City Council

Mayor Cal Sheehy Lake Havasu City Vice Mayor David Lane Police Facility Councilmember Nancy Campbell 2360 McCulloch Blvd North Councilmember Jeni Coke Lake Havasu City, Arizona 86403 Councilmember Jim Dolan www.lhcaz.gov Councilmember Michele Lin Councilmember Cameron Moses City Council Regular Meeting (Tentative Budget & CIP Adoption) Minutes - Final Tuesday, June 13, 2023 5:30 PM 1. CALL TO ORDER Mayor Sheehy called the meeting to order at 5:30 p.m. 2. INVOCATION: Stephanie Lueras, Christ Chapel Ms. Stephanie Lueras, Christ Chapel, gave the invocation. 3. PLEDGE OF ALLEGIANCE: Young Adult Development Association of Havasu (YADAH) 4. ROLL CALL Present: 6- Mayor Cal Sheehy, Councilmember Nancy Campbell, Councilmember Michele Lin, Councilmember Cameron Moses, Councilmember Jeni Coke and Vice Mayor David Lane Absent: 1- Councilmember Jim Dolan 5. CONSENT AGENDA 5.1 ID 23-3823 Approve the May 11, 2023, City Council Budget Work Session Meeting Minutes, and May 23, 2023, City Council Regular Meeting Minutes (Kelly Williams) 5.2 ID 23-3799 Adopt Resolution No. 23-3672 Approving Intergovernmental Agreement with Mohave County for County’s Rental Assistance Program (Vijette Saari) 5.3 ID 23-3827 Adopt Resolution No. 23-3678 Approving Abandonment of a 6-Foot by 11-Foot Southern Portion of the 10-Foot by 50-Foot Public Utility and Drainage Easement on the Northeastern Boundary of 4121 Carlsbad Drive, Tract 2209, Block 17, Lot 17 (Trevor Kearns) 5.4 ID 23-3828 Adopt Resolution No. 23-3679 Approving Abandonment of a 2.5-foot by 76-foot portion of the 10-Foot by 81-Foot Public Utility and Drainage Easement, Excluding the Southwestern Most 5-Feet, on the Southeastern Property Line of 2820 War Eagle Drive, Tract 2273, Block 10, Lot 13 (Trevor Kearns) 5.5 ID 23-3809 Ratify the Purchase of Nine (9) Complete Sets of Structural/Extrication Personal Lake Havasu City Page 1 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Protection Equipment (PPE) from Matlick Enterprises dba United Fire Equipment Company (Chief Pilafas) 5.6 ID 23-3797 Ratify Change Orders Nos. 1 & 2 to the Diesel Exhaust Extract Systems for Six (6) Fire Stations Contract with Barnes Electric, LLC (Chief Pilafas) 5.7 ID 23-3801 Approve Annual Expenditures Not-To-Exceed $60,000 for Citywide Uniform, Floor Mats, Towel Rental and Laundry Service with Unifirst Corporation ( Jill Olsen) 5.8 ID 23-3811 Ratify Expenditures Exceeding $50,000 for Rebuild of High Service Pump #7 at the Water Treatment Plant with Phoenix Pumps, Inc., Utilizing the City of Chandler Cooperative Contract (Bill Gane) 5.9 ID 23-3824 Call for Executive Session Pursuant to A.R.S.§ 38-431.03(A) 4:30 p.m., Tuesday, June 27, 2023 (Kelly Williams) Councilmember Coke moved to approve the Consent Agenda as presented, seconded by Vice Mayor Lane, and carried by the following vote: Aye: 6 - Mayor Sheehy, Councilmember Campbell, Councilmember Lin, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Absent: 1 - Councilmember Dolan 6. CORRESPONDENCE, COMMUNICATIONS, PETITIONS, ANNOUNCEMENTS, CITY MANAGER REPORT 6.1 ID 23-3814 Fiscal Year 2022-23 2nd and 3rd Quarter Contracted Agency Reports (Chief Stirling) Mayor Sheehy advised that this item was for informational purposes only. 6.2 ID 23-3825 Announce Vacancies on Lake Havasu City Boards, Committees, and Commissions (Kelly Williams) City Clerk Kelly Williams announced the current and upcoming vacancies on various Lake Havasu City Boards, Committees, and Commissions. She said applications are available at City Hall and on the City’s website at www.lhcaz.gov. 6.3 ID 23-3826 City Manager’s Report (Jess Knudson) City Manager Jess Knudson reported on the following: • Announced various ceremonies, events, and proclamations. • Acknowledged the retirement of Maria Hart, Development Services Department, with 23 years of service. • Project updates: o The Airport Runaway Rehabilitation Project has been completed ahead of schedule. Lake Havasu City Page 2 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 o The SARA Park Trail Sign Project is underway with installation of signs and trail markers. o The 9-1-1 Dispatch Center emergency push buttons have been installed outside the city’s fire stations. 7. PUBLIC HEARINGS 7.1 ID 23-3806 Approve City Attorney Employment Contract with Kelly Garry (Bobbie J. Kimelton) Human Resources Director Bobbie Kimelton advised that this item is the approval of the City Attorney Employment Contract with Kelly Garry based upon the satisfactory evaluation from the City Council on her performance appraisal. She said the contract’s term will commence on June 24, 2023, and continue in effect until terminated, and added that the requirements for the contract are based on a market analysis and the distance from a market rate that the city would have for anyone else serving in the City Attorney position. Mayor Sheehy opened the public hearing. Ms. Dina Lutz, citizen, addressed the council regarding her observations and concerns on the policies of the Lake Havasu City Council and City Attorney. Mr. Gregory Logan, citizen, addressed the council and asked if the wage analysis was conducted by a local company, to which Ms. Kimelton said the analysis was conducted by the city’s Human Resources Department. Mr. Logan said he disagreed with the wages. There being no further comments, Mayor Sheehy closed the public hearing. Vice Mayor Lane moved to approve the City Attorney Contract commencing June 24, 2023, until terminated with Kelly Garry, seconded by Councilmember Coke, and carried by the following vote: Aye: 4 - Mayor Sheehy, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Nay: 2 - Councilmember Campbell and Councilmember Lin Absent: 1 - Councilmember Dolan 7.2 ID 23-3803 Approve City Manager Employment Contract with Jess Knudson (Bobbie J. Kimelton) Ms. Kimelton advised that this item is the approval of the City Manager Employment Contract with Jess Knudson based upon a satisfactory evaluation from the City Council on his performance appraisal. She said the City Manager is the chief administrative Lake Havasu City Page 3 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 officer of the city and added that the terms of the contract would commence on June 24, 2023, and continue in effect until terminated. Mayor Sheehy opened the public hearing. Mr. Ted Boyd, citizen, addressed the council concerning the annual salary that was being proposed in the City Manager’s contract. Mr. Don Wisdom, citizen, addressed the council concerning the City Manager’s satisfactory performance rating. Mr. David Diaz, citizen, addressed the council and asked why the term of the contract is no longer two years. Mayor Sheehy explained that the contracts for the City Attorney and City Manager outline the details and payment program, which is similar to all other city employees, but still contains provisions regarding termination for any reason. He said the contract before them is the most common type of employment contract and is used by many other cities and towns throughout Arizona. There being no further comments, Mayor Sheehy closed the public hearing. Councilmember Campbell expressed her concern with the term of the contracts changing. She said she would also like to the contracts to be based on performance. Vice Mayor Lane explained the changes to the term of the contracts and said the pay increases are based on their positions and performance as well as the comparable market cities as outlined in the City Code. Vice Mayor Lane moved to approve the City Manager Contract commencing June 24, 2023, until terminated with Jess Knudson, seconded by Councilmember Coke, and carried by the following vote: Aye: 4 - Mayor Sheehy, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Nay: 2 - Councilmember Campbell and Councilmember Lin Absent: 1 - Councilmember Dolan 7.3 ID 23-3807 Approve City Magistrate Employment Contract with Mitchell Kalauli (Bobbie J. Kimelton) Ms. Kimelton advised that this item is the approval of the City Magistrate Employment Lake Havasu City Page 4 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Contract with Mitchell Kalauli. She said the term of the contract is two years as presecribed by the courts commencing on June 24, 2023, through June 30, 2025. Ms. Kimelton said the City Magistrate’s duties and responsibilities are outlined within the City Code and the comparable market cities were also used to determine a recommendation for salary increase for the City Magistrate. Mayor Sheehy opened the public hearing. Mr. Wisdom addressed the council and said when it comes to the performance evaluation process there is a difference between a “satisfactory” performance and an “excellent” performance and thought the City Magistrate demonstrated an “excellent” performance. Mr. Richard Morgan Braden, citizen, addressed the council and asked if the City Council is required to give the contracted positions a certain percentage in salary adjustment. He thought an 11.5 percent wage increase was too high. Vice Mayor Lane said several years ago the council made a commitment to bring all city employees up to fair market value. Mayor Sheehy said the proposed salary increase of 11.5 percent for the contracted positions includes the step increase (3.5 percent) that all permanent full-time employees received and Cost of Living Adjustment (3 percent), as well as the wage stabilization adjustment (5 percent) as presented in the proposed fiscal year budget. Mr. Robert Fischer, citizen, addressed the council and expressed his concerns regarding the 11.5 percent wage increase and wondered what the value is to the citizens in return. He asked what comparable cities are used in determining market wages. Ms. Kimelton said the market cities, as outlined in the City Code, include the City of Avondale, City of Buckeye, City of Casa Grande, City of Flagstaff, City of Goodyear, City of Marana, City of Maricopa, City of Oro Valley, City of Prescott, and City of Yuma. Ms. Bridget Hagest, citizen, addressed the council in support