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06-03-2014 MinutesMINUTES REGULAR MEETING June 3, 2014 A Regular Meeting was held by the Schertz City Council of the City of Schertz, Texas, on June 3, 2014, at 5:30 p.m., in the Hal Baldwin Municipal Complex Council Chambers, 1400 Schertz Parkway, Building #4, Schertz, Texas. The following members present to -wit: Mayor Michael Carpenter Councilmember Jim Fowler Councilmember Cedric Edwards Staff Present: Deputy City Manager John Bierschwale Chief of Staff Bob Cantu City Secretary Brenda Dennis Call to Order Mayor Pro -Tem David Scagliola Councilmember Daryl John Councihnember Matthew Duke City Manager John Kessel Executive Director Brian James City Attorney Charles Zech Deputy City Secretary Donna Schmoekel Mayor Carpenter called the Regular Meeting to order at 5:32 p.m. Invocation and Pledges of Allegiance to the Flags of the United States and the State of Texas Councilmember Fowler provided the invocation followed by the Pledges of Allegiance to the Flags of the United States and the State of Texas. Executive Session Mayor Carpenter recessed into executive session at 5:35 p.m. 1. City Council will meet in closed session under section 551.074 Evaluation of the City Secretary and Deputy City Secretary. Councilmember Edwards left at 6:00 p.m. Reconvene into Regular Session Mayor Carpenter reconvened into regular session at 8:27 p.m. Ia. Take any necessary action based on discussions held in closed session under Agenda Item number 1. No action taken. City Events and Announcements • Announcements of upcoming City Events (J. BierschwaleB. James) 06 -03 -2014 Minutes Page - I - Mayor Carpenter recognized Executive Director of Development Brian James who provided the following announcements and upcoming events: • Wednesday, June 4, 2014, Visitation and Viewing for former Councihnember Joseph Potempa, Schertz Funeral Home, 5:00 p.m. to 9:00 p.m., with a rosary to be recited at 7:00 p.m. Funeral Mass will be held on Thursday, June 5, 2014, at 9:00 a.m., Good Shepherd Catholic Church. Interment will follow at Fort Sam National Cemetery with the United States Air Force Honors. • Thursday, June 5, 2014, Chick- Fil -A, Grand Opening and Ribbon Cutting, 6038 FM 3009, 9:00 a.m. to 2:00 p.m. • Friday, June 6, 2014, Cibolo Dental Ribbon Cutting, 3893 Cibolo Valley Drive, Suite 104, Cibolo, at 11:00 a.m. • Tuesday, June 17, 2014, 5:00 p.m., Local Author Scott Hubbartt, will be visiting the Schertz Library to speak about his new book "A Short Walk to the Edge of Life" • Announcements and recognitions by City Manager (J. Kessel) Mayor Carpenter recognized City Manager John Kessel who stated that on Tuesday, May 27, 2014, members of EMS and the Fire Department deployed the Ambus down to the VA Hospital in Kerrville as they had lost power and lost their backup generators. They stayed for eight hours keeping everyone safe in that facility until power was restored. City Manager John Kessel thanked Kellie Scurlock, Jason Burch, Leon Allegretti, Mike Shown and Mike Consentino. Hearing of Residents: Mayor Carpenter recognized the following who spoke: • Mr. Robert Brockman, 1000 Elbel, who addressed the Council regarding the need to update the City's billboard on 1H 35, as it still shows information on the Jazz Fest. City Manager John Kessel stated that they would normally switch out to the "10 miles to San Antonio, Schertz largest Suburb" sign after that event; it turns out that that particular vinyl became unserviceable and we are in the process of having it remade. The City will be placing the 4a' of July Jubilee information on the billboard fairly soon. Workshop • Discussion and possible action regarding presentation formats (Item requested by Mayor Carpenter) (J. Kessel/B. James) Mayor Carpenter recognized Executive Director of Development Brian James who stated that the idea was to standardize presentations to Council. Mr. James provided a Power Point presentation with the proposed two Power Point templates which are intended to better promote the City's brand and ensure consistency across departments when making presentations to City Council and other organization. He stated these templates are to be used by all City Departments except Economic Development which has its own brand. Mr. 06 -03 -2014 Minutes Page -2- James indicated that the City Manager may approve alternate templates on a case by case basis. He stated the template with the white background should use dark blue and/or brown letters that matches the color on the City's business cards, with the Schertz logo at the bottom. White letters should be used for the template with the blue background. Arial font should generally be used. Page numbers should be provided on all slides, and when entailing digital versions of