City Council

Thursday, February 7,2002
Minutes



ST. GEORGE CITY COUNCIL MINUTES
REGULAR MEETING
FEBRUARY 7, 2002, 4:00 P.M.
CITY COUNCIL CHAMBERS

PRESENT:
Mayor Daniel D. McArthur
Council Member Suzanne Allen
Council Member Rod Orton
Council Member Sharon Isom
Council Member Bob Whatcott
Council Member Larry Gardner
City Manager Gary Esplin
City Attorney Jonathan Wright
City Recorder Gay Cragun

OPENING:
Mayor McArthur called the meeting to order and welcomed all present. The salute to the flag was led by Kyle Bundy and the invocation was offered by Glen Bundy.

Mayor McArthur congratulated Marc Mortensen on a successful torch run and thanked the citizens of St. George for supporting the torch relay.

AWARD OF BID:
Consider award of bid for the annual road rehabilitation project.

City Manager Gary Esplin presented two bids received for the City's annual overlay project:

Western Rock $147,926.85
AT Asphalt $158,006.99

He recommended award to the low bidder, Western Rock, in the amount of $147,926.85.

A motion was made by Council Member Isom and seconded by Council Member Orton to award the bid to Western Rock in the amount of $147,926.85. Mayor McArthur called for a vote, as follows:

Council Member Isom - aye
Council Member Orton - aye
Council Member Allen - aye
Council Member Gardner - aye
Council Member Whatcott - aye

The vote was unanimous and the motion carried.

AWARD OF BID:
Consider award of bid for a concrete waterway repair and replacement project.

City Manager Gary Esplin advised that although bid solicitations were sent to eleven bidders, only one bid was received, as follows:

Syphus Construction $49,545

Mr. Esplin explained that although the bid amount is more than funds budgeted for the project, the actual structure is in worse shape than originally thought and must be repaired. He recommended award of the bid to Syphus Construction in the amount of $49,545.

A motion was made by Council Member Gardner and seconded by Council Member Whatcott to award the bid to Syphus Construction in the amount of $49,545. Mayor McArthur called for a vote, as follows:

Council Member Gardner - aye
Council Member Whatcott - aye

St. George City Council Minutes
February 7, 2002
Page Two

Council Member Allen - aye
Council Member Isom - aye
Council Member Orton - aye

The vote was unanimous and the motion carried.

AWARD OF BID:
Consider award of bid for the purchase of transformers for the Power Department.

City Manager Gary Esplin presented three bids received:

Western States $39,391
(With load losses) $315,225.28

Northen Power $39,396
(With load losses) $314,690.86

Royal dba CED $38,340
(With load losses) $320,124.84

He commented that after evaluation of load losses, it is recommended the bid be awarded to the low bidder, Northern Power.

Deputy Water and Power Director Phil Solomon advised approval is requested for the amount of purchase only - $39,396.

A motion was made by Council Member Orton and seconded by Council Member Allen to award the bid to Northern Power in the amount of $39,396. Mayor McArthur called for a vote, as follows:

Council Member Orton - aye
Council Member Allen - aye
Council Member Whatcott - aye
Council Member Gardner - aye
Council Member Isom - aye

The vote was unanimous and the motion carried.

FIRE DEPARTMENT ORDINANCE:
Consider approval of an ordinance replacing Sections 3-1-1, St. George City Code, relating to the St. George Fire Department.

City Manager Gary Esplin explained that as a result of the codification process, this ordinance is being recommended for approval.

City Attorney Jonathan Wright explained the last time the City codified its ordinances was in 1962, and codification consists of compiling the City's ordinances in book form.

A motion was made by Council Member Gardner and seconded by Council Member Isom to approve the ordinance as presented. Mayor McArthur called for a roll call vote, as follows:

Council Member Gardner - aye
Council Member Isom - aye
Council Member Allen - aye
Council Member Orton - aye
Council Member Whatcott - aye

The vote was unanimous and the motion carried.



St. George City Council Minutes
February 7, 2002
Page Three

EMPLOYMENT AGENCY ORDINANCE:
Consider approval of an ordinance amending Title 5, Chapter 1, Section 21, St. George City Code, to prescribe special business license requirements for employment agencies.

Council Member Whatcott commented that employment agencies may have thousands of employees, yet the business license application fee is capped at $350 and therefore many employees are not covered under this fee. He inquired if this had been taken into consideration.

City Manager Gary Esplin commented that the matter could be researched and brought back for consideration by the City Council in an amendment form.

A motion was made by Council Member Whatcott and seconded by Council Member Orton to approve the ordinance as presented, with staff presenting an amendment at a later date to cover the matter raised by Council Member Whatcott. Mayor McArthur called for a roll call vote, as follows:

Council Member Whatcott - aye
Council Member Orton - aye
Council Member Allen - aye
Council Member Gardner - aye
Council Member Isom - aye

The vote was unanimous and the motion carried.

FIRE CODE ORDINANCE:
Consider approval of an ordinance adopting the 2000 Edition of the International Fire Code.

City Manager Gary Esplin explained that every three years the City must update its building and fire code ordinances to comply with State law. In the past the City has adopted the State codes for consistency.

City Attorney Jonathan Wright explained that while the codes are mandated by the state, local discretion is given in some things.

