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HomeMy WebLinkAboutMIN OCT 13 1998 M I N U T E S - CITY OF BEA UMONT Lulu L.Smith DAVID W. MOORE, MAYOR Bobbie J. Patterson,Mayor Pro Tem Guy N.Goodson CITY COUNCIL MEETING Andrew P.Cokinos John K.Davis OCTOBER 13,1998 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 regular session on October 13, 1998, at the City Hall Council Chambers, 801 Main Street, Beaumont, Texas, at 1:30 p.m. to consider the following: OPENING * Invocation Pledge of Allegiance Roll Call * Presentations and Recognition * Public Comment: Persons may speak on scheduled agenda items Mayor Moore called the meeting to order at 1:34 p.m. The Reverend Robert Turnage, Victory Assembly of God Church, gave the invocation. Master Chief Jason Lynn, Operations Officer Stephen Hebert, and Administration Officer Lovie Eli, members of the Junior ROTC Unit from West Brook High School, presented the colors and led the pledge of allegiance. 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; Lane Nichols, City Attorney; and Barbara Liming, Deputy City Clerk. "Presentations and Recognitions Lieutenant Commander L. A. Franz, Naval JROTC instructor at West Brook High School expressed appreciation to Mayor Moore and Council for the opportunity to speak about the ROTC program. He said there are three units in the Beaumont Independent School District. There are 138 cadets at West Brook High School; 170 cadets at Central High School; and 114 cadets at Ozen High School participating through a new satellite program. Lieutenant Commander Franz announced that on Saturday, October 17th from 9:00 a.m. to 4:00 p.m., West Brook High School will host a drill competition. About 800 or 900 young people from 23 other schools in Texas and Louisiana will participate in drill, color guard, marksmanship, athletics, tug of war and relay races. The public is invited to join the audience in witnessing the various competitions. Two proclamations were issued: "Julie Rogers Gift of Life Day," October 15, 1998 (free mammogram program); and a proclamation recognizing "Mr. Albert Pierre," as an outstanding individual and serving as an employee of the Beaumont Transit System for 32 years without a preventable accident occurring. *Public Comment: Persons may speak on scheduled agenda items. Sergeant Paul Perritt of the Beaumont Police Department addressed Council to request Council reject Agenda Item No. 2 authorizing a contract for a Health Maintenance Organization program to NYLCare. He cited some employee complaints about losing their doctors, pediatricians, or gynecologists due to them leaving NYLCare because of dissatisfaction. Sergeant Perritt spoke in favor of other providers and a point of service plan. He quoted from an article in the Beaumont Enterprise about doctor drop-out from the Aetna (owner of NYLCare) program in the Dallas area, leaving 26,000 patients without a doctor. He said NYLCare has received fines from the government for administrative violations. Another quote was presented from the October 5th edition of U. S. News and World report ranking HMO's in Texas indicated that on a scale of 0 to 100, NYLCare rated 1. Sergeant Perritt closed his comments by again requesting Council reject the bid and referring to preference for a point of service plan. Councilmember Ames questioned the number of employees expressing dissatisfaction with NYLCare, and Councilmember Smith suggested suspending the three-minute time limit, since this item would affect so many employees. Sergeant Perritt said about seven civilian employees besides Police personnel have expressed dissatisfaction with NYLCare, and stated that he didn't have a lot more to add, but thinks a point of service plan is a good consideration. *Consent Agenda The following consent agenda items were considered: * Approval of the minutes of the regular meeting held October 6, 1998; * Confirmation of committee appointments - No appointments made. A) Approve approve a payment to West Texas Gulf Pipe Line Company for reimbursement of adjustment costs on their pipeline crossing FM 364/Major Drive related to the Major Drive Project ($66,124.85 with 80% reimbursement to City by TXDOT) - Resolution No. 98-280 B) Approve an annual contract for providing medical laboratory services for the Beaumont Public Health Department (with St. Elizabeth Hospital for estimated annual expenditure of $22,087.50) - Resolution No. 98-281 C) Approve the acquisition of property needed to provide a setback from the James Guffy ditch and Fire Station No. 6 (0.1377 of an acre out of Lot 15, Block 1, Wescalder Fig Acres Addition from Mrs. Pauline Nuchia in the amount of$6,000) - Resolution No. 98-282 D) Approve a License to Encroach Agreement (with Diamond Shamrock Refining and Marketing to encroach into Prutzman Road right-of-way 206 feet west of the intersection of Minutes;10/13/96;Page 2 Prutzman Road alley adjacent to Lot 3, Block 2 of the Westgate City Addition for installation of a groundwater monitoring well) - Resolution No. 98-283 E) Approve an agreement with Chevron Pipe Line Company (for the City to construct a drainage ditch on the City's thirty-foot underground utility easement on Chevron's property at Lot 16, Block "E" out of the Mayfair Second Addition) - Resolution No. 98-284 Councilmember Smith moved to approve the Consent Agenda. Councilmember Ames seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tem Patterson, Councilmembers Smith, Goodson, Cokinos, Ames and Davis Noes: None GENERAL BUSINESS 1. Consider approving a contract for the construction of the Concord Road Pavement Widening Project - Phase I Councilmember Davis moved to approve Resolution No. 98-285 authorizing a contract with Hart Construction, Inc. in the amount of $2,692,324.26 for Phase I of the Concord Road Pavement Widening Project, from IH-10 to St. Helena Avenue at Concord. Councilmember Ames seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tem Patterson, Councilmembers Smith, Goodson, Cokinos, Ames and Davis Noes: None Mr. Riley added that this contract is for Phase I, but said preparations for plans and specifications for Phase 2 and 3 are moving forward and by January, both projects will possibly be ready for Council review and the bid process. 