HomeMy WebLinkAboutMinutes City Council - 03/08/1988MINUTES
CITY OF CORPUS CHRISTI, TEXAS
REGULAR COUNCIL MEETING
MARCH 8, 1988
9:00 a.m.
PRESENT
Mayor Betty Turner
Mayor Pro Tem David Berlanga, Sr.
Council Members:
Leo Guerrero
Clif Moss
Bill Pruet
Mary Rhodes
Frank Schwing
Mary Pat Slavik
Linda Strong
City Manager Craig McDowell
City Attorney Hal George
City Secretary Armando Chapa
City Manager Juan Garza - 2:00 p.m.
Mayor Betty Turner called the meeting to order in the Council Chamber of
City Hall.
City Secretary 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 approval of the Minutes of the Regular Council
Meeting of March 1, 1988.
Council Member Rhodes noted a correction of a vote on a motion on Page 8
noting that Council Member Strong voted "No" on the motion. A motion was made
by Council Member Pruet that the Minutes of the Regular Council Meeting of March
1, 1988 be approved as amended; seconded by Council Member Moss and passed
unanimously by those present and voting.
Mayor Turner acknowledged Mr. Ralph Ehrlich of the Villa Del Sol Hotel and
Mr. Ehrlich recognized a group of Winter Texans, especially Opal and King Fahey,
who were instrumental in the success of the Villa Del Sol Winter Texan Program
and for bringing many people to Corpus Christi.
Mayor Turner presented Opal and King Fahey with Honorary Citizen of Corpus
Christi awards.
* * * * * * * * * * * * *
Mayor Turner referred to a closed meeting on personnel matters on the
performance and evaluation of the City Manager pursuant to Article 6252-17,
Section 2(e) & (g), V.A.C.S. A motion was made by Council Member Slavik to go
MICROFILMED
Minutes
Regular Council Meeting
March 8, 1988
Page 2
into closed session at 9:15 a.m.; seconded by Council Member Strong and passed
unanimously.
* * * * * * * * * * * * *
Mayor Turner reconvened the Council Meeting at 10:55 a.m.
A motion was made by Council Member Rhodes that Craig A. McDowell be
terminated as City Manager effective immediately with the termination payment
previously authorized; the motion was seconded by Council Member Strong.
Council Member Moss read from a prepared statement, copy of which is
attached.
Mayor Pro Tem Berlanga expressed the opinion that Council Member Moss is
contradicting the rest of the Council's feelings and is out of order. He noted
that the Council has individually thought about this decision and there is no
conspiracy whatsoever.
Council Member Rhodes stated that Council Members are running a fine line
when they have to make the decisions, especially the decision today. She noted
that she had presented evidence in closed session that disputes a lot of what
Council Moss read and stated that to accuse the Council of some kind of
conspiracy is not true.
Mayor Turner stated that she is going to vote against the motion and
encouraged the rest of the Council to do the same. She noted that this action
today by various Council Members, in her opinion, circumvents what she considers
to be a very important process, and that the action today affects the way the
City will be perceived, and the Council's ability to hire high caliber
individuals who might be interested in serving as the City Manager. She
reminded the Council that Mr. McDowell was hired only twenty months ago at
considerable taxable expense; he has not been provided any kind of professional
assessment of his performance; and he has never been given an evaluation. She
stated that she thought the Council should have proceeded in a much more
responsible way by allowing him the opportunity to hear their concerns and
provide him with sufficient time to make whatever changes are deemed necessary.
Council Member Pruet noted that the Council shared questions and concerns
during a two-hour closed meeting, and he believes they are acting on what they
honestly believe is in the best interest of the City. He stated that the
Council has made a sincere effort to make those concerns known as a body; they
reached a consensus; and then presented the consensus for vote.
Council Member Guerrero pointed out that there is no malicious intent in
this action, and it is the best decision, hopefully, for the City.
Minutes
Regular Council Meeting
March 8, 1988
Page 3
The aforementioned motion passed by the following vote: Berlanga,
Guerrero, Pruet, Rhodes, Slavik and Strong voting, "Aye"; Turner, Moss and
Schwing voting, "No."
Council Member Rhodes then made a motion that Juan Garza, who currently
serves as an Assistant City Manager, be appointed and employed as City Manager
of the City of Corpus Christi effective immediately; that the terms and
conditions of such appointment be established by the City Council consistent
with the City Charter and Compensation Plan after conferring with Mr. Garza; and
that a confirming Resolution with said terms be passed. The motion was seconded
by Council Member Strong and passed by the following vote: Turner, Berlanga,
Guerrero, Pruet, Rhodes, Schwing, Slavik and Strong voting, "Aye."
Council Member Moss noted that he did not vote on the motion because he did
not think it should be a permanent appointment for City Manager at this point
but should be an interim appointment until further evaluation.
City Manager McDowell stated that he respects the Council's decision; he
has enjoyed his time here; he thought be had made a substantia] contribution to
furthering the City ahead; he has made a lot of friends; and expressed
appreciation to all those who have supported him. Mr. McDowell ended by wishing
the Council well.
A motion was made by Council Member Strong to recess the Council Meeting
for lunch at 11:20 a.m.; seconded by Council Member Pruet and passed
unanimously.
* * * * * * * * * * * * *
Mayor Turner reconvened the Council Meeting at 3:20 P.M.
Mayor Turner called for consideration of Consent Motions 1 thru 7, noting
that Items 2, 3, 5 and 6 will be withheld for discussion.
There were no comments from the audience on Consent Motions 1, 4 and 7.
A motion was made by Council Member Strong to approve Motions 1, 4 and 7;
seconded by Council Member Slavik and passed unanimously by those present and
voting; Berlanga, Guerrero, Moss and Rhodes absent at the time the vote was
taken.
1. M88-0045
Approving a supply agreement for ready -mix concrete with South Texas
Materials Company based on the low bid of $17,497. The term of the
contract will be twelve months with option to extend for an additional
twelve months subject to the approval of the supplier and the City Manager
or his designee. The concrete will be used by various City Departments.
