01-13-1975 Minutes5
City of Salina, Kansas
Regular Meeting of the Board
of Commissioners
January 13, 1975
The Regular Meeting of the Board of Commissioners met in the
Commissioners' Room, City -County Building, on Monday, January 13, 1975, at four
o'clock p.m.
The Mayor asked everyone to stand for the pledge of allegiance to the
Flag and a moment of silent prayer.
There were present:
Mayor W. M. Usher, Chairman presiding
Commissioner Robert C. Caldwell
Commissioner Norma G. Cooper
Commissioner Mike Losik, Jr.
Commissioner Jack Weisgerber
comprising a quorum of the Board, also:
L. 0. Bengtson, City Attorney
Norris D. Olson, City Manager
D. L. Harrison, City Clerk
Absent:
None
The Minutes of the Regular Meeting of January 6, 1975 were approved
as printed.
STAFF AGENDA
A LETTER was received from the City Planning Commission informing the
City Commission that during their meeting of January 7, 1975, the City Planning
Commission reconsidered their recommendation to the City Commission concerning
their review of the proposed Charter Ordinance exempting the City from the
provisions of K.S.A. 12-715 pertaining to the Board of Zoning Appeals and more
specifically adding the Board of City Commissioners as an appeal body of
decisions of the Board of Zoning Appeals.
"At that time, a motion was unanimously approved by those members
present that the City Planning Commission stand on their previous recommendation.
That recommendation being that the City Commission not adopt the Charter Ordinanc
due, in part, to the fact that it would improperly restrict the freedom of the
Board from operating in the best interest of the City."
Commissioner Weisgerber said, "Since they came back with a unanimous
decision, I move that we accept their recommendation"
Commissioner Caldwell seconded the motion.
Mayor Usher asked for any discussion.
Commissioner Cooper said, "You are not refusing to adopt something that
is new or novel. You are refusing to reinstate something that we had, not only
under Metropolitan Planning, but prior to that and I refer you to the City of
Salina Zoning Ordinance 6613, Section 25, under the powers and duties of the
Board of Zoning Appeals which contains this provision. It did not have the
disastrous effect that has been suggested, or at least the facts do not support
that, and before you decide to deny you had best ask yourself the big question,
why would you want to?"
Mayor Usher asked if there was any further discussion.
Commissioner Losik said, "I would have just a little addition to that.
We are going into a bicentennial to refresh our minds about the liberties and the
heritage from the Constitution on through. We just recently funded some money to
continue this which is a wonderful thing and now we are changing to remove - to
remove access from the people to their elected officials on a very shaky item tha
political people might make a decision for political expediency. Now this is
probably very true. We've seen a tremendous shake up and a tremendous restoratio
of integrity in our government from the presidency on down. If we here at this
level would be so politically motivated as to go against what would be good for
the City of Salina then we need that shake up here through our elected officials.
I find no valid reason for denying what we have had right along both under
Metropolitan Planning and under City Planning. Why we would want to remove this
is beyond my comprehension."
Mayor Usher commented, "Well, I don't know that it takes any defense or
defending, but it appears to me that the action that we are about ready to take
or what the Planning Commission is recommending is nothing detrimental or
threatening as you might suggest. We have other quasi government commissions,
if someone feels they have been aggrieved cannot come to the Commission anyway,
so by placing this particular Board of Zoning Appeals in that light, I don't
think we are segregating our responsibility or the rights of the citizen."
Commissioner Cooper said, "Of course not."
Mayor Usher called for a vote on the motion. Ayes: Caldwell,
Weisgerber, Usher (3). Nays: Cooper, Losik (2). Motion carried.
A REPORT was received from the City Engineer regarding Petition Number
3431 which was filed by A. B. Seelye Company, Inc., requesting the installation
of 8 inch asphalt pavement from the east line of Fairdale Road on Northwood to
the south line of Glen Avenue; water and sanitary sewer service to serve Lot 1,
Block 18, Lots 19 - 29 inclusive, Block 19 and Lot 1, Block 19, and Lot 6,
Block 17 and Lots 6 - 20 inclusive, Block 16, all in Georgetown Addition, that
the petition is valid as 97% of the property in the benefit district is owned
by the petitioner. He also reported the requested improvements are on
undeveloped land which requires them to be financed under Resolution Number 3113.
A motion was made by Commissioner Losik, seconded by Commissioner Cooper to
accept the City Engineer's report and instruct him to prepare a feasibility
report of the improvements. Ayes: (5). Nays: (0). Motion carried.
