HomeMy WebLinkAbout1999-0817.REG.MIN MINUTES FOR THE REGULAR MEETING
ASHLAND CITY COUNCIL
August 17, 1999
Civic Center Council Chambers, 1175 E. Main Street
PLEDGE OF ALLEGIANCE
Council Chairperson Don Laws called the meeting to order at 7:00 p.m., in the Civic Center Council Chambers.
ROLL CALL
Councilors Laws, Hauck, Hanson, Wheeldon and Fine were present. Mayor Shaw and Councilor Reid were absent.
APPROVAL OF MINUTES
The minutes of the regular meeting of August 3, 1999 were approved as presented.
SPECIAL PRESENTATIONS & AWARDS
1. Presentation by Kay Atwood regarding a History of Ashland City Government.
Historical Consultant Kay Atwood spoke on the three-year history of the project, and presented the Council with a
bound copy of the history book. Hanson complimented Atwood on the thoroughness of this project. Freeman noted
that copies would be made available to the public for $20, which is the cost of printing. Atwood noted that copies are
also available for viewing at the public library, the Southern Oregon University library, and the Southern Oregon
Historical Society. Atwood explained that this project is not something that City's regularly do, that it is unique, and
was begun at the request by former City Administrator Brian Almquist to be ready for the 125tn Anniversary of the
City's incorporation in October.
Laws noted that while this is a narrative history of the city government, it is also a history of the city and the general
community as a whole. Fine complimented the style and breadth of the work. Wheeldon and Laws suggested placing
a discussion of some sort of celebration of the anniversary of the City's incorporation on the council agenda after the
Mayor's return.
2. Update and presentation by the Planning Commission.
McLaughlin noted that the Planning Commission chair was absent due to a personal conflict, and asked that this item
be rescheduled for a later date, either as a presentation or a joint session.
CONSENT AGENDA
1. Minutes of Boards, Commissions and Committees.
2. Monthly Departmental Reports.
3. Confirmation of Mayor's appointment of Bruce Taylor to the Bicycle & Pedestrian Commission for a
term to expire April 30, 2001.
Councilors Hanson/Fine m/s to approve Consent Agenda. Voice vote: All AYES. Motion passed.
PUBLIC HEARINGS (None)
PUBLIC FORUM
Eric Navickas/711 Faith Ave./With regard to the "H2OH" water quality report, noted that the report is inaccurate in
saying that recreational use, timber harvest and pesticide use are restricted in the watershed. Noted that the ski slope
is a recreational use, that a major development is planned, and then cited several instances where timber harvests have
occurred. Distributed flyers regarding the HazRed issue. Noted that 8 million board feet of timber were removed to
reduce fire danger 6 years ago, and questioned why 3.5 million more would need to be removed now. Asked for an
independent study of the level of hazard existing, as the Forest Service has been untrustworthy in his view.
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Wheeldon clarified that an environmental impact statement (EIS) has not yet been released. Wheeldon noted that she
has been meeting with the watershed protection group and District Ranger Linda Duffy, and explained that one single
action was not adequate to deal with fire hazard reduction. Stated that ongoing efforts are needed, and because of prior
neglect more regular attention is needed now.
Laws explained that Navickas' request for an independent had been received, and would be considered. Stated that
council could place this item on the agenda now if they chose to do so.
UNFINISHED BUSINESS (None,}
NEW AND MISCELLANEOUS BUSINESS
I. Council Meeting Look Ahead.
Freeman noted that this item was informational, and that there have been no significant changes to the schedule since
the last meeting. Noted that there would be a study session on Thursday, and that the previously scheduled discussion
of a jurisdictional exchange would be postponed to a later meeting when Councilor Reid could be present (probably
September 9th).
2. City of Ashland Limited Use Telecommunications Franchise Agreement with AT&T.
Nolte explained "limited use" agreement, which was drafted because of the small portion of the city's right of way
being used by AT&T and the fact that no customers are directly served within the city. Stated that because this is
limited use, franchise fees are to be based on linear feet rather than a percentage of gross. Emphasized that this complies
with the telecommunications ordinance. Nolte continned for Hauck that AT&T has been in the right-of-way since
1988, and the city will be receiving payment dating back to 1988.
