Board of Directors

MINUTES BOARD OF DIRECTORS MEETING FEBRUARY 15, 2011, AT 7:00 P.M. The regular meeting of the Board of Directors was held on Tuesday, February 15, 2011, at 7:00 p.m., Board Chambers, City Hall, with Mayor Ruth Carney presiding. The invocation was given by Mr. Dusty Diggs, and Pledge of Allegiance to the Flag was led by Mayor Carney. Mayor Carney 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, Karen Garcia, Tom Daniel, and Ruth Carney, total 7. 2 Approval of Agenda A motion was made by Director Jones, duly seconded by Director Maruthur, that the agenda be approved. Upon discussion, Director Garcia requested that Item No. 11 (Proposed Resolution No. R-11-22 Revising the 2010 Budget by Appropriating Funds for Certain Prior Year Expenditures) be removed from the Consent Agenda and considered under New Business. A motion was made by Director Garcia, duly seconded by Director Keheley, that the agenda be amended by removing Item No. 11 (Proposed Resolution No. R-11-22 Revising the 2010 Budget by Appropriating Funds for Certain Prior Year Expenditures) from the Consent Agenda and considered under New Business; and upon voice vote, the motion unanimously carried. A motion was made by Director Jones, duly seconded by Director Maruthur, that the agenda be approved, as amended; and upon voice vote, the motion unanimously carried. 3 Approval of Minutes of February 1, 2011 Board Meeting A motion was made by Director Daniel, duly seconded by Director Garcia, that the minutes of the February 1, 2011 Board Meeting be approved; and upon voice vote, the motion unanimously carried. 4 Recognition of Guests Mayor Carney recognized Mr. Mark Fleischner, who stated that the Urban Forestry Advisory Committee has been active for two years; and its main purpose is to make people aware of the beauty of the City. He recognized members of the committee - Mr. John Slater; and Ms. Terri Phillips, secretary to the committee. He then awarded a gift from Lauray’s to Mr. Gary McKuin, who won the photo contest of fall trees in the City. Mr. McKuin expressed appreciation to the committee for its work. Director McCabe introduced Mr. Terry Burcham, general manager of REXAM Closures and Containers. Mr. Burcham stated that REXAM has been in Hot Springs for a number of years but previously under another name (Delta Plastics, which was purchased by REXAM in 2005). He stated that REXAM is a global leader in plastic packaging and beverage can packaging and has over 100 plants worldwide and 50 plants stateside. In 2010, he advised they had an opportunity to bring in a new molding technology, which was the compression molding unit, from another plant that was closing in the U.S. to Hot Springs. He reported they have now increased their employment from 300 employees to 450 employees. He stated they have been working closely with Workforce development over the past year, National Park Community College, the Chamber of Commerce, and Garland County Economic Development Corporation. He mentioned they have been instrumental in helping them, not only with development of their employees to meet the time line they had to meet, but also in the infrastructure changes they had to make. He pointed out that REXAM invested over $20 million in the expansion of the local plant and appreciates the local support. 5 Board of Directors Announcements Director Maruthur announced that the Park Avenue Community Association will meet on Monday, February 21, 6 p.m., at the Tower of Strength Ministries on Park Avenue; and the public is welcome. She said they welcome anyone who wants to join the association and support the Park-Whittington area. She mentioned the guest will be Ms. Denise Parkinson from the Hot Springs Community Gardens, and Mr. Melvin Daniel, Garland County Extension Office representative. She explained that traffic was stopped downtown due to a bomb threat that was called into the Federal Building at 12:40 p.m.; but within 20 minutes, the federal marshals gave an all-clear. Mayor Carney announced that the Board of Directors will hold a work session in the Board Chambers on Tuesday, February 22, concerning an update on the water treatment plant immediately following the agenda meeting. Anyone interested is invited to stay for the 5 p.m. briefing. She mentioned there will be a presentation from the Arkansas Department of Health, Jacobs Engineering, and City staff. She noted that a public forum will be held on Monday, February 28, at 6 p.m., Hot Springs Civic and Convention Center, Room 204; and representatives from the Arkansas Department of Health, Jacobs Engineering and City staff will be participating in said forum. Director Daniel expressed appreciation to the Street Department, Utilities Department, Fire Department, and Police Department during the recent heavy snow, noting they were working around the clock. Director McCabe announced that this summer, the United States Naval Academy will sponsor a summer science, technology, engineering and math camp for youth across the country, for students who will be in the 8th grade in August up to the 11th grade. He stated this is their push to try to enhance children’s interest in science and engineering but is not a recruitment to the military. He stated there is no cost, and it is 100 percent scholarship. However, they do have to have their travel covered. He stated Little