CITY OF SHAWNEE
CITY COUNCIL MEETING
MINUTES
NOVEMBER 26, 2007
7:30 P.M.
Mayor Meyers called the meeting to order at 7:32 p.m. in the Shawnee City Hall Council
Chambers. He welcomed the public and all stood and recited the Pledge of Allegiance, followed
by a moment of silence.
Councilmembers Present
Councilmember Scott
Councilmember Pflumm
Councilmember Sawyer
Councilmember Kuhn
Councilmember Straub
Councilmember Sandifer
Councilmember Distler
Councilmembers Absent
Councilmember Goode
Staff Present
City Manager Gonzales
Assistant City Manager/City Clerk Charlesworth
Deputy City Clerk Powell
Assistant to the City Manager Singer
City Attorney Rainey
Assistant City Attorney Rainey
Public Works Director Freyermuth
City Engineer Wesselschmidt
Planning Director Chaffee
Police Chief Morgan
Fire Chief Hudson
Finance Director Kidney
Parks and Recreation Director Holman
Members of the public who spoke: (Item 9) JIM MARTIN, Shawnee Economic Development
Council, RAY ERLICHMAN, 7510 Garnett Street; (Item 10) KEN HENTON, Hoefer, Wysocki
Architects, 14321 W. 53rd Terrace.
CONSENT AGENDA
1.
APPROVE MINUTES OF THE CITY COUNCIL MEETING OF NOVEMBER 13,
2007.
City Manager Gonzales stated the Council was contacted by Karen McQuiston who
spoke at the November 13, 2007 City Council meeting. On Page 9, paragraph 9, the
wording of the minutes mentions "a survey of an estate," and Ms. McQuiston’s actual
words were, "burden on the servient state."
City Manager Gonzales recommended that change be incorporated into the final approval
of the minutes.
2.
APPROVE MINUTES OF THE FINANCE
OMMITTEE MEETING OF NOVEMBER 6, 2007.
AND
ADMINISTRATION
PAGE 2
3.
CITY COUNCIL MINUTES
NOVEMBER 26, 2007
REVIEW MINUTES OF THE PLANNING COMMISSION MEETING OF
NOVEMBER 5, 2007.
Councilmember Sawyer, seconded by Councilmember Pflumm, moved to approve the Consent
Agenda, as amended. The motion carried 7-0.
MAYOR'S ITEMS
4.
THE MAYOR MAY PRESENT ITEMS FOR CONSIDERATION.
There were no Mayor’s items.
APPOINTMENTS
5.
CONSIDER REAPPOINTMENT OF KATHLEEN WHALEN TO THE PARKS
AND RECREATION ADVISORY BOARD.
Mayor Meyers stated that Councilmember Scott is recommending the reappointment of
Kathleen Whalen as the Ward 1 representative to the Parks and Recreation Advisory
Board with a term expiring on December 31, 2010.
Councilmember Pflumm, seconded by Councilmember Scott, moved to reappoint
Kathleen Whalen to the Parks and Recreation Advisory Board with a term expiring on
December 31, 2010. The motion carried 7-0.
6.
CONSIDER REAPPOINTMENT OF DONNA SAWYER TO THE PARKS AND
RECREATION ADVISORY BOARD.
Mayor Meyers stated that Councilmember Goode is recommending the reappointment of
Donna Sawyer as the Ward 11 representative to the Parks and Recreation Advisory Board
with a term expiring on December 31, 2010.
Councilmember Straub, seconded by Councilmember Scott, moved to reappoint Donna
Sawyer to the Parks and Recreation Advisory Board with a term expiring on December
31, 2010. The motion carried 6-1-0, with Councilmembers Scott, Pflumm, Kuhn, Straub,
Sandifer, and Distler voting aye and Councilmember Sawyer abstaining.
7.
CONSIDER REAPPOINTMENT OF PAM CREMER TO THE PARKS AND
RECREATION ADVISORY BOARD.
Mayor Meyers stated that Councilmember Sandifer is recommending the reappointment
of Pam Cremer as the Ward IV representative to the Parks and Recreation Advisory
Board with a term expiring on December 31, 2010.
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CITY COUNCIL MINUTES
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Councilmember Sandifer, seconded by Councilmember Straub, moved to reappoint Pam
Cremer to the Parks and Recreation Advisory Board with a term expiring on December
31, 2010. The motion carried 7-0.
PUBLIC ITEMS
ITEMS FROM THE PLANNING COMMISSION MEETING OF NOVEMBER 5, 2007
8.
Z-04-07-11, REZONING FROM ZONING DISTRICT RE (RESIDENTIAL
ESTATES) AND ZONING DISTRICT AG (AGRICULTURAL) TO ZONING
DISTRICT CH (COMMERCIAL HIGHWAY), 6600 BLOCK OF MAURER
ROAD.
Mayor Meyers stated that the Planning Commission recommended 10-0 that the Council
approve Z-04-07-11 to rezone from zoning district RE and zoning district AG to zoning
district CH for the Shops at Maurer Place, in the 6600 block of Maurer Road. If
approved, an ordinance number will be assigned.
Councilmember Pflumm moved to pass an ordinance for Z-04-07-11, rezoning from
zoning district RE (Residential Estates) and zoning district AG (Agricultural) to zoning
district CH (Commercial Highway) in the 6600 block of Maurer Road. No second was
given.
Mayor Meyers read a letter which was sent to the City from from Polsinelli, Shalton,
Flanigan, and Suelthaus:
As representative for the applicant of the above referenced project, which is
rezoning of the 6600 Block of Maurer Road, and pursuant to previous
conversations, we formally request a continuance from the November 26, 2007
City Council agenda, to the December 10, 2007 City Council agenda.
Mayor Meyers stated they are asking for a continuance on this item from this meeting to
the December 10, 2007 meeting.
Councilmember Pflumm asked if they represent the applicant.
Mayor Meyers answered yes.
Councilmember Pflumm asked if they gave a reason for the request for a continuance.
City Manager Gonzales explained that Planning Director Chaffee spoke with Korb
Maxwell this afternoon and thinks there were several reasons for their request. She
believes their engineers found themselves double booked this evening. She stated the
project lead, Jeff Johnson, wanted to be in attendance this evening and was going to be
unable to make it. She stated there are still one or two issues they were trying to work
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NOVEMBER 26, 2007
out with some adjoining property owners and felt they would be better prepared to
discuss in a couple more weeks.
Councilmember Pflumm withdrew his original motion.
Councilmember Pflumm, seconded by Councilmember Kuhn, moved to table the
discussion of an ordinance for Z-04-07-11, to rezone from zoning district RE
(Residential Estates) and zoning district AG (Agricultural), to zoning district CH
(Commercial Highway) in the 6600 block of Maurer Road to the December 10, 2007 City
Council meeting. The motion carried 7-0.
COUNCIL ITEMS
ITEMS FROM THE FINANCE & ADMINISTRATION COMMITTEE MEETING OF
NOVEMBER 6, 2007
9.
CONSIDER REVISIONS TO PS-21 FINANCIAL INCENTIVES POLICY.
Councilmember Scott stated that the Committee voted 4-0 to recommend the Council
accept the staff’s recommendations for revisions to PS-21, Financial Incentives Policy,
with modifications regarding the length and amounts of abatements.
Councilmember Scott, seconded by Councilmember Pflumm, moved to approve the
revisions to PS-21, Financial Incentives Policy.
Councilmember Distler stated as before, she just wants to put something in the back of
the other Councilmember’s minds. She stated last time she was asked who the
economists and scholars were who were speaking to abatements being a bad deal. She
stated since she is bad at remembering names, she has 3 ½ pages of references, if anyone
wants to read any of it. She stated she has read some of it, but hears most of it on the
radio.
