Board of Directors

MINUTES BOARD OF DIRECTORS MEETING DECEMBER 21, 2010, AT 7:00 P.M. The regular meeting of the Board of Directors was held on Tuesday, December 21, 2010, at 7:00 p.m., Board Chambers, City Hall, with Mayor Mike Bush presiding. The invocation was given by Mr. Raymond Wright, 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, Cynthia Keheley, Pat McCabe, Rick Ramick, Tom Daniel, and Mike Bush, total 7. 2 Approval of Agenda A motion was made by Director Keheley, duly seconded by Director Maruthur, that the agenda be approved; and upon voice vote, the motion unanimously carried. 3 Approval of Minutes of December 7, 2010 Board Meeting A motion was made by Director Jones, duly seconded by Director Ramick, that the minutes of the December 7, 2010 Board Meeting be approved. Upon discussion, City Attorney Brian Albright advised there is one revision to the minutes which has been distributed and related to the issue with the sidewalks in front of the Orr dealership. He stated there were some comments that were omitted which needed to be included because it was relevant to the criteria for approval of the variance. A motion was then made by Director Jones, duly seconded by Director Ramick, that the minutes be approved, as submitted and revised; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Keheley, McCabe, Ramick, Daniel, and Bush, total 7; motion unanimously carried. 4 Recognition of Guests At this time, there was a Powerpoint presentation depicting a special appreciation to Mayor Mike Bush and Director Rick Ramick for their years in office. City Manager Lance Hudnell presented a clock to Mayor Bush commemorating his ten years of service as Mayor. He then presented a clock to Director Ramick commemorating his years of service to the City. He read a letter from former mayor of Hanamaki, Japan, Mayor Watanabe, expressing his appreciation to Mayor Bush for his dedication to the Sister City Program with Hanamaki, Japan. 5 Board of Directors Announcements Mayor Bush announced that Director Cynthia Keheley will be the Assistant Mayor for the period January 1, 2011 through June 30, 2011. Director Keheley expressed appreciation to the Hot Springs Women of Prayer for their dedication and prayers this past year and for their Christmas Cards. Director McCabe stated he appreciated the Christmas Cards from the Hot Springs Women of Prayer and read each one. He mentioned that last Friday night, he, along with a number of Rotarians, rang the bells for the Salvation Army outside of Wal-Mart on Central Avenue. He noted that he was on the retail side, and Director Keheley was on the food side. He said he was appreciative of those who contributed whatever amount they could, and the youth of community also gave and understand the role and purpose of giving. He stated this will not be the last time to do this because it was an enjoyable experience. During the Holiday Season, he asked for prayers of the servicemen and also for the firefighters and policemen in Hot Springs and across the country. Director Maruthur thanked the people who worked to make the Park Avenue Community Association Christmas party a success. She said it was held last evening, and there were several merchants in the Park Avenue area that donated services. She also expressed appreciation to the Hot Springs Women of Prayer for their cards and blessings. Board of Directors Meeting 2 December 21, 2010 at 7:00 P.M.  Director Ramick expressed appreciation to Ms. Margaret Parris, Executive Secretary; Ms. Janet Heath, Deputy City Clerk; Ms. Terry Payne, Public Information Director; and Ms. Minnie Lenox, Human Resources Director, for the reception before the meeting tonight that was prepared for the Directors. He stressed that no City funds were used. CONSENT AGENDA The Consent Agenda consisted of the following: 6 Board of Directors Meeting Schedule (January through June 2011). 7 Public Safety Committee Report (December 7, 2010). 8 Proposed Resolution No. R-10-265 Authorizing the Mayor to Execute Addendum No. 3 to the Contract with Delta Airport Consultants for Runway 13/31 Rehabilitation, Phase III. 9 Proposed Resolution No. R–10-266 Approving an Agreement with AVFUEL Corporation for the Provision of Aviation Fuels at the Hot Springs Municipal Airport. 10 Proposed Resolution No. R-10-267 Awarding a Contract and Bid Award to Goslee Construction for Construction of an Addition to Fire Station no. 4; and Repealing Resolution No. 7502. 11 Proposed Resolution No. R-10-268 Designating a “Free-Ride Day” for Hot Springs Intracity Transit. 12 Proposed Resolution No. R-10-269 Authorizing the Filing of a Grant Application with the Federal Transit Administration, United States Department of Transportation, for Federal Transportation Assistance Authorized by 49 U.S.C. Board of Directors Meeting 3 December 21, 2010 at 7:00 P.M.  Chapter 53, Title 23, United States Code, and Other Federal Statutes Administered by the Federal Transit Administration for Hot Springs Intracity Transit. 13 Proposed Resolution No. R-10-270 Extending a Contract for Consulting Services with Ken Freeman (Trails Coordinator). 14 Proposed Resolution No. R-10-271 Accepting a General Improvement Fund Grant from West Central Arkansas Planning and Development District. 15 Proposed Resolution No. R-10-272 Authorizing an Agreement Between Garland County and the City of Hot Springs for Animal Control Services. 16 Proposed Resolution No. R-10-273 Authorizing a Contract for Services with the Garland County Economic Development Corporation (GCEDC) for Retirement Relocation Program ($12,500). 17 Proposed Resolution No. R-10-274 Authorizing a Contact for Services with the Garland County Economic Development Corporation (GCEDC) for Economic and Business Development ($2,500). A motion was made by Director Daniel, duly seconded by Director Ramick, that the Consent Agenda be approved. Upon discussion, Mr. Brian White, 360 Lakeland Drive, spoke against Item No.16 (Proposed Resolution No. R-10-273 Authorizing a Contract for Services with the Garland County Economic Development Corporation [GCEDC] for Retirement Relocation Program [$12,500]). He suggested this item and Item No. 17 (Proposed Resolution No. R-10-274 Authorizing a Contact for Services with the Garland County Economic Development Corporation [GCEDC] for Economic and Business Development [$2,500]) be moved to New Business since the first item of New Business is the ordinance authorizing contract for services with GCEDC; and all three of these items were addressed together in the Economic Development Corporation’s request for funding for 2011. He pointed out the contracts, with the exception of the dollar amount, are identical. Board of Directors Meeting 4 December 21, 2010 at 7:00 P.M.  