of the contracts. She said the City Magistrate and other city officials have worked with her classroom over the years to teach her students about the judicial system and practice and it would be a disservice to the community if these valued members were not paid what they are worth. Mr. David Burnett, citizen, addressed the council concening the proposed salary increase for the City Manager and the pass/fail criteria that has been established for the performance evaluations. Lake Havasu City Page 5 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Ms. Bonnie Toy, citizen, addressed the council concerning the proposed salary increase for the City Manager as compared to other cities like Phoenix, Arizona. There being no further comments, Mayor Sheehy closed the public hearing. Councilmember Lin expressed concerns with the proposed 11.5 percent salary increase for the contracted positions when only a 5 percent wage stabilization adjustment was being proposed for all full-time employees in the upcoming budget and no wage increase for part-time employees. She said after further discussions she was told that an increase to cover part-time employees would cost the city around $30,000, which is one of the reasons she could not not support these contracts. Councilmember Campbell was concerned with the proposed 11.5 percent salary increase but said said she could support the City Magistrate contract due to the two-year term length and workload. Vice Mayor Lane moved to approve the City Magistrate Contract commencing June 24, 2023, through June 30, 2025, with Mitchell Kalauli, seconded by Councilmember Coke, and carried by the following vote: Aye: 5 - Mayor Sheehy, Councilmember Campbell, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Nay: 1 - Councilmember Lin Absent: 1 - Councilmember Dolan 7.4 ID 23-3798 Adopt Resolution No. 23-3673 Authorizing the Exchange of a City Owned Parcel Located Between 181 and 161 Paseo Del Sol Avenue for an Adjacent Parcel Located Between 165 and 159 Paseo Del Sol Avenue of Substantially Equal Value (Luke Morris) Planning Division Manager Luke Morris advised that the two properties are located on Paseo Del Sol Avenue. He said the American Legion Post #81 submitted a request to exchange a 2,000 square foot city-owned parcel (Parcel G-1 of Tract 2183) for the abutting 2,000 square foot parcel owned by American Legion Post #81 (Parcel G-2 of Tract 2183). Mr. Morris said the Arizona Revised Statutes allows cities to exchange real property owned by a city for another parcel of real property if it is of equal value and approved by the city council. Mr. Morris added that their letter of intent explains that they will install decorative rock and a 6-foot-wide, ADA compliant, concrete walkway across the new city parcel, connecting the subject property to the swap meet parking areas at no cost to the city. He said they will also pay for all costs associated with the request including, but not limited to, parcel plat creation, site improvements, escrow closing costs, utility abandonment/relocation, etc., and all improvements and abandonments will need to be completed prior to deeds being recorded. Lake Havasu City Page 6 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Mr. Mike White, applicant, addressed the council and thanked the city staff for working with American Legion Post #81 on this parcel of property that is dearly needed. Mayor Sheehy opened the public hearing. There being no comments, he closed the public hearing. Councilmember Coke moved to adopt Resolution No. 23-3673 authorizing the exchange of a City owned parcel located between 181 and 161 Paseo Del Sol Avenue for an adjacent parcel located between 165 and 159 Paseo Del Sol Avenue of substantially equal value, seconded by Vice Mayor Lane, and carried by the following vote: Aye: 6 - Mayor Sheehy, Councilmember Campbell, Councilmember Lin, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Absent: 1 - Councilmember Dolan 7.5 ID 23-3804 Approve Funding Agreement with Go Lake Havasu for Tourism Services on Behalf of the City (Jess Knudson) Mr. Knudson advised that this item is requesting approval of a professional services contract with Go Lake Havasu (GLH) formerly known as the Convention and Visitor’s Bureau. He provided a brief history on the contract and said GLH receives monthly distributions from Lake Havasu City in the amount of $133,333.33 ($1.6 million annually) for specific duties and obligations as outlined in the contact, including: promotion of Lake Havasu City including community, vision, and goals, serve as a primary contact for tourism and promotion of Lake Havasu City, designate and establish and operate a visitor’s center for tourist information, provide the city with quarterly reports, seek grant funding to promote tourism, and perform projects as assigned by the City Council or City Manager that fall under the expertise of GLH. Mr. Knudson added that the term of the agreement is six years with the ability for early termination by either party. Mayor Sheehy spoke on the history of the three-percent bed tax and one-percent restaurant/bar tax that was approved by the people for the collection of taxes for tourism and tourism promotion (75 percent) and economic development (25 percent). He said three years ago the terms of the GLH contract were negotiated from percentage-based to a specific dollar amount ($1.6 million annually) to provide tourism-related services to the community. He said the city today collects approximately $4.4 million in bed tax and restaurant/bar tax – with $2.1 million going to the contracts with GLH and the PED, and approximately $2.2 million going into the General Fund for police, fire, and parks services related to tourism. Lake Havasu City Page 7 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Mr. Terrance Concannon, President and CEO of Go Lake Havasu, addressed the council and highlighted several accomplishments of GLH, including: helping the city and stakeholder businesses see the highest tourism revenue in the city’s history for years 2019 through 2022, being the largest financial contributor to the 50th Anniversary of the London Bridge celebration and driver behind the marketing and media, writing two successful grants totaling $350,000 for additional marketing and holiday enhancements, collaborating with other organizations to bring events like First Fridays and Farmers Market to the community, working with stakeholders to tell the stories of Lake Havasu City as a world-class destination for outdoor adventure, and making Lake Havasu City a great place to live and visit. Councilmember Lin expressed concerns regarding the term of the contract moving to six years. Mayor Sheehy said a six-year contract gives certainty and consistency to an agency and was determined to be a good timeframe for those agreements to be considered by that organization. Councilmember Lin expressed concern with several duties and responsibilities in the contract that GLH has not fulfilled including filing of an annual report, presenting to the City Council during the first quarter of the calendar year, and collaborating with the City Manager on policy development related to tourism including promotional activities, special events, and activites that impact the city. There was discussion regarding the quarterly reports and GLH Board meeting packets. Councilmember Campbell said the city has a review and approval process for special events and wondered why tourism services and promotion could not be brought in-house. Vice Mayor Lane spoke on the GLH contract and changes that were made several years to the funding terms. He added that the GLH Board has been working to align GLH’s goals with the city’s and come up with other revenue sources to promote tourism. Mayor Sheehy said the term of the contract is changing from three years to six years at the request of GLH due to the significant change from formula-funding to a specific dollar amount. Mayor Sheehy opened the public hearing. The following individuals addressed the council in support of the proposed contract with GLH: • Ms. Lisa Krueger, President and CEO, Lake Havasu Area Chamber of Commerce • Ms. Kim Grace Sabow, President and CEO, Arizona Lodging & Tourism Association Lake Havasu City Page 8 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 • Mr. Alex Ross, citizen • Mr. Sam Harrison, citizen • Ms. Heather Petaishiski, GLH Executive Board Chair • Mr. Shawn Lawless, GLH Executive Board Second Vice-Chair • Ms. Janene Samp, GLH Board Member • Mr. Taylor Harrison, citizen • Mr. Dan Roddy, citizen • Ms. Bridget Hagest, citizen The following individuals addressed the council in opposition to the proposed contract with GLH: • Mr. Robert Fischer, citizen • Mr. Richard Morgan Braden, citizen • Mr. Ron Thomas, citizen • Ms. Bonnie Toy, citizen • Mr. David Diaz, citizen There being no further comments, Mayor Sheehy closed the public hearing. Councilmember Campbell spoke on the importance of community outreach and the voice of the people. She said for many years there have been concerns from constitutents and GLH Board members regarding GLH and hopes the concerns will be addressed and the city and GLH can work together for the next six years. Councilmember Lin said GLH does a great job with tourism but expressed her concerns with the duties and responsibilities outlined in the contract that GLH has not fulfilled. Councilmember Campbell spoke on the importance of meeting the needs of the people. She said she would like to see GLH and the city unite to provide more confidence to the community, to which Mr. Concannon agreed and said he looks forward to working strongly with council Vice Mayor Lane moved to approve the Funding Agreement with Go Lake Havasu for tourism services on behalf of the City, seconded by Councilmember Moses, and carried by the following vote: Aye: 5 - Mayor Sheehy, Councilmember Campbell, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Nay: 1 - Councilmember Lin Absent: 1 - Councilmember Dolan 