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HomeMy WebLinkAbout2010 03-09Meridian City Council Workshop Meeting March 9, 2010 A meeting of the Meridian City Council was called to order at 6:00 p.m., Tuesday, March 9, 2010, by Mayor Tammy de Weerd. Members Present: Mayor Tammy de Weerd, Keith Bird, Brad Hoaglun, Charlie Rountree and David Zaremba. Others Present: Bill Nary, Jaycee Holman, Pete Friedman, Tracy Basterrechea, Ron Anderson, Tom Barry, Steve Siddoway, Clint Dolsby, Kyle Radeck, Stacy Kilchenmann, and Dean Willis. Item 1: Roll-call Attendance: Roll call. X David Zaremba X Brad Hoaglun Charlie Rountree X Keith Bird X Mayor Tammy de Weerd De Weerd: I will go ahead and start tonight's meeting. Thank you all. This is a different format than we have had and we have gone back to a format on workshops, which are information sharing that allows those sharing information to sit around the table, so it's a little bit less formal and more intimate and I can see it's very intimate. So, thank you for being with us today. For the record, it is Tuesday, March 9th. It's 6:00 o'clock. We will start the meeting with roll call attendance. Madam Clerk. Item 2: Pledge of Allegiance De Weerd: Thank you. Item No. 2 is our Pledge of Allegiance. If you will all join us in the pledge. (Pledge of Allegiance recited.) Item 3: Adoption of the Agenda. De Weerd: Item No. 3 is the adoption of the agenda. Hoaglun: Madam Mayor? De Weerd: Mr. Hoaglun. Hoaglun: Just have an addition on the agenda. After the Consent Agenda we'd like to hear a golf course update from Dick Davis and, then, Item 8-A under ordinances, that ordinance number is 10-1443. And with that I move the adoption of the agenda. Zaremba: Second. Meridian City Council Workshop March 9, 2010 Page 2 of 48 De Weerd: I have a motion and a second. All those in favor say aye. All ayes. Motion carries. MOTION CARRIED: THREE AYES. ONE ABSENT. Item 4: Proclamations: A. Girl Scout Week De Weerd: Okay. I do have -- our next item are two proclamations and the first one is the Girl Scouts Week. I believe that Audrey -- is Audrey here? Okay. Well, is Mark Egner here? And I don't think I saw Mark either. Well, I will go ahead and read these two proclamations. The first one I will read is the Girl Scouts. Whereas Julian Gordon Lowe founded the Girls Scouts of the USA on March 12th, 1912, in Savanah, Georgia, and whereas girls develop the skills and lessons through the Girl Scouts leadership experience that will serve them throughout their lives and whereas Girl Scouting increases girls' awareness of the opportunities in math, science, sports, technology and many fields of interest that can expand their horizons and whereas more than three million current Girl Scout members nationwide will be celebrating this American tradition and welcome girls from every background to join. Therefore, I, Tammy de Weerd, Mayor of the City of Meridian, do hereby proclaim that the week of March 7th, 2010, is Girl Scout Week in Meridian, Idaho, and call upon the people of Meridian to honor the commitment of the Girl Scouts in our community and across the country. So, this is signed the 9th day of March. B. Skills USA "Team Renaissance" De Weerd: The second proclamation is for Skills USA. Whereas the City of Meridian is proud to recognize deserving citizens of this community, especially students who accomplish great things on behalf of their community, and whereas Skills USA Team Renaissance willingly performs numerous hours in planning and the construction of a home within School District No. 2 during class time and weekends for a family in need and whereas Skills USA Team Renaissance has reached out to other community organizations, such as the Lions Club, by constructing a child's playhouse at no cost to that organization and whereas the Mayor and City Council of the City of Meridian acknowledged Skills USA Team Renaissance and the effort of their classmates in Mr. Mark Egner's residential construction class; therefore, I, Mayor Tammy de Weerd, of the City of Meridian, do hereby proclaim that March 9th, 2010, is Skills USA Team Renaissance Day in Meridian and call upon the people of the Treasure Valley to celebrate the accomplishments of these skill students of Skills USA Team Renaissance. So, thank you and I will give these, Luke, to you in case they slip in and they thought we started at 7:00. Item 5: Consent Agenda Meridian City Council Workshop March 9, 2010 Page 3 of 48 A. Agreement with Ada County Highway District for NW 4~' Street Water Main Replacement. B. Change Order #1 to Original Contract for $210,300.00 Dated April 7, 2009 with JC Constructors, Inc., for Unforeseen Upgrades Associated with Dissolved Air Flotation Thickener (DAFT) Retrofit Project for aNot-to-Exceed Amount of $8,859.45. C. Modified Development Agreement: MDA 10-003 Julius M. Kleiner Memorial Park by City of Meridian Parks and Recreation Department Located NEC of the intersection of E. Fairview Avenue and N. Eagle Road. De Weerd: Okay. Item 5 is our Consent Agenda. Hoaglun: Madam Mayor, there were no changes to the Consent Agenda, so I move approval of the Consent Agenda and the Mayor to sign and the Clerk to attest. Zaremba: Second. De Weerd: I have a motion and a second to approve the Consent Agenda as presented. If there is no discussion, Madam Clerk, will you call roll. Roll-Call: Bird, yea; Rountree, absent; Zaremba, yea; Hoaglun, yea. De Weerd: All ayes. MOTION CARRIED: THREE AYES. ONE ABSENT. Amended onto the Agenda: Golf Course Update from Dick Davis. De Weerd: Okay. Per the amended agenda we did move Dick Davis with the golf course update at this time. Mr. Davis, thank you so much for joining us. Davis: Well, thank you, Madam Mayor and Councilmen and guests. We -- the golf course I think did fine last year. We -- we got up to about 37,000 rounds of golf played out there this -- this last year, which was about a 3,000 round improvement over the previous year. It's not where we want to be, but with the economy the way it is we felt pretty well that -- that we increased when most of them didn't and, you know, our philosophy towards the golf course, you know, it's got to be total -- the total experience. You got to have a decent restaurant. You got to have good people. And you got to have a good product to sell in the golf course. And that's what we are trying to do. This last year we rebuilt -- we rebuilt both the men's and women's tee box on number four, along with the irrigation and seeding and everything, and those -- those are really coming along well. Number four is getting to be a really gorgeous golf course. We Meridian City Council Workshop March 9, 2010 Page 4 of 48 rebuilt the men's tee box on number five. We built the -- or rebuilt the ladies' tee box on number 12, along with the irrigation and everything that goes along with it. We have -- we have expanded our driving range just a little bit. We took a tree out of there that was kind of in the road and it gives us a better view out of the clubhouse and just a little more area of driving range, because we think we are going to really have a youth program this year. We have been kind of struggling along with that and we have got -- we have got some really good teachers lined up that are working with your parks and rec department and Bill Cole, who is a past president of the Idaho Golf Association, and also an employee of ours, which we feel really fortunate about, has got his teacher's certificate, so he's going to be working with the youth, along with -- we have -- we have three other people that -- that will be helping, all professional golf teachers. Carl Haus, who was in McCall for years and years. Rich Stanwood, who actually works for Golf Galaxy right now, and I can't remember where Rich worked, but he's been in the golf business around the valley for a long time. And John Stein, who was at Broadmore and over at Homedale at the golf course over there. And now John is head of the First Tee of Idaho. So, it's all going to kind of tie together. We are -- we are going to try and bring these kids in and get more of them involved in it and, then, take them right into the First Tee, which is a completely separate thing in our golf course. It's -- First Tee is a national organization to get youth interested in golf and -- and we are the -- the real young kids are going to be at Foxtail, on the par three course over there, and, then, as they grow -- you know, get a little more skill why, then, we will bring them over to Meridian and work them on a little bigger golf course. So, I really think we are going to have a really good youth program this year, at least I hope so. So, we got a little more driving range for them to work on and I think that will be a good thing for the youth. We are putting up a new --anew score board right now. It's 33 foot long and has panels that swing around. It's kind of like you see on some of the big golf tournaments and going to be a real nice score board that we are putting up there and -- for toumaments and this and that and the other thing. So, we are really excited about that. We tried something new last year. It was kind of an experiment and this was on -- on hole number four again. We have a cart path around the lake and -- and it was really muddy and not a good situation, so we got some reground asphalt and put down and it has worked fantastic. It's almost like asphalt. Soak it down, it sheds water, it's really, really good. So, this year we are going to -- we are going to put cart paths on about five or six different holes with -- with this reground asphalt, because it works well and we actually traded a guy that brings it for food. His wife likes to come over and eat a lot and it makes a good deal for him and a good deal for us. So, anyway, we are going to -- we are going to put -- we are great traders, you know. We traded -- our alarm system we traded for and we traded for reground asphalt and had a guy putting anew -- new speaker system in the clubhouse. The old one was very inadequate, you couldn't hear, and we had people say, well, you called me, but I didn't hear you and so he actually should finish that tomorrow. Brand new speaker system in the clubhouse and here, again, we are trading him for golf and so it works good for everybody involved that way. And, then, this year, you know, along with the golf -- with the cart path we are going to do and the score board, why -- why we are going to do the tees on number six and number eight. We are going to redo those. We may peel off a couple other tees and try and flatten them up, but six and eight definitely are going to be redone this year and, Meridian City Council Workshop March 9, 2010 Page 5 of 48 then, we are going to do cart paths on probably five or six different holes that are pretty rough and dusty and so, anyway, that's what we are planning this year and, hopefully, why, we keep a few golfers coming out there. They are starting to show up, so anyway, any questions? De Weerd: Thank you, Dick. Any questions, Council? Zaremba: I was just going to say that the golfers that I see go by my backyard seem to be happy, so that's a good thing. Davis: And they never did ask you was the -- was the dinner they had out there all right the other day that -- Zaremba: Absolutely. I was going to mention that. Paula, I think her name is, was tremendous -- Davis: Oh, yeah. Zaremba: -- in helping. It was a last minute put together, actually, for a funeral reception -- Davis: Yeah. Zaremba: -- and she put it together within a couple of days and, then, on the day I called her up and said the funeral's running early, they are going to be there an hour earlier than you thought. She handled that very smoothly and it went beautifully. Davis: Yeah. She -- Zaremba: So, thank you very much. Davis: Yeah. We were actually out of town when all this came about and we kind of arranged it over the phone and -- but we have got some really, really good people and -- Zaremba: She stepped up and I went over and took a look. The food looked great and I can't say everybody was happy, because that wasn't the purpose, but everybody was satisfied. Davis: Yes. De Weerd: Dick, I had had an a-mail yesterday about some of the neighbors that live on the backside of the driving range and they are getting hit as people are starting to come out again. Their houses are catching balls. Any plans on reinforcing or raising the height on the net or moving the line -- Meridian City Council Workshop March 9, 2010 Page 6 of 48 Davis: You know, we -- it would be almost impossible to raise that very much. What we -- what we try to do is -- is, you know, keep an eye on people. If anybody is capable of doing that, which there probably isn't three or four percent of the golfers in the valley that can get a ball over that net. Anderson: I could. Davis: But we really try and watch that and I know Doreen and Bill has called us a time or two and -- and we have got right on it and we just watch it, because these darn kids anymore with the equipment they have got, they can hit the thing into the middle of next week. De Weerd: Well, Chief Anderson isn't a kid, but I'll be glad to pass your name onto them and let them know who to call. Davis: Yeah. Well, we really really try -- you know, we instruct all our people in the pro shop to watch that very carefully, that, you know, you see somebody out there that you think is capable of hitting a ball that far, for gosh sakes take the wood out of their hand and make them hit an iron and, you know, an iron is not going to get over there. But these young kids can -- and not so young kids -- they can belt it pretty good, so - anyway, you know, that is a -- that is a -- something that we continually fight and, I don't know, somebody we just don't allow drivers out there. De Weerd: So, Dick, what do you suggest to tell them to, just call you when it happens and they are -- Davis: And they have -- Glen and Doreen have been, you know, very good about it and we -- they -- somebody tried to, you know, hit the ball over the net and we get right on it and so it's -- you know, those houses, they are just unfortunate. Yeah. We spent 30,000 dollars putting that net up and it's just -- they still hit it over the darn thing. One thing about it, you know, when we get -- when we get the floater balls back out -- in the wintertime we don't use the floater balls, which are -- which are about 75 to 80 percent flight, compared to the regular balls, and we will be getting those out right away, so there would be less people that are capable of doing that. But there still will be some and so -- it's one of those things we really have to police. We have had -- and, you know, while we are talking about this, you know, I -- maybe I guess I need to ask you guys. We have had some instances of people, you know, just parking and taking off playing golf and we have got signs up at every entrance, no trespassing and all this and that and the other thing, and people will continue to do that and we caught a guy the other day going right down to -- right before he got to your place, Tammy, and he said, oh, I'm just -- we saw him get out of the car and get his bags out. He was parked clear down by the one green and he got out and he took off and so Bill Cole went out and talked to him and, oh, he was just going to visit a friend and he said, well, listen, you know, I know what you're out here for and he says -- he says you are actually trespassing and we are not going to call the police or anything right now, but -- but we think we could, because they are trespassing. They are sneaking on when they