city, and this mechanism allowed financing to make this project happen. 

He said lastly, he thought there was a historic revitalization component, but they were providing a blue print for future projects, revitalization, and reinvestment in neighborhoods.

He said in the certificate of expenditure approval process when looking at their bills, construction invoices, lien waivers, all of those different pieces a person would be able to see exactly what all the infrastructure costs were and make sure they were protecting the public and was 100% above board.  He said another point to put on their side of why it did not make sense to over pay or over build or spend more was that there was no provision in the document, at this time, for construction interest.  He said they were privately loaning and financing those dollars to pay for this project.  He said if it cost $100,000, they were going to pay interest because the City was paying over a 20 year period.  If it cost $1 million, they were paying even more interest and not being reimbursed by this program.  He said they had every incentive to build it right, but build it as cheap as they possibly could just as they would in any other sort of private program.  He said they thought there was significant oversight that had been put by City staff into the document, oversight they could live with and were prepared to live with for the benefit of this program, but made it a workable program for everyone.

He said there were a few final points to work out, which was really working the documents and general intent seen, through a few of the last legal hurdles in implementing that plan.  He said he was confident they would be able to do that and be able to bring this for final approval and the ordinance to be approved by the City and be able to move through this process. 

Commissioner Highberger said given the current cost estimates and assuming all the other bodies participate, he asked about the estimated payback time.

Maxwell said, currently, they had it projected at about 16 – 17 years.  The estimate on this was very difficult because they were truly looking at a crystal ball in the appraised value, what rental rates they would receive, how many times units would sell and resell so the numbers continued to appreciate.  He said it was a pretty conservative estimate of looking at very limited growth factor like a 1- 2% growth factors in ad valorem revenues a year.  He said phasing in this project they would be able to pay the project off in 16 – 17 years.

Commissioner Highberger said if the project was wildly successful and everyone loved the project, the valuations would go up a lot faster allowing the project to be paid off faster.

Maxwell said they could.  He said on the other side of it, there was the limit of what they spent and even if they spent more, they were only in it for 20 years.

David Holroyd, Lawrence, said this project was called the Neighborhood Revitalization Act and he did not understand why they did not adopt that act within a defined neighborhood.  He said there were five target neighborhoods in the City and on that basis, brought federal money into Lawrence.  He said those neighborhoods were target neighborhoods for over a quarter of a century and asked how that could be.  The City Commission had the perfect tool and suggested the Commission implement that act to include the five target neighborhoods in which he would guarantee private funding for building.  He said the state did not intend to have it operate this way and it worked best with new construction.  He said if the Commission wanted to revitalize the 19^th and Haskell shopping center, the best thing to do would be to demolish that shopping center.  He said the developer then would be able to build a new shopping center.  He said 10 years was as long as it should go because by then, the shopping center was getting old anyway, but the County would raise the valuation.  He said before the City Commission proceeded with the project, he suggested the Commission consider adopting the NRA for the five target neighborhoods.  He said they could, in theory, extend NRA throughout the city because federal money had been used for 25 years fixing up houses in Alvamar and all over town so the entire town was targeted.  He said the Neighborhood Revitalization Act was the tool to revitalize those five targeted neighborhoods.

Mayor Amyx said the neighborhood revitalization plan was something the City Commission planned on looking at, for future projects, in other neighborhoods. 

Holroyd said he understood, but suggested the City Commission adopt the act to have it available for a specific neighborhood.  He said the City Commission was tinkering with something that down the road, it would be a problem.

Mayor Amyx asked if Holroyd had a certain area, in mind, for the City Commission to address next.

Holroyd said he could think of plenty of areas and would be glad to make suggestions.  He said if the Commission wanted to create some areas that would bring in construction and housing; he said he knew where those areas were.  He said the Commission was approaching this issue wrong.  He said he was not the brightest bulb in the chandelier, but he had two parents that were. 

