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024814 ORD - 03/26/2002
ORDINANCE AUTHORIZING iSSUANCE OF ANTICIPATION NOTES THE STATE OF TEXAS COUNTIES OF NUECES AND SAN PATRICIO CITY OF CORPUS CHRISTI WHEREAS, the Issuer (such term and other capitalized terms used in these recitals and this Ordinance being as defined in Exhibit A attached hereto), is a home-rule municipality having a total population of at least 50,000 according to the last preceding federal cerisus, and was organized, created and established pursuant to the Constitution and laws of the State of Texas; and WHEREAS, the City Council is authorized pursuant to Chapter 1431 to issue anticipation notes for specified purposes, including, without limitation, to pay a contractual obligation incurred or to be incurred for the construction of a public work and the purchase of materials, supplies, equipment, machinery, buildings, lands, and rights-of-way for an issuer's authorized needs and purposes; and WHEREAS, the City Council deems it in the best interest of the Issuer to issue the Notes, pursuant to Chapter 1431, for the purposes hereinafter stated, and to secure the payment of the Notes from a pledge of the ad valorem taxes assessed and collected by the City. NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF CORPUS CHRISTI, TEXAS: Section 1. RECITALS, AMOUNT AND PURPOSE OF NOTES. That the recitals set forth in the preamble hereof are incorporated herein and shall have the same force and effect as if set forth in this Section. Pursuant to authority granted to the City Council by Section 1431.003 of Chapter 1431, the Notes shall be and are hereby authorized to be issued for the purpose of PAYING CONTRACTUAL OBLIGATIONS INCURRED OR TO BE INCURRED FOR THE CONSTRUCTION OF A PUBLIC WORK AND THE PURCHASE OF MATERIALS, SUPPLIES, EQUIPMENT AND MACHINERY IN CONNECTION THEREWITH. The Issuer desires to use the proceeds of the Notes to pay contractual obligations incurred or to be incurred by the Issuer in connection with the construction of improvements to Corpus Christi Beach and the purchase of materials and supplies (the "Property") in connection with the construction of the improvements to Corpus Christi Beach. Section 2. DESIGNATION, DATE, DENOMINATIONS, NUMBERS, AND MATURI- TIES OF NOTES. That the Notes shall be dated April 1, 2002, shall be in Authorized Denominations, shall be numbered consecutively from R-1 upward, and shall mature on March 1 in each of the years, and in the amounts, respectively, as set forth in the following schedule: 0£d 14 YEARS MATURITY DATE:MARCH1 AMOUNTS ($) 2005 300,000 2006 325,000 2007 325,000 2008 350,000 Section 3. NOTE PURCHASE AGREEMENT. That the Purchase Agreement in substantially the form attached to this Ordinance is hereby accepted, approved and authorized to be delivered in executed form to the Purchaser. An Authorized Representative, acting for and on behalf of the City Council, shall cause the Purchase Agreement to be executed and delivered to the Purchaser. The City Secretary is hereby authorized to attest the execution of the Purchase Agreement on behalf of the City. Section 4. INTEREST. That the Notes shall bear interest from the date specified in the FORM OF NOTE set forth in this Ordinance to their respective dates of maturity or redemption prior to maturity at rate of 4.65% per annum. Said interest shall be payable in the manner provided and on the dates stated in the FORM OF NOTE set forth in this Ordinance. Section 5. CHARACTERISTICS OF THE NOTES. (a) Registration, Transfer, Conversion and Exchange; Authentication. That the Issuer shall keep or cause to be kept at the designated corporate trust office of the Paying Agent/Registrar the Registration Books, and the Issuer hereby appoints the Paying Agent/Registrar as its registrar and transfer agent to keep such books or records and make such registrations of transfers and exchanges under such reasonable regulations as the Issuer and the Paying Agent/Registrar may prescribe; and the Paying Agent/Registrar shall make such registrations, transfers and exchanges as herein provided within three days of presentation in due and proper form. The Paying Agent/Registrar shall obtain and record in the Registration Books the address of the registered owner of each Note. The Issuer shall have the right to inspect the Registration Books during regular business hours of the Paying Agent/Registrar, but otherwise the Paying Agent/Registrar shall keep the Registration Books confidential and, unless otherwise required by law, shall not permit their inspection by any other entity. The Issuer shall pay the Paying Agent/Registrar's standard or customary fees and charges for making such registration, transfer, exchange and delivery of a substitute Note or Notes. Registration of assignments, transfers and exchanges of Notes shall be made in the manner provided and with the effect stated in the FORM OF NOTE. Each substitute Note shall bear a letter and/or number to distinguish it from each other Note. -2- An authorized representative of the Paying Agent/Registrar shall, before the delivery of any such Note (other than Notes that bear the signature of the Comptroller of Public Accounts of the State of Texas, as provided in the FORM OF NOTE), date and manually sign said Note, and no such Note shall be deemed to be issued or outstanding unless such Note is so executed. The Paying Agent/Registrar promptly shall cancel all paid Notes surrendered for transfer and exchange. No additional ordinances, orders, or resolutions need be passed or adopted by the Issuer or any other body or person so as to accomplish the foregoing transfer and exchange of any Note or portion thereof, and the Paying Agent/Registrar shall provide for the printing, execution, and delivery of the substitute Notes in the manner prescribed herein. Pursuant to Chapter 1201, and particularly Subchapter D thereof, the duty of transfer and exchange of Notes as aforesaid is hereby imposed upon the Paying Agent/Registrar, and, upon the execution of said Notes, the transferred and exchanged Notes shall be valid and enforceable in the same manner and with the same effect as the Notes which initially were issued and delivered pursuant to this Ordinance and approved by the Attorney General. (b) Payment of Notes and Interest. The Issuer hereby further appoints the Paying Agent/Registrar to act as the paying agent for the payment of the principal of and interest on the Notes, all as provided in this Ordinance. The Paying Agent/Registrar shall keep proper records of all payments made by the Issuer and the Paying Agent/Registrar with respect to the Notes, and of all transfers and exchanges of Notes, and all replacements of Notes, as provided in this Ordinance. (c) In General. The Notes (i) shall be issued in fully registered form, without interest coupons, with the principal of and interest on such Notes to be payable only to the registered owners thereof, (ii) may be transferred, assigned, converted, and exchanged for other Notes, (iii) may be subject to redemption prior to their scheduled maturities, (iv) shall have the characteristics, (v) shall be signed, sealed, executed and authenticated, (vi) the principal of and interest on the Notes shall be payable, and (vii) shall be administered and the Paying Agent/Registrar and the Issuer shall have certain duties and responsibilities with respect to the Notes, all as provided, and in the manner and to the effect as required or indicated, in the FORM OF NOTE. On each substitute Note issued in conversion of and exchange for any Note or Notes issued under this Ordinance the Paying Agent/Registrar shall execute the PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE, in the form set forth in the FORM OF NOTE. (d) Substitute Paying Agent/Registrar. The Issuer covenants with the registered owners of the Notes that at all times while the Notes are outstanding the Issuer will provide a competent and legally qualified bank, trust company, financial institution, or other agency to act as and perform the services of Paying Agent/Registrar for the Notes under this Ordinance, and that the Paying Agent/Registrar will be one entity. The Issuer reserves the right to, and may, at its option, change the Paying Agent/Registrar upon not less than 30 days written notice to the Paying Agent/Registrar, to be effective not later than 15 days prior to the next succeeding Payment Date. In the event that the entity at any time acting as Paying Agent/Registrar (or its successor by merger, acquisition, or other method) should resign or othenNise cease to act as such, the Issuer covenants that promptly it will appoint a competent and legally qualified bank, trust company, financial institution, or other agency -3- to act as Paying Agent/Registrar under this Ordinance. Upon any change in the Paying Agent/Registrar, the previous Paying Agent/Registrar promptly shall transfer and deliver the Registration Books (or a copy thereof), along with all other pertinent books and records relating to the Notes, to the new Paying Agent/Registrar designated and appointed by the Issuer. Upon any change in the Paying Agent/Registrar, the Issuer promptly will cause a written notice thereof to be sent by the new Paying Agent/Registrar to each registered owner of the Notes, by United States mail, first-class postage prepaid, which notice also shall give the address of the new Paying Agent/Registrar. By accepting the position and performing as such, each Paying Agent/Registrar shall be deemed to have agreed to the provisions of this Ordinance, and a certified copy of this ©rdinance shall be delivered to each Paying Agent/Registrar. Section 6. FORM OF NOTES. That the form of the Notes, including the form of Paying Agent/Registrar's Authentication Certificate and the form of Assignment shall be, respectively, substantially in the form attached hereto as Exhibit B, with such variations, omissions, or insertions as are appropriate, permitted or required by this Ordinance including, without limitation, those variations, omissions, or insertions to be completed by an Authorized Representative reflect the terms of the sale of Notes as permitted by Section 2 hereof. Section 7. INTEREST AND SINKING FUND/TAX LEVY. That the Interest and Sinking Fund is hereby created and established solely for the benefit of the Notes, and the Interest and Sinking Fund shall be established and maintained by the Issuer at an official depository bank of the Issuer for so long as the Notes or interest thereon are outstanding and unpaid. The Interest and Sinking Fund shall be kept separate and apart from all other funds and accounts of the Issuer, and shall be used only for paying the interest on and principal of the Notes. Until expended for the purposes set forth in Section I hereof, the proceeds derived from the sale of the Notes shall be held as further security for the timely payment of the principal and interest on the Notes All ad valorem taxes levied and collected for and on account of the Notes shall be deposited, as collected, to the credit of the Interest and Sinking Fund. During each year while any of the Notes is outstanding and unpaid, the City Council shall compute and ascertain a rate and amount of ad valorem tax which will be sufficient to raise and produce the money required to pay the interest on the Notes as such interest comes due, and to provide and maintain a sinking fund of at least two percent (2%) thereof, in any event in an amount adequate to pay the principal of such Notes as such principal matures; and said tax shall be based on the latest approved tax rolls of said Issuer, with full allowance being made for tax delinquencies and the cost of tax collection. Said rate and amount of ad valorem tax is hereby levied by the governing body of the Issuer, and is hereby ordered to be levied, against alt taxable property in the Issuer for each year while any of the Notes are outstanding and unpaid; and said tax shall be assessed and collected each such year and deposited to the credit of the aforesaid Interest and Sinking Fund. Said ad valorem taxes sufficient to provide for the payment of the interest on and principal of the Notes as such interest comes due and such principal matures, are hereby pledged from the ad valorem taxes of the Issuer for such payment, within the limit prescribed by law. If sufficient ad valorem taxes have not been levied and collected for the purpose of making debt service payments on Notes when due, there shall be appropriated from the City's general fund moneys sufficient to enable the City to make such debt service payments on a Payment Date including specifically the payment of debt service on the Notes on the first Payment Date therefor. Section 8. CHAPTER 1208, GOVERNMENT CODE, APPLIES TO THE NOTES. Chapter 1208, Texas Government Code, applies to the issuance of the Notes and the pledge of the taxes granted by the Issuer under Section 7 of this Ordinance, and such pledge is therefore valid, effective, and perfected. If Texas law is amended at any time while the Notes are outstanding and unpaid such that the pledge of the taxes granted by the Issuer under Section 8 of this Ordinance is to be subject to the filing requirements of Chapter 9, Business & Commerce Code, then in order to preserve to the registered owners of the Notes the perfection of the security interest in said pledge, the Issuer agrees to take such measures as it determines are reasonable and necessary under Texas law to comply with the applicable provisions of Chapter 9, Business & Commerce Code and enable a filing to perfect the security interest in said pledge to occur. Section 9. REMEDIES OF REGISTERED OWNERS. That in addition to all rights and remedies of any registered owners of the Notes provided by the laws of the State of Texas, the Issuer covenants and agrees that in the event the Issuer defaults in the payment of the principal of or interest on the Notes when due, or fails to make the payments required by this Ordinance to be set forth in this Ordinance, the registered owners of the Notes shall be entitled to a writ of mandamus issued by a court of proper jurisdiction compelling and requiring the City Council and other officers of the Issuer to observe and perform any covenant, obligation or condition prescribed in this Ordinance. No delay or omission by any registered owner to exercise any right or power accruing to him upon default shall impair any such right or power, or shall be construed to be a waiver of any such default or acquiescence therein, and every such right or power may be exercised from time to time and as often as may be deemed expedient. The specific remedies mentioned in this Ordinance shall be available to the registered owners of the Notes and shall be cumulative of all other existing remedies. Section 10. TRANSFERS TO PAYING AGENT. That the Issuer further covenants that on or before each Payment Date, or any redemption date, there shall be transferred to the Paying Agent/Registrar an amount sufficient to pay the principal and interest requirements due on the Notes as they become due and payable. Section 11. USE OF NOTE PROCEEDS. That the proceeds of the issuance of the Notes shall be deposited in a designated account within the Issuer's general fund and used to pay contractual obligations incurred or to be incurred in connection with the purposes described in Section 1 of this Ordinance. Section 12. INVESTMENTS. (a) That the City may place proceeds of the Notes (including investment earnings thereon) in time deposits or invest the same as authorized by law, including, without limitation, the Public Funds Investment Act of 1987, as amended (Chapter 2256, Texas Government Code), and the City's investment policy; provided, -5- however, that the Issuer hereby covenants that the proceeds of the sale of the Notes will be used as soon as practicable for the purposes for which the Notes are issued. (b) Amounts received from the investment of the proceeds of the Notes remaining after the payment of all project costs and the retirement of debt service on the Notes, to the extent not required to be deposited to a separate rebate fund as required by section 148 of the Code, shall be placed into the Interest and Sinking Fund and used for the payment of debt service on the Notes. Section 13. SECURITY FOR FUNDS. That all deposits authorized or required by this Ordinance shall be secured to the fullest extent required by law for the security of public funds. Section 14. DUTIES OF OFFICERS OF THE ISSUER. (a) That the Mayor, any Authorized Representative and the City Manager are hereby instructed and directed to do any and all things necessary in reference to the maintenance of the Issuer and to make money available for the payment of the Notes in the manner provided by law. (b) The City Secretary is authorized to execute the certificate to which this Ordinance is attached on behalf of the City. The Mayor, any Authorized Representative and the City Secretary are authorized to do any and all things proper and necessary to carry out the intent of this Ordinance. (c) The City Manager is hereby authorized to have control of the Notes and all necessary records and proceedings pertaining to the Notes pending their delivery to the Purchaser. The City Manager or the designee thereof is directed to submit for investigation, examination and approval by the Attorney General of the State of Texas the Notes and the proceedings authorizing their issuance, and to request the registration of the Notes and the proceedings authorizing their issuance by the Comptroller of Public Accounts of the State of Texas. Section 15. FEDERAL TAX COVENANTS. That the Issuer covenants to and with the purchasers of the Notes to comply with the provisions of the Code. The Issuer's covenant to comply with the Code shall include, without limitation, compliance with those provisions of the Code regarding the timing of expenditure of proceeds of the Notes, the restriction on investment yields, the filing of information returns with the Internal Revenue Service, and, if required by the Code, the rebate of excess arbitrage earnings to the United States. Further, the Issuer certifies that based upon all facts and estimates now known or reasonably expected to be in existence on the date the Notes are delivered and paid for, the Issuer expects that the proceeds of the Notes will not be used in a manner that would cause the Notes or any portion of the Notes to be an "arbitrage bond" within the meaning of section 148 of the Code, and the regulations prescribed thereunder. Furthermore, the Mayor and each Authorized Representative is authorized and directed to provide certifications of facts and estimates that are material to the reasonable expectations of the Issuer as of the date the Notes are delivered and paid for. In particular, the Mayor and -6- each Authorized Representative is authorized to certify for the Issuer the facts and circumstances and reasonable expectations of the Issuer on the date the Notes are delivered and paid for regarding the amount and use of the proceeds of the Notes. Moreover, the Issuer covenants to make such use of the proceeds of the Notes, regulate investments of proceeds of the Notes, take such other and further actions and follow such procedures, including, without limitation the method of calculating yield on the Notes, as may be required so that the interest on the Notes shall continue to be excluded from gross income for federal income tax purposes under the Code. The Issuer further covenants that the proceeds of the Notes will not be used directly or indirectly so as to cause all or any part of the Notes to become a "private activity bond" within the meaning of section 141 (a) of the Code. In complying with the provisions of this Section, the Issuer shall be entitled to rely upon an opinion of Bond Counsel. In furtherance thereof, the Issuer covenants as follows: (a) to take any action to assure that no more than ten percent of the proceeds of the Notes (less amounts deposited to a reserve fund, if any) are used for any "private business use," as defined in section 141(b)(6) of the Code or, if more than ten percent of the proceeds are so used, that amounts, whether or not received by the Issuer, with respect to such private business use, do not, under the terms of this Ordinance or any underlying arrangement, directly or indirectly, secure or provide for the payment of more than ten percent of the debt service on the Notes, in contravention of section 141 (b)(2) of the Code; (b) to take any action to assure that in the event that the "private business use" described in subsection (a) hereof exceeds five percent of the proceeds of the Notes (less amounts deposited into a reserve fund, if any), then the amount in excess of five percent is used for a "private business use" which is "related" and not "disproportionate," within the meaning of section 141(b)(3) of the Code, to the governmental use; (c) to take any action to assure that no amount which is greater than the lesser of $5,000,000, or five percent of the proceeds of the Notes (less amounts deposited into a reserve fund, if any), is directly or indirectly used to finance loans to persons, other than state or local governmental units, in contravention of section141(c) of the Code; (d) to refrain from taking any action which would otherwise result in the Notes being treated as "private activity bonds" within the meaning of section 141(b) of the Code; (e) to refrain from taking any action that would result in the Notes being "federally guaranteed" within the meaning of section 149(b) of the Code; -7- (0 to refrain from using any portion of the proceeds of the Notes, directly or indirectly, to acquire or to replace funds which were used, directly or indirectly, to acquire investment property (as defined in section 148(b)(2) of the Code) which produces a materially higher yield over the term of the Notes, other than investment property acquired with -- (1) proceeds of the Notes invested for a reasonable temporary period of three years or less or, in the case of a refunding bond, for a period of 30 days or less until such proceeds are needed for the purpose for which the notes are issued, (2) amounts invested in a bona fide debt service fund, within the meaning of section 1.148-1(b) of the Treasury Regulations, and (3) amounts deposited in any reasonably required reserve or replacement fund to the extent such amounts do not exceed ten percent of the proceeds of the Notes; (g) to otherwise restrict the use of the proceeds of the Notes or amounts treated as proceeds of the Notes, as may be necessary, so that the Notes do not otherwise contravene the requirements of section 148 of the Code (relating to arbitrage) and, to the extent applicable, section 149(d) of the Code (relating to advance refundings); and (h) to pay to the United States of America at least once during each five- year period (beginning on the date of delivery of the Notes) an amount that is at least equal to 90 percent of the "Excess Earnings" (within the meaning of section 148(0 of the Code) and to pay to the United States of America, not later than 60 days after the Notes have been paid in full, 100 percent of the amount then required to be paid as a result of Excess Earnings under section 148(0 of the Code. In order to facilitate compliance with the above clause (h), a "Rebate Fund" is hereby established by the City for the sole benefit of the United States of America, and such Rebate Fund shall not be subject to the claim of any other person, including without limitation the registered owners of the Bonds. The Rebate Fund is established