Board of Directors

MINUTES BOARD OF DIRECTORS MEETING FEBRUARY 16, 2004, AT 7:00 P.M. The regular meeting of the Board of Directors was held on Monday, February 16, 2004, at 7:00 p.m., Hot Springs Civic and Convention Center, Wheeler Room, with Mayor Mike Bush presiding. The invocation was given by Ms. Audrey Ann Atherton, 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 Edwards, duly seconded by Director Wheeler, that the agenda be approved. Upon discussion, City Manager Kent Myers advised that on Friday, a request was distributed in the Board packets for a water line extension on Mote Street from Mr. and Mrs. Quast and asked that this item be added to the agenda (Proposed Resolution No. R-04-43 [Approving the Extension of Hot Springs Municipal Water Service on Mote Street to 246 Mote]). A motion was made by Director Wheeler, duly seconded by Director Brunner-Maruthur, that the item be added to the agenda; and upon voice vote, the motion unanimously carried. Mayor Bush then called for a vote on the motion to approve the agenda, as amended; and upon voice vote, the motion unanimously carried. 3. Approval of Minutes of February 2, 2004 Board Meeting A motion was made by Director Jones, duly seconded by Director Brunner-Maruthur, that the minutes of the February 2, 2004 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 (February 4, 2004). 6. Proposed Resolution No. R-04-33 Approving Certain Bid Awards (a) Concrete Pipe - Public Works [annual supply contract awarded to Vickers]; (b) Asphalt Liquid - Public Works [annual supply contract awarded to Koch as primary and Coastal Energy as alternate]; (c) Cement/Concrete - Public Works/Utilities [annual supply contract awarded to Smith=s Ready Mix, Inc. and C. J. Horner Company, Inc.]; (d) Aggregates - Public Works/Utilities [annual supply con- tract awarded to Spa City Gravel, Melton Excavating, and John Jenkins & Company]; (e) Vehicle (mid-size sedan) - Sanitation [awarded to Little Rock Dodge in the amount of $11,310]; and (f) Vehicle (pickup) - Fleet Service [award- ed to Bale Chevrolet in the amount of $12,735]. 7. Budget Transfer - Replacement of a Light at the Transportation Plaza ($1,600). 8. Proposed Resolution No. R-04-34 Authorizing the Filing of a Grant Application with the Department of Justice Pursuant to the Bureau of Justice Assistance, Bulletproof Vest Partnership Program. 9. Proposed Resolution No. R-04-35 Appointing Dr. Nathaniel “Nate” Newman to the Civil Service Commission. 10. Proposed Resolution No. R-04-36 Appointing Sam Hocutt and Bob Hanson to the Planning Commission. 11. Proposed Resolution No. R-04-37 Appointing Byron Cole Rhodes to the Occupation Tax Board of Review. 12. Proposed Resolution No. R-04-38 Appointing Jay (Willard S.) Campbell to the Board of Zoning Adjustment. 13. Proposed Resolution No. R-04-39 Accepting Maintenance Responsibility for a New Access Road to be Constructed by the Arkansas State Highway and Transportation Department as Part of the Higdon Ferry Road and East/West Arterial (Dr. Martin Luther King, Jr. Expressway) Interchange Project. 14. Proposed Resolution No. R-04-40 Accepting a Grant from the Arkansas Department of Parks and Tourism Outdoor Recreation Grant Program for Entergy Park, Phase 2. 15. Proposed Resolution No. R-04-41 Revising the 2004 Budget by Appropriating Funds for the Sister City Program. A motion was made by Director Wheeler, duly seconded by Director Jones, 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 16. Employee Health Self-Insurance Annual Report City Manager Kent Myers reported that over a year ago, the City started its self-insurance program and is in the sec- ond year of the program with no premium increase. He introduced Ms. Kathy Otwell, insurance agent; and Mr. John Sigman, third-party administrator, representing Spectrum-BAS. Ms. Kathy Otwell distributed and reviewed a report noting that nationally, health care costs are rising. She com- mented that technology is advancing and is not reducing but increasing costs. Mr. Sigman said that one of the ways to be effective in controlling health care costs is managing the information received from Spectrum through their reports. He advised that Spectrum works on a three-prong approach: (1) pro- vide intense medical outreach programs; (2) help the City fine tune health plan designs; and (3) support tools. With all of the reports which are provided on monthly and quarterly basis, this will help the City move forward in control- ling the health care costs. He pointed out that the national average per employee is $6.3 thousand for 2003, and Hot Springs had an annual average cost of $3.5 thousand. Mayor Bush asked if the rates will increase