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17 SEP 07 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. REGULAR CITY COUNCIL MEETING - CITY HALL - #1 MUNICIPAL DRIVE The City Council of the City of Jacksonville, Arkansas met in regular session on September 7, 2017 at the regular meeting place of the City th Council. Arnold Elementary 5 Grade Class delivered a rendition of “Ragged Ole Flag” and led a standing audience in the “Pledge of Allegiance” to the flag. Councilman Bolden delivered the invocation. ROLL CALL: City Councilman: Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins answered ROLL CALL. Mayor Fletcher also answered ROLL CALL declaring a quorum. Councilmen Mashburn and Sansing were absent. PRESENT EIGHT (8), ABSENT (2). Others present for the meeting were: City Attorney Robert Bamburg, Finance Director Cheryl Erkel, Director of Administration Jim Durham, Director of Engineering Jay Whisker, Professional Administrative Consultant Geoffrey Herweg, IT Director Scott Rothlisberger, Parks and Recreation Director Kevin House, CDBG Director Theresa Watson, Director of Public Works Jim Oakley, 911 Director Tabby Hughes, Planning Commission Chairman Jim Moore, Dr. Robert Price, Rick Kron, Jeannie Herweg, Lida Feller, State Representative Bob Johnson, Glenda Fletcher, Marie Fletcher, Robin Baker, Pat Thoman, Ken Fletcher, Tammy Bourdo, Darlene Durham, Michelle Lewis, Nikki Wilmoth, Ron McDaniel, Kim Lett, Gerald Clark, Mike Wilson, Daniel Gray, Roger Sundermeier, LaConda Watson, interested citizens, and members of the press. PRESENTATION OF MINUTES: Mayor Fletcher presented the minutes of the regular City Council meeting of August 17, 2017 for approval and/or correction at the next regularly scheduled City Council meeting. APPROVAL AND/OR CORRECTION OF MINUTES: Councilman Ray moved, seconded by Councilman Bolden that the minutes of the regular City Council meeting of 20 July 2017 be APPROVED. MOTION CARRIED. CONSENT AGENDA: REGULAR MONTHLY REPORT/ENGINEERING DEPARTMENT Councilman Ray moved, seconded by Councilman McCleary to approve the regular monthly report for August 2017. PERMITS/LICENSE ISSUED INSPECTIONS PERFORMED Building Permits 22 Building Inspections 36 Business Licenses 9 Electrical 34 Plumbing 26 HVACR 15 ROLL CALL: Councilmen: Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. MOTION CARRIED. 1 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. WATER DEPARTMENT: WASTEWATER DEPARTMENTS: FIRE DEPARTMENT: POLICE DEPARTMENT: Public Notice: Applying for Edward Byrne Justice Assistance Grant City Attorney Bamburg stated that the Department is eligible for a grant totaling $18,913.75, which will be used to purchase ten X26P Tasers with holsters and batteries and fifteen 32GB Body Cameras. He noted that legal importance of body cams. Mayor Fletcher invited public comment. No public comment was offered. Councilman Elliott moved, seconded by Councilman Bolden to approve application for the Edward Byrne Grant. MOTION CARRIED. STREET DEPARTMENT: SANITATION DEPARTMENT: PARKS & RECREATION: PLANNING COMMISSION: GENERAL: a. SECOND READING ORDINANCE 1567 (#03-2017) AN ORDINANCE AUTHORIZING A LEASE AGREEMENT FOR UPGRADES AND IMPROVEMENTS TO EQUIPMENT AND INTERNET SERVICE FOR CITY HALL, THE POLICE DEPARTMENT, AND OTHER CITY FACILITIES THROUGH A THREE (3) YEAR LEASE AGREEMENT; PROVIDING FOR PAYMENT OF THE LEASE OBLIGATION; DECLARING AN EMERGENCY; AND, PRESCRIBING OTHER MATTERS RELATING THERETO. Councilman Ray moved, seconded by Councilman Traylor to place Ordinance 1567 on SECOND READING. ROLL CALL: Alderman Elliott, Bolden, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). Councilman McCleary abstained. MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1567. Councilman Ray moved, seconded by Alderman Councilman Bolden to approve SEONCD READING and suspend the rules and place Ordinance 1567 on THIRD and FINAL READING. ROLL CALL: Councilmen Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1567. Councilman Elliott moved, seconded by Councilman Ray that Ordinance 1567 be APPROVED and ADOPTED. ROLL CALL: Alderman Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). MOTION CARRIED. Councilman Ray moved, seconded by Councilman Bolden to attach the EMERGENCY CLAUSE TO Ordinance 1567. Alderman Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). MOTION CARRIED. 2 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. th ORDINANCE 1566 (#02-2017) APPROVED AND ADOPTED THIS 7 DAY OF SEPTEMBER, 2017. b. ORDINANCE 1568 (#04-2017) AN ORDINANCE AMENDING THE 2017 BUDGET; MAKING MODIFIED APPROPRIATIONS AND AUTHORIZING EXPENDITURES FOR OPERATION OF VARIOUS DEPARTMENTS OF CITY GOVERNMENT AND THE PURCHASE OF MATERIAL, SUPPLIES, EQUIPMENT, AND SERVICES; COVERING GENERAL FUND OPERATIONS; AND, FOR OTHER PURPOSES. Councilman Ray moved, seconded by Councilman McCleary that Ordinance 1568 be placed on FIRST READING. ROLL CALL: Alderman Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1568. Finance Director Cheryl Erkel referenced a handout, reviewing that the overall projected revenue reduction is 3% or $619,434.00. She related that the budget amendment would only pertain to the General Fund, not any other fund. She stated that the Police Department is being reduced by 6.3% or $484,001.00, Parks is being reduced by 6% or $161,031.00, and the Fire Department is reduced by 3.2% or $154,748.00. She explained that the majority of those reductions are coming from personnel costs due to unfilled positions. She noted that all Department heads have forwarded their end-of-year projections and were good to offer further reductions. She pointed out that 911 reduced their overall budget by 16% or $141,774.00 in addition to any reduction in personnel costs. She explained that other reductions came from equipment, training costs, building repair and maintenance. She related that there was an increase in the operating transfers out, adding there was also an increase in the Department for Director of Administration due to moving Geoffrey Herweg from the Police Department to Director of Administration Department. Councilman Smith questioned of the $484,001.00 coming from the Police Department, where was it taken from and exactly where it is going. Finance Director Cheryl Erkel stated that it is a reduction mostly out of personnel costs, which represents the