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HomeMy WebLinkAboutMINUTES-11/09/1982-AdjournedNovember 9, 1982 COUNCIL OF THE CITY OF FORT COLLINS, COLORADO Council -Manager Form of Government Adjourned Meeting - 7:30 p.m. An adjourned meeting of the Council of the City of Fort Collins was held on Tuesday, November 9, 1982, at 7:30 p.m. in the Council Chambers in the City of Fort Collins City Hall. Roll call was answered by the following Council members: Cassell, Clarke, Horak, Knezovich, and Reeves. Absent: Councilmembers Elliott and Wilmarth. Staff Members Present: Arnold, Davis, Huisjen, Meitl, Lewis, Hays, Wood, K6empel, and Harmon. Agenda Review: City Manager City Manager Arnold requested that Item #10, Resolution and Ordinance Establishing Financing and Awarding Contracts or SpecialImprovement District - Boardwalk an Lan ings Drive, be tabled to Novem er t . He also stated that he would have one item of other business. City Manager Arnold also noted that the following Proclamation needed to be read. A. Proclamation naming second week of November as Youth Appreciation Week. The Proclamation was read by Mayor Cassell and recieved by Marc Engemoen, representing the Fort Collins Optimists. Ordinance No. 138, 1982, Providing for the City's 1982 Consolidated Special Improvement Districts Special Assessment Bonds, Dated December 1, 1982, in the amount of $1,265,000, Adopted on First Reading Following is the staff's memorandum on this item: "The Consolidated District's Bonds are made up of: I(a) South Mason Street and Utility Improvement District No. 75 $ 431,000 -507- November 9, 1982 (b) Street Improvement District No. 76 on West Horsetooth 51,000 (c) Boardwalk Special Improvement District No. 77 783,000 $1,265,000 The negotiated interest rate, to be paid, on the bonds will be provided prior to the Council meeting. The Ordinances that created the Districts are irrepealable until the indebtedness provided for, whenever created, has been retired." Mayor Cassell and Councilmember Reeves announced they would withdraw from discussion and voting on this item and the following agenda item because of possible conflicts of interest. Assistant Mayor Knezovich chaired this portion of the meeting and asked City Attorney Huisjen if a sufficient number of Councilmembers were still present to take action. City Attorney Huisjen replied in the affirmative. Councilmember Clarke made a motion, seconded by Councilmember Horak, to adopt Ordinance No. 138, 1982, on First Reading. Ron Wood, Finance Director, gave a brief presentation on this consolidated bond issue. This is a negotiated sale with Boettcher and Company, and the issue has been pre -sold to individuals. The negotiated net effective interest rate is 11.1258% and the term of the bond issue is 10 years. Councilmember Knezovich noted that Boettcher and Company was the only and low bidder on this particular issue, and asked about the City's policy in this area. Finance Director Wood explained that this is a smaller. bond issue with primarily local interest, and there were time -frame considerations on this particular issue. Councilmember Knezovich commented on the issuance of bearer bonds as opposed to registered bonds, and the impact of new Internal Revenue Code regulations after January 1. The vote on the motion to adopt Ordinance No. 138, 1982 on First Reading was as follows: Yeas: Councilmembers Clarke, Horak, and Knezovich. Nays: None. (Councilmembers Cassell and Reeves withdrawn) THE MOTION CARRIED. 1 November 9, 1982 Resolution and Ordinance Establishing Financing and Awarding Contracts for Special Improvement District No. 77 - Boardwalk and Landings Drive, Tabled to November 16, 1982 Following is the staff's memorandum on this item: "At the September Council meetings, the Council established Special Im- provement District No. 77 to construct the street and utilities on Board- walk Drive and Landings Drive in the South College Properties area. In order to begin construction the Council is requested to take the following actions in the order listed. A. Hearing and Final Reading of Emergency Ordinance No. 135, 1982 Providing for Appropriation of Anticipated Proceeds from the Sale of Bonds in the Capital Projects Fund. B. Resolution Awarding the Construction Contract to Sterling Paving Company, the Lowest Qualified Bidder. SUMMARY OF COSTS The summary of costs