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02-07-2012 Amended Agenda PacketSCHERTZ CITY COUNCIL REGULAR SESSION MUNICIPAL COMPLEX COUNCIL CHAMBERS 1400 SCHERTZ PARKWAY BUILDING #4 SCHERTZ, TEXAS 78154 02-07-2012 Council Agenda AMENDED AGENDA AGENDA TUESDAY, FEBRUARY 7, 2012 AT 6:00 P.M. The City Council may, for its convenience or for the convenience of City Staff or persons in attendance, modify the order in which items on the agenda are considered by the City Council. Call to Order – Regular Session – 6:00 p.m. Invocation and Pledges of Allegiance to the Flags of the United States and State of Texas. City Events • Announcements of upcoming City Events (D. Harris/J. Bierschwale) Presentation • Presentation/discussion and possible action regarding Landmark Property designation. (John Hillert Homestead) (D. Weirtz) Hearing of Residents This time is set aside for any person who wishes to address the City Council. Each person should fill out the speaker’s register prior to the meeting. Presentations should be limited to no more than 3 minutes. Discussion by the Council of any item not on the agenda shall be limited to statements of specific factual information given in response to any inquiry, a recitation of existing policy in response to an inquiry, and/or a proposal to place the item on a future agenda. The presiding officer, during the Hearing of Residents portion of the agenda, will call on those persons who have signed up to speak in the order they have registered. Consent Agenda The Consent Agenda is considered to be 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 by the Mayor or a Councilmember. 02-07-2012 City Council Agenda Page - 2 - 1. Minutes - Consideration and/or action regarding the approval of the minutes of the Regular Meeting of January 31, 2012. 2. Resolution No. 12-R-06 – Consideration and/or action approving a Resolution appointing members to the 2012 Hal Baldwin Scholarship Committee. (J. Kessel/B. Cantu) 3. Resolution No. 12-R-09 – Consideration and/or action approving a Resolution amending an agreement with Linebarger Goggan Blair & Sampson, LLP, for Municipal Court and Warrant Collections.( J. Bierschwale/M. Spain) Discussion and/or Action Items 4. Resolution No. 12-R-10 - Consideration and/or action approving a resolution relating to establishing the City’s intention to be reimbursed by the Cibolo Valley Local Government Corporation for the prior lawful expenditure of funds from the proceeds of Tax-exempt Obligations to be issued by the Cibolo Valley Local Government Corporation for authorized purposes; authorizing other matters incident and related thereto; and providing an effective date. (J. Kessel/M. Spain) Executive Session Called under Section 551.071 Texas Government Code Litigation, pending or contemplated litigation; Section 551.072 Texas Government Code - Deliberation regarding the purchase, exchange, sale, lease, or value of real property, or real estate. Reconvene into Regular Session 5. Take any action deemed necessary as a result of the Executive Session. Requests and Announcements 6. Requests by Mayor and Councilmembers that items be placed on a future City Council agenda. 7. Requests by Mayor and Councilmembers to City Manager and Staff for information. 8. 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 9. Announcements by City Manager 02-07-2012 City Council Agenda Page - 3 - • Citizen Kudos • Recognition of City employee actions • New Departmental initiatives Adjournment CERTIFICATION I, CYNTHIA RALEIGH, DEPUTY CITY SECRETARY OF THE CITY OF SCHERTZ, TEXAS, DO HEREBY CERTIFY THAT THE ABOVE AGENDA WAS PREPARED AND POSTED ON THE OFFICIAL BULLETIN BOARDS ON THIS THE 3rd DAY OF FEBRUARY 2012 AT 4:45 P.M., WHICH IS A PLACE READILY ACCESSIBLE TO THE PUBLIC AT ALL TIMES AND THAT SAID NOTICE WAS POSTED IN ACCORDANCE WITH CHAPTER 551, TEXAS GOVERNMENT CODE. Cynthia Raleigh Cynthia Raleigh, Deputy City Secretary I CERTIFY THAT THE ATTACHED NOTICE AND AGENDA OF ITEMS TO BE CONSIDERED BY THE CITY COUNCIL WAS REMOVED BY ME FROM THE OFFICIAL BULLETIN BOARD ON _____DAY OF _______________, 2012. ____________________________Title:__________________________ This facility is accessible in accordance with the Americans with Disabilities Act. Handicapped parking spaces are available. If you require special assistance or have a request for sign interpretative services or other services please call 210 619-1030 at least 24 hours in advance of meeting. COUNCIL COMMITTEE AND LIAISON ASSIGNMENTS Mayor Baldwin Interview Board for Boards and Commissions Investment Advisory Committee ASA Commuter Rail District Board – Lone Star Alamo Area Council of Governments Cibolo Valley Local Government Corporation Schertz Seguin Local Government Corporation Mayor Pro-Tem