City Council

Tuesday, May 22,2012

St. George City Council Minutes May 22, 2012 Page Two approximately $30,000. Staff will build the trail in June as well as the landscape the medians and open by July 26, 2012. After the project is done, Staff will complete the landscaping on the sides of the road way. Councilmember Bunker expressed she thought it was a good solution. Councilmember Pike asked if the project will be complete by July 26th. City Manager Gary Esplin advised the median including the landscaping and the trail will be complete but the landscaping of the sides will be done at a later date. PRESENTATION FROM LEISURE SERVICES DEPARTMENT: Leisure Services Director updated the City Council on accomplishments of each of his five departments including renovations made at the Dixie Center, improving the buses used for transporting the runners for the St. George Marathon, the NJCAA Softball Tournament held at the Canyons Complex, Parks Planning projects totaling approximately $13,000,000 , adding new pickleball courts as well as saving the City a significant amount of money by planting trees at the Citys greenhouse for use around the city. He advised the City Council the Pickleball Association (Soup Group) will be presenting the City a check for $63,000 to build additional pickleball courts. City Manager Gary Esplin explained the recommendation in the 2012-2012 fiscal budget includes parking lots, restrooms and 10 additional pickleball courts in addition to the 2 that will be built using the donation from the Pickleball Association. Mayor McArthur inquired what will be between the courts. Mr. Perkins answered there will be concrete with shade structures which are included in the budget request. City Manager Gary Esplin noted the City can add additional courts in the future. He explained if the budget is approved, the courts can be done in time for the Senior Games. Mayor McArthur asked what is going to happen with the trails that are marked. Mr. Perkins explained staff is going out for bid to bring in additional asphalt to pave the area. City Manager Gary Esplin stated he has heard concerns pertaining to the School District not bussing students in the Bloomington Hills area because the walkway under the bridge in the Fort Pierce area has not been completed. He has been advised the trail will be completed by the next school year so that students will be able to get to the bus stop. Mr. Perkins added the budget requests include the cremation garden at the Tonaquint Cemetery and add additional seasonal employees in the Parks Department. He explained the biggest challenge for Parks is to upgrade the older facilities including playgrounds. Mayor McArthur commented when the park is complete, the trail needs to be fixed. St. George City Council Minutes May 22, 2012 Page Three City Manager Gary Esplin stated these are high visible parks and the City might want to consider using capital funds to upgrade playground equipment to have an immediate impact on citizens using those parks. Mr. Perkins explained staff is trying to make the Pioneer Center a destination point and would like to see the Opera House utilized more. There are plans to build an amphitheater on the north side called Water Walk Plaza that will have 60-80 seats with a stage that can be rented out for events. Staff is also working on contacting people for a feasibility study. There is a proposal for a sculptor to come in to inspect clean and wax all sculptures throughout the city for $2500 a year. Mayor McArthur stated the School District may want to include their sculptures since they are located in public space in the city. City Manager Gary Esplin asked if the City had any bronze sculptures that were not being displayed. Mr. Perkins said there are two that were purchased several years ago. Mayor McArthur stated they needed to be displayed. City Manager Gary Esplin believes the Arts Around the Corner committee could suggest where to display them in addition to adding plaques. Councilmember Bunker stated she sent an email to the Art Around the Corner board members asking them if they would like to take over the responsibility in caring for the sculptures. Councilmember Almquist asked if there were plans to build a park near Cabinetek. City Manager Gary Esplin explained the park is on the list using park impact funds. Sunset Park near Sunset Elementary will be next and then the park by Cabinetek. Councilmember Pike inquired where the pickle ball courts were going to be added at Worthen Park. Mr. Perkins stated there is room by the existing courts to add 8 feet of asphalt to add courts. Also at Snow Park, a futsol court will be added. City Manager Gary Esplin explained there is a combined amount of $50,000 in the 2012-2013 fiscal budget to pay for the courts at Worthen Park and Snow Park. Also, the City is looking at putting a restroom at Christensen Park and finishing the one at Cox Park. Mayor McArthur inquired if all parks have restrooms. Mr. Perkins stated not all parks have restrooms, but there are plans to put one at each park. Councilmember Almquist asked for an update on the tennis program. St. George City Council Minutes May 22, 2012 Page Four Mr. Perkins explained there is a revenue increase of approximately $70,000 from the past year and the participation numbers have increased. The courts are being resurfaced and there have been talks about putting in a pavilion. Councilmember Pike asked City Manager Gary Esplin if there is anything