has been revised from the Engineer's estimate based on the actual bid amounts. TOTAL CONSTRUCTION COSTS $593,607.10 OTHER PROJECT COSTS a) Administration 5,000.00 b) Legal 15,000.00 c) Engineering (design & construction services) 123,230.00 d) Repay of ROW costs to Osprey and Petersen 86,560.00 e) Interest during construction 39,357.00 f) Collection and certification 10,196.00 $279,343.00 TOTAL PROJECT COSTS $872,950.10 CITY DIRECT COSTS Water line oversizing $ 22,948.80 Engineering (from Street Oversizing Fund) 18,978.00 ' $ 41,926.80 -509- November 9, 1982 CITY INDIRECT COSTS Street Oversizing $ 91,777.00 TOTAL CITY COSTS $133,703.80 Appropriation of Anticipated Bond Proceeds It is requested that the Appropriation Ordinance be heard as an Emergency Ordinance due to approaching winter weather conditions and the subsequent reduction of available construction time; and because an appropriation must be in existence before the City may incur a liability for construction costs. According to the City Charter, Council may appropriate funds based on anticipated bond proceeds. Staff believes this request is justified due to the potential added costs to the contractor or the district property owners if early winter conditions delay the contract award. Staff has received a letter of guarantee from Osprey adequately securing the City's liability to award the construction before final hearing on sale of bonds. The amount to be appropriated will be based upon the lowest bid received for construction. Award of Construction Contract Bids for this work were received on October 15. Since this is an im- provement district, the City Council must award the bid formally. The total construction phase budget is $579,659. This amount is intended to cover construction of the street improvements, storm drains, bridges, railroad crossings and relocation of utilities. The low bid for the construction work was $593,607.10 by Sterling Paving Company, Inc. Although this exceeds the engineer's estimate, it is less than the 5% increase allowed in the Code for Local Improvement Districts. No errors or irregularities were found during the staff review of the low bid, the staff recommends that the bid be awarded to the low bidder." Councilmember Horak made a motion, seconded by Councilmember Clarke, to table Ordinance No. 135, 1982 to November 16, 1982. Yeas: Councilmembers Clarke, Horak, and Knezovich. Nays: None. (Councilmembers Cassell and Reeves withdrawn) THE MOTION CARRIED. Councilmember Clarke made a motion, seconded by Councilmember Horak, to table Resolution 82-154 to November 16, 1982. Yeas: Councilmembers Clarke, Horak, and Knezovich. Nays: None. (Councilmembers Cassell and Reeves withdrawn) -510- November 9, 1982 THE MOTION CARRIED. Ordinances Relating to the Issuance of General Obligation Water Bonds in the aggregate principal amount of $4,100,000, dated December 1, 1982. Adopted on First Readi Following is the staff's memorandum on this item: "A. Hearing and First Reading of Ordinance No. 136, 1982, authorizing the issuance of General Obligation Water Bonds in the aggregate principal amount of $4,100,000, dated December 1, 1982. B. Hearing and First Reading of Ordinance No. 139, 1982, appropriating monies in the Capital Projects Fund. The General Obligation Water Bonds are being issued during 1982, instead of their scheduled issuance in 1983, per the 1983 Annual Budget, in order to take advantage of a favorable bond market and prior to new I.R.S. regula- tions concerning municipal debt that go into effect January 1, 1983. The appropriation ordinance is required to pay the issuance expenses of the bond issue and to provide a contingency for the funded projects. The remainder of the proceeds has been appropriated as part of the 1983 Annual Appropriation. The purpose of the $4,100,000 Water General Obligation Bond issue is to fund two capital projects to be constructed in 1983 and 1984. These projects are as follows: o Foothills System Improvements - Phase II $1,987,000 o Water Treatment Improvements $2,013,000 o Bond Issuance Expenses and Contingency $ 100,000 The Foothills System Improvements - Phase II project consists of the design and construction of approximately 19,100 feet of 16-inch and 24-inch water transmission mains, a four million gallon storage reservoir, and modifi- cations to an existing pump station. These