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HomeMy WebLinkAboutMinutes City Council - 01/20/1998I HEREBY CERTIFY that the foregoing is a true and correct copy of the minutes of the Regular Council Meeting of the City of Corpus Christi of January 20, 1998, which were approved by the City Council on January 27, 1998. WITNESSETH MY HAND AND SEAL, this 27th day of January, 1998. Armando Chapa City Secretary SEAL MINUTES CITY OF CORPUS CHRISTI, TEXAS Regular Council Meeting January 20, 1998 2:00 p.m. PRESENT Mayor Loyd Neal Mayor Pro Tem Dr. David McNichols Council Members: Javier Colmenero Melody Cooper Alex L. Garcia Jr. Arnold Gonzales Betty Jean Longoria John Longoria Edward Martin City Staff: City Manager Bill Hennings City Attorney James R. Bray Jr. City Secretary Armando Chapa Mayor Neal called the meeting to order in the Council Chambers of City Hall. The invocation was delivered by Council Member Colmenero, following which the Pledge of Allegiance to the flag of the United States was led by Council Member Martin. City Secretary Chapa called the roll and verified that the necessary quorum of the Council and the required charter officers were present to conduct the meeting. Mayor Neal called for approval of the minutes of the regular Council meeting of January 13, 1998, and there being no corrections, he proclaimed them approved as presented. * * * * * * * * * * * * * City Manager Heimings announced that notices had been sent out for a public hearing on the closure of a portion of right-of-way of San Felipe Street, but that item had not been placed on the day's agenda for consideration. He said it would be rescheduled for February 10, 1998. Mr. Hennings then gave a presentation on Item 2, a proposed electric service franchise for Corpus Christi Power & Light Company, L.L.C. (CCPL). He said CCPL consists of business people who have come together for the purpose of providing a competitive source of dependable electric power to Corpus Christi consumers at significantly lower rates than are currently being provided by Central Power and Light (CPL). Mr. Hennings said that in order for CCPL to do as it proposes, it would need a franchise agreement with the City of Corpus Christi, as well as an ordinance adopted by the City Council establishing the rate structure that will require CPL to carry their service to the customers. Mr. Hennings then referred to a diagram describing the current electric distribution and billing process and the proposal by CCPL. Minutes Regular Council Meeting January 20, 1998 Page 2 The City Manager explained that the Public Utility Regulatory Act (PURA) grants cities with original jurisdiction over electricity rates, of which Corpus Christi is one, the same rate -making authority that the Public Utility Commission (PUC) has. He said the state law provides that a regulatory authority (the city in this case) may, on its own motion, investigate and change utility rates. He said staff recommended that if the Council wished to seriously consider CCPL's proposal, they should follow the procedure previously used to modify CPL's rates. The recommended procedure would involve the Council enacting a resolution that specifies what the intended action is, and which would require CPL on a date certain in a public hearing to show cause why the proposed change should not be made. He said the resolution could also specify that CPL could make any other filings it wishes to prior to the public hearing, and that argument at the hearing would be limited in some fashion. Mr. Hennings went on to say that during the last session of the Texas Legislature, several bills were introduced that would have addressed the issue of opening up access of the retail sale of electricity; however, the Legislature did not pass any of those bills. There are some current "buy - through" arrangements in place in Texas, but they involve interruptible power sources rather than firm sources of power, with the exception of a pilot program in West Texas. With regard to CCPL's proposal, he said staff would expect CPL to appeal the ordinances if they are approved by the Corpus Christi City Council. He added that if the case is appealed, the PUC might not take any action until the next session of the Legislature has convened. He also discussed potential risks to the city, and he described CPL's history of providing electrical service to the city. Mr. Hennings said he would recommend that the Council condition any approval of CCPL's request on their absolute assurances that they will cover the amount of any expenditures the city might incur or any revenue losses that might occur through franchise fee reductions, etc. He said after the Council hears the public comment on this issue during this meeting, they could consider a motion adopting the following (as stated on page 28 of the agenda material): to bring back before the Council a resolution stating the Council's intent to further consider a pass-through tariff and set a date for a public hearing to allow CPL and all others to address the issues; and authorizing staff to engage Geoffrey Gay with the firm of Butler, Porter and Gay to develop a franchise agreement for Council review and appropriate action. He said if the Council took the action as stated above, staff would recommend the following time schedule (all 1998 dates): January 27th - staff would bring to the Council the resolution that would set the date of the public hearing for February 10th; February 3rd - deadline for the final draft of the franchise and tariff ordinances from CCPL in order to provide them to CPL and any other interested parties; February 10th - public hearing held; February 7th - first reading of the proposed ordinances; March 17th - second and final reading of the ordinances; May 16th - effective