Board of Directors

MINUTES BOARD OF DIRECTORS MEETING JUNE 21, 2004, AT 7:00 P.M. The regular meeting of the Board of Directors was held on Monday, June 21, 2004, at 7:00 p.m., Hot Springs Civic and Convention Center, Rooms 104 and 105, with Mayor Mike Bush presiding. The invocation was given by Mr. Glenn Gallas, 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. Director Brunner-Maruthur requested that Item No. 13 (Proposed Resolution No. R-04-150 Approving the Extension of Hot Springs Municipal Water Service to Shady Oak Trail), Item No. 14 (Proposed Resolution No. R-04-151 Approving the Extension of Hot Springs Municipal Water Service to 446 Music Mountain Road), Item No. 15 (Proposed Resolution No. R-04-152 Approving the Extension of Hot Springs Municipal Water and Sewer Service to Hunter=s Cove Subdivision, Phase III), Item No. 16 (Proposed Resolution No. R-04-153 Approving the Extension of Hot Springs Municipal Water and Sewer Service to Cannon Ridge Lake Estates Subdivision off Longview Drive), Item No.17 (Proposed Resolution No. R-04-154 Approving the Extension of Hot Springs Municipal Water and Sewer Service to Charming Heights and South Moore Road), and Item No. 18 (Proposed Resolution No. R-04-155 Approving the Extension of Hot Springs Municipal Water Service Along a Private Drive off Timberlake Road) be removed from the Consent Agenda for separate consideration.  Upon discussion, Director Newell pointed out if the Board had discussion at this time, the Board could still discuss the Consent Agenda and then vote on the Consent Agenda as a whole, which considers all of these items. Director Brunner-Maruthur said she would prefer to discuss those items after Item No. 21. Director Newell said that he disagreed and would like to have a vote. City Manager Kent Myer stated if Director Brunner-Maruthur is referring to the wastewater fees that are to be considered later on the agenda, several of those do not involve wastewater services. Director Brunner-Maruthur said she was aware of that and would prefer to vote on them as a group, but City Attorney David White had advised they would have to be voted on separately if they are removed from the Consent Agenda. Mayor Bush stated that he would call for discussion on Item Nos. 13 through 18 after Item No. 23. Mayor Bush then called for a vote on the motion to approved the agenda, as amended; and upon roll call, the following voted Aaye@: Directors Brunner-Maruthur, Jones, Weatherford, Edwards, and Wheeler, total 5. Voting Ano@: Director Newell and Mayor Bush; motion carried. 3 Approval of Minutes of June 7, 2004 Board Meeting A motion was made by Director Wheeler, duly seconded by Director Brunner-Maruthur, that the minutes of the June 7, 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 (June 9, 2004). 6 Proposed Resolution No. R-04-144 Approving Certain Bid Awards (a) Structure Demolition - Code [awarded to John T=s Excavation in the amount of $10,800 and Ervan Slaight Demolition in the amount of $14,411]; and (b) Road/Street Bores - Utilities [annual supply contract awarded to R. L. Wyles Construction]. 7 Board of Directors= Meeting Schedule (July 2004 thru December 2004). 8 Proposed Resolution No. R-04-145 Authorizing the Mayor to Execute Lease Addendum No. 2 with TRB Aircraft Sales, Inc. 9 Proposed Resolution No. R-04-146 Adopting General Fuel Pricing Policies for the Retail Sales of Aviation Fuels at Hot Springs Memorial Airport; and Repealing Resolution Nos. 4686 and 5088. 10 Proposed Resolution No. R-04-147 Approving Change Order No. 1 to the Contract with Concrete Professionals for Installation of Crosswalks at Central Avenue and Mountain Street and Reducing Size of Crosswalk at Bath Street and Highway 7. 11 Proposed Resolution No. R-04-148 Authorizing the Mayor to Execute Lease Amendment No. 8 with the University of Arkansas Board of Trustees for the Arkansas School for Mathematics, Sciences and the Arts. 12 Proposed Resolution No. R-04-149 Declaring the Intent of the City of Hot Springs, Arkansas, to Make Certain Expenditures and to Reimburse Itself for Such Expenditures from the Proceeds of Sewer Revenue Bonds; and Prescribing Other Matters Relating Thereto. 13 Proposed Resolution No. R-04-150 Approving the Extension of Hot Springs Municipal Water Service to Shady Oak Trail. (Removed from the Consent Agenda for Separate Consideration) Board of Directors Meeting 3 June 21, 2004 at 7:00 P.M. 14 Proposed Resolution No. R-04-151 Approving the Extension of Hot Springs Municipal Water Service to 446 Music Mountain Road. (Removed from the Consent Agenda for Separate Consideration) 15 Proposed Resolution No. R-04-152 Approving the Extension of Hot Springs Municipal Water and Sewer Service to Hunter=s Cove Subdivision, Phase III. (Removed from the Consent Agenda for Separate Consideration) 16 Proposed Resolution No. R-04-153 Approving the Extension of Hot Springs Municipal Water and Sewer Service to Cannon Ridge Lake Estates Subdivision off Longview Drive. (Removed from the Consent Agenda for Separate Consideration) 17 Proposed Resolution No. R-04-154 Approving the Extension of Hot Springs Municipal Water and Sewer Service to Charming Heights and South Moore Road. (Removed from the Consent Agenda for Separate Consideration) 18 Proposed Resolution No. R-04-155 Approving the Extension of Hot Springs Municipal Water Service Along a Private Drive off Timberlake Road. (Removed from the Consent Agenda for Separate Consideration) 19 Proposed Resolution No. R-04-156 Appointing Claire Louise Normandin, Jennifer Smith, and Gene Larson to the Hot Springs/Garland County Beautification Commission. A motion was made by Director Jones, duly seconded by Director Edwards, that the Consent Agenda be approved, as amended; and upon roll call, the following voted Aaye@: Directors Brunner-Maruthur, Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 7; motion unanimously carried. OLD BUSINESS 20 Proposed Ordinance No. O-04-29 Board of Directors Meeting 4 June 21, 2004 at 7:00 P.M.  