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Council Agenda and Minutes

Discussion Forum

Sue Shawger (re Library Board Appts.)

Kelly Korn (re comp plan)

Mayor Rowe (Let's work together)

School Impact fees

Cliff Morris' "Proposal" to the City

Jose Fallgatter

Loretta Storm

Wendal Smith

Ed "Cheeko" Boucher

Tom Green

Jeff Kirkman

Ray Kistenmacher

Kelly Korn

Rob Criswell

Jim Porter

Jeff Everett

Mark Raney

PUBLIC COMMENTS
Sue Shawger I am currently the acting chair of the Sultan Library Board. I was somewhat mystified during the last council meeting that Item #3 under the Consent Agenda, having to do with two candidates for the Library Board, was removed to be added to tonight's agenda. These positions are non-political and have nothing to do with the making of city policy. We haven't had a full board for several months, and we're delighted to have two very qualified people apply for the two openings. There were no other applicants, though notices have been posted for some time, as well as contact made with people who had applied in the past. I would great appreciate this item being passed tonight so that we can finally have a full library board. Thank you very much.

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Rowe Thank you. Anyone else like to make comments?

Kelly Korn [lives on Trout Farm Road] I'm not a person that likes to be involved in politics, and I started to go to the Planning Commissioner meetings because of the issue of parks. I really feel that Sultan needs to have some kind of place where you can go and play soccer when the parks aren't closed or being worked on. Going to the Planning Commissions, I am just, I'm mystified at the things that are happening. I don't think that any of the alternatives in your plan are acceptable for our city. I have here a Commission Comprehensive Plan Update that says the reasons why you're updating the plan. One of them was improvements to SR 2. Now, we had a comment period where anybody could comment on the plan and I'm surprised nobody here commented on the plan. You're a city council. You're represented, and nobody has opinion on the plan. Even you, Mr. Mayor. You cannot say whether you thought the plan was good or bad. Now, the original -- there was eight people who commented on this, two which were on the Council [she actually means "commission"], saying the plan wasn't even good, okay? Then they [the city]say, "I'm sorry. The comment period is closed. We can't have any more comments." And then last night I go to the meeting, and, Rick [Cisar], you have, you've added your own comments to this after the period's been closed. Okay? I have a letter from the Transportation Department that wanted to comment on it, and it wasn't accepted. This was one of the reasons why you said you were updating the plan, Highway 2. They send a letter, Department of Transportation: "We can't accept it. I'm sorry." Another reason why you wanted to update the plan was the Endangered Species Act. We have a letter from the Audubon Society saying, "Why won't you accept our comments," and "the maps aren't acceptable." Okay? You tell me things like, you like have to consult your plan -- what is it called for your money? The city is supposed to have a financial -- there's a word for this….[from the audience, "Capital Facilities Plan"] -- the Capital Facilities Plan. In this there's a blank page that says, "Insert the copy of the Capital Facilities Plan." I went upstairs. We don't have one, okay? She laid down a 1995 copy that was expired. This is something that you're supposed to update every year. It is supposed to be an element in this plan. There are all kinds of things going on here, and I, I don't understand them. I want to know…you said upstairs [referring to Rob Criswell] with Donna Murphy, "We don't have the money or the manpower to update a capital facilities plan." I want to know why you can pay Rick Cisar $20,000 to update a plan that had 10 years left on it. Okay? I, I, I don't understand. The elements in this are not acceptable. The Shoreline Master Program? That should be done way before the Comprehensive Plan You don't do your shorelines to your comprehensive plan, you do your comprehensive plan to what your shoreline regulations are. So I'd like to know why -- Rick, why are you telling the Shoreline people, let's wait on the maps and rules and regulations till after our comprehensive plan is done? How do we know what we can and can't do? So I'm submitting this information, and I would like to know why. Why are we even updating this plan? There are so many things we need to figure out before we even attempt something like this.

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Mayor Rowe's comments: The election is over. There's a lot of energy and effort spent on this to the two opposing sides. It would be very nice if everybody could spend that energy working together in the same direction. We could get a lot of things accomplished here. [smattering of applause] AUDIO FILE

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Rowe Okay, Action items, number one, Ord. 814-02--3, School Impact Fees.

Rick Cisar Thank you, Mayor. This is the second reading of the ordinance that council looked at two weeks. And basically what the ordinance does, it provides for the general administration of the ordinance by the city planner [unintelligible]. It does provide for the collection of the impact fees by the City on behalf of the school district. It does provide for a reduction in the current impact fee program. And at the last meeting, council had some questions relative to why we're seeing a reduction in the fee. We asked Al [Robinson, Supervisor of the Sultan School District 311] to come tonight and maybe respond to your questions regarding why you're seeing a reduction of impact fees. And maybe Al can speak to this ordinance and the next item on the agenda, which would be the local agreement between the City and the school district.

Rowe Okay. It's very strange to me to see fees go down, but I guess that's [unintelligible].