date after final passage of the ordinances. The next presentation was made by representatives of Corpus Christi Power and Light Minutes Regular Council Meeting January 20, 1998 Page 3 Company. Mr. Juan Garza said his business partners in that company are Mr. Kenneth Berry, Mr. Bill Bates, and Ms. DayLee Snell. He said they are working on this venture with Power Choice, represented at the meeting by former Texas Gov. Mark White and Mr. Robert Webb, an attorney with experience in public utility matters. Mr. Garza said CCPL estimates savings of 15% to 20%, and they intend to hold the city harmless and will make up the revenues that the city would lose as a result of the decreased electric rates. In addition, he said, CCPL will indemnify the city in the event the city incurs any expenses in defending the rates before the PUC. He added that the electricity will be as reliable as it is currently. Mr. White noted that monopolies have grown throughout the country, and there is an effort now to deregulate such areas as electric utilities in order to provide competition. He said with this proposal, the City Council has an opportunity to provide competition for smaller electricity consumers (small businesses and homeowners), and he pointed out that large industries already receive lower rates from the large utility companies. Mr. Webb commented on changes that have occurred with regard to Central Power and Light over the last 25 years, and he referred to a graph showing CPL's revenue requirements versus their estimates of what people would pay for the electricity at market price (approximately $400 million a year according to the graph). He emphasized that if the proposal is approved, citizens in Corpus Christi would have the choice of buying electricity from CCP!, or continuing to buy from CPL. He said that prior to 1995. when the competitive generation market in Texas was deregulated, competition was difficult if not impossible, although it has always been legally permitted because monopolies are barred in this state. Ile said CCPL's letters from three of the very large power marketers in the state indicate that they can reduce the total cost of electricity by 15% to 20%, depending on load characteristics of various customers. He said in this case, CPL wants to continue to direct that customers who utilize CPL's distribution service also be required to buy their generation service, which was deregulated. Responding to questions from Mayor Neal, Mr. Webb reiterated the savings from the total cost of electricity that CCPL is projecting. He said CPL's customers are paying 100% of CPL's costs for the South Texas Nuclear Plant, and CCPL's proposal would not include payment of that whole amount but rather probably just part of it. In reply to another question from the Mayor, Mr. Webb said that while the City of Corpus Christi would be legally able to purchase electric power on its own, that does not mean that would be an efficient use of the city's resources. Mr. Garza added that the city is not in the business of incurring risk but rather of reducing it. In reply to Council Member McNichols, Mr. Webb briefly described the Texas -New Mexico Power Company. He also discussed the expenses of the rate proceedings, which he said CPL would Minutes Regular Council Meeting January 20, 1998 Page 4 have to pay according to the statute. Dr. McNichols also asked if CCPL's "buy -through" proposal is the same concept that was rejected by the PUC in two previous cases. Mr. Webb replied that the proposal was very similar; however, he said, the Commissioners' statements regarding their desire to await legislative guidance on the issue were made while the Legislature was still in session last year. Consequently, the Legislature adjourned without taking action on the electric utilities, and Mr. Webb said the Commissioners have since said they will proceed without the Legislature's action. He added that the action of the Corpus Christi City Council to establish and proceed with a program as proposed is the best way to ensure that it will continue, despite the efforts of electric utility lobbyists in the 1999 Legislature. Responding to another question from Dr. McNichols, Mr. Webb said CCPL would need a certificate of convenience and necessity if they were to build facilities and render "retail" utility service. He said there is also a precedent that the buy -through rates, whether they are interruptible rates or general rates, are legal; however, said Mr. Webb, CPL does not agree. Council Member Garcia asked several questions about CCPL's proposal. Mr. Garza said city staff has estimated that the city will incur about $10,000 to $12,000 in expenses to negotiate a franchise agreement, and they have asked CCPL to indemnify the city for that amount, to which company officials have agreed. He said those funds would come from the partners. He said CCPL has also agreed to cover the additional large expense of appointing Mr. Webb as legal counsel to defend the rate case before the PUC, if the city takes the action to do so. Mr. Garza said that if CCPL's proposal is approved. every customer in Corpus Christi will have the choice of purchasing CCPL's electric services. He said the benefit to the public ought to be that, as a result of competition, customers enjoy lower electric rates, and he added that CCPL intends to pursue accounts of all sizes, but not at the expense of any of them. Mr. Garza and Mr. Webb described how the reliability of electric power will not be affected by CCPL's entry into the market. Mr. Garza said that currently he is the only staff member of CCPL and the owners intend to initially contract out to provide whatever level of services is required. Mr. Garza and Mr. Webb also further discussed legal expenses associated