Board of Directors

MINUTES BOARD OF DIRECTORS MEETING JULY 5, 2005, AT 7:00 P.M. The regular meeting of the Board of Directors was held on Tuesday, July 5, 2005, at 7:00 p.m., Board Chambers, City Hall, with M ayor M ike Bush presiding. The invocation was given by M s. Donnetta Frierson, and Pledge of Allegiance to the Flag was led by M ayor Bush. M ayor Bush called the meeting to order at 7:00 p.m. 1 Roll Call Roll call was as follows: Present: Directors Peggy M aruthur, Elaine Jones, Steve Smith, Carroll Weatherford, Bill Edwards, Tom Daniel, and M ike Bush, total 7. 2 Approval of Agenda A motion was made by Director Daniel, duly seconded by Director M aruthur, that the agenda be approved. Upon discussion, Director Edwards requested that Item No. 16 (Proposed Ordinance No. O- 05-55 Rezoning a C-TR, Commercial Transition, to Include a Parcel of Property Located in the 100 Block of Oaklawn Street South and East and Immediately Adjacent to the Intersection of Oaklawn Street with Bell Street, Zoned R-3, Low Density Residential) be removed from the agenda. M ayor Bush then called for a vote on the motion to approve the agenda with the deletion of Item No. 16; and upon voice vote, the motion unanimously carried. 3 Approval of Minutes of June 20, 2005 Board Meeting A motion was made by Director Jones, duly seconded by Director M aruthur, that the minutes of the June 20, 2005 Board M eeting be approved; and upon voice vote, the motion unanimously carried. 4 Recognition of Guests City Manager Kent M yers recognized M r. Ron Boshears, new executive director of the Hot Springs/Garland County Beautification Commission, who expressed appreciation to the Board for its support. He reported they are comprised of 25 commissioners who volunteer thousands of hours t o t he City. They are also members of other organizations such as the M aster Gardeners, the Chamber of Commerce, M id-America M useum, and the Audubon Society. There are several ongoing programs through the public schools, and there will be a litter summit on September 13 at the Transportation Depot. Also, they are working with M s. Jean Wallace, Parks and Recreation Director; M r. Denny M cPhate, Engineering Supervisor; and M s. Terry Payne, Public Information Officer, on the M S 4 Storm Water M anagement Program, as well as with M r. Chuck Daniels, Urban Forester. CONS ENT AGENDA The Consent Agenda consisted of the following: 5 Public S afety Report (June 22, 2005). 6 Proposed Resolution No. R-05-209 Approving Certain Bid Awards (a) Property Demolition - Code Compliance [awarded to Ervan Slaight in the amount of $17,791, ACES in the amount of $2,459, and John T’s Excavation in the amount of $10,999]; and (b) Cell Phones - Various Departments [annual supply contract awarded to Alltel]. 7 Proposed Resolution No. R-05-210 Approving the Extension of Hot Springs Water and Wastewater Service to Lighthouse Cove, Phase II. 8 Proposed Resolution No. R-05-211 Approving the Extension of Hot Springs Water and Wastewater Service to Carpenter Park, Phase II. 9 Proposed Resolution No. R-05-212 Awarding a Contract to Bobo and Bain Construction for Wastewater Line Relocation on Section Line Road. Board of Directors M eeting 2 July 5, 2005 at 7:00 P.M . 10 Proposed Resolution No. R-05-213 Awarding a Contract to Heller Construction for Wastewater Line Rehabilitation on Locust and East Grand and Pleasant and East Grand. 11 Proposed Resolution No. R-05-214 Authorizing the M ayor to Execute a Lease Agreement between the City of Hot Springs, Arkansas, and David M cGough, d.b.a. Vortex Corporation, for a Commercial Hangar at the Airport. 12 Proposed Resolution No. R-05-215 Authorizing Disbursement of HUD Community Development Block Grant (CDBG) Program Funds to ARC of Arkansas for Reimbursement of Architectural Fees. 13 Proposed Resolution No. R-05-216 Amending the Employee Handbook (Uniformed and Non-Uniformed) Regarding M ilitary Leave. A mot ion was made by Director Daniel, duly seconded by Director Edwards, that the Consent Agenda be approved; and upon roll call, the following voted “aye”: Directors M aruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. NEW BUS INES S 14 Proposed Resolution No. R-05-217 A resolution entitled, “A RESOLUTION ACKNOWLEDGING THE REVIEW OF THE 2004 COM PREHENSIVE ANNUAL FINANCIAL (AUDIT) REPORT,” was taken from the agenda and read by title only. A motion was made by Director Edwards, duly seconded by Director M aruthur, that the resolution be adopted as read. Upon discussion, Mr. Gary Welch, auditor with Jordan, Woosley, Crone & Keaton, presented the 2004 Annual Financial Report. Also present from the audit staff were M s. Phyllis Trent and M s. Kristina Ellis. He pointed out that the report is in four groups: (1) introductory section; (2) financial section; (3) statistical section; and (4) single-audit and compliance section. M r. Welch stated that the transmittal section contains some important areas, and the transmittal letter is a summary of the activities of the City for 2004 that was completed by Finance Board of Directors M eeting 3 July 5, 2005 at 7:00 P.M . Director Dorethea Yates. It also contains the Certificate of Achievement in Financial Reporting. He added this is the 11th consecutive year that the City has received the award of financial reporting excellence and has also received the award for budget preparation. M r. Welch explained that the first section is what they consider their most important cont ribut ion to this report, which is their opinion of the financial statements. This opinion paragraph states that all of the financial data in the 125-page document is presented fairly