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MIN CC 08/20/1991CITY COUNCIL MEETING OF AUGUST 20, 1991 BOOK "0" 468 I MINUTES OF THE HUNTSVILLE CITY COUNCIL MEETING HELD ON THE 20TH DAY OF AUGUST, 1991 IN THE CITY HALL COUNCIL li CHAMBERS, LOCATED AT 1212 AVENUE M IN THE CITY OF HUNTSVILLE, COUNTY OF WALKER, TEXAS AT 6:45 P.M. Ii The Council met in a regular session with the following members present: W. H. Hodges, Mayor City officers present: Ila G. Gaines Ronald L. Lange Gene Pipes, City Manager William H. Knotts, Jr. William B. Green Scott Bounds, City Attorney 0. Eugene Barrett Charles Robinson Ruth DeShaw, City Secretary Members Absent: James L. Carter and Gary Bell CALL TO ORDER Mayor Hodges called the meeting to order. Councitmember Ila G. Gaines presented the invocation. CONSIDER THE MINUTES OF THE PREVIOUS MEETING Councilmember Barrett made the motion to approve the minutes of August 13 1991 as Presented and Councilmember Gaines seconded the motion. All were in favor and the motion passed unanimously. CONSIDER ORDINANCES Consider Ordinance No 91 -17 adopting a tax abatement policy Mayor Hodges presented this ordinance, the caption of which is as follows: ORDINANCE NO. 91 -25 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HUNTSVILLE, TEXAS, ADOPTING A TAX ABATEMENT POLICY Mr. Gene Pipes, City Manager, advised the tax abatement policy was first approved two years ago and this is a restatement of that with some changes. The changes concern the adding of the words "up to" 100 %.for the first, second and third years of abatement and "up to 80% for the fourth year," and "up to 60% for the fifth year," and "up to 40% for the sixth year "; "up to 20% for the seventh year, and no abatement for the eighth and following years." It was noted other changes from the previous abatement ordinance concern abating 100% of the value of eligible improvements for "up to" two (2) years during the period of construction of such improvements; and if the period of construction exceeds two (2) years "or other designated construction period, whichever is Less." improvements shall be considered completed for purposes of beginning the abatement period. Mr. Pipes said the new schedule of abatement is the same equivalent in terms of money as five years at 100 percent abatement which was the previous policy. Mr. Pipes said it is necessary for the City Council to re -state this policy every two years. Councilmember Green asked if it is up to the city to determine when construction is completed or what mechanism starts that clock. Mr. Pipes said the City's Certificate of Occupancy triggers the mechanism and clearly defines the completion of construction. Councilmember Green asked if it should be a part of this policy at some future point in time, to say ". . . when the Certificate of Occupancy is issued." Mr. Scott Bounds referred Councilmember Green to Section 8 of the current tax abatement agreement which: . . . requires the entity to submit to the City a certificate that all improvements to the premises have been completed in accordance with plans or revised plans. After receipt of this certificate, the City shall make a final inspection of premises to determine that premises have been constructed, renovated, or repaired in compliance with this agreement and upon so finding, city shall issue the Certificate of Compliance authorizing the exemption from taxation. The tax abatement provided for by this agreement shall begin with the tax roll for the calendar year 1992 and shall end with tax roll for calendar year 1997. Mr. Bounds said one determines when construction is complete upon commercial production of product or when the facility is actually being used. He said, however, a Certificate of Occupancy may not be issued for building code or other reasons and the business could be operating; the city wishes to tie this mechanism to whether or not the plant is actually producing or when its engineer or contractor signs a certificate saying it is substantially completed. Councilmember Green noted then production can occur before the Certificate of Occupancy is issued. Mr. Bounds said he can envision cane circumstances when that might happen. Councilmember J CITY COUNCIL MEETING OF AUGUST 20, 1991 BOOK "0" 469 Green asked if he can envision circumstances where the Certificate of Occupancy would be issued before production begins. Councilmember Green suggested something a bit more concrete as to when the clock begins, rather than something solely at the discretion of the city, which appears to be very negative. City Manager Gene Pipes asked how an entity could have production without having occupancy. Mr. Bounds said the city may withhold that occupancy permit awaiting compliance with certain code requirements but production could be taking place. Councilmember Green said he has no problem with the agreement, but would at some time like to have the policy be more concrete as to when the clock begins so that there is a clearer understanding; either when the building is occupied and production begins or when a Certificate of Occupancy is issued, whichever comes first and that the policy should reflect this language in addition to the language in the agreement. City Manager Pipes asked why this could not be a part of the agreement between the city and a given client /customer, so it is agreed before the contract is signed, that this is the demarkation