HomeMy WebLinkAboutMinutes City Council - 06/03/1997 - WorkshopI HEREBY CERTIFY that the foregoing is a true and correct copy of the minutes of the
Council workshop of the City of Corpus Christi of June 3, 1997, which were approved by the City
Council on June 10, 1997.
WITNESSETH MY HAND AND SEAL, this 10th day of June, 1997
Armando Chapa
City Secretary
SEAL
MICROFILMED
MINUTES
CITY OF CORPUS CHRISTI, TEXAS
Council Workshop
June 3, 1997
8 a.m.
PRESENT
Mayor Loyd Neal
Mayor Pro Tem Betty Jean Longoria
Council Members:
Jaime L. Capelo Jr.
Melody Cooper
Alex L. Garcia Jr.
Arnold Gonzales
John Longoria
Dr. David McNichols
Edward Martin
City Staff:
City Manager Bill Hennings
City Attorney James R. Bray Jr.
City Secretary Armando Chapa
Mayor Neal called the workshop to order in the Council Chambers 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.
City Manager Hennings noted that the Council would have several more discussions
concerning the city's budget in the near future; in addition, he said staff would be providing weekly
reports in response to the Council's budget questions. Mayor Neal said the Council would
tentatively schedule another budget workshop on July 1, 1997.
Mr. Hennings explained the structure of the city budget, pointing out that it is divided into
several funds, which were illustrated using visual aids. He said the General Fund relies on tax
revenues, and he noted that the City Charter prohibits the transfer of monies from the Combined
Utility Fund, which is funded through utility revenues.
Mr. Hennings gave an overview of the "health" of the General Fund during the last few years,
and he explained the revenues that are collected in the General Fund, including property taxes, sales
taxes, Solid Waste revenues, and franchise fees. He said staff will soon propose to the Council the
establishment of a new franchise fee, which he briefly described. Mr. Hennings said staff will be
proposing a 5% increase in fees for city services (permits, etc.) in this budget to help offset inflation.
Council Member Martin suggested that the city's internal auditors randomly review some
of the valuations submitted for building permit fees, and then measure them against the asking price
of the property.
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Council Workshop
June 3, 1997
Page 2
In reply to Council Member Betty Jean Longoria, Mr. Hennings noted that there is an
increase in Municipal Court fines due to the establishment of a new Warrants and Collections
division.
With regard to General Fund FY 1997-98 expenditures, Mr. Hennings noted that the majority
(51%) is spent on public safety (over $59.8 million), and most of the public safety budget is
allocated to salaries for the Police and Fire departments.
He delineated proposed changes to the Police and Fire budgets, including the addition of
eight police officers and the civilianization of two other police positions in the pawn shop function;
purchase of a replacement fire pumper truck and a new ladder truck; and salary increases required
by the Police and Fire collective bargaining agreements.
In reply to Council Member McNichols, Mr. Hennings acknowledged that the proposed
budget does not accomplish the goals set forth in the financial plan adopted for the General Fund:
most notably, the ending fund balance is lower than it would be if the city complied with the
financial plan; and the proposed budget has higher expenditures than revenues.
Dr. McNichols also asked about the proposal to purchase surety insurance. Mr. Hennings
said the result of that would be to reduce General Fund expenditures next year, which would help
the fund balance. Mr. Hennings went on to explain that the bond rating firm of Standard and Poors
(S&P) had asked the city to develop a financial plan that would build up the reserves in order to
maintain the city's bond rating. The Council adopted the plan and submitted it to S&P, but they still
lowered the city's bond rating. He said that while the financial plan is sound, the Council has also
emphasized its desire to improve public safety, and not enough money is being budgeted for street
maintenance and other areas.
Mr. Martin reiterated that the two major budget policy items are not met in the proposed
budget, and he stressed that the Council needed to either meet the budget policy or disregard it (if
there is enough support on the Council to do so). Mrs. Longoria's echoed Mr. Martin's concerns.
Council Member John Longoria also agreed that the budget policy needed to be adhered to or
changed.
* * * * * * * * * * * * *
Mayor Neal called for a 15 -minute recess.
