City Council Minutes 12-15-20

TREMONTON CITY CORPORATION
CITY COUNCIL MEETING
DECEMBER 15, 2020

Members Present:
Connie Archibald
Lyle Holmgren
Bret Rohde
Rick Seamons
Lyle Vance
Roger Fridal, Mayor
Shawn Warnke, City Manager
Linsey Nessen, City Recorder

CITY COUNCIL WORKSHOP

Mayor Fridal called the December 15, 2020 City Council Workshop to order at 5:18 p.m. The meeting was held in the City Council Meeting Room at 102 South Tremont Street, Tremonton, Utah. Those in attendance were Mayor Fridal, Councilmembers Archibald, Holmgren, Rohde, Seamons, and Vance, City Manager Warnke, and City Recorder Nessen. The following Department Heads were also present: Fire Chief Robert LaCroix, Community Services Director Marc Christensen, Public Works Director Paul Fulgham, Police Chief Kurt Fertig, and Treasurer Sharri Oyler. Also in attendance were City Attorney Dustin Ericson and City Engineer Chris Breinholt.

1. Review Introduction to Public Infrastructure District (approximately 45-60 minutes) – Aaron Wade and Randall Larsen, Gilmore & Bell, P.C., Ryan Polson, Wells Fargo Bank, Alex Buxton, Zions Bank Public Finance

Mr. Wade said a month or so ago we provided the Council with a presentation on PIDs and are here to address questions. PIDs are an economic development tool designed to help finance public infrastructure—anything that is going to be owned by a governmental entity. PIDs are a financing mechanism to get the improvements built, which are then dedicated to the City. This can be done through an assessment bond or limited tax bond, which are repayable through a property tax for property within the district. This allows new growth to pay for itself. He reviewed the different types of bonds.

Mr. Larsen said if you create the district there is separation and no liability. The City controls it, but the process of creating the district allows the PID to issue the bond. Instead of all taxing entities forgoing their property tax, this tool redistributes property taxes and brings new revenue to pay for that growth. He explained the pros and cons of special assessment bonds and a PID bond. Mr. Wade said a PID could finance a wide array of infrastructure. The City, as the creating entity, can put parameters and limitations on the types of infrastructure the district can finance. You are also going to set a property tax limit and determine whether there should be a maximum bond the district can enter into. Once this district is created, it is its own separate government entity. It will be a unique unit of government that will have annual audits and financial reports, and will have to comply with all the protections that are built into the code. Any bonds it issues are not the liability of the City, but there is room for the City to have involvement in ongoing reporting so it knows citizens are being treated fairly.

Mr. Wade said if the City chooses to go ahead with this, the Council would adopt a resolution. The preferred method is to have property owners file a petition with the City saying they would like this district and why. If at least 66% of property owners sign the petition there is an automatic exemption from being required to hold an election to create the district. The property owner would file that petition with the City Recorder and create detailed information on what services they want to provide. Once that is filed there is a 30-day clock to certify the petition. It would either be certified or the City would let the property owners know how it is deficient. The City would then hold a public hearing and the City could create that district through a resolution. There would be an agreement between the City and district binding them to follow governing documents and reporting requirements. All those documents would be submitted to the Lt. Governor’s Office for review and they would issue a certificate of creation.

Mr. Wade said we encourage the City to adopt a PID policy to avoid looking arbitrary. The policy would be a procedural document for the City and applicants to follow—an outline of requirements for those wanting to request a PID. This also gives the City criteria in reviewing applications and in determining which would be approved or denied. There is no liability to the City for creating or not creating a district. Mr. Larsen said this helps the City understand the product that is being financed and to ensure it fits the Master Plan. This is an intentional process to make sure the City’s and developer’s interests are protected. Mr. Wade said this area of the City would have slightly higher property taxes so it is important to make sure there are rigorous disclosure requirements on the developer. Residents would have that information to determine if that additional tax is worth the product. If not then they can choose to live outside the PID. Mr. Larsen explained that the policy and agreements would help the City work through any issues. Mr. Wade said since there are currently no residents in the district the board would be comprised of property owners or their agents and officers. In the petition the property owner would submit proposed names and the City would formally appoint those individuals to be board members. The governing document would establish milestones for when those seats would transition from appointed to elected.

