Annual Budget Book 2021

Airport

ACTUAL AMENDED ESTIMATED BUDGET
2019 2020 2020 2021

OPERATING REVENUES $ 50,539 $ 45,000 $ 42,101 $ 45,000
General sales and use taxes
Charges for goods and services 2,915,514 2,926,700 2,424,957 2,680,700
Other operating income
Total revenues 24,357 17,300 26,719 14,300

OPERATING EXPENSES 2,990,410 2,989,000 2,493,777 2,740,000
Personnel services
Services 781,593 801,995 801,563 821,634
Supplies 648,972 667,926 700,278 611,400
Reserves 1,406,315 1,336,810 936,653 1,188,925
Capital 1,180,000
Depreciation - - -
Total expense - - - -
1,015,053 1,143,000 1,057,554 1,065,800
NONOPERATING REVENUES (EXPENSES) 3,851,933 3,949,731 3,496,048 4,867,759
Investment earnings
Intergovernmental 12,775 10,800 10,546 8,800
Capital contributions 2,629,285 2,756,150 2,389,290 1,000,000
Debt service
Total nonoperating revenues 35,000 - - -
(expenses) -

Income before transfers 2,677,060 2,766,950 2,399,836 1,008,800
Transfers out 1,815,537 1,806,219 1,397,565 (1,118,959)
(377,431)
Change in net position - 1,428,788 - (338,000)
Total net position, beginning of year 1,815,537 21,913,676 1,397,565 (1,456,959)
20,098,139 21,913,676 23,311,241

151

Solid Waste

DEPARTMENT MISSION

Our mission is to provide the highest quality waste collection, transportation, processing, disposal and related services
to both public and private customers within the corporate limits of the City of Hot Springs, assure compliance with
state and federal law requirements regarding solid waste collection, transportation, and disposal. We develop and
maintain programs that increase the landfill diversion rate through recycling, re-use, and compost activities. We
implement major clean up events by providing free disposal services to promote neighborhood beautification and
maintain the operations of a Recycling Center to provide a free 24-hour drop-off collection center and free curbside
collection programs. We also maintain outstanding customer service by exceeding the customer’s expectations at all
times.

ACCOMPLISHMENTS OF FY2020

 Remodeled interior of Scale House
 New roof on Weld Shop
 Rebuilt compactor #1 at the Transfer Station
 Provided safe pick up and did not miss any day of picking up trash due to COVID-19 which produced 30 to

40 more tons per resident than normal during this virus

OBJECTIVES FOR FY2021

 Replace two exiting compactors at the transfer station that are at the end of their useful life
 Continue to provide BEST Customer Service as possible
 Improve safety program with a goal of NO accidents, where a division earns some type of reward if

achieved
 Improve notification of our CAPS program to the public

152

Solid Waste

ACTUAL AMENDED ESTIMATED BUDGET
2019 2020 2020 2021

OPERATING REVENUES $ 7,964,675 $ 7,590,500 $ 7,868,803 $ 8,050,000
Charges for services
Other operating income 132,143 136,500 82,306 136,500
Other
Total revenues 142,142 53,500 (86,155) 53,500

OPERATING EXPENSES 8,238,960 7,780,500 7,864,954 8,240,000
Personnel services
Services 3,974,445 4,068,950 4,106,342 4,056,515
Supplies 2,394,315 2,453,074 2,280,418 2,604,679
Reserves 1,082,470 1,044,639 1,053,601
Capital 813,012
Depreciation - 50,000 - 50,000
Total expense - - - -
945,122
NONOPERATING REVENUES (EXPENSES) 8,396,352 964,000 945,995 931,400
Investment earnings 8,580,663 8,145,767 8,696,195
Intergovernmental
Debt service 70,213 40,000 34,939 25,000
Total nonoperating revenues - - 10,702 -
(expenses) - - -
-
Income before transfers
Transfers out 70,213 40,000 45,641 25,000

Change in net position (87,179) (760,163) (235,172) (431,195)
Total net position, beginning of year
Total net position, end of year (79,726) (60,750) - (60,750)

(166,905) (820,913) (235,172) (491,945)

7,599,113 7,432,208 7,432,208 7,197,036

$ 7,432,208 $ 6,611,295 $ 7,197,036 $ 6,705,091

153

Water

DEPARTMENT MISSION

Our mission is to provide a safe healthful living environment through quality water treatment and distribution.

ACCOMPLISHMENTS OF FY2020

 Completed construction of the Switchgear Project at the Ouachita Water Treatment Plant
 Completed construction and commissioned new 3 MG Cornerstone elevated water storage tank
 Relocated water mains for Arkansas Department of Transportation highway widening projects
 Made improvements to dams at Lakes Sanderson, Bethel and Dillon
 Replaced water mains as identified in Water System Master Plan
 Repainted Industrial Water Tank and installed mixing system
 Installation of mixing system on remaining eight water storage tanks
 Completed prescribed burn of additional acreage adjacent to Lake Ricks
 Constructed access bridge at Lake Bethel
 Set up Backflow Prevention Program in Field Operations

OBJECTIVES FOR FY2021

 Develop district metering zones for the water distribution system
 Update of GIS location of lines, valves, meters and RPZs as data is submitted
 Exercise and maintain 400 water system valves
 Continue leak detection and repair program
 Complete engineering and design; start construction on raw water intake; start construction of new raw

water transmission main; start construction on finish water transmission main; start construction of new
water treatment plant
 Construct FY2021 water main improvements identified in the Water Master Plan

154

Water

ACTUAL AMENDED ESTIMATED BUDGET
2019 2020 2020 2021

OPERATING REVENUES $ 15,746,103 $ 15,731,500 $ 17,096,450 $ 18,709,000
Charges for services
Other operating income 355,662 395,000 362,883 345,000
Intergovermental Revenues
Contributions and Donations 34,460 - 1,449,186 -
Other
Total revenues 227,615 - 1,014,771 -

OPERATING EXPENSES 91,304 45,000 105,426 43,000
Personnel services
Services 16,455,144 16,171,500 20,028,716 19,097,000
Supplies
Reserves 2,589,633 2,402,150 2,435,519 2,451,276
Capital 5,547,560 5,862,902 4,995,980 6,098,126
Depreciation 1,009,145 1,410,678 1,105,986 1,353,090
Total expense
- 125,000 - 125,000
NONOPERATING REVENUES (EXPENSES) - - - -
Investment earnings 3,238,831 3,511,390
Debt service 12,385,169 3,564,300 12,048,875 3,953,020
Total nonoperating revenues 13,365,030 13,980,512
(expenses)
877,600 155,000 462,596 475,000
Income before transfers
Change in net position (1,699,716) (1,435,403) (2,978,307) (4,499,690)
Total net position, beginning of year
Total net position, end of year (822,116) (1,280,403) (2,515,711) (4,024,690)
3,247,859 1,526,067 5,464,130 1,091,798
3,247,859 1,526,067 5,464,130 1,091,798
68,788,783 72,036,642 72,036,642 77,500,772
$ 72,036,642 $ 73,562,709 $ 77,500,772 $ 78,592,570

155

Wastewater

DEPARTMENT MISSION

Our mission is to provide a safe healthful living environment through effective collection and treatment of the City’s
wastewater.

ACCOMPLISHMENTS OF FY2020

Compost Facility Improvements
 Completed stormwater management improvements at Compost
Wastewater Collections Improvements
 Relocated sewer mains for Arkansas Department of Transportation highway widening projects
 Replaced sewer mains as identified in Wastewater System Master Plan
 Reduced Inflow and Infiltration in the Hot Springs Creek Sewer Basin

OBJECTIVES FOR FY2021

Wastewater Collections Improvements
 Relocate sewer mains for ARDOT highway widening projects
 Reduce Inflow and Infiltration in Gulpha Sewer Basin
 Replace truss pipe in Gulpha Sewer Basin
Wastewater Lift Stations
 Continue pump station rebuilds and pump replacements
Wastewater Treatment Improvements
 Install tertiary filter project to increase treatment capacity in high flow situations
 Engineer and design improvements at Davidson Wastewater Treatment Plant (2020 Bonds)

156

Wastewater

ACTUAL AMENDED ESTIMATED BUDGET
2019 2020 2020 2021

OPERATING REVENUES $ 16,669,905 $ 17,033,000 $ 17,263,230 $ 17,676,500
Charges for services 346,895 420,000 365,931 355,000
Other operating income 566,564 - 621,943 -
Contributions and Donations 20,499 20,800 48,853 21,800
Other
Total revenues 17,603,863 17,473,800 18,299,957 18,053,300

