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HomeMy WebLinkAbout1987-08-24 377 MINUTES OF THE MEETING OF THE CITY COMMISSION BOZEMAN, MONT ANA August 24, 1987 ************************ The Commission of the City of Bozeman met in regular session in the Commission Room, I Municipal Building, August 24,1987, at 2:00 p.m. Present were Mayor Mathre, Commissioner Jordan (for the afternoon session only), Commissioner Stiff, Commissioner Martel, Commissioner Vant Hull, City Manager Wysocki, City Attorney Becker and Clerk of the Commission Sullivan. The meeting was opened with the Pledge of Allegiance and a moment of silence. Mayor Mathre asked if any of the Commissioners wished any of the Consent Items removed for discussion. Commissioner Vant Hull requested that the agreement for professional services with Sorenson and Company be removed for discussion. Minutes It was moved by Commissioner Jordan, seconded by Commissioner Stiff, that the minutes of the regular meeting of August 17, 1987 be approved as amended. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Jordan, Commissioner Stiff, Commissioner Martel, Commissioner Vant Hull and Mayor Mathre; those voting No, none. - allow a fraternit house This being the time and place set for the decision on the Conditional Use Permit re- quested by Delta Sigma Phi Alumni Corporation to allow a fraternity house on Lots 8-13, Block 52, Capital Hill Addition. This site is more commonly known as 1417 South Fifth Avenue. City Manager Wysocki stated that included in the Commissioners' packets were various items prepared by the City Attorney for consideration, including a findings of fact statement, in I the decision-making process. Commissioner Stiff stated that he found the information submitted by the City Attorney very helpful in addressing the legal aspects of this decision. He indicated that after review of the site as well as the documents, he has found that this area of the community has changed over the years. He also noted that the fraternity has indicated a willingness to meet all of the conditions imposed by the City. He stated the third alternative for on-site parking includes twelve spaces, substantially more than the required seven spaces. The Commissioner also noted that the fraternity has agreed that not more than fifteen members plus one house parent will be living on the site at anyone time. Commissioner Stiff then stated that the basic concerns expressed by the neighbors ad- dress potential parking and noise problems. He then stated that he feels with the conditions firmly placed by the City, those problems are addressed. He then indicated the one item which does need to be addressed is the provision contained in Commission Resolution No. 980 for park- type development of the right-of-way for Lincoln Street, noting that a portion of that provision should be revoked as a part of the approval of this application. The Commissioner noted that the subject property is contiguous to the University campus and, thus, is an appropriate loca- tion for this application. He also cautioned that multi-family use of the site is a permitted use; and that could create more traffic and parking problems than the subject application. Commissioner Vant Hull stated that, following review of the information contained in the packet, she came to the conclusion that this application should be denied. She noted that the fraternity would have a negative impact on the neighborhood because activities will be held at I that location for all fraternity members, not just those residing there. The Commissioner noted that those activities will add to traffic impacts and parking problems in the area. She also stated that to provide adequate parking would destroy the yard of this site and, thus, the neigh- borhood. Commissioner Vant Hull stated that she has talked to University representatives who have indicated that they might pursue revision of the lots along Greek Way, creating more and smaller lots. She noted another possibility would be to use zero lot lines during construction of a building, which would result in two fraternities being located within the same structure. The 08-24-87 378 Commissioner indicated that noise is a factor when living next to a University facility; and she does not feel a quiet, existing residential area should be subjected to the additional noise. The Commissioner then stated that the Planning staff has suggested that an overlay dis- trict be created close to the University campus for fraternities and sororities. She noted that if such an overlay district is created, the southern boundary could be West Grant Street; and the subject site is located south of that. Commissioner Stiff reminded the other Commissioners that the current zoning along Greek I Way does not allow construction of fraternities or sororities. He also noted that the issue of economics must be taken into consideration, noting that the fraternity representatives have in- dicated they cannot undertake the costs of constructing a new facility on Greek Way. The Com- missioner once again stated that he feels that with the appropriate restrictions, this use could be approved without creating an adverse impact on the neighborhood. Commissioner Martel stated that the three issues raised during the public hearing were noise, traffic and parking. He noted that noise becomes a civil issue; and various laws address those problems. He then stated that traffic and parking are current problems due to the prox- imity of this area to the campus; and that problem cannot be addressed through approval or de- nial of this application. Commissioner Martel noted that fraternities are allowed as a conditional