City Council

MURFREESBORO CITY COUNCIL Regular Meeting Agenda December 12, 2018 11:30 a.m. Council Chambers New Business 1. Murfreesboro Airport Terminal Project. 2. Solid Waste Collection Design Primer and Solid Waste Fee Pro Forma Review. 3. 2019 CIP. Other Business Adjournment  COUNCIL COMMUNICATION Meeting Date: 12/12/2018 Item Title: Murfreesboro Airport Terminal Project Department: Airport Presented by: Chad Gehrke, Airport Manager Summary Update of the progress on the new Terminal Project at the Airport. Background Information On 11/21/2018, the City Manager sent an email to Council correctly stating that the current building has outlived its usefulness and does not present Murfreesboro properly to visitors arriving to the City via air. A new terminal has been budget and design worked was started consistent with the Airport Commission’s selection of Michael Baker International to design the building. Unfortunately, that firm’s design was estimated at $9m, far exceeding the budgeted amount. The City was unable to get this firm to propose a suitable redesign and the contract with Michael Baker International was terminated. Earlier this year, Gary Whitaker and Chad Gehrke along with other members of the City Staff began working on a redesign with new budget that reflects a more disciplined CIP philosophy. Mr. Whitaker recommended and led a design-build program that facilitated the use of pre-engineered building design, a design that is highly suitable to the type of facility most beneficial to the Murfreesboro Airport. The City’s Public Building Authority (PBA) was activated to assist with a qualification- based selection process. Ten firms responded to the initial request for qualifications and this group was narrowed to two design-build teams. The two teams competed for this project by submitting designs with a construction budget meeting a definitive amount for construction of $4.5m. Both teams submitted excellent designs. The PBA selected the design presented by the team of Smith Design Build (Murfreesboro) and Lowen+Associates (Nashville). This design proposes a 15,200 sq. ft. terminal building (the current building is approximately 4,000 sq ft), with a large main lobby, ground and elevated observation areas, lounge seating, leasable office space (2,000 sq. ft.), leasable business center, conference room space, a comfortable pilot’s lounge, and suitable office space for the airport staff. Most importantly, the project is projected to be completed within the full $5m budget (construction costs + furnishings and equipment). Council Priorities Served: Strong and Sustainable Financial and Economic Health The method by which this facility is being acquired provides the City more control of C_8-16-2018_Airport_Airport Manager_ 2019 TN Airport Maintenance Grant.docx the building process from a budgetary standpoint. The facility itself will be very efficient and built with sustainability in mind. Excellent Services with a Focus on Customer Service Customer service is improved with the addition of this new Terminal, which will serve as the City’s front door to the aviation community that is truly reflective of the City. The new facility will tremendously enhance our ability to provide excellent service to the flying and non-flying public. This new facility will also better represent our great community to whomever passes through its doors. Fiscal Impacts By utilizing the Design-Build method, the new proposed facility is projected to be within the amount budget. Operational Issues Operational concerns during the construction process will be addressed in the construction contract. The contractor has, for example, agreed to provide temporary office space for the Airport Staff and airport tenant during construction. 2  COUNCIL COMMUNICATION Meeting Date: 12/12/18 Item Title: Solid Waste Collection Design Primer and Solid Waste Fee Pro Forma Review Department: Utility Enterprises Presented by: Darren Gore Summary Staff has prepared information to review at the Council’s workshop regarding: 1. Potential solid waste design guidelines to determine when single-family attached developments qualify for City of Murfreesboro solid waste curbside collection services 2. A 15-yr pro forma estimating future revenue requirements for solid waste services and associated rate design to support future City solid waste collection and disposal services. Background Information City Council has approved a $5 per month per cart fee for curbside collection and disposal of municipal solid waste. Staff has worked with the Murfreesboro Water Resources Department (MWRD) and Consolidated Utility District of Rutherford County (CUD) to start billing this monthly fee to residents receiving curbside solid waste collection services starting January 1, 2019. CUD is mailing postcards notifying City residents within their water service area that the fees are forthcoming and MWRD is