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Minutes from the Finance Committee meeting on January 19, 2006.
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Finance & Administration Committee Minutes
Thursday, January 19, 2006
4:00 p.m.
Members Present were: Darrel Dover, John Street, Jim Hargis, Harold Perrin, and Ann Williams. Councilman Alec Farmer was unable to attend.
PRESENTATION
Presentation by Mr. David Clark, LOPFI Executive Director: Mr. Clark discussed how money is put into the retirement account for the retirees on the old plan. He explained the City pays into the account each month and will be paying in at a rate of 25.61% of payroll for 2006. He stated that of that 25.61%, 10.67% is for the unfunded liability portion, which unfunded liabilities are common. He added the City is current and pays the bills in a timely manner, which is not the case with some other employer groups his company deals with. He noted that in 1997 the retirees on the old plan were given an increase to 75% of their salary, but a cost of living increase is not worked into their plans. The people covered by the LOPFI plans have a 3% cost of living increase worked into their benefits. He explained the City can add a cost of living increase, which the City Council would have to recommend. Discussion was held regarding how the state turn back and the millage tax pays for the retirement benefits. Mr. Dan Melton questioned the millage tax and where the money from that goes. Mr. Clark explained he has nothing to do with the millage tax; that it’s handled by the City. Councilman Dover motioned, seconded by Councilman Street, for LOPFI to evaluate the cost of an actuarial study that would determine what it would cost the City to add a 3% cost of living increase and a $100 a month for retirees on the old plan. All voted aye. Mr. Clark stated it would be after February 20 before he could get the cost back to Mr. Larry Flowers. It was also asked for Mr. Flowers to look into the millage tax to determine how much money is made from the tax and how much is paid to LOPFI.
MINUTES
Councilman Dover moved, seconded by Councilman Street, for the approval of the minutes for the December 15, 2005, regular meeting. All voted aye. Copies were provided to all those in attendance.
ORDINANCES AND RESOLUTIONS
Ordinance to accept bids and appropriate funds for an excavator: Mr. Teddy Hooton presented the committee with a short video showing what the excavator he recommended purchasing could do. He explained the Public Works committee recommended purchasing an excavator to do some mowing, while also contracting out some of the mowing so the City can get a fair comparison as to which is best. Mr. Hooton recommending purchasing the Caterpillar excavator from the JA Riggs bid #1 for $178,500. He added the Cat excavator is not the lowest bid, but it does fit what the City needs the best. He further explained the Cat excavator has a zero turn radius feature allowing it to be used in smaller ditches, which the other excavators did not have. It was also explained the excavator has a hydraulic pump that will allow it to be used with the mower. Councilman Street motioned, seconded by Councilman Dover, to present the ordinance to full Council accepting the JA Riggs bid for a Caterpillar excavator. All voted aye.
Ordinance to waive bids for purchasing fuel to supply the fuel tanks at the City Shop: Mr. Hooton explained that he would like to purchase more than $10,000 worth of fuel, but to do that he needs to waive formal bidding in order to do so. He further explained due to the cost of fuel, a full tanker costs more than $10,000. But, to buy less fuel would result in a higher price per gallon. Councilman Dover motioned, seconded by Councilman Street, to extend Ordinance 3570 to have a December 31, 2006, expiration date. All voted aye.
PENDING: Ordinance for electronic plat submission: Mr. Alan Young informed the committee he is not ready to present the ordinance yet. He stated since the City had hired a new City Planner, he would like to run the ordinance by the City Planner before bringing it to the committee.
Ordinance for 2005 Budget clean up: Chairman Perrin asked that information related to items on the Finance committee meeting’s agenda be handed in prior to the meeting so the committee members would have ample time to look over the information before having to make a decision. Councilman Dover motioned, seconded by Councilwoman Williams, to recommend the ordinance to full Council. All voted aye.
Resolution for a review of the 2005 Legislative Audit: Mr. Larry Flowers explained to the committee the auditors have accepted the responses to their findings. Discussion was held on the findings of the auditors. Councilman Dover motioned, seconded by Councilman Street, to recommend the resolution to full Council. All voted aye.
ADMINISTRATION
PENDING: Update on deeds to City real property: Mayor Formon stated Mr. Vic Young is working on identifying all the pieces of property owned by the City that is on record with the courthouse. Mr. Brian Wadley added they received 427 separate documents from Lender’s.
HUMAN RESOURCES
PENDING: Firefighter pay: Ms. Suzanne Hackney that because it is complicated, it will take some time to do. She is working on it.
PENDING: Elected officials survey: Ms. Hackney stated she has half of the information put together and is expecting to have to present the survey at the next meeting.
PENDING: Pension multiplier: Discussion was held regarding increasing the pension multiplier to 1.75%. Mayor Formon stated he did not want to do anything to affect the pensions of senior employees. Ms. Hackney explained that no one wants non-uniform City employees to have the same multiplier as uniform employees, but they would like to have an increase. She also presented the committee with a pension comparison of uniform and non-uniform employees and the benefits they would receive. Mayor Formon noted that the Animal Control officers and the Code Enforcement officers are not considered uniform employees, although there is some risk in their jobs. Mr. Flowers added the cost of increasing the multiplier to 1.75% would be approximately $100,000.
Questions were raised concerning the recent resignation of the Transportation Director. Mayor Formon discussed the situation and stated she resigned because of personal reasons, not because of the workload in the department. He also discussed another individual that was interviewed that they were very interested in from Idaho. The individual is now residing in Jonesboro and they are talking with him about the Transportation Director position. He added the individual moved to Jonesboro because his spouse has family in the area and they intended to move to Arkansas regardless of getting the Transportation Director position.