Councilors Hauck/Wheeldon m/s to approve the City of Ashland Limited Use Telecommunications Franchise
Agreement with AT&T. Roll call vote: Hauck, Laws, Hanson, Wheeldon, and Fine, YES. Motion passed.
ORDINANCES, RESOLUTIONS AND CONTRACTS
1. Second reading by title only of "An Ordinance Removing the Restriction on the Number of Taxicabs
Which May Operate in the City and Increasing the Amount of Required Liability Insurance."
Councilors Hauck/Hanson m/s to adopt Ordinance #2846. DISCUSSION: Laws questioned Nolte as to whether
the existing franchise agreement with Yellow Cab restricts the city from making this change. Hauck clarified
that he has copies of the agreement, and there are no restriction of this kind. Roll call vote: Wheeldon, Hauck,
Fine, Hanson, and Laws, YES. Motion passed.
Second reading by title only of "An Ordinance Vacating a Portion of Indiana Street on Property
Owned by Southern Oregon University near Siskiyou Boulevard."
Councilors Wheeldon/Fine m/s to adopt Ordinance #2845. DISCUSSION: Laws clarified that this was a
vacation of a portion of the street that is no longer used. Roll call vote: Fine, Hauck, Hanson, Wheeldon, and
Laws, YES. Motion passed.
Second reading by title only of "An Ordinance Amending the Sign Code to Permit Temporary Signs
45 days Prior to an Election."
Councilors Hauck/Wheeldon m/s to adopt Ordinance #2844. DISCUSSION: Laws explained that this change
was due to sooner voting that occurs with voting by mail. Noted that this was brought forth by the City
Recorder at the request of those conducting campaigns. Hauck noted it brings Ashland into line with other
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municipalities in the county. Roll call vote: Hauck, Hanson, and Wheeldon, YES. Fine and Laws, NO. Motion
passed 3-2.
4. Reading by title only of "A Resolution Changing the Name of Renaissance Drive to Winter Drive."
Councilors Fine/Wheeidon m/s to adopt Resolution #99-54. DISCUSSION: Laws explained that this street has
only one residence, and the residents have requested the change. Fine asked for confirmation that the city would
be bearing the cost of a new street sign, and Brown confirmed this. Hauck confirmed that this is a name from
the approved historical street name list. Roll Call Vote: Wheeldon, Hanson, Fine, Hauck, and Laws, YES.
Motion passed.
5. Reading by title only of "A Resolution Changing the Name of Spring Street to B Street."
Councilors Fine/Wheeldon m/s to adopt Resolution #99-55. Discussion: Laws clarified the reasoning behind
this change, noting that the street signs and the post office already consider this to be B Street, and it is
merely a correction of City plat maps. Roll Call Vote: Hanson, Hauck, Fine, Wheeldon, and Laws, YES.
Motion passed.
6. Reading by title only of "A Resolution Expressing the Sense of the Council with Respect to the
Moral Obligation of City Government to Help Ameliorate the Effects of Certain Decisions Taken in
the Public Interest."
Fine noted that he had raised this issue at the last meeting, arising from the Blue Mountain Caf~ situation. Briefly
explained this situation, and the work he and Hanson had done with City Administrator Freeman and City Attorney
Nolte to put the resolution in its present form. Noted a correction to the last line in section 3 which should read "It is
not the intent of the City to a33urc assume financial responsibility for any person or entity."
Fine explained that staff was remaining neutral on this issue. Freeman explained for Wheeldon that staff is not
recommending this item to council, and that they are not making a recommendation against it.
Wheeldon suggested that there was a need for meaningful action rather than just a goodwill gesture, and discussed
materials on relocation distributed by the Portland Development Commission. Questioned whether this resolution gave
a future council any guide that could be quantifiable. Feels that there needs to be a way to cover relocation costs, as
a way to provide a tool for use in negotiations to address the issue of displacement.
Laws concurred that the resolution does not define quanti~able policy steps, but stated that this is the intention and that
this is all that can be done given the diverse range of circumstances that might arise. Laws stated there is nothing wrong
with supporting the council' s commitmentto fairness with an official policy statement, and suggested that voting against
the resolution at this point would send the wrong message.