An ordinance entitled, AAN ORDINANCE FIXING RATES FOR SERVICES RENDERED BY THE WASTEWATER SYSTEM OF THE CITY OF HOT SPRINGS, ARKANSAS; AND PRESCRIBING OTHER MATTERS RELATING THERETO,@ was taken from the agenda for consideration. A motion was made by Director Wheeler, duly seconded by Director Edwards, that the rules be suspended and the ordinance be read for the third and final time by title only; and upon voice vote, the motion unanimously carried. The ordinance was then read for the third and final time by title only; and upon the question AShall the ordinance be passed as read?@ and upon motion of Director Edwards, duly seconded by Director Wheeler, that the ordinance be passed as read. Upon discussion, Mr. Mike Baka, 413 Treasure Isle Road, was recognized and spoke of the Sewer Department budget and a statement made by Mr. Ray Owen, Jr. at the last meeting commenting that he proposes the Sewer Department consider cutting costs in other areas to keep the future rate increases down. He stated that this is an important and valid statement. In the area of pump repairs and specifically grinder pumps, he noted there have been numerous funds spent that were completely unnecessary in the past five years and assumes there will be larger sums spent unnecessarily for the same reasons in the future. He stated approximately five years ago, it was decided the City should rebuild its pumps in the City=s shop, and hundreds of thousands of dollars were allocated for this construction. After the building was completed, many more thousands of dollars were spent on buying various forms of special equipment including a fully equipped machine shop. He commented that not enough thought was given to the fact that there were no eminently qualified people to man this pump repair shop and specifically the machine shop. He noted that minor efforts were made to get the qualified personnel, and his crew was approached to apply for these positions. He pointed out that having highly trained, experienced personnel in this new shop would all but guarantee its success; however, the City=s pay scale was so low that any experienced motor winder or machinist would not to seek a position. He stated that a few years ago, an article was in the newspaper stating that many of the pumps were so old they could not be rebuilt, and the City allocated an emergency fund in the amount of several hundred thousand dollars to buy a truckload of new pumps to replace these allegedly unrebuildable pumps. Since this time, he understands several more quantities of new pumps have been purchased to replace these unrebuildable pumps. He commented that the Board has been misinformed. He added that he has personally been working with the City=s pumps since 1982; and because of this experience, he can state without any doubt that virtually every grinder or lift station Board of Directors Meeting 5 June 21, 2004 at 7:00 P.M. pump can be repaired. Over the years, a standard pump rebuilding fee was arrived at, which included all the parts and labor required for a minimum rebuilding cost. During years of rebuilding these pumps, it was discovered other initially unforeseen and frequent problems needed attention before the pump would work properly once placed back into service. The most crucial is the cutter and the cutter ring assembly on the bottom of these pumps, and he said he tried repeatedly to advise the Sewer Department that these had to be sharp or the pump life could be shortened dramatically. The parts are special hardened stainless steel and proved expensive. Therefore, only a few sets were ever purchased when many were needed. He said they devised a way of sharpening the cutters using a newly purchased surface grinding machine. Many other problems arose as these pumps became older or the service pits were subjected to abnormal foreign items being flushed into the system. Over the past 15 years, they have devised a way to repair any problem with these pumps; and that is why he states almost any pump can be repaired over and over again. He said that every single pump the City owns in the City can be repaired. The problem is that there was never any money allocated for extra parts when the pump became five, ten, fifteen, or twenty years old; but every pump can be repaired. Within the next ten years, he said the City will be getting into the seven figure area of not repairing its own pumps. At the present time, the pump repair price is about 30 percent the cost of a new one; and even if the City had to have extra parts and go to 50 percent the cost of a new one, it is still in the seven figures. City