HomeMy WebLinkAbout1979-05-23 Special Meeting~ ~
• MINUTES - SPECIAL MEETING
OF THE
LA PORTE CITY COMMISSION, LA PORTE, TEXAS
MAY 23, 1979
10:00 A.M.
•
MEMBERS OF THE COMMISSION PRESENT: Mayor J. J. Meza;
Commissioners John Tomerlin, Virginia Cline, and Tom C. Simons.
MEMBERS OF THE COMMISSION ABSENT: I. J. Kibodeaux, Commissioner.
OTHER CITY OFFICIALS PRESENT:
J. R. Hudgens, City Administrator;
Margie Goyen, City Clerk; Knox Askins, City Attorney; Hugh Landrum,
Tax Appraiser.
OTHERS PRESENT: Industry Representatives: R. J. Bordner, Thikol
Corporation; Frank Cromer, Phillips Petroleum Company;Dan Simcoe,
Airco, Inc.; Ken McNamara, U.S.I.; John Sandlin, Diamond Shamrock;
Kenneth Clarke, Clarke and Company; J. W. Craddock, Soltex;
J. A. Pearson and F. L. Bender, Jr., Goodyear; R. J. Nicol, Air
Products; Hugh N. Pattersora,Baker & Botts; C. M. Haines, Armak Co.,
R. Jones, ARC Polymers; Bill Edmonds, Du Pont; Dick Stewart, Du Pont;
Joe Ligi, Texas Alkyls; E. F. Aycock, Novamont; Don Sanders, Lubrizol;
Roger Vanden Bos, Upjohn; David S. Creamer, Upjohn; Leonard E. Emge,
Soltex Polymer; and Harry R. White, Southwest Chemical & Plastics.
PRESIDING: Mayor J. J. Meza.
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1. CALL TO ORDER - Mayor Meza called the meeting to order.
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2. JOINT MEETING WITH C'I'TY'COMMISSION AND REPRESENTATIVES OF
INDU$fiRY TO DT'SCUSS THE NEW INDUST'R'IAL DISTRICT AGREEMENTS -
• Mayor Meza stated the meeting had been called at the request
of some of our industrial friends. He started then to introduce
the officials as follows:
•
• Special Meeting 5/23/79 2
2. JOINT MEETING WITH CITY COMMISSION AND REPRESENTATIVES OF
INDUSTRY TO DSSCUSS THE NEW INDUSTRIAL DISTRICT AGREEMENTS
(CONTINUED)
Commissioner Tom C. Simons, Commissioner Virginia Cline,
Commissioner John Tomerlin, City Secretary/Clerk, Margie Goyen,
and himself; the resource personnel, City Attorney, Knox Askins,
Tax Consultant, Hugh Landrum, and City Administrator, Jim Hudgens.
Mayor Meza stated that the City Attorney would start the discussion
and would rely on the expertise of Hugh Landrum and Jim Hudgens
to answer questions regarding City policy.
The City Commission left the Council Bench and took seats in
front of the Council Bench at the tables nearer the industrial
representatives.
Mr. Askins expressed appreciation to all the industrial repre-
sentatives for coming to the meeting to discuss the new industrial
district contracts, and gave a bit of history regarding the first
industrial contracts.
Mr. Hugh Patterson of Baker & Botts was present and had been
• present some 21 years ago when the first industrial contracts
were made. He was of the opinion that La Porte was the first
City in the state of Texas to have industrial contracts. These
contracts were formalized and validated by legislation in 1963.
The concept being that for seven years the City agrees ,not to
annex any additional land from that industry. The company is
annexed by 25~, and they pay total ad valorem taxes on that 25~.
On the remaining 75$, they pay in lieu payment rate which is
25~ of the ad valorem tax rate. The current contracts with
industry will expire on August 31, 1979. The bottom line would
be 43.75 of the tax rate.
Over the years the government of the City of La Porte has been
very, very conservative. To prove this the City of La Porte
has had a stable tax rate since 1948. In fact now, it is one
cent lower than it was at that time. In 1977 it was up ten to
fifteen cents, but now it is lower. Many citizens of La Porte
work for industry. The Chamber of Commerce now has a Salute to
Industry Week showing appreciation to industry.