OPERATING EXPENSES 4,023,312 3,763,808 3,818,611 3,813,454
Personnel services 4,906,770 5,899,102 5,298,373 5,501,135
Services 1,537,689 1,910,143 1,770,759 1,850,650
Supplies
Reserves - - - -
Capital 1 (1) - -
Depreciation 5,182,700 5,007,710 5,132,097
Total expense 4,800,689 16,755,752 15,895,453 16,297,336
15,268,461
NONOPERATING REVENUES (EXPENSES)
Investment earnings 383,241 105,000 284,149 125,000
Transfers in - - 450,000 -
Intergovernmental - 1,160,468 -
Debt service 107,968 (3,039,499)
Total nonoperating revenues (2,668,967) (2,590,554) (2,720,886)
(expenses)
(2,177,758) (2,485,554) (1,144,882) (2,595,886)
Income before transfers 157,644 (1,767,506) 1,259,622 (839,922)
Change in net position 157,644 (1,767,506) 1,259,622 (839,922)
Total net position, beginning of year
Total net position, end of year 52,665,735 52,823,379 52,823,379 54,083,001
$ 52,823,379 $ 51,055,873 $ 54,083,001 $ 53,243,079

157

THIS PAGE INTENTIONALLY LEFT BLANK

158

INTERNAL SERVICE FUNDS

City of Hot Springs, Arkansas

159

Employee Wellness

DEPARTMENT MISSION

The City of Hot Springs provides self-funded health and dental insurance coverage for its employees. The City
contracts with a consultant to assist in the plan formulation, and a third party administrator to process claims. The
expense of these plans is charged back to the various funds, based on number of employees in each fund. The City
also provides dependent coverage, COBRA, and retiree coverage. The City collects the premiums for this coverage
from the beneficiary. The Employee Wellness Fund (EWF) is managed by the Human Resources Department.

ACCOMPLISHMENTS OF FY2020

 Expenses continue to be controlled; revenues exceeded expenses by $1.4 million, increasing the reserve.
 An employee health fair was held in 2020 and was well attended.
 The EWF provided some support for identifying cases and fighting the coronavirus.

OBJECTIVES FOR FY2020

 Closely monitor the plan usage to assure that the changes are effective.
 Continue to review usage patterns using industry experts and standards to pinpoint any other changes that

should be made.

ACTUAL AMENDED ESTIMATED BUDGET
2019 2020 2020 2021

OPERATING EXPENSES $ 4,015,856 $ 5,113,000 $ 4,220,940 $ 5,212,000
Services
Supplies 16 99,000 98,699 -
Total Expense
$ 4,015,873 $ 5,212,000 $ 4,319,638 $ 5,212,000

160

Fleet

DEPARTMENT MISSION

The Fleet Department is dedicated to providing a safe and serviceable fleet of vehicles and equipment, prepared for
any emergency, while maintaining the highest quality of workmanship and professionalism at a minimum cost to the
citizens of Hot Springs.

ACCOMPLISHMENTS OF FY2020

 Planning and implementation of AWIN radio system project for all non-public safety departments.
 With the retirement of the 30 year shop manager, positive implementation of the succession plan and

returning to a full roster of employees.
 Amid the pandemic, successful implementation of alternative work schedules and cleaning procedures

allowed operations to continue without infecting employees at work.
 Purchases of upgraded shop equipment have increased efficiency and production.

OBJECTIVES FOR FY2021

 Catching up on excess surplus sales to recover residual value of City’s assets and clean out stockpile of
vehicles.

 Include automatic tank level sensors in the City’s fuel tanks with the new fuel contract.
 As funding allows, continue repairs to Fleet Service building to halt further deterioration.

ACTUAL AMENDED ESTIMATED BUDGET
2019 2020 2020 2021

OPERATING REVENUES $ 1,014,932 $ 1,056,126 $ 1,016,672 $ 1,081,223
Charges for services 910 500 1,622 500
Other
Total revenues 1,015,842 1,056,626 1,018,294 1,081,723

OPERATING EXPENSES 869,731 922,540 899,677 948,969
Personnel services 79,370 82,174 71,132 83,344
Services 28,378 41,746 27,982 29,810
Supplies
Capital - - - -
Depreciation 25,767 28,200 19,503 19,600
Total expense 1,003,246 1,074,660 1,018,294 1,081,723

NONOPERATING REVENUES (EXPENSES) 12,596 (18,034) - $ -
Total nonoperating revenues 12,596 (18,034) - -
(expenses) 235,172 247,768 247,768 247,768
$ 247,768 $ 229,734 $ 247,768 247,768
Income before transfers
161
Change in net position

Total net position, beginning of year

Total net position, end of year

Utility Administration

DEPARTMENT MISSION

Our mission is to support Water and Wastewater in providing a safe and healthy living environment for the City of Hot
Springs.

ACCOMPLISHMENTS OF FY2020

 Completed construction of Field Operations’ pole barn
 Identified sources of water lost to leaks resulting in a loss reduction of approximately 5%
 Updated GIS to reflect all new water and sewer projects, meters, valves, RPZs

OBJECTIVES FOR FY2021

 Continue Water Audit to identify unknown leaks and unauthorized usage and reduce loss by another 5%
 Continue update of GIS to reflect new system information

ACTUAL AMENDED ESTIMATED BUDGET
2019 2020 2020 2021

OPERATING REVENUES $ 279,231 $ 350,856 $ 412,186 $ 461,757
Charges for services
Other 30,802 35,001 14,402 11,000
Total revenues
310,033 385,857 426,588 472,757
OPERATING EXPENSES
Personnel services 2,622,181 2,918,527 2,879,098 3,049,188
Services 1,072,548 1,260,911 1,121,489 1,309,773
Supplies
Capital 340,924 488,915 346,244 431,885
Depreciation - - - -
Total expense
157,184 170,300 130,487 128,500
NONOPERATING REVENUES (EXPENSES) 4,192,837 4,838,653 4,477,318 4,919,346
Transfers in
Total nonoperating revenues 3,872,155 4,350,765 4,067,858 4,446,589
(expenses)
3,872,155 4,350,765 4,067,858 4,446,589
Income before transfers
Change in net position (10,649) (102,031) 17,128 -
Total net position, beginning of year
Total net position, end of year (10,649) (102,031) 17,128 -

857,226 846,577 846,577 863,705

$ 846,577 $ 744,546 $ 863,705 $ 863,705

162

Utility Billing Services

(A Division of Utility Administration)

DEPARTMENT MISSION

Our mission is to provide consistent delivery of exceptional customer service to the customers that we serve. The
customer service that we provide is focused on customer satisfaction from the point of new account set up to the
accuracy of our billing and including the maintenance of our customers account(s). The standards that serve as our
guidelines are efficiency and accuracy and to serve our customers with an unwavering dedication

ACCOMPLISHMENTS OF FY2020

 Converted to Sensus Analytics from Sensus Logic software
 Move from 517 Airport Road to new location of 324 Malvern Avenue
 Enhanced H2O Hot Springs project to increase ease of functionality and improve awareness
 Cross-training in Meter Maintenance department
 Created means for continuation of Customer Service department in the event of inability to work on site

OBJECTIVES FOR FY2021

 Begin using Sensus Ally meters in specific locations
 Increase awareness of Auto Draft options for utility bill payments
 Increase awareness of benefits associated with Customer Water Meter Portal
 Incorporate meter testing program

163

DEBT

City of Hot Springs, Arkansas

164

Debt

TOTAL DEBT

The City of Hot Springs uses debt to leverage activities in a number of funds. In 2020, S&P Global Ratings gave the Hot
Springs Wastewater Revenue Refunding and Construction Bonds Series 2020 A & B an A rating. The City has
consistently met or exceeded the required debt coverage for all of its issues. The outstanding balance of all City of Hot
Springs debt as of December 31, 2020 is below:

Fund Type Principal
General Government Notes Outstanding
General Government Special Obligation $ 3,096,762
Water Revenue Bonds
Water Notes 9,005,000
Wastewater Revenue Bonds 132,866,460

Wastewater Notes 8,422,422
83,810,000

11,835

Total $ 237,212,479

GENERAL GOVERNMENT DEBT

General obligation debt is limited by Arkansas statutes. The principal amount of outstanding bonded indebtedness
secured by a tax on real or personal property must be twenty percent (20%) or less of the total assessed value for tax
purposes of real and personal property in the municipality, as determined by the last tax assessment. The City of Hot
Springs has special obligation debt of $9,005,000.

The principal amount of short-term financing obligations must be five percent (5%) or less of the total assessed value
for tax purposes of real and personal property in the municipality, as determined by the last tax assessment. The City of
Hot Springs has $3,096,762 of short-term debt. The calculation of the limit and comparison to actual are below:

Assessed value (in thousands)
Limatation percentage
Total Debt Limit $ 863,658
General Government debt 25%
Net legal debt margin
215,915
12,102

$ 203,813

165

The City issues five-year notes to assist in financing its capital needs for general governmental funds. As of December
31, 2020 there were five different notes outstanding:

2016 Short-term Financing Note – The $1,500,000 promissory note was issued to finance the cost of acquiring police
cars and other vehicles and special purpose equipment for general government operations. In addition, $228,200 was
used to purchase equipment for the wastewater fund. Principal and interest payments (1.55%) are paid monthly.