use in the R-3 zone; and the fraternity has indicated a willingness to provide substantially more than the re- quired off-street parking. The Commissioner noted that the Delta Sigma Phi fraternity is cur- rently located at 1106 South 6th Avenue, renting a University-owned residence since they had to relocate from the Quads. Commissioner Jordan noted that the City and the University are in partnership in this com- munity; however, he feels the University has let the City down by not addressing the issue of suitable locations for fraternities and sororities. He also stated that he feels the University could address the parking problems in that area of the community in a more effective manner. The Commissioner stated the subject block is a residential area; and those who purchased homes bought them under the existing circumstances. He indicated that he does not feel it I would be appropriate to allow a fraternity to move into that neighborhood, even with the sug- gested conditions. Commissioner Jordan stated that he feels the issue of the Lincoln Street closure and the traffic patterns in that immediate area should be addressed before this application. He also indicated that he feels multi-family use of the site would have less impact on the neighborhood than the proposed use. He stated that he cannot support the application under consideration at this time. City Manager Wysocki noted that keeping Lincoln Street open between South 5th Avenue and South 6th Avenue will be necessary if the alley is designated a one-way alley to allow the garbage trucks access for trash pickups. Mayor Mathre stated she supports the reasons for denial set forth in the City Attorney's information packet. She noted that her determination to support denial is based on general health, safety and welfare considerations. It was moved by Commissioner Stiff, seconded by Commissioner Martel, that the Condi- tional Use Permit requested by Delta Sigma Phi Alumni Corporation to allow a fraternity house to be located at 1417 South Fifth Avenue be approved, subject to the following conditions: 1. Prior to occupancy of the structure, all parking area improvements must be installed in accordance with the approved final site plan; 2. Prior to occupancy of the structure, the applicants shall obtain approval from the Bozeman City Commission of the revocation of the Lincoln Street closure (between South 5th Avenue and the alley directly west) pursuant to Commis- sion Resolution No. 980; I 3. Prior to occupancy of the structure, the applicants shall obtain approval of an ordinance designating the alley on the rear of the property as a one-way right-of-way; the applicants shall provide and install all one-way signs as shall be required by the Director of Public Service; 4. Twelve off-street parking spaces shall be provided in accordance with Alter- native No.3 in the site plan submitted as part of the application. Pin-down curbing shall be provided for each of the twelve spaces. Pavement marking of the spaces shall be installed and maintained on the site; 08-24-87 378 5. The driveway shall be designated a one-way acces s from South 5th Avenue, westward through the parking area, as shown in Alternative No.3, to the alley in a manner acceptable to the Planning Director; 6. The applicant shall revise the site plan to include a garbage enclosure com- pletely screening all refuse containers stored in the site and a detail of any signing proposed for the site for review and approval by the Planning Director; I 7. Prior to occupancy, the applicants shall comply with provisions of the Uniform Building Code, including required basement access, handicapped access, and handicapped bathroom facilities and other appropriate requirements; 8. That the developer shall enter into an Improvements Agreement with the City of Bozeman. If occupancy of the structure is to occur prior to installation of the improvements, it must be secured by a method of security equal to one and one-half times the amount of the cost of the scheduled improvements and their installation. Detailed cost estimates, construction plans and methods of security shall be made a part of that Agreement; 9. That three copies of the final site plan, containing all the conditions, cor- rections and modifications approved by the City Commission be submitted for review by the Planning Director within six months of the date of the City Com- mission approval, and prior to the issuance of a building permit for the proj- ect. One signed copy shall be retained by the Building Department, one sign- ed copy shall be retained by the Planning Director and one signed copy shall be retained by the applicant; and 10. That all on-site improvements (i.e., paving, landscaping, etc.) shall be com- pleted within 18 months of approval of the Conditional Use Permit. The Con- ditional Use Permit shall be valid for a period of only 18 months following approval of the use. Prior to the permanent renewal of the permit at the end of that period, the applicant must satisfy all the conditions in the granting of the permit. An on-site inspection will be made and a report made to the City Commission for their action. If all required conditions have been satisfied, the permit will be permanently renewed. The motion failed by the following Aye and No vote: those voting Aye being Commissioner Stiff and Commissioner Martel; those voting No being Commissioner Vant Hull, Commissioner Jordan I and Mayor Mathre. Commissioner Jordan stated he feels that at least a portion of the right-of-way for Lincoln Street between South 5th Avenue and South 6th Avenue should be kept open to provide a suit- able traffic pattern, particularly for the City's garbage truck. It was moved by Commissioner Jordan, seconded by Commissioner Vant Hull, that the Com- mission direct the staff to review and bring back the necessary documents to revoke the right to use a portion of Lincoln Street between South 5th Avenue and South 6th Avenue to maintain an acceptable route for vehicular traffic. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Jordan, Commissioner Vant Hull, Commissioner Martel, Com- missioner Stiff and Mayor Mathre; those voting No, none. Commission n Subordination A reement for Law- rence an City Manager Wysocki presented Commission Resolution No. 2670, as prepared by the City Attorney, entitled: COMMISSION RESOLUTION NO. 2670 A RESOLUTION OF THE CITY COMMISSION OF BOZEMAN, MONTANA, AUTHORIZ- ING THE MAYOR TO EXECUTE A SUBORDINATION AGREEMENT FOR THE LAW- RENCE AND MICHAEL CLOUSING PROMISSORY NOTE. The City Manager stated this Resolution authorizes the Mayor to execute a Subordination Agreement for Lawrence and Michael Clousing. He reminded the Commissioners that they had I approved a similar action recently, noting that this will allow the property owners to refinance the home. He then recommended that the Commission adopt Commission Resolution No. 2670. It was moved by Commissioner Martel, seconded by Commissioner Vant Hull, that the Com- mission adopt Commission Resolution No. 2670, authorizing the Mayor to execute a Subordination Agreement for Lawrence and Michael Clousing. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Martel, Commissioner Vant Hull, Commissioner Jordan, Commissioner Stiff and Mayor Mathre; those voting No, none. 08-24-87 --- - -- --------- 380 Lea ue of Cities and Towns Convention to City Manager Wysocki stated the Clerk of the Commission had placed this item on the agen- da as a reminder to the Commissioners that the deadline for early registration for the League Convention is this week. He then suggested that those Commissioners interested in attending either contact the Clerk or make their own arrangements. Discussion - possible revision of Ordinance No. 1171 (sidewalk snow removal ordinance) I City Manager Wysocki stated that the Commissioners had requested this item be placed on the agenda. He noted that Commissioner Vant Hull has distributed a memo containing her sug- gestions for revising the ordinance. He then distributed copies of the memo he had submitted to the Commission in December 1986 which made some changes in the manner in which the ordinance is enforced. He noted this memo provided for points of reference to indicate how clear the side- walks must be; and only one major snowstorm was received after the change in enforcement was made. The City Manager suggested that if any changes are to be made to the ordinance, they be submitted today so that the ordinance can be revised and become effective prior to the first snow. Mayor Mathre noted that Commissioner Vant Hull's memo indicates that the door hangers do not refer to the use of abrasive materials in clearing of sidewalks. The City Manager stated that abrasive materials may be used if it is not possible to re- move the snow and ice in any other manner. He indicated that the use of abrasives is to be de- termined by the City staff; therefore, that option is not included on the doorhangers. Commissioner Vant Hull stated that she feels the use of abrasives should be included on the notice, rather than written on by hand when the staff determines it appropriate. The Com- missioner then noted that attached to her memo is a sample of the "icebusters" campaign used in Boulder, Colorado. She indicated this approach is much more positive than the one used locally and suggested that the doorhangers be revised to use a simi lar, more positive approach. Commissioner Vant Hull asked if the Commissioners concur in her suggestion that Section I 18.24.020 be revised to provide exceptions to the enforcement of this ordinance for individuals with health problems, those who have hired the work done, or by allowing those who have re- ceived notices of non-compliance an additional period of time to clear the sidewalks at the dis- cretion of the Director of Public Works. Commissioner Stiff stated that such exemptions would negate the ordinance. Mayor Mathre noted that if such a provision were included, all judgments would become arbitrary. She indicated support for the ordinance as it currently stands. Commissioner Jordan noted that the Commissioners have received more positive comment than negative comment on this ordinance. He stated that in one more year the City may be able to back off the enforcement of this ordinance; however, he does not feel any change should be made at this time. Commissioner Martel stated he feels people are upset enough with this ordinance to write letters of opposition, noting that many people have received notices when out of town. He then indicated support for elimination of the ordinance. City Manager Wysocki stated most people have time enough when preparing to leave town to make arrangements for clearing of the sidewalk. He then reminded the Commission that when a property owner is billed for sidewalk snow removal completed by a contractor at the City's di- rection, the general taxpayers bear the costs unti I the property owner pays the bi II. He indi- cated that is not fair to those who do clear their sidewalks; and it is also not fair to those property owners who do not have sidewalks. Commissioner Stiff reminded the Commissioners that they have not asked staff for their I observations about enforcement of the ordinance. City Manager Wysocki stated that the memo, dated December 18, 1986, which he just resub- mitted to the Commission provides