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HomeMy WebLinkAbout06/28/1982 City Council 001198 MINUTES OF THE CITY COUNCIL OF THE CITY OF THE COLONY HELD ON JUNE 28, 1982 A REGULAR SESSION of ~he City Council of the City of The Colony, Texas, was called to order at 7:30 p.m. at the CATV Building, with the following members present: Gene Pollard Mayor Scott North Councilman Larry Sample Councilman Norman Adeler Councilman Charlie Parker Councilman Charles Dodds Councilman Marlene Poole Councilman and with no members absent, a quorum was established. 1. APPROVAL OF MINUTES Councilman Parker moved to approve the minutes of the June 14th meeting. Seconded by Councilman Dodds, the motion was passed by the following roll call vote: Ayes: All members present voted aye Noes: None 2. CITIZEN INPUT Mayor Pollard asked if any citizens had input to the Council at this time. There was none. 3. RECEIVE CITY MANAGER'S STATUS REPORT Mr. Savage advised the Council that Southwestern Bell had filed with the Public Utility Commission for a rate increase. He stated that we had contacted the Texas Municipal League, and we have been advised that it is their intention to intervene in this case on behalf of member cities. He stated that he would give them further information as it was presented. He advised the Council that this Wednesday at 8:30 a.m. the Region V Health Services Agency would conduct a Public Hearing on the application of Universal Health Systems. He invited the Council to attend this hearing in support of a hospital in the city. He stated that the Certificate of Occupancy inspections did begin today on homes that have changed ownership or tenant. He stated that four inspections had been made. He advised the Council that the Planning and Zoning Commission did meet and elected Bob Fiumara as Chairman and Jay McBride as Vice Chairman. He reminded the Council that at 7:00 p.m. at CATV on June 30th the first Budget Town Hall meeting will be conducted. At this meeting, Parks and Recreation, Library and Community Development Departments will present their proposed budgets. He stated that the cable TV company has stated that they are completely installed in "the original town". Councilman Sample noted that there are areas on his street, which is Pearce, that still cannot get service. 0Uii99 He did advise the Council that in accordance with the revenue sharing procedures, it will be necessary for the City Manager or the Council to conduct a Public Hearing on July 8th. This can be conducted at the City Manager's office during the day. Councilman Poole suggested that it be held at the Town Hall meeting to be conducted that evening, July 8th. The Council concurred with this suggestion, and it was so noted that the Revenue Sharing Hearing will be published for July 8th at CATV in conjunction with the Town Hall meeting. Councilman Parker wanted to know the status of the Stewarts Creek Park. Mr. Savage advised that it did look like there would be no use of the park this summer by the city. Councilman Parker stated that he was personally concerned that the Texas Municipal League was made aware of our concerns in the Southwestern Bell rate increase. He was advised that a meeting would be held of cities on July 8th, and that he could attend that meeting. Councilman Sample stated that he was still concerned about where our financial investments are being placed. He would like a financial analysis of the banks and savings & loan institu- tions where the city is placing their money as an investment. He further explained that if this particular institution did fold, the city's money would then be tied up, and this could result in a sizable loss in interest as well as the actual use of the money. There followed a discussion regarding the advisability of investing in savings & loans at this time. Councilman Adeler stated that he was not concerned with the financial solvency of savings and loans. Mr. Savage did advise the Council that he would develop a report for the next meeting on investment guidelines. Mayor Pollard added that he would like him to also review the exposure that the city has had in the past six months regarding having more than $100,000 invested at any one institution. 