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MIN JUL 30 1985 REGULAR SESSION CITY COUNCIL - CITY OF BEAUMONT HELD JULY 30, 1985 - 1:15 P.M. BE IT REMEMBERED that the City Council of the City of Beaumont, Texas, met in regular session this the 30th day of July, 1985, with the following present: HONORABLE: William E. Neild Mayor Joseph D. Deshotel Councilman At Large G. Wayne Turner Councilman At Large Nell Pruitt Weisbach Councilman, Ward I Mike Brumley , Councilman, Ward II Audwin Samuel Councilman, Ward III David W. Moore Councilman, Ward IV Karl Nollenberger City Manager Lane Nichols City Attorney Myrtle Corgey City Clerk -000- The Invocation was given by Major Harry Powell of the Salvation Army. The Pledge of Allegiance was led by Mayor Neild. -000- 00 proclamation was issued: "Texas Agriculture Day in Beaumont" - August 1, 1985. -000- The following items of the Consent Agenda were considered: Approval of the Minutes of the regular City Council session held July 23, 1985; Resolution 85-223 appointing Councilmember Nell Weisbach as Council Liaison to the Beaumont Art Museum for fiscal year 1985-86; Resolution 85-224 authorizing purchase of Parcel 240 for the M. L. King, Jr. Parkway/Spur 380, Phase III Project, 5,000 square feet out of Lots 5 & 6, Block 5, Blanchette 2nd Addition from Roosevelt and Katherine Howard, Jr. , at $25,500.00 and conveying a deed of the property to the State; and Resolution 85-225 authorizing Texas Commerce Bank - Beaumont, N.A. to pledge $1,500,000 and to release $1,500,000 in securities, Allied Bank, Beaumont, to. release $1,000,000 and MBank of Beaumont to release $400,000 in securities pledged as collateral for City deposits. The Consent Agenda was approved on a motion made by Councilman Turner and seconded by Councilman Samuel. Question: Ayes: All Nayes: None -165- July 30, 1985 Resolution 85-226 approving the Preliminary Official Statements for $15.7 million ($11.0 million for Streets and $4.7 million for storm drainage improvements) in General Obligation Bonds, Series '85 and $4.75 million $2.73 million for landfill improvements, $600,000 for Golf Course improvements and $1.42 million for water and sewer improvements) in Certificates of Obligation, Series '85 and Ordinance No. 85-75 authorizing publication of notices of intent to issue and sell Certificates of Obligation were considered: ORDINANCE NO. 85-75 ORDINANCE AUTHORIZING PUBLICATION OF NOTICE OF INTENTION TO ISSUE AND SELL CERTIFICATES OF OBLIGATION. COUNCILMAN SAMUEL: In reference to the sale of bonds, I find it very unfair to many of the citizens of Beaumont paying taxes for capital improvement in the City in that today we have a number of items for construction or reconstruction but eight of them are dealing with street improvements, five of those are toward the west end area, two are for the downtown area, one is for the South Park area. There are many areas . . . there are many streets in the north end of Beaumont that are in desparate need of repair but yet and still we continue on with projects in one particular area. I feel that it is very unfair to those citizens that are paying taxes for the capital improvements. A discussion was held relative to the projected amount of money needed for the rehabilitation of College Street and the possibility that both the College and Gladys projects would be completed under budgeted amounts. The discussion continued with interest being expressed by some members of Council in earmarking any excess funds for the rehabilitation of Helbig Road Resolution 85-226 and Ordinance No. 85-75 were approved on a motion made by Councilman Weisbach and seconded by Councilman Turner.. Question: Ayes: All Nayes: None -000- Ordinance No. 85-76 amending the budget by adding twenty-five (25) additional personnel positions to provide for Fleet Maintenance activities (City assumes operation effective August 1, 1985) was considered: ORDINANCE NO. 85-76 ENTITLED AN ORDINANCE AMENDING THE BUDGET OF THE CITY OF BEAUMONT FOR THE FISCAL PERIOD COMMENCING OCTOBER 1, 1984, BY ADDING 25 ADDITIONAL PERSONNEL POSITIONS; PROVIDING FOR SEVERABIITY AND PROVIDING FOR REPEAL. -166- July 30, 1985 Ordinance No. 85-76 was approved on a motion made by Councilman Deshotel and seconded by Councilman Samuel. Question: Ayes: All Nayes: None -000- Resolution 85-227 accepting a bid for Morgan Park from Ruben Sastre, Lombardo Tree Service in the amount of $15,851.00 ($250.00 per acre for the 63 acre tract) and rejecting bids received for Spindletop Park was approved on a motion made by Councilman Brumley and seconded by Councilman Turner. Question: Ayes: All Nayes: None -000- Councilman Moore asked that the ditch in front of the residence of Mrs. Joan Stewart, Virginia at Opal Streets, be looked at to determine if the project has been completed. He said Mrs. Stewart is unable to maintain the ditch because of the steep grade and requested help. Councilman Weisbach questioned status of assessment of the safety problems at Riverfront Park and solutions to those problems. COUNCILMAN TURNER: I don't know if all the Council members have had a chance to review the memorandum from the City Attorney that was on your desk when you went upstairs. It was in regard to the petition that was taken out from the City Clerk's Office a couple of weeks ago relative to Water & Sewer rates and revising repealing the two most recent rate increases and I think it would be good for the City Attorney to express that opinion at this point in time and give us a point of clarification. I know those petitions have not come back in. I don't know that they are going to be presented to us today, but I do not want people out there working very hard, very diligently, if in fact this legal opinion has not