Minutes
Regular Council Meeting
March 8, 1988
Page 4
2. M88-0046
Approving the purchase of an electric floor scrubber to The Tennant Company
based on low bid meeting specifications in the amount of $23,457.70. The
scrubber will be used at the Bayfront Plaza Convention Center.
3. M88-0047
Approving the proposed funding for Emergency Shelter Grant Program and
authorizing the City Manager to enter into contracts with the various
community organizations for the provision cf services.
4. M88-0048
Approving the appointment of the accounting firm of Peat, Marwick, Main &
Company to perform the independent audit for fiscal year ending July 31,
1988 at a fee cf $70,000.
5. M88-0049
Accepting the Pctanical Gardens Waterline Extension project; granting the
contractor a 37 -day time extension; and authorizing final payment of
$11,253.77 to E. J. Stefek Company.
6. M88-0050
Awarding a contract in the amount of $838,973 to Garrett Construction
Company for construction of waterfront improvements associated with the
Texas State Aquarium.
7. M88-0051
Scheduling a public hearing on March 22, 1988, to consider a proposed
amendment to the Master Sanitary Sewer Plan for the area in the vicinity of
Old Brownsville Road and Padre Island Drive.
In reference to Item No. 2 pertaining to the approval of the purchase of an
electric ride -on scrubber, Council Member Strong inquired how the scrubber will
be paid for and if it will come from Convention Center Bond Funds, and Assistant
City Manager Hennings replied in the affirmative and stated that they have been
working on this for some time.
Council Member Strong inquired about the amount the purchase of this
equipment will save the City over a long period of time, and Mr. Hennings noted
he will provide that answer to the Council.
In reference to Item No. 3 pertaining to the Revised Funding Allocations
for Emergency Shelter Grant Program, Ccuncil Member Slavik inquired how much
money is being funded by the City and Federal Government for this program, and
Minutes
Regular Council Meeting
March 8, 1988
Page 5
Assistant City Manager Elizondo stated that the grant will require a match of
$62,000 from local dollars, but those local dollars will be from the private
sector and not public dollars.
Council Member Strong noted that in comparing table 1/1 and table 112, the
changes that were implemented after the HUD grant was denied, and asked for some
justification for the Foodbank of Corpus Christi's funds going from $2,354 to
$5,044, and Mr. Elizondo stated that initially the City only included some
health and hygiene products, and the increase in the budget now includes some
food products that the City also wanted to make available.
In reference to Item No. 5 pertaining to the Botanical Gardens Waterline
Extension, Council Member Slavik noted that the Botanical Gardens will make good
use of the extension and are truly grateful for it.
In reference to Item No. 6 pertaining to the Texas State Aquarium -
Waterfront Improvements, Mr. J. E. O'Brien, 4130 Pompano, stated that if the
Council awards the contract today, they are putting the cart before the horse.
He stated he has no problem with awarding the contract, just with the timing.
He stated there is no one in the City who knows what the aquarium is going to
cost and inquired how much the construction of the aquarium will cost.
Mr. John Dorn, President of the Texas State Aquarium Association, stated
that the total cost of the project will probably be in excess of $55 million to
$60 million which will all be raised privately. He noted that there will be
four or five phases, and this is just discussion of Phase 1 which is the
construction of the Gulf of Mexico Exhibit Building. Mr. Dorn noted as it
relates to that, the City's cost will be $10 million; the City will not fund any
more; and the Aquarium Association is not in a position to ask for any more. He
noted that anything in addition to that will be spent totally, solely at the
Association's expense with the money they have raised.
In answer to a question from Mayor Turner, Mr. Quenton Dokken, Executive
Director of the Aquarium Association, stated that the total cost of the Phase 1
building is $24 million; of that the City's obligation is $10 million from the
Reinvestment Zone; $4 million for infrastructure; and there was $500,000 which
was invested in the project for design purposes. He noted out of the $24
million, the City's total obligation is $14} million.
Council Member Slavik inquired why the City is awarding the contract before
the third and final reading and stated she thought this is backwards and
tehnically not correct and suggested adding language to the contract.
Assistant City Manager Hennings stated this is part of the $4 million bond
proposition which was approved by the voters in 1986; that is separate from the
$10 million which is the subject of the lease agreement later on the agenda; and
this is moving ahead with the schedule for the City to implement the $4 million
Aquarium Bond Proposition. Mr. Hennings stated this was on the basis that the
construction of the aquarium would be entirely privately funded. Mr.
Minutes
Regular Council Meeting
March 8, 1988
Page 6
Hennings noted that since that time, the proposal has been approved to provide
$10 million in public funds and that is separate.
In answer to a question from Council Member Slavik regarding changes in the
agreement, Mr. Hennings stated if the lease agreement were not approved, the
City would be back to the original bond proposal where the City would spend the
$4 million including this project. He stated that the only reason that the
timing on this project is urgent Is because of the accelerated construction
schedule for the aquarium and the urgency of this project to stay on the
critical path, get the construction built and opened in early 1990. He noted
that, except for that, this project could be delayed if the construction were
not going to have public funds and they have to bring private funds for the
construction.
Council Member Slavik inquired if this had been checked out legally, and
Mr. Hennings reiterated that the voters approved in 1986 a $4 million Bond
Aquarium Proposition which includes this purchase; the City Council approved the
contract with the Aquarium Association agreeing to build those $4 million worth
of improvements; and the Aquarium Association agreed to build the aquarium. He
further stated that does not contemplate $10 million in public fundings; that
came later; if the $10 million of public funding does not happen, the original
proposition still holds. Mr. Hennings explained that the City still has a
contract with the Aquarium Association for the City to spend the $4 million
approved by the voters and for the Aquarium Association to build the aquarium.
Mr. Hennings pointed out that is what item #E6 pertains to, and later on the
agenda is the $10 million issue which would speed up the construction process.
He noted the only relationship between the two is the timing on the construction
process makes it imperative to go ahead with this bulkhead project now,
otherwise the timing would not be critical and it could be delayed because the
funds wouldn't be raised yet.
Mayor Turner noted that she will abstain from voting on Item No. 3.