2017 Short-term Financing Note – The $878,000 promissory note was issued to finance the cost of acquiring police
cars and other vehicles and special purpose equipment for general government operations. Principal and interest pay-
ments (1.70%) are paid monthly.

2018 Short-term Financing Note – The $521,560 promissory note was issued to finance the cost of acquiring police
cars and other vehicles and special purpose equipment for general government operations. Principal and interest pay-
ments (2.759%) are paid monthly.

2019 Short-term Financing Notes – Two notes were issued in 2019. The $1,013,500 promissory note was issued to fi-
nance the cost of acquiring police cars and other vehicles, a street sweeper, and other special purpose equipment for
general government operations. Principal and interest payments (2.75%) are paid monthly. The $1,000,000 promissory
note was issued to finance the cost of purchasing an office building. Principal payments are paid annually, and interest
payments (1.89%) are paid semi-annually.

2020 Short-term Financing Note – The $1,357,700 promissory note was issued to finance the cost of acquiring police
cars and other vehicles, an HVAC system for a recently acquired building, and special purpose equipment for general
government operations. Principal and interest payments (1.76%) are paid monthly.

The 2021 budget assumes that an additional $2,945,950 in debt will be issued to finance police cars, a ladder truck,
various other vehicles and special purpose equipment. The rate is anticipated to be approximately 1.13%, with addi-
tional principal and interest in 2021 being $587,217 and $24,146 respectively.

SPECIAL OBLIGATION DEBT

Hotel and Restaurant Gross Receipts Tax Bonds, Series 2018 - On December 31, 2018 the City issued special obligation
bonds with a face value of $1,575,000. The purpose of the bonds was to finance all or a portion of improvements to
Mid-America Museum. The bonds are not general obligations of the City, but are special obligations payable solely
from collections of the 3% tax levied by the City on the gross receipts or gross proceeds from motels, hotels, restau-
rants, cafes, cafeterias and other similar establishments in the City. The bonds were privately placed with an interest
rate of 3.4% on $1,530,000, and 3.5% on $45,000. Principal payments are due annually on May 1. Interest payments
are due semiannually on May 1 and November 1. For 2019, the principal payment will be $140,000 and the interest
payment will be $47,342. These are paid from unappropriated funds.

Hotel and Restaurant Gross Receipts Tax Bonds, Series 2019 – These 30-year taxable bonds were issued on November
12, 2019 with a face value of $7,875,000 for the purpose of financing all or a portion of the costs of acquiring, con-
structing, furnishing, and equipping a new baseball complex, including new fields, concession area, and restrooms. The
interest rates range from 1.977% to 3.691%. Principal payments are due annually on November 1, and interest pay-
ments are due semiannually on May 1 and November 1.

166

The following chart shows the total outstanding amounts and their required principal and interest payments over time.
This includes the anticipated 2021 debt. General government debt is notes. Special obligation debt is bonds.

General Government Debt Special Obligation Debt

Year(s) of Repayment Principal Interest Principal Interest

2021 $ 1,613,131 $ 78,236 $ 315,000 $ 300,529

2022 1,418,088 58,389 320,000 292,068

2023 1,299,893 35,605 335,000 283,398

2024 1,116,924 16,508 345,000 274,148

2025 594,676 3,360 350,000 264,433

2026-2030 1,535,000 1,163,639

2031-2035 1,175,000 963,661

2036-2040 1,400,000 747,998

2041-2045 1,660,000 476,143

2046-2049 1,570,000 147,641

$ 6,042,712 $ 192,099 $ 9,005,000 $ 4,913,658

ENTERPRISE FUND DEBT

Notes Payable

WATER – In 2017, the city purchased an allocation of water stored in Lake Ouachita (a nearby lake) in order to supply
water needs for the future. The allocation came from the U.S. Army Corps of Engineers and their agreement is with the
Mid-Arkansas Water Alliance (MAWA). The City contracted with MAWA for 23 million gallons per day, 76.67% of the
total 30 million gallons per day purchased by MAWA. In exchange the City executed a 30-year note with MAWA in the
amount of $9,534,832 at an interest rate of 2.5%. Principal and interest payments are due annually. The 2021 debt
service includes $228,176 in principal and $216,268 in interest.

WASTEWATER – In 2016, the note that was issued for general government capital also included $228,200 to finance
Wastewater improvements. The 2021 debt service includes $11,835 in principal and $31 in interest.

The following chart shows the total outstanding amounts and their required principal and interest payments over time.

Wastewater Notes Payable Water Notes Payable

Year(s) of Repayment Principal Interest Principal Interest

2021 $ 11,835 $ 31 $ 233,880 $ 210,561

2022 239,727 204,714

2023 245,720 198,720

2024 251,863 192,577

2025 258,160 186,281

2026-2030 1,390,897 831,308

2031-2035 1,573,673 648,530

2036-2040 1,780,466 441,737

2041-2045 2,014,434 207,769

2046-2050 433,602 10,840

$ 11,835 $ 31 $ 8,422,422 $ 3,133,037

167

Revenue Bonds

The City has a number of revenue bond issues that fund Water and Wastewater activities. They are as follows:

WATER – The City has six outstanding issues in its Water Fund, totaling $132,866,460 as of December 31, 2020. The
final payout will be in 2050. The following chart shows the total outstanding amounts and the required principal and
interest payments over time:

Year(s) of Repayment Principal Interest Total
$ 4,448,396 $ 5,759,572
2021 $ 1,311,176
4,415,519 5,764,498
2022 1,348,979 4,381,667 7,703,801
4,288,068 7,918,718
2023 3,322,134 4,183,949 7,928,491
19,166,234 39,666,229
2024 3,630,650 15,363,279 37,502,263
10,804,970 36,364,970
2025 3,744,542 5,778,982 31,468,982
2,151,738 27,771,738
2026-2030 20,499,995 $ 74,982,802 $ 207,849,262

2031-2035 22,138,984

2036-2040 25,560,000

2041-2045 25,690,000

2046-2050 25,620,000

Total $ 132,866,460

Waterworks Revenue Improvement Bond Series 2010A - These bonds have a face value of $5,500,000 and were
issued for the purpose of acquiring and constructing an automated meter infrastructure (AMI) system. The interest
rate is 0%; however, a servicing fee of 1% annually is assessed. Principal and interest payments are due semiannually
on April 15 and October 15. Principal payments began in April 2014. The funding was obtained through a program
provided by the State of Arkansas Department of Environmental Quality.

Waterworks Revenue Improvement Bond Series 2010B - These bonds have a face value of $4,966,876 and were issued
for the purpose of acquiring and constructing an automated meter infrastructure (AMI) system. The interest rate is
2.25% and a servicing fee of 1% annually is also assessed. Principal and interest payments are due semiannually on
April 15 and October 15. Principal payments began in April 2014. The funding was obtained through a program
provided by the State of Arkansas Department of Environmental Quality.

Waterworks Revenue Bonds Series 2015 - These 25-year bonds were issued on November 24, 2015 with face value of
$8,035,000 for the purpose of financing betterments to the Ouachita Water Treatment Plant and the Lakeside Water
Treatment Plant and the acquisition, installation, and equipping of additional water storage tanks. The interest rates
range from 2% to 3.9%. Principal payments are due annually on October 1, and interest payments are due
semiannually on April 1 and October 1.

Waterworks Revenue Bond Series 2018 – These 25-year bonds were issued on May 8, 2018 with a face value of
$20,175,000 for the purpose of (a) financing improvements to the Ouachita Water Treatment plant, (b) dam
improvements to Ricks, Sanderson, Bethel, and Dillon Lakes, (c) a new elevated water storage tank and related water
mains and (d) a new water intake structure at Lake Ouachita, a raw water intake line between the new water intake
and water treatment plant, a new water treatment plant and water line infrastructure to transfer the treated water in
the system (the Lake Ouachita Project). The interest rates range from 2% to 4%. Principal payments are due annually
on October 1, and interest payments are due semiannually on April 1 and October 1.

Waterworks Revenue Refunding Bonds Series 2019 – These 20-year bonds were issued on September 3, 2019 with a
face value of $5,370,000 for the purpose of refunding Waterworks Revenue Refunding and Construction Bonds Series

168

2014. The Series 2014 bonds were issued to refund Series 2003 bonds and fund a portion of the Lake DeGray
preliminary design project and Ouachita Water Treatment Plan improvements. The interest rate is 3%. Principal
payments are due annually on October 1, and interest payments are due semiannually on April 1 and October 1.

