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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. 1 1 1 L� 1 1 1.9 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. M 1` 0 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. it 1 1 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. i 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. t24? 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 1 r J 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