05-15-1978 Minutes1-1-8
City of Salina, Kansas
Regular Meeting of the Board
of Commissioners
May 15, 1978
The Regular Meeting of the Board of Commissioners met in the Commissionej
Room, City -County Building, on Monday, May 15, 1978, at four o'clock P.M.
The Mayor asked everyone to stand for the opening ceremony.
There were present:
Mayor Jack Weisgerber, Chairman presiding
Commissioner Keith G. Duckers
Commissioner Dan S. Geis
Commissioner Karen M. Graves
Commissioner Gerald F. Simpson
comprising a quorum of the Board, also:
Norris D. Olson, City Manager
D. L. Harrison, City Clerk
Absent:
L. 0. Bengtson, City Attorney
The Minutes of the Regular Meeting of May 8, 1978, were approved as
printed.
THE MAYOR PROCLAIMED the Week of May 15 through 21, 1978 - ''SMOKY HILL
BALLOON MEET WEEK IN SALINA, KANSAS''. The proclamation was read by Ken Jennison,
General Manager of K.S.A.L.
THE MAYOR PROCLAIMED the Week of May 15 through 21, 1978 - ''NATIONAL
SALVATION ARMY WEEK''. The proclamation was read by Commissioner Jerry Simpson,
Chairman of the Salvation Army Advisory Board.
STAFF AGENDA
BIDS WERE RECEIVED for Engineering Project 78-638 for improvements in
Southeast Park.
Mike Brown, of Brown & Brown, Inc., asked the Commission to consider a
delay of one week to receive bids on this project, and to include an asphaltic
pavement alternate in the specifications.
He reviewed the history of asphalt streets and the types of asphalt
streets where the pot holes occur. He said the advantages of asphalt streets
over concrete are: less construction time; repairs can be made faster causing
less inconvenience to the public; dark color of the asphalt absorbs heat and ice
and snow can melt faster; asphalt streets do not react to chemicals or salt as
concrete streets do; new technology has been developed where asphalt can be
recycled and in the future will be a savings of energy and dollars; asphalt is
flexible pavement and this project is a park and there will be a number of
joggers in the park and asphalt is more compatible with legs than concrete;
economy of the project, 2 weeks ago a difference in bid price between asphalt
and concrete, asphalt was lower $38,000,and on this project there could be a
savings of $30,000.
He asked the City Commission for a postponement of bids and to return
the plans and specifications to the Engineering Department for the inclusion of
as asphaltic pavement alternate in this project.
The Commissioners and staff discussed the request.
A motion was made by Commissioner Simpson, seconded by Commissioner
Duckers, to instruct the City Clerk to return the bids received today unopened
and to advertise for bids to be received May 22, 1978 for Engineering Project
78-638, including an asphaltic pavement alternate. Ayes: (5). Nays: (0).
Motion carried.
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AN ORDINANCE was introduced for second reading entitled: "AN ORDINANCE
authorizing and directing the issuance of $4,394,000 principal amount of combined
Water and Sewage System Refunding Revenue Bonds, Series of 1978, of the City of
Salina, Kansas, for the purpose of refunding $4,670,000 principal amount of
outstanding combined Water and Sewage System Revenue Bonds of said City, prescribir
the form and details of said refunding revenue bonds, providing for the collection,
segregation and application of the revenues of said system for the purposes
authorized by law, including paying the cost of operation, improvement and
maintenance of said utility, paying the principal of and interest on the refunding'
revenue bonds of said City issued against said system and providing adequate
reserve funds, making certain covenants with respect to said bonds, authorizing
an escrow trust agreement relating to certain prior lein bonds and authorizing a
securities option and purchase agreement relating to the bonds herein authorized."
A motion was made by Commissioner Duckers, seconded by Commissioner Geis to
adopt the Ordinance as read and the following vote was had: Ayes: Geis, Graves,
Simpson, Duckers, Weisgerber (5). Nays: (0). Carried. The Mayor approved the I
ordinance and it is numbered 8635. The ordinance was introduced for first
reading May 8, 1978.
A RESOLUTION was introduced and passed entitled: "A RESOLUTION
establishing policy for annual review of rates, fees and charges for use of and
services rendered by the Combined Water and Sewerage System of the City of
Salina, Kansas." A motion was made by Commissioner Geis, seconded by Commissioner'
Duckers to adopt the Resolution as read.
