Norris City Council

Minutes

Monday, May 9th, 2016

 

 

BE IT REMEMBERED THAT THE CITY OF NORRIS CITY COUNCIL MET IN REGULAR SESSION ON MONDAY, MAY 9TH, 2016, AT 7:00 P.M. WITH THE FOLLOWING COUNCIL MEMBERS PRESENT:  JACK BLACK, BILL GRIEVE, YORK HAVERKAMP,  

CHRIS MITCHELL, AND LORETTA PAINTER.   

 

The meeting was called to order by Mayor Mitchell. 

HEAR THE PUBLIC

No comments from the public.

APPROVAL OF MINUTES

1.       The minutes of the April 11, 2016 Council Meeting were presented for approval.   Motion was made by Council Member Black to approve the minutes.   Motion was seconded by Council Member Grieve.  Motion carried by voice vote.

 

OLD BUSINESS

 

1.       Board and Commission Vacancies - A motion was made by Mayor Mitchell to appoint   

Rich Stoner to the Norris Animal Commission and to appoint Kathie Murphy to the

Tree Commission.    Motion was seconded by Vice Mayor Haverkamp.  Motion carried by voice vote.

 

2.       Ridgeway Park Additions - City Manager Hester reported the water fountain would be installed by the end of month.  He reported the rubberized mulch had arrived and we are waiting on the arrival of the playground equipment.

3.       Ordinance 593 - An Ordinance Amending Title 15, Motor Vehicles, Traffic and Parking, Chapter 3, Speed Limits, Section 15-303 in School Zones of the City of Norris was presented for second reading.    City Manager Hester noted the school zone speed times needed to be updated to reflect the dismissal times on Wednesdays.   City Manager Hester reported a Public Hearing was not required for this Ordinance.  Motion was made by Vice Mayor Haverkamp to approve Ordinance 593 on second reading.  The motion was seconded by Council Member Painter.  Motion carried by voice vote.

 

Status Report:  Water and Sewer Rate Changes - City Manager Hester reviewed Ordinance 587 approved in December 2015 to raise the water and sewer rates effective 7-1-2016.  He noted the water minimum water usage was changed from 3,000 to 2,000 gallons and the sewer rate was increased by approximately 7.50%.  He also noted that several utilities in our area have lowered the minimum usage to 1,500 gallons.  The ordinance covered rate increases over the next three years.  Mayor Mitchell asked if notices concerning the rate increases would be mailed to the customers.  City Manager Hester said individual notices would not be mailed, but a notice of the rate change would be disclosed on the June water billings and also educational material will be on the City website closer to 7-1-2016.   Mayor Mitchell stated when we approved the rate increases we were told how the money was to be used.   He asked if that was still the intention of how the money would be used.   City Manager Hester said the sewer rate increase is almost exclusively for sewer projects.   The water increase (lowering the minimum) will pay for the hiring of an additional water operator.   He said the plan is to hire a certified water plant operator sometime in the 2016 - 2017 budget year, but no decision has been made yet on the exact timing.  Mayor Mitchell stated, from my memory when we received the rate increase ordinance, it stated this was the amount needed and this would fund us and meet all requirements of reporting financials to the state.  He asked if this was still a true statement and City Manager Hester stated it was.  The Mayor reviewed the state requirement - NWC has to have a positive net income.  City Manager Hester stated that was correct and you have to fund your operating expenses strictly from user fees - the City cannot lend money to the utility to operate.  He stated the utility, under state laws that changed over the last few years; we have to set aside finances every year to cover the amount of our depreciation to pay for projects over time.  Mayor Mitchell asked if we have the funds to do all the projects.  City Manager Hester stated we do and that is the main reason we are delaying the hiring of the new water operator.   Mayor Mitchell asked if at the end of June, Norris Water Commission would report they are incompliance.  City Manager Hester stated this current year we would not be.  We had some unexpected expenses at Christmas time that were not budgeted items and did not meet criteria for capital and we fully expect to be negative this year.  He said NWC is fully in the black but we will dip $15,000 to $20,000 that should have been earmarked for depreciation, and what that will do is trigger a notice from the State that we did not meet their requirements and he said the state is looking for utilities that hit this mark over multiple years.   Mayor Mitchell asked City Manager what was his feeling about us passing the test the second year.  City Manager Hester said he was very optimistic.  The unexpected repair was to the two lift stations on Hickory Trail that cost about $25,000 to fix but all of the expenses could not be capitalized.   Mayor Mitchell asked at what level of unknown expenses are we able to handle and not trigger us for not being incompliance - if something happens how much can we absorb.  City Manager Hester said we have to work smartly and also plan our capital projects.   Items with possible large repair bills, like the water treatment plant and pumps, these projects would all be capitalized.  We would pull from the capital reserve and/or take out a loan to cover the expenses.  Mayor Mitchell asked if we would

