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2003 10 09 CC MinutesMINUTES OF THE REGULAR SESSION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN October 9, 2003 6:30 p.m. The City Council of the City of Baytown, Texas, met in regular session on October 9, 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 Bob Leiper Ignacio Ramirez, Sr. Gary W. Smith Council Member Council Member Council Member Council Member Council Member Council Member Mayor City Manager Assistant City Manager City Attorney City Clerk The meeting was opened with a quorum present. Mayor Alfaro recognized the high school students present. Council Member Sheley led the pledge of allegiance and offered the invocation after which the following business was conducted: Citizen Communications: Steve Coycault, Sr., 3411 Lausanne Ave., Pasadena, Texas, representing the Texas Silver- Haired Legislature, requested that Council freeze City of Baytown taxes for senior and disabled citizens, per Proposition 13, passed on September 13, 2003. Mayor Alfaro referred the request to Administration for response. Reverend Hosea Lane, 302 W. Defee, addressed Council requesting support for the Ladies of Excellence Girls Home. Daniel F. Conejo, 5801 East Road, referred to a letter that had been distributed to Council prior to the meeting and requested approval to tie into an existing sewer line for project development outside the City limits. Mayor Alfaro referred to City Manager Jackson for response. Mr. Jackson said that staff has been studying this issue, noting that the policy has been for commercial businesses to request annexation in order to receive utility services. He said that currently, the City has limited wastewater capacity, and in fact, had sometimes denied service to potential customers inside the City limits due to the problem. He informed Council that this issue as well as that of providing water service outside the City will be on the agenda for the next regularly scheduled Council work session. Page 2ofII Minutes of the Regular Session — October 9, 2003 Presentations: Mayor Alfaro presented Recognition Plaques to the following members of the Baytown -Area Community Long -Range Planning Commission: Don Murray, David Havel, Mike Wilson, Bill Hollaway, Carole Opryshek, and Jim Hutchison. Mayor Alfaro presented Recognition Plaques to Lewis McRee for his service on the Growth Management and Development Advisory Commission/Baytown Zoning Commission. Consider Proposed Ordinance No. 031009 -1, awarding a construction contract for the Kings Bend Subdivision Sanitary Sewer Rehabilitation Project. Proposed Ordinance No. 031009 -1 awards a construction contract in the amount of $632,808.17 to PM Construction & Rehab, L.P. for the Kings Bend Sanitary Sewer Rehabilitation Project. The scope of work includes rehabilitation work primarily using the pipe bursting method, but will also include some removal and replacement by open trench methods, as needed. The total base bid for this project, which includes 9,875 linear feet of eight -inch HDPE pipe bursting, 2,284 linear feet of 10 -inch HDPE pipe bursting, and 621 linear feet of 12 -inch HDPE bursting, is $632,808.17. The engineer's estimate was $853,113, which included at 10% contingency. This work is necessary to alleviate sanitary sewer overflow problems within the subdivision. The construction duration for this project is 90 calendar days. This project will be funded by 2003 Certificates of Obligation. Council Member Anderson 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. 9647 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING AND DIRECTING THE CITY MANAGER AND CITY CLERK TO EXECUTE AND ATTEST TO A CONTRACT WITH P M CONSTRUCTION & REHAB, L.P., FOR THE KINGS BEND SANITARY SEWER REHABILITATION PROJECT; AUTHORIZING PAYMENT OF THE SUM OF SIX HUNDRED THIRTY -TWO THOUSAND EIGHT HUNDRED EIGHT AND 17/100 DOLLARS ($632,808.17); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Page 3 of 11 Minutes of the Regular Session — October 9, 2003 ., Consider Proposed Ordinance No. 031009 -2, approving Supplemental Agreement No. 1 to the contract for engineering services with Halff Associates, Inc. for engineering and landscape architectural consulting services for the development of the Goose Creek — Phase IV Hike and Bike Trail. Proposed Ordinance No. 031009 -2 approves Supplemental Agreement No. 1 in the amount of $46,792.76 with Halff Associates, Inc. for engineering and landscape architectural consulting services and the preparation of plans and specifications for the Goose Creek — Phase IV Hike and Bike Trail. This 1.25 mile extension will be constructed with an 80/20 grant utilizing Congestion Mitigation Air Quality (CMAQ) grant funds administered by the Texas Department of Transportation (TxDOT). Local match