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04 AUG 19.doc CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 19, 2004 7:00 P.M. – 7:56 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 August 19, 2004 at the regular meeting place of the Council. Alderman Howard delivered the invocation and Boy Scouts Alec Raymond and Bryan Raymond led a standing audience in the “Pledge of Allegiance” to the flag. ROLL CALL: Aldermen: Elliott, Smith, Ray, Rinker, Fletcher, Stroud, and Howard answered roll call. Mayor Swaim also answered ROLL CALL declaring a quorum. Aldermen Lewis, Sansing, and Twitty were absent. PRESENT seven (7), ABSENT (3). Others present for the meeting were: City Attorney Robert Bamburg, Deputy Clerk Tawnya Johnson, Human Resource Director Charlie Brown, Finance Director Paul Mushrush, Finance Accountant Cheryl Erkel, City Engineer Jay Whisker, Public Works Director Jimmy Oakley, CDBG Director Theresa Watson, Parks and Recreation Director George Biggs, Fire Chief Vanderhoof, Police Captain J.J. Martin, Water Commission Chairman Thad Gray, Water Department Manager Ken Anderson, Mr. Larry Dupree, Mr. Tommy Dupree, Mrs. Judy Dupree, Mr. Tommy Bond, Justice of the Peace Dennis Sobba, Mac McAllister, Mr. Gerald Clark, Larry Smith, interested citizens and members of the press. PRESENTATION OF MINUTES: Mayor Swaim presented the minutes of the Regular City Council meeting of August 5, 2004 for approval and/or correction at the next Regularly Scheduled City Council Meeting. APPROVAL AND/OR CORRECTION OF MINUTES: Alderman Smith moved, seconded by Alderman Howard that the minutes of the Regular City Council Meeting of 15 July 2004 be APPROVED. MOTION CARRIED. CONSENT AGENDA: REGULAR MONTHLY REPORT/FIRE DEPARTMENT Alderman Elliott moved, seconded by Alderman Ray to approve the Regular Monthly Report for July 2004 from the Jacksonville Fire Department, which reflects a fire loss of $23,000.00 and a savings total of $10,500.00. REGULAR MONTHLY REPORT/POLICE DEPARTMENT Alderman Elliott moved, seconded by Alderman Ray to approve the Regular Monthly Report for July 2004. Said report reflects the Total Value of Reported Stolen Property $104,385. Total Value of Recovered Stolen Property $43,884 and Total Report Sales $492.00. REGULAR MONTHLY REPORT/ENGINEERING Alderman Elliott moved, seconded by Alderman Ray to approve the Regular Monthly Report for July 2004. Said report reflects: 1 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 19, 2004 7:00 P.M. – 7:56 P.M. PERMITS/LICENSE ISSUED INSPECTIONS PREFORMED Building Permits 19 Building Inspections 80 Business License 10 HVACR 98 Plumbing 94 Electrical 45 UNSIGHTLY & UNSANITARY VEHICLES Grass Letters 249 Notice of Noncompliance 18 Property Mowed 0 Towed 1 Trash Letters 51 Trash Removal 0 CONDEMNATIONS Cost for December $.00 Structural Maint. Letters 4 Structural Repairs Made 0 Demolitions 0 REGULAR MONTHLY REPORT/ANIMAL CONTROL Alderman Elliott moved, seconded by Alderman Ray to approve the Regular Monthly Animal Control Report for July 2004. Said report reflects: ADOPTION/FINES: $697.00 CONTRIBUTIONS: 0.00 TOTAL: $697.00 Alderman Stroud commended the Public Works Department for doing a good job. He stated that while the City does not want to curtail carport or garage sales, the public is not complying with the sign ordinance. He asked City Engineer Whisker if any letters were sent to address sign violations. He suggested a policy change of notifying the public of sign violations regarding discarded or abandoned carport/garage sale signs. At this time a ROLL CALL vote was taken to accept the Consent Agenda: Aldermen Elliott, Smith, Ray, Rinker, Fletcher, Stroud, and Howard voted AYE. MOTION CARRIED. WATER DEPARTMENT: WASTEWATER DEPARTMENT: POLICE DEPARTMENT: SANITATION DEPARTMENT: STREET DEPARTMENT: PARKS & RECREATION: PLANNING COMMISSION: FINAL PLAT for Clover Ridge North PH I Mayor Swaim noted that the Planning Commission has recommended approval of the Final Plat and City Engineer Whisker is satisfied with the improvements. 2 Alderman Smith moved, seconded by Alderman Howard to approve the Final Plat of Clover Ridge North PH I. MOTION CARRIED. CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 19, 2004 7:00 P.M. – 7:56 P.M. GENERAL: a. ORDINANCE 1231 (#15-04) AN ORDINANCE CONDEMNING STRUCTURES AND REAL PROPERTY AT THE VARIOUS UNINHABITED LOCATIONS LISTED BELOW IN JACKSONVILLE, ARKANSAS, FOR STRUCTURAL DEFECTS, DEFICIENCIES, AND PUBLIC HAZARD CONDITIONS; DECLARING AN EMERGENCY; AND, FOR OTHER PURPOSES. Mayor Swaim asked if anyone wishes to speak regarding the properties addressed as 149 Roosevelt, 212 East Main Street or 112 Pulaski. Mrs. Neva Johnson stated that her son is in the process of removing the structure at 149 Roosevelt. She explained delays regarding the weather and holidays. She further related that her son is only able to work on the structure on the weekends. She then answered Mayor Swaim, saying that she has spoken with City Engineer Whisker regarding her intention to take down the structure. Discussion ensued regarding the 90-day procedural