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Minutes for City Council Work Session

 WORK SESSION
TUESDAY, FEBRUARY 28, 2017
COUNCIL CHAMBERS
211 WEST ASPEN AVENUE
6:00 P.M.
 



WORK SESSION
 
1.
CALL TO ORDER

Mayor Evans called the meeting of February 28, 2017, to order at 6:11 p.m.
NOTICE OF OPTION TO RECESS INTO EXECUTIVE SESSION
Pursuant to A.R.S. §38-431.02, notice is hereby given to the members of the City Council and to the general public that, at this regular meeting, the City Council may vote to go into executive session, which will not be open to the public, for legal advice and discussion with the City’s attorneys for legal advice on any item listed on the following agenda, pursuant to A.R.S. §38-431.03(A)(3).
 
2.
Pledge of Allegiance

The Council and audience recited the Pledge of Allegiance and Councilmember Odegaard read the Mission Statement.
 
3.
ROLL CALL
NOTE: One or more Councilmembers may be in attendance telephonically or by other technological means.
PRESENT:

MAYOR EVANS
VICE MAYOR WHELAN
COUNCILMEMBER BAROTZ
COUNCILMEMBER MCCARTHY (arrived at 6:13 p.m.)
COUNCILMEMBER ODEGAARD
COUNCILMEMBER OVERTON
COUNCILMEMBER PUTZOVA (telephonically)
ABSENT:

NONE







Others present: City Manager Josh Copley and City Attorney Sterling Solomon.
 
4.
Preliminary Review of Draft Agenda for the March 7, 2017, City Council Meeting.*
* Public comment on draft agenda items may be taken under “Review of Draft Agenda Items” later in the meeting, at the discretion of the Mayor. Citizens wishing to speak on agenda items not specifically called out by the City Council for discussion under the second Review
section may submit a speaker card for their items of interest to the recording clerk.

None
 
5.
Public Participation

Public Participation enables the public to address the council about items that are not on the prepared agenda. Public Participation appears on the agenda twice, at the beginning and at the end of the work session. You may speak at one or the other, but not both. Anyone wishing to comment at the meeting is asked to fill out a speaker card and submit it to the recording clerk. When the item comes up on the agenda, your name will be called. You may address the Council up to three times throughout the meeting, including comments made during Public Participation. Please limit your remarks to three minutes per item to allow everyone to have an opportunity to speak. At the discretion of the Chair, ten or more persons present at the meeting and wishing to speak may appoint a representative who may have no more than fifteen minutes to speak.
Jeff Meilbeck, CEO of NAIPTA, addressed the Council and expressed his thanks and compliments to the Public Works department and the Streets Section for their work during the recent snowstorm. NAIPTA was able to keep their normal operations and maintain an 80% on-time schedule because the streets were well plowed and drivable.

Jeff Coker addressed Council about the traffic issues along Highway 180. He expressed that the problem is year-round and it impacts the neighborhoods in the area negatively. He urged the Council to find solutions to the problem and not put it off any longer.
 
6.
Discussion and Direction on Reclaimed Water Rates and the Use of Reclaimed Water for Non-recreational Purposes.
Utilities Engineer Ryan Roberts provided a PowerPoint presentation that covered the following:

RECLAIMED WATER RATES POLICY DIRECTION AND NON-RECREATIONAL USE OF
RECLAIMED WATER
QUICK REVIEW
SEVERAL OPTIONS FOR COUNCIL TO CONSIDER

Councilmember Overton asked if the past recommendation of the Water Commission of 3% can be correlated to the percentage of potable it was. Mr. Roberts stated that the reclaimed rates were set at 35% of the potable rate.

Vice Mayor Whelan asked if the rates are now at 35%. Mr. Roberts explained that the recommendation of the rate consultant was to keep the rate at 35% of potable. The rates have been at 35% except there was no adjustment to the rates in 2016 so it is now below 35%. Councilmember Overton asked if the City had gone with the 3% increase in 2016 what percentage it would be now. Mr. Roberts stated that during the last rate study the Council moved forward with the 7% increase. To maintain a 35% of potable rate it has to be based off of the approved water rate that was set in April 2016.

Mr. Roberts continued the presentation.

CITY OF FLAGSTAFF WATER AND SEWER RATES
OPTION 1 – COMPARISONS

Councilmember Overton asked if the comparison cities potable rates are different from Flagstaff. Mr. Roberts stated that they are different but they are not substantially higher or lower. Councilmember Overton requested information on what the other cities rates include and how the percentage equates with the cost per thousand.

Mayor Evans asked if the percentage was randomly selected or if it was determined through a rate study. Mr. Hill stated that Phoenix elected to do it by policy and many cities started off that way so they did not do a cost of service study. Mr. Solomon added that there is no requirement to do a study for reclaimed water rates.