delay other capital purchases so not to fail the test again. City Manager Hester said we currently have reserve funds of approximately $350,000.    Mayor Mitchell stated so what you are saying is the issue is not cash, but a reporting issue because of depreciation as a result of additional capital purchases in a year that was not planned.  City Manager Hester said that was correct.   Mayor Mitchell asked why we did not delay other capital purchases so that depreciation did not hit.  City Manager Hester said you did not listen, as I said the repairs to the lift station did not meet the capital asset criteria.  City Manager Hester said we cannot plan for everything.   City Manager Hester said we can plan a budget and stick an extra $20,000 - $100,000 in operations - some years we might need and some years we might not and we cannot predict everything.  NWC Chairman Harshbarger stated our budget is tight.  He said they are trying to keep rates as low as possible while still completing sewer projects.  He noted depreciation has gone up $25,000 over the last few years because of the sewer projects that have been completed.   Harshbarger stated the commission will look at the 2016-2017 budget every three months to determine if the water operator can be hired.   City Manager Hester stated the new operator and the timing of the hiring was the cushion.   City Manager Hester noted we are in the middle of the pack with other utilities as far as water rates and we are one of the higher as far as sewer rates.  He stated he feels after other utilities raise rates for next fiscal year this will change.  He noted there has not been a staffing change in many years and the number of employees actually dropped when Benny Carden retired.   Mayor Mitchell asked why the regulatory body did not know of the possible negative position.   NWC member Richard Dyer stated that's a good question.  Mayor Mitchell told City Manager Hester he was not asking him to predict the future, but wants to know if he feels we have adequate reserves for next year's budget to pass.   City Manager Hester stated yes there is adequate funds and he wanted to point out something that it had not been reported because it was not done - we will not know until June 30 if we are in the red or not and if weather stays dry through June, we may end in the black.  NWC Harshbarger said he feels we do have adequate reserves for next  year's  budget, but it is tight.  Mayor Mitchell asked if this was a good statement - there is a chance we will receive a letter from the state.  City Manager Hester said there is a chance and he would not even clarify with "good" and there is a chance every year.    Mayor Mitchell said if there is a chance of this magnitude in the future, I would like a conversation with the regulatory body at the council meeting.   City Manager Hester said he would encourage everyone to read the minutes they are provided monthly.    Mayor Mitchell said he would do a better job reading minutes, but please do not rely on that.  Council Member Painter noted the need for another certified water operator.  NWC Member Richard Dyer stated he feels bad about the situation and hopes we do not get a second letter.  He stated he apologized for the lack of homework and preparation I am responsible for.   Mayor Mitchell said when there is a concern in the future he asked that NWC come to council to request a rate increase.   Mayor Mitchell said he was going to read the minutes and look for the notification in the minutes as to the negative cash position concern and I am sure I will find it.

 

CITY MANAGER REPORT

City Manager Hester reported on the following:

 

1)      2015 - 2016 Year to Date Budget - Overall expenditures are on target to budget with revenues slightly above estimates.  99% of the 2015 property taxes have been collected, which is on pace with previous years.  Overall the City's financial health continues to be very strong, and the City is in good position for meeting upcoming capital needs such as equipment and road paving.

 

2)      Grant Updates

a.       T-21 Grant Opportunity - no change from last month.

b.      Safe Routes to Schools Grant - signed contract has been submitted to state and we are waiting on approval to perform the environmental assessment.

c.       Oil Recycling Grant - No change to report.

d.      Local Parks and Recreation Grant Application - City Manager Hester reported the application for the $50,000 grant had been submitted.

 

3)      TOSHA Inspection - The TOSHA inspection was on April 25, 2016.  A final report will be issued in the coming weeks and will be reported to the Council.