for the additional purpose of compliance with section 148 of the Code. The Issuer understands that the term "proceeds" includes "disposition proceeds" as defined in the Treasury Regulations and, in the case of refunding bonds, transferred proceeds (if any) and proceeds of the refunded bonds expended prior to the date of the issuance of the Bonds. It is the understanding of the Issuer that the covenants contained herein are intended to assure compliance with the Code and any regulations or rulings promulgated by the U.S. Department of the Treasury pursuant thereto. In the event that regulations or rulings are hereafter promulgated which modify, or expand provisions of the Code, as applicable to the Notes, the Issuer will not be required to comply with any -8- covenant contained herein to the extent that such modification or expansion, in the opinion of Bond Counsel, will not adversely affect the exemption from federal income taxation of interest on the Notes under section 105 of the Code. In the event that regulations or rulings are hereafter promulgated which impose additional requirements which are applicable to the Notes, the Issuer agrees to comply with the additional requirements to the extent necessary, in the opinion of Bond Counsel, to preserve the exemption from federal income taxation of interest on the Notes under section 105 of the Code. Section 16. ALLOCATION OF, AND LIMITATION ON, EXPENDITURES FOR ELIGIBLE PROJECTS. That the City covenants to account for on its books and records the expenditure of proceeds from the sale of the Notes and any investment earnings thereon to be used for the acquisition of Property by allocating proceeds to expenditures within 18 months of the later of the date that (a) the expenditure on Property is made or (b) each item of Property is acquired. The foregoing notwithstanding, the City shall not expend such proceeds or investment earnings more than 60 days after the later of (a) the fifth anniversary of the date of delivery of the Notes or (b) the date the Notes are retired, unless the City obtains an opinion of Bond Counsel substantially to the effect that such expenditure will not adversely affect the tax-exempt status of the Notes. For purposes of this Section, the City shall not be obligated to comply with this covenant if it obtains an opinion of Bond Counsel to the effect that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. Section 17. DISPOSITION OF ELIGIBLE PROJECTS. That the City covenants that any item of Property will not be sold or otherwise disposed in a transaction resulting in the receipt by the City of cash or other compensation, unless the City obtains an opinion of Bond Counsel substantially to the effect that such sale or other disposition will not adversely affect the tax-exempt status of the Notes. For purposes of this Section, the portion of the property comprising personal property and disposed of in the ordinary course of business shall not be treated as a transaction resulting in the receipt of cash or other compensation. For purposes of this Section, the City shall not be obligated to comply with this covenant if it obtains an opinion of Bond Counsel to the effect that such failure to comply will not adversely affect the excludability for federal income tax purposes from gross income of the interest. Section 18. DAMAGED, MUTILATED, LOST, STOLEN, OR DESTROYED NOTES. (a) Replacement Notes. That in the event any outstanding Note is damaged, mutilated, lost, stolen, or destroyed, the Paying Agent/Registrar shall cause to be printed, executed, and delivered, a new Note of the same principal amount, maturity, and interest rate, as the damaged, mutilated, lost, stolen, or destroyed Note, in replacement for such Note in the manner hereinafter provided. (b) Application for Replacement Notes. Application for replacement of damaged, mutilated, lost, stolen, or destroyed Notes shall be made by the registered owner thereof to the Paying Agent/Registrar. In every case of loss, theft, or destruction of a Note, the registered owner applying for a replacement Note shall furnish to the Issuer and to the Paying Agent/Registrar such security or indemnity as may be required by them to save -9- each of them harmless from any loss or damage with respect thereto. Also, in every case of loss, theft, or destruction of a Note, the registered owner shall furnish to the Issuer and to the Paying Agent/Registrar evidence to their satisfaction of the loss, theft, or destruction of such Note, as the case may be. In every case of damage or mutilation of a Note, the registered owner shall surrender to the Paying Agent/Registrar for cancellation the Note so damaged or mutilated. (c) No Default Occurred. Notwithstanding the foregoing provisions of this Section 18, in the event any such Note shall have matured, and no default has occurred which is then continuing in the payment of the principal of, redemption premium, if any, or interest on such Note, the Issuer may authorize the payment of the same (without surrender thereof except in the case of a damaged or mutilated Note) instead of issuing a replacement Note, provided security or indemnity is furnished as above provided in this Section 18. (d) Charge for Issuing Replacement Notes. Prior to the issuance of any replacement Note, the Paying Agent/Registrar shall charge the registered owner of such Note with all legal, printing, and other expenses in connection therewith. Every replacement Note issued pursuant to the provisions of this Section 17 by virtue of the fact that any Note is lost, stolen, or destroyed shall constitute a Note of the Issuer whether or not the lost, stolen, or destroyed Note shall be found at any time, or be enforceable by anyone, and shall be entitled to all the benefits of this Ordinance equally and proportionately with any and all other Notes duly issued under this Ordinance. (e) Authority for Issuing Replacement Notes. In accordance with Subchapter D of Chapter 1201, this Section 18 of this Ordinance shall constitute authority for the issuance of any such replacement Note without necessity of further action by the Issuer or any other body or person, and the duty of the replacement of such Notes is hereby authorized and imposed upon the Paying Agent/Registrar, and the Paying Agent/Registrar shall authenticate and deliver such replacement Notes in the form and manner and with the effect, as provided in Section 5(a) of this Ordinance for Notes issued in conversion and exchange of other Notes. Section 19. CONTINUING DISCLOSURE UNDERTAKING. (a) Annual Reports. That the City shall provide annually to each NRMSIR and any SID, within 180 days after the end of each Fiscal Year ending in or after 2002, financial information and operating data with respect to the City of the general type described in Exhibit C hereto. Any financial statements so to be provided shall be (1) prepared in accordance with the accounting principles described in Exhibit C hereto and (2) audited, if the City commissions an audit of such statements and the audit is completed within the period during which they must be provided. If audited financial statements are not so provided, then the City shall provide unaudited financial statements when due under the Rule and further shall provide audited financial statements for the applicable Fiscal Year to each NRMSIR and any SID, when and if audited financial statements become available. If the City changes its Fiscal Year, it will notify each NRMSIR and any SID of the change (and of the date of the new Fiscal Year end) prior to the next date by which the City otherwise would be required to provide financial information and operating data pursuant to this Section. The financial information and operating data to be provided pursuant to this Section may be set forth in full in one or more documents or may be included by specific reference to any document (including an official statement or other offering document, if it is available from the MSRB) that theretofore has been provided to each NRMSIR and any SID or filed with the SEC. (b) Material Event Notices. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any of the following events with respect to the Notes, if such event is material within the meaning of the federal securities laws: Principal and interest payment delinquencies; Non-payment related defaults; Unscheduled draws on debt service reserves reflecting financial difficulties; Unscheduled draws on credit enhancements reflecting financial difficulties; Substitution of credit or liquidity providers, or their failure to perform; Adverse tax opinions or events affecting the tax-exempt status of the N ores; Modifications to rights of holders of the Notes; Note calls; Defeasances; Release, substitution, or sale of property securing repayment of the Notes; and Rating changes. The City shall notify any SID and either each NRMSIR or the MSRB, in a timely manner, of any failure by the City to provide financial information or operating data in accordance with subsection (a) of this Section by the time required thereby. (c) Limitations, Disclaimers, and Amendments. The City shall be obligated to observe and perform the covenants specified in this Section for so long as, but only for so long as, the City remains an "obligated person" with respect to the Notes within the meaning of the Rule, except that the City in any event will give the notice required by subsection (b) of this Section of any Note calls and defeasance that cause the City no longer to be an "obligated person". The provisions of this Section are for the sole benefit of the holders and beneficial owners of the Notes, and nothing in this Section, express or implied, shall give any benefit or any legal or equitable right, remedy, or claim hereunder to any other person. The City -11- undertakes to provide only the financial information, operating data, financial statements, and notices which it has expressly agreed to provide pursuant to this Section and does not hereby undertake to provide any other information that may be relevant or material to a complete presentation of the City's financial results, condition, or prospects or hereby undertake to update any information provided in accordance with this Section or otherwise, except as expressly provided herein. The City does not make any representation or warranty concerning such information or its usefulness to a decision to invest in or sell Notes at any future date. UNDER NO CIRCUMSTANCES SHALL THE CITY BE LIABLE TO THE HOLDER OR BENEFICIAL OWNER OF ANY NOTE OR ANY OTHER PERSON, IN CONTRACT OR TORT, FOR DAMAGES RESULTING IN WHOLE OR IN PART FROM ANY BREACH BY THE CITY, WHETHER NEGLIGENT OR WITHOUT FAULT ON ITS PART, OF ANY COVENANT SPECIFIED IN THIS SECTION, BUT EVERY RIGHT AND REMEDY OF ANY SUCH PERSON, IN CONTRACT OR TORT, FOR OR ON ACCOUNT OF ANY SUCH BREACH SHALL BE LIMITED TO AN ACTION FOR MANDAMUS OR SPECIFIC PERFORMANCE. No default by the City in observing or performing its obligations under this Section shall constitute a breach of or default under this Ordinance for purposes of any other provision of this Ordinance. Nothing in this Section is intended or shall act to disclaim, waive, or otherwise limit the duties of the City under federal and state securities laws. The provisions of this Section may be amended by the City from time to time to adapt to changed circumstances that arise from a change in legal requirements, a change in law, or a change in the identity, nature, status, or type of operations of the City, but only if (1) the provisions of this Section, as so amended, would have permitted an underwriter to purchase or sell Notes in the primary offering of the Notes in compliance with the Rule, taking into account any amendments or interpretations of the Rule to the date of such amendment, as well as such changed circumstances, and (2) either (a) the holders of a majority in aggregate principal amount (or any greater amount required by any other provision of this Ordinance that authorizes such an amendment) of the outstanding Notes consent to such amendment or (b) a person that is unaffiliated with the City (such as nationally recognized bond counsel) determines that such amendment will not materially impair the interests of the holders and beneficial owners of the Notes. If the City so amends the provisions of this Section, it shall include with any amended financial information or operating data next provided in accordance with subsection (a) of this Section an explanation, in narrative form, of the reasons for the amendment and of the impact of any change in the type of financial information or operating data so provided. The City may also amend or repeal the provisions of this continuing disclosure requirement if the SEC amends or repeals the applicable provision of the Rule or a court of final jurisdiction enters judgment that such provisions of the Rule are invalid, but only if and to the extent that the provisions of this sentence would not prevent an underwriter from lawfully purchasing or selling Notes in the primary offering of the Notes. -12- Section 20. DEFEASANCE. (a) Deemed Paid. That the principal of and/or interest on and redemption premium, if any, on any Note shall be deemed to be paid, retired and no longer outstanding within the meaning of this Ordinance, except to the extent provided by subsection (d) of this Section, when payment of the principal of, redemption premium, if any, on such Note, plus interest thereon to the due date thereof (whether such due date be by reason of maturity, upon redemption, or otherwise) either (i) shall have been made or caused to be made in accordance with the terms thereof, or (ii) shall have been provided for by irrevocably depositing with, or making available to, a paying agent (or escrow agent) therefor, in trust and irrevocably set aside exclusively for such payment, (1) money sufficient to make such payment, (2) Defeasance Obligations, as hereinafter defined in this Section, certified by an independent public accounting firm of national reputation, to mature as to principal and interest in such amounts and at such times as will insure the availability, without reinvestment, of sufficient money to make such payment, and all necessary and proper fees, compensation, and expenses of such paying agent pertaining to the Notes with respect to which such deposit is made shall have been paid or the payment thereof provided for to the satisfaction of such paying agent, or (3) any combination of (1) and (2) above, and when (i) any required notice of redemption has been given or irrevocable provisions for the giving of such notice shall have been made and (ii) proper arrangements have been made by the City with each such paying agent for the payment of its services until after all of the Notes so defeased shall have become due and payable. At such time as a Note shall be deemed to be paid hereunder, as aforesaid, it shall no longer be secured by or entitled to the benefit of this Ordinance or a lien on and pledge of the security granted in support of the payment of the Notes, and shall be entitled to payment solely from such money or Defeasance Obligations, and shall not be regarded as outstanding for any purposes other than payment, transfer, and exchange. (b) Retention of Rights. Notwithstanding the provisions of subsection (a), to the extent that, upon the defeasance of any Notes to be paid at maturity, the City retains the right, pursuant to Section 1207.033(c), Texas Government Code, to later call such Notes for redemption in accordance with the provisions thereof, the City may call such Notes for redemption upon (1) in the proceedings providing for the defeasance of Notes, the City expressly reserves the right to call Notes for redemption, (2) the City giving notice of the reservation of that right to the owners of such Notes immediately following the establishment of the defeasance escrow, and (3) the City directing that notice of the reservation be included in any redemption notices that it may authorize, and upon satisfaction of the provisions of subsection (a) with respect to such Notes as though such Notes were being defeased at the time of the exercise of the option to redeem such Notes and the effect of the redemption is taken into account in determining the sufficiency of the provisions made for the payment of such Notes. (c) Investments. Any escrow agreement or other instrument entered into by the City and a paying agent pursuant to which the money and/or Defeasance Obligations are being held by such paying agent for the payment of such Notes may contain provisions permitting the investment or reinvestment of such moneys in Defeasance Obligations or the substitution of other Defeasance Obligations upon the satisfaction of the requirements specified in subsection (a)(i) or (ii). All income from all Defeasance Obligations in the -13- hands of the paying agent pursuant to this Section which is not required for the payment of the Notes, the redemption premium, if any, and interest thereon, with respect to which such money has been so deposited, shall be remitted to the City, or deposited as directed in writing by the City, and upon receipt of an opinion of bond counsel that such transfer is permitted under state law. (d) Federal Income Tax Consideration. The City covenants that no deposit will be made or accepted under subsection (a)(ii) of this Section and no use made of any such deposit which would cause such Notes to be treated as arbitrage bonds within the meaning of section 148 of the Code. (e) Defeasance Obligations. For the purpose of this Section, the term "Defeasance Obligations" shall mean (i) direct, noncallable obligations of the United States of America, including obligations that are unconditionally guaranteed by the United States of America, (ii) noncallable obligations of an agency or instrumentality of the United States of America, including obligations that are unconditionally guaranteed or insured by the agency or instrumentality and that, on the date the City adopts or approves proceedings authorizing the issuance of refunding bonds or, if such defeasance is not in connection with the issuance of refunding bonds, on the date the City provides for the funding of an escrow to effect the defeasance of the Notes, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent, and (iii) noncallable obligations of a state or an agency or a county, municipality, or other political subdivision of a state that have been refunded and that, on the date the City adopts or approves proceedings authorizing the issuance of refunding bonds or, if such defeasance is not in connection with the issuance of refunding bonds, on the date the City provides for the funding of an escrow to effect the defeasance of the Notes, are rated as to investment quality by a nationally recognized investment rating firm not less than AAA or its equivalent. (f) Continuing Duty of Paying Agent/Registrar. Until all Notes defeased under this Section of this Ordinance shall become due and payable, the Paying Agent/Registrar for such Notes shall perform the services of Paying Agent/Registrar for such Notes the same as if they had not been defeased, and the City shall make proper arrangements to provide and pay for such services. Section 21. SALE OF NOTES. That the sale of the Notes to Zions First National Bank (the "Purchaser"), at a price of par, is hereby authorized, ratified and confirmed. One Note in the principal amount maturing on each maturity date as set forth in Section 2 hereof shall be delivered to the Purchaser, and the Purchaser shall have the right to exchange such Notes as provided in Section 5 hereof without cost. Section 22. TERMS INCORPORATED. That the terms defined in Exhibit A attached hereto are hereby incorporated by reference. Section 23. MISCELLANEOUS PROVISIONS. (a) Preamble. The preamble to this Ordinance shall be considered an integral part of this Ordinance, and is herein incorporated as part of the body of this Ordinance for all purposes. -14- (b) Immediate Effect. This Ordinance shall be effective immediately from and after its passage in accordance with the provisions of Section 1201.028, Texas Government Code. (c) Open Meeting. It is hereby officially found and determined that the meeting at which this Ordinance was passed was open to the public, and public notice of the time, place and purpose of said meeting was given, all as required by Chapter 551, Texas Government Code, as amended. (d) Rules of Construction. The words "herein", "hereof" and "hereunder" and other words of similar import refer to this Ordinance as a whole and not to any particular Section or other subdivision. Except where the context otherwise requires, terms defined in this Ordinance to impart the singular number shall be considered to include the plural number and vice versa. References to any named person means that party and its successors and assigns. References to any constitutional, statutory or regulatory provision means such provision as it exists on the date this Ordinance is adopted by the City and any future amendments thereto or successor provisions thereof. Any reference to the payment of principal in this Ordinance shall be deemed to include the payment of any mandatory sinking fund redemption payments as may be described herein. Any reference to FORM OF NOTE shall refer to the form attached to this Ordinance as Exhibit B. (e) Inconsistent Provisions. All orders and resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Ordinance are hereby repealed and declared to be inapplicable, and the provisions of this Ordinance shall be and remain controlling as to the matters prescribed herein. SIGNED AND SEALED THIS 26TM DAY OF MARCH, 2002. City of Corpus Christi, Texas APPROVED: (SEAL) -15- EXHIBIT A "Chapter 1201" shall mean Chapter 1201, Texas Government Code. "Chapter 1431" shall mean Chapter 1431, Texas Government Code. "Authorized Denomination" shall mean Notes in the denomination of $5,000 or any integral multiple thereof. "Authorized Representative" shall mean one or more of the following officers or employees of the City, acting in concert or individually, to-wit: the City Manager, any Assistant City Manager, or such other officer or employee of the City designated in writing by the City Council to act as an Authorized Representative. "Bond Counsel" shall mean McCall, Parkhurst & Horton L.L.P., or such other attorney or firm of attorneys of such are nationally recognized as having expertise in the practice of tax-exempt municipal finance law as approved by the City. "City" or "Issuer" shall mean the City of Corpus Christi, Texas. "City Council" shall mean the City Council of the Issuer, its governing body. "Code" shall mean the Internal Revenue Code of 1986, as amended. "Fiscal Year" shall mean the twelve-month period ending July 31, or any consecutive twelve-month period declared by the City to be its fiscal year. "Interest and Sinking Fund" shall mean the "City of Corpus Christi, Texas Anticipation Notes Series 2002 Interest and Sinking Fund" established by this Ordinance. "MSRB" shall mean the Municipal Securities Rulemaking Board. "Notes" shall mean the "City of Corpus Christi, Texas, Anticipation Notes, Series 2002", issued in the aggregate principal amount of $1,300,000. The term "Notes" shall mean and include the Notes initially issued and delivered pursuant to this Ordinance (including the Initial Notes) and all substitute Notes exchanged therefor, as well as all other substitute Notes and replacement Notes issued pursuant to the Ordinance, and the term "Note" shall mean any of the Notes. "NRMSIR" shall mean each person whom the SEC