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Home My WebLink AboutJUNE 3, 2008 MINUTES I i Ii I ,i CITY OF VIRGINIA BEACH "COMMUNITY FOR A LIFETIME" CITY COUNCIL MAYOR MEYERA E OBERNDORF, At-Large VICE MAYOR LOUIS R. JONES, Bayside - District 4 WiLLIAM R. DeSTEPH, At-Large HARRY E. DIEZEL, Kempsville - District 2 ROBERT M. DYER" Centerville - District I BARBARA M. HENLEY, Princess Anne ~ District 7 Ill'BA S. McCLANAN, Rose Hall - District 3 JOHN E. UHRIN, Beach - District 6 RON A. VILLANUEVA, At-Large ROSEMARY WILSON, At-Large JA.MES L. WOOD, Lynnhaven -District 5 CITY COUNCIL AGENDA CITY HALL BUILDING 2401 COURTHOUSE DRIVE VIRGINIA BEACH, VIRGINIA 23456-8005 PHONE:(757) 385-4303 FAX (757) 385-5669 E-MAIL: Ctycncl@vbgov.com CITY MANAGER - JAMES K. SPORE CITY ATTORNEY - LESLIE L. LILLEY ('fTY ('LARK - RUTH HODGES FRASER, MMC 03 JUNE 2008 I. CITY MANAGER'S BRIEFINGS - Conference Room - 2:30 PM A. GASB 45 TRUST FUND Patricia Phillips, Director - Finance B. STUMPY LAKE CONSERVATION EASEMENT Clay Bernick, Coordinator, Environmental Management Center - Planning C. ENERGY PERFORMANCE CONTRACT David L. Hansen, Chief - Finance and Technology II. CITY COUNCIL LIAISON REPORTS III. CITY COUNCIL COMMENTS IV. REVIEW OF AGENDA i i Ii I i V. INFORMAL SESSION - Conference Room - 4:30PM A. CALL TO ORDER - Mayor Meyera E. Oberndorf B. ROLL CALL OF CITY COUNCIL C. RECESS TO CLOSED SESSION VI. FORMAL SESSION - Council Chamber - 6:00 PM A. CALL TO ORDER - Mayor Meyera E. Oberndorf B. INVOCATION: C. PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA D. ELECTRONIC ROLL CALL OF CITY COUNCIL E. CERTIFICATION OF CLOSED SESSION F. MINUTES 1. INFORMAL and FORMAL SESSIONS May 27,2008 G. AGENDA FOR FORMAL SESSION H. CONSENT AGENDA I. ORDINANCES 1. Ordinance to AMEND Section 23-2.1 of the City Code re curfews after declarations of emergency to correct a typographical error 2. Ordinance to AUTHORIZE the acquisition of property for $13,000 at Lakeside, Locust Crescent, from Francis E. Haley, Jr., Inc.; and, AUTHORIZE the City Manager to execute all documents (DISTRICT 4 - BA YSIDE) i i i I I 3. Ordinance to AUTHORIZE the transfer of $292,790 from Operating to Capital Outlay accounts within the FY2007 -08 Operating Budget of Parks and Recreation re purchase capital equipment for each recreation center J. APPOINTMENTS ARTS and HUMANITIES COMMISSION BEACHES and WATERWAYS COMMISSION BIKEWAYS and TRAILS ADVISORY COMMITTEE HEAL TH SERVICES ADVISORY BOARD HISTORIC PRESERVATION COMMISSION HUMAN RIGHTS COMMISSION OPEN SPACE ADVISORY COMMITTEE K. UNFINISHED BUSINESS L. NEW BUSINESS M. ADJOURNMENT ********************************** PUBLIC COMMENTS Non-Agenda Items ********************************** PLANNING ITEMS FOR JUNE 10,2008 WILL BE HEARD JUNE 24, 2008 i i I CITY COUNCIL TWO-DAY RETREAT AUGUST 22-23, 2008 I 8:30 AM - 5:30 PM ECONOMIC DEVELOPMENT CONFERENCE ROOM TOWN CENTER ********* If you are physically disabled or visually impaired and need assistance at this meeting, please call the CITY CLERK'S OFFICE at 385-4303 *********** I I Agenda 06/03/2008 afb i ~\lww.vbgov.col11 , i i - 1 - MINUTES VIRGINIA BEACH CITY COUNCIL Virginia Beach, Virginia June 3, 2008 Mayor Meyera E. Oberndorf called to order the CITY MANAGER'S BRIEFING re GASB 45 TRUST FUND in the City Council Conference Room, City Hall, on Tuesday, June 3,2008, at 2:30 P.M Council Members Present: William R. "Bill" DeSteph, Harry E. Diezel Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan, Mayor Meyera E. Oberndorf, Ron A. Villanueva and James L. Wood Council Members Absent: Robert M Dyer [Taking Mother to Doctor, Arrived.' 6:00 P.M Formal Session) John E. Uhrin [Entered: 2:45 P.M) Rosemary Wilson [Family Vacation out of the Country) June 3, 2008 I i 'I I - 2 - CITY MANA GER 'S BRIEFING GASB 45 TRUST FUND 2:30 P.M. ITEM # 57670 Patricia L. Phillips, Director of Finance, introduced the representative of the Virginia Pooled GASB Trust, Bob Lauderberg - Managing Director - VMLlVACo Finance Program. The purpose of the Briefing is to provide a recommendation re the funding of the GASB 45 Trust. . The Governmental Accounting Standards Board's statement requires financial disclosure of retirement health benefits (and other) liabilities similar to current pension reporting . Local governments must recognize both the current cost and unfunded accrued actuarial liability for benefits earned to date . Full funding of liability is not required, but funding levels will be considered by bond rating agencies Trust Fund to Fund GASB 45 Liability . GASB rules do not require funding, but assets set aside in a dedicated Trust can offset the liabilities - If contributions are irrevocable, dedicated to providing benefits and legally protected from creditors of employer and Plan Administrator GASB allows retiree medical liability to be determined using more favorable actuarial assumptions, such as a higher discount rate, if employer funds promised benefits . Pre-funding better matches the expense of the plan with the cash outlay . Pre-funding secures the benefit and reduces the build up of an unfunded liability on the balance sheet Summary ofGASB 45 Liability City Schools Total City Schools Total Actuarial Accrued Liability $119.9 $100.1 $220.1 $84.7 $72.3 $157.0 Annual Required 12.3 10.9 23.2 10.3 9.2 19.5 Contribution Expected 2008 Costs 5.3 5.3 10.6 5.3 5.3 10.6 Cash Flow Increase 0.0 0.0 0.0 5.0 3.9 8.9 Trust · Trust enables City to use higher discount rate City may not divert assets of an OPEB Trustfor any purpose other than exclusive benefit of active or former employees, dependents or beneficiaries entitled to OPEB · Trust will state that: (i) all benefits subject to change (ti) benefits are determined as part of the annual budget process (iii) benefits are subject to annual appropriation (iv) employees do not have vested benefits until retirement June 3, 2008 I i I I I - 3 - CITY MANA GER 'S BRIEFING GASB45 TRUST FUND ITEM # 57670 (Continued) Mrs. Phillips stated the options: Separate Trust, Pooled Trust and Virginia Retirement System Bob Lauderberg - Managing Director - VMLlVACo Finance Program, appreciated the opportunity to work with Virginia Beach on this important issue. Virginia Municipal League and Virginia Association of Counties have been allies in terms of legislation to allow the Virginia Retirement System to offer a pooled Trust Fundfor OPED. For two (2) years, the Virginia Municipal League (VML) and VACo have lobbied in favor. When it appeared, the General Assembly was not going to approve this concept, the two associations wished to offer an option meeting a locality's needs to members. Virginia Pooled OPEB Trust · Only pooled OPEB Trust in Virginia: - Shared costs - More investment options · Cost Structure - Lifetime membership fee of $5,000 will cover the participant's initial legal costs and help defray program start-up expenses Participant custodial fee - $500 per year for Comerica Bank VMLlVACo Finance Program will defer its program administration costs for thejirst year in order to assist in the successful start-up of the program Fee projected to be under 0.5% after critical mass reached An Initiative of VA Co and Virginia Municipal League The Pooled OPEB Trust Fund is ajoint effort of the Virginia Association of Counties and Virginia Municipal League: . VACo-VML OPEB survey of local governments (June 2007) · Exploratory meeting with local officials (May 2007) · VACo-VML Pooled OPEB Trust Fund Task Force (Summer-Fall 2007) . Staffing by VMLlVACo Finance, with Kaufman & Canoles serving as Counsel Governance Board of Trustees for Virginia Pooled Trust · Five to nine members: Founding members serve minimum of six years; other members elected in weighted vote of all participants Local Finance Boards . Required by Code; provide direction to Trust Fund on behalf of locality ~ Director of Finance - City ~ Treasurer - City ~ Citizen with expertise Schools may join City's Local Finance Board . June 3, 2008 i i 'I I - 4 - CITY MANA GER 'S BRIEFING GASB45 TRUST FUND ITEM # 57670 (Continued) Roles Board of Trustees - Pooled Trust · Investment policy and guidelines · Asset allocation and risk . Investment Advisor/Consultant - Evaluation Associates - Milliman · Custodian bank selection - Comerica · Performance evaluation, quarterly · Next meeting June 6 Local Finance Board · Monitor investment results · Represent beneficial interest of City · Investment elections from alternatives · Select actuarial service providers Investment Portfolio . Actively manage portfolio with index funds for certain asset classes - results in higher rates of return and lower costs . Documents allow Trustees to provide up to two additional portfolios with different risk/return profiles Small Cap Manager being selected International Fund Manager being planned Others Investment Consultant Evaluation Associates, LLC Norwalk, Connecticut Full service investment consulting firm $250-BILLION in client assets, 140 institutional clients 66 employees, including 23 consultants 11 dedicated research analysts Linda Schlissel- Principal, Senior