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MIN CC 04/11/1989CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 295 • II MINUTES OF THE HUNTSILLE CITY COUCIL METING HED ON THE 1TH DAY OF APRIL, CHAMBERS, LOCATED AT V 1212 AVENUE MN IN THE EC IT OF UNTSVILLE,1COU NT OF WALKER,19TEXASNATH6:45TP.M. COUNCIL I fl 1 The Council met in a regular session with the following members present: Jane Monday, Mayor 0. Eugene Barrett City Officers present: Gary Bell James L. Carter Gene Pipes, City Manager Ila G. Gaines William B. Green Scott Bounds, City Attorney William L. Hammock Percy Howard, Jr. Ruth DeShaw, City Secretary William H. Knotts, Jr. CITIZEN INPUT Mayor Monday called the meeting to order for the purpose of hearing citizen input: Margie Allen of Reliable Cab Company and Carl Huffstickler of Freedom Cab Company to request taxi parking Ms. Allen advised she and Mr. Huffstickler are desperate about having a designated taxicab parking area at the bus station. She said she and Mr. Huffstickler work well together and work well with Mrs. Ilene Story, Local Manager of the Huntsville Office of the Trailways bus company. Ms. Allen asked for designated parking spaces on both sides of 12th Street in the 1200 block for the taxis at the bus station. She said there are two vans out of Houston that are parking there whose drivers claim they have Railroad Commission Permits to be able to come in to pick up passengers. She said it is her understanding that the Railroad Commission Permit allows one to pick up anywhere. She said these gentlemen are parking there for hours and waiting to pick up inmates to take them out of town. She said they are taking up space that the local taxpaying taxicabs need. She said the out of town vans drivers are hawking up and down the sidewalks for passengers. She said she has visited with the Police Chief about the matter, but it is getting out of hand again. Mr. Huffstickler agreed with Ms. Allen. He said the last time he and Ms. Allen appeared before the Council, Mrs. Ilene Story of the bus station opposed their request, however, she is now in full support of their request, but was unable to be at this meeting. He said today the bus was due in at 5:00 P.M., but neither of them could find a place to park in an area where they could possibly get riders from anyone coming off the bus. He said it is an economical consideration for the city, noting the Houston based vans pay no local permit fees or taxes. He said the money the Huntsville taxicabs earn is spent in Huntsville. He said he would appreciate any help the Council can give them. Mr. Scott Bounds, City Attorney, advised it is his understanding the "status quo" in the area of the Walls Unit has changed in the last couple of weeks. He said a company from Houston has received a permit from the Texas Railroad Commission to operate a bus service from Huntsville to Houston and Dallas. He said it is his understanding they are using the Railroad Commission rules and an extended van qualifies as a bus and that they are using at least two extended vans as their buses in picking up inmates and transferring them from the Watts area to Houston. He said he talked to the gentlemen who operate the company and he advised them in writing that their permit from the Texas Railroad Commission does not permit them to operate as a taxi service within the City of Huntsville and that they cannot take people from one point to another point in the city without a City taxicab permit and that they are only permitted to pick people up in Huntsville and to quote a fair and take them to a designated location as provided by the Railroad Commission. He said he also advised them the City does have a hawking ordinance and that they are not permitted to get out and solicit on the sidewalks or on the public streets any rides from Huntsville to those other areas and that they have to comply with these same rules with which all the other merchants must comply in that particular area. The Council was reminded that about a year ago, the taxicab operators asked that the City designate specific parking places along the street in that area as taxicab standing zones. Mr. Bounds said at that CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 296 ime there was opposition expressed by the bus company across the street from where the taxis wanted to have heir zone designated. He said the city did not designate a taxicab standing zone and that problem seemed o be resolved. He said he assumes that this change in "status quo" is that these vans are parking in an rea that was used by the Huntsville taxicabs for their purposes under the city's taxicab permit ordinance, o transfer people from Huntsville to Houston and Dallas. He said at the present time, the city has dvised the new bus company of the ordinances that affect them. Councilmember Knotts asked if there is any way the Houston bus company would be required to have heir own terminal? He said it appears they are using the Trailways terminal as their own. Mr. Bounds said e will look into this matter, noting the Texas Railroad Commission regulates this activity and he is not ure of the limitations. He said he will investigate to see what the City Council's parameters are on equiring the bus company to have its own terminal, noting Hearne has had a similar situation arise ecently. Councilmember Bell asked what the arguments are against having a designated taxicab standing zone s they have in Houston? He asked why the City cannot just put up a sign stating taxicabs only. Mr. Bounds aid there is generally adequate parking in the area, however, the city could designate certain parking reas. He said there was some disagreement during the last visit from the cab companies as to where the axicab zone should be designated. He said as a result of that disagreement, the city chose to wait to see chat could be worked out on a voluntary basis. Councilmember Bell noted obviously it does not work out on a oluntary basis anymore. Mr. Pipes, City Manager, noted the equation has changed. Councilmember Bell asked f we will be looking at a taxicab standing zone now. Mr. Pipes said we could look at it as an option. ayor Monday asked that the parties all be brought together to see if there could be a four way agreement nstead of a three way agreement. Councilmember Bell asked if the city should be the vehicle for setting up hat four -way discussion. Mr. Pipes said the city can be that vehicle. Councilmember Bell then recommended o the Council that the City be the vehicle for setting up the discussions. Mr. Pipes said he would be glad o do that. Mayor Monday asked the City Manager then to bring back the recommendations that may come out of uch discussions. PRESENTATION OF AIRPORT AWARD Mayor Monday advised last Friday she had the opportunity, along with Mayor Pro tem Howard and ouncilmember Bell and City Planner, Dale Brown, to go to Austin to receive a very special award for the ity of Huntsville from the Texas Aeronautics Commission. She said the award says: "The 1989 Texas eronautics Commission Airport Award is presented by the Texas Aeronautics Commission to the Huntsville unicipal Airport for Outstanding Service to Aviation.', She said she is very proud of Wade Gillaspie, to hom the city has leased the operation of the airport and who serves as Airport Manager. She then presented his award to Mr. Gillaspie who noted he will hang it proudly in the airport administration building. Mr. illaspie said it is good to be recognized for one's efforts. He accepted the award on behalf of the City, he Mayor and Councilmembers and staff and anyone who has been involved with the improvements to the irport in the past. He invited everyone out to see the fine airport facility. Mayor Monday advised the ity indicated to TAC in Austin that it considers the airport to be the "Gateway to Huntsville," and the irst people they see are Wade and his staff. She said we know they give our visitors a friendly and warm elcome and the city is very proud to have him out there as the "lead ambassador" for our town. FORMAL SESSION CONVENED Mayor Monday then called the formal session to order. Mr. Cecil McKee, retired Methodist minister, J the invocation. 1 1 CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 297 CONSIDER THE MINUTES OF THE PREVIOUS MEETING Councilmember Barrett made the motion to approve of the minutes of April 4. 1989 and Councilmember Howard seconded the motion. Discussion: Councilmember Bell noted in reading through the minutes, that he found them to be very complete and accurate and he appreciated the effort that goes into the preparation of the minutes. He said he feels Mrs. DeShaw does a fine job on the minutes. All were in favor of the motion to approve the minutes and the motion passed unanimously. REVIEW TEXAS MUNICIPAL EMPLOYEES RETIREMENT SYSTEM PROGRAM Overview and discussion of the proposed Texas Municipal Retirement System (TMRS) - -Mr. Gary Anderson, Assistant Director Mr. Gene Pipes, City Manager, advised the city did make a preliminary report to the Council a few weeks ago and followed up on the Council's questions raised at and since the earlier meeting. He said the city employee committee's efforts for the past six months had been largely an investigation. He said prior to that time, the city had not given the full spectrum of information to the city employees, but it was simply a recommendation of an 18 member committee. He said the city wanted the Council's review and cursory response before time was spent to gather all employees together to hear the presentation. He said the city has held those meetings with the city employees throughout this day, with Mr. Gary Anderson, Assistant Director of the Texas Municipal Retirement System (TMRS) making the presentations along with Mr. Scott Bounds, City Attorney and himself. Mr. Pipes noted some of the employee committee members are present here this evening. He said the employees are encouraged to voice their concerns, opinions and questions to committee members so that the committee can get back together and then bring back to the Council all of the information they have been able to develop as a result of this investigation. He said there was some potential some weeks ago of a minority report. He advised that would be difficult to provide since the ballots were done by secret as to the preference to the ICMA plan vs. the TMRS plan. He said as a result of any questions that are forthcoming from the employee group as a mass, the various insights advanced will be made available to the Council as to what the responses were and where we are at this point. Mr. Scott Bounds advised that the Prior service credit feature of the TMRS plan is required. He said