Waterworks Revenue Bonds Series 2020—These bonds were issued on July 23, 2020 with a face value of $100,450,000
for the purpose of constructing a new water supply system consisting of an intake, new water treatment plant, raw and
finished water lines to transport the water, and additional water storage infrastructure and associated transmission
mains. The interest rates range between 2.625% and 4% . Principal repayments are due annually on October 1,
starting in 2023, and interest payments are due semiannually on October 1 and April 1.

WASTEWATER – The City has three outstanding issues in its Wastewater Fund, totaling $83,810,000. The final payout
will be in 2050. The following chart shows the total outstanding amount and the required principal and interest
payments over time:

Year(s) of Repayment Principal Interest Total
$ 2,422,406 $ 5,337,406
2021 $ 2,915,000
2,366,176 5,341,176
2022 2,975,000 2,307,183 5,347,183
2,233,926 5,348,926
2023 3,040,000 2,155,486 5,350,486
9,443,375 25,118,375
2024 3,115,000 7,158,052 22,768,052
4,723,097 17,608,097
2025 3,195,000 2,831,093 14,166,093
1,097,251 14,162,251
2026-2030 15,675,000 $ 36,738,045 $ 120,548,045

2031-2035 15,610,000

2036-2040 12,885,000

2041-2045 11,335,000

2046-2050 13,065,000

Total $ 83,810,000

Wastewater Revenue Bonds Series 2013 - These bonds were issued on December 30, 2013, with a face value of
$40,275,000 for the purpose of making certain improvements to the wastewater collection system. This bond issue is
to finance Phase II of the improvements needed to assist the City in meeting EPA requirements identified when the
Wastewater Revenue Bonds Series 2009 were issued. The interest rates range from 2% to 5%. Principal payments are
due annually on December 1, and interest payments are due semiannually on June 1 and December 1.

Wastewater Revenue Bonds Series 2016 - These bonds were issued on September 13, 2016, with a face value of
$8,385,000 for the purpose of refunding Sewer Revenue Bonds Series 2005 and 2006 and for making improvements to
the Regional Wastewater Treatment Plant. The interest rates range from 2% to 2.3%. Principal repayments are due
annually on December 1, and interest payment are due semiannually on June 1 and December 1.

Wastewater Revenue Refunding Bonds Series 2017 - These bonds were issued on August 8, 2017, with a face value of
$24,550,000 for the purpose of refunding the Wastewater Revenue Bond Series 2009. The original bonds were issued
to fund needed improvements to address a consent administrative order by the Environmental Protection Agency
(EPA) due to chronic overflows and treatment bypasses during heavy rainfall events. The interest rates range from 2%
to 4%. Principal payments are due annually on December 1, and interest payments are due semiannually on June 1
and December 1.

169

Wastewater Revenue Refunding and Construction Bonds, Taxable Series 2020A—These bonds were issued on July 20,
2020 with a face value of $38,045,000 for the purpose of advance refunding the City's 2013 Wastewater Revenue
bonds and paying the costs of issuing the Series 2020A bonds, including bond insurance and surety bond premiums.
The interest rates range between 1% and 3.48%. Principal repayments are due annually on December 1, and interest
payments are due semiannually on December 1 and June 1.
Wastewater Revenue Refunding and Construction Bonds, Construction Series 2020B—These bonds were issued on
July 20, 2020 with a face value of $18,615,000 for the purpose of funding improvements to the City's wastewater
system and paying the costs of issuing the Series 2020B bonds, including bond insurance and surety bond premiums.
The interest rate is 2.75%. Principal repayments are due annually on December 1, starting in 2043, and interest
payments are due semiannually on December 1 and June 1.

170

THIS PAGE INTENTIONALLY LEFT BLANK

171

CORNERSTONE WATER TANK

Completed in 2020

172

STATISTICS

City of Hot Springs, Arkansas

173

STATISTICS

Hot Springs, Arkansas

Demographics 39,111
45.6%
Population 54.4%
Male
Female 37,961
Per Capita Income 42
Median Age
Number of Households 20,511
Cost of Living Index 82

Low, Average in U.S. is 100

Geographic January 10, 1851
City Manager
Date of Incorporation 35.02
Form of Government A
Land Area (Square Miles)
Bond Rating

Education 87.0%
19.5%
High School graduate or higher 17,866
Bachelor's degree or higher
School Enrollment

Business 4,368

Numbers of Business 1,700
Top 10 Employers 1,275

CHI St. Vincent 900
Oaklawn Casino Racing Resort 810
National Park Medical Center 632
467
Wal-Mart (5 stores) 431
City of Hot Springs 400
Hot Springs School District 400
385
Garland County
National Park College
StarTek Marketing Services

Radius Aerospace

174

APPENDICES

City of Hot Springs, Arkansas

175

APPENDIX A | THE HISTORY OF HOT SPRINGS

Hot Springs, Arkansas takes its name from the world-famous thermal waters that flow into
the historic downtown district of the city. About a million gallons of the 143°F water issue
forth daily from 47 hot springs. The City of Hot Springs is the only American city nestled
within a national park. Hot Springs National Park was established in 1921. It was first set
aside as the nation’s first National Reservation in 1832, due to the need for federal
protection of the hot springs.

For 10,000 years before the settlement of the Europeans in the New World, Native
Americans visited the area. Hot Springs became a place where various tribes came together
to enjoy the healing properties they believed were contained in the magnificent and
mysterious thermal waters of the springs.

In 1673, Father Jacques Marquette and Louis Joliet explored the area and discovered the springs before claiming the
area for France. After the French and Indian War ended with the signing of the Treaty of Paris in 1763, the area came
under Spanish rule. In 1800, control of the land went to Napoleon’s French Empire before President Thomas Jefferson
bought the land in the Louisiana Purchase of 1803, doubling the size of the United States. In 1818, Quapaw Indians
ceded the land to the United States during a treaty signing in St. Louis, Missouri.

Hot Springs’ population severely declined due to the American Civil War (1861-1865). Most residents moved to Texas
and Louisiana and stayed there until the war ended. In 1862, after the Union won the Battle of Pea Ridge in northern
Arkansas, Confederate Governor Henry Rector feared that the capital city of Little Rock would soon be captured by the
Union. Accordingly, he moved his staff from Little Rock to Hot Springs. Because the Union Army did not attack Little
Rock, Governor Rector moved the state government back to the capital city, only to have Little Rock succumb to the
Union in September 1863. Afterwards, Hot Springs became a battleground for guerrilla bands loyal both to the Union
and the Confederacy. These bands pillaged and burned the abandoned town until only a handful of buildings were left
standing.

After the Civil War ended, the city underwent a construction boom of bathhouses and hotels. The population quickly
increased to 1,200 by 1870. By 1873, six bathhouses and twenty-four hotels were built. In 1874, a multi-millionaire
from Chicago, Illinois built a railroad that ran from Hot Springs to Malvern, Arkansas. This railroad attracted many
people to Hot Springs. In 1875, an entrepreneur from Ohio named Samuel Fordyce built the Arlington Hotel, the first
luxury hotel in Hot Springs.

In 1913, a fire broke out on Church Street that raced toward the business section of the city, destroying the Ozark
Sanitarium. It also destroyed the utilities plant and the resulting water supply for the firefighters. A strong wind
brought the fire to Ouachita Avenue, leveling the Garland County Courthouse. Firefighters were able to save Central
Avenue, including the bathhouse and many hotels, through the desperate use of dynamite. Firefighters from Little Rock
and other Arkansas towns arrived to find that the fire had destroyed 60 blocks of Hot Springs, with estimated damages
of $10 million. In World War II, an Army-Navy hospital was built in 1942, where the thermal baths of Hot Springs were
used to rejuvenate the soldiers waiting to return to duty. This building now operates as the Arkansas Rehabilitation
Center, a downtown landmark.

The City of Hot Springs has had many notable residents throughout the city’s interesting history, the most famous of
which is former President Bill Clinton, who spent his boyhood here and attended Hot Springs High School. To learn
more about Hot Springs history, visit the Fordyce Bathhouse & Visitor Center on Bathhouse Row in downtown Hot
Springs, or visit the Garland County Historical Society Archives, 328 Quapaw Avenue.

176

APPENDIX B | THE BUDGET CALENDAR

 September 7, 2020—Budget module available for budget entry
 September 11, 2020—Personnel cost calculated
 September 27, 2020—Operating budgets, CIP, and personnel ex-

pense entered into system
 September 28-October 9, 2020—Budget meetings with department

heads
 October 12-16, 2020—City Manager review
 October 19-23, 2020—Compile budget
 October 27, 2020—Board work sessions
 December 1, 2020—Budget goes to Board for adoption

177

APPENDIX C | THE BUDGET PROCESS

1. Budget preparation begins with a review of the five year capital plan. Department heads meet with the City
Manager and the Finance Director to discuss the planned capital for the upcoming budget year and to make
adjustments as needed. Capital expenditures are added to update the fifth year of the plan. The capital plan may
be adjusted during the formal budget process as the Board of Directors decides on new levels of service.