Consultant 28 years experience with Evaluation Associates since 1979 Clients range in size from S100m to SJOB Pooled Trust Exp.: · NY State Deferred Compensation (300 employers) · Major League Baseball GASB 45 Client: DC Health & Life Ins. Trust Advantages of V ACo/VML 1. A more diversified portfolio 2. Access to leading investment consultants and managers with exceptional expertise and research capabilities 3. The lowest cost option; cost sharing and economies of scale 4. Locally directed and controlled 5. Can transfer funds out at afuture date if other options become attractive June 3, 2008 i i 'I I - 5 - C IT Y MANA G E R 'S B R IE FIN G GASB45 TRUST FUND ITEM # 57670 (Continued) Mrs. Phillips advised the process and schedulingfor the City Council Session of June 10, 2008. There is also the possibility the Virginia Beach City Public Schools will request to be a part of the local finance Board. Process June 10, 2008, City Council Agenda will include actions for consideration to: Create City Local Finance Board (LFB) - Direct Local Finance Board to execute Trust Joinder Agreement - Establish the Trust, approve the form of the Trust and Trust Joinder Agreement - Approve deposit of Annual Required Contribution (ARC) by June 30, 2008 Local Finance Board will: - Meet regularly Evaluate if Trust should be moved in the future (requires notice) Represent the beneficial interest of the City in the Pooled Trust Fund - Monitor investment results Make investment elections as appropriate June 3, 2008 'I I - 6 - C IT Y MANA G E R 'S B R IE FIN G STUMPY LAKE CONSERVATION EASEMENT 3:08 P.M. ITEM # 57671 Clay Bernick, Coordinator - Environmental Management Center - Planning, provided an update concerning the Stumpy Lake Conservation Easement. . July 3,2001, City Council Briefing on North American Wetlands Conservation Act Grant Proposal Virginia Department of Game and Inland Fisheries Proposalfor $l-MILLION to acquire Beasley Tract on Back Bay Request for City to partner with in-kind grant match of conservation easement over Stumpy Lake property '-. .1!7'l' / ~T.,:j;nh"'-"~' :,'" r,i'l~"'l ./.;.:rt'lJ'n::i"'-rl ; I....' . '," ~.c.. ". ...... ','- ',< '~ ",t'" ...' ^:;, ,_' ~'~,r[~'!:~;i'~ ", ,_ ...... ;," . ':,~';,o..,:../' ,N. j ,/"..........':..~1'a \ '\/./'" .'''''IWhlteh~t M~..;h Acquisition \4'1"\ )"i'1 ~r l " -\>~1q.ilTA _ . Sft.J.-m4.' Ph as e II r :E:EJJ.. La~.~ . ~ i S~Ur'lJ:l'i..oKe! Eastern Se-ction !,~ (M=hi 7" ,.(;;~ 0 2 4 6 Milas ~~,~::JJ--~ :~ ~~a~ Beasley Acqui sition Tract _ Malch Tract ~}::::};] City of Chesapeake ~ VA DCR ~ III lll:[Itg NC PtJrks NCDCM NCWRC TNC ~tn~ ~ ~ ~ /:>.' '>] ,". .; us Government USFWS VDGIF City of Virginia Beach 'I I - 7 - C IT Y MANA G E R 'S B R IE FIN G STUMPY LAKE CONSERVATION EASEMENT ITEM # 57671 (Continued) July 3, 2001 City Council Decision . Staff recommendation to be partner in grant proposal . City Council endorsement . Letter sent by City Manager confirming grant support as partner for easement over Stumpy Lake property Actions for 2001 to present . Virginia Department of Game and Inland Fisheries obtained Grant . Beasley Tract acquired on Back Bay (254 acres, Y2 mile shoreline on western shore of Bay) . Managed as part of Princess Anne Waterfowl Management Area by the Commonwealth Remaining Actions Required . Place conservation easement over Stumpy Lake property that is: Outside of golf course tract Located on west side of lake and Does not include lake or road causeway Mr. Bernick displayed the Site Context: Master Land Use and Management Planfor Stumpy Lake Natural Area. Specifics of Easement . Will not restrict other planned or potential City projects (dam and spillway renovations, causeway road renovations, golf course lease or operations, Indian River Road improvements, Rosemont Forest drainage improvements, Brigadoon and Charlestown Lakes drainage maintenance) . Will work in harmony with Stumpy Lake Master Land Use and Management Plan for passive recreational use of the Stumpy Lake property (trails, education, etc.) and Southeastern Parkway and Greenbelt plans . Easement will be placed on property in perpetuity to ensure area encumbered by easement remains in conservation status and maintains natural conditions Actions Required . Ordinance to Authorize City Manager to Place Easement as Described scheduled for June 24, 2008, Council meeting Mr. Bernick advised the City's holdings in Chesapeake would be encumbered with the Conservation Easement (in Virginia Beach). Chesapeake is in agreement. June 3, 2008 I I I - 8 - C IT Y MANA G E R 'S B R IE FIN G ENERGY PERFORMANCE CONTRACT 3:15 P.M. ITEM # 57672 The City Manager advised that faced with uncharted energy cost increases Staff has prepared a Policy Report focused on energy performance contracting. City Council approval is requested: Establish a debt policy for Energy Performance Contracting Authorize $10-MILLION in debt (split evenly between Schools and City) for funding energy performance projects Require City and Schools to pay their respective debt service from operational energy costs saved Ensure energy performance contracts contain clauses which require performance bonding and annual audit of energy savings Partner with the Virginia Resources Authority to fund low cost financing loans Specify the duration of payback period, not to exceed seven years David L. Hansen, Chief - Finance and Technology, advised, as the City and Schools face significant increases in energy costs (electric, gas, fuel oil, and gasoline) Staff believes there are opportunities to initiate energy performance contracts which will reduce energy costs and apply those savings to funding energy project improvements. Several public entities have undertaken such energy performance contracts and are briefly referenced in the Policy Report. Currently, the Virginia Beach City Public School System (VBCPS) has conducted an energy audit and is prepared to move forward with projects that include lighting retrofits, HVAC replacement and measures for water consumption reduction. The City would like to move forward with conducting a reduced scope energy audit and follow through on multiple projects mirroring the same type of improvements proposed by the Schools. Since forming the Joint Energy Committee between City and Schools in March of this year, Staff has actively been focused on how to improve the efficient use of resources committed to energy. One of the first efforts was to generate a report on the Debt Policy for Energy Performance Contracting. The staff is attempting to determine the best strategy for "Going Green" (Environmental and Energy). Energy costs for Virginia Beach will exceed the FY 2008 budgeted amount of $43.7-MILLION Electricity = $29M Natural Gas = $3AM Fuel = $l1.3M The City predicts energy costs for Virginia Beach (in FY 2009) will exceed $59-MILLION. This is a staggering 35% increase. June 3, 2008 - 9 - C IT Y MANA G E R 'S B R IE FIN G ENERGY PERFORMANCE CONTRACT ITEM # 57672 Electricity FY 2008-09 Additional FY 2004-05 FY 200~ FY 2006-07 FY 2007-08 Funding Actual Actual Actual Adj Budget Budget Projected Needed Streetlights, Signals, Etc. $ 4,685,233 $ 4,516,146 $ 5,381,790 $ 5,100,000 $ 5,488,458 $ 6,421,496 $ 933,038 VB Comention Center 750,137 604,846 666,734 1,000,000 1,170,000 170,000 Lake Gaston Facilities 308,923 602,753 449,814 688,500 1,200,000 1,404,000 204,000 Sewer Pump Stations 663,559 667,762 668,320 690,387 688,369 805,392 117,023 City Buildings (General Fund) 3,139,061 3,521,546 3,691,186 3,169,653 3,671,548 4,295,711 624,163 All Others 3,408,549 2,547,709 3,180,894 1,815,088 1,635,041 1,912,998 277,957 City Total 12,205,325 12,606,053 13,976,850 12,130,342 13,683,416 16,009,597 2,326,181 Schools Total 12,297,869 13,510,537 12,638,527 16,849,507 NA NA NA Virginia Beach Total $24,503,194 $26,116,590 $26,615,377 $28,979,849 NA NA NA . 17% increase, based on data pro~ded by Dominion Virginia Power. Natural Gas FY 2008-09 Additional FY 2004-05 FY 2005-06 FY 2006-07 FY 2007-08 Funding Actual Actual Actual Adj Budget Budget Projected Needed VB Con..ention Center $ 406,975 $ 359,379 $ 266,693 $ 310,000 $331,700 $ 21,700 All Others 15,734 23,816 11,934 21,525 24,281 25,981 1,700 City Total 15,734 430,791 371,313 288,218 334,281 357,681 . 23,400 Schools Total 1,391,680 1,904,266 1,556,311 3,050,888 NA NA NA Virginia Beach Total 1,407,414 2,335,057 1,927,624 3,339,106 NA NA NA * 7% increase, based on data awilable through the United States Department of Energy. June 3, 2008 - 10- C IT Y MANA G E R 'S B R IE FIN G ENERGY PERFORMANCE CONTRACT ITEM # 57672 (Continued) Fuel FY 2008-09 Additional FY 2lJ04.{)5 FY2oo5-06 FY 2006-07 FY 2007-08 Funding Actual Actual Actual Adj Budget Budget Projected Needed Police Uniform Patrol $ 803,132 $1,043,288 $ 987,239 $ 1,149,297 $ 1,149,297 $ 1,597,523 $ 448,226 Bureau of Waste Collection 582,714 773,053 791,915 606,452 646,452 898,568 252,116 SWU - Operations & Maint 159,656 191,827 183,096 252,414 252,414 350,855 98,441 Fire Operations 193,745 256,526 287,063 374,661 374,661 520,779 146,118 EMS Operations 192,166 251,785 236,148 329,073 329,073 457,411 128,336 All Others 1,912,596 2,472,666 2,564,249 2,919,954 2,913,963 $ 4,050,409 1,136,446 City Total 3,644,029 4,989,165 5,069,710 5,631,851 5,665,660 7,875,545 2,209,665 Schools Total 2,348,028 3,171,083 3,219,531 5,673,575 5,992,725 NA NA Virginia Beach Total $6,192,057 $ 8,160,248 $8,289,241 $11,305,426 $11,656,565 NA NA . 