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2003 03 13 CC MinutesMINUTES OF THE REGULAR SESSION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN March 13, 2003 6:30 p.m. The City Council of the City of Baytown, Texas, met in regular session on March 13, 2003, at 6:30 p.m. in the Council Chamber of Baytown City Hall with the following in attendance: Ronnie Anderson Coleman Godwin Calvin Mundinger Don Murray Mercedes Renteria III Scott Sheley Pete C. Alfaro Gary M. Jackson Karen Horner Gary W. Smith Council Member Council Member Council Member Council Member Council Member Council Member Mayor City Manager First Assistant City Attorney City Clerk The meeting was opened with a quorum present and Council Member Godwin led the pledge of allegiance and offered the invocation after which the following business was conducted: Consider approval of minutes of the work session and regular meeting held on February 27, 2003. Council Member Mundinger moved approval of the minutes of the work session and regular meeting held on February 27, 2003. Council Member Anderson seconded the motion. The vote follows: Ayes: Council Members Anderson, Godwin, Mundinger, Murray, and Sheley. Mayor Alfaro. Nays: None. Council Member Renteria abstained. The motion carried. Consider Proposed Ordinance No. 030313 -1, authorizing the reimbursement from bond funds for anticipated expenditures on the Kingsbend sewer rehabilitation project. The City reasonably expects to reimburse itself for all costs that have been or will be paid subsequent to the date that is 60 days prior to the date hereof and that are to be paid in connection with the acquisition, construction, reconstruction or renovation of the following property from the proceeds of tax- exempt obligations to be issued subsequent to the date hereof. Item Amount Kingsbend sewer rehabilitation project $1,200,000. Page 2of11 Minutes of the Regular Session — March 13, 2003 Staff intends to present an item on the March 27, 2003 agenda for the sale of combination refunding bonds and additional debt for the Kingsbend Sewer Rehabilitation Project. Council Member Murray moved adoption of the proposed ordinance. Council Member Renteria seconded the motion. The vote follows: Ayes: Council Members Anderson, Godwin, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. The motion carried. ORDINANCE NO. 9531 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, EXPRESSING ITS INTENT TO FINANCE EXPENDITURES TO BE INCURRED IN CONNECTION WITH THE KINGSBEND SEWER REHABILITATION PROJECT; PROVIDING A REPEALING CLAUSE; CONTAINING A SAVINGS CLAUSE; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Consider Proposed Ordinance No. 030313 -2, authorizing a professional services agreement with Bettye Lynn of Karger Key Barnes and Lynn, LLP, for professional services in the upcoming collective bargaining process. Ms. Lynn represented the City in three arbitration hearings dealing with a temporary suspension, demotion, and indefinite suspension, was the City's lead negotiator in the City's first collective bargaining process, and is representing the City in the lawsuit filed on behalf of certain firefighters regarding longevity pay. This ordinance authorizes the expenditure of up to $35,000 for such services. Council Member Renteria moved adoption of the proposed ordinance. Council Member Godwin seconded the motion. The vote follows: Ayes: Council Members Anderson, Godwin, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. The motion carried. ORDINANCE NO. 9532 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, ENGAGING BETTYE LYNN OF KARGER KEY BARNES & LYNN, LLP FOR THE PERFORMANCE OF LEGAL SERVICES IN CONNECTION WITH THE 2003 FIREFIGHTER COLLECTIVE BARGAINING PROCESS; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Page 3 of 11 Minutes of the Regular Session — March 13, 2003 Consider Proposed Ordinance No. 030313 -3, authorizing the Second Amendment of the Loan Agreement and the Second Loan Modification with Southwest Bank of Texas, N.A., to establish the floor rate of interest per annum at 5 %% for the financing of the Bayland Island facilities. Proposed Ordinance No. 030313 -3 authorizes the Second Amendment of the Loan Agreement and the Second Loan Modification with Southwest Bank of Texas, N.A., to establish the floor rate of interest per annum at 53/4% for the Bayland Island facilities. The City entered into a loan agreement, promissory note, Lease and Rental Assignment and Security Agreement with Citizens Bank and Trust Company of Baytown, Texas, on September 14, 1995, to