7.6 ID 23-3829 Approve Funding Agreement with the Partnership for Economic Development, Inc., Lake Havasu City Page 9 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 for Attraction, Retention and Expansion of Business on Behalf of the City (Jess Knudson) Mr. Knudson advised that this item is requesting approval of a professional services contract with the Partnership for Economic Development (PED) for attraction, retention and expansion of business on behalf of the city. He provided a brief history on the contract and said the PED receives quarterly distributions from Lake Havasu City in the amount of $125,000 ($500,000 annually) for specific duties and obligations as outlined in the contract, including: business retention, expansion, and workforce development, attend the annual International Council of Shopping Centers (ICSC), maintain and inventory all available properties in Lake Havasu City, seek grants for economic development, and perform special projects as assigned by the City Council or City Manager. Mr. Knudson added that the term of the agreement is six years with the ability for early termination by either party. Mayor Sheehy spoke on the history of the three-percent bed tax and one-percent restaurant/bar tax that was approved by the people for the collection of taxes for tourism and tourism promotion (75 percent) and economic development (25 percent). He said three years ago the terms of the PED contract was negotiated from percentage-based to a specific fee for services contract (annual amount of $500,000) to provide economic development services to the community. He said the city today collects approximately $4.4 million in bed tax and restaurant/bar tax – with $2.1 million going to the contracts with GLH and the PED, and approximately $2.2 million going into the General Fund to offset police, fire, and parks services related to tourism. Mr. James Gray, Director of the Partnership for Economic Development, addressed the council and highlighted three accomplishments of the PED, including: 1) attraction and site selection to help foster and create jobs in Lake Havasu City, 2) Nomadic Co-work and Entrepreneur Center, and 3) collaboration with the city on projects including ALLO Communications and facilitation of the aeronautical land lease request for proposals. Mr. Gray said when it comes to economic development, the funding from the city is one thing, but the partnership means so much more for what they do and allows them to be in a space to talk about Lake Havasu City but also the opportunity of investment for companies that come here. Councilmember Lin asked how the PED determines which investors they will work with, to which Mr. Gray said they do not vet and will work with everyone. Vice Mayor Lane said the PED has come a long way with the reimagining of the mall space, SpeedUTV, and old K-Mart building. He noted some of their successes including F106 (the first co-work location), the Nomadic building, and First Friday events. Lake Havasu City Page 10 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Councilmember Campbell said quite a few years ago when the PED started her family was very involved and invested a lot of money into the community for the Airport Business Center, which has had very little development over the years and no return on investment. She said since then, the PED has built a metal building (Nomadic) in the downtown area which she believes was a big mistake and devalued every building on McCulloch Boulevard. She expressed concerns with spending tax dollars and investments on helping young entrepreneurs into reduced office space and questioned whether the community is receiving a return on investment to continue a contract with the PED. Mayor Sheehy opened the public hearing. The following individual addressed the council in support of the proposed contract with the PED: • Mr. Shawn Lawless, GLH Executive Board Second Vice-Chair The following individual addressed the council in opposition to the proposed contract with PED: • Mr. Robert Fischer, citizen Ms. Toy addressed the council regarding language in the contract about employment of unauthorized aliens. There being no further comments, Mayor Sheehy closed the public hearing. Councilmember Campbell suggested the city consider giving this taxpayer money back to the citizens. Vice Mayor Lane moved to approve the Funding Agreement with the Partnership for Economic Development, Inc., for the attraction, retention and expansion of business on behalf of the City, seconded by Councilmember Moses, and carried by the following vote: Aye: 4 - Mayor Sheehy, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Nay: 2 - Councilmember Campbell and Councilmember Lin Absent: 1 - Councilmember Dolan 7.7 ID 23-3830 Approve Lease Agreement with Havasu Community Health Foundation for Property Located at 1980 North Kiowa Boulevard to Operate a Food Bank (Kelly Garry) City Attorney Kelly Garry advised that the city and the Havasu Community Health Foundation (HCHF) entered into an initial lease agreement for 1980 North Kiowa Lake Havasu City Page 11 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Bouelvard in 2018 for the operation of a food bank. The current lease agreement expires on July 31, 2023, and HCHF has expressed interest in entering into a new lease for this space. The proposed agreement would commence on August 1, 2023, and expire on June 30, 2033, subject to the termination as set forth in the agreement. Ms. Garry said the proposed lease rate is $550 per month, equating to $0.25 per square foot, which is the same lease rate as discussed at the last council meeting. Councilmember Lin expressed concerns with charging non-profits a lease rate for use of city buildings. She asked why the term of this agreement is ten years but the term of the River Cities United Way agreement approved at their last meeting was only three years. Mayor Sheehy said the term was determined based on the request of the organization. Councilmember Lin said from her understanding River Cities United Way was only presented with a three-year term. She said all the organizations work together in unison and all the lease agreements the city has with these non-profits should be fair. Ms. Garry explained the process of applying the same lease rate and the request from HCHF for additional years. Ms. Linda Seaver, Executive Director of HCHF, addressed the council and spoke on the history of how the food bank came to fruitition at this location and the improvements they have made to the building. She said they are proud to make improvements because they have to have some “skin in the game” as someone else could come along and take it from them leaving them with no place to go. She said the Food Bank last month alone served 1,200 families and added that they requested ten years because they are a little different than other non-profits and need the stability. Mayor Sheehy opened the public hearing. There being no comments, he closed the public hearing. Councilmember Coke moved to approve the Lease Agreement with Havasu Community Health Foundation for property located at 1980 North Kiowa Boulevard, seconded by Councilmember Moses, and carried by the following vote: Aye: 6 - Mayor Sheehy, Councilmember Campbell, Councilmember Lin, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Absent: 1 - Councilmember Dolan 7.8 ID 23-3817 Adopt Resolution No. 23-3675 Adopting the Five-Year Capital Improvement Plan (CIP) for Fiscal Years 2024-28 (Jill Olsen) Administrative Services Director Jill Olsen advised that before the council is the adoption of the five-year Capital Improvement Plan (CIP) for Fiscal Years (FY) 2024-28. She Lake Havasu City Page 12 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 outlined two changes in the CIP since the May budget meeting, including: 1) moving the Site 6 Fishing Dock from FY 2028 to FY 2024 ($1,500,000 funding by the State Lake Improvement Fund (SLIF)), and 2) additional $335,680 in SLIF funding for the Site 6 Boat Ramp Replacement Project (100 percent SLIF funded). Ms. Olsen said the five-year CIP totals $161.9 million with $50.7 million in FY 2023-24 and noted that all projects in the five-year CIP are fully funded. Ms. Olsen reviewed the FY 2023-24 CIP projects and totals as follows: • Airport: $4,185,000 o Runway Rehabilitation – Safety Area, Replacement of AWOS System, Runway Strengthening & Overlay, Taxiway C Reconstruction • Drainage: $6,375,000 o Wash Crossing Improvements, Daytona Wash 4, Havasupai Wash 6, Kiowa Drain 3 • General Government: $11,990,825 o Downtown Catalyst/City Park Development, PD Fuel Facility, PW Fuel Facility, Municipal Courthouse, Fire Station 7, PD Parking Lot Rehab, PD Facility & Jail Rehabilitation • Parks: $4,185,680 o Aquatic Center HVAC, Site 6 Boat Ramp, Site 6 Fishing Dock, Island Path Repave • Streets: $10,239,745 o London Bridge Pier, City Core Paving Project, Pavement Replacement Program, Lake Havasu Ave. Paving Project, London Bridge Rd. & Mesquite Paving Project, Lake Havasu Ave. & Palo Verde Blvd. S. Pavement Rehabilitation • Wastewater: $8,195,500 o ITP Flow Equalization Basin, Chip Dr. Lift Station, Vadose Well, MTP Aeration Basin, Park Ave. Lift Station, NRTP Odor Control at Belt Press Room, North End WW System Expansion, Lift Station Upgrade Program, Water Conservation & Reuse Improvements at Cypress Park • Water: $5,522,700 o North Well Field Improvements, Water Main Replacement Program, Booster Station 5A Upgrades, Booster Station 4 Improvements, Horizontal Collector Well Redevelopment Councilmember Lin asked if the proposed five-year CIP, as presented during the budget meetings, still includes projects and funding in “red” or “on-hold”, to which Ms. Olsen replied yes. Lake Havasu City Page 13 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Mayor Sheehy said the city has been deficit spending in the utility rate funds (water and wastewater). He spoke on the utility rate study that was implemented in 2021 and update to the utility rate