Al Robinson Isn't it wonderful how government works? I'm going to throw a couple of things at you tonight that hopefully will explain the magic [unintelligible]. He's somewhat familiar with it, he's [unintelligible] than I do. [unintelligible] some terms that are used with populations, also has, and I think the city has, a copy of our Capital Facilities Plan, which has been updated [giggles from assembly], but we didn't have to do it. So I understand your situation of having never been done. And this is actually good now. It's supposed to be done on a five-year cycle, but the county's continuing to come back about every two years and asked us to update it because everything's changing so much. [gives out hand-outs to council, mayor and attorney] These are the two spreadsheets which actually show the calculations of the school impact fees, one highlighted 2000, another year highlighted 2002 are the last two updates of the plan, and therefore, the fee structure. We can kind of walk though that and it'll give you a little better picture as to why and how the fees actually did go down -- or the request for fees went down. The only question that's come up is, does the City have to drop the fees? And the fact is, you really don't have to drop them at all. And somebody asked the question at the last school board meeting, "Is the cost of building schools going down?" And, no, they're not. They're continuing to rise and there are solutions. But 2000 and 2002 we've seen such changes, and also the county's using some different Census data now for 2000, they're using 1990 census, and 2002 they're now using the 2000 census. And that's what changes as a result of that. Probably the largest change is the county is estimating that there are very few in our particular school district, very few multi-family where there are two-plus -- or multi-family two-plus bedroom units, apartments with two-plus bedrooms being built or projected to be built in the next five to seven years. The vast majority of dwellings that are being built here, are if they're multi-family, they're single bedroom, or they're single family residences or duplexes, which are included in that. And so you can immediately see a real large change. If you will look under school opposition (sic - "composition"?], which is the first major section in the Year 2000, come across the line that says "Elementary" to the seventh column, which is Student Factor Multi-family Residence, two-plus bedrooms, it shows a 1.0. But they're anticipating in 2000, for every one of those rented or built, it will generate one elementary student, if you drop down one line, point-oh-seven-seven [.077] middle school students -- which is an interesting number -- and point-oh-three-eight [.038] high school students. And whenever you see student factors, that's what they're saying, is that for a single family home, they're figuring every single family home providing a third of a student for an elementary school, a tenth of a student for middle and an eighth of a student for the high school. Those numbers halfway across and above or just below the bold title of each section, is the actual calculation. So if you want to pull out your calculator sometime when you're bored, you can actually run those figures and see if they did their math correctly. School [unintelligible; sounds sort of like, "sat"] acquisition is a factor. School construction cost also is a factor. Temporary facility costs, that’s the cost of putting the portables on the site to house students while you wait for enough students to show up to generate a new school. That is a factor. Those are the factors that cause the fee to be what it is. Then you take from that the state matching credit, which is the fourth major area, and that deals with a school district's ability to get state matching funds for construction projects. In 19--excuse me, the Year 2000, our matching percentage was 66.454, it has now dropped to 60.39% in 2002 and with that, along with the changes in student factors, you see that the dollars start to drop down, not only on the expense or fee side, but also on the credit side coming back the other way. Tax [unintelligible] credit is also figured in, and this takes into account your current bonding of the school district and payment of debt that has already been incurred. Take all those numbers, you through them altogether and you get the fee summary at the bottom, which you can see now is your single family on the left, your multi-family single bedroom, which is the middle, and your multi-family two-plus-bedroom, which is on the right. Things have changed considerably in terms of building practices and what people project -- or where people project students may be living; what's going to be built and where student's are going to be living. And so we're seeing multi-family residences with two-plus bedrooms basically becoming non-existent in terms of being built in the Sultan School District [See Endnote #2]. And so they're basically becoming a non-factor in terms of impact fees. Multi-family one bedrooms are generally lived in by a couple or by single people, and so they don't generate any student impacts fees, as a result of that. So all, virtually all the expected building is coming in single family residences and the things that are in front of you, I'll try to answer anything you might have. You will notice, if you go down to the third line from the bottom of the spreadsheet, that the fee as calculated is not the fee that the county has chosen to charge. The $1,093 or the $1,093 for a single family, and the multi-family two-bedroom-plus at $1,048, those represent 50% of what, of the fee as calculated. And that was what the county choose to -- the county has historically chosen to discount it by 50%. The City of Sultan can choose to do what they wish with it at that point. It's a fine line. Schools cost money to build. Developers sometimes get over-burdened. Home buyers get over-burdened, because you can bet that whatever your impact fees are, they will be passed on directly to the person who is buying the house. And that's as it should be. That's not a problem. That's just the way it is. But I wasn't here. I was in Emmetsberg [Maryland, at FEMA drill/training], chasing C. H. around two weeks ago, so I was not here to answer your questions. And I'm sorry, I gave Laura a real quick study on the whole thing and basically just told her it was magic [and] if you didn't believe me, I'd come back and talk to you. And I’m here. So I'll answer any questions that you might have. And you'll notice that the current square footage and the temporary square footage, which are sections 2 and 3 of the second column, do not add up to 100%. We pointed that out the county that they added up to more than 100% and we discovered that they were counting [unintelligible] line. And so they insist that that number's okay and so we just left it alone. But I think those two numbers are supposed to add up to 100%, and they don't. They're a little bit above that by about 2%. Questions you might have? Mark?

Raney What do other communities do in estimating that percentage where the county's chosen 50%? Do most other small towns take the [unintelligible]?

Robinson We have, Sultan has generally matched what the county did. This last time, we had such a short turn-around, you'll notice the 2002 comes out to $2,362. That is not what the city has chosen right now. I think the city right now is charging, Gary, you know -- 16--1763, or -- ?

Gary Broughton and Storm [simultaneously] $1,673.

Robinson $1,673, which is actually from the facilities plan before, but we had such a quick turn-around, we were having some struggles getting information back and forth between the City and the School District, so we just, we didn't even ask them, we left it where it was at that point, because we knew this one was going to come back. So most [district], I would say, are matching the county. Some who are experiencing explosive growth -- Marysville is a good example -- or some areas where they're trying to limit growth, they are, they are going higher than 100%. Some places are $8,000 for school impact fees.

Raney How much will this figure, impact the school board's ability to go out and float a bond if the public's aware that they're only, that Sultan's only charging 50% of what the actual cost is.

Robinson Well, that's all Sultan's been charging all along, the City of Sultan and Gold Bar. School impact fees, in theory, all impact fees were meant to cause the cost of new construction, new facilities and new services to be borne by the new construction. The reality is, it just can't cut it. We're always going to have to go out for bonds unless there's… [trails off]. I don't know how to answer that, Mark. I don't know whether people say [unintelligible] more than they gave me. You know, it's… I think you have a number of options in front of you. You can match what the county has chosen to do, you can either keep things where they are at this point, which is well within the range of what the actual fee is and the county discount, or you know, whatever you choose to do. There is some responsibility on your part to collect impact fees. I mean, that's in statute. So we do need to do that. So you can't just say, "We're just not going to collect them at all." But what that amount is, is certainly up to you. The county has chosen -- and perhaps because school districts around the county did not lobby hard enough with them to get a higher percentage -- but the county has historically just gone 50% of the calculated fee. And you'll see the same thing now with 2000, $4,723 divided in half [unintelligible] $4,362 which is what we are charging now. Will it come across in your billings? No. Will it help? Absolutely. Impact fees, if you want to see impact fees in action, the [unintelligible] fitness center in the basement of the high school, and some upgrading to the original locker room project, with two lockers (sic) at the high school, were made possible by those impact fees. So they do have an impact immediately. Also those impact fees paid for some of the playground equipment you're just starting to see that are short-term fees as we wait to go out for our full school effort down the road. As well as buy portables. Impact fees are buying portables. So, whatever you want to do.

