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Minutes for the Finance Committee meeting on March 24, 2005.
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Finance & Administration Committee Minutes
Thursday, March 24, 2005
4:00 p.m. - Huntington Building
Members Present: Alec Farmer, Darrel Dover, Jim Hargis, Ann Williams and John Street. Councilman Perrin was unable to attend. Others present were: Mayor Formon, Donna Jackson, City Clerk, Phillip Crego, City Attorney, staff and media.
MINUTES
Councilman Dover moved seconded by Councilman Street for the adoption of the minutes for January 27, 2005 and February 17, 2005 as provided. All voted aye. Copies were made available to all in attendance.
ORDINANCES & RESOLUTIONS
Appropriation for MATA Funds: Councilman Dover moved, seconded by Councilman Street to place a proposed ordinance appropriating $2 million from the Capital Improvement Fund for the West Nettleton, Matthew Avenue II, and Fox Meadow MATA Projects on the April 5, 2005 agenda. Discussion followed regarding closing out of the MATA fund and setting up a line item in the Capital Improvements budget for the Fox Meadow Project, and not budgeting for the MATA fund in 2006. Councilman Dover moved, seconded by Councilman Street to amend the ordinance to make the necessary changes to close out the MATA fund. All voted aye.
CDBG Amendments (2001, 2003, 2004, 2005): Councilman Street moved, seconded by Councilman Dover to recommend a resolution to the full council for amendments to the CDBG Budget in order to close out the 2001, 2003, 2004, and 2005 CDBG Projects. All voted aye. Mr. Copeland reported they had conducted a public hearing on March 7, 2005 but a quorum was not present, therefore they were bringing it straight to the Finance Committee. The amendments would close out completed projects and transfer unallocated funds. Questions were asked regarding the lighting at Miles Park. Mr. Wilkie reported the $5,000.00 allocated would complete Phase I of the lighting project (on one side of the poles). Councilman Dover suggested it might be more economical to do all of the lighting at the same time, but was informed by Mr. Wilkie, it had not been budgeted for. Mr. Wilkie estimated the cost of Phase I to be $44,000 and the cost for Phase II to be ½ of Phase I for a total of $66,000.00 for the lighting of Miles Park.
Creating Department of Community/Economic Development: Councilman Dover moved, seconded by Councilman Hargis to recommend a proposed ordinance to the full council streamlining the Grant Coordinator position, and creating the Department of Community/Economic Development. It was explained that Muhammad Ulkarmin, the MPO Director, had been promised a $5,000 salary increase by the previous administration, and that amount had been included with the restructuring of the department. All voted aye.
FINANCE & AUDIT
FYI - General Ledger Accounts: Mr. Flowers provided information regarding two general ledger accounts. One for $16,000 for bridge panels at Joe Mac Campbell Park and the other for $165,000 to Don Latourette for an obligation regarding a subdivision called South Caraway Village.
Non-Uniform Pension Plan: Mr. Flowers reported RFPs had been sent out for the non-uniform pension plan, but no responses had been received yet. He explained he had requested Ms. Rae Willis, of Principal Financial Group to address the committee regarding investment performance and death benefits. Ms. Willis explained the “Retirement Plan Document” is a contract (or promise) by the City to the city employee, and stipulates the promise being made. She further explained the contract between Principal and the City of Jonesboro deals with the administration of the benefit (or promise) to the employee. Ms. Willis stated there were three options for paying retirees: Benefit Index; Direct Payment, or an Annuity Purchase. She explained Jonesboro had opted for the Benefit Index which is a combination of the Direct Payment and the Annuity Purchase. She explained under the Benefit Index the City makes contributions to the pension plan, and controls how the money is invested, and at the time an employee retires, Principal pays the benefits from the assets in the retirement plan. However, she further explained if the total asset level reaches the benefit index (a triggered amount) it prompts Principal Financial to purchase an annuity in order for the promised benefits to be paid to the existing retirees. Councilman Dover questioned if the City of Jonesboro wanted to switch from Principal Financial why would they (Principal) hold money out if they had already purchased the annuity. Ms Willis responded saying Principal has not actually purchased the annuity, but has made the promise to Jonesboro retirees, by providing a certificate of guarantee that their retirement benefits will be paid by Principal Financial. Councilman Hargis objected to the Benefit Index, stating it guaranteed that Principal would have control of the funds for the City’s retirement. Ms. Willis stated this was an option which the City of Jonesboro selected. Questions were raised regarding the selection of the benefit option. It was determined that the 2002 Finance Committee and former mayor Hubert Brodell, owner of Town and Country Insurance, made the selection. Representatives of Town and Country Insurance explained they acted as a broker for the Principal Financial Group. Ms. Willis explained it was possible to switch the option for paying retirees and even switch from using Principal Financial, but not without purchasing an annuity for the existing retirees.
Death Benefits: Ms. Hackney stated if an active employee dies their beneficiary gets nothing, and requested this be corrected. Ms. Willis explained the plan can be amended as of a particular date and do not have to include inactive employees. Councilman Dover questioned the cost, and was told by Mr. Willis there is a $300.00 charge to draft the plan amendment.