finance the restaurant and ships store located on Bayland Island. Thereafter, on March 28, 1996, the parties amended the loan agreement and promissory note in order to modify the fist annual installment payment date and all subsequent payment dates. Pursuant to the discussions on Bayland Island financing, staff contacted Southwest Bank regarding the interest rate on the $1.8 million loan on the restaurant and ships store. Now, the City and Southwest Bank, (successor in interest to Citizens Bank and Trust Company) desire to amend the loan agreement as well as the promissory note in order to reduce the floor rate of interest to 53/4% per annum. The interest rate limitations apply through 2005. Currently, the floor rate is 7%4% per annum. The ceiling rate of 8% remains unchanged. There is a $250 fee to execute this change. This interest rate change will not reduce our monthly payment but will increase the amount of the payment applied to the loan principle. Council Member Murray moved adoption of the proposed ordinance. Council Member Mundinger seconded the motion. The vote follows: Ayes: Council Members Anderson, Godwin, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. The motion carried. ORDINANCE NO. 9533 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING AND DIRECTING THE MAYOR TO EXECUTE AND THE CITY CLERK TO ATTEST TO A MODIFICATION AGREEMENT WITH SOUTHWEST BANK OF TEXAS, N.A., TO ESTABLISH THE FLOOR RATE OF INTEREST PER ANNUM AT 53/4% FOR THE FINANCING OF THE BAYLAND ISLAND FACILITIES; AND PROVIDING FOR AN EFFECTIVE DATE THEREOF. Council Member Godwin announced that he had filed an affidavit of conflict of interest with the City Clerk on the following three items prior to the meeting. Receive and discuss the recommendations from the Baytown Parks and Recreation Advisory Board regarding the purchase of property for the East Little League. The Parks Board met on Thursday, March 6 to discuss the land acquisition issue for East Little League. Their recommendations was included in a summary memorandum from the Parks Director. This item relates to the following two items. Page 4 of 11 Minutes of the Regular Session — March 13, 2003 City Manager Jackson informed Council that the Parks Board's recommendations are as follows: The Board considers the selling price of the Ward Road property excessive, and recommends that a new appraisal be obtained on the property; The Board recommends that the City to obtain a long -term maintenance agreement for the property with East Little League; The Board recommends that the property be used year round to include purposes other than Little League; and, The Board expressed concerns that added practice fields for East Little League could elicit requests for the same from other leagues. The following persons registered to speak to Council concerning the acquisition of the Ward Road property: Angela Wooster spoke in support of the purchase of the Ward Road property. R.E. Lucas confirmed that the East Little League will continue to maintain the Ward Road property. Neva White registered to speak to Council concerning the acquisition of the Ward Road property, but declined to speak. Council Member Mundinger moved to accept the recommendations of the Parks Board. Council Member Anderson seconded the motion. The vote follows: Ayes: Council Members Anderson, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. Council Member Godwin abstained. The motion carried. Consider directing the City Manager to take further actions necessary to effect the actions of the Council related to acquisition of the Ward Road property and emergency repairs to the facilities. This item allows the Council to direct the City Manager to take any further actions that are necessary to effect the Council's intention to provide funding for the purchase of the Ward Road property and to make emergency repairs to the facilities, in coordination with League officials. Such further actions include, but are not limited to, making necessary arrangements with the East Little League, the Scanlan Foundation, the Baytown Municipal Development District, and a title company. The MDD Board ordered an appraisal of the property in their action on March 6, 2003. The purchase price is subject to the results of the appraisal and shall not exceed $260,000. Council Member Anderson moved to direct the City Manager, in coordination with East Little League, ' to obtain another appraisal of the property and a long -term maintenance agreement with East Little League, and to ensure that the property be used for purposes