01/04/2011 MinutesCITY OF GRAND ISLAND, NEBRASKA
MINUTES OF CITY COUNCIL STUDY SESSION
January 4, 2011
Pursuant to due call and notice thereof, a Study Session of the City Council of the City of Grand
Island, Nebraska was conducted in the Council Chambers of City Hall, 100 East First Street, on
January 4, 2011. Notice of the meeting was given in the Grand Island Independent on December
29, 2010.
Mayor Jay Vavricek called the meeting to order at 7:00 p.m. The following Councilmember's
were present: Chuck Haase, Larry Carney, Bob Niemann, Kirk Ramsey, Peg Gilbert, Mitch
Nickerson, Linna Dee Donaldson, Scott Dugan, Randy Gard, and John Gericke. The following
City Officials were present: Interim City Administrator/Finance Director Mary Lou Brown, City
Clerk RaNae Edwards, City Attorney Dale Shotkoski, Assistant City Attorney Jason Eley and
Public Works Director Steve Riehle.
INVOCATION was given by Councilmember Nickerson followed by the PLEDGE OF
ALLEGIANCE.
MAYOR COMMUNICATION: Mayor Vavricek introduced Community Youth Council
members Ashley Bykerk, Reyna Raymundo, and Kaitlin Hehnke. Mentioned was to remember
those serving in the National Guard to be deployed to Kosovo. Mayor pointed out the important
services supplied by the City of Grand Island especially when there was no electricity this
evening at 5:15 p.m. along Webb Road.
Recognition of Steve Riehle City Engineer/Public Works Director for Service with the City of
Grand Island. Mayor Vavricek and the City Council recognized Steve Riehle for his years of
dedicated service to the City of Grand Island. Mr. Riehle started with the City on May 10, 1999
and his last day with the City would be January 7, 2011. A plaque was presented to Mr. Riehle
thanking him for his service.
Discussion Concerning Financial Guarantee Bond Related to Worker's Compensation Insurance.
Finance Director Mary Lou Brown reported that a payment in the amount of $16,500.00 to
Ryder Rosacker McCue and Huston for a financial guarantee bond annual premium was included
in the past Schedule of Bills which was related to the City's worker's comp coverage.
Ms. Brown stated the insurance company required that security or collateral be provided for
payments that extend for long periods of time which provided the company assurance they would
be reimbursed. This would be similar to a letter of credit provided by private industry. An
alternative would be to use an escrow account where the City would put aside funds for this
purpose. The $730,000 limit was based on the total dollars of outstanding claims. The fund had a
current balance of $5.3 million which included Worker's Comp, Health/Dental, and General
Liability Insurance.
Page 2, City Council Study Session, January 4, 2011
Mark McCue from Ryder Rosacker McCue and Huston was present to answer questions from
Council. Mr. McCue explained the City's Work Comp Insurance was through EMC with a large
deductible of the first $100,000 of every work comp claim to be paid by the City which lowered
the premium. By having a large deductible it had saved the City over $3 million. Mr. McCue
stated governmental entities could not use a letter of credit but were required to use a surety
bond.
Councilmember Haase questioned the $16,500 claim for administrative cost for a financial
guarantee bond annual premium, which was not used towards actual claims. Mentioned was that
the City was self insured and he would like to see if an escrow agreement could be worked out.
Mr. McCue stated he didn't know if it was legal but would investigate it. The bond, escrow
account, etc. was a necessity in order to have this plan in place. Discussion was held regarding a
higher deductible.
Mr. McCue stated the City had not exceeded the $100,000 deductible very many times over the
last few years. Human Resources Director Brenda Sutherland stated there was only one
employee this last year that might reach the $100,000 deductible. Back claims were the most
expensive. Impairment ratings were explained as well as the City's health wellness program. Mr.
McCue stated the current modifier for the City was .94 which was better than most cities.
Ms. Brown stated she would work with Mr. McCue to analyze an escrow account.
Discussion Concerning Potential Bond Refinancing. Finance Director Mary Lou Brown reported
that Ameritas Investment Corp was the City's bond underwriter approved by Council on
September 28, 2010. A review of the City's outstanding bond issues was recommended.
