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09 AUG 20.doc CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 20, 2009 7:00 P.M. – 7:34 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 20, 2009 at the regular meeting place of the Council. Alderman Smith delivered the invocation and Troop 128 members: Kyle Jackson, Brian Stallard, Kyle Wallace led a standing audience in the “Pledge of Allegiance” to the flag. ROLL CALL: Aldermen: Elliott, Smith, McCleary, Sansing, Rinker, Ferrell, Stroud, Twitty, and Howard answered roll call. Mayor Fletcher also answered ROLL CALL declaring a quorum. PRESENT NINE (9), ABSENT (1). Alderman Ray was absent. Others present for the meeting were: City Attorney Robert Bamburg, Deputy City Clerk Lynette Culpepper, Director of Administration Jim Durham, Fire Chief John Vanderhoof, Police Chief Gary Sipes, Finance Director Paul Mushrush, Assistant Finance Director Cheryl Erkel, Public Works Director Jim Oakley, Human Resource Director Jill Ross, City Engineer Jay Whisker, City Planner Chip McCulley, Mr. Gerald Clark, Mrs. Beckie Brooks, Mr. Jim Peacock, Mrs. Edith Smith, Mrs. Addie Gibson, Mr. Jim Moore, Mr. Mike Wilson, Mr. Larry Smith, interested citizens, and members of the press. PRESENTATION OF MINUTES: Mayor Fletcher presented the minutes of the regular City Council meeting of August 6, 2009 for approval and/or correction at the next regularly scheduled City Council meeting. APPROVAL AND/OR CORRECTION OF MINUTES: Alderman Stroud moved, seconded by Alderman Smith that the minutes of the Regular City Council Meeting of 16 July 2009 be APPROVED. MOTION CARRIED. CONSENT AGENDA: REGULAR MONTHLY REPORT/POLICE DEPARTMENT Alderman Elliott moved, seconded by Alderman McCleary to approve the Regular Monthly Report for July 2009 regarding 2009/2008 yearly crime statistical comparison. REGULAR MONTHLY REPORT/FIRE DEPARTMENT Alderman Elliott moved, seconded by Alderman McCleary to approve the Regular Monthly Report for July 2009 from the Jacksonville Fire Department, which reflects a fire loss of $0.00 and a savings total of $0.00. ROLL CALL: Aldermen: Elliott, Smith, McCleary, Sansing, Rinker, Ferrell, Stroud, Twitty, and Howard voted AYE. MOTION CARRIED. WATER DEPARTMENT: WASTEWATER DEPARTMENT: FIRE DEPARTMENT: POLICE DEPARTMENT: 1 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 20, 2009 7:00 P.M. – 7:34 P.M. STREET DEPARTMENT: a. Request to Accept Bid for sidewalk on Loop Road b. Request to Accept Bid for curb, gutter, and sidewalk on West Valentine Public Works Director Jim Oakley recommended low bidders for both projects. He stated that this is the last phase of the Loop Road project, which completes the sidewalk from Military Road to North First Street. He then related that the bid for West Valentine would finish 500’ of missing sidewalks in that Subdivision. In response to a question from Alderman Smith, Public Works Director Jim Oakley responded that the City has not used the two low bidders on any previous project, but added that references were supplied from Bond Engineering. Alderman Smith moved, seconded by Alderman Elliott to accept the low bid from Whaley Construction in the amount of $31,163.40 regarding the Loop Road project and to accept the low bid from Boyles Construction in the amount of $76,905.05 regarding the West Valentine project with funds to be drawn from budgeted Street Funds for both projects. MOTION CARRIED. SANITATION DEPARTMENT: PARKS & RECREATION: PLANNING COMMISSION: GENERAL: a. ORDINANCE 1379 (#22-09) AN ORDINANCE AMENDING JMC § 13.10.110 (CREATION OF THE NORTH PULASKI WATERWORKS PUBLIC FACILITIES BOARD); PRESCRIBING OTHER MATTERS RELATING THERETO; DECLARING AN EMERGENCY; AND, FOR OTHER PURPOSES. City Attorney Bamburg clarified that Ordinance 1379 is a housekeeping measure, explaining that in the original creation of the Board there were certain financing requirements that were mandated that are not applicable and does not match what State law provides. He stated that in an audit process it was discovered that those measures were mandated, so the Board is requesting a revision. He stated that the attorney for the North Pulaski Waterworks Public Facilities Board has concurred with the amendment. He explained originally, there was a requirement that mandated certain fund activities would be reported back to the City Council, adding that such practice has not ever been nor should it be a function for the City Council. He explained that this Board is a separate entity from the City and has no means of obligating the City for financial circumstances. He stated that Ordinance 1379 would clarify that circumstance. Alderman Stroud moved, seconded by Alderman Howard to place Ordinance 1379 on FIRST READING. ROLL CALL: Aldermen Elliott, Smith, McCleary, Sansing, Rinker, Ferrell, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1379. 