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HomeMy WebLinkAbout05/03/2010 Work Session City of Springfield Work Session Meeting MINUTES OF THE WORK SESSION MEETING OF THE SPRINGFIELD CITY COUNCIL HELD MONDAY, MAY 3,2010 / The City of Springfield Council met in a work session in the Jesse Maine Meeting Room, 225 Fifth Street, Springfield, Oregon, on Monday, May 3, 2010 at 6:00 p.m., with Mayor Leiken presiding. ATTENDANCE Present were Mayor Leiken and Councilors Ralston, Lundberg, Wylie, Leezer, Simmons, and Pishioneri. Also present"were City Manager Gino Grimaldi,.Assistant City Manager Jeff Towery, City Attorney Joe Leahy, City Recorder Amy Sowa, and members of the staff. 1. Regional Wastewater, Local Wastewater, and Local Stormwater User Fees for Fiscal Year 10-11. Environmental Services Department Supervisor Tim Schuck presented the staff report on this item. User fees for local and regional wastewater and for stormwater were last reviewed by the City Council in May of 2009. Staff was in the process of developing Fiscal Year (FY) 1 0-11 local user fee options for consideration by Council later this spring. The Metropolitan Wastewater Management Commission (MWMC) approved a schedule ofFY 10-11 regional wastewater user charges on April 9th and would be forwarding them to Springfield and Eugene for implementation. Each year, staff brought Council proposed user fee rates for local wastewater and stormwater programs. These fees were established to provide adequate revenue to fund operations and maintenance, capital improvement programs, and the debt service payments for the City of Springfield. In addition to these local fees, MWMC developed regional user fee rates to support the Regional Wastewater Program. Regional Wastewater User Fees. At the March MWMC meeting, staff presented options to increase regional wastewater user fees ranging from a 4% to a 6% rate increase. MWMC adopted a resolution establishing the user fee rates for FY 10-11 following a public hearing on April 9th and were now forwarding them to Eugene and Springfield for implementation. The primary factor driving regional wastewater user fee increases continued to be the Commission's capital fmancing plan associated with construction of the 2004 MWMC Facilities Plan projects. The twenty-year Capital Improvement Plan (CIP) was intended to provide environmental compliance and treatment capacity to serve community growth through 2025, at an estimated cost of$196 million (in 2006 dollars). Local Wastewater User Fees. The Council was requested to. consider options for an increase in local wastewater user fees ranging from 5% to 16%. The primary factor driving the need for increased local wastewater fees in FY 10-11 and subsequent years related to the funding requirements of the local wastewater CIP. In FY 08-09, $22.8 million in revenue bonds were issued, and to continue fmancing the CIP as approved by the City Council earlier this spring, issuance of additional revenue bonds was planned. In order to issue bonds and maintain existing bond covenants, net revenues (revenues minus operating expenses) must be at a 1.25 ratio to the debt service payment. User fee rate scenarios were driven by this 1.25 debt service coverage ratio. Stormwater User Fees. The 2011-2014 CIP included projects identified in the Council-adopted Stormwater Facilities Master Plan and bond financing was necessary to fund these projects. Staff had prepared several rate options for Council to consider with user fee increases ranging from 5% to 15%. Each scenario required City of Springfield Council Work Session Minutes May 3, 2010 Page 2 financing to pay for stormwater projects and corresponding revenue bond amounts as well as the timing of the bond issuance. Options for local wastewater and stormwater user fees were to be reviewed during tonight's work session, and a draft schedule of user fees would be developed for a public hearing scheduled for May 17th. Mr. Schuck reviewed the background of stormwater services, while a power point was displayed. In October 2008, the City replaced our thirty year old stormwater master plan, addressing future and current needs for existing use. The purpose was to address water quality, public safety, and flood control issues. The cost for that master plan was $34M. That created a situation of going from a pay- as-you-go fmancing to the need to borrow money. Capital projects were paid for directly and indirectly through SDCs and user fees. Prior to the increase last year, there had been no rate increase in stormwater rates for three years. Last year's increase of 14% was to prepare for a $7M bond the City had yet to issue. In February, Council approved the FY10111 plan. At that time, the CIP was prioritized to meet our regulatory requirements. SDCs had been implemented using a step approach with full implementation on January 1,2011. Mr. Schuck said all scenarios would address the 1.25 debt ratio. He explained. Last year, the operating budget was reduced by almost three percent. This year a small portion of that was reinstated as the cuts were not sustainable for the requirements of the program. He referred to a slide showing the needs in the adopted 2011-2015 CIP. These were separated into three categories: current budget, obligations, and high priority, and the chart showed the five year needs and the shortfall. Mr. Schuck said last year at