The URL can be used to link to this page

Home My WebLink About2009-02-17 - Agendas - Final Aldermen Ward 1 Position 1—Adella Gray Mayor Lioneld Jordanftft%A Ward 1 Position 2—Brenda Thiel Ward 2 Position 1 —Kyle B.Cook City Attorney Kit Williams Ward 2 Position 2—Matthew Petty PV1 C Ward 3 Position l—Robert K.Rhoads City Clerk Sondra Smith TayeliWard 3 Position 2—Robert Ferrell ARKANSAS Ward 4 Position 1 —Shirley Lucas Ward 4 Position 2—Sarah E.Lewis Final Agenda City of Fayetteville Arkansas City Council Meeting February 17, 2009 A meeting of the Fayetteville City Council will be held on February 17, 2009 at 6:00 PM in Room 219 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. Call to Order Roll Call Pledge of Allegiance Mayor's Announcements, Proclamations and Recognitions: Presentations, Reports and Discussion Items: 1. Quarterly Report of Financial Condition of the City—City Clerk Agenda Additions: A. Consent: 1. Approval of the February 3, 2009 City Council meeting minutes. APPROVED. 2. Bid # 08-16 Kinco Constructors, LLC: A resolution approving Change Order # 10 under Bid # 08-16 with Kinco Constructors, LLC in the amount of$123,051.00 for the construction of Wilson Park Bridge and Trail Connection; and approving a 10% project contingency in the amount of$12,305.00. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 36-09. 113 West Mountain 72701 (479)521-7700 (479)575-8257(Fax) accessfayetteville.org 3. Fire Department Donations: A resolution approving a budget adjustment for the Fayetteville Fire Department in the amount of $950.00 to recognize donation revenues from local businesses to fund fire employee service awards. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 37-09. 4. McGoodwin, Williams & Yates, Inc. Amendment No. 1: A resolution approving Amendment No. I to the contract with McGoodwin, Williams & Yates, Inc. in the amount of$63,800.00 to update the Water Transmission and Distribution System Model and Master Plan; approving a contingency in the amount of$5,347.00; and approving a budget adjustment in the amount of$50,000.00. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 38-09. 5. McGoodwin, Williams & Yates, Inc. Amendment No. 3: A resolution approving Amendment No. 3 to the contract with McGoodwin, Williams & Yates, Inc. reducing the contract amount by $947,298.00 for design and construction phase services of the West Side Wastewater Treatment Plant, Broyles Road and the Mitigation Wetlands of the Wastewater System Improvement Project (WSIP). PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 39-09. 6. RJN Group Amendment No. 5: A resolution approving Amendment No. 5 to the engineering contract with RJN Group in the amount of$597,704.00 for WSIP West Side Collection System design and construction phase services. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 40-09. 7. Amend City Council Rules of Order and Procedure: A resolution to amend the City Council Rules of Order and Procedure to add a new section concerning orientation of new alderman. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 41-09. B. Unfinished Business: 1. Villas at Stonebridge Appeal: An ordinance establishing a Residential Planned Zoning District Titled R-PZD 06-2170, Villas at Stonebridge, located south of Highway 16 East and east of Goff Farm Road; containing approximately 53.03 acres; amending the official zoning map of the City of Fayetteville; and adopting the associated master development plan. (This ordinance was left on the First Reading at the December 2, 2008 City Council meeting. This ordinance was left on the Second Reading at the December 16, 2008 City Council meeting. This ordinance was left on the Second Reading at the January 6, 2009 City Council meeting and then tabled to the February 3, 2009 City Council Meeting.) This ordinance was left on the Second Reading at the February 3, 2009 City Council meeting and then tabled to the February 17,2009 City Council Meeting. PASSED AND SHALL BE RECORDED AS ORDINANCE NO. 5220. 113 West Mountain 72701 (479)521-7700 (479)575-8257(Fax) accessfayetteville.org C. New Business: 1. CUP 08-3158 Wilkins Appeal: A resolution to affirm the Planning Commission's granting of Conditional Use Permit (CUP 08-3158). PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 42-09. 2. Bid # 09-12 LaRue Contractor, Inc.: A resolution awarding Bid # 09-12 and approving a contract with LaRue Contractor, Inc. in the amount of $947,628.99 for construction of Mount Sequoyah water and sewer improvements; and approving a project contingency in the amount of$50,000.00. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 43-09. 