July 10
CITY OF HIAWATHA
CITY COMMISSION MINUTES
MONDAY, JULY 10, 2006
5:35 P.M.
HIAWATHA CITY HALL
723 OREGON ST.
1. Pledge of Allegiance/ Call to Order
The Hiawatha City Commission met in regular session Monday, July 10, 2006 at 5:35 p.m. with Mayor Gernon, Commissioner Collins and Commissioner Gamble present. Commissioner Schmitt and Commissioner Shamburg were absent.
2. Approval of minutes of the June 26, 2006 City Commission meeting.
Mayor Gernon said that there was a correction that needed to be made on page 3, section 6, concerning the publication and public protest period. It should read that 4% of the electors could protest and require an item on the ballot on a Sales Tax revenue bond, and 5% of the electors could require a vote on the general obligation bond.
Commissioner Gamble made a motion, seconded by Commissioner Collins, to approve the minutes with corrections as noted. Motion carried, 3 ayes.
3. Presentation of petitions, public comments, memorials.
a. Introduction of new City Administrator, Elizabeth Lynne Ladner.
Mayor Gernon introduced Lynne Ladner and welcomed her to Hiawatha.
b. Benner Memorial
City Administrator Lynne Ladner said she was looking at July 17, to have the memorial dedication ceremony.
Mayor Gernon said he would be gone that week.
Administrator Ladner changed the date to July 24. She indicated she would put it in the newspaper. She said that the Benner brothers would be unable to attend, but that their stepmother would attend.
Mayor Gernon also made the announcements that the Wal-Mart purchase has been completed. He also said that the city had received a thank-you from Mike Williams and Jim Barrand, the people in charge of the Mud Run event held at the Saddle Club Arena.
4. Post Lantern Streetlight Project - Brian Kingsley.
Brian Kingsley provided an update on the project. The current estimate for the project is $1.6 million. They have not gone through any bid letting, and would expect there to be some contingency and that they could come in under this figure. He said that he understood that at the last meeting the city had come up with around $1.3 to $1.4 million that the city thought the sales tax revenues could generate for repayment of the bonds.
At the committee level they would have two to three additional meetings. The first meeting they would meet with the contractor to try to identify any cost-saving measures that the city could take as far as taking responsibility for doing portions of the project in a cooperative effort with the contractor. One of the examples they have considered is pre-purchasing the light fixtures, which would cut out all of the middlemen to save the markup on the fixtures. The city would supply the fixtures to the contractor.
Once they get through the meetings, they plan to bring back before the council to consider what the next steps are, how to go through the bid letting process and how the organization of the bid is going to be structured. There has been some discussion of the city doing some significant portions of the project. They will then present the ideas to the city with their recommendations.
Kingsley then offered to answer questions.
Commissioner Collins asked him when he would expect to be able to bring back all the information to the commission.
Kingsley replied that their first meeting is scheduled next week, and they plan to have a contractor and two suppliers of fixtures there at that meeting. He said that they should be able to have recommendations on that within one to two weeks. The funding will drive the schedule from here on out. When they find out how much money they have to spend, they will custom fit the project to get to that level.
Mayor Gernon said that Kevin Cowan at Gilmore & Bell, projected that at current interest rates, the G.O. Sales Tax Bond would amount to $1.45 million, while the Sales Tax Revenue Bonds would be $1.413 million. These figures take in to consideration a conservative 1% per year growth on the sales tax, which has been historically documented, plus the increase on the new Wal-Mart, which has been 7% to 11%. He was using the 7% figure for his projection. This amount is higher than originally thought, but nowhere near the $1.6 million requested.
Mayor Gernon said that the Commission needs to make a decision on the type of bond they want to go with, but he felt they needed to have a full commission here to do that. He said they would schedule that in two weeks.
Kingsley said that he would come back in two weeks. He said he would try to get the meetings scheduled. If they knew the city would potentially commit to around $1.4 million, they could take that information back and discuss that with the committee.
