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MIN CC 03/28/19891 1 MINUTES OF THE MARCH 28, 1989 MEETING BOOK "P" 277 IIMINUTES OF THE V COUNCIL 28TH DAY OF MARCH, I N H T ALL COUNCIL CHAMBERS, LOCATED AT 1212 AVENUE M IN THE CITY OF HUNTTSVILLE, COUNTY OF WALKER,TEXASAT6:45P.M II I The Council met in a regular session with the following members present: Jane Monday, Mayor Ila G. Gaines William B. Green City Officers Present: 0. Eugene Barrett William L. Hammock Gene Pipes, City Manager Gary Bell Percy Howard, Jr. Scott Bounds, City Attorney James L. Carter William H. Knotts, Jr. Formal Session Mayor Pro tem Howard called the formal session to order and presented the invocation. CONSIDER THE MINUTES OF THE PREVIOUS MEETING Councilmember Barrett made the motion to approve the minutes of March 21 1989 and Councilmember Gaines seconded the motion. All were in favor and the motion passed unanimously. RECEIVE A BRIEFING ON THE REVISED SAM HOUSTON STATE UNIVERSITY MASTER PLAN Mr. Gene Pipes, City Manager, advised SHSU has offered an overview of the recently revised Master Plan at a time and date convenient for the Council. He asked the Council to check their schedules and report to Mr. Pipes a convenient afternoon, perhaps on a Thursday, approximately 4 :00 P.M., when the Council can meet with the University officials and the County Commissioners at Austin Hall for the purpose of viewing the complete master plan and slides /graphics associated with the program so that the council will have the full benefit of the same presentation that the University Regents had at a recent meeting during which that plan was approved. CONSIDER A PROPOSED RATE INCREASE REQUEST BY GULF STATES UTILITIES COMPANY AS PRESENTED BY MR. DENNIS SINGLETARY, HUNTSVILLE OFFICE MANAGER FOR THE FIRM Mr. Singletary presented some charts of information and fact sheets concerning this rate increase request. He advised the last time GSU spoke to the Council they were on the verge of bankruptcy with a $3 billion investment that it did not have in its rate base. He said they were asking the City and ultimately the PUC to grant it a rate increase to cover the cost of the River Bend Nuclear Project. He said GSU was granted a $1.6 billion dollar increase because the PUC recognized this portion of the cost as being prudently spent and they had no questions about it so they put it in GSU's rate base. He said they also thought the plant itself was a prudent investment. He said GSU was then allowed to earn a return on that amount. He said there was, however, another $1.4 billion of the $3 billion on which the PUC said they needed some further explanation. He said they did not understand some of the costs and GSU did not justify to them some of those costs. He said PUC gave GSU two alternatives: 1) write it off; or 2) come back and explain it to them at a future date. He said the $1.4 billion write off to a company the size of GSU would have been devastating. He said GSU chose to come back before this City Council and before the PUC to reconcile those costs, hopefully to their satisfaction and to the understanding of everyone concerned that those costs were justifiable. He said GSU hired a consultant, Sandlin and Associates, to assist them in that. He said they presented an indepth case to which the City only has a summary of that case. He said the real cost justification report took 27 file boxes to file with the PUC. Mr. Singletary said 82 percent of those costs are directly related to regulatory requirements, most dealing with the environment, politics and safety and most of which came out of Three Mile Island. He said they did all that, not to put that $1.4 billion in GSU's rate base, but rather they are asking that this $1.4 billion be "inventoried" or put aside for "X" number of years and in this case, eight to nine years, to be looked at then and not putting it in Gulf States' rate base on which to earn a return. This is where this particular rate filing is unique, he said. He said they are calling this a regional recovery plan because they recognize the situation all of their service area is in as far as their economy and realize they need to be competitive and remain competitive throughout the next few years so they can be MINUTES OF THE MARCH 28, 1989 MEETING BOOK "P" 278 vital part of that economic revitalization. He said they do not want to be a hindrance, but rather a part f the cure for the problem. He said the projections are, with depreciation, and if this is brought back nto the rate base in ten years, that it will be at no cost to the rate payer, perhaps even a rate decrease n that period of time. He said they hope they can have five years, after this phase -in of the rates, of no ate increases. Mr. Singletary said there is a rate increase he did want to discuss having to do with River Bend. e said one might ask why they are not talking about putting the $1.4 billion in the rate base and why GSU s asking for a rate increase and from where will the increase come. He said the calculation is not simple, ut the formula is. To determine the cost of service, he said, we have a rate base (not necessarily River end) but all of GSU's invested capital