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HomeMy WebLinkAboutMinutes City Council - 07/20/1999I 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 July 20, 1999, which were approved by the City Council on July 27, 1999. WITNESSETH MY HAND AND SEAL, this 27th day of July, 1999. Armando Chapa City Secretary SEAL MINUTES CITY OF CORPUS CHRISTI, TEXAS Regular Council Meeting July 20, 1999 12:04 p.m. PRESENT Mayor Samuel L. Neal Jr. Mayor Pro Tem Rex A. Kinnison Council Members: Javier D. Colmenero Henry Garrett Dr. Arnold Gonzales* Betty Jean Longoria John Longoria* Mark Scott ABSENT Melody Cooper City Staff: City Manager David R. Garcia City Attorney James R. Bray Jr. City Secretary Armando Chapa Assistant City Attorney Alison Gallaway Recording Secretary Rachelle P. Ramon Mayor Neal called the meeting to order in the Council Chambers of City Hall. The invocation was delivered by Rev. E.F. Bennett (retired), following which the Pledge of Allegiance to the flag of the United States was led by Council Member Colmenero. 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 July 13, 1999. A motion was made and passed to approve the minutes as presented. * * * * * * * * * * * * * Mayor Neal deviated from the agenda and opened discussion on Item 15, a resolution supporting the election of Mayor Samuel L. Neal Jr. as President -Elect of the Texas Municipal League (TML). He then recognized Mayor Emeritus Luther Jones, who said he thought Mayor Neal would be a great addition to TML if he is elected president. Council Member Betty Jean Longoria said it is important to stay active on the state and national levels. She noted that she was elected by the membership of the Association of Mayors, Councilmembers and Commissioners to be their representative on the TML Board. *Council Member Gonzales arrived at 12:10 p.m. and Council Member John Longoria arrived at 12:12 p.m. Minutes Regular Council Meeting July 20, 1999 Page 2 Council Member Scott made a motion to approve Item 15, seconded by Mrs. Longoria. Mayor Pro Tem Kinnison called for comments from the audience. Mr. Abel Alonzo, 1701 Thames, said he thought Mayor Neal had earned the honor of running for the TML presidency. He said he hopes the Council supports the proposed resolution. City Secretary Chapa polled the Council for their votes as follows: 15. RESOLUTION NO. 023699 Resolution supporting the election of Mayor Samuel L. Neal Jr. as President -Elect of the Texas Municipal League. The foregoing resolution passed by the following vote: Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Neal abstaining; Cooper absent. Mayor Neal thanked the Council, saying this action allows them to proceed with the process. * * * * * * * * * * * * * Mayor Neal announced the closed session, pursuant to Texas Government Code Section 551.071 regarding City of Corpus Christi v. Advisory Commission on State Emergency Communications, No. 99-02304, 201' District Court, Travis County, Texas, with possible action related thereto in open session. The Council went into closed session. The Council returned from closed session. * * * * * * * * * * * * * Mayor Neal called for petitions from the audience. Mr. R.F. Hasker, 1813 Wallace, said there has still been no contract or date set to begin construction on the Southside Senior Center. Council Member John Longoria asked the City Manager to prepare a memo answering Mr. Hasker's questions with copies provided to the Council. Mr. Garcia told Mr. Hasker they had discussed that issue several times but they will provide information in writing. Mrs. Pat Suter, 1002 Chamberlain, asked that the Council put their support behind a request to the Greater Corpus Christi Business Alliance to support the publication of a bird brochure. She said the previous brochures have all been distributed. Mrs. Suter added that Corpus Christi is not a very friendly place for birders, which she explained. Minutes Regular Council Meeting July 20, 1999 Page 3 Mr. Phil Rosenstein discussed the many types of community service performed by local refineries. He noted that Valero Refining is one of the sponsors of the senior center coed softball team and CITGO will sponsor a dance at Lindale Senior Center on August 3rd. Mr. Jimmie Till, 6034 Lost Creek Dr., thanked Mayor Neal for the way he is leading the budget discussions, as well as Council Members Kinnison, Scott, Gonzales and John Longoria. He said it is important to have discussions about the budget. Mr. Till said it would be a shame if the Watergarden was shut down, particularly in light of the Singer family's contribution. Mr. Danny Noyola, Superintendent of West Oso ISD, said he is one of three elected representatives for the West Oso Citizens Advisory Council. He said they have had very productive meetings thus far and he thanked the Corpus Christi Police Department for facilitating the discussions. He said they directly contact Sgt. Chris Hooper when there are problems in that area. He also thanked Council Members John Longoria, Betty Jean Longoria, and Dr. Gonzales for their participation. Mr. Noyola said their first public safety project will relate to the Cliff Maus road improvement project, which is part of the capital improvement program. He presented a petition containing over 500 signatures of people supporting that project. Mr. Jose Marroquin, 2433 Allencrest, criticized a proposal to shut down the Watergarden. He urged the Council to review the amount of water the city has received thus far from Lake Texana versus the amount of money the city has paid for that water. He said the citizens should not pick up the tab for someone's mistake. Mayor Neal pointed out that there would be a presentation later in the meeting regarding the Mary Rhodes Pipeline. Mr. Roger Wright, 3500 Island Moorings Parkway (Port Aransas), said the "live aboards" at the Corpus Christi marina were forced to leave, which diminished security and abandoned a possible revenue source for the marina. He described the situation he experienced when trying to obtain a five-day permit to stay aboard his boat over the July 4th weekend. He also discussed how aspects of the ordinance regulating bays, boats and waterways are selectively enforced. Mr. Wright said he is convinced that the city does not know how to operate a marina, and he said the Council would best be served by removing the marina from the operation of the Park and Recreation Department or privatizing it. Mr. J.E. O'Brien, 4130 Pompano, read a portion of the city's contract with its lobbyists, noting that the city may also terminate the contract for convenience at its sole discretion. He said that contracts should be honored, but the contract language gives the city the option of canceling the contract. Mr. O'Brien also read a portion of the Bexar County District Attorney's opinion regarding the use of public funds for lobbying activities. Mayor Neal said what Mr. O'Brien read from was a decision regarding Commissioners Courts and county government --it did not say a word about city government or City Councils. Mr. Irving Dietz, 455 Miramar, described how he has been questioning the use of funds to Minutes Regular Council Meeting July 20, 1999 Page 4 complete the 1986 bond program, in particular, specific street projects. He said the city is taking taxpayers' money and passing it on to the IRS. The Mayor urged Mr. Dietz to read the memo to the Council dated July 13, 1999 and to watch last week's proceedings on that issue because they discussed it at length and it provides answers to Mr. Dietz's questions. Mr. Garcia noted that he and the Budget Department staff met with Mr. Dietz and they explained the 1986 bond projects. * * * * * * * * * * * * * Mayor Neal called for consideration of the consent agenda (Items 2-14). There were no comments from the audience. City Secretary Chapa stated that Item 5 needed to be pulled so it could be amended. He then polled the Council for their votes and the following were passed: 2. M99-239 Motion approving the purchase of a digital voice logging recorder in accordance with Request For Proposal No. BI -0114-99 from Vista Com Corporation, Hillsboro, Texas, on the basis of most advantageous proposal, for the amount of $38,137. The net cost to the City will be $18,137 after a $20,000 reimbursement is received from the Coastal Bend Council of Governments. The recorder will be used by the Police Department and is budgeted in the 1998-99 Budget. The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 3. M99-240 Motion approving the purchase of two 35 HP, 4 -wheel drive tractors in accordance with Bid Invitation No. BI -0159-99, from Nueces Power Equipment, Corpus Christi, based on the low bid of $36,914. The tractors will be used by Park & Recreation Department and are included in the 1998-99 Capital Outlay as additional equipment. The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 4. M99-241 Motion approving supply agreements for reformulated gasoline -bulk delivery; regular gasoline -commercial locations; and low-sulphur