Councilmember Distler stated are a couple of thoughts she would like to bring to the
Council’s attention. She stated they talk a lot about the buzz words of competition.
She read:
The persistence and growth of these recruitment policies is puzzling in the face of
the mounting evidence of their economic inefficiency and detrimental side effects.
Councilmember Distler stated this is what concerns her, because theoretically she agrees
with everybody that they make sense, but keeps hearing over and over again by people
who know more than her and study this, as that is all they do, that this is not a good deal.
She stated this is why she is concerned.
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Certain incentives like tax abatements erode a community’s tax base,
undermining its ability to provide critical public goods.
Scholars have shown that state tax incentives have a limited impact on firm
location decisions. Most firms choose their locations based on the availability of
labor, land, and transportation, along with the proximity of customers and
suppliers, rather than on regional tax differences.
Councilmember Distler stated that Site Selection Magazine – the premier industrial
relocation magazine - differentiates between ‘must’ and ‘want’ criteria for business
relocation.
‘Must’ criteria are central factors that would disqualify a location if they were
not available and could include a minimum site size, access to rail lines or major
airport, availability of water, natural gas, or other requirements.
‘Want’ criteria are location factors that are desirable, but the lack of which could
be compensated by strengths in other areas. Tax incentives and other government
economic development policies fall into this category, along with such factors as
labor quality operating costs, competitor locations, and distance to suppliers.
17 out of the 21 factors in the study of Fortune 500 company openings and
relocations concluded that state incentives have little influence on almost all plant
location decisions. In short, state economic development incentives are a minor
consideration in most firms site selection decisions.
While tax incentives are unlikely to affect a firm’s location decision, they have a
significant detrimental effect on state and local community’s tax bases. Tax
incentives are supposed to produce a positive return on the public’s investment as
state and local governments gain sufficient revenues from resulting new jobs and
other economic activity to cover the cost of the incentives, however the states are
not well informed about . . .
Thus, while theoretically incentives could prove to be a good investment of public
resources, in practice these general inducements rarely satisfy the cost benefit
analysis.
Councilmember Distler stated when she saw that, she started wondering if the City has
even three tax abatements they have done where they can prove that they have either
satisfied or gone above and beyond the cost benefit analysis. She stated that was a
question she just thought of as she was reading through this information right now.
So, if economic development tax incentives do not affect firms site selection
decisions and actually undermine state and local government’s fiscal health, why
do governor and other state policymakers continue to offer them? Many
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policymakers contend that these incentives are an unfortunate necessity in the
economic war between the states for new investments and jobs.
Councilmember Distler stated all of this is sited, so she can provide that information to
anyone of where these studies are and who did them.
In Marwick’s survey of 203 senior executives, they found that 73% found that
state and local governments were more likely to offer incentives at the time of the
survey than five years previously. On the other hand, that same survey found that
81% of these senior executives felt that these incentives did not give their
company a competitive advantage, because they believe that all businesses are
getting them. The result of this cycle of incentives and increased expectations is
that many state policymakers feel the need to continue these incentives and recruit
firms actively to be at a competitive disadvantage in the Federal system.
Tax abatement policies are nothing more than a form of symbolic reassurance – a
modern rain dance. Similarly, Berneer found that most economic development
practitioners in Ohio viewed incentives primarily in symbolic or political terms,
as allowing elected officials activity in promoting economic development and to
claim credit for creating jobs.
Councilmember Distler stated it goes on an on, but she just wanted to share that there is
another side to this whole thing. She presented her pages of references of the scholars
and economists who have proven they are not living up to what they are supposed to and
it scares her. She would just like to know if the City has specifically three examples, for
her reality, that would prove theoretically that the City did meet the cost benefit analysis
or even exceeded it.
Councilmember Distler stated she was thinking of the quote by Omar Bradley: We need
to set our course by the stars and not by the lights of every passing ship.
Councilmember Distler stated she was thinking when they were looking at the
organizational charts of the other cities, they have more engineers and more ‘this and
that’, so if Shawnee has to keep increasing staff as they increase development, but does
not have the tax income to pay for that increased staff, then where does it come from.
She stated she brought some of that up at the Committee meeting, but is still searching
for answers.
Mayor Meyers stated he can think of one example – Roadway. He asked Jim Martin to
elaborate on two more. He asked Mr. Martin if he has an answer to Councilmember
Distler’s question.
JIM MARTIN, Shawnee Economic Development Council, stated he believes there are
three projects that have come back on the tax rolls after the 10 years – Roadway, which is
now FedEx Ground Package Systems and is fully on the tax rolls. There is Nazdar
Industries and Simmons Mattress Company. He stated Finance Director Kidney has done
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some analysis of that for a presentation to the DeSoto School District which was very
interesting.
JIM MARTIN stated he is a little unprepared, but they do a cost benefit analysis prior to
and it is required by the State. He stated they have never really done a new cost benefit
analysis afterwards, but they could.
Councilmember Distler stated she is only asking because she would want to know in her
mind if they are giving someone this ‘gift’, so to speak, for 10 years, so why not make
sure it is proving to be what it theoretically should be. She stated she is surprised they
have not already done that.
JIM MARTIN stated they show the property tax collections versus the costs that have
been incurred every year in the SEDC’s annual report and it is overwhelmingly positive.
He stated they do not have any multipliers like they do typically in an economic impact
analysis. He stated their analysis is strictly fiscal impact, property taxes, and sales tax, if
they can identify it.
JIM MARTIN stated to step back a bit, he has read a lot of the same sources as
Councilmember Distler and as distasteful as it is, it is very competitive out there. He
stated if it was a level playing field and the Federal government came in and said, ‘No
more incentives’, he thinks Shawnee would fare very well. He stated he is confident of
that because as Councilmember Distler mentioned out of Site Selection Magazine, they
rate the location factors. He stated incentives are almost always at No. 3, No. 4, or
sometimes even No. 5 on their list. He stated incentives are a tie breaker when there are
two very quality communities such as Lenexa and Shawnee.
Councilmember Distler stated Overland Park is running out of space, so they want to
annex in more. She stated Shawnee could sit back like the Cheshire cat and smile when
they are out of land and people have to come to Shawnee at full taxes.
Mayor Meyers stated Overland Park continues to annex and Shawnee can not.
JIM MARTIN stated that is correct, unless they want to jump the County line. He stated
he understands where Councilmember Distler is coming from and is exactly the same
way and if he had his way, there would not be any giveaways. He stated Shawnee has
enough trouble with all the momentum they are competing with in southern Johnson
County and elsewhere in the metro area and the staff can provide numbers to the Council
if they so desire.
Councilmember Distler asked if it would be the original cost benefit analysis versus the
reality of what.
JIM MARTIN answered not exactly that. He stated it was property tax collections prior
to.
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Councilmember Distler stated that does not work.
Councilmember Pflumm asked Councilmember Distler why that does not work.
Councilmember Distler stated as they discussed at the last meeting, the cost is not figured
in with it. She stated if there is vacant land, there could be a fire, but there is no cost for
additional firemen, policemen, or schools. She stated trees do not go to school and do not
use the roads or the sewers – any of that stuff, versus once it is developed they do. She
stated while they may be taking in less taxes on vacant land, but if they are getting .65
cents on every tax dollar brought in versus .15 cents on every tax dollar brought in – then
what is the answer. She stated that is why she would want to see it laid out apples-toapples.
City Manager Gonzales stated the staff could certainly run some of it. She stated the cost
benefit model has changed in 10 years. She stated the State now has a different program
that they require the cities to use and she is not that enamored with the product they
require them to use. She stated the staff would not exactly have an apples-to-apples
comparison, but could do a pretty good numerical analysis of direct dollars and think
through logically some of the intangibles of fire and police protection – those kinds of
costs that might have been increased.