Mr. Bob Driggers, #3 Stonegate, stated these three items involve giving money to the same organization and to have two of the items on the Consent Agenda and one in the New Business is not logical. He said Item No. 18 (An Ordinance Authorizing a Contract for Services with Garland County Economic Development Corporation and Waiving Competitive Bidding) is the item he would like to address but asked that they all be considered under New Business. Mr. George Pritchett, 210 Carl Drive, voiced his objection to spending taxpayers’ money to benefit realtors who sell ads in the relocation guide and said it could be completely self-supporting. He stated there are nearly 500 realtors in Garland County and adding all the realtors over the state would be spending hundreds of thousands of dollars in advertising. He questioned why the City, in the time of budget crisis, continues to spend $13,500 to subsidize the Chamber of Commerce, who lobbied to get all of their money. A motion was made by Director Maruthur, duly seconded by Director Keheley, to move Item No. 16 (Proposed Resolution No. R-10-273 Authorizing a Contract for Services with the Garland County Economic Development Corporation [GCEDC] for Retirement Relocation Program [$12,500]) and Item No. 17 (Proposed Resolution No. R-10-274 Authorizing a Contact for Services with the Garland County Economic Development Corporation [GCEDC] for Economic and Business Development [$2,500]) to New Business; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Keheley, McCabe, Ramick, Daniel, and Bush, total 7; motion unanimously carried. Mayor Bush then called for a vote on the motion to approve the Consent Agenda, as amended; and upon roll call, the following voted “aye:” Directors Maruthur, Jones, Keheley, McCabe, Ramick, Daniel, and Bush, total 7; motion unanimously carried. NEW BUSINESS 16 Proposed Resolution No. R-10-273 A resolution entitled, “A RESOLUTION AUTHORIZING A CONTRACT FOR SERVICES WITH THE GARLAND COUNTY ECONOMIC DEVELOPMENT CORPORATION (GCEDC) FOR RETIREMENT RELOCATION PROGRAM ($12,500),” was taken from the agenda and read by title only. Board of Directors Meeting 5 December 21, 2010 at 7:00 P.M.  A motion was made by Director Jones, duly seconded by Director Ramick, that the resolution be adopted as read. Upon discussion, Director Keheley said she has learned that this appropriation is for more than the relocation guide and includes a variety of advertising venues that the Chamber of Commerce uses nationally. She noted that a list was received at the last meeting from Mr. Todd Woerpel, chairman of the board of the Chamber of Commerce, and expressed appreciation to him for making the Board aware there is much more than just a printed book. Therefore, she will be supporting it. Director Maruthur stated she did not believe the City could afford it. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye:” Directors Jones, Keheley, McCabe, Ramick, Daniel, and Bush, total 6. Voting “no”: Director Maruthur; motion carried. Whereupon the resolution was declared adopted. 17 Proposed Resolution No. R-10-274 A resolution entitled, “A RESOLUTION AUTHORIZING A CONTRACT FOR SERVICES WITH THE GARLAND COUNTY ECONOMIC DEVELOPMENT CORPORATION (GCEDC) FOR ECONOMIC AND BUSINESS DEVELOPMENT ($2,500),” was taken from the agenda and read by title only. A motion was made by Director Jones, duly seconded by Director Keheley, that the resolution be adopted as read. Upon discussion, Director Maruthur stated because of the City’s economic situation, she did not believe the City could afford it. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye:” Directors Jones, Keheley, McCabe, Ramick, Daniel, and Bush, total 6. Voting “no”: Director Maruthur; motion carried. Whereupon the resolution was declared adopted. 18 Proposed Ordinance No. O-10-57 Board of Directors Meeting 6 December 21, 2010 at 7:00 P.M.  An ordinance entitled, “AN ORDINANCE AUTHORIZING A CONTRACT FOR SERVICES WITH GARLAND COUNTY ECONOMIC DEVELOPMENT CORPORATION; WAIVING COMPETITIVE BIDDING; AND OTHER MATTERS RELATED THERETO,” was taken from the agenda for consideration. A motion was made by Director Daniel, duly seconded by Director Ramick, 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 Keheley, duly seconded by Director Jones, that the ordinance be passed as read. Upon discussion, Mr. Brian White, 360 Lakeland Drive, spoke against the ordinance pointing out giving to this group is redundant. He said that he has read all the material about the GCEDC, and the Mission Statement is virtually identical to the Chamber of Commerce. He pointed out the Advertising and Promotion Commission advertises Hot Springs, as well as the Chamber of Commerce; and now GCEDC is doing the same thing. He mentioned that every city he has lived and worked in, a new business is brought in by the Mayor, a representative of the Chamber, or a person such as Director McCabe. He mentioned a radio program where Director McCabe talked about a business that he recruited as a business leader, and that is the way it should be done. He said he reviewed the year-end reports from GCEDC and saw what they said they did, but he did not see anything that shows where the money went. He also looked in the 2011 budget but did not see an appropriation for it. He stated if money is going to the Chamber and is run by one person, and money going to GCEDC that is run by the same person, during elections, that is called “double-dipping.” He said the City cannot afford this and could purchase police radios and be used in the Fire Department budget. He stressed it should be Director McCabe recruiting businesses because he has previously brought jobs into the City and should also be the Mayor, City Attorney, the City Directors or the Chamber of Commerce. Mr. Bob Driggers, #3 Stonegate, said he thought GCEDC was doing an admirable job, but individuals continue asking questions. He mentioned an article in the Arkansas Democrat-Gazette on April 4, entitled,“Chambers are Paid to Recruit Business but do They Deliver?” He stated it is a very insightful article, but apparently they do not deliver. Regarding the annual report of GCEDC, he pointed out that it consists of six pages (title page, table of contents, board of directors page, two pages of Board of