funds are through an interlocal agreement with the Baytown Municipal Development District (MDD). The funding for these additional services is as follows: 80% ($37,434.21) from CMAQ and 20% ($9,358.55) from MDD. Total funding for the services of Halff Associates, Inc. is $259,096.99 with 80% ($207,277.59) from CMAQ and 20% ($51,819.40) from MDD. Because of a change in the scope of services it has become necessary to amend the contract to provide additional engineering, surveying, environmental/archeological, geotechnical, and hydrologic and hydraulic services. The revised scope of services is due to the change from a hike and bike trail to a pedestrian trail. The pedestrian trail will now follow close to Goose Creek including going under the Decker Drive and Park Street bridges rather than crossing the roadways at grade. This change has added two underpasses, one bridge and several boardwalks along the trail. The proposed trail will connect Goose Creek Park, located next to West Texas Avenue, to the intersection of Garth Road and Schilling Street, following Goose Creek. An additional trail will connect the trail to the Central Little League Park trail and the Graywood Subdivision. Mark Patterson, contracts administrator with TxDOT, has reviewed and approved the contract amendment. The project is scheduled for a December 2005 letting by TxDOT. Council Member Renteria 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. 9648 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE SUPPLEMENTAL AGREEMENT NO. 1 TO CONTRACT FOR ENGINEERING SERVICES WITH HALFF ASSOCIATES, INCORPORATED FOR PROFESSIONAL SERVICES FOR ADDITIONAL ENGINEERING, SURVEYING, ENVIRONMENTAL, GEOTECHNICAL, AND HYDROLOGIC AND HYDRAULIC SERVICES ASSOCIATED WITH THE DESIGN, ENGINEERING AND DEVELOPMENT OF PHASE IV OF THE GOOSE CREEK STREAM PEDESTRIAN TRAIL; AUTHORIZING PAYMENT BY THE CITY OF BAYTOWN IN AN AMOUNT OF FORTY -SIX THOUSAND SEVEN HUNDRED NINETY -TWO AND 76/100 DOLLARS ($46,792.76); MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Page 4 of 11 Minutes of the Regular Session — October 9, 2003 Consider Proposed Ordinance No. 031009 -3, authorizing an amendment to the Purchase and Sale Agreement by and between the City of Baytown and Degussa Engineered Carbons, L.P. On April 10, 2003, the City Council approved a Purchase and Sale Agreement for the acquisition of approximately 47.6077 acres of land for the Northeast Wastewater Treatment facility for $135,000. The agreement was expressly contingent upon and subject to the approval by the City Manager of an environmental site assessment ( "ESA ") of the property. During the performance of the ESA, the City discovered a certain railroad spur and a storage yard, which were not included on the survey of the property subject to the Agreement. Therefore, on August 7, 2003, the City and Degussa executed an agreement to extend the contingency to allow more time for the parties to research the exact location of these developments, to survey a potential alternative access fee strip, and to endeavor to obtain a crossing agreement from the owner(s) of the properties separating the two tracts of land. During this extension period, discussions with Degussa and Union Pacific ensued and ultimately resulted in a revision to the site plan. As such, the amended Purchase and Sale Agreement includes the following: Tract Description of Property Price 1 43.9651 acres located adjacent to Cedar Bayou Stream $124,670.77 2 Approximately 12.67 acres adjacent to Needlepoint Road for access to Tract 1 $5,500.00 per acre 3 An easement across a portion of the property separating Tracts 1 and 2 $1.00 The amendment is contingent upon and subject to the approval by the City Manager of an ESA for Tract 2. The closing date pursuant to the amendment is December 19, 2003. Council Member Murray moved adoption of the proposed ordinance. Council Member Godwin seconded the motion. Mayor Alfaro thanked Mr. Jackson and Assistant City Manager Leiper for their assistance in negotiations with Union Pacific Railroad. The vote follows: Ayes: Council Members Anderson, Godwin, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. The motion carried. ORDINANCE NO. 9649 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AMENDING THE PURCHASE AND SALE AGREEMENT WITH DEGUSSA ENGINEERED CARBONS, LP, FOR THE ACQUISITION OF APPROXIMATELY 56.635 ACRES ALONG WITH AN ACCESS EASEMENT FOR THE PROPOSED NORTHEAST DISTRICT WASTEWATER TREATMENT PLANT; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Page 5 of 11 Minutes of the Regular Session — October 9, 2003 Consider Proposed Ordinance No. 0310094, authorizing the extension of the Collective Bargaining Agreement between the City of Baytown, Texas, and the International Association of Firefighters Local 1173 until October 23, 