4. PUBLIC HEARING REGARDING THE ANNEXATION OF 11.058 ACRES OF LAND LOCATED WEST OF FM 423 GENERALLY AT THE INTERSEC- TION WITH NASH DRIVE UPON PETITION BY FOX & JACOBS, INC. Councilman Dodds moved that the Hearing be opened. Seconded by Councilman Parker, the motion was passed by the following vote: Ayes: All members present voted aye Noes: None Mr, Savage advised the Council that Fox and Jacobs did own an 11.058 acre tract of land located west of FM 423 across from Nash Drive, which through an oversight has never been annexed into the city limits. He stated that Mr. Tom Cravens of Fox and Jacobs has submitted a petition formally requesting that this property be annexed into the city. He stated that the land in question fronts on FM 423 and that the property to the south of this area is zoned for multi-family use and the land to the north of this area is zoned for single-family use. He stated that the city would have no difficulty in providing municipal services. Frie protection and police patrol are currently being provided to the area, however, there are no developed streets or parks on this property. He said that if the area is developed for single-family or duplex housing, Texas Waste Management will provide sanitation services to the area. Further municipal services will be provided when the area is developed. Mayor Pollard then asked for any comments for or against this annexation. There were none. Councilman North moved to close the Hearing. Seconded by Councilman Adeler, the motion was passed by the following vote: Ayes: Ail members present voted aye Noes: None -2- 001200 5. CONSIDERATION OF COMMENDATION FOR THE COLONY GOALS COMMITTEE Mayor Pollard read aloud the following form to be used for commen- dation. CITY OF THE COLONY In Appreciation The City Council of the City of The Colony desires to convey to you an expression of its commendation and grateful acknowledge- ment for the valued services rendered by you in the public interest as a member of The Colony Goals Committee The Mayor and Members of the Council sincerely appreciate the worthwhile contribution that you have made toward the communal and the material development of the City of The Colony. Signed and sealed on behalf of the Council of the City of The Colony this day of , 1982. /s/ GENE POLLARD, MAYOR ATTEST: /s/ JANICE CARROLL, CITY SECRETARY The Council agreed that they would like this commendation to be sent to each member of The Colony Goals Committee in appreciation of their work in setting the city's goals. Councilman North so moved that this be presented to each member of the Goals Committee. Seconded by Councilman Dodds, the motion was passed by the following roll call vote: Ayes: Ail members present voted aye Noes: None 6. RECEIVE REPORT ON MORTGAGE REVENUE BONDS Mr. Savage introduced Dan Almon of Rauscher Pierce Refsnes, Inc. Mr. Almon stated that his purpose here this evening was to generally acquaint the Council with the purpose of mortgage revenue bonds. Mr. Almon stated that from 1978 to 1980, the use of tax-exempt mortgage bonds for housing grew substantially, however, during that period the purpose of these bonds was abused. Certain issues did allow high-income families to purchase expensive condominiums under this plan. In 1980, Congress passed the Mortgage Subsidy Bond Tax Act which mandated three important changes. They were (1) Limiting the amount of mortgage bonds that can be sold in states within one year, (2) limiting purchasers to first-time home buyers, (3) limiting the differential between interest rate on the bond and the mortgage interest rate charged the homeowner to 1%. Mr. Almon added that the last item, in effect, limits the amount of expenses that can be involved in the program. To implement this program, Mr. Almon explained, the issuer would sell tax-exempt bonds the proceeds of which would be placed in trust with the bank and held until partici- pating lenders originate the mortgage loan. The mortgage loans would be originated under pre-determined guidelines and sold to the trustee acting on behalf of the issuer, the participating lender would then service the loans. He explained that the cash flow from the mortgage loan payments are anticipated to be received in sufficient time to pay principal and interest on the bonds when due. Consequently, the term of the mortgage loans and the term of the bonds will be approximately equal, and the mortgage loans will become the primary security for the bonds. In a mortgage-loan program of this type, Mr. Almon stated that the first concern is the cost or the mortgage rate that the home buyer will have to pay and, in the current high interest rate market, long-term bonds would make most housing programs unfeasible. Therefore, to counteract this condition a new concept in mortgage loans known as growing equity mortgage (GEM) has been developed to incorporate