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12-28-00u "t? Board of Directors Room City Hall — 500 W. Markham Little Rock, Arkansas December 28, 2000 — 6:OOP.M The Board of Directors of the City of Little Rock, December 28, 2000, special meeting, with Mayor Dailey presiding. City Clerk Nancy Wood called the roll with the following Directors present: Directors: Pugh, Hinton, Lichty, Cazort, Keck, Stewart, Wyrick, Kelly, Adcock and Kumpuris.10 present, The invocation was given by Director Pugh, followed by the Pledge of Allegiance. The meeting was recorded as follows: Director Adcock asked Mr. Carney, City Manager, and Mr. Carpenter City Attorney, if all their questions had been answered regarding the water merger. Mr. Carpenter answered that he would rephrase that to say, there were a number of issues that he has not fully considered and outlined what he thinks the issues are for the Board of Directors. Mr. Carney stated that he had made a number of suggestions related to the merger document through Director Lichty to the merger group and thought the language that had come out of the group has been pretty effective in addressing some of his concerns. He stated that not all his concerns had been addressed in the document relating to the nature of the governing body, the new commission, but a number of issues such as protection of the City's Class 2 Fire Rating and other concerns. He said he and the board received the actual proposed legislation for the first time last Friday. Director Lichty stated he thought it important to try to get approval of the merger document as quickly as possible so the process can begin in getting the state legislation that is going to be required to make it work. This document does that. He said he had heard several board members say they were only made aware of this last Friday, and he said he wanted to draw attention to a memo that was hand delivered to each board member on December 12th. He sated that in that memo it says that "last week, each of you were sent copies the negotiated draft of this merger document," and stated that in fact each member was sent the copies. He sated that substantively, that document is the same as when the draft was distributed. He said there were some minor changes, but substantively it is the same. He said to say that it was received last Friday is unfair and it is untrue. He stated people sitting on this side of the river that this board appointed, and a contingent from the North Little Rock side that was also appointed by the council have negotiated this document. Mr. Bill Bowen has been the leader as the discussion has progressed and has crafted the document to address most of the concerns expressed thus far. He said the only responses received so far have been positive. He told the board if they do not like the document it was their prerogative to vote against it, but said he thinks it important to have the discussion, and whether its settled tonight or not, there is a very tight schedule and when the resolution was passed on October 10th, to set this in motion, it needed to be done by January 1. He said it is now December 28th, and this is the last meeting of this year. He said he was prepared to add this to the agenda tonight, the vote on which is yet to be taken, and he was prepared to proceed with it. Director Kumpuris stated there might be a lack of questions because his thought was he was waiting until he received the final document to go over that to ask questions about. He said he had not received mail in three days, and asked if this was done the following Tuesday, and the legislative Assembly is on Thursday, how badly that messes up the timetable. He said he would vote to put it on the agenda, but found it hard to believe the most monumental thing that the board would vote on in their tenure here is a document that he has never read. He said it's hard for him to vote on something he has never seen at all. Ms. Jane Dickey, Little Rock Water Commission Chairman, said she could not say it would completely destroy the merger of the two systems, but it is a disappointment. She sated the changes that had been made since it was delivered to the members of the board were relatively small changes, and not made an essential difference in the terms of the merger or consolidation agreement. Ms. Dickey stated she would be glad to go thorough the highpoints of the agreement with the board if it so desired. Director Adcock +Ut�U said her problem with putting an item on the agenda that the City manger and City Attorney say they still have questions about that have not been answered. She sated she had been waiting for Mr. Carpenter's memo that was to list the issues he had with the merger. Director Adcock asked if a projection had been done to indicate what the rate increase to the citizens of Little Rock over one, five and ten years. Mayor Dailey announced this was getting in to the topic, and asked if the board was ready to vote on whether to add the item to the agenda. Vice Mayor Wyrick stated that in the past the board had not voted on issues such as this without recommendations from the City Attorney and the City Manager, and did not