03-14-77 Council Meeting Minutes

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M REGULAR MEETING MARCH 14, 1977 u COMMITTEE OF THE WHOLE MEETING (CONTINUED BILL NO. 32 -77 A BILL FOR ADDITIONAL APPROPRIATION FROM THE GENERAL PARK FUND IN THE AMOUNT OF $75,000.00 TO ACCOUNT NUMBER 722.0 PROPERTIES, MOTOR EQUIPMENT. This being the time heretofore s were given an opportunity to be the presentation for the bill. Park Fund, due to receiving more since the entire motor equipment now in need of purchasing motor ranger is a 1967 model with over dollars for complete overhaul. chase a new aerial tower which c Member Dombrowski made a motion Council Member Szymkowiak. The BILL NO. 24 -77 A BILL OF THE BEND, INDIANA, FACILITIES OF et for public hearing on the above bill, proponents and opponent heard. Mr. James Seitz, Superintendent of Public Parks, made He indicated there was a surplus of about $150,000 in the Genera money from various tax funds than was anticipated. He said tha account was deleted from the 1977 budget, the Park Department w equipment and a new high ranger. He said their present high - 60,000 miles. He said it would require four or five thousand He said in their opinion, the City would be better off to pur- osts between thirty -five and forty thousand dollars. Council to recommend this bill to the Council favorable, seconded by motion carried. COMMON COUNCIL OF THE CITY OF SOUTH APPROVING THE LEASING OF WATERWORKS CLAY UTILITIES. Council President Parent made a motion that public hearing be hE the lease for sewage at this time, but the Council vote separatE Council Member Adams. The motion carried. Council Member HorvZ Before the presentation and public hearings on the next two bill be made. It has been determined that for presentation purposes testimony: on the Lease - Purchase Agreement for the Waterworks FE Agreement for the Sewage Disposal Facilities of Clay Utilities, However, the Chair would like to remind all persons present that on each of these bills is: (1) to determine whether there is a each lease, and (2) to determine whether the rental payments of to Clay Utilities, Inc., are fair and reasonable. When giving which lease agreement you are addressing. Next, the Chair woul� c.7i ch +n ar,cak nn i-hPGa i-wn hi 1 1 S _ that in liaht of the fact that ld on this bill, as well as ly for each bill, seconded by th read the following statement: s, two announcements must first only, the Council will allow cilities, and the Lease - Purchase Inc., to be presented together. the purpose of public hearings necessity for the execution of each lease which are to be paid our remarks please indicate like to remind all persons who there is an annexation lawsuit pending on Clay Township, that no remarks should be given which in any way speak to the merits of that case. Any remarks which are offered on the issue of annexation will be ruled out of order unless they are to prove that each of the facilities is with,,in the distance conditions of the State law which govern these leases. Mr. Thomas Brunner, City Attorney, questioned the time the hearing was advertised, he indicated this hearing should be heard at 7:00 p.m. The ad- vertising was brought to the Chambers, and it indicated that the hearing was scheduled for 6:00 p.m. A .discussion- _en"sued.as to whether the first or last advertising would take precedent. Council President Parent made a motion that the Council hear this matter as scheduled in the last advertising, seconded.by Council Member Kopczynski. The motion carried. This being the time heretofore set for public hearing on the above bill, proponents and opponent! were given an opportunity to be heard. Mr. John Stancati, Director of Utilities, introduced Mr. Stravinski, of Murphy Consultants, who gave an explanation of their study. He said their firm made a valuation of the cost of Clay Utilities. He said they were given information by Clay Utilities which provided them with information on the actual costs of the facility. He said the, utilized the data given to them by Clay Utilities to determine the total cost of the water and sewer system.. He said there were no attempts made to varify the size of sewer or water mains. He said they opened several manholes to check sewer size and dlove the entire system to determine the location of the fire hydrants. He said they took all data and updated the cost from the date of installation. He -said they depreciated the cost of the facility of 12% per year. He said they also depreciated the cost of their private evaluation of the cost of the facility and depreciated it by 1z% per year. He said the cost they arrived at is the original cost accord- ing to the information supplied by Clay Utilities, without an engineering service. He said the sewer system cost was $918,636 and the water system $611,389, for a total of 1.53 million. He said the depreciated original cost was 2.13 million and the replacement cost, according to their evaluation as of December 31, 1976, was 2.38 million. He said there was also another item, which was the Aqua facility, and they determined its present valuation was $92,985. Mr. Patrick McMahon, Director of Public - Works, indicated that the City Engineering Department was requested to review the work done by Murphy Consultants and they found it to be an outstanding job. Mr. Dave Wells, Manager of the Bureau of Design and Administration indicated that over the years they had become familiar with this system. He said they had T.V.'d portions of the system, and in his opinion the system was brand new. Mr. William Dillon, Waterworks Engineer, indicated he had been investigating this water system for two years, and it was all in good working condi- tion. He said it was adequate size and an adequate water system. He said the fire hydrants required nozzle adapters and special wrenches to open. He said the system was acceptable in engineering aspects. Mr. Peter Mullen, City Controller, indicated his office had been working closely with Mr. Stancati during the course of negotiations, and assisted him in compiling the cost figures. He said they feel it is in the best interest of the citizens of South Bend that Clay Utilities be purchased. Mr. Walter.Lantz, Chief Deputy Controller, indicated that revenues for 1976 to Clay Utilities was $236,164, and of this amount $43,640 came from residential custom $113,011 from motels, $54,904 from apartments and $24,612 from commercial establishments. He said the revenue growth had increased 120% in the last four years. He said that most of the operating costs being born by Clay Utilities will not be required for the City. He said that Clay Utilities has 333 customers, which is only an increase to the City of .8 %, therefore, there is no reason the City's present staff can not handle this small of an increase. He said that in effect, the majority of Clay Utilities' expenses would not be cost to the City. Mr. Robert Parker, Chief Deputy Attorney, indicated that the State had developed statutm for water - works . and sewage facilities that were enacted in 1975. He indicated that only revenue from the users could be used to pay the lease purchase. He said if condemnation were to take place, it is the feeling of the Administration that the approach that would be used would be the cost approach, replacement value less deprecation. He said the contract has been negotiated with no regard to goodwill and going value, or the value of natural resources. S,