2. Consider approving a contract with NYLCare Health Plans of the Gulf Coast, Inc. for a Health Maintenance Organization program The City Manager explained the history of medical plans offered to City employees. Since 1986, a standard indemnity plan has been in effect. This plan basically has a $250 deductible clause, 80/20% co-pay, with a $2,000 cap or 20% of a $10,000 limit. The only change in that plan was in 1989 when the City became self-funded and employed a third party administrator. Mr. Riley further explained a decision made three and one-half years Minutes;10/13198;Page 3 ago to add a choice for employees of an HMO, which is designed as a wellness program. In that program, employees choose a primary care provider with a network of specialists that can be recommended and referrals may be made to different hospitals. Cost savings of this plan is the advantage for employees. There is no deductible and the cost per doctor office visit is $10, and the co-pay for an in-patient hospital visit is $200 and $25 for an out- patient hospital visit. They are limited to the doctors that belong to the plan and the hospitals under contract. This year the City tried to initiate another alternative point of service plan to improve on the biggest complaints about an HMO plan. The point of service plan cost remains the same as he HMO down to the point when one might choose to leave the network and choose a doctor or hospital not enrolled in the plan. The cost to employees than reverts to the 80/20% co-pay, with all the other variables. However, the bid price was cost prohibitive. The idea of a point of service plan was abandoned because of cost since there is already a choice between the indemnity plan and the HMO. Mr. Riley stated that NYLCare's bid this year has been reduced 12% from their bid of last year. Coverage for an employee only would cost$127.71; an employee and one dependent would cost $307.80; and for an employee and two or more dependents, the cost would be $438.06. He stated that staff shares concerns about health care, but employees have the choice of the indemnity plan or the HMO plan. A recommendation is made is accept the NYLCare bid based on price and meeting minimum standards. Councilmember Smith confirmed with Mr. Nichols that she would not have a conflict of interest in voting on this item because she is a medical director for Blue Cross/Blue Shield of Texas. A lengthy Council discussion raised questions relative to the network of providers, the point of service plan being more expensive than an HMO plan, cost difference between the HMO and indemnity plan, physician drop-out, employee enrollment period, possibility of changing plans during the one-year commitment, limitation of specialists on the HMO plan, the limited number of bids received, and financial savings if only the indemnity plan is offered. The City Manager stated that the basic problem is that the insured does not have control of his health care with an HMO. In the indemnity plan, the employee has to meet a deductible and pay 20% of the medical costs. For some, it is a catch-22 situation. Possibly in the future, more employees will choose the indemnity plan because of the limited choice of providers. Council further discussed reasons for lack of HMO bidders, the desire for Council to receive a copy of the bidders HMO plan document and physician provider list, increasing health costs, quality health care versus bottom line cost, the Requests for Proposals stating Minutes;10113198;Page 4 guidelines regarding physicians and distance to providers, the effect of an HMO on the Fire and Police Departments, and the effect on the City's budget. After an intense discussion, Mayor Moore offered Sergeant Perritt another opportunity to comment before the vote. Sergeant Perritt said it is not the plan, but the administrator that is the problem and questioned employee opportunity to switch from one plan to another. It was explained that unless something changed significantly relative to the PCP, an employee may not move to the indemnity plan. A choice is made to remain with a plan for a year. Sergeant Perritt also questioned how NYLCare could offer a 12% reduction from their bid of last year. Mayor Moore spoke of employees having an opportunity for change of plans. Councilmember Davis moved to approve Resolution No. 98-286 authorizing a one-year contract, effective January 1, 1999, with NYLCare Health Plans of the Gulf Coast, Inc. at a projected monthly premium cost of approximately $257,155.77 to provide the City's managed care plan. Councilmember Goodson seconded the motion on the basis that employees be notified of the right to change plans under certain parameters. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tem Patterson, Councilmembers Smith, Goodson, Ames, and Davis Noes: Councilman Cokinos Councilmember Goodson added that Staff does a good job with the health care issue, but said Council needs a higher knowledge level. He suggested that a committee be formed, possibly of informed employees such as Sergeant Perritt, to work collectively with members of Council to get a broader perspective and better understanding of the issue. (Mayor Moore left the Council Chambers at 3:03 p.m.) 3. Consider approving two financing agreements with Banc One Leasing Corporation for the purchase of three jet rodder trucks and one fire pumper Councilmember Smith moved to approve Resolution No. 98-287 authorizing execution of a financing agreement with Banc One Leasing Corporation in the amount of 57 basis points below the 6% Coupon Treasury Note maturing July 2002, as published in the Wall Street Journal