Scagliola – Council Place 2 Animal Control Advisory Committee Interview Board for Boards and Commissions Sweetheart Advisory Committee Councilmember Fowler – Place 1 Interview Board for Boards and Commissions Schertz Housing Board Liaison Councilmember Antuna - Place 3 Audit Committee Councilmember Edwards – Place 4 Investment Advisory Committee Audit Committee Hal Baldwin Scholarship Committee Councilmember Carpenter – Place 5 TIRZ II Board Hal Baldwin Scholarship Committee Agenda No. 1 CITY COUNCIL MEMORANDUM City Council Meeting: February 7, 2012 Department: City Secretary Subject: Minutes BACKGROUND The City Council held a regular meeting on January 31, 2012. FISCAL IMPACT None RECOMMENDATION Staff recommends Council approve the minutes of the Regular Meeting of January 31, 2012. ATTACHMENT Minutes Regular meeting January 31, 2012. 01-31-2012 Minutes MINUTES REGULAR MEETING January 31, 2012 A Regular Meeting was held by the Schertz City Council of the City of Schertz, Texas, on January 31, 2012, at 6:00 p.m., in the Municipal Complex Council Chambers, 1400 Schertz Parkway, Building #4, Schertz, Texas. The following members present to-wit: Mayor Hal Baldwin Mayor Pro-Tem David Scagliola Councilmember Jim Fowler Councilmember Michael Carpenter Councilmember Cedric Edwards Councilmember George Antuna was absent. Staff Present: City Manager John Kessel Assistant City Manager David Harris Chief of Staff Bob Cantu City Attorney Michael Spain City Secretary Brenda Dennis Deputy City Secretary Cynthia Raleigh CALL TO ORDER REGULAR MEETING Mayor Baldwin called the meeting to order at 6:00 p.m. and welcomed everyone in attendance. INVOCATION AND PLEDGES OF ALLEGIANCE TO THE FLAGS OF THE UNITED STATES AND STATE OF TEXAS. Councilmember Fowler gave the invocation followed by the Pledges of Allegiance to the Flags of the United States and State of Texas. City Events Announcements of upcoming City Events (D. Harris/J. Bierschwale) Mayor Baldwin recognized Assistant City Manager David Harris who stated that the Northeast Partnership meeting will be held on February 9, 2012, at 11:30 a.m. at the Olympia Hills Golf Course and Convention Center. Mr. Harris also stated that there would be a Schertz Chamber of Commerce after-hours mixer on February 9, 2012, at 5:30 p.m. at the Schertz Civic Center sponsored by the Schertz Area Arts Council. Mayor Baldwin moved into executive session at 6:04 p.m. Executive Session Called under Section 551.071 Texas Government Code Litigation, pending or contemplated litigation; Section 551.072 Texas Government Code - Deliberation regarding the purchase, exchange, sale, lease, or value of real property, or real estate. 01-31-2012 Minutes Mayor Baldwin reconvened into regular session at 6:34 p.m. Hearing of Residents This time is set aside for any person who wishes to address the City Council. Each person should fill out the speaker’s register prior to the meeting. Presentations should be limited to no more than 3 minutes. Discussion by the Council of any item not on the agenda shall be limited to statements of specific factual information given in response to any inquiry, a recitation of existing policy in response to an inquiry, and/or a proposal to place the item on a future agenda. The presiding officer, during the Hearing of Residents portion of the agenda, will call on those persons who have signed up to speak in the order they have registered. Mayor Baldwin recognized the following who spoke regarding their issues with their homes, Pulte Homebuilders and their continued request for buy-outs from Pulte, as well as, an invitation to the City Council to an open house which will be held on Saturday, February 4, 2012, from 12:00 noon to 3:00 p.m.: • Janice Lapham, 5236 Columbia Drive • Carol Littrell, 5236 Columbia Drive • Melissa Satterfield, 5209 Storm King • Melinda Ruiz, 5408 Storm King • Brian and Peggy Benavides, 5237 Brookline • Bruce Touve, 5213 Brookline • Faye Touve, 5213 Brookline • Holli Muniz, 5145 Brookline • Molly Casas, 5228 Brookline • Ken Russell, 6034 Mule Deer • Ryan Travis, 3605 Storm Ridge • John Fitzgerald, 5304 Storm King • Pedro Frechel, 3620 Storm Ridge • Patricia Alperin, 5505 Storm King • Tricia Mattison, P.O. Box 3022, 78148, Homeowners for Better Building • Janet Ahmad, 18 Silver Horn, San Antonio, Homeowners for Better Building • Diana Taylor, 5505 Columbia Drive, who spoke indicating that she is currently working with Pulte and giving them the opportunity to fix her home. She stated the issues are between the homebuilder and the homeowner. She also requested that the pictures of her home be removed from the internet and from the WOAI news report, and if they are not removed, legal action will be taken. She expressed her concerns regarding her home and the issues that have been occurring, as well as the incorrect information that has been indicated about her home. • Jeff Camelio, 5224 Brookline, who for record, would like to keep his home on the WOAI website. 