November 22, 2016
MINUTES of REGULAR SESSION
of the BOARD of COUNCIL
of the CITY of RUSSELLVILLE, KENTUCKY
held November 22, 2016
The Russellville city council met in regular session on Tuesday, November 22, 2016, at 5:00pm, in city hall. Mayor Mark Stratton presided over the meeting with council members Jimmy Davenport, Pat Bell, Sandra Kinser, Jack Whipple, Larry Wilcutt and Darlene Gooch present.
Kinser moved, seconded by Bell, to approve the minutes of the council meeting held on November 8, 2016; being no additions or corrections the motion passed unanimously.
The Mayor has no appointments at this time.
The Mayor announced two City employees with a child that is battling Cancer. Mary Lynn Moore with the City of Russellville Police Department son (Charlie) and the son of Josh Lawson with the City Street Department. The Mayor asked that we keep them in our prayers.
City Clerk/Bob Riggs presented a financial report for the city.
Under old business the Water Rates from Citizen Amy Stafford were unable to attend, Shirley Yassney was present for the discussion. The Mayor changed the order of agenda and asked Yassney if she would object to having Andy Lange from the KWRA present his results from the Water Rate Study first, Yassney said no.
Under new business the Water Rate Study from KWRA results was presented to the Mayor and City Council by Andy Lange. It’s been ten years ago when the last rate study was conducted. The good news was Mr. Lange at this time is not recommending a rate increase but that we conduct another Rate Study in three years. The standard procedure is a rate study every, three to five years for municipalities. This recommendation was based on the City’s financial performances over the past three years. Mr. Lange also recommended that the City keep the surcharge of $.55 until the next water rate study is conducted, again with his recommendations in three years. The City at that time will have paid off our largest debt by the year of 2019. The Water & Sewer Department shows to be stable on revenue and expense. The information for the rate comparison was collected from the KIA with the rates not being older than four years old, according to Mr. Lange, the rates hold steady with the surrounding areas based on our location. Mr. Lange went over the Water Loss (Non-Revenue Water) the average is 30% ours is at 36%, he feels our percentage understandably good with us having an old system and with leaks. If the City could get our average to 30% then that would be less water to purchase and savings of $70,000. Mr. Lange did mention hopefully with Springfield TN. coming on, it would stabilize or possibly decrease a few cents perhaps, which would help the City because we’re one of the larger purchasers of Logan Todd Water. City Attorney Neil Kerr asked Mr. Lange that earlier “you said that you did not recommended increase but what about as far as decrease”, Mr. Lange said “the only decrease that I was recommending at this point and time was the possibility of reducing your $.55 per1000 surcharge, which has been in place since the “water crisis”. Attorney Neil Kerr asked Mr. Lange “so currently are you recommending we decrease the water rates”, Mr. Lange replied, “in three years, I’m recommending that you consider it”. Attorney Neil Kerr then said, “As of right now you are not expressing that we decrease the rates”, Mr. Lange, replied “I recommending no change at this time”. Attorney Neil Kerr said “okay, I wanted to make sure this was explicit and very clear”.
The City Council meeting returned back to under old business with Shirley Yassney filling in for Any Stafford. Shirley said, “and no increase in water doesn’t surprise me”. Ms. Yassney wants to encourage the Council to think seriously about getting those “old tanks” fixed, “that’s money going into the ground that we need to put back into the system, if not back into decreasing the rates”.
Shirley Yassney said “I don’t quite understand the money situation, how your audit shows you have over $3,000,000 in revenue from Water & Sewer, that’s sitting in the bank, it’s in your audit right here”. Bob Riggs replied, “we refer to physical year 2015, that which your looking at”,” we asked Anna Gentry that’s partner of audit firm”, “she said that the number that you’re looking at is our net asset / net position of $6,922,907”. Our Sewer Cash is $1,378,143, but a large portion is restricted and the letter states shows the restricted cash investments is $1,232,000, so that leaves $44,000 not restricted cash for that audit at year end. The other cash is restricted and there is a list of that makes that up (ex: KIA Grant Funds, BBT WS 98/99 Rsv). In the letter from Anna Gentry made it very clear that the cash growth $1,378,000 is large part but is restricted. Bob Riggs did offer to allow Ms. Yassney to sit down and look at it sometime if she wanted to.
Shirley Yassney stated,” as of June 30, 2015 carrying the amount of City deposits of $3,142,000.” Bob Riggs replied, “You’re talking total City, I’m talking only Sewer & Water”. Yassney then said, “It’s not insured”. The Mayor said “it’s insured”, Ms.Yassney stated, “at this point it was not insured”. Mayor said, “No ma’am it’s always been insured”, with the Mayor repeating “no ma’am it’s always been insured, $500,000 by the Feds the other is securities and collateral”. The Mayor went on to mention we get a monthly statement from each bank that is showing that they have the rest of our funding minus $500,000 secured.
