September 14, 2004 Meeting Minutes

September 21, 2004

The Board of Commissioners of the City of Lawrence met in regular session at 6:35 p.m. in the City Commission Chambers in City Hall with Mayor Rundle presiding and members Dunfield, Hack, Highberger and Schauner present. Lawrence High School Student Representative Justin Isbell was present.

RECOGNITION/PROCLAMATION/PRESENTATION:

With Commission approval Mayor Rundle proclaimed September 26^th – October 2^nd, as “Civic Literacy Week.”

CONSENT AGENDA

As part of the consent agenda, it was moved by Hack, seconded by Schauner, to receive the Grant Review Board meeting minutes of July 22, 2004; the Public Library Board meeting minutes of August 16, 2004; the Public Health Board meeting minutes of July 19, 2004; and the Sister Cities Advisory Board meeting minutes of August 18, 2004. Motion carried unanimously.

As part of the consent agenda, it was moved by Hack, seconded by Schauner, to approve claims to 351 vendors in the amount of $1,430,042.23 and payroll from September 5, 2004 to September 18^th 2004 in the amount of $1,398,537.13. Motion carried unanimously.

As part of the consent agenda, it was moved by Hack, seconded by Schauner, to approve the Drinking Establishment Licenses for Longhorn Steakhouse of Lawrence, 3050 Iowa St.; The Hawk, 1340 Ohio St.; Hereford House, 4931 West 6^th No. 26; and the Retail Liquor License for Jensen Retail Liquor; 620 West 9^th St. Motion carried unanimously.

As part of the consent agenda, it was moved by Hack, seconded by Schauner, to concur with the recommendation of the Mayor and appoint Wally Emerson to the Board of Zoning Appeals/Sign Code Board of Appeals. Motion carried unanimously.

As part of the consent agenda, it was moved by Hack, seconded by Schauner, to authorize the City Manager to execute a contract with BG Consultants in the amount of $170,095 for design and construction phase services of the 17^th Street and Massachusetts Street/ New Hampshire Street Relief Sewer Project. Motion carried unanimously. (1)

As part of the consent agenda, it was moved by Hack, seconded by Schauner, to approve a contract with Justice Systems, Inc., for Full-Court software system for Municipal Court in the amount of $105,314. Motion carried unanimously. (2)

As part of the consent agenda, it was moved by Hack, seconded by Schauner, to adopt Resolution No. 6567, declaring 966 Jana Drive a vacant dwelling and a public heath nuisance and ordering the abatement of the property within seven days. Motion carried unanimously. (3)

As part of the consent agenda, it was moved by Hack, seconded by Schauner, to approve the site plan (SP-04-25-04) for Lake View Villas at Alvamar, a site plan for a 16-acre, 108 unit, multi-family residential development located on the northeast corner of Lake Pointe Drive and Clinton Parkway, subject to the following conditions:

1. Provision of a revised site plan to include the following changes:

a. Provision of a minimum of 4 additional city standard dumpster locations per staff approval;

b. Revision of the site plan to remove general note number 12 referring to curb-side pickup service;

c. Provision of additional off street parking along the access aisle, per staff approval;

d. Provision of a parking summary on the face of the site plan;

e. Removal of driveways from the 25’ setback for buildings 1 and 9;

f. Removal of Building 9 or relocate to eliminate encroaching drives;

g. Provision of a note on the face of the site plan that states, “No occupancy until all of the site improvements including the main access drive, grading and landscaping are complete”.

h. Removal of note on face of site plan referring to parking along the main access drive; and

i. Revision of the driveway entrance to not exceed a 30’ width per the approval of the City Engineer.

2. Provision of public improvements pr the approval of the City Stormwater Engineer prior is release of the site plan to Neighborhood Resources for issuance of a building permit;

3. Provision of a photometric plan prior to release of the site plan for issuance of a building permit; and

4. Execution of a site plan performance agreement.

Motion carried unanimously. (4)

As part of the consent agenda, it was moved by Hack, seconded by Schauner, to execute Restrictive Covenants governing the property to be purchased for the Lawrence Regional Technology Center for a business incubator building. Motion carried unanimously. (5)

As part of the consent agenda, it was moved by Hack, seconded by Schauner, to approve as “signs of community interest” the Lawrence Regional Antique Automobile Club of American Antique Car Show sign; the Friends of the Public Library book sale signs; and the Lawrence Home Builders Association 2004 Fall Showcase of Homes signs. Motion carried unanimously. (6)

As part of the consent agenda, it was moved by Hack, seconded by Schauner, to authorize the Mayor to sign a Release of Mortgage for Christopher Dull and Samantha Falor, 414 Locust. Motion carried unanimously. (7)

Mayor Rundle pulled the City Commission meeting minutes of September 14, 2004 from the consent agenda for separate discussion. He said the original draft of the meeting minutes did not contain a complete description of Commission direction to staff regarding the recommendations from the Recycling and Resource Conservation Advisory Board.

Frank Reeb, Director of Administrative Services/City Clerk, said the minutes had been amended to include a more accurate description of the Commission’s staff direction on that topic. He said the amended minutes state the City Commission directed staff to proceed with the seven recommendations from the Recycling and Resource Conservation Advisory Board regarding energy conservation and sustainability opportunities and to provide timetables for each of the recommendations.

Moved by Hack, seconded by Schauner, to approve the amended City Commission meeting minutes of September 14, 2004. Motion carried unanimously. (8)

Resolution No. 6566, authorizing the issuance of bonds in the amount of $770,000 for Kasold Drive, Peterson Road North to the Kansas Turnpike Authority, was pulled by Commissioner Schauner for separate discussion. He said he would like to pursue the idea of performing more of the City’s engineering, in house, if it could be done in a way that would save the City money and asked staff to produce a report on that idea.

Moved by Schauner, seconded by Dunfield, to adopt Resolution No. 6566, authorizing the issuance of bonds in the amount of $770,000 for Kasold Drive, Peterson Road North to the Kansas Turnpike Authority. Motion carried unanimously. (9)

CITY MANAGER’S REPORT: None

REGULAR AGENDA

Receive additional information regarding Public Education and Water Conservation Program, Procurement of Water Rights, and options for water and wastewater rate structures

Mayor Rundle said he had sent an email to the City Commission and staff concerning this issue and it was apparent from discussion with one of the Commissioners, as well as discussions with people in the community, that they were not sure of where this issue was going.

Mike Wildgen, City Manager, said staff’s presentation was in the memo and attached material which covered approximately six issues. He said some of those issues were questions about conservation, water shortage, policies, and also the rate issue which was the focus of this discussion.

He said a graph that was given to the City Commission showed the comparison of the rates compared to five cities that Black & Veatch mentioned in their report.

Mayor Rundle said, concerning the chart, it would be important to see what the effect was on the rates if all increases followed 2006-2009.