A REPORT was received from the City Engineer regarding Petition Number
3432 which was filed by A. B. Seelye Company, Inc., requesting the installation
of 8 inch asphalt pavement from the south line of Brookwood Lane on Fairdale
Road to the south line of Applewood Lane and also from the south line of Brookwoo
Lane on Beechwood Road to the south line of Applewood Lane, and 8 inch asphalt
from the east line of Fairdale Road on Applewood Lane to the west end of Applewoo
Lane cul-de-sac, and sewer to serve Lots 12 - 22, Block 1, and water to serve
Lots 7 - 12, Block 3, Lots 7 - 17, inclusive, Block 1, all in Georgetown Addition
that the petition is valid as 100% of the property in the benefit district is
owned by the petitioner. He also reported the requested improvements are on
undeveloped land which requires them to be financed under Resolution Number 3113.
A motion was made by Commissioner Losik, seconded by Commissioner Caldwell to
accept the City Engineer's report and instruct him to prepare a feasibility
report of the improvements. Ayes: (5). Nays: (0). Motion carried.
A REPORT was received from the City Engineer regarding Petition Number
3433 which was filed by A. B. Seelye Company, Inc., requesting the construction o
a storm sewer drainage swale from the east line of Fairdale Road through Lot 1,
Block 14, Riker Manor Addition and through Blocks 17 and 16 to the north line of
Glen Avenue, that the petition is valid as 100% of the property in the benefit
district is owned by the petitioner. He also reported the requested improvements
are on undeveloped land which requires them to be financed under Resolution
Number 3113. A motion was made by Commissioner Losik, seconded by Commissioner
Caldwell to accept the City Engineer's report and instruct him to prepare a
feasibility report of the improvements. Ayes: (5). Nays: (0). Motion carried.
A REPORT was received from the City Engineer regarding Petition Number
3447 which was filed by Doyle E. Yockers requesting water, sanitary sewer, street
improvements and storm drainage to serve Lots 1, 2, and Lots 12 through 22,
Block 35; Lots 30, 31, and 32, Block 32; Lots 7 through 12, Block 34; Lots 1
through 14, Block 37; Lots 2 through 11, Block 38, Key Acres 2nd Addition
that the petition is valid as 100% of the property within the benefit district
is owned by the petitioner. He also reported the requested improvements are on
undeveloped land which required them to be financed under Resolution Number 3113.
A motion was made by Commissioner Losik, seconded by Commissioner Caldwell to
accept the City Engineer's report and instruct him to prepare a feasibility
report of the improvements. Ayes: (5). Nays: (0). Motion carried.
THE CITY COMMISSIONERS considered a proposal by Real Estate Research
Corporation to provide staff support for preparation of Salina's Community
Development Program.
Mayor Usher commented, "I don't know whether we need any review
regarding this or not. It pertains to assistance we feel the staff is going to
be needing in order to complete our housing and community development application
to provide the staff with the technical support we see is needed. Do we have any
other comments or questions regarding this?"
Commissioner Losik said, "The only thing is Bill, I don't know if it
was mentioned but this - the funding of this would be under the same method that
we funded the previous committments. I move that we approve this proposal with
Real Estate Research Corporation and to complete the transactions necessary to
have them assist us in our application."
Commissioner Cooper seconded the motion.
Mayor Usher called for a vote on the motion. Ayes: (5). Nays: (0).
Motion carried.
COMMISSION AGENDA
None
PUBLIC AGENDA
A LETTER was received from William B. Stokes, "Would you be so kind as
to place my name and the topic that I wanted to discuss with you on the next
commission agenda that meets with you on 'ground rules' for scheduled hearings?"
Mr. Stokes said, "What we have done here, members of the Commission,
I went home after my last visit with you concerning IRB and I was a little
disturbed because I do know the importance of them and I do know how much money
they can save you and I do also know the exposure the city can have at times?
I would like the record to be cleared in this respect in that I have no personal
vendetta as far as against any one individual, but I am interested in one thing,
and that is good government. Now why I don't have 1500 people right with me, I
don't know, maybe they don't, maybe they are not in the unique position like I
am where we have worked with bonds before. We have worked with the bond houses.