*************
The next budget issue to be discussed was the Street Services budget. Mr. Olgivie Gericke,
Director of Street Services, referred to a video presentation about several aspects of this department,
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Council Workshop
June 3, 1997
Page 3
which is charged with maintaining the city's streets, signals and signs and markings. He said that
through automation, the department has been able to institute many programs, including pavement
management system, complaint tracking, signal monitoring, cost accounting system, time keeping
system, and a computerized inventory system. Mr. Gericke pointed out that the city's street network
is steadily deteriorating and more of the pavements are falling into the marginal to fair categories.
He compared the costs of merely repairing pot holes and base failures versus preventive maintenance
through seal coating and overlaying. He also discussed the department's various costs.
Mr. Hennings said the main point is that to fund the Street Services department as it should
be would require an additional $1.5 million, and he noted that there is a serious shortfall in funding
in this department.
Mr. Martin discussed the importance of viewing Street Services funding as an investment
and a cost -savings item.
In reply to Council Member Garcia, Mr. Hennings and Mr. Carl Crull, Assistant City
Manager for Public Works and Utilities, discussed the difference between major street improvements
that are capital projects and the type of street maintenance performed by the Street Services
department. Mr. Crull also discussed the debate over maintenance of rights-of-way throughout the
city.
Mr. Martin asked if the street sweeping function was being transferred out of the Street
Services department and into the Storm Water department, and Mr. Hennings said it was.
* * * * * * * * * * * * *
Police Chief Alvarez gave the next presentation conceming the Police department budget,
which he said is proposed to be over $37.4 million (an 8.1% increase over the current fiscal year).
He noted that 73% of the proposed budget goes to salaries and fringe benefits, with 5% for overtime,
9% for operational expenses, and 13% for internal service charges.
As noted by Mr. Hennings earlier, Chief Alvarez said the budget includes the following
increases in personnel: 8 sworn police officers to increase the force's authorized strength from 395
to 403; two dispatchers to reduce overtime; an additional seven school crossing guards and seven
altemates for new schools; an administrative assistant and three data entry clerks to civilianize the
pawn shop unit (which allows two officers to return to the field); legal advisor for the Police
Department; and an operator for computer support services to free up a communications supervisor.
In addition, Chief Alvarez said the budget includes the following projects and expenses: a
lead abatement project at the Corona training facility indoor pistol range; the first of three payments
of matching funds for the mobile data terminal/automatic vehicle locator system; transfer of the
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Council Workshop
June 3, 1997
Page 4
administration of the 800 MHZ radio system to the Police Department; transfer of the promotional
testing expenses from Human Resources; proposed city administration of the 9-1-1 surcharge fee;
the first-time budgeting of the cost associated with "drag -up" pay for employees resigning and
retiring; the increase in salaries per the collective bargaining contract; and the purchase of 35 police
package vehicles. The Police Chief also discussed the department's unmet needs.
Mrs. Longoria asked about the proposal for additional school crossing guards. Mr. Hennings
explained that on several occasions the Council has asked the school districts to share in the funding
and they have consistently refused. He said there have been a few instances where the city did not
think that a particular intersection met the need for a school crossing guard, and the school district
then picked up the cost.
Mr. Martin requested a report on the drug fund balance, saying that that could be a method
to fund the need for unmarked cars and other items. He also discussed the need for a plan to address
how the additional police officers will be utilized and how the additional costs will be paid.
In reply to Council members' questions, Chief Alvarez and City Attorney Bray further
discussed the issue of drag -up pay, school crossing guards, and the proposal to add a legal advisor
in the Police Department and a labor relations attorney in the City Attorney's Office.
*************
Mr. Tom Utter, Assistant City Manager for Development Services, and Mr. Andres Leal,
Director of Solid Waste Services, updated the Council on the Solid Waste Services financial plan,
which Mr. Utter distributed to the Council. He pointed out that the plan had been revised somewhat
since its adoption in July 1995. Those changes included the city taking over the brush grinding
contract, preparation of the liners, and the composting program, which he briefly discussed. Mr.
Utter said the plan is on schedule and staff is projecting the same cumulative balances through 2003.
He added that in July staff would be presenting to the Council the permit application for the new
landfill that will be submitted to the Texas Natural Resource Conservation Commission (TNRCC).
In reply to Mayor Neal and Mr. Martin, Mr. Hennings and Mr. Utter explained some of the
Solid Waste fees and revenues. Mr. Martin said the Council needs to be aware that the city is
significantly utilizing the revenue from Solid Waste Services to fund other activities in the General
Fund. Mr. Hennings pointed out that until the economy strengthens significantly, the city's budget
will remain tight, and he agreed that each year the city is utilizing one-time funding mechanisms in
order to prepare the budget.
