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HomeMy WebLinkAboutMinutes City Council - 05/16/2000I 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 May 16, 2000, which were approved by the City Council on May 23, 2000. WITNESSETH MY HAND AND SEAL, this 23rd day of May, 2000. `_o% Armando C p ( City Secretary SEAL MINUTES CITY OF CORPUS CHRISTI, TEXAS Regular Council Meeting May 16, 2000 2:05 p.m. PRESENT Mayor Samuel L. Neal Jr. Mayor Pro Tem Dr. Arnold Gonzales Council Members: Javier D. Colmenero Melody Cooper Henry Garrett Rex A Kinnison Betty Jean Longoria John Longoria Mark Scott City Staff: City Manager David R. Garcia Deputy City Manager George Noe City Attorney James R. Bray Jr. City Secretary Armando Chapa Assistant City Secretary Mary Juarez 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. Don Tuttle, First Christian Church, following which the Pledge of Allegiance to the United States flag was led by Council Member Garrett. 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 May 9, 2000 and the bond program public hearing of May 10, 2000. A motion was made and passed to approve the minutes as presented. * * * * * * * * * * * * * Mayor Neal referred to Item 7, and a motion was made, seconded and passed to open the public hearing on the following zoning case: 7. Case No. 0400-01, Marshall Company: A change of zoning from an "F -R" Farm -Rural District and "R -1B" One -family Dwelling District to an "I-2" Light Industrial District on Riverside Park Annex, Block 1, Lot 1, and Fallins Riverside, south portion of Tract 8 and north portion of Tract 12, located on the northwest corner of Interstate Highway 37 and Rehfeld Road. City Secretary Chapa said the Planning Commission and staff recommended denial of the "I-2" District, and in lieu thereof, approval of an "AB" Professional Office District on the north 2.96 acres and a `B-1" Neighborhood Business District on the south 1.499 acres with a "SP" Special Permit for a contractor's warehouse and outside storage subject to a site plan and five (5) conditions. Council Member Betty Jean Longoria made a motion to postpone Item 7 until the Council meeting of May 30, 2000; the motion was seconded and it passed. Minutes - Regular Council Meeting May 16, 2000 Page 2 POSTPONED • the zoning map in reference to approximately 2.96 acres, consisting of Lot 1, Block 1, Tra.,t 8 and north pertiei. Tract 12, call 's Riverside, ( 499-an,roinEbyn.,iiaiigi. g "2 9G District with a Special Pcrmit for a contractor's warchousc and outsidc storage subj cct to a ** Mayor Neal referred to the board and committee appointments on the day's agenda, and the following appointments were made: Coastal Bend Health Facilities Development Corporation Jack Solka (Reappointed) Erika Escobedo (Reappointed) Judy Telge (Reappointed) Dr. Richard Davis (Reappointed) Annie J. Castro (Reappointed) Dr. Lawrence Wilk (Reappointed) Dan Winship (Reappointed) * * * Building Code Board of Appeals Gerardo Garcia (Reappointed) Bill Braselton (Reappointed) Convention & Visitors Bureau Bill Morgan Electrical Advisory Board Charles E. Sebbert Mayor Neal called for petitions from the audience. Mr. Mike Baker, 4641 Gayle Circle, said he hopes that planned budget cuts do not affect the operation of Heritage Park's Sidbury House, the only fully restored and period -furnished house in the park. Mr. Jack Gordy, 310 Norton, said there are still several political signs in place along state roads even though the county election is over. He also said that various issues, such as the landfill and the financial audit, will negatively affect the upcoming city bond election. Mr. J.E. O'Brien, 4130 Pompano, said it is encouraging that an audit of franchise fees is being planned. He also referred to issues cited in the outside auditor's letter about the city's finances, such as bank reconciliations and engineering services. Ms. Linda Routh, 7021 Laramie, a member of the Convention and Visitors Bureau Board, Minutes - Regular Council Meeting May 16, 2000 Page 3 complimented the Council for their efforts, particularly regarding tourism. She said the board is committed to the passage of the upcoming bond issue. Mr. Brad Lomax, 309 N. Water, also a member of the Convention and Visitors Bureau Board, said he appreciates the Council's economic development and tourism efforts. He said he supports the bond issue and the development of Packery Channel. Mr. Leon Perez, 904 Buford, discussed the issue of student drop -outs. Mr. Isaac Valencia, President of the Corpus Christi Police Officers Association, suggested that the Council consider utilizing the 20 -year option for the pension system via a city ordinance, which he explained. Mayor Neal called for consideration of the consent agenda (Items 3-6). An audience member requested that Item 3 be withheld for discussion. Assistant City Secretary Juarez polled the Council for their votes and the following were passed: 4.a. ORDINANCE NO. 024037 Ordinance appropriating $29,618.75 from the Reserve for Capital Outlay in the No. 5110 Maintenance Service Fund to purchase equipment; amending the FY 99-00 Budget, adopted by Ordinance No. 023702, to increase appropriations by $29,618.75 in the No. 5110 Maintenance Service Fund. An