When asked how this benefits the developer, Mr. Wade said this is a worthwhile tool for developers and cities because it allows for larger scale master plan communities to come to fruition. The developer does bare the risk, but they know they have sufficient funds to complete the infrastructure and start selling lots. Mr. Larsen said the biggest benefit to the developer is that this allows access to taxes and interest rates for financing infrastructure that has to be paid for one way or another.

When asked how they want to move forward, the Council said they would like City staff to work with them to put together a policy. Mr. Wade said our recommendation would be that all obligations for infrastructure stay on the developer and not the district. The requirements and infrastructure standards would be put in those agreements so the burden would always stay on the developer. We will coordinate with City staff to go over the policy and have something ready for the Council to review in a couple weeks.

2. Discussion of expanding the secondary water system including, but not limited to, the discussion of the increased water rates and bonding scenarios for the construction of additional water system improvements (approximately 45-60 minutes) – Shawn Warnke, City Manager and Paul Fulgham, Public Works Director

Mr. Buxton said the plan would be to issue and structure a bond similar to what we did on phase 1, which was private placement. Councilmember Rohde had a third proposal, which he read. Tremonton has used all its ERCs (4,500). I would like to see the continued growth of Tremonton, but how do we free up enough ERCs to allow immediate and continued growth? I feel this can be done as we bake several ingredients together. Number one would be a conservation campaign of reducing our culinary water usage by 10% over the next three years. That has the potential of allowing us to construct up to 1,900 new units within three years. We could exact a penalty on usage over X amount of gallons—a sharp and large increase over our current rate. Number two we need to use a portion of our water reserve to fund low hanging fruit such as Post, the hospital, and service areas 2 and 4. This would free up 209 additional ERCs. Thirdly, we need to get the remainder of the 600 connections signed up and using the secondary system, which has the potential savings of 197 ERCs. As new homes are built their additional revenue can help fund future projects. Each new unit will add $300 per year. The 153 new units this year is an annual increase of about $45,000. This forecasts a 66% reduction in culinary water usage as each new home comes on with secondary water and 10% conservation, along with other ideas would create the potential to build 2,000 more units without raising rates. The developers need to know we are in total support of them and growing Tremonton, but we have to work together for a solution. I think we can do it without raising rates. Even if we do not get conservation it allows for an additional 800 homes. I am not comfortable making the decision to raise rates without considering these facts.

Councilmember Vance said I know there is a timeframe and we need to start getting bids, but I think we need to get Engineer Breinholt to explain these numbers. We have to do secondary, but we could put it back one year and let some of the income catch up to us. Manager Warnke said my understanding is that the graph includes all those variables. He included everyone migrating to secondary water, but did not forecast conservation. The issue is timing. Some of these things could help, but there would be a point in time where we could not issue building permits and Engineer Breinholt would not sign off on future subdivisions. Director Fulgham said if we do nothing we are 109 in arrears of where the State says we should be. Councilmember Rohde said it is going to take us three years to start seeing the fruits of that bond. These things will be quicker than that. Director Fulgham said if we do not raise rates conservation will not happen. I have been in this business for 40 years and the only way you raise conservation is through people’s pocketbook. If people do not feel it they will not adhere to it. Engineer Breinholt confirmed that his chart did include all the users that have secondary water available in service areas 1, 2, and 3, along with the projects and expansion they have discussed for a pump station, as well as Service Area 5. All the secondary water projects were shown on that chart with Service Area 3’s impact coming next summer. These are our best guesses and they balance out pretty close. Manager Warnke clarified there is no consideration for conservation in the chart or doing a project area for Post and the hospital.

Councilmember Rohde asked about the debt service rate of 125% and if that could be adjusted as more people come on the system. Is that going to help create a variance so we can bring the rate down? Manager Warnke said you can always bring the rate down a bit. We need a written analysis from Finance Director Roberts about where we are at with the debt service ratio. We are getting to a point where we do not have the resources financially or even physically to supply the services and that is a very thin line the Council is walking. We need resources to provide services. This is the Council’s decision, but there are tools to stop growth or wait and see. If our assumptions and estimates do not work, we could stop growth when we know the outcomes of some of these decisions.