the city has to adopt the prior service credit at the same rates that it adopts for the contribution for the city match if it adopts the TMRS plan He said while the city cannot reduce the employee's contribution rate without an election of the employees the city may unilaterally, without employee approval chance its own matching rate at the beginning of any plan year for the retirement plan. He said in addition to the other safeguards, this enables the city to adequately control the cost of its overall retirement program even if federal law should change at some time in the future. M r . Bounds t h e n introduced Mr. Anderson, who will give an overview of the TMRS plan and address any concerns the Council may have. Mr. Anderson said he felt the meetings held with the employees were well attended and the employees participated by asking lots of very pertinent questions and the answers were helpful to all who attended. Mr. Anderson presented a brief history of T.M.R.S., noting it was established by legislative act in 1947 for the sole purpose of providing a statewide retirement program in which municipalities could elect to participate. Prior to that point in time, he said, there was no statewide system for cities. The statewide teacher retirement system had been in existence for several years and began operation in the late 19301s, he advised. The state employee's retirement system was established in the 19401s, however, there was no system for cities, Mr. Anderson said. He noted city employees, city officials, mayors and councilmembers, city managers and other interested officials, through the auspices of the Texas Municipal League, lobbied the legislature to pass an enabling statute to allow a statewide retirement system for municipalities to be establ i shed- -T.M.R. S. began operating in 1948 with no member cities and no members. He said the only state money the system has ever had was a loan of $50,000 to actually begin operations, secure office space and CITY COUNCIL MEETING MINUTES.OF APRIL 11, 1989 BOOK "P° 298 the salary of the director and his secretary until the system could get underway. He said that loan was Raid within two years after the system began operation and cities began joining. He said every city that s joined TMRS has done so by passing a participation ordinance and some 549 cities throughout the state o participate in this program, covering more than 80,000 municipal employees. He said TMRS pays monthly nuity checks to more than 8,000 retired employees or the beneficiaries of retired and now deceased :)loyees. He said the assets of the Retirement System are approaching two billion dollars. He said the tirement System is governed by state statute and one of the provisions of that statute is that the system 11 be administered and governed by a six member Board of Trustees, appointed by the governor for six year rms. He said by law the trustees must all come from member cities of the retirement system and any ployee member is eligible for appointment as well as any elected official. The statute further states at at any point in time, there must be at least three employee members on the board of trustees, he vised, and currently there are no elected official serving as trustees, but there have been in the past. said the trustees are charged with the policy making and administration- - overall operation- -they hire and point an executive director who is responsible for the day to day operations of the system and the hiring the staff. Mr. Anderson advised when a city passes the participation ordinance, it provides that all employees ill become members of T.M.R.S., and participation is mandatory as it is in the city's current retirement tan with Kansas City Life. He said the city also establishes the employee contribution rate by ordinance Mr. Anderson id those rates can be changed in future years; i.e., if the city began participation with a 6 percent ployee contribution with a two to one matching ratio, the council can vote to increase the employee's ntribution but it could not vote to decrease the employee's contribution rate, unless the employees nsented by two - thirds majority to that reduction. He said the city's matching ratio can be adjusted ward or downward at the Council's discretion. He said if the city starts out on a two to one basis, and some point in the future, elects to reduce that matching one and one -half to one, or one to one, that uld be done. Conversely, if the city began participation at a lower matching ratio, that could likewise increased in future years. The Council was advised that when the city ioins the system, each employee receives prior service redit back to his or her original date of employment with the city. Mr. Anderson said that credit is both Length of time credit; i.e., if the person has been with the city for ten years, he is going to receive 20 months, or 10 years of credit. He said there is also a monetary credit assigned to that prior service hich actually becomes the person's prior service credit. He said it is made whole, in terms of his etirement credit, equal to his tenure with the City of Huntsville. From that point forward, he said, each mployee will contribute whatever the percentage is, 5, 6 or 7 percent of wages which will be withheld by he city. He said that money will go into the employee's own account with TMRS and will earn interest on an nnual basis. He said at the time of retirement, that amount will be matched on a two to one basis, for xample, if that is the matching percentage selected. He said the employee, at the very least, will always at his money plus interest from the retirement system. He said if an employee only works for the city a hort time, pays into the system and then terminates, he will always get at least a refund of his ontributions plus the interest that money has earned. He said if the employee stays long enough to qualify or retirement, he will get the advantage of the city's contribution, both the matching and that prior ervice credit granted when the city joined the retirement system. However, he said, if a employee who has een here for five years and then joins the retirement system and gets five years prior service credit, and f he works three more years and then terminate employment and withdraws from the system, he would only eceive those three years of contributions that he had made to the plan and would not be refunded the prior ervice credit that was paid for by the city. That prior service credit would only go to the benefit of hat employee if he stayed in the system the minimum number of years to qualify for retirement and actually etired and received a monthly annuity from the system, Mr. Anderson said. He said the same is true for the ity's matching funds. He said if a person works for several years and then withdraws his money from the 1 1 CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 299 system in a lump sum, he only receives his contributions and will not receive any of the city's matching funds. In regard to service retirement eligibilities. Mr. Anderson said a Person has to work at least ten years to qualify for retirement benefits- -that is the minimum service requirement noting employees are vested after ten years of service. He said if the employee has at least ten years but less than 25 Years of service, he would have to be 60 Years of age before he could withdraw his retirement Once the employee obtains 25 years of service, he can retire regardless of age. He said many people become, if they go to work for a city at a young age, eligible to retire at a fairly young age. He said TMRS's experience throughout the state is that most employees do not retire the day they become eligible; i.e., there are members in the system now who became eligible to retire in their late 20's because they went to work at a very young age. He said most people at this point in their careers, are at their best salaries and in the best job they have ever had and continue to work in that capacity for some years into the future. Mr. Anderson said if an employee becomes disabled to the extent he can no longer perform the duties of his job. and if that disability is likely to be Permanent he can be retired if approved by the medical board of TMRS on a disability benefit, regardless of his Years of service or age In other words, if an employee at 18 years of service is 40 years of age and becomes disabled and can no longer perform the duties of his job, he could be retired and his benefit would be calculated based on those 18 years of service, using his funds, plus the city's matching funds. The Council was advised in the event of the death of an employee that if an employee is not vested at the time of death - -that being a Person with less than ten years of service - -the beneficiary would receive a refund of his accumulated deposits plus a supplemental death benefit equal to the member's annual salary- -a one time lump sum Payment. He said if the employee was vested at the time of death - -had more than ten years of service but was not yet retirement age --and his beneficiary is his surviving spouse, she would have the option, in lieu of receiving a lump sum refund of the member's contributions, of leaving those funds on deposit with the system until such time as the member would have been 60 years of age and then begin receiving the monthly retirement benefit at that time. He said she would also receive the lump sum payment equal to the member's annual salary - -a one time payment. Mr. Anderson said if the employee was eligible to retire at the time of his or her death- -and the employee already had 25 years of service but was still working for the city, the annuity monthly retirement benefit would commence immediately and the beneficiary would also receive the supplemental death benefit of one times annual salary. While TMRS is a fairly comprehensive plan, Mr. Anderson said, obviously it does not cover every particular circumstance or change of events, but it does cover the employee and has a normal retirement for those people who work a career for the city or for several cities who are members of the system. He said it also provides coverage in the event of disability or in the event of death. Service is portable between all of the cities in the retirement system: in other words if a Person works ten Years for the City of Huntsville. ten Years for the Citv of Waco and ten years for the City of Plano he will have three separate accounts in the retirement system because each of those cities may have a different contribution rate or matching ratio, but 30 Years of service would be cumulative so he would retire on the full 30 Years of service. He said a portion of his