City Manager Gonzales stated it would be very difficult to come up with an incremental
accurate amount of what one particular building costs the City for fire service.
Councilmember Distler stated they have a formula when they come up with the original
cost benefit analysis.
City Manager Gonzales stated that is correct and they could do the cost benefit analysis
now, based on the current information, but just might not have the data from 10 years
ago, depending on what model they used at that time.
Councilmember Distler stated she is excited about the claw back provision and thinks
that should have been a big deal from Day 1, as the City needs to make sure that the
people are standing by their word.
JIM MARTIN stated backing up to the other cities, such as Overland Park and Lenexa;
both of those communities have recently looked at their incentives and really have
liberalized what they are willing to do. He stated this really does not make a significant
change in any way of what Shawnee is willing to do.
Councilmember Distler stated especially with Overland Park and all that commercial
development, their residents should be paying half the taxes that the people are here in
Shawnee.
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Councilmember Pflumm stated Councilmember Distler should look at their mill levy, as
Overland Park’s mill levy is 9 and Shawnee’s is 24+, so it is almost one-third of what
Councilmember Distler is paying.
Councilmember Distler asked if she is thinking of Olathe.
City Manager Gonzales answered yes.
Councilmember Pflumm stated she really should be thinking of Overland Park.
Councilmember Distler stated she looked at someone’s and thought that they had a lot
more commercial than Shawnee, so why are their taxes so low.
Councilmember Distler stated there is then the situation of what one of them is doing
wrong.
JIM MARTIN replied Olathe is similar to Shawnee. He stated Olathe, maybe 10 years
ago, was exactly where Shawnee is today. He stated they saw themselves behind the
curve and decided to get aggressive and they have now captured all that momentum.
JIM MARTIN stated in an article that was in the newspaper this past Friday, it said that
199th Street is going to be a major commercial corridor and he thought to himself, what
happened to K-7, as it is a little closer in. He stated it is how people look at it.
Councilmember Pflumm stated Overland Park does not own K-7, so it is 199th Street. He
stated that is the realistic truth of the matter. He stated when someone is aggressive; they
get all that goes along with it. He stated one comment he was going to make on what
Councilmember Distler read earlier, is that she is comparing what Kansas does for plants
and Shawnee is not really out there looking for plants, but for office buildings and other
complimentary structures to the City.
Councilmember Distler stated it includes St. Louis.
Councilmember Pflumm stated with regard to the jobs that those plants produce, people
live in other places and if the ad velorem taxes the City gets outweigh any giveaway that
Councilmember Distler believes they are really giving away, it really is an incentive to
bring them in so the City can make tax dollars off everything else. He stated Shawnee
and some of the other communities have fallen behind Overland Park and Olathe,
because they have all that.
Councilmember Pflumm stated Shawnee has too many residential houses and that is why
the people’s taxes in this City are a lot higher than in Overland Park. He stated Overland
Park has a lot of commercial and have a lot of hotels. They have a lot of other ways to
bring in dollars, where Shawnee does not. He stated that is why the City’s economic
incentive policy has been increased.
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Councilmember Straub stated he agrees with Councilmember Pflumm, because what
happened with Overland Park is that everyone wants to be right next door to someone
big. He stated if someone builds a Wal-Mart, then they will want to build a Target next
door. He stated if someone builds a Lowe’s, then someone will build a Home Depot right
next to it, because they want to be next to the shopping. He stated with Overland Park,
they already have everything and everyone wants to be in Overland Park.
Councilmember Straub stated people are knocking down Overland Park’s door to come
there. He stated Overland Park does not have to give anything away. He stated if
someone opens a business in Overland Park, they have all the surrounding businesses.
He stated Olathe got aggressive and started bringing in more and they will now become
more like Overland Park. He stated once things get started, things will grow. He stated a
perfect example is Nebraska Furniture Mart. He stated they did Nebraska Furniture Mart,
Cabela's, and the race track and now look what exploded around it.
Councilmember Straub agreed that people have to live somewhere, so if they buy a
house, the City gets property taxes on their house. He stated if people buy from the
grocery stores, the City gets the sales tax. He stated as City Manager Gonzales said, they
can not use exact numbers-to-numbers and say one building took ‘this many’ firemen or
this or that, because it is such a large factor. He stated it is a risk and gamble if the City
gives something away. He stated on Business A, B, and C the City may not make
money, but may make double the money on Business D, E, and F.
Councilmember Straub stated when talking about the states, if someone is a California
company, they are not going to move to Kansas, but a Lenexa company might move to
Shawnee. He understands that the City does not want to give too much away. He stated
they are competing with Olathe and Overland Park though and he is open to an even
playing field.
Councilmember Kuhn stated when Councilmember Distler gave all the questions at the
last meeting, she thought some of them had some pretty valid points, about whether the
City is using tax dollars better than they would or differently than they would otherwise.
She stated when some of them on the Council recently attended the National League of
Cities Conference classes; she specifically looked at one of the classes that dealt with tax
incentives. She stated a couple other councilmembers, along with herself, took that class
and one reason she was drawn to that particular one was because the question they asked
was whether or not tax incentives have become overused and whether or not they are a
bad risk for cities.
Councilmember Kuhn continued that she thought the class had something to offer with
exactly what the Council had recently been discussing. She stated after listening to what
Councilmember Distler was reading earlier, two points she took from it really dealt with
this specifically. She stated one thing said that regional tax differences are not a decision
making tool for companies picking where they are going to be. She stated that was
exactly the point they took from it, which is regional tax incentives really are not what
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are making the decision for the corporate enterprises on where they are going to put their
headquarters.
Councilmember Kuhn stated when looking at a region, they are deciding whether or not
they are going to have the transportation, skilled labor, the cost of living that their
salaried employees can handle – that is when they are looking at the region. She stated
what happens then, is Kansas City, for example, with KC ONE, has become a great
regional advertisement, so when a company goes out looking, they are not asking what
are the regional incentives for the Kansas City metro area; they are looking at Colorado,
Kansas City, and Iowa and those are the regional areas working for them. She stated they
are not looking at the incentives on those, but then once they have narrowed it down and
say that Kansas City metro is what it is for them, that is when the question of regional tax
decisions are not what make the difference come into play; it does not help them decide
where they are going to go.
Councilmember Kuhn stated there was even a quote from an economist who was
teaching the class whose answer was, ‘They are not as great as they are supposed to be’,
who said three of five have already decided where they are going to go before the
incentive – regionally.
Councilmember Kuhn stated as Councilmember Straub said, while she is not really
interested in the businesses that are already situated in Lenexa that might be expanding,
she is interested in the businesses who have now decided that the Kansas City metro area
is where they want to locate and she has to compete on a localized level with those
headquarters. She stated that is where those incentive policies are going to make or break
where that is at.
Councilmember Kuhn stated when they have decided that Kansas City metro is right,
now they have to decide whether Lenexa is better, or Overland Park, or Olathe, or
Shawnee. She stated that is what one of the top two and three decision-making criteria
are – how it impacts.
Councilmember Kuhn stated the second thing she brought back, was something they had
talked about but was not part of what the economist was thinking about when he was
balancing it which was his answer – sometimes it costs too much more for the abatement.
She stated that the economist focused quite a bit on more plant-type things, more
warehouse-type things, where there would be a lot of heavy use of city resources, versus
what they are talking about which is more office-type things, medical facility-type
buildings – Reece/Nichol-type things.
