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HomeMy WebLinkAboutMinutes City Council - 10/25/1983 - SpecialMINUTES CITY OF CORPUS CHRISTI, TEXAS SPECIAL COUNCIL MEETING OCTOBER 25, 1983 BAYFRONT PLAZA CONVENTION CENTER, ROOM 225 7:00 P.M. PRESENT: Mayor Luther Jones * Mayor Pro Tem Betty N. Turner Council Members: David Berlanga, Sr. City Manager Edward A. Martin Leo Guerrero City Attorney J. Bruce Aycock Dr. Charles W. Kennedy, Jr. City Secretary Bill G. Read **Joe McComb Frank Mendez Mary Pat Slavik ABSENT: Council Member Herbert Hawkins, Jr. Mayor Luther Jones called the meeting to order at the Bayfront Plaza Convention Center and stated that the purpose of the meeting was to discuss paving assessment policies in connection with street improvement projects. City Secretary Bill G. Read called the roll of required Charter Officers and verified that the necessary quorum was present to conduct a legally constituted meeting. Mayor Jones then requested that the City Manager provide background information. City Manager Martin stated that the purpose of the hearing is to discuss the policies of the City of Corpus Christi in connection with special assessments in Community Development Areas. Mr. Martin explained that the City had a policy for all paving assessments that was in effect up until last spring at which time, adjustments were made and further adjustments are now proposed. He referred to his memorandum of September 29, 1983 setting forth the City Staff recommendation. SEP 1 91984 MRO-JLMED lutes ecial Council Meeting October 25, 1983 Page 2 Mr. Martin continued by stating that the concept of special assessments as allowed within the law is that improvements that take place using the assessment method involves enhancement of the property which must equal the amount of the assessments. He pointed out that this method is used all over the United States. He noted that the City of Corpus Christi has had special assessment programs for many years and the City had improved many miles of streets and the assessments collected through those improvements had been used to construct additional streets. He noted that there previously was no distinction made between CD and regular assessment policies. He noted, however, that the current assessment policy has been changed as far as the CD areas are concerned and the following items reflect that changed policy: (1) Assessments are levied according to the use of the property rather than the actual zoning. He noted that this is very important because many of the homes in the CD areas are zoned "AB" or higher. (2) In CD areas, eligible residents who own and occupy homes may receive 0% loans through CD funds to pay their assessments. The loan must be paid at the time the property is sold. (3) Absentee owners of residential property of one or two-family dwellings are eligible for 3% loans if the property is rented to low income families. He stated that typically, assessments are paid off in five years at 8% loans but this period of time may be extended to ten years if the owner requests this and it is determined that the five-year period would present a hardship. Mr. Martin pointed out that to his knowledge there has never been a case of foreclosure on a piece of property because of nonpayment of assessments, even though the property owner is urged to pay the assessment. Mr. Martin continued by referring to a recent memo in which the City Staff suggested that the following two changes be considered: 1. In CD areas, that the loan made through CD funds to low and moderate income families no longer be required to be paid when the house is sold, but instead, that it will be amortized over a three-year period if the owner maintains his residence at the location during that time; and 2. Water lines will be installed according to the same type of policy as in new subdivisions and the Staff is recommending that the Council change the policy and no longer assess for new water lines as a part of the street improvement project. utes .cial Council Meeting October 25, 1983 Page 3 He explained that if it is decided that it is necessary for the users to tie on to the new water line, then the cost of making the necessary plumbing changes and tapping to provide water service will be the responsibility of the City. He noted that in CD areas, CDBG funds will be used to make the necessary changes. He pointed out that if a new water line is installed but switch overs are not determined to be necessary, then the property owners will be responsible for plumbing and tapping costs if they choose to switch to the new line. * Mayor Pro Tem Turner arrived at the meeting at 7:25 p.m. City Manager Martin summarized by stating that two of those items are new -- the no charge water line assessment and the amortization of the loan over a three-year period. He pointed out that the non -low-income resident will not be relieved of any assessment payments because the recommendation only deals with people who will be Section 8 eligible. Mayor Jones referred to the low income eligibility and asked about the perameters. Mr. Martin explained that according to Section 8 guidelines, the following income levels are in effect at this time: One person family - $11,550; two persons - $13,200; three persons - $14,850; four persons - $16,500; five persons - $17,550; etc. Mayor Pro Tem Turner inquired about the device for qualifying people, and Mr. Kelly Elizondo, Director of Community Development, explained that the income data required for the families to submit to his office are: sworn statements or the 1040 Income Tax Return. Mayor Jones called on members of the audience to speak on this issue. He reviewed the Staff recommendations for the changes in the policy and established a 3 -minute limit for each speaker. Mrs. Betty Stinson, 910 Booty, protested the installation of a sidewalk too close to her home, noting that she considers it an invasion of privacy. Mrs. Stinson pointed out that none of the residents of the Spohn Hospital Area had requested these improvements; the water now collects under her house; an engineer assured her that the water would flow over the sidewalks; but this has not proven to be true. She stated that levying an assessment for her improvements has presented a hardship for her and she also objected to the 8% interest. She explained that a few of the residents of the area are not in the low income bracket and will have to pay their own assessments. She also objected to the 3% loans granted to absentee landlords who rent to low income people. She urged that the new Members of the City Council listen to the people from this area because none of the residents of that neighborhood have enough money to pay assessments. utes acial Council Meeting October 25, 1983 Page 4 Mr. Leon Perez, 904 Buford, objected to the method of installing the sidewalks in that they are higher than they used to be and they have made the drainage worse. He stated that his taxes have been increased and alleged that the trucks going down this street have damaged the foundation of his house. He expressed concern that the widened streets will encourage more truck travel down Buford Street with the resultant additional damage to his house. He objected to the use of federal funds for other projects in the City and suggested that such federal grants should be spent for the entire cost of street improvements. He made reference to the operation of Evanston, Illinois and stated that they do not install such fine improvements there. He stated that he cannot pay for the assessments and he has had to go back to work in order to pay his living costs. Mr. Jack Gordy, 5802 Everhart, stated that he has empathy for the people being assessed. He urged that the City adhere to the guidelines established by the Department of Housing and Urban Development. He expressed the opinion that other cities in Texas have more concern for the low income residents. Mr. Gordy also objected to the Staff recommendation, noting that if a lien is placed against a home, it will be impossible for the property owner to obtain a loan for other house improvements. He also objected to the use of CD funds to improve Shoreline, Timon Boulevard and other areas because the money could be used to totally finance street improvements in low income areas. He stated that all that the people in this area are requesting is that the City follow the HUD guidelines. Mr. Anastacio Hernandez stated that he is handicapped and lives on social security. He stated that he has lived in this area all of his life, and for many years from the time he was a small child, he has been promised streets and sidewalks. He expressed the opinion that the property owners in this area have paid enough taxes that the City should be able to pay for all of the streets in this City. Mrs. Paula Martinez, 2622 Cloyde Street, informed the Council that the construction company performing the work in their neighborhood broke some of the curbs. She stated that there are already holes in the sidewalks and they feel that the contractor performed a very poor job in aligning the driveway. Mrs. Robert Shaddox, 433 Southern Street, stated that the street on which she resides was recently improved but the residents had signed a voluntary paving petition for that work. She stated that she also owns a home at 1319 5th Street which has been rented for many years. She stated that she had always had her rental complexes leased but since the improvements have begun, she finds it difficult to keep tenants since there is such disorder created by the construction. She expressed the opinion that the street improvements will not allow her to rent the apartments for any more money and that she will not be eligible for any of the special benefits recommended by the Staff because she owns more complexes on each piece of property than a duplex. She stated that she was of the opinion that every property owner should be entitled to the same special consideration on assessments. She stated that she has five complexes on her property on 5th Street. utes eclat Council Meeting October 25, 1983 Page 5 Mr. Otto Hampton, 401 Dixon Drive, stated that he has been paying taxes for thirty years. He stated that he had voluntarily signed a petition to have the street improvement work performed but at the time he signed the petition, he actually earned $27,000 a year; however, he is now disabled and is living on social security. He informed the Council that four residents of the neighborhood have retired since they signed the petitions. He