diesel fuel -bulk delivery, in accordance with Bid Invitation No. BI -0143-99, from the following companies, based on low bid. The term of the supply agreements shall be for twelve months, with options to extend for up to two additional twelve-month periods subject to the approval of the contractors and the City Manager or his designee. Minutes Regular Council Meeting July 20, 1999 Page 5 Oil Patch Petroleum, Inc. Corpus Christi TX 649,360 gal. Reformulated Gasoline 945,555 gal. Low Sulphur Diesel Fuel Estimated: $798,882.06 SSP Petroleum Corpus Christi, TX 123,000 gal. Regular Gasoline Estimated $72,939.00 Total Award: $871,821.06 The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 6.a. M99-243 Motion approving the purchase of an integrated software system in accordance with Bid Invitation No. BI -0151-99 from Integrated Information Systems Inc., Tempe, Arizona on the basis of low bid of $166,750. Funds are budgeted in the FY 1998-99 Budget by the participating departments. The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 6.b. M99-244 Motion approving the purchase of two servers and associated equipment in accordance with the State Cooperative Purchasing Program from Computer Education Solutions Inc., Corpus Christi, Texas on the basis of low bid of $33,975. Funds are budgeted in the FY 1998-99 Budget by the Department of Housing and Community Development. The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 7. M99-245 Motion authorizing the City Manager or his designee to execute a construction contract in the amount of $72,289.88 with Garrett Construction Inc. of Ingleside, Texas for the ADA compliance -curb ramp improvements project (Agnes Street and Everhart Road). The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 8. M99-246 Motion authorizing the City Manager or his designee to execute a construction contract in the amount of $93,875 with King -Isles Inc. for the Santa Fe Street resurfacing (Ayers/Louisiana) project. Minutes Regular Council Meeting July 20, 1999 Page 6 The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 9. M99-247 Motion authorizing the City Manager or his designee to execute a construction contract in the amount of $244,197 with Bracco Construction Co., Corpus Christi, Texas for the airport ditch ramps (Horne Road to Padre Island Drive) project. The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 10. M99-248 Motion authorizing the City Manager or his designee to execute a maintenance service contract in the amount of $105,388 with C.W. Campbell Electric Inc., Corpus Christi, Texas for the water distribution system: remote water quality monitoring sites -ongoing instrumentation maintenance program. The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 11. M99-249 Motion authorizing the City Manager or his designee to execute a construction contract in the amount of $37,500 with Gill Landscape Nursery for the Gas Department main building landscaping project. The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 12. M99-250 Motion authorizing the City Manager or his designee to amend Contract No. 6200000032 - Oso Parkway stormwater quality demonstration project with the Texas Natural Resource Conservation Commission by extending the end date from May 31, 1999 to December 1, 1999. The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. Minutes Regular Council Meeting July 20, 1999 Page 7 13. RESOLUTION NO. 023697 Resolution authorizing City Manager or his designee to execute an interlocal agreement with Texas A&M University -Corpus Christi (TAMU-CC) for TAMU-CC to provide work to and partial payment for eligible students participating in the federal work-study program. The foregoing resolution passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 14. ORDINANCE NO. 023698 Ordinance authorizing the City Manager or his designee to execute a use privilege agreement with Western Geophysical Company Inc. to install, operate, use, repair, maintain, and remove seismic receiver cables on approximately 56.59 acres of City property in Padre Island Subdivision, in consideration of payment of $565.90. An emergency was declared and the foregoing ordinance passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. * * * * * * * * * * * * * Mayor Neal opened discussion on Item 5, replacement chillers for Memorial Coliseum. City Secretary Chapa explained that staff had presented the Council with a memo pointing out a mistake on the ordinance that was originally submitted. He said Section 2 was amended to add 5.6% interest. Council Member Scott made a motion to substitute the correct ordinance, seconded by Council Member Kinnison. The Mayor then called for comments from the audience. Mr. J.E. O'Brien said the City Charter prohibits transferring funds from the Utility Department to other city funds. He said the City Attorney has issued a legal opinion stating that a loan is not a transfer, yet the word "transfer" continues to be used in the ordinance. He said they will not have any option except to take this to a judge and ask him to clarify the issue. He also questioned how the loan will be repaid. Mayor Neal said they will try to answer Mr. O'Brien's question during the upcoming budget discussion. Mr. Kinnison said he thought the reason the city is utilizing the loan is because it could not get financing from G.E. Capital. Mr. Kevin Stowers, Engineering Services, replied that G.E. Capital has requested to restructure the contract as a result of their analysis of their internal loan performance. Mr. Kinnison asked if G.E. Capital was the only company the city uses for this financing. Mr. Stowers said the city has a contract with G.E. Capital and they have a right of first refusal; however, the city can approach other entities or local banks for lease/purchases if that is Minutes Regular Council Meeting July 20, 1999 Page 8 appropriate. He said the decision was made to move quickly due to time contraints which is why the city did not bid out this project. Mr. Chapa polled the Council on the motion to substitute ordinances on Item 5.a., which passed (Cooper absent). Mr. Chapa then polled the Council for their votes: 5.a. ORDINANCE NO. 023696 Ordinance appropriating $364,600 from the unreserved fund balance in the Combined Utility Systems Fund; transferring and appropriating it in the No. 3180 Convention Center Capital Projects Fund to install two new air conditioning chillers in Memorial Coliseum, to be reimbursed to the Combined Utility Systems Fund with interest; amending Ordinance No. 023387, which adopted the FY98-99 Budget, by adding $364,600 to the Combined Utility Systems Fund; amending Ordinance No. 023474, which adopted the FY98-99 Capital Budget, by adding $364,600 to the No. 3180 Convention Center Program. An emergency was declared and the foregoing ordinance passed, as amended, by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 5.b. M99-242 Motion authorizing the City Manager or his designee to execute an installation contract in the amount of $182,057 with Malek Inc. of Corpus Christi, Texas for the Memorial Coliseum chiller replacement project. The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. * * * * * * * * * * * * * Before Mayor Neal opened discussion on Item 17.a., adopting the FY 99-00 operating budget, City Secretary Chapa said they would consider Item 16 (bait stand lease) later in the meeting. Mayor Neal called for comments from the audience on Item 17.a. regarding the budget. Mr. J.E. O'Brien expressed concern about the increased funding for the Greater Corpus Christi Business Alliance and the increase in water rates. He said he thought the Alliance budget should be adopted prior to the Council adopting the city's budget, and he referred to figures in the Alliance's budget. He questioned whether it is legal for the Alliance to make their committed debt service payments on the Columbus ships out of the hotel/motel tax monies. Mrs. Marie Wood discussed the use of revenue from the hotel/motel tax. She suggested that the Council postpone their decision on the budget until next week since a delegation of city officials Minutes Regular Council Meeting July 20, 1999 Page 9 will be meeting this week with Spanish representatives regarding the fate of the Columbus ships. Mr. Leon Perez, 904 Buford, said the only reason he comes to the Council meetings is to see all the money the Council approves each week through the agenda items. Mr. Jose Marroquin said the Council should not use the hotel/motel tax monies to increase the funding to the Alliance. Council Member Scott referred to an article in the day's local newspaper regarding a request from the Alliance for additional funding for the Corpus Christi Convention and Visitors Bureau (CVB) in the amount of $295,000. He said he had met with Alliance Chairperson Laurie Cook to discuss the matter and to try to reach a compromise in light of the city's budget constraints, particularly in an effort to not shut down the Watergarden to provide the additional monies. Mr. Scott