Councilmember Kuhn stated those really do not have more needs for City services and
actually have less needs than, for example, a residential area would so their tax dollar
becomes more useful. She stated one of the questions they asked the people to take into
consideration, was what the company does with the dollars they are being given in their
tax abatement. She stated everyone asks and assumes it is a free gift that if they were
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going to build a $2 million building and the City abates 50% of it on that tax, all of a
sudden they have all this extra money and it is just going to profit them and nothing else.
Councilmember Kuhn stated a lot of the studies that the economists were looking at,
show not only that they have uses for those dollars, but where the companies invested the
dollars that otherwise would have been sent to the tax incentive. She stated a number of
those companies invested those dollars in making a larger facility than they would have
originally. She stated they added another 10,000 square feet and 10 years from now
when they come onto the full tax roll, not only is the City getting the benefit of what the
original building size would have been, but now have the additional 10,000 square feet,
where they have basically taken the City’s tax dollars and reinvested it into the
community by giving a better tax base.
Councilmember Kuhn stated some other places they have invested them in were
additional areas of business for that company. She stated if they were not going to have
that additional $100,000, would they not have had that additional money invested in their
tech area to discover a new product that they would have been able to offer. She stated
they talked about it being in employee retention and quality; for example, did they bring
on additional folks who then live in the community and spearhead other areas.
Councilmember Kuhn stated the whole point that the economist was trying to make,
which was funny because listening to what Councilmember Distler was reading earlier
was like listening to the first part said by the economist, but the final message at the end
of the class was not that abatements are bad, but in a lot of bigger cities with a higher
urban core, the money could be better spent having a training program for urban youth or
persons to get the workforce going and bringing in more people and that would increase
their well being of the city.
Councilmember Kuhn stated in a well-to-do county like Johnson County, their recourses,
while they definitely want to have those things in place most of those things already exist
in a different way, so the City is not going to be best served by investing their dollars
there but best served in investing their dollars in what they can do to stir the economy.
She stated the class she took really touched on quite a bit of what Councilmember Distler
mentioned at the previous meeting.
Councilmember Distler stated that is why she struggles with all of this, because all that
Councilmember Kuhn just said makes sense to her. She heard one guy on the radio say
that there have been some people who after their abatement time is up have not only left
the city, but entirely left the country. She stated she knows they can not live their lives
focusing on the bad, but they need to keep some things in the backs of their minds. She
stated when one company actually had to pay that difference in taxes; they did a
headcount cut at their company. She stated that is why it is good to hear that some have
actually invested in greater things, because she then hears the other side where they are
cutting headcount and really does not like the sound of that, because if they are cutting
headcount and those people lose their jobs, they are going to move somewhere else to
work.
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Councilmember Distler stated with what Councilmember Straub said earlier, as far as
with the jobs bringing in more people who work and live in the city – with the company
she is employed at, 25,000 of their employees do not work or live in the State of Kansas,
let alone in Overland Park. She stated some of those employees may go shop on their
lunch breaks in Overland Park, but the other employees do not even work in the State of
Kansas.
Councilmember Straub asked how many employees Councilmember Distler is talking
about.
Councilmember Distler replied her company has 45,000 employees and 25,000 of them
are nowhere near the State of Kansas. She stated she thinks they should all keep in the
backs of their minds when doing abatements, if their staff is actually going to be here in
Shawnee.
Councilmember Distler stated she has heard on three different occasions that there are
three different states where their school system went bust because they got on a big
abatement bandwagon. She stated they talked about that at the last meeting when she
said she was concerned, because she said if all 35 percent came in tomorrow and they all
wanted abatements, the City would be in a lot of trouble. She stated three different state
school systems went bust, because people all came in at once and got abatements.
Councilmember Pflumm stated he does not believe that.
Councilmember Distler stated she can email Councilmember Pflumm the information to
back up that statement.
Councilmember Pflumm asked if they carried additional burden because of those
abatements, because that normally does not come into play. He stated if those people had
to move into that town, then their increased residential taxes a lot of times pay for the
schools. He stated there are all those other sales tax dollars and taxes. He stated if they
had 30 companies take abatements all at the same time that had to have had a major
economic impact on that community. He stated that impact got funneled down to the
schools.
Councilmember Pflumm stated Councilmember Distler mentioned all that information,
but really never got into the actual dollars. He stated if there are two acres of ground that
get eight houses or a $5 million office building placed on it, he would ask which one is
better for the schools – is it the $5 million office building.
Councilmember Distler stated the other thing about Councilmember Straub’s earlier
comment, because Embark is currently looking to move, they have been looking where
the majority of the employees live, because they would like to make it as convenient for
as many of them as possible.
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Councilmember Straub stated they don’t live in this state.
Councilmember Distler stated she is talking about the local building for the new
headquarters. She stated a very small minority of those employees live in Overland Park
as a very big chunk of them live in Harrisonville, Lee’s Summit, Blue Springs, and
Gardner.
Councilmember Pflumm asked for their geographic center, because that is probably the
key.
Councilmember Distler replied right now it is Overland Park.
Councilmember Pflumm asked if their geographic center is Overland Park.
Councilmember Distler stated they are looking to move to where the largest number of
employees lives. She stated it is pointing towards Missouri.
Councilmember Pflumm stated they would like to keep them in Kansas.
Councilmember Distler stated she would like to see them come to Shawnee to make her
commute much easier. She will send Councilmember Pflumm the information on the
schools.
Councilmember Sandifer stated he went to the National League of Cities Conference as
well and with regard to abatements, he does not believe in giving away the farm. He
thinks on a lot of the smaller project that they might want to look a little differently at the
abatements than they would on some of the larger projects.
Councilmember Sandifer stated one of the statements made by the instructor and what he
has seen throughout the country, is that different cities have transportation issues and it is
hard to bring the people in for their employees. He stated Kansas City does not have a
light rail system and their bus system is probably not the best. He stated they are running
into not having trained employees in the city to do the jobs that they are trying to attract
in the people. He stated the instructor said they have to look for middle class in their
areas and attract businesses that will more work with the middle class. He stated so many
companies these days use incentives for training the employees and bringing them up to
scale to the middle class pay, versus the lower class pay.
Councilmember Straub asked if that is not one of Shawnee’s best things – that they have
the skilled laborers.
JIM MARTIN replied yes – absolutely. He stated they did a comparative analysis of the
demographics to attract retailers. He stated the educational attainment here frankly blows
Olathe away, along with other cities that are growing very quickly.
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Councilmember Sandifer asked if there are magazines or pieces of literature where they
could place that information, or that they are already in.
JIM MARTIN answered yes. He thinks he provided that information to the City Council.
Councilmember Sandifer asked if there is different information that gets filtered
throughout the Country to attract major corporations.
JIM MARTIN answered yes. He stated they are working that to the best of their ability
right now and when the branding comes on board, they want to completely revamp how
the City markets themselves.
Councilmember Sandifer stated if they have the trained people here, they need to get out
there and start grabbing and promoting.
JIM MARTIN stated with regard to list of criteria that companies look at, labor is
typically #1. He stated incentives come in around #4, but it is a tie-breaker, because they
could be competing with some of the elite counties in places like Florida and Texas.
Councilmember Sandifer stated if they are looking to do the incentives, then Shawnee
needs to attract the big boys instead of grabbing all the little ones and start looking like
Olathe.
JIM MARTIN stated they made it advantageous for the big boys and so far they have just
had little guys biting.
Councilmember Sandifer stated they need a mix.
Councilmember Kuhn stated she thinks it is important to say that the understanding she
received from the class was that for Shawnee, they have what the office buildings and a
lot of what the corporate headquarters are already looking for, so that is why the City is
better served using their money towards something that will bring the headquarters here,
versus their training. She stated there are a lot of people who need to have re-training and
jobs, more basic minimal skill jobs that could be brought into more of a minimum lower
middle class-type of job.