We know the mechanics of it and because of that, I wanted to come in today and
enlighten you because I got the impression that we have no ground rules, as such,
if someone would come before the City Commission and request a letter of intent
and so what I have here to present to you today is the industrial revenue bonds,
the steps which have evolved over the last 9 years in the City of Wichita, and
the procedures that they go through in - when someone comes in and asks for a
letter of intent. Now I would say that you are all in the business world and
you do not have time to personally check out each individual who might want a
letter of intent. My point on this would be is that I would appreciate it if
you would review this industrial revenue bond format that I have here from the
City of Wichita and you might want to adopt something like this for the City of
Salina. Then when someone would come to you and ask you for a letter of intent,
all you have to do is to pull out the procedural steps and processes and say
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here it is you go gather up this, this, this, that and something else. You bring
it back to us and then we will consider it. I assume, at least this is the
impression I got from my last visit here, that we have no rules, no ground rules,
no particular areas in which we have when somebody comes before the Commission
and they ask for a letter of intent. I might also add then that on the last 2
pages of this codification that they have here, they have the facts and figures
on the computation of the interest advantage to tentative industrialists from the
Industrial Revenue Bonds, and they also have the tax advantage on it and on using
some hypotheti ca Is here on how much it can actually save an individual, partnership,
corporation, whoever it might be that would desire to secure a letter of intent,
and the figures are quite staggering, my point being is that a letter of intent
is not maliciously issued. I might also add in this regard that the City of
Topeka at this time has this from Wichita and they are reviewing it and they are
thinking about making their idiosyncracies that they might decide to incorporate
or change and then also codity it for the City of Topeka. And I think that it
would be something that you might like to look at and it might be of interest to
you. Next, we have a phamplet here which explains Kansas Municipal Revenue Bonds
for economic development and wasprepared and published by the Kansas Department
of Economic Development, State Office Building, Topeka, Kansas, and I think that
it sets forth the statutes here and it is something that I feel that the
Commissioners and the other parties of interest that run the City of Salina
might be interested in. And we would note with interest here that the Kansas
municipalities enjoyed one of the best credit rating in the nation and each
municipality should jealously guard its bond issuing responsibilities and
continuously project its good financial name, and then it goes on over on to the
back to various steps that they would suggest be taken before a letter of intent
would be issued. If you would like some of these I will leave the, if you don't
want them, I would also like to know that. I'Il take them with me. When bonds
are issued and the bonds are sold, then we assume then that this business entity
default. Okay at that time the city has no liability per se at that moment.
The bond holders have an election of remedies. They can either set back and do
nothing, or they can go in and foreclose on their security and maybe cash in 10(4
on the dollar because I believe that at the last meeting here the Commission
reminded me of the fact that we don't really have to do a lot of checking because
the bond houses will do that checking for us. I would beg to disagree with that
statement because I would think that only one person is going to take care of
the name of the City of Salina, and that is the guiding light of the city and
that would be the City Commission. No one else cares about our name, except the
City Commission and the reason that I thought I better come back over here today
and visit with you, so what happens then is we have some business or industry
here and the people that walked away from it that were issued the bonds. I don't
care what business type entity it is or anything, and where the city then becomes
involved is where can we go to find someone to get this business back in operatio
again so, those bonds can be retired, so we can save the name of the City of
Salina? At that point in time do we find someone and then they say - well yeah,
but I need $5,000 for this, I need $10,000 for that and I need $20,000 for that
and then we might be able to stop it. That is at that point when we start
dipping into the general fund because are we going to throw good money after bad
money or what should we do? I don't know and I would hate to be sitting where
you gentlemen and lady are to try to ascertain that fact when there was a default
because what happens then and the name of the City of Salina then goes down the
drain with the default in a bond issue then, then the next time we have a good
industry comes in they will try, shop and place their bonds, the bond
representatives sit behind their big desks,they wring their hands and they say
you have a real good cause but I am sorry we just don't seem to have any
customers that would fit into this particular portfolio at this time and/or we
might could try to peddle them for you if you would go at a higher interest
rate. Next we would have an article about an IRB rip off in Mobile Alabama.
They were getting an injunction on Industrial Development bond sales in Alabama
and also for 8 million dollars and I - the sale was originally 2.3 million in
bonds to finance construction of the Johnny Walker Medical Electronics
Corporation plant at Mt. Vernon, Alabama, and it states it may be the biggest
rip off in Alabama history. I mention this to you gentlemen and I have a copy
of this for you if you would like 'em, in that the bond companies are not going
to protect the City of Salina's name. They have one thing that they want and
that is to sell those bonds and get that commission. I hope I am trying to now
at this gime to elucidate and to better explain to you what I feel, myself
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Mayor Usher said, "Well I wish you would leave that stuff. Aren't
you going to let us use it? I am always willing to look at someone else's
theories and policies because we certainly don't have all the answers. I might
go on to tell you we do have a memorandum of understanding in our files on how
we will go about on issuing the letters of intent, so we are not just operating
from the hip pocket in the back room."
Mr. Stokes replied, "Well maybe I misunderstood your comments when
I was here last time."