A motion was made by Council Member Strong to approve Items 2, 3, 5 and 6;
seconded by Council Member Pruet and passed unanimously by those present and
voting; Berlanga and Guerrero absent at the time the vote was taken; Turner
abstaining en Item #3.
* is & f. * * * * * * * x is
Mayor Turner called for consideration of Consent Resolutions, Ordinances
and Ordinances from previous meetings, and a person in the audience requested
that Item No. 14 be withheld for discussion.
There were no comments from the audience on the other items.
City Secretary Chapa polled the Council for their votes and the following
were passed:
Minutes
Regular Council Meeting
March 8, 1988
Page 7
8. RESOLUTION NO. 20232
AUTHORIZING THE EXECUTION OF A CONTRACT WITH CHANNEL CONSTRUCTION COMPANY,
INC. FOR THE SLIPLINING OF APPROXIMATELY 7,300 LINEAR FEET OF 42" DIAMETER
SANITARY SEWER TRUNK MAIN ALONG CURTIS CLARK FROM EAST OF STAPLES STREET TO
EVERHART ROAD AND ALONG EVERHART ROAD FROM CURTIS CLARK TO BONNER STREET;
APPROPRIATING $1,247,620.59.
The foregoing Resolution passed by the following vote: Turner, Moss, Pruet,
Rhodes, Schwing, Slavik and Strong voting, "Aye"; Berlanga and Guerrero
absent at the time the vote was taken.
9. ORDINANCE NO. 20233
AMENDING ORDINANCE 19892 WHICH ADOPTED THE 1987-88 BUDGET BY PROVIDING FOR
THE CIVILIANIZATICN OF THREE ADDITIONAL SWORN POSITIONS IN THE POLICE
DEPARTMENT; AND DECLARING AN EMERGENCY.
The Charter Rule was suspended and the foregoing Ordinance passed by the
following vote: Turner, Moss, Pruet, Rhodes, Schwing, Slavik and Strong
voting, "Aye"; Berlanga and Guerrero absent at the time the vote was taken.
10. FIRST READING
AMENDING THE CITY CODE, CHAPTER 53, TRAFFIC, SECTION 53-254, SCHEDULE V.
INCREASE OF STATE SPEED LIMIT IN CERTAIN ZONES; PROVIDING FOR SEVERANCE;
AND PROVIDING FOR PUBLICATION.
The foregoing Ordinance passed on first reading by the following vote:
Turner, Moss, Pruet, Rhodes, Schwing, Slavik and Strong voting, "Aye";
Berlanga and Guerrero absent at the time the vote was taken.
11. SECOND READING
AUTPORIZING THE EXECUTION OF AN AGREEMENT WITH BRANT'S PLACE, INC. DBA
RIVIERA REDS SEAFOOD FOR THE OPERATION OF A FRESH AND FROZEN SEAFOOD AND
ALLIED SPECIALITIES CONCESSION AT THE AIRPORT; AND PROVIDING FOR
PUBLICATION.
The foregoing Ordinance passed on second reading by the following vote:
Turner, Moss, Pruet, Rhodes, Schwing, Slavik and Strong voting, "Aye";
Berlanga and Guerrero absent at the time the vote was taken.
12. SECOND READING
AMENDING THE CITY CODE, SECTION 2101.9 OF THE BUILDING CODE ADOPTED BY
ORDINANCE NO. 19287 TO PROVIDE THAT BID DOCUMENTS AND CONTRACTS INCLUDE
DETAILED PLANS AND SPECIFICATIONS FOR TRENCH SAFETY SYSTEMS; PROVIDING FOR
SEVERANCE; AND PROVIDING FOR PUBLICATION.
Minutes
Regular Council Meeting
March 8, 1988
Page 8
The foregoing Ordinance passed on second reading by the following vote:
Turner, Moss, Pruet, Rhodes, Schwing, Slavik and Strong voting, "Aye";
Berlanga and Guerrero absent at the time the vote was taken.
13. ORDINANCE NO. 20234
AUTHORIZING THE EXECUTION OF A FIVE-YEAR LEASE AGREEMENT WITH THE NATIONAL
LITTLE LEAGUE FOR A 4.35 ACRE TRACT OF LAND IN SOUTH GUTH PARK FOR
CONDUCTING A LITTLE LEAGUE PROGRAM; AND PROVIDING FOR PUBLICATION.
The foregoing Ordinance passed on third reading by the following vote:
Turner, Moss, Pruet, Rhodes, Schwing, Slavik and Strong voting, "Aye";
Berlanga and Guerrero absent at the time the vote was taken.
15. ORDINANCE NO. 20236
AMENDING THE CITY CODE, CHAPTER 13, BUILDINGS; CONSTRUCTION AND RELATED
OPERATIONS; HOUSING AND HOUSING PREMISES STANDARDS, SECTION 13-38, FEES FOR
IMPOUNDING, STORAGE, ETC., PROVIDING FOR SEVERANCE; AND PROVIDING FOR
PUBLICATION.
The foregoing Ordinance passed on third reading by the following vote:
Turner, Moss, Pruet, Rhodes, Schwing, Slavik and Strong voting, "Aye";
Berlanga and Guerrero absent at the time the vote was taken.
16. ORDINANCE NO. 20237
AMENDING THE CITY CODE CHAPTER 53, TRAFFIC, SECTION 53-60, SAME --REDEMPTION
OF VEHICLES; FEES FOR IMPOUNDMENT AND STORAGE; PROVIDING FOR SEVERANCE; AND
PROVIDING FOR PUBLICATION.
The foregoing Ordinance passed on third reading by the following vote:
Turner, Moss, Pruet, Rhodes, Schwing, Slavik and Strong voting, "Aye";
Berlanga and Guerrero absent at the time the vote was taken.
In reference to Item No. 14 pertaining to Amending the City Code of
Ordinances by Repealing Article V, Chapter 57, Adopting a New Article V, Chapter
57, Mr. Joe Dees, President of the Corpus Christi Wreckers Association, stated
that they have gone through this proposed change of Article V, Chapter 57 and
have a couple of amendments that they would like the Council to add to the new
article. He noted that last year they met with the Police Department and
discussed the possible proposal with the changes that govern the local wrecker
service to the Police Department. He referred to Item K under Sec. 57-237 and
noted that the City has virtually fourteen wrecker companies and they are on a
rotation list.