inserting a notification in our water customers monthly bill that the solid waste fee will be on their January statements. A Frequently Asked Questions (FAQ) has been developed to aid customer service representatives in all Departments as well as CUD to handle customers calls or concerns. The FAQ will be posted on the City’s website on the Solid Waste Department’s front page. A 5”x7” sticker is being placed on all solid waste carts that provide the phone number to call if there are any service delivery issues or questions regarding the fee. The pro forma that is being presented covers the operating costs associated with the Solid Waste Department’s preexisting activities, which include curbside solid waste collection and disposal, operating the mulching facility on Florence Road and curbside collection and disposal of limb and brush. Curbside pickup of recyclable materials is a different business model that may be reviewed and explored in the future but is not part of the presentation or pro forma that has been developed. That does not prevent discussion of recycling at the workshop. Council Priorities Served Safe and Livable Neighborhoods Provides proper public health safeguards through collection and disposal services to pick up and dispose of municipal solid waste. Strong and Sustainable Financial and Economic Health Initiates a fair and equitable user fee to cover the cost to serve citizens with solid waste collection and disposal. Excellent Services with a Focus on Customer Service Provides an efficient and convenient curbside service currently and proactively plans for the most beneficial and affordable solution for Murfreesboro citizens given the future closure of Middle Point landfill. Fiscal Impacts Initiating billing of the solid waste fee of $5 per month per cart is anticipated to generate approximately $1,050,000 in total through the 3rd and 4th quarter of FY19. That covers approximately 20% of the total FY19 expenses associated with the Solid Waste Department services. Attachments: 1. Frequently Asked Questions (FAQ) for Solid Waste Billing 2 FAQ FOR SOLID WASTE BILLING Why is this charge appearing on my water bill? Placing the solid waste fee on your water bill is the most efficient and least expensive method to charge residential properties for solid waste services. Consolidated Utility District (CUD) is also placing solid waste fees on their water customer billing for customers who are Murfreesboro residences and receive solid waste services. What if the charge doesn’t appear on my bill? The fee won’t apply to all MWRD and CUD customers. It will only apply to residential or commercial customers who receive solid waste services inside the City. How was $5 chosen as the amount? The City wanted to keep the fee as low as possible while still collecting a per‐month, per‐container charge. In fact, $5 does not fully recover the costs involved in operating City Solid Waste Services. At some point in the future, the City will have to raise the fee to cover increasing operations and transportation costs. Why is Murfreesboro billing for solid waste collection and disposal? Solid waste collection and disposal is a utility service that is optimally billed through a user fee. The City has used tax revenue to fund this service to date; however, the service is primarily for residential single‐family units. Using tax revenue from all property taxes (i.e., commercial and industrial properties) creates an inequitable subsidization of a service that they are not afforded by the City. Why is Murfreesboro choosing to bill for solid waste collection and disposal services as a utility and charging a “user fee” now? Elected commissioners opted to keep the Middle Point Landfill at its current size and not expand it. That means we must look ahead to the eventual closure of that landfill – which is expected in less than 7 years. When the landfill does close, the City will begin shipping waste out of the county and will be charged a disposal fee (i.e., “tipping fee”) at another landfill. The increased expenses require revenue that is ideally generated through a user fee. A user fee charges the individual property using the service fairly and equitably. The City was only able to cover solid waste services through property taxes to date because they were not charged “tipping fees” at Middle Point Landfill. What if I want to find my own garbage pickup company? The City of Murfreesboro will determine who qualifies to receive City solid waste collection and disposal services. Single family residential units that do not have physical constraints prohibiting the City from picking up their garbage will be required to use City services. Having the City manage pickup actually makes things easier on our customers in a couple of important ways …   This method reduces the number of trucks on the road servicing waste pickup. Each solid waste garbage produces 20 times the same carbon emissions as the average U.S. home.  