Meridian City Council Workshop March 9, 2010 Page 7 of 48 shouldn't be and -- you know. And I don't want to -- I don't want to get people in trouble, but it really fouls things up for us when that happens, especially when we are busy, because, then, other people that have paid have to wait and they get upset and -- and so we may at a time or two call the police department to come and talk to some of these people. And I will say another thing about your police department. I am so happy -- last summer -- last summer we had some major problems -- major problems and those guys come out there and they did a marvelous job of rectifying the situation. We had some kids that did about 3,000 dollars worth of damage out there in two nights. It was the 3rd of July and the 4th of July. But my wife and I -- it happened -- the worst of it happened on the 3rd and my wife and I went out there after the fireworks at the speedway and we were driving around at midnight and I caught these kids, but I didn't catch them doing anything wrong, I just caught them running around out there at 4:30 at night and -- and, then, it turned out to be the same kids when your -- your police people got them cornered and questioned them and they did a marvelous job. So, I just want to commend you on that. They -- or commend the police department. They did a fantastic job helping us catch these kids. They went out there and dug up a chunk out of a green -- two chunks that big around and about four inches deep and just scattered the grass all over the green. Luckily, we have made a nursery green that we have just for those situations and so it took our guys about three hours and we went over and cut chunks out of the nursery green and transplanted them and three days later you couldn't even see it hardly. But -- but they really did. De Weerd: Well, thank you. I'm sure Deputy Chief Basterrechea will pass that on. Do you have any comment about the trespassing and -- Basterrechea: Yeah. They could -- we certainly could -- they could certainly be charged with trespass or even theft of services. Davis: Okay. We like to warn them a time or two, but if it persists -- there is a certain number of people that, you know, that's just a challenger for them, so -- De Weerd: Well, thank you, Dick. Any other questions from Council? Bird: I have none. De Weerd: I think the course looks great, Dick. Davis: Thank you. De Weerd: You do a great job. If you will pass that on, too. Davis: Okay. Thank you. De Weerd: Thank you. Okay. Item 6 under Department Reports, we will turn this over to Mr. IWary with our Legal Department. Meridian City Council Workshop March 9, 2010 Page 8 of 48 Item 6: Department Reports A. Legal Department: Approval of new Beer/Wine/Liquor for Sunrise Bakery and Cafe; located at 805 N. Main St. Nary: Thank you, Madam Mayor, Members of the Council. The only reason this item is on the regular agenda, rather than the Consent, is the state code requires that if you're going to approve a liquor license within 300 feet of a church, then, you need to specifically do that. A business is not prohibited to do that, but this is a liquor license, a new liquor license at the Sunrise Cafe, which is within 300 feet of the Church of the Harvest, so -- there is no prohibition to, its -- Zaremba: Is it served liquor? Is it just really beer and wine and it's all one license? Nary: It is a liquor license, do they serve liquor by the drink. De Weerd: Have you talked to the church? Nary: We haven't talked to the church. There is a disconnect I think -- and this is something internal we need to address. Liquor licensing is one phase of the process. It's not required because it's a restaurant and not a bar, for them to do a Conditional Use Permit type of process like they would if it was just a bar only. So, the church doesn't have any notice of it, because there is no requirement to do that. Planning and our office had a discussion about it last week, because they would -- they did not require to go through a CU process, because it's predominately a restaurant and it's just an accessory use, so -- so, no, the church hasn't been contacted. Zaremba: But it's a morning restaurant. Are we talking about beer and pancakes? Nary: Yeah. The state code I mean has restrictions on when service can -- serving can occur and I don't recall -- I didn't go look what time Sunrise closes in the afternoon. De Weerd: It closes at 9:00. Bird: Yeah. Except on Fridays and Saturdays it goes a little later, but they serve liquor to try to built up their night business. They certainly don't need the alcohol for the breakfast business. We have not talked to the -- to the church at all, Bill? Nary: No. That wouldn't be our -- Bird: I know when we took that Hidden Door one across the street next to the Reading Room there, you personally, I believe, contacted these people and made sure they had no objection. Nary: Actually, Council Member Bird, when -- you're talking about the one where Felix Kegger is? Meridian City Council Workshop March 9, 2010 Page 9 of 48 Bird: Yes. Nary: And they had contacted -- they had actually done that. They had contacted them directly to see if they had any objection or any concerns. But it's not required. The statute doesn't require that for a liquor license. The statute's a little archaic, because it doesn't -- it doesn't create anymore duty or responsibility or anything different than any other license, other than the way I interpret it is that you have to specifically know your granting a license within 300 feet of school or a church, but that -- other than that it's not barred or prohibited to do that. Bird: The church is -- it hasn't got a day school or anything over there? Are they a nursery or anything during the week? Hoaglun: Not that I'm aware of. Zaremba: I don't see much over there during the week, because I go by, but I don't go by every day. De Weerd: They do have a youth foundation and their focus is on youth. Right now they continue to do their -- their youth programs out of their old site until I think the end of the year and, then, they are moving them over. Bird: And, then, they are moving in here? De Weerd: Uh-huh. Bird: Because I was going to say, I don't see a lot of -- I don't see a lot of that, but I don't go by. De Weerd: Yeah. Not right now, but -- Bird: Will that be a one night a week or will it be nightly or daily or -- De Weerd: It's a school. Bird: Oh, it is an actual school? De Weerd: Uh-huh. Bird: For teenage kids? De Weerd: For 18 and above. I think it's after -- Bird: Oh, 18 and above. Meridian City Council Workshop March 9, 2010 Page 10 of 48 De Weerd: -- after graduation, but they may still have some younger students. I don't know. Luke might be able to tell you, but -- Robert, is Luke outside? Simison: He will be back shortly. De Weerd: Okay. Yeah. I would have concern -- Nary: And it wouldn't apply to the school that comes after the license is granted. So, if a license is granted and they put a school in next door, it doesn't matter. Bird: They will have to get a CU then. Nary: Who? Bird: Won't they? Friedman: Madam Mayor and Council Members, no, because -- again, the CU is required specifically for a drinking establishment. As Mr. Nary said, because the primary use of the space is for restaurant purposes. Bird: No. I mean the school. If they move a school into the church it's not part of the church? Friedman: I'd have to double-check the code, but it's an accessory use part of the church and -- Bird: Okay. That's -- De Weerd: And it's going to be in the old theater, so it's going to be right next door. Right now Southside Church is using it and so they wanted to wait until they found another place, so they just delayed moving their youth program over. Otherwise, it would be here right now. Hoaglun: Madam Mayor and Bill, denial of a beer and wine and liquor license -- is it predicated on certain -- certain things? There has got to be specific reasons for a denial. Nary: Yes. Hoaglun: So -- and just proximity alone does not negate, it's just a matter of a process of saying, well -- and we have got an established restaurant that wants to get it. We got a church that's established. Neither one are moving, so how do you -- how do you make it work, so -- Nary: The statute specifically, Council Member Hoaglun, says no license shall be issued for any premise in any neighborhood which is predominately residential or Meridian City Council Workshop March 9, 2010 Page 11 of 48 without 300 feet of any public school, church, or any other place of worship measured in a straight line to the nearest entrance to the licensed premise, except for the approval of the governing body of the municipality. You have to approve all of them anyway, so it's -- it's an anomaly in the state code, but the way we have handled these, at least as I have been here, when they are within 300 feet of a school or church, we put them on the agenda, so you're aware of the approval. But that by itself, again, is not prohibited to be within 300 feet of a school and there is nothing else in our ordinance that prohibits that. Bird: And it's 300 from their main entrance? Nary: Right. Hoaglun: Actually, the main entrance is -- Bird: I was going to say, the main entrance -- Hoaglun: -- around the corner from -- Bird: Yeah. From the deal. Maybe they don't -- maybe their -- the main entrance might not be within 300 feet. Might not be within 300 feet. Nary: Three hundred feet of the nearest entrance to the licensed premise. Bird: Oh, the nearest licensed -- Nary: Yeah. Bird: Of the licensed. Nary: Right. Bird: Well, that's the back door. Nary: If it's going to be in that southside church it's right behind that. It's right behind the -- Bird: Now -- but is that -- is that the main building of the church? Nary: No. Bird: No. Nary: But that's going to be the school. Bird: But it doesn't say the main entrance of the church? Meridian City Council Workshop March 9, 2010 Page 12 of 48 Nary: No. Bird: Or the school? Nary: No. It's measured 300 feet from -- measured in a straight line from the nearest entrance of the licensed premise. De Weerd: The entrance. Bird: Okay. De Weerd: Yeah. Zaremba: Madam Mayor? De Weerd: Yes. Zaremba: This is a new license. If we approved it, it has to be renewed again every year; is that correct? Nary: Yes. Zaremba: If the church or the school objected, would that be grounds to deny it a year from now, even if we already had it approved? Nary: You'd probably have to weigh whatever the denial is. I mean you certainly have the right, if you would like us to, to provide notice to the church and consider that if they have any comment. There isn't anything in our statute that says just objecting to it, I mean they have to have some logical reason why you would object to that. Zaremba: Well, my thought was if we approve it, they'd have to notice it for -- I mean they'd have to observe it being a problem before they would raise an objection. Nary: Sure. Yes. Zaremba: And if they don't even know it's there, then, they are not going to raise an objection. De Weerd: Mr. Nary, is there an immediacy to this? Are there plans that they need to move forward with -- Nary: Not that I'm aware of. De Weerd: -- urgently? Meridian City Council Workshop March 9, 2010 Page 13 of 48 Nary: Not that I'm aware of. De Weerd: If Council would consider -- you know, I think in the past either the person who is trying to get the license notifies their neighbors or -- or we do, if we could put this on the next agenda, let the church know and allow just an opportunity to comment if they so desire. Nary: Certainly. Bird: I could certainly agree to that. I think -- in fact, I think it's a dang good idea. At least let them -- let them have knowledge that it's coming. Nary: Yeah. That's not a problem. We can take care of that, Madam Mayor. De Weerd: Okay. All right. I mean I -- they moved into the community to be part of the community and they certainly know there are drinking establishments close by, so I would imagine that just the notification and the opportunity to comment would be greatly appreciated. Bird: Madam Mayor. In fact, don't the EI Tempe right across caddy corner have a license? De Weerd: Beer and wine. Bird: Beer and wine? Nary: I'm not certain if there is a liquor license there or even at -- Holman: I don't know if they are beer and wine or if they have liquor. I'm not sure. Bird: They don't have beer and wine? Holman: I don't know if they have liquor. Nary: And it only applies to liquor. It doesn't apply to beer and wine. Bird: They have beer and wine. I know that. Nary: I think they moved to Flat Bread. I don't know if they have beer and -- I think they only have beer and wine as well. De Weerd: They only have beer and wine. Nary: Yeah. De Weerd: Okay. Meridian City Council Workshop March 9, 2010 Page 14 of 48 Nary: But we can -- we can do that. We can contact Church of the Harvest and advise them of -- Zaremba: And I would be satisfied if they talked to you or -- I mean the staff response back to us -- Bird: Yeah. That's -- Zaremba: They don't necessarily need to come here and testify. Bird: They don't need to come talk to us. De Weerd: Okay. So, put this on the next agenda. Hoaglun: The 23rd? Bird: The 23rd. Yeah. De Weerd: Yeah. Nary: We will do that. B. Parks Department: Settlers Park Tennis Facility Discussion. De Weerd: Okay. Thank you, Mr. Nary. Our Parks Department. Mr. Siddoway. Siddoway: Thank you, Madam Mayor, Members of the Council. I'm here tonight to discuss a possible partnership for the next phase of the tennis courts in the Settlers Village Square, which is in Settlers Park. You will remember that we've had our first year of operations on the first phase, which opened last year. The tennis courts and the horseshoe pits and the two new picnic shelters that are out there. Just about the time we were working on and wrapping up that first phase I came in contact with Jo Ann Kurz -- will you raise your hand, Jo Ann. And Jo Ann has a vision and a goal for promoting tennis and specifically looking for a site to do an indoor tennis facility. We looked last summer at possibly including a tennis facility in Kleiner Park. The space, based on everything else that was programmed there, wasn't possible. We looked at their business plan, we did have that reviewed, it did look solid enough to continue pursuing. We started thinking -- brainstorming other ideas and we were -- started asking, well, could this be the next phase of the tennis courts in Settlers Park. What I will hand out -- and if Jaycee could put this up on there, so everyone has a copy. But I will hand around -- and I have a few extras. This -- this up right now is the -- you should be fairly familiar with this. This is the phasing plan for what we call Settlers Village Square. You can see on the left -- it's a little out of focus. Jaycee, can we focus that a little better? Holman: Sure. Meridian City Council Workshop March 9, 2010 Page 15 of 48 Siddoway: The phase one on the left is what we completed last year, the first two tennis courts. On the left it says phase one complete at the bottom. That's what we worked on last year. Phase two is -- remains to be done. You can see that second phase was planned to have five additional tennis courts. Four just like the two that are out there and, then, the fifth one would be the championship court. We have worked through possible site plans for the structure. What we came -- have come up with for discussion tonight, if we can put that one up. Looks very similar to what we -- what we have on those plans, but it takes those next four tennis courts that are in