Boucher Is there a direction or recommendation or desire from the board as far as staying with the current fee or going with the county's number?

Robinson The school board did accept it at the county level. But if the city said no, we'd like to keep at current levels, the school district would be willing to accept the increase. I don't think it'll be a problem. Sometimes some of this is just kind of a learning process for everybody, and it's kind of, "We've done it this way for ages," it's kind of [unintelligible] through. And then as we become better students of this, it's like, "Well, we could do it a little different, if we choose to." So we're facing some varied issues, so, you know, [unintelligible] come in.

Porter So facing these varied issues, as [unintelligible] speak to, what's the progress right now as far as funding goes, for this? Are you….

Robinson Towards a new building?

Porter Yeah. Towards the new facilities.

Robinson Well, given the lack of permit activity in the last year and a half to two years, there has been a -- I can't tell you how much three's been -- but there's been a relative trickled flow of impact fees compared to what the district saw two years prior to that. We have purchased some property within the school district and it's east of the school district, to build this intermediate school that's spoken to in the capital facilities plan. And we did not go out for bond yesterday, as we had originally hoped, but we will be going out for a bond probably in either September or November for funding for that school, because we can't wait for the amount of impact fees and the… "insecurity" is not the word, but the unknown situation as to how much of this development that we're guessing is going to happen will happen. We can't wait for that to happen. We've gotta get out on the front burner in terms of getting the school on foot.

Porter The impact fee is not necessarily formulated to address the building of a new facility. It's simply there to take the impact off of the community as many of the new people come in, is it not?

Robinson That is. But they do try and plan in for some of that, some of the new facilities' costs. And you'll see that in that spreadsheet.

Porter What percentage is it?

Robinson Oh, it's very, very small.

Porter Very small.

Robinson Very small.

Criswell [unintelligible] Now, these impact fees, can that be applied to pay back that bond? Or how do you do that?

Robinson No. They can't. They have to used for capital budgets. You have to actually use them for capital projects. However, if you use those for capital projects and don't spend some of your bond money, that could be paid back. So the answer is "yes" and "no." Getting money in the right box is always a fun trick.

Porter I know you're --

Criswell Ask Laura. She's good [laughs].

Porter -- basically trying to sell us here, but I would really like a couple weeks to think on this.

Robinson No problem.

Porter I'd really like to [unintelligible].

Robinson And like I say, I'm not trying to sell you at all. This is -- you know, if the council comes back and says, "We want to do exactly what the county says," that's cool. That's not a problem. You want to keep it the way it is? That's cool. I would encourage, I guess, implore, you not to go below 50% of what the county is collecting, because then you get into a phase that the county and the City of Gold Bar, start poking fingers at each other, that could put us kind of a little box, too. And that's one reason I think in our district they've tried really for the most part to stay pretty much the same. These are our developers, these are our people; [unintelligible] they see what their impact fee costs all over the city. But I'm here to explain. I'm not here to sell the process. The process exists and I have to become a student of this as I hope you guys are. So have I answered your questions?

Raney These documents are available at the school district, and I assume the --

Robinson These documents are available at city hall. Laura, those are -- the 2002 document is available at city hall and the capital facilities plan.

Raney And I assume you're going also to Gold Bar as well?

Robinson I [mostly unintelligible, "already did," perhaps?], yes.

Raney They'll get the same presentation, the same numbers?

Robinson Yeah. Absolutely.

Rowe Okay. Anybody else got any questions for Al? If not, then I agree we should have a couple of weeks to look at it, so we need a motion to table this for a couple weeks.

Porter I'll make the motion we table it for a couple weeks.

Everett I second.

Criswell I hate to do that, really. I'm comfortable with the old rate. And as much as I'd like to lower people's taxes, I know the situation in schools, they're [unintelligible] at city hall. But if you guys want to table it, I mean, it's up to you. I just wanted to make that comment.

Rowe We've got a motion to table. You seconded --

Boucher I second.

Everett I already seconded it.

Porter And I realize that -- and I don't if we realize, really, how some people really are over-burdened today.

Criswell I realize that.

Porter I talked to some people that really, they're really over-burdened with taxes. And this here would save [unintelligible] --

Criswell Well, this is an impact -- it's not a tax.

Porter -- this is an impact, and this is not [unintelligible] basically create future facilities. Al said there's a little percentage in there, but to me, it should be minimized. Anyway [unintelligible].

Rowe This is not really a recurring cost. It's only one time, right?

Porter Right.

Rowe And that would be when somebody buys a new house… [trails off].

Criswell But if he we don't, don't have this, there's that much quicker we're out asking for money for somewhere else and raising people's taxes, I feel. Whether it'd be a bond to maintain their schools or build a new one, [unintelligible].

Raney What about if we set ours higher, though, than Gold Bar does? What would that do with --

Criswell Gold Bar has their own option.

Raney -- push houses. I mean, there's already, it's probably cheaper to build houses in Gold Bar already, and we'd give them one more incentive to go there rather than here.

Criswell Well, I understand -- I [unintelligible] recommendation [laughs].

Porter Call for the question.

Rowe Bruce?

Champeaux Aye.

Rowe Rob?

Criswell Aye.

Rowe Dusty?

Boucher Aye.

McPherson This is to table it, right? For two weeks?

Rowe Right.

McPherson No.

Rowe Jim?

Porter Aye.

Rowe Jeff?

Everett Aye.

Rowe Mark?

Raney Aye.

Rowe Okay. It's been table for two weeks.

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Rowe Discussion items. The Morris proposal. Did we have this…? Everybody have a chance to read this?

McPherson I haven't seen it already, but I've seen it on here as I came in. But it's [unintelligible] let him get up here and explain it to us.

Rowe Would everybody be comfortable with having Cliff come up and explain what he's wanting to do and then we've got it in writing in the meantime?

Criswell That would probably be the quickest way to [unintelligible].

Rowe Okay, Cliff.