Manager Kent Myers advised that the machine repair shop Mr. Baka referred to was actually started about four or five years ago by Mr. James Mattingly, and it is his understanding that the machine repair shop is a state-of-the-art facility, which saved the City a large amount of money since that period of time. He mentioned the machine shop has continued under Mr. Don Cochran, Utilities Director; and capital equipment has been added in that machine shop every year. He commented it is his understanding that other communities look at the City=s machine repair shop because the City is able to do much of the work in-house and save money. He stated that staff can compile a detailed report for the Board showing how much money the City has saved. Director Edwards responded that he would like to see that report. Mr. Ted Berhenn, 264 Lake Harbor, stated that on the website it says the City is replacing the county grinder pumps; and then it says there are 3,500 to 4,000 available. He noted there are a number grinder pumps in the City that are also being replaced. He stated they have been paying sewer rates, which include maintenance rates, to Board of Directors Meeting 6 June 21, 2004 at 7:00 P.M. maintain these sewer pumps for 30 years. Now that they need replacing, they have an additional bill; and he questioned what will happen in 30 more years when these wear out. He reported that he attended the 70 West community meeting, and City Manager Kent Myers was asked if this was part of a conspiracy to annex part of Highway 70 West. His reply was at this time, there is nothing in the works. Also, Mr. Cochran stated that Lake Hamilton School was prepared to abandon its wastewater treatment plant and join into the City. Mayor Bush pointed out the only way the City can annex any property is through a vote of the people or through a voluntary annexation, and he took exception to Mr. Berhenn=s mentioning a conspiracy. Mr. Berhenn stated that at the meeting, a question was posed to City Manager Kent Myers if the sewer rate increase for the County residents is part of a plan to force the county residents to annex. He said that Mr. Myers informed the group there was no plan to annex any part of that area, but now there is a plan. He said that according to Deputy City Manager Lance Hudnell, this was being done in order to straighten the city limit lines. City Manager Kent Myers clarified his response and stated that the question was asked if there was an annexation plan, and he explained that staff does not have the authority to create an annexation plan. An annexation plan, if it is not a voluntary annexation, can only be supported by the Board and taken to the voters. He said when he responded to that question at the meeting, his response was that the Board does not have an annexation plan. However, staff has some ideas, concepts and maps; but there is no plan. He emphasized that the plan has to come through the Board of Directors, and they will be considering that issue next month. Mr. Don Cochran explained that the Utility staff and engineer have met with the Lake Hamilton School District on a few occasions to discuss the feasibility of the school district pumping wastewater to the new proposed plant for that area; but as far as his making the statement that they are ready to abandon their treatment plant and have made plans to do that, it is not true. All that has been done is discussion on that topic, and no negotiations at this point. Mr. John Rima, 104 Southern Hills, said he also has property at 214 Scott Forge Road and is president of the Little Mazarn Sewer Improvement District. He asked if there is some mechanism that will allow County residents to have some extended input Board of Directors Meeting 7 June 21, 2004 at 7:00 P.M. on the development of the expanded sewer program; and if there is, he would like to help facilitate that. City Manager Kent Myers advised he received that question today from a developer of property off Park Avenue across from Belvedere Country Club. The developer questioned the next step in terms of expanding sewer services to that area if the rate increase is approved tonight, and his response was he believed that next month the Board will begin to look at future capital projects, which might be included in a bond issue. He advised that the City is looking at a potential bond issue to finance the new sewer plant by Lake Hamilton School, and there are other projects that staff has recommended to include in that bond issue. He noted there would be a public meeting at that time, and he would be welcome to attend. However, if he has something specific in the meantime, he suggested that Mr. Rima contact Mr. Don Cochran, Utilities Director. Mr. Rima said if they do not live in the City and have property in the County, they do not have a vote until they go to the bond issue. He pointed out there is not an organized voice or a voice that serves on any planning group for the County. He stated that he believes people would be more comfortable if there were a contact person. City Manager Kent Myers stated that as the City continues to expand its water and sewer services in the County, he believes it is important to consider someone in an advisory capacity that either comes through the Quorum Court or another way to make