on the date of closing (due to MSG declining to abide by contract authorized by R- 98-199 passed on August 11,1998). Councilmember Davis seconded the motion. MOTION PASSED. Ayes: Mayor Pro Tem Patterson, Councilmembers Smith, Goodson, Cokinos, Ames, and Davis Noes: None Minutes;10113198;Page 5 4. Consider approving a contract for the Flowers Street Pavement Widening Project Councilmember Smith moved to Resolution No. 98-288 authorizing a contract with Treyco Contractors, Inc. in the amount of $89,234.90 for the Flowers Street Pavement Widening Project. Councilmember Davis seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tem Patterson, Councilmembers Smith, Goodson, Cokinos, Ames, and Davis Noes: None (Mayor Moore returned to the Council Chambers at 3:06 p.m.) 5. Consider adopting a resolution supporting the construction of ramps and frontage roads near Brooks Road and IH-10 (Councilmember Smith left the Council Chambers at 3:07 p.m.) Councilmember Ames moved to approve Resolution No. 98-289 supporting installation of ramps at Brooks Road and the IH-10 frontage roads from Walden Road to FM 364. Councilmember Goodson seconded the motion. MOTION PASSED. Ayes: Mayor Moore, Mayor Pro Tem Patterson, Councilmembers Goodson, Cokinos, Ames, and Davis Noes: None OTHER BUSINESS *Presentation related to the Helen Ruth Daniels Apartment Project and the use of Section 108 funds (Councilmember Smith returned to the Council Chambers during the early remarks of the presentation.) Mr. Josh Allen thanked Council for the opportunity to present this project and introduced individuals in the audience that support the projects. Among those present were Sheriff Mitch Woods, Commissioner Jimmy P. Cokinos, Judge Skip Hulett, and the Reverend Daniels. Minutes;10/13196;Page Mr. Allen reported that the formal name of the non-profit organization has an acronym of YEARS, Inc. which is the Youthful and the Elderly and Retired Seniors, Inc., and will be doing business as the Helen Ruth Daniels Development. He explained that this is a vision of the Reverend Daniels for redeveloping the area around the church. Most of the homes in the area have been removed or are in poor condition, and this project will fit well in that environment with the redevelopment of the commercial area around the Martin Luther King, Jr. Parkway, similar that which has been achieved in the Charlton-Pollard Neighborhood Revitalization and downtown development. He said there would be 32, 1-bedroom apartments. All would be handicap accessible, fenced, and with electronic gate access for security. They will be built in quadro-plex, which will reduce construction costs and provide some autonomy to the units. Each unit will be about 486 square feet. Also, on a second site, there will be 18, 3-bedroom, 1,080 square feet town homes and 16, 2-bedroom town homes with 896 square feet each. The total projects totals about 59,360 square feet of rentable space that meet housing codes and handicap accessibility requirements. Daniels Construction Company will serve as construction manager and Mr. Bill Nelson is the architect. Total development cost is approximately $2.1 million, and Mr. Allen stated that the request is for City participation in Section 108 funds in the amount of$1.2 million. Chase Bank, Bank One, and Community Bank are interested in participating in the project and have outlined a proposal and projection of costs, as outlined in part of Exhibit "A." Mr. Allen referred to the plans given to Council to describe the units and elevation of the town homes. He said this is a very exciting project that is community supported and will stimulate more development in that area. Mr. Allen volunteered to answer questions might have. Questions included the type of units, amount of equity in the project provided by the developer and management. Mr. Allen said the rent levels are for the lower income, the non-profit developer, YEARS, Inc., is asking for the Section 108 funds to be considered as their equity, and a third-party will manage the development. Councilmember Davis raised the question of the grant amount being greater than the loan amount and suggested further consideration be given to the City's portion of the total being more than that of the banks. Mr. Allen consented that further discussion could be held and spoke of the 15 year amortization being a factor that could be renegotiated. Councilmember Goodson spoke in favor of redevelopment of the area and said it is the first one not bring forth private dollars, and in this project, the City would essentially be representing that equity. Councilmember Goodson also questioned for what the accumulated money in the non-profit organization would be used or what it represents. He spoke about the possibility of future sale of the development and the affect it might have on the City's grant funds, and spoke in favor of a higher degree of public/private partnership Minutes;10/13198;Page 7 before a Section 108 hearing is held. He addressed the City's duty to answer HUD inquiries and to constituents regarding such an investment. Mayor Moore commended the presentation and project, and said the City has "philosophically been a body that has always looked to leverage our CDBG funds or Section 108 funds with other opportunities of private capital investment." He said that the City like to see the equity or investment coming forward and playing a part inside the project. He clamed that is the reason there are questions being raised about equity, partnership, and other levels of investment by entities. He added that private business has to be considered and not leave them with a feeling of unfair competition. Mr. Allen commented that an endeavor is being made to meet a community need and addressed HUD guidelines relative to this type of loan. He spoke of this being their first step in the project and the relationship with the banks. Mr. Allen said he could react quickly to a