He said a person from the University was studying this issue and was confused. He said he did not know what direction the City Commission needed to take.

Commissioner Schauner asked, from staff’s perspective, which policy master were they trying to serve with either the inclining block rate or Alternate 2. He asked if it was conservation, revenue, shifting of burden from low users to moderate and high users or some other policy.

Wildgen said staff was looking at the direction of equity and trying to make sure the rate users that were using high amounts of water were paying at an equal basis compared to people who did not use that amount of water.

Commissioner Schauner asked if looking for equity, would it be possible to maintain a declining block schedule with a shift in what the City charged the low user for their minimum and that did not have a dramatic impact on revenue.

Wildgen said he thought a rate could be devised that would address that issue in some way.

Keith Barber, Black & Veatch, said the main equity issue that was considered was the residential users. He said with a declining block rate, the first block was basically designed for a typical residential user and the second block was designed more for the smaller commercial user which had lower demands. He said with the equity issue they were finding that there were some larger residential users that irrigate often and there usage fell in that block that was designed for the small commercial user. He said the more water they used the average price of that water started to decrease because they were in that lower block. He said a declining block rate structure could only address the equity issue if they shifted the blocks, but by doing that, they would get all the residential customers and most all of the small commercial businesses too. He said they would be placing the burden on those types of users by applying a higher rate. He said by moving to a more uniform block, it would take that issue away and everyone in the residential class would pay the same volume charges as everyone else in that class.

Steve Phillips, Black & Veatch, said it sounded like some of the Commission asked if a structure could be designed that was more fair to the small user, but not shift that burden over to the large user. He said as an empirical statement, another way to ask that question would be whether he could draw a mathematical statement given that the dollars on the right hand side were fixed. He said the simplistic answer was yes. He said what it would look like would take effort on Barber’s part to try and figure out how to have a rate structure that would be supportive of the commonly fixed income, small user, who was at the low end of the scale, middle volume users, and still not penalize large users who currently had an advantage by paying a lower unit cost. He asked, could a person working in those three blocks for residential, come up with a formula that could work that way.

Barber said Kansas City had a rate similar to Phillips idea. He said Kansas City had two blocks of residential and one block was geared toward life line type users where usage was low and then the other residential block goes to a higher rate for the remaining customers and then it declined from that point.

Mayor Rundle said there were a large number of issues all bundled together. He said they needed to fund the utilities at some adequate level. There was discussion about shifting the burden among income classes, shifting the water rate burden to large users, triggering conservation, and reducing peaking. It seemed they were making a major shift toward cash financing where there had been debt financing which was why the rate payers were all going to be having high rates. Also, there had been discussion about rate structure, minimum charges, system development fee issue, and eliminating subsidies.

Commissioner Dunfield said he did not understand this issue to be shifting towards cash financing.

Mayor Rundle said that issue had not been clearly articulated.

Barber said he was not sure of that issue. He said they were talking about the possibility of lowering the debt service coverage ratio because the current ratio was so high. The higher that ratio, the more cash a person would be forced to use to buy capital. He said lowering that ratio meant more debt service. He said if the City moved toward lower debt service coverage, a person would be able to debt finance more than what had been done in the past.

Mayor Rundle said it looked like in the tables that there was cash being built up to spend on those various projects.

Commissioner Schauner asked if the current ratio was 30% cash and 70% debt.

Barber said it was a lower ratio. He said they looked at several alternatives in the June 9^th study. He said they looked at going to a 100% debt all the way to 100% cash. He said the type of financing in the proposed plan was 71% water debt and 29% cash and wastewater was 87% debt and 13% cash. He said financing was heavily weighted toward debt at the present time.

Ed Mullins, Finance Director, said there was also the impact on the rates. He said the Commission, at that time, was presented some financing options and this issue had a lower impact on the rates.

Barber said the more that a person loaded up on debt the lower the impact. He said what this showed was if the City went 100% debt, then the water rates would be 2% and 3% and wastewater would be approximately 8%. If the City implemented the proposed plan for water would be 4% and wastewater would be 9%. If going over to 100% cash, then the rates for water would be 10% to 12% and wastewater would be 43% per year. He said they were a far cry from the pure cash financing.

Mayor Rundle called for public comment.

Laverne Squier, Lawrence Chamber of Commerce, said this issue was a very complex topic and there were quite a number of variables at work. He said in the August 30^th document, there were five rate scenarios for the Commission to examine in addition to the existing scenario of a declining block rate structure.

He said when talking about some of those variables, he said his emphasis was to strip away some of the ancillary issues. He said those issues needed to be discussed, but separate from the core issue which was the cost to run the system and the revenue that was needed to fund the system with going forward. He said what was being masked was the wastewater side of the equation. Typically, the water side of this topic had generated more conversation. He said there were more lingering issues, regulatory and otherwise long-term, that could be academically debated about the water side of the equation because those equations did not track through one for one on the wastewater side. He said as for wastewater some of the fee impacts could be more significant on the community at large, relative to the wastewater or sewer charges that people were paying. He said there were some examples that would see significant increases far and above the 9% that was estimated ranging into tens of thousands of dollar increases, for example, the University of Kansas. He said those numbers were ran by Mullins.

He said depending upon what meter size a person was served by, what flow rate a person would have in water which related to the wastewater calculations both, a person could come out of this scenario in a not so good fashion.

He said concerning the timeline issue, when the expansion was needed, he asked, what they would be driving toward in terms of goals regarding capital expenditures. He said if it was year 2012 that was mentioned with the southeast expansion on the wastewater side, then it should be explained for people to understand and also outline the wastewater charges as it related to that goal that the City was trying to hit. He said at that time, the Commission could make a better decision relative to the ratios that the Commission was trying to adopt or keep with depending on which way the Commission was moving toward, relative toward cash versus debt financing.

He said on the water side of the equation there had been a lot of emphasis on the residential side, but that did not mean the other classifications go without impact. He said those classifications would be impacted depending on which rate structure was chosen. He said it would be important for the Commission to retreat somewhat to what was the core issue. The core issue should be to fund the utilities to an adequate level, both currently to cover operation costs and to cover the capital expansion costs going forward.

He said overall the timetable was important and the revenue needed was important to understand, but the impact should be measured to be fair to the consultants and staff and the targets needed to be narrowed. He said right now, they did not know what rate structures to use or timeframes relative to capital expansions. He said there were a lot of moving targets and it might be helpful to reduce those targets.

Wildgen said in terms of a target, the City had a target which was the Capital Improvement Plan that the Commission adopted. He said the rates were based on accomplishing that five year plan. He said the quickest way to reduce rates was to move some of those big projects further or drop those projects off the Plan.