Cliff Morris Well, as everybody knows, our property's in the UGA and we've petitioned the city for city service so we can develop the property. But in doing so, we're agreeing that we will take and put the sewer all the way up to my property all the way to Main Street. In other words, we will improve all of First Street as we do this. So.. it says, uh, the Morris family agrees to install a new gravity sewer line between the Morris property [unintelligible] and the existing pump station at the intersection of Main and First Streets, assuming all necessary right-of-way is provided by the City. Two, the sewer line shall be designed and constructed to City standards as set forth in Sultan Municipal Code. Three, the size, capacity and the sewer line will be as agreed upon consistent with applicable land use densities. The cost of the sewer line will range between $1 and $2 million, the cost of which will be initially borne by the Morris family. The Morris family shall be entitled to recover a portion of the cost of construction when subsequently developed and benefited properties using a latecomers agreement, consistent with state law RCW 35.72 and RCW 35.91 and Sultan Municipal Code title 11 over a period of 15 years. Sultan will provide certificates of water and sewer availability for the proposed subdivision on the Morris property, up to 350 residential units. The Morris family's obligation to fund and develop the sewer line will be contingent upon Snohomish County approval of the preliminary plat and related construction and approvals for a residential subdivision at densities allowed by the Snohomish Council Comprehensive Plan. And corresponding development regulations, together with the interlocal agreement between Snohomish County and the City of Sultan. The City provides water and sewer utility service to the Morris property at rates and terms established in the Sultan Municipal Code. That's basically it. If there's any questions, I'll be more than --

Rowe What you're proposing to build is a gravity-flow line all the way from your property out off of Trout Farm Road, down to the pump station at the end of First Street?

Morris Correct. We will replace all the line that is not functioning on First Street.

Rowe You'll replace the part that's not functioning. How about the part that is functioning?

Morris It's hardly any of it functioning, so the whole line will be replaced.

Rowe You'll replace the sewer line down First Street on gravity flow. No pump stations --

Morris No pump station at all.

Criswell You're mentioning in here something about your right-of-ways?

Morris I mentioned something about right-of-way because the City hasn't provided that right-of-way through the City.

Criswell Well, yeah, but that doesn't state just inside the city, though.

Morris Well, I'll let [unintelligible] answer that question, then.

Criswell In other words, we don't want to be responsible for right-of-ways from, you know, going out to your property [laughs].

Sinclair The purpose of that statement -- by the way, my name's Derek Sinclair, engineer by training -- the purpose of that statement was to specify that where we are inside the city, the rights-of-way currently held by the City of Sultan will be able to be utilized to the maximum. There's some pretty tricky construction there. That's not a simple improvement that the Morris family has agreed to build. And so basically what that is is designed to do is give them the maximum latitude in utilizing the existing right-of-way for the roadway.

Criswell I, I want that….Right now we're not responsible for anything outside the city limits. And in here it doesn't say that.

Rowe Also, I question the "between High Street and the city limits." Do we have right-of-way up through there for a sewer line?

Koenig You have the sewer line.

Rowe Right.

Sinclair You have no public right-of-way, from my knowledge. Just a roadway.

Criswell Is that -- our easement is for -- I mean, is that easement for utilities as well as this road?

Koenig We didn't know [unintelligible] any work in that area, so we did not research any right-of-ways, as far as even what right-of-way beyond road purposes. So it's a question that we couldn't answer without doing a little bit more research on the right-of-ways that are recorded there.

Porter I would ask a couple of questions here, too, now. Cliff, this would include the stormwater facility new water lines and pavement and sidewalks? Am I hearing this right, or not? In other words [unintelligible] --

Morris [unintelligible] water line, I haven't included a water line in there.

Porter I notice it's not in here.

Sinclair Well, the proposal would be for the sewer line and restoration in accordance with Sultan code.

Porter Well, then, you would expect the City to pick up the rest of it, because while you got it open is definitely the time to put the water, stormwater in there.

Morris Well, what we're looking at is providing the city with, you know, anywhere between $1 million and $2 million in sewer improvements --

Porter Yeah, right.

Morris -- and now you're saying you want me to spend another million dollars that I don't have?

Porter No, what I'm saying is, that's gotta be addressed under this protective. I mean, from our way of thinking, it should be addressed. While the ground's open is the time to address that sort of thing.

Morris Um-hm, right. I think it's pretty well stated [unintelligible]. It doesn't mention those things.

Raney Mr. Mayor? Where are we with sewer capacity right now?

Rowe Rick, if we --

Cisar We generally have capacity for 1580 units, residential units.

Rowe The question I have [unintelligible], but the right-of-way of where our road goes out between High Street and where Trout Farm road starts at the city limits, can we put a sewer line right in the road? Can we have -- we have the road, right? Can we put a sewer line right down the road, or -- ?

Koenig Ask Thom.

Rowe Thom?

Male You have a water line -- [simultaneous comments]

Male We have a right-of-way [This was not Thom Graafstra's comment]

Rowe So that wouldn't be a problem with the right-of-way, and theoretically, I mean, unless something comes up that we don't pursue now --

Criswell And like Laura said, we probably need to survey it so we know where our right-of-ways are. You know, the road's there and a lot of times we find out that it goes through somebody's front porch, but other than that we're all right.

Rowe Yeah, Mark?

Raney The other question I have is the east end of town development, how many sewer hook-ups is that going to need?

Cisar Which?

Raney Of those 1500, how many of those hook-ups will be required for the business development out there?

Cisar We, we elected to making some assumptions that we have 1580 units and we assume that we're going to use 100 of those a year, on the average.

Raney That's for the residential. But I'm talking about the business area out along the four-lane area that will be putting in manufacturing and all of that.

Cisar We don't have numbers on that. We just rounded those up.

Criswell That would probably be less than residential.

Loretta Storm [From audience] No. No, no.

Porter It was discussed once. It's hard to get a handle on that, because every business is totally different.

Cisar We resolved, for example, on I&I [inflow and infiltration of sewer system], deficiencies that would translate to, say, about another 220 units, based on what the engineers are telling me.

Rowe [unintelligible] I see you're nodding your head. Any comments on that?

Tony Beedle On the infiltration on First Street? We have a little bit. It's not that far advanced. We're doing a bunch of infiltration work and we've really reduced it. We still have a little left to do, First Street being one of them.

Rowe So this would take care of the infiltration on First Street?

Beedle Yes. But it's not all that bad. [unintelligible].

Raney I guess it's just too important of a deal to not have a handle on it. We know what sorts of development we're going to allow out there that is zoned for in the east end business area and that's crucial to our future to not have fairly reasonable numbers to go on. Making a decision like this is risky.

Porter How many units did you say there, Cliff?

