HomeMy WebLinkAboutMinutes City Council - 06/23/1992 - SpecialMINUTES
CITY OF CORPUS CHRISTI, TEXAS
Special Council Meeting
June 23, 1992
3:50 p.m.
PRESENT
Mayor Mary Rhodes
Mayor Pro Tem Betty Jean Longoria
Council Members:
Cezar Galindo
Leo Guerrero
Edward Martin
Joe McComb
Dr. David McNichols
Clif Moss
Mary Pat Slavik
City Manager Juan Garza
City Attorney James R. Bray, Jr.
City Secretary Armando Chapa
Mayor Rhodes called the meeting to order in the Council Chamber of City Hall
City Secretary Chapa did a roll check and all members were present.
City Manager Garza gave an overview of today's budget proceedings which would
include presentations on Winter Averaging, the Combined Utility System, and the Solid
Waste Services.
Winter Averaging
City Manager Garza explained the City's procedures for wastewater charges and
stated that winter averaging is an attempt to correct the inequity of the present program.
He further discussed the report from the consultants that designed the winter averaging
concept.
Mr. Bill Hennings, Director of Public Works/Utilities, gave a presentation on winter
averaging and explained it as a more accurate assessment of the customer's usage of the
sewer system. He stated that this approach would collect the necessary revenue to run the
Wastewater system. Mr. Hennings further stated that this system would be based upon the
customer's average use during three winter months when water usage is lowest. The system
would base the monthly charge for the year on this estimate. He also stated that these three
readings would be recalculated each year to acquire an accurate monthly rate for each
residence. Mr. Hennings further discussed the suggested customer notification plan and
explained the information contained on the mail -out.
MICROFILMED
Minutes
Special Council Meeting
June 23, 1992
Page 2
With the use of informational charts, Mr. Hennings explained the impact of winter
averaging on customers and stated that notification would allow customers to conserve water
during the three month period. Mr. Hennings further commented on the removal of the
wastewater system's current cap of 20,000 gallons. He suggested the adoption of the winter
averaging program July 31, 1993 at the rate structure in effect at that time.
Mayor Pro Tem Longoria inquired regarding the solution to an increase of water
usage in a residential household due to the addition of family members, and Mr. Hennings
replied that the customer's bill would be recalculated each year to obtain a current average
reading.
Council Member Moss inquired concerning the procedures that other cities in Texas
use to implement the plan, and Mr. Hennings stated that other cities had been questioned
regarding their procedures. It was revealed that significant conservation had not been
prompted by winter averaging. Mr. Hennings further referred to the Texas Water
Commission's request to conserve water and stated that winter averaging was a conservation
measure.
Council Member McNichols reiterated that winter averaging is not part of the current
budgetary process, and City Manager Garza affirmed. Dr. McNichols stated that winter
averaging and utility increases should be implemented at separate times to prevent an
overwhelming increase in rates.
Council Member Martin stated utility revenue would not decrease because winter
averaging is revenue neutral, and City Manager Garza discussed this aspect. Mr. Martin
further commented on the previous Council's commitment regarding a wastewater increase.
He stated that the Council asserted that an increase would not be effected until a new
system had been implemented and suggested adopting winter averaging in one year.
Council Member Martin further stated that the largest cost to the water system is the
production of new water sources which would be minimized through long term use. Mr.
Martin further discussed the importance of implementing a fixed water rate system which
would not be affected by outside factors such as the climate.
Council Member Slavik concurred with Mr. Martin regarding the previous
commitment by the prior Council, and agreed that winter averaging is revenue neutral. She
further suggested waiting until next year to implement the program in order to be fair to the
public, and commented that the conservation mode in other cities did not change due to
winter averaging.
Council Member McComb inquired if a class action complaint from people
experiencing large rate increases through winter averaging would be conceivable, and City
Attorney Bray stated that determining rates on an individual basis would preclude the City
from keeping rates fair and equitable which is the City's main obligation.
Council Members McComb and Galindo expressed concern regarding future councils
overriding the ordinance currently being discussed, and City Attorney Bray stated that this
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Special Council Meeting
June 23, 1992
Page 3
would be a possibility. Council Member McComb further stated that the City needs
flexibility to deal with the utility system challenges which include the deteriorating
infrastructure, and wastewater treatment and water treatment plant expansions.
Council Member Martin suggested proceeding with the first reading of the ordinance
increases, and amending the ordinances to state that the City of Corpus Christi is adopting,
for future rates, the system of winter averaging. This time frame would allow the
implementation of programming and public relations.