Council Member Gardner expressed concern that there be opportunity for the City to tailor the codes to fit the local community, and the Chief Building Official should have discretion to decide what does and does not apply to our City. He made a motion to approve the ordinance as presented.

City Manager Gary Esplin explained that the City Council must decide what fee schedule to adopt for building permits. The City currently uses the 1991 UBC schedule. The permit fee covers the City's cost of the inspection program, enforcing standards, etc. and the City has always tried to keep its fees down, but it has been ten years since the schedule was changed. He recommended the 1994 UBC building permit fee schedule be used.

Council Member Whatcott inquired if Finance Director Phil Peterson had done an analysis to see where the City is at with regard to expenditures vs. collections.

Mr. Peterson replied that the City takes in $750,000 a year, more than the cost of the department, excluding the planning commission, engineering, and staff time. However, he could make a further analysis and report back to the Council at a later date.

Council Member Orton inquired that if other communities were adopting the 1997 UBC schedule, why didn't the City of St. George do so.

City Manager Gary Esplin responded that the City does not want to have a surplus, but wants to charge only enough to cover its costs. Building permit fees can only be used to cover costs of inspections, etc.


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February 7, 2002
Page Four

A motion was made by Council Member Gardner and seconded by Council Member Allen to approve the fire code ordinance as presented. Mayor McArthur called for a roll call vote, as follows:

Council Member Gardner - aye
Council Member Allen - aye
Council Member Isom - aye
Council Member Whatcott - aye
Council Member Orton - aye

The vote was unanimous and the motion carried.

INTERNATIONAL RESIDENTIAL CODE ORDINANCE:
Consider approval of an ordinance adopting the 2000 Edition of the International Residential Code.

A motion was made by Council Member Allen and seconded by Council Member Gardner to adopt the ordinance as presented under the City's present fee schedule. Mayor McArthur called for a roll call vote, as follows:

Council Member Allen - aye
Council Member Gardner - aye
Council Member Orton - aye
Council Member Whatcott - aye
Council Member Isom - aye

The vote was unanimous and the motion carried.

INTERNATIONAL PLUMBING CODE ORDINANCE:
Consider approval of an ordinance adopting the 2000 Edition of the International Plumbing Code.

A motion was made by Council Member Isom and seconded by Council Member Allen to approve the ordinance as presented. Mayor McArthur called for a roll call vote, as follows:

Council Member Isom - aye
Council Member Allen - aye
Council Member Whatcott - aye
Council Member Orton - aye
Council Member Gardner - aye

The vote was unanimous and the motion carried.

INTERNATIONAL MECHANICAL CODE ORDINANCE:
Consider approval of an ordinance adopting the 2000 Edition of the International Mechanical Code.

A motion was made by Council Member Orton and seconded by Council Member Isom to approve the ordinance as presented. Mayor McArthur called for a roll call vote, as follows:

Council Member Orton - aye
Council Member Isom - aye
Council Member Allen - aye
Council Member Gardner - aye
Council Member Whatcott - aye

The vote was unanimous and the motion carried.

INTERNATIONAL FUEL GAS CODE ORDINANCE:
Consider approval of an ordinance adopting the 2000 Edition of the International Fuel Gas Code.


St. George City Council Minutes
February 7, 2002
Page Five

A motion was made by Council Member Whatcott and seconded by Council Member Orton to approve the ordinance as presented. Mayor McArthur called for a roll call vote, as follows:

Council Member Whatcott - aye
Council Member Orton - aye
Council Member Gardner - aye
Council Member Isom - aye
Council Member Allen - aye

The vote was unanimous and the motion carried.

INTERNATIONAL BUILDING CODE ORDINANCE:
Consider approval of an ordinance adopting the 2000 Edition of the International Building Code.

A motion was made by Council Member Gardner and seconded by Council Member Whatcott to approve the ordinance as presented. Mayor McArthur called for a roll call vote, as follows:

Council Member Gardner - aye
Council Member Whatcott - aye
Council Member Isom - aye
Council Member Allen - aye
Council Member Orton - aye

The vote was unanimous and the motion carried.

INTERLOCAL AGREEMENT RESOLUTION:
Consider approval of a resolution approving an interlocal agreement between the St. George Housing Authority and Washington County.

City Manager Gary Esplin advised the City Council previously approved this agreement, but it should have been done by resolution. This is merely a housekeeping item.

A motion was made by Council Member Gardner and seconded by Council Member Isom to approve the resolution as presented. Mayor McArthur called for a roll call vote, as follows:

Council Member Gardner - aye
Council Member Isom - aye
Council Member Allen - aye
Council Member Whatcott - aye
Council Member Orton - aye

The vote was unanimous and the motion carried.

PRELIMINARY PLAT APPROVAL:
Associate Planner Mark Bradley explained that the Planning Commission, at its meeting held January 22, 2002, recommended approval of the preliminary plat for Silver Creek Phase IV. A motion was made by Council Member Isom and seconded by Council Member Orton to approve the preliminary plat. Mayor McArthur called for a vote, as follows:

Council Member Isom - aye
Council Member Orton - aye
Council Member Whatcott - aye
Council Member Gardner - aye
Council Member Allen - aye

The vote was unanimous and the motion carried.


