Meeting of 1998-8-31 Special Meeting

Baker said at the last Council meeting, several projects were discussed for a total of $54 million. Baker asked Ihler to develop three packages for Council consideration, and those were distributed, with costs of $60, $70 and $80 million over. The projects discussed from the last meeting are those which staff considers priority projects that must be accomplished during the next seven years; a package was developed totaling $60 million with those projects and two important drainage projects to bring it to $60 million; the $70 million package includes the projects from the $60 million package and added some water line replacements and major arterial street improvements for the $70 million; the $80 million package includes the $70 million package and adds more street work, the fire station, park improvements, dam improvements, and major arterial street improvements for the $80 million. The Finance Director was asked to look at each package and make recommendations for funding each package.

Mayor Powell said some of the items from a previous list were reviewed by staff and deleted because that should come under funding other than CIP. Ihler said those projects were the container services for Republic Paperboard Company and installing a plant chlorine dioxide system to address the turbidity due to the rule EPA is publishing, but the majority of that cost is for chemicals and after discussion with Baker it was felt those costs should be put into an annual budgetary type position versus capital improvements, but it will need to be in the future budget.

Jerry Ihler, Public Works/Engineering Director, said the $60 million list contains the first phase of the sewer rehab project. It assumes that the $600,000 from the appropriated Douglas Avenue Project would be available for year two of the sewer rehab. Seven year program estimate is $15.2 million and additional funds are needed for the initial year because of the equipment purchases. Second project shown to begin construction in July 1999 is a maintenance building at the landfill; 100 x 60 ft. existing building is in a location that will be excavated for cells two and three.

Mayor Powell asked the proposed location of the new building. Ihler said they looked at going to the north but there were problems with putting it on existing landfilled areas, so it may be placed across from the existing pit and county line road on the Silk property where the City has purchased 420 acres.

Shanklin said he felt $50 a square foot for the landfill building was out of line. Ihler said $50 a square foot was used for the estimate and it would include some parking area. Shanklin said he did not think the City should be telling the taxpayers to spend $50 a square foot for a metal building comparable to the existing building, and the estimates should be as close as possible because they would not be able to do everything and that the members all had to be in agreement to be able to have a tax pass. Mayor Powell said the newspaper should be in agreement, as well as all the council members, to pass a tax.

Ihler said the third item is to expand and rehabilitate potable water pump station one which serves the west high industrial zone, Goodyear, Republic Paper, Bar S and Pecan Valley. Once Republic begins receiving 1.5 million gallons, along with Bar S and any future expansion, that will maximize what can be delivered by pump station one to the industrial area. Recommendation is to upgrade the pump station to be able to deliver a greater volume to the industrial park. Shanklin asked if staff had contacted Hutchinson, KS to see how much their Republic plant is using and Ihler said no. Ihler said several construction meetings were held with paper company representatives and they feel very comfortable that they will be using the 1.5 million.

Ihler said the next project is the upgrade of the plant chemical disinfection and EPA may establish a law in June 1999, and we would like to be in operation by June 2000. It is a Clean Air Act compliance issue requiring any facility that contains one ton chlorine cylinders, which we use at the water and wastewater plants, we must have an air tight facility that should there be a chlorine leak that it would all be held within that facility. Shanklin asked if you could go to a 1,000 lb. cylinder. Ihler said he thought it would apply to any chlorine container. Ronnie Graves said he did not know if chlorine cylinders were available in other sizes but smaller containers would result in changing them frequently. Shanklin said $2.5 million is a lot of money. Graves said he could check to see if an alternative approach could be used. Beller said the past election was for the $62 million infrastructure and felt there would be strong opposition to including a lot of other items, such as $450,000 for the pump when they asked staff if we could handle the volume for Republic and they said yes, and asked if he was wrong. Ihler said staff indicated the pumps would handle the 1.5 million and this pump is for any additional growth that would occur at the industrial park.