meeting with the City Manager and banks and come back with a palatable proposal. *Presentation concerning proposed purchase of TCI Cablevision by AT&T and merger with Time Warner Mr. Mike McKee, Area Manager of TCI Cablevision of Texas, introduced Susan Patton, the Director of Public Affairs for Time Warner Cable. He said the Mr. John Neal, President of the Southwest Division of Time Warner had planned to attend today's meeting, but has a back surgery pending for tomorrow. Mr. McKee said that TCI Cablevision, an affiliate of Telecommunications, Inc., has been negotiating with Time Warner in a joint venture for certain cable properties in Texas. He said the most recent conversation with Council has been that TCI Cablevison, Telecommunications, Inc. and A T&T Corporation have entered into a merger agreement. He said they anticipate the closing of the joint venture with TCI and Time Warner between now and the end of year. A merger with TCI and AT&T is anticipated in the first quarter of 1999. In the near future, this cable television system will be owned by the joint venture of TCI and Time Warner, Texas Cable Partners, LP, and eventually AT&T will be the parent that will own the TCI interest, as outlined in Exhibit "B." Mr. McKee pointed out that according to their franchise, Council has to approve change of ownership. Therefore, in the near future a resolution will be solicited for Council approval. Mr. McKee volunteered to answer any questions Council might have. Councilmember Goodson asked what impact this might have on customers. Mr. McKee responded that Time Warner and TCI are both large multimedia corporations, the first and second largest cable providers in the United States, and said he anticipates the same good service, programming and fair prices continuing after the joint venture occurs. He said he Minutes;10/13/98;Page 8 does not see any immediate changes for the citizens of Beaumont on the 98 channels available. After the AT&T merger, Mr. McKee said he could not speculate on the future and spoke about high speed Internet, local telephone service and other advances that might be available in this area at some point. Other questions and comments included cost to clients and plans for Channel 8. Mr. McKee said that elimination of KUHT was announced because of frequent problems receiving KUHT because it is a microwave delivered channel. He said that PBS programming is the same everywhere, but there are a lot local accent programming on KUHT that is of interest to Southeast Texas, more than Rocky Mountain programming would be. In discussions with KUHTV, Mr. McKee said he was able to negotiate continuance of carrying the station with transmission on digital data line, using a brand new technique not used anywhere else in the Country. To his knowledge, this is the partnership between a public broadcasting station and a cable system and anticipate having that new technology in place in the next few weeks. There will be an improved picture and much better reliability on that channel. COMMENTS * Councilmembers comment on various matters Councilmember Goodson thanked former Mayor Lord, David Hearn, Steve Hale, Shelton McClure and everyone involved in bringing the squadron of minesweepers back to the Port of Beaumont. He said not only was the weather better, but family members of the crew were here during the Fair. Councilmember Goodson added thanks to Maurine Gray and everyone that coordinated the programs for the four days for a wonderful event. Mayor Pro Tem Patterson reminded everyone that early voting for the November election begins Saturday, October 17-30, and encouraged everyone to exercise their right to vote. Councilmember Davis thanked Council for moving forward today with the Concord Road Project and Flowers Street Project. He complimented Johnny Beatty and Richard Chappell for their participation in hosting the National Community Development Region 6 Annual Conference at the Hilton Hotel last week. He said everyone seemed to enjoy the conference. Councilmember Ames added her compliments to Johnny Beatty, said the Convention and Visitors Bureau reported its success, and said City Manager Ray Riley did a great job as a speaker for the occasion. Councilmember Smith commented about complaints of activities at Wuthering Heights Park and the inability to control or regulate human behavior and reported that she spent the weekend in Albuquerque, New Mexico, where the Human Development Committee met. Minutes;10/13/%;Page 9 The Balloon Festival was being held at the same time, and she said it was a fantastic and incredible site. Mayor Moore reported that this has been another extremely busy and very good week for the community. He concurred that the HUD conference held in Beaumont was a success because of Johnny Beatty and efforts of other City employees, said it was a Council concerted effort and a tri-city effort of Beaumont, Port Arthur and Orange. He said that during the tour of Beaumont, the Deputy Secretary expressed many positive remarks about Beaumont's efforts. On the same day, Mayor Moore said the new leader of the Maritime Division visited Beaumont and was very complimentary of Port activities and said that another very important project may take place in our community next year. Also, he said that Admiral Connelly told him that no other place has every been more warm and hospitable than in Beaumont. He complimented Maurine Gray, David Hearn and everyone that spearheaded this super event and did an outstanding job representing the Golden Triangle, especially Beaumont. Next year they will bring all six ships back to the Port. Maurine Gray added that Beaumont is getting international cover on the Navy network to all Naval ships and bases and in the newspapers. Also, indicative of the impression Beaumont made on the visitors, several of those near retirement said they wanted to look at Beaumont as a place for them to retire. Mayor Moore said the icing