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13 NOV 07 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING NOVEMBER 7, 2013 7:00 P.M. – 7:59 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 November 7, 2013 at the regular meeting place of the City Council. Alderman Howard delivered the invocation and Mayor Fletcher led a standing audience in the “Pledge of Allegiance” to the flag. ROLL CALL: Aldermen: Elliott, Sansing, Ray, Traylor, Twitty, Robinson, and Howard answered roll call. Mayor Fletcher also answered ROLL CALL declaring a quorum. PRESENT SEVEN (7), ABSENT (3). Aldermen Bolden, McCleary, and Mashburn were absent. Others present for the meeting were: City Attorney Robert Bamburg, IT Director Barbara McDaniel, Human Resource Director Jill Ross, Finance Director Cheryl Erkel, Police Chief Gary Sipes, Parks and Recreation Director Kevin House, CDBG Director Theresa Watson, Fire Chief Alan Laughy, 911 Communications Director Tabby Hughes, Water Department Field Manager Sal Pappalardo, Glenda Fletcher, Terra Evans, Planning Commissioner Jim Moore, Tommy Dupree, Johnny Simpson, interested citizens, and members of the press. PRESENTATION OF MINUTES: Mayor Fletcher presented the minutes of the regular City Council meeting of October 17, 2013 for approval and/or correction at the next regularly scheduled City Council meeting. APPROVAL AND/OR CORRECTION OF MINUTES: Alderman Howard moved, seconded by Alderman Ray that the minutes of the regular City Council meeting of 3 October 2013 be APPROVED. MOTION CARRIED. CONSENT AGENDA: REGULAR MONTHLY REPORT/ENGINEERING DEPARTMENT Alderman Elliott moved, seconded by Alderman Ray to approve the regular monthly report for October 2013. PERMITS/LICENSE ISSUED INSPECTIONS PERFORMED Building Permits 13 Building Inspections 29 Business Licenses 5 Electrical 41 Plumbing 27 HVACR 19 ROLL CALL: Aldermen: Elliott, Sansing, Ray, Traylor, Twitty, Robinson, and Howard voted AYE. MOTION CARRIED. WATER DEPARTMENT: WASTEWATER DEPARTMENTS: FIRE DEPARTMENT: POLICE DEPARTMENT: STREET DEPARTMENT: 1 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING NOVEMBER 7, 2013 7:00 P.M. – 7:59 P.M. SANITATION DEPARTMENT: PARKS & RECREATION: PLANNING COMMISSION: GENERAL: a. CDBG 2014 Annual Action Plan CDBG Director Theresa Watson explained that the City is required by HUD to submit the Annual Action Plan 45 days prior to the fiscal year’s start. She related that funding is based on the prior amount received, which was $204,006.00. She stated that five public hearings were held and the requests gathered from those hearings are listed at the end of the report. She noted that the projects eligible for funding are marked with red asterisks. Alderman Ray moved, seconded by Alderman Sansing to approve the 2014 CDBG Annual Action Plan as presented. MOTION CARRIED. b. DISCUSSION Valentine Annexation Alderman Ray requested that Mr. Tommy Dupree be allowed to speak to the City Council in favor of the annexation. Mr. Dupree stated that he supports the proposal to annex the area south of Jacksonville. He related that the residents of the area want to be annexed; adding that while the residents are willing this would be the time to move forward. He noted that a majority of the larger land owners are in favor of the annexation, adding that the Reed’s Bridge Battlefield property needs to be included in the annexation. He then related that he would like to add family property located in the farming and agricultural area to the annexation. He stated that the property consists of approximately 48 acres that crosses Valentine. He urged the City Council to proceed with the annexation, pointing out that the area already has City water and sewer. He stated that other City services do not have to be provided all at once, explaining that he has seen Jacksonville grow in bits and pieces over the years when there was not enough money to offer services immediately. He reiterated his desire for the City Council to proceed with the annexation proposal. Alderman Ray noted that the Dupree family has owned property in the area for generations. He stated that he would like to report that according to the Sheriff the crime rate of the area is zero. He stated that cities the size of Jacksonville are land grabbing and if Jacksonville does not annex this property he is afraid North Little Rock will come further up and take in all the property up to Southeastern. He pointed out that the area has the potential for land development, adding that sometime in the future the economy is bound to improve and attract developers. He stated that he feels this land would be very attractive for development, noting that the property already has some City services. He called attention to the expanse of farm land that could be used for developments. He noted the recent clearing of the land on Wooten Road, which connects to Valentine Road. He stated that he would bring the discussion back to the City Council in the near future and at the next opportunity would like to request a favorable vote from the City Council. 2 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING NOVEMBER 7, 2013 7:00 P.M. – 7:59 P.M. City Engineer Whisker presented a PowerPoint property survey map of the proposed annexation area, pointing out the property owners that have volunteered and signed to be annexed into the City of Jacksonville. He stated that annexation can occur by petition, explaining that it requires 51% of property owners that own 51% or more of the property being proposed for annexation. He stated that while the proposal meets those qualifications, it presents an irregular boundary line that makes enforcement difficult. He reviewed the City limit locations and where it connects with the proposed annexed area. Mayor Fletcher noted that at the last legislative session a bill was passed to eliminate enclaves. He stated that in looking at the irregular shape, if the City Council is going to consider annexation, he would