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MIN CC 11/13/1984MINUTES OF THE HUNTSVILLE CITY COUNCIL MEETING HELD ON THE 13TH DAY OF NOVEMBER, A.D., 1984 IN THE CITY HALL COUNCIL CHAMBERS, LOCATED AT 1212 AVENIE M IN THE CITY OF HUNTSVILLE, COUNTY OF WALKER, TEXAS AT 7:00 P.M. The Council met in regular session with the following members present: William V. Nash, Mayor Eugene Barrett Murray Brown Stephen Davis Jerry Dowling Bill Hodges Percy Howard Jane Monday Bob Tavenner The Mayor called the meeting to order and then recessed the Council into an executive session to discuss real estate acquisition matter. FORMAL SESSION RECONVENED Mayor Nash reconvened the council after the executive session. Councilmember Hodges gave the invocation. CONSIDER MINUTES Councilmember Monday made the motion to approve the minutes of October 30, 1984 and Councilmember Barrett seconded the motion. All were in favor and the motion passed unanimously. CONSIDER TELECABLE FRANCHISE TRANSFER Consider a request from Telecommunications Inc. to transfer their telecable franchise to TCP Cable TV, Inc., based in Tyler, Texas, who is planning to buy the local operating system. Mayor Nash introduced a letter from Telecommunications, Inc. which attested to the fact that a contract has been entered into between TCI, the seller, and TCP. Cable TV, Inc., as buyer, for the sale of all of the assets j comprising the CATV system serving Huntsville, Texas and its environs, the closing of which is specifically conditioned upon obtaining the approval and consent for the transfer of the existing CATV franchise. Mayor Nash noted the City Attorney has prepared a resolution to approve this transfer, which he noted the City Attorney has just advised needs to be put into ordinance language, but that the body of the resolution contains the appropriate wording in context. He noted expeditious action has been requested, but the Council could table this item in view of the fact that it has just now received the information for review. Mayor Nash noted the City Attorney, Scott Bounds, is familiar with the terms of the transfer and is advised of the situation. Councilmember Hodges made the motion to adopt this Ordinance to be prepared by the City Attorney based on the content of the resolution already prepared and Councilmember Brown seconded the motion. Discussion: Mayor Nash introduced representatives from TCI, Mr. Archie Featherston (group manager) and the local cable office manager, Steve Crawford; and representatives from TCA, Mr. Robert M. Rogers, Chief Executive Officer; Mr. Nathan ii Geick, Vice President -- District Manager, and Mr. Fred Nichols, Vice President of Operations. Councilmember Monday asked Mr. Rogers if the quality of the local service would be retained as well as the local office if telecable goes under new management. Mr. Rogers said he has reviewed the franchise carefully and TCA wants to accept it as it is and as it is amended along with all of its liabilities and obligations. He noted his company has been discussing this acquisition with TCI for some time because the location is closer to TCA's operation than it is to TCI's operation. Mr. Rogers noted he hopes to not only maintain the office here but to expand it. He said they have a full staff. He said they will not try to make any changes to the service as it is provided now except that from time to time they will be adding additional services. Mr. Rogers said his company would like to discuss with the city, from time to time, various new things that may come along. Mayor Nash asked if there was any connection between TCA Cable T.V., Inc. and TCI. Mr. Rogers noted there was not and that there is no financial relationship or otherwise. He said his company is not a conglomerate and it is only in the cable television business. He said they have been in business for 30 years starting in upper Southeast Texas in 1954 and now operate in three states. He said they went public two and one -half years ago and noted a full disclosure of the company is noted in the annual report the Council has been given. Councilmember Dowling noted he was concerned about a statement in the annual report made by the senior Vice President for Engineering which said: "The company prefers to let others pioneer equipment utilization. We may even appear to be late with technological advances. But the day we provide them, TCP expects to show profitability." He noted local complaints are that people want service and they want telecable to work when there is a thunderstorn, etc. He said this statement reminded him of the prior cable company which did not keep their equipment up-to-date, state -of- the -art and he did not want the city to get hack into a situation like that, where a company comes in to pick the profits and lets the system go to rack and ruin. Mr. Rogers noted that at times some of those comments come back to haunt, but this statement refers to computer addressable conversion . He said although it is still very early, they found out earlier than they thought and they felt that they had seen other people try them out for a year or two before they got into it. He said they found out after they did this extensively for the past year that they are one of the pioneers. He noted he'sproud of the fact that the system here has a wide band capability and that alot more things can be done with it. He noted they are looking forward to the next ten years because they have here a broad band communications system with great capability for high speed data and other things other than just entertainment and television, which they intend to take advantage of. He said they intend to work very closely with the University as there are alot of things they would have mutual advantage to do. 0 Councilmember Dowling noted there has been discussion about what the FCC is going to do or not going to do and Congress is going to do or not do some other things and he asked if all of this would be irrevelent as far as the city is concerned in the foreseeable future. Mr. Rogers noted they have been controlled by the FCC since 1968 to some extent and to considerable extent since 1972, completely regulated since 1978 and 1980 and it has been batted back and forth; regulation coming from city, state and the FCC in Washington. He said a recent bill did pass through Congress a month or two ago, after two