Directors Meeting 7 December 21, 2010 at 7:00 P.M. vision, program and initiatives, and one page that mentions some of the numbers; and the numbers actually used per capita income from 2007, which is available to anyone). He noted that Mayor Bush and City Manager Lance Hudnell serve on the board. Mayor Bush said that he will be going off the board in about a week, and Mr. Driggers said that he was surprised to see the Mayor voting on these items. He stated that he is accustomed to doing projects where return on investment is paramount; and as far as the return on investment on this item, there is no accountability. He then read the names of companies that looked at Hot Springs (28), which was another page and indicated that Hot Springs did not get any of the companies. He urged the Board to review this before spending $115,000 of taxpayers’ money. Director Maruthur said when Mr. Byerly came before the Board during the budget meetings, she asked a couple of questions regarding results and was told they could not disclose; and then a comment was made by Mr. Byerly that there was a spec building done that took three years to occupy. Now they want to do another spec building. She said she does not believe that is good business. She mentioned a newspaper mailed to the Board, “Nation’s Cities Weekly, dated December 13, 2010, included an article entitled, “The Cities Fiscal Nightmares. What’s Next? Arkansas Unemployment Rate Rises to 7.9 Percent.” She said there is another article in The Sentinel-Record entitled, “Economic Forecast Good for Spa City.” She stressed that the Board has to be fiscally responsible and good stewards of the taxpayers’ money. She pointed out that she proposed to suspend many items in the budget that the City would like to do and keep things that are essential and need to do. She stressed that it is not a matter of being against this ordinance but doing what the City can afford. She said during the budget meeting, the Board was told there was a change in the revenue due to the 911 program and was told after being presented with two budget items. She stressed that the Directors need to look at reserve funds and address their needs, not their wants. She said the Directors have been doing their wants for years and find the city in benign neglect and passive waste. She spoke of deteriorating capital improvements, equipment, and need for additional personnel in certain departments; but they cannot be funded. She stressed that GCEDC is an outside agency, and the City is going to fund it. She added that she supports the agency but does not think it is responsible. Mr. Stan Grise, 105 Whispering Hills, president-elect of GCEDC, and also outgoing director of finance for that division for the Chamber of Commerce, said that he works for Munro and Company as chief financial officer. He noted there are several things GCEDC does for this community and one of those relates to business retention. Board of Directors Meeting 8 December 21, 2010 at 7:00 P.M. He said if it had not been for the employees of GCEDC who worked very hard regarding training, government assistance, and various programs that his company could not get, GCEDC helped get those for his company. He also spoke of other companies such as Rexam, which is a Triumph group. He stressed if funding for GCEDC is cut from the budget, it will be something the City will have to try to replace in years to come because it keeps employment moving forward, and that employment not only includes manufacturing industries, but includes hospitals and banks that work hard to fund GCEDC as well. He stated that many of the employers who are trying to look at new locations or make themselves available to GCEDC for new locations, do not want it made public where they are looking. He added they do not want much information released until they have made a final decision for obvious political reasons. In addition to business retention and business acquisition, GCEDC also looks at the future of the overall economic development, which includes the Airport, downtown Hot Springs, and helping with the existing employers who are in need of assistance, which is critical to the community. He expressed concern about statements being made that the information put out by GCEDC is not available. He pointed out they put out a financial statement, and the Chamber of Commerce is an open book. However, the two organizations are separate and do separate things. He said for the future, he believes the two organizations are going to provide for the community a wealth of new businesses and new opportunities that the community will be proud of. Director Maruthur questioned if he believed it was fair to the taxpayers who are paying fees, rates and taxes to give money to an organization without disclosure. Mr. Grise replied that he agreed with her on the disclosure. Director Maruthur asked if he read the relative documents, and Mr. Grise said that he did. He added all of those companies that give money to GCEDC are the taxpayers. Director Maruthur asked if he is saying the taxpayers want the City to spend this money. She pointed out that she does not remember anyone campaigning on that. Mr. Grise asked who is the taxpayer if all the employees of all the people taken away who are served by GCEDC. Director Maruthur responded it is the people who want to keep their jobs. Mayor Bush said that he disagreed, and 80 percent of what they do is to try to maintain what the City has; and they hire many people. Mr. Grise stated that it is not only the people that they hire, but the services they ask for in order to run their facility, which includes air conditioning companies, roofing companies, utility companies, janitor services, and banks, and all of those things that help infrastructure work. Director Maruthur pointed out that the Board discussed Board of Directors Meeting 9 December 21, 2010 at 7:00 P.M. suspending this item until mid-year, but nobody wants to see anything go away or not be funded. She noted that in the transcript of the budget work session, a poll was taken to delay it until mid-year; but it appeared on the agenda tonight. She stressed she is not against the GCEDC, but she does not think it would be financially sound for the Board to allocate this money at this time and would like to look at it at mid-year. Mayor Bush said that he disagreed. Director Keheley stated she believes in Hot Springs’ and Garland County’s need for a strong economic development agency; and there is a need to save jobs