Rock Airport has a flight that goes straight into Baltimore/Washington International Airport. and a midshipman from the Naval Academy will be at the gate. He pointed out it is a great opportunity, and there was one student who attended last year from Hot Springs High School. He advised for those who will be seniors next August, there is a program called “Summer Seminar,” for those who might have an interest in attending the Naval Academy. He said that he pushes the Naval Academy here locally, and Garland County is within Congressional District 4; and he feels there should be someone at the Academy in each incoming class. However, that does not always happen. He noted this past summer, there was a student from Lakeside who attend the summer seminar and thought it was a very worthwhile program. He said it allows them to walk in the shoes of a midshipman and see if that is the lifestyle they would enjoy and is a little more serious than the Science, Technology, Engineering and Math. He added there is a $350 to $400 registration fee for that program, and then they still have to have Board of Directors Meeting 3 February 15, 2011 at 7:00 P.M. their travel to the Baltimore area. He advised both of these applications are online at United States Navel Academy.edu under program and events. Director Maruthur commended the excellent service provided by the City crews during the recent snow event and said many people requested sand. She advised the Street Department is working on removing the sand in areas that are clogging up drains, pipes, etc. She mentioned she spoke to Street Superintendent Clarence Galbert and expressed appreciation for everything the department has done. She asked that citizens be patient with any areas that do have sand. Mayor Carney announced that she is going to be arrested tomorrow at 9 a.m., and the only way she can be bailed out is if someone will make donations to St. Jude’s Children’s Hospital Research for Cancer, which she would appreciate. CONSENT AGENDA The Consent Agenda consisted of the following: 6 Public Safety Committee Report (February 1, 2011). 7 Budget Transfer - Architectural Services for City Hall Roof Repair ($7,500) 8 Proposed Resolution No. R-11-19 Approving Certain Bid Awards (a) Police Vehicles [16] - Police Department. 9 Proposed Resolution No. R–11-20 Authorizing the Mayor to Execute a Memorandum of Understanding with CLEAResult Consulting, Inc. to Participate in the Entergy Arkansas CitySmart Program for 2011. 10 Proposed Resolution No. R-11-21 Authorizing Purchase of Various Wastewater Pumps and Pump Parts in Accordance with Ordinance No. 5663 That Establishes Certain Vendors as the City’s Sole-Source Supplier of Specific Wastewater Pumping Equipment. Board of Directors Meeting 4 February 15, 2011 at 7:00 P.M. 11 Proposed Resolution No. R-11-22 Revising the 2010 Budget by Appropriating Funds for Certain Prior Year Expenditures. (Removed from the Consent Agenda and Considered Under New Business) 12 Proposed Resolution No. R-11-23 Confirming the Appointment of Al Carney to the Hot Springs Housing Authority. 13 Proposed Resolution No. R-11-24 Authorizing the Filing of a Grant Application with the Arkansas Department of Parks and Tourism Pursuant to the Arkansas Game and Fish Commission’s Wildlife Observation Trail Program (Utility Service Center Trail, Phase II, Section of the Hot Springs Creek Greenway Trail). 14 Proposed Resolution No. R-11-25 Awarding a Contract to Spa Construction Company for the Construction of Valley Street Creekwalk, Phase II, of the Hot Springs Creek Greenway Trail. A motion was made by Director McCabe, duly seconded by Director Daniel, that the Consent Agenda be approved. Upon discussion, Director Keheley said there was a request to designate a portion of Gaines Street and all of Henry Street as one-way streets; but the Public Safety Committee recommended denial on both of these requests. She asked if there were any other factors taken into consideration other than the traffic counts that were included in the Board packet. She questioned if the committee had explored and investigated other reasons. She mentioned she has a one-way street in her district, and it is there because of a daycare center; and two-way traffic would impact it. Mr. Steve Mallett, Deputy City Manager for Public Works and Utilities, advised the requests came to the committee listing congestion as the issue. However, since the last agenda meeting, he talked with Director Jones; and there may be more than just a congestion issue. However, the committee based it on whether there was or was not a congestion issue because that was explicitly stated. He added there may be other issues, and the committee will visit the areas and see if there are other factors in play that may warrant to bring this back. Board of Directors Meeting 5 February 15, 2011 at 7:00 P.M.  