then made a motion to amend the ordinance to decrease the contribution to the Alliance from the Visitors Facility Fund from $295,000 to $141,000. He said that would provide an additional one -time -only supplemental contribution from the city. Council Member Kinnison seconded Mr. Scott's motion. Council Member Gonzales discussed the importance of having a public hearing and public comment on the budget. He said it is wrong for Council members to meet with representatives of other agencies and draw up a compromise agreement after the Council had previously voted on an issue. He said there cannot be a compromise unless a quorum of the Council approves it. He said it bothered him that the process was circumvented. Responding to Dr. Gonzales' request for additional information about the issue, Mr. Scott further explained the sequence of events that occurred between some Council members and Alliance representatives. Mr. Kinnison offered a friendly amendment to Mr. Scott's motion as follows: decrease the Alliance contribution from $295,000 to $141,000; increase the budget to allow for the chiller loan repayment (year 1) for $90,418; decrease the Coliseum operating cost in electrical and maintenance by $35,634; and eliminate the Convention Center roof replacement project funded at $141,000. City Manager Garcia distributed a set of figures comparing the city's actual ad valorem tax revenues with the estimated amounts for FY 99-00. He noted that the tax base did not grow as much as staff had anticipated when they prepared the proposed budget --he said the assessed valuation is about $35 million less than they had projected. He said while that results in a slight reduction in ad valorem tax revenues, staff feels the budget can accommodate that with some minor adjustments. Responding to a question from Mr. Kinnison, Mr. Garcia said he was recommending that the city marshals program be considered as a revenue -neutral program until it has been in operation for Minutes Regular Council Meeting July 20, 1999 Page 10 some time to determine what the actual revenues will be. Ms. Barb Sudhoff, Director of Municipal Courts, further discussed the city marshals program and responded to Council members' questions. Council Member Betty Jean Longoria said she is very supportive of economic development and she was disappointed to learn of the events referred to by Mr. Scott and Dr. Gonzales. Mr. Garcia explained that at the direction of the Council last week, he provided a list of funding options for the $295,000 for the Alliance which would not require shutting down the Watergarden. He said he does not recommend any of the cuts because they will affect convention center operations and staffing. However, he does recommend the budget he submitted to the Council, which includes $2.1 million for the Alliance. The City Manager reiterated that staff can make temporary repairs to the convention center roof until a complete renovation can be accomplished through the convention center remodeling contract. Mr. Scott said he would accept Mr. Kinnison's friendly amendment to his original motion. Mayor Neal asked an Alliance representative to address the Council. Mr. Gonzalo Sandoval, Chair -Elect of the Alliance, said the contribution of $141,000 being suggested by the Council was less than their original request of $295,000. He said the Alliance will do everything they can within their own budget to reallocate dollars, although it will not be to that amount. Ms. Chris Williams, CFO for the Alliance, said that half of the $200,000 balance in the CVB is committed to bills they have not yet received. The other amount resulted in savings from staffing gaps, but they would like to apply it to certain one-time expenses needed by the CVB, which she explained. Ms. Char Beltran also responded to Council member questions. A discussion ensued. Mr. Kinnison asked Mayor Neal to instruct the Convention Center Expansion Advisory Committee to expand their area of interest, and he said he hopes the Mayor will appoint a Council member to be a liaison to that committee. Following additional discussion, City Secretary Chapa polled the Council for their votes on Mr. Scott's motion. It failed to pass by the following vote: Neal, Kinnison, J. Longoria, and Scott voting "Aye"; Colmenero, Garrett, Gonzales, and B. Longoria voting "No"; Cooper absent. With regard to the Alliance's original request for $295,000, Dr. Gonzales said he had asked the City Manager to analyze the city's travel budgets, and he said he is willing to cut his travel budget in half if it comes to spending money for economic development. He said he had also asked Mr. Garcia to look at the budget for television programming. He suggested that the Council delay the approval of the budget for one week to further review it. Mr. Kinnison encouraged the City Manager to look at the Alliance's budget and give the Council suggestions next week where they can make cuts since they have over a $300,000 increase in expenditures. Minutes Regular Council Meeting July 20, 1999 Page 11 Referring to Mr. Garcia's list of funding options, Mr Kinnison then made a motion to include items 4 and 5 with the previous motion, which would result in increasing the Alliance's contribution to $260,127. Mr. Scott said he does not support reducing the convention center's operating costs by $93,127 (item 5 on the list of funding options). He made a motion to exclude item 5, which would result in a contribution to the Alliance of $189,634. Mr. Colmenero seconded the motion. Mr. Chapa polled the Council for their votes on Mr. Scott's motion. It failed to pass by the following vote: Colmenero, Garrett, Gonzales, and Scott voting "Aye"; Neal, Kinnison, B. Longoria, and J. Longoria voting "No"; Cooper absent. Mrs. Longoria said since the Alliance was willing to settle for $141,000, she questioned why the Council was trying to find additional funding for them. She made a motion to reconsider Mr. Scott's original motion (as amended) to provide a $141,000 contribution to the Alliance. Mr. Garrett seconded the motion to reconsider. Responding to Dr. Gonzales, Mr. Sandoval said there were some conversations between Ms. Cook, the Alliance Chairperson, and some Council members about the Alliance's funding. Mr. Sandoval reiterated that the lower funding amount will mean fewer dollars going to the Latin marketing program and other programs. He acknowledged that the $141,000 was a compromise. Mr. Chapa polled the Council on the motion to reconsider, and it passed by the following vote: Neal, Colmenero, Garrett, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Gonzales voting "No"; Cooper absent. Mr. Chapa then polled the Council on the original motion (as amended) to provide $141,000 to the Alliance, which also included Mr Kinnison's friendly amendment. The motion passed by the following vote: Neal, Colmenero, Garrett, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Gonzales voting "No"; Cooper absent. With regard to the rest of the operating budget, Mr. Longoria made a motion to fund the Texas Jan Festival in the amount of $7,500 as a non -departmental expenditure on an annual basis to come from the following sources: $3,750 from the Arts Projects line item and $3,750 from the Arts Grants line item. Mr. Colmenero seconded the motion. Mr. Chapa polled the Council on Mr. Longoria's motion to amend the budget, and it passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. Mr. Kinnison noted that earlier the Council was provided the actual tax base information, which required that the budget be amended to reflect that. He made a motion for the adjustment for the final net tax base of $171,826, which affects the General Fund revenues. He said there also needs to be an adjustment for the G.O. Debt revenues for $39,339. Mr. Longoria seconded the motion. Mr. Garcia added that one of the changes staff looked at last week at the request of Mrs. Longoria was Minutes Regular Council Meeting July 20, 1999 Page 12 the Superintendent of Park Planning position (which is currently filled). Staff suggested they fund the needed $60,000 from the Park Development Trust Fund, which is an allowable expense. Mr. Kinnison said he would add Mr. Garcia's suggestion to his motion; Mr. Longoria agreed. Mr. Chapa polled the Council on Mr. Kinnison's motion to amend the budget as stated above. It passed by the following vote: Neal, Garrett, Kinnison, J. Longoria, and Scott voting "Aye"; Colmenero, Cooper, Gonzales, and B. Longoria absent. Mr. Chapa then polled the Council for their votes on Item 17.a. as follows: 17.a. ORDINANCE NO. 023702 Adopting the City of Corpus Christi Budget for the ensuing fiscal year beginning August 1, 1999; to be filed with the County Clerk; appropriating monies as provided in said budget. The foregoing ordinance passed on second reading, as amended, by the following vote: Neal, Garrett, Kinnison, J. Longoria, and Scott voting "Aye"; Colmenero, Cooper, Gonzales, and B. Longoria absent. * * * * * * * * * * Mayor Neal called