Board of Directors

MINUTES BOARD OF DIRECTORS MEETING NOVEMBER 17, 2003, AT 7:00 P.M. The regular meeting of the Board of Directors was held on Monday, November 17, 2003, at 7:00 p.m., Board Chambers, City Hall, with Mayor Mike Bush presiding. The invocation was given by Chaplain Ed Losey, and Pledge of Allegiance to the Flag was led by Mayor Bush. Mayor Bush called the meeting to order at 7:00 p.m. 1. Roll Call Roll call was as follows: Present: Directors Peggy Brunner-Maruthur, Elaine Jones, Burt Newell, Carroll Weatherford, Bill Edwards, Bob Wheeler, and Mike Bush, total 7. 2. Approval of Agenda A motion was made by Director Wheeler, duly seconded by Director Edwards, that the agenda be approved; and upon voice vote, the motion unanimously carried. 3. Approval of Minutes of November 3, 2003 Board Meeting A motion was made by Director Brunner-Maruthur, duly seconded by Director Edwards, that the minutes of the November 3, 2003 Board Meeting be approved; and upon voice vote, the motion unanimously carried. 4. Recognition of Guests No guests were present for recognition. CONSENT AGENDA The Consent Agenda consisted of the following: 5. Public Safety Report (November 5, 2003). 6. Proposed Resolution No. R-03-283 Approving Certain Bid Awards (a) Street, Drainage, and Utility Construction - Public Works and Utilities [annual supply contract awarded to BB&B Construction, Coakley Construction, and S&S Plumbing]; (b) De-watering Container- Utilities [awarded to Flo Trend Systems in the amount of $47,500]; (c) Body Armor - Police [annual supply contract - reject and rebid]; and (d) Refuse Containers - Sanitation [awarded to Ameri- Kan in the amount of $20,050]. 7. Proposed Resolution No. R-03-284 Appropriating Certain Revenue from the Sale of Recyclable Materials (Fleet Service Department). 8. Proposed Resolution No. R-03-285 Authorizing the Filing of a Grant Application with the Federal Transit Administration. 9. Proposed Resolution No. R-03-286 Approving the Extension of Hot Springs Municipal Water Service for Randall Road. 10. Proposed Resolution No. R-03-287 Authorizing the Mayor to Execute Amendment No. 1 to the Contract with NRS Engineering for the Water and Wastewater Master Plan Study. 11. Proposed Resolution No. R-03-288 Authorizing Execution of a Memorandum of Understanding between the City and North Garland County Water District for Certain Meter Reading Services. 12. Proposed Resolution No. R-03-289 Authorizing an Agreement with Jordan, Woosley, Crone and Keaton for Audit  Services for the City. 13. Proposed Resolution No. R-03-290 Authorizing Execution of an Easement between the City and Entergy Arkansas across Certain City-Owned Property (City Services Complex). 14 .Proposed Resolution No. R-03-291 Authorizing the Mayor to Execute Lease Addendum No. 1 with Carco Carriage Corporation, d.b.a. Hertz Rent-A-Car, at the Airport. 15 .Proposed Resolution No. R-03-292 Authorizing the Assignment of a Medical Ambulance Services Franchise to Triad Hospitals, Inc. 16. Proposed Resolution No. R-03-293 Accepting and Appropriating a Donation for 100th Year Aviation Celebration Ceremonies. A motion was made by Director Wheeler, duly seconded by Director Edwards, that the Consent Agenda be approved; and upon roll call, the following voted “aye”: Directors Brunner-Maruthur, Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 7; motion unanimously carried. NEW BUSINESS 17. Proposed Resolution No. R-03-294 A resolution entitled, “A RESOLUTION APPROVING IMPLEMENTATION OF THE CBID 3 TRAFFIC STUDY WITH CERTAIN MODIFICATIONS,” was taken from the agenda and read by title only. A motion was made by Director Jones, duly seconded by Director Edwards, that the resolution be adopted as read Upon discussion, City Manager Kent Myers stated that several months the City received a detailed report on the traf- fic study provided by Ernie Peters and Associates. At that time, the Board indicated its support for the concepts that were identified in the traffic plan; and the City met with the Arkansas State Highway and Transportation Department, as well as holding a public meeting at the Transportation Depot last month. Last week, the CBID No. 3 Board of Commissioners held a public meeting. Director Edwards questioned if the Board is considering installing parking on Central Avenue, and City Manager Kent Myers replied that is one of the recommendations. He added there are four major items the Board is considering as part of this traffic study: (1) construction of raised pedestrian crossing at Central Avenue and Bridge Street; (2) allow the existing traffic signal at Central Avenue and Bridge Street to remain; (3) allow parking on Central Avenue and close two lanes of traffic for at least a six-month trial period; and (4) construction of a new roundabout at Central and Ouachita. He stated if the Board supports these recommendations, then this will be instructing the CBID and their engineer to proceed with the engineering plans for the roundabout. Those engineering plans have to be referred back to the Arkansas State Highway and Transportation Department and then to the City for review and approval. Director Wheeler questioned the time frame and the cost for the roundabout, and City Manager Kent Myers advised that construction would start in August 2004 with completion in September or October. Director Brunner-Maruthur asked for an explanation of the creation of the CBID; and Mr. Ray Owen, Jr., explained that the CBID is created when 67 percent of the value of property in an area signed petitions to create a CBID. In this case, there were 83 percent of the property owners who signed as far as the value is concerned. Once the peti- tion is presented to the Board