Commissioner Dunfield said the City had been following along the Water and Wastewater Management Plan for several years and had quite a number of study sessions on that plan. He said there had been two study sessions specifically concerning the rate issues. He said he felt the Commission gave fairly clear policy direction. He said he was personally ready to act this evening. He said it was true that the Commission might have been sidetracked by the discussion about conservation, but at the same time by sending a message that conservation or resources and the City’s facilities were a City goal and a City objective was an important statement to make. He said the rate structure should make that statement.

He said concerning the rate structure, the City’s current setup did penalize the low water user and sent the wrong signal. He said the rate structure charged people for 2,000 gallons of water whether they used that amount of water or not. He said having a declining rate for large residential users also sent a wrong signal about what the Commission’s goals were and what their attitudes towards the resources were. He said at the same time, he did not want to penalize people trying to maintain their property which was not their goal.

He said at this point, he would modify the outline that was given previously in terms of the block structure and use a flat rate for the residential customers and not have either an inclining or declining structure for the higher end users. Again, he would like to act on this issue this evening.

Commissioner Schauner said concerning a question that he had asked earlier, the question had been answered by Wildgen which was the master that they were trying to serve was meeting the City’s revenue needs to finance the Capital Improvement Plan with respect to water and wastewater.

Wildgen said there were 3 legs, the Capital Improvement Plan or CIP, the regulatory requirements, and maintaining what the City presently had. He said the CIP could be deferred or delayed, but EPA could not be told that those projects would not meet the standards and existing equipment needed to be replaced if the equipment was breaking down.

Commissioner Schauner said the 3 legs of the stool to support the financing requirements of the system either maintenance or expansion came back to money. He said if that was the driver for the rate structure study, he did not want one class to subsidize another.

He said Squier made a good point that whether using a gallon of water as a low end user or use 20,000 gallons a month as a medium to high end user, there was still a cost to the system of maintaining a connection being there if water was needed. He said the system needed to be capable of delivering what a person wanted on demand.

He said he favored a modification of what the City currently had which was a declining block rate that more equitably shared the operational expansion and maintenance costs of the system to a modified structure where some of the burden was taken away from the low end user, but still maintain a declining block structure that permitted the system to pay for expansion, the Capital Improvement Plan, maintenances and other costs. He said in combination with that idea, he suggested a conservation/education program. He said in the out years of 2006, 2007, 2008, and 2009, other Commissions would be faced with the issue of rates and the last thing the Commission would want, both for the residential and economic development community was a rate that scared people away. He said the Commission would be doing a disservice to the community if they escalate that rate in a way that drove those people away. He favored a modified declining block structure that would provide some equity relief to the low end user, but not add significantly, at this rate level, to maintaining the concept of the declining block throughout this structure. He said it would be more equitable than a flat rate and a lot more equitable than an inclining block rate.

Vice Mayor Highberger said he agreed with Commissioner Dunfield. He said he understood this issue to his own satisfaction. He said it was important to remember those 3 legs, but the major impetus was raising revenue. The bulk of that revenue would be paying for the cost of growth. The other two legs, the system maintenance and EPA requirements would need to be swallowed whether it was liked or not.

He said the City could raise its rates as necessary to get the revenue that was needed and address the issue of equity and conservation in those rates. The City’s current rates unfairly shift cost to the low volume residential users. He said the inclining block did the best job making the rates equitable. He said concerning residential usage, a lot of the cost in the system was providing peak cost which was summer residential usage. He said if the rates were going to be completely equitable, the Commission would need to go with the inclining block.

He said after looking at the new information, the flat residential rate would send a strong conservation signal and at the same time making rates more equitable than they had been. He said he was ready to accept the proposal for Alternate 2, for the flat residential rate. He said he was concerned about the impacts of shifting from a declining block for commercial and industrial to a flat rate. He said this was an important decision that would affect this City for a long time and he wanted to make sure all of the Commissioners were comfortable before deciding to go forward with this proposal.

Commissioner Hack said she agreed that the impetus for this issue was how to help the low end user not bear an unfair burden. She said the Commission had talked about water conservation, but as Commissioner Dunfield said, the issue of system conservation was also equally important. She said there would be times where there were unexpected situations, but our systems were built for those times.

She said she was comfortable where the City currently was on the issue of the shift from debt financing to cash financing. She shared Commissioner Highberger’s concern that while concentrating on the residential issue, there was the industrial and commercial component and how that would impact those users in the long run. She also had a concern about where the City was with the water and wastewater and what the impacts of that would be. She said she could probably go with the flat rate at this point, but she would be more comfortable if the entire package was looked at.

Mayor Rundle asked how the entire package would be looked at.

Commissioner Hack said this issue would require additional consulting work from Black & Veatch and additional work from City staff.

Commissioner Schauner asked if the Commission could see a rate design that he discussed.

Commissioner Hack suggested narrowing this issue to looking at the flat rate and Commissioner Schauner’s proposal which was maintaining the current rate with some tweaking.

Wildgen asked Barber about the declining block, Alternate 1, proposal.

Barber said what was existing was a declining block with a minimum charge. He said what was being asked would need to be a policy decision concerning the differential in the low volume rate versus the makeup rate for the class. He said in total, they would get the residential revenue from those two blocks. The policy issue then became, what was the differential between the first two.

Commissioner Schauner asked if part of the answer to that question was what it costs the system to maintain a connection.

Barber said you could go with a base cost which would be the absolute lowest cost you would want to go to, but there was a range from the base cost to the average of the total class. He said it depended on how much of a break the Commission wanted to give the lowest volume users.

Mullins said staff was attempting to try to make the system more equitable with the rate structure which meant that so far the lower user had been subsidizing the higher end user. If removing the higher user paying more, then those costs would be shifted on the average user. He asked who would bear those costs.

Barber said those other users in the system would bear those costs, but primarily residential users.

Commissioner Schauner said this was not unlike an insurance policy. He said everybody placed their money in a pool for the general health and welfare of those who participate in the consumption. He said he did not think they could find a point on the value of having a water connection and there were some basic costs whether building a structure for the peak time or just the run of the mill time of the year. He asked if it was possible to come up with a number that reasonably assesses the costs of maintaining a connection in a person’s residence that was a reasonable assessment. He said he was trying to make this as fair for the low end user without shifting most of those cost of greater watering to those who might not be a low end user on a typical summer.

Barber said his firm could make some assumptions on that idea for Commissioner Schauner to look at.

Commissioner Schauner said by shifting from a minimum charge to a service charge, he asked if they were dealing with precisely that issue of what the cost of maintaining a connection was.

Barber said part of the minimum charge was for that very reason.

Commissioner Dunfield said during that study session a minimum charge versus a service charge was discussed and the reason for changing to a service charge base model was that service charge would reflect what that basic cost of a connection to the system was.

Barber said the service charge recovered the billing and collection of the bills sent out to each customer.