with this endeavor. Responding to Council Member Colmenero, Mr. Webb said they estimate that there is about $250 million a year of electricity consumed in Corpus Christi sold by CPL. He said when CCPL representatives met with representatives of various power sources, CCPL asked them to assume that CCPL could garner about $20 million to $30 million of Corpus Christi's market. He said the price would go down if CCPL's customer base increased. Mr. Webb also described the rapid growth of private electric generation (generation by non -utilities). Mr. Colmenero raised the issue of deregulation, and Mr. Webb pointed out that the proposals for deregulation, such as the one that was considered last May by the Texas Legislature, did not call for deregulation immediately but rather at a point in the future. He also discussed the potentially positive operating relationship that CCPL could have with CPL with regard to the distribution of electricity to consumers. Minutes Regular Council Meeting January 20, 1998 Page 5 Council Member Cooper said that while she is concerned about saving money for consumers, she questioned why the city would involve itself in this venture when there are so many other pressing issues with which it must contend. Mr. Webb said one of the reasons to act now rather than later is the amount of money that consumers can save by being able to purchase their electricity at a lower rate. He also said that the actual process of developing and passing a rate ordinance is not particularly labor-intensive with regard to city staff commitment. He said it is rare for a city employee to participate, either as a witness or otherwise, in a rate appeal A discussion ensued regarding the legal challenges that may be raised and how CCPL would proceed in that event. Mr. Webb said there are a number of Texas cities which have more than one franchised electric utility serving there; on the other hand, it is unusual for a company to enter a municipal market with the specific purpose of establishing competition through the use of the buy -through tariff, as proposed by CCPL. Mrs. Cooper said she thought it was premature to take action on this issue at this time, citing future action that may be taken by the Legislature. Council Member Martin said the issue the Council was considering that day was whether to state that it was uninterested in CCPL's proposal, or to set a public hearing to further consider it. Responding to Council Member Betty Jean Longoria, City Attorney Bray said the issue of whether CCPL would be required to have a certificate of convenience and necessity is highly debatable legally, and it would be one of the issues considered by the PUC if it reaches that point. Council Member John Longoria questioned staff's recommendation on this issue. Mr. Hennings agreed that there is some doubt about the outcome of CCPL's proposal, but he said he thought the process should proceed if there are no compelling reasons against doing so. He said they had discussed the issues that need to be dealt with to ensure that the city government is protected against any expenditures or loss of revenue from the proposal. Mr. Bruce Evans, President of Central Power and Light Company, said that when the electric industry is deregulated in Texas, many legitimate companies will have the opportunity to serve customers with full choice of electric power. He said CCPL's proposal is being made too soon, and he said that under current regulatory law, "retail wheeling" is prohibited. Mr. Evans added that CPL supported one of the bills that was introduced during last year's legislative session, and they will support it again during the 1999 session. Mr. Evans said that CPL feels there are four main areas that should be addressed regarding deregulation: competition should benefit all customers, rather than a select group; CPL needs to be able to continue to recover the costs of the investments it has made in power plants, lines, and infrastructure in a regulated environment where those investments were deemed prudent; reliability should be addressed; and the competition should be fair. He then introduced people who were present on CPL's behalf: Mr. Phil Ricketts, past chairman of the Public Utility Commission, and Mr. Preston Kissman, Vice President of Electric Delivery. Minutes Regular Council Meeting January 20, 1998 Page 6 Responding to Mr. Garcia, Mr. Evans said he did not understand where CCPL's proposed cost savings could be achieved. He added that it is questionable whether every company that enters the electric industry, once it is deregulated, will be required to have a franchise. Dr. McNichols asked if CCPL's proposal is essentially the same as those which have been previously rejected by the PUC, and Mr. Ricketts replied that it was. He said CPL believes that the Council should not approve CCPL's proposal because it has been decided by the PUC. He also further discussed the certificate of convenience and necessity, and said CPL believes that an entity such as CCPL would be required to have that certificate under current law. Mr. Martin asked whether CPL would object to CCPL's proposal if there was agreement by all parties that it was legal. Mr. Ricketts replied that CPL would not object, and he added that they are in favor of competition. In reply to other questions from Mr. Martin, Mr. Ricketts said CPL's franchise agreement with the City of Corpus Christi expires in the year 2000, and he also discussed the issue of dual certification. Mayor Neal called for comments from the audience. Mr. Glynn Pugh, 725 Harrison, said the City Council has three directions in which it can proceed on this issue: make no decision and continue with CPL; approve a franchise with CCPL; or consider a city -owned electric system. Mr. J.E. O'Brien, 