been given to them in a pubic forum. So, would you . .? CITY A'T'TORNEY NICHOLS: I'd be glad to if Council wishes it. The . . . normally, initiative, referendum, recall are cornerstones of representation of democracy and the very core of what we do. I got a copy of the proposed - I goes it would be a referendum petition - and I saw that it was calling for the repeal of ordinances that set water and sewer fees, garbage and trash rates and sanitation rates and began to think that there might be some problems with that because of the bond indentures. That's to say the covenants that the City has made to the people who hold the revenue bonds and started looking at that and looked at some cases and I've come to the opinion that is is not the property subject of a referendum - that it would be an unconstitutional act to allow the electorate to pass an ordinance that controls the fees that the Council has promised the people that hold their bonds that they would set in such a manner as to provide proper revenues for the reclaiming of those bonds - all of them - plus the necessary expenses of running those systems. -167- July 30, 1985 MR. NICHOLS continued: All of our bond indentures - revenue bond indentures - contain covenants that do two basic things. The first one is they tell the people who purchase our bonds, City Revenue Bonds, that they are revenue bonds and that the citizens cannot look to the taxing power, the full faith and credit of the taxing power of the City, for theh payment of those bonds. That is the first thing they are told and later on the City covenants and agrees, I guess I can read it, it's kind of long, but that the City will fix and maintain rates and then they will collect those charges - not just fix them and maintain them. They will go out and collect those charges and they will set them so that they provide net revenue sufficient to pay back all the bonds and all the expenses of operating those systems. There are cases dealing with this subject specifically that I've sited in my memorandum that I won't necessarily site to you that make it quite clear that this is not the proper subject of an initiative or referendum petition; that to do this would violate two constitutional provisions - one in the U. S. Constitution and the other in the Texas State Constitution that prohibit the passage of any laws that impair the obligation of contracts. We have these contracts, they exist. These ordinances, the passage or repeal of these ordinances would effect thos obligations and thus would be invalid and unconstitutional. I'll try to answer any questions. COUNCILMAN DESHOTEL: I guess so, Lane. In a situation where it is alleged by the group that have the petitions out where the rates in fact are more than necessary to cover the obligations on the contract and that's the question that I am having as to the validity of it. Is that an important factor? MR. NICHOLS: It was not in the cases I read. The specific question was in the City of Irving and there was a provision in their Charter that provided that ad valorem taxes could not increase more than 6 percent a year. The Court said not withstanding the fact that provision this year didn't effect any of their bonds, that provision existing in the Charter could effect those bond covenants and because of that possibility, it was an unconstitutional act. So, it is the power that is the problem, not the specifics of this ordinance but the power to take over something that Council has promised the bond holders that they would take charge of and that is the setting of rates sufficient to pay back the bonds. I don't think we would ever want people out there wondering whether they should buy City of Beaumont revenue bonds because at some point in time folks may come in with an initiative petition that did away with completely with all that revenue. You'd never sell any more so the Courts, I think quite wisely, have seen that that's the sort of thing that needs to be protected. -000- -168- July 30, 1985 Mr. Raymond Eaglin, 3990 Washington Boulevard, addressed Council to complain about receiving a statement from the City in the amount of $60.00 charging him for cutting the ditch in front of his property. Mr. Eaglin stated he felt it should be the City's responsibility to maintain all ditches. Mrs. Delia Harrington, 815 Willow Street, addressed Council to complain about trees and bushes growing next to utility poles. Mrs. Harrington also spoke in opposition to contracting out services for garbage and trash pickup and asked that the Sanitation Department be kept. Mr. Lindsey Walker, 2537 Calder, addressed Council to say that to observing public reactions to decisions made by the Beaumont Independent School District Board of Trustees, Beaumont Art Museum Board of Directors and City Council, . . . it seems to me that we are not affording the public an ample opportunity before the act to voice their opinion. . . " Mrs. Jessie Cooper, 446 Georgetown, addressed Council to question the constitutional clause sited in the legal opinion regarding the initiative petition being circulated to repeal ordinances establishing rates for garbage and trash collectrion, amending water and sewer rates and providing sanitation fees and regulations. -000- The session was recessed before continuing with the Workshop Session. Before Workshop Session began, the regular session was reconvened to call an Executive Session, pursuant to Section II of the Texas Open Meetings Act, to be held immediately following the Workshop Session. -000- I, Myrtle Corgey, City Clerk of the City of Beaumont, Texas, certify that the above is a true copy of the Minutes of the regular City Council session held July 30, 1985. Myrtle Corgey City Clerk -169- July 30, 1985