for plants, buildings, lines, etc. He said a utility company is ]lowed to earn a rate of return over that investment --not a guaranteed rate of return. He said when one ears of the 13 percent requested in this increase, one would like to be guaranteed a 13 percent return on ne's invested capital; that is not what this is- -it is not an "allowed return," but rather "a ceiling." He aid last year GSU earned less than a 2 percent return on its invested capital, so it is not earning that, owever that is the potential it has, but it has to work hard to do that. He said GSU is not saying to the UC or to the City Council, that GSU wants to put that $1.4 in the rate base, but because it is a plant, t is in operation, the public is receiving the benefit of it, and it is saving our rate payers money [last ear GSU estimated in fuel costs alone it saved about $38 million replacement gas and to go out on the arket to buy gas it would cost $38 million to produce the same amount of electricity], GSU has epreciation, O&M and taxes that are related to that plant. He said that is where the rate request is otal of $65 million. He said the way we do fuel in the State of Texas is to project fuel costs a year in dvance. He said at the end of the year, we settle up whether we are over - recovered or under- recovered. He aid we anticipate that net amount next year to be $2.5 million which results in a $67.5 million rate equest that is pending before this Council tonight. He said that nets out to about a 10.5 percent overall o all of the customers; however if that is equated to what GSU has asked for residential customers, it is round 7 percent or about $5.83 per average customer using a typical 1000 kilowatt hours on average: so He said it is part of a plan to phase those costs -- depreciation, O &M and taxes in over a three year eriod (1990 - 1992). He said there would be around a $35+ million each year, unless GSU can do something to ffset that with higher sales. Years four through nine, he said, will be to stabilize rates - -no River Bend elated rate increases. He said GSU is no longer on the verge of bankruptcy, but has improved its health as company. He said currently GSU's disbursements are exceeding its receipts and they cannot continue to do hat if it operates very long. He said the outgo is more than the income and they have to do something to orrect that. He said there are four viable options, one of which is not viable for GSU and that is to orrow money. He said because of GSU's liquidity problem, cash flow, and where it is on paper, it cannot go ut on the market and sell stock because they are not paying dividend. He said GSU cannot sell bonds ecause of its cash problems and what its bond rating is and no one is ready to loan GSU a lot of money, but SU can increase its sales which affects the receipts side of the equation; it can reduce its costs [and hey are working diligently to do that - -they analyze every dollar spent to be sure it is economical and wise nd cost effective]; and they can ask for a rate increase, which it is doing reluctantly but they feel it ecessary at this point. He said the other reason why GSU needs a return is because it is not paying its wners. He said they cannot continue to operate as a company and not pay the people who own the company as hey expect a return on their investment. He said they are working towards that objective. He said GSU also has a concern for its customers. He said as a part of this rate filing, something lse that is unique is the "Elderly Discount Rate." He said it is the first time it has been approved by heir company or by any other company, to give a discount rate to those persons who have been determined to e over 65 that have an income of $10,000 or less. He said part of the bill in Texas is a $7.00 customer harge and they are talking about waiving that charge for them. He said that does not sound significant, D 1 MINUTES OF THE MARCH 28, 1989 MEETING BOOK "P" 279 but to many of the elderly customers who are just making it, it is very significant to their benefit and would net out to where they would feel no affect to this rate increase. He said that is revenue neutral. He said they are asking the rest of their residential rate payers to pick up that cost, which is about 60 cents per customer and that is figured in the $5.83 estimate given earlier. Mr. Singletary said they also offer "Equal Pay" (which allows them to pay the same amount each month - -an average of the annual bills and it evens out at the end of the year), and "Convenient Pay" (allows customers with special needs to pick a date on which they can pay and they have to fit certain criteria to be allowed to be on that plan). He said they refer to agencies every day those customers that have problems paying their bill that they see as a crisis situation, noting the agencies in town have monies available to help pay those bills and they make those referrals every day. " Proiect Care" is a fund of money all can participate in to help the elderly that are facing an economic crisis in their life, he said. Through our contributions to Project Care, it disperses those funds at no administrative cost to those