10.H.
City Council Meeting - FINAL
- Meeting Date:
- 07/01/2014
- Co-Submitter:
- Patrick Bourque
- From:
- Barbara Goodrich, Management Services Director
Information
TITLE:
Consideration and Adoption of Ordinance No. 2014-19: An ordinance of the City Council of the City of Flagstaff, amending the Flagstaff City Code, Title 7, Health and Sanitation, Chapter 7-04, Municipal Solid Waste Collection Service, Section 7-04-001-0009, Fees, by reinstating the $2.50 per ton Environmental Maintenance Facility Fee, repeal of conflicting ordinances, severability, authority for clerical corrections, and establishing an effective date. (Reinstate the $2.50 per ton landfill tipping fee).
RECOMMENDED ACTION:
At the meeting of July 1, 2014.
1) Read Ordinance No. 2014-19 by title only for the first time.
2) City Clerk reads Ordinance No. 2014-19 by title only for the first time (if approved above)
At the meeting of July 15, 2014.
3) Read Ordinance No. 2014-19 by title only for the final time
4) City Clerk reads Ordinance No.2014-19 by title only for the final time (if approved above)
5) Adopt Ordinance No. 2014-19 (effective September 1, 2014)
1) Read Ordinance No. 2014-19 by title only for the first time.
2) City Clerk reads Ordinance No. 2014-19 by title only for the first time (if approved above)
At the meeting of July 15, 2014.
3) Read Ordinance No. 2014-19 by title only for the final time
4) City Clerk reads Ordinance No.2014-19 by title only for the final time (if approved above)
5) Adopt Ordinance No. 2014-19 (effective September 1, 2014)
Policy Decision or Reason for Action:
City staff have narrowed options on the Core Services Maintenance Facility to two viable properties. Extensive analysis was completed on these properties and staff is bringing forward additional discussion to Council on June 24, 2014.
Once the final property decision is made, City staff will be able to quickly move forward with a formal solicitation process to construct the facility. The reinstatement of this fee will allow the City to pay for design and/or construction costs prior to the debt being issued. Once construction is complete, this fee will be used to fund approximately $4.4 million in debt service.
Once the final property decision is made, City staff will be able to quickly move forward with a formal solicitation process to construct the facility. The reinstatement of this fee will allow the City to pay for design and/or construction costs prior to the debt being issued. Once construction is complete, this fee will be used to fund approximately $4.4 million in debt service.
Financial Impact:
This fee is proposed to be reinstated at the prior level of $2.50 per ton at the landfill. At this rate, the fee is estimated to generate $300,000 annually. $300,000 on an annual basis will support an estimated amount of debt of $4.1 million to $4.7 million dependent on market rate conditions and the term for which the debt would be issued.
Connection to Council Goal:
Address Core Services Maintenance Facility
Has There Been Previous Council Decision on This:
Yes. There was a Council decision to implement the $2.50 landfill fee in October, 2007 with a one year sunset and three Council decisions to extend the fee; once in November, 2008 for an additional year; once in November, 2009 until May, 2010; once in May, 2010 for an additional year.
Options and Alternatives:
- Adopt the fee to be in effect on September 1, 2014
- Adopt the fee to be in effect for a date certain other than September 1, 2014
- Delay the adoption of the fee
Background/History:
In October, 2007, staff initiated a discussion with the City Council regarding the need for a new Public Works Maintenance Facility (now Core Services Maintenance Facility). The consensus of Council was that there is a compelling need to research and develop a plan to pursue a new facility. At that time, Council approved a $2.50 per ton fee at the landfill, with a one year sunset, to begin collecting funds for a capital reserve for Environmental Services’ (now Solid Waste) proportionate share of debt service for a new facility. Staff was to provide to Council key components for a facility including facility location, property size, public involvement, and funding options.
In November, 2008, staff provided Council with a list of alternative site locations, facility space needs, and a conceptual layout plan. Staff requested a renewal of the fee until the project could be completed. Council approved the extension of the $2.50 fee for another year instructing staff to produce 1) a property/location selection; 2) conceptual site plan development; and 3) preliminary cost estimate.
In November, 2009, progress had been made on the Core Services Maintenance Facility. As of that date, Staff had 1) completed a property/location selection for the facility, identified the space needs for each Section of the Division, selected a consultant, which Council approved at its August 18, 2009 meeting, who now had the information and was working on the 2) conceptual site plan development which would provide us with the 3) preliminary cost estimate. Council approved the extension of the $2.50 fee until May, 2010 in order to see and decide on a completed conceptual site plan and preliminary cost estimate for the Facility.
In May, 2010, Council extended the collection of the fee for an additional year until it was decided if the Core Services Maintenance Facility would be selected for the November bond election and, if so, the outcome of that election. The $42 million Facility was selected for the bond election but failed and the fee sunset in May, 2011.
In November, 2008, staff provided Council with a list of alternative site locations, facility space needs, and a conceptual layout plan. Staff requested a renewal of the fee until the project could be completed. Council approved the extension of the $2.50 fee for another year instructing staff to produce 1) a property/location selection; 2) conceptual site plan development; and 3) preliminary cost estimate.