01-31-2012 Minutes Mayor Baldwin recognized City Manager John Kessel who spoke clarifying that all open records requests have been fulfilled with any information that the City has in their possession. Extensive information has been provided by the City through open records to date. Mr. Kessel gave his regrets that he will be out of town for the open house on Saturday in Fairhaven and will not be able to attend. Mr. Kessel indicated that the proper role of government in this situation is to create dialogue between two parties in a civil manner. The City has the opportunity to help and continues to offer this help. City Council meetings are an opportunity for the citizens to have their voice heard. Mr. Kessel indicated that Pulte and the homeowners need to meet and that the City would provide opportunities for these meetings. He encouraged citizens to know that they do have representation from the City and that representation does act in meaningful ways to the limits that are allowed regarding a civil manner and that can be resolved at a City level. Mr. Kessel indicated that having an agenda item placed on the Council agenda does not mean that there would be back and forth dialogue. In fact, by adding an item to the agenda and not utilizing the public forum, citizens would have less opportunity to express their concerns. Civil issues between two private parties are not an action item by the City Council. Mr. Kessel encouraged the homeowners to continue to have dialogue with Pulte, and that citizens are welcome to attend Council meetings, and to speak during the public forum. Mayor Baldwin spoke indicating that in regards to the open house on Saturday, the City has to follow the laws of the Open Meetings Act, in regards to having a quorum, and the meeting would have to be posted in Fairhaven. Mayor Baldwin requested that each Councilmember take a time frame to visit individually. The tour would need to include some of the worst homes instead of all 70 homes to accommodate everyone’s schedule. Mayor Baldwin clarified that the “Hearing of Residents” section on the agenda absolutely means the citizens of this community. He does not have a problem with someone from outside of the community to speak; however, he will not allow for the non-resident to return remarks on comments made by a resident. Mayor Baldwin recognized Councilmember Edwards who gave his regrets, that he would not be able to attend the open house on Saturday. Mayor Baldwin recognized Schertz Economic Development Corporation President Harry Whitney who introduced Matthew Duke, the most recent appointment to the Schertz Economic Development Corporation. Consent Agenda The Consent Agenda is considered to be 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 by the Mayor or a Councilmember. 01-31-2012 Minutes 1. Minutes - Consideration and/or action regarding the approval of the minutes of the Regular Meetings of January 17, 2012 and January 24, 2012. 2. Ordinance No. 12-D-04 – Consideration and/or action approving an Ordinance revising the speed limit on Hubertus Road from IH 35 frontage road to FM 482 to 30 mph. Final Reading (J. Kessel/D. Letbetter) The following caption was read into record: ORDINANCE NO. 12-D-04 AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS PROVIDING THAT THE CODE OF ORDINANCES OF THE CITY OF SCHERTZ, TEXAS BE AMENDED BY REVISING SECTION 86-115, MAXIMUM LIMITS GENERALLY; AND PROVIDING A REPEALING CLAUSE. 3. Ordinance No. 12-D-05 – Consideration and/or action approving an Ordinance revising the speed limit on Friesenhahn Lane from IH 35 frontage road to FM 482 to 30 mph. Final Reading (J. Kessel/D. Letbetter) The following caption was read into record: ORDINANCE NO. 12-D-05 AN ORDINANCE BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS PROVIDING THAT THE CODE OF ORDINANCES OF THE CITY OF SCHERTZ, TEXAS BE AMENDED BY REVISING SECTION 86-115, MAXIMUM LIMITS GENERALLY; AND PROVIDING A REPEALING CLAUSE. 4. Resolution No. 12-R-08 – Consideration and/or action approving a Resolution calling a Joint General Election with the City of Cibolo to be held May 12, 2012, for the purpose of electing Councilmembers for Place 1, Place 2, and for the Mayor’s position; making provisions for the conduct of a Joint Election; contracting with the Election Administrator of Guadalupe County to conduct this election. (J. Kessel/B. Dennis) The following caption was read into record: RESOLUTION NO. 12-R-08 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS, CALLING A JOINT ELECTION WITH THE CITY OF SCHERTZ, AND THE CITY OF CIBOLO TO BE HELD ON MAY 12, 2012 FOR THE PURPOSE OF ELECTING COUNCILMEMBERS FOR 01-31-2012 Minutes PLACE 1, PLACE 2, AND FOR MAYOR FOR SAID CITY; MAKING PROVISION FOR THE CONDUCT OF A JOINT ELECTION; CONTRACTING WITH THE ELECTIONS ADMINISTRATOR OF GUADALUPE COUNTY TO CONDUCT THIS ELECTION. 