Mayor Gernon felt that these were reasonable projections.
No further action was taken.
5. Downtown Streetscape Project bid consideration – Brian Kingsley.
Brian Kingsley mentioned a letter to City Administrator Lynne Ladner concerning the bid letting. This letter had not been available when the packets were put together.
Kingsley discussed the estimates provided in the past, which came from unit averages associated with each detailed item. The estimated cost totaled $961,000 as a base plus a 10% contingency, which brought the estimate to $1,058,000. The granite tops which were not included increased the estimate by about $10,000. The base estimate therefore was about $971,000.
We received three bids, ranging from $981,707.00 to $1,096,701.64. The low bid was $981,701.00 from Bottorff Construction. Kingsley said they had had a recent experience with Bottorff Construction in Troy, Kansas, which was also a KDOT Traffic Enhancement Project. He said that they have performed similar work on the streetscape project in Atchison, Kansas, and believes that they are qualified and should do a great job. Kingsley recommended that the city award the contract to Bottorff Construction.
Kingsley explained that the city would be responsible for 20% of the $668,042, which was the KDOT approved items. KDOT would pay the remaining 80%. The $306,065 unit costs are associated with the water line. Items 58 and 59 are nonparticipating items totaling $7600. These are granite plaques and planters. The grand total of the bid was $981,707.
City Administrator Lynne Ladner said that the city’s overall match would be $447,273.40.
Kingsley said that this did not include any of the donations from the downtown businesses or other donators. He said that there is some effort going on for these donations at this time.
Ted Starr, Chairman of Hiawatha Redevelopment Inc., said they are happy with the bid. He said that Hiawatha Redevelopment Inc. still has about $26,000 to help with funding.
Kingsley said that he has already sent a number of documents into KDOT for their approval. Tonight, he needs the city to make a recommendation to approve the bid from Bottorff Construction in the amount of $981,707, dependent on KDOT concurrence. The city would need to send a letter requesting their concurrence. He said that the city administrator has a draft of that letter. KDOT is waiting on two documents pending that action, a copy of the recommendation of B.G. Consultants to the city and the bid tabs, and the letter from the city administrator.
Commissioner Collins made a motion, seconded by Commissioner Gamble, to approve the bid of $981,707 from Bottorf Construction, contingent on KDOT approval. Motion carried, 3 ayes.
Kingsley gave an update on the schedule, saying they have about one week after KDOT receives the letter, the city should get approval. Bottorff Construction can then begin working on the bonding and executing the contracts. Within two to three weeks of that, they should be scheduling the preconstruction conference. After the meeting with the contractors, it would be a good idea to have a meeting with the public to update them.
Mayor Gernon thanked Ted Starr and everyone on the committee for their hard work.
No further action was taken.
6. Informational and Question and Answer regarding joint explanation for new water sources for the city and NEK Bio-energy – Brian Kingsley.
Brian Kingsley introduced Chuck Bebermeyer, a board member of NEK Bio-energy group.
Bebermeyer said that their purpose at this meeting was to provide information to the commission on the Bio-refinery, and all the benefits that it would bring to the community. He said it would improve tax benefits and bring jobs to the area. The one thing that they need to do is to bring all the utilities in for the Bio-refinery, one of which is water.
Brian Kingsley clarified that he is working tonight for NEK Bio-energy. He reminded the commissioners that they had previously discussed the possibility of a joint project as development as a Brown County industrial site. He said that they were leaning toward a bio-refinery, which is a bio-diesel facility combined with an ethanol plant. The bio-diesel part of the facility would require only about 50 gallons per minute, 24 hours a day. That would mean only a small diameter line to Hiawatha, and would probably not overtax Hiawatha’s current system. The ethanol part would require a lot of water, 650+gallons per minute 24 hours per day. Multiple wells would be required to handle this. NEK Bio-energy would be running two miles of waterline, whether they would come to Hiawatha or whether they would need to go a two mile radius around the Padonia site.