the staff's recommendation for enforcement of the ordinance. Commissioner Vant Hull stated another suggestion contained in her memo is that specific dates be included in the ordinance for enforcement, such as September 30 through April 1 of each year. She noted this would let residents know that if they leave home in the early fall or late spring, they will not be cited for unshoveled walks. She stated during those times of the year, the weather warms quickly and the snow doesn't last. 08-24-87 381 City Manager Wysocki reminded the Commission that the ordinance was adopted to ensure residents that the sidewalks would be cleared and safe for walking during the snow season. He also suggested that if the Commissioners do determine that setting of dates for enforcement of the ordinance is be done, administrative enforcement be used rather than changing of the ordi- nance. Commissioner Martel asked for the dollar amount of outstanding bills for sidewalk snow removal; Director of Finance Gamradt indicated about $2,000. Commissioner Martel noted that $10,000 has been included in the upcoming budget for side- walk snow removal enforcement, which he feels is an exorbitant amount. He indicated that he would support creation of a city-wide snow removal district, assessing the property owners on a pro-rata basis for the linear feet of sidewalk. Mayor Mathre asked for staff response to Commissioner Vant Hull's suggestion for revision of the notice. City Manager Wysocki stated the staff can restructure the public notice which is pub- lished in the newspaper as well as the doorhangers used. The Commission concurred in leaving the current ordinance in place. The City Manager indicated that any change, i.e., the setting of dates for enforcement, may be accomplished ad- ministratively. for sanitary sewer ompany City Manager Wysocki stated that Commissioner Vant Hull had requested this item be re- moved from the Consent Items. He noted that included in the Commissioners' packets were cop- ies of the- agreement, along with several letters stating opposition to the hiring of an out-of-town firm for the project. He then asked the Director of Public Service to provide a brief back- ground on the process which has been followed to date. Director of Public Service Dick Holmes reminded the Commission that this study is funded I through the Capital Improvement Program. He noted that the "request for proposals" was adver- tised; and the City received nine proposals. He noted that all of those proposals were from pro- fessional engineers who were qualified to do the work. He then indicated that two of the pro- posals were joint, with two professional engineers; and those were eliminated after staff deter- mination that two were not necessary. He indicated the seven remaining proposals were review- ed, with two out-of-town firms rising to the top. He noted that four firms were then inter- viewed, two of which had branch offices locally; and two of the firms pushed the use of "com- puter wizardry," which caused the price to rise considerably. He stated that of the two re- maining firms interviewed, one proposal based most of its work on past studies completed for the City rather than taking a new look at the system. The Director of Public Service stated that Sorenson and Company has shown it is capable of completing the work being requested by the City. In response to a question from Mayor Mathre, Director of Public Service Holmes stated that the request for proposals listed what work is to be completed. He noted that in the pro- posals, the firms outlined how the task would be accomplished and what the final product would be. He noted that the cost of the study was not an issue during the review of the proposals, as stipulated in the State Statutes. Commissioner Vant Hull asked if any of the local firms answered the requirements as well. Director of Public Service Dick Holmes stated that, although all proposals were submitted by professional engineers who were qualified to complete the task, the staff feels that Sorenson and Company will give the City the best product; and the negotiated price is reasonable. He I then indicated that, although some of those submitting proposals have branch offices in Bozeman, the majority of the work was to be completed in the main office somewhere else in the State. Commissioner Martel asked why the old studies are not to be used as a basis for this study, noting that continuity is important. City Manager Wysocki stated that some of the information which has been accumulated over time is not as accurate as it could be, with the size of lines listed not always being the size in the ground. He noted that this study should resolve those inconsistencies. He then re- minded the Commissioners that they authorized the staff to seek proposals in November 1986; and if location of the firm was to be an issue in the decision-making process, it should have been so noted at that time. 08-24-87 382 Commissioner Stiff expressed concern that the per diem paid to an out-of-town firm for this study will probably increase the costs to the City. Director of Public Service Holmes stated that the study will cost about $30,000, with prob- ably $1,000 of that being per diem costs. He noted this is rather insignificant when considering that even if a firm with a branch office here were utilized, per diem costs would be involved be- cause someone from the main office would be here to do the work. He then noted that the firm ranked in second position after the process was completed was a firm from Helena, with no local branch office. Commissioner Stiff asked how the negotiated cost compares with the costs submitted by other