Littleton City Council Meeting Minutes – April 15, 2008

Littleton City Council Meeting

15 April 2008              

 

Unscheduled Appearances

Frank Atwood invited the public to attend the Pub Meeting on Thursday night (April 17) at the Buck Center beginning at 7 pm.  The topic for discussion is the BIAAC Report.

 

On Wednesday, May 7, Chris Gibbons will be speaking about under-performing and other shopping centers.  Everyone is invited to attend the meeting that will be held at Bemis at 10:00 am.

 

Atwood also encouraged people to get on Paul Bingham’s email list to keep themselves informed on the meetings in Littleton.  Paul’s phone number is 303.798.0865.

 

Consent Agenda

A motion to approve the use of the Littleton City Center for the Taste of Western Welcome Week and Silent Auction was approved 7/0.

 

Public Hearing to Rename Upper Ridgewood Park to Charley Emley Park

Joan Meister spoke in favor saying it would be a great justice to name the park after Charley.

 

Bob Tonsing also spoke in favor saying Charley was probably the most under-appreciated Mayor and councilmember.  He ran a tight ship and often worked behind the scenes.  Charley provided leadership for getting several projects into Littleton – Littleton Hospital, the South Platte Trail and Light Rail.  Tonsing thought it was more than appropriate for an enduring tribute to Charley.

 

Jim Reeves said Charley worked hard for Littleton and he loved this city.  There was no one more fitting to have a park named after him.

 

Motion passed 7/0.

 

Sewer Rates and Tap Fees for 2008

Blosten said it was necessary to make a decision on the rates in order to get the bills out to their customers by the deadline.

 

Clark asked the council to suspend their rules in order for him to make a presentation which was approved 7/0.

 

Clark said the new proposed 2008 sewer rates were needed for three reasons:

ü      To increase revenues.

ü      To equalize the cost burden between new users and existing users.

ü      To equalize the cost burden between inside city and outside city users.

 

As background Clark said the City staff proposed a rate increase of 4% in treatment fees for both the inside City and outside City users and no increase in tap fees.  Increasing the rates from 2008 to 2013 would get the revenues to meet the expenditures on an annual basis.  The loan the City has for the plant expansion requires a $5 million reserve at all times.  The staff plan reduces the reserve to $5.1 million in 2012.  Clark said the staff plan “achieves an increase in revenue, but does not equalize the cost burden between new users and existing users, nor does it equalize the cost burden between inside City users and outside City users.”

 

Clark, at a previous study session, proposed a rate plan of his own.  Clark proposed to raise the outside user rates by 20%, leave the inside user rates at the current level and double both the inside and outside tap fees.

 

Clark said the expenses of the plant are greater than the revenue.  The staff plan projects a $9.8 million deficit in the next four years.  The difference will be covered by spending down the reserve to its lowest of $5.1 million in 2012.  A dip within $100,000 of he minimum required concerned Clark.  His plan also produces a deficit but the reserves are spent down much slower with the fund balance not dipping below $7 million in 2013.

 

The deficit is not caused by treatment costs but by the debt service for the plant expansion loans.  “Revenue collected from user treatment fees exceeds the costs of operating the plant and has exceeded the cost of operating the plant in 2006 and 2007.  The debt service for the 2004 loans causes expenses to exceed revenue.  Since tap fees are not set at a level to cover debt service payments those payments must be covered by user treatment fees.  In other words, current users are subsidizing new users by making part of the loan payments for the expansion project.”

 

Clark reminded council that current Council policy “is that tap fees should be set to cover capital expenses, so growth pays for growth.”  Clark’s proposal would increase the inside tap fees from $2,500 to $5,000 and the outside tap fees from $2,828 to $5656.  This increase will reduce the amount users are paying for the debt.

 

Clark also made the argument that the cost of sewage treatment is directly related to the amount of sewage treated.  We currently bill a flat fee regardless of how many people live in the household.  The amount of sewage being treated per household can be estimated from the number of people living in the household.  The latest census indicates “that on average more people live in each housing unit outside the City than live in each housing unit inside the City of Littleton.  The difference between the density of people per housing unit outside the City and inside the City is slightly more than 23%.”

 

Clark said “infiltration” – the amount of ground water that seeps into the sewer pipes and is not related to sewage collection – still has to be treated and paid for.  Infiltration costs are directly related to how long the pipes are and the pipes from the outside areas are longer creating more infiltration increasing the amount of flow from the outside users.