in all mat erial respects, which means there are no adjustments to be made and no further reviews or adjustments to make it any more fairly stated. Also, in this section is the management’s discussion and analysis, which is a summary of the activity of the City for 2004 and includes charts and graphs on revenue, expense, etc. Regarding the overall net assets of the City, M r. Welch stated that the citywide total assets are $262 million; liability is $61 million; and a net worth of the City is over $200 million. He pointed out that the liabilities decreased from 2003 by over $8 million. In 2004, there was no new bond debt issued; but there was a normal $6 million worth of debt amortized; also the Civic Center bonds of $3,030,000 were called early. The reason the City is able to do this is due to the sales tax revenue increase and also the state turnback. The important financial consideration is that when bonds are called at a little over four percent, interest is saved on those bonds for the seven-year period that would have incurred from 2004 to 2011. The original issue in 2001 was $39,800,000; but that bond is down to $21 million in three years. In regard to the activities of the City, the expenses to run the City are $52 million, which are in two distinct lines: (1) the governmental activities are the General Fund, the Police, Fire, Street and all the other special revenue funds. That is paid for by mostly from the sales tax and other general revenues; and (2) business-type or proprietary operations, which are the Water, Wastewater, Sanitation, Airport and Parking Funds. The expenses of $22 million are paid for by the charges to the utility users. Overall, the City increased its net assets by $5,400,000 in 2004. Regarding budget results for 2004, the City was able to have a favorable budget result. The City budgeted to spend more than it collected in revenue in the General and Special Fund categories. T he City had originally budgeted $1.5 million use of reserve, and that changed to $2.2 million. However, the actual final results were the use of $550,000, so that is a favorable $1,730,000 result. Concerning the proprietary Water, Wastewater, Sanitation, Airport, and Parking, there was also a favorable result based on increased revenue and capital contributions. The Airport was an unus ual situation in 2004. They had budgeted over $2 million from the FAA to receive on the taxiway delta project, but the FAA did not release those funds timely. Therefore, that project did not get completed which is the reason for a large negative in the Airport Fund. The budget could have Board of Directors M eeting 4 July 5, 2005 at 7:00 P.M . been changed; but since the City changed the budget in mid-year, the FAA money was not realized until September. Therefore, that change was not made; but overall the Enterprise Funds increased $942,000. He stated the City receives money from the federal and state government in a substantial amount. In the line of expenditures, the City expended $3,300,000 in federal funds and $135,000 in state funds, which is primarily for the transit system. The 70 East utility relocation was supported by the Arkansas State Highway and Transportation Department, and the Airport received some substantial monies. Regarding comparisons of activity for 2004 and 2003, in governmental and business-type, the City increased its positive change to net assets $3 million in governmental compared to $600,000 in 2003. In the business-type, it increased $2.3 million compared to $1.9 million in 2003. Regarding the reflection in changes in assets, liabilities and net assets, the net assets changed from $195 million to $200 million for a $5.422 million increase. He pointed out that the Board is always concerned with the General Fund reserve balance, and it increased from $3.284 million to $3.289 million, which is sufficient reserve to handle over five months’ expenditures and over two months’ expenditures, plus transfers. He mentioned that the General Fund does a large amount of transfers into the Police, Fire, Street, and other special revenue funds. M r. Welch expressed appreciation to the Finance Director and her staff for their cooperation. Director Smith questioned if it is safe to say comparing 2003 to 2004, that 2004 was a better year because some bonds were paid off early. M r. Welch replied that 2004 was better because sales t ax revenue was higher; the Utilities had a better revenue year; and there was substantial contributions to some water and wastewater projects. Also, the City spent less than it budgeted. Therefore, 2004 was a better year than 2003. M ayor Bush then called for a vote on the motion to adopt the resolution; and upon roll call, the following voted “aye”: Directors M aruthur, Jones, Smith, Weatherford, Edwards, Daniel and Bush, total 7; motion unanimously carried. Whereupon the resolution was declared adopted. 15 Proposed Resolution No. R-05-218 Board of Directors M eeting 5 July 5, 2005 at 7:00 P.M .  A res olution entitled, “A RESOLUTION AWARDING A CONTRACT TO BB&B CONSTRUCTION FOR CEDAR STREET WATER LINE REPLACEM ENT PROJECT,” was taken from the agenda and read by title only. A mot ion was made by Director M aruthur, duly seconded by Director Jones, that the resolution be adopted as read. Upon discussion, City M anager Kent M yers stated this line dates back 80 to 90 years. The project was bid, and the low bidder was BB&B Construction at a total cost of $222,291. This is included in the Water Budget for 2005, and staff recommends approval. Director Maruthur pointed out this project consists of replacing approximately 4,000 feet of a six-inch water main on Cedar Street from Whittington to Amber. M ayor Bush then called for a vote on the motion to adopt the resolution; and upon roll call, the following voted “aye”: Directors M aruthur, Jones, Smith, Weatherford, Edwards, Daniel and Bush, total 7; motion unanimously carried. Whereupon the resolution was declared adopted. 