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Minutes for the Finance Committee meeting on April 21, 2005.
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Finance & Administration Committee Minutes
Thursday, April 21, 2005
4:00 p.m. - Huntington Building
Members Present: Alec Farmer, Darrel Dover, Jim Hargis, Ann Williams, Harold Perrin. Councilman Street was unable to attend. Others present were: Mayor Doug Formon, Donna Jackson, City Clerk, Phillip Crego, City Attorney, staff and media.
MINUTES
Councilwoman Williams moved seconded by Councilman Dover for the approval of the minutes for March 24, 2005 as provided. All voted aye. Copies were made available to all in attendance.
ORDINANCES & RESOLUTIONS
Destruction of Records: Councilman Perrin moved, seconded by Councilman Dover to recommend to the full council a resolution for the destruction of certain financial and accounting records. Mr. Flowers stated he had identified several boxes of records that can be destroyed according Resolution 1993:59 and State Statues. Chairman Farmer questioned if Mr. Flowers would be doing this on an annual basis. Councilman Perrin questioned why the committee had to approve the destruction of records, to which Mr. Flowers explained it is required by Resolution 1993:59 that an affidavit be adopted by the Jonesboro City Council. All voted aye.
FINANCE & AUDIT
Rollover IRA Agreement - Economic Growth and Tax Reconciliation Act: Ms. Hackney explained the Economic Growth and Tax Reconciliation Act of 2001 requires mandatory distribution over $1,000.00 be rolled over into an IRA unless the participant elects otherwise. She further explained anything under $1,000.00 can be paid directly to the individual. Ms. Hackney stated Principal Financial was offering its IRA services, and Mr. Flowers explained we would have to sign a plan amendment that would address the roll over provisions. Councilman Perrin moved, seconded by Councilman Dover to accept the staff recommendation to use Principal Financial for the Rollover IRA Agreement. All voted aye.
Non-Uniform Pension Plan Administrator: Councilman Dover moved, seconded by Councilman Perrin to stay with Principal Financial as the Non-Uniform Pension Plan Administrator. A committee made up of Councilman Perrin, Councilman Dover, Mayor Formon, and Larry Flowers were asked to research this matter and make recommendations. Councilman Perrin clarified that it was an administrative decision, based on cost, accountability, return and service. Councilman Dover explained the City of Jonesboro had chosen the Benefit Index years earlier, and left money with Travelers Insurance when they left. Mr. Flowers was asked to notify all companies that had bid. All voted aye.
Non-Uniform Pension Plan Allocation Recommendation:
The same committee who was asked to review the Non-Uniform Pension Plan Administrator was also asked to research and make allocation recommendations. Councilman Perrin stated equity is still doing well, and at the end of April, when the figures are available, they would meet again on the matter.
APERMA & Arkansas Municipal League Property Insurance: Mr. Steve Kent, Purchasing Agent reported he had spoken with the Arkansas Municipal League and they were preparing a presentation. He stated Mayor Formon had requested the same report be provided by APERMA. Mr. Kent stated he had informed them that the Finance Committee meets on the third Thursday of the month and they hope to hand deliver by the May meeting. Mr. Kent reported he has not heard from the insurance adjusters yet regarding the radio tower, but informed committee members that the tower itself wasn’t depreciated and is still at $38,000, while the coax and antenna are listed under building contents which are insured for up to $100,000. Councilman Perrin requested a meeting with Mayor Formon, and a Representatives of Alltel, for the purpose of discussing communications and engineering of the tower. Mayor Formon reported there had been several offers of help, but Mr. Bob Andrews had assessed the cost for moving everything compared to constructing a temporary tower and the temporary tower would be more cost effective. He also explained the original tower was 520 feet which was too tall causing poor communications; therefore the new tower will only be 320 feet high. Councilman Farmer noted Jonesboro was fortunate that no one was injured and stated this was a good example of what could happen with citizens in and around the landfill.