K.T. Walsh, Lawrence, said she looked forward to the NRA being used as a tool in her neighborhood and other neighborhoods across the city and was interested to watch how that tool would work. She asked who decided the valuation and did they rely on the County Appraiser.  She said that was what they used as criteria.  She asked Maxwell if he would explain issues concerning phasing, stacking up, where they would start, and the timeline.

Phil Collison, Lawrence, said he was also excited about this tool and believed the Revitalization Act would be used in many of the neighborhoods.  He said in looking at Phase 1 through Phase 5, he wondered if there was a way to tie those five phases together so that if Phase 1 was built, and in the future something happened and Phase 5 never was built, could there be something that stated at the end of the 5 phases being built, the increments increased or some type of negative sanction so there would be less reward.  He said Phase 1 was outside of the original scope of the project and was a last minute entry, which was where his concern was because it was a commercial facility and it would be the first one that went in and would have the least benefit to the neighborhood, at large, in his opinion.  He said Maxwell stated they would build it as cheaply as possible and hoped they built it as cost effectively as possible. 

Maxwell said they were going to build it as cost effectively as possible and it was the infrastructure and roads, not the project as a whole as the vertical construction as was referred to.  He said in reference to Collison’s concern about the idea of having an incentive if they get the project completed or a penalty if the project was not completed on time had been discussed with staff and there were a couple problems. 

One problem was if looking at all of the land area included in this project at this time, there was some of the land area that was not owned by entities with which Harris was associated.  The development plan was to ultimately acquire those properties and be able to bring forward the vision that was in the guidelines, but right now they did not own the property and the acquisition of that property had been difficult.  He said it would be very hard to premise the whole development around allowing them to acquire that property when possibly just by private negotiations.  He said he could not represent they would absolutely have that property.  He said it was one of those things that were in the control of a third party that they did not have control of right now so it would be very hard to tie a kicker or penalty in this project when some of the components were outside their control. 

He said the other problem was 720 East 9^th, the freight building, the building on the east side of Delaware was the engine.  He said that building was the financial engine that ended up driving the rebates that then allowed this infrastructure to be repaid.  He said without that engine, 720 East 9^th, the term would definitely be all the way up to the full 20 years and would not be able to get the pay back there.  He said that building was a real key component of being an engine out there that drove the whole project. 

He said regarding the issue of how that project would proceed, they saw 720 East 9^th as ready to go.  He said that building was almost at the point of building permitting and then after that, the very next project would be the Poehler Building.  He said the Poehler Building was the largest structure out there and the structure that would drive a lot of the development.  He said once the Poehler Building kicked off, he thought all of the others, as users, would fall right into place.

He said the phases question was tied in with the 5 different phases put together for that project.  He said if he said the phases were being let go, that was a misstatement because there were 5 phases to this project and there were no kickers or penalties tied into those phases. 

Commissioner Highberger said the reimbursement cap depended on the phasing because if finishing Phase 1, the cost of that was the cap, and etc.

Maxwell said correct.

Commissioner Schauner said with a five year exclusive developer rights, there was some incentive to the applicant to move quickly through the process.

Maxwell said absolutely.  He said there was also a good point to be made that they only received reimbursement when they did construction.  He said they were going to be out there building infrastructure and every incentive in the world was to follow as soon as they could with building development to go there after and bring the vision of this project forward.

Dayna Carleton, East Lawrence, said she thought it was Miller who said they were taking the phases out and asked for clarification.  She said for the record, what was next step they should be taking. 

Miller said, in response to the question regarding phasing, he realized he had not explained it well enough.  He said when the process was started on the Neighborhood Revitalization Plan there were additional rebates on the phasing of the projects.  He said the developer did not think that would work and if they did not continue infrastructure improvements they were not going to receive rebates, so the developer wanted that removed.  He said there was phasing within the developer developing the site and it was not until last week they realized there were five phases.  He said because of the way 720 East 9^th properties came in and how the developer wanted to do the project, they actually increased the number of phases to do the project.  He said they took the phasing and the rebate limits out of the plan and that was how he should have explained it before because it might have caused some confusion for people in the audience on how that worked.

