CC Minutes 2/2/13

Payson City Council Minutes February 2, 2013

 

 

February 6, 2013 City Council Minutes

Minutes of Payson City Council Meeting held at the Payson City Center, 439 West Utah Avenue, Payson, Utah on Wednesday, February 6, 2013 at 6:00 p.m.

ROLL CALL: Mayor Rick Moore; Councilmembers: Kim Hancock, Mike Hardy, Scott Phillips, and Larry Skinner; City Attorney Mark Sorenson, and City Recorder Jeanette Wineteer. Councilmember Ford and Manager Tuckett excused.

Mayor Rick Moore presiding.

PRAYER & PLEDGE OF ALLEGIANCE
Prayer offered by Councilmember Hardy and Pledge of Allegiance led by Councilmember Phillips.

CONSENT AGENDA
MOTION by Councilmember Skinner to Approve the Consent Agenda consisting of: approval of the January 2, 2013 City Council Minutes, approval of January 16, 2012 City Council Minutes, a
Resolution – UAMPS, IRP, and the Recognition Proposal – Fields. Motion seconded by Councilmember Hardy noting that the Chamber asked for approval of the design of the billboard on recognition. Motion carries.

COUNCIL AND STAFF REPORTS
Chief Runyan announced that the Police Department opened up a new Facebook Page so they can keep people informed. He said they have also held interviews for Reserve Officers, and are in the process of background checks, so hopefully will have some new Reserves on force.

Councilmember Hardy reported that the Chamber of Commerce held their planning conference and the Installation and Recognition Banquet will be held February 13th at noon at Peteetneet, so please RSVP. He said Payson might be hosting the Nebo Economic Summit that will occur in June. He reported that he and Councilmember Phillips attended the kickoff for The Tour of Utah, of which Payson will be a host city for the third leg of this event.

Councilmember Phillips said potholes are occurring and any reports are being tracked by Public Works Secretary Debbie Bushnell.

Mayor Moore reported on the Ratings Trip that he, Manager Tuckett, and Recorder Wineteer attended. He said they presented information to the Standard and Poors and a Bond insurer hoping that we could upgrade our rate and save more on the Water Bond Refunding we are going through. We hope to have the results of that trip by the 11th.

He said the Larry H. Miller Tour of Utah is coming to Payson and there are some links, information, etc. on their Website. It is a big international event and will be great publicity for Payson.

PRESENTATION OF SCOUT ATTENDANCE CERTIFICATES Councilmember Phillips presented an attendance Certificate to scout Tyler Batey.

CHAMBER OF COMMERCE – BUSINESS OF THE MONTH
Elaine Williams, Chamber Boardmember presented the Business of the Month to John Salimbene, Insurance Agent. She said he also started the Payson Leeds Group and explained what Leeds is and does for the business community.

CONCERT CONTRACT - AGREEMENT BETWEEN LONGHORN PRODUCTION AND
PAYSON CITY
Mayor Moore presented a proposed contract with Longhorn Production to produce a concert at the Peteetneet in June 2013.

MOTION by Councilmember Hardy to approve the Concert Contract between Longhorn Production and Payson City as presented. Motion seconded by Councilmember Phillips. Motion carries.

DISCUSSION REGARDING CITY COUNCIL PRIORITIES
Attorney Sorenson presented a list of last year’s priorities including those of the different departments. He asked the Council to discuss priorities as well as timelines for the budget process.

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February 6, 2013 City Council Minutes

Councilmember Phillips and Hardy both felt their priorities were the same: #1 Reduce Debt
#2 Use the savings from that towards one-time projects

Council felt that a Retreat would be beneficial and thought the Council could fine-tune the priorities at that time. They felt that possible times for a Retreat would be on a Tuesday evening from 4-10 p.m. or on Friday. Mayor Moore suggested March 5th and felt that Manager Tuckett could firm the day and time through email.

