HomeMy WebLinkAboutMinutes City Council - 06/16/1992 - SpecialMINUTES
CITY OF CORPUS CHRISTI, TEXAS
Special Council Meeting
June 16, 1992
3:30 p.m.
PRESENT
Mayor Mary Rhodes
Mayor Pro Tem Betty Jean Longoria
Hall.
Council Members:
Cezar Galindo
Leo Guerrero
Edward Martin
Joe McComb
Dr. David McNichols
Clif Moss
Mary Pat Slavik
City Manager Juan Garza
Assistant City Attorney Ruben Perez
City Secretary Armando Chapa
Mayor Rhodes called the special meeting to order in the Council Chamber of City
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 Rhodes opened the discussion on the public utilities issue.
City Manager Garza gave a presentation on the proposed 1992-93 budget through the
use of illustrative charts depicting related percentages and summaries, explanations of
recently distributed materials, and brief question and answer periods.
Mr. Garza stated he directed a realignment of the preliminary budget to project
vacancies throughout FY 1992-93, balance each fund through revenues and expenditures,
and where possible, move toward a closing balance of five percent. He further stated that
these were attempted through revenue increases and reductions in services without reduced
service quality.
Mr. Garza commented on the Combined Utility System Revenue and Expenditure
Summaries in the Recommended Annual Operating Budget book. He referred to the 1991-
92 estimated closing balance of $7,360,082 and the estimated 1992-93 budget amount of
$3,093,116. He stated that in order to understand this decrease, each utility needed to be
MICROFILMED
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3pecial Council Meeting
June 16, 1992
Page 2
examined on an individual basis and that these amounts were based on the reoccurrence of
the same weather conditions. He further stated that during the next fiscal year an operating
deficit would occur when current revenues are compared against current expenditures.
Council Member Martin stated that the planned budget included a $5 million
revenue to expenditure variation including the rate increase and that, due to this year's
expenditure cut backs excluding the rate increase, the final budget figure has a $6.8 million
difference. Mr. Martin further stated that this situation affirms that the current revenues
are not keeping pace with our expenditures and the City is spending beyond the revenue
amount which included pay-as-you-go capital improvements and utility funds. Additionally,
the City has allowed major capital expenditure improvements from the operating budget and
that this needs to be terminated. He also commented that future capital improvements will
require a bond issue and that the operating budget requires further adjustments to help
alleviate the deficit.
Responding to the inquiry of Council Members Martin and McComb, City Manager
Garza stated that the proposed operating budget contained the proposed reductions and rate
increases. A discussion developed and it was determined that the $5.5 million deficit was
in the general fund, and a separate amount of $7.2 million deficit was in the combined
utilities fund. Mr. Garza explained that revenues are down in the three utility funds and
expenditure reductions have been implemented throughout the year to help alleviate these
deficits.
Mr. Garza further explained the proposed service reductions in the Combined Utility
System. These reductions included the elimination of $417,000 for chemicals purchased to
control Wastewater odor for the treatment plants as well as various collectors throughout
the system. Mayor Rhodes referred to the gas scrubber system and inquired if the chemicals
would still be needed with this equipment, and expressed concern regarding increased odors
in the area. Further, Council Member McNichols requested more information in order to
make a final determination on this issue and Council Member Martin suggested that
Engineering examine the entire process to ascertain the precise problems.
City Manager Garza next explained the proposed budget reduction regarding the
transfer of responsibilities for water line services (located in right-of-ways) from the
Wastewater Department to the customer. He stated this would provide a budget reduction
of $186,000. Mr. Garza illustrated these specific water line areas on a chart diagram.
Responding to Council Member Martin's question regarding the present and proposed
service, Mr. Garza explained the service starting with the customer's telephone call through
the final stage of repair. Mr. Martin further inquired regarding the manpower required to
do this job, and Mr. Cockroft explained that a two man crew is presently used and the
equipment was updated two years ago. City Manager Garza stated that the personnel
elimination in this department included eleven positions which should not affect the quality
of service. Council Member McNichols expressed concern regarding the unavailability of
City personnel to solve problem blockages, and City Manager Garza stated he would
provide further information on this matter. Mr. Garza further commented that the proposed
alternative to this personnel reduction would involve the establishment of a user fee to be
charged when the service is used. Council Member McNichols expressed concern regarding
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Special Council Meeting
June 16, 1992
Page 3
the determination of whether the blockage is located on the side belonging to the City or
to the customer. Additionally, Council Member Martin inquired regarding the number of
calls for the water line stoppage service and it was determined that there are approximately
19,000 calls per year.
City Manager Garza next discussed the water, wastewater, and gas rates and referred
to charts which depicted the history of these rates. He stated that the City's rates have been
reasonable. A discussion ensued regarding a comparison of rates with various cities
throughout Texas. Mr. Garza further stated that the debt service requirements would
increase over the next five years and commented on the needed capital improvements in the
amount of $44,075,000. He further stated that these improvements are needed to upgrade
the City's aging infrastructure, meet stricter regulatory parameters, and expand the present
systems.
Council Member Martin inquired if the price for natural gas has increased or if more
gas has been sold, and City Manager Garza stated that the cost of gas has increased and the
City has sold less. He further stated that the cost of service should produce enough revenue
to pay for the gas.
City Manager Garza next referred to the reduction of one 3 -man Water leak crew
that would save the City a total of $54,185, and explained most service calls can be
effectively handled by the remaining 2 -man crew. Responding to Council Member Martin's
inquiry regarding the slowed response time for this service between the hours of 1:00 and
6:00 a.m., City Manager Garza explained that additional crews would be designated in the
event of a main water line break.