Combined Utility System
Mr. Hennings gave a brief presentation on the Combined Utility System. He
commented on what the City had done to control costs which includes reducing staff levels,
implementing many utility "audit" recommendations, consolidating utility activities, and
automating some utility operations. Mr. Hennings next commented on the critical problems
presently facing the City which includes an aging and deteriorating infrastructure, demands
by a growing system, mandates by the Environmental Protection Agency and Texas Water
Commission, potential "system" annual financial statement losses, and the prospect of not
obtaining a five percent ending fund balance in future years. Mr. Hennings next discussed
solutions which would include increasing utility rates in the amount of six percent, reducing
some service levels, and continuing improvements through economy and efficiency.
Mr. Hennings next discussed the City's wastewater treatment plants. He detailed
each wastewater treatment plant capacity and actual flows and referred to the federal and
state mandates.
Mr. Hennings next presented charts which summarized the utility rates with six
percent increases and compared these amounts to other cities. He stated that the rate
increases would affect an average customer's monthly bill as follows: the gas bill would
increase approximately $.56, the wastewater bill would increase approximately $.87, and the
water bill would increase approximately $.73.
Council Member McComb inquired regarding the five percent ending fund balance
and the amount of money the six percent rate increases would generate, and it was
determined that the ending fund balance would be $3.1 million and that the rate increases
would generate approximately $3,040,000.
Mayor Rhodes opened the public hearing on the proposed Utility Rate Increases and
called for comments from the audience.
Mr. J. E. O'Brien, 4130 Pompano, commented on the proposed winter averaging and
water and wastewater cap of 20,000 gallons. He stated his opposition to a six percent
increase in utility rates. He suggested suspending the pay-as-you-go policy in capital
improvements for one year and using utility budget reserves in the amount of approximately
$1 million. He also suggested privatizing billing and collecting services. Further,
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Special Council Meeting
June 23, 1992
Page 4
Mr. O'Brien stated that City residents are responsible for 52 percent of the costs but are
providing 64 percent of the revenue. Mr. O'Brien inquired of the exact amounts in the
proposed rate increases, and Council Member Martin stated that water is $2.60 for every
one percent, gas is $.76 for every one percent, and wastewater is $1.70 for every one percent.
Mayor Rhodes moved to close the Public Hearing, seconded by Council Member
Martin, and passed unanimously.
Council Member Martin referred to City Manager Garza's memos which were
recently distributed to the Council, and commented on a number of items contained which
would help fund the utility system. These items included (1) the addition of $180,000 which
was a transposed figure involving the annual payment in the Water Fund, (2) the additional
amount of $117,000 involving the transfer of street sweeping expense, (3) the funding of the
Choke Canyon debt payment at the actual cost for this year, (4) raising the cap on
wastewater from 20,000 to 21,000 gallons which would increase income in the amount of
$50,000, (5) adopting the winter averaging concept for next year, (6) raising wastewater rates
three percent, water rates five and one-half percent, and gas rates six percent, and (7)
reconsidering wholesale water contracts. He stated these actions would not reduce the
City's reserves and would not cut programs further.
Council Member Slavik stated that she does not want a utility rate increase but
reluctantly agrees that there needs to be one. She suggested an alternative plan to City
Manager Garza's proposal plan which would include a three percent increase in each utility.
She additionally suggested taking one-fifth of the $1 million reserve which would provide
an additional $200,000, and delaying the "pay-as-you-go" capital improvements fund which
would also provide an additional $1,305,000. Mrs. Slavik further stated that these figures
total $3 million and could be used in place of Mr. Garza's proposal.
A discussion developed and it was determined that cutting the "pay-as-you-go" capital
improvement fund was not feasible because without a major change this fund incurs an
accrual basis loss. Mr. Garza stated that in delaying this funding, cash would be available
without reduced expenses. He explained that the expense is related to the capital
improvement depreciation and not with how much money is spent on capital improvements.
This program is simply converting cash to assets. Council Member Slavik commented that
this fund was a reserve and not a debt. City Manager Garza stated that this delay would
not reduce expenses and that it reduces cash for capital improvements. Mr. Garza further
referred to the pay-as-you-go fund as an accounting concept on the profit and loss statement
and stated that it is a proprietary fund.
Relative to questions posed at the last council meeting by Council Member Slavik
regarding utility collections, Mrs. Slavik commented on the answers she received from staff.