fi rms . The Director of Public Service stated that the fee schedule set out in each of the pro- posals provided for different hours for different levels of employees completing the tasks. He then indicated it is not accurate to compare the totals that would be derived from determining total costs of those proposals; and the City did not negotiate the fees with any of the other fi rms. He noted, therefore, that it is not possible to make a cost comparison, nor is it allowed by statute. Mayor Mathre noted that the Commission must rely on expert staff for items such as this. City Manager Wysocki reminded the Commission that the State Statute requires that any professional services costing over $5,000 must go through the proposal process. He then recom- mended that the Commission authorize him to sign the agreement as submitted. Commissioner Vant Hull asked if future requests for proposals should contain the pro- vision that preference will be given to local firms if all other elements are reasonably equal. Commissioner Jordan stated he doesn't feel the Commission should start strapping the staff in their review of proposal. He then noted that if everything else is equal, then prefer- ence could be given to a local firm. Commissioner Stiff stated that he does not have adequate information to vote on this matter. It was moved by Commissioner Vant Hull, seconded by Commissioner Jordan, that the Com- I mission authorize the City Manager to sign the agreement for professional engineering services with Sorenson and Company. The motion carried by the following Aye and No vote: those vot- ing Aye being Commissioner Vant Hull, Commissioner Jordan and Mayor Mathre; those voting No being Commissioner Martel. Commissioner Stiff abstained. Discussion - FYI Items City Manager Wysocki presented to the Commission the following "For Your Information" items. (1) Water use report for the week ended August 20, 1987. (2 ) A letter of resignation from the Zoning Commission as submitted by Patricia L. Follett . (3) The agenda and packet for the City-County Planning Board meeting to be held this evening. (4) The City Manager noted that citizens perked the community up for the U. S. West site visit. He stated appreciation for the efforts everyone gave to make the community attractive for that visit. (5) Mayor Mathre stated she has received several items in the mail, which she will place on the file cabinet for Commissioner review. Consent Items tember 8, I Claims It was moved by Commissioner Jordan, seconded by Commissioner Stiff, that the Consent Items be approved as listed above, and that the appropriate persons be authorized and directed to complete the necessary actions. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Jordan, Commissioner Stiff, Commissioner Martel, Commissioner Vant Hull and Mayor Mathre; those voting No, none. 08-24-87 383 Recess - 3:50 p.m. Mayor Mathre declared a recess at 3:50 p.m., to reconvene at 7:00 p.m. for the purpose of conducting the scheduled public hearing. Reconvene - 7:00 p.m. I Mayor Mathre reconvened the meeting at 7: 00 p. m. for the purpose of conducting the sched- uled public hearing. The Mayor noted that Commissioner Jordan is absent from this portion of the Commission meeti ng . Public hearin - Commission Resolution No. 2665 - intent to revise water rate schedule b imple- menting a percent Increase This was the time and place set for the public hearing on Commission Resolution No. 2665, entitled: COMMISSION RESOLUTION NO. 2665 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MON- TANA, ORDERING A PUBLIC HEARING BE HELD ON A PROPOSED TWELVE PER- CENT (12%) INCREASE IN THE WATER RATE CHARGED TO CUSTOMERS OF THE MUNICIPAL WATER SYSTEM. Mayor Mathre opened the public hearing. City Manager Wysocki stated that included in the Commissioners' packets was an infor- mation sheet on how the proposed water rate increase wi II affect customer bi lis; a listing of the projects which need to be completed in the future; and a financial summary of the Water Fund. He then asked the staff to review those documents following his opening statements. The City Manager stated that the purpose of the rate increase is to meet the bond cove- nants for the 1982 Water Revenue Bond issue, which will allow for refinancing at a lower interest rate if deemed beneficial. He also noted that the additional revenues will allow the City to con- I struct needed water system improvements by increasing the City's borrowing capacity. City Manager Wysocki stated that written protests have been received from F. O. Booth, Loretta Bridgewater, Kirke Frantz, Link Bakken, David M. Fraker, Gerald Gajewski, William F. Seel, Belle W. Fisher, Shirley Powell, and Bernard Hennessy. He noted that a neutral statement was received from Andy Perlinski. Director of Public Service Dick Holmes reviewed the information sheet which had been sub- mitted to the Commission. He noted the proposed increase is an across-the-board 12 percent in- crease. He noted that if the rate increase is approved, a resident whose average monthly water bi II is $10.00 wi II see that bi II increase to $11.20. He noted that this increase is projected to generate an additional $180,000 per year, $80,000 of which is needed to meet the existing bond covenants. He noted the remaining $100,000 is to be used for construction of future system im- provements. He then indicated that the previous water rate increase resulted in conservation by the consumers; therefore, the actual revenues are less than projected. The Director of Public Service reviewed the list of projects which have been completed with the 1982 Water Revenue Bond issue, noting that the total cost of those