stated that he does not look forward to having to pay assessments for ten to twenty years. Mr. Alvin Machalec, 1601 6th Street, stated that he resides at that address and also has rental property iri the area. He stated that he has been looking forward to the street improvements, but he has a problem in paying for the assessments. He stated that most of the people renting from him are low income families and if he has to pay the assessments, he will have to increase their rent. Council Member Slavik asked a member of the Staff about renting to Section 8 eligible tenants. City Manager Martin stated that the landowners could obtain a 3% interest loan if there are no more than two units on each piece of property. Mr. Machalec stated that most of his property contains duplexes, and Mr. Martin pointed out that he would be eligible for the 3% loans according to the income of his tenants. Mr. Clyde Jackson, 1225 3rd Street, stated that he takes walks in that area and he feels that the construction work performed is the worst that he has ever seen. He explained that the curbs are not level and the sidewalks are cracking already. He suggested that before final payment is made to the contractor, that the engineers carefully check the work. Mr. Jackson also suggested that before any more street improvements are planned, the City ascertain that the people really want the improvements. He expressed the opinion that these particular improvements are being made for future owners who might wish to construct multi -family units in the area. Mr. Cecil Jenkins, 1119 6th Street, referred to the Section 8 income levels and pointed out how little those incomes are and how difficult it is for the people to live on that amount. He stated that people are barely existing on those salaries and they do not need any improvements that they have to pay for. Mr. Jenkins also remarked on the poor construction work in the Spohn Hospital area street improvements and the poor drainage that has resulted from the improvements. He suggested that HUD money be used only for very necessary projects. utes ecial Council Meeting October 25, 1983 Page 6 Mrs. Catalina Martinez, 1309 6th Street, representing the Spohn Hospital Area Residents Association, expressed appreciation for the public hearing conducted so that the Council may become aware of the difference of opinion between the residents and the City Staff. Mrs. Martinez stated that she had done a lot of research and had found out that in other cities in Texas and in about 99% of the cities all over the United States, people are not assessed for street improvements. She stated that her Association is proposing that the assessment policy be changed to eliminate the assessments in CD areas for all homestead properties. She mentioned several cities in which there are no assessments for homesteaded properties, mentioning in particular, Amarillo, Dallas, Austin, El Paso, Fort Worth, Galveston and even Evanston, Illinois. She stated that in Houston she had ascertained that their ordinance allows assessments even in CD areas but there has been a moratorium established on street improvements because they are having dialogue with the residents of CD areas in regard to the assessments. Mrs. Martinez referred to a publication from HUD and stated that the City of Corpus Christi has the dubious honor of being listed as the only city having received a waiver to allow for assessments in CD funded areas in order to relieve the hardship of the City of Corpus Christi. She then referred to the proposed chance for the three-year amortization and stated that this change leaves a lot to be desired. She pointed out that a second lien ori someone's property poses a problem if they attempt to obtain a loan for home improvements. She also stated that it is very humiliating for some people to declare themselves Section 8 eligible. She stated that the proposed plan is similar to the one that is already in effect. She also noted that the letters explaining the method of applying for the amortization are very confusing to most residents. She stated that she had even talked with one elderly lady who withdrew all of her savings in order to pay her assessment because she was not aware that she had the option of obtaining an interest-free loan. Mrs. Martinez pointed out that even residents who have a moderate income will be forced to pay the assessments over a five or ten-year period at 8% interest. She urged that relief be granted by this City Council. Mr. J. E. O'Brien, 14130 Pompano, complimented the Council for conducting this public hearing. He urged that they listen to the people who are speaking tonight because he felt that this City has shown very little consideration for the little people and the poor people. He expressed the opinion that the proposed changes are at least a step in the right direction but he objected to the expenditure of CD funds to improve Timon and Shoreline Boulevard and particularly, objected to the expenditure of CD funds for improvements on Shoreline. Mr. O'Brien also mentioned the $900,000 of CDBG funds for downtown parking lot improvements and expressed the opinion that that would in no way help low income people. utes ,ecial Council Meeting October 25, 1983 Page 7 Mrs. Gloria Perez, 1317 