other than Little League. Council Member Mundinger seconded the motion. Mayor Alfaro noted that the City is not purchasing practice fields for East Little League and it is not the City's responsibility to do so for any leagues. Neva White, President of East Little League, stated that East Little League would enter into a long -tern Page 5 of 11 Minutes of the Regular Session — March 13, 2003 agreement for maintenance of the facilities. The vote follows: Ayes: Council Members Anderson, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. Council Member Godwin abstained. The motion carried. Consider Proposed Ordinance No. 0303134, authorizing an interlocal agreement with the Baytown Municipal Development District to provide funding for the acquisition of property and emergency repairs to the facilities. Proposed Ordinance 030313 -4 authorizes an interlocal agreement with the Baytown Municipal Development District to provide up to $275,000 in funding to the City for the purchase of the Ward Road property and the emergency repairs to the facilities. The MDD Board approved the agreement during the meeting held on March 6, 2003. The form of the agreement is similar to other interlocal agreements authorized with the Baytown Municipal Development District. Council Member Murray moved adoption of the proposed ordinance. Council Member Renteria seconded the motion. The vote follows: Ayes: Council Members Anderson, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. Council Member Godwin abstained. The motion carried. ORDINANCE NO. 9534 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING THE CITY MANAGER TO EXECUTE AND THE CITY CLERK TO ATTEST TO AN AGREEMENT BETWEEN THE BAYTOWN MUNICIPAL DEVELOPMENT DISTRICT AND THE CITY OF BAYTOWN TO PROVIDE FUNDING FOR THE PURCHASE OF PROPERTIES FOR THE DEVELOPMENT OF BASEBALL FIELDS AND FOR ASSOCIATED EMERGENCY REPAIRS TO THE EXISTING FACILITES; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Consider Proposed Resolution No. 030313 -1, granting consent to the inclusion of 42 acres into Chambers County MUD No. 1 located within the extraterritorial jurisdiction of the City. Texas Local Government Code, Section 42.042 provides that a district that supplies fresh water or furnishes sanitary sewer services may not be created (or expanded) in the extraterritorial jurisdiction of a municipality without the consent of the municipality. Page 6ofII Minutes of the Regular Session — March 13, 2003 The conditions placed on this expansion are similar to the consents the City has granted for the creation of other MUDs. The primary distinctions in this consent are: This is an expansion of an existing MUD (as opposed to a creation), and The provision of wastewater service is specifically excluded. Mr. Glenn Angel has presented a letter requesting that the City grant its consent to the expansion of Chambers County MUD No. 1 by its inclusion of an additional 42 acres. A copy of the letter is included in the packet. The area proposed for the expansion is within the City's extraterritorial jurisdiction. Consent to the proposed expansion is only an authorization to initiate proceedings to expand the district. The Developer has been notified in writing that the City will not serve the area proposed for inclusion with sanitary sewer services. The developer is applying to TCEQ for a permit to install an on -site "package" treatment facility. Council Member Sheley moved adoption of the proposed resolution. Council Member Godwin seconded the motion. The vote follows: Ayes: Council Members Anderson, Godwin, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. The motion carried. RESOLUTION NO. 1573 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, GRANTING CONSENT TO THE INCLUSION OF 42 ACRES OF LAND, MORE OR LESS, WITHIN THE EXTRATERRITORIAL JURISDICTION OF THE CITY OF BAYTOWN, TEXAS, IN CHAMBERS COUNTY MUNICIPAL UTILITY DISTRICT NO. 1; MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Consider Proposed Resolution No. 030313 -2, authorizing the City Manager to submit applications to Houston Galveston Area Council for the 2004 -2006 Transportation Improvement Program. The Houston - Galveston area's Transportation Policy Council, in its role as the Metropolitan Planning Organization for the eight -county Transportation Management Area, is developing the 2004 -2006 Transportation Improvement Program (TIP). The TIP will identify roadway, transit, and other transportation programs and projects scheduled for implementation between September 1, 2003 and August 31, 2006. It is important to note