St. George City Council Minutes
February 7, 2002
Page Six

PRELIMINARY PLAT APPROVAL:
Associate Planner Mark Bradley explained that the Planning Commission, at its meeting held January 22, 2002, recommended approval of the preliminary plat for Cox Landing Phase II. A motion was made by Council Member Whatcott and seconded by Council Member Orton to approve the preliminary plat. Mayor McArthur called for a vote, as follows:

Council Member Whatcott - aye
Council Member Orton - aye
Council Member Allen - aye
Council Member Isom - aye
Council Member Gardner - aye

The vote was unanimous and the motion carried.

PRELIMINARY PLAT APPROVAL:
Associate Planner Mark Bradley explained that the Planning Commission, at its meeting held January 22, 2002, recommended approval of the preliminary plat for The Springs Estates Phase II. This area is part of the defined water pressure study area. The Planning Commission reminded the applicant that the plat is moving forward with the understanding that if the water pressure issue is not resolved in the estimated time frame, the project may be on hold until further resolution.

A motion was made by Council Member Orton to approve the plat.

City Manager Gary Esplin advised that the City has a signed agreement with State Trust Lands for the water tank site, approval from Dixie REA for location of the pump station, and the City is in possession of the tank and is ready to proceed with the project.

Council Member Gardner commented that the Water and Power Board estimates the tank project will be finished by mid-June.

Council Member Orton's motion for approval was seconded by Council Member Whatcott. Mayor McArthur called for a vote, as follows:

Council Member Orton - aye
Council Member Whatcott - aye
Council Member Allen - aye
Council Member Gardner - aye
Council Member Isom - aye

The vote was unanimous and the motion carried.

FINAL PLAT APPROVAL:
Associate Planner Mark Bradley explained that the Planning Commission, at its meeting held January 22, 2002, recommended approval of the final plat for North Bloomington Commercial Center. This is the Wal-Mart site. Development of the remaining lots will require an amendment to the PD Commercial Zone for site plan and building elevation review and approval in a public hearing.

A motion was made by Council Member Whatcott and seconded by Council Member Orton to approve the final plat and authorize the Mayor to sign it. Mayor McArthur called for a vote, as follows:

Council Member Whatcott - aye
Council Member Orton - aye
Council Member Gardner - aye
Council Member Isom - aye
Council Member Allen - aye

The vote was unanimous and the motion carried.

St. George City Council Minutes
February 7, 2002
Page Seven

LOT SPLIT:
Associate Planner Mark Bradley explained that the Planning Commission, at its meeting held January 22, 2002, recommended approval of a lot split adjacent to the Foremaster Ridge Subdivision located on Foremaster Drive subject to site distance approval for accesses. This four acre parcel will be split from the Foremaster land for a future church site. This is the replacement site to the parcel the LDS Church owned where the new IHC hospital will be located. The area to the south and west of the site will be future residential development. A conditional use will be required for the use.

A motion was made by Council Member Orton and seconded by Council Member Gardner to approve the lot split subject to the recommendations of the Planning Commission. Mayor McArthur called for a vote, as follows:

Council Member Orton - aye
Council Member Gardner - aye
Council Member Allen - aye
Council Member Isom - aye
Council Member Whatcott - aye

The vote was unanimous and the motion carried.

CONDITIONAL USE PERMIT:
Consider a request for approval of a conditional use permit for a new senior citizens center to be built behind the existing building at 245 North 200 West. Randy Smith, agent.

Associate Planner Mark Bradley explained that the Planning Commission, at its meeting held January 22, 2002, recommended approval. The existing building will be replaced with the new proposed building. The Planning Commission felt 115 parking spaces were adequate for the use along with a shared parking agreement with the Catholic Church and bus service.

Randy Smith, architect for the project, advised that construction will be completed by March, 2003.

A motion was made by Council Member Gardner and seconded by Council Member Whatcott to approve the conditional use permit. Mayor McArthur called for a vote, as follows:

Council Member Gardner - aye
Council Member Whatcott - aye
Council Member Allen - aye
Council Member Isom - aye
Council Member Orton - aye

The vote was unanimous and the motion carried.

CONDITIONAL USE PERMIT:
Consider a request for approval of a conditional use permit for a garage height increase at 306 South Main to match the pitch of the historical home at 306 South Main. Bruce Jones, agent.

Associate Planner Mark Bradley advised that the Planning Commission, at its meeting held January 22, 2002, recommended approval. The garage height will be increased to 19 feet in order to match the pitch of the historic home.

Council Member Allen declared a conflict of interest as her husband is doing the electrical work on the garage.

A motion was made by Council Member Orton and seconded by Council Member Isom to approve the conditional use permit. Mayor McArthur called for a vote, as follows:


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February 7, 2002
Page Eight

Council Member Orton - aye
Council Member Isom - aye
Council Member Whatcott - aye
Council Member Gardner - aye

Council Member Allen did not vote. The motion carried.

LICENSE AGREEMENT FOR UPGRADE TO UTILITY BILLING SYSTEM:
Consider approval of a license agreement for an upgrade to the City utility billing module with Eden Systems.

City Manager Gary Esplin advised that Eden Systems in very busy and approval of this agreement will allow the City to be calendared into their schedule.

A motion was made by Council Member Isom and seconded by Council Member Allen to approve the license agreement. Mayor McArthur called for a vote, as follows:

Council Member Isom - aye
Council Member Allen - aye
Council Member Gardner - aye
Council Member Whatcott - aye
Council Member Orton - aye

The vote was unanimous and the motion carried.

