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Finance Committee Minutes
JANUARY 14, 2008
Municipal Council of the City of Vermilion
Municipal Complex, 685 Decatur Street, Vermilion, Ohio 44089
In Attendance: S. Holovacs, F. Ostrander, B. Brady, M. Rossini, H. Strickler, D. Roth, J. Gabriel, Mayor Anderson, D. Squires, C. Schmidt, W. Hamilton, B. Kish.
Call to Order: S. Holovacs, Chairperson, RESOLVED THAT this Finance Committee of the Whole does now come to order.
TOPIC ONE: Video Service Provider Fees (Ordinance 2008-2)
S. Holovacs reported that council received an email today regarding an ordinance the City of Brunswick recently passed to charge cable/video service providers that have obtained a video service authorization or renewal pursuant to the authority of the State of Ohio a video service provider fee in the amount of five percent of gross revenues, additionally including advertising revenues. He stated per the email that a customer with extended basic service ($40.40) will have less than an additional 10 cents added as a pass through.
Lee Mayer said the video service provider is to replace franchise agreements throughout the State of Ohio due to passage of SB 117 in September. She said that all franchise agreements are based on the state level and they have capped everything out at five percent with the option of receiving advertisement revenue as well. She said originally when discussion was being made in argument of SB 117, the advertisement revenue was included to be a part of everyone’s agreement and now it has been separated out as an option. She felt that the city should go for the five percent plus the ad revenue based on the fact that there could be a loss of revenue for the City of Vermilion based on SB 117, and until this agreement is in place the city really has no way of knowing what the affects are going to be. She stated that one of the major affects is that there are no more equipment grants given to individual communities based on their ability not to negotiate agreements with individual cable companies. She noted that it is no longer an option to try to get added benefits from franchise agreements. She said that council should also keep in mind that if another video service provider comes to the community and the city doesn’t have an agreement in place with the current cable provider, than this will void any opportunity for the city having an agreement in place if AT&T, Comcast, etc. come into the community. She said that the City of Brunswick over the years has been a forerunner in franchise agreements and has knowledge of what is out there so she felt that their ordinance goes into a little more detail regarding the audit process and how to make sure the money is accounted for, therefore, she recommended that council mimic this ordinance.
S. Holovacs said if the city does adopt Brunswick’s ordinance then he would ask the law director to get into contact with Time Warner to get written confirmation to make sure that all payments should include fees and ad revenue, and are calculated to January 1, 2008; and, to make sure Time Warner Cable is in receipt of our VSP request, and confirm that our allocated channels remain as Channel 2 and Channel 20 in the programming line-up.
L. Mayer stated that there is a clause in SB 117 that says that if your channels are in place prior to the passage of the ordinance then they were to continue keeping the channels, and will not take them away from the community. She said over the years the city lost one of the channels due to lack of use. She said the other two have been continuing to be active (school & community channel).
Mark Neiding stated that Lee Mayer does a nice job with what they have and they need to upgrade the cable studio as much as possible.
Mayor Anderson said in a conversation she recently had with Representative Matthew Barrett he assured her that the legislation was written and the city did meet the 10-day letter of response asking to keep the city’s service currently as is. She said with the enactment of the ordinance the city should be given the time it takes for three readings, so this means this ordinance doesn’t have to be passed tonight. L. Mayer said she didn’t speak with Matthew Barrett so she isn’t sure of this but within the language of SB 117 it is very specific about once the agreement is in place that they can start paying the fee based on 30 days to the first quarter. She said if the city waits too long on this they might not start collecting the fees until the second quarter and she wouldn’t like to see a whole quarter of the year go by without any collection of fees.
S. Holovacs asked the committee if they wanted to mirror the Brunswick ordinance. B. Brady said there seemed to be no down side with going to the five percent on the advertising and it would only help. J. Gabriel said there is a chance that there will be no noticeable increase at all.
S. Holovacs MOVED; B. Brady seconded to mirror the City of Brunswick ordinance to go with the five percent and the five percent of the advertising revenues subject to the final review of the law director and to amend the ordinance as such on the special council meeting. Roll Call Vote 7 YEAS. MOTION CALLED.
