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HomeMy WebLinkAboutminutes.council.20120904 Special Meeting Aspen City Council September 4, 2012 Mayor Ireland called the meeting to order at 4:00 p.m. with Council members Skadron, Torre, Johnson and Frisch present. Resolution #84,2012 - Ballot question 0.3% sales tax for educational purposes Jim True, city attorney told Council this proposed resolution would submit to the electorate a .3% sales tax increase for educational purposes. This sales tax would be collected by the city then distributed to a fund or other nonprofit entity which would then distribute the funds to the school district through grants. An IGA would be created and the fund that is established between the IGA with the school district and the city would be managed by the seven individuals that will be listed on the ballot. The IGA would have provisions as to how these individuals would be replaced if any resigned or could not serve. The purpose of this sales tax is to support the school district. Mayor Ireland said this resolution provides for a creation of a sales tax within the city limits that would raise up to $1.75 million but that number does not fully compensate the school district for the shortfall created by the state. Dr. Maloy said the school district is short about $2.6 million. Looking ahead in 2013 and 2014 the school district is looking at a deficit of$900,000 and in 2014 and 2015 a deficit of$Imillion. In 2015 and 2016 the deficit drops off to about $600,000. Over the course of the last four years the school district has made reductions to their budget close to $2 million trying to address shortfalls that have occurred over the last few years. Mayor Ireland asked if there is a deficit of$900,000 why are we raising it to collect $1.75 million. Dr. Maloy said the school district is trying to maintain the programs that already in place. The $1.75 million is below the $2.6 million that actually should be coming from the state to fund the school's overall programs. The school district is not asking for $2.6 million but is asking to maintain the current position of the programs and personnel to maintain exemplary schools. Mayor Ireland asked if the money will maintain the current class sizes. Dr. Maloy said yes. Ireland asked if it would enable an increase in teacher's pay. Dr.Maloy said that will need to be discussed. The school district will be able to maintain current expenditures; the school district just provided a 2% increase for all staff over a two year period. Staff will be taking a furlough over this year as part of that compensation in order to meet overall budget requirement over the next two years and to provide adequate compensation for staff who have not had a pay increase over the last two years. Mayor Ireland said what happens if this fails. Dr. Maloy said if it fails the school district will look at any means to raise additional revenue, and the school district has been unable to do that the past two years. The school district will have to go back and look at how to reduce overall costs in order to meet the $900,000 short fall. 85% of the district's overall costs are tied up in personnel and the district will have to look at reducing personnel and reducing programs. Councilman Johnson said the ballot language indicates an expansion to a seven member board which the majority felt that would be the right thing to do. All these people are excited and looking forward to do it. They would be the functioning body through the term of 2016. Councilman Torre asked how the selection of seven happened. Robin Hamill, representing the education foundation, said since there is a sunset provision, it was decided that an appointed board with high integrity and knowledge about education and who were willing to serve was a better way to go. The district increased the number of members from five to seven. A list of 15 to 20 candidates for the board was put together and the district went to the top seven on the list. Regarding a city representation, it was the intention to avoid any perceived conflict so to eliminate any potential conflict. Major Ireland said requests are made to the city and then allocations are made to that board. Hamill said the tax is remitted from the city to the established entity and the 7 member panel will evaluate grant requests that the school district makes of that entity. True said the IGA will address the over sight that council has. Councilman Skadron asked if there should be a provision that recognizes the ability of the state to address school funding should it happen prior to the sunset provision. True said Council is asking if the state changes its system totally, which is possible, should this be terminated by the state's action. True said are two aspects to the question, could there be and should there be. There could be some language to allow this tax to terminate earlier based on some change in state legislation. Mayor Ireland said this does not need to be in the IGA because The Council has to appropriate and obligate. The city is not a pass through entity. Councilman Johnson said if the city puts this on the ballot and it passes and the state looks at Aspen and says they are carrying their own and the state would actually give Aspen less because we have our own funding. Councilman Frisch said he would have liked this to be a county ballot issue. Councilman Frisch stated it is advantageous to have a strong school system and Aspen has a wonderful school system. Councilman Frisch said he appreciates the city's ability to check back in if this is not run properly. Councilman Torre asked about the trust or other non-profit entity created by the intergovernmental agreement and what is the structure going to be. True said that is not known at this point but staff has been following the Steamboat model that is using a trust type organization. It is broadly written but at this point it is not known exactly what it will look like. Mayor Ireland moved to approve Resolution#84, Series of 2012, as presented; second by Councilman Johnson. All in favor, motion carried. Resolution 983, 2012—Ballot advisory question on the Castle Creek Hydroelectric facility Jim True, city attorney, said reminded Council this was discussed at a work session on August 28th and this is the language that Council considered at that time. This resolution reflects the results of the work session. Mayor Ireland asked David Hornbacher how much coal is consumed in pounds per year that could be avoided with this hydropower project. David Hornbacher, utilities department, estimated a little over 5 million pounds/per year. Mayor Ireland asked why the city doesn't just buy solar or wind. Hornbacher said both wind and solar have challenges; they can't provide for some of the base loads. The city has maximized what we can buy from the wind portfolio without having an excess, which would have to be sold back. Mayor Ireland asked what the cost of producing this hydropower will be. Hornbacher said over the long term, since the energy center is an ownership model, after the bonds are paid off, the cost drops dramatically so that it would be significantly less than the projected cost of continuing the current course of burning coal. Mayor Ireland asked what would it drop from and what would it get to. Hornbacher said it drops nearly to half of what the initial costs are and the cost savings is significant over the course of the plant operations. It is millions and millions of dollars that remain in the community. Mayor Ireland said hydropower is cheaper than coal and cheaper that solar and wind. Mayor Ireland said he read that Boreal toads are showing up. Is the city involved as to whether the toads are in either stream. .Hornbacher said during the month of August the city conducted two surveys for four days on two different weeks and that report should be completed within the next several weeks. Boreal toads were not found during those observations. Councilman Frisch asked where we are in the FERC process. Hornbacher answered in the first preliminary phase. The city presented information and met with individuals and is trying to address some of the issues that were brought up and formally get back to them. The next step would be a formal process where the city states what type of studies have been done and what additional studies we may offer. This is still under the amount budgeted. After the formal process, FERC will get return and tell the city whether they agree or disagree with what the city is recommending. Councilman Frisch asked what happens if this doesn't pass in November. Hornbacher said staff would contact FERC and would suspend or withdraw the application and close that portion of the work. Councilman Frisch asked the rough estimate to completion. David said $10.5 million. Councilman Johnson asked what has been spent to date. Hornbacher said $6.9 million, which is a combination of expenditures. Councilman Johnson said if this project doesn't go forward, what is the return of the investment on the money. Steve Barwick, city manager, noted some of the expenditures were dual purpose. The city has installed the vast majority of the emergency drain line and still has to put in the tail race. The only recoverable piece would be to sell the turbine generator. Hornbacher said $750,000 is budgeted for the tail race. If the Castle Creek Energy system does not go forward, the emergency drain line would be finished to get to the stream. Barwick said the piece that would not be spent is around $2.8 million. - - - - - - - - Mayor Ireland said the opportunity here is to replace coal fired power and nuclear power that the city has to have because wind or solar power cannot be relied on. This power does not have a transmission cost. This hydropower source enables the city to be free from the grid in an emergency. In 1962 this community had power and heat during the cold fall because Aspen was not dependent on the grid. This power is cheaper than coal, solar or wind. This project would bring Aspen closer to being the first community totally renewable in its utilities. Mayor Ireland moved to approve Resolution#83, Series of 2012, as presented; second by Councilman Johnson. All in favor, motion carried. Resolution #85,2012—_Ballot question Source Gas Franchise Agreement Mayor Ireland explained that Aspen's home rule charter requires franchise agreements to be approved by public vote. This is asking to approve a 20 year service contract. Jim True, city attorney, said the ordinance will be presented to Council at a later date. True told Council staff has had significant negotiations with SourceGas to get to an appropriate franchise agreement. Helen Klanderud asked what happens if the franchise agreement fails. True said the city can take over the service. Aspen is one of the few communities in the state that is required to have voter approval for franchise agreements. The Charter doesn't state what happens if it fails. Mayor Ireland moved to approve Resolution#85, Series of 2012, as presented; second by Councilman Torre. All in favor, motion carried. Councilman Torre moved to adjourn at 4:35 PM; seconded by Councilman Johnson. All in favor, motion carried. ' Ce K yn Koch City Clerk