La Porte
doing in
land and
Pasadena
• the both
has tried to stay aware as to what other cities are
regard to industry; in 1977, Houston took 100 of their
60~ of improvements; the bottom line would be 60+.
was 50$ and Deer Park was 35~ of the plant annex, and
~m line would be 45~.
• Special Meeting 5/23/79 3
The time table for the contracts would be about a month.
Within thirty days we would like to formalize the contracts,
keeping them as simple as possible; asking that each industry
send a field note description.
Mr. Hugh Patterson spoke on the first industrial contract
negotiations, the proposed contracts, and that he was
representing Du Pont, Houston Lighting & Power and Upjohn.
Mr. John Sandlin felt that the effective. tax rate would be
approximately 100$ increase.
Literature was handed out to all representatives showing the
top ten revenue accounts over, the past six years, and seven
months of the current year and general information, capital
projects and fiscal requirements.
The City Administrator discussed the top ten revenue sources
and the first seven months of the current year, giving some
idea of the increases.
• The Administrator read a memorandum: In February of this
year the citizens of La Porte authorized the City-Council to
issue $3,250,000.00 in general obligation bonds to finance
sanitary sewer and potable water capital projects. These
are the first bonds to be authorized and issued by the City
of La Porte since 1965. During the hiatus of 1965-1979, La Porte
has experienced substantial population growth with the majority
of that growth coming in the past three to five years. Since
1970, for example, La Porte's population has increased from
7,149 (1970 census figure) to 11,025 (1978 special local census),
an increase of 64 percent. This fast-paced growth is continuing.
In the past 32 months the City of La Porte has issued 891 resi-
dential and 51 commercial building permits. In addition, the
three major tract subdivisions in La Porte (Fairmont Park, Glen
.Meadows and Creekmont) have approximately 2,000 more home sites
platted for development in the next few years.
This fast-paced growth has placed a substantial strain on
the City's facilities and the administration's ability to maintain
an acceptable level of service delivery. Some items related to
service delivery were/are the facilities, equipment and staff
concerned with the overall management, accounting and information
systems that provide support to the Council in determining policy
and legislation for the proper administration of the government;
facilities, equipment and staff to provide for Police and Fire
services; facilities for the collection and treatment of sanitary
• sewer; adequate long term supply of potable water and the realted
facilities and infrastructure for storage and delivery; improved
drainage, streets, street lighting and recreational facilities,
etc., etc.
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Special Meeting 5/23/79
4
La Porte has been, is and will continue to be directed and
governed by elected officials who are prudent and fiscally
responsible in the discharge of their responsibilities. This
Council has, in the past three years, begun to improve upon
some of the problems mentioned above. Two capital improvements
have been completed and substantial action has been taken on
three others. The City Hall and the Police Building were
completed this year. Forty acres of raw land has been purchased
for park development. and $3,250,000.00 of local bond funds have
been committed for water and sanitary sewer improvements.
In addition to and including part of the above, the following
are a list of capital improvements with estimated costs that
will be considered over the next seven to ten years.
*Construction of a new 2.5 mgd
sanitary sewer plant, line re-
habilitation and construction $2,000,000.00
**Construction of approximately
14.1 miles of water transmis-
sion mains to loop the City's
water system 3,250,000.00
Conversion to surface water 8,000,000.00
Drainage and street improvements 6,000,000.00
Construction of Public Works
Service Center 300,000.00
Park and Recreation development 1,000,000.00
$23,250,000.00
Less current funded amt. (3,250,000.00)
Unfunded $20,000,000.00
NOTE:
*This $2,000,000.00 represents the City's 25 percent share
of the $6,000,000.00 required to construct the project.
The remaining $4,000,000.00 is being provided by an E.P.A.
grant under PL 92-500. These funds were authorized in the
City's February bond issue.
i
**$1,250,000.00 of these project costs were also authorized
• in the Frbruary bond election, leaving a balance of
$2,000,000.00 unfunded.
•
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• Special Meeting 5/23/79 5
In order to implement construction and complete the above
capital projects in a reasonable manner and consistent with the
City's ability to pay, strict adherence to fiscal responsibility
of operations and maintenance funding and expenses and sound
fiscal planning of long term debt is essential. Attached to this
document is a graph that delineates the City's actual budgets
for fiscal years 72-73 through fiscal years 78-79 and the pro-
jected budgets for fiscal years 79-80 through fiscal years 85-86.