Commissioner Schauner said, but not the cost of maintaining the minimum system connection and operations and maintenance of the system itself.

Barber said that was all on the system development charge.

Mullins said except on wastewater.

Barber said wastewater was a different story. A large part of the service charge was a portion of covering infiltration inflow in the system. He said wastewater had that in there and water was more of a service charge.

Commissioner Schauner asked whether someone used 10 gallons or 20,000 gallons a month, your share of the inflow was the same.

Phillips said Commissioner Schauner’s question was a fair question which was could you adjust that definition of what was in that service charge to include some other basic system maintenance charges. He said what Barber needed to do and what needed to be done with his staff was to give them an idea of the level of effort it would take to try to come up with the general shape of that curve so they did not need to draw a whole family of curves that said, if you try to give this much of declining block benefit to large users and this much system charge numbers at the bottom, they could generate a whole family of curves. He said they wanted to get those numbers the clearest way they could and get that information back to the Commission quickly to allow the Commission to move their decision process forward, but understanding the need to have a good foundation.

Commissioner Schauner said he would like to see that idea happen before the Commission made a change in the rate structure. He was not comfortable with the 2006, 2007, 2008, and 2009 rates that might need to come as a result of what the Commission was doing.

Phillips said the first time he visited with the City Commission about master planning was in the late 1980’s. He said it was a living document and it was important to regularly revisit the progress that was projected by that plan and have the City Commission take steps on those 3 good supporting legs for the operation of the utility. He said whether that was done annually or every other year, they could do that from a capital facility standpoint on longer terms and the City Commission could adjust rate computations within a time period to reflect changes in development patterns that could occur because of economic conditions, changes in growth patterns, or an industry that was interested in coming to Lawrence and more correctly respond to the shape of the system at that time.

Commissioner Hack said she appreciated that idea because the Commission did not want to put this rate structure in place, and live with that rate for 10 years without really understanding the long term impacts. She said the Commission’s conversation on this issue did not mean that they had not been provided the information that was requested, because the Commission had been provided that information. She said she would appreciate the extra time and information.

Squier said Commissioner Hack’s comments were on target relative to the narrowing of this process. He requested as the engineers, consultants, and staff reformat rate structures was to then have an evaluation of the impact of those rate structures on the rate classes. He said examples might want to be taken within those small, medium, and large classes and apply those rates to them to see the net affect versus existing rates. He said that was an important step because the Commission had received some letters from users in the community showing what those impacts could be under the old original rate scenario. He said that would then give the true measure of impacts so the Commission could better make a decision.

Mayor Rundle said he assumed that Squier was talking about those impacts over all 5 or 6 years of the rate increase.

Squier said it depended on how the rate structures were prepared. He said to prepare for the ultimate development and realization, for example, of the Wastewater Treatment Plant. He said they were only looking at the first of a series of rate increases. He suggested looking at years 2005 and 2009. He said he did not want to expeditiously increase the number of options, but the time impact and the type of classes should be understood. He said there were some preferences in looking within classes which were small, medium, and large.

Vice Mayor Highberger asked if the rate structure was designed to increase water revenues by 4% and wastewater by 9% a year.

Barber said yes.

Vice Mayor Highberger said the 2005 proposed rates, each one of those alternatives would raise the 4% and 9% so if there was no more changes in the structure there would be an increase each year.

Barber said if nothing changed and all the assumptions occurred in the report then there would be across the board increases at 4% and 9%.

Commissioner Schauner said those increases would have a compounding effect.

Barber said yes.

Commissioner Schauner asked what the compounding effect was after 5 years.

Barber said the effect would be 1.09 to the 5^th power.

Vice Mayor Highberger said that was the money needed to be raised to fund the CIP.

Commissioner Schauner said he understood that, but if the Commission was going to do that, it should be said at the present time rather than that being a surprise in 3 years.

Mayor Rundle said he took one of those examples and multiplied that example out and it ended up being a 41% overall increase. He said he did not know how that figure could be increased over 5 years at 4% a year in the water rates and 9% a year on the wastewater rates and that was not equivalent to increasing the amount of cash used to finance this system.

Vice Mayor Highberger said the City was trying to raise an incredibly large amount of money and the City was paying for the cost of its growth.

Commissioner Hack said the City Commission received information from a citizen concerning conservation in general thinking that this community could not rise to the occasion on water conservation. She said that was not the case and it was evident by driving around neighborhoods on a Sunday night to see how many people were putting out their yard waste and composting. She said if water conservation was one of the elements, then the City needed to continue that education program. She said this community would rise to the occasion. Conservation to the system was a different animal, but it was something that was being thrown into the pot in terms of conversation.

Commissioner Schauner said if the City did rise to the occasion with respect to conservation of water, the City would end up with less revenue in the system and the rate would need to be raised again. He said there was a double edged sword to conservation.

He said the City had a wet summer which in turn the City took in a lot less revenue than anticipated. He said if everyone reduced their usage by 10% then the system theoretically should see a 10% reduction in revenue.

Commissioner Dunfield said alternatively, it would allow the Commission to delay the capital improvements that were necessary to meet the increased demands.

Phillips said when that happened whether it was caused by conservation or whether in many suburban growth areas in urban centers, if the cost of borrowing for real estate jumped back up to 9 or 10% the housing market would drop off like a stone. He said if that happened the design year for that facility that the City committed to, would not be 2020 but 2025. He said five years after that year interest rates go back down, the housing market kicks up with demand. He said they saw a similar thing in conservation. He said there would be an immediate reduction, over a period of time and then if there was not a continued program and a continued personal commitment, it would creep back up and there would be a return until a renewed emphasis came back. The difficult thing about capital structure planning in their business was that a lot of the building structures at the Wastewater Treatment Plant and at the Kaw River Water Plant, those structures were built in the 1920’s. He said the City was making a commitment that it had an asset that was still viable 50 or 60 years down the road. He said that could be one of the impacts and that was why, when talking about looking at rate structures and capital planning it was important to look at adjustments in the City’s overall program annually and making movements for those adjustments.

Mullins said in the past, when Black & Veatch performed those studies, the city followed their 5 year plan verbatim. He said what staff was hoping to do in the future was to have Black & Veatch provide the City with an excel spread sheet where staff could plug in the different variables and that way for every year, from 2006 forward, then those rates could be fine tuned.

Mayor Rundle asked what the timeline would be to bring this issue back to the Commission.

Phillips said he needed to meet with his staff to talk through the conversations and how they changed into a scope. He said the timeframe would be a matter of weeks to get that information together. He said they would try to have a meeting with their staff within the next week. (10)

Receive staff report on City of Lawrence Employees Health Care Renewal and Recommendations.