PowerPoint presentations the document should be converted to a PDF. Mayor Carpenter indicated that he had asked this be placed on the agenda and that it may be a small thing to have a consistent presentation format, but if it is something that we begin to discipline, in his mind today, when we become of City of 50, 60, or 75,000 it will create a consistent brand image. This becomes more and more important and germane to who we are as a growing City and a bigger concern within the region and across Texas as we go further. Mayor Carpenter indicated that this again may seem a simple thing but that over time these details will add to definition of who we are and our brand image. This will serve us well down the road. Mayor Carpenter thanked Mr. James. Consent Agenda Items Mayor Carpenter recognized Councilmember Fowler who requested agenda item 4 be removed from the consent agenda for separate action. The Consent Agenda is considered self - explanatory and will be enacted by the Council with one motion. There will be no separate discussion of these items unless they are removed from the Consent Agenda upon the request of the Mayor or a Councilmember. 2. Minutes — Approve the minutes of the regular meeting of May 27, 2014 (J. Kessel/B. Dennis) 3. Resolution No. 14 -R -46 — Approval of a Resolution approving and authorizing an amended agreement between the City and Green Valley Special Utility District with respect to the boundary lines of the Certificates of Convenience and necessity held by each provision of water service to users pursuant to the Texas Water Code, and other matters in connection therewith. (J. Bierschwale /S. Willoughby) The following was read into record: RESOLUTION NO. 14 -R -46 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AMENDING RESOLUTION 14 -R -23 APPROVING AND AUTHORIZING AN AMENDED AGREEMENT BETWEEN THE CITY AND GREEN VALLEY SPECIAL UTILITY DISTRICT WITH RESPECT TO THE BOUNDARY LINES OF THE CERTIFICATES OF CONVENIENCE AND NECESSITY HELD BY EACH PROVISION OF WATER SERVICE TO USERS PURSUANT TO THE TEXAS WATER CODE, AND OTHER MATTERS IN CONNECTION THEREWITH 06 -03 -2014 Minutes Page - 3 - Mayor Carpenter recognized Councilmember Fowler who moved, seconded by Mayor Pro- Tem. Scagliola to approve the consent agenda items 2 and 3. The vote was unanimous with Mayor Pro -Tem Scagliola, Councilmembers Fowler, John, and Duke voting yes and no one voting no. Councilmember Edwards was absent. Motion Carried. Discussion and Action Items 4. Resolution No. 14 -R -47 — Approval of a Resolution amending the Performance Management and Probation Policy contained within the City of Schertz Employee Policy Handbook. (J. Kessel/J. Smith) The following was read into record: RESOLUTION NO. 14 -R -47 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING CHANGES TO THE CITY'S PERFORMANCE MANAGEMENT AND PROBATION POLICY AS CONTAINED IN THE CITY OF SCHERTZ EMPLOYEE POLICY HANDBOOK AND THE CREATION OF THE EMPLOYEE CLASSIFICATION POLICY TO BE ADDED TO THE EMPLOYEE POLICY HANDBOOK. Mayor Carpenter recognized Human Resource Director Josh Smith who introduced this item addressing questions from Council. Mr. Smith stated the employee policy handbook was last updated in May, 2008. Many of the policies contained within the policy handbook should be updated to meet legal and operational compliance. Mr. Smith stated staff has performed their due diligence in ensuring the proposed changes to personnel policy are appropriate through the following process: 1. Benchmark best practices of other municipalities in the South - Central Texas Region. 2. Solicit input from key stakeholders and Subject Matter Experts (SUE) 3. The development of an ad -hoc review committee consisting of individuals from various departments to ensure the policies fit the unique needs, culture, and values of the City of Schertz. 4. Vet policies through other review committees consisting of: a. Administrative Assistants (Gatekeepers) b. Department Heads c. City Management d. City Employment Attorney e. City Council 06 -03 -2014 Minutes Page -4- Mayor Carpenter recognized Councilmember Fowler who moved, seconded by Mayor Pro- Tern Scagliola to approve Resolution No.14 -R -47. The vote was unanimous with Mayor Pro -Tem Scagliola, Councilmembers Fowler, John, and Duke voting yes and no one voting no. Councilmember Edwards was absent. Motion Carried. 