facilities will be located in the general area west of Overland Trail, north of Horsetooth Road, and south of LaPorte Avenue. The purpose of the project is to provide resi- dents on the west side of Fort Collins with more reliable water service with regard to water pressure and fire protection. I The 'dater Treatment Improvements project consists of the design and con- struction of chemical feed facilities at both water treatment plants and -511- November 9, 1982 various piping and filter improvements at Water Treatment Plant No. 2. The purpose of the project is to: (1) correct the present alum carryover problem at 'ATP #1, (2) reduce the water corrosivity at both water treatment plants, and (3) expand the capacity of WTP #2 from 34 MGD to 44 MGD. Information in regard to the negotiated interest rate, to be paid on the Bonds, will be provided prior to the Council meeting." Finance Director Wood briefed Council on this bond issue, on which an AA bond rating was received. This is a negotiated bond sale with Boettcher and Company because of the short time -frame involved. The negotiated net effective interest rate is 9.99%. Councilmember Knezovich asked about the possibility of bond arbitrage. Finance Director Wood stated that this would be possible, and investment income from the arbitrage would go back into the Water Fund. City Attorney Huisjen read proposed amendments to Ordinance No. 136, 1982. Councilmember Clarke made a motion, seconded by Councilmember Reeves, to ' adopt Ordinance No. 136, 1982, on First Reading as amended. Yeas: Coun- cilmembers Cassell, Clarke, Horak, Knezovich, and Reeves. Nays: None. THE MOTION CARRIED. Councilmember Reeves made a motion, seconded by Councilmember Horak, to adopt Ordinance No. 139, 1982, on First Reading. Yeas: Councilmembers Cassell, Clarke, Horak, Knezovich, and Reeves. Nays: None. THE MOTION CARRIED. Resolutions and Ordinances Concerning the Block 31 Project, Adopted Following is the staff's memorandum on this item: "A. Resolution Approving an Intergovernmental Agreement between the City and Larimer County Regarding Purchase of Certain Properties in Block 31. B. Hearing and First Reading of Ordinance No. 137, 1982, authorizing the issuance of Sales and Use Tax Revenue Bonds, dated December 1, 1982, , in the aggregate principal amount of $1,215,000. -512- J November 9, 1982 C. Hearing and First Reading of Ordinance No. 140, 1982, Appropriating Bond Proceeds in the Capital Projects Fund. D. Resolution Authorizing the purchase of Parcel 10 of Block 31. (Ella M. Hull) E. Resolution Authorizing the purchase of Parcel 12 of Block 31. (Anna and Melvin Miller) Enclosed are background memorandums from Ron Wood and Tom Frazier con- cerning the Block 31 Project. At the September 21st Council meeting, Resolutions were adopted authorizing the execution of an agreement for the purchase of real property located in Block 31. At that time, it was stated that negotiations were continuing on the three remaining parcels of the initial acquisition phase. Agreements have now been negotiated with two of the three remaining property owners; therefore, as part of the continued cooperation between the County Commis- sioners and City Council to acquire Block 31, the Commissioners will pass a resolution agreeing to pay 50% of the acquisition costs for the next two parcels purchased in Block 31. The cost of these parcels is $204,000. Resolution A will permit the City to enter into an intergovernmental agreement with the County for the purpose of sharing the costs associated with purchasing these two parcels. The Sales and Use Tax Revenue bonds (B) are being issued at this time, instead of using interim financing, for the acquisition of parcels 12 and 10, and future activities due to market conditions and new I.R.S. regula- tions that go into effect January 1, 1983. The negotiated interest rate, to be paid, on the bonds will be provided prior to the Council meeting. The appropriation ordinance (C) appropriates Sales and Use Tax Bond pro- ceeds in the Capital Projects Fund for the development of Block 31. The proceeds are allocated as follows: Block 31 Project Costs $1,030,000 Bond Issuance Costs 27,000 Appropriated in 1983 Budget for Block 31 (100,000) Total Appropriated in Ordinance $ 957,000 On September 21, 1982, Council approved the purchase of 6 parcels from 5 -513- November 9, 1982 property