3. Pending State Legislation: A resolution to express the City Council's opposition to any proposed state law that would constitute an unfunded mandate upon city taxpayers or would remove discretionary power of the City Council to control its budgetary expenses. PASSED AND SHALL BE RECORDED AS RESOLUTION NO. 44-09. Announcements: 1. City Council Tour: None Adjournment: Meeting adjourned at 8:50 p.m. NOTICE TO MEMBERS OF THE AUDIENCE All interested parties may appear and be heard before the City Council. If you wish to address the City Council on an agenda item please queue behind the podium when the Chair asks for public comment. Once the chair recognizes you, go to the podium and give your name and address. Address your comments to the Chair, who is the presiding officer. The Chair will direct your comments to the appropriate elected official, staff member or others for response. Please keep your comments brief, to the point and relevant to the agenda item being considered so that everyone has a chance to speak. Interpreters or TDD for hearing impaired are available for all City Council meetings, a 72 hour advance notice is required For further information or to request an interpreter,please call 575-8330. As a courtesy please turn off all cellphones and pagers. A copy of the City Council agenda is available at accessfayetteville.org or in the office of the City Clerk, 113 West Mountain, Fayetteville,Arkansas. 113 West Mountain 72701 (479)521-7700 (479)575-8257(Fax) accessfayetteville.org City Council Meeting: Feb._ary 17,2009 I� Subject: Motion To: Motion By: Seconded: Lewis Gray Thiel Cook ✓ Petty AMR- Rhoads (/ Ferrell Lucas I// Mayor Jordan t/ Subject: Motion To: Motion By: Seconded: Lewis Gray Thiel Cook Petty Rhoads Ferrell Lucas Mayor Jordan City Council Meeting: Feb.—ary 17, 2009 Subject: Consent Motion To: Aomvve Motion By: Seconded: 0 Lewis Gray ✓ Thiel ✓' Cook Petty 1� —�_ Rhoads POA —J Ferrell J& o47 Lucas �~ Mayor Jordan Subject: Motion To: Motion By: Seconded: Lewis Gray Thiel Cook Petty Rhoads Ferrell Lucas Mayor Jordan City Council Meeting: Feb,-ary 17, 2009 Subject: Villas at Stonebridge Appeal Motion To: n /i 7 Motion By: I�aeV AA-,O,) Seconded: �LlfSC(,5 B. 1 Lewis All Unfinished Gray Business Thiel ✓ Cook ✓ N Petty l/ N Rhoads ✓ r/ Pf Ferrell GG�fC d Lucas Mayor Jordan 8-® 6- 7,3 Subject: Motion To: Motion By: Seconded: Lewis Gray Thiel Cook Petty Rhoads Ferrell Lucas Mayor Jordan City Council Meeting: Feb.-ary 17,2009 Subject: CUP 08-3158 Wilkins Appeal Motion To: Motion By: Seconded: C. 1 Lewis New Gray Business Thiel Cook Petty pa a� Rhoads Ferrell �^X yyyy11 Lucas Al rdl�t Mayor Jordan Subject: Bid# 09-12 LaRue Contractor, Inc. Motion To: Motion By: Ov0 Seconded: J7 C. 2 Lewis New Gray Business Thiel Cook ./ Petty t/ PA'-Uj Rhoads Ferrell Lucas L 09 Mayor Jordan City Council Meeting: Feb._ary 17,2009 Subject: Pending State Legislation Motion To: Motion By: h Seconded: C.3 Lewis New Gray Business Thiel Cook Petty Rhoads Ferrell !L /1 Lucas 4/ ✓ w0 Mayor Jordan Subject: Motion To: Motion By: Seconded: C. 4 Lewis New Gray Business Thiel Cook Petty Rhoads Ferrell Lucas Mayor Jordan Aldermen Ward 1 Position 1—Adella Gray Mayor Lioneld Jordanftft%A Ward 1 Position 2—Brenda Thiel Ward 2 Position 1 —Kyle B.Cook City Attorney Kit Williams Ward 2 Position 2—Matthew Petty PV1 C Ward 3 Position l—Robert K.Rhoads City Clerk Sondra Smith TayeliWard 3 Position 2—Robert Ferrell ARKANSAS Ward 4 Position 1 —Shirley Lucas Ward 4 Position 2—Sarah E.Lewis Final Agenda City of Fayetteville Arkansas City Council Meeting February 17, 2009 A meeting of the Fayetteville City Council will be held on February 17, 2009 at 6:00 PM in Room 219 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. Call to Order Roll Call Pledge of Allegiance Mayor's Announcements, Proclamations and Recognitions: Presentations, Reports and Discussion Items: 1. Quarterly Report of Financial Condition of the City—City Clerk Agenda Additions: A. Consent: 1. Approval of the February 3, 2009 City Council meeting minutes. 2. Bid # 08-16 Kinco Constructors, LLC: A resolution approving Change Order # 10 under Bid # 08-16 with Kinco Constructors, LLC in the amount of$123,051.00 for the construction of Wilson Park Bridge and Trail Connection; and approving a 10% project contingency in the amount of$12,305.00. 113 West Mountain 72701 (479)521-7700 (479)575-8257(Fax) accessfayetteville.org 3. Fire Department Donations: A resolution approving a budget adjustment for the Fayetteville Fire Department in the amount of $950.00 to recognize donation revenues from local businesses to fund fire employee service awards. 