ccspecwksp 04-15-1998
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CITY COUNCIL SPECIAL WORKSHOP SESSION
APRIL 15, 1998
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The Schertz City Council convened in Special Workshop Session on Wednesday,
April 15, 1998 at 7:00 p.m. in the Conference Room, 1400 Schertz Parkway,
Schertz, Texas. The following members were present: Mayor Hal Baldwin,
presiding; Councilmembers Norman Agee, Sr.; Charles McDonald. Absent:
Councilmembers Timothy Swinney and Joe Potempa. Staff present were City
Manager Kerry Sweatt and Deputy City Secretary Dolores Butler.
1. HEARING OF RESIDENTS: No one had signed up to speak.
5. Discuss a tax abatement request from Coronado Paint.
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Mr. Sweatt went briefly through a report and analysis of the proposal and some
recommendations from the Economic Development Commission (EDC). In the
packet is a sketch showing the addition proposed to the property, a $650,000
enlargement to the existing facility providing for approximately $30,000 more in
warehouse inventory. Under the table and general guidelines that the EDC
operates under, Coronado Paint qualified based on this capital investment for a
tax abatement of 37.77% which includes recognition of existing businesses.
Analysis of the addition results in cut straight to the chase with the enlargement to
the building and after the abatement, will still result in an increase in ad valorem
taxes to the City of Schertz each year of some $1,544 after the 37.77%
abatement. Cost of the abatement is covered by 2.77 to 1 and it is not creating
new jobs but the existing jobs on the payroll is still valued at about $872 for the
abatement cost. All in all, we continue to believe this represents a good
investment for the community. The EDC met with Mr. Petersen and after review,
voted to recommend to City Council the 37.7% abatement.
Mr. Petersen noted a correction to Mr. Sweatt's statement regarding added
inventory. Rather than $30,000, the increase is 30,000 gallons in additional
inventory. The new addition is a 21,000 square foot addition on the FM 3009 side.
It is being constructed of the same materials and will be painted as the existing
building.
Mayor Baldwin stated that if Council has no further comments or questions, we will
have the first reading of an ordinance next Tuesday.
6. Discuss a tax abatement request from Alamo Packaging.
Mr. Sweatt noted this is a new company in a sense that they are new in town. Mr.
Teinert has been discussing this project with Mark for quite some time. We are
pleased to report that after a meeting with the EDC, Alamo Packaging has moved
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forward with their plans to locate in our community. They are in the process of
moving dirt for some 63,000 square foot building in the Tri-County Business Park.
Mr. Teinert, CEO; John Taylor, President and Ms. Kevin Baumann are here to
answer questions. The estimated cost of the building is $1,300,000, they have
equipment and tools which will be appraised as personal property for tax purposes
in the neighborhood of $772,000. and they will employ approximately 36 people.
After review with EDC, with the caps that are in place, the initial run-through
would have qualified the company for a 82.2% abatement for a five (5) year period
of time; however, if caps were removed and a number of other factors were
considered, additional terms could be considered. In order to recognize the
significant impact of the sales tax and the personal property (none of which
receive abatements) the EDC voted to recommend an 82.2% abatement over an
eight (8) year period of time. There were other considerations under the table if
caps were removed and the credit was full given, it would have escalated down of
90% for seven (7) years and 75% for the eighth (8th) year. It was felt by Mr.
Teinert and the EDC that a flat 82.2% for the eight (8) year period of time would be
a good compromise and a benefit to the company.
Mr. Teinert expressed excitement about coming to Schertz. Mark Marquez said
he has a floor plan if anyone would care to see it. Mr. Marquez said the
construction is next to Lone Star Pet Supply - directly behind Keebler.
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Mr. McDonald indicated he had a concern about the variance on the abatement
regarding personal property. Other folks have come in with a lot of personal
property and we rejected their abatement application. Some exceeded the payroll
factors and were rejected. Are we opening a door for them all to come back now
for amendments and variances to pick up some additional tax abatements.
Mr. Marquez said he wouldn't say the door is open. We've done some variances
before. In this case the employment was an important factor but it was the sales
tax that drove it. It remains to be seen in the future how the EDC may respond to
the various other requests that may come in. Mr. Sweatt said he would go back
and try to get a report together about this matter.
Mr. Taylor informed Council that Alamo Packaging manufactures corrugated
boxes and protective packing, customizing for individual manufacturers to help
them ship their products whether retail or wholesale. The company also does
shipping damage.
Mayor Baldwin asked for a example of some of the retailing that will net the sales
tax.