line, construction is completed and tax abatement begins. Mayor Hodges noted, like the abatement, it would be on a case -by -case basis. Mr. Pipes said rather than have it as a policy matter, he suggested the city customize it to the given needs in each particular situation and agree on that up front. Councilmember Green then suggested that a part of the policy be that it is stated in there that the conditions will be specifically determined by the contract rather than to leave it nebulous as this point might slip through in some future contract if it is not specified because the policy says that it will be solely determined by the city. Mr. Bounds said the policy states taxes will be abated up to two years for the construction period. Councilmember Green referred to the statement ". . . upon completion of improvements as determined solely by the city council . . ." Councilmember Knolls felt it needs to be an overall policy and not a case -by -case policy. Councilmember Green said it concerns him that the Council has to determine when it is complete or not complete. Mayor Hodges noted this is a point that needs clarification by some definition. Mayor Hodges said this ordinance needs approval tonight even if it means the Council asks the staff to bring back an amendment to clarify that point. Councilmember Green then made the motion to adopt ordinance No. 91 -17 as is. with the proviso that the staff use some words so that the Council can make some adjustments to this in the future that will make it clearer and Councilmember Barrett seconded the motion. Discussion: Councilmember Knolls asked why the length of time on abatement was changed on the policy. Mr. Bounds said the change in the abatement schedule effectively continues the equivalent of the five year abatement period by doing it on a phase -out basis. Councilmember Robinson asked who will oversee the provision in this ordinance that states ".. . to utilize area contractors and work force to the maximum extent feasible. . ." City Attorney, Scott Bounds, said that by designating this area in the city as a reinvestment zone, it encourages business and the local work force being utilized. Councilmember Green made the motion to adopt Ordinance No. 91 -17 and Councilmember Barrett seconded the motion. All were in favor and the motion passed unanimously. OPEN PUBLIC HEARING Convene a public Hearing to receive comments on the creation of reinvestment Zone No. 1 for commercial - industrial tax abatement. Mr. Gene Pipes, City Manager, presented a legal description of the property in question located off of FM 2821 where the car wash is behind the Martinez Garage and what used to be the Goodyear Tire Store. He presented a map of the tract. He said it is within the city limits of the City of Huntsville and is designated as a reinvestment zone and currently under the ownership of Resolution Trust. Mr. Pipes said no one on the City Council has a financial interest in this property and he can certify that none of the officials voting on this matter have any interest in the property. Mayor Hodges asked if there is anyone present who wishes to speak in this public hearing concerning the creation of Reinvestment Zone No. 1. Mr. Dave Cich, President, Chamber of Commerce, spoke in favor of the creation of the reinvestment zone and the industrial tax abatement. He introduced representatives of Ids West Inc., Mr. Jim Farris, Senior Vice President, Ronnie Williams, Senior Vice President, and B. B. Jones, Consultant to Eds West, Inc., who can answer any questions concerning the company. CLOSE PUBLIC HEARING Mayor Hodges then closed the public hearing as there was no one else present to speak. CITY COUNCIL MEETING OF AUGUST 20, 1991 BOOK "O" 470 I CONSIDER ORDINANCES (� i Consider Ordinance No. 91 -18 establishing a Reinvestment Zone No 1 for commercial or industrial tax abatement i' Mayor Hodges presented this Ordinance, the caption of which is as follows: ORDINANCE NO. 91 -18 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HUNTSVILLE, TEXAS DESIGNATING CERTAIN PROPERTY AS REINVESTMENT ZONE NO. 1, HUNTSVILLE, TEXAS This Ordinance finds that development anticipated to occur within the proposed zone (Eds West, Ina - -a sports cap manufacturing and distribution company) would contribute to the retention or expansion of primary employment or would attract major investment in the Zone that would contribute to the economic development of the City. The ordinance further provides that the designation of the reinvestment zone made herein shall expire five years after the effective date of this ordinance of this Council unless otherwise renewed or extended by written order of this Council. Councilmember Green made the motion to adopt Ordinance No. 91 -18 and Councilmember Gaines seconded the motion. All were in favor and the motion passed unanimously, Consider Ordinance No. 91 -19 authorizing an agreement with Eds West, Inc for tax abatement in Reinvestment Zone No. 1 Mayor Hodges then presented this ordinance, the caption of which is as follows: ORDINANCE NO. 91 -19 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HUNTSVILLE, TEXAS ADOPTING A TAX ABATEMENT AGREEMENT WITH EDS WEST, INC. This ordinance approves the tax abatement agreement with Eds West, Inc. to take effect immediateLy. Councilmember Barrett made the motion to approve of this ordinance and Councilmember Gaines seconded the motion. Discussion: Councilmember