emergency was declared and the foregoing ordinance passed by the following vote: Neal, Colmenero, Cooper, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye." 4.b. M2000-148 Motion approving the purchase of one polyethylene pipe machine from SECOR, Houston, Texas for the total amount of $29,618.75, based on sole source. Funds are available in the Reserve Capital Outlay Budget for FY 98-99. The foregoing motion passed by the following vote: Neal, Colmenero, Cooper, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye." 5.a. M2000-149 Motion authorizing the City Manager or his designee to accept a renewal grant and execute a contract with the Coastal Bend Council of Governments -Area Agency on Aging for the Elderly Nutrition Program. Minutes - Regular Council Meeting May 16, 2000 Page 4 The foregoing motion passed by the following vote: Neal, Colmenero, Cooper, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye." 5.b. ORDINANCE NO. 024038 Ordinance appropriating a $543,640 grant from the Coastal Bend Council of Governments - Area Agency on Aging in the No. 1050 Federal/State Grants Fund for the Elderly Nutrition Program. An emergency was declared and the foregoing ordinance passed by the following vote: Neal, Colmenero, Cooper, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye." 5.c. M2000-150 Motion authorizing the City Manager or his designee to accept a renewal grant and execute a contract with the Texas Department of Human Services for the Title XX Meals on Wheels program. The foregoing motion passed by the following vote: Neal, Colmenero, Cooper, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye." 5.d. ORDINANCE NO. 024039 Ordinance appropriating a $161,163 grant from the Texas Department of Human Services in the No. 1050 Federal/State Grants Fund for the Title XX Meals on Wheels program. An emergency was declared and the foregoing ordinance passed by the following vote: Neal, Colmenero, Cooper, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye." 6. ORDINANCE NO. 024040 Amending the Code of Ordinances, Chapter 53 - Traffic, Section 53-250 - Schedule 1, One- way Streets and Alleys, Section (a-1) School Areas, by establishing a one-way traffic pattem on: Ft. Worth Street, in the direction of Peerman Place to Driftwood Place, during the school hours of Wilson Elementary School; Bernandino Street, in the direction of Delgado Street to Gollihar Road, during the school hours of Prescott Elementary School; Kasper Drive, in the direction of Lincoln Street to McArdle Road, during the school hours of Central Park Elementary School; and providing for penalties. The foregoing ordinance passed on second reading by the following vote: Neal, Colmenero, Cooper, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye." Minutes - Regular Council Meeting May 16, 2000 Page 5 * * * * * * * * * * * * * Mayor Neal opened discussion on Item 3, supply agreements for tires. Mr. Leon Perez asked about Hispanic -owned tire businesses. City Manager Garcia said staff can provide information about the companies which received bid invitations (there were 12 total, although only three responded). He noted that the city is precluded from awarding contracts on the basis of ethnicity. Assistant City Secretary Juarez polled the Council for their votes as follows: 3. M2000-147 Motion approving supply agreements for vehicle and equipment tires and tubes in accordance with Bid Invitation No. BI -0070-00, with the following companies for the following amounts. Awards are based on low bid or only bid, for multiple progressive awards, for a total estimated annual expenditure of $576,293.73. Funds have been budgeted by Maintenance Services and Fire Department for FY99-00. A to Z Tire and Battery Creager Tire and Battery Treadco Corpus Christi Texas Corpus Christi. Texas Corpus Christi, Texas Items: Sec I) 1.1-1.5, AI -A3 Items: Sec 1)1.6, 1.10, 1.12; Items: Sec 4) 4.9 1.7-1.9, 1.11, A4; Sec 2) 2.1-2.3 Sec 4) 4.1-4.2, 4.4; Sec.9) Sec 3) 3.1; Sec 4) 4.3, 4.6, 4.8 9.1; Sec 11) 11.1-11.2 4.10-4.17, A5 -A6, A-8; Sec 5) 5.1, 5.2; Sec 6) 6.1-6.3; Sec 7) 7.1-7.2; Sec 8) 8.1-8.6; Sec 9) 9.2-9.3; Sec 10) 10.1-10.4, A7 $414,795.92 $34,997.81 $126,500 Grand Total: $576,293.73 The foregoing motion passed by the following vote: Neal, Colmenero, Cooper, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye." * * * * * * * * * * * * * Mayor Neal referred to Item 8, and a motion was made, seconded and passed to open the public hearing on a request received from Mr. Kenneth L. Berry and Mrs. Brenda L. Berry to disannex a small island off Ingleside Point and to place the land within a tourist industrial district. Mr. Tom Utter, Assistant City Manager for Development Services, referred to a map indicating the location of Berry's Island. He noted that a portion of the island was connected to the mainland but it was separated when the La Quinta ship channel was dug. The original portion of the island remains in San Patricio County but there has been accretion on two sides of the island, which is located in Nueces County. In addition, although the island is entirely within the city limits of Corpus Christi (since the city limits run along the shoreline), it receives no services from the city. Mr. Utter