CITY OF
LAREDO
CITY COUNCIL MEETING
M-2002-R-09
LAREDO, TEXAS
78040
MAY
8, 2002
5:30 P.M.
I. CALL
TO ORDER
With a
quorum present, Mayor Elizabeth G. Flores called the meeting to order.
II. PLEDGE
OF ALLEGIANCE
Mayor Elizabeth G. Flores led
in the Pledge of Allegiance.
III. ROLL CALL
In attendance:
Elizabeth G. Flores, Mayor
Alfredo Agredano, Council
Member, District I
Louis H. Bruni, Council
Member, District II
John C. Galo, Council
Member, District III
Johnny Amaya, Council
Member, District IV
Eliseo Valdez, Jr., Mayor
Pro Tempore, District V
Joe A. Guerra, Council
Member, District VI
Jose A. Valdez, Jr., Council
Member, District VII
Juan Ramirez, Council
Member, District VIII
Gustavo Guevara, Jr., City
Secretary
Larry Dovalina, City
Manager
Jaime Flores, City
Attorney
IV.
MINUTES
Approval of the minutes of
February 19, 2002, March 25, 2002, and April 22, 2002.
Motion to approve.
Moved: Cm. Galo
Second: Mayor Pro Tempore E. Valdez, Jr.
For: 8 Against: 0 Abstain: 0
V. COMMUNICATIONS
AND RECOGNITIONS
Announcements
Cm. Agredano reported on the
Washington trip last week which involved discussion on national concerns
regarding security at our borders and international bridges.
Cm. Bruni submitted a report
from the Southwest Texas Rain Enhancement Association meeting held on April 17,
2002. He also submitted a copy of the
Association’s Financial Statements which reflects the financial position of the
Association as of December 31, 2001.
Cm. Galo submitted a letter
from a city employee regarding the Webb County Appraisal District.
Mayor Pro Tempore Valdez, Jr.
stated that he was one of the officials that inspected the airline facilities
for Mexicana and Azteca Airlines out of Mexico City. He said he is very pleased because the efforts of City Council
and the Airport Advisory Committee have paid off and jet service has finally
arrived to Laredo. He urged the
community to support these enterprises in order to ensure that jet service will
be here to stay.
Cm. Guerra stated that the
widening of Del Mar Boulevard is progressing steadily. He also urged those motorists in the area to
drive with caution while construction is going on. He further mentioned that there will be an additional parking lot
constructed for those residents who attend St. Patrick’s Church.
Cm. Ramirez stated that
during the Washington trip, he presented Senator Kennedy with a plaque
recognizing his efforts in assisting children and elderly throughout the
country and, particularly, in South Texas.
Invitations
Toni Gamboa, representing the
March for Jesus Committee, invited Mayor Flores, the Council Members, and the
general public to join them on May 18, 2002, at 8:30 a.m. at the Civic Center
parking lot for the March for Jesus 2002.
This event will also honor our local heroes including military veterans,
local firefighters, and law enforcement officers.
Recognitions
None.
Communiqués
a. Presentation
by Joe Garcia, President of the Streets of Laredo, regarding Jamboozie
Festival.
Joe Garcia reported on the success of this year’s festival. He mentioned that the attendance was beyond
the organization’s expectations. He
thanked Mayor Flores and the Council Members for all their support which made
this event a great success.
VI. APPOINTMENTS TO COMMISSIONS, BOARDS AND
COMMITTEES
a.
Appointment by Council Member John C. Galo of Jose Diaz de
Leon to the Vehicles for Hire Ad Hoc Committee.
Motion to approve.
Moved: Cm. Agredano
Second: Cm. Amaya
For: 8 Against: 0 Abstain: 0
VII. PUBLIC HEARINGS
1. Public hearing regarding the City Review Committee’s recommendation on the proposal for privatization of the City of Laredo’s water and wastewater operations.
Motion to open public hearing.