for a brief recess. * ** Upon reconvening, Mayor Neal recognized employees of the city's Wastewater Department for having received the Peak Performance Gold Award from the Association of Metropolitan Sewerage Agencies. Mr. Foster Crowell, Wastewater Superintendent, introduced Johnny Perales, Cliff Beaber, Adan Flores, Duvane Haskin, Larry Gonzales, John Alexander, and Carl Williams * * * * * * * * * * * * * Mayor Neal opened discussion on Item 16, L -Head bait stand lease. He called for comments from the audience, and there were none. City Attorney Bray said staff has been negotiating this item for the last few weeks and they recommend it. He noted that it involves two items --a short-term lease which, according to the City Charter, can be passed that day on one emergency reading and the long-term lease, which will be passed under the Charter on two readings over 28 days (effective 60 days after that). He said staff wanted to move ahead quickly because part of the agreement is to allow the bait stand to move to a new temporary facility. He said the city is going to furnish several items of equipment and assist with the move. In addition, said Mr. Bray, the agreement provides for the construction of a 2,300 -square foot bait stand facility. He said that will be bid basically utilizing previous specifications; the only Minutes Regular Council Meeting July 20, 1999 Page 13 changes were those necessary to move to a new location, which has been a very important issue from the city' s standpoint. Mr. Bray said staff believes the new location will be both safe and a good business location. He said the city will contribute $150,000 and the agreement provides that if the bids come in over, the lessee can contribute to the award of the bid. For every $5,000 that Ms. Stubbs contributes, she will get an additional year on the base term of the lease of 15 years. He added that the city acknowledges that Ms. Stubbs is not in default of rental payments. He said between first and second reading of the long-term lease, they contemplate working on language in one particular provision regarding Ms. Stubbs' shrimp boats and where they are kept. He said they feel the proposal is fair to both sides and they recommend that the Council proceed. Mayor Neal asked if the proposal has been agreed to by Ms. Stubbs and her attorney. Mr. Bray said it has been and Ms. Stubbs has signed the agreement. Some Council members thanked Ms. Stubbs and staff for their cooperation on this issue. City Secretary Chapa polled the Council for their votes as follows: 16.a. ORDINANCE NO. 023700 Ordinance amending the L -Head Bait Stand agreement on a temporary basis not to exceed one year. An emergency was declared and the foregoing ordinance passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. 16.b. FIRST READING ORDINANCE Ordinance amending the L -Head Bait Stand agreement for a term of fifteen years plus one year for each $5,000 contributed by Lessee for construction of the bait stand, with two additional five-year extensions if agreed to by the City Manager and the Lessee; and providing for publication. The foregoing ordinance passed on first reading by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. * * * * * * * * * * * * * Mayor Neal opened discussion on Item 17.b., adopting the FY 99-00 capital budget. He called for comments from the audience. Minutes Regular Council Meeting July 20, 1999 Page 14 Mr. Danny Noyola submitted additional signatures to the previous petition in support of improvements to Cliff Maus Road from Rockford Drive to Old Brownsville Road. He said the project would provide widening of the roadway, sidewalks, curbs and gutters, and appropriate drainage that will ensure improved public safety for the 1,100 elementary students (and their families) who will be attending the new John F. Kennedy Elementary School in January 2000. He said they are requesting at least $75,000 be approved for design and planning of the project during the second reading of the capital budget. Council Member Betty Jean Longoria asked if the design of that project could be considered in next year's CDBG program. Mr. Tom Utter, Assistant City Manager for Development Services, said it could be considered. He noted that the CDBG process will begin again in January. Mayor Neal asked if the Cliff Maus Road project would require action by the Metropolitan Planning Organization (MPO). Mr. Angel Escobar, Acting Director of Engineering Services, said it would not. Responding to Council Member John Longoria, Mr. Escobar said the project was originally envisioned in the capital improvement plan in two phases --1 and 2. After talking with Mr. Noyola, staff divided the project into Phase 1A, which is immediately in front of the school; Phase 1B, which would continue to SPID; and Phase 2, between Old Brownsville Road and Bear Lane. Mr. Escobar and Mr. Utter responded to Council members' questions. In reply to Mr. Longoria, City Manager Garcia said two of the road improvement projects included in the capital budget as unfunded projects are Kostoryz and Cornett. He said the Council indicated that the funds available from the close-out of the Holly Road project should be reallocated to Kostoryz and Cornett. Mr. Longoria asked if the design for the Cliff Maus road improvements could proceed if $34,000 was available, and Mr. Garcia replied affirmatively. Mr. Longoria suggested to Mr. Noyola that they consider using S50,000 in CDBG funds for the road project. Mr. Noyola replied that the $50,000 has already been allocated. Mr. Longoria then made a motion to move the Cliff Maus project into the current capital budget on an unfunded basis, which moves it up two years. Responding to Mayor Neal, Mr. Utter said if the Council wanted to fund the Cliff Maus project from CDBG funds, staff could make recommendations about reducing the funding for other CDBG programs. Mr. Garcia pointed out that the capital budget is very limited this year. He agreed with Mr. Longoria's proposal to include Cliff Maus as an unfunded project and as other projects are closed out, the available funds can be added to the unfunded projects. Mr. Jesse Noyola emphasized the importance of improving Cliff Maus Road. In reply to Mrs. Longoria, Mr. Escobar said the total cost of the Cliff Maus project is estimated at $4.7 million. He said Phase lA would cost $1.4 million, which includes stormwater, sanitary sewer, and water improvements; the street portion of that is $550,000. Mr. Longoria noted Minutes Regular Council Meeting July 20, 1999 Page 15 that if a bond election is held, the Cliff Maus project could be included. Mrs. Longoria commented on the long-term commitment that would be made if the Cliff Maus project is included. Mr. Garcia agreed, saying it would be one of the largest projects in the capital improvement program (comparable in scope to Leopard Street). Council Member Scott asked that if the Cliff Maus project is approved, whether it will be moved ahead of other projects that have been deferred, and Mr. Garcia said it will be. Mr. Longoria said that phase of it would be. Mr. Danny Noyola also further discussed the history of the Cliff Maus project. Council Member Kinnison discussed the possibility of identifying $34,000 out of the street materials budget for the Cliff Maus project. Mr. Longoria said Cliff Maus should not be moved in front of the other two unfunded projects--Kostoryz and Cornett. Nueces County Commissioner David Noyola said they were only asking for $34,000. Mr. Longoria replied that the city and the county could split that cost. Ms. Shirley Jordan, a resident of West Oso, said they want to make sure that the children's and community's safety is the first issue --they are not trying to move ahead of other projects. Mrs. Longoria seconded Mr. Longoria's motion to include the Cliff Maus project as an unfunded project in the capital budget; the motion passed (Cooper absent). Mayor Neal called for additional public comment. Mr. J.E. O'Brien said he thought the amount of the proposed capital budget should be reduced. He referred to project #10 (new landfill site/Elliott Landfill improvements and closure) of the public health and safety projects/solid waste. He questioned why it would be adopted as part of the current year CIP when it is not going to be needed for several years. Mr. O'Brien also asked about whether money was put aside to construct the new landfill. Mr. Utter replied that in 1995 staff came before the City Council with a proposed rate increase for Solid Waste services, which included funding for the purchase of the new landfill and its construction. He delineated the monies that were set aside each year for that purpose for a total of about $3.2 million. He added that the city will have to sell the bonds some time next year to buy the property for the new landfill. In addition, monies will be needed for at least a portion or all of the construction costs. Mr. Escobar and Mr. Andy Leal, Director of Solid Waste Services, further explained the time