or decrease next year, and Ms. Otwell advised that the rates have main- tained where they were; but they increased the contract to cover the City for any run-out claims. They also decreased the deductible to employees and increased the co-insurance amount the City was paying. She said that last year the goal was to keep the plan design; however, they added one additional benefit, which allowed employees to go out- of-network. This year, they reduced the deductible and added additional co-insurance. Director Edwards asked if they visit the health care facilities and work out a lower cost for the employees, such as those who have an MRI; and Ms. Otwell replied that is what takes place in the coalition, working with the providers in negotiating rates for the services. She explained that 70 percent of the money went to medical claims, 7 percent went to the premiums, 18 percent to the pharmacy claims, and 5 percent to the administrative charges. She added that the renewal proposal with the previous carrier (UHC) was $2,759,872 for last year. Spectrum had a proposed expected amount of $2,555,615. They had a proposed maximum of $3,109,206; but the actual plan cost came in at $2,097,598, which is a plan savings from what the offer was from the previous company ($662,274). She stated that the plan cost was $2,097,598 for the first 12 months; the cost per employee ($569) is $3,590 that the City pays on their behalf; the monthly cost per employee is $299 and annualized cost per employee $3,590. She stated that the national average is 12-14 claims per employee per year, and the City employees are averaging 9.83, which means they are not over-utilizing this program. Based on in-network utilization by plan members and negotiated discounts, corresponding plan charges of $2,882,510 have been discounted to $1,100,744 through the GMCO con- tract, which is a plan savings of $1,781,765. Utilization review for the City has seen a savings of over $200,000 due to management of inpatient stays for the first year of the plan; and a total of 72 pre-certifications were managed. Mr. Sigman pointed out that a $75,000 deductible was set per employee and did have a couple of claims. Therefore, the City received back $27,000 last year in claim dollars. City Manager Kent Myers clarified that in regard to the $75,000 deductible, Mr. Sigman is referring to the reinsurance level, not the employee deductible. Mr. Sigman noted that in regard to the expenditure of major diagnosis, diseases of the circulatory system was the highest (29 percent). He stated that National Park Hospital is the in-network hospital, where over $700,000 went as the provider. He pointed out that the Mayo Clinic is an out-of-network, and these are benefits which would not have been covered last year. He then reviewed the benefit cost breakdown (inpatient hospital $470,000, which is the high- est number) and is broken down to other areas with case management being the lowest in the amount of $15,000. The INTEQ is the pharmacy benefit manager (PBM) and is where the employees receive prescription drugs. The uti- lization of generic drugs was 53 percent where the national average is 40 to 45 percent. The average cost is $40.10, which is comparable to the national average of $38 to $40. He stated that the average cost of a single-source pre- scription, which is brand name, is almost $90. The current drug program is $7 for generic; preferred brand is $25; and nonpreferred brand is $50. There is also a mail-order program that was effective July 1, 2003, and received addi- tional discounts. Ms. Otwell pointed out that last year, City Manager Kent Myers had made the statement that the City could not get reports from the previous insurance provider; and this time, the people who are in charge of this for the City know what is going on in the plan and receive the reports they request. Director Edwards said that he has received information on the Canadian drugs if she would be interested in review- ing that information. Ms. Otwell stated that it has been discussed, and they are working very closely with the legis- lators and are active in that issue. Director Wheeler commented it is more profitable for the City to use local people rather than going to Canada. Ms. Otwell stated that has been one of the concerns that they want the pharmacies to sell the drugs at the same price as Canada does. Director Brunner-Maruthur asked for the telephone number of Mr. Sigman and Ms. Otwell. Mr. Sigman’s numbers are as follows: 1-800-737-0878, extension 140; cell phone 314-351-3126; local number (501) 520-4584. Ms. Otwell’s nos. are as follows: 1-800-567-2649; cell phone 479-650-7878; and home no. 479-649-0276.  