annuity, however, would be paid by each city under which he had service. Portability is a key factor, he said, and is a major consideration in people's job change decisions. He said it will assist the city in attracting qualified and experienced Personnel to the employment of the city, who are working for another city. In addition to Portability within other TMRS cities, there is also a statute that allows employees who have creditable service in anv of the statewide retirement systems to combine that service for retirement Purposes He said the statewide retirement systems are: the TMRS; the Texas County and District Retirement System; the Teacher Retirement System of Texas; and the Employees Retirement System of Texas, which covers state employees. He said there is also the judicial retirement system in Texas, but there may not be as much portability between that system and municipal government. He said if a person works a career in public employment within the State of Texas, part of that being at the municipal level, that tenure is combined for retirement eligibility purposes, CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 300 i.e., a police officer, for instance, working eight years for the City of Huntsville and then working for the DPS and becoming a member of their retirement system, will have his money remain in TMRS as it does not transfer to the state system, but for determining when that person is eligible to retire, the years of service in both systems are combined for determining eligibility for benefits. He said if a person remains a public employee in the State of Texas, with very few exceptions, he is going to be in one of those four statewide retirement systems. He said this is an enhancement for those people who wish to make a career of public service. In the city's viewpoint, he said, it can sometimes be a factor in its attracting a person for a particular job, such as a city librarian, because that person may not have worked in another city, but at a university library, and transferability of retirement benefits may be a real issue for that person. Council Questions Councilmember Green asked in calculating benefits, TMRS will come up with a number based on what the employee has contributed, plus interest; and if TMRS is updating service credits, as recommended by TMRS from time to time, how does that affect that number? Mr. Anderson said if we have a person on a career of 30 years, to illustrate this example, and he is in TMRS, and there is a 7 percent two to one plan and the city hires a new employee, say a police officer, who starts out earning $1,000 a month, and that person stays with the city and is contributing all along 7 percent of his salary and he moves up to sergeant and Lieutenant and eventually becomes the chief and ends up making $70,000 a year, and if the city adopts updated service credit at that point, this chief will have established a basic credit in TMRS based on what he has actually paid in down through the years that the city has agreed to match on a two to one basis; however, because of the fact that his salary has increased, and his salary in his last years are his best earnings - -if the city elects to adopt updated service credit, then TMRS will recalculate his benefit as if he had earned those last three years salary for the entire period of service. Councilmember Green said then if this chief retired and was earning $100,000, TMRS would assume that for those 30 years, he would have paid in $7,000 a year and earned interest on that for 30 years. City Attorney, Scott Bounds, said with regard to the interest assumed however, the actual interest and the assumed rate of interest are not necessarily the same. Mr. Anderson said the actual rate of interest, if he would have earned what it was during each of those years, in the updated service credit calculation, when TMRS calculates the hypothetical amount he and the city would have contributed, had he earned that salary the entire 30 years, there is a 3 percent interest factor in that calculation. Mr. Bounds said then for the last five years, the actual amount is 11.9 percent and assuming the 3 percent interest figure, it is different. Mr. Anderson said the net effect of this is to give the person a retirement benefit that is more reflective of his salary at the time of retirement. Councilmember Green asked if we add to that then what the city has contributed as if they had contributed $14,000, if we were at the two to one match today, would we calculate as if they had contributed $14,000 a year but we don't add in the interest? Mr. Anderson said that is correct as they calculate what the employee and the city would have contributed for those special years. Councilmember Green asked where the interest goes that is earned on the city's contribution. Mr. Anderson said it is in the employee's account. Councilmember Green noted the information states the deposits the employee makes, plus interest will have added to it the sun the city has agreed to pay, but nothing is said about the interest on the city's portion. Mr. Anderson said the city by law earns the same rate of interest on its deposit as is credited each year to the employee's deposits and those rates have to be the same. He said this is in the city's account. Councilmember Green noted then that interest does not go into the individual's account and Mr. Anderson agreed, saying the only thing that goes into the employee's account is whatever rate TMRS credits every year against what the employee has in the system. Councilmember Green noted then whatever the city's money earns, stays with the city. Mr. Anderson said that is correct. He said each city is accounted for as a separate entity in the system and each has its own balance sheet. Councilmember Green asked if it is true that the employee earns no interest on the city's contribution. Mr. Anderson said the city is matching what the employee has paid in, plus the interest he has earned on a two to one basis at the time of retirement, so in effect, the city is matching all of the employee's deposits but also the interest his money has earned, but it has been the same rate over the period of years. Councilmember Green felt the information does not state that 1 CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 301 exactly and he does not understand that as it is written in the handbook. Mr. Anderson noted the handbook is an attempt to distill the law to put it in a fairly readable form for employees to read and to get basic information. He said the act itself governs and it says that whatever rate of interest, and that rate is set each year by the TMRS Board based on the investment income of the system, it has to be the same for crediting to the employee's individual accounts and to each city's account. Mr. Anderson stated the undated service credit. aaain is an option as the city does not have to adopt that, but it aives the City's plan a similar type benefit to the career employee for example as the teacher retirement which is a defined benefit plan which is based on a formula: years of service times factor, times the highest three Years average_ Mr. Bounds asked, with regard to the open -end service credit, by experience, how will that affect the city's annual contribution? Mr. Anderson said cities that adopt updated service credit on an annual basis don't see fluctuation in their contribution. He said the reason most cities elect to adopt updated service credits annually is because they do want to keep their employees' retirement benefits up with changes in their salaries. He said by recognizing those changes annually, on an incremental basis, it allows the city to have a more level rate as a percentage of payroll, particularly in what happens if a city does not adopt updated service credits, as in many cases, the contribution rate actually declines. Councilmember Green asked who is funding that liability? Mr. Anderson said the city funds it. He said the key point is that the city has to consent to do that as it is not mandatory. Councilmember Green asked, relative to the updated service credits, if we go two to four years and the City does not update, and then it decides to update, is the city required to update for the entire period? Mr. Anderson said "yes" to this question and the city would, in effect, bring that up to that level depending on how salaries have changed. Mr. Pipes said the contribution would have declined for the three years and on the fourth year, if the city chose to update, it would come back up to the level and that creates the roller coaster phenomena. Mr. Anderson said the updated service credit first became available to cities in 1976. The law was originally amended to give cities an option. Cities had to wait four years between adoption of updated service credits, partially because it was a new concept and the system wanted to see actuarially how that concept was going to work and there was some concern about higher rates of inflation and rates might really climb significantly and that there ought to be some breathing room. He said what was found is that cities that adopted it in 1976,and the rates started tailing off, and they came back to update it again in 1980 and found it had moved up, so many cities said they would like the option of updating annually. TMRS would rather they update each year and keep the rate at a constant rather than having it moving up and down, Mr. Anderson stated. He said the law was then subsequently amended in 1981 to allow cities to have an option to update annually if they choose to do so. He said the experience, regardless of the size of the city, has been those cities that update their service credit annually have a very level contribution rate as a percentage of payroll; the adjustments upward and downward are in terms of two to three tenths of a percent of the contribution rate, or small adjustments. Councilmember Carter asked if the Council has to take action to adopt updated service credits annually or is there some option that it can choose now so that it will be done automatically. Mr. Anderson said they have an actuarial study done for each of their 500+ cities annually and they send that study to the member cities saying here is the contribution rate under the current plan and if the city elects to adopt updated service credits, here is what the costs will be to do that. He said it is then incumbent upon the city to adopt that provision by ordinance. He said the City cannot do this one time but must make that decision annually. Councilmember Knotts asked if. in the history of TMRS have they ever had cities drop the plan Mr. Anderson said there have not been any cities drop. He said there is a