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HomeMy WebLinkAbout03-14-77 Council Meeting MinutesREGULAR MEETING MARCH 14, 1977 Be it remembered that the Common Council of the City of South Bend met in the Council Chambers of the County -City Building on Monday, March 14, 1977, at 6:00 p.m., Council President Roger O.'Parent presiding. The meeting was called to order and the Pledge to the Flag was given. ROLL CALL PRESENT: Council Members Serge, Szymkowiak, Miller, Taylor, Kopczynski, Adams, Dombrowski, Horvath and Parent ABSENT: None REPORT FROM THE SUB - COMMITTEE ON MINUTES To the Common Council of the City of South Bend: Your sub - committee on the inspection and supervision of the minutes would respectfully report that it has inspected the minutes of the February 28, 1977 meeting of the Council and found them correct. The sub - committee, therefore, recommends that the same be approved. /s /Roger Parent /s/ Mary Chris Adams Your sub- committee on the inspection and supervision of the minutes would respectfully report that it has inspected the minutes of the February 7, 1977 meeting of the Council and found them correct. Your sub - committee, therefore, recommends that the same be approved. /s /Roger O. Parent W REGULAR MEETING MARCH 14, 1977 REGULAR MEETING Council Member Horvath made a motion that the minutes of the February 28, 1977 meeting, and the minutes of the Special Meeting of February 7, be accepted as read and placed on file, seconded by Council Member Dombrowski. The motion carried. Council Member Kopczynski made a motion to resolve into the Committee of the Whole, seconded by Council Member Dombrowski. The motion carried. COMMITTEE OF THE WHOLE Be it remembered Whole on Monday, presiding. BILL NO. 20 -77 that the Common Council of the City of South Bend met in the Committee of the March 14, 1977, at 6:03 p.m., with nine members present. Chairman Frank Horvath A BILL TRANSFERRING THE SUM OF $200,000.00 BETWEEN VARIOUS ACCOUNTS IN THE CUMULATIVE CAPITAL IMPROVEMENT FUND OF THE CITY OF SOUTH BEND, INDIANA. This being the time heretofore set for public hearing on the above bill, proponents and opponents were given an opportunity to be heard. Mr. Peter Mullen, City Controller, made the presentation for the bill. He said basically this was the same transaction which you approved last February; its purpose being the catching up of back payments in the Term Bond Fund. He indicated that the Parking Study Commission had recommended that $230,000 be put toward the Term Bond Fund to catch up back payments, but the Administration felt that $200,000 was sufficient. Council Member Adams asked if this bill was amended to $125,000, what would be the amount put to the arrearage. Mr. Mullen indicated they would only be able to put $50,000 in to reduce the deficit. Council Member Miller made a motion that this bill be recommended to the Council favorable, seconded by Council Member Szymkowiak. Council Member Adams indicated she would like to see this amended to $125,000 Mr. Mullen indicated that the City's bond rating was not very good at this point. Council Member Adams made a motion to amend this bill to $125,000, seconded by Council Member Serge. Council Member Miller indicated he felt the Council had some obligation to follow the recommendations of the citizen body it appointed. Council Member Adams indicated that the scope of their study has been parking and the City has other problems. Mr. Mullen indicated that this effected the en- tire credit rating of the City. Council Member Adams asked Councilman Serge's approval to change, the amendment to $150,000.. Councilman Serge approved. Council President Parent indicated he approved of this amendment. The motion carried to amend, opposed by Council Members Szymkowiak and Miller. The motion to recommend the bill to the Council favorable, as amended, carried. BILL NO. 22 -77 A BILL APPROPRIATING $50,000.00 FROM THE FEDERAL ASSISTANCE GRANT COMMONLY REFERRED TO AS GENERAL REVENUE SHARING, FOR HEALTH SERVICES TO BE ADMINIS- TERED THROUGH THE DEPARTMENT OF HUMAN RESOURCES. This being the time heretofore set for public hearing on the above bill, proponents and opponents were given an opportunity to be heard. Mr. Peter Mullen, City Controller, made the presentation for the bill. He said these funds will enable the Mental Health Center, through the Delos House, to assist and rehabilitate drug abusers in the South Bend community. He said it was the objectiv( of this contractual arrangement to make drug abusers more useful members of society. Council Member Dombrowski made a motion to recommend this bill to the Council favorable, seconded by Council President Parent. Council Member Horvath indicated this money was well spent. The motioi carried. BILL NO. 23 -77 A BILL APPROPRIATING $200,000.00 FROM THE FEDERAL ASSISTANCE GRANT COMMONLY KNOWN AS THE GENERAL REVENUE SHARING FUND FOR CENTURY CENTER CONSTRUCTION, TO BE ADMINISTERED BY THE CITY OF SOUTH BEND THROUGH THE DEPARTMENT OF PUBLIC WORKS. This being the time heretofore set for public hearing on the above bill, proponents and opponents were given an opportunity to be heard. Mr. Peter Mullen, City Controller, made the presentation for the bill. He said originally this $200,000 was included in the Cumulative Capital Improve- ment Fund budget for 1977 as approved by the Common Council. He said at this time it has been decided that these funds are needed for Parking Garage Bond retirement. He said these funds will replace funds previously budgeted. Mrs. Jane Swan, 2022 Swygart, indicated she had just been ap- pointed to the Century Center Board of Managers, and everyone was very enthusiastic in their at- tempts to get conventions to come to South Bend. She said what they did not need now, was for our mayor to tell everyone