September 23, 2003 The Board of Commissioners of the City of Lawrence met in regular session at 6:35 p.m., in the City Commission Chambers in City Hall with Mayor Dunfield presiding and members Hack, Highberger, Rundle, and Schauner present. The Rotary Clubs gave a presentation to the City Commission concerning the Rotary Arboretum. CONSENT AGENDA As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to approve City Commission meeting minutes of September 9, 2003 and September 16, 2003. Motion carried unanimously. As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to approve the Grant Review Board meeting minutes of March 10, 2003; the Neighborhood Resources Advisory Committee meeting minutes of April 24, 2002; and the Aviation Advisory Board meeting minutes of July 17, 2003. Motion carried unanimously. As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to approve claims to 505 vendors in the amount of $1,318,693.80 and payroll from September 7, 2003 to September 20, 2003 in the amount of $1,323,977.08. Motion carried unanimously. As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to concur with the recommendation of the Mayor and appoint Verdell Taylor to the Hospital Board, to a term which will expire September 30, 2007 and also appoint Joe Flannery to the Hospital Board, to a term which will expire September 30, 2005. Motion carried unanimously. As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to authorize the City Manager to execute Supplemental Agreement No. 2, with Black & Veatch Consulting Engineers, for additional resident services for the Wastewater Treatment Plant Expansion Project through November 15, 2003, increasing the maximum billing amount by $70,000. Motion carried unanimously. (1) The City Commission reviewed the bids for Riverside Industrial Park Sanitary Sewer Pump Station Project for the Utilities Department. The bids were: BIDDER TOTAL BID AMOUNT Engineer’s Estimate $812,947 Garney Companies $1,050,790 Razorback Contractors $1,219,749 Rose-Lan Contractors $1,206.729 Meadows Construction $1,016.690 Cutting Edge Excavating $1,063.211 As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to waive the Engineer’s estimate and award the bid for the construction of a pump station and sanitary sewers for the Riverside sanitary sewer improvement project to Meadows Construction for $1,016,609. Motion carried unanimously. (2) As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to authorized the City Manager to execute the following change orders for Clinton Phase I Expansion to CAS Construction – deduct $226,882.52; Kaw Lime Residuals Project to CAS Construction – add $144,406.68; and the Lime Residual Force Main Project to Razorback Construction – add $56,622.61. Motion carried unanimously. (3) As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to approve a supplemental construction engineering services contract for the North Michigan project, with KDOT and TranSystems. Motion carried unanimously. (4) As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to set a bid opening date of October 14, 2003 for the Neighborhood Resources Weatherization Project for 45 homes. Motion carried unanimously. (5) As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to place on first reading Ordinance No. 7701, ordering the condemnation of a tract of property, generally located at 827 Garfield Street (Stroda tract) for stormwater improvements for the 13th & Oregon project. Motion carried unanimously. (6) Ordinance No. 7697, ordering the condemnation of real property interests for O’Connell Road Improvement Project (south of East 23rd Street), was read a second time. As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to adopt the ordinance. Aye: Dunfield, Hack, Highberger, Rundle, and Schauner. Nay: None. Motion carried unanimously. (7) Ordinance No. 7696, naming Douglas County East 1600 Road north of the Kansas River as North 11th Street within the corporate limits of the City, was read a second time. As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to adopt the ordinance. Aye: Dunfield, Hack, Highberger, Rundle, and Schauner. Nay: None. Motion carried unanimously. (8) As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to adopt Resolution No. 6485, directing and ordering a public hearing on the advisability of the construction of Folks Road from 6th Street, south approximately 1500 feet to Mulberry. Motion carried unanimously. (9) As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to adopt Resolution No. 6494, setting a public hearing date of November 11, 2003, to discuss the unsafe structure (barn at alley) at 933 Rhode Island and consider adopting a resolution ordering said structure to be removed or repaired within a specific time frame. Motion carried unanimously. (10) As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to adopt Resolution No. 6495, directing and ordering a public hearing on the advisability of the construction of Harvard Road from George Williams Way east approximately 500 feet. Motion carried unanimously. (11) As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to approve the site plan (SP-08-56-03) for Ironwood Court, a proposed 108 dwelling unit apartment complex to be located on approximately 8.7 acres at the southwest corner of West 15th Street and George Williams Way, subject to the following conditions: 1. Per Section 20-1433, approved site plans will have a condition requiring an execution of a signed site plan agreement by the owner of the property (Condition); 2. The following note per Ordinance No. 7542 will need to be shown on the site plan: “All traffic control signs placed on private property open to the general public shall comply with the “Manual on Uniforms Traffic Control Devices” and “Standard Highway Signs,” published by the Federal Highway Administration, with respect to size, shape, color, retroreflectivity and position“ (Revised, Note 1.16); 3. Provide the photometric plan, pursuant to 20-14A01, for exterior lighting referenced in general note 1.15 (Condition); 4. Per Section 20-14A04.8, provide details of any proposed screening walls or fences between this property and the adjacent residential and vacant lot. (No fences proposed); 5. Per Section 20-1437, Any swimming pool in any district shall (b) be so walled or fenced as to prevent uncontrolled access by children from the street or any adjacent property. Please show or provide note describing detail of how swimming pool will be fenced/gated to control access by small children (Revised, fence labeled); 6. Per Section 20-14A04.7, Show or provide note described detail of screening of trash bins (Revised, Note 1.16); 7. For greater landscaping effect, please consider landscaped berms along the street frontage. Effective use of earth berms is encouraged as a component of the landscape plan. (Applicant will look at possible berming); 8. Proposed location(s) of U.S. Mail service cluster boxes should be shown on the plan. (Revised, Mailbox cluster provided); 9. Need to make sure that handicap sidewalk ramps are installed where the sidewalks intersect with curb & gutters throughout project (Revised, Note 1.18); and, 10. Consider if you want to add pedestrian sidewalk connections with the West 15th Street sidewalk or George Williams Way Sidewalk (Applicant’s Agent will discuss with client-Agent does not believe it will be desired). Motion carried unanimously. (12) As part of the consent agenda, it was moved by Rundle, seconded by Highberger, to authorize the Mayor to sign a Community Rating System (CRS) Application for FEMA’s National Flood Insurance Program’s (NFIP) Community Rating System (CRS). Motion carried unanimously. (13) CITY MANAGER’S REPORT During the City Manager’s Report, Mike Wildgen said staff had provided the City Commission with an updated report of the North Lawrence Drainage Study that was requested by the Planning Commission. City staff had interviewed engineering firms and recommended HNTB as the preferred consultant. He noted that a copy of HNTB’s proposed scope of services and associated costs were attached to that report for Commission review. He said concerning the funding of this study, staff suggested looking at the bids on the major bond issue projects for the City. Mayor Dunfield asked about the status of those projects being bid. Wildgen said there were three major projects which were 13th and Oregon; 21st and Massachusetts; and, the Haskell Watershed projects that would be bid in November. Mayor Dunfield asked if within two months, the Commission would have a better picture of whether there were funds available through that route. Wildgen said correct. Vice Mayor Rundle asked if staff could report back to the Commission on whether or not the study could be performed earlier. He asked how long it would take to complete that study. Chuck Soules, Public Works Director, said approximately 12 to 18 months. He said none of the firms that staff interviewed could complete that study any earlier. Vice Mayor Rundle asked for a report from staff to see if there was some way to advance those projects. Wildgen suggested one option could be phasing those projects. He also suggested that another option could be issuing straight General Obligation Bonds and not paying for the projects with the storm sewer fees. (14) REGULAR AGENDA Conduct a public hearing on the proposed annexation of approximately 2.99 acres, generally located on the south side of 31st Street (Denton tract). Mayor Dunfield called a public hearing on the proposed annexation of approximately 2.99 acres, generally located on the south side of 31st Street (Denton tract). David Corliss, Assistant City Manager, presented the staff report for the proposed annexation of the Denton tract. He said the genesis of this project was the City’s annexation policy, Resolution No. 5810, Section 3, which stated: “In areas of the community where City boundaries nearly surround or completely surround unincorporated property parcels, the City shall encourage property owners to consent to annexation. The City may initiate procedures to unilaterally annex these parcels. The policy intent of this requirement is to provide for generally uniform city boundaries avoid confusion over service delivery due to irregular jurisdiction boundaries and avoid unincorporated enclaves of property.” He said City staff had been in communication with the Denton’s for a period of time. Staff had initiated that process in July of this year with the State annexation statues where the Commission adopted a resolution setting this evening as the public hearing date. During that interim period, staff notified the property owner, various utilities and other jurisdictions that were required to be notified. Staff also presented the matter to the Planning Commission which they considered in August and resulted in a unanimous recommendation that this subject tract annexation was appropriate pursuant to the City’s Comprehensive Plan. He said a copy of the letter addressed from Mr. Collister, who was representing the Denton family, addressed the property taxes on their property. He said the property taxes impact was outlined in the service plan. The City mill levy would not be due on this property until November of next year. He had presented the Commission with information about the water and wastewater requirements and City laws provided that the City might require a property to hookup to sanitary sewer service upon a finding that there would be a public health and safety problem with a location. He said that requirement was essentially used when staff found properties where septic systems had failed and public health required connection to the sanitary sewer. Mayor Dunfield asked in the context of that last issue of the wastewater, would the County have a similar regulation in terms of requirements related to public health? Corliss said the County would also have that similar requirement. If a septic system failed and County regulations would not allow for the septic system to be replaced, then they would not allow the septic system to operate in the required type of alternative disposal. In this case, they would probably require that they be hooked up to the City’s sanitary sewer system. Ed Collister, representing the Denton’s, said the real issue was why the City wanted to annex this particular tract. He had advised the Denton’s that the City had the power to do so, but the question was why the City should exercise the power to do so at this point. The Denton’s explained that the City’s explanation was that they were using City services and not paying for those services, which was the genesis for the letter that was written to the City. He said if the issue was pure dollars, the Denton’s would be glad to pay the City for services that were not rendered, but the fact of the matter was, that they did not use or need City services. He said this was an example of this town growing to a property as opposed to where there might be an isolated tract of land from years ago that was never brought into the City and by circumstance was in the middle of the City and did use City services, but might not pay for them. He said the Denton’s had their own septic system and water well since they bought the property in 1950 and they had no problems and no complaints with those systems. He said if the County wanted to look at the situation, they were free to do so. He said the City could not provide the Denton’s with any services that they had not adequately provided for themselves for 53 years. He said Rose Denton was the owner of that property and she and her son currently lived at that location. He said the Denton’s did not want to be in the City and they did not want to move. He had difficulty trying to figure out what the City would gain, in this instance, from forcing or coercing, by the power given to the City by a state statute, a family who apparently had been responsible in providing for themselves for a number of years and wished to continue to do so, to change their way for the sake of a policy. He said there was no doubt that this property would come into the City at sometime, but he did not see a reason why it had to be today or in the near future. Collister addressed the City service issue. He said again, the Denton’s did not use City water or sanitary sewer system, so they were not taking those services without paying. The Denton’s also did not need Police protection because they knew that if they had a problem, to call the Sheriff just as all of the other individuals who live on the boundaries of City limits. He said they likewise understood that if they had a problem that required the Fire Department, the Wakarusa Township Fire Department would respond. He said when looking at the land behind the Denton tract, there was land that probably would not be developed for a long time. He said the Denton’s talked to their neighbors and none of their neighbors had plans on developing any of the land that was there. He asked what would happen if the City decided that the Denton’s would be forced to come into the City. He said the first time something went wrong with their septic system, they would be faced with the mandatory requirement of hooking up to the City’s system and that would cost the Denton’s and estimated $27,000. Collister said in this instance, he did not see why it was necessary to force the Denton’s to come into the City at this time. Commissioner Highberger asked where that figure of $27,000 came from. Collister said it was two part figure. Part of that figure was provided by Chuck