Lake Havasu City Council adopts tax levy, appoints planning alternate and approves contracts, 6-0

Lake Havasu City Council unanimously approved a slate of fiscal and operational measures Tuesday, adopting the city's fiscal year 2019-20 property tax levies, appointing an alternate to the Planning and Zoning Commission and awarding multiple professional and purchase contracts.

The council acted on a final series of budget-related hearings before adopting the general property tax levy, multiple special-improvement district levies and the irrigation-and-drainage levy. Council also approved routine and planned procurements for water and wastewater equipment, awarded a compensation-study contract and authorized an intergovernmental agreement for water service.

Why it matters: The adopted levy and the equipment and service contracts set the city's near-term revenue and repair/replacement priorities for water and wastewater systems. The compensation study will inform next year's budget decisions about pay and classification. The votes were unanimous, 6-0.

Most important actions (in order of council presentation):

- Property tax levy: The council adopted Resolution Number Nineteen-three332 setting the Lake Havasu City property tax levy rate at $6.6718 per $100 assessed value for fiscal year 2019-20. Finance staff told the council that because assessed valuation increased, the city will collect more revenue even though the rate remained the same.

- Improvement districts and irrigation levy: The council adopted separate resolutions for special districts: Improvement District No. 2 (London Bridge Plaza) at 0.737 per $100 (Resolution Number Nineteen-three333), Improvement District No. 4 (McCulloch median) at 0.504 per $100 (Resolution Number 19-3334), and the Lake Havasu Irrigation and Drainage District levy at $268.85 per acre (Resolution IDD 19-7-1). City staff characterized these as the final step in a multi-step budget and levy process and said the districts are self-funded by assessed property owners.

- Planning and Zoning alternate appointment: By motion, the council adopted the resolution (identified in the agenda as resolution nineteen-three thousand 303 5) appointing Kevin Murphy as an alternate member of the Lake Havasu City Planning and Zoning Commission for a term expiring June 30, 2020.

- Liquor license recommendation: The council moved to recommend that the Arizona Department of Liquor Licenses and Control approve a Series 12 (restaurant) license for Red Baron Wings and Pizza at 125 Paseo Del Sol; staff reported posting requirements were met and no objections received.

- Ordinance introduction for airport fueling: The council introduced Ordinance Number Nineteen-Twelve 19 to amend city code section 11.08.718 (fueling and defueling) to allow certain "hot fueling" operations (fueling while engines/APUs run). Damon Anderson, airport supervisor, told council he had consulted other airports and received requests from FBOs and some military operators seeking to continue hot refueling operations. The council voted to introduce the ordinance (motion passed 6-0); subsequent hearings or adoption steps will be required before the code change is effective.

- Compensation and classification study: The council awarded a professional services contract to Baker Tilly Virchow Kraus LLP to begin a positional analysis and compensation study. Staff said the city's last comprehensive study was in 2007 and that this study is timed to provide recommendations in time for the next budget cycle (staff expects final recommendations to the city manager late in the calendar year, with follow-up work on a performance-evaluation system to continue into early 2020). The motion authorized the city manager to execute the contract and take actions consistent with carrying out the work.

- Water/wastewater procurements and agreements: The council approved several renewals and awards tied to the city's utility operations: renewal of a cooperative purchase agreement with Hennessy Mechanical Sales LLC for large pumps and related services (annual purchases include items priced near $98,000 in individual cases); renewal with James Cook & Hobson Inc. for wastewater pumps and parts (examples cited: a 250-hp pump priced about $110,000 and a roughly $50,000 drive/pump purchase); award of an agreement to Evoqua Water Technologies LLC for odor-control chemicals for the wastewater odor control program; and approval of an intergovernmental agreement with Horizon 6 Improvement District (Mohave County acting as board of directors) to continue water-service arrangements the city has managed for about 20 years.

Votes at a glance (each motion carried 6-0 unless noted): - Accept consent agenda as presented — carried 6-0. - Adopt resolution appointing Kevin Murphy as alternate to Planning and Zoning Commission (term to 06/30/2020) — carried 6-0. - Recommend approval of Series 12 restaurant liquor license for Red Baron Wings and Pizza (125 Paseo Del Sol) — carried 6-0. - Adopt Resolution Number Nineteen-three332: property tax levy rate $6.6718 per $100 assessed value for FY2019-20 — carried 6-0. - Adopt Resolution Number Nineteen-three333: Improvement District No. 2 (London Bridge Plaza) levy 0.737 per $100 — carried 6-0. - Adopt Resolution Number 19-3334: Improvement District No. 4 (McCulloch median) levy 0.504 per $100 — carried 6-0. - Adopt Resolution IDD 19-7-1: Irrigation and Drainage District levy $268.85 per acre — carried 6-0. - Introduce Ordinance Number Nineteen-Twelve 19 to amend city code 11.08.718 (fueling/defueling) regarding hot fueling — carried 6-0 (introduction; adoption pending). - Award professional services contract to Baker Tilly Virchow Kraus LLP for positional analysis and compensation study; authorize city manager to execute contract — carried 6-0. - Adopt Resolution Number Nineteen-three331: approve intergovernmental agreement with Horizon 6 Improvement District (Mohave County) for water services; authorize city manager to execute — carried 6-0. - Approve renewal of cooperative purchase agreement and annual expenditures over $50,000 with Hennessy Mechanical Sales LLC (water/wastewater pumps, equipment, parts, services) for a 2-year term — carried 6-0. - Approve renewal of cooperative purchase agreement and annual expenditures over $50,000 with James Cook & Hobson Inc. for wastewater pumps and parts (2-year term) — carried 6-0. - Award agreement to Evoqua Water Technologies LLC for odor-control chemicals for the wastewater odor-control program — carried 6-0.

Context and clarifications noted at the meeting: Finance staff said the general levy rate stays the same but assessed valuation rose, producing increased revenue. Staff repeatedly told the council that the procurements before them were planned in the approved budget and that single-line items exceeding $50,000 require council action under the city's purchasing rules. Public-works staff explained select pump costs and supply-chain lead times: examples cited included individual pumps priced near $98,000 and $110,000, multi-month lead times for pumps manufactured overseas and a corrected FY 2018-19 expenditure total of $212,178.55 for a vendor where late deliveries arrived June 30. Public-works staff said factory rebuilds now carry longer warranties and that typical in-service life targeted for pumps is about five to seven years.

What's next: Several measures (the introduced ordinance and some procurement contracts) may require subsequent administrative steps. The compensation study will deliver recommendations ahead of next fall's budget decisions, per staff. The council's next regular meeting is scheduled for July 23, 2019 at 6 p.m.

Ending: All recorded motions listed above passed by unanimous vote where recorded; the council did not receive public comment on the items during the hearings held at the meeting.