4. McGoodwin, Williams & Yates, Inc. Amendment No. 1: A resolution approving Amendment No. 1 to the contract with McGoodwin, Williams & Yates, Inc. in the amount of$63,800.00 to update the Water Transmission and Distribution System Model and Master Plan; approving a contingency in the amount of$5,347.00; and approving a budget adjustment in the amount of$50,000.00. 5. McGoodwin, Williams & Yates, Inc. Amendment No. 3: A resolution approving Amendment No. 3 to the contract with McGoodwin, Williams & Yates, Inc. reducing the contract amount by $947,298.00 for design and construction phase services of the West Side Wastewater Treatment Plant, Broyles Road and the Mitigation Wetlands of the Wastewater System Improvement Project(WSIP). 6. RJN Group Amendment No. 5: A resolution approving Amendment No. 5 to the engineering contract with RJN Group in the amount of$597,704.00 for WSIP West Side Collection System design and construction phase services. 7. Amend City Council Rules of Order and Procedure: A resolution to amend the City Council Rules of Order and Procedure to add a new section concerning orientation of new alderman. B. Unfinished Business: 1. Villas at Stonebridge Appeal: An ordinance establishing a Residential Planned Zoning District Titled R-PZD 06-2170, Villas at Stonebridge, located south of Highway 16 East and east of Goff Farm Road; containing approximately 53.03 acres; amending the official zoning map of the City of Fayetteville; and adopting the associated master development plan. (This ordinance was left on the First Reading at the December 2, 2008 City Council meeting. This ordinance was left on the Second Reading at the December 16, 2008 City Council meeting. This ordinance was left on the Second Reading at the January 6, 2009 City Council meeting and then tabled to the February 3, 2009 City Council Meeting.) This ordinance was left on the Second Reading at the February 3, 2009 City Council meeting and then tabled to the February 17, 2009 City Council Meeting. C. New Business: 1. CUP 08-3158 Wilkins Appeal: An appeal of Conditional Use Permit 08-3158 (Wilkins) which was granted at the January 12, 2009 Planning Commission meeting. 2. Bid # 09-12 LaRue Contractor, Inc.: A resolution awarding Bid # 09-12 and approving a contract with LaRue Contractor, Inc. in the amount of $947,628.99 for construction of Mount Sequoyah water and sewer improvements; and approving a project contingency in the amount of$50,000.00. 113 West Mountain 72701 (479)521-7700 (479)575-8257(Fax) accessfayetteville.org 3. Pending State Legislation: A resolution to express the City Council's opposition to any proposed state law that would constitute an unfunded mandate upon city taxpayers or would remove discretionary power of the City Council to control its budgetary expenses. Announcements: 1. City Council Tour: None Adjournment: 113 West Mountain 72701 (479)521-7700 (479)575-8257(Fax) accessfayetteville.org A.3 Fire Department Donations Page 1 of 2 RESOLUTION NO. A RESOLUTION APPROVING A BUDGET ADJUSTMENT FOR THE FAYETTEVILLE FIRE DEPARTMENT IN THE AMOUNT OF $950.00 TO RECOGNIZE DONATION REVENUES FROM LOCAL BUSINESSES TO FUND FIRE EMPLOYEE SERVICE AWARDS. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS: Section 1: That the City Council of the City of Fayetteville, Arkansas hereby approves a budget adjustment for the Fayetteville Fire Department in the amount of $950.00 to recognize donation revenues from local businesses to fund Fire Employee Service Awards. PASSED and APPROVED this 17f day of February, 2009. APPROVED: ATTEST: By: By: LIONELD JORDAN,Mayor SONDRA E.SMITH,City Clerk/Treasurer --------------- A.3 Fire Department Donations Page 2 of 2 A.4 McGoodwin,Williams&Yates,Inc. Amendment No. I Page I of 2 RESOLUTION NO. A RESOLUTION APPROVING AMENDMENT NO. 1 TO THE CONTRACT WITH McGOODWIN, WILLIAMS & YATES, INC. IN THE AMOUNT OF $63,800.00 TO UPDATE THE WATER TRANSMISSION AND DISTRIBUTION SYSTEM MODEL AND MASTER PLAN; APPROVING A CONTINGENCY IN THE AMOUNT OF $5,347.00; AND APPROVING A BUDGET ADJUSTMENT IN THE AMOUNT OF $50,000.00. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,ARKANSAS: Section 1. That the City Council of the City of Fayetteville, Arkansas, hereby approves Amendment No. 1 to the contract with McGoodwin, Williams & Yates, Inc. in the amount of $63,800.00 to update the Water Transmission and Distribution System Model and Master Plan. A copy of the Amendment, marked Exhibit"A," is attached hereto and made a part hereof. Section 2. That the City Council of the City of Fayetteville, Arkansas, hereby approves a contingency in the amount of$5,347.00. Section 2. That the City Council of the City of Fayetteville, Arkansas, hereby approves a budget adjustment in the amount of$50,000.00. PASSED and APPROVED this 17th day of February, 2009. APPROVED: ATTEST: By: By. LIONELD JORDAN,Mayor SONDRA E.SMITH,City Clerk/Treasurer City of Fayetteville,Arkansas A.4 Budget Adjustment Form McGoodwin,Williams&Yates,Inc. Budget Year Department: Operations Date RequestedPaR%%96ent Number 2009 Division: Water&Sewer MaintenanceI T Program: Capital Water Mains 2/4/2009 Project or Item Added/Increased: Project or Item Deleted/Reduced: Water System Master Plan Study. Water/Sewer Operations Study. Justification of this Increase: Justification of this Decrease: The Water Master Plan and system model needs to be The Water/Sewer Operations Study is no longer required completed. Investigations were done and the plan was to meet bond requirements, and the same information is initially developed and published in draft in 2004. This evaluated and presented in the City's periodic rate studies. work will bring it up to date for 2009 both with respect to The last rate study was published earlier in 2008. current field conditions and future plans. Increase Expense Budget(Decrease Revenue Budget) Account Name Account Number Amount Project Number Professional services 5400 1840 5314 00 50,000 02128 Decrease Expense Budget(Increase Revenue Budget) Account Name Account Number Amount Project Number Professional services 5400 1840 5314 00 50,000 02064 1 Approval Signatures Budget Office Use Only 6 Type: A B C �D� E Request By Jl � _ Date •'.—� JHnIntern r Posted to General Ledger Initial Date ��el�aq ct r Date Posted to Project Accounting Initial Date ices Director Da et Entered in Category Log 9 (� /� Initial Date r / j V ayor ate C.3 City of Fayetteville Staff Review Form Pending state Legislation Page 1 of 20 City Council Agenda Items and Contracts, Leases or Agreements 2/17/2009 City Council Meeting Date Agenda Items Only Paul Becker, Finance Director Finance Submitted By Division Department Action Required: Approval of a City Council Resolution of Intent Regarding Pending Legislation. $ t4 A $ Cost of this request Category!Project Budget Program Category/Project Name Account Number Funds Used to Date Program/Project Category Name Project Number Remaining Balance Fund Name Budgeted Item Budget Adjustment Attached 1 GJ. a, Previous Ordinance or Resolution# Department Director Date Original Contract Date: Original Contract Number: City Attorney Date Finance and Internal Services Director Date Received in City Clerk's Office 9 I9 S f of If ate 1 ED AReceived in Mayor's Office M or ate Comments: Revised January 15,2009 C.3 Pending State Legislation Page 2 of 20 avee;lile ARKANSAS DEPARTMENTAL CORRESPONDENCE TO: Mayor Lioneld Jordan, Don Marr, Chief of Staff and City Council Members FROM: Paul A. Becker, Finance Director P66 DATE: February 3, 2009 SUBJECT: Pending State Legislation There have been numerous bills introduced in the state legislature that relate to Policemen's and Firemen's Pension and Relief Funds (the City's old pension plans). Many of these bills have no specific detail included as of yet. The city should oppose any pension bill with no specific details attached. The city should also oppose any bill which would require a municipality to consolidate local pension systems with the State LOPFI pension plan. Currently the municipality has the authority to send a local plan to LOPFI for consolidation. This should be a decision left to the discretion of the local Pension Board and City Council Finally, I recommend that in view of the current economic situation,the City oppose any legislation which would require additional local funding,because that in essence results in an unfunded mandate to cities already under financial stress. C.3 FAYETTEVILLE P nding State Legislation 20 THE CITY OF FAYETTEVILLE,ARKANSAS KIT WILLIAMS,CITY ATTORNEY DAVID WIIITAKER,ASST.CITY ATTORNEY DEPARTMENTAL CORRESPONDENCE LEGAL DEPARTMENT TO: Lioneld Jordan, Mayor City Council Don Marr, Chief of Staff Paul Becker, Finance Director Missy Leflar, Human Resources Division Manager Marsha Hertweck, Accounting Director FROM: Kit Williams, City Attorney DATE: February 6, 2009 RE: "Shell" bills for pension law changes (SB 146, SB 222) SB 234—extending health insurance for retired city officials, police and fire HB 1199 —COLA for Fire and Police Pension The Arkansas Legislature always tries to help our police and fire pensioners which is laudable except where such help will adversely affect our taxpayers and the power of our City Council to determine budgetary issues. Two "shell" bills (title and subtitle only — no actual wording for what the bill will actually say) have been filed