period involved with the passage of the Ordinance. Mrs. Johnson stated that she was hopeful that 90-days would be enough time to remove the structure before the City takes action to demolish the house. There were no other responses regarding the other properties addressed. Alderman Stroud moved, seconded by Alderman Smith that Ordinance 1231 be placed on FIRST READING. ROLL CALL: Alderman Elliott, Smith, Ray, Rinker, Fletcher, Stroud, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1231. Alderman Ray moved, seconded by Alderman Elliott that Ordinance 1231 be APPROVED on FIRST READING. Alderman Stroud noted that the Ordinance condemns three structures, questioning City Engineer Whisker as to the number of houses in Jacksonville that would qualify for condemnation. City Engineer Whisker stated that there are more, adding that he tries to maintain a number that the Engineering Department can keep track of. He related that six were being worked, explaining that three were ongoing from previously. He related that two have already been torn down and one is in the middle of a building permit and half-way finished. Alderman Stroud noted that because of funds there is no way the City could condemn all the houses that would need to be torn down. He 3 estimated that at least fifty houses qualify to be condemned. He expressed concern for the lengthy process involved in identifying a structure and notifying the property owner regarding condemnation. He related that the process takes as long as a year. CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 19, 2004 7:00 P.M. – 7:56 P.M. City Engineer Whisker related that current property title searches began February 12, 2004, pointing out that the Ordinance provides an additional 90 days to the condemnation process. Alderman Stroud suggested a procedure of notification that would cut the lead-time by 75%, adding that it would alert property owners that they need to repair or demolish the property sooner. He stated that he understands that there are legalities involved, but suggested that earlier notification could shorten the time frame. Alderman Fletcher stated that if it takes almost a year to condemn six houses, it could take as much as eight years to condemn fifty houses. He related that the process time only increase the growing list of houses for condemnation. He supported increasing funds and a policy change. Mayor Swaim stated that approximately $20,000.00 annually is budgeted for condemnations and demolitions. He noted that ten houses would increase that budget to $60,000.00 annually, adding that it would be a considerable increase. He noted that the budget process has begun and should the Council want to consider increasing the line item, now would be the time to make those recommendations. Alderman Fletcher stated that now might be the time to become more aggressive with funds to address the growing number of condemnations. Alderman Stroud stated that his object is to prevent the City from having to expend additional funds by offering an increased lead-time for the owner to address their considerations. Mayor Swaim stated that the budget would need to reflect consideration for increasing the number of houses being considered for condemnation. ROLL CALL: Alderman Elliott, Smith, Ray, Rinker, Fletcher, Stroud, and Howard voted AYE. NAY (0). MOTION CARRIED. Alderman Ray moved, seconded by Alderman Stroud that Ordinance 1231 be placed on SECOND READING. ROLL CALL: Alderman Elliott, Smith, Ray, Rinker, Fletcher, Stroud, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1231. Alderman Stroud moved, seconded by Alderman Ray that Ordinance 1231 be placed on THIRD and FINAL READING. ROLL CALL: Alderman Elliott, Smith, 4 Ray, Rinker, Fletcher, Stroud, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1231. Alderman Smith moved, seconded by Alderman Howard that Ordinance 1231 be APPROVED AND ADOPTED. ROLL CALL: Alderman Elliott, Smith, Ray, Rinker, Fletcher, Stroud, and Howard voted AYE. NAY (0). MOTION CARRIED. CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 19, 2004 7:00 P.M. – 7:56 P.M. Alderman Smith moved, seconded by Alderman Ray that the EMERGENCY CLAUSE be approved and adopted. ROLL CALL: Alderman Elliott, Smith, Ray, Rinker, Fletcher, Stroud, and Howard voted AYE. NAY (0). MOTION CARRIED. TH ORDINANCE APPROVED, ADOPTED AND NUMBER 1231 THIS 19 DAY OF AUGUST 2004. b. RESOLUTION 575 (#15-04) A RESOLUTION URGING SUPPORT OF THE NORTHBELT FREEWAY ENVIRONMENTAL IMPACT STUDY, THE FREEWAY ACCESS STUDY FOR U.S. 67/167, AND THE U.S. 67/167 WILDWOOD AVENUE TO REDMOND ROAD ENVIRONMENTAL ASSESSMENT IN SUPPORT OF THE PROPOSED LEGACY DEVELOPMENT; AND, FOR OTHER PURPOSES. Mayor Swaim noted that the Resolution was prepared in support of the Legacy Development formally known as the Dupree Farm bean fields. He noted that the Resolution contains some commitment from the City to support efforts to establish the transportation through the property. Alderman Elliott moved, seconded by Alderman Smith to read Resolution 575. MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Resolution 