frame for the existing and new landfills. Mr. Garcia also discussed the related bond issue in response to Council members' questions. Mrs. Longoria referred to specific park projects in the CIP, and she asked about the location of Tuloso and Country Estates parks. Mr. Carlos Mendez, Superintendent of Park Planning, described their location. She asked staff to inform the residents near those two parks as well as Cenizo and Castle River parks why they will not be developed. Mrs. Longoria also asked if the CIP included funds to develop the 30 acres the city received from OxyChem; Mr. Mendez said it did not. Minutes Regular Council Meeting July 20, 1999 Page 16 She also commented on the need to improve the walking path in West Guth Park. Mr. Mendez said a design is being developed to renovate the sidewalks from the senior center to tie into the walking trail, part of which will be renovated along with the picnic areas. Mr. Tony Cisneros, Director of Park and Recreation, discussed the need for a comprehensive master plan. Dr. Gonzales suggested that city staff visit with county officials about those projects. After further discussion, Mrs. Longoria made a motion to list the West Guth renovations and Oxychem park as future unfunded projects on the CIP in order to discuss it if and when there is a bond issue. Dr. Gonzales seconded the motion and it passed (Cooper absent). Mr. Colmenero agreed about the need for a comprehensive list of projects in anticipation of a bond issue. He said it is important to address the process of how lands can be deeded to the city. City Secretary Chapa polled the Council for their votes on Item 17.b. as follows: 17.b. ORDINANCE NO. 023703 Approving the FY 1999-00 Capital Budget in the amount of $149,213,700. The foregoing ordinance passed on second reading, as amended, by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. * * * * * * * * * * * * * Mayor Neal opened discussion on Item 18, FY 99-00 budget for the Greater Corpus Christi Business Alliance Convention and Visitors Bureau. Council Member Scott questioned whether the city should establish performance measures for the Alliance. Mr. Garcia replied that he did not think there were any performance measures in the existing contract, and he said staff can develop them in conjunction with the Alliance. The Mayor called for comments from the audience. Mr. J.E. O'Brien said it would be prudent to postpone this action for one week so the Alliance can make the changes resulting from the Council's action earlier that day. He also asked which monies are being used to pay the debt service on the Columbus fleet, and whether it is legal to use hotel/motel tax dollars for that. City Attorney Bray replied that the statute specifically allows hotel monies to be used for historical restoration and preservation projects and activities, for which the Columbus ships would qualify Mr. Abel Alonzo said that for the first time the Council sent a message to the Alliance that Minutes Regular Council Meeting July 20, 1999 Page 17 the Council runs the city and they have the control. He said he is a strong supporter of economic development, and he discussed the need for the Alliance to be accountable and responsible. Dr. Gonzales said he agrees with Mr. O'Brien that the Council should ask the Alliance to come back with a new budget based on the funding they received that day. He then made a motion to postpone Item 18 for one week, seconded by Mr. Kinnison, and passed (Cooper absent). 18. POSTPONED Resolution approving thc fiscal ycar 1999 1000 Budget for thc Greater Corpus Christi Business Alliance Convention and Visitors Burcau. *****as*r*+++ Mayor Neal opened discussion on Item 19, revising classification schedules. There were no comments from the audience. City Secretary Chapa polled the Council for their votes as follows: 19. ORDINANCE NO. 023704 Approval of Ordinance amending Ordinance 3658, as amended, Subsections 251 through 257, revising classification schedules as reflected in Exhibit A. Approval of Ordinance amending Ordinance 8127, as amended, to reflect housekeeping revisions to the Managerial Group Pay Plan for FY 1999 -2000, with no changes to the salary ranges, attached as Exhibit B. Approval of Ordinance amending Ordinance 8127, as amended, Section 520, to reflect housekeeping revisions with no changes to the salary ranges to the Executive Pay Plan FY 1999 - 2000, attached as Exhibit C. Amend Ordinance 8127, as amended, subsections 501 and 508, to consolidate salary schedules A and B into one new salary schedule for classified positions (Grades 8 through 43), effective August 2, 1999, with no changes to the salary ranges. Amend Ordinance 3658, Subsections 103 and 151.2 to clarify probationary employees' civil service status. Amend Ordinance 8127, as amended, Subsection 550, to provide for suspension of exempt employees under FLSA without loss of exemption. Amend Ordinance 8127, Section 552, to incorporate salary advancement based upon performance. Amend Ordinance 8127, as amended, Section 551.4, to provide for pay advancement upon transfer to position with same pay grade, but different job class code. Amend Ordinance 8127, Section 551.7 to correct title by adding Executive Pay Plan. Amend Ordinance 8127, as amended, Subsections 951.12(a), 951.12(b), 952.5, and 952.13, to clarify payment of vacation and sick leave upon termination by employees eligible for retirement under Texas Municipal Retirement System. Amend Ordinance 8127, as amended, Subsections 951.1(a) and (b), 951.4(a), and (b), 951.9 (a) and (b), 952.1, 952.9, and 952.11 to biweekly instead of monthly as the basis for leave accrual and administration of other leave provisions. Amend Ordinance 8127, as amended, Section 900, to add Friday after Thanksgiving as "Floating Holiday." Amend Ordinance 8127, as amended, by adding a new Minutes Regular Council Meeting July 20, 1999 Page 18 Subsection 713 to provide for certification pay for Aviation Public Safety Officers. Amend Ordinance 8127, as amended, to clarify language on Compensation upon initial employment in Section 551.1. The foregoing ordinance passed on second reading by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, J. Longoria, and Scott voting "Aye"; Cooper and B. Longoria absent. Mayor Neal opened discussion on Item 20, updated service credits. There were no comments from the audience. City Secretary Chapa polled the Council for their votes as follows: 20. ORDINANCE NO. 023705 Authorizing and allowing, under the act governing the Texas Municipal Retirement System, "Updated Service Credits" in said system for service performed by qualifying members of such system who presently are in the employment of the City of Corpus Christi; providing for increased prior and current service annuities for retirees and beneficiaries of deceased retirees of the City; and establishing an effective date for such actions. The foregoing ordinance passed on second reading by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, J. Longoria, and Scott voting "Aye"; Cooper and B. Longoria absent * * * * * * * * * * * * * Mayor Neal opened discussion on Item 21, utility rates. He called for public comment. Mr. J.E. O'Brien said he opposes this proposal, specifically the 6% increase in water rates, which he said places Corpus Christi in second place behind Houston for having the highest water rates in the state. He said the city's rates are inequitable --residents pay an increasing block rate and commercial customers pay a decreasing block rate. He said the Council should review that in the near future and he referred to a 1990 study that recommended a decreasing block rate for everyone in the city limits. Mayor Neal pointed out that that study was not adopted by the Council at that time. City Secretary Chapa polled the Council for their votes as follows: 21. ORDINANCE NO. 023706 Amending the Code of Ordinances, City of Corpus Christi, Chapter 55, Utilities, regarding water, gas, and wastewater rates; providing for an effective date. Minutes Regular Council Meeting July 20, 1999 Page 19 The foregoing ordinance passed on second reading by the following vote: Neal, Colmenero, Garrett, Gonzales, Kirmison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. * * * * * * * * * * * * * Mayor Neal referred to the first presentation on the day's agenda, the Kid's Place expansion project. Ms. Rosine Runyon of the Junior League said the project is basically complete although a few elements remain. She thanked the Council, the staff of Park and Recreation and, in particular, Mr. Mike Gordon, Assistant Director of Operations. Ms. Runyon then presented an award of appreciation to Mr. Gordon. She added that the Junior League will provide monthly clean up through their graffiti wipe-out program from September to May. Ms. Runyon and Ms. Bridgette Ferguson were also presented with gifts for their efforts on the Kid's Place project. * * * * * * * * * * * * * The second presentation regarded a status report by the Corpus Christi Housing