CONTRACT MODIFICATION:
Consider approval of a contract modification with Rosenberg Engineers for the Ft. Pearce remediation project.

City Manager Gary Esplin explained there have been significant changes from the original design, as well as volunteer efforts on the project. The original design and concept has changed, and the recommendation from the Engineering Department is to approve the contract modification for additional work.

A motion was made by Council Member Gardner and seconded by Council Member Orton to approve the contract modification. Mayor McArthur called for a vote, as follows:

Council Member Gardner - aye
Council Member Orton - aye
Council Member Allen - aye
Council Member Whatcott - aye
Council Member Isom - aye

The vote was unanimous and the motion carried.

CONSTRUCTION ENGINEERING CONTRACT:
Consider approval of a construction engineering contract with Sear Brown for the Man O War Bridge project.

Project Engineer Roger Bundy explained that the bids for the construction portion of the project were favorable. Mr. Bundy explained that Sear Brown was selected for engineering services because they did the original design for the project and it makes sense for them to follow through with the project. The project is expected to begin within six weeks and should be completed by the first of June. Landscaping and replanting will take place in October and will be finished by the end of the year, but this is totally separate from the bid.

A motion was made by Council Member Orton to approve the City's portion of this contract with Sear Brown in an amount not to exceed $126,297. The motion was seconded by Council Member Isom. Mayor McArthur called for a vote, as follows:


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February 7, 2002
Page Nine

Council Member Orton - aye
Council Member Isom - aye
Council Member Allen - aye
Council Member Whatcott - aye
Council Member Gardner - aye

The vote was unanimous and the motion carried.

UPDATE ON RIVER ROAD PROJECT:
Council Member Isom requested an update on the River Road project.

Jerry Amundsen from Sear Brown advised that paving of the east side of the north end of the project will begin tomorrow. Two more layers will be installed when temperatures allow.

LEASE AT AIRPORT:
Consider approval of a lease agreement with the FAA for space at the St. George Municipal Airport.

A motion was made by Council Member Orton and seconded by Council Member Whatcott to approve the lease. Mayor McArthur called for a vote, as follows:

Council Member Orton - aye
Council Member Whatcott - aye
Council Member Allen - aye
Council Member Isom - aye
Council Member Gardner - aye

The vote was unanimous and the motion carried.

PUBLIC HEARING/AMEND GENERAL PLAN LAND USE MAP/ORDINANCE:
Public hearing to consider a request for approval of an amendment to the General Plan Land Use Map to designate the area bounded by Mall Drive/Riverside Drive/1990 East Street from medium density residential to high density residential. Basic Investment, Inc., applicant.

Community Development Director Bob Nicholson explained that the Planning Commission recommended approval. The site consists of 12 acres. The General Plan shows most of the property as medium density, five to nine dwelling units per acre, and the property is zoned R-2. The applicant would like to build apartments, but an apartment complex will not meet current zoning. The Planning Commission feels the site is suitable for higher density apartments. The applicants intend to come back with a request for PD zoning or something else to pursue this project.

Darcy Stewart advised he represented the owners, and it is their intent to build a Class A apartment complex with a nice amenity package, including a clubhouse, pool, small movie theater, car wash area, etc. The project will be heavily landscaped around the perimeter and will be patterned after complexes in Las Vegas and Phoenix. Mr. Stewart explained that part of the problem with the property is the cost of improving two major arterial. Therefore, there needs to be a density increase to help make up the cost of doing that. A single family or duplex project would be difficult or impossible to make work from a financial standpoint.

Mayor McArthur opened the public hearing. There being no public comment, Mayor McArthur closed the public hearing.

A motion was made by Council Member Allen and seconded by Council Member Isom to approve the amendment to the General Plan Land Use Map as requested. Mayor McArthur called for a vote, as follows:



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February 7, 2002
Page Ten

Council Member Allen - aye
Council Member Isom - aye
Council Member Gardner - aye
Council Member Whatcott - aye
Council Member Orton - aye

The vote was unanimous and the motion carried.

PUBLIC HEARING/WATER AND POWER RATE SCHEDULE/RESOLUTION:
Public hearing to consider proposed adjustments to the water and power rate schedules for the City of St. George.

Mayor McArthur advised that the City has put off a rate increase as long as possible and has not had one since the early 90's. The City will lose all of its reserve if an adjustment is not made now.

City Manager Gary Esplin explained that the City's resource pool is being depleted as the City's growth rate continues at 6% per year. To accommodate the City's capital improvement program for the next ten years, an increase in water rates is necessitated. The last power rate increase was in 1991 and it is now also necessary to consider a rate increase. The Water and Power Board recommends approval.

Water and Power Director Wayne McArthur then made a power point presentation on the proposed water rate adjustment and reviewed proposed improvements. He recommended that a 15% general water rate increase be implemented February 15, 2002 on all classes of customers.

Mayor McArthur explained that impact fees are a one time payment to buy into the system and help pay for infrastructure. There are only certain things impact fees can be used for, and rates are what pay for usage and running the system.

Council Member Whatcott commented that both the Kemp and Alpha studies recommended yearly cost of living adjustments to the rates and impact fees.

Mr. McArthur suggested that a cash flow model be set up to look at needs over the next five years and adjustments be made accordingly every year.