persons that are facing an economic crisis, he noted. Mr. Singletary said they also offer weatherization, audits, and weatherization aides to those people who can improve the quality of their living through doing some minor work to the homes. He said a new project to be started in May of 1989 in Huntsville is an education program. He said there are those customers who find it very difficult to budget their energy management needs. He said they also find it very difficult to determine that they have "X" amount of money and they need to spread it out over all their bills. He said they will try to help educate those people by having a seminar to help with budget planning and energy management. Mr. Singletary then referred to a period just before 1985 when the rates dropped and in 1988 a small increase was granted. He said this is where GSU is planning to go as it is right now at $76.00 and in the summer it will be $79.00. He said with this rate filing, they are planning to go to $85.00 and it will top out a little over $90.00. He said their competitor utility companies all around them also have rate filings and their rates are projected to go higher than those of GSU in some instances, and right at their level in other instances. He said they feel they will continue to be competitive and a vital part of this community. He said they will continue to make an effort to bring new businesses in and still not have that much of an economic impact on the customers. Another issue that brought a lot of attention last, he said, was the Texas - Louisiana difference. He said GSU can say now that in the States of Texas and Louisiana, that the rates are almost identical - -$5.50 for all classes of customer, which is the average cost of kilowatt hour. He said the residential rates are just about even. He said they achieved rate equity. They cannot, however, control what will happen in the future, but as it is projected now, Louisiana is going to surpass Texas because they already have a rate phase-in plan adopted and it has already started this year, so they will be higher than Texas in the next few months, not significantly, but it will be higher. Mr. Singletary advised the Council its options can be: 1) to accept this rate increase; 2) to deny this rate increase; 3) to defer to the Public Utility Commission that decision; or of course, 4) to suspend it pending further action in the future. He then asked for the Council's consideration and offered to answer any questions. Council Discussion Councilmember Bell asked if the Louisiana Public Service Commission (PSC) granted a rate increase. Mr. Singletary said they were ordered by the courts to re- examine GSU's pending request and they were also ordered to phase -in their rates over a period of time, the amounts were left to the discussion of the PSC in Louisiana. He said they ordered a one year rate increase and a three year phase -in plan in January, which is a positive sign in Louisiana. Councilmember Gaines asked for the amount of increase businesses would realize. Mr. Singletary said it is in the neighborhood of 10 percent. Councilmember Barrett asked if GSU is asking for an equitable raise in Louisiana; is it going up in a three year program, and will it be equal to Texas each year? Mr. MINUTES OF THE MARCH 28, 1989 MEETING BOOK "P" 280 ngletary said they have been granted this already, but he cannot say it will be exactly equal, but at the d of those phase-in plans, their goal is for equality. Councilmember Bell asked how the GSU rates for xas compare to those across the United States, noting the Texas rates were thought to be one of the ghest rates charged in the country. Mr. Singletary said he can provide to the Council examples of that d that GSU in Texas is about in the middle of the rates across the country. Mr. Pipes summarized there are four options for the Council as noted by Mr. Singletary: to approve e rate request presented; to disapprove it; to suspend the rates; or to defer to the PUC. He said in the st, the Council has taken a number of different actions. He said without formal action of the City uncil, the request becomes effective April 25. He said he will be going tomorrow to Nederland to a eting of the associated cities that have been dealing with GSU and each other cooperatively for the last veral years. He said the purpose of this meeting is to discuss a plan of action, a response to the Gulf ates request which is being simultaneously presented all over the service region and he will be reporting ck to the Council next Tuesday night on the outcome of that meeting. He said many of those cities, storically, have associated together in order to share the costs because none of the cities, including the ty of Beaumont, is very well equipped to sustain the type of staff and the expertise necessary to evaluate rate request that is in the billion dollar figure category. He said they want to be conscious of the mpany's health and the integral part of the economic matrix that it is in Southeast Texas, but they also nt to be cognizant of their responsibility to the local rate payers and do not want to be too quick to prove a requested increase no matter how much more