or its staff has determined to be a nationally recognized municipal securities information repository within the meaning of the Rule from time to time. "Ordinance" shall mean the Ordinance adopted by the Issuer authorizing the issuance of the Notes. A-1 "Paying Agent/Registrar" shall mean JPMorgan Chase Bank. "Payment Date" shall mean each date interest or principal on the Notes shall be due and payable. "Purchase Agreement" shall mean the Note Purchase Agreement between the City and the Purchaser, executed in connection with the sale and delivery of the Notes. "Registration Books" shall mean the books or records for the registration of the transfer and exchange of the Notes. "Rule" shall mean SEC Rule 15c2-12, as amended from time to time. "SEC" shall mean the United States Securities and Exchange Commission. "SID" shall mean any person designated by the State or an authorized department, officer, or agency thereof as, and determined by the SEC or its staff to be, a state information depository within the meaning of the Rule from time to time. "State" shall mean the State of Texas. A-2 EXHIBIT B FORM OF NOTE NO. R- UNITED STATES OF AMERICA STATE OF TEXAS COUNTY OF NUECES CITY OF CORPUS CHRISTI, TEXAS ANTICIPATION NOTE, SERIES 2002 PRINCIPAL AMOUNT $ INTEREST RATE DATE OF MATURITY INITIAL DELIVERY DATE CUSIP NO. REGISTERED OWNER: PRINCIPAL AMOUNT: DOLLARS ON THE MATURITY DATE specified above, the CITY OF CORPUS CHRISTI, TEXAS, in Nueces County, Texas (the "Issuer"), being a political subdivision of the State of Texas, hereby promises to pay to the Registered Owner set forth above, or registered assigns (hereinafter called the "registered owner") the principal amount set forth above and interest thereon from the Date of Initial Delivery of this Note as set forth above, on September 1, 2002 and on each March 1 and September 1 thereafter to the maturity date specified above, or the date fixed for redemption, at the interest rate per annum specified above; except that if the Paying Agent/Registrar's Authentication Certificate appearing on the face of this Note is dated later than September 1, 2002, such interest is payable on each March 1 and September 1 following such date. THE PRINCIPAL OF AND INTEREST ON this Note are payable in lawful money of the United States of America, without exchange or collection charges. The principal of this Note shall be paid to the registered owner hereof upon presentation and surrender of this Note at maturity or the date fixed for redemption prior to maturity at the designated corporate trust office in Dallas, Texas of JPMorgan Chase Bank, which is the "Paying Agent/Registrar" for this Note. The payment of interest on this Note shall be made by the Paying Agent/Registrar to the registered owner hereof on each interest payment date by check or draft, dated as of such interest payment date, drawn by the Paying Agent/Registrar on, and payable solely from, funds of the Issuer required by the Ordinance B-1 authorizing the issuance of this Note (the "Ordinance") to be on deposit with the Paying Agent/Registrar for such purpose as hereinafter provided; and such check or draft shall be sent by the Paying Agent/Registrar by United States mail, first-class postage prepaid, on each such interest payment date, to the registered owner hereof, at its address as it appeared on the fifteenth day of the month next preceding each such date (the "Record Date") on the Registration Books kept by the Paying Agent/Registrar, as hereinafter described. Any accrued interest due at maturity shall be paid to the registered owner upon presentation and surrender of this Note for payment at the designated corporate trust office of the Paying Agent/Registrar. IN THE EVENT of a non-payment of interest on a scheduled payment date, and for 30 days thereafter, a new record date for such interest payment (a "Special Record Date") will be established by the Paying Agent/Registrar, if and when funds for the payment of such interest have been received from the Issuer. Notice of the Special Record Date and of the scheduled payment date of the past due interest ("Special Payment Date", which shall be 15 days after the Special Record Date) shall be sent at least five business days prior to the Special Record Date by United States mail, first class postage prepaid, to the address of each registered owner appearing on the registration books of the Paying Agent/Registrar at the close of business on the last business day next preceding the date of mailing of such notice. IF THE DATE for the payment of the principal of or interest on this Note shall be a Saturday, Sunday, a legal holiday, or a day on which banking institutions in the City where the designated corporate trust office of the Paying Agent/Registrar is located are authorized by law or executive order to close, then the date for such payment shall be the next succeeding day which is not such a Saturday, Sunday, legal holiday, or day on which banking institutions are authorized to close; and payment on such date shall have the same force and effect as if made on the original date payment was due. THE ISSUER COVENANTS with the registered owner of this Note that on or before the principal and interest payment date for this Note it will make available to the Paying Agent/Registrar, from the "Interest and Sinking Fund" created by the Ordinance, the amounts required to provide for the payment, in immediately available funds, of all principal of and interest on the Notes, when due. THIS NOTE, dated as of April 1, 2002, is one of the series of notes authorized by the Ordinance to be issued in the aggregate principal amount of $1,300,000. This Note, and the series of which it is a part, is authorized pursuant to Chapter 1431, Texas Government Code ("Chapter 1431"), and issued for the purpose of PAYING CONTRACTUAL OBLIGATIONS INCURRED OR TO BE INCURRED FOR THE CONSTRUCTION OF A PUBLIC WORK AND THE PURCHASE OF MATERIALS, SUPPLIES, EQUIPMENT AND MACHINERY IN CONNECTION THEREWITH. This Note and the series of which it is a part is issued pursuant to the Ordinance passed and adopted by the City Council of the Issuer and duly recorded in the minutes of said City Council, as authorized by the Constitution and laws of the State of Texas, including Chapter 1431. B-2 ON ANY DATE, the Notes of this Series may be redeemed prior to their scheduled maturities, at the option of the Issuer, with funds derived from any available and lawful source, as a whole, or in part (provided that a portion of a Note may be redeemed only in an integral multiple of $5,000), at the redemption price indicated below (expressed as a percentage of par value) plus accrued interest to the date fixed for redemption, to-wit: Redemption Period Redemption Price (%) Date of Initial Delivery through February 28, 2005 March 1, 2005 through February 28, 2006 March 1, 2006 through February 28, 2007 March 1, 2007 and thereafter 101.00 100.66 100.33 100.00 The years of maturity of the Notes called for redemption at the option of the Issuer prior to stated maturity shall be selected by the Issuer. The Notes or portions thereof redeemed within a maturity shall be selected at random and by lot by the Paying Agent/Registrar; provided, that during any period in which ownership of the Notes is determined only by a book entry at a securities depository for the Notes, if fewer than all of the Notes of the same maturity and bearing the same interest rate are to be redeemed, the particular Notes of such maturity and bearing such interest rate shall be selected in accordance with the arrangements between the Issuer and the securities depository. AT LEAST 30 days prior to the date fixed for any such redemption, a written notice of such redemption shall be given to the registered owner of each Note or a portion thereof being called for redemption by depositing such notice in the United States mail, first-class postage prepaid, addressed to each such registered owner at his address shown on the Registration Books of the Paying Agent/Registrar. By the date fixed for any such redemption due provision shall be made by the Issuer with the Paying Agent/Registrar for the payment of the required redemption price for this Note or the portion hereof which is to be so redeemed, plus accrued interest thereon to the date fixed for redemption. If such notice of redemption is mailed, and if due provision for such payment is made, all as provided above, this Note, or the portion hereof which is to be so redeemed, thereby auto- matically shall be redeemed prior to its scheduled maturity, and shall not bear interest after the date fixed for its redemption, and shall not be regarded as being outstanding except for the right of the registered owner to receive the redemption price plus accrued interest to the date fixed for redemption from the Paying Agent/Registrar out of the funds provided for such payment. The Paying Agent/Registrar shall record in the Registration Books all such redemptions of principal of this Note or any portion hereof. If a portion of any Note shall be redeemed a substitute Note or Notes having the same maturity date, bearing interest at the same rate, in any denomination or denominations in any integral multiple of $5,000, at the written request of the registered owner, and in aggregate principal amount equal to the unredeemed portion thereof, will be issued to the registered owner upon the surrender thereof for cancellation, at the expense of the Issuer, all as provided in the Ordi- nance. B-3 ALL NOTES OF THIS SERIES are issuable solely as fully registered Notes, without interest coupons, in the denomination of any integral multiple of $5,000 (an "Authorized Denomination"). As provided in the Ordinance, this Note may, at the request of the registered owner or the assignee or assignees hereof, be assigned transferred, converted into and exchanged for a like aggregate principal amount of fully registered Notes, without interest coupons, payable to the appropriate registered owner, assignee or assignees, as the case may be, having the same denomination or denominations in any Authorized Denomination as requested in writing by the appropriate registered owner, assignee or assignees, as the case may be, upon surrender of this Note to the Paying Agent/Registrar for cancellation, all in accordance with the form and procedures set forth in the Ordinance. Among other requirements for such assignment and transfer, this Note must be presented and surrendered to the Paying Agent/Registrar, together with the proper instruments of assignment, in form and with guarantee of signatures satisfactory to the Paying Agent/Registrar, evidencing assignment of this Note or any portion or portions hereof in any Authorized Denomination to the assignee or assignees in whose name or names this Note or any such portion or portions hereof is or are to be registered. The form of Assignment printed or endorsed on this Note may be executed by the registered owner to evidence the assignment hereof, but such method is not exclusive, and other instruments of assignment satisfactory to the Paying Agent/Registrar may be used to evidence the assignment of this Note or any portion or portions hereof from time to time by the registered owner. In the case of the assignment, transfer, conversion or exchange of a Note or Notes or any portion or portions thereof, the reasonable standard or customary fees and charges of the Paying Agent/Registrar will be paid by the Issuer. In any circumstance, any taxes or governmental charges required to be paid with respect thereto shall be paid by the one requesting such assignment, transfer, conversion or exchange, as a condition precedent to the exercise of such privilege. The Paying Agent/Registrar shall not be required (i) to make any such transfer, conversion or exchange during the period beginning at the opening of business 30 days before the day of the first mailing of a notice of redemption and ending at the close of business on the day of such mailing, or (ii) to transfer, convert or exchange any Notes so selected for redemption scheduled to occur within 30 calendar days; provided, however, such limitation of transfer shall not be applicable to an exchange by the registered owner of an unredeemed balance of a Note called for redemption in part. IN THE EVENT any Paying Agent/Registrar for the Notes is changed by the Issuer, resigns, or otherwise ceases to act as such, the Issuer has covenanted in the Ordinance that it promptly will appoint a competent and legally qualified substitute therefor, and cause written notice thereof to be mailed to the registered owners of the Notes. IT IS HEREBY CERTIFIED AND REPRESENTED that this Note has been duly and validly authorized, issued and delivered; that all acts, conditions and things required or proper to be performed, exist and be done precedent to or in the authorization, issuance and delivery of this Note have been performed, existed and been done in accordance with law; that this Note constitutes an obligation of said Issuer; and that annual ad valorem taxes sufficient to provide for the payment of the interest on and principal of this Note, as B-4 such interest comes due and such principal matures, have been levied and ordered to be levied against all taxable property in said Issuer, and have been pledged from the Issuer's annual ad valorem tax for such payment, within the limits prescribed by law. Reference is made to the Ordinance for a more complete description of the Issuer's obligation to provide for the payment of the principal of and interest on the Notes. By acceptance of this Note, the registered owner expressly assents to all provisions of the Ordinance. IN WITNESS WHEREOF, the Issuer has caused this Note to be signed with the manual or facsimile signature of the Mayor of said City, and attested with the manual or facsimile signature of the City Secretary and the official seal of the Issuer has been duly affixed to, or impressed, or placed in facsimile, on this Note. (signature) City Secretary City of Corpus Christi, Texas ('signature) Mayor, City of Corpus Christi, Texas (SEAL) B-5 FORM OF ASSIGNMENT ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto Please insert Social Security or Taxpayer Identification Number of Transferee (Please print or typewrite name and address, including zip code of Transferee) the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints , attorney, to register the transfer of the within Note on the books kept for registration thereof, with full power of substitution in the premises. Dated: Signature Guaranteed: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. NOTICE: The signature above must correspond with the name of the registered owner as it appears upon the front of this Note in every particular, with- out alteration or enlargement or any change whatsoever. B-6 FORM OF PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE PAYING AGENT/REGISTRAR'S AUTHENTICATION CERTIFICATE It is hereby certified that this Note has been issued under the provisions of the Ordinance described in the text of this Note; that this Note has been duly authenticated; and that this Note has been issued in exchange for or replacement of a note, notes, or a portion of a note or notes of an issue, the proceedings pursuant to which such issue was authorized were approved by the Attorney General of the State of Texas. Dated: JPMORGAN CHASE BANK Dallas, Texas Paying Agent/Registrar By Authorized Representative FORM OF COMPTROLLER'S REGISTRATION CERTIFICATE: (only to accompany the Initial Notes to be delivered at closing to the purchaser thereof) OFFICE OF COMPTROLLER STATE OF TEXAS REGISTER NO. I thereby certify that this Note has been examined, certified as to validity, and approved by the Attorney General of the State of Texas and that this Note has been registered by the Comptroller of Public Accounts of the State of Texas. Witness my signature and seal this Comptroller of Public Accounts of the State of Texas (SEAL) B-7 Exhibit C to Ordinance DESCRIPTION OF ANNUAL FINANCIAL INFORMATION The following information is referred to in Section 14 of this Ordinance. Annual Financial Statements and Operating Data The financial information and operating data with respect to the City to be provided annually in accordance with such Section are as specified below: The information described in the tables "Debt Payable from Taxes", "General Fund Revenues", "General Expenses", "Ad Valorem Taxes", "Municipal Hotel Occupancy Taxes", "Solid Waste Operations", and "The Tax Increment Financing Act"; and The "Combined Financial Statements of the City of Corpus Christi, Texas", commencing with the Fiscal Year ended July 31, 2001. Accounting Principles The accounting principles referred to in such Section are the accounting principles described in the notes to the financial statements referred to in paragraph 1 described above, as such principles may be changed from time to time to comply with state law or regulation. c-1 FINANCIAL INFORMATION DEBT PAYABLE ~VROM TAXES Bonded Debt The table below shows the amount of direct tax supported debt of the City as of July 31, 2001. 2000 Assessed Valuation (100% of Market Value) Less: Exemptions Taxable Assessed Valuation (1) General Improvement Bonds Outstanding (2) Combination Tax and Revenue Certificates of Obligation Otlt~anding (2) Total Indebtedness Payable from Taxes Less: Self-Supporting Debt (3) Applicable Interest & Sinking lh"'tmds (4) Net Indebtedness Payable from Taxes $43,193,373 9.087.310 Ratio Total Debt to 2000 Net Taxable Assessed Valuation Ratio Net Debt to 2000 Net Taxable Assessed Valuation 2001 Estimated City Population Total Debt Per Capita Net Debt Per Capita $9,018,221,819 1.366.164.416 $139,646,532 34.715.000 $174,361,532 52.280.68~ 2.28% 1.60% 280,228 $622 $436 See footnotes on following page (The remainder of this page intentionally left blank) (2) (3) (4) (1) Pursuant to authority permitted by Section l-b, Article VIll of the State Constitution, the City has grantod an exemption of $50,000 of market valuation to the residence homestead of property owners over 65 years of age and an exemption of $50,000 of market valuation for disabled property owners. Also, the legislature, pursuant to a constitutional amendment and Section 11.22 of the Property Tax Code, mandated an additional property tax exemption for disabled veterans of the surviving spouse or children of a deceased veteran who died while on active duty in the armed forces. The exemption from taxation applies to either real or personal property with the amount of assessed valuation exempted ranging from $1,500 to $3,000, depending on the amount of disability or whether the exemption is applicable to surviving spouse or children. Starting in tax year 1996, the exemption increased in range from $5,000 to $12,000 of assessed value. Additionally, State law provides that an eligible owner of agricultural land or timberland may apply to have such property appraised on the basis of productivity value or on the basis of market value, whichever is less. A 1981 constitutional amendment provides local governments the option of grant!ng homestead exemptions of up to 30 % of market value for the 1985 through 1987 tax years, and up to 20 % of market value thereafter. Minimum exemption is $5,000. For the tax years 1982 through 1999, the City has granted a homestead exemption of 10% of market value or $5,000, whichever is greater. The constitutional amendment further provides that taxes may continue to be levied against the value of the homestead exemption where ad valorem taxes have been previously pledged for the payment of debt, if cessation of the levy would impair the obligation of the conU'act by which the debt was created. The appraisal of property within the City is the responsibility of the Nueces County Appraisal District (the 'Appraisal District). The Appraisal District is required under the Property Tax Code to assess all property within the Appraisal District on the basis of 100% of its value and is prohibited from applying any assessment ratios. The value placed upon property within the Appraisal Dis~'ict is subject to review by the Appraisal Review Board, consisting of seven members appoimed by the Board of Directors of the Appraisal District. The Appraisal District is required to reappraise the value of property within the Appraisal District every three years. The last such review was made as of January 1, 1999. The City is entitled to challenge the determination of appraised value of property by category within the City by petition fried with the Appraisal Review Board. Direct debt includes $24,681,205 in accreted interest on Capital Apprechtion Bonds. To continue to nl~intain this debt as self-supporting, transfers have been made from the Tourist and Convemion revenues ' and Airport Parking and Aquarium revenues, Tax Increment Fund, Municipal Hotel Occupancy Taxes, Marina, Golf Centers, Storm Water, and Solid Waste in mounts sufficient to pay both principal an,q interest on the self-supporting debt. The Total Interest & Sinking Fun~cl balance as of July 31, 2001 is $12,079,370, 24.77%, or $2,992,060, applies to self-supporting debt. The balance of the Interest & Sinking Fund applicable to lax support, ed debt is $9,087,310. ..... .... - ~~ <0 lOa;~~L(Jt!~""'~~N ... ~ ~ 8 .n?""- T""~.o a; ~ c) ~ tn~ cD ~ r-:- d: :Jl:g!;;:iil!;l~~ol:l~o ... '" C\I~N(J$,...-or:~.o~I()"':CD cO 0 l()(f) T"" ...... N <0 0 .. ~ '" .. .._00.'0'.1 III O~~"'<O[8 '" ~Ol ~ ,... NOll() ......NM,.,.O Ol ':o..;gcO':";a;;oci;t, cO .,; .....Q)T"" mmOMC") '" 1()l()r--......COCJ)(l')C\I,........<o ... ~ .,.:octSlli.,.:.....~~cr)cD......~<O a; " Ol I/)M..... ..... 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'5 ,; ~ I 8 <1\;;;~~!:;s-~~ ~ J 'lI 0'1..""".. ..t"-;,"lN..~ ..""':. ~ ~ -~--s"'''''''''' .;: ~ ~ 3~.~ ..~~~v:: lJ! u "'ltOl.r--COM_r--Vl 1 II '3 - '" -- 0 .. ii: .e i a '" .!l ~ 0 ." -~CI000SQ\onOOi1; ~j .Jl ~ t :a ~ ~ :Q~OQ~::!~t"'l ji of q1 8ttgg~g~1i 1 .E ~ ~ l"'-..-:'<"l .. .. .. ..-:.r-- !;' ~ '" l("IO\r--OOC"'l_OOV"o .; J ~ ~ - '" - - 51 a D .~ .. I I ." ~ .. li ~ J .5 .~ J " Co -" D 1:' ~ !~ i '" "" l i , .~ r2 " 'S oS ~ .5 "' ! "' '5 ~ .S ". " '5 (j. ft"'. '6 i , c3!!l 'e"i~j S , ] 0 ~ 0 ~ ~ ." '" ~ "J~ '" :a ! lUd! ~~ il ~ .