In answer to a question from Mayor Turner, Mr. Dees stated that they did
submit their recommendations to the Police Department. He stated they would
like to put a cap of fifteen on the number of companies on the rotation list
Minutes
Regular Council Meeting
March 8, 1988
Page 9
so that they can insure that every company will get two days a month working for
the City. He then presented material to the Council.
Council Member Rhodes inquired which fifteen companies and noted that some
one is going to actively choose one over the other, and that the Council cannot
do that with City money.
Mr. Dees stated this would eliminate double companies and suggested letting
the City choose who would provide the better service.
Council Member Guerrero concurred with Council Member Rhodes in that it
would be difficult to decide which fifteen. He noted that there is another
alternative, and that would be to open it up for bids. He inquired if that is a
viable alternative, and City Manager Garza replied that has been done in other
municipalities he has worked in, and he would have to research the law to see
what it allows.
Ken Bung, Assistant Chief of Police, stated they could not decide who
should be on the list; everyone should have an opportunity to participate; and
they did not put a cap on it.
Mr. Dees then referred to Ordinance No. 16941, Section 1. - Section 57-251
Maximum Wrecker Service and Storage Fees and noted that they have not had an
increase since 1982; they have had insurance increases in this time frame; a
normal tow is $35.00; and the profit is low. Mr. Dees stated they would like an
increase in the basic tow fee from $35.00 to $45.00.
Assistant Chief Bung stated that the Police Department did a survey on
cities and passed the list to the Council. He stated that the Police Department
does not have a problem with increasing the rate, but they did not think it was
their place to increase the rate. He noted that Corpus Christi is pretty much
in line with the rest of the cities in the State of Texas.
After some discussion, Council Member Guerrero noted that he has no problem
with the increase to $45.00. He stated that this may be an income source if the
City were to contract this and that he would like to pursue that.
A motion was made by Council Member Pruet to increase the fee to $45.00
with the idea that the City Manager be directed to consider the possibility of
contracting it out. The motion was seconded by Council Member Slavik and passed
unanimously by those present and voting; Berlanga absent at the time the vote
was taken.
City Secretary Chapa polled the Council for their votes and the following
Ordinance was passed as amended:
Minutes
Regular Council Meeting
March 8, 1988
Page 10
14. ORDINANCE NO. 20235
AMENDING THE CITY CODE BY REPEALING ARTICLE V, CHAPTER 57, AUTO WRECKERS,
AND BY ADOPTING A NEV ARTICLE V: DEFINING TERMS; PROVIDING A PENALTY FOR
VIOLATIONS; REQUIRING OPERATORS OF AUTO WRECKER SERVICES TO APPLY FOR AN
POSSESS AN AUTO WRECKER PERMIT FROM THE CHIEF OF POLICE; PROVIDING FOR
INSPECTION AND CERTIFICATION OF AUTO WRECKERS USED BY SAID AUTO WRECKER
SERVICES; PROVIDING FOR FEES FOR APPLICATION; PERMIT AND RENEWAL OF PERMIT;
PROVIDING FOR SUBSTITUTION OF WRECKERS BY PERMITTEE; PROVIDING FOR
ADDITIONAL AUTO WRECKERS TO BE ADDED TO THE PERMIT OF A PERMITTEE;
REQUIRING INSURANCE TO BE CARRIED BY THE PERMITTEE; REQUIRING PERMITTEE TO
MAINTAIN AN ADEQUATE STORAGE AREA; MAKING PROVISIONS FOR TOWING OR MOVING
OF VEHICLES; PROVIDING A SYSTEM FOR THE DISPATCHING OF WRECKERS TO THE
SCENE OF DISABLED VEHICLES; REGULATING FEES AND CHARGES FOR WRECKER
SERVICE; PROHIBITING THE SOLICITATION OF WRECKER BUSINESS ON PUBLIC
STREETS; PROVIDING THAT EACH WRECKER PERMIT SHALL BE NON -TRANSFERABLE;
PROVIDING FOR SEVERANCE; AND PROVIDING FOR PUBLICATION.
The foregoing Ordinance passed on third reading by the following vote:
Turner, Guerrero, Moss, Pruet, Rhodes, Schwing, Slavlk and Strong voting,
"Aye"; Berlanga absent at the time the vote was taken.
Mayor Turner called for consideration of Item No. 17 pertaining to the
Aquarium Lease.
Assistant City Manager Hennings stated that about three weeks ago the City
Council passed first reading on a lease agreement with the Texas State Aquarium
Association, and today Item No. 18 is the second reading of that Ordinance. He
noted that Item No. 17 is a proposed motion to amend before the second reading.
He stated the purpose of the lease agreement is to implement the City Council's
decision to provide $10 million in funding for construction of the aquarium; to
accelerate the schedule so that the community can realize the economic impact of
that facility as soon as possible.
Mr. Hennings continued by stating that the lease agreement was patterned
after non-profit corporations such as the Art Museum of South Texas, the Harbor
Playhouse and the Water Garden. He noted that when staff reported three weeks
ago, they told the Council that they expected some changes would be needed as a
result of the Bond Counsel's advice, and today there is a proposed motion to
amend the Ordinance. He stated the primary purpose of the motion to amend is to
implement the recommendation of the Bond Counsel to change the timing of the
payments by the City and the conveyance of the property from the Aquarium
Association to the City. He stated the original proposal would have the City
paying the $10 million in monthly payments as the construction progressed. He
stated that the advice of the Bond Counsel is that payment should not take place
until the construction is completed; in other words, the City should deposit its
$10 million in an escrow account where it will earn interest; the Aquarium
Association should construct the aquarium; and when it is completed, at that
Minutes
Regular Council Meeting
March 8, 1988
Page 11
point in time, then the Aquarium Association will convey it to the City; and the
City will pay the Aquarium Association the $10 million.