years of negotiation with the League of Cities. He did not feel, however, that their relationship with the city would change very much because of it because it only spells out somethirgs more clearly and aims more directly toward more deregulation on certain items in the future. He said it also puts more responsibility on telecable companies in some cases. Council- member Dowling asked if cities would be basically out of the rate business and the programming business. Mr. Rogers said the bill says that rates will be deregulated in two years and the reason is that the market- place is becoming so competitive along with delivery systems for entertainment and television so it is felt the marketplace will take care of rates. He said they find this to be true, generally, in the places in which they operate. He noted their district office is in Conroe. He noted they have had the cable system in Conroe since 1972. He said the programming package there is about the same as we have here with the exception that they have Channel 20 and Huntsville does not, but Huntsville has an arts program which Conroe does not have. Mr. Rogers said citizens in Conroe put alot of pressure on them for Channel 20 last year and so now they have it. Mayor Nash noted we are aware that people here also want Channel 20. Mr. Rogers said Channel 20 can be added here, it has been discussed, TCI has been over this also, and it is a matter of a copyright fees on it because it is called a distant independent signal which costs a little more. He said it is not all that much and he thought they can arrange to work something out. Mayor Nash said you are aware that you are being recorded. Mr. J. D. Dickinson of KKNX confirmed that he was guaranteeing Mr. Rogers he is being recorded. Mr. Rogers noted if there is a 2d per customer that they would have to pass on, he did not think the customers would mind that to get Channel 20. He noted i.tis one of the things TCA will be wanting to discuss with the City Council in the future as well as programming, rates, etc. He noted their aim is to keep the customers satisfied and that is what they want to do in order to have a successful business. Councilmember Brown noted under Steve Crawford's leadership in the last two -three years, our cable system has come along ways and those of us who suffered through it for many years now appreciate very much what we have and we certainly do want to keep on with it. Mr. Rogers noted he is aware of the history. Mayor Nash asked if Mr. Rogers anticipates coming back to the council in the near future regarding rates. Mr. Rogers said they have no plans now but if they had some programming changes, noting now they buy programs rather than stay mostly with broadcast stations as they did in the past. He said they will be coming back to the Council to talk about these things. Mayor Nash noted then this transaction is not subject to a rate increase. Mr. Rogers noted it is not as they are willing to take this franchise over as it is for the rates in existence. Mr. Rogers noted he is aware, after 30 years, that it is alot better to have alot of service and good service at very modest rates and have a wide base of people subscribing rather than just to have that restricted and have a narrow base and this is what they'll be shooting for. Mayor Nash noted the provisions require: the adding on of so many miles, etc. each year and he asked if this was acceptable. Mr. Rogers said this is not a problem because TCA is looking for opportunities to build more plant - -he said they find this provision an opportunity for them. Councilmember Davis asked several questions regarding how this company ' Rogers responded. City Attorney, Scott Bounds, asked whether or not Senate Mr. Rogers said it will not because it would only affect a new franchise or then that since this is the transfer of an existing franchise, S. B. 66 has Mr. Bounds asked whether Mr. Rogers is aware of the rate ordinance which is franchise and Mr. Rogers noted he is familiar with it and he accepts it and it is an amendment to the franchise. would serve Huntsville,to which Mr. Bill 66 would affect this tranfer. a re- franchising. Mr. Bounds noted no effect on this transaction. an amendment to the actual earlier its changes and he understands that Mayor Nash asked if anyone wanted to make a motion to table this item at this time. No one responded. He then called for a vote on the motion on the floor to approve this transfer, Ordinance No. 84 -28. ALL WERE IN FAVOR AND THE MOTION PASSED UNANIMOUSLY. CONSIDER ANNEXATION ORDINANCES Consider a Series of Ordinances that would annex additional property into the City After some introductory remarks by Mayor Nash regarding procedure, the following ordinances covering the various respective territories, were presented for consideration: Henderson Land Compan /Jenkins Road - -Area A on Map All of this area: Councilmember Hodges made the motion to annex this entire area. There was no second so this motion failed. Henderson Land Company (excluding Jenkins and the land on both sides of this road): but including two mobile home parks Brown Oil Tool /Highwa 75 North - -Area B on Ma Councilmember Brown made the motion to annex Henderson Land Company, excluding Jenkins Road properties, but including Knotts Mobile Home Paced April Point Mobile Home Park. Councilmember Tavenner seconded the motion. Vote: Council - members Hodges, Howard, Tavenner and Brown and Mayor Nash voted FOR this motion; however, Councilmembers Monday, Davis Barrett and Dowling voted AGAINST this motion. The motion, however, passed by a vote of five to four. All of this area: No one made a motion to annex this area. Councilmember Hodges noted he would prefer to wait until after the first of the year before considering this area for annexation due to the economic conditions which exist at present. Mayor Nash noted the current oil glut, which affects Brown Oil Tool among others, is reported to exist until the turn of the century. He said it is difficult to consider that there will be anything materially changed by waiting until such time or a year or two years from now. He said if he thought there would be material differences in the development of the area, within any reason- able time, he thinks he could be easily satisfied with postpone- ment. He said it does concern him, that at the present time nine