on the cake arrived yesterday with the announcement that the American Fastpitch Association will hold their tournament in Beaumont again next year with 128 teams participating. They were very impressed with Beaumont this past summer and chose Beaumont as the sight again. The economic impact to Beaumont is very significant. Hotels, restaurants, washaterias, shopping malls and other stores all feel the financial results of this tournament. Mayor Moore thanked everyone that made this last tournament a success for Beaumont. Next year the economic impact is projected to be at least $5 million. " Public Comment (Persons are limited to 3 minutes) Mr. Bruce James, 9520 Broun, addressed Council as an appointee of the Parks and Recreation Committee in response to an article in the Beaumont Enterprise stating that the Fair Grounds are not accessible to handicapped persons. Mr. James said his understanding is that the Fair Grounds are under the control of the Parks and Recreation Committee of which he is a member. Mr. Bruce read from Article 3, Section 13 titled Investigations: "The City Council or any person or committee appointed by it shall have power to inquire into the conduct of any department, office, agency or officer of the City; to make investigations as to City affairs and for that purpose may subpoena witnesses, administer oaths and compel the production of books, papers and other evident material to said inquiry." Mr. Bruce asked for direction regarding Council consent or as an appointee Minutes;10/13198;Page 10 his authority to move forward. Mr. Bruce stated that the YMBL is in violation of the State and City Fire Codes, City ordinances and ADA requirements. Mayor Moore asked Mr. James if he has met with the Parks and Recreation Committee regarding his concerns, and Mr. James replied that he has made an effort. Mr. James affirmed that he is not making an effort to close the Fair proceedings, but to get compliance. Mayor Moore suggested that a good understand of the Charter should be gotten and work through the Parks and Recreation Committee for resolve, if that is the direction intended. Mr. James said the needs clarification of Article 3, Section 13 regarding an appointee of a committee causing an investigation. He stated that Riverfront Park has had a similar problem that is slowly being solved, and the problem with the State Fair is nothing new. City Attorney Lane Nichols stated that this section of the Charter is not artfully drafted, but believes the intent is to say the Council may investigate or appoint a person with the power to investigate in their behalf. Mr. Nichols stated he does not believe that any person appointed to any committee or commission may on their own institute investigation. The statement is worded in the Charter so that it could be given that interpretation, but the Charter continues by saying that Council has to adopt an ordinance that establishes penalties or call for contempt for failing to answer them. He said this has never happened. Council has adopted a penalty provision for ordinances, but not for this provision. Mr. James requested the City adopt an ordinance to satisfy the City Charter. Councilmember Davis said that he and Councilmember Ames are liaisons for the Parks and Recreation Committee and will be available to address these concerns at the next meeting and for Mr. Bruce to make his comments. Councilmember Davis mentioned that a meeting with Mr. James may be needed before an official Parks and Recreation Committee meeting. Mr. James assured Council that he is here because of the article in the newspaper, and because he wants to fulfill the duties delegated to him by his appointment. Mr. James submitted a copy of the article in the Beaumont Enterprise for record. Mayor Moore asked that this subject be addressed within the boundaries of what has been a good process of working through advisory committees and coming back to Council for policy making. Councilmember Ames commented that the article indicted that the cable and wiring were the biggest barriers at the Fair and requested relative information before meeting with the Parks and Recreation Committee. EXECUTIVE SESSION Minutes;10/13M;Page 11 "Executive Session in accordance with Section 551.071 of the Government Code to discuss contemplated or pending litigation: Lloyd Brooks, Individually and as Administrator of the Estate of Elizabeth Washington, et al v. the City of Beaumont, Joseph Melonson and George Sledge *Executive Session in accordance with Section 551.074 of the Government Code to consider the evaluation of appointed officials: specifically the City Attorney and City Manager There being no further business, the meeting recessed at 4:15 p.m. to reconvene in executive session. Mayor David W. Moore Barbara Liming, Deputy C&y Clerk Minutes;10113/98;Page 12 J. Allen Management Co, Inc. September 25, 1998 The Honorable David Moore Mayor, City of Beaumont P.O. Box 3827 Beaumont, TX 77704 T RE: Helen Ruth Daniels Apartment Project Honorable Mayor, Some months ago, Sunlight Baptist Church, representing the above referenced project, applied for funding of$1.2 million dollars through the HUD 108 Loan Program. We would request that this project be funded as a grant. This project will be a key to stimulate redevelopment of the neighborhood in that community, along with providing more affordable housing opportunities to the citizens of Beaumont. The scope has changed some to only include the sixty four(64) apartment units. Four (4) local banks have expressed an interest in this project. Chase Bank is the lead bank and Bank One, First Bank and Trust and Community Bank have indicated a willingness to participate if we can meet the equity requirements as outlined in our request. This is a non-profit entity, which will enhance and compliment downtown development, along with helping Martin Luther King Parkway to redevelop. Enclosed is.copy of the preliminary plans, projections