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HomeMy WebLinkAboutMinutes City Council - 04/04/2000 - SpecialI HEREBY CERTIFY that the foregoing is a true and correct copy of the minutes of the Special Council Meeting of the City of Corpus Christi of April 4, 2000, which were approved by the City Council on April 11, 2000. WITNESSETH MY HAND AND SEAL, this 1 lth day of April, 2000. Armando Chapa City Secretary SEAL PRESENT Mayor Samuel L. Neal Jr. Mayor Pro Tem Mark Scott Council Members: Javier D. Colmenero Melody Cooper* Henry Garrett Dr. Arnold Gonzales Rex A. Kinnison Betty Jean Longoria John Longoria MINUTES CITY OF CORPUS CHRISTI, TEXAS Special Council Meeting April 4, 2000 12:00 p.m. City Staff: City Manager David R. Garcia Deputy City Manager George Noe City Attorney James R. Bray Jr. City Secretary Armando Chapa Recording Secretary Rachelle P. Ramon Mayor Neal called the meeting to order in the Basement Training Room of City Hall. City Secretary Chapa called the roll and verified that the necessary quorum of the Council was present. City Manager Garcia said that Deputy City Manager Noe would be reviewing the bond issue package prior to having a discussion about the 1/8th cent sales tax for economic development, ballot issues, and the bond issue schedule. Utilizing a computer presentation, Mr. Noe discussed the need for capital improvements, pointing out that the last significant bond issue was 14 years ago. He said capital needs continue to outpace capital improvements, which are necessary to prevent further deterioration of aging infrastructure systems and to avoid escalating costs associated with deferred maintenance. Mr. Noe said the proposed $29 million general obligation bond package includes improvements to existing facilities; provides services for growth areas; addresses ADA requirements; and invests in the community's infrastructure. The sales tax issues include the following proposals: 1/8th cent to finance the repair and reconstruction of the seawall, at a cost of $43 million; 1/8th cent to build a 8,000 to 10,000 seat multi -use arena, at a cost of $25 million to $35 million; and 1/8th cent to assist in job creation by funding economic incentives for business development and expansion. Regarding the G.O. bond package itself, the projects are divided into four categories: public health and safety - $5.33 million; park and recreation - $4.42 million; public facilities - $270,000; and streets - $19.01 million, for a total of $29.038 million. He then described the specific projects included in each category. *Council Member Cooper arrived at 12:10 p.m. Minutes Special Council Meeting April 4, 2000 Page 2 When discussing the street projects, questions arose about the location of the proposed traffic signals. Mr. Garcia replied that staff can indicate the areas where new signals are warranted, but more signals are needed than are being planned for in the bond package. Continuing the presentation, Mr. Noe said the G.O. bond package would be financed by a 3.75 cent property tax increase. For the average homeowner (with a $67,278 home), the monthly impact would be $2.10 a month and the annual impact would be $25.23 a year. He noted that the tax increase would be outside the 68 cent cap and the projects would be substantially complete in three years with start up in FY 2001. Mr. Noe said state law provides that 2 cents is available from the sales tax for local use. It is currently divided as follows: the city utilizes 1 cent for General Fund purposes; the Regional Transportation Authority utilizes 1/2 cent; and the Crime Control and Prevention District utilizes 1/8th cent, which leaves 3/8th cent for local use. He added that each 1/8th cent equals approximately $3.8 million yearly based on current revenues. The current local and state sales tax rate is 7.875% and if all three sales tax propositions pass, the new rate would be 8.25%. The difference on a $100 purchase would be 37 cents. Responding to Mr. Garrett and Mr. Scott, City Attorney Bray said staff believes the seawall does qualify as a project to be funded through the 1/8th cent sales tax. He noted that they had previously provided the Council with a memo detailing that information. He said the test is that the project is found by the board of directors of the corporation to fit within various criteria contained in the statute. As a result, the board has considerable discretion to make that decision. Mr. Bray added that they will probably discuss this issue further with the Attorney General's Office. A brief discussion ensued. Mr. Garcia then referred to the issue of the 1/8th cent sales tax for economic development. He said it is a specific use of the funds authorized by the state and adopted by over 200 Texas cities, including Amarillo, Brownsville, Arlington, Kingsville, and McAllen. He said significant policy issues include how the program should be governed; what controls will be in place; and how the funds should be used. Regarding governance of the economic development tax monies, the City Manager said staff is proposing that the Council appoint a seven -member board of directors (under the 4B structure) consisting of four Council members and three citizens from Corpus Christi. The board members would serve at the pleasure of the Council for