provision in the plan that says when a city joins the system, it can't discontinue participation for those persons who are covered by the system. He said the only action that could be taken in the future would be to pass an ordinance saying that effective a certain date, no new employees will be added to the system. He said there was an CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 302 instance, back in the 1950's in the smaller cities, which may have been political situations, where they came into the system, brought their employees in, and the city council subsequently said it would not allow any new people in and they passed an ordinance to discontinue participation as to new employees and gradually, through attrition, that city dwindled down to no members. However, a couple of those cities are again in the TMRS. He said that happened only in a couple of small instances and those were small cities. Mr. Anderson said if the city council elects to Participate in the system, it makes a contract with its employees that they will have this retirement system and it cannot be discontinued as to those People who are covered by the plan; it can only be discontinued as to future participants. Councilmember Carter noted it has been stated the council can change the matching ratio; two, one and one half to one and the council can also change the 5 %, 6% and 7% employee contribution on an annual basis. Mr. Anderson said the council can increase the employee contribution Percentage rate but it could only reduce it with the employee's consent by way of a 2 /3rds majority vote of the employees. however. the city can change its matching ratio unilateral) Councilmember Bell said as he understands the program, there is no lump sum option. Mr. Anderson said that is correct, but the only lump sum available is the employee's actual contributions and earned interest; even at retirement, he said if he participates in the plan for 30 years and is eligible for retirement and wants a lump sum, he can only get his deposits and any interest those have earned in lump sum, but cannot get any of the city's matching funds. He said to take a lump sum withdrawal of the employee's contributions would mean he would forfeit the city's contributions He said this is a pure retirement system and the only time in which the city's money is spent is if a Person actually retires and receives a monthly annuity; otherwise the city's contribution is forfeited and remains in the city's account. Councilmember Bell noted, for an example, that he works for TIAA and if he were to terminate his teaching profession and become a policeman, would he be able to buy credit in TIAA subsequent to having Left the system and is there such a provision? Mr. Anderson said there is no provision like that and the only credit he could earn under TMRS is as an employee of a member city of the retirement system, except for active duty military service, if the city elects that option. Councilmember Bell noted then, for an example, that an employee could buy credit for military service if the city elects that as an option to the plan. Mr. Anderson said that is correct, noting the rate is $15.00 Per month up to a maximum of 60 months of active duty military service. Councilmember Green said he assumes that the way TMRS calculated what the city's rate would be is based on the assumption that everyone currently working stays forever so that if the vesting periods should be reduced, either by law or IRS regulations, etc., that would not affect the city's contribution. Mr. Anderson said in calculating the city's contribution rate, the actuary calculates that based upon actuarial assumptions . . . . their vesting period to ten years, that would require an adoption by the city and yes that changes the rate. He said recently federal law requires five year vesting, but that applies to all private plans, however, state and local plans were exempted from that. He said at some point in the future, if five year vesting were to become the norm, and if the Legislature amended the TMRS statute to make that available, TMRS would have to go to every city and ask if it wanted five year vesting as that would affect their contributions. He said constitutionally, the Legislature cannot impose a cost on the city without the city's consent. He said that is why it might be nice if everyone has a 7%, two to one retirement program. He said any provision adopted by the city has to be done by ordinance as the Act just sets forth the general framework and the cities select, based on costs, the type of program they wish to provide. He said the city has this control. Councilmember Green asked if it is by law. statute or custom that would not allow 401 Plan monies to be rolled into Prior service credit. Mr. Anderson said the statute Provides for "no roll over" of other monies into the Retirement System (TMRS). He said they do have a Provision in their statute that allows for a "Merger" of an existing retirement plan into the TMRS which includes 401 plans the City's plan etc He 1 1 CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 303 said. however. these mergers are complicated in that basically the same rights and Provisions the employees had under the existing plan have to be Preserved within the context of the merger. In other words he said if they are entitled to their money and the city's money, that would have to be Preserved in the merger agreement to where their rights are not being diminished Councilmember Bell asked if this merger would take the place of the city's liability for prior service. Mr. Anderson said it could practically offset the cost of funding that, however, what would complicate this, in the city's case, is that as he understands the existing plan, the employees would be vested both in their contributions and the city's contributions, so if they brought those over into the TMRS, and a year later, that person quits, he is still going to get all, or both sides of the money that was merged, but what he had paid into TMRS after the day of the merger, he would only get his contribution and not that of the city's. Mayor Monday asked if this Merger Option was reviewed as far as the cost to the city versus the Proposed Plan to terminate Kansas City Life and start anew with TMRS? Mr. Anderson said this could be done however, merger studies are done by the System and the city has to consent to pay for a merger study and they are rather expensive because of additional actuarial expenses being incurred in making the studies: i.e.. $10.000 could be involved in making a merger study for the City of Huntsville to determine a basis for the merger. He said this would have to be Daid whether the city decided to do it as a merger or not Mayor Monday indicated she was not aware a merger was even a possibility and that raises a question. She asked what kind of costs would be connected to a merger situation which would be a differential to the city. Mr. Anderson said the employees' rights under the existing plan would have to be preserved. Mr. Scott Bounds, City Attorney, noted this is an important point and he had discussed the possibilities of a merger with Mr. Anderson. He said under the IRS rules and TMRS rules, there are problems. Mr. Bounds said the city has, at the present time, a qualified plan that has received IRS qualification, although the city is not subject to certain rules of the Department of Labor and not subject to certain recent rules, the city has a qualified plan document. He said under the Employees Retirement Income Security Act (ERISA) rules, since the city's plan was qualified as written in compliance with some of the recent rules, it might not, technically be in compliance. He said under the ERISA rules the city would have a practical termination of the 401 Plan if it changes the rights of the employees in that plan. Under the terms of ERISA, he said, the city can have a practical termination of a retirement plan if the city affects its vesting schedules or the contribution rates, etc. which would trigger a termination of a 401 Plan. He said he also investigated the possibility of trying to continue the existing 401 Plan by rolling it over or merging it with ICMA, another vehicle, and having the city contribute a small percentage to the 401 Plan and adopt TMRS so that we would basically have two retirement plans which would adjust the contribution rates in those as one effective plan. Mr. Gene Pipes said what would be done is basically freeze the 401 Plan where it is so we would not have to continue making contributions or make them so small that we could ice it where it was, but it can't be done. Mr. Bounds said under state taw, the city cannot continue to contribute to a retirement plan if it adopts TMRS. Mr. Pipes said the enabling act for TMRS does not allow the city to contribute to anything else if we are mandatory members of the TMRS plan. Mr. Bounds said if the city does not contribute to its plan, it is considered terminated by the rules. He said in looking at a roll -over to ICMA and a freeze on the account, ICMA's charter prohibits accepting a retirement plan where there are no contributions being made to the plan as they no longer consider it a qualified plan. He said as he understands his conversation with Mr. Anderson theoretically, a merger might be worked out, but as a Practical matter, the merger is not a viable option due to the situation with the city's 401 Plan. Mr. Bounds said we cannot merge our existing 401 Plan into TMRS. He said we could freeze the 401 plan and cease to make contributions to it and immediately vest everyone in their account and not pay out any of those monies in that account until those people reach retirement age or older, otherwise get an action resulting in a distribution of the plan. Mr. Pipes advised the city has the only 401 Plan in the State of Texas and there is not a lot of case law or bench marks for comparison. He said under the TMRS rules, there are no exclusions and under the City's 401 Plan, the IRS qualification is the complicating factor in terms of can we merge the City's 401 Plan into the TMRS; it has never been done because the City's plan is the only one like it in existence. CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 304 Mayor Monday noted then a study would be required to determine if a merger is possible. Mr. Anderson said a merger study will require money in addition to the need for both a legal and an actuarial basis for the study, and this will be very, very involved. He said the merger not only has to be agreed to by the City, but also by the Board of Trustees of TMRS. He said depending upon what the ramifications of that study are, the Board may or