or ten of the largest employers in the city are non - taxpaying entities. He said it further concerns him that if we consider the entire area of industry employers, and add to that, Brown Oil Tools, International Wire, etc. on the edge of Huntsville, that we are perhaps seeing the largest 15 employers of people within the city do not pay taxes to the city. He said what we are doing in effect is putting the entire burden, or a large portion of the burden on the people alone through their residences He said we do receive taxes through the retail or commercial aspect, but most generally the taxes paid there are really coming from funds that again have been generated by these same individuals. He said there must come a time that we find a way to tax the industries that are the employers of the people in this community. He said we must do this if we intend to keep the quality of the parks, libraries, airport, etc. that contri- butes to the quality of life of Huntsville. Mr. Nash said it is an area that has been missing in Huntsville. He said if we are to broaden the base of Huntsville, we must bring in the industry that is adjacent to us. Councilmember Monday indicated her agreement with that statement but she also thinks that we at this point do not have an overall policy on how to handle industry and we are looking at two specific areas: Highway 75 South and Highway 75 North and Brown Oil Tools. He said she feels it is in the best inter- est of the city to have a committee to study this in the next several months to look at several alternatives as to how the city is going to handle industry, extension of services to them, how were going to tax, how were going to annex, if we are; how we are going to handle alternative situations, get input from both sides; develop a uniform policy by which we would work toward a mutual situa- tion with our industry, so that well both be gainers and so well both grow together. Mayor Nash noted we do have a basic policy: whether to annex or not to annex. Councilmember Monday said there are three or four alternatives that we have not reviewed. Mayor Nash said then you are referring to industrial districts. Councilmember Monday said yes, and also services in lieu of taxes. She said there are other ways to handle this across the state and we have not reviewed these. Mayor Nash noted we have gone through a year of study and pro- cedures regarding annexation and have requested through those hearings, input from areas concerned and areas were talking about, but did not receive input. He said he did not feel the city failed to do something. Councilmember Hodges said he understands what is being said, but he said companies like Brown Oil Tools are having a little bit of a tough time and the more notice they have, the better they can budget and prepare for the time when they do have to pay taxes. There being no one to move to annex this area, the Council moved on to the next item. Majestic Forest - -Area Don the Map - -ANNEXED Mayor Nash noted that the land owned by Wendell Baker has been removed from Area D and now under considera- tion is only the land known as Majestic Forest. Councilmember Monday made the motion to annex Majestic Forest and Councilmember Hodges seconded the motion. Discussion: Gene Pipes noted there are two ordinances, one to take only Majestic Forest and the other to include the land immediately south of Majestic Forest (Wendell Baker's I land). In light of this, Mayor Nash asked if anyone would like to make a motion to include all of the originally ' presented Area D to include WendellBaker's corner. Councilmember Tavenner made the motion to annex all of the area. His motion. however, did not receive a second and it died for a lack of support. Mayor Nash then asked for a vote on the first motion to annex ONLY MAJESTIC FOREST. Councilmembers Davis and Dowling voted OPPOSED to annexing Majestic Forest and Councilmembers Monday, Barrett, Hodges, Howard, Tavenner and Brown and Mayor Nash voted IN FAVOR of annexing Majestic Forest. The motion passed 7 to 2. Highway 75 South - -Area Eon the Map - -NOT ANNEXED Mayor Nash then presented Area E which is also an industrial area like Brown Oil Tools area. He noted in order to be consistent with the Council's action on the Brown 011 Tool area, he felt this area should not be annexed based on the Council's actions on the otherr industrial area, however, he noted it is open for a motion. He noted no one came to speak against annexation at the public hearing for this area. Councilmember Hodges noted he would support bringing this area and the Brown Oil Tool area back for consideration for annexation right after the first of the year as he felt they do need to be a part of the city. There being no motion on this area, the Council moved on to the next item. Southwood Drive - -Area F on the Map -- NOT ANNEXED Mayor Nash noted this is the second time Southwood Drive has been proposed for annexation. He noted resi- dents of Southwood Drive did respond in the public hearings to indicate their opposition to annexation which represented a decisive majority of the residents. Mayor Nash noted Southwood Drive is as developed as it is going to be; they have city water; have septic systems; noted he sees no development to change the existing situation there; said we either need to annex or not annex and send them the message that well not keep consider - ing them each year. He did recommend that the city do annex Southwood Drive because they do participate in the I receipt of all conveniences and services of the city. He then asked for a motion to annex Southwood Drive. Councilmember Hodges made the motion to annex Southwood Drive, however, there was no second to this motion and it died for a lack of support. Boettcher's Mill--Area G on the Map__ ANNEXED Mayor Nash noted there was a speaker for this area at the public hearing. He was mainly interested to know what would happen if annexed. He complained about the water pressure and the need for expanded services. He was = also concerned about taxes. Mayor Nash noted he did not express opposition to annexation and he feels he would be !in favor of it generally if improvements would come. Councilmember Monday made the motion to annex Boettcher's Mill area and Councilmember Barrett seconded the motion. All were in favor and the motion passed unanimously. Badger Addition - -Area H on the Map -_ NOT ANNEXED Mayor Nash noted this ordinance is revised so that the area annexed will stop just east of Curtis Ellisor's house. Mayor Nash noted two people came to oppose annexation and a petition was submitted containing 11 signa- tures. He noted this area has city water; a portion has sewer service. Mayor Nash noted that since the Council has annexed in the way that it has so far this evening, he hesitates here to re- examine what has been done so as to be consistent. Councilmember Brown noted although it is a little late, he would have liked to see this addi- tion divided a little differently to exclude the four or five, maybe half a dozen properties, to which we cannot reasonably run a sewer line at the present time and which would logically to him fit in better with the Johnson Road area and should be annexed with Johnson Road next time. He did feel, however, that the rest of this area should be annexed. Gene Pipes noted this could not be done now because of the way the annexation ordinance is written; noting that the city would have to resurvey. Mayor Nash noted then that there seems to be a strong feeling to leave this area out this time but to look at it more closely next year planned according to Council- member Brown's suggestion on area to be covered. There being no motion on Badger Addition for annexation, Mayor Nash then moved on to the next item. Fish Hatcher & Anders Lane- -Area I on the Ma. Mayor Nash noted we will consider this in three ways: all of this area; just Fish Hatchery; or just Anders Lane. Mayor Nash noted three people spoke in this public hearing, all from the Anders Lane area. No one came ,, to oppose the annexation of Fish Hatchery, he said. He noted Fish Hatchery has city water; no city sewer, the streets are all paved and the major street is a state highway. He noted being consistent with what the council did with Majestic Forest, he would recommend annexation of Fish Hatchery area. Councilmember Brown made the motion to annex Fish Hatchery area and Councilmember Tavenner seconded the motion. Discussion: Mayor Nash noted this does not include Anders Lane. Councilmembers Hodges, Howard Tavenner and Brown and Mayor Nash voted FOR annexing Fish Hatchery area and Councilmembers Monday, Barrett, Dowling and Davis voted to OPPOSE annexing Fish Hatchery area. The motion, however, passed by a vote of five to four. Anders Lane On1A+ -- Mayor Nash then presented this area for consideration, noting there were some residents to attend the public hearing to object. He said they have city water, but it is on very small lines; there is no city sewer system, although some city sewer is available to the area on the northwest side of old Highway 19. Mayor Nash asked if there is a motion regarding annexing Anders Lane. There being no motion presented, the area did not get annexed. Mayor Nash summarized then that the Council has annexed Henderson Land Company and the area immediately north of it that includes the mobile home parks; we annexed Majestic Forest, excluding the undeveloped land owned by Wendall Baker; we annexed Boettcher's Mill and we have annexed Fish Hatchery Road. Mayor Nash then commended the city staff for doing "one heck of a job . . over an extended period of time,' He also thanked those many citizens who did come to express their opinions to the council during the public hearings. He welcomed the new citizens to the city. Councilmembers Hodges and Monday noted too that the City's Planning Commission needed to be thanked for their extra effort regarding annexation deliberations. Mayor Nash then commended the city council for their diligent consideration of annexation and the fact that each one of them spoke freely. He summed up by saying this has been a good exercise in the democratic process. The Council was advised that becuase of these four annexed areas, the City's acreage will increase some 1,092 acres and an additional 1,188 people will become city residents. Councilmember Dowling noted that something is wrong when people do not want to become a part of the city. He felt it incumbent upon the city to make it a more desirable status. He felt that until we conduct our business in a manner that this is accomplished, t h at the city will continue to have nearly 100% opposition to annexa- tion. He suggested that in the near future, the staff begin looking at a fee structure, etc., method of recoup- ing whatever appropriate costs, etc. for the county residents using the city tax paid services and facilities. He noted that he realized county residents pay sales tax so this i5 not a completely black or white circumstance but noted there needs to be some work done on pursuing library fees, landfill fees so that city residents are not, subsidizing the people who live on the fringes of the city. Mayor Nash noted he feels that a lack of respons■ to the public hearings comes from the feeling of complacency and it is normal and expected that those who are against something will come out to speak and those who are for it, won't bother because they don't oppose it. Councilmember Dowling noted he realizes this too, but in the case of Southwood Drive, almost every resident came in to oppose annexation and it was because of this that he makes his recommendation. CONSIDER ORDINANCE Consider an Ordinance approving claim and delivery of certificates of obligation for a rear loadino garbage truck. (Ordinance No. 84 -33, 4 year C.O. at 9.9% interest) Gene Pipes, City Manager, noted the city has a bid from John Henry Neiderhofer and one from Huntsville National Bank. He noted John Henry Neiderhofer was the low bidder at 9.90% interest on the $50,241.10 and the bid from HNB was 10.5% interest. He noted American Bank and Sam Houston National Bank declined to bid. He noted the staff did not have time this afternoon to check the bond buyers index to see what the compelled bid would be from First National Bank, but he speculated it would not be below 9.9 %. Mayor Nash asked what is the basis for the index. Scott Bounds, City Attorney noted it is short term municipal bonds. Councilmembers Monday and Hodges felt the city should have this figure before taking action. Mayor Nash noted the next time we draw up the depository agreement that we use a different index. After some discussion, Councilmember Brown made the motion to accept John Henry Neiderhofer's