The first question referenced delinquent utility accounts over $500. She inquired further
regarding the delinquent utility accounts with balances over $500 which she had learned
currently total $744,610 of which $46,353 is considered uncollectible, and requested
expediting these collections. Mr. Garza stated that the majority of accounts would
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Special Council Meeting
June 23, 1992
Page 5
eventually be paid and the remainder would be turned over to the Credit Bureau. The
second inquiry referenced raising delinquent utility fees. She was informed that a proposal
was under consideration to amend the ordinance increasing the Utility Late Charge fee from
$5 to $15, and requested information on the approximate amount this increase would
generate. Mr. Garza stated he would provide additional information.
Mayor Rhodes stated that she would agree with Mr. Martin's plan if the proposal
could be adopted as a whole.
Council Member McNichols commented that he is not in favor of raising utility rates
but due to the City's current critical needs, he suggests raising the rate of wastewater and
water in the amount of six percent, and did not have a strong opinion regarding the gas rate
increase.
Council Member Galindo pointed out that the majority of people use water and
wastewater systems more than the gas system; therefore, increases in these areas would be
more practical.
Council Member McNichols stated that the six percent rate increases would increase
the average customer's monthly bills approximately $2.16. He further discussed the odor
control and clean-out eliminations.
Council Member Moss commented on Mr. Martin's proposal and inquired if this
proposal could be considered feasible, and Mr. Garza stated that he continues to propose
an increase of six percent, but would honor the Council's decision.
Council Member Slavik commented on the television polls and stated that these polls
reveal that people do not want fees increased but would rather have their services cut.
Mayor Rhodes adjourned the meeting for a dinner break.
:::::::::::::
Mayor Rhodes reconvened the special council meeting.
Mr. Martin made a motion to amend the ordinances presented by the Manager which
included passing on first reading, the gas ordinance at a six percent increase, passing on first
reading the water ordinance at a five and one-half percent increase, and passing on first
reading the wastewater ordinance at a three percent increase and further amending the
wastewater ordinance to include the implementation of a winter averaging system to be in
effect after the next winter season, and raising the wastewater cap from 20,000 to 21,000
gallons. The motion also included to reconsider wholesale water contracts, funding the
Choke Canyon dam debt payment at the actual yearly cost, and removing street sweeping
from the Water Fund.
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Special Council Meeting
June 23, 1992
Page 6
Dr. McNichols asked that Mr. Martin's motion be amended to increase wastewater
rates to four percent and to put back into the budget provisions for odor control and clean-
out service of City lines.
City Manager Garza stated that he would need six percent increases in Gas and
Water and four percent in Wastewater to fund odor control and City clean-out.
Mr. Martin amended his earlier motion to include six percent for Gas and Water and
four percent for Wastewater with all the other provisions he had mentioned including odor
control and sewer line clean-out service. His motion was seconded by Mayor Pro Tem
Longoria. Rhodes, McComb, McNichols, Galindo voted "Aye"; Slavik and Moss voted "No.";
Guerrero absent; the motion to amend passed.
City Secretary Chapa polled the Council for their votes and the following passed as
amended:
a. FIRST READING ORDINANCE
Amending the City Code, Chapter 55, Utilities, Article III, Water Rates and Charges,
Section 55-50, Schedule, by amending the water rate schedule for customers using
treated and untreated water.
The foregoing ordinance passed on first reading by the following vote: Rhodes,
Longoria, Galindo, Martin, McComb, Moss, and McNichols, voting "Aye"; Slavik
voting "No"; Guerrero absent.
b. FIRST READING ORDINANCE
Amending the City Code, Chapter 55, Utilities, Article IV, Gas Rates and Charges
Section 55-61, Classification of customers and schedules of rates, as set forth in
Ordinance No. 21001 as amended, so as to change the schedule of gas rates for all
customers to the City -owned gas distribution system by providing a new schedule of
gas rates for all customers.
The foregoing ordinance passed on first reading by the following vote: Rhodes,
Longoria, Galindo, Martin, McComb, Moss, and McNichols voting "Aye"; Slavik
voting "No"; Guerrero absent.
c. FIRST READING ORDINANCE
Amending Article VII, Section 55-100 of the Code of Ordinances, City of Corpus
Christi, 1976 Revision, so as to provide certain increases in wastewater rates.
The foregoing ordinance passed on first reading as amended by the following vote:
Rhodes, Longoria, Galindo, Martin, McComb, Moss, and McNichols, voting "Aye";
Slavik voting "No"; Guerrero absent.