For example, only one truck will be used to pick‐up an entire subdivisions’ trash versus 3 or 4 trucks picking up only a portion of the subdivision.  The $5 fee is a fraction of the typical cost of solid waste pickup. Where will the garbage be taken? We’re looking at areas far from Rutherford County. The most likely sites right now are Camden, Tenn. (roughly 110 miles away) and Huntsville, Ala.  COUNCIL COMMUNICATION Meeting Date: Item Title: FY 2019 CIP and Borrowing Department: Budget Presented by: Erin Tucker, Budget Director Summary Final review of the recommended debt program for the 2019 CIP. Background Information Financing Structure In the past, the City has taken advantage of historically low interest rates and favorable bond market conditions to issue bonds in the public market. While that financing option remains viable, current factors indicate that a direct bank loan option may offer a less expensive financing option by avoiding the significant issuance costs associated with selling municipal bonds. Additionally, a borrowing through private placement with a bank may offer additional financing flexibility. Therefore, the City will be disseminating an RFP for lending services while continuing to prepare for a debt issuance. That RFP is Attachment 1 to this memo. If bank proposals are less beneficial relative to the bond market, the City will utilize the municipal bonds for its borrowing needs. Cumberland Securities will manage either process, just as they have our past bond issues. 2019 Capital Improvement Plan At the September 12, 2018 City Council workshop, the City Council approved $59,247,000 in the 2019 CIP. Subsequent to that meeting, staff identified $6.3 million in previously unspent and unallocated bond proceeds that could be used for projects listed in the 2019 CIP borrowing. Additionally, cost estimates of several CIP projects have been carefully reviewed as well as the overall benefits projects will provide to the community. The following are recommendations for adjustments to the 2019 CIP, which in total lowers the anticipated borrowing by $1,247,000 for a total issuance of $58,000,000. The recommended changes presented in Attachment 2, which can be summarized as follows: 1. ADA renovations decreased from $300,000 to $268,700 - approximately $31,300 decrease. The difference is funded with previous bond proceeds. 2. Street construction of $1,435,000 has been added to provide for paving of the former UED maintenance area and to construct a Public Works South annex to house street sweeper debris and a better central location for the City’s salt supply. Some of this work is done pursuant to a TDEQ mandate regarding environmental issues. 3. An additional $1.1 million has been submitted for construction of Fire Station 11 (Blaze & Fortress) and staff also recommends transferring the $500,000 in funds allocated for Fire Station 3 reconstruction to Fire Station 11 construction. Previously, $2,7 million was borrowed for Station 11 construction. With the current transfers, $4.2 million. Construction of Station 11 is the Department’s primary priority. 4. Doug Young Public Safety Training Facility was originally funded in the 2019 CIP at $3 million. This amount is increased by approximately $1.3 million for additional classrooms and Fire and Rescue office space, which once constructed will free land for economic development. 5. Police marked and unmarked vehicles are moved from the 2019 CIP – a decrease of $2.2 million—to be covered by previous bond proceeds. 6. School construction is increased by $1.1 million to cover the costs of furniture, fixtures and equipment. 7. Solid Waste equipment of $540,000 was moved from the 2019 CIP to previous bond proceeds. 8. It is recommended that $200,000 be allocated to the design of a Gateway Extension to Robert Rose Drive, which will relieve traffic conditions at Medical Center and Thompson Lane intersection. 9. The amount of $300,000 for design of pedestrian improvements on Racquet Club Drive was removed. The 2040 Major Thoroughfare plan dictates that Gateway Blvd and Rutherford Blvd bridge projects are more pressing and will offer a significantly more benefit to the community. 10. Added is $500,000 for design of a new bridge over I-24 for the Rutherford Blvd Extension to Rutledge Way and Warrior Drive as proposed in the 2040 Major Thoroughfare Plan. 11. Jones Blvd has been removed from the 2019 CIP. Previous borrowings total $2,850,000 and an additional $1 million of the 2018 bond premium proceeds is available for this project. This amount will cover the engineering and the first construction phase for Jones. Phase 1 of the project will improve pedestrian connectivity from the heaviest users (Mitchell Nielson schools) to the commercial area. 12. For the Mercury Blvd project, $350,000 is allocated from previous borrowings of unallocated funds to cover the first phase of construction and engineering for Phase 2. The initial borrowing covered the design of Phase 1 and this reallocation will cover the City’s portion of construction of Phase 1 and begin design of the recent grant award for Phase 2. 