feel the board has gotten that. As a result of that and hearing the entire time that there are problems with this issue, and that she had not received the document; and that it was out of character to be adding something to the agenda that the board did not have the recommendations on. Director Stewart said it appears a lot hinges on what the City Attorney has to say, and if the vote is to put it on the agenda, she asked Mr. Carpenter if he was prepared to make the board aware of what his concerns are. Mr. Carpenter said he could probably outline most of the concerns and was not sure he could provide the board with the balance of the analysis he thought the board needs in order to make an objective decision. Mr. Carpenter stated he would need more time. Director Lichty made the motion to add the consideration of the Little Rock/North Little Rock Water Merger Agreement to the agenda of the special meeting. Director Keck seconded the motion. A roll call vote was taken, the results were recorded as follows: Directors Pugh, no, Hinton, yes, Lichty, yes, Cazort, yes, Keck, yes, Stewart, no, Wyrick, no, Kumpuris, yes, Kelly, no, Adcock, no, Mayor Dailey, yes. 6 votes yes, 5 votes, no. The item was added to the special meeting agenda. 1. ORDINANCE NO. 18,387 - Authorizing the execution and delivery of a lease agreement between the City of Little Rock, Arkansas Residential Housing and Public Facilities Board, as Lessor, and the City of Little Rock, Arkansas, as lessee; prescribing other matters relating thereto; and declaring an emergency. (Third Reading.) Ms. Riley Duke, a student at Pulaski Heights spoke in favor of the acquisition of parkland in west Little Rock. . Mr. Wes Gross, representing the Riverdale Soccer Club, spoke in favor of the acquisition. Ms. Dee White, 523 Booker Street, spoke in opposition to the parkland acquisition, saying it was being presented as something for the children, and felt the city was being dishonest in presenting it this way, and alleged that the City manager and Parks Director had lied to the citizens of Little Rock. She also stated that she felt the board should have delayed acting on this issue due to the ice storm, and the damaged that has been caused. Mr. Hank Ripper, 523 Booker Street, spoke in opposition to the acquisition, and asked the children not to buy into this, that nobody was against soccer parks, but that existing parks are in decay and this thing was not about the children. He said he did not know what was the real purpose of buying this land but for the small amount of people that are going to be affected by this purchase, if its really about soccer fields, amphitheater, and all of this, there is such a small percentage of the population that is affected by this that basically it comes down to do we let the majority of people suffer for the needs of the few, or do we let the needs of the few outweigh the needs of the many. Mayor Dailey asked Mr. Carney, City Manager, if he would like to respond to the allegations of lying that Ms. White had alleged. Mr. Carney responded that he could not say a lot about the speaker or comments, but he stated he had always been in his almost thirty years of public service, a person on integrity and had never made false representations to the body that he works for, and hoped the board recognizes his integrity on many issues that have been dealt with. He stated this particular matter before the board is just what it is portrayed to be, an unusual opportunity, 617 acres, which will be dedicated for park purposes and park purposes alone, and would not serve a small number, but a large number; thousands of individuals. He said the city's professional group including outside consultants look at this and it was determined it is of great value to the park system, and should be done, that it is a unique opportunity, that a corporate citizen has made available to the city, and recommend it strongly to the board. Mayor Dailey asked Mr. Carney to explain again, exactly how the acquisition of this land would be funded. Mr. Carney said the city has examined a variety of ways to fund this opportunity and the recommended way for the board and the one considered tonight is to a public financing, in effect, a bond issue, to be issued by the Little Rock Housing and Public Facilities Board. He stated it would be an amount of debt to be issued to pay for the cost of the land, and then to be repaid over time. The way the financing would be structured at any time during the financing, which could be twenty to twenty five years, 2 < r. the city could reduce the amount of debt or eliminate the debt if contributions were received or other financing were secured, and reduce that cost. Interest would be paid over time, the amount of interest, would be tax exempt financing and would be at an annual rate at 5% or less, a very favorable financing rate. He said the timing is important; the city must act fairly quickly because in early February the opportunity for the purchase will be gone. He said that Deltic Timber had been generous in offering this price and making it available to the city. He sated if the board were to approve this tonight, staff would