may not want to, for example, agree to a merger of a plan that provides lump sum benefits that represent both the employees' and the employer's contributions, because the System has never had that. Mayor Monday noted then TMRS would have to administer our portion of the plan, which is a complication. Mr. Anderson said that would be an extremely complex thing, assuming all the actuarial and legal bases could be covered. Mayor Monday said that is a possibility but the only reason for doing that is if there is benefit to the city or the employees by doing it, which would mean the city will need to look at dollars that could be saved by the city, because the employees are going to have their rights protected so they are not going to have a disadvantage. She said she assumes the reason to merge is that there would be a significant dollar savings from the city's standpoint to justify the study. Mr. Pipes said if the city is not going to have their contributions reduced by the merger, there would be no advantageous position for the city. He said since the city's qualified plan states that the money belongs to the employees at the time the city ceases making deposits, the city would get no credit value for any merger in the plan. Mayor Monday said what might be saved would be the additional dollars regarding the vesting or prior service credit. Mr. Anderson said that would, again, involve whether that is the employees money and whether that could be used as an offset of the costs. Mayor Monday said she also heard another alternative that instead of automatic distribution to everyone at this time, that the contributions could be frozen and held for distribution in the future. She said she did not know the ramifications of that. Mr. Bounds said the main ramifications there are that the city would assume the responsibility of continuing to maintain the fund and the Dian administration cost He said the city would have to file all of its existing cash reports, annual reports each year and continue to account for the fund and incur administrative expense of that fund until everyone retired out of it. Mr. Anderson said if a merger is consummated with TMRS, TMRS would also have to maintain that special status for every person who became a member of the system by virtue of that merger. He said there are tong term ramifications because these employees will have to be treated differently than all the other members of TMRS. He said the TMRS Board would have to assume the fiduciary liability to make sure all of this is done correctly. He said the Board may or may not choose to do a merger on that basis. He said ultimately they would have to consent to do that and it is not an automatic thing. Councilmember Gaines asked if TMRS has an administration cost. Mr. Anderson said they do not as their administrative expenses come out of the investment earned in the retirement system and there is no membership fee. He said the only charge, if TMRS were to have to maintain a merger situation, would be for the initial merger study, and the city would have to agree to pay for this because TMRS would have additional actuarial costs involved in such a study. Beyond this, there would not be an administrative fee. obviously, he said, a merger would entail additional costs for TMRS, and that will be a consideration LL Councilmember Bell asked if there had been any reservations or negative feedback from the employees during Mr. Anderson's presentations. Mr. Anderson said he did not receive negative feedback but did answer a lot of questions concerning a further explanation about how things would work. He said the people that asked questions did not ask negative questions, rather questions for clarification. Mr. Pipes said one question he received was "What's wrong with Kansas City ?" He said he responded by saying nothing is wrong with Kansas City and the money is perfectly safe, however, ten years ago, the administrative costs were a part of the operation of the system. Three years ago, he said, Kansas City elected as a company not to do that any longer and farmed out the administration of those individual accounts to a third party administrator that is now charging the city for that administration. He said over that ten year period of time, there have been a number of changes in the various programs that makes some things advantageous now 1 1 CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 305 over the others. He said in 1980, when Kansas City was elected by the employees and approved by Council, TMRS was a very close second. He said the difference between then and now was a 20 year vesting schedule, which was a requirement of TMRS. He said 10 years is visionary as one can see that one can make it ten years. Councilmember Bell said he is concerned about "cash surrender," noting it has been a major problem in his particular retirement program and he asked if the city employees had expressed any particular reservation about not having cash surrender. Mr. Bounds said there are a couple of employees who would still like a lump sum distribution. Mr. Pipes said another question raised was "If one contributes the same rate at the same interest without inflationary factoring, etc., and one stays with the city 25 years and is in an 1CMA, a 401 plan and TMRS; under TMRS one is going to take a guaranteed annuity distribution of the funds; ICMA is a lump sum distribution; and if both equal $250,000, one could invest that $250,000 lump sum into a standard interest bearing account and live off the interest and have $24,000 to $25,000 a year interest income as retirement, and as one passes on, his estate has basically to deal with the principal. He said the question is would the ICMA retirement guarantee the same distribution of X amount of dollars, and are they going to have the same $2,000 a month under that same scenario as the arxxwity7 Mr. Anderson said all of the annuity options are "life" to the retiree and the difference is how much is guaranteed to the beneficiary. Councilmember Hammock noted this is all determined using the actuarial tables. There being no further questions. Mayor Monday then closed the discussions and moved to the next agenda item CONSIDER RESOLUTION Consider Resolution No. 89-5 authorizing applications for a Criminal Justice Division Grant for a "Property Crime Task Force." in the amount of $75.371 Mr. Gene Pipes, City Manager, presented this Resolution, the caption of which is as follows: RESOLUTION No. 89 -5 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTSVILLE, TEXAS, AUTHORIZING APPLICATION FOR A CRIMINAL JUSTICE DIVISION GRANT; AUTHORIZING EXECUTION OF GRANT AGREEMENT; MAKING VARIOUS PROVISIONS RELATED THERETO. Mr. Pipes said the local match is approximately $5,000 [rather than $1,200 as indicated by the resolution in the packet], in terms of in -kind service or cash contribution, however, while that contribution is a little bit higher than the two grant applications of last week, and we do have some additional incidental costs (uniforms, etc.), what this grant will provide is a uniformed officer for the Police Departments Security Division working the property crime detail. Mr. Pipes said this amount will have to be budgeted in next years budget as it is not budgeted this year. Councilmember Howard made the motion to adopt Resolution No 89 -5 and Councilmember Gaines seconded the motion. All were in favor and the motion passed unanimously. CONSIDER BID Consider Bid No. 89 -22 for an Air Compressor and Auto Hose Reels for the Garage to Myers Tire Supply in the amount of $8.462.90. as budgeted in the Service Center Improvement Proiect Mr. Pipes presented this request, noting it is the city's intent to purchase two air compressors, eight 3/8" auto hose reels, and two two and one -half inch auto hose reels. He said it is the Purchasing Agent's recommendation to accept the lowest bid meeting specifications which is Myers Tire Supply. He noted of the six bids received, only three met specifications. Mr. Pipes advised $8,400 is available for these purchases. The Council was advised the low bid is only $62.90 over the staff's estimate and funds are available to cover the overage in that account. He then recommended Myers Tire Supply's bid for approval. Councilmember Barrett made the motion to approve of this bid as presented and Councilmember Bell seconded the motion. All were in favor and the motion Passed unanimously. CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 306 CONSIDER SHARING LEGAL COSTS REGARDING GSU'S RATE REQUEST Consider participation on a Pro-rata Dopulation -cost basis with other cities in the GSU service area in Texas to retain specialized legal counsel, expert rate analyses, and technical review of the filings of March 21. 1989, as recommended by the joint cities steering committee Mr. Gene Pipes, City Manager, advised he and the Mayor traveled to Cleveland last Wednesday morning to participate in a meeting with the other cities in Southeast Texas in the Gulf States service region to discuss participation in a GSU cost reconciliation study. Mr. Pipes advised the task the cities are faced with is to review GSU's rate request. He said the study wilt attempt to explain why GSU's expenditures increased above the 1979 definitive River Bend cost estimate and resulted in the Commission's action of placing $1.4 billion of the plant cost in abeyance. He said GSU's rate request involves some 245 to 265 volumes of analyses and workpapers. He said Mr. Harry Wright, City Attorney of Port Neches, Mayor Carl Barton of the City of Conroe and Mr. Bill B. Story, City Manager of Bridge City, were appointed to a Steering Committee. This committee made the recommendation that the firms of Butler & Casstevens, as legal counsel; Diversified Utility Consultants, expert rate analysts; and Technical Analysis Corporation (11TAC11), technical review specialists; be retained as the three consultants. He said the basis for this particular project is that none of the cities feel they have the staff available to make a proper review of the rate request filing. He said by consolidating the cities' efforts, we can reduce our costs and review the information to derive the necessary information to make an intelligent decision on the rate case proposed by Gulf States Utilities. He said it is expected this study will require some time, however, the 90 days suspension [next item on the agenda] should allow sufficient time. He requested the Council's consideration in participating in a pro -rata population -cost basis in these studies and legal representation and approval of the appointments of the experts in the various fields. Mayor Monday noted representatives from 25 cities were at the Cleveland