line and would put those inside a -- inside a building, so they could be used rear around. One of the strengths of this concept is that it is very much in line with what we have had planned, simply takes that next phase and puts four of those tennis courts inside. We have been meeting with Jo Ann and her partner Allen, talking about various things, like some shared use and she will talk some more about that. What we are here for tonight is just to allow Jo Ann an opportunity to present some of her skills, experience, and background with tennis, share with you some of the vision and goals that she has for this facility and, then, to simply ask you if this is a partnership that you feel is worth pursuing and giving them an opportunity to do some fundraising for them. I will mention that last month we did make the same presentation to the parks and recreation commission. They did review this and discuss it and gave me direction that they felt like this was worth considering and to take it forward to Council as well. So, with that, Jo Ann, I introduce you and give an opportunity to introduce the others that are here with you tonight and, then, feel free to share with us your vision. Kurz: Okay. Well, thank you, everybody, for the opportunity to come and speak with you. Really appreciate that. And I also thank Steve and Tammy, just over the last year working with me and some other people just trying to get this together. My name is Jo Ann Kurz and I'm a USPTA, United States Professional Tennis Association, tennis professional. I have been one certified for over 20 years and I have been in the tennis business for 30 years, so it's really my love and I brought some people that are strong supporters of this project. I just wanted to introduce Jim Meldrum, who has been -- he's my score counselor, he's been helping me all the way. Helping me on the business side. Barb Chandler, she's the first lady of tennis. She brought tennis to Idaho. Most of you know about her. Matthew Warren, executive director of the Idaho Division of United States Tennis Association. Toni Sinclair, Tennis Service representative for the United States Tennis Association for this section. And, then, Wendy Nielson and she's the marketing representative for Idaho branch of the United States Tennis Association. They are all behind this project, so that makes it a little easier to talk about this. It's been a life long dream of mine to be part of a community tennis center. Most of my career has been in the private sector. That's where the jobs were, so you can't blame me there. I have pretty much gotten a lot of experience in the tennis business, know how to make it work as a lot of fun, but also how to make it work so it's paying the bills. So, as life long sports, what I try to promote all the time and as a bridge for all ages, the idea of a community tennis center is that it would be affordable and a lot of times that can be a problem for clubs, it tends to be a little on the expensive side. So, that's the goal. We talked about convertable courts. I will talk about that in a little bit. Quick Start Meridian City Council Workshop March 9, 2010 Page 16 of 48 Courts, that's also with the USTA, the new movement, smaller courts, and to build up, just kind of like the same thing with golf, building up on a smaller course and working to a bigger course. Same idea. Want to have an education component of the tennis center. The plan is experienced professionals and also community backing. And I have been -- again, quite a background in tennis. The last 14 years before the last year I was at the Boise Racquet Swim Club and a tennis director and also general manager. The club was very successful. Oversaw four indoor courts -- four new indoor courts that were built, so -- and as tennis director starting in 1994 the club increased its profits in the tennis side and, then, when I became manager in 2002 the club also became profitable. So, it was -- it was a very good experience for me and I want to take that onto the community side. I have the backing of Sandy Moore, who is -- well, actually, several racquet club members. I'm still a member of the racquet club. Past president of the Boise Racquet and Swim Club. She's behind this project. Nice to have that. I have the backing of Matthew Warren with this project, seeing that it's going to be quite the addition for this area. I have the backing of a coach most people know about in this Area, Greg Patton and, of course, he wants more indoor courts. It showcases his tennis team and he's a great promoter of the sport, too. D.A.R.E. is behind it, because we know that it -- the more active the kids are in tennis the better chance they are going to stay out of trouble. This is just apicture -- maybe a show of hands of people who have been at the racquet club or been members in the past, Boise Racquet and Swim Club? Anybody in here? Bird: I have been to it. Kurz: You have been? Bird: I haven't played there. I have been there one time to watch tournaments and stuff. Kurz: Great. Great. So, you know what I'm talking about. Okay. Bird: That lady over there is the one that started it. Kurz: Pardon? Bird: That lady over there is the one that started it. Kurz: She started it. Great. So, you know her. And this is just a picture of kind of a stucco version of the indoor courts that were just built. They were eight already and we added four just last year in 2000 -- 2000 -- well, two years ago in 2008 and worked with the city and also worked with the neighbors to make it beautiful, so that made -- that carried a lot of weight. Also the look of the indoor courts, which will be very serious -- not serious -- very similar to what we will be doing with the four indoor courts at Settlers. Some things different, possibly, would be making it a little bit more airy, you know, just a chance to add some lighting in or open up some windows and, you know, make an indoor-outdoor type facility and, of course, we have already talked about Settlers Park Meridian Ciry Council Workshop March 9, 2010 Page 17 of 48 and this would be the area here and the beauty of doing a tennis center -- year around tennis center is making the -- kind of a year around use of this facility, so that we could be showcasing and having other things to advertise or sign up year around and I really -- with indoor tennis year around that's one use of it, but we could also be doing some other things, which I will be mentioning here. One idea that -- that I had not considered, but we began considering came from -- came from Tammy saying that there was a great need for converting courts and making it more useful for basketball and volleyball and at first it was, you know, as a tennis player Iwas -- my reaction was I was horrified, but -- De Weerd: I know. Sorry. Kurz: Yeah. But I started thinking about it and started realizing that as a coach for many years I have always encouraged people to play a lot of different sports that come into tennis, so -- and also because tennis is an individual sport, team sports kind of balance out with tennis, so that people don't think they are all that just by playing tennis, just an individual. So, it actually started to grow on me and that is going to be part of our -- we are endorsing it, talking with the tennis association, we are open to that, because we want -- we want to do things differently than how clubs have done it. We want to do it -- we want to do it so that we are going to be unique and I think that would be a great way to be very very unique. What we would do is -- I'll go back to this -- this is a -- basically a mezzanine area here up a bit from the courts and this could be a divider lane, we could have two courts that are convertable, two courts that are tennis -- we could have tennis going the whole time and -- but we could also separate it at some times and just have -- sometimes just having tennis and sometimes basketball or volleyball and, of course, it would be a scheduling key to get this all together, but we would also decide to have tennis year around, we would be able to take the pressure off of the basket -- the basketball and volleyball having to go over to the schools. So, we are behind this idea and we want -- we want tennis players, we want athletes, we want people to really get into the sport and I'm just real excited about it. I wanted Matthew to say a few words on behalf of the tennis association if you could. Warren: Thank you, Jo Ann. Madam Mayor and Members of the Council, thank you for having us. My name is Matthew Warren. I am the executive director of the United States Tennis Association here in Idaho and, simply put, if you build it they will come. The Treasure Valley ranked number two in the western half of the United States in player per capita -- tennis players per capita. That includes Denver, Salt Lake City, Seattle, Las Vegas, and so -- so, it's kind of unbelievable when you think about that. This last year we had over 11 percent league growth across the entire state of Idaho for adult league play. Last year we started a new program called Tennis 101, which is a family friendly program on Saturday morning for kids and adults of all ages and we had over a thousand people show up for that and it was just a pilot program. So, the number one complaint that we get in our office all the time is a lack of indoor courts in this area and in the Treasure Valley. I can't even get some of my own staff members court time in the winter, so the need is there. So, if you build it they well come, because Meridian City Council Workshop March 9, 2010 Page 18 of 48 they are already here and I will be happy to answer any questions later on in the program. Thank you. De Weerd: Thank you, Matthew. Kurz: And, then, Toni, did you want to talk about Quick Start, because Quick Start is a new thing with the USTA and it's the courts that start out a little bit smaller and it's a progressive type -- go ahead. Sinclair: If you can see that, it shows how, just like soccer, they have taken the courts and the equipment and minimized it for kids to be more successful, so they are not just hitting it once and, then, going and chasing the ball all the time. So, this is - we actually put four courts in a normal size tennis court and, then, 36 feet and so the kids use a foam ball and aracquet -- it looks like a racquetball racquet and you stand on the baseline and hit to their buddies back and forth and you use a modified scoring, so they don't have to remember 15, 30, and all the complicated stuff. So, we make it fun and successful and they are not standing in lines anymore, we are making it a lot of hand- eye coordination and really interactive with doing different skills sets and so that's just a picture of Quick Start tennis. It's a national program. Of course, the guys in Europe have been doing this for ages and that's why they are rock stars. So, the U.S. is catching on and the USTA is also helping giving matching grants for facilities that start building Quick Start components and also give free equipment to those places that do so. Thanks, Jo Ann. Kurz: And, then, Toni showed the Quick Start courts on active regulation courts, but there is actually incentives from the USTA to -- at the national level to build the smaller courts and the -- what I like about these scaled down is that they will be right by the playground and kids will see it and they will run over and they will jump in on the action. The other thing is adults just scaling it down for beginner adults, it's -- it's a new way to teach, as well as seniors who maybe don't want to -- or maybe not just seniors, people that may be injured don't want to run as much, but they still want to have the fun of playing tennis and we also with these courts have what's called compression balls -- decompressed balls, so that it's a little bit easier to hit. I remember playing so long ago when I started at seven years old with a wood racquet that it hurt to hit a tennis ball, but these balls it doesn't hurt and they don't go as far, but you learn control. Okay. So, anyway, does anybody have any questions for me? Zaremba: Council, any questions? Bird: I would like to know what the plan is. Now, what -- what partner -- what partnership of the city? Are we just supplying the land and this is being done and how is it going to be ran and stuff? Kurz: Well, the -- the plan would be to have a person that would contract through the city to have this -- to run it, okay, but it would have -- it would also be a partnership with -- there is going to be city programs that go on. Okay? We are going to keep the cost Meridian City Council Workshop March 9, 2010 Page 19 of 48 low. That's the plan. It's not to make it like a club, but this is going to be a pay-as-you- play type of facility. Bird: Who is going to put the facility in, Jo Ann? That's what I'm saying. Who is going to fund the cost of the facility? Kurz: Well, what I'm hoping is that a combination of fundraising from our side and also in combination with money from the city. That would be greatest -- Hoaglun: So, Jo Ann, what -- could you just give us a ballpark. What does something like this cost for something like maybe Boise Swim and Racquet Club did or what figures have you looked at? Kurz: Well, the four -- let me just explain. I mean I know the numbers pretty well. The four indoor that we just built in 2008, 1.6 million. Right there. Not sure what the pricing would be two years later. Probably pretty close to that, because -- Bird: Could be less. Kurz: -- it's very competitive and the whole thing very -- and counting the parking and the clubhouse of two levels with also classrooms available for arts and crafts, you know, with the parks and rec department. Approximately -- on the high side would be about 2.4 million for this whole property, counting the parking exhibition court -- but that's on the high side. You could have a range anywhere from two to 2.4. Siddoway: So, it's about double what the -- our cost estimate for the outdoor courts that we put into the enhancement last year was about 1.2 million for the outdoor courts, including the four there, plus the champion court and, then, the grounds around it. It included lighting the championship court, things like that. So, it -- at 2.4 million, if that's the number, it would be about -- about double, compared to what the outdoor ones alone would be. Hoaglun: Are you looking at doing this -- this would be trying to do it all at once? Is there a phase concept, do the outdoor ones and, then, the indoor ones or vice-versa or trying to get it all at once? Kurz: Well, I mean the idea would be to do it at once. If we had to do it in stages, I think -- I think the outdoor would be the easiest and affordable way to go first, plus it's very visible and, then, the indoor could come in second. Some people -- or another way to do it would be even to get the outdoor done and have a temporary structure of a bubble and give the vision of let's go for an indoor center. And, then, the beauty of a bubble would be that it can come down in the summer. But that's -- my goal would be to have -- if we went for the endorse to go all the way and get it done, start out with maybe an outside. I'm open to phases. I mean I think anytime there is a building it creates - creates interest and, you know, what's going on and we can talk about it more and say this is what's happening, here is the thermometer and we are fundraising and we -- with Meridian City Council Workshop March 9, 2010 Page 20 of 48 the USTA they will help out with -- Toni as a representative and, Wendy, with marketing, they