Wheeldon explained some of the information from the Portland Development Commission addressing the City
ameliorating the effects of certain decisions made in the public interest.
Fine noted that in meeting with Hanson, Freeman and Nolte, a relocation expenses ordinance was discussed, and the
sense was that with the small number of condemnations which occur in Ashland it was not necessary or appropriate.
Discussed how the Blue Mountain situation, and citizen response, echoes statements from Kay Atwood's report on city
government in Ashland in the 1870's concerning a lack of confidence in council doing the right thing. Suggested that
this resolution, in its very general format, is necessary as an assurance to the citizens that the council is committed to
doing the right thing.
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Hauck clarified that the previous council discussion had asked that the resolution be general in the sense that it not be
applied specifically to Blue Mountain, but that there should be specificity to address relocation.
Councilors Hanson/Fine m/s to adopt Resolution #99-52, with the correction in section 3 as previously noted.
Roll Call Vote: Fine, Hanson, and Laws, YES. Wheeldon and Hauck, NO. Motion passed 3-2.
,
Reading by title only of "A Resolution of the City of Ashland Annexing a Contiguous Area to the
City of Ashland, Oregon, and Providing for an Effective Date (Washington Street annexation by
Neuman)."
Councilors Hauck/Fine m/s to adopt Resolution #99-50. Roll call vote: Hauck, Fine, Wheeldon, Hanson, and
Laws, YES. Motion passed.
,
Reading by title only of "A Resolution Setting the Time and Place for a Public Hearing on the
Withdrawal of Certain Real Property from Jackson County Fire District No. 5; and Directing
Publication of Notice as Required by ORS 222.524 (Washington Street annexation by Neuman)."
Councilors Wheeldon/Fine m/s to adopt Resolution #99-51. Roll call vote: Fine, Wheeldon, Laws, Hanson,
and Hauck, YES. Motion passed.
9. Reading by title only of "A Resolution of the City Council of The City of Ashland, Jackson County,
Oregon, Authorizing a Loan Agreement."
Freeman explained that this agreement is the culmination of years of effort by the city, the council and the staff. Briefly
summarized the process, which began in 1996 when the council adopted the goal of developing a telecommunications
infrastructure in response to the pending deregulation of the electric utility. In 1997, a market study was conducted
which revealed tremendous interest in high speed internet and business data services, as well as cable television. In
1998, the first business plan for the Ashland Fiber Network was developed. The most recent plan reflects significant
changes made since that original business plan. Explained further that council has approved rates for the various
different products of the Fiber Network this year, and has approved a franchise for the city to provide
telecommunications service and cable television. The last major step is to secure long term financing.
The loan amount is for $5.8 million, and an RFP was put out through the city's financial consultant. There were three
responses. The interest rate is 5.14%, and the security for the loan is first, the revenue from cable television, intemet
and high speed data, and secondly, electric revenue. Explained that there is a ten-year business plan, with an ending
cash balance of $3.3 million in year 10. Project 3500 cable subscribers, 150 high-speed business internet subscribers,
2800 residential internet subscribers, and 60 AFN high-speed data subscribers in year 3. Clarified changes in the loan
amount from the adopted budget, which had anticipated a $5 million bond issue or loan. Three changes resulted in this
need for additional funds: 1 ) two contracts were entered into for high speed data service to the university and school
district, adding about $200,000 in capital costs which will be repaid; 2) the philosophy relative to set-top boxes changed
because it was decided to offer a box with tier 3 service, which added capital cost and offset revenue; 3) $250,000 was
also added for an accelerated construction schedule due to the incredible demand - there are roughly 800 pre-
subscriptions for cable television service, and ISPs estimate that by end of the fiscal year there will be 500 high speed
subscribers in Ashland, so two contracted crews are being brought in to help with installation. Emphasized that the cost
benefit of spending additional funds up front is fully justified in the business plan.
Turner explained that changes were made in the business plan July 1st, and again August 17, 1999 to include new
numbers, rates, and etc. Stated that the last printing was July I st.
