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08 AUG 21.doc CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 21, 2008 7:00 P.M. – 7:36 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 21, 2008 at the regular meeting place of the Council. Alderman Howard delivered the invocation and Vice Mayor Fletcher led a standing audience in the “Pledge of Allegiance” to the flag. ROLL CALL: Aldermen: Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard answered roll call. Vice Mayor Fletcher also answered ROLL CALL declaring a quorum. PRESENT NINE (9), ABSENT (1). Alderman Elliott was out of town. Others present for the meeting were: City Attorney Robert Bamburg, Deputy City Clerk Lynette Culpepper, Director of Administration Jay Whisker, Public Works Director Jim Oakley, Human Resource Director Jill Ross, Assistant Finance Director Cheryl Erkel, City Planner Chip McCulley, Finance Director Paul Mushrush, IT Systems Director Barbara Daniel, Wastewater Utility Manager Thea Hughes, Fire Battalion Chief Eddie Hill, Police Chief Gary Sipes, Parks and Recreation Director George Biggs, Mrs. Sandra Sansing, Mrs. Helen Stroud, Mrs. Addie Gibson, Mr. Larry Smith, Mr. Michael Wilson, Miss Genevieve Wilson, Mr. Rory Smith, interested citizens, and members of the press. PRESENTATION OF MINUTES: Vice Mayor Fletcher presented the minutes of the regular City Council meeting of August 7, 2008 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 17 July 2008 be APPROVED. MOTION CARRIED. CONSENT AGENDA: REGULAR MONTHLY REPORT/POLICE DEPARTMENT Alderman Stroud moved, seconded by Alderman Howard to approve the Regular Monthly Report for July 2008. Report reflects the Total Value of Reported Stolen Property $153,826. Total Value of Recovered Stolen Property $31,577 and Total Report Sales $991. REGULAR MONTHLY REPORT/FIRE DEPARTMENT Alderman Stroud moved, seconded by Alderman Howard to approve the Regular Monthly Report for July 2008 from the Jacksonville Fire Department, which reflects a fire loss of $567,400 and a savings total of $268,000. ROLL CALL: Aldermen: Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. MOTION CARRIED. WATER DEPARTMENT: 1 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 21, 2008 7:00 P.M. – 7:36 P.M. WASTEWATER DEPARTMENT: ORDINANCE 1345 (#12-08) AN ORDINANCE WAIVING COMPETITIVE BIDDING FOR THE PURCHASE OF AN UPPER BEARING ASSEMBLY FOR USE ON THE INTERNALIFT PUMP FOR THE JACKSONVILLE WASTEWATER UTILITY; AND, FOR OTHER PURPOSES. Alderman Ray moved, seconded by Alderman Smith to place Ordinance 1345 on FIRST READING. Wastewater Utility Manager Thea Hughes explained that the purchase is to replace a 20-year-old bearing used for the large pumps. She explained that the manufacturer is the sole source for this part. She then answered that there are six large pumps and this is the first bearing to be replaced. ROLL CALL: Aldermen Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1345. Alderman Ray moved, seconded by Alderman McCleary to approve Ordinance 1345 on FIRST READING. ROLL CALL: Aldermen Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Alderman Sansing moved, seconded by Alderman McCleary to suspend the rules and place Ordinance 1345 on SECOND READING. ROLL CALL: Aldermen Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1345. Alderman Smith moved, seconded by Alderman Sansing to further suspend the rules and place Ordinance 1345 on THIRD and FINAL READING. ROLL CALL: Aldermen Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1345. Alderman Stroud moved, seconded by Alderman Howard that Ordinance 1345 be APPROVED AND ADOPTED. ROLL CALL: Aldermen Elliott, Smith, Sansing, Ray, Rinker, Fletcher, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. ST ORDINANCE APPROVED, ADOPTED AND NUMBERED 1345 THIS 21 DAY OF AUGUST 2008. FIRE DEPARTMENT: ORDINANCE 1346 (#13-08) AN ORDINANCE AUTHORIZING THE MAYOR AND/OR HIS DESIGNATED REPRESENTATIVE(S) TO ENTER INTO A CONTRACT ON BEHALF OF THE CITY OF JACKSONVILLE AND ITS FIRE DEPARTMENT WITH HGAC PURCHASING SERVICE; AND, FOR OTHER PURPOSES. 2 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 21, 2008 7:00 P.M. – 7:36 P.M. Alderman Ray moved, seconded by Alderman Smith to place Ordinance 1346 on FIRST READING. Battalion Chief Eddie Hill explained that HGAC purchasing service is a group purchasing organization (GPO), explaining that HGAC stands for “Houston, Galveston Area Council” which consists of 13 different cities and 35 elected officials that participate in bidding for various types of equipment purchased by municipalities. He stated that the Jacksonville Fire Department is interested in the fire engines and ladder trucks, which they can procure at a substantial savings. He stated that it is similar to a state-bid process. City Attorney Bamburg pointed out that not only does it provide purchase opportunities for the Fire Department, but also there are purchase possibilities for the Police, Street, and Parks Departments. He noted that the Ordinance secures this option for all departments. He explained that there would not be a necessity to bid regarding those items that can be procured through this system. In response to a question posed by Vice Mayor