said a tourist industrial district is different from the other industrial district Minutes - Regular Council Meeting May 16, 2000 Page 6 agreements the city has with several businesses. He said the proposed agreement with the Berrys maintains that the only activities on the island will be tourist -related up to bed and breakfast usage. He said an existing gas -gathering facility on the island will be allowed to stay. In addition, a Corps of Engineers permit has been issued for the island for bulkheading and dockage facilities. Mr. Utter said any violation of the permitted use would subject the property to immediate annexation by the city. He added that the Berrys have agreed to pay to the city an amount equal to 100% of the taxes they would have paid for the island. Responding to Council Member Gonzales, City Attorney Bray briefly described the statute which established tourist industrial districts. Mr. Utter said the proposed agreement with the Berrys would not allow for the development of an amusement park or hotel but it would allow for residential units. In reply to another question from Dr. Gonzales, City Manager Garcia stated that staff has looked at this issue for some time and initially decided not to bring it forward because there were concerns about enforcement of an industrial district provision and the impact of any development of the island on Ingleside on the Bay. He said the Council subsequently requested that the issue be brought before them. Dr. Gonzales said the Council had directed staff to look into the issue and he expressed concern about the process that was followed and about the proposal itself'. Mr. Utter went on to say that there are a number of city services that Mr. Berry has requested: water, wastewater, police, fire, and garbage. He said the city does not currently provide those services to that island or other islands in the area and it does not intend to do so. Mr. Garcia added that providing those services (as well as electrical service from CPL) would be very expensive. Responding to questions from Council Member Kinnison, Mr. Bray discussed enforceability provisions and Mr. Utter said other areas of the city have been de -annexed before. In reply to Council Member Colmenero, Mr. Utter stated that the island consists of 231.793 acres, some of which is due to accretion. Council Members Garrett and Scott asked about provisions of the proposal. Mr. Utter reiterated that the city would receive 100% payment in lieu of taxes and he noted that the property is currently zoned "R -1B" single-family residential, which is not the proper zoning for an amusement park. He and Mr. Garcia also responded to several questions from Mr. Scott. Council Member Betty Jean Longoria questioned the definition of a bed and breakfast, and Mr. Utter said that usage was not defined in the proposed agreement. Mrs. Longoria also asked what qualifies this item to be passed as an emergency. Mr. Bray replied that one of the reasons is for the efficient and effective administration of city business, which happens frequently with city zoning ordinances and other ordinances. Mr. Utter said there is no problem with the Council considering this item on two readings. Replying to Mr. Kinnison, Mr. Utter said that currently Mr. Berry can only have single-family residential structures on the island (unless the Council grants a rezoning). If he went forward with development, the city would have to enforce platting requirements, which would indicate how Mr. Berry plans to provide water, sewer and access. In addition, he would have to meet all of the city's Minutes - Regular Council Meeting May 16, 2000 Page 7 building codes, which he would not have to comply with under the tourist industrial district. Council Member Cooper asked if Mr. Berry had indicated to staff what he plans to do with that property. Mr. Utter replied that Mr. Berry said he wanted the island to be de -annexed because he did not feel he would be able to avail himself of city services, although he would be willing to make payments to the city in lieu of taxes Dr Gonzales commented on the issue of extra -territorial jurisdiction. Mayor Neal called for comments from the audience. Mr. John Bell, an attorney representing Mr. and Mrs. Berry, said that island is not like any other piece of property in the city limits. He said they are not talking about extending water or wastewater services. However, Mr. Berry has had a number of thefts over the last year and he has been told by the 911 dispatcher that a police unit will not be dispatched to that property. Mr. Bell said this proposal will eliminate confusion regarding the appraisal figures between Nueces County and San Patricio County since Mr. Berry will be required to render a statement of the valuation of the entire property to Corpus Christi's collection section each year. Mr. Bell said the proposed agreement restricts the use of the property, thereby not allowing any industry, hotels, or amusement parks to be developed on the island. The only tourist activity allowed would be a bed and breakfast and that size can be restricted if necessary. Mr. Bell also discussed enforcement provisions in the proposal. He said Mr. Berry will use the island for recreational