and a copy of the-bank outlines for equity. I would respectfully request that the $1.2 million dollar grant be placed on the agenda for approval. If you have questions or need additional information, please call. Sincerely, fJJo �ua W. Allen, Sr. JWA/ckr cc: t ' ouncitmem ers Rev. G.W. Daniels Wayne Holland, Vice President - Chase Bank Adrian Hudspeth, Assistant Vice President - Chase Bank 1076 Calder • Beaumont, TX 77701 • (409) 833-8947 • fax: (409) 833-7302 EXHIBIT "A" RUTH HELEN DANIELS APARTMENT COMMUNITY Hard Construction Costs (Apartments Only) 1,643,940.00 Additional Land Costs 230,790.00 Community Center 75,000.00 Security Gates, Access, and Lighting 75,000.00 Development Costs 60,000.00 Total Hard Construction Costs 2,084,730.00 Reserve for Contingencies 125,000.00 Legal, Organizational, and Professional Fees 13,500.00 Total Contingencies 138,500.00 Total Cost of Project 2,223,230.00 Less Grant Request (1,200,000.00) Loan Request 1,023,230.00 Cash flow required for 1.15 coverage 143,520.00 Yearly Dent Service with Proposed Loan $124,539.36 18,980.64 Net Income per Projection (see pro-forma) 22,108.52 SUNLIGHT BAPTIST CHURCH Construction Cost 2,084,730 Less Grant (450,000) Loan Request 1,634,730 100% Occupancy Level Rental Income Occupancy Level 90% 85% Net Rental Revenues 327,780 309,570 Total Expenses (166,260) (166,260) Reserves (18,000) (18,000) Available for Debt Service 143,520 125,310 Max Loan at 15 yrs, 9% (1.15x coverage) 1,023,371 895,271 Additional Equity Required at 15 yrs 611,359 739,459 TOTAL GRANT 1,061,359 1,189,459 Proposal by Chase Bank (consensus of four banks) Pro-Forma Income Statement:Year One By Month Year One Month Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Total Rental Revenue 30,350.00 30,350.00 30,350.00 30,350.00 30,350.00 30,350.00 30,350.00 30,350.00 30,350.00 30,350.00 30,350.00 30,350.00 364,200.00 Less:Vacancy Lass (15,175.00) (4,552.50) (1,517.50) (1,517.50) (1,517.50) (1,517.50) (1,517.50) (1,517.50) (1,517.50) (1,517.50) (1,517.50) (1,517.50) (34,902.50) Net Rental Revenue 15,176.00 25,797.50 28,832.50 28,832.50 28,832.50 28,832.50 28,832.60 28,832.60 28,832.50 28,832.50 28,832.50 28,832.50 329,297.50 I Administrative Expenses Advertising 250.00 250.00 250.00 25000 25000 250.00 250.00 250.00 250.00 250.00 250.00 250.00 3,000.00 Business Promotions 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 600.00 Manager's Salary 1,400.00 1,400.00 1,400.00 1,400.00 1,400.00 1,400.00 1,400.00 1,400.00 1,400.00 1,400.00 1,400.00 1,400.00 16,800.00 Management Fees 758.75 1,289.88 1,441.63 1,441.63 1,441.63 1,441.63 1,441.63 1,441.63 1,441.63 1,441.63 1,441.63 1,441.63 16,464.88 Office Supplies 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 2,500.00 Legal&Professional 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 6,000.00 Accounting&Computer Fees 225.00 225.00 225.00 225.00 225.00 225.00 225.00 225.00 225.00 225.00 225.00 225.00 2,700.00 Telephone&Answering Services 208.33 20833 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 208.33 2,500.00 Miscellaneous Administration 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 12500 1.50000 Total Administrative Expenses 3,725.42 4,256.64 4,408.29 4,408.29 4,408.29 4,408.29 4,408.29 4,408.29 4,408.29 4,408.29 4,408,29 4,408.29 62,064.88 Utilities Electricity 525.00 525.00 525.00 525.00 525.00 525.00 525.00 525.00 525.00 525.00 525.00 525.00 6,300.00 Water and Sewer 1,100.00 1.10000 1,100.00 1,100.00 1,100.00 1,100.00 1,100.00 1,100.00 1,100.00 1,10000 1.10000 1,100.00 13,200.00 Gas 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 150.00 15000 150.00 1.80000 Cable TV 567.00 567.00 567.00 567.00 567.00 567.00 567.00 567.00 567.00 567.00 567.00 56700 6.80400 Total Utilities Expense 2,342.00 2,342,00 2,342.00 2,342.00 2,342.00 2,342.00 2,342.00 2,342.00 2,342.00 2,342.00 2,342.00 2,342.00 28,104.00 Operating Expenses Janitor and Cleaning Payroll 1,126.67 1,126.67 1,126.67 1,126.67 1,126.67 1.12667 1,126.67 1,126.67 1,126.67 1,126.67 1,12667 1,126.67 13,520.00 Janitor and Cleaning Supplies 41.67 41.67 41.67 41.67 41.67 41 67 41.67 41.67 41.67 41.67 41.67 41.67 500.00 Security Contract 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,25000 15,000.00 Exterminating Contract 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 125.00 1,500.00 Extermining Supplies 20.83 20.83 20.83 20.83 20.83 20.83 20.83 20.83 20.83 20.83 20.83 2083 250.00 Garbage and Trash Removal 283.33 283.33 283.33 283.33 283.33 283.33 283.33 283.33 283.33 28333 283.33 283.33 3,400.00 Repairs Payroll 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 1,300.00 15,600.00 Repairs Material 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00 250.00 3,000.00 Repairs Contract 375.00 375.00 375.00 375.00 375.00 375.00 375.00 375.00 37500 375.00 37500 375.00 4,500.00 HVAC Repairs 10000 100.00 100.00 100.00 100.00 10000 100.00 100.00 100.00 100.00 10000 10000 1,200.00 Decorating Supplies 41.67 41.67 41.67 41.67 41.67 41.67 41.67 41.67 41.67 41.67 41.67 41.67 500.00 Decorating Contract Miscellaneous Maintenance 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 10000 100.00 1,200.00 Total Operating and Maintenance 6,014.17 6,014.17 6,014.17 6,014.17 6,014.17 6,014,17 6,014.17 6,014.17 6,014.17 6,014.17 6,014.17 6,014.17 60,170.00 Taxes and Insurance Payroll Taxes 420.93 420.93 420.93 420.93 420.93 420.93 420.93 420.93 420.93 420.93 420.93 420.93 5,051.20 Property and Liability Insurance 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 1,250.00 15,000.00 Workers Compensation 41.67 41.67 41.67 41.67 41.67 41.67 41.67 41.67 41.67 41.67 41 67 41.67 50000 Employee Benefits - - Total Taxes and Insurance 1,712.60 1,712.60 1,712.60 1,712.60 1,712.60 1,712.60 1,712.60 1,712.60 1,712.60 1,712.60 1,712.60 1,712.60 20,651.20 Financial Expenses Interest on Mortgage 7,674.23 7,653.94 7,633.51 7,612.93 7,592.19 7,571.29 7,550.24 7,529.03 7,507.66 7,486.13 7,464.44 7,442.58 90,718.16 