Mayor Carney then called for a vote on the motion to approve the Consent Agenda; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Keheley, McCabe, Garcia, Daniel, and Carney, total 7; motion unanimously carried. City Manager Lance Hudnell stated as part of the Consent Agenda, it confirmed the appointment of Mr. Al Carney to the Hot Springs Housing Authority; and he recognized him at this time. NEW BUSINESS 15 Proposed Resolution No. R-11-26 A resolution entitled, “A RESOLUTION APPROVING CONSTRUCTION OF AN OUTDOOR ADVERTISING SIGN AT 1117 AIRPORT ROAD,” was taken from the agenda and read by title only. (Appeal) A motion was made by Director Maruthur, duly seconded by Director Jones, that the resolution be adopted as read. Upon discussion, Director McCabe made a motion, duly seconded by Director Keheley, to table the resolution to a meeting no later than the second meeting in December 2011. He said he read an e-mail that City Attorney Brian Albright sent to Director Garcia regarding certain questions that relate to the following issues: (1) visibility; and (2) zoning. He stated he talked to the concern on this as bringing the appeal, and the Board packet really addressed visibility. He pointed out these issues are intertwined, and he believes it would be beneficial for the City Attorney, Planning Director, and the appellant to get together and work through this. He said this will take a while because there are many factors involved. City Attorney Brian Albright advised that he had a conversation with Mr. David Hamilton on behalf of the applicant, and he conveyed to him that he wished to have this tabled. He pointed out there are some complex issues to be worked out if this is to ever take place, which may include amendments or proposed amendments to the Sign Code and Zoning Code. Board of Directors Meeting 6 February 15, 2011 at 7:00 P.M.  Director McCabe said if they could get it resolved by June, that would be fine. However, with the Planning Commission meeting once a month and their timetable for getting items on the agenda and staff to work on it, he believes that would be appropriate. He stated from the conversations he had, this is not an adversarial situation. He mentioned there were certain promises that were made, letters written back in early 2000's when certain things were done with the changing of C-5 to C-4; and now those are not there. Mayor Carney then called for a vote on the motion to table the resolution to a meeting no later than the second meeting in December 2011; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Keheley, McCabe, Garcia, Daniel, and Carney, total 7; motion unanimously carried. 16 Proposed Resolution No. R-11-27 A resolution entitled, “A RESOLUTION ESTABLISHING A TRAVEL POLICY FOR THE BOARD OF DIRECTORS AND REPEALING RESOLUTION NO. 3226 OF 1995,” was taken from the agenda and read by title only. A motion was made by Director Garcia, duly seconded by Director Jones, that the resolution be adopted as read. Upon discussion, City Attorney Brian Albright advised that on June 1995, the Board adopted Resolution No. 3226, which established a travel policy for the Board of Directors; and the proposed resolution would repeal Resolution No. 3226 and establish a revised policy for Board travel. He said the changes from the previous resolution and the current proposed resolution adds language with respect to out-of-state travel as follows: “All out-of-state travel shall be subject to available funding in the Board of Directors’ travel budget line item(s). Whenever possible, the attendance at the out-of-state events on behalf of the City of Hot Springs should be rotated among the individual members of the Board of Directors.” Other than that, he advised the remainder of the previous resolution will remain intact. Director Maruthur asked if he could define what is meant by “discretion” in Section 2 of the resolution, which states that “in-state travel, including lodging, shall be at the discretion of the individual Director(s), subject to available funding in the Board of Board of Directors Meeting 7 February 15, 2011 at 7:00 P.M. Directors’ travel budget line items.” City Attorney Brian Albright advised that was in the previous resolution; and that portion was not asked to be amended. He added that discretion falls under the Travel Procedures of the City Employees and City Officials, and the latest edition of that is dated January 1, 2004. He stated it goes through in some detail about what items can be reimbursable and what the process is for doing that. Director Maruthur commented that many things have changed since 2004. She asked what is meant by “discretion.” City Attorney Brian Albright advised it is if the Directors choose to seek reimbursement. Director Maruthur said that Section 3 refers to local travel costs, and expenses shall be paid upon request of any individual Director and presentation to the Finance Director documentation of the expenses or mileage incurred. She questioned what they have to present. City Attorney Brian Albright advised that is for local travel and cost and expense which is typically associated with inspecting premises to see circumstances that are included on the agenda. He said the Directors would have kept their odometer reading and turned in a statement showing that they drove a certain amount of miles in order to get reimbursed from the Finance Department, which at this time is at the rate of $.50 a mile. Director Maruthur said she wanted the public to know that the Board Members will be reimbursed for gas if they choose to do that. City Attorney Brian Albright said they can, but does not know if the Finance Department receives very many requests in that regard. Director Garcia pointed out the language being requested to be added to out-of-state travel is the same as the existing language for the Board’s in-state travel. She