purposes, and he commented that Mr. Berry has been targeted in the community. He added that they are not opposed to having the issue considered on two readings and their objective is to address every reasonable concern about the property. Mr. Bell then responded to Council members' questions and comments. Mr. J.E. O'Brien said he was not speaking in favor or against the proposal. He said he objects to the item being passed on an emergency reading. He questioned when the city annexed the property, and he said that on May 5, 2000 the residential structure was placed on the tax rolls for the first time. He said there are several questions that have yet to be answered. Mr. Utter said that according to the Nueces County Appraisal District, the 1999 taxes to Corpus Christi for the property were $704.18. Mr. R.F. Hasker said the city should not be responsible for picking up garbage on Mr. Berry's island. He said he fishes in that area and he questioned the map shown by staff. Ms. Carol Rinuet, 145 Live Oak, said residents of both Ingleside on the Bay and Corpus Christi still have concems about the property. She said she thought Mr. Berry acquired the island in 1997, at which time he knew that parts of the island if not all of it were in the city limits and could not be provided with services. She asked the City Manager if Mr. Berry had mentioned a proposed residence or tourism in his earlier discussions with city staff. Mr. Garcia replied that he is aware of previous proposals Mr. Berry has made for other types of development of his island, although he has discussed the residence there. Ms. Rinuet asked if staff has requested a ruling from the Texas Attorney General regarding the legality of the proposed agreement. Minutes - Regular Council Meeting May 16, 2000 Page 8 Mr. William Walton, 333 Dolphin, said the area around the island is environmentally sensitive and is integral to the atmosphere and lifestyle of the residents of Ingleside on the Bay. He said it is not unreasonable for people to be skeptical about Mr. Berry's development plans for the island, considering his original application with the Corps of Engineers. He said Corpus Christi should be more sensitive to its neighbors. Ms. Cynthia Pearl, 312 Bayshore Dr., questioned why a tourist industrial district designation would be needed if Mr. Berry merely wished to have a bed and breakfast, although Mr. Berry has not said that that is his intention. She questioned what the consequences would be if Mr. Berry breached the agreement. Mr. Bray replied that if that occurred, the city could get an injunction against Mr. Berry to stop him from violating the agreement; he would also have to pay attorney's fees if he lost the breach of contract suit. She said the residents of Ingleside on the Bay are not targeting Mr. Berry but are concerned about possible types of development on the island. Mr. Jimmie Till said he agreed with Dr. Gonzales' previous comments. He said he has property that has been annexed by the city for several years and they do not receive all the city services, nor has he come to the Council asking that his property be de -annexed. Dr. Gonzales made a motion to close the public hearing, seconded by Mr. Kinnison, and passed. Responding to a question from Mayor Neal, City Secretary Chapa said the Mayor, the City Manager or the Council promulgate agenda items and they could indicate that they wished to have a particular item considered on two readings. Mayor Neal said he wished to have Item 8 considered on two readings if it passes on first reading. Mr. Chapa polled the Council for their votes as follows: 8. FIRST READING ORDINANCE Ordinance disannexing from the City, the Island (owned by Kenneth L. Berry and wife, Brenda L. Berry ["Owner"]) located off Ingleside Point and comprising a part of John G. Hatch Survey in San Patricio County and adjusting the City Boundaries, conditioned upon formation of a Tourist Industrial District and inclusion of said Island in said district and execution of Tourist Industrial District Agreement; creating a Tourist Industrial District covering said Island; authorizing the City Manager or his designee to execute a Tourist Industrial District Agreement, effective as of May 16, 2000, with "Owner" Pursuant to §42.044 Texas Local Government Code and to file the Agreement in the official records of Nueces County, Texas. The foregoing ordinance passed on first reading by the following vote: Neal, Cooper, Kinnison, J. Longoria, and Scott voting "Aye"; Colmenero, Garrett, Gonzales, and B. Longoria voting "No." Mayor Neal called for a brief recess. * * * * * * * * * * * * * Minutes - Regular Council Meeting May 16, 2000 Page 9 Mayor Neal referred to the presentations on the day's agenda. City Manager Garcia said the first presentation dealt with the city's emergency preparedness plan. Mr. Juan Ortiz, Assistant Emergency Management Coordinator, noted that hurricane season begins June 1st and ends November 30th. Mr. Ortiz then gave a computer presentation about steps that are being taken to educate the public about hurricane preparedness. He said the city is establishing partnerships with local television stations as well as the National Weather Service, American Red Cross, and