DISCUSSION REGARDING HERITAGE ENERGY
Electrical Superintendent presented a Power Point Presentation Brian Bagley and Dan Ellsworth from SESD put together:
SESD & PAYSON CITY
DISCUSSION OF PAYSON CITY ANNEXATIONS
OVERVIEW

 PAYSON CITY HAS ANNEXED PARCELS OF PROPERTY SINCE 1998
 THERE ARE MANY OF THESE ANNEXATIONS THAT CURRENTLY HAVE SESD

FACILITIES LOCATED WITHIN THEM TODAY
 PAYSON CITY HAS NOT PAID FOR SESD FACILITIES WITHIN MANY OF THESE

ANNEXATIONS
 THE FOLLOWING PRESENTATION WILL DISCUSS AND EXAMINE 3 OF THESE

ANNEXATIONS AS WELL AS SOME CHOICES AND POSSIBLE SOLUTIONS TO RESOLVE THE FINANCIAL AND POLITICAL ISSUES ASSOCIATED WITH ANNEXATIONS IN GENERAL.

TYPICAL ANNEXATION ISSUES

  •   SESD FACILITIES BUYOUT

  •   SESD CUSTOMER BUYOUT (10 years profits on those customers)

  •   SESD SEVERANCE COSTS

  •   SESD EASEMENTS COST (not in the 98 Contract)

  •   PAYSON CITY NEW CONSTRUCTION COSTS (to hook up those facilities once they are severed

    from the SESD system)
    PAYSON CITY ANNEXATION OVERVIEW OF 3 CURRENT ANNEXATIONS
    He presented several maps showing these proposed annexations and a breakdown of buyout costs:

    1. TURF FARM ANNEXATION

    2. ORLO LARSEN ANNEXATION

    3. SOUTH FARM ANNEXATION

    ANNEXATION COMBINED COSTS
     3- ANNEXATION COST SUMMARIES total $2,498,244.93

    POSSIBLE OPTIONS
    OPTIONS MOVING FORWARD

     PROCEED WITH BUSINESS AS USUAL

    •   BUY OUT OF SESD FACILITIES COSTING MILLIONS OF DOLLARS

    •   BUY OUT OF SESD CUSTOMERS

    •   PAYSON CITY TO PAY FOR SEVERANCE COSTS INCLUDING EASEMENTS

    •   PAYSON CITY BUILDS NEW FACILITIES TO SERVE CUSTOMERS IN ANNEXED

      AREA COSTING MILLIONS OF DOLLARS

    •   INCREASED COSTS TO DEVELOPERS & RATE-PAYERS

    •   EACH ENTITY WILL CONTINUE TO HAVE HIGH IMPACT FEES, DUPLICATION OF

      SERVICES, EMPLOYEES, RESOURCES, EQUIPMENT, ETC.  INTER-LOCAL & SERVICE BOUNDARIES

      •   BOTH PARTIES WOULD AGREE UPON SERVICE BOUNDARIES

      •   AGREE TO INTER-LOCAL WHERE-IN SESD WOULD CONTINUE SERVING ITS

        CUSTOMER & ANY NEW CUSTOMERS WITHIN ANNEXED AREAS

      •   SESD WOULD PROVIDE A FRANCHISE TAX TO THE CITY FOR NEW

        CONNECTIONS IN ANNEXED AREAS

      •   PAYSON CITY COULD CONTINUE TO ANNEX WITHOUT BUYING OUT SESD

        FACILITIES

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 BOTH ENTITIES COULD CONTINUE TO GROW, INDEPENDENTLY OF EACH OTHER

 AN EXAMPLE OF THIS WORKING IS DIXIE-ESCALANTE  MERGING PAYSON POWER & SESD

 BUYOUT OF SESD FACILITIES, SEVERANCE & SESD CUSTOMERS WOULD BE ELIMINTATED

 DUPLICATION OF SERVICE, RESOURCES, EMPLOYEES & FACILITIES WOULD BE ELIMINA TED

REDUCTION OF IMPACT FEES THEREBY STIMULATING DEVELOPMENT GROWTH

  •   STABILIZATION AND REDUCTION OF KWH RATES FOR ALL RATE PAYERS

  •   ANNEXATIONS & GROWTH COULD OCCUR WITH LITTLE NEGATIVE EFFECT TO

    EITHER ENTITY

  •   FLEXIBILITY AND EFFIENCY OF SYSTEM PLANNING

  •   ABLE TO BETTER HANDLE NEW FERC/NERC RULES IN THE FUTURE

     ATTORNEYS, LAWSUITS & BOTH ENTITIES LOSING

 SESD COULD BE FORCED TO LEGAL ACTION TO RECOUP THE FACILITIES

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CONCLUSION

COSTS OWED BY PAYSON CITY

  •   BOUNDARY DISPUTES & RIGHT-TO-SERVCE DISPUTES

  •   IMPACT FEES STAY HIGH FOR BOTH ENTITIES

  •   DUPLICATION OF EMPLOYEES, SERVICES, RESOURCES & FACILITIES COSTING

    EACH PARTY AND ITS RATEPAYERS MORE

  •   ALL ANNEXATIONS PETITIONED BY SESD
    RATES WOULD HAVE TO INCREASE, HURTING ALL PUBLIC POWER

    CUSTOMERS WE BOTH SERVE

     WE BELIEVE THE BEST CHOICE IS TO WORK TOGETHER TO BUILD A MORE EFFICIENT, RELIABLE, SERVICE ORIENTED POWER COMPANY

     WE BELIEVE THAT THE COST OF SERVICE STUDY, BUSINESS PLAN & ALL OTHER STUDIES LEAD TO THE CONCLUSION THAT MERGING MAY BE THE BEST CHOICE FOR BOTH ENTITIES.

Mr. Crump explained that Ryan Bagley came up with the costs based on cost of replacement, and he did notice that one of the items was for a larger line that is actually in place at this time. Councilmember Hancock clarified that the contract we have says we will pay a depreciated cost of replacement.

Attorney Sorenson read State Code 10-2-421 Electric utility service in annexed area – Reimbursement for value of facilities.

  1. (1)  If the electric consumers of the area being annexed are receiving electric utility services from sources other than the annexing municipality, the municipality may not, without the consent of the electric utility, furnish its electric utility services to the electric consumers until the municipality has reimbursed the electric utility company that previously provided the services for the value of those facilities dedicated to provide service to the annexed area.

  2. (2)  If the annexing municipality and the electric utility cannot agree on the value, the state court having jurisdiction shall determine the fair market value of those facilities, and the municipality shall reimburse the fair market value, as the determined by the court, to the electric ut5lity company.

Amended by Chapter 206, 2001 General Session.

He said as we look at annexation areas, there are a lot of undeveloped areas. SESD does not have the benefit of any of that development, and wouldn’t have a lot of growth which might occur if it were annexed.

Mayor Moore noted that would still owe SESD $2Million if it were depreciated at 50%. Councilmember Phillips noted that impact fees would take care of the majority of that.

Mayor Moore asked Superintendent Crump for his personal opinion. Mr. Crump said Payson City needs to be very definitive. Payson City should have control because as you look at revenue vs. revenue, Payson has more. So Payson should become very aggressive in any agreement. This cost analysis shows him where SESD is coming

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from, and they are being very aggressive and want their reimbursement number as high as they can make it, and that is there mentality. Our mentality should be we want to annex with the least cost as we can. This issue will have to be taken care of before we can agree.

Councilmember Phillips felt that SESD will diminish as annexation occurs and Strawberry Water Users should never have split because they were one entity and designed to help each other. Without that help, it is not fair to the cities.

Councilmember Hardy said we cannot dwell on the past we have to work on what it is today.

Attorney Sorenson said the existing contract has a formula, but he pointed out that the value should be determined by a 3rd party not either Payson City or SESD, and State law states that if it cannot be agreed upon it will be decided by a third party (court). That is how you get to any fair market value.

Power Plant Superintendent Brian Stevenson noted that SESD has spent a lot of their focus on rebuilding those areas.

Councilmember Skinner asked for clarification for why, in going forward, a developer would not pay for these costs.

Mr. Crump said there was an annexation involving the Ballard’s and the cost to buy the area from the City was $300,000 (for them to widen the roadway), and an additional $300,000 to SESD for them to move and put underground the line that ran parallel. So it doubled the cost to put in their facility and therefore they didn’t develop.

Councilmember Skinner wondered why impact fees wouldn’t cover those costs.