H. Strickler asked if council waited until next week to pass legislation would this put the city in jeopardy for not collecting the money for the first quarter. L. Mayer said that if the Mayor was told by Matthew Barrett that waiting wouldn’t jeopardize the financing, then they should go by that. Mayor Anderson said that Matthew Barrett told her that this rigid of a timeline could warrant agreements by the part of the legislature according to the way the legislation was written.
TOPIC TWO: Executive Session – Labor Contracts
J. Gabriel MOVED; B. Brady seconded to adjourn into executive session to discuss labor contracts. Roll Call Vote 7 YEAS. MOTION CARRIED.
TOPIC THREE: Performance Contracts – Ordinance 2007-100
Paul Angersbach of Johnson Controls explained that the process the city has undergone so far is that they have advertised for a request for qualifications and their company has been selected as the firm to put together the performance contracting project for the city. He stated that performance contracting is the ability to leverage future savings to perform energy conservation measures within the city’s infrastructure today. It gives the city the flexibility on the contracting method with regards to manufacture of items and the different subcontractors that the city can use. He stated that the savings are guaranteed and the risk is managed by Johnson Controls. They not only hire the subcontractors, but they project manage the entire project and identify the savings that are guaranteed, and they perform all of the services involved in the performance contract. He said where the city is at right now is there is a project development agreement for $48,000 and this money will not actually be spent by the city directly as long as the city proceeds with some sort of a performance contract. He said the city won’t actually owe them the $48,000 unless the city decides not to go forward with that project.
B. Brady didn’t think repairs and upkeep of equipment seemed to be very concrete expenses. P. Angersbach said they would explain all of this when they present the performance contract to the city. He said as part of their contract there is a large section that describes the methodology that they use to arrive at these figures. He said these figures are very easily obtainable. He said they have around $4 billion active guarantees across the United States and all of them include partly energy and operational savings. He said one way they are obtainable is through the finance department. He said they look through the past year expenditures and through third party affiliations.
J. Gabriel assumed Johnson Controls has already looked around the city buildings and has identified areas of where the city can have savings. He said if the city spends $48,000 and they bring the city the performance items they feel would benefit the city, and the city doesn’t necessarily agree with them or has some financial circumstance, then he assumes Johnson Control’s gets the $48,000 prior to the city seeing what it is. P. Angersbach said they would present the city with a full detailed engineering study. He said they have identified a lot of things within the city that need to be done. He said these are not frivolous type items, but things the city has either identified as being necessary for the continued operations, or they have identified them because the piece of equipment hasn’t failed yet. For example, it is known that the roof at city hall is leaking and needs to be fixed. He stated that the main thrust of this project deals with the city’s water system. This specifically deals with the metering and automatic meter reading of the water system which is impacting and causing the 37 percent unaccounted for water. He said this is about 65 percent to 70 percent of the potential project. He said the city will know for sure what these projects are before the city is committed to spending the $48,000. J. Gabriel confirmed that the city will not be committed to the $48,000 in this contract until they make a final determination of what course of action overall they will be taking. S. Holovacs said once council passes this ordinance then Johnson Controls will prepare the evaluation and at the point they bring it back to the city, and if council doesn’t go along with any of their improvements then the council is on the line for the $48,000 worth of engineering. He said for example if the city goes along with a $1 million project then the $48,000 engineering is worked into the cost.
P. Angersbach said that in order to come up with the preliminary it has taken a long time and they are trying to finalize this, but they are waiting on council to give them the green light.