<: 8 ~ ~ ~ 8 Co ~ - .. - -~ AD VALOREM TAXES Subject to certain exemptions, the property tax is imposed on real and personal property situated in the City. In addition to exemptions discussed below, principal categories of exempt properly include property owned by the State of Texas or its political subdivisions if the property is used for public purposes; property exempt fi'om ad valorem taxation by federal law;, certain household goods, family supplies, and personal effects; farm products owned by producers; certain property associated with charitable organizations, use and development associations, religious organizations, and qualified schools; designated historic sites; solar and wind powered energy devices; and most individually owned automobiles. In addition, owners of agriculture and open space land, under certain cimumstances, may request valuation of such land on the basis of productive capacity rather than market value. Exemptions - Over 65 and Disabled Pursuant to provisions of the Texas Constitution, the City may exempt an amount from the assessed valuation on the homesteads of persons 65 years of age or older and certain disabled persons to the extent approved by the City Council (and must grant an exemption to the extent voted by the majority of the City's voters at an elec~on called upon a petition of 20% of the number of voters voting in the City's most recent election.) Disabled Veterans Exemptions Beginning wilh the tax year 1976, under provision of the Texas Constitution, the City must grant an exemption ranging from $1,500 to $3,000 of assessed value of residential homesteads or personal property of disabled veterans who ~e for the exemption based on a formula of the percent of disability claimed. Starting in tax year 1996, the exemption increased in range from $5,000 to $12,000 of assessed value. Exemption. Local Option Under provistons of a Consffiutional Amendment, the City has the option of granting homestead exemption of up to 20% of market value. Minimum exemption is $5,000. For the years beginning with 1982, the City has granted 10% of market value or $5,000 exemptions, whichever is greater. O-o ~=xempti~ns - Over 65 and Disabled Over 65 Exemptions Tax Assessed Value Number of Assessed Value Average Year Exemption (1) Exemptions of Exemptions Value 1992 $50,000 13,522 $476,072,292 $35,207 1993 50,000 13,990 492,911,311 35,233 1994 50,000 14,222 505,507,634 35,544 1995 50,000 14,554 521,688,068 35,845 1996 50,000 15,005 545,861,694 36,379 1997 50,000 15,226 564,755,315 37,092 1998 50,000 15,638 619,239,686 39,598 1999 50,000 16,004 636,786,100 39,789 2000 50,000 16,255 668,199,827 41,107 2001 50,000 16,458 684,880,475 41,614 Disabled Taxpayers Exemptions Tax Assessed Value Number of Assessed Value Average Year Exemption (1) Exemptions of Exemptions Value 1992 $50,000 1,669 $52,479,249 $31,444 1993 50,000 1,815 56,145,954 30,934 1994 50,000 1,954 60,202,995 30.810 1995 50,000 2,121 65,714,888 30,983 1996 50,000 2.245 70,134,759 31,240 1997 50,000 2,349 75,885,762 32,306 1998 50,000 2,447 87,787,881 35,876 1999 50,000 2.535 93,292,702 36,802 2000 50,000 2,652 101,418,975 38,242 2001 50,000 2,765 108,303,281 39,189 Disabled Veterans Exemptions Tax Assessed Value Number of Year Exemption (1) Exemptions 1992 (2) 1,818 $2.686,802 1993 (2) 1,831 2,674,509 1994 (2) 1,821 2,680,310 1995 (2) 1,874 2,832,533 1996 (3) 1,938 I0,464,156 1997 (3) 1,982 11,134,924 1998 (3) 1,998 18,245,383 1999 (3) 2,061 19,024,837 2000 (3) 2.092 19,290,426 2001 (3) 2,143 19,814,977 Assessed Value Average of Exemptions Value $1,478 1,461 1,472 1,511 5,399 5,618 9,132 9.231 9,221 9,246 Exemption - Local Option Tax Assessed Value Number of Assessed Value Average Year Exemption (1) Exemptions of Exemptions Value 1992 (4) 45,704 $306,922,228 $6,715 1993 (4) 48,181 325,945,849 6,765 1994 (4) 48,727 337.611,117 6,929 1995 (4) 49.166 351,659,331 7,152 1996 (4) 49,832 366,398,420 7,353 1997 (4) 50,526 380.325,533 7,527 1998 (4) 51,455 343,729,290 6,680 1999 (4) 52,513 366,149,406 6,973 2000 (4) 54,333 392,740,809 7,228 2001 (4) 55,189 414,770,371 7,515 (1) Th/s exemption w~as granted pursuant to an election held on Apdl 6, 1987, called upo~t pet~o~ (2) Segirming v, ith tax year 1976, under pmvi$io~ of the Texas Constitution, ~e City must grant Tax Abatement State law authorizes subdivisions of the State of Texas to grant tax abatements to any person, organlaation or corporation in order to stimulate econom/c deveiopmem within the State. Consequently, the City Council has adopted a resolution establishing criteria whereby the City will, on a case-by-case basis, give consideration to provJding tax abatement to any qualifying applicant. Generally, the period of abatement is for up to two years during the period of construction and for five years thereafter with a maximum period not to exceed seven years. The percentage of tax abated shall be determined based upon permanent jobs provided by the project as follows: 0% on 49 or less; 50% on 50 to 99; 75% on 100 to 199; 100% on over 200. Notwithstanding the resolution adopted by the City Council, or the criteria attentLqnt thereto, it is not implied or suggested that the City is under any obligation to provide tax abatement to any applicant. The estimated value of property in the City that was subject to tax abatement on January 1, 2000 is approximately $13,469,107and assessed value figures disclosed in this document are net of these tax abatements. Tax Rates and Limitations The max/mum tax rate permitted by the Constitution of Texas is $2.50 per $100 of assessed valuation. On April 3, 1993, the citizens of Corpus Christi voted to amend the City Charter which comainod a tax limitation of $0.68 per $100 of assessed valuation for all purposes including debt service. The amended Charter provides for the tax rote to increase up to the State limit for voter approved debt authorized after April 4, 1993. The ad valorem tax rate is levied each year by the City Council through the adoption of a tax rote ordinance. Effective January 1, 2000, all taxing nnit~ must adopt their tax rates before the later of September 30 or the 60th day after the taxing unit receives the appraisal mil. Tax Rate Distribution (per $100) General Interest and T~tx Year Fund Sinkirat Fund Total 1992 0.472290 0.131150 0.603440 1993 0.445064 0.172894 0.617958 1994 0.441296 0.171430 0.612726 1995 0.439636 0.173090 0.612726 1996 0.444536 0.179190 0.623726 1997 0.444536 0.179190 0.623726 1998 0.449336 0.174390 0.623726 1999 0.468133 0.155593 0.623726 2000 0.4631326 0.1605934 0.623725 2001 0.4575227 0.1866518 0.6441745 Truth-in-Taxation Limitation Chapter 26 of the Property Tax Code requires taxing units to comply with Troth-in-Taxation laws in adopting their tax rates. The purpose of the laws is to make taxpayers aware of tax rote proposals and to allow taxpayers, in certain cases, to roll back or limit a tax increase. The City anmmlly calclllates and publicizes its effective tax rote and rollback tax rate. The effective rote is calculated by dividing last year's total tax levy (adjusted for lost property and new exemptions) by this year's total taxable value (adjusted for new property and new examptious). The rollback tax rate equals 108% of the effective maintenance and operation tax rate pins the current tax rate for debt service. If the City decides to increase the tax rate more than 3% above the effective tax rate, it must hold a public hearing and supply ample notSce to its taxpayers. For tax years 1998 and 1999, the 3% allowance is deleted. Any inerease above thc preceding year's total tax revenue requires the City to publish natice~ and hold a public hearing. Starting with tax year 2000, the code will return to the law that was in effect before the 1998 tax year. The public hearing will be required only ff the proposed tax rate is more than 3 % above the effective tax rate. If the actual tax rate adopted exceeds the roliback tax rate, taxpayers may petition to hold an election to reduce the tax rate to the rollback tax rate. Levy and Collection of Taxes The City has contracted for the collection of its property taxes with the Nueces County Tax Assessor/Collector. Before the later of September 30 or the 60th day after the taxing unit receives the appraisal roll, the rate of taxation is set by the City Council based upon the valuation of property within the City as of January 1. Ad valorem taxes are due on receipt of a tax bill and payable from October 1 of the year in which levied until January 31 of the following year without interest or penalty. Split payments are not allowed. On February 1. the unpaid taxes become delinquent and have a penalty and interest charge of seven (7%) percent. Taxes delinquent from March I through June 30 have an additional penalty and interest charge of two (2%) percent per month for a total penalty and interest charge of f"~een (15%) pement. Taxes delinquent on July I have a total penalty and interest charge of eighteen (18%) percent. Taxes delinquent on July 1 accrue an additional fifteen (15%) percent for collection cost of taxes. Unpaid taxes after July 31 accrue an additional interest charge of one (1%) percent per month until paid. The Property Tax Code makes provision for discounts for eady payment and the postponement of the delinquency date under, certain circumstances. Fiscal year 1991-92 was the last year the City granted a discount for early payment. The discounts were three (3%) percent in October, two (2%) percent in November, and one (1%) percent in December. For fiscal years after 1991-92, the City did not offer disceunts. (The remainder of this page intentionally left blank) Levy and Collection of Taxes The following Table I sets forth a comparison of the net taxable assessed valuation, tax rate levy and percentage of taxes collected for the past nine fiscal years. Table II sets forth a comparison of the tax levies and also indicates the amount of uncollected delinquent taxes. Table I Net Taxable Tax Assessed Tax Year Year Valuation Rate % Current % of Total Ending 1992 $5,993,403,579 $9.603440 95.1% 98.4% 7-31-93 1993 6,027,203,588 0.617958 95.8% 99.5% 7-31-94 1994 6,230,638,245 0.612726 95.8% 99.2% 7-31-95 1995 6,464,727,958 0.612726 96.6% 100.1% 7-31-96 1996 6,745,559,944 0.623726 96.9% 99.6% 7-31-97 1997 6,965,898,936 0.623726 96.5% 99.4% 7-31-98 1998 7,226,045,864 0.623726 96.2% 98.6% 7-31-99 1999 7,462,585,204 0.623726 96.3% 99.0% . 7-3140 2000 7,652,057,403 0.623726 96.2% 98.7% 7-31-01 2001 8,029,325,055 0.644175 (in process of collection) 7-31-02 Table II Delinquent Outstanding Tax Net Current Cun'ent Tax Tax Total Tax Delinquent Year Tax Levy Collections Collections Collections Tax 1992 $36,166,594 $34,393,504 $1,202,445 $35,595,949 $6,000,530 1993 37,245,587 35,678,500 1,369,806 37,048,306 5,983,259 1994 38,176,740 36,592,267 1,289,984 37,882,251 5,937,746 1995 39,611,069 38,258,807 1,410,646 39,669,453 5,630,126 1996 42,073,811 40,754,134 1,143,479 41,897,613 5,647,272 1997 43,448,123 41,928,010 1,251,909 43,179,919 5,607,397 1998 45,070,727 43,379,465 1,056,723 44,436,188 4,864,403 1999 46,546,084 44,836,825 1,256,701 46,093,526 4,855,538 2000 47,727,871 45,900,923 1,200,467 47,101,390 4,973,081 2001 51,722,865 (1) (in process of collection) '(1 ) Subject to adjustment. Outstanding Delinquent Tax as Percent of Current Levy 16.6% 16.1% 15.6% 14.2% 13.4% 12.9% 10.8% 10.4% 10.4% Fiscal Year Ending 7-31-93 7-3144 7~1-95 7-3146 7~147 ~3148 7~149 7~140 ~3141 7~142 (The remainder of this page intentionally lef~ blank) MUNICIPAL HOTEL OCCUPANCY TAXES Gross revenues from the Municipal Hotel Occupancy Tax for the past ten years have been as follows: Fiscal I st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Fiscal Year Aug.-Oct. Nov.-Jan. Feb.-Apr. May-Jul. Year 1991-1992 $ 1,005,970 $ 527,562 $1,041,433 $1,303,339 $3,878,304 1992-1993 1,027,275 582,092 877,586 1,437,415 3,924,368 1993-1994 993,866 594,548 995,258 1,427,160 4,010,832 1994-1995 1,066,169 626,420 1,014,829 1,535,489 4,242,907 1995-1996 1,064,697 731,470 1,122,221 1,621,009 4,539,397 1996-1997 1,125,538 757,649 1,100,876 1,661,337 4,645,400 1997-1998 1,161,643 780,628 1,180,221 1,799,216 4,921,708 1998-1999 1,136,818 786,748 1,230,168 1,932,282 5,086,016 1999-2000 (I) 1,550,756 1,018,592 1,550,096 2,594,767 6,714,211 2000--2001 1,568,794 1,049,181 1,552,967 2,300,496 6,471,438 (1) Rate went from 7% in 1998-1999 to 9% in 1999-2000. (The remainder of this page imentioually lelt blank) FIVE YEAR OPERATING STATEMENT FOR SOLID WASTE 2000-2001 1999-2000 1998-1999 1997-1998 1996-1997 Revenues: ,., Solid Waste Services Refuse Collection Fees: Residential $10,038,290 $9,307.978 $9,218,006 $9,636,563 $9,880,382 Commercial and Industrial 1,044,104 1.005,392 1,065.854 446,177 355,673 Landfill Project 422,701 432,024 431.508 362,571 432,557 Refuse Disposal Charges 5,980,479 7,748,334 8.607.796 8.569,841 7,338.447 Disposal Charges - Landfill Project 785,505 968,117 1,080,606 1,093,244 918,534 Refuse Collection Permits 8,878 10,603 11,231 10,484 10,190 Special Debris Pickup 89,546 11,124 3,272 4,221 2,569 Recycling 15,910 44,346 16.781 51,819 26,254 Recovery of Charged Off Accounts 359 1,062 1,645 2,531 3,004 Miscellaneous 40 596 3,041 116 0 Total Solid Waste Revenues 18.385.812 19.529,576 20,439.740 20,177,567 Expenditures: 18 967,610 Solid Waste: Solid Waste Office 805,119 487,335 459,425 477,581 431,451 Refuse Collection 6,342,967 7.807,791 7.406.606 7,108,822 6,782,431 Refuse Disposal 2,675.535 3,303.896 3,265.513 3.042.835 3,082,104 Brush Collection 1,028.192 0 0 0 0 Recycling Collection 612,601 0 0 0 0 Brush Gdnding/Composting 294,253 0 0 0 0 Cash for Trash 133,520 0 0 0 0 New Landfill Project 46,063 0 0 0 0 Landfill Regulation Compliance 31,378 581.241 296,715 10.993 697.165 Landfill Closure Costs 0 36,086 33,264 41.616 21,518 Landfill fire emergency 0 295.593 0 0 0 Street Sweeping 0 0 0 0 106,226 Total Solid Waste Expenditures 11,969;628 12.511,942 11,461.523 10 681,847 11,120,895 Excess of Revenues over Expenditures $6,416.184 $7.017,634 $8,978,217 $9,495,720 $7,846,715 (1) Since Solid Waste is a General Fund deparlment, this transfer is not reflected as a departmental expenditure in the Comprehensive Annual Financial Report due to generally accepted accounting principles. THE TAX INCREMENT FINANCING ACT General Information On November 3, 19.81, the voters of the State of Texas approved a constitutional amendment empowering the legislature to authorize by general law the issuance of bonds or notes by incorporated cities and towns to finance the development or redevelopment of an unproductive, underdeveloped, or blighted area within the city or town and to pledge for repayment of those bonds or notes increases in ad valorem tax revenue imposed on property in the area of the city or town and other political subdivisions. In anticipation of the adoption of the constitutional amendment, the Legislature, in 1981, adopted the Texas Tax Increment Financing Act of 1981 which is currently codified in Chapter 311 of the Texas Tax Code (the 'Act"). The Act has been upheld through court challenge. The assessed value of property in a reinvestment zone at the time of the creation of the zone constitutes the base value as to all political subdivisions exercising taxing power within the reinvestment zone, Tax receipts from all such political subdivisions received as a result of increased assessed values over the base value (the tax increment) are placed in the tax increment fund and may bo used to pay for capital improvements or to pay tax increment bonds or notes. Corpus Christi Reinvestment Zone No. 1 On December 29. 1982, the City Council of the City designated a portion of the City as a reinvestment zone pursuant to the Act. 331is area, officially designated as Corpus Christi Reinvestment Zone No. 1 (the 'Zone') generally includes the Bayfl'ont area in and along the central business district south to approximately Ayers Street. This area has been the subject of an intensive study by City staff leading to the preparation of the 'Bayfront Plan". After a staged review and adoption process by the Corpus Christi Planning Commission and City Council, the Bayfront Plan was officially adopted on December 29, 1982. The Act provides that the City and each other taxing unit may share in the tax increment allocation so long as the shadng basis is established by contract prior to the designation of the area as a reinvestment zone. The City, acting on behalf of the Zone, entered into contracts with the City of Corpus Chdsti, the Corpus Chdsfi Junior College District, Nueces County, Nueces County Hospital District, and the Corpus Chdsti Independent School District prior to passage of the reinvestment zone ordinance on December 29, 1982. These contracts established the basis for the participation of each taxing unit ~n the tax ~ncrement allocation. The Zone was divided ~nto subzones A and B with a tax increment sharing plan established for each subzone. In subzone A, the Zone receives only the tax increment resulting from increases in assessed value due to new construction (any construction which increases values by twenty-five (25%) percent) from the tax rates of the City and County, excluding the Hospital District, the Junior College District, and the School District. Subzone B is divided into areas B1 and B2. In area B1, the Zone receives only the tax increment resulting from increases in assessed value due to new construction on unimproved properties from all participating governmental entities. In area .B2, the Zone receives the tax increment resulting from appreciation on improved properties (those properties for which Improvements were In place as of January 1, 1982) and all tax Increment resulting from increases in assessed value due to new cormfn, m6on from all participating entities. All participating govemmentel entities receive taxes on the base values (assessed values as of January 1, 1982), the appreciation on unimproved properties, and the value of the appreciation on new construction. Reinvestment Zone Ad Valorem Taxes ZoneThe followingNo. 1 fortableFiscalSetSyear forth2000-01the netandtaxablethe mlatedaSsessedlevy.Values (assessed value net of exemp6ons) in Coq~us the Christi Reinvestment Gross Current Jurisdiction TIF Appraised Taxable Taxable Jurisdiction Taxable TIF Entity Value Value Value Lev,/' Value Lev~ NuecesCoun[y $ 202,641,158 '$ 192,866,470 -$114,354,040 '$ 403,210.19 '$ 78,512,430 $ 276,946.31 Farm to Market 202,641,158 192,560,470 114,205,282 3,126.04 78,355,188 2,146.34 Hospital District 202,641,158 192,866,470 176,801,583 403,050.38 16,064,887 36,632.58 City of Corpus Chrlsfi 202,626,164 196,065,464 115,874,848 722,449.59 79,190,616 493,932.63 CCISD (School) 202,641,158 193,587,722 177,199,483 2,770,807.11 16,388,239 257,295.26 College 202,641,158 195,920,673 178,901,051 394,311.81 17,019,622 37,522.51 ~.$1,215,831,954 $1,162,867,269 $877,336,287 $4,696,955.12 . $285,530,982 ~1,104,475.63 THE STATE OF TEXAS COUNTIES OF NUECES AND SAN PATRICIO CITY OF CORPUS CHRISTI I, Armando Chapa, City Secretary of the City of Corpus Christi, in the State of Texas, do hereby certify that I have compared the attached and foregoing excerpt from the minutes of the regular, open, public meeting of the City Council of the City of Corpus Christi, Texas held on March 26, 2002, and of Ordinance No.~_.~which was duly passed at said meeting, and that said copy is a true and correct copy of said ~xcel'pt and the whole of said ordinance. In testimony whereof, I have set my hand and have hereunto affixed the seal of said City of Corpus Christi, this 26th day of March, 2002. City Secretary of the ~ City of Corpus Christi, Texas (SEAL) JOINT MEETING OF THE CORPUS CHRISTI CITY COUNCIL AND CRIME CONTROL AND PREVENTION DISTRICT BOARD OF DIRECTORS March 26, 2002 - 12:07 p.m. Mayor Samuel L. Neal Jr.* Mayor Pro Tern Brent Chesney* Javier Colmenero* Henry Garrett Bill Kelly Rex Kinnison John Longoria* Jesse Noyola Mark Scott Ci_ty StaffPresent City Manager David R. Garcia City Attomey James R. Bray Jr. City Secretary Armando Chapa Police Commander Bryan Smith Recording Secretary Rachelle Parry CRIME CONTROL DISTRICT BOARD Linda Bridges, President Vicky Alexander Lan'y Baker John Heldenfels W.L. Hermis Butch Pool Rose Marie Soto Isaac Valencia ABSENT Danny Mora (Crime Control) The meeting was called to order in the Basement Training Room of City Hail. City Secretary Chapa checked the roll and verified that quorums of both the Council and the Crime Control District (CCD) Board were present to conduct the meeting. Ms. Bridges said that the board would make a short presentation to update the Council on the district's progress and then be available for questions. Cmdr. Smith explained that district funds were used to purchase 20 radars which have been installed in the patrol cars; another 17 will arrive in the next allotment. Assistant Chief Bung said they are awaiting one more signature to proceed with the video imaging project. Cmdr. Smith said the community policing mobile vehicle has been used in various ways around the city and there are 179 families in ease management at the Juvenile Assessment Center. The district provides funds for two case managers there. *Mayor Neal and Council Members Colmenero and Longoria arrived at about 12:10 p.m. Cmdr. Smith also discussed how district monies have assisted the city in installing a special graffiti-resistant laminate on street signs in specific neighborhoods identified by directed patrol officers. He said it is cost-prohibitive to use that laminate on all the city's street signs. Ms. Bridges addressed the district's proposed FY 2002-03 budget. She said the CCD board will hold a hearing on the budget on April 17, 2002 and adopt it during their May 8th meeting. The City Council must hold a public heating on the adopted budget on or before the June 1 lth Council -1- Minutes - Joint Meeting March 26, 2002 Page 2 meeting to meet the June 16th deadline. On or before their June 25th meeting, the Council must approve or reject the CCD budget by the July 2nd deadline. Ms. Bridges said that while the board is very positive about the CCD being renewed by the voters during the November 2002 election, they also want to ensure that they have contingency plans in case it is not renewed. Cmdr. Smith said the proposed budget essentially continues the funding of the 50 police officers (the last 10 officers will start the police academy in April). Cmdr. Smith said that when the CCD was formed five years ago, it paid for 25 civilian positions. In FY01-02, six civilian positions were cut (three dispatchers and three crime scene technicians). In order to fund the remaining 10 police officers in FY02-03, another 16 civilian positions will have to be cut: legal advisor, seven dispatchers, one crime scene technician, and seven office assistants (three fi'om the pawn shop unit and four from the telephone reporting unit). He said those reductions--which equal about $750,000--will result in three civilian positions being funded by the CCD. Cmdr. Smith said that staff had recommended retaining those civilian positions and limiting the number of police officers to 40 instead of 50. A discussion ensued about the proposed budget and Cmdr. Smith responded to Council members' questions. Assistant Chief Bung pointed out that the elimination of seven of the civilian positions will slow down the implementation of some of the CCD's technological programs. Mr. Mark McDaniel, Director of Management and Budget, said the proposed revenue for FY02-03 is about $3.8 million. Cmdr. Smith also reviewed the budget calendar. *Council Member Chesney arrived at approximately 12:25 p.m. Ms. Bridges said she had informed the Council via a letter that the CCD board unanimously supports a five-year renewal of the district through a continuation referendum in the November 2002 election. She said the board had originally discussed a 10-year renewal period but reconsidered to five years for several reasons. She said the board has budgeted monies for administrative costs associated with the election. Council Member Scott asked what would occur if the CCD renewal failed in November. City Manager Garcia said the city would begin the process of realigning the Police Department, which would have to be reduced by the 50 officers being fimded by district monies. Additional discussion ensued and Mr. Garcia pointed out that the city does not have the resources to support the district's programs. Mayor Neal asked the CCD board members to develop suggestions on how the Council can promote the district's renewal. Responding to Council Member Cohnenero, City Attorney Bray said the ballot language for the renewal election is prescribed by the statute. The Mayor said it is important to promote the many benefits of the Crime Control District. Cmdr. Smith added that the existence of the district is critical to the community policing initiative. There being no other business, Mayor Neal adjourned the joint meeting at 12:42 p.m. on March 26, 2002. -2- CITY OF CORPUS CHPdSTI, TEXAS Regular Council Meeting March 26, 2002 1:07 p.m. Mayor Samuel L. Neal Jr. Mayor Pro Tem Brent Chesney Council Member: Javier D. Colmenero Henry Garrett Bill Kelly Rex A. Kinnison John Longoria Jesse Noyola Mark Scott City Manager David R. Garcia Deputy City Manager George Noe City Attorney James R. Bray Jr. City Secretary Armando Chapa Recording Secretary Rachelle Parry Mayor Neal called the meeting to order in the Council Chambers of City Hall. The invocation was delivered by Pastor Shane Kinnisun, Parkdale Baptist Church, and the Pledge of Allegiance to the United States flag was led by Council Member Kinnison. 