City Manager Garza next commented on the proposed cutbacks in employment in
the Combined Utility System that would save the City the amount of $882,000. He
explained that the 58 deletions would be minimized through automation, computerization,
consolidation, and the restructuring of job duties. Responding to Council Member Martin's
inquiry, City Manager Garza stated that a majority of savings from cutbacks would be
evidenced through workmen's compensation insurance provided by the City, and that private
contractors are required to carry this insurance.
Responding to Council Member Galindo's inquiry, Mr. Garza stated that the overall
combined utility fund has a positive final year end balance in 1991-92 and in 1992-93 with
a $40 million reserve. Further, Mr. Garza stated that the utility funds pay the general fund
for services rendered. This amount is determined by hired consultants who calculate the
service fee.
A discussion developed regarding the transfer of street sweeping operations from
Solid Waste Services to Stormwater Utility, and Mr. Garza stated this new utility could raise
revenues through a user fee based on each parcel's runoff and would function as any other
utility. This service would be self-supporting with the complete capacity of issuing revenue
bonds to finance capital improvement projects. Council Member Martin suggested that this
fund could also be transferred to the Wastewater fund.
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Special Council Meeting
June 16, 1992
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Mayor Rhodes stated she would appreciate a policy for regulating the use of lawn
blowers in the City because she has received numerous calls regarding this issue.
City Manager Garza discussed the gas departments 1990-91 actual revenue in the
amount of $21,212,877 and compared it to the estimated 1992-93 amount of $21,480,618.
A discussion developed and it was determined that the City's revenue in the Gas Utility has
decreased eight percent. This decrease involves the cost of service component and is
anticipated to be present next year.
Council Member McNichols commented on the balancing of current revenues and
expenditures, and working towards the five percent closing balance. He further stated that
the water and wastewater projects cannot be accomplished without an increase in rates. Mr.
McNichols further stated that these improvements need to be done at this time and referred
to the water sinking fund to buy out the debt service from the Bureau of Reclamation and
remove the debt from the City.
Council Member McComb inquired if the combined utility fund is an enterprise fund
that is not affected by the ad valorem tax, and Mr. Garza stated in the affirmative.
City Manager Garza stated there are some problems with the Combined Utility
System's decreased revenues and this is the main reason for the proposed utility rate
increases.
City Manager Garza further commented on the $72 million Wastewater Capital
Improvement Program introduced three years ago which would have required significant
rate increases in the wastewater rate for implementation. He further stated that some of
these improvements have been implemented but that $44,075,000 remained which would still
facilitate a rate increase. City Manager Garza further referred to the growth in the
infrastructure and negative growth in the number of Gas customers. He stated that through
the expansion of the water, wastewater, and gas systems, maintenance services have
increased.
Mayor Rhodes stated that she felt that the majority of delinquent accounts were due
to people not having the money to pay the bills and not because these people were using
the money somewhere else.
Council Member Slavik commented on four ideas for cutting utilities. First, she
inquired of the number of utility delinquent accounts over $500 and the effort involved in
the collection and City Manager Garza reviewed the delinquent notice procedure process.
Mrs. Slavik further inquired regarding (2) raising delinquent utility fees from $5 to $20, (3)
allowing the use of credit cards for Solid Waste and utility accounts, and (4) lowering the
payment to Choke Canyon fund. City Manager Garza discussed the procedure preceding
water cut-offs and discussed the use of credit cards previously implemented for utility
charges.
Council Member McNichols suggested that after the discussion of major budget
issues, the consideration of budget alternatives be scheduled for the July 7 meeting. This
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Special Council Meeting
June 16, 1992
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would leave one additional week before final adoption on July 21. City Manager Garza
referred to the distributed material on additional options which included the senior citizen
exemptions, early payment discounts, transportation user fees, law enforcement costs for
public events, outside agency funding, library books, garbage pickup, TMRS benefit
reduction, automobile use expenses, and privatizations. Council Member Martin requested
a list from Mr. Garza which would identify the decisions which concern a change in service
levels before July 3, and requested a report on Municipal Court. A discussion developed
and it was determined that a revised calendar would be presented at a later date.
Council Member Martin expressed concern regarding winter averaging and requested
complete detailed information on the matter. A discussion developed and it was determined
that a rate increase should follow a utility system change and not visa versa. Mr. Garza
further commented that the time frame would include the three meter readings between
November 15 and March 1, which will set the permanent rates. Mr. Garza stated that the
first reading ordinance on the utility rate increase would also be introduced at the next
council meeting.
Council Member McComb commented on the time frame for the industrial district
contracts and requested Mayor Rhodes to contact the Chairman of the Board of Trade to
determine the present phase of the contract negotiations.
Mayor Rhodes asked for comments from the audience.
Mr. J. E. O'Brien, 4130 Pompano, commented on the fees assessed against the
industrial districts, winter averaging, and the Choke Canyon reserve fund balance.
Mayor Rhodes adjourned the meeting.
There being no further business to come before the Council, Mayor Rhodes declared
the Council Meeting adjourned at 7:35 p.m. on June 16, 1992.
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 June 16, 1992, which were
approved by the City Council on June 23, 1992.
WITNESSETH MY HAND AND SEAL, this the 21st day of July, 1992.
Armando Chapa
City Secretary
SEAL