J. Gabriel asked how they make the final determination after they implement this program on what the actual savings are versus a mild or difficult winter because there are so many variables. He said he is concerned with issues the city is dealing with currently. He said they have a waterline downtown that has to be repaired and increases were made for it and the money was to be set aside, but due to economic reasons the money is not there now, so now the city is faced to put in a large sum of money in downtown that was supposed to be accounted for. He said he is concerned because they have all kind of debt in the city and is worried that they don’t have their financial house in order. He said he is afraid that they may be on the hook for a million dollars and close enough to making one bad decision away from the putting the town in some kind of jeopardy of what he wouldn’t want to be a part of. P. Angersbach stated that HB 300 is the vehicle that allows cities to go through performance contracting and it allows for a 10-year window of paybacks. He said when they analyze the city they can aggregate those savings over 10 years. He stated that they provide an annual report to the city. He said for the next 10 years the city would send them copies of the utility bills and their would be training with staff on building usage, and at the end of the day they are on the hook for those guaranteed savings. He said if they say they will save the city $100,000 a year and then don’t, then they will have to come up with the difference and will write shortfall checks as part of the risk they take in putting these projects together. J. Gabriel said he does have concerns on the city’s financial picture and a lot of it is contributed to economics and implementation of the city’s current system. He said the city has serious shortfalls in major funds. He said the water fund for instance is $200,000 down. He said that he wants to be certain that the city would be extremely disciplined financially to make those kinds of payments. P. Angersbach said that as part of the law any borrowing that the entity does for this type of project does not count against the city’s net indebtedness. He said performance contract is a vehicle to get these projects done in a guaranteed manner.
M. Rossini asked if Johnson Controls has a figure on what the city would save over the $48,000. P. Angersbach stated that the preliminary report submitted to council had estimates in the $2.4 to $2.8 million range as far as a potential savings over the next ten years. He said there would be one contract with Johnson Controls and they would not only do the engineering but also the implementation. M. Rossini asked if those repairs would justify the savings that they are projecting. P. Angersbach stated that this is correct.
B. Brady asked the finance director how he feels about performance contracting. W. Hamilton stated that he has not been involved in this but did have a similar presentation in Medina, but can’t recall why they didn’t go with the performance contracting at that time. He said there is no easy answer.
H. Strickler said on September 7, 2007 there was a memo from the Mayor’s office outlining the date and actions of what the city needs to do for the performance contract and noted that she is a little confused on where the city is in this process. She said the city hasn’t seen a scope of project yet because Johnson Controls will do that after council passes the ordinance. P. Angersbach said tonight they are discussing the project development agreement.
S. Holovacs MOVED; B. Brady seconded to put the third reading of Ordinance 2007-100 on the agenda for January 22. Discussion: F. Ostrander reminded council that the city is waiting on a report from the state auditor on the city’s financial condition and wondered if this would have any affect on that. He said he would rather see this report to see what they can do before moving forward with this. He thought council should wait at least 60 to 90 days before starting something new. H. Strickler said that council is not locking into the big project. They are just saying that they will pay the $48,000 to engineer something and then the city can always back out of it. B. Brady said the argument is that they are going to pay for this with monies they are already spending. Roll Call Vote 6 YEAS, 1 NAY (Ostrander). MOTION CARRIED.
TOPIC FOUR: Council Rules and Regulations
S. Holovacs reviewed with the members of council the rules and regulations. The following changes were made accordingly as listed below:
2008-2009 Vermilion City Council Rules & Regulations
Rule 1 - Regular Meetings
The regular meetings shall be held in accordance with what is stipulated per City Charter. However, if the meeting day falls on a legal holiday, the meeting shall be moved to the following day or otherwise as set by the President of Council. The Council will hold a summer break and other breaks at times to be determined.
Rule 2 - Meeting Agenda Items
Any items introduced by members of Vermilion City Council, City officials and/or department heads shall be considered and allowed on any meeting agenda. An item that is to be read, considered for discussion or action must be submitted to the Clerk of Council no later than 1:00 p.m., on the Thursday preceding the following week’s scheduled Council or Committee meeting. Exceptions shall be considered by Council on a case by case basis, allowing for the determination of the need to address urgent and emergency matters.
Rule 3 - Public Participation
The public shall be provided an opportunity to discuss issues of public and community concern during each regular Council meeting. During the Public Participation (Open to the Audience) section of the Council agenda, each individual wishing to address the Council shall be required to sign in prior to the beginning of the Council meeting. The participant shall sign their name, address, and the subject matter for discussion. Each participant shall be allowed a total of five (5) minutes in which to address the Council. Personal attacks will not be tolerated.