Authority. Mr. C.F. Wimbish, Chairman of the Housing Authority Board, introduced Mr. Harold Fredrickson, another board member; Mr. Michael Boyd, Director of Operations; and Mr. Steven McNally, new Interim Executive Director. Mr. Wimbish said the staff and board are fully committed to improving the quality of life of their residents and to improving housing in the city. Mr. McNally said the Housing Authority's current problems have developed over a period of about 10 to 12 years. He said they are a direct result of a lack of accountability and responsibility and by ignoring problems of the residents, properties, and management systems. Mr. McNally discussed the recent audit performed by the U.S. Department of Housing and Urban Development (HUD), and he noted that the Housing Authority will soon fall under a new HUD accounting system, which he explained. Mr. McNally described solutions he plans to implement to address the Housing Authority's problems. The solutions include a realignment of managers and property maintenance teams to level out the ratio of number of units to number of staff. He said Corpus Christi probably has the oldest public housing stock in Texas --they started as a Housing Authority in 1938. As a result, several units require much more maintenance than newer buildings. He said they have also implemented a new work order logging system and carrying out site visits to ensure that the individuals responsible are held accountable. In addition, Mr. McNally said he has reallocated Section 8 indirect costs in order to hire three additional staff to properly operate that program. He said he has promoted an interim director of finance and they have contracted with a HUD -based accounting firm to assist them in preparing their new budget, which will be brought to the Housing Authority Board this month. Mr. McNally also Minutes Regular Council Meeting July 20, 1999 Page 20 discussed the passage of the Quality Housing Work Responsibility Act, which requires the Housing Authority to develop a five-year plan with annual updates, and he explained the Authority's modernization plan. Mr. McNally invited the Council to visit their properties at any time. Council Member Betty Jean Longoria asked about the renovations to the D.N. Leathers I property. Mr. McNally said they are over 75% completed. He also discussed the decentralization of the properties as well as maintenance issues. Council Member Kinnison said he wished to meet with Housing Authority staff regarding Treyway Terrace. Responding to Council Member John Longoria, Mr. McNally commented on the audit as well as street maintenance and other issues. Replying to other questions from Mr. Longoria, Mr. Colmenero and Dr. Gonzales, Mr. Wimbish said the board intends to fill the director's position but they first wanted to visit with the recovery team. Mr. McNally emphasized the importance of an outreach program to residents, and he discussed the application screening process as well as accountability for problems that have occurred. Mayor Neal thanked the Housing Authority Board and staff for their efforts. * * * * * * * * * * * * * Mayor Neal called for a brief recess. Upon reconvening, the Mayor recognized Boy Scouts from Troop 232, Grace Presbyterian Church, who were present at the meeting. * * * * * * * * * * * * * The third presentation was an update on the Mary Rhodes Pipeline repairs. Mr. Ed Garafia, Water Superintendent, introduced Mr. Frank Brogan, with the Port of Corpus Christi Authority. Mr. Brogan said the problems that have occurred are not unusual given the nature of the project's scope, organization, and schedule. He said they occurred as the project was being put through one of its last "shake -down" runs at its highest operating pressure. Mr. Brogan then referred to several maps and diagrams to discuss the pipeline's status. He noted that the two problem sites were the Highway 181 tunnel and the Highway 77 tunnel. He described the highway tunneling process, the pipeline assembly inside the tunnel, the appearance of the pipe joint after the grout pumping process, and the situation at the Woodsboro booster station (which involved a leak at the elbow fitting). Mr. Brogan said several efforts have been undertaken since the pipeline was started up last September, including elimination of the pump vibration problem; review of inspection records on 37 tunnels and a visual inspection of six tunnels; replacement of the collapsed pipe in the Highway 77 tunnel near Refugio; and repair of the leak at the elbow fitting near Woodsboro. Other actions to follow include testing and "debugging" the LNRA control system and testing the booster station. Minutes Regular Council Meeting July 20, 1999 Page 21 Responding to Council members' questions, Mr. Brogan described the unique nature of this project due to the need to complete it in a short period of time. He said a project of this scope normally takes five to seven years to complete; it was actually completed in two years. Mr. Brogan said there is a one-year guarantee on each of the separate contracts from the date of final acceptance. He said they have given final acceptance on the Pate&Pate contracts (including the pipeline itself) and the Michels contract; he said he thought the Lavaca-Navidad River Authority (LNRA) has given final acceptance on their pump station. They have not yet given final acceptance on the booster pump stations, which have staggered dates. Mayor Neal asked who owns the pipeline now. City Attorney Bray replied that the Nueces River Authority still owns it. He said they will convey it to the city when the entire project is substantially completed in the next few months; he said conveyance documents are being prepared. Mr. Brogan and Mr. Garcia also discussed inspection issues and maintenance of the pipeline. Mr. Colmenero asked about the issue of credit for water not accounted for. Mr. Bray replied that that mostly involves legal issues about which he will brief the Council. Responding to Mr. Scott, Mr. Brogan said he would encourage that the pipeline be used as much as possible. Dr. Gonzales asked about number of operating days of the pipeline thus far, which Mr. Brogan explained. Responding to other questions, Mr. Garana also discussed funding for operation and maintenance of the pipeline, inspections, and testing. Mr. Garcia added that since the city has not had the full use of the pipeline in the start-up year, they intend to work with LNRA to extend the period of time the city has to take the water (from 12 months to 24 months). Mr. Brogan said the city's contract with LNRA calls for the city to take 41,840 acre-feet from Lake Texana; to date the city has taken a total of 5,245 acre-feet. Mr. Garafia further discussed blending of Lake Texana water and commercial water uses. ************* The fourth presentation regarded the City Hall office space utilization study. Mr. Escobar introduced Mr. Morgan Spear of Morgan Spear Associates Inc. Mr. Spear said they conducted a needs assessment on the following city facilities: City Hall, City Hall Annex, Police Department/Municipal Court, and Fire Administration. He said after initiating the study, the scope was changed to address present needs and three years out. He said they conducted over 50 interviews with department heads and their related staffs and they discussed each of their immediate needs and future needs. Mr. Spear referred to diagrams they developed to identify each employee's location on each floor of the facilities, and they took pictures of the crowded conditions that exist. Mr. Spear then reviewed the area needs assessment data. He said City Hall has an existing use area of 103,731 square feet, while the required use area is 113,864 square feet, a difference of Minutes Regular Council Meeting July 20, 1999 Page 22 10,132 square feet, or 9.8%. The percent difference of the other facilities' existing area versus their needs are: City Hall Annex, 4.9%; Police Department, 9.1%; Municipal Court, 10.2%; and Fire Administration, 10.7%. Additional needs include an emergency operations center, which currently uses 1,058 square feet but, in accordance with the Federal Emergency Management Agency, needs 12,000 square feet, or a difference of 1,033%; and general storage, which uses 4,500 square feet but needs 10,000 square feet (122.2%). Mr. Spear said their recommendation was to remove any departments that do not relate to other departments. The only department like that is Park and Recreation located on two floors in City Hall. He said that by relocating Park and Recreation, it almost takes care of the additional required needs for City Hall (10,132 square feet). He said they also recommend that the Fire Administration offices be relocated since the building they are in now has very limited parking around it. He said that action would allow for expansion of the Police Department and Municipal Court, since they are currently located across the street. Mr. Spear said they recommend that the city consider a request for