South Bend was a dying city! Council Member Adams indicated that the Council had already been asked to appropriate over $400.,000 of Revenue Sharing for past mistakes, and there were other uses for this money. She made a motion to amend this bill to $150,000, seconded by Council Member Dombrowski. The motion carried. Council Member Taylor made a motion to recommend this bill to the>.Council favorable, as amended, seconded by Council Member Adams. Th motion carried. BILL NO. 30 -77 A BILL APPROVING MONEYS FOR THE PURPOSE OF DEFRAYING EXPENSES INCURRED UNDER THE FEDERAL GRANT GIVEN TO THE HUMAN RIGHTS COMMISSION FOR THE FISCAL YEAR BE- GINNING OCTOBER 1976 AND ENDING JUNE 30, 1977, IN- CLUDING ALL OUTSTANDING CLAIMS AND OBLIGATIONS AND FIXING A TIME WHEN THE SAME SHALL TAKE EFFECT. This being the time heretofore set for public hearing on the above bill, proponents and opponents were given an opportunity to be heard. Mr. William Gilkey,. Director of Human Resources. made the presentation for the bill. He indicated that the 706 status will allow our Human Rights. Commission to better serve the community. He said they will be able to service cases that are normally heard in Indianapolis or Washington D. C. Council Member Dombrowski made a motion to recommend this bill to the Council favorable, seconded by Council Member Szymkowiak. The motion carried. 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, J' RFC,TTT,AR MFFTTNG MARCH 14, 1977 COMMITTEE OF THE WHOLE MEETING (CONTINUED) Mayor Peter Nemeth indicated that one of the questions that must be addressed is why should the City of South Bend purchase Clay Utilities, what is its value to the City. He asked Jon Hunt, Deputy Director of Human Resources to provide background information as to why the City was interested in this purchase. Mr. Hunt gave a slide presentation showing statistical information on housing permits issued in South Bend, indicated a' drastic decline; the population of the City which also declined approximately 10,000 in the last five years. Mayor Nemeth indicated he felt something had to be done about the problem of housing and population. He indicated that the revenues had increased in Clay Township. He said that a substantial portion of Clay Township was annexed in 1973, and that unless the City does something about water and sewage they will lose the annexation in Court. He indicated he thought the City would be able to make revenue from Clay Utilities. He indicated there had been some discussion about delaying this matter. He said he thought it already has been.made clear that the cost, or the valuation, of Clay Utilities would have to be determined by fair market value. He said the Administration had negotiated a price approximately 9% below the asking price. He read a letter from Mr. Helling, Clay Utilities' at- torney that indicated that unless the ordinance received favorable vote at this meeting there was no possibility of future consideration of the present lease figures. He said the Administration could go no further because they had done the best they could. Council Member Kopczynski made a motion to suspend the rules to allow the Council to make presentations only on this matter, not questions and answers, before the public was allowed to speak, seconded by Council Member Dombrow- ski. The motion carried. Council President Parent commended the Council for spending so much tim, on this proposed purchase. He indicated they had only five weeks to study this lease purchase agreement, where the Administration had three months to prepare it. He said he was going to ask the Council to continue public hearing on this matter. He indicated he was in favor of the pur- chase, and he was willing to do anything he could to expedite the purchase at a fair and reason- able price. He said it was the Council's job to determine the fair price. He said the price was negotiated down from 2.3 to 2.2 million and when the Council exerted pressure it was cut to 2.1 million. He said that the interest rate of 7% is the highest it could be at this time. He said he was going to ask the Mayor's office to renegotiate the purchase of Clay Utilities. He said the City should immediately stop helping to repair and maintain Clay Utilities' facilities. He said we should look at the 1965 contract, since we are not in the same situation as Mishawaka, because we provide the water and sewage to them. He indicated that the Council was the only one:. attempt- ing to bring down the price. He indicated he would not vote for Clay Utilities until the price was right. Council Member Miller indicated there were two basic issues the Council was concerned about, the unreasonable price and whether they should delay the matter. He said the unreasonable price revolves around contributions in aid of construction which amounted to 1.2 million. He said the actual investment in capital stock was $305,000 and there is a long term debt of $570,000. He said that $875,000 is at least the minimum investment by Clay Utilities. He said that on the surface it would seem that Clay Utilities was getting a "wind fall" profit, however, there has been a net loss over twelve years, therefore there has been no actual gain. He said in regard to the interest rate, he had been given figures that the current rate today for utility bonds is 7 %. He said that in regard to continuing this matter, he thought each Councilman who was for continuance should guarantee that the rate will be less in the future. He said he felt a vote to delay was a vote against the lease purchase. Council Member Adams indicated that the $875,000 was in the entire system, Mishawaka, Elkhart and the system the Council was considering. She read the following statement: "One of the issues before us this evening is determining whether the rental