like to propose annexing to Hwy. 161. He concurred with City Engineer Whisker that approximately 140 acres of 220 acres, regarding the Wooten Road property, is outside the City and would need to be included in the annexation. He stated that the City would not be able to make promises regarding City services. He went on to say that his main concern is Code Enforcement, adding that after attending the Dick Jeter Day Park he would like to note that those residents make a great community, really great people. He related that Alderman Ray has been a blessing to those people as well as the constituents he serves within the City. He stated that it would be a difficult annexation, adding that time is important. He related that he would like to set up a meeting with the residents to let them know what to expect regarding City services. He clarified that the City would not have to offer all the services immediately. He added however, human nature dictates that a year from now they may forget the benefits from being annexed and expect City services that the City is not able to supply immediately. He stated that the area also has some very serious drainage issues, adding that everyone needs to be aware that the area will require a lot of money and Code Enforcement. He stated that when the City Council reviews the preliminary budget they will realize that they are going to have help in making some tough decisions. He stated that Public Works Director Jim Oakley has the task of cutting approximately $400,000 from his budget. He mentioned services that may have to be reduced in order to operate within the budget. He added that it may not be the same case next year, saying that he is optimistic that some of the projects the City is working on will help generate some new revenues. He reminded the City Council that 63% of budget revenues is sales tax. He reiterated that he would like to host a town hall meeting with the citizens of the area to promote a better understanding. He clarified with City Engineer Whisker that using the map presented, the City does have the required 51% of owners and land mass. Discussion ensued regarding the boundaries being expanded to include other property owners that would want to be included in the annexation. It was noted that most of the property is located within the 100-year flood plain. 3 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING NOVEMBER 7, 2013 7:00 P.M. – 7:59 P.M. Alderman Ray pointed out that the flood plain would not prevent development from being able to occur, saying that he is aware of circumstances where development was built up out of the flood plain. City Engineer Whisker clarified that each tract of land is counted as one person, regarding any one individual that may own several tracts of land they are counted separately for each tract they own. Alderman Ray answered Alderman Twitty that there are approximately 110 homes involved in the proposed annexation. In response to a comment from Mayor Fletcher, City Engineer Whisker clarified that there are five properties south of Wooten Road along Southeastern that have signed to be included in the annexation. He added that there are others further south but because of the numbers, it decreases the 51% criteria. Alderman Ray stated that he feels sure residents on Wooten Road would want to be included in the annexation once they see the direction the proposal is going to move in. He then assured Mayor Fletcher that a town hall meeting could be set up, noting that the community meets the first Monday of each month. He related efforts by the community to address dumping and speeding in the area. Mayor Fletcher encouraged the City Council to attend the town hall meeting once the date has been set. Alderman Ray noted that Senator Chesterfield and Representative Armstrong have the southern part of Jacksonville in their District and have attended the community meetings. He stated they could possibly help with issues in Jacksonville. c. PRESENTATION of the 2014 Budget Finance Director Cheryl Erkel reviewed a handout explaining the internal budget process, pointing out that each director submits a proposed budget to the Finance Department. She related that the Finance Department works with the Human Resource Department regarding personnel costs and then formulates a preliminary budget. She stated that requested expenditures are weighed against projected revenues. The Mayor and Finance Director begin a process of meetings with each director to discuss adjustments and then a preliminary budget is presented to the City Council in November. She noted that the meetings have not yet begun but the process is currently at that stage. She continued saying that a final budget is formulated then presented to the City Council for adoption by Ordinance in December. She pointed out that State Statute requires each city to adopt a budget by February 1 of each year. She added that in August, the current year is reviewed for budget amendments regarding unforeseen 4 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING NOVEMBER 7, 2013 7:00 P.M. – 7:59 P.M. circumstances. She stated that this process relies greatly on the department heads knowing what is essential. She reviewed the General Fund revenues and expenditures, noting that there is a shortfall of approximately $2,952,214.00. She pointed out that the personnel cost listed in the General Fund includes longevity and certificate pay but not raises. Operating transfer funds include reimbursement of the Capital Improvement, Equipment, and Drainage Funds regarding monies used to balance the 2013 budget. She stated that after adjustments to the 2014 budget it may not be possible to reimburse the full amount. She then added that the Operating Transfer Fund also includes an annual subsidy for the Emergency Medical Services in the amount of $290,000.00 to help with their cash flow. She explained that when the meetings occur with the department heads, they will be