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HomeMy WebLinkAboutMIN JULY 28 1998 M I N U T E S - CITY OF BEAUMONT Lulu L.Smith DAVID W. MOORE, MAYOR Bobbie J. Patterson,Mayor Pro Tem Guy N.Goodson CITY COUNCIL RETREAT Andrew P.Cokinos John K.Davis JULY 28,1998 Becky Ames Lane Nichols,City Attorney Ray A. Riley,City Manager City Clerk The City Council of the City of Beaumont, Texas, met in a special retreat session on July 28, 1998, at the Beaumont Country Club (River Room), 5355 Pine Street, Beaumont, Texas, at 9:00 a.m. Present at the meeting were: Mayor Moore, Mayor Pro Tem Patterson, Councilmembers Smith, Goodson, Cokinos, Ames, and Davis. Also present were Ray A Riley, City Manager; Kyle Hayes, Executive Assistant to the City Manager; Lane Nichols, City Attorney; and Barbara Liming, Deputy City Clerk. OPENING Comments by Mayor Invocation Mayor Moore shared in opening remarks that there are thousands of visitors here for the American Fastpitch Association's girls softball tournament with participation by 88 teams representing 20 different states. Mayor Moore said the economic impact to Beaumont is about $4 million. He said that next year we have an opportunity for 128 teams to participate in the tournament, but we will need 12 baseball diamonds to accommodate that many teams. Mayor Moore commented that Councilmember Cokinos threw out the first pitch this morning in great style. He said this is an exciting activity in Beaumont and suggested that Council recess about 11:30 a.m. and visit the Athletic Complex as a show of support to the group before lunch. He said that the Association expressed extreme pleasure with the medical support services provided the EMS and Beaumont Bone and Joint. Before progressing with items of discussion on the agenda, Mayor Moore said this meeting today should prove very valuable and asked if all items Council would like to discuss are on the agenda. Councilmember Ames confirmed that downtown Beaumont would be covered under Infrastructure Improvements. City Attorney Lane Nichols gave an invocation. Mayor Moore stated that this team of councilmembers is one of the best the City of Beaumont has ever had. He said they bring tenure and consistency and have the ability to set a tone for the next five years. He said it is valuable to hold this retreat before budget implementation, and while there are a lot of different personalities represented, this Council works well together. Mayor Moore said all issues on the agenda are important, but some will take more time than others and can be revisited, if necessary. TOPICS OF DISCUSSION I. Deregulation Issues A. Report by City Attorney City Attorney Lane Nichols provided Council with an Electric Competition Report and stated that no one knows what the outcome will be concerning deregulation. He reviewed the report with Council explaining the present operational areas of a utility company, identified them as monopolies, and Beaumont as a home rule city having original jurisdiction over electric rates. Mr. Nichols discussed deregulation, said it almost always affects the generation part of the electric business, and that transmission and distribution almost always continue to be highly regulated. He said retail competition for electric service started April 1 in California, and that one of the biggest power marketers withdrew from residential competition after one month. One of the fears associated with retail competition is that large users will leave the system of the current electric company for lower rates and the large fixed cost of the system will have to be borne by residential and small commercial customers. This has been described as "cherry picking" and very expensive for small commercial and residential customers. He said that how to handle such "stranded costs" is one of the issues that has slowed the move to a competitive market in electric power. He spoke of Gulf States long construction mode and costs involved in Riverbend. Mr. Nichols reemphasized that no one knows where deregulation will end and said the vote in the legislature today will probably be "no" because of the problems created. Secondly, Mr. Nichols reported that he and the City Manager have met with representatives from Beaumont Power and Light. Originally, they requested that the City grant them an electric franchise and institute a rate case against Entergy to require them to transmit and distribute power for BP&L. He said this approach failed in Corpus Christi, so BP&L is now requesting the City grant them a franchise. Then they will request from the PUC a Certificate of Convenience and Necessity (CCN) to serve the city. Mr. Nichols said he does not know of any overlapping CCN's being granted. He also shared information about an attorney general opinion request on whether a municipality is required to issue a franchise to a second electric utility, but said that no opinion has been rendered. B. Council Discussion Councilmembers reported meeting with representatives of BP&L and discussed the subject at length. Councilmember Goodson said he met with BP&L and came away with questions. He asked if the City granted a franchise and BP&L goes to the PUC for a CCN, what is the Minutes;7!28198;Page 2 risk to the City? Doubts were expressed about BP&L's business plan, stranded costs, involvement in rates