Courtesy Mygnonne T
MINUTES OF MEETING
CITY OF GLEN ROSE
CITY COUNCIL & 4-B TAX ADVISORY BOARD
JULY 6, 2009 – 5:30 PM
COUNCIL CHAMBERS – TOWN HALL
MAYOR PAM MILLER CALLED THE MEETING TO ORDER AT 5:31 PM WILL ALL MEMBERS OF COUNCIL, MAYOR PRO-TEM RICKY VILLA, CHRIS BRYANT, BARBARA MITCHELL, BOB STRICKLIN AND ROCKY TERRY PRESENT. ALSO IN ATTENDANCE WERE ALL MEMBERS OF THE 4B ADVISORY BOARD: PRESIDENT CONNALLY MILLER, ACTING VICE PRESIDENT RONALD BRUCE, ACTING SECRETARY CRAIG DODSON, DARRELL BEST, CHRIS BRYANT, MIKE JONES AND SUE OLDENBURG.
Copy of Agenda:
1. Workshop on funding of Certificates of Obligation:
A. Amount
B. Responsibilities
i. City
ii. 4B Advisory Board
2. Legal Counsel: Discuss/take action on Legal Counsel for the 4B EDC.
3. Executive Session: The Board of Directors of the Glen Rose 4B Economic Development Corporation and the City Council of the City of Glen Rose reserve the right to meet in a closed session on any of the following items should the need arise and if applicable, pursuant to authorization by Texas Government Code, Sections 551.071 (consultation with attorney), 551.072 (deliberations about real property), 551.073 (deliberations about gifts and donations), 551.074 (personnel matters), 551.076 (deliberations about security devices), 551.087 (economic development), 418.183 (homeland security).
4. Action on Executive Session.
Action on Agenda Items:
1. Workshop: Mayor Miller introduced Jim Sabonis, investment counselor with First Southwest Company, who said the amount of the Certificates of Obligation funding would be up to $4 million, a figure that was agreed upon by the 4B Board and the City Council. Decreasing that amount would decrease the scope of the projects. The way the bond is written, “parks” could include just about anything, including recreational facilities, existing parks, trails, ball fields, or proposed or enhanced park properties. Mayor Miller pointed out that it could include anything that either the 4B Board or the City Council has talked about. She opened the floor for questions to Mr. Sabonis.
Darrell Best asked why the Resolution is written so narrowly that it only applies to parks. Mr. Sabonis said that parks and park improvement is what the 4B had originally stated their goal to be.
Craig Dodson asked what is the purpose of issuing the CO’s to the City rather than the 4B Corporation. Mr. Sabonis replied that the City has a better credit rating and credibility than the 4B. The intention is that the City and 4B would enter into a contract whereby the City would issue the CO’s and the 4B would transfer funds to the City to make the debt service payments. The contract document is in the process of being drawn up at this time, he added. Information gathered at this meeting from 4B and the City Council will be used to determine how the contract is written.
Mr. Sabonis gave several scenarios as to the operation and maintenance of a given project. He said that State statutes require 4B to furnish the City with an operating budget each year.
Sue Oldenburg asked if retail establishments or a museum within the park would be acceptable. Mr. Sabonis replied that convenience stores or souvenir shops are quite common; however, a for-profit business establishment would not be allowed. He added that if a museum is owned by a private, separate entity, then they need to apply for a separate grant. They would need to know what kind of museum it is and how it relates to the program. The Notice that was prepared for this issue does not allow for museums.
The Corporation, Mr. Sabonis said, has cash on hand and significant cash flow. Mr. Dodson asked if the cash on hand must be used for the 4B project or if they could be used for other projects. Mr. Sabonis said that in all the discussions he has had with the 4B and the Council, they have agreed that it was prudent to hang on to the cash. Mr. Dodson then asked, if the $4 million in CO’s is issued, does that commit the cash on hand for debt service? Mr. Sabonis said what is being committed are sales tax receipts.
Dr. Mike Jones asked, in other cities that have income-producing projects, does that income go to the 4B Corporation or to the City? Again, Mr. Sabonis said, that would be a policy decision. Connally Miller asked about short-term investments. Mr. Sabonis said that the money that is available goes into the project fund, and can only be spent on the projects. Interest earned on that money can, by legislation, only be used for three things: (1) the project; (2) offset debt service; or (3) prepay principal. The hope and expectation for this funding is that it would be used on the project.
Ricky Villa wondered, if Oakdale makes money and 4B is operating it, then it should go to 4B; however, if the City is operating it, it should go to the City. Mr. Sabonis said he fully