Minutes
Special Council Meeting
June 23, 1992
Page 7
Solid Waste Services
Mr. Robert Bruner, Director of Sanitation, presented a synopsis of the current Solid
Waste Collection Program and discussed the increasing costs and federal and state
restrictions.
Mr. Bruner next gave a broad overview of the proposed "2 Plus Plan" briefly outlining
the advantages and disadvantages.
Mayor Rhodes expressed concern regarding the referenced rate increase in the
presentation. A discussion developed and it was determined that major capital
improvements were needed including the replacement and maintenance of the truck fleet.
Mr. Martin requested information regarding the condition of the current truck fleet, and
Mr. Bruner explained the situation in detail.
Mr. Bruner next commented on the effects of recycling experienced by other Texas
cities and compared these effects to Corpus Christi. Responding to Mr. Martin's concerns
regarding the procedure of implementation elsewhere, Mr. Bruner stated that some cities
started with a pilot system which produced long term savings.
In response to a question from Council Member Martin, Mr. Bruner discussed the
savings of $907,000 and $1.6 million referred to in the presentation, explaining that these
amounts involved the deferment of capital outlay for three packer trucks, personnel
reduction of 40 positions, and reduced maintenance, fuel, and support equipment.
Mr. Martin stated that these cuts could be referred to as service adjustments and not
savings.
Mayor Rhodes stated that the real purpose for recycling is that the earth's resources
are diminishing.
Council Member Slavik inquired regarding the use of plastic bags for disposal, and
Mr. Bruner discussed the recommended methods of disposing of garbage.
Council Member McNichols expressed concern regarding families with excess garbage
due to disposable diapers and illnesses, and inquired about special neighborhood pick-up
containers. Mr. Bruner stated that he is not in favor of unmanned disposable dropoffs
because of possible contamination problems.
Council Member Slavik discussed her visit to BFI Waste Systems and suggested a
close relationship with such companies because it would be beneficial to the City in the
future.
Mayor Pro Tem Longoria inquired regarding the future of disposing of waste
material, and Mr. Bruner discussed the changing regulations and possible solutions.
Mayor Rhodes introduced Ann Dodson, Chairperson of the Nueces County/Corpus
Christi Health and Welfare Advisory Board. Ms. Dodson presented a motion in support of
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Special Council Meeting
June 23, 1992
Page 8
the 2 Plus Plan on behalf of the Advisory Board and commented on the benefits of the
program.
Ms. Jennifer Lorenz, Chairman of the Recycling Advisory Committee on Recyclables
and Solid Waste, spoke favorably on the 2 Plus Plan. She commented on the EPA
mandates and conservation of the earth's resources.
Ms. Janet Hart commented on the people that could not afford containers for
garbage and possible solutions to the disposable diaper problem.
Mr. Rome Smith, 3338 Half Penny, commented favorably on privatization which
would include lease options for heavy equipment. He further commented on imposing a
surcharge for extra garbage pick-ups.
Council Member Moss requested net income budget information, and Mr. Garza
stated that it was being prepared at this time and would be provided soon.
Mr. Moss further requested information regarding Heart of Corpus Christi and Municipal
Management District, and Mr. Garza discussed the present situation regarding this subject,
and stated it was a part of the current budget proceedings.
The Council decided to delay the discussion on the General Fund for one week
which was scheduled for today's meeting. Mr. Garza stated that it could be discussed next
week along with the Industrial District agreements. Also tentatively scheduled was the
property tax rate.
The Council then discussed when to hold the public hearings and Council Member
Martin moved to hold the two public hearings on the budget and proposed tax rate on
July 14, 1992, at 6:00 p.m., seconded by Council Member McComb, and passed unanimously.
6. M92-146
Motion to set a public hearing for discussion of the City's proposed FY 1992-93
budget and the proposed tax rate. Hearing to be held on July 14, 1992, in City Hall
Council Chambers at 6:00 p.m.
The foregoing motion passed by the following vote: Rhodes, Galindo, Martin,
McComb, McNichols, Moss, and Slavik voting "Aye"; Guerrero absent.
There being no further business to come before the Council, Mayor Rhodes declared
the Council Meeting adjourned at 7:50 p.m. on June 23, 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 23, 1992, which were
approved by the City Council on June 30, 1992.
WITNESSETH MY HAND AND SEAL, this the 21st day of July, 1992.
\y�
Armando Chapa
City Secretary
SEAL