Moved: Cm. Galo
Second: Cm. Agredano
For: 8 Against: 0 Abstain: 0
Dr. Hector Farias, representing VIDA, stated that he disagrees with the City Attorney in his explanation that the City has fulfilled all the requirements to allow for negotiations for a contract. He commented that in regards to the proposal for privatization, the City did not hold a public hearing prior to selecting United Water Services.
Mayor Flores outlined the steps that the City has followed to reach this point.
1. First of all, the formal process was started when the City issued a Request for Proposal (RFP) on August 8, 2000.
2. Then, pursuant to the terms of that RFP, the City formed a Review Committee to evaluate the responses to the RFP and to develop a recommendation to City Council.
3. To perform the evaluation, the Review Committee then structured its own methodology which involved analysis of cost, technical, and business considerations. The Review Committee utilized reports from consultants in reaching their recommendation. Specifically, the consultants were: Competitive Government Strategies, Inc. (for pricing aspects); THC Utility Management Specialists (for technical aspects); and Hawkins, Delafield and Wood, Attorney at Law (for business and contractual considerations).
4. The City Review Committee then presented its evaluation report and recommendation to the Water Issues Committee and the Privatization Oversight Committee and subsequently, to the full City Council on April 22, 2002.
5. On April 22, in fact, Council received a report from Attorney Rick Sapir of Hawkins, Delafield and Wood, outlining the respective values according to the evaluation categories.
6. Council, following the process in the RFP, studied all of the reports and the Review Committee’s recommendation, and based upon their individual analysis, found that it was in the best interest of the City to proceed with negotiations for a contract with United Water Services.
7. Today, in accordance with the requirement which we placed in the RFP to hold public hearings once a recommendation is made to select a proposal, we want to hear from the public regarding the Review Committee’s recommendation and the selected proposal and proposed contract with United Water Services, and with that I would like to move on to the proceedings.
Rick Sapir, with Hawkins, Delafield and Wood, reported that following review of the evaluation reports, the City Council had some discussion with him and then decided to move forward with United Water. In its judgment, the City Council felt that it would be in the best interest of the City. He went on to discuss some of the contract terms that the vendor has agreed to and which are beneficial to the City.
1. The company has agreed to perform all the management services for a guaranteed price. That price will only increase based upon an inflation index and based upon pre-negotiated increases related to growth in the system.
2. The company has agreed to various performance guarantees. With respect to these guarantees that the company is giving us, if the company does not meet the guarantees, not only will they have to pay damages, but they will also pay liquidated damages to the City for the harm inflicted for their failure to perform.
3. The contract will allow the City, in its own discretion, the right to renew the contract for an additional five years on the same terms and conditions agreed to today.
4. The company will offer employment to all the employees that work on these management services for equal or better wages and benefits, equal or better positions, and no layoff policy.
5. There will be an Employee Issues Committee formed to make sure that the company is complying with all employee-related issues in the contract.
6. The company will pay the first $15,000.00 of all corrective maintenance work that needs to be done in the system.
7. The company will guarantee a maximum of electricity utilization so if they use electricity above what they guarantee, they will be responsible for paying the cost of that electricity.
8. The company will be offering employment to the utility construction crews will not be able to charge the City for the labor done on capital improvements.
9. The company has agreed to a very strong guarantee agreement that will guarantee all the obligations of the company.
10. The contract will allow for the City to terminate the service agreement at any time, for any reason, even if the company is not in breach by paying a stated termination fee.
11. The company will supply a $2,000,000.00 letter of credit to the City that the City can draw upon in the event of a breach of the contract or in the event the company otherwise owes the City money.
12. The company will replace meters on an accelerated basis. This program will require all meters under one inch to be replaced if they are ten years of age by two years into the contract. Also, meters greater than one inch have to be calibrated and serviced annually.
Richard Geissler stated that he came to urge the City Council not to abandon this issue but to postpone it.
Bill Skeen stated that he is in favor of privatization simply because Laredo is growing. The City needs to spend $50,000,000.00 to add water and waste water systems to the current system in order for the City to continue with the growth. He mentioned that it is very important for the City to be able to take on this project in order to save monies that can be used to help with the City’s infrastructure and the secondary source of water.
