TREMONTON CITY CORPORATION
CITY COUNCIL MEETING
January 19, 2016

Members Present:
Diana Doutre
Lyle Holmgren
Jeff Reese
Bret Rohde
Lyle Vance
Roger Fridal, Mayor
Shawn Warnke, City Manager
Darlene S. Hess, Recorder

CITY COUNCIL WORKSHOP

Mayor Fridal called the January 19, 2016 City Council Workshop to order at 6:00 p.m. The meeting was held in the City Council Meeting Room at 102 South Tremont Street, Tremonton, Utah. Those in attendance were Mayor Fridal, Councilmembers Doutre, Holmgren, Reese, Rohde, and Vance, City Manager Shawn Warnke, and Recorder Darlene S. Hess. The following Department Heads were also present: Zoning Administrator Steve Bench, Public Works Director Paul Fulgham, Librarian Kim Griffiths, Police Chief David Nance, and Treasurer Sharri Oyler. Also in attendance was Finance Director Curtis Roberts.

The following items were discussed out of order.

Mayor Fridal welcomed the visitors which included; Brad Rasmussen with Aqua Engineering, Finance Director Curtis Roberts, Megan Weber with Zions Bank Public Finance, Kevin Christensen with Bear River Valley Health Department, and Wendy English from Small Business Development.

1. Review of agenda items on the 7:00 p.m. Council Meeting:

The Council reviewed the January 19, 2016 Agenda with the following items being discussed in more detail:

Capital Facilities and Impact Fee Facilities Plan. Brad Rasmussen from Aqua Engineering noted they have been working on what processes at the Wastewater Treatment Plant need to be upgraded. Once the information was compiled it was given to Zions Bank for the financial side. Mr. Rasmussen said that all the information being presented includes Garland being on the system. They will be included until they are officially off our system. Councilmember Rohde stated that it would be good to have a comparison showing the plan if Garland was officially off our system. Mr. Rasmussen noted that the plans are updated every five (5) years. It will probably take that long for Garland to build a facility, make plans, and get permits. In five (5) years, if Garland has their Wastewater Treatment Plant (WWTP), it would free up capacity (what Garland is currently using) and the plan would be re-evaluated. Manager Warnke stated there are regulatory requirements that will affect the Permit regardless of whether Garland uses Tremonton’s WWTP or not within the planning period used for the impact fee facility plan.

Mr. Rasmussen stated the City has a primary clarifier that was built in 1964 that still operates as part of the system. The original cost was $65K but would run $1M today. Some of the elements of the WWTP have a long life. In the Capital Facilities Plan there is some analysis of upgrades to the WWTP that are needed for growth by 2035 by upgrading to 2.5 MGD or to 2058 with a 4 MGD upgrade; the dates are based on historical data, but will not be exact.

Councilmember Holmgren asked how many ERUs would be available with the upgrades. Mr. Rasmussen informed the Council that the 1.9 MGD upgrade would have about 5,428 ERUs; 2.5 MGD – 7,143 ERUs; 3MGD – 8,574 ERUs; and 4 MGD – 11,429 ERUs. Director Fulgham commented that right now about 50% plus in solids handling comes from industry or loading. Mr. Rasmussen noted that loading and flow are not in the estimates. In 2020 phosphorus removal will be required and it is projected that in 2025 nitrogen removal will be a requirement of Tremonton City’s WWTP operating permit regulated by the State of Utah.

Councilmember Reese expressed concern that the proposed impact fee is a big jump in cost. Councilmember Holmgren stated it is a balancing act and takes time to get appraisals and get things ready for building. It would have a serious impact on developers and builders. The economy cannot absorb that kind of an increase all at once. It might be better to do it in increments. Director Fulgham stated that if there is growth and no impact fees, then costs to fund WWTP upgrades will have to come from user fees.

Mr. Rasmussen said the State defines affordability as 1.4% of the median gross income of an area. If user rates go over that amount, the State starts contributing by discounted costs on loans or grant money. Older WWTP facilities are starting to get close to that amount. Sewer rates and fees are starting to go up to the States definition of affordability. To put in a septic tank and drain field costs around $10K. Mr. Rasmussen and Ms. Weber noted that the Total impact fee per ERU is not out of line with others.

Ms. Weber stated that the information presented is the maximum allowable impact fee. If the Council discounts the rate, the difference would be pushed to the user rates and would remove the fair share of the facility. Those already in the City have already paid impact fees. If users pay any of the costs for the expansion, they would be subsidizing new growth.