bid of 9.90% subject to it being equal or less than bid com- pelled of First National Bank after the staff investigates that and to approve claim and delivery of certificates of obligation for a rear loadino oarbaae truck, Ordinance No. 84- 33,and. Councilmember Monday seconded the motion. Discussion: Councilmember Dowling noted that if the bids are equal, the city can compel FNB to take the C.O., but he also noted if they are equal, he would favor working with Mr. Neiderhofer. Councilmembers Brown and Monde concurred that this thought is reflected in their motion. All were in favor and the motion passed unanimously. Councilmember Dowling suggested using T -bill rates rather than the bond buyers index in our depository agreement. Mayor Nash noted this or some other index might be more reasonable. CONSIDER VARIOUS BIDS Engineering Design Suburban to Trucks of Texas for $13,248.88 Mayor Nash noted of the two bids, Trucks of Texas submitted the lowest bid. The higher bid was from Holland Chevrolet. He noted this bid is $750 over the budgeted amount so $750 will need to come from the reserve for future allocation. Mayor Nash recommended that this low bid be accepted. Councilmember Davis . made the motion to approve of this bid and Councilmember Howard seconded the motion. Mayor Nash then restated the motion to include the stipulation that the $750 additional be taken from the reserve for future allocation. .Councilmembers Davis and Howard accepted this restatement of their motion. All were in favor and the motion passed unanimously. One -half ton Pickup for Central Inspection and a Subcompact for Customer Service from Goodman Dodge for $16,811.70 Mayor Nash presented this bid and noted he has a problem with this particular bid. He said the bids were taken based on the composite bid of the two items. He felt it would be more appropriate that there would be individual bids on each truck with an opportunity for a firm to bid a combined price which may or may not be lower than their individual prices in order that the city would receive the lowest individual bid and would not have to take vehicles from the same people. He said this is not the way these bids were prepared and this is the way all the bidders bid their package; however, Moore Henry Motors did bid on one of the vehicles and their bid on that one vehicle with one of the other bids, would be the lowest combination. Gene Pipes, City Manager, indicated that originally Moore Henry Motors advised that they were prepared to bid on both as a package unit and they did not notify the staff that they would change their procedure. He noted if they had, the staff could have had time to add an addendum to the bid specifications to allow that. Mayor Nash noted were talking about perhaps $100. He recommended to go along with the low bid as presented; however, in the future the staff should not do it this way but try to take advantage of a split bid situation on items such as this. Councilmember Monday,made the motion to approve of the low bid from Goodman Dodge for $16,811.70 and Councilmember Hodges seconded the motion. All were in favor and the motion passed unanimously. Police Word Processor to IBM for $9,879.40 Mayor Nash then presented this item which was specified along the product description of the IBM and was so specified that it would be very difficult if not impossible for any other vendor to meet in the expected price range. He said we then received bids on a specified IBM machine. He said he felt it should be recognized that this is the situation. He noted two other vendors were contacted but declined to bid because IBM, the manufacturer, as bidding. He said we therefore have only one bid. Councilmember Dowling asked if this violates antitrust laws. Mr. Bounds said it did not because the city has the right...Councilmember Dowling said he did not mean for the city, but for other vendors refusing to bid against IBM which is restraint of trade. Mr. Bounds said he'd have to research this question. Councilmember Dowling said we effectively do not have a bid situation here irrespective of how it was specified. Mayor Nash noted that the manufacturer does not always submit a lower bid.and the fact that the other vendors declined could be a boycott of the bidding process. He noted, however, that he did not have a problem with the specifications of IBM and it is within the budgeted amount and is consistent with other types of IBM word processor costs. He then recommended that this bid be accepted. Councilmember Dowling noted his amazement that with the number of people in the word processing business, all we could come up with is one bid. He noted he would move to reject the bid. There was no 'second to Councilmember Dowling's motion to reject this bid. Councilmember Brown noted we recently trans- ferred a computer to the Police Department and he wanted to know if we thoroughly researched the possiblities of adding a unit to it. Gene Pipes noted it would be more costly to add space (memory) to the existing computer and it is Cheaper tohave this word processing done on a stand alone unit. Councilmember Dowling agreed with the stand alone unit concept for this reason and the confidentiality problems associated with police records. Councilr^emher Barrett made the motion to accept the bid from IBM and Councilmember Hodges seconded the motion. Discussion: Councilmember Davis asked about the model being purchased and noted his question regarding the cost vs. other models available. Councilmember Hodges noted the staff is recommending this model and they should know what will do their work the best. He then called for the question. Councilmember Barrett, Hodges, Howard, Davis, Tavenner, Brown and Mayor Nash voted FOR this motion; Councilmember Dowling voted OPPOSED to the motion and Councilmember i'onday ABSTAINED. The motion, however, passed by a vote of 7 to 1 with 1 abstention. Pressure Reducing Stations to Crawford Construction Company for $31,710 (City's share: $17,710). Mayor flash noted two bids were received, however, the bid from J. P. Davies, while the low bidder, did omit one item - -1 pressure reducing station - -and therefore their bid is incomplete. He noted the other bidder, Crawford Construction, bid $31,710, which did meet specifications. It was noted the J. A. Davies bid would have been substantially higher had it included