projects is almost $5.5 million. He then reviewed the list of projects which are needed in the water system, in- cluding improvement of the Lyman Creek water supply, raising and rehabilitating the Hyalite Dam, installation of a presedimentation basin near the plant, expansion of the water treatment plant, improvements to the transmission mains, and acquisition of additional water rights, at a total estimated cost of $9.6 million. The Director of Public Service stated that the City cannot I fund those projects with the 12 percent increase under consideration at this time; however, if the bond covenants can be met, the City could refinance those bonds and gain sufficient monies to begin at least one of the projects. He then indicated water consumers can expect a number of increases in the water rates over the next few years to address the needs which currently exist. Administrative Services Director Miral Gamradt reviewed the financial summary of the Water Fund for Fiscal Years 1982-83, 1983-84, 1984-85, 1985-86 and 1986-87. He noted the first line reflects the amount of revenues required to meet the 125 percent bond covenant require- ment, and the next lines show the amount of actual revenues and the percentage of bond cover- 08-24-87 381t age that represents. He noted the City is getting closer to meeting its obligation, with last year's revenues being 114 percent of the bond coverage; and this 12 percent increase should en- sure that the City can meet that obligation in the future. He then reviewed the other line items contained in the summary, noting that the Water Fund realized a net profit in Fiscal Years 1982-83 and 1983-84, with net losses in the past three fiscal years. He also noted that the Water Fund currently owes the General Fund $387,000, which will be repaid as funds permit over the next few years. I The Administrative Services Director stated that interest expense for the bond issue runs about $450,000 per year, which decreases slightly as bonds are paid off. He noted that if re- financing of the bond issue could decrease that amount another $100,000 per year, improvements could be made in the water system more readily. He then indicated that other changes reflected in the financial summary are increases in operating expenses and salaries, largely due to bring- ing the water treatment plant on line. Administrative Services Di rector Gamradt stated that the staff anticipates that the pro- posed water rate increase will result in additional conservation measures by the consumers; therefore, the increase will not generate as much revenue as projected. Mayor Mathre asked about the significance of meeting the 125 percent coverage require- ment in the bond covenants. City Manager Wysocki reminded the Commission that about eight months ago, the City con- sidered refinancing of the water bonds, noting that the existing average interest rate is 9.65 percent; and the opportunity to refinance at 6.5 to 6.75 percent presented itself. He indicated that the City was unable to refinance at that time because the bond insurance underwriters found that the 125 percent coverage was not being met. The City Manager stated that he feels it is imperative for the City to consider adjusting the water rates so that the covenants are met; and if the opportunity arises to refinance, it can be pursued. He noted it is important for the City to manage its affairs in a business-like manner; and if it can save $100,000 in interest ex- pense each year, it should do so. The Administrative Services Director stated that if the City can save two percentage I points on the interest rate, it will realize the $100,000 interest savings, which will decline slightly over the fifteen-year remaining life of the bond issue. He also noted that if the City realizes an additional $100,000 in revenues due to the proposed 12 percent increase, the amount to be borrowed for a specific project will decrease accordingly. He stated that the additional revenues and cost savings could also be utilized to retire a larger debt if the City decided to enter into fairly substantial water system improvements. Commissioner Martel noted the projected revenues for Fiscal Year 1986-87 were $1.5 million and asked what the actual revenues were. The Administrative Services Director responded that they were within 1 to 2 percent. City Manager Wysocki distributed to the Commission copies of the water rate structures which became effective on January 1, 1983 and April 30, 1986, as a result of Public Service Com- mission action. He noted that the 1986 water rate increase changed the base rate slightly; how- ever, it also changed the minimum water consumption from 500 cubic feet per month to 250 cubic feet per month to address the small consumer. He then reminded the Commissioners that prior to the 1983 water rate increase, the City had not seen a change in rates for over 25 years. He noted at that time, it was determined that smaller adjustments made on a frequent basis would be better than large increases made after many years. He indicated that the smaller increases are more equitable, being paid by those who are receiving the benefit, rather than missing an entire generation as was done in the 1960's and 1970's. Commissioner Vant Hull asked how many water customers use the minimum amount of water, thus paying only the base rate. She suggested that the Commission may wish to consider not I raising that base amount, thus not impacting the small user on a fixed income so dramatically. Administrative Services Director Gamradt stated he does not know how many customers use the minimum. He then indicated that to leave the base rate as it is would result in a net increase of 9.6 percent rather than 12 percent. He reminded the Commissioners that all services are charged the base rate. Commissioner Martel asked why the relocation of the Mystic Dam is not included in the list of proposed projects. Director of Public Service Holmes stated he was trying to keep the cost under $10 million. He noted that relocation of the Mystic Dam could be added to that list, at an estimated cost of $5 million. 