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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. Minutes 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, Minutes 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 Minutes 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. Minutes 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 Minutes 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 Minutes 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. Minutes 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 Minutes 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. * * * * * * * * * * * * *