Ratio Investments: Ms. Willis stated the 2004 Returns showed a gain of 15.81% with roughly 77% of the assets invested in stocks, 16% in real-estate and 7% in bonds. Mayor Formon, Councilman Dover, and Councilman Perrin were asked to provide in writing to Principal Financial a more conservative investment plan, and to have a resolution prepared so it may be presented to the full City Council by April 5, 2005.
RFP - Lease Purchase - Fire Truck: Mr. Flowers explained this had been placed on hold by Councilman Perrin until the bid specifications were complete. Interim Fire Chief Keller stated the bid specifications were complete, but they were waiting on information regarding how it was to be financed. Chief Keller was instructed to run the bids and bring it back to the Finance Committee to determine the option to go with financing.
Franchise Fees: Mr. Flowers reported the City Attorney was working on a letter to submit to businesses within the State of Arkansas asking them to determine their estimated annual revenues. It was explained that the Mayor’s Office was recommending an incremental increase, and suggestions were made beginning at 2% with a ¼ % increase per year, maxing out at approximately 3.25 %. The maximum cap is 4.25%, but it was determined that leeway needed to be given for emergencies. It was recommended that a six to twelve month notice be provided prior to the fee being increased. The Jonesboro City Council passed Ordinance No. 3504 and Ordinance No. 3505 on December 20, 2004 providing notification to Arkla and SBC of cancellation and intent to renegotiate their franchise contracts. City Attorney Crego was asked to help identify the businesses and prepare a sample contract having it in the hands of the businesses by July 1st, 2005. He was asked to have a rough draft of the contract by the next committee meeting.
Reimbursement to the General Fund: Councilman Hargis moved, seconded by Councilman Street to recommend to the full council an ordinance to appropriate $134,000 from the unappropriated fund balance of the Capital Improvement Fund to reimburse the General Fund for Craighead Technology Park land acquisition. Councilman Hargis questioned the amount being appropriated. It was explained that there is some payment that goes for Industrial Development that is not part of Capital Improvement, and the remainder would be for administrative costs for NAIDC. All voted aye.
APERMA & Arkansas Municipal League property insurance: The committee requested that Purchasing Agent, Steve Kent start attending the Finance Committee meetings since he is responsible for purchasing and property insurance. Councilman Dover made the recommendation that Purchasing Agent, Steve Kent, with the assistance of the Finance Director and Mayor Formon, provide a detailed cost analysis based on the 2004 proposals of APERMA & the Arkansas Municipal League property insurance to be given at the May Finance Committee meeting. It was explained they wanted an apples to apples comparison on what has already been insured by APERMA, asking the Arkansas Municipal League to do the same, so the figures could be confirmed and the committee can make an informed recommendation.
OTHER BUSINESS
Forum - Request for funding of a lighting console - Sheri Beatty: Ms. Beatty stated $35,000 had been allocated in the 2005 budget for the Forum and wanted approval to purchase a lighting console estimated at $4,000.00 to which she provided three bids for the equipment. Mayor Formon explained they had questioned if the $35,000, which had been allocated for Building and Maintenance would include the purchase of the equipment. Councilman Farmer stated this was a piece of equipment for a Capital Asset, and read the definition of a Capital Improvement of a public nature, explaining that one of the items authorized for Capital Improvements of a Public Nature is auditoriums and further explained equipment is included as it relates to auditoriums. Questions were raised as to a Miscellaneous Capital Improvement Fund, compared to individual building improvement funds. Mr. Flowers stated the Purchasing Agent would have to take bids on the lighting console, and it would fall under the definition of Capital Improvement. It was explained that the proper procedure for making requests of this nature for the Forum and the Airport Commission is to bring it to the Mayor’s Office, so he may bring it to the committee, making the process more efficient. Ms Beatty was asked to get with Mayor Formon and City Attorney Crego in order to provide a proposed Forum agreement since the old agreement has expired.
Sick Leave Policy and Catastrophic Sick Bank: Councilman Dover moved, seconded by Councilman Street to accept the joint recommendation of Mayor Formon, Human Resource Director, Suzanne Hackney and staff for a proposed sick leave policy, with a proposed resolution to be presented to the full council at the April 5, 2005 City Council meeting. The motion did not include references to the donation of hours for the Catastrophic Sick Bank. All voted aye. The proposed policy allows for the following accumulation of hours: Earned Sick Leave Police: 720 hrs; Earned Sick Leave Fire: 1008 hrs; and Earned Sick Leave Non Uniform: 720 hrs, with the following payout: 480 hrs. Police at Retirement or Death; 672 hrs. Fire at Retirement or Death; 360 hrs. for Non-Uniform after 10 yrs; and 480 hrs. for Non-Uniform after 15 yrs. Ms. Hackney explained the difference in the hours for the Fire Department compared to the Police Department was due to the fact that Police are on 8 hour shifts, while the Fire Department is on a 24 hour shift with weekly hours totaling 56. With regard to the Catastrophic Sick Bank, it was noted most cities do not have a sick bank or at least place restrictions on it. Due to questions of abuse and hours being donated within or outside each department, and questions of fairness for each employee, the decision was made to research the matter further.