go to the Housing and Public Facilities Board, and they would proceed with the financing details and would take a period of about thirty days to do the final financing, put it together. These would be bonds issued by the Faculties Board. There would be no pledge by this city Board of Directors, except though annual lease payments and the bonds would be outstanding bonds that would be insured public debt, investment grade debt, at triple "A" or double "A" type rating, so it would be an ideal financing technique. There was discussion from board members indicating they were in favor of the acquisition, but not necessarily the method of financing. A roll call vote was taken and recorded as follows: Directors Pugh, no, Hinton, yes, Lichty, yes, Cazort, yes, Stewart, no, Wyrick, no, Kumpuris, yes, Kelly, yes, Adcock, no, Mayor Dailey yes. The vote was 7 yes, and 4 no. After the vote, Mayor Dailey announced he would begin to move forward as the board has directed to look for participants in this that might help reduce the financial burden. 2. ORDINANCE NO. 18,408 - To repeal sections of the sign regulations of the Little Rock Zoning Code, which pertain to the exchange of billboard sites; to authorize the use of the proceeds of certain fees collected for the inspection of billboards, to be used for landscaping and other purposes; to declare an emergency; and for other purposes. The Ordinance was read the second time. Mr. Greg Criner, 3000 W. 65`h Street, representing Eller Media Company, and other sign companies in Little Rock. He stated he was employed by Eller Media as a Real Estate Manager, he sated that his company had never been to the Board of Adjustment to ask for any variation on any decision turned down by any permit given to them. He said they have not always agreed but had tried to go along in a spirit of cooperation to find other areas. He said they have taken more billboards down than built, and merely seek to shift locations to commercial demand for advertising that exists in the city today. He said the ordinance drafted previously has performed as intended and will continue to function as satisfactory to Eller and the City. Mr. Crier stated on the issue of the two for one exchange on billboards for scenic corridors, felt it goes back to the original intent of removing boards from areas that are no longer desired. Any deviation from his policy agreed upon by the sign companies as well as the City, will ultimately discourage the removal of these boards, and will diminish effect that it was intended to have. He said what they have seen in their records is that the number of the boards taken down has been larger than the number that have been put up. He said they have shifted to different areas where the advertising and demands are at this particular time. He said as far as the two for one, they feel like basically that doing that will diminish the incentive to remove the boards, which is what the original ordinance was created to do. There was some discussion by the board, and some input by Mr. Jim Lawson, Director of Planning and Development. Director Keck made a motion to suspend the rules and place the ordinance on third and final reading. Director Cazort seconded the motion, a roll call vote was taken as to whether to suspend the rules, and was recorded as follows: Directors Pugh, yes, Hinton, yes, Lichty, yes, Cazort, yes, Keck, yes, Stewart, yes, Wyrick, no, Kumpuris, yes, Kelly, yes, Adcock, no, Mayor Dailey, no. The vote was 8 to 3. The ordinance was read the third and final time. A roll call vote was taken and recorded as follows: Mayor Dailey noted as a matter of record, he would be voting against the ordinance, because the city had not given the industry the opportunity to fully discuss the issue. Director Pugh, no, Hinton, yes, Lichty yes, Cazort, yes, Keck, yes, Stewart, yes, Wyrick no, Kumpuris, yes, Kelly, yes, Adcock, no, Mayor Dailey, no. The vote was 7 yes, 4 no, the ordinance was adopted. The water merger issue was again discussed. Director Lichty called upon Jane Dickey, Chairman of the Little Rock Water Commission, to walk the board through the agreement, addressing any specific questions of the board, and those that the City Manager or City Attorney might have. Ms. Dickey stated this is not anything the merger group is trying to rush the board into. She said she thought it was a good agreement. She 3 said it works; it protects the interests of the citizens of Little Rock, and of the Little Rock City Government and will continue to provide safe palatable drinking water for decades in the future. Ms. Dickey gave a brief history of previous attempts at mergers, and gave an overview of the merger agreement. A concern shared by several board members and city staff members was merging the systems before a study showing how water rates will change after consolidation is completed, Mr. Carpenter, City Attorney stated that the rates issue "raises the most significant legal concern." He believed the city should consider equalizing rates in Little Rock and North Little Rock immediately, instead of over the ten year phase in period. He said that failure to properly address this issue could