and create new jobs. Also, there is a need to raise family incomes. She pointed out there is not a city department established to do this, but GCEDC is in place. She mentioned the City has two representatives on that board, the Mayor and City Manager. She said she hopes in future years, the City can achieve more accountability with the GCEDC board and better communications so there are no questions in the future about their contributions and work. She stated she knows confidence can be built and be a part of helping citizens. Therefore, she is going to support it. Director Jones said she is going to support it because when one of those factories was closing and citizens were losing their jobs, GCEDC was working to help them get their jobs back the next week. Therefore, she supports it 100 percent because she knows people who were hired and would not have gotten hired anywhere else. Director Daniel stated that he supports this 100 percent. He mentioned the national vending company that made parts for Coca Cola for the vending machines (NRI), and Mr. Grise said that he was an employee of that company and lost his job. Director Daniel said at that time, GCEDC was not in place; and that company closed; however, it now has a company in it. He said he is a taxpayer and small businessman and realizes what it takes to keep employees. He mentioned that January, February and March are difficult times for him, and he does not want his employees to not have a paycheck. Therefore, he has to put some money aside to make sure they get paid. However, there are some people who cannot do that, but that is the reason for agencies like this. Therefore, he will be supporting it. Director McCabe said the City has to continually invest within the community, and these dollars are well-served in that area. He pointed out if no one is promoting the community, promoting the beauty of Hot Springs and what it has to offer, then businesses are not going to look to Hot Springs. He mentioned when the shell Board of Directors Meeting 10 December 21, 2010 at 7:00 P.M. structure was built on Aviation Plaza, it sat empty for three years; and then an entity came to Hot Springs and wanted to look at what Hot Springs had to offer; and that is with an investment within the community that is going to pay dividends forevermore. He noted they recently expanded. He stressed that the City has to be out there all the time, and he looks to GCEDC to assist in doing that; and the City will continue to do its part. Director Maruthur said she would like to build a lot of things, but she cannot afford it; and this is all about economics. She mentioned that three Directors agreed to look at this at mid-year budget, and it is on a transcript. However, it has all been changed; and everyone supports it. She stressed that she is not against it but is concerned about the city employees, city services and Mother Nature. She stated it is now winter, and it is unknown what is ahead. She stated the City does not have any reserve funds or contingency funds, and the GCEDC is not going to come to the City’s rescue should something happen. Mr. Grise commented that all of the employers who write the paychecks every Friday, send people in town to spend money; and that money is used to create taxes for the City, which relates to GCEDC. He pointed out when economic times get hard, it is very classic that companies lay off their sales people, cut their inventory, and wonder why they do not have anything to sell. He said without GCEDC doing the business retention and the employer retention that they do in the City, many jobs will be lost; and when jobs are lost, they will multiply. Director Maruthur said she has received several phone calls during the last week, and none of her the calls were positive. Mayor Bush pointed out that he also received phone calls, but they were all positive. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Jones, Keheley, McCabe, Ramick, Daniel, and Bush, total 6. Voting “no - mid-year budget:” Director Maruthur; motion carried. Whereupon the ordinance was declared passed. 19 Proposed Ordinance No. O-10-58 An ordinance entitled, “AN ORDINANCE AUTHORIZING A CONTRACT FOR SERVICES WITH HOT SPRINGS BOYS AND GIRLS CLUB; WAIVING THE Board of Directors Meeting 11 December 21, 2010 at 7:00 P.M. REQUIREMENTS OF COMPETITIVE BIDDING; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Daniel, duly seconded by Director Jones, that the rules be suspended and the ordinance be read for the first time by title only; and upon voice vote, the motion unanimously carried. The ordinance was then read for the first time by title only; and upon the question “Shall the ordinance be passed as read?” and upon motion of Director Jones, duly seconded by Director Ramick, that the ordinance be passed as read. Upon discussion, Mr. Pat Ramsay, 303 Fox Run Circle, representing the Boys and Girls Club of Hot Springs, spoke in support of the ordinance. He said there are many programs at the Club, but baseball is one they are very proud of. He stated they look forward to putting more kids in the program and enhancing the program to the best of their ability. Mayor Bush commended the Boys and Girls Club for their work. Director Jones said that she appreciated what the Boys and Girls Club does for the children and knows some could not afford to go there. However, they opened the doors to them, as well as the ones who can afford to pay. Director Maruthur said she believes it is a good program, and the Boys and Girls Club does wonderful work; however, she does not think the City can afford it. She stated it is a matter of using taxpayers’ money for a private entity. She added she will vote not to fund the program but suspend it until the economy does an upturn; and she has confidence that it will. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Jones, Keheley, McCabe, Ramick, Daniel, and Bush, total 6. Voting “no”: Director Maruthur; motion carried. Whereupon the ordinance was declared passed. 20 Proposed Ordinance No. O-10-59 An ordinance entitled, “AN ORDINANCE ACCEPTING VIVIAN STREET LOCATED IN WHEATLEY VILLAGE SUBDIVISION AS A PUBLIC STREET; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. Board of Directors Meeting 12 December 21, 2010 at 7:00 P.M.  