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ccspecwksp 09-01-1999 . SPECIAL WORKSHOP SESSION OF THE SCHERTZ CITY COUNCIL SPETEMBER 1,1999 The Schertz City Council convened in Special Workshop Session on Wednesday, September 1, 1999 at 7:00 p. m. in the Conference Room of the Municipal Complex, 1400 Schertz Parkway, Schertz Texas. Those present were as follows: Mayor Hal Baldwin presiding; Ken Greenwald; Pia Jarman; Reginna Agee; Glyn D. Williams and Joe Potempa. Staff present were City Manager Kerry Sweatt, Mark Marquez; L.J. Cott; Juan Santoya and Deputy City Secretary Dolores Butler. Due to the absence of Mayor Baldwin, Mayor Pro-Tern Potempa called the meeting to order at 7:00 p.m. #1 HEARING OF RESIDENTS No one had signed up to speak. Mrs. Jarman asked to present her position as to the proposed budget regarding the pay plan and merit increase, having spoken with Tim Swinney, former council member and having her facts together. Mrs. Jarman read the following: . "Because silence is often construed to mean tacit approval of opinions expressed, I voice my position at this time on the merit system. 1. With due respect to views expressed by Council, I believe that the merit system is the cornerstone of a just and viable personnel system in a democracy. Just because there is no 100% objective merit system does not mean that the system should be thrown out in its entirety. Should someone undeservedly get a step increase, it surely does not mean that Council believes those who deserve recognition should be denied their just dues. 2. Quota systems, where tried, have destroyed the very results they were intended to achieve. The Air Force having tried it in OER's (Officer Effectiveness Ratings) abandoned it after a few years, because it destroyed the morale, caused ill will between individuals, above all because it divorced the rating system from performance. I am totally against such a quota system. 3. This budget we are reviewing is, I understand, predicated and built on the reinstatement of the merit system. Therefore, as recommended in the Public Sector Personnel Consultant report, Executive Summary B.8 "the City should administer the salary plan on a merit pay basis utilizing the City's current performance appraisal system". . -277 - 4. It is my understanding that prior to the adoption of the 1998-99 plan of no merit increases for the fiscal year, the City employees were told why it was necessary because in the long run, it would work out for the best. They were not told that the step increase system would be abolished for good. . In voting approval of the total budget, Councilmembers Ken Greenwald, Joe Potempa and I implicitly approved the Personnel Consultant's recommendations in its entirety. The new members, Ginna Agee and Glyn Williams are of course, exempt from that commitment. 5. If Council reneges on this commitment - and I realize this council is not held to whatever commitments a previous council made - in good conscience I cannot support such a decision. It is not my M.O. to treat "paid help" shabbily while pampering constituents. Council has every right to abolish or reinstate the merit system. My Japanese sense of honor dictates, however, that I put my council tenure on the line. Should Council abolish the merit system, I tender my resignation." Respectfully submitted, Pia Jarman September 1, 1999 #2 Discuss architectural services agreement. . Mr. Sweatt noted the new emergency services buildings and the library are well underway and reminded Council that included in the bond issue was a projected amount for remodeling of the existing police facility to move the municipal building activities into that area. Some preliminary work has been done and it is time to move forward and we would like to enter into an architectural service agreement with the same firm (burns f1etcher gill) in the lump sum amount of $20,000 for architectural services. Mayor Pro-Tern inquired regarding the "consultant's fee as a direct pass through times a multiplier of 1.25, and out-of-pocket expenses will be reimbursed at actual cost times a multiplier of 1.15". Mr. Sweatt said that would be for additional services that are not anticipated above the $20,000 amount. If Mr. Fletcher is called on to do a substantial amount of other kinds of work, payment would be calculated. We don't foresee any additional cost at this time. If by some strange event, in tearing out the jail, found a major structural problem, that would be additional design work. Mayor Pro-Tern Potempa asked Mr. Sweatt if, to his knowledge, was there any asbestos in that extension of the building to which Mr. Sweatt replied, "no, not to our knowledge". If we find there is some substantial requirement such as having . -278- . . . to call for added expense of asbestos removal, that would be covered under the multiplier of 1.25. At this time Mayor Baldwin arrived and took the chair to preside over the remainder of the meeting. Mr. Greenwald stated he assumed the city got bids on contractors to do the work. Mr. Sweatt affirmed and stated that part of the architectural service will be to prepare plans and