owners in Block 31. At that time, it was stated that negotiations were continuing on the 3 remaining parcels of the initial acquisition phase. Agreements have now been negotiated with two of the three remaining prop- erty owners as follows: A. Parcel .10, Ella M. Hull, for purchase of Lots 31 and 32 in Block 31, at the purchase price of $100,000. (Resolution D) B. Parcel 12, Melvin C. and Anna Marie Miller for the pur- chase of Lots 38 and 39 in Block 31, at the purchase price of $104,000. (Resolution E) Both agreements have received approval from the Block 31 Steering Com- mi ttee. The 1983 Budget was adopted before the financing for this project was completed. Therefore, a supplemental appropriation for the debt service payments from Sales and Use Tax and the County's contribution will be ' brought to City Council in January, 1983." Councilmember Reeves made a motion, seconded by Councilmember Cassell, to adopt Resolution 82-157 approving the intergovernmental agreement. Counci-lmember Knezovich asked if Larimer County has approved the inter- governmental agreement for the purchase of properties in Block 31. Mayor Cassell stated that the County approved the agreement on November 8, 1982. The vote on the motion to adopt Resolution 82-157 was as follows: Yeas: Councilmembers Cassell, Clarke, Horak, and Reeves. Nays: Councilmember Knezovich. THE MOTION CARRIED. Finance Director Wood stated that this is a negotiated sale with Boettcher and Company, and the negotiated net effective interest rate is 9.6093%. City Attorney Huisjen read proposed amendments to Ordinance No. 137, 1982. Councilmember Clarke made a motion, seconded by Councilmember Reeves, to ' adopt Ordinance No. 137, 1982, on First Reading as amended. -514- November 9, 1982 Jim Creed, 2417 West Mulberry, asked why Boettcher and Company was the sole participant on the three bond issues on this agenda. Finance Director Wood explained that these three bond issues are small and have primarily local interest, and there are time constraints in these cases. He also gave comparisons with recent bond issues in other cities. He also stated that recent studies have shown that net effective interest rates are not affected by whether the bond sale is negotiated or competi- tive. Normally, the City's policy is to go to an open public sale unless it is in the City's best interest to go with a negotiated sale. Sharon Brown, 1406 Oxborough Lane, asked for a description of the property to be acquired and whether a pay -back is anticipated from the 3/4 sales tax. Mayor Cassell described the property being acquired is Block 31 and summa- rized the proposed financing. The vote on the motion to adopt Ordinance No. 137, 1982, as amended was as follows: Yeas: Councilmembers Cassell, Clarke, Knezovich, and Reeves. Nays: Councilmember Horak. THE MOTION CARRIED. Councilmember Reeves made a motion, seconded by Councilmember Clarke, to adopt Ordinance No. 140, 1982, on First Reading. Yeas: Councilmembers Cassell, Clarke, Knezovich, and Reeves. Nays: Councilmember Horak. THE MOTION CARRIED. Councilmember Knezovich stated he relating to acquisition of property with the proposed funding mechanism. would vote against the Resolutions in Block 31, but he has no argument Councilmember Clarke made a motion, seconded by Councilmember Reeves, to adopt the Resolution 82-158 authorizing purchase of property from Ella Hull. Yeas: Councilmembers Cassell, Clarke, and Reeves. Nays: Council - members Horak and Knezovich. THE MOTION CARRIED. Councilmember Reeves made a motion, seconded by Councilmember Clarke, to adopt Resolution 82-159 authorizing purchase of property from Melvin and Anna Miller. Yeas: Councilmembers Cassell, Clarke, and Reeves. Nays: Councilmembers Horak and Knezovich. THE MOTION CARRIED. -515- November 9, 1982 ' Resolution Authorizing the City Manager to Enter into a Contract with Baller Livestock Company Concerning the Purchase of Water Rights, Adopted Following is the staff's memorandum on this item: "Over the past eight months the City has been negotiating with the Baller Livestock Company for 1200 acre feet of water storage rights in the Meadow Creek Reservoir in North Park. The right would yield 754 acre feet of water on an annual average. It has been offered to the City for $1100/A.F. or $829,400. This was discussed with the City Council in executive sessions on