study that was approved by the City Council in October 2022 to determine a plan to addresss the utility rates. He said because there is no certainty in the proposed budget, there are projects in “red” that are identified as contingency items and will not happen if the city does not do anything different with the current revenue sources. Councilmember Lin said the projects in “red” look like leverage when it comes time for the council to discuss the utility rates and does not want to have to decide between rate increases and projects. Councilmember Campbell said she would not be voting in support of the proposed five-year CIP based on issues and concerns she has with the utility rate study. Vice Mayor Lane spoke on the findings of the utility rate study in 2021 and funding reserves that are currently being used to offset the deficit in water and wastewater revenues. Mayor Sheehy said there is currently $13 million in investments in wastewater and water projects as proposed this next fiscal year. He said the council is talking about a small component with discussion on the city being in the “red”or deficit spending, which the council knew and is not a surprise. He said as part of the utility rate study discussions in 2021, the council wanted the rates to be charged based on the cost to deliver those services and the rate study that was presented to the council identified those things. He spoke on the public hearing and outreach process as part of the utility rate study update that is currently underway. Mayor Sheehy said the projects in “red” are not going to happen if the council does not do something to the revenue source which will be presented to the council as part of the utility rate study update process. Mr. Knudson said revenue projections in the water and wastewater funds forecast that in years five and six the revenues will be in red and the projects identified in “red” highlight that without adjustments in the utility rates, the rate revenues do not match the projects that are needed to sustain the system. Councilmember Campbell asked if debt services could be funded by the General Fund to move many of the projects in “red” forward, to which Mayor Sheehy said he appreciated Councilmember Campbell’s solution; however, his solution would be that the council take the utility rate study update seriously as it comes through. He said the city does not have an excesss of $13 million in the General Fund to transfer to an enteprise fund, as the contingency fund as proposed in the budget is $1 million and noted that it is not sustainable to have enterprise funds be funded by General Fund dollars or other tax Lake Havasu City Page 14 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 revenues. Mayor Sheehy opened the public hearing. There being no comments, he closed the public hearing. Vice Mayor Lane moved to adopt Resolution No. 23-3675 adopting the Five-Year Capital Improvement Plan for the period of July 1, 2023, through June 30, 2028, seconded by Councilmember Moses, and carried by the following vote: Aye: 5 - Mayor Sheehy, Councilmember Campbell, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Nay: 1 - Councilmember Lin Absent: 1 - Councilmember Dolan 7.9 ID 23-3818 Adopt Resolution No. 23-3676 Adopting the Fiscal Year 2023-24 Tentative Budget (Jill Olsen) Ms. Olsen advised that this item is requesting adoption of the FY 2023-24 tentative budget and outlined the following in her presentation: Tentative Budget Adoption • Establishes a cap of $228,632,955 for the annual FY 2023-24 budget • The items within this total amount may be changed or the amount may be reduced for the final budget scheduled for adoption on June 27, 2023 o Total may not be increased • Changes since the May proposed budget session o $300,000 Carryforward for the Channel Dredging Project o $95,000 Wage and Benefits o $10,000 Increase in HAVEN Contract Renewal o Revised Water and Wastewater Revenues Ms. Olsen noted that water and wastewater revenues were revised as a placeholder, which is not indicative of any result of the current utility rate study update, only that staff wanted to make sure that reasonable revenues were included in the budget to offset the allocations that have been included. Ms. Olsen added that the city’s property tax levy rate is remaining the same. She said an increase in assessed valuation of the properties within Lake Havasu City, as assessed by Mohave County, will generate additional revenue in property taxes and new construction. Mayor Sheehy opened the public hearing. Lake Havasu City Page 15 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Ms. Toy addressed the council regarding the public notice concerning the truth in taxation in the newspaper. She said she did not understand why it is proposing an increase in property taxes when the property tax levy rate is remaining the same. Mayor Sheehy explained that the city is not increasing the tax rate but still has to have a truth in taxation hearing because the city will be generating additional revenues in property taxes and new construction due to an increase in assessed valuation by Mohave County. There being no further comments, Mayor Sheehy closed the public hearing. Councilmember Moses moved to adopt Resolution No. 23-3676 adopting the Fiscal Year 2023-24 Tentative Budget, seconded by Councilmember Coke, and carried by the following vote: Aye: 4 - Mayor Sheehy, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Nay: 2 - Councilmember Campbell and Councilmember Lin Absent: 1 - Councilmember Dolan 7.10 ID 23-3776 Adopt Resolution No. 23-3674 Approving a Minor General Plan Amendment Changing the Future Land Use Map of the City’s General Plan for 6600 & 6700 Chenoweth Drive, the South Half of APNs 120-03-043 & 042, from Employment to High Density Residential (Luke Morris) Planning Division Manager Luke Morris said the subject properties total five acres and are located east of Highway 95 on the north side of Chenoweth Drive. They consist of the southern halves of two parcels and are currently vacant and undeveloped. The properties are located within the city’s sewer service area but are within EPCOR Utilities’ (“EPCOR”) water service area. All of the abutting properties are undeveloped. The properties are zoned Agriculture/Preservation (A-P) and Industrial (I), and the abutting propertis are zoned Manufactured Home (RMH), A-P, and I. Mr. Morris reviewed the General Plan map showing the abutting properties to the north and west with a general plan designation of High Density Residential, the property to the south across Chenoweth Drive as Commercial and Low Density Residential, and the property to the east as Employment. Mr. Morris explained that the growth projections and capacity section of the General Plan suggests that changes to the plan may be approved if the proposals are consistent with the other goals and policies within the General Plan. He said within Lake Havasu City’s incorporated area there are currently 2,589 acres designated for Employment use and one could make a strong argument that a city of this size would not anticipate the need for more than 2,500 acres dedicated for employment-industrial type uses. He said coupled with the lack of land dedicated to workforce housing, which is a problem for many cities in Arizona including Lake Havasu City, this proposal asks the Lake Havasu City Page 16 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 city to consider alternating its philosophy regarding housing in this specific area by changing the designation to High Density Residential, paving the way for a rezoning to begin to address a housing shortage. Mr. Morris explained that the requested High Density Residential future land use designation allows primary uses such as single-family residential, townhouses, apartments, as well as manufactured home parks. Mr. Morris said in December 2021, the City Council approved a General Plan Amendment for 39 acres of abutting property from Employment to High Density Residential for development of a manufactured home park. The applicant’s letter of intent asks to amend the city’s General Plan to add the subject five acres to the existing previously approved 39-acre project for a future manufactured home park. He explained that the General Plan Amendment is the first step in the process of developing the property and added that the applicant has also submitted a request to rezone the property (subsequent item) to an appropriate residential zoning district. He added that the Planning & Zoning Commission (“Commission”) heard this request on May 3, 2023, and recommended approval. Councilmember Lin asked how this project impacts the city’s sewer system, to which Mr. Morris said there is capacity in the city’s sewer system for the development of this project. Mr. Knudson said the developer can connect to the city’s existing system to start the project but there would be long-term impacts to the system and the city would have to invest in that area depending on future development of the adjacent properties. He noted that EPCOR has not been a viable option for the property owners in those areas. Mr. Knudson said the conversations that the city has had with the applicant, that were also heard at the last council meeting and will continue as part of the permitting process, is that it is their financial responsibility to pay their fair share towards what is needed for the sewer system in that area. Mayor Sheehy opened the public hearing. Mr. Fisher addressed the council regarding concerns with noise and traffic in this area and thought it was foolish for anyone to develop high density housing under the flight path of the new airport runway. He said developing the property for employment and industrial would be a much better choice. Ms. Kathy Tackett-Hicks, agent for the property owner, addressed the council and said the 39-acres surrounding the property has already been approved and the subject properties would be a part of the same project. She added that the Department