Knotts asked about the difference regarding the abatement time change. Mr. Bounds said there had been an effort by the staff to get all the taxing entities to agree upon a particular schedule, and after discussions, it was determined that they should offer the equivalent of the five year tax abatement, which is what was offered to McMurray Hughes and which was basically the policy that was in effect most recently. Mayor Hodges said this just stretches the abatement out another year longer and allows the city to be a little more competitive in tax abatement with other communities. Councilmember Knotts said this is what concerns him about tax abatement as there is no limit or no cap on it and we are going to end up with one city or entity competing against another city or entity. He said he thought the state legislature this past year was going to put some Limits on that. Mayor Hodges said he thinks there is a ten year limit on it. Mr. Bounds said that the CED (County Education District) exemption from tax abatement will Limit the competition for tax abatements. Councilmember Knotts asked if the legislature passed a limited amount or time. Mr. Bounds said no. Councilmember Knotts said he will be voting for this ordinance against his better judgement. He said he does not like it because there are no caps on it and no time limits on it between entities and it is going to pit city against city, entity against entity in the state and will create some problems. He said it is going to amount to what he thinks is pure "economic blackmail" over a period of time if there are no restraints on it amongst the cities in the state. He felt as freewheeling as it is now, it is going to go wild. Mayor Hodges said he feels everyone in the State of Texas probably wishes there were no tax abatement on anything, but the fact of the matter is this is a competitive world and it behooves the City to be very competitive. He said the State of Texas, along with the cities of Dallas and Fort Worth, have offered a $7 billion dollar package to McDonald Douglas to come to the Fort Worth area to create 8,000 jobs. He said this represents a five year, 100% tax abatement to create 500 jobs in the long run. He said he personally feels this is a very good deal for the community. Councilmember Barrett said if we look at the history of abatements, towns like Lufkin gave a 15 year tax abatement and they do not like that and those who did that are not going to do it again. He said they have learned by experience that they are not making any money by giving a 15 year tax abatement. CounciLmember '.. Knotts said he really does not think the city will be making any money if it gives abatement. Councilmember CITY COUNCIL MEETING OF AUGUST 20, 1991 BOOK "Q" 471 Barrett said but it will be bringing in jobs. Councilmember Gaines said this particular company meets the criteria set forth; the Economic Development Council was given a mandate years ago to look for this type of company. She said she is very proud and pleased with the effort they have put forth and what they have done. She said it is a very exciting process in which the Council is involved. Councilmember Green said he is in favor of it but appreciates the concerns all of them have expressed from time to time about cities in competition with one another in attracting industries. He said if this were an entity that would cost the city a great deal of money while the city was, at the same time, forgiving taxes, he would have a lot of concern about it, but he does not believe that to be the case. He felt the increase in city services that will result from this will be minimal so that in fact, the cost to the city is going to be Little to none. He said the fact is that the city is not realizing revenue for a year or two or three, but the city is not receiving revenues anyway, so the city is not giving up something. He said the only possible negative effect of this would be if the city were to be required to provide substantial services that it is not currently providing. In that case, he said, it would be a problem. He said he does not see that the city is going to be providing services that are not currently being provided and the fact that in three or four years, it will begin to collect some taxes, represents a real positive impact for the city. He felt the city should: "Go for it." All were in favor and the motion passed unanimously. CITY MANAGER'S REPORT--GENE PIPES Consider approval of retroactive repair costs for work on a Street Division Motor Grader in the amount of 85,246.82 to be paid from budgeted maintenance funds. Mr. Pipes presented information from Harold Ramsey, Garage Superintendent, concerning this 1973 Galion T -400 Motor Grader which is used heavily by the Street Department. Mr. Ramsey noted due to the age and heavy ' usage of this machine, it was in need of numerous repairs. He said he contacted Waukesha- Pearce in Houston who sent a service representative to inspect the grader and to provide an estimate on the cost of repairs. He said the repair estimate totaled 84,650 and included repairs to the welding and adjusting brackets on the turn table, removing blade Lift cylinders and having rods re- chromed and cylinders resealed, installing a front manifold and shift seals on the transmission, resealing the control valve bank and installing new bushings and pins in the steering linkage. He noted, however, after