39% increase, based on data pro'.1ded by the City's Automoti\e Sei\1ces Di'.1sion, City's "Top Ten" List $1,400,000.00 $1,200,000.00 (/) $1,000,000.00 I- ~ $800,000.00 ~ $600,000.00 c( $400,000.00 $200,000.00 $0.00 ~ d' J ~. d' # d' d' ~ ~ ~ ~' 0<:- ,>'" ''Ii 0" <Q 0V' 0" '~ 0<:' ;..0 ~" ~ ~ /SO' <(',,<:-'" <(' <(' ~ v Cj ,Q.,V' r/Ji ,,0 i;}' ').::i ,,,0 tiJ.~ ~~ cr ""~ ..g;. ~ ~ vcr 0 Cj ~"'o/ 0' ",,0 v'lJ' OV VV ~{:' <Q'It 0'1 ~ Cj ~<Q ~'1f (J0 I I June 3, 2008 I i - 11 - C IT Y MANA G E R 'S B R IE FIN G ENERGY PERFORMANCE CONTRACT ITEM # 57672 (Continued) City's "Top Ten" - Cost/SF $3.00 $2.50 ~ $2.00 z :::> $1.50 o :i $1.00 $0.50 $0.00 ~. n.'&> (j~' (i~' <Q'~t'\,. (i~' ~. ~ <0 &- v- v~ _~J . (i, !,,1i ,,,,,10 (}IO .o~ .,C; .~.c, IOV .c,' ,~ ~ '10 ~ ~ # ~'/ ~ ff ~ ~ ~ .....v i:)' ')V ,,,,10 'if ~' v.... ~~ '$ ~ (iV' 10<::3 <0'" cz,' ~IO (il(>' OV (i(i !..~ q;?~ o~ w <::3 ~<Q ~1i cjlO Energy Savings Measures - City ~ Energy-efficient lighting .:. Many buildings, including aquarium, Judicial Center, Operations Building, Recreation Centers ~ Variable speed drives and pumps .:. Multiple facilities, including Rec Centers, heat plant ~ Direct Digital Temperature Controls with night set back ~ Installation of OFF-peak ice storage technology at the Central Plant for ON-peak cooling demands in Municipal Center ~ Gas/electric switching technology at heat plant ~ Peak Demand Monitoring and load shedding at the Central Plant ~ Mandatory adjustment of thermostat settings throughout City facilities ~ Reduction in number of pool pumps operating at Recreation Centers ~ Window improvements (insulation AND sun screens) ~ LED traffic signal lights ~ Inventory of Street Lighting and monitoring, reporting of outages ~ Scheduled additional variable speed drives and pumps at Central Plant ~ Scheduled additional lighting efficiencies at: ~ Correction Center, Aquarium, Judicial Center, Operations, P A and GN Rec Center, Human Services ~ Scheduled additional HV AC Improvements: variable speed drives June 3, 2008 I I - 12 - CITY MANA GER 'S BRIEFING ENERGY PERFORMANCE CONTRACT ITEM # 57672 (Continued) veeps' "Top Ten" List $700,000.00 $600,00000 $500,000.00 ~ $400,000.00 ~ $300,000.00 00( $200,000.00 $100,000,00 $0.00 OlHS GRHS SHS lHS larkMS TallHS Cox HS ClMS PAHS KemHS vecps' uTop Ten" - Cost/SF $2.50 $2.00 ~ $1.50 $1.00 $0.50 $0.00 of /' ~ ./' / ~~-I' if/' cI' /' /' Energy Savings Measures - VBCPS >- Regular Updates to Principals regarding utilities cost and never use consumption >- Tips sent to facility managers to encourage staff to reduce consumption >- Extending HV AC setback for break periods when students are out, but non- instructional staff are working >- Implementation of HV AC temp range in facilities >- Summer schedule - 4-day work week >- 5% reduction in electricity use last fiscal year, despite increased square footage Mr. Hanson cited the Virginia Beach City Public Schools Energy Initiatives: >- Audits .:. Ameresco ../ VBCPS: complete ../ City: in progress .:. Noresco: 90% complete, waiting on VBCPS input );> Financing .:. Partnering with City to request CIP funding: ../ Pilot process for 2 year Contracts ../ Legal review June 3, 2008 I I - 13 - C IT Y MANA G E R 'S B R IE FIN G ENERGY PERFORMANCE CONTRACT ITEM # 57672 (Continued) VBCPS Project 1 - Ameresco ~ Indian Lakes ES, Plaza MS, Red Mill ES ~ S700K ~ Scope: .:. Lighting sensor improvements and controls .:. Vending machine controls .:. Solar array (Plaza MS) .:. Cooling tower sewer abatement (Red Mill ES) .:. Demand control ventilation (Red Mill ES) .:. Water conservation VPCPS Project 2 - Noresco ~ Providence ES, Brandon MS, Bayside HS, Rosemont ES, and Kingston ES ~ $3.8M ~ General Scope: .:. Lighting and lighting controls .:. Energy savings through behavior change .:. Energy management systems (Brandon & Providence) .:. Heat pump controls for portables ~ Scope (specialized): .:. Providence ES: ~ Geothermal (30% savings vs. carbon fuels) .:. Brandon MS ~ Rooftop unit replacement (library) ~ Asbestos abatement Energy Performance Contracts ~ Energy performance contracts are provided by an Energy Service Company (ESCo) or equipment manufacturer with a performance bond that. . . ~ Provides a guarantee on energy savings from the installed retrofit measures, and they offer a range of associated design, installation, maintenance and financing services. ~ The contract period can range from 5 to 10 years, and the customer is required to have a certain minimum level of capital investment Energy Performance Contracts in Virginia Beach - Policy Report ~ Energy cost saving projects are available for investment ~ VBCPS has conducted audit and is prepared to proceed ~ The City implements energy efficiencies thru routine MRR and is just beginning their energy audit for a trial project ~ Request to authorize Sl-MILLION in debt shared evenly ~ The City and the Schools each responsible for respective debt service ~ Repayment periods not to exceed ten years ~ Performance contract to contain requirement to conduct an annual audit of energy savings and have performance bonds ~ Evaluate the program as part of the Biennial budget process ~ Pursue low cost financing with Virginia Resources Authority June 3, 2008 I I i - 14 - C IT Y MANA G E R 'S B R IE FIN G ENERGY PERFORMANCE CONTRACT ITEM # 57672 (Continued) ~ City obtains lower cost lease-purchase financing (AAA advantage) instead of having to rely on contractor financing ~ Avoid paying contractor's cost of capital ~ Anticipating an increase to debt per capita of additional $20 ~ Treat peiformance contracting debt separate from Council Debt Policy of $2400 per capita since it has a guaranteed savings (similar to ARP with its own source of repayment) ~ Rating agencies will count this as a component of overall tax supported debt ~ Structure contracts to require audits and peiformance bonds City Focus for Performance Contracting 1. Central Heat Plant: B-Loop add variable speed drives, Ice Storage-Variable speed pump, Improvements to minimize natural gas utilization during Summer months 2. Correction Center: Electronic ballast and T-8 bulbs at Correction Center II 3. Virginia Aquarium: Changing incandescent lights to more energy efficient types, Lighting Control System 4. Judicial Center: Energy efficient lighting and lighting controls, Elevator motor - more energy efficient motors for traction elevators 5. Bayside Recreation Center: Variable speed drives on pumps, fans and the cooling tower 6. Central Library: Sun screening mesh on window on the south wall 7. Operations Building: Variable speed drives on circulation pumps (hot and chilled water) Double glazed insulated windows,finish conversion of T-12 to T-8 bulbs and electronic ballasts, Lighting controls 8. Princess Anne Recreation Center: Variable speed drives on pumps and AHU fans Replace the pool lighting with metal halide Complete conversion to T-8 lamps and electronic ballasts 9. Great Neck Recreation Center, DDC controls, variable speed drives on pumps and air handling units 10. Human Services Building: Lighting control system 11. Kempsville Recreation Center: Install ducted returns, variable speed drives on pumps, replace the electronic boiler with natural gas 12. Virginia Beach Convention Center: Lighting replacements, Energy Management Upgrade and Lighting upgrades for the Parking Garages June 3, 2008 'I I - 15 - C IT Y MANA G E R 'S B R IE FIN G ENERGY PERFORMANCE CONTRACT ITEM # 57672 (Continued) Recommendations ~ That the City Council establishes a total of $1 O-MILLION dollars to be spent on energy performance contracts over the FY 2008-09 and FY 2009-10 Biennial budget, split evenly between the City and Schools ~ That CIP Project 3-119 Energy Performance Contracts (City) and CIP Project 1-109 Energy Performance Contracts (Schools) are hereby created to track and maintain these agreements ~ That each project will be financed with lease-purchase financing or other forms of appropriation - backed financing that provides the lowest cost available. The savings in energy costs will be the source of repayment for this financing ~ That this ordinance is contingent upon the City Council's adoption of a resolution to address energy performance contracts in its debt management policies and guidelines ~ That the City will review these contracts at the end of the two year trial period to examine both their effectiveness and the impact it has with the financial rating agencies on the City's debt policies Councilman Villanueva referenced the news article in USA today discussing a four (4)-day work week. Several localities throughout the United States are utilizing this concept. Could this concept be modeled in Virginia Beach? Councilman Villanueva