March 16, 1982 and May 5, 1982 when the Council set $829,400 as the top limit to be considered. Many factors were considered when this water acquisition was discussed with the City Council. You find attached a thorough report on "The Acquisition of Storage Rights in Meadow Creek Reservoir" prepared by Mike Smith and Dennis Bode. I will preface that report with the following brief comments which are in part intended to respond to Council questions raised during our discussions in March and May. Water from Meadow Creek Reservoir is one of eleven alternative water I resource projects the City has been considering. You find that list of projects attached. When considering a water project the water rights are weighed against our Raw Water Policies. This is explained in detail in the report where the policies are attached. Of particular interest to the City Council was the alternative of acquiring Colorado -Big Thompson water (CBT). An equivalent yield of CBT water would now be available for $1,307,000 at a cost of $1300/unit. This is reviewed in the report. Water conservation through meters as an alternative to acquisition or development of water was discussed with the Council. The City Council has affirmed during work session with the Water Board to continue to make provisions for future water metering in the city. Universal water metering will cost about $4,000,000. The City continues to make substantial progress in water conservation through an active public relations program. This is shown on the attached graph. The graph shows that during any single year precipitation can affect water use but the five year running average of water use continues to decline. It was agreed between Council and the Water Board that we should continue to monitor our water use and to reevaluate meters each time we consider a water acquisition or develop- ment project. Water meters will always remain a water extension oppor- tunity after all other water supply extenders have been exhausted. -516- November 9, 1982 There was some concern about the condition of the Meadow Creek Dam which we know to be leaking. This condition has been extensively studied and monitored during the summer of 1982. The current situation with regard to the condition of the dam and the affect on the water right is covered in a letter from Hydro -Triad, Ltd. Engineers. The Hydro -Triad letter advises the following regarding the leakage: 1. From the water rights standpoint the quantity of water loss from the reservoir is not of concern. 2. From the structural integrity of the dam standpoint, there has been no evidence of any immediate danger of failure of the embankment or abutments due to the seepage condition that now exists. 3. The moderate hazard rating placed on the dam assumes the possi- bility of property damage in case of failure (flooding of agri- cultural lands) but no loss of life would be envisioned. The agreement as presented to the City from Ballers protects the City in two ways. First, the City will have no responsibility for repair or ' maintenance of the dam and reservoir. Second, the agreement provides that Ballers must provide a sign off from the State Engineer as to the confor- mance of the project with state regulations and that there are no impedi- ments to utilizing present or future water storage rights that we might acquire. Section 4 (f) "Fort Collins shall have received the written and signed state- ment of the Colorado State Engineer, or his appointed deputy, to the effect that the Meadow Creek Reservoir is a properly con- structed reservoir, that the plans and specifications and the construction have been approved by him, and that there are no known impediments to the present or future storage of water in the reservoir to its full and decreed capacity." Dennis Bode has been in communication with the Water Commissioner in North Park to determine the situation in the flood plain below the dam. You find a memo covering that discussion. Some concern was expressed by Council that this acquisition would use up all Water Utility reserves for water development. This is true, yet this is the purpose of the reserve. The City could stretch this reserve to retain money for other projects by possibly having this project financed in an amount of say 50% by Anheuser-Busch in meeting their raw water obliga- tion. -517- November 9, 1982 ' This does not need to be decided at this time in that it will take at least several months for the Ballers to meet the conditions of the agreement following any acceptance of the offer to sell. In conclusion the staff has negotiated this acquisition within the frame- work and direction of the City Council. We have attempted to provide answers to questions raised by the Council. The Water Board and staff recommends this acquisition as being in the interest of the City by having a favorable cost factor, optimizing the Michigan Ditch - Joe Wright facil- ities, having reuse potential and being in accordance with established water policy. If the Council decides this water rights acquisition is in the City's interest, authorization by resolution for the City Manager to enter into the agreement is necessary." Councilmember Knezovich made a motion, seconded by Councilmember Reeves, to adopt Resolution 82-156. Roger Krempel, Director of Public Works, summarized the proposed water rights acquisition, which meets the City's raw water policy. This proposal would allow re -use of foreign water that is being brought into the Poudre ' basin. Funds are budgeted in 1982 for water acquisition and development. The Water Board has approved this acquisition. Councilmember Clarke asked about a letter in the agenda packet noting operational problems, and whether these problems have been resolved. Curt. Miller, Project Engineer, stated that the problems mentioned in that letter have been resolved. Councilmember Horak questioned the philosophy of water metering. Director of Public Works Krempel stated that a primary concern of the City's raw water policy is the impact on agriculture. A formal water metering policy will be brought to Council for consideration in the near future. Councilmember Horak asked if the proposal will provide a least -cost solu- tion to supply water, in addition to maximizing use of the Michigan Ditch. He supported developing a long-term plan for cost-effective management. Director of Public Works Krempel stated this is the least costly of the alternatives studied at this time. A computer program is being developed to analyze all facets of the City's water acquisition program. Councilmember Reeves supported this type of water, rights acquisition while cash reserves are available to take advantage of the opportunity. -518- 1 November 9, 1982 Councilmember Knezovich asked about the reaction in Jackson County to this acquisition. Director of Public Works Krempel stated there has been no unfavorable reaction, and the offer did originate with the sellers rather than with the Ci ty. Barbara Rutstein, 2917 Oxford Court, asked if the City is depending on some financing from Anheuser-Busch for this acquisition. Mayor Cassell replied that the City is not counting on any financing from Anheuser-Busch on this, and the project was planned long before current negotiations with Anheuser-Busch. Director of Public Works'Krempel stated that there has been some thought that Anheuser-Busch might possibly acquire half of this water. The vote on the motion to adopt Resolution 82-156 was as follows: Yeas: Councilmember Cassell, Clarke, Horak, Knezovich, and Reeves. Nays:. None. THE MOTION CARRIED. Other Business I. City Manager Arnold reported an October sales tax increase of 7.8%, with the total for the year an increase of 6.6%. 2. Mayor Cassell stated he had received a request from the Salvation Army for Councilmembers to serve as Christmas bellringers. 3. Mayor Cassell stated he had a request from a citizen who wished to address Council about a matter not on the agenda. Jim Creed, 2417 West Mulberry, talked about public disregard for school crossing controls. He suggested giving school crossing guards uniforms and more authority as special police. He also suggested that the police department routinely spend more time on traffic enforcement at school crossings. 4. Councilmember Reeves reported on the Airport Ad -Hoc Committee meeting held November 9th to discuss criteria for development at the airport, ' and the Union Pacific Railroad's mineral rights on the property. -519- November 9, 1982 Adjournment Councilmember Horak made a motion, seconded by Councilmember Reeves, to adjourn the meeting. Yeas: Councilmembers Cassell, Clarke, Horak, Knezovich, and Reeves. Nays: None. The meeting adjourned at 9:02 p.m. _. . ATTEST: V"y Clerk -520- C