are able to help us with grants and -- as part of this. So, that's a great association to have. Hoaglun: In fact, that was my next question was, you know, where are you looking for money? Is it coming from the local community? Is it coming from across the U.S? Is it -- are there association grants? Give us a little insight into -- how does that -- how do you envision that happening for fundraising? Kurz: Well, the -- already the -- the United States Tennis Association has -- this is their 9th drawing and they have put these together for us at no cost and that's great right there. The -- they said that once we have 80 percent funds raised for our project they will put in 50,000 dollars at the national level. What did you say, Toni, with the cost and the equipment? Toni: Just the public facilities percent of the total cost and, permanent courts they donate teach Quick Start. So, there i and that initiative. Kurz: So, it's -- grant she's speaking of is 50,000 dollars up to -- as 20 then, as well as adding Quick Start courts, if there is equipment, and Idaho Tennis can help train people to s a partnership with the USTA, especially with the youth Bird: Jo Ann, (still -- is there any strings attached with this grant that comes from USTA? Kurz: Well, that's -- Bird: Like how many -- how many -- how often we have to open it up to their deals or anything like that and (really -- how is the business plan going to -- how are we going run it? That's my concern. How are we going to run it? I don't see the city being capable of running -- Siddoway: Right. Bird: So, I want to see -- I want to see your business plan. Siddoway: We do have a business plan that I can share with you that we had Jo Ann submit. In general terms, we would see Jo Ann operating it with her staff, but as a nonprofit organization, and in partnership with us, so that we have some priority use times for our needs as well. We would want it to be a budget neutral situation for the city in terms of, you know, us not putting money into the day-to-day operations of the facility. Bird: 1(es. Meridian City Council Workshop March 9, 2010 Page 21 of 48 Siddoway: At the same time we are also concerned that it not feel like a -- an exclusive private club in a public park and so that's -- so, we need to make sure that the fees are affordable, like Jo Ann was saying, that this is publicly accessible and, you know, the details of that -- of that agreement still need to be worked out, but before we spend a lot of time on an agreement we want to see if the concept makes any sense to the Council. Bird: Steve, I have one concern on the fee system to our taxpayers. There is going to be taxpayers out there that think they are entitled to go in there, because they pay taxes, and I'm not saying they are not right. I might not agree with them, but Ihave -- I'm saying they are not right. Do I think it's something to look into? This is one councilman that's very interested in looking into something like this, but it's got to be worked out on a -- on a very very tight clad business ran business that did not hurt our taxpayers. Siddoway: Well, we charge fees for all of our softball, you know, and all of our other programs, so the idea that it be -- Bird: But if I want to come play agame -- if I want to go excluding Brooks Field and if I can usually jump over the fence I can get in there and play baseball, too, and -- without a fee. The fields are open to it. Well, these tennis courts are not going to be open to the public unless they are a member. Siddoway: Well, not truly a member, but they would have to pay -- Bird: They would have to pay a fee. Siddoway: Yeah. Kurz: For the indoor, at least. Siddoway: But the outdoor ones -- one of the conversations was could they put those existing ones indoor and we have asked that they not, that they keep the existing two tennis courts outdoor, so that they are just available for the public. Bird: In the wintertime if there is an indoor tennis facility, our people are going to want to play in it, as well as their people, let me assure you of that. But I think you can work out a business plan. Siddoway: Yeah. We can. Bird: We have got -- we have got to be fair to our taxpayers first, I'm in favor of going and seeing what we can do. I think it's a great idea. Zaremba: Councilman Rountree, welcome. Rountree: Thank you. Sorry for the tardiness. Meridian City Council Workshop March 9, 2010 Page 22 of 48 Zaremba: I would note for the record that he is here. Rountree: I was in South America. I managed to escape. That's another story. I agree with Keith. My concern, though, is -- is prior to that. I think for the concept to go forward I need to be assured of the commitment on the part of the situation. I don't want to get into Heroes Park or something like that or a commitment and it doesn't come through and we have committed and you came through and, then, we pick up the commitment on the part of somebody else. Siddoway: By commitment you mean funds. Rountree: Yeah. I mean we are talking about multiple millions of dollars here and the concept I think is grand. Okay. And I have talked about this with other constituents, but it's always down to what's it going to cost, who is going to commit to do what and when are they going to commit to get it done and, then, if that happens what's the trigger to do the next thing. So, I'd like to see that all worked out up front before we spend a whole lot of time doing business planning on how you are going to run the thing. How do we get there? Siddoway: And that's one of the reasons we are here tonight, quite frankly, is that they need to be able to do fundraising and before I turn them loose on fundraising, I don't know if there is at least a level of comfort that this site plan could work with your vision for -- for that park. Rountree: And I guess what I'm saying is that go ahead and fundraise, but it's tough right now, we all know that. If it doesn't happen -- it's not going to go forward. Siddoway: Then we go back to outdoor courts. Bird: Steve, it -- and I agree with Charlie a hundred percent. This is one partnership that's not going to be 99 and one, our taxpayers aren't going to be 99 and one -- 99 percent and one percent for somebody else. I agree with Charlie, let's go forward, let's get -- see if we can raise the money and, then, we sit down and decide how we are going to run it. Siddoway: Okay. Zaremba: I would chime in with that as well. One of my concerns was -- and maybe this was an issue for legal -- is can we have any amount of exclusivity within one of our public parks and that's -- I'm interested in this -- this is a park that has a lot of public- private partnerships in it that have gotten it built. However, the operational use did not become necessarily a partnership, it's run by our Parks Department. Siddoway: Yeah. But there are priority use times. For example, MYB in their fields they have times that they -- Meridian City Council Workshop March 9, 2010 Page 23 of 48 Zaremba: Okay. Siddoway: -- schedule their fields. Zaremba: That we don't have access to. Siddoway: Correct. Well, we only have access when they are not using it. Zaremba: When they are not using it. Okay. Bird: Same thing at the Legion Field., Dave, and we do charge there, too. Zaremba: And I don't necessarily need Mr. Nary to answer right this minute, but it would be one of the things in the mix that I think we need to consider as we move forward, is what we are proposing legal in Idaho and, yes, I would support moving forward at least to the next exploratory level. I would make one comment. It would -- this is a beautiful park and has a lot of very nice facilities in it. It would disturb me a little bit if this were just kind of an industrial looking building and I think it needs to be in the budget to beautify it some way and I -- Bird: Not even temporary. Zaremba: And I even think -- I have made the suggestion that that round circle that you see to the right of this, which is a water tower, I think that needs to be spruced up and we should get our arts commission involved in doing a mural of an aquarium or something on the -- on that water tower, but - De Weerd: Or all the different uses on the -- you know, in the park. Zaremba: Some kind of mural to dress that up. But I wouldn't want this just to be an industrial looking building or it needs to be something that's pretty and appropriate to this very beautiful park. De Weerd: And, Jo Ann, you're not responsible for the mural, so -- Kurz: Thank you. De Weerd: Just wanted to answer that question. Zaremba: Yeah. Kurz: Well, I'm happy about that. Well, that wouldn't be a problem and I just want to assure you that I'm not trying to operate this as a membership. It's going to be fee based and indoors there are cost for the lights and the heat and just to keep it going. We would work out details for outdoor if there were outdoor reservations, but the plan Meridian City Council Workshop March 9, 2010 Page 24 of 48 would be to -- court can be anywhere from eight dollars all the way up to 16 dollars an hour and still a pretty good -- decide on the same day do I go to a movie or do I go play tennis. I mean that's the idea is that it's going to be more accessible to people and, then, on top of that there is still times, like as an example, over at the racquet club Friday at 8:30 used to be a very -- Friday night at 8:30 p.m. and 7:00 p.m. on Saturday night used to be pretty dead time, but we ended up renting out time to the -- to the spring mixed league and that became a real social club and brought more people in, brought more interest in. So, I think the partnership with the tennis association would be to fill some of the times that are the dead times to pay the bills. So, that would be my goal is, obviously, it couldn't lose money and the whole idea to get the money so that there is no mortgage -- I mean it takes all the pressure off. I mean I have seen -- with the club go from under a million down to 300,000, back up to 1.6 and I see where the pressure, you know, comes when all of a sudden it's got this note to carry. My goal is to make this work and make it affordable is not to have a mortgage, so -- Bird: We won't have a mortgage in the city as long as I sit here. De Weerd: Now, isn't this kind of similar to the West Y in the city of Boise in a partnership in a facility that you charge fees, if you would have the opportunity for youth that were disadvantaged, if there were discounts, you know, I guess there is a couple models out there that we could look at -- Bird: West Y and this is not the same. The YMCA is not a taxing entity and Yonke built that and give it to them and they charge fees for -- De Weerd: No. I mean in Boise. Bird: West Y? That isn't a taxing entity over there. Nary: The city of Boise owns half of the West Y facility and the Y owns the other half. Bird: Owns the other half and they are partners in it. Nary: So, could we craft something like this? Yeah, I think we could. I mean, again, I think the difference is that the fees for here are going to be -- be governed by the laws on fees in regards to public facilities versus a private facility, they can charge whatever the market will bear. We may have some differences in that and that may be part of the agreement as how we determine that or how -- who owns a portion, that's certainly another method to do that. A portion may be owned by -- by the tennis association and there may be some things -- like the Mayor is talking about where you may have some discounts for certain things, things like that. So, yeah, there are certainly models out there. I mean I don't think there is any legal impediment to proceeding forward, it's just whether we can work those details out. We will see: Zaremba: And I would add one more and that would be also consulting with the police department. Is the building ever going to be open when there is nobody there Meridian City Council Workshop March 9, 2010 Page 25 of 48 supervising it? How do they surveille both behind and around and inside the building? Keep them in the loop. Siddoway: So, if I could summarize what I'm hearing. The looming question can Jo Ann and her team raise the funds to build this partnership and -- but it sounds like there is enough interest in the idea that it's worth giving them the opportunity to do so and so with -- if there is -- Hoaglun: I just wanted to say, what I see this as -- as a parks department we are going to provide more outdoor courts and all we are looking at now is we are going to provide outdoor courts, is there a way to provide indoor courts to expand the opportunities for people to play tennis and if we do a partnership and if we do that, someone else is going to have to manage that and operate -- do that sort of thing. How can we make that happen and make it fit within this nice paid box, which I think we ought to explore. That would be nice to give people a year around opportunity to play tennis. Siddoway: If we explore it and it can't happen, our fall back is we could still build the outdoor courts. Hoaglun: Still build the outdoor courts. Siddoway: But we have an opportunity to look at a partnership here and see if we can build the indoor facility. De Weerd: Which makes it a year around use. Hoaglun: I do have to say I'm biased in that, because my shoulder still hurts, my hamstring still hurts. My son was home from college and we played Sunday afternoon. If I could do that year around I won't hurt when he comes home from college. Kurz: Could I have Jim Meldrum say a few words? De Weerd: Yes. Meldrum: First, a confession. I'm -- I'm not part of Meridian. I'm not a citizen here. I was at one time. I live in Boise after the big land grab a few years ago. De Weerd: I'm sorry, sir, you will have to sit down. I'm kidding. Meldrum: If I have a claim to Meridian it's that I was director of operation services for the postal service when we built the post office in some years back. Three points just to reenforce. The idea expanding the accessibility of tennis is one of the things that appeal to me about this project. Those of you who love Idaho know that we have some really rotten winter weather that's not conducive to outside. So, I see a need in that aspect. It expands the parks utilization. Anything -- I believe anything we can do that will increase the use of those parks in non-use time is a benefit both to the taxpayers Meridian City Council Workshop March 9, 2010 Page 26 of 48 and particularly the young people who would be using them. Third of all, I get excited about the idea of a joint public-private funding of something. That certainly helps reduce the cost to the city and let me make just a point or two about -- about Jo Ann. I met Joan at a sport counseling session at -- we partner with the City of Meridian -- not the city, the Chamber of Commerce, who lends us their office to council occasionally and when she came to me the -- all of this was a gleam, if you will, in her eye, a thought that she had. She had a fire in her belly. Those of you who have had to hire and supervisor people know very well what a fire in a belly can do. I was impressed with the skill and the ability, background that she's had in this area and the third and final point I'd like to make is that she's gathered some people who are very willing to help do what needs to be done. The concern about details are -- being lacking are part my problem, because I have said from the beginning let's not spend 250 thousand hours doing this without even knowing that we have got a spot to do it or the support of the people that would be -- to do it. So, maybe what