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HomeMy WebLinkAboutMinutes City Council - 12/03/1987 - SpecialPRESENT Mayor Betty Turner Mayor Pro Tem Mary Rhodes COUNCIL MEMBERS: David Berlanga, Sr. Clif Moss Bill Pruet Linda Strong Absent Leo Guerrero Mary Pat Slavik MINUTES CITY OF CORPUS CHRISTI, TEXAS SPECIAL COUNCIL MEETING CITY HALL COUNCIL CHAMBERS DECEMBER 3, 1987 11:30 A.M. City Manager Craig McDowell City Attorney Hall George City Secretary Armando Chapa Mayor Betty Turner called the meeting to order in the Council Chambers of City Hall. City Secretary Armando Chapa called the roll and verified that the necessary quorum of the Council and the required Charter Officers were present to conduct the meeting. Mayor Turner called for consideration of the General Improvement and Refunding Bonds, Series 1987. Assistant City Manager Juan Garza introduced representatives from McCall, Parkhurst, & Horton, Bond Counsel; Mr. James Seal, representative of M.E. Allison & Co.; and representatives from Texas Commerce Bank and Dean Witter Capital Markets who were present for the sale of bonds. Mr. Garza continued by stating that the proposal is to approve the sale of General Improvement and Refunding Bonds, Series 1987, in the amount of $40,200,484.55. Mr. Garza continued by stating that the projects included in the sale of bonds are those recommended by the bond task force and the construction of the Police building and improvements to the communication system. He explained that the refinancing provides the flexibility for next year in that the City can use the cash flow generated to sell more bonds, use the money for replenishing the reserves, add to the general fund or any other financing in accordance with the truth in taxation law. Assistant City Manager Garza explained the two ordinances and two resolutions that need to be approved by the City Council in order to complete the sale. MICROFILMED cial Council Meeting December 3, 1987 Page 2 Mayor Turner asked Mr. Garza to explain the specific projects that would be funded from the sale of bonds. Mr. Garza explained that the following specific purposes are included: Drainage and Storm Sewers - $500,070; Aquarium - $2,700,000; Public Health and Safety - $6,600,000; Airport - $400,000; Parks and Recreation - $1,100,000; Street Improvements - $3,330,000; and Library books - $250,000. He noted that the funds for street improvements will be matched by State funds. Mayor Turner expressed the opinion that there is a need to move forward with these projects as soon as possible. She then referred to a letter received from the Taxpayers Association indicating that they are concerned about the proposed refunding of over $23,000,000 of 1985 General Improvement Bonds which they feel is a violation of the City Charter, since Article VIII, Section 2(b) requires that the refunding be approved by the voters of the City. She inquired if this needs to be referred to the Attorney General. Mr. Hobby McCall stated that the procedures proposed are legal, stating that they have discussed this with the Attorney General's office and they are in agreement that the part of provision requiring an election would not apply in this situation. He assured the Council that this is a legal procedure. City Manager McDowell pointed out that Mr. McCall's firm is one of the most outstanding in the State in dealing with bonds, and he had no hesitation in recommending the approval of the ordinances. Mayor Turner then inquired if Mr. Seal concurred, and Mr. Seal assured the Council that the agrees with Mr. McCall that this is a legal and proper procedure. Mayor Pro Tem Rhodes asked for City Attorney George's opinion, because she was under the impression that when local law is more restrictive than State law, it usually supersedes state law, and she wanted to be sure that these procedures are legal. Mr. McCall explained that the issue is based on the Texas Constitution and the test is whether the local law is consistent with State law. He explained that in this case, the language is inconsistent with State law; therefore, it must fall under the State Constitution. Mayor Turner then referred to the Tax Cap included in the City Charter which is