that TIP projects must involve regional mobility and that purely "local" projects will not qualify. Another evaluation criterion is "Project Readiness." The submission of transportation projects does not obligate the City to fund or construct the projects. However, if a project is not included in the TIP, it will not be eligible for some grant programs. The projects to be submitted for consideration for the 2004 -2006 TIP are: Page 7ofII Minutes of the Regular Session — March 13, 2003 North Main/Alexander Drive traffic signal synchronization The improvement of traffic flow on North Main Street between Texas Avenue and Baker Road and on Alexander Drive between Texas Avenue and McKinney Road — estimated cost, $1,000,000. Baker Road Extension An additional east/west corridor to improve traffic mobility and calm traffic on residential streets — total preliminary construction and design cost, 58,500,000. Bush Road/John Martin Extension A connection to reduce traffic congestion on Garth Road by providing an additional north and south principal arterial — preliminary construction and design cost, $2,400,000. Widening of Cedar Bayou Lynchburg To improve the efficient movement of traffic between Garth Road and Decker Drive, in two major phases, from Garth Road to Bush Road and from Bush Road to Decker Drive. Council Member Murray moved adoption of the proposed resolution. Council Member Mundinger seconded the motion. The vote follows: Ayes: Council Members Anderson, Godwin, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. The motion carried. RESOLUTION NO. 1574 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING THE CITY MANAGER TO MAKE APPLICATIONS TO THE HOUSTON GALVESTON AREA COUNCIL FOR THE 2004 -2006 TRANSPORTATION IMPROVEMENT PROGRAM; DESIGNATING AN AUTHORIZED REPRESENTATIVE; AUTHORIZING THE REPRESENTATIVE TO ACCEPT OR AFFIRM ANY GRANT AWARD THAT MAY RESULT THEREFROM; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Consider request from Council Member Renteria regarding Cinco de Mayo parade. Council Member Renteria asked that the route of the Cinco de Mayo parade include Market Street in District 1 or that the funds be reallocated to incorporate District 1. The following persons registered to speak to Council regarding the Cinco de Mayo parade: Joe Wheat asked that the parade route for the Cinco de Mayo parade remain the same as the previous year. Page 8 of 11 Minutes of the Regular Session – March 13, 2003 Ruben DeHoyos asked the parade route for the Cinco de Mayo parade remain the same as the previous year. Council Member Renteria stated that, due to a lack of transportation, some of his constituents had not been able to participate in last year's parade. He said that he is trying bring some activity to his district and requested that either Market Street be included in the parade route, or the funding be divided so that a second parade could be held in his district. Mayor Alfaro noted that monies from the Hotel/Motel tax fund the Cinco de Mayo parade and any change in location would mean amending the budget. He encouraged council members to act for the good of the whole community, rather than divisively for each district. Due to the fact that the date for the parade coincides with election day, the Mayor suggested that it be held the following day, on Sunday, May 4. City Manager Jackson informed Council that the little more than $9,000 budgeted for the parade will be used to fund the overtime for those employees from the Parks and Recreation and Public Works Departments, as well as the City's Police Department and Hands County Constable's Office for security. Some of the funds are intended for flyers and publicity. Council Member Renteria moved to split the funding and reallocate $4,500 for a Cinco de Mayo parade in District 1. The motion failed for lack of a second. Consent Agenda a. Proposed Ordinance No. 030313 -5 awards the last renewal of the annual repair clamp contract to Golden Triangle Pipe in the amount of $73,527.40. Golden Triangle Pipe has submitted a written request to renew the current contract for the same award amount. Quantities remain the same. This contract will be used by the Public Works Department for water and sewer rehabilitation projects. b. Proposed Ordinance No. 030313 -6 authorizes the sole source purchase of fire fighting protective clothing from Casco Industries, Inc., in the amount of $43,800.00. The Fire Department will purchase forty sets of bunker gear. Each set includes a coat and trousers for $1,095.00 per set. Casco Industries, Inc., is the sole