testing the turn table, it was found that the hydraulic motor was weak and needed to be overhauled as well at a cost of 8596.82. Mr. Pipes said the city has repaired this motor grader within the last couple of weeks because it is very critical to the city's ongoing street operations. He said because the costs of repairs exceeded the $5,000 limit for authorization for budgeted repairs, he is asking for the Council's approval of the 85,246.82. Councilmember Barrett made the motion to approve of this expenditure as outlined above and Councilmember Robinson seconded the motion All were in favor and the motion passed unanimously. Consider the extension of Rvans' Ferry Road to 10th Street Mr. Pipes said many times the city has talked about the alternatives on the possible location of the extension of 10th Street east of Martin Luther King Boulevard. He said the last time the City Council met the Council referred this item back to the Planning Commission to review for a recommendation. He said the Council faced a delimna as to what to do with the configuration of streets and how to intersect 10th Street, if at all, with the Sycamore intersection which is a "non- standard" intersection. He said it has been the staff's recommendation for some time to take 16th Street northeast and connect it with Ryan's Ferry Road and then to Loop 19 to give people in that area an exit onto 10th Street while trading property with the Oakwood Cemetery Association for the necessary right -of -way across its tracts. He said the Association is trying to develop its Mayes Addition to the Cemetery. He said this week, Mr. Floyd Moore, who owns the property adjoining this, has asked the City to finally decide, noting he has been patient for two years on this decision. He said the Planning Commission's ' recommendation was not to add additional access to the Sycamore intersection, but to accomplish the transportation needs by routing off at old 16th Street at the top of the hill and veering over past Avenue G to Avenue F and coming to Harper's Washateria to tie in where the signals already exist, and to take this route up Sycamore Avenue all the way out to FM 2821 through a signalized intersection without adding more congestion through that intersection by trying to tie 10th street into it. He said their recommendation is to swap this Land to take care of this, and if the Council is interested in this approach, the Council may need to recess into Executive Session to talk about the specifics of the property swap negotiation, but the Council also needs to accept the Planning Commission's recommendation of rerouting Sycamore Avenue in this fashion. He said the CITY COUNCIL MEETING OF AUGUST 20, 1991 BOOK "0" wiI Commission exercised great care to locate areas that have vacant tracts through which the city can proceed to tie into Martin Luther King Boulevard /Avenue F at 11th Street at the signalized intersection. Counci Lmember Green asked if, what will be the new intersection of Sycamore Avenue at 16th Street, creates another "Y" like the Highway 19 and Highway 190 intersection. Mr. Pipes said the city will probably need to buy enough property at that point to turn this into a right angle intersection. He said the city has a number of businesses and residences that front there. Councilmember Green noted the map does not show this and felt it is critical if the city is going to do this that it make it clear that something else needs to be done on what would be the old part of Sycamore Avenue or the city will have another problem. Councilmember Lange said he is concerned about school traffic. Mr. Pipes said he does not think more traffic will be added because from 11th Street on out to the new school is a couple of miles and he didn't think traffic on Sycamore Avenue will be getting there that isn't already getting there anyway because all one does is turn one block and go on out, noting this would be a slow -down situation. He said most of the traffic on Sycamore is accessing Hwy 190 and Hwy 30 going out this way and it is really not going this way. He said the School buses would be convenienced as it would cut out a lot of turns. Councilmember Green asked how many businesses would be affected. Mr. Pipes said there is U-Rent -M, a washateria, and Zipp's and some apartments. Mr. Brown, City Planner, said there are four buildings that, as plotted, would be in the way; two of which are vacant and have been for at least six or eight years. He said all the land around them is for sale now and the other two buildings are very old structures. Mayor Hodges noted then this is the recommendation of the Planning Commission. Mr. Pipes said this alternative to the intersection is the recommendation of the Planning Commission and the staff concurs. Mr. Pipes said the city needs Council authorization to proceed to exchange Land with the Oakwood Cemetery Association and with Mr. Floyd Moore as it is configured on this map and this can be discussed in Executive Session. Councilmember Knotts felt, however, that one transaction is not contingent on the other one. Councilmember Green said it could be because if we make the decision to go through that area then we also simultaneously make the decision not to connect it into Sycamore Avenue. Mr. Pipes said if the city trades the property with the Oakwood Cemetery Association and agrees to close 9th Street, the city has to give the people a way to