Public participation during committee meetings shall not require any individual sign up. Each participant is requested to try to keep their comments to five (5) minutes. Any additional time will be up to the discretion of the committee chairperson.
When a member of the audience desires to address the Council, he/she shall request permission from the Presiding Officer. Upon receipt of permission, he/she shall confine his/her remarks to the question under debate, avoid personalities, and refrain from impugning or attack upon the motive of any other member’s argument or vote.
Profanity will not be tolerated. If any member of the audience should infringe upon these rules, the act may result in expulsion for the remainder of the meeting at the discretion of the Presiding Officer.
S. Holovacs MOVED, B. Brady to accept Rule 3 as stated above. Roll Call Vote 7 YEAS. MOTION CARRIED.
648.05 DISTURBING A LAWFUL MEETING.
(a) No person, with purpose to prevent or disrupt a lawful meeting, procession or gathering, shall do either of the following: (1) Do any act which obstructs or interferes with the due conduct of such meeting, procession or gathering;
(2) Make any utterance, gesture or display which outrages the sensibilities of the group.
(b) Whoever violates this section is guilty of disturbing a lawful meeting, a misdemeanor of the fourth degree, and shall be subject to the penalty provided in Section 698.02. (ORC 2917.12) Rule 4 - Order of Business
The business at all regular Vermilion City Council meetings shall be transacted in the following order:
1. Call to Order
2. Pledge of Allegiance and Moment of Reflection (Silent Prayer)
3. Roll Call
4. Approval of Minutes
5. Correspondence
6. President of Council’s Report
7. Committee Reports
8. Mayor’s Business Report
9. Safety Director’s Report
10. Service Director’s Report
11. Finance Director’s Report
12. City Engineer’s Report
13. Law Director’s Report
14. Response to the Audience
15. Open to the Audience
16. Old Business
17. New Business
18. Reading of Ordinances
19. Announcement of Meeting Dates
20. Adjournment
The President may permit matters to be introduced out of the regular order for good cause. Each report above should not exceed 5 minutes. Minutes should be summarized and not read in their entirety. Rule 5 - Roll CallEvery member shall be in their seat at the time of Roll Call. Rule 6 - Absent MembersCouncil members shall not be compensated for any meeting of which they are not in attendance. All members of Council shall notify the President of Council at least one (1) day prior with the reason of non-attendance at any regular, special or committee meeting. Council members shall maintain a minimum of 75% attendance within any six (6) month period.Rule 7 - Attendance RequiredThe Mayor, Safety Director, Service Director, Law Director, Finance Director, and City Engineer shall be required to attend all regular and special meetings of the Council, unless otherwise excused by the Mayor and/or President of Council. They shall be required to answer questions from Council relating to matters of the City under their respective supervision. The Mayor and his Directors shall be entitled to participate in the discussion of all questions before the Council.Rule 8 - SpeakingWhen called by the Council President or Chairman, no member of Council or member of the Administration shall be allowed to speak for a period of longer than five (5) minutes at any one time unless permission is granted by the Presiding Officer. No member shall speak more than once on the same matter until each member desiring to speak on the matter has had an opportunity to do so.Rule 9 - Right of FloorWhen a member desires to address the Council, he/she shall request permission from the Presiding Officer. Upon receipt of permission, he/she shall confine his/her remarks to the question under debate, avoid personalities, and refrain from impugning or attack upon the motive of any other member’s argument or vote.Rule 10 - Committee MeetingsA majority of members of the Committee in attendance shall constitute a quorum for the transaction of business. Only members of the Committee shall have voting power on motions put before the Committee. Each Committee shall hold its meetings at such time and place as fixed by the President of Council. The date for all meetings shall be set and announced at regular or special meetings of Council unless deemed an emergency by the President of Council. All matters to be addressed shall be announced to the Chairman prior to the meeting. It is the Chairman’s responsibility to contact the Clerk of Council no later than 1:00 p.m.; on the Thursday preceding the following week’s Committee meeting to review all agenda items. If proper contact is not made, the Clerk has the right to prepare and finalize the agenda. Any additional matters to come before the committee the evening of the meeting shall be approved by the Chairman. The Chairman shall have the right