HUMAN RESOURCES
Catastrophic Sick Leave Bank: Ms. Hackney reported the City Employee Representative Committee agreed to take off the request to borrow hours from other participating employees. She explained the catastrophic leave from the “Catastrophic Sick Leave Bank” will run concurrently with “Family Medical Leave”. She explained it puts a strain on a department when a job is open and no one to fill it, so to run the Family Medical Leave concurrent with the sick leave (which is legal) compresses the length of time an employee can be off. She stated the plan requires the leave should be taken in eight hour, twenty-four hour increments, and will not be granted intermittently. She explained if an employee needs to go four or five hours a day for treatment then the hours must come out of sick time or family medical, not out of the sick bank. Councilman Farmer asked how the hours would be accounted for, and did she perceive any initial problems with start up. Ms. Hackney responded saying Deloris Wicker in Finance and Human Resources would maintain the hours, and did not expect any problem keeping up with the time. She did not anticipate more than fifteen employees using it. Ms. Cindy Wright, City Employee Representative for the Sanitation Department, explained the Board recommended placing unused sick hours in the sick bank, so the sick bank would never get low, and to help an employee whose hours have maxed out. Concern was expressed regarding the accumulation of large numbers of unused sick bank hours, but it was determined that the accumulation of hours was irrelevant, since the Catastrophic Sick Leave Board must approve additional leave, and approval is limited to certain circumstances. Councilman Perrin requested Ms. Hackney and Mr. Flowers check with Springbrook to make sure the new financial software will be able to calculate the sick leave and accrued hours for each employee. He also recommended Ms. Hackney and Mr. Flowers explain the proposal to the insurance company handling short term and long term disability. Councilman Perrin explained disability insurance will not pay on top of the catastrophic leave, and he did not want an employee thinking they would receive 6% of their salary plus the catastrophic leave. It was explained an employee will elect to participate annually in one or the other options. City Clerk Donna Jackson asked for clarification regarding decisions made by the Catastrophic Sick Leave Board. She explained various departments will be effected by the decision to extend leave to an employee, and questioned what recourse a department head has should leave be granted, should the department end up without adequate staffing. She questioned should the department head not be consulted when considering extended leave by the Catastrophic Sick Leave Board. It was explained that the department head would sign saying the employee qualifies for the leave, but the board would make the ultimate decision. Ms. Hackney stated the employee would come to the department head first. Councilman Farmer questioned if the wording should not be changed to the “Senior Elected Administrator” rather than the “Mayor” as it pertains to the Catastrophic Sick Leave Board (Item 12 in the proposed plan), since there are three elected officials who are responsible for their own employees. Councilman Perrin stated a physician would not be willing to be named as a board member, and a medical report would be provided by the attending physician at the request of the employee. He further stated the Board should be limited internally to the Mayor, Finance Director, and Human Resource Director. Councilman Perrin moved, seconded by Councilman Dover to amend item 12 of the plan by removing the words “Physician”, “Mayor’s Operations Manager”, leaving Finance Director, Mayor, and Human Resource Director. All voted aye. Councilman Perrin moved, seconded by Councilman Dover to have the policies and procedures be sent back to Human Resources Director to be developed and brought back to the Finance Committee for recommendation to the full council. Councilman Dover asked for clarification on what the motion was referring to regarding the word “procedures”. Councilman Perrin stated it was referring to the procedure for replacing an employee for a small department. Councilman Farmer stated the Finance Committee would either choose to add additional help or not to add additional help. Councilman Perrin amended the original motion to refer the matter to Human Resources for clarification purposes, Councilman Dover seconded the motion. All voted aye.
CDL Licensed: Discussion was held regarding CDL licenses for Street and Sanitation employees. Ms. Hackney recommended requiring new hires to acquire the license, and if employed when the license has to be renewed, the City would pay 50%. Councilman Perrin questioned if it was required in the job description, and was told it was required. Mr. Hooton explained some employees were told in the past they did not have to have a CDL license. He explained one driver only needs a CDL license 1% of the time, but he must get another driver to move his truck for him. Mayor Formon stated each Police Officer is required to be radar certified, and the City pays for the certification. Councilman Dover asked that the number of employees needing the license be provided as well as a cost estimate for renewing the license.