of Directors and proof is made that more than 67 percent have signed, the Board of Directors has no option other than to create the CBID. At that time, the CBID Commissioners are appointed. The Commissioners for CBID NO. 3 are Davis Tillman, Joe Gargano, Bobby Gartenberg, Ken Wheatley, and Ralph White. The district begins at Prospect Avenue and goes south to Market Street, both on Central and Ouachita. This is a semi- autonomous board, and the Commission makes some of the decisions, while others decisions are made with the concurrence of the City. The purpose for the formation of this district was to enhance and improve the area within the boundaries of the district. The CBID No. 2 was formed and implemented in the 1980s and started at the fountain and went south to Prospect Avenue. He stated that the property owners have agreed to be assessed to make the improvements, and they pay for the cost. He noted that City funds are not involved unless there is some unusual aspect of it. In regard to the resolution, Mr. Owen advised that the business people in the CBID No. 3 would like to install attrac- tive lights and trees along the sidewalk to make it an attractive pedestrian area, which also has many restaurants and entertainment. There are two lanes of traffic going south in front of the World Cargo; and at times, people pull upon the sidewalk to unload. If the lights and trees are located in that area, motorists will not be able to pull upon the side- walk. He noted there is no back access to these businesses; therefore, the idea is to create a loading zone during part of the day. The CBID has voted 5-0 to install parking on Central Avenue between Prospect Avenue and Market Street and on Ouachita Avenue up to Market Street. With regard to the roundabout, there is a problem with having two stop lights on Central Avenue (Ouachita and Market). The CBID believes it would be nice to have a south entrance to the historical part of Hot Springs where that would be a circular area. He stressed this is in concept only that is being presented tonight. There are a number of issues that would have to be considered before a roundabout could be constructed: (1) it would require a design to be prepared by the CBID; (2) the design would have to be sub- mitted and approved by the Arkansas State Highway and Transportation Department; and (3) it would require approval of the City because the design would have to be reviewed by the Police Department, Fire Department, Public Works Department, and then presented back to the Board. If the project is too expensive, then it will not be done. He said that more than likely they are going to do the sidewalks, trees, lights, and parking, assuming the Board approves it, and the elevated pedestrian walkway at Bridge Street. Director Wheeler questioned what will happen to the statue of the Daughters of the Confederacy, and Mr. Owen advised that no plan they have devised involves touching the existing statue at the triangle; the circle would be around that existing facility. He noted that the group was not opposed to the roundabout. Director Brunner-Maruthur asked if there is any group that has been earmarked to fund the roundabout if the design were approved, and Mr. Owen replied that has not been discussed since the cost is unknown at this time. When the cost is known, then they will explore ways to pay for it. City Manager Kent Myers pointed out they are getting ready to spend several thousand dollars on engineering costs for the roundabout; and if there is no interest on behalf of the Board, he would like to hear that tonight before spend- ing funds. Mr. Owen added that the traffic consultant has said that a roundabout is a way to facilitate traffic flow. Director Edwards questioned the closest roundabout to Hot Springs, and Mr. Owen advised there are several in Kansas City. Mr. Mark Fleischner, representing Mr. Tom Daniel, chairman of the Downtown Association, as well as other property owners, said he owns property in the CBID No. 2 and in the proposed CBID No. 3. He said that he is in favor of what was proposed to him when he signed the petition to create CBID No. 3, which was to proceed with what was done in CBID No. 2, including the benches, repair the sidewalk, and work with the utility companies to update the utilities under the sidewalk. He commented that he was not aware the proposed commissioners were going to add additional parking in CBID No. 3 and/or the roundabout. He stated if he had been aware of that, he probably would not have signed the petition. He stressed that he is not in favor of testing the blockage of two lanes of traffic in the downtown area. He said there is a gateway to the Whittington Avenue area, and he would like to see it moved back farther toward Hot Springs Village and have that area developed as well. He pointed out that a gateway is an entrance into a downtown area and is not an area that creates confusion. He said if they could work within the confines of the stat- ue and possibly add something to the other side of the street and create an entrance to the downtown area, he could support that. In regard to the rear entrance to the buildings that were purchased with the understanding they did not have parking on Central Avenue, he noted there is a rear entrance to those buildings, which is an alleyway and has been used for years to gain entry into those buildings. He urged the Board not to block Central Avenue or eliminate any lanes in the downtown area. He stressed that he is in favor of CBID No. 3; and in the original concept explained to him, it was going to be a continuation of CBID No. 2, with lighting, landscape, park benches, trash receptacles, and improvements in