of Real Estate also requires disclosure related to airplane traffic on all contracts so any noise would be disclosed to owners. Councilmember Lin said it sounds like if EPCOR is not willing to work with the developers they may not be able to move forward, to which Mayor Sheehy said that is Lake Havasu City Page 17 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 correct. Ms. Tackett-Hicks said the developer is working with EPCOR right now and they are making some progress. She said if EPCOR cannot serve the area the Arizona Corporation Commission allows you to provide your own. She said she does not know what that would look like or how close the development is to the city’s water service area but their options would be greatly limited if EPCOR could not provide water service. There being no further comments, Mayor Sheehy closed the public hearing. Councilmember Moses moved to adopt Resolution No. 23-3674 approving a Minor General Plan Amendment changing the Future Land Use Map of the City’s General Plan for 6600 & 6700 Chenoweth Drive, the south half of APNs 120-03-043 & 042, from Employment to High Density Residential, seconded by Vice Mayor Lane, and carried by the following vote: Aye: 6 - Mayor Sheehy, Councilmember Campbell, Councilmember Lin, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Absent: 1 - Councilmember Dolan 7.11 ID 23-3777 Adopt Ordinance No. 23-1309 Approving a Planned Development Rezone for 6590, 6600, & 6700 Chenoweth Drive and 1800 and 2000 Victoria Farms Road, from Manufactured Home (RMH), Agriculture / Preservation (A-P), and Industrial (I), to Public Lands and Facilities (P-1) to Accommodate a Water Well and Storage and to Manufactured Home/Planned Development (RMH/PD) District to Allow End-To-End Parking Spaces (Luke Morris) Mr. Morris advised that the subject properties total 44.24 acres and are located east of Highway 95 between Chenoweth Drive and Victoria Farms Road. They consist of five separate properties that are currently vacant and undeveloped. The abutting properties to the northwest are home to storage units and the Havasu RV Resort, a small storage yard is developed to the northeast, and the balance of the abutting properties are undeveloped. He said the properties are currently zoned Manufactured Home (RMH), Agriculture/Preservation (A-P), and Industrial (I), and the abutting properties are zoned A-P, Light-Industrial/Planned Development (LI/PD) and I. Mr. Morris said 39-acres were already rezoned for a manufactured home park in December 2021 (outlined in yellow). The applicant proposes to add approximately 5 acres to the 39-acres of previously rezoned property. A water treatment and storage facility is proposed near the northwest corner (outlined in green) as the property is within the EPCOR water service area and the rezoning of this 0.38 acre portion of the development is to Public Land and Facilities (P-1) zoning, which would facilitate EPCOR water utility infrastructure for the project. The applicant’s letter of intent is to add and rezone approximately five acres, 2.5 acres from A-P to RMH/PD and 2.5 acres from I to RMH/PD. He added that the applicant is asking for a PD due to the exception request for end-to-end parking spaces rather than Lake Havasu City Page 18 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 side-by-side parking units for the development. The applicant’s site plan shows 294 manufactured home rental spaces with the main gated entrance proposed from Victoria Farms Road near the southwest corner of the property, with a secondary gated access near the northeast corner, and an emergency access at the south portion of the property. The site plan also includes a clubhouse and other amenities. A traffic impact analysis was reviewed by the Public Works Department in which they found no traffic concerns from the proposed development. He said the analysis was for a five-year forecast that included other potential future developments within the area and it was found that the traffic level of service will remain at an acceptable level. The need for offsite improvements (street widening, curb, gutter, sidewalks) and all other requirements will be provided upon development of the property. The property owner’s engineering team is also working to complete a drainage analysis and preliminary design to accommodate and reduce the impact of floodplain flows across the property. Mr. Morris explained that an internal driveway and drainage channel are proposed to encroach onto the abutting property (shown in red). He said the property owner will enter into and record an access and drainage agreement with the abutting property owner to allow these encroachments. Mr. Morris further explained that the proposed manufactured home development meets all the city’s Development Codes except for the exception request. He explained that manufactured home developments require two parking spaces per unit, and the applicant proposes two spaces per unit but is asking that the spaces be end-to-end spaces rather than side-by-side units. This style of parking is typical in many manufactured home developments but is not specifically allowed in the city’s Development Code. Mr. Morris noted that staff supports the requested exception and the Commission heard this request on May 3, 2023, and recommended approval. Mr. Morris noted that if the council elects not to approve the proposed PD/rezone request, they may want to reconsider the preceding request for a General Plan Amendment. Ms. Tackett-Hicks addressed the council and said this request is similar to the previous approval that is already there and said even with the additional five-acres the overall density for the site is reduced. She said she was surprised that the city’s Development Code did not allow for end-to-end parking and is hopeful that the city will see that it has no adverse impact but just a change in parking configuration on the lots. Ms. Tackett-Hicks said the additional five-acres also gives an outlet to the drainage facility for the floodplain. There was discussion regarding the drainage and roadway easement. Mr. Morris explained that there is a drainage and roadway easement that the property owner will need to acquire from the adjacent property owner. Mayor Sheehy asked if the adjacent property owner was aware and supported this, to which Ms. Tackett-Hicks replied yes. Mayor Sheehy asked if the manufactured homes would be rented or owned, to which Mr. Lake Havasu City Page 19 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Evan Bernstein, Co-Founder of Castle Park Investments, said it would be a typical manufactured home community with rented spaces. He said the total development cost for this project is around $55 million with $30 million in manufactured homes. He said they will be purchasing the homes and hopefully selling the majority of them with some that may be rentals depending on affordability. He noted that they plan to utilize both – own and rent - methods. Mayor Sheehy asked if they had a backup plan if EPCOR could not provide water, to which Mr. Bernstein said they have a backup plan if they cannot provide water, but it is a very lengthy process. He said they are quite far along with EPCOR but have had multiple hiccups which has been stressful and frustrating. He said the system that they are building will encapsulate their entire parcel, essentially building their own well, with some city tie-ins that they are working with into EPCOR’s system. He added that they also have a master utility agreement with EPCOR that is pending with comments back from their first iteration. Councilmember Lin asked if property owners would pay an association fee, to which Mr. Bernstein said there would be a lot rent around $675 per month. Councilmemher Lin asked if they are planning to allow vacation rentals, to which Mr. Bernstein said they are planning to allow vacation rentals but are going to be very congnizant of what that looks like and have specific rules in the community. Councilmember Lin asked what the typical price range would be for the manufactured homes, to which Mr. Bernstein said they own a resort in Bullhead City with homes selling around $65,000 (around 399-square feet), but the typical manufactured in this community would be anywhere between 900 to 1,100-square feet and are targeting around $80,000 on average. He said depending on customizations and specifications it could go up to $120,000. Vice Mayor Lane expressed his concerns with this development allowing vacation rentals and suggested they put something in their Covenants, Conditions, and Restrictions (CC&Rs) to limit or not allow them. He also expressed concerns regarding the two-way stop sign on Victoria Farms Road and Chenoweth Drive and asked if the traffic study included that intersection and if they had any plans to make it a three-way stop. Mr. Scott Kelley, Greenlight Traffic Engineering, addressed the council and said they did a full traffic impact analysis that was approved by the Arizona Department of Transportation (ADOT) for the intersection of Chenoweth Drive and Highway 95. He said the analysis studied the two-way stop control at the Lowe’s driveway and Victoria Farms Road intersection and found that it operates within acceptable ranges even given the additional development; however, they have not looked into a four-way stop but that could be something for future consideration but really the only movement that is going to experience any delay is the northbound left vehicles coming out of the Lowe’s driveway. Mr. Kelley explained that the additional traffic coming southbound to westbound and Lake Havasu City Page 20 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 eastbound to northbound is the heaviest movement; therefore, the northbound left would be competing with all that traffic but there was very minimal impacts. Vice Mayor Lane thought the additional development would create a greater impact on traffic, to which Mr. Kelley said the traffic study included the existing