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Freeman explained for Wheeldon, that provided this item is passed by council tonight, construction crews will begin
work tomorrow (August 18th) on nodes 5 and 6 near the hospital. Stated that on a demonstration basis, high speed
internet service will be up and running within 2 ½ weeks. Emphasized that head-end is built and equipment is in place,
there just needs to be the connection to homes. On the cable television side, it is expected that the head-end and satellite
array wilt be constructed by the end of September, with service to be offered at that time. A detailed project plan will
be worked out based the speed with which the first to neighborhood nodes can be installed.
Laws explained that there have been some delays due to council delaying certain decisions and also due to difficulty
buying equipment in smaller quantities.
Tom Coleman, regional manager with Falcon Cable/926 South Grape St., Medford/Noted that number 1.3 in the
resolution stating that Ashland needs the AFN is false, and that Falcon already offers all services to be offered through
the AFN. Services will be duplicating existing Falcon services, in direct competition with private sector businesses.
Noted that repeated statements by the city have assured the public that there will be no 'cross-subsidy' of the AFN, yet
the resolution pledges "the net operating revenues of [the city's] electric system to pay the amounts due under the loan."
Emphasized that this places the burden of this loan on all electric service customers, not just those wishing to subscribe
to the AFN. Emphasized that the loan amount has now grown to $5.8 million, and that despite statements by Freeman
in the Tidings that the city would not seek tax-exempt financing, the resolution requires covenants for tax exempt status.
Urged that the decision to go into competition with private business, and put all taxpayers at risk, should go to a vote
of the people.
Coleman clarified for Nolte that Falcon is not now offering high-speed data service in Ashland now, but that the
capability to do so exists.
Kip Lombard/133 Manzanita/Explained that while he has previously represented Falcon, he is speaking tonight as
a private citizen on his own behalf. Expressed his concerns with the city obligating itself to a sizeable debt without a
vote of the people. Emphasized that information has changed significantly since the city began moving ahead with the
AFN, and noted that the electric revenues being used as a guarantee here are general fund revenues. Also questioned
previous statements by Mayor Shaw and Freeman that the city would not seek tax exempt financing, when that is what
is being sought here. While this means a lower cost for the loan, the public has been told one thing while something
else is being done. Reiterated that the back up pledge of the net operating revenues of the electric system is cause for
concern, and questioned whether this meant tapping into general fund revenue. Concluded that this is a borrowing on
the credit of the city, despite what is stated in the resolution, and stated that this is very risky. Bothered by ISPs making
a profit from using the city network, and suggested that this profit to private users might defeat tax exempt financing.
Expressed concern with tax exempt obligation this year when this item is combined with the library/fire station bond.
Noted that moving ahead after information has changed is being done without citizen support and not good business.
As a citizen, taxpayer and ratepayer, he would like this issue to be submitted to a vote of the people.
Laws responded that the electric utility tax is a city tax, imposed by the city as separate from the utility. Relative to ISPs
using the city network, Laws suggested that this is no different than businesses using city streets in the conduct of their
business.
Turner noted that relative to issuances this year, in addition to this $5.8 million item there will be $500,000 for local
improvement districts and $500,000 for parks, and $2-3 million for the wastewater treatment plant. Emphasized that
the city will not issue over $10 million this year, and that the fire station/library bond issue will be issued the following
calendar year. Reiterated that the city is aware of, and will not go over, the $10 million cap. Pointed out that a specialist
in the firm of the bond counsel has said the city is doing a fine job after reviewing documentation. Explained that the
rates must be equal for all ISPs in the same class.
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Freeman explained that a financial advisor had at one time suggested seeking private financing, but after this initial
advice, the city looked at this option and found that it wasn't appropriate. The city has chosen the route that results in
the lowest interest rate for the project. Turner explained that this is a privately placed loan, not a bond, and it was sent
to several private banks that were interested. This loan will be held by the bank, and will not be re-sold. It was
competitively bid, and the payment stream is being set up to fit the business plan. Also explained that the revenue of
the electric fund is the income from rates, connections, and interest less the operating costs of the utility. The exact
definition is being set up in the loan agreement.