majority, coming from unfilled positions. She then answered that of the $484,001.00; $453,000.00 represents unfilled personnel costs, which includes salaries, overtime, pension match, FICA match, APERS retirement expense, group insurance, unemployment insurance, and workers’ compensation. Councilman Traylor clarified and Finance Director Cheryl Erkel concurred that this is just for positions that were budgeted but not filled. Councilman Smith questioned if the approximate $30,000.00 remaining would include certificate pay this year. 3 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. Finance Director Cheryl Erkel stated that certificate pay will still be paid this year. Councilman Smith questioned if there is any anticipation for officer lay- offs. Mayor Fletcher stated that he is not anticipating any lay-offs in any Department. Councilman Bolden moved, seconded by Councilman McCleary to APPROVE Ordinance 1568 on FIRST READING and suspend the rules and place on SECOND READING. ROLL CALL: Alderman Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1568. Councilman Ray moved, seconded by Councilman McCleary to further suspend the rules and place Ordinance 1568 on THIRD AND FINAL READING. ROLL CALL: Alderman Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1568. Councilman Ray moved, seconded by Alderman Councilman Traylor that Ordinance 1568 be APPROVED AND ADOPTED. ROLL CALL: Councilmen Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). MOTION CARRIED. th ORDINANCE 1568 (#04-2017) APPROVED AND ADOPTED THIS 7 DAY OF SEPTEMBER, 2017. c. 2016 Audit by McAlister & Associates Gerald Clark presented the 2016 Comprehensive Annual Financial Report for the City of Jacksonville. th Calendar year 2016 marks the 20 consecutive year that the City has prepared a Comprehensive Annual Financial Report. The 2016 annual report was prepared by the City’s Finance Department. It contains financial statements audited by the City’s auditing firm, McAlister & Associates, P.A., CPAs, and also pertinent financial, economic, demographic, and statistical information related to the City of Jacksonville over a ten- year period. The purpose of the report is to provide the City’s elected officials, citizens, bondholders and other interested parties with detailed information concerning the City’s operations and financial position. Each year since 1997 and including the 2015 report, the City’s CAFR has received the Certificate of Excellence in Financial Reporting awarded by the Government Finance Officers Association of the United States and 4 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. Canada (GFOA). The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. The 2016 Comprehensive Annual Financial Report has also been submitted to GFOA for award consideration. Independent Audit The City is responsible for the accuracy, completeness and fairness of the data presented in the CAFR. The report is prepared by the City’s Finance Department in accordance with standards prescribed by the Governmental Accounting Standards Board (GASB), the Government Financial Officers Association of the United States and Canada (GFOA) and other rule-making bodies. The City is also responsible for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements. Our responsibility as auditors is to conduct the audit in accordance with generally accepted auditing standards and government auditing standards; to express an opinion on the City’s financial statements; and to gather sufficient evidence to provide a basis for our audit opinions. Based upon our audit, we have rendered a “clean”, or unmodified opinion on the City’s financial statements for the year ended December 31, 2016. An unmodified opinion means that, in our opinion, the financial statements have been prepared using accounting principles generally accepted in the United States of America (GAAP), do not contain material misstatements, and are fairly presented. Our Independent Auditor’s Report is presented on page 9 of the CAFR. Management Letter We have issued a formal management letter, included with the annual report, which is a customary by-product of the audit process and is intended to provide management with suggestions and guidance in the ongoing effort to improve internal controls. The management letter contains three comments related to the 2016 audit. FINANCIAL HIGHLIGHTS The following are financial highlights of the 2016 report:  The first two financial statements in the CAFR on pages 26 through 29 are referred to as the government-wide financial statements. These statements include all funds of the City, with the exception of the Police and Fire pension trust funds. They also include the financial statements of the City’s component units which are the Water, Wastewater and A&P Commission. 5 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M.  The first of these government-wide financial statements is the Statement of Net Position. This statement is comparable to a balance sheet for a private business enterprise.  The Statement of Net Position presents information on all of the City’s assets and liabilities on a full accrual basis with the difference between the assets and liabilities reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.  The City’s Statement of Net Position indicates total assets of the City were $63M at the end of 2016. This is a decrease of $1.4M from 2015. Of the total assets, $52.1M is capital assets (infrastructure, equipment, buildings), $5.1M is cash and investments, and $5.8M is accounts receivable and other assets. Total liabilities of the City were $34.1M, an increase of $6.9M from 2015. Of the $34.1M total liabilities, $31.4M is considered long-term obligations due beyond one year and $2.7M are considered current and other liabilities. Total assets exceeded total liabilities by $34M at the end of 2016. The amount by which assets exceed liabilities is referred to as the City’s “Net Position”. Net position is essentially composed of three components: the largest of which, for the City, is its investment in capital assets such as land, buildings, infrastructure, and machinery and equipment. This amount at the end of 2016 was $43.9M or 129% of total net position. These capital assets are used to provide services to the community and, as a result, they are not available for future spending. An