Adcock, Wastewater Management Plan Coordinator, who figured out the costs of hooking up to the water system and the cost of brining the sewer to the property boundary. He said where the Denton’s were located the sewer needed to go to the back of the property which was three acres long. If adding the extended costs of the line, which was how the City computed the figure, it came to $17,000 to $27,000. Collister said the Denton’s suggested that if there was anything they could do to make the City feel easier about their land remaining outside of the City limits, they would be glad to talk to City staff. Moved by Hack, seconded by Highberger, to close the public hearing. Motion carried unanimously. Commissioner Schauner asked if there was any particular reason why the City wanted to annex the 2.99 acres into the City. Corliss said no. He said there was additional staff assistance this summer that enabled them to spend time on this matter and staff identified the property as unincorporated enclave property. He said staff sent a letter to a property owner that was adjacent to this tract and that was annexed with the property owner’s consent. City staff was not typically available to proceed with something like this as a normal course of events. He said staff thought it was appropriate to examine the unincorporated enclaves and as to whether the Commission wanted to bring those types of property into the City. He thought there had been good discussions with the Denton’s and it was not meant as punishment, but as good land use and stewardship of the City’s boundaries. He disagreed with Collister about the City service issue. He said there were services that staff could point to that the Denton’s used and benefit from. He said clearly, they did not use the utility services and he hoped, given the costs, that the Denton’s would never need those utility services. Commissioner Schauner asked if the Denton’s made use of City streets. Corliss said yes, that was a good example. Commissioner Schauner asked if it would be significantly different from anyone living in the County who came to town using city streets. Corliss said he did not know if it would be significantly different or all that different from the people who lived on the north side of the Denton’s on 31st Street. He said the closer a person lived near a street, the closer that person would more likely use that street. Commissioner Highberger asked who snow plowed the street in front of the Denton’s. Wildgen said city staff snow plowed that street. In the past, the City did a series of cleanup situations north of 6th Street which was called the Folks tract, but there had been those enclaves and staff was following policy in bringing those enclaves to the Commission to be considered. Commissioner Hack asked if there were plans for that strip of land that was referred to and was that strip ultimately going to be annexed. Corliss said he did not know if City staff would recommend that because it was not completely surrounded by City boundaries. When getting into agricultural property there were different statutory requirements for annexation. Vice Mayor Rundle asked if the nursing home property was being looked at for redevelopment. Corliss said he was not aware that the nursing home was being looked at for redevelopment. Vice Mayor Rundle asked if the Denton property was the last enclave that City staff found. Corliss said the Denton property was the last enclave that he was aware of. He said there was a cemetery at East Hills Business Park that arguably was an enclave because all of the K-10 right-of-way in front of the park was annexed into the City. He said the Miller and Well’s acre, north of Riverridge Road, was almost completely surrounded by City boundary’s and was currently receiving City water services and the City approved receiving bids to provide sanitary sewer mains in that general area, but not to serve that neighborhood. He said that might be an area that the Commission might want to look at annexing in the future. He said the Commission might want to look at the whole issue of the City’s annexation policy and direct staff otherwise. Collister said the Denton’s had their own street before the City put in a street at that location. The fact that the City improved the street was great, but they had all they needed years before Kasold on the Curve was paved. Vice Mayor Rundle said there was not a pressing need to annex this property because it was on the edge of the City. He said if this property was in the middle of the City and there was full development or if this area was one of the developing areas right now, he would feel at that time, it needed to be brought in under developing guidelines or benefit districts. He thought staff should specify the time in which the City would change their position, if the Commission decided not to annex that property at this time. Commissioner Highberger said he had a great deal of sympathy for the Denton’s because they probably had no idea that Lawrence would ever surround their property. He said there were a lot of people who were on fixed incomes and $144 a year was not insignificant to someone on a tight budget, but he thought it was not enough to cause the Denton’s to leave their property. The costs for utilities of $17,000 to $27,000 were costs that the Denton’s would probably never need to face, unless there was a sewer problem, in which case the Denton’s would need to contend with that problem whether they were in the City or the County. He said in all due respect to the Denton’s, he favored annexation of that property. Vice Mayor Rundle followed up on Commissioner Highberger’s comments. He said Commissioner Highberger stated that the City’s policy said the City “should” annex the property, but the policy stated that it should “encourage” that the property be voluntarily annexed and the City “might” initiate the annexation. Commissioner Highberger asked if Horizon 2020 addressed that issue. Vice Mayor Rundle thought it was a fringe issue because the City would always have people right across the border of the City limits who would be in the same boat. Commissioner Schauner said he had listened to the testimony and read the materials on this issue. He thought if there was some pressing reason why annexation was necessary, he would vote in favor of the annexation, but under the circumstances, if he weighed those competing interest which was the City having a more uniform southern boundary, against the potential harm to the Denton’s, he could not place much weight on the City’s side of the scale. He appreciated that staff was making an effort to clean up the edges of the boundary line, but under those circumstances it seemed what was there wasn’t broken and the City did not have any particular or pressing need to fix it. He voted in opposition to the annexation. Commissioner Hack agreed that it was not broken, but she also agreed with Commissioner Highberger in that there were City services being provided to the Denton’s. She also had great sympathy for this situation, but it seemed that Horizon 2020 was fairly clear along with the City’s policy on island annexations. She said if the Planning Commission unanimously supported the annexation, it seemed that the Commission should go along with their recommendation. Commissioner Schauner said it was his belief that City policies were needed, but he thought the Commission was more than a policy business and hoped they were also in the people business. He said although the Denton’s were not being removed, it seemed there were reasons that would suggest that City policies were outweighed by personal interest. He said this land could always be subject again for annexation if matters changed and at some point, the Denton’s might want to come to the City for various reasons including water and sewer service. He was not convinced that the Denton’s use of that street amounted to a service that the City provided to them that it did not provide to anyone who lived in the County. He suspected that street was paid for by gasoline tax revenues that the Denton’s paid along with the rest of the residents. Mayor Dunfield said he was having a hard time developing a strong opinion on this issue. He did not see real harm to the Denton’s with this annexation. However, he did see the potential confusion about emergency services. The City had policies and the Commission tried to apply those policies consistently. When those policies create a real hardship for someone, then the Commission should certainly consider those hardships, but again in this case, he did not see a hardship being imposed. He concurred with the Planning Commission and agreed with the annexation. Moved by Dunfield, seconded by Hack, to place on first reading, Ordinance No. 7698, annexing approximately 2.99 acres, generally located on the south side of 31st Street (Denton tract). Aye: Dunfield, Hack, and Highberger. Nay: Rundle and Schauner. Motion carried. (15) Conduct a public hearing on the construction of Monterey Way from the intersection of Peterson Road south approximately 2700 feet to the existing northern terminus of Monterey Way including property acquisition traffic calming devices bicycle facilities, subgrade stabilization improvements, water main, and other necessary and appropriate improvements. Mayor Dunfield called a public hearing on the construction of Monterey Way from the intersection of Peterson Road south approximately 2700 feet to the existing northern terminus of Monterey Way. David Corliss, Assistant City Manager/Legal Services Director, briefed the Commission on the construction of Monterey Way from the intersection of Peterson Road. He said in February of 2002 the City Commission adopted a resolution establishing a benefit district for Monterey Way and tonight was the public hearing for those improvements. Staff went through a process of selecting a consulting engineer in which LandPlan Engineering was retained by the City. Staff was immediately concerned about the issue of a gas pipe line that was along the west side of Monterey Way at that location. Staff placed in that contract that LandPlan would essentially stop their design work when they could conceptually tell City staff what the right-of-way requirements were for improving Monterey Way. Landplan had done so and part of their preliminary design was a requirement that the City relocated the gas pipeline which necessitated the visitation of the resolution because there was not enough money to cover those costs. Staff needed more money for that project to relocate the gas line and to also purchase property from Parcel 4, Fall Creek Farms, because staff would move Monterey Way to the east to accommodate the relocated gas line. He said staff thought it was appropriate to compensate Fall Creek Farms for that dedication because it was an extraordinary dedication. There was currently 66 feet of right-of-way on this old County road that was gravel and dirt. The City needed 80 feet of right-of-way in order to build a collector street in this situation, but the City would need to take more from Parcel 4 than the western properties. The resolution that called this hearing was to consider providing additional funds in the budget for that benefit district and allow staff to acquire the Fall Creek Farms tract. He said there had been quite a bit of activity in the area and on October 7th when the City Commission would meet, the Commission would be considering benefit districts for Monterey Way north of this location which would also have some problems with the gas line. He said this was a key gas line that eventually went up to the Westar Energy Center. There would also be a benefit district for Peterson, Kasold and the intersection of Kasold and Peterson. There was also some discussion with Craig Van Matre, who represented the Springhill tract, about the method of assessment. The current valid resolution was for front footage. The resolution advertised for this hearing would proceed with that front footage, but Van Matre would like to see this assessment on a square footage basis. Craig Van Matre, attorney, representing the owner of Spring Hill Farms, said he was before the Commission to ask that the ordinance which adopted the method of allocating those costs of this particular benefit district to be changed to allocate those costs based on the area, instead of lineal footage of each property owner along that street. He said this was an important issue which required the Commission to consider certain concepts of fundamental fairness that they thought were appropriate. He said this was a dispute which fundamentally involved a swaying of costs between them and the owner of Fall Creek Farms. That swaying was $275,000 which was not a consequential sum and hence the additional passion that money brought to this dispute. He said they began this development approximately 5 years ago. When the City wanted a tract similar to the Shultz tract that they acquired, they voluntarily annexed that tract. He said when the special benefit district that was considered in this situation was formed additional right-of-way was needed for the gas line. He said they agreed to give up that right-of-way without compensation. He said they had been hectoring City staff to create this benefit district ever since they discovered that without it, they could not develop the tract. That was because under the ordinances and the rules of the City, because they abut Monterey Way, they were told that they could not develop unless and until Monterey Way was improved. He said they suggested developing part of that road which required connection to Peterson Road and stay away from Monterey Way. Again, the City specified that they had to wait until Monterey Way was developed. They asked the City what they could do to develop that tract in an equitable manner. The City’s suggestion was to create a special assessment benefit district in which they did by going to Dr. Brunfeldt, next door, stating that they knew he had no incentive to see this benefit district happen, but if Brunfeldt would consent to this benefit district, they would pay those costs attributed to his tract. He said they also went to Mr. Stultz, owner of the tract south of the Brunfeldt tract and encouraged him to participate in this benefit district. He said they thought this issue was moving along relatively fairly and equitably until they realized that the City was going to apportion those costs based on linear footage along the road instead of area. He said it was their erroneous impression that this was going to be assessed based on area, but the ordinance before the Commission assessed those costs based on linear footage. He thought the Commission would look for fairness to all concerned and a policy that could be defended, but also a policy that had some rationale of equity behind it. He submitted that the purpose of those cost allocations was to develop a method whereby the cost absorbed equaled the benefit received. He said there were those who would argue that 99% of that traffic, once that road was built, would be from people who live elsewhere other than the land being discussed. Nevertheless, it was fair to say that those who had undeveloped tracts and who would seek to develop those tracts would ultimately recover some or all of their costs from that development. Therefore, it seemed equally fair to them to say that those who had the larger tracts and who therefore have a greater ability to recover those costs in terms of value or number of uses, the Commission