stated it helps the Board to think about what it needs to plan in their budget and not to do this out of the Board’s contingency account. She added this provides more transparency of the Board’s actions. Director McCabe asked if there will be sub-accounts for Board travel -- one for out-of-state travel, one for in-state travel, and one for local travel; or be combined in one account. Finance Director Dorethea Yates advised that Finance does not have it at that point but can if that is the desires of the Board. Director McCabe pointed out if it is in one account and all is used with in-state travel, there is no allocation for out-of-state travel. Ms. Yates responded at the current time, there is only one pool. Director McCabe said she might want to give consideration to differentiating through sub-accounts, and Ms. Yates advised that can be done. City Attorney Brian Albright commented that is something the Board can discuss during the upcoming budget discussions for the following year. Board of Directors Meeting 8 February 15, 2011 at 7:00 P.M.  Director Maruthur said if the Board uses the money for in-state travel; and under Section 3 of the resolution, the Directors are eligible for reimbursement for what they have to do, such as going to different sites and going to meetings, that would deprive the Directors from being reimbursed. and would be out-of-pocket expense to serve on the Board. She stated if an individual cannot afford the gasoline, the in-state travel could be used up so it is something the Board needs to look at because there are more meetings and more issues, and the Board needs to be sensitive to those who cannot afford everything out-of-pocket. Mayor Carney asked if local travel is separate from travel to Washington, and Ms. Yates advised that it is not and is all in the same pool. She noted Finance could use three designations: (1) local travel; (2) in-state travel; and (3) out-of-state travel. Mayor Carney said that a lot of her travel, such as looking at sites, has nothing to do with her staying in a hotel. However, when travel is mentioned, they think about traveling somewhere besides inside town; and there is no way to distinguish. Ms. Yates replied it is all budgeted in one line item. Director McCabe suggested that she look at what kind of sub-accounts she thinks are appropriate and send it back to the Board through the City Manager. Director Maruthur said that her point was “want” versus “need.” She stated the Directors need to go to certain sites to investigate items that are on the agenda, which is a need. Regarding some of the in-state travel, which includes lodging, she does not know how many would go and if they really need that. She stressed that the Board needs to preserve the local travel because that is required for the functioning of the Directors’ position on the Board. Director Garcia stated from what she understands from the Finance Director and the needs during the budgeting process or any changes to the budget, the Directors have the ability to identify how they want to allocate those budgets in their area, as well as to what level of detail; and this system can track to whatever level of detail the Directors would wish to see it. She said she has confidence that would be done and would respectfully request a “yes” vote on this resolution. Director Daniel questioned if the Board did not previously vote on zero amount of money for travel, and City Manager Lance Hudnell advised there is $5,000 in the Board’s general budget line. He stated at a previous meeting, the Board voted to spend Board of Directors Meeting 9 February 15, 2011 at 7:00 P.M. zero dollars on the out-of-state travel, but there is still budget for in-state travel and/or local reimbursement. City Attorney Brian Albright pointed out that the 2011 Budget appropriated $5,000, and some of that has been spent for the Arkansas Municipal League Winter Conference in-state; but the Board voted to spend zero dollars on the National League of Cities Conference in Washington, DC. Therefore, there is still some money ($5,000, less what was spent for the AML Winter Conference); and that money is still available for whatever appropriations the Board might choose to make. However, it is eligible for local reimbursement of mileage and out-of-pocket expenses. Director Maruthur said she wants to make sure there is enough to be allocated for the Board to function; and the way this is written, she is not going to support it. She stated if this is all in one pot and the money is allocated because of somebody’s lodging, the Directors are limited. She noted she does not want to see any Director not be able to get a reimbursement for having to function on the Board. City Attorney Brian Albright explained there is a resolution already in place from 1995 (Resolution No. 3226), and it already provides all of this. He advised this proposed resolution would change that to include language that would require out-of-state events on behalf of the City to be rotated among the individual Board Members, and it would make out-of-state travel be subject to available funding in the Board of Directors’ travel budget line items just like the in-state. He added the reimbursements and the mileage are already there and will continue to be there because what is on the table for discussion tonight is not a blanket repeal of