 

4)      1992 Fire Truck Repairs - City Manager Hester reported the older fire truck had to be towed to a certified shop for emergency repairs.  The issue was a computer module that controlled the transmission.  The repairs total $4,475 and of this, only $1,300 is available in the budget for fire vehicle repairs.  City Manager Hester asked Council to approve using $3,175 from undesignated cash reserve to pay for this unplanned expenditure.  Motion was made by Vice Mayor Haverkamp to use $3,175 from the undersigned cash reserve to pay the expenditure.   The motion was seconded by Council Member Grieve.  Motion carried by voice vote.

 

5)      Update of Watershed Resource Management Plan

A draft of the plan in now on the City's website for public review prior to its adoption.    The public is encouraged to attend future Watershed Board meetings and provide input.

 

6)      See attached City Manager Report. 

 

NEW BUSINESS

 

7)       Budget Amendments  - none

 

8)      Resolution -3 - 2016 - A Resolution to Adopt an Internal Control Manual for the City of Norris and Norris Water Commission was presented for approval.   City Manager Hester reported the State of TN was requiring all municipalities to have an Internal Control Policy in place by June 30, 2016.   Future federal grants require applicants to have an Internal Control Manual in place in order to apply for grants.  Mayor Mitchell asked if the manual had been reviewed by our Auditors and City Recorder Parks reported it had been reviewed and approved by our auditors.   Motion made by Council Member Black to approve Resolution 3-2016.   Motion was seconded by Council Member Grieve.  Motion carried by voice vote.

 

9)      Resolution 4 - 2016 - A Resolution to Adopt a Fraud Policy for the City of Norris and Norris Water Commission was presented for approval.   This policy was recommended by MTAS and was developed as a companion policy to the Internal Control Manual.  City Recorder Parks stated the policy had been reviewed by MTAS attorneys.  Motion was made by Council Member Black to approval Resolution 4 - 2016.  Motion was seconded by Council Member Grieve.  Motion carried by voice vote.

10)   2016-2017 Certificate for Wine in Grocery Store Sales - City Manager Hester reported he was informed Archer's Food Center would be selling wine sometime later this year.   He reported the City can charge a one-time application fee and  requested approval of a one-time application fee of $200.   Motion was made by Council Member Black to approve the one-time application fee of $200.  Motion was seconded by Council Member Painter.  Motion carried by voice vote.

 

11)   Certificate for Wine in Grocery Store - City Manager Hester requested approval of the certificate form as presented.  The form would require the signature of the Mayor.  Motion was made by Council Member Grieve made a motion to approve the certificate from.   Motion was seconded by Council Member Black.  Motion carried by voice vote.

 

12)   2016-2017 Budget Ordinance No. 594 - 1st Reading - City Manager Hester presented a balance budget with no changes to the property tax rate and does not account for any capital spending.  He noted the Capital Plan is addressed separately.  He reported the budget ordinance requires two readings and a public hearing.    City Manager also reported on anticipated reductions in future yearly revenue as a result of the elimination of the Hall Income Tax over the next six years by the State of Tennessee - the current rate is 6%, but will be reduced by 1% per year for the next six years.   The current yearly revenue from the Hall Income Tax is approximately $30,000.  He also reported he had received word the anticipated new business on Norris Freeway at the old TVA Aquatic Center was not going  to happen in the near future as a result of the cost of necessary sewer improvements.  The owners have decided to locate their business in Knoxville.   Council Member Black stated he was fine with the budget overall, but not the proposed Capital Plan.   Council Member Black stated he wants to remove both sidewalk capital projects from the Capital Plan.  Mayor Mitchell stated we can back out of the grant, but it could negatively impact us for several years.  Mayor Mitchell noted as of right now a Capital Plan had not been approved. 