the Salvation Army. Other partnering entities are the Chamber of Commerce, Southwestern Bell, Central Power and Light, and AT&T Cable. Mr. Ortiz said the "Hurricane Polly" exercise was conducted in April 2000 and they have developed a new evacuation route map. Several other avenues of communication are also being utilized, such as a Web site, telephone directory, libraries, city facilities, city newsletter in utility bills, and a local cable show. The next portion of the presentation was introduced by Mr. Tom Millwee, State Emergency Management Coordinator from the Governor's Division of Emergency Management. He said two members of his staff were present, Mr. Bob Gibson and Mr. Mike Peacock, as well as two members from Texas A&M University. Mr. Peacock discussed several issues, including risk area definitions; a behavioral study that was conducted; clearance times; evacuation route capacities; uncertainty factors; forecast error factors; probability statements; estimated safe time remaining for evacuation decisions; and IH -37 lane reversal impact. Mr. Peacock then responded to Council members' questions regarding his presentation. Mr. Gary Ford presented the results and recommendations of the IH -37 reverse flow traffic operations study, prepared by the Texas Department of Transportation and the Texas Transportation Institute. He said the study's main objective was to determine the location to terminate the IH -37 reverse flow lanes. Issues that needed to be considered were bottlenecks and queuing, the volume of traffic processed, driver expectancy, and management. Following his computer presentation, Mr. Ford said the study recommended terminating the reverse flow lanes at State Highway 97 and FM 3006 because that alternative offered the best overall operations, was one of the easiest alternatives to implement, and it had several options for upstream diversion and contingency plans. Mr. Ford and Capt. John Galvan, as well as other representatives, also responded to several questions from the Council and they discussed the concept of a 24-hour evacuation notice. The last portion of the presentation was regarding the refuge of last resort program. Ms. Barb Sudhoff, Director of Municipal Courts, said that following Hurricane Bret last year, many citizens expressed concern about the lack of shelters in Corpus Christi. As a result, the Council directed city staff to develop a plan for providing shelters in the event of a hurricane. She said evacuation is still the primary emphasis but the "refuges of last resort" have also been developed. Ms. Sudhoff said the program has two tasks: to staff and manage shelters for city essential employees and their families; and to staff and manage shelters for the public. She said the city has partnered with the following entities: CCISD, Del Mar College, Regional Transportation Authority, American Red Cross, and the Salvation Army. She described various elements associated with those Minutes - Regular Council Meeting May 16, 2000 Page 10 partnerships, including identifying shelter sites; providing food services; staffing; training; and assisting with evacuation. She said 400 city employees have been designated as essential employees, who will be responsible for staffing the refuges of last resort. She said they are using the American Red Cross model for the shelters, which includes registration, security, recreation, logistics, and communications. Ms. Sudhoff then described the sequence of events, which includes activation of the Emergency Operations Center, evacuation, mobilizing the shelter teams, and opening the shelters; CCISD's work would involve closing the schools, securing the sites, directing essential staff to the schools, and coordinating with the city to open the shelters. Other considerations are liability issues, public disclaimers, reimbursement for costs, public safety issues, a special needs shelter, and public information. Pending issues include identifying a funding source, finalizing start-up costs, determining when to release site information, preparing memos of understanding, assessing the sites, and training. Mr. Garcia and Ms. Sudhoff discussed aspects of the shelter program with the Council. He said that if the shelter program is activated, it will cost approximately $1 million, of which about 75% would be reimbursed by FEMA. However, $200,000 to $300,000 will have to be budgeted this year for start-up costs for the program, including for equipment, commodities, and training. * * * * * * * * * * * * * The second presentation was a long-range planning summary report by the Airport Board. Ms. Bonnie Allin, Aviation Director, introduced Mr. Chuck Cazalas, who described the results of a series of work sessions which they held. He said the board's efforts resulted in bringing the airport's mission statement and vision statement more closely in line. He said the board identified critical issues and set goals and strategies to be achieved in the next five years. Mr. Cazalas said the vision statement includes the following elements: a strong, proactive marketing program maintaining positive public awareness for the airport; a comfortable, efficient, convenient and aesthetically pleasing terminal; non-stop