specifications. Included in the work will also be an evaluation of the air conditioning system as well as design of a new roof. Mr. Greenwald stated he had no problem with any of that; however, staff would be hard-pressed to talk him out of a penalty clause. Mayor Baldwin inquired as to the status of the emergency services buildings project which was to have been completed in March? Mr. Sweatt reminded Council that by the time we awarded bids it delayed progress. The contractor has turned in a workflow schedule that indicates completion by October 15, 1999. December is more nearly the move in date (before Christmas). Mayor Baldwin stated he is total agreement with Mr. Greenwald in that we should have included a penalty clause in a contract of that size to hold their feet to the fire. Mr. Sweatt advised the issue at the time was a payment for early completion which we chose not to enter into that arrangement. Mr. Potempa inquired if there is anyway we can hold the architect legally responsible. In other words, is the contractor responsible to the architect? Mr. Sweatt said in his opinion we couldn't. The contractor is responsible for prosecuting the work correctly according to plans and specifications, but not as far as time or that sort of thing. The contractor is working for us. The architect is overseeing the project as to compliance with plans and specifications. Mrs. Jarman inquired if the contractor has to answer to us as far as timing is concerned. Mr. Sweatt assured that yes, they do, in monthly "meetings. Mr. Sweatt said he would like to see the contractor doing the work on the library bid the renovation work on the municipal building. -279- With no further discussion this item will be placed on next Tuesday's agenda for . action. #3 Discuss an ordinance establishing a Municipal Court technology fund. Mr. Sweatt noted there is a draft of an ordinance that the city attorney has reviewed with the court personnel regarding establishment of a municipal court technology fund as discussed earlier in the budget revenue proposal. This has been authorized under provision of state law, funds to be specifically earmarked for certain types of use. It is a means to produce revenue to use for municipal court activity technology improvements and we recommend Council authorize the adoption of the ordinance. Mr. Williams asked how the city would differentiate between computer systems and computer networks? Hardware is hardware - systems is just more than one (1) piece of hardware. Mr. Sweatt said some of it is the same terminology but computer systems may be one (1) or two (2) items and a network may be the hubs and servers, etc. Wording is copied from state law. With no further discussion this item will be placed on Tuesday's agenda for action. #4 Discuss Pro-Logis request for Tax Abatement. . Mr. Sweatt noted we have a representative of Pro-Logis here tonight. Mr. Brown is here to assist us with answers to any questions. Pro-Logis is a real estate investment trust that builds large, commercial buildings for lease. They propose to build a 160,000 square foot building in Tri-County Business Park. They have qualified for a 90% abatement over a period of eight (8) years and 80% in the ninth (9th) year. As this matter went through the Economic Development Commission, Pro-Logis discussed the matter and asked for a variation of that, instead to extend the abatement for a period of 10 years. As we worked through and did the comparison, the arrangement would allow 80% abatement over a period of 10 years (dollars would end up being the same). The Economic Development Commission (EDC) has recommended approval of the 80% abatement and capital improvements over a 10-year period. We think this is a major addition to the community. Mark is distributing a copy of the overall site plan. Mr. Brown pointed out that Pro-Logis is the same as (if you were involved several years ago with our first building) previously known as Security Capital Industrial Trust. Just to better acknowledge what we are doing today, being a global company and the largest owner and developer of industrial real estate across the country, we changed our name last July and Pro-Logis signifies "professional logistics". The distribution business is more of a logistics business than it has been in the past as a warehouse business. This project will be very similar as far as looks to the existing facility as far as state-of-the-art construction. Pro-Logis is . -280- . a long-term owner of real estate; therefore, we only do things - spend the best dollars and own topnotch quality specs so this project will be indicative of the project already in the park. 96,000 square feet is already pre-leased to one of our global customers who leases space from us in seven (7) other markets across the United States (Graebel Movers). They will be consolidating the San Antonio and Austin facilities. We will have an additional 64,000 square feet of what we call inventory space - some people refer to it as spec space - we are already marking that space to other global users in our network. We currently have about 172,000,000 square feet