additional portion of the City’s net position is subject to external restrictions as to how the funds may be used, such as street and grant funds. At the end of 2016, the City’s restricted net position totaled $4.2M or 12% of the total net position of the City. The City’s unrestricted net position at the end of 2016 was a deficit balance of $14M. 6 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. Summary Statement of Net Position December 31, 2016 and 2015 Net Position Governmental Activities Business-type Activities Total 2016 2015 2016 2015 2016 2015 $ $ $ $ $ $ Current assets 7,693,507 7,737,967 1,815,992 1,887,825 9,509,499 9,625,792 Noncurrent assets 1,387,033 3,968,223 - - 1,387,033 3,968,223 Capital assets 50,277,632 49,238,976 1,820,668 1,583,417 52,098,300 50,822,393 Total assets 59,358,172 60,945,166 3,636,660 3,471,242 62,994,832 64,416,408 Total deferred outflows of resources 5,306,984 1,772,866 535,175 222,703 5,842,159 1,995,569 Total Assets and Deferred Outflows 64,665,156 62,718,032 4,171,835 3,693,945 68,836,991 66,411,977 Current Liabilities 2,541,550 2,142,601 153,487 352,540 2,695,037 2,495,141 Long-term liabilities 29,557,054 23,662,863 1,845,494 1,042,707 31,402,548 24,705,570 Total liabilities 32,098,604 25,805,464 1,998,981 1,395,247 34,097,585 27,200,711 Total deferred inflows of resources 600,122 525,177 24,096 60,155 624,218 585,332 Total Liabilities and Deferred Inflows 32,698,726 26,330,641 2,023,077 1,455,402 34,721,803 27,786,043 Net Position: Net investment in capital assets 42,125,123 43,120,490 1,820,668 1,366,575 43,945,791 44,487,065 Restricted 4,161,056 6,086,120 - - 4,161,056 6,086,120 Unrestricted (14,319,749) (12,819,219) 328,090 871,967 (13,991,659) (11,947,253) $ $ $ $ $ $ Total Net Position 31,966,430 36,387,390 2,148,758 2,238,542 34,115,188 38,625,934  The second of the government-wide financial statements is the Statement of Activities. This statement is comparable to an income statement for a private business enterprise.  The Statement of Activities presents information showing revenues and expenses on a full accrual basis and how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave) 7 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M.  The Statement of Activities indicates total revenues of the City decreased in 2016 over 2015. 2016 revenues were $26.8M compared to $27.4M in 2015, a decrease of about $602,000 or 2.2%. Total expenses increased to $31.3M in 2016 from $25.7M in 2015, largely attributable to an increase in the City’s proportionate share of APERS and LOPFI pension liabilities. Overall, expenditures exceeded revenues by $4.5M in 2016, resulting in a decrease in net position of a similar amount for 2016. Summary Statement of Change in Net Position December 31, 2016 and 2015 Changes in Net Position Governmental Activities Business-type Activities Total 2016 2015 2016 2015 2016 2015 Revenues Program revenues: Charges for services $ 2,353,228 $ 2,521,170 $ 3,405,200 $ 3,431,652 $ 5,758,428 $ 5,952,822 Operating grants and contributions 4,413,390 4,145,981 11,947 12,460 4,425,337 4,158,441 Capital grants and contributions 259,177 933,951 - - 259,177 933,951 General revenues: Property taxes 871,178 845,840 - - 871,178 845,840 Sales taxes 13,781,154 13,798,792 - - 13,781,154 13,798,792 Franchise taxes 1,105,865 1,262,049 - - 1,105,865 1,262,049 Investment income 89,570 15,644 1,539 993 91,109 16,637 Intergovernmental revenues 451,246 454,419 - - 451,246 454,419 Gain/(loss) on sales of capital assets 37,520 (69,038) 45,250 74,831 82,770 5,793 Total revenues 23,362,328 23,908,809 3,463,936 3,519,937 26,826,264 27,428,746 Expenses General government 3,439,457 2,913,629 - - 3,439,457 2,913,629 Public works 2,987,291 2,832,455 - - 2,987,291 2,832,455 Parks and recreation services 4,109,087 3,547,411 - - 4,109,087 3,547,411 Public safety 16,302,436 12,391,619 - - 16,302,436 12,391,619 Housing and neighborhood programs 240,454 200,669 - - 240,454 200,669 Debt issuance costs - 145,014 - - - 145,014 Agent fees on long-term debt 6,844 33,833 - - 6,844 33,833 Interest on long-term debt 262,728 209,386 - - 262,728 209,386 Sanitation services - - 1,516,551 1,459,139 1,516,551 1,459,139 Emergency medical services - - 2,472,158 2,005,367 2,472,158 2,005,367 Total expenses 27,348,297 22,274,017 3,988,709 3,464,506 31,337,006 25,738,523 Change in net position before transfers (3,985,969) 1,634,792 (524,773) 55,431 (4,510,742) 1,690,223 Transfers (434,989) (425,000) 434,989 425,000 - - Change in net position (4,420,959) 1,209,792 (89,784) 480,431 (4,510,742) 1,690,223 Net Position, Beginning of Year, as previously reported 36,387,390 47,368,930 2,238,542 2,663,674 38,625,932 50,032,604 Change in accounting principle* - (12,191,329) - (905,563) - (13,096,892) Net Position, Beginning of Year, as restated 36,387,390 35,177,601 2,238,542 1,758,111 38,625,932 36,935,712 Net Position - December 31 $ 31,966,430 $ 36,387,390 $ 2,148,758 $ 2,238,542 $ 34,115,188 $ 38,625,934 8 Percent Percent of Change 201420152016TotalPrior Year Revenues Property taxes$ 802,438$ 833,835$ 839,052 3.6%0.6% Sales taxes 13,406,409 13,798,792 13,781,154 59.0(0.1) Licenses and permits 133,586 136,274 226,274 1.066.0 Intergovernmental 4,729,464 4,575,835 4,847,747 20.85.9 Charges for services 1,119,187 1,150,933 1,097,253 4.7(4.7) Fines and fees 840,609 651,626 562,916 2.4(13.6) CITY OF JACKSONVILLE Utility franchise taxes 1,137,932 1,262,049 1,105,865 4.7(12.4) Investment income 5,059 15,644 89,570 0.4472.6 REGULAR CITY COUNCIL MEETING Miscellaneous 932,527 1,437,312 806,294 3.5(43.9) Total revenues$ 23,107,211$ 23,862,300$ 23,356,125 100.00% (2.1) % SEPTEMBER 7, 2017 Expenditures General government $ 2,906,919 $ 2,708,248 $ 2,781,035 10.7% 2.7% 7:00 P.M. – 9:01 P.M. Public works 2,528,778 2,802,715 2,375,150 9.2(15.3) Parks and recreation 3,025,810 3,292,345 3,936,111 15.219.6 Police 7,149,003 7,347,242 7,370,238 28.50.3 Fire 4,324,497 4,472,701 7,214,517 27.961.3 Emergency communications 714,945 675,758 699,037 2.73.4  Narrowing the focus from the City-wide financial statements to the Animal control 305,998 287,637 280,536 1.1(2.5) Housing and neighborhood programs 238,824 202,067 226,768 0.912.2 Debt service 2,031,662 6,784,314 1,004,3783.9(85.2) governmental funds financial statements, these funds include all Total expenditures$ 23,226,436$ 28,573,027$ 25,887,770 100.00% (9.4) % funds with the exception of the pension trust funds, and the enterprise funds (Sanitation and EMS). Governmental funds are reported on the modified accrual basis of accounting, which combines accrual-basis accounting with cash-basis accounts. Under this method, revenues are recognized when they become available and measurable, generally within 60 days after year-end.  