should apportion to those larger tracts a substantial portion of costs, much greater than the Commission would under the simplistic or unfair situation of apportioning based strictly on lineal footage along the road. He said that was their only quarrel with this proposed benefit district and they hoped that this special benefit district moved forward, that the road was improved, and that as soon as those procedural difficulties were out of the way, they would be allowed to proceed with their development on which they proposed to build moderately priced housing, that was needed by the City of Lawrence, in the near future. Mark Andersen, representing the owners of Fall Creek Farms and the owners of Monterey Way No. 8, tracts No. 3 and 4, said he wanted to address a couple of issues concerning Van Matre’s letter to the City Commission. The primary issue that was conveyed to the Commission concerning the area, he pointed out, that the Fall Creek Farms parcel extended ½ mile to the east. That parcel of land had been developing in an orderly manner from the north and the east. It had access from the north and the east, but it was paid for and it did not need access from the west at this time. It would be the desire for Fall Creek Farms not to go forward with this benefit improvement district, if it thought it could just stop it or not have adverse consequences to the development of other property around it. Basically, Fall Creek was saying that it would agree to the benefit improvement district simply in the spirit of cooperation and consistent with the letter they wrote to the Commission in April that discussed the other benefit improvement districts that Corliss had addressed. He said there were four more benefit improvement district involving Peterson Road, Kasold, the intersection at Peterson and Kasold, and Monterey Way, north of Peterson. He said Fall Creek Farms was going to be included in at least two of those four additional benefit improvement districts. He said when talking about Fall Creek having a larger area, it could not be looked at in isolation saying that it was not paying its fair share of Monterey Way, south of Peterson Road. He said the whole area needed to be looked at and understand that it extended ½ mile to the east and it was going to be included in benefit improvement districts for that reason that the Springhill property would not. He said from an area standpoint, the Fall Creek Farms property was approximately four times the size of the Springhill property. If factoring in the additional assessments that were going to be allocated to Fall Creek Farms, the assessments from all of those benefit improvement districts would be four to five times the assessment on Springhill. He said this was directly proportional. In fact, he believed, the method of front footage was the most professional, fairest, and probably the preferred method in Lawrence for assessing benefit improvement districts. He said on the allocation issue of the cost of right-of-way, it was explained that a road would shift over. He said in the letter that was received from Springhill’s attorney, it was pointed out that assessment costs or acquisition costs would be $300,000. If Fall Creek was assessed 50%, he asked the Commission to understand that half of that was paid back to the City. He said $150,000 of that $300,000 had to be paid back by Fall Creek because that would be its share of the assessment. The letter the Commission received suggested that this was a dispute between developers. He said this was not a dispute between developers. The property owners at Fall Creek and Monterey Way did not dispute staff’s recommendation, but supported City staff. He said this was a disagreement between Springhill and City staff not between Springhill and his clients that he represented. He pointed out the adverse impact of shifting this road to the east was going to have on Fall Creek Farms. Not only would there be a taking of additional right-of-way which was 40 feet of right-of-way taken for a ½ mile off of Fall Creek Farms on the west side, but shifting that in 40 feet was going to have adverse consequences on the lots that would abut that area. It would change the grade considerably and sharpen the grade on those lots. It also left everyone on the west side, including Springhill, with more of their own property to develop. Andersen said the memo from Chuck Soules, Public Works Director, to the Commission pointed out that the method of assessment that was previously approved was the front footage method and all this Commission would be doing would be paying deference to the prior City Commission, not changing what they did. He said Fall Creek and the owners of Monterey Way No. 8, owned roughly 69% of the property if done on a front footage basis and that percentage was even higher if done on a square footage basis. He said they were requesting the Commission to assess this benefit district on a front footage basis. Without cooperation, they represented more than 51% of the affected property owners and he was authorized that they were not interested in moving forward with the benefit improvement district unless it was done on a front footage basis. Vice Mayor Rundle said there was a preliminary plat that he noted that the western half of this large tract for Fall Creek Farms, both the developed and undeveloped, was going to take primary access on Monterey Way. Andersen said they would have that access eventually. He said the letter that was written to the Commission in April asked that they keep open the option of going with twenty year assessment, rather than ten year assessment because that was the build out projected for that property. Fall Creek Farms did not want or need the access from the west right now. He said they would not object if the City wanted that access now, if it was done on a front footage basis, but they would object if it was done on an area basis. He said they would not need that access for years to come. Moved by Rundle, seconded by Hack, to close the public hearing. Motion carried unanimously. Commissioner Schauner asked if the owners for Fall Creek Parcel 4 no longer consented to creation of the benefit district, where did this put this project and what were the City’s alternatives. Corliss said when creating a benefit district, property owners had 20 days after the publication of the Resolution to file a protest petition. If that protest petition met the statutory requirements then the benefit district was null and void. He said if the Commission decided to establish this benefit district on a square footage basis then the owners of Fall Creek No. 3 and 4 would object and they would file a protest petition. If that was the situation, then the benefit district would not be established. The Commission would then need to address the earlier resolution which was a front footage basis, but that resolution did not provide enough funding to carry out the project under the City’s current engineering estimates. Commissioner Schauner asked if Monterey Way was projected to be a collector arterial, or neighborhood street. Corliss said a collector street. Commissioner Schauner asked if that street would only be built if a benefit district was created. Corliss said no. He said there were a number of collector streets in the community that had been built that had not been through the benefit district process. Through the years, the City’s development policy had changed to whether or not the City would participate in collector streets. He said for a number of years the City had financially participated in collector streets which a number of those collector streets were done by benefit districts because the City did not have the funding and that was the City’s vehicle. When the City changed their development policy in the 90’s, collector streets were completely the responsibility of the adjoining property owners. He said for this tract, because there were bicycle lanes, the City would participate in those costs. One of the other reasons they were doing this construction by benefit district was because there were multiple property owners and they had different timing horizons. He said this was a classic example of where Springhill had sought to do this construction for years, but Fall Creek Farms was not interested in the construction at this time. He said benefit districts were a frequent vehicle when there were different time horizons for development. He said collector streets could be built without benefit districts and in a number of cases throughout the community, collector, and arterial streets had been built without benefit districts. Commissioner Schauner asked if the owners of Fall Creek Parcel 4 were different individuals than the owners of Parcel 3. Corliss said that was correct. He said Andersen was representing both parties. Commission Highberger asked Corliss if Andersen’s comments about other benefit district were accurate. Corliss said those representation were fair, but he asked the Commission to keep in mind while Fall Creek Farms would participate in Peterson Road, so would the Springhill development. He said when this issue was on the City Commission’s agenda on October 7th, the proposed benefit district for Peterson Road included the property to the north, the Springhill and Fall Creek Farms tracts. Commissioner Highberger asked if those benefit districts were based on front footage. Corliss said correct. He said Peterson Road, Kasold, and Monterey Way to the north were based on front footage. He said they were allocating the intersection, not on a front footage basis, but on a traffic basis for those multi-family tracts. He said the benefit district for Kasold and Peterson, as proposed, included all of the tracts except the southeast area. Vice Mayor Rundle said the access for exiting the neighborhood for the west half of the Fall Creek area was going to be Monterey Way. He said right now there was approximately a ½ mile long cul-de-sac. He could not believe they would have left that western half developed and continue to extend the cul-de-sac because it seemed that for public safety purposes, they would need access to Monterey Way fairly soon, even if the whole parcel did not develop. He said it seemed that this west half could be reduced so that it was only the western half of that overall development, but clearly that area would ultimately benefit from that access to Monterey Way. Commissioner Schauner said he assumed there was a benefit district that was created to build Kasold downhill. Corliss asked Commissioner Schauner if he meant Kasold from Peterson, south. Commissioner Schauner said yes. Corliss said that was an old project constructed in the 70’s in which the City and County participated. He did not believe that project was a benefit district. Commissioner Schauner asked if the benefit district that Fall Creek Farms might participate in would be Monterey Way, the corner of Monterey Way and Peterson, and the corner of Peterson and Kasold. Corliss said it was not the intersection of Monterey Way and Peterson, but the Intersection of Peterson and Kasold. He said the benefit districts were the intersection of Peterson and Kasold, Peterson, and Monterey Way to the south. The area for the intersection was that immediate southwest tract at Kasold and Peterson. Commissioner Schauner asked Van Matre if his client was faced with the proposition of a 50/50 share, based on front footage, or no benefit district at all, what would his client prefer. Van Matre said he thought it was not something he had seen before where a Municipal Body, such as the City Commission, was held hostage to settle appropriate policy in a circumstance like this. He said the Commission was being asked to choose between not approving this benefit district, although it desperately needed approval, and doing the right thing. He said the decision was taken away from the Commission. He said this was the first time he had seen that happen publicly in front of a public body and he was outraged. He said they were losing land to the gas line easement and they needed to convey an easement to allow for the construction of that gas line. He said his client had never tried to be a bad neighbor. He was disturbed by what he had heard because it did represent a complete ignorance of what was good for the public in order to achieve a financial method which in large sense was being reimbursed in the form of this condemnation for 40 feet along the edge of the property. Commissioner Schauner said if the project was reworked or re-engineered, was it possible that street could be built at a city-at-large expense with available money. Wildgen said it would be bond money. The engineering was set because of the location of the gas line. He said this project could be declared a major trafficway and a portion could be bonded to the city-at-large. Commissioner Schauner asked for the projected cost for that improvement. Soules said the cost of the total project was 2.9 million dollars. Those costs would include right-of-way, gas line relocation costs, and intersection improvements. Wildgen said the City had $400,000 of that total cost at this time. Vice Mayor Rundle said the square footage assessment was fair and it was clear from the preliminary plat that those properties, when going to 6th Street, would be taking access to Monterey Way. He said this was the type of assessment the City had used in the past when a property was receiving value from an improvement. He said if Andersen’s clients wanted to take out the eastern half of this unplatted parcel that would be fine. He did not want to change the method of assessment. Commissioner Highberger said he was not sure that was Andersen’s intent to put pressure on the City Commission in an inappropriate way, but that had nothing to do with his decision. He preferred to assess the benefit district by front footage because it was approved once already based on front footage and he preferred to stick with the decision of the previous Commission. Vice Mayor Rundle said he was basing his comments on looking at a preliminary plat. Wildgen said the plat was five years old, but it showed access to Monterey Way. Phil Struble, Landplan Engineering, said the plat had changed drastically. If talking about the Fall Creek Farm’s parcel there were some significant changes. That piece of ground had two accesses to Peterson Road and one access to Kasold. When the Commission was contemplating their decision, he asked the Commission to think about what the access was from the pieces of property to the west. Fall Creek Farms access was through Monterey Way. He was not trying to sway the Commission’s decision, but if the Commission was taking about benefit and access, all of those things should be taken into consideration. Commissioner Highberger asked if the street entrance on the south side of the Fall Creek property would be a cul-de-sac or connect up with some of the other roads to be built. Struble said whether they wanted to take that access or not, he could not answer that, but that was a platted access into that property at this time. Vice Mayor Rundle said they had two accesses. He said in the past the Commission had been discouraged from saying one side had more value than the other. He thought the value was there at Monterey Way because there were more access points. He said if traffic in that area were going to 6th and Wakarusa, it would be taking Monterey Way. Mayor Dunfield did not see a clear-cut fairness issue on one side or the other. He said looking at the issue