Commissioner Schauner said it answered that question, but raised another question regarding taking the rebate limits out.

Miller said the previous version said if they did Phase 1, they might only receive a 25% rebate and not a full rebate.  He said as an incentive to get all three phases of the development project completed, they had to complete all three phases to get the full amount of the private and public infrastructure improvement rebate.  He said that was what was taken out.  He said there was still a cap and was still limited to what the costs were going to be.

Commissioner Schauner said so there was an incentive of sorts to complete all of the phases, but that was removed in the current agreement proposal. 

Miller said yes.

Commissioner Schauner asked if that was removed at the request of the applicant.

Miller said yes.

Commissioner Schauner asked about their rationale.

Miller said the rationale that Maxwell described earlier, in that their incentive was to complete the project in order to receive the rebate. He said if only one phase was completed, then they were only going to get the rebate based upon the phase and the cost for the infrastructure improvements.  He said they still intended to complete all five phases of the project. 

Vice Mayor Hack said the infrastructure improvements served all five phases so the incentive would be to finish those phases in order to receive the rebate to pay for those infrastructure improvements.

Commissioner Schauner said Phase 1 was 720 East 9^th and asked if there was anything else in Phase 1.  He said for example, the rebricking of Pennsylvania and the water and sewer improvements would not be required for 720 East 9^th.

Maxwell said that was correct.

Corliss said he wanted to respond to the question about the Neighborhood Revitalization Act.  He said staff was working on that NRA and when the Commission had their last discussion about that act, he thought the Commission wisely indicated working on a policy document that would get out a number of issues with the Neighborhood Revitalization Act.  He said it was not as simple as adopting the act.  He said there were policy issues and staff had a number of examples from other communities which they were looking at and staff was also looking at one for downtown.  

Mayor Amyx said that went back to questions Holroyd had about adopting a neighborhood plan for five target neighborhoods and the process Corliss laid out was everything they discussed over the last year and also this particular project and how the plan could be used in designated neighborhoods throughout the community. 

Corliss said the law could be used anywhere in the City.  He said the Commission needed to have a plan that talked about what they wanted revitalized and what the policy goals were. 

Holroyd thanked Corliss because that was exactly what he was getting at.  He said they should enact the NRA first and then bring in what they wanted to do.  He said he did not think the Commission had thought this issue through even though the Commission had discussed this issue for a year. 

Vice Mayor Hack said the Commission had thought this issue through.  She said there was a lot of work put into the NRA to get to this point and appreciated Holroyd’s concerns.  She said the target neighborhoods Holroyd was talking about was the next step the Commission wanted to take. 

Carleton asked if a plan should be written for their neighborhoods.

Corliss said he thought one of their next steps was to get together with neighborhood representatives and others in the City organization to see if they could come up with the elements of a revitalization plan.  All the property could be included within the City or all property within certain geographical boundaries and say any improvements above the existing assessed valuation meant they would get a certain percentage rebated back.  He said he thought the Commission wanted to have a little bit of finer policy as to what to try and achieve.  He said he particularly remembered the issue if they wanted to provide a tax rebate for non owner occupied property.  He said staff would take the Commission’s direction, but the Commission needed to know the numbers to figure out what the Commission wanted to do.

Carleton said she was thinking their neighborhood boundaries were so small in East Lawrence and the percentage of owner occupied houses were not as great as they wished so their neighborhood could have a plan that was fairly simple to say that owner/occupied within their boundaries would be a place to start.

Corliss that could be a good place to start, but when something was presented staff wanted to talk about the likely candidates within the community, not just East Lawrence, but including East Lawrence.  He said he thought there were issues about commercial revitalization, as well, within some of the different neighborhoods.