across the U.S. and Europe with about 4,000,000 square feet in San Antonio which is 98% leased as of today. Our project, since completion has stayed 100% leased. Mr. Sweatt noted that one of the questions the EDC was interested in, and Eric Brown has spoken to that - it is very important that the abatement be passed through to the tenants and that is normally done through a triple net type of lease. . Mr. Brown said all their leases are triple net - we don't use the "t" word - it is a bad word in our company, we use the term "customer(s)". As an example, there is a new law that allows an owner to potentially get some school taxes back equivalent to the amount of sales taxes it pays. It would be very easy for a landlord not to pass that on to a customer. We recently have been able to take some benefit on that and every cent goes back to our customers. We use it to bring customers into our buildings. If the space isn't leased it doesn't do us any good. One of the key reasons that the Park (Tri-County) has been so successful in our project is the fact that the city of Schertz has had the foresight to allow companies such as Pro-Logis to look at this type of avenue to bring customers in to the Park. To show our commitment to the Park and the City, we did today, take possession of another owner that had a piece of land under contract (a 12.8 acre site adjacent to our facility) we have taken over that contract because the Dallas developer was not going to be able to perform so we are looking to close on that site later this year and that will increase our investment. Mayor Baldwin asked how the new facility compares in size to the first facility. Mr. Brown said the first building is 244,000 square feet, this is 160,000 square feet. Mayor Baldwin noted the new facility is in both Guadalupe and Comal County which means school district taxes are going to be affected. Mr. Brown said it splits the building right down the middle of the site. This has happened in other areas and generally, they (school districts) will agree on the total assessed value and based on architects or in-house calculations, will take their pro rata share. . -281- Mr. Sweatt noted a draft of the ordinance is included in the packet and we would . recommend Council adopt the ordinance approving the tax abatement at next Tuesday's regular meeting. Following Council action, the request will go to the two (2) counties with a presentation to both counties. #5 CITY MANAGER'S REPORT · Noted there is an unfunded mandate item from the TNRCC requiring the city to send a 1998 drinking water quality report to each of our water customers comparing our samples on certain categories to the standard. In all cases our drinking water quality is much better than the threshold requirements; however, this may cause some concerns. We will be mailing the report to each residential water customer and the cost is anticipated to be approximately $3,600 for printing and postage. · Announced the bids for the overlay work have been received and Ford Engineering has recommended awarding the project to low bidder, Ramming Paving Company, Inc. in the amount of $30,850. We would like to place this on your agenda for award next week. · Reiterating the need for a contingency account, we have a dire emergency having lost a pump at the Nacogdoches well site over the weekend. We are barely able to keep up with weekend demand and would like to move forward to purchase a new pump and have it installed by the weekend if at all possible. We are looking at as much a $30,000. We will be taking proposals from Odessa Pump and PMI, both have done work for us in the past. . #6 ITEMS BY COUNCIL Mr. Williams: Commented that he has been working with Kerry on a deal up at Woodland Oaks and FM 3009 that seems to be working well. Mr. Potempa: · Inquired as to the junkyard on FM 78 where the building was demolished by H.P. Printing - is that part of our demolition work and when is it going to be cleaned up. Mr. Sweatt informed Mr. Potempa that all that junk belongs to Burch Roofing and all our demolition work has been completed. · Reported the TIF meeting on Monday was very well attended. They reaffirmed they are going to continue on with the project even though the school district . bailed out. The TIF is looking at revision of the bylaws. -282- . Mayor Baldwin inquired as to the status of participation from the County and Mr. Sweatt said it is our position that the District has not been dissolved and there is no reason for the County to take any affirmative action to stay in; only if they chose to pull out. We had a meeting with Judge Sagebiel and one of the commissioners and there is some trepidation that some on the Commissioner's Court may want to back out. The city attorney is preparing a letter for us to the school and county attorneys. Mrs. AQee: · Inquired of Mr. Sweatt as to the cause of the (vehicle) rollover on FM 3009 to which Mr. Sweatt replied, "a mobile phone". The lady reached in the back to get the phone and took her eyes off the road. Mrs. Jarman: · Noted the Hometown Heroes project has been put to bed thanks to Dolores who did all