Beneficiary - Death Benefit: Ms. Hackney stated at the last Finance Committee meeting Ms. Rae Willis, of Principal Financial was asked to provide options on death benefits for a beneficiary of an active employee. She stated Ms. Willis send a sample plan, but it was not what was needed. Ms. Hackney commended the new representative for Principal Financial and explained he was still working on the matter. She stated there will be several other areas that will be affected by making this type of change, and recommended professional advice be obtained prior to making an amendment to the plan. Councilman Perrin stated there were ways to accomplish giving survivor benefits, and save the City money, without amending the current plan. Councilman Perrin offered to assist with this endeavor.
Union Dues: Mayor Formon reported the State Legislator had passed a law requiring Union dues and Professional dues be taken out of City Employee checks, and according to Interim Chief Eads there are approximately 50 to 60 separate organizations the officers are involved in. Mr. Flowers stated this was an unfunded mandate and would place a tremendous work load on Deloris, because each deduction has to be balanced. He explained Deloris will not be able to handle this alone, even with the new software, and an additional employee will have to be hired. Mayor Formon stated if an employee comes in and requests the funds be deducted from his check it must be sent within five working days from the payroll. Councilman Perrin raised the issue of direct deposit. Mr. Flowers stated there were some problems in that payroll is done twice a month, but these deductions may be required weekly. It was determined that Springbrook would have to be consulted about these matters.
Position Change to Mechanics Supervisor: Mr. Hooton explained the position would be raised one pay grade requiring a 10% increase in pay. Ms. Hackney stated she had a job description of the new position. It was explained there were mechanics in two different departments they were trying to centralize the work in the shop area, and the new position would be a working position as well as issue work orders to all mechanics. It was explained this position does not affect the Police mechanic position. Councilman Dover moved, seconded by Councilman Perrin to accept the Mayor’s recommendation to amend the budget by $3,009.77 for the position change for Mechanics Supervisor. It was explained an ordinance would have to be prepared. All voted aye.
Lifting the Hiring Freeze - Sanitation Back-Up Driver: Councilman Perrin moved, seconded by Councilman Dover to lift the hiring freeze for the position of Sanitation Back-Up Driver. All voted aye.
Welder to an Operator 2 Position: Mr. Hooton stated he had a vacancy of a welder position that is a pay grade 12 and requested it be converted to an Operator 2 position. It was explained it was a lateral move and revenue neutral. Councilman Dover moved, seconded by Councilman Hargis to recommend to the full council. Councilman Perrin cautioned making someone a supervisor who is not supervising anyone, based on the Condrey study. All voted aye.
Employee Representative: Ms. Cindy Wright, City Employee Representative for the Sanitation Department, stated the Board is requesting the retirement be increased from 1.5% to 2%. Mr. Flowers explained to increase from 1.5% to 2% it would be an additional cost of ¼ million dollar cost for the city. Councilman Perrin stated that needed to be reviewed during the budget process for 2006.
INFORMATION SYSTEMS:
Springbrook: Mr. Young was asked how soon the software would be operational. He responded saying they have hit some “bumps”. He explained he was hoping to have the first live pay check from the system on May 13th, but it will be the last day of May. He stated they were working through the problems. Mr. Flowers reported work was also being done on the budget preparation package. Councilman Perrin questioned if a scope of work was provided by Springbrook to which Mr. Young responded saying the schedule was not in the original contract. Mr. Young was questioned when did he expect this to be up and running. Mr. Young stated the first live check would be the last day of May and accounts payable soon after. Mr. Young after that phase they would do Collections and Human Resources. He stated the primary modules were suppose to be ready the end of June, but now it will be a couple of weeks into July, and after that they will begin with Building Permits and Vehicle Maintenance and should be finalized by the end of the third quarter of this year. Councilman Perrin requested the subject of direct deposit and credit card payments be discussed at the next Finance Committee meeting.