requested a determination be made of non-essential departments which could utilize the 4-day work week. The Federal Government has been utilizing this concept for a while. Mr. Hansen advised one of the concepts is optimizingjully energized space. Jfyou energize the buildings of a City, you want to maximize its use. The Joint Energy Committee will question whether THE City can effectively go to a four-day work week (10-hour days) and still maintain public services. Mayor Oberndorf advised Birmingham, Alabama, has established a 4-day work week. Their impetus is to save their employees funds by not having to drive 5-days a week with the escalating cost of gasoline. Councilman Wood IS concerned whether a 4-day work week would be acceptable to citizens who need to visit the offices of City Hall. Councilman Wood expressed concern re the geo-thermal concept. This is an extremely expensive and complimented process. Councilman Wood wished to be advised of the quantifiable savings. The data relative the quantifiable savings will be provided. Tony Arnold, Director of Facilities, Planning and Construction - Virginia Beach City Public Schools, advised the Renaissance Academy has a geo-thermal system and the maintenance department is extremely justified. This investment pays for itself. The contractors are required to provide a bond. The contractors guarantee within the contract that certain savings will be achieved. Jf the savings are not achieved, the contractor will provide the difference in cost. Mayor Oberndorf advised Iceland uses geo-thermal very economically. Mr. Hansen advised being Director of Public Works at Fort Eustis, he completed installing two (2) geo- thermal fields in 2000 and has not gone back to review these, but will contact them and determine their efficiency. Councilman DeSteph inquired re the investment of $lO-MILLION, what is the expected return on investment? June 3, 2008 Policy Report May 15, 2008 DEBT POLICY FOR ENERGY PERFORMANCE CONTRACTING I. BACKGROUND As a measure to reduce energy costs as well as protect the environment, the City and School system have been exploring energy performance contracts. Energy performance contracting involves a vendor (contractor) conducting a detailed energy audit and then making improvements to a building that reduces energy costs. The savings are such that the cost of the improvements is recaptured within a reasonable period. The savings are guaranteed by the contractor who is required to take out a performance bond, whereby the shortfall is paid to the City if the savings do not materialize. The City and Schools would like to finance their debt over a number of years the cost of these energy improvements. This policy report examines the effect these energy performance contracts have on the City's debt policies and practices, and recommends a policy change to accommodate this type of contracting. Several public bodies in Virginia have already entered into energy performance contracts: Fairfax County Public Schools ($22.5 million over 6 phases), Chesterfield County Schools and County ($3.1 million between both agencies), Old Dominion University ($2.7 million), Portsmouth Public Schools ($8.4 million), and Newport News Public Schools ($27.4 million over two phases). Unfortunately, most of these localities are too early in the process to report official savings. However we did receive some information from Fairfax County. I I Energy Performance contracts have been in place in the Fairfax Facilities Management Department (FMD) for over five years resulting in combined annual energy savings over $1,000,000. These savings are realized each and every year once an energy project is completed. They have completed energy projects for lighting, HV AC and computer controls in over 130 buildings since program inception. Examples of recent Fairfax facilities projects: · Completed Energy Performance Contract valued at $2,132,000 to upgrade lighting and HV AC systems at the three building jail complex. Annual energy savings $184,000/yr. This project combined capital renewal requirements with energy saving strategies. · Completed Energy Performance Contract valued at $1,418,000 to upgrade lighting and HV AC systems at the Juvenile Detention Center and Springfield Warehouse. Annual energy savings $87,000/yr. This project combined capital renewal requirements with energy saving strategies. · Completed construction on an Energy Performance Contract valued at $915,000 to upgrade lighting and HV AC systems at the three building Government Center complex. Annual energy savings $111 ,500/yr. II. CONSIDERATIONS A. Legal Virginia State Code Section 11-34.1 establishes that "It is the policy of the Commonwealth to encourage public bodies to invest in energy conservation measures and facility technology upgrades that reduce energy consumption, produce a cost savings, and improve the quality of indoor air in facilities..." Sections 11-34.2 & ] ]_ 34.3 of the State Code give localities the authority to enter into energy performance- based contracts. Although the State Code provides that energy performance contracts would not be considered debt, the rating agencies indicate that these contracts are a form of debt for purposes of evaluating the financial condition of a governmental unit. City Council must approve all debt and has an array of policies both legal and administrative to guide the City's debt program. From a legal standpoint, the energy performance contracts are contractual obligations and therefore, do not affect the City's Charter Debt nor do they require voter approval. These contracts are likewise 2 I I not Constitutional Debt and therefore do not affect the authorized debt limit imposed by the State Constitution. However, without further discussion with the rating agencies, the contractual obligations would be initially included in the City's overall net debt as calculated by the agencies. B. Financial/Debt Policies City Council has adopted guidelines for the management of general obligation debt which the rating agencies have described as excellent management tools. These policy limits and where the City currently stands (based on the City's most recent Official Statement) are: 1) The total annual budgeted debt service for general government-supported debt will not exceed 10% of general government budgeted expenditures. 2005 2006 2007 March 1,2008 Ratio of Annual Debt Service to General Government 8.0% 8.0% 7.5% 7.4% Expenditures 2) The general obligation net debt will not exceed 3.5% of assessed value. 2005 2006 2007 March 1.2008 Ratio of Debt to Assessed Value 2.6% 2.2% 2.0% 1.8% 3) The general obligation net debt per capita will not exceed $2,400 per capita. 2005 2006 2007 March 1,2008 Net Debt per Capita $1,894 $1,944 $2,200 $2,292 4) Total general obligation net debt per capita shall not exceed 6.5% of per capita personal income. 2005 2006 2007 March 1, 2008 Ratio of Per Capita Debt to Per Capita Income 4.9% 4.8% N/A N/A As previously stated these energy performance contracts would be initially included in the above ratios, by the rating agencies. It is uncertain whether the agencies would change their positions at some future time as energy performance contracting becomes more widely used. This will likely be determined through proven results. 3 I; I I I From the City's perspective it should be noted that there is a precedent for debt with a specified funding source to be treated separately. In 1995, City Council passed an ordinance to create the Agricultural Reserve Program (ARP) whereby treasury strips are purchased to serve as the source of repayment for the financing instrument known as installment purchase agreement. The treasury strips are the guaranteed funding source for the future repayment of the installment purchase agreement for development rights. The rating agencies agreed this debt is not included in the City's debt calculations since the debt has a funding source (treasury strips). Energy performance contracts also have a guaranteed funding source in energy savings, secured by a performance bond that is paid for by the contractor. This bond can be called upon by the City if the agreed savings do not materialize. C. Proposed Projects If Council establishes a separate debt policy for energy performance contracts, two capital projects would be established, one for the City and one for Schools, each for $5 million. Virginia Beach Public Schools' energy audit has resulted in projects that will involve lighting retrofits and occupancy sensors to provide the bulk of the energy savings. HV AC replacements will also be included in some of the schools. There are also some measures for water consumption reduction as a part of the overall savings in the effort. In addition, some of the improvements are intended to serve as teaching units for students. The City's approach will be based on the results of a limited energy audit, and will focus on many of the same type of improvements identified by the Schools. The emphasis will be to invest in quick return, easily measurable energy performance improving projects. III. AL TERNA TIVES 1) Create a separate debt policy for energy performance contracting Applying current standards, any financing arrangement used to pay for energy improvements will be considered debt by the agencies. The creation of a separate debt policy for energy improvement debt would demonstrate to the agencies our concern and awareness of this unique financing, as follows. It would be staff intention that debt incurred specifically for energy performance contracts not be included in the City's debt calculation. . In this manner, the City would be recognizing the energy performance contracting program as a unique undertaking that provides the City the opportunity to reap long term energy savings by replacing older infrastructure, improving maintenance, and taking advantage of new technology. The program utilizes a type of debt which is backed by the on-going savings in energy costs and guaranteed by a required performance bond from the contractor. 