Commissioner Schauner said he sensed the Revitalization Act used might be better applied across neighborhood boundaries rather than limitation strictly to East Lawrence, Brook Creek, Old West Lawrence, Oread, or Pinckney, but rather one that encompassed an area based on its real needs concerning revitalization.  He said that might add a level of complexity.  He said if they tried to limit it to specific neighborhood association geography, they might miss some of the point of the broader revitalization prospects this tax policy act could provide. 

Carleton said she was thinking in terms of working on their piece which seemed manageable. She said they had houses that qualify for preservation tax credits and those whose homes were not historic preservation type homes that really needed to be fixed up and no money to fix those homes.

Commissioner Schauner said what he heard through discussions was that it had to do with an interest in a rising tide, raising all the boats and not just East Lawrence, but the surrounding area as well instead of picking out a few houses here and there.  He said that would require more staff direction than individual neighborhoods drafting plans, although clearly what neighborhoods want in terms of tax policy assistance was something he was sure the Commission would want to hear about.

Mayor Amyx said along with that thinking, they would be looking at one policy that would cover a number of different neighborhoods because the policy would be consistent throughout.  He said that would take care of some of those concerns in East Lawrence along with Holroyd’s concerns about how this plan was going to be used and everyone needed to understand the rules in setting up a larger Neighborhood Revitalization Plan.

Carleton said she would invite any of Commission to join their meeting Monday night at 7:00 p.m.

Gwen Klingenberg, Lawrence, asked if this NRA was for owner/occupied homes only.

Mayor Amyx said that question had not been decided.

Klingenberg said with the problem of demolition by neglect, if the NRA could help some of those out of town landlords take care of those homes, it would be really nice.

Mayor Amyx said the Commission had not decided on any of the rules yet. 

It was moved by Hack, seconded by Schauner, to close the public hearing.  Motion carried unanimously.           

Miller said the plan had a couple of minor revisions and the developer agreement still had the issues discussed before.  He said the documents the City Commission received were drafts.

Corliss said if the Commissions saw major policy issues that were of a concern, it would be helpful for the Commission to give staff direction.  He said staff was committed to proceeding with the NRA and wanted to give clear direction to the developer as possible so the developer knew by what rules to follow in order to proceed.  He said unless there were substantive changes which the Commission would see back on a future consent agenda  

Mayor Amyx asked how long that process would take.

Miller said conservatively two weeks to get those details completed.  He said he anticipated placing the document on the March 27^th agenda for approval.

Commissioner Schauner said the only concern was the notion of no cap on the ultimate build out costs.  He said if that amount of increased tax rebate did not equal the expense of the development, the developer would not recover that money.  He said there was a built in incentive for the developer to build that project in a way that was close to the estimate. 

Moved by Hack, seconded by Highberger, to receive the draft Developer Agreement and direct staff to prepare an ordinance to adopt the Neighborhood Revitalization Plan and Program for the 800 block of Pennsylvania.  Motion carried unanimously.                               (17)

Consider setting a bid date of March 27, 2007 for Phase III of the Downtown Waterline Improvement Project.

David Corliss, City Manager, presented the staff report.  He said a meeting took place with a number of downtown interested parties and property owners where they discussed Phase III.  He said staff was proposing to start this final Phase down Massachusetts Street in the downtown area earlier which would allow that project to be completed sooner.  He said staff was also proposing not doing the mill and overlay of Massachusetts Street this year, but next year.  He said by September the 6^th or 7^th there would probably be a bit of construction fatigue and did not want to go back in and do the mill and overlay.  He said that would give additional opportunity to do more of the fire line installations this year.  He said it would also allow the mill and overlay to be done at the slowest period as possible downtown.  He said a downtown business owner suggested somewhere in the late June/July period of 2008 might be a good time to do the mill and overlay at the least inconvenient time for downtown as possible. 

He said other elements of the project were writing specifications to ask the bidder to have experience in those tight urban waterline installation projects.  He said they had been fortunate to have qualified bidder on the project in the past and that contractor was interested in this project and hoped he would bid.  He said it was essentially 2 ½ blocks as opposed to two blocks.  He said they saw the proposed phasing as far as the project was concerned.