4130 Pompano, said he would be in favor of going forward with this issue and holding a public hearing. He questioned why the city should only allow CPL to sell power at the high prices that customers have been paying. Mr. Leon Perez, 904 Buford, criticized CPL and he questioned variances on his electric bill. Ms. Carline Shannon Gunter said she wanted to know how many magnetic electricity devices are present in the slab foundations of houses and businesses. Mayor Neal asked City Secretary Chapa to read the proposed motion as stated in the agenda material, with Mr. Hennings' suggestion to substitute the words "further consider" for the word "adopt" in the first part of the proposed motion. The following motion was made and seconded by the Council: Motion to bring back before the Council a resolution stating the Council's intent to further consider a pass-through tariff and set a date for a public hearing to allow CPL and all others to address the issues; and authorizing staff to engage Geoffrey Gay with the firm of Butler, Porter and Gay to develop a franchise agreement for Council review and possible action. Mr. Longoria asked if the two elements in the motion could be considered separately. Responding to a question from Mayor Neal, Mr. Hennings said it was important that the city have Minutes Regular Council Meeting January 20, 1998 Page 7 in writing the necessary assurances prior to the public hearing so that the Council can make the most informed decision possible at the public hearing. Mayor Neal said that as the Council prepared to vote on this issue, they should be aware of the possibility that they will not only be acting on behalf of the City of Corpus Christi, but usurping the role of the Public Utility Commission and the Legislature. Council Member Gonzales said the Council was merely setting the public hearing with its action. Mr. Martin disagreed with Mayor Neal's comment, saying that in the state of Texas, the city has original jurisdiction, and a rate case such as this has to be initiated through the City of Corpus Christi, which was not usurping the authority of any entity. Mr. Garcia said the Legislature will address this issue next year and the city has many other pressing concerns to deal with: Mrs. Cooper agreed with Mr. Garcia. Dr. Gonzales said that sometimes it is a long process for an issue to be considered by the Legislature, and he reiterated that the Council should hear the public's comments on CCPL's proposal. Mr. Colmenero said the Council did not have all the information at that time to make a wise decision, and more input can be gathered during the public hearing. Mrs. Longoria said she favored holding the public hearing. Mayor Neal said his previous comment was not an endorsement or denial of the public hearing process, but rather it was a statement as he perceived it as to where the Council was putting itself in the action. Mr. Chapa polled the Council for their votes on the motion as previously stated, and it passed by the following vote: Colmenero, Gonzales, B. Longoria, J. Longoria, Martin, and Neal voting "Aye"; Cooper, Garcia, and McNichols voting "No." * * * * * * * * * * * * * Mayor Neal called for a 10 -minute recess. * * * * * * * * * * * * * Prior to opening discussion on Item H., Mayor Neal requested a clarification of Item 2. City Manager Hennings replied that Corpus Christi Power and Light's proposal involves two steps: approving a franchise that would allow CCPL to sell electricity in the city limits; and establishing a tariff that would order Central Power and Light to allow CCPL to use CPL's transmission and local distribution facilities at a specified charge to transmit electricity to their customers. The Mayor then referred to Item H., Texas Department of Transportation State Infrastructure Bank Program and toll road funding. Minutes Regular Council Meeting January 20, 1998 Page 8 Mr. Carl Crull, Assistant City Manager for Public Works and Utilities, explained that the State Infrastructure Bank (SIB) was created by federal law in 1995 which designated 10 states (including Texas) as pilot states for the program. In 1997 the Texas Legislature passed enabling legislation establishing the SIB. He said that under the program, the state can put up to 10% of the federal monies it receives from the gas taxes. Mr. Crull said that according to the SIB regulations, the program is designed to encourage public and private investment in transportation facilities, and to develop financing techniques to accomplish the following: expanded availability of funds for transportation projects and a reduction in state costs; maximized private and local participation in transportation projects; and improved efficiency of the state transportation system. He said the benefits of the program include accelerating the timing of projects; having flexibility in financing; acquiring capital at lower than market rates; assisting communities in meeting their needs; and fostering public and private partnerships. He noted that the Texas Department of Transportation (TXDOT) is currently only able to fund about one-third of the identified transportation needs statewide. The Assistant City Manager went on to say that eligible projects would need to also be eligible for federal aid, which means that they would need to be on the state transportation program and designated as a collector or above (collector, arterial, or state highway). He said all aspects of a project are eligible for funding. and all or a portion of the project cost can be borrowed from the SIB, beginning with the city's 20% share of the project cost up to the total project cost. Mr. Crull also described the application process and the agreement after the application is approved. He added that the repayment does not start