4 I i The City Council currently has no intention to employ performance contracting agreements for any purpose in addition to the energy savings program. To accomplish this, the City and Schools would use energy performance contracts in a cautious approach, i.e., no more than $10 million over the next 2 years, shared equally between City and Schools. By limiting the debt to $10 million, the City's debt per capita ratio would only increase approximately $20 per capita. This would be in addition to the existing policy for all other debt of $2400 per capita, and similar to the separate policy for ARP. In addition, the hope is that as these contracts become more prevalent, and the results more definitive, the rating agencies may exclude them from debt calculations given their funding source. 2) Do not create a policy for energy performance contracting Energy projects would have to compete with all other capital projects in the CIP for funding. Given the Capital Improvement Plan for FY 2008-09, this would require reducing other projects in the CIP or proposing very limited projects for energy performance savings. Energy projects would also compete for maintenance and repair operational dollars and as is the current procedure, only occurs as part of our routine replacement process. IV. STAFF RECOMMENDATION Alternative I: Council establish by ordinance two capital projects, one for the City and one for the Schools for energy saving improvements that would be fmanced through lease-purchase financing. In addition, Council establish by ordinance a separate, limited debt policy for energy performance contracting of up to $5 million each for City and Schools for a total not to exceed $10 million. This authorization would be for capital projects involving energy improvements that are secured by performance bonds. The ordinance should include authorization for the City Manager to negotiate energy performance contracts, with savings secured by a performance bond, in a form satisfactory to the City Attorney Staff also recommends that this initiative be reevaluated during the budget process every two years to examine the results. At that point the City may wish to increase or decrease the limit for energy performance contracts used in both City and School projects. In addition, the rating agencies may be more comfortable with these agreements and how they view this type of contract. The Director of Finance would investigate the opportunity to use low interest financing provided by the Virginia Resources Authority. 5 , il ~tftu~ J. ~/ .~ / 2 S / DS Prepared by: Matthew J. Bosse Date Management and Budget Analyst ~&r- 5h?/b~ , . Date Debt & Financial Services Administrator Reviewed by: ~ \l-"LJ~~OJ>b 5/;))(63 .tyrCatheryn R Whitesell Date Director of Managem 5.. ci3-0g Patricia A. Phillips Date Director of Finance ~!,~~ 5./:< f/() ~ Farrell E. Hanzaker I Oate hief Financial Ofti er, Schools 0/ :JJ/or I Dale D . Hansen ~'b ~~D"h Date ' Chief of Finance & Technology ~~~ 5/z~/()i frr Leslie L. Lilley , Date City Attorney Approved by: ~ <)/'liJ/E18 Date 6 i I I - 16 - C IT Y MANA G E R 'S B R IE FIN G ENERGY PERFORMANCE CONTRACT ITEM # 57672 (Continued) The City Manager advised the Dominion Virginia Power Rate Increase notice was received the day after the Operating Budget was sent to be printed. This rate increase equates to approximately a $2.5- BILLION, hit commencing July First. Council Lady Henley referenced mass transit. There is a mass transit already existing within the City totally free to the users.' the school bus system. Have the schools given any thought to developing an encouragement program for the high school students to understand the benefit gained if they rode the buses instead of driving their individual cars? An environmental benefit would be realized. John S. Kalocay, Assistant Superintendent - Virginia Beach City Schools, believes because of the cost of fuel, the parents will also encourage the students to ride the buses. This concept will be reviewed. Councilman Diezel inquired re data concerning the wind powered turbine, the cost associated and the return generated. June 3, 2008 'I I - 17 - CITY COUNCIL LIAISONREPORTS 4:00 P.M. ITEM # 57673 Councilman Villanueva, Technology Liaison, distributed his report, which is hereby made a part of the record. Three (3) Projects were highlighted: InSITE - Human Resources Payroll System - CIP 3-280 MDT (Mobile Data Terminal) Replacement - CIP 3-281 Enterprise Interactive Voice Recognition (IVR) System The InSITE - Human Resources Payroll System - CIP 3-280 ($10,223,061) is projected to be on-line January 1, 2009. The first "Proof of Concept" sessions were held the week of May 19, 2008. The objective of the sessions was to demonstrate End-to-End Business processes to the primary department process owners and attain final confirmation and acceptance of the process flow and content. The hiring, benefit enrollment, time entry, and payroll processes were reviewed using a representative sample of the different types of members that workfor the City. Future Related Activities Phase 1 July: Testing of individual components of the new system will be done in July and all business requirements will be frozen at that time August - September: System integration and payroll testing (testing how the system interacts with other systems that receive data from the new system and payroll processing) October - November: Training January 1, 2009: New system launch Phase 2 January 2009 - July 2009.' Employee training/learning management online candidate recruitment and member self service modules implemented. June 3, 2008 I I I - 18 - CITY COUNCIL LIAISONREPOR TS ITEM # 57673 (Continued) The MDT (Mobile Data Terminal) Replacement CIP 3-281 ($5,000,000) are located in all Public Safety vehicles. Four hundred and twenty-one (421) MDT's deployed, with five MDT deployments remaining awaiting delivery of replacement vehicles (3 Fire Department, 2 Police Department). The Project is complete. Future Related Activities Deployment of Automatic Vehicle Location (A VL) Application in the 9-1-1 Center Phase 1 Line of Site Routing in development Projected Launch Date - January 2009 Deployment of the Quick Voice Application of Police MDTs Project in chartering phase Deployment of In-Vehicle Mapping in all Public Safety Vehicles Project approved in FY 09-FY 14 CIP Project will follow completion of A VL project Deployment of Microsoft Desktop Suite on Police MDTS Project approved in FY 09-FY 14 CIP Enterprise Interactive Voce Recognition (IVR) System ($121,000 Public Utilities, $236,000 Enterprise) Implement new Interactive Voice Response System (IVR). IVR is a phone technology that allows a compute to detect voice and touch tones form a phone call. The IVR system responds with prerecorded or dynamically generated audio to further direct callers on how to proceed. Present Status The IVR production environment was established in late March and the applications supporting Public Utilities were moved into production on March 31, 2008. Since the Public Utilities system launched on March 31: average wait time has dropped 56% (to 1.5 minutes) abandoned calls havefallen by nearly 60% (to 8.8%) Future Related Activities Public Utilities/Public Works Business Call Recording Public Utilities Virtual Hold June 3, 2008 'I i - 19 - CITY COUNCIL LIAISON REPORTS ITEM # 57673 (Continued) Council Members DeSteph and Wood, Liaisons to the Virginia Aquarium and Marine Science Center, distributed the latest status report, which is herby made a part of the record. Project Budget: Two contracts with the W.M Jordan Company; City contract of$12.6-MILLION for general construction; Aquarium Foundation contract of $6.1-MILLION for the exhibits and habitats. Contractor payments to-date: $9.5-MILLION for City Contract (75% complete) $1,795,000 for Foundation Contract (29% complete) City Contingency fund expenditure to date: Remaining contingency fund: $368,312 $947,876 Schedule City contract issued April 25, 2007, for 16-month construction period to August 17, 2008; most recent schedule from