traffic, traffic from the proposed development, as well as four additional (upcoming) developments in the area that were included as background. He said the upcoming developments included self-storage, RV, and boat storage which typically has a very low traffic impact and said, even with this development laid on top, the traffic was operating under acceptable levels. Mr. Morris reviewed the proposed development ingress and egress. Mayor Sheehy asked if the traffic study included a bump-out right turn lane off Victoria Farms Road, to which Mr. Morris said a bump-out right turn lane is needed there and would be looked at more closely during the development of the property. Councilmember Moses asked who would maintain the open space within the development, to which Mr. Bernstein replied that the open space would be maintained by the community owner. Councilmemher Moses asked if the community would have on-site management to address any issues with vacation rentals, to which Mr. Bernstein replied yes. Mayor Sheehy asked if end-to-end parking is common in other manufactured home developments and if any of the existing manufactured home developments within Lake Havasu City have this type of parking, to which Mr. Morris said there may be some in Lake Havasu City that have been grandfathered-in as legal non-conforming; however, the city’s current parking standards does not allow for end-to-end parking. Mayor Sheehy opened the public hearing. Mr. Thomas addressed the council with concerns regarding the two-way intersection at Victoria Farms Road and Chenoweth Drive and wondered if Lowe’s had been contacted and if the intersection was included in the traffic analysis. In response to Mr. Thomas’ question, Mr. Kelley said the intersection was included in the study. There being no further comments, Mayor Sheehy closed the public hearing. Vice Mayor Lane moved to adopt Ordinance No. 23-1309 for a Planned Development Rezone for 6590, 6600, & 6700 Chenoweth Drive and 1800 and 2000 Victoria Farms Road, from Manufactured Home (RMH), Agriculture / Preservation (A-P), and Industrial (I), to Public Lands and Facilities (P-1) to accommodate a Lake Havasu City Page 21 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 water well and storage and to Manufactured Home/Planned Development (RMH/PD) District to allow end-to-end parking spaces, as shown in Exhibit “A,” with the following conditions: 1. The developer shall accept the requirements received from ADOT’s review of the traffic analysis as approved by the City, and 2. The developer shall enter into and record an access and drainage easement agreement with the property owner of abutting APN 120-03-064 to allow the access and drainage encroachments on that property prior to development. Motion was seconded by Councilmember Moses, and carried by the following vote: Aye: 6 - Mayor Sheehy, Councilmember Campbell, Councilmember Lin, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Absent: 1 - Councilmember Dolan 7.12 ID 23-3791 Adopt Ordinance No. 23-1310 Amending the Zoning Classification and District Boundary for 2205 Victoria Farms Road, APN 120-03-045, a 30-acre Portion of Planned Development No. 07-00200005, from Light Industrial/Planned Development District (LI/PD) to Industrial District (I) (Trevor Kearns) City Planner Trevor Kearns addressed the council and advised that access to the subject property is from Chenoweth Drive to Victoria Farms Road. He said the subject property is approximately 30-acres and currently has shipping containers placed on it and includes a large concrete slab that used to be a roller hockey rink. The surrounding properties are largely undeveloped except for outdoor storage and a storage unit complex currently under construction. The properties to the west, north, and south are zoned Light Industrial (LI), the properties to the east are zoned Light Industrial/Planned Development (LI/PD) and Industrial (I), and the property to the southeast is zoned LI/PD. In 2007, the council approved a PD which included 160-acres along Victoria Farms Road for the Pinnacle RV Resort (now known as Havasu RV Resort). The subject property is located within the originally approved Havasu RV Resort and was part of Phase II to include approximately 400 RV lots. Mr. Kearns said the new owners of the subject property request to remove the parcel from the PD and rezone the property to an Industrial designation. To date, 59-acres of the originally approved 120-acre RV Resort PD have been removed form the PD and rezoned to LI or I. The property is currently zoned LI/PD which is not an allowed development outside the approved PD; therefore, the applicant is requesting to rezone the property to Industrial for future use. Mr. Kearns noted that the subject property is served by a private ingress/egress easement and any future development of the property would require the appropriate design review and building permits, and any lot alterations or splits would require review and approval by city staff. Mr. Kearns added that no objections to the request were received from any other reviewing agencies or Lake Havasu City Page 22 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 departments; however, the property owner has been sent a city code violation letter for three different violations: 1) Illegal use of a property, 2) Illegal grading, and 3) Illegal storage containers. He said the proposed rezone request is to fix violation #1 (illegal use of a property) and once corrected/rezoned, they can then work on getting compliance with the other two violations. If the rezone does not get approved, they will have to remove the storage containers and still address the illegal grading. Mr. Kearns said the Commission heard this request on May 3, 2023, and the motion to approve was denied. Mr. Patrick Van Zanen, Sacks Tierney P.A., addressed the council and said he was in attendance on behalf of the applicant, Copper Leaf Holdings, LLC, whose principals wanted to be in attendance but had a prior engagement out of state. He said this matter came before the Commission on May 3, 2023, and the Commission voted not to recommend that the City Council rezone the property as requested by Copper Leaf Holdings, LLC. He said Copper Leaf Holdings, LLC, believes the Commission’s vote was the product primarily of some misleading statements made to the Commission during public comment. The neighboring parcel owner at that meeting stated to the Commission that Copper Leaf Holdings, LLC, had violated the terms of a private grant of easement that is to the benefit of his parcel by placing shipping containers in the easement. He said this is inaccurate as the easement is 60-feet wide and only the eastern 30-feet of that easement benefits and leads to the neighbor’s property and has never been blocked by shipping containers. He noted that the western 30-feet of the easement is for the benefit of and leads to the northwestern portion which is the applicant’s property. The neighboring parcel owner also stated that he cannot get his trucks onto his property due to a gate and no trespassing signs blocking his easement but what he did not tell the Commission is that the gate is never locked and there are cameras installed that show him routinely coming and going as he pleases. Mr. Van Zanen said the gate and no trespassing signs are important due to trespassing, theft, and vandalism in that area. He said in this application they are seeking the same relief from the PD designation that other parcels have already been granted and believe that denying this request based on the private dispute would violate City Code, which prohibits the city from enforcing private agreements through zoning decisions. Mr. Van Zanen said the applicant is requesting that the City Council approve the rezoning, and if rezoned, the applicant intends to provide much needed semi-tractor trailer parking and storage on the property and intends to work with the city on all the permitting needed to move forward. Mayor Sheehy said the staff report lists several code violations on this property and asked if the owners were not aware of them or how did that occur and how can the city trust that Lake Havasu City Page 23 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 it will not continue going forward, to which Mr. Van Zanen said they genuinely did not understand that putting moveable shipping containers would be deemed development or building. He said it was a mistake and everything stopped and they intend to work with the city and staff going forward. Mayor Sheehy asked about the illegal grading violation, to which Mr. Van Zanen said the grading was done to make it level for the shipping containers. He said they do not believe it is significant but it has stopped and will not continue until they work with city staff to get the permits needed. Councilmember Campbell spoke on the history of the property and said after visiting the property they do have some code violations including the illegal grading but what is before the council is a zoning change and nothing more. She said the dispute with the neighboring property is a civil matter. She said communities need areas for a dump and trash which are typically found in industrial open yards without a lot of development. Vice Mayor Lane asked if they were still in code violation today, to which Mr. Kearns said yes. He explained that if the rezone request is approved it will address the illegal use of a property, which will then allow them to work on getting compliance with the other two violations. Vice Mayor Lane said it sounds like the applicant is in violation but is asking for the city to rezone the property so they are not going to be in violation which is not why the city rezones property. Mr. Van Zanen said his clients said it was an honest mistake and they did not understand that putting down shipping containers would be deemed development or building. He said they graded the property to have a level place to set the shipping containers. Councilmember