Board of Directors

MINUTES BOARD OF DIRECTORS MEETING DECEMBER 19, 2005, AT 7:00 P.M. The regular meeting of the Board of Directors was held on Monday, December 19, 2005, at 7:00 p.m., Board Chambers, City Hall, with Mayor Mike Bush presiding. The invocation was given by Ms. Cheryl Batts, 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 Maruthur, Elaine Jones, Steve Smith, Carroll Weatherford, Bill Edwards, Tom Daniel, and Mike Bush, total 7. 2 Approval of Agenda A motion was made by Director Edwards, duly seconded by Director Smith, that the agenda be approved; and upon voice vote, the motion unanimously carried. 3 Approval of Minutes of December 5, 2005 Board Meeting A motion was made by Director Daniel, duly seconded by Director Edwards, that the minutes of the December 5, 2005 Board Meeting be approved; and upon voice vote, the motion unanimously carried. 4 Recognition of Guests City Manager Kent Myers reported that earlier tonight, the City held an open house, and Mr. Dennis Brunson, pretreatment coordinator in the Wastewater Department, and his family provided some of the entertainment. Mr. Brunson introduced his children: Brittany (clarinet), Asher (saxophone), Ashford (trumpet), Dennis, Jr. ( trombone), Nathan ( tambourine) and Naomi, who will be singing “Away in a Manager.”  Director Edwards recognized Ms. Jean Baker. CONSENT AGENDA The Consent Agenda consisted of the following: 5 Public Safety Report (December 7, 2005). 6 Board Meeting Schedule (January thru June 2006). 7 Proposed Resolution No. R-05-365 Approving Certain Bid Awards (a) Stator Rewind Pump Repair-Utilities [annual supply contract awarded to Lynn’s Electric Service]; (b) Structure Demolition - Code [awarded to Slaight in the amount of $14,693 and A.C.E.S. in the amount of $2,340]; (c) Roto Milling - Public Works [annual supply contract awarded to Midwest Asphalt Corporation]; (d) Plumbing Services - All Departments [annual supply contract awarded to Sheets Plumbing]; (e) Meter Boxes - Utilities [annual supply contract awarded to Consolidated Pipe]; (f) Fernco Pipe Couplings [annual supply contract awarded to Arkansas Water Products]; (g) Asbestos Services - Code and All Departments [annual supply contract awarded to A.C.E.S. Inc.]; (h) Fuses - Utilities [annual supply contract awarded to Treadway Electric]; and (I) Brass Fittings - Utilities [annual supply contract awarded to Hughes Supply]. 8 Proposed Resolution No. R-05-366 Accepting East Kaufman Road Sewer Association into the Hot Springs Municipal Wastewater System. 9 Proposed Resolution No. R-05-367 Awarding a Contract to Affiliated Engineers, Inc. for Engineering Services Related to Updating the Environmental Assessment of the Water Withdrawal from Lake Hamilton. 10 Proposed Resolution No. R-05-368 Awarding a Contract to Heller Co., Inc. for Construction of a Fishing Pier at Entergy Park. 11 Proposed Resolution No. R-05-369 Awarding a Contract to Hill and Cox Construction for Construction of North Loop Accessible Trail at Entergy Park. 2 12 Proposed Resolution No. R-05-370 Adopting the National Incident Management System (NIMS) Established by the United States Department of Homeland Security for all Emergency Response by all Departments and Agencies of the City of Hot Springs, Arkansas. 13 Proposed Resolution No. R-05-371 Appointing Anthony Taylor to the Central Business Improvement District No. 2 Board of Commissioners. 14 Proposed Resolution No. R-05-372 Extending an Agreement with Guardian Life Insurance Company of America for Employee Group Life and AD&D Insurance. 15 Proposed Resolution No. R-05-373 Extending an Agreement with WellCorp, LLC for Wellness and Disease Management Services. 16 Proposed Resolution No. R-05-374 Extending an Agreement with Delta Dental Plan of Arkansas, Inc. for Group Dental Insurance. 17 Proposed Resolution No. R-05-375 Extending an Agreement with Choicepoint Services, Inc. for the Provision of Drug and Alcohol Testing Services. 18 Proposed Resolution No. R-05-376 Expressing the Willingness of the City of Hot Springs, Arkansas, to Utilize Federal-Aid High Priority Project Funds. 19 Proposed Resolution No. R-05-377 Approving Addendum No. 1 to the Agreement for Solid Waste Collection Services with All States Sanitation. 20 Proposed Resolution No. R-05-378 Authorizing the Mayor to Execute an Agreement with Sandra Taylor Smith to Create Design Review Guidelines for the Pleasant Street Historic District. 21 Proposed Resolution No. R-05-379 Approving Addendum No. 1 to the Agreement for Consulting Services (Trails Coordinator) with Ken Freeman. 3 22 Proposed Resolution No. R-05-380 Authorizing the Filing of an Application for a Growth Award and Tree City USA Recertification by the National Arbor Day Foundation. A motion was made by Director Jones, duly seconded by Director Smith, that the Consent Agenda be approved; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. PUBLIC HEARING 23 Public Hearing on Request to Vacate a Portion of Purity Alley This being the time and date set for a public hearing on the request to vacate a portion of Purity Alley, Mayor Bush declared the public hearing open. Mr. Bill Beck, owner of Purity Barbeque, 1000 Malvern Avenue, stated that he has Lots 10, 12, 13, 14, 15 and one-half of Lot 16 where the Purity Alley comes up; and he and his customers use the back alley. He said it will cause a hardship on his deliveries and customers getting in and out of his business. City Manager Kent Myers pointed out that the staff report indicates that one of the reasons this is recommended for closure is because he still has a through loop. He added if he starts on Gaines, he can loop down the alley and down Barbeque Alley. He asked if he had traffic that comes off Lemons Street accessing his business at the present time, and Mr. Beck replied that he did. Director Edwards questioned what part of Purity Alley is his business, and Mr. Beck replied that Purity Barbeque sits on Lot 13. He said that the petitioner is welcome to come through his side anytime. Mr. Gordon Stickney, 1419 Shady Grove Road, speaking as a customer, stated anytime he goes to Purity Barbeque, he uses Shady Grove Road and comes in the back way. Mr. Gerald Michau, 220 Panama Street, stated that the address for the church