from any of those four property owners’ point of view, he would come to a different conclusion about the legitimacy of looking at the square foot versus the linear foot calculation. He said there were arguments to be made for both sides. He was tending to be swayed by the notion that Fall Creek was going to be participating in more improvements, relative to what some of those other parcels would be. Commissioner Hack concurred with Mayor Dunfield, particularly since there was access to Peterson and Monterey Way and the future participation of the others. She agreed that there were compelling argument on both sides. Commissioner Schauner agreed with what everyone had said. He could also rationalize or argue to himself that either a square footage or front footage assessment was fair, but at the same time it seemed that in this particular case with the only southern access available to Parcel 4 being through what appeared to be a residential street, and as that parcel developed to the west the value of that ground was increased significantly if they had easy access to Monterey Way and ultimately to the western part of the City where the substantial growth was occurring and projected to be in the future. He said approximately 69% or 70% of the square footage was in Parcel 4 and the remainder was in some combination of Parcels 1, 2 and 3. He said the Fall Creek property stood to benefit to a substantially larger affect then Parcels, 1, 2, and 3 would benefit. He said there was more ground in Parcel 4 to be developed amongst which the costs would be assessed as that property was developed. He said perhaps it would either speed up the development of Fall Creek Parcel 4 or perhaps cause this benefit district not to be created. He said based on a general feeling of what seemed fair, he favored a square footage assessment. Commissioner Schauner asked if Peterson Road would be a collector street. Corliss said Peterson Road was a minor arterial. It would be three lanes, similar to the profile on the east side of Kasold. Commissioner Schauner asked what the financing structure was for those minor arterials. Corliss said the City participated at a certain percentage. Vice Mayor Rundle asked how much of the entire Fall Creek parcel would be included in that Peterson Road benefit district. Corliss said Fritzel indicated that he wanted to include all of his unplatted property in the Peterson Road benefit district and the Monterey Way south benefit district. He said it would also include the property immediately abutting Peterson Road. Commissioner Schauner said it struck him as one of the problems the Commission encountered when doing piecemeal development rather than having had a look at all that development because now he understood the owners of Parcel 4 concerns about being assessed on square footage basis for two rather significant projects. He thought there wasn’t a fair answer for this situation. Corliss said the statutes that addressed special assessments went back a number a years and before there were 12-6a procedures there was a general paving statute that allowed the City to go back 300 feet from either side of the street for assessments and then in the mid 50’s and 60’s the planners suggested curve linear streets which meant it wouldn’t be a straight or grid street. That was one of the reasons why the 12-6a statute that the City operated under had been enacted and allowed staff to do different types of assessments. He said when looking at the parcel that would be eventually multi-family in the long-range plans, as far as how that was zoned, he said that parcel would take assess onto Tomahawk and then to Kasold. He said the property owner desired to include all of his unplatted property in the benefit district because it was owned by the development company and that company would carry those costs. Corliss said Vice Mayor Rundle’s discussion about limiting the square footage to a certain point back made sense. He said this issue was untidy, but there were decisions that needed to be made and staff was trying to get the adequate public facilities in roughly with contemporariness with development. Corliss said Van Matre had said that staff had not allowed them to pull a building permit, but it was the City Commission that made that decision because they did not want the development to occur with the existing public infrastructure. Commissioner Schauner asked if they could assess those costs based on square footage back from the center line of the proposed road. He asked if that was within the Commissions purview. Corliss said the Commission could do that type of assessment, but staff had not done that type of assessment in a while. He said staff would need to talk to bond counsel about that type of assessment. He said state law appeared to contemplate that when it allowed for varying assessments based on varying benefit. Vice Mayor Rundle asked if the Commission needed to defer this item. Corliss said the Commission had up to 6 months after closing the hearing in order to adopt a resolution establishing a benefit district. He said staff could examine the suggestion by Commissioner Schauner further and talk with bond counsel to come up with a different method. Commissioner Highberger said there were other benefit districts that would affect a couple of those tracts and it might make sense to consider the impact of all those benefit districts together. Vice Mayor Rundle said it might be good to see the latest plat and the earlier plat to give the Commission a sense of how this was being contemplated. He said it was clear that the west half of this site was going to have main access to Monterey Way. Corliss said the eastern parcel paid 50% of the front footage. Mayor Dunfield directed staff to bring back various special benefit district assessment methods and also information on the other proposed benefit districts in the area. (16) The Commission recessed from 8:05 p.m. until 8:15. Receive staff report concerning wage requirements for tax abatements. Mayor Dunfield said the Commission had made a decision that there would be a living wage requirement for tax abated companies. He said it was a clear decision of the Commission and that principle was on record. The reason the Commission was discussing this issue now was not “rather” but “how” to make that wage requirement happen. He hoped comments could be directed toward those issues. Mayor Dunfield also put together his own proposal or suggestions as to how the issues that were raised by Corliss’ memorandum might be addressed. He suggested modifying the existing Tax Abatement policy to include wage requirements in ordinance form. He said there was a question of whether this policy should apply beyond tax abatements to non-abatement subsidies. When there was a clear correlation of subsidies to tax abatement then the policy should apply. He did not want to include IRB’s because those types of bonds were dealt with separately in City policy. He said this issue was framed as, was the Commission talking about projects or companies and if the Commission would make the policy retroactive. He believed that it should not be made retroactive and it should apply only to new tax abatements. Vice Mayor Rundle thought the Commission was in consensus on that issue. Mayor Dunfield said another issue was at what point an employee became covered under the living wage and there were various formulations that had been proposed making exceptions for particular defined circumstances. One proposal was for the number of hours worked. He suggested 60 working days, that way, they wouldn’t be penalizing part-time workers. If using number of hours, then a person who worked part-time would need to put in twice as much calendar time in order for the living wage to apply to those part-time workers. He did not want to discourage that kind of permanent part-time employment and that was why he suggested 60 working days. He said the next issue had to do with the idea of seasonal work and summer employment types of situations. He suggested allowing the same individual to be exempted from the living wage requirement only once within any given twelve month period that would allow a student to be employed at the same company over multiple years, but it would not allow for more than three months in one year of any individual to work without the living wage applying to them. Mayor Dunfield suggested excluding subcontractors whose work was incidental to plant operations. He said workers who were not actually a part of the day to day work of the employer, but were doing incidental tasks whether it was brining in food or lawn maintenance. Those types of subcontractors would be excluded from the wage floor along with not-for-profit employees. He also suggested that the language in the draft ordinance require that health insurance be made available because there were employees who chose not to sign up for health insurance and that option should be available to them. He suggested a minimum 50% employer contribution. Mayor Dunfield said the KDHR standard was a difficult issue. He said when the tax abatement policy was being discussed by the Tax Abatement Task Force, they talked about inserting living wage language and it seemed, at that time, that it was touted as an advantage of having a living wage provision and avoid all of those complications and ambiguities of trying to decide what an employee’s category really was. Essentially by creating a wage floor, it eliminated the need to go through that process. Another suggestion was the use of a performance agreement, and with 3rd party review mechanism. Finally, he discussed the enforcement procedures that were difficult and complicated. One of his goals throughout this process had been to try to make the policy clear, straight forward, and automatic as possible. He said one option that had been proposed was a 1:5 ratio be applied so that if a company, for example, had 5% of its employees below the wage floor, its abatement would be cut by 25%. He suggested instead of that, they look at the overall tax burden that the company would pay if they had no abatement and apply that percentage to that number rather than to the amount of the abatement. If a company had a 50% abatement that would essentially double what they would be required to pay under that formula for non-compliance. There were scenarios that one could generate that would show that a company could still benefit from not paying the wage under that scenario and that was why he was suggesting a second step that would come into play after two consecutive years of non-compliance, the presumption at that point, was going to be that the abatement would be revoked. In order to prevent that revocation, it would be brought before the City Commission to decide whether there was extenuating circumstances that should allow the abatement to continue under the penalty provision. He said the abatement amounts would not be increased by superior performance on the part of the companies, but the credit system that had been discussed was only there to relieve penalties and not to increase the total abatement amount that was possible for a company. Commissioner Schauner said from his perspective the purpose of a living wage floor was to provide to those employees of abated companies a living wage which was 130% of the poverty level for a family of three. He said his goal was to see that those workers received that salary plus the health insurance. He said his goal was not to take an abatement away from a company, but to see that the employee benefited from this concept. He wanted to focus on the enforcement procedure because it was a significant issue. He would prefer a straight forward, easy to calculate way to know what the cost of not paying a living wage for those persons who were covered. He said if that person was paid a dollar below the living wage, then the contract performance damages would be three dollars for that employee. Part of that money would be paid to the employee to make that person whole and part of that money could be paid to the pilot program that had been spoken about by the Chamber of Commerce. He said that provided the employee the coverage that they were trying to accomplish and it provided an easy to calculate damages provision in the performance agreement with those abated companies. He received an email from the Chamber indicating that they had done some further looking at those persons who were not currently being paid $9.53 an hour which was 7% of the persons working in abated companies. He said 7% seemed small, but when doing the math, that was one worker out of fifteen, did not make at least $9.53 an hour. Lawrence Memorial Hospital had about 1.3 million dollars in un-reimbursed medical expenses last year, some of which would be helpful, could be covered if some of those employees had health insurance. He would like to have more discussion about the penalty piece. He preferred not to take away the abatement because that did not get at what the underlying purpose of this concept was about. The underlying purpose was to make sure that people working for those companies, make a living wage. Commissioner Highberger discussed his goals. He wanted the City to pass a clear and enforceable living wage ordinance that applied to all companies receiving city tax maintenance. He wanted the policy to encourage full-time employment as much as possible, rather than part-time or temporary employment. He wanted the enforcement mechanism to not be burdensome on the City or on local business. He did not want this policy to discourage the creation of jobs or investment in the City. Ideally, he wanted a policy that everyone could agree on and bring this City together rather than tearing it apart. Mayor Dunfield called for public comment. Chuck Epp, representing the Kaw Valley Living Wage Alliance, said the Lawrence Community through a true community dialogue had clearly decided that the Economic Development Policy of the City of Lawrence, using our tax dollars should serve community interests and community values. Our tax dollars should subsidize firms only if they pay their workers 130% of federal poverty level for a family of three, plus either health insurance or an extra $1.50 an hour. The Community had reached this point after years of growing dissatisfaction with the current policy. The current policy gave tax abated firms, guidelines for performance and investment, but contained no administrative enforcement mechanisms and ultimately left enforcement of the guidelines entirely to the discretion of the majority of the City Commission. As a result, the guidelines had never really been enforced. This was a problem with the policy more so than with this Commission or previous Commissions. It was a policy that really in practice hasn’t been particularly workable. As a result, many members of the public had come to believe that our Economic Development Policy served only narrow interest, not the public interest. Clearly to heal this rift in the community, there needed to be more than guidelines and meaningful enforcement. The City Commission and the community had decided that a part of that answer was a meaningful, enforceable living wage ordinance which said that our tax dollars should promote responsible, community serving job growth, not subsidized poverty level wages. He said the Living ch said that our tax dollars should promote responsible, community serving job growth, not subsidized poverty level wages. He said the Living Wage Alliance has been flexible