Warren said the first page contains items that must be done by the end of seven years, with the exception of the maintenance building. Ihler said they could check on the chlorine cylinders. Beller said he could disagree that all of the items had to be done because one statement is the volume of waste to the landfill has increased due to the volume of waste from outside city sources, so if we discontinue to take the waste from outside city sources, they could save $4.5 million. Warren said the items are not required if you tread water for a while but that approach got the City in the shape it is in now.

Purcell said it is the same problem with actions not having been taken in the past and the result is the $62 million sewer problem today. These items should be addressed so similar problems are not experienced in another five or ten years and it should be emphasized to the media that this is not a wish list but is mandatory. Problems are caused when the media puts out bad information, and this is not a wish list, although some of the items in the $80 million may be, but this is not.

Williams said we do not want future councils to be in this shape and have to go back out again and ask the voters for more money. He said the needs in the next five years should be identified and addressed, and everyone would have to be in agreement before going to the voters and the items are not a wish list at all.

Shanklin said we have not factored in that if 40% of the waste stream is paper, 90% of it will be recycled by the paper plant, and that fact was not addressed. Ihler said there are three cells and at the time the report was prepared, the landfill was receiving about 100,000 tons a year and five years of life was estimated for each cell; the landfill received 122,000 tons last fiscal year which takes away one year from each cell. The existing cell has been in use for approximately four months and continuing at the 120,000 ton rate, it will take a year to construct and another six months or year to design and you must be ready to move into the cell. The way the sequencing has been set up with DEQ, it should begin to be addressed now.

Shanklin said if the $4.5 million was put into the plant the firm had in Southwest Arkansas, neither of the cells would be filled in 150 years. Ihler said it was an $8 million capital investment. Shanklin said it was closer to $4.5 million and the reduction in waste stream from paper recycling should be factored in. Ihler said the paper mill comes on line in November 1999. Further discussion was held regarding the waste recycling operation in SW Arkansas and the fact that no other cities currently use that method fully, although it could be a pilot project.

Ihler said the next item is to replace the existing north water plant filter media, which is mono media and can be replaced with dual or tri media, which are both capacity and compliance issues with turbidity; the north plant at Medicine Park could have an increase in capacity from 25 mgd to 30 mgd and assist in meeting the upcoming turbidity requirement in 2002. EPA also indicated that every filter must be individually monitored and recorded for turbidity, and Lawton currently monitors only the effluent that comes off of all the filters as the combined product; estimated cost for that improvement is $500,000.

Ihler said the next item is to construct a Southeast Water Treatment Plant. The Medicine Park plant has a rated capacity of 25 mgd at the north section and 10 mgd at the south section. With the new Safe Drinking Water requirements neither plant could meet the standards without modification. Modification can be made to the north plant, but not to the south plant. Depth of the filter beds in the south plant are such that you cannot add filter media and meet the necessary hydraulic flow, also the plant is 67 years old and useful life is usually 50 years. Recommendation is to replace that 10 mgd capacity with a 20 mgd module in Southeast Lawton which would allow for better use of the water rights, specifically from Lake Ellsworth, and it would probably cause Lake Ellsworth to become the primary water source. Water would gravity flow from Lake Ellsworth to the Southeast plant but it would have to be pumped from that plant back into the City’s system and cost is presumed to be similar to those from pumping from Ellsworth to Lawtonka. Lake Waurika water could be used as a secondary source for the Southeast Plant, and water would be pumped from Waurika to the Southeast Plant then pumped into the City system.

Shanklin said it costs $1 million to run the Medicine Park plant and it will cost another million to run another one off the top of the budget, and asked Ihler if that is correct. Graves said the water plant budget is $1.8 million but over $1 million of that is for the assessment for Waurika. Ihler said the $1 million operational cost is a fair estimate.

Shanklin said the current contractor at the wastewater treatment plant built a plant at Lewisville, TX for 85 cents a gallon, and that city would face the same regulations. Ihler said they would build the most cost effective plant possible, the figure shown was recommended by design engineers and it was $1.50.

Baker said another reason the Southeast Plant is shown as a high priority is because it is critical for economic development. A major industry will not look at Lawton without excess treatment capacity and most large industries use volumes of water. Shanklin asked if all industries are large users and Baker said no, but those that do use large volumes of water would not seriously look at Lawton if that water cannot be provided daily at a certain pressure and volume.