575. Alderman Smith moved, seconded by Alderman Howard to approve Resolution 575. MOTION CARRIED. c. PRESENTATION of Water Rate Study Jacksonville Water Commission Chairman Thad Gray addressed the City Council, noting that they had been before the City Council the previous month with a presentation regarding the Master Plan and the Capital infrastructure that will be require for the City of Jacksonville to maintain quality water for the citizens. He related that the study to fund the capital infrastructure outlay. He introduced Financial Analyst Shawn Koorn of Economic and Engineering Services, Inc. to present the results of the Water Rate Study. Mr. Koorn related that he would be reviewing the process of setting cost based rates, the revenue requirements, cost of service and rate design analysis as designed for the Jacksonville Waterworks and finally review the recommendations. He stated that the rate setting process is a three- step process beginning with the development of the revenue requirement, which compares the source of funds to expenses to determine the overall level of rate adjustment. He stated that the next step is to allocate those cost to the different customer classes of service, noting that 5 Jacksonville Waterworks has the retail class of residential and commercial, bulk outside the City customers, and the Air Force Base. He stated that the final step is to design rates for each class around the allocated cost. He noted that the overview of the revenue requirement analysis compares the utility’s source of funds to the application of funds, which determines the adequacy of the utility’s existing rates or revenue generation over an extended period. He noted that the study was projected for a 16-year period extending to 2020 in order to include CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 19, 2004 7:00 P.M. – 7:56 P.M. changes expected in 2011/2012. He stated that the focus was 2004 to 2008, which is the recommended rate adjustment period. He related that beginning with the 2004 budget through 2010 there is an expected 20.5 million dollar capital project expenditure. He then noted that from 2011 to 2020 there is an 18 million dollar expected expenditure for capitol projects. He listed the major capital projects from 2004 to 2010 as being the Central Arkansas Water Transmission Lines at 8.3 million, South Source Improvements at 6.6 million, Tanks and Reservoirs at 2.4 million and Renewal and Replacement projects at 3.2 million. He stated that that they developed six alternative methods for financing ranging from 100% low-interest debt loans to 100% rate adjustment funding. He stated that the recommended funding mechanism is toward the middle around 4.5 million in loans, considering that there could be a need for additional loans in the future and it would not be prudent to overload the utility with debt. He noted that there are some reserves available to fund the project. He then reviewed the revenue summary requirement analysis, suggesting a proposed rate transition plan that would minimize the impact to the customer. He noted that the rate increase would equal the purchase of two to three bottled waters, adding that it is not a significant impact. He stated that at this time an adjustment to water rates would be prudent and necessary to fund future capital projects. He stated that the timing and final adjustments are a policy decision, adding that the recommendation is the 4.5 million loan funding and the proposed transition plan and rate adjustments. He reviewed the allocation of cost between customer classes, noting that if one class is causing a peak in the system they would receive a higher contribution of those peak cost. He stated that the 2005 projected consumption for each class group was used to analyze cost increase, which provides a unit cost for eventual rate designs. He reviewed the total by customer class and the allocated cost for each, noting that the overall adjustment rate is 28% with outside the City bulk customers being at 4.5%. He stated that there are some slight cost differences between customer classes; adding that the Waterworks Board and the EES, Inc. recommends an “across the board” adjustment for the retail customers and the Air Force Base with a one time “true-up” 4.5% rate increase for outside the City bulk rate customers. He added that future bulk rate adjustments would be the same as all other customers. He then reviewed the rate design, pointing out that currently there is a descending block rate. He explained that there is a monthly customer charge for retail customers and then the block rate goes from $3.32 down to $1.90 for over 50,000 gallons. He stated that 6 the bulk rate customers have a similar rate structure with slightly different rates and then there is a two block-descending rate for the Air Force Base. He stated that at this time the present rate structure appears to meet current Waterworks goals regarding the promotion of conservation or efficient use. He stated that it is recommended to only adjust rates and leave the rate structure as it