Correction in 2005 Info Systems Budget: Mr. Young stated he had made a typo in his budget request under Maintenance Contract for Network Software Maintenance. He explained it was supposed to be $16,000 (some odd) and he requested $6,000 (some odd). He stated he would be coming back next month with an ordinance to amend the budget and offered his apologies.
ECONOMIC & GRANT DEVELOPMENT
Discussion was held regarding the Allen Park Concession stand. Councilman Dover questioned if it would be modified, since the City would be manning the property instead of the Tennis Association. It was explained originally the Tennis Association was going to run the facility for the City of Jonesboro, and as part of the agreement they wanted the City to construct a building for their offices, storage and restrooms, but since an agreement has not been reached, the City will operate the tennis courts using city employees. Mr. Wilkie explained the reason an agreement could not be reached was because we were unable to provide them the building. He stated the Tennis Association was committed to raising funds for the building, and there was still a possibility of getting them to do this if we can get them the building as an office. Mayor Formon stated they had decided to go with wood construction instead of block which should bring the cost down considerably. Mr. Wilkie stated the plan has been modified by cutting the square footage to 1300, removal of an awning, and elimination of other architecture work, holding the cost to $127,000 to include architectural fees. Several council members questioned if 1300 square feet was necessary, and expressed concern for paying over $100.00 a square foot for a block building.
Sewer Improvement Project - Phase I: Mr. Copeland provided an update on the Sewer Improvement Project located at Patrick and Greensboro Road. He stated there were three weeks left for Phase I, and Mr. Hartwick was obtaining easements for the rest of the project. He reported in 30 to 60 days they would be ready to begin Phase II, and expected to be under budget for both Phases I and II.
Transportation: Mr. Copeland stated the Jonesboro City Council had adopted a resolution that provided for an ad hoc Transportation Committee with a six month expirations date, whose purpose is to make recommendations to the City Council and to Mayor Formon showing the feasibility, funding, and organization of the transportation system. Mr. Copeland stated the Transportation Committee recommended the staff use the 2002 transportation study for the basis of a four component proposal. Those components are:
1. Need: Will provide the target area and population.
2. Cost: Capital cost and Operating Budget. Financial projections for 2006, 2007 and 2008 will be provided.
3. Funding: Identify what Federal & State Transit dollars are available. Community/Business donations, and finally City subsidy for the operating cost. Mr. Copeland explained not only will a pledge card be signed by local businesses, but a signed agreement showing the dollar amount will be provided.
4. Public Support: Through community organizations, media, public forums, and public hearings to determine public reaction.
Mr. Copeland reported the Jonesboro Urbanized Zone Area (UZA) has received annual allocations since 2003 for a current balance of $ 1,276,731.00, which is being held by the Arkansas Highway and Transportation Department. He also reported there was an additional $109,865.00 this fiscal year in 5309 money. Mr. Copeland stated once the proposal is complete, a formal recommendation will be provided to the City Council and to Mayor Formon for an informal discussion of the proposal (not at a City Council meeting).
Forestry Grant: Mr. Wilkie stated he had to amend his proposal due to some information provided by Associated Engineering. He stated it was a 50/50 grant and $20,000.00 had been budgeted ($10,000 from the State and $10,000 from the City) with an application deadline of May 1, 2005. Mr. Wilkie explained Public Services approved the items pending estimates on the Greenway Planning. He asked consideration for option number 2, but stated option 1 would be preferred as amended. He explained the money was in the budget and wanted to just bring the changes to the committee’s attention.