until after the project is completed. Responding to Council Member Martin, Mr. Crull said the SIB is strictly a loan program; he added that it could not be used for a local residential street program. Responding to another question, City Attorney Bray said it might be possible to utilize certificates of obligation, which would not require an election. Mr. Martin said that given the city's rate cap, this issue may be moot because voter approval is needed to go outside the rate. Mr. Crull briefly reviewed the pay -back criteria, saying that he would provide more information on it, and a brief discussion ensued. Council Member Colnrencro asked if this loan program would eliminate any possibilities for grants. Mr. Crull replied that the state's ability to fund projects is decreasing every year, and this program is intended to encourage more local participation or a greater percentage of participation in a project. He added that applications are made on a project -by -project basis, and the city would have to follow TXDOT's regulations regarding the process. Council Member Gonzales asked about the interest rates on the loans. Mr. Crull said the interest rate is negotiable, but it could be about 70 basis points below market. Mr. Crull then gave a brie]presentation on toll roads. He explained that the same legislation which created the State Infrastructure Bank transferred the Texas Turnpike Authority's responsibility Minutes Regular Council Meeting January 20, 1998 Page 9 to TXDOT. He said that according to the new director of the toll road division, point-to-point routes are likely candidates and public support is an important part of the process in obtaining designation as a toll road. Mr. Crull said a tra flit model would need to be developed which would incorporate several issues, including sensitivity to the size of the toll, alternate routes, the origin and destination, and the reasonable growth of traffic. He said that a rough estimate of establishing a toll on the Kennedy Causeway, based on the current traffic volume of 20,000 vehicles per day and a $35 million project, could be a 50 cent -per trip toll for the length of the debt. Mr. Crull added that a preliminary study in establishing a toll road would cost about $30,000 to $40,000, and a more detailed financial package would need to be developed as well. Mr. Crull said he estimates that based on the size of the Kennedy Causeway project, a number of funding sources will be needed for it, such as state and federal funds, local taxes, tolls, and special benefit districts. Council Member Garcia asked how the debt would affect the city's bond rating. Mr. Crull said it would be calculated into the city's overall bond rating, and the capacity to pay it back is more of a component of the bond rating than having the debt itself. He added that if a toll road was not established, he thought a bond election would have to be held, and the debt service for those bonds approved by the voters would be outside the tax rate cap, which Mr. Hennings further explained. He emphasized that the causeway project is very large and it would have to be soundly financed. Responding to Mr. Martin. Mr. Crull said he thought a toll package could be developed with a "tiered" system based on residents and non-residents. He also discussed alternative routes Mr. Martin commented on the importance of this project being moved up on the state's priority listing. Council Member McNichols said that residents of Padre Island would be disadvantaged if they had to pay both a property tax increase and a toll to finance the causeway project. However, he said, one benefit of the toll road is that it incorporates more than the local tax base and is related to tourism. He agreed that the city needs to determine what it would take to raise the project's priority on the state funding list. Mayor Neal asked what would be the next step. Mr. Hennings said staff would come back with a report to answer the Council's questions, and then explain the process of the consultant's study with recommendations on how that could be financed. The Mayor then called for petitions from the audience and there were none. * * * * * * * * * * * * * Mayor Neal opened discussion on Item 3, baitstand lease agreement. He called for comments from the audience, and there were none. Minutes Regular Council Meeting January 20, 1998 Page 10 Responding to Council Nlember Martin, Mr. Hennings said that bids were not required on leases of city property. He said there was a discussion about this issue last year, and staff feels that the current operator has done a good job and there is a limited number of potentially successful operators for that facility. He said there was the option of opening this up for proposals. Council Member McNichols said he is not opposed to the lease agreement itself, but he does not support the amount of investment into the new facility. Mr. Malcolm Matthews, Director of Park and Recreation, said the city owns the existing bait stand and the restrooms, both of which need to be rebuilt; the project is budgeted at $218,000 in the Marina operating budget. He added that the marina has strived to be a full-service marina, and the Marina Fund is an enterprise fund which supports itself. City Secretary Chapa polled the Council for their votes as follows: 3. FIRST READING ORDINANCE Authorizing the City Manager or his designee to execute a 15 -year lease agreement with two 5 -year renewal options with Patricia Jane Stubbs for the L -Head Bait Stand, for a bait stand and fishing supply operation, in consideration of monthly rent of 6% of gross receipts or $1,500, whichever is greater. for April through November annually and 6% of gross receipts for December through March annually. The foregoing ordinance passed on