is 1024 Malvern Avenue; and the church does have a need for the alley due to the need to expand for more two more classrooms, a nursery and an office. He said they own all the way over to Lemons Street, and the alley is there. However, they come out the back door to get to their parking lot and step out into an alley. He added that very seldom has he seen anyone use that portion of the alley. Also, in the four years he has been there, he has not seen 20 vehicles pass through there and has never seen a delivery truck. He stated when people come in off Gaines from the Shady Grove Road area, 4 the Barbeque Alley turns behind the Purity Barbeque; and he has noticed a few times people taking that route. He noted that Long Hua Xu is open for business and has part of the building rented. He asked that the Board consider vacating that portion of Purity Alley in order to give them room to grow. Director Daniel asked if his intent would be to build a permanent structure on that land should the alley be closed, and Mr. Michau replied that it would. He added that Lemons Street comes down, curves, and goes back out to Gaines. They own all of that including the yellow house all the way down to the other end of Lemons Street. Director Daniel questioned if their parking lot is paved, and Mr. Michau replied that it is not at the present time. However, they have a permit from the City to pave it but would like to build prior to paving it. Director Maruthur questioned the denomination, and Mr. Michau replied that they are nondenominational. Until last year, they were the only deaf church in the State of Arkansas. Director Smith asked if he could access their lots off of Lemons Street, and Mr. Michau stated that they could. He added they are using Lot 19 next to the alley for parking. Director Smith asked if they are using it now, and Mr. Michau said they are using the one next to the alley for parking. Deputy City Manager Lance Hudnell explained that the building is built on the property line. Therefore, if they do any expansion, it will be into the alley. City Manager Kent Myers asked if he would be interested in relocating that alley a couple of hundred feet down Lemons Street in order to accommodate their plans and meet Mr. Beck’s needs. Mr. Michau replied that their church plans are to build all the way around in the area and would not be interested in that option. City Attorney David White questioned what legal authority the City has to vacate it if the alley is still in active use. Deputy City Manager Lance Hudnell explained that it comes under Arkansas Statutes Annotated §14-54-104, which states the Board has authority to vacate streets, alleys, right-of-ways, etc. He pointed out it is not the normal §14-54-301, which is the procedure to follow if it has not been used in at least five years. Director Smith questioned if this is being used for sanitation trucks, and Deputy City Manager Lance Hudnell advised that staff sends a notice to all city departments asking if there are any objections from the departments and any of the utility companies. 5  Sanitation Director Bill Burrough advised they can service from Malvern into that parking lot. On that particular alley, he said it is an easier access into the back of the Purity Barbeque versus the Barbeque Alley side or that other strip on the other side going towards Gaines. If they have to access it or come back out as an egress from the Purity Barbeque, they would probably use that alley versus on the other end of Gaines. Director Daniel asked how he would service the church and the building next to it, and Mr. Burrough said he would have to review it. However, from looking at the map, they are probably using that section to pick up trash in the back of that alley from the church. He said that is probably based on the residential collection they are doing now. If they did something else, they would have to service it on the Lemons side. City Manager Kent Myers asked if Mr. Burrough’s men could negotiate the curve if the alley were closed, and Mr. Burrough said that he did not think they could service it from the Barbeque Alley side nor from the Gaines side because it has a steep incline. He noted they could service them if he had to from Lemons but would have a difficult time servicing Long Hua Xu if that is shut down. There being no further comments, the public hearing was declared closed. NEW BUSINESS 24 Proposed Ordinance No. O-05-105 An ordinance entitled, “AN ORDINANCE VACATING A PORTION OF PURITY ALLEY LOCATED IN ORDWAY’S SUBDIVISION,” 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 carried, with Director Weatherford voting “no.” 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 Maruthur, Jones, Edwards, and Bush, total 4. Voting “no”: Directors Smith, Weatherford, and Daniel, total 3; motion carried. Whereupon the ordinance was declared passed. 6 25 Proposed Resolution No. R-05-381 A resolution entitled, “A RESOLUTION APPROVING THE EXTENSION OF HOT SPRINGS MUNICIPAL WATER SERVICE AND WASTEWATER SERVICE TO 113 SOUTH LAKELAND POINT,” was taken from the agenda and read by title only. A motion was made by Director Edwards, duly seconded by Director Jones, that the resolution be adopted as read. Upon discussion, Mr. Don Cochran, Director of Utilities, stated this is across the lake from Garvan Woodland Gardens, which prompted the question of annexation. Mr. Bill Thomason, who is the property owner and developer, has changed his request from a water and wastewater extension to serve all three pieces of property to his present request, which is to have a meter set and set a grinder pump just to serve his lot. As a result of this, the water and wastewater extension will not be installed and will not extend down to the farthest point, which is across the lake from Garvan Woodland Gardens. He said he would recommend approving the water meter and the sewer service to Mr. Thomason’s lot without annexation because it is not in true line of sight of Garvan Woodland Gardens. Deputy City Manager Lance Hudnell commented that the resolution currently requires annexation so a motion is needed to delete that if the Board went with staff recommendation. Director Edwards questioned how many driving miles it is from the city limits, and