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 Council retreat meeting of March 15, 2002 and the regular Council meeting of March 19, 2002. A motion was made and passed to approve the minutes as presented. Mayor Neal called for consideration of the consent agenda (Items 2-13). Council members requested that Items 4 and 5 be discussed. There were no comments from the audience. City Secretary Chapa polled the Council for their votes and the following passed: Motion approving a supply agreement with Pencco Inc. of San Felipe, Texas, for approximately 2,050,000 gallons of ferrous sulfate in accordance with Bid Invitation No. BI- 0062-02 based on low bid for an estimated annual expenditure of $466,375. The term of the supply agreement 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 in FY2001-2002 by the Wastewater Department. The foregoing motion passed by the following vote: Neal, chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." Motion approving a supply agreement with R&R Delivery Service of Corpus Christi, Texas, -3- Minutes - Regular Council Meeting March 26, 2002 Page 2 for meal delivery service consisting of the delivery of approximately 126,002 meals for the Elderly Nutrition Program, Adult Protective and Title XX Meals on Wheels, in accordance with Bid Invitation No. BI-0061-02 based on low bid for an estimated annual expenditure of $134,822.14. The term of the agreement will be for twelve months with options to extend for up to two additional twelve-month periods, subject to the approval of the contractor and the City Manager or his designee. Funds have been budgeted by the Senior Community Services of the Parks and Recreation Department in FY2001-2002. The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." 6.a. ORDINANCE NO. 024807 Ordinance appropriating $206,250 from the Unreserved Fund Balance in Wastewater Fund No. 4200 for services to update wastewater infrastructure data; amending Ordinance No. 024528 which adopted the FY2001-2002 operating budget to increase appropriations by $206,250. An emergency was declared and the foregoing ordinance passed as follows: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." M2002-082 Motion authorizing the City Manager or his designee to enter into an agreement with EMA, Inc. of Horton, Texas, for geographic information system (GIS)-related services for an amount not to exceed $494,000. Services included are to update and confirm the water and wastewater infrastructure data; to design the geodatabases for the Utilities; and conve~t the data to ESRI's ArcGIS software and migrate it to the geodatabases. Funds are available in the Gas, Stormwater, Water and Wastewater Departments. The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, L0ngoria, Noyola, and Scott voting "Aye." M2002-083 Motion authorizing the City Manager or his designee to enter into an agreement with Spatial Solutions of Fort Collins, Colorado, for an amount not to exceed $51,810. Services included are to convert the basemap and parcel data to ArcGIS software and migrate it to the geodatases. Funds are available in the Municipal Information Systems Fund. The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." -4- Minutes - Regular Council Meeting March 26, 2002 Page 3 10. ll.a. M2002-084 Motion authorizing the City Manager or his designee to execute a consttuetion contract with Miller & Miller Mechanical Contracting Company Inc. of Corpus Christi, Texas, in the amount of $40,171 for the Memorial Coliseum air handler replacement project FY2002. The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kiunison, Longoria, Noyola, and Scott voting "Aye." M2002-085 Motion apprOving the application from the Art Community Center of Corpus Christi to temporarily close Cooper's Alley between northbound and southbound Shoreline Boulevard between the hours of 7:00 a.m. & 7:00 p.m. on April 13-14, 2002 for the Artfest 2002 event. The foregoing motion passed by the following vote: Neal, Cl~esney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." ORDINANCE NO. 024808 Ordinance amending Section 10-86 of the Code of Ordinances, City of Corpus Christi, regarding beach user fees; providing for penalties. An emergency was declared and the foregoing ordinance passed as follows: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." RESOLUTION NO. 024809 Resolution authorizing the City Manager or his designee to execute Change Order No. 37 with the Texas Department of Transportation in the amount of $48,535.20 for the installation of groundboxes for future street lighting as part of the Spur 3, Phase 2, Ennis Joslin Road construction contract. The foregoing resolution passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." RESOLUTION NO. 024810 Resolution authorizing the City Manager or his designee to accept Amendment No. 2 for the Federal Aviation Administration Multi-Year Grant No. 3-48-0051-28-00 in the amount of $115,658. The foregoing resolution passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kiunison, Longoria, and Scott voting "Aye"; Noyola abstaining. Minutes - Regular Council Meeting March 26, 2002 Page 4 11.b. ORDINANCE NO. 024811 12. 13. Ordinance appropriat'mg $115,658 from Federal Aviation Administration Grant No. 3-48- 0051-28-00, Amendment No. 2 in the No. 3020 Airport Capital Improvement Fund for the terminal reconstruction program. An emergency was declared and the foregoing ordinance passed as follows: Neal, Chesney, Colmenero, Garrett, Kelly, Kirmison, Longoria, and Scott voting "Aye"; Noyola abstaining. ORDINANCE NO. 024812 Ordinance amending the Code of Ord'mances, Chapter 53-Traffic, Section 53-250 - Schedule I, One-Way Streets and Alleys, Section (A-l) School Areas, by establishing a time-restricted one-way traffic pattern on Panama Dr. in the westbound d'n:ection from Kingston Drive to Carroll Lane during the school hours of Kostoryz Elementary School; provid'tng for penalties. An emergency was declared and the foregoing ordinance passed as follows: Neal, Chesney, Colmenero, Gan-eR, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." FIRST READING ORDINANCE Ordinance amending the Code of Ord'mances, Chapter 53-Traffic, Section 53-250 - Schedule I, One-Way Streets and Alleys, Section(a), by establishing a one-way traffic pattern on RiverWood Drive in the northbound direction of travel from F.M. Highway 624 (No~hwest Boulevard) to River Hill Drive at all times; providing for penalties. The foregoing ordinance passed on first reading by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." Mayor Neal opened discussion on Item 4, benefits administration module. In response to Council Member Kelly, Assistant City Manager Jorge Cmz-Aedo explained that that module was acquired with the original PeopleSoft software. Precision Task Group Inc. is being hired to implement the application. He said the use of this software in the Risk Management Department will help avoid future costs. City Secretary Chapa polled the Council for their votes as follows: 4. M2002-080 Motion authorizing the City Manager or his designee to enter into a contract with Precision Task Group Inc. of Houston, Texas, for consulting services for PeopleSoft benefits administration module implementation in accordance with the State of Texas Cooperative Purchasing Program for a total amount of $85,140. Funds have been budgeted by Risk Management in FY2001-2002. Minutes - Regular Council Meeting March 26, 2002 Page 5 The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." Mayor Neal opened discussion on Item 5, purchase of software and services. Council Member Scott asked about this purchase. Mr. Ogilvie Gericke, Director of Information Systems, explained that this software will constitute the "back-end" system for building permits, business licenses and code enfomement. City Manager Garcia said the city is in the process of transitioning from a paper system to a computer system for those applications by automating the data base. Eventually, several applications will be available on the city's interact site. Council Member Longoria asked if this will be part of the "one-stop" center for building permits and other services. Mr. Garcia said this is part of that foundation. City Secretary Chapa polled the Council as follows: 5. M2002-081 Motion authorizing the City Manager or his designee to purchase software modules, services, and vendor travel expenses for on-site services for Building Permits, Business Licenses and Code Enforcement from HTE Inc. of Lake Mary, Florida, in an amount not to exceed $102,200 for the departments of Development Services and Housing and Community Development. The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." Mayor Neal deviated fi'om the regular agenda and went to the first presentation (Item 18), a project update by the Waters Consulting Group Inc. on the development of a compensation and classification system for all city employees except Police and Fire personnel covered by collective bargaining agreements. Ms. Ruth Ann Edwards, a consultant with Waters Consulting Group (WCG), introduced Mr. Rollie Waters, CEO of the fn'm. Ms. Edwards gave a comprehensive computer presentation about the goals of the compensation study and the progress made to this point. She said the first step is to ensure that the city's system complies with federal legislation (ADA, Fair Labor Standards Act, EEO, etc.). She said WCG is also looking at how the city has established its pay structure within the organization (internal equity), market competitiveness, and budgeting issues. Ms. Edwards then discussed the project overview. She noted that WCG has been working with the City Manager, a steering comnfittee consisting of city employees, a job evaluation team and now the Council to receive feedback on different policies and objectives throughout the study. She. pointed out that WCG is tailoring the program to meet the city's individual needs. -7- Minutes - Regular Council Meeting March 26, 2002 Page 6 Ms. Edwards said that an initial planning session was held in August 2001 and much progress has been made since then: the job evaluations have been completed, the internal hierarchy of jobs has been established, and the market data has been gathev~l and applied to the individual employees. She said now WCG can develop a salary structure and they will be coming back to the Council in April to discuss how to implement it for individual employees. She said the end result will be a pay system that has administrative policies and procedures, so that not only will city officials be able to manage how employees are handled in the pay system on a daily basis, they will also have information on how to keep the system up-to-date and in line with the outside market. The WCG consultant further discussed specific aspects of the study, including the communication strategy; development of the job descriptions and the point factor job evaluations; establishment of a market policy; and key considerations in designing a custom/zed salary structure. She noted that one of the ways the city reduced the cost of the project was to have WCG train employees to complete the job description revisions once the access data base was developed. Ms. Edwards said the last part of the project will consist of the following tasks: salary policies and procedures will be finalized; movement through the pay ranges will be established for future maintenance; recommendations for pay increases will be presented; program maintenance using a specific software program will be established; and a formal presentation will be made to the Council. Responding to a question from Mayor Neal, Mr. Garcia said staff is planning a phased implementation of the results of this study. Council Member Kiunison posed a hypothetical situation about changing pay ranges. Ms. Edwards said there are several policy decisions the Council will need to make about those issues. Mr. Waters pointed out that different departments may have different issues and WCG will be making recommendations on how to handle all of them. He acknowledged that implementation of the results will be driven by the financial resources that will be available. He said WCG factors in cost-of-living differentials in different markets. Responding to Council Member Colmenero, Ms. Cynthia Garcia, Director of Human Resources, and Ms. Edwards explained specific aspects of the study. Council Member Scott asked about the benefits survey. Ms. Edwards said it will include not'only medical insurance but also paid leave and special types of pay. In reply to another question from Mr. Scott, Mr. Garcia said there are a wide range of job categories in which the city is out of balance in comparison to other markets. However, he said the question is the amount of money the city can afford to spend to bring those jobs in line with the market. He said one of the reasons WCG received such good cooperation from employees is because they expect the study to affect their compensation. Council Member Noyola asked for a list of the steering committee members and Ms. Garcia discussed its composition as well as the make up of the job evaluation team. Mayor Neal recessed the Council meeting to read the day's proclamations. Upon reconvening, Mayor Neal referred to Item 14, and a motion was made, seconded and passed to open the public hearing on the following zoning case: -8- Minutes - Regular Council Meeting March 26, 2002 Page 7 14. Case No. 0202-05. Am O. Azali and Tavbeh Mostagahgi; A change of zoning fi.om an "F-R" Farm-Rural District to an "R-IB" One-family Dwelling District on Flour Bluff and Encinal Farm and Garden Tracts, Section 19, being 7.5 acres out of Lots 11 and 12, located on the north side of Wooldridge Road, approximately 150 feet west of Windsong Drive. City Secretary Chapa said the Planning Commission and staffrecommended approval of the "R-lB" One-family Dwelling District. No one appeared in opposition to the zoning change. Mr. Chesney made a motion to close the public hearing, seconded by Mr. Kinnison, and passed. Mr. Chapa polled the Council for their votes as follows: ORDINANCE NO. 024813 Amending the Zoning Ordinance upon application by Am O. Azali and Taybeh Mostagahsi, by changing the zoning map in reference to 2.5 acres out of Lot t 1 and 5 acres out of Lot 12, Section 19, Flour Bluff and Encinal Farm and Garden Tracts, from "F-R" Farm-Rural District to "R-lB" One-family Dwelling District; amending the Comprehensive Plan to account for any deviations from the existing Comprehensive Plan. An emergency was declared and the foregoing ordinance passed as follows: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." The second presentation (Item 15) was regarding the emergency home repair grant program. Mr. Norbert Hart, Director of Housing and Community Development (HCD), said it is designed to assist home owners ages 62 or older and/or disabled individuals with no age limit with repairs to their homes. He said the program provides a means for very low-income home owners to have defects in their homes repaired which would otherwise endanger their health and safety. Mr. Hart said the grants, which cannot exceed $6,500 each, only address the following home repairs: roofmg, plumbing, electrical, heating systems, accessibility modifications, and minor slructural defects associated with those repairs. The program was started in October 1984 and it has assisted more than 2,297 elderly and disabled persons. Organizations which participate in repair and assistance programs are the Kiwanis Clubs, United Methodist Church (Sea City Work Camp), and the Corpus Christi Police Department (Community Relations Division). Mr. Hart said the annual funding for the emergency repair grant program comes from the Community Development Block Grant (CDBG) program. He said the HCD staff submits funding recommendations to the Planning Commission, which reviews all the applications and in turn makes recommendations to the City Council, which has the final approval. Total approved funding has ranged fi'om $250,874 in 1984 to $900,000 in 1997; the last five fiscal years the funding level has remained at $850,000. He also discussed the specific eligibility criteria and income limits. With regard to grant processing, Mr. Hart explained that all applicants are seen by HCD staff Minutes - Regular Council Meeting March 26, 2002 Page 8 members, who assist them in filling out the applications. The program is explained and a housing assessment form is completed to determine if the applicant has an existing or impending hazard. He said if it is determined that a hazard does not exist, the applicant's name is placed on a waiting list (which may take as long as a year); otherwise, the case is processed immediately. The average processing time for a non-hazardous grant is about two to four months from the date the homeowner's name is selected from the waiting list to the completion date. The actual construction time is 15 working days (three weeks). He said about 20 cases a month are elected from the waiting list on a "first come, first served" basis, which conforms to the non-discriminatory procedures established in the Fair Housing Act. The HCD Director also discussed the criteria for determining a hazard and characteristics of the grant program's waiting list. He noted that people who have received prior assistance make up a major ponSon of that list, which creates an additional delay for first-time applicants. Mr. Hart then reviewed statistics of the emergency repair grant program and services provided by the HCD Department. He said the grant funds required to address the applicant waiting list are $911,662. He also reviewed the contractor recruitment criteria and characteristics. Mr. Hart said staffwas recommending the following: eliminate the requirement for workers compensation; increase the program funding level to $1.2 million; revise the current program policy to reflect that applicants can only apply once for assistance; retain second-time assistance for tree hazards; and revise the retainage to $100 or 5% (starting at $2,000). He said staff intends to bring back additional information during the Corpus Christi Community Improvement Corporation annual meeting in April. Mayor Neal said staff's request for additional funding for the emergency repair grant program will have to be considered along with all the other requests during the upcoming CDBG hearing. He added that personally he would not approve eliminating the workers compensation requirement. Council Member Colmenero referred to the lengthy waiting list, and Mr. Hart said that limiting the program to first-time applicants would significantly reduce it. He added that second applications should be allowed for legitimate hazards. Responding to a question from Mr. Colmenero, Mr. Hart said the eligibility guidelines have been in place since the program's inception. Responding to Council Member Kelly, Mr. Hart said that any monies that are not spent as part of the Annual Action Plan (which includes the CDBG program) are reallocated by the Council. He said the time period to process a grant is now about nine months. He added that this year's allocation for the emergency repair grant program has akeady been expended, although some money has been reserved for true hazards. He said staff`has been working to streamline the process and now the problem is a lack of sufficient funding. Council Member Longoria said he thought that staff should make every effort to satisfy citizens' concerns about whether or not a hazard exists in their homes. Mr. Hart said staff does not physically inspect the house of every applicant unless they identify a hazard. Mr. Longoria said that if an applicant has not used all of the $6,500 in allocated grant funds, he does not consider them Minutes - Regular Council Meeting March 26, 2002 Page 9 second-time applicants. Mr. Hart reiterated that such participants lengthen the waiting period for first-time applicants. Additional discussion ensued about the application process. In reply to other questions from Mr. Longoria, Mr. Hart said that in the emergency repair program, the contractors are paid in a lamp sam at the end, while in the rehab program (such as with $50,000 contracts) contractors get draws as they proceed. City Attorney Bray said that since those contracts are for private homes and not public works projects, the statute does not apply. Mr. Hector Vallejo, HCD Program Manager, said that some small contractors are not able to participate in the program because of the workers compensation requirement. He added that currently the repair projects are done on a rotation basis with the contractors; they average about one per month. Mr. Longoria commented on the !mportance of the emergency repair grant program, saying he would like it to operate as efficiently as possible. He added that he thinks staff should request the $1.2 million to shorten the waiting period. Responding to Council Member Noyola, Mr. Jack Perales, Housing Administration Supervisor, further explained specifics of the repair program and the warranties. Mayor Neal opened discussion on Items 19, 20 and 21 regarding the Corpus Christi Beach nourishment project. City Manager Garcia explained that it is not a city project--it was undertaken by the Texas General Land Office (GLO) and the city supported them in facilitating the construction. Mr. Cruz-Aedo explained that the Council is being asked to approve the issuance of $1.3 million of anticipation notes, which are short-term securities that will be issued by the city at a rate of 4.65%. He said they are structured over six years--two years are interest-only and the remaining four years are principal and interest. He added that they are callable at any time so that proceeds from a settlement on the original contract can be used to redeem them. Mr. Garcia said the city terminated the contract with the original contractor because he was unable to complete the project to the city's satisfaction. Consequently, the city has turned to the contractor's bonding company to cure the default and staff expects to successfully conclude those discussions. He added that since the City Charter requires that all funds be available before a contract can be approved, these anticipation notes will provide the funding in the short term. Mayor Neal asked why the city cannot use the commercial paper program to fund this contract. Mr. Cmz-Aedo said that commercial paper is only used for utility projects. Mr. Jeff Lenschel, of McCall, Parkhurst and Horton, said that there is a specific statute that authorizes cities and counties to issue short-term notes of up to seven years in maturity payable from taxes, revenues or bond proceeds. He said Zions First National Bank is fully aware of the receipt of the surety bond proceeds and they are agreeable to having them taken out at any time. He said there will be a slight premiam of 1% associated with that so there will be a cost of $13,000 in addition to the $1.3 million to settle the payment. He said they anticipate an April 24th delivery of the notes. -11- Minutes - Regular Council Meeting March 26, 2002 Page i 0 Responding to Council Member Kinnison, City Attorney Bray said city staff is in negotiations with the bonding company, which has not been able to obtain a decision fi-om their corporate hierarchy yet. Mr. Garcia said the safest thing would be to not do anything until the bonding company makes a decision about what they will pay. However, staff felt this project created a hardship for the property owners on Corpus Christi Beach and the city needed to proceed expeditiously to address the problem. He added that the state is supportive of the city's actions. Council Member Kelly asked what will happen if the bonding company refuses to pay. Mr. Bray replied that the city will have a cause of action against them if they cannot reach a settlement. Mr. Kelly also asked if staff knows where the proposed contractor will obtain the sand. Assistant City Manager Ron Massey said he has indicated one source. He said the quality control measures are still in effect and staff will ensure that the sand meets the specifications before it is placed on the beach. Mr. Gareia reiterated that the previous contract was terminated because the company did not provide the proper quality of sand. Council Member Chesney said he and Mr. Kelly had questioned the previous contractor's work and he said he is still concerned about those issues. Mr. Angel Escobar, Director of Engineering Services, said the consultant, Shiner Moseley, has done an exhaustive background check on Longhorn Excavators Inc. Mr. Chesney said he wants to make sure this project is completed correctly this time and he hopes the city pursues a settlement with the bonding company. Responding to Council Member Colmenero, Mr. Leuschel said this process is the best and quickest method to complete the project. Mr. Colmenero asked that staff communicate with the residents and businesses on Corpus Christi Beach about the project. Mr. Escobar said they will continue to do so. Council Member Scott commented favorably about the funding mechanism and he asked about Longhom's experience in this type of work. Mr. Escobar said the company has completed projects that utilize a similar construction process (movement and placement of materials to meet specifications). In reply to Mr. Scott, Mr. Dan Heilman of Shiner Moseley said the level of care they used in checking references for this project is in excess of what is normally done. Mr. Escobar said that Mr. Parker, one of the owners of Longhorn Excavators, was also present. There were no comments from the audience. City Secretary Chapa polled the Council: 19. ORDINANCE NO. 024814 Ordinance authorizing the issuance of anticipation notes in the amount of $1,300,000; approving the sale of the notes and ordaining other matters related thereto. An emergency was declared and the foregoing ordinance passed as follows: Neal, Chesney, Colmenero, Garrett, Kelly, Kiunison, Longoria, Noyola, and Scott voting "Aye." 20. ORDINANCE NO. 024815 Ordinance appropriating $1,300,000 from the issuance of anticipation notes into Fund No. -12- Minutes - Regular Council Meeting March 26, 2002 Page 11 3280, Park CIP Fund, Project 130465, Corpus Christi Beach nourishment, amending Ordinance No. 024730 which adopted the FY2001-2002 Capital Budget by increasing expenditures by $1,300,000. An emergency was declared and the foregoing ordinance passed as follows: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." 