Resolution No. 3226 but passage of a new resolution that would adopt a new policy, which would repeal that previous resolution. Director Maruthur asked if he was saying the Directors have a guarantee that if the money is used up with in-state traveling and lodging, they would still be reimbursed for local travel; and City Attorney Brian Albright replied that he is not saying there is a guarantee to that. City Manager Lance Hudnell pointed out the Board would consider that as part of their budget review either at the beginning of the year or at mid-year. Director Garcia stressed this resolution does not change anything in the budget and does not change any allocation but is adding additional language to the Board’s out-of-state travel if it is budgeted and funded. Board of Directors Meeting 10 February 15, 2011 at 7:00 P.M.  Mayor Carney pointed out that the Directors do not go out of state without having it budgeted before time; and they cannot, at their discretion, go to a conference that has not been budgeted. She added it is not going to change anything with the local travel. Director Maruthur said she understands that but is still not comfortable with it. However, this is an improvement over what was previously in place. At this time, Director Keheley called for the question. Mayor Carney then called for a vote on the motion to adopt the resolution; and roll call, the following voted “aye”: Directors Jones, Keheley, McCabe, Garcia, Daniel, and Carney, total 6. Voting “no”: Director Maruthur; motion carried. Whereupon the resolution was declared adopted. 17 Proposed Ordinance No. O-11-3 An ordinance entitled, “AN ORDINANCE WAIVING THE REQUIREMENTS OF COMPETITIVE BIDDING FOR CERTAIN SERVICES RELATED TO THE OPERATION AND MAINTENANCE OF A FLOOD WARNING INFORMATION SYSTEM THROUGH A JOINT FUNDING CONTRACT WITH THE UNITED STATES DEPARTMENT OF INTERIOR, U. S. GEOLOGICAL SURVEY (USGS); 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 adopted as read?” and upon motion of Director Maruthur, duly seconded by Director Keheley, that the ordinance be adopted as read. Upon discussion, Mr. Steve Mallett, Deputy City Manager for Public Works and Utilities, stated staff recommends waiving competitive bidding for services related to the operation and maintenance of a flood warning information system through a joint funding contract with the United States Department of the Interior U. S. Geological Survey (USGS); and the City’s financial obligation for the year 2011, as included in the contract, is $55,000. In June 2008, the City installed with the USGS, through a cooperative agreement, four continuous record-stream, flow-gauging stations and two separate precipitation gauging stations. He stated those are primarily just north of downtown in the Whittington/Park area and in the National Forest, and there is one Board of Directors Meeting 11 February 15, 2011 at 7:00 P.M. other at the Belding Street bridge by the Greenway. He explained this allows for City officials to alert businesses, residents and tourists of potential flooding in the downtown area. He stated this system will aid with the collection of data that can be used for flood frequency analysis, and all this information can be used in the future to aid in the scoping and design of a system to ultimately eliminate flooding in the downtown area. He mentioned another added value this system contributes to Hot Springs is with respect to the City’s participation in the National Flood Insurance Program (NFIP). He advised that Hot Springs is currently rated a Class 8 in its participation in the NFIP, which means the citizens receive a ten percent savings on their flood insurance premiums and believes this flood warning system is a large part of the City’s receiving that Class 8. Director Maruthur pointed out the first phase of the flood mitigation took place with FEMA funds as a result of a plan to drill a hole through West Mountain and was one mile long and 30 feet in diameter, but that was defeated. She said with the remaining funds of FEMA, the City began the improvements for the wastewater and the tunnel that runs under Bathhouse Row and is continuing the progress. She thanked everyone who has worked to accomplish this. Mr. Mallett added that the City is close to receiving grant funding that will be utilized to clean out the tunnel and provide some structural repairs to the tunnel. He said this was applied for through West Central Planning and Development District. Mayor Carney then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Keheley, McCabe, Garcia, Daniel, and Carney, total 7; motion unanimously carried. Whereupon the ordinance was declared adopted. 11 Proposed Resolution No. R-11-22 A resolution entitled, “A RESOLUTION REVISING THE 2011 BUDGET BY APPROPRIATING FUNDS FOR CERTAIN PRIOR YEAR EXPENDITURES,” was taken from the agenda and read by title only. A motion was made by Director Jones, duly seconded by Director Maruthur, that the resolution be adopted as read. Board of Directors Meeting 12 February 15, 2011 at 7:00 P.M.  