Beller said he did not see the people in general demanding economic development. He said if economic development funding is tied to this issue it will fail. Beller said it is a good thing to pursue but would not assist in selling an infrastructure tax issue to the voters. Williams said the residents are concerned about jobs, the future of the community, the tax base and Fort Sill as far as the downsizing of the military, and if the community is to grow, it must take a giant step up. Williams said some of the items are growing pains and some are in essence unfunded mandates. Purcell said he agreed the average citizen would not support economic development, but if it is shown as getting more jobs for their kids and grandkids, they would care about it and that is what council refers to as economic development, so it is how it is presented.

Ihler said the south section of the water plant will not be able to meet the Safe Water Drinking Act mandates, therefore, Lawton would be unable to treat the capacity it currently treats at the Medicine Park plant. For the entire month of July, the average was 33 mgd and if the capacity of the south portion is taken away, there is only 25 mgd available so Lawton would have been short 8 mgd. The new plant would replace some of the capacity to keep up with the current requirements, plus provide some growth for economic development. Mayor Powell said the capacity will be required for existing citizens and use and that is an important point.

Ihler said page two shows the $60 million CIP package and contains the projects just reviewed for $54.2 million with two additional projects. One of those was the Middle Branch of Wolf Creek drainage improvement and funds were identified in the 1995 CIP to start on that project. A feasibility study is being done with the Corps of Engineers and when completed, it will come to Council, and depending on the benefit/cost ratio with the Corps, the Corps may participate in some improvements. Ihler said it is estimated that as much as an additional $2.5 million may be needed for that entire program, not knowing yet what the cost will be for the channel work. There is a fairly good idea of the cost of the work for the detention reservoir being considered just east of 67th Street and south of Rogers Lane, it will be about $1.5 million which has been earmarked already for that project, and $1.5 million has been earmarked for the Corps project. Because of the large amount of right of way that is necessary to be purchased for the Corps project on the Middle Branch, it may be a 50-50 cost share project with the Corps. The alternatives the Corps is looking at, the one they support at this time, is in the neighborhood of $4 to 5 million although the design work has not been done and this is part of the feasibility study.

Sadler asked if we were currently proceeding with the detention pond at 67th Street. Ihler said the final design phase is in progress for the detention pond and should be ready for Council around the end of the year for approval of plans and specifications and to authorize advertising for bids for construction. Sadler asked if that can be done with the $3 million. Ihler said yes.

Shanklin asked if Ihler would rather have the detention pond than do the Wolf Creek drainage, and asked what the Wolf Creek drainage would do to the people who have been flooded in the past. Ihler said the Corps has provided, in the feasibility study, that with a 100-year storm frequency on the Middle Branch of Wolf Creek, somewhere in the neighborhood of 60-65 homes would be flooded. The Corps design shows an 80-year storm could be carried within the channel, bank to bank; that is without the construction of the detention pond, and including the detention pond, it would be able to carry the 100-year storm.

Shanklin said the City has refused to go to the State to get rid of the ox bow at Cameron University and the dam between Gore and Lee; at 44th and Gore at five feet depth of water you have 500 feet going south and when it gets to the bridge at 38th and Lee, at five feet high you have 275 feet of space. He said logic says it raises and backs up to where it began. Ihler said it would raise and spread out, and spread first. Ihler said when the numbers were reviewed three years ago, when the report was done for south of Gore, it was that the entity receiving the spread of the water would be Cameron University.

Sadler said most of the residents would like the flooding problem in Meadowbrook attacked from both ends, by going through the country club with a channel of grassy slopes, not a big, ugly concrete channel necessarily, but to get the water out faster and to use the pond to slow up the water coming in. He said residents did not favor a large concrete structure and ripping out all the trees. Ihler said the channel being considered, and it is in the feasibility study phase, is a 60-foot bottom width grass lined channel with a 120-foot width at the top. Ihler said some of the residents do not want the channel to go through their back areas because it would require removal of trees and some of the residents want it to be constructed to relieve the flooding. Ihler said that would be a decision the Council would make.