A motion was made by Director Ramick, duly seconded by Director Jones, that the rules be suspended and the ordinance be read for the first time by title only; and upon voice vote, the motion unanimously carried. The ordinance was then read for the first time by title only; and upon the question “Shall the ordinance be passed as read?” and upon motion of Director Ramick, duly seconded by Director Jones, that the ordinance be passed as read. Upon discussion, Mr. Denny McPhate, Public Works Operation Manager, said the recommendation is to accept Vivian Street for city maintenance of street and right-of-way. He stated that Habitat for Humanity is requesting that the City accept Vivian Street for maintenance. He advised that the Engineering Division has conducted an inspection, and Vivian Street meets all city street specifications. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Keheley, McCabe, Ramick, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 21 Proposed Ordinance No. O-10-60 An ordinance entitled, “AN ORDINANCE ACCEPTING BURCHWOOD BAY COVE LOCATED IN BURCHWOOD BAY SUBDIVISION AS A PUBLIC STREET; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Daniel, duly seconded by Director Ramick, 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 Ramick, duly seconded by Director Jones, that the ordinance be passed as read. Upon discussion, Mr. Denny McPhate, Public Works Operation Manager, stated that the recommendation is to accept Burchwood Bay Cove for city maintenance of the street and right-of-way, including the street lights. He added the residents of Burchwood Bay Subdivision are requesting that the City accept Burchwood Bay Cove for city maintenance. He advised the Engineering Division has conducted an inspection of Burchwood Bay Cove, and it meets all city specifications and is not in need of any Board of Directors Meeting 13 December 21, 2010 at 7:00 P.M. repairs. He explained the street was never intended to be private, but it was never officially accepted as a city street once development was completed over ten years ago; and this action will correct that oversight. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Keheley, McCabe, Ramick, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 22 Proposed Ordinance No. O-10-61 An ordinance entitled, “AN ORDINANCE WAIVING THE REQUIREMENTS OF COMPETITIVE BIDDING AND AWARDING A CONTRACT TO US BANK FOR PROCESSING DISTRICT COURT CREDIT CARDS; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Ramick, 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 Daniel, duly seconded by Director Maruthur, that the ordinance be passed as read. Upon discussions, Ms. Dorethea Yates, Finance Director, advised that District Court has been using Bank of America to process its credit cards. Recently, they had to update their equipment, and staff made a decision not to update that equipment. She noted that currently, they are not receiving any credit cards at the District Court. She explained the best way to get them operating again would to combine their contracts with the contracts Finance currently has with US Bank for utility services and get the Utility Department and District Court under the same umbrella by using the same company to process the credit cards. She pointed out it would be two different accounts but would have the same fee structure even though the fees are a little different because there are two separate operations. She mentioned the fees for this new agreement would be slightly less than the fees that District Court is paying at the present time. Board of Directors Meeting 14 December 21, 2010 at 7:00 P.M.  Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Keheley, McCabe, Ramick, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 23 Proposed Ordinance No. O-10-62 An ordinance entitled, “AN ORDINANCE WAIVING THE REQUIREMENTS OF COMPETITIVE BIDDING AND AWARDING A CONTRACT TO SOUTHWESTERN BELL TELEPHONE, D.B.A. AMERICAN TELEPHONE AND TELEGRAPH COMPANY (AT&T-ARKANSAS), FOR CERTAIN PLEXAR CUSTOM TELEPHONE SERVICES,” was taken from the agenda for consideration. A motion was made by Director Ramick, 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 Ramick, duly seconded by Director Maruthur, that the ordinance be passed as read. Upon discussion, Ms. Dorethea Yates, Finance Director, advised that the City currently uses a Plexar campus-style phone system that allows a trunk line to feed several extensions; and based on information received from different telecommunications experts, AT&T is the only vendor that provides the service in the format the City is currently using. She said the City is able to have a new agreement with them and is at reduced prices from what the City is currently receiving. Therefore, there would be a savings in adopting this new agreement. She advised that the lines for the City have been audited, and several lines have been eliminated. Therefore, there is also a savings. Director McCabe commented this is a five-year agreement and asked if the equipment is the newest technology. Ms. Yates advised that it is not explaining the City has had that system for several years and last year looked at the possibility of a new system but did not do that. Director McCabe asked if the City would be able to get out of the agreement prior to the 60 months if it was not meeting the City’s needs, and Ms. Yates said that it would. Board of Directors Meeting 15 December 21, 2010 at 7:00 P.M.  City Manager Lance Hudnell advised that it has to have a fund-out clause. City Attorney Brian Albright stated that in Section 2 of the ordinance, it states that the agreement is subject to any inclusion in the annual budget; and if it is not included, the City is out. Director McCabe questioned if the $3,000 monthly fee is for the equipment and service and everything; and Ms. Yates replied that it is not. She explained this is just for the software part and not for the equipment itself; and each piece comes separately. She added there is the equipment, software, long-distance service, and a number of different components to the total telecommunications program. City Manager Lance Hudnell explained that Plexar is the front-end, and there are back-ends in each of the offices that are actual telephone systems. He mentioned there is an Avaya System in this building, but it interfaces with Plexar. Director Daniel asked if the monthly $3,000 includes a maintenance fee, and Ms. Yates replied that it is for basic Plexar station; and the City pays a monthly rate for that. Then it pays a monthly rate for caller ID. City Manager Lance Hudnell added this is basically the software system at AT&T and is not for the telephone systems that are within the various offices. He explained if there is an issue with an Avaya desk set, Avaya has to respond to that, not AT&T. Director Daniel asked if there was a maintenance contract with them, and City Manager Lance Hudnell advised that there is not. He explained the system the City has became more expensive to have than the charges that the City incurred when it was needed. Regarding the Plexar, it is the campus approach because offices are spread out over the City; but if the offices were all in one building, the City would not want Plexar. Mayor Bush then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Keheley, McCabe, Ramick, Daniel, and Bush, total 7; motion unanimously carried. Whereupon the ordinance was declared passed. 