Fine suggested that in a sense, this issue was voted on by the people when 3 of the 6 councilors who voted for the AFN
were up for reelection in November 1998 and the AFN did not become an issue in that election. Emphasized that the
decision to move ahead with the AFN has already been made and the city has moved forward, and stated that it is too
late to revisit that decision. Stated that the issue for council now is whether the financing package presented by staff
is the best available for permanent funding. Noted that he has discussed concems at length with Freeman and Turner,
and he is confident that staff is presenting council with the best means of financing that they can find.
Turner explained that the primary backing for the loan is the revenue collected from AFN rates, and the secondary
security is the net operating revenue of the electric fund. Ultimately, ifAFN revenues were inadequate, the electric fund
could require a rate increase some years down the road to meet this obligation. However, the AFN business plan clearly
shows more than adequate revenues to pay for this debt and put more than a $1 million back into the project in the next
ten years. Turner confirmed for Laws that there would in no way be a negative impact on the general fund, even if
electric rates had to go to repayment of the debt. Laws recognized that the people of Ashland would have to come up
with the money one way or another, but emphasized that there would be no threat to the general operation of the city.
Wheeldon expressed her understanding that there was in no way to be a subsidy of the AFN by the general public.
Turner likened it to a married couple seeking a loan - a wife's wages might be adequate to obtain a loan, but they can
receive a better interest rate if both are willing to sign the loan. Freeman emphasized that electric rates do not have to
be increased to make this loan work - electric rates would only be affected if there were insufficient revenues from AFN
to pay the debt. And even then, it would not occur until 5 or 6 years down the road. Hauck emphasized that the
likelihood of this is very small.
Wheeldon suggested that the AFN rates should be raised in those circumstances, rather than the electric rates. Turner
stated that these issues would need to be looked at as needed in the future. Wheeldon questioned whether there is a
worst case scenario in the business plan. Hauck pointed out that this is not the expectation in the business plan.
Turner explained that this issue has to do with dealing with the banking community and their desire for secondary
security.
Laws concluded that no one on the council anticipates the circumstances being discussed, and that it merely has to do
with the need for collateral as security on the loan if there were unforeseen circumstances. Emphasized that the benefits
are so great that it is worth the one tenth of one percent of risk.
Councilors Hauck/Wheeldon m/s to adopt Resolution #99-53. Roll Call Vote: Hanson, Wheeldon, Hauck, Fine,
and Laws, YES. Motion passed.
OTHER BUSINESS FROM COUNCIL MEMBERS
Discussion of proposed modifications to the permit requirements for tour buses and special vehicles.
Fine noted that this issue was brought to his attention by Mr. Bill Devon, of Devon Carriage Rides, who under current
regulations is not allowed to have an informational sign. Fine explained that he has drafted language to allow business
owners, at their expense, to place informational signs.
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Laws suggested that signs would need to be distinguishable from standardized signs used by the city. Recommended
that it be a different color to make it noticeable.
Martina & Bill Devon/PO Box 374/Suggested that the sign should be readable from both directions, and suggested
that signs could be larger than standard street signs to make it distinguishable.
Fine explained for Wheeldon that the sign code exempts informational signs placed by the city. Fine emphasized that
he recommended placing this proposed modification in the area of the code dealing with traffic signs, as it deals with
inlbrmational signs rather than advertising.
Laws stated that he is defensive of the sign code, as exceptions set precedent.
Discussion that there is no existing post for hanging a sign near the boarding area for Devon Carriage Rides. Nolte
stated that there would be no liability if the operator placed the sign on a city pole, if this were agreeable with the City
Engineer, and noted that he understood that it was intended that such a sign be removed at the close of business each
day.
Fine asked that if council is agreeable the item be referred to staff to refine the language. Freeman noted that he had
looked at this with the City Attorney and the Director of Community Development, and they saw no problem with this
modification or its placement in this portion of the city code.
Council expressed general agreement with the modification proposed, noting that the specific placement of
informational signs for special permit vehicles would be left up to staff, and the item was referred back to staff for
refinement.
Freeman noted item included in packet related to public meetings to be held in September and October. Explained that
this was a reference piece for conducting effective public meetings.
Wheeldon noted that a large delegation from Ashland will be going to Guanajuato for one week, departing on the 27th.
ADJOURNMENT
Meeting was adjourned at 8:35 p.m.
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