Councilmember Holmgren wondered about industry paying for capacity. When new industry comes, the City often forgives some of the fees. Director Fulgham noted that the Council has that option to make those decisions. Sometimes the Redevelopment Agency (RDA) pays the impact fees as they collect tax increment. Manager Warnke explained that State Law allows exempting certain development activities from paying impact fees such as schools, affordable housing, and development with a broad public purpose; however, if a City exempts the development activity from paying impact fees the City must find an alternative source of payment except for the payment of impact fees except for the affordable housing.

Manager Warnke said that growth is coming north along the Wasatch Front and that an impact fee of $15K is not unusual compared to other communities along the Wasatch Front. Councilmember Vance stated that contractors can sway people to build in different communities based on impact fees.

Councilmember Vance asked if the plan includes the premium new upgrades. Mr. Rasmussen commented that the new technology is membrane facilities. The City will not be going to membrane but will continue using a lot of existing components of the WWTP. Finance Director Roberts explained that Logan City covers a big part of Cache Valley. The plant upgrade is around $110M. Councilmember Doutre noted that the price is so high for Logan because they didn’t do upgrades for a long time. Finance Director Robert knows of some communities down south that are looking at upgrades that will cost $30-40M. Payson City has been doing improvements and arbitrarily raised their sewer rates by $15 across the board for every user based on an estimate for an upgrade to their WWTP that did not qualify for impact fees. Other cities across the State are dealing with this same issue. Some cities are charging $50-60 a month for wastewater treatment fees.

Councilmember Reese would like to see a chart showing the higher rates other communities are paying. Finance Director stated that Nibley bumped their rates to around $60 and Logan is talking about raising rates to close to $70. Logan is raising user rates because there are no impact fees to cover the necessary upgrades. There are regulatory responsibilities that must be met. This is a big decision, but as some point funds will be needed to make the improvements. It is a balancing act and impact fees or sewer rates must be raised to cover the coming expenses. It will impact developments and might slow things down. Councilmember Holmgren explained that perspective homeowners will argue over amounts as small as $500. The Council needs to work through this issue but not all at once.

Manager Warnke noted there is a detailed schedule included in the ordinances for City Council. There will be a public hearing this evening before the Council can take action or table the item.

Resolution No. 16-04. Manager Warnke noted that in the past the Council has discussed raising the sewer rate over the next ten (10) years up to $30 a month. If the fee schedule is adopted, there would be an immediate $2.75 increase and another $2.75 in January of 2017 and January of 2018. Councilmember Reese remarked that the Council has been working on this issue for quite some time. The user rate increase is not a new issue.

2. Economic Development Discussion – Mayor Roger Fridal

a. Comments/Presentation from Wendy English, Business Expansion and Retention Small Business Development Center Business Analyst

Mayor Fridal turned some time over to Wendy English from the Small Business Development Center. Ms. English explained they are located at Utah State in Brigham City and have several resources available for small businesses. They can receive help with marketing plans and are taught how to utilize social media. Help is also provided with business plans, financials, and forecasting. It is an all around service for small business with no charge for the services.

To help Brigham City Main Street, Ms. English worked with a retailer on Main Street and put together “Brigham’s Christmas”. Ms. English is happy to help with revitalization on Tremonton’s Main Street as well. A historic group was setup in Brigham City and they will take over “Brigham’s Christmas”. Ms. English could help get community projects started in Tremonton or work on Main Street Revitalization.

Councilmember Doutre asked if the Small Business Development Center works with any clubs like Kiwanis or the Lions Club. Ms. English worked with clubs for the Brigham’s Christmas. The Center found discount rates for the lights and retailers worked together to put up the lights. It helped build relationships between retailers on Main Street. Councilmember Vance knows several individuals that have received help. Ms. English is fantastic at business development. It will be nice to see what can be done for downtown revitalization.

Ms. English noted that in January 2016, the Center brought in $200K of Capital infusion to Tremonton through grant money and other things. Ms. English sends information out in her emails about grants and incentives that are available. Mayor Fridal, Manager Warnke, and Councilmembers Vance and Holmgren receive Ms. English’s emails. If the other Councilmembers would like to be included they can be added to her list.

Councilmember Holmgren asked about farmers markets. Ms. English will be meeting with Brigham to put together a farmers market and would be happy to work with Tremonton as well. The first three (3) years when new ideas or businesses start take time to develop into something good. Ms. English tells clients not to expect to break even for at least three (3) years. A farmers market will take time to gain momentum and grow. Ms. English will get email addresses for each Councilmember from Recorder Hess and contact them personally.