2. The Finance Director submits revenue projections to the City Manager for the next fiscal year. The Finance
Director, Deputy City Manager and City Manager meet to review the projections and make initial adjustments.

3. An informal work session is held with the Board of Directors to obtain direction for the next year's budget.
Directors explain their desires for changes in the level of services currently provided and prioritize new projects
they would like to include.

4. The City Manager meets with department heads to discuss the budget process and provide staff direction for
budget development. The finance department provides electronic budget worksheets to department heads that
include the current year's budget and year-to-date expenditures. Salary and benefit budgets for each department
are calculated by the Human Resources Director and included in the worksheet. A deadline is established by which
completed budgets must be submitted to Finance. Each department enters their request for the upcoming fiscal
year and prints worksheets for submission with a packet of information related to their requests.

5. The City Manager, Deputy City Manager, Finance Director and Human Resources Director meet with department
heads over the next two weeks to discuss the budget submissions. Department heads justify questioned line items.
As revisions are made to the department head's requests, a fourth column is added to the budget worksheet
entitled "City Manager's Proposed Budget".

6. After all departments have been heard, the City Manager, Deputy City Manager, Finance Director, and Human
Resources Director work to balance the budget. Salary lines are adjusted available increases. Department heads
may be recalled to assist in the balancing process.

7. Work sessions are held with the Board of Directors, department heads and city staff to review the City Manager's
balanced budget. As agreement is reached on funding issues, the budget is amended.

8. The Finance Director and the Finance department work to produce the final budget document.

Budget Amendment Process

Budget amendments, or appropriations transfers, may be made at anytime during the year. Based on the type of
transfer, it will require different levels of approval. This is discussed in detail in Appendix D, Financial Policies.
Budget transfers take place throughout the year. The majority of budget transfers fall under the City Manager approval
process. Those appropriation transfers that require Board approval are submitted to the Board of Directors to be
approved by resolution

178

APPENDIX D | FINANCIAL POLICIES

PURPOSE

The following guidelines are hereby established to assist management and the Board of Directors when making
financial decisions about the future of Hot Springs. In this manner the Board of Directors are will be able to view the
present approach to financial management from an overall, long-range vantage point.

Many financial policies have been established in various written documents over the years. Consolidating these
policies into one document avoids conflicting, inconsistent or incomplete policies

OPERATING BUDGET POLICIES

The City of Hot Springs will use a decentralized operating budget process. All departments will be given an opportunity
to participate in the budget preparation. Once the budget is adopted, each department is responsible for controlling
expenses so that the budget is not exceeded.

Annual fixed budgets will be adopted for all operating funds. The budget must be balanced for all budgeted funds.
Total anticipated revenues plus that portion of beginning fund balance in excess of the required fund balance reserve
must equal total estimated expenditures for all budgeted funds.

The city will attempt to maintain an unreserved fund balance in the general fund to pay expenditures caused by
unforeseen emergencies and for cash flow purposes. The unreserved fund balance shall be maintained at an amount
which represents about 16.5% of annual operating expenses.

All appropriations lapse at year-end. Any encumbered appropriations for major capital projects and capital assets at
year-end may be re-appropriated by the Board of Directors in the subsequent year.

The city will include an amount in each fund for unforeseen operating expenditures to be known as appropriated
reserve. The amount of the appropriated reserve will be no more than 2% of the operating budget or $300,000,
whichever is less.

All budgets shall be adopted on a basis consistent with generally accepted accounting principles as promulgated by the
Governmental Accounting Standards Board. Revenues are budgeted when they become measurable and available and
expenditures are charged against the budget when they become measurable, a fund liability has been incurred, and
that liability will be liquidated with current resources.

The appropriated budget is prepared by fund, department, and major classification, which is the legal level of control.
The Finance Director may make transfers between individual line items in a major classification (i.e., supplies to
supplies) in the same department and fund. Transfer from one major classification to another and transfers from one
department to another within the same fund must be approved by the City Manager. Transfers between funds require
the approval of the Board of Directors; however, the City Manager may make transfers from the General Fund into the
Police Fund, Fire Fund, and Street Fund, provided the transfers are in compliance with local, state, and federal
regulations.

The Finance Department will maintain a budgetary control system to ensure adherence to the budget and will prepare
timely expenditures and encumbrances with budgeted amounts.

No new or expanded services shall be implemented without implementing trade-offs of expenses or revenues at the
same time. This applies to personnel, equipment and any other peripheral expense associated with the service.

The enterprise operations of the City are to be self-supporting; i.e. current revenues will cover current expenditures,
including debt service and depreciation expense. The amount budgeted for capital improvements and fixed assets will

179

not exceed the amount that current budgeted revenues exceed current budgeted expenditures plus budgeted
depreciation expense.

The City will maintain its physical assets at a level adequate to protect the City's capital investment and minimize future
maintenance and replacement costs. The budget will provide for the adequate maintenance and the orderly
replacement of the capital plan and equipment from current revenues where possible.

The City will recover indirect costs from all grants, contracts and reimbursements where allowable and appropriate.
The plan for cost recovery shall be in accordance with generally accepted accounting principles.

DEBT SERVICE POLICY

The debt service policy approved by the Board of Directors provides guidelines to utilize debt financing to provide
needed capital equipment and infrastructure improvements while minimizing the impact of debt payments on current
revenues.

Debt financing includes general obligation bonds, revenue bonds, lease purchase agreements, and other obligations
permitted under Arkansas statutes.

The City will not assume general purpose debt without conducting an objective analysis as to the community's ability to
assume and support additional debt. When appropriate, self supporting revenue bonds shall be issued before general
purpose debt.

Generally accepted standards of affordability will be compared to the current values for the City. These standards
include debt per capita, debt as a percent of taxable value, debt service payments as a percent of current revenues and
expenditures, and the level of overlapping net debt of all local taxing jurisdictions. The City will strive to achieve and
maintain these standards at a low to moderate classification. To issue new revenue bonds, projected revenues shall be
a minimum of 125% of the average annual debt service.

The overall structure of a fund's debt should approximate level debt service with no balloon repayment due at the end
of the term. The useful life of an asset acquired with debt financing shall equal or exceed the average principal
maturity. Call provisions shall be as short as possible with the lowest interest costs to the City.

The City prefers to use a competitive process in the sale of bonds, unless the nature of the issue warrants a negotiated
sale. The City will attempt to award bonds based on a true interest cost (TIC) basis.

Opportunities to obtain interest savings by refunding outstanding debt will be monitored.

As a general rule, the present value savings of a particular refunding should exceed 5% o the refunded maturities.

The use of lease purchase agreements for the acquisition of capital assets may be used for items that cost $100,000 or
more.

The Board of Directors approved a formal investment policy to maximize interest earnings while maintaining adequate
cash flow for all City funds.

INVESTMENT POLICY

Investments will be made within the constraints of applicable state laws and under the prudent man rule considering
the probable safety of the capital as well as the probable income.

Investments are limited to direct obligations of the United States of America and certificates of deposit. Investments
will be purchased only from financial institutions which are authorized to do business in the State of Arkansas and
which have offices located within the corporate city limits of the City of Hot Springs or directly from the U. S. Treasury
through the Federal Reserve Bank. Certificates of Deposit will be purchased only from banks with which the City has a
collateral agreement. The City may require that safekeeping procedures include third party custodial agreements.

180

The Treasurer may request verbal or written quotes from participating financial institutions. A bid sheet must be
prepared documenting the purchase date, type of investment, investment amount, maturity date, and interest rate
bid by each participating financial institution. Bids will be accepted based on the highest effective yield. The effective
yield calculation will include the amount, frequency of payment and reinvestment of interest to maturity. The
reinvested interest calculation will assume a rate of interest equal to the interest rate of the security.
In the case of tie bids, the institution holding the least investment funds of the City will be chosen. If that factor also
results in a tie, the institution holding the least non-investment funds of the City will be chosen.
Copies of the completed bid sheet, signed by the Treasurer, will be distributed to the City Clerk and to each
participating financial institution that submitted a bid on that investment.

CAPITAL ASSETS

The City will set a threshold of $5,000 and a minimum life of two years for capitalization of fixed assets in accordance
with the recommended practices established by the Governmental Finance Officers Association (GFOA). The financial
accounting for fixed assets does not relieve department heads from the responsibility of controlling materials and
equipment that are valued under $5,000.