13. Design for the Sulphur Springs connector for Thompson Lane to Cherry Lane of $350,000 was removed from the 2019 CIP. Staff anticipates this to be in a future CIP. The Caroline Farms connector remains in 2019 because that development is moving forward. 2 Attachment 3 is a final 2019 CIP Statement. It projects Total Estimated Projects Costs, Previous Allocated Funds, 2019 CIP Funds, and Future Funding Requirements. The Total Estimated Project Costs will be updated to reflect adjustments in the estimated costs. Attachment 4 reflects the City Projected Debt vs. Debt Policy. Lastly, Attachment 5 is a chart showing the Total combined Outstanding Debt Service for the General Fund. Attachments: 1. Request for Proposals 2. 2019 Capital Improvement Plan 3. 2019 CIP Statement 4 Projected Debt vs. Debt Policy Chart 5. Chart of Total Combined Outstanding Debt Service 3 Date: December 13, 2018 To: Underwriters, Banks and Letter of Credit Providers From: City of Murfreesboro, Tennessee RE: Request for Proposals The City of Murfreesboro, Tennessee (the “City”) invites you to participate in the Request for Proposal (“RFP”) process to provide a Letter of Credit (“LOC”), or a fixed or variable rate Bank Loan (“Bank Loan”). The City is looking to receive bids for a LOC or Bank Loan for the purpose of issuing up to $58 million (the “Proposed Debt”) to finance various capital projects of the City. The Proposed Debt shall be payable from unlimited ad valorem taxes to be levied on all taxable property within the City. This letter and supporting credit package provide a brief overview of the City, its financial position, the overall RFP process, timing, and an outline for submission for a LOC or Bank Loan. The City would like to receive a proposal that details the individual amounts that could be committed to each financing instrument (LOC or a Bank Loan). The City is seeking a proposal from a prospective bank, or syndicate of banks. A respondent for a syndicate will be expected to manage all aspects of the transaction on behalf of the syndicate. Proposal Requirements and Submission: Based on the City’s financing needs as outlined in the attached credit package, please provide a term sheet(s) for one or more of the following alternatives:  Direct-pay Letter of Credit Facility  Bank Loan (Fixed or Variable Rate) The proposal should specify either a total commitment amount that can be allotted between these products or specific committed amounts for each facility offered. Proposals with provisions that are consistent with those outlined in S&P’s report titled “Standby Bond Purchase Agreement Automatic Termination Events” which was published on April 11, 2008 will be given preference in order for the City to maintain its credit profile. To simplify the selection process, we have enclosed a format for your proposal. Please adhere to the format provided so that the comparisons between firms can be accomplished on a consistent basis. To assist you in preparing your proposal, we have provided the following: – Exhibit A – Blank Term Sheet – Exhibit B – Continuing Disclosure Document – FY 2017 – Exhibit C – Three years of audited financial statements (FY 2015 – FY 2017) – Exhibit D – Recent Rating Reports – Exhibit E – Outline of the City’s Debt – Exhibit F – Proposed Amortization schedule for the debt – Exhibit G – S&P Report on Automatic Termination Events Please e-mail the electronic version of your proposal with appropriate contact name and information, to be received no later than Thursday, January 10, 2019, at 5:00pm Eastern, to the following:  Chris Bessler – Chris.Bessler@CumberlandSecurities.com John Werner – John.Werner@CumberlandSecurities.com Fees & Expenses: Proposals should contain all fees and expenses. The City will not be liable for any fees or expenses not provided in the proposal. Proposal Expiration: Term sheet proposals are expected to be valid through April 15, 2019, unless a later expiration date is agreed upon by all relevant parties. Confidentiality: By agreeing to participate in the RFP process, we respectfully request that: 1. All questions and discussion on this request for proposal shall be directed through our municipal advisor, Cumberland Securities Company, Inc. If you have any questions, please contact Chris Bessler with Cumberland Securities at (865) 986-2663 or Chris.Bessler@CumberlandSecurities.com; 2. No contact be made with the City’s management, employees, and/or City Commissioners without the approval of Cumberland Securities Company, Inc., the City’s Municipal Advisor, and 3. The enclosed information and this process should be held in the strictest confidence. Failure to observe