Mayor Fridal gave the Council time to discuss what they would like to see happen in Tremonton in the next few years. Ms. English spoke with a developer who said all the venture capitalists are starting to look at Northern Utah. The Council should plan as if growth is coming. Councilmember Rohde noted that the Council is progressive and supports growth. This is a great community for internet storefronts. Items can be sold on-line but still need a storefront. Main Street would be ideal for internet storefronts. Councilmember Holmgren agreed that the community would be great for Councilmember Rohde’s idea. Tremonton has UTOPIA (Utah Telecommunication Open Infrastructure Agency) available in many locations which would be helpful for that type of store. Location is good in relation to the freeways. Councilmember Holmgren noted that the Council will need to work on utilities.

Councilmember Rohde heard that people come to Tremonton to purchase vehicles because the sales tax is low which saves them money. Main Street could use some renovations like nice sidewalks and new streetlights. Councilmember Reese noted that the renovations in old downtown Logan look nice. Ms. English remarked that a lot of money goes into the new facades in Logan. Councilmember Vance asked if Brigham City Main Street will be changing. Ms. English stated there has been talk about changing from four (4) lanes to two (2) and making bigger walk ways and open areas. It is in the consideration stage and Brigham will have to work with UDOT (Utah Department of Transportation). Sometimes UDOT sells a section of Main Street back to cities.

Brigham has good vibes on Main Street right now and retailers are working together. Tremonton also has good vibes and a dress shop girl with lots of energy that could be put to good use. Ms. English noted that the historical society has grant money available for some older buildings to assist with renovations. Manager Warnke said the City has started the process to become a CLG (Certified Local Government). The grants are usually $4K and the City must have a functioning CLG Board and take a few other steps to be an eligible CLG. Councilmember Vance spoke about the RDA and that money should be prioritized and put in the correct place to help more business come into Tremonton. Councilmember Doutre said the members of the Women’s Civic League would like to go to work and be involved anyway they can. Councilmember Rohde would like to see the City continue to develop things for residents like the new Trail.

Mayor Fridal asked that the Council discuss Economic Development again in the next City Council Work Session.

Item 3. was moved to City Council due to time restraints.

3. CLOSED SESSION:
a. Strategy session to discuss the purchase of real property when public discussion of the transaction would disclose the appraisal or estimated value of the property under consideration or prevent the public body from completing the transaction on the best possible terms
b. Session to discuss the mental health, character, and competence of an individual

The meeting adjourned at 6:55 p.m. by consensus of the Council.

CITY COUNCIL MEETING

Mayor Fridal called the January 19, 2016 City Council Meeting to order at 7:04 p.m. The meeting was held in the Tremonton City Council Meeting Room at 102 South Tremont Street, Tremonton, Utah. Those in attendance were Mayor Fridal, Councilmembers Doutre, Holmgren, Reese, Rohde, and Vance, City Manager Shawn Warnke, and Recorder Darlene S. Hess. The following Department Heads were also present: Zoning Administrator Steve Bench, Public Works Director Paul Fulgham, Librarian Kim Griffiths, Police Chief David Nance, and Treasurer Sharri Oyler. Also in attendance was Finance Director Curtis Roberts.

1. Opening Ceremony:

Mayor Fridal informed the audience that he had received no written or oral request to participate in the Opening Ceremony. He asked anyone who may be offended by listening to a prayer to step out into the lobby for this portion of the meeting. The prayer was offered by Councilmember Doutre and the Pledge of Allegiance was led by Councilmember Vance.

2. Introduction of guests:

Mayor Fridal welcomed Brad Rasmussen from Aqua Engineering, Finance Director Curtis Roberts, Megan Weber from Zions Bank, Kevin Christensen from the Bear River Valley Health Department, and assorted guests.

3. Approval of Agenda:

Mayor Fridal asked if there were any changes or corrections to the Agenda. No comments were made.

Motion by Councilmember Reese to approve the agenda of January 19, 2016. Motion seconded by Councilmember Doutre. Vote: Councilmember Doutre – aye, Councilmember Holmgren – aye, Councilmember Reese – aye, Councilmember Rohde – aye, and Councilmember Vance – aye. Motion approved.

4. Approval of minutes – January 5, 2016:

Mayor Fridal asked if there were any changes to the minutes. There were no comments.

Motion by Councilmember Holmgren to approve the minutes of January 5, 2016. Motion seconded by Councilmember Vance. Vote: Councilmember Doutre – aye, Councilmember Holmgren – aye, Councilmember Reese – aye, Councilmember Rohde – aye, and Councilmember Vance – aye. Motion approved.

