OPENING Mayor Hellar called the special session of the city council to order at 5:30 p.m. on Thursday, November 5, 2009, in the council chambers at City Hall, 1123 Lake.
ROLL CALL Council members Boge, Newton, Snedden, Logan, and Reuter were present. Councilman O’Hara participated by telephone.
Mayor Hellar referred to the memorandum city council received regarding the Planning and Zoning Commission’s recommendation for urban renewal boundary revisions and that a public hearing will be scheduled at the December regular city council meeting, as the changes need to be made by December 31, 2009.
A. CANVAS BALLOTS OF THE NOVEMBER 3, 2009, GENERAL AND SPECIAL ELECTION
Mayor Hellar congratulated the candidates who prevailed in the election of November 3, 2009, and thanked the voters who turned out. She noted there were 3,893 on the voter registration list, plus 61 same day registrations, for a total of 3,954 voters registered for this election. She stated that the 1,146 persons who voted represented a 29% voter turnout.
Councilwoman Newton moved that, pursuant to Idaho Code 50-407, after canvassing the results of the November 3, 2009, general and special bond election, the council accepts the tabulation of votes as prepared by the election judge and clerks, proclaims the results as final, and declares the following persons elected:
Four-Year Council: Marsha Ogilvie
Four-Year Council: Jamie Davis
Four-Year Council: Justin Schuck
Two-Year Council: John Reuter
WATER REVENUE BONDS
IN FAVOR 763
AGAINST 367
Councilwoman Logan seconded the motion, and it passed unanimously by roll call vote of council.
POSITION: CANDIDATE: VOTES:
FOUR-YEAR COUNCIL: Michael Boge 496
Jamie Davis 564
Helen M. Newton 451
Marsha Ogilvie 641
John T. O’Hara 532
Justin W. Schuck 536
TWO-YEAR COUNCIL: John Reuter 737
The election judge was Sally Transue. Election clerks were Sue Austin, dee Kosse, Rose Chaney, Jean Piehl, Brigette Sanborn, Alice Vroman, Suellen Crettol, Linda Hunt, and Shirley Parker.
B. RESOLUTION NO. 09-69 CANVAS BALLOTS OF SPECIAL BOND ELECTION
Councilwoman Newton moved that the proposed resolution, “Canvas Ballots of Special Bond Election”, be adopted. Councilwoman Logan seconded the motion. The motion passed unanimously by a roll call vote of council.
C. FISCAL YEAR END BILLS
Mayor Hellar announced the total amount for the fiscal year end bills totaled $278,816.43. Councilwoman Newton moved to approve the fiscal year end bills. Councilman Reuter seconded the motion. The motion passed unanimously by roll call vote of council.
D. WATER AND SEWER RATES
Tom Gould of HDR Engineering stated there was only one addition to the prior presentation for seasonal rates for residential customers. He explained the reason for deficiencies in the water utility is the assumption that the city will sell a water bond for the expansion of the water treatment plant, and the debt service would increase to $900,000, with the deficiency in 2009/2010 of $615,000. He said, before a bond is issued, there is a legal requirement that rates are maintained at a sufficient level for repayment of the bond. He said the ability to pay should have a debt service coverage ratio of 1.3 or above, and, without a rate adjustment, the city would not have sufficient funds to pay off the bond. He pointed out, after the rate adjustment of 1.35 for 2009/2010, the city would be above the minimum requirement, with following years demonstrating a rate adjustment in order to have enough to pay the debt service coverage ratio. He pointed out there was a deficiency for sewer rates of approximately $630,000. After establishing sewer rates five years ago, history demonstrates there has been a 1,000 gallon drop in the minimum bill, which created a deficiency. He stated in 2013/2014 for sewer rates, the debt service rises with the assumption of the need to expand the waste water treatment plant. He said the adjustment for the first year would be $3.80 per month for the average residential customer. The second year adjustment would be approximately $6.00 per month. He said there was concern from some of the council at the first workshop whether or not a 15% increase was sufficient for the first year. He said the city currently has 29% deficiency for the current year for sewer revenue. He felt the second option was more appropriate that reflected a 20% adjustment for the first year for sewer rates.
He explained to Councilwoman Newton that the 83% deficiency was predicated on expansion of the waste water treatment plant. Public Works Director Kody Van Dyk stated there would be an assumption of the need to start expansion in five years at the earliest. Mr. Gould explained the deficiencies were based on whether or not there was expansion of the waste water treatment plant.