Mayor Amyx asked if they were looking at starting in the 1100 block first for Phase III of the project.

Corliss said on the west side only.

Mayor Amyx said they would start the day after graduation at 9^th and Mass and head south.

Philip Ciesielski, Utilities Engineer, said essentially after completing the west side of the 1100 block, the contractor moved into the mode used last year for the second phase where a two block stretch on the east side of the street where there was no water main currently and installed the new water main on the east side, mobilized across the two blocks and get it all knocked out and brought back up to grade, switch the services over to the east side to the new water main and come to the west side and do the two blocks and install the new main on that side.  He said that was essentially the new phasing again.  He said once getting through the 1100 block would be similar to what was experienced last year.  He said they had the same number of working days set for those two phases where the 900 and 1000 block would be done, 35 days per side, and would have 20 days allocated for the 1100 block, which might be a little conservative.  He said last year the contractor substantially completed the project 5 days early which got the contractor into the incentive clause which would be included this year for the overall completion of the project.  He said Dave Osborne, City Project Inspector would be involved with the project again.  He said they anticipated having the 1100 block demobilized and downtown opened for the weekend of graduation and remobilizing that Monday.

Corliss said staff was scheduling around the bicycle races and were not having the project active on graduation, but the project would be active in the 1100 block for Mother’s Day, but did not see that day as an impediment.  He said they would be closed down for Sidewalk Sale Day and would finish according to the schedule a day before Band Day.  He said staff wanted to be wise about this project because staff was not insensitive to the inconveniences on the property owners.  He said staff wanted to get the project in and out as quickly as possible. 

He said one way to minimize parking concerns in the 900 and 1000 block was to allow free parking on the top floor of the parking garage in the 900 block on New Hampshire.  He said staff planned on proceeding with that idea unless the Commission had concerns.  He said that parking areas was an under utilized part of that structure and could sign appropriately. 

He said a number of applications had been received, more than the City had money for this year, for the fire sprinkler program which was going to be a challenge, but staff might want to continue that program in future years.

Commissioner Schauner asked about the number of applications.

Corliss said he did not know if staff placed a dollar estimate, but he thought there were 30 applications.

Commissioner Schauner asked how much money they had for that program.

Corliss said there was a quarter of a million allocated and were roughly estimating $25,000 each.  He said if 10 fire sprinklers were installed the City would be at its dollar amount.  He said what staff might be able to tell those business owners was the program might carry into future years before they milled and overlaid the street.

Moved by Schauner, seconded by Hack, to set a bid date of March 27, 2007, for Phase III of the Downtown Waterline Improvement Project.  Motion carried unanimously.    (18)

PUBLIC COMMENT:                                                                                                               (19)

Laura Routh, Recording Secretary for the Resource Conservation and Recycling Advisory Board, said she was present to share with the Commission a memo that was approved by the Advisory Board pertaining to protecting trees and promoting the urban forest. 

She said unfortunately, the gentleman who brought this information to the advisory board could not be present, but he represented the Tree Conservatory of Lawrence and their group was concerned about preserving historic and landmark trees and generally urban forest lands in the city.  The Advisory Board felt strongly this was a cause they would like to support.  She said they would ask for the Commission’s consideration on this issue and hoped it was an issue that could be kept on radar. 

“The Recycling and Resource Conservation Advisory Board supports the protection of trees and the promotion of the urban forest in the City of Lawrence, Kansas.  To that end, we wholeheartedly support the efforts of the Tree Conservancy and we strongly encourage the City Commission to create an advisory board to address the protection of trees and forest land within the city.  Further, we welcome the development of an ordinance which protects landmark and significant trees and preserves urban forest areas.” 

Commissioner Rundle asked if Routh’s advisory board would be interested in scheduling an extra meeting to informally discuss this issue.  He suggested getting together with City staff because he thought staff was working on this issue and it might be good to hear what had been done.  He said he thought they already passed on some material and thought it would be good to see if they were on the same page.

