HomeMy WebLinkAboutCouncil Workshop Minutes 07.28.2009MINUTES
COUNCIL WORKSHOP
JULY 28, 2009 6:30 P.M.
COUNCIL CHAMBERS
A Council Workshop was held in the Council Chambers and called to order by Mayor Ken Olson at
6:30 p.m. on July 28, 2009.
COUNCIL MEMBERS PRESENT:
x Emelie Eaton
_x Kate Hart
_x Chuck Rodgers
Alex Wilkins
_ Doug Poehls
x Mark Mace
Chuck Dickerson
_x Norm Stamper
OTHERS PRESENT:
Sam Painter
Mary Embleton
Bill Sheridan
Kurt Markegard
James Caniglia
Derek Yeager
Shirley McDermott
Patrick Murtagh
Public Input (three-minute limit):
Citizens may address the Council regarding any item of City business not on the agenda. The duration for an individual
speaking under Public Input is limited to three minutes. While all comments are welcome, the Council will not take action
on any item not on the agenda.
There was no public input.
Laurel Urban Renewal Agency Presentation
Shirley McDermott, 508 Roundhouse Drive, is the chairman of the Laurel Urban Renewal Agency.
At the Rock the Block events, LURA members have asked people to fill out a survey. A couple
hundred surveys have been filled out in an attempt to find out what kind of improvements people
want to see in downtown Laurel. It has been difficult to obtain an accurate list of the property
owners, and Shirley and Linda Frickel will prepare a final list on Thursday. Mayor Olson wrote a
letter that will be sent with the survey to the downtown property owners. LURA will follow up with
as many interviews as possible. Shirley has asked Mayor Olson to talk to the railroad. LURA has
some projects they might try to pursue. One is the facade improvement and another is landscaping on
the south side of Main Street. Shirley stated that a grain elevator trash can has been placed in front of
the Owl Cafe, and they would like to place eight of them on Main Street. They want to use fiberglass
locomotives as planters. LURA is working with the Laurel Alive organization for that.
Shirley stated that LURA approved one project, which is to recommend to the Mayor and City
Council a commitment of up to $70,000 Tax Increment Funds (TIF) over a two-year period for the
water and sewer project on Main Street so city services can be installed across Main Street. They
hope that will help with redevelopment and development in that area, knowing that approval is needed
from MRL. However, LURA expects Mayor Olson and Bill Sheridan to talk to MRL.
Shirley thanked BSEDA, Steve Zeier, James Caniglia, and Bill Sheridan for their help.
Council Workshop Minutes of July 28, 2009
There was discussion regarding the surveys, responses from out-of-town people, sending surveys to
residents, property owners, and business owners in the downtown area, and the need for a viable
downtown area where people live and work.
Mayor Olson stated that LURA wants to promote expansion of services for downtown to allow the
infrastructure to meet the future demands of growth. He thanked Shirley for her work.
Shirley stated that the motion was clarified at yesterday's meeting. Shirley gave Mayor Olson a copy
of the motion, which stated: "The Laurel Urban Renewal Agency recommends to the Mayor and City
Council a commitment of up to $70,000 Tax Increment Funds (TIF) over a two year period (until FY
2010/2011) for a sewer/water installation to the Southside of Main Street."
Fire Department:
• Resolutions - Fire District Contracts
Fire Chief Yeager stated that one resolution is for fire protection with Rural Fire District No. 7 for
three years ending in 2012. Rural Fire District No. 7 is the largest fire district and incurs the majority
of the rural fire calls.
The second resolution is for the annual agreement with Yellowstone County for wildland fire
protection. The agreement covers all of the wildland acres associated with the Laurel Urban Fire
Service Area and the new area that used to be the Duck Creek Fire Department's responsibility.
If anything transpires regarding a new fire hall, the agreements include language to renegotiate upon a
change in terms. All of the fire district boards Derek met with have agreed that, should that become
necessary, they would be open for discussion.
Clerk/Treasurer:
• Resolution - DNRC Grant for Water System Improvements
Mary Embleton distributed information to the council. The DNRC grant contract for the water system
improvements is one of the final pieces for the water project in totality. The early improvements to
the Water Plant were Phase 1 and were supported by loan dollars and city contribution. The city had
taken out an SRF loan for $690,000 and has drawn down all the loan money. Phase 2 is going to
utilize the $100,000 DNRC Grant and the $625,000 TSEP Grant that was approved last week. The
SRF loan will be the final piece. This is a formality because the city has already agreed to go forward
with this and the bids are out for Phase 2 of the water project.
Mary spoke regarding two letters she distributed. The first one is the letter of approval for the loan in
lieu of a formal commitment agreement. DNRC also handles the SRF loan and states that they are
willing to loan the city $1,253,000 for this project for a 20-year term. They will give the hardship rate
at 2.75 percent for the first $500,000 and 3.75 percent for the balance of $700,000. The budget on the
back of the sheet provides a one-page summary of where the monies will come from and how they
will be used for the second phase of the project. There is SRF loan money of $1,253,000, the city will
provide about $250,000, the TSEP Grant is for $625,000, and the DNRC Grant is for $100,000. The
funding sources are coming together.
One piece of good news received recently was formalized in the second letter Mary distributed.
Before the Department of Natural Resources could issue the letter of approval, they had to evaluate to
see if the city met the requirements for the loan and if the rates and charges were in place. The letter
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Council Workshop Minutes of July 28, 2009
states that the requirements have been met. With the future to consider, the city is already positioning
itself for water rate increases, not only to keep the Water Fund healthy through all the projects, but in
going into the future where more major work needs to be done. This was good news to the engineers,
because we are going ahead and bidding the project.
Mayor Olson asked Patrick Murtagh to present a brief update on the project and information on rates
and EDU's.
Patrick Murtagh, Great West Engineering, distributed copies of his PowerPoint presentation, and a
copy is attached to these minutes. He stated that it was good news on the loan.
Pat stated that Harry Whalen, of Montana Rural Water, carne to Laurel to help figure out what the
rates should be. Harry is recognized throughout the State by funding agencies and towns as being the
expert on determining fair rates.
Pat gave an overview of EDU's. The Department of Commerce decided that, in order to be eligible
for grant funding, Laurel should be at a certain minimum rate, which is the target rate at 2.3 percent of
the median household income. For Laurel, that is about $62.63 per month for water and sewer. To
figure out if the average person is paying $62.63 a month, they look at Equivalent Dwelling Units, or
EDU's. Currently, each residence pays about $35 per month for 6,000 gallons of water, although an
average household probably uses about 8,000 gallons. Sewer averages about $46.00 per month, and
combined is $81.00. Laurel is at 130 percent of the target rate. When a city is at 125 percent, it is
allowed to go for an extra $125,000 for the TSEP Grant, which was done. If the city went up to 150
percent of the target rate, it could apply for up to $750,000.
Pat explained EDU's and compared a 2-inch pipe and a 1-inch pipe. The 2-inch pipe will carry a lot
more water through it. He explained the formula and stated that the area is proportional to the square
of the diameter. The area is also proportional to how much water can go through the pipe. With a 3/ -
inch line at 10 gallons a minute, there is a certain amount of pressure loss through the pipe. The
available flow increases as the diameter of a pipe goes up. A 3/-inch service line is 0.44 square inches
and a 11/2-inch line is 1.76 square inches. A 3/-inch service line is the starting point for EDU's, as that
is what most residences use. Taking 1.76 square inches divided by .44 square inches comes out to
exactly 4. From the chart distributed, with a 11/2-inch line, more than four times as much water could
go through the pipe. People who might someday use a lot of water have more EDU's and have a
larger service line. Pat emphasized that, when changes are made at the water plant, it will be designed
for the peak day when people use a lot of water for the bigger lines on a peak day. It is a very fair
way of evaluating how much water someone can potentially use.
Someone that has a 2-inch line feeding their house might only use 2,000 gallons, but they will have to
pay more than the person with the '/-inch line using 2,000 gallons. The reason is that they might
someday decide to open that line wide open and get a huge amount of flow through the pipe. They
pay extra for the potential to draw the water when they need it. Pat does not recommend charging for
fire lines.
Pat further reviewed the rate structure figured by Harry Whalen. The city's debt payments and loans
were included and he looks at the amount of money the loan agencies require the city to have in
restricted reserves to cover the debt. Harry also added depreciation, and a partial amount of operation
and maintenance. There is a theory that enough of a base rate should be charged in order to survive if
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Council Workshop Minutes of July 28, 2009
sales plummeted for some reason. The total cost per year that the city should collect is $1,139,752.
There are 3,362 Equivalent Dwelling Units, with about 2,500 3/-inch lines and one 10-inch line that is
177 EDU's. Pat stated that the base rate, which is currently $24.22, should be $28.25.
After figuring the base rate, Harry reviews the remaining O&M and looks at the gallons sold to figure
out how much is needed to get to the right income. Pat stated that the actual total sales with the
existing rate structure, including irrigation and raw water, is about $2.2 million.
Pat explained the differences between the current and projected rate structures. Currently, the base
rate is not based on a certain multiplier times a certain number of EDU right now. It goes up for
larger services, but it does not go up proportionally to the EDU. Pat explained the recommended
method to the council. The base rate would be $24.22, and the number of EDU's in a connection
would be multiplied by $24.22. A 10-inch line that is 177.78 EDU's will increase from $1,453.49 to
$4,305.83 per month just for the base rate. A 10-inch line actually holds about 300 times as much
water as a 3/4-inch line. A 3-inch user would increase from $181.69 to $387.52. No changes have
been proposed for the residential rates. Although this does not raise as much money as originally
hoped, the 2009 finances turned out better than anticipated when writing the grants. With the new
rate structure, there would bean additional $121,000 per year. Pat stated that the city would also have
a rate structure that is a defendable rate system based on EDU's. Base collections right now are
$860,493, water sales are $1,351,508, and actual collection totals $2,212,000. With the projected
collections, it is assumed that the water use sales would be the same at $1,351,508, but the base
collections would increase by $121,000 per year.
In summary, Pat stated that there would be no residential user rate increase, the state accepted system
was followed, the simple system is easy to explain to the public, and funding agencies prefer this rate
system.
Mayor Olson stated appreciation for Pat Murtagh's presentation.
Public Works D artment:
• Alder Avenue / Fir Avenue Project with Yellowstone County
Kurt Markegard stated that work is being done on the Alder Avenue project to provide a better road
condition. Great West Engineering has done surveying. The road work will be done with anticipated
millings from the East Main project. After the road is repaved with the millings, it will be chip
sealed. The County would like to use some of the anticipated millings to pave Fir Avenue. There has
been discussion regarding the possibility that the county will provide equipment and manpower to do
the work on Alder and Fir Avenues. Fir Avenue runs along Ponderosa Park by the soccer field. Fir
Avenue is one route for citizens to go to the county from inside the city limits, and the county has
been asked to pave that street, which adjoins city property and a city park. The city plans to use some
of the millings to pave the parking lot at Ponderosa Park. The city and the county will discuss how to
accomplish this task.
Norm Stamper asked if the School District and Iron Horse Station Subdivision have any financial
responsibility for Alder Avenue.
Mayor Olson stated that staff would look into that and report back.
Chief Administrative Officer:
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Council Workshop Minutes of July 28, 2009
Construction of sound barrier wall by Elena Subdivision
Bill Sheridan stated that he reviewed the minutes of the last meeting. He stated that the council
wanted him to contact the county taxpayers adjacent to the Elena Subdivision to ask if and why they
wanted the sound barrier and what it would provide them. Bill looked into the costs for a concrete
wall. He could also ask the residents what other kind of barrier or wall could be built. He stated that
the construction of the walls is generally the same, and his intent was to ensure that the wall would
not be damaged and would last. Bill and Sam discussed the issue today, and Sam has some advice
regarding this issue.
Sam Painter stated that he and Bill reviewed the minutes to determine the best avenue to proceed.
With the city clerk's comments that there are not available funds to build the $35,000 fence, his
advice to Bill was to ask the city council's permission to proceed against the developer and file a
lawsuit. He does not know what the developer owns, but if the process does not start, the city will
never know. He advised Bill not to poll the county neighbors at this time, as the city knows they want
the sound barrier wall. More importantly, the city needs to enforce the Subdivision Improvement
Agreement against the developer. Otherwise, the city will have future issues with other developers
who think they can get away with not paying for what they agree to pay. Sam's recommendation to
Bill and Mayor Olson was that the best avenue at this point is not to expend city funds doing the
developer's job. Other issues that the Public Works Department has determined still need to be
completed by the developer could be added to what the developer owes the city.
Mayor Olson stated that this is the time to ensure that Subdivision Improvement Agreements are
binding and completed. He believes that Laurel will see another round of growth.
There was discussion regarding the next step. A motion will be added to the August 4t' council
agenda for the council's consideration.
Executive Review:
• First Avenue - striping or signage
Mayor Olson stated that the majority of the striping on First Avenue is in place. The resident's
question regarding passing a left-turning vehicle was discussed at today's department head meeting.
Sergeant Guy stated that a vehicle can pass a left-turning vehicle on the right if there is pavement to
drive on. Striping on First Avenue has been the city's obligation and is usually done right before
school starts in the August.
• Letter from UPS
Mayor Olson stated that the letter was hand delivered by a UPS representative. The letter explains
some legislation for which UPS is seeking support. Mayor Olson stated that it is for the council's
consideration.
Kate stated that this is not an issue the city should address. Emelie stated that UPS is looking for
individual letters, which the council members could do separately.
• Decay Ordinance
Mayor Olson spoke regarding an anonymous letter about Cascade County cracking down on junk. He
stated that the city's decay ordinance was enacted once in the 400 block of 4t` Avenue and it worked
well.
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Council Workshop Minutes of July 28, 2009
• Council Issues:
o Update on the Asphalt Plant (Emelie Eaton / Doug Poehls)
Kurt Markegard stated that Gary Colley has been working with MRL regarding the Asphalt Plant.
Issues include the weeds, the insulation around the tanks coming off and landing in the street right-of-
way, and the hazardous structure. Gary contacted Joe Gentry of MRL, who stated that MRL was
having difficulty finding contractors that would give a fair and equitable bid because they did not
know if there was asphalt in the tanks. MRL recently found some contractors to bid on the project.
MRL is waiting to write the check to the successful bidder, and Joe Gentry will give a final update by
the end of the week regarding the successful contractor and when demolition will begin.
There was discussion regarding whether a demolition permit had previously been issued. Kurt stated
that a letter of intent to cite MRL for a dangerous building had been written several months ago, but a
demolition permit has not yet been issued. The successful contractor will need to apply for a one-year
demolition permit.
o Removal of dirt pile in Nutting Park (Norm Stamper)
Kurt stated that, during the excavation of the playground, a large amount of dirt was deposited in the
old playground area. The volunteers planned to use the dirt as fill material for the old playground and
remove the pea gravel, level it out, and reseed it. Kurt will contact Greg Burke, who coordinated the
project, to get that completed and find out if the dirt could be hauled away. Kurt plans to have that
done before school starts in August.
o Electrical issues in the council chambers (Emelie Eaton)
Bill stated that the electrical issues in the council chambers and the building need to be addressed. He
explained the possibility of relocating the county motor vehicle office to the room off the council
chambers. Doing so would alleviate congestion in the court and the current motor vehicle office. If
the office is moved, the electrical and security issues would need to be addressed. Concerns regarding
ADA accessibility and access to the restroom would also need to be reviewed. There will be
discussion with the County Commissioners regarding this proposal.
• Trees in boulevards (Chuck Dickerson)
Chuck Dickerson stated that people have to duck underneath some trees that are overhanging the
sidewalk at the Town Square. There are trees in the boulevards in town that look like bushes and not
trees. He asked who is responsible to maintain the beautification projects in the city.
Mayor Olson stated that the issue would be under discussion next Tuesday and staff will work on an
answer.
Mayor Olson spoke regarding the Heritage Days Celebration on August 22°d, which is a result of last
year's 100-Year Celebration. Mayor Olson asked the council to help serve at the free BBQ at
Riverside Park. The community will be invited to the event, which will honor the 100-year birthday
of the Laurel Volunteer Fire Department.
Other items
There were none.
Review of draft council agenda for August 4, 2009
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Council Workshop Minutes of July 28, 2009
• Public Hearing - Ordinance No. 009-09: Ordinance to amend the official zoning map of the
City of Laurel, Montana, to change the zoning designation of a parcel of property located in
Yellowstone County from Residential Manufactured Home to Light Industrial Zoning. (First
reading -- 07/21/2009)
James Caniglia stated that CHS Refinery applied to rezone a parcel that is located south of the
interstate and south of South School from Residential Manufactured Homes to Light Industrial. CHS
originally requested Heavy Industrial but decided to proceed with Light Industrial instead to ease the
opposing neighbor's concerns. The main concerns voiced to the Planning Board were traffic issues.
There will be four new buildings there and traffic will be all going to South 8th to exit. Presumably,
the large majority of them will go over the overpass heading north. The idea for them in this scenario
is to take Railroad Street to First Avenue. However, the Planning Board and residents are concerned
that they will want to avoid using a bumpy road like Railroad and will instead drive through the
neighborhood in front of South School. That would cause more traffic concerns there. First Avenue
is already congested at the intersection with Railroad Street. James stated that those were the major
concerns of the Planning Board and some of the residents.
Emelie stated that the Planning Board wanted to pass the recommendation to the council with all of
the concerns.
James stated that was correct, and the Planning Board voted 5-2 to do so. Prior to the vote of the
Planning Board, the refinery said that they would probably build directly to the east where they have
the zoning if this zone change was not approved. That brought the public hearing closer to an end at
that point.
Emelie asked James to expand on the notice of public hearing regarding another matter that will be
addressed at the next Planning Board meeting.
James stated that Cenex needs a zone change for three lots, but the original application did not include
two of the lots. They are returning to the Planning Board for the other two lots. All of the land Cenex
owns there is empty and they want to have it rezoned to Light Industrial.
Mayor Olson stated that the large parcel was zoned Residential Manufactured Home. The other two
parcels are also zoned Residential Manufactured Home. CHS wants to zone those two parcels as
Light Industrial, which would make for uniform zoning on all the property in that area.
Mark Mace stated an issue that is strongly related to every problem discussed regarding the south side
of Laurel. He hopes the council will look at the possibility of an overpass across West Railroad,
which he thinks would solve a lot of Laurel's problems.
There was discussion regarding the proposed MDT overpass project, the possible delays, and the
ongoing needs and concerns for emergency services.
Chuck Dickerson made the following statement:
"I don't really agree with the way that this was passed on to the city council by the Planning
Board. I think if these considerations were that strongly felt and so forth, instead of being
passed on as an agreement, but for the city council to take these under observation, I think
they should have been taken under observation by the Planning Board and then a definite yes
7
Council Workshop Minutes of July 28, 2009
or no been made on the situation and then it come to the council for us either to approve or not
to approve it. I think that's the position that the Planning Board should have taken and so
forth and I just don't agree with the way it was passed on to the city council to have to end up
making that ... listen to the considerations that may be taking place when they should have
been done at the body that is in charge of that to begin with. I just wanted to go on record in
stating that."
Chuck Rodgers stated that, with the traffic situation, they will hit 8 h Avenue and then go down 5t', or
most of them will try to go down 4'i' to get to the light. A few will go up to Railroad Street and cross
5'h and over onto Main. He stated that, at one time, the city had discussions with Burlington Northern
about an overpass on South 8t' and they were not willing to participate.
Mayor Olson stated that one of the most disappointing pieces of news he received in the last several
years came on the tail of encouraging news that the west end interchange was coming forward.
Originally it was going to be a full blown interchange. Now it is going to be in two phases. The first
phase will be a full-blown interchange, except for going across to the south side. It would be built but
not completed and that would be a phase two consideration. He thinks it is important to recognize
that ARRA funding is available, and the council should come forward with an action and go forward
either to MDT or the Federal government to say that they are shortchanging the whole idea and why
the interchange is needed. Mayor Olson stated that the health and safety of the community will not be
met by a 3/ interchange. A full-blown interchange is needed. He stated that, if there is not a revenue
return, then oftentimes big business is not interested in some of the city's issues.
Attendance at the Au t 4 2009 council meeting
Norm will not attend the meeting.
Announcements
Chuck Dickerson stated that last Wednesday's tree dedication for Gay Easton at Murray Park was an
enjoyable and enlightening event. He mentioned that Emelie and the Conservation District planted
several rose bushes and some flowers in an area on the south side of the footbridge.
Mayor Olson stated that the Laurel Senior All-Stars played Butte and won for the right to represent
the Northwest Region in the national baseball tournament in California. The team will leave on
Saturday at noon to represent this area. There was discussion regarding fundraising events to help the
team and the need for the Laurel to support the team. Mayor Olson will attend the farewell for the
team on Saturday, and he invited the council members to attend.
Mayor Olson stated that the Laurel Dodgers took first place in the baseball tournament in Billings and
they are vying for first place in their bracket.
Norm stated that there was a huge crowd at the baseball game on Friday night, and it is exciting
anytime Laurel can be number one.
Chuck Rodgers recently won a landscaping boulder which weighs about 1,200 to 1,800 pounds. He
has no place to put it and would like to donate it to the city for a park.
Emelie Eaton stated that one of the advantages of having an overworked Public Works Director is that
individuals can help when something needs improvement. That is what happened at that dedication
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Council Workshop Minutes of July 28, 2009
site by the walking bridge. The plaque was overgrown with weeds and grass. With help from the
Yellowstone Conservation District, a rose garden was planted and will be expanded in the future.
The council workshop adjourned at 8:06 p.m.
Respectfully submitted,
Cindy Allen
Council Secretary
NOTE: This meeting is open to the public. This meeting is for information and discussion of
the Council for the listed workshop agenda items.
9
DEPARTMENT OF NATURAL RESOURCES
AND CONSERVATION
BRIAN SCHWEITZER, GOVERNOR 1625 ELEVENTH AVENUE
- STATE OF MONTANA
DIRECTOR'S OFFICE (406) 444-2074
TELEFAX NUMBER (406) 444-2684
PO BOX 201601
HELENA, MONTANA 39620-1601
LETTER OFAPPROVAL FOR DRINKING WATER REVOLVING Fuss LoANPROGRAA1INLIEU OF
COMMITAIENT AGREEYIENT
July 20, 2009
City of Laurel
Dear Mary Embleton:
R D
J U L 2 2009
CITY Cr LA'!f? cL
The State of Montana, through its Drinking Water State Revolving Fund Program, has been
approved by the Environmental Protection Agency (the EPA) to make loans for drinking water projects.
The purpose of this letter is to formally apprise you that the State had approved a loan to the city
in the amount of $1,253,000 which loan will be represented and secured by a Revenue Bond in the
amount of $1,253,000 payable over a term of 20 years at an interest rate of up to 2.75% per annum for
500,000 and 3.75% for the balance of the loan..
The Bonds shall be issued pursuant to a Bond Resolution adopted by the city in substantially the
form of the Bond Resolution used by the city's Bond Counsel in previous revolving fund loans, subject to
appropriate references and changes for any currently outstanding Bonds.
The city has notified DNRC of its desired closing date, on or before October 30, 2009, on the
loan and DNRC will work with the city and its Bond Counsel to have the loan properly closed.
Please do not hesitate to call if there are any questions or comments.
Very Truly ours,
iller
Financial Advisor
Conservation and Resource Development Bureau
cc: Mark Smith -- DEQ w/
Laurel IV-A $500,000 WRF file w,1
Janice Yearry - DNRC w/o
Laurel IV-B $753,000 WRF w/
A M:jy
CENTRALIZED SERVICES CONSERVATION & RESOURCE
DIVISION DIVISION
(406) 444-2074 (406)444.6667
Gary Wiens - DEQ w/
Debbie Kuykendall - US Bank w/
Dan Semmens - D& W w/
RESERVED WATER RIGHTS OIL & GAS TRUST LAND MANAGEMENT
COMPACT COMMISSION DIVISION DIVISION
(406) 444-6841 (406)444.6675 (406) 444-2074
4RD'SRF- WRF Loans'WRF-Approval LarApproval Ur Laurel Ph H..doc
CHMEI?IT B -- BUDGET FORM FOR MONTANA PUBLIC FACILITY PROJECTS DATE: JULY 2.2009 )
NISTRA*JON: SOURCE: SOURCE: SOURCE: SOURCE: SOURCE: TOTAL
SRF CITY TSEP DNRC
SONNEL COSTS
r $1,000.00 $500.00 $1,500.08
r•
COSTS
2.OFFICE
$500.00
$500.00
FESSIONAL SERVICES $13,885.45 $25,441.00 $39,326.45
4. LEGAL COSTS' $250.00 $750.00 $1,000.00
5. AUDIT FEES $1,500.00 $2,000.80 $3,500.00
16. TRAVEL & TRAINING $1,630.00 $1,630.00
7. LOAN ORIGI I TION FEES
8. LOAN RESERViES $83,850.00 $83,850.00
9. INTERIM INTEREST
I0. BOND COUNSEL SEL AND RELATED COSTS $5,919.00 $5,919.00
11. TOTAL ADMINISTRATION $104,904.45 $30,321.00 $2,000.00 $137,225.45
CONSTRUCTION RELATED ACTIVITIES:
12. GRANT WRITING $8,000.00 $8,000.00
13. PRELIMINARY ENGINEERING $22,000.00 $22,000.00
14. LEAK DETECTION $25,000.00 $25,000.08
15. LAND ACQUISITION
I
:
16. ENGINEERINGI ARCHITECTUftAL DESIGN
$112,640.50
$112,640.50
17. CONSTRUCTION ENGINEERING SERVICES $20.824.19 $50.000.00 $70,824.19
18. CONSTRUCTION $726,614.36 $127,853.15 $540,000.00 $100,000.00 $1,494,467.51
19. CONTINGENCY
it $421,822.19 $33,008.00 $454,822.19
20. TOTAL ACT ViTY $1,148,436.55 $316,317.84 $623,000.00 $ 100,000.00 $2,187,754.3
21. TOTAL PROJECT BUDGET $1,253,341.00 $346,638.84 $625,000.00 $100,000.00 $2,324,979.84
City of Laurel 2008/09 Water System Improvements - Phase 2
DEPARTMENT OF NATURAL RESOURCES
AND CONSERVATION
BRIAN SCHHWEITZER, C:OVERNOR
1625 ELEVEN H AVENUE
-?-- STATE OF MONTANA
DIRECTOR'S OFFICE (406) 444-2074
TELEFAX NUMBER (406) 444-2684 PO SOX 201601
HELENA, MONTANA 59620-1601
MEMORANDUM
To: Mary Embleton
City of Laurel
From: Anna Miller
Department of Natural Re
Subject: Laurel WRF Loan $1,200,
Date: July 14, 2009
1 171
- ?J
CITY OF n LA1,1?P,.EL
I have reviewed the FY 2009 financial information of the City's water system. The water fees
will be pledged to the debt of the water system. I have estimated closing dates just to see if
coverage is made. There are five loans outstanding. The City is looking at borrowing funds for a
total of $1,200,000.
Coverage Calculation
The average highest years debt service is $785,910 in fiscal year 2015.
Coverage is $785,910 x 125% = $982,388.
Current User Rate for FY 2009 Actual
Water System Revenue Actual FY 2009
Water System Expenses Actual FY 2009
Total Net Revenues
Net Revenues $ 1,064,536
Coverage Needed < gg2 388
Coverage is made by $ 82,148
CENTRALIZED SERVICES CONSERVATION & RESOURCE
DIVISION DIVISION
(406) 444-2074 (406) 444-6667
$ 2,164,838
11.100 302$ 1,064,536
RESERVED WATER RIGHTS OIL do GAS TRUST LAND MANAGEMENT
COMPACT COMMISSION DIVISION DIVISION
(406) 444-6841 (406) 444-6675 (406)444-2074
Note the payment schedule for the loan is $1,200,000. The coverage for the loan is in place. I
have attached the 2009 revenues and expenses for Laurel. There is a copy of the estimated
payment schedule. I will adjust the dates on the payment schedules once we have the bid in and
know the closing date.
Please call if you have questions. My number is 406-444-6689.
Cc: Gary Wiens - DEQ w/
Dan Semmens - Dorsey & Whitney w/
Pat Murtagh - Great West w/
Bill Sheridan - City w/
Laurel $1,200,000 WRF file w/
Janice Yearry - DNRC w/o
AM.JY
City of Laurel
MONTANA
General Discussion on
Water Rates and EDU's
July 28, 2009
Presentation
by:
Great West Engineering, Inc.
4Wes
engineering
Target Rate
• Based on Median Household Income (MHI)
• MHI Data from Department of Commerce
• MHI = $32,679 for Laurel
• Target Rate for combined water and sewer =
2.3% of MHI
2.3% x $32,679 = $751.62/year
Or, $62.63 /month
1
Impact of Target Rate
To apply for grants /low interest loans
Must be at 100% of target rate
Laurel = $62.63 /month
N Grant ranking
Looks at an applicant's combined water and
sewer rates
Many applicants have rates twice the target rate
Current Rates for Laurel
(assuming 6,000 gallons used per month)
Water
$24.22 + $1.82/1,000 gallons = $35.14 for 6,000 gallons
• Sewer
► $46.05
• Combined
• $81.19
• Compared to $62.63 /month Target Rate
130% of Target Rate (over 125% = more TSEP grant)
2
Flow Through Pipe
The AREA of a pipe
1 Pipe 2" Pipe
is proportional to the
maximum flow through it
Area of Pipe
AREA = rrD
4
D
3
LL
O LLB LJ
as
0 0
O
OZ
Z ~
U
F- LU
LLJ O }
C)
CO LiJ
L? U
LL I LLI
U 2
LU C)
2 LLi
U it
z_
? nn
W
M
/V
Z
W
Cj) w
W 2
a }
Z m
aWC)m°
w U)
-
LU 3 .
prOmo>
W-,:) Q W
C) a FA :>: Q
"
s 3
0.82+4" inside dia
U.S. vet. WCL
Gale. vel. head loss
Per I' Y212g h,
1IMln. f-P.s. feet feet
3.0 1.81 0.05 2.50
3.5 2.11 0.07 3.30
4.0 2.41 0.09 4.21
5.0 3.01 0.14 6.32
6.0 3.61 0.20 S.87
7.0 4.21 0.28 11.8
8.0 4.81 0.36 15.0
5.42 0.46
6.02 0.56 23
12.0 7.22 0.81 .
14.0 8.42 110 43.5
16.0 9.63 1.44 56.3
18.0 10.80 1.82 70.3
20.0 12.00 2.25 86.1
22.0 13.20 2.72 104.0
24.0 14-40 3.24 122.0
26.0 1.51130 3.80 143.0
28.0 16.80 4.41 164.0
4FL)CA/ -rA'6 06 J4
?r ?s 16 ED (Ise
A 3" P)ed- C^d
Cry ML=OWL,`
30 -11,ncs AS
m vu4 W'??
1-049" inside dia.
U-S. vel. frlct.
Gals. vel- head loss
Per Y Y'/2g h,
Min. fps- feet feet
6 2.23 0.08 2.68
8 2.97 0.14 4.54
10 3.71 0.21 6.86
12 4.45 0.31 9.62
14 5.20 0.42 12.8.
5.94 0.55 16.5
[ I8 3 6.68 0.69 20.6
Mfr 2?F 7.42 0-86 25.1
22 8.17 1-04 30.2
24 8.91 1.23 35.6
25 9.27 1-34 38.7
30 -11.1 1.93 54.6
35 13.4 2.63 73.3
40 14.8 3-43 95.0
45 16.7 4.34 119.0
50 18.6 5.35 146.0
55 20.4 6.46 176.0
60 22.3 7.71 209.0
65 242 9.10 245.0
70 26.0 10.49 283.0
75 27-9 12.10 324.0
s0 29.7 13.7 367.0
?,? ? EDUs
3" 1 E D Us
3-068" inside dia.
US. vel. frict. U.S. vel. frict.
Gals. vel. head loss Gals. vel- head loss
Per F Y3/2g h, Per F 1'r/2g hr
Min. f.p.s. feet feet Min. f-p.s. feet feet
50 2.17 0.07 0.66 220 9.55 1.42 10.7
60 2.60 0.11 0.92 240 10.4 1.69 12-6
70 3-04 0.14 1.22. 260 11.3 1-98 14.7
80 3.47 0.19 1.57 280 12.2 2.29 IG 9
90 3.91 0.24 1.96 300.* 13.0 2.63 ]
100 4.34 0.29 2.39 350 15.2 3.58 26.1
120 5.21 0.42 3.37 400 17.4 4.68 33-9
110 6-08 0.57 4-51 500 21-7 7.32 S25
9:nm 6.94 0.75 5.81 550 23-8 8.85 632
7.81 0.95 728 600 26.0 10.5 74.8
200 8.68 1.17 8.90 700 30.4 14-3 101.0
CAUTION: No aPowance has been made for age. differences in diameter resulting from
manufacturing tolerances or arty abnormal conditions of interior ripe surface. It is rec-
ommended that for cummrrcial application a reserve or margin of -fety to cover these
effects be added to the valuex shown in the table. Where no careful analysk of these
effects are made a reserve of 15% is recommended.
2"
2-067" inside dia.
U-S.
Gals.
vel. veL
head frict.
loss
Per
win- p
Up.s. F-1/2g
feet h,
feet
24 2.29 0.08 1
20
25 2-39 0.09 .
129
30 2-87 0.13 1.82
35 3-35 0.17 2
42
40 3-82 0.23 .
3.10
45 4-30 0.29 3-85
50. 4.78 0.36 4.67
55 5.25 0.43 5.51
60 5.74 0.51 6-59
65 6.21 0.60 7.70
70 6.69 0.70 8.86
7-16 0.8a 10.15
80 7-65 0.91 11.40
85 8.11 1.03 12-6
90 8.60 1.15 14.2
95 9.09 1.29 15.8
]0.0 9-56 1.42 -4
20 11.5 2-05 24.7
140 13.4 2.78 332
160 15.3 3.64 -43.0
I80 17-2 4-60 54-1
20U 19.1 5.68 66.3
220 21.0 6.88 80.0
240 22.9 8-18 95.0
260 24.9 9.60 111.0
280 26-8 11.14 128.0
300 28-7 12-8 146.0
-?.11 ED LI %
GREAT WEST ENGINEERING
PROJECT NAME
SUBJECT
MADE BY DATE _
REVISED BY DATE
SHEET NO. OF
PROJECT NO.
CHECKED BY DATE,
RECHECKED BY DATE
I
j\
J
a
w
N
X
I I:
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Equivalent Dwelling Units (EDU's)
Represents potential water capacity for
service owner
Based upon area of service line
• 3/4" service line = 0.44 square inches
• 1 1 /2" service line = 1.76 square inches
• 1 EDU = 3 /4" service (typical residence)
• Calculating EDU for 1 1 /2" service line
• 1.76 in /0.44 in = 4 —> 4 EDU's
Using Standard Practices to
__Determine Rates
Per Harry Whalen of Montana Rural Water
Base Rate Calculation
Debts Payment $ 80,718
Debts Payment $ 239,129
Debts Payment $ 64,056
Reserve $ 107,080
DNRC Surcharge $ 44,416
Deprec. $ 200,000
O &M (partial) $ 404,353
Total for Base Rate $ 1,139,752
EDUs 3,362
Cost/EDU /month $ 28.25
4
Using Standard Practices to
Determine Rates
■ Sales Fee Calculation
O &M Remaining $ 746,417
Gallons sold X 1,000 597,206
Cost/1,000 gallons $ 1.25
Total lncome/Exp $ 1,886,169
Correction from MRW 40,344 more sold
at 1.25/1,000 gals $ 50,424
• Total Base + Sales = $ 1,936,593
• Actual total now > $2.2 million (including irrigation
and raw water)
Existing EDU's & Income in Laurel
—_ . __.
Service Number EDU's Total Base Base
Each EDU's Rate Collection
Y." 2,548 1 2,548 $ 24.22 $ 740,551
1" 67 1.79 120 $ 30.28 $ 24,345
1 Y." 1 2.78 3 $ 44.82 $ 538
114" 20 4 80 $ 60.56 $ 14,534
2" 23 7.11 163 $ 96.90 $ 26,744
3" 10 16 160 $ 181.69 $ 21,803
4" 0 28.57 0 $ 181.69 $ -
6" 2 64 128 $ 605.62 $ 14,535
8" 0 113.78 0 $ 968.99 $ -
10" 1 177.78 178 $ 1,453.49 $ 17,442
TOTAL 2,672 - 3,380 - $ 860,492
5
Projected EDU's & Income
(if all EDUs have a base rate of $24.22)
Service Number EDU's Total Base Base
Each EDU's Rate Collection
'/." 2,548 1 2,548 $ 24.22 $ 740,551
1" 67 1.79 120 $ 43.35 $ 34,856
1 Y." 1 2.78 3 $ 67.33 $ 808
1 %" 20 4 80 $ 96.88 $ 23,251
2" 23 7.11 163 $ 172.20 $ 47,528
3" 10 16 160 $ 387.52 $ 46,502
4" 0 28.57 0 $ 691.97 $ -
6" 2 64 128 $ 1,550.08 $ 37,202
8" 0 113.78 0 $ 2,755.75 $ -
10" 1 177.78 178 $ 4,305.83 $ 51,670
TOTAL 2,672 - 3,380 - $ 982,369
Existing vs. EDU Rates
Existing collection:
, Base Collection = $860,493
Water Use Sales = $1,351,508*
Actual Collection = $2,212,000
* Projected collection (if all EDU's have a $24.22 base rate):
Projected Base Collection = $982,369
Projected Water Use Sales = $1,351,508* (assumed to be the
same)
Projected Collection = $2,333,877
Increase of $121,000 /year
* Includes raw water @$0.35/1,000 gallons and potable water @
$1.36/100 cubic feet ($1.82/1,000 gallons)
6
Impacts of EDU Rates
• Increased income of $121,000 /year
► Original goal was to increase income by almost
$200,000 /year
• NO residential user increase
• Follows state accepted system
• Defendable
City of Laurel
MONTANA
Questions?
GreatWest
engineering
7