attractive it is over the prior years. He said he will port back on the action of this group of cities. Mr. Pipes said the leadership of this group, Mr. Olan Petty, City Manager in Conroe, has resigned is position in Conroe beginning in May because of health problems, but had served as the coordinator, ookesman and the person responsible for getting the cities together. He said the Association may be in imbo for a short while as a result, but he will continue to monitor that particular situation. Mr. Pipes :minded the Council that the effort has been to try to get the cities to associate together to share costs, it also to speak as a unified voice. Mr. Pipes advised the Council need not take formal action until April 25 and then the Council can er and send it on to the PUC which has ultimate administrative authority. Councilmember Barrett made the ion to tahle this matter until the. rnunril ran raraiva Mr Dinae, ran—t and rnunn;ImnmL.er rsrter CONSIDER A PLAN AMENDMENT TO THE EMPLOYEE SELF - FUNDING HEALTH INSURANCE PROGRAM TO ALLOW EMS PERSONNEL TO PARTICIPATE AS RECOMMENDED BY THE EMS BOARD Mr. Pipes advised EMS employees are considered "affiliate" employees of the city and the county. ouncilmember Barrett said they are considered affiliate because they are funded one third each by the city, ounty and the hospital district. Mr. Scott Bounds, City Attorney, advised he has visited with the city's nsurance company, noting at the present time, the City has a self-funded insurance program and it is dministered for the city by Employer's Plan Services, Inc. (EPSI), a fund in Houston. He said in addition o the plan administration, the city has a re- insurer, which in this case is North American Life and asualty (NALAC), who insures claims over a certain amount that may occur. He said in the process of trying o determine whether or not the employees for the EMS can become a part of the city plan, the city has to: ) be sure the city's health plan is sufficiently broad in scope to permit them to join the plan to maintain ualified status; and 2) to be sure that we can advise what limitations in coverage they may have when they oin the city's health plan, either through plan document or through the reinsurance contract that it has ith NALAK. He said in talking to Mr. Lyndon Smith, who is the head of EPSI, who has been talking to NALAC, e indicated that they would be willing to accept EMS employees into the city's health plan as basically new mployees. He said they have been examining the effect on the plan. He noted there should not be adverse ost consequences to the city's medical plan as a result of the employees' participating in the plan as we re talking about less than 20 employees plus their dependents. 1 1 MINUTES OF THE MARCH 28, 1989 MEETING BOOK "P" 281 Mr. Bounds said what the city would like for the Council to do is to approve the City Manager and the trustees for the plan and to approve EMS joining the plan under two conditions: 1) that they be required to present evidence of insurability if that document is required by NALAK the city's re- insurer• and 2) that they will become members of the plan subject to pre-existing conditions• i.e., in the existing Plan there is a provision if one has an existing condition they are being treated for they are excluded from coverage for that item for a certain period of time and they would be subiect to those provisions of the plan document. He suggested the Council approve permitting EMS to ioint the plan subiect those two Limitations, or as required by NALAK. He advised the effective date of that action will be April 1 or as soon thereafter as we can manage approval by NALAK. He said NALAK would like to see the plan document amended in some way. EPSI has advised they do not think the plan needs to be amended because the terminology is sufficiently broad to include EMS as individuals under the way the plan is written now. He said they are still working with that particular item. He said if the City Council would merely authorize the City Manager and the Trustees of the Medical Plan to make such amendments as necessary to accommodate EMS joining the plan, that would be sufficient. Councilmember Hammock asked how the plan would be funded for coverage for the EMS employees. Mr. Bounds said they will pay a premium on the same basis as employees and members of the plan at the present time. Mr. Bounds noted it is a self - funded plan: the employees portion is paid by the city and the dependents portion is paid by the employees, but the fund is built up and because of recertification and other cost containment features, we have managed to maintain a rather static rate for our health insurance for about three to four years. Mr. Bounds said EMS through all three agencies (city county, hospital) would pay individual employees' contributions and dependent coverage would be an option to be picked up by the employee. Mr. Pipes said the EMS employees already have health insurance coverage. He said when EMS was created, it was city- county sponsored and they were in the city' retirement plan and the county's health insurance plan and vehicles were bought one by the city and one by the