Kingsley asked Rick Koenig, City Water Superintendent, to verify that the city has five wells right now, relying heavily on two of those wells. He said that Hiawatha is looking at expansion and growth. He was proposing to explore a joint project, with the feasibility of procuring another water source, probably from a feasibility standpoint, of two miles outside of city limits. The geologists are saying there is an aquifer north of Padonia that is deeper and lower in nitrates. The NEK Bio-energy group is looking at exploring this aquifer whether or not the city of Hiawatha goes in on it. He said that Hiawatha would be ahead to get in on it. Kingsley said that they are asking for some sort of documentation of commitment. He said that there had been some thought that it may be in everybody’s best interest to have the City of Hiawatha actually own, operate, and maintain the wells, and possibly even a treatment facility, and supply water to the bio-refinery at a wholesale rate rather than a retail rate. That is all part of the negotiation that needs to take place in the future.
Kingsley said that he is asking for an agreement in the form of a letter of intent, or a memo of understanding, that he does not need a binding contract at this time. This is to document the support on a city level so that the investors in the project know that the city is knowledgeable of the project. The statement that they would like the city to consider is that if it is determined to be mutually beneficial to the city, the city would participate in the procurement of the watershed.
Kingsley said that in order for the city to participate, they need to put something in the budget for next year. He suggested an amount of $200,000 just to think ahead.
Kingsley asked if any questions.
Commissioner Gamble asked Rick Koenig, Hiawatha Water Superintendent, how many gallons per minute it takes to operate the City of Hiawatha right now, and what their capability was.
Koenig replied that it currently takes about 1000 gpm, 700 of which comes from the north wells. He said that the city has five wells, three north of town. Only two of the five wells are considered good wells, both of which are north of town.
Commissioner Collins asked Koenig how many gallons we use per day, to which Koenig answered that we currently use 600,000 gallons per day.
Commissioner Collins said we could not supply that much for the bio-refinery as it is, to which Koenig agreed. The south well was built a couple years ago to replace two old wells that were abandoned. Koenig said that if we were to lose one of the north wells during hot weather, it would put a strain on the system.
Commissioner Gamble asked how far the lines would have to be before they could connect in with the Bio-energy wells before they would do us any good.
Koenig said that currently our well lines go four miles north.
Commissioner Gamble asked the NEK Bio-energy group about the proposed ethanol plant north of Reserve and what effect will it have on the bio-refinery with respect to ethanol.
Bebermeyer said they are looking at a location five miles east of Reserve to furnish their water, basically out of the Missouri River area, and would not be involved in this aquifer. He said that the 650 gpm allows a lot of cushion. The latest estimate is actually 445 gpm.
Commissioner Gamble asked if the Falls City group is able to secure their plant north of Reserve, would the NEK Bio-energy group still consider putting in the bio-diesel plant.
Bebermeyer said that the probability is that they would only have one in the area.
Commissioner Collins wondered how far $200,000 would even go.
Kingsley said that it might not be that amount, that it could be more or less. The exploration itself is not a $400,000 project. He said that it would be beneficial to the city to own it and sell to the business rather than the business own it and sell to the city.
Commissioner Collins said that in the future we would probably be looking for new wells.
Kingsley said that the geologists have indicated this would be a higher yielding aquifer with lower nitrates. The bio-refinery needs pure water, so they would likely have a process plant.
They are looking for statement of intent that the city feels it would be beneficial to the city.
Commissioner Collins asked for verification that the project will begin in 2007. He said that he did not have problems with commitment himself.
Koenig said that our nitrate situation is good right at the moment. The south well was abandoned which was causing most of the nitrate problems. His initial thinking on the water plant was that he didn’t want to get involved in that if possible. He felt that it would cost more to operate the plant.
Koenig said that currently we are a 4-A, Class II system. The addition of a water plant would change our classification. He said that it is much more economical to chlorinate and pump into a reservoir than it is to have a plant. We may have to come to that in the future.
Kingsley said that a water treatment facility would be in the best interests of the city.