get out. Mayor Hodges said this does not obligate the city to spend any money. Mr. Pipes said it does require the city to spend some money because it is going to have to build this street at least in the next two to five years in order to effect the trade appropriately and get on with the program. He said the city can delay this one for a Longer planning period. He said the Oakwood Cemetery Association has been waiting for some time and is ready to move ahead to develop the Mayes Addition. He said Floyd Moore wants to get on with his program and would like it sooner than yesterday. He said with the ongoing street bond program, there are some priorities to take care of, but this is not considered a major cost, and the City does have some commitments. Councilmember Green said he has no problem connecting with Ryan's Ferry Road but is still not convinced that the City needs to come back to connect into Hwy 19 in some way. Mr. Pipes said the biggest problem is two creeks, a Lake, and very dense brush behind Crooks Drive which make this route very expensive just to get across and would require a major drainage study. He said the city could take 9th Street back down to what used to be the Hwy 19 and Hwy 30 intersection. After some discussion, Councilmember Green made the motion to accept the Planning ComoissioM s recommendation on the Oakwood Cemetery Association plans with the extension of 10th Street to Ryan's Ferry Road, but to waive consideration of the other matter because he is not sure and Councilmember Knotts seconded the motion. ALL were in favor and the motion passed unanimously. Recess to Executive Session The Mayor then recessed the members to an Executive Session to discuss the extension of Ryan's Ferry Road to 10th Street and the real estate considerations involved in that project. Consider the extension of Ryan's Ferry Road to 10th Street Mayor Hodges reconvened the Formal Session after the Executive Session. Councilmember Green made the motion that the City Attorney be authorized to engage in negotiations with various property owners for possible relocation of 9th Street and to return to the City Council with contracts the Council may or may not approve and Councilmember Barrett seconded the motion. All were in favor and the motion passed unanimously. CITY COUNCIL MEETING OF AUGUST 20, 1991 BOOK "O" MAYOR'S ACTIVITY REPORT - -BILL HODGES 473 Tax Abatement Mayor Hodges said he appreciates the Council's vote for tax abatement tonight because he feels it essential that the city be a player in economic development. He said tonight the city has proven that it serious about economic development for the community. He thanked each of the Councilmembers, the Chamber Commerce, and the Economic Development Corporation. He said he especially thanks Ben Bius, a local realtor a member of the Economic Development Corporation, and credited him for really getting this ball rolling about s weeks ago. He said because of Ben's encouragement, Eds West, Inc. is considering Huntsville. COUNCILMEMBER ACTION Avenue M and 10th Street Incident Councilmember Lange said he would like to bring this incident to the attention of the media, etc. said one of the police officers was engaged in apprehending an individual at this intersection and was hav great difficulty. He said a foreman for GSU jumped out of his truck to help the police officer and immens assisted the officer and perhaps prevented serious bodily injury to the officer. He said even though he d not agree with GSU on some of their pricing, one of their individuals really did a community service and wanted to commend him publicly. H-GAC Meeting Counci lmember Barrett said he represented the City at the H -GAC meeting today. He said a matter aros about the Gulf Coast Trade Center that was not originally funded but which did receive funding finally in th amount of $66,000 that was redirected to them from the Wharton County Junior College. He said this is fo Montgomery and Walker County and it serves the substance abuse offender population- -all classes are to b provided for those on parole or probation or those who have a court order to attend basic skills classes. H said Gulf Coast Trade Center will provide eligibility determinations and assess adult basic education and GE preparation at a site in Huntsville. He noted constructional materials and computers will be provided at n cost to H -GAC and all instruction will be computer- assisted and individualized. He said he was glad to see Gul Coast Trade Center receive this funding. GSU Team Cities Meeting Mr. J. D. Schindler, Director of Community Development, advised he has the applications ready for thi interested in attending the GSU Team Cities Conference to be held at Del Lago, sponsored by Gulf Sta Utilities, from 9:00 A.M. to 3:30 P.M. on September 5, 1991. He said Ms. Linda Pease, Arts Comniss Coordinator, has been asked to present a seven minute program on Huntsville's downtown revitalization work show area representatives what is happening in downtown Huntsville. He requested the Council's respoi concerning their interest in attending. Mr. Schindler said there will be a number of programs presented. Ma, Hodges encouraged the Council to attend this noting he plans to attend. He noted Mr. Schindler will contacting them next week concerning their ability to attend. ADJOURNMENT Respectfully subm�iittted,�� Ruth DeShaw, Li ty Secretary August 2D, 1991