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Minutes - 08/29/2012 f MINUTES FROM THE HUNTSVILLE CITY COUNCIL PUBLIC HEARING HELD ON THE 29TH DAY OF AUGUST 2012, IN THE CITY HALL, LOCATED AT 1212 AVENUE M IN THE CITY OF HUNTSVILLE, COUNTY OF WALKER, TEXAS AT 6:00 PM. The Council met in a regular session with the following: COUNCILMEMBERS PRESENT: Mac Woodward, James Fitch, Lydia Montgomery, Don H. Johnson, Keith D. Olson, Joe Emmett, Tish Humphrey,Ronald Allen COUNCILMEMBERS ABSENT: Clyde Loll OFFICERS PRESENT:Chuck Pinto,Interim City Manager Lee Woodward City Secretary SPECIAL SESSION FOR PUBLIC HEARING [6:OOPM] 1. CALL TO ORDER-Mayor Woodward called the meeting to order at 6:00 p.m. 2. INVOCATION AND PLEDGES —Councilmember Montgomery led the invocation 3. PUBLIC HEARING The Mayor reminded the public that the Council was considering a tax increase but had not made the decision yet. He went through a short PowerPoint presentation discussing the calculation of the effective tax rate,the current state of the budget, and the proposed tax increase. Mayor Woodward opened the hearing at 6:20 p.m. Tamara Chasteen said she was not sure that the proposed County tax increase was a good-enough reason to not raise taxes and lamented the City not doing more Capital Improvement Projects (CIP) or looking at increased staff to do them. She noted the tiny percent of the budget for the arts funding and promoted activities for youth. Ms. Chasteen recalled needed projects in areas of the community and encouraged CIP projects such as sidewalks. She finished by asking that staffing patterns of crews be addressed. Jerry DeWitt said taxes had been raised annually in increased valuations and suggested that the University take a larger role,citing previous combined police forces and SHSU receipts of Hotel-Motel tax. Steve Kelley thanked the Council for their work and discussed the reserve rates with Mayor Woodward. He said he and his wife were retired and had seen a number of increases in property evaluation. ORich Heiland said it was a reality that no one liked taxes and that all expenditures and budget cuts would have critics, acknowledging he supported the arts, understood the necessity of reserves, and suggested budget reductions were another alternative. He asked the Council to consider cuts evenly across the City budget and said he hoped the Council would not bring forward economic development or create new departments in another level of bureaucracy to support. The Mayor noted the line item for economic development had been removed from the budget. Charles Wagamon reminded the Council they were running a "very big business." He recalled the development of his printing business and its subsequent decline, laying off employees instead of borrowing more money, comparing this to raising taxes. Mr.Wagamon said the City would not have a turn down, that remaining employees would step up. He said making significant changes without raising taxes would come down to salaries and benefits. Mr. Wagamon addressed the effective tax rate, noting the increasing expenses of supplies and fuel, and cautioning the Council against raising taxes. Leroy Hilton said the low employee contributions to retirement and insurance were "unprecedented" and suggested early retirement of highly paid employees. He also addressed the allocations of staff around town and the increase in water rates, asking why water restrictions were not still in place. Mr. Hilton encouraged energy conservation around City facilities. He said there were many in the community who had not had raises in years and that increases were not entitled annually. Tamara Chasteen said no one in Huntsville received high pay, which was why employees were not required to make higher contributions, and noted that the stated one-for-one contribution was due to make up for Social Security. She added that water rates were not high, although sewer rates were, and that many people speaking were of an age that their property taxes would not increase. Carol Hilton noted that she had not had a cost of living increase in eleven years as a retired teacher, with swelling insurance and other costs, and encouraged the Council to remember poorer members of the community who could not afford the higher water and tax rates. She said no one in the area were receiving raises and that many others would take the City jobs if they were made available at the current rates and benefits. Kendall Scudder noted he was not retired but agreed that wages in Huntsville were not extremely high. He recalled O speaking with a woman recently who worked three jobs, noting how many on reduced incomes would adversely impact apartment dwellers. Mr. Scudder said he thought the proposed