Jorge Enriquez, Utilities Department worker, stated that his concern is his fellow workers. There are some employees who have devoted themselves to the water system for over 13 years who stand to lose their seniority. Also, regarding the hiring practices, the employees are not sure whether they will keep their same positions. He asked if the employees have to re-apply or are they being hired in the same position they currently hold.
Rick Sapir reported that there is a specific provision within the contract that is called “crediting years of service and accrued time” that deals with this issue. It provides for the company recognizing each transferred employee’s years of service with the City to time of the commencement date without any regard to any annual leave, sick leave, etc. The provision also allows for the company to determine eligibility for investing in the company’s benefits and to determine eligibility for amounts of vacation leave, sick leave, and other payroll policies of the company. With respect to being re-hired to the same position, the company will offer full-time regular employment to all the managed designated employees. The offer of employment shall be unconditional and should not be subject to health, competency, or any other tests. Offers of employment shall be for positions or responsibilities substantially similar in nature to the positions or responsibilities of the employee under the City’s employ, and no offer of employment shall be for a position lower than that held by the employee at the time of the offer.
Beto Ramirez, Interim Utilities Director, stated that an employee who has been with the City for 14 years and would want to retire after completing six years of service with the company would not be eligible for retirement. He explained that the Texas Municipal Retirement System works independently and the employee would, therefore, not be credited for the years of employment with United Water.
Dan Migura, Administrative Services Director, reported that, in regards to those employees who have 13 or 14 years of service with the City, he identified about 40 employees that would fall in the category of 4 to 5 years and 15 to 20 years. He mentioned that TMRS requires an employee to be in the system and these employees can essentially leave the City employment and still participate in the system. He pointed out that they can also start a new pension plan with the company. He stated that the City allows for an employee to retire at any age after completion of 20 years of service or 60 years of age with five years vested. The company’s plan allows for retirement at age 65 and they have other requirements that must be met. He explained the concern from those City employees who would be eligible for retirement in 6 or 7 years. The committee and staff have carved out those employees that have 15 years of service or more and placed them in a group referred to as managed employees. As managed employees, they will continue to enjoy the TMRS benefit. At the point where they reach the 20 years, they can choose to retire or they can choose to leave their money there. At that point in time, they go into the company as a non-managed employee and continue with the company benefits.
Jim Creedon, with United Water, explained that the pension issue is a complex one to explain. The question involving those 4 employees may not add up to having a greater value if they choose to work with United Water. The employees will come over with the number of years of service that they currently have. The company’s requirement is the 65 years of age for retirement eligibility, but there is also the 55 years with 20 years of service.
Gary Miller, with OMI/Thames, wanted to clarify a number of points. He stated that the purpose of the public hearing was to discuss the recommendation on the proposal for privatization. Also, there was a specific RFP and selection criteria laid out in the RFP for the companies to put forward in their proposal. He stated that the process was fair and the firms competed in good faith. He mentioned that the proposals were ranked after extensive evaluation by the consultants, and there was a clear differentiation in the proposals submitted.
Motion to close public hearing and introduce.
Moved: Cm. Galo
Second: Cm. Bruni
For: 8 Against: 0 Abstain: 0
Ordinance Introduction: City Council
2. Public hearing granting Reliant Energy Entex, a division of Reliant Energy Resources Corp., and its successors, the right, privilege and franchise to construct, lay, maintain and operate pipelines and gas mains in, under, over, across and along, and to use present and future streets, alleys, public thoroughfares and grounds of the City of Laredo, for the purpose of transporting, distributing and selling gas (natural, artificial or mixed) for all purposes for which gas is or may be used to the municipality and inhabitants of said City of Laredo, Texas, and to any other person or persons, for a term of twenty years; providing for the manner of acceptance of this franchise by Entex; providing for payment by Entex to City for the rights and privileges granted by this franchise; and making miscellaneous provisions in connection therewith.
Motion to open public hearing.