Mr. Hennings noted there are a couple of complications that arise out of
that; first of all the Aquarium Association needs to borrow the money to build
it; there will be a ccst associated with that construction loan; interest on
that loan will run $1,018,000; the proposed motion to amend provides that the
City would reimburse the Aquarium Association for that interest cost on that
construction loan, that money to come from the interest earnings on that $10
million escrow account. He stated that the $10 million escrow account should
earn about $1,342,000 and from that, $1,018,000 would be reimbursed to the
Aquarium Association for the cost of the construction loan.
Mr. Hennings noted there are two other smaller costs; one is the title
insurance cost for the Aquarium Association which will be increased because of
the change in timing; the improvements will be completed; the title insurance
will cost more; and the Aquarium Association is asking the City to pay 80
percent of the cost of title insurance which staff estimates will be $49,000.
He noted there is about a $40,000 cost for the City to reimburse the Aquarium
Association for title insurance and then there are normal closing costs
associated with a contract such as this, and staff estimates that closing costs
will be about $2,000 or $3,000.
Mr. Hennings continued by stating in addition to the $10 million payment
for the aquarium project, the proposed motion to amend would obligate the City
to pay the Aquarium Association $1,018,000 to reimburse the interest on the
construction loan, $40,000 as 80 percent of the cost of title insurance, and
$2,000 to $3,000 in closing costs; the total of $1,060,000 which would come from
the $1,342,000 interest earnings on the $10 million while it is in escrow.
In answer to a question from Mayor Turner, Mr. Hennings stated the Bond
Counsel's advice is that the City should not make payment until the project is
constructed; they are recommending this should be a sale at completion, instead
of a construction in progress.
In answer to a question from the Mayor, City Manager Garza stated that the
City is buying the aquarium; the City is not financing the construction; and
that is the difference. He noted when you are spending public moneys, you need
to get into advertisements and competitive bidding, etc.; the City is not doing
that; the City is buying an aquarium when it is complete; and that is why it
must be done this way.
Council Member Rhodes noted that there really was not sufficient time to
read all the material that the Council was provided and noted that this second
reading is a completely different ordinance. She complimented Attorney Jimmy
Bray for putting the summary sheet together which pointed out the differences.
In answer to a question from Mayor Turner about a way to avoid having to
pay all that interest, and Assistant City Manager Utter stated in terms of
Minutes
Regular Council Meeting
March 8, 1988
Page 12
paying the interest, you have to assume the City had the choice of giving the
Aquarium Association $10 million. He stated basically the City has to place
$10 million, in an escrow account with interest; this would be directly in
treasuries or a collateralized security; it is estimated to earn interest at
approximately 6.5%; and that will generate about $1,342,000 in interest over the
twenty-four month construction period.
Mr. Utter continued by stating the aquarium will come in with the interim
loan which staff feels will be a favorable loan; they anticipate the interest on
it to be about $1,017,000; at the same time the City will end up with about
$200,000 that they would not have had if they simply gave the aquarium money or
let them draw directly from it. He stated the reason the City has to do it in
this manner is because in terms of issuing the bonds, these bonds must be for
the purchase of structures, it is not for the construction of it.
Mr. Utter ran thru the financial structure very briefly of this particular
project. He stated the City has a tax incremental financing zone, Reinvestment
Zone #1, which is providing for this project and for the museum exparsion; it
has been approved by the City Council, CCISD, Nueces County and he stated he
understands that Del Mar will take action very shortly. He stated the total
cash needs are $10 million for the Texas State Aquarium and $1,900,000 for the
museum. He stated right now there is a little over $3 million in the
Reinvestment Zone; however, if you remember the understanding that the
Reinvestment Zone Board had with the other taxing jurisdictions, the City is
going to return a certain portion of those funds that were captured in the
Reinvestment Zone prior to January 1, 1987. He stated basically what that
allows the City to do in terms of the refinancing is if you take the funds that
the City has captured since January 1, 1987, that is about $946,000, plus
approximately $732,000 in funds they had captured prior to 1987 and with the
interest on all of those funds increases the total to $1,827,000.
Mr. Utter continued by stating staff anticipates being able to sell
something called TIFCO's; these would have the same rating as the City of Corpus
Christi; they would be Corpus Christi's Certificates of Obligation; they would
be paid from revenues from the Reinvestment Zone; and staff anticipates that the
revenues from the Reinvestment Zone in the 1988-1989 tax year will be about
$1,400,000. He stated in order to pay off these TIFCO's, if we have an interest
rate of approximately 7.6%, that is what we estimate right now, then we will
need an amortization or debt service payment of approximately $1,196,000 a year,
or it will take approximately 81 percent of the revenues that we project in the
Reinvestment Zone next year. He stated that gives you a 20 percent coverage and
he explained the reason why they picked this structure. He stated they felt
this particular mechanism was by far the cheapest; it has the advantages that we
don't have to have a reserve; it has the advantage that we don't need bond
insurance; it has the advantage that it is the cheapest route to go; and it also
will require less of the TIF funds to be held in reserve.
In answer to a question from the Mayor, Mr. Utter stated that during the
past five or six years, the City has issued CO's; a certificate of obligation is
Minutes
Regular Council Meeting
March 8, 1988
Page 13
backed by the full faith and credit of the City. He stated the City has
revenues from the Reinvestment Zone that exceed the amortization of these bonds;
so from that standpoint, it would have no effect on the tax rate, nor would it
have an effect at the rating agency.
Mayor Turner inquired if it is considered a liability on a City's debt
service, and Mr. Utter replied in the affirmative, but as an asset, there is
the debt service coming in from the Reinvestment Zone. He stated, in essence,
it is equal.
Council Member Rhodes inquired about the result if there is not any revenue
from the Reinvestment Zone, and Mr. Utter referred to the debt service schedule
and stated that the City will need approximately 81 percent of the revenues
projected in the 1988-1989 fiscal year. He stated that leaves a twenty percent
cushion.
In answer to a question from Council Member Rhodes about the worst case
scenario, Mr. Utter stated if the Reinvestment Zone fell into the hay; if the
City received zero revenues; then the full faith and credit of the City of
Corpus Christi would be required on these bonds.