we are really looking for is some kind of a nod that says, yes, go ahead, let's start seeing what we can really do. Thanks. De Weerd: Thank you, Jim. Okay. Any final questions for Jo Ann or Steve? I think you're getting the nod. Siddoway: We will take the nod and see what can come of it. Kurz: Well, thank you. De Weerd: But I do think it would be important to work out the agreement details to make sure all of that aligns as you move forward, just to get all of those nailed down. Hoaglun: We are not talking about having a formal agreement, but just -- De Weerd: No. Hoaglun: -- having an understanding of how it would work and those types of things at this time. Bird: Yeah. So, we don't go down the road and, then, figure out that we have done something that isn't legal. That's why Bill's department needs to be kept in the loop. Siddoway: We will do. Zaremba: And I would like to say I appreciate the people that have come in support. That makes a difference to me. Kurz: Yeah. I have got a strong team here. Well, thank you very much. We really appreciate the time. De Weerd: Thank you. And, Steve, did you have anything further? Meridian City Council Workshop March 9, 2010 Page 27 of 48 Siddoway: Nothing further. Thank you. C. Public Works: Water and Sewer Utility Update. De Weerd: Thank you. Okay. Our next item, Item 6-C, is our Public Works Department to -- for their overview and update on the water and sewer utility service fees. Barry: Thank you, Madam Mayor. De Weerd: Welcome back, Mr. Rountree. Rountree: Thank you. De Weerd: I don't know if we noted for the record when you showed up. Rountree: Noted on the record that I was late. De Weerd: Okay. Thank you. Well, welcome back into the country. Rountree: Oh, man. It's a welcome to be here. Zaremba: Are you speaking English now? Rountree: Si. De Weerd: Bob, if you want to sit up at this front chair next to Pete. Barry: Well, thank you, Madam Mayor. It's my pleasure to present to you this evening an update on the water and sewer rates and the financial modeling. We committed to you and the Council last year when we went through this process that we would provide you an update on the modeling and provide insights as to how the rate increase last year had impacted the Enterprise Fund and to stand before you and make a recommendation as to whether that schedule that we had committed to last year is one that's continuing to make sense for the city. Before we get too far along I do want to applaud and make known my great appreciation for the efforts of staff who have contributed to this analysis, as well as other presentations. Most notably the finance director Stacy Kilchenmann, her staff, Todd Lavoie, or my staff Becky LePerry and Tom Shoemaker, so -- there are others that were involved as well, but those folks were instrumental in helping this move along. So, I'm grateful for all of their time. I think that I will be giving the majority of the presentation, but Stacy will probably provide some insights on some of the financial calculation on the onset of the slide show and so without further adieu I think we will go ahead and just jump into it. De Weerd: Okay. Meridian City Council Workshop March 9, 2010 Page 28 of 48 Barry: So, on our agenda tonight we will just talk briefly about the fund status and, then, we will review the current model projection, just have a very brief discussion on the verification of the model and some of the public out reach efforts that were undertaken last year and, then, finally, wrap up with a recommendation and that's next steps regarding the modeling and the rate modification. So, with regard to Enterprise Fund status, I'll turn this over to Stacy, she can give a little bit of insight on this particular chart and perhaps the next one as well. Kilchenmann: Did you all read your audit report? De Weerd: She's been asking that -- Kilchenmann: Yeah. I brought it and I could read the Enterprise portion, but I won't. So, if you looked at your audit report -- and Kevin briefly mentioned this, but our -- this -- this graph shows where our actual ended up FY-2009. So, basically, our loss position of the prior year reversed itself in FY-2010, so we can see the narrowing of the graph between the sales and operating expenses and with this particular graph -- this is from the audited financial report, so it does not include the transfers between the General -- or from the Enterprise Fund to the General Fund and it does include depreciation. So, we used this last year in our town hall meeting, so we just wanted to update it. If you look at 2010 it takes a big leap upwards and that's because I think Tom's going to -- has some detail on exactly what happened, but, basically, we just didn't spend our entire budget, we had quite a lot of open positions, so that resulted in a personnel fund savings and, then, we had some operating savings as well. So, that's kind of -- kind of our result for the audited financial statements in a nutshell. Are there any questions about that? I mean it's in excruciating detail in this management discussion analysis. Okay. No questions on that. Moving on. Do you want me to do the next one? Barry: We can. We can tag team it. Kilchenmann: Okay. This -- I will just -- Tom will go over the specifics and Iwill -- again, Iwill just briefly explain this. This is what we call the unrestricted fund balance and you can see how we reached a crescendo when we had a lot of connection fees coming in from growth and, then, how it fell off as we completed big construction projects and, then, that little up tick we took this year, because we didn't spend as many projects as were budgeted and we have that increase in operating income. And Tom can go over some of the details. Barry: Sure. Stacy really covered it. We did have to postpone some projects from fiscal year 2009, as we have done historically, and, then, also from 2009 to 2010 it's called carry forward and those dollars tend to be fairly large, because we work on significant capital projects, which do have large budgets. So, as those projects move forward those funds are obligated, but have not yet been spent and so that, in addition to a couple of other points, certainly some savings that we were able to identify in delaying projects in our capital improvement plan and also through a pretty significant review of the capital program plans we were able to find close to four million dollars in Meridian City Council Workshop March 9, 2010 Page 29 of 48 funds that we no longer need in the capital program and those funds were returned to the ending fund balance and contributed also to this up tick that Stacy referred to. Additionally, about 1.1 million was returned to the ending fund balance as unspent budget for different positions that we had open. We were running about a 15 percent vacancy rate in the Public Works Department for most of last year and that also contributed. As well, we had about 1.3 million in operational savings associated with the fact that we were under -- we underspent what was budgeted. So, my understanding is that historically Public Works has a history of doing that. We are trying to reconcile. We like to be as close we can on our budget to expenses, but at least we fell on the right side of the fence, so to speak, as it relates to expenses and budget. So, that's the summary of that graph. I also wanted to take just a few minutes to let the Council know that our department Public Works has -- has taken significant steps to curb spending and to identify cost savings initiatives and strategies and coordinate projects and maximize efficiencies to the greatest degree we can, because we know and do not take for granted that any increases to rates have a significant impact on our community. To that end I wanted to report to you that some of the initiatives that are noteworthy include returning four million, as I just mentioned, a project to the ending fund balance and, then, also postponing about 2.7 million dollars worth of capital construction projects, what we call noncritical projects, but certainly important projects. Operational we saved about 250,000 dollars through a variety of different cost savings initiatives. We presented those in the past -- I think last year -- mid year we presented those and we have also -- sorry, I forgot to change this term. We didn't actually reduce staff, but we realigned staff and that realignment of staff occurred with the opportunities for automation of the wastewater treatment plant, as well as incorporation and expansion of our radio read water metering program. As well I mentioned the personnel savings of 1.1. And also notable are grants. We did receive about 306,000 dollars over the last year in grants for a variety of projects and we have -- last year applied for about 36 million dollars in grants, largely for the stimulus funding that came out. We were unfortunately unsuccessful in acquiring those funds, but we did put considerable effort into going after them. Also we have on our planning to submit about 2.9 million for federal appropriations for this upcoming year. So, we are serious about curbing costs. Yes, sir, Mr. Rountree. Rountree: Well, on your capital construction, you've indicated 2.7 million dollars postponement. If they are not essential, why aren't they eliminated? Barry: Well, nonessential does not suggest not important. These projects here -- Rountree: Same question. Barry: Okay. If it's not important why -- why isn't that money being put towards important capital projects? Rountree: Well, I don't want to suggest, again, that they are not important. What I'm suggesting is that the timing of those projects is at the position where those projects have -- and maybe I'll use an example, which might help. We have been looking into Meridian City Council Workshop March 9, 2010 Page 30 of 48 treatment technology -- treatment technology at the wastewater treatment plant, like bio- augmentation, nutrient removal and those types of things. Well, we had projects scheduled and budgeted for some of that work this year and those projects no longer make sense at this point in time without the completion of our facility plan and wastewater master plan. So, those projects are important, but we don't want to put the cart before the horse, meaning we don't want to begin to build technology that may not in the long term make sense at it relates to what a facility or master plan might tell us is the best type of technology or process or those sorts of things. So, when I say we have postponed those -- and I use the term nonessential, what specifically we mean is not critical at this point in time, but that doesn't necessarily mean not important. So, I don't know if that's -- Rountree: I just would suggest that -- careful with the terms and the language you use and maybe the appropriate thing to say is that you prioritized 2.7 million dollars worth of construction projects. Barry: Yeah. Abetter way to say it. Thank you. Any other questions on this slide? Okay. So, we will jump right into what the model says. You have seen much of this information. There have been a couple changes that we'd like to make you aware of before we show you the output, but these were the inputs. Essentially our operating reserve, which is an inflationary reserve, meaning that it adjusts itself automatically in the model based upon the size of the operational budget that we have. So, currently for water the operational reserve is about 2.2 million and that's on average over the five year model period. I think the first couple of years is 2.1 and, then, it's like 2.3 at the end of the model. So, just about the average yourself. Wastewater is a little bit more, because the operational budget is a little higher in wastewater, so it's running about 2.6 on average over the period. Just so you know how much of the funds are being transferred to capital projects and this is not the only source of funding for capital projects, we certainly have developed assessment interest income and those sorts of revenue sources, but for water between 600 and 800 thousand over the period, wastewater one million to about one and a half million. Depreciation in financing, we are still using the straight line approach. We still -- we need to do a better job at the department really pinpointing what the depreciation needs are in the department. We don't have good records of all the assets and we don't have good values of those assets and so that makes the calculation using a straight line or any other sort of financial calculation very difficult. Currently, just so you know, we have budgeted about 800,000 per year or so for water and about 1.7 million beginning in about 2011. I think it's -- this -- 2010 has been modeled at around -- I believe 800 or 700 thousand. So, that ratchets it back up to 1.7 beginning 2011, stays fairly consistent from that point on. Regulatory reserves. This is an area that is a recommendation that we did not include last year, the Council's decision last year was not to have a regulatory reserve. We are throwing this out again, because as we continue with the conferences and dialogue with the EPA and other municipalities in the region, we are getting pretty confident that the requirements out of the EPA, although we don't know exactly when they will come, will likely come and impact our community significantly as it relates to phosphorous and nutrient removal requirements from our effluent at the wastewater treatment plant. So, we Meridian City Council Workshop March 9, 2010 Page 31 of 48 have recommended and incorporated into this particular model run about a 1.1 million dollar set aside, if you will, or regulatory reserve that will grow by that same amount each and every year over the five year period and that's certainly something we can talk about at the conclusion of this, but I did want you to know that that is one of the major differences over last year's model run. The assumptions haven't changed greatly for the modeling. The model has incorporated the three year period that we talked about. Population growth factor for the five year period is about .5 percent. Personnel at three percent. And that includes not staff growth per se, but growth as a perfect contribution of benefits, wage increases, with regard to merit increases and those sorts of things and, then, construction costs slated for our capital projects of about 3.8 percent tied to the five year E&R rate. Our approach is the same as last year where we are using just in time capital financing and we plan to -- or the model attempts to anticipate current revenue needs based on a future capital operational depreciation and need. With that this is what the model currently trending for this year, moving -- or the run this year for the next five years. You will notice it looks somewhat similar to the model -- you may not notice, so I'll put it up in just a moment, but the tread lines are somewhat similar to last year's model and we will talk about the similarities and differences in just a moment, but I'll let you have a look at this slide for a little longer. The blue line is water. The green line is wastewater. And these lines represent what we call the nondesignated fund to balance and I will explain that in a little more detail here in just a moment. We anticipated that the Council would like to know the difference between last year's model and this year's model, particularly what the trends look like and so I put last year's model and this year's model on the graph here to show you the differences. In 2010 you can see the significant difference here -- well, let me just