Coke asked if the owners placed the shipping containers there as a business and are charging people, to which Mr. Van Zanen said he did not know if they were doing that right now but that is the intent as well as semi-tractor trailer parking on the property. Councilmember Coke asked if they are running it as a business and charging people, to which Mr. Van Zanen said eventually they will but he did not know if they were charging right now. Councilmember Campbell said the services they are providing are viable and valuable to the community. She said the surrounding properties were removed from the PD and this property should be rezoned to allow for industrial and open storage use. Mr. Van Zanen noted that the PD overlay was not there for a period of time and was not on the city’s GIS mapping system. He said after his client purchased the property they contacted the city regarding the status of the PD and then within a couple of days it suddenly reappeared on the GIS mapping system. He said it is the only parcel with the PD designation and it is unreasonable to deny the rezone over what appears to be the reasons tonight. Lake Havasu City Page 24 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Councilmemher Lin said she was conflicted and asked Mr. Van Zanen if he knew right now whether it is just storage or if they are charging people to put those there, to which Mr. Van Zanen said he knows that they placed the storage containers there but does not know whether they are charging for use of them. Councilmember Lin asked if the two vehicles in the picture are the owners, to which Mr. Van Zanen said they probably are but he does not know if they are charging customers to do anything right there now. Councilmember Coke said she was not concerned with aesthetics but that they were told that this was not the proper use and are now requesting a rezone to allow it claiming that they did not know. She said she agrees that there is a need in the community but you have to do it the right way. She added that the trailers are still there even though they are still in violation and they have not even attempted to move them. Mr. Van Zanen said if the council is not inclined to approve the rezoning could it be tabled to allow them to work with city staff to bring back sooner than six months from now. Mayor Sheehy asked if the shipping containers would be in conformance if the rezone was approved, to which Mr. Kearns said the rezone would remove the PD and would allow the applicant to submit the permits for grading and develop the property to code. Mr. Kearns said under the current PD they are unable to develop the property into anything other than what is allowed under the PD. Mayor Sheehy said the General Plan supports industrial in this area. He said from his perspective he is looking at a zoning issue, with the code violations being a separate discussion, that makes sense as it is supported by the General Plan and the surrounding areas are also industrial. He said he would need assurance from the client that they would work diligently and expediently with the city to bring those code violations into compliance, to which Mr. Van Zanen replied absolutely. Councilmember Moses said he could support industrial going into this area but was disappointed with how this was done as this is not how someone does business. He questioned what the repercussions were when someone does illegal grading and has illegal uses, to which Development Services Director Jeff Thuneman reviewed the code enforcement process. He said this is going to be a challenge for the owners as the property is in a floodplain and they have graded in a floodplain already so they will have to go through some extensive engineering as far as the civil work. He said as far as the storage containers on a commercial property, they can have a non-permitted structure of 120-square feet or less; however, the containers out there are around 8-feet by 24-feet so they are going to need a permit as you can only have one 120-square foot structure, and Lake Havasu City Page 25 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 noted that the city’s fire sprinkler ordinance would also go into effect. He said what they are trying to create is a storage unit complex using shipping containers. He said the building code has provisions for storage containers including structural requirements and drainage requirements which require permitting, engineering, grading, fire sprinklers, offsite improvements, and everything else that a normal development would require. He said he believes they have around 21 shipping containers on site and said, from what staff knows and in talking to people, they are currently renting these shipping containers as storage units so there are people out there that have their personal belongings in them. Mr. Thuneman added that city staff contacted the owners and told them that the current use needed to cease immediately. He said the owners were understanding and the process is moving forward. Mayor Sheehy said based on Mr. Thuneman’s comments, if this is the same business model or plan that the owners are looking to do they may need to reconsider their business plan as it does not look like it will be compliant; however, the rezoning of this property to industrial makes sense and is supported by the General Plan. He said while the business plan might not work as they will have to come into compliance, they would have all of the entitlements that industrial zoned land would allow. Mayor Sheehy opened the public hearing. Mr. John Wooster, citizen, addressed the council regarding the three violations and gate. He said if the city is going to forgive the 20 plus containers that they are renting out now and forgive the grading and other violations then what is next? He said he agrees with industrial use but urged the council to deny the request and have them come back after they have addressed the violations. Mr. Diaz addressed the council and said it was denied at the commission level because the applicant was being dishonest and they should have to rectify the issues and go through the proper process. There being no further comments, Mayor Sheehy closed the public hearing. Mr. Van Zanen said to address the easement issue, a private easement does not prohibit an unlocked gate from being on the property. He said the gate is not a big deal and is there for a good reason; therefore, whatever dispute there might be regarding the easement respectfully should have nothing to do with the rezoning decision. Mayor Sheehy asked what would be the easiest way from the city’s perspective to get this property into compliance, to which Mr. Kearns said removing the PD would be the easiest process and would allow the city to move forward with bringing the property into Lake Havasu City Page 26 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 compliance, but does not guarantee that the current use on the property would be allowed. Councilmember Coke asked if the applicant would have to remove the shipping containers during the process, to which Mr. Kearns said the containers would need to be permitted or removed. Mr. Thuneman added that as part of the code enforcement process and action by council tonight, the use would need to cease immediately and the shipping containers would need to be emptied for staff to determine whether the containers could remain on the property while they are getting their design. He said 21 shipping containers is more than staff would be comfortable with allowing to remain on the property; however, staff could accommodate them as they do with other properties in allowing them to keep one or two containers for their personal storage. He said staff would persue the applicant to remove the containers while they are going through the permitting process. Mayor Sheehy asked Mr. Van Zanen if he could speak on behalf of his clients on their commitment to get this property into compliance, to which Mr. Van Zanen said he could and his clients are absolutely committed to working with council and staff to get the permits and engineering needed to get the property into compliance. Mayor Sheehy said based on the discussion tonight it does not sound like what they are trying to do would be able to happen and asked if they are committed to finding alternative uses within industrial zoning, to which Mr. Van Zanen said absolutely as it is essentially worthless land with the PD overlay. There was discussion regarding the Geographic Information System (GIS) on the city’s website. Vice Mayor Lane questioned the applicant’s commitment when they have not made any progress to remove the containers or come into compliance to date, to which Mr. Van Zanen said his clients are trying to work with the city to come into compliance and be able to use the property as it should be going forward similar to the surrounding areas. He said he does not know if his clients were working with the city to see what action was taken tonight first before emptying the containers but he was not aware that they were not empty. Councilmember Lin asked if the owners had done anything to come into compliance, to which Mr. Van Zanen said he knows that the owners have stopped doing everything that they were doing but cannot tell you specifically if they have emptied any of the containers. Mr. Thuneman said as of today they are still advertising the containers for rent. Lake Havasu City Page 27 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Councilmember Moses said he supports changing the use to industrial and hopes the applicant is able to move forward, but agrees with Vice Mayor Lane that the applicant does not appear to be working with staff and is trying to circumvent city staff. He said he would like to see this come back to council once they have come into compliance. Mayor Sheehy asked if tabling the item would allow the applicant to come back earlier than six months, to which Ms. Garry said yes. She said if the rezone was denied the applicant would