this time, the City implemented a 14% rate increase, looking at an 8% increase this year. They had planned on issuing a $7M bond last year and a $4M bond in FYll112. That would pay for our current projects, our obligated, as well as the Jasper Natron project. He reviewed the three scenarios in the agenda packet for the stormwater rates. The third option did not support the current CIP. He referred to a slide showing all three options presented to the Council and explained each option. Mr. Schuck discussed bond issuance costs and timing. Bonds cost the City about $200,000 - $250,000 per bond sold. In the options presented, $250,000 was used as that cost. He noted the average increase per household in each of the options. Mr. Schuck discussed local wastewater. He reviewed the timeline for local wastewater. The previous master plan had been adopted in 1980. Currently, the 2008 plan included system upgrades to eliminate sanitary sewer overflows at a cost of nearly $50M. In March 2009, the City issued a bond of$23M. Last year, they eliminated positions and reduced material supplies for a total of approximately four percent. A rate increase of 14% was implemented. This year, they had cut about 1.6% through reduced internal charges. He referred to a chart showing the needs for the 2011-2015 CIP regarding wastewater. He noted the increase last year and the anticipated increase for this year. He discussed the bonds to be issued in the years to come. Scenarios shown in the options were dependent on when bonds would be issued. He explained each option. He noted that the only con of Option 2 was that it could potentially delay the timing of Jasper Natron. The City was able to issue a bond after Council took action on rates. He explained. He again noted that Option 3 did not reflect Council goals, nor support the CIP. Mr. Schuck discussed regional wastewater rates and debt service, including the rate increases from last year and the proposed rate increase for this year. He discussed strategies used and other factors that City of Springfield Council Work Session Minutes May 3, 2010 Page 3 allowed them to keep the rates ~pwer. They hadbeen able to mitigate the need for a bond at this time, allowing them to look at a lower rate increase. . Councilor Ralston spoke regarding local wastewater. In looking at Option lover the five year period, it ended with a lower rate after all five years. The City would end up in about the same place, spending less money, which was the responsible thing to do. This savings was not as obvious on the other rates. He favored Option 2 for that reason. He always thought paying up front costs saved money in the end. Currently, the bond costs were 4.5%, and they were unknown in the future. Councilor Simmons said the regional rates were already taken care of through MWMC. He felt that Option 2 took the midline approach for wastewater and stormwater. This option provided an opportunity to fund most of the projects, but still left a hole for Jasper Natron. It took funds from Jasper Natron and moved it to the refurbishment of other basins. Option 2 did not provide funds for Jasper Natron until later. Councilor Ralston said it would give the option for Jasper Natron, just not as soon. Mr. Schuck said with Option 1, a bond could be issued in FY11/12. He explained how measures could be put ,into place under Option 2 to put out a bond later if needed. Councilor Simmons said the cost of carrying would equal what that rate would be. If the City floated the bond today, it would start incurring interest costs that were substantial. It was obvious that bond rates were going up. Whether there were options for funding from another source was the question. He didn't think they could float the bond for Jasper Natron based on the revenue from this process. They would need an additional rate in order to meet the 1.25 percent. Mr. Schuck said with the rate increase in Option 2, they could do the engineering for Jasper Natron. He explained further. Mr. Paschall said the design would be completed and easements purchased with Jasper Natron still in the budget. The potential delay could be in the difficulty in selling the bonds in FYI2/13. That risk was fairly low at this time. Councilor Ralston said he would rather see Option 1, but would support Option 2 to keep some of the increases lower. He always felt payment up front was the better option. Mayor Leiken asked about the size of Jasper Natron and how much of that was zoned for Commercial/Industrial. Development Services Director Bill Grile said Jasper Natron was about 800 acres with at least 110 acres zoned Commercial/Industrial. Mayor Leiken asked if there were other sites that size zoned that way in the metropolitan area. No. Marcola Meadows was set aside for Commercial, and some in Jasper Natron was zoned Campus Industrial. Mr. Grile said some of it was zoned Campus Industrial and some Light Industrial. Councilor Pishioneri said we needed these projects. He discussed Option 2 and the ability to pay for the citizens. He liked how Option 2 in wastewater was laid out,: and felt it was easier to take compared to City of Springfield Council Work Session Minutes May 3,2010 Page 4 Option 1. Going out for two bonds would cost the City more. The rate could increase over time. In stormwater, Option 1 did cost more money because they would issue more bonds. Mr. Schuck explained the