is, explaining that this would prevent customers from being impacted twice. He then stated that his firm does recommend developing each class with a different rate schedule along with moving the outside City bulk rate away from the four- block descending to a two block rate structure, because this group is using most of its water in the fourth block providing a simpler rate CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 19, 2004 7:00 P.M. – 7:56 P.M. structure. He reviewed the proposed residential rate increases, saying that current rates have been increased by the proposed transition plan of 28% in 2005, 10% in 2006 and 2007, and 8% in 2008. He noted that outside City residential would have the same percentage increases. He then reviewed the residential rate comparisons stating that the present average rate is approximately $12.43 for 5,000 gallons, adding that the proposed rate would be $15.91. He reviewed the various rates of surrounding cities, explaining that he used the Arkansas Water Rates 2004 by Allen & Hoshall as the source. He stated the proposed commercial rate increases are the same as residential but a separate class of service will be established. He related that the proposed LRAFB and the bulk rates have the same transition plan of 28%, 10%, 10% and 8%, adding that the outside City bulk rate the structure change of four block descending to the two block. He noted that future rates would depend on Central Arkansas Water wholesale rates including peaking or other charges regarding changes in the block rate structure to a more contemporary or uniform rate structure. He stated that in 2011 would be the time when Jacksonville would mostly be on Central Arkansas Water with some peak use off the current source of supply. He related that the retail rates should reflect the customer group’s usage characteristics, which is reason for the current descending block. He added that retail rates should move towards a more contemporary or conservation-based rate design. He concluded saying that Waterworks has prepared a comprehensive rate study to review its current cost and to develop proposed rates for the water utility. He added that the proposed rates reflect the findings and conclusions of the rate study and that Economic and Engineering Services, Inc. and the Waterworks Board recommend the adoption of the proposed rates. In response to a question posed by Mayor Swaim, Mr. Thad Gray answered that the proposed loan is a low-interest soil and water loan. He thanked Mr. Koorn for the presentation, adding that 28% sounds scary but it equated to $4.73 for the first year followed by 2.00 plus for the following years. Alderman Stroud stated that he has recently notice in the newspaper that other surrounding cities have experienced heavier increases than what is 7 being proposed. He stated that the situation is either follow the proposed course or experience bad water. He noted that the Commission has reserve funds, which has already funded several projects. He expressed appreciation to the Commission for their efforts. Alderman Ray echoed those sentiments, saying that it is important to plan for the future as water is a vital long-term necessity. Mayor Swaim questioned if there is a possibility that the wells may perform longer than projected. Mr. Gray noted that would only be possible if we experienced wet summers with lots of rains, adding that they are hopeful to have the wells source until 2015. CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 19, 2004 7:00 P.M. – 7:56 P.M. Mayor Swaim related that he wanted the public to know that it is predicated on primarily switching to Central Arkansas Water as our full source. Mr. Gray stated that the aquifers are on a descending trend, explaining that when they reach 30’ above the base, water quality diminishes. Mayor Swaim suggested that the information be disseminated among civic groups prior to the City Council considering an ordinance. st Mr. Gray stated that the Commission is allowing for January 1 and will be back before the City Council for an ordinance. d. 2003 Audit presented by McAllister & Associates Mr. Mac McAllister commended the various City Commissions and Boards, saying that there is a lot to be proud of in the City of Jacksonville. He then read from a prepared statement expressing his pleasure to present the 2003 Comprehensive Annual Financial Report. He noted that this marks th the 7 year for the City to publish the report. He related that 2003 was the first year that the City had issued financial statements that are compliant with the Governmental Accounting Standards Board Statement No. 34 (GASB 34), which established new financial reporting requirements for state and local governments throughout the United States. He related that the CAFR has been significantly revised from prior years. He identified some of the highlights of the year, pointing out that total operating for 2003 was 14.3 million compared to 14.9 million in 2002, which was a decrease of approximately 4%. He stated that this represents the third straight year that the City has