distributor for Globe Bunker Gear in the State of Texas and surrounding states. C. Proposed Resolution No. 030313 -3 approves the application for continuous funding of the Victims of Crime (VOCA) Grant awarded to the City to provide the Family Violence Counseling Program in the Police Department. The original application was approved by Resolution No. 1404 and the Office of the Governor — Criminal Justice Division, awarded the grant. Funding is provided annually. This application will request VOCA grant funds in an amount not to exceed $46,667 for the grant period of July 1, 2003 through June 30, 2004. In addition to the VOCA grant funds, there will be a local match of $14,927, which will be in -kind and local funding. The break down of the local funding ($3,971) is as follows: (travel and training - $1,223, office supplies - $600, electrical - $1,080, and janitorial - $1,068). The local funding is available in the Police Department general fund budget. The program is currently in its third year. Page 9 of 11 Minutes of the Regular Session — March 13, 2003 d. Proposed Resolution No. 030313 -4 requests the sheriff or constable to sell the properties located at 5903 Decker Drive and 611 Mayo, Baytown, Hams County, Texas, at a public sale pursuant to Section 34.05(c) of the Texas Tax Code. In 1997, the Legislature amended the Tax Code to allow taxing entities to sell via a public sale property held by a taxing entity as a result of the receipt of an insufficient bid at a tax foreclosure sale. At a public sale, the properties will be sold at a public auction at the courthouse door of the county on the first Tuesday of the month, between the hours of 10:00 a.m. and 4:00 p.m. The acceptance of a bid at such a sale is conclusive and binding on the question of its sufficiency. As such, it is believed that this process will provide the City an efficient mechanism for (i) returning deteriorated or unproductive properties to the tax rolls, (ii) enhancing the value of ownership to the properties neighboring those which have been bid off to the City in tax foreclosure sales, and (iii) improving the safety and quality of life throughout the City. This resolution authorizes the sale of the following properties: (1) Property Address: 5903 Decker Drive, Baytown, Texas 77520 Legal Description: Tract 2B, Block 27 (016 *PT LT 2), Highland Farms Number and Style of Suit: Cause No. 1988 - 17149; City of Baytown v. Texas Oil and Gas Corp.; In the 55`h Judicial District Court, Harris County, Texas Date of Tax Foreclosure Sale: 4/6/93 (2) Property Address: 611 Mayo, Baytown, Texas 77520 Legal Description: South 50 feet of Lot 3, Lee Heights Number and Style of Suit: Cause No. 1990 - 47328; City of Baytown v. Merced Arthur Oviedo; In the 157t` Judicial District Court, Harris County, Texas Date of Tax Foreclosure Sale: 8/3/93 The right of redemption has expired on each property. Each property contains no improvements. Council Member Mundinger moved adoption of the consent agenda, items a through d. Council Member Anderson seconded the motion. The vote follows: Ayes: Council Members Anderson, Godwin, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. The motion carried. ORDINANCE NO. 9535 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, RENEWING THE CONTRACT OF GOLDEN TRIANGLE PIPE FOR THE ANNUAL REPAIR CLAMP CONTRACT AND AUTHORIZING PAYMENT BY THE CITY OF BAYTOWN, IN THE SUM OF SEVENTY -THREE THOUSAND FIVE HUNDRED TWENTY -SEVEN AND 40/100 DOLLARS ($73,527.40); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Page 10 of 11 Minutes of the Regular Session — March 13, 2003 ORDINANCE NO. 9536 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING THE PAYMENT OF THE SUM OF FORTY -THREE THOUSAND EIGHT HUNDRED AND N01100 DOLLARS ($43,800.00) TO CASCO INDUSTRIES, INC., AS THE SOLE SOURCE FOR FIRE FIGHTING PROTECTIVE CLOTHING; MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. RESOLUTION NO. 1575 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING THE CITY MANAGER TO MAKE APPLICATION TO THE HOUSTON GALVESTON AREA COUNCIL FOR THE CONTINUATION OF THE FAMILY VIOLENCE COUNSELING GRANT; DESIGNATING AN AUTHORIZED REPRESENTATIVE; AUTHORIZING THE REPRESENTATIVE TO ACCEPT OR AFFIRM ANY GRANT AWARD THAT MAY RESULT THEREFROM; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. RESOLUTION NO. 1576 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, REQUESTING THE SHERIFF OR CONSTABLE TO SELL THE PROPERTIES LOCATED AT 5903 DECKER DRIVE AND 611 MAYO, BAYTOWN, HARRIS COUNTY, TEXAS, AT A PUBLIC SALE PURSUANT TO SECTION 34.05 (C) OF