increases in water rates and taxes might also be a deterrent to economic development. He said he did not feel it was logical and that the City should live within its means and remember the people rather than the numbers. The Mayor recalled that there was no increase in the water rates for minimum water usage, noting that increases were connected to user volume. He said the Council was very sensitive to the comments made and to the members of the community, noting the process and decisions were not easy. Marion Wagamon said she had friends who had left town with the first water rate increase. Jerry DeWitt returned to the University not supporting the community,stating the State had given great amounts of land to SHSU but that the County had to purchase land from the State for the new jail. He added that he could not understand raising water rates to build for Trinity River Authority(TRA), a private company. Councilmember Montgomery noted that TRA managed the water system for the City and that the updates and increases were needed over the eight year period prior to the increase in raw water market rates to the City. She added that the upgrades had been amortized so that taxpayers would not be hit with all expenses at the same time. Charles Wagamon said it"boggled the mind"that water had always come down the river and now a company had been given the authority to charge for it and wondered where the public outrage over this was. Councilmember Olson agreed, that he did not know why water costs what it does, but that it is a State issue. He said that TRA was a non-profit organization on daily operations and made a small percentage on the water sales, but that it would cost the same amount whether City or TRA employees ran the facility. Councilmember Olson remembered that the City received about $500,000 back in this year's true-up. He said the average water rate in the City was low, especially compared to a community such as Riverside, but acknowledged that sewer rates were higher due to the terrain and the age of the infrastructure. Councilmember Olson added that the City was considering contracts to sell the City's effluent downstream for up to ten times the cost of the City's water. Charles Wagamon asked if it was true that the City's water services budget was increasing by$4 million this year. The Mayor noted there would be a $2.5 million debt service and the replacement schedule, as stated by Winston Duke, Finance Director. Mr.Wagamon asked about water fund transfers and the Mayor said they were made to the General Fund to cover administrative costs. Mr.Wagamon asked why there wasn't just a budget line for such expenses. Steve Kelley asked about the initial$16-18 million expense of the TRA upgrades but that the project eventually came in at $21-22 million, and wondered who was held accountable for this self-characterized "mistake." The Mayor acknowledged there were additional costs during the bid process and reconfigurations, added reserve and contingency amounts, and financing costs. Councilmember Allen asked the Finance Department to get the figures together for Mr. Kelley. Mr.Kelley said he was not interested in the money, but wanted to know if anyone was held responsible. Councilmember Olson said this issue had been brought through staff, the Finance Committee, and before the Council and that he had been "floored" by the bureaucratic timeline, that the project had not even been started. He said that, from a contracting standpoint,the speed of price changes was unpredictable,and that it was a victim of circumstance. Charles Wagamon asked how a contractor could give a reasonable answer to a project that would use so much concrete over a period of years or how such a contract could be evaluated. He suggested it came down to his recollection of TRA's admission before Council that they should have been more diligent. 4. ADJOURNMENT Mayor Woodward adiourned the hearing at 7.18 p.m. SPECIAL SESSION [TO IMMEDIATELY FOLLOW 6 P.M.BUDGET HEARINGI 1. CALL TO ORDER The Session began at 7:18 p.m. 2. EXECUTIVE SESSION a. City Council will convene in closed session as authorized by Texas Government Code, Chapter 551, Section 551.074 — personnel matters to deliberate the appointment, employment, evaluation, reassignment,duties,discipline,or dismissal of Interim City Manager Chuck Pinto. [Mayor Woodward] The Council adjourned into Executive Session at 7.19 p.m. 3. RECONVENE a. Take action, if necessary,on items addressed during Executive Session. The Council reconvened and adiourned at 10.00 p.m. 4. MEDIA INQUIRIES RELATED TO MATTERS ON THE AGENDA There were no media inquiries. 5. ADJOURNMENT The Mayor adjourned the n e:tin t 10 00 Respectfully submitted, Lee Woodward,City Secret t)�A