5. Appointments/ Reappointments and Resignations to City Boards, Commissions and Committees – Consideration and/or action regarding appointments/reappointments and resignations to City Boards, Commissions, and Committees. • Ratification of the resignation of Ms. Holly McBrearty from the Economic Development Corporation Board. • Appointment of Mr. Matthew Duke as regular member to the Economic Development Corporation Board. • Appointment of Ms. Barbara Hall as regular member to the Historical Preservation Commission. Mayor Baldwin recognized Councilmember Carpenter who moved, seconded by Councilmember Edwards to approve consent agenda items 1 through 5. The vote was unanimous. Motion carried. Reconvene into Regular Session 6. Take any action deemed necessary as a result of the Executive Session. No action taken. Requests and Announcements 7. Requests by Mayor and Councilmembers that items be placed on a future City Council agenda. No requests given by Mayor or Council. 8. Requests by Mayor and Councilmembers to City Manager and Staff for information. No requests given by Mayor or Council. 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 01-31-2012 Minutes • Upcoming City Council agenda items No announcements by Mayor and Council. 10. Announcements by City Manager Mayor Baldwin recognized City Manager John Kessel who stated that he was able to attend a meeting with Phil Wilson, the new TxDOT Director. He indicated that TxDOT’s 20/30 plan projected costs are only fulfilled by half of the funds at this point, and that TxDOT will be reassessing their future transportation needs. TxDOT will also be reorganizing and modernizing their organization. Mr. Kessel read a note he received praising the City Library and Librarian Gail Douglas. Adjournment Mayor Baldwin adjourned the meeting at 7:50 p.m. ___________________________________ Mayor ATTEST: _______________________________________ Cynthia Raleigh, Deputy City Secretary Agenda No. 2 CITY COUNCIL MEMORANDUM City Council Meeting: February 7, 2012 Department: City Manager Subject: Resolution No. 12-R-06 - Hal Baldwin Scholarship BACKGROUND By Resolution No. 09-R-03, the City Council established the Hal Baldwin Scholarship to encourage graduating high school seniors who live in Schertz to pursue careers in public service. Staff recommends the following advisory committee be appointed for 2012: Don Taylor, Michael Carpenter, Cedric Edwards, Gina Agee, and Michael Spain. FISCAL IMPACT $1,000 for 2012 scholarship RECOMMENDATION Adoption of Resolution No. 12-R-06 ATTACHMENT Resolution No. 12-R-06 1 RESOLUTION NO. 12-R-06 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS CREATING AND PROVIDING 2012 FUNDING TO THE HAL BALDWIN SCHOLARSHIP, AND APPOINTING MEMBERS OF THE 2012 HAL BALDWIN SCHOLARSHIP COMMITTEE, AND RESOLVING OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the City Council of the City of Schertz, Texas has created the Hal Baldwin Scholarship to honor Mayor Hal Baldwin for his many years of public service to the City of Schertz by awarding deserving graduating high school seniors who live in the City of Schertz who desire to pursue a career in public service; and WHEREAS, the City Council desires to provide funding for 2012 for such Scholarship; and WHEREAS, the City Council desires to name a 2012 advisory committee to recommend potential scholarship winners to the City Council. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS: Section 1. The City hereby designates the amount of $1,000 of unencumbered funds in the General Fund of the City to support the Hal Baldwin Scholarship program for 2012, and the City further encourages all those who support such Scholarship program to make contributions to the City designated for such purpose. Section 2. The City hereby authorizes the following five persons as members of the 2012 Hal Baldwin Scholarship Committee (the “Committee”) to (i) receive applications for the Hal Baldwin Scholarship, and (ii) recommend potential Hal Baldwin Scholarship award winners to the City Council: Don Taylor, Michael Carpenter, Cedric Edwards, Gina Agee, and Michael Spain. Members of the Committee shall serve at the pleasure of the City Council and may be removed at any time, with or without cause, by the City Council. The Committee’s and Council’s proposed schedule with respect to the 2012 Hal Baldwin Scholarship is attached as Exhibit A. Section 3. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 4. All resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters ordained herein. Section 5. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. 2 Section 6. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 7. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, as amended, Texas Government Code. Section 8. This Resolution shall be in force and effect from and after its final passage. PASSED AND APPROVED on the 7th day of February, 2012. Mayor Pro-Tem ATTEST: City Secretary (City Seal) A-1 EXHIBIT A PROPOSED TIMELINE FOR 2012 HAL BALDWIN SCHOLARSHIP February 2012 • Scholarship Advisory Committee to meet to: - Decide essay topic - Review timeline (recommend any additional changes needed) - Review scholarship application (recommend any changes needed) • Once approved, Media Relations to advertise: - Schertz Tales - Website - Herald • Send letters out to area high schools April 2012 • Monday, April 30th: o Cut-off date for scholarship application May 2012 • Tuesday, May 8th: o Distribute binder with full set of applications/judging sheets to Committee members • Tuesday, May 15th: o Scholarship Advisory Committee to meet before Council Meeting: - Select winner to be recommended to City Council • Tuesday, May 22nd: o Present award to winning student: - At a Council Meeting (get plaque engraved with his/her name) August/September 2012 • Student will need to present scholarship donor sheet to City from his/her College/ university prior to receiving scholarship money 50496753.1 Agenda No. 3 CITY COUNCIL MEMORANDUM City Council Meeting: February 7, 2012 Department: Municipal Court Subject: Resolution No. 12-R-09 – Collection Agency for Outstanding Warrants BACKGROUND: On October 25, 2011, the City Council authorized a contract with Linebarger Goggan Blair & Sampson, LLP, to collect on outstanding warrants. The contract originally applied to outstanding warrants for the period January 1, 2005 through December 31, 2008. The amendment would extend the period of collection for an additional period and authorize the City Manager to approve a further extension if he determines the services to the City are satisfactory. FISCAL IMPACT None. (A 30% service fee will be added to the defendant’s citation.) RECOMMENDATION Approve Resolution No. 12-R-09 ATTACHMENTS Resolution No. 12-R-09 50496761.1 1 RESOLUTION NO. 12-R-09 A RESOLUTION BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS AUTHORIZING AN AMENDMENT TO AN AGREEMENT WITH LINEBARGER GOGGAN BLAIR & SAMPSON, LLP, AND OTHER MATTERS IN CONNECTION THEREWITH WHEREAS, the City Council of the City of Schertz (the “City”) has previously authorized an agreement with Linebarger Goggan Blair & Sampson, LLP relating to collecting on outstanding warrants for the period January 1, 2005 through December 31, 2008; and WHEREAS, the City staff recommends amending the Agreement to include outstanding warrants for an additional period; and WHEREAS, the City Council has determined that it is in the best interest of the City to amend the Agreement to include an additional period. BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: Section 1. The City Council hereby authorizes the City Manager, or his designee, to execute and deliver an amendment to the Agreement with Linebarger Goggan Blair & Sampson, LLP relating to collecting on outstanding warrants for a period beginning when warrants become past 90 days after March 1, 2012 and thereafter. In addition, if the City Manager determines that the services provided to the City pursuant to the Agreement, as amended, are satisfactory, the City Manager is authorized to execute and deliver a further amendment to the Agreement to cover the period January 1, 2009 through February 29, 2012. Section 2. The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the City Council. Section 3. All resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein. Section 4. This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. Section 5. If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the City Council hereby declares that this Resolution would have been enacted without such invalid provision. Section 6. It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject 50496761.1 2 matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, Texas Government Code, as amended. Section 7. This Resolution shall be in force and effect from and after its final passage, and it is so resolved. In addition, if the City Manager determines that the services provided to the City, pursuant to the Agreement, as amended, are satisfactory, the City manager is authorized to execute and deliver a further amendment to the Agreement to cover the period January 1, 2009 through February 29, 2012. PASSED AND ADOPTED, this 7th day of February, 2012. CITY OF SCHERTZ, TEXAS Mayor ATTEST: City Secretary (CITY SEAL) 50496767.1 Agenda No. 4 CITY COUNCIL MEMORANDUM City Council Meeting: February 7, 2012 Department: Finance Subject: Resolution No. 12-R-10 - Cibolo Valley Local Government Corporation – Reimbursement for City’s Contribution BACKGROUND Goal Potential reimbursement to the City of its initial contribution to the Cibolo Valley Local Government Corporation. Community Benefit Return of funds to the City. Summary of Recommended Action The City is one of five participating members of the Cibolo Valley Local Government Corporation (the “CVLGC”). Pursuant to a Memorandum of Understanding among the CVLGC and the member cities, each member city is to contribute $250,000 to the CVLGC for start-up costs: $125,000 paid on or before January 15, 2012 and $62,500 paid on or before April 2, 2012 and July 2, 2012. The CVLGC is expected to issue revenue bonds anticipated to be in a principal amount not to exceed $32,000,000, to finance its initial project, which includes the start-up costs funded by the participating member cities. Federal law permits the CVLGC to reimburse itself, and, in turn, the member cities for certain project costs paid by the CVLGC and the member cities prior to the issuance of the bonds. The start-up costs funded by the City and the other member cities qualify for such reimbursement if the CVLGC and the member cities each adopt a “Reimbursement Resolution”. Resolution No. 12-R-10 meets those requirements. To further qualify for the reimbursement, the reimbursement must occur within eighteen months from the later of (i) the date of the expenditures or (ii) the date of 50496767.1 the bond financed project is placed in service, but in no event more than three years after the expenditure. FISCAL IMPACT Reimbursement of $250,000 RECOMMENDATION Approval of Resolution No. 12-R-10 ATTACHMENT Resolution No. 12-R-10 95428673.3 RESOLUTION NO. 12-R-10 A RESOLUTION RELATING TO ESTABLISHING THE CITY’S INTENTION TO BE REIMBURSED BY THE CIBOLO VALLEY LOCAL GOVERNMENT CORPORATION FOR THE PRIOR LAWFUL EXPENDITURE OF FUNDS FROM THE PROCEEDS OF TAX-EXEMPT OBLIGATIONS TO BE ISSUED BY THE CIBOLO VALLEY LOCAL GOVERNMENT CORPORATION FOR AUTHORIZED PURPOSES; AUTHORIZING OTHER MATTERS INCIDENT AND RELATED THERETO; AND PROVIDING AN EFFECTIVE DATE WHEREAS, the City Council (the Governing Body) of the City of Schertz, Texas (the City), acting by and through the Cibolo Valley Local Government Corporation (the Issuer) has entered into or will enter into various contracts pertaining to the expenditure of lawfully available funds of the Issuer to finance the costs associated with (i) constructing, acquiring, purchasing, renovating, equipping, enlarging, and improving the utility system that will be owned, operated, and maintained by the Cibolo Valley Local Government Corporation and that is commonly known as the Guadalupe Project, and the purchase of materials, supplies, equipment, land, and rights-of-way for authorized needs and purposes relating to these utility system improvements (the Construction Costs), (ii) the payment of various engineering costs, including design testing, design engineering, and construction inspection related to the Construction Costs (the Engineering Costs), (iii) the payment of various architectural costs, including preparation of plans and specifications and various other plans and drawings related to the Construction Costs (the Architectural Costs), and (iv) the payment of various administrative costs, including the fees of bond counsel, financial advisor, project manager, other professionals, and bond printer (the Administrative Costs) [the Construction Costs, the Engineering Costs, the Architectural Costs, and the Administrative Costs collectively constitute the costs of the Issuer’s project that is the subject of this Resolution (the Project)]; and WHEREAS, the provisions of Section 1201.042, as amended, Texas Government Code (Section 1201.042) provide that the proceeds from the sale of obligations issued to finance the acquisition, construction, equipping, or furnishing of any project or facilities, such as the Project, may be used to reimburse the Issuer for costs attributable to such project or facilities paid or incurred before the date of issuance of such obligations; and WHEREAS, the United States Department of Treasury (the Department) released Regulation Section 1.150-2 (the Regulations) which establishes when the proceeds of obligations are spent and therefore are no longer subject to various federal income tax restrictions contained in the Internal Revenue Code of 1986, as amended (the Code); and WHEREAS, the Issuer intends to reimburse itself (and, in turn, the City), within eighteen months from the later of the date of expenditure or the date the property