Morris We show a max of 350. [Note: Assuming these would all be single family homes, this is an added population of 1004.36 people, using OFM's multiplier of 2.8696 per home.] We may not [unintelligible] that many. We don't know for sure, I mean, until we do all the wetland surveys and everything else. I mean, that could be considerably less than that. But at a certain point we'd have to say it's no deal if they drop down too far and then there's no enough money to take care of the situation.

Porter The sooner you get your facility halfways (sic) up to capacity, the more it's paying for itself. There's no two ways about it. And this here, I mean, we're good for almost 1600 units. So it looks to me like this is a beautiful thing. I don't see any problem with it.

Cisar One thing council could consider when we have these discussions is if you're going to look at being a utility provider, because you're looking over units per year, and that way -- you might call it excess capacity -- that way you've got that reserve for in-city development. And that would be based on your build-up of the build-out for that number of years and it may be [unintelligible; mumbling].

Porter Do you have any timetables where you've set before you [unintelligible] time for confirmation?

Morris Well, you've got to realize that the capital that it takes to put this thing together is extreme. I mean, if you want to save something out for five, six, seven years, you want to pick up the interest on that money? I mean, let's look at this as a reasonable sum and understand that if somebody's paying for this -- and believe you me it's not the City, it's us. And the lowest interest rates there ever were are right now, but you gotta realize that that isn't what they loan to a developer for. A developer pays a premium rate to be able to get that money. He doesn't borrow it at 5.1% like you can buy a home. He borrows probably somewhere, 8%, 9%, sometimes 10%, 12% depending on what the risk factor is.

Porter Well, now, we would definitely need to address stormwater and water here, sidewalks and so forth. But I think this is a deal that the City should never pass up, as far as I'm concerned. That's the way I see it. I mean, we're going to have -- that First Street has been on our 6-year street plan for the last, no tellin' how many years. And we're going to have to address it sooner or later.

McPherson So you would allow that many homes to go in out there --

Porter Why not?

McPherson -- without any street improvements?

Criswell Well, they're going to have to [unintelligible] when they dig it up, they're going to have to --

McPherson Well, no, all he's going to do -- again, for lack of knowledge, is if you're going to put blacktop or concrete back over it, but that's not -- how about the people that live on that street? What are their thoughts on this? You just want to pass something without having any kind of --

Porter We haven't even passed it yet, but I think we'd be foolish to turn something like this down and not, not look at it.

McPherson Well, I think every one on that street should have an opportunity to express their desire on it.

Morris I think the one thing about it is, though, is that that sewer has failed on that street.

McPherson Well, I know it --

Morris So then what do you do? The next thing is you have an inspector come in and he slaps the city with a huge fine because you're not doing what they're supposed to be doing. Then if you got an extra million dollars laying around, I suggest you guys fix it. Now if you got that kind of money, go ahead and do it. But I know you don't.

Rowe What would the cost be to the City for us to, if we have to pick up the tab for the rest of the work that needs to be done out there, stormwater, curbs, gutters, blacktops, anybody got any ideas?

Cisar Well, depending on the nature of the development that Mr. Morris is looking at -- of course it still goes through an environmental analysis, traffic analysis, you'd be looking at probably three types of impact fees. You'd be looking at county fees, our fee and the impact of that development on Highway 2. At the same time, you can, through your interlocal agreement, work with the county. I think there is a demand for some kind of a part out there, so through that interlocal, maybe specify that any fees collected would be for park in that area.

Morris Um-hm.

Cisar So once you get to that traffic analysis and the environmental analysis, that will answer all your questions.

Porter And these are -- you mentioned the park out there. [unintelligible] we're not going to anything until we say [unintelligible] another. But that would be, probably would have to be a park in that area.

Morris Well, your interlocal agreement requires it. You don't even have to ask me. It's in your guys' zoning regulations.

Rowe Would there be in the interlocal agreement, Rick, how much per unit would we generate that could be applied toward fixing the street down there? Would there be some --

Cisar What you'd look at is -- you gotta look at the impact on the, the traffic impact or the analysis report that's going to be done, and that's going to specify certain improvements. Of course, he's going to be looking at paying impact fees. What you can do is say, "Fix the street and we'll give you a credit on impact fees." That's kind of [unintelligible] do anything about. That's an opportunity to get that street fixed as well. But, again, till you do that traffic analysis, it's kind of hard to say.

Male Yeah, right.

Porter You know, this should be some monies here collected for stormwater, if I'm not mistaken. Maybe I am.

Koenig We don't collect for stormwater.

Porter But we have designated some [unintelligible] that we were going to [unintelligible] we were going to [unintelligible].

Koenig Haven't investigated it yet.

Porter Nothing yet.

Koenig No. We've got a school -- we're doing the study. I believe that's pretty close to being completed. We're working on that as [unintelligible].

Cisar That's part of your comp plan [unintelligible; mumbling].

Boucher Item four, it says the cost of the sewer line may range between $1 and $2 million. That's a big gap. But you're basically saying you'd be willing to spend $2 million, up to $2 million to replace the sewer line?

Morris Well, I'm simply saying I hope I don't have to. [unintelligible] I want you to know that. But I mean, once we're committed to the project, we're committed to the project. I mean, you get halfway through it, you're going to have to finish it one way or another. And the biggest factor that we have in doing this project is where the water table is. And if that water table happens to be excessively high, the cost of construction is considerably higher.

Porter So we'll need a bonding place on this [NOTE: Give that man a gold star!!! Sorry, couldn't help myself…].

Graafstra Well, typically what you would do is you would enter into some sort of utility extension agreement with Mr. Morris' company, and that agreement would incorporate generally the terms of this letter, other points that may be negotiated. Bonds may be part of that [!}, what are the kind of connection fees he might have to pay and all those sort of things. So, and it would probably also provide for some sort of costing [unintelligible] agreement with him as well. So the paperwork that you would see would be some kind utility or sewer extension agreement in conjunction with some sort of cost [unintelligible] breakdown. Some city [unintelligible] points out adopt rural utility plans and ordinance to deal with rural utilities, and those ordinances specify the type of extension agreements and recovery agreements and so forth as part of it. So that's why I pointed that out in my memo, that there's, this is one property in a rural area. There are other properties out there and you may want to address this simultaneously in a more comprehensive fashion to deal with other similarly-situated property.