Councilmember Barotz offered that the current focus is on the amount the City is going to charge for the water but it is necessary to discuss the rate structure and what the City’s policy objectives are. Mr. Roberts added that for many the reclaimed water structure mirrored the potable rate structure.

Vice Mayor Whelan stated that the structure was developed at a point where the City did not realize the worth or value of reclaimed water. It is the City’s obligation to offer reclaimed water to City customers and in the past two years that has not been possible. Reclaimed water is becoming more and more valuable for the City’s watering and replacing potable in some instances. As a Council she would like to move in a direction that provides better access to reclaimed water.

Councilmember Overton offered that while reclaimed water is a valuable water source the infrastructure is expensive especially compared to potable water infrastructure. The closer the reclaimed rate gets to the potable rate people may shy away from the expense of the infrastructure because there is no cost benefit to them. It is a delicate balance of encouraging reclaimed water use and covering costs.

Mr. Roberts continued the presentation.

OPTION 2 TREATMENT PROCESS EXPENSES
CURRENT BUDGETED 5-YEAR CAPITAL IMPROVEMENT PROGRAM

Councilmember Barotz asked if the idea is to move the line where the reclaimed customers would pick up some of the expenses. Mr. Roberts stated that the line may not be moving but it may be treated differently. It may be taking the percentage of water produced into the reclaimed system versus the total volume treated and change the percentage of expenses based on the total amount that goes out into the reclaimed system. It is more about how to justify shifting more of the expenses that are needed to produce and distribute reclaimed water.

Vice Mayor Whelan asked if the difference between wastewater and reclaimed water is the point where chlorine is added. Mr. Roberts stated that the point is where the water goes into the wet well for de-chlorination.

Mr. Roberts continued the presentation.

IF RATES ARE INCREASED ADDITIONAL CAPITAL PROJECTS
SUMMARY

The following individuals addressed Council with regard to reclaimed water rates:
  • Ward Davis
  • Robert Vane
  • Kathleen Nelson
  • Chris Shields
  • Vicki Duncan
  • John Norman
The following comments were received:
  • The rate should go up but there should be a stepped process that people can live with.
  • Flagstaff’s rate is right in the middle based on other cities, there are many above and many below.
  • Flagstaff is at 32.1% of potable; to get to 35% would require a 9.1% increase in the rate.
  • The cost of producing reclaimed water is $1.62; it is surprising that when looking at the reclaimed rate sheet every number is below $1.62.
  • The Flagstaff Water Group encourages Council to stick with the practice of setting reclaimed water rates by policy.
  • There is a strong historic precedent to get to 35% of potable; go at least that far and see if it covers the cost.
  • Prepare for the future and consider the rates proposed by staff or higher.
  • There is a fine line with the rates for encouraging or discouraging reclaimed water use but the evidence is that the City is not charging enough.
  • The previous rate study did not fully evaluate the cost of reclaimed water.
  • The rate structure needs to be effective and needs to pay for the cost of maintenance.
  • Some of the treatment costs to provide A+ water should be passed on to the reclaimed users.
  • Reclaimed water is very valuable and there is a high demand for it; there should be criteria on how the water gets used.
  • The entities that are purchasing reclaimed water are providing high paying jobs and are good partners in the community.
  • If the rates increased there would be an impact to the businesses that use it.
  • Make a decision about going back to pricing by policy and wait until the next full rate study to look at rates for potable and reclaimed.
  • The Country Club does use an exorbitant amount of water but that water is spread out over multiple locations; a high increase could jeopardize business.
  • Get the rates to 35% and raise additional income to look at other capital items.
A written comment card in support of reclaimed water tier rates was submitted by Dawn Dyer.

Councilmember Barotz stated that the declining tier rate structure is concerning for her.

Councilmember McCarthy stated that he is opposed to doing a rate study. He indicated that there should be some research on the feasibility of the reuse of reclaimed water.

Councilmember Putzova stated that Council needs to decide what the policy is for the use of reclaimed water. She feels that Flagstaff should be conserving reclaimed water as a valuable commodity. She would like to see a tiered rate structure for all reclaimed water and customer classes; the idea that the more you use the more you pay is reasonable.

Councilmember Odegaard offered that the City has made a policy that it wants the use of reclaimed water to be used more and so the rate is lower to incentivize use. The City needs to get back to the 35% of potable at some point but not all in one year.

Mayor Evans stated that the use of reclaimed water was incentivized in an effort to encourage use and conserve potable water; there are now other uses for that water. Council set the policy of reclaimed rates being 35% of potable and it is important to get back to that level. A majority of Council is in favor of setting the rate by policy.