 

Clark concluded that raising the outside users rates by 20% ($30) the ‘inside City users will still be subsidizing outside users treatment fees by paying a disproportionate amount for treatment and by overpaying for inside City collection costs.”  We have to increase revenues or we will go broke.  Existing users are paying unfair costs and to achieve ultimate fairness requires a disproportionate increase to the outside users just as has been done to the inside users in the past.

 

Public Hearing

David Mitchell looked into purchasing a sewer tap in 2003 and was told that upon receiving a sewer tap he would have to begin paying the user fees.  He checked into a tap few a few years later and was told the same thing.  Mitchell projected a copy of the sewer tap application that clearly states that a sewer bill would begin upon the payment of the sewer tap fee.

 

Mitchell said Roxborough has not paid their user fees since they paid their tap fees and it has cost the City considerable loss in revenue.  The citizens have been paying more so others can pay less.  He supported the proposed increases introduced by Clark.

 

Dale Shields complemented Clark on his presentation saying it was the first time in four years he has seen something on the sewer rates presented in an easy to understand way.  He was in favor of Clark’s rate increases.  He quoted Caesar, “Evil that men do lives after them.”  He is not sure how we got saddled with this problem but we did..

 

Dave Svenson supports the increase in tap fees and outside rate increases.  The issue for him is on how it is implemented.  He said it was not good business, not a good message and says that we are closed for business in Littleton if we do not allow a 3 to 6 month grace period in order to give developers time to get their projects started and time to work the new rates into their pro formas.

 

Kevin Lierman (sp?), an outside user, thanked Clark for his presentation and said it would have been helpful to have the information when he received the communication from his sewer district.  He asked for clarification on the current differences in rates between the inside and outside users.  Clark explained the difference was in the collection costs.  He pays, through his property taxes, for his collection and the inside users pay Littleton for their collection.  Clark also explained that they are bound by contract to charge the same rate to all the outside users and the same rate to all the City users..  Lierman said as an outside user with no say in voting for the council – can you see how this might seem self-serving and unfair?  People needed to be treated fairly and to raise their taxes and not to raise others is not fair.

 

Scott Milman, n(sp?) who is running for the Ken Caryl Board, said people are stunned and don’t understand.  Clark’s presentation was interesting but he is confused by the $5 million reserve requirement.  Wouldn’t you want to run with a minimum surplus?  The staff plan is more fiscally responsible.  He would like to see a more thorough and thoughtful look at the rates and delay the decision.

 

Ken Munds, (sp?) on the Roxborough Sanitation Board of Directors, said Roxborough and Littleton cannot stand alone economically in any effort to provide waste services to our respective residents.  The costs are too important to be determined by any one entity.  Only an independent collaborative sewer rate study can provide fair rates..  He expects the council to represent all connector districts fairly.  We can’t vote for you but ask that you delay the decision until a necessary rate study be completed.

 

Terry Lecking (sp?) asked the council where she should get the money to pay the increase in her rates.

 

Robert Herndon thanked Clark for the presentation.  The proposed increases will result in rent increases for people.  He said this council had inherited a poorly conceived debt.  You agreed to a debt that you can’t pay – you are in a box.  He strongly urged the council to reserve judgment on the proposal and do an independent study.  It was inconceivable that it was not a cooperative effort.  He preferred an incremental increase over time.

 

Larry Moore, Roxborough Water and Sanitation General Manager, stated his support for the staff’s proposed increase.  He also asked for a collaborative study of the rate and tap fees to be partially funded by the City.  They have never been part of the past rate studies and through their Intergovernmental Agreement the council accepted the responsibility to represent the outside customers.  The rate issue will continue to a problem.  There is a need to work collaboratively to develop long-range tap and use fees. 

 

Ann Castle, General Council for Ken Caryl, said Ken Caryl is not opposed to the tap fee increase and not opposed to rate increases if they impact all users.  We understand the shortfall in debt service.  She questions some of Clark’s numbers used in his presentation.  She is uncertain that infiltration is due solely to the length of the lines – infiltration could exist in older lines.  She supports the rate study and then set the rates proportionately.

 

Pat Fitzgerald , Sewer Plant Manger for two outside districts, said he had sent a lot of information to the council this past week and through the past years.  He presented a chart claiming that outside users were subsidizing the inside users collection costs.  He claimed 4% is both adequate and appropriate.

 

Clark questioned his numbers.  How did you get the collection revenue?  Clark said he understated the revenue – it is not $190,000 but $406,000.  He told Fitzpatrick that he used the right factor in the single family and multi family charts but did not use the right factor in the commercial chart.  Clark said the commercial accounts subsidize both the inside and outside treatment costs.

