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HomeMy WebLinkAbout09/25/2018 Study Session Meeting MinutesMAPANA A-Z ESTABLISHED 1977 MARANA TOWN COUNCIL STUDY SESSION 11555 W. civic center Drive, Marana, Arizona 85653 Second Floor conference center, September 25, 2018, at or after 6:00 PM Ed Honea, Magor Jon. Post, Vice Mayor David Bowen, Council Member Patti Comerford, Council Member Herb Kai, Council Member John Officer, Council Member Roxanne Ziegler, Council Member MINUTES CALL To ORDER AND ROLL CALL: Vice Mayor Post called the meeting to order at 6:00 p.m. Interim Town Cleric Hilary Hiser called the roil. *Mayor Honea u7as absent at the ffive of roll call and "Council Council Member Bou)en zt)as excused at the tide of roll call. with five council members present there was a quorum at the start of the meeting. Both. Magor Honea and Council Member Bowen arrived later in the meeting constituting a .full quorum of the council. PLEDGE OF ALLEGIANCE/INVOCATION/MOMENT OF SILENCE: Led by Vice Mayor Post, APPROVAL OF AGENDA: Council Member I<ai motioned to approve the agenda with a second provided by Council Member Comerford. Passed 5-0, unanimously. DISCUSSION/DIRECTION/POSSIBLE ACTION D1 Relating to Administration., discussion and direction. regarding partnering with Service Line warranties of America to implement the National League of Cities Service Line warranty Program for all water and sewer customers within the Town of. Marana. Presented by Jane Fairall, Deputy `'own Attorney. September 25, 2018 Study Session Minutes 1 Ms. Fairall stated the Town received a proposal from the National League of Cities Service Line Warranty Program, which is a warranty insurance program for water and sewer lines on the property owner's side of the water main. She indicated this is a national private insurance program that several Arizona municipalities currently participate in. Ms. Fairall explained that this agreement is a marketing agreement allowing the company to include the Town's name and logo on its marketing material. She presented the Council a sample of the material from. Pinal County and City of Phoenix. Ms. Fairall noted that the mailed materials disclose the nature of the relationship with the jurisdiction and indicate the Town is not responsible for waterline problems. This service is a voluntary service a homeowner may choose to purchase as an additional warranty against future waterline damage. The service is a monthly fee structure that the homeowner is responsible for paying. Returning to the proposed marketing agreement, Ms. Fairall explained that the Town would receive a $0.50 per month/ per product paid fee annually- to the Town with direct deposit to the General Fund. Council Member officer asked if this service would go just to Marana residents and would show the Town's logo. Ms. Fairall affirmed that the company's mailing would have the logo and would be directed to all residents within the Town. Council Member Ziegler asked if this material makes it clear that the Town is not responsible should issues arise to a homeowner's waterline. She thinks the program is a good opportunity for citizens, but she does not want the Town to be adversely affected since its name will appear on the material. Ms. Fairall responded that the Town would have no legal responsibility to provide services it is not normally required to provide. She noted that the marketing materials do have a strong disclaimer stating this service is independent and separate from the Town. Ms. Fairall conceded that there may be some confusion regarding responsibility, but the Town would need to direct citizens back to the warranty company for assistance. Council Member Kai expressed concerns about the program since it has the Town's name on it. He wanted to know what the "upside" for taking this risk, since there is "no track record" with this business. Council Member Comerford wanted to confirm that the Town has a 60 day notice to terminate. Ms. Fairall noted that there is an initial three year term, but could not recall the exact timeframe for termination. Town Manager Jamsheed Mehta interjected that the current draft of the agreement is 90 day notice for termination at any point. Mr. Mehta noted that the current draft of the agreement is a three year term with the possibility of a one year extension. Council Member Comerford asked how many municipalities are currently participating in the program. Ms. Fairall responded that there are currently 27 municipalities participating in the program. She also informed the Council that 99.5 of the claims in the state were approved, with only two claims denied. September 25, 2018 Study Session Minutes 2 IVIS. Fairall returned to the contract and stated that as currently written it is unclear if the 90 day termination requirement is at the end of the contract period or applicable at any point during the life of the contract. Ms. Fairall stated the Town would work with the service provider to clarify that language to ensure termination at any point a 90 day notice. Vice Mayor Post asked if this warranty program encompasses the homeowner's entire property both inside and outside. Ms. Fairall referenced the company's promotional material, which defining what the warrant program covers. Council Member Kai asked how many residents could apply for this program and what the benefit to the Town is. Ms. Fairall stated that any property owner within the jurisdictional boundary of the Town is eligible to enroll in the program. *Mayor .Honea arrived on the dais at 6:13 p.m. Council Member Comerford motioned to approve the agreement with a termination clause for a 60 day notice rather than a 90 day notice timeframe. Council Member Officer provided the second. Motion passed 6-0, unanimously. Vice Mayor Post indicated that with Mayor Honea- s arrival, the mayor would facilitate the remainder of the meeting. Mayor Honea apologized for his tardiness as he was with a local scout troop. DZ Presentation: Resolution No. 2018-091: Relating to Utilities; authorizing the creation of the Picture Rocks water Treatment Campus capital project and the Airline/ Lambert water Treatment Campus capital project; authorizing the transfer of up to $2,000,000 in budgeted expenditure authority from the wastewater Treatment Plan capital project (WRO11) line item in the fiscal year 2018-2019 budget to the newly created capital projects; and authorizing the application for a Clean. water State Revolving Fund loan from, the water Infrastructure Finance Authority of Arizona to .fund the construction of water treatment works to remove perfluorina.ted compounds from Marana water Department potable water. Presented by John Kmiec, Water Director and Erik Montague, Deputy Town Manager. Mr, Kmiec indicated this is a. follow-up presentation to the August 14, 2018 Study Session regarding water quality and possible treatment solutions. He reminded the Council that Marana residents are served by both the Tucson water system and the Marana water system. At the previous meeting, the Council approved construction of a water treatment facility. Mr. Kmiec identified several goals going .forward for the Picture Rocks water campus and the Airline/Lambert water campus that include the development of an advanced treatment process for each site, treatment that destroys and/or significantly reduces chemical contamination, and ensures final operations are effective/ efficient to minimize long term operational costs. Mr. Kmiec presented several slides demonstrating the cleaning/ treatment process. I ie also noted that the area surrounding the well is large enough to construct the necessary September 25, 2018 Study Session Minutes 3 treatment infrastructure. Mr. Kmiec explained that the costs of constructing both treatment facilities would range between $12.0 million dollars to $15.0 million dollars with the majority of the construction occurring in 2019. He wants to make sure that the designs are adequate to meet expected residential growth in the affected areas. Mr. Montague addressed the Council regarding the estimate project timeline. He noted that this project is complex and the Town has several procurement process methods. Due to the expedited need to address the problem, the Town will be following Title 34, use the "construction manager at risk" procurement process. This estimated project schedule is 18 to 20 months. He noted that the length of the project timeline is due to the public procurement requirement because the Town was unable to use an existing cooperative contract for the construction/ engineering. Staff will have to put together a solicitation package to start the procurement process with a construction manager at risk and a design firm. The construction manager at risk will help to expedite the process and ensure flexibility to address any issues that might arise during the project. Mr. Montague briefly touched on the formai borrowing phase of the project timeline. He noted that the actual financing costs are variable, but formal borrowing needs to be complete before the construction phase. Given the timeframe of the project, the Town will need an immediate access to the cash to start and deliver the project. To determine the most efficient funding source staff reviewed several viable funding options to pay for the project. Mr. Montague noted that most of the options available did not meet the project's timeframe or cover the facilities' total projected cost. Mr. Montague stated staff is asking council for authorization to apply for the Water Infrastructure Financing Authority (WIFA) Loan as the preferred financing mechanism to provide the project its initial funding. He reminded Council that no .formal action was required at this time regarding any possible revenue sources intended to pay for the debt; the Council is only authorizing the specific funding mechanism for the construction's project. Mr. Montague stated staff would provide additional information regarding future revenue streams to pay for the debt and their possible impacts at a future date. Mr. Montague noted that in the future the council would need to discuss an appropriate rate increase to cover the on-going operation costs for these two new treatment facilities. Vice Mayor Post asked for clarification regarding what Council is authorizing during the study session. Mr. Montague responded the council is authorizing staff to create treatment facility projects by reallocating the budget to cover the costs of the projects and apply for the WIFA loan.. He confirmed that staff would seek direction at a future date regarding possible revenue streams to payback the debt. Mr. Montague concluded his presentation with an overview of the staff's communication strategy to engage residents regarding this process and provide resources for updated information through community meetings, social media posts, and a dedicated webpage on the Town's website. September 25, 2018 Study Session Minutes 4 Mayor Honea noted there were several speaker