on what were incidental details. They had been responsive on quite a range of things that they thought were incidental to those essential policy goals, but some matters they regarded as not incidental, they strike at the heart of their basic goals. The Living Wage Alliance believed that some of the remaining details to be resolved were absolutely crucial, in a sense kind of make or break, for whether this was a meaningful policy and enforceable. Epp said the Living Wage Alliance was comfortable on a number of the Mayor’s proposals, but they had some remaining concerns. He said the basic policy goals were firms receiving tax abatements or similar public subsidies should pay all of their workers a living wage plus health benefits. He asked what did this mean in terms of policy or implementation details. He said the Living Wage Alliance was in favor of applying the living wage requirement to other similar public subsidies that was analogous to tax abatement. The second key issue of dispute was health insurance in addition to that living wage floor. He said they were clearly committed to retaining health insurance as part of this basic policy goal, but he was somewhat uncomfortable merely requiring employers to make it available because employees at the very lowest end of the pay scale would have much greater difficulty joining the voluntary employer policy than employees higher up the scale. Their proposal stated that health insurance or if the employee did not join into it, an extra $1.50 in wages and that was actually a modest sort of alternative requirement. The third basic point about covered firms was a simple policy goal in that firms receiving future tax abatements should pay their workers a living wage. He said the Living Wage Alliance thought the living wage requirement should apply to the entire firm receiving the abatement not simply to an abated project and they hoped that would be the policy that came out of this meeting. He said covered employees were an area of significant dispute. Again, he said the policy goal was firms receiving tax abatements or similar public subsidies should pay all of their workers a living wage. He said it was essential that the legal definition of covered workers should not provide an incentive to shift work from full-time workers, part-time workers or temporary workers. There was a concern that there might be some sort of an exemption or exception for some types of part-time workers or temporary workers. He said the alliance favors an incentive that would encourage hiring full-time workers and therefore one that would cover all workers equally. He said because of that any sort of across the board exemption for the first 480 hours which was 60 working days for a full-time worker was not consistent with that although they found it preferable to some other alternatives. He said the alliance fully endorsed staff’s recommendation that however the hour exemption was defined it should be a one-time exemption, once satisfied the worker was covered for subsequent years. He said a policy that required tax abated firms to pay its workers a living wage must do that and must not contain exemptions that in the end would whittle away that basic concept therefore, they strongly favored the coverage of all workers. Epp addressed meaningful enforcement. This was clearly one of the key issues and in some important respects a “make” or “break” issue. The policy needed to have meaningful enforcement. In the end it was not much different from the current City policy which contained good goals, but it did not provide staff with the tools to enforce nor allowed the Commission a realistic opportunity to enforce. He said the alliance endorsed staff’s recommendation that it was the most simple and clear way to say that any penalty to an abated firm that was paying less than the living wage should be substantial enough that it did not provide an economic benefit to pay less to the living wage under plausible circumstances . He said that was a simple principle and the threshold for this discussion. The new living wage ordinance would be truly perverse if its penalty structure actually encouraged firms to pay less than the living wage and they thought there was general agreement with the public on that basic point. He said if this living wage ordinance was accepted it would mean the proposed 1:5 penalty ratio was simply not acceptable because under quite a range of circumstances, it actually gave firms an incentive to pay less than the living wage. He recognized that was only for a two year period under current proposals. He said even if the penalty was doubled to 1:10 ratio, there were concerns about that. A firm would retain under that proposal, half of its abatement if it paid five percent of its employees less than the living wage. He said five to seven percent, according to current statistic, was the typical percentage for Lawrence firms. He said what that amounted to was the following policy: “Pay less than the living wage at a typical Lawrence level and keep half of the abatement.” He said if the idea was accepted that the idea of the penalty should outweigh the gains in wages for the firm which was the doubling of the 1:10 ratio, doubling from the 1:5 ratio was probably not a fair implementation of that principle. If they opposed either the 1:5 or 1:10 ratios, he asked what was favored. He said at a simple level, they would favor a policy agreement to staff that any penalties for the initial period must outweigh the wages saved by the firm. He said that should be a simple sort of policy direction to give and it would leave open a variety of types of penalty options. The option that he favored which was Commissioner Schauner’s suggestion was taking the wage savings to the firm and triple it saving for off setting City administrative costs and save some as a remedy to the employees and in the end to make sure that the employee received a living wage and not to penalize the firm. The basic point was the penalty in the first period should not provide an incentive to pay less than a living wage. After two years of non-compliance, the general consensus was that the a firm’s tax abatement shall be automatically revoked unless the Commission acted by supermajority vote and the alliance thought that was a good policy position because it took a significant amount of the political heat off of the City Commission. He said this was where the penalty stage in the first part and second part interrelated, if there was any way in which that second penalty stage was reduced, lighted or made less likely to carry out a revocation, than the weight of the penalty in the first stage became proportionately more important. If it was likely that an abatement would be continued, after two years of non-compliance, then it was clearly a problem if in the initial penalty stage, the incentives were not a monetary incentive on firms to comply with the living wage and pay there employees a living wage. He said for that reason the alliance was somewhat uncomfortable with the idea that firms could get a credit for prior performance in some sort of formal way. He said they had always thought that the credit the firms had received for paying a living wage was continuation of the use of the City’s tax dollars in the form of an abatement. He said the alliance thought that the supermajority option would allow the Commission to take into account hardship considerations. He said the Living Wage Alliance believed that an authentic living wage ordinance was win/win and they were happy that the community and the Commission had reached that policy position. The alliance hoped that this ordinance, one that was recognized by the community as meaningful and enforceable, would go a long way toward healing the rift in the community and would bring the previous opponents of economic development policy to the table and favor it for all the community because they would not recognize that this was a policy for the community and not for just some in the community. This type of a policy made tax abatements a service to the community and investors in the firms and also to the poorest workers in those firms. Sandy Beverly, School of Social Welfare, Kansas University, said her training was in social work and economics. She was in favor of the living wage, but she was anxious that after all of the discussion that the community might end up with a living wage that did not have a meaningful wage floor, that was not enforceable, and would not apply to all or most of the abated companies employees. Beverly said she wanted to focus on the idea of the $9.53 an hour plus benefits. She said for a full-time year round worker, $9.53 per hour translated into approximately $19,000 a year. She said she graduated from college approximately twelve years ago and when she was a senior in College her campus career had a seminar called, how to get by on $33,000 a year. She said her research looked at how low income families, working and non-working, made ends meet. She said the research showed that low income working families were especially vulnerable to hardships. She said the proposal for $9.53 an hour plus benefits was a modest proposal and it was reasonable to require firms that receive large public subsidies to pay those modest wages to their employees. Kirk McClure, Public Incentives Review Committee, spoke to the Commission about implementation and enforceability of the living wage proposal. The first idea was the use of the Kansas Department Human Resources data and the second idea was with the use of a third party. The current tax abatement policy clearly stated that a firm must pay average wages within the firm equal to or exceeding the average wages of the community which was what the firm paid and what the community average was. Right now, all firms must report to the Kansas Department of Human Resources as part of their unemployment insurance requirements. That report with appropriate omissions to protect confidentiality of the individual employees could readily become the report that came to the Public Incentives Review Committee in order to report the number of employees and the wages paid. All that was necessary was modification of that report for identification of occupation codes. That made it possible for them to take the Kansas Department Resources annual employment survey data to set that community standard. The department looked at all the wages, both state wide and at the level of individual metropolitan areas and the City could use that as the community standard. No superior data set existed and without KDHR there was nothing else of any comparable quality. He said to scrap this report would put the community back to square zero. The second point he wanted to address was the use of the third party. The argument was the production of confidentiality of records. The City received confidential records all the time, in fact, it could readily be done to protect the confidentially of the names of individual employees. If the City adopted the use of a third party, it separated the Public Incentives Review Committee from the data itself. The committee would no longer be in a position to actively know whether a firm was or was not in compliance. He said the City needed someone to properly staff the Public Incentives Review Committee, someone trained in economic development and was under the Commission’s supervision. He recommended staying with the use of the Kansas Department Human Resources data until such time as other data could be found that was superior. He recommended appropriately staffing the Public Incentives Review Committee from City staff to enforce this mechanism. Forrest Swall, signed on with the Living Wage Alliance, but was not active with the group. He had been following the development of this issue through the newspaper and sat in on the City Commission several weeks ago. He spoke to the issue of a couple of the social benefits that seemed paramount coming out of the field of social work and social welfare. He was aware that there were members in the community that formally oppose the ordinance and now had moved substantially toward a position of support for a living wage policy, but he was also aware that this support might be coming with some suggestions that appear would potentially weaken the concept and would, if included in its adoption, nullify much of the effects for individuals and families who would otherwise benefit. The social benefits seemed the most paramount in two areas, but it would have some others as well. First, there was an issue of economic security. He did not think that most of the community appreciated the impact of lack of economic security on the part of a good many families. This afternoon he made a check with the School District and learned that 30% of the children in our school district were on free school lunches. That meant those families had substantially limited incomes. It did not mean that they were below or at the poverty or living wage level, many were over that and it was an indicator of the lack of economic security that was pervasive in this community with families with children. The second area was the area of mental health. One of the benefits related to economic security that with economic security, people had generally much less stress in their lives and thus were much less vulnerable to serious mental health problems. After the former Commission considered this issue, he spoke with the Board of Directors, of the City’s Mental Health Center and urged that the Mental Health Center to go on record as supporting the Living Wage Proposal. However, as he looked around the room he saw a good many conflicts. Some of the strongest supporters and advocates for the Bert Nash Mental Health Center in this community and for general mental health services were compromised because the Mental Health Center and the Mental Health Social Service Programs were largely supported by people who had some questions about the validity of a living wage. There wasn’t a putting together of connection between economic security and mental health and it was important that they were able to acknowledge the enormous benefit that accrues to families that related to mental health and the services provided by the Bert Nash Mental Health Center as well as services being provided by numerous other social agencies in this community which was supported rather generously. He said while he hoped the City Commission gave appropriate consideration to the legitimate interest of the City’s businesses, he also hoped that members of the City Commission would fully consider the social benefits that were associated with this proposal that they were currently considering. He was delighted to see the progress that appeared to be taking place. Dennis Constance, speaking on behalf of the Kansas University Classified Senate, said the community all benefited from an economy that worked fairly including the people who would end up paying this living wage. The K.U. Classified Senate’s interest in this living wage issue was based on believing the following statement: “None of us would be directly affected by this issue, however as victims ourselves of generally low wages, they believed it was important to support ideas that worked against that type of economic disadvantage in this community.” He said we live in a free society, but the ability to take full advantage of those freedoms could be significantly handicapped by simply not earning enough money to participate fully in the basic life of this