 

Fitzgerald said nothing screams more for a study than a staff recommendation that is so different than Mayor Clark’s recommendation.

 

Judith Ikes, (sp?) 30 years an outside user and on a fixed income, cannot pay the 20%.  She has not been represented by her water district.  Council needed to think equitably about those here tonight.  She was protesting – taxation without representation.

 

Jim Kerr, HD28, thought the fee increase was excessive.  The agreements were made in 1983 and the world has changed since then.  They need a comprehensive audit.

 

Ron Golden said the increase will have a direct impact on the development at Prince and Berry.

 

Fay Gardner appreciated Clark’s input.  She had heard that we have a treatment plant in process.  Clark told her it would be completed this summer.  She thought a rate study was needed.

 

Stu Meagher said the increases would raise our taxes as well.

 

??, retired in 1991, said everything is going up.

 

Paul Bingham spoke in favor of the Clark proposal..  This thing has been studied to death and to postpone the decision is not an answer.  Someone will always be unhappy.

 

Frank Atwood supported Paul’s comments.

 

Carol Brzeczek said this is the 3 or 4th sewer rate setting she has attended and it is the first time she has not been on the side of those opposing the increase.  Her collection rates have increased 97% since 2004 and her treatment fees have also increased dramatically.  She could vote for the council members and this past election was in large part about the sewer rates.  Unfortunately, the previous council got them into this mess – it is a difficult problem but it is theirs.  Previous council took the attitude if they build a new treatment plant “they” (new users) will come.  Well, they didn’t come and Rick Gardinia, Red Oak consultant, said 12-18 months ago that the citizens of Littleton were going to have to pony up.  We don’t need another study – at least not by Red Oak.  Every one of their reports has to be studied because they are not reliable in the numbers they present.

 

Cal Murib was worried about what the increase in tap fees would do to growth in Littleton and hoped the council would make an exception for those projects on-line.

 

Bob Davis owned property in what is now Centennial in 1959.  His rates increased and when he asked why they told him because they needed the money.  He didn’t get a chance to vote either.  This is just what you have to do to keep a city running. 

 

Taylor asked if, in the agreement, does it say equitable costs to be charged for all users of the plant.  Brad Bailey said yes.

 

Taylor also asked if the contract required them to consult the various districts prior to any rate change.  Bailey said he had not looked at the contract for a couple of weeks but could do so.  Taylor asked if the Red Oak financial analysis that was done for the city recommended a steady and gradual rate increase and doesn’t the staff’s plan follow that recommendation?

 

Blosten said Red Oak recommended a 6% increase in 2008 and the staff is recommending a 4% increase.

 

Taylor asked how the projections about growth were made.  Blosten said it is a guess – sometimes their guess is good and sometimes their guess is way off.  Littleton asks the various districts for their projections on tap sales 1 year out, 3 years out and 5 years out.  Their crystal ball is no better than any other.  Our crystal ball, Blosten said and Bailey completed his thought by saying “is cracked.”  When is Marathon Oil going to happen and how many units will be developed.  We don’t know.

 

Blosten said they had received 115 emails, letters, and phone messages that are part of the official record if received before 2:30 that afternoon.

 

Mulvey moved to close the public hearing and to increase the outside user rates by 20%, increase the tap fees for inside users from $2,500 to $5,000, and to increase the tap fees for outside users from $2,828 to $5,656.  Brinkman seconded his motion.  Cole asked for the motion to be split.  Motion was split and the motion to end the public hearing passed 7/0.  The portion of the motion dealing with the sewer rates and tap fees was moved and seconded.

 

Trujillo amended the main motion to increase the tap fees for inside users to $10,000 and the outside users to $11,312.  His motion died for lack of a second.

 

Taylor said it appears, from the information, that the expansion was decided upon without input from the outside users.  If they were asked they would have told us they were almost built out.  (Amazing.   Taylor was on the Council at the time and he voted for the plant expansion.  A little late to be asking about growth projections that might or might not support a plant expansion.  The need for expansion is based on flow rates during a 30-day period and not projections about future growth.)  The outside users pay for their treatment costs but pay for the collection through their property taxes which goes to the districts for pipe maintenance.  To not implement an increase for the Littleton residents appears to go down the path of the late 80s and 90s where there were no increases.  Then we had to dramatically increase the rates to cover the costs.  He preferred a gradual increase.  The costs to operate the plant are going up – fuel, wages and benefits.  The Apartment Association of Denver states that taps are generally purchased in quantities – the increase represents a lot of money.  The Home Builder’s Association questions the method and lack of notice to the development community.  Just because tap fees double does not mean revenue will double – you will lose potential growth and new construction.  The City needs to sell the excess capacity and we need to keep our rates low to do so  Taylor proposed a delay in imposing the increased tap fees until September for those projects in the pipeline.  They all have their financing lined up and the increased rates will affect the quality of the project as they will have to make up the deficit.  Taylor mentioned the studies done by Red Oak and suggested we take another look with a new consultant and “see how you like that.”