Mr. Tom Phoenix, Boettcher and Company - I wanted to say something
particular about that motion because that resolution before you is really a thing j
that you do anyway, but what I wanted to make certain when you consider this is
as you may know the bond issue, everything has fallen into place in that the
actual savings to the city are going to be about $35,000 more than we had talked
about before. It is $1,527,000 is what it turned out to be, but all of this is
subject to obtaining an A rating and one of the great problems in obtainina A
rating is maintaining adequate coverage of your net revenues over your debt
service and typically, looking at your revenue, the system has good coverage at
the present time, you have about 1.8 coverage; but due to inflationary costs
when you project out through the 1980's that coverage goes way down and one of
the things that we have had to do in order to make our case with Moody's Investors)
Service that you will maintain rates is that Wilson and Company has done a hurry
up rate study for the period of the bonds. What that shows is that during the
1980's you will be, in order to maintain your coverage and in order to maintain
your system in a financial situation that will justify an A rating, you will be
faced with small increases, 8% in 1980, and more, those are all in a letter to
you all, so really the two things are together what we will be telling Moody's j
Investor's Service, and we will be telling them (1) the city has taken a look at
their coverage throughout the period of these bonds, and (2) we have taken this
action today indicating that they will be on top of this all during the period
of the bond issue. So what we are doing here is really getting ourselves in a
posture to make the very best case the city can make to Moody's. So I wanted
you all to know there is a letter that you will be receiving from Wilson and
Company that projects the rates and you are going to have to indicate some
commitment to do the things that are necessary to maintain good coverage.
Mayor Weisgerber - I would think it is rather a good policy. Looking
back in the past, I know there have been times that the rates stayed for years
and years and years because everybody rather hated to study them and then you
would get too far behind and you would have to make too large a rate increase.
Never has the time come that we didn't keep up with where we should, but smaller
increases a little closer together are a little bit easier to do than to let it
go too long. So it is probably a good policy.
Mr. Phoenix - The rating service absolutely takes a view and you might
consider this advisable, they are very much opposed to large increases. They
think that it affects the consumption of your customers and they feel the city
has got to maintain these small increases to keep up with inflation, because if
you don't they take it that you are not having the coverage they gave the rating
on. As you know you had an A rating for many years and then they went to Baa -1
and now we are going to try to get back to an A rating here, but it is absolutely
crucial, and you probably all know that the bond market is off maybe 40 to 50
basis points since the last time I talked to you, and so I think you did get a
really good situation as well as those federal regulations and it is absolutely
essential you adopt something like this.
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Commissioner Graves - Did that loophole, has that been closed allowing
this kind of refunding?
Mr. Phoenix - Absolutely, totally closed. Shortly after I was here,
the Internal Revenue Service came out with a set of regulations that said this,
all bonds sold after May 15th would not qualify, all deals that were put together
prior to the time these regulations came out, which was like May 2nd or 3rd,
would be able to go through if you had done one of three things, one was negotiat
a sale and Stinson, Mag, who is the bond counsel for the thing determined that
the letter you signed with Boettcher was a sale of your bonds to us, and so you
qualified on that basis. And so you would not be able today to do what -- we
can't restructure the deal and do it, we have either got to get this A rating,
or it is really crucial.
Commissioner Graves - You mean the whole thing is tubed if we don't
get the A rating?
Mr. Phoenix - I am not prepared to say that at the present time. It
is there if we get the A rating, that is a matter with the bond counsel, because
we have a deal. It will not be near as good a deal if you don't get it, but
this resolution is part and parcel to that.
Mayor Weisgerber - This would be just good business practice.
Mr. Phoenix - I think it is a very good business practice. I think
you do it anyway, without this formally.
Commissioner Geis - Mr. Phoenix, I understood from your presentation
to us several weeks ago that you were guarantying us a certain amount and there
was no mention whether a rating was obtained or not.
Mr. Phoenix - It has always been, Dan. It has always been in the
agreement. And everybody, in everything we have presented had the contingency
in there that the rating; and so did the competitor and everybody. I mean the
price of the bonds are entirely different if you don't have a certain rating.
Commissioner Geis - It slipped by me, because I thought we had a
guarantee.
Mr. Phoenix - Well you do have a guarantied thing, but you have to
have an A rated bond in order to have the guarantied savings.
Commissioner Geis - I just understand the but..
Mr. Phoenix - There are several things in there, you have to have a
bond counsel opinion, you have to have a number of things.