the conditions noted above could result in immediate disqualification from consideration. If you are unable to agree to the above conditions, please return this proposal and the enclosed information promptly to our attention. The City respectfully retains the right to terminate discussions with any or all the parties participating in this process at any time and without reason. The City is under no obligation to accept any proposal. As noted above, all questions and discussion on this request for proposal shall be directed through our municipal advisor, Cumberland Securities Company, Inc. If you have any questions, please contact Chris Bessler with Cumberland Securities at (865) 988-2663 or Chris.Bessler@CumberlandSecurities.com. We look forward to receiving your proposals. Sincerely, Craig Tindell City Manager City of Murfreesboro, Tennessee  2019 CIP ALLOCATION WORKSHEET Council Direction Use of Previous Proposed 2019 Department Project Expense Proceeds Bond Issue Expense Administration ADA Renovations 300,000 31,300 268,700 Historic Bottoms/Highland Redevelopment 1,000,000 1,000,000 Airport Airport South Apron Development 2,000,000 2,000,000 Airport Terminal 1,000,000 1,000,000 Street Paving 35,000 Public Works South Annex 1,400,000 Equipment 727,000 727,000 Fire and Rescue Air Packs 800,000 800,000 Fire Station 11 1,800,000 Fire Engine 10 1,200,000 1,200,000 Fire Station 3 Reconstruction 500,000 Police Doug Young Public Safety Training Center 3,000,000 4,299,100 Police Information Technology Replacements 400,000 400,000 Police Public Safety Software 50,000 50,000 Police Vehicles Marked 1,800,000 1,800,000 ‐ Police Vehicles Unmarked 400,000 400,000 ‐ Recreation Parks Cannonsburgh 420,000 420,000 Parks Greenway North Connector 300,000 300,000 Parks Greenway Phase Four 3,000,000 3,000,000 Parks Greenway Reconstruction 100,000 100,000 Parks Jordan Farm Soccer Complex‐Restroom 350,000 350,000 Parks McKnight Park Renovations 200,000 200,000 Parks Oakland 80,000 80,000 Schools St Andrews 28,000,000 5,299,788 29,100,200 Solid Waste Equipment 540,000 540,000 ‐  2019 CIP ALLOCATION WORKSHEET Council Direction Use of Previous Proposed 2019 Department Project Expense Proceeds Bond Issue Expense Transit Transit Center 220,000 220,000 Transportation Brinkley Road Reconstruction 2,000,000 2,000,000 Caroline Farms 500,000 500,000 Gateway Extension to Robert Rose 200,000 Jones Boulevard Improvements 5,000,000 1,000,000 Mercury Boulevard Sidewalks 160,000 350,000 Racquet Club Drive 300,000 Robert Rose 100,000 1,600,000 Rucker Lane Reconstruction 4,450,000 4,450,000 Rutherford Blvd Extension 500,000 Sulphur Springs Rd. Phase 1 350,000 $ 59,247,000 $ 9,421,088 $ 58,000,000  2019 CIP ALLOCATION WORKSHEET Proposed 2019 Bond Cost Estimates Previous Debt Issue Future Department Project Total Project Proceeds Expense Proceeds Administration ADA Renovations 1,400,000 200,000 268,700 931,300 Historic Bottoms/Highland Redevelopment 1,000,000 1,000,000 ‐ Airport Airport South Apron Development 5,000,000 2,000,000 3,000,000 Airport Terminal 5,350,000 4,350,000 1,000,000 ‐ Subtotal Airport Street Paving 35,000 35,000 ‐ Public Works South Annex 1,400,000 1,400,000 ‐ Equipment 727,000 727,000 ‐ Fire and Rescue Air Packs 800,000 800,000 ‐ Fire Station 11 4,500,000 2,700,000 1,800,000 ‐ Fire Engine 10 1,200,000 1,200,000 ‐ Police Doug Young Public Safety Training Center 10,700,000 3,800,000 4,299,100 2,600,900 Police Information Technology Replacements 400,000 400,000 ‐ Police Public Safety Software 50,000 50,000 ‐ Recreation Parks Cannonsburgh 860,000 420,000 440,000 Parks Greenway North Connector 2,920,000 300,000 2,620,000 Parks Greenway Phase Four 4,738,636 1,738,636 3,000,000 ‐ Parks Greenway Reconstruction 720,000 320,000 100,000 300,000 Parks Jordan Farm Soccer Complex‐Restroom 6,120,000 5,770,000 350,000 ‐ Parks McKnight Park Renovations 2,608,700 2,058,700 200,000 350,000 Parks Oakland 80,000 80,000 ‐ Schools St Andrews 34,400,000 5,299,800 29,100,200 ‐ Transit Transit Center 2,004,840 904,840 220,000 880,000 Transportation Brinkley Road Reconstruction 11,853,500 853,500 2,000,000 9,000,000 Caroline Farms 4,500,000 500,000 4,000,000 Gateway Extension to Robert Rose ‐ design 3,800,000 200,000 3,600,000 Robert Rose 1,600,000 1,600,000 ‐ Rucker Lane Reconstruction 13,947,100 3,997,100 4,450,000 5,500,000 Rutherford Blvd Extension 25,000,000 500,000 24,500,000 Total $ 147,714,776 $ 31,992,576 $ 58,000,000 $ 57,722,200  Projected Debt vs Debt Policy 700 Millions 650 600 550 500 450 400 350 300 250 200 2019 2020 2021 2022 2023 Total Debt 302,818,747 271,115,831 288,636,438 308,839,101 315,884,520 Policy 1 605,223,210 620,353,790 635,862,635 651,759,201 668,053,181 Policy 2 366,505,720 373,835,834 381,312,551 388,938,802 396,717,578 Policy 3(a) 319,550,400 329,136,912 339,011,019 349,181,350 359,656,790 Policy 3(b) 354,567,200 365,204,216 376,160,342 387,445,153 399,068,507