SEPTEMBER 6, 2011
The Council of the City of Augusta, Kansas met in regular session on September 6, 2011, with Mayor Kristey Williams presiding. Council present were Holly Harper, Matt Childers, Michael Huddleston, Sue Jones, Mike Rawlings, Ronald Reavis, and Matt Malone. Councilman Michael Wallace was absent. Also present: City Manager Bill Keefer, Assistant to the City Manager Josh Shaw, Director of Electric Utility Bill Webster, Electric Production Superintendent Jim Sutton, Airport Manager Lloyd Partin, and City Clerk Erica Jones. Visitors present were: Kent Bush, Willis Wilson, Aaron Iverson, Colin Whitely, Eric Christinat, Jocelyn Mitchell, and Steve Off.
Prayer: Pastor Terry Deaver, First Baptist Church, gave the invocation.
Minutes: Reavis made a motion to approve the minutes from the August 15, 2011 meeting. Malone seconded the motion. Motion carried without opposition.
August (8A): S. Jones inquired about the payment to Bryant & Bryant Construction. Keefer stated it was for the brick street repair on Euclid. S. Jones inquired about the payment to Goedecke Engineering. Keefer stated it was for 80% of the cost of the survey of the railroad right of way. S. Jones stated the contract does not call for a progress payment. Keefer stated Goedecke feels the work is complete but that there are a few items Keefer wants cleared up before full payment is made. S. Jones asked when Goedecke will be presenting his report to the governing body. Keefer stated October. Huddleston stated if the money were held it would make Goedecke more anxious to get those issues taken care of. Rawlings stated that would be unprofessional and that he should get paid for what he has done. S. Jones inquired about the issues that need to be resolved. Keefer stated there are a couple of properties west of town where the railroad right of way runs along the old refinery property where some things overlap with the County records and the surveys. Keefer stated he wants those issues corrected and resolved before he considers it complete. Huddleston asked how long Goedecke has known about these issues. Keefer stated it has been three weeks, but that Goedecke has been working on resolving the issues. Reavis made a motion to approve Ordinance 8A in the amount of $1,982,121.25. Childers seconded the motion. Motion carried with S. Jones and Huddleston voting in opposition.
August (8B): Huddleston asked if this included two months of billings for the Animal Clinic. Keefer stated it was for one regular monthly bill for around $2,700 and the additional cost was for three pit bulls that were ordered held per municipal court. Huddleston asked if those were placed there by the court, how we are reimbursed. Mr. All stated the owners are notified by the court that the animals will be released if the pay the bill for their care, if they don’t pick them up it may be weeks before the judge has the animal euthanized. Huddleston asked why they are given more than three days before they are euthanized if they are placed there by the court. Mr. All stated if they have a prohibited animal they can pick them up but the animal may have to be removed from town and there may be charges for tags, vaccinations, etc. Mr. All stated that often those types of animals are abandoned at the clinic. Huddleston asked if the court will order them to pay. Mr. All said yes. Keefer stated those reimbursements would show up in the court’s fines and fees revenue. Reavis made a motion to approve Ordinance 8B in the amount of $325,217.84. Childers seconded the motion. Motion carried without opposition.
Eric Christinat, Executive Director of Downtown Augusta, Inc., requested the closure of the 400 and 500 block of State Street on the morning of October 29th for the 2011 Chili Cook Off. Malone made a motion to approve the closure of the 400 and 500 block of State Street on the morning of October 29th for the 2011 Chili Cook Off. Huddleston seconded the motion. Motion carried without opposition.
Jocelyn Mitchell, Executive Director of the Chamber of Commerce, requested the closure of the City lake Road on Saturday morning, October 1st for their annual Loop the Lake Run as part of the Augusta Homecoming Fest. Malone made a motion to approve the closure of the City lake Road on Saturday morning, October 1st for their annual Loop the Lake Run as part of the Augusta Homecoming Fest. Childers seconded the motion. Motion carried without opposition.
FAA Grant Offer: Council considered acceptance of the FAA Grant Offer for the Parallel Taxiway Project at the Augusta Municipal Airport. S. Jones asked who is responsible for creating the documents for the construction management program. Lloyd Partin stated the contracted engineering firm will be handling the construction management program and that Partin will be working closely with them. S. Jones stated she has experience working with the FAA and would like to see that document. Reavis inquired about the area North of Highway 54 being in the Runway Protection Zone and asked how the limitations/actions of this will affect the property owner’s offsite of the Airport. Partin stated this project will not impact the Runway Protection Zones. Reavis asked if it would tie our hands in the future. Partin stated these grant assurances are for twenty years and that the FAA requires the City to do our part to protect that zone from incompatible improvements. Shaw stated these are the same assurances that we currently are under. Reavis asked how we would protect the City or that land to the North, and how can we tell the property owner if he ever sells that property that they cannot do certain things with the property. Shaw stated we already have provisions that have been in place for some time to address this, and that we have began having discussions with the property owner as well. Reavis made a motion to accept the FAA Grant Offer for the Parallel Taxiway Project at the Augusta Municipal Airport. Malone seconded the motion. Motion carried without opposition.