Councilmember Kuhn stated the City probably needs, as far as transportation is
concerned, something so they can bring in a significantly larger number of people to be
interested in their retail and more service skilled oriented positions, but thinks they do a
very good job and have a very good set of folks to move into the offices.
Councilmember Kuhn stated one thing that is very near and dear to her ward’s heart, is
the school district. She does not want it ever to be assumed that by giving away an
abatement that she would in any way be in favor of something that she thinks would be
detrimental to the school district. She stated the schools are one of the number one
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reasons why their constituents and companies come to Shawnee, as that is one of the best
things they have out here to attract people.
Councilmember Kuhn stated she thinks it is very reasonable to say that out there, there
are three areas where it is completely bankrupted something based on an incentive plan,
because not everyone uses them in a logical well thought out way. She stated there are
school districts in a smaller community where they might offer a 100% abatement to
three large companies, who of which had huge resource needs from the city’s budget and
one of which requires other things and there is no additional revenue coming in, because
most of the staff or workers do not live in the community, so all of a sudden there is a
huge burden on the City budget which could then bankrupt a portion of the school
district, depending on how they split their cash and what was carried.
Councilmember Kuhn stated in Shawnee’s school district, especially the DeSoto School
District, she can not think of anything better in the world than getting themselves up to
the 35% number in office buildings tomorrow, even if every single one of them gets the
maximum abatement offered, because right now she is earning 10% on the dollar for
every penny she could get on a commercial development. She stated even if she brings in
a commercial development and abates it at 65% she is still making four times as much
money than she would on residential and 10 times as much money as she is on that
vacant land for that 35% they have just built, so she would not be behind.
Councilmember Kuhn stated let’s say she could have had $50 million in revenue coming
in and instead she only gets $30 million in revenue; she is okay with that, because her
school district needs more than anything else office buildings, commercial developments,
and retail buildings built. Nothing else is going to make the DeSoto School District any
stronger than having a strong commercial, office, and retail base in the City of Shawnee,
because that is what is going to drive a much higher percentage of tax dollars to the
school district and make it easier for the school district to be successful; there would be
nothing better than that.
Mayor Meyers stated he would weight in real quick and note that this is a subject they
could speak on for hours. He stated he thinks Councilmember Distler’s point is well
made, in that they need to be careful when looking at the abatements that come before the
Council. He stated the City’s abatement policy should not just be a rubber stamp when
someone comes before them asking for an abatement and they really do need to be
careful.
Mayor Meyers stated he knows for a fact if it was a perfect world, the school districts
would not like to see the City giving tax abatements, but understands the competitive
nature that Mr. Martin is talking about in this area. He stated there are a lot of positives
and negatives on both sides. He thinks the point being made here is that the City needs to
be cautious and thinks it is well known that the competitive nature, not just in the Kansas
City metropolitan area but in Johnson County, makes it important for Shawnee to be a
player on a competitive basis for attracting business and these types of abatement policies
do play an important role at this time.
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Mayor Meyers stated he thinks it is a major factor for some companies where they decide
to place their business - from a localized level. He truly believes that Shawnee would not
attract some of the businesses they have attracted through their abatement policy, without
being competitive. He thinks many of the companies could have easily gone to
surrounding communities and thinks that is backed up by seeing some of the changes in
policy and attitude from some other communities. He stated in a perfect world, he thinks
everyone would say not to do it and everyone gets a bigger piece of the pie, but it has not
worked out that way in the Kansas City metropolitan area. He believes they need to act
with caution and there is some risk involved. He stated at this time, Shawnee has not had
problems on the risk side with the abatements they have been involved with to this point
and thinks the City has made some wise decisions and hopes they continue.
Councilmember Distler stated she has an answer for Councilmember Pflumm about the
three cities; Flat Rock, Michigan and Rio Rancho, New Mexico faced major school
funding crisis after attracting a Mazda plant for $49 million in 1992 and attracting a Intel
plant for $114 million in 1994.
Councilmember Distler stated the St. Louis Business Journal reported that St. Louis’ use
of tax abatements during the past 30 years has exacted a heavy toll on the city. In
particular its public schools, while producing little measurable public benefit.
Councilmember Distler stated as she said earlier, this is not her information, but since
Councilmember Pflumm wanted additional information – there it is.
Councilmember Pflumm stated Councilmember Distler is providing information, but no
numbers. He asked how could acquiring a $42 million plant with all its infrastructure and
personnel, with probably 15,000 to 20,000 people who moved into work at that plant, not
create an economic growth of some sort that funneled down to the city.
Councilmember Distler stated she can look into that further for Councilmember Pflumm.
Councilmember Pflumm asked Mr. Martin about him mentioning that Overland Park
recently liberalized their policy.
JIM MARTIN stated he should correct that statement, but in practice he does not know if
they have changed their policy, but as some of them know, he worked in Overland Park
for three years before coming to Shawnee and they have granted tax abatements recently
for three projects that they never would have even considered when he was working
there. The first was the Quintiles projects, secondly Prescription Solutions, and thirdly
Capital One Credit Corporation, because those were very competitive projects.
Councilmember Pflumm stated he just talked to John Nachbar on Saturday night who
mentioned that Overland Park’s commercial growth is still good, but their residential
growth is slow like everyone else. He stated Shawnee is still in a relatively competitive
market, but basically Overland Park is doing a lot better on that side.
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JIM MARTIN stated with regard to some of Councilmember Distler’s examples, it might
be like comparing apples to oranges if it is another state. He stated in the State of Kansas
with their statewide school mill levy, every time Wichita gives a tax abatement to Boeing
or Cessna, for example, the DeSoto School District pays because of the 20 mills which is
a statewide thing.
JIM MARTIN stated when they get down to the local option budget that is definitely in
play, it is a situation where even if Shawnee decided not to do it anymore, the City’s
taxes would still be affected by other city’s abatements.
RAY ERLICHMAN, 7510 Garnett Street, stated before he discusses what he wants to
tonight, something came up earlier in this discussion about the growth of Overland Park
and annexing and everything else. He stated the last time he looked at a map, a little of
Shawnee was touching on DeSoto so maybe they ought to try grabbing that over there.
RAY ERLICHMAN read a written statement:
When one talks about tax abatements, TIF Districts, IRBs, or any other tax
incentive it’s almost a lose-lose proposition. This is regardless of what stance
one takes.
If a person is in favor of these tax incentives, there will be an element of the
population that will criticize them for giving away taxpayer’s money, engaging in
corporate welfare, etc. If one is against tax incentives for businesses then they
will be accused of not being in favor of growth, expansion, and the possibility of
companies assuming a larger share of taxes over homeowners. It is almost like
the poor guy whose significant other asks him, “Does this dress make me look
fat?” It’s a lose-lose-situation.
Anyway, for the record, in most cases I personally do favor these tax breaks as
long as they are used judiciously and are periodically evaluated for their efficacy.
I would hate to see a TIF district or any other tax incentive like what KC did for
the Briarcliff Development. That was completely ridiculous what they did out
there in the northland.
There are some areas though that are of concern to me and which I do not feel get
the proper attention they deserve. One of these areas has to do with the creating
of jobs and the retention of that payroll within the City of Shawnee.
Even though there are guidelines for job creations for companies to receive tax
breaks, have any studies or evaluations ever been done to see what stays within
our city? Is there a monitoring process? Is there a policy for how much of that
payroll needs to remain within the city to maintain the tax incentive? I believe the
only requirement is that new employment opportunities be created, but nothing
about physically retaining that payroll within the city.
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Allow me to give you an example of what I am talking about.
hypothetical company with a staff of 50 employees.