Council Member Orton stated it was important to note what the City is trying to accomplish, and that is to build a minimum reserve.

Mr. McArthur stated the City should have $1,250,000 in its reserve in the Water Department, with the goal being to maintain the reserve, not build it.

Council Member Gardner commented that the intent of the Water and Power Board, and its recommendation, has not been to make money, but simply not to go broke and provide the best service it can at a minimum cost.

Council Member Isom commented the City is also encouraging conservation, but
if conservation is not being done voluntarily, the City should mandate it.

Council Member Allen suggested that through the licensing process for landscapers and those who perform landscape maintenance, standards be put in place for them to follow, as education is the key to conservation.

Mr. McArthur advised that six months ago a committee was formed to draft landscaping standards. A green conference is also being held in St. George to educate landscapers and others.

City Manager Gary Esplin commented that if the City continues to grow at 6%, resources must be identified. The other alternative is not to grow, but growth affects the overall economy and is the driving force of what makes St. George great. The City cannot meet the current growth rate without locating new resources. One answer is to try and reduce the amount used during the

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February 7, 2002
Page Eleven

summer through conservation, but there was no voluntary conservation last year.

Mr. McArthur advised that Tucson and Phoenix use 150-200 gallons per capita per day, whereas St. George uses 350 gallons per capita per day. Even with the proposed increase, St. George's water rates will be much less than theirs, and will be competitive within Washington County and the State of Utah.

City Manager Gary Esplin reminded that the golf courses are watered with irrigation quality water, and not culinary water.

Mr. McArthur stated that homes in Tucson and Phoenix do not have lawns, and this makes a lot of difference.

Mr. Esplin advised that the City's Demonstration Garden will show how xeriscaping can make a yard green and attractive without consumption of a lot of water.

Water and Power Director Wayne McArthur then made a power point presentation on the power rate adjustment. Load duration and use patterns were also reviewed.

Council Member Gardner advised that the Water and Power Board has wrestled with this issue and has tried to solve it from every angle. The Water and Power Department has been active trying to maximize City dollars for power purchases on a hourly basis, but the government stepped in and capped wholesale power rates and this has cost UAMPS $40,000,000. Additionally, St. George is not the only City hurting. Logan has already used all its reserves and is using General Fund dollars to help pay its power bill. He advised that two years ago the City had $15,000,000 in its reserves, but is now down to $4,000,000-$5,000,000. The City does not want to raise rates, but if it did not it would be bankrupt and lose its bonding ability as a City and its fiscal responsibility. He expressed hope that the public would understand the dilemma the City was in and how difficult it has been to deal with.

Council Member Orton reminded that the City's goal is not to make money or build a large reserve, but to cover its power costs and maintain a certain level of service.

Water and Power Director advised that $4,000,000 to $5,000,000 was needed as a reserve in the Power Fund, and that is where the City is currently at.

City Manager Gary Esplin advised the City's cost is 5.6? per kW to purchase power only, then it has be distributed and lines and substations maintained.

Mr. McArthur presented a graph depicting the cost and revenue per kW from 1991 to 2001. He advised that the Water and Power Board recommends a 40% increase in power rates across the board to all classes of customers effective February 15. He then presented a graph of rate comparisons for cities in Utah.

Mayor McArthur stated that some speculate that power costs will come down, and if they do, rates can be adjusted to reflect the decrease.

Water and Power Board Chairman Ross Hurst explained that the vote of the Water and Power Board to raise power rates 40% was not unanimous as he wanted to raise rates 45%. He advised that even with a 40% increase, only $900,000 would be added to the reserve over the next three years, and this is not sufficient to meet bonding requirements. The difference in raising rates 40% to 45% makes the difference of being at the bottom line or raising the reserve to where it is barely respectable. He explained that the City has not responded often enough in the past to market conditions, and it needs to adjust to the market more often due to the complicated nature of the business. He asked if anyone felt they could buy power for 6? and sell it for 4? and make money, to please show him how this can be done.

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February 7, 2002
Page Twelve

Council Member Whatcott commented that every member of the City Council pays for power, and in addition has a business for which they also have to pay. They are getting a double whammy as business owners, but the bottom line is the City cannot buy power for 6? and sell it for 4?.

Council Member Gardner thanked Chairman Ross Hurst and members of the Water and Power Board for their hard work. He stated theirs was not an easy task, but it was easy to sit on the sidelines and cast stones.

Mayor McArthur commented that while a 40% increase sounded like a lot, the City is trying to be conservative and is trying to sell its power for the lowest price it can. He then opened the public hearing. He commented that a public hearing on an increase in impact fees will be heard at a later date.

