JULY 23, 2009
Chairperson Neuzil called the Johnson County Board of Supervisors to order in the Johnson County Administration Building at 10:46 a.m. Members present were: Pat Harney, Larry Meyers, Terrence Neuzil, Sally Stutsman, and Rod Sullivan.
Hills Mayor Russ Bailey said Stutsman and Harney recently visited Hills to discuss questions related to the 28E Agreement for the City of Hills and in reference to the Oak Crest Hill Road improvement. Bailey said last week, the Hills City Council had voted down the 28E Agreement and now have a few questions to discuss with the Board. Bailey said at the last meeting, the Board had made it clear they were going forward with the project with or without Hills and that today is the deadline. Neuzil said they are meeting now because the Board was not able to collectively write a response to Hills outside of a public setting.
Neuzil asked for someone to present the first question. Assistant County Attorney Andy Chappell said the first question deals with how Johnson County treats the City of Iowa City with respect to Oak Crest Hill Road and is Hills being treated the same. Chappell said that he and County Engineer Greg Parker agree that Hills and the City of Iowa City are treated differently with respect to shared roads on which there is shared jurisdiction. There is a maintenance agreement with Iowa City that covers shared jurisdiction roads. The draft agreement Chappell prepared was based on the last version of the Iowa City agreement that was adopted. The only difference was the last page. On the attachment is where the different roads are parceled out to lay out the best routes for traffic and determine who will cover each part. This is the same process with respect to road maintenance that has been proposed to Hills.
Chappell said specifically regarding Oak Crest Hill Road, Iowa City has absolutely no jurisdiction over Oak Crest Hill Road because there is no place where the City is adjacent to Oak Crest Hill Road. Iowa City would be adjacent if Hills had not annexed the railroad property up to the southern boarder of Iowa City. The only place where Iowa City would be adjacent to Oak Crest Hill Road is where the railroad is the only property between Iowa City and Oak Crest Hill Road. There is no Iowa City property on the west side of Oak Crest Hill Road; that is all County property. As soon as it comes off of Riverside Drive, Iowa City has no property to the west, and immediately to the east is the railroad which is Hills property. Hills Council Member Thomas Kirkpatrick said that property was de-annexed to Isaac Walton League Road. Chappell said he has a different understanding and that possibly Attorney Jay Honohan could provide more information. Honohan said that was supposed to be part of the Fringe Area Agreement but was never done. Hills Council Member Steven Hill said he thought Iowa City wanted to de-annex it. Hills Council Member Merle Hill said they wanted it when they ran the water main through. Honohan said Iowa City never completed that and what everyone might be thinking about is a 28E Agreement with Iowa City granting jurisdiction of the zoning and platting north of Chad Murphy's. Hills has never de-annexed that property.
Neuzil said the question still to answer is would the County treat the City the same as Hills, and that answer appears to be yes. Chappell said yes. Sullivan said with almost every city in the county, there is some agreement regarding shared roads. Chappell said he has assumed there is an agreement with every municipality but he is not positive in this situation. Sullivan asked if it is the County's intent to have an agreement and Chappell agreed. Chappell said it may be that since there are only one or two roads in common, Hills hasn't done much annexation whereas Tiffin is doing a lot and therefore receiving more attention than cities not annexing. He said that there was some question as to whether the County had an agreement with the City of North Liberty, and he said he would be really surprised if one did not exist; there are so many roads with common borders.
Chappell said the second question deals with the transfer of jurisdiction road, meaning it was gifted to the County by the State. Along with jurisdiction came some remuneration to update the road and maintain it. The numbers he has seen indicate the State agreed to give the County $250,000 per year for ten years to maintain those 23 miles of road. He thinks that Hills’ question is: if Hills has jurisdiction of the road, shouldn't Hills receive some portion of the $250,000. From an equitable standpoint, that is an interesting question. Ideally Hills would have received some remuneration from the State if the State had known to correctly give them some portion instead of lumping it all together. Chappell said he thinks Parker's initial response was that the money the County will spend on those 23 miles of roads will far exceed the $250,000. If you run the numbers, factor in the linear footage of the road that Hills has jurisdiction over, and the money received it would be $37,000 over ten years. That doesn't factor in that the County has maintained it over the last five years.
Chappell introduced a policy question stating that in the original proposal to Hills, Hills was not asked to foot any portion. Initially Hills was asked to pay a portion of construction costs but not the project supervision or design costs. The County paid for that completely. The question may be asked if every dollar needs to be examined. The question was shouldn't Hills be entitled to some of the money the State gave the County for this road. Chappell thinks that is policy discussion for the Board to decide. Stutsman asked what the design costs were on that road. Assistant County Engineer Ed Bartels said generally design costs are 7% of the project cost and he thinks the project cost is $2.5 million. Sullivan asked if, when the bridge south of Hills was replaced just a few years ago, he seemed to recall that was $1.5 million. The State did not do the Cities or the County any favors with this transfer. They should have transferred the roads in good shape.
Bailey said the average person might think that's not much money, but to a small town, that is a few months wages. He said he appreciates what the Board has done for Hills already. Hills has a $300,000 budget and even though they can pay it over three or four years, it still puts a big strain on their budget, particularly when the roads inside Hills City limits will be neglected. He hears from residents asking him about local needs and he replies that some projects will have to take a back seat for a while. Sullivan asked him if it would help to add another year to the payment schedule. He replied it would help immensely. Harney said he conferred with Parker and they both are willing to work with Hills to get the project completed. Neuzil asked for a total cost report of what Hills is expected to give. Bailey said the cost estimate is around $240,000. Harris said that was for the original proposal and the last estimate was $2,60,000.