have to wait six months. Mr. Thuneman noted that if the item was tabled, the storage containers would need to be removed from the property and the applicant would need to hire a civil engineer to address the grading and floodplain issue and then the item would be brought back to council for consideration. Mayor Sheehy noted that if the item failed, the applicant would have to start the entire process again which is about a six month timeframe. Mr. Thuneman added that if the item was approved, it would allow city staff and code enforcement to work on the issues with the applicant and if they did not come into compliance, it could be a lengthy enforcement and violation process as outlined in the City Code. Mayor Sheehy asked if the third option (approval) is staff’s recommendation, to which Mr. Thuneman replied yes. Councilmember Moses thought tabling the item would be a reasonable compromise. Councilmember Campbell asked if the council could consider tabling the item until the applicant has removed the storage containers and not require them to spend the money on civil engineering for grading until after the PD is removed. Mayor Sheehy noted that tabling the item would be more expedient for the applicant but would require the applicant to come into full compliance, which includes the engineering for the grading. Mr. Thuneman said staff could discuss the floodplain issue with the city’s engineering staff to determine whether they could submit an engineer’s grading statement versus full grading plans. Councilmember Moses moved to table Ordinance No. 23-1310 allowing the applicant to bring all property to code and remove all violations with a statement from a civil engineer to bring back at a future council meeting for consideration on zoning, seconded by Vice Mayor Lane. Mayor Sheehy asked if the council had the option to approve the zoning but add conditions that the zoning does not go into effect until the property comes into compliance, to which Ms. Garry said she would not advise the council to do that as it is not a PD and there is no way to flag the property with conditions without a PD. Lake Havasu City Page 28 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Councilmember Moses moved to table Ordinance No. 23-1310 allowing the applicant to bring all property to code and remove all violations with a statement from a civil engineer to bring back at a future council meeting for consideration on zoning, seconded by Vice Mayor Lane and carried by the following vote: Aye: 5 - Mayor Sheehy, Councilmember Lin, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Nay: 1 - Councilmember Campbell Absent: 1 - Councilmember Dolan 7.13 ID 23-3815 Adopt Resolution No. 23-3677 Approving an Intergovernmental Agreement with the Mohave County Flood Control District for Flood Control Purposes (Mike Wolfe) Assistant City Engineer Mike Wolfe advised that the item before council is approval of an intergovernmental agreement with the Mohave County Flood Control District for the city’s Flood Control Program in the amount of $2,851,349. He said the funding would be used for the construction of Daytona Wash 4, Havasupai Wash 6, Wash Crossing Improvements for El Dorado and Queens Bay at grade crossings, as well as the engineering design and construction team, and city wash maintenance program. Mayor Sheehy opened the public hearing. There being no comments, he closed the public hearing. Councilmember Coke moved to adopt Resolution No. 23-3677 approving the Intergovernmental Agreement with the Mohave County Flood Control District for flood control purposes, seconded by Councilmember Moses, and carried by the following vote: Aye: 6 - Mayor Sheehy, Councilmember Campbell, Councilmember Lin, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Absent: 1 - Councilmember Dolan 7.14 ID 23-3821 Award Bid for the Construction Contract to Pioneer Earthmovers, Inc. for the London Bridge Road Pavement Rehabilitation Project (Mike Wolfe) Mr. Wolfe advised that this item is to award bid to Pioneer Earthmovers, Inc., for the London Bridge Road Pavement Rehabilitation Project in the amount of $1,176,115. Mr. Wolfe reviewed the project location and permit requirements. He said this project was advanced forward in the Priority Array Program due to the Arizona Department of Transportation (ADOT) Safety Striping and Bike Lane Project proposed for implementation in September 2023. This project consists of roto-milling and overlay of approximately 0.8 miles of London Bridge Road from Highway 95 to Palo Verde Boulevard South and replacement of water valve cans and adjustments to sewer manhole Lake Havasu City Page 29 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 rims including all traffic control and temporary striping. He said the contract time is 90 days and city staff will work with the contractor to prepare traffic control plans for review and apply for the ADOT permit with a proposed schedule for coordinating and minimizing the business access closures and detours. Mr. Wolfe said the project is anticipated to be completed in September 2023. Discussion ensued related to the permitting requirements and project completion date. Mayor Sheehy opened the public hearing. There being no comments, he closed the public hearing. Mayor Sheehy noted that staff is recommending award of the base bid without Alternate 1. Mr. Wolfe explained that Alternate 1 included concrete pavement versus asphalt pavement in the S-curve portion of the project; however, due to the increase in cost for concrete pavement, staff is recommending asphalt pavement. Vice Mayor Lane moved to award the Base Bid for the London Bridge Road Pavement Rehabilitation Project be awarded to Pioneer Earthmovers, Inc. in the amount of $1,176,115, seconded by Councilmember Moses, and carried by the following vote: Aye: 5 - Mayor Sheehy, Councilmember Lin, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Absent: 1 - Councilmember Dolan Recused: 1 - Councilmember Campbell 7.15 ID 23-3800 Award Bid to ASR Construction Group, LLC, for Booster Station 5A Improvements (Jarod Thiele) Project Manager Jarod Thiele advised that this item is to award bid to ASR Construction Group, LLC, for Booster Station 5A Improvements Project in the amount of $2,299,921. He said this project was previously included in the CIP as part of prioritized upgrades to the city’s water system and in November 2021 the council awarded an agreement to NCS Engineering for design of the Booster Station 5A Improvements Project. He said the project improvements include new booster pumps with variable frequency drives (VFDs), new valves and piping for the new pump installation, pump controls and instruments, replacement of the existing electrical and SCADA systems with new systems including a new emergency generator and automatic transfer switch (ATS), and replacement of the existing hydropneumatic tank with two new tanks to provide redundancy. Mayor Sheehy opened the public hearing. There being no comments, he closed the public hearing. Lake Havasu City Page 30 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 Councilmember Campbell moved to award the bid for the Booster Station 5A Improvements Project to ASR Construction Group, LLC, in the amount of $2,299,921, seconded by Councilmember Moses, and carried by the following vote: Aye: 6 - Mayor Sheehy, Councilmember Campbell, Councilmember Lin, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Absent: 1 - Councilmember Dolan 7.16 ID 23-3802 Award of Professional Services Agreement to NCS Engineers for Construction Management Services for the Booster Station 5A Improvement Project (Jarold Thiele) Mr. Thiele advised that this item is to award a contract for professional services to NCS Engineers in the amount of $73,820, to assist city staff with construction management of the Booster Station 5A Improvement Project to include submittal review, response to requests for information from the contractor, conduct weekly progress meetings, perform special and code related inspections, and prepare permit application and certificate of completion. Councilmember Moses asked how many bids were received, to which Mr. Thiele explained that with a professional services agreement the city can work directly with a consultant for assistance. Mayor Sheehy opened the public hearing. There being no comments, he closed the public hearing. Councilmember Moses moved to award the Professional Services Agreement to NCS Engineers for Construction Management Services for the Booster Station 5A Improvement Project in the amount of $73,820, seconded by Councilmember Coke, and carried by the following vote: Aye: 6 - Mayor Sheehy, Councilmember Campbell, Councilmember Lin, Councilmember Moses, Councilmember Coke and Vice Mayor Lane Absent: 1 - Councilmember Dolan 8. CALL TO THE PUBLIC Mr. Thomas addressed the council and spoke concerning an increase in crime at the skate park. He requested the city fix the broken emergency button at the skate park and increase police patrol in the area. Ms. Joan Dzuro, citizen, addressed the council and thanked the City Council for supporting the Police Department. Lake Havasu City Page 31 Printed on 7/3/2023 City Council Minutes - Final June 13, 2023 9. CURRENT EVENTS There were no council committee reports. 10. FUTURE MEETINGS Tuesday, June 27, 2023 @ 5:30 p.m. – Regular Meeting (Final Budget Adoption) Tuesday, July 11, 2023 @ 5:30 p.m. – Regular Meeting (Property Tax Levy Adoption) 11. FUTURE DISCUSSION ITEMS There were no requests from council for future discussion items. 12. ADJOURN Upon motion by Vice Mayor Lane and seconded, the meeting adjourned at 10:36 p.m. CERTIFICATION I hereby certify that the foregoing is a full and true copy of the Regular Meeting Minutes of the Lake Havasu City Council held on the 13th day of June, 2023. I further certify that the meeting was duly called and posted, and that a quorum was present. ____________________________________ Kelly Williams, City Clerk/MMC Lake Havasu City Page 32 Printed on 7/3/2023