experienced declining revenues. He stated that revenues from the City’s share of the Pulaski County One- Cent Sales Tax were 4.8 million and 3.1 million from the City Sales Tax, adding that together these taxes constitute approximately 55% of total revenues. He stated that the total operating expenditures in 2003 were 14.8 million, up 2% over 2002. He added that the total fund balance of 8 the City’s operating and special revenue funds at the end of 2003 was 12.8 million, of which approximately 11 million is reserved or designated for contingencies, future projects or for the 2004 budget. He stated that the fund balance of the General Fund at December 31, 2003 was approximately 1.3 million, which represents approximately 37 days of current operating expenditures. He related that based on the City’s 2004 budget, the net assets of the General Fund should approximate 60 days of operating expenditures. He stated that the auditors’ report expresses an unqualified opinion on the basic financial statements of the City, adding that there were no reportable conditions on internal control or material instances of noncompliance with laws and regulations relating to the audit of the financial statements. He added that there were no audit findings or questioned costs relative to Federal grant award programs of the City for 2003. He noted that they have issued a management letter included with the annual report, reporting on current year audit findings of an immaterial nature and a couple of recommendation believed to enhance future reporting. CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 19, 2004 7:00 P.M. – 7:56 P.M. He continued saying that throughout the years, the City of Jacksonville has followed a fiscally conservative philosophy of building and maintaining healthy reserves. He stated that this practice has allowed the City to continue providing quality services to its residents in a time when many municipalities and local agencies are being forced to cut back due to fiscal constraints. He stated that the City’s financial policies are designated to promote sound financial management and ensure that the City’s fiscal integrity remains intact. He related that this Comprehensive Annual Financial Report reflects the implementation of these financial guidelines. He stated that evidence of that fact is the City’s ability to accomplish some of the necessary future projects for the City. He noted that the City’s Comprehensive Financial Report has been submitted to the Government Finance Officers Association of the United States and Canada for consideration for a seventh Certificate of achievement for Excellence in Financial Reporting. He stated that currently only seven cities in Arkansas are recipients of the award. He added that he believes Jacksonville’s 2003 CAFR meets all of the requirements of the Certificate of Achievement program. He related that the effort put forth to produce a report in full compliance with GASB No. 34 should not go unrecognized. He offered special recognition to the City Finance and Engineering Departments for their outstanding efforts in completing this project. He stated that this report marks a first major milestone. He related that as we look forward to the future, efforts would be directed towards updating systems and procedures in support of this new financial reporting model. He expressed his appreciation to the City Council for allowing his firm the opportunity to again serve as the City’s auditors. The City Council applauded the efforts of the Finance and Engineering 9 Departments. In response to a question from Alderman Fletcher, Mayor Swaim explained that lightening had struck the 911 Center, which the City considered an emergency and moved forward with repairs as quickly as possible to ensure the 911 operation. He stated that in that instance the City failed to suspend the rules for bidding of repairs, explaining that time was the dominating factor. Alderman Ray commended Mr. McAllister and his staff as well as the City staff responsible for the annual CAFR. Finance Director Paul Mushrush expressed his appreciation in the production of the CAFR, explaining that the 2003 report was a large transition for the Finance Department. He expressed his thanks to the Engineering Department for helping to identify the infrastructure and to Mr. Gerald Clark the senior auditor with McAllister and Associates, saying Mr. Clark has been very instrumental in helping the Department through the process. CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 19, 2004 7:00 P.M. - 7:56 P.M. Mr. Mushrush then announced that Finance Department Account Cheryl Erkel was elected president of the State Chapter of the Arkansas Government Finance Officers Association, which is part of the national organization that awards the Certification of Excellence in Financial Reporting. APPOINTMENT(S): ANNOUNCEMENT(S): ADJOURNMENT: Mayor Swaim without objection adjourned the meeting at approximately 7:56 p.m. Respectfully, ________________________ _________________________ Susan L. Davitt MAYOR TOMMY SWAIM City Clerk-Treasurer 10