Mr. Cochran advised that it is a little over a mile driving distance. Director Maruthur commented this one lot wants water and wastewater service but does not want to annex into the City. In the resolution, contingent to the approval would be annexation; but he does not want to come into the City. Mr. Cochran said that originally he was going to extend the water main and sewer main to all three lots. The farthest point of where he was extending the service was across the lake from Garvan Woodland Gardens. He is not planning to extend service to that lot now but only the service to his own lot and let the other property owners return to the Board requesting their own water and wastewater services at a later date. Deputy City Manager Lance Hudnell pointed out that the issue now is the line of sight and is hidden back in a bay where previously it was not. He stated that staff is not certain there is any longer line of sight, and the map has been changed from the original one. 7  Director Weatherford questioned where the water and wastewater is at the present time, and Mr. Cochran advised that it is in the street. Director Weatherford questioned why Mr. Thomason needs an extension if he is going to do only that one lot, and Mr. Cochran replied that he does not need the extension. He explained the only reason it was not removed from the agenda was due to the fact that the annexation issue was still open. Director Weatherford stressed that for the one lot, he has access to water and sewer. Deputy City Manager Lance Hudnell pointed out that the policy with regard to annexation includes not only extension but also the setting of a meter. He added that any connection, as well as an extension, can trigger annexation. A motion was made by Director Daniel, duly seconded by Director Maruthur, that the resolution be amended by deleting the phrase “subject to annexation”; and upon voice vote, the motion unanimously carried. Director Weatherford questioned why it is necessary to vote on the resolution for Mr. Thomason to have a water meter if the annexation issue has been deleted, and Mr. Cochran said that he did not believe the Board needs to vote on it. However, that is the Board’s discretion. A motion was made by Director Weatherford, duly seconded by Director Maruthur, that the resolution be removed from the agenda; and upon voice vote, the motion unanimously carried. 26 Proposed Resolution No. R-05-382 A resolution entitled, “A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE LEASE ADDENDUM NO. 3 WITH REEBAIRE AIRCRAFT (HANGAR A-3),” was taken from the agenda and read by title only. A motion was made by Director Daniel, duly seconded by Director Edwards, that the resolution be adopted as read. Upon discussion, Mr. George Downie, Airport Director, explained that Reebaire Aircraft is asking for Lease Addendum No. 3, which will defer their rental payments and a penalty invoice for Hangar No. 3 from June 2005 to December 31, 2005. The total amount of rental deferment, both grounds and hangar, is $48,477.84. He noted this is the same deferment that Reebaire requested after 911. 8  Director Maruthur stated that it is noted in the information submitted the City enjoys a benefit of $751,000 and questioned how much of this benefit is actually a debt owed by the City. Mr. Downie said he did not have the exact amount, but $188,000 a year is paid toward a low-interest loan and a bond. Director Maruthur asked if any of it is involved with those customers who are in bankruptcy, and Mr. Downie replied that all of Reebaire’s customers have filed bankruptcy, except for ASA, formerly owned by Delta and was sold to Sky West. Director Maruthur asked how much of the $751,000 is involved in that bankruptcy, and Mr. Downie replied there is none on the City’s part. He added there is approximately $900,000 owed to Reebaire by these airlines, and they are in bankruptcy. However, COMAIR is still a viable customer of Reebaire and the City; and they purchase fuel from the City. Director Maruthur questioned when the U. S. Inspector General was consulted, and Mr. Downie replied that it was in 1994. He added that the City was reprimanded for using funds that were directed toward restricted use, such as AIP Grants. In this case, it is a deferment of rental revenue, which the City will obtain later from Reebaire. Director Maruthur asked if the City is in a position to let allow them to defer the rent in a contract knowing they are in bankruptcy and then allowing them to continue until June. Mr. Downie stressed that Reebaire is not in the bankruptcy, but their customers are. Director Maruthur said her concern is since the federal government is involved, if the City would be liable if the contract were extended. She commented she is not willing to overlook all of this money they owe the City and continue allowing them to owe money in 2006 until June. She stated if the Board votes for this addendum, the City could be liable. Mr. Downie advised that he spoke to the FAA last week; and if the City defers it, does not forgive it, and as long as they agree to pay it back, there is no problem. Director Maruthur questioned what if they cannot pay it back, and Mr. Downie said the City would have to address that in June. Director Maruthur asked if this could be on a month-to-month basis instead of having a contract, and Mr. Downie advised there is a legal, binding contract at the present time. City Manager Kent Myers explained since this is tied to the debt service on those hangars, he does not believe the bonding agency would allow the City to amend the lease and go month-to- month because they want to be assured there is a long-term lease in order to pay the debt back on those hangars. 