08-24-87 38:) City Manager Wysocki noted that the Commission has established an annexation policy re- quiring that new annexations provide water rights or payments-in-lieu. He indicated the monies that have been collected through that process are being held in an account for purposes of ac- quiring additional water rights when they become available. Mr. Jim Taplin, 221 West Hayes Street, stated opposition to the water rate increase. He noted that the proposed $1.20 increase is to be only the beginning of a series of increases. He I noted that a 12 percent increase each year could result in substantially higher water bills in a short period of time. Mr. Taplin noted that the list of projects is not prioritized; and he feels that the presedimentation is the most important one listed. He also questioned how the $100,000 in revenues generated each year will allow for construction of any of the projects listed, noting that each one costs $2 million to $3 million to complete. City Manager Wysocki stated that an additional $100,000 in revenues each year would give the City the ability to borrow an additional $1 million through issuance of revenue bonds. He noted that the projects cannot be prioritized until the City knows how much money is available. He indicated that construction of a presedimentation basin would allow the City to better utilize the water which is currently available; however, expansion of the water treatment plant, cover- ing of the Lyman Creek water supply, and maintenance of the distribution system are also impor- tant. Commissioner Vant Hull noted that the City has committed itself to the raising of Hyalite Dam; and that project is to be completed on the State's timeline. The City Manager indicated that the State currently projects that the raising of Hyalite Dam will be completed in 1991; and the City must be in a position to begin payments for retiring of the debt at that time. Mr. Taplin noted that if residents conserve water in an effort to keep their water bills at the current level, the City wi II not see the projected revenues; and wi II, thus, not be able to complete the projects as listed. Mr. Steve Green, 3030 Bridger Drive, owner of Scrubby's Car Wash, asked how the City I plans to develop the spring at Lyman Creek. Director of Public Service Holmes stated the City plans only to cover the spring and the supply to avoid ground contamination and the possibility of giardia. Mr. Green then stated that the 12 percent increase will have a definite impact on his bus- iness, especially when the economy does not allow him to raise his prices. I n response to a question from the City Manager, he indicated that a six-minute car wash uses approximately 24 gallons of water. He noted that to wash a car at home takes 100 gallons if the hose is left run- ning. He then stated that his business uses about 1.5 million gallons of water per year; and a portion of that is due to the fact that he must run water constantly in the winter to keep the lines from freezing. Commissioner Vant Hull asked if anyone using only the minimum amount of water wished to address the possibility of leaving the base rate at its current level; no one responded. Mr. John Nehring, 301 South 19th Avenue, stated he is basically neutral on the subject. He then asked what the City's capacity is for producing water to the users. City Manager Wysocki indicated the water treatment plant can process 10 million gallons per day; and an additional 1.25 million gallons can be generated from the Lyman Creek supply. He then stated that during the winter, an average of 4.5 million gallons is processed through the plant; and 750,000 gallons is used from the Lyman Creek supply. Mr. Nehring stated he feels the City should take whatever steps are necessary to in- crease effective use of the water supply. He noted that the City imposed watering restrictions this summer; and he feels those restrictions were heavier than necessary. I Mr. Ed Sondeno, 1612 South Tracy Avenue, stated he works at the Physical Plant at Mon- tana State University. He noted that the City staff has indicated a desire to enact smaller rate increases more frequently than it has in the past and asked for estimates of those increases as soon as they are known. He indicated that he does the budgeting for the University's utilities; and a 1 or 2 percent rate increase can have a definite impact on their budget. He also noted that the budgeting is done about four months before the start of the fiscal year, so he needs to know about potential increases as soon as possible. Mr. Sondeno stated that he was in contact with the City staff prior to preparing the bud- get for this fiscal year; and the last word he received prior to completing his budget was that a 10 percent increase was anticipated around the end of the year. 08-24-87 38C The City Manager indicated that the City may change the water rates no more than once each year; and the maximum increase at the local level is 12 percent. He then noted that with the development of wells for irrigation use in recent years, the impact of this increase on the University will be somewhat decreased. Commissioner Stiff noted that the Commission realized that the maximum increase would need to be implemented as