7th Street, urged the Council to listen to the people who have spoken tonight. She suggested that they consider the little people of this City and not do everything on behalf of developers and investors. She suggested that assessments be eliminated entirely in CDBG areas, noting that the residents of her neighborhood did not ask for these street improvements and most of the people cannot afford the assessments. She stated that she felt that the new City Council Members should be more lenient on the people who have worked and paid taxes so long in this area. She particularly objected to the $90,000 of Community Development Block Grant Funds allocated for a seafood company. Mrs. Katy Perez, 1317 7th Street, referred to a statement by Mrs. Martinez that an elderly person had to use all of her life savings to pay her assessments. She stated that this is not fair and demonstrated a lack of communication between the City and the property owners. Mrs. Juanita Vandemeer stated that she lives on Cole Street and objected to the assessments for sidewalks which had already been installed by the telephone company in 1981. She stated that sidewalks on Buford Street were replaced as a part of these street improvements and she objected to paying for those assessments. ** Council Member Joe McComb arrived at the meeting at 8:32 p.m. Mr. Walter Wenger, 1211 6th Street, referred to the poor concrete work that had been performed by the construction company. He stated that his new sidewalk already has a crack across it. Mr. Ernest Carter, 1711 Stillman Street, stated that he does not live in the area under discussion but he does reside in a low income area in Hillcrest and he has a great deal of sympathy for these residents. He urged that the Council be lenient with those individuals who cannot afford their assessments because he felt that the same thing would happen in the future in the Hillcrest area. Mr. Agapito Torres, 508 18th Street, stated that he resides in the Lamar School area and that he had attended meetings in his neighborhood in which three schools are located. He stated that he had discussed improvements in their area with Mr. Kelly Elizondo and he saw no need for improvements because on Agnes Street which is in his neighborhood are located a number of bars and patrons of those bars go down streets in their neighborhood such as Mary, Marguerite, 17th and 18th Streets. He stated that they would like to have improvements in their neighborhood but there are a lot of elderly and low income people in the area who could not pay their assessments. He stated that the area he referred to is bounded by 19th, Agnes, Mary Streets and the Crosstown Freeway. utes ecial Council Meeting October 25, 1983 Page 8 Mr. Gene Bouligny, 309 Santa Monica, stated that he owns rental property in the Spohn Hospital Area and he was of the opinion that there was no equity or fairness for the people who are poor. He noted that most of his tenants are in the low income category and he felt that it was unfair to charge him with the assessments since the expense will have to be passed on to the tenants by increasing their rent. Mr. Ray Madrigal, 3002 Churchill, stated that street improvements had just recently been completed in his neighborhood. He stated that a new water line had been installed and most of the people in his area will have difficulty paying the assessments. He encouraged the Council to vote against any assessments. Mr. Lewis Lovelace, 1549 Casa Grande, stated that he would like to relinquish his three minutes to Mr. Perez. Mr. Leo Perez, 902 Buford, stated that he had actually completed his statement but inquired as to how their assessment bills can be paid. Mayor Jones explained that the payments can be made in cash after completion of the project or they may be paid over a five-year period at an interest rate of 8%, or in the event of a hardship, that time may be extended to ten years. Mr. Perez also complained that the police are never seen in that area and he is of the opinion that the residents are not receiving services that they pay for. Mrs. Stella De Los Santos, 1318 Furman Street, expressed appreciation for the public hearing conducted at night. She informed the Council that they had not requested the improvements and questioned whether they are actually improvements. She pointed out that the drainage has been much worse since the streets were improved and the sidewalks are already cracked. One of the Council Mernbers inquired about the contractor, and Mr. Smith stated that A PC C O is the contractor for that project. A Mr. Rodriguez, 2409 Cloyde Street, stated that the improvements have been completed in his neighborhood; he has made two payments; and his driveway is already cracked. He requested that a Staff member from the City check his driveway, and Mayor Jones assured him that someone would examine it. Mr. Margarito Pena, 2718 Niagara, also complained about the condition of his driveway after the street improvements were completed. He asked that it be checked also. He also noted that the street floods now whereas it did not before, and Mayor Jones stated that someone would check his property as well. Mrs. Domingo Palomo, 2533 Lynch Street, stated that her driveway was also cracked after the work was completed