5. Resolution No. 14 -R -45 — Consideration and/or action approving a Resolution authorizing the Implementation of the Stormwater Management Plan and approving the Notice of Intent for Stormwater Discharges from Small Municipal Separate Storm Sewer Systems (MS4) under the Texas Pollutant Discharge Elimination System Phase II MS4 General Permit (TXR040000) for the City. (J. Bierschwale/L. Busch) The following was read into record: I�Y�]SI IITI [I ►7`�►(17fCD•.a� A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING THE IMPLEMENTATION OF THE STORMWATER MANAGEMENT PLAN AND APPROVING THE NOTICE OF INTENT FOR STORMWATER DISCHARGES FROM SMALL MUNICIPAL SEPARATE STORM SEWER SYSTEMS (MS4) UNDER THE TEXAS POLLUTANT DISCHARGE ELIMINATION SYSTEM PHASE H M84 GENERAL PERMIT (TXR040000) FOR THE CITY AND OTHER MATTERS IN CONNECTION THEREWITH Mayor Carpenter recognized recently promoted Stormwater Manager Larry Busch who introduced this item stating that the Federal Water Pollution Control Act was passed in 1972. After the law was amended in 1977, it became commonly known as the Clean Water Act, The Clean Water Act (The Act) established the structure for federal regulation of pollutant discharges into the waters of the United States, authorized the Environmental Protection Agency (EPA) to implement pollution control program, extended the requirements to establish standards or surface water contaminants, and made it unlawful to discharge unpermitted point source pollutants into navigable water. The Act also established funding for construction of sewage treatment plants and promoted planning to address non -point source pollution. In order to reduce stormwater pollution, amendments were made to the Clean Water Act in 1987, requiring stormwater discharges to be permitted in two phases. Phase 1 applied, among other things, to large cities with separate stormwater sewer systems. The regulations required these cities to obtain National Pollutant Discharge Elimination System (NPDES) permits. The permit process imposed controls on the cities to reduce pollution in stormwater discharges. Phase 2 applies to smaller cities. In 1999, the EPA issued final regulations for Phase 2 and required certain smaller cities to obtain NPDES permits. The Texas Commission on Environmental Quality (TCEQ) issued the Texas Pollutants Discharge Elimination System General Permit Number TXR040000 (General Permit) for Phase 2 Stormwater on August 13, 2007, in order to create a mechanism for non -Phase 1 Texas cities with populations of over 1-,000 to come into compliance with the federal regulations. 06 -03 -2014 Minutes Page -5- On December 13, 2013, TCEQ issued a revision to the General Permit that replaces the 2007 version. With the new General Permit all Municipal Separate Storm Sewer Systems (MS4s) are defined by levels based on the population served in an urban area according to the 2010 decennial census. Schertz' population in the 2010 decennial census was 31,465, defining the community as a Level 2 Small MS4. The process for a Level 2 Small MS4 applying for coverage under and maintaining conformance to the General Permit begins with submitting two documents to TCEQ. The first document is a form provided by TCEQ called a Notice of Intent. The second document is the Stormwater Management Plan (SWMP). In addition to submitting the Notice of Intent and the SWMP, the City must maintain records on the SWMP, submit an annual report to TCEQ on each of the permit years, and submit other records to TCEQ when requested. The records must include documentation pertaining to, among other things, the effectiveness of Best Management Practices that will be implemented to reduce pollutants and shall be included in the annual reports as required in Part IV.B.2 of the General Permit. The records must also be kept available to the public. Any changes to the SWMP must be included in the annual report as described in Part IV.B.2. of the General Permit and must meet the requirements of Part ILD.1. of the General Permit. The City must report non - compliance with the General Permit to TCEQ and maintain accurate records at TCEQ offices. Mayor Carpenter recognized Mayor Pro -Tem Scagliola who moved, seconded by Councihnember Fowler to approve Resolution No. 14 -R -45. The vote was unanimous with Mayor Pro -Tem Scagliola, Councilmembers Fowler, John, and Duke voting yes and no one voting no. Councilmember Edwards was absent. Motion Carried. 6. Ordinance No. 14 -B -28 — Consideration and approval of an Ordinance by the City Council of the City of Schertz, Texas authorizing. the issuance of "City of Schertz, Texas General Obligation Refunding Bonds, Series 2014 ", levying an annual Ad Valorem Tax, within the limitations prescribed by law, for the payment of the bonds; prescribing the form, terms, conditions, and resolving other matters incident and related to the issuance, sale, and delivery of the bonds; authorizing the execution of a Paying Agent/Registrar Agreement, a Purchase Contract, and an Escrow and Trust Agreement; complying with the Letter of Representations on file with the Depository Trust Company; authorizing! the execution of any necessary Engagement Agreements with the City's