county and eventually all that has merged together except that their group of 14 to 20 employees simply isn't large enough to provide their own insurance, so they are still under one of the parent agencies. He said EMS employees are considered city employees as far as the city's retirement plan. He said the county has had some difficulty in the last couple of years maintaining health insurance and with the deductibles that they are now maintaining, the city's plan is of greater advantage to the EMS employees and really for apparent calculations, there is no affect at all negative or positive on the county's situation. He said after discussing it for several months, the EMS board concluded that it would recommend on behalf of the EMS employees that the city accept them into their plan. He said the pre- existing condition has always been a concern as has the other criteria that Mr. Bounds mentioned, i.e., evidence of insurability, etc. Councilmember Knotts made the motion to adopt this plan amendment and to authorize the City Manager and Trustees to execute any amendments related to the plan for EMS to ioin and Councilmember Barrett seconded the motion. All were in favor and the motion passed unanimously. CITY MANAGER'S REPORT--GENE PIPES Employee Retirement Plan Review Committee report and recommendation Mr. Pipes then advised that an 18 member City employee committee began meeting some months ago, or a decade later from the original committee that began meeting to consider the problems associated with the social security system in the late 19701s. He said it was felt there was some difficulty with social security at that time in that the plan might not remain solvent. He said there was a considerable concern that without some major overhaul, the city employees upon reaching retirement might not have the assurance that had been historically there for the preceding generations. He said the City of Huntsville was the benefactor for a unique set of circumstances which allows cities as independent jurisdictions to withdraw from social security. He said the social security system was never intended to be "the" retirement system for the entire country but a supplemental program. He said today, it makes up about 20 to 40 percent of the retirement package of most employees reaching retirement MINUTES OF THE MARCH 28, 1989 MEETING BOOK "P" 282 ge. He said the city entered a program in 1981 with the consent of Council which was an independent ection in the IRS code, 401A, which allowed the city to set up a retirement program. He said the city's rogram was offered for consideration and Kansas City Life was selected as the carrier and for the last ten ears, that is where the city's retirement future of the city employee has rested. He said the city hopes o have what was a comparable program, but independently provided under the federal government. In the meantime, Mr. Pipes reported social security has reacquired some of this lost help by virtue f a series of planned rate increases, contributions by the employee and the employer, and there seems to be much brighter outlook for social security today. He said the City of Huntsville cannot get back into ocial Security. He said once you are out, you are out. He said the only aspect of Social Security that e cannot avail employees of is the mandated medical provision which began in 1986, in which all employees ired after that date now pay a small portion into social security to provide medical coverage. In the eantime, the cities original plan, set up under Kansas City Life, in which all of our eggs are in that asket, was a 5 percent mandatory contribution with a double match by the city. He said a 10 percent match ounds like considerably more than what we would be paying under social security, but the city is not aying 10 percent but considerably less, or 9.2 percent under the Kansas City Life Program. Because of the acancies that are created when there is turnover in the employee ranks, those funds that were sent on ehalf of that employee that were not vested then are credited to the payments and therefore the net is ubstantially lower than what the plan actually requires. In addition to the social security contributions hat each employer makes, in 1977 -78, the City had a 5 percent voluntary contribution with a life insurance ompany based in Dallas and the city was matching it, but was not very successful because of the key word voluntary." He said any time they had a little money, inflation took off a little bit and when they did of get a raise that year, the employees withdrew. He said it was like a voluntary savings account, but it as not very consistent and there was certainly no vestige of a retirement account. He said some of the unds originally in that company are still there and some of the employees are still here. He said the act of the matter is it was an extremely poor program and in combination with that voluntary program and ocial security in 1980, the city saved money by going to the 5 percent two - for -one match mandatory 401A ontribution plan. Mr. Pipes said in 1987 -88, Kansas City Life, our carrier, notified us that it was no longer their ntention to continue