 

 

 

Council Member Black stated he wanted to recommend the Public Works truck in the amount of $15,000 and the $7,500 in fire equipment from the 2016-2017 proposed Capital Plan be included in the 2016-2017 budget.   Mayor Mitchell asked if the Public Works truck was needed.  City Manager stated he did think the truck was needed.   It is a Public Works truck that is also used the Watershed.  Mayor Mitchell asked if this truck would handle a snow plow.  City Manager Hester said currently the plan is to purchase a 4 x 4 short-bed truck and it would accommodate a smaller snow plow.  City Manager Hester stated instead of a property tax increase the City could borrow money for the capital plan items.   City Manager Hester stated he would not recommend a property tax increase to fund the entire capital projects.   He stated a modest increase in property taxes to fund a loan might be the way to go.  Council Member Black made a motion to add the Public Works truck in the amount of $15,000 and the fire equipment in the amount of $7,500 to the 2016-2017 budget.  Motion was seconded by Council Member Painter.  Motion carried by voice vote.

 

City Manager Hester recommended amending the General Fund budget by removing the $6,900 per year for cardboard/glass recycle expense from the Public Works budget (Account Number 43000-354) for the 2015-2016 and the 2016-2017 budgets and also future budgets.  Motion was made by Vice Mayor Haverkamp to approve this amendment.  Motion was seconded by Council Member Grieve.  Motion carried by voice vote.

 

City Manager Hester recommended amending the Refuse Fund budget by increasing the cardboard/glass recycle expenses in the amount of $6,900 (Account No. 128-43230-354) for the 2015-2016 and the 2016-2017 budgets and also future budgets.  Motion was made by Vice Mayor Haverkamp to approve this amendment.  Motion was seconded by Council Member Grieve.  Motion carried by voice vote.

 

Vice Mayor Haverkamp said we are seeing growth and with that our reserve fund is decreasing - the property tax increase is one little step in trying to fix this.  As a result of the decrease in future revenue and the funds needed for future capital projects, a motion to increase the 2016-2017 property tax rate by 4 1/2 cents was made by Vice Mayor Haverkamp.    Council Member Black stated he did not have a problem with the property tax increase as long as a Public Workshop was held for citizens to attend.   City Manager Hester stated the tax increase would help fund capital over the next couple of years and after that cover anticipated revenue decreases.  Council Member Black made a motion to amend Vice Mayor Haverkamp's motion to increase the property tax rate by 4 1/2 cents contingent on a workshop being held on Monday, May 23rd, 2016 at 7:00 p.m.   Motion was seconded by Council Member Grieve.  Voting for amendment:  Black, Grieve, Haverkamp, and Painter.  Voting against:  Mitchell.

 

Vice Mayor Haverkamp stated his intent was to increase property taxes $30,000 per year to cover the Hall Income Tax elimination.   He asked City Manager Hester if the 4 ½ cent increase would cover that amount.   City Manager said he could not provide that information until he had time to research.   He recommended Vice Mayor Haverkamp amend his motion to state a property tax increase of $30,000 per year instead of the 4 ½ cents.  A motion to amend the property tax rate to increase the property taxes by $30,000 per year was made by Vice Mayor Haverkamp.  Mayor Mitchell said the Public Hearing would give the public a chance to hear about this and engage.  Council Member Painter noted that the increase could be decreased as the Halls Income Tax will decrease over time. Motion was seconded by Council Member Black.  Voting for the amendment:  Black, Grieve, Haverkamp, and Painter.   Voting against:  Mitchell.   Vice Mayor asked Mayor Mitchell why he was opposed to the tax increase.  Mayor Mitchell said that was a fair question and the reason he voted against the increase is we do not need an increase for this budget.    Mayor Mitchell stated there are tax increases in the future, but we need to study when and how much.  He said he is not against tax increases, but he is again creating such excess that it makes us not ration the decisions well.  Vice Mayor Haverkamp stated he did not think we were talking about that much excess and he did not agree with him.  Mayor Mitchell stated that is why we have five voices and a workshop.

 

The amended Budget Ordinance 594 was presented for first reading.  Motion was made by Council Member Black to approve Ordinance 594 on first reading.  Motion was seconded by Council Member Grieve.  Voting for:  Black, Grieve, and Haverkamp.  Voting against:  Mitchell and Painter.

 

13)   Accounts Payable, Minutes, and Reports

Mayor Mitchell asked Council for questions or comments concerning accounts payable, minutes, and reports.  There were no questions or comments from Council. 