Financial Advisors and/or Bond Counsel; and providing an effective date. First and Final reading (J. Kessel/J. Kuhn/M. McLiney The following was read into record: ORDINANCE NO. 14 -B -28 AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING THE ISSUANCE OF "CITY OF SCHERTZ, TEXAS GENERAL OBLIGATION REFUNDING BONDS, SERIES 2014 ", LEVYING AN ANNUAL AD VALOREM TAX, WITHIN THE LIMITATIONS PRESCRIBED BY LAW, FOR THE PAYMENT OF THE BONDS; PRESCRIBING THE FORM, TERMS, CONDITIONS, AND RESOLVING OTHER MATTERS INCIDENT AND RELATED TO THE ISSUANCE, SALE, AND DELIVERY OF THE BONDS, INCLUDING THE 06 -03 -2014 Minutes Page - 6 - APPROVAL AND DISTRIBUTION OF AN OFFICIAL STATEMENT PERTAINING THERETO; AUTHORIZING THE EXECUTION OF A PAYING AGENT/REGISTRAR AGREEMENT, A PURCHASE CONTRACT, AND AN ESCROW AND TRUST AGREEMENT; COMPLYING WITH THE LETTER OF REPRESENTATIONS ON FILE WITH THE DEPOSITORY TRUST COMPANY; AUTHORIZING THE EXECUTION OF ANY NECESSARY ENGAGEMENT AGREEMENTS WITH THE CITY'S FINANCIAL ADVISORS AND /OR BOND COUNSEL; AND PROVIDING AN EFFECTIVE DATE Mayor Carpenter recognized Bond Counsel Mark McLiney with Southwest Securities who introduced this item stating that on April 15, 2014 the City Council authorized Southwest Securities to proceed with the refund due to low rates. At that time it looked like and what they presented would have been a savings of $611,000. They completed the sale today and the savings ending up at $1,406,689. He stated that a couple of things attributed to this. He reminded Council that they were not refunding all the bonds that were available only because they wanted to keep the limit to $10 million and below. Mr. McLiney indicated that they would look again in January to get additional low rates. Mr. McLiney stated that what he really wanted to show the Council was the City's bond ratings. The City has been working for the last several years putting in financial policies to improve the City's bond rating. Mr. McLiney stated that they were going into this review with two ratings; (1) with Moody's which was a Aa2, but on negative credit watch, and (2) Standard & Poor's with a straight AA. The negative credit watch was from back in 2007 and 2008 where the City pulled down dramatically on fund balance, and were down to 10 %. The City's written policy goal was 25 %. It was business decisions at the time, the City purchased land and other things, and that was a reflection of what was going on and they had a negative credit watch on the City because of that. We immediately got this eliminated, our fund balance is now at 24% and believe that we are going to hit 25% plus by the end of this fiscal year. This was completely recognized in the Moody's report, where they put us at the AA2 and removed the negative credit watch. Standard and Poor's took us one step further. We were not on negative credit watch, we had shared that information with them that it was a business decision, even though it was against policy, they accepted that and each firm had different opinions and values on what goes on in how they come up with the ratings. Standard and Poor's rating came back with an upgrade of AA +; this is the second highest rating available. The Standard and Poor's report speak about the strengths: • Strong economy, benefitting from its participation in the board and diverse San Antonio -New Braunfels metropolitan statistical area (MSA); • Very strong budgetary flexibility with fiscal 2013 audited reserves of 22.9% of general fund expenditures; it goes on in the body of the report that the City is expecting to reach over 25% and maintain that; • Strong budgetary performance; • Very strong liquidity with strong access to external liquidity; • Strong management, supported by "good" financial management policies under our Financial Management Assessment (FMA) methodology; and 06 -03 -2014 Minutes Page - 7 - • Very week debt and contingent liabilities due mostly to high carrying charges and net direct debt. It is a reflection of how much debt the school district has to issue to handle the growth in this area. Mr. McLiney stated that the write up is exactly what they wanted, as well as the upgrade. They did report that we were not a AA +, but they gave us a AA +, our statistics keeps us at the AA. They said that the momentum of the City and what Management, Council and direction the City is going they were assured that in the next two (2) years that we would have all the matrixes we need to have the AA +; they said why wait. The statistics say no, but the leadership and everything that has been going on in the City said yes. This is from the Committee that is throughout the Country and they recognized the momentum that is going on in the City of Schertz, and with that they upgraded us to the AA +. Mr. McLiney stated