Minutes

             
A Consideration and Adoption of Ordinance No. 2018-40: An ordinance of the Mayor and Council of the City of Flagstaff, Arizona amending the Flagstaff City Code, Title 12, Floodplains, Chapter 12-02, Stormwater Management Utility, by amending the  Schedule of Stormwater Management Utility Service Charges and Fees; providing for repeal of conflicting ordinances, severability, penalties, and establishing an effective date. (Changes in stormwater fees)         
 
  Mayor Evans opened the Public Hearing.
 
Stormwater Manager Chris Kirkendall provided a PowerPoint presentation that covered the following:
 
STORMWATER UTILITY SERVICE CHARGE
OVERVIEW
COUNCIL DIRECTION
COMMUNITY NEEDS
STORMWATER CURRENT TOP 10 PRIORITIES
PUBLIC OUTREACH
 
Councilmember Barotz asked why the Water Commission did not have a recommendation. Water Services Director Brad Hill stated that there was significant discussion and they considered both the ten- and twelve-year options. They did not like either option so they opted to offer no recommendation.
 
Management Services Director Rick Tadder continued the presentation.
 
SERVICE CHARGE INCREASE OBJECTIVES
STORMWATER SERVICE CHARGE – $36 MILLION INCREASE FOR CAPITAL PROJECTS
STORMWATER SERVICE CHARGE – INCREMENTAL INCREASE
$36 MILLION INCREASE FOR CAPITAL PROJECTS - INCREMENTAL INCREASE
 
Councilmember Overton asked if it is possible to leave the current rate and assign it to bond debt over a longer period of time such as 25 or 30 years. Mr. Tadder explained that the current rate would not be enough in that time frame as some of that funding has already been set for other projects. Councilmember Overton asked if it would be enough to fund the federal obligation for the Rio de Flag to which Mr. Tadder responded no.
 
Capital Improvements Engineer Bret Peterson continued the presentation.
 
RIO DE FLAG FLOOD CONTROL PROJECT UPDATE
ARMY CORPS OF ENGINEERS’ ITEMS
BNSF RAILWAY COORDINATION ITEMS
PUBLIC INVOLVEMENT UPDATE
 
Councilmember McCarthy asked if all three options would allow for the Rio de Flag project to be funded along with all the other capital projects. Mr. Tadder stated that all projects would be completed but the pay as you go options would delay some of the projects until adequate funding is generated.
 
Councilmember Barotz asked who pays the stormwater fee. Mr. Tadder stated that everyone within City limits pay the stormwater fee. The residential fee is capped at five ERUs.
 
Mr. Tadder continued the presentation.
 
ACCELERATED PROJECTS SCENARIO
 
Ms. Goodrich stated that the City is at a point with the Army Corp. of Engineers (ACE) with the Rio de Flag project where it is important to understand that as early as October 2019 ACE may be asking for solid assurance that the City has the $30 to $36 million it needs for its share of the project. This is why the options are being provided now to generate the funds sooner rather than go through a pay as you go program. While a pay as you go program would get the $36 million it would not happen soon enough.
 
Councilmember Overton asked if there are other funding mechanisms if the Rio de Flag project did not come to fruition. It is difficult to ask citizens to pay for a project that has been going on for 15 years with no assurance it will actually come forward. Ms. Goodrich stated that the City needs to start accumulating funds regardless of who does the project. In terms of other funding alternatives, she believes that as long as the City can show ACE that there is a plan in place to accumulate the funding, it would be enough to move forward and give the Council time to develop an appropriate fee schedule.
 
Vice Mayor Whelan asked if the Council were to move forward with revenue bonds and the project were to not come forward if the bond funds could be returned. Ms. Goodrich stated the Council could give direction to return those funds. Mr. Tadder added that approving the rate does not authorize the debt, that is a separate action by the Council.
 
Mr. Tadder concluded the presentation.
 
ACCELERATED PROJECTS SCENARIO - $33M/25 YEAR DEBT
ACCELERATED PROJECTS SCENARIO - $33M/25 YEAR DEBT – INCREMENTAL INCREASE
FLAT RATE SCENARIO
 
Mayor Evans asked if the Coconino County Flood Control District has provided any indication that the Rio de Flag project could be funded by the District. Ms. Goodrich stated that the District has not provided that information.
 