THE TEXAS TAX CODE; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Consider confirmation of City Manager's appointment to the Baytown Library Board. The term of Tom Hadnot, who recently passed away, expired March 1, 2003. Steve Ellis has agreed to serve to replace the late Mr. Hadnot. Council Member Mundinger moved confirmation of the City Manager's appointment of Steve Ellis to the Baytown Library Board. Council Member Murray seconded the motion. The vote follows: Ayes: Council Members Anderson, Godwin, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. The motion carried. Consider confirmation of the City Manager's appointments to the Civil Service Commission. The appointments are for unexpired terms. Al Weatherall and Mark Himsel have submitted resignations. Mr. Weatherall's term expires January 1, 2006. Mr. Himsel's term expires January 1, 2004. Judy Hunter has agreed to fill the position left vacant by Mr. Weatherall's resignation. Ruben Linares has agreed to fill the position left vacant by Mr. Himsel's resignation. Page 11 of 11 Minutes of the Regular Session — March 13, 2003 Council Member Anderson moved confirmation of the City Manager's appointment of Judy Hunter and Ruben Linares to the Civil Service Commission. Council Member Mundinger seconded the motion. The vote follows: Ayes: Council Members Anderson, Godwin, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. The motion carried. City Manager's Report City Manager Jackson informed Council that the City had received the Government Finance Officers Association Budget Award. He noted that this is the highest recognition possible and commended Finance Director Donna Sam and her staff for their efforts. Mr. Jackson announced that the annual Trash Off will be held on Saturday, April 5, 2003. He added that the program has been scaled back due to budget constraints as well as a drop in donations. Mr. Jackson said that an amendment to the ordinance regarding private sewer line repair will be on an upcoming agenda. The amendment is necessary in order to address the exfiltration issues on private lines. He said the changes will include a deadline for the repair, with possible extensions for extenuating circumstances. Adjourn. Council Member Mundinger moved that the meeting adjourn. Council Member Sheley seconded the motion. The vote follows: Ayes: Council Members Anderson, Godwin, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. The motion carried. There being no further business, the meeting adjourned at 7:46 p.m. aw"/� Gfiry W. Smith City Clerk MINUTES OF THE WORK SESSION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN March 13, 2003 The City Council of the City of Baytown, Texas, met in work session on March 13, 2003, at 5:35 p.m. in the Council Chamber of Baytown City Hall, 2401 Market Street, Baytown, Texas, with the following in attendance: Ronnie Anderson Coleman Godwin Calvin Mundinger Don Murray Mercedes Renteria III Scott Sheley Pete C. Alfaro Gary M. Jackson Karen Horner Gary W. Smith Council Member Council Member Council Member Council Member Council Member Council Member Mayor City Manager Assistant City Attorney City Clerk The meeting was opened with a quorum present after which the following business was conducted: Discuss health care funding. City Manager Gary Jackson reminded City Council of the work session on health care funding held one month before. There is no recommendation for action at the regular Council meeting. A recommendation for action will be brought to Council at a later meeting. Human Resources Director Alison Smith explained that health care costs are currently funded by the City paying 91.5% of the costs and the employees paying 8.5% of the costs. The cost of health care has increased each year since 1998. The total expense for health care increased from $2.2 million to $3.5 million in 2003. For the General Fund, the increase was from $1.7 million to $2.8 million. For the Water & Sewer Fund, the increase was from $320,000 to $476,000. For other funds, the increase was from $171,000 to $259,000. Funding for the 2003 health care costs is as follows: S3.5 million from the City; $775,000 from the employees; $126,000 from the retirees; $41,000 from interest earnings; and $69,000 from retained earnings. Since 1999 the plan has been operating at a deficit. The excess costs have been taken from retained earnings. The deficit for 2000 -2001 was 13 %, for 2001 -2002, it was 8 %, and for 2002 -2003, it is projected to be 2 %. Since 1999 more than $1 million has been used from retained earnings to pay