The Magnolia City Council met in chambers at 5 p.m. Monday to cover several agenda items and to hear Mayor Parnell Vann's State of the City.
New business items kicked off with a report from City Auditor Bob Edstrom about the financially foundering wastewater system in Magnolia. Edstrom explained that city water and wastewater are two different operations. Since 2010, replacing and upgrading equipment at the wastewater plant, smoking water lines, as well as expensive chemicals for treatment, have led to losses.
"Right now the water is holding its own, but the wastewater is going down the tubes," Edstrom said. In 2015, he reported that the anomaly of a $1.5 million loss included the write-off of the sludge plant that was replaced. "We had a multi-million-dollar sludge plant that was being depreciated over 40 years. It only lasted about 25 years. When the new sludge plant was put in, we had remaining costs associated with the old sludge plant. That's what created a lot of the the $1.5 million loss in '15."
Edstrom said cash flow for wastewater was good in 2012 and 2013 but started going down in 2014. "It's literally in the toilet in '15. Repairs and maintenance are up. We've got a negative cash flow of $526,000. Right now the cost [to customers] is $2.75 per thousand gallons of water used, plus a $10 minimum. If we went from $2.75 to $4.25 -- a $1.50 increase, which is a 36 percent increase -- we estimated that that would bring in about half a million dollars. That doesn't even cover the deficit but it'll help it."
Continuing on, Edstrom said, "What do we want to do? A dollar fifty doesn't quite get you there. Another quarter would bring in about $85,000. They've got to smoke the lines in the city. An engineer made an estimate that it may run as much as $100,000 a year the next couple of years to cover that. Do we raise the rates enough to cover the costs that we think might exist for a year or two, or do we raise it to $1.50? If we do have these additional costs, do we go out and get bond money and then come back and raise the rates as needed to cover the bond payments? It's a real dilemma. I don't want the people of Magnolia paying an exorbitant fee for money to sit in the bank if it's not going to be used."
"ADEQ [Arkansas Department of Environmental Quality] and the EPA regulate plants like this all over the state, with our drinking water and our wastewater. ADEQ doesn't care. They want it handled and they don't care about the costs. Either you'll do it, or they'll do it for you," Vann said. "You can do nothing and we'll go back to the outhouse, or you can start with a buck fifty. The cost of doing business goes up every day. We're going to be meeting in the next month or two. The public need not panic. We're not voting tonight."
City Clerk Rachel Waller read a resolution regarding a four-year $2 million tax-exempt loan from Farmers Bank & Trust to cover continuing street resurfacing done by D&D Paving. The resolution was accepted unanimously. Vann reported that the paving is about 60 percent complete and that a striping contractor would be in town this week to give a quote on streets that have already been repaved.
An ordinance was unanimously adopted after three readings to amend the city's approved 2016 budget. City Treasurer Kim Newell reported that the city had $503,000 ending cash for 2016.
City Attorney Mike Boyd reported on a federal court case brought by Jessie Radford against the City of Magnolia in 2014 in regards to his alleged "mishandling" by Magnolia Police Department officers which resulted in his arrest after a disturbance report from Magnolia Regional Medical Center. The Municipal League represented the city and officers in mediation to avoid a trial. Boyd recommended that the city settle the suit for $2,000, of which the city's part is $200.
"For the city's sake, it's a $200 investment to settle this matter fully and finally for the city and for the officers as well," Boyd said. "It requires a resolution from the city council for approval." A resolution was unanimously accepted to settle the suit to avoid further expense.
T.G. Connelly and Calvin Daniel were unanimously approved to fill two vacancies on the City Planning Commission.
The Citizen of the Month was awarded to two nurses at MRMC who were instrumental in thwarting the attempted kidnapping of a newborn from the hospital on February 28. MPD Chief Glenn Maxwell thanked the mayor and city council for allowing him to present the awards.
"Barbara Hudgens and Helen Glover actively encountered the female who was trying to leave the regional health center with the child. Their quick actions enabled them to safely recover the child and prevent the child from being taken away. On behalf of the Magnolia Police Department and the officers of the MPD, I want to personally thank you for what you did," Maxwell said as he presented Hudgens and Glover with the awards while the chamber erupted in applause.