that could severely impact Fayetteville's finances, direct money from working employees to pay retired employees, require tax increases, and remove the City Council's power to control this multimillion dollar budget issues. Senate Bill 146 (attached) looks like it may try to do what House Bill 1099 proposed to do in 2007: require merger or consolidation of the old closed fire and police pension funds with LOPFI. Current law (A.C.A. §24-11-406 and §24-11- 804) gives the city councils the right to determine whether or not to consolidate these old plans. This is important for plans such as those administered by our local pensioners for themselves. The pension boards have so increased their own benefits (payable immediately upon retirement regardless of age and now at 100% of their ending salary) that the pensions have so depleted their funds that they are not actuarially sound (with a $20 million deficit anticipated). Present law does not make a city responsible for these pensioner run funds. If their fund gets depleted, the pensioners will statutorily have their benefits cut to only what the state tumback and continuing millage will pay. C.3 Pending State Legislation Page 4 of 20 However, if consolidated or merged with LOPFI, this $20 million deficit becomes the City of Fayetteville taxpayers' responsibility. Fayetteville taxpayers "shall remit such actuarially computed amounts as are necessary to pay full benefits to current and future recipients." A.C.A §24-11-804(b)(3)(E). This multimillion dollar city taxpayers' commitment should not be mandated by the State Legislature, but left to the judgment of the Fayetteville City Council, House Bill 1099 of 2007 was withdrawn after we brought this problem to the attention of its sponsor, Representative Eric Harris. (See Attached memo of 2-2- 07) Hopefully Senator Jeffress will ensure his SB 146 will also not require such merger or consolidation without City Council approval. Senate. Bill 222 by Senator Laverty (attached) may not be adverse at all to our citizens. However, as a shell bill, we should be wary of any amendment "regarding funding local retirement liabilities for local police and fire personnel." My primary concern remains that we should not be forced to merge or consolidate our old plans with LOPFI nor to add further taxpayer support for these closed plans which remain supported by millage. Shell bills dealing with "retirement liabilities"just make me nervous. Senate Bill 234 by Senator Elliott makes some confusing changes to A.C.A. §24-12-129 to provide health insurance coverage to retired city officials (mayors, etc.) and retired police and fire uniformed officers. Currently, such retirees who reach 55 years of age and pay for the city's portion and employee's portion of the health insurance premium can keep our city's group health insurance. (A.C.A. §24-12-129) This law currently has a small adverse affect (because of the age of participants) on our premiums, but provides a good benefit for retired city officials, police and fire (but no civilian employees). Unfortunately Bill 234 could be "very expensive" as explained by Missy Leflar's e-mail, Accounting Director Marsha Hertweck's memo of February 2, 2009 and Paul Becker's memo of February 4, 2009 (all attached). This bill changes the law to state that these retirees "may continue to participate in the municipality's health care plan, receiving the same medical benefits and paying the same premium as active employees." Struck from the current law was the ending clause that makes a giant financial impact on taxpayer revenues: "as long as the retired official or employee pays both employer and employee contributions to the health care plan." Striking 2 C.3 Pending State Legislation Page 5 of 20 those words could mean that those retirees would only pay "the same premium as active employees," and not need to pay the City's portion of the premium. This would be an immediate annual cost to our taxpayers of$43,899.00 for current retirees. However, this major subsidy of retiree health insurance premium would certainly substantially increase the number of retired police and fire seeking this benefit so the annual cost would likely escalate dramatically in the future. I do not think Senator Elliott actually intends to force municipalities to pay this unfunded mandate. Subsection (b) says cities "may choose to pay any portion of the employer and employee contributions ...." Unfortunately, the striking of the earlier clause requiring an employee to pay "both employer and employee contributions" makes it likely that a Court would interpret the language "paying the same premium as active employees" to