City council meeting ends after heated contract talk

A recent El Dorado City Council meeting ended on a snappy note following a discussion about city contracts for service and questions of accountability regarding the terms of the contracts.

As the council moved to the "Other Business" portion of its agenda, Council Member Willie McGhee broached the topic of the contracts for services.

The city holds annual contracts with several groups, including the El Dorado-Union County Chamber of Commerce, the Boys and Girls Club of El Dorado, El Dorado Festivals and Events, Inc./MAD, Union County Animal Control, LLC, and Main Street El Dorado.

McGhee asked that the groups provide updates on the services they provide to the city in exchange for the contracts, which are funded by taxpayers' dollars.

The request led to an abrupt end to the council meeting, which was capped off with a brief, but stout exchange involving Council Member Frank Hash and Mayor Paul Choate, who had reproached Hash about the proper way to address him.

Hash had posed several questions about the city contracts and had specifically pointed to the contract for services with EFEI/MAD.

The contract pertains to the operation and management of the MAD Playscape, which is owned by the city and operated by MAD.

Hash noted that the arrangement had been cited by state legislative auditors and questioned Choate about the status of the contract.

"But there needs to be a come-to-Jesus meeting about getting this stuff straightened out," Hash said. "We keep messing with the state legislative auditors, son, they're going to cut our throat. They're not down here just goofing around."

"Mr. Hash, refer to me as 'Sir' or 'Mayor', not 'son'," Choate said evenly.

"OK, Mr. Son," Hash shot back.

Council Member Vance Williamson then made a motion to adjourn the meeting.

Contracts

McGhee pointed out that some of the city contracts call for the parties to provide reports to the city about the services they provide.

The contracts are good for each calendar year.

El Dorado-Union County Chamber of Commerce

For instance, the terms of a $45,000 contract for economic development services with the chamber of commerce calls for the chamber to provide semi-annual reports about its activities, including business leads that are developed or received and jobs that are created.

The contract is paid in quarterly installments of $11,250.

Union County Animal Control

The city holds a $75,000 contract with UCAC to provide dog control services.

The contract includes monthly payouts of $5,833.33 in reimbursements for expenses and an additional $500, monthly gasoline allowance for "dog patrols" in the city.

Per the terms of the contract, UCAC is required to submit a monthly recap of activities to the mayor's office.

UCAC submits the reports each month to the Department of Public Works, under which the dog control service falls.

Main Street El Dorado

The city maintains an annual $35,000 contract with MSE to provide several services, including developing strategies for downtown economic development through historic preservation, while utilizing the community's human and economic resources.

The MSE executive director -- Beth Brumley -- is its chief onsite staff person and the city partners with MSE to classify the MSE executive director as a city employee so that the director may qualify for benefits, such as health insurance, that Main Street is not able to cover in its budget.

The city's contribution is paired with an amount that is allotted by MSE that assists with services as payroll taxes.

Boys and Girls Club of El Dorado

The city pays out an annual contract of $22,500 to the BGCE expand youth recreational services for local children, since the city does not have an organized youth recreational program.

The contract emphasizes baseball, basketball, soccer and other recreational services.

The contract is paid in two installments of $11,250.

El Dorado Festivals and Events, Inc./MAD

McGhee and Hash said council members were recently provided copies of the city contracts for review as 2024 city budget talks got underway.

Hash noted that the contract pertaining to the O&M agreement for the MAD Playscape expired in 2021.

The playscape is one several properties within the MAD entertainment complex that were purchased with the city's multi-million-dollar contribution toward the development of MAD; deeded back to the city upon completion; and operated and managed by and leased to MAD for a nominal fee.

In 2019, the city purchased the playscape from EFEI, the private, nonprofit organization that developed MAD, for $3.5 million and entered into an agreement to lease the property to MAD for $10 per year for 99 years.

In late 2020, the city council approved a contract for services, allowing MAD to operate, manage and maintain the playscape.

A $1.2 million contract began in, with an initial term of Jan. 1 - Dec. 31, 2021, and an option to extend the contract with a mutual agreement from the city and MAD.

The initial request called for payments of $400,000 per year -- to be made quarterly -- for three years.

However, city council members and members of the El Dorado Works Board agreed to fund the request on an annual basis, rather than enter into a three-year contract, and make payments in arrears to account for the actual hours that the playscape is open.

The EWB administers the city's one-cent sales tax that is dedicated to economic development, municipal infrastructure and quality-of-life projects.

In 2021 legislative audit findings, state auditors said the contract was approved without consideration of the lease that was granted in 2019 -- a violation of Article 12, Section 5 of the Arkansas Constitution, prohibits counties, cities, towns and other municipal corporations from becoming "a stockholder in any company, association, or corporation; or (obtaining or appropriating) money for, or (loaning) its credit to, any corporation, association, institution or individual."

On Nov. 9, Hash asked if the initial contract had been extended past the Dec. 31, 2021, expiration date, saying that the council had not received documentation indicating such an extension.

Williamson said the EWB agreed to extend the agreement and the request was later approved by the city council.

"I don't know. I just wasn't given the documentation," Hash replied.

He then asked Choate if he had followed up on and addressed the audit finding, as Choate said he would in in his response to the Arkansas Legislative Audit.

Choate said he had met with EFEI and their attorney, state Representative/Speaker of the House, Matthew Shepherd (R) on the matter.

"We got a legal opinion from Mr. Shepherd and he feels like we're good to go," Choate said.

"Has that been brought to this council?" Hash pressed.

"Nobody's asked me the question. I was just told to handle it," the mayor replied.

McGhee and Hash contended that the council should have been updated on the matter and afforded the opportunity to ask questions and offer comments.

Other questions

Hash had also inquired about the date the 2023 city contracts for services were signed, noting that the contracts with the chamber and BCGE went into effect on Jan. 1 and were signed by the mayor and the respective parties on Jan. 31.

He said the contracts were not presented to the council prior to the signings and the council did not authorize Choate to enter into the agreements on the behalf of the city.

Williamson, who is chairman of the Finance Committee, said the funding is approved in the city budget each year for the contracts.

"But you look at the contract. That's the whole point of us passing that ordinance," Hash said. "The money is there, of course, but we want to talk to the folks that we want to set the contracts with and see if there's any problem with the contract."

McGhee asked that the groups present reports of their activities at the next regularly scheduled city council meeting.

When Choate said he would make contact with the groups, check on their availability, McGhee stepped in.

"Well, Mr. Choate, if we're giving them money, I mean, we're giving them money, whether they're available or not, they should make time to come talk with us," McGhee insisted.

Council Member Judy Ward said the council previously invited the groups individually to present their reports.

"In case we had quite a few questions, it would be quite lengthy to have everybody come all at one time," said Ward.

The council's next meeting is scheduled for 10 a.m. on Nov. 20.

The meeting will focus and water and public works' projects and any other business the council adds to the agenda.

The Finance Committee will meet at noon Thursday in the Council Chamber of City Hall.

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