Moved: Cm. Galo
Second: Mayor Pro Tempore E. Valdez, Jr.
For: 8 Against: 0 Abstain: 0
There was no public input.
Motion to close public hearing and introduce.
Moved: Cm. Galo
Second: Mayor Pro Tempore E. Valdez, Jr.
For: 8 Against: 0 Abstain: 0
Ordinance Introduction: City Council
3. Public hearing and introductory ordinance amending and revising the 2000 International Fire Code by adding Section 105, and amending Sections 3402, 3406, and Appendix H to provide for Regulation of Mobile Fueling via Amendment of Section 3406 of Chapter 34, “Flammable and Combustible Liquids” of the Code of the City of Laredo; providing for the issuance of permits, that this ordinance be cumulative, severability, a saving clause, publication, and effective date.
Motion to open public hearing.
Moved: Cm. Galo
Second: Cm. Agredano
For: 8 Against: 0 Abstain: 0
There was no public input.
Motion to close public hearing and introduce.
Moved: Cm. Agredano
Second: Cm. J. Valdez, Jr.
For: 8 Against: 0 Abstain: 0
Ordinance Introduction: City Council
4. Public hearing and introductory ordinance
authorizing the City Manager to amend the City of Laredo FY 2001-2002 annual
budget in the amount of $65,000.00 to continue the renovations and
modifications to building number 60 (16,000 sq. ft.) located at the 4800 block
of Maher Avenue. The Laredo Police
Department leases this building from the Laredo International Airport. Modifications are needed to expand the
fiber optic cabling, re-wire cat 5 voice/data line for the entire building,
secure property/evidence warehouse, and replace the roof. Funding for the project is available through
the Laredo Police Department Trust Fund Opening Balance.
Motion to open public hearing.
Moved: Cm. Galo
Second: Cm. Agredano
For: 8 Against: 0 Abstain: 0
There was no public input.
Motion to close public hearing and introduce.
Moved: Cm. J. Guerra
Second: Cm. Agredano
For: 8 Against: 0 Abstain: 0
Ordinance Introduction: City Council
5. Public hearing and introductory ordinance amending
the City of Laredo’s 2001-2002 annual budget by increasing estimated revenues
and appropriations in the Ryan Street Railroad Bridge Conversion and Zacate
Creek Pedestrian and Bicycle Facility Project accounts by $571,200.00 and
authorizing the City Manager to implement said budget; providing for
publication and effective date.
Motion to open public hearing.
Moved: Cm. Galo
Second: Cm. J. Guerra
For: 8 Against: 0 Abstain: 0
There was no public input.
Erasmo Villarreal, Community Development Director, reported that he has met with the consultant of the Ryan Street Bridge project. The consultant has provided preliminary designs for the project and he has been given additional direction on how to continue with the design in order to make this project whole.
Motion to close public hearing and introduce.
Moved: Mayor Pro Tempore E. Valdez, Jr.
Second: Cm. J. Guerra
For: 8 Against: 0 Abstain: 0
Ordinance Introduction: Mayor Pro Tempore E. Valdez, Jr.
6. Public hearing and introductory ordinance
amending Ordinance 2001-O-219 and authorizing the standardization in the manner
by which bridge toll fares are tabulated for all southbound vehicular
traffic. As further described in
Exhibit “A” and hereby repealing all conflicting sections in all Ordinances
currently in effect.
Motion to open public hearing.
Moved: Cm. Galo
Second: Mayor Pro Tempore E. Valdez, Jr.
For: 8 Against: 0 Abstain: 0
There was no public input.
Motion to close public hearing and introduce.
Moved: Cm. Agredano
Second: Cm. Bruni
For: 8 Against: 0 Abstain: 0
Ordinance Introduction: City Council
7. Public hearing and
introductory ordinance authorizing the City Manager to amend the FY 2001-2002 annual
budget in the amount of $18,020.00 in additional funds for the Medicaid
Administrative Cost (MAC) Project of the City of Laredo Health Department for
the period beginning October 1, 2001, through September 30, 2002.