contractor shows work completed by mid-October 2008 Foundation Contract issued June 13, 2007, with contract completion December 15, 2008; most recent schedule from contractor shows work completed by December 15, 2008 June 3, 2008 I I I - 20- CITY COUNCIL COMMENTS 4:10 P.M. ITEM # 57674 Mayor Oberndorf advised Governor Tim Kaine has scheduled a Transportation Town Hall Meeting for tonight, Tuesday, June 3, 2008, 6:30 P.M, to convene at the Virginia Beach Convention Center. Mayor Oberndorf has been invited to introduce Governor Kaine and has requested Vice Mayor Jones to conduct the Formal Session. ITEM # 57675 Mayor Oberndorf referenced a proposed Resolution to be ADDED to the Agenda: Resolution in support of the proposal by BON SECOURS HAMPTON ROADS HEALTH SYSTEM to construct an Acute Care Hospital in Virginia Beach as part of the Princess Anne Corridor Plans (DISTRICT 7 - PRINCESS ANNE) Council Lady Henley expressed concern as she was under the impression the City Council did not want to favor individual hospitals. Council Lady Henley referenced requests received from Children's Hospital of the Kings Daughters (CHKD) refundingfrom the City, ITEM # 57676 Councilman Wood distributed newspaper articles entitled: "Guiding the way when seconds count - Navigation and vehicle locator systems offer valuable tools to first responders" May 20, 2008, USA TODA Y *Virginia Looks to Other States' Inmates Plan is to Rent Space, Despite Crowded Jails" June 1,2008, THE WASHINGTON POST. * This article states that at least one Sheriff (Virginia Beach) has threatened to sue the State if Governor Timothy M Kaine does not take action this week. Said articles are hereby made a part of the record. ITEM # 57677 Mayor Oberndorf and Jim Ricketts, Director of Convention and Visitors Bureau, were invited to participate in the Redskins Program Radio Station. It was interesting listening to the questions from fans re their Summer travel plans. Many of the young men who called in are under the impression that the City is taking down the basketball courts and nets. Mayor Oberndorf informed them she was not aware of this. Cindy Curtis, Director of Parks and Recreation, advised some of the neighborhoods have requested the basketball goals be removed, because of activities which caused them concern. Also. there have been neighborhoods which requested basketball courts andfacilities be installed. June 3, 2008 'I I - 21 - AGE N DA REV IE W S E S S ION 4:13 P.M. ITEM # 57678 1.3. Ordinance to AUTHORIZE the transfer of$292, 790 from Operating to Capital Outlay accounts within the FY 2007-08 Operating Budget of Parks and Recreation re purchase equipment for each recreation center. Council Lady Henley expressed concern and requested the source of the funding be explained. Council Lady Henley was astounded re the declining memberships and use of the Recreation Center. Perhaps this might be the source offundingfor the new Bayside Recreation Center. Cindy Curtis, Director of Parks and Recreation, advised the Referendum Funding is dedicated to paying off debt service, providing for operations, maintenance and capital equipment of the Recreation facilities. This funding is completely designated towards replacing capital equipment that encourages individuals to utilize the facilities. Based on the survey and discussion re the Strategic Planning Process, the citizens have informed the City the pools have become boring as they are not family-oriented. Examples of improvements were stipulated. At the Bow Creek Recreation Center, there will be the addition of an inflatable waterslide, an aquatics chair lift for handicapped individuals to access the pool and a climbing wall in the children's area to fight obesity Maintenance of the Recreation Centers was included in the Referendum re recreation centers. Information shall be provided re the annual operating costs of each Recreation Center. Council Lady Henley wishes to review the funding mechanism in the Referendum Council Lady McClanan expressed concerns when the Bonds are paid off on these Recreation Centers, the decisions on the expenditures of funds should be the City Councils. This item should be discussed thoroughly. The City Manager shall provide data relative the Recreation Center Referenda. ITEM # 57679 Councilman Villanueva requested Reconsideration be SCHEDULED and ADDED to the Agenda.' Reconsideration of Application of NIMMO CIHLDCARE and RESOURCE LEARNING CENTER, INC. for Modification of Conditions approved by City Council on November 23, 1993 and denied May 6, 2008 (DISTRICT 7 - PRINCESS ANNE) ITEM # 57680 Councilman DeSteph distributed; Resolution AUTHORIZING changes to the Health Care Coverage available to active and retired employees A Briefing shall be provided to City Council on June 10, 2008, with the Resolution scheduled for June 24, 2008. Ordinance to ADD City Code Section 21-322.1 pertaining to Veterans Parking Exemption. This Ordinance shall be schedule for the City Council Session of June 10, 2008. June 3,2008 'I i - 22- AGE N DA REV IE W S E S S ION ITEM # 57681 BYCONSENSUS, thefollowing items shall compose the CONSENT AGENDA: 1. ORDINANCES 1. Ordinance to AMEND Section 23-2.1 of the City Code re curfews after declarations of emergency to correct a typographical error. 2. Ordinance to A UTHORIZE the acquisition of property for $13,000 at Lakeside, Locust Crescent, from Francis E. Haley. Jr., Inc.; and, AUTHORIZE the City Manger to execute all documents (DISTRICT 4- BA YSIDE) 3. Ordinance to A UTHORIZE the transfer of $292,790 from Operating to Capital Outlay accounts within the FY 2007-08 Operating Budget of Parks and Recreation re purchase equipment for each recreation center. Item 1.3 shall be DEFERRED, BY CONSENT, until the City Council Session of June 10,2008. June 3, 2008 'I i - 23 - ITEM # 57682 Mayor Meyera E. Oberndorf entertained a motion to permit City Council to conduct its CLOSED SESSION, pursuant to Section 2.1-3711 (A), Code of Virginia, as amended, for the following purpose: PERSONNEL MATTERS: Discussion, consideration of or interviews of prospective candidates for employment, assignment, appointment, promotion, performance, demotion, salaries, disciplining or resignation of specific public officers, appointees or employees pursuant to Section 2.2-3711 (A}(1) Council Appointments: Boards, Commissions, Committees, Authorities, Agencies and Appointees PUBLICLY-HELD PROPERTY: Discussion or consideration of the, acquisition, or of the disposition of publicly-held property, where discussion in an open meeting would adversely affect the bargaining position or negotiating strategy of the public body pursuant to Section 2,2-3711 (A}(3). Rudee Loop Upon motion by Councilman Wood, seconded by Vice Mayor Jones, City Council voted to proceed into CLOSED SESSION at 4:50 P.M. Voting: 8-0 Council Members Voting Aye: William R. "Bill" DeSteph, Harry E. Diezel, Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan, Mayor Meyera E. Oberndorf Ron A. Villanueva and James L. Wood Council Members Voting Nay: None Council Members Absent: Robert M Dyer, John E. Uhrin and Rosemary Wilson (Closed Session: 4:50 P.M. - 5:30 P.M.) (Break: 4:51 P.M. - 4:58 P.M. (Dinner: 5:30 P.M. - 5:55 P.M.) June 3,2008 'I i - 24- FORMALSESSION VIRGINIA BEACH CITY COUNCIL June 3, 2008 Vice Mayor Louis R. Jones called to order the FORMAL SESSION of the VIRGINIA BEACH CITY COUNCIL in the Council Chamber, City Hall Building, on Tuesday, June 3, 2008, at 6:00 P.M Council Members Present: William R. "Bill" DeSteph, Harry E. Diezel, Robert M Dyer, Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan, John E. Uhrin, Ron A. Villanueva, and James L. Wood Council Members Absent: Mayor Meyera E. Oberndorf [Introducing Governor Kaine at the Transportation Town Meeting] Rosemary Wilson [Family Vacation out of Co un tryJ INVOCA TION: Reverend E. Ray Cox, Sr. New Hope Baptist Church PLEDGE OF ALLEGIANCE TO THE FLAG OF THE UNITED STATES OF AMERICA Vice Mayor Jones DISCLOSED, for many years, he served on the Board of Directors of Resource Bank. Three (3) years ago, Fulton Financial Corporation ("Fulton Financial'') purchased Resource Bank. On March 3], 2007, Vice Mayor Jones retired from the Board of Directors. Although, he is no longer a Board Member, he owns stock in Fulton Financial, and that stock ownership causes him to have a "personal interest" in Fulton Financial. However, due to the size of Fulton Financial and the volume of transactions it handles in any given year, Fulton Financial, or any of the banks that are owned by Fulton Financial, may have an interest in numerous matters in which Vice Mayor Jones has no personal knowledge. In order to ensure his compliance with both the letter and the spirit of the State and Local Government Conflict of Interests Act, it is his practice to thoroughly review the agenda for each meeting of City Council for the purpose of identifYing any matters in which he might have an actual or potential conflict. If during his review, he identifies any matters, Vice Mayor Jones will prepare and file the appropriate disclosure