2003 04 10 WS MinutesMINUTES OF THE WORK SESSION
OF THE CITY COUNCIL OF THE CITY OF BAYTOWN
April 10, 2003
The City Council of the City of Baytown, Texas, met in work session on April 10, 2003, at 5:15
p.m. in the Council Chamber of Baytown City Hall, 2401 Market Street, Baytown, Texas, with the
following in attendance:
Coleman Godwin
Council Member
Calvin Mundinger
Council Member
Don Murray
Council Member
Scott Sheley
Council Member
Pete C. Alfaro
Mayor
Gary M. Jackson
City Manager
Ignacio Ramirez, Sr.
City Attorney
Gary W. Smith
City Clerk
Absent: Mercedes Renteria III
Council Member
The meeting was opened with a quorum present after which the following business was conducted:
Discuss wireless network infrastructure.
Asim Khan, Director of Information Technology Services, stated that the bonds approved in 2001
included funding for technological improvements. Since approval of the bonds, there have been
changes in technology and the new technology provides for future growth and compatibility for the
City's information system. The proposed fiber and wireless technology aids the growth of the
system. The project proposed for approval is the second phase. The third phase is being planned
now.
A hybrid network of wireless and fiber optic network connections will best serve the long -term
needs of the City. Fiber optic cable installation is expensive and it is not cost effective to run fiber
to all sites. Fiber is being used at the high use sites. The wireless system will connect the other
locations throughout the City.
The current maximum bandwidth is 1.5 MB. The planned wireless bandwidth will vary from 10
MB to 56 MB. Emergency services will have access via a wireless link. This is planned to be
expanded to all city vehicles.
In the current program eleven sites have been selected for antennas. This will provide unbroken
coverage for mobile services. The proposed vendor is reputable and has provided services to
several governmental agencies.
The cost of technology has decreased. Phase I cost $330,000. Phase H, if approved, will cost
$370,000. The bond program provided $1,300,000. The program is well within funding limits.
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Minutes of the Work Session — April 10, 2003
Receive and discuss an update from the Ad Hoc Industrial District Agreement (IDA)
Committee on the background and history of the IDA policy and agreement and proposed
goals and timeline for new policy and agreements.
City Clerk Gary Smith announced that four members of the City Council had filed conflict of
interest affidavits relating to ExxonMobil. City Attorney Ignacio Ramirez, Sr. opined that because
a majority of the members of City Council had filed the affidavits of a conflict of interest, the
statute allows all members of the Council to participate in the discussion.
Council Member Mundinger, chair of the Committee, thanked the committee members for their
service on the Committee and recognized Gary Jackson, City Manager, Bob Leiper, Assistant City
Manager, Donna Sams, Finance Director, Rhonda Young, Treasurer, Ignacio Ramirez, City
Attorney, and Fritz Lanham.
Gary Jackson, City Manager, reviewed the history of the industrial district agreements in Baytown.
The adoption of the annexation law in 1963 was the impetus for creating the industrial districts.
The intention was to make arrangements for and treat all industries the same through a mechanism
to calculate and receive payments. The purpose was to encourage the establishment of responsible
industries near the city. The policy of the initial agreement was to recognize that the property
within the industrial districts would not be subject to the same regulations as property within the
City; to set a mechanism in place to provide a payment in lieu of taxes; and to recognize that the
City would not provide services within the industrial districts.
The first industrial district agreement was signed in 1967 with Humble Oil & Refining Company. It
has been referred to as the standard or model form. Today there are twenty -seven agreements with
industries in three industrial districts.
The vision for the future of the City has been established in the RUDAT study in 1990 and the 2020
Plan adopted in the 2000 Comprehensive Plan. There is a demand for quality of life services,
neighborhood protection, litter abatement, bond financed capital projects, and increased service
levels. There has been a demand for a personnel system that encourages employee retention and
enables recruitment of qualified employees. Economic development initiatives for industry remain
important today. Response has been made to these demands and vision. General fund expenditures
reflect the response with the largest and fastest growing area of expenditures being in public safety.
Bond programs have been approved since 1991 and financed with only one tax increase. The debt
service requirements have increased forty-two percent.
The City faces revenue challenges. The tax rate has been unchanged since 1993. The revenue to
the City has increased due to increased valuations and the increased revenues have been expended
for capital improvements and infrastructure, public safety, enhances services, employee retention
and recruitment, technology and debt service requirements. The projection of revenues and
expenditures was reviewed, with the forecasts revealing a revenue shortfall in the future.
The industrial district agreements are one component of the City's fiscal strategy. The City must be
resourceful in finding alternate solutions to fiscal needs, i.e. Crime Control & Prevention District,
Municipal Development District, and Tax Increment Reinvestment Zone. The area is a regional
market center with untapped potential. We must maintain the existing infrastructure while
expanding, i.e. the wastewater system. The non - renewal of CCPD ($3,000,000 per year) and the
fire staffing charter amendment ($1,100,000 in 2002 -2003 and $700,000 year each thereafter) had
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Minutes of the Work Session – April 10, 2003
an adverse fiscal impact. The focus must be on long -term financial solvency. Recurring expenses
must be matched with recurring revenues streams. The City has committed to financial strategic
planning. We must accommodate growth while maintaining the existing infrastructure.
The City is confronted with revenue limitations. The average home value has increased to $70,825,
but it is still lower than comparable communities. The per capita sales tax collections are lower
than comparable cities. Sales tax receipts are lower this fiscal year than last. Franchise tax
payments are reduced. Contingency plans have been implemented, with at least twenty positions
being held. The circumstances are not unique. Council has undertaken a comprehensive review of
city services. The budget guidelines are for departments to submit zero growth budgets with
alternatives for reductions of three, six and nine percent reductions.
The IDA Committee's goals were as follows:
• Create a fair and equitable rate in the agreement that is competitive with other cities,
• The IDA payments are only one component of the City's fiscal strategy,
• Provide a predictable and enhanced payment formula that encourages capital investment,
• Provide language to clarify the City's right to participate in regulatory hearings and
proceedings, and
• Provide greater clarity in the language relating to the assignability of the agreements.
Comparisons to the industrial district agreement payments for other Gulf Coast industrial cities
were provided. The payment rate of an industry within the City and in an industrial district was
provided. In Harris County, an industry in the City paid at combined rate of $3.286 per $100
valuation, while an industry in an industrial district paid $2.917. In Chambers County, the
combined rate within the City is $3.174 and is $2.806 in an industrial district.
Council Member Anderson arrived at 6:17 p.m.
Under the existing agreements, payments were tiered as follows:
• Year 1--45%
• Year 2-48%
• Years 3- 7 -50 %.
For new construction (more than $20,000,000), payments were tiered as follows:
• Years 1 -2 -0%
• Year 3 -20%
• Year 4-30%
• Year 5-40%
• Years 6- 7 -50 %.
New concepts being considered for the new agreements include ideas from other cities' agreements,
new assignablility language and new language relating to the City's participation in regulatory
hearings and proceedings, and a new rate structure.
With depreciation at industrial sites, even with increased rates, less income is received. Values are
established through an appraisal process. Only a few of the industries did not depreciate in value
during the last agreement period.
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Minutes of the Work Session — April 10, 2003
Additional work sessions will be scheduled for Thursday, April 17, 2003 and Thursday, April 24,
2003, for further discussion. An item to allow Council to consider adoption of the new agreement
may be on the April 24, 2003 Council agenda.
Discuss appointments.
Council did not discuss the appointment to the Emergency Medical Services Advisory Committee.
Adjourn.
There being no further business, meeting adjourned at 6:29 p.m.
G&ty W mith
City Clerk