sure that the county voice is considered in some of these important issues. Director Brunner-Maruthur read a prepared statement stating that the City must continue to keep the wastewater treatment system operating efficiently to meet all state and federal mandates and meet the needs of the community. The revenue being produced in the wastewater fund is not enough to support the needs for operation and maintenance in the future. On June 2, 2003, the City awarded a contract to NRS Engineering for a Wastewater and Water Master Plan. The amount of the contract was $144,750. The wastewater rate study cost was not to exceed $18,000; and $17,280 was spent. The Impact Fee Study was not to exceed $17,500; and the City has spent $11,964. At the May 17, 2004 meeting, she asked five questions of Mr. Dan Jackson, managing director of economists.com LLC, who did the wastewater rate study. She said that she requested he provide her with the methodology formula and place the numbers from the City to this formula on one page so that the public could understand how this amount had been derived. On May 18, she e-mailed Mr. Jackson and asked Board of Directors Meeting 8 June 21, 2004 at 7:00 P.M. him to send her the methodology with the numbers. On May 19, she received a response, which referred to the report as being Amind-numbing@ and is summarized in an eight-page executive summary. However, this response is not sufficient. She noted if this wastewater rate increase is passed tonight, it opens it up for more increases and believes the City needs to seek an alternative rate increase structure to lessen the impact on the residents of the City and County. The rate increase proposed tonight, in her opinion, is too high. She said the City should consider an efficiency study of the economic management of the City=s funds, and perhaps the City can turn to the Arkansas Municipal League to help find someone. She commented that she cannot support this increase, and the City failed to meet the mandate placed by the EPA in 1980, and the cost to the City was $20 million. She stated the City finished the improvements ten years ago and still has to pay $1.3 million in sewer bond payments until 2014. She questioned why there has not been a sewer rate increase in 82 years. She pointed out that the Board makes policy, but it can only make policy on what information it is given; and she assumed the management was vigilant. She said she voted to keep all of the departments under the control of the City Manager about ten years ago. During the work sessions, she had consistently urged and supported for the infrastructure to be repaired and replaced for the future of the City and growth. She said that she is pleased with the progress the City has made as far as light and sewer replacement program. She emphasized that the City must keep the wastewater treatment system operating efficiently, meet state and federal standards, and continue to provide utility services to the customers. Director Brunner-Maruthur made a motion to adopt Option No. 2, with no impact fee, and a moratorium placed on the extension of water and sewer services until the City can take care of its responsibilities. Even though she feels the county is utilizing and placing demands on the wastewater plant system more than the City, it is the City=s responsibility to make sure they are not forced into these outrageous rates. She said she would like the chart provided by Mr. Jackson and presented to the Board in March to be a temporary source of revenue and to end it December 2005, thus providing the City with funds until the City finds out how this happened and prohibits this from reoccurring. She mentioned that she is not opposed to increasing the rates and understands the needs the City has. She stressed if the City cannot provide water and sewer service to the existing customers and meet state and federal mandates, then it should not extend its utility services. Director Newell pointed out there is a motion and second already on the floor. He said this may be a Amind-numbing@ report, but he read it and understood it. He stated that he considered Mr. Jackson the most prepared expert the City has ever hired, and the facts that he used to support his figures made sense to him; and it is logical. Board of Directors Meeting 9 June 21, 2004 at 7:00 P.M. He pointed out if the City had raised the rates once a year for the last eight years, it would not have been popular. He said that he is very comfortable with Option 2, which is on the floor. He added that he did not want to have to raise rates, but this appears to be the most logical option. He noted that it is not responsible government to place everything on hold until December 2005 and to deny the legitimacy of this report. He said that he supports the motion on the floor to adopt the ordinance. Director Edwards pointed out that the City has paid Mr. Jackson to do this study, and it is the most logical to him. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted Aaye@: Directors Jones, Newell, Edwards, Wheeler, and Bush, total 5. Voting Ano@: Directors Brunner-Maruthur and Weatherford, total 2; motion carried. Whereupon the ordinance was declared passed. NEW BUSINESS 21 Proposed Ordinance No. OB04-37 An ordinance entitled, AAN ORDINANCE FIXING IMPACT FEES FOR THE WASTEWATER SYSTEM OF THE CITY OF HOT SPRINGS; ADOPTING A WASTEWATER CAPITAL PLAN AND LEVEL OF SERVICE STANDARDS; AND PRESCRIBING OTHER MATTERS RELATING THERETO,@ was taken from the agenda for consideration. A motion was made by Director Wheeler, duly seconded by Director Edwards, 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 AShall the ordinance be passed as read?@ and upon motion of Director Edwards, duly seconded by Director Wheeler, that the ordinance be passed as read. Upon discussion, Director Brunner-Maruthur stated that Mr. Jackson is an excellent speaker; however, she had requested at the Board Meeting on the 17th and in private to place numbers to his methodology. She said that he did not provide her with the information she requested, which she finds unacceptable. She commented that even though an increase is needed, she cannot support a 42 percent increase, which could possibly increase to 60 percent. She noted that the moratorium is not placing the City on hold but would produce a revenue the City could work with, find out how the City is in this position, and bring someone in to review the City=s spending practices. Board of Directors Meeting 10 June 21, 2004 at 7:00 P.M. She emphasized that this is not directed to any individual and is not personal. She said that $3.1 million was found in the Water Fund and asked that Ms. Dorethea Yates, Finance Director, explain this. Ms. Yates explained that the $3.1 million is the Water Depreciation Fund. The City has a number of revenue bond issues; and as a part of the requirements for that bond issue, the City is required to set aside a certain amount of money every month into the Water Depreciation Fund. The purpose of these funds is to make replacements and repairs to the Water System for normal depreciation upon the system. The $3.1 million is recorded, and it does appear in the City=s Comprehensive Annual Financial Report every year. She mentioned that it is not a matter of her finding the money, but the money has already been recorded there. Director Brunner-Maruthur suggested bringing someone in from the outside who has expertise in efficiency assessment or possibly hiring some students, and Director Newell pointed out that is what Mr. Jackson did. Director Brunner-Maruthur asked that someone explain how he arrived at his methodology, and Director Newell pointed out there are 150 pages of figures, which was condensed to eight pages by Mr. Jackson in the executive summary. He said that he read it and understood it. Director Brunner-Maruthur said that it makes sense that the City needs an increase in revenues to keep up with the mandates of the state and federal government, but she asked him to take the numbers and apply them to the formula of his methodology and put it on one page. Director Newell noted that it was put on eight pages and condensed as much as possible. Director Brunner-Maruthur pointed out there are no numbers on there for the methodology. Mayor Bush said he read the executive summary and understood it. City Manager Kent Myers advised that following the Board Meeting, Mr. Jackson submitted a two-page response to Director Brunner-Maruthur, which has been forwarded to the Board. It explains the cash basis and the utility basis of rate setting, and that was used in the development of this rate study. He stated it is a nationally accepted standard approved by the American Waterworks Association, and Mr. Jackson explains this in the two-page report. He said that he also asked the Board if this packet, which was sent to the Board on June 7, did not answer all of their questions, Board of Directors Meeting 11 June 21, 2004 at 7:00 P.M. to contact him so he could advise Mr. Jackson since he would not be available for this meeting. He added that Mr. Jackson has done many of these studies around the country, and the City checked on his references; and he is noted as an outstanding rate consultant. Director Brunner-Maruthur commented he made an excellent presentation and came up with a very specific number, which was 42 percent. She had requested that he advise her how he arrived at the numbers and to include them on one page. She pointed out that the reason is due to the amount of the increase. She emphasized this increase will have a big impact on people=s savings, salaries, and those who are on fixed incomes. Director Newell explained that Mr. Jackson took the recent historical rate of growth in the county and the city, the number of connections in the county and in the city, the amount that was specified by the NRS study that the City would need and how much it would cost to build these two plants, which is a fixed cost. He took these other figures (rates of growth), and he projected how much the City would need over the next five years to pay for the debt service on the amount it would need. Director Brunner-Maruthur said her point is that it is an unreasonable amount (42 to 60 percent) to ask the people in the county to pay. She stated that one of the questions she asked at the Board Meeting was how much was needed to increase the rates to continue with the quality of the delivery system. She commented that she wanted Mr. Jackson to put together the minimum the City can do to raise the rates and comply with state and federal standards. Director