Planner Spencer explained that when we were growing to the south, it was a development requirement for the developer to negotiate those costs with SESD through the development approval process. The concern now is with the change in economic environment we might not have that same luxury.

Attorney Sorenson said this issue of the cost of buyout of services, is actually a bill before the legislation this year. So it might be determined anyway.

Ross Huff wondered about revenue studies done regarding the growth that is bound to happen with the temple going in, and where that income from the growth would go.

Mayor Moore said we plan to double our population by 2020 and if there is a merge, it would be Heritage revenue. However, the City would receive 6% in the form of utility tax on electricity sold within the boundaries.

Councilmember Phillips felt that the return is on commercial and industrial development and it takes a longer time with residential. He said as Spanish Fork and Salem annex they will take some customers away from SESD or Heritage. Councilmember Phillips just wondered why we couldn’t go back to the last agreement, and asked what the reason was for that new agreement.

Russ Hillman thought the latest agreement was just to pull the workers together.

Councilmember Phillips agreed and thought that new agreement was to “work together’ then somehow it has evolved to a merger.

Superintendent Crump said if we stay with the existing agreement we would need to firm up a labor agreement, dispatching agreement, etc. along with boundaries.

Discussion was held regarding the options on this SESD presentation.

Mr. Crump also said that UAMPS would like to know the Council’s top 5 concerns with the Joint Action Agreement that they drafted.

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Councilmember Phillips reiterated that his concern with UAMPS is for them to make good on their 2001 promise.

Mr. Crump said he would relay that concern to UAMPS again and also felt that City control of Heritage would be our second concern.

Planner Spencer noted that those costs listed do not have to be paid upon annexation. Those annexations could still develop a good portion of their property and not affect SESD at all, if we have lines in the area.

Attorney Sorenson re-read the state code and explained that we cannot take over existing but if we have lines we are obligated to provide those services.

Councilmember Skinner clarified that there are other revenues that come into the general fund from the electric utility above the 6% utility tax in the form of transfers.

WORK SESSION HERITAGE VILLAGE DEVELOPMENT Planner Spencer presented the following staff report:

The applicant, Byron Bastian, is requesting the City Council consider various changes to the Heritage Village development. The development is located south of 1130 South and north of 1400 South between 1050 West and Turf Farm Road. The development is a mixed use development that includes ninety eight (98) residential units geared toward active adult or retirement living and a small portion of commercial property along Turf Farm Road, an arterial status road in Payson City. The retirement units consist of thirty (30) single family detached dwellings and thirty four (34) two family attached residential structures for a total of ninety eight (98) units.

The financial institution that owns the property is interested in selling the project. Mr. Bastian is representing a developer who is interested in purchasing the project and would like to discuss with the City Council some potential changes to the original project approval. In short, the applicant is requesting the City Council remove the 55+ age restriction and consider new housing product for the project. At this time, all other aspects of the development will remain as previously approved.

Analysis

The applicant is requesting direction from the City Council regarding proposed changes to the Heritage Village development. The information obtained at the meeting will assist the applicant in making a final decision regarding the purchase of the development.

Active Adult Community (55 years and older)

The development was designed for individuals who have retired or are nearing retirement age. Building pads, rather than lots, were incorporated into the project to allow an open feel and to maintain a consistent landscape design through maintenance of common area by a Homeowner’s Association (HOA). The project amenities include trails, walking paths, benches, gazeboes, and a clubhouse with services for mature adults.

Throughout the development review process, compromises were made to accommodate the density and design desired for an active adult community. Removing the age restriction will allow the applicant to target other segments of the population, including growing families. Because the development was designed for retirement age individuals, introducing younger families into the development without some changes to the development approval could negatively impact the development and surrounding neighborhoods.

The City Council has considered similar requests in the past. The following represents a list of concerns discussed at those meetings. The applicant will need to demonstrate how these issues will be resolved.

 Density. To achieve the desired density, the original developer (Otto Belvedere) requested approval of a zone change and use of an overlay zone. At that time, the developer demonstrated the increased density was necessary to develop a sustainable retirement community. In exchange for the increased density, the developer agreed to develop an active adult community with a variety of housing styles and amenities, among other things. It is unlikely the City Council would have approved this density for a typical single family development available to all age groups. The potential buyer is entitled to develop the project as described in the development agreement or request modifications to the approval.