Mayor Fridal said if we move forward on the bond and more money is coming in, we could reduce the burden on taxpayers. We need to look forward to the future because if we get ourselves in a financial bind we have deeper problems. We do not want to burden the citizens or stop growth in Tremonton. I think we need to move forward gently and slowly, but deliberately looking to the future. Councilmember Rohde said when these bonds mature we would have an additional 25%, is the intent of the City to drop the rate? Director Fulgham said historically the City has done that.

3. Review of items listed on the 7:00 p.m. agenda

4. CLOSED SESSIONS: No closed session held at this time.

a. Strategy session to discuss the purchase of real property when public discussion of the transaction would disclose the appraisal or estimated value of the property under consideration or prevent the public body from completing the transaction on the best possible terms; and/or
b. Strategy session to discuss the character, professional competence or physical or mental health of an individual; and/or
c. Strategy sessions to discuss pending or reasonably imminent litigation; and/or
d. Discussions regarding security personnel, devices or systems

The meeting adjourned at 6:58 p.m. by consensus of the Council.

CITY COUNCIL MEETING

Mayor Fridal called the December 15, 2020 City Council Meeting to order at 7:09 p.m. The meeting was held in the Tremonton City Council Meeting Room at 102 South Tremont Street, Tremonton, Utah. Those in attendance were Mayor Fridal, Councilmembers Archibald, Holmgren, Rohde, Seamons, and Vance, City Manager Warnke, and City Recorder Nessen. The following Department Heads were also present: Fire Chief Robert LaCroix, Community Services Director Marc Christensen, Public Works Director Paul Fulgham, Police Chief Kurt Fertig, and Treasurer Sharri Oyler. Also in attendance were City Attorney Dustin Ericson and City Engineer Chris Breinholt.

1. Opening Ceremony:

Mayor Fridal informed the audience that he had received no written or oral request to participate in the Opening Ceremony. He asked anyone who may be offended by listening to a prayer to step out into the lobby for this portion of the meeting. The prayer was offered by Chief Fertig and the Pledge of Allegiance was led by Recorder Nessen.

2. Introduction of guests:

Mayor Fridal welcomed those in attendance.

3. Declaration of Conflict of Interest: None.

4. Approval of Agenda:

Motion by Councilmember Vance to approve the agenda of December 15, 2020. Motion seconded by Councilmember Seamons. Vote: Councilmember Archibald – aye, Councilmember Holmgren – aye, Councilmember Rohde – aye, Councilmember Seamons – aye, Councilmember Vance – aye. Motion approved.

5. Approval of minutes – December 1, 2020

Motion by Councilmember Archibald to approve the minutes of December 1, 2020. Motion seconded by Councilmembers Rohde and Holmgren. Vote: Councilmember Archibald – aye, Councilmember Holmgren – aye, Councilmember Rohde – aye, Councilmember Seamons – aye, Councilmember Vance – aye. Motion approved.

6. Public comments: Comments limited to three minutes.

Shad Stevens has talked with the Public Works and Recreation departments about the park named after his mom—Jeanie Stevens. This February marks the 20-year anniversary of her passing and the naming of that park. As a family we have got together and are considering ways to signify that event. We would like to have a plaque made because many residents did not know her or why it was named after her. We are proposing a plaque with an image and short description of who she was and what she meant to the City. We have a few bids ranging from $4,000 to $5,000. The City said they would take care of the concrete work. We would also like to have a small commemoration of the event. The Council said they would put it on a future agenda for more discussion.

Resident Brandon Mower asked about secondary garbage cans and an ordinance about reimbursement up to one year even if a mistake has been made. For five years I have been charged for a secondary garbage can. I was told they could only refund me for one year when I have not had a second garbage can for over five years. I have $360 worth of charges. Can something be done about that? The Council said they would have a discussion on the matter.

7. City Council Business

a. Discussion and consideration to surplus the Food Pantry Van – a 1994 Dodge Ram Wagon

Director Christensen said this is the formal way to dispose of the property. It is getting old and beat up. The truck we have services all the needs that the van had so we are asking your approval to put the van on the surplus auction site.