Frank Reeb, Administrative Service/City Clerk, said the Health Care Renewal Report contained four recommendations from the Employee Health Care Committee. He said the four recommendations were:

a. Renew the City’s health and dental coverage with Blue Cross/Blue Shield of Kansas;

b. Carve out the prescription drug coverage from Blue Cross/Blue Shield and contract separately with Medtrak Pharmacy Services of Overland Park, Kansas;

c. Enhancement to the mental health benefit portion of the health coverage; and

d. Increase the employee contribution to the family plan by $1.50 per pay period.

He discussed the renewal of the City’s health and dental coverage with Blue Cross/Blue Shield. He said Attachment B in the staff report was a good one page summary of the renewal information that was received from Blue Cross. He said it contained the number of contracts the City expected for 2005, current benefit summary, and what Blue Cross/Blue shield was projecting for claims for 2005. He said claims were just over 4.4 million dollars, about 1.5% above what Blue Cross/Blue Shield projected this time last year. He said you could also see how 1.5% increase was arrived at which was broken down by health, dental, and drug expected claims and on the far right of the document were the individual increases 1.29 for health, 3.92 for dental, and 1.69 for prescription drugs.

The bottom half of that one page document was a fixed cost or administrative expenses and that was where the largest decrease came from. In terms of the fixed cost there was approximately a 31% reduction in general operating expenses. He said as they understood it from Blue Cross, they had a very good year underwriting in 2004 and were passing those revenues on to their customers in terms of reduction in general operating expenses on the fixed costs. There was a 9% reduction in the stop loss coverage, both the individual stop loss and the aggregate stop loss that City employees had for their health claims. The total overall projection cost for 2005 was 0.11% which was a good number, much lower than what staff used to budget earlier this year.

In terms of the renewal with Blue Cross/Blue Shield staff thought it was very good and staff recommended that the City continue with Blue Cross/Blue Shield for the health and dental portion of the City’s health plan, but staff was asking for a change on the prescription drug side. In terms of that change, staff was asking that the prescription drug coverage be carved out and to go with Medtrak Pharmacy Services of Overland Park because their proposal came out on top. Those benefits were:

· Automated claims filing at the counter for our plan participant. Deductibles and co-insurance will be calculated at the point of sale and the employee will only pay their portion of the prescription at the time of fill;

· Reduced administrative costs to the program. The HCC estimated $30,000 in administrative cost savings in 2005.

· Potential for prescription drug claims savings because of deeper discounts and MedTrak’s strategies to better educate plan participants on using lower cost brand name drugs or generic equivalents.

· Enhanced on-line prescription and medical information for employees to make more informed prescription drug choices when choices are available.

He said there were a couple of issues to keep in mind concerning this recommendation. He said as they talk about the renewal comparison, the City currently had stop-loss coverage that included claims for the health side and prescription drug coverage and if that benefit would be carved out, the City would no longer have stop-loss coverage. Theoretically, there was no cap. He said from a practical standpoint, staff thought that was a risk, not only worth taking, but should take. The potential for savings and the fact that risk was somewhat known, although inflationary in terms of the prescription drug costs, staff thought there was some cap in some sense of Medtrak’s strategies for reducing cost in the deeper discount which was a relatively knowable number and were not so much concerned about the City not having stop-loss coverage for this particular portion of the City employees health plan.

The other issue to keep in mind with going away from the two-step process was that the City employees would be losing what was known as a shoebox effect. Currently with that two-step process and the requirement for an employee or their dependent to take the second step of filing the claim with Blue Cross/Blue Shield, some employees might not file their claims and were paying the full cost of those prescription drugs minus the discount. He said Blue/Cross said that was a high number and the other companies responding to the RFP said that was not a high number, in part because the City employees average prescription drug cost was approximately $65 per prescription. He said staff over time had educated City employees to take those two-step processes. He said they would be seeing a little bit of a bump because all of the claims would be picked up and not requiring employees to go through that two-step process. He said for all of those reasons stated, staff recommended going with MedTrak Pharmacy services and carving that portion of the City employees plan out.

The third recommendation was that staff was asking to enhance the mental health portion of the City employees health benefits. Currently, in comparison to the major medical portion or other portions of the City’s medical plan, the mental health benefits were not quite on par as other benefits. In fact, as a self-insured plan the City was not required to meet Kansas Insurance mandates but if the City was required to comply with state mandates, the City’s current mental health benefits would not meet those mandates. He said those recommendations that staff was making would get those mental health benefits to those mandate levels. Nevertheless, staff thought it was appropriate to do from an employee perspective. It was important to keep in mind that Blue Cross/Blue Shield estimated that the City would expect to see claims increases of approximately $26,000. He said staff would like to look at that differently, not so much from a claims increase perspective, but as an investment. He said obviously, from the piece of mind of City employees, if they could be put in a better frame of mind, knowing that their benefits were better, hopefully their productivity and attendance would increase.

The last recommendation was because of this enhancement and some of the changes, staff was asking that employee contributions on the family plan increase by $1.50 per pay period which was consistent with the 2% wage adjustment that the City Commission approved earlier in the year going forward for 2005. It was also consistent with the City’s Health Care Committee goals of having a ratio of approximately 65/35 where the City picked up approximately 65% of the family full premium equivalent and the employee would pick up 35%. He said with that change, the ratio worked out to 67% and 33% employee.

He said staff felt that all of the four recommendations were appropriate and a win/win for the City and the City’s employees.

Commissioner Schauner asked what that would bring the mental health benefit up to.

Reeb said it was broken down by inpatient and outpatient and also bio-based and non-bio based. The inpatient bio-based go from 15 days to 45 days and the non-biobased inpatient would go from 15 days to 30 days. Outpatient went from 16 days to 45 days. The other enhancement was to change the co-insurance. Currently, the co-insurance was 50% and this recommendation would take it to 20%. There was also currently a lifetime maximum and this recommendation would remove the lifetime maximum.

Commissioner Schauner said concerning the carve out, would it be possible to buy stop-loss coverage.

Reeb said staff looked into that idea briefly and staff was not aware of any insurance carriers that would have stop-loss coverage solely for the prescription drug coverage.

Andy Krull, Medtrak Pharmacy Benefit Services, agreed and he was not aware of stop loss coverage.

Commissioner Schauner asked about the shoebox effect. He said there was some difference of opinion among Blue Cross/Blue Shield and Medtrak in terms of how much medical consumption was not turned in for repayment.

Krull said the reality of the shoebox effect, as mentioned, was the average prescription drug cost on brand products was approximately $85 and the average generic drug costs was approximately $35. The shoebox effect took effect on more the generic side of the drugs, the less expensive medications, because it was not worth their time to put those claims in for reimbursement. The reality was that the claims were still being turned in for the brand drugs which were higher costs. The shoebox effect from opinions was based off of the utilization. He said with the average generic drug being $35, typically that was where the shoebox effect would take place.