2 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 20, 2009 7:00 P.M. – 7:34 P.M. Alderman Smith moved, seconded by Alderman McCleary to APPROVE Ordinance 1379 on FIRST READING. ROLL CALL: Aldermen Elliott, Smith, McCleary, Sansing, Rinker, Ferrell, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Alderman McCleary moved, seconded by Alderman Stroud to suspend the rules and place Ordinance 1379 on SECOND READING. ROLL CALL: Aldermen Elliott, Smith, McCleary, Sansing, Rinker, Ferrell, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1379. Alderman Stroud moved, seconded by Alderman McCleary to suspend the rules and place Ordinance 1379 on THIRD and FINAL READING. ROLL CALL: Aldermen Elliott, Smith, McCleary, Sansing, Rinker, Ferrell, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Ordinance 1379. Alderman Stroud moved, seconded by Alderman McCleary that Ordinance 1379 be APPROVED AND ADOPTED. ROLL CALL: Aldermen Elliott, Smith, McCleary, Sansing, Rinker, Ferrell, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. Alderman Smith moved, seconded by Alderman McCleary that the EMERGENCY CLAUSE be attached, approved, and adopted. ROLL CALL: Aldermen Elliott, Smith, McCleary, Sansing, Rinker, Ferrell, Stroud, Twitty, and Howard voted AYE. NAY (0). MOTION CARRIED. th ORDINANCE APPROVED, ADOPTED AND NUMBERED 1379 THIS 20 DAY OF AUGUST 2009. b. RESOLUTION 632 (#11-09) A RESOLUTION AUTHORIZING AND SUPPORTING THE JACKSONVILLE WATER COMMISSION IN ITS EFFORTS TO PARTICIPATE IN THE MID ARKANSAS WATER ALLIANCE; AND, FOR OTHER PURPOSES. Alderman Elliott moved, seconded by Alderman Sansing to read the heading of Resolution 632 (#11-09). City Attorney Bamburg explained that the Mid Arkansas Water Alliance is an entity that was created to secure additional water rights for various communities and public facilities boards from the Greers Ferry area. He explained that in hopes of securing appropriate funding regarding the possibility for this project, the Jacksonville Water Commission has passed a Resolution and is asking the same of the City Council to support those efforts, appointing Mayor Fletcher and City Clerk Susan Davitt as the authorized agents to execute the appropriate documents. It stems from and deals with the funding that the Alliance is looking for in hopes of launching this water project and in the process, Jacksonville will 3 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 20, 2009 7:00 P.M. – 7:34 P.M. receive a proportional share of the water rights. He stated that this would be a win-win circumstance for the City, saying that if funding is received costs would be borne by the entire alliance. Water Department Superintendent Mike Simpson related that the amount of the sub-allocation would be 1.24 million gallons of water daily. He explained that initially there would be an upfront payment to the Corp. of Engineers of $292,584.00, which purchases these rights forever into the future. He added that they would have to pay an annual maintenance fee of $1,300.00 to continue maintenance of the Lake. He stated that this is the first step in Jacksonville procuring an additional source of water that could be utilized as an emergency supply for the City. He then answered that Jacksonville is a part of the “north of the river” group which consists of approximately 26 separate entities. He stated that these groups are creating a benchmark for the nation, noting that other states are working hard to model themselves in the same manner. He then answered that costs are proportional for cities in the Central Arkansas area. At this time, MOTION CARRIED. Whereupon City Attorney Bamburg read the heading of Resolution 632 (#11-09). Alderman Smith moved, seconded by Alderman McCleary to approve Resolution 632 (#11-09) in its entirety. MOTION CARRIED. c. PRESENTATION 2008 CAFR Gerald Clark, a CPA with McAlister and Associates presented the City’s Comprehensive Annual Financial Report (CAFR) for 2008, which contains the City’s 2008 financial statements and their audit report on those statements. He expressed appreciation for the opportunity to have performed the audit. He referred to the audit management letter provided with the CAFR, noting that additionally they prepared a summary financial report, which highlights the significant aspects of the information contained in the report. He explained that the Comprehensive Annual Financial Report represents a compilation of financial data that details the City’s financial workings. The information contained in this report was prepared in accordance with guidelines set forth by the Government Finance Officers Association (GFOA). He stated that the CAFR is intended to provide a clearly articulated, user-friendly reporting of the City’s financial affairs. He reviewed the three main report sections, noting Section I, the Introductory