easily lead to ratepayer action against the city. There was lengthy discussion and questions from the board to Ms. Dickey including questions regarding status of current employees once the systems are merged, the powers and scope and appointment process of the new Commission, the surcharges issues, franchise fees, extending water to other areas, the definition of quality water. Mr. Carney stated he had three areas he wished to address the board regarding the document presented tonight. One concern was the board policy issue; the other two are financial and fiscal in nature. The policy issues are the question the board has to ask about becoming forever linked to the other governing body across the river. This document creates a new commission, a commission that in effect has more powers than the city board has, and the North Little Rock City Council has. Once it's formed, it will never have opportunities to change unless this Board and the North Little Rock Council agree on every issue. This document gives the new commission extraordinary powers. One of the other issues is the 10% surcharge fee. He stated the pilot program now, the pilot payment uses two factors, the evaluation of real estate value of the system in actual dollars and then a 5% surcharge, or payment in lieu of taxes. Te piece of the pilot based on the sales of water, gross revenue, in effect is on all sales of all water whether a North Little Rock customer, a Benton customer, etc. All those sales are used as a basis for the payment to the City of Little Rock. This new document speaks to the franchise fee based on sales in Little Rock only, so all he sales outside the city limits will not be counted on Little Rock's base, it's just sales in the City of Little Rock. He was not convinced the language and the 10% surcharge would be adequate. Mr. Carney's final concern was one that was not in the document but needed more attention before the board makes a final decision. He stated the issue is the rates, the impact on all customers, primarily Little Rock customers. Mr. Carney stated his recommendation would be to look at these issues before approval of the document. Mr. Carpenter said the law forbids a utility operation as such from discriminating between its customers must furnish its service to all alike upon identical terms. Either party to this litigation does not dispute this proposition, and no citation of authority is required to support it. The problem this creates for the Board of Directors is that you had a resolution presented to you in December of 1999 by the water commission based upon the Black and Beach Study which among other things noted they had to come up with separate rates for North Little Rock to "better reflect the use of the water system ", that was put into abeyance for a one year period so this particular issue could be reserved and could probably be extended for an additional time while the consolidation measures are being worked out, but stated the City might as well plan on the lawsuit from some citizen that says, " why am I paying for North Little Rock ?" He said this presents a major issue from a legal standpoint on this ten year phase in, and thought that agreeing to that in this agreement, is going to open the board to litigation anyway. Mayor Dailey asked if the goal of the board, to this point is to move toward consolidation, then how can the points that Mr. Carpenter makes, be addressed to still accomplish the consolidation. Mr. Carpenter said the provision in the agreement that gives up to ten years for the equalization to take place, be removed, and could probably use a year, if that long for the equalization to take place, but you would make the equalization of rates immediate. Director Lichty requested Mr. Carpenters concerns be put in memo from to the board. The ordinance was read the first time. M -1. ORDINANCE - Authorizing the City of Little Rock Arkansas to enter into an interlocal agreement with the City of North Little Rock, Arkansas, providing for the consolidation of the water systems and creating a public body corporate and politic to own and operate a consolidated water system, declaring an emergency and for other purposes. The ordinance was held on first reading, and continue discussion at the January 2, 2001 meeting, and have the second reading. 4 Mayor Dailey recessed the meeting at 10:00 P.M. for a short break. The meeting reconvened at 10:20 P.M. 3. ORDINANCE NO. 18,409 - Providing for and adopting the 2001 Budget for the City of Little Rock for the period beginning January 1, 2001 and ending December 31, 2001; appropriating resources and uses for every expenditure item and fund; declaring an emergency and for other purposes. The ordinance was read the second time; rules were suspended to provide for the third and final reading. The ordinance was read the third and final time. By a unanimous vote of board members present, the ordinance was adopted. A motion was made by Director Cazort to adjourn, Director Kumpuris seconded the motion. By unanimous voice vote of board members present, the meeting was adjourned at 10:35 P.M. ATTEST: N Y W OD CIT CLERK APPROVED: � Yom( DAILEY MAYOR � ob U