The City’s governmental funds reported total 2016 revenues of $23.3M, down $506K or 2.1% from 2015. Total 2016 expenditures were $25.9M, down $2.7M from $28.6M in 2015. The net position of these funds decreased by approximately $3M during 2016.  Sales tax revenues which account for 59% of all City revenues were $13.8M in 2016. This amount was virtually unchanged from 2015 sales tax revenues, down about $17K. State tax turnbacks and other intergovernmental revenues, such as grants, were $4.8M in 2016 or approximately 21% of revenues; utility franchise taxes were $1.1M or just under 5% of total revenues. Comparative Statement of Revenues and Expenditures-Governmental Funds 9 2016 General Fund Operations Final Variance Budgeted Actual with Final AmountsAmountsBudget Revenues$ 20,794,927$ 20,018,133$ (776,794) Expenditures 19,866,608 19,649,622 216,986 Expenditures in excess of revenues 928,319 368,511 (559,808) CITY OF JACKSONVILLE Other financing sources (uses) Carryover - prior year 249,516 - (249,516) REGULAR CITY COUNCIL MEETING Transfers-in: (From Other Funds) 15,000 12,000 (3,000) Transfers-out (1,192,835) (1,416,145) (223,310) SEPTEMBER 7, 2017 Total other financing sources (uses) (928,319) (1,404,145) (475,826) 7:00 P.M. – 9:01 P.M. Net change in fund balances$ - (1,035,634)$ (1,035,634) Fund balances, January 1 1,876,818 Fund balances, December 31$ 841,184  The City’s General Fund finished 2016 with a fund balance of $841,184 which was a decrease of $1,035,634 from the December 31, 2015 fund balance. General Fund revenues of $20,018,000 were $777,000 under budgeted revenues for the year, while General Fund expenditures of $19,700,000 were $217,000 under budgeted expenditures for 2016.  As a measure of the General Fund’s liquidity, it is useful to compare total General Fund fund balance to total General Fund expenditures. The fund balance of $841,200 at December 31, 2016 represents approximately 4.3% of 2016 actual General Fund expenditures and approximately 4.2% of 2017 General Fund budgeted expenditures. As a general policy, the City’s minimum target at the end of a fiscal year for the fund balance of the General Fund is 60 days (16%) expenditures based on the most recent completed year. At the end of 2016, the balance on hand was approximately 15 days of 2016 budgeted General Fund expenditures. This minimum level of fund balance is required to ensure funds availability for unforeseen emergencies that might impact the City’s ability to pay for basic operations and also to guarantee the payment of debt obligations. 10 General Fund $17,516,497$18,888,911 $20,273,419 $21,059,443 $20,657,218 $22,011,653 $20,677,929 $19,190,962 $17,853,061 $18,663,794 21.0%11.8%14.6%19.1%18.8%19.4%22.4% 28.2% $-Budgeted ExpendituresGF Fund Balance %2017201620152014201320122011201020092008 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 8.9%4.2% Fund Balance% of Budgeted end of Budgeted YearExpendituresPrevious YearExpenditures 2008 17,516,497 3,672,74221.0% 2009 18,888,911 3,552,71418.8% 2010 18,663,794 3,571,85519.1% 2011 17,853,061 3,456,36919.4% 2012 19,190,962 5,404,55528.2% 2013 20,677,929 4,639,31222.4% CITY OF JACKSONVILLE 2014 22,011,653 3,219,85114.6% 2015 20,657,218 2,435,40411.8% REGULAR CITY COUNCIL MEETING 2016 21,059,443 1,876,8188.9% 2017 20,273,419 841,1844.2% SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. General Fund Ending Fund Balance as a Percent of Next Year’s General Fund Budgeted Expenditures In conclusion, he encouraged everyone to read the Management’s Discussion and Analysis included in the financial section beginning on page 13, and also the notes to financial statements which begin on page 45. The MD&A analyzes the City’s financial performance for the year, provides comparisons of the current year results to the prior year, and discusses both the positive and negative aspects of the comparison. The notes to the financial statements provide required detailed disclosures and descriptions of the financial statements. He thanked the City Council for the opportunity to serve as the City’s auditors. 11 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. In response to a question from Councilman Traylor, Mr. Clark explained that there was a statement issued by the Government Accounting Standards known as GASB Statement 68; effective for the 2015 reporting year, which said that if you are a member of a costs sharing multiple employer pension or retirement plan then that retirement plan has actual pension liabilities. He stated that this means assets of that plan that are not enough to cover future obligation to pay benefits to the retirees, that those liabilities are no longer liabilities of the pension plan itself but are liabilities of the individual employers who contribute to that plan. Each of the members of APERS or LOPFI that contribute into that plan, those pension liabilities are now filtered down to each city or agency’s financial statements. He stated that this has resulted in a deficient unassigned net position on a lot of financial statements for cities. He noted that it was implemented in 2015; we recorded 13M in liabilities on the government-wide full accrual financial statements. He again noted that in 2016, we added another 7M. He related that the City continues to pay at the rates assigned for those retirement plans. He stated that it is a journal entry on the full accrual financial statements. Councilman Collins questioned what the net effect of that would be on the budget. Mr. Clark stated that it is really an accounting entry that affects the financial statements, not necessarily the budget. He explained that the City continues to pay in the rates assigned by the retirement plans. He added that on a cash flow basis there is no real change, saying that it is a liability that is recorded on the full accrual basis regarding the financial statements and the result is a deficit net position. He then agreed that this affects many cities, citing that Jacksonville’s proportionate share of APERS is actually less than 1% of their total liabilities and for LOPFI just over 1%. He stated that those retirement plans have large pension liabilities on their statements. He then noted that we get the information from their auditors to book the entries on the City’s financial statements. Mayor Fletcher noted and Mr. Clark confirmed that this would apply to Water and Wastewater too. Mr. Clark noted that consideration is given to that if an entity is considering a bond issue; they fully understand the implications to the financial statements of the employers. Councilman Collins moved, seconded by Councilman Twitty to accept the 2016 Audit as presented. MOTION CARRIED. 