 

Trujillo said there are lots of people in the audience that are visibly upset and they look up to the Council and blame them.  It is not this Council’s fault – most of us are newly elected because we wanted to tackle this issue.  He did not like the Red Oak study himself – which looked at 2065 as the final year for the expansion project to be paid off.  We inherited this monstrosity and there is only one way to do it – raise the rates.  Trujillo apologized to the senior citizens – we are thinking about you but we have to think about the City.  Anyway you look at it; the service provided is the best bargain anywhere.  Our only salvation will be the big developer that wants to purchase some of our excess capacity.

 

Ostermiller made his observations known.  First, just because you raise tap fees doesn’t mean your revenues will increase – we probably won’t get any tap fees.  Second, one possible customer, Sterling Ranch, is looking at refurbishing the old Roxborough facility as it might be cheaper to do than to sign up with Littleton.  We do not have a monopoly on treatment.  It will be very easy for developers, businesses and new residents to look at our fees and decide to go somewhere else.  Third, fees charged go beyond paying for the plant operation..  In 1991 there were $26 million in improvements and we still owe $6 million on those notes.  Littleton’s share of Phase 2 is $57 million with $29 million for the expansion and $28 million in compliance that had nothing to do with growth.  (Some compliance standards were increased based on the new capacity of the plant.)   Since 1973 $40 million has been collected in tap fees. In a well run corporation that money would have been put in reserves.  Prior councils kept rates low – we had 8 years without an increase.  Part of the $40 million was used to subsidize user rates.  We don’t have to raise tap fees to cover growth. 

 

Ostermiller offered an amendment to Taylor’s amendment which would adopt the 4% increases for both inside and outside users.  Taylor seconded. 

 

Cole said she would not support the amendment but she did appreciate his position.

 

Mulvey said he would support postponing the increase in tap fees for three months but he did support this increase.  Motion failed 3/4 or 2/5 – I am not sure how the vote will be recorded.  The board showed Clark voting with Ostermiller and Taylor to which he immediately realized he pushed the switch the wrong direction thus voting opposite of what he wanted. 

 

Taylor moved to delay the rate increase on tap fees for all projects in the pipeline to September 1, 2008.  Ostermiller seconded.

 

Taylor supported his motion with his previous comments.  Trujillo called for the question.  Motion was defeated on a 2/5 vote with Mulvey and Clark voting yes.

 

Clark commented that the Ensor property had been zoned since 1985 – how do you define a “project in the pipeline” – someone has to pay for the plant.  Councils in the past resisted rate increases in an amount that would pay for the plant.  There is no sense in delaying the increase.

 

Ostermiller did not think the September deadline was enough time to pull a building permit.  If we agree to raise the tap fees – it will kill some of those projects.  This is antigrowth, antidevelopment, Littleton has closed their doors.  He thought a delay until January, 2009 would be better – at least we will get some rather than none.

 

Brinkman said she had looked at tap fees and Littleton has the 3rd lowest in the area with Boulder and Englewood lower.  She was concerned about the developments in process and the impact the increase would have on their budgets.  She did not think a rate increase without a grace period was a friendly message.  She thought there needed to be a system to apply for the old rate that was not based on a timeline.  Last year we collected $2,000 in tap fees – she was not sure if the tap fees were halting development or if there were other reasons for the slow rate of development.  However, she was willing to error on the side of caution.

 

Cole mentioned the possibility of collecting the tap fees with a rebate – she wants a compromise – a phase-in piece.

 

Trujillo, in the restaurant business, said all his commodities and products have gone sky high and he did not receive a damn day’s notice – we either do this or not.

 

Blosten offered a suggestion that those projects with an active site development plan submitted and in the review stage might be one way to approach who paid the old rate versus the new rate.

 

Brinkman asked if 6 months was enough time to get a site development plan.

 

Taylor suggested changing his amendment from September 1 to 6 months..  Clark suggested Taylor pick a process rather than a time.  Taylor changed his recommendation to approval of a site development plant by October 15th.  Ostermiller seconded. 

 

Ostermiller said it created a problem for a single home or a business that did not need a building permit.  Taylor said there was no reason why another amendment can’t be made.  Motion passed 4/3 with Cole, Clark and Trujillo dissenting.