Mayor Weisgerber called for a vote on the motion to adopt the Resolutionil
as read and the following vote was had: Ayes: Geis, Graves, Simpson, Duckers,
Weisgerber (5). Nays: (0). Carried. The Mayor approved the Resolution and it
is numbered 3369•
A CHARTER ORDINANCE was introduced for second reading entitled: "A
CHARTER ORDINANCE exempting the City of Salina, Kansas, from K.S.A. 79-5011;
providing substitute and additional provisions on the same subject; and authorizin!
the levying of taxes to create a special fund for the purpose of paying utility
service costs." A motion was made by Commissioner Duckers, seconded by Commission
Graves to adopt the Charter Ordinance as read and the following vote was had:
Ayes: Geis, Graves, Simpson, Duckers, Weisgerber (5). Nays: (0). Carried. The
Mayor approved the Charter Ordinance and it is numbered 16. The Charter Ordinance
was introduced for first reading May 8, 1978.
THE ARCHITECT filed plans and specifications for the baseball facilities
in Lower Indian Rock Park.
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Mr. Williamson explained the final plans and the changes that have
been made. He said he worked with the city staff, Don Jolley of the Recreation
Commission, throughout the process and have concurred with both on the design of
the project. He said he did meet with neighborhood residents to review the
final plan and they expressed they were pleased with the plans as proposed.
They asked for additional landscaping outside the project boundaries near the
dike and asked to be involved in the selection of street lighting. He said
the plans have been submitted and approved by the Park and Resources Authority
and the Corps of Engineers.
A MOTION was made by Commissioner Geis, seconded by Commissioner
Simpson to accept the plans and specifications as filed by the Architect for the
Lower Indian Rock ballfield complex. Ayes: (5). Nays: (0). Motion carried.
A MOTION was made by Commissioner Geis, seconded by Commissioner
Simpson to set the date of June 5, 1978 as the date to receive bids for the
construction of the ballfield complex in Lower Indian Rock Park, and to instruct
the City Clerk to advertise for bids. Ayes: (5). Nays: (0). Motion carried.
THE CITY ENGINEER reported on Petition Number 3687, filed by David
Werth for the vacation of Country Hills Court and Country Hills Terrace in
Country Hills Addition Number 2, and recommended the streets be vacated. A
motion was made by Commissioner Duckers, seconded by Commissioner Graves to
accept the City Engineer's recommendation and approve the petition, and to
introduce the vacating ordinance for first reading. Ayes: (5). Nays: (0).
Motion carried.
Ordinance Passed:
PUBLIC AGENDA
Number:
PETITION NUMBER 3701 was filed by Wayne Lockard requesting a waiver of
the $100.00 rezoning fee on the application for rezoning of the property at
Ninth and Park Streets. The reason for requesting the waiver is that the property!
is to be rezoned to enable Saline County to relocate its ambulance service to
this site. Since this service is available to all the residents of Saline
County, we feel the rezoning request fee should be complimentary rather than the
standard fee. A motion was made by Commissioner Duckers, seconded by Commissioner:
Geis to refer the petition to the City Attorney for a recommendation. Ayes: (5).
Nays: (0). Motion carried.
COMMISSION AGENDA
A MOTION was made by Commissioner Simpson, seconded by Commissioner
Duckers, to add appointments to boards and commissions to the agenda for
consideration. Ayes: (5). Nays: (0). Motion carried.
THE MAYOR, with the approval of the City Commissioners, made the
following appointment.
Plumbers and Gas Fitters Examining Board
Jim Hamilton, reappointed for a 2 year term to May 1, 1980.
The Commissioners brought the following items to the floor for discussion.
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Commissioner Geis asked about the status of the drainage problem on
Edgehill Road in Country Club Heights Addition # 3.
Mr. Boyer replied he has made his recommendations, and a report is
ready for improvements in Country Club Heights Addition #5, and the people on
Edgehill can petition for their improvements as they see fit.
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A MOTION was made by Commissioner Graves, seconded by Commissioner
Simpson to recess into executive session to discuss a personal matter. Ayes:
(5). Nays: (0). Motion carried.
The Commissioners recessed at 4:45 P.M. and reconvened at 5:45 P.M.
A MOTION was made by Commissioner Graves, seconded by Commissioner
Simpson that the Regular Meeting of the Board of Commissioners be adjourned.
Ayes: (5). Nays: (0). Motion carried. The meeting adjourned at 5:46 P.M.
D. L. Harrison, City Clerk
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WAIVER AND CONSENT TO HOLD A SPECIAL MEETING
OF THE BOARD OF COMMISSIONERS
We, the undersigned, being the duly elected, qualified and acting
Commissioners of the City of Salina, Kansas, do hereby waive notice and
consent to the holding of a special meeting of the Board of Commissioners on th<
30th day of May, 1978 at 4:00 P.M, for the purpose of adopting a resolution
relating to the issuance of one bond for each maturity date for the Advance
Refunding of Water and Sewerage Bonds.
Dated this 30th day of May, 1978
Commissioners