Commissioner Gamble said that he was not opposed to the exploration of the aquifer. He said that they would not be able to vote on it tonight because they did not have a quorum of voting members (with Mayor Gernon abstaining from voting because of his involvement with NEK Bio-energy group).
Dean Tollefson wondered if signing a letter with NEK Bio-energy would keep the city from future involvement with a different group.
Kingsley didn’t feel that it was a concern.
Tom Armour asked Kingsley if the 17th or 24th of July be alright for the commissioners to act on this.
Bebermeyer replied as soon as they could get it would be fine.
7. CDBG Grant.
Larry Hopkins with Hernley Associates talked about the options of the CDBG grant. He said that for the Housing Grant, a survey west of downtown, one south of Oregon and one north of Oregon, would have the best opportunity of obtaining a housing grant. He said that the application is due in less than two months. A Community Development Grant would have more time, to help Maple Heights, and that their firm is dedicated to getting something done. He said that more money has been being given to community development than housing. He said that the money allocated to the housing program in Kansas has been shrinking, and that only one in six to one in seven projects are funded in the State of Kansas.
He said that there would be a greater chance of actually procuring a grant for the nursing home. He said that one in two or three grants have been given for community development in recent years.
Mayor Gernon asked about matching funds on the housing grant.
Hopkins said that matching funds are not required. He said that it doesn’t seem to make a difference, that it is based more on need.
Mayor Gernon asked Hopkins about their fees for preparing the grant.
Hopkins said that Hernley Associates would charge $750 for writing the grant proposal sent to the state.
Hopkins said that an engineer would have to be hired if the city went with a grant for the nursing home, but that an architect would not be necessary for that type of project. Those programs do not require a match. If the city would fund city inspections, that could be used as matching funds.
Mayor Gernon said that $300,000 was mentioned as a cost to do the work, but the nursing home would only be eligible for $118,000, based on occupancy.
Hopkins has found some other funding sources that would be available as a grant and a low interest USDA loan. He thought that about 15% to 20% could be brought in as a grant, and the rest could be financed as a low interest loan. He said that that could be used to make up the majority of the remaining funds necessary to do the project. He said that their estimate was actually only between $245,000 and $265,000.
Commissioner Collins said that Maple Heights had said that they could not pay back a loan.
Hopkins said that they would really like to help the nursing home. Perhaps they could do the main lines for now and the rest at a later time.
Commissioner Collins said that maximum amount available would be $112,000 according to current occupancy.
Hopkins said that they could also obtain funds from USDA.
Commissioner Collins was concerned about just doing “a band-aid job.”
The owners of Maple Heights are still Lafayette Life Plan, according to Gene Atland, representative from Maple Heights Nursing Home.
Commissioner Gamble said that he didn’t think we had ever used a CDBG grant on a business. He said that Maple Heights has changed ownership many times over the years, and wondered if the new owners would be doing any remodeling. He felt we should use the grants on something that the city as whole would use.
Atland said that there are about 80 employees who work at Maple Heights that either live in or near Hiawatha and shop in the city of Hiawatha.
Commissioner Collins was concerned as to how long it would take to find out who actually owned the property at Maple Heights.
City Administrator Lynne Ladner said that some research today indicated they could find out who the owners are from the state, that she now has the phone number of the person there that could tell them. She said that if it was indeed Lafayette Life Plan, that was the same company who came to the city in 1999 for an industrial revenue bond, then it hasn’t changed hands in the last seven years. She said that according to a deed in her file, the City of Hiawatha technically is the owner.
Atland explained that there is another corporation who may be buying the nursing home but had not yet done so.
Mayor Gernon said that they need to make a decision tonight if they are to apply for any of these grants.
Hopkins said that if they apply for a housing grant they need to know tonight. The grant could also include demolition. He thought that Hiawatha had a 50% chance of getting a housing grant because there had not been any issued in the northeast part of the state recently.
Mayor Gernon expressed concern that the amount available in the grant for the nursing home would be only one-third of what was actually needed to fix the problem.