2003. On September 13, 2001, the City Council approved a collective bargaining agreement with Baytown Professional Fire Fighters Association, Local No. 1173. Such agreement expired on September 30, 2003. In anticipation of such expiration, the City's bargaining team met on April 14, 2003, with the Baytown Professional Firefighters Association to begin the collective bargaining process. The Union's bargaining team consisted of Louis Hebert, Chief Negotiator, Thomas Carr, Walter Horton and Mike Burns. The City's bargaining team consisted of Bettye Lynn, Chief Negotiator, Ignacio Ramirez, Sr., and Alison Froehlich- Smith. After seven negotiation sessions, the parties reached a tentative agreement on September 30, 2003. The fire fighters local will be voting on the agreement on the 15`h and 16`h of October. The City Council will be considering the same at its meeting on October 23, 2003. Extending the expired agreement will clarify what compensation the employees covered by collective bargaining should be paid during the period in which there would otherwise be no agreement. Extending the agreement will also continue the probationary status of firefighters hired since approval of the expired agreement and will continue an existing grievance. 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. 9650 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING THE EXTENSION OF THE COLLECTIVE BARGAINING AGREEMENT BETWEEN THE CITY OF BAYTOWN, TEXAS, AND THE INTERNATIONAL ASSOCIATION OF FIREFIGHTERS LOCAL 1173 UNTIL OCTOBER 23, 2003; PROVIDING FOR A REPEALING CLAUSE; CONTAINING A SAVINGS CLAUSE; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Page 6 of 11 Minutes of the Regular Session — October 9, 2003 Consider Proposed Resolution No. 031009 -1, approving the purchase of an office building by the Harris County Appraisal District. Proposed Resolution No. 031009 -1 approves the lease- purchase of a headquarters building, located at 13013 Northwest Freeway, Houston, Texas by the Harris County Appraisal District (HCAD). HCAD anticipates a significant savings in annual operating expense if allowed to relocate from the present leased space at 2800 North Loop West, Houston, Texas. Tax Code Section 6.051 provides that the acquisition of real property by an appraisal district must be approved by the governing bodies of three- fourths of the taxing units entitled to vote on the appointment of board members. The enclosed resolution would approve the purchase as requested by HCAD. An entity that does not indicate approval is considered a no vote. Should Council desire to delay action on this item, action may be delayed until November 14, 2003, or thirty (30) days after the date of the HCAD meeting to be held on October 15, 2003. Council Member Sheley moved adoption of the proposed resolution. Council Member Murray seconded the motion. There was brief discussion regarding the new location. The vote follows: Ayes: Council Members Anderson, Godwin, Mundinger, Murray, Renteria, and Sheley. Mayor Alfaro. Nays: None. The motion carried. RESOLUTION NO. 1608 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, APPROVING THE PURCHASE OF AN OFFICE BUILDING BY THE HARRIS COUNTY APPRAISAL DISTRICT; CONTAINING A SAVINGS CLAUSE; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Consider Proposed Resolution No. 031009 -2, granting a petition for annexation submitted by SR ZM Corporation and authorizing preparation of a service plan. Proposed Resolution No. 031009 -2 grants a petition for annexation submitted by SR ZM Corporation, dba South East Development Corporation, to annex a 28.809 -acre tract of land in the Nathaniel Lynch Survey, Abstract 44. The property is located adjacent to the north right -of- way line of I -10 between the service station at Crosby - Lynchburg Road and the roadside park. The property is proposed to be developed as an RV Park and annexation is necessary for the property to be served with utilities. The proposed resolution will direct staff to prepare a service plan for the proposed annexation and to schedule the necessary public hearings. Council approved a petition for annexation on August 14, 2003. That petition included a property description that failed to include the entire tract. Due to the failure of the property owners to provide the complete legal description, the petition for annexation is being brought back to Council for consideration. Page 7 of 11 Minutes of the Regular Session — October 9, 2003 Council Member Sheley 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. 