the typing. We got it signed and mailed. The cover letter was typed on August 25th and mailed well in time for the deadline. . · The Citizens Police Academy is starting Thursday, October 7, an eight (8) week course, cut back from 13 weeks when Joe (Potempa) and I went through it. For those interested, application forms can be picked up at the Police Department. It was a fun course. The classes are from 7:00 p.m. to 10:00 one night a week. Mr. Potempa interjected his recommendation that every councilmember attend on of the sessions. · Announced the Schertz Humane Society will be doing dog training beginning Thursday, October ih at the Park. · Noted the Library Board will not meet until the first Monday before Labor Day. Mr. Sweatt noted the Library will be closing for the week of the 1 ih _ 23rd (tentative schedule) for the contractor to do the carpeting and get everything moved out and back in. If the dates change we will let you know. Mr. Greenwald: Reported some of the members and ex officios of the Schertz/Seguin Local Government Corporation took a trip to the ranch which was very interesting. The engineers got a tentative pipeline laid out. They are going to Austin next Wednesday - the Texas Water Development Board has a program if your doing a . major regional project and your line size comes' up to 30" -long range you're -283- looking at a 40" line they will give you the money to do the 40" line now, deferring . the interest and principle for 10 years or some magic number. We could end up getting use of State money for some of the project. At the meeting of the 16th they are supposed to give us some tentative budget numbers. #7 ITEMS BY MAYOR · Commented he had a complaint from Bob Vallance about truck traffic in front of his place on FM 1518. The truck traffic has become horrible - they hit the park and start accelerating and by the time they go by his place they are doing 55 or 60 mph and he would like the police to be a little more vigilant over there and slow them down. Mayor Baldwin said he noticed an awful lot of truck traffic lately and wondered where they were coming from. Mr. Sweatt reminded there is a lot of construction going on all over the city. With the seal coat work in progress on FM 1518 the traffic should be slowed down now. #8 BUDGET WORKSHOP Mayor Baldwin asked if there is any issue we need to deal with in this budget that anyone thinks is exorbitant or obscene, either revenues or expenditures? Is there anything anyone would like to throw their elected position on the line for by going out and having Kerry add to the budget so we can raise the tax rate? . Mr. Potempa commented he would like to see another vehicle in the Animal Control Department. Mr. Sweatt said there is none budgeted this year. Part of the county payment includes a payment for vehicle equipment reserve that will eventually pay for replacement. Mr. Sweatt noted there is an item that is not included in the budget we need to talk about. Having spoken on several occasions of the staff's recommendations regarding the use or lack thereof, of a siren warning system, we continue to believe that is not an effective warning system. A considerable amount of research has been done on other types of warning systems, one of which is called Community Watch or City Watch System. It is a software and hardware program that actually uses automated voice response and telephone out-dialing. It would allow us to identify and target a given area and the software will manually call every telephone number in that given geographic area and leave a pre-recorded message depending on the need at the time. That system has some down sides but we think that philosophy is a better system. It is somewhere in the neighborhood of $27,000 - $30,000 plus $25 per line implementation cost. We could fund that through a change in our building inspection fees. We currently establish a building permit fee based on a value of $40 per square foot. We could change that upwards to $45 per square foot. The Southern Standard Building Code . -284- . recommends between $45 and $50. If we raise that to $45 per square foot, based on our current numbers (on residential alone in an average house of 2,100 square feet), our revenue would increase by about $33,000 per year. You need to be aware that kind of change would change the building permit fee on a 2,100 square foot house including permit fee and plan check fee of $40 is $607.50. At $45 it would change the cost to $673.50. That is one painless way to raise some revenue to do something that we believe is much more efficient system and would probably be used for other things. Those cities we have talked to with this system are really sold on it. There are still some bugs we need to work out - part of it has to do with time. We are looking at an average neighborhood of about 800 telephone numbers. It will take a period of time depending on the number of lines we could dedicate to call 800 phone numbers. It operates on a phone port so each four (4) ports, 250 phones can be contacted within an hour, so with 16 ports we could message 1,000 phones in an hour. We've looked at