Motion by Councilmember Holmgren to have the City surplus the van. Motion seconded by Councilmember Vance. Vote: Councilmember Archibald – aye, Councilmember Holmgren – aye, Councilmember Rohde – aye, Councilmember Seamons – aye, Councilmember Vance – aye. Motion approved.

b. Discussion and consideration of adopting Resolution No. 20-54 renewing the Lawn Care Service Agreement between Tremonton City and Double J Lawn Care

Director Christensen said we have a meeting with them every year to talk about the previous year and what could be improved. Two years ago we entered into an agreement with Double J Lawn Care. That was a one-year agreement with the option to extend a year if we were happy with their services, which we did. We are still very happy with the way they have taken care of our lawns. They are a local company who takes a lot of pride in their work. They do a good job and are very reasonable to work with. They did ask for an increase in price this year. Since 2011 we started with an $80,000 contract. If we went based off inflation prices (a 1.5% increase) we would be up to $92,000. They asked about doing an extension with an inflation increase annually. To bump them back up to where inflation would have been and we thought it fair to do a rate increase of 14% and then continue it on at 1.5% for the next five years.

Motion by Councilmember Archibald to approve the increase as noted for the renewal of the contract. Motion seconded by Councilmember Holmgren. Roll Call Vote: Councilmember Archibald – aye, Councilmember Holmgren – aye, Councilmember Rohde – aye, Councilmember Seamons – aye, Councilmember Vance – aye. Motion approved.

c. Discussion and consideration of adopting Resolution No. 20-55 reaffirming, amending, and enacting, new fees and fines in a schedule entitled Tremonton City Consolidated Fees and Fines Schedule including, but not limited to, amending fees for secondary water, culinary water, and emergency medical services fee

Manager Warnke said the most significant proposal is the secondary water rates. I also wanted to note we changed the EMS fees. We adopt the State’s rates and show that in our fee schedule. There is a footnote stating that the rates are adopted by the State automatically. This is more of an update to reflect the current rates we are charging. There is also an issue we are proposing be clarified in the fee schedule that relates to the refund of nominal amounts—more specific with renters. Their deposit is applied to their last month’s rent and if it is under $3 we consider that nominal. Unless they specifically ask for it, we would not cut a check. At some point it is more expensive to process than it is worth. Earlier this spring we adopted an ordinance relative to business licensing. I will work with Treasurer Oyler to get those correct fees that have already been adopted. We could add an appendix that shows the business fees or administrative convenience all in one schedule or use a separate document.

Manager Warnke then gave a presentation on the proposed water rate and anticipated bond scenario. He went through the more recent applications for growth, which are coming into the City consistently. The newest bond scenario would cost $4.8 million. This proposes using $400,000 from reserves to drop that down to $4.4 million. That would leave $600,000 in the City’s reserves and the downside to that is that it leaves less money for other smaller projects.

Manager Warnke explained the bond scenario put together by Zions. It is a $4.4 million bond amount with a 15-year term and 1.76% interest rate. Over the life of the bond we will pay $5.1 million in principal and interest with the annual debt service payment of $342,000. The debt service ratio turns that into $427,000. We have 3,500 units currently and divided that between them to get an increase of $121 annually to each unit or $10.10 per unit on a monthly basis. There are a couple ways to raise that revenue within the rates. I looked at increasing each tier by a quarter and came up with $114,000 annually and for the commercial side that would be $64,000 for a total of $187,000. I then subtracted that number by the total amount to back into the base rate. The other scenario was to show what the base rate would be as a monthly increase. He reviewed the pros and cons of those scenarios. If the Council chooses, they would adopt this resolution after January 1 and establish water rates by ordinance after we give notice to the retail customers of a proposed rate increase and hold a public hearing.

Councilmember Archibald said I appreciate the education we have received for months. There have been tons and tons of conversations and I agree conservation is important. We are concerned about the citizens of Tremonton and increasing their rates, but water is important and we have to have it. We need to go forward and let the citizens of Tremonton support us. There has been a lot research from Director Fulgham and Manager Warnke, and all the councilmembers have thought about it and done all we can. We cannot grow as a community without water and I for one support this. We need to be conservative and give back to citizens as we pay our debt. We have talked and talked and it is time to go forward. I am anxious to hear from the citizens and what they would suggest. It might cost them more money, but they have the option to conserve. I think we should go forward with bonding. Councilmember Holmgren said I am in agreement—we need to go forward. We are running on the edge and if we do not make a decision and move forward we run the risk of curtailing growth. I am in favor of moving forward and like the idea of the base rate increase and lowering it as we pay off debt.