letter to be recorded in the official records of City Council. Vice Mayor Jones regularly makes this disclosure. Vice Mayor Jones' letter of April] 0, 2007, is hereby made a part of the record. June 3, 2008 I I i - 25 - Item V-Eo CERTIFICATION OF CLOSED SESSION ITEM # 57683 Upon motion by Councilman Wood, seconded by Councilman DeSteph, City Council CERTIFIED THE CLOSED SESSION TO BE IN ACCORDANCE WITH THE MOTION TO RECESS. Only public business matters lawfully exempt from Open Meeting requirements by Virginia law were discussed in Closed Session to which this certification resolution applies. AND, Only such public business matters as were identified in the motion convening the Closed Session were heard, discussed or considered by Virginia Beach City Council. Voting: 8-0 Council Members Voting Aye: William R. "Bill" DeSteph, Harry E. Diezel, Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan, John E. Uhrin, Ron A. Villanueva, and James L. Wood Council Members Voting Nay: None Council Members Abstaining: Robert M Dyer Council Members Absent: Mayor Meyera E. Oberndorf and Rosemary Wilson Councilman Dyer ABSTAINED, as he did not attend the Closed Session. He was taking his mother to the physician. June 3, 2008 I I RESOLUTION CERTIFICATION OF CLOSED SESSION VIRGINIA BEACH CITY COUNCIL WHEREAS: The Virginia Beach City Council convened into CLOSED SESSION, pursuant to the affirmative vote recorded in ITEM # 57682, Page 23, and in accordance with the provisions of The Virginia Freedom of Information Act, and, WHEREAS: Section 2.2-3712 of the Code of Virginia requires a certification by the governing body that such Closed Session was conducted in conformity with Virginia law. NOW; THEREFORE, BE IT RESOL VED: That the Virginia Beach City Council hereby certifies that, to the best of each member's knowledge, (a) only public business matters lawfully exempted from Open Meeting requirements by Virginia law were discussed in Closed Session to which this certification resolution applies; and, (b) only such public business matters as were identified in the motion convening this Closed Session were heard, discussed or considered by Virginia Beach City Council. ~ City Clerk June 3, 2008 i I I - 26- Item V-F.] ITEM # 57684 Upon motion by Councilman DeSteph, seconded by Councilman Dyer, City Council APPROVED the Minutes of the INFORMAL and FORMAL SESSIONS of May 27,2008. Voting: 9-0 Council Members Voting Aye: William R. "Bill" DeSteph, Harry E. Diezel, Robert M Dyer, Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan, John E. Uhrin, Ron A. Villanueva and James L. Wood Council Members Voting Nay: None Council Members Absent: Mayor Meyera E. Oberndorf and Rosemary Wilson June 3, 2008 I I I - 27 - Item V-G. PRESENTATION ITEM 57685 Vice Mayor Jones RECOGNIZED the following Boy Scouts in attendance to earn their merit badges for Citizenship in the Community: Boy Scout Troop 378 Virginia Beach United Methodist Church Christopher Hanley Boy Scout Troop 79 Fort Story Nigal Shank Reid Bixler Vice Mayor Jones presented each Scout with a City Seal pin. Vice Mayor Jones also recognized students from the Princess Anne High School Government Class who were in attendance. June 3, 2008 ,I i - 28 - Item V-G.] ADOPTAGENDA FOR FORMAL SESSION ITEM # 57686 BY CONSENSUS, City Council ADOPTED: AGENDA FOR THE FORMAL SESSION ADDED: Resolution in support of the proposal by BON SECOURS HAMPTON ROADS HEALTH SYSTEM to construct an Acute Care Hospital in Virginia Beach as part of the Princess Anne Corridor Plans (DISTRICT 7 - PRINCESS ANNE) Reconsideration of Application of NIMMO CIHLDCARE and RESOURCE LEARNING CENTER, INC. for Modification of Conditions approve,d by City Council on November 23, 1993 and denied May 6, 2008 (DISTRICT 7 - PRINCESS ANNE) June 3, 2008 ,I i - 29- Item V-G.2 ADD-ON ITEM # 57687 Upon motion by Councilman Villanueva, seconded by Councilman DeSteph, City Council ADDED and SCHEDULED for the City Council Session of July 8, 2008: Reconsideration of Application of NIMMO CIHLDCARE and RESOURCE LEARNING CENTER, INC. for Modification of Conditions approved by City Council on November 23, 1993 and denied May 6, 2008 (DISTRICT 7 - PRINCESS ANNE Voting: 7-2 Council Members Voting Aye: William R. "Bill" DeSteph, Harry E. Diezel, Robert M Dyer, Vice Mayor Louis R. Jones, John E. Uhrin, Ron A. Villanueva and James L. Wood Council Members Voting Nay: Barbara M Henley and Reba S. McClanan Council Members Absent: Mayor Meyera E. Oberndorf and Rosemary Wilson June 3, 2008 'I I - 30 - Item V-G.3. ADD-ON ITEM # 57688 Upon motion by Councilman DeSteph, seconded by Councilman Dyer, City Council ADDED to the Agenda which shall be Item 4. of the Consent Agenda: Resolution in support of the proposal by BON SECOURS HAMPTON ROADS HEALTH SYSTEM to construct an Acute Care Hospital in Virginia Beach as part of the Princess Anne Corridor Plans (DISTRICT 7 - PRINCESS ANNE) Voting: 9-0 Council Members Voting Aye: William R. "Bill" DeSteph, Harry E. Diezel, Robert M Dyer, Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan, John E. Uhrin, Ron A. Villanueva and James L. Wood Council Members Voting Nay: None Council Members Absent: Mayor Meyera E. Oberndorf and Rosemary Wilson June 3, 2008 'I I - 31 - Item V-I. ORDINANCES ITEM 57689 Upon motion by Councilman Wood, seconded by Councilman Dyer, City Council APPROVED in ONE MOTION Items 1, 2, 3 (DEFERRED), and 4 (ADD-ON) of the CONSENT AGENDA. Item 3 (Capital Equipment / Recreation Center) shall be DEFERRED until the City Council Session of June 10, 2008) Voting: 9-0 (By Consent) Council Members Voting Aye: William R. "Bill" DeSteph, Harry E. Diezel, Robert M Dyer, Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan, John E. Uhrin, Ron A. Villanueva and James L. Wood Council Members Voting Nay.' None Council Members Absent: Mayor Meyera E. Oberndorf and Rosemary Wilson June 3, 2008 i I I - 32 - Item V-I.I. ORDINANCES ITEM 57690 Upon motion by Councilman Wood, seconded by Councilman Dyer, City Council ADOPTED: Ordinance to AMEND Section 23-2.1 of the City Code re curfews after declarations of emergency to correct a typographical error Voting: 9-0 (By Consent) Council Members Voting Aye: William R. "Bill" DeSteph, Harry E. Diezel, Robert M Dyer, Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan, John E. Uhrin, Ron A. Villanueva and James L. Wood Council Members Voting Nay: None Council Members Absent: Mayor Meyera E. Oberndorf and Rosemary Wilson June 3, 2008 ,I I 1 AN ORDINANCE TO AMEND SECTION 23- 2 2.1 OF THE CITY CODE PERTAINING TO 3 CURFEWS AFTER DECLARATIONS OF 4 EMERGENCY 5 6 SECTION AMENDED: ~ 23-2.1 7 8 BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF VIRGINIA 9 BEACH, VIRGINIA: 10 11 That Section 23-2.1 of the Code of the City of Virginia Beach, Virginia, is hereby 12 amended and reordained to read as follows: 13 14 Sec. 23-2.1. Curfews after declarations of emergency. 15 16 (a) Pursuant to the police powers granted to the city by Virginia Code section 17 15.2-11 05~, and in the interest of promoting public safety, the city manager or his 18 designee is hereby authorized to impose a curfew after the declaration of an 19 emergency, in accordance with the provisions of this section. 20 21 22 Adopted by the City Council of the City of Virginia Beach, Virginia, on this 3rd day of June, 2008. i I I - 33 - Item V-I.2. ORDINANCES ITEM 57691 Upon motion by Councilman Wood, seconded by Councilman Dyer, City Council ADOPTED: Ordinance to AUTHORIZE the acquisition of property for $13,000 at Lakeside, Locust Crescent, from Francis E. Haley, Jr., Inc.; and, AUTHORIZE the City Manager to execute all documents (DISTRICT 4 - BA YSIDE) Voting: 9-0 (By Consent) Council Members Voting Aye: William R. "Bill" DeSteph, Harry E. Diezel, Robert M Dyer, Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan, John E. Uhrin, Ron A. Villanueva and James L. Wood Council Members Voting Nay: None Council Members Absent: Mayor Meyera E. Oberndorf and Rosemary Wilson June 3, 2008 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 AN ORDINANCE TO AUTHORIZE THE ACQUISITION OF APPROXIMATELY .057 ACRES /2,482 SQ. FT. OF REAL PROPERTY KNOWN AS LOT 32, BLOCK 2, LAKESIDE, LOCUST CRESCENT, FOR $13,000 FROM FRANCIS E. HALEY, JR., INC. WHEREAS, Francis E. Haley, Jr,. Inc., a Virginia corporation ("Haley") owns Lot 32, Block 2, Lakeside, Bayside District, GPIN 1469-52-7336 (the "Property"); WHEREAS, Haley desires to sell the Property to the City of Virginia Beach (the "City"); WHEREAS, the City's Open Space Subcommittee has identified the Property as a parcel to be considered for acquisition as part of the City's Open Space initiative and has recommended that the Property be acquired for such purposes; WHEREAS, the City Council of the City of Virginia Beach, Virginia is of the opinion that the acquisition of the Property would further the City's Open Space initiative; WHEREAS, funding for this acquisition is available in the Open Space Acquisition CIP account (CIP 4-004). BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF VIRGINIA BEACH, VIRGINIA: 1 . That the City Council authorizes the acquisition of the Property by purchase pursuant to 9 15.2-1800 of the Code of Virginia (1950), as amended, which Property is generally identified as GPIN 1469-52-7336 and shown as Lot 32, Block 2, Map of Lakeside (MB3, PG171), as shown on Exhibit A attached hereto. 