mean retirees could never be forced to pay the City's portion of the health insurance premium as required by current law. If SB 234 did not delete that last clause and still added subsection (b) as Senator Elliott proposes, a city council could voluntarily choose to pay some or all of all city officials', police officers' and firefighters' health insurance premium. That would not be an unfunded mandate (like it probably is as currently proposed). House Bill 1199 by Representative Hoyt apparently seeks to push 3% COLAs on the old police pension boards as if the pension boards cannot think about doing it themselves. (Both of our old pension boards have granted themselves 3% Five-year COLAs). What this bill will do is to require an actuarial study done every year for every closed police pension plan in Arkansas (even if the plans, like ours, are clearly not "actuarially sound"). Every year, our plan would have to pay for a needless actuarial study to conform that a 3% COLA would still not be "actuarially appropriate." Of course this bill would be worse if it did not require the COLA to be "actuarially appropriate" and so deplete the pension fund to zero that much faster. Attached is Paul Becker's memo of February 5, 2009 about this bill. Senate Bill 237 by Senator Elliott would "provide that police officers and firefighters with certain diseases (as yet not listed) will be presumed to have been injured in the line of duty for disability retirement benefits." I am not sure why the present system requiring medical evidence and the pension board's decision should be replaced by the State Legislature's decision. The list of such "certain diseases" will be interesting (and of course can be added to by later legislative action). 3 C.3 Pending State Legislation Page 6 of 20 Every officer retired for a disease requiring a presumed disability will have to be supported by the taxpayers just as his or her replacement officer. An officer actually injured in the line of duty should certainly receive the pension rights as currently authorized by state law. But citizen support for disability pensions might erode if the legislature grants "in the line of duty ... disability retirement benefits" for officers who do not appear disabled, have fully recovered, or who cannot link their disease to their work. I guess I do not know what problem Senator Elliott is attempting to solve. CONCLUSION Several filed House or Senate bills (especially SB 146) may have serious financial ramifications for Fayetteville taxpayers or remove the City Council's power over major budget issues. 4 C.3 Pending State Legislation Page 7 of 20 RESOLUTION NO. A RESOLUTION TO EXPRESS THE CITY COUNCIL'S OPPOSITION TO ANY PROPOSED STATE LAW THAT WOULD CONSTITUTE AN UNFUNDED MANDATE UPON CITY TAXPAYERS OR WOULD REMOVE DISCRETIONARY POWER OF THE CITY COUNCIL TO CONTROL ITS BUDGETARY EXPENSES WHEREAS, the City of Fayetteville has a outstanding cadre of dedicated and highly competent employees; and WHEREAS, the Mayor and City Council are committed to assuring that all city employees receive the compensation and benefits that they deserve; and WHEREAS, the Mayor and City Council appreciate the concerns expressed in pending legislation before the 87th Arkansas General Assembly to assure adequate benefits for local government employees and retires; and WHEREAS, municipal governments have limited powers and avenues for securing revenues and can utilize only such means as are specifically granted by state legislation; and WHEREAS, several "shell"bills (title only) have been filed in the 871h Arkansas General Assembly that could severely impact the finances of the City of Fayetteville and its taxpayers; and WHEREAS, pending legislation would"require pension plans under local police and fire pension and relief funds to merge with (LOPFI) ...."; and WHEREAS, current state law gives the City Council the discretion of whether or not such merger should occur because such merger would require Fayetteville and its taxpayers to be liable for the multimillion dollar unsoundness of the pension plans; and WHEREAS, any other bills which could impose an unfunded mandate or reduce the City Council's power or discretion over budgetary matters should not be enacted. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,ARKANSAS: Section l: That the City Council of the City of Fayetteville, Arkansas hereby requests that the 87th Arkansas General Assembly ensure that any bills it considers will not place an unfunded mandate on cities and their taxpayers nor remove a city council's authority to determine whether or not old police and fire pension plans should be consolidated with LOPFI (with the substantial resulting expense for the city and its taxpayers). C.3 Pending State Legislation Page 8 of 20 Section 2: That the City Council of the City of Fayetteville, Arkansas hereby requests that the 87`h Arkansas General Assembly provide full state funding for any mandated changes in benefits for employees and retirees of local governments. PASSED and APPROVED this 17th day of February, 2009. APPROVED: ATTEST: By: By: LIONELD JORDAN, Mayor SONDRA E. SMITH, City Clerk/Treasurer C.3 Pending State Legislation Page 9 of 20 Stricken language would be deleted from and underlined language would be added to the law as it existed prior to this session of the General Assembly. 1 State of Arkansas 2 87th General Assembly A Bill 3 Regular Session,2009 SENATE BILL 146 4 5 By: Senator J.Jeffress 6 7 8 For An Act To Be Entitled 9 AN ACT TO REQUIRE PENSION PLANS UNDER THE LOCAL 10 POLICE AND FIRE PENSION AND RELIEF FUNDS TO MERGE 11 WITH THE LOCAL POLICE AND FIRE RETIREMENT SYSTEM 12 WHEN CERTAIN REQUIREMENTS ARE MET; AND FOR OTHER 13 PURPOSES. 14 15 Subtitle 16 TO REQUIRE PENSIONS PLANS UNDER THE 17 LOCAL POLICE AND FIRE PENSION AND RELIEF 18 FUNDS TO MERGE WITH THE LOCAL POLICE AND 19 FIRE RETIREMENT SYSTEM WHEN CERTAIN 20 REQUIREMENTS ARE MET. 21 22 23 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24 25 SECTION 1. The purpose of this act is to require pensions plans under 26 the Local Police and Fire Pension and Relief Funds to merge with the Local 27 Police and Fire Retirement System when certain requirements are met. 28 29 30 31 32 33 34 35 36 II II II II�I II I I I II O1-23-2009 09:33 MMC114 C.3 Pending State Legislation Page 10 of 20 Stricken language would be deleted from and underlined language would be added to the law as it existed prior to this session of the General Assembly. 1 State of Arkansas 2 87th General Assembly A Bill 3 Regular Session,2009 SENATE BILL 222 4 5 By: Senator Laverty 6 7 8 For An Act To Be Entitled 9 AN ACT TO AMEND THE ARKANSAS CODE REGARDING 10 FUNDING LOCAL RETIREMENT LIABILITIES FOR LOCAL 11 POLICE AND FIRE PERSONNEL; AND FOR OTHER 12 PURPOSES. 13 14 Subtitle 15 TO AMEND THE ARKANSAS CODE REGARDING 16 FUNDING LOCAL RETIREMENT LIABILITIES FOR 17 LOCAL POLICE AND FIRE PERSONNEL. 18 19 20 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 21 22 SECTION 1. The purpose of this act is to amend the Arkansas Code 23 regarding funding local retirement liabilities for local police and fire 24 personnel. 25 26 27 28 29 30 31 32 33 34 35 36 II II II II I I III) II 01-22-200912:40 MMC105 C.3 Pending State Legislation Page 11 of 20 Stricken language would be deleted from and underlined language would be added to the law as it existed prior to this session of the General Assembly. 1 State of Arkansas 2 87th General Assembly A Bill 3 Regular Session,2009 SENATE BILL 234 4 5 By: Senator Elliott 6 7 8 For An Act To Be Entitled 9 AN ACT CONCERNING HEALTH CARE BENEFITS FOR 10 MUNICIPAL OFFICIALS AND EMPLOYEES WHO ARE 11 ELIGIBLE FOR UNREDUCED RETIREMENT WITH ANY STATE 12 OR LOCAL PENSION AND RELIEF FUND; AND FOR OTHER 13 PURPOSES. 14 15 Subtitle 16 AN ACT CONCERNING HEALTH CARE BENEFITS 17 FOR MUNICIPAL OFFICIALS AND EMPLOYEES 18 WHO ARE ELIGIBLE FOR UNREDUCED 19 RETIREMENT WITH ANY STATE OR LOCAL 20 PENSION AND RELIEF FUND. 21 22 23 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS: 24 25 SECTION 1. Arkansas Code § 24-12-129 is amended to read as follows: 26 24-12-129. Municipal officials and employees. 27 a) When any municipal official or municipal employee age fifty five 28 55) or ever whe w eempleted twenty (20) years ,.a serviee te 29 munielpal4ty and _he is vested la `ke retirement; s`stew who is eligible for 30 an unreduced retirement with anv state-supported or government-based local 31 pension and relief fund retires, , the official or employee may continue to 32 participate in the municipality's health care plan, receiving the same 33 medical benefits and paying the same premium as active employees ng as 35 eeatrlb�ttleas to the health ear-e plan. 36 (b) Each municipality may choose to pay any portion of the employer II II II II I lull I II 01-23-2009 09:23 MMC108 C.3 Pending State Legislation Page 12 of 20 SB234 1 and employee contributions to the municipality's health care plan so long as 2 all retired municipal officials and municipal employees within each 3 municipality are treated equally with regard to the dollar amounts that are 4 paid by the municipality toward health care coverage of each retiree. 5 (c) The retired municipal official or retired municipal employee shall 6 pay the amount of the health care premium that is not paid by the employer. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 2 01-23-2009 09:23 MMC108 n—._ _�..... ,d. . Kit Williams-AIERT This legislation would be very expensive „ , Pending statjt Page 13 of 20 From: Missy Leflar To: Don Marr; Kit Williams; Lana Broyles; Lioneld Jordan; Paul Becker Date: 1/27/09 11:15AM Subject: ALERT: This legislation would be very expensive Lana spotted this proposed legislation change. It would be very expensive for the City and, as I read it, would reduce a benefit for merit employees. It might also indirectly hurt all existing employees. At present, if any municipal employee aged 55 or older who has served 20 years with the City retires, they can stay on the City's health insurance as long as they want, provided they pay both their part and the employer part. People like this. They can hold on to their Blue Cross if they prefer it over Medicare. The proposed change would, first, limit the legislation to uniformed employees who are on LOPFI (or"old LOPFI") and would force the City to continue to pay its portion of their Blue Cross for as long as the employee lives. So it hurts merit employees and hurts the City financially. To give you an idea, the City presently pays around $210 a month for an employee's individual coverage and around $520 a month for an employee's family coverage. That obligation stops when the employee leaves the City. Where this indirectly hurts all existing employees is that this amendment says"whatever you pay for existing employees, you have to pay for pension retirees". This means that the City's only recourse to offset the increased expense would be to reduce the portion of what it pays FOR ALL EMPLOYEES. This is very bad proposed legislation. I don't know who y'ali go to on these things (Lindsley Smith?) but someone in a position to lobby against it should be consulted, in my opinion. Missy Leflar Human Resources Division Manager City of Fayetteville 113 W. Mountain Fayetteville, AR 72701 PH: 479-575-8298 Fax: 479-718-7698 E-mail: mleflar@ci.fayetteville.ar.us CC: Krista Laningham; Marsha Herlweck C.3 Pending State Legislation Page 14 of 20 aye ARKANSAS THE CITY OF FAYETTEVILLE,ARKANSAS To: Paul Becker, Finance Director From: Marsha Hertweck, Accounting Director Date: February 2, 2009 Subject: Pending Senate Bill 234 I have read Senate Bill 234 amending Arkansas Code 24-12-129. My interpretation of the bill is that this amendment would require municipalities with vested retired officials and employees in a state supported fund or a local based pension and relief fund to pay the same premiums of the City's health insurance cost for retirees as it pays for active employees. As worded it appears to exclude employees in a defined contribution plan such as our general employee plan. The current law allows employees that retire at 55 or older and have 20 years of service to remain in the City's health insurance plan and they pay the entire cost of the insurance premium. The City presently has five retired employees on the traditional Blue Cross family plan, three on the traditional single plan and one on the HSA family plan. If the City was required to pay the same benefit for these refired employees as active employees, the cost to the City would be $529 for those on traditional family plan, $217 for those on the traditional single plan and$354 for those on the family HSA for a total cost of$43,800 annually. It is likely that many more retirees would stay in the City's health care program if the City is required to pay this benefit and these current costs would probably multiply. The present law allowing retired employees to stay in the health care plan has a slight cost to the City in that older participants increase the overall cost of the plan, In accounting terms this increased cost is called an implicit cost and the City is required to have an actuarial study performed every two years to determine this cost and to accrue the liability in the government-wide financial statements. The current liability for the City is $2,733,600 and the annual required contribution to fund this liability for the end of 2008 was $354,059 per the latest actuarial study. The City does not fund this liability but uses a pay as you go approach. If the City is required to pay a portion of the premium for retired employees the annual required contribution to fund the liability will greatly increase and the City will have to look at some funding mechanism other than pay as you go. So aside from the $43,800 of increased current costs, the City will also need to fund the liability of future costs of this benefit program. 113 WEST MOUNTAIN 72701 479-521-7700 FAX 479-575-8257