Commissioner Schauner asked if it was Medtrak’s belief that because they had good strategies on moving people to generics, they would lessen the shoebox effect and cost of prescription drugs to the plan.

Krull said with the programs they offered, that was correct. He said they had a letter writing campaign that educated members on branded products with the cost associated with those branded and what generics were available out on the market. With the shoebox effect being more on the generics, the reality was that if they did ship them over, you not only saving money on the overall ingredient cost on a generic product, but also the co-pays as well.

Mayor Rundle said he was particularly pleased to see the attempt at parity and mental health care because that was an on-going issue. He said when he was on the Bert Nash Board, it took some leadership like this to set an example and obviously it was not putting the City’s insurance plan out of business.

Commissioner Schauner said he was happy to hear this proposal. He said he was happy with the rate increase and the other changes were terrific.

Moved by Schauner, seconded by Hack, to direct staff to proceed with the recommendations of

• Renewing health and dental coverage with Blue Cross and Blue Shield of Kansas;

• Contracting with MedTrak Pharmacy Services for prescription drug benefits;

• Enhance mental health benefits of the health plan; and

• Increase the employee contribution to the family plan by $1.50 per pay period (from $80.00 to $81.50 per pay period)

Motion carried unanimously. (11)

Receive staff report on City of Lawrence employee benefits.

Frank Reeb, Administrative Service Director/City Clerk, presented the staff report. He said the Employee Benefits Committee was the newest of the City’s staff employee committees. This particular committee was made up of employees from ten departments of all levels of the organization. The committee’s origins were in the 2003 Compensation Study that was presently being worked on and the Commission had received a report in June of last year where the consultant recommended that, in terms of getting our arms around the total compensation package, that we have a better handle and continue to review our employees benefit package considering it was a portion of our overall compensation package. The committee also had its origin in some work that the Employee Relations Council did approximately a year and a half ago and it most recently had some origins in some of our discussions with the Lawrence Police Officer’s Association and the International Association of Firefighters during the Memorandum of Understanding discussions earlier this year when they had some commitment to take a look at paid time-off benefits.

The committee began its work about mid-July and the committee spent the first two or three meetings looking at an overall goal statement, looking at things in a much larger perspective than just paid time-off benefits. In fact, the first recommendation that was before the Commission was to direct staff to continue implementing a benefits goal statement that was contained in Appendix A. It was a reference document or foundational document and it was what they would look to, as an Employee Benefits Committee, on continuing recommendations for enhancements or new benefits. The goals statement set out who the City wanted to compare itself to as far as which cities; what the City’s standard was; and, what it would be in the future. He said the committee felt that a benefits goal statement was a good idea and something that the committee would like to continue moving toward as going forward with this committee.

He said they then spent the next 6 meetings, as a committee, looking at paid time-off and in part was based on some of their discussions with the LPOA and the IAFF.

The first recommendation regarding paid time-off had to do with personal leave. Currently, City employees were eligible for 2 days of personal leave per year and those days were not carried over from year to year. In other words, an employee would need to use those days in that year or lose those days. Those 2 days currently come out of the employee’s accrued sick leave balance. If an employee did not have any sick leave, they would not have any personal days. Per the employee handbook, the personal leave was to be used for personal business that could not be conducted outside of normal business hours and for issues like religious observances that fall on days other than a designated City holiday. The recommendation from the committee was to continue to have two personal days, continue with the lose it or lose it component, but to eliminate the requirement that those 2 days come out of the sick leave balance. He said with that recommendation they would be more competitive with the market

He said the next three recommendations had to do with vacation leave. Currently, City employees were eligible for 3 different levels of vacation leave depending on their tenure or years of service with the organization. He said years 1 – 10 were eligible for 12 days; years 11 – 15 were eligible for 15 days; and years 16 – plus were eligible for 18 days. Both the number of tiers and number of days, in the review of the market comparison, were below the market average. Therefore, two of the recommendations from the committee were to increase the number of steps or tiers, in other words, go about every 5 years up to years of service 26. He said in addition to the number of steps, the committee was asking to increase the number of days in terms of vacation time. He referred the City Commission to the chart on page 19 of the staff report concerning the specific number of days per year of service.

He said the committee was also recommending that rather than making those changes all in one year, effective in 2005, that those changes be phased in over a 4 year period.

The reason for that 4 year phase in was because of several factors. One reason was because the committee was not sure of the operational impact of making that change all in one year. He said they recognized that there would be some impact in terms of staffing, indirect cost, overtime or having to staff addition people for a period of time while those employees were using those additional vacation days, and they were not certain that all City employees feel that this was the most important benefit in terms of an enhancement. He said the committee knew this benefit was important to the LPOA along with some of the Benefit Committee members, but others on the committee felt there were other benefits that were more important and that, recognizing that increases would be somewhat finite, the committee felt that by phasing those benefits in, it would give time and an opportunity to survey employees and recognize the need for change in mid-stream. He said for all of those reasons the committee was recommending a 4 year phase in for those recommendations.

He said the last of the vacation related recommendations was to increase the cap that employees had on the maximum amount of vacation that they could accrue. Currently, the cap was at 224 hours and the committee was requesting to increase that cap to 240 hours which was a two day or 16 hour increase. He said somewhat anecdotally the committee thought that the average employee would have about a 1 to 2 day bump beginning in 2005 if those recommendations were adopted. He said the committee thought it would be appropriate to increase the cap from its current 224 hours to 240 hours which would get the City employees closer to what market cities were doing in terms of caps on vacation accruals.

He said while this committee was an employee committee that was made up of several members of the organization, including members of the LPOA and IAFF, the IAFF had not expressly voted on this benefit, but they were presently meeting and the committee was not sure how the IAFF, as a membership, felt about this issue. Members of the committee expressed their views, but they did not know as a membership how they felt. He said the LPOA voted to approve those recommendations.

Commissioner Schauner said on the first page of the report, it stated, “As a percentage of total budget, the City’s personnel expenditures are roughly the same or higher than other primary market organizations” and the report went on to state, “City per capita (or per employee) expenditures for wages and benefits, are below that of the other primary market organizations. He asked Reeb to help him understand how those two apparently contradictory statements operated.

Reeb said the committee was looking at those statements in two different perspectives. One perspective was on a per FTE or employee perspective and if looking at that from that perspective (represented by the chart on page 6 of the 2004 Comprehensive Benefit Review Report) they were below the market average. He said the City spent approximately $59,000 per year on an average full-time employee which included compensation benefits, the full package. The average, not including the City of Lawrence in this market comparison, was $74,000. He said if looking at that in that perspective City employees were below the market average.