the other pressure station. He noted we are now back to considering the bid of a single bidder. Mr. Pipes noted too that because of the size of this job it has been difficult getting a large number of contractors interested. Councilmember Hodges made the motion to award the bid to Crawford Construction Company for $31,710 with the city's portion being $17,710 to be taken from the Water and Sewer Fund (unallocated), [Mr. Pipes noted we have had these funds previously set aside from last summer when we joint ventured the oversizing of the West Hills main; therefore it is a carry over from that project.] with the remainder of $14400 to be paid by Humble Products, Inc. and Councilmember Monday seconded the motion. All were in favor and the motion passed unanimously. CONSIDER RELOCATION OF A SEVER LINE Consider the authorization of $13,490 from the utility fund unallocated reserve to relocate 720 feet of 8 inch sewer line into its proper easement in the Shady Acres Subdivision i'ayor Hash introduced this item, noting that it is now a problem because of development in thisarea at this time, which could cause buildings being placed on top of the sewer line, which is out of easement. He said it is therefore impossible to acquire easements where the sewer line is as it would substantially eliminate the use of the lots involved in the development. He noted the only reasonable solution is to relocate the line into its proper easement. He noted it is an admitted error on the part of the city. Councilmember Dowling asked who put this line in for us. Gene Pipes said there were several contractors involved during the time of the South Huntsville Sewer Project. He noted it is a question as to whose specific responsibility this was because it was subed out, although it was still the responsibility of the city staff and engineer. It was noted there is no recourse against anyone and that it is just a staff error. Mr. Pipes noted this matter would not have been brought up if there were no development ongoing now in that area. Mr. Isbell noted the old line has to stay in place until the new line is built and then the first line will be abandoned. He noted there is no way to use the same pipe for the reconstruction. He noted it is important that the line be moved because it cannot be maintained if it is situated that close to buildings - -the machinery would be swing- ing into the buildings as there is not a 20 foot easement situation as it exists. Mayor Nash noted the city would not want the line under the buildings. Mr. Pipes noted the work will be done in- house. Councilmember Hodges made the motion to authorize this relocation in the amount of $13,490 from the unallocated water and sewer funds and Councilmember Barrett seconded the motion. All were in favor and the motion passed unanimously. COiSIDER AUTHORIZING INTENTION TO ISSUE CERTIFICATES OF OBLIGATION Consider authorizing publication of notice of intent to issue Certificates of Obligation (planned) as follows: Mayor Nash noted there are four ordinances presented here which would acquire, by certificates of obliga- tion, the following equipment: Rubber Tire Roller (Street Division); iron Wheel Roller (Street Division); Road Broom (Street Division) and a Crack Sealing Machine (Street Division. After some discussion for clarifica- tion, Mayor Nash then entertained a motion to approve all four. Councilmember Monday made the motion to approve all four ordinances, to be captioned Ordinance Nos. 84 -34, 84 -35, 84 -36 and 84 -37 and Councilmember Dowling seconded the motion. All were in favor and the motion passed unanimously. CONSIDER BUDGET MODIFICATIONS FOR NEW ADDITION COMMUNITY BLOCK GRANT PROGRAM Consider Resolution No. 84 -19 reo' ing ammomen /hunpPt modifications in the New Addition Community Rlnrk rant Program Mayor Nash noted the cost of doing street work is more than was originally budgeted. He noted the Council j needs to review and approve the detail breakdown of the divisions in order that it can be submitted to the Texas Department of Community Affairs and the U. S. Department of Housing & Urban Development for their approval. He noted the money is being taken from areas in which the budget is reasonably adjusted, with one exception, because there has been a change in estimates and the actual work is not being changed. He noted this is surplus money to those particular items. He said all of that is being transferred to the street improvement in either Year II or Year III. The exception to this is in the area of park development, he said. He noted park develop- ment was originally budgeted at $55,000 and this proposed amentled budget would decrease that amount by $15,000 to an amount of $40,000. He said the original park development plans called for a park to be developed in con- junction with the school system and it would be on school land. He said to-date, this situation has not worked ._._o1lt,satisfactorily with the schools that would provide for that construction. He said it is anticipated that CITY COUNCIL MINUTES OF NOVEMBER 13, 1984 BOOK "N" PAGE 483 the program will be somewhat different than what was originally considered. City Manager, Gene Pipes, advised that the original $55,000 included a restroom exterior to any of the buildings on the campus there and that has since been celeted as a practical matter because there are restroom facilities in the school buildings in the general area and a park restroom on school property would be difficult to maintain. He said so this $15,000 amounts to the construction costs of that outdoor restroom and the rest of it ($40,000) would be for the general park improvements; the multipurpose playground field and a playground for the Scott Johnson Elementary School. He noted the delay is caused because the School Board is still working on plans for the Scott Johnson Elementary School and until that plan is defined, we cannot finalize the park aspect. Mayor Nash noted the administration contingency is reduced by between $4,500 to $4,600 in grant adminis- tration and these funds too will be transferred to the Street Fund. Councilmember Monday asked when the City could expect to see the School Board's plan for the Scott E. Johnson Elementary School park area. Don Kraemer, member of the School Board, indicated that this is on the School Board's agenda for Thursday night (November 15, 1984). Councilmember