24 Proposed Ordinance No. O-10-63 Board of Directors Meeting 16 December 21, 2010 at 7:00 P.M.  An ordinance entitled, “AN ORDINANCE ADOPTING A BUDGET FOR THE YEAR 2011; AND FOR OTHER PURPOSES,” was taken from the agenda for consideration. A motion was made by Director Ramick, duly seconded by Director Jones, that the rules be suspended and the ordinance be read for the first time by title only; and upon voice vote, the motion unanimously carried. The ordinance was then read for the first time by title only; and upon the question “Shall the ordinance be passed as read?” and upon motion of Director Ramick, duly seconded by Director Jones, that the ordinance be passed as read. Upon discussion, Mr. Brian White, 360 Lakeland Drive, questioned the budget regarding special appropriations and transfers-out for $12,390,464 and asked for an explanation of transfers-out. City Manager Lance Hudnell explained there is detailed information on this. He added that about over one-half of the General Fund goes out to support other funds, such as Fire, Police, Transit, Street, District Court, and a little to MPO. He added that is all of these transfer-outs to support these funds. Also, there is the same amount as a revenue over in the other funds. Mr. Bob Driggers, #3 Stonegate, recommended that the Board consider tabling certain elements of the budget, pointing out there is some “fluff” in the budget, such as GCEDC which should be omitted until the new Board can consider it. He questioned why business retention and new jobs was not in the six-page report from GCEDC. He mentioned there is enough promotion of the City, such as the Advertising and Promotion Commission, which collects three percent tax from the citizens and spends millions of dollars. He said if the GCEDC ordinance did not include waiving competitive bidding, the City might find a certified economic developer somewhere in the City that would do the job and a better job and give a more thorough report at the end of the year for less money. He said this is $115,000 that could be used for paving streets or for giving the city employees a raise instead of furloughs. Mayor Bush pointed out there will be no furloughs this year. Mr. George Pritchett, 210 Carl Drive, expressed appreciation to Mayor Bush and Director Ramick for their service to the community. He pointed out the budget is $87.8 million, which is approximately a 3.4 percent increase from last year. He mentioned Board of Directors Meeting 17 December 21, 2010 at 7:00 P.M. there is not a bad program in the budget and thanked Director Maruthur for being concerned about the economy, the people, and the money that is being spent. He stated that employees were given a raise this year by returning the 1.1 percent that was taken away a year ago and also there are no furlough days this coming year. Regarding comments about the Chamber of Commerce, he noted there is an upheaval in Little Rock. He said they have around 200,000 citizens and their Board is given $200,000, which is $1 per each man, woman and child. He mentioned the City of Hot Springs gives $3 to each man, woman and child; and the County gives another dollar. Therefore, the City gives four times and probably has lower income and lower compensation. He said he pointed this out because he believes $4 is an unfair burden. He said he is not asking that the City do away with it but is requesting the City to consider in the future to make some adjustments when the economy is in a better position than it is at the present time. He pointed out the 2½ percent growth in the budget is relatively conservative. He added that the infrastructure is continually ignored. He said that $500,000 is going to be put into streets, and there is already $100,000 given to a bridge project. He stated that is four times what was done last year and is going to be 2.8 miles of paving. He mentioned there is probably a $15 million to $30 million deferred street maintenance program that needs to be done. Also, the retirement cost is growing at one percent a year. He said there are public safety concerns, such as a need for radios. Also, at some time, infrastructure needs will have to be addressed. He asked that the Board consider giving the public an opportunity to speak at the budget work sessions as they have the special interest groups. He stated if the Board places an issue on the ballot, there will be an uproar; and nothing is going to get passed until there is a change in the quality of life in the outside agencies. He pointed out that City Hall needs a new roof, but the Chamber of Commerce building has a new roof. He said that the Chamber of Commerce does many good things, but $4 to $1 is not just right. Director Maruthur stated that on November 30, there was a budget work session; and she presented a numerical list. However, she went back so that some of the Board Members who said they did not understand what she was talking about would understand and public would hear it. She noted the City Manager’s proposed budget showed a difference between projected revenues and projected expenses to be over a $1 million, but more is needed. She stated her recommendation was to cut the expenses by two percent but not necessarily equally in each department; and this was an effort to create reserves, which the City does not have. She said this money could then be used to fund fire, police radios, communications, transportation, and public safety. She stated if the Board does not begin to create a reserve, it can open the door Board of Directors Meeting 18 December 21, 2010 at 7:00 P.M. or increase the risk for the City to go bankrupt. She stated she knew the Board was looking for a fund balance of $315,000 but needed more. She pointed out she has been trying for years to help the City update and repair the infrastructure and address