Routh said the advisory board wholeheartedly supported this issue and whatever their advisory board could do, they would back the Tree Conservatory of Lawrence. 

David Corliss, City Manager, said this issue was with the Parks and Recreation Department and as staff finalized their report, staff would make sure to involve the board, to comment so when that report came back to the City Commission, the Commission would also have the benefit of the board’s comments as well. 

Richie Caldon, owner of Thai House Restaurant on Massachusetts Street, said he had applied for a liquor license with the State for an establishment located at 821 Iowa and was informed by the State, he would have that liquor license tomorrow, no later than Thursday.  He said on February 21^st, he handed in his application with the City and was informed that until he had a State license, he could not get approved by the City.  He said he understood the principles, but hoped he could possibly get an exception because he currently had two State liquor licenses and never had any problems, never been late on anything and he would have his liquor license either tomorrow or Thursday.  He said he projected to open on March 8^th and was hoping he could possibly get his City license approved.

Mayor Amyx said there was discussion before about someone needing to wait to receive a state liquor license before they were allowed to receive their City license.

Frank Reeb, Administrative Services Director/City Clerk, said generally their practice was to require receipt of a State license before staff placed that establishment’s City license on the agenda for City Commission approval.  He said for existing establishments staff granted a temporary license which was in a renewal situation. 

Mayor Amyx said the reason that was place on the Commission agenda once the State license was received for the opportunity for the public to comment if they wished.

Reeb said that was correct. 

Caldon asked if there was no possible way he could get one issued contingent on the state license.

Mayor Amyx said as much as he would like to, the agenda was the opportunity for the public to respond to the actions of the City Commission and he did not think that was something the Commission wished to change because the public needed notice of what the City was doing.  He said if the State license was received tomorrow, staff could place it on the agenda next week.

Caldon said he knew that potentially they would lose out on $10,000 - $12,000 of revenue this week.  He said spring break was coming and hoped to get his licensing through. 

Wayne Parkinson, Lawrence, said an article in the Lawrence Journal World entitled “City Manager Salary Expected to Increase” caught his attention.  He said he had been through the corporate life and knew they had a performance review, a salary review, every 6 months after a performance uptake.  He said he did not think it was justified to give someone a raise that had been in a new position after two months on the job.  He said he knew Corliss’ had been working here a long time, but everyone he talked to was angry because the raise was excessive.  He said he would like the City Commission to revisit this issue and would like to know who said the raise was justified.

Mayor Amyx said he believed the raise was justified and if looking at the City Manager Agreement, Corliss’ job as City Manager was evaluated differently than any other position in City Hall.  He said every other employee on January 1^st received a cost of living raise and under the agreement with the City Manager, the City Manager did not get the automatic cost of living increase.  He said the City Commission conducted a review of Corliss and the recommendation for that salary increase came from the City Commission.  He said Corliss’ position was different than any other position in City Hall in the way the evaluation was done and any increase given to that position.

Parkinson asked if there would be a time factor here.  He said maybe not an extensive time factor, but thought Corliss’ needed to prove his position.  He said but looking at this issue from someone who was in the market place, there was some bad press and a lot of people were unhappy.  He said no one else thought it was wrong to challenge this issue and maybe there should be a committee to review situations like this.

Commissioner Rundle said the City Manager’s position was the one employee the City Commission hired and supervised.  He said the two months Corliss’ served as the Interim City Manager needed to be added.  He said he was probably one of the most scrutinizing, toughest judges and insisted the Commission take adequate time for those reviews, but he had no complaints and joined with the Mayor and Vice Mayor that the salary increase was justified.

Parkinson said he probably did not have all the facts, but he wanted to voice his opinion.

Mayor Amyx said Parkinson was always welcomed to come to the podium and believed Parkinson was part of that oversight committee.