Motion by Councilmember Holmgren to adopt the resolution with an increase in the base rate. Motion seconded by Councilmember Archibald. Roll Call Vote: Councilmember Archibald – aye, Councilmember Holmgren – aye, Councilmember Rohde – nay, Councilmember Seamons – nay, Councilmember Vance – nay. Motion failed by a 3-2 vote.

Councilmember Vance said I would like to sit down and run through those numbers with Engineer Breinholt. I need to be sold on the numbers before I vote on raising people’s rates. We have our backs against the wall and feel we have to vote or we are going to die, but that is not the case. We will keep moving forward, but we need to see all the options. What about another well and those costs? We ought to focus on bringing new water to the table if it is available. It seems like the only solution we have is raising the rates. We have not talked about these other options. Director Fulgham said those numbers are included in their Capital Facility Plan. The Council agreed to meet on Thursday at 9 a.m. for more discussion.

d. Discussion and consideration of the City Council directing City staff to work with the City Municipal Advisory Alex Buxton, with Zions Public Finance and Randall Larsen, Gilmore Bell to prepare a parameters Resolution and other documents associated with consideration of secondary water bonds

Motion by Councilmember Holmgren to table the item. Motion seconded by Councilmember Archibald. Vote: Councilmember Archibald – aye, Councilmember Holmgren – aye, Councilmember Rohde – aye, Councilmember Seamons – aye, Councilmember Vance – aye. Motion approved.

8. Calendar Items and Previous Assignment

a. Review of calendar

The Council was reminded of the ongoing Christmas light display.

b. Review of past assignment: None.

9. Reports & Comments:

a. City Manager Reports and Comments

1. Report on RV sewage dumpsite

Manager Warnke said Councilmember Archibald had a conversation with a resident, who was asking about a sewage dumpsite. The City previously had one at the treatment plant, which was done away with. Anything unattended creates potential for a mess and liability for the City. I reached out to local business owners who are in the industry and asked them if there was a partnership we could do to incentivize them to have a dump station on site, which they would monitor and be in charge of. There was no interest. I suggest the City not provide this service and I wanted you to be aware of the issues surrounding it.

b. Development Review Committee Report and Comments: None.
c. City Department Head Reports and Comments: None.
d. Council Reports and Comments

Councilmember Rohde brought up the meeting that was held with West Liberty Foods and the issues residents were facing in the area. Councilmember Rohde said it went well. I am excited to see the direction they are headed. Councilmember Holmgren said the public was good too. Everyone had an attitude of wanting to get along and solve the problem.

Mayor Fridal told the Council of a couple letters thanking the City. One was from Honeyville thanking Tremonton for their generosity in providing them with compost to prepare their park. The City was also thanked for holding an EMT class and for all the fire department does.

Motion by Councilmember Holmgren to move into closed session. Motion seconded by Councilmember Seamons. Vote: Councilmember Archibald – aye, Councilmember Holmgren – aye, Councilmember Rohde – aye, Councilmember Seamons – aye, Councilmember Vance – aye. Motion approved.

The Council moved into a closed session at 8:07 p.m.

10. CLOSED SESSIONS:

Motion by Councilmember Archibald to return to open session. Motion seconded by Councilmember Seamons. Vote: Councilmember Archibald – aye, Councilmember Holmgren – aye, Councilmember Rohde – aye, Councilmember Seamons – aye, Councilmember Vance – aye. Motion approved.

The Council returned to open session at 8:55 p.m.

11. Adjournment.

Motion by Councilmember Rohde to adjourn the meeting. Motion seconded by Councilmember Seamons. Vote: Councilmember Archibald – aye, Councilmember Holmgren – aye, Councilmember Rohde – aye, Councilmember Seamons – aye, Councilmember Vance – aye. Motion approved.

The meeting adjourned at 8:55 p.m.

The undersigned duly acting and appointed Recorder for Tremonton City Corporation hereby certifies that the foregoing is a true and correct copy of the minutes for the City Council Meeting held on the above referenced date. Minutes were prepared by Jessica Tanner.

Dated this 5th day of January, 2021.

Linsey Nessen, City Recorder

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