Monday asked that those plans be brought to the City Council as soon as they are available. Mayor Nash then asked for a motion to approve Resolution No. 84 -19. Councilmember Monday made the motion to approve of Resolution No. 84 -19 and Councilmember Brown seconded the motion. All were in favor and the motion passed unanimously. The caption of this ordinance is as follows: RESOLUTION NO. 84 -19 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BUNTSVILLE, TEXAS, REQUESTING PROGRAM AMENDMENTS /BUDGET MODIFICATIONS IN THE NEW ADDITION COMMUNITY BLOCK GRANT PROGRAM CITY MANAGER'S REPORT -- GENE PIPES Annexation Totals in Acreage and Population Gene Pipes noted the total acres annexed tonight are: 1,092 and the total number of new city residents is: 1,188, which makes our estimated city population in the neighborhood of 26,310 (1980 Census: 23,936), and the total acres comprising the City of Huntsville is now 13,423 acres (12,331 before 1984 annexations). Entex Rate Increase Request Gene Pipes, City Manager, presented the information from Entex in support of their rate increase. He noted the increase proposed is $1.02 per month for each domestic customer and small business customers. Mr. Pipes noted if the Council is in general agreement with the documentation, it would be proper for the Council to do nothing and this increase will go into effect according to plan; however, if there is some question, there are other things that can be done. Entex's Mr. Joe Larrison and /or his representatives will be happy to visit with us at the next Council Meeting regarding this rate increase request (November 27, 1984), advised Mr. Pipes. Mayor Nash noted he basically has no problem with an increase of $1.02 per customer that would develop after some twelve year period. He noted he may be offended, he did not know, but he did not agree with the information the City has been provided as to why that is necessary. He noted within the little (green) book the City was provided, for example, there is a table or chart entitled "Calculation of Required Increase." He noted the first item on this is "investment per customer in 1972." He said they go through a process then of multiplying that figure tints the increase in actual cost of debt. He said to him that is the basis on which this calculation is determined; in other words, it is determined by the change in actual cost of debt and as that relates to the investment per customer. The Mayor said his problem is the investment per customer includes a figure represented by both debt and equity. He said he reviewed a 1983 statement of Entex and found that 49% would represent debt and'the other 51% would represent equity; so what were talking about in their multiplication of these two figures together, 49% of it relates to debt, but the other 51% relates to equity. He said he also has a problem with multiplying it times investment per customer. The amount of $167.77 being some four or five percentage points below what the investment per customer was in 1984. Because, he said, if you take 1984 and adjust that for inflation by the figures that are also included in this booklet, you'll find tbat the current, or on the same dollars, on 1972 dollars, you're talking about an investment per customer of $49.97, or, in other words, the investment per cus- tomer is really about 1/3 now what it was then. He said that is not an unusual thing if you consider that development of these areas has basically been an increase in density and therefore by adding new customers, it has not been necessary to add all of the investment that we've been adding. You can add by smaller laterals and pick up alot more people. Mr. Nash said he thinks that what is being asked is that we consider an increase that would reach a more equitable, by their request, arrangement between investor and customer. So, he also looked to see the situa- tion of the investor over the same period of time and he found that among other things, first of all, the investment per customer has gone up a multiple of 1.02; the cost of money that they use as a basis has gone up a multiple of 1.70; the cost of BAA bonds that they use to compare it to has gone up a multiple of 1.76; the boo value, on the other hand, of the company, has gone up a multiple of 6.17; their revenues have gone up 14.44; the earnings have gone up a multiple of 9.14; the net profit, a multiple of 5.19; the stock value or stock price of the company has gone up an average multiple of approximately 5. Sc, he said, it is difficult for him to see that the investor has been penalized over the period of time over which we are talking. Not only has the value of his stock increased by a multiple of 4.67, if you consider the highest for a year, or 6.65 when you consider the low, but the debt ratio has been decreased from 59 to 49 %, therefore, the value of his equity is somewhat increased. Under those condit'fons, he said, it is difficult for him to see that a rate increase is justified. He said the investor has more than been adequately protected, although'there was a slight decrease in the value of his stock from 72 to 74, there has been a consistent increase from 74 to the current time, a tremendous increase. He said if they were able to increase their value, book values, earnings, revenues, net profit, stock price, under those existing conditions, he fails to see why the increase of $1.02 per customer at this time is going to make that kind of a difference. He noted he will oppose this, based on the information that he has right now. He said he feels it would not be appropriate to vote this down without hearing from them (Entex), but he thinks they should be invited to come to explain this to the Council. He said this is not the same situation as other rate increases in which we know to start with that it has beer reviewed by the Public Utility Commissio and what we decide would be meaningless anyway. He said our decision on this is necessary. He said it is his request that there be a motion to table. Councilmember Monday made the motion to table and Counrilmember Hedges seconded the motion. P.11 were in Gene Pipes, City Manager, noted he will notify Mr. Larrison and they will have a representative at the November 27, 1984 City Council meeting to speak to these statements. Town Creek Park Committee Request Gene Pipes, City Manager, noted this