additional the City can do for this department. City Manager Gary Esplin responded he would like to see the All Abilities Park as well as Seegmiller Park. Mayor McArthur left to attend the Special Olympics Torch Run. PRESENTATION FROM WATER DEPARTMENT: Water Services Director Barry Barnum updated the City Council on the projects his divisions will be working on which include the SunRiver Clinic and redoing the sewer lines on Riverside Drive. The Waste Water Treatment Plant is running well using 9-10 million gallons a day and currently uses 3 of the 4 oxidation ditches. The fourth ditch will not be needed for approximately 7-8 years. With regards to water sources, the biggest challenge is arsenic. The City has an arsenic compliance agreement with the State and is well within the levels required. Mr. Barnum handed out a map (Exhibit A) which shows the water usage at each well. He explained that the City brings water from Quail Lake to blend with the Snow Canyon well to lower the arsenic levels. At this time, the Gunlock well cannot be blended therefore, there are only 2 out of 11 wells being used. As part of an agreement with the State, in the event of an emergency, the additional wells can be turned on but will have to be monitored 24 hours a day and the public would need to be informed. City Manager Gary Esplin inquired about previous budgets in regards to using the treatment plants for mixing the water for the wells. Mr. Barnum explained the water comes into the Citys system to a different location. City Manager Gary Esplin asked if the water from Quail Lake was enough. Mr. Barnum answered it is not enough. Samples are taken from water supply throughout the City and although some of the samples are within the allowable levers, some samples are not. He explained it was more cost effective to continue to use the Quail Lake treatment plant because it has such a large capacity, rather than rebuild the Gunlock capacity. City Manager Gary Esplin stated in the future, if the cost of water from Quail Lake rises, the City could have to add an additional treatment to treat the arsenic and use our wells again. Mr. Barnum explained the City has an agreement with other irrigation companies to use their surface water rights to treat the water at Gunlock. Mayor Pro Tem Bunker asked Mr. Barnum to explain the numbers listed on the map. St. George City Council Minutes May 22, 2012 Page Five Mr. Barnum replied the MGD stands for million gallons per day and that the Gunlock well shows that there are 2 wells that are arsenic compliant. City Manager Gary Esplin stated in past years, most of the Citys water supply came from Gunlock. Mr. Barnum stated his department is running well. Water Distribution is changing a lot of the older pipe downtown, the treatment plant is doing a great job as is the wastewater collections. He stated the 2012-2013 fiscal years budget was exciting to work on. City Manager Gary Esplin explained that when he started with the City 36 years ago, there was no communication nor cooperation between the water and power divisions. He has had conversations with other departments and has found that departments are thinking globally as a City rather than separate entities. He said this was kudos to Mr. Barnum and other departments. Special Project Manager Scott Taylor presented a Power Point called Water Services Department which included the following topics: Cost of Production vs. Revenue, What Contributed to the Increase Cost of Production, Annual Water Purchases, 2011 Water Rates Comparison, 2011 Sewer Rater Comparison, 2011 Sewer/Water Rate Comparison, Water Distribution, Wastewater Collections, Regional WWTP, Regional Sewer Rates, Proposed Utility Rate, Proposed Rate and Fixed Cost analysis. He explained sewer rates have 2 components, each community pays a regional fee of $14.30 in addition to a community cost. St. George City charges $2.98. City Manager Gary Esplin stated with the $2.98 the City cleans sewer lines annually. Mayor Pro Tem Bunker inquired if state law determines what the funds can be used for. City Manager Gary Esplin answered it does not. He explained the City owns the plant; however 75 percent is for the City and 25 percent is for other communities. Any line that serves two communities is paid for using the reserve fund. Mr. Barnum stated the line being replaced on Riverside Drive is paid for using this fund. Councilmember Hughes asked who raises the rate for the treatment plant and does it change for all of the communities. City Manager Gary Esplin answered, the City does. He explained there is a contract that states each equivalent residential unit will pay $14.30 and each community is to charge a regional impact fee per each house built. The reserve fund is there so that the City can fund the expansion of the treatment plant when it is needed. Councilmember Almquist asked how other communities can use the reserve fund. Mr. Barnum stated the definition of a regional line paid from the fund is where ever the line enters the boundary of St. George or where ever sewage from St. George and one other community are combined. St. George City Council Minutes May 22, 2012 Page Six Mr. Taylor explained to equalize funds staff is proposing to lower the regional sewer rate to either $7.75 or $7.50 splitting the difference between water distribution and wastewater collections. Using the same five year cash flow, if the rate changes to $7.75, water distribution would still see a deficit; if the rate