Section, which contains a financial overview, a discussion of the City’s economy, and organization charts for the City. He stated that Section II, the Financial Section, contains the auditor’s report, Management’s Discussion and Analysis (MD&A), audited basic financial 4 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 20, 2009 7:00 P.M. – 7:34 P.M. statements and the underlying combining and individual fund financial statements with supporting schedules. He then related that Section III, the Statistical Section, sets forth selected unaudited economic, financial trend, and demographic information for the City on a multi-year basis. He noted that the City was awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association for its 2007 report. He added that the City has received this Certificate of Achievement for the last 11 years and this year’s report also has been submitted for consideration for the award. He related that an award-winning CAFR shows a dedication to fiscal responsibility and outstanding financial management and reporting. It promotes improved public finance and can increase the City’s credit rating as it presents additional technical information not found in a standard financial reporting package. He stated that this award is a reflection on the entire staff of the City’s Finance Department, as this document was created and published in-house as opposed to the auditor preparing it. He explained that professional auditing standards will no longer allow them to prepare the financial statements and report on them without indicating a material weakness in controls. He stated that the report consists of management’s representations concerning the finances of the City. The City’s management assumes full responsibility for the completeness and reliability of all information presented. He added that in order to provide a reasonable basis for making these representations, the City has established a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with Generally Accepted Accounting Principles. The City’s management has asserted that, to the best of their knowledge and belief, this financial report is complete and reliable in all material respects. He informed the City Council that the goal of their audit was to provide reasonable assurance that the financial statements of the City for the year ended December 31, 2008, are free of material misstatement. The audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. He stated that based on their audit, they have rendered an unqualified opinion on the City’s financial statements for year ended December 31, 2008. He noted that the audit report is presented as the first component of the financial section of the report. He stated that professional standards governing Single Audit engagements require auditors to report not only on the fair presentation of the financial statements, but also to report on 5 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 20, 2009 7:00 P.M. – 7:34 P.M. the government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal grant awards. He noted that they have completed that report and it is contained in the Single Audit Section of the report. He stated that there are no reportable 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 Federal award programs. He related that as part of the audit process they have issued an audit management letter, intended to provide suggestions and guidance in an ongoing effort to improve internal controls. Although the items noted in the letter do not involve material financial issues, management has agreed with our recommendations that improved controls are warranted in some areas. Following are some financial highlights of the 2008 report: He referred to the “Statement of Net Assets” on pages 24-25, the first financial statement in the Report; this is essentially the City’s Balance Sheet, on the accrual basis of accounting. He stated that they are pleased to report the City’s balance sheet remained strong at the end of 2008 as total assets of the City exceeded total liabilities by approximately $52.9 million ($52,898,498). The amount by which assets exceed liabilities is referred to as net assets. He explained that net assets are composed of three components: the largest of which is its investment in capital assets such as land, buildings, infrastructure, machinery and equipment, this amount totaled $29.5 million ($29,502,901) or 51% of total net assets. These capital assets are used to provide services to citizens; and, as a result, are not available for future spending since capital assets cannot be used to liquidate liabilities. He then related that an additional portion of the City’s net assets are subject to restrictions as to how they may be used. At the end of 2008 these restricted net assets totaled $5.5 million ($5,506,038) or 9% of total net