The Mayor asked Mr. Hennings to help the Council --as they make decisions on the FY 97-98
budget --to anticipate difficult financial questions in future city budgets.
• Minutes
Council Workshop
June 3, 1997
Page 5
*************
Mr. John Bacon, Director of Municipal Information Systems, explained that a major issue
computer owners around the world are facing is the transition that will occur at the turn of the
century. He noted that computers only store the last two digits of the year, which will create
significant problems beginning in the year 2000 and thereafter. He said staff has been assessing how
this problem will impact the city's computer systems. They have concluded that the vendor which
supports the public safety, CAD, and RMS systems will convert them in order to comply with the
year 2000; the library computer system, the GIS system, the 800 MHZ radio system, and the three
major telephone systems are already compliant.
Mr. Bacon said the systems that will be most impacted are those which reside on the city's
mainframe: payroll, financial, fleet management, Municipal Court, and human resources. He said
rather than spending an inordinate amount of staff time trying to make the current systems
compliant, staff is trying to speed up the systems' replacement schedules. Four teams have been
developed to investigate the systems that need to be replaced, and each team is headed up by a
department director with an oversight committee to oversee the project.
Mayor Neal asked about the possibility of "outsourcing" some of the city's computer needs
rather than spend millions of dollars trying to upgrade them and operate them in-house. Mr. Bacon
agreed that outsourcing was an option, and he said its cost effectiveness was dependent upon
negotiation of a good contract, which he explained.
Replying to Mr. Garcia, Mr. Bacon said the City of Corpus Christi is in the same position
as or ahead of other communities with regard to this conversion problem. He asked if computer
equipment the city is now purchasing is compliant, and Mr. Bacon said it was.
Mr. Martin asked approximately how much a conversion would cost, and Mr. Bacon
estimated $5 million to $6 million. Mr. Martin agreed that this was an opportunity for the city to
consider outsourcing some of its services. Mr. Garcia suggested that the city consider the possibility
of developing partnerships with other governmental entities which are also facing this situation.
* * * * * * * * * * * * *
The next budget discussion concerned the General Obligation Debt Service Fund. Mr.
Hennings explained that it is the fund which collects a portion of the property tax and other revenues
and then pays the debt the city has incurred on general obligation bonds and certificates of
obligation. He said the largest source of revenue is ad valorem taxes (about $12 million). He noted
that the budget contains cash reserve funds for Solid Waste, Aviation, and Storm Water which are
equal to 75% of the following year's debt service payment.
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Council Workshop
June 3, 1997
Page 6
Mr. Hennings said that with regard to Interfund Contributions, staff is proposing to continue
to use bond fund interest to help pay the bonded indebtedness. He said the city's financial advisor
suggested an alternative, whereby the city would buy insurance to provide that same level of
assurance to bond holders so the city would not have to keep that cash reserve on hand (about $9
million). He said staff estimates that that insurance would cost about $150,000. In addition,
according to the financial advisor, the bond rating agency does not think that proposal will adversely
affect the city's bond rating. Mr. Hennings further explained how the proposal would affect the
budget.
Mr. Martin asked several questions about aspects of this proposal, which were responded to
by Mr. Hennings and Mr. Jorge Garza, Assistant City Manager for Administrative Services. He
requested more detailed information about the form of the surety insurance and interest on the city's
investments.
* * * * * * * * * * * * *
Mayor Neal recessed the Council workshop for a lunch break.
*************
The Mayor reconvened the workshop and called for petitions from the audience.
Mr. Lewis Lovelace expressed concern about the desalination study to be conducted by
Texas A&M University -Corpus Christi. He said Dr. Robert Furgason, TAMU-CC President, had
publicly opposed desalination. He also objected to the Lake Texana pipeline project, and he
questioned why the city receives so many separate electric bills from Central Power and Light.
Mr. A.C. Johnson commented on the Community Progress Partnership, saying that the voters
should have an opportunity to vote on a half -cent sales tax to fund certain projects but not all of
those being proposed in the CPP.