Vice Mayor Whelan stated that the Rio de Flag project has been going on for a very long time and it now looks like a real possibility to get it done. The City needs to move on the rates and keep the fee as small as possible. If the way to go is revenue bonds that can be pulled back if the project does not go forward then that is what she is supportive of doing.
 
The following individuals addressed Council in opposition of changes to stormwater fees:
  • Stephen Vedral
  • Rick Lopez
  • Andy Fernandez
The following comments were received:
  • It is difficult to absorb the doubling of anything into a budget.
  • It is already expensive to live in Flagstaff this will make it even more so.
  • The Rio de Flag project began as a $20 million project and now it is a $130 million project.
  • Skeptical that ACE will actually come through and deliver the project.
  • The what ifs need to be addressed before asking citizens to shoulder the cost.
  • NAU needs to come to the table as a financial partner, they have a huge impact in the event of a flood.
  • The City has been dragging their feet on the project and now the citizens are paying for that.
A written comment card in opposition of changes to stormwater fees was submitted by Joe Galli.
 
Councilmember Barotz stated that putting this off only makes the City more vulnerable and if ACE does not come through the money will be needed more than ever to complete the project without them.
 
Mayor Evans agreed and offered that there is a billion-dollar issue right in the middle of the city that needs to be addressed with or without ACE and the City needs the funding to address it.

Councilmember Overton agreed that the project is a top priority and the City is at capacity. He is advocating for looking at a flat tax and using that revenue for bonding to show ACE that a plan is in place. Without 100% plans he is not comfortable charging the citizens for something that is still unknown.
 
Councilmember Odegaard offered that he believes the City is at a crossroads with ACE committing to begin construction by 2020. He expressed support for revenue bonds that are paid for by the stormwater fee. He acknowledged that it is an increase, but it is one where the community will see a physical impact in the City.
 
Councilmember McCarthy stated that he is supportive of the 25-year bonding option.
 
Mayor Evans asked if it would be possible to adopt the ordinance and delay the collection of fees until July 2019 to see if ACE will deliver as promised. Mr. Tadder explained that it is an option should a majority of Council be supportive.
 
There being no further public comment Mayor Evans closed the Public Hearing.
 
Councilmember Putzova stated that the stormwater fee must be part of the solution because it is the impervious surfaces that are contributing to the issue.
 
  Moved by Councilmember Charlie Odegaard, seconded by Councilmember Jim McCarthy to read Ordinance 2018-40 by title for the first time with the debt financed option.
  Moved by Mayor Coral J. Evans, seconded by Councilmember Scott Overton to amend the motion to have a start time of July 1, 2019 and reserve the option to bring the ordinance back in case the Army Corp of Engineers does not meet the first deadline.

Councilmember Putzova stated that the proposed rate per ERU is regardless of the size of the surface; she asked why a tiered approach has not been pursued based on the side of the property. Ms. Goodrich explained that for the City to provide a tiered rate for a particular user it has to show a direct impact to some part of the infrastructure. For example, if the City had to put in larger storm sewer drains for a big box store because of the water that comes off the surface of that property versus a neighborhood which does not need as large of a drain, then there would be a clear nexus to create tiered rates. However, there is no variation in the infrastructure needed regardless of the size of the surface. Mr. Solomon added that stormwater rates have to be standard across the board; if they are not, the rates can be considered an arbitrary fee.
  Vote: 5 - 2
 
NAY: Councilmember Charlie Odegaard
  Councilmember Jim McCarthy
  Vote: 7 - 0 - Unanimously
  AN ORDINANCE OF THE MAYOR AND COUNCIL OF THE CITY OF FLAGSTAFF, ARIZONA AMENDING THE FLAGSTAFF CITY CODE, TITLE 12, FLOODPLAINS, CHAPTER 12-02, STORMWATER MANAGEMENT UTILITY, BY AMENDING THE SCHEDULE OF STORMWATER MANAGEMENT UTILITY SERVICE CHARGES AND FEES; PROVIDING FOR REPEAL OF CONFLICTING ORDINANCES, SEVERABILITY, PENALTIES, AND ESTABLISHING AN EFFECTIVE DATE.

A break was held from 7:51 p.m. through 8:05 p.m.