Interest on Other Notes Total Financial Expenses 7,674.23 7,653.94 7,633.61 7,612.93 7,592.19 7,571.29 7,660.24 7,629.03 7,507.66 7,486.13 7,464.44 7,442.68 90,718.16 Total Expenses Before Depreclation 20,468.41 20,979.25 21,110.57 21,089.98 21,069.24 21,048.35 21,027.30 21,006.09 20,984.72 20,963.19 20,941.60 20,919.64 251,608,23 Depreciation Expense 4,631.73 4,631.73 4,631.73 4,631.73 4,631.73 4,631.73 4,631.73 4,631.73 4,631.73 4,631.73 4,631.73 4,631 73 55,580.75 Net Profit(Loss) '' (9,925.14) 186.52 3,090.20 3,110.79 3,131.53 3,162.42 3,173.47 3,194.68 3,216.05 3,237.58 3,269.27 3,281.13 22,108.52 INTER-OFFICE MEMORANDUM UO M IL City of Beaumont, Texas City Attomey's Office Date: September 24, 1998 To: Ray A. Riley, City Manager From: Lane Nichols, City Attorney Subject: TCI Cablevision Acquisition and Merger COMMENTS Recently the Mayor received a request from TCI Cablevision of Texas, Inc. informing him of an upcoming merger between TCI Communications and Time Warner. This merger would create a new partnership known as "Texas Cable Partners, L.P." owned 50% by TCI and 50% by Time Warner. In addition, Tele-Communications, Inc. (TCI) has entered into a merger agreement with AT&T Corporation. I quote from Mr. McKee's letter: "The AT&T Merger Agreement upon closing will result in a change of control for Tele-Communications, Inc. as the ultimate parent entity of TCI Cablevision of Texas, Inc. and other TCI affiliates, but does not otherwise affect the transaction contemplated by the Contribution Agreement." The Contribution Agreement is the TCIMme Warner deal. Our franchise prohibits the company from selling or transferring its plant or system to another or transferring any rights under the franchise to another without City Council approval. TCI is requesting that the Council, by resolution, approve the assignment of the cable franchise from TCI Cablevision of Texas to the new partnership, 'Texas Cable Partners, L.P." They also requested that the same resolution grant the City's consent for the change of control of TCI pursuant to the TCI/AT&T Merger Agreement. I have attached a copy of all the information I have been provided. The legal issues are fairly simple. The real question seems to be whether this proposed merger and acquisition is good or bad for Beaumont citizens. Let's talk a ut this matter. Lane Nichols f ' LN:rw enclosure _ 2 EXHIBIT «B" CITY OF BEAUMCNT EXECUTIvF nP!:1rE T� n TC1 July 31, 1998 Mayor David Moore City of Beaumont Beaumont, Texas 77701 RE: Transfer of City of Beaumont,Texas Cable Television Franchise to Texas Cable Partners, L.P. Dear Mavor Moore: In August of last year, we advised you of the intent of affiliates of TCI Communications. Inc. ("TCI")and affiliates of Time Wamer Inc. ("Time Warner") to contribute certain cable television systems to a partnership. On June 23, 1998, TCI and Time Warner formally entered into this Contribution Agreement(the"Contribution Agreement") which creates a new partnership to be known as Texas Cable Partners, L.P. ("Texas Cable"). Texas Cable will be owned 50016 by TCI and 50% by Time Warner and will be managed by Time Warner Cable. TCI Cablevision of Texas, Inc. will contribute to Texas Cable its franchise with the City of Beaumont, Texas. Enclosed with this letter is a detailed description of the transaction as well as a chart showing the ownership structure of Texas Cable after the closing of this transaction. TCI and Time Warner collectively are transferring to Texas Cable over 150 franchises serving in excess of one million subscribers in Texas. Time Warner Cable manages cable systems serving in excess of 12 million subscribers throughout the United States and is an experienced and qualified cable operator. In addition, we have recently advised you that Tele-Communications, Inc. has entered into a merger agreement with AT&T Corp. dated as of June 23, 1998 (the "AT&T Merger Agreement"). The AT&T Merger Agreement upon closing will result in a change of control for Tele-Communications, Inc. as the ultimate parent entity of TCI Cablevision of Texas,Inc. and other TCI affiliates,but does not otherwise affect the transaction contemplated by the Contribution Agreement. Enclosed for your consideration is a form of resolution addressing the consent to transfer from the City,of Beaumont for the Texas Cable transaction and the consent, if required, for the AT&T Merger transaction. We would like to meet with you at your convenience to more fully discuss the transactions, the enclosed resolution,and to coordinate the consent process. We respectfully request that this resolution be placed on the agenda for your next meeting. The closings of the transactions contemplated by the Contribution Agreement and the AT&T Merger Agreement are scheduled to occur separately once all necessary consents are obtained for each separate transaction. Ut � U i�yf3 CITY OF BEAUMCN i EXECUTIVE OFFICE TCI Cablevision of Texas,Inc. 602 N.Hwy.69 Nederland.Texas 77627 (409)727.1515 Document 0: 19490 Fax(409)727-5050 Path: J:,ROX.AN7vEB\fIZ01'.DOC An E7-a -?ccc-_-^ c o-.e• TO Page 2 RE: Transfer of Cable Television Franchise I will be in touch with you in the next several days to set a meeting with you to discuss these matters. If you have any questions in the meantime, please contact me at (409) 720-5505. Thank you fcr your assistance in this matter. Very truly yours, Mike McKee General Manager cc: City Manager, attorney, Secretary and Council TCI Central Division Franchising TCI Regional Vice President TCI Cableviston of Texas,Inc. 602 N.Hwy.69 Nederland,Texas 77627 (409)727-1515 Documcnt 0: 19490 Fax(409)727-5050 Path: DROXANNEB`•f140P.DOC Ar 5i_a- _—c.c.e, DESCRIPTION OF CONTRIBUTION TRANSACTIONS L\VOLVL G TEXAS CABLE PARTNERS, L.P. Yayare of Transaction: Two affiliates of Time Warner Inc. (together, the"Time Warner Partners"), TCI Texas Cable Holdings LLC and TCI Texas Cable, Inc. (together, the "TCI Partners"), entered