the neighborhoods that would probably need to be affected. . Mr. Williams asked if the system could be programmed to call certain numbers first in an emergency and Mr. Sweatt said it has a pointer to draw the area of the numbers to call. If we had it set up to call 500 in an hour we would designate the most critical first. The fallacy is that it does not include unlisted phone numbers. Some new numbers can be captured at the utility counter but probably not too many. We can go back and buy an updated database periodically. It comes with a base map showing the streets in place. In our case, we are growing so fast they won't have all the streets but that doesn't make any difference because this system operates on longitude and latitude. Mayor Baldwin stated, in his opinion it does add one more thing to our repertoire of things we've done to eliminate problems we had in the October 17 flood. Mr. Sweatt said we have a little money coming from FEMA but not as much as we found we really needed to set up the low water alarm system. We are recommending the Community/City Watch System in lieu of a siren system. Mayor Baldwin said he would be in favor of the system but he believes the siren system needs to be moved down to the park where people can hear it when the creek starts coming up. Mr. Greenwald said his problem with that is when the siren goes off, what does it indicate? The next thing is going to be; "we've got a chemical leak, why didn't you blow the siren"? Mr. Williams asked what it would involve moving the siren we have now down to the park. Mr. Sweatt said it would be $1,275 in upgrade and other costs would be . approximately $22,000. -285- Mr. Williams asked why it won't work as it is down there. Mr. Sweatt said because it is set off with an electromagnetic button and they are proposing it be operated more dependably by a radio signal. . Mayor Baldwin recommended we go ahead and raise the building permit fee and put a line item in the budget, then we'll talk about how we want to spend that $30,000. We can always amend the budget. Mr. Potempa said he guessed he wouldn't get the truck for the Animal Control people. Mayor Baldwin asked if there was any consensus for an additional truck for Animal Control. Mr. Sweatt said they certainly would like one but we determined we just couldn't find any funding for it this year. There has been an expressed need for an additional vehicle to run errands but we will likely meet that with a transfer of a secondary vehicle out of public works. Mayor Baldwin asked if anyone else had any discussion on the merit (pay) situation and what we're going to do. It was his recommendation that the City Council get everyone into the plan where they ought to be and if we can't afford to . do it in one (1) year and we have to spread it out over a year or two, he would like to see everyone get into the plan - department heads - everyone where they need to be so that we can then start to do this plan the way we are supposed to. We can then take a look at how we compare with other communities. He'd like to see us take that merit money and use that to get everyone into the plan at least at the minimum salary level in the pay plan. Mr. Sweatt stated that would be pretty expensive and the only people who are not in it are department heads and top administrators, some second level persons. Mayor Baldwin stated there is a 4% salary increase in there for everyone and this day and time a 4% salary increase is not a bad salary increase, it is more than a lot of people are going to get. Mr. Williams stated he agrees that something needs to be done to get this resolved so we can move on. Mr. Greenwald said he didn't think the 4% would be enough to get everyone at the level where they need to be. Mr. Sweatt explained that today, every city employee is in the pay plan somewhere with the exception of a group of some of the department heads and some of the second in command personnel. When we made up the budget, we made a . -286- . recommendation and the money is in there, that all positions essentially get a 4% change (we went to 92 instead of 88), so where they were last year, they are going to get 4%; however, that starting step moved away from them by 4%. We are saying to prevent a big impact, we'll put another $700 in the pot to get a department head or top administrator closer into the pay plan, no more than $700. That will get a couple into the pay plan, it won't get them all. Also, there is budgeted for them, along with every other employee, the eligibility for two (2) more steps, another 4%. If they merited that, they would get that on top of whatever their new salary is. The numbers I gave said there will still be 10 employees who still have not got to the beginning step of the salary plan for their position. Mayor Baldwin reiterated it is his recommendation to get those 10 people to the minimum level with that $70,000 or whatever it takes, and then next year when everyone is where they ought to be, then we start back with the adjustment based on how our salaries compare with other cities our size and our merit system. Mr. Sweatt said he