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Minutes from the Finance Committee meeting on November 20, 2003.
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Finance & Administration Committee Minutes
Budget Overview
Thursday, November 20, 2003
5:00 p.m. - Huntington Building
Members Present: Alec Farmer, Darrel Dover, Jim Hargis, Ann Williams. Absent: Harold Perrin. Others present were: Judy Furr, Alan Young, Larry Flowers, Becky Sharp, Jim McKinnon, Michelle McDaniel, Dick Darouse, Vickie Gray, Nathan LaRue, John Easley, Suzanne Hackney, Keith Inman, Jonesboro Sun and Donna Jackson, City Clerk.
MINUTES
Councilman Hargis moved, seconded by Councilman Dover for the approval of the minutes of October 20, 2003. All voted aye. Copies were made available to those in attendance.
Councilman Dover, seconded by Councilwoman Williams for the approval of the minutes of October 21, 2003. All voted aye. Copies were made available to those in attendance.
PRINCIPAL FINANCIAL GROUP
Mr. Dick Darouse and Ms. Vickie Gray provided account information for funds allocated, current account balance and returns for Jonesboro’s Pension Plan. It was explained that as of October the rate of return was 14%, and with the improved rate of return our contribution would be lower for 2005. Ms. Gray explained the City of Jonesboro at the beginning of the year was underfunded by $2,000,000, but to date that deficit has been reduced by $500,000. Ms. Gray provided information regarding PFG advisory investment services. She explained the cost would be $4,000.00 and would take the fiduciary responsibility off the City Council. Principal Financial Group agreed to provide an update proposal for the Finance Committee’s consideration at the next regularly scheduled Finance Committee meeting.
TRANSIT AUTHORITY
The Northeast Arkansas Transit was on the agenda for discussion regarding funding for the 2004 budget, but no one from the committee attended.
SALARY SURVEY
Mr. Nathan LaRue provided an overview of the Modified B Plan and a brief history of how salaries were determined for the fire department. He explained prior to 1996 benefits were based on 1 year, 3 year, 5 year, and 8 year step raise, above and beyond the cost of living increases. However, in 1996 step raises were replaced with the merit system which created discrepancies in pay. He explained one block of money would be allotted for the department, but in order to give an exceptional employee a pay increase, the money would have to be taken from another employee. He also stated there were no absolute methods of determining who would receive a raise and who would not, and every year the discrepancies became greater, until the merit system was replaced with across the board cost of living raises. Mr. LaRue stated if the problems had been addressed in earlier years, it would have cost a lot less money to correct. In 2001 a survey was conducted in house which resulted in raising the new hire pay, but compressed the salaries of long term employees. Mr. LaRue provided an amount of $16,000 that would fix the Modified B Plan for the fire department, and clarified this would not provide the separation, but rather equalize the discrepancies. In an effort to prevent the problem of separation in the future he also provided hypothetical promotions through the ranks of the fire department. He recommended the B Plan over the Modified B Plan because anyone over 7 years service misses a step raise. Ms. Hackney stated Condrey and Associates modified the plans due to budgetary constraints, and recommended if the Modified B plan was used this year, then next year the last equity step be provided to those employees with 7 years of service or above. Councilman Farmer questioned the significance of asterisks being placed by certain employee’s names, specifically in the Street Department which read, “Recommended by Department Head”. Ms. Hackney explained it was where an individual was hired and paid considerably more money than some employees already on the job. She explained Mr. Condrey was trying to close the gap in the pay discrepancy. She stated it was an unusual circumstance in that they were hired by the council. Councilman Farmer questioned the ability of the council to hire employees. Ms. Hackney stated she would provide the details to Mr. Farmer. Councilwoman Furr explained the Police Department has the same type of discrepancies as the Fire Department.
TRAFFIC STUDY
Councilman Dover questioned if the new mall does not develop would there still be a need for the traffic study. Mr. John Easley responded saying they expanded the scope of work to the east of the Southern Hills Mall. He explained the mall was a “wake up call” because the area is still growing and moving in that direction. Councilman Dover motioned, seconded by Councilman Hargis to approve the traffic plan. All voted aye.
CDBG
Mr. Jim McKinnon, Grants Coordinator stated he had spoken with HUD regarding the prorating of salaries under CDBG program. He explained the CDBG budget needed to reflect the responsibilities of that program, with all salaries being prorated to the other programs being worked on. The recommendation provided by Mr. McKinnon was 90% CDBG, 5% MPO, and 5% Administrative. Discussion was held regarding the prorating of office space, supplies, and processing of payroll, with Mr. Larry Flowers, Finance Director explaining it would be such a small amount it would not be worth the effort.
TENNECO LEASE
Mr. Flowers explained the Mayor was unable to attend, but explained this was an industrial revenue bond issue between the City of Jonesboro and Tenneco who sold their lease to Lincoln Automotive Company. Mr. Flowers stated supposedly the bonds have been paid off, and Lincoln Automotive is requesting the deed to the property. Mr. Flowers stated Mayor Brodell had explained that in the past the City Attorney handles these arrangements, but wanted a recommendation from the committee. Questions were asked regarding who has the deed, and how do we know if the bonds have been paid off. Councilman Dover questioned whose responsibility was it to notify the tax assessor to add an industry to the tax records. Mr. Flowers stated a procedure needed to be established. He explained Mayor Brodell was going to check to see if Lincoln Automotive was current with their taxes since the bonds have been paid off. It was determined that more information was needed before the committee could make a recommendation.
3411 QUAIL RIDGE
Councilman Farmer gave an overview of the Quail Ridge area explaining how much money had been spent, even though the drainage issues had never been resolved. He emphasized the importance of correcting the problems in the most cost effective way. It was explained that the Phase II Storm Water Management discourages the construction of concrete ditches with regard to drainage. Councilman Farmer explained less money could be spent, but the problem with still exist. The committee was still waiting on direction from City Attorney, Phillip Crego regarding the McDaniel property as well as identifying the property behind the 3411 Quail Ridge residence. Councilman Dover moved, seconded by Councilwoman Williams to get the additional property appraised by Mr. Bob Gibson so the information could be brought back to the committee for reconsideration. All voted aye.
ADJOURNMENT
With no further business Councilman Dover motioned, seconded by Councilman Hargis to adjourn.