Beller asked if there was a concern about the wildlife in that area also. Ihler said part of the process the Corps must go through is an environmental assessment, which would address the issues from the standpoint of species and habitat; a comment period is established for those in the area to comment, and that is then evaluated. The Corps must feel comfortable that they are not causing any trouble or damaging the habitat that could not be mitigated, and an example of mitigation is where trees must be removed they could possibly plant new trees in a nearby area. Beller said he understood the Terrills had a bird sanctuary map of that area. Ihler said he did not know it was a bird sanctuary, although there was concern that it was considered a wetlands area, and all of those issues must be addressed by the Corps of Engineers, which could suggest mitigation or that because of the opposition, they not move forward. Beller said to put a $5 million package together for 65 homes, not knowing how many would receive relief, was not good and the only guarantee was to buy those homes, which seemed to be more logical. Beller said things like this being included in the package could be detrimental, and the citizens need solid information on what the tax will be spent on.

Williams said something has to be done with Wolf Creek, either buy the homes, spend money, or do nothing and have citizens come forward saying their homes have flooded requesting relief. He said it benefits a specific area, but that is also the case with certain parks, streets, or water lines.

Ihler said the next project in the $60 million package was a drainage improvement which had been in the 1995 CIP for 34th Street south of Cache Road in Greer Addition. The street is not passable even after a very small rainfall and it is a route used for hospital access. The drainage is a concrete box that starts near Cache Road and winds through Greer Addition behind Tomlinson Junior High tying into Squaw Creek. Shanklin said it had been prioritized in the top five for the last 13 years. Purcell said this is both a street and drainage and appears to be more important than Wolf Creek because it would benefit many more people.

Ihler said the next page goes into the $70 million package, which includes the $60 million package as well as $2 million for major and minor water distribution line replacement City wide and the specific lines were identified in the large package distributed previously. Mayor Powell asked how those lines were identified. Ihler said they were identified over the years based on the number of breaks in the areas. Ihler said the remaining $8 million in that package is for arterial street improvements; three of the five projects were sent to the Oklahoma Department of Transportation for the highway bill requesting federal and state funding. If the projects were totally funded with City money only the first two could be done. Ihler said with highway participation, similar to Rogers Lane, the City is responsible for engineering, right of way and utility relocation costs 100% and it is assumed that those costs will be about 25% of the entire project, so the City would be responsible for 25% of the entire project cost. Construction is usually an 80-20 split, with 80% being federally funded and 20% can either come from the local government or the state, and the State is putting in 20% for the local agency on Rogers Lane; if the state does not fund the 20% the City will need that funding for the match.

Williams asked if all of the projects shown would qualify for matching funds from federal or state. Ihler said the projects listed are all of the TIP program and would qualify. Purcell said the projects come to $22 million and asked if the City had $8 million for match that it could get $22 million done in construction. Ihler said the $8 million was the number to fill out for the $70 million package. Purcell said $5.69 million is shown at the bottom and asked if that was assuming the state would come in with funding. Ihler said if the state will pay the 20% local match, the City would need $5.69 million; if the state does not, the City would need $9.1 million. Baker said Lawton should make an effort to take advantage of the state and federal funding available and that matching funds are needed to do that. Shanklin said it would still be a priority question in the various projects in the overall program.

Ihler said the last page shows the $80 million package, which includes the $70 million package as well as NW 31st Street Reconstruction to include a drainage improvement from north of Gore to NW 25th Street, on the east side of Memorial Hospital and is much like the 34th Street project. $2 million is included for minor street repairs throughout the City; priority list is in the large package. $650,000 is included for relocation of Fire Station #5. Lake Ellsworth and Lawtonka dam improvements at an estimated cost of $1.125 million. $1 million is included for parks improvements, to include Eastside, McMahon, Grand View and City-wide parks. Major arterial street improvements are shown and it would be the same case on the matching funds.