community. Everyone who worked for a living ought to earn at least that much for his or her efforts. This was especially true when that worker was employed by a company that had, in essence, made the community at-large a partner in their operation by seeking a tax abatement. It was important that if Lawrence made this step, that there would be no gaps in the protection offered workers or worst yet, ways for non-compliance to be economically bearable or beneficial to the company. He said the Senate supported the information that the Commission received from the Kaw Valley Living Wage Alliance. Specifically, they agreed with the staff recommendation that the tax abatement policy include the living wage and the total policy become ordinance. He said the non-compliance should carry a clear penalty and Option B in the memorandum seemed to do that best. He said they had some concern about the 60 day threshold. He said some training period might be reasonable, to be exempted, but if so, it should be extremely short. In regards to two years of non-compliance, he said two years did not seem long in policy terms, but for the worker who was not getting the wage he was supposed to be getting, two years was a long time. There were also concerns about the definitions of coverages of subcontractors, particularly the regularly scheduled daily routines, they thought daily might be limited because there were people who were subcontractors who could contribute significantly to the operations of a company and it not necessarily would be on a daily basis. Some type of regular schedule seemed more appropriate. He said whatever was determined, it was important that there would be no loopholes that allowed the ordinance to be legally circumvented and that all the employees of a given company be offered the living wage protection from day one. The full opportunity to earn their way fairly through their life and to do otherwise, defeated the purpose of the ordinance and in that case, the community loses because “The Living Wage Builds a Better Lawrence.” Melinda Henderson, Lawrence, addressed the issue of removing the wage requirement. She said just having the living wage requirement in the ordinance did not negate all of the other job categories that also needed to be considered when the firms applying for a tax abatement. She said the Tax Abatement Task Force came up with average wages per employment category, but they wanted to make sure those tax abatement firms were still meeting that requirement. She said there might need to be some discussion to reconsider removing the use of KDHR data. She said when reviewing the policy, one of the issues that concerned her was that there was an “escape clause” that even though a company might not meet the wages or the 1:1.25 cost benefit ratio, they still could be granted an abatement if the Commission thought that the benefits were okay. She also had a concern about the idea of a credit/debt bank based on capital improvement investment, number of jobs created and whatever the criteria was for amassing credits that could be used in lean years. She fully appreciated that those credits would not be used to increase an abatement. This was going beyond the scope of modifying the policy to include a living wage requirement and because the current policy was approved unanimously by the previous Commission and had not had that long to be in effect, she was not sure about modifying other aspects of that policy at this time. If it became clear that there needed to be some type of formalized debt/credit system or it needed to be put into a performance agreement, she asked the Commission to hold off on that idea for more discussion at a later time. She pointed out that they were simply tackling the living wage requirement. David Smith, Kaw Valley Living Wage Alliance, said he attended the first Living Wage meeting approximately three years ago and every function for the living wage campaign ever since. He said it was not until this last week that he heard the idea that people who worked for tax abated firms should not be paid the living wage for a substantial probationary period. One of the most positive aspects of the discussion in recent weeks was the unanimous opinion of paying full-time workers and part-time workers the living wage if working for a tax abated firm. What concerned the alliance was the number of hours (480 hours) that appeared in the Mayor’s proposal. He knew the intent was not to build in a loophole for part-time workers, but they believed that was the affect an hourly criterion would establish. At that same meeting, the first proposal was 520 hours which was ¼ of a year. He said if firms were given tax abatements, but not required to pay the living wage until 520 hours had elapsed, in any given workers employment, that meant that someone could work for an abated firm ¼ time for a year and never get one living wage dollar. It could also mean that a single mother with two children could work 6 months at half time and not qualify for one living wage dollar. The alliance believed that if working for a tax abated firm, the tax abated firm should keep its employees out of poverty. He did not hear any compelling reason explaining why tax abated firms were getting large tax breaks and why they should be exempt from paying those people the living wage from the first date that their abatement kicked in. Pat Slick, Lawrence, said if the City adopted a policy where someone had to work 520 hours or 5 to 6 month before they received a living wage, this was a right-to-work state, which basically reads that a person could be fired with no explanation given and that might become policy. A member of the public said he had worked for a tax abated firm for less than the living wage. He knew how common it was to have employees come in as temporary workers and those workers were trainable in four days for almost all the work that was required along with many other jobs. Stephaine Harsin, Kaw Valley Living Wage Alliance, said a lot of those jobs did not require a lot of training. She said there was an exception in their proposal for a bona fide training program and there were criteria out there to evaluate that training. Additionally, there were a lot of bonuses out there given to companies to provide those training programs. There were a lot of bonuses through federal and state government for employing people coming off of welfare, and who were receiving food stamps and subsidies who were coming off of unemployment. She said when the Commission considered whether or not to include the 60 days, the Commission should keep in mind that there were other programs out there. If the companies did not know about them, perhaps it would be something the Chamber of Commerce or the City could help give those companies access to some of those programs. Allen Hanson, Lawrence, said it was his understanding with this movement that living wage was tied to tax abatement. He did not understand why it should be that tax abatement should kick in when living wage should not. It seemed that should come in simultaneously. Vice Mayor Rundle said the Commission was given a packet of materials from the Chamber of Commerce and asked to carefully consider their ideas, but there was no time to digest those ideas. He asked if someone from the Chamber would address any key or new ideas. Larry McElwain, Chair, Lawrence Chamber of Commerce, said the Chamber met with the City Commission to go over those issues. The meeting was to address Corliss’ memo and the Chamber addressed their comments to each of those issues. Corliss said Vice Mayor Rundle inquired into whether or not there were any other living wage ordinances in the Country that would help staff regarding health insurance. He said the research indicated that health insurance benefits did not appear to be specifically defined in living wage ordinances, but they did reflect the additional dollar amount for employees. He said there were situations where there was no change with the health benefits. He said this idea needed to be further researched by staff to look at the language in those ordinances. Mayor Dunfield said he understood the reason to carry on with the KDHR standard although he found from working with that standard, it was not at all easy or clear. He said the point was well made that to remove that from the policy was going beyond what was being discussed. Commissioner Highberger said there were substantial amount of points in the Mayor’s memorandum that the Commission was probably in agreement with, but he would like discussion on not including other public subsidies. He also would like to address the question of whether the abatement should apply to the project or the firm. Mayor Dunfield said the question of project versus company evolved around whether or not to make this a retroactive policy, but he thought it should not be retroactive and it should apply only to new abatements. If a company was already in Lawrence doing business, they should not be included. He did not want to see the possibility of a company coming to Lawrence and asking for an abatement on a portion of their plant because then it would become a loophole type of situation. Commissioner Hack said what was being focused on was existing Lawrence companies. When looking at the economic development data, 85 or 90 percent of job creation in this community came from existing businesses and the Commission certainly did not want it to be a disincentive to expand. She said the Commission would be placing the wage floor restrictions on what the abatement was asking for or what parcel of that company was being abated, but not retroactive to the remaining portion of the company. Commissioner Schauner said a practical question was segregating or making discrete decisions about which part of existing companies expanded by virtue of an abatement and which employees were covered versus those that were not if there was any back and forth of assignment of employees from the company from an existing operation to a newly abated expansion and then back again. He wondered if there would be questions about the book keeping side of that issue. Corliss said Commissioner Schauner identified a good issue. He said the way staff envisioned this type of situation was that there would be a performance agreement that would identify those positions with the level of specificity that staff could monitor to accurately indicate whether or not that employee was at the wage floor. He said there would need to be some mechanism where the company would report that those number of employees were part of that abated project and that those wages would be monitored and the company would need to report on those wages. He said that might take away some of the flexibility of a company. Commissioner Schauner said it had not been his understanding that a current company that had an abatement and did not apply for another abatement, that there would be no retroactivity for that company with respect to a living wage. He said the question arises when that same company came back for a second or additional abatement then was there any retroactive effect on that company for its prior abatement activities. If in fact, the performance agreement could be drafted in a way that identified, with some clarity, which employees or activities were going to be newly abated and that would resolve that issue. Commissioner Hack said when the Commission went through applications for an existing company wanting to expand there was clear information on the number of employees this abatement would bring, the investment, and expansion. She said the performance agreement would deal with that company’s expansion and that was the abated part that it would apply to. The company operating under a previous abatement, the previous portion of that abatement would not apply. Commissioner Highberger asked if under the current policy, the fair wage requirement applied only to the project. Commissioner Hack said yes. She asked if that was the way the Board of Tax Appeals looked at that also. Corliss said the Board of Tax Appeals did not look at wages, but the abated portion of the property. Vice Mayor Rundle said there were a number of tax abated firms that expanded. He said if the abated site meant only the new addition or expansion that would get into one of several complicated record keeping issues that troubled him. He said if the expansion created two jobs and there were 300 employees and those employees were earning below living wage, he did not think the Commission should be offering a tax abatement to that firm because their labor savings and other costs should take care of their business expansion. He said if a company had two site and one of those sites wanted to expand, then it wouldn’t apply to their other plant. Commissioner Hack said the record keeping would not be any different. She said there were a couple of companies that had two or more abatement. Vice Mayor Rundle said staff never had to monitor wages. Mayor Dunfield said up to this point, staff had looked at things by project. The models that were used to create the benefit costs ratios and the rest of it were project specific. Vice Mayor Rundle said this was a way to decide who would be eligible for abatements. If a firm and the majority of its existing employees were below the living wage, then he did not want them to receive an abatement. He thought the Commission would want to give abatements to companies that paid all of their workers a living wage. Commissioner Highberger said obviously if the City had a sizable company that wanted an abatement for a small expansion project and their workers were paid below living wage, then it would be a substantial disincentive to an expansion. On the other hand, for a company that was complying with the City standard for an abatement and were corporate citizens, paying all of their employees a living wage already, the costs of compliance over the whole firm would be moderate. Commissioner Hack said it was important to keep in mind that the Commission did not want to cost people jobs. She said there were steps that were required before that abatement was granted and that would certainly be part of the analysis as to whether or not an abatement would be granted to that particular company. Vice Mayor Rundle said the Lenexa policy did not allow abatements if that company did not pay over $10.00 an hour. He asked if there were other cities that had a wage floor. Commissioner Hack said Lenexa was not included in the survey. Mayor Dunfield said what he proposed was a compromise and a compromise was necessary in this case. If the Commission was saying they were looking for a win/win solution then the Commission needed to make sure that what they were doing did not penalize businesses for doing what they had understood they could in the past. Commissioner Schauner said he thought the Commission had an agreement that this would be an ordinance that would cover both the tax abatement policy and the living wage concept and that ordinance would cause to be created a performance agreement between an abated company and the City setting forth the criteria of the wage floor. He said all employees of a company would be paid no less than the lesser of the living wage or the average wage as determined by KDHR with some exceptions which were: 1) Those exceptions would be those persons in a legitimate training period for a period not to exceed 30 working days or any part thereof; 2) Part-time employees who work fewer than 100 hours per calendar