soon as possible to help put the Water Fund back into a positive cash position. He noted that additional increases are going to be necessary to meet the City.s obli- I gations, both now and in the near future. City Manager Wysocki reiterated that the City is addressing a long-standing problem, not- ing that if small increases had been implemented from 1957 to 1-983, the Water Fund would be in better financial shape at this time. Mayor Mathre closed the public hearing. City Manager Wysocki reminded the Commission that a decision must be made within thirty days; and that decision does not become effective until ten days after it is filed with the Clerk of the Commission. He then indicated that if a decision is made tonight, the new rates will first be reflected in the November 1 water billing. He noted that if the decision is deferred until next week or later, the new rates will first be reflected in the December 1 water billing. It was moved by Commissioner Stiff, seconded by Commissioner Martel, that the customary one-week waiting period be waived. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Stiff, Commissioner Martel, Commissioner Vant Hull and Mayor Mathre; those voting No, none. City Manager Wysocki presented Commission Resolution No. 2671, as reviewed by the City Attorney, entitled: COMMISSION RESOLUTION NO. 2671 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MON- TANA, ESTABLISHING RATES FOR WATER CHARGES FOR THE CITY OF BOZE- MAN. The City Manager recommended that the Commission adopt this Resolution, which will estab- I lish new water rates which reflect an across-the-board 12 percent increase. Commissioner Martel noted that the financial summary reveals that the operations portion of the Water Fund has been self-supporting; however the water plant has increased expenditures substantially. He also stated that the watering restrictions imposed in recent years have held the revenues down more than necessary. He indicated that if watering restrictions had not been imposed this year, the City could have generated an additional $150,000, based on sale of an ad- ditional 1 to 2 million gallons of water per day for 120 days; and this proposed increase would not be necessary. He also noted that a 12 percent increase will cause people to conserve more; and the anticipated revenues will not be realized. Commissioner Vant Hull stated that she feels community safety, particularly when consider- ing fire protection capabilities, is much more important than the monies which could have been generated from the sale of more water. Commissioner Stiff noted that if the bond issue could be refinanced at a lower interest rate as a result of this water rate increase, it would not only generate an estimated $180,000, but it could result in a savings of $100,000 in interest expense. He stated the City should make every effort to be efficient in its methods of operation, reducing the costs involved whenever possible. The Commissioner stated it is also important for the City to meet the bond covenants so that it is in a position to refinance the bonds when necessary. Commissioner Martel stated he could support an increase in the water rates if the monies were earmarked for expansion of the water supply and improving the method of delivery; how- ever, he cannot support it when the monies are to be used to cover a deficit due to increased I costs of operation. Commissioner Stiff noted that the Water Fund currently reflects a $400,000 deficit which has been funded through a loan from the General Fund, which must be repaid. Administrative Services Director Gamradt stated that the financial summary reflects de- preciation, which is a non-cash expenditure. He noted that the cash flow for this past fiscal year should be a small positive one, although the bottom line is negative. City Manager Wysocki noted that the water treatment plant began operation on Apri I 10, 1984. He noted that the major change in the status of the Water Fund is seen in Fiscal Year 08-24-87 38"/ 1984-85, when the plant was in operation for the entire fiscal year and when depreciation ex- pense took a large jump. It was moved by Commissioner Vant Hull, seconded by Commissioner Stiff, that the Com- mission adopt Commission Resolution No. 2671, establishing new rates for water charges. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Vant Hull, Commissioner Stiff and Mayor Mathre; those voting No being Commissioner Martel. I Commissioner Martel asked how many water services are not metered at the present time and whether the City has adequate meters to install at the present time. The Director of Public Service indicated there are probably just under 170 unmetered ser- vices at this time. He stated the City does have some meters on hand; however, he is not sure how many are in stock. He noted it would not be difficult to pick up the meters needed to com- plete the conversion. It was moved by Commissioner Martel, seconded by Commissioner Vant Hull, that the Com- mission encourage the staff to install meters at all unmetered water services as soon as possible. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Martel, Commissioner Vant Hull, Commissioner Stiff and Mayor Mathre; those voting No, none. Adjournment - 8:33 p.m. There being no further business to come before the Commission at this time, it was moved by Commissioner Vant Hull, seconded by Commissioner Stiff, that the meeting be adjourned. The motion carried by the following Aye and No vote: those voting Aye being Commissioner Vant Hull, Commissioner Stiff, Commissioner Martel and Mayor Mathre; those voting No, none. JUDITH A. MATHRE, Mayor I ATTEST: Clerk of the Commission I 08-24-87