meeting, including city attorneys, elected officials and city managers and those not in attendance sent notices that they will participate. She said major cities in the area and all population sizes were represented. She said the entire group feels it is a good idea to combine efforts to obtain good information and work with the same consultants. Councilmember Carter made the motion to approve the joint Participation on a pro -rata Population -cost basis in the GSU rate analysis and Councilmember Bell seconded the motion Discussion: Councilmember Barrett asked how much money this might involve. Mr. Pipes said he has no dollar figure as yet, but the cities of Beaumont, Port Arthur and Orange will carry the lion's share of the costs. Mayor Monday said this is money that will be reimbursed to us by the Public Utility Commission from Gulf States Utilities. Mr. Pipes said the expenditure of these funds, therefore, is only a temporary obligation. Councilmember Barrett noted then the city will get its expenditure back no matter what happens. Mr. Pipes said that is correct. Mayor Monday said another item to be discussed with the PUC is a pay back on a monthly basis as opposed to waiting until the very end for a pay back. She said the last time this occurred, the cities that participated had to wait a long time to get their money back and this sometimes becomes difficult for the smaller cities. A timely refund back to the cities will be a point that is negotiated this time by these consultants, Mayor Monday noted. She did not anticipate that the total expenditure for the City would be very great. Councilmember Hammock asked if this study would in any way be a duplication of the studies the PUC automatically commissions. Mr. Pipes said the Company has to do a test year study as part of the justification of their rates. Obviously, he said, there is no one monitoring the company while that particular work is being done and they hire the consultants to do the best they can for the company. He said the PUC staff is obligated to examine that filing and make a determination. He said that is what these consultants will be doing for the cities. He said the PUC staff is extremely limited and has a number of rate cases pending, so their examination of the case is not necessarily in a timely manner for the cities rl 1 CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P° 307 to respond to the rate case. He said we can suspend the rate case for a period of time, but if we can't get it done in that period of time, and if the PUC doesn't complete its work, then the only option of the cities is to pass it on up to the PUC. He said this is a part of the process to retain original jurisdiction by the home rule cities. He said ultimately the PUC sets the rates uniformly for the entire service region, but there is some question as to whether the PUC staff can respond in an adequate fashion and whether the cities ought to ever give up their authority of original jurisdiction on matters of rate cases pending before them in their local communities. Councilmember Hammock said the ratepayers ultimately pay for all these consultants that are doing all of these numerous studies. Mayor Monday said this is the reason these cities are consolidating that effort to reduce the number of consultants working on the analysis. Councilmember Hammock noted again his concern that this study may be a duplication of that being done by the PUC. Mr. Pipes advised many times these outside studies compliment and supplement the studies done by the PUC as they just do not have the staff to do more indepth studies. Alt were in favor of the motion on the floor and it passed unanimously. CONSIDER ORDINANCE Consider Ordinance No 89 -9 suspending the proposed rate request by Gulf States Utilities for a period of 90 days to allow for adequate study of the filing The City Manager, Gene Pipes, presented this ordinance, the caption of which is as follows: ORDINANCE NO. 89 -9 AN ORDINANCE OF THE CITY OF HUNTSVILLE, TEXAS, SUSPENDING THE OPERATION OF PROPOSED RATE SCHEDULES FILED BY GULF STATES UTILITIES COMPANY FOR A PERIOD OF NINETY (90) DAYS BEYOND THE DATE ON WHICH SUCH SCHEDULES WOULD OTHERWISE GO INTO EFFECT Mr. Pipes advised the operation of the proposed rate schedules of GSU filed with the City on March 21, 1989 will hereby be suspended for a period of 90 days from the effective date stated in GSU's Statement of Intent, as initially filed or hereafter revised, for further study, investigation, presentation of evidence and public hearing. He recommended adoption of this ordinance. Councilmember Carter made the motion to adopt Ordinance No 89 -9 as presented and Councilmember Howard seconded the motion. All were in favor and the motion passed unanimously. CITY MANAGER'S REPORT - -GENE PIPES Supplemental Items Consider ordinance No 89 -10 designating the Director of Finance as the official Tax Assessor /Collector for the City Mr. Gene Pipes presented this ordinance, the caption of which is as follows: ORDINANCE NO. 89 -10 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF HUNTSVILLE, TEXAS, DESIGNATING THE DIRECTOR OF FINANCE AS TAX ASSESSOR - COLLECTOR, AND MAKING OTHER FINDINGS AND PROVISIONS RELATED THERETO Mr. Pipes advised due to the resignation Ms. Barbara Shelly, Tax Assessor - Collector, during the last few weeks, the Council is now requested to designate the Director of Finance, Ms. Patricia Allen, as the Tax Assessor - Collector so that we can have some time to evaluate that particular job function. The Council was advised of a proposal made to the City last fall by the Central Appraisal District to consolidate collections into one office. He said at that time the City could not justify that because the cost of that movement to the Appraisal District was higher than what we were committed to in salaries and support and the city had tremendous response and success in having a very good collection rate, reports, etc., so the CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 308 city did not exercise that option at that time. He said certainly this particular action will grant the city the grace period to consider all of the options available to the city. He said we do need the official designation of a Tax Assessor - Collector and this ordinance will authorize that particular action. Councilmember Knotts made the motion to adopt this ordinance as presented and Councilmember Green seconded the motion. Discussion: Councilmember Barrett asked if the city has visited with the Central Appraisal District lately about this consolidation. Mr. Pipes said they have received some additional information from them recently which will be analyzed and brought back to the Council in subsequent meetings; this should be ready certainly by the fall of this year. Mr. Pipes said it is felt the Legislature will mandate such consolidation in the next couple of years. All were in favor of the motion on the floor and the motion passed unanimously. Consider the mid -year budget adjustments previously discussed Mr. Pipes presented the budget adjustments discussed last week in the work session, but deleted from consideration for approval this week, the administrative staff positions (assistant city manager; library position, secretarial position related to the HUD grant) and the retirement issue consideration. He said the adjustments for the General Fund total $153.152 of the $258,936 in funds carried forward in the general fund, with $105,784 being transferred to reserve for future allocation and /or for additional decision packages including additional employees, employee reinstatements and retirement funding. The General Fund items requested for approval include the reinstatement of merit for the remainder of the year; cost of city picnic; replacement of fuel pumps; postage underbudgeted; teacher /coordinator pay; overtime underbudgeted; repairs to A.C. at city hall; small garage tools; electrical repairs at ballpark and two additional police officers; copier for city hall; A.T. computers for Street and Public Works; digitizer and plotter for Planning; a fax machine and the general fund's portion of Design Engineering's computer software and hardware. Also requested for approval was basic software for a Hewlett Packard computer and an upgrade board for the computer for the Design Engineering Department -- funding to be 67% Water /Sewer; 3% Sanitation; and 30% General Fund, for a total expenditure of $6,515. In the Water and Sewer fund, items requested for approval include merit raise reinstatement; rate study for Water and Sewer; replacement roofs for two sewer plants; utility billing system; copier for Service Center; brush stacking rake for 450 case dozer, Water and Sewer portion of Design Engineering requests for a total expenditure of $82,795; with $573,477 being transferred to CIP fund,. In the Sanitation fund, the Council was asked to approve merit raise reinstatement; a rate study; a 6 inch pump and hose; a container rotating hoist for a two ton truck; Sanitation portion of Design Engineering requests for a total expenditure of $29,727; with $237,228 being transferred to CIP fund. Councilmember Knotts made the motion to approve of these budget adiustments as Presented and Councilmember Howard seconded the motion. Discussion: Councilmember Carter asked what the General Fund balance available will be for the Council to consider for other items. Mayor Monday said the amount left is $105,784, added to a present balance of about $60,000 for a total of about $165,784 for decision packages or to finish the fiscal year. Councilmember Carter noted then we are tabling consideration tonight for the library personnel. Mr. Pipes said that is correct. Councilmember Carter asked for a date when these other decisions will be made. Mr. Pipes proposed that these items be set for consideration in approximately two weeks to allow for more review in order to come up with alternatives and options concerning additional personnel. Councilmember Carter also noted he is still concerned about how much support there might be for a social worker [for the Watkins -Clark Housing Subdivision] and didn't want that idea to get lost in the shuffle. He asked that that question be brought back along with the other personnel considerations. Councilmember Knotts asked, concerning right -of -way clean up, that Mr. Boyd Wilder, Director of Public 1 1 CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 309 Utilities, determine the approximate area about which we should be concerned for maintenance, so that funds can be budgeted next year. Mr. Wilder agreed to provide that information. Mayor Monday noted by this action, we did authorize two additional police officers