12 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. d. Request to open a checking account for the Downtown Revitalization Finance Director Cheryl Erkel requested permission to open the account to track the Downtown Revitalization funds. She stated that this would provide an avenue to track donations and grant funds for this project as well as expenditures. She stated that this would make the process more transparent and easier to follow regarding the cash flow. Mayor Fletcher stated that most cities that have revitalization plans operate under this type of procedure. He stated that the project receives a lot of private donations. Councilman Traylor questioned Mr. Clark if this is his recommendation. Mr. Clark noted that his question would be if this is an 501(C)3. Finance Director Cheryl Erkel answered that there is not 501(C)3 set up. She then noted that the Historical District does operate under a 501(C)3 and is helping with the “Drink by the Glass” campaign. Mr. Clark stated that his next question would be whether the City would own the improvements that are made through the grants and donations. Finance Director Cheryl Erkel stated that if property was purchased through the grants and donations, to become a City park then it would belong to the City. She added that Bentonville and Springdale have both established Downtown Revitalization programs and have received grants from the Walton Foundation and they have purchased shopping centers and revitalized them into City parks downtown. She stated that they have also run these programs through their cities, wanting to emulate Bentonville and Springdale. Mayor Fletcher stated that it provides a way to go after and receive grants. He then clarified that the monies for the Downtown Revitalization and “Drink by the Glass” are two separate issues and funds would not be mixed, noting that a lot of the same people are involved in both. Finance Director Cheryl Erkel clarified that is the reason she mentioned that “Drink by the Glass” funds are being run through the Historical District 501(C)3 because City funds cannot be used for that campaign. Councilman Traylor clarified that all funds received for the Downtown Revitalization would have to be spent on City owned property. Finance Director Cheryl Erkel then answered that this would be set up similar to a Capital Projects Fund. She then concurred that the only funds going into the account would be from grants and donations. She answered Councilman Bolden that the grants would be given to the City 13 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. rather than the entity but for the purpose of the Downtown Revitalization. Mayor Fletcher noted that the group could later apply for a non-profit status. He stated that donations have already been given and we need a vehicle for tracking those funds earmarked solely for this project. He stated that as more donations come in, it may be advantageous for the group to acquire a non-profit status because it also makes it more attractive for people to donate regarding tax purposes. Councilman Twitty requested information in the financial reports regarding the status of the account. Councilman Traylor moved, seconded by Councilman Bolden to authorize a new checking account for the collection of donations and grants regarding the Downtown Revitalization program. MOTION CARRIED. e. DISCUSSION of City Council meeting schedule Discussion ensued and it was the general consensus of the City Council to keep the present meeting schedule as oppose to meeting only once monthly. f. ORDINANCE 1569 (#05-2017) AN ORDINANCE SUBMITTING TO THE VOTERS OF THE CITY OF JACKSONVILLE, ARKANSS, A LOCAL OPTION ELECTION (I.E., LIQOUR BY THE DRINK SALES) WITHIN A DESIGNATED AND IDENTIFIED BOUNDARY FORMERLY KNOWN AS THE GRAY TOWNSHIP/PRECINT 614; DECLARING AN EMERGENCY; AND, FOR OTHER PURPOSES. Councilman Ray moved, seconded by Councilman Traylor that Ordinance 1569 be placed on FIRST READING. ROLL CALL: Alderman Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1569. Dr. Price informed the City Council that this is a historical moment, offering the City Council the second opportunity to continue the process in changing a 60 year old bill that has had such a negative effect on the Jacksonville economy. He stated that this started over a year ago when a nonpartisan bill lead by Representatives Bob Johnson, Carolyn Brown, and Senator Jane English was introduced to the State legislature and passed. He stated that Jacksonville along with Sherwood now has the opportunity to change that status with the upcoming election. He noted that there would be a campaign to educate the voters about the nature of Act 44. Mr. Mike Wilson reflected on the times going back 65 years when the Gray Township was implemented. He expressed his support of putting the question before the voters to allow a focused and tightly regulated restaurant sales of liquor. 