to require the attendance of City Officials, and/or Department Heads, as in his/her judgment will be needed to properly dispose of the matter under consideration. In the event the Chairman is absent the Vice-Chairman shall preside.Rule 11 - Reports from DirectorsDirectors are to issue reports to Council in a timely manner. The Clerk will keep records on all matters referred to Directors, Boards, etc. Any and all correspondence should be directed through the clerk for distribution to the members of Council and the Administration.Rule 12 - Reports of City OfficersAll Ordinances, Resolutions and communications pertaining to matters that come under the supervision and control of the Mayor and Directors shall, in addition to being referred to the proper committees, also be referred to such respective Administrative Officers for recommendation. All reports from City Officers suggesting or recommending action by Council shall, unless otherwise ordered by the Council, be referred to the appropriate committee for consideration.Rule 13 - ViolationIf any member, in speaking or otherwise, violates any of these rules, the President shall, or any member may, call him to order. The question of order shall be decided without debate.Persistent failure to abide by the rules of Council violates Article III, Section 5 of the Vermilion City Charter.All members shall conduct themselves with decorum while in the confines of the Council Chamber. Profanity shall not be tolerated. If any member should infringe upon these rules, the act may result in expulsion for the remainder of the meeting at the discretion of the Council as a whole.Except as provided, the proceedings of the Council shall be governed by Roberts Rules of Order. It shall be the duty of the Presiding Officer to adhere to and enforce such rules together with the rules herein set forth.Rule 14 - Smoking, Etc.Smoking is prohibited in the Council Office, Caucus Room and the Chamber. The use of chewing tobacco and chewing gum should be used with discretion during the Vermilion City Council meetings.Rule 15 - Requests for Public RecordsPublic record requests will be promptly prepared and made available for inspection to any person at all reasonable times during the regular business hours of the Clerk of Council office. Such requests may first be forwarded to the Law Director’s Office for review in order to ensure information protected by Federal and/or State law is not disclosed. Public record requests shall be accommodated as soon as practicable based upon the volume and nature of the requested material and the completion of the legal review, if necessary. Copies of public records shall be provided at a charge of 10¢ per copy and the cost shall be paid in advance.A copy of a public record may be transmitted through the United States mail. The individual making such request is required to pay costs associated with the mailing in advance. Rule 16 - Clerk of Council’s Office - Security of Public Records
Members of Council will not have access to the Clerk of Council’s office after normal business hours or without the presence of the council clerk during regular business hours. Council mailboxes will be located in the Council Conference Room and will be accessible during all hours.
Council members shall contact the Clerk of Council during normal business hours if they need to obtain a public record and the Clerk of Council shall fulfill that request within a reasonable amount of time.
There will be no keys distributed to city council members for access into the clerk’s office or the municipal court (double glass lobby doors).
J. Gabriel MOVED; M. Rossini seconded to amend and accept Rule 16 as the part of the official rules and regulations. Roll Call Vote 7 YEAS. MOTION CARRIED.
TOPIC FIVE: Personnel Committee / Community Improvement
F. Ostrander said that these two committees haven’t met in years. B. Brady said that these two committees are her assignments. In researching the personnel committee, it seemed to her that it could have some function. She said if they look back at the past couple of years an awful lot of problems have been based on personnel issues that council has had to talk about. She said there isn’t a place to put those. She noted that a resident in the city has been working on a personnel handbook. She said that she got a copy of how far she is on it. She thought this would be an excellent thing for this committee to move forward with so they can set up some stated rules for the people who work for them. She said she would like to see this committee meet occasionally when there is reason to do that. G. Fisher noted that there is no personnel committee but it is called the Employee Relations committee and the code would have to be amended. B. Brady said that they just eliminated the economic development group so there may be some place for the community improvement committee. This issue was referred to the February Legislative meeting.
