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PUBLIC WORKS COMMITTEE 2015/02/11 MinutesPUBLIC WORKS COMMITTEE MEETING WEDNESDAY, FEBRUARY 11, 2015 – 4:00 P.M. CITY HALL – 220 E. DEERPATH AGENDA I. ROLL CALL/CALL TO ORDER: Chairman Cathy Waldeck called the meeting of the Public Works Committee to order at 4:07 p.m. Aldermen Stanford Tack and Michelle Moreno were present. Staff in attendance included Michael Thomas, Director of Public Works; Dan Martin, Superintendent of Public Works; Sally Swarthout, Interim Director of Parks & Recreation; Bob Ells, Superintendent of Engineering; Donna Dunn, Assistant to the Director of Public Works; John Gulledge, Water & Sewer Utilities Supervisor; Charlie Douglas, Assistant Chief Water Plant Operator; Elizabeth Holleb, Director of Finance; and Robert Kiely, City Manager. Also in attendance were Brian Hackman, Strand Associates and member of the public, Charlie Kohlmeyer. II. APPROVAL OF THE JANUARY 21, 2015 PUBLIC WORKS COMMITTEE MEETING MINUTES: Alderman Moreno moved to approve the minutes of the January 21, 2015 Public Works Committee meeting. Alderman Tack seconded the motion, which carried unanimously. III. WATER PLANT UPDATE • Review of the March 9, 2015 Budget Meeting Slides Mr. Brian Hackman of Strand Associates provided an overview of the proposed presentation for the March 9, 2015 Budget meeting. City Manager Robert Kiely explained that Chairman Waldeck will present an overview of the Water Plant and what the Committee has been discussing over the last eight months. Upon reviewing the presentation, Alderman Moreno suggested adding specific information about what Council will be asked to approve on each of the Council dates listed in the PowerPoint. With that addition, the Committee agreed to proceed with the proposed presentation at the March 9 Budget meeting. • Water Plant Improvement Financial Analysis Finance Director Elizabeth Holleb reviewed the financial analysis of the Water Plant improvements with the Committee. Director Holleb confirmed that when applicable, multiple bond issues would be associated with the specific project that required the bond issue. Public Works Committee Meeting Minutes from February 11, 2015 Page 2 of 4 Specifically related to the financing of Option 3b, Director Holleb reviewed the assumptions that were made, to include issuing the debt in FY2018, paying on the interest only until the existing debt service expires in FY2024/2025, and that rate adjustments would begin in FY2017 in order to minimize impact. Director Holleb added that these assumptions would need to be confirmed by City Council. Related to the rate adjustments, Chairman Waldeck asked how often rate increases occur and how much these rate increases typically are. Director Holleb replied that rate increases occur every year and are typically between 2 – 3%. These rate increases are most often applied to the variable rate, but determining if the rate increase is applied to the variable rate or the fixed rate is a policy decision for Council discussion. Director Holleb displayed an illustration showing how the Water Fund debt would be phased in with the current debt service. The chart proposes a delayed principal repayment until the existing debt principal starts to come off in FY2024/FY2025. At that point, the City would more aggressively pay principal on the new debt issue. Director Holleb then reviewed the water rate projection alternatives: − Alternative 1: rate adjustments would only apply to the variable rate. The downward fluctuation in FY2022 and FY2024 is related to the timing of the current debt dropping off. The rate change could be adjusted to provide more consistency to avoid these fluctuations. − Alternative 2: rate adjustments would be applied to both the fixed and variable rate by applying the $7.1 million debt issue to the fixed rate and the difference in the debt service on $9.5 million versus $7.1 million would be applied to the variable rate. The impact has been neutralized by FY2024 in both cases. The Committee agreed that the second alternative should be implemented because this is an infrastructure project that should be funded by both the fixed and variable rate. Chairman Waldeck asked if there will be a substantial difference in the rate changes between the two options. Director Holleb explained that for the average household, there is not a substantial difference between the two alternatives in terms of water bill increases. Both alternatives will be presented to City Council, but the Committee recommends the second alternative. The fixed rate is not impacted by weather or usage, which supports the bond issue. Director Holleb added that the bond rating agency will view the bond issue being Public Works Committee Meeting Minutes from February 11, 2015 Page 3 of 4 backed by an increase in the fixed rate positively during the review process. Member of the public Charlie Kohlmeyer requested additional information on the 95% of the households with small meters. He noted that the increase in the fixed rate makes up 50% of the bill even though these users utilize less of the system than large users. No action was required. IV. IDOT ROUTE 41/DEERPATH GOLF COURSE AGREEMENT: Superintendent of Engineering Robert Ells reviewed the proposed IDOT project at Route 41 and Deerpath that the Committee discussed several months ago. At the time, IDOT unofficially requested that if the project was undertaken, the City would take ownership of the pump station upon completion. In the packet is a letter that the City received, which requests that the City submit a non-binding letter of intent in order to proceed. There would be no financial or binding commitment. Superintendent Ells added that the design for this project will take over a year to complete, with construction following sometime after. IDOT is finishing the preliminary design now and will require at least another year of additional design phases. If the City submits a letter of intent, staff will be included in design discussions. Staff is working on annual costs if this infrastructure is taken over by the City upon completion. This project will alleviate the flooding that occurs at this intersection and is considered a win-win for all involved. Superintendent Ells clarified that the anticipated costs provided on the map are the costs borne by IDOT for the pump house, detention ponds, piping, and construction. The only cost-share the City has considered is the aesthetics of the ponds. The physical construction and everything related to conveying the storm water would be paid by IDOT. Alderman Moreno asked how the City will protect the larger trees that need to be saved. Superintendent Ells replied that City staff, including Chuck Myers, has been involved and would continue to be involved in all phases of the project. IDOT would be required to follow all of the rules for construction within the City. No action was required. V. SCHEDULE OF FY2016 PUBLIC WORKS CAPITAL PROJECTS: Director of Public Works Michael Thomas provided the Committee with a schedule of capital projects for Public Works including when they will be put out to bid, when Council approval will be sought, and when construction will begin and end. Public Works Committee Meeting Minutes from February 11, 2015 Page 4 of 4 No motion was required. VI. OTHER ITEMS • Chairman Waldeck asked about sidewalk plowing operations since the policy was adjusted. Director Thomas explained that sidewalks have been a challenge because of where they fall on the list of priorities. Chairman Waldeck noted that the biggest issue with the sidewalks is the ice. She asked if there was any way to get down to the ice. Director Thomas explained that if the equipment isn’t dispatched to the sidewalks immediately it is nearly impossible to remove all the ice from the sidewalks. Chairman Waldeck commented that we should continue to fine tune the program. VII. OPPORTUNITY FOR PUBLIC COMMENT: None. VIII. NEXT MEETING: The next meeting will be held in April after the March budget meeting. If a special meeting is needed in March, it can be scheduled accordingly. Director Thomas will send out a confirmation for the meeting date in April. IX. ADJOURNMENT: Alderman Moreno moved to adjourn the meeting of the Public Works Committee at 4:52 p.m. Chairman Waldeck seconded the motion, which carried unanimously. Respectfully submitted, Donna Dunn Assistant to the Director of Public Works