payable to Clay Utilities is fair and reasonable. I would like to address myself to the reasonableness and fairness of the price which has been negotiated. There is no required formula to determine fair value. I believe it requires a reasonable judgment grounded in a proper con - sideration of all relevant facts. A public utility is charged with administering a public trust delegated to it by the state; it performs a function of the state andis created for public purposes) If we agree to the negotiated price, it is obvious that the construction costs and contributions in aid of construction made by the users in the area will be converted into a monetary profit by the owners of Clay Utilities and that said users will pay again through rates for parts of a water and sewer system which they have already paid for. I believe this to be unfair. It is not in the public's interest and contributions in aid of construciton and donated property should not be in- cluded in arriving at a fair price. When one seeks to buy a business, one might apply the yard- stick of a price of earnings ratio. In acquiring a business this ratio is approximately five to one. Assuming profits of $75,000 this would make the facilities have a fair value of $375,000. I would like the Council to ask that Clay Utilities present us with the documents giving informa- tion in regard to the actual investment by Clay Utilities in the system (excluding aids in con - struction). Particular concerns I have regarding the lease itself are: 1. Will Clay Utilities assume responsibility for all claims for damages occurring before June 1? 2. The cost of pro- viding insurance and the possibility of not being able to obtain insurance which could cause the city to be in technical default. 3. The constitutionality of having one lease contingent on the other. 4. How can other funds be used to add or extend the system when state law specifically states that these costs can be met only from revenue derived from rates. 5. The lease should be changed to include that notice be served on the Board of Works before Clay Utilities can under- take any repairs at the City's expense. 6. Notice of default should be served on the Mayor, membe of the Board of Works, City Clerk and President of the Common Council. We also have to explore th question of whether the City of South Bend would be liable for injuries or damages resulting from the conditions of the waterworks and sewage facilities. In particular I am concerned about the in- adequate pressure and supply of water to extinguish fires." She indicated pressure was brought to bear on the Council four weeks ago regarding the resolution they were asked to.pass, and now pres- sure was being exerted again. She said she felt the Council should make a reasonable effort to determine the fair price. Mr. Joseph Helling, attorney, spoke on behalf of Clay Utilities and its stockholders. He gave the background of the utilities, which started in 1965. He said that Clay Utilities showed a profit for the first time in 1975. He said they anticipated approximately 200 new apartment units, 50 single family dwellings and 4 commercial customers this year, without having to lay any more pipe. He gave the revenue from water and sewer. He indicated there was a provision that the corporation completely dispose of all of its assets and distributes them to their shareholders within a 12 month period, there will be only one capital gain. He said that tomorrow morning that tax advantage will be gone, due to the time element involved. He said the users should be given some thought, since there is no way Clay Utilities can reduce the rates, such as the City is capable of doing. He indicated they pay 20% more than any customer the City of South Bend has. Council Member Adams asked if Elkhart has already entered into an agreement such as this. Mr. Helling indicated he did not know. EL-91 REGULAR MEETING MARCH 14, 1977 u COMMITTEE OF THE WHOLE MEETING (CONTINUED) Council Member Parent made a motion to recess, seconded by Council Member Dombrowski. The meeti was recessed at 8:37 p.m., and reconvened at 8:58 p.m. Mr. Dan Manion, attorney representing Clay Concerned Citizens, read the following statement into the record: "As you are aware, I am the attorney for an association called the Clay Concerned Citizens. In the past few meetings of the Council, I have attended on behalf of the group mainly to monitor the proceedings with regard to the acquisition of Clay Utilities, Inc., by the City of South Bend. The purpose of this letter is simply to notify the Council of what our intentions are. We strongly object to the acquisition for many reasons, among those being, that the lease statutes are very possibly unconstitutional, that the price is much too high and will thus re- sult in an excessive burden on the present users and rate payers, that the present users and rate payers will have to pay twice since they have already paid a considerable sum for their water and sewer facilities, that the rate payers and users will be faced with extreme increases since all additions and extensions must be constructed only with revenues generated from the rates, and that the mandate in each lease that the acquisition include both the water and sewage facilities or non at all is contrary to the statute. Because of these and other objections, in the event the Counci does adopt the ordinance authorizing the execution of the leases between the City of South Bend and Clay Utilities, Inc., certain rate payers and users will file an injunction and /or a remonstra against the City's entering into these leases. If necessary, these individuals are willing to carry out their injunction to the Court of Appeals and even to the Supreme Court. Because of the many inequities that these leases will inflict upon the users and rate payers presently using the Clay Utilities system, those users and rate payers are willing to go to this extent in order to get a full legal hearing on the issues. This will, of course, take the time for execution of the lease well pastthe June lst "deadline "duto the fact that both leases provide that all appeals must be finally resolved before the lease can begin. My purpose for informing you of our intentions in this manner is to assure the Council that our motivations are in good faith, and that we in- tend no surprises or unusual tactics. Our actions are only secondarily prompted by the effect, the leases may have on annexation. We feel that this acquisition will have no effect on the an- nexation policies one way or the other, but instead will simply have a detrimental effect on the rate payers and users of the present Clay Utilities facilities. The city administration apparent] has been willing to sacrifice the excessive high cost of the facilities in exchange for what they think is a sure route to a successful annexation. Clay Utilities knows of that motivation and thus the high price tag. However, the city's motivation is based upon a very debatable legal analysis. In any event, it is our fear that the city will acquire the Clay Utilities and will operate it with something other than the best interests of the people using the facilities. It is our hope that the Council will not adopt the proposed ordinances to.execute the leases. But if it does, I have outlined what our intentions will be from that point forward. I genuinely ap- preciate the Council's cooperation and willingness to listen to all sides of this issue." Mr. Hank Waldren, 52610 Kenilworth, asked if the present sewer and water lines that have already been installed were being used at full capacity; what is the present size the trunk sewer lines; present size and capacity of water service; is the size of water and sewer capable of handling all the residents that are located on the lines that have been laid. Mr. John Stancati, Director of Utilities, indicated that the size of the sewer is sufficient and it is only used 1/5 of its capacity. He said the water lines that have already been laid can meet any capacity. He said for the most part where these lines are laid.most of the people are already tied -in. He said the existing facility is more than capable of handling what was in the area. Mr. Waldren asked if they would be willing to have a qualified engineer go over these plans with the City engineers. Mr. Stancati.indicated they would. Mr. John Horning, President of the Carriage Hills Home Owners Association, 52428 Tallyho Drive North, said there were four facts that the Council should con- sider: rate increase, payment fir the purchase agreement of Clay Utilities; pressure problems; maintenance upkeep and the retention basins. He said the residents and users of Clay Utilities are already paying excessive charges for their water and sewer, and are violently opposed to ad- ditional increases. He said they were certain that there.would be legal action taken up with the PSC by the residents and users. He said with respect to the purchase, it has been reported that the customers will windup paying for it and they have already paid for the facility. He said there were a number of complaints by residents about the water pressure, and there are pressure readings on record with the PSC. He said with regard to the rentention basins, he indicated they do have them, but they are not maintained and are unsafe. He said they were very much op- posed to the purchase by the City of Clay Utilities. Mr. Jim DeLuca, 52131 Carriage Hills Dr., indicated he would like to know why the City would be interested in purchasing a utility that has not made a profit in ten years. Mr. Peter Nemeth, Fire Chief of Roseland, read a letter from Mr. Otis Romine, Clay Township Trustee, opposing the purchase of this facility and annexa- tion. Mr. Nemeth said he knew this water system and it was second rate. He said if the City buys it, they will be buying a "pig in a poke ". Mr. Richard Larrison, County Commissioner:, in- dicated that the County had to stop the utility from pumping raw sewage into a field next to a school. He said the County is now being asked.to help the City of Mishawaka correct the de- ficiencies in the system they purchased. Mr. Thomas Pierce, 17663 Hanson Ct., spoke about the low water pressure in Carriage Hills. Mr. Ted Jusczak, a developer in Clay Township, explained the method the eventual consumer goes about to bring service to his home or place of business, and the cost of tying -in to the service. He indicated Clay Utilities has very little invested in the whole system, and it was very small and completely inadequate. He said he was primarily interested in the people of South Bend and Clay Township getting a fair deal. Mr. Kevin Weinberg 527 Summit, spoke in favor of the City purchasing this utility. Mrs. Louvenia Simmons (Cain) indicated she hoped the CouncilWould have an open mind on this purchase, and come up with a posi- tive answer. Mrs. Jane Swan, 2022 Swygart, spoke regarding the annexation of Clay Township and. the fact that no community would willingly come into the city if you tell them your dying. She said if the City intended to buy Clay Utilities, she would suggest the Council and Administration pay heed to the last two sentences of Roger Parent's press release "I believe that common sense and the public interest should prevail in any transaction in which the City participates." Dr. Lillian Stanton, 919 Oak Ridge, said she was a South Bend resident and intended to stay here. Sh( said that in the(past she has supported appropriations that have benefited the community. She indicated that cities should stay within their budget, and that it was about time something was done to reduce the deficit in South Bend. Mr. David Wells, 5104 Bloomfield Way, spoke regarding the sewage system in the county and its relationship to disease. He indicated he was in favor of the purchase of Clay Utilities. 41V REGULAR MEETING MARCH 14, 1977 COMMITTEE OF THE WHOLE MEETING (CONTINUED) Mr. Dan Manion, spoke on behalf of the Clay Concerned Citizens. He said he questioned whether this system could extend beyond a one mile limit from the City, since there is a State statutes - regarding this. He said that State statutes require all extensions and additions be paid by re- venue generated from the rates, and that means that regardless of whether the City buys it or not all extensions and additions are going to come from those funds. He said he did not know why the lease agreement says they can be from other funds, when they cannot. He said the people who are going to be subjected to this lease are the users, and the citizens and taxpayers of South Bend are not going to be paying for this, it is the users. He said the Council should look at the value of purchasing. Clay Utilities, the value to the City and the users. Council Member Szymkowiak spoke in favor of the purchase.of Clay Utilities. He said he wanted to help the residents of Clay Township. Council Member Kopczynski indicated he felt that buying Clay Utilities will be a liability. He indicated that aids in construction was not considered as part of the utilities expense, therefore, he did not see how they could ask for that amount of the system to be entered in the sale. He said the revenue will be committed to pay the bond and the City would be strapped for money to expand the.system. He said this system was not engineered to service the entire area we have proposed to annex. He indicated that in view of all questions that have been raised and statements made, he thought it was a high price. He said he would not vote to jeopardize the residents of South Bend by acquiring Clay Utilities, and subsidizing it. Council Member Taylor indicated he thought the Council should take a second look at this matter. He said he thought tha price of Clay Utilities is too high, and if the deal is lost the deal is lost. Council Member Serge indicated that in caucus he had asked for two appraisals of the system. He indicated he was not pleased with this purchase price. Council President Parent said he could not find where the Clay High School sewer system would be located on this map. Mayor Nemeth indicated that according to the terms of the contract all facilities west of Hickory Road are included. Council President Parent indicated this was not included in the computation of the cost. He indicated this raised a question about the comprehensiveness of the study. Mr. Stravinsl indicated that if that was a private line it would not be included. Council Member Adams indicat( that what the Council was doing tonight would give precedent in the future, since there were no lease purchase agreements in the State, except the one in Mishawaka. She asked Mr. Helling if he had any idea what the Mishawaka system was appraised at. Mr. Helling indicated he did not know, but he could look it up. Council Member Adams asked Mr. McMahon if he could tell them what Clay's cost was for water and return of sewage. Mr. McMahon indicated their rate was equivalent to what any one was paying in South Bend. Mr. Helling indicated that the Mishawaka appraisal was $259,272 for water, $16,000 land, $6,674 franchise, one -half of the meter adjusment $15,341. He said sewage was $400,059 and one -half of the meter adjustment $15,341. He said it was a total of $297,387 for water and $384,718 for sewage. Council Member Adams asked the final negotiated price. Mr. Helling indicated it was $211,000 for sewage and $221,000 for water, a total of $442,000. Council Member Adams asked if that would be a comparable appraisal. Mr. Helling in- dicated it is exactly the same. Council Member Adams commented that Mishawaka paid about two - thirds of the appraised value. Mr. Helling said the appraisal has to be adjusted to reflect de- preciation. Council Member Dombrowski indicated the price was too high for this system. He said he felt the Council was at a standstill on price. Council Member Horvath said that it had been indicated that Clay was at the point of starting to make money and their going to get more custo- mers. He asked someone to tell him how they were going to do this when they could not service what they already have without the City putting in boosters, pumps, etc. Mr. McMahon said that apparently Clay has evaluated what this will do with the system and feel they can live with the problem. Mayor Nemeth said that maybe the system was not as bad as the people here have lead you to believe. Council Member Horvath indicated that the Council should have been in on the negotiations with Clay from the start. He said he thought this was handled wrong. Mayor Nemeth said that the fact is they are going to continue paying the same rate if we buy the system or not Council Member Horvath indicated that if annexation does come to pass they will be paying the same rate as the City, and who will have to pay the upkeep. Council Member Miller asked Miss Cekanski if the proper price was the appraisal price on the replacement cost, minus depreciation. Miss Kathy Cekanski, Council attorney, indicated there are two standards, one whether the lease should be executed, and secondly whether the rentals are fair and just. She said that as far as how those are defined, that is left up to the Council. She said that what this presumes is that the value is set by the Council. She said she thought the key word, used and useful utility, is identical, both as far as setting a rate base and also as far as rental payments. I think it it important for the Council to weigh all facts, since this is a new precedent. Council Membe Miller indicated that what she was saying is that the rental is not applicable tonight, and the issue is what is fair and just rental for the lease. Miss Cekanski indicated this was correct, and that goes to the valuz -.of the property because this is what it is based on. Council President. Parent moved the debate be ended, seconded by Council Member Kopczynski. The motion carried. Council President Parent made a motion that public hearing be continued on this matter until April 12, 1977, meeting of the Council at 7:00 p.m., and refer it to the Committee of the Whole, seconded by Council Member Serge. The motion passed on a roll call vote of seven ayes (Council Members Serge, Taylor, Kopczynski, Adams, Dombrowski, Horvath and Parent) and two nays (Council Members Szymkowiak and Miller). BILL NO. 25 -77 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, APPROVING THE LEASING OF SEWAGE DISPOSAL FACILITIES OF CLAY UTILITIES, INC. Council President Parent made a motion April 12, 1977 at 7:00 p.m., and refer Member Dombrowski. The motion passed Taylor, Kopczynski, Adams, Dombrowski, and Miller) . BILL NO. 26 -77 that public hearing be continued on this matter until it to the Committee of the Whole, seconded by Council on a roll call vote of seven ayes (Council Members Serge, Horvath and Parent) and two nays (Council Members Szymkowii A BILL APPROPRIATING $92,985.00 FROM FUND 30, COMMONLY KNOWN AS THE DEPRECIATION FUND OF THE BUREAU OF WATER, TO LINE 30.0710, COMMONLY DES- CRIBED AS BUILDING STRUCTURES AND IMPROVEMENT, ALL FUNDS BEING WITHIN THE BUREAU OF WATER OF THE CITY OF SOUTH BEND. Council President Parent made a motion that public hearing be continued on this matter until April 12, 1977, at 7:00 p.m., and refer it to the Committee of the Whole, seconded by Council Member Taylor. The motion carried. W6161 REGULAR MEETING MARCH 14, 1977 There being no further business to come before the Committee of the Whole, Council Member Taylor made a motion to rise and report to the Council, and recess, seconded by Council Member Adams. The motion carried. The meeting was recessed at 11:12 p.m. ATTEST: ATTEST: CITY CLERK Z!HAIRMAN REGULAR MEETING RECONVENED Be it remembered that the regular meeting of the Common Council of the City of South Bend re- convened in the Council Chambers at 11:25 p.m., Council President Parent presiding and nine members present. BILLS, SECOND READING ORDINANCE NO. 6125 -77 AN ORDINANCE TRANSFERRING THE SUM OF $150,000.00 BETWEEN VARIOUS ACCOUNTS IN THE CUMULATIVE CAPITAL IMPROVEMENT FUND OF THE CITY OF SOUTH BEND, INDIANA. This ordinance had second reading. Council Member Taylor made a motion to amend the ordinance, as amended in the Commitee of the Whole, seconded by Council Member Dombrowski. The motion carried, with Council Member Miller opposing. Council Member Taylor made a motion to pass the ordinance, as amended, seconded by Council Member Horvath. The motion carried on a roll call vote of nine ayes. ORDINANCE NO. 6126 -77 AN ORDINANCE APPROPRIATING $50,000.00 FROM THE FEDERAL ASSISTANCE GRANT COMMONLY REFERRED TO AS GENERAL REVENUE SHARING, FOR HEALTH SERVICES TO BE ADMINISTERED BY THE CITY OF SOUTH BEND THROUGH THE DEPARTMENT OF HUMAN RESOURCES. This ordinance had second reading. Council Member Serge made a motion to pass the ordinance, seconded by Council Member Dombrowski. The ordinance passed by a roll call vote of nine ayes. ORDINANCE NO. 6127 -77 AN ORDINANCE APPROPRIATING $150,000.00 FROM THE FEDERAL ASSISTANCE GRANT COMMONLY KNOWN AS THE GENERAL REVENUE SHARING FUND FOR CENTURY CENTER CONSTRUCTION, TO BE ADMINISTERED BY THE CITY OF SOUTH BEND THROUGH THE DEPARTMENT OF PUBLIC WORKS. This ordinance had second reading. Council Member Taylor made a motion to amend the ordinance, as amended in the Committee of the Whole, seconded by Council Member Dombrowski. The motion carried, with Council Member Miller opposing. Council Member Taylor made a motion to pass the ordinance, as amended, seconded by Council Member Dombrowski. The ordinance passed by a roll call vote of nine ayes. ORDDNANCE NO. 6128 -77 AN ORDINANCE APPROVING MONEYS FOR THE PURPOSE OF DEFRAYING THE EXPENSES INCURRED UNDER THE FEDERAL GRANT GIVEN TO THE HUMAN RIGHTS COMMISSION FOR THE FISCAL YEAR BEGINNING OCTOBER 1976, AND ENDING JUNE 30, 1977, INCLUDING ALL OUTSTANDING CLAIMS AND OB- LIGATIONS AND FIXING A TIME WHEN THE SAME SHALL TAKE EFFECT. This ordinance had second reading. Council Member Adams made a motion to pass the ordinance, seconded by Council Member Dombrowski. The ordinance passed by a.roll call vote of nine ayes. ORDINANCE NO. 6129 -77 AN ORDINANCE FOR ADDITIONAL APPROPRIATION FROM THE GENERAL PARK FUND IN THE AMOUNT OF $75,000.00 TO ACCOUNT NUMBER 722.0 PROPERTIES, MOTOR EQUIPMENT. This ordinance had second reading. Council Member Serge made a motion to pass this ordinance, seconded by Council Member Szymkowiak. The ordinance passed by a roll call vote of nine ayes. BILL NO. 24 -77 A BILL OF THE COMMON .COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, APPROVING.THE LEASING OF WATERWORKS FACILITIES OF CLAY UTILITIES, INC. Council Member Dombrowski made a motion to refer this bill to the Committee of the Whole, and set it for public hearing and second reading April 12, 1977. The motion carried, with Council Members Szymkowiak and Miller opposing. BILL NO. 25 -77 A BILL OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, INDIANA, APPROVING THE LEASING OF SEWAGE DIS- POSAL FACILITIES OF CLAY UTILITIES, INC. Council Member Dombrowski made a motion to refer this bill to the Committeee of the Whole, and set it for public hearing and second reading April 12, 1977. The motion carried, with Council Members Szymkowiak and Miller opposing. BILL NO. 26 -77 A BILL APPROPRIATING $92,985.00 FROM FUND 30, COMMONLY KNOWN AS THE DEPRECIATION FUND OF THE BUREAU OF WATER, TO LINE 30.0710, COMMONLY DES- CRIBED AS BUILDING STRUCTURES AND IMPROVEMENT, ALL FUNDS BEING WITHIN THE BUREAU OF WATER OF THE CITY OF SOUTH BEND. Council Member Dombrowski made a motion to refer this bill to the Committee of the Whole, and s i d- -Fr,r r,,,hl i n 'h rn,;:1 -r i nn and cr�rrnrnrl raarli nrr Anri 1 1 2 _ 1977- The motion carried. with Council Memb REGULAR MEETING MARCH 14, 1977 REGULAR MEETING RECONVENED (CONTINUED) RESOLUTIONS RESOLUTION A RESOLUTION APPROVING A FIFTH AMENDMENT TO A CONTRACT BETWEEN THE SOUTH BEND CITY WATER WORKS AND SEWAGE DISPOSAL PLANT AND CLAY UTILITIES, INC. FOR FURNISHING OF WATER AND SEWAGE TREATMENT TO THE CLAY TOWNSHIP AREA IN ST. JOSEPH COUNTY, INDIANA. Council Member Horvath made a motion and refer it to the Committee of the carried, with Council Member Miller RESOLUTION NO. 553 -77 to set this resolution for public hearing April 12, 1977, Whole, seconded by Council Member Dombrowski. The motion opposing. A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND AUTHORIZING THE BOARD OF PUBLIC WORKS TO NEGOTIATE THE SALE OF A PRACEL OF LAND A PART OF A CERTAIN 2.81 ACRE TRACT KNOWN AS THE BENOIT MILLOT LOT, ALSO KNOWN AS 711 LA PORTE AVE. W WHEREAS, the Board of Public Works of the City of South Bend, pursuant to the Municipal Code of the City of South Bend, Section 14.5 -2(e) (5), has offered for sale a parcel of land a part of a certain 2.81 acre tract known as the Benoit Millot Lot, in the Northwest quarter of the South- west quarter of Section No. 2, Township No. 37 North, Range No. 2 East, which part is bounded by a line running as follows, Viz: Beginning in the center of LaPorte Avenue, in the City of South Bend, at a stake 36 degrees east 4 chains 9 -1, links from a stake at the intersection of the center line of said Avenue with the West line of said Section No. 2, thence Southwesterly 20 feet to the westerly line of said Avenue; thence on said Westerly line South 36 degrees East 40 feet to the Southeasterly corner of a lot of land conveyed by John H. Davis, single, to Charles H. Fuller, by deed dated October 29, 1890, recorded in Deed Record 84, page 153, of the records of said county, to which reference is had for greater certainty and which Southeasterly corner of said Fuller lot is the beginning point for a survey of the lot herein considered; thence running Southwesterly on the Southerly line of said Fuller lot a distance of 124 feet 6 inches; thence on a line at right angles with said Fuller lot in a Southeasterly direction 50 feet; thence Northeasterly on a line parallel with the Southerly line of said Fuller lot, 117.78 feet to the Westerly line of said LaPorte Avenue; thence North 36 degrees West on the Westerly line of said Avenue, 50.47 feet to the place of beginning, and designated as tax lot "C" in Davis' Addition to the City of South Bend, on file in the office of the County Auditor for taxation purposes, also known as 711 LaPorte Avenue, at an offering price of $995.00, and WHEREAS, the Board of Public Works of the City of South Bend has now received an offer to purchase the property at 711 LaPorte Avenue for a price of $600.00, with the additional commit- ments to reasonably landscape this property and to remove the concrete steps from the property, and WHEREAS, The Board of Public Works has now complied with all requirements of the Municipal Code of the CIty of South Bend, Section 14.5 -2, which establishes procedures for the disposition of real property owned by the City of South Bend, and more specifically real property valued by the Board at less than $1,000. NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of South Bend that: SECTION I. The Board of Public Works be authorized to negotiate a contract for the sale of A part of a certain 2.81 acre tract known as the Benoit Millot Lot, in the Northwest quarter of the Southwest quarter of Section No. 2, Township No. 37 North, Range No. 2 East, which part is bounded by a line running as follows, Viz: Beginning in the center of LaPorte Avenue, in the City of South Bend, at a stake 36 degrees East 4 chains 9 -2 links from a stake at the intersection of the center line of said Avenue with the West line of said Section No. 2, thence Southwesterly 20 feet to the westerly line of said Avenue; thence on said Westerly line South 36 degrees East 40 feet to the Southeasterly corner of a lot of land conveyed by John H. Davis, single, to Charles H. Fuller, by deed dated October 29, 1890, recorded in the Deed Record 84, page 153, of the records of said county, to which reference is had for greater certainly and which South- easterly corner of said Fuller lot is the beginning point for a survey of the lot herein considered; thence running Southwesterly on the Southerly line of said Fuller lot a distance of 124 feet 6 inches; thence on a line at right angles with said Fuller lot in a Southeasterly direction 50 feet; thence Northeasterly on a line parallel with the Southerly line of said Fuller lot, 117.78 feet to the Westerly line of said LaPorte Avenue; thence North 36 degrees West on the Westerly line of said Avenue, 50.47 feet to the place of beginning, and de- signated as Tax Lot "C" in Davis' addition to the City of South Bend, on file in the office of the County Auditor for Taxation purposes, commonly known as 711 LaPorte Avenue, for a total price of $600.00, with a contract to stipulate that the purchaser will reasonably landscape this property and will remove the concrete steps fr the property. SECTION II. This resolution shall be in full force and effect from and after its adoption by the Common Council and approved by the Mayor. /s/ Walter T. Kopczynski Member of the Common Council a REGULAR MEETING MARCH 14, 1977 if REGULAR MEETING RECQDLVENED.(CONTINUED) A public hearing was held at this time on the resolution. Mr. Patrick McMahon Director of Publi Works, said the.appraised value of this property was $995, however, the person interested in purchasing it has counter - offered with $600. He said the Board felt this is a fair offer, in that he will.have to do some demolition and landscapping. Council Member Szymkowiak made a motion to adopt this resolution, seconded by Council.Member.:Taylor. The resolution was adopted on a roll call vote of nine.ayes. RESOLUTION NO. 554 -77 A RESOLUTION OF THE COMMON COUNCIL OF THE CITY OF SOUTH BEND, AUTHORIZING THE MAYOR TO SUBMIT TO THE UNITED STATES GOVERNMENT DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, AN APPLICATION FOR COMMUNITY DEVELOPMENT FUNDS UNDER TITLE .I OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT OF 1974. WHEREAS, the Mayor of the City of South Bend is the Chief Executive Officer of the City, and is the Applicant for Community Development funds under Title I of the Housing and Community Development Act of 1974. NOW, THEREFORE, BE IT RESOLVED, by the Common Council of the City of South Bend, Indiana: SECTION I. That the Mayor of the City of South Bend is hereby authorized to submit an application for Two Million Nine Hundred and Forty - Eight Thousand Dollars ($2,948,000.00) plus Seven Hundred and Eighty -Seven Thousand Five Hundred Dollars ($787,500.00) of reprogrammed un- obligated funds from the 1975 Community Development Program to the United States Government, Department of Housing and Urban Development under Title I of the Housing and Community Develop Act of 1974. SECTION II. That the Common Council of the City of South Bend hereby requests that the Ma submit the 1977 Community Development Block Grant Application to the Common Council for review and comment at least two (2) weeks prior to the date upon which the Community Development Block Grant Application must be filed with the Department of Housing and Urban Development. SECTION III. That for every category established under this resolution, the Mayor shall submit to the Common Council a line item budget in Ordinance form prior to any expenditures of any grant money received _upon approval of this application. SECTION IV. That this Resolution shall be in full force and effect from and after its adoption by the Common Council and approval by the Mayor. /s /Walter T. Kopczynski Member of the Council A public hearing was held at this time on the resolution. Mr. William Gilkey, Director of Human Resources, indicated this resolution only authorizes the City to submit a CDBG application. The resolution does not, in any way, approve proposed activities, funding levels, or target areas. He said the Community Development staff would be available for meetings with the Council or the Human Resources Committee of the Common Council. Council Member Kopcynski made a motion to adopt this resolution, seconded by Council Member Serge. The resolution was adopted by a roll call vote of nine ayes. BILLS, FIRST READING BILL NO. 33 -77 A BILL AMENDING ORDINANCE NO. 4990 -68, AS AMENDED, COMMONLY KNOWN AS THE ZONING ORDINANCE OF THE CITY OF SOUTH BEND, INDIANA (CHAPTER 40, MUNICIPAL CODE) (3628 EDISON). This ordinance had first reading. Council Member Taylor made a motion to refer the ordinance petition to Area Plan, seconded by Council Member Dombrowski. The motion carried. BILL NO. 34 -77 A BILL APPROPRIATING $5,000.00 FROM THE COMMUNITY DEVELOPMENT GRANT FUND, FOR VARIOUS PUBLIC PARK PROGRAMS, TO BE ADMINISTERED BY THE CITY OF SOUTH BEND THROUGH ITS DEPARTMENT OF PUBLIC PARKS. This ordinance had first reading. Council Member Dombrowski made a motion to set this bill for public hearing and second reading March 28, 1977, seconded by Council Member Adams. The motion carried. BILL NO. 35 -77 A BILL AMENDING CHAPTER 14.5 ENTITLED "PROPERTY ", AUTHORIZING THE BOARD OF PUBLIC WORKS TO SELL PROPERTY VALUED AT LESS THAN FOUR THOUSAND DOLLARS (4000) AT A PRIVATE SALE, AND PROVIDING FOR ONE APPRAISAL OF PROPERTIES TO BE SOLD. This bill had first reading. Council Member Dombrowski made a motion to set this bill for public hearing and second reading March 28, 1977, and refer it to the Personnel and Finance Committee, seconded by Council Member Horvath. The motion carried. BILL NO. 36 -77 A BILL APPROPRIATING $45,000.00 FROM THE COMMUNITY DEVELOPMENT FUND, FOR INSTALLATION OF LIGHTS UNDER THE WESTERN AVENUE WALNUT STREET RAILROAD VIADUCT, TO BE ADMINISTERED BY THE CITY OF SOUTH BEND THROUGH ITS DEPARTMENT OF PUBLIC WORKS. This bill had first reading. Council Member Adams made a motion to set this bill for public hearing and second reading March 28, 1977, seconded by Council Member Dombrowski. The motion carried. 1 REGULAR MEETING MARCH 14, 1977 REGULAR MEETING RECONVENED (CONTINUED) BILL NO. 37 -77 A BILL AMENDING ORDINANCE NO. 4990 -68, AS AMENDED, COMMONLY KNOWN AS THE ZONING ORDI- NANCE OF THE CITY OF SOUTH BEND, INDIANA (CHAPTER 21, MUNICIPAL CODE) (4210 LINCOLN WAY WEST) This bill had first reading. Council Member Adams made a motion to refer the bill and petition to Area Plan, seconded by Council Member Dombrowski. The motion carried. NEW BUSINESS Council Member Kopczynski asked that a letter be directed to the Director of Utilities, in order to find out what they have spent to provide services to Clay Utilities, and if the City has re- ceived any reimbursement. There being no further business to:come before the Council, unfinished or new, Council Member Adams made a motion to adjourn, seconded by Council Member Dombrowski. The motion carried and the meeting was adjourned at 11:40 p.m. ATTEST: APPROVED: CIT CLERK PRESI �rtT nnv 74 l: Q77