City Council

Thursday, November 29,2001
Minutes



MINUTES OF THE ST. GEORGE CITY COUNCIL
SPECIAL MEETING
NOVEMBER 29, 2001, 4:00 P.M.
ADMINISTRATION CONFERENCE ROOM

PRESENT:
Mayor Daniel McArthur
Council Member Bob Whatcott
Council Member Suzanne Allen
Council Member Rod Orton
Council Member Sharon Isom
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 flag salute was led by Jonathan Wright and the invocation was offered by Gay Cragun.

AUTHORIZE MAYOR'S SIGNATURE ON CDBG APPLICATION:
City Manager Gary Esplin explained that authorization is needed for the Mayor to sign a Community Development Block Grant application for $150,000 to be used by Habitat for Humanity for infrastructure for their project. By taking this action the City Council is not granting the zone change request, as this is just a pre-application, but the deadline for the application is December 7 and there is not another Council meeting until December 13.

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

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

The vote was unanimous and the motion carried.

AGREEMENT WITH COUNTY FOR PURCHASE OF PROPERTY:
City Manager Gary Esplin explained this agreement will facilitate purchase by the City of the County yard building on the Red Hill and County property located adjacent to the Canyons softball complex. The Water Department will take over the County yard building, and the City will build a maintenance facility near the Canyons complex. This purchase will also gives the City control over future expansion on Skyline Drive.

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

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

The vote was unanimous and the motion carried.


St. George City Council Minutes
November 29, 2001
Page Two

DISCUSSION RE WATER AND POWER ISSUES:
City Manager Gary Esplin explained the discussion would not cover rate structure or classification of rates, but would be about an overall framework of needs and assumptions to meet those needs to generate a revenue stream. He then reviewed the attached hand-out (Exhibit "A") with the Mayor and City Council. He explained that the pro forma done by George K. Baum built in a 4% annual increase in costs which would result in a 10 year rate increase. At the end of the tenth year, the City would have $2,000,000 in the water fund. Today it is even.

Council Member Orton inquired about the average cost per resident for water. He was advised by Phil Solomon that the average cost is $48.00.

Mayor McArthur commented that the State's average cost is probably around $26.00 to $27.00.

Council Member Whatcott summarized that overall the City is looking at raising water rates 25% and increasing impact fees 40%, or raising water rates 27% and leaving impact fees alone.

Council Member Gardner commented that perhaps the conservation plan would slow down the need for the increases.

City Manager Gary Esplin replied that the City still must go out and get the resource; it must drill wells and build transmission lines. However, forced conservation would delay the need for bonding. Something else to consider is if the conservation plan is successful in reducing water consumption, then it will affect the City's ability to pay for these improvements. He proposed a phasing-in of the plan, with the first phase being the Sand Hollow Project. If conservation is effective and there is not much growth, then the next phase of the plan would not be needed.

Council Member Orton stated the City's impact fees should remain competitive with other cities.

Water and Power Board Chairman Ross Hurst commented that the City had to implement the first phase of the plan, and conservation, etc. will impact when implementation of the second phase is needed.

City Manager Gary Esplin advised a public hearing was needed so the first phase of the plan could be implemented as soon as possible. Recommended changes in the rate structure will be presented to the City Council at a later date.

Carol Sapp, representing the Southern Utah Homebuilders Association, asked what was the City looking at in hard numbers in terms of the impact fees, based on the matrix.

City Manager Gary Esplin replied that the idea is to balance the impact fee so that it affects those who are creating the growth.

Council Member Gardner commented that current impact fees are pushing reasonableness, and a balance was needed.

Carol Sapp commented that while she was not endorsing the figure, a $2,200 water impact fee was within the realm of reason. She stated she was firmly convinced that conservation must play a role and the City must get serious in its conservation efforts.


St. George City Council Minutes
November 29, 2001
Page Three

Mr. Hurst commented that only one raise in impact fees is proposed, and that raise is in Phase 1. There will be no increase in impact fees in Phases 2 or 3.

City Manager Gary Esplin explained that a 40% increase in impact fees results in a 2% adjustment in the rate.

Council Member Isom commented that conservation should be mandatory, and with regard to impact fees, if they are raised too high, this will affect the building industry and many other businesses in the City.

With regard to power, Water and Power Director Wayne McArthur explained that the City must decide if it is going to buy a firm supply of power on the market. He reviewed the attached hand-out (Exhibit "B") with the Mayor and City Council. He explained that a 25% increase in rates will cover the next two summers, and the market rate for power right now is about 3?. He advised that UAMPS is facing a $48,000,000 cash flow problem, which the City is a part of, and he will be working on a UAMPS subcommittee to address this issue.

City Manager Gary Esplin questioned how the loss would be allocated - by member, or member of pool using the power. He commented that the City's biggest exposure is to the market.

Mr. McArthur explained that a conference call will be held with UAMPS and Logan to replace Hildale power, as Hildale will have the same problem this year as last, and they will probably face bankruptcy this summer.

Carol Sapp questioned what the power impact fees would go to based on 75% of Alpha's study. She was advised by Wayne McArthur that he did not know, and to check with him tomorrow - but it should be 14% over the City's existing impact fees.

Council Member Gardner wondered if City staff had the ability to make a matrix determining what impact fees would be vs. the fluctuations in the rates.

Water and Power Director Wayne McArthur replied that George K. Baum was providing this service for the City.

City Manager Gary Esplin stated that if the transportation corridor is not obtained, the City will have to do something else , i.e. a gas turbine. However, he believed the best alternative to be tapping the Black Rock line.

Water and Power Board Chairman Ross Hurst suggested that rolling blackouts could solve the five week peak power issue.

Mayor McArthur replied that this would not be a selling point for economic development.

City Manager Gary Esplin commented that this decision could be made when charges for service are so prohibitive that people are not willing to pay them. The City's rate structure is not out of line, and even though the proposed change appears to be heavy, it will get the City through the conceivable future.

Mr. McArthur replied that this scenario would be correct assuming the market is stable.



St. George City Council Minutes
November 29, 2001
Page Four

City Manager Gary Esplin stated that if the market stabilizes, the City would have the ability to lower rates at that time.

Mr. McArthur advised the City's long term plan is to have a 138 loop.

AWARD OF BID FOR AUDIO/VISUAL EQUIPMENT:
Public Information Officer Marc Mortensen recommended award of the bid for audio visual equipment for the conference room and City Council chambers to Applied Technology in the amount of $28,950.

A motion was made by Council Member Whatcott and seconded by Council Member Orton to award the bid to Applied Technology in the amount of $28,950. Mayor McArthur called for a 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.

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

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

The vote was unanimous and the motion carried.

Mayor McArthur was excused from the meeting.

RECONVENE AND ADJOURN:
Upon reconvening regular session, a motion was made by Council Member Allen and seconded by Council Member Orton to adjourn. All voted aye and the meeting adjourned.


_____________________________
Gay Cragun, City Recorder