Upon discussion, Finance Director Dorethea Yates explained that based on Arkansas law, all of the City’s appropriations expire at the end of the fiscal year, which is December 31. She advised each year, the City goes through a routine process for budgeting which the Board approves in December; and a new budget is formed for the coming year. She added the amounts in these budgets are called appropriations, and this process is governed by State law and is covered in Arkansas Code Annotated §14-47-125 for cities which are under the city manager form of government. She pointed out in a perfect accounting world, the City would start projects at the beginning of the year; and they would be completed on December 31, which would eliminate the “housekeeping” the City has to do. However, in the real world, projects are started and may go on for several years. She said in order to make sure there is an appropriation for a project that extends beyond a year, it requires the Board to revise the budget; and this process is also covered in Arkansas Code Annotated §14-47-125. She then read Subsection b of the Code: “The Board may alter or revise the budget from time to time, and unpledged funds appropriated by the Board for any specific purpose may, by subsequent action of the Board, be appropriated to another purpose, subject to the following exceptions: (1) funds resulting from taxes levied under statute or ordinance for a specific purpose may not be diverted to another purpose; and (2) appropriated funds may not be diverted to another purpose where any creditor of the municipality would be prejudiced thereby.” She said the City has routinely requested that the budget be revised each year to appropriate money for projects which are carried over from a previous year. She explained that the accounting department closes out the books but is still paying bills in January for the previous year. After closing out the books, the accounting department looks at purchase orders that are still there for which the City is obligated, but the work has not yet been performed or the goods have not yet been received. She added the accounting department contacts the department heads and asks them if this is still a project that is ongoing. Based on that, the accounting department puts together a request for reappropriations; and this process is further clarified in the City’s Code of Ordinances. She then read the City ordinance: “All appropriations lapse at year-end. Any encumbered appropriations for major capital projects and capital assets at year-end may be reappropriated by the Board of Directors in the subsequent year.” She said that she is requesting a reappropriation of approximately $7.3 million, and this is in accordance with state and local law; and staff recommends that the Board revise the 2011 budget as it has been empowered by law. She stated the total amount of the reappropriations is $7.3 million. She advised of that $7.3 million, about $4.2 million are wastewater projects from Wastewater Bond Proceeds; and those projects are still ongoing. Board of Directors Meeting 13 February 15, 2011 at 7:00 P.M.  Director Maruthur said she received several phone calls and questioned why the 2009 allocation was not paid in 2010. She stated it broke the pattern with the RJN Group that the City is reallocating $1,054,000. She asked that Ms. Yates explain why this is not done the way it previously was. Ms. Yates explained this is the third year for this project and has gone on for two more years, and the City is still working on the project. She stated the purchase order was still out there, and the work had not been completed; and the City is still obligated for it. Director Maruthur asked if this is the pattern the City has always used, and Ms. Yates advised that it is routine. City Manager Lance Hudnell added it would have been a reappropriation in 2010, and there would have been some work on that contract in 2010. However it is not finished so now there will be another reappropriation in 2011 for the part that is yet remaining. He added there would be a large piece of it remaining in 2010, and now a small piece remaining in 2011. Director Keheley commented according to the breakout that was provided to the Board with detail, that was Phase 2b, so there are different phases in some of these contracts as large as this one. Director Garcia asked if it is correct that the impact of what was already budgeted for expenditures and revenues in the 2011 budget has zero impact. Ms. Yates advised that the funds that are be reappropriated for 2011 will be paid from the 2010 carryover; and this will increase the budget. However, it is paid from the carryover funds. Director Garcia asked if it increased it on both sides of the equation to have a net impact of zero, and Ms. Yates advised that it did. Director Garcia questioned if these are open contracts and purchase orders where accounting is following the legal guidelines for financial reporting and has nothing to do with any of the contracts or validity and is just the financial requirements. Ms. Yates replied it is just the financial requirements, and these are contracts and purchase orders that have already been approved and created by the appropriate approval authorities, but the City has not received the services. She added the City plans to receive those in 2011 or beyond. Director Keheley said it is her understanding this is a routine item that is done every year for a number of years. She asked if anything has changed in the procedure, and City Manager Lance Hudnell advised that at least for the 33 years he has been with the City, this has been done every year. He mentioned with