proposals to lease about 43,100 square feet. Mr. Spear added that the only area that may be difficult to find a lease for is the emergency operations center (EOC) because it needs to be in a facility which can withstand the worst hurricanes and be fully energized with power. He said the current EOC located in the City Hall basement is nowhere close to what it needs to be. Mr. Garcia said several people have approached the city asking that they be allowed to submit proposals for the leased space. He recommended that they begin that process and come back to the Council. Mr. Garcia and Mr. Spear then replied to Council members' questions, including regarding parking and consolidating storage space. Mayor Neal asked staff to bring back information on the space utilization issue. Mr. Garcia said staff will prepare an RFP with the guidelines and see what proposals come back. * * * * * * * * * * * * * Mayor Neal called for a brief recess. * * * * * * * * * * * * * The fifth presentation was about utility reengineering and privatization of city services. City Manager Garcia said what is before the Council that day is essentially a decision on which course to follow. He said he has been advocating a process of reengineering as opposed to moving rapidly into a system of putting the system out to bid. With the use of a computerized presentation, Mr. Garcia discussed the advantages and disadvantages of privatization and reengineering. He said the goal is to reduce the cost of utility services to the citizens of Corpus Christi, and both options can do that. If the city were to contract with a private firm, the firm would commit to specific costs and the city would lock in the costs with Minutes Regular Council Meeting July 20, 1999 Page 23 a long-term contract. He noted that further efficiency gains increase the firm's profits. With regard to reengineering, the city would identify maximum cost savings, staff would commit to specific savings, and further efficiency gains would increase savings for citizens and rate payers. Ms. Nancy Lerner, with EMA Services, introduced Mr. Larry Jentgen, principal of EMA in their Southwest Regional Headquarters. Ms. Lerner said EMA is a management consulting firm in the business of assisting public and private utilities throughout the country in improving their efficiency. She said they have been working with city staff in Corpus Christi on this issue. Ms. Lerner continued the computerized presentation. She noted that private utilities have made significant inroads in the United States, and they are dominated by two French multi -national firms --Vivendi (PSG/U.S. Filter) and Suez Lyonnaise (United Water) She described the contracting process, which involves several steps: the city prepares a detailed RFP; private firms propose fixed cost and service; the city signs a long-term contract (typically 20 years); the firm may provide a franchise fee or some other form of savings, which might be used to reduce rates; the city retains responsibility (and pays) for capital improvements and non-compliance; and the multi -nationals profit by cutting costs below the fixed contract amount. She then compared the characteristics of contract operation and maintenance. The contractor works on what is essentially a fixed budget; "guarantees" performance and product quality; pays all "normal" and "routine" costs; and operates with private staff. The city retains ownership; has limited control through the contract; pays for most capital expansions and upgrades; and is still ultimately accountable. Ms. Lerner explained that EMA has examined the best and worst public and private utilities in the country. She said their statistics indicate that a traditional public utility typically operates with 25% inefficiency compared to the very best public and private utilities. She said a private contract can benefit a community if the public utility clings to its old ways by operating inefficiently. However, if the publicly run utility is able to reengineer itself so that it minimizes its operations and maintenance costs, then public operations of the utility provide the greatest benefit to the community because the community does not have to cover the cost of profit for the private firm. Ms. Lerner discussed reasons why cities choose to privatize. They include a lack of access to capital, run-down facilities, compliance and quality problems, union/labor/staffing problems, and the fact that management and policy makers are unwilling to change. She also discussed in detail risks that exist with private contracts, such as placing a limit on future savings; potential for inadvertently creating a negative impact on the General Fund; loss of control and flexibility; and the diminution of citizen service levels if they are not clearly specified in the contract. Ms. Lerner said that reengineering offers greater long-term benefits with fewer risks. She noted that citizens and rate payers receive all the savings; the city retains control of the utility; future improvements mean greater savings (there is no cap on potential); and the city can extend the Minutes Regular Council Meeting July 20, 1999 Page 24 reengineering process beyond the utilities to achieve extra savings in the General Fund without creating a shortfall. Mr. Jentgen said he is a former water utility manager and now a consultant to water and wastewater utilities on a national level. He explained that the reengineering process consists of three phases. Phase 1 would involve an assessment of the city's competitiveness; working with the utilities' leadership in aligning them to the goals and objectives; and creating an action plan. Phase 2 would entail working with staff teams to build models on how they can incorporate best business practices into their jobs; preparing a long-term budget for reengineering; and beginning pilot programs which will test the concept. Phase 3 would involve considering the results of the pilot projects and implement those processes throughout the utility; and continuously improve the operation of the utility. Mr. Jentgen further discussed the elements of the three phases. Ms. Lemer discussed Corpus Christi's potential savings. She said the city's current water and wastewater fund consists of $40 million for operation and maintenance and capital purchases; $32 million for debt service and water purchases; and a $17 million service allocation. She said that after visiting with staff and touring the city's facilities, EMA has identified an opportunity for $10 million in annual savings with reengineering. That would be derived from an $8 million savings in O&M through improved efficiencies and $2 million in savings through reengineering in the Utilities Business Office, Fleet, and Sanitation. She said that would result in a 20 -year savings of about $180 million. Mr. Garcia said staff is ready to begin the reengineering process and they would like to have the opportunity to do so. The next portion of the presentation was made by representatives of United Water Services, Mr. Chris Malinowski, Director of Business Development, and Mr. Mark Halleman, Vice President of Business Development. Mr. Malinowski said their presentation regarded competitive bidding of Corpus Christi's water, wastewater, and stormwater systems (including utility billing services). He said United Water offers an opportunity for an estimated annual savings of at least $12 million; an equal or better level of service; a guarantee of no layoffs for the 20 years of the contract (it is achieved through attrition and early retirement); and guaranteed performance and cost. He stressed that this proposal is different from the gas system sale proposal a few years ago. With regard to employee issues, Mr. Malinowski reiterated his company's guarantee of no layoffs for the life of the contract, guaranteed equal or better pay and benefits, more training, and opportunities to work on other projects the company has around the country and world. He then referred to other cities which have contracted with United Water and the annual savings they have achieved, such as Milwaukee ($15 million annually), Indianapolis ($72 million in five years), Gary, Ind. ($20 million over 10 years), and Atlanta (over $20 million annually). Mr. Malinowski said benefits to the city include: predictable, long-term costs; increased opportunities for local, minority, and women -owned businesses; access to global water and wastewater experts; and an annual cash flow for a variety of projects. He then discussed benefits of Minutes Regular Council Meeting July 20, 1999 Page 25 competition versus reengineering, including immediate and large savings; guaranteed price and savings; guaranteed performance; increased control through the contract; community involvement; access to global resources; and no annual consulting fees. Mr. Halleman then discussed in detail how United Water benefited the community of Atlanta. He said if Corpus Christi opted to pursue private contracting of its utilities, he