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
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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,
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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
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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.
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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:
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DAILEY
MAYOR
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