asked to review their estimates for training and seminars. They will be asked to consider cutting some of the out-of-state travel that can be replaced with in-state and online training that can satisfy those requirements through Lorman Education and National Education Services host webinars and audio conferences. She noted that some associations also offer Internet training to satisfy certification training. Mayor Fletcher noted that the Public Safety Building classrooms may also be able to be used to host training seminars, noting that it can accommodate as many as two or three hundred people. He stated that this would also help other cities as well as increase our tax base regarding the hotel/motels and restaurants. Finance Director Erkel noted that the longevity and certificate pay may need to be removed from the 2014 budget. She then explained that employee insurance contributions are also being considered, noting that currently single health employee insurance coverage is not charged to the employee. She then related that the contribution amounts for family policies may have to be increased to help balance the budget. She explained that the General Fund includes the loans for the Capital Improvement Project Plan, the Motorola equipment, and financing for the shooting range. She stated that Motorola has offered the City a plan to refinance the four-year loan to a five-year loan, saving the City approximately $190,000.00 in 2014. She related that she was asked to research a ten-year bond issue for the other two loans, explaining that she does not have all the information complied yet but she has a quote from one financial institution at 2.63% and another has offered 2.29%. She stated that any bond issue would have to be submitted to the Jacksonville citizens for a vote because it would be a dedication of the taxes collected. She stated that it is thought that 3/8 of a percent would be enough to cover the outstanding loans. She stated that with the bond issue, it would have to be paid for at least five years before it could be matured and paid off earlier. 5 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING NOVEMBER 7, 2013 7:00 P.M. – 7:59 P.M. Mayor Fletcher equated the bond issue to when an individual consolidates bills to create more of a cash flow. He stated this would free up the City’s cash flow, noting that many other cities have done the same thing. He reiterated that the refinancing would have to go before the voters. Finance Director Erkel stated that she had planned to present a five-year projection without the Motorola refinancing option or the bond issue as well as a projection with those refinancing options. She added that she will have to wait until the budget is balanced to get the correct projections. She stated that she would formulate the data and it would be forthcoming. She reviewed that each department with its own line items are included in the preliminary budget. She then reviewed the Street Fund summary page, which shows projected revenues of $2,133,704.00 with expenditures of $2,137,337.00 for an over budget of $3,633.00. She explained that these figures include the complete full amount of the 5% road tax that just came into effect. She related that the road tax has a ten-year sunset clause, explaining that Public Works Director Jim Oakley has expressed his reluctance to use those funds regarding annual reoccurring costs. She went on to say that Public Works Director Jim Oakley is afraid that if the City relies on those funds for regular operations, ten years later the City will be hurting when those funds are no longer available and there is no other revenue to replace those funds. She clarified that Public Works Director Jim Oakley is in favor of using those funds for one-time equipment purchases instead of using it for reoccurring factors. Mayor Fletcher reminded the City Council that the City is going to have to replace the bridge on Loop Road. He noted that he is on the Board at Metroplan, explaining that the Federal Transportation Bill has had difficulty being passed by Congress. He stated that when the gas tax was passed last November, this money was suggested for use in Capital Improvement projects. He pointed out that at the time it was estimated to be approximately $5,000,000.00 over a ten-year period. He related that he liked the fact that it was money that could be bonded to be used for construction projects now rather than waiting for inflation to affect the cost of projects as money is being saved. He stated that we should not rely on that money for reoccurring costs; it should be used to fund projects. He stated that with Federal cuts the Highway Department is having to rely on this tax to subsidize their budgets even though there is a sunset clause to the funds. He stated that locally this affects Jacksonville in the amount of approximately $400,000.00, which will have to be cut from the Street Department budget. Finance Director Erkel reviewed the rest of the preliminary budget, offering an overview of the Sanitation Department. She pointed out that total revenues are projected at $1,839,500.00 with operating expenses coming in at $1,807,243.00, leaving a surplus of $32,257.00. 