difference in Option 1 and 2 for wastewater regarding bond issuance. The bond issuance costs would be the same, but the rates could be different. Councilor Pishioneri said splitting the issuance would cost the City much more and would be a cost to the citizens. Mr. Schuck said the issuance of the bond did initially cost $250,000. He discussed the difference in the interest if the interest rates increased. Councilor Pishioneri said he was looking at the ability to pay for FYI 0/11, and what consumers were faced with. He felt it would cost the City more, but wasn't sure the citizens could afford a bigger increase this year. Councilor Wylie said stormwater and wastewater rates were separate, and the total increase was substantial per year over the next few years. She noted the different increases. She knew the projects were needed, but was concerned about the cost to citizens. She liked Councilor Ralston's rational for Option 2, but said it was hard for citizens to understand. Mayor Leiken said they would continue to see businesses looking for sites such as Jasper Natron. Going out to 2013 would be fme since things were not moving ahead quickly at this time. It was difficult during these times to determine the development trends. He agreed with Councilor Ralston. Councilor Lundberg said she didn't like Option 3 on either. When her bills started to go up, she tended to cut back on other things, such as entertainment and electrical. People would cut back and fmd another way to save money. She felt comfortable waiting until 2013 for Jasper Natron and supported Option 2. Councilor Leezer said she supported Option 2 for both. There would be a savings of $250,000 in bond costs having to sell only one bond. Both increases were going to be rough. Councilor Pishioneri asked about the differences in the options for wastewater. Mr. Schuck explained. Councilor Pishioneri asked about Option 1 versus Option 2 regarding sale of bonds. Mr. Schuck explained. Councilor Pishioneri said Option 2 included more consistent increases. Councilor Simmons said in reality they were stuck with Option 2. He discussed borrowing from the City. The risk in doing that was noted. 2. Lane County Area Commission on Transportation (LCACT) - Draft By-Laws. Assistant City Manager Jeff Towery and Transportation Manager Tom Boyatt presented the staff report on this item. Lane County convened a group of stakeholders to create by-laws for a new Area Commission on Transportation (ACT). Councilor Wylie was Springfield's designated representative City of Springfield Council Work Session Minutes May 3, 2010 Page 5 to the group. Tom Boyatt, Engineering and Transportation Manager, would provide a brief overview regarding the purpose of an ACT, including State and regional policy perspectives. Councilor Wylie would share her observations as an introduction to Council review and discussion. Mr. Towery said the group had been meeting for about four months. The Lane County Board of Commissioners (LCBC) had met last week, and extended the deadline' for the fmal report to the end of this month. They were asking for input from interested jurisdictions by May 17. Three areas of concern were identified by the LCBC: 1) super majority; 2) proportional representation; and 3) private sector citizen members. Councilor Wylie said she would address those three concerns later. Mr. Boyatt said the ACT's were conceived and set up by the Oregon Transportation Division in 1996 for the purpose of improving communications and interactions between the Commission, department and local stakeholders that had an interest in transportation issues. The Commission wanted to see more vetting and agreement on projects before coming to the Commission. The Commission's policy on formation and operation of ACT's, stated that the ACTs were broadening opportunities for stakeholder input, improving project recommendation, bringing more of a regional transportation perspective, increasing stakeholder support, controlling project costs, delivering projects more efficiently, and several other aspects. ACTs had a primary role of recommending statewide transportation improvement program projects to the OTC, and commenting on policies. The hope was that the ACTs would have at least fifty percent membership of elected officials and the other fifty percent made up of the broad representation. Broad representation included those in tribal governments, boards for transit, freight, trucks, bicycle, pedestrian, public safety, non-profit orgaJ1izations, public interest advocacies, land use, and local citizens and businesses. There was a large document on the formation and operation of ACTs. There were ten ACTs in the state. Portland Metro did not have an ACT, but were negotiating with onOT to have a transportation policy committee called JP ACT (Joint Policy Advisory Commission on Transportation) to see if ODOT could accept a charter of JP ACT to be the ACT for Portland Metro. Lane County was being required by the state legislature to form an ACT. Councilor Wylie referred to page 10 of 29 in Attachment 2, by-laws. She felt the process was good, although she was skeptical in the beginning. Before Commissioner Handy was a commissioner, he was an advocate for transportation issues, as was Rob Zako. She felt Mr. Zako did an excellent job and she was pleased. Mayor Leiken agreed and said Mr. Zako went out of his way to