changes to $7.50, there would be no deficit in any of the funds. City Manager Gary Esplin stated the proposal represents good prudent budgeting. By lowering the regional sewer rate there will still be a positive balance in the other funds. If the City wanted to expand the treatment plant, the cash will be available to do so. Mr. Taylor mentioned the City will want to expand before the need for the fourth ditch that Mr. Barnum talked about since it is much easier to retro fit when there is nothing in it. Mayor McArthur returned. Mr. Taylor presented two options to the council. The first would be to keep the the current rates doing an internal transfer between the sewer and water fund. The second would be to adjust the rates as proposed: lowering the regional sewer rate from $14.30 to $7.50, increasing the wastewater collections rate from $2.98 to $3.18 and increasing the base water rate from $15.87 to $22.47. Since there would be a $6.60 increase on water and $6.60 decrease on sewer, the customer will not see an increase to their bill. City Manager Gary Esplin explained that although it is not uncommon to have an internal transfer, it is much cleaner for auditing purposes not to do so. Customers will see that their water rate has increased but may not see that the sewer rate has decreased. Mayor McArthur commented that since the Water Conservancy District gives the City water at a lesser rate, it is cheaper for the City to run it. City Manager Gary Esplin explained the City uses the base rate because water is purchased based on cost per usage and the budget is based on water sold. Mayor McArthur inquired if the decrease in the regional rate would decrease in other communities as well. City Manager Gary Esplin stated the $7.50 is based on the cost to operate the treatment plant, so yes it would reduce the rate for all communities. Councilmember Almquist stated with the economy the way it is, customers may expect both rates to increase. Councilmember Pike commented some customers may say the City has been overcharging. City Manager Gary Esplin explained the City has not been overcharging because now the City can build a new plant without having to increase the rate at that time and be able to have new facility online before it is actually needed, this would also keep cost lower as the City would avoid bonding costs and interest on debt. St. George City Council Minutes May 22, 2012 Page Seven Councilmember Hughes inquired if the rates are changed per the proposal, where does that put the Citys rate in comparison to the other cities. Mr. Taylor explained the Citys base water rate would increase to $22.47 and the other communities average for their base rate is $23.18. Councilmember Hughes stated the City is doing something good for all customers in the region in decreasing the sewer rate, but he feels the residents of the City are going to be impacted since the City is increasing the base water rate. City Manager Gary Esplin explained the City delayed the increase with the philosophy of not increasing the rate until it was necessary. Councilmember Almquist stated he understands the reserve fund if for the treatment plant, but would like to know where the funds to fix other issues come from. City Manager Gary Esplin stated the funds come from capital costs. Impact fees can be used for new lines. The five year analysis shows what will be needed to meet the needs of the City. Councilmember Bunker asked why the City does not do a 1% increase each year. City Manager Gary Esplin stated there was not a need to increase the rate. He explained a portion from each bill in the region has gone into the reserve fund to pay for a new plant. If the City had not done this, the increase would be even greater to cover the cost of getting a loan to pay for the new plant. He asked when the last water increase took place. Mr. Barnum stated that the last water increase was in 2006. City Manager Gary Esplin explained the cost for purchasing water has not gone down. He asked the Councilmembers how they would like to handle the increase. The consensus of the Councilmembers was to show the rates as they are. PRESENTATION FROM ENERGY SERVICES DEPARTMENT: Energy Services Director Phillip Solomon summarized a handout he provided to the Councilmembers named St. George Energy Services Executive Summary. Councilmember Almquist inquired what is a large commercial customer. Mr. Solomon answered a large commercial customer is anyone who demands over 60kw of power. He explained the City receives energy from different sources. Contracts are entered into to obligate the purchase of certain amounts of gas at a locked rate but the City does not pay for the gas until it is used. City Manager Gary Esplin explained his philosophy is to purchase energy resources at a fair rate acquiring enough base load to pass a fair cost onto the customer. He asked Mr. Solomon to explain what happens at the power plant. St. George City Council Minutes May 22, 2012 Page Eight Mr. Solomon stated staff looks at an annual forecast tuning into the next six months to see how much power the City has and forecast how much the City will sell. The goal is to not be exposed more than 10 percent in the market. It hurts the City to have surplus energy. He explained power traders look at the market daily and at times are doing hourly trades. Energy Resource Manager Laurie Mangum stated she is currently pricing out for October through June of next year. Mr. Solomon explained the City