Gil Nicola, a resident of the Santa Fe Planned Unit Development, stated he understood the argument that impact fees impact the total amount of money in small ways, but if the Kemp Burdick study was based on wrong assumptions, then the conclusions were also wrong. The study says that existing water and power users contribute to increasing demands, but this is rationale advanced to justify forcing existing homeowners to subsidize new growth. The Association of Planned Unit Developments and Condominiums thinks this is an incredible argument as almost all PUD residents are retired and do not have families. The study also cites additional electrical appliances, but once a unit is purchased in a PUD, all appliances are in. The study also cites additional landscaping, but this is not allowed in a PUD. With rare exception landscaping water has been converted to drip systems and water usage has been reduced by at least 20%. The study cites expansion and remodeling as a factor, but this also is not allowed in a PUD and is prohibited by the CC&Rs. He commented that growth should pay for itself and should happen at a natural rate. Sustaining growth by subsidizing impact fees creates artificial growth and this accelerated growth strains infrastructure which has not been able to keep up. Ratepayers were assessed a surcharge last year as the infrastructure was behind the curve, and the City scrambled for money. The response to meet this crisis was more costly than it should have been. The cost of a new home is very little more than a comparable existing home, and impact fees have not been raised since 1995 and should have been increased by 15%. There are over 1200 homes currently on the market, not including those for sale by their owners, and many in PUDs cannot be sold for what was paid for them in 1995.

Virginia Bacaloon, a resident of an adult community on Dixie Downs Drive, expressed concern that the City was charging customers to read the meter. She commented that several people in the park would be glad to read meters, and other cities do not charge a customer charge. She expressed concern that the sewer charge was the same for a single person as a family, and charging the same fee per household was not fair. She explained that a power rate increase would be difficult to manage on a fixed income. She expressed concern that the City Council made its own rules.

Council Member Gardner replied that Logan City, Hurricane City, Payson City, and others charge a customer charge.

Paul Carter, a resident of the Crystal Lakes PUD, suggested that water features in projects be eliminated and landscape personnel be licensed and learn about water conservation. He suggested a moratorium on construction take place until some of the water and power problems could be worked out, as water and power rates are driven by growth. He stated the rate increase would affect retired people on fixed incomes and he inquired if the City had a plan for those who would not be able to pay their bills.

John Wells, as resident of Sports Village, stated when he was in business he had 1,300 employees and he did not pay them to try, he paid for results. He disputed Council Member Whatcott's statement that businesses suffered when rates went up, as businesses pass on the increase to their customers, and the customers end up paying for that increase too. He stated that City Manager

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February 7, 2002
Page Thirteen

Gary Esplin and Water and Power Director Wayne McArthur know that homeowner associations are paying 20% more for water than others, and they agreed to do something about it, but he has not heard what that would be. He stated that if impact fees had been increased every year in accordance with other rates, this would have made a difference in how much rates would need to be raised now. He inquired what the difference would have been if growth was 3% rather than 7.5%. He also inquired where the non-culinary water used on golf courses came from, and if it could be converted to culinary use. He stated that current residents are paying for growth and those creating it should pay for it.

Mayor McArthur replied that irrigation water may come from wells or rivers, and the cost of treating this water with high salinity would be higher in cost than the water the City has a chance to purchase out of the new reservoir. Some of this water even contains arsenic, and the City must abide by federal regulations in providing water. He agreed that valid points had been made about the size of meters in PUDs, and advised that the City will come up with some type of solution to this problem in the future.

In response to jeers and rude comments from the audience, Council Member Orton remarked that some of the comments made were out of line and inappropriate. He advised that not one person on the City Council is benefitting from the rate increase and the City could not be blamed because national power rates had gone up.

Gerald Story, a resident of a PUD, inquired if there were recognition that PUD homeowners pay more per gallon of water than individuals homeowners pay.

City Manager Gary Esplin replied the City recognized there needed to be an adjustment in rates in PUDs and this will be addressed at some point in the future. However, the rate increase is needed now to cover the City's water usage for the next five years.

Mr. Story inquired if there would be further discussion of this issue and a modification made before the water rate increase takes effect.

Mayor McArthur replied the rate increase would take place first.

Mr. Story inquired when the issue would be discussed.

Mr. Esplin replied the issue would be addressed within the next several months.

Mr. Story inquired if funds were generated by utility rates for capital expenditures.

Mr. Esplin replied that impact fees in the Power Department cover the cost of local capital. The rate payer is covering the need to obtain new power resources.

Mr. Story inquired if utility rates were also used to pay capital expenditures.

Mr. Esplin replied that they are, and the 15% water increase would cover the cost of building a new pipeline from Quail Creek to St. George, and will be used to drill new wells and cover the cost of bonding to do improvements.

Mr. Story recommended that the City Council table action on the rate increase until action is also taken on the impact fee increase.

Mr. Esplin replied that even if the City were to raise impact fees to the maximum allowed, this still would not raise enough money to do the projects currently planned, and in any event would only save 3% of the 40% proposed power increase.



St. George City Council Minutes
February 7, 2002
Page Fourteen

Council Member Orton advised that any delay in the rate increase would deplete the rest of the City's reserve.

Tyler Nelson commented that her home which she bought in 1995 can almost be sold now for its original price. She stated she felt existing homeowners were being run out of the marketplace, and that homes in PUDs are selling for exactly what they were seven years ago. She stated she disagreed with Council Member Gardner's comment that everyone is profiting from growth, and that impact fees should be tied to rates, and if impact fees had been raised steadily in the past, a large rate increase would not now be needed.

City Manager Gary Esplin replied that the City must follow State law in its process to raise impact fees, and there are specific notice and advertising requirements which must be followed. The City will follow these guidelines, but in any event impact fees cannot be used for anything other than capital. They cannot be used for operating costs or to buy power, and they cannot be added to the reserve.

Ms. Nelson inquired if impact fees were supposed to pay for growth.