two-year terms concurrent with City Council terms, and the primary staff support would be provided by the City Manager and staff. Responding to Dr. Gonzales, Mr. Bray said a 4B corporation requires seven members and a 4A corporation requires five members. Mr. Garcia said staff was recommending that in order to maintain financial controls, the Council should be responsible for the following: approving all programs and expenditures; reviewing audits and financial statements; and controlling the bylaws and powers of the board. In addition, Minutes Special Council Meeting April 4, 2000 Page 3 administrative costs would be limited to 10% of the total that is generated on an annual basis. The City Manager said the goal of the economic development tax is to create jobs. He said the funds can be used for capital expenditures, program expenditures, and direct incentives, which he explained. He said staff is recommending that there be a primary emphasis and a secondary emphasis in the city's economic development program. Primary industries to be targeted are manufacturing, high tech, and software; secondary industries include commercial development, tourism (including hotels and attractions), and business development support (such as education and training). Mr. Garcia then discussed ways in which the funds can be used to support the creation of jobs, such as incentives to locate, relocate, or expand businesses; site development infrastructure and building cost support; development of property for a business location; development of buildings for potential prospects; and direct marketing and recruitment costs. Mr. Bray referred to options for the ballot language. He explained that the statutory Language is not specifically set up to provide for three separate ballot listings of the three 1/8th cent sales tax proposals, but staff is continuing to research that issue. He said there is different language for establishing a 4A corporation versus a 4B corporation, which he explained. He said they are working to prepare ballot language that will clearly define the three proposals for the voters. A discussion ensued about the ballot language and the term, if any, of the economic development tax. Mr. Garcia said that many other communities offer various incentives to new businesses but Corpus Christi does not, which is a reason why many companies have chosen not to locate in Corpus Christi. Mayor Neal suggested that the Council consider taking the sample ballot language that the Attorney General has already approved and delete items from there that they do not wish to include in the 1/8 cent economic development sales tax. He said that would leave the item broad enough for the projects. The Mayor also asked about combining the public facilities category in the G.O. bond package with the park and recreation category. Mr. Bray replied that staff would need to discuss that with bond counsel. Council members also commented on the importance of the economic development sales tax and the purpose and structure of the public hearings. Mr. Garcia said this is a good bond program which will continue to be refined. He said he believes there is a sense of optimism in the community which they should capitalize on, and they can answer almost all the questions people will have. Mayor Neal said the next significant action the Council needs to take is the formation of the Citizen Campaign Committee, including determining the make up of the committee, the appointment process, selecting the chair and co-chair, giving the committee its charge, and considering a sunset clause. The committee's duties will include conducting a public awareness campaign, fundraising, holding town hall meetings, and other duties as needed. Responding to a question from the Mayor, Minutes Special Council Meeting April 4, 2000 Page 4 Mr. Bray said the Council cannot spend public money to support the campaign but only to provide general informational literature. Mayor Neal said five public hearings will be held, with the first public hearing set for that evening in the Council Chambers. The Mayor then recognized those who wished to speak at this meeting. Mr. Roy Martinez asked how much money was spent on repair of the seawall in the 1986 bond election. Mr. Tom Utter, Assistant City Manager for Development Services, said the amount was $4 million, a portion of which went to repair the bulkhead on the landmasses as well as a portion for the barge dock. Mr. Martinez also asked if there was any provision which would specifically forbid any of the economic development sales tax from being spent on the dredging of Packery Channel. Mayor Neal said that language can be developed. Mr. R.F. Hasker said he worked at the Corpus Christi Army Depot for 20 years and he referred to an article in the day's newspaper which reported that CCAD is being sued for $49 million. He said CCAD is on the border of either losing or gaining jobs and that lawsuit will not help. He added that Corpus Christi rates near the top of the list of employees suing their employers. Mr. Abel Alonzo said he hopes that the committee the Council appoints is inclusive and diverse. There being no further business to come before the Council, Mayor Neal adjourned the meeting at 1:45 p.m. on April 4, 2000. * * * * * * * * * * * * *