Everett Thom, I have a question. On the citizens that live along First Street, are they going to have to cough up latecomers' fees, if they're already hooked up to the sewer? Are they going to have to cough up --

Graafstra That's something that would be a matter of discussion and negotiation with Mr. Morris as to the provisions of this cost recovery contract. Presumably if they're just being connected to a new line, and otherwise not influencing capacity from one connection to another, the answer would be no. But what if one of those existing properties -- and I don't know the parcel structure out there -- but one of those existing parcels now has a single family house on it, or to redevelops (sic) would have some kind of multi-family development or multiple houses on it, I assume Mr. Morris could be looking for some kind of cost recovery for the additional dwelling units in there as a result, but that could be a matter of discussion and negotiation with Mr. Morris.

Rowe I think what Jeff is asking was the existing homes that are there now, would they be impacted by this [unintelligible]?

Graafstra And the answer -- and the question is, it's a matter of negotiation. Probably not, would be the result as to existing homes. But if existing properties were further developed in some fashion, I suspect Mr. Morris would negotiate, trying to recover some monies as to those new dwelling units.

Everett So the sewer line is going to be Mr. Morris'?

Graafstra No, he would convey part of the sewer extension agreement, which would convey that sewer line to the City. What he recovers back would be a matter of negotiation with him as part of what's sometimes called a cost recovery contract, or latecomer's agreement.

Rowe There are some guidelines that [unintelligible] is used on those [unintelligible], Thom? Or is it just everyone on an individual basis, or -- ? Isn't there something about the area this line would service, divided by …?

Graafstra Well, there are ways that you can establish those costs. The City is not obligated to allow Mr. Morris to recover anything. I think the way that this has been presented, I'm sure that if the City doesn't allow him some sort of cost recovery, he's probably not going to do this. So it's going to end up being a product of negotiation, if the City chooses to go forward with it.

Criswell He would still get his latecomer's fee if we decided not to allow him to do that inside the City? He'd still be eligible to charge those outside the City [unintelligible] be located [unintelligible]. How would that work?

Graafstra So that portion of the line outside the -- No. The utilities are coming from the City. And so all cost recovery would be negotiated with the City.

Criswell A latecomer's fee, you know, I don't see any problem with that. I mean, you'd had that even with the LID [unintelligible] put in. But like I said, well, like I bought the place over on First Street, or whatever, my son's buying it, you make up a new line through there, we're not going to have to pay for it. There's no latecomer's fee there because you're fixing the old line up there. But if I decide to cut that one-acre in pieces, then all them other pieces all have to pay a latecomer's fee on it.

Porter I notice you've got a 15-year recovery. Is that what we want to do?

Koenig That's the maximum allowable.

Porter That's the maximum?

Rowe Well, another example, there's that property the Sportsman's Club has. We would have to pay a latecomer's fee because we don't have a hook-up.

Criswell That's pretty much standard, I think.

Rowe I don't --

Criswell Unless the City goes and puts the line in themselves. Then I don't know if the fee, they probably wouldn't charge latecomer fee if the city put the line in themselves. But when you have a private contractor do it, that's pretty much standard procedure to put your [unintelligible].

Rowe Tony?

Tony Beedle [Tony Beedle is representing the City's Public Works Department at this meeting] The water line, it has to be replaced all the way out to Morris' property, also. Not just to the city limits.

Porter Right.

Beedle 'Cause it's all 6-inch A. C. all the way out there, so it has to be replaced all the way.

Boucher Any idea of costs on that?

Beedle I would… [trails off].

Criswell It's cheaper than sewer, but not real cheap.

Male Right.

Beedle 'Cause it'll have to be all 8-inch ductile line.

Rowe Well, why would it have to be replaced all the way out, Tony? I mean, I'm sitting here trying to picture why.

Beedle It's only 6-inch. It's not big enough to run fire hydrants and 350 homes out there.

Morris Yeah, but it's 8-inch coming down the hill, [unintelligible] started down the hill.

Beedle It ends right there at your boundaries. It's 6-inch from there to on.

Morris I know, but why not hook in at the dam and go there? [unintelligible] be all ready.

Beedle [unintelligible] does. [laughter] We're not talking about that piece there, Cliff. You're not paying attention to what I'm saying here.

Rowe You're talking about running the 8-inch line on down First Street?

Beedle Yes. All the way to -- and then out Trout Farm Road to his property. Across that little piece from up to his bend.

Rowe Well, I, I'm having trouble comprehending. The water flows down off the hill across the Morris property. Why do we got to put eight, a new 8-inch line…?

Morris Okay. I don't understand that either.

Beedle Because we're going to replace that line. We don't go putting 6-inch line back in anywhere. I mean, it's all --

Rowe Okay.

Beedle -- 8-inch would be a minimum.

Rowe If you're putting a line in, there's isn't much difference between the cost of a 6-inch and an 8-inch, anyway, is there? As far as the line itself goes?

Beedle Oh, yeah. There's a difference there.

Rowe There is?

Beedle You know, in a line that long, I'm not sure what the numbers would be [a semi rolls down Main Street, obliterating Tony's statement, as well as one from Porter].

Porter [unintelligible] would have to have also that coming down all the way and connecting to make it a full circuit in the water line. That would be important, too, wouldn't it?

Criswell I'm confused here, too. If he's going to service off -- if he could service off of a shorter line and we don't disturb the line that goes out there already, why -- are you using [unintelligible]?

Beedle Tearing the road up, and then, like Jim was saying, you're going to put a new blacktop over top of 6-inch A. C.?

Porter No, you don't want to do that.

Criswell I guess what I'm getting at [simultaneous comments] get out there?

Beedle I can't listen to two of you at once there.

Criswell What I'm getting at, Tony, is whey do we have to come from town to get out there? Why couldn't we service that whole area from up by his way?

Beedle Are you gonna -- but you're going to tear up the road, aren't you? And you're going to be putting back a new blacktop? I mean it sounds like we're probably going to have to help with that quite a bit in order to get it done.

Porter Some of [unintelligible] mitigation fee would probably apply there to the cost of the line.

Rowe I think what Tony's saying is we're going to tear up First Street here --

Criswell I know. Just -- I know what he's saying there, but I'm not comprehending why…

Porter I think there's some --

Beedle Leave it like it is?

Beedle [unintelligible] to fix it.

