City Council Minutes

Thursday, January 22,2004

JANUARY 22, 2004, 4:00 P.M.

Daniel D. McArthur, Mayor
Bob Whatcott, Council Member
Suzanne Allen, Council Member
Rod Orton, Council Member
Larry Gardner, Council Member
Gary Esplin, City Manager
Shawn Guzman, City Attorney
Gay Cragun, City Recorder

Sharon Isom, Council Member

A site visit was made to the new Spectrum building in the Ft. Pearce Industrial Park.

A site visit to the Bloomington area was scheduled for January 29 at 3:30 p.m.

Energy Services Director Phil Solomon presented a power point presentation entitled ?Risk and Financial Review 2004". He reviewed current factors, objectives, projected cash flow assumptions, a cash flow summary, recommendations, rate comparisons, and capital/impact fees.

After discussion, it was the consensus of the Mayor and City Council to keep the rates and impact fees as low as possible while building a little reserve for a rate stabilization fund.

Water and Energy Services Board Chairman Ross Hurst commented that the last six month?s history illustrates how close the actuals were in meeting projections. Staff recommends a 5% increase in rates, but he stated he felt the rate increase should be 6%.

Energy Services Director Phil Solomon distributed a handout entitled ?Summary of Rate Study?, attached hereto as Exhibit ?A?.

Mr. Hurst stated it would be prudent to attain the reserve as quickly as possible, and the rate and impact fee increases are needed quickly. A reserve of 12% would be prudent.

Mr. Solomon advised that 12% is the national average for a reserve fund.

Kirt Winterfield, representing Deseret Generation and Transmission, advised that his company operates with a reserve of 4-5%, however, they are not exposed to the

market in terms of buying and do not face the volatility in cost structure in the wholesale power market.

Council Member Gardner commented that the City had the ability to recover any losses within a six to eight week time period if the Council chose to make a rate adjustment.

Mr. Winterfield advised that one of the reasons a reserve policy is established is because no one likes rate increases. A structured process would allow establishment of a reserve fund which would forego the need for unplanned rate increases in the future. The number one complaint from customers is not the rate increase, but the fact that they were not able to plan on them and budget accordingly.

Council Member Gardner commented he felt a 3% reserve was adequate.

Mr. Hurst replied that 12% of revenues is still one-third of the $15,000,000 the City previously had in its reserve, and it was not unreasonable to have a $5,000,000 reserve due to the current energy climate.

City Manager Gary Esplin commented that staff has looked at every possible option with regard to rates and impact fees and has done an excellent job.

The matter will be placed on a City Council agenda for discussion.

Traffic Engineer Aron Baker advised that the City is planning a storm drain project on 400 East which must be completed before the Blvd. reconstruction project begins. The asphalt on 400 East is wider than needed, and it is suggested that the asphalt width be reduced and the area in general be improved as it is the edge of the downtown district. It is also suggested that a roundabout be built at 400 East and Tabernacle.

City Manager Gary Esplin explained staff would like to bid the project within the next month, and would like to know the Council?s wishes with regard to asphalt width. Trails could be put along either side of the street, while still maintaining five lanes of traffic. There would still be on-street parking. The proposed project will change some of the frontages, but allows for a 15' wide tree-lined or landscaped strip.

Mayor McArthur, Council Members Allen and Orton commented they liked the roundabout.

Council Member Gardner commented he felt the plan was overly done and unnecessary.

City Manager Gary Esplin advised that if 400 East is going to be beautified in five years, it should be done now while the asphalt is being torn up for the drainage project.

Mr. Baker advised the cost of the total project, including beautification and the roundabout, is $400,000-500,000.

There was discussion about on-street parking for businesses and how the project would affect residents who border 400 East.

Mayor McArthur suggested that staff talk with affected property owners, both residential and commercial, about the effects of the proposed project.

Kathy Hasfurther advised that the project must be built by July 1 or the funding will be lost.

City Manager Gary Esplin advised that the design will be looked at again and discussions held with affected property owners.

City Attorney Shawn Guzman reported on a UAMPS meeting he recently attended.

City Manager Gary Esplin advised that staff is preparing to remove on-street parking on 100 South from 900 East to River Road, and on 700 South from 700 East to River Road. When the College makes improvements, they will remove all parking on 100 South from 700 East to 900 East.

Mayor McArthur commented that this needed to be accomplished before the summer.

The meeting then adjourned.

Gay Cragun, City Recorder