If looking at it on a broader perspective, but he was not quite sure why the difference was there when looking at it from a broader perspective compared to a per employee perspective, but the committee did note that. He said they wanted to look at issues from several layers, from an overall perspective or a total City Budget perspective, comparing the City to the market. He said the committee had a short period of time to look at those benefits because staff wanted to get something before the Commission before October 1.

Commissioner Schauner asked compared to the market study group, did this City have more employees per capita than our comparative group.

Lori Carnahan, Personnel Manager, said they had approximately the same number of employees as the closest peer city which was Olathe, for the services this City offered and the size of this community. She said the City’s employee ratio per population or per service was approximately the same as this City’s peer communities. She said the difference between those two numbers it appeared that this City’s per capita spending on the whole, per employee, was less than some of the other communities on areas of this City’s budget. Therefore, the percentage that the City spent on personnel consumed a greater part of this City’s budget, but the City’s per capita benefits and per capita compensation per employee was less than those other communities.

Mike Wildgen, City Manager, said some of those cities did not have the same services. He said Lenexa did not have water or wastewater services.

Commissioner Schauner said the budget that was referred to, included all the enterprise funds. He asked what happened if there was an apples to apples comparison and compare general fund to general fund and to just those employees in those departments. He thought the Commission was getting a skewed look.

Carnahan said that was why the committee moved to that per FTE number because the first number seemed unclear because of those differences in services that each community offered. The second number was a pure example of what each community was spending on their compensation and benefits per the employee that they hired. He said the committee felt that was a much closer comparison. She said you did not need to worry in that case about what services were offered or not offered by the community or whether the community was larger or smaller than Lawrence in population.

Mayor Rundle asked if the committee was not able to do projections of potential impacts on staffing levels or indirect costs if those benefits were implemented in a faster time schedule.

Wildgen said the Police Department was the most subjective in that area and staff was unable to make those projections.

Mayor Rundle asked what way that impact would be monitored in terms of staffing and indirect costs.

Wildgen said the Chief of Police would monitor that because with his Captain’s, duty rosters would need to be assigned. He said the Chief would notify staff when he was having trouble assigning staff if they were not there. The Fire Department had minimum manning and they also had the extra board firefighters which helped offset that situation.

Mayor Rundle asked about the personnel monitoring software.

Reeb said staff was looking at, as part of spending some e-gov money, on-line applicant tracking software. He said the software would contain job application information, resume information, and staff would be able to compile reports based on that type of information. He said staff also had timesheet information containing hours worked, vacation, sick leave, and family medical leave, but staff did not have the software to spit out a lot of detailed reports on the why employees were using those vacation and sick leave hours.

Mayor Rundle asked if staff had turnover rates for Police or Fire Departments readily available.

Wildgen said the City knew who retired or left the City for other reasons.

Mayor Rundle asked if there was any way to monitor the cost.

David Corliss, Assistant City Manager/Legal Services Director, said the staff did look at attrition rates. He said staff was familiar with the number of people who leave this organization and staff had a desire to better establish that as a benchmark to be able to look at changes in the organization with the theory being that if there was a good trend line on attrition that would indicate that the City of Lawrence was a desirable place to work. He said staff believed that this City’s benefits and compensation would be one of the reasons staff would want to stay.

Commissioner Schauner asked if staff did any exit interviewing through Human Resources.

Carnahan said that was one of the issues that the Benefit Committee discussed. She said currently there was an exit interview form that was sent out, but currently there were no software systems or mechanisms for tabulating those forms for providing analysis and feedback to departments. She said that was one of the issues that were placed in the objectives to put into place before this implementation plan was finished.

Commissioner Schauner asked if staff did a sit down exit interview.

Carnahan said staff only did a sit down exit interview if the employee requested that.

Commissioner Schauner said that the City did not have any good data about why people leave this organization.

Carnahan said only the information that was on the exit interview form.

Commissioner Schauner asked if the City could begin the process of an exit interview with a live person interviewing them as to why they left the organization.

Reeb said the City was not currently staffed to do those exit interviews. He said staff did not have the software to data entry that information for reports or other informational purposes, but exit interviews could be done.

Commissioner Schauner said he was not so much concerned about the software than he was whether the employee’s supervisor could sit down to conduct an exit interview and submit that information to Human Resources.

Reeb said from a best practice standpoint, the employee’s supervisor might not be the best person to conduct that exit interview.

Commissioner Schauner asked if staff attempted assign a cost to personal days or sick days.

Carnahan said those numbers were hard to obtain and that was one of the issues in that working with those cities on a regular basis, staff would be able to get clearer numbers. She suggested placing a margin of error into that number because it was obtained quickly and the numbers obtained from other cities were difficult to get through their tracking systems and that needed to be refined over the next two or three years so staff had better numbers with less margin of error. She said they included payroll cost alone, but what staff did not have was how much was in vacation, personal days, holidays or overtime. Another component was temporary salaries which staff needed to get a handle on, on how much of each one of those figures included temporary staff which were not benefit receiving staff and that varies by communities. She said those were some of the issues staff was unable to narrow down and solidify in the timeframe allotted for this project. She said the margin for error on that number was more significant than she would be comfortable with, if staff was hitting it as an absolute target. She said that was another reason for some of that phase in because staff was rather confident that what staff proposed was not going to exceed a number with a lesser margin of error.

Commissioner Schauner asked what the margin of error was now.

Carnahan said she had no idea because if was very hard to get numbers.

Commissioner Schauner said so the Commission should not put much stock into the 59/74 at this point.

Carnahan said stock should be put in somewhere around 59 and somewhere around 74, but not as a hard number.

Corliss asked if it was fair to say that staff was not really basing their recommendations for changes on those numbers at this time.

Carnahan said that was a fair statement. She said it was fair to say that staff felt that they were below the per capita average, but she was not sure how far below. She said staff was confident that they would not come up even when they received better numbers. She said staff was also confident that the recommendations that were made brought them up to the averages other communities offered in those particular benefits currently. She said there was not a direct correlation between the number and what staff was recommending.

Commissioner Schauner said with respect to personal days, comparison was already above the average in offering two personal days and the recommendation was to essentially have standalone personal days.

Carnahan said staff felt they were currently close to the average. The average was 1.9 rather than 2 personal days with the market and changing that was close to average. The other communities did not remove that from any of their accrued balances that they accrued for sick leave or anything else. She said those were standalone days in other communities and staff felt that was what it took on the personal days to make this City comparable with the other cities.

Commissioner Schauner said, but the net effect was two additional days available, time away from work, either due to illness or personal use.

Carnahan said yes.

Mayor Rundle said it was a point well made that staff needed to compare apples to apples in terms of the cities that did not have the same services that Lawrence had, but when having that service there was that budget too.