TOPIC SIX: Downtown Watermain Replacement Project (Ordinance 2008-1)
W. Hamilton reported that based on the 2007 revenues year-to-date they are looking at a 2.86 percent increase based on the total project cost. S. Holovacs said that when council discussed the base bid last week, Elite Excavating was the low bid at $213,916. It wasn’t known at that time that if council went with the total alternate bid if Elite would be granted the bid because that was actually higher. He said if council decides to do the base bid then Elite Excavating would be the low bidder, however, if they do the whole project and use the alternate bid then Underground Utilities will be the low bidder. He said that D. Zaleski did issue a legal opinion to this regard.
Pat Stein explained that this is the city’s third grant and anything that was done in the prior grants as far as monies spent for improvements by the city do not count for this particular grant. She addressed a letter in council’s correspondence dated April 19, 2007. She stated that the grant in 2006 was for $400,000 and this time the City is receiving a little over $200,000 in matching funds for the streetscape project. The other is for the downtown businesses and the administrative fees. One of the things in the grant is that the city will be completing improvements at the wastewater treatment plant including upgrades and the total project is $350,000 plus. She stated that the city will upgrade to a 12” waterline on Main Street for $500,000. She said in the application grant this is the amount of money the city was going to spend for these improvements within the downtown area. She said if council decides not to do the improvements they should come up with funds for other projects in the downtown area equal to that amount.
J. Gabriel asked if the city could substitute some of the expenses such as the changing of the water filters for a portion of this and just do the $213,916 project which is more manageable. He said he struggles with the $540,000. P. Stein noted that the vault work was completed by using the last grant.
F. Ostrander asked what kind of cash the city was supposed to be putting into streetscape. D. Squires stated that the monies P. Stein was talking about aren’t really the city’s matching dollars that has to be put in to secure the grant. He said the money the city is putting into streetscape comes from a $400,000 CDBG DTR grant which is 20 percent of the project, which is $900,000 to $1 million. So approximately $200,000 is the city’s portion. P. Stein stated that the city has gotten three grants and each grant has been approximately $400,000 which has been divided partially for downtown businesses and partially for the streetscape project.
B. Sasala explained that the CDBG DTR grants has been set aside from the federal government to help downtowns renovate themselves but they don’t want to be the sole source of the money, so they ask communities to put some city funds into renovating. He said there was about $1.7 million matching funds that the city had to come up with and this is where the downtown waterline and water plant improvements came in as the city’s matching funds. He said if the city doesn’t do it then they will not ask for any money back from the DTR grant ($400,000), but if the city doesn’t do it then the chances in getting a fourth grant are zero. He said the city was $30,000 short with the second grant and they considered that to be close enough in order for the city to get the third grant.
He said that streetscape is a different funding source from MPO and they are using $200,000 from the DTR to cover the city’s balance of that project. The current estimate for that project is between $900,000 and $1 million. If the cost goes over $1 million then there has to be some other funding that matches the 20 percent. He stated that ODOT was in recently and they feel that contracts are coming in a little lower so they feel the city can be within that match. He said there is more than enough in the MPO grant to cover the grant portion but the city just doesn’t have more matching on it. So, there would be approximately $341,000 of the MPO grant that is left over. He said they are going to try to go to the MPO committee to see if the city can use that on another project such as an arterial road.
H. Strickler said in the wastewater rate analysis from 2006 as prepared by former councilman Flak, with all the increases in the water plant that were scheduled, last year it says under projected water improvements that the Liberty Main Watermain Replacement for $540,000 starting in 2007 with the projected increases the City should be getting an extra $43,000 a year. She said her concern is they are now saying they have to raise the rates in addition to be able to pay for this because they don’t know where this $43,000 went and to her this is irresponsible. B. Sasala said that in looking at past rate increases going back to 2002 he noticed that usage went down because people pay attention to what they are doing. He said the money hasn’t been spent; it is just that the water hasn’t been used.
J. Gabriel said that in the rate analysis they estimated an 11 percent increase and that the city was going to take in $1.5 million and then the following year it was $1.7 million. However, the truth is that the city is still down in the $1.4 million range. He said $1.6 million was budgeted and this is the difference. He said the $43,000 a year never materialized. He said every time water rates increase the usage goes down and you’re right back in the same neighborhood of where you started before the water rates increased. He said he is on board with the $213,000 but struggles with the $540,000.
H. Strickler asked P. Stein if any community has ever gotten the fourth grant. P. Stein said yes and noted that she spoke with Lauren from Poggemeyer and the likelihood of the city getting a fourth grant is not as likely as if we take one year off and then go for it.
B. Brady asked where the extra lines run from. D. Squires said the base bid project goes from Grand Street to Exchange Street on Liberty, and then from South Street to the tracks on Main. The alternate bid goes from Exchange to the western side of the bridge.
B. Brady stated that she ran some numbers and asked the finance director if he would bond this project out for 20 years. W. Hamilton said yes. He said as far as the $43,000 it isn’t that they don’t know where the money went that was targeted for this particular improvement. He said there are a lot of variables in the water fund both on the revenue side and the expense side. He said the amount of the debt in the increase for the $500,000 improvement was consumed in the drop of housing which was around $40,000 to $50,000. He said that revenues over a five-year period from 2003 to 2007 (2007 hasn’t been closed yet) they have had an increase of roughly 3.91 percent. He stated that the total expenses for this five-year period have increased by 26 percent. He said they need to examine salaries and chemicals doubled from $60,000 to $120,000 which was unanticipated in the original study that was done on what was known at the time. He wanted council to realize that there are other costs in running a water system in serving 6,000 people.
B. Sasala reported that in 2006 the water plant produced 571,000,000 gallons of water. In 2007, it is estimated that the plant is going to produce 621,000,000, a 50 million gallon increase. He noted that the leaks could be a big part of the increase citing the 16-inch line under the river that was discovered leaking in December. He said there is a concern that there could be another big leak somewhere. He stated that the increase in water production is why chemical costs increased. He said that the city has serious problems with its infrastructure. There are three crossings over the river and if there are more problems in those lines, then the city has big troubles. He said the line leading to the eastside of the city is 100 years old and if it breaks and the 16-inch line is still down, there will be trouble.
B. Brady said on a $540,000 loan for 20 years at four to five percent with over 5,000 residents it would add about 67 and 72 cents, so if they spread this project since it benefits the entire city, and add $1 to the $3 utility fee and use it like a bond issue it may not hurt so much.
J. Gabriel pointed out to the finance director per the comparative list that the total expenditures in the water department was $1.499 million, but on the green bar as of November 2007 it shows the total expenditures year to date as $1.547 million with another outstanding encumbrance of $74,000 on top of that. W. Hamilton stated that he would have to look at this.
B. Brady MOVED; M. Rossini seconded to accept the alternate bid of Underground Utilities in the amount of $536,116 to perform the Downtown Watermain Replacement Project. Discussion: Mayor Anderson made a final plea to council as they considered their vote to ensure that the city has lines that run the full length of the project and get the city the good water lines to the river. She said there could be a possibility of another leak someplace else and if the city doesn’t have good infrastructure the city will be vulnerable getting water to the eastern side of the city. She stated that the city has aging infrastructure and they’re going to have deal with this starting someplace, so to maintain that they can get water from the plant out to other portions of the city would be a good place to start. She said the road will be new on top of the entire remaining old infrastructure. She said even though it is difficult she thinks they have to do the right thing as far as maintaining water supply throughout the city and dealing with the old infrastructure. She said this means they will have to pay for it. She said it is difficult because the Mayor sets the water rates so this will be skin off of her back basically and she will be taking a lot of heat from a lot of residents throughout the city on water rates. The other side is that the city has old failing infrastructure and if they don’t pay for it on the preventative side they will pay for it on the maintenance side, and it’s going to mean more pain for more of the businesses. She said the more boil advisories they have the more days they will have in not supplying water to the businesses and the homes. This means lost revenue and people are going to pay for the neglect of the old infrastructure whether we pay for it upfront or pay for it after the fact. She believes wholeheartedly that this is the responsible thing to do for the residents in the city over the long run. She stated that her popularity is on the line because she will be setting the water rates. She asked council to do the most responsible thing in providing water service to the residents and businesses in the city.