into a Contribution Agreement dated as of June 23, 1998, with Texas Cable Partners, L.P. (the"Partnership"). The Time Warner Partners agreed to contribute to the Partnership cable television systems serving a total of 42 Time Warner franchise cottununities and an additional number of adjacent non-franchised communities (approximately 528,000 subscribers) and the TCI Partners agreed to contribute to the Partnership 115 TCI franchise communities and an additional number of adjacent non-franchised communities (approximately 516,000 subscribers). Projected Closing Date: Promptly after receipt of all required consents and satisfaction of the other conditions to Closing. Transferee: Texas Cable Partners, L P , a newly formed Delaware limited partnership owned 50% by Time Warner Partners and 50%by the TCI Partners. (See the attached chart for more detailed ownership information.) Management: Time Warner Cable, another affiliate of Time Warner, will be appointed the General Manager of the Partnership, will provide the overall day-to-day management of the Partnership, and will have exclusive responsibility for the management, operation, maintenance and supervision of the contributed systems, subject to prior approval by the Partnership's Management Committee with respect to certain material corporate and tax matters and extraordinary transactions. Governance: The Partnership will be governed by a six-member Management Committee, consisting of three members designated by the Time Warner Partners and three members designated by the TCI Partners. Each member of the Management Committee has one vote, and all actions or decisions of the Management Comrrrittee must have unanimous approval, In general (but subject to certain limitations), Time Warner Cable will make all decisions regarding the rebuild and upgrade of the contributed systems, the programming to be carried on the systems and the other services to 4W'VERS1TiP OF TE.?LA� r�L.E p��,-£R, I P AT&T CORP. Acquisition Pending TELE-COKMUNICATIONS, L4C. TDM WAR.'VER INC. (a Delaware corporation) (a Delaware corporation) lOQ% i I I TCI Communications, Inc. Time Warner Entertainment Company, L.P. (a Delaware corporation) (a Delaware limited partnership approximately 75% owned by TW affiliates) � f � TCI Texas Cable TCI Texas Time Warner Entertainment -- Holdings LLC Cable, Inc. Advance/Newhouse Partnership (a Colorado limited (a Colorado (a New York general partnership two-thirds liability company) corporation) owned by TWE and one-third owned by Advance/Newhouse Partnership) I00°/s 49.5%Limited 0.5% TWE-A/N Teas Cable Partners Partnership Partnership 49.5% Limited Interest p Gtneral Partner LLC(a Delaware limited Partnership Interest Irnerest liability company) 0.5% General Partnership Interest TEXAS CABLE PARTNERS, L.P. (a Delaware limited partnership) RESOLUTION NO. A RESOLUTION APPROVING THE ASSIGNMENT OF THE CABLE FRANCHISE FRO`I TCI CABLEVISION OF TEXAS, INC. TO TEXAS CABLE PARTNERS, L.P. WHEREAS, TCI Cablevision of Texas, Inc. ("Franchisee")has requested that the City grant its consent for the cable television franchise granted by the City of Beaumont,Texas(the"Franchise") to be transferred to Texas Cable Partners, L.P.("Texas Cable"),as more fully described in Exhibit A attached hereto(the "Transfer"); and WHEREAS,the Franchisee has requested that the City grant its consent for the change of control of Tele- Communications,Inc. ("TCI")pursuant to a merger agreement between TCI and AT&T(the "TCI Change of Control");and WHEREAS,the City Council deems it in the public's interest to permit the Transfer and the TCI Change of Control. NOW,THEREFORE, BE IT RESOLVED by the City Council of the City of Beaumont: SECTION 1. The facts and opinions in the preamble are true and correct. SECTION 2. The Transfer of the Franchise from Franchisee to Texas Cable and the TCI Change of Control are hereby approved. SECTION 3. This resolution shall become effective upon the date of the closing of the transactions as described in Exhibit A and upon the acceptance of the Franchise by Texas Cable, including the assumption by Texas Partners of all obligations of Franchisee relating to the Franchise. SECTION 4. A copy of this Resolution will be spread upon the Minutes of the City Council. READ,ADOPTED AND APPROVED this day of 1998,at a Regular Meeting of the City Council of the City of Beaumont,Texas, by the following vote: AYES: NOS: ATTEST: Mayor City Secretary APPROVED AS TO FORM: APPROVED FOR ADMINISTRATOR: City Attorney City Manager APPROVED,AGREED TO,AND OBLIGATIONS ASSUMED: TEXAS CABLE PARTNERS,L.P. By: TCI Texas Cable,Inc.,as its general partner By: TWE-A/N Texas Cable Partners General Partner LLC, as its general partner By: BY: Name: Name: Title: Title: EXHIBIT A TO TRANSFER RESOLUTION OF THE CITY OF BEAUMONT,TX Descripti6n of Transfer of Franchise from TCI Cablevision of Texas, Inc. to Texas Cable Partners, L.P. Affiliates of Time Warner and affiliates of TCI Cablevision of Texas, Inc. (the "TCI Affiliates")entered into a Contribution Agreement dated as of June 23, 1998 with Texas Cable Partners, L.P. ('Texas Cable") which provides for the transfer of the franchise to Texas Cable. For purposes of this resolution, the transfer of the franchise includes any necessary transfers of the cable television system and the Franchise through one or more affiliates of TCI Cablevision of Texas, Inc. TCI Change of Control On June 23, 1998, AT&T Corp., an affiliate of AT&T Corp and Tele-Comm unications, Inc., the ultimate parent entity of the TCI Affiliates,entered into an Agreement and Plan of Restructuring and Merger, which provides for AT&T Corp. acquiring control of Tele-Communications, Inc. The closing of the AT&T merger will result in a change of control over the ultimate parent of the TCI Affiliates. Structure Chart A chart showing the ownership structure of Texas Cable after the completion of the AT&T merger is attached to this Exhibit A.