in April. She stated that no one had gone by to check it. utes recial Council Meeting October 25, 1983 Page 9 Mr. Leroy Mitchon, 2334 Riggan, stated that he also owns property at 2405 Riggan. He stated that the drainage is very poor since the area was improved and asked that someone inspect it also. No one else spoke in regard to the assessments. A motion was made by Mayor Pro Tem Turner that the hearing be closed, seconded by Council Member Kennedy and passed unanimously. Council Member Kennedy pointed out that statements had been made that presented several problems with which the Council must deal. He referred to the homestead and the multi -housing and stated that he would like to recommend to the Staff that the privilege of obtaining a 3% loan by absentee landlords not be limited to those who own one or two-family dwellings. He stated that he would also like to suggest that assessments not be charged any property owner whose house has been homesteaded. Council Member Berlanga stated that he is very concerned that Corpus Christi is the only city that assesses property owners where CDBG funds are used for street improvements. A motion was made by Council Member Berlanga that the City exempt from assessments property that has been homesteaded only in areas where CDBG funds are used. Mayor Pro Tem Turner expressed the opinion that the public hearing had been very valuable. She stated that, based on what she has heard during the meeting, she would like to see the following things addressed: (1) the Staff perform a good job of checking on the quality of the work in the various areas and (2) that the Council consider waiving assessments for homesteaded properties for income eligible persons in the CDBG funded projects. Council Member Guerrero stated that he approved of dismissing the liens on the homesteaded property, but he was of the opinion that property owners who have adequate incomes should still pay their assessments even in the CDBG funded areas. Council Member Mendez indicated his concurrence, stating that he felt that the City should eliminate the amortization over the three-year period which has been recommended by the Staff. He expressed the opinion that a policy should be established to apply to other projects that are funded by CDBG funds. He also expressed concern about the bad drainage that had been reported by the speakers. He agreed with Council Member Guerrero that the policy that they need to establish should address the property owners who qualify for Section 8 low income according to the HUD guidelines. He agreed that the people who can afford to pay for assessments should be required to do so. Mayor Jones inquired about the method of calculating low income owners, and Mr. Kelly Elizondo stated that the City uses the HUD guidelines to determine income eligible persons and areas. lutes ecial Council Meeting October 25, 1983 Page 10 Council Member Slavik expressed concern about the inferior and poor quality work as reported by a number of speakers. She asked that the Staff investigate the complaints registered by those who reported cracked sidewalks, etc. City Manager Martin stated that Mr. Gerald Smith had noted those names and plans to check the work. Council Member Berlanga suggested that these older areas of the City should have their assessments eliminated because of the length of time they have been paying taxes. Mayor Jones stated that most of the Council Members indicated that there should be a homestead waiver. Council Member Berlanga again made a motion that all of the people who have homesteads in the CDBG areas should not have to pay assessments. Council Member Guerrero reiterated that he felt that there should be a qualifying factor in that they should be income eligible according to Section 8 guidelines. Council Member Berlanga stated that his motion was to eliminate assessments for all people whose property has been homesteaded. Mayor Jones declared that Council Member Berlanga's motion died for lack of a second. A motion was made by Council Member Kennedy that the homestead exemptions in the CDBG area for low income families which would be established according to the Section 8 guidelines be relieved of paying assessments and that all property owners who have multi -family dwellings rented to low income families be allowed to take advantage of the 3% loans to pay their assessments. The motion was seconded by Mayor Pro Tem Turner. City Manager Martin asked for an explanation and inquired about the meaning of "no assessments". He asked if the Council intended for those people who are eligible and have their homes homesteaded if CD grants will be provided to pay their assessments. The Council indicated that that is what their intention was. Council Member Guerrero pointed out that if the change is approved to allow absentee landlords of all multi -family dwellings of all sizes to avail themselves of the 3% loans, he felt that the result would be an onslaught of slums. ates ficial Council Meeting October 25, 1983 Page 11 City Manager Martin stated that he would like to clarify the Council's intention and noted that there would be an assessment against the property but if the property owner has a homestead and is income eligible to receive a grant of CD funds, that property