# Employees
35
10
5
50
Average Annual Wage
30,000
50,000
90,000
40,000
Let’s use a
Total
1,050,000
500,000
450,000
2,000,000
Are we monitoring and making it a condition of the tax incentive to retain a
specific portion of that annual payroll within the city? Or a specific number of
the employees? Or, possibly, a combination of the two. The effect of creating
new jobs within the city, even though beneficial, is not as beneficial as retaining
the employees and the associated payroll as residents of the city. The concept
being that the employee/resident would be spending their money on
mortgages/rent, food, entertainment, and other items within the city. That in turn
would generate other income in the city. I am sure that there are economic
studies out there that show how many times a dollar “turns” that is spent in the
city.
Personally, I would like to see such a condition made a part of any incentive
package. Monitoring could be done by an annual report using zip code and
wage information without divulging employee names. If a certain portion of the
payroll is not maintained locally, the company would still keep its incentive, but
possibly at a different level.
Just because a business makes money in any city, does not necessarily mean that
a portion of that money is reinvested in the city. Payroll being just one element.
RAY ERLICHMAN stated the City can not put any requirements on a company that they
have to employ half their people in the city as that would be ridiculous. He stated they
could use the payroll as a carrot and maybe give them a little better incentive if they were
able to maintain more of their employees within the city. He stated for someone who
works for a company in Shawnee, but lives in Overland Park, Olathe – whatever, the bulk
of that payroll money is being spent somewhere else.
RAY ERLICHMAN stated if it is a service-type company, like a warehouse or something
like that opposed to retail, with any money they bring in, how much of that is really
staying in the city. He stated that is his question and he really does not think they have
gotten answers to how much of what they spend is really spent in Shawnee. He stated he
would like to see that done when these evaluations are done very year on these
companies.
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Therefore the motion read:
Councilmember Scott, seconded by Councilmember Pflumm, moved to approve the
revisions to PS-21, Financial Incentives Policy. The motion carried 6-1, with
Councilmembers Scott, Pflumm, Sawyer, Kuhn, Straub and Sandifer voting aye and
Councilmember Distler voting nay.
BUSINESS FROM THE FLOOR
There was no business from the floor.
STAFF ITEMS
10.
CONSIDER FINAL DESIGN PLANS FOR JUSTICE CENTER AND FIRE
STATION NO. 2.
Mayor Meyers stated that construction for this project was approved by the Council on
February 26, 2007. The final plans are complete and a set of drawings has been placed in
the City Council conference room.
Councilmember Sandifer, seconded by Councilmember Kuhn, moved to approve the final
design plans for the Justice Center and Fire Station No. 2 project.
Councilmember Pflumm stated he just wanted to verify that this is not going to change
the overall scope dollars of the project.
Senior Project Engineer Schnettgoecke stated that is correct. He stated the staff received
the final drawings from their architect. He stated Ken Henton and Chad Ingram are
present this evening from Hoefer Wysocki Architects in case the Council has any
questions for them. He stated the staff received the 100% drawings and did their pricing
verification and is currently $16,300.00 below the bid amount. He stated the staff is very
happy and proud of where they are, despite a couple extras that came up on the site. He
stated they feel good with where they are at, at this point.
Councilmember Straub asked if they just changed tree size.
Senior Project Engineer Schnettgoecke answered that is one item that they are going to
go to the Planning Commission on. He stated the proposal was submitted with 4”
diameter trees and they are going to ask that they be changed to 2” diameter trees, which
complies with the Planning Commission requirements. He stated that will save about
$10,050.
Councilmember Straub asked if that will keep them under the $16,000. He stated it is
like building a house and putting little sticks in a yard. He stated if it is saving $10,000
and being under, he is for putting in the 4” trees, because he thinks they make a
difference in landscaping. He stated 2” trees are not very big trees.
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Senior Project Engineer Schnettgoecke stated the staff acknowledges that, but are
concerned with keeping the 4” trees alive and it takes a little more watering on the
contractor’s part and the City’s part to keep them going. He stated with a 2” tree, it will
grow to a 4” diameter in a short amount of time, so the staff feels it will be a win-win to
go down to the 2” trees and save money.
Councilmember Sawyer stated he heard there were a couple of increases.
Senior Project Engineer Schnettgoecke stated that is correct. He stated there were some
increases and as the memo noted, there have been some decreases as well. He stated
looking at the table on the overhead; the main increase was the rock excavation, as they
did end up with $157,000+ extra in rock that was a unit price item. He stated that was an
extra. He stated the other extra was Item 1.22, where they needed some fiber cabling
between what they are calling the MDF, which is the electronics’ room, to the wiring
closet. That was an addition of about $12,000.
Senior Project Engineer Schnettgoecke stated there were some additions, but a significant
amount of decreases, because it was the staff’s goal to keep the contract at or below the
bid amount.
Councilmember Sawyer stated he is not concerned about keeping it below the bid
amount, because he has been told by everyone that that is the price, so he believes that is
so. He was convinced one year ago when everyone told him ‘that is the price’, so he just
wants to see that price. He stated he will be hard pressed to see anything above that
price.
Councilmember Sawyer stated as far as the rock is concerned, he can not see that is much
of a surprise. He stated when the City bought this piece of property there was a little
snafu on what it was going to cost to clean it up. He stated he is a little concerned, but
agrees with the 2” trees, because they are going to have to try to grow them on that rock
pile. He stated that is the bigger thing. He stated the landscaping company they hired to
do this thing needs to know what they have to work with out there.
Councilmember Pflumm stated they might want to grow some cactus.
Councilmember Sawyer stated he is happy that the staff is trying to keep within the set
number, but then again he sees how they are doing it. He stated in his opinion that is not
what they should be doing, because the design/build people said they could build it for a
set amount and the staff should not have to cut out anything.
Senior Project Engineer Schnettgoecke stated as they have gone through the process, they
have looked at all the items and there are must-haves and desirables. He stated the things
that are not must-haves have been looked at and the staff decided to value engineering
some of those away from the project, but have not sacrificed the function or aesthetics of
the project.
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Councilmember Sawyer asked if from tonight on, this is the final plan and they ought to
build it for that amount without cutting out anything else.
Senior Project Engineer Schnettgoecke stated that is correct.
Councilmember Sawyer stated he is sorry, but the design/build people said they could
build it for that amount and the City should not have to cut anything out.
Councilmember Straub asked about the irrigation system.
Senior Project Engineer Schnettgoecke explained that the irrigation system was deleted
which had a couple of benefits. He stated it obviously saved the City $23,000 and they
were also able to obtain a LEED point for going with vegetation that does not require an
irrigation system. He stated with that said, they still have a quick coupler system on the
site where they can go in with a hose at five locations and connect it to the quick coupler
to do some watering if need be, but there will not be a full blown irrigation system.
Councilmember Straub stated he feels with that much landscaping and ground, eventually
they will need to add an irrigation system, because grass and trees do not grow by
themselves.
Councilmember Straub asked about the $850,000 construction contingency and if that has
been touched yet.
Senior Project Engineer Schnettgoecke stated the staff has gone into that contingency a
little bit. He stated there were some telecommunications conduits that were installed at
the site that were not included as part of that and was not a budgeted item.
Councilmember Straub asked when Senior Project Engineer Schnettgoecke says ‘a little
bit’, is he talking $100,000, $300,000 – how much exactly.
Senior Project Engineer Schnettgoecke replied that he does not have those numbers with
him this evening, but thinks they have probably gotten into the contingency around
$100,000 so far.
Councilmember Straub stated they still may end up being $750,000 less than what they
originally planned anticipated.
Senior Project Engineer Schnettgoecke stated that is a possibility.