point these lines out. The light green line is the model run of last year for wastewater and the light blue line is the model run for water last year. The dark blue is this year's model run and the dark green is this year's model run for water and sewer respectively. So, you notice the biggest -- the biggest difference here is the starting point in 2010 and the biggest discrepancy is in wastewater. I think we are showing here almost a six million dollar discrepancy largely in the form of those dollars that I talked about earlier in the presentation. That's the impact here. Essentially, what it's done is the trend is similar, but we have just moved this -- this wastewater line out almost a year and that's benefiting the modeling and it's also benefiting the fund balance, as I'll show you in just a slide or two. So, that's --- that's what the two models look like, one on top of another. You will notice information for 2015 is not included for the 2009 model run, because it is only a five year run and so it started a year previous and ended a year previous to the current model run. This is the fund balance versus nondesignated fund balance and there is a difference, because I'll go back to this slide and I -- it's important for the Council to know that these lines do not represent ending fund balance amounts. These represent what we are referring to as nondesignated fund balances or fund balance amounts. And so what that means is that these are -- this would be available cash after all of the reserves and set asides in the fund have been accounted for and so we anticipated the question, which might be, well, what does the fund actually look like with those reserves and so that's these two graphs and I threw two -- the two graphs on-here. This is -- the graph on the left here represents the fully scheduled increase, which means if we took the rate increase this year and again next year as scheduled and the one on the right is if we took the Meridian City Council Workshop March 9, 2010 Page 32 of 48 increase this year, but did not take the increase next year. So, I will talk about that in just a moment. Let's go back to this particular scenario where we do take both increases as scheduled. This line here, this kind of orangish line, represents the sum of the dark blue line and the dark green line, the two model runs of the slide previous. So, this is what we will call cumulative, nondesignated fund -- ending fund balance and, then, this line, the dark red line, which at the top, represents what is the total ending fund balance for the Enterprise Fund. So, this is inclusive of any cash remaining -- available cash remaining or what, again, refer to nondesignated funds, plus an operational reserve, plus a depreciation reserve, plus a regulatory reserve if the Council so moves that we include that. And what you can see is once we -- what we do is we have been able to up turn the declining trend by around -- in the Enterprise Fund total balance by around FY-11, which was a target period for us in last year's run and we get a shallow increase moving in 2012 and, then, a little bit more steep increase, which suggests here that we would be saving an average about three million dollars a year beginning at the end of fiscal year 2012. And this -- this line represents what happens when you look at stability here on the lower line in overall available cash in the nondesignated fund balance. So, the idea that you want to increase or remain stable at some comfort level the total Enterprise Fund balance, but still make sure you have enough cash on hand to take care of things as they come up. And so, anyway, as you can see in this particular case, there is that trend occurring in the graph on the left. We anticipated the question might come up. Well, what might happen next year if we didn't raise the rates. I mean could we afford to do that. And there is some good news with regard to that answer and while this line here, which is, again, the nondesignated fund balance goes negative in FY-2012, its impact on the total fund is -- is not such that the fund sinks as well. What you see here is that the total fund continues to grow, but at a more modest rate than the fund is growing on the graph to the left. However, the difference between the orange line and the -- I guess we will call it maroon line in both graphs, is the reserve amount. So, what you will notice is that -- and I put the reserve amounts over here and I broke them out in water and wastewater in the pie chart here. Essentially, for the total fund the operating reserve by 2015 will have -- for water and wastewater reached around 5.6 million. Again, that's a calculation based upon the size of the budget. Depreciate the reserve would be on the order of around 15 million and the regulatory reserve, if approved by the Council, would reach about 5.7 million by the year 2015. So, that on the chart to the left is the difference between these two lines at the end of FY-15. It is also the difference between the graph on the right between those same points, but what you will notice is that because this orange line is dipping below zero, those are negative funds. Those are funds you don't have, which means that, in reality, you would only have from zero up until -- I think that's around 18 million. You end up with 18 million available to cover all of these reserves, which are on the order of I think about 26 million. So, it begs the question how much reserve do we really need to have and you will notice that the biggest amount of set aside or reserve is related to depreciation and I mentioned earlier that we really don't have as good a handle on the total assets, the age, the condition of those assets and so making a calculation that is more accurate than we have now has been difficult to do. But this particular -- Zaremba: Tom? Meridian City Council Workshop March 9, 2010 Page 33 of 48 Barry: -- 15 million here in depreciation -- De Weerd: Tom? Barry: Oh. Yes. I'm sorry. Councilman Zaremba. Zaremba: This is either a question or a comment, I guess. go around and say this building it depreciates at this rate because much of our infrastructure that you need to underground. Barry: Right. It's not necessarily easy to and it's worth this much, do that with is actually Zaremba: You're talking about the pipes and everything, some of which are I guess approaching a hundred years old at this point, at least in the Old Town area. So, if I'm right, it isn't a matter of just being able to observe and say, okay, now we know what appreciation ought to be. Some of this stuff is hidden and you wouldn't dig it up to figure this out. Barry: Councilman Zaremba, that's -- that's exactly the point and, as you know, we have not been very good at popping manhole lids and running television cameras down the line as frequently as we would like, which is why we modified the television inspection program and vector truck program where we incorporated it and we now own a television camera truck, which we received last summer, to do just that. So, those assessments will be coming and until we get information from those assessments, it's going to take about four and a half years to five to five and a half years to get through the whole city just in the line. You can't run a camera down water lines, so you kind of cross your fingers and wait for a water main break and, then, you know you have a problem. I mean there are other things that you can do on conditions assessments, but, essentially, until we get really familiar and comfortable with what that is, it's hard to know how much should we really save for depreciation. I can't -- we don't even really know what the total value of assets are on the books, to be honest with you. I mean our recordkeeping goes back to 1988 and at that point in time forward we have been able to account for about 205 million dollars worth of water and sewer infrastructure, but we have no recollection or accounting after that and those don't include replacement cost either. So, an estimate that we have come up with is somewhere on the order of around 350 to 400 million. Oh. Excuse me. Before that. Thank you, Stacy. So, we don't really know. We need to collect more information. But that doesn't mean that we should overbudget depreciation or underbudget. So, that's sort of the quagmire we find ourselves in and it is something worth discussing. But it would be my hope that we could get additional information, maybe bring this -- this amount of the depreciation reserve down and the regulatory reserve doesn't really change much -- or, excuse me, the operating reserve doesn't change much, but the regulatory reserve we can talk about later. The whole idea here, again, is if you think about how fast the city grew -- I mean, essentially, our growth has come in the last decade or two, that's a lot of Meridian City Council Workshop March 9, 2010 Page 34 of 48 infrastructure that over that same period theoretically would have to be replaced. So, we would have to have that -- those dollars in the bank to replace it under our pay go policy and so, you know, getting comfortable with having a large balance available for those impending challenges in the future may be something that we find ourselves having to deal with. But, in any event, we will move forward, but I did want to share with you that the model predicting not total ending fund balance, but what we call nondesignated funds. If we move forward this year with the three year implementation, with the rate increase, these amounts are what we would be looking at. For water usage an increase of about 20 cents per thousand gallons, with the water base increasing by 57 cents. For the sewer would be an increase per thousand gallons of sewage treated of $1.12 and, then, the base rate for sewer would be $1.75. We put some calculations here for the total impact to the average family bill. This is based upon use of 8,000 gallons of water and 5,000 gallons of sewer and what I wanted to point out with the demographics pie chart is that 75 percent or so of our customers are under that average. So, give you an idea sort of how that relates and transfer it to the community. As you know we have been incorporating benchmarks into our Public Works operations and one of the benchmarks we track is what's called the affordability index, which is an index that is incorporated by a lot of different agencies around the globe. I have taken the one from the U.S. Environmental Protection Agency and the USEPA has an index that, essentially, suggests that a tolerance for water services is about 2.5 percent of median household income over the annual period, which, essentially, means that you ought to be able to take two and a half percent of your median household income and apply that to water services. And if you do that, then, that is considered affordable. If you are less than that, great. So, what that does is we have transitioned this into the percentages as you see here, so if you're greater than 2.5 percent according to the EPA threshold, then, you're not affordable. If you're between one and a half and two and a half percent, then, you're affordable, but if you're between zero and 1.5 percent in that equation, then, you're very affordable. What we did is after last year's rate increase we ran the numbers on the affordability index and this is based upon where we stand currently in our affordability index for water and it's running at .34 percent and .54 percent in wastewater. And what we did is we just took the EPA's model -- or EPA affordability index for water and just -- and just applied directly to the sewer. And so I wanted to mention that, because we are sensitive to how that relates to our financial situation and rates. It doesn't mean that a rate increase tastes any better, but it does give us at least an idea as to what the rest of ~ the - of the nation from a comparison standpoint --gives us that benchmark to compare against, so -- Bird: What did you use for median usage and for median income? Barry: Okay. For -- for the -- the ratio, again, is median household income and the usage -- and so for usage we used 8,000 gallons of water, 5,000 gallons of sewer. What that total bill would be -- you go back here it was this dollar amount here, $46.37. per month. You take that number, you multiply it by 12 to get your annual cost and, then, you take that number and divide it by your median household income. Bird: And what did you use as the median income? That's what I want to know. Meridian City Council Workshop March 9, 2010 Page 35 of 48 Barry: Yes. The median household income was 63,053 dollars in the year 2007 and so I don't have any of updated numbers from -- since then, so I don't know if it's gone up or if it's gone down. Bird: I can guarantee you it's went down. Barry: Well, I anticipated someone would ask that question, Mr. Bird. I appreciate you doing that. So, I also ran the numbers at the 2000 census rate, which was 53,276 dollars as a household median income. Okay. So, I'll just read these numbers, hopefully, we will get a frame of reference here. Okay. So, if you use today's rate and the year 2000 household median income, this number here goes from .34 percent -- okay. Well, this is going to be a little different, because what I did is I recalculated the numbers based upon what they would be at the end of the three year term. So, let me give you those numbers first. At the end of the three year term this number goes from .34 to .45, based on 2007 median household income. However, to get to your -- to answer your question, Mr. Bird, it goes from .45 to .53 in water. So, it's pretty insignificant. And it's similar in wastewater. Wastewater -- this is what it currently is at the end of the three year period using 2007 numbers you get .82, but if you use the 2000 census numbers you get .97. So, in the worst case scenario, meaning we are using 2000 census numbers, which is a 10,000 dollar decrease in median household income and the full three year increase, we are still under one percent in each of those entities. Bird: The one thing you -- in my opinion, Tom, you forgot. In 2007 we had about six percent unemployment. In 2010 we have got ten percent unemployment. That's a lot of unemployment and I can assume you that nobody's going to have a median income of 53,000 on unemployment benefits. Barry: Uh-huh. That is true. However, you know, the numbers are the best we could do. Bird: And I understand that, Tom. At least you- got numbers. Barry: Well -- Bird: That's a change and a nice change. Barry: Okay. Just very quickly, just to remind you it's been some time, but most of you may recall that we did run the model and the calculations and all that stuff through independent third-party review. The review came back very favorable as it relates to what we had done and the calculation and the -- the practices that we are incorporating. A couple things there are probably noteworthy. We -- Tom Pippen had submitted -- he's the president and managing director of BBC Research and Consulting who reviewed the model, came back and he actually submitted testimony last year that I wanted to read just a few small snippets of. One of the things he said is that, you know, based on Meridian City Council Workshop March 9, 2010 Page 36 of 48 his 20 years of experience -- and this speaks directly, Mr. Bird, to what you were just saying. Based on the 20 years experience as a municipal public finance consultant, which includes approximately 110 rate and fee studies completed for local government clients throughout the western United States, it is important