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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 Minutes 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, Minutes 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 Minutes 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. Minutes 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 Minutes 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