and last week we did authorize application for two grants and another one this evening. She said the City has made some very solid commitments to the Police Department to give them the support they need to face the problems on the street. All were in favor and the motion Dessed unanimously. Consider an agreement for purchase and installation of utility billing software Mr. Pipes said this software was just approved in the midyear budget adjustments considered in the previous action. He said with the Council's concurrence, the city can get the software and expedite hardware acquisition so that the city can move ahead on the utility billing project, which is extremety time sensitive. He then presented this agreement between the City and Ad Valorem Records, Inc. (AVR) for the purchase and installation of utility billing software and the related training and network software installation. The contract provides that the software costs $5,800, plus $1,000 for the initialization and training, and approximately another $2,171 for various computer equipment and installation costs; an annual support contract is available for $500.00 per year, or support can be obtained at $50.00 a hour. Councilmember Bell made the motion to approve of this contract as Presented and Councilmember Howard seconded the motion. Discussion: Councilmember Barrett asked if we had taken any bids on this. Mr. Pipes said we really cannot take bids on the software as it is a proprietary property of the author, but the city did get bids on all of the hardware. All were in favor and the motion passed unanimously. Sales Tax Report Mr. Gene Pipes, City Manager, advised the City sales tax report is down slightly for the month of April, which is the February reporting period, by the amount of $2,000 in a $124,000 monthly payment, compared to last year this time. He said this is a 7.88 percent increase, but this is down roughly 1 1/2 to 2 percent over the prior year. He said we have a slight dip in the otherwise steadily upward climbing trend for the sales tax. He said the City is still very healthy for the year. Youth Baseball Request to Raise Sideline Fences Mr. Pipes advised Mr. Tommy Martin, President of the Huntsville Youth Baseball Association, has requested permission to raise the sideline fences on field numbers two and three to an eight foot height so that there can be an area of additional safety where the teams preparing to play can warm up. He said these foul line fences are just four feet tall and if there is a tine drive on the side and these kids are out there playing catch, they can catch a line drive and not even expect it coming. He said this $3,000 expense will be borne by the Youth League Association as supervised by the City. He noted this will be a capital improvement to the facility and therefore he is bringing this request to the Council for their information. Council Meeting Schedule Gene Pipes, City Manager, advised the April 18 Council Meeting will not be held due to the East Texas Folk Festival preparations. The next meeting will be April 25, 1989. Organizational Chart Mr. Pipes then presented the City's organizational chart and discussed how it functions as currently established. He said while he has not had time to refine any amendments, options or alternatives to the chart, he will be working towards some recommendation in that regard to perhaps shift or alleviate some of the work load where the need may exist. Mr. Pipes asked that these considerations be deferred a couple of weeks along with the other personnel considerations (library worker, social worker, etc.). He said we CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 310 should hear formally about the HUD grant by then as to whether we are going to have to administer that one half million dollars in federal funds. MAYOR'S ACTIVITY REPORT - -JANE MONDAY Consider a reappointment to the Parks Advisory Board Mayor Monday presented the name of Dr. Laverne Warner for reappointment to the Parks Advisory Board for another full term. Councilmember Gaines made the motion to approve of this reappointment and Councilmember Knotts seconded the motion. All were in favor and the motion Passed unanimously. Tax Exemption for State Employees of Hotel -Motel Occupancy Taxes Mayor Monday advised a question came up at a recent meeting at the Chamber of Commerce concerning ,whether or not any state employee should be exempted from any part of the hotel -motel tax and what is the city's position on this. She said the local hotels need a clarification from the city on this question and she would like for the City Attorney to respond to them in writing tomorrow. Mr. Bounds advised in January he wrote to the local motels and provided them with a copy of an attorney general's opinion dated October 26, 1988 which stated state officials and employees traveling at state expense on state business are not exempt from hotel -motel occupancy tax provided for in Chapters 156, 359, and 352 of the tax code. He said he indicated in the letter that General Mattox had determined that state officials and employees are not exempt from the hotel -motel occupancy tax. He said he went on to point out that, according to General Mattox, the City is without authority to grant such an exemption for government officials. Therefore, he said, it was his understanding by his letter that the hotel -motel tax should be collected for all state agency employees, local municipal agencies as well as county agency employees, when they are staying in a hotel or motel. He said if there is still some doubt about this, he will write another letter with just that statement to the effect that they are to collect these taxes. Mayor Monday advised that Mr. Bob Bullock, State Comptroller, has issued another opinion and there are some cities that have evidently had ordinances with exemptions and they are now doing that, so there is some disagreement. Councilmember Green said the confusion perhaps arises because there is a state tax as well as a local tax within the hotel -motel tax and it is his understanding the state employees must pay the Local municipal tax, but not the state tax. Mr. Bounds said according to General Mattox, governmental employees should pay the local part of the tax. Councilmember Green said unless a state employee has a "Tax Exemption Form" with him he will have to Day the state Portion of the tax but there is no exemption from paving the "local" [city] hotel -motel occupancy tax Mayor Monday asked Mr. Bounds to make sure this distinction is clarified and that the local hotel -motel owners are made aware in writing (Prison Unit Request for Proposals- -Task Force Reassembling Mayor Monday advised the task force is going to be reactivated to look at developing a bid in preparation for a Request for Proposals (RFP) for a new prison unit. She wanted the Council to be aware she will be meeting with this group and as soon as any particulars are developed, she will get back with the Council. (Meeting with Local Banks Concerning Real Estate Holdings Mayor Monday told the Council that she participated in a meeting with the representatives of local banks, noting the representatives of savings and loans were invited to attend, but there were no participants from those establishments at this particular meeting. The meeting was called to discuss the situation that now exists with the local banks in that they are all holding a great deal of real estate and since they have not normally been in the "real estate business," she thought it might be appropriate to visit with them about some of the changes that occur when real estate is resold. She said she is concerned from the city's standpoint as its codes and ordinances might affect that resale. She said she wanted the L� CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 311 bank officials to be aware of any particular rules that may come into effect concerning, for instance, a "change of use" of a particular piece of real estate. She said it was a very good luncheon meeting and the bank representatives were appreciative of having the opportunity for the interchange and it was a very positive move on the part of the city. Solid Waste Meeting Set Mayor Monday notified the Council that an informal solid waste steering committee meeting will be held tomorrow at 2:00 P.M. She asked the council representatives to that committee to check their schedules to insure they can be at that meeting. Green Forest Water Utility Association Mayor Monday told the Council she welcomed the Green Forest Water Utility Association in Huntsville Last evening at Casa Tomas, which consists of representatives of a number of utility districts in this area involving approximately 100 people. Opening of baseball Season The Council was advised that last weekend Mayor Monday joined Councilmember Green to participate in the grand opening of the baseball season. She said they talked to the youth league officials about the ten year plan and about the things the City is hoping to do at the ballpark in association with the group in a private-public effort. She said the league officials are a very positive group and they are doing a very fine job at the ballpark. Haas /Williams Architect /Artist Consultants - -Presentation of the Downtown Plan Mayor Monday noted some of the Council participated in a breakfast meeting at the HEAP building to hear the presentation from Mr. Richard Haas concerning the proposed downtown plan. She said the city will be receiving comments and opinions from the council and the public in general concerning how they like the plan. She said the feedback she has had is extremely positive. She commended the members of the Arts Commission for what they have done to bring such a quality program to the city. New Plane Design May have Impact on Small City Airports Mayor Monday shared with the Council information she obtained from the speaker at the recent award's Luncheon meeting in Austin. She said the speaker was the Chancellor of the University of Texas, Dr. Hans Mark, who is an aeronautical engineer. He spoke about the future of aeronautics and where he thought it was heading, she said. The Mayor reported he brought a model of a plane, and said 1,000 models of it are now being produced by Bell in Fort Worth with 700 going to the Marines and 300 to be divided between the Army and the Air Force, so that hours can be flow on this particular model before it is set for commercial use. The plane, she said, takes off like a helicopter with propellers and then the propellers come down and the plane flies forward like an airplane. She said Mr. Mark's prediction is that by the year 2000, the majority of all air travel in the United States, under 500 