9  Mr. Dave Byerly, 413 Pauline, president of the Greater Hot Springs Chamber of Commerce, as well as president of the Garland County Economic Development Corporation, pointed out this involves 220 jobs they are trying to preserve in the community, which are difficult jobs to replace. If the Board chooses not to adopt this amendment, it runs the risk of jeopardizing the financial and the overall future of Reebaire. He said if Reebaire were not to exist today, the City is still liable for the payoff of the building; but there is not a tenant to replace it. This would not be a building that could easily be filled with a tenant. Director Weatherford commented that he made the statement this hangar could not easily be rented to anyone else; however, in previous conversations with Mr. Downie, he said it could be rented without any problems. Mr. Downie explained that he could most likely lease Hangar A-3. Mr. Byerly said that he was making reference to Hangar A-14, which is built for more special purpose and would be more difficult. He said if Mr. Downie said he could rent the building tomorrow, he would defer to his expertise. City Manager Kent Myers noted that Hangar A-3 is leaseable, but Hangar A-14 would be difficult to lease because of the configuration. Director Maruthur questioned what action the Chamber of Commerce plans to take if in June, Reebaire is unable to pay their rent from January to June. Mr. Byerly replied if Reebaire is not there, the Chamber of Commerce has a long history of working with the City to find tenants. He said it becomes a building in the City’s inventory for which they will try to market. Director Maruthur questioned the risk the City would be taking between January and June, and Mr. Byerly replied they are proposing that on January 1, Reebaire will pay their rent for January on this building. The rent that would be at risk is in June and would be rent they have not paid in the last several months, which is rent the City has not collected. However, it is debt service the City has already covered. Mr. Danny Threlkeld, Mena, Arkansas, said he is an attorney representing Reebaire. However, he is not present as an attorney tonight but to provide background information on the company. He stated Reebaire is the largest independent, overhaul facility in North America and employees 250 people of which 220 are in Hot Springs. The annual payroll is in excess of $6 million, and the average wage is $17 an hour. He said Reebaire is a viable company; and during 911, there was a large amount of money that went out to the airlines for help. However, Reebaire did not receive any money. He said they are asking to defer the payment on this. He stated with regard to the hangars, Reebaire is going to bring the large hangar current in March; and the remainder of them 10 will be brought current at the present time. He stated when it settles out in June, they will have a better idea of how much they can pay a month toward the arrearage. He advised that the Airport Commission and Mr. Downie had access to their records and opened up their books in Mena. He said that he understood there will be a request to table this resolution and requested that the Board approve the resolution tonight so they can get some certainty for Reebaire and the employees. He stated that starting in March, they will have the large hangar current and work to pay it back. Director Maruthur asked if he knows how many have filed bankruptcy and where Reebaire is in the priority line, and Mr. Threlkeld replied that it has yet to be determined. He noted they are looking at it as if they will not receive any money. If they do receive any money, they can apply it to some of the debts they owe. Director Maruthur asked what they will do if they do not receive any money; and Mr. Threlkeld stated once they file bankruptcy, it is like starting all over again. He advised that the shops are full, and they are getting paid. However, it is the $900,000 that they are having to absorb. He said that is the pre-petition money they had out that was owed to Reebaire at the time they filed bankruptcy. Director Maruthur asked if they had a problem with the records to be reviewed, and Mr. Threlkeld responded that their books are open at anytime. He added they will have a better idea in a couple of months; and to defer it or table this issue, they will have this under control. Director Maruthur asked if 30 days would be acceptable to review their records, and Mr. Threlkeld said that the City is welcome to their records anytime. He commented with regard to the money owed Reebaire from the bankruptcy, it may take some time before they know what they are going to receive. He noted the bankruptcies are out of Delaware and New York. City Manager Kent Myers stated that Mr. Downie and Finance Director Dorethea Yates have spent several days looking at their books and will be in a position to answer any questions. Director Maruthur commented there is a request for these records to be reviewed by someone else. Mr. Threlkeld stated their books are open, and anyone from the City can review them anytime. He will be giving the City information as soon as they receive it, and it comes through him. Mr. George Reeb, owner of Reebaire, stated they may be several hundred thousand dollars in arrears. However, in the past five years, they have contributed through their employees $25 to $30 million into the community. He stated that 99.9 percent of all the money that comes into Reebaire is outside money, and there is nothing from the State of Arkansas. Everything they generate into Hot Springs and the State is all new money from other states and some is foreign money from other countries that have airplanes. He stressed they are here because someone else failed in business, not Reebaire. He said their only request is for assistance, and they are not asking 11 for any money. He stated their lease on Hangar A-14 is 20 years and Hangar A-3 is every five years. He said it was his thinking the City could defer the lease payments for one year and put them on the back end. He said they would start to be current on A-3 starting January, Hangar A-14 starting in March, and Hangar A-5 is current. Director Maruthur questioned if he is asking the City to defer the $900,000, and Mr. Reeb said he is only asking the City to defer the lease payments. Director Maruthur asked how much he owed in rent to the City, and City Manager Kent Myers advised that on Hangar A-3, the total amount owed is $45,726 through December. Director Maruthur asked if he is asking the City to defer his payments, and Mr. Reeb replied that he was. Director Maruthur said there is a request to the Board to defer the vote for 30 days and asked if he has a problem with that; and Mr. Reeb replied that he would not. A