City Manager Kent Myers advised there is more information going out to the employees on actions they can take to improve their health, and Ms. Otwell writes a regular article for the employee newsletter. Also, they try to have regu- lar meetings with the employees to educate them on improving their general condition. 17. Proposed Resolution No. R-04-42 A resolution entitled, “A RESOLUTION ESTABLISHING AN EXCHANGE STREET ENTERTAINMENT DISTRICT,” was taken from the agenda and read by title only. A motion was made by Director Wheeler, duly seconded by Director Brunner-Maruthur, that the resolution be adopt- ed as read. Upon discussion, City Manager Kent Myers explained that this originated from Mr. Tom Daniel and the members of the Downtown Hot Springs Association. The idea is that if the City can control the street and the entire area for these type of events, it would help create better crowd control and handling of food and beverages. Mr. Mark Fleischner stated this is a very progressive move and is not aware of anyone who opposes it. 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 resolution was declared adopted. 18. Proposed Ordinance No. O-04-9 An ordinance entitled, “AN ORDINANCE WAIVING THE REQUIREMENTS OF COMPETITIVE BIDDING FOR THE PURCHASE OF TWO, DUAL-PURPOSE MALINOIS POLICE CANINES; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Wheeler, 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 Jones, duly seconded by Director Edwards, 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. 19. Proposed Ordinance No. O-04-10 An ordinance entitled, “AN ORDINANCE WAIVING THE REQUIREMENTS OF COMPETITIVE BIDDING FOR THE PURCHASE OF TREADMILLS FOR THE FIRE DEPARTMENT,” was taken from the agenda for consideration. A motion was made by Director Brunner-Maruthur, duly seconded by Director Wheeler, 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 Jones, that the ordinance be passed as read. Upon discussion, City Manager Kent Myers explained this is for specialized equipment, commercial grade, and has an extended warranty. He stated the Fire Department and City Attorney agree that this justifies waiving competitive bidding. 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-04-11 An ordinance entitled, “AN ORDINANCE ACCEPTING SHADY WOODS COURT AS A PUBLIC STREET; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Wheeler, 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 Edwards, duly seconded by Director Jones, 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. Discussion Regarding Fountain Lake Sewer Extension Cost Participation Request Mr. Don Cochran, Director of Utilities, advised that staff received a request from B&F Engineering, on behalf of the Fountain Lake School District, to consider funding the cost of construction for the connection of the new Fountain Lake School District=s sewer force main to the existing City’s sewer system. Staff recommended that the school dis- trict pay for the cost of the additional work related to making the proper connection to the City’s sewer system. In August 2002, the Board approved the extension of sewer service to the Fountain Lake Sewer District; and the District was to pay all of the costs associated with that extension with the exception of upsizing the force main from a 6-inch to an 8-inch, which is normally paid by the City. Also, the District asked that the City waive its existing policy for the rebate and reimbursement for future connections. The engineer developed a new program, which has the rebate cal- culated by the capacity of the pump station and the force main. The contractor came to the point of making the con- nection to an existing City sewer system and found that the sewer system was not as drawn on the plans the engi- neer had designed. Mr. Cochran met with the engineer on Friday; and the contractor has estimated his cost of mak- ing this connection to the City’s satisfaction would be $9,190. He said he agreed with the engineer that the existing pipe, which is under Highway 7 North, is an old pipe made out of concrete. Additionally, the City is to pay for that replacement; and he agreed with the engineer that the City may consider incurring that cost at this time rather than later. The engineer contacted him today and said he would consider paying whatever other costs are associated with that. Mr. Cochran stated his recommendation is that the Board approve the City’s replacing the pipe under the high- way with in-house crews in an amount not to exceed $3,500; and the engineer will proceed and fund the remainder of the construction costs to make the final connection. In reply to Director Jones, Mr. Cochran stated that the $3,500 will be absorbed in the operations budget and will use the in-house crews to perform the work and will take the pipe out of their inventory. Director Edwards questioned if the City has equipment to bore under a highway; and Mr. Cochran advised that the City has an annual service contract with contractor R. L.Wyles, who was previously approved by the Board. He added they already have competitive bidding for that work and return to the Board on an annual basis and rebid that work. City Manager Kent Myers stated that since it was previously agreed to the cost of oversizing this line, the Board needs to add to that an additional cost not to exceed $3,500 and a motion to that effect. Staff will then be authorized to run the line under the highway, and B&F Engineering will assume all of the other connection costs. He stated that in order not to delay the project, they want to get connected within the next several weeks. Therefore, staff is request- ing that the Board take action on the additional $3,500 expenditure tonight. A motion was made by Director Wheeler, duly seconded by Director Edwards, that the City replace the pipe under Highway 7 North using in-house crews in an amount not to exceed $3,500; and the engineer (B&F Engineering) assume the remainder of the cost; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 7; motion unanimously carried. Upon discussion, Director Edwards questioned if upsizing of the 6-inch to 8-inch line, is from the top of the hill at Belvedere to the school; and Mr. Cochran advised that the Board has already approved upsizing that pipe, which has already been constructed. He added that the only part that is remaining is under the highway. Director Weatherford asked why this was not detected when the line was upsized, and Mr. Cochran advised that it is  the design engineer=s responsibility to conduct a site survey when he is designing this plan. The manhole that they were connected to and the shallowness of the manhole were not picked up on the plans that he bid out. He noted it was only when their contractor got to this point that it was discovered these conditions existed. Director Weatherford asked if he waited a year to look in the manhole, and Mr. Cochran said that was correct. Director Weatherford questioned if the City is helping them more than it is helping itself, and Mr. Cochran replied that it is a shared benefit. He added it will help them to proceed and finish their project so they can connect. He advised that the City will start receiving wastewater from the school; and at that time, the City will be charging them for treating the wastewater. He explained that the hydrogen sulfite generated from the Belvedere pump station or the Fountain Lake pump station will eventually erode the concrete pipe to where the pipe could collapse and cause a major prob- lem. 22. Legislative Audit Report from Public Safety Sales Tax City Manager Kent Myers reported that about three months ago, staff became aware, through conversations with Senator Terry Smith and Representative Bob Mathis, that there were concerns in the community on how the City was appropriating money from the Police and Fire sales tax. He advised that Senator Smith and Representative Mathis requested the State Legislative Audit staff to conduct an audit to ensure the tax was being appropriated in a proper and legal manner. Over the last several months, staff has met with the legislative audit representatives; and tonight is the final report, which was presented to the Legislative Audit Committee on Friday. The report finds that the money was spent appropriately as defined in the ordinance and approved by the voters. He reported that the review identi- fied a clerical error of approximately $54,000 from 2000, in which the Fire Department was undercharged for General Fund administrative expenses. He recommended that these funds be charged to these accounts as part of the midyear budget changes in July. 23. Proposed Resolution No. R-04-33 A resolution entitled, “A RESOLUTION APPROVING THE EXTENSION OF HOT SPRINGS MUNICIPAL WATER SERVICE ON MOTE STREET TO 246 MOTE,” was taken from the agenda and read by title only. A motion was made by Director Wheeler, duly seconded by Director Brunner-Maruthur, that the resolution be adopt- ed as read. Upon discussion, Ms. Quast stated that she and her husband were told this property had water and sewer. They filed for a building permit and water and sewer permit but were advised that they did not have City water; therefore, they are requesting City water. She commented that she did not understand why all of the property on Mote Street was given City water except for this one parcel, which