the concrete. He requested that the Board delay any action until it is determined what impact the Civic Center will have on the downtown area. Mr. Ken Wheatley stated when he signed the petition, he thought it would be an extension of CBID No. 2; but then the concept arose regarding the parking and roundabout. He stated there are towns that have one lane streets in the middle of town with parking on both sides; and people visit those towns on purpose, which is to shop and visit. He said that he believes the Civic Center will increase pedestrian traffic; and regarding the roundabout, he stated it is moving the existing traffic structure down two blocks, which will also enhance public safety. He mentioned that the concept of the roundabout will keep traffic flowing better than it is now. Mr. Wayne Roberts said that he supported all of the items except the roundabout. He stated that he lived in the Chicago where there was only one roundabout, and hundreds of people would not travel in that area because of the problems created by the roundabout. He urged the Board to study this in-depth because it does create problems. Director Brunner-Maruthur questioned the location, and Mr. Roberts advised that it is in DesPlains, which is a met- ropolitan area. He said that he could find out the exact location and let her know. Mr. David French, architect, said he also owns two buildings in that district and has a business and store in the area. When looking at CBID No. 3 and proposed return of parking on the street where it was originally, it was to create an atmosphere that was friendly to pedestrians. He stated there are some areas, such as Gallery Central, where the radius for the trucks is not large enough and has to make it larger so the trucks will not get on the sidewalks. What they are trying to create is a sense of place where pedestrians will feel comfortable walking, and a traffic study was done showing with and without the parking; and it does not affect it. He stated that the issue of pulling up in front of a building and being able to load and unload is critical. He said they are asking the Board to re-create this area to a vital place for pedestrians. Mr. Rico Harris, with French Harris Architects, stated they are shifting the transition points in adding the parallel park- ing in this segment of Central Avenue. If motorists are northbound on Central, it is one-lane driving with parking on the street all the way from Grand French Halace fd proporal, motorists would(coftisue ane-lane of traffic with parkinf) Tj 0 -12.75 at - ot get to th fd probery. Mr. Davs Twilmaon, a mmobet of CBID No. ,e stated that he hassevetral businesesl in that area and blieveis aravisen -  Avenue would be removed. However, the CBID No. 3 has recommended that the signal stay at Bridge Street, which will remain. Director Weatherford pointed out that in the letter from the Arkansas State Highway and Transportation Department, they indicated general support for roundabouts. However, they feel this proposed location pushes the upper limits for roundabouts due to traffic volumes in the area. Mr. Simmons replied that he has analyzed this and believes it is okay. Director Weatherford pointed out that the Arkansas State Highway and Transportation Department also has concerns about it creating traffic flow. Mr. Simmons commented that whatever design is produced for this roundabout, the Arkansas State Highway and Transportation Department will have to review it and approve it before it can be con - structed. Director Weatherford said he has no problem with parking on Central Avenue, but he does not believe the roundabout will work. City Manager Kent Myers advised that one of the comments made at the public meeting was how this might impact the Fire Department. He stated that Fire Chief Arval Sanders and his staff indicated there were some concerns on behalf of the Fire Department. As Ray Owen indicated, the Fire Department would have to be involved in the final design plans. Fire Chief Arval Sanders commented that when a fire truck responds, they are not just responding to that particular area but may be responding through that area. He stated at the present time, directly from Market Street, they can hit Quapaw Avenue or Prospect Avenue or turn on Central Avenue south. In the roundabout, they will have make the roundabout to respond in that area. Another concern is the turning radiuses narrowly fit through the concept on the drawings. The other part is that street is only 20 feet wide. This is reducing all of the traffic both ways to a 20-foot wide stretch around the roundabout. The codes call for access to private property to be 20 feet wide. Also, any turns shall be taken into consideration for enlarging that width for turning radiuses. He said this is reducing this particular turn lower and less than what is required for access to private property. He mentioned that he has been exposed to roundabouts, and most of them are two lanes of traffic, not one. In this situation, there is only a 20-foot one lane traf- fic around the statue. He stated that the concept works if there is the space. Director Newell suggested that they go up Orange Street, and Chief Sanders replied that they could go through Orange Street if they can get across Central and Ouachita and get up to Quapaw and Prospect. However, the other way is shorter to go Market. Director Brunner-Maruthur said there are CBID Commissioners recommending these four items, and they are going to pay an expert to submit the conceptual design to see if it meets the requirements for the Arkansas State Highway and Transportation Department and the Fire Department. Then they have to find a source of funding. She pointed out that the Board will either be approving or denying their ability to pay an expert to come up with a design that may be an improvement for the City. She said that she would not approve something that is not safe and that the Arkansas State Highway and Transportation Department does not accept. Therefore, the City is not placing anyone or anything at risk except for their money. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Brunner-Maruthur, Newell, Wheeler, and Bush, total 4. Voting “no”: Directors Jones, Weatherford, and Edwards, total 3; motion carried. Whereupon the resolution was declared adopted. 18. Proposed Resolution No. R-03-295 A resolution entitled, “A RESOLUTION EXTENDING THE MAXIMUM TIME ALLOWED FOR COST RECOVERY AGREEMENTS FOR THE BRATTON DRIVE WATER EXTENSION PROJECT,” was taken from the agenda and read by title only. A motion was made by Director Jones, duly seconded by Director Brunner-Maruthur, that the resolution be adopted as read. Upon discussion, Mr. Don Cochran, Utilities Director, advised that a request has been received from Mr. Gerald Wheeler to waive the City’s existing rebate policy on water and sewer line extensions and extending the time frame from a five-year payback period to a ten-year payback period. He stated that staff’s recommendation is to deny Mr. Wheeler’s request. He explained that staff’s concerns are that extending the rebate time period would be of no ben- efit to the City; and it may result in additional staff time related to maintaining the records and collecting rebate charges for the residents who live outside the City limits. In addition, the Board recently approved a separate rebate agreement for Fountain Lake School District for a force main that provided some benefit to the City since the City has ownership in that utility line by upsizing the pipe for future growth. In that case, the Board allowed the five-year rebate to stand with the option that they could return after that five-year period and request an extension, which would require Board approval. Director Edwards pointed out that according to Finance Director Linda Baker, it would create a problem in book - keeping to keep up with a ten-year agreement. Mr. Gerald Wheeler stated they are in the County and pay 150 percent of what the rate is in Hot Springs. He said they are a slow, developing community; but they could recoup. He stated they have paid a high price by bringing water into people who have not paid anything. He asked to have a two-hour discussion with Mr. Cochran where they could work out an arrangement that would be minimal expense and help them to recoup a disproportionate amount they have paid on this. He said that the end result would be a win-win for all. Director Edwards said he pays extra for out in the county and paid for the line completely. He said with any other issues he has experienced, there has been a bond issue; but it is different from what he is doing. Mr. Wheeler said they are not a mandated district and took it upon themselves and paid 100 percent for it. Director Brunner-Maruthur asked how many people were interested when they began, and Mr. Wheeler replied that it was approximately 24. He added they did get 17, but that was after he approached everyone to try to come togeth- er. He said in seven days, they had in-hand $85,000; and they have built it; and the water was running today. By the end of the week, they should be cleared to start hooking on. City Manager Kent Myers questioned the total cost was for the construction of the water line; and Mr. Wheeler said that it is going to be approximately $110,000. Director Wheeler mentioned that for the record, he and Mr. Gerald Wheeler are not related but pointed out that the project with the water company is to get as many customers as possible, which Mr. Wheeler is doing. Therefore, he supports this project 100 percent. Director Jones questioned how many more can hook onto the line, and Mr. Wheeler replied that there are 17 addi- tional homes that are there; ten of them are within the immediate requirements as far as fire protection is concerned. Director Jones asked if there were any people against it, and Mr. Wheeler stated that in the past, there has been opposition; but they have been able to bring this in with no opposition. Director Edwards said he was under the impression there was one person north of Mr. Wheeler’s shop who had bad water near the end where the water line is going to be extended. Mr. Wheeler replied there is a large amount of bad water up in Bratton Drive, even though there is McClendon springs, which is one extreme to the other as far as the quality of water. Director Weatherford asked how many more people can hook onto this line, and Mr. Wheeler said there could be an excess of 100 houses (six-inch line). He added that Mr. Doug Rogers has 300+ acres and is capable of further devel- opment. Director Weatherford asked if he was directly in line with this water line or would he have to add more to the six-inch line. Mr. Wheeler advised that he would have to extend the six-inch line. Director Weatherford questioned why he wanted the extension to ten years, and Mr. Wheeler advised they have been slow developing. Director Weatherford asked what he is charging each person coming onto the system who did not connect on the first round and from this date forward, and Mr. Cochran explained that all they would be able to collect is the front footage fee, which is City policy. Director Weatherford questioned what Mr. Wheeler would be able to charge if it passed a lot where someone did not connect on the first go around and is a 100-foot lot, Mr. Cochran advised that it would be the cost of the pipe per foot. Director Weatherford asked if the six-inch line is the City’s after the five years, and Mr. Cochran advised that the line is the City’s at the present time. He added after the first year, the warranty period runs out; and the City is responsi- ble for any maintenance or any problem that occurs to that line.  