different from the $2.50 per $100 of valuation maximum allowed by State law. Mr. McCall explained that the terms of the City Charter cannot be inconsistent with State law. Mayor Turner then inquired if other cities in the State have refunded bonds, and Mr. McCall stated that this has been done in Dallas, San Antonio and Austin. ecial Council Meeting liecember 3, 1987 Page 3 Mr. Garza informed the Council that the bonds have already been sold, and they were completely sold because Corpus Christi has popular bonds. Mr. McDowell then distributed to the Council copies of a comparison of bonds sold by other entities. He noted that this City's rating was reduced to AA- and A.1. He then referred to the tax rate and presented the schedule on the refunding which shows that the tax rate will remain at its present level with the exception of the two cent increase which was authorized by the City Council. Mr. McDowell continued by stating that the City was informed in writing by the rating agencies that the City's ratings were reduced somewhat because of the tax cap which was a major factor; the exemption on homesteads for citizens over 65 years of age which was approved in April, 1987; and the general economic conditions. He explained that on the positive side, the sound and progressive operation of the City was one factor; the coming of Homeport was another factor; and the success of the Port of Corpus Christi. He noted that the Council is seeing for the first time written into the credit report those specific issues, and had the detrimental issues not been in effect, the rating would not have been adjusted. He noted also that there is a possibility of these factors costing the City more money in the future. Mayor Turner called for comments from the audience. Mr. J. E. O'Brien, 4130 Pompano, explained that the letter from the Taxpayers Association was written because of the City Charter. He stated that he does have a difference of opinion with Mr. Hobby McCall; this City's Charter was just recently approved; the Council should pay attention to what is included in the City Charter. He questioned if the City staff could do anything right, and if there is a conflict between the State law and City Charter, this should have been addressed when the Charter was revised. He also questioned the emergency to pass ordinances in order to sell bonds. Mr. McDowell stated that it was his understanding that the charge to the Charter Revision Commission was to simplify the Charter - not make major amendments to the Charter. He explained also that the emergency deals with the effective administration of the City and the need to move forward with the Police Station Building. Mr. Garza also pointed out that the underwriters would not be willing to wait three weeks for three readings of the ordinances. Mr. Philip Rosenstein, 949 Bobalo, stated that he is not opposed to projects proposed, but he is against doing things that will cost the taxpayers money. He questioned the reason the City Attorney does not give legal opinions but rather allows other attorneys to provide the legal opinions. He expressed the opinion that the citizens have a right to know how much it is going to cost the taxpayers and noted that refinancing always costs the taxpayers more. Mr. Raymond Hasker noted that there are very few voters present and questioned the reason for calling a Special Council Meeting. He inquired as to what constitutes an emergency and questioned adhering to the State laws rather than the City Charter which was approved by the citizens of Corpus Christi. He stated that any time these special meetings are called, the public should be informed. ecial Council Meeting .,ecember 3, 1987 Page 4 Mayor Turner informed him that this meeting was discussed at a previous Council meeting, and Mr. McDowell explained that notice of the meeting was posted last week and it was discussed at the Council Meeting on November 17, 1987. Mr. Garza pointed out that it is not an emergency meeting; the emergency is to pass the ordinances in order to sell the bonds. Mr. Bob Hallet of Texas Commerce Bank stated that the reason the special meeting was called was to take emergency action to take advantage of market