Bob Riggs spoke of how BBT and First Southern both pledges every month, regardless of how much they really need, and is way more than enough. City Attorney Neil Kerr explained that process that Bob is talking about is actually authorized by State Law; if you’re interested into looking into the statues its KRS 41.240. This specifically authorizes the bank to provide that has an alternative to having the entire amount just from insurance by FDIC. Bob replied “FDIC is just not adequate anymore”. Bob explained that FDIC just won’t cover $500,000 for all your deposits, it’s the ID# and we can’t count on that.
Shirley Yassney referred to a page with amounts and still questioning what was insured. The Mayor and Bob explained again how to look at the audit and informed Ms. Yassney that it’s insured and always has been. Ms. Yassney said “I’m sure you know what you’re talking about, it’s just Greek to most of us because that’s what it says and it’s a public statement that given to people and its confusing”.
Shirley Yassney mentioned “there is “old tanks” that is leaking and those need to be repaired”. Ms. Yassney then asked if General Funds are covered the same way, Bob replied, yes, BBT have both kind of funds deposited into the bank, First Southern Bank is the one that leaves it at $750,000 every month.
Attorney Neil Kerr asked Bob Riggs for a copy of the audit to review what it says, Attorney Neil Kerr said, “I just want to see that express statement that says we don’t have anything above $500,000 insured”. Ms. Yassney , “page 34 of the audit”. Attorney Neil Kerr says, “I’m on page 34 and it says, Of the City’s bank balances, $500,000 were covered by Federal Deposit Insurance, with the remaining $2,865,708 collateralized as discussed above”. Attorney Neil Kerr asked Bob Riggs “Is anything that needs to be added to that statement,” “Bob”? Bob replied back, “Sounds correct, that’s all General Funds and Water & Sewer, all of our cash”. Attorney Neil Kerr that’s collateralized, that is referring to the process of KRS 41.240.
Shirley Yassney then asked why there are people on the South side of Russellville and pays a sewer charge and they are on septic tank. City Council member Pat Bell responded “it’s been like that”, “remember when you was Mayor and over on Armstrong, that’s been like that for years”. City Council member Sandra Kinser explained Mayor Zick was in office at that time, the septic system was falling in and it had become a health issue. The City was finally financial able to borrow the money and replace the sewer line. The residents in that area could get extremely discounted fee to join at that time and those who chose not to, it was made very plain and clear if you didn’t join you had to pay your own fees, whenever it comes to that time. So, the people in that area had to make that decision to join or not. Shirley Yassney then mentioned the West side of Russellville one and why they was paying for sewer and have a septic system. The Mayor asked Wayne Thomas to explain how the Ordinance 2005-12 works, Yassney then asked, “how long people would have to pay for that sewer line”, Thomas said, “until they get off of the septic tank and hook onto the sewer”. At this time, the Mayor handed Ms.Yassney a copy of her and Amy Stafford answers to her questions of the city that was given at the July 1, 2016 with answers. Yassney thanked the Mayor and City Council for their time.
Under new business, City Attorney Neil Kerr read the first reading of Ordinance 2016-08 in reference to Amending Personnel Classification Plan and Pay Plan sponsored by Pat Bell.
The Mayor had received a Letter of Recommendation from DDI for the 1st payment in reference to the Streetscape in the amount of $23,646.62. Kinser moved, second by Bell, for the 1st payment for the Streetscape Project; the motion passed unanimously.
The mayor said there was a need to go into executive session for reason of property, personnel or litigation and pursuant to KRS 61.815(1) (a).
Bell moved, seconded by Wilcutt, to leave regular session and go into executive session; the motion passed unanimously.
Bell moved, seconded by Whipple, to leave executive session and return to regular session; the motion passed unanimously.
The Mayor mentioned wanting to provide the City of Russellville Water customers with online bill payment. The cost for the City for this service would be approximately $7500 and this would provide another service for our customers. The water customers would have a fee but they can view and pay their bill online. The Mayor now entertained the motion for approval, Kinser moved, seconded by Bell, the motion passed unanimously.
Now the Mayor asked for the thoughts for the one time pay increase for the City Employees, Gooch said she thought we should increase it, and the Mayor asked for the amount. Gooch said $250 and the council agreed with this amount but only for the full time employees and the part time employees receiving the one time pay of $100. Gooch moved, seconded by Davenport, the motion passed unanimously.
Davenport moved, seconded by Bell, to adjourn the meeting; the motion passed unanimously.
City Clerk Mayor