the administration of our contribution plan. He said they found that among all of heir retirement plans, in a field that had become very competitive, it was not cost effective for them to enerate the paperwork for each of the individual employees on an annual basis and report to them the tatus of their account. He said they chose to turn the city over to a third party administrator and herefore charge a fee for the accounting work that was being done by the Kansas City Life people at that ime. He said we argued with them from January of 1988 until August or September trying to determine they ere not going to change their mind and chose to go with an independent third party administrator firm in ouston. He said the city determined, in the process of reaching that decision, that in fact, Huntsville as the largest retirement program in Kansas City Life - -a little over $4 million in the plan at the time. e said the committee has since determined that Huntsville is probably the only 401A plan in the entire tate of Texas - -an extremely rare situation. He said most cities remain today in social security. He said ost cities with social security also have some sort of retirement plan for their employees. He said emarkably, those cities in the plan, some of which are gnarled with independent plans and some with the exas Municipal Retirement System, are contributing tremendously more to their employee's retirement ombined social security and retirement funds than we would have even envisioned as a practical matter some ears ago. He said social security has continued to go up and the benefits paid to the various employee roups over the years has also continued to go up. He said because the experience is, by and large, that hen our employees get to the point that they can retire, they find out they really can't. He gave an xample of an employee who wanted to retire after a number of years experience with the city and some ligibility for some limited social security benefits because of the prior service before the city opted ut, who had a total retirement of something slightly in excess of $25,000. He said it is difficult to live at the remaining years in reasonable comfort even with an average social security program. 1 MINUTES OF THE MARCH 28, 1989 MEETING BOOK "P" 283 Mr. Pipes said they have examined every possibility that it can reasonably look at, including what the other local public employers do for retirement programs. He said Sam Houston State University and TDC are both in the social security system and pay a portion of the employee's contribution in social security, whereas the city never did that. He said there is also an optional or cafeteria type program available at the University in which one can be in a 403 or a 457 or some combination of things that ends up to be quite a respectable package of retirement benefits for a public employee and the state university system is to be commended for the foresight on behalf of their employees. He said the city, however, has the option of remaining in the current 401A plan under Kansas City Life at the 5% two- for -one match, or two other options. He said there are still insurance companies out there offering almost the same plan the city had presented by American General, which is VALIC, or Kansas City Life (current carrier), or any number of other plans that could be presented. He said in addition, they have looked at the ICMA Retirement Corporation, which is an independent, non - profit company formed under the umbrella of the International City Manager's Association (ICMA), that pretty much lacked the insurance plan under the Texas Municipal league that offers worker's compensation insurance and liability, etc. He said ICMA got into this in the early 1980's because it was a developing field and it was an area they offer a wide range of services at a very economical condition and provide a service to their member cities and do something in terms of setting up structure and administering a plan and they are seen to be extremely capable in that respect. He said their plan would also be a 401A and there are some benefits to it that are very interesting. In 1980, and again now, TMRS seems to have the superior plan that the city would offer for the Council's consideration. He said it is a standard pension annuity plan and not a defined contribution plan, but requires all the numbers to contribute and does not allow one to contribute to any other plan. He said those cities that are members of the retirement system under TMRS also were in Social Security, but that does not have anything to do with TMRS. He said what you can't be in TMRS is in the other mandatory contribution plans. He said one could be in a voluntary plan, in 4571s, but one can't be in 4011s, 4031s, etc. He said in structuring the city's proposal the city has considered all the options and is recommending to the Council for their consideration that the city consider a 7 percent employee contribution rather than the 5 percent currently because the employees need to be doing more themselves toward their retirement. He said the city assumes by various treatises on retirement that one should plan to retire