motion was made by Director Maruthur, duly seconded by Director Daniel, that this vote be tabled for 30 days since the Board Members do not have a full understanding of the material and there has been a request to review these materials by another party. Mr. Reeb stated they will allow only the City to review the records and are not allowing another party. Director Daniel questioned who has made the request to review the records, and City Manager Kent Myers stated a letter was distributed tonight from Attorney Brian Reis, with the Farrar Law Firm. The letter was addressed to Assistant City Attorney Brian Albright thanking him for the materials which Mr. Reis picked up this afternoon. He stated that it is a significant amount of material and has not had an opportunity to review it for the Board Meeting tonight. Mr. Reis asked that the Board consider tabling this matter for 30 days so he can review the materials and learn more about the manner in which Reebaire has corroborated the facts which they have presented to the City. At this time, Director Maruthur withdrew her motion and Director Daniel his second to table for 30 days. Mr. Brian Reis, 135 Section Line Road, said that he requested this be tabled because he wanted to know what provisions were made by the City in the event of failure of this tenant. He pointed out the City has incurred a substantial financial obligation from which there is no escape regardless of what happens to this business. Also, he wants to know whether or not there are guaranties of these leases or whether or not these leases were in any way collateralized. He said Mr. Albright prepared a number of materials for him which he picked up today and has not had an 12 opportunity to review. He would also like the opportunity to corroborate some of the factual statements that are made in the Board packet. He said there are some statements made that are public materials that can be easily corroborated and would also like to find out some information from city officials who have reviewed the books and records. He said that 30 days would be a good opportunity for Director Maruthur’s concerns to be addressed about whether or not this would jeopardize any of the funding the City receives for the Airport. He stated that he believes tabling it effectively gives Reebaire 30 days of free rent. He said that he would like an opportunity to review the materials he believes are important to whether or not the money of the City is being well spent or protected. Mayor Bush asked if he is speaking as a private citizen or if he is representing someone; and Mr. Reis replied that he represents Airborne Flying Service, which is a long-term tenant of the Airport and pays its rent every month on time. They are interested in this matter and are concerned about some of the statements in the Board packet which indicate that some tenants at the Airport might be looking for free rent. Mr. George Downie said that he spoke with the FAA last week, and they have no problem the way the City is handling this as long as the City receives its money. He pointed out the City will not know if it is going to receive its money until the meeting in June to review the financial situation of Reebaire. As long as it is in a legal documentation, which he has and if they do default, there are default clauses in the lease agreement; and there is a legal documentation backing that up. Director Weatherford asked what amount Reebaire has promised to pay the City on January 1, and Mr. Downie replied they start paying rent on Hangar A-3 (a total amount of ground rent and hangar rent - $6,636.57). City Manager Kent Myers pointed out that is not all the money the City is receiving from Reebaire; they also pay the City fuel costs. Mr. Downie added that the City also collects rent from Hangar A-5 in the amount of $1,867 a month; $1,900 a month in ramp fees on the Brazilia aircraft; $267 a month on a small hangar that they lease. In addition, COMAIR, ASA, and Independence Air for the Brazilias, and RJs purchase substantial amount of fuel each month. Total overall, the City is looking at $375,000 a year in revenues that it generates off Reebaire. City Manager Kent Myers stated that Reebaire is current on everything except for these two hangars (Hangar A-3 and Hangar A-14). Director Smith questioned the amount of the payment on Hangar A-14 and when it will start, and Mr. Downie stated that it will start March 1, for a total of $19,985.79 a month. 13  Director Maruthur said she preferred to table the resolution and allow Mr. Reis to review the records. City Attorney David White advised that the only records anyone, including Mr. Reis, is entitled to review is whatever public records the City has. He added the City does not have the authority to allow anyone to look at Reebaire’s book, bylaws, minutes, etc. Director Maruthur stressed she does not feel comfortable voting on an issue that she does not truly understand. She pointed out that the City had problems in 1994; therefore, she cannot vote on this issue at this time. Director Weatherford commented he is uncomfortable with the entire situation and mentioned there is not anything in the paperwork which says the City will get any money from Reebaire. He stated that the City is subsidizing them and pointed out if he does not pay his water bill, the City turns his water off. City Attorney David White explained that the Constitution forbids the City from subsidizing anyone. Director Weatherford questioned if this is not what the City is doing. City Attorney David White replied there are several ways of looking at contracts, addendums, etc. that may not necessarily offend the Constitution; but as a general rule, the Constitution clearly forbids the City from extending its good faith and credit to anyone for any purpose. Director Weatherford asked if that is not what the City is doing, and City Attorney David White replied that he is not familiar enough with what the contract does or does not stipulate to answer that. Director Maruthur said she is asking for it to be tabled because she does not know how many Board Members fully understand what is in here. Director Daniel pointed out that Mr. Downie had made the statement that the FAA does not have any problem with