181

APPENDIX E | GLOSSARY OF TERMS & ACRONYMS

A Assessed Valuation A valuation set upon real estate
or other property by a government as a basis for
Accounts Payable A liability account reflecting levying taxes.
amounts on open account owing to private
persons or organizations for goods and services B
received by a government (but not including
amounts due to other funds of the same Balance Sheet The basic financial statement which
government or to other governments). discloses the assets, liabilities and equities of an
entity at a specified date in conformity with GAAP.
Accounts Receivable An asset account reflecting
amounts owing to open accounts from private Board of Directors The seven elected Board members
persons or organizations for goods and services who form the City’s governing body.
furnished by a government.
Bond A written promise to pay a specified sum of
Accrual A basis of accounting whereby transactions money, called the face value or principal amount,
and events are recognized when they occur, at a specified date or dates in the future, called the
regardless of when cash is received or paid. maturity date (s), together with periodic interest at
a specified rate.
Advalorem Latin for value of. Refers to the tax
assessed against real (land and buildings) and Budget A plan of financial operation embodying an
personal (equipment and furniture) property. estimate of proposed expenditures for a given
period and the proposed means of financing them.
AEDC Acronym for Arkansas Economic Development
Corporation, a state agency that provides low cost Budget Amendment A legal procedure utilized by the
financing for developing business and industry in Board of Directors and the City Manager to revise
the State of Arkansas. a budget appropriation.

AHTD Arkansas Highway and Transportation Budget Calendar A schedule of key dates which City
Department officials follow in the preparation adoption and
administration of the budget.
APERS Acronym for Arkansas Public Employee
Retirement System. It is a cost-sharing, multiple Budget Message The opening section of the budget
employer, defined benefit pension plan which provides the Mayor, Board of Directors and
established by the Arkansas General Assembly to the public with a general summary of the most
provide retirement benefits for eligible employees important changes from the current and previous
and elected officials of state and local fiscal years, and the views and recommendations
governmental entities in Arkansas. of the City Manager.

Appropriation A legal authorization granted by a C
legislative body (Board of Directors) to make
expenditures and incur obligations for designated Capital Equipment Generally, equipment with a value
purposes. greater than $5,000 and an expected life of more
than one year
Arbitrage The interest earnings derived from invested
bond proceeds or debt service fund balances. Capital Improvement Program (CIP) A financial plan
for construction of physical assets such as streets,
bridges, buildings and recreational facilities.

182

Capital Outlay The portion of the annual operating Current Liabilities Debt or other legal obligation
budget that appropriates funds for the purchase of arising out of transactions in the past which must
long-lived items often separated from regular be liquidated, renewed or refunded within one
operating items such as personal, supplies, and year.
maintenance and contractual. The capital budget
includes funds for purchases such as furniture, D
vehicles, machinery, building improvements, data
processing equipment and special tools, which are DARE Acronym for Drug Awareness Resistance
usually distinguished form operating items Education. A program presented by police officers
according to their value and projected useful life. in local schools to educate children about drug
use.
CAPS Acronym for Clean Attractive Property Service.
A service included in the base fee, whereby the Debt Service The payment of principal and interest
Sanitation department will pickup heavy bulky on borrowed funds such as bonds.
items from citizen’s homes.
Depreciation The decrease in value of physical assets
CBID Central Business Improvement District. An due to use and passage of time.
improvement district formed in the historical
section of downtown Hot Springs to tax E
themselves to provide infrastructure
improvements. EDA Economic Development Agency.

Contingency/Reserve Balance The amount of funds Encumbrances Commitments related to unperformed
required to be reserved in each fund to meet contracts for goods or services used in budgeting.
unexpected claims and emergency type purchases. Encumbrances are not expenditures or liabilities,
but represent the estimated amount of
Cost The amount of money or other consideration expenditures ultimately to result if unperformed
exchanged for property or services. Costs may be contracts in process are completed.
incurred even before money is paid; that is, as
soon as liability is incurred. Ultimately, however, Enterprise Fund A fund established to finance and
money or other consideration must be given in account for the acquisition, operation, and
exchange. maintenance of governmental facilities and service
which are entirely or predominantly self-
CPI Acronym for consumer price index. A statistical supporting by user charges.
description of price levels provided by the U.S.
Department of Labor. The index is used as a Exempt Personnel not eligible to receive overtime
measure of the increase in the cost of living. pay and who are expected to put in whatever
hours are necessary to complete their job
Current Assets Those assets which are available or assignments. Compensatory time off, as partial
can be made readily available from current compensation for overtime hours worked, may be
operations or to pay current liabilities. Those allowed by the respective department head.
assets which will be used up or converted into cash
within one year. Some examples are cash, Expenditures Decreases in net financial resources
temporary investments and taxes receivable which under the current financial resources
will be collected within one year. measurement focus, and pertains to payment of
normal operating costs and encumbrances.
Expenditures are measured according to
governmental accounting rules.

183

Expenses The cost of doing business in a proprietary Funding Source Revenue Plus the prior year’s
organization, and can be either direct outflows or unencumbered fund balance/ working capital.
the using up of an asset such as the depreciation of
capital assets. G

F GAAP Acronym for Generally Accepted Accounting
Principles, Uniform minimum standards and
FAA Federal Aviation Administration. guidelines for financial accounting and reporting
that govern the form and content of financial
FBO Acronym for fixed base operations. Refers to Hot statements. They encompass the conventions,
Springs Municipal Airport. rules, and procedures necessary to define
accepted accounting practice at a particular time.
FEMA Federal Emergency Management Agency. A
federal agency that provides disaster relief. GASB Acronym for Government Accounting Standards
Board, the body that promulgates accounting
Fiscal Year A 12-month period to which the annual standards for Government.
operating budget applies and at the end of which a
government determines its financial position and General Fund A fund used to account for all
the results of its operations. The City of Hot transactions of a governmental unit that are not
Springs fiscal year begins each January 1st and accounted for in another fund, such as police and
ends the following December 31st. The fiscal year fire services.
for municipalities is set by Arkansas State Statue.
General Ledger A book, file or other device which
Fixed Assets Assets of a long-term character which are contains the accounts needed to reflect the
intended to continue to be held or used, such as financial position and the results of operations of
land, buildings, improvements other than an entity. In double entry bookkeeping, the debits
buildings, machinery and equipment. and credits in the general ledger are equal;
therefore the debit balances equal the credit
Franchise A special privilege granted by a government balances.
permitting the continuing use of public property,
such as city streets, and usually involving the General Obligation Bonds Bonds for the payment of
elements of monopoly and regulation. which the full faith and credit of the issuing
government are pledged. Bonds cannot be issued
Full-Time Equivalent (FTE) Number of staff positions without voter approval and are usually issued with
calculated on the basis that one FTE equates to a maturities of 15 and 30 years.
40 hour work week for twelve months.
GFOA Government Finance Offers Association
Fund A fiscal and accounting entity with a self- promotes the professional management of
balancing set of accounts recording cash and other governments for the public benefit by identifying
financial resources, together with all related and developing financial policies and best practices
liabilities and residual equities or balances, and and promoting their use through education,
changes therein, which are segregated for the training, facilitation of member networking, and
purpose of carrying on specific activities or leadership.
attaining certain objectives in accordance with
special regulations, restrictions or limitations.

Fund Balance The difference between governmental
fund assets and liabilities, also referred to as fund
equity.

184

Governmental Funds Those funds through which M
more governmental functions typically are
financed. The acquisition, use and the related MDT Mobile Data Terminals
current liabilities are accounted for through
governmental funds (General, Special Revenue, Modified Accrual A basis of accounting whereby
Capital Projects and Debt Service Funds). revenues are recognized when they become both
measurable and available. Expenditures are
Grant Contribution by one government unit or recognized when they become measurable.
funding source to another unit. The contribution is
usually made to aid in a part of a specified MUTCD Acronym for Manual on Uniform Traffic
function, but is sometimes available for general Control Devices.
purposes.
N
Grant Match City funds, private funds, or in-kind
services required to be contributed or raised by Net Current Assets Current assets less current
the receiving entity for the purpose of matching liabilities
funds obtained from Federal and State Grant
Programs. Net Position the residual of all other elements
presented in a statement of financial position. The
H term incorporates deferred outflows of resources
and deferred inflows of resources as defined by
Hotel/Motel Tax A tax assessed upon hotel/motel GASB Statement No. 63 into the definitions of the
establishments within the City based upon required components of the residual measure and
occupancy. The Tax is presently three percent of by renaming that measure as net positions, rather
room rates. than net assets.

I Non-Departmental Expenditure/Expense items of a
particular fund which do not relate directly to an
I & I Acronym for infiltration and inflow. A situation operating program.
where storm water enters the sewer system.
Non-exempt Personnel eligible to receive overtime
IMC Acronym for International Institute of Municipal pay when overtime work has been authorized or
Clerks. requested by the supervisor.

Intergovernmental Revenues Revenues received from O
other governments including the federal, state and
county governments. Operating Expenses Recurring costs required to
provide a service or maintain operation.
ISO Acronym for Insurance Services Office, which
provides public protection classifications ratings of Operating Revenues Regular and recurring sources of
community fire suppression capabilities. income for an entity.

L

LOPFI Acronym for the Arkansas Local Police and Fire
Retirement System. It is a statewide retirement
plan for police officers and fire fighters of Political
subdivisions of the State of Arkansas. The City of
Hot Springs is a participant in this plan.