Commissioner Schauner said this was not a decision the City Commission made lightly, quickly or made without substantial consideration of Corliss’ performance not only as the current City Manager, but in his performance as the Interim City Manager for a number of months.  The City Commission believed, based on the recent search for a replacement City Manager that in the marketplace the salary the Commission was now offering Corliss was essentially a salary the Commission would and could have offered to an individual new to the City, without any experience with this City.  He said based on all those facts and circumstances, the Commission believed the raise offered to Corliss, and the salary that Corliss accepted was a reasonable increase and one the Commission had a high level of comfort with across the board.

Parkinson said he thought the article he scanned would have had less impact if it stated $116,000 was the salary with no mention of the increase and that was the salary.  He said the percentage increase came too soon for a new job.

Commissioner Schauner said their conversation was not about a percentage but a flat dollar amount.  He said it was the newspaper and their headline writer who chose to draft an article that had that appearance.  He said he did not argue with the facts that underlined the article, but how the information was presented was obviously not the City Commission’s choice or drafting. 

Mayor Amyx said the $116,000 was the County Administrator and the increase he received.  

Commissioner Schauner said the County Commission received a substantial higher increase at their own insistence.

FUTURE AGENDA ITEMS:

03/13/07	· Direct staff concerning proposed special assessment benefit districts for the improvement of George Williams Way north and south of West 6^thStreet, including intersection improvements · Direct staff concerning sanitary sewer improvements serving property west of Queens Road, north of West 6^th Street (Baldwin Creek gravity line from pump station no. 45 to 48) · Receive status report concerning Matrix Consultants recommendation for adoption of International set of building trade codes · Consider ordinance amending fine/punishment for firearm possession near drinking establishment
03/20/07	· NO meeting (Spring Break week)
03/27/07	· Consideration of Preliminary Development Plan for Mercato development, north of West 6^th Street, west of George Williams Way extended
04/10/07	· Seating of new City Commission

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Moved by Schauner, seconded by Hack, to adjourn at 9:50 p.m.  Motion carried unanimously.                                                                                                                                                                        

APPROVED                                                                _____________________________

Mike Amyx, Mayor

ATTEST:

___________________________________

Frank S. Reeb, City Clerk

CITY COMMISSION MEETING OF MARCH 6, 2007

1. Bid - Replacement uniforms, Fire/Medical for $40,000.

2. Ordinance No. 8080- 2^nd Read, amend franchise fee agreement with Kaw Valley Electric Cooperative.

3. Ordinance No. 8081 - 2^nd Final Read, adjusting franchise fee by SW Bell Telephone.

4. Resolution No. 6694 - Public hearing Mar 27, 2007, benefit district Williamsburg Ct & Williamsburg Pl.

5. Mortgage Release - Neby Smart, 509 Lincoln.

6. Long Range Transportation Plan (T-2030) - Parsons Brinkerhoff, transportation planning consultant.

7. Receive 2006 System Development Charge Report.

8. City Manager employment agreement - Addendum.

9. Cost of Growth Study  - TischlerBise final report

10. Ordinance No. 8083 - 2^nd Read, (SUP-07-01-06)  150’ T-Mobile monopole at 2206 E. 23^rd.

11. Ordinance No. 8084 - 2^nd Read, (SUP-07-02-06) 150’ T-Mobile monopole at 3420 Bob Billings Pkwy.

12. City Manager’s Report.

13. Tax Abatement - Public hearing & approval, 55% tax abatement from API Foils.

14. Resolution No. 6701, ordering construction, Stoneridge Dr., S of W 6^th.

15. Resolution No. 6702, ordering the construction, Stoneridge Dr., N of W 6^th.

16. Agreement - LandPlan Engineering, design services for signalization of 6^th & Stoneridge Drive for $17,500.

17. Neighborhood Revitalization Plan – Public Hearing and Developer Agreement, 800 block of Penn.

18. Bid date - March 27, 2007, Phase III of Downtown Waterline Improvement Project.

19. Public Comment