is in the middle of Mote Street. Director Jones asked if the City could afford to do this in-house, and Mr. Don Cochran advised that the City would have to use its own crews but would have to take the funds out of operations budget to be able to do the work. Staff’s estimate is approximately $3,500 to use in-house crews to run a two-inch water main. He checked the records, and the maps do not show there was ever a water main there; however, there is sewer. He explained there is a water main on the north and south end of the property; but these two water mains do not connect because those are dif- ferent water systems, which means they are on different pressure plains. If the two lines were connected together, the City would have to purchase a very expensive pressure relieving valve to be able to connect those two pipes. In years past, it was decided there was not any benefit to connecting those two pipes. He stressed that in looking at the City maps, it does not show there was a water line there but shows that the sewer line was there. He stated if the Board chooses to grant their request, then he would need to do this work with in-house crews and pull them off their current activity. Director Edwards asked if he has talked with the property owner regarding sharing the cost, and Mr. Cochran advised that he has not. Director Weatherford questioned if he had the funds for this project, and Mr. Cochran advised that he would have to delay another project to do the work. He stated this is not within the City’s existing policy at the present time; there- fore, the Board would have to vote to waive that policy to be able to grant this request.  Mayor Bush then called for a vote on the resolution; and upon roll call, the following voted “aye”: Director Wheeler. Voting “no”: Directors Brunner-Maruthur, Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 6; motion failed. Whereupon the resolution was declared failed. A motion was then made by Director Wheeler, duly seconded by Director Brunner-Maruthur, that the resolution be amended as follows: “the City’s Utilities Department shall bear one-half of the cost of said extension from existing resources, and the property owner shall bear the remaining one-half.” Upon discussion, Director Weatherford questioned if the property owner does not pay for all of the cost; and City Prosecutor Brian Albright advised that is the normal policy for the property owner to pay. Director Weatherford asked if this is not setting a precedent if the Board changes the policy, and Mr. Albright advised that the Board is at liberty to waive this on a case-by-case basis. Mayor Bush then called for a vote on the amendment; and upon roll call, the following voted “aye”: Directors Brunner- Maruthur, Jones, Newell, and Wheeler, total 4. Voting “no”: Directors Weatherford, Edwards, and Bush, total 3; motion carried. OTHER BUSINESS 24. Board of Directors Items Director Edwards stated that last Tuesday, a dinner was held for the members of the advisory boards, commissions, and committees; and he commended Ms. Lois Baker, Public Information Assistant; Ms. Terry Payne, Public Information Officer; and Ms. Margaret Parris, City Manager’s Secretary, for their work on this appreciation dinner. Director Brunner-Maruthur announced that on February 10, there was a Park Avenue Association Meeting, which addressed part one of the nuisance abatement policy that was adopted by North Little Rock and is being modeled in other cities. The next meeting will be held April 13, at 7:00 p.m., Tower of Strength Ministries. For more information, citizens may call 321-2604 or 321-9495. She expressed appreciation to Mr. Bart Jones for attending the PACA Meeting. Director Jones announced that the Pleasant Street Civic Center Association meeting was held on the first Saturday and expressed appreciation to Mr. Jerry Raetz, Planning/Development Director, who explained the rezoning. She stated they need more property owners and owner/occupied homeowners to start attending the meetings, and the dues are $10 a year. 25. City Manager’s Report City Manager Kent Myers gave the following report: He welcomed the members of the advisory boards, committees, and commissions who were appointed tonight: Dr. Nathaniel “Nate” Newman to the Civil Service Commission; reappointment of Sam Hocutt and appointment of Bob Hanson to the Planning Commission; reappointment of Byron Cole Rhodes to the Occupation Tax Board of Review; and reappointment of Jay Campbell to the Board of Zoning Adjustment. 25. ADJOURNMENT There being no further business to come before the Board, the meeting adjourned at 8:15 p.m., to meet again on Monday, March 1, 2004, at 7:00 p.m.