that he doesn't believe that Moody's will be far behind in upgrading us as well. Mr. McLiney stated that he was excited to report this to the Council. Yes the savings were great, but in the long run the bond rating will save the City more money maintaining a AA+ over the multiple bond issues that we have in the future. Mr. McLiney reiterated the importance of the discussion earlier from staff in getting the City of Schertz name out there; this is all part of it, the branding, the consistent logos, how you sell yourself as the City makes a difference on the bonds. It is not just Finance 101. Mr. McLiney commended staff involved in preparing for the presentation and dealing with the rating agencies. When a question came up there was always an immediately thorough thought out answer. Mayor Carpenter read from page 3 section 3, because everything they have talked about over the last few years has come to fruition in the report. Our efforts in replenishing our fund balance, the discipline that we have had in the way that we spend the taxpayer's money and the five year rolling budgets that we have put in place have been recognized. Under Standard and Poor's comments where they talk about very strong liquidity " supporting Schertz's finances is liquidity we consider very strong with total government available cash of 54.6% of total governmental funds expenditures and 271.7% of debt service. City projections indicate liquidity will remain very strong through fiscal 2014. We believe Schertz has, what we consider, strong access to external liquidity because it has frequently issued tax - backed bonds, including GO bonds, certificates of obligation, and tax notes." Mayor Carpenter stated that basically they have said that we are in an incredibly strong liquid cash position, and if something happened to our cash position that we would be able to bridge those gaps with our capacity for borrowing; and borrowing at a very inexpensive rate. Mayor Carpenter read, "Strong management conditions are also sighted. We view Schertz's management conditions as strong, supported by, what we consider, "good" financial management practices under our FMA methodology, indicating that financial practices exist in most areas but that government officials might not formalize or regularly monitor all of them. Schertz engages in long -term financial and capital planning based on, what we regard as, conservative underlying assumptions such as revenue and expenditure growth, funding sources for capital equipment or projects, and effects on future budgets." Mayor Carpenter stated that we are on the correct path when it comes to managing the money that we have been asked to be stewards of, and doing it in a way that the rating agencies are taking notice. This will serve those that follow us, the residents and tax payers of the City in years to come. 06 -03 -2014 Minutes Page - 8 - Mayor Carpenter reiterated that he is pleased to be able to find money and put it back into the budget on behalf of the taxpayers; this is a great thing, but to get to this position of the two (2) bond ratings being able to ensure that those that follow us will be able to do things is one of the most exciting things that we can do as a body. Mayor Carpenter recognized Mayor Pro -Tem Scagliola who moved, seconded by Councilmember Fowler that the City Council adopt an Ordinance authorizing the issuance of "City of Schertz, Texas General Obligation Refunding Bonds, Series 2014. The vote was unanimous with Mayor Pro -Tem Scagliola, Councilmembers Fowler, John, and Duke voting yes and no one voting no. Councilmember Edwards was absent Motion Carried. Roll Call Vote Confirmation Mayor Carpenter recognized Deputy City Secretary Donna Schmoekel who recapped the votes of items 1 through 6. Requests and Announcements 7. Announcements by City Manager • Citizen Kudos • Recognition of City employee actions • New Departmental initiatives No further announcements were provided. 8. Requests by Mayor and Councihnembers that items be placed on a future City Council agenda. Mayor Carpenter requested that staff place on the future agendas quarterly evaluations of the City Secretary and Deputy City Secretary. 9. Announcements by Mayor and Councilmembers • City and community events attended and to be attended • City Council Committee and Liaison Assignments (see assignments below) • Continuing education events attended and to be attended • Recognition of actions by City employees • Recognition of actions by community volunteers • Upcoming City Council agenda items No announcements provided. Adiournment As there was no further business, the meeting was adjourned at 9:1 06 -03 -2014 Minutes Page - 9 - Michael R. Carpenter, Mayor T: CNOY\-O renda Dennis, City Secretary 06 -03 -2014 Minutes Page -10-