Mr. J.E. O'Brien, 4130 Pompano, said he was impressed with the open budget discussions
thus far as evidenced by the Council's questions. He also referred to the raw water costs of large
industrial users, and he complimented Mr. Hennings and city staff on their actions during the
workshop.
Mr. Leon Perez criticized the issue of the freshwater releases.
* * * * * * * * * * * * *
The next presentation regarded the Community Progress Partnership. Ms. Laurie Cook and
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Council Workshop
June 3, 1997
Page 7
Mr. Danny Noyola, members of the CPP committee, explained the CPP process that has evolved
over the last year. She said the purpose was to identify projects and programs which were not basic
city services that could not be funded through regular budget means due to a lack of funds. In
addition, the identified projects were intended to spur economic growth and/or improve the quality
of life of the citizens. Mr. Noyola then described the newly submitted projects. He noted that at their
last meeting, the committee reached consensus on three of the projects: the Academy of Transitional
Studies, Agnes neighborhood revitalization project, and the northside development project. Ms.
Cook noted that some of the new projects had not yet been discussed.
Ms. Cook further described the CPP's mission and process, pointing out that this effort built
upon existing community efforts, such as Vision 2000 and the Commission on Children and Youth
report. The process included several public meetings and input, which resulted in the submission
of 163 different projects and programs. Ms. Cook also discussed the CPP's proposed establishment
of trust funds, and new legislation which may affect the CPP, such as a crime control district. She
said that the committee would meet again to prepare their final report to bring back to the Council
in about 45 days.
Mayor Neal thanked the CPP committee members for their hard work, and he expressed
concern about the time constraints that exist if a sales tax election is considered as an option. He
urged the committee to return to the Council with their report as soon as possible.
Responding to Dr. McNichols, Ms. Cook discussed how consensus was reached on the
proposed projects.
Council Member Gonzales questioned whether sufficient input was received from the
citizens, saying that some of the CPP public hearings were very poorly attended. He said more input
was needed. Ms. Cook replied that after the Council receives the final report, the CPP committee is
expecting and hopes that the Council will hold more public hearings on the issue; she added that the
Council could generate more interest in the process among the community than the committee
probably has done.
Council Member Capelo questioned the regulations regarding establishment of an industrial
development corporation, which Ms. Cook discussed. She also further discussed provisions in the
legislation.
Council Member Cooper asked about the committee's plan to get the message of the CPP
to the voters, if an election is to be held. Ms. Cook said the committee has discussed that issue at
length, adding that they have to be conscious of the fact that the city cannot promote an election,
although it can provide information.
Mayor Neal asked Mr. Bray to prepare a detailed analysis of the options under the sales tax
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Council Workshop
June 3, 1997
Page 8
provisions. Mr. Capelo also requested more information about the trust funds and the makeup of
the IDC board.
Following further comments by the Council members, Ms. Cook pointed out that none of the
CPP projects could impact the FY 97-98 budget.
* * * * * * * * * * * * *
Mr. Hennings said the next budget item to be discussed is the Self -Insurance Fund. He
explained that it is an internal service fund which receives revenues from other city funds, with the
General Fund being the largest contributor. Mr. Hennings briefly described some of the
extraordinary claims that occurred this year, as well as other aspects of the Self -Insurance Fund
budget.
Mayor Neal suggested to Mr. Pat Alba, Director of Risk Management, that the claims paid
by the city be analyzed using the following categories: proprietary claims, governmental claims
(typical general liability claims), and losses that do not fall under either one of the previous
categories. A brief discussion ensued.
In response to Mr. Martin, Mr. Alba said the FY 97-98 budget included $5 million available
to pay claims. Mr. Martin requested more information about Risk Management administration
costs.
*************
A discussion of the Tourist and Convention Fund was the next item on the schedule. Mr.
Hennings said that fund has two major revenue sources: revenue from the Convention Center and
Coliseum operations, and revenue from the hotel occupancy tax (7% of which is paid to the city).
He then discussed expenditures for this fund, including operations of the Convention Center,
Coliseum, Water Gardens, etc., and non -departmental expenditures, which includes the contract with
the Greater Corpus Christi Business Alliance and other items.
Replying to Council members' questions, Mr. Hennings and Mr. Utter discussed in more
detail the city's contract with the Alliance, as well as the financing of the Lexington Museum on the
Bay and the Columbus ships.