2010 Audit: Aaron Iverson, Auditor with Edward B Stephenson & Co. presented the 2010 audited financials to the governing body. Iverson verified that all members of the governing body received the SAS 114 letter that he sent them. Iverson reiterated that this particular letter was not provided to management and that they were not privy to the information contained in it, so if the governing body members chose to they could share the letter with management. Iverson stated that page 53 of the audit is incorrect and that if the governing body leaves their copies of the audit with E. Jones he will send her the replacement pages and she can return to them a correct copy of the audit. Iverson briefly reviewed the audit document with the governing body. Huddleston stated he could not reconcile the budget amount on page 6 for the Airport with the budget he has for the Airport. E. Jones stated she would provide a reconciliation to show what line items were combined to come up with those figures. Iverson stated the auditor’s main concern is to make sure it balances.
Huddleston referenced the management letter and stated that items 1b-1d state the controls in place need to be monitored. Iverson stated those are areas handled outside normal policies and procedures and are not under the direct control of the people we are working with. Iverson stated it is handled by part-time or seasonal employees and that there may be multiple people handling the funds in that area. Iverson stated they didn’t find any issues or areas of concern; he just wanted to identify the importance of continuing to monitor those areas. Jones stated controls have been put in place, such as daily deposits with a breakdown of revenues for the pool and numbered receipts at Santa Fe Lake. Reavis made a motion to accept the 2010 Audit. Childers seconded the motion. Motion carried without opposition.
Fixed Asset Waiver: Rawlings made a motion to approve Resolution 2011-17 waiving the requirements of K.S.A. 75-1120a(a) in regards to fixed asset accounting for 2011. Childers seconded the motion. Motion carried without opposition.
Kansas Power Pool: Council considered approval of a Resolution authorizing the execution of a Power Purchase Agreement with the Kansas Power Pool. Colin Whitley, Executive Director of the KPP, stated there are regional issues facing the KPP such as compliance issues with the EPA and an opportunity to purchase a 40MW share of the Dogwood Power Plant. Whitely explained that if a double majority of their customers pass this resolution, they can purchase the Dogwood Plant and comply with the EPA issues as a pool which would make it more cost effective. Whitely stated the debt would be issued to KPP, not the city. Williams asked how much debt would be involved. Whitely stated it would be about $30 million in debt for KPP.
Huddleston asked if we already own catalytic converters. Keefer stated they have been budgeted for a couple of years, but that we have held off on purchasing them because KPP has been looking for ways to spread that cost out to all those who purchase power from them. Huddleston asked if all members have to agree to this. Whitely stated it would require a double majority, which would be 17. Huddleston asked what would happen if a member doesn’t agree to pass the resolution. Whitely stated they would not get a benefit of this. Whitely stated this is non-binding and just a straw poll to see if they can meet critical mass.
Williams stated it would be increasing our commitment from 10 years to 20 years and stated that is a long contract. Bill Webster stated we have 8 ½ years left on our current contract. Williams asked Webster his position or recommendation on this issue. Webster stated that KPP has always been the cheapest source of power and that he would recommend approval of this resolution.
Huddleston asked where in the contract is says that if we agree our rates will be better. Keefer stated it is in the “whereas” part of the agreement. Huddleston asked how we will know for sure that our rates will be lower. Whitely stated that cities willing to take the risk will directly benefit from it. Williams asked if we don’t do this, will we be required to add the catalytic converter and if that would cost us more in the long run. Webster stated the four catalytic converters for the north plant will cost $500,000. Webster stated we will still be responsible for the south plant, but that the south plant is for emergencies only. Keefer stated by KPP issuing the debt we will not be taking any money out of our reserves and it could be a cost savings to us as the cost will be spread out even to those cities that do not have generation.
Malone asked how much we have generated year to date. Webster stated we generated one day for Westar, one day for KPP, and several days in July. Childers inquired about the drawbacks of this. Keefer stated that KPP has fulfilled our expectations and that this is an opportunity for us. Keefer stated that he doesn’t know of any options at this time, that is better than buying into the Dogwood Plant.