with at least 80 percent of one's projected monthly income as the retirement income. He said if one is going to be reasonably comfortable in retirement, that at the time of one's retirement, however much one is going to be making on a monthly basis, one needs to plan for about 80 to 90 percent of that to be available. He said without social security, that 20 to 40 percent lump is not there any more. He said the city has no other supplemental plan. He said what the city has for its employees is what it has currently. He said there is nothing wrong with the security of Kansas City Life or the plan we are in except the limitations it has in that a 5 percent contribution is less than what social security exacts today. Councilmember Barrett made the motion to table this subject and Councilmember Carter seconded the motion. All were in favor and the motion passed unanimously. Mayor Monday suggested bringing this back for a work session discussion next week. Gene Pipes said he will bring this back with a budget presentation with all the financing questions answered. Mayor Monday asked for those numbers in the packet ahead of time so the Council will have a chance to look over them. MAYOR'S ACTIVITY REPORT - -JANE MONDAY Solid Waste Committee Meeting Mayor Monday advised tentatively, on April 12, there will be a Solid Waste Committee meeting with the City-County Committee at 2:00 P.M. to discuss the idea of recycling and how we can work with what we have today and to bring up public awareness in sort of a brainstorming session. MINUTES OF THE MARCH 28, 1989 MEETING BOOK "P" Countywide Clean up/Beautification 284 Mayor Monday also advised on April 25 there will be a first meeting [brainstorm session] to form a new committee to look at the county -wide clean up /beautification /image situation. She asked if the Council knows of anyone who would like to work on that committee to please advise her. Alcohol /Drug Abuse Task Force Mayor Monday advised a committee report from this Task Force is expected soon. The Task Force has set a date for receiving committee reports. She said in four to eight weeks, they will be having that full report back for the Council's deliberation and adoption. Texas War on Drugs Mayor Monday advised she had lunch with the person heading up the Texas War on Drugs, who is very interested in our community approach and in our task force. She said he has offered to send the city a couple of community plans from out of town with which he has worked. He is interested in providing resources for the Council once the plan has been adopted, she said. The Mayor advised he also spoke to the city employees at the Service Center. HISD Task Force--Two Plus Two Program Mayor Monday advised this program combines the last two years of high school and then two years of an associate degree and work on the junior college level where one works for vocational or to identify career goals. She said the Task Force looks mainly at high tech and some of the things that not only train people but will explore the opportunities to institute such a service here, including the possibility of working with other institutions of learning and perhaps some that are in the technology area. He said it is an exciting opportunity for Huntsville and we are already within higher learning and this would be an expansion of another aspect. She said this task force came together to brainstorm that and will be looking at those opportunities. She said she will be glad to share more details with the council. COUNCIL ACTION Cindy Kellgren Commendation Councilmember Knotts expressed his appreciation to Cindy Kellgren, Chief Building Official, and the work that her office does for the city. He suggested Mr. Pipes write one or two more articles on that division to better inform the public of its services. He said he believes the public is not fully aware of what services that department provides. Tax Abatement Discussion Councilmember Bell asked when the tax abatement discussion will take place. Mayor Pro tem Howard said no date has been set, but the steering committee (larger group) is having discussions with the Chamber of Commerce and when that meeting is set, he felt the council committee should be there. Councilmember Bell requested that any committee report to be taken to the Chamber group be first discussed with the council as a whole. Councilmember Gaines said it was her understanding it would be discussed with the entire council first as this committee is not entitled to make any decision for the city. Mr. Pipes advised the Economic Development Corporation has discussed tax abatement but has not come up with a plan as yet. Councilmember Knotts said the city should have its own policy. Councilmember Gaines reported that the HISD school board brought up some things discussed at the meeting in that there are some limitations as far as the amount of money that would be capital outlayed for business; how many employees they would need to generate in order to be eligible for this and the terms. She said one thing they didn't look at indepth was the year of the 1 i MINUTES OF THE MARCH 28, 1989 MEETING BOOK "P" 285 percentage, whether it would be 100% in 