committee was created about two years ago and is very active, spear- heading a number of improvements in the Town Creek Park area behind City Hall and they have developed a plan for the park. He noted they have directed and acquired some of the donations that have been received to make improve- ments in the park. He noted they assisted the Eagle Scout project to build a deck around a tree, and they have made the improvements starting on the Avenue M side, including the bridge over the branch, and the walkway on the south side of the creek. He noted the Committee decided last August to complete the portion of the walk on this side of the bridge to complete the walk off the bridge. He noted it was their plan that if these improvements were in place, that they would spark the interest for others to continue with the improvements. He said with this concept in mind, the Committee borrowed the money against the donations that would perhaps be forthcoming and got the sidewalk put into place in the late summer. He noted a $1,000 donation has been received towards that project. He said there is some $8,700 outstanding at the present time on that project and this committee is now requesting that Mainstreet Revenue Sharing Funds be used to pay for that project at the present time and then as donations are received by the Town Creek Park Committee, the city will receive the donations rather than the Committee. Mr. Pipes noted he has checked with the City Attorney, Scott Bounds, regarding the legal impli- cations of this, noting the improvement is to City Hall property and is a major advantage to the city. He said there is some concern as to how to best use the facility of the Town Creek Park Committee to gain donations to pay that expense and if in fact it can be done in a timely manner. Mr. Pipes merely presented this information to the Council and no formal action was taken. MAYOR'S REPORT M. B. Etheredge Day in Huntsville -- Saturday, November 10, 1984 Mayor Nash noted that in connection with the celebration of Veteran's Day, he proclaimed a day in honor of Lt. Col. M. B. Etheredge, the most decorated, living, WW II veteran and resident of Huntsville. Community Education Day -- November 13, 1984 Mayor Nash noted he also proclaimed Community Education Day in conjunction with activities planned by HISD. COUNCIL ACTION H -GAC Meeting -- Houston Councilmember Howard advised the Council of the activities of the H -GAC in their recent general body member- ship meeting. He noted Mr. Tom Reid and Ms. Sandra Pickett were elected officers for another year. He noted the keynote speaker was Jack Steele of H -GAC. Mayor Mash thanked Councilmember Howard for taking the time to repre- sent the City of Huntsville at that meeting. Telecable Transfer Councilmember Davis expressed again his concern for the urgency and quickness of the action tonight to authorize the transfer of Telecable to a new ownership. He indicated his displeasure in the way this was done noting he had a somewhat uncomfortable feeling regarding this procedure. He noted more time and additional information would have been more desirable for something of this magnitude. Councilmember Hodges indicated his feeling is that Telecable is not a public utility and he would be quite comfortable if the city had absolutely nothing to do with it. Certificate of Conformance for Financial Reporting Councilmember Brown noted that the City has been awarded once again the Certificate of Conformance in Finan- cial Reporting. He encouraged the city to arrange for a picture of the Mayor, Finance Director (Patricia Allen) and Auditor (John Reynolds) holding our latest plaque to publicize our achievement. Texas Municipal League's Resolutions Committee and General Meeting Councilmember Monday indicated she attended the TML Resolutions Committee Meeting as the City's representa- tive. She reported on the outcome of several resolutions. She noted it was a very good experience and one that she thoroughly enjoyed. [Councilmember Brown commended Councilmember Dowling for representing Huntsville as its voting delegate at the annual meeting.] [Councilmember Barrett also indicated his enjoyment of the TML meeting and referred to the session given by the cities of Plano and Round Rock regarding their tremendous growth exper- ience. He advised that Ruth DeShaw would be ordering a tape recording of this informative session to share with everyone, in addition to her memorandum of notes from this meeting.] [Councilmember Dowling noted water is a big issue with the cities; the pothole bill went down because of state funding problems; methods to fund the state's operations will take precedence; and the PUC may become involved in water regulations -- underground, surface distribution, private water companies, cities who sell to other cities - -and Huntsville may want to monitor this development closely.] 12th Street Paving Councilmember Dowling asked if we were paving 12th Street. Mr. Pipes noted we were and are specifically staying away from Avenue N until the arrangements are worked out regarding that section of street. Patching Needed Councilmember Dowling noted now that the rains have subsided, the patch truck needs to make one more round because of some secondary holes developing at their patch sites. q Avenue I Rail Crossing Councilmember Dowling advised of his opinion that within the coming 12 months, the City will have to do some - 1 thing about the Avenue I rail crossing, as this situation is not getting any better. He noted over the long haul this street will be an important access into the east portion of the SHSU campus and will be a part of whatever traffic plan the city and SHSU work out around the University. Mayor Nash noted with the completion of the new stadium, that area will be having more traffic on it. [Mayor Nash noted in visiting with Dr. Bowers, the stadium ' project includes some $100,000 for a storm drainage reservoir, consistent with a request of the city for SHSU to do something to retain the water so that it does not flood 16th Street.] Bond Paving Project- -Gene Pipes, City Manager, noted the bond paving project began today with Gaylord Construction Company and the Council will be seeing alot of activity on thosd overlay streets. Last Thursday, curb and gutter installations were begun in the HUD project. Rest' Ruth Saw, R:P.M.C. City Cerra.,... •