Councilwoman Logan supported the percentage increase as outlined for recommendations for the transition of the water rates and supported the proposed sewer rates starting with a 20% adjustment in 2009/2010. Council members Boge, Newton, Snedden, Reuter and O’Hara concurred. Mr. Gould reviewed the five options for single family. He said option 1 was an across the board increase of 15% but not changing the block sizes. He said option 2 had a volume charge based on the first 6,000 gallons, 6,000 to 20,000 gallons, and then over 20,000 gallons. He said the third option was a rate to assist low income users by reducing to the first 3,000 gallons and reduced the rates slightly, with the fourth option having seasonal rates. He stated a bulk of the water consumption occurs within the first 3,000 gallons, with 50% or more following under that block.
Councilwoman Newton preferred Single Family - Option 3. Mr. Gould pointed out that the larger users would see a larger bill but that it wouldn’t impact those who use less than 3,000 gallons as much. Mr. Gould explained to Councilman Boge essential needs are defined as those who utilize 23 gallons per day and what is needed to live on, which is typically between 3,000 to 6,000 gallons a month. Councilman Snedden concurred with Councilwoman Newton, but his goal would be to encourage conservation. He stated it rearranges the rate structure with no incentive to conserve. He wished there was a hybrid for block 3 for seasonal. Mr. Gould stated that concepts can be combined with winter and summer rates. Councilwoman Logan requested information on the average residential use and commercial use for November through May plus the average use for June through October. She said she requested this information at a prior workshop in order to evaluate the seasonal rates. Councilman O’Hara suggested that the winter rate be adjusted for average use to be applied all year long. Beyond that, it should apply over the benchmark usage, as it makes sense for a modified block seasonal structure versus having more blocks. He suggested modifying the seasonal structure in order to have a base line for residential use. Mr. Gould explained there is a smaller bill with Option 4 in the summer time for larger users versus under Option 3. Councilwoman Newton commented this was the reverse as discussed in the past in order to encourage conservation. Mr. Gould explained Option 2 minimum charge includes the base charge only of $16.50, and Option 3 is the minimum charge that includes the base charge plus a minimum charge of 3,000 gallons. He suggested that council approve Option 3 and use the concept of the minimum bill from Option 2. Councilwoman Logan didn’t feel it was enough for the high end. Councilman Reuter concurred. Councilwoman Newton didn’t feel the seasonal rates under Option 4 would work. Councilwoman Logan suggested increasing the cost of water over 20,000 gallons. Councilman Reuter suggested raising the cost of 20,000 gallons and setting another rate for those who utilize an extraordinary amount of water. Councilwoman Newton suggested setting the rate at over 50,000 gallons plus another price block for those who use a substantial amount. Councilman O’Hara preferred to lower it in order to have an incentive for conservation. He felt there needed to be a tiered structure. Councilman Boge suggested setting the structured rates where it was attainable, such as 12,000 gallons. Councilwoman Newton said she wouldn’t support less than 15,000 gallons. Councilwoman Logan suggested not going lower on the first 3,000 gallons at $2.40 but to add a fourth level such as 3,000 to 15,000 gallons, 15,000 to 20,000 gallons, and over 20,000 gallons. Mr. Gould suggested having wider blocks, with the average summer use of 10,000 gallons and the average winter usage at 5,000 gallons. He pointed out there is currently less than 1% who use over 50,000 gallons. Councilwoman Newton suggested 0 to 3,000 gallons, 3,000 to 15,000 gallons, 15,000 to 40,000 gallons and over 40,000 gallons. Council members Boge, Snedden, Logan and Reuter concurred. Tom Gould confirmed there was a consensus for a meter charge based on the volumetric rate of 0 to 3,000 gallons, 3,000 to 15,000 gallons, 15,000 to 40,000 gallons and over 40,000 gallons.
He reviewed what the minimum charge would be under Option 2 and Option 3. Councilwoman Newton commented that “snowbirds” should not be subsidized. Councilwoman Logan raised concern with the ongoing financial stability of the system. Councilman O’Hara agreed and felt that the rate structure should have a guarantee of revenue plus have a more punitive rate beyond those who use between 3,000 and 15,000 gallons in order to drive more conservation. There was an agreement that Mr. Gould would come back with a final rate design for residential rates based on the consensus of council.