year; 3) Those subcontract persons whose covered employees whose daily work at the workplace was integral to the abated firms work and to serve as a disincentive to subcontract out janitorial and housekeeping employees. He said an additional condition would be that the abated company would pay health insurance benefits of at least 80% of the costs of a single policy or in alternative, at their discretion, a $1.50 per hour to that covered employee. The City use the Public Incentive Review Committee (PIRC) for the agency to collect this pay data and the PIRC would be responsible for determining whether the abated company was in or out of compliance and would make a decision about the penalty to be assessed consistent with the ordinance/living wage language and would report that decision to the City Commission that would in turn have the authority by a supermajority to overturn a recommendation of a loss of an abatement. Commissioner Schauner suggested that the penalty for first year non-compliance would be a dollar penalty of three times the money that was not paid in compliance with the living wage commitment. He said an example was if a company was $1.00 below the living wage amount it would be $3.00 in damages. He said the Commission could talk about where that money should go, but he believed some of it should go back to the employee as back wages assuming that employee was findable under reasonable effort. He did not favor a credit or banking system because it tended to go back and rework the entire living wage tax abatement issue. He said if industrial revenue bonds were used to construct infrastructural or other advantages to a company in lieu of tax abatements, that company receiving that IRB advantage or infrastructure assistance would be considered a covered employer under this proposal. Finally, the company that was out of compliance for a second consecutive year would suffer not only the money damages, but also suffer some loss of their abatement. Vice Mayor Rundle pointed out that Commissioner Schauner stated that the employee should be paid the “lesser of” the living wage, but more likely meant, “greater of.” Commissioner Schauner stated that the employee would be paid the greater of the living wage or the average wage as determined by KDHR. Commissioner Hack asked if Commissioner Schauner was asking if the Commission should go back to KDHR for the entry level position. Commissioner Schauner said the minimum would be $9.53 an hour and if KDHR was a dollar per hour figure then that would be the number that would be applied which would be consistent with the analysis under the tax abatement policy. Mayor Dunfield said there were a few items on Commissioner Schauner’s list that he could not accept because they appeared to be punitive towards businesses and those items were not addressing the living wage issue, but finding ways to hurt businesses. The idea that a company would be penalized $3.00 for falling short $1.00 in its agreement without any reference to the economic circumstances or any number of possible reasons for them to fall short, in a given year, was clearly punitive and it couldn’t possibly be interpreted by a business. He said the reason why he wanted to keep the enforcement focus on the abatement itself was because that was what the living wage policy was about. If the company wanted to give up its tax abatement then that company was free to pay its employees what it wanted to pay them. Commissioner Schauner asked Mayor Dunfield if he could talk about those pieces that he listed where they were in agreement. Mayor Dunfield said he was in agreement with most of those issues, but he was trying to focus on those issues that he was not in agreement with. He said in addition to the issue of punitiveness, the other issue that he thought was not sufficiently addressed by the Living Wage Alliance proposals or by Commissioner Schauner’s suggestion was the need to give businesses some flexibility to respond to changing circumstance, unforeseen issues, and sudden upturns or downturns in their business situation. He said that was why it was important to allow some flexibility in terms of the number of hours that could be worked before the living wage set in and why it was important that the credit banking was a good idea. He thought the credit banking was one of the better suggestions that had been addressed because it provided a way to recognize that a company had accomplished more than they needed to. Commissioner Hack agreed with Mayor Dunfield. She said the Commission should not look at how to punish or create obstacles to those companies. She said the Commission needed to work with those businesses. She agreed on 60 working days for part-time workers rather than using hours because the working days would allow for legitimate training programs and seasonal employment as conditions merited. She said concerning the health insurance issue, she would like the Commission to discuss whether or not it was in compliance with the health care policy that was in existence with that company. She said there were some issues that might need to be incorporated as part of the cost benefit analysis. She was also concerned about the idea of placing a company into a penalty phase and she thought there should be due process. She suggested that idea be addressed with the Public Incentive Review Committee. Vice Mayor Rundle said the City Commission had the power of recognizing those hardships and that penalty would not go into effect until after a Commission vote. Mayor Dunfield said the suggestion was that the revocation was not automatic. He said there would be a hearing before the Commission. Vice Mayor Rundle asked Mayor Dunfield if his suggestion took the punitive edge off his ideas. Mayor Dunfield said it took the punitive edge off to some extent, but what the Commission was talking about was a tax abatement policy and it seemed that a step outside a company’s abatement in a penalty phase clearly was punitive. Commissioner Schauner listed the issues that he thought the Commission agreed on which were: • Subcontractors exclusions • IRB’s and infrastructure • Performance agreement • Ordinance • Obtain an in-house auditor through the PIRC He also listed the disagreements which were: • Training period • Part-timer exclusion (some limitation or threshold on hours) • Health insurance Vice Mayor Rundle asked if industrial revenue bonds were ever used in that fashion. Corliss asked the Commission to keep in mind that IRB’s were a frequent vehicle for tax abatement. He said what happened with an industrial revenue bond was completely removed from the tax roles. The City then entered into a payment in lieu of tax agreement which then reconciles with whatever tax abatement the Commission decided. There were a few instances where the City had done IRB’s for not-for-profits (e.g. Lawrence Memorial Hospital, Drury Place). He assumed because those entities were already property tax exempt, that the Commission was not including them. Vice Mayor Rundle asked if that was a catch twenty-two if it was excluded. Commissioner Schauner said he suggested including IRB’s as an equivalency for a tax abatement if they were used for the purpose of the infrastructure creation in lieu of the tax abatement. Mayor Dunfield said what was being suggested from Commission Schauner was that IRB’s that were used as a vehicle for a tax abatement. Commissioner Schauner said correct. He was signing off on Corliss’ concept that was stated in his memorandum. Corliss stated in his memorandum the following: “There appears to be consensus that the wage floor requirements will not cover industrial revenue bond issuance, unless the IRB recipient is receiving a tax abatement for economic development purposes.” Commissioner Schauner said he thought it was important that the Commission provide some agreed upon limitations on training periods. He thought it should be days not hours, along with part-time help. Commissioner Hack said the 60 working days provided balance between what the Commission was hoping to accomplish without costing jobs. Vice Mayor Rundle said that was an accounting processes, somehow they would need to report on every individual employee and they could each have a different time period on the calendar. He called around to temporary agencies that had a lot of experience in trying to get a handle on what was a normal training period, but there wasn’t one. It varied from job to job, but it seemed most companies had a probationary period that was 90 days. If the Commission was trying to promote full-time employment, it seemed that the Commission was placing far too much effort in finding ways to accommodate the part-time and temporary workers. He was in favor of 90 calendar days. Mayor Dunfield was willing to make it a one time rather than once out of every twelve months and then 90 calendar days and treat it like a probationary period. Commissioner Hack had a concern about repetitive summer jobs because that person might not have that option on the second summer because the company simply could not afford to pay that kind of salary. Mayor Dunfield said part of his reason for doing that was because of the Living Wage Alliance Proposal talked about a specific exclusion for summer jobs and he was trying to get around from making specific exclusions for specific cases, but maybe they wanted to say 90 calendar days and in the case of student summer works, the bets were off. Commissioner Hack said she hated to see the Commission put anything in place that would impact people’s ability to get a job in a negative way. She said the Commission’s goal was not to create more part-time jobs. She did not believe manufacturers were interested in creating more part-time jobs because that was not where the strength of their workforce was, but in the full-time worker that the company had invested their training in. She was not sure by putting this in, the Commission was telling all of those abated firms to rotate their employees every 90 days. She said the Commission needed to be cautious about the possibility of an annual exemption for that seasonal worker. Vice Mayor Rundle said someone accused the Commission of spurning entry level jobs, but that was not the case. He said that the Commission did not need to subsidize those jobs. Even if the Commission made those exceptions for part-time or seasonal, the Commission was basically doing that. If the Commission spent their tax abatements on the firms that paid all of their jobs at or above the living wage, the Commission was spending wisely. He said the Commission was spending far too much time on the entry level aspect when the Lawrence economy had been missing $200,000,000 a year because the City’s wages were below the State’s average. That money would do a lot in the community such as people being employed at entry level jobs, spending money on houses, and spending money on businesses. The emphasis should be that the Commission was going to use this tax abatement policy to attract a higher caliber of jobs. Commissioner Highberger concurred with Vice Mayor Rundle. He said it was a good faith effort by the Living Wage Alliance to suggest a 60 day bona fide training period exception, but the easiest way to handle that issue was with no exception at all. It would include every type of employee being paid a minimum of $9.53 an hour. Anything else encouraged creation of part-time and temporary jobs. He was willing to look at some type of small window, but he agreed with Vice Mayor Rundle. Commissioner Hack asked if the Commission remembered the discussion with Dave Loch from the Manufacturers Network when he indicated that was not the case and it was a tricky issue to talk about, but the manufacturers would prefer not to have part-time workers. She said those were the individuals that were not the safest workers because they were going to invest their time and money in people who were going to be there full-time. To allow someone to come in and have a training period, whether that was 60 days or 90 days, was beneficial to the worker and to the company. That was the balance that they were trying to work through which was the company and the worker. To be put in a situation where there was no training time, honestly, would hurt that worker because what would ultimately happen was the full-time worker was going to absorb those jobs with more overtime and maybe the company becomes more efficient and would not hire any part-time workers at all. She said the Commission needed to protect those part-time workers and the companies that hire them. Moved by Schauner, seconded by Rundle, to extend the meeting until 10:30 p.m. Motion carried unanimously. Commissioner Schauner suggested that every employee, first day on the job, would receive $9.53 an hour. He talked about what exceptions the Commission wanted to create. If the presumption was that every employee received $9.53 an hour, he asked was there some legitimate public policy reasons to create an exception or two and if the answer to that was “yes”, what were those one or two exceptions. He heard Commissioner Hack’s concerns about people looking for occasional part-time work, but what sort of window did they want to create for that sort of exception. Mayor Dunfield said the simplest answer to that question was those companies needed that flexibility of, at least, a probationary period so that company could try workers out. He asked if the Commission wanted to make the probationary period a 90 calendar day. He said there needed to be some recognition that there was that type of initial getting to know one another type of situation in any job. Again, the Commission was not being friendly or being realistic about businesses if the Commission did not recognize them. Commissioner Schauner asked if the Commission needed to put a number on the probationary period in their current discussion and direction to staff. Commissioner Highberger suggested a one-time 60 calendar day probationary period. Commissioner Schauner said a 60 calendar day probationary period was too long. He said a bona fide training period had other economic benefits available from various levels of government. He would like to get that beginning person into a better paying position sooner than 60 calendar days. Vice Mayor Rundle asked if a bona fide training program in a particular profession could be longer than 60 days. Stephanie Harsin, Kaw Valley Wage Alliance, said if someone was enrolled in bona fide training program it would be similar to a university, secondary school, public school system, or vocational school. There was a list of both programs on file. She said the state subsidizes according to that person, 50% of that employee’s wages and the business paid 50%. The state through federal funds and some of their own funds paid 50% of that employees wages which lasted for 6 months. Whether or not the training program last 6 months, she did not know. She said if a business wished to have their training included in that, then the responsibility rests with the business to develop that training program and to apply for bona fide training program status. She suggested contacting the Workforce Center on South Iowa, the State Department of Social Rehabilitative Services, or State Labor, and they would be able to give the exact criteria needed for a bona fide training program. She said those programs provided more skills to the worker so they were able to go to a better job. There were also a number of other programs out there that provided assistance