not without risk, and waiting for legislation to be in place to provide a road map and direction. Other concerns relating to the franchise issue, rates, BP&L's business plan and financial ability were mentioned. Also their ability or plan to meet service calls, jobs leaving Beaumont, and possible competitive bidding were discussed. Councilmember Smith said that with the divestiture of AT&T, the phone service became worse and more expensive and expressed doubt that anything better would come out of electric deregulation than it did with AT&T. Continued discussion included the major investors of BP&L in addition to the local initiators, the opinion of the consortium of lawyers we have hired in the past, refusal of Council in Corpus to grant a franchise and become involved in a rate case, non-exclusive franchise with Entergy, length of time involved in obtaining an attorney general opinion, and if other cities have dual certification and how it is working. Councilmember Davis questioned possible negatives other than lawsuits of granting a franchise. The City Attorney responded that he would have to deliberate on the issue longer, but immediately could see a problem with overkill in putting in lines and wires when there is already enough, said a business could be sold after a franchise is obtained to someone unapproved by Council, and unanswered questions leading to litigation expenses. Councilmember Davis further discussed what competition would do for a city the size of Beaumont, contracting out the work and not hiring new employees, and said if a clause to sell is put in a franchise, most likely it will be sold. Mayor Moore said the issue is one of need and necessity, said our perspective should be on what affects we will feel, and spoke about the track record of rate cases. Mayor Moore said that Council needs answers to all questions raised today from the City Attorney before answering any public discussion. Councilmember Goodson said he gets phone calls from senior citizens that are disappointed with TCl and added his request to the City Attorney for an update on the TCI and AT&T dealings. Mayor Moore stated that we do not want to grant franchises that are here today and gone tomorrow, spoke of credibility and accountability and said we want to know where the consortium is at all time. II. Economic Development A. Economic Development Council Advisory Board Minutes;7128198;Page 3 A. Economic Development Council Advisory Board B. Relationship with Chamber of Commerce Mayor Moore commented that things are going well in our community as they are in the nation. He said the issue is not only development, but how Council can take aggressive steps forward to determine our city's future. He addressed the usual ways of attracting economic development as stressing service, schools, low level of crime rate and quality of life. Mayor Moore continued that he has spoken with other cities that have taken moderate amount of money and turned it into a profitable situation for their city. In discussions with the City Manager, Mayor Moore said that our property tax income basically only pays for the operation of the Fire Department. He suggested that Council look at designating 1% of our income toward establishment of an Economic Development Fund. Mayor Moore's concept would be to start with a seven-member Economic Development Council, probably with three councilmembers and four appointees. City Manager Ray Riley reviewed Beaumont's association with the Chamber of Commerce. He pointed out that our only cost for economic development has been to the Chamber and said that looking at the big picture, Beaumont's 120,000 population is the core of the 300,000 in the area. Mr. Riley pointed out that there are no major industries in Beaumont except for Betz Laboratories. All other major industry is located outside the city limits and doesn't pay property tax, but make substantial industrial payments. He said that if legislation to put annexation restraints in place is passed, the City of Beaumont could lose negotiating power and lose more than $10 million in industrial payments. Mayor Moore interjected that our voice needs to be in concert regarding this potential legislation. Mr. Riley further presented thoughts that economic development takes resources and the ability to attract industry relocation. He said our area is the hub for petrochemical industry, and various considerations are made in choosing sites to build or relocate business. The Chamber of Commerce is the only people we have working for us in this area. Further discussion included establishing an umbrella with the Convention and Visitor's Bureau for an Economic Development Council, a paid staff member, and creating a fund that would be available to give incentives for new companies relocating here. Council expressed feelings about closure of businesses, coordinating in-house efforts with the State, one-stop shopping for new businesses, selling points, creating Beaumont's own sense of identity in attracting business, and methods used by other cities. Council consensus is to renew the practice of visiting Austin and showcasing "Beaumont Day." Minutes;7/28/98;Page 4 Mayor Moore asked Councilmember Goodson to spearhead this endeavor. He said that people pay attention to those who are at their door, and said he