14 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. Ms. LaConda Watson, School Board member, Chamber of Commerce Board member, and Executive Director of the Boys and Girls Club also expressed her support, noting it to be a quality of life issue regarding Jacksonville’s progression along with economic growth and prosperity. Dr. Price noted that “Drink by the Glass” was the number one initiative on the Master Plan regarding the importance for Jacksonville. Ms. Karen Abrahamson, owner of Double R Florist offered her support, saying that it will bring jobs with new restaurants and more revenue for the City. She noted that partnering with Sherwood is the optimal avenue for the proposal’s success. Mr. Daniel Gray clarified that this initiative is limited in scope, only allowing restaurants to serve liquor, adding that it would not allow for bars or liquor stores. He noted this to be an opportunity for economic development for Jacksonville. He then pointed out that the Gray Township has nothing to do with the Gray family. State Representative Bob Johnson noted that the Bill that went through the last legislative session started before he was in the House of Representatives, saying that it began in 2013 and required signatures and other requirements so much so that it became cumbersome and the goals were never achieved in order to have an election. He stated that a collective effort brought about changes that focused on each city council pushing forth for an election together. He stated that the barriers to entry for restaurants in Jacksonville are severe and those barriers need to be removed. He stated that Jacksonville needs to look forward and be progressive, noting the economic advantageous for all businesses in Jacksonville. He asked for the City Council to support this initiative. He then noted that a restaurant would need to have 70% of their sales being from prepared food before you can sell alcohol, adding that it would still require a permit from ABC and follow all their rules as well as any State laws. Mayor Fletcher thanked Dr. Price for leading this campaign. He then noted that the original law being proposed in 2013 required 38% of registered voters to sign a petition to even get the question before the voters. He thanked everyone involved for allowing this to be brought before the citizens for a vote. Councilman Bolden stated that while he does not drink, he has fought hard for Jacksonville to have its own school district and even though he is a Bishop, that does not mean he does not look at the totality of Jacksonville’s needs. He stated that this City needs revenue and the only way to have a good steak house or have lobster is to be able to offer restaurants this opportunity. Mayor Fletcher offered anyone present to speak in opposition to Ordinance 1569 and no one presented. 15 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. Director of Administration stated that of all the people in the room, he and City Engineer Whisker could tell from personal experience, year after year they desperately tried to get those major restaurants. He then added that they have gotten good restaurants such as Firehouse Subs but they are all non-alcohol. He stated that is one of the first questions asked and when understand the current situation they seem to lose interest. Councilman Ray moved, seconded by Councilman McCleary to APPROVE Ordinance 1569 on FIRST READING and suspend the rules and place on SECOND READING. ROLL CALL: Alderman Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1569. Councilman Ray moved, seconded by Councilman McCleary to further suspend the rules and place Ordinance 1569 on THIRD AND FINAL READING. ROLL CALL: Alderman Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1569. Councilman Ray moved, seconded by Councilman Traylor that Ordinance 1569 be APPROVED AND ADOPTED. ROLL CALL: Councilmen Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). MOTION CARRIED. Councilman Ray moved, seconded by Councilman Collins to attach the EMERGENCY CLAUSE to Ordinance 1569 (#05-2017). ROLL CALL: Councilmen Elliott, Bolden, McCleary, Ray, Traylor, Twitty, Smith, and Collins voted AYE. NAY (0). MOTION CARRIED. th ORDINANCE 1569 (#05-2017) APPROVED AND ADOPTED THIS 7 DAY OF SEPTEMBER, 2017. g. Retirement Recognition of Director of Administration Jim Durham Director of Administration Jim Durham related that he has served in one manner or another under the last four mayors. He explained that Mayor John Harden was instrumental when the Parks and Recreation as well as the Hospital was built. He related that his father was on the Hospital Board and he was given the job of cutting the grass at age 13. He added that the following year the Martin Street Recreation Center and pool was opened and they needed a part-time maintenance man. He related that his father was also on the Parks Commission so he worked to maintain the pool and worked as a part-time life guard. He then related that after getting out of college and under Mayor Reid, he ran for City Council and served 3 terms. He stated that following that under Mayor Swaim he was appointed to the Civil Service for two partial terms and two full terms. He added that including his time as the Director of Administration, he has been around for a total of 4 Police Chiefs, a Fire Chief and an Assistant Fire Chief. He stated that he feels honored that he has had this opportunity. 16 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. He then noted that Mayor Swaim married him and his wife 30 years ago. He stated that under Mayor Fletcher he was brought in as his “right-hand man”; and I have been honored to have that position. He stated that he wanted to mention some things that every member of the Council has been a part of, regarding their having blessed this with their approval. He recalled that one of the first things was the flood and there was a need to have an exit out of Tara Mount and he negotiated a lot listed for $29,900.00 down to $19,900.00, which the City purchased. He then recalled that the City lost an annexation vote but he told the Mayor that while the residents may not have wanted the annexation the businesses did. He stated that he was successful with a petition drive, obtaining way more than the 51% of the property owners, and the City took in 540 acres. He related that at that time former Finance Director Paul Mushrush said that following the annexation, it increased the City’s revenue by 30 to 35 thousand dollars monthly or $400,000.00 annually. He noted that was the same time we lost almost 1M dollars because of the Census. He stated that he was always trying to look for ways to save the City money. He then related that they completed the Police shooting range and the Fire burn tower, which was one of Mayor Swaim’s things that he had started. He stated that then he got interested in the Arkansas Wireless Information network and spent a lot of time with the County Judges in the State before finally getting them to agree to put Jacksonville into the