H. Strickler said her concern is that there are so many unknown variables that they will be faced with. She said they don’t even know the cost of fixing the water line underneath the river that is capped off, and to commit to another half million dollars is just more debt that the city is incurring. She said she doesn’t know what the right thing to do is because if they had the money then going with the whole project would be the best thing.
D. Squires said that if they have to put an estimate on repairing the main under the river then he would say it will be $10,000 to $15,000.
Mayor Anderson said this is really important and critical to the welfare of the city. She said they talk about economic development and attracting businesses to the city and they need to have infrastructure to support business and industry coming to the city. She said they cannot continue to do it and attract jobs and growth if they don’t have infrastructure to support it, so this is another reason for considering doing the right thing. She said they are looking at a rate structure that has facilitated debt. The city’s past history with the rate structure and the lack of increasing rates incrementally is what propels the city into a cycle of debt. She said the only way to pay for the improvements and maintenance is through debt. She said the city doesn’t have a rate structure in place to pay for the projects.
Roll Call Vote on above motion. 5 YEAS (Brady, Holovacs, Rossini, Strickler, Ostrander); 1 NAY (Gabriel); 1 ABSTENTION (Roth). MOTION CARRIED.
TOPIC SEVEN: Support of Main Street Vermilion’s Promotional Brochure
S. Holovacs reported that in 2007 the previous council supported by ordinance to authorize the Mayor to make payment of $500 to Main Street for the 2007 promotional brochure.
B. Brady MOVED, F. Ostrander seconded to have legislation prepared mimicking the 2007 ordinance to authorize the payment of $500 to Main Street Vermilion for the 2008 promotional brochure. Roll Call Vote 7 YEAS. MOTION CARRIED.
TOPIC EIGHT: Edson Street
H. Strickler stated that in 2007 council instructed the administration to get RFQ’s to reconfigure the project on Edson Street. She said that council received a base bid from McGuiness Unlimited in the amount of $880.00 and an optional fee in the amount of $1,760. Additionally, council received another quote from CT Consultants in the amount of $3,350. She said she couldn’t tell the difference of the two and asked for guidance from the service director so they could proceed with a motion. D. Squires said they are getting an updated construction cost estimate based on bid quantities so he doesn’t see the need to spend the $3,350. He recommended going with the base bid of McGuiness Unlimited. The base bid is using the quantities established by Michael Benza and the additional option will be to perform a take off of all the bid items for the project and then compare it to the Michael Benza bid tabulation. He recommended that council move forward with the base fee of $880.00.
B. Brady said her only hesitation with this is because Benza was off on the Vermillion Lagoons project.
H. Strickler MOVED; B. Brady seconded to accept the base bid of $880.00 as presented by McGuiness Unlimited. Roll Call Vote 7 YEAS. MOTION CARRIED.
D. Squires reported that the soil borings were performed on Edson Street by H.C. Nutting which he would supply the clerk a copy of. He said there could be two options for Edson improvements, a full depth replacement of asphalt by taking the entire street out or pulverizing what’s in place, stabilizing the sub grade with a cement mix and putting asphalt on top. He said the report also indicated edge drains would be sufficient to prevent moisture from collecting and not a full curb and gutter installation.
S. Holovacs referred discussion of the soil boring study to the January Streets Committee.
TOPIC NINE: Insurance Contract Renewal with Allen-Thorley-Delloyd
S. Holovacs reported that the city’s insurance coverage expired on December 31, 2007. This year’s cost came in at $131,665, which was $5,000 to $6,000 less than last year. G. Fisher noted that the insurance had to go to bid at the end of 2008 and she put it on the tickler file for September so council could authorize the administration to go to bid. The renewal contract is on the Special Council meeting following the committee meetings.
Adjournment: No further business was presented and Chairman Holovacs adjourned the meeting.
The next meeting is scheduled for February 11, 2008 at 7:00 p.m.
Note: Unofficial meeting minutes. Changes may be pending.
1/19/08
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