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 Building Pads v. Building Lots. The applicant intends to maintain the same density and building pad layout. The applicant will need to address the following issues that may be presented by growing families residing in the development:
o Recreational Vehicle (RV) Parking – The City Council excluded this requirement for the retirement

community based on the applicant’s willingness to include restrictions in the project CC&R’s regarding parking of recreational vehicles in the development. The applicant will need to address how RV parking will be regulated.

o Storage Areas – It is common for families to want a backyard for playground equipment, gardens, pet shelters, and as general storage areas. The applicant will need to demonstrate how these uses will be accommodated in the development or how the Homeowner’s Association (HOA) will regulate these uses.

  •   Pedestrian Facilities. The City Council approved a modified street cross-section with sidewalk on only one side of the street in exchange for an internal trail system geared toward more communal type senior living. The introduction of families will generate a need for safe walking routes and additional pedestrian facilities. The City Council may require additional sidewalks to be installed.

  •   Off-Street Parking. To increase the size of the building pads, the setback requirements were modified. The reduction in the front setback limits the potential for tandem parking in the driveway. The modified setbacks may be acceptable for an active adult community; however, the reduction may present challenges for families that have multiple vehicles. This may result in on-street parking which could lead to public safety risks. The applicant may be required to increase the depth of the limited common area (driveway) in front of the units to accommodate parking in the driveway.

  •   Amenities. The amenities in the development agreement may not be adequate for younger families. The amenities contemplated in the development are more passive in nature and do not include recreational activities such as swing sets, playground equipment, activity areas, etc. The applicant and City Council will need to determine the appropriate amenities if the age restriction is lifted.

  •   Homeowner’s Association (HOA). The applicant will need to provide information regarding the organization of the HOA, the obligations of the HOA, and demonstrate how the HOA will be self- sufficient.

    Building Design

    The applicant is considering changes to the housing product for the development. The building elevations and floor plans included in the development agreement may not be available to the applicant; therefore, the applicant will need to provide new plans. A theme has already been established with the construction of the clubhouse, the original model home, and the dwellings constructed by Sierra Homes. Rather than changing the architectural character to the project, staff would suggest the Bungalow style or similar architectural design be incorporated into the design of the new product.

    The applicant has provided an elevation that could be used for the twin home structures (see attached). Once the City Council determines an acceptable style for the housing product, the applicant will prepare additional elevations for approval by the City Council. If the City Council is inclined to modify the building design requirements, the development agreement will need to be amended to include the housing product acceptable to the City Council.

    Recommendation

    The applicant is requesting direction from the City Council regarding the proposed changes to the Heritage Village development. If the City Council is willing to modify the age restriction, staff will work with the applicant to properly address the concerns listed above and forward the revised proposal to the Planning Commission and City Council for consideration. The proposed changes may require amendments to the Heritage Village Development Agreement and the project CC&R’s. Any changes to the development agreement must be approved by the City Council.

    Byron Bastian wanted to see what the City Council’s largest concerns with his request were. They felt that the marketability of the 55+ Community would take too long to absorb the 98 units approved. He said there were two homes that took 770 and 334 days to sell.

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Discussion was held regarding sidewalks, density, amenities, etc. Council felt that staff should provide Mr. Bastian with all of the minutes and discussions held in the past regarding this development, because those are still our concerns.

Councilmember Hardy said we have been in the middle of a recession and felt home sales would probably pick up.

Councilmember Hancock said that initially we allowed certain things because we were expecting the 55+ community and so if they come back and say they want to take that requirement off, how are they going to compensate for those things that were given. Councilmember Hardy agreed and said we have not said that 55+ is not an option, but asked for some solutions.

Planner Spencer feels that the applicant could provide solutions for some of the things listed, but the question is density.

ADJOURNMENT
MOTION by Councilmember Phillips to table the Closed Session and adjourn. Motion seconded by Councilmember Hardy. Motion carries.

Council adjourned at 8:20 p.m.

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