Fletcher, Battalion Chief Hill related that the purchase price for a fire engine through ProFire was $279,022.79 with an expected price increase in January. He stated that the same vehicle through HGAC was $248,000.00, which is a substantial savings. He then answered that the Fire Department is mostly interested in the vehicles. ROLL CALL: Aldermen Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1346. Alderman Stroud moved, seconded by Alderman McCleary to APPROVE Ordinance 1346 on FIRST READING. ROLL CALL: Aldermen Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Alderman Stroud moved, seconded by Alderman Ray to suspend the rules and place Ordinance 1346 on SECOND READING. ROLL CALL: Aldermen Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1346. Alderman Smith moved, seconded by Alderman Ray to further suspend the rules and place Ordinance 1346 on THIRD and FINAL READING. ROLL CALL: Aldermen Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1346. 3 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 21, 2008 7:00 P.M. – 7:36 P.M. Alderman Stroud moved, seconded by Alderman Ray that Ordinance 1346 be APPROVED AND ADOPTED. ROLL CALL: Aldermen Elliott, Smith, Sansing, Ray, Rinker, Fletcher, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. ST ORDINANCE APPROVED, ADOPTED AND NUMBERED 1346 THIS 21 DAY OF AUGUST 2008. POLICE DEPARTMENT: STREET DEPARTMENT: SANITATION DEPARTMENT: PARKS & RECREATION: PLANNING COMMISSION: ORDINANCE 1347 (#14-08) AN ORDINANCE RECLASSIFYING PROPERTY IN THE CITY OF JACKSONVILLE, ARKANSAS \[GENERAL LOCATION: PROPERTY SOUTH OF BIBLE BAPTIST CHURCH AND SCHOOL ADJACENT TO 3301 NORTH FIRST STREET AND BORDERED BY WOOLFORT STREET\]; AMENDING ORDINANCE NUMBERS 213 AND 238 AND THE LAND USE MAP OF THE CITY OF JACKSONVILLE, ARKANSAS; AND, FOR OTHER PURPOSES. Alderman Smith moved, seconded by Alderman Ray to place Ordinance 1347 on FIRST READING. City Planner McCulley related that the petitioner is proposing to rezone approximately 4 acres from R-1, C-2, and R-4 to R-3. He stated that the property is located on North First Street and that approximately 134’ deep X 200’ of frontage on North First will remain R-1. He related that the property is wide enough for the petitioner to propose 3 single-family lots along North First. He noted that there is one existing single- family home currently on the property. He stated that approximately 3.62 acres behind the R-1 property is being proposed for R-3 rezoning. He explained that the developer is proposing that the R-3 property be developed as a one-lot multifamily duplex development. ROLL CALL: Aldermen Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1347. Alderman Stroud moved, seconded by Alderman Howard to APPROVE Ordinance 1347 on FIRST READING. ROLL CALL: Aldermen Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Alderman Smith moved, seconded by Alderman Sansing to suspend the rules and place Ordinance 1347 on SECOND READING. ROLL CALL: Aldermen Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1347. 4 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 21, 2008 7:00 P.M. – 7:36 P.M. Alderman Stroud moved, seconded by Alderman Ray to further suspend the rules and place Ordinance 1347 on THIRD and FINAL READING. ROLL CALL: Aldermen Smith, McCleary, Sansing, Ray, Rinker, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1347. Alderman Stroud moved, seconded by Alderman Sansing that Ordinance 1347 be APPROVED AND ADOPTED. ROLL CALL: Aldermen Elliott, Smith, Sansing, Ray, Rinker, Fletcher, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. ST ORDINANCE APPROVED, ADOPTED AND NUMBERED 1347 THIS 21 DAY OF AUGUST 2008. GENERAL: a. RESOLUTION 615 (#8-08) A RESOLUTION EXPRESSING SUPPORT FOR THE CREATION OF AN INDEPENDENT SCHOOL DISTRICT FOR THE CITY OF JACKSONVILLE, ARKANSAS; AND, FOR OTHER PURPOSES. Alderman Stroud moved, seconded by Alderman Ray to read Resolution 615 (#8-09). City Attorney Bamburg related that Mayor Swaim had been asked by the local organization seeking an independent school district, to pass an updated version of the Resolution passed approximately three years ago requesting an independent school district and urging citizens to sign a petition to be submitted to the School District. He stated that this Resolution is to further ongoing efforts in the quest to seek an independent school district. At this time MOTION CARRIED. Alderman Stroud moved, seconded by Alderman Howard to approve Resolution 615 (#8-08) in its entirety. MOTION CARRIED. b. PRESENTATION of the 2007 CAFR and Audit Report Mr. Gerald Clark, a CPA with McAlister and Associates offered a brief presentation of the 2007 financial statements for the City, which included their audit opinion. He noted that each member of the City Council should have received a copy of the City’s Comprehensive Annual Report, along with an audit management letter. He noted that additionally, they prepared a handout titled “Financial Report Presentation”, which highlights and summarizes the significant aspects of the information contained in the report. 