Director Weatherford asked how far he runs with the six-inch line, and Mr. Wheeler advised that it was 5,500 to 6,000 feet. Director Weatherford asked if someone could add onto that line at the present time, and Mr. Cochran advised that it would cost them basically about $2,000. Director Weatherford asked if someone would pay $2,000 if they immediately wanted to connect onto end of that 6,000 foot line that was there and go another 6,000; and Mr. Cochran replied they would pay $2,000; but City would collect the $2,000 on behalf of Mr. Wheeler and his group. Director Weatherford commented that in 20 years, he is not going to get his money back because there are only 21 more people who are going to connect onto his line. Director Edwards questioned Mr. Cochran’s opinion regarding working out a plan, and Mr. Cochran advised that he, Utilities Engineer Steve Mallet, Deputy City Manager Lance Hudnell, and engineer Bill Malone met with Mr. Wheeler in June. The suggestion at that time was that they form a water improvement district or a property owners’ associa- tion and return to the City with a separate plan other than what is in the City policy. However, that did not happen. Mr. Cochran stated if the City is going to take any action other than what is in the City policy, he did not have a plan to present to the Board tonight. Director Newell asked if the City has waived this policy, and City Manager Kent Myers advised that the only time it is waived is when the City has a financial interest in the line through oversizing of the line. When the City oversizes, then the City is a direct financial participant; and the City receives a percentage of that rebate. In this case, the City did not oversize the line. Therefore, there is no financial interest the City has in any rebate program. Director Newell asked if the City has waived the five-year policy; and Mr. Don Cochran stated that the Board approved the request from Fountain Lake School District that at the end of the five-year period, the school district has the opportunity to return to the Board and ask for an extension. The five-year period still stands in that contract; but at the end of that five-year period if both parties agree, then it could be extended. However, they will have to come back to the Board. City Manager Kent Myers stated that it might be better to have that same language in this situation because he believes that within the next five years, they are going to collect everything they have in the line. Director Brunner-Maruthur pointed out that this group has been to the Board for water extension, which was approved. She commented they have taken it upon themselves to pay for this 100 percent, and they are only request- ing for the terms to be extended from five to ten years. Mayor Bush then called for a vote on the motion to adopt the resolution; and upon roll call, the following voted “aye”: Directors Brunner-Maruthur, Jones, Newell, Weatherford, Wheeler, total 5. Voting “no”: Directors Edwards and Mayor Bush, total 2; motion carried. Whereupon the resolution was declared adopted. 19. Proposed Ordinance No. O-03-96 An ordinance entitled, “AN ORDINANCE WAIVING THE REQUIREMENTS OF COMPETITIVE BIDDING FOR THE PURCHASE OF CERTAIN REAL PROPERTY (KEITH SMITH PROPERTY, INC.)” was taken from the agenda for consideration. A motion was made by Director Edwards, duly seconded by Director Brunner-Maruthur, that the rules be suspended and the ordinance be read for the first time by title only; and upon voice vote, the motion unanimously carried. The ordinance was then read for the first time by title only; and upon the question “Shall the ordinance be passed as read?” and upon motion of Director Wheeler, duly seconded by Director Edwards, that the ordinance be passed as read. Upon discussion, Mr. Don Cochran, Utilities Director, explained that staff recommends approval of purchasing approximately 22 acres of real estate property from Keith Smith, Inc. The property will be used for the new southwest wastewater treatment plant. On December 2, 2002, the City and Keith Smith entered into an agreement related to an Option to Purchase approximately 22 acres of real estate property for the new treatment facility. The property is located on Winkler Road approximately one mile west of the intersection of South Moore Road and Winkler Road. The City has agreed to pay $4,500 per acre for the 22 acres, which totals $99,000. With the Option to Purchase Agreement, it included a $5,000 payment, which will be applied to the purchase price at closing, leaving a balance  of $94,000. Currently, the Arkansas Department of Environmental Quality is reviewing the construction plans and the permit process. Plans are to bid this project in early 2004 with completion in 2005. He advised that this project has not been funded, and consideration is being given to a state revolving loan program or bond. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Brunner-Maruthur, Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 20. Proposed Ordinance No. O-03-97 An ordinance entitled, “AN ORDINANCE WAIVING THE REQUIREMENTS OF COMPETITIVE BIDDING FOR THE PROCUREMENT OF A STANDARD SOFTWARE MAINTENANCE AGREEMENT FROM NEW WORLD SYSTEMS; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Wheeler , duly seconded by Director Jones, that the rules be suspended and the ordinance be read for the first time by title only; and upon voice vote, the motion unanimously carried. The ordinance was then read for the first time by title only; and upon the question “Shall the ordinance be passed as read?” and upon motion of Director Jones , duly seconded by Director Wheeler, that the ordinance be passed as read; and upon roll call, the following voted “aye”: Directors Brunner-Maruthur, Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 21. Presentation of the 2004 Budget City Manager Kent Myers presented the 2004 Budget and reviewed the budget summary report. He discussed three major areas: (1) information on financial funds and how they relate to each other; (2) information on personnel and capital expenses; and (3) information on the current financial conditions. He stated that there are 14 different City funds, which have been grouped into four primary areas: (1) General Fund; (2) City funds that receive annual finan- cial support from the General Fund [Intracity Transit, Street, District Court, Police, and Fire]; (3) Enterprise Funds [Water, Sewer, Sanitation, Airport, and Parks]; and (4) funds that provide internal support to other City services [Fleet Service and Utility Service]. He pointed out that all of the funds interrelate to each other to a certain degree; and if expenses are increased in one fund, it could have an effect on another City fund, particularly the General Fund. There are certain overhead services that are allocated to all City funds according to a cost allocation plan approved by the Board; and these services include Information Systems, Human Resources, and Finance. Certain other administra- tive services provided by the City, for example the City Manager’s Office, the City Clerk’s Office, City Attorney, and Public Information, are not allocated to the different departments although they could be allocated according to a for- mula established by the Board of Directors. The budgets for these administrative costs that are allocated impact the budgets of all funds. He stated that personnel costs include salaries, health insurance, retirement, uniform allowance, and other person- nel expenses. Over the past several years, these costs have increased significantly as the City has added person- nel in a number of areas, which include Intracity Transit, Police, Utilities, Code Enforcement, Parks and Recreation and several other departments. Also, in the last five years, salaries have been upgraded and now are generally com- petitive with the private sector in other cities. The capital expenses have also increased as there has been a con - certed effort to upgrade the vehicles and equipment and improve the aging infrastructure. It is important to continue the capital investment, as well as efforts to maintain the new capital equipment and new facilities that have been added to better serve the citizens. With personnel and capital costs representing such a large part of the budget, it is impossible to significantly impact overall costs without making reductions in these two areas. In the past several weeks, staff has reviewed and reduced the ongoing expenses in the proposed budget, including such expenses as travel, office supplies, dues and subscriptions. However, these reductions do not have a major impact on the overall budget. In order to balance the budget during times of flat or reduced revenues, personnel and capital costs have to be cut. There are a number of cuts in these areas in the proposed budget. In regard to 2003, two of the major rev - enue sources (sales tax and district court fines) would likely not meet the City’s projections. Since sales tax revenues fund over 55 percent of the General Fund costs, any fluctuations in this revenue have a significant financial impact. This past year, the sales tax has been flat with less than a one percent increase. The City has initiated hiring freezes and reduced cost over the past ten months; but the City is still experiencing challenges in balancing the 2004 budg- et, particularly in the General Fund, Sewer Fund, and Sanitation Fund. While it appears that the financial condition will improve in the next 12 months, staff has taken a conservative approach in forecasting next year’s revenues. At mid-year, the City may experience increased revenues and be able to restore some of the cuts in the 2004 budget. All City funds have positive fund balances. The City is not in any type of financial crisis; but as City Manager, his job is to ensure that necessary financial management steps are taken to avoid major financial problems. The Board has previously set a policy that the City maintain at least a two-month surplus in the General Fund for purposes of cash flow and to cover any major emergency expenses. The City meets this policy in the proposed budget. This year, each department head was instructed to prepare a budget with at least a three to five percent decrease in supplies and services. Each department was informed that the City would not be able to increase staffing in 2004. Also, each department was asked to review user fees to ensure that these fees were covering the actual costs for providing serv- ices. These and other actions are necessary in order to balance the budget without any employee layoffs. Once the proposed budgets were submitted and reviewed, budget meetings were held with each department head. In the case of several departments, major cuts were made at these meetings in order to balance the budget. A second round of budget meetings was held last week with several departments heads in order to make additional cuts in the General Fund and Sewer Fund. He said that staff has attempted to follow the general guidance the Board provided last month, for example not to