6 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING NOVEMBER 7, 2013 7:00 P.M. – 7:59 P.M. She answered Alderman Traylor that the host fee that was set by Ordinance earlier in the year is not included in the Sanitation Fund revenue projections. A short discussion followed regarding the validity of the imposed fees. City Attorney Bamburg related that the assessment was to begin August st 1, adding that no reports have been submitted by the provider. Finance Director Erkel reviewed the projected revenues for Sanitation by line item and then the overall account numbers regarding expenditures for each department in the Sanitation Fund. She then reviewed the summary for the Emergency Medical Services Fund, noting total revenues estimated at $908,548.00, total expenditures of $1,196,546.00, with an operating transfer in of $290,000.00, it has a positive balance of $2,002.00. Mayor Fletcher recalled a presentation by former Finance Director Paul Mushrush titled “The Second Penny”, recalling that one penny was dedicated toward Capital Improvement and now rather than going into Capital Improvement it is going into the general operating expenses. He noted that Jacksonville has not had any tax increases while other cities have had to pass a tax increase. He explained that all cities are suffering from the effects of having lower Sales Tax collections. He related that in talking with other mayors he learned that they are not able to give employee raises and are also having to deal with budget shortfalls. He stated that this is a tough economy, County taxes are down and City tax is up. He stated that the wet/dry issue for Jacksonville is a very important issue, noting that predominately cities live by sales tax and budgets are sales tax driven. He related that Jacksonville has lost two restaurants because of the wet/dry issue, which handicaps Jacksonville from being able to equally compete in that arena. He then noted that Jacksonville also lost over $1,000,000.00 in collections when the Census was certified in 2011. He stated that the budget has been balanced in the past by using funds from the Capital Improvement Fund, which cannot be done this time. He stated that $9,000,000.00 spent in Jacksonville on lottery tickets is money taken away from consumer goods, adding that Internet sales are also a problem. He stated that when this all adds up, together it compounds itself into a situation that hurts not only Jacksonville but all cities. He stated that this will be a tough budget, and when citizens are calling because of things we’ve done in the past that we can no longer extend, they will also call the Aldermen. He stated that when they call, you as Alderman will have to tell them “no”. He related that there are only three basic choices when it comes to the budget; either cut services, raise taxes, or expand the tax base. He stated that he believes the best option is to expand the tax base, saying that he is encouraged that next year the City will begin to see things turn around. He stated that he believes the shooting range will bring good things to the City and 7 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING NOVEMBER 7, 2013 7:00 P.M. – 7:59 P.M. contribute to the tax base. He went on to say that they are working on some projects that in the next several months they will be able to make some announcements that will generate some construction regarding things for the community. He added that it will certainly help when Jacksonville gets its own school district. He stated that if the economy turns around on a national level, the budget could be revisited to replace some of the items that were removed. He stated that the City has to do what Washington refuses to do and that is to make hard decisions to balance the budget. He stated that the bottom line is that Jacksonville will survive and everyone will continue to do their jobs, this will continue to be a city that has first class services. He stated that making these decisions is the ugly part of being an elected official. He stated that the City has great employees, noting that raises have been provided every year as far back as he can recall. He added that Jacksonville gave raises when a lot of other cities did not. He went on to say that he believes the citizens appreciate the fact that they would rather see areas cut rather than the City coming to them with a tax increase. Without questions from the audience or City Council, Mayor Fletcher noted the hard work from the department heads. He stated that the mission is to maintain current services with less. He related that he hopes a year from now the economy is in a better situation but for now we have to deal with today’s issues. He stated that Finance Director Erkel is looking for some direction from the City Council members regarding the bond issue. Finance Director Erkel stated that she would be seeking City Council input when she presents the five-year projections so they can make an informed decision. Mayor Fletcher reiterated that this would be an issue that has to be put before the public for a vote, noting that this would require an information campaign to educate the public on the issues. He stated that this is not a new tax but the public has to be made aware of the issues. He reopened the issue of the landfill host fee, explaining that he has tried to negotiate with the provider but he believes they feel that it is not a valid fee. He stated that they feel that since they are not using City of Jacksonville services or rights-of-way and because they have said that they would lose one of their main customers from another county that constitutes a third of their business, they tried to point out that while it would hurt them in the long run it would also hurt Jacksonville. He stated that he is not encouraged based on their proposal he would have to spend money the City does not have in order to get any value. He suggested that the City Council offer City Attorney Bamburg direction as to whether we want to proceed legally. 8 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING NOVEMBER 7, 2013 7:00 P.M. – 7:59 P.M. It was the consensus of the City Council to allow City Attorney Bamburg to proceed with further action. City Attorney Bamburg clarified that the fee is a pass-through charge. He stated that it is passed from the City of Jacksonville to them and they pass it onto the customer. APPOINTMENT(S): th ANNOUNCEMENT(S): City Offices will be closed November 11 in honor of Veterans’ Day ADJOURNMENT: Without objection, Mayor Fletcher adjourned the meeting at approximately 7:59 p.m. MOTION CARRIED. Respectfully, ________________________ _________________________ Susan L. Davitt MAYOR GARY FLETCHER City Clerk-Treasurer 9