MAYOR’S OFFICE
MATA 141 Project: Mr. Wadley explained four years ago changes occurred when Highway 141 was being constructed. He explained the plans did not match the field conditions, so decisions were made to change the project in order to proceed with the work. Mr. Wadley stated it was unsure how the change order was over looked, but the amount was for approximately $14,000.00 that Meadows Construction had paid to an engineering firm. Mr. Wadley recommended paying the money to Meadows Construction explaining, Mr. Aubrey Scott had stated the money was owed even though no record was found, and procedures were not followed. Councilman Perrin moved, seconded by Councilman Dover to pay for the change order for MATA Project 141 to come from Capital Improvements. Mr. Wadley stated they would prepare a resolution to recommend to the full council. All voted aye.
Ditch 26 Project: Mr. Wadley reported they were preparing a resolution in the amount of $20,575 when they received an addition request for $900.00. He also reported Attorney Frierson had stated they may or may not accept the amount, and the jury may award further funding. He asked that the matter he held since it was a work in progress.
Willett Lawsuit: Councilman Dover moved, seconded by Councilman Perrin to refer this matter to the full council at the next city council meeting. Mr. Wadley stated one of the stipulations of the settlement was that APERMA would pay ½ of $4,300 for attorney’s fees and a report, and the City would install 545 feet of chain link fencing, plant red-tip photinas, and correct the drainage. All voted aye.
Hot Spot Drainage Issues: Mr. Wadley reported the estimate was for $28,000 and they were starting negotiations in an effort to bring the cost down.
Latourette Lawsuit: Mr. Wadley stated he had sent an email regarding a proposed settlement, but did not feel council members wanted to offer a settlement, but rather wanted to proceed on with a trial. He explained citizens in the area were adamantly opposed to offering a settlement.
Razorback Concrete: Mr. Wadley reported Razorback Concrete was interested in purchasing the proposed landfill site consisting of 86 acres. He was instructed to get an appraisal and check with each department to determine if there was another use or need for the property. Mr. Wadley stated they had spoken with a property owner in the Keller’s Chapel Road area regarding a detention pond to relieve flooding in Farm Creek. Mr. Wadley explained this property owner expressed an interest in doing a land swap of his land for the landfill site. Mayor Formon and Mr. Wadley were asked to bring a recommendation to the next Finance Committee meeting.
Huntington Building: Mr. Wadley reported in the 2005 budget there had been a $50,000 Capital Improvement appropriation to remodel the Huntington Building. He explained they have exceeded that amount by $3,000.00 and still need to furnish the offices. Mayor Formon and Mr. Wadley were asked to prepare an ordinance to amend the budget once they have the finalized amount so the Finance Committee may review it.
Lifting Hiring Freeze - Human Resources and City Clerk: At the request of Mayor Formon, Councilman Perrin moved, seconded by Councilman Dover to lift the hiring freeze for both Human Resources and City Clerk. All voted aye.
OTHER BUSINESS
Capital Improvements Fund: Councilman Farmer provided a proposed resolution establishing criteria for the use of the Capital Improvements Fund and a copy of Act 1930 which amended the Capital Improvement Laws. Councilman Farmer explained the amendments to the Capital Improvement Law provided clarification by the inclusion of the word “facilities” and the definition of “facilities” adding the word “vehicles” to its definition. It was explained Jonesboro could reduce the reserves deficit in its Operations and Maintenance budget by approximately 1.7 million dollars by using the Capital Improvement Fund for the purchase of such items as police cars, fire truck, and other equipment. A limit of 25% of the previous year’s ½ cent municipal sales and use tax was recommended for capital improvements of a public nature, to purchase emergency vehicles, as well as vehicles and equipment ½ ton or larger, beginning in 2005 and each year there after. Ms. Hackney recommended consideration for a cost of salary increase for next year in order to keep the Condrey report viable. She stated is should be looked at, not that it must be done, but should be considered. Committee members were asked to review the documents and be prepared to discuss it at the next Finance Committee meeting.
ADJOURNMENT
With no further business, Councilman Dover moved, seconded by Councilman Hargis to adjourn the meeting. All voted aye.