State-wide system. He noted that the City was spending $60,000 to almost $100,000 annually in quarterly FCC alignments and maintenance/repair on the transmitter, which they took over so I was able to save that money. He stated that following that we wanted to build a new Police station, because the old Police station was falling apart. He stated that Mayor Swaim had left approximately 3M dollars targeted at the Police station repair project and Mayor Fletcher and he (being builders) felt that was like “throwing money in the street”. He stated they agreed they needed to do something that the City really needs because that infrastructure was failing. He related that they went out for bids having a 5.9M dollar budget and the first bids came in at 9 to 10M dollars. He stated that when the second bids came in, it was 1 to 1.2M dollars above the budget, he told Mayor Fletcher that he felt he could value engineer the building down. He stated that he took him about half of one week and he was able to find the difference and the building was built that will be good for the next 40 to 50 years; it is a state of the art building. He then noted that the bridges on Redmond Road and Main Street getting replaced was not done as part of what the people voted for, in fact it was already funded, our Mayor climbed under that bridge and took pictures and went down to the Highway Department to show them that the bridge was in danger of falling down. He convinced them apparently, because very shortly after that they decided to fund that. He stated that they probably would have done that under the tax program that we eventually had but we would have paid that ½ cent tax a lot longer. 17 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. He stated that they got “beat up real bad” over Ricky Hayes; adding that Ricky Hayes was directly responsible for Firehouse Subs, Hardees’s, and Hibbett Sports. He then added that Ryan Kyzer, who is still in town, saying he has his fingers cross for a new announcement shortly. He stated that if a Firehouse Subs or a restaurant that turns 1M a year, which those type things do somewhere in the neighborhood, we are getting 2% City Sales Tax and 2% A&P Tax, so we are getting $40,000 annually. He stated that we paid well for our services regarding Ricky Hayes, adding that he doesn’t care what anybody says. He mentioned Fuzzy’s Tacos, noting that Mayor Fletcher was instrumental in that. He then brought up Edwards grocery store, saying that he went personally over to Little Rock to Edwards grocery store on Cantrell to look for Steve Edwards. He stated that he spoke with the store manager and about 1 month later, Steve Edwards called him. He related that Steve Edwards had asked him if it were his money would he buy the old Knights store or the old Wal-Mart building. He then related that he told Steve Edwards about the new High School being built behind Knights store and for his money that is where he would buy. He stated that two weeks later Steve Edwards call the Mayor and said he was coming to Jacksonville. He said that these are things that a lot of people do not know about. He mentioned Ashland Chemical, Polo Plaza, and the welding academy’s expansions. He stated that if you drive around Jacksonville, every shopping center has either holes filled in or replacement businesses. He stated that they did all this in the worst economy since the Great Depression, which is an astounding thing, adding that he believes people should realize this. He stated that lastly was the Fire station renovation, out of the bond there was $400,000 set aside, saying that he told the Mayor he could do that and still do my job. He stated that he has gone to the Fire station for the last year and make all kinds of quotes, taking that place apart and putting it back together. He added that it is almost completely done and he is almost $100,000 dollars under budget, so the Fire Department will have to figure out what to do with the other $100,000 whether it is to go into an ambulance or if they want to work on another fire station. He stated that there is no way that the Mayor and he or any of the Directors that serve under the Mayor could have done this without the City Council getting involved and approving all these things. He thanked the City Council. He said that finally, he would like to thank Mayor Fletcher; saying his wife had told him that he could learn a lot from Mayor Fletcher. He related that his wife said that Mayor Fletcher loves people and people love him; he has a heart of gold, he’s got to walk with Christ every day. He stated that he would never be able to thank Mayor Fletcher for that because when you work side-by-side with somebody like that, you cannot help but become like them. He added that his wife will say that he is a better person today than he has ever been because of his relationship with Mayor Fletcher. Mayor Fletcher announced that Director Durham’s last day would be October nd 2, adding that there would be a reception and invite the public to come and express their thanks. 18 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. Mayor Fletcher noted that Director Durham had used the word “right-hand”, saying that he could not be more proud. He related that he and Director Durham went to High School together but he did not like Jim Durham in High School, adding that they did not get along when they were on the City Council together. He stated that he has to be honest, saying that he was jealous of Jim Durham because he was a very smart man. He related that Jim Durham has a good memory; he can remember what he ate for supper when he was six years old on his sixth birthday, so I am jealous of those qualities. He stated that Jim Durham has certainly made him a better Mayor and a better person; while I may have softened him up; I think he has hardened me and I needed that. He stated that this is a tough job and you do not want to make anyone mad, adding that no one in their right mind wants to hurt someone. He stated that Bob Stroud had once told him when he was running for office, that he was going to campaign against him because he did not know how to say no. He related that we are who we are in life because of our relationships. He stated that the Lord brings the right people, adding that he believes in divine appointments as Mordecai told