Mayor Usher said, "This was done back in June of 1972. Now admittedly
it is a very simple and very brief memorandum of understanding how we go about
issuing a letter of intent, and I mean I could sit up here and probably and
argue with you a little bit on what you say. Don't think that is necessary.
I think that if you have got some good ideas from Wichita or anyone else, we
will be glad to review them, and if we feel that they are going to be worthwhile,
make us look smarter,we will incorporate in another letter of memorandum. So I
would appreciate your leaving the one from Wichita, and that one phamplet at
least."
Mr. Stokes said, "Alright, Thank you."
Commissioner Weisgerber commented, "Now I am not sure, but I think
maybe we have, we'll have to look at Wichita's and Topeka's rules over, but I
think what we have may be actually a briefer but stricter than theirs, because
what we say is that bonds shall be saleable and arrangements for such sales
shall be the responsibility of the company requesting issuance. Some cities
I think, if I understand this correctly, help sell the bonds, or help issue
them, but we don't touch them in any way at all. This is strictly between the
bonding company and whoever requests the bonds, so that the city isn't involved
in this sale at all, but I don't know I would have to see what kind of
restrictions they had."
Mr. Stokes asked, "Mr. Weisgerber, did you follow by sequence of
events on down through default?"
personally, should be the position of the City Commission where they would move
forward with letters of intent. We have information here. We have a brochure I
am not touting George K. Baum and Company, Inc., out of Kansas City as far as
that is concerned, but on these brocheurs that we have here that is the name at
the bottom because they have complied all this information for it and it is in
financing economic development in Kansas with tax exempt bonds. These are some
of the things that I wanted to expose you to today and maybe you might want to
have some second thoughts on this matter. I was not trying to be vendictive with
my exhibit, whether anybody knows what my exhibit consisted of last week, I was
just trying to show you that when you say you don't have enough time to check
something the information i.e. that exhibit that I presented to you was within
the confines of this very building, and you would not have to even get wet or
cold to go get it and it is a public record, and when the man sets there, that
this letter of intent was given to, and says his wife has to give him lunch
money, we are going to let him have 1 and 4 million dollars carta blanche, I
don't know. Maybe I am missing something somewhere along the line. Also] would
question then when you said that all you had was his schematics of what was
proposed that I would like to know if we are going to have to have any of our
income from the Welfare Department because I think the State Board of Health
issues certificates of necessity in the various areas around the State of Kansas,
and it also goes into the population ratio. I believe there is another nursing
home that is getting ready to build now and I think they got, it was my
understanding from Topeka,the last letter that would be issued from the State
Health Department; so I don't - they have you - the letters they would issue then
- then you would qualify as far as certain types of patients and the money that
you could get from them. I don't know if he had a letter of intent or not.
Finally I would appreciate it, I assume it is public record, if I could be
furnished a copy of that letter of intent for G & K so I could review it, analyze
it and see if I might have some comments on it. Thank you for your attention."
Mayor Usher said, "Well I wish you would leave that stuff. Aren't
you going to let us use it? I am always willing to look at someone else's
theories and policies because we certainly don't have all the answers. I might
go on to tell you we do have a memorandum of understanding in our files on how
we will go about on issuing the letters of intent, so we are not just operating
from the hip pocket in the back room."
Mr. Stokes replied, "Well maybe I misunderstood your comments when
I was here last time."
Mayor Usher said, "This was done back in June of 1972. Now admittedly
it is a very simple and very brief memorandum of understanding how we go about
issuing a letter of intent, and I mean I could sit up here and probably and
argue with you a little bit on what you say. Don't think that is necessary.
I think that if you have got some good ideas from Wichita or anyone else, we
will be glad to review them, and if we feel that they are going to be worthwhile,
make us look smarter,we will incorporate in another letter of memorandum. So I
would appreciate your leaving the one from Wichita, and that one phamplet at
least."
Mr. Stokes said, "Alright, Thank you."
Commissioner Weisgerber commented, "Now I am not sure, but I think
maybe we have, we'll have to look at Wichita's and Topeka's rules over, but I
think what we have may be actually a briefer but stricter than theirs, because
what we say is that bonds shall be saleable and arrangements for such sales
shall be the responsibility of the company requesting issuance. Some cities
I think, if I understand this correctly, help sell the bonds, or help issue
them, but we don't touch them in any way at all. This is strictly between the
bonding company and whoever requests the bonds, so that the city isn't involved
in this sale at all, but I don't know I would have to see what kind of
restrictions they had."
Mr. Stokes asked, "Mr. Weisgerber, did you follow by sequence of
events on down through default?"