the leadership of Finance Director Dorethea Yates and Accounting/Purchasing Manager Joy Black, over the past few years, the list has been cut down particularly on smaller items. He said the larger Board of Directors Meeting 14 February 15, 2011 at 7:00 P.M. contracts do carry over for years because they are big projects and take several years to complete. However, for many of the smaller items, the accounting department tries to cut off the purchasing deadline in mid-November and tries to cut off capital a little earlier than that to try to ensure the City gets as many products and services as it can completed by the end of the year. He stated every year, Ms. Yates and the Finance Department start working with the department heads to get those purchase orders closed out, get the goods in, and stop issuing any new purchase orders so there is no new purchase orders to carry over. He mentioned that years ago, there were six to eight pages of reappropriations; but in the last 10 to15 years, those have been cut down so there are not so many, particularly of the smaller items, to carry over. Director Keheley asked if the auditors review this and support the City’s procedure, and Ms. Yates replied that they did. Director Maruthur commented this is a reappropriation; and in the future, she does not think it should be on the Consent Agenda because the public needs to know what is transpiring. She requested that this be placed under New Business in the future. She pointed out that it makes people feel uncomfortable that something is going on they do not understand; and for clarification, the Board needs to have open discussion about this, not just at the agenda meeting. She stated there was some discussion about it, but many things were not clear; and it is important for citizens to know what the Board is doing and where the money is going so they feel assured their taxes are being properly spent. Mr. Wallace Marroy, 117 Thornbury Court, said it would be helpful to know how this originated and came about; and it caused some concern. However, this has helped him understand; and he appreciates the job the Board is doing. Ms. Mary Bournival, 113 Foxwood Street, said she was thankful for the clarification because she was confused about the $7.3 million. She asked if this money is already appropriated and being moved forward to the 2011 budget or if there will have to be a new way to finance this, such as increasing fees, such as stormwater fees. City Manager Lance Hudnell advised that it does not impact the current budget because it is a carryover from the previous budget. Also, it does not impact any fees, and the rates that are established to cover the bond issue, etc. are already established. Director Maruthur stressed that is why this needs to be under New Business and not on Consent Agenda. Board of Directors Meeting 15 February 15, 2011 at 7:00 P.M.  Mayor Carney then called for a vote on the motion to adopt; and upon roll call, the following voted “aye”: Directors Maruthur, Jones, Keheley, McCabe, Garcia, Daniel, and Carney, total 7; motion unanimously carried. Whereupon the resolution was declared adopted. OTHER BUSINESS 18 Board of Directors Items for Discussion Director Garcia expressed appreciation to National Park Community College, their music department, and their culinary class for making the Forest Lakes Valentine’s party very special. 19 City Manager’s Report City Manager Lance Hudnell gave the following report: a. State of the City Report At this time, City Manager Lance Hudnell gave the State of the City Report as required by Arkansas law. Director Maruthur stated that the 2010 Census was mentioned and asked if he could provide what the census was as far as the City’s loss in residents because the projection was 39,000; but it is 35,750. She said that was a negative impact of $1.6 million. She stressed the City needs to focus on bringing people into the City, not just making it a place to visit and go to events. She asked that City Manager Lance Hudnell explain the impact that was set out in his memo. City Manager Lance Hudnell stated the preliminary census number was 35,193, which is a loss of approximately 500. He said the projection was 39,000; but in early March, the City will receive the detailed (block) statistics, which gives the counts and more detail with regard to ownership versus Board of Directors Meeting 16 February 15, 2011 at 7:00 P.M. rental, vacancy rates, etc. which can be compared from one census to another. He noted that comparisons can begin around the City to see where the loss was and that might provide some explanation as to why. He added that Ms. Diane Morrison, MPO Study Director, helped with the census this year; and he has asked her and the GIS Department to begin an analysis of that as soon as they can and also to explore the procedures for appeal of those numbers. However, there is a procedure to go through for that. He explained the impact of that would primarily be with regard to the City’s Turnback Funds. He advised that the City receives General Turnback Funds that come to the General Fund and receives Street Turnback Funds that go back to the Street Fund. He commented if the Arkansas Municipal League’s projected per capita amount is correct and based on the fact that the City budgeted for 39,000, then it would be a loss of about $70,000 to the General