1609 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, GRANTING THE PETITION OF SR ZM CORPORATION CONCERNING THE ANNEXATION OF 28.809 ACRES OF LAND IN THE NATHANIEL LYNCH SURVEY, ABSTRACT NO. 44, BAYTOWN, HARRIS COUNTY, TEXAS; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Consider approval of the plans and specifications for Phase I of the 2001 Street Bond Program and authorize advertisement for bids. Consider approval of the plans and specifications for the Street Bond Program and authorize advertisement for bids. The plans and specifications cover the streets included in Phase I of years 1 and 2 of the Street Bond Program. The scope of work includes the reconstruction of existing streets with new reinforced concrete pavement and some utility work within the rights - of -way. The streets included in Phase I are: Amy Drive, McFarland Drive, Country Club Drive, Ashwood Drive, Fleetwood Drive, Ohio Street, Utah Street, and Tanglewood Drive. The estimated construction cost is $3,341,111.15. The construction duration for this project is 180 calendar days. Council Member Sheley moved approval of the plans and specifications for Phase I of the 2001 Street Bond Program and authorization for advertisement for bids. 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. Consent Agenda a. Proposed Ordinance No. 031009 -5 a Software Maintenance Agreement, a Software Support and Maintenance Agreement and a General Software Services Agreement with Class Software Solutions Ltd. in the amount of $38,687.50. This software will replace the current AIX software package with a Windows based SQL server package. Page 8of11 Minutes of the Regular Session — October 9, 2003 The new software will enhance current services such as reservations as well as provide membership, scheduling and payments. This software also has the ability to add modules for future enhancements such as on -line reservation and confirmation. Funding is available in the ITS Capital Purchase account. b. Proposed Ordinance No. 031009 -6 approves purchase of fire equipment in the amount of $29,739.23 for the new Pumper Fire Truck and the new Aerial Quint Fire Truck as follows: Company: Amount: Casco $9,859.00 Municipal Emergency Services $5,250.00 Wilson Fire Equipment $14,630.23 This expenditure requires Council approval because the aggregate amount for fire equipment exceeds $25,000. Casco and Wilson Fire Equipment are QISV vendors. Municipal Emergency Services was low bidder on the remaining items. A local government that participates in the cooperative purchasing program established under sections 271.082 and 271.083 of the Local Government Code satisfies otherwise applicable competitive bidding requirements when it makes a purchase through the catalogue purchasing procedure established by Section 2157.067 of the Government Code. The purpose of the QISV (Qualified Information Systems Vendors) Catalogue Purchasing Program is to allow for qualified entities (state agencies and political subdivisions) to purchase automated information systems products and/or services in an efficient, cost effective, and competitive procurement method. This purchase is funded by the 2001 General Obligation Bond Program. C. Proposed Resolution No. 031009 -3 cancels the Council meetings scheduled for the fourth Thursday of November and the fourth Thursday of December, 2003, and calls a special Council meeting on Tuesday, November 25, 2003. This scheduling avoids conflicts with the Thanksgiving and Christmas holidays. Council Member Renteria moved adoption of the consent agenda, items a through c. 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. Page 9 of 11 Minutes of the Regular Session — October 9, 2003 ORDINANCE NO. 9651 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE AND THE CITY CLERK TO ATTEST TO A SOFTWARE SUPPORT AND MAINTENANCE AGREEMENT, A GENERAL SOFTWARE SERVICES AGREEMENT AND A SOFTWARE LICENSE AGREEMENT WITH CLASS SOFTWARE SOLUTIONS LTD.; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. ORDINANCE NO. 9652 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, AUTHORIZING THE PAYMENT OF TWENTY -NINE THOUSAND SEVEN HUNDRED THIRTY -NINE AND 23/100 DOLLARS ($29,739.23) TO CASCO, MUNICIPAL EMERGENCY SERVICES, AND WILSON FIRE EQUIPMENT FOR THE PURCHASE OF FIRE APPARATUS FOR THE NEW PUMPER FIRE TRUCK AND THE NEW AERIAL QUINT FIRE TRUCK; MAKING OTHER PROVISIONS RELATED THERETO; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. RESOLUTION NO. 1610 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS, CALLING A SPECIAL COUNCIL MEETING TO BE HELD ON NOVEMBER 25, 2003, AT 6:30 P.M., IN THE COUNCIL CHAMBERS OF CITY HALL, BAYTOWN, TEXAS; CANCELING THE REGULAR COUNCIL MEETINGS TO BE HELD ON NOVEMBER 27, 2003, AND DECEMBER 25, 2003, AT 6:30 P.M., IN THE COUNCIL CHAMBERS OF CITY HALL, BAYTOWN, TEXAS; AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. Consider appointment of an alternate member to the Local Law Enforcement Block Grant Advisory Board. The terns of the grant do not require that a member of the Board be a resident of the City. Reverend Richard Turner (Alternate) has agreed to continue to serve on the Board if reappointed. Council Member Anderson moved appointment of Reverend Richard Turner as an alternate member of the Local Law Enforcement Block Grant Advisory Board. 