assets. The remaining balance, approximately $17.9 million ($17,889,559) is considered unrestricted net assets and may be used to meet the government’s on going obligations to citizens and creditors. He related that the second financial statement in the report is a Statement of Activities on pages 26-27. This statement is the City’s Income Statement for the year on an accrual basis. Overall, the City’s net assets decreased by approximately $2.3 million ($2,271,320). Net assets of the governmental activities decreased by $2.4 million ($2,434,950), which was a 5% decrease over beginning net assets. Net assets of the City’s business-type activities (essentially Sanitation Services and Emergency Medical Services) increased by $163,000, which was a 9% increase over beginning net assets. 6 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 20, 2009 7:00 P.M. – 7:34 P.M. He reported from pages 28 and 30 of the report looking at the financial statements of the City’s governmental-type funds (funds over which the City has some discretionary spending including the General Fund, Street, Sales Tax, Special Projects, and non-major funds on a combined basis). He related that at the end of 2008, these funds reported combined ending fund balances of $20.8 million ($20,863,205), which was a decrease of $5.2 million ($5,201,335) from 2007. He stated that a significant factor resulting in the decrease in fund balance was the City’s donation of $5.0 million to the United States Air Force toward construction of a $14.8 million Joint Education Center to provide higher education opportunities to Little Rock Air Force Base personnel and the local community. He noted that the unreserved portion of the combined fund balances within the governmental type funds is $7.1 million ($7,062,181), which represents 34% of the total combined fund balances. This uncommitted amount was available to support operations, funding for special projects, and equipment replacement funding, subject to Council policies. He then referred to page 30 of the report, saying that the City’s total 2008 revenues were $22.4 million and the total expenditures were $27.1 million on the modified accrual basis of accounting. He explained that Sales Tax revenues accounted for 61% or $13.6 million ($13,660,175) of total revenues. State tax turnbacks and other intergovernmental revenues were $4.3 million ($4,312,524) or 19%; and utility franchise taxes were $1.1 million ($1,144,223) or 5% of total revenues. Sales tax revenues in 2008 were up 4% over 2007 sales tax receipts. He concluded saying that in looking at the City’s General Fund as of December 31, 2008, the General Fund reported a fund balance of $3.5 million ($3,552,714), a decrease of $120,000. Of this amount, $3.2 million ($3,204,746) was unreserved and undesignated. This amount represents approximately 20% of 2008 actual General Fund expenditures and 17% of 2009 budgeted expenditures. He related that 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 expenditures based on the most recent completed year and, at the end of 2008, the balance on hand met this target. He stated that this minimum level of fund balance is required due to the sometimes cyclical nature of cash flow and the need for liquidity in case of a fiscal emergency. He pointed out that despite the challenging economic times affecting many cities in Arkansas and across the United States, Jacksonville remains well positioned financially, with a balanced budget, uncommitted reserve balances in excess of $7 million at the end 2008, and very minimal debt. This reflects the cumulative effect of cost savings and process improvements that have been put in place not only in 2008, but also in prior years. He commended the City’s leadership for being fiscally responsible. He reiterated credit to the City’s Finance Department under the leadership of Finance Director Paul Mushrush and Assistant Finance Director Cheryl Erkel and the staff for the preparation of this report. 7 CITY OF JACKSONVILLE REGULAR CITY COUNCIL MEETING AUGUST 20, 2009 7:00 P.M. – 7:34 P.M. He added his appreciation to all City personnel who contributed to the successful completion of this year’s report and finally, to the Council for allowing them the opportunity to serve as the City’s auditors. Mayor Fletcher acknowledged Finance Director Paul Mushrush and Cheryl Erkel for their contributions, adding his appreciation to the City Council and former Mayor Tommy Swaim for the City’s good fiscal shape. Alderman Ferrell moved, seconded by Alderman McCleary to accept the 2008 CAFR as presented. MOTION CARRIED. APPOINTMENT(S): ANNOUNCEMENT(S): ADJOURNMENT: Without objection, Mayor Fletcher adjourned the meeting at approximately 7:34 p.m. MOTION CARRIED. Respectfully, ________________________ _________________________ Susan L. Davitt MAYOR TOMMY SWAIM City Clerk-Treasurer 8