what the City is doing as long as it collects the money. He questioned the recourse if the City does not collect the money. Assistant City Attorney Brian Albright advised that over the next 30 days, the City could obtain a letter of clearance from the FAA to make sure what the City is doing is appropriate with them. He stated as far as the deferment on the lease, he does not think this is going to the extent of loaning money. As far as the legal aspect is concerned, he believes the City can make the deferment; but if the Board wants to use the 30 days to explore other avenues, such as personal guaranties in order to make sure the City is in a better position, perhaps that should be done. He clarified that Mr. Reis’s request does not have anything to do with the materials from Reebaire itself. He had made a request last Monday under Freedom of Information for city records. Mr. Downie 14 spent all week copying city records from minutes of advisory committee meetings, etc., which was supplied to Mr. Reis today. The letter from Mr. Reis that was distributed tonight came to his office today at 4:30 p.m. Mr. Reis stated that not only is the City subsidizing Reebaire by free rent, it is also continually responsible for that payment on those bonds, which is $8,000 a month. Also, according to the Lease Addendum included in the Board Packet, he said there is no reference to what will happen in June. Instead, it says they agree to meet in June, not that they agree to pay or begin paying. A motion was made by Director Maruthur, duly seconded by Director Weatherford, that the resolution be tabled until January 23, 2006; and upon roll call, the following voted “aye”: Directors Maruthur, Weatherford, Edwards, and Daniel, total 4. Voting “no”: Directors Smith, Jones, and Mayor Bush, total 3; motion carried to table until January 23, 2006. 27 Proposed Resolution No. R-05-383 A resolution entitled, “A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE LEASE ADDENDUM NO. 3 WITH REEBAIRE AIRCRAFT (HANGAR A-14),” was taken from the agenda and read by title only. A motion was made by Director Edwards, duly seconded by Director Jones, that the resolution be adopted as read. Upon discussion, Mr. Downie explained this is the same as the previous resolution except this rental amount is nearly $20,000 a month. Total deferment of this hangar would be $187,713.43. Director Smith said it is his understanding that Reebaire is in the process of hiring more people, and Mr. Threlkeld stated that is correct. Director Smith asked if they are hiring more people in hopes of getting more business, therefore, generating more revenue. Mr. Threlkeld replied there will be more revenue in the future. Part of the reason for these bankruptcies was more to do with unions and pensions plans and that will open up more work for Reebaire in the future because it will not have to be unionized labor. He stated they need more employees now, and the employees they have are A&P (air frame and power plant mechanics), which are high-paying jobs. He noted they are anticipating continuing to grow in light of these bankruptcies. 15  Mayor Bush asked if 911 had any effect on the bankruptcies, and Mr. Threlkeld said that 911 started it. He added there are issues with regard to the pensions, which is part of it, as well as high fuel costs. Director Smith asked if it would not make better business sense to take care of the rent as opposed to adding to the workforce, and Mr. Reeb said that 100 percent of their revenue is man- hours spent, which is employees. If they cut employees, they cut the man-hours. Director Smith said that he is not asking that he cut employees. Mr. Reeb explained without employees, they cannot build. He added they do manufacture some things, but mostly it is labor. Director Smith stated he is trying to find something specific within the next 90 or 120 days that will turn this around. He said it is also his understanding there is a debt of about $20,000 a month that will be eliminated fairly quickly, and Mr. Reeb said it should be within a couple of months. Director Smith stated if that were eliminated, it would be a specific improvement to their situation. Mr. Reeb commented that what they owe the City is only a portion of what they owe. He stated by taking $900,000 of their cashflow, the City is not the only one that they cannot pay. When 911 happened, they had no business but had all of the overhead. When they made the agreement to pay, they paid back all the money the City deferred for them in the first go-around. He explained that the problem they had was when they went from 170 employees to 60 employees, they had all of the same overhead. When they had to start paying it back, their lease payment went from about $19,000 to $26,000 a month. Just as they were hiring people back, which is their cashflow, their bills increased; but they were still able to make it. He explained when they started to bring employees back, the unemployment taxes were almost tripled because it has to be returned into the fund. He stated that on January 1, Hangar A-3 will be back on schedule; and starting in March, they begin paying on Hangar A-14. He commented that in June, they will discuss how much per month they start paying back after Reebaire and the City review the books and come up with something that is realistic. Director Smith asked if he or his attorneys have seen the bankruptcy filings and are they listed as creditors, and Mr. Reeb replied that they are. Director Smith asked if he is aware of any court dates or hearings scheduled in the next 90 days, and Mr. Reeb said that he was not. Director Smith asked in the course of his conversation over the last 30 to 90 days if he has had discussion on how things are progressing. Mr. Reeb replied that he has, and COMAIR alone was financially sound. They did not need to file bankruptcy; but once Delta did, which is the parent company, they forced every subsidiary to file bankruptcy. 