Loading...
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. + + + 1. CALL TO ORDER - Mayor Meza called the meeting to order. + + + 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. n U 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. • • • 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. • • 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. • • 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 ' •