Hopkins explained that it may only take up to nine months to fix the plumbing for the initial grant and they could feasibly apply year after year until the problem was taken care of.
Hopkins said that on the USDA loan, there is only a $4 per month payment per thousand, so on $400,000 would be only$400. He said that funding is based on the inhabitants not the company.
Both Commissioner Gamble and Commissioner Collins were in favor of the housing grant.
Commissioner Collins made a motion, seconded by Commissioner Gamble, to apply for a Housing Grant through the CDBG. Motion carried, 3 ayes.
8. Traffic Light replacement on Oregon Street.
Rick Koenig presented some information about replacing the traffic lights during the streetscape program. He said that the existing poles will be removed during the streetscape project. The cable is very old and in poor condition. During construction, it will have to be moved and will probably not stand up under the moving around. The fixtures are in poor condition and have had problems already. They had to make repairs in 2005. Koenig said that funding is available for the project.
Koenig explained that the LED fixtures would last longer. The estimated cost of these is $10,154.
Mayor Gernon asked for verification that the amount was for just the fixtures.
Koenig said that it would cover everything but brackets and possibly a few other small things.
Mayor Gernon asked if this needed to be done during the streetscape project.
Koenig said that it would be best to do it then.
City Administrator Lynne Ladner said that because the estimates came in lower than originally planned for, she thought it could even be included in the original budget. She said that they would need authorization to get bids on this.
Administrator Ladner said that otherwise, the budget for a truck could be used, since no truck purchases are planned for this year.
Commissioner Gamble told Koenig to get three bids if possible.
Koenig said he would call some firms and get at least one more bid.
No further action was taken at this time.
New Business.
9. N.E. Kansas Enterprise Facilitation Invoice.
Commissioner Gamble made a motion, seconded by Commissioner Collins, to approve the N.E. Kansas Enterprise Facilitation invoice for $2500. Motion carried, 3 ayes.
10. Return of Money from HFED – Refund of Survey Charge from Wal-Mart
City Administrator Lynne Ladner explained that Wal-mart had refunded the amount charged for the survey of the property because it was incorrect. The funds were wired back to HFED’s bank account, and now needed to be returned to the city.
Commissioner Gamble made a motion, seconded by Commissioner Collins, to authorize HFED to return the money to the City of Hiawatha in the form of a bank draft. Motion carried, 3 ayes.
11. Approval of payment to Gilmore & Bell for professional services on Hemisphere Bond.
Commissioner Collins made a motion, seconded by Commissioner Gamble, to approve the payment of $10,158.63 to Gilmore & Bell. Motion carried, 3 ayes.
12. Approval of payment to HYSA for Spring Soccer Officials reimbursement.
Commissioner Collins made a motion, seconded by Commissioner Gamble, to approve the payment of $1710.00 to HYSA. Motion carried, 2 ayes. Mayor Gernon abstained.
13. CONSENT AGENDA
a. Appropriation Ordinance #1096 in the amount of $72,273.41.
City Administrator Lynne Ladner said that the corrected amount is $72,073.35 due to voiding of duplicate checks.
b. Payroll Appropriation #1061 in the amount of $45,585.25.
c. Utility Refunds in the amount of $428.58.
Commissioner Gamble made a motion, seconded by Commissioner Collins, to approve the consent agenda as corrected. Motion carried, 3 ayes.
14. Lynne Ladner, City Administrator.
City Administrator Lynne Ladner thanked everyone for making her first week a great week.
She said that she received the preliminary audit for 2005 today, as well as some preliminary budget figures. She will set a work session next week.
15. Mayor Gernon.
16. Com. William Collins.
17. Com. Curtis Gamble.
18. Com. Marianne Schmitt.
19. Com. Steffen Shamburg.
20. Adjourn.
Commissioner Gamble made a motion, seconded by Commissioner Collins, to adjourn. Motion carried, 3 ayes. Meeting adjourned at 7:17 p.m.