Neuzil asked Bartels what Secondary Roads was interested in regarding a payment plan. Bartels said the first payment would be due one year after completion. Honohan said the last draft allowed Hills to commence the first payment one year after the date of completion and two subsequent payments annually. Chappell said the latest draft he prepared stipulated the first payment was due within 30 days of completion and the second and third payments in subsequent fiscal years.
Chappell suggested the information they were relying on was a discussion at a Board meeting where they talked about adding a fourth year so Hills would not have to pay anything during the first year. That discussion was never formalized and he never received any consensus from the Board. Honohan said that was his understanding of the last discussion and Chappell is right regarding the first draft. Neuzil said it sounds like the Hills Council would like a four-year payment schedule with the first payment due one year after the completion date. He said ultimately, everyone is trying to work together on this shared road. This will have an impact on the Secondary Roads budget.
Harris said he wonders if there will be any hidden costs or whether something was overlooked and the cost exceeds $260,000. Stutsman said that couldn't happen. Neuzil said once the bid is accepted, the price will be set. Hill said the bid just went up $5,000 from the last time. Chappell said there could be cost overruns. He thinks the $260,000 includes contingencies, which is meant to address cost overruns. Neuzil said they hope $260,000 is the worst case scenario for Hills. Bartels clarified that when Secondary Roads completes their construction, the estimate provided is based on what they expect. The latest estimate available was prepared by Bartels based on bid prices from Streb Construction. The price per item will not change, but if additions or changes will need to be made, they would present those to Hills but he does not foresee that happening. He said he does not expect to exceed the $260,000. Hills’ share would be based on the actual footage in the City they would normally be responsible for. Kirkpatrick said that Maintenance Superintendent Kevin Hackathorn has explained all this to them and it is clear and asked who conducts the audit. Bartels said the Iowa Department of Transportation.
Stutsman said the Board could say they will assess Hills the project estimate and then have the County absorb anything over $260,000. Sullivan said he has no interest in creating any burden for the City of Hills; however it is important for Hills to pay for the section in Hills whether this takes two or eight years and he is open to a proposed payment schedule from Hills. Harney agreed but said there are other communities with the same issues and they need to provide equal treatment. The Board seems willing to accept a four-year plan from Hills. He reminded everyone that the County is not making any money on those transfer dollars. Stutsman said she is willing to stipulate a fixed dollar amount in the agreement so there are no surprises. She is interested in a four-year plan but no longer. Meyers said that sounds good to him too.
Chappell said he will write the agreement and asked Hills when they want to make the first payment. Russ said the four year plan with three payments is best for Hills. Kirkpatrick asked when the results of the sales tax will be evident. Sullivan said the first one will be in August, 2009. He said a four year plan would mean three equal payments of $86,600. Kirkpatrick asked for the expected date of completion. Bartels said late October or early November, 2009. He said they started on July 20, 2009 and have 60 working days to complete the job. Working days do not include weekends. Neuzil projected the first payment would be due on November 1, 2010.
Harney suggested the Hills City Council meet to make a decision and then report back to Chappell. Stutsman said that if Hills receives a windfall from the sales tax, she would like the contract to say they can pay it all off. Honohan said the set price would be $260,000 or less. Kirkpatrick said he'd like to discuss the terms with the full Council at their Monday night meeting before a draft is prepared. Harney said okay however, the reason for the deadline is they needed to know whether any changes would be made in the contract, for the contractor. Chappell agreed with the schedule and reminded that there are a few more weeks before a penalty would be assessed. The Board can take formal action on July 30, 2009. He asked Hills for the terms: four years, and do they want the amount evenly distributed over the three years. Sullivan said he doesn't mind how the money is spread out but he is concerned with putting a cap on it. Chappell asked Board members to express their opinion about a cap. Stutsman said the possibility of finding something unusual in that area is minimal. Chappell said the contract is structured to state Hills pays for the cost attributable to their portion of the road. The contract with Streb Construction is in unit prices. Those unit prices are fixed but what is not fixed is how many units it takes to complete the job and that is where the estimate comes in. If there are more or less units attributable to Hills, that is where the cost will fluctuate.
Neuzil summarized that the Board and Hills are comfortable with a final payment four years after the completion date. This will be broken down into three payments with the first payment due one year after the completion date. Chappell then asked if they want to cap the cost at $260,000 or just describe it in the agreement as "cost". Stutsman said she is comfortable with capping at $260,000. Kirkpatrick said the $260,000 has a contingent built into it. He suggested a sentence be included that states "if" the project exceeds the cap, they will re-negotiate the terms of payment. Neuzil and Sullivan said that seems fair.
Bartels said that the Curtis Bridge Road project is an example of how the unexpected can happen on any project. While he expects no problems with Oak Crest Hills Road, no one can be certain. From Secondary Roads budget standpoint, if the department does have to absorb any unforeseen costs it would obviously affect their Five-Year Road program and their ability to maintain County roads.
Sullivan said he prefers the option of renegotiation if costs exceed the $260,000. Chappell said if they are going to cap it at $260,000, and if the project comes in less than that, are they still paying $260,000. Kirkpatrick, Neuzil, and Sullivan said no. Kirkpatrick said Hills expects to pay the actual cost.
Bartels said they are currently under construction. They did start on the north end which buys them additional time but does affect the detour. They are hoping to move along as fast as possible and look forward to next Thursday to formalize the agreement terms. Stutsman asked Bartels to clarify if at least one lane was still open on the road where the "Closed to Thru Traffic" signs appear. Bartels said it is closed and they want traffic to use the official detour on Highway 218 to protect the workers and local residents who have to travel the road to get to their homes. Patrons can also travel the road to get to local businesses. Bailey thanked the Board on behalf of the City of Hills.
Adjourned at 11:30 a.m.
By Nancy Tomkovicz, Recording Secretary