first reading by the following vote: Colmenero, Garcia, Gonzales, B. Longoria, .1. Longoria, Martin, McNichols, and Neal voting "Aye"; Cooper absent. * * * * * * * * * * * * * Mayor Neal opened discussion on Item 4, wastewater system enhancement program. He called for comments from the audience, and there were none. In reply to Council Member McNichols, Mr. R.H. Shackelford, Director of Engineering Services, briefly described some of the areas of concern that will be addressed by the proposed contract with Urban Engineering. including rehabilitation of the sewer collection system in the Carolyn Heights and Sunnybrook/Mansheim areas, and cleaning of the sewer lines (15 -inch diameter and larger) in the four wastewater basins of Allison, Broadway, Greenwood, and Oso. Mr. Shackelford noted that $5.5 million is budgeted for the infiltration/inflow (I&I) collection system enhancement program, and staff will bring another I&I contract to the Council next week for their consideration. Ma) or Neal and Council Member Martin pointed out that the program had already been authorized by the Council. Mr. Martin also discussed the importance of continuing Minutes Regular Council Meeting January 20, 1998 Page 11 to improve and repair the city's wastewater collection system. Mr. Shackelford pointed out that there are 445,000 lineal feet of 15 -inch and larger lines in the four service areas mentioned, and there are over 1 million lineal feet of sewer lines in the Broadway service area alone. Responding to Council Member Colmenero, Mr. Shackellbrd described the proposed project schedule. City Secretary Chapa polled the Council for their votes as follows: 4. M98-007 Motion authorizing the City Manager or his designee to execute a Contract for Engineering and Consulting Services with Urban Engineering, Inc. for a total fee not to exceed $743,783 for the Infiltration/Inflow Collection System Enhancement Program. The foregoing motion passed by the following vote: Colmenero, Cooper, Garcia, Gonzales, B. Longoria, J. Longoria, Martin, McNichols, and Neal voting "Aye." * * * * * * * * * * * * * Mayor Neal opened discussion on Item 5, Regional Water Supply Task Force recommendations. He called for comments from the audience, and there were none. Council Member Gonzales questioned the second recommendation "to provide sufficient funding to secure professional services." City Manager Hennings said it would involved evaluating the Tampa Bay project and how it would apply to Corpus Christi's situation, as well as a consultant's study about the possibility of using brackish groundwater as feed stock for a desalination project. Dr. Gonzales said he did not think the city needed to hire a consultant to evaluate the Tampa Bay project, adding that Mr. James Dodson, Regional Water Director, could perform that task. Mr. Dodson explained that a member of the Regional Water Supply Task Force felt it was important to have someone Ihmiliar with the Tampa Bay project to help interpret that information. Council Member Martin said he agreed with Dr. Gonzales' assessment that the city did not need to hire a consultant; rather, they should let staff monitor the Tampa Bay situation over the next year. Mr. Martin also pointed out that the next item on the day's agenda pertained to the city pursuing the Garwood water. He said if the city is successful in acquiring that water, it will not need another source of water. Council Member McNichols, Co -Chairman of the Regional Water Supply Task Force, pointed out that the task force is truly regional in its composition. He said that for many years there has been a question of whether the area has a reliable source of groundwater, and it was up to the Council whether they should spend money at this time to answer that question. Dr. McNichols added Minutes Regular Council Meeting January 20, 1998 Page 12 that the information regarding the Tampa Bay project is extremely complex, and he noted that there has been public criticism that the desalination issue has not been thoroughly considered or studied. Dr. Gonzales said he thought it was important to answer the questions raised by Dr. McNichols, but he said they should give Mr. Dodson the opportunity to study the information first. Council Member Colmenero said the issue of possible contaminants in the desalination process has not yet been addressed in the information they have received. Mayor Neal said he thought the Council was basically in agreement with the recommendation that the task force and city staff closely monitor the progress of the proposed Tampa Bay desalination project (referred to as "A" in the proposed motion). With regard to the other two recommendations ("B" and "c-), lie asked if Mr. Dodson could provide an outline of what the task force thought they were asking the Council to approve. Mr. Martin suggested that staff conte back with recommendations "B" and "C" at such time as the information developed under "A" has called for those things. Mayor Neal said it was his opinion that the Council should track recommendations "B" and "C" to the permitting process of Garwood, so that if and when the interbasin transfer permit is granted, more information will be needed (including on desalination) to offset any criticisms as they move forward. The Mayor also requested a quarterly report on the Tampa Bay project. He then asked if there would be a motion to amend Item 5 to only vote on "A" with the proper wording of deferral for recommendations "B" and "C." Dr. Gonzales made a motion to amend Item 5 as stated below, seconded by Mr. Garcia. The motion to amend passed. City Secretary Chapa polled the Council for their votes as follows: 5. M98-048 Motion approving the following recommendation of the Regional Water Supply Task Force: A) direct the Regional