21. 0M2__Q_Q2:~_6- 6 Motion authorizing the City Manager or his designee to execute a coustmction contract with Longhorn Excavators Inc. of Sugarland, Texas, for the total fee not to exceed $1,190,000 for the nourishment of Corpus Christi Beach. The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." Mayor Neal opened discussion on Item 22, convention center and arena alternative delivery methods. City Secretary Chapa said that Council Member Kelly would be abstaining from discussing or voting on this item. Mr. Kevin Stowers, Assistant Director of Engineering Services, said staff was bringing the Council the recommendation of the City Major Construction Projects Advisory Panel to proceed with an alternative delivery method. He said that method became available to Texas cities in September 2001 for architectural projects. He said the panel is recommending the use of competitive sealed proposals for the new arena and the use of a construction manager at risk for the convention center expansion and rehabilitation project. Mr. Freddie Busfillo, of Gilbane Building Company, the project manager, gave a presentation about the new delivery method. He said that about 15 months ago, city staff asked Gilbane representatives to discuss with the advisory panel members about how to maximum opportunities for local involvement. He said the panel consists of representatives of several local organizations, including the Hispanic Contractors Association, AGC, MBOC, MBDC, Hispanic and Black Chambers of Commerce and others. Mr. Bustillo said they concluded that one of the first steps was to conduct a market resource assessment of the Corpus Christi fn-ms that would have an interest in the convention center and arena projects. He said they jointly developed a contractor information request form and Gilbane gave presentations to associations about the projects. He said they developed a database of 559 finns which the city can now use and, of those, they refmed a list of almost 200 finns that are directly related to the construction industry. Mr. Bustillo said they then took the database of the 200 firms and delineated the finns' bonding capacity and largest project in 2000. -13- Minutes - Regular Council Meeting March 26, 2002 Page 12 In meetings with the advisory panel, Mr. Bustillo said they discussed three types of delivery methods: competitive bidding, competitive sealed proposal, and construction management at risk. He said that competitive bidding is the traditional method with which most public agencies are very familiar. The competitive sealed proposal is similar to it in that the owner selects an architect/engineer (A/E) to design the project. Once construction documents are completed, the owner solicits proposals from contractors to perform the work. Selection is generally based on a combination of price and other factors, that the owner deems in its best interest. He said the advisory panel is recommending competitive sealed proposal for the arena project. Mr. Bustillo also explained the concept of construction management at risk. He said it is a delivery system wherein the construction manager at risk (CMR) serves as the general contractor, assuming the risk for the construction guaranteed price and providing design-phase consultation in evaluating costs, schedule, implications of alternative designs/systems, and materialS. He said that selection is based on criteria that combine qualifications and experience and may involve fees and general conditions. He said the panel is recommending the CMR for the convention center project. Responding to Council Member Kinnison, Mr. Bustillo said that in a competitive sealed proposal, state law requires that the selection criteria be identified. With regard to the CMR process, Mr. Bnstillo said they have discussed hiring the CMR and negotiating his fee and general conditions. He said once the team has concurred that the plans are ready to be released for the subcontractors to bid and those bids come in, the city will then have the pricing information. He said the city can ask the CM firm to develop a guaranteed maximum price (GMP) before subcontractor bids have been received. Mr. Stowers said the panel and City staff are considering having a GMP for the convention center. He said if the bids from the trade organizations come in lower, the savings would normally accrue back to the city. Mr. Kinnison asked Mr. Bnstillo to specifically discuss the advantages and disadvantages of the CMR delivery system. He explained that the disadvantages are reduced adversarial relationship; difficult for owner to evaluate the validity of the GMP; and potential adversarial relationship with the A/E. The advantages are builder selection flexibility; design-phase assistance; single point of responsibility for construction; team concept; faster delivery schedule; and flexibility to change. He said coordination will be very important since the convention center and arena projects will be constructed simultaneously. He said Gilbane will be charged with many tasks, including evaluating the work sequence. In reply to Council Member Longoria, Mr. Bustillo said Gilbane was hired to serve as the city's representative with the design and construction communities. He said that in the competitive sealed proposal process, the general contractor ultimately is responsible for going out and soliciting subcontractors to bid the job to him. In addition, it is the task of both Gilbane and the advisory panel to continue to generate interest among the local businesses to get involved in the project. He added that the general contractor provides the bond for the entire project, Mr. Bustillo said that in the construction management at risk scenario, the CMR is selected before trade (subcontractor) bids are submitted. He said the panel members are recommending that -14- Minutes - Regular Council Meeting March 26, 2002 Page 13 process for the convention center project because they want an "open book" process for the trade packages. He added that the owner can determine the selection criteria. He said that in this scenario, competitive sealed proposal is the procurement method while the delivery method is construction management at risk. He added that bonding was an important issue to the advisory panel. Mr. Bustillo said that ifa subcontractor is not able to complete the work, the CMR is able to hire a firm to only complete those tasks. He added that an important factor is to have a city representative present with the CMR when he accepts the trade contractors. By doing that, neither the city nor the CMR can release that information until the award has been completed. Responding to another question from Mr. Longoria, Mr. Stowers said the CMR delivery system does not affect the design process, the schedule or the architects, who ultimately have to provide all of the drawings and specifications. However, it will change some of the "front-end" documents and staff is working with the Legal Department on that issue. In reply to Council Member Scott, Mr. Stowers said the state statute requires that the city h/re the A/E first, which is different from federal procurement. He added that staff is working with the advisory panel to ensure all of their major concerns are being addressed through the CMR delivery method. City Manager Garcia added that the city is able to use a modified CMR process because the state law which allows the city to do this did not go into effect until September 2001, after the city had started the process. Mr. Massey said the city.hired Gilbane to keep the architects on target to minimize the contract costs. Responding to other questions fi:om Mr. Scott, Mr. Stowers said one of the advantages of the competitive sealed proposal process is that it allows the city to avoid certain contractors that may be capable of bonding the project but generally do not have a good track record in terms of quality of work or cooperation. Mr. Garcia said there will be two very different types of construction going on-- a new facility (arena) and expansion/rehabilitation (convention center). Replying to Council Member Colmenero, Mr. Bustillo said one of the advantages of using the CMR process for the convention center is that he can sequence the work, which is important since conventions will still be going on throughout the construction process. Council Member Noyola asked about the database. Mr. Bustillo said the first list of companies was very long because the names were provided by the advisory panel members and some of the companies are not in the design or construction business; he reiterated that about 200 firms did respond. He said the CMR has the final word on hiring the subcontractors for the convention center project with a caveat explained by City Attorney Bray. There were no comments fi.om the audience. Mr. Chapa polled the Council for their votes: 22.a. M2002-087 Motion authorizing staffto proceed with selection of a Construction Manager at Risk for the convention center expansion and renovation project. -15- Minutes - Regular Council Meeting March 26, 2002 Page 14 The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kiunison, LOngoria, Noyola, and Scott voting "Aye"; Kelly abstaining. 22.b. ~ Motion authorizing staff to proceed with competitive sealed proposals to hire a General Contractor for the multipurpose arena project. The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kinnison, Longoria, Noyola, and Scott voting "Aye"; Kelly abstaining. The third presentation (Item 16) was regarding the Health Department's Animal Control euthanasia methods. Using a computer presentation, Mr. Cruz-Aedo said the depathnent's goal is to use the most effective, humane method of euthanization in relation to the cost. He said the current method is a carbon monoxide gas chamber and an alternative method is lethal injection of denatured sodium pentobarbital. He said the conditions of euthanasia are as follows: must cause brain death or cessation of brain activity first (then respiration and cardiac activity can cease); must cause little to no pain; must be quick and humane; and circumstances dictate the method. Mr. Cruz-Aedo said the number of animals euthanized at the Animal Control facility has decreased over the years because of a lack of staff'mg and resulting inability to pick up all the stray animals. He said that in the 1980s, 10,000 to 12,000 animals were euthanized locally and the number rose to between 20,000 and 24,000 in the late 1990s. In FY 2000-01, 14,400 animals were euthanized. He said the types of animals euthanized are dogs, cats, opossums, raccoons, birds, snakes, skunks, coyotes, foxes and others. Ctmently, the average number of animals euthanized daily is five to 10 on weekends and holidays and 50 to 100 on weekdays (depending on the time of year). The animals' ages range fi.om newborn to 20 years old, although most are between 1 and 7 years. The Assistant City Manager said there are many reasons why animals are euthanized, including that the animal is sick, injured, old, is a bite case, and is declared dangerous. In addition, many owners take their pets or their pets' offspring to the Animal Control facility because they are disruptive or destructive (barks, chews, bites); uncontrollable; unable to be placed elsewhere; or they just do not want the animals anymore. He said local governments have the following responsibilities: euthanize all animals that need it when presented (i.e., sick, injured, owner request, etc.); adopt, transfer and find homes for all healthy animals when possible; euthanize all unwanted and unadoptable animals at little or no cost, regardless of the owner; and determine the cost-effectiveness of the program. Mr. Cruz-Aedo then specifically discussed the advantages and disadvantages of both the carbon monoxide chamber and lethal injection. He said studies have concluded that animals sense when the end is imminent, which is a factor in both methods. He said the advantages of the carbon monoxide chamber are that it is less expensive with larger numbers of animals; not personal ("hands- -16- Minutes - Regular Council Meeting March 26, 2002 Page 15 oW' aspect for personnel); reduces the risk of injury to personnel; can accommodate a large number of animals in a short-time; and is preferred for wildlife and hazardous animals. The disadvantages of the carbon monoxide chamber are that it is stressful to the animals because they know what is happening; there is a delay between brain activity cessation and breathing and heartbeat cessation, sometimes resulting in involuntary reflexes (dogs howling and cats climbing the side of the cage); is offensive to many personnel; and is associated with World War II genocide. He said that based on a model provided by People for the Ethical Treatment of Animals (PETA), the costs of this method per animal are: labor - $0.116; equipment - $0.068; and supplies - $0.09, for a total per animal of $0.27 and a total in FY 2000-01 of $4,172 (for 14,400 animals). Mr. Cruz-Aedo said the advantages of injection euthanization are that it is more humane to the animal (cessation of brain activity, respiration and heartbeat occur at roughly the same time); it is less stressful to the animal (individual versus a group); and it is preferable to society. The disadvantages are that it is more labor intensive; more expensive (medicine and supplies); requires personnel to handle every animal (more stress on employees and greater risk of injury); higher turnover of employees; and wildlife pose difficult situations. Using the PETA model, the costs are: labor - $0.95; equipment - $0.031; and supplies - $2.26, for a total per animal of $3.24 and a total in FY 2000-01 of $48,276.00. Mr. Cmz-Aedo noted that recently the Animal Control facility adopted new standards for the use of lethal injection (specifically with regard to animals less than four months old), and it is still used on sick and injured animals in the field. Consequently, lethal injection is used for euthanization 15% to 20% of the time. He said that if the city were to use lethal injection 100% of the time beginning in FY02-03, a supplemental funding request would be required. He said staff estimates that the euthanasia equipment and supplies would cost $50,000 and four additional personnel would cost $150,000, for a total additional funding request of $200,000. With regard to other Texas cities, Mr. Cmz-Aedo said that most are going to lethal injection euthanasia (San Antonio, Garland, and Irving still use carbon monoxide). However, most other cities do not handle as large a population of wildlife as Corpus Christi does. He said local organizations that selectively place pets are the Gulf Coast Humane Society, Peewee's Pet Adoption and PALS, while CCARE and the Lost Pet Hotline serve in other ways. However, he noted, the city's Animal Control facility is not selective. Mr. Cruz-Aedo said this is a public policy decision of the Council, and while euthanasia is the final result of the animal overpopulation issue, them are causes that need to be addressed. He said the Council can discuss this issue further during the budget process. Mayor Neal asked how long it would take for the city to staff up to do lethal injection 100% of the time. Mr. Jeff Beynon, Animal Control Supervisor, said the current facility would not accommodate that method without some changes being made to the facility. City Manager Garcia said staff can provide the cost information to do that. Mr. Cruz-Aedo said it would take about 90 days to hire the necessary staff. The Mayor said he has asked the Animal Control Advisory Committee to meet as quickly as possible so they can make recommendations to the Council, and he has also sought input from local veterinarians regarding the related costs of total lethal injection. -17- Minutes - Regular Council Meeting March 26, 2002 Page 16 The Mayor also asked about the status of the educational effort. Mr. Beynon said the new staff person, who started working on March 25, 2002, is acclimating himself to the department's processes. He will soon begin writing grants and should begin making educational presentations to the schools in 30 to 45 days. Mayor Neal said that city staff will not be able to solve the animal overpopulation problem by themselves but they and the Council have the responsibility of bringing the necessary parties together to devise solutions. Council Member Chesney asked Mr. Beynon several questions about carbon monoxide versus lethal injection euthanasia, as well as operational issues. Mr. Beynon said that at the Animal Control Department's current staffing and funding levels, nothing else can be done to improve the city's euthanasia process. Mr. Chesney pointed out that during the Council retreat on March 15, 2002, Animal Control facility issues and improvements (including a study of the cost for euthanasia) was selected as the top new initiative for 2002. He said he has also asked staff for information on ways to answer the department's phones after 5 p.m. (even though the office remains open until 7 p.m. on weekdays). Mr. Beynon said that a phone recording is activated after 5 p.m. because it would be difficult for one staff member to handle the redemptions and adoptions in the office as well as answer the five incoming lines. He said volunteers could be helpful in the center's operation as long as they are consistently present. Mr. Chesney asked how other cities are able to afford using lethal injection exclusively on unwanted animals. Mr. Cruz-Aedo replied that up to this point, there has not been an interest by local citizens to incur those costs. Mr. Chesney also asked about spaying and neutering efforts. Mr. Cruz- Aedo said the city does not currently fund those activities. He said it did attempt such efforts in the past but they were unsuccessful due to a lack of awareness of the program. He added that staff is actively seeking grants and working with animal groups to address these issues. Mr. Cruz-Aedo said staff's recommendation is to continue to transition to the use of lethal injection and they will ask the Council to make specific decisions about that in the future. Council Member Kinnison asked what changes would need to be made to the design of the new Animal Control facility in order to accommodate lethal injection processes. Mr. Beynon replied that the architects designed the building so both euthanasia methods can be used. He said the plan was to move the actual carbon monoxide chamber to the new building. Mr. Garcia said he thinks the city should retain the chamber in order to euthanize wild animals. He said staff will bring back additional information and options for the Council to consider. Mr. Beynon noted that Corpus Christi has an unusually large amount of wild animals that need to be euthanized. Mr. Kiunison and Council Member Colmenero emphasized that the animal overpopulation problem needs to be addressed by the community as a whole through education and responsible pet ownership. Council Member Scott asked when the new facility will be open, and Mr. Beynon replied that it should be operational in December 2002 or January 2003. Mr. Scott said he agrees that it would be beneficial to lengthen the time that the phones are answered at the facility as well as to open it on Saturdays. He said he thinks spaying and neutering is important. Mr. Beynon said staff has done studies and determined that in certain neighborhoods, people will not allow their pets to be spayed or neutered even if the service is free. -18- Minutes - Regular Council Meeting March 26, 2002 Page 17 Responding to Mr. Kinnison, Mr. Beynon said that a lot of dogs that are considered strays are actually cared for to some extent, such as by people allowing them to eat out of their trash cans. However, he said there is a very large population of feral cats and wild animals. Mayor Neal said they are headed in the fight direction and the Council will give staff additional guidance once they receive input from interested organizations. Mayor Neal called for petitions from the audience. Mr. Mark Yeats, 345 Cole, said he formed the Corpus Christi Association of