5 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 21, 2008 7:00 P.M. – 7:36 P.M. He began his review of the CAFR, saying “an external audit is an essential element in the process of accountability for public money”. He stated that an audit makes an important contribution toward the stewardship of public resources and services. He stated that the City’s Comprehensive Annual Financial Report presented contains an abundance of information in the form of economic overviews by the City’s management, financial statements, analyses, and statistical data that can be utilized to evaluate the City’s financial condition. He related that it consists of statements and representations prepared by the City’s management concerning the finances of the City, and is divided into 3 main sections: 1) an Introductory Section, 2) a Financial Section, and 3) a Statistical Section. He related that an important part of the Financial Section is the Management’s Discussion and Analysis in which narratives, overviews and analyses are provided by the City’s management. He noted that also within the Financial Section are a couple of very important financial statements referred to as “Government-Wide Financial Statements” - these are the Statement of Net Assets and the Statement of Activities, found on pages 22-25. He explained that these government-wide statements report information about the City as a whole using accounting methods similar to those used by private sector companies. The Statement of Net Assets and the Statement of Activities include all assets and liabilities using the accrual basis of accounting, which again, is similar to the accounting used by most private-sector companies. He related that all current year’s revenues and expenses are taken into account regardless of when cash is received or paid. These two government-wide statements report the net assets and changes. He related that within these government-wide financial statements, the City is divided into three categories: • First, the Governmental activities – Most of the City’s basic services are included such as the police, fire, public works, parks and recreation and general administration. He stated that sales, franchise and other taxes, state and federal grants finance most of these activities. • Secondly, the business-type activities – The City charges fees to help cover the costs of services it provides, such as sanitation and emergency medical services funds. • Thirdly, the component units – The City includes three discretely presented component units, which are separate legal entities, in its report – these are the Jacksonville Water, Wastewater Utilities, and the Advertising and Promotion Commission. He added that although legally separate, these component units are important because the City is financially accountable for them. 6 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 21, 2008 7:00 P.M. – 7:36 P.M. He related that at the end of the current fiscal year, the City is able to report positive balances in all three categories of net assets, both for the primary government as a whole and for its separate business-type activities. He pointed out that the same was true for fiscal year 2006. He stated that their job as auditors is to provide reasonable assurance that the financial statements contained in this report are free of material misstatements. He stated that their audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. He stated that they assessed the accounting principles used and significant estimates made by management, in evaluating the overall financial statement presentation. He stated that based upon their audit they are rendering an unqualified opinion, the highest attainable, on the City’s financial statements for the year ending December 31, 2007. He added that as part of the federally mandated “Single Audit” procedures, they have reported on the City’s internal controls and compliance with legal requirements. He related that those reports indicate no significant deficiencies or material weaknesses in relation to the City’s internal control over financial reporting and compliance with the requirements of laws, regulations, contracts and grants, including those applicable to the Federal award programs. He stated that as a by-product of the audit process, they have issued a management letter regarding certain matters noted during the audit and discussed recommendations contained therein with management in an ongoing effort to improve internal controls. He reviewed significant financial highlights from the report, noting a table included in the handout that indicates total revenues on a citywide basis in 2007 as $34.3 million, compared to $32.8 million in 2006. He pointed out that these amounts include the revenues of the City’s Water and Wastewater Utilities. Expenditures were $27.8 million in 2007, compared to $27.0 million in 2006. Revenues, on a citywide basis, exceeded expenditures by $6.5 million in 2007. He stated that net assets are one measure accountants use to judge a City’s financial health, or financial position. He then added that increases or decreases in net assets are an indicator of whether the City’s financial health is improving or declining. He pointed out that at the end of 2007, the City’s net assets were approximately $55 million, and that this number is divided into 3 parts: First, approximately $29 million represents the City’s investment in its capital assets 7 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 21, 2008 7:00 P.M. – 7:36 P.M. (land, buildings, infrastructure-such as roads, bridges, sidewalks, machinery and equipment). He explained that the City uses these assets to provide services to citizens; as a result, these assets are not available for future spending since capital assets cannot be used to liquidate liabilities. He related that another portion of the City’s net assets, approximately $11 million, represent resources that have restrictions on them (usually imposed by outside entities) as to how they may be used and the remaining balance, approximately $15 million is considered unrestricted and may be used to meet the City’s obligations to citizens and creditors in accordance with the City’s fund designations and financial policies. He stated that the City’s total net assets increased by $3.9 million in 2007 an 8% increase over 2006, which is a healthy increase. He related that revenues increased by 3.2% over the previous year, while expenses were up only 2.5% for the year. He stated that the City of Jacksonville has to save for a “rainy day”, which means building the fund balance of the General Fund. He related that at the end of 2007, the total fund balance of the General Fund was $3.7 million compared to $3.2 million at the end of 2006, an increase of approximately $500,000. He stated that as a policy, the City’s minimum target at the end of a fiscal year for the fund balance of the General Fund is 60 days expenditures based on the most recent completed year. He related that this level of fund balance is required because of the general cyclical nature of cash flow and the need for liquidity in case of a fiscal emergency. He noted that the results from 2007 exceeded this policy minimum, pointing out the balance on hand equated to 75 days or approximately 21% of the 2008 budgeted expenditures. He stated that all cities face financial challenges, however Jacksonville still enjoys a favorable economic environment and local indicators point to stability in the long run. Adding, that in summary, the financial highlights pointed out are all positive trends that provide evidence that the City’s financial condition was strengthened in 2007. He thanked key staff in the Finance Department under the leadership of Finance Director Paul Mushrush and Assistant Finance Director Cheryl Erkel for their help with the report. He then expressed their appreciation to the City and the Council for 8 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 21, 2008 7:00 P.M. – 7:36 P.M. allowing them the opportunity to serve as the City’s auditors. He related that they value the business relationship with the City of Jacksonville. In response to complimentary comments from Alderman Smith, Mr. Clark related that the City would be submitting the report for the award for excellence in financial reporting again this year. It was noted that the City has received the award for the past 10 consecutive years. He stated that there is a good segregation of duties within the City, eliminating any problems with internal control. He then addressed an issue with competitive bidding, noting that the City had passed an ordinance in 2008 increasing the required level of competitive bidding to $20,000.00 to match State requirements. Vice Mayor Fletcher stated that the report speaks well of the City of Jacksonville and its responsible handling of the taxpayer funds. He noted that while many cities in Arkansas have suffered severe financial hardships the City of Jacksonville is doing well. Alderman Stroud congratulated the Wastewater Utility, acknowledging a recently received award. Alderman Stroud moved, seconded by Alderman Howard to accept the 2007 CAFR as presented. MOTION CARRIED. Finance Director Paul Mushrush stated that the statements by Mr. Clark clarified the activities, which bring all the financial statements together. He reviewed the expendable fund balances, breaking down that $3.7 million of the $15 million in the General Fund, $2.1 in the Street Fund and $6.7 million in the Capital Improvement Fund as those funds make up the Capital Improvement Plan. He noted that there is $1 million in the Library Construction Fund. He then noted the addition of a new “best practices” item, explaining that it is a disaster recovery fund to provide ready resources in the event of a catastrophic event. He pointed out that building and contents insurance is at replacement value, noting that would be an essential element to put the City back in business as quickly as possible following a disaster. Vice Mayor Fletcher stated that this proves the point, that the leadership in Jacksonville is proactive, offering its citizens an opportunity to be very proud of its leadership. APPOINTMENT(S): ANNOUNCEMENT(S): 9 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 21, 2008 7:00 P.M. – 7:36 P.M. ADJOURNMENT: Without objection, Vice Mayor Fletcher adjourned the meeting at approximately 7:36 p.m. MOTION CARRIED. Respectfully, ________________________ _________________________ Susan L. Davitt MAYOR TOMMY SWAIM City Clerk-Treasurer 10