is a very aggressive and innovative municipal utility but at the same time has to be exposed to some changes. There have not been any coal fire plants built in the past three years. In addition, the federal government wants to mandate how one structures a resource portfolio. There is a potential for UAMPS to increase the cost of megawatt hours. If the increase takes place, the City may have to look at exploring other avenues to purchase power. City Manager Gary Esplin stated the City can go independent from UAMPS but cannot go independent of PAC. In the past, the City received credits for the power it generated. Mr. Solomon explained in addition to the increased cost, the City no longer receives the credit for the generated power. He then provided and summarized handouts and presented the Councilmembers with a Power Point presentation named Energy Rate Proposal which included the following topics: Fixed Costs, Fixed Cost Breakout (Annual), Proposed Rate Structures, Residential, Small Commercial and Large Commercial. Finance Director Philip Peterson stated the proposal looks at each customer tier to see the amount of revenue. Staff looked at 6 or 8 different scenarios. Mr. Solomon stated the first tier of power comes from the Colorado River and is the least expensive, the second tier comes from IPP power, the third tier comes from Bonanza Power. City Manager Gary Esplin explained the proposal is to increase the rate by 8% without having to increase again in the next 3 or 4 years. Although the cost of power has continued to increase, the City has not increased the rate in approximately 7 years. Councilmember Almquist inquired what would happen if a nuclear plant would come into the City. Mr. Solomon explained nuclear power is a stable, but more expensive source of power. Councilmember Pike asked if 8 percent was enough of an increase. City Manager Gary Esplin explained the 8 percent is sufficient at this time. This amount will allow the City to keep the necessary reserve in the rate stabilization fund. MISCELLANEOUS DISCUSSIONS: City Manager Gary Esplin stated the budget needs to be adopted in a public hearing by June 22. He asked the Councilmembers if they wanted to discuss changes that were not St. George City Council Minutes May 22, 2012 Page Nine included in the budget as well as capital funds projects. If the Council wants to build a theater downtown, there should be a study done. Councilmember Pike agrees there should be a study because of tax issues. Councilmember Almquist asked if there are still funds to consolidate holdings for the historic district. City Manager Gary Esplin stated there are no funds left in the RDA but funds from the sale of the airport will be available to purchase additional properties. He stated he would like to sell the property located near the elementary school rather than using it to build an additional recreation center. Mayor McArthur stated that building another skate park or swimming pool may be an option. City Manager Gary Esplin asked the Councilmembers if they would like to hold onto the property. The City has received an offer from a developer who would like to purchase the property. The consensus of the Council was to look at the offer before deciding what action to take. Mayor McArthur stated in the budget, he would like to see some improvements made on Tabernacle Street making it look more like St. George Boulevard starting at 400 East and continuing to the courthouse. Councilmember Pike asked if there was anything the City can do for the storefronts on Tabernacle. City Manager Gary Esplin explained funds will have to be allocated from somewhere other than RDA funds. Funds can be used from the sale of other properties to make investments to the downtown area. Cache Valley Bank emailed the City stating they would like to make improvements to the bank they purchased downtown. City Attorney Shawn Guzman stated it would be nice to look at the sign ordinance for historic downtown to keep nostalgic signs to bring back the old feel. City Manager Gary Esplin stated there are some dollars remaining in the capital project fund, he feels can be used to upgrade some golf course equipment. In addition, there is a plan to move some City offices to the old court house. He is going to meet with the IT Department to have them move there soon. Another worthy cause would be to help the Childrens Museum. Downtown is critical and there is a need to look at the Sunbowl. A discussion regarding downtown hotels took place. Motels on St. George Boulevard are not abiding by City ordinance. There is a hotel association; however, the owners cannot be forced to join. Councilmembers discussed the Citys noise ordinance. Currently, there has to be 3 complaints in order for the City to get involved. While the City can cite a tenant, the St. George City Council Minutes May 22, 2012 Page Ten landlord cannot be held accountable. The Councilmembers asked City Attorney Shawn Guzman to draft a new ordinance. Councilmember Almquist asked if City Attorney Shawn Guzman could also work on an ordinance regarding smoke shops. City Attorney Shawn Guzman stated he has been working on a draft and if adopted, the business license process will need to change. City Manager Gary Esplin stated several people are wanting to use the old airport for different events. City Attorney Shawn Guzman gave the Councilmembers an update on the Fedex lease. ________________________________ Christina Fernandez Deputy City Recorder