impose a property tax proposed in the budget and to try to avoid employee layoffs. He advised that the total proposed 2004 budget is $76,440,000; which is for all 14 City funds. This is 2.27 percent less than the current year’s amended budget. Most City funds are recommended for a decrease in expenses next year; and in certain cases, major decreases are proposed. The General Fund budget proposed for 2004 is approxi- mately $17.2 million, which represents a 3.42 percent reduction. The department requests had to be reduced $1.3 million in order to balance the General Fund budget. Four positions funded by the General Fund have been eliminated; and although these positions are vacant, it will impact the level of services provided in such areas as Recreation, Animal Control, Engineering, and Property Maintenance. Capital expenses in the General Fund were also reduced. Only $371,000 was proposed for General Fund capital in 2004. Only one new vehicle is proposed next year for all General Fund departments. In terms of rev- enue, staff is projecting only a two percent increase in sales tax revenues next year. This may be conservative pro- jection due to the economic development activities (new attraction at Magic Springs and new arena), also anticipat- ing that most other General Fund revenues are not going to increase significantly in 2004. There is a proposed reduc- tion in remodeling costs for the Board Chambers. There was over $100,000 originally budgeted; but in the proposed budget, he is requesting $43,000; (2) there is proposed funding for the next phase of Entergy Park; and $50,000 is included for the next phase of Entergy Park. These costs may be offset through a State grant and federal funding; (3) increase in Animal Control service costs to Garland County. Those fees have not increased since Animal Control started four years ago and proposing an increase in Animal Control euthanasia fees and cremation fees; (4) currently the outside organizations are in the budget at their current levels; (5) no City funding is included for new projects, including new traffic signals, CBID No. 3, no additional parking lots at the Hot Springs Civic and Convention Center, or any sidewalk improvement program; (6) the budget does not include the 2004 projects that might be funded by the new community development block grant program. Regarding the District Court Operating Fund, the total proposed budget for this fund is $677,000, which is approxi- mately a four percent increase from their current budget. There are no position changes recommended, and only sev- eral minor capital items are proposed. The primary reason for the four percent increase is due to the increased debt service for the new building and the operating costs for the new building. The Police Fund is in good financial shape; and total expenses proposed for 2004 are approximately $9.5 million, which represents a slight increase of 2.77 percent. It is proposed that 2 of the Deputy City Attorney’s salary be added to this fund and that this position be a full-time position in 2004 at a salary of $54,000, plus fringe benefits. The cost of the salary and benefits would be shared with 2 paid by the General Fund and 2 paid by the Police Fund. No other staffing changes are proposed in the Police Fund budget. Capital costs proposed in the Police Fund include $125,000 for vehicle replacements and $165,000 for radio replacements, $30,000 for portable defibrillators, which would be installed at the Police Department and also in supervisor police vehicles, $650,000 for purchase of the mobile data terminals (five-year lease purchase). Staff will continue to apply for grants for the terminals; however, if the City is not successful by the middle of the year, staff recommends proceeding with the purchase of these units. The Fire Fund has a limited fund balance due to major capital acquisitions and salary increases that have been approved over the last several years. The total Fire Fund expenses for 2004 are proposed at $6,193,000, which rep- resents a decrease of 5.69 percent. No staffing changes are proposed in the Fire Fund, and their capital budget is recommended at $125,000. The Street Fund includes numerous changes in an effort to reduce the subsidy from the General Fund. The total pro- posed Street Fund budget for 2004 is $2,879,000, which is a decrease of 9.13 percent. One of the most significant proposed changes in the fund is the reduction of the street paving program to $390,000 for 2004. This funding will allow the City to complete the street plan for 2003, which has not been done due to delay with utility relocations. He met with the utility companies and has been assured that all of those could be done in time to finish the paving pro- gram for next year. No additional streets would be added to the paving program. If the Board wants additional streets paved in 2004, reductions will be necessary in some of the other areas. The Street Fund includes only three addi - tional capital items. He is proposing a decrease in staffing from 35 to 33 positions. Both of those positions are cur- rently vacant. In regard to the Intracity Transit Fund, the City has taken over the employees and increased the cost over the last several years for public transit and 2004. The City will convert to a rural transit system classification to an urban sys- tem. There are five different options for transit service levels in 2004. Following the review of the options, he has included Option B in the proposed budget, which is also the option that the Transportation Advisory Committee sup- ports. This will eliminate Saturday night service and will also reduce trolley services. If this option is approved, it will