Councilmember Sawyer asked if they are keeping things in check by cutting out the
sprinkler system.
Senior Project Engineer Schnettgoecke stated that is correct, but there is still a quick
coupler system.
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CITY COUNCIL MINUTES
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Councilmember Sawyer stated he understands about the quick coupler system, but it still
takes a hose and manpower to go out there. He asked if they are going to be happy with
that a few years down the line, because he doubts it.
Councilmember Kuhn asked if they got a LEED point for taking out the sprinkler system
and is that why they did it, or did they do it for the $23,000.
Senior Project Engineer Schnettgoecke replied it was two-fold. He stated they will
receive a LEED point for removing the irrigation system and it was also a cost saving
thing.
City Manager Gonzales stated she believes it is more than just getting the LEED point,
but is a more environmentally friendly landscaping plan than what they originally had
and thinks that is the direction in which they all want to move.
Councilmember Sawyer stated his concern is if they are going to be happy with that and
wonders if the staff is going to come back five years down the road and say they are not
happy with how it looks out there and wants to put in a sprinkler system. He stated he
sees what the staff is doing; they are cutting out things to keep this in budget and that is
not the way he understood the design/build process to be.
Councilmember Sawyer stated the design/build firm came in with the cost and told the
Council they could build it for a certain amount, but now the staff is cutting out things to
keep it in line. He stated that is not how the design/build process was sold to him. He
stated they told the City they could build it for ‘this price and with these items’ and now
the staff is cutting out things to keep it within those cost parameters. He asked how much
more they are going to have cut out on this thing as time goes on. He stated Senior
Project Engineer Schnettgoecke probably can not give him an answer to that question, but
assumes his answer would be that they will not have to cut any more out and this is the
last time, but government’s culture is not that way.
Councilmember Sawyer stated he knows that staff is going to keep this thing in budget
and keep trimming things back to make it stay there, but that is not what he signed on for
and that is what the vast majority of people told them they were signing on for and they
would not have this, so they are not running the cost over, but trimming things out.
Councilmember Straub asked about the circular plaza and if they are no longer doing the
front design.
Senior Project Engineer Schnettgoecke explained there were some sidewalks that were
not as efficient as they should be, so they eliminated some sidewalks and thinks they
decreased the width of the circular drive. He stated the circular drive itself, from what
has been seen on the best and final offer, is basically the same.
Councilmember Straub asked about the gear lockers.
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Senior Project Engineer Schnettgoecke explained they need 36 grid gear lockers and have
12 at the existing fire station. He stated they are going to provide those 12 lockers, so the
contractor will only have to provide and additional 24. He stated they are using
equipment that is still in good shape and can bring over to the new facility.
Councilmember Straub asked if they are taking out things right now that they are going to
eventually have to have or replace and if so, are these things something they should have
to begin with or is the staff taking these things out right now to stay within budget.
Councilmember Pflumm stated it sounds like they are engineering in some environmental
changes and even though they are taking out some things; they are making it a better
facility. He asked when they will get the final LEED’s rating.
Senior Project Engineer Schnettgoecke answered that the staff is going to submit the
application in about 2-3 weeks. He believes it will take approximately 6-8 months to get
an answer.
KEN HENTON, Hoefer, Wysocki Architects, 14321 W. 53rd Terrace, stated they have
actually already registered the project months ago to be a LEED certified project and
there was a fee associated with that which was paid as part of the design/build team. He
stated one of the final points that they will be getting, via a LEED, is a survey of the
occupants of the building six months after they have been in the building. He stated it is
basically for comfort. He stated part of the LEED requirement on that does not
necessarily say they are going to go in there and change out the mechanical system, but if
there are areas that are not comfortable for some reason, which they do not think there is
going to be, but they will develop a plan so the City can go back over time and remediate
any uses they have. He stated it will be at least six months after everyone moves in,
before they get authorization or certification, but they will know way before whether or
not it is going to be certified, because they will have ruling on every point except that
one.
Councilmember Sandifer asked if they do reduce the price from what was originally
agreed upon, does that also change the fee being given to the design/build firm, or does
their fee stay the same all the way through.
Senior Project Engineer Schnettgoecke replied the design/build firm’s fee would be
decreased by that amount and their final fee would be $18,561,666.
Councilmember Sandifer asked if there is a particular reason why they are eliminating the
fire alarm system.
Senior Project Engineer Schnettgoecke replied they are still installing a fire alarm system,
but the voice evacuation and pull stations were not required, so that is a $3,500 credit.
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Councilmember Kuhn stated she keeps hearing about how they are taking all these things
away and bringing them out just in order to stay within the set dollars, but that is not how
she sees it. She thinks there are things being taken out and even though what she hears
all the time from some people that ‘the City has money to spend and will spend it if you
give it to them’, but that is not the case. She stated there is a certain dollar amount that
has been set and even now continuing into the project, they are reviewing what the actual
necessities are, what the best use of those funds are, how they can get the most bang for
their buck, and whether or not taking something out actually gets the City something
more beneficial like a LEED certification point.
Councilmember Kuhn stated there are some things coming out of it, but she is not
looking at this any differently than when she builds her own house and is down to the
final numbers. She may have had a $1,000 carpet allowance in there, but if she decides
to put in hardwood floors because it benefits something, she is going to have a credit for a
thousand dollar carpet, because it is no longer going in the house, but that does not mean
she has not taken care of the house, done everything right, or made it the best possible
house there could be.
Councilmember Kuhn stated just because they actually had something come in under
what they thought it was going to cost, or they found out what they thought they might
need which is a bell and whistle that she kept hearing referred to as the ‘Taj Mahal’ and a
waste of money, the staff has found a way to take out something they do not need and
save taxpayers’ money and now everyone is unhappy about that. She stated she kind of
gets the feeling that there is just no way to win sometimes.
Councilmember Kuhn stated she is personally thrilled that they still have some
contingency money. She has every expectation that they are going to stay within the
budget they set, but recognizes in construction of anything from the smallest home to the
largest corporation, there are unexpected things that come up at any time. She stated
design/build was the best way, as a City, that they could control the amount of money
spent and does not think there is anything wrong with the staff doing what the Council
asks them to do and that is continuingly reviewing things and finding out if there is a
better way to spend the taxpayers’ money. She stated if that means that something is
being taken out, it is good.
Councilmember Sawyer thanked Councilmember Kuhn for her comments, but added that
not taking everything out is not always good. He stated it is good if they are going to
keep in the budget. He stated he would reiterate his statement one more time. He stated
approximately a year ago this was voted on by the Council and he did not make the
statement earlier but he was told by someone on this Council, and they can look up the
agenda and find out who that person is, but he was told ‘This is what we are going to get
and this is the most it is going to cost’. He stated he does not have a problem with it
costing less at all.
Councilmember Sawyer stated a LEED point is a great idea, although it does not mean it
will mean any dollars to the City, but is a great idea and makes everyone feel warm and
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CITY COUNCIL MINUTES
NOVEMBER 26, 2007
fuzzy that they got another point. He stated his point simply is that in order to keep this
in check and keep it in budget, the staff now is having to drop things off. He stated it
may be a good idea to drop some things off, but at first blush they are dropping them off
to keep this in budget, because they are only $16,000 under and it is not like they are
thousands of dollars under, because $16,000 in the scope of this entire project is fairly
minor.
Councilmember Sawyer stated he will ask one more time when they are going to finally
say to the Council, and wonders if that is tonight, that this is what they are going to get
without dropping items off to keep it in budget, or is the staff going to come before the
Council three months down the road and say they are going to have to drop more off
because they found they really do not need to do something and is not really required, so
they will just drop it off and now things are back in check again.