commercial jet service to domestic and international locations; increasing numbers of passengers; on-site development, as well as development of land areas adjacent to the airport; cargo facilities; strong demand for general aviation and military -related facilities and services; and partnerships with other community entities. He said the Airport Board's plans will require a community -wide effort. Mr Cazalas said that about $25 million in infrastructure improvements have been made over the last several years, and $50 million is designated for construction of the traffic control tower, terminal and landscaping. He noted that all of that work is being done with airport -generated revenue and no local tax dollars. Responding to the Council, Ms Allin said temporary signage will be erected when the airport moves into the temporary terminal facilities in July and August; there will also be brochures and other forms of public information. Mr. Cazalas said the board also discussed the need to improve Minutes - Regular Council Meeting May 16, 2000 Page 11 the area outside the airport toward the city. Ms. Allin added that one of the long-term goals in the master plan, once the terminal facilities are completed, is to extend the primary runway 2,500 feet. She said the new terminal will include an area in the baggage claim area for the Convention and Visitors Bureau. She also discussed the issue of improved airline service to the city. ************ The third presentation was an update on the Solid Waste Services automated collection pilot program. Mr. Ron Massey, Assistant City Manager for Public Works and Utilities, introduced Mr. Lawrence Mikolajczyk, Acting Solid Waste Director, who gave a computer presentation on the program. He said the goals were to promote a clean city philosophy and to increase the efficiency of the curbside refuse collection service. Mr. Mikolajczyk said they evaluated the following elements of the pilot program: implementation costs and timeline (including a three-year phase-in period); staffing requirements; assembly, delivery and capacity of containers; capacity and reliability of trucks; and identifying areas where automation may be effectively implemented. He said the program, which began on March 6th and ends May 31st, was initially funded with $80,000 and to date $32,000 has been spent. The pilot areas were located in Calallen, midtown, King's Crossing, and Padre Island. Mr. Mikolajczyk discussed communication techniques to inform citizens in the pilot areas, as well as the results of a customer satisfaction survey. Mr. Mikolajczyk said the Council may elect to discontinue the containerized system in the pilot areas, at which time the city would be required to pick up, wash, disassemble and ship the containers (including paying the freight), which could be done within the pilot program's budget. He said the department recommends continuing the program in the pilot areas, which would result in the need to purchase an additional backup "tipper" to put on another truck so as not to fall behind in the pickup process. The interim process would require the continued use of two crews; in addition, the frequency of garbage collection would remain the same. Mr. Garcia said staff would like to begin to establish the capacity to conduct the automated program on a continuing basis and then come back to the Council with a plan on how to expand it. He said as they evaluate the program they will be able to determine the unit costs. Mr. Massey and Mr. Mikolajczyk responded to Council members' questions. Mr. Garcia pointed out that the automated program provides a higher quality of service and it can change the quality of life in the city's neighborhoods. He said it also increases the flexibility of the city's Solid Waste Services programs. He reiterated that staff needs to evaluate the cost figures first and develop a plan. Mayor Neal called for a brief recess. ************* The fourth presentation was regarding the outside auditor's and financial advisors' opinions on recommended FY 99-00 budget revisions. Deputy City Manager Noe gave a computer Minutes - Regular Council Meeting May 16, 2000 Page 12 presentation on the recommended revisions. He explained that in January 2000 a five-year financial forecast was prepared and presented, and the following month a selective hiring freeze to build the fund balance was implemented. In March and April staff went through the process of reevaluating the current fiscal year and immediately implemented a severe hiring freeze and identified strategies for addressing the projected shortfall. Then on May 2nd during the Council's retreat, the Council spent a half-day reviewing in detail the last two fiscal years' financial performance. Mr. Noe said that for the current fiscal year, revenues are estimated to be $761,053 lower than budgeted and expenditures are estimated to be $1,197,175 higher than budgeted, for a total shortfall of $1,958,228. He noted that staff is estimating the fund balance for the current fiscal year to be $1,070,998. Mr. Noe said variances occurred in the major revenue areas: ad valorem taxes, sales taxes, electrical franchise fees, landfill disposal fees, and Municipal Court fines. Revenues were received