miles, will be done with this plane. She said the implication of this for the City of Huntsville is that it will only take a parking lot to land this plane. She said cities like Huntsville will likely play a much larger role in air travel in the future. She said this particular plane was flown the Monday after Easter. Preparation for East Texas Folk Festival Mayor Monday indicated she assumes the Public Works Department is making preparations for all the company Huntsville will have the weekend of April 21 -23 for the Festival by way of general freshening up of the City by mowing, trimming and cleaning. CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 312 Mayor Monday shared with the Council an interesting perspective she received at the Tourism Meeting this morning. She said they talked about what has happened and what is going to happen in the next five weeks with visitors to our area. She said last week we had the Walker County Fair and an estimated 50,000 people attended - -the best fair by far Walker County has ever had. This weekend, there will be an East Texas Choral Community Group, which will be bringing in groups from all over including some 950 children to participate in that competition, she said. Next weekend is the East Texas Folk Festival and the following weekend we will be hosting the Southland Conference Spring Festival with 600 athletes plus support people for an estimated total of 700 people, plus parents and grandparents who will be coming to watch that particular event, she reported. She said the local hotels and motels are already all sold out. The Mayor reported the next weekend will be SHSU's graduation. She said this will give the Council some perspective of what will be happening in Huntsville for the next five weeks. She said it is a great opportunity for Huntsville to look good and show our style and hospitality. Mayor Monday advised Ms. Toni Bruner has been selected as one of the regional coordinators for the Texas Department of Commerce's hospitality training program at Texas A &M University for this region. She said therefore Huntsville will be a part of this tourism program. Mayor Monday asked Mr. Gene Pipes, City Manager [aka "Pleasant Gray" for the purpose of the East Texas Folk Festival skit], to sing one chorus line from the "Gone to Texas" play to be presented at the Festival. Mr. Pipes so entertained the Council by singing the following lines: "Gone to Texas, Gone to Texas, to start a new life, with my family and my livestock and my old bowie knife. They'll give me a League and a labor of land beneath the pines and the post oak in the red clay and sand." Mayor Monday noted this play will be presented at 1:00 P.M. on Friday; as well as on Saturday and Sunday. She said U. S. Senator Phil Gramm will be here on Friday to enjoy the 1:00 P.M. performance with the many school children that will also be in attendance. COUNCIL ACTION Councilmember Knotts commended City Engineer, Glenn Isbell, on the effectiveness of the city's environmental utility line policy, noting no problems developed on 10th street in the section where the city had to remove some trees. Mr. Boyd Wilder, Director of Public Utilities, advised the city received compliments from the renters in the house there germane to the way it looked when the city took down the large Sycamore tree. Councilmember Bell requested that the signalization of Sam Houston Avenue be checked for the sible need for resynchronizing. Mr. Poteete advised the speed limit is set at 35 mph, which should allow motorist to avoid the red lights if that speed can be maintained. Mr. Pipes, City Manager, said one of controllers has been involved in a traffic accident and it may need to be re -set. Mr. Poteete, Director Public Works, said a master controller may have a bad relay in it and that can also be checked, however, said he tested them today and they do seem to be synchronized at 35 mph. C] 1 CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 313 Parking Situation Around Square Councitmember Bell inquired as to what the city is going to do about the parking situation around the square, noting some weeks ago several downtown merchants came to the Council to request its assistance. Mr. Pipes advised the City has continued unscheduled enforcement. He said the courthouse employees have been availing themselves to off the square parking a great deal more. He said the contact the city has made with the private property owners who have off - street parking is progressing and the staff is coordinating a program that it will bring back to the Council for formal approval in which the private property owners will be paying for the materials Easphalt and cost of stripping]. The city then by contract with them will obtain the public's use of those lots on the north and west sides of the square with the city's asphalt laydown efforts and stripping work to maximize the space for parking. Mr. Pipes said several memorandums within the County Courthouse have been circulated by different departments heads, who are responsible for their own employees, so there are some very strong directives out at the present time within the Courthouse concerning the need to park off of the downtown square. Avenue 0 Weedeating Councilmember Carter advised of a call he received expressing concern for the city cleaning and weedeating an area along Avenue 0 which area the caller felt was clearly private property. Councilmember Carter said he explained to them that sidewalks, curbs and gutters were not private property. Mr. Pipes said this is perhaps the city's Greenspace Committee that the Council created and they have started work. Mr. Pipes said the city has been working diligently and deliberately on Avenue 0 to prepare for the East Texas Folk Festival. He said since the city finished the street construction work there last year, a number of the residents have not resumed caring for the space between the sidewalk and the curb, which is all city right -of -way. He said the city does not wish to imply that it will be perpetually maintaining that, but it is concerned that its best image be presented for the Festival weekend visitors. He said the "Weedeater Brigade" will stay on street right -of -way and public thoroughfare right -of -way and will concentrate on the major entrances to the Folk Festival site and downtown. Mr. Poteete, Director of Public Works, said the city has a mowing crew that regularly mows rights -of -way throughout the city. Environmental Utility Line Policy and Trees Councilmember Carter noted while he too appreciates the City's "Environmental Utility Line Policy," those who drafted it and those who contact owners involved in a utility line preparation area as well as what the city has recently done concerning trees on 10th Street as they are involved in this policy, and he is not so much concerned with property values as are his colleagues on the Council, but he would like for the City Council, if it is not already doing it, to pay attention to the literature that is being presented about trees, their involvement in the greenhouse effect, our climate, and what problems we face with the removal of trees. He said Los Angeles plans to plant two million trees over the next several years. He said it seems very foolish to him that in a world in which this is a crucial issue, that we are removing almost any trees. He said if we look at what other cities in this country are doing and across the world, we will find they are going out of their way, not only not to remove trees, but to replace trees that they might have lost over time. He urged the Council to pay attention to this as an issue. Tax Abatement Committee Report Councilmember Howard advised at the last meeting of the Tax Abatement Committee, they gave a report which emphasized the city's willingness to work with the other entities to try to develop an organized policy. He said he and Councilmember Bell met with other representatives of the taxing authorities at the Chamber of Commerce and a proposed policy has now been drafted. He said in order to move ahead, a meeting of the Council, school board, and the county commissioners should be set. He suggested the meeting be set at 5:30 P.M. on Tuesday, April 18 at City Hall. Councilmember Bell said the document presented this evening is fairly self - explanatory. He said there was a consensus in the group that this is a useful and CITY COUNCIL MEETING MINUTES OF APRIL 11, 1989 BOOK "P" 314 appropriate set of guidelines. He said one thing with which they are having trouble is in trying to coordinate the three entities. He said it was felt it would be most efficient if all entities just got together to talk about any problems that are envisioned. He asked that the Council review their schedules to insure they can attend this meeting at 5:30 P.M. next Tuesday. Councilmember Carter asked about the timing of the meeting noting the school board election is May 6 and there may be a change in the elected officials. Councilmember Bell noted the currently elected officials will be asked to the meeting. Councilmember Carter felt however that the school board candidates should have the opportunity to sit in on the meeting. Councilmember Bell asked that the meeting be confined to a meeting of elected public officials and that we not draw the public into a general public session at this time. Trash Assistance - -East Texas Folk Festival Councilmember Barrett asked that the city assist with additional trash receptacles in the area of the Festival, noting last year there just were not enough containers. Mr. Poteete, Director of Public Works, advised Sam Houston State University is in charge of sanitation and the clean -up, although the city has offered to help. Tourism Committee Mayor Monday asked that the Tourism Committee of the Council remain for a short meeting after the Council Meeting. Reception -- Prison Museum on Saturday, April 8. from 4:00 P.M. until 6.00 P.M. Mayor Monday advised of the reception at the Prison Museum on Saturday and noted the Museum will officially open on Thursday, April 13 at 12:30 P.M. GSU's Budget and Home Energy Manaaement Course Endorsement Mayor Monday advised she did write a letter to the Governor's office endorsing GSU's Budget and Home Energy Management Course which will be piloted in Huntsville to basically help people who are having difficulty managing their utility bills. Ice House Shootina Mayor Monday noted she too has received phone calls concerning the incident at the Ice House at 16th Street and Avenue 0. She asked that the City Manager and City Attorney check into this and bring back a report to the Council. ADJOURNMENT Respectfully Submitted, 6RU DeShaw, City Secretary April 11, 1989