the needs of the City, and she has managed to inch programs in that had been deferred. She commented the City’s population has shifted to the perimeter of the City and moved outside the City or behind gated communities due to benign neglect and passive waste. She noted the City has funded its wants and placed its needs as something that can be fixed later. She stressed that later has come; and because of the economy, the City can no longer fund all of its wants. She stated the City Manager and department heads are the only ones who can tell the Board where the additional two percent could have come from, not the Board of Directors since it does not micro-manage but does give input into the recommendations and either approves or rejects the recommendations made by the city manager. She noted that City Manager Lance Hudnell had presented a $1,706,232 projected revenue from the budget but cutting expenses two percent, would give the City another $1,735,846; and there would be a total of $3,452,179. She said the City could then take care of the urgent essential business. For clarity regarding the numbers she presented, she said the numbers came from the total revenues and total expenses, and the Board should do whatever is necessary to serve the taxpayers by protecting the essential services that they pay through taxes, rates and fees. She emphasized that the Board should not place the City at risk, and this includes the employees who depend on the Board to make the right decisions. She pointed out that neighborhoods are the backbone, and they are the constants; and the Board’s wants are the variables. She stated she feels it is the Board’s responsibility to the taxpayers to provide them with what they can and that is continuation of employment for the City employees. She said the City has become very creative in extracting money from its citizens through rate increases and fees, and now there is discussion about annexation of a commercial corridor in the County, which she does not believe will be well-received. She noted this leaves no recourse for the taxpayers because they will be denied their opportunity to vote on these increases. She said she believes voters are tired of being ignored, and that was reflected in this last election all over the world. She commented that she brought up a security system years ago, and someone had said Hot Springs is not New York City. She noted there was an incident in Missouri, and recently there was another incident with a school board. She stressed that Hot Springs is not an island and is in a terrible economic condition; therefore, she must vote “no” to the budget unless the Board cuts two percent and creates reserves. She urged the Board to read “Nation’s Cities Weekly,” dated December 13, 2010 and to pay attention to what the taxpayers are doing. She noted that many of them are not able to pay their utilities and are having to Board of Directors Meeting 19 December 21, 2010 at 7:00 P.M. cut back on food. She added that the Salvation Army is now having a problem with some of their employees and was glad that Director Keheley and Director McCabe participated. She added the food banks are being overwhelmed with requests, and now is the time to come to the aid of those people who need the Directors the most. She said as elected officials, it is their responsibility to do the right thing. She said she is not against a softball or baseball program or the children. She mentioned that some of the people who call her have become known as the “trailer ladies,” who were denied help by the Board. However, they are not negative and are very thankful. She stated that the people who come to the Board who really need help are the ones the Board should help. Regarding the agencies, which are good agencies, that are depending on the City for help, she said she believes it is the Board’s duty to look at them during mid-year and not discard them or make them appear they are just using the City. As far as travel goes, Director Maruthur stated that individuals may go to meeting.com, which costs $49 a month. Director McCabe commented in October 2009, he joined the Board, which was beginning the budget session for the 2010 budget. He said the Directors were getting toward the end, and the City Manager presented a final budget recommendation during the work session with a $900,000 deficit with $1.1 million of cash reserves. He stated he was concerned by that and challenged him and others to reduce that to at least in the area of $450,000. He said to City Manager Lance Hudnell’s credit and the department heads, they worked hard and got it down to around $387,000, which was in the General Fund. He mentioned this year, the Board had an initial work session in July; and City Manager Lance Hudnell presented the first go around of the budget; and there was a $2.1 million deficit. He said some people in the community said it was a debt. At that time, he questioned Finance Director Dorethea Yates how she arrived with her revenue figure. She explained the process, and he challenged her due to coming out of a recession. He stated he knew if the City did not have good revenue numbers, that it would be cutting more services than what would be required. He mentioned she went out and got more sound revenue projections, which then brought the shortfall from $2.1 million to $1.1 million. From that, City Manager Lance Hudnell and his staff continued to work and came down in the area of a $315,000 shortfall, which is in the General Fund. He advised at the last hour of the last meeting on the budget, the 911 funding was going to be short; and to the credit of the Fire Chief, he said there was probably no way the City will get the fire truck before the end of 2010. Therefore, the principal and interest payments the City was going to pay on that will really be in 2012. He commented the City was able to come in with a budget shortfall in the General Fund at approximately what it had budgeted for 2010. He noted that the Board of Directors Meeting 20 December 21, 2010 at 7:00 P.M. staff, City Manager Lance Hudnell, and everyone in the City has worked hard to beat that budget for 2010; and they are going to work hard to beat that budget in 2011. He said he feels that as well as Ms. Yates has done on the revenue side, he is hopeful on the revenue side she is too conservative. He pointed out the economists said she cited in her projections (about $1.2 million short), and she was conservative on that. He commented the City is coming