suggested that an RFP consultant be hired, that the city ensure a transparent process, and keep to a strict timeline. The next presentation was introduced by State Representative Vilma Luna, who said she was present in her capacity as an attorney and one of her clients is U.S. Filter. Mr. Ken Hebert, Regional Vice President of Municipal Project Development, said U.S. Filter is now the largest water company in the world following their acquisition by Vivendi, as well as the largest manufacturer of water equipment utilized in both water and wastewater treatment capacities. Mr. Hebert said that as mentioned by United Water, under a private contract the city retains control of the utility by establishing all rates and policies; the city maintains all operations oversight (even though U S Filter would take care of the facilities on a day-to-day basis); and the city approves all capital repairs and expenditures. He said they also provide for a third -party review by the individual or firm of the city's choice. Mr. Hebert said benefits to the city of a private contract include a fixed -cost contract; local company participation; financing assistance over the life of the contract; shared risk; regulatory assistance; and inventory control and responsibility. Benefits to employees include an offer of employment of current personnel within U.S. Filter; training and cross -training; compensation for attainment of higher state certifications; tuition aid and continuing education programs; comparable benefits; and opportunities for advancement. He added that since they have not yet evaluated Corpus Christi's system, they would not be able to provide an estimate of cost savings. Responding to Council Member Scott, Mr. Halleman said some cities, such as Atlanta, developed a payment in lieu of taxes which provides for a small transfer of funds from the water and sewer revenue fund to the General Fund for use of the building and other activities. He said he has not seen a negative impact on the General Fund as a result of privatization. City Attorney Bray said that with regard to Corpus Christi's Charter provision, such an arrangement would be regarded as a transfer from the Utility Fund to the General Fund, which is prohibited. Mr. Garcia said Corpus Christi has a greater dependency on its utilities than do other comparably sized cities. He said given the city's financial condition over the years, the city has been very innovative in the ways it has charged General Fund costs against some of the utilities, such as stormwater. He said staff feels the $17 million mentioned earlier by EMA is an accurate representation, and should that not occur, staff would probably have to reduce those services. Mr. Scott asked how long the bid process takes, and Mr. Malinowski replied that they believe it can be accomplished in 12 months; Mr. Hebert agreed. Mr. Garcia reiterated that their objective Minutes Regular Council Meeting July 20, 1999 Page 26 is to achieve the most savings for the rate payers in the community. He said the way to achieve that goal is through a competitive process which should evaluate a reengineered public utility against a privately operated utility. Mr. Scott asked if EMA guarantees savings. Ms. Lerner replied they have not done that in the past as their contracts have been fee-for-service. She said they have achieved significant savings with the cities with whom they have worked. Further comments followed. Responding to Council Member Gonzales, Mr. Garcia said that to operate competitively, the city would need to have the equivalent of 200 fewer full-time equivalent positions (FTEs) at the city's facilities. He said the city would not accomplish that through layoffs but rather through a combination of attrition, transfers, and accelerated retirement programs. Dr. Gonzales said that 200 figure is large and he would not support it. There was further discussion about employee concerns and the impact on the General Fund from privatization. Council Member Garrett asked whether under a private contract the employees would be working for the city or for the private company. Mr. Halleman said he thought the answer would be the same for both United Water and U.S. Filter --the employees would sever their relationship with the city and become employees of the private firm. Mr. Garrett said he would also not support a reduction in staff. Mr. Jentgen pointed out that if they are employed by a private firm, the employees would not have the benefit of a merit ordinance and the company can be more aggressive in termination due to drug usage and other factors. He said through reengineering there would be reductions through attrition. Responding to Council Member Colmenero, Mr. Halleman reiterated that responsibility of daily operations would be transferred to the private sector under a prescribed service agreement. He and Mr. Hebert further described employee benefits and transition costs. In reply to Council Member John Longoria, Mr. Garcia said if the Council agrees with his recommendation to begin the reengineering process, they would enter into a longer-term contract with EMA. Mr. Bray added that Corpus Christi's Charter provision regarding transfers is different from others he is aware of because of the history that brought it about. Mr. Longoria commented on the $17 million General Fund impact, and a discussion ensued, including a discussion about achievable savings. Council Member Kinnison asked about increased regulatory requirements, which Ms. Lemer discussed. Mr. Kinnison also asked about technology improvements, which Mr. Malinowski and Mr. Hebert explained. Council Member Betty Jean Longoria referred to the issue of the General Fund impact and the Charter provision. Mayor Neal asked questions about some of the information provided by Mr. Malinowski. He replied that some of the information the Mayor was seeking was confidential since their competitor was present. Mayor Neal said it appears that cities which have entered into the competitive bidding process have done so after a period of reengineering and developing the proper RFP. Mr. Halleman Minutes Regular Council Meeting July 20, 1999 Page 27 referred to several cities which went through that process but concluded after two or three years that they were not achieving the savings they had anticipated and they went to private contracts. Responding to Mayor Neal, Mr. Garcia said he recommends that the city immediately begin reengineering the water and wastewater utilities and that they initiate the process for a competitive bid one year from that day. Dr. Gonzales expressed concern about taking such an action, saying there had not been proper notification to the public on the agenda. Mr. Garcia replied that all of the decisions that allocate funds and encumber contracts will have to come back to the Council as a formal agenda item. Mr. Bray said this is on the agenda and the Council is just giving direction to staff to bring back the contract --it is just direction to proceed. City Secretary Chapa polled the Council for their votes on the motion to support Mr. Garcia's recommendation. It failed to pass by the following vote: Neal, Kinnison, J. Longoria, and Scott voting "Aye"; Colmenero, Garrett, Gonzales, and B. Longoria voting "No"; Cooper absent. Dr. Gonzales made a motion to start the process of hiring a consultant to prepare a request for proposals, which he said will take a year to do so. In the meantime, he said the EMA consultants can continue the reengineering process. Mrs. Longoria seconded the motion. Mr. Colmenero said he wanted to ensure that it includes the water, wastewater, and stormwater utilities. Mr. Chapa began to poll the Council for their votes on Dr Gonzales' motion. Before casting his vote, Mr. Garrett asked Dr. Gonzales to repeat his motion, which he did. Mr. Longoria pointed out that EMA's contract was expiring that evening. Mr. Chapa resumed polling the Council and the motion failed to pass by the following vote: Colmenero, Garrett, Gonzales, and B. Longoria voting "Aye"; Neal, Kinnison, J. Longoria, and Scott voting "No"; Cooper absent. Mr. Kinnison said he would like to have this issue brought back to the Council during their next meeting on August 24, 1999 when a full Council should be present. Mrs. Longoria said she would not be present at that meeting. Dr. Gonzales said that would allow for more information to be obtained. Mayor Neal instructed staff to place this issue on the agenda for August 31, 1999. * * * * * * * * * * * * * There was consensus of the Council to postpone until next week the presentations regarding brush and debris pick-up and visual/passage obstructions, possible Festival Area sites, and a Census 2000 update. There was no report from the City Manager or the Mayor. Council Member John Longoria requested information about lock box services. There being no further business to come before the Council, Mayor Neal declared the Council meeting adjourned at 10:15 p.m. on July 20, 1999. * * * * * * * * * * * * *