to note that both Meridian's base rate and user rates for water and wastewater are still relatively low when compared to other jurisdictions across the western United States. He goes on to say that staff used legitimate data sources, valid calculations, and that we employed a fundamentally sound methodology consistent with utility, industry best practices in updating our utility rates. So, in addition to that you notice that -- or you will recall that we front loaded the public process in this three year increase. We put significant time and resources into reaching out to the community, holding town hall meetings, conducting a focus group, sending out letters and fliers. Press releases and the like. And so all of that work was done last year and, essentially, does not need to be repeated unless the Council so desires. So, next steps, there is a couple things here that we should discuss. First of all, we are recommending at this point in time to satisfy the reserves to allow the scheduled rate increase to occur as it is scheduled for April 20th. Build a conservative FY-2011 budget under the current proposal, meaning the current financials that we have developed in the model. Continue to identify efficiencies and leverage alternative funding sources to see if we can't decrease our individual or our city contributions for projects. Develop a formal depreciation program and, then, revise the financial forecasting model for 2011 by February of 2011. It's our hope that as we do that we will find that it is possible that we may not need to move forward with as great an increase as scheduled for next year and what we would be like -- what we would like to do in Public Works is really put our thinking cap on and get better numbers to see if maybe there is a possibility of avoiding it all together. So, we know that that would be something that everyone could benefit from and we are committing ourselves to see if we can't do that. So, that's the reason, again, those graphs that you saw earlier had both of those scenarios. Just so you also are aware, the rate ordinance that you passed last year had three primary components to it. It was a three year increase scheduled annually over that same period and so the rates were to increase at the same amount each and every year for a consecutive three year period. That the rates would increase by the same amount -- I think I just mentioned that. And also that the increase would be justified and that is, again, why we are here before you this evening. So, with that I'll stop and open it up for questions or discussion. Bird: Madam Mayor? De Weerd: Mr. Bird. Bird: Tom, I think you got -- I think we finally got a good model. I think it's a great model. My heartburn is whether in this economy -- I don't believe we can get any lower. There has never been anything worse in my 69 years of life. I hope we can't get any lower. Is this the time to implement a raise? Is there -- is there any way that we -- that we can get by through this year without a raise and, then, take another hard look next year, like you have done. Your model is great, Tom. Your model, in my opinion, is fantastic. You have done everything you possibly could. And I don't disagree that you Meridian City Council Workshop March 9, 2010 Page 37 of 48 maybe need a raise, but, boy, when I -- when I get every week something like this, there is suffering people out there and if my -- if my raising the sewer and water is going to take away food for some kid, I have a hard time voting for that. Barry: You have asked a very good question, Mr. Bird, and we did not run the model in any scenario with excluding this year's increase. Now, we could certainly do that. We have the data, it's up to date, we could run that and report back to the Council what we found. We could run a couple scenarios whereby we -- we take no increase this year and, then, take the increase next year and give people a year off and see what that does. We could run it where we take it this year and don't run it next year or we could talk about maybe taking half this year and half next year. I mean there is -- the sky's the limit on the types of scenarios you would like us to run. But we didn't run any of those, we ran the model as the model was designed and as we had committed to the Council we would when we reported back. So, if Council would like to direct us to do that, we would be happy to. Bird: And, Tom, I don't know, I have got one other little question. Personnel. Employees. At the wastewater treatment plant at the facility we -- how many employees have we increased or decreased? Barry: I don't have that -- yeah, I mean what period do you mean -- Bird: From the last raise or -- Barry: Oh, from -- oh, in the -- Bird: The last year. Barry: The last year? Bird: Yeah. Shoemaker: We have kept the same number of FTEs from the last time you had a rate increase to now. Bird: Water department. Shoemaker: Same thing. Bird: Same thing. Administration. Barry: There, actually, hasn't been any -- any increases in staff. As a matter of fact, we have frozen positions. We have frozen a development analyst position, we have frozen an inspector position. I'm trying to think -- I don't have the work chart in front of me, Mr. Bird, but we haven't increased in FTE count, we have hired vacant positions, though, which were budgeted. So, I don't know -- that gets the -- Meridian City Council Workshop March 9, 2010 Page 38 of 48 Bird: No. That answers -- that answers -- I just -- Tom --and just to reiterate, I -- I don't know, (really -- and to be truthful, I see the number of single -- evidently single parents or single people in this -- it's not Mr. and Mrs. or still growing children, but I really have a - I really I have a hard time, but I'm certainly open for discussion. By the same token we have to be, so -- you know. De Weerd: Mr. Zaremba. Zaremba: And the thought comes to me that in the Parks .Department and maybe some other places around the city their summer programs have a certain fee to attend. They have a fund that people can apply for to reduce that fee if they can show a hardship. I don't know how we would administer such a program in the water department, but it concerns me to have seen the projections from last year and to have seen the projections from last year and to have seen the projections this year that proved that last year was correct and that we needed to fix the direction that we were going, which we have. It concerns me not to do the rate increase that you're asking. I certainly agree with looking at again the third year, next year. To me the way not to do the rate increase this year would mean not doing the reserves and to me that's scary. There are things that could come at us -- we would need those reserves and some of them fairly quickly and, then, what do we do? It - I certainly feel for the individuals that -- that are having a struggle going on right now. I know some of them. And you never know whether -- if my wife lost her job we would be one of them. So, I do have a great deal of concern for them, but (wonder -- ten percent unemployment is scary, but it also means 90 percent employment. We do have people in the city who are employed and to me it would make sense if there was a way to do it, to go ahead with the scheduled rate increase and find some way to deal with the hardship cases, maybe -- maybe even the county has funds that would do that, but that's a question. Barry: Mr. Zaremba, we actually did as part of our increase last year develop a program that offset for low income families their bills and so I will let Stacy speak to that, but we did partner and develop a program and the Enterprise Fund did finance 20,000 dollars last year -- was it ten? Ten thousand dollars last year, excuse me, to fund that activity to help folks and, Stacy, I know you guys administer that. I don't know if you have numbers off the top of your head as to how many folks used it or not. Kilchenmann: Well, what it is is it's administered through EI Ada, because, you know, it's complicated to administer, because you have to determine is it really a hardship, et cetera. So, it goes through their program, so they determine eligibility and, then, they call and check with us, so it's -- the person has -- we only allow -- I can't remember off the top of my head how many times we allow them to use it or -- you know, if there is somebody that has been habitually turned off for five years or something and it covers 75 percent of their bill and I'm thinking -- I don't have -- I think last year it was used -- we probably used about 6,000 dollars of it - of the 10,000. So - I mean, you know, like when she ran the turn off list today there were 261 people on it. So, obviously, we can't -- if we are going to pay their bills, then, we may as well just increase it, but -- Meridian City Council Workshop March 9, 2010 Page 39 of 48 Zaremba: Well, I'm not suggesting -- Kilchenmann: -- it is -- at least it's -- and that's something we could definitely look at increasing, like saying you're eligible for a hundred dollars, you're eligible to -- you know, X more times. Zaremba: Some way to prove that they need assistance, not just they are being a dead beat and some percentage of contribution. Kilchenmann: And it's close, they can -- I think it's right down in Garden City, so it's close to Meridian. And they determine eligibility requirements. So, really, it is a good program. I mean they have been a really good partner working with us, so I -- you know, I would suggest any way that we consider increasing the minimum -- De Weerd: Councilman Rountree. Rountree: With that discussion it seems to me that that's an issue that the Council needs to take up and determine what level of risk they want to operate that business at. To me we have had this discussion. We set the rates. We have set the ordinance. And now we are going to rehash it and maybe come back to the same conclusion. Maybe not. But we need to know that there is a risk in the operation of that Enterprise Fund. Though the picture looks a little better this year than last, it's -- we can't afford to let the system go. Having said that, my concern is about the reserve accounts and that is something that we have let go and maybe we can let go some more, but -- and, Tom, you can refresh my memory about the reserve accounts, particularly the depreciation account is how is that used -- have we established the -- a level at such point that we don't need to accrue anymore. We certainly don't need 300 million dollars worth of reserve account sitting there in anticipation of having to replace the whole system. So, what that magic number? Can we back into it a little more slowly and maybe ease up on the rates in that regard? Is there a use of that account similar to the capitol improvements that we anticipate failure before failure and use the depreciation account to do that or are there some accounting rules and principles that have been established that guide that we have seen and approved and -- or at least get guidance on, those kinds of things? Barry: Mr. Rountree, a very good point and very good question and I think that if the Council were to entertain some modification other than what's scheduled as far as a rate modification goes, that the reserve balances would be -- the choice target to have that discussion and get comfortable with modification. The balance tier that you see on the slide that I brought back up for you again, in reserves total on the lower right there is 26.3 million, which is -which is considerable. What we would be doing, essentially, is saying with those set asides -- and you can probably take the 5.7 million out, so that you're really floating somewhere around -- what would that be -- 17 million or so. What you would be saying is that 17 million -- right? Meridian City Council Workshop March 9, 2010 Page 40 of 48 Rountree: 20.6. Barry: 20.6. Yeah. I'm sorry. I was thinking 23. So, 20.6 you would be, essentially, saying that 20.6 is our new zero and you can -- you can bring the fund down to 20.6, because that regulatory reserve would be eventually spent. That's the whole goal. It's not an ongoing reserve, it's just to build a fund that, then, pays for whatever the -- the EPA felt that we have to pay for. So, the two important components are operating and depreciation. Our intent on depreciation is to figure out what is the magic number. What makes the most sense for our community, the condition of our assets, the value and number of assets and build a fund to that amount and, then, treat that fund as a reserve, but any additional funds that go into that fund get spent on year-by-year basis, so that we are, essentially, financing the repair and replacement of our assets while maintaining a reserve in the event that we have a major failure of those -- of any one asset. For example, if the treatment plant had a major problem with one of its clarifiers or the aeration or something like that, we may not be able to support its replacement in one year with just what might be financed in depreciation, as opposed to having that fund available to, then, dip into and, then, replenish and, then, go back to the way we had initially financed it. My gut feeling is that the dollar amount of 15 million for depreciation is probably a little bit high as a standard set amount, but, again, it depends. It's not -- it's probably high now, but it may not be as high as we get closer to that, you know, period where the majority of our assets come due for repair or replacement. So, that begs the question. Can we -- can we sort of roll into that. Can we start slow and build that and move forward and the answer is absolutely. We have lots of flexibility. What I would suggest that we not tinker with is the operating reserve. That is a four month reserve for the entire fund for water and wastewater. Wastewater -- we don't really have a ton of variability usually, but water you can have significant variability if you have a wet summer where most of our revenues come in, for example, or our conservation efforts really pay off, you know, you get adjustments that way. But the depreciation reserve again is open for discussion and if we back that down and postpone a few more projects and maybe eliminated some projects off of the five year CIP and push them back further, we might be able to make some modifications that would be more favorable in the position we are in right now. And, again, that's just something that we -- Hoaglun: Madam Mayor. With all of that, when I look at that, there are things that we can do, possibly, down the road, but we aren't to that point yet where the reserves are established, we haven't gone underground to see what the sewer system looks like. You have a plan to do that. You know, if we get surprised by some things and go, wow, this is more serious than we thought, we have to be there to -- with the funding to be able to do some replacements and those types of things. I agree we bit the bullet last year and said, okay, we are going to do this over three years. I think we need to move forward the second year, look at it again this time next year and say, okay, where are we? You guys will have another year, you have looked at more systems, you have got the determination of what's coming down maybe on regulations, although that's always a big unknown. I think we have to stay the course. For the unfortunate folks that have lost a job this past year, the base water increase of 57 cents, sewer a $1.75 per month, Meridian City Council Workshop March 9, 2010 Page 41 of 48 I mean that's -- it's not going