Criswell and the line you have right -- I mean, is it big enough to service what you're using out there right now?

Beedle It's old.

Criswell You have more than enough right now, right?

Beedle No.

Criswell If nothing else goes in out there, you have enough line right now.

Beedle No.

Criswell It's too small already?

Beedle Yes.

Criswell Okay. That's all I wanted to know.

Beedle Fire hydrants, you go out there and run tests on your fire hydrants and you don't have the flow that you need. Beyond…where it veers off over to Cliff's. I don't know that road number out there. But where Gordy McDonald lives out there.

Morris Right. I understand that But then if you build the increase from the bend on down, that those hydrants will have enough flow rate.

Beedle But then it runs out, on out Trout Farm --

Morris But we're going to -- we're going to putting in all the water lines within the plat, so those are going to stand on their own. They're not going to be tore up or anything. They're going to be fine. They're not…because the plat will… those lines aren't going to run right down the road there. I mean, once we pull up that road --

Beedle Okay. What about the line that's [unintelligible] --

Morris We're not going to be in --

Beedle -- what about the line that forks to where you turn off to go to your place?

Morris We won't be in [unintelligible].

Beedle You're not going to go run the line up that way, huh?

Morris No. We're going to run it inside the property that we own, and catch all of our own streets in there. If we run that [unintelligible] six inches through we're going to have all the water it ever needs.

Beedle The City probably wouldn't have to replace it, then, if you have another line running right alongside of it.

Morris No. Fairly close alongside it, maybe 120 feet from it or something.

Criswell And actually, that 8-inch line, say he brought it from his, the lake, could tie in like down on his property in multiple places if he needed it, like the fire hydrants. Is that correct?

Beedle Um-hm. I thought he was going to go his road -- when he said to the Morris properties and [unintelligible] water, I was just assuming it would go to the end of our existing water line.

Criswell I agree when we tear up the road, we need to replace -- but what I'm thinking is, if that doesn't need replacing out there, I know along First Street it probably needs to be replaced. But if we don't need to replace -- we're going to pick up the cost of this water line, I'm sure of that. Well, I'm fairly sure. So what I'm saying if we replace and tear up the street here in town, we replace all water lines in there at the same time, that we shouldn't have to replace them out Trout Farm Road.

Beedle If he's not going out that way, that's fine. I thought he was going out there.

Criswell It'd just -- I'm trying to get all the options here. I'm sorry --

Beedle All there is a 6-inch line out there.

Morris [unintelligible].

Criswell According to new regulations, is the line that's there, is that legal line? That's another question.

Beedle Why do you ask?

Criswell You say you were changing [unintelligible].

Criswell What I mean is, it's legal line as long as it's in the ground, but if you change it, you have to change it to a different…type.

Beedle You know what "A.C." stands for?

Criswell A. C.? Yeah. You do the plastic, then you're going to ductile iron, is that correct?

Beedle You know what "A.C." stands for? [pause] Asbestos Concrete.

Criswell Well, that's the concrete out there. Okay. [unintelligible]. I don't want to know any more [laughs].

Porter It looks to me like this could be workable, but it needs some negotiation --

Criswell Yeah, it needs some bugs worked out of it, but I think, I feel that the City is going to really lose out by not going with this.

Champeaux Laura?

Koenig Um-hm?

Champeaux It sounds like we're going to have to put in, in conjunction with the sewer line and water line, is --

Male Storm drain.

Champeaux Storm drain. And have to go out and get a loan?

Koenig You may have to find some kind of funding source for that. Your reserves right now are going to be pretty well depleted by the time you finish the Everett Water line connection.

Rowe So we're going to pay for the Everett Water line connection, is that right?

Koenig Pretty much. You've got some loans towards that, but not enough. We actually had $1.5 million in reserves to pay part of the City's costs on that, too. I can't really answer these questions without having some cost numbers. I mean, right now you keep talking about a proposal, but nobody's giving us any numbers that we can crunch to see how much our [sounds like she said, "back"] could be, whether loans would be available. The Public Works Trust Fund would classically would have been in the spring that we would have to make application for the water. And potentially the street portion is our portion of it. It's really difficult to answer questions without any numbers.

Rowe And how do we need to know (sic)?

Koenig Well, I guess we've got to have at least a preliminary plan for staff to work of off, where the line's going, how many lineal feet are you talking about, what size…how deep. So if we can get some preliminary information we can run some numbers for you and tell you how much the city would have to come up with and potential funding sources.

Graafstra This is not on our capital facilities plan. You don't even have one, guys.

Koenig Well…that's another issue. I believe that the sewer line extension out in that area is on the sewer capital facilities plan, isn't it? I know the water is.

Morris Yeah, it is

Koenig It's on there?

Morris We checked. Yeah.

Koenig So that would be just another step. It does have to be on our capital facilities plan.

Champeaux Is this in the way -- this [unintelligible] possible way as far as debt capacity of other projects we're looking at doing, and what we currently have on the books?

Koenig Well, your debt capacity right now, you have an extreme amount of debt out for water and sewer. And you do have to pledge the assets of the utilities. So if you have no other funding source or building stops or you're not paying-- you're not getting any connection fees to offset that debt, then your ratepayers will be responsible for the debt. And you may end up in the future having to raise people's water line water fees in order to pay the debt off.

Porter Laura, right now what are we getting for sewer and water hook-ups?

Koenig For sewer and water hook-ups? Um…

Male Forty-one and change.

Rowe $4400 for sewer and $4400 for the water plus $1,000 installation, right?

Koenig Um-hm.

Rowe Of course, that just covers its own cost, I think.

Koenig Right. That just covers the cost of materials. And right now a portion of that goes towards the amount of debt service.

Porter Well, you're going to get well in excess of $2 million for hook-up fees out there. [See endnote #3]

Rowe What proportion of that could be used to pay for water line, stormwater line… Was there a percentage we can go on?

Koenig Um….

Graafstra Remember, you don't have those all up front.

Porter Right.

Koenig Yeah, I know. We have that money at the crunch, [unintelligible] having to pay off debt --

Rowe I understand we don't have it up front, but I mean, what proportion of these fees can we use to pay off the debt, so to speak?

Koenig Well, right now you have a set amount. I'd say at least sixteen hundred on one and probably eight hundred on the other goes towards debt redemption.