would like the whole team to get with their constituents and take as large a contingency of people as possible to Austin for "Beaumont Day' at the Capitol. After additional discussion of the benefits received from the Chamber of Commerce and their reorganization and director position being open, Mr. Riley advised Council that this would be an appropriate point to make a choice for any changes and consider the budgeted amount for the Chamber. Other options are to form an Economic Development Advisory Committee, hire someone to work on staff and serve as the liaison or director, and not make the usual contribution to the Chamber. Council discussed other committee members that might provide useful service on an Economic Development Council Advisory Committee. Councilmember Smith voiced an opinion that the City's $50,000 is a large portion of the Chamber's budget and taking the entire amount out of the budget might be received as punitive action. The meeting recessed at 11:35 a.m. to visit the Athletic Complex in support of the American Fastpitch Association's softball tournament and for lunch. The meeting reconvened at 2:15 p.m. with all members present. III. Infrastructure Improvements Councilmember Smith asked that extending Folsom from Dowlen Road to Major Drive be given consideration. Councilmember Goodson reported that Amoco is willing to donate access for a road easement across their property. Councilmember Davis addressed residents moving from Beaumont, said that we are losing affluent families to other communities because we need another high school and junior high school in the Willowcreek area. He suggested speaking with officials of the Beaumont Independent School District. Councilmember Davis said this is a paramount issue that needs to be addressed before we can expect our population to rise to 150,000. Minutes;7!28198;Page 5 Councilmember Goodson reviewed Lumberton's fast growth and potential of problems with the influx of newcomers. He said he sees Beaumont's situation improving because those that have moved realize all other communities do not have the same amenities as Beaumont. Councilmember Davis said this is a good opportunity to improve our infrastructure and be ready for those who might be moving back to Beaumont. Schools, strategy, and possible donation of land by Amoco were further discussed. Mayor Moore spoke of the possible future need to annex property west of Beaumont in the Meeker area and asked Councilmember Goodson to keep abreast of any developments in that area. If we can make three more fields available, Mayor Moore stated that the opportunity to host the American Fastpitch Association's tournament with 128 teams is possible and questioned the possibility. Mr. Riley said improvements at the Athletic Complex have been on the Capital Improvement Program for about four years and could be ready by next year. The anticipated cost for construction of the fields will be about $1.5 million. He said that Jef Russell, the Convention and Tourism Director, described that tournament as having more economic impact in Beaumont than any other event. Adding the baseball fields would attract more adults and tournaments, would expand the complex, and Mr. Riley said that now is the time to move forward in this effort to aid tourism. Other discussion included development of exits on Brooks Road and Walden Road off Interstate 10, TXDot Funding, the number of new restaurants locating in that area, outstanding environmental reports of the old Entex building and its use, moving Municipal Court out of the Police Department being good for both, and arranging for the BISD building to be traded out with Jefferson County after removal of any asbestos. Discussion of a hockey rink and teams at the Fair Park Coliseum and other benefits that might be derived was discussed at length. Reconstruction and modernization of the Coliseum, popularity of the sport, use of the rink for area residents, development of the sport for young people and the recreational facility, cost and franchise arrangements and other uses such as corporate sponsored concerts or the Ringling Brothers Circus for the 6,000 seat facility during off hockey seasons was discussed. Other considerations included expansion of Phelan Road in front of West Brook High School to four lanes beyond the school with a turning lane into the school property, success of Jefferson Theatre renovations, meeting with Sally Loveland regarding the Beaumont Retirement Hotel, and rescheduling her visit to coincide with required public hearings. Councilmember Davis asked that when street rehabilitation is considered that Council look at the list and prioritize them to harmonize with citizen complaints. Councilmember Goodson added a Minutes;7!28198;Page 6 request to view the list before final printing and placement in Council packets. Mayor Moore also requested an update of a street rehab list for Council and commented that Laurel between Interstate 10 and 23rd Street is in bad shape. IV. OVERVIEW OF THE FY 99 BUDGET The City Manager referred to copies of the Preliminary Operating Budget, told Council that the month of August could be dedicated for budget workshops with a public hearing on September 1 or 8. Mr. Riley presented a brief overview and said that $600,000 needs to be transferred into the General