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Commissioner Weisgerber replied, "Yes. I disagree with you on who
would be held responsible. The bonding company is going to sell these bonds.
They have to sell them legally on the basis that there is no recourse against
the city and I think if they default, that the bonding company who sells the
bonds, and most of these bonds are sold to financial institutions or people who,
bonds of this class are sold to people who have financial knowledge. I think
that the one who would be certainly in the large difficulty would be the bonding
company and not the city so I don't agree with you on this particular point."
Mr. Stokes commented, "Right, Right, up to the point where the default
then the bond holder could either do nothing or they could foreclose, take back
their collateral, and maybe settle out 5(t on the dollar, where the city then
would become involved is the next step after that, because we want to save our
name."
Commissioner Weisgerber replied, "I don't think we lose our name in
this. This is where I disagree with you."
Mr. Stokes said, "Well, when you say that, when you say that the bond
company is going to protect the City - here is documentary evidence of what
happened this past week with the bond rip off, and I believe we would like
to leave the city free - what is it? Free enterprise will come alive in 175."
Mayor Usher said, "Well, this is why I say I could probably sit here
and argue with you over it Bill, I don't figure it would settle anything for now.'
Mr. Stokes said, "I got the impression when I was here last time,at
least I was lead to believe from the comments made from the bench that there was
very little thought given to the issuing of the last letter of intent to G & K
and I felt that if this was the case I would go out on my own and gather up
some information to better enlighten you individually. I am not saying.- to keep
the record straight again, Topeka has not adopted 1 -he Wichita, they have it in
hand, they are studying it. That is all."
Mayor Usher said, "I have watched the Wichita newspaper and their
industrial revenue issues and of course you can't get everything out of the
newspaper, but it appeared to me that what they are doing down there was very
basically the same thing we have in our letter here, or our memorandum."
Commissioner Weisgerber said, "We have a criteria to go by."
Mayor Usher said, "I can see that there are certainly more words
in that particular thing than we have, they also have got the staff down there
I think that someone has to support itself to."
Commissioner Cooper commented, "Mr. Stokes, I think you are right when
you say that you concluded that this Commission does not investigate potential
seekers of letters of intent from the City Commission, we do not. You are right
in that assumption. Or if we do, I don't know anything about it to the best of
my knowledge I don't know anything about it. The people who and I am not just
talking G & K, because I would suppose that G & K, I wasn't present at that
particular meeting, but I would suppose that G & K was considered for a letter
of intent on the same basis that anyone else has received them. If they met
these general guidelines that has been explained to you that they find their own
bond purchaser and all the rest of it the City Commission does not become
involved. What you are saying is that they should."
Mr. Stokes said, "I am saying that there is only one person that is
going to protect the name of the City of Salina, and that is the five commissioners
right up there, and it doesn't take that much time when you say here is my
guideline, you bring me in financial statements, you bring me in this, you
bring me in that, so we can then give it to our accounting department.
Commissioner Cooper said, "They give us these assurances in effect when
they meet the guidelines but we do not review their financial statements, we do
not presume to determine that they are a solvent organization because this is
between the individual and whoever is going to buy his bonds, but we do get
their assurances and their confirmation that they do meet the other guidelines."
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Mr. Bengtson, City Attorney, said, "Bill, this letter of intent is
public property and Don will send you a copy, and also a copy of the memorandum
that we have in regards to bonds and he will see that you get a copy of those."
A TREE TRIMMING LICENSE APPLICATION was filed by Donald D. Deatherage
d/b/a Salina Tree Service, 616 West Crawford. The City Clerk reported the
applicant has paid the required fee and has the necessary surety bond and
certificate of public liability insurance on file. A motion was made by
Commissioner Weisgerber, seconded by Commissioner Caldwell and Losik to approve
the license application and authorize the City Clerk to issue the license.
Ayes: (5). Nays: (0). Motion carried.
A CEREAL MALT BEVERAGE LICENSE APPLICATION was filed by D. C. Martin
d/b/a Howard Johnson Restaurant, 2401 South Ninth Street. The City Clerk reporte
the applicant has paid the required fee and the application has been approved by
the Zoning Officer, Health Department and the Police Department. A motion was
made by Commissioner Caldwell, seconded by Commissioner Losik to approve the
license application and authorize the City Clerk to issue the license. Ayes: (5)
Nays: (0). Motion carried.
A MOTION was made by Commissioner Losik, seconded by Commissioner
Caldwell that the Regular Meeting of the Board of Commissioners be adjourned.
Ayes: (5). Nays: (0). Motion carried.
D. L. Harrison, City Clerk
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