In answer to a question from the Mayor, Mr. Utter stated the anticipated
revenue base for 1988-1989 includes One Shoreline Plaza which will be about
$1,480,000, and the amortization at 7.6% interest is $1,196,000. He stated that
is 81 percent; this is by far the cheapest and most expeditious method to get it
done; and the City has utilized this method before several times.
Council Member Slavik expressed concern about the change in the agreement
and noted that there was a lot of material for the Council to read and stated
she would rather take a little more time and make sure the Council and the
public understand the contract. She noted this is a change from the first
reading and inquired about the costs regarding the Durden and Fulton Company,
and Mr. Utter replied the City does not have the bottom line cost because the
Aquarium Association is still negotiating with the Durden & Fulton Company.
Council Member Slavik inquired how much the City will have to pay for the
land and the buildings, and Mr. Utter replied the City will have $10 million
from the Reinvestment Zone TIFCO's that was put in escrow; that $10 million plus
a portion of the interest that is generated during the construction will be
utilized to purchase the aquarium and the land in fee simple; it is estimated
that the interest will be $1,017,000; $40,000 for the title policy, 80 percent
of which the City pays for; and approximately $3,000 for closing costs.
Mrs. Slavik requested those figures in writing and Mr. Utter noted that
will be done.
Minutes
Regular Council Meeting
March 8, 1988
Page 14
In answer to a question from Council Member Slavik, Mr. Utter stated that
it is the staff's understanding that the Aquarium Association is a permanent
fixture in the City of Corpus Christi, and twenty years was put in the contract
because both the Aquarium Association and the City together felt that was a
sufficient time period. Mr. Utter stated he is sure it will be renegotiated at
that time.
Assistant City Manager Hennings noted that there are some precedents such
as the Art Museum lease which was originally a five-year lease and was
subsequently renewed; and the Harbor Playhouse lease which was originally a
five-year lease and has been renewed. Mr. Henings stated there have been a
number of agreements such as this.
Discussion followed by Council Members expressing their concerns, and
Council Member Rhodes inquired whose liability it is if the projections are
inaccurate, if the City is buying this building, how much liability the City
will incur, and Assistant City Manager Hennings stated the proposed lease
agreement does not create liability for the City; the property would be owned by
the City and leased to the Aquarium Association; if the Aquarium Association
went into default, there are provisions in the proposed lease for default, but
the City has no obligations under the terms of the lease to continue to operate
the aquarium if the Aquarium Association does not do it.
In answer to a question from Council Member Slavik about shutting the
aquarium down completely, Mr. Hennings stated at that point the City Council
would obviously have a decision to make; the City would be in a position to
either close it, keep it open, or to modify its operations.
Mrs. Slavik referred to material the Council received from Mr. Utter dated
March 3 and suggested that new language be added and a word deleted regarding
subcontractors, and Assistant City Manager Utter stated there is a difference
between work that is competitively bid by the City and work that is
competitively bid in the private sector; in the private sector when the
contractor goes out to get subcontractors, he solicits bids from subcontractors;
it is correct that this is being competitively bid in the private sector; the
reason that it says the majority will be bid competitively in the private sector
is simply because there are a few things that are sole source, such as the
glass, that cannot be competitively bid.
After more discussion, John Dorn stated this will be a building that will
probably have a total investment of $11 million to $12 million; there is land
that has already been purchased and paid for at $2 million value; and this could
all be given to the City. He stated through the City's investment, there will
be $13 million to $14 million worth of value being given back to the City in the
form of assets that the City is not paying for. He noted there are no
guarantees in life; the statistics of projected attendance as a result of
Minutes
Regular Council Meeting
March 8, 1988
Page 15
surveys have resulted in projected revenues according to the lowest estimates
which still project a positive cash flow. Mr. Dorn noted that he thought the
risk is extremely low.
In answer to a question from Council Member Rhodes about the bidding
process, Mr. Dorn stated that the negotiated contract with the main contractors
required him to obtain competitive bids on approximately 90 percent of every
aspect involved in the aquarium. He stated that the bidding process, whether
they are sealed bids or posted bids, is not the issue here; the real issue here
is under City statute, the City Council is obligated to take the low bid. He
noted that under the process that they are referring to, they are not under such
obligation.
Council Member Rhodes expressed concern about the bidding process and
inquired who decides who gets the bid, and Mr. Dorn replied the general
contractor, along with the Aquarium Association.
City Manager Garza pointed out that the City is not obligated to take the
low bid and stated the City is allowed to take the best bid.
Mr. Bob Shackelford, 3425 Tahiti, Construction Manager for the Texas State
Aquarium, stated that they did have a competitive solicitation of prime
contractors who could bond a project of this size; it was publicly advertised;
they had expressions of interest; they did have a selection process; and the low
proposal was that of the Durden & Fulton Co. He stated as they move into the
process of carrying out the construction and taking bids on the construction,
they will have plans and specifications that will be sent out to interested
subcontractors and bids will be received from those subcontractors. Mr.
Shackelford stated it is their intention that they bring competition into the
process of pricing the aquarium to the maximum extent possible and stated that
all the general construction will be bid.
Mr. J. E. O'Brien, 4130 Pompano, stated that all of the other taxing
entities in the Reinvestment Zone have not signed off on this issue,
specifically Del Mar College. He inquired if and when the City is going to
approve the changes made by Del Mar. Mr. O'Brien noted that the first reading
was for a twenty-year lease and the second reading has major changes in that
lease. He noted that these major changes could constitute a new contract. He
stated that the construction contract cost will not be known until the month
after the City sells the bonds, even though the aquarium is supposed to provide
the difference.
Mr. O'Brien referred to projections and a report that aquariums have a
decrease in attendance in the second and third year of up to thirty percent. He
stated if this should develop, the City could have a loss of $} million in that
second or third year and inquired if the Aquarium Association will be in a
position to pick that up or if it will fall on the City. He expressed concern
if those projections are completely erroneous. He further stated he did not
understand the term 75% construction waiver and requested an explanation. He
Minutes
Regular Council Meeting
March 8, 1988
Page 16
inquired how the Aquarium Association can attempt to replat the aquarium
subdivision when there are lands contained therein that they do not even own.