financed is placed in service (but in no event more than three years after the original expenditures are paid), for the prior lawful capital expenditure of funds from the proceeds of one or more series of tax-exempt obligations (the Obligations) that the Cibolo Valley Local Government Corporation currently -2- 95428673.3 contemplates issuing in the principal amount of not to exceed $32,000,000 to finance a portion of the costs of the Project; and WHEREAS, under the Regulations, to fund such reimbursement with proceeds of the Obligations, the Issuer must declare its expectation ultimately to make such reimbursement before making the expenditures; and WHEREAS, the City hereby finds and determines that the reimbursement for the prior expenditure of funds of the City is not inconsistent with the City’s budgetary and financial circumstances; and WHEREAS, the Governing Body hereby finds and determines that the adoption of this Resolution is in the best interests of the citizens of the City; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SCHERTZ, TEXAS THAT: SECTION 1: This Resolution is a declaration of intent to establish the City’s reasonable, official intent under section 1.150-2 of the Regulations and Section 1201.042 for the Issuer to reimburse itself (and, in turn, the City) from certain of the proceeds of the Obligations for any capital expenditures previously incurred (not more than 60 days prior to the date hereof) or to be incurred with respect to the Project from the City’s General Fund or other lawfully available funds of the Issuer. SECTION 2: The City intends that the Issuer will issue the Obligations and allocate within 30 days after the date of issuance of the Obligations the proceeds therefrom to reimburse the Issuer (and, in turn, the City) for prior lawful expenditures with respect to the Project in a manner to comply with the Regulations. SECTION 3: The reimbursed expenditure will be a type properly chargeable to a capital account (or would be so chargeable with a proper election) under general Federal income tax principles. SECTION 4: The City intends that the Issuer will otherwise comply, in addition to those matters addressed within this Resolution, with all the requirements contained in the Regulations. SECTION 5: This Resolution may be relied upon by the appropriate officials at the Office of the Attorney General for the State of Texas and establishes compliance by the Issuer with the requirements of Texas law and the Regulations. SECTION 6: With respect to the proceeds of the Obligations allocated to reimburse the Issuer (and, in turn, the City) for prior expenditures, the Issuer shall not employ an abusive device under Treasury Regulation Section 1.148-10, including using within one year of the reimbursement allocation, the funds corresponding to the proceeds of the Obligations in a manner that results in the creation of “replacement proceeds”, as defined in Treasury Regulation Section 1.148-1, of the Obligations or another issue of tax-exempt obligations. -3- 95428673.3 SECTION 7: The recitals contained in the preamble hereof are hereby found to be true, and such recitals are hereby made a part of this Resolution for all purposes and are adopted as a part of the judgment and findings of the Governing Body. SECTION 8: All ordinances and resolutions, or parts thereof, which are in conflict or inconsistent with any provision of this Resolution are hereby repealed to the extent of such conflict, and the provisions of this Resolution shall be and remain controlling as to the matters resolved herein. SECTION 9: This Resolution shall be construed and enforced in accordance with the laws of the State of Texas and the United States of America. SECTION 10: If any provision of this Resolution or the application thereof to any person or circumstance shall be held to be invalid, the remainder of this Resolution and the application of such provision to other persons and circumstances shall nevertheless be valid, and the Governing Body hereby declares that this Resolution would have been enacted without such invalid provision. SECTION 11: It is officially found, determined, and declared that the meeting at which this Resolution is adopted was open to the public and public notice of the time, place, and subject matter of the public business to be considered at such meeting, including this Resolution, was given, all as required by Chapter 551, as amended, Texas Government Code. SECTION 12: This Resolution shall be in force and effect from and after its final passage, and it is so resolved. [The remainder of this page intentionally left blank] -4- 95428673.3 PASSED, ADOPTED AND APPROVED on this the 7th day of February, 2012. CITY OF SCHERTZ, TEXAS Mayor ATTEST: City Secretary (CITY SEAL)