of a similar nature. She said businesses were getting some support for those introductory periods for a number of different types of employees. Commissioner Hack asked how long a training time period was. Shirley Martin Smith, ADECCO, said it depended on the company. Usually companies anticipated a 90 day probationary period to see if that person had learned the job, performed satisfactorily, and attended work everyday. She said speaking from experience it was typically a 90 day probationary period. Mayor Dunfield said the other area that had not been resolved was the actual mechanics of enforcement. Vice Mayor Rundle said if a company compared the loss of an abatement against their wage saving, it would be better to pay cheaper wages and take the cut in the abatement. If a company saved more wages then there whole abatement, then that company probably should not have an abatement. Commissioner Highberger said the formula that was addressed would cover all the realistic cases. He said for most firms, the penalty assessed would exceed the amount of money that would be saved in wages. He was in favor of keeping the 1:5 ratio and doubling the ratio applying it to the abated amount. Commissioner Hack moved that the Commission accept the Mayor’s proposal with the following changes: 1) Use 90 calendar days as the threshold for a probationary period; 2) exempt part-time workers for multiple years at a summer job; 3) the health insurance adding subject to existing health insurance company guidelines that the company had in place; 4) work through the credit with the companies for performance issue; 5) continue to look at KDHR standards when reviewing wages as a condition for receiving an abatement; and 6) and accept staff’s language on the IRB’s. Commissioner Highberger seconded the motion, but with a friendly amendment. He could not agree with the 90 calendar days for a probationary period because it was too high. He could not think of a way that part-time summer worker would not become a big loophole. He said concerning health insurance, he asked if they intended to include the alternative $1.50 contribution. He seconded the motion with the friendly amendment of 60 calendar days and not 90 days. Commissioner Hack agreed to amend her motion to change the threshold period from 90 to 60 days. Vice Mayor Rundle thought the review should be performed by the PIRC. He said the actual data could be obtained by an accountant if necessary. He said the credit system was a major departure and the discussions had been limited to small group conservations. He suggested that the discussion about a credit system should be addressed scheduling public hearings and by the Public Incentive Review Committee. He also suggested that another task force be formed. Mayor Dunfield said the Commission was talking about credits only in relation to the wage issue. He was not interested in bringing in to their current discussion those other possible credit and penalty issues having to do with capital investment and numbers of jobs. He believed that the intent was to discuss credits only relative to the living wage to allow a company that had demonstrated that it wanted to be paying a living wage a little bit of flexibility in case of a downturn. Vice Mayor Rundle said that any difficulty a company was having could be handled by the City Commission who would recognize the hardship and not impose the penalties. Commissioner Highberger thought the Mayor’s suggestion about credits was in reference to the Chamber’s proposal about penalty and credit mechanisms for investment and job creation rather than for the wage angle. If it was intended to address the wage issue, he agreed with Vice Mayor Rundle. Commissioner Hack amended her motion to eliminate the issue of credits from their discussion with the promise that the PIRC in another venue would discuss the potential for some positive outcomes in the credit area. Commissioner Highberger was interested in considering that credit issue. He said that idea could be beneficial. Mayor Dunfield said the idea of 90 calendar days for a probationary period was important. In thinking about how businesses operated and how employees made that transition from trying out new jobs to becoming part of a company, he thought it was an important relationship that had to develop. He thought Vice Mayor Rundle’s suggestion of 90 calendar days was good because it had a basis in industry standards. He said it was not as arbitrary as his 60 working days proposal even though he thought functionally they were similar. He said the repetitive aspect of the same individual, he was willing to let go because after those employees had worked once for a company, they would presumably fit right in, which would make them more valuable and productive. Vice Mayor Rundle asked if there was any concern that training wage was inordinately low. He said the Commission would know through the annual review the amount of people a company would hire for that 90 day period and whether or not they were let go after that period. Commissioner Highberger suggested the possibility of addressing the percentage of part-time labor and turnover numbers in the performance agreement. Mayor Dunfield said Commissioner Highberger’s suggestion was useful. He expected what the Commission would find as new abatement proposals came to the Commission that the quality of the proposals would be such that most of those questions would become moot anyway. Commissioner Schauner said the more the Commission tried to fine tune this issue, the less simple, less understandable, less enforceable, and the less cost effective was the whole process. He reiterated that if the Commission started with a proposition that every employee was paid a living wage in an abated company and create one or two exceptions, it made it a lot simpler for everybody. He said the Commission was creating a nightmare. Mayor Dunfield said that was why he liked the 90 calendar days. Commissioner Schauner said he could support a period of time, but he thought 90 calendar days was too long. He could support 60 calendar days. He supported the following paragraphs in the Mayor’s proposal: paragraphs 1, 2, and 3; 60 calendar days in paragraph 4; the non repetitive piece in paragraph 5; paragraphs 6; paragraph 7 if they added $1.50 an hour as the trade off; and an in-house review mechanism. He did not understand the two step enforcement procedure because it would make support or opposition easier. He thought the credit piece should be taken off the table for more detailed discussion about what those credits would be. Commissioner Hack asked the Commission if they wanted to amend the motion to indicate in the performance agreement, the in-house review mechanism. Mayor Dunfield thought he heard that there was no objection to the idea that the data could be collected outside. Commissioner Schauner thought the data should be collected inside and reviewed by PIRC or City Staff. Commissioner Highberger asked if there could be clarification on the non-repetitive piece in paragraph 5 of the Mayor’s proposal. Vice Mayor Rundle said it was a one time exemption. Commissioner Highberger was supportive of the third party review mechanism to relieve concerns about confidentiality of business information. He suggested that the PIRC members sign a confidentiality agreement. Corliss said the PIRC could not sign that type of an agreement because they were a public body. Commissioner Highberger said he had a concern, unless the Commission could find a better way of screening proprietary business information. Commissioner Schauner said this was not proprietary information, but information on how much the companies were paying their employees to satisfy the tax abatement. Mayor Dunfield said the concern was about individual names. Corliss said he assumed that the salary information would need to be obtained for all of the individuals, their positions, number of hours they worked, and the wages they were paid. In order to audit a wage floor requirement, he saw that as the minimum information that was needed. Commissioner Schauner asked why those employees couldn’t be given a number and the company would keep the name for cross reference. Commissioner Highberger said the company’s entire payroll costs would be out on the table and from a competitiveness standpoint that created some issues. Vice Mayor Rundle asked if a review could be done by staff and staff could make a report that would be meaningful to the PIRC for recommendations. Corliss said he did not think the City had open records protection for that information. City staff was going to need help on this issue and staff would need someone who had some expertise in looking at those numbers. If there were a number of firms involved, the City might want to retain an accountant to go over those figures. He said it was the Commission’s decision whether or not that information was publicly disclosed or not. Once that type of information was obtained, he was not aware of any open records exception that would allow the City to have that data and/or the PIRC, but no one else could. He said that was the reason for the third party auditor. Mayor Dunfield asked if that issue could be left open. He said the clear intent of the Commission was that they wanted to maintain the confidentiality. He said the Commission did not want information released publicly in order for those decisions to be made. If that required legally a third party, then the Commission might need to go that way or find other ideas, but the intent was confidentiality. Moved by Rundle, seconded by Schauner to extend the meeting until 11:00 p.m. Motion carried unanimously. Vice Mayor Rundle asked if staff could research and find out how other living wage communities had grappled with this type of issue. Corliss said yes. Corliss wanted to address the KDHR data. He said one of the values of the ordinance was that it would then tell the covered employer what that wage floor was. It would also be telling the covered employer what they were required to pay pursuant to the KDHR data. The information would need to be forecasted to the covered employer with some ability for them to react. He said there was a timing mechanism on the KDHR data. He was familiar with when the federal poverty information was available and when they could calculate the wage floor and announce it to the company. He said the KDHR data would apply to all employees. Corliss asked when would the City receive data from KDHR that would show what the average wage for Douglas County was for 2003. Frank Reeb, Administrative Service Director/City Clerk, said that data was approximately a year old and dated. Vice Mayor Rundle said that data could be 18 months old, but that was a benefit to the firm the City was trying to attract. Mayor Dunfield said he understood that the use of the KDHR data and the use of the language in the tax abatement policy about average or better wages, stayed as what was in the policy at this time. Corliss said the language needed to be changed if the Commission was going to require that information to be applied on an annual basis as opposed to qualifying criteria. He asked what was the Commission’s intent in analyzing the company on an annual basis as far as the KDHR requirement. Commissioner Highberger said the firm paid the employee’s wages and there was no follow up or enforcement. Corliss said the information was presented to the PIRC and they made a recommendation to the City. Mayor Dunfield said that would stay the same. Corliss said there was no requirement in the ordinance that the employer pay at the KDHR rate. Vice Mayor Rundle said that was living wage or average wage which ever was higher. Corliss said if the average wage was higher then the Commission would be mandating the average wage. Mayor Dunfield said this language about the KDHR standard was that they did not want to eliminate that from the current tax abatement policy. He said they did not want to change or modify that language, they just did not want to eliminate it. Commissioner Schauner said the living wage would be $9.53 an hour or if that entry job classification and the KDHR data paid more, then that job would be required to pay more whatever that job classification was for that entry level position that would otherwise be subject to $9.53 an hour. He said they did not want the $9.53 an hour to become a wage ceiling, but a wage floor. Commissioner Highberger said he did not think they were contemplating applying some type of penalty mechanism for failure to meet that wage. Vice Mayor Rundle said they did not want a firm coming to Lawrence paying their employee $9.53 an hour when a competing firm, paying full taxes, was paying $12.50 for the same job. Mayor Dunfield said the current tax abatement policy covered that issue. It did not apply the same specific penalties, but it provided for a review mechanism whereby the City Commission could make decisions about the continuation of an abatement or not and that seemed to be sufficient in that area. He said from having worked with the KDHR data on the PIRC committee, if they were worried about adding complications and difficulties of interpretation, they were opening a snake pit if they tried to apply that because it was simply not that easy to lineup every job with a specific category and pay rate. Vice Mayor Rundle said it was always his assumption that it would apply to the average wage and the Commission would enforce that, otherwise, they would be allowing a firm to have an unfair advantage and this whole discussion was about fairness. He said the Commission did not want to penalize people who were paying full taxes and full wages by giving a tax abatement to someone who could pay for the same job category at $9.53 an hour. Commissioner Highberger agreed, but he did not see any way to impose harsh penalties based on wages and job categories. Mayor Dunfield said again, that intent was already contained in the language of the ordinance. Commissioner Hack said it appeared there was agreement to accept the Mayor’s proposal as the following: accept paragraph 1; paragraph 2 add staff’s language on IRB’s; accept paragraph 3; paragraph 4, use 60 calendar days; paragraph 5, a one time exemption; accept paragraph 6; paragraph 7, subject to existing health insurance company guidelines that the company had in place or an addition $1.50; paragraph 8 would include the use of the KDHR standard; paragraph 9 receive staff’s input on the 3rd party review mechanism versus in-house review; accept the 2 step enforcement procedures outlined by the Mayor; and the credit issue would not be in this motion, but would be something that would be addressed at a later time. Vice Mayor Rundle said the only clarification was that the health insurance was in the company’s guidelines. Commissioner Hack said yes, which was the companies health insurance policy guidelines. She said there were different health insurance policies within various companies and their guidelines would be different. Commissioner Schauner suggested that it should be the employees’ option, once they qualified for the $9.53 an hour, that they automatically get their choice of the health insurance or the $1.50. Mayor Dunfield said tew; accept the 2 step enforcement procedures outlined by the Mayor; and the credit issue would not be in this motion, but would be something that would be addressed at a later time. Vice Mayor Rundle said the only clarification was that the health insurance was in the company’s guidelines. Commissi