 

Clark reminded the Council that the City lost $5 million dollars on the Roxborough deal because they dithered so long.  Every dollar lost comes from a residential user.  This motion passed with Clark, Cold and Trujillo dissenting.

 

The main motion to increase outside user rates by 20% with the modifications to the tap fees for both inside and outside city was brought forward for a vote.  Clark referenced a letter that indicated the outside districts were consulted about the rates and fees and wanted the letter to be included in the record.  The suggestion that the council does not care about the outside users was not accurate.  The inside users have had their rates raised for years.  We can raise the tap fees but we won’t know if we will actually sell any taps.  We have to make our debt payments on the general obligation bonds on the plant.  The citizens of Littleton are assuming the risk.  This is the best we can do at this time and it would be inappropriate not to raise tap fees.

 

Taylor said he was caught in a bind – his amendments were passed but he did not support the 20% increase on the outside users.  He preferred to have the increases spread among all users.

 

Cole moved to amend the main motion to phase in the equalization of user rates by increasing the outside user rates by 11.5% and the inside user rates by 4%.  Taylor seconded the motion.

 

Ostermiller asked Cole to define “equalization”.  Cole referred to a comment made by Clark that the 20% would equalize the fees over a period of time.  Ostermiller said the inside and outside users now have the same rate – if you increase one and not the other they are no longer equal.  Cole’s motion failed 3/4 with Mulvey, Trujillo, Clark and Brinkman dissenting.

 

Brinkman said she supported Clark’s motion.  She has been paying attention to the sewer issue for the past 18 months and had been immersed in it for the past 3 months.  There are a lot of numbers and it depends on who you ask what answer you will get.  We can’t use Red Oak’s numbers.  It is only fair that everyone pays their fair share and 20% brings us back to an equitable rate structure.

 

Cole said she would not support Clark’s motion even though she would like to.  It doesn’t look right or feel right to “pop” them and nothing for the citizens for inflation.  The motion passed on a 4/3 vote with Cole, Taylor and Ostermiller dissenting.

 

BIAAC 2008 Charge

Last agenda item – Brinkman presented her recommendation for a charge for BIAAC…..how Littleton can age gracefully.  She believes Littleton is ideally situated to take advantage of great opportunities that come with an aging community.  It will require BIAAC to get out of their comfort zone – to do research and get out into the neighborhoods. 

 

Cole thought the idea was great.  Mulvey agreed and asked staff to locate a report that former council member Cronenberger and Mulvey had written several years ago that included a senior survey. 

 

Taylor reminded Brinkman that DRCOG has done a lot on aging.

 

Clark said he was in favor with the stipulation that since BIAAC is a business and industry advisory committee that the economic development of aging gracefully be the main focus.  Motion was made and passed to accept Brinkman’s recommendation as the charge for BIAAC in 2008.

 

 

Study Session Update

Clark suggested that the council needs to get the goals and objectives for the city manager identified so they know what to evaluate him against.

 

Cole wants to add “greening” of Littleton on the study session agenda – what can Littleton do to accommodate and facilitate citizens with such things as disposing of compact bulbs and mulching.

 

Cole is also asking that the “list serve” be on the agenda.  Clark told her that staff will be providing a memo for the council.  Narde said she and Weaver have been participating in web seminars and this is an item that should be taken up during the 2009 budget talks..

 

Cole is also concerned about the impact the deflated property values will have on the city’s revenues.  Clark thought this too should be discussed during the budgeting process.

 

Brinkman wants to see the PDO process on the study session agenda as well as the Main Street Consensual Designation.  All but Mulvey agreed.

 

Mulvey wants code and code enforcement to be scheduled before the summer season.  All council members agreed with his suggestion.

 

Reports

Woods reminded council of the District IV community meeting on April 22 and the joint meeting with the Englewood Council on April 24th at 7:30.

 

A motion was passed to provide $35,000 for work on a catwalk on a 7/0 vote.

 

Taylor reported that the Littleton Housing Authority is in good financial condition and will be hiring a financial consultant to help with redeveloping property in Littleton.

 

Mulvey mentioned the public reception for the finalists for city attorney and asked who was invited.

 

Cortese said members of the merchants association, current and former board and commission members but the reception is open to everyone.  It will be held April 27th from 2pm to 4pm at the City Center.

 

Ostermiller met with the fire partners on the pension plan.  There are no two attorneys that agree on the TABOR question regarding the proposed pension plan.

 

Trujillo said the clean up at the cemetery, from the train derailment, is complete and done well.

 

 

 

 

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: