Note:
Items of discussion in this recap includes a link indexed to that
portion of the City Council meeting replay. Click on bold headers that
are linked to view that portion of the video.
(STILLWATER, OKLA. / Posted Oct. 9, 2013) - The Stillwater City Council met for its regular meeting Monday, Oct. 7, 2013. (View the meeting agenda here)
Pledge of Allegiance
a. Presented by Skyline Elementary School students Mackenzie Martin (Parents: Ashleigh and Jesse Martin) and Hayden Hebbert (Parents: Rachel and Delton Hebbert).
Proclamations & Presentations
a. Fire Prevention Week
Consent Docket
a. Approval of minutes: Regular meeting, Sept. 16, 2013; Special Meeting, Sept. 23, 2013
b. Bid recommendation and budget amendment for the Public Library roofing project (CC-13-92)
c. Bid recommendation for the Pavement Management System Project 14TR01-B Thin Surface Overlays (CC-13-80)
d. Accept the 2013 Small Cities Set-Aside Program contract #15655 CDBG 13 and authorize the Mayor to sign the contract documents (CC-13-85)
e. Accept the FEMA Safe Room Shelter Grant and establish accounts for revenue and expenditures (CC-13-86)
f. Accept pedestrian easement at 2505 N. Perkins Road (CC-13-81)
g. Lease assignment from Hanger 1 Flight Center, LLC to Lynrho, LLC dba Hangar 1 Flight Center of Stillwater at Stillwater Regional Airport (CC-13-89)
h. Lease extension for Lynrho, LLC dba Hangar 1 Flight Center of Stillwater at Stillwater Regional Airport (CC-13-90)
i. Supplemental Agreement No. 3 with TTK Construction relating to final closeout of the South Parallel Taxiway Project at Stillwater Regional Airport (CC-13-91)
j. Sole source purchase of a 2014 Gradall Hydraulic Excavator, Model XL 3100 IV, 4X4 from Kirby Smith Machinery Inc. for a total price of $324,915 (CC-13-84)
k. Right-of-way agreement with Red Fork Energy granting a 30 foot right-of-way/easement at Lake McMurtry (CC-13-87)
l. Purchase agreement: land and easement for construction of a booster pump station to be located at 3314 S. Perkins Road
Council approved Consent Docket 5-0.
a. Approval of minutes: Regular meeting, Sept. 16, 2013; Special Meeting, Sept. 23, 2013
b. Bid recommendation and budget amendment for the Public Library roofing project (CC-13-92)
c. Bid recommendation for the Pavement Management System Project 14TR01-B Thin Surface Overlays (CC-13-80)
d. Accept the 2013 Small Cities Set-Aside Program contract #15655 CDBG 13 and authorize the Mayor to sign the contract documents (CC-13-85)
e. Accept the FEMA Safe Room Shelter Grant and establish accounts for revenue and expenditures (CC-13-86)
f. Accept pedestrian easement at 2505 N. Perkins Road (CC-13-81)
g. Lease assignment from Hanger 1 Flight Center, LLC to Lynrho, LLC dba Hangar 1 Flight Center of Stillwater at Stillwater Regional Airport (CC-13-89)
h. Lease extension for Lynrho, LLC dba Hangar 1 Flight Center of Stillwater at Stillwater Regional Airport (CC-13-90)
i. Supplemental Agreement No. 3 with TTK Construction relating to final closeout of the South Parallel Taxiway Project at Stillwater Regional Airport (CC-13-91)
j. Sole source purchase of a 2014 Gradall Hydraulic Excavator, Model XL 3100 IV, 4X4 from Kirby Smith Machinery Inc. for a total price of $324,915 (CC-13-84)
k. Right-of-way agreement with Red Fork Energy granting a 30 foot right-of-way/easement at Lake McMurtry (CC-13-87)
l. Purchase agreement: land and easement for construction of a booster pump station to be located at 3314 S. Perkins Road
Council approved Consent Docket 5-0.
a.
Receive public comments regarding a request from Progress Builders for a
map amendment for a preliminary planned unit development at 1400 N.
Boomer Road (Postponed from Sept. 5, 2013 and Sept. 16, 2013) (See memo to postpone to Oct. 21, 2013)
Council moved to approve postponement 5-0.
b. Receive public comments regarding a request to close a portion of the right-of-way at 1400 N. Boomer Road (CC-13-82)
Patty Evans, Development Services, presented the plans for the request to close a portion of the right-of-way. Evans said the closure of 40 feet is necessary for a new proposed multi-family development and will align the right-of-way with the rest of the right-of-way along Boomer Road. Evans said the applicant does propose to add a private access easement to Domino's Pizza to maintain the business's driveway access. The applicant has also indicated it will relocate an Oklahoma Natural Gas (ONG) gas line.
Kelly Harris, Keystone Engineering, spoke on behalf of the developers in favor of the closure.
Staff recommended the Council approve the request to close the 40 feet of right-of-way at the stated address.
Council approved staff recommendation 5-0.
c. Receive public comments regarding a request for a Map Amendment to rezone property addressed as 424 E. Thomas Ave. from IL (Light Industrial) to CG (General Commercial) (CC-13-83)
Evans presented the proposed Map Amendment to the Council. Evans said the amendment to General Commercial was to allow healthcare uses on the property and that the Comprehensive Plan does support commercial uses for the property.
Planning Commission recommended the Council approve the request as presented.
Council approved Planning Commission recommendation 5-0.
Resolutions
a. Resolution CC-2013-18: A resolution adopting an amendment to the trust indenture pursuant to which the authority was created by establishing an additional exception to a limitation on the amount of indebtedness the authority can incur.
City Attorney John Dorman asked the Council to address Resolutions item 'a' after it convened from the Stillwater Utilities Authority meeting.
Council moved to approve postponement 5-0.
b. Receive public comments regarding a request to close a portion of the right-of-way at 1400 N. Boomer Road (CC-13-82)
Patty Evans, Development Services, presented the plans for the request to close a portion of the right-of-way. Evans said the closure of 40 feet is necessary for a new proposed multi-family development and will align the right-of-way with the rest of the right-of-way along Boomer Road. Evans said the applicant does propose to add a private access easement to Domino's Pizza to maintain the business's driveway access. The applicant has also indicated it will relocate an Oklahoma Natural Gas (ONG) gas line.
Kelly Harris, Keystone Engineering, spoke on behalf of the developers in favor of the closure.
Staff recommended the Council approve the request to close the 40 feet of right-of-way at the stated address.
Council approved staff recommendation 5-0.
c. Receive public comments regarding a request for a Map Amendment to rezone property addressed as 424 E. Thomas Ave. from IL (Light Industrial) to CG (General Commercial) (CC-13-83)
Evans presented the proposed Map Amendment to the Council. Evans said the amendment to General Commercial was to allow healthcare uses on the property and that the Comprehensive Plan does support commercial uses for the property.
Planning Commission recommended the Council approve the request as presented.
Council approved Planning Commission recommendation 5-0.
Resolutions
a. Resolution CC-2013-18: A resolution adopting an amendment to the trust indenture pursuant to which the authority was created by establishing an additional exception to a limitation on the amount of indebtedness the authority can incur.
City Attorney John Dorman asked the Council to address Resolutions item 'a' after it convened from the Stillwater Utilities Authority meeting.
a. (first reading)
NONE
b. (second reading)
NONE
b. (second reading)
i)
Ordinance No. 3240: An ordinance authorizing the sale of a certain
parcel of property located at 4220 N. Perkins Road; providing for
citizen initiated referendum of said sale in accordance with section 4-2
of the city charter.
City Attorney Dorman asked the Council to address Ordinance No. 3240 at its regular meeting on Oct. 21 to allow staff time to finish negotiating a few fine points to the agreement.
City Attorney Dorman asked the Council to address Ordinance No. 3240 at its regular meeting on Oct. 21 to allow staff time to finish negotiating a few fine points to the agreement.
Reports from Officers and Boards
City Attorney Dorman - Request for an Executive Session pursuant to 25 O.S. 307 (B)(4) for the purpose of confidential communication with the City Attorney regarding pending litigation, Thomas Wise v. City of Stillwater; Case Number CJ-2013-460; District Court of Payne County. It is the opinion of the City Attorney that public disclosure of this matter will seriously impair the ability of the City Council to prosecute/defend this pending litigation or proceeding in the public interest.
Councilor Joe Weaver - Asked if it was possible to move Stillwater Economic Development Authority meetings to a Monday schedule to reduce cancellation of meetings.
City Manager Dan Galloway said they have already taken steps to change the meetings to Mondays. Galloway said they will continue to cancel the scheduled SEDA meetings on Tuesdays and move them to Monday nights for the rest of the year and that the City will resolve the issue formally when it adopts its 2014 meeting schedule. Galloway said they do not anticipate any more Tuesday afternoon meetings.
Mayor John Bartley - Reminded viewers that Vice Mayor Chuck Hopkins would be on KSPI Radio (780 AM) at 8:15 a.m. on Oct. 8 and that Councilor Weaver would be on the radio Oct. 15. Mayor Bartley also encouraged residents to be informed about the election initiative on Nov. 12, 2013.
Councilor Weaver - Asked where the Council was on the vehicle report.
City Manager Galloway said the Operations Group has continued to work on the report and that the inventory is completed. Galloway said they were going to include it at a special session but they have not had one open for it yet. Galloway said they felt they needed to place it with another item at a special session and they did not feel it was justified to have its own special meeting. Galloway said it would probably be added to a special meeting in the next 30 days.
City Council is recessed; SUA is called to order.
Consent Docket
a. Approval of minutes: Regular Meeting, Sept. 16, 2013
b. Purchase agreement: land and easement for construction of a booster pump station to be located at 3314 S. Perkins Road
c. Amendment to the professional services agreement for the Western Road Water Line Connection project #12WC05 (SUA-13-36)
Trustees approved 5-0.
General Orders
a. Rural Water Advisory Board semi-annual report
Trustees moved to accept the semi-annual report 5-0.
Resolutions
a. Resolution No. SUA-2013-5: A resolution adopting an amendment to the trust indenture pursuant to which the authority was created by establishing an additional exception to a limitation on the amount of indebtedness the authority can incur.
City Attorney Dorman briefed the Trustees on the background of the resolution. Dorman said the Trustees have directed staff in previous meetings to start preparing the SUA to issue bonds for the Southwest Water project and possibly a new power plant. Meanwhile, staff, Council and financial consultants have reviewed the trust indenture and bond documents to see if the SUA can issue such bonds. This review has determined that Article Five, Section 30 of the bond indenture contains language that requires the SUA to wait for an election that would otherwise not be required by state statute before bonds can be issued for either of the two projects. Dorman said this is a limitation that previous SUA Trustees have placed on themselves and their successors and that the consensus by those who have reviewed the indenture is that the limitation would unduly limit the ability of the SUA to participate in today's financial markets and the low threshold.
Dorman said there are three exceptions to the revision and that in the past Trustees have been able to issue bonds and notes under them. The exceptions do not apply to the above mentioned projects, however. Dorman said tonight's recommendation would create a fourth exception in Article Five which would permit the Trustees to issue bonds and notes whenever there is a super majority (four) of Trustees' votes and four members of the Council agree that such would be necessary. Dorman said the Trustees are recommended to pass the request to the trust indenture and that the amendment will require a unanimous vote of the Trustees per Article Seven of the trust indenture.
Councilor Gina Noble asked Dorman why the three exceptions do not apply to the case.
Dorman said the three exceptions are for refunding existing bonds, raising funds for project completion and the issuance of bonds and notes when they are necessary to protect the financial and physical integrity of the system when there is existing debt. Neither one of the instances apply to these requirements.
Councilor Noble reaffirmed that the vote would allow the SUA to borrow money an excess of 10 percent of the revenue the SUA receives in a year.
Dorman confirmed Councilor Noble's inquiry and restated that under the conditions of Article Five Section 30 the SUA would also have to hold an election.
Councilor Weaver asked if the 10 percent is the amount of the debt payment or the amount of the debt.
Dorman said it was the amount of the debt issued for that year.
City Manager Galloway said with the amount the SUA can borrow now is not enough to fund the replacement of a water treatment plant or a sewer plant or the implementation of the Southwest Water project. Galloway compared it to a household making $50,000 a year and only being able to take a loan for 10 percent of that amount. Galloway said in the family would not be able to buy a good used car with that funding. Galloway said the super majority vote needed by the Trustees ensures that the trust authority does give it serious consideration.
Galloway noted that the SUA makes a profit of about $70 million a year selling utilities, meaning the authority can only take out a loan for about $7 million at this time. Galloway said to complete projects of more than $20 million such as the Southwest Water project would require at least four votes from the Trustees to grant the exemption in Article Five should the resolution pass.
Galloway confirmed with Dorman that the proposed exception mirrors state statute on trust authorities. Dorman agreed and noted that there is no state law that a trust authority has to go to a vote of the people, but the four-fifths majority is what is required in the trust act right now.
Councilor Noble asked if the SUA knows how much it needs to borrow for the noted projects. Dorman said the projects driving the discussion right now are the Southwest Water project which is about $40 million and the building of a power plant as a result of the Grand River Dam Authority (GRDA) agreement which is about $70 million.
Mayor Bartley noted that the only project the SUA has pushed is the Southwest Water project, which exceeds in cost of funding what the SUA is allowed to borrow. Dorman confirmed.
Galloway noted that there have been some significant changes since Article Five originated. Galloway said there was not a policy or rate setting to create funded depreciation at the time the trust was written. He stated that today the SUA is fully funding depreciation in water and sewer and that there is a capital improvement fund for debt payments. Galloway also said the SUA did not have the opportunity to have a contract with GRDA in the 1970s that would make the entire debt payment service if it did bill a generated plan. Regardless of those changes, the SUA cannot fund such projects with the restrictions still put in place. Galloway said that with these revenue sources, there would be no need for an election because the people would not have increased rates.
Dorman also made a point that when the trust indenture was done more than 30 years ago, the City Council also approved a 50-year lease agreement that financed the SUA line. He reminded Council that it recently amended the lease agreement to accommodate the GRDA contract and some other long-term agreements. Dorman said the restriction in place now is unique to Stillwater and that the proposed resolution is something that has to be done and looked at in a more modern framework than it was in 1979.
Galloway said the vote would not authorize any debt that night, but allows the SUA the opportunity to in the future when planning projects.
Councilor Noble asked who would pay the money back should an accident occur and the City default on the loan, particularly in the case of the citizens. Dorman said it would not go back to the citizens and that the debt is secured by the assets of the SUA and at no point would be a debt of the City of Stillwater. Dorman stated that there is no way Trust debt can be imputed to the City or its citizens in the form of taxes or anything else.
Councilor Weaver reaffirmed with Dorman that by passing the resolution, it will put the Trustees in the position to issue up to $40 million worth of debt without going to a vote of appeal and that in the present structure anything that is more than the 10 percent limitation would require a vote. Dorman confirmed the councilor's question.
Mayor Bartley asked Don Kaiser about his history with and knowledge of the trust agreement. Kaiser has served as bond council on the City of Stillwater's issuance of General Obligation (GO) and revenue debt for more than 30 years.
Kaiser agreed with Dorman that the provision is unique to the City and that he has never seen it in another indenture. Kaiser said the provision is restrictive to developing new projects. He said he thinks the trust authority was more concerned about gaining public approval of the developing Kaw pipeline project when the provision was included in the bond indenture in 1979 than with funding new projects in the future.
Councilor Noble asked if there was a reason the Trustees had to vote that night. Dorman said yes because the SUA was in the process of having ratings assigned to the power plant that week and one of the questions that came up in the presentation to the grading company was on the status of the provision. Dorman said they need to resolve it so they can give the grading company an answer.
Councilor Noble asked if they knew public opinion on the proposed resolution. Dorman said he was not contacted about the resolution but that that was not indicative of what the public opinion might be.
Councilor Weaver addressed Mayor Bartley in agreement that the 10 percent total amount of debt in one year the SUA could take on is extremely low and that there are other measurements they it could use. Weaver said he wished this conversation could have been brought up a year ago when it would have been salient with the water issues happening then. Weaver said having the vote that night put the Trustees in an awkward situation and he would have liked to have looked at what other utility authorities had in their trust indentures. Weaver said he could not believe that they have to throw out any type of measurement to judge what a reasonable and fair amount of debt is and just lay it on the backs of whoever the Council is at that given moment in time. He stressed that this is a big decision for now and for the future and he doesn't want to make it just because they are pressed up on a deadline for a particular bond issue. He said this is something they should be thinking about over any debt and any time.
Mayor Bartley said he was frustrated by the issue and that they have been in a position "under the gun." He said it was not a fair position to be put in. Mayor Bartley suggested they take action that night and plan on readdressing the issue. He said the trust indenture can be amended and if there is a better measurement tool to be using, then they need to be using it.
Councilor Weaver said he does not think that it is a bad idea to let the people decide on allowing the SUA to take on $40 million in debt. He said that the SUA may have authority to make such a decision on $7 to $10 million in debt, but that the resolution was not an emergency at the moment.
Councilor Noble said they represent the public and that she would have liked to have any public input available. Noble said they probably have not heard from the public because they resolution was put on the agenda within the week.
Councilor Cody Scott said he struggled with the decision as Councilor Noble. Scott said he does not know why it was not brought up sooner but he supports the measure on two premises. The first because it can be amended and the second because it is the job of the Trust to make a decision because the people willed it that way. Scott said he does not like the idea of taking the people out of the discussion but he does not necessarily think that happened because they were appointed by the people to make these decisions. Scott also said he is more comfortable with a super majority vote than with a vote removing the 10 percent limitation verbiage. He said the current verbiage is not practical.
Councilor Scott motioned to vote for approval of the resolution.
Vice Mayor Chuck Hopkins said the only thing they are voting on is a change in trust indenture and not to commit money to anything.
Vice Mayor Hopkins seconded the motion.
Councilor Noble restated that they were not voting about the debt being retired. Mayor Bartley confirmed her inquiry.
Trustees vote 3-2, rejecting the resolution with Trustees Weaver and Noble voting 'No.'
SUA adjourned; City Council reconvened.
Executive Session
City Attorney Dorman removed his request for executive session.
City Council adjourned.
City Attorney Dorman - Request for an Executive Session pursuant to 25 O.S. 307 (B)(4) for the purpose of confidential communication with the City Attorney regarding pending litigation, Thomas Wise v. City of Stillwater; Case Number CJ-2013-460; District Court of Payne County. It is the opinion of the City Attorney that public disclosure of this matter will seriously impair the ability of the City Council to prosecute/defend this pending litigation or proceeding in the public interest.
Councilor Joe Weaver - Asked if it was possible to move Stillwater Economic Development Authority meetings to a Monday schedule to reduce cancellation of meetings.
City Manager Dan Galloway said they have already taken steps to change the meetings to Mondays. Galloway said they will continue to cancel the scheduled SEDA meetings on Tuesdays and move them to Monday nights for the rest of the year and that the City will resolve the issue formally when it adopts its 2014 meeting schedule. Galloway said they do not anticipate any more Tuesday afternoon meetings.
Mayor John Bartley - Reminded viewers that Vice Mayor Chuck Hopkins would be on KSPI Radio (780 AM) at 8:15 a.m. on Oct. 8 and that Councilor Weaver would be on the radio Oct. 15. Mayor Bartley also encouraged residents to be informed about the election initiative on Nov. 12, 2013.
Councilor Weaver - Asked where the Council was on the vehicle report.
City Manager Galloway said the Operations Group has continued to work on the report and that the inventory is completed. Galloway said they were going to include it at a special session but they have not had one open for it yet. Galloway said they felt they needed to place it with another item at a special session and they did not feel it was justified to have its own special meeting. Galloway said it would probably be added to a special meeting in the next 30 days.
City Council is recessed; SUA is called to order.
Consent Docket
a. Approval of minutes: Regular Meeting, Sept. 16, 2013
b. Purchase agreement: land and easement for construction of a booster pump station to be located at 3314 S. Perkins Road
c. Amendment to the professional services agreement for the Western Road Water Line Connection project #12WC05 (SUA-13-36)
Trustees approved 5-0.
General Orders
a. Rural Water Advisory Board semi-annual report
Trustees moved to accept the semi-annual report 5-0.
Resolutions
a. Resolution No. SUA-2013-5: A resolution adopting an amendment to the trust indenture pursuant to which the authority was created by establishing an additional exception to a limitation on the amount of indebtedness the authority can incur.
City Attorney Dorman briefed the Trustees on the background of the resolution. Dorman said the Trustees have directed staff in previous meetings to start preparing the SUA to issue bonds for the Southwest Water project and possibly a new power plant. Meanwhile, staff, Council and financial consultants have reviewed the trust indenture and bond documents to see if the SUA can issue such bonds. This review has determined that Article Five, Section 30 of the bond indenture contains language that requires the SUA to wait for an election that would otherwise not be required by state statute before bonds can be issued for either of the two projects. Dorman said this is a limitation that previous SUA Trustees have placed on themselves and their successors and that the consensus by those who have reviewed the indenture is that the limitation would unduly limit the ability of the SUA to participate in today's financial markets and the low threshold.
Dorman said there are three exceptions to the revision and that in the past Trustees have been able to issue bonds and notes under them. The exceptions do not apply to the above mentioned projects, however. Dorman said tonight's recommendation would create a fourth exception in Article Five which would permit the Trustees to issue bonds and notes whenever there is a super majority (four) of Trustees' votes and four members of the Council agree that such would be necessary. Dorman said the Trustees are recommended to pass the request to the trust indenture and that the amendment will require a unanimous vote of the Trustees per Article Seven of the trust indenture.
Councilor Gina Noble asked Dorman why the three exceptions do not apply to the case.
Dorman said the three exceptions are for refunding existing bonds, raising funds for project completion and the issuance of bonds and notes when they are necessary to protect the financial and physical integrity of the system when there is existing debt. Neither one of the instances apply to these requirements.
Councilor Noble reaffirmed that the vote would allow the SUA to borrow money an excess of 10 percent of the revenue the SUA receives in a year.
Dorman confirmed Councilor Noble's inquiry and restated that under the conditions of Article Five Section 30 the SUA would also have to hold an election.
Councilor Weaver asked if the 10 percent is the amount of the debt payment or the amount of the debt.
Dorman said it was the amount of the debt issued for that year.
City Manager Galloway said with the amount the SUA can borrow now is not enough to fund the replacement of a water treatment plant or a sewer plant or the implementation of the Southwest Water project. Galloway compared it to a household making $50,000 a year and only being able to take a loan for 10 percent of that amount. Galloway said in the family would not be able to buy a good used car with that funding. Galloway said the super majority vote needed by the Trustees ensures that the trust authority does give it serious consideration.
Galloway noted that the SUA makes a profit of about $70 million a year selling utilities, meaning the authority can only take out a loan for about $7 million at this time. Galloway said to complete projects of more than $20 million such as the Southwest Water project would require at least four votes from the Trustees to grant the exemption in Article Five should the resolution pass.
Galloway confirmed with Dorman that the proposed exception mirrors state statute on trust authorities. Dorman agreed and noted that there is no state law that a trust authority has to go to a vote of the people, but the four-fifths majority is what is required in the trust act right now.
Councilor Noble asked if the SUA knows how much it needs to borrow for the noted projects. Dorman said the projects driving the discussion right now are the Southwest Water project which is about $40 million and the building of a power plant as a result of the Grand River Dam Authority (GRDA) agreement which is about $70 million.
Mayor Bartley noted that the only project the SUA has pushed is the Southwest Water project, which exceeds in cost of funding what the SUA is allowed to borrow. Dorman confirmed.
Galloway noted that there have been some significant changes since Article Five originated. Galloway said there was not a policy or rate setting to create funded depreciation at the time the trust was written. He stated that today the SUA is fully funding depreciation in water and sewer and that there is a capital improvement fund for debt payments. Galloway also said the SUA did not have the opportunity to have a contract with GRDA in the 1970s that would make the entire debt payment service if it did bill a generated plan. Regardless of those changes, the SUA cannot fund such projects with the restrictions still put in place. Galloway said that with these revenue sources, there would be no need for an election because the people would not have increased rates.
Dorman also made a point that when the trust indenture was done more than 30 years ago, the City Council also approved a 50-year lease agreement that financed the SUA line. He reminded Council that it recently amended the lease agreement to accommodate the GRDA contract and some other long-term agreements. Dorman said the restriction in place now is unique to Stillwater and that the proposed resolution is something that has to be done and looked at in a more modern framework than it was in 1979.
Galloway said the vote would not authorize any debt that night, but allows the SUA the opportunity to in the future when planning projects.
Councilor Noble asked who would pay the money back should an accident occur and the City default on the loan, particularly in the case of the citizens. Dorman said it would not go back to the citizens and that the debt is secured by the assets of the SUA and at no point would be a debt of the City of Stillwater. Dorman stated that there is no way Trust debt can be imputed to the City or its citizens in the form of taxes or anything else.
Councilor Weaver reaffirmed with Dorman that by passing the resolution, it will put the Trustees in the position to issue up to $40 million worth of debt without going to a vote of appeal and that in the present structure anything that is more than the 10 percent limitation would require a vote. Dorman confirmed the councilor's question.
Mayor Bartley asked Don Kaiser about his history with and knowledge of the trust agreement. Kaiser has served as bond council on the City of Stillwater's issuance of General Obligation (GO) and revenue debt for more than 30 years.
Kaiser agreed with Dorman that the provision is unique to the City and that he has never seen it in another indenture. Kaiser said the provision is restrictive to developing new projects. He said he thinks the trust authority was more concerned about gaining public approval of the developing Kaw pipeline project when the provision was included in the bond indenture in 1979 than with funding new projects in the future.
Councilor Noble asked if there was a reason the Trustees had to vote that night. Dorman said yes because the SUA was in the process of having ratings assigned to the power plant that week and one of the questions that came up in the presentation to the grading company was on the status of the provision. Dorman said they need to resolve it so they can give the grading company an answer.
Councilor Noble asked if they knew public opinion on the proposed resolution. Dorman said he was not contacted about the resolution but that that was not indicative of what the public opinion might be.
Councilor Weaver addressed Mayor Bartley in agreement that the 10 percent total amount of debt in one year the SUA could take on is extremely low and that there are other measurements they it could use. Weaver said he wished this conversation could have been brought up a year ago when it would have been salient with the water issues happening then. Weaver said having the vote that night put the Trustees in an awkward situation and he would have liked to have looked at what other utility authorities had in their trust indentures. Weaver said he could not believe that they have to throw out any type of measurement to judge what a reasonable and fair amount of debt is and just lay it on the backs of whoever the Council is at that given moment in time. He stressed that this is a big decision for now and for the future and he doesn't want to make it just because they are pressed up on a deadline for a particular bond issue. He said this is something they should be thinking about over any debt and any time.
Mayor Bartley said he was frustrated by the issue and that they have been in a position "under the gun." He said it was not a fair position to be put in. Mayor Bartley suggested they take action that night and plan on readdressing the issue. He said the trust indenture can be amended and if there is a better measurement tool to be using, then they need to be using it.
Councilor Weaver said he does not think that it is a bad idea to let the people decide on allowing the SUA to take on $40 million in debt. He said that the SUA may have authority to make such a decision on $7 to $10 million in debt, but that the resolution was not an emergency at the moment.
Councilor Noble said they represent the public and that she would have liked to have any public input available. Noble said they probably have not heard from the public because they resolution was put on the agenda within the week.
Councilor Cody Scott said he struggled with the decision as Councilor Noble. Scott said he does not know why it was not brought up sooner but he supports the measure on two premises. The first because it can be amended and the second because it is the job of the Trust to make a decision because the people willed it that way. Scott said he does not like the idea of taking the people out of the discussion but he does not necessarily think that happened because they were appointed by the people to make these decisions. Scott also said he is more comfortable with a super majority vote than with a vote removing the 10 percent limitation verbiage. He said the current verbiage is not practical.
Councilor Scott motioned to vote for approval of the resolution.
Vice Mayor Chuck Hopkins said the only thing they are voting on is a change in trust indenture and not to commit money to anything.
Vice Mayor Hopkins seconded the motion.
Councilor Noble restated that they were not voting about the debt being retired. Mayor Bartley confirmed her inquiry.
Trustees vote 3-2, rejecting the resolution with Trustees Weaver and Noble voting 'No.'
SUA adjourned; City Council reconvened.
Executive Session
City Attorney Dorman removed his request for executive session.
City Council adjourned.
END
Recap by Meagan Kascsak, Marketing and Public Relations.
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Next City Council meeting is Oct. 21, 2013, beginning at 5:30 p.m. This meeting will be televised. Click here for agendas.
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