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. Page 10 of 11 Minutes of the Regular Session — October 9, 2003 Consider appointments to the Community Development Advisory Committee. CDAC holds public hearings, reviews the status of funded programs, and establishes an annual budget for the Community Development Block Grant funds. Terms for the following members will expire on January 1, 2004: Angel Sandoval, Joe Wheat, Kitty Allen, and Carl Burg. They represent Council Districts 1, 2, 3, and 4 respectively. Angel Sandoval of Council District 1 does not wish to be reappointed. The remaining members have agreed to serve an additional term, if reappointed. During the past year, Mr. Wheat attended six meetings, Ms. Allen attended seven and Mr. Burg attended seven of the seven meetings of CDAC. Council Member Renteria moved appointment of Deotoro Cantu, Joe Wheat, Kitty Allen, and Carl Burg to the Community Development Advisory Committee. 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 said that the bid packet for Bayland Island had been completed with the opening dated scheduled for December 11. He said that 20 compact discs had been sent to potential bidders and advertising was also being conducted on -line. Mr. Jackson informed Council that Sterling Municipal Library had received its reaccredidation from the Texas State Library and Archives Commission. This will give it continued access to grant funds as well as staff development, training and other services. Mr. Jackson reminded Council that an item to discuss the provision of utility services outside City limits will be on the next work session agenda. Mr. Jackson announced that the West Baytown Fall Cleanup had been held on Saturday, October 4, 2003. The Neighborhood Protection Division, in conjunction with the West Baytown Civic Association, Industry Partners, Business Partners, and 442 volunteer participants, had filled 11 roll -off containers with 440 cubic yards of trash. Five tons of scrap metal was recycled, four and one -half miles of streets and alleys were cleaned and 1,780 tires were collected and recycled. Page 11 of 11 Minutes of the Regular Session — October 9, 2003 Consider approval of minutes of the work session and regular meeting held on September 25, 2003. Council Member Mundinger moved approval of the minutes of the work session and regular meeting held on September 25, 2003. 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 tamed. Adjourn. Council Member Murray moved that the meeting adjourn. 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. There being no further business, the meeting adjourned at 7:20 p.m. Ggjry W. Smith City Clerk opk MINUTES OF THE WORK SESSION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN October 9, 2003 The City Council of the City of Baytown, Texas, met in work session on October 9, 2003, at 5:05 p.m. in the Hullum Conference Room of Baytown City Hall, 2401 Market Street, Baytown, Texas, with the following in attendance: Coleman Godwin Ronnie Anderson Calvin Mundinger Don Murray Mercedes Renteria III Scott Sheley Pete C. Alfaro Gary Jackson Bob Leiper Ignacio Ramirez, Sr. Gary W. Smith Council Member Council Member Council Member Council Member Council Member Council Member Mayor City Manager Assistant City Manager City Attorney City Clerk The meeting was opened with a quorum present after which the following business was conducted: Receive and discuss presentation from San Jacinto Methodist Hospital. Mayor Alfaro announced that he was a member of the Board of Trustees of San Jacinto Methodist Hospital and would not participate in the discussion. Gary Jackson, City Manager, reported to Council that San Jacinto Methodist Hospital had contacted staff and expressed concerns over the impact of ambulatory surgical centers. He explained the role of the Council, as policy maker, in determining whether there is a problem and if there is a role for the City to play in regulation of medical facilities. Traditionally, Baytown has not been involved in such regulation. The purpose of the work session is to hear and evaluate the concerns and determine the role of the City. The State of Texas has chosen to not be involved. S. Jeffrey Ackerman, M.D., President/CEO of San Jacinto Methodist Hospital, addressed Council from a prepared script that was distributed. Rick Peebles and Fritz Lanham, members of the Board of Trustees, were introduced. A copy of Dr. Ackerman's statements is attached to the minutes. Nick Cantu, Chief Counsel for the Methodist Hospital, outlined the