a shorter repayment period, that is 15 years rather than the traditional 30 years. -3- 001201 Mr. Almon further explained that the shorter term bond issue lowers the interest rate on the bonds and, therefore, the rate on the mortgage loans would be correspondingly decreased. Based on current interest rates, he stated that it would be possible to finance mortgage loans with an interest rate between 12 3/4% and 13%. At this time, at the Council's request, Mr. Almon told them of the situation now working with Dallas County and why they have not approved this program as of this date. In further discussion, he advised the Council that a $20 million issuance would be the maximum that The Colony could sell at this time. He explained also that this is very similar to the Denton County program, and it is obvious that The Colony is not getting their share of those mortgage loans. He felt that it is a logical recommendation to form our own mortgage revenue bond program. He assured the Council that there is no liability to the city in a program such as this. He stated the security for the bonds is the person paying the mortgage and that the collateral for the bonds is the house itself. Mayor Pollard asked what could possibly be the negative aspects of an early entry program like this. Mr. Almon stated that it does take a lot of work to set this program up and get it going, and it would be possible that a loan would never be consummated. Coun- cilman Sample asked who would absorb the expense of setting up this program. Mr. Almon answered that the underwriters and the bond attorneys would absorb this. Mayor Pollard thanked Mr. Almon for presenting this program to the Council and told him that they would take it under advisement at a future date. 7. RECEIVE FLOOD INSURANCE REPORT Mr. Dan Savage introduced Ron Hunka with the Department of Public Safety and Wayne Boggs to present the program to the Council. Mr. Hunka gave a slide presentation showing how the program works in cities that are plagued by flooding. The example used was the Memorial Day flood of 1981 in Austin, Texas. Mayor Pollard could not see the need for the city to enter the emergency program first prior to entering the regular program. Mr. Boggs stated that it is a federal regulation that the programs be entered into in these steps and that, based on these steps, knowledge of flood conditions and information on the community will be gathered before permanent rates are set on an actuarial basis. He explained that the emergency plan rates are the same for everyone. Councilman Dodds asked if there would be any cost to the city. Mr. Hunka explained that there is no cost to the city. After the ordinance is adopted by the city allowing people to acquire flood insurance, the federal emergency management agency administers the program. They did explain that the Depart- ment of Public Safety is the state coordinator on this federal program. He stated that a resolution of intent as well as the ordinance setting out all FEMA standards must be passed by the Council. Mr. Hunka did emphasize that once the ordinance is passed, it must be enforced on a very consistent basis and that the city is liable only if the ordinance is not enforced properly. Mayor Pollard stated that The Colony is a well-planned community, and there are no areas that were built in flood plains. Mr. Hunka agreed that The Colony is certainly an exceptionally well-planned new community but did emphasize that some homes could be flooded in extreme weather conditions or when flood plains have changed. Mayor Pollard thanked the gentlemen for their presentation, and stated that the Council would take this under advisement at a later date. 8. DISCUSSION OF SELECTION OF AUDITOR FOR THE 1981/82 FISCAL YEAR Mr. Savage advised the Council that in their packet was an engage- ment letter from the firm of Peat Marwick Mitchell & Company. This letter outlined the scope and objectives of the engagement -4- 00.1.202 and estimate of hours and fees. He stated that Peat Marwick Mitchell has estimated approximately 320 work hours will be required for this year's examination, and the fee will not exceed $11,750. He added that they would like to begin the interim phase of their work in June of 1982 and do agree to complete the examination by December of 1982 with a delivery of report to the Council on or before January 15, 1983. The Council then discussed their options at this time. Councilman Sample and Councilman Poole felt that it would be wise to go a second year with the firm of Peat Marwick