Councilmember Pflumm stated that is why they are voting on the plan tonight and are not
voting whether or not they are dropping off things or adding stuff. He stated they are
voting on the plan for that amount of money.
Councilmember Sawyer stated he understands that, but is asking if tonight is the night
that the staff tells the Council that this is what they are going to get, or are they going to
change things a couple months down the road because all of a sudden it is going to be
over budget. He asked where is the line that shows what the City is going to get for the
dollars they budgeted for this project.
Mayor Meyers stated he is not saying there will not ever or could not be a worst case
scenario and the Council might have to make some important decisions down the road,
but his belief is that they are where they want to be and below the scope of the project
where they have said this is pretty much are the demands of the Council, their
expectations, and what they want to see. He stated if for some unforeseen reason they
would go beyond the contingency funds, which he does not know why they would and
certainly would hope they would not, that would be one worst case scenario where
something would have to come back before the Council, but he does not see that
happening.
Mayor Meyers asked City Manager Gonzales if there is anything he is overlooking, as far
as a worst case scenario is concerned.
City Manager Gonzales answered no. She stated the staff has spent a huge amount of
time on this looking at 35% plans, 65% plans, and 95% plans and reviewed each of those
as the part of the design/build process with the architects looking at all the details. She
stated the specs were very detailed, but as Councilmember Kuhn said, as they run through
the real project it becomes more and more a reality. She stated some things came up that
the staff determined they really do not need and could do other things. She stated the
Council is seeing the culmination of those things and the staff believes the 100% plans
are 100%, but as Mayor Meyers said, there are no absolute guarantees and would not sit
there and say otherwise.
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CITY COUNCIL MINUTES
NOVEMBER 26, 2007
City Manager Gonzales stated the staff is certainly doing everything they can to live
within the budget as directed to them by the Council.
Councilmember Sawyer stated his only concern is that he did not make the statement that
he could build the building ‘for this’, as someone else made the plan and made that
statement. He stated he would hate to see things continually being taken out to keep
within those lines, so that is what he is trying to say. He asked where the staff is willing
to tell them to hold it because ‘This is what you said you could build it for’ and all he
sees being held accountable is the City. He stated the City staff worked long and hard on
what they wanted for this project, what they needed, and how they wanted it to look. He
stated what he sees is now in order to keep things in check, the design company is telling
them to trim things out or they will be over budget.
Mayor Meyers stated the design company did not trim it out; the City staff did.
Councilmember Sawyer stated if they did not trim things out, they would be over budget.
City Manager Gonzales stated there are adds and deducts on the list. She stated those are
things the staff looked long and hard at and decided that additional costs for fiber was
something they needed and was a higher priority than the irrigation system and the goods
of taking out the irrigation system was two-fold. She stated all those things are give and
take and that was part of the process the staff went through with the architect to live
within the budget.
Councilmember Kuhn stated the total project was the $22,609,000, so her question is
back to what Councilmember Sawyer said, in that if they add all that back in, would that
not just go into the contingency fee and still be under the long-term number. She stated
there is a contingency fee.
Senior Project Engineer Schnettgoecke stated they could have used some of that
contingency to pay for these overruns, but in working with the design/build team and
staff, it was decided not to get into that fund to pay for these overruns and go ahead and
delete some of the what he calls, ‘desirables’ that did not affect the function or aesthetics
of the building.
Councilmember Kuhn asked if they have the $850,000 currently in the total project
amount and what they agreed to all the way through and what their total number would
be and was always included and they have spent $100,000 already, if they spend no other
contingency money, which she thinks is unrealistic as things come up with soil, etc., but
if they do not should they assume that the project will actually come in $750,000 less
because the contingency will not have been spent.
Senior Project Engineer Schnettgoecke stated that is correct. He stated if they do not
spend the rest of that contingency, the $22.6 million project budget will be decreased by
what they save on that contingency fund.
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CITY COUNCIL MINUTES
NOVEMBER 26, 2007
Councilmember Kuhn stated at the end of all of it, there is that possibility as well.
Senior Project Engineer Schnettgoecke stated that is correct.
Councilmember Straub stated he would clarify what Councilmember Kuhn said and is
saying that he is not upset at the bells and whistles, but just had questions because he did
not know why they got rid of the circular drive or why that went down or why they went
to the different trees. He stated he was just asking questions. He stated on the lockers, he
was thinking they were just getting rid of 12 lockers and had no knowledge that they
were brining over 12 lockers, so was the only reason he was asking questions.
Councilmember Straub stated why they do not fill the pipes in the fire station apparatus
bays, he has no idea why they are not doing that or it just costs less than they expected, so
he is just having questions. He stated that is $5,700 that they are saving and is that
because they decided not to fill them, but he does not know what they fill them with and
does not know why they needed them, so he does not know why that was originally
thought of, so he just had questions. He stated he is all in favor of saving money.
Councilmember Straub stated with regard to the landscaping, he put a sprinkler system in
his house because he likes his grass green. He stated he would clarify that he is not
against saving money but wants to know why they did not fill the pipes; did they know
they needed not to fill the pipes to begin with or is that just a change of . . .
Senior Project Engineer Schnettgoecke responded that those are filled pipes for filling the
fire trucks when they are in the apparatus bay. He stated the RFP required six of those 2
½ inches in diameter. He stated they reduced it from six down to, he believes, four, so
that was a savings of two.
Councilmember Straub asked if the City is still going to be safe. He stated he just had
question and was not upset because they are not spending the money.
Therefore the motion read:
Councilmember Sandifer, seconded by Councilmember Kuhn, moved to approve the final
design plans for the Justice Center and Fire Station No. 2 project.
The motion carried
7-0.
11.
CONSIDER CHANGE ORDER NO. 10 AND FINAL FOR THE 52ND AND
CHARLES STORM DRAINAGE IMPROVEMENTS, P.N. 3288 (SMAC TC-021059).
Mayor Meyers stated that the contract was awarded to Miles Excavating, Basehor,
Kansas, on July 24, 2006, in the amount of $808,341.95. This change order reflects a net
increase of $1,277. The new and final contract amount for this project, after previous
change orders, is $897,627.87.
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CITY COUNCIL MINUTES
NOVEMBER 26, 2007
Councilmember Scott, seconded by Councilmember Pflumm, moved to approve Change
Order No.10 and final for the 52nd and Charles Storm Drainage Improvements, P.N.
3288, (SMAC TC-021-059). The motion carried 7-0.
MISCELLANEOUS ITEMS
12.
CONSIDER APPROVAL OF SEMI-MONTHLY CLAIM FOR NOVEMBER 26,
2007, IN THE AMOUNT OF $1,865,411.16.
Councilmember Scott, seconded by Councilmember Pflumm, moved to approve the
semi-monthly claim for November 26, 2007, in the amount of $1,865,411.16. The
motion carried 7-0.
13.
MISCELLANEOUS COUNCIL ITEMS.
a.
Christmas Around Town.
Councilmember Sawyer reminded everyone about Christmas Around Town on
Saturday, December 1, 2007 at 4:00 p.m. It should be a good time.
b.
Southern Star Pipeline.
Councilmember Distler asked if they had an answer back yet on the Southern Star
pipeline deal, since they said the end of November and wondered if they have
given a final answer yet.
Public Works Director Freyermuth replied he does not think they have heard back
yet and does not believe they have any new news. He has not heard anything
from Senior Project Engineer Lindstrom.
ADJOURNMENT
Councilmember Sandifer, seconded by Councilmember Straub, moved to adjourn. The motion
carried 7-0, and the meeting adjourned at 9:00 p.m.
Minutes prepared by: Cindy Terrell, Recording Secretary
APPROVED BY:
_____________________________________________
Vicki Charlesworth, City Clerk