federal regulations governing the investment by physicians in hospitals. They must own an interest in the whole hospital. A physician may not own an interest in a freestanding imaging center. Mr. Cantu noted that specialty hospitals do not have emergency rooms. The Emergency Medical Treatment Act Page 2 of 3 Minutes of the Work Session — October 9, 2003 requires a hospital to treat and stabilize any person who arrives at the emergency room in need of medical attention. The United States Senate approved a bill that will limit specialty hospitals, but the United States House of Representatives disagreed. The bill is in a conference committee. Twenty -nine states require proof of need prior to licensing of a hospital. Texas formerly required certification of need, but the requirement ended in 1994. The State could address the issue of specialty hospitals, but has chosen not to do so. The proposed ordinance provides that before the issuance of a building permit for the construction or expansion of a hospital, a feasibility study must be performed on the proposal considering staffing impact, impact on the infrastructure and the impact on the cost of health care. No other city in Texas has adopted such an ordinance, but it is the right and obligation of the City Council to look out for the welfare of the citizens. Council Member Anderson inquired if other area hospitals were having similar problems. Dr. Ackerman responded that the hospital in Pasadena is serving a large percentage of uninsured patients. Council Member Murray expressed concern about using building permits to accomplish the purposes of the ordinance. He views it as an inappropriate mechanism to implement such regulations. The proposal is contrary to free enterprise and the federal, state and county government have chosen not to address the issue. In response to an inquiry from Council Member Murray, Mr. Cantu replied that the State licenses hospitals and the City cannot prevent the State from issuing a license. The City's authority is in the issuance of building permits. Council Member Mundinger stated that he was uncomfortable with the level of protectionism that the proposed ordinance would implement. Dr. Ackerman responded that the hospital belongs to the city and if it is left to competition, it will not exist. Council Member Sheley opined that the problem should be addressed at the federal or state level. There seemed to be a collection problem and a significant issue is health care costs. He asked if adoption of the ordinance would reduce health care costs. Dr. Ackerman responded that health care costs do not follow the free enterprise model. Mr. Sheley asked if the Hospital had asked the County to expand their clinics to relieve pressure on the emergency room. Dr. Ackerman said that they were working with the County. Council Member Murray stated his preference for a direct regulation. Council Member Anderson expressed support for further discussion. Mayor Alfaro stated that patients should be involved in the discussion and an ad hoc committee could be appointed to evaluate and propose a response to the proposed ordinance. Mr. Jackson stated that staff would draw information together to provide to the Council. Council Member Renteria stated that the issue should be resolved at the State level. Receive and discuss presentation from Marcus May, Single Family Market specialist, Southeast Texas Housing Finance Corporation, concerning its single- family affordable housing project. Marcus May, single family marketing specialist with Southeast Texas Housing Finance Corporation, explained that the Housing Finance Corporation served nine counties and thirteen Page 3 of 3 Minutes of the Work Session – October 9, 2003 cities. He outlined a few of the affordable housing programs offered by the Housing Finance Corporation. The Housing Finance Corporation was founded in 1981 and is authorized to issue revenue bonds for single family and multifamily housing projects. Mr. May outlined the single - family mortgage program, the homeowner assistance program, the neighborhood revitalization program, the housing trust fund, the homebuyer assistance program, and the foreclosure program. The programs are designed to assist low and moderate - income persons and families to attain the American dream —home ownership. Discuss plans and specifications for Phases 1 and 2 of the 2001 Street Bond Program. Mr. Jackson reported that the information repeats the information provided in previous meetings. If the base bids come in at a competitive level, the alternate bids may not be necessary and all streets may be included under the base bids. Bill Pedersen, City Engineer, stated that the work is to be completed in 180 calendar days, not including rain days. Discuss appointments. Local Law Enforcement Block