couldn't speak for his department heads but he could tell you that several of the department heads would rather see a merit increase kept. No one is going to give up a good salary but there is going to be a morale factor if they get $3,800 to $4,000 a year raise and an employee in the line gets 4% and has no opportunity to get a merit. . Mr. Williams asked if the 10 people that aren't in the plan aren't concerned. Mr. Sweatt said they know it but they also recognize the financial impact of getting them into the plan is pretty severe. None are quitting - one (1) is retiring but not because he didn't get in the pay plan. Mrs. Jarman asked each of the council members what they consider is the most important thing that city council can give. To her, it is service and we have to compensate those who are giving that service. We ask our city employees to do things that USAA doesn't ask their people to do, such as go out and stand by the barricades when the water comes up. My point is that if you take away tools from the supervisors, how are they to do their job? Mayor Baldwin assured he did not want to take away any tools from the supervisor if that 4% increase is a tool. There is not an employee in the city that is going to leave employment of .the city because he doesn't get a merit increase this year. How many left this year due to the restructure of the pay plan. They won't leave. You don't have any problem with having 10 supervisors that are not getting what they should in this pay plan. Is that fair? Mrs. Jarman said if they accept that and if they feel that they would be put in an awkward if they get some kind of a big raise and their employees do not even get a step increase. How do they feel? . -287- Mr. Sweatt stated the department heads use the evaluation system and the merit . system as a carrot and stick - that's what is for - to reward good performance but also to counsel with those who aren't giving good performance and it is an item the department heads and supervisors use as a part of the process. Mark Marquez (personnel officer) interjected that he is one of those department heads that fall into that category and all things considered, he is looking at a 4% increase like everyone is and the opportunity, presumably for a merit increase of another 4% when his anniversary date comes up and he is willing to accept it even though his salary is still not there, but he would rather see the rest of the employees have the opportunity for a merit increase. There are a lot of folks who really look forward to that. It is an opportunity for them to sit down with their boss in an evaluation setting and get rewarded or not for what they have done. It is really important, it makes a difference. Mrs. Jarman asked if it is just the immediate supervisor who does the evaluation? Mr. Marquez said it has to go up the chain and eventually Mr. Sweatt will sign off on the evaluation, concurring or not concurring in some cases. Mr. Potempa said, "You mean you sign off on everybody's performance report in this city"? Mr. Sweatt explained that he evaluates all department heads and reviews all employee's performance evaluations. Mr. Potempa said "So, if the supervisor thinks the guy is great and doing an outstanding job and you don't, you . can yank him down a notch." Mr. Sweatt said he could. Mr. Potempa felt that was micromanaging and he didn't like that. Mr. Sweatt said he wasn't micromanaging, you (council) hired him to manage. The supervisor makes the call but if there is some reason to doubt that, he will certainly talk to the supervisor and department head and go back and look at that employee's performance. Mayor Baldwin reiterated there are 10 people who may never get to the minimum salary for their job and that isn't really fair either. Mayor Baldwin went on to say he isn't defending supervisors, he has been at the forefront on this council trying to get employee's salaries to where they ought to be and in his thinking, you do that going from 86% to 92% after everyone is where they ought to be. He doesn't have a problem with merit increases - without merit increases you don't need the evaluation. People will get whatever the cost of living is regardless. We're talking about money, we're talking about the cost of doing all that and his recommendation is to throw that money, get everybody where they ought to be and then deal with the pay plan. Without support from other members, Mayor Baldwin withdrew his recommendation. . -288- . #9 EXECUTIVE SESSION: Called under Chapter 551 Texas Government Code, Sub-Section 551.072, deliberation regarding real property. An Executive Session was held from 9:25 p.m. until 10:35 p.m. #10 Action, if any, on the above Executive Session. Mr. Greenwald moved to authorize the City Manager to pursue purchasing water rights. Mrs. Jarman seconded the motion, which carried with the following votes: AYES: Councilmembers Greenwald, Potempa, Jarman and Williams NAYS: None #11 ADJOURNMENT There being no further business to discuss, Mayor Baldwin adjourned the meeting at 10:40 p.m. . ATTEST: ~ lJ./tvuu ~~ Deputy City Secretary, City of Schertz . -289-