decrease the IT budget $85,000 with a reduction in General Fund support of $41,850. There is also a proposal for a fare increase from $1.00 to $1.25 for fixed route, with the elderly disabled rate at $.50 per ride. Also, staff is recom- mending that the trolley remain as a free service. With these changes, the total IT Fund is proposed at $1,167,000, expenses. With the water rate increase approved by the Board about two years ago, the Water Fund is in good shape; and in 2004, the City is planning on proceeding with the capital improvements that the Board approved funded by revenues from this rate increase. This results in a proposed budget for the Water Fund increasing17 percent to approximately $13.3 million. Water Fund staffing is proposed to remain at 31 positions; and total capital funding, including the Water Bond projects, is approximately $4.6 million. They include upgrades to both water plants, Central Avenue Phase 3 water improvements, the Belvedere water improvements, and new water mains on MLK Expressway and Treasure Isle Road. An 18.59 percent decrease in the Sewer Fund is proposed with a total budget of about $11.1 million. Current staffing in the Sewer Fund is proposed to remain at 462 positions; and $1,258,000 in capital expenses are proposed in the budget. About 2 of the capital expense is devoted to the inflow-infiltration program, which EPA requires the City to fund on an annual basis. The Sewer Fund does not include revenues or expenses for the new wastewater plant near Lake Hamilton School, and the City is currently planning a rate study to determine how new rates can be established within the service area of this plant that would finance the plant construction. In 90 days, it is expected to have a financing proposal for this new wastewater plant to present to the Board. The Fleet Fund and Utility Administration Fund are internal support departments. Fleet Service provides a central - ized vehicle repair service and proposing a budget of $804,000, which is a 7.37 percent decrease. The staffing in Fleet Service is proposed to be decreased from 15 to 14 positions, with the elimination of a current vacant position. Total capital costs in the Fleet Service Fund are budgeted at $20,235. The Utility Administration Fund provides admin- istrative support services for both water and sewer operations, and the charges for these support services are based upon the total number of customers served by each utility. Currently, there are more water customers; therefore, 56 percent is charged to water and 44 percent to the sewer. The total Utility Administration Fund budget for 2004 is $3.2 million, which is a .25 percent decrease from the current year. This includes continued funding for 33 positions and also $217,000 in capital costs. The total proposed staffing in 2004 is 564 positions, which represents a reduction of 132 positions from the 2003 amended budget. It is believed that all of these positions can be eliminated without any employee layoffs. The budg- et does not include any salary increases for nonuniformed personnel, and only the step increases for Police and Fire uniform personnel are included with no cost-of-living increases. Some of the Police and Fire employees have dis- cussed several new salary increase proposals and will likely be discussing these proposals with the Directors. However, it is recommended that these proposals, along with all other salary increases, not be included in the budg- et at this time. At mid-year, the Board can consider these pay proposals. Funding is also budgeted for other fringe benefit programs provided to City employees, including enhanced health insurance coverages with no increase in insurance costs. There have been increases in retirement costs and dental insurance, and these are included in the budget. No funding is included for continuation of the sick leave incentive program. However, it is recommended that this program be continued for at least one additional year with additional vacation days provided instead of the cash incentive. He urged the Board to contact him or Finance Director Linda Baker as they review the budget. He suggested that a budget work session be scheduled to discuss this budget. It was the consensus of the Board to meet on Tuesday, November 25, at 7:00 p.m., Civic and Convention Center (Wheeler Room). The Christmas lighting will be held at 6:15 p.m., and the agenda meeting held at 6:30 p.m. on November 25.  OTHER BUSINESS 22. Board of Directors Items Director Jones expressed appreciation to the City staff for attending the Pleasant Street Civic Center Neighborhood Meeting. Tomorrow night, there will be a neighborhood Summit Meeting, 5:00 p.m., at the Civic Center. 23. City Manager’s Report City Manager Kent Myers gave the following report: 1. Due to repairs in the Board Chambers, the Board Meetings will be held for the next several months at the Hot Springs Civic and Convention Center in the Wheeler Room. 2. On Tuesday, November 25, the Downtown Merchants will be having a chili cook-off at the Parking Plaza at 5:00 p.m.; and then the Christmas lighting display will be held prior to the agenda meeting and budget meeting. The Jaycees Christmas Parade will be held on Thursday, December 4, at 7:00 p.m. 24. EXECUTIVE SESSION The Board adjourned into executive session at 9:25 p.m. to discussion the annual evaluation of City Prosecutor Brian Albright 25. RECONVENE TO OPEN SESSION The Board reconvened into open session, and the Board asked him to provide a job description and what he plans to do in the future. 26. ADJOURNMENT There being no further business to come before the Board, the meeting adjourned to meet again on Monday, December 1, 2003, at 7:00 p.m.