health care costs. Other cities were surveyed to determine how they handled retiree insurance. All of the surveyed '' cities allow retirees to remain on the city's insurance plan. In Baytown the retiree pays 8.5% of the health care cost. In six of the cities, the retirees pay 100% of the health care premiums. In LaPorte and Victoria the premium paid is based on the years of service with the city. The surveyed cities determine the rate by combining the experience of retirees with the experience of the employees. Page 2 of 3 Minutes of the Work Session — March 13, 2003 ATIN There has been a significant increase in the payments to the Medical Benefits Fund since 2001. Part of the increase in personnel cost is due to the increase in the payments to the Medical Benefits Fund. The budget ordinance adopted in 1993 provided that any employee hired after October 1, 1993, upon retirement would pay the full health care premium, without City participation. The Council has several options. No change can be made and the 1993 ordinance can be implemented. The Council can repeal the 1993 ordinance and establish a future date that will require all persons hired after that date, upon retirement, to pay the full premium for health coverage. Council could establish a tiered system, so that the premium paid and the City's contribution is based on the years the employee served the City. Mr. Jackson noted that the problem with the 1993 ordinance is that it was not communicated to the employees. It is legal to implement it, but he questions whether enforcement is morally correct. Establishing a future date after which persons hired, upon retirement, would pay the full health care premium does not help the current fiscal problems of the City. A tiered system for all employees would provide some help in the current fiscal problems. Ms. Smith indicated that the increase in the payments to the Medical Benefits Fund is due to the increase in cost of medical claims. Medical costs are projected to increase at a rate of at least 10% per annum. Discuss hventy-year retirement. Mr. Jackson reminded City Council of the information provided last month during a work session presentation on the topic. There is considerable interest in twenty-year retirement in the workforce. However, twenty-year retirement could add additional persons and years to the health care cost problem. It is very hard to project the numbers due to the many variables involved. Ms. Smith reported that there are currently 85 employees eligible to retire under the present twenty- five year retirement program. If the program were changed to a twenty-year program, an additional 49 employees would be eligible to retire. Based on the statewide experience reported by the Texas Municipal Retirement System, ten percent of the eligible employees will take advantage of the earlier retirement date. It would be reasonable to expect an additional five retirees during the first year. There are many variables to consider when trying to project the impact of twenty-year retirement on the heath care program. The variables include retirees taking health coverage at new employment, the age at retirement, the claims experience of the retiree, whether the position is filled and the claims experience of the newly hired employee. Mayor Alfaro stated that early retirement could have impacts on other parts of the budget, including the salary line item. Mr. Jackson noted that the current rate paid to TMRS is 13.84 %. The rate will fluctuate and would be expected to be higher under the twenty-year retirement plan. Ms. Smith concluded by noting that twenty-year retirement aids in a reduction of force, salaries, career planning, and morale and motivation of employees. Page 3 of 3 Minutes of the Work Session — March 13, 2003 Discuss appointments. Council Member Mundinger stated that he would move the confirmation of the City Manager's appointment to the Baytown Library Board, Steve E. Ellis. Council Member Anderson stated that he would move the confirmation of the City Manager's appointments to the Baytown Civil Service Commission, Ruben Linares to fill the vacancy left by the resignation of Mark Himsel and Judy Hunter to fill the vacancy left by the resignation of Al Weatherall. Adjourn. There being no further business, Council Member Murray moved adjournment. Council Member Mundinger seconded the motion. The vote follows: Aye: Council Members Anderson, Godwin, Mundinger, Murray, Renteria and Sheley Mayor Alfaro. Nay: None. The motion carried and the meeting adjourned at 6:25 p.m. G W. 9mith City Clerk