cards submitted by the public regarding this item.. Jack Neubeck addressed the Council and thanked them for working to address this water issue. He encouraged the Town to move forward with the project and work closely with. the State of Arizona. He noted that developing strong relationships with state agencies would help to encourage the business community to locate to the Town. ceci Lucero noted that the proposed resolution does not specifically mention 1,4 dioxane in its language and thought it should be directly stated in the resolution. She also commented on the possible future revenue streams required to fund the project asking the Council not raise residents' property taxes. Mayor Honea responded that the Town of Marana does not utilize a secondary property tax. Ms. Lucero expressed her support of this project and hopes it will have a positive result. William Eldridge thanked the Council and staff for all the hard work regarding the clean --up efforts. I Ie asked if the Town has done any follow-up regarding an analysis of the in-home residential water filters. Mr. Eldridge also asked the Council to consider providing some financial solutions, like discounted water bills and bottled water delivery, for those residents affected by the contamination. Shawna Larson expressed her concern about the extended timeline to address the contamination. She emphasized the need for a quick solution to address the needs of the more vulnerable residents, elderly, children, and residents with health problems. Ms. Larson also worries that the treatment method employed to clean these contaminates from the water may not adequately clean other smaller chained chemical compounds. She would like the Council and staff to consider providing residents a short term water solution while the treatment facilities are under construction. "Council Council Member Bouien arrived on the dais at 6:59 Pv. Council Member Ziegler asked for clarification regarding financing and its total timeline for loan repayment. Mr. Montague responded that wIFA loans are typically 20 years. Council Member Ziegler followed-up with a question regarding the possibility of a variable interest rate over the life of the loan. Mr. Montague stated the loan rate is fined over the 20 year term and staff anticipates a rate of about 3 percent. Council Member Ziegler also asked how the water rate structure would be impacted regarding the construction of these treatment facilities. Mr. Montague explained the Town will start its formal water rate study in the months to come and it will include the current costs and cost consideration for future needs. The actual calculations of the rate structure will include several operating assumptions that will meet the needs of the utility. He explained that if the Town's goal is to sustain a self --supporting enterprise for water, the most likely rate recommendation would reflect that intended goal. Mr. Montague stated the Town would need to incorporate the on --going operating expenses for the treatment facility into the rate structure. However, he stated that the final rate structure is a policy decision adopted by the council. Mr. Montague again clarified that adopted rate structure would not apply towards the capital expenses associated with September 25, 2018 Study Session Minutes 5 the construction of the treatment facilities, only for repayment of the debt. Any future rate increase would include the operating expenses the treatment facilities and the necessary debt repayment schedule for the WIFA loan. Council Member Ziegler agreed that the rate structure should cover the operating costs of the facilities. Council Member Ziegler asked that the proposed communication plan regarding the project updates include a central location on the website and links back to the Water Department's webpage. Council Member Ziegler again asked staff to make a determination about financially helping residents currently receiving contaminated water during the construction of the treatment facilities. Town Attorney Frank Cassidy advised the Council that the proposed resolution would be modified to include specific mention of 1,4 dioxane. Vice Mayor Post motioned to approve the resolution with the inclusion of the new language, with a second provided by Council Member Kai. Motioned passed unanimously, 7-0. EXECUTIVE SESSIONS Pursuant to A. R.S. § 35-431.03, the Town Council may vote to go into executive session, which will not be open to the public, to discuss certain matters. E1 Executive Session pursuant to A.R.S. §38-431.03 (A)(3), Council may ask for discussion or consultation for legal advice with the Town Attorney concerning any matter listed on this agenda. FUTURE AGENDA ITEMS Notwithstanding the mayor's discretion regarding the items to be placed on the agenda, if three or more Council members request that an item be placed on the agenda, it must be placed on the agenda for the second regular Town Council meeting after the date of the request, pursuant to Marana Town Code Section 2--4-2(B). ADJOURNMENT. Council Member officer motioned to adjourn at 7;13 p.m., with a second provided by Council Member Bowen. Motion passed unanimously, 7-0. CERTIFICATION I hereby certify that the foregoing are the true and correct minutes of the study session/ presentation of the Marana Town Council held on September 25, 2015. I further certify that a quorum was present. F Hilary H iser, Interim Town Cleric MARANA.Ad,','. ESTABLISHES) I September 25, 2018 Study Session Minutes 6