Shanklin asked how many of these projects would be done in the CIP starting in 2000. Ihler said the only project identified in the existing, ongoing 1995 CIP was the Wolf Creek project. Shanklin asked if we were trying to generate an additional $10 million new money in addition to the CIP, and explained that the funding estimated to be received from a five year sales tax was not sufficient to fund the projects listed. Baker said three funding packages were developed by the Finance Director to match the programs at the rates of 1%, 1.25% and 1.50% sales tax, as well as utility rate increases. Shanklin said if the one cent sales tax generates $40 million, there would be a need for an additional $20 million spread out over the five-year period. Purcell said that would be for the $60 million package and Shanklin agreed.

Steve Livingston, Finance Director, said information was distributed showing 1%, 1.25% and 1.50% sales tax for the period January 1, 2000 through December 31, 2004. He said Shanklin’s questions are addressed on the next page where the $60, 70 and 80 million programs are shown because none of the sales tax percentages shown will generate sufficient funding for the estimated project amounts for even the $60 million program. Utilities are shown as the additional revenue source because so much of the costs are tied up with one of the utilities, water, sewer or refuse, so the utility increase is shown. He said a 1% sales tax for five years to fund the $60 million program would require $8.50 per month on the utility rates; 1.25% sales tax would require $5 per month on the utility rates; 1.50% sales tax would require $1.50 per month on the utility rates. The $70 million program shows the 1% sales tax would require $12.50 per month on utility rates; 1.25% would require $9 per month, and 1.50% would require $5.25 per month. The $80 million program shows the 1% sales tax would require $16 per month on utility rates; 1.25% would require $12.50 per month, and 1.50% would require $9 per month.

Livingston said one question was what would be the utility rate increase now that we have applied two years of the CIP to phase one of the sewer rehab, that number comes to $5.70 and is included for information purposes. It does not address the overall CIP $60, 70 or $80 million.

Purcell said the $60 million program shows 1% sales tax and $8.50 utility increase; if the 1% sales tax was defeated, would the utility increase be in the area of $26 or $27 per month to make up the $60 million. Livingston said he did not look at that, and there would be a question of whether all of those items could be placed on the utility bills, but at least those amounts would be required to fund the entire program.

Vincent said Williams asked a question last week regarding whether street improvements could be placed on the utility bills. He said his office had researched that and the drainage projects could be on the utility bill, but for items such as the major arterial street improvements, if the intent is to raise revenue to fund non-utility items, it must go to a vote of the people. Street improvements can be charged through special assessment districts or other situations but not on the utility bill. Shanklin asked how funds are transferred from the enterprise fund and placed in the general operating budget in the amount of $8 million, and is then used to pay police, fire, streets, everything. Vincent said you are allowed to have excess funds through the utility, but the question was whether funds could be earmarked on the utility bills as a street improvement and you cannot because it is a revenue raising measure. Vincent said if a certain amount is budgeted for a project and it comes in under the amount, the excess can be transferred to the general fund, but you cannot do it strictly as a revenue raising measure without going to a vote of the people.

Mayor Powell said one thing to think about would be to take the $30 million water treatment plant off and deduct that from each of the packages brought forward, which would leave a $30, $40 and $50 million set of CIP packages, and fund the treatment plant with a utility increase. Purcell asked if a decision was made to increase the utility bill $25 a month, can that be done. Vincent said in general terms, yes, as long as it is reasonable in making the association with the utility and not inflated only to be able to pay for other items, such as street repairs.

Shanklin asked how critical it is to Council that this be presented on the November 3 ballot. Purcell said he felt it was absolutely critical. Shanklin asked if it could not wait until January or February. Purcell said it has already been delayed six months and there will be a problem with DEQ if there are further delays; there may also be another sales tax issue on the ballot in November and that could be discussed Tuesday. Shanklin asked if Council had to agree on all of this be Wednesday. Williams said he thought it should be done in a timely manner, although the proposed tax would not take effect until the year 2000, and/or a utility increase that would not take effect until January 1999, but a decision is needed. Beller said Purcell suggested we were losing money, but if it does not start until January 2000, what is being lost. Purcell said the other part would have to kick in on the utility increase, whatever it turns out to be, in January 1999.

Haywood said the county may come up with a question on the jail and the school system may come up with something for a junior high school. He asked if it was felt that the City’s issue would pass. Purcell said he hoped there could be discussion with the county tomorrow night, and some room may be left for that; the City’s extension would start January 2000 and if it is 1% it leaves room for the county for economic development or a jail, and the county’s would almost be over before the City’s would go into effect. Purcell said the school system would not make the November 3 ballot and that he did not know when it would come up again, but it is also something to consider. Williams said the school system received revenue from property sales recently and may need only a small ad valorem levy.

Keith McDonald, Leo Oppenheim Company, said he did a capital funding report for Lawton in 1994 for the 1995 CIP, and the report was updated last October in looking at the SRF for wastewater treatment improvement funding. He distributed information regarding comparison of water and sewer rates in cities in Oklahoma. The sources of revenue are utilities, sales tax and ad valorem. If utilities are raised $8.50 per month, Lawton may be approaching the mid range but would still not be in the median of the rates charged in other cities in the state. He said the citizens should appreciate the rates having been maintained at the lower level, but at the same time, the water and wastewater systems have suffered since those improvements have not been made.

McDonald said information was distributed comparing ad valorem rates of cities in the state showing schools, counties, etc. and a total column. There is flexibility in this area also since the ad valorem rates are lower than those in other counties. Many cities request ad valorem taxes for non-revenue producing items such as fire stations, drainage, parks, etc. and use the water and sewer rates to pay for the water and sewer services.

McDonald said he was asked to report on pay-as-you-go versus debt financing, and that was also done in October 1997. He said it was determined previously that pay-as-you-go was not as efficient as the debt through OWRB. McDonald said one handout shows a $1 million increment and the OWRB program through SRF allows for borrowing 40% of the money at zero percent interest rate; 60% of the money is at market interest rates. If the City got $1 million up-front to be able to award the contracts, and spent someone else’s money at a zero percent interest rate, they obviously have the ability to invest their money at 5-6%, so would be arbitraging by using that money. McDonald said he composed a debt schedule of what would be paid if they went to the OWRB and borrowed the same $1 million; if they invested that $1 million at 5%, by the time the payment is due to the OWRB, they would have generated $50,000 in interest income, and after paying the debt service for that year would have $869,000 which would be invested during that period at 5%, and by the end of the period there would be funding remaining. McDonald said in certain situations it is beneficial to use someone else’s money and invest their own money.

Shanklin asked how much the City can borrow and McDonald said Lawton is on the priority list for $14 million. Shanklin pointed out that some of the cities shown on the comparison sheet have per capita income that exceeds that of Lawton’s population, and at one time Lawton’s was below Arkansas, which was ranked 48th nationally in per capita income.

Williams asked if a request had been submitted to OWRB for Lawton to receive $14 million. McDonald explained the programs available through OWRB and said Lawton is on a priority list but an application would be required; the purpose of the program is to allow cities to make water and wastewater improvements at a lesser cost. Williams asked if there was a way to get more than the $14 million. McDonald said the entire program cost was shown at $62 million so OWRB anticipated Lawton would attempt to get on the list for a larger amount, and that Tulsa uses as much money as it can get from the program.

Purcell asked if Lawton could take the $14 million for the sewer portion, and another amount from OWRB’s water program to use for the water treatment plant. McDonald said yes, the program was designed for such uses and the seed money came from the federal government in an attempt to let the states design programs to benefit their communities. Williams said it seemed Lawton should take advantage of the programs available.

Beller suggested members be allowed to think about these overnight. He said there was nothing shown that was not necessary, and some are mandated, but he was of the opinion that a definite program would be needed before going to the public requesting tax funding with a definite period of time.

Mayor Powell said Lawton has 1.25% sales tax and it will expire December 31, 1999. Beller said that would bring the total sales tax down to 6.5%. Powell said he asked for the figures on the 1.5% sales tax for information and it would make it easier on a utility increase.

2. Consider adopting an ordinance assessing and levying an excise tax beginning January 1, 2000, for a specified period to be used for capital improvement projects and capital outlay of the City, and submitting the ordinance to a vote of the electorate, adopting a resolution setting the date for a special election and establishing the questions to be placed on the ballot.