Councilmember Overton suggested reviewing the previous rate study; the options included may or may not be appropriate but it ties the entire program together with some cost benefit analysis. The rate study gets the City to 35%; if that is the goal and policy, use the data as a starting point. He added that he does not want the rate to get to a point where there is no benefit to people to tap into the system.

Mr. Copley explained that the policy to get to the 35% is something that can be handled by staff but the tiered rate structure will need a rate study. Staff will come back to Council on what that study would look like and what things need to be justified to move into that rate structure.

Mr. Roberts continued the presentation.

NON-RECREATIONAL USE OF RECLAIMED WATER
CUSTOMERS REQUESTING RECLAIMED WATER SYSTEMS
RECLAIM DISTRIBUTION SYSTEM MAP
PROCESS TO INCREASE CUSTOMERS

Councilmember Putzova stated that she would like to understand what it would look like if more potable water users moved to reclaimed water. She asked what building code changes can be made to require future development to use reclaimed water. It is a policy decision if the Council wants to go in the direction of requiring future development to replace potable water. Mr. Copley offered that staff had some preliminary discussions about this and staff can spend more time looking at incentives and changes to the Building Code if that is the direction Council would like to go.

Councilmember Overton stated that the problem is that the ground infrastructure does not support putting reclaimed pipe into homes. Direct reuse and different treatment strategies may have a better cost benefit than converting every toilet in the community to reclaimed use.

Kathleen Nelson addressed Council stating that there is a lot that people can do within their own homes; people can reuse their water to flush their toilets. Laws would need to be changed to allow people to do that and the infrastructure would need to be available.

Councilmember Putzova stated that the cost of Red Gap Ranch is high and whatever the City can invest in to delay the use of Red Gap is going to help in the long run. It comes down to prioritizing uses for reclaimed water and potable water.

Vice Mayor Whelan asked Rich Bowen with NAU to speak about the system that they have in place. Mr. Bowen explained that NAU has been using reclaimed water systems in their new construction since 2008. In older facilities that could not be re-plumbed, they installed ultra-low flow shower heads and toilets and increased conservation education. NAU has reduced their potable water use quite significantly; it is a major investment and it helps when there is a financial benefit to offset the cost.

A break was held from 8:27 p.m. through 8:40 p.m.
 
7.
Consideration of Tiered Rates for Non-Residential Potable Water Customers.
Mr. Roberts provided a PowerPoint presentation that covered the following:

WATER RATES TIERED RATES FOR NON RESIDENTIAL POLICY DIRECTION
QUICK REVIEW
RATE SETTING PROCESS
PRIOR RATE CONSULTANT ADVISED COF
MOVING FORWARD: SUMMARY

The following individuals addressed Council regarding tiered rates for non-residential potable water customers:
  • Ward Davis
  • Robert Vane
  • John Viktora
The following comments were received:
  • Tiered rates are the strongest conservation tool a city has.
  • Tiered rates are a powerful incentive for businesses.
  • Businesses can often times save more effectively then residential users.
  • Two-thirds of Arizona cities used tiered rates for commercial users.
  • The Council should at least be willing to look at tiered rates with the next rate study.
  • Start with the fact that water is life and work from there.
Councilmember Barotz stated that she is willing to defer this issue and wrap it into the next rate study instead of doing a separate study. Councilmember Overton agreed stating that he feels it is a wise choice to include it with the next study. Councilmember Odegaard also agreed and stated that he would like to see more detail in the next study regarding tiered rates for commercial users. He does not want to penalize water use but the City needs to move its goal of water conservation forward. Vice Mayor Whelan and Councilmember McCarthy also agreed.

Mr. Copley stated that prior to going out to bid for the consultant, staff could come to Council with a scope of work so there is a clear understanding of what is wanted and needed to accomplish the study. Councilmember Barotz requested that one of the qualifications be experience evaluating tiered structures of commercial users in Arizona.
 
8.
Discussion of "Ban the Box" - Fair Chance for Workers With Records.
Mayor Evans stated that approximately 636,000 people are released from prisons every year. Inmates who are released from state prisons have a five-year recidivism rate of 76.6% and the number one reasons given is lack of employment and economic opportunity. Removing the conviction question from job applications is the best way to ease hiring barriers and create a fair chance to compete for a job. Removing the question would allow applicants to be judged on their qualifications first without the stigma of a prior criminal record. She is asking the City to ban criminal history questions prior to the job interview or before a conditional job offer if no interview occurs. She would like for that policy to be extended to all City contractors and sub-contractors and if that is not legal then extra points should be awarded to contractors that have a Ban the Box policy.