5. Years of Service Award- Mayor Roger Fridal
a. Lyle Holmgren, 10 years of Service

Mayor Fridal thanked Lyle Holmgren for his 10 years of service to Tremonton City.

6. Public comments: Comments limited to three minutes:

There were no public comments.

7. Presentations on:

Item 7a. and 7 b. were discussed together.

a. Capital facilities plan and Impact Fee Facilities Plan for the Wastewater Treatment Plant- Brad Rasmussen, Aqua Engineering

b. Impact Fee Analysis- Representative from Zions Bank Public Finance

Ms. Weber from Zions Bank Public Finance stated that in May of 2001 there was a significant update to the Impact Fee Act. The level of service must be clearly defined and justified. The Impact Fee Act allows for a six to ten (6-10) year horizon for projects that are included. As in the past, no repair or replacement projects are included in the Impact Fee Analysis, only growth related projects. Historic costs are reviewed for the buy-in capacity for any existing assets that will serve new growth. No project improvements are included in the Impact Fee Analysis, only system wide improvements.

Mr. Rasmussen explained that in 2020 there will be a new phosphorus rule that will require a reduction in phosphorus in the effluent that is discharged from the WWTP. The WWTP (Wastewater Treatment Plant) has a little less than 1.9 MGD (Million Gallons per Day) capacity now. By putting in some dewatering equipment, the plant will provide the biological capacity to meet the flow capacity of 1.9 MGD. The planning horizon within the Impact Fee Facility Plan raises the 1.9 MGD capacity to 2.5 MGD. The 1.9 MGD capacity will put the plant in compliance up to 2021; however, the nutrient requirement will need to be done so the next project should start in 2018. If Garland leaves the system, the dates may be extended.

The expansion part of the project will produce more aeration by installing new aeration basins. There will be anaerobic basins and anoxic basin to address nutrient removal. The plan also calls for blowers, digester, additional UV modules, headworks capacity in the screen, and a final clarifier. The idea of an impact fee is to charge new users for the cost of expansion for new growth. Zions Bank Public Finance figured the maximum amount allowed for impact fees for new users.

Ms. Weber explained that the City has 538 ERUs (Equivalent Residential Units) available in the current system or 9.9% of the total capacity. There is $5.7M of qualifying assets in the existing system with $569,161 being included in the impact fee that could be charged to new growth as their share of the existing assets. An expense for the update to the Impact Fee Facilities Plan and the Impact Fee Analysis was also included at $27K for professional expenses. There is no outstanding sewer related debt in the City currently. The City is looking at issuing debt in 2018 for the upgrades to the WWTP. The par amount of that debt is $11.2M with 85.8% of the bond interest expense qualifying for impact fees. It would be a twenty (20) year bond.

The impact fee calculation divides the impact fee eligible costs by eligible capacity. Cost was divided by the 2,252 future ERUs the system will serve (538 ERUs in the existing WWTP and 1,714 ERUs from the new expansion project) with a resulting cost per ERU. The projects, buy-in to existing assets, credit for 2018 bond proceeds, debt service, and professional services are all used to calculate the maximum allowable fee under law for a total of $6,602 per ERU. The Council can assess a fee lower than $6,602 but not higher. A single family residential development is equivalent to 1 ERU; Mutli-Family developments are equivalent to 0.65 ERU and would cost $4,318 each. Non-residential development would be assessed $18.86 per gallon multiplied by the estimated winter month gallons per day. That amount would be determined by City building officials at time of building permit issuance. The City would also need to consider load in the calculation.

Mr. Rasmussen explained that BOD (Biochemical Oxygen Demand) is a key contaminant that takes oxygen. Industries often have low flow but high load. Load can use up a lot of capacity and must be considered. Ms. Weber stated that once an impact fee is adopted there is a ninety (90) day period before the new impact fee comes into effect as required by State Law.

Councilmember Rohde asked how many new homes were projected a year. Mr. Rasmussen stated the numbers came from the Governor’s Office projection for about 2% per year. The information was taken from the previous Impact Fee growth model prepared by Jones and Associates. Manager Warnke explained that historical information was also used by Jones and Associates for growth projection. Mr. Rasmussen said that over time the Governor’s Office projections are usually pretty close. In general if growth is a little faster, the life is a little shorter and if growth is slower, the life is a little longer.

Councilmember Vance asserted that the decision to expand the WWTP hinges on whether Garland stays on the system or leaves. Garla