from the administrative cost recovery fee and the FEMA reimbursement. With regard to expenditures, Mr. Noe said the principle factor for the over expenditure was the retirement "drag -up" cost which was not budgeted and not included in staff's estimates: firefighters - $2,208,949; police - $546,818; and other - $321,400, for a total of $3,077,167. He said cost-saving actions that have been implemented have resulted in about $1.8 million in cost reductions. Mr. Noe said that certain mid -year actions will need to be taken to address the current fiscal year shortfall and the low projected fund balance, and permanent adjustments to the revenues and expenditures will be required for the next fiscal year. Mr. Noe discussed the following mid -year alternatives: do nothing; implement staff revenue and expenditure recommendations; consider issuing certificates of obligation to finance the drag -up costs; or identify new revenue items or expenditure reductions for implementation. Regarding the second option, he said staff was recommending two revenue adjustments: implementation of a revised street recovery fee (assessed to utilities) - $667,400; and an increase in the fire hydrant maintenance rate - $53,430, for a total of $720,830. On the expenditure side, staff was recommending the following adjustments: General Fund contribution for economic development should be shared equally with the utilities - $281,250; utilize existing funds available in the Self -Insurance Fund for repayment of loan obligations, and reduce the budgeted General Fund transfers - $475,330; and eliminate the summer middle school recreational program - $27,856, for a total expenditure impact of $784,436. The resulting total fund balance impact from those revenue and expenditure adjustments would be $1,505,266. Mr. John Shepherd, of Collier, Johnson & Woods (outside auditors), said if the total General Fund balance is about $1 million, the financial statements will show an unreserved fund balance of a deficit of about $950,000 because there are reservations for certain things such as encumbrances. Mr. Shepherd also referred to administrative cost recovery fees, included in the final "Full Cost Recovery Plan" prepared by KPMG, which resulted in an adjustment of $1,055,625. Mr. Shepherd said he compared the two previous fiscal years and he concluded that some of the allocation methods were changed. He said he has questions about those changes and KPMG has been Minutes - Regular Council Meeting May 16, 2000 Page 13 asked to explain why they feel the changes are reasonable. Mr. Noe said staff is expecting to receive KPMG's response this week. Council Member Kinnison referred to a letter dated August 30, 1999 from KPMG regarding the "Full Cost Recovery Plan." He questioned why staff did not inform the Council at that time about the $1.055 million adjustment. Mr. Noe replied that when staff briefed the Council in January 2000, they specifically mentioned the change in the allocation and included it in the five-year projection. Mr. Shepherd said he did not have any accounting problems with staffs other recommendations, such as the revised street recovery fee, but he feels that those issues relate to the City Charter and therefore are legal issues. He said he is aware that the City Attorney issued a written opinion about the street recovery fee, and he feels the Council should have a high comfort level with that legal position. A brief discussion ensued about that issue. Mr. Shepherd also discussed the issue of possibly reducing the debt service coverage from 63% to 50%. He said that is a cash flow issue, explaining that the Debt Service Fund needs to maintain a certain level so that when the debt payments come due, there is enough money to pay them. He said he thought the 50% level may be very close to the minimum amount. He noted that as of July 31, 1999 the Debt Service Fund had a balance of about $12 million, $3 million of which has been designated for the new landfill and the closure of the old landfill. He said if the reserve is dropped down, the city effectively would be eliminating that designated amount. Mr. Noe said staff was not asking the Council to consider the issue of the debt service coverage at that time, although staff is preparing next year's budget with the assumption of a 50% debt coverage. Mr. Shepherd also briefly discussed the Self -Insurance Fund. Mr. Jim Seal, of M E Allison (bond counsel), said they agree with the staff that amendments need to be made to this year's budget. He said bond ratings are not just based on financial information --they are also based on economic information, overlapping debt, assessed valuation growth and other factors. He said even if the General Fund ends up with a positive balance this year, it will still fall short of the financial plan the city previously adopted. He said that will be considered as a negative factor by the bond rating agencies. Mr. Seal said whether the city will be put on a credit watch or have its rating downgraded is unknown at this time without further discussion with the rating agencies. He said bond counsel also has concerns about lowering the General Obligation Debt Service Fund to a level that may be too low. He said rather