He said it was worth investigating to make sure the staff had valid reasons for higher percentage of personnel cost for the City’s budget. When taking that one rough figure of 5.74% it would be $6,353,000 and that was not an insignificant number. If staff was going to monitor the impacts of that increased vacation as it was implemented on indirect cost, staff needed to be concurrently spending some time looking at what was driving the City’s personnel costs and if there was anything that City needed to be doing in terms of training or whatever it took to bring those costs down.

Commissioner Schauner said his concern was that there was a formalized process for coming up with salary and benefits for Police and Fire Departments and he asked would those changes apply to those departments if approved.

Debbie Van Saun, Assistant City Manager, said the LPOA had already voted last Thursday to accept those recommendations.

Commissioner Schauner asked if it was because of the time delay that those proposals were not part of the last round of negotiations.

Van Saun said there was a section in both the negotiations and documents that indicated that they would go through this process.

Commissioner Schauner asked that in the future would it be possible to align those discussions as part of the negotiations process.

Van Saun said yes. She said it would be staff’s hope that just as the compensation work that had taken place allows for that, that the Benefits Committee, in which they were members would allow for that to be part of that on-going process and negotiations.

Commissioner Schauner said he would prefer to take all those issues that were monetary and non-monetary and discuss those issues at the same time rather than taking part of the package and discussing and approving it and then coming back later with the rest of the package. He would like to have a better handle on the true costs of the agreement at once rather than the Commission knowing what the cost was when the negotiations were completed, but now there were additional costs that could not be calculated. He said he would like to see a process where all those negotiations on money and non-money items took place simultaneously.

Commissioner Hack agreed. She said in a perfect world with the committees that had been working, those committees would have came to the Commission at the same time. She said the Benefit Committee and Compensation Study were longer term proposals. She appreciated all of staff’s work on this issue. She said she appreciated that the Commission needed to be in the ball game because the City had great employees and they wanted to continue with that and those benefits would enhance what the City was able to provide.

Mayor Rundle said it might be a policy discussion. He said with all things being equal, the Commission might want to keep employees at the average that was being aimed at rather than getting behind.

Wildgen said the work that staff had done on this issue was a good basis for continuing on in a format that had not been done before. He said that committee would be active and could feed into the situation of being ahead of the curve. He said when staff started negotiations and discussions and staff did not know what those issues were. He said staff could start the process in November as opposed to the timeline that started in April, but staff did not know at the time that those issues were going to be part of those discussions.

Commissioner Schauner said that was true with respect to this first go around on Benefits Committee work. He said it could be predicted that people would want more money and more time off. He hoped the Commission could discuss all of those issues as a package in the future.

Mayor Rundle said if staff did get a better handle on how those impacts were playing out and it appeared it was marginal, he would want to accelerate the timetable. Also, there were studies that show that some countries that had more vacation than this City had higher productivity and higher productivity was more economical.

Commissioner Highberger thanked Reeb and Carnahan for all their hard work on those last two issues and he hoped staff would continue with those efforts. He said the City’s guests from Eutin, Germany would be happy to see the City Commission improving vacation and benefits for the City’s employees. He said his only concern was that he wished he had a better handle on what it was going to cost the City. He said just from what he read, he did not think it would be significant enough to be a real concern.

Wildgen said the City was going to pay the same base salary and budget the same base salary for every position, the question was if someone was not there, would they need to cover that with overtime.

Commissioner Hack said that people who feel that their work was valued were more productive.

Mayor Rundle said this was one of a number of personnel projects that employee committees had been undertaking. He said personnel staff was hard working in addition to regular jobs. He said, for example, he understood that the Job Evaluation Committee had evaluated all of the City’s jobs in about a third of the time as projected.

Moved by Hack, seconded by Highberger, to receive the staff report on City of Lawrence employee benefits and direct staff to proceed with the recommendations in the Employee Benefits Committee Report. Motion carried unanimously. (12)

Receive new revisions to the proposed development code.

Linda Finger, Planning Director, presented the staff report. She said this came to the Commission with a proposal from staff that they had identified 11 major issues that staff thought the Commission needed to send back to the Planning Commission. She said staff’s recommendation was to refer those specific 11 changes back to the Planning Commission on November 17^th. She said the Planning Commission would be handling the K.U. City agreement that was sent to them and also 5 of the 7 specific map revisions that needed to be initiated individually.

Commissioner Schauner said what had historically been zoned A (Agriculture) and would become Urban Reserve, he asked if the use table changed for Urban Reserve as compared to agriculture.

Finger said agriculture and agriculture uses were still listed as specific use categories, but the UR district was designated to only permit what was existing zoned in the County prior to coming into the City. If the area carried an A or A-1 and in some cases R-1 zoning, there was some industrial county districts that were in North Lawrence. She said whatever zoning designation it carried in the County that use would continue on if it had been developed for that use, but it would carry the UR designation. She said if it was empty ground it would get to retain that same use. The exception to that idea was a cellular tower or a telecommunication tower could be requested, but it took a special use permit to allow that in the UR district.

Commissioner Hack said with all the issues that the Commission continued to throw at the Planning Department, she appreciated their work in getting ahead on this issue.

Commissioner Schauner thanked Finger for the Retail Market Study. He said it was an important ingredient for this undeveloped ground.

Moved by Dunfield, seconded by Schauner, to refer back to the Planning Commission, the new revisions to the proposed development code, for consideration on its November 17, 2004 meeting. Motion carried unanimously. (13)

Moved by Hack , seconded by Schauner , to adjourn at 8:40 p.m. Motion carried unanimously.

_____________________________

Mike Rundle, Mayor

ATTEST:

___________________________________

Frank S. Reeb, City Clerk

CITY COMMISSION MEETING OF SEPTEMBER 21, 2004

1. Contract – 17^th & Mass/ New Hamp Street Relief Sewer Project to BG Consultants for $170,095.

2. Contract – Full-Court software systems for Municipal Ct with Justice Systems for $105,314.

3. Resolution No. 6567 – declare vacant dwelling at 966 Jana Drive public health nuisance and order abatement.

4. Site Plan – (SP-04-25-04) Lake View Villas at Alvamar, 16 acre, NE corner of Lake Pointe Dr. & Clinton Pkwy.

5. Restrictive Covenants – Lawrence Regional Technology Ctr. for a business incubator bldg.

6. Signs of Community Interest – Lawrence Regional Antique Auto Club of American Antique Car Show; Friends of the Public Library & Lawrence Home Builders Assoc.

7. Release of Mortgage – 414 Locust, Christopher Dull & Samantha Falor.

8. Minutes amended – Sept 14, 2004.

9. Resolution No. 6566 – Bond issuance for Kasold, Peterson – N to KS Turnpike Authority for $770,000.

10. Public Education & Water Conservation Program.

11. City of Lawrence Employees Health Care renewal & recommendations.

12. City of Lawrence – Employee benefits.

13. Development Code revisions.