Councilmember Overton stated that he is not interested in the policy; the City has every right as an employer to ask those questions and an applicant has an opportunity to explain their history. He is not in favor of not having a clear picture of an applicant’s history up front; this is especially concerning for law enforcement and those positions that work with the youth in the community.

Mayor Evans further explained that criminal history can be asked during an interview and background investigations would still be conducted. This policy would eliminate any pre-screening based on criminal history; people are pre-disposed to automatically set aside people based on history. It would allow people to tell their story in the interview rather than being eliminated right away.

Councilmember McCarthy asked if staff from Human Resources has any comments.

Human Resources Director Shannon Anderson explained that the hesitation to change the application has been that there is a cost associated with modifying the application online as well as printing and that money has not been budgeted. As far as legality, eliminating the box is legal. She stated that background checks are done on all benefit eligible employees, not temporary employees. For temporary employees in Parks, Recreation, Library and some Housing Authority positions there is a fingerprint process for them.

Mr. Solomon added that he would like to look further into the legality of applying the policy to City contractors and sub-contractors.

Councilmember McCarthy stated that he would feel more comfortable awarding additional points to contractors and sub-contractors who have this policy in place rather than mandating it. Councilmember Barotz agreed stating that she would prefer not to impart the City’s value choice on this issue to its contractors.

Councilmember Barotz asked about Council’s involvement with administrative functions such as this. Ms. Anderson stated that this change would not be an update to the Employee Handbook and she does not believe that the change would rise to the level of coming back to Council for approval. Mr. Solomon explained that there is a fine line between administrative action and policy action; he would like to work with Human Resources to look further into the issue.

Councilmember McCarthy asked if there is a majority in favor of moving this forward, would the item come back to Council. Mr. Copley stated that he did not feel bringing it back to Council would be appropriate. Council has had the opportunity to express desire to the City Manager, now the decision is left to him and administration on if and how it will be enacted.

A majority of Council is in favor of forwarding the request to the City Manager for consideration.
 
9.
Discussion of Reaffirmation of City's resolutions speaking to Flagstaff's commitment to diversity, community, and fairness.
Mayor Evans stated that she requested this item because there is a lot of fear in the community with regards to the immigrant population, the LGBTQ population and others because of some of the things happening at a national level. She would like to look at the different resolutions that speak to the City’s values and come back with a strong reaffirmation of them. There are people in the community who are very fearful and doing something like this would go a long way.

A majority of Council is in favor of moving this forward.

Mr. Copley explained that his intent would be to work on this in the City Manager’s Office, send it to the City Attorney to make sure it meets legal requirements then bring it back to Council as soon as possible.
 
10.
Discussion re Current Issues Before Arizona Legislature and Federal Issues.
Assistant to the City Manager Gail Jackson provided a brief update on state and federal issues. At the federal level President Trump is addressing Congress and he is expected to talk about the budget, health care and tax reform.

Staff is planning and preparing for the upcoming legislative lobbying trip to Washington D.C. and more information will be provided soon.

Ms. Jackson provided a brief update on HB2121, HB2086, HB2213, HB2116, HB2179, SB1487 and SB1142.

Mr. Copley stated that he will be providing an overview of the lobbying trip and the briefing book at the March 21, 2017 meeting. After the trip he will come back with a wrap up report as well.
 
11.
Review of Draft Agenda Items for the March 7, 2017, City Council Meeting.*
* Public comment on draft agenda items will be taken at this time, at the discretion of the Mayor.
Councilmember McCarthy stated that he may have some comments on item 9A regarding a preliminary plat for The Wedge. Mr. Copley explained that it is a consent item but he can pull it to ask questions.
 
12.
Public Participation

None
 
13.
Informational Items To/From Mayor, Council, and City Manager; future agenda item requests.
Councilmember Barotz wished her father a happy 89th birthday.

Councilmember Odegaard stated that he attended the NAU briefing tour. He expressed disappointment with the presentation and is hopeful for a meeting with the Arizona Board of Regents in the future to discuss concerns and challenges NAU has put on the community.

Councilmember McCarthy reported that he also attended the NAU briefing tour; it was a positive first step and agreed that it would be good to have a meeting with the Board of Regents.

Mayor Evans expressed appreciation to NAU for hosting the City Council. She stated that the Board of Regents will be in Flagstaff in June and September and it would be nice to try and coordinate a meeting with them while they are here as there are a lot of issues and opportunities that can be discussed.

Mayor Evans requested a FAIR item for a resolution supporting the National Park Service; they are $12 million behind in maintenance and are asking for support to have the Federal government provide more funding for the repairs needed.
 
14.
Adjournment

The Work Session of the Flagstaff City Council held February 28, 2017, adjourned at 9:35 p.m.


 
 
_______________________________
MAYOR
ATTEST:
 



_________________________________
CITY CLERK