16 Proposed Ordinance No. O-05-55 Rezoning a C-TR, Commercial Transition, to Include a Parcel of Property Located in the 100 Block of Oaklawn Street South and East and Immediately A djacent t o the Intersection of Oaklawn Street with Bell Street, Zoned R-3, Low Density Residential. (Appeal) This item was withdrawn from the agenda. 17 Proposed Ordinance No. O-05-56 A n ordinance entitled, “AN ORDINANCE ACCEPTING THE ANNEXATION OF CERT A IN TERRITORY (2289 HIGDON FERRY) TO THE CITY OF HOT SPRINGS, ARKANSAS, AND M AKING SAM E A PART OF THE CITY OF HOT SPRINGS AND ASSIGNING SAM E TO DISTRICT,” was taken from the agenda for consideration. A motion was made by Director Edwards, duly seconded by Director Daniel, 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 s econded by Director M aruthur, that the ordinance be passed as read; and upon roll call, the followingvoted “aye”: Directors M aruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. Board of Directors M eeting 6 July 5, 2005 at 7:00 P.M . 18 Proposed Ordinance No. O-05-57 A n ordinance entitled, “AN ORDINANCE WAIVING THE REQUIREM ENT OF COMPETITIVE BIDDING FOR THE PROVISION OF COM M UNITY 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 Weatherford, 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 s econded by Director Jones, that the ordinance be passed as read; and upon roll call, the followingvoted “aye”: Directors M aruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. OTHER BUS INES S 19 Board of Directors Items Director Edwards expressed appreciation to Director Tom Daniel for the excellent fireworks display. Director Jones announced that Langston School is holding its school reunion on Thursday, Friday and Saturday. She urged citizens from District 2 to apply to the Beautification Commission. Director Maruthur read a statement regarding new, elderly and handicapped affordable rental housingdevelopment for Park Avenue. The CDBG Administrator Nelson Self is providing technical assistance for a District 1 property owner and a major financial institution in support of the potential s even-unit new affordable rental housing development that will be located in the Park Avenue CDBG target area. Working in tandem with PACA and Director M aruthur, this undertaking will y ield $400,000+ in quality property reinvestment and expand badly needed rental housing opportunities for elderly and handicapped households. She thanked M r. Self for his ongoing efforts through the CDBG program and now with the private development community. She reminded citizens if their lights are out, they may call 1-800-ENTERG. There is a metal ID tag on the light pole, which will start with SL plus four digits, and Entergy will take care of it in a timely fashion. 20 City Manager’s Report Board of Directors M eeting 7 July 5, 2005 at 7:00 P.M .  City M anager Kent M yers gave the following report: 1. H e reported there are improvements in the audio and visual effects in the Board Chambers. Those individuals working on the system are still fine tuning the system, and there will be more improvements at the next Board M eeting. He recognized those who have worked installing the equipment - M r. Harvey Oxner from Resort Cable; and M r. Allen Hendrix and M r. Lee Hadlock, who have been working closely with M s. Terry Payne, Public Information Officer; and the Computer Services staff. 2. He had planned to announce a burn ban today; but due to the rain tonight, that may be delay ed. The Utilities Department has been concerned the last couple of weeks with a water demand. By the end of this week, the City was expecting to announce some voluntary water conservation but is going to delay that for at least several weeks. 3. On the Consent Agenda, the Board approved the demolition of 13 structures that had been previously condemned at a total cost of $31,000. Also on the Consent Agenda, the CDBG Program is becoming widely known as a success story headed by M r. Nelson Self. The Board approved the allocation of architectural fees for the ARC of Arkansas project to renovate the historic high school utilizing CDBG money. The high sc Board of Directors M eeting 8 July 5, 2005 at 7:00 P.M . insurance funds primarily due to the fact that there have been some large claims over the last 12 months. There were about 15 large claims exceeding the reinsurance level, and the City is looking at a 10 to 15 percent increase in health insurance. He pointed out there has not been an increase for the last 2½ years; therefore, the City needs to fund some more of the health insurance costs in its trust fund. He noted there have been several major cancer patients and heart patients and with those large claims and the City being self-funded, they begin to impact the program when there are six or eight of them within a short period of time. M ayor Bush stated he has had an occasion over the last several weeks to work with some of the City employees and expressed appreciation for their job performance. 21 ADJOURNMENT There being no further business to come before the Board, the meeting adjourned at 7:35 p.m., to meet again on M onday, July 18, 2005, at 7:00 p.m. ATTEST: _____________________ APPROVED:__________________ Lance Hudnell, City Clerk M ike Bush, M ayor Board of Directors M eeting 9 July 5, 2005 at 7:00 P.M .