Mayor Mitchell asked Council if we need to structure the Public Workshop on June 6, 2016.  Mayor Mitchell said he was fine with each Council Member having an allotted amount of time to discuss our views.   He feels everyone should have a chance to speak or they could just listen to public responses.    City Manager Hester proposed a debate format that would allow each Council Member to take 2 -5 minutes  at the beginning of the meeting to take their position, give the audience time to make comments, and allowing closing comments from the Council.   Mayor Mitchell said Council Members are not required to make any statements if they choose not to.    

Motion was made by Council Member Grieve to adjourn.  Motion was seconded by Council Member Painter.   Motion carried by voice vote at 9:40 p.m.

 


TO:                        Norris City Council        
FROM:  Tim Hester                        

RE:                  City Manager's Report                    

DATE:             May 9, 2016

 

1.   2015-16 Year to Date (Estimated through April) Budget.   Overall, YTD Expenditures are on target to budget, and revenues are slightly above estimates.  99% of property tax has been collected through April, which is on pace with previous years.   Other key revenue categories (State Sales Tax, Local Option Sales Tax, Liquor & Beer Wholesale Tax) are on budget. 

Estimated 2014-15 Year End Undesignated CASH reserves finished at:

  1.  
    1. General Fund             $210,000
    2. Watershed Fund         $177,717 ($26,762 of this is earmarked for future Rifle Range improvements)

Overall, the City's financial health continues to be very strong, and the City is good position for meeting upcoming capital needs such as equipment and road paving.

  1.  Grant Updates.   
    1. New T-21 Grant Opportunity - grant was awarded for $347,000 to extend the City sidewalk system to Highway 61.  This will require the City to provide match funds of approximately $120,000.  TDOT reports that these types of projects typically take 2-3 years of prep work prior the project breaking ground.  TDOT has authorized us to proceed with the Environmental Phase of the project.   The site survey is being modified, and are proceeding with easement acquisition in the upcoming weeks.
    2. Safe Routes to Schools Grant.  Safe Routes to School (SRTS) is a federally funded program focusing on the benefits of children walking and biking to school. Its primary purpose is to encourage elementary and middle school children to safely walk and bicycle to school through infrastructure improvements, educational initiatives and promotional activities.  Projects and activities are 100% federally funded for the 2015 year; no match is permitted.   Our award of this grant was received and we have begun the planning process for implementation.   Our signed contract has now been submitted to the State and we are waiting for their approval to perform the environmental assessment.
    3. Oil Recycling Grant.   An award has been made by TDEC for an oil recycling grant in the amount of $21,500.   Grant request had been for $27,500.   We will evaluate if we can still upgrade both used oil furnaces at Public Works and NWC operations buildings with the lower funded amount.   This grant is funded 100% and requires no local match.    I attended a mandatory seminar for this grant on February 9th, and we are in the process of developing our specifications for equipment.   This grant should be completed by October 2016.
    4. Local Parks & Recreation Fund Application.  Grant application has been submitted and awards are expected in October. Focus of this grant would be re-surfacing the tennis courts and updating the adjoining restrooms.   This grant requires a 50% match, and if awarded we can expect the project to be completed in the 2017-18 Fiscal Year.  Project budget is estimated at $50,000, meaning the City's responsibility would be $25,000. 

 

  1. TOSHA Inspection.   TOSHA inspector visited the City on April 25th.  Pertinent records were reviewed and site inspections conducted at the Community Building and at Public Works.  A final report will be issued by TOSHA in the coming weeks, but no findings were observed during the visit.

 

  1. 1992 Fire Truck Repairs.  The older of our two fire trucks had to be towed to a certified shop for repairs.  Issue was with a computer module that controlled the transmission.   Repairs were effected at a cost of $4,475.   Of this, only $1300 was available in the budget for fire vehicle repairs.   Repairs were authorized as an emergency expenditure, and Council is asked to approve using $3,175 from the Undesignated Cash Reserve to pay for this unplanned expense.

 

  1. Update of Watershed Resource Management Plan.   The Norris Watershed Board is working to update and revise the Resource Management Plan.   This plan addresses 3 major categories of activities in the Watershed: forest management, recreation, and water quality.   Public workshops were held in January, February, April, and May.   The plan will continue to be worked on and discussed at future meetings.  A draft of the plan is now on the City's website for public review.  The public is encouraged to attend future Watershed Board meetings and provide input to the Watershed Board regarding one of Norris' most important resources.