In November, 2009, progress had been made on the Core Services Maintenance Facility. As of that date, Staff had 1) completed a property/location selection for the facility, identified the space needs for each Section of the Division, selected a consultant, which Council approved at its August 18, 2009 meeting, who now had the information and was working on the 2) conceptual site plan development which would provide us with the 3) preliminary cost estimate. Council approved the extension of the $2.50 fee until May, 2010 in order to see and decide on a completed conceptual site plan and preliminary cost estimate for the Facility.
In May, 2010, Council extended the collection of the fee for an additional year until it was decided if the Core Services Maintenance Facility would be selected for the November bond election and, if so, the outcome of that election. The $42 million Facility was selected for the bond election but failed and the fee sunset in May, 2011.
Key Considerations:
The City then re-designed the facility that now has an estimated cost of $21.4 million to $27.8 million dependent on whether the City builds on City land or purchases land at a different site. In 2012, the City successfully passed a $14 million dollar secondary property tax/ bond measure to assist with the construction.
The key consideration is the timing of the construction and the accumulation of funds needed to complete the facility as designed. It is estimated that this capital reserve will have a balance of $865,000 at June 30, 2014. Should the fee be reinstated on September 1, 2014, the fee will generate an additional $250,000 in FY2015, for a total of $1.1 million available to be used for the design and/or construction.
When this dedicated landfill fee is collected for a full year, $300,000 is expected to be generated annually. This $300,000 will support an estimated additional $4.4 million dollars in debt. This fee is a critical component to the overall sources needed to fund the construction.
The current posted landfill fee per ton is $41.67. In addition, each ton is assessed $0.25 for a State Recycling Surcharge by ADEQ. By reinstating the $2.50 Capital Reserve amount, the landfill fee per ton will increase to a combined rate of $44.42.
The key consideration is the timing of the construction and the accumulation of funds needed to complete the facility as designed. It is estimated that this capital reserve will have a balance of $865,000 at June 30, 2014. Should the fee be reinstated on September 1, 2014, the fee will generate an additional $250,000 in FY2015, for a total of $1.1 million available to be used for the design and/or construction.
When this dedicated landfill fee is collected for a full year, $300,000 is expected to be generated annually. This $300,000 will support an estimated additional $4.4 million dollars in debt. This fee is a critical component to the overall sources needed to fund the construction.
The current posted landfill fee per ton is $41.67. In addition, each ton is assessed $0.25 for a State Recycling Surcharge by ADEQ. By reinstating the $2.50 Capital Reserve amount, the landfill fee per ton will increase to a combined rate of $44.42.
Expanded Financial Considerations:
The total resources available for the project to date include:
$14 million General Obligation Bonds
$1.1 million in capital reserve (should the landfill fee be reinstated effective September 1, 2014)
$4.4 million in Revenue Debt secured by the estimated $300,000 annual landfill fee proposed by this action
$2.3 million - $4.4 million in land sale/trade proceeds dependent if the City constructs or sells the McAllister Property.
Total resources are $21.8 million - $23.9 million.
$14 million General Obligation Bonds
$1.1 million in capital reserve (should the landfill fee be reinstated effective September 1, 2014)
$4.4 million in Revenue Debt secured by the estimated $300,000 annual landfill fee proposed by this action
$2.3 million - $4.4 million in land sale/trade proceeds dependent if the City constructs or sells the McAllister Property.
Total resources are $21.8 million - $23.9 million.
Community Benefits and Considerations:
The City will benefit in a number of ways by moving from the current location and constructing a modernized facility. By vacating the current site, an infill opportunity in the downtown area of Flagstaff will be available. No planned alternate use has been determined at this time.
By constructing a new facility, the City will be able to better protect and maintain the 420 pieces of equipment currently used on a daily or seasonal basis. Additional capacity will also be provided to Streets, Parks and Facilities for equipment and materials storage as well as consolidating the service personnel for Streets, Parks, Facilities, Fleet Services, Solid Waste Collections and Public Works Administration.
By constructing a new facility, the City will be able to better protect and maintain the 420 pieces of equipment currently used on a daily or seasonal basis. Additional capacity will also be provided to Streets, Parks and Facilities for equipment and materials storage as well as consolidating the service personnel for Streets, Parks, Facilities, Fleet Services, Solid Waste Collections and Public Works Administration.
Community Involvement:
Consult - the City has provided numerous work sessions and agendized council sessions to discuss the progress in the development of the Core Services Maintenance Facility.
Involve - the community will be further engaged as the future of the current Public Works Yard site is determined.
Empower - The community approved the 2012 bond election authorizing the $14 million dollars in funding to be used for this project.
Involve - the community will be further engaged as the future of the current Public Works Yard site is determined.
Empower - The community approved the 2012 bond election authorizing the $14 million dollars in funding to be used for this project.
Expanded Options and Alternatives:
- Adopt the fee to be in effect for September 1, 2014
- Adopt the fee to be in effect for a date certain other than September 1, 2014
- Delay the adoption of the fee