HUMAN RESOURCES
Defined Benefit Plan: Questions were raised regarding what percentage should be paid to the beneficiary of an employee who was vested in the retirement plan and should the amount be paid in one lump sum or in monthly installments. It was suggested that the option of a lump sum could be offered under X number of years. Mayor Formon, Mr. Flowers, and Ms. Hackney were asked to visit with Principal Financial and make recommendations to the committee at their next meeting.
Pre-Paid Legal Insurance: Ms. Hackney reported she had contacted an individual who had used the plan, but there were too many exceptions to the coverage, and recommended not going with the plan.
Newsletter: Ms. Hackney reported the newsletter was now on the City’s webpage, and thanked Mr. Ed Akins from the Information Technologies Department for helping get it set up.
Extended Medical Leave: Councilman Dover moved, seconded by Councilwoman Williams approving an extended 30 day medical leave with the method of repayment to be determined, for an employee who could not sign the papers. Ms. Hackney explained his wife signed on behalf of the employee with regard to repayment, but Ms. Hackney further explained she had a note prior to the employee getting so ill, where he requested the leave. City Attorney Crego stated the City could not hold the spouse liable for repayment unless she obligated herself in writing. Councilman Farmer requested the spouse not be obligated for repayment.
Councilman Street questioned what was being done to collect funds from a former female officer who no longer works for the City of Jonesboro. Ms. Hackney stated she has not sent a letter asking for repayment.
INFORMATION SYSTEMS
Financial Software Update: Mr. Alan Young provided several expected dates for software training with Springbrook. City Clerk Donna Jackson questioned if the City Clerk’s Office needed to be involved with any of the training sessions. Mr. Young responded saying when they review purchasing and payroll all departments would be included and notified.
Information Systems Policy: Mr. Young reported the Records Management Advisory Committee has not provided a recommendation of his proposed Information Systems policy and had problems with items 4 and 6 of the policy. Questions were raised regarding providing road access to ambulance companies, which was promised when implementing the AVL system. Mr. Young stated item six of his proposed plan affected the ambulance companies. Councilman Dover moved, seconded by Councilman Street to authorize Mayor Formon to implement those items which are considered policy, and come back with those items needing city council approval at a later date. All voted aye.
GRANTS
Mr. Paul Copeland provided a brochure on the Assistance Program explaining HUD was pressing for more homeowner assistance programs. Mr. Copeland provided a proposed resolution for amendment number 8 to the 2001, 2003, 2004 and 2005 CDBG programs. The resolution closed out various projects and transferred the funds ($65,645.34) to the following three projects: 2004 Continuum of Care-Public Services (outside grants; Miles Park Improvement to complete the lighting; and 2004 Category Homeowner Assistance Program. He also informed committee members that the 2003 Fire Grant had been amended to move $40,000 for improvements to the interior structure of Fire Station #2 located at 314 W. Washington Street. Mr. Copeland provided a letter from the Arkansas State Highway and Transportation Department explaining allocations for the Transit funding.
Councilman Farmer explained wording had been deleted from previous resolutions authorizing 2002 traffic control signals, and as a result the resolutions would have to be redone and would place Jonesboro on the bottom of the list for consideration. It was requested that the resolutions be placed on the next council agenda.
MAYOR’S OFFICE
Transfer of Jail Fees: Mayor Formon announced there would be a celebration for Fire Fighters at 5:30 p.m. on March 31, 2005. He also requested committee members to view the work being done on the Huntington Building in preparation for relocating various city departments. Lastly, Mayor Formon requested a transfer of funds from the jail fees for part-time help. He explained newly elected Judge Keith Blackman was not giving jail time and as a result there were no inmates to do various jobs within the city. He stated jail fees for December 2004 totaled $80,000 while the January fees were only $36,000. Councilman Dover moved, seconded by Councilman Street to transfer the fees as recommended by Mayor Formon. All voted aye.
Name change for Haworth Room: Mayor Formon was asked to remove the Haworth sign and replace it with a sign naming the room the “City Council Conference Room”.
Justice Complex: It was explained several years ago the City Council had requested a structural engineering report for the Justice Complex, but a written report was never issued. Mayor Formon was asked to have a structural engineer to look at the Justice Complex, to which he responded Brian Wadley had already contacted someone out of Little Rock who would be reporting back to the Public Works Committee.
CITY CLERK’S OFFICE
Councilman Dover moved, seconded by Councilman Street to recommend to the full council an ordinance to waive competitive bidding for Court-Scribe digital recording equipment for the Office of City Clerk. All voted aye.
ADJOURNMENT
With no further business, Councilman Dover moved, seconded by Councilman Hargis to adjourn the meeting. All voted aye.