185

Ordinance A formal legislative enactment by the Special Revenue Fund A fund used to account for the
governing board of municipality. If it is not in proceeds of specific revenue sources that are
conflict with any higher form of law, such as a state legally restricted to expenditure for specified
statute or constitutional provision, it has the full purposes.
force and effect of law within the boundaries of the
municipality to which it applies. The difference State Tax Turnback The State of Arkansas returns a
between an ordinance and a resolution is that the portion of its tax receipts to incorporated cities
latter requires less legal formality and has a lower within the state. Certain turnback revenues may
legal status. be used for general purposes, while other
turnback funds are restricted to street
P improvements.

Personnel Services The costs associated with Supplies A cost category for minor items (individually
compensating employees for their labor. priced at less than $500)required by departments
to conduct their operations.
Program An operating unit within a division of the City
organizational structure. Each program represents T
a specific type of activity within its division aimed at
providing a service for which the City is responsible. Taxes Compulsory charges levied by a government for
the purpose of financing services performed for
Purchase Order A document which authorizes the the common benefit. This term does not include
delivery of specified merchandise or the rendering specific charges made against particular persons or
of certain services and the making of a charge for property for current or permanent benefits such as
them. special assessments. Neither does the term include
charges for services rendered only to those paying
R such charges, for example, sewer service charges.

Revenues Increase in governmental fund type net U
current assets from other than expenditure refunds
and residual equity transfers. Unencumbered Balance The amount of an
appropriation which is neither expended nor
Revenue Bonds Bonds which are secured by a pledge encumbered and is available for future use.
of revenues generated by the operation of the
system for which the bonds were issued. The W
bonds do not constitute a charge against the
general credit or taxing power of the government. Working Capital An amount calculated by subtracting
current liabilities from current assets. An indicator
S of the liquidity of an entity.

SCADA A technology of automatic radio transmissions
of data from a remote source to a receiving station
for recording and analysis. Used in providing a
monitoring mechanism for water and sewer
systems.

Services The costs related to services performed for
the City by individuals, business or utilities.

186

THIS PAGE INTENTIONALLY LEFT BLANK

187

APPENDIX F | BOARD 2021 SMART GOALS

specific

Development agreement negotiated and executed in 2020

actions Pre-Construction and Programming phases (set schedule for Planning Commission and Develop-
ment Review approvals)

provide quarterly updates) Contractor and staff will

188

specific

Project Manager/Staff will provide quarterly update through Gantt chart review and analysis.

measurable

Ensure resources and subsequent approvals and bids are in place and meeting the projected time
frame.

actions

(2)

189

2021 Goal: Street Paving/Roadway Improvements

specific
measurable

actions

Approval as part of the Board’s Adopted 2021 Budget (December 2020)

190

2021 Goal: Malvern Avenue Project Continuation

specific
measurable

actions

December 2020 approval, with 2021 completion.

191

2021 Goal: Homeless Services

specific
measurable

actions

End of December 2020-2021

192

THIS PAGE INTENTIONALLY LEFT BLANK

193

APPENDIX G | CITY MANAGER ACCOMPLISHMENT OF

BOARD GOALS FOR 2020

2020 Goal: Water Supply

This goal has been complete. On June 16, 2020, the Board of Directors passed Ordinance No. 6335, pursuant to the
parameters Ordinance No. 6333, issuing $110,000,000 in Waterworks Revenue Bonds. These bonds will provide
funding to construct the new water supply assets, specifically the intake structure, water plant, raw water main and
potable water main. In addition to the goal of securing the funding source, staff has continued to work on the water
supply project. We have secured many of the permits necessary from the Corps of Engineers, attained several
easements needed for the raw and potable water mains, contracted two water main construction projects($4.8 million
and $4.4 million), completed preliminary design of the water plant, and will soon let the RFP for the Design-Build of the
Lake Ouachita intake structure. Most recently, the Board passed a resolution awarding a contract to Crist Engineers,
Inc. for construction management and inspection services relating to the Lake Ouachita Water Supply Project Task
Order No. 28 of the Master Services Agreement. Funding for this contract, which will be a lump sum of $2,555,100, will
be from the 2020 Water Bond funds. The funds will be broken down into three projects: raw water transmission line,
$1,194,300 of the estimated $36,746,153 total; water treatment plant, $804,400 of the estimated $24,750,000 total;
and finished water transmission line, $556,400 of the estimated $17,118,375 total.

2020 Goal: Majestic Property

Staff developed an RFP using the Board of Director’s Guiding Values and the Majestic Site Market Study completed by
Design Workshop in January 2020. The guiding values stated in Resolution No. 9067 include:

1. Enhance economic opportunities

2. Improve the local quality of life and enhance the visitor experience

3. Celebrate the natural wonder of the thermal waters

4. Respect the arts, culture and history of Hot Springs.

The initial RFP was scheduled to open March 30. However, it was extended to April 30 due to the COVID-19 pandemic.
There was much interest in the Majestic site RFP leading up to the opening, but only two submittals were received.
Both proposals were declared non-responsive. The second RFP opened on July 10, 2020. Again there was significant
interest in the RFP, but again only two submittals were received. One of the submittals was a complete proposal and
the second was a letter of interest, but non-responsive to the requested information. The complete submittal was
declared responsive to all sections of the RFP. The intended outcome of the RFP process is the development of an
Exclusive Right to Negotiate Agreement that will establish terms and conditions (lease price, development programs,
financing plan, and development schedule) and further development of the Project. The Developer selected for
consideration under this RFP will enter into a period of exclusive negotiations with the City of Hot Springs for up to 90
days. If the City and the Developer are able to reach an agreement on the development terms, the City will move
forward with the public and legal processes to finalize an agreement.

On August 18, 2020, the Board of Directors passed a resolution authorizing the City Manager and City Attorney to
begin negotiations with Cienda Investors and Grand Point Investment Group. Any agreement developed from these
negotiations to be presented to the Board of Directors for action and approval. The negotiations have been slow, as
the investors continued to work on their due diligence. Staff will be meeting with Cienda and Grand Point Investments

194

in the next two weeks for an update on the progress.

2020 Goal: Improved Compensation Plan

Staff has worked on this particular goal, however additional work remains. With the COVID-19 pandemic and the
uncertain impact of current revenue, developing a new pay plan that is sustainable has been difficult. We have done a
significant amount of work on this goal and have a draft compensation plan that replaces the defunct merit pay plan
with a step increase model. In developing this plan, we have worked with the Johansen Group/DBSquared. This same
group developed the JESAP compensation model used by the CHS, Garland County, and many other cities and counties
in the state. They also provide the Arkansas Municipal League Salary and Benefit Survey Results for Cities over 10,000
populations.

As you know, the Board has consistently approved COLA increases over the past several years, as well as an adjustment
for several employees during the previous job audit. These adjustments have kept the City of Hot Springs pay equitable
when compared to most other cities. As you will recall, the majority of employees are at or very close to the mid-point
after the last job audit adjustments. The issue with the current merit pay plan is funding. This plan has not been funded
in 15 years.

The current draft also decreases the number of pay grades from 31 to 25. It also takes into consideration that the
minimum wage will increase to $11.00 in 2021. The cost estimates and impact are still being developed and will have
some flexibility as the draft is refined.

Over the past year, we have worked on employee incentive plans that will provide opportunities for advancement in
the future. These can easily be incorporated into the step plan concept. We have done a much better job in terms of
annual reviews and employee performance appraisals in 2020. These will also be a component of the step plan.
Regardless of the timeframe between steps, annual reviews and performance evaluations will be conducted annually.

Staff has identified six other cities that have step increases versus merit. Interestingly, several appear to be the same
format as the merit system. We have the framework of the step plan completed, however do not plan on
implementation in 2021 due to the uncertainties of the pandemic.

2020 Goal: Infrastructure Investment Streets & Sidewalks

Staff has completed a significant amount of work towards this goal. Through an agreement with First Step Pavement
Management, we have been able to produce a comprehensive street evaluation system. This includes current
condition, video of every street, types of repair needed, and an overall general conditions report for every street. This
technology includes a rating of each street, categorized into four categories of current conditions and allows staff to
focus on those streets or areas of streets that need immediate attention. This will allow staff to compare our current
street ranking/scoring model and compare it to the data this technology provides. By segregating into four categories,
staff can develop a longer-term plan to forecast when streets may need future improvement. We have a finite amount
of funds for street paving annually, with a majority coming from state turnback and the ½-cent sales tax on fuel. In
2020, the City paving budget is $896,000. With prior year funds carried over, we will pave $1,100,000 in 2020. The
2021 budget will pave close to $1.6 million.