Water Supply Task Force and City staff to closely monitor the progress of the proposed 1 ampa Bay desalination project and report to the Council quarterly; and directing staff to brine implementation of the following recommendations of the Task Force back to the City Council later for discussion as we move through the permitting process on Garwood: B) provide sufficient funding to secure professional services in evaluating the information obtained from the proposed Tampa Bay desalination project with respect to identifying any significant differences in the water supply issues and the application of desalination in the Tampa Bay area versus the Corpus Christi area; and C) initiate regional studies of the hydrogeology of the Gulf Coast Aquifer in the Corpus Christi area, especially with respect to the availability of brackish ground water as a feedstock for less expensive desalination processes. Minutes Regular Council Meeting January 20, 1998 Page 13 The foregoing motion passed, as amended, by the following vote: Colmenero, Garcia, Gonzales, B. Longoria, J. Longoria, Martin, McNichols, and Neal voting "Aye"; Cooper absent. * * * * * * * * * * * * Mayor Neal opened discussion on Item 6, legal services for Garwood application. He called for comments from the audience. and there were none. Council Member Martin made a motion to amend Item 6.a. that the contract with Brown & Potts provide that any subcontracts that exceed $25,000 must come back to the City Council for approval. The motion to amend was seconded by Council Member Garcia and it passed. City Secretary Chapa pol lecl the Council for their votes as follows: 6.a. M98-009 Motion authorizing the City Manager to employ the law firm of Brown & Potts to represent the City of Corpus Christi in all matters related to advancing and defending the application filed by the Garwood Irrigation Company pursuant to Section 11 of the "Exercise of Option and Amendment to Agreement between the City of Corpus Christi and Garwood Irrigation Company" dated February 22, 1994, including proceedings in the Texas Natural Resource Conservation Commission and all matters related to or affecting such proceedings, until a final determination by the Texas Natural Resources Conservation Commission and all appear therefrom, at an hourly attorney's fee of $140, plus reasonable expenses and costs of necessary expert witnesses. subject to appropriation, provided that all expenditures beyond $25,000 be brought back to the City Council for approval. The foregoing motion passed, as amended, by the following vote: Colmenero, Garcia, Gonzales, B. Longoria, .1. Longoria, Martin, McNichols, and Neal voting "Aye"; Cooper absent. 6.b. ORDINANCE NO. 023195 Ordinance appropriating 5325,000 in Unreserved Fund Balances from the No. 141 Water Fund amending Ordinance No. 022993 which adopted the FY 97-98 Budget by adding $325,000 to the No. 141 \Vater Fund for professional services. An emergency was declared and the foregoing ordinance passed by the following vote: Colmenero, Garcia, Gonzales, B. Longoria, J. Longoria, Martin, McNichols, and Neal voting "Aye"; Cooper absent. Minutes Regular Council Meeting January 20, 1998 Page 14 * * * * * * * * * * * * * Mayor Neal called for consideration of consent motions, resolutions, ordinances and ordinances from previous meetings on Items 7-12. The Council members did not request any items be withheld for discussion, nor were there any comments from the audience. City Secretary Chapa polled the Council for their votes and the following were passed: 7. M98-010 Motion approving supply agreements with the following companies for the following amounts in accordance with Coastal Bend Council of Governments Bid Invitation No. CBCOG-98-3 for food items which include canned and frozen fruit and vegetables, meats and condiments for an estimated six month expenditure of $71,466.21 based on low bid, low bid meeting specifications, best bid and only bid. The term of the contracts shall be for six months with an option to extend for up to three additional months, subject to the approval of the Coastal Bend Council of Governments, the suppliers, and the City Manager or his designee. Funds are budgeted in FY 97-98 by Senior Community Services. Sysco Food Service San Antonio, TX 70 Items $12,091.79 Performance Food Gaup Victoria, TX 26 Items $11,712.17 U.S. Foods Cornus Christi, TX 57 Items $25,796.72 Labatt Food Service Corpus Christi, TX 15 Items $3,771.16 Grand Total - $71,466.21 Alliant Food Service Austin TX 79 Items $18,094.37 The foregoing motion passed by the following vote: Colmenero, Gonzales, B, Longoria, J. Longoria, Martin, McNichols, and Neal voting "Aye"; Cooper and Garcia absent. 8. M98-011 Motion approving a supply agreement with City Dairy Services, Corpus Christi, Texas, in accordance with Coastal Bend Council of Governments Bid Invitation No. CBCOG-98-5, for milk and dairy products consisting of homogenized milk, buttermilk, low fat milk, low fat chocolate milk and skim milk. based on low bid for an estimated six month expenditure of $20,382.04. The term or the agreement shall be for six months with an option to extend for up to three additional months, subject to the approval of the supplier and the City Manager or his designee. Funds have been budgeted in FY 97-98 by Senior Community Services. Minutes Regular Council Meeting January 20, 1998 Page 15 The foregoing motion passed by the following vote: Colmenero, Gonzales, B. Longoria, J. Longoria, Martin, McNichols, and Neal voting "Aye"; Cooper and Garcia absent. 9. M98-012 Motion authorizing the C i ty Manager or his designee to execute an effluent use agreement with the APEX Golf Properties Corporation d.b.a. Pharaoh's Country Club, which will permit the taking of effluent from the Oso Water Reclamation Plant for the irrigation of the Pharaoh Golf Course. The foregoing motion passed by the following vote: Colmenero, Gonzales, B. Longoria, J. Longoria, Martin, McNichols. and Neal voting "Aye"; Cooper and Garcia absent. 