Huddleston asked how KPP will bill those that participate separately from those that do not. Whitely stated that all bills are cost based on their commitment and it will be easily separated. Rawlings made a motion to approve Resolution 2011-18 authorizing the execution of a Power Purchase Agreement with the Kansas Power Pool. Childers seconded the motion. Motion carried without opposition.
Engineering: Willis Wilson with Aqua Tech stated that as a result of the drought and watering restrictions, he has been looking at several options available to the City with regard to its water supply. Malone asked if the fee is based on hourly rates. Wilson stated in all honestly it will hit the maximum. Malone made a motion to approve the proposal from Aqua Tech Engineering to analyze and study various long-term water options and prepare a comprehensive report and recommendations to the City of Augusta for an amount not to exceed $10,000. Childers seconded the motion. Motion carried without opposition.
Hertz Corporation: Council considered approval of an Agent Agreement with Hertz Corporation for the Augusta Municipal Airport. Reavis stated the document referenced signs and inquired about the types of signs that would be used. Shaw stated they would be mutually agreed upon, but would probably include signage bolted onto the building, on the windows, etc. in accordance with our sign regulations. Williams asked where the cars would be stored. Shaw stated they will be stored in the gated area of the fuel farm behind the main terminal. Reavis inquired about “rent here, leave here”. Steve Off with The Hertz Corporation stated there would be opportunity for one way rentals. Off stated the rentals would also be available for patrons of Parks and Ford of Augusta to use if they have a vehicle being serviced. Reavis inquired about the insurance coverage and asked if the personal injury coverage would be under our policy. E. Jones stated our Airport General Liability Insurance has coverage up to $1 million and includes personal injury. Shaw stated The Hertz Corporation would be listed as a co-insured on our policy. E. Jones stated it is pretty standard to add a co-insured. S. Jones asked if this would increase our premium. E. Jones and Shaw stated there should not be an increase. Partin stated we are looking at covering the vehicles while they are on our property, but that we will have no liability once it is rented as it falls on the renter to provide coverage at that point. Shaw stated that Tony Madrigal with Madrigal & Welch stated he thought it could easily be incorporated into our current policy.
Huddleston asked what type of training the city employees will receive. Off stated the employees will be trained on how to fill out the paperwork and that a Hertz representative will be available by phone to answer any questions should an issue arise. Off stated if the rentals grow, Hertz would provide their computers and software to process the rentals. Partin stated when the customer comes in they will manually fill out the contract and one of our employees will call in the renter’s credit card to make sure it can be used to reserve the rental. Off stated Hertz will process all billing.
Huddleston stated page 3 says the agency will be open as necessary to meet Hertz reservations. Off stated they will set their reservation hours with the Airport’s operating hours and that they are not asking the Airport to add any additional hours, only if they adjust the hours that they maintain the schedule to accommodate reservations already booked. S. Jones asked how many employees would be trained. Partin stated all the Airport Staff will be trained. S. Jones asked if there are any projections for use. Partin stated he believed they could rent four to five cars per week easily and that those numbers will grow. S. Jones inquired about the typical rental fee. Off stated it is on average $225 per transaction and the daily rate is $40-$45 a day depending on the size of the vehicle. Huddleston inquired about the monthly “Concession Fee Payments” listed in 4.1(d) of the agreement. Off stated if Hertz provided a service shuttle or courtesy vehicle to the Airport it would be deducted from their monthly payment to the City. Huddleston asked Mr. All what he thinks about the contract. Mr. All stated he had reviewed the contract and it is acceptable.
Reavis made a motion to approve the agent agreement with Hertz Corporation for the Augusta Municipal Airport. Childers seconded the motion. Motion carried without opposition. Shaw inquired about the timeline. Off stated as soon as the contract is signed the process would start immediately.
Convention & Tourism Grants: Reavis made a motion to approve the Convention & Tourism Grant for the Augusta Municipal Airport for the September 24th Fly In/Drive In in the amount of $500. Childers seconded the motion. Motion carried without opposition.
Malone made a motion to approve the Convention & Tourism Grant for the Kansas Museum of Military History for their September 24th Open House in the amount of $365. Childers seconded the motion. Motion carried without opposition.
City of Mulvane: Council considered approval of a request from the City of Mulvane for a one time waiver of the Take or Pay provision in their Wholesale Water Contract. Malone asked if this is a result of the water lines for the casino. Keefer stated this is for the water supply for the entire City of Mulvane. Williams stated that they are saying because of the restrictions we put in place they may not be able to use what they will have needed within their take or pay amount. Malone inquired about the backwashing of the new lines to the casino. Keefer stated the new lines to the casino will have to be backwashed in mid-September. Reavis made a motion to approve the request from the City of Mulvane for a waiver of the take-or-pay provisions in their wholesale water contract for 2011. Childers seconded the motion. Motion carried without opposition.