Prior to 2020, staff did not have an overlay map of city sidewalks, an inventory of sidewalks, or a list of areas where no
sidewalks exist. Through this work with First Step Pavement Management, we have been able to develop an overlay of
the current sidewalk infrastructure. This information includes gaps or areas with no sidewalk. Additional work remains
in regards to sidewalk condition. However, we are working on the evaluation data that will provide the development of
a sidewalk ranking system, much like we use for streets. We typically budget $50,000 for sidewalk improvements,

195

however in 2020, we budgeted $100,000. Through grants, CDBG, partnerships with Hot Springs High School and Safe
Routes to School, we will build $482, 503 in new sidewalks this year. This does not include work performed by ArDOT
or private development.
With this new technology, there was an incredible amount of data collected in a short time. Staff continues to work
with this data to develop future evaluations, plans and costs. Staff will use this, and like, technology in the future as
part of our street paving management plan.

196

THIS PAGE INTENTIONALLY LEFT BLANK

197

APPENDIX H | ADDITIONAL CITY MANAGER PROJECTS

AND ACCOMPLISHMENTS FOR 2020

COVID RESPONSE

In the beginning of the coronavirus, I played an integral role in the City and County response to the pandemic. I con-
tacted Judge Mahoney and we quickly developed a taskforce to include public safety, first responders, emergency
management, hospital administrators, physicians, and NPC School of Nursing. In addition, I declared an emergency and
the Board ratified the declaration on March 17. This gave additional authority to the City manager to better respond to
the pandemic. The taskforce continues in operation today. Through this effort, we were able to spin up a call center,
multiple drive through evaluation clinics and other mitigation efforts. Our city/county was one of the first, if not the
first, to have drive-thru evaluation and testing centers. Through local relationships with vendors, we were able to se-
cure large quantities of PPE, such as gloves, masks, disinfectants, etc. Collaborating with Garland County, we pur-
chased these items and stored them at the emergency management facility, as well as the Central Fire department.
We were well positioned, while many areas of the country were struggling to find PPE, due to a national shortage. We
continue this collaboration through the taskforce, with Chief Davis and Ty Farris as the administrators for the
meetings. We also held two free COVID testing events in partnership with ADH and UAMS.

3 MILLION GALLON WATER TANK

The Cornerstone Water Tank holds 3 million gallons of water and features a "Welcome to Hot Springs" mural by local
artist Ryan Rooney. This tank increases the water system’s usable storage and gets us closer to the ultimate goal of 24-
hour daily storage needs.

324 MALVERN BUILDING

The City's new office building at 324 Malvern Avenue opened on Sept. 21. It houses Utility Billing Services, Finance and
the City Attorney. There are many benefits from this project to include better working conditions for staff, revitalized
an existing building that had been vacant for years, shows city commitment to downtown and the Malvern avenue
improvements, introduced drive thru service for utility customers and lastly, opened up an opportunity for marketing
the previous location to a new business or employer.

SOLAR POWER

On June 25, we broke ground on the first solar power plant at the Southwest Wastewater Treatment Plant.

HOPE WORKS PROGRAM

The Board approved a Memorandum of Understanding (MOU) between the City and Jackson House’s Hope Works Job
Experience Program (HWJE) in order to combine resources to help ensure persons in Hot Springs who are experiencing
homelessness will have an opportunity to work by picking up debris in the city and will have access to support services.
This has already proven to be a very beneficial program, not only beautifying the city, but also introducing participants
to needed resources to help break the bonds of homelessness.

2020 COMPREHENSIVE PLAN

Completed, recommended and BOD adopted the 2020 Comprehensive Plan titled HS2040: Forward Hot Springs. The
20-year comprehensive plan took more than a year to development, starting in June 2019 with a series of public en-
gagement activities called “Envision Hot Springs.” There were numerous opportunities for city residents, staff and

198

stakeholders to participate in planning throughout the project, which was overseen by the Planning & Development
Department in coordination with Design Workshop. The new comprehensive plan has integrated all previous and ongo-
ing plans with new features, policy recommendations and development strategies for generations ahead. Implementa-
tion of the plan will come through numerous budget, policy and program decisions of the Hot Springs Board of Direc-
tors.

HIRING A NEW POLICE CHIEF

This is arguably one of the most important decisions a City Manager can make. I prepared a hiring process that pro-
duced several highly qualified candidates. Through this process, I was able to narrow the selection and ultimately made
the decision to hire Chief Chris Chapmond. To date, that decision has proven to be a good one and best for our city.

WASTEWATER REVENUE BONDS

The Wastewater Revenue Bonds were recommended and approved by the Board of Directors on June 2, 2020. This al-
lowed for the refunding of previous bonds and $18 million in new construction funds for betterments to the
wastewater system. This did not require a rate increase.

MULTI-YEAR STORMWATER SYSTEM MAPPING

In 2020, we completed the multi-year project of mapping the city’s stormwater system and created an overlay map of
the system.

MULTI-YEAR EMERGENCY WARNING SIRENS

In May 2020, we completed the Emergency Warning Siren project and now have full citywide coverage, with 19 total
sirens.

PARKING ADVISORY COMMITTEE

The Parking Advisory Committee was formed to study, plan and advise the Board and City Manager on matters related
to parking management, particularly a long-term vision for the Downtown Business District. So far, the Board has
adopted parking recommendations, which included enforcement of double-parking restrictions and changed the
amount of parking violation fees. They are currently evaluating an overall turnkey parking management system con-
tract.

LINDEN PARK IMPROVEMENTS

Working with the Whittington Valley Neighborhood Association and utilizing CDBG grant funds, a new pre-fabricated
restroom was purchased and installed at Linden Park. The restroom officially opened October 15 and all three re-
strooms are ADA accessible.

DAVIDSON DRIVE WASTEWATER TREATMENT PLANT IMPROVEMENTS

Purchase and installation of tertiary filter equipment that will increase the plant capacity to 48 MGD. This was a $5.2
million project. In addition, the Board passed a resolution awarding Work Order #2 of the Master Services Agreement
for Wastewater Services to Crist Engineers, Inc. for professional engineering services for improvement projects at the
Davidson Drive Wastewater Treatment Plant. The contract is for a total of $1,561,700, and includes all engineering
functions for design, surveying, bid documents, construction administration and inspection supervision. The five im-
provement projects will be yard-piping modifications required for high-flow events; chemical feed system improve-
ments; upgrades to the aeration basins and blowers; adding another secondary clarifier; and increasing UV disinfection
capacity.

199

AIRPORT IMPROVEMENTS

The Board passed two resolutions involving work at Hot Springs Memorial Field. The

first approved a contract with Redstone Construction Group for $2,420,652.08 to improve runway 5-23 safety area and
install airfield electrical vault and equipment. The second approved a contract with Garver, LLC. for construction man-
agement services, and is not to exceed $149,900. Both are being completely funded by the FAA.

PARKING DECK IMPROVEMENTS

In February, a second elevator was added to the Exchange Street Parking Deck. Slow or inoperable elevator was one of
the reoccurring complaints from users of the parking facility. The addition of this elevator has eliminated these con-
cerns.

WATER TANK IMPROVEMENTS

Improvements made to all ground water storage tanks to include repairs, installation of mixing systems and freshly
painted.

WATER AND WASTEWATER STANDARDS AND SPECIFICATIONS

The Board of Directors adopted the new set of standards and specifications policies for the city’s municipal utility sys-
tem. These standards and specifications were several years old and required an extensive review that took over a year
to complete.

HOT SPRINGS ANIMAL CONTROL CODE

In July, the Board approved a new Animal Control Code, updating many of the policies and fees. These codes were out-
dated and needed to be reviewed and amended as needed. The City Attorney and Animal Control Director spent al-
most a year in this process.

PARKS & TRAILS POLICY, PROCEDURES AND FEES

Anthony Whittaker, with help from the Parks & Trails Advisory Committee, reviewed the policies, procedures and fees
of the department. The updated and amended policies were recommended by staff and approved by the Board of Di-
rectors.

LAKE BETHEL BRIDGE INSTALLATION

The city installed a new bridge over Lake Bethel at the Lakeside Water Treatment plant. The bridge opens up Bethel
Lake Road to Utilities and Northwoods staff. It allows staff and equipment for maintenance and inspection of the wa-
terline, dams and trails, but it gives EMS more efficient access to the base of one of Northwoods most popular downhill
flow trails, removes a hazardous area at the trailhead and opens more options for bike and foot routes in the trail sys-
tem.

CENTRAL AVENUE FLOODING MITIGATION

Repaired a significant drainage issue mitigating a hazardous flood prone area of Central Avenue, which is the main cor-
ridor of the city. This repair was necessary due to the effect on local properties, traffic, citizen safety and stalled cars
because of high water at this location. There were multiple swift water rescues made by the HSFD.

ISSUE ONE OF THE 2020 GENERAL ELECTION

Recommended and BOD approval for resolution supporting Issue One for the continuation of the ½ cent sales and use
tax. I attended several meetings and spoke in support of amendment one on several occasions educating residents on

200