Mayor Vann's State of the City address included thanks to the Airport Commission and FBO Candy Drake of the Magnolia Airport for running without a single tax dollar while making a profit from the fuel it sold. He also thanked those serving the Magnolia Fire Department, the Magnolia Police Department, the Parks Department, Advertising & Promotion, Water Department, Street Department, and city employees, city attorney, and city inspector.
"I encourage everyone that I encounter: Get involved at an early age. When you're 18 and you can vote, get registered. Get busy. We are Magnolia. I'm thankful for the team of people around me who believe like I do. It's going to take people involved to make a difference and make it happen. It's an honor for me to be mayor. I'm thankful that the people have faith in me," Vann said. "I'm going to continue to work to make Magnolia better. I'm working for my family, and you are my family. In taking care of my daughters, I take care of you."
Vann said his main goals for 2017 are jobs and healthcare, as well as continuing efforts toward "the project" of proposed ball fields and aquatics center, implementing changes recommended by the Garver study, adding sidewalks, and cleaning up delinquent properties.
"We owe $28 million on a brand-new hospital. If we don't have healthcare, we don't have a town. The city runs on three pots of money: You have street money. When you buy gasoline and diesel, you pay a little car insurance, that's where your street money comes from. That money cannot be mixed with anything. If you live inside the city of Magnolia, you own the utilities. When you pay your bill each month, you own utilities. That money cannot be used for anything but utilities. And then city general. That's a pot of money. That's your police, fire, parks, animal control, city hall. There's where your monies are. If there's ever a question about your money, come and see your city treasurer. We'll get you copies of whatever you want. We're glad for you to know where your money's being spent," Vann said.
Vann also reported on airport improvements, including an upcoming new runway lighting system and recently installed AWOS [Automatic Weather Observing System]; new fire department equipment, vehicles, and gear; and a potential move to city-owned property for the MPD.
"It's time that the Magnolia Police Department be moved," Vann said. "We have the money, and I will be coming to his council in the next 60 days, and I will present a way that the Magnolia Police Department can move to an existing property that we own. We can rehab that property and move our police department where they have the room and they have the resources to continue serving us in the coming years. We won't have to go out to bonds and we won't have to borrow."
According to a study Vann cited, Magnolia is the fifth safest city in Arkansas for one of its population. "I'd like to take credit, but credit goes to Chief Maxwell and his team," he said. He described efforts by MPD and MFD to go into problem neighborhoods to create relationships with children and their families. "Sadly, we don't know what our children are told about the fire and police. But I know I'm glad they're on our team. My hat's off to the patrol and the relationships they're building. I'm thankful for them."
As for the Parks Department, Vann spoke about new director David Burdine's outstanding accomplishments and Rep. David Fielding's contributions. "Representative Fielding has truly been a friend to Magnolia as long as I've been mayor, and I want to thank him for those funds," he said, specifically for improvements at South Side Park.
Vann pointed out that Magnolia hosted the summer swim state championship at East Side Park. "We had folks everywhere. I think that's just a little taste of what's to come."
"If the young people 62 and above don't let the 30- to 40-somethings make their way in this town, they will make their way out of town. Years ago, the young people 62 and above made Magnolia what they wanted it to be. Now it's time we let the 30- to 40-somethings make it what they want it to be. I say this all the time: Where are your kids? Will they come home, and why? You need to think about it. God didn't tell us how long we had on this earth. Let's follow through with this, and let's make a better Magnolia."
Vann said that three Magnolia citizens -- David Sisson, Robert Dodson, and Jennifer Hubbard -- will report next month on the impact the ballpark/aquatics center could have on the community. "Many of us will probably never put our toe in the water of that pool. Many of us will probably never step up to home plate," he said. "Let's just grow our income. I beg you to not be negative to our city. The city's been good to us all or we wouldn't still be here."
In conclusion, Vann stated that, "I wish everyone loved me. You don't have to. But am I doing my job, am I leading a better Magnolia? If I'm not, next year there's an election. But as long as I sit here, I will fight for Magnolia. I will not play politics. If it's not good for all of Magnolia, don't bring it to me. It's not about a few of us. It's about all of us. If we don't change, we die."