Mr. Gould reviewed multi-family rates with a uniform rate for Option 2 and a stronger conservation rate under Option 3. Councilman Snedden preferred Option 3 – Seasonal, with Councilman O’Hara commenting this proposal was viable. Kody Van Dyk explained multi-family are those who reside in duplexes and larger. He pointed out the largest multi-family dwellings (Condo del sol and The Seasons) have separate irrigation out of the lake and won’t be impacted by the seasonal rates with one meter per building based on capacity. Councilman Boge felt there should be a benefit for the owners of multi-family dwellings to conserve. Tom Gould explained option 2 is considered a conservation rate. He said the key is the amount of capacity or demand placed on the system at any point of time. He said Option 1 applies a 15% adjustment with maintaining the existing rate structure, Option 2 is a uniform rate structure with a base charge only, and Option 3 is the seasonal rate structure. Councilwoman Logan commented there was no option for multi-family to be equivalent to single family options. Mr. Gould explained the current rate structure doesn’t work because it doesn’t reflect the number of living units. Councilman O’Hara felt a seasonal rate structure for multi-family has a financial incentive for the property owners. Councilwoman Newton preferred Option 2. Council members Reuter and Boge concurred. Council members Snedden, Logan and O’Hara preferred the seasonal rates. Councilman Boge commented he had no concern with seasonal rates. Council members Newton and Reuter did not agree with seasonal rates. Mr. Gould said he would bring back Options 2 and 3. There was a consensus that the minimum bill component have a meter charge.
Tom Gould reviewed the commercial rates with two options and suggested it be consistent with the multi-family rates. The average use for commercial in the winter is 15,000 gallons and the average summer use is 26,000 gallons. Councilman Boge said there was no motivation for conservation and proposed 0 to 10,000 gallons, 10,000 to 30,000 gallons and over 30,000 gallons. Mr. Gould pointed out greater use isn’t necessarily inefficient use for commercial users. He discouraged the creation of blocks for multi-faceted customers. He suggested utilizing tools for incentives to conserve and not by increasing the rates. Councilwoman Logan proposed to have a program in place for rewarding those who conserve. Councilwoman Newton preferred the winter and summer conservation rates under option 3, Council members Boge, Snedden, Logan, and O’Hara preferred the seasonal rates. Councilman Reuter raised concern with the mixed use scenario.
Mr. Gould explained the options for industrial were a uniform or seasonal rate and felt that these rates should be consistent with commercial and multi-family rates with the same usage pattern for commercial customers. Councilwoman Logan was interested in equity payments. Council members Newton, Snedden, Logan and O’Hara preferred the seasonal rate. Council members Boge and Reuter preferred the uniform rate.
Tom Gould reviewed the options for large users with Option 1 as a minimum charge, including a base charge plus 6,000 gallon minimum charge and Option 2 with a minimum charge including base charge only. There was a consensus to go with Option 2.
Mr. Gould reviewed irrigation metered use with the first option that maintains the existing structure and the second option is a uniform rate with a minimum bill at a base charge only which requires an installation of a separate meter. Kody Van Dyk stated it currently costs $9,000 for a one inch meter and explained large users include water districts. There was a consensus to go with Option 2.
Mr. Gould said water consumption is used as the basis for billing sewage use and not bill for outdoor use. He explained a concept is used based on the average winter water use in order to create a cap for the maximum that can be billed. He recommended separating multi-family from residential and set the multi-family at 80% of the single family rate as they have less flow and requirements. Kody Van Dyk confirmed multi-family are set per unit. Council members Newton, Snedden and Reuter preferred Option 2.
Mr. Gould reviewed the proposed commercial rate options for grease and non-grease producers. He explained option 2 has different volumetric rates starting with 3,500 gallons and option 1 having a minimum volumetric charge of 3,329 gallons. There was a consensus from council with a preference of Option 2 for grease and non-grease producers.
Mr. Gould confirmed he would be coming back with a rate design for a residential option and multi-family options for uniform and seasonal. He said he would need to provide new rates for sewer to reflect the 20% adjustment and would have the rates available by the next council meeting on November 18th. Councilman Reuter raised concern with the new rate for residential and felt it necessary to schedule a special meeting in order to have Mr. Gould’s advice in order to make a decision. Mr. Gould clarified when rates are established there is a limitation on the amount that can be charged. Kody Van Dyk noted that proposed NUFF fees would be discussed at a later date.
E. REPORT ON ADA COMPLIANCE AGREEMENT
Mayor Hellar announced that she has not received a response to the letter she forwarded to the State on October 22, 2009.
ADJOURNMENT The meeting adjourned at 7:15 p.m.
Gretchen A. Hellar, Mayor
ATTEST: Maree Peck, City Clerk
