April 19, 2016 Work Session

Minutes of the Centerville City Council work session held Tuesday, April 19, 2016 at 5:30 p.m. in the Centerville City Council Chambers, 250 North Main Street, Centerville, Utah.

MEMBERS PRESENT

Mayor                           Paul A. Cutler

Council Members        Tamilyn Fillmore
William Ince
Stephanie Ivie
George McEwan
Robyn Mecham

STAFF PRESENT        Steve Thacker, City Manager
Blaine Lutz, Finance Director/Assistant City Manager
Lisa Romney, City Attorney
Randy Randall, Public Works Director
Kevin Campbell, City Engineer
Jacob Smith, Assistant to the City Manager
Katie Rust, Recording Secretary

MASTER PLANS AND FUNDING FOR STREETS AND WATER MAINS

Steve Thacker, City Manager, presented five water rate increase scenarios designed to provide funding for the next five years of water main replacement projects listed in the capital project list prepared by the Public Works Department and ESI Engineering.

•    Scenario 1: One time increase of 30%, no other increases
•    Scenario 2: First year increase of 24%, with 2% increase over the subsequent 4 years
•    Scenario 3: First year increase of 15%, 2nd year increase of 10%, and 3% increases in the subsequent 3 years
•    Scenario 4: First year increase of 10%, 2nd and 3rd year increases of 10%, and 3% increases in subsequent years
•    Scenario 5: debt financing.  A $1.2 million bond issue in 2017 to cover construction costs for the 2018-2019 construction projects.  The first year would still require an initial 10% increase
and 4% increases in subsequent years.

Mr. Thacker stated that staff have discussed these scenarios and appear to prefer one of the multi-year scenarios.  Kevin Campbell, City Engineer, explained that staff looked at the City streets and culinary water system as potentially having a 100-year lifecycle to put together the project list.  Replacement of the water lines was prioritized, with replacement of cast iron and asbestos-cement (AC) lines having top priority.  Current street condition was also considered, as well as scheduled UDOT projects on Main Street.  Councilman McEwan asked if a 50-year model would be possible.  Mr. Thacker responded that staff anticipates funding for the first five years being available largely due to the ability to coordinate with two UDOT projects on Main Street.  It is not anticipated that funding would be available for a 50-year street lifecycle.  Randy Randall, Public Works Director, commented that ideally the City will find a way to fund closer to a 75-year lifespan, since it will be difficult to keep roads in working condition for 100 years.  Councilwoman Fillmore pointed out the need to encourage Deuel Creek Irrigation to replace and update irrigation lines.  Mr. Campbell stated that, with current funding, street work is at a 200-year level; an additional $1.4 -$1.7 million will be needed to reach the 100-year level.

Councilman McEwan stated it would be helpful to know how much was included in the water main replacement estimates for street patching.  Mr. Campbell responded that approximately 15-20% of the estimates are for patching.  Councilman McEwan said he would not want a large one-time rate increase to result in the City collecting more than necessary from residents due to poor planning.  Mr. Randall confirmed that, even if the City is not able to keep up with the street portion of the plan, it is important to ensure that water main replacement is funded – especially the cast iron lines.  The current plan is to replace cast iron lines within the next 20 years.  Mayor Cutler pointed out that, while improvements are needed, Centerville has an outstanding water system compared to surrounding communities.  The Mayor stated it would be his preference to implement smaller, consistent rate increases approximating the cost of operational inflation rather than larger increases every few years.  Mr. Randall commented that he expects to see a lot of emphasis placed on infrastructure at the State level in the next few years.

Councilwoman Fillmore stated she is most comfortable with scenarios three or four.  Mr. Thacker recommended the Council adopt multi-step rate increases by ordinance.  He also recommended an aggressive public education outreach approach to explain the City’s infrastructure needs and plans.  Mayor Cutler asked if it would be cost effective to implement a small rate increase this year and issue a bond next year in time for the 2018 projects.  Mr. Randall stated he does not feel the cost of bonding would be worth it.  Councilwoman Fillmore suggested the Council consider implementing steady increases for more than the proposed few years as an inflationary measure.  Mr. Thacker cautioned the Council against implementing rate increases for more than 3-5 years at a time.  He suggested the Council state in the ordinance that the rate will be reevaluated at the end of the 3-5 year period.  Councilman McEwan stated he prefers scenarios three or four, and repeated that he would like the cost of patching the streets separated from the estimates.  Councilwoman Mecham stated that she prefers scenario four over scenario three since she would not want the increase to exceed 10%.  The Council discussed the various rate increases that citizens will experience between last year and this year.  Councilman Ince suggested that a 6-6.5% increase over five years would give the City the same ending amount.  Mr. Lutz pointed out that a lot of the funds need to be available for 2018 projects.  The Council seemed to be in agreement that they are not interested in scenarios one or five.

LONG-TERM SICK LEAVE POLICY

Mr. Thacker reviewed again the proposed changes to the City’s Long-Term Sick Leave Policy to reduce financial liability, including an annual cap of 800 hours with a pay-out conversion rate of four-to-one at the current pay rate of each eligible employee.  Councilman Ince asked Mr. Thacker how accurate the reporting of sick days is among City employees, and whether or not employees are aware of how many sick days they currently have.  Mr. Thacker responded that sick leave balance is reported on each pay stub. He reviewed time-keeping policies and practices with the Council, and expressed confidence in payroll oversight.  Mr. Randall agreed that department heads do a good job of auditing and verifying time sheets.

Mayor Cutler commented that data collected by staff shows City employee benefits are, for the most part, on par with cities of comparable size.  He suggested the City could reduce particular benefits and offer a trade-off of a more tangible, useable benefit that would result in net savings for the City long-term.  Councilman McEwan pointed out that employee response would depend on the tangible benefit offered.  He said he would be interested in what staff members would consider a meaningful tangible benefit.

Mr. Thacker mentioned that the pay-out amount from the annual conversion of long-term sick leave can be placed in a retirement account by employees.  Staff calculated that employees would need to work for the City at least 14.2 years to accumulate 800 hours of long-term sick leave.  Mayor Cutler said he hopes the Council will adopt the proposed changes to cap liability now, and continue to look at additional changes later if desired.  Mr. Thacker suggested funding sources for the initial pay-out.

ADJOURNMENT

Mayor Cutler adjourned the work session at 6:53 p.m.

____________________________        ___05-03-2016________
Marsha L. Morrow, City Recorder            Date Approved

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Katie Rust, Recording Secretary