than focusing on the percentage of debt coverage, they should be looking at the amount of the reserve that needs to be maintained. Mr. Mark Seal, also of M.E. Allison, further discussed the financial plan that had been developed a few years ago based on input from the rating agencies. He said that no matter what happens this year, there is going to be some kind of negative impact on the city's credit rating. Mr. Seal said they have spoken with the rating agencies about this in general, but they cannot specify exactly what will occur until they meet with city staff. He added that he believes they will have to take another plan to the agencies to show how the city intends to get back on track financially. Mayor Neal then referred to Item 9 on the agenda concerning the budget adjustments. He Minutes - Regular Council Meeting May 16, 2000 Page 14 called for comments from the audience and there were none. Responding to Council Member Scott, Mr. Tony Cisneros, Director of Park and Recreation, explained that staff was recommending eliminating three middle schools as sites for summer recreation programs; however, the programs themselves are still being provided at the city's recreation centers. Mr. Shepherd responded to a question Mayor Neal had regarding the adjustments contained in the "Full Cost Recovery Plan." Mr. Kinnison said that since there could be a substantial change to those adjustments (the $1.055 million figure), he suggested that the Council table Item 9 until KPMG responds to Mr. Shepherd's questions. Mr. Garcia said the city paid a substantial amount of money to have a professional analysis done specifically to correct many of the problems the city had been having in how the funds are charged. He said the bottom line is that one group of accountants is disagreeing with another group of accountants on this issue and staff feels comfortable with KPMG's report. Mr. Kinnison then made a motion to table Item 9 until a response is received from KPMG; seconded by Dr. Gonzales Mr. Garcia pointed out that the City Charter requires that the City Manager make the first budget presentation to the Council at least 60 days prior to the beginning of the fiscal year. He said the direction the Council was giving staff that day was that the current budget was unchanged and they will have an approximate $1 million ending balance, from which staff should begin to budget accordingly. Mr. Kinnison said that last year staff brought the Council a budget that ended up being $5 million to $6 million off. A discussion ensued about whether or not Item 9 should be postponed. City Secretary Chapa polled the Council for their votes on the motion to postpone, and it passed by the following vote: Neal, Colmenero, Gonzales, Kinnison, B. Longoria, and J. Longoria voting "Aye"; Garrett and Scott voting "No"; Cooper absent. 9. POSTPONED Ordi.rai cc aa..cnding Ordinanee-Ne. -023-792–which adoptcd thc FY99 00 Budget, by incrcaaing appropriations in certain funds, adjusting thc amounts of certain intcrfurtd * * * * * * * * * * * * * Mayor Neal opened discussion on Item 10, right-of-way mowing. There were no comments from the audience. City Secretary Chapa polled the Council for their votes as follows: 10. M2000-151 Motion approving a supply agreement with Winter Maintenance & Landscaping Inc., Corpus Christi, Texas for improved right-of-way mowing in accordance with Bid Invitation No. BI- Minutes - Regular Council Meeting May 16, 2000 Page 15 0087-00, based on low bid and only bid, for an estimated annual expenditure of $154,845. The term of the contract will be for twelve months with an option to extend for up to two additional twelve-month periods subject to the approval of the supplier and the City Manager or his designee. Funds have been budgeted by the Stormwater Department in FY 99-00 and requested for FY 00-01. The foregoing motion passed by the following vote: Neal, Colmenero, Garrett, Gonzales, Kinnison, B. Longoria, J. Longoria, and Scott voting "Aye"; Cooper absent. * * * * * * * * * * * * * Mayor Neal announced that the executive session (Item 11) regarding William Goodson v. City of Corpus Christi et al, No. C-97-269, United States District Court, Southern District of Texas, Corpus Christi Division, was withdrawn. The Mayor then called for the City Manager's report. Mr. Garcia said the next bond program public hearing would be held at Flour Bluff High School on May 17th at 6 p.m. He said issues scheduled for the May 23rd Council meeting included the Council's financial policies as well as a contract with Mr. Robert Perless regarding the "Orion's Belt" art project. Mayor Neal called for Council concerns and reports. Mr. Colmenero asked staff to provide a report that the Cole Park rodent problem has been dealt with. He also asked that the Coastal Bend Pest Control Association be recognized for their assistance. The Mayor said his office would draft a letter to the association to be signed by the Mayor and all members of the City Council. Mr. Longoria requested reports on police manpower allocation and marina development plans. There being no further business to come before the Council, Mayor Neal adjourned the Council meeting at 8:47 p.m. on May 16, 2000. * * * * * * * * * * * * *