INFORMATION SYSTEMS
PENDING: Financial software update: Mr. Young informed the committee two trainers were on hand last week. He added they’re hoping to customize the reports soon. He further noted the trainers last week are the end of the contracted training for the software. Questions were raised as to whether or not the City would need any more training. Mr. Young stated if they do have to have any more training the City will have to pay for it, but the City is at the point in which the company usually stops training. It was questioned when the software would be off the agenda. It was also questioned whether the City is doing direct deposit. Discussion was also held on the computer policy Mr. Young is working on.
PENDING: Fleet software: Mr. Young stated the Fleet software should be ready by mid-February. The contact management module for Code Enforcement is being evaluated now and should be ready late-February. Mr. Young also stated no training was purchased for the Fleet software, so if training is needed they will need to figure something out when the time comes. He added the contact management software is simple enough it won’t need training.
FINANCE & AUDIT
PENDING: Request from A&P Commission for an audit of 2004 tax remittances: Mr. Flowers stated City Collector Becky Sharp is working on figuring out who is not paying privilege licenses in the City. She’s still working on the A&P audit and hopes to have more information at the February meeting.
Transfer of funds from full time salaries to fixed assets for two desks: Mr. Flowers explained when he budgeted for the new Accounting Technician position, he budgeted for the position to start January 1. But, since the position has still not been hired, there is extra money in his full-time salaries account. He explained he would like to buy two new desks with the extra money in full-time salaries. Councilman Dover motioned, seconded by Councilwoman Williams, to allow for the transfer of funds. All voted aye.
PENDING: Pension funds: Mr. Flowers discussed the pension funds. He stated the Finance department puts the money in a holding account and pays LOPFI according to the bills the department receives. He indicated he would send the committee information showing how much the City collected and then submitted to LOPFI over the years. He further noted the City cannot pay more than what the bill is for and cannot make voluntary contributions. He added he does have the figures showing the City is paying the amount they’re supposed to. It was explained the retired firefighters are mostly concerned with the millage and where the money from the millage tax is going. It was questioned if the money made from the millage tax is more than what LOPFI billed the City, where the money went. It was further explained that if the millage tax did make more than what LOPFI billed, then the City could have implemented a cost of living increase for the retired firefighters on the old pension plan.
Decision by Finance Committee on whether to budget the Capital Improvement Funds as a separate budget and any desired changes in the City’s chart of accounts: Mr. Flowers questioned whether Mr. Young would be able to do the work to allow the Finance department to do the full budget for 2007 in Springbrook. He discussed the budget preparations that would start soon. Mr. Flowers noted that if the committee does want to separate the Capital Improvement Fund from the rest of the budget, then a decision needed to be made soon. It was questioned how much work would need to be done to get the software ready and how long it would take. Mr. Young made the analogy that the software is a tool box and does have the right tools, but they would still have to use those tools to build what the City needs. Mr. Flowers recommended putting the Capital Improvements Fund in a separate account. It was decided to make the Capital Improvements Fund a separate budget.
OTHER
City Clerk Donna Jackson asked when the projector and screen for the Council meeting area would be installed. Mr. Young stated the projector is in his office and he’s waiting on Mr. Keith Sanders to have time to install it. Ms. Jackson also stated there are deeds to City property in her vault, but came from different locations and where not identified. She asked if those deeds could be included in the work Mr. Vic Young is doing to identify City property. Ms. Jackson also asked for a copy of the most recent computer policy that Mr. Young has made so she could give it to the Records Management committee.
Review 2006 Finance Committee projects: Discussion was held regarding 2006 project for the Finance Committee. It was suggested for the City to look into ways to provide additional revenue, such as updating the privilege license fees and starting impact fees.
Mayor Formon noted that they will be bidding the housekeeping services. He added that because the City only pays the part-time housekeeping staff $6.77 an hour, he’s not expecting much of a saving to privatize custodial services. It was also suggested that Craighead Forest and Joe Mack Campbell Parks as well as the cemeteries should not be included with the privatized mowing services. It was asked whether or not the mowing had been bid out. Mayor Formon indicated he wasn’t sure since Mr. Jason Wilkie was working on it. It was asked if he would provide the committee with the information if the mowing had been bid out. Other projects mentioned for the committee to look at included getting an inventory of all City-owned vehicles and exploring the cost effectiveness of mileage reimbursement; better control of City credit cards; and health insurance and pension plan alternatives.
Discussion was then held concerning someone the City contracts work repairing wiring and other electronic repairs on the police cars. It was explained the Police Department paid this individual $30,000 last year. Mayor Formon suggested hiring this individual full-time and paying them in the $28,000 to $30,000 pay range to perform electronic repairs for the Police Department and also for the Street Department. He added it would be less expensive for the City to hire the individual, even after the cost of benefits is added, than to keep contracting work to him. It was asked for Mayor Formon to meet with Ms. Hackney to put together a job description for the position.
Chairman Perrin also suggested hiring more people in the Engineering Department. It was explained the department is spending a lot of money to contract out studies. He added the City could save money by hiring more people and do more studies in house.
Mayor Formon also stated special Finance and City Council meetings may have to be called soon so money can be appropriated to purchase the fire trucks the City had authorized a purchase order for at the beginning of the month. An appropriation was not made to purchase the vehicles yet, but a purchase order has been issued. Chairman Perrin stated he would meet with Mayor Formon the next day to discuss the fire trucks.
ADJOURNMENT
With no further business, Councilman Street motioned, seconded by Councilman Dover, to adjourn. All voted aye.