5 years in a declining scale, etc. Councilmember Green asked that the council committee bring a report back to the Council. City's Retirement Plan -- Minority Report Councilmember Bell noted he does not want this to be divisive and certainly did not want to create polarization, but as he reflects on the fact that a committee has been working on the retirement program, there seems to be at least some partial disagreement among the employees. He asked if it might be appropriate in order to at least give everyone a chance to air their positions, for the Council to hear a minority report as well as the majority report. Mr. Pipes said he felt he covered that before he got to the TMRS recommendation in that the ICMA, an independent, non- profit administrative organization structured totally for retirement plans would have a 401A, which is what the City has under Kansas City Life. He said, the administration would be a lump sum distribution or at the employees' option, a pension at retirement age and would have, again based on 7 percent double match and the role of the 401 credits, to end the Kansas City Program and go into the ICMA, which would be very competitive. He said both plans are comparable in their own right. He said the Kansas City Life Plan would roll into the ICMA plan and the combined total would make it nearly as comparable to TMRS with the bought back credits. Councilmember Bell noted the trustees would be asked to vote on a very critical issue to the future of all employees and he virtually would like to hear a spokesperson for the minority report as to why they want to go with another . . . Mr. Pipes interjected they took secret ballots and it is hard to find a spokesperson. He said he was trying to characterize all given positions, because he didn't want to feel Like anyone had to vote any way but their conscious, having deliberated all the information. He said in terms of going to the entire employee group, if there is something less than a majority consensus in the minority report, it is appropriate. He said the ultimate decision rests with the Council. He said he would hasten to say that it was a very difficult deliberation and very strong advantages or assets to the 401A Lump sum distribution, noting that is hard to say that we don't even worry about it if we are going to get $354,000, one might not worry about how long one will live. Councilmember Bell asked that the City Manager present both plans to the Council next week. Mr. Pipes said he did not wish to have representatives here to present their plans and then debate the merits of the two plans as the committee has already been over all of that type information and it is difficult to capsulize the pluses and minuses of different plans. Mayor Monday said the Council will have the opportunity to ask more questions next week and can then look into each plan in more detail if they so wish. (Personnel Committee Councilmember Howard advised the personnel committee will be bringing back a report at the next meeting as soon as they work out a meeting date. (Underground Utilities Dialogue with GSU Urged Councilmember Carter noted because Mr. Dennis Singletary, GSU Manager is here, he wished to mention some of the Council's concern for having underground utilities for new construction and also underground utilities in terms of old streets where the city is doing some utility work already. He said he is pleased to see GSU has a new manager as perhaps now we can have some real dialogue about possibilities. He said it is his understanding that Gulf States Utilities almost has a hostile policy about underground utilities. He said he would like to open that dialogue with Mr. Singletary about the possibility of underground utilities. Mr. Singletary said he will be happy to open the dialogue, but is not certain where we will go with it. MINUTES OF THE MARCH 28, 1989 MEETING BOOK "P" 286 Councilmember Carter noted a response letter before him from Allen Hightower's office indicating his eceipt of the city's letter to oppose H. B. 64 concerning same day voter registration. He then advised he s not opposed to same day voter registration and does not recall discussing this item. He asked for a larification as to the city's stand for or against this proposed legislation. Mayor pro tem Howard advised the Tax Abatement Committee will have its information ready by next for the Council to review. MEDIA INQUIRIES KSAM Reporter, Bill Shoening, inquired as to the status of the demolition controversy surrounding he Smith Building. Mr. Pipes, City Manager, advised the Walker County Historical Commission members are till considering its value. He said the matter is in somewhat of a static condition pending every pportunity of the Historical Commission or the current property owner to establish the historical or rchitectural value and file a plan for its renovation and correction of the safety problem. RECESS TO EXECUTIVE SESSION The Council then met in an executive session to consider a real estate acquisition matter for inage purposes. No formal action was taken as a result of this meeting. ADJOURNMENT Respectfully submitted, Ruth DeShaw, City Secretary March 28, 1989 v