Airport Advertising Policy: Malone made a motion to approve the Airport Advertising Policy at the Augusta Municipal Airport. Childers seconded the motion. Keefer asked if we have gotten any interest in advertising on our site. Partin stated that Bank of America and Air Capital have both shown interest. Shaw stated there was a mutual advertising opportunity with a Jet Chartering Company. S. Jones inquired about the pricing for the advertising. Shaw stated that was approved in the fee schedule in a meeting last April. Motion carried without opposition.
Voting Delegates: Childers made a motion to designate Williams, S. Jones, and Malone as voting delegates and Huddleston, Childers, and Shaw as alternates for the upcoming League of Kansas Municipalities meeting in Wichita. Huddleston seconded the motion. Motion carried without opposition.
Appointments: Council considered the appointment of Rob Kuhns to the Airport Advisory Board to fill the unexpired term of Jeff Karst. Huddleston stated if we have a board member that is not attending the meetings, it puts the council in a difficult situation because we do not have a policy in place for replacing an existing member. Huddleston stated we may want to establish a policy to address if we have a board member that does not actively participate. Williams stated these are mayoral appointments and if the mayor is aware of an issue it would be up to him/her to reappoint someone else and the council to approve the appointment. Williams stated if someone is not attending meetings they just need to let her know. Huddleston asked if this item should be tabled. Williams stated she would like to contact Karst before taking any action. Shaw stated there was no urgency to the appointment.
Reavis made a motion to approve the appointment of Martin Yeager to the Augusta Housing Authority to fill the unexpired term of Bill Shriver. Harper seconded the motion. Motion carried without opposition.
Levee Project: Williams asked Keefer to provide an update on the Levee Project. Keefer stated the meeting he, Shaw, and David All had with the Corp of Engineers and the Railroad regarding the levee project was very positive and that he hoped to see something on it by the end of the week. Keefer stated that after the meeting he had a conversation of major concern with the representatives from the Corp. Keefer stated the Corp’s engineer’s estimate for the levee project was $4.5 million and the lowest bid that met the specs was $6.7 million. Keefer stated the way the Corp handles the bidding process, they cannot renegotiate with the low bidder. Keefer stated that in his 27 years of city government he has never seen a bid come back 50% than the engineer’s estimate. Keefer stated there were items that were listed in the bid specs that were not in the bid estimate, for example the relocation of Thunder Road. Keefer stated there were also large differences in the estimates versus the bids for the bypass road, pump station, gravity drain, impervious fill, and the bids were in general more than 10% higher than the estimate on a lot of items. Keefer stated the bottom line is that the City will have to come up with an estimated $791,000 more for the project by the end of the month, but that we cannot have the debt secured by then but can use funds we have on hand and reimburse ourselves once the temporary notes are issued. Keefer stated the Corp has made their request for additional funding. Williams asked when we would find out if the Corp was awarded the additional funding. Keefer stated that he didn’t know, but if the Council was committed to this project he will bring something back to the next meeting. Rawlings stated that he bid on part of the project and that part of the problem with this bid is that it has such a drug-out timeframe. Rawlings stated some of the stuff he bid on was two years out. There was a consensus from the governing body to move forward with this project.
Arts Council: Keefer stated he received a letter from the Augusta Arts Council requesting the City return the API Loan administration fee it received in the amount of $1,500 per the loan policy for the short term loan they secured from API for purchasing their digital equipment. Keefer stated they were able raise all the necessary funds before the first payment was due and since there were no administrative actions by the City they asked that the fee be waived. Harper made a motion to waive the load administration fee in the amount of $1,500 from the Augusta Arts Council for their API Loan. Rawlings seconded the motion. Motion carried without opposition.
Huddleston – Huddleston inquired about the sign at the car dealership for Lee Frye Auto. Keefer stated that Mr. Frye came in three or four weeks ago and stated he is going to open a used car lot. Keefer stated this may only be short term and that he is not sure of all the details.
Williams – Williams provided a NRP update and stated that there have been nine new builds, two builds not part of the NRP and two more builds pending. Williams stated this is three more builds than there was in 2010.
Reavis – Reavis stated he brought up abandoned signs at a previous meeting and that he has since met with staff and found that he missed an important “And” in the ordinance, so the issue has been resolved.
S. Jones – Jones inquired about the status of Wal-Mart. Keefer stated that he has nothing new to report on Wal-Mart, but that he does have some documents to forward the governing body regarding the property owners along the south end of Lulu.
Adjourn: At 9:05 p.m. S. Jones made a motion to adjourn. Childers seconded the motion. Motion carried without opposition.