would be exempt from liens against it. Mayor Jones called for the vote on the motion. Council Member McComb noted that he concurred with Mr. Guerrero's observation about the multi -family dwellings all being included. He asked that rather than one motion that this be made into two motions because he did not feel he could vote affirmatively on both portions. Council Member Kennedy agreed to make the motion into two motions. Mayor Jones clarified the motion pertaining to single-family dwellings and stated that the motion was that if property is homesteaded in the Community Development Area and the property owner is income eligible, a lien will not be placed on the property for the improvements. The motion passed by the following vote: Jones, Turner, Guerrero, Kennedy, McComb, Mendez and Slavik voting, "Aye"; Berlanga voting, "No"; Hawkins, "absent". Mayor Jones then clarified the second portion of Dr. Kennedy's motion to the effect that the owners of one and two-family rental dwellings be expanded to include all multi -family housing if the tenants meet the income eligible status which would make the property owners eligible for 3% loans. Mayor Pro Tem Turner seconded this motion. Council Member Kennedy asked the City Manager if he had any idea about the number of pieces of property this would involve. City Manager Martin replied that the Spohn Hospital Area consists of approximately 60% rental properties. He suggested that possibly, a certain number could be designated. Mr. Guerrero again expressed concern because he felt that there is a need to protect the neighborhoods so that they will not become rundown, slum areas. Council Member Slavik inquired if the Council could consider each area individually because this is a different situation in the Spohn Hospital Area from other areas of the City. Council Member Kennedy suggested that since they are unsure about the size that should be specified, possibly a six-plex could be the limitation. After a short discussion, Council Member Kennedy withdrew the second portion of his motion until more Staff information is available. utes .tial Council Meeting October 25, 1983 Page 12 City Manager Martin stated that there are a few complexes with ten or eleven units but most of them seem to be approximately five -unit complexes. Council Member Kennedy then made a motion to change the one or two-family designation for the purpose of 3% loans for the landlords to a six-plex or less. Mayor Pro Tem Turner seconded the motion. Council Member McComb pointed out that even though Spohn Hospital Area and Furman Area had been mentioned, what is actually happening is that the Council is establishing a policy for all CDBG areas. He suggested that a city-wide policy be established after consideration. Mayor Jones reviewed the motion stating that the Staff recommendation that in CD areas absentee owners of residential property be changed to specify six-plex or less to be eligible for low interest loans at 3% to pay the assessment if the property is occupied by low income tenants. Mayor Jones called for the vote on the motion and it failed to pass by a tie vote: Turner, Kennedy, Mendez and Slavik voting, "Aye"; Jones, Berlanga, Guerrero and Mendez voting, "No". A motion was made by Council Member Kennedy that the remainder of the Staff recommendation be adopted as listed below, seconded by Council Member Guerrero: 1. Street, sidewalk and water line improvements are assessed to the property owners in all areas of the City with the City using bond funds, Community Development funds and/or Urban Systems funds for its share of the project. 2. The City's share of the project varies from 70% to 85% depending on how much commercial versus residential property is present in the project. Commercial property is assessed at a higher rate than residential property as shown in Attachment "A". 3. In CD areas, assessments are based on the use of the property at the time of the project rather than necessarily on the zoning. If a property is utilized for residential purposes at the time of the project, then the assessment will be at the residential rate. In non -CD areas, assessments are based on the zoning of a property. 4. In CD areas, owners whose property is homesteaded who are income eligible according to Section 8 guidelines, will have their assessments paid from CDBG funds. 5. There will be no assessments for water line installation as a part of street improvement projects. utes acial Council Meeting October 25, 1983 Page 13 The motion passed by the following vote: Jones, Turner, Guerrero, Kennedy, McComb, Mendez and Slavik voting, "Aye"; Berlanga voting, "No"; Hawkins, "absent". City Manager Martin informed the Council that the last time a change in policy was made, the Council made a decision as to which projects it should affect. He suggested that the following projects be included in this change of policy: Washington -Coles Area Street Improvements 2 E 3, Tracy Addition Street Improvements and Spohn Hospital Area Street Improvements. There being no further business to come before the Council, on motion by Council Member Kennedy, seconded by Council Member McComb and passed unanimously, the Special Council Meeting was adjourned at 9:35 p.m., October 25, 1983. * * * * * * * * * * * DZ/rr