He referred to the intricate financing mechanism and noted it sounds to him as
if someone is trying to circumvent the law. He inquired what the estimated
interest is on the bank loan that the local banks are going to charge and who is
paying for the Fullbright and Jaworski attorney bill. He noted he supports the
aquarium and would like to see it built but he would like to slow things down.
Assistant City Manager Utter stated, in terms of Del Mar, the Bond Counsel,
Underwriters' Counsel, Counsel for the paying agent and the City's own Counsel
believe very strongly and are convinced that Del Mar does not have to sign the
contract. He stated that Del Mar approved a contract a month ago; that contract
had some requests in it that the City did not think they could live with;
subsequently, there has been a meeting of the minds; it is a contract that was
sent to the Council with minimal changes; that has not yet been approved by the
Board; but it is his understanding it will be approved.
In answer to a question from Council Member Rhodes, Mr. Utter stated that
they do not want to bring another contract back to the Council until they have
the signature from Del Mar and noted that the Council will receive it and vote
on it.
Council Member Slavik reiterated that she would like in writing the total
cost of the project.
In answer to a question from Mrs. Slavik, Mr. Utter stated that in terms of
the memorandum that was given the Council, the fourth page from the back shows
the cost of issuance and underwriters' discount at $326,250 and noted all of
those dollars come from the Reinvestment Zone. He stated that is all still
within the debt service cost of $1,196,000 a year.
In answer to a question from Mrs. Slavik about the 75% construction waiver,
Mr. Utter stated that is strictly a matter of platting and has nothing to do
with fees, and Assistant City Manager Hennings stated that the property to be
platted is owned by the City, the Aquarium Association and the Port Authority of
Corpus Christi and noted all three of those parties will sign the plat. Mr.
Hennings stated that the platting ordinance requires that 757 of the
infrastructure improvements required by the platting ordinance be completed at
the time the plat is filed for record. He stated that the association is going
to request a waiver of that requirement because some of the infrastructure
improvements will not be completed until later in the project. He stated that
the 75% is part of the planning process and will come to the Council as a
request for an exception.
Council Member Pruet inquired about the financing team as it relates to the
development of the financial scenario, and Assistant City Manager Utter provided
names of all the members of the financing team.
Minutes
Regular Council Meeting
March 8, 1988
Page 17
City Manager Garza pointed out that he is always very concerned when it
comes to pledging the City's full faith and credit for any project; this one in
particular is not strictly the City's; and it is so important that he felt that
it needed to be done because it really was the one way it could be done at a
reasonable cost.
Council Member Rhodes inquired of Attorney Bray if the amendments in the
contract are legal or does the City have to start over, and Mr. Bray replied he
did not think it has to be started over and also noted it is in compliance with
the law.
Council Member Rhodes referred to replatting and asked if there is a
problem, and Mr. Hennings replied the plat that will be filed will be property
that is owned by the City, the Aquarium Association and by the Port of Corpus
Christi and will be a joint plat signed by all three parties.
Mr. Irving Dietz, 455 Miramar, expressed concern about this proposed
arrangement. He stated that nothing has been said about the commitment made by
the Aquarium Association to the voters of the City with regard to the $15
million. He stated there does not seem to be any connection between the
original $15 million that the taxpayers had a chance to vote on and what is
being discussed today. He referred to the general contractor's contract, and
stated it will not be subject to competitive bidding; and asked if only the
subcontractors will be subject to competitive bidding.
Mr. Shackelford stated that the bid for construction will be competitive
and they will send out bid packages sometime this year.
Mr. Dietz noted a clause in the proposed lease and stated employees of the
aquarium will be allowed to park in the public parking and noted that the
general public who built the parking lot is net even mentioned, and Assistant
City Manager Hennings pointed out in the motion to amend it adds clarifying
language that if there is a charge for parking, it may be assessed against
aquarium employees as well as others.
A motion was made by Council Member Pruet to amend prior to second reading
the ordinance approving the aquarium lease, as passed on first reading on
February 16, 1988, and the exhibit thereto, to provide that the City will
purchase the aquarium and site from the Texas State Aquarium Association after
construction is substantially completed; to provide that the Association will
obtain interim financing; to incorporate an exhibit G providing the substantial
form of a purchase agreement; and to make certain other changes and
modifications in the aquarium lease. The motion was seconded by Council Member
Guerrero and passed by the following vote: Turner, Berlanga, Guerrero, Moss,
Pruet, and Rhodes voting, "Aye"; Slavik voting, "No"; Schwing and Strong absent
at the time the vote was taken. (488-0052)
Minutes
Regular Council Meeting
March 8, 1988
Page 18
City Secretary Chapa polled the Council for their votes and the following
ordinance was passed on second reading:
18. SECOND REAPING
AUTHORIZING THE EXECUTION OF A LEASE AGREEMENT WITH THE TEXAS STATE
AQUARIUM ASSOCIATION FOR THE AQUARIUM PROJECT; AND PROVIDING FOR
PUBLICATION.
The foregoing Resolution was passed on second reading by the following
vote: Turner, Berlanga, Moss, Pruet, Rhodes, Schwing and Strong voting,
"Aye"; Slavik voting, "No"; Guerrero absent at the time the vote was taken.
* * * * * * * * * * * * * *
Mayor Turner called for Council liaison reports and other reports from the
Council and Staff.
City Manager Garza referred to the Council action on Item No. 14 and noted
that for the record he wanted to indicate that action raising the fee from
$35.00 to $45.00 should be included as an amendment to the code as it affects
Items 14, 15 & 16. The Council indicated their concurrence.
City Manager Garza noted he is very pleased about his new position; he gave
his word that he will do his very best; and that he hopes the good Lord gives
him the courage always to face his mistakes in a forthright manner.
Mr. Garza informed the Council that he attended a grand opening of the
artist Amado Pena's exhibit at the Texas A&I University and he asked the artist
if he would be interested in donating one of his works to the City of Corpus
Christi and Mr. Pena replied he would be happy to do so if there was a request
in writing.