Newell said he felt that Option 2 did that pointing out that it took a reasonable middle-of-the-road approach to raise the needed revenue in a reasonable amount of time to pay for the project. Director Brunner-Maruthur pointed out that the City is continually extending services and cannot seem to meet the needs that are set by the state and federal government, and the City is going to continue to grow. She commented that apparently there is a built-in problem with spending and the allocation of money may be somewhere else. Mayor Bush commented that the City is increasing the fees in wastewater for people in the City $1.83 per month over three years, which will increase from $20.30 to $22.13. In the County, it is going up $10.53 from $20.30 to $30.83 over the Board of Directors Meeting 12 June 21, 2004 at 7:00 P.M. three-year period. He said Mr. Jackson=s report proved to him that it costs the City more to serve the county customers than it does the city customers. Director Brunner-Maruthur asked if the City passed a budget in 2002 where there was money borrowed from the Water Department and given to the Sewer Department because there was not enough money, and City Manager Kent Myers advised that it did not. He added there was money transferred on a temporary basis, but that money has been repaid. Director Brunner-Maruthur stated this did not happen overnight, and City Manager Kent Myers explained that it did not; but inflation hit the City. He mentioned the City has an older system and is adding more pumps to the system. He pointed out this is not the last rate increase that the Board will have to consider; and the electric, gas, and utility rates are increasing all over the country. Director Brunner-Maruthur explained that was why part of her motion was to recommend a moratorium on extending the utilities until the City can get something in place to cover the existing users. Director Newell pointed out that would mean no construction of new houses and no new hook-ups until December 2005, which is 18 months of no growth. Director Brunner-Maruthur said that is not her intent. Director Newell pointed out that no one in the county can hook up for the next 18 months. He commented that the City sells a product, and they pay for it. Mayor Bush stated that the City owns the system, and the City is entitled to a rate of return on that system. Director Brunner-Maruthur noted that the City has to be good stewards of its money. Director Weatherford asked with the new rate, what kind of money would it generate back to the City over a year; and City Manager Kent Myers advised that once it is fully implemented, it will generate about $2.5 million a year. Director Weatherford asked if that will be sufficient for the City to do all of its capital improvements, and City Manager Kent Myers advised that it will. He added that the capital improvement plan was given to the consultant and was incorporated in the study. If the capital improvement plan changes next year or two years from now and the Board wants to do some other capital improvements, then that will change the numbers in the study. Board of Directors Meeting 13 June 21, 2004 at 7:00 P.M.  Director Weatherford questioned what was on the capital improvement plan, and Mr. Don Cochran advised that the capital improvement plan includes the new plant, pump replacement, grinder pump replacement program, and vehicle replacements. In the development of the rate study, the rate consultant had asked for the capital plan and for the City to identify with each project how much or what percentage of that project would be related to growth. From that information, he originally recommended an $800 impact fee for a 5/8 inch meter to offset those costs; but it was staff=s recommendation to start with the $500 impact fee. Director Weatherford asked if this included the line on Central Avenue that will have to be replaced or repaired on Highway 7 South at the Mall, and Mr. Cochran advised that one just came up this past week and is not included at this time. He stated the City will have to swap that project out for another one within the next year or so. He explained that two years ago, there was a sewer leak at the intersection of Higdon Ferry Road and Central Avenue. The City could not find the source of that leak and has been searching for it for quite sometime. He said they dye tested all of the pump stations in the area and dye tested the sewer collection system because normally the dye will come up if it is a wastewater leak, but the dye never surfaced there. They did lab analysis and determined that it was sewage. They collected that into a pipe and then rerouted it back into the sewer system. Within the last few weeks, it resurfaced again so they have installed a manhole at that location as a catch basin and rerouted that flow back into the collection system about 2 block down Higdon Ferry Road and installed a pipe underground so the City is collecting it now and keeping it from surfacing into the environment. He pointed out this is just buying some time until the City can replace the force main that he believes is leaking. Director Edwards said that main is about 30 feet deep, and Mr. Cochran replied that it is probably 12 or 15 feet deep; and possibly they will have to do a construction method called