The projected budget amounts assume an eight (8) percent increase
in inflation and growth per year on a straight line basis. The
projections. depict an increase over seven (7) years of $3,300,000.00
- approximately $470,000.00 per year. This projected increase does
not include the long-term debt requirements for the aforementioned
capital improvements to be outlined below or the increased opera-
tions and maintenance costs related to the new and additional
facilities.
•
In planning the long-term debt, many factors tangible and
intangible must be considered by the City Council. And, one of
the major factors is the annual debt requirement. For discussion
purposes, let's assume a six (6) percent interest rate on
$1,000,000.00 to be paid in twenty equal principal payments of
$50,000.00. The first year's debt service would be $110,000.00
($50,000.00 principal and $60,000.00 interest) with each subse-
quent payment declining in interest only. Over the twenty-year
pay out on the bonds, the average annual debt service require-
ment per million dollars would be approximately $85,000.00. If
these assumptions were applied to the needed capital improve-
ments and the projected increases in the operations and mainte-
nance budgets, the City's fiscal requirements would increase by
over $2,000,000.00 per year immediately.
The purpose of providing this information is not to justify
the proposed contract but to provide industry with information
about the problems and needs of the City. In addition, it is a
forum to let you know that the elected officials who have
the ultimate responsibility to provide sound and efficient
government are committed to that objective.
There was a brief discussion regarding the needs of the City
and the fact the items mentioned were not the only needs, but
the needs far exceed the revenue.
The February Bond Election was discussed. It was determined
that the bond issue passed almost three to one.
The question was asked if the City gets Revenue Sharing. It
was determined that we do get Revenue Sharing Funds, but the
money is not spent for operation costs.
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• Special Meeting 5/23/79 6
Joe Ligi asked if any one revenue was growing faster? The
Administrator stated that the sales tax and ad valorem tax
because of our growth.
The question was asked what the City would have to do to go
on surface water. The City will contract with Houston on a
take or pay basis.
Industry has been told to close their wells and convert to sur .-
face water.
The question was asked if we anticipate substantial tax increase
in the future. The City does not.
The Administrator stated that the City had done a complete
re-evaluation of all property this past year. A $15,000.00
tax exemption was given to the over-65 or fixed income citizen.
The tax rate dropped and the City dropped the sales tax on
utility bills. The re-evaluation was to equalize not increase
revenue. Sufficient information was given to the public to
inform them of this equity and it was well received quite well.
• It was determined that the large increase in the budget for the
past two years was due to increase in personnel and capital
equipment; upgrading of equipment will continue for the next few
years.
It was determined that due to the officials conservative
fiscal responsibility that both the new city hall and police
building were paid for out of accumulated surplus and did not
use the Revenue Sharing funds for operating.
The City does not use grant funds for operational money. We have
one police officer and his employment is contingent on grant funds.
The question was asked if there was a surplus of funds? The
Administrator stated that he felt there was no surplus. At the
end of the budget year we had $785,000.00. It costs $350,000
per month to operate.
It was determined that the City had 128 full time employees.
We have reduced from 179 to 128. The most part of the reduction
was when we ended the CETA employment. The City determined that
was more of a liability than an asset.
The question was asked if on the Chart of Accounts, it included
annexing part of industry. Yes, it does, 50$/508.
• The City's fiscal year is October 1 through September 30.
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• Special Meeting 5/23/79
The question was asked how projections were made since
some companies ire making sizable expansions. It was
determined that the projections were based on a .91 cent
rate; and the City does. not expect the tax rate to increase
over the next two years.
Projections were not made on what the needs are, but listed
only about one-half of what the City really has to do.
The questions was asked if the City wasn't ignoring the
biggest and best amount, which would be wages?
7
The Administrator stated that La Porte couldn't compete with
industry. However, at the present time we are developing a
wage and salary schedule and have not determined the costs.
Industry has a yearly cost of living increase. The City of
La Porte gave 4~ year before last, and 10~ last year. In
planning the budget, with the presidents request of 7$, the
City does not know what they are going to do in regard to
wages.
The budget will be submitted to the Council on August 15 and
• they will have 45 days for review before final acceptance.
No preliminary budget has been prepared. The forms are being
made and preliminary work has begun.
3. ADJOURNMENT - The meeting adjourned at 11:23 A.M.
o ~
Margie yen, Cit Clerk
Passed and Approved this.
the 6th day of June, 1979.
J. J. Meza, Mayor '
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