Airport Taxicabs (CCAAT). He said those taxi drivers pay $50 per month to work at the airport and he .estimates that they have contributed about $200,000 in the approximately 20 .years that fee has been ~n place. However, the drivers have not received anything in return, such as a designated parking space. He said the purpose of the CCAAT is to improve the quality of service provided to persons arriving at the Corpus Christi International Airport. He said the CCAAT members are concerned about where their cabs will be located once the terminal reconstruction is completed. Mayor Neal suggested that Mr. Yeats and the CCAAT take their concerns to the Airport Board. The fourth presentation (Item 17) was regarding the proposed Corpus Christi Skate Park. Using a computer presentation, Mr. Tony Cisueros, Director of Park and Recreation, explained that about a year ago members of the South Texas Progressive Sports Association approached the Council, the Commission on Children and Youth and the Park and Recreation Advisory Committee. He said the two advisory groups endorsed the concept of a skate park in some form. Mr. Cisneros said that factors to consider with a skate park include liability issues, supervised versus unsupervised activity, location (noise complaints and hours of operation), and user groups (skate boarders, in-line skaters, BMX bicycle riders). He then discussed the design elements of a typical skate park, which is usually a concrete, in-ground facility that is surrounded by a fence and is well-lit for after-dark use. It can also include a spectator area, parking lot, restrooms, office and storage facility. He showed slides of three skate parks in Colorado (Denver, Boulder and Vans Park). Mr. Cisneros said that possible locations for a skate park in Corpus Christi are: Bill Witt Park, Corpus Christi Boys and Girls Club, Dr. H.P. Garcia Park, Labonte Park, South Bluff Park, Swantner Park, and West Guth Park. He also showed several slides of the Portland (Texas) skate park, which opened in January 2002 at a cost of about $370,000. He said the skate park has video cameras with a direct feed into the Portland Police Department. The Park and Recreation Director discussed funding options, including private funds, bond funds, Community Development Block Grant funds (both reprogrammed and new project grants), city's General Fund, state grant funds, and a combination of funding sources. Mr. Cisneros explained that staff is seeking CDBG funds for a proposed new city recreation program--a city skate park Minutes - Regular Council Meeting March 26, 2002 Page 18 project. He said staff is recommending that the city partner with a recognized youth services organization and skating and biking enthusiasts to develop it and pursue negotiations to lease the Boys and Girls Club property, which is centrally located. Council Member Longoria thanked Mr. Charlie Bryan, Executive Director of the Progressive Sports Association, for his efforts to help develop a local skate park. He said they are lxying to identify a funding source and one possibility is CDBG funds. Deputy City Manager Noe said there are two ways to qualify the skate park project: by the U.S. Department of Housing and Urban Development (HI_YD) declaring it eligible by virtue of the neighborhood in which it is located; or by surveying users after the park is built to determine that 51% of them are of low or moderate income, .which would also qualify it. He said the latter option is somewhat risky because if that percentage ~s not reached, some of the funds may have to be repaid. Mr. Noe said staff is pursuing the fa'st option and they hope to have an answer fi.om HUD before the Council considers the CDBG grant requests next month. Mr. Longoria said a skate park would greatly benefit local youth. Mr. Bryan said he is a teacher and young people tell him every day that they do not have anything to do. He said that providing a safe environment for skate boarders and in-line skaters will have a dramatic impact on the community. He said they have been working on this project two years. Council Member Scott asked about the difference between cement parks and modular parks. Mr. Bryan said ifa community plans to build an outdoor skate park, it is better to use cement because in the long nm, outdoor modular parks have a huge cost associated with them for construction and maintenance. He added that many modular parks are built by comPanies that make playground equipment but are not necessarily suited for skating. He said it is preferable to use wood for indoor parks. He said the local skating association is recommending a permanent outdoor skate park. Council Member Kelly said that with regard to the Boys and Girls Club site, he thought there was a prohibition against using public money on private land. Mr. Cisneros said that is why staff is proposing that the city lease the property fi.om that organization. He added that the programming of the skate park would be separate fi.om the Boys and Gifts Club operation. Mr. Scott saidhe hopes a decision can be made soon about the skate park. Mayor Neal opened discussion on Item 23, domestic preparedness program. There were no comments fi.om the audience. City Secretary Chapa polled the Council for their votes as follows: 23.a. RESOLUTION NO. 0248 Resolution authorizing the City Manager or his designee to accept a $280,000 grant from the U.S. Department of Justice, Office of Justice Programs, in the No. 1050 Federal/State Grants Fund for the purchase of specialized training equipment for hazardous materials (HAZMAT), fire services, law enforcement, and emergency medical services (EMS) personnel. -20- Minutes - Regular Council Meeting March 26, 2002 Page 19 The foregoing resolution passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Noyola, and Scott voting "Aye"; Lungoria absent. 23.b. ORDINANCE NO. 024817 Ordinance appropriating $280,000 from the U.S. Department of Justice, Office of Justice Programs, in the No. 1050 Federal/State Grants Fund for the purchase of specialized training equipment for hazardous materials (HAZMAT), fire services, law enforcement and emergency medical services (EMS) personnel. An emergency was declared and the foregoing ordinance passed as follows: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Noyola, and Scott voting "Aye"; Longoria absent. Mayor Neal opened discussion on Item 24, annexation ordinance. There were no comments from the audience. City Secretary Chapa polled the Council for their votes as follows: 24.a. M2002-089 Motion to amend the annexation calendar by changing the second reading date for the annexation ordinance and the date of the City Council public heating and approval of zoning from April 9, 2002 to April 16, 2002. The effective date of annexation is changed from April 10, 2002 to April 17, 2002. The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Noyola, and Scott voting "Aye"; Longoria absent. 24.b. FIRST READING ORDINANCE Ordinance annexing Padre and Mustang Island tracts: annexing 9,618 feet of Padre Island Gulf beach frontage tracts owned by Jones, Walter & GLO (44.16 acres) and Padre Balli Park (Nueces County Park No. 1), (194.92 acres and 6,324 feet of Gulf beach frontage on Padre Island), in the vicinity of the Nueces-Kleberg county line; annexing Paekety Channel Park (Nueces County Park No. 2) and adjoining private land (approximately 50.01 total acres for park and private land) on Padre Island; annexing 221 acres of land south of Mustang Island State Park, comprising 4,211 feet of Gulf beach frontage on Mustang Island, owned by Nueces County; annexing 9.23 acres of land north of Zahn Road and J.P. Luby Surf Park, comprising 2,009.79 feet of Gulf beach frontage on Mustang Island, owned by Estate of Eric C. Lower; providing that each annexed tract is contiguous to the city limits of the City of Corpus Christi; providing for a service plan for the annexed tracts of land; providing that the owners and inhabitants are entitled to all rights, privileges and burdens of other citizens and property owners of the City of Corpus Christi and are subject to and bound by the City Charter, ordinances, resolutions and rules; requiring application for certificate of occupancy -21- Minutes - Regular Council Meeting March 26, 2002 Page 20 for nonconforming use; providing for amendment of the official maps of the City of Corpus Christi, providing for an effective date. Tract 1 - Jones. Walter and GLO Beach Frontages: Publicly and privately owned lands comprising approximately 44.16 acres and 9,618 feet of Gulf beach frontage, from the south- most property line of Padre Balli County Park to a point 500 feet south of the south-most property line of the Lawrence Jones property. The width of the strip extends westward from the city limit line on the Gulf of Mexico shoreline, being the 1.37-foot line above mean sea level based on United States Geological Survey (U.S.G.S.) and Geodetic Survey (G.S.) datum of 1929, to a point along the vegetation line approximately 200 feet west of and generally parallel to the 1.37-foot line above mean sea level Gulf of Mexico shoreline. Tract 2 - Padre Balli Park: Nueces County Park No. 1 (Padre Balli Park) comprising approximately 194.92 acres and 6,324 feet of Gulf beach frontage. Tract 3- Packery Channel Park: Publicly and privately owned lands comprising approximately 50.01 acres and including Nueces County Park No. 2 (Packery Channel Park). Tract 4 - Nueces County Land South of Mustang Island State Park: Publicly owned tract of land comprising 221.00 acres and 4,211 feet of Gulf beach frontage surrounded by the existing city limits and out of the William Bryan Survey 606, between the east right-of-way line of State Highway 361 and the existing city limit line along the Gulf of Mexico shoreline, being the 1.37-foot line above mean sea level based on the U.S.G.S. and G.S. datum of 1929. Tract 5 - Beach Front Property_ North of Zahn Road: Privately owned (Eric C. Lower) tract of land comprising approximately 9.23 acres and 2,009.79 feet of Gulf beach frontage abutting the city limits on the Gulf of Mexico shoreline, being the 1.37-foot line above mean sea level based on U.S.G.S. and G.S. datum of 1929 and extending approximately 200 feet westward, and between county-owned land and state-leased land at J.P. Luby Surf Park. An emergency was declared and the foregoing ordinance passed as follows: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Noyola, and Scott voting "Aye"; Longoria absent. Mayor Neal opened discussion on Item 25, golf feasibility study. There were no comments from the audience. Responding to Council Member Kelly, Mr. Cisneros said it should take about 60 days to receive the analysis. Council Member Gan:eR asked how many times this action has been taken. City Manager Garcia said that following the Council's last discussion about a new golf course, the Council directed staff to determine whether there is a market for another golf course; if there is, the second phase will be to choose a site. He said staff prepared and sent out requests for proposals for a golf feasibility study and the successful proposer was National Golf Foundation Consulting Inc. of Jupiter, Florida. He said staffis trying to move expeditiously on this project. He added that golf surcharge funds can be used for this purpose. Council Member Scott asked how long the second phase will take. Mr. Cisneros said that if another golf course is warranted, the site analysis should take another 30 to 45 days. Responding to Council Member Kinnison, Mr. Garcia said the golf course will be deemed feasible if it can make money. City Secretary Chapa polled the Council for their votes as follows: -22- Minutes - Regular Council Meeting March 26, 2002 Page 21 25.a. ORDINANCE NO. 024818 Ordinance appropriating $23,000 from the Reserve for Capital Projects in Golf Fund No. 4690 for an area golf market analysis and feasibility study; amending Ordinance No. 024528 which adopted the FY2002 Operating Budget to increase appropriations by $23,000. An emergency was declared and the foregoing ordinance passed as follows: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." 25.b. ~ Motion authorizing the City Manager or his designee to execute an area golf market analysis and feasibility study contract in an amount not to exceed $23,000 with National G01f Foundation Consulting Inc. of Jupiter, Florida. The foregoing motion passed by the following vote: Neal, Chesney, Colmenero, Garrett, Kelly, Kinnison, Longoria, Noyola, and Scott voting "Aye." Mayor Neal called for the City Manager's report. Mr. Garcia said that next Tuesday (April 2nd) the Council will have an all-day special meeting to fully review the capital improvement program. The April 9th Council meeting has been canceled but the Park and Recreation Department will be having a public hearing that night in the Council Chambers regarding the park and recreation master plan. Mr. Garcia also announced that the contractor abandoned the Omaha Street project and staff is sending notices to the surrounding property owners to inform them about it. Mayor Neal called for Council concerns and.reports. Mr. Chesney said he thought there would be an oppommity for public comment during the April 2nd meeting. Mayor Neal replied that it will consist of presentations by staff and the public will be able to attend the meeting or watch it on television but public comment will not be solicited. Mr. Chesney asked that the residents on Chenoweth and Meadowbrook streets who had expressed concerns about stormwater issues be informed of the stormwater master plan. He asked staff to follow up with the citizens who expressed their concerns during the March 25th town hall meeting and he said another one is scheduled for April 8th at Wilson Elementary School. Mr. Chesney also said it is important to emphasize to people that when the Council considers the marina development issue on April 23rd, they are simply deciding whether or not staff should proceed with negotiations with Landry's Inc. He also discussed the importance of the Crime Control District and he asked about a time fxame for the Animal Control facility plan. Mr. Garcia said if the Council approves the extra $200,000 for next year's budget, staff will begin implementation on August 1, 2002. Mr. Chesney said he wanted staff to develop a general action plan for the Animal Control facility, including a strategy for improved hours. -23- Minutes - Regular Council Meeting Mamh 26, 2002 Page 22 Mr. Chesney went on to say that he had asked Mr. Cisneros to have the Parks Board consider his proposal to develop a "Friends of the Parks" group. He asked about a prohibition against Council members appearing before Council boards and committees. City Secretary Chapa said the intent of that policy is to prevent Council members from influencing committee members. The exception is if a Council member has a personal issue he or she wants a committee to consider. Mr. Garrett asked about a letter the Council received fi-om Mr. John Torrey. Mr.' Kinnison said he sent a copy of that letter to Mr. Massey, who is working on it. Mr. Gareia said Mr. Torrey had a suggestion about an innovative method to clean the beaches, but staff has had difficulty getting Mr. Torrey to demonstrate it because it is a proprietary machine for which he has a patent pending. Mr. Noe said staffwill respond to Mr. Torrey's recent letter. He added that Mr. Torrey's proposal is to take over the whole beach-cleaning operation at a substantially greater cost. He said staff offered to let Mr. Torrey operate a pilot program to demonstrate his machine but that was not acceptable to him. Mr. Scott suggested that staffnotify the Cooper's Alley L-Head tenants about the upcoming temporary closure of Cooper's Alley street. He also said he was told about the possibility of applying for an air conditioning permit over the intemet. Mr. Noe said staffnow has the ability to use credit cards to process those permits, which is a precursor to e-government sen, ices. Mr. Scott also asked about the All American Cities award. Mr. Garcia said city staffhas been told that the first step is to organize a coalition to travel to Washington, D.C., to view the efforts of other cities before attempting to apply for the award. Mr. Scott also commented on the cleanliness of Corpus Christi's newly annexed beach areas. Mr. Garcia commended city staff for their efforts during the city's first spring break in those areas. Mr. Colmenero said the Council had received a letter fi-om the mayor of a city in China wishing to establish a relationship with Corpus Christi..Mr. Kimfison asked about a proposed ADA_ compliance project at the convention center. Mr. Noe said it can be incorporated as an additive alternate if the Council decides not to include it in the CDBG program next month. There being no further business to come before the Council, Mayor Pro Tern Chesney adjourned the Council meeting at 6:45 p.m. on March 26, 2002. CITY OF CORPUS CHRISTI, TEXAS Special Council Meeting April 2, 2002 - 9:05 a.m. PRESENT Mayor Samuel L. Neal Jr. Council Members: Javier D. Colmenero Henry Garrett Bill Kelly Rex A. Kinnison John Longoria* Jesse Noyola Mark Scott Ci_ty Staff.' City Manager David R. Garcia Deputy City Manager George Noe City Attorney James IL Bray Jr. City Secretary Armando Chapa Recording Secretary Rachelle Parry ABSENT Mayor Pro Tem Brent Chesney Mayor Neal called the meeting to order in the Council Chambers of City Hall. City Secretary Chapa called the roll and verified that the necessary quorum of the Council and the required charter officers were present to conduct the meeting. City Manager Garcia said the purpose of this meeting is to provide detailed information to the Council about the capital improvement program (CIP) and the capital budget. *Council Member Longoria arr/ved at 9:08 a.m. Mayor Neal said that since this meeting was posted as a special meeting rather than as a workshop, he will call for public comment after each presentation. The ftrst presentation was regarding the short-range and long-range CIP for the Water Department (including the water supply element). Mr. Mark McDaniel, Director of Management and Budget, gave an overview of the CIP, which staffhad presented to the Council during their annual retreat on March 15, 2002. He said staffhas identified a funding plan for the three-year, short-range CIP in the existing rate model (assuming 6% utility rate increases); however, the long-range CIP does not have an identified funding plan. Mr. Garcia said that in addition to the extensive listing of projects in the three-ring binder, staffhas also provided the Council with a prioritized enumeration of the long-range CIP for both the combined utility system and future street needs. Mr. Ed Garafia, Water Superintendent, discussed the Water Department projects. He noted that in the short-range CIP, the southside transmission main (Phases 2-5) is the largest project, comprising 46% of the total ($28.85 million). Mr. Garcia explained that about two years ago, the southside of the city experienced a crisis of sorts with its water pressure. Consequently, the South Staples Street pump station was moved ahead of schedule as a stop-gap measure pending the progression of the southside transmission main project. Mr. Garcia said the plan originally called for running a 36-inch main across the Laguna Madre to Padre Island, which would have been very expensive. However, the Council directed staff -25- Minutes - Special Council Meeting April 2, 2002 - Page 2 to explore the development of a desalination facility on the island so as to create a separate water supply there. Mr. Garafia said that will eliminate the need for the water main crossing but a line still needs to be extended to Flour Bluff. He added that that project will provide a more stable water platform across the entire city, which was further discussed by Assistant City Manager Ron Massey. Council Member Kinnison asked about changing the timing of some of the projects in order to alter the rate model (i.e., reduce the need for 6% rate increases). Mayor Neal said that if the Council is committed to the three-year funding plan provided by the rate model, projects can be substituted but the overall cost would remain the same. However, he said it is a different issue if the Council is not committed to the funding plan. Mr. McDaniel said that in order to lower the rate model by 1%, about $8.4 million of projects will have to be eliminated in Year 1. And taking into consideration the compounding effect, that equates to $21 million of projects in Year 10. There was additional discussion of the short-range CIP water projects. With regard to the water supply short- range CIP, Mr. McDaniel said the largest project is the Garwood pipeline at 49% ($10 million) followed by the Rincon Bayou pipeline at 32% ($6.5 rnillion). Mr. McDaniel then discussed the water long-range CIP projects. He said traditional funding sources include the "pay-as-you-go" CIP, commercial paper (on an interim basis), and revenue bonds. Mr. Garafia said the largest of the long-range projects are the water treatment plants at 47% ($41 million) followed by Phases 6 and 7 of the southside transmission main at 28% ($24 million). He also discussed the projects in the categories of distribution, pumping plants and other water needs. Responding to Council members' questions, Mr. Garcia said that the Texas Natural Resource Conservation Commission (TNRCC) requires that when a community reaches 75% of its water and wastewater capacity, it needs to have a film plan in place to increase that capacity. While reviewing the individual projects, Council members commented specifically about water service to customers outside the city limits and the issue of the eolonias. Regarding the water supply long-range CIP, Mr. McDaniel said that traditional funding sources include revenue bonds supported by the raw water charge component of the utility rates. He noted that funding for the initial study phases of the Garwood pipeline and the Padre Island desalination facility is included in the short-range CIP. Staff is in the process of evaluating engineering proposals for feasibility studies for the projects. Upon completion of those studies, the cost estimates and schedules will be refined for inclusion in the long-range CIP. The Garwood pipeline constitutes 90% ($88 million) of that plan and the desalination facility is 10% ($10 million). Additional discussion ensued about the raw water charge and the utility rate model. Mayor Neal called for public comment about the water projects. Mr. Bill Kopecky, 3609 Topeka, referred to the water long-range CIP. He said that in 1997 and 1998, 300,000 acre-feet of water was spilled due to rains the city could not capture because Lake Corpus Christi was full and most of the rains were coming through the Nueces Basin. He asked the Council to seriously consider constructing a pump station in the Simmons area or a water diversion at Cotulla as a long-range water supply alternative to either delay or eliminate the need for the Garwood pipeline. -26- Minutes - Special Council Meeting April 2, 2002 - Page 3 Mr. Massey said city staffhas asked the Regional Water Planning Group to look at the issue of optimization of the Nueces Basin. In addition to Mr. Kopecky's suggestions, another idea is to build a two-way pipeline between Lake Corpus Christi and Choke Canyon Reservoir. Responding to Council Member Scott, Mr. Garafia said the evaporation rate in those two reservoirs is large, as are transportation losses. He said at their closest point (at Simmons), the Nueces River is about 