Mr. Esplin replied that impact fees could never pay for the total cost of growth, as the State has limited what can be charged, and even if the City charged 100% of the maximum allowed, it would still not pay for all that is needed.

Ms. Nelson stated that the retired community on fixed incomes does not profit from growth, and not only do they pay for it in increased rates, but then pay again when they cannot sell their homes.

Ben Morewear questioned whether the increase in rates is due to the cost of the product or a catch-up for lack of a rate increase in previous years, or a combination of both.

Mr. Esplin replied the increase is due to the cost of purchasing power.

James Francis, a resident of a townhome project, commented that people who live in PUDs cost the City less, as 15-60 homes are put on one meter and the City has only to send one bill.

Mr. Esplin replied that the costs charged are for more than simply reading the meter. On the other hand, PUDs pay less when they hook onto the City's system, and the impact fee is based on those fewer connections.

Mayor McArthur commented that the impact fee was paid by the developer, however, rather than homeowner.

Jerry Campbell, a resident of Vista Del Sol, suggested that impact fees be raised to 100% of the maximum amount allowable to help defray costs. He stated that growth should pay for itself.

City Manager Gary Esplin replied that the City must justify whatever ir charges. The City is currently evaluating studies to charge a fee that it can defend.

Mr. Campbell commented that the AOPC can provide names of retired ratepayers and they should be given a 10% cut across the board.

Max Gardner, a resident of the Bloomington Country Club Townhomes, praised the City Council for their hard work, but stated he did not think the across-the-board increase was fair. He suggested that 15% water rate increase be implemented for one year and during that time it be re-evaluated. He stated the idea of a construction moratorium had merit. He stated that the increased cost of water would encourage conservation.

Council Member Orton assured Mr. Gardner that the City Council will evaluate rates each year.

St. George City Council Minutes
February 7, 2002
Page Fifteen

Bob Sexton, a resident of a Planned Unit Development, commented that while many homeowners are delinquent in their utility payments, the same cannot be said of PUD accounts, as they are paid on time. Additionally, the City's responsibility for the water line ends at the curb in PUDs. Most PUDs are adult communities without children, and they should not be paying 20% more for water.

Floyd Sucker inquired if the City had a policy about installation of solar panels.

Mayor McArthur replied that the City did not at this time.

David Jones, a resident of Meadow Creek, commented there was a lot of run-off from lawns which could be solved by putting in a loamy, sandy soil.

Rob Woodgate requested clarification of the transfer of West City Springs irrigation water into the culinary system.

City Manager Gary Esplin replied that West City Springs users were given the option of selling their share(s) to the City, or given a credit on their culinary water bill. He explained that the West City Springs is culinary-quality water and will be used in the culinary system. The rest of the City's irrigation systems are not culinary-quality water and would not be cost effective as a source of culinary water.

Mr. Woodgate inquired where the water came from to water the Dixie Red Hills Golf Course.

Mr. Esplin replied this golf course was watered with Virgin River water.

Mayor McArthur commented that 70% of the irrigation water in the ditches is wasted.

Mr. Woodgate inquired if the City had retained rights in the Central Utah Project for use of water from Lake Powell.

Mr. Esplin replied that the City has retained those rights, and this is a long term source of water which is being explored.

Elaine Pilkington inquired when the contract for the most expensive power purchase would expire.

Deputy Water and Power Director Phil Solomon replied the most expensive contract is for power at 7.5? per kW and it expires in March, 2003.

Ms. Pilkington then inquired what the City's cost was to produce its own power.

Mr. Esplin replied it cost the City 4.5? to 5? to produce its own power, which it could then sell for 2?.

Ms. Pilkington stated that PUDs would appreciate the City adjusting their 20% overcharge for water. She inquired if there were any plans for sprinkler system standards and inspections.

Mayor McArthur replied the matter is being discussed.

Gil Nicola commented that because members of the AOPC are aggressive in pursuing their economic interests, the City has come to regard them as antagonistic and shouldn't. He expressed concern that the City has made no immediate response to the AOPC's claim they have been paying 20% more for water, as the City did to the low pressure problem in the Little Valley area. He requested that they be treated fairly.



St. George City Council Minutes
February 7, 2002
Page Sixteen

City Manager Gary Esplin responded the reason for the rapid response to the low pressure problem was because of a life safety issue as there was not enough water to fight a fire from 5:00 a.m. to 9:00 a.m.

Richard Silver commented that any lawn installation should be done properly.

Bindy Boylin commented that she purchased an all-electric home because the City's rates were so low. She expressed concern about the water increase, and urged conservation. She stated a 15% water increase across the board was not fair.

There being no further public comment, Mayor McArthur closed the public hearing.

Council Member Gardner suggested the PUD situation be looked at more intently, but it was abundantly clear that the City has reached the point that it could not delay moving forward with the rate increase. If the City then finds alternative solutions and makes some money, rates can be decreased. If the City did not do something proactive at this time, it would be irresponsible. He then made a motion to approve a 40% increase in power rates by resolution, with impact fees to be determined at later date. The motion was seconded by Council Member Orton. It was clarified that residential power rates would be raised to 6.1? per kW. Mayor McArthur called for a roll call vote, as follows:

Council Member Gardner - aye
Council Member Orton - aye
Council Member Allen - aye
Council Member Whatcott - aye
Council Member Isom - aye

The vote was unanimous and the motion carried.