Mitchell. Councilman Adeler stated that he was in favor of using this firm the first year but could not justify the high expense for a second year. Mayor Pollard agreed with Councilman Adeler's position. Councilman Adeler also stated he felt that the man hours proposed by the firm of 320 were excessive. Mayor Pollard requested that staff deter- mine the standard hourly rate charged by Peat Marwick Mitchell. After further discussion, Mayor Pollard took a consensus of the Council, and it was agreed by Councilmen Adeler, Parker and Dodds that the city should go out for proposals again this year. Councilmen Sample and Poole felt that the city should continue with Peat Marwick Mitchell another year. Mr. Savage said that he would send proposal letters to the audit firms that were invited to bid last year, however, he requested that the Council give him any suggestions that they might have regarding additional firms. 9. CONSIDERATION OF ORDINANCE AUTHORIZING THE CITY MANAGER TO ENTER INTO A LEASE PURCHASE CONTRACT FOR ONE 1982 CHEVROLET C-30 MODULANCE VEHICLE (AMBULANCE) Mr. Savage stated that in the Council's packet is a proposal from Mercantile Texas Capital for the lease-purchase of the new Fire Department ambulance. He stated that the agreement provides for a two-year payout period at a total cost of $40,171.20. He stated that this payout schedule provides for the following yearly expenditures: 1981-82 $6,695.20, 1982-83 $20,085.60, and 1983-84 $13,390.40. He stated that the monthly payments would be $1,673.80. He did explain that the proposal includes an outfunding clause and provides the city with the opportunity to pay off the remaining balance at the end of each fiscal year. However, since the preparation of this packet he has received a proposal from The Colony Bank offering an interest rate of 12.9% with an APR of 13.109%. He said he would like for the Council to consider this option. Mayor Pollard stated that if they were going to go out to a local bank, he would prefer that other banks in this area be given the opportunity to present a proposal on this financing. At this time, Councilman Parker moved to defer action on this item until the proposal process could be conducted by the City Manager. Seconded by Councilman Dodds, the motion was passed by the following roll call vote: Ayes: All members present voted aye Noes: None 10. RECEIVE REPORT ON DENTON COUNTY TAX APPRAISAL DISTRICT WORK Mr. Savage stated that he did have a meeting with Mr. Earl of the Denton County Tax Appraisal office and that the preliminary tax figure for the City of The Colony is $295,349,756. He stated that this represents a 50% increase over last year's figures. He stated that $8 million of this amount was for personal property taxes as well as all transmission lines within the city. He did state that the district office is behind schedule but that they did anticipate having all tax statements mailed by Tuesday, June 15th and that hearings would be held during the month of July. He did not anticipate the city receiving a final tax roll until September 1st. At this time, the City Manager reviewed -5- 001203 for the Council the following budget schedule: July 1 Publish Notice of Revenue Sharing Hearing July 8 Hold Hearing on Revenue Sharing July 15 File Budget July 19 Pass Ordinance calling Public Hearing July 22 Publish Notice of Public Hearing August 2 Hold Public Hearing on Budget Pass Ordinance Adopting Budget August 5 Publish Notice of Hearing on over 3% Tax Increase August 16 Hearing on Tax Increase August 26 Publish Notice of second meeting where over 3% tax increase will be adopted. Sept. 6 Second meeting on tax increase and passage of ordinance to levey tax. Publish Notice--Budget Summary available (30 days from filing date; required by Revenue Sharing) He advised them that a copy would be placed in their boxes. Councilman Sample asked if the Council and the city would be gettin¢ calls on these tax statements. Mr. Savage assured that they would and advised them that he would provide them with copies of the notices for them to review. However, calls should be referred either to the city's tax clerk or to the Denton County Appraisal District. There being no further action to be taken by the Council, Council- man Poole moved that the meeting be adjourned. Seconded by Councilman Dodds, the motion was passed by the following vote: Ayes: Ail members present voted aye Noes: None Mayor Pollard adjourned the meeting at 10:15 p.m. GE~ POLLARD, -~AYOR ATTEST: jAi~QE//CA~ROLL,[ ?~'~ ~2~/~~CiTY SECRETARY -6-