Grant Advisory Board Council Member Anderson stated that he would move the appointment of Reverend Richard Turner as alternate to the Local Law Enforcement Block Grant Advisory Board, after Mr. Jackson explained that the grant does not require residency for board members. Community Development Advisory Committee Council Member Renteria stated that he would move the appointment of Demoro Cantu for District 1, Joe Wheat for District 2, Kitty Allen for District 3, and Carl Burg for District 4. Adjourn. There being no further business, Council Member Mundinger moved adjournment. Council Member Murray 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 6:22 p.m. o L/ Gatuy W. Smith City Clerk Presentation to Baytown City Council Work Session By S. Jeffrey Ackerman, M.D. President/CEO San Jacinto Methodist Hospital October 9, 2003 Thank you for allowing me to speak to you tonight about San Jacinto Methodist Hospital, our contributions to the community, and the challenges facing our hospital today. With me tonight are Mr. Fritz Lanham and Mr. Rick Peebles, both members of the Board of Trustees of San Jacinto Methodist Hospital, Mr. Mick Cantu, Chief Legal Officer for The Methodist Hospital System, and Ms. Amy Reddel, Director of Legal Services for Methodist. Founded in 1948, San Jacinto Methodist Hospital was a community hospital built to support the citizens of Baytown by providing quality medical services, job opportunities, and a positive economic impact on the city. Our hospital, the fourth largest employer in Baytown, has been an integral part of the Baytown and surrounding communities for more than 55 years. Because we are a non - profit hospital we are able to deliver quality health care while reinvesting in our community. As a non - profit hospital we do not have shareholders and do not compensate board members. Instead, we reinvest in the hospital to support operations, and develop necessary services to meet community needs. Over the past five years, we have invested $61 million dollars in capital improvements and programming. For example, patients said that they wanted a place to obtain cancer treatment that was close to home. In many cases it was inconvenient and a hardship to travel the more than 25 miles to the Texas Medical Center. Fortunately, we were able to build a freestanding cancer center that provides radiation and chemotherapy services to better serve those patients. Just recently, we expanded our emergency room and laboratory and purchased new technology enabling us to serve more patients with some of the latest in diagnostic and treatment capabilities. Last Sunday there was an article in the Houston Chronicle about emergent cardiac catheterization being better than giving clot busting drugs for an acute heart attack. It went on to say that this procedure is basically done only in large medical centers and that patients might be better off bypassing local community hospitals to get to a major medical center. While this procedure is not available in most of the community hospitals around Houston, I am proud to say that it has been available at San Jacinto Methodist Hospital for over two years. Another example of our reinvestment in our community is our Family Practice Residency Program, which was started in 1980 and continues to this day. This program provides 3 years of training for medical school graduates that want to specialize in Family Practice. While this program does not support itself, we continue to fund it as a service to our community and the State. Several of our graduates have remained in our community, and may even be your physician. In addition to all of the above, we have a long history of supporting schools, charities and service organizations and, today, provide financial support to over 60 of these entities. As you may know, there is a crisis in health care today that encompasses a variety of issues including a shortage of professional staff, increasing malpractice and property insurance expenses, the underinsured and uninsured, decreasing reimbursement for services and competition from physicians. These issues have made it very difficult for us to generate a positive bottom line. Here are a few statistics that illustrate our challenges: • Twenty -five percent of Texans are uninsured. • San Jacinto Methodist Hospital has approximately 15,000 inpatient admissions per year. Ten percent of these patients do not have insurance or other means to pay for their care. And some of these are critically ill patients with extremely large expenses. • The emergency room has approximately 54,000 visits per year. Of these, 14,000 or 26 percent of them are visits by patients who do not have insurance or any other way to pay for their treatment. • From January 1, 1997, through August 2003, San Jacinto Methodist