2. That the City Manager or his designee is further authorized to execute all documents that may be necessary or appropriate in connection with the purchase of the Property, so long as such documents are in accordance with the Summary of Terms attached hereto, and such other terms, conditions or modifications as may be acceptable to the City Manager and in a form deemed satisfactory by the City Attorney. J1lne Adopted by the Council of the City of Virginia Beach, Virginia, on the 3rd ,2008. day of CA-10568 V:\applications\citylawprod\cycom32\ Wpdocs\D021 IPO03\0005 7598.DOC R-1 May 23, 2008 APPROVED AS TO CONTENT: ~'-~ C\ -R:nn u~ Public Works/Real Estate APPROVED AS TO CONTENT: .1 I APPROVED AS TO SUFFICIEN >f.' City Attorney's Office 'I I EXHIBIT A "tI ;0 0 >< "tI i m .2. ;0 ctl -I n en Gl-<r :; ;0 J:!OO 0 (j) :!1 () Z"o ro- )> ..a.,,)> C/l :; r ~:::tJ~ co f1:1 en)>- ctl ::l -" (OzO "- Q) II lnOZ :s:: Q) -" N_s:: -0 0 C/l q ~(J))> I Q) ~m"tl 10 '< en:l: II " )> -0 ~ r '< m I -< Q) r0- c.... ~ 3 :::tJ x Cl. II ~D r (i)' -0 CD '" (i) CQ "- CD cr ,< I (') ~ II ~ Q) ;::;: c. CD '< m '< "'U ::l '0 "'U .., m 0 .., "C ::l 0 CD 0 "0 .., (j) CD < c: ~ '" '< '" 0 ;:l. (j) ctl ;:: ('i' ctl C/l co c: (i) Q) c: w N w <3 00 II I SUMMARY OF TERMS AN ORDINANCE TO AUTHORIZE THE ACQUISITION OF APPROXIMATELY .057 ACRES / 2,482 SQ. FT. OF REAL PROPERTY KNOWN AS LOT 32, BLOCK 2, LAKESIDE, LOCUST CRESCENT, FOR $13,000 FROM FRANCIS E. HALEY, JR, INC. PROPERTY SIZE AND LOCATION: .057 acres/2,482 sq. ft. of real property known as Lot 23, Block 2, Lakeside, Locust Crescent, GPIN: 1469-52-7336, located in the Bayside District SELLER: Francis E. Haley, Jr., Inc., a Virginia corporation BUYER: City of Virginia Beach ZONING: R-20 AICUZ: <65 SALE PRICE: $13,000 at Settlement by check. SOURCE OF FUNDS: CIP4-004 - Open Space Program Site Acquisition Project SETTLEMENT DATE: On or before thirty (30) days after acquisition is authorized by City Council. SPECIAL TERMS AND CONDITIONS: . Property must be conveyed free and clear of all leases, tenancies and rights of possession of any and all parties other than the City. . Seller shall pay the grantor's tax and its own attorney's fees and costs. . City shall bear all other costs of closing. V:I.pplic.tionslcitylawprodlcycom321 Wpdocs\D021 IP00310005 760 I.DOC II i - 34 - Item V-L3. ORDINANCES ITEM 57692 Upon motion by Councilman Wood, seconded by Councilman Dyer. City Council DEFERRED until the City Council Session of June 10,2008: Ordinance to AUTHORIZE the transfer of $292,790 from Operating to Capital Outlay accounts within the FY2007-08 Operating Budget of Parks and Recreation re purchase capital equipmentfor each recreation center Voting: 9-0 (By Consent) Council Members Voting Aye: William R. "Bill" DeSteph. Harry E. Diezel, Robert M Dyer, Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan, John E. Uhrin, Ron A. Villanueva and James L. Wood Council Members Voting Nay: None Council Members Absent: Mayor Meyera E. Oberndorf and Rosemary Wilson June 3, 2008 II I - 35 - Item V-I.4. ORDINANCES ITEM 57693 ADDED Upon motion by Councilman Wood, seconded by Councilman Dyer, City Council ADOPTED: Resolution in support of the proposal by BON SECOURS HAMPTON ROADS HEALTH SYSTEM to construct an Acute Care Hospital in Virginia Beach as part of the Princess Anne Corridor Plans (DISTRICT 7 - PRINCESS ANNE) Voting: 9-0 (By Consent) Council Members Voting Aye: William R. "Bill" DeSteph, Harry E. Diezel, Robert M Dyer, Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan, John E. Uhrin, Ron A. Villanueva and James L. Wood Council Members Voting Nay: None Council Members Absent: Mayor Meyera E. Oberndorf and Rosemary Wilson June 3, 2008 i I I 1 A RESOLUTION IN SUPPORT OF THE PROPOSAL BY 2 BON SECOURS HAMPTON ROADS HEALTH SYSTEM TO 3 CONSTRUCT AN ACUTE CARE HOSPITAL IN THE CITY 4 OF VIRGINIA BEACH AS PART OF THE PRINCESS ANNE 5 CORRIDOR PLANS 6 7 WHEREAS, the Bon Secours Hampton Roads Health System has made a strong 8 commitment to provide health care services to the citizens of Virginia Beach through 9 construction of the Bon Secours Hospital & Health Center at Virginia Beach; and 10 11 WHEREAS, the Bon Secours Hampton Roads Health System employs hundreds 12 of Virginia Beach residents, and cares for thousands of patients from Virginia Beach 13 every year; and 14 15 WHEREAS, the Bon Secours Hampton Roads Health System has proposed an 16 acute care hospital to be developed adjacent to its current outpatient campus in South- 17 Central Virginia Beach; and 18 19 WHEREAS, the City of Virginia Beach is the largest city in the Commonwealth of 20 Virginia with regard to population, with a projected population of 464,252 by 2011; and 21 22 WHEREAS, much of that growth is now and will be concentrated in southern 23 Virginia Beach, and will include the Town Center of Virginia Beach, a major 24 development, spanning 17 city blocks and accommodating 4.3 million square feet of 25 mixed-use space, which, at full capacity, is designed to have a living and working 26 population of over 24,000; and 27 28 WHEREAS, adequate and accessible medical care is critical to the well-being of 29 current and future Virginia Beach residents; and 30 31 WHEREAS, the Bon Secours proposal will ensure that Virginia Beach residents 32 now and in the future will have access to quality inpatient and outpatient care in the 33 south-central part of the City; and 34 35 WHEREAS, the Bon Secours acute care hospital proposal enVISions an 36 ownership structure which will mean significant new tax revenue and additional jobs for 37 the City; and 38 39 WHEREAS, the Bon Secours acute care hospital will provide a choice of 40 inpatient health care providers in Virginia Beach; and 41 42 WHEREAS, this project will be of great benefit to our community. 43 44 NOW THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF 45 VIRGINIA BEACH, VIRGINIA: 46 47 That the City Council, on behalf of the residents of Virginia Beach, lends is full 48 support to the acute care hospital project proposed by Bon Secours for Princess Anne 49 and the surrounding communities of southern Virginia Beach, and strongly urges the 50 State Health Commissioner's office to grant the Certificates of Public Need requested 51 by Bon Secours. 52 53 BE IT FURTHER RESOLVED BY THE COUNCIL OF THE CITY OF VIRGINIA 54 BEACH, VIRGINIA: 55 56 That the City Clerk is hereby directed to transmit a copy of this resolution to the 57 Virginia Health Commissioner, the Governor, and each member of the City's local 58 Delegation to the General Assembly. 59 60 Adopted by the City Council of the City of Virginia Beach, Virginia, this 3rd 61 day of J1lr:le ' 2008. APPROVED AS TO LEGAL SUFFICIENCY: w~ City Attorney's Office CA10724 R-4 June 3, 2008 'I I - 36 - Item J.1. APPOINTMENTS ITEM #57694 BY CONSENSUS, City Council RESCHEDULED the following APPOINTMENTS: BEACHES AND WATERWAYS COMMISSION BIKEWAYS AND TRAILS ADVISORY COMMITTEE HISTORIC PRESERVATION COMMISSION OPEN SPACE ADVISORY COMMITTEE i I I June 3, 2008 - 37 - Item J.2. APPOINTMENTS ITEM #57695 Upon NOMINATION by Council Lady McClanan, City Council APPOINTED: Jay Vegara Unexpired term to 3/31/2011 ARTS and HUMANITIES COMMISSION Voting: 9-0 Council Members Voting Aye: William R. "Bill" DeSteph, Harry E. Diezel, Robert M Dyer, Barbara M Henley, Vice Mayor Louis R. Jones, Reba S. McClanan, Mayor Meyera E. Oberndorf John E. Uhrin and Ron A. Villanueva Council Members Voting Nay: None Council Members Absent: Rosemary Wilson and James L. Wood ,I i June 3, 2008 - 38 - Item V-M ADJOURNMENT ITEM # 57696 Vice Mayor Louis R. Jones DECLARED the City Council Meeting ADJOURNED at 6:16 P.M. ~___~.o-L~_~ -;~:~;?! Hooks, CMC Chief Deputy City Clerk (?=-:4~ ~ges Fraser, MMC City Clerk t&~;I{t4.L~_ Meyera E. Oberndorf Mayor City of Virginia Beach Virginia The Public Comment re Non Agenda Item adjourned at 6:30 P.M. June 3, 2008 'II - 39 - PUBLIC COMMENT Carolyn Akers, 4132 Country Club Circle, Phone.' 464-4477, spoke re recycling of batteries and distributed information re Household Hazardous Waste Disposal, which will be made a part of the record. The City Council DEFERRED consideration of depositories for used and expired batteries to the City Manager for recommendation. Richard L. Yount, 3407 Norfeld Circle, Phone; 368-0505, President - Atlantic Coast Cab Company, Inc. Mr. Yount requested a rate increase due to the risingfuel prices. Mr. Yount distributed information re the cost of fuel, which is hereby made a part of the record. City Council did not believe an increase in the rates should be considered at this time; however, City Council referred Mr Yount's concern to the City Manager for recommendation. Perhaps, a surcharge could be established to cover the increased cost of fuel. June 3, 2008