be fair. Councilor Wylie discussed the issue of private sector citizen members. She described t,he membership for the LCACT as noted on page 10 of the by-laws. When the group was putting together the by-laws, there was input from all of ~e groups required in the membership. There were some positions on the membership that could be duplications. She explained. Citizen members needed to be good mix of transportation related people. The question was who would appoint the 6 citizen members. The group wanted the ACT to appoint those six citizen members, but Commissioner Handy wanted the Lane County Board of Commissioners to appoint them or at least approve them because he felt Lane County knew how to balance these types of committees. The group disagreed and it was a point of contention. . When Commissioner Handy presented this to the LCBC, he noted that it was still an issue and needed to be tweaked. City of Springfield Council Work Session Minutes May 3,2010 Page 6 Councilor Wylie said the second issue was regarding a super majority. The group voted by consensus and if someone had concerns (identified by a yellow card), the group discussed it further. The group decided that to have a quorum, they needed 2/3 of the voting members present, or eighteen members. They would then need a majority of those present for a super majority. That made it easier to get a super majority as it was difficult to get everyone to every meeting. The LCBC still had issue with that. Councilor Wylie spoke regarding the third issue of proportional voting. The City of Eugene had concerns over getting outvoted by a consortium of the small communities~ Springfield could as well; however, if they took the genesis of a project and ran it through all the processes, there was no way an ACT would cause any problems. The City of Eugene had come to that understanding and had approved the by-laws as written by the group. Springfield didn't have that concern. If there was not agreement among the ACT members, a minority report could be submitted to the GTC. The GTC did not have to approve anything the ACT submitted. ACT was advisory only. She appreciated the efforts of all involved and felt the City Council should approve the by-laws when they came forward. She or someone else may go to speak to the Commissioners regarding their issues. Mayor Leiken thanked Councilor Wylie for her service on this committee. Two people from an ACT up north came to meet with the Mayors. Much of this came about because small cities felt they were being overlooked on funding issues. He explained. Those smaller cities got it passed in the legislature. The Mayor said he was also skeptical, but was pleased with Mr. Zako's work. He said the group needed to hold their ground with the LCBC. He was glad to hear the rest of the committee was supportive of the by-laws. Councilor Wylie said three Mayors had weighed in on that issue. Mr. Towery said those Mayors were Mayor Volta (Coburg), Mayor Hobart-Hardin (Veneta), and Mayor Piercy (Eugene). Mayor Leiken said ACTs normally worked with private citizens. He asked if they were under a timeline. Councilor Wylie said they had to turn it over to the GTC. Councilor Ralston asked about the super majority. He noted that the quorum (18) was an even number and could be problematic if there was a tie. Councilor Wylie said it was a super majority of the members present. Councilor Ralston noted that the LRAP A board had the same type of issue regarding a quorum and super majority. Councilor Lundberg said she had never been a fan of ACTs, but we had one nQw and that was fine. She thought 27 was a huge number of members to maneuver through a process. She noted that Springfield was typically in line with smaller communities. She discussed the super majority and noted that 15 votes, which was about 56% of the membership, could carry a vote forward. There was a lot of coverage to send an alternate, which would be important. We needed to make sure we had representation. GTC meetings were much different than the ACT meetings. She said she didn't see term limits for members. She suggested that two consecutive terms was enough for members. Councilor Wylie said the officers had to be elected officials. City of Springfield Council Work Session Minutes May 3,2010 Page 7 Councilor Lundberg said once someone served two terms as an officer, they should be turning that duty over to another member. There was nothing in the by-laws about how long someone could be re- appointed. Councilor Wylie said if the by-laws were approved, terms could be added as something Springfield would like to see. Councilor Ralston said he could understand limits on the officers, but not on the membership. It was sometimes difficult to bring in new people. Councilor Lundberg said the elected officials would possibly be changing every few years anyway. Councilor Simmons asked if Councilor Lundberg wanted to impose term limits for all members or officers. Councilor Lundberg said there were no limits for members or officers the way it was written. Mr. Towery said they had a couple of weeks before they needed to provide feedback to the LCBC. Staff could come back with a short affrrmation about this conversation. Mayor Leiken asked that Mr. Towery let Council know when this would be coming back to the LCBC. ADJOURNMENT The meeting was adjourned 7:02 p.m. Minutes Recorder - Amy Sowa Attest: ~