pipe bursting where they insert a new pipe into the existing pipe. They have a device that bursts out the old pipe and pulls a new pipe along with a bullet and then inserts the new pipe into the position where the old pipe exists. The reason for that is because it is so deep, and it is near the state highway and would be difficult to replace it in an open-cut construction method. Director Brunner-Maruthur said she believes the City is doing an excellent job with the water and wastewater and lighting programs. She pointed out that during the ice storm, the City replaced the oldest water main in the City. However, it should not have been there and had been there since the late 1800's. In the middle of the ice storm, it broke; and this is what is being paid for. She pointed out these things were Board of Directors Meeting 14 June 21, 2004 at 7:00 P.M. not addressed in the past, and the City needs to know how it got into this situation and where the money has been spent. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted Aaye@: Directors Jones, Newell, Edwards, and Bush, total 4. Voting Ano@: Directors Brunner-Maruthur and Weatherford, total 2. Director Wheeler was out of the Board Chambers and did not cast a vote; motion carried. Whereupon the ordinance was declared passed. 22 Proposed Ordinance No. O-04-38 An ordinance entitled, AAN ORDINANCE WAIVING THE REQUIREMENT OF COMPETITIVE PROPOSALS FOR A BUILDING ENVIRONMENTAL ASSESSMENT OF THE RESIDENTIAL LIFE FACILITY AT THE ARKANSAS SCHOOL FOR MATHEMATICS, SCIENCES, AND THE ARTS; APPROPRIATING FUNDS; AND FOR OTHER PURPOSES,@ 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 AShall the ordinance be passed as read?@ and upon motion of Director Edwards, duly seconded by Director Brunner-Maruthur, that the ordinance be passed as read; and upon roll call, the following voted Aaye@: Directors Brunner-Maruthur, Jones, Newell, Weatherford, Edwards, and Bush, total 6. Director Wheeler was out of the Board Chambers and did not cast a vote; motion carried. Whereupon the ordinance was declared passed. 23 Proposed Ordinance No. O-04-39 An ordinance entitled, AAN ORDINANCE WAIVING THE REQUIREMENT OF COMPETITIVE BIDDING FOR THE PROVISION OF COMMUNITY FIREWORKS DISPLAYS; APPROPRIATING DONATIONS; AND FOR OTHER PURPOSES RELATED THERETO,@ was taken from the agenda for consideration. A motion was made by Director Edwards, 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 AShall the ordinance be passed as read?@ Board of Directors Meeting 15 June 21, 2004 at 7:00 P.M. and upon motion of Director Jones, duly seconded by Director Brunner-Maruthur, that the ordinance be passed as read; and upon roll call, the following voted Aaye@: Directors Brunner-Maruthur, Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 13 Proposed Resolution No. R-04-150 A resolution entitled, AA RESOLUTION APPROVING THE EXTENSION OF HOT SPRINGS MUNICIPAL WATER SERVICE TO SHADY OAK TRAIL,@ was taken from the agenda and read by title only. A motion was made by Director Wheeler, duly seconded by Director Newell, that the resolution be adopted as read. Upon discussion, Director Brunner-Maruthur pointed out this is four miles from the city limits; and she cannot support it. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted Aaye@: Directors Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 6. Voting Ano@: Director Brunner-Maruthur; motion carried. Whereupon the resolution was declared adopted. 14 Proposed Resolution No. R-04-151 A resolution entitled, AA RESOLUTION APPROVING THE EXTENSION OF HOT SPRINGS MUNICIPAL WATER SERVICE TO 446 MUSIC MOUNTAIN ROAD,@ was taken from the agenda and read by title only. A motion was made by Director Wheeler, duly seconded by Director Edwards, that the resolution be adopted as read. Upon discussion, Director Brunner-Maruthur pointed out this is .6 miles from the city limits; and she cannot support it. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted Aaye@: Directors Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 6. Voting Ano@: Director Brunner-Maruthur; motion carried. Whereupon the resolution was declared adopted. Board of Directors Meeting 16 June 21, 2004 at 7:00 P.M. 15 Proposed Resolution No. R-04-152 A resolution entitled, AA RESOLUTION APPROVING THE EXTENSION OF HOT SPRINGS MUNICIPAL WATER AND SEWER SERVICE TO HUNTER=S COVE SUBDIVISION, PHASE III,@ was taken from the agenda and read by title only. A motion was made by Director Wheeler, duly seconded by Director Edwards, that the resolution be adopted as read. Upon discussion, Director Brunner-Maruthur pointed out this is .6 miles from the city limits; and she cannot support it. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted Aaye@: Directors Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 6. Voting Ano@: Director Brunner-Maruthur; motion carried. Whereupon the resolution was declared adopted. 16 Proposed Resolution No. R-04-153 A resolution entitled, AA RESOLUTION APPROVING THE EXTENSION OF HOT SPRINGS MUNICIPAL WATER AND SEWER SERVICE TO CANNON RIDGE LAKE ESTATES, SUBDIVISION OFF LONGVIEW DRIVE,@ was taken from the agenda and read by title only. A motion was made by Director Wheeler, duly seconded by Director Edwards, that the resolution be adopted as read. Upon discussion, Director Brunner-Maruthur pointed out this is 2 mile from the city limits; and she cannot support it. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted Aaye@: Directors Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 6. Voting Ano@: Director Brunner-Maruthur; motion carried. Whereupon the resolution was declared adopted. Board of Directors Meeting 17 June 21, 2004 at 7:00 P.M. 17 Proposed Resolution No. R-04-154 A resolution entitled, AA RESOLUTION APPROVING THE EXTENSION OF HOT SPRINGS MUNICIPAL WATER AND SEWER SERVICE TO CHARMING HEIGHTS AND SOUTH MOORE ROAD,@ was taken from the agenda and read by title only. A motion was made by Director Wheeler, duly seconded by Director Edwards, that the resolution be adopted as read. Upon discussion, Director Brunner-Maruthur pointed out this is two miles from the city limits and will place more of a burden on the City=s wastewater system. She noted there are people in the City who are in need of utilities. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted Aaye@: Directors Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 6. Voting Ano@: Director Brunner-Maruthur; motion carried. Whereupon the resolution was declared adopted. 18 Proposed Resolution No. R-04-155 A resolution entitled, AA RESOLUTION APPROVING THE EXTENSION OF HOT SPRINGS MUNICIPAL WATER SERVICE ALONG A PRIVATE DRIVE OFF TIMBERLAKE ROAD,@ was taken from the agenda and read by title only. A motion was made by Director Wheeler, duly seconded by Director Edwards, that the resolution be adopted as read. Upon discussion, Director Brunner-Maruthur pointed out this is five miles from the city limits; and she cannot support it. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted Aaye@: Directors Jones, Newell, Weatherford, Edwards, Wheeler, and Bush, total 6. Voting Ano@: Director Brunner-Maruthur; motion carried. Whereupon the resolution was declared adopted. Board of Directors Meeting 18 June 21, 2004 at 7:00 P.M.  OTHER BUSINESS 24 Board of Directors Items Mayor Bush announced that Director Elaine Jones will serve as Assistant Mayor for the term July 1, 2004, through December 31, 2004. Director Edwards expressed appreciation to the Engineering Department and employees for the job on a drainage problem that has been there for 30 years in the 300 block of Hermlee. Director Brunner-Maruthur thanked the Sanitation Department for its participation in the Spring Fling clean-up. District No. 1 had a total of 23.83 tons, and District No. 4 had 30.23 tons. Director Weatherford reported that the barbecue rib cook-off will be held at the Exchange Street Parking Plaza on Saturday, July 31, 2004. There is a fee to enter by purchasing one box of ribs so they are all the same kind of ribs being cooked. They will start at 9 a.m., judge around 2 p.m., and serve it around 3 p.m. To purchase the ribs, they may contact Mr. Tom Daniel. Director Wheeler announced there are 30 states represented at the Miss Arkansas Pageant, and they are meeting at the Embassy Suites. 25 City Manager=s Report City Manager Kent Myers gave the following report: 1. On the Consent Agenda, the Board approved a Change Order to the Contract with Concrete Professionals for installation of a crosswalk at the corner of Central Avenue and Mountain Street and hopefully they will be installed within the next 30 to 60 days. The bid for the Bath Street crosswalk was so competitive that they were able to add additional crosswalks under the terms of the grant with the Arkansas State Highway and Transportation Department. Board of Directors Meeting 19 June 21, 2004 at 7:00 P.M.  2. Interviews will begin this week for the Fire Chief=s position, and there are five finalists for that position. The first two will be interviewed this week on Wednesday and Thursday, June 23 and June 24. The public will be able to meet the finalists from 6 p.m. to 7 p.m. on Wednesday and Thursday at the Transportation Depot. The Directors are invited to join the finalists for dinner, and his office will contact them tomorrow. The public will have the opportunity to meet Mr. John Mascaro, Fire Chief of Olympic Gardens Fire Department in Chicago Heights, Illinois; and Mr. Jerry Holt, Fire Chief/Paramedic from Urbandale, Iowa. The interviews will continue next week with Fire Marshall Ed Davis and Shift Commander Geoff Wolf, with the Hot Springs Fire Department; and Steven Moody, Deputy Chief of Salina Fire Department, Salina, Kansas. 3. He expressed appreciation to the Advertising and Promotion Commission for allowing the City to use Rooms 104 and 105 due to having to relocate the meeting for the Miss Arkansas Pageant. The next Board Meeting will be held on Tuesday, July 6, since the City will be observing the July 4 holiday. He reported there has been a roof leak which may delay the next Board Meeting being held in the Board Chambers. The lighting fixtures are installed, and the Board table is installed but has not been stained. The only major item left is the installation of the lighting and the carpeting. 26 ADJOURNMENT There being no further business to come before the Board, the meeting adjourned at 8:20 p.m., to meet again on Tuesday, July 6, 2004, at 7 p.m. ATTEST: _____________________ APPROVED:__________________ Lance Hudnell, City Clerk Mike Bush, Mayor Board of Directors Meeting 20 June 21, 2004 at 7:00 P.M.