conditions. He stated that the reason is that one cannot ask bond holders to hold bonds for a long period of time. He pointed that other cities, and even the State of Texas, conduct special meetings for this purpose. Mayor Turner then called for consideration of the resolutions and ordinances. City Secretary Chapa polled the Council for their votes and the following Resolution was passed: 1. RESOLUTION NO. 20097 APPROVING THE FORM OF THE OFFICIAL STATEMENT PERTAINING TO CITY OF CORPUS CHRISTI, TEXAS GENERAL IMPROVEMENT AND REFUNDING BONDS, SERIES 1987, AND AUTHORIZING, RATIFYING AND APPROVING THE OFFICIAL STATEMENT AND THE USE THEREOF IN THE OFFERING AND SALE OF SAID BONDS, AND DECLARING AN EMERGENCY. The foregoing Resolution passed by the following vote: Turner, Berlanga, Moss, Pruet, Rhodes and Strong voting "Aye"; Guerrero and Slavik absent. City Secretary Chapa called for consideration of the ordinance and informed the Mayor that there was a need to have a motion to suspend the Charter Rule and pass the ordinance on emergency. A motion was made by Council Member Strong that the Charter Rule be suspended and that the ordinance be passed on an emergency. The motion was seconded by Council Member Pruet and passed unanimously. 2. ORDINANCE NO. 20098 AN ORDINANCE PROVIDING FOR THE ISSUANCE OF $40,200,484.55 GENERAL IMPROVEMENT AND REFUNDING BONDS, SERIES 1987, OF THE CITY OF CORPUS CHRISTI, TEXAS, BEARING INTEREST AT THE RATES HEREINAFTER SET FORTH, AND PROVIDING FOR THE LEVY, ASSESSMENT AND COLLECTION OF A TAX SUFFICIENT TO PAY THE INTEREST ON SAID BONDS AND TO CREATE A SINKING FUND FOR THE REDEMPTION THEREOF AT MATURITY; REPEALING ALL ORDINANCES IN CONFLICT HEREWITH; DECLARING AN EMERGENCY; AND ALL OTHER MATTERS RELATED THERETO. The Charter Rule was suspended and the foregoing Ordinance passed by the following vote: Turner, Berlanga, Moss, Pruet, Rhodes and Strong voting "Aye"; Guerrero and Slavik absent. ficial Council Meeting uecember 3, 1987 Page 5 A motion was made by Council Pruet that the Charter Rule be suspended and that the following be passed on an emergency. The motion was seconded by Council Member Strong and passed unanimously. 3. ORDINANCE NO. 20099 AUTHORIZING AN ESCROW AGREEMENT BETWEEN THE CITY OF CORPUS CHRISTI, TEXAS AND FIRST CITY BANK OF CORPUS CHRISTI, AN ESCROW AGENT, AND OTHER MATTERS PERTAINING THERETO. The Charter Rule was suspended and the foregoing Ordinance passed by the following vote: Turner, Berlanga, Moss, Pruet, Rhodes and Strong voting "Aye"; Guerrero and Slavik absent. 4. RESOLUTION 20100 CALLING CERTAIN BONDS FOR REDEMPTION PRIOR TO SCHEDULED MATURITIES. The foregoing Resolution passed by the following vote: Turner, Berlanga, Moss, Pruet, Rhodes and Strong voting "Aye"; Guerrero and Slavik absent. City Manager McDowell referred to the attachment explaining the fifth ordinance which was to amend the budget to authorize the sale of bonds and to increase the total expenditures from $209,765,733 to $211,037,667. He stated that this amendment was necessary because of the approved Bond Sale. City Secretary Chapa polled the Council for their votes and the following ordinance was passed: 5. ORDINANCE 20101 AMENDING ORDINANCE NO. 19891 PROVIDING FOR THE ADOPTION OF THE CITY OF CORPUS CHRISTI FISCAL YEAR BUDGET BEGINNING AUGUST 1, 1987 AND ENDING JULY 31, 1988; APPROPRIATING MONIES IN CONFORMITY WITH THE AMENDMENTS TO SAID BUDGET; PROVIDING FOR SEVERANCE; AND DECLARING AN EMERGENCY. The Charter Rule was suspended and the foregoing Ordinance passed by the following vote: Turner, Berlanga, Moss, Pruet, Rhodes and Strong voting "Aye"; Guerrero and Slavik absent. There being no further business to come before the Council, on motion by Council Member Strong, seconded by Mayor Pro Tem Rhodes and passed unanimously, the Special Council Meeting was adjourned at 12:16 p.m., December 3, 1987. I HEREBY CERTIFY that the foregoing is a true and correct copy of the Minutes of the Special Council Meeting of the City of Corpus Christi of December 3, 1987, which were approved by the City Council on December 8, 1987. WITNESSETH MY HAND AND SEAL, this the day of/ _ J k. � 7c fr^' etty Tur r, MAYOR Armando Chapa, City Secrethry City of Corpus Christi