Fund and around $300,000 to the Street Fund. He said there are factors that will not be known until later in the year as to whether that turns out to be true or not because the City’s turnback is based on state revenue. He stated if the state revenue pot from which Turnback Funds are generated rose, then the City might be okay. However, if the state revenues from which the City’s Turnback Funds are generated decreases and the City has a decrease in the per capita amount and a decrease in the number of people who are applying that per capita amount against, there could be a double hit but will not know that until later in the year. b. Other City Manager Items 1. On the Consent Agenda, the Board approved the following: (1) purchase of 16 police cars; and a couple of those are by federal grant; (2) the City is participating again in Entergy’s Arkansas Smart program through a consulting firm known as CLEAResult, which is of no expense to the City; but they do require that the City enter into a Memorandum of Agreement; and last year, the City received $8,000 rebate and tries to use those funds to do more lighting projects to get even more rebates; (3) some pumps were acquired for the Wastewater System; and there were two projects related to the Greenway. The first is a 100 percent grant that is being applied for through some new funding for the Utility Service Trail Center, which will be at the end of the Greenway. This is a 100 percent grant from a new pot of funds that has recently become available. The only requirement on the City’s part, if it were needed because bids come in low, might be some dirt work by the Street Department; (4) awarded a contract to Spa Construction for a grant that was previously received for the Greenway in the Sanders Plumbing area, and they gave the City some property several years ago. The Board awarded the contract to begin that grant, and there is a $10,000 donation Board of Directors Meeting 17 February 15, 2011 at 7:00 P.M. from Friends of the Park that helps provide part of the City’s match, which is an 80-20 grant. 2. Police Chief David Flory will start on February 28, and the Chamber of Commerce is hosting a reception on Thursday, March 3, from 4:30 p.m. to 6:00 p.m. for him and his wife, Dayle. He expressed appreciation to the Chamber of Commerce doing that for the City, and it will be for the general public as well. 3. There are several boards and commission openings, and individuals may come by his office and pick up an application or go to the City’s website. 4. Parks and Recreation Department is accepting applications until March 14 for girls wishing to play youth softball at Kimery Park. Age groups range from 4 to 13, and the season will run April through June. For more information, citizens may call 321-6817. 5. There will be a meeting with the builders on Tuesday, February 22, from 2 p.m. to 4 p.m. at the Transportation Depot. Over the next several months, the Planning Department will begin a review of various codes, regulations, etc. The first part of that, at Mayor Carney’s suggestion, was to have a meeting with the builders to get their input on the front-end to see what concerns there might be there as the City begins the process of reviewing those codes before anything is drafted. 6. There will be a work session following the agenda meeting next Tuesday, February 22, regarding the water treatment facilities; and then the public forum will be on Monday, February 28, at 6 p.m., in Room 204, Hot Springs Civic and Convention Center. That is primarily to hear from property owners, ratepayers, citizens, and anyone who wants to attend and hear a brief presentation and then give their input before the Board begins its deliberations on that project. 7. There will be an informal meeting on Thursday, at 12 noon, of citizens interested in exploring possible travel to Sister City Hanamaki, Japan; and this will be held at the Quapaw Café in the Quapaw Baths and Spa. 8. The Board previously declared March as Fine Arts Month, and the Arts Advisory Committee has a list of activities that will soon be posted on the city’s website; and they will be sharing those at the next Board Meeting. Thanks to Downtown Merchants and others, Ms. Carole Katchen, chairperson of the Arts Advisory Board of Directors Meeting 18 February 15, 2011 at 7:00 P.M. Committee, is very excited about how all of that is coming together. The National Park is cooperating with that, as well as with a statue display for the sculpture competition. 9. Operation Clean Sweep will begin in March with the first area being behind the race track. Four areas were done last year and plan to do that many this year. 10. He expressed appreciation to the Street Department, Fleet Service Department, Fire Department, Police Department, Sanitation Department, and Water and Sewer Departments for their work during the recent snow event. 20 ADJOURNMENT There being no further business to come before the Board, a motion was made by Director Daniel, duly seconded by Director Garcia, that the meeting be adjourned; and upon voice vote, the motion unanimously carried. The meeting adjourned at 8:20 p.m., to meet again on Tuesday, March 1, 2011, at 7:00 p.m. ATTEST: _____________________ APPROVED:__________________ Lance Spicer, City Clerk Ruth Carney, Mayor Board of Directors Meeting 19 February 15, 2011 at 7:00 P.M.