out of a recession and see it every month in the monthly sales tax that continues to climb. He stated for the Board to be cutting any more in order to get to some number that anybody could write on a sheet of paper is not a real good exercise. However, he believes the City has a budget that is very workable, that will meet the needs of the community; and the various constituencies within the community have had different needs, and the City is trying to meet all of them in some capacity. He said he believes this is a good budget; and any comment that the City going to go bankrupt is an inappropriate comment. He pointed out the fund balance that Ms. Yates is projecting will be at $4.4 million at year end. Director Keheley said in spite of the hardships, controversies, the difficulties and discussion the Board has had in analyzing where the City should go, the Board has come up with a budget. She noted it includes public safety items that are needed, new police vehicles, a fire truck, breathing apparatuses for fire department staff, the paving program, a paving and bridge repair, a utilities director to oversee and watch over the many mandates the City is required to undertake; and a new position of a utilities director to oversee all of those mandates. She said her biggest regret of the budget is the Board’s inability to immediately address compensation for the city employees. She stated that she hopes during the coming year, an adjustment can be made; and the city manager is working very hard on that. She added it is a tight budget and is going to require Finance Director Dorethea Yates and City Manager Lance Hudnell to pay close attention every month to the figures and bring the Board updates. Therefore, she supports the passage of the budget. Director Maruthur stated that the leading economic indicators are not good in the United States of America, and no one wants to go bankrupt. She said the City is increasing its risk if it continues the old spending practices. She mentioned that the city manager and department heads have worked very hard; and she in no way diminishes the work and the time they have put into this. However, it is ultimately the Board’s assessment of what is presented to them that the taxpayers are going to look at. She said it is unknown what is going to happen so it is best to air on the side of caution. Board of Directors Meeting 21 December 21, 2010 at 7:00 P.M.  Mayor Bush then called for a motion to adopt; and upon roll call, the following voted “aye”: Directors Jones, Keheley, McCabe, Ramick, Daniel, and Bush, total 6. Voting “no”: Director Maruthur; motion carried. Whereupon the ordinance was declared passed. OTHER BUSINESS 25 Board of Directors Items for Discussion Director Jones wished everyone a Merry Christmas and Happy New Year. She mentioned there are many visitors to the City, and her customers are always complimentary about Hot Springs. She expressed appreciation to those who voted for her in the election. 26 City Manager’s Report City Manager Lance Hudnell gave the following report: 1. There will be a public forum on December 30, January 6 and January 7, at 4:30 p.m., in the Board Chambers for the Police Chief candidates. That is specifically for citizens to meet the three finalists. Also, there is a luncheon on each of those days followed by an informal interview time that the public is welcome to attend. That will be held at the Austin Hotel beginning at 12 noon. The Board’s time with the candidate will follow the luncheon around 12:30 p.m. or 12:45 p.m. There will be provisions for the general public if they wish to sit in on that session as well. 2. He complimented Mr. Nathan Neighbors, in the Parks Department, for securing the John McKay Summer Slam Tournament in Hot Springs in 2011 and possibly for years to come. 3. The Utilities Water and Wastewater Divisions held a chili cook-off to raise money for needy families. In addition to collecting canned goods for Jackson House, the Fire Department provided toys and gifts for 22 local families. The City employees raised over $600 toward three Christmas families who were adopted by the employees. Also, the employees contributed out of their pocket approximately $6,000 for the United Way that goes to various local charities. He expressed appreciation of their service in giving back to the community. Board of Directors Meeting 22 December 21, 2010 at 7:00 P.M.  4. The Fraternal Order of Police has selected Officer John Tinney as their Officer of the Year and was chosen by his peers. Norman Roscoe was chosen as Firefighter of the Year and was chosen by his peers. 5. He complimented Ms. Leslie Kauffman, who out of her time picked up the Santa Switchboard this year. A number of volunteers, both city employees and others, participated. 6. Ms. Searcy on Rector Street, complimented the leaf and mulch crew as did Mr. Tom Payne with regard to Kevin and Jimmy with the Sanitation brush pickup. 7. Steve Gregor, Tommy Weeks, and Greg Speas, of Fleet Service Department, received some additional ASE certifications. These are testing they have to go through to maintain their master mechanic licenses. The ultimate goal is to be a Blue Seal Shop, and the City is one test away from being such a shop. These are very difficult tests, and they employees spend a lot of time studying on their own. 8. He appreciated the support of the Board with regard to the budget, and he appreciated their diligence in considering every item, as well as the department heads and the various managers and employees who have done an excellent job of finding ways to cut costs and save money. He and Finance Director Dorethea Yates are looking forward to coming well under budget this year because of the efforts all of the employees have made. Director Maruthur said she attended the recognition of Firefighter Norman Roscoe at the Elks Club, and he is a long-time resident of District No.1. Mayor Bush said as Mayor for the last ten years, he wanted to thank everyone and expressed appreciation to City Manager Lance Hudnell; City Attorney Brian Albright; and Deputy City Clerk Janet Heath for working with him. 27 ADJOURNMENT There being no further business to come before the Board, the meeting adjourned at 8:35 p.m., to meet again on Tuesday, January 4, 2011, at 7:00 p.m. Board of Directors Meeting 23 December 21, 2010 at 7:00 P.M. ATTEST: _____________________ APPROVED:__________________ Lance Spicer, City Clerk Mike Bush, Mayor Board of Directors Meeting 24 December 21, 2010 at 7:00 P.M.