to make or break them, because they are hurting. I mean they won't be able to pay their bill period. I wouldn't mind if staff took a look at some other options that you could bring forward on saying, okay, if we tinker with it this way, increase this a bit or do that, I'm willing to take a look at that to help some folks out, but I -- my position is we will stay the course for at least another year with the increases that we have implemented and, then, review it again this time next year. Bird: Madam Mayor? De Weerd: Mr. Bird. Bird: Tom, if you could in your spare time for me, I would like to know in our infrastructure, wells, everything else -- lines and everything that are over 20 years -- what percent is over 20 years old. Ithink you're going to find 25 is over 25 years old, 75 is under 25 years old. Barry: Yeah. We -- Bird: Because I can tell you in 1998 we didn't have -- we didn't have a third of the water and sewer in when I come on board and we -- and that wastewater plant was just starting -- one of the slur -- I don't know what you call them things. And Ithink --Ithink at that point we only had seven or eight wells. I don't know what they are -- clarifiers. De Weerd: Thank you for clarifying that. Barry: That could be hard to track, Mr. Bird, because -- but we can work with finance and try to get as much of that information -- again, we don't have a lot of the information pre-1988. So, we'd kind of be having to guess backwards. We know that the treatment plant in some form existed, but -- and we know we had wells and lines and stuff, but how -- I don't know that we would be able to get you as precise number as we'd like. Well, what we have done, which is sort of a crude approach, is that, okay, what -- you know, based on population let's attribute infrastructure -- size, for example, or assets to population. If our population is 75,000 right now and our population is in 1990, which is 20 years in the past, was 30, 31 thousand -- Bird: Nine. Barry: Was it nine? 1990? Bird: Yeah. That's where everybody -- I feel that everybody's getting worried about the infrastructure and I -- your reserve for operational, kid, I agree with you a hundred percent there. Don't touch that. Ithink --Ithink our infrastructure -- we are very, very fortunate that we have new infrastructure. Sure, there is old lines down here, you know. Mine's 45 years old. But the majority -- and I don't think I'm wrong -- and Ican -- I can go back through the records and fine out what's been put in since 1994 when the growth Meridian City Council Workshop March 9, 2010 Page 42 of 48 started, what subdivision's been here and what's been put in and that will pretty well tell you what's -what's out there. Barry: Okay. Well, we -- Kilchenmann: I can tell you what your total -- 169 million in depreciation. So, 15 million is pretty insignificant. Yeah. 170 million net of depreciation. So, we -- let's see. At two million depreciation is like 36 million. That's how much we have taken in depreciation. De Weerd: So, Council, I guess I'm having a sense that you would like at least further information or -- what is -- what is the direction for staff? Hoaglun: For me I'm good with the rate increases that we have in place for another year and for staff I wouldn't mind taking alook -- is there a need, working .through EI Ada, are there different formulas or increases -- increase the amount, look at income options, different things like that that we can say, okay, we need to tweak this a bit, because of the situation people find themselves in financially. Take a look at that. And, of course, identify where do we get the money if we want to increase that, so -- Nary: Madam Mayor? De Weerd: Mr. Nary. Nary: You currently have -- and I'm looking here online -- it says 70 dollars a year that a person can get for that program. That would be the one I guess is what you're talking about is whether you increase that, but right now -- Bird: Is that on -- or EI Ada's? Nary: That's EI Ada -that's what the Meridian Cares program -- it goes through EI Ada -- De Weerd: That's what we said. Rountree: We established that -- Bird: Yes. Rountree: I agree. Let's look at that as a buffer and maybe increase the fund or increase the level of participation. Kilchenmann: The number of -- I think we set that up like on an average delinquent bill, so we can increase it slightly and we could also look at letting them use it more times. Zaremba: That would be my choice. And to me the questions we are asking are what we would discuss a year from now. I think this rate increase needs to go ahead as Meridian City Council Workshop March 9, 2010 Page 43 of 48 scheduled. But the discussion we are having, we would have these answers a year from now; right? Rountree: Right. I think the model still needs to address the things that (mentioned -- Zaremba: Yes. Rountree: -- with respect to the reserve accounts and what's the movement we need, how are they going to be utilized that they would be applied and how you use the depreciation reserve account, which is a capital improvement account versus -- obviously, the operating account is fine. Is four months the right number. I think that's pretty reasonable. I think that's what we have established for the city General Fund. So, we know what that level is, so that's going to grow every year a little bit, but it's not like we have to feed that every year with -- the model can take into account what minor percentage that would be, but it's -- to me that depreciation -- if we don't establish a cap and a rationale for that, how it's going to be utilized, we could continue to grow and continue to force that model to have rate increases -- Kilchenmann: Mr. Rountree, one of the discussions -- Rountree: Heavy on the mister. Kilchenmann: Mister. One of the discussions we did have, an accounting kind of discussion this afternoon was that we don't currently now designate the funds, but we will be required to designate funds or make designations, but that when we do start having a depreciation fund, we would need to have a separate policy that we all follow on what we use that fund for, so -- because we set that up and we decide that we want to go buy a new piece of land around the wastewater treatment plant, that would not be a use for that fund. Bird: That's right. Kilchenmann: So, we would -- we would need to have formal adopted policies. Rountree: Yeah. If we are going to call it a reserve account, we need to have those. Kilchenmann: Yeah. Barry: Well, what -- exactly. We can refer to that fund as a restricted fund or replacement, repair fund, or whatever you want, but Stacy is right, I mean that's what you would designate those funds for and they wouldn't be able to be used for anything else. I think what you're saying, Councilman Rountree, is we need to be comfortable with what that amount is. Rountree: Yeah. Meridian City Council Workshop March 9, 2010 Page 44 of 48 Bird: That's right. Barry: And based on that amount, then, we run the models and we say, okay, this is our tolerance and this is what the models say we have to do at that point. So, on those two points, you know, I'd like to also get your input on that regulatory reserve, if we include that or not. If you back down the depreciation reserve and you eliminated the regulatory reserve, which places us in potentially a tough spot when EPA comes out with what they say. Now, again, we don't know. I mean they can tell us we got 15 years to comply. Well, then, we start saving then. Or they could tell us you have got five. We just don't know. So, it's a matter of risk again and getting comfortable with that risk. But those are two areas that you might be able to shave off, you know, upwards of ten million dollars or something like that, with a little more conservative approach towards depreciation, set asides, and an elimination of the regulatory reserve and maintaining an operational reserve, run the model and see what it does, it might suggest -- I mean I don't know what it would suggest, but -- Kilchenmann: If I can interject. Barry: Sure. Kilchenmann: I think -- which I was always for doing the whole rate increase at once, because I think if you drag it out -- like if you run the model and decide that we need to do it three more years, because we don't have enough reserves, it's a lot more difficult for us from a customer service standpoint. It's -- people just see that -- they see a rate increase and they really notice it when they get their sewer bill and they are off the average, so I -- De Weerd: They are noticing it now. Kilchenmann: Yes. De Weerd: Okay. And I think that's what Tom had mentioned, he was hoping that this year they can maintain what you passed last year and shave off next year and with some of those adjustments that Councilman Rountree had mentioned, that looks to be doable at this point, but, again, you have to model it again and see what -- what happens. Barry: And that's what that graph on the upper right represents is if you don't take the rate increase next year, we can slowly build the fund with aless -- with eight million dollars less in reserve, so you get to choose where you'd want us to shave off eight million dollars of reserve, but there is good news in that and that is that the fund begins to grow even without that rate increase, so based on that -- and I think there is -- there is a fairly good early indicator that maybe next year you don't have to do anything, but I - -you know, it's difficult to say at this point in time and I hate to commit to anything on that at this point in time, but -- Meridian City Council Workshop March 9, 2010 Page 45 of 48 Rountree: Are you on for lunch? Bird: You and I will have the same conversation a year from now. Barry: We might. Zaremba: Madam Mayor? De Weerd: Mr. Zaremba. Zaremba: Just for clarification forme. All of those reserve amounts are the target that it would add up to by five years from now. The reserve accounts right now are nowhere near those figures; right? Barry: Yeah. That's true. Zaremba: If anything. So, we are talking about what we are trying to build toward, not what's surplus right at this moment. Kilchenmann: Correct. Not something we will have at the end of next year. Zaremba: Yeah. Bird: Madam Mayor? De Weerd: Mr. Bird. Bird: Bill, we have to put this on the agenda and vote on it, don't we? Nary: Madam Mayor, Members of the Council, Council Member Bird, no, you approved it last year. It's already done. You don't have to revote on it. Bird: I thought the motion said we would come back and revisit it and decide whether we were going to go on or not. Nary: No. What the -- the resolution's right here. What you did is you approved every rate increase for the next three years starting last year. All you committed to doing was exactly what's been done, is reporting on how it's going. You have the right to not impose it, you can certainly do less if you choose, but right now you don't have to do anything and April 20th the bills will change. That's -- that's what was already decided last year. Zaremba: That's the way I understand. We would have to take action for it not to go into effect or for it to be a different amount. Meridian City Council Workshop March 9, 2010 Page 46 of 48 Nary: That's correct. You could only do less, you couldn't do more without another public hearing. But you could do less or nothing or allow it to just continue. Zaremba: I would propose that we do nothing. De Weerd: Well, you're suggesting to do something in terms of looking at Meridian Cares program and looking at the reserves and maybe bringing back a recommendation that would work into the model I guess next year. Is that -- Zaremba: Yes to all of those. Nary: And, Madam Mayor, Members of the Council, I'm looking at EI Ada's qualifying amounts, so what they are -- just so that you know what it is. I mean a family of four would qualify for this program with a monthly income of 2,208 dollars. So, anything that amount or less they qualify for that, so one of the things you may want to consider -- I know they have done some promotion in MUBs directly to folks, but you may want to look at a little bit more promotion in addition to whatever -- if you decide to enhance the program and I don't know where the funding for that comes from, but some additional promotion might be helpful. I don't know what -- other than just when they deal with the folks as they come in the door, if there is another way to promote it besides the website. There may be other ways. De Weerd: Okay. Okay. Anything further from Council? Thank you, Tom and Stacy and your teams. I know there is a lot of work that goes into this. Barry: You're welcome. Thank you. If you have additional questions or whatnot, please, let us know and we -- Mr. Bird, with regard to your question, I will try to get you something by a-mail. I don't know if the rest of the Council is interested and -- Zaremba: If you are going to put it together I would be happy to hear it. Barry: Very good. It might be crude for the reasons we talked about. Bird: That's fine with me. Barry: All right. Thank you all. Item 7: Items Moved From Consent Agenda. De Weerd: Our next item, Item 7, there are no items moved from the Consent Agenda. Item 8: Ordinances A. Ordinance No. 20-1443: MDA 10-003 Julius M. Kleiner Memorial Park by City of Meridian Parks and Recreation Meridian City Council Workshop March 9, 2010 Page 47 of 48 Department, Located NEC of the Intersection of E. Fairview Avenue and N. Eagle Road. De Weerd: Item 8 is Ordinance 10-1443. I will ask the clerk to, please, read this by title only. Holman: Thank you, Madam Mayor. City of Meridian Ordinance No. 10-1443, an Ordinance AZ 07-012, Meridian Town Center, Julius M. Kleiner Memorial Park, for annexation of two parcels for annexation purposes situated in the southwest quarter and the west half of the southwest quarter of the southeast quarter of Section 4, Township 3 North, Range 1 East, Boise Meridian, Ada County, Idaho, as described in Attachment A and annexing certain lands and territory situated in Ada County, Idaho, and adjacent and contiguous to the corporate limits of the City of Meridian, as requested by the City of Meridian, establishing and determining the land use zoning classification of said lands to C-G, General Retail and Service Commercial District, in the Meridian City Code, providing that copies of this ordinance shall be filed with the Ada County assessor, the Ada County recorder, and the Idaho State Tax Commission, as required by law, and providing for a summary of the ordinance and providing for a waiver of the reading rules and providing an effective date. De Weerd: Thank you. You have heard this ordinance read by title only. Is there anyone who would like to hear it read in its entirety? Council, I would entertain a motion. Bird: Madam Mayor? De Weerd: Mr. Bird. Bird: I move we approve Ordinance No. 10-1443 with suspension of rules. Rountree: Second. Zaremba: Second. De Weerd: I have a motion and a second to approve. Madam Clerk, roll call. Roll-Call: Bird, yea; Rountree, aye; Zaremba, yea; Hoaglun, yea. De Weerd: All ayes. MOTION CARRIED: ALL AYES. De Weerd: Council, we are at the end of our agenda. I would entertain a motion to close. Hoaglun: Move to adjourn. Meridian City Council Workshop March 9, 2010 Page 48 of 48 Zaremba: Second. De Weerd: All those in favor? All ayes. MOTION CARRIED: ALL AYES. MEETING ADJOURNED AT 8:27 P.M. (AUDIO RECORDING ON FILE OF THESE PROCEEDINGS) r MAYORC,Y~I)I(11hY De WEEFZD`~~T~q ~~~~'. A EST: ° .3 / awl ~®lO DATE APPROVED ~~ C ~ HOLMAN, CITY CLERK :, ~ ~~o~ \ ''~~~, ~ov~rr ~ ,.,,