10 miles from Choke Canyon. Mr. Garcia said the Garwood pipeline and the desalination facility alone are not going to solve Corpus Christi's long-range water supply needs. He said the Council should have a wide range of available options. Responding to Mayor Neal, City Attorney Bray said the Simmons plan was one of 22 options in the Trans-Texas study in the early 1990s. Mr. Garcia said staffcould add the Cotulla reservoir and the reservoir optimization study (including the estimated costs) to the city's long-range water supply plan. Mayor Neal said that in addition to the Garwood pipeline and the desalination facility, the Council should also have information about piping the water from the Choke Canyon Reservoir to a water treatment facility (as opposed to Lake Corpus Christi): Mr. Scott said there are people who are opposed to that concept and Mayor Neal said future Councils will need to evaluate all of the options. Mr. Garcia pointed out that the city now has a long-term water planner, Mr. Max Castefieda, and staff can give the Council a presentation about the city's water planning strategy. Council Member Kinnison suggested that the city consider partnering with other entities. Mr. Garcia said staffis trying very hard to maintain the integrity of the city's water supply as a result of attempts by other cities to utilize it as they face their own water crises. Mayor Neal said that having a sufficient water supply is this community's number one issue. The second presentation was regarding the Wastewater Department. Mr. Foster Crowell, Wastewater Superintendent, explained that the city has six basins, service areas and treatment plants which operate independently of each other. He noted that many of the projects are necessary to meet the TNRCC's wastewater discharge permits, which regulate such things as effluent quality, plant capacity, and basin treatment capacity. Mr. Crowell then described the many projects included in the short-range CIP, with total programmed expenditures for the three years of $70.56 million. Mayor Neal asked about the status of the downtown wastewater system. Mr. Crowell replied that there have been several wastewater improvement projects in that area, including sliplining of the Water Street trunk and ongoing inflow and infiltration issues. He said that overall, the downtown area is doing well. Council Member Colmenero asked about the longevity of sliplined pipes. Mr. Crowell said that in 1982 Corpus Christi started sliplining pipes as part ora pilot project and they are still operating. He said the estimated life ora sliplined pipe is 50 to 70 years. Mr. Crowell and Mr. Escobar responded to other Council members' specific questions about certain projects and general comments about the large number of wastewater projects in relation to the amount of staff (including engineers) needed to design and construct them. -2'I- Minutes - Special Council Meeting April 2, 2002 - Page 4 Mr. Crowell then discussed the wastewater long-range CIP projects, which are categorized as follows: wastewater treatment plants - $131.8 million; litt stations and force mains - $17 million; collection systems - $16.1 million; and other related wastewater needs - $16.73 million, for a grand total of $181.6 million. City staff also responded to Council questions; there was no public comment. The third presentation was about the Gas Department. Ms. Debbie Marroquin, Gas Superintendent, explained that there are five separate gas systems: Corpus Christi (consuming 90% of the gas); Calallen/Annaville (7% consumption); Padre Island; Country Creek; and farm taps on Old Brownsville Road and Hwy. 44. She said that five of the seven short-range CIP projects pertain to the southside gas transmission main. The fi~t project (Part A), which involves crossing Oso Creek at South Staples Street, is estimated to cost $1 million and will connect the Country Creek gas system to the Corpus Christi system. The last two projects are for reservation fees and a compressed natural gas station. Ms. Marroquin also discussed the long-range CIP projects, the first three of which involve additional phases of the southside gas transmission main totaling $6.5 million. The other two are for reservation fees for years two and three for $1.4 million, for a grand total of $7.9 million. She said their goals are to connect the gas systems as much as possible and to pursue a more competitive gas supply contract. She then responded to Council members' questions. There were no comments from the public. The fourth presentation was made by Ms. Valerie Gray, Stormwater Superintendent. She discussed the three main categories of projects in the short-range CIP: minor drainage improvements- $1.13 million; bridge rehabilitation and replacement- $600,000; and rolled curb and gutter replacement - $330,000. Staff members responded to questions from the Council and there was a discussion about rolled curbs and gutters and drainage problems throughout the city. Mr. Massey noted that the stormwater master plan, which is being developed, will set drainage standards for neighborhoods. At that point, a determination can be made about how each neighborhood measures up to the established standards. He said that eventually the city will improve those areas but it will take much time and money to do so. Mayor Neal stated that any of the stormwater long-range CIP projects can be moved into the short;range plan but it would be at the expense of water projects under the city's current funding system. Additional discussion ensued about the difficulty of funding stormwater projects. Mayor Neal suggested that the Council reread a March 8, 2002 memo from the City Manager in which he forwarded the recommendations of the Stormwater Management Advisory Committee. The Mayor asked staffto provide a presentation to the Council about those recommendations. In response to Council members' questions, Ms. Gray discussed the waiting list for rolled curb and gutter improvements. Mr. Garcia stated that the city requires developers to build drainage -28- Minutes - Special Council Meeting April 2, 2002 - Page 5 ditches as part of the platting process. Mr. Escobar explained the Channel 31 pilot project and noted that some communities, such as San Patricio, have created drainage districts which other communities can utilize. He said the last major stormwater expenses were incurred as part of the 1986 bond program. Mr. Garcia said that cities throughout the state impose impact fees. Mr. Escobar said that in the next few months, staff will begin bringing items to the Council related to the sto.rmwater master plan. Mayor Neal said the development community in Corpus Christi has always resisted impact fees. Mr. McDaniel then referred to the 39 stormwater long-range CI~ projects, which total $66.8 million. He noted that those projects will be reprioritized once the results of the master plan are obtained. Ms. Gray said the master plan may even add projects to the CIP. Responding to Council Member Kelly, Ms. Gray said that Nueces County and other entities will be included in the master plan discussions. She then delineated the long-range projects. Mayor Neal said that areas south of South Padre Island Drive drain into the Cayo del Oso and Oso Creek and he asked about permitting standards for those areas. Mr. Massey said the master plan should identify the areas that probably should not be developed because of environmental concerns. A discussion ensued about the quality of stormwater runoff. The Mayor commented that the city is now paying the price for very poor stormwater planning in the 1960s and the future development of the city is directly tied to stormwater issues. There were no comments from the audience. The fifth presentation was regarding the utility rate model. Mr. McDaniel said the model currently indicates a continued need for a 6% base rate increase per year beyond the short-range CIP for all the utilities (not including the increase for the raw water charge). He said the model is intended to support a 25% working capital (25% of expenditures) for the combined utility system, which has been set as a policy issue and is considered by the bond rating agencies. He said at this point it assumes the inclusion of the entire short-range and long-range CIP as of January 2002. The Budget Director then showed a graph of utility rate adjustments since 1975. He said the average rate increases for water, wastewater and gas were approximately 4%, 8% and 3% respectively. Mr. McDaniel said that each 1% increase in the base utility rates in FY02-03 will generate the following (approximate figures): $761,766 in revenue; $8.4 million in capital improvement project capacity in Year 1 of the short-range CIP (FY02-03); $9.5 million in capacity in Year 1 of the long-range CIP (FY04-05); and $21 million in capital improvement capacity by Year 10 (FY11- 12). He pointed out that the model is a planning tool that has very many variables, such as inflation rates. He said every year it is reviewed and updated. Mr. Kinnison said the utility rate model includes every project in both the short-range and long-range programs. He said he would like staff to develop a rate model with 3% utility rate increases and then determine the amount of funding that will be available. He said at that point the Council can determine what projects will "fall out" and not be funded. Mr. Garcia said the simplest thing to do is to drop offthe unfunded stormwater projects, -20- Minutes - Special Council Meeting April 2, 2002 - Page 6 which total $66 million. However, he said the implication of not raising the utility rates 6% is that if the Council wishes to fund those projects in the future, a much more substantial rate increase will be needed. He said staff can provide all that information to the Council. Mayor Neal said staff should determine a dollar amount rather than pinpointing projects. He added that the short-range projects should continue to be funded. Mr. Gareia said many of the projects are linked together and, as certain areas are cut back, they commit to a course of action that has long-range implications. He said if the Council is considering cutting back to 3% rate increases in next year's budget (FY02-03), that will impact projects that are currently underway. Mr. Scott said staff needs to illustrate the long-term effect of lesser rate increases. Mr. Longoria said he thinks the trend has been for Councils and the general public to be more critical of 6% rate increases and he suggested that instead, staff should budget for lesser amounts. He added that staff should also show how different rate increases will affect a typical utility bill. Mr. Colmenem asked staffto also consider other funding options. Mr. Noyola said there are many people on fixed incomes who would be adversely affected by a 6% rate increase. Mr. Kinnison said the Council can lay the ground work and plan ahead for future projects and future bond elections. There were no comments from the audience on the utility rate model. Mayor Neal recessed the meeting at approximately 1:25 p.m. so the Council could attend the funeral of Council Member Chesney's father. The Mayor mconvened the Council meeting at approximately 3:20 p.m. The sixth presentation was regarding public facilities. Mr. McDaniel pointed out that staffwould be focusing on the long-range CIP projects for public facilities, public health and safety, airport, parks and recreation, and streets since the short-range CIP is made up almost entirely of utility projects (which have already been discussed). He said that traditional funding sources for public facilities programs include bond funds (general obligation, sales tax, and hotel/motel tax) and CDBG funds. Mr. Kevin Stowers, Assistant Director of Engineering Services, said there are five public facilities projects in the long-range CIP totaling $9.9 million: northwest branch library expansion; new southside branch library; Memorial Coliseum improvements; "Doc" McGregor photograph collection storage facility; and a marine archeology laboratory. He said the short-term CIP projects (including the multipurpose arena and the convention center expansion) are well underway. Mr. Kinnison asked about the Memorial Coliseum project. Mr. Stowers said that a decision has not yet been made about the functionality of the coliseum, particularly since the arena is not completed. Deputy City Manager Noe pointed out that the city has a lease with the IceRays hockey team for the use of the coliseum. The lease has a five-year renewal option and staff intends to negotiate for the IceRays to use the arena instead. Mr. Garrett asked about the Workforce Development roof waterproofmg, and Mr. Stowers said that contract, which is being funded with CDBG monies, has already been awarded. Mr. Garrett commented that that building (the old Police Department headquarters) has had water leaks for many years. There were no public comments. Minutes - Special Council Meeting April 2, 2002 - Page 7 The seventh presentation was about the public health and safety projects. Mr. McDaniel said that traditional funding sources are general obligation and sales tax bonds, State Infrastructure Bank loans, and the Padre Island tax increment financing district. Mr. Stowers said the long-range CIP includes some continuing projects that were in the 2000 Bond issue, such as Phase 2 of the public safety training facility ($10 million). Other future projects are: a fire station in the area of Yorktown Boulevard between Rodd Field Road and the Cayo del Oso - $1.5 million; Annaville fire station - $1.5 million; Police headquarters expansion (Phases 1 and 2)-$1.8 million; and four police substations - $2.5 million, for a total of $17.3 million. Mr. Stowers also referred to the ongoing short-range public health and safety projects. He said staff is working on land acquisition for Phase 1 of the police and fire training facility; advertising for the Mustang Island fire substation project will be advertised on Apffi 15th; fire station ADA compliance and coed improvements are underway; the Health Department roof repair has been completed; the contract for the construction of the new Animal Control facility has been awarded; the seawall, sidewalk and marina bulkhead improvements are currently being advertised for bids; the Elliott Landfill project is under construction; the Packery Channel project is moving forward; and the JFK Causeway elevation is also underway. Staff then responded to Council members' questions, including some regarding the police substations and fire stations. There were no comments from the public. The eighth presentation was regarding the airport long-range projects. Mr. McDaniel said that traditional funding sources include Federal Aviation Administration (FAA) grants, passenger facility charges, airport revenue bonds and airport capital reserves. He said that future airport capital improvement projects are dependent on FAA grants and discretionary fimding. Mr. Dave Hamrick, Aviation Director, said many of the CIP projects are demand-driven in accordance with the recently received airport master plan. He then described the long-range projects, which are categorized as follows: runway extension - $28.09 million; land acquisition - $11.71 million; airfield drainage - $4.1 million; airfield rescue - $2.85 million; taxiway improvements- $1.93 million, and other projects - $2.65 million, for a total of $51.33 million. Mayor Neal asked about a project in the current year known as the landside roadway system- entrance road reconstruction. Mr. Stowers replied that staff plans to open bids on April 22nd for the loop mad portion and parking lot improvements. He said the entrance road component itself has been deferred to the future. Mr. Hamrick said he does not think it will be too far in the future, which he explained. The Mayor also asked about a possible joint facility usage. Mr. Hamrick said subsequent to the Mayor's request, he has drafted a lease for the Coast Guard, which is interested in relocating to the airport. Mayor Neal also commented on the importance of homeland security and Corpus Christi's proximity to the Gulf of Mexico. Additional discussion ensued about the entrance road and the joint use airport issues. There were no comments from the audience. -31- Minutes - Special Council Meeting April 2, 2002 - Page 8 The ninth presentation was regarding park and recreation projects. Mr. McDaniel said that traditional funding sources include general obligation bonds, park trust funds, CDBG funds, state or interagency grants, and street assessment appropriations. He said the long-range CIP will be further refined pending the completion of the parks master plan, which is estimated to occur in the summer of 2002. Mr. Stowers said these programs also receive monies fi.om the Golf Course Fund, Marina Fund and General Fund. He said the long-range CIP includes improvements in the following areas: golf courses - $10 million; aquatic facilities - $8.78 million; parks - $7.98 million; marina - $5.5 million; neighborhood park playgrounds - $5 million; beaches - $2.4 million; park maintenance facilities - $1.09 million; recreation centers - $615,000; tennis centers - $495,000; and other - $605,000, for a total of $42.46 million. Mr. Kinnison requested that the new southside senior center be included in the short-range program and he inquired about the marina improvements, to which Mr. Tony Cisneros, Director of Park and Recreation, responded. Mayor Neal asked about the marina dredging project. Mr. Stowers said it is a Texas General Land Office project, which he further described. Mr. Massey added that despite the GLO project, there is a need for long-term marina dredging. Mr. Longoria asked Mr. Kelly about the CIP project for Labonte Park. Mr. Kelly said that park is where all the soccer and intramural sports are played in the northwest area. Mr. Stowers said any infrastructure at Labonte Park will be flood resistant; however, most of the improvements will be for underground utilities. Mr. Noyola asked about the timing of the Garcia athletic fields renovation and the West Oso High School tennis courts renovation. Mr. Cisneros said there are many park and recreation projects in the long-range CIP and not enough money to pay for them. He said part of the problem is deferred maintenance, which is also caused by a lack of funding. Mr. Garcia added that West Oso High School is located in a CDBG-eligible area. Mr. Scott referred to the short-range C[P, saying that one of the baseball leagues is concemed that the irrigation system project is being done during baseball season. Mr. Cisneros replied that it is simply a function of needing to get the projects done. A discussion ensued. Mr. Colmenero asked about projects at the senior centers and the HEB tennis center, and Mr. Garrett asked about South BluffPark and the out-of-service fire station on Louisiana Parkway, to which staffresponded. There was no public comment. The tenth and last presentation was regarding street projects. Mr. McDaniel explained that after the capital budget/planning guide w~ distributed, staff updated the streets long-range CIP, including adding some new projects (with pending cost estimates). Mr. Stowers said the future street needs are not funded at this time but wilt be through the next bond issue. He said staffhas made recommendations about the priority of those projects, which are categorized under new construction, reconstruction and other street-related construction. Mr. Massey explained that new construction expands capacity, whereas reconstruction takes an existing road and increases its longevity. -32- Minutes - Special Council Meeting April 2, 2002 - Page 9 Responding to Mayor Neal, Mr. McDaniel said the preliminary estimate for the streets long- range CIP is $125.39 million, but that does not include some of the new projects. Mr. Massey said the timing of some of those projects depends on how much money is invested in street maintenance each year. He added that Metropolitan Planning Organization funding is tied up for the next three years. Mr. Garcia said the estimates do not include utility costs. Mr. David Seiler said many of the city's streets have needed additional capacity and improvements for quite some time. Mayor Neal suggested that staff develop a debt model for a bond election in 2004. Mr. McDaniel said that beginning in 2009, the city will have a debt capacity of $98 million (assuming a 3% growth in valuations). Ms. Barbara Dolce, Street Superintendent, described the city's pavement management' program and Mr. Escobar further described the difference between new construction and reconstruction projects. Mr. Kinnison referred to a future bond program for streets, saying the Council should let the citizens decide how much debt they think they can handle in order to accomplish these overdue projects. Mr. Garcia said the street cost estimates are linked to the utility rate numbers. Mr. Escobar pointed out that with the Bond 2000 projects, for every $1 of street work, construction crews are having to do $1 of utility work. Consequently, there is $20 million of utility work associated with the $20 million in street work approved by the voters. Staff members further responded to Council members' questions about specific street projects. There were no comments from the public. In conclusion, Mayor Neal referred to a chart showing the impact of proposed rate increases on an average residential utility bill. He said that information needs to be disseminated. Mr. McDaniel said the reason the utility bill itself does not increase by 6% is because the raw water charge increase is only 3% and because solid waste fees (which are also inCluded) are not changing. Mr. Garcia said that on April 30th, staff will bring back the detailed analysis the Council requested. The Mayor said it is important that the Council and staff initiate an intensive community informational program about the meaning of "debt." He said debt that is properly incurred, financed and approved for a good purpose improves the quality of life in cities. He said the presentations made at this meeting illustrate the consequences of not investing in the city's infrastructure. There being no further business to come before the Council, Mayor Neal adjourned the Council meeting at 5:27 p.m. on April 2, 2002. -33- 03'20.02 18:':'1 PAX o:'t,,2o,'Z002 16;¢¢ F~AX B0~248593 ZIONS BANK' D~I-PU~LIC FIN 003 1390 C,a~way Tower Ea~t Sali Lake City, U~ah 84111 Kobert Howell i-(SOO) 500-3253 1-($01) $24-$693 $i,300,000 6.-yea~ t~nn. B~nd Co~cl Opinion #~n~g~ ~ ~ou~ 3- 1-2005, r~c~g m par ph~ ,6~% ~-14006, p~.pl~,33% 3-1-2~7 ~dp~3-1-. 2008. Subject ~ ~ a~al by ~o~ ~c ~.I 4.65% PI~¢ finnish e fonowi~ itffom~lion; lh~viou~ ~ ya~l~ audited ~ompl~ta wifh oote~ 03/21/2002 TItU 11:32 FAX 713 435 4448 COASTAL SECURITIES [~003 03 20 I.~z 18:21 N.~.X, DRI-PUFLI(' FIN VCJvm Corpus Chris, ti, Texas &ti Dayof TO THE MEMBERS OF THE CITY COUNCIL Corpus Christi, Texas For the reasons set forth in the emergency clause of the foregoing ordinance an emergency exists requiring suspension of the Charter rule as to consideration and voting upon ordinances at two regular meetings: I/we, therefore, request that you suspend said Charter rule and pass this ordinance finally on the date it is introduced, or at the present meeting of the City Council. Respectfully, Respectfully, Samuel L. Neal, Jr., Mayor City of Corpus Christi Council Members The above ordinance was passed by the following vote: Samuel L. Neal, Jr. Brent Chesney Javier D. Colmenero Henry Garrett Bill Kelly Rex A. Kinnison John Longoria Jesse Noyola Mark Scott 09.4814