16  Director Maruthur asked if this were to be tabled for 30 days, if it would affect his ability to pay his rent on the first, and Mr. Reeb said that it would not. He added that he does not understand why the Board wants to table it for 30 days since Reebaire is going to make the payment anyway on Hangar A-3. Director Daniel pointed out it is about the 220 jobs, and he does not want them to lose them. He said that he had a concern with a statement by Mr. Downie and wanted a clarification from the FAA. A motion was made by Director Maruthur, duly seconded by Director Weatherford, that the resolution be tabled until January 23, 2006; and upon roll call, the following voted “aye”: Directors Maruthur, Weatherford, Edwards, and Daniel, total 4. Voting “no:” Directors Jones, Smith, and Mayor Bush, total 3; motion carried to table until January 23, 2006. 28 Proposed Ordinance No. O-05-106 An ordinance entitled, “AN ORDINANCE AMENDING ORDINANCE NO. 4338 BY ADDING A FIRE SERVICE FEE FOR EMERGENCY MEDICAL ACTIVITIES CONDUCTED BY THE HOT SPRINGS FIRE DEPARTMENT; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Weatherford, 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 “Shall the ordinance be passed as read?” and upon motion of Director Weatherford, duly seconded by Director Jones, that the ordinance be passed as read; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 29 Proposed Ordinance No. O-05-107 An ordinance entitled, “AN ORDINANCE ACCEPTING HIGH MEADOW LOOP AS A PUBLIC STREET; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Weatherford, 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 “Shall the ordinance be passed as read?” and upon motion of Director Jones, duly 17 seconded by Director Edwards, that the ordinance be passed as read; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 30 Proposed Ordinance No. O-05-108 An ordinance entitled, “AN ORDINANCE WAIVING THE REQUIREMENTS OF COMPETITIVE BIDDING AND AUTHORIZING MAINTENANCE AGREEMENTS WITH IBM AND VENTURE SYSTEMSOURCE FOR CERTAIN COMPUTER HARDWARE AND SOFTWARE COMPONENTS AND SOFTWARE SUBSCRIPTIONS; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Weatherford, 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 “Shall the ordinance be passed as read?” and upon motion of Director Weatherford, duly seconded by Director Jones, that the ordinance be passed as read; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 31 Proposed Ordinance No. O-05-109 An ordinance entitled, “AN ORDINANCE ADOPTING THE HOT SPRINGS ELECTRICAL CODE, 2005 EDITION; REPEALING CERTAIN ORDINANCES; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Weatherford, duly seconded by Director 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 Weatherford, duly seconded by Director Maruthur, that the ordinance be passed as read. Upon discussion, Mr. Mike Scott, Chief Building Official, explained that the State has recently adopted the 2005 Electrical Code (NEC). Currently, the City is under the 2002 Edition. The State adopts it every three years and currently adopted the 2005 Edition; therefore, the City is just updating its code. 18  Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 31A Proposed Ordinance No. O-05-110 An ordinance entitled, “AN ORDINANCE ADOPTING THE 2004 ARKANSAS ENERGY CODE FOR NEW BUILDING CONSTRUCTION,” was taken from the agenda for consideration. A motion was made by Director Weatherford, duly seconded by Director 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 Weatherford, duly seconded by Director Smith, that the ordinance be passed as read. Upon discussion, Mr. Mike Scott, Chief Building Official, explained that the City is currently under the 1979 Edition. The State adopted the 2004 Edition a year ago and is just becoming current with the State. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 31B Proposed Ordinance No. O-05-111 An ordinance entitled, “AN ORDINANCE AMENDING THE HOT SPRINGS ANIMAL CONTROL CODE (ORDINANCE NO. 4940); AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Daniel, 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 Weatherford, duly seconded by Director Maruthur, that the ordinance be passed as read; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 19 31C Proposed Ordinance No. O-05-112 An ordinance entitled, “AN ORDINANCE AMENDING THE CONDITIONAL USE PERMIT APPLICATION NOTICE REQUIREMENTS IN THE CITY OF HOT SPRINGS ZONING CODE (ORDINANCE NO. 5158), AS AMENDED; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Weatherford, 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 “Shall the ordinance be passed as read?” and upon motion of Director Jones, duly seconded by Director Weatherford, that the ordinance be passed as read; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 31D Proposed Resolution No. R-05-384 A resolution entitled, “A RESOLUTION ADOPTING A NEW LAND USE PLANNING AND ZONING APPLICATION FEE SCHEDULE,” was taken from the agenda and read by title only. A motion was made by Director Weatherford, duly seconded by Director Edwards, that the resolution be adopted as read; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the resolution was declared passed. 31E Proposed Resolution No. R-05-385 A resolution entitled, “A RESOLUTION ADOPTING PERMIT AND INSPECTION FEE SCHEDULES FOR VARIOUS BUILDING AND CONSTRUCTION CODES,” was taken from the agenda and read by title only. A motion was made by Director Weatherford, duly seconded by Director Daniel, that the resolution be adopted as read; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the resolution was declared adopted. 20 31F Proposed Ordinance No. O-05-113 An ordinance entitled, “AN ORDINANCE WAIVING THE REQUIREMENTS OF COMPETITIVE BIDDING FOR THE PROCUREMENT OF UTILITY BILLING SOFTWARE AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Daniel, 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 seconded by Director Weatherford, that the ordinance be passed as read; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 31G Proposed Ordinance No. O-05-114 An ordinance entitled, “AN ORDINANCE ADOPTING A BUDGET FOR THE CITY OF HOT SPRINGS, ARKANSAS, FOR THE YEAR 2006; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Daniel, duly seconded by Director Smith, 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 Daniel, duly seconded by Director Maruthur, that the ordinance be passed as read. Upon discussion, City Manager Kent Myers noted that over the last week, staff has identified two mistakes that were made to the budget. It does not require action tonight but will have to return to the Board in January and correct these mistakes: (1) when Finance was entering the City Attorney’s budget, they budgeted $360 for telephone expense and should have been $3,600; and (2) when staff budgeted for agencies, it budgeted $100,000 for GCEDC and has added that to the budget but failed to pick up $12,500 for the Retirement Relocation Program and the $2,500 for the Chamber Business Development. He noted there is no need to delay action tonight, and all other changes that the Board requested are included in the budget. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Smith, Weatherford, Edwards, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 21  OTHER BUSINESS 32 Board of Directors Items Director Jones announced that the Webb Community Center Board of Directors has planned an informative, educational, and fun weekend for the Dr. Martin Luther King, Jr. Holiday. All events are free and open to the public. On Saturday, January 14, at 2:00 p.m., the parade will begin at Whittington to Oak and Orange Streets. Additional parade entries from organizations, churches, and social clubs are welcome. At 7:30 p.m., a youth basketball game will be held at the Youth Center. On Monday, January 16, 11:00 a.m., there will be an award assembly with several vocalists and musicians; and awards for best parade entries will be handed out. Guest speaker for the evening will be Ms. Calhoun, a native of Hot Springs and currently living in Atlanta, Georgia, where she is employed as a director of Human Services for Turner Enterprises. For any additional information, citizens may call the Webb Community Center at 623-7491. Director Jones reported that on December 8 through 10 she attended the National League of Cities 82nd Annual Congress of Cities. The first interesting event was a tour of the city’s affordable housing. Some of these homes were for municipal employees, and they built affordable homes for all employees who made under $50,000. She also attended a luncheon with Nickki Giovani, a professor from Virginia Tech, and went to a session which stressed having concern for the community. She used the National Baptist Hotel as an example pointing out it would not be just her responsibility to check on that but is her responsibility because she is representing that district. In another tour, it showed the CDBG work that was being done in the City. They were working with the youth and had a Mayor’s Youth Council with about 50 to 75 youth present at this session. Their number one problem is that do not have any place for the youth to go, and she informed them of the Youth Center and Bill Clinton Cultural Center. There were also two homes built while she was there, which were sent to Lake Charles, Louisiana, on flatbed trucks for Habitat for Humanity; and the Mayor from Little Rock helped build one. There was also a session with the Parks and Recreation Department where they were recruiting youth who were overweight, and the only way they could attend this after-school program was they had to be able to walk trails they had built. They had received a grant for $3.1 million for three years and was more of an exercise program than an after-school program. The session ended with the Mayor of New Orleans, Louisiana, and FEMA. Director Edwards thanked the Hot Springs Women of Prayer for attending every Board Meeting this year. He also thanked Ms. Melinda Gassaway, executive editor of The Sentinel-Record for recognizing him in the Claus Connection. 22  Mayor Bush expressed appreciation to the Hot Springs Women of Prayer and for their cards sent to the Directors. Director Maruthur commended those who were responsible for the Christmas dinner that the Park Avenue Association held this Saturday and thanked all of the Directors for serving the community. She pointed out in Director Jones’ report, it is very obvious that she understands the importance of the neighborhoods. Director Weatherford extended gratitude to all of the department heads and employees for their hard work and good job they have done this year. He gave a special recognition to Public Works Director Steve Mallett and his departments (Street, Traffic and Animal Services) for the work they did in CBID No. 3, and during the time of Hurricane Katrina, to Sanitation Director Bill Burroughs for the implementation of the new container system, to Deputy City Manager Lance Hudnell in his temporary position as Planning Director, to the Planning and Code Department, and to all the Board Members. Mayor Bush announced that Director Tom Daniel is the Assistant Mayor for the term January through June 2006. Director Jones announced this is the last meeting with City Attorney David White. Director Weatherford welcomed new City Attorney Brian Albright. City Attorney David White stated that Ms. Cecilia Dyer will be moving in the office with Mr. Albright. 33 City Manager’s Report City Manager Kent Myers gave the following report: 1. On the Consent Agenda, the Board approved two new contracts for Entergy Park (fishing pier and new accessible trail). 2. The Board appointed Anthony Taylor to CBID No. 2 Board of Commissioners. 3. The Certificate of Occupancy was issued this afternoon for one of the units at National Baptist Hotel. This is a permit that was issued a couple of months ago, and the final inspection was this afternoon. 23  4. The Sanitation Department has been working seven days a week over the last couple of weeks to get all the new containers out. He received a phone call today from a lady who was very complimentary about the residential contractor services and their employees. She was concerned with the City taking over that service that some of the employees may not be retained. He announced that the City has hired 20 employees to run the City residential service with improved benefits, health insurance, retirement, etc. All 20 of those employees came over from the contractor. However, some of the contractor’s employees chose not to work for the City. 34 ADJOURNMENT There being no further business to come before the Board, the meeting adjourned at 9:05 p.m., to meet again on Monday, January 9, 2006, at 7:00 p.m. ATTEST: _____________________ APPROVED:__________________ Lance Hudnell, City Clerk Mike Bush, Mayor 24