Bruce Lefler representing Ameritas was present to make recommendations for refinancing
current bonds. On December 7, 2010 the City Council approved redemption of the Solid Waste
Bonds Series 2004. Mr. Lefler reviewed the outstanding bond issues the City currently had. The
following bonds were recommended to refinance first:
• Public Safety Bond Series 2006
• GI Facilities Corp. Library Bond Series 2005
• Refunding Various Purpose Bond Series 2004
Mr. Lefler stated these bonds would have to be brought to council individually with 15 days
between bonds. Ameritas was looking at the Heartland Events Center which was more
complicated. Discussion was held concerning paying these off earlier. Bonds were sold in $5,000
incremental amounts made available to the public through local bonding agents or Ameritas.
Refinancing expenses were mentioned. Mayor Vavricek stated a revenue stream for the Library
and Public Safety was in place with the 1/2¢ sales tax.
Discussion Concerning Sanitary Sewer Extension along Highway 281 to 8-80. Public Works
Director Steve Riehle reported that the City had been approached by businesses along US
Highway 281 near the Interstate 80 interchange about the possibility of extending city sanitary
sewer to serve their property.
Page 3, City Council Study Session, January 4, 2011
Mr. Riehle gave a PowerPoint presentation. Reviewed were maps of the existing Sanitary Sewer
Collection System.
The following areas remained to be completed with sanitary sewer within the City Limits:
• Webb Road north of BNSF tracks
• West Park Plaza trailer court
• Platte Valley Industrial Park East
The following areas were studied outside the City Limits to extend sanitary sewer:
• CAAP
• East Lakes
• South Locust and US Hwy 281
Sanitary Sewer needs along South US Hwy 281 were:
• Bosselman Travel Center
• Quality Inn & Day's Inn (Including Arby's and Sinclair Gas Station)
• USA Inn (Includes Sapp Brothers Convenience Center)
Estimate of Costs:
• $2,196,739 Total Estimated Project Cost
• Initial split between Public & Private appears close to 60/40
• Final split dependent on benefit calculations and negotiations
Financing:
• $250,000 FY11 Budget for Sewer Districts
• $250,000 Proposed FY 12 Budget for Sewer Districts
• 800 000 Bond Financing
• $1,300,000 Estimated 60% city project share
Marlan Ferguson, 2808 Apache Road on behalf of Economic Development Corporation (EDC)
spoke in support. Robert Meyer, 648 E. Memorial Drive spoke in opposition.
Kevin Prior, 1320 Windsor Road representing Olsson Associates explained the reasons for
planning the sanitary sewer line along the west side of Hwy. 281 was to minimize crossing Hwy.
281 and potential development was most likely to occur. Mr. Prior answered questions regarding
a timeline to implement this plan. He stated it would take approximately 18 months.
Questions made by Council were: how would this be paid for; where was the revenue source
coming from; shouldn't we finish sanitary sewer lines within the City first and maintain current
lines; this area was not in the City limits and don't pay City taxes; how big do we want the City
to be; and in which direction do we want to grow.
Lift stations were discussed which were not a part of the total cost of this project. Environmental
issues, annexation, and additional rate payers were mentioned. Tap district financed by the
private sector was brought forward. Regional Planning Director Chad Nabity answered questions
Page 4, City Council Study Session, January 4, 2011
regarding development along Hwy 281. He stated if sewer line was in place it would lend itself
to development.
Mr. Riehle explained the letter of intent could be brought before Council at the January 11, 2011
City Council meeting. City Attorney Dale Shotkoski explained the Department of Environmental
Quality (DEQ) was on a timeline regarding the businesses at the I-80 interchange to improve
their sewer issues. The letter of intent would start the negotiation process.
Utilities Director Gary Mader explained the process to provide municipal infrastructure to the
entire City. Trunk lines for water and sewer were available in all areas of the City so if anyone
wanted to tap into it they could. Citizens would petition the City to add a district at which time
the residents could protest the district if they did not want it. Mr. Mader answered questions
concerning water and electricity south to Interstate 80 along Hwy 281 which currently was not
serviced by the City.
Marian Ferguson, EDC President answered questions concerning the Platte Valley Industrial
Park East regarding sewer and water infrastructure to that area and how it would be funded. A
study showed most development would more likely be along Hwy 281 instead of South Locust
Street south of the Wood River Diversion Channel. LB 840 funds were discussed which would
not qualify for this project.
Mr. Nabity explained the issues and problems of annexation to this area. School districts and
utility districts were mentioned as potential problems.
Greg Epp representing Sapp Petroleum spoke in support.
ADJOURNMENT: The meeting was adjourned at 9:50 p.m.
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RaNae Edwards
City Clerk