Ester, “How do you know you were not created for this moment?” He stated that he was created for this time to be Mayor, saying that he is more certain of this than anything else. He stated that whatever comes next year, Bob is a good man, and we are good friends, we will always be good friends. He said this is not Gary Fletcher’s seat, it belongs to the people and if the people change, I will support Bob whole heartedly. He stated that Jim Durham has taken a lot of hits and he cannot say thank you enough. He added that he cannot brag on Jim Durham enough, in fact he didn’t cover near what he could have said. He stated that Jim Durham has more than made his salary many times over and as far as the annexation, you have no idea but that helped up get into a situation to build the state of the art Police Department. He related that there have been some rough economic times; we are still not over them. He thanked Jim Durham for his service, saying that he dreads the day Jim leaves, but added that he is aware that the Lord has better things for Jim and himself. He added that Jim Durham is not going to disappear. SOCIAL MEDIA MESSAGING Mayor Fletcher stated that it pains him to address this but there is starting to be a great divide in our Community, adding that we do not need that, we have a great Community. He related that he hates that some things are being said, and quite honestly, they are being said that are not factual. He related that is why he hates social media, which is the reason he is not on social media. He continued saying that he has to address one thing that was said on social media from Councilman Smith. He stated “you made a statement and I would like to get where you came up with this”. He stated that it deals with the Police Department working last Monday Labor Day; he read the following statement: “Unfortunately, City administrators have taken away their holiday now, along with other benefits besides insurance.” He asked Councilman Smith to please explain the statement and what benefits she is talking about. 19 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. Councilman Smith answered “how about longevity pay.” Mayor Fletcher responded “let’s start with holidays, what are you talking about?” Councilman Smith questioned if Officers are allowed to take holidays. Mayor Fletcher stated that both Fire and Police are being paid for holidays. Councilman Smith questioned how they are being paid. She then added that it is not on their paychecks. Mayor Fletcher said “I beg your pardon.” Councilman Smith stated “if you could provide proof of that, I would be happy to look at that.” Mayor Fletcher stated “It is on the stubs, it is based in their pay. I have got it right here.” He quoted, “the holiday pay for a starting officer is $1,496.00.” Councilman Smith then question “what about training pay?” Mayor Fletcher responded “their base pay is $37,171.00; their holiday pay is $1,496.00 so a new officer’s pay is $38,667.00. Some cities pay it all at one time at the end of the year, some cities have it broken down in the paychecks.” “We do it broken down in their paychecks.” He referred to Finance Director Cheryl Erkel. Finance Director Cheryl Erkel stated “it is spread out over the year, it is not per pay day, it is paid throughout the year every pay period.” Councilman Smith “so they are compensated for how many holiday, whether they get them or not?” Finance Director Cheryl Erkel “all of them.” Mayor Fletcher added “whether they work them or not.” Councilman Smith “if they have to work it, do they get overtime?” Finance Director Cheryl Erkel “no, everyone in uniform gets paid holidays pay whether they work it or not, it is included in their pay.” Mayor Fletcher stated that he would like to say something, talking about the City Administrator… Councilman Smith “let’s continue, what about tuition reimbursement?” 20 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. Mayor Fletcher stated “we did cut some things to balance the budget, which by the way, you vote on that budget too.” “You have been on the Internet, talking about the Council as if you are something distance from them, you are part of the City Council too.” “By Law I am suppose to bring you a balanced budget, I do it every year and I think you voted the last two budgets anyway or maybe three budgets, coming up third budget.” Councilman Smith “I do not recall on any of those budgets that we voted for, showing that you cut benefits for the Police Department.” Mayor Fletcher “my job is to bring you a balanced budget and I did it.” “If you come up here and sit down, like most Councilmen do and talk to me about what is in the budget, you would know more about what is in it and what is not.” “You have not been in my office; it will be two years come this November.” “You got ticked at me about one particular thing and it has grown since then to the point now, that it has just gotten ugly and it needs to stop because all it does, it divides the Community but it divides the Department too.” Councilman Ray stated “how did we get on this, it is not on the agenda.” Mayor Fletcher concurred, that it is not on the agenda. He continued saying it does not need to be voted to go on the agenda because he has said all that he wanted to say. Councilman Ray questioned “why couldn’t we vote to adjourn?” Mayor Fletcher stated that “she said this publicly and I think I need to address it publicly.” Councilman Smith “I think you have said, I hear you, okay?” Councilman Smith moved, seconded by Councilman Twitty to go into executive session to discuss a personnel matter at approximately 8:33 p.m. ROLL CALL: Councilmen Elliott, Bolden, McCleary, Traylor, Twitty, Smith, and Collins voted AYE. Councilman Ray VOTED NAY (1). MOTION CARRIED. Councilman Traylor moved, seconded by Councilman Collins to return from executive session at approximately 9:00 p.m. MOTION CARRIED. Mayor Fletcher stated that there is no formal action forthcoming from the executive session. APPOINTMENTS: ANNOUNCMENTS: 21 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING SEPTEMBER 7, 2017 7:00 P.M. – 9:01 P.M. ADJOURNMENT: Without objection, Mayor Fletcher adjourned the meeting at approximately 9:01 p.m. MOTION CARRIED. Respectfully, ________________________ _________________________ Susan L. Davitt MAYOR GARY FLETCHER City Clerk-Treasurer 22