Hospital provided $81 million in charity care, and wrote off $54 million in bad debt, mostly related to those patients who don't qualify for the charity care designation but still cannot afford to pay for their care. This adds up to a staggering $135 million of free care to the residents of Baytown and the surrounding communities. Being a non - profit corporation does not mean that we do not need to generate to generate sufficient money to fund operations. A non - profit hospital needs to generate sufficient funds so that it can reinvest excess funds back into the hospital and the community it serves. A for - profit hospital corporation may not be able to sustain such a financial burden, as mentioned above, and survive, which has been proven by the demise of the two for - profit hospitals that used to be in Baytown. Despite the fact that we have not been profitable over the past five years, San Jacinto Methodist Hospital has continued to invest tens of millions of dollars in improved facilities and services while providing quality health care to our patients, regardless of their ability to pay. The City of Baytown is now facing its most threatening challenge yet, which is why we are here tonight. There is a movement in this country for physicians to invest in what is sometimes called a "specialty" or "short-stay hospital." This type of hospital may be selective about the type of patients admitted and the procedures performed. Meaning, the specialty hospitals only perform profitable procedures and may not serve a proportionate amount of uninsured or underinsured patients. In addition, these hospitals are not required to have emergency departments and, therefore, will not be serving the uninsured that need immediate care. If a specialty hospital were to be developed in Baytown, we expect that it would not provide a full emergency services department and would cater to the less sick patients. This means that San Jacinto Methodist Hospital would be left with all of the complicated cases, the underinsured and uninsured patients and fewer of the paying patients. This is confirmed by a May 2003 General Accounting Office (GAO) report on specialty hospitals that concluded that patients at specialty hospitals were less sick than patients at general acute care hospitals. The advent of a "short -stay hospital" in this community jeopardizes our very existence and ability to serve Baytown and the surrounding communities. In general, hospitals make money on surgeries and other procedures as well as short-stay patients. They lose money on most medical patients, especially the critically ill and complicated cases. In order to be viable financially, San Jacinto must find ways to offset losses associated with charity care and bad debt. This has proven to be extremely difficult in the current environment. In 1997, some of Baytown's surgeons opened an Outpatient Surgery Center across the street from our Garth Campus. These physicians are owners and equity shareholders. Due to their equity involvement, they have gradually transferred more and more of their patients there for outpatient surgery. As a result, our hospital has seen a 25 percent decrease in outpatient surgery cases this year as compared to last year. A new short stay hospital will probably result in a similar decrease in our inpatient surgery volume. We are not here to debate the fact that hospitals and physicians face monetary challenges, and both are looking for ways to improve finances. We are here to talk about the future of our hospital. While San Jacinto Methodist Hospital is technically owned by The Methodist Hospital System it is, in reality, a community asset and its existence is in jeopardy. Its future is in your hands. So how can we protect the health and welfare of our community? We would like to suggest that the Baytown City Council determine that it is in the best interests of the peace, health, safety and welfare of the citizens of the City of Baytown to consider adopting an ordinance that requires the city to review any new or expansion of medical facilities before building permits are granted. This would include expansions at San Jacinto Methodist Hospital. Such an ordinance will ensure that any future health care expansion will be evaluated based on its contribution to the peace, health, safety and welfare of our community. Without such an ordinance, it is unclear whether the citizens of the City of Baytown will continue to have a community hospital to serve their health care needs. We ask for your STRONG consideration and APPROVAL of this ordinance. At this time, I would like to turn the podium over to Mr. Cantu who is here to provide you with additional information on the issues we face and this proposed ordinance. We will be happy to answer your questions when he is finished.