Mayor Turner informed the Council that the date of October 22 will be the
recommissioning of the Wisconsin.
City Secretary Chapa reported that the presentation by Berney Seal on the
Area Economic Development Corporation is scheduled for the evening Council
Meeting on March 15 at Kostoryz High School, as well as the presentation by
Chief Robert Olson.
Mayor Turner requested that there be a workshop meeting some time next
Tuesday.
Council Member Moss noted that one of the issues discussed at the Regional
Transit Meeting last week was that when the City had the Transit Authority they
started a handicapped service for $.25C and that it was optional to pay. He
stated apparently no one paid and now the Transit Authority is trying to
establish a mandatory $.35C charge. He noted that the service costs an average
of $7.50 for each first time they make a pick-up and noted they are having a
Minutes
Regular Council Meeting
March 8, 1988
Page 19
lot of trouble with the community accepting the charge. He noted most cities
charge at least $1.00.
Council Member Pruet reported the City is being besieged by spring breakers
and noted a lot of them will be signing up for the Olympics Program.
* * * * * * * * * * * * *
Mayor Turner called for petitions from the audience on matters not
scheduled on the agenda.
Mr. James Black, Tournament Chairman for the Texas Riviera Invitational,
referred to an event that will become a great asset to the Coastal Bend, that
being the Texas Riviera Invitational Golf Tournament scheduled for April 18 -
2G. He requested the Council's moral support and any suggestions they might
have to offer.
Mr. Jack Powers referred to golf and inquired if there are plans in the
future for additional golf courses or any plans to purchase land anywhere, and
City Manager Juan Garza replied the City has no plans to open a third golf
course. Mayor Turner suggested checking it out with Charles Blum of the Park &
Recreation Board.
Mr. Curtis Rich, 5314 Crossridge, provided the Council with an update on
the adult softball fees. He referred to privatization and noted that Grandstand
is prepared to privatize and relieve the City of adult softball. He requested
help, and City Manager Garza referred him to Assistant City Manager Bill
Hennings.
Mayer Turner noted that someone needs to put together a proposal concerning
this item, and Mr. Garza noted that the Staff will prepare a recommendation.
Mr. Wesley Harring, 4938 Chatfield, referred to Item No. 14 and inquired
when that ordinance takes effect, and City Attorney Hal George stated he needs
to speak to Assistant Chief Bung, and that the general rule is that ordinances
are effective upon passage; this ordinance has a publication requirement; and it
will have to be published before it is effective.
Mr. Ron Edmonds stated this is the first Council Meeting he ever attended
and he enjoyed it. He referred to the $100,000 which will be given to Craig
McDowell and stated that he hopes the Council knows what they are doing but that
he trusts them.
Mayor Pro Tem Berlanga informed the Council of a letter from the Nueces
County Community Agency, which is a non-profit organization, who would like to
occupy the first floor of the old City Hall. He stated they will assume
responsibility for any renovation and are willing to pay appropriate monthly
user fees. Mr. Berlanga noted that if the City could rent each floor out, then
there would be no problem.
Minutes
Regular Council Meeting
March 8, 1988
Page 20
Council Member Pruet referred to status reports which used to be in their
packets in the back of their books and noted that he missed those and inquired
about the idea of reinitiating those status reports, and City Manager Garza
stated it is a very effective way of getting things done and if the Council
requests it, the Staff will start doing it.
Assistant City Manager Utter informed the Council that Del Mar has just
signed their contract.
There being no further business to come before the Council, on motion by
Council Member Pruet, seconded by Mayor Pro Tem Berlanga and passed unanimously,
the Regular Council Meeting was adjourned at 5:30 p.m., March 8, 1988.
* * * * * * * * * * * * *
CLIFTON L. MOSS
P. O. BOX t 161
CORPUS CHRISTI, TEXAS 78411
512/854-9514
March 8, 1988
We are the Board of Directors of an organization belonging to
250,000 people, with an annual budget of over $200 million. If we act today
irresponsibly and in a self serving manner, we deserve to be removed from
office.
If some members of this Council vote today to dismiss Mr.
McDowell and install a successor, as I have heard will happen, I think- they are
doing a grave injustice to the City and citizens of Corpus Christi.
I wonder what is really happening. Last Saturday morning I heard 5
or 6 members of this Council on' last Friday afternoon revised our published
agenda for.this morning. I was not notified of it so I called the City Secretary
Saturday morning. He verified it. I was told yesterday by one Councilman that
"we will meet Tuesday, reach a-concensus and call Mr. McDowell in to tell him
our concensus." Is there a conspiracy going on? Has the open meetings act -
been violated?
.1
• Mr. McDowell was hired in '86 by a Council --5 of whom sit on this
one. He has been here less than 2 years, completed only one budget, and has
brought neW and needed management techniques to Corpus Christi. I have
disagreed on some things he has done, but I think he has demonstrated
management techniques common with successful executives. I have found him
responsive, cooperative, honest, and above board. Some of the staff he
inherited have not adjusted too well to some of this. But, the people he has
brought in have been excellent.
The last time we as a Council met together to talk to Mr. McDowell
--just 6 months ago, last August --we gave him 100% approval and doubled his
termination pay. Also at that time we agreed to evaluate him in 3 months..
This Council did not do that as scheduled.
We as a Council are derelict in waiting until now to discuss his
performance. It seems that al) 9 of us have been going to him separately each
with our own agenda (tir somC personal ambitions). The citizens perceive that
he is satisfactory in that we have not voiced any criticism. We are liable for
very strong criticism if we take extreme negative action today without any
prior indication of problems with his performance. If any one knew of wrong
doing it should have been brought to us as a Council immediately.
There is nothing wrong --in fact commendable --if we today give
him evaluation and direction, along with a time frame for accomplishment.
a
I HEREBY CERTIFY that the foregoing is a true and correct copy of the
Minutes of the Regular Council Meeting of the City of Corpus Christi of March
8, 1988, which were approved by the City Council on March15, 1988.
WITNESSETH MY HAND AND SEAL, this the /fk/=