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Ms. Baumann advised that it isn't retail, it would be same as that product that we
sell to a manufacturer, depending on the end user determines whether or not there
is sales tax applicable - Le., someone who is a distributor and does not actually
manufacture anything may buy the same boxes and is taxable to that user.
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Mr. Taylor interjected boxes actually used in the production process is not taxable
but if it is used to ship - it's pretty technical.
Mr. McDonald asked if the salesmen were all based here to which Mr. Teinert
responded, there are some in Austin, down on the border, in the Brian-College
Station-Houston area but the majority are right here.
Mr. Teinert noted the company will shortly be ISO 9,000 - the goal is to be
registered by the end of the year.
Mayor Baldwin welcomed Alamo Packaging to the community and thanked the
representatives for being available to answer questions. The Ordinance will be on
placed on the April 21 agenda for first reading.
#2 Discuss first reading of an Ordinance regarding parking regulations in the
500 block of Main Street.
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In response to the discussion last week, Mr. Sweatt said we have attempted to
address the issue of parking in restricted parking. We have described in an
ordinance that parking is prohibited in a 95' portion (outside wall of Nathalie's
abutting the bank parking lot to the east curb line of Lindbergh Avenue, excluding
the 50' 6" frontage of Nathalie's) of the 500 block of Main Street, limited to 15
minutes during the hours of 11 :00 a.m. until 2:00 p.m., Monday through Friday.
John Sippel wanted you to know he is not unhappy.
Mr. Greenwald noted Mr. Sippel has parking behind his store so his customers
won't be as inconvenienced.
Mr. McDonald suggested the ordinance should read "Monday through Saturday"
since all three (3) of the businesses are open on Saturday.
Mr. Greenwald suggested calling Mary Ann at Ace to verify the Monday through
Friday time frame and if so, go with the Ordinance as written.
#3 Discuss development of cable television program.
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Mr. Sweatt advised that Paragon Cable has offered to make available
programming time, equipment and technical support to have a program on
Channel 21 for city purposes. Rachel Drady, reporter for the Herald, has
extensive journalistic ability and she has agreed to organize the program, getting
schedules worked out with Paragon with help from the city staff. We have asked
Rachel to suggest some topics of interest to the public. As Rachel becomes more
proficient using mini-cams, we can bring them out to the site and do work with the
teen court, and perhaps some ride-along programs with various departments.
Schedules are to be worked out with Paragon. We would like to have the first
program ready to go the first weekend in May.
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Mr. McDonald asked if we could set this up and have it on a continuous run in the
lobby here at the municipal building. Rachel noted Paragon will provide a copy of
the tape for our use as we see fit. Primarily, these programs will be shown during
the day during school hours and hopefully, can eventually be shown at the school
with a city representative available to answer questions - possibly getting students
involved in internships to help out and get some experience.
Suggestions were to use some air time for a community calendar and posting of
agendas and public hearings, etc. Mr. Greenwald wondered how we would fill 30
minutes every week.
Mr. Sweatt said it isn't really 30 minutes with lead-in and lead-out. There are a
bunch of things to talk about and Rachel will work a good set of programs in and
those involved will be prepared ahead of time so the programs can be timed and
designed to fit the space. It has been discussed doing this on a three-month trial
basis to see if this will fit for Rachel and the city staff.
Mr. Spain said he wouldn't be surprised if Paragon would really like this to be good
so they can market this as their community service.
It was the consensus Mr. Sweatt go forward with this program.
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#4 Discuss final reading of an Ordinance regarding traffic control measures at
the intersection f Ashley Park and Baldwin Park.
Mayor Baldwin noted we have discussed this and barring any further comments,
we are ready to go with final reading of this Ordinance.
#7 Discuss appointment of members to the Economic Development
Commission.
Mr. Sweatt reminded Council that terms of office (two years) for the Economic
Development Commission (EDC) are expiring for Lewis Borgfeld, Wanda Sweatt,
Harry Richburg, Jackie Jones, Tim Fetter and Stacy Ware. They have all agreed
to serve another term if re-appointed by the Council. There is a new position
available and appointment of Mr. Arnold Barrett has been recommended of Barrett
and Sons in the Commercial Place Industrial Park. If it is the Council's pleasure,
these members will serve the new term and this item will be placed on the April 21
agenda for appointment.
#8 CITY MANAGER'S REPORT: A. Announced the dedication of the
Gutierrez xeriscape Park at 2:00 p.m. Sunday, April 19th.
B. Reminded Council of the May 16th Employee Awards picnic. Tonight or as
soon as possible, we need your RSVP numbers for catering purposes.