Mrs. Longoria noted that funding had not been proposed for the Center for Hispanic Arts,
and Mr. Hennings pointed out that that was a General Fund item that was not being recommended
for funding along with other arts organizations. A lengthy discussion ensued regarding funding of
certain arts organizations as well as Nueces County beach clean up and graffiti clean up.
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Council Workshop
June 3, 1997
Page 9
* * * * * * * * * * * * *
Mayor Neal called for a 10 -minute recess.
* * * * * * * * * * * * *
Mr. Hennings said that a discussion of the Gas Department budget would be introduced by
Ms. Debbie Ashour, Gas Superintendent. She described the Clean Cities program, sponsored by the
U.S. Department of Energy, which examines the use of alternative fuels (propane, natural gas, and
electricity). Benefits of the Clean Cities program include improved air quality and an increase in
natural gas sales. She said other entities involved are Central Power and Light, Regional
Transportation Authority, Corpus Christi Independent School District, Naval Air Station, Port of
Corpus Christi, and propane distributors. Ms. Ashour explained that one of the components of the
strategic plan is the compressed natural gas fueling station to be located at City Hall, and she
discussed the natural gas supply contract, which expires on July 1, 1999. She also responded to
some Council members' questions, including comments about natural gas marketing efforts.
The Storm Water Department budget was addressed by Ms. Valerie Gray, Storm Water
Superintendent. She said the proposed budget will continue to provide service in the following
areas: operation and maintenance of three storm water pump stations; maintenance of major and
minor drainage ditches and inlets; mowing of drainage right-of-way; minor concrete repair of curbs,
gutters, culverts and outfalls; monitoring, inspection and enforcement function; and administration
of the Environmental Protection Agency permit. Ms. Gray said the proposed budget includes the
addition of nine full-time employees, the transfer of the street sweeping function to the Storm Water
Department, and National Estuary Program Support of $90,000. Mr. Martin commented that this
department should be established as a separate budget, and a brief discussion ensued.
Mr. Wayne Cockroft, Wastewater Superintendent, discussed his department's proposed
budget, which he said is designed to maintain the existing level of service. He said that service
includes maintenance and operation of the city's six wastewater treatment plants, 94 lift stations, and
1,225 miles of pipe; clean-out program at property lines; certification program for operators; and
funds for the annual debt service for several capital improvement projects, including improvements
at the Whitecap Plant and sliplining of a trunk main at Horne Road. Mr. Cockroft said the
department's accomplishments include meeting 99.6% of EPA and state parameters. He said the
proposed budget includes the addition of seven employees, which he explained. Responding to
questions, Mr. Hennings described the 6% rate increase for the combined utilities, and Mr. Cockroft
addressed other questions. A discussion also ensued concerning the wastewater winter averaging
program.
Mr. Ed Garana, Water Superintendent, said the Water Department is broken out into the
following functions: supply, production, distribution, water utility lab, and administration. He
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Council Workshop
June 3, 1997
Page 10
described rehabilitation projects that are either ongoing or completed at the Choke Canyon dam and
the Wesley Seale dam. He said staff is in the process of' preparing the operation and maintenance
plan for the Lake Texana pipeline. He said they are anticipating the need to blend the Lake Texana
water with local water supplies at the O.N. Stevens Water Treatment Plant, as well as meeting
requirements of the Safe Drinking Water Act and improving the plant's operations. Mr. Garana
discussed other plans in the Water Department.
Responding to Mayor Neal and Council members' questions, Mr. Hennings and Mr. Garza
discussed in detail the deferred payments, the Public Law Trust Fund, the Choke Canyon Fund, and
costs associated with the Lake Texana pipeline and the Garwood water rights.
A discussion also ensued about the cost of water and service, and the possibility of
privatizing the operation of the Stevens Water Treatment Plant.
With regard to the capital budget, Mr. Hennings pointed out that an extensive presentation
would be held during an upcoming Council meeting.
Mr. Hennings then referred to the preliminary budget adoption calendar. Mayor Neal
suggested that a budget discussion be held in two weeks, with another budget workshop to be held
on July 1st. Mr. Martin requested that there be an agenda item for the May 10th Council meeting
to discuss the budget schedule.
* * * * * * * * * * * * *
There being no further business to come before the Council, Mayor Neal declared the
Council workshop adjourned at 5:30 p.m. on June 3, 1997.
* * * * * * * * * * * * *