City Manager Gary Esplin commented that the City Council could, if it desired, consider water rates as part of the impact fee public hearing at a future date, as the City was not selling very much water at this time of the year. However, it would be critical to have the water rate increase in place by March 1.

Mayor McArthur inquired if there were any way to reduce the water rates in PUDs by 20% now.

City Manager Gary Esplin replied that it could not be done now, as many issues remained to be solved. Staff is not prepared to make a recommendation on the method used to do this at this time.

An unidentified woman in the audience commented that the meter should simply be divided by the number of units.

Deputy Water and Power Director Phil Solomon remarked there could be inequity issues with this suggestion, and recommended a frequency analysis be performed.

Council Member Isom was excused from the meeting.

City Manager Gary Esplin advised that a hearing on the impact fees could be held in 30 days as staff has the information necessary.

Council Member Orton made a motion that the City proceed with the 15% water rate increase by resolution, recognizing that the City is looking at the PUD issue and will address impact fees at a later date. The motion was seconded by Council Member Gardner. Mayor McArthur called for a roll call vote, as follows:

Council Member Orton - aye
Council Member Gardner - aye
Council Member Whatcott - aye

St. George City Council Minutes
February 7, 2002
Page Seventeen

Council Member Allen - aye

The vote was unanimous and the motion carried.

Council Member Gardner was excused from the meeting.

PURCHASE OF PROPERTY/EXCHANGE FOR CONSERVATION EASEMENT:
Consider purchase of Quail Creek Water Treatment Plant property and an exchange agreement with the BLM for a conservation easement at the old City dump site.

City Manager Gary Esplin explained the City was basically trading City property in the habitat area (old dump) to the BLM in exchange for a lease of land (conservation easement) from the BLM for a water treatment plant.

A motion was made by Council Member Whatcott and seconded by Council Member Orton to approve the transaction. Mayor McArthur called for a vote, as follows:

Council Member Whatoctt - aye
Council Member Orton - aye
Council Member Allen - aye

The vote was unanimous and the motion carried.

APPOINTMENTS:
Consider appointments to boards and commissions of the City.

Mayor McArthur recommended the following appointments to the Arts Commission:

Maggie Topham - Performing Arts
Cheryl Parkins - Public Relations and Marketing
Greg Abbott - At Large

A motion was made by Council Member Allen and seconded by Council Member Whatcott to appoint Maggie Topham, Cheryl Parkins and Greg Abbott to the Arts Commission. Mayor McArthur called for a vote, as follows:

Council Member Allen - aye
Council Member Whatcott - aye
Council Member Orton - aye

The vote was unanimous and the motion carried.

APPROVAL OF MINUTES:
Consider approval of the minutes of the City Council work meeting held October 30, 3001.

A motion was made by Council Member Orton and seconded by Council Member Whatcott to approve the minutes as amended. Mayor McArthur called for a vote, as follows:

Council Member Orton - aye
Council Member Whatcott - aye
Council Member Allen - aye

The vote was unanimous and the motion carried.

Consider approval of the minutes of the regular City Council meeting held January 3, 2002.



St. George City Council Minutes
February 7, 2002
Page Eighteen

A motion was made by Council Member Whatcott and seconded by Council Member Orton to approve the minutes as presented. Mayor McArthur called for a vote, as follows:

Council Member Whatcott - aye
Council Member Orton - aye
Council Member Allen - aye

The vote was unanimous and the motion carried.

Consider approval of the minutes of the special City Council meeting held January 10, 2002.

A motion was made by Council Member Allen and seconded by Council Member Whatcott to approve the minutes as presented. Mayor McArthur called for a vote, as follows:

Council Member Allen - aye
Council Member Whatcott - aye
Council Member Orton - aye

The vote was unanimous and the motion carried.

Consider approval of the minutes of the regular City Council meeting held January 17, 2002.

A motion was made by Council Member Orton and seconded by Council Member Whatcott to approve the minutes as presented. Mayor McArthur called for a vote, as follows:

Council Member Orton - aye
Council Member Whatcott - aye
Council Member Allen - aye

The vote was unanimous and the motion carried.

CLARIFICATION OF EARLIER ACTION:
City Manager Gary Esplin clarified that with regard to the property exchange with the BLM for the old dump site located in the HCP and the lease with the BLM for the land where the Quail Creek Treatment Plant is located, there would be a difference of $50,000 after the City pays and the City would own the property at Quail Creek.

ADJOURN TO EXECUTIVE SESSION:
A motion to adjourn to an executive session to discuss a property purchase was made by Council Member Orton and seconded by Council Member Whatcott. Mayor McArthur called for a roll call vote, as follows:

Council Member Orton - aye
Council Member Whatcott - aye
Council Member Allen - aye

The vote was unanimous and the motion carried.

RECONVENE/DISCUSSION RE DIXIE CENTER:
City Manager Gary Advised that he and Mayor McArthur met Monday with the County Commission. The County would either like to take over the Dixie Center, or have the City take it over. The Dixie Center is currently running with a deficit. It was the consensus of those present to have the City take it over as the City stands to benefit the most as the property surrounding it is owned by the City.




St. George City Council Minutes
February 7, 2002
Page Nineteen


ADJOURN:
The meeting then adjourned at 8:15 p.m.



_______________________________
Gay Cragun, City Recorder