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C. Announced the ground breaking of Quantum Health facility at the corner of
Ashley and FM 3009, April 17th at 11 :30 a.m.
D. Reminded Council of the official opening of the new County facility on May 6th
at 5:15 p.m.
E. Remarked that City Ordinance prohibits the use of the public street and right of
way (ROW) for maneuvering room; however, it does not preclude the use of
the ROW for driveways and vehicles off the riding surface. In order to resolve
a liability with the Sonic Drive-In, we are acquiring two (2) parking spaces as
part of the FM 78 widening; otherwise, we would have to pay for a loss of
business in addition to just buying the land. In negotiating with Sonic, we have
proposed a compromise in which they would use the ROW behind the curb of
First Street but between their existing concrete driveway and the curb for a
additonal travel lane and parking lane for the vehicles to rotate through - they
will actually gain one (1) space. There is no action required on the part of the
city - just wanted to make Council aware and answer any questions.
Mr. Greenwald asked if we need something in writing in the archives stating why
we did this. Mr. Sweatt said we will administratively approve the circulation plan
because it does necessitate some remodeling resolving the traffic flow. The issue
of speakers at the two curb parking spaces has not been addressed but will be. If
no one has any objection, we need to move forward with the purchase of ROW.
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#9 ITEMS BY COUNCIL: Mr. Greenwald: A. Commented on the Alamo
Packaging's landscape plan as presented to Planning & Zoning (P&Z).
B. Stated that P&Z asked Oak Trails to do some looking at a few other things up
behind Oak Forest - existing R-1 and R-2. They are going to have to put the
projected extension of Wiederstein in. P&Z asked about the possibility of
moving it up closer to the drainage ditch.
C. Noted that Woodbridge Subdivision on Schertz Parkway, north of Maske Road
(Biegert property) is going to bring the extension of Woodland Oaks Drive out
to FM 3009. Zoning is for R-2 (70'X120' lots) for approximately seven (7) acres
around front between Maske and just past Woodland Oaks. He is proposing to
leave the property abutting Schertz Parkway as General Business.
D. Reported that Canyon Regional Water Authority (CRWA) is concerned about
ethanol and 24-D and sonar (herbicides to kill the hydrilla) that was put in
Dunlap and McQueeney, what effect is to going to have on the water supply.
As a water purveyor, CRWA is responsible for any subsequent problems.
There was a lot of discussion on the plant expansion - going from $2 million to
$4 million on Phase I and to $8 million. Before we ever see a drop of water it
will be four (4) to six (6) years.
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Mr. McDonald: Expressed concern regarding tax abatements. It is his
understanding that Slim's Paint and Body Shop asked for an abatement and were
told they don't give retail abatements. It was his understanding this had been
discussed and applications could be made and would be considered on the merits.
Mr. Sweatt interjected they have been told the City doesn't have a policy regarding
retail abatements but if they wanted to apply, we would.
Mr. McDonald indicated he did not think it should be a City policy that we don't
give retail abatements.
Mr. Sweatt stated the EDC had considered that and said rather than recommend
the Council change the policy, that we will just consider any applicants. He
doesn't think they have ever refused to do one. There is certainly debate and the
members of EDC were pretty concerned of adding retail to our abatement process.
Mr. McDonald argued that most retail businesses will bring more to the table in
taxable revenue. Going off the City Council, Mr. McDonald expressed his concern
about shutting the door on retail businesses as they bring more to the table than
anybody; they're bringing more jobs. Those are $12 - $16 per hour jobs for
technicians.
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Mayor Baldwin inquired what the policy is relating to retail businesses to which Mr.
Sweatt answered, the EDC and our guidelines do not provide for retail business
automatically as manufacturing or distribution is allowed under current guidelines.
When this came before the Commission at it's last meeting it was reiterated that
maybe some retail at some level of investment would be appropriate but rather
than write in or recommend an addition that is hard and fast, EDC would just
consider each applicant individually and if it warrants, EDC would make
recommendation to Council.
Mayor Baldwin suggested looking at the abatement policy from the ground up -
the definition of abatement, why we give them and why we selected manufacturing
and start from there. Does anyone who has an abatement policy give abatements
to retail businesses?
Mr. Sweatt said perhaps others do but that was just not the target when we first
began. The Task Force and others recommended targeting hotels. There was an
extra incentive to locate in the Foreign Trade Zone - distribution facilities were
targeted. Manufacturing was targeted primarily for jobs.
Mayor Baldwin stated the city needs to decide what they need, what they want to
come into the city.
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