10. ORDINANCE NO. 023196 Ordinance amending Ordinance No. 022558, passed and approved on April 30, 1996, by amending Section 3 to adopt the final assessment roll and assessments to be levied against the owners of property abutting on the following streets included in the Wynn Seale School Area Street Improvements -Phase III project: 16' Street - Cole to South Staples 17'h Street - Cole to South Staples 18'h Street - Cole to Baldwin Boulevard Naples Street - 18°i Street to South Staples An emergency was declared and the foregoing ordinance passed by the following vote: Colmenero, Gonzales, I3. Longoria, J. Longoria, Martin, McNichols, and Neal voting "Aye"; Cooper and Garcia absent. 11. ORDINANCE NO. 023197 Ordinance amending Ordinance 022368, passed and approved October 17, 1995, by amending Section 3 to adopt the final assessment roll and assessments to be levied against the owners of property abutting on the following streets included in the SPID/Ayers Area Street Improvements project: Alaniz Street - Sokol Drive to Sacky Street Wharton Street - Sokol Drive to Dead End Green Grove Street - Winters Street to Horne Road Alexander Street - 197 feet East of Ayers to Green Grove Hudson Street - Prescott to Vestal Street Vestal Street - Hudson Street to Sherman Street Vitemb Street - Hudson Street to Sherman Street An emergency was declared and the foregoing ordinance passed by the following vote: Minutes Regular Council Meeting January 20, 1998 Page 16 Colmenero, Gonzales.13. Longoria, J. Longoria, Martin, McNichols, and Neal voting "Aye"; Cooper and Garcia absent. 12. ORDINANCE NO. 023198 Ordinance authorizing the City Manager or his designee to execute a one-year Use Privilege Agreement with Ackerley Airport Advertising, d.b.a. AK Media Airport to operate an advertising services business at various locations in the Corpus Christi International Airport in consideration of 58% of gross profits or $66,000 annually, whichever is greater. An emergency was declared and the foregoing ordinance passed by the following vote: Colmenero, Gonzales, B. Longoria, J. Longoria, Martin, McNichols, and Neal voting "Aye"; Cooper and Garcia absent. * * is * * * * * * * * * Mayor Neal called for the City Manager's report. Mr. Hennings said the Housing and Community Development Department will begin holding meetings to receive input on the Consolidated Annual Action Plan. 1 le noted that the Council meeting will be held at Moody High School next week, and some of the key issues on the agenda will be the Shoreline Boulevard landscape plan, consulting contract on the hurricane response program, computer systems, and two zoning cases. Mr. Hennings also referred to a report in last Friday's transmittal packet regarding the transfer of Garwood water from the Colorado River to the Lake Texana pipeline. He explained that there had been some discussions about moving that water to Sandy Creek and then letting it flow to Lake Texana. However, the decision was made by the Lavaca-Navidad River Authority board to not utilize that option; instead, the city will plan to build a pipeline to take the Garwood water out of the Colorado River. Mr. Hennings said staff did not keep the City Council informed about those discussions, which occurred about I -11/2 years ago, and he apologized for that. Mayor Neal asked if the contracts for the seawall repairs and the Wesley Seale Dam would be on next week's agenda, and Mr. 1 -Jennings said they would be put off for a week. The Mayor also requested a detailed report about the drainage system, and he reminded the Council members that the consultant for the city manager search will meet with them individually on January 22-23. He also referred to the meeting next week at Moody High School. Council Member Martin said he appreciated Mr. Hennings' comments on the Garwood water situation. He also questioned a stall response to a question about drainage problems in the Wood River area. Mr. Crull said the Stormwater Superintendent would be meeting with the Wood River board that night. Minutes Regular Council Meeting January 20, 1998 Page 17 Council Member Gonzales said he had received a letter regarding an incident at one of the city's golf courses. Mr. Hennings replied that he would deal with the situation, and respond to the citizen with a copy to the Council. Dr. Gonzales said he had again seen the public service announcement featuring Police Chief Alvarez and a local attorney, to which he objected. Mr. Hennings said he thought those PSAs had been stopped, but he said he would see to it that they are stopped. Council Member McNichols commented that by taking the Garwood water via a pipeline eliminates the problem of channel losses and evaporation. He also requested the information that had been gathered previously regarding the city's smoking ordinance to consider whether any changes need to be made in the smoking ordinance now. Council Member Colmencro requested an update on the firefighters' contract negotiations. Mr. Hennings said there would he a closed session on that issue next week. Mayor Neal asked staff to provide the Council with the schedule regarding the electric power issue, and he noted that the February 10th hearing would probably be lengthy, which will impact other issues on the agenda for that day. The Mayor also announced that Southwestern Bell Wireless began the program of providing cellular phones to school crossing guards. There being no further business to come before the Council, Mayor Neal declared the Council meeting adjourned at 7:00 p.m. on January 20, 1998.