Liability Fund to cover pending lawsuits and claims. Mr. Riley said the next problem area is the Employee Benefits Fund. He explained coverage provided employees, said we have done well in the past year with claims, and there has not been a dramatic increase. However, it is time to consider more participation by employees for their coverage and dependent care coverage. Council concurred that the national trend is for employees to contribute to health care coverage. Mr. Riley further explained that the City is self-insured and that HMO service is costing more than the indemnity plan. He proposed that the City of Beaumont move to a point of service program. Since some employees prefer to have a choice of doctors, a point of service program would allow them to move from the HMO plan at will. They would also have the choice of networking from one plan to another for one illness or for one member of the family. Mr. Riley said this would be a transition year with an increase in health coverage cost to employees. Councilmember Davis voiced an opinion that HMO coverage is primarily preventive care and expressed a desire for consistency with civilian and Fire and Police plan coverage. In the Debt Service Fund, Mr. Riley recommended $.025 per $100 valuation increase for Council consideration. He said we have operated for six years without any increase, but said the cost of debt service has increased from $9.3 million to $11.1 million. He said we have to consider a tax increase or a decrease in general activities, and that taxes should have been increased about five years ago. He also reported that the Clean Community budget has been transferred from the General Fund and put in Solid Waste to save the General Fund about $300,000. Mr. Riley said no increases are anticipated in Solid Waste fees, the Water Fund is running smoothly, but there may be a need for an increase next year. No new personnel will be authorized and a determination of the amount of insurance cost to be passed on to employees will be necessary. Insurance costs to employees could begin with the calendar year and salary increases might be made to coincide with that cost or on their anniversary dates. Minutes;7/26!96;Page 7 Councilmember Davis questioned percentage of employees receiving increases at anniversary dates and Council discussed ways of insuring that employees earn that increase. The City Manager explained difficulties involved with so many people subjectively performing departmental and division evaluations. Councilmember Davis expressed a desire that everyone tighten up and try to keep taxes as low as possible. The City Manager said he has been proud of all departments at times when they have raised themselves to challenges and cited improved productivity by providing better working tools and giving opportunity for an increased sense of worth to employees. Mayor Moore suggested challenging productivity and giving a "Manager's Award" quarterly. Councilmember Davis said he is interested in a breakdown of how much new money is coming in from each fund (ie hotel/motel, water, sales tax, etc.) and asked for a report. Councilmember Davis said we are boxed in to fixed costs, but to receive public support for capital improvements, discussion should begin with the media and citizens to make them aware and keep them informed Further discussion included amount of any tax increase request, innovative use of funds, what infrastructure improvements and capital improvement projects could have been accomplished if previous tax decreases had not been made, record of tax rates in the past nine years, and completed capital improvements stimulating revenue. Council enumerated the projects that have been completed in recent years, said that capital improvements such as Concord Road and Folsom Road need to be accented as positive advances, and Mayor Moore suggested preparation of a strategy sheet listing projects and funds, said we have to pay for progress, but we are looking for a return. He said we need to be ardent in giving the same level of service and quality of life to every respective neighborhood. V. WATER ISSUES Council briefly discussed support in guarding the natural water resources of Southeast Texas, possibility of being present in Austin to keep aware of any legislation or action and scheduling a meeting with Mark Stiles and Al Price to share ideas and information with Council. Councilmember Goodson encouraged each councilmember to keep aware of the issue. VI. VACANCY OF CITY CLERK Mayor Moore asked that this item be placed on the next City Council meeting agenda for discussion in executive session Minutes;7/28/98;Page 8 VII. YOUTH EMPLOYMENT Mayor Moore said that he hopes to enlist the support of the Superintendent of Schools and Council to encourage other partners such as corporate members to become sponsors for next summer's program. He reported that federal monies will not be available next year for the program, and we will need to be innovative and progressive in promoting the summer youth work program. Mayor Moore asked that this subject be discussed again at a later date and announced that there will not be a meeting next week. There being no further business, the meeting adjourned at 5:02 p.m. ftc-01"A'- Mayor David W. Moore Barbara Liming, Deputy City glerk Minutes;7/28198;Page 9