Male Is $1600 for sewer or for -- ?

Rowe That's $4400 times 300 homes would be $1.3 million? [See endnote #3]

Koenig Um-hm. See, right now you have almost $7 million in loans out, with the potential when you finish the Everett Water line, you'll have almost $11 million.

Rowe [unintelligible] the City was going to pay for that?

Koenig Part of it. But you have the, after the North Wagley Creek waterline and that, your potential loans right now if you borrowed to the maximum that you've been approved for, you'd be almost at $11 million.

Champeaux What's our capacity?

Koenig Your debt capacity?

Champeaux Yeah.

Criswell Two million [laughs].

Koenig You're really not limited on your water and sewer. You're using the assets of the utility. And so basically it becomes as much as your tax--ratepayer can bear.

Rowe But on the capital on this, if we could see over the four years, three years we had one-point, one-and-a-quarter million coming in to deal with debt capacity, and we could pay that off in a couple years out of its own money coming in --

Koenig We could. The secret of that, what you're doing here, anytime you borrow money on these utility improvements, is gamble on the fact that you will have hook-ups that are helping you pay it off. And right now, that's been the case. I mean, you have a healthy reserve in both of those funds for debt capacity. But it's always a gamble. I mean, with the whole -- the economy's falling right now and you have a slow year, you may have to dip into some of your operating capital to help pay off that debt. And in other years you may have a large amount. I mean, you had almost 200 houses that Craig permitted over a, what? two-year period? So your fund goes up really quickly. And right now that's what we're using to pay off debt. The building activity is down, and the connections are down from last year, and so -- I'm sorry, I don't have my report in front of me to give you exact numbers.

Rowe Okay. So what do we want to do? You want….to get Thom's advice on how to handle this? Or do we want to proceed with it at all? Or do we want to go ahead full bore? Do we want to get somebody to give us some figures so we know what we're talking about? What do we want to do?

Boucher It's worthy of consideration, but we need figures.

McPherson And who would pay for getting all of the information that we really need on this.

Rowe How much of that information would you be providing the City, Cliff? [pause] How much of it could you provide us in the near future?

Morris You know…

Koenig Can you provide the --

Morris -- I have to refer to Derek on that. He'd have a good idea, but I don't know.

Rowe Laura's got a question.

Koenig Can you provide us with at least the lineal feet in that? We have a pretty good idea what it costs per lineal feet to install water and sewer line from the projects we've done, but if you can give us at least that [unintelligible] --

Criswell Don't go by the LID out there.

Sinclair Oh, I can get something, a piece of information I think I can get from…

Koenig From Tony?

Sinclair Probably Craig, probably has it, so I'll, we'll at least get you some rough quantities and probably based on your own aerial topography, a real rough sketch of what, what would need to go in out there.

Koenig [unintelligible] need anything else from him to help us crunch the numbers?

Cisar [unintelligible] units I'll further refine that when you go to an impact statement on the industrial park [unintelligible] see what our reserve might be.

Boucher And I'd like to get water line costs, storm drain costs, and also I would like to see what the cost would be to run sidewalks both sides of the road, Trout Farm all the way up First Street.

Porter One other thing we need to look at, too, and that is the right-of-way. The City needs to look at that.

Rowe Hey, how soon can we have these numbers and figures put together? By the end of the meeting? [laughter from some]

Graafstra The right-of-way issues you're not going to get resolved unless you want to spend some money to do some surveys and title reports.

Criswell But if anything that we need to find out is if we do have right-of-ways.

Graafstra We aren't going to know where they are --

Morris You got 'em. You just don't know where they are.

Graafstra We don't necessarily know where they are until we have a survey done, and we need to really, frankly we need to check on title insurance.

McPherson Why don't we turn this over to the committee and let them take it from there.

Criswell What committee would that be? If you're talking about the land use [unintelligible].

McPherson Is that right? Well, why don't we combine both of them together, the land use and the finance committee so we know where we're going.

Criswell I would like to say one thing before we going any further. Being's I do own property on First Street, as long as we talk about property outside the city limits, I could probably talk about it, but if it has anything to do with First Street, I think I should just excuse myself from that, because I do own property there. [unintelligible].

Rowe I'm glad you mentioned that, because the Sportsman's Club, I didn't think about that. That Sportsman's Club owns four acres over there on First Street, too, and I'm President of the Sportsman's Club, so I guess it….

Criswell Because it would raise -- it's a improvement on First Street, it would raise the value of the property supposedly, so I probably should excuse myself from at least that.

Criswell Anything, anything from High Street this way would be an improvement to my property.

Rowe [unintelligible, talking simultaneously about the Sportsman's Club].

Criswell Beyond that, it's… .[trails off]

Graafstra Well, right now you're dealing with things that are legislative matters. Technically you don't have to excuse yourself. If there's a private benefit there, and if there is still an appearance of conflict, I know that in other instances, council members have excused themselves when there was an appearance of a conflict. So if you perceive that there's a benefit, I know that Perry, for example, on issues on LID 97-1, there were issues with the Grange, so he excused himself in that circumstance, a similar circumstance you have --

Rowe That was very similar. It would increase the value of the Sportsman's Club property, although I don't think we'd have a problem paying our share, it still would increase the value of it. So, okay. I'll do that when it comes to that.

Morris I think you better read the last line, though. This is only good for 10 days. After 10 days, I'm gone and I'll tell ya what, it's developing [unintelligible].

Rowe I'm assuming that… [assembly comments]…we wouldn't have our numbers and figures probably before the next council meeting, which will be two weeks, and that'll be over the 10 days. I'm assuming that. Can we have it by that time, do you think, or -- ?

Cisar We'll try, yeah.

McPherson Well, it's just like the [unintelligible]. We don't have -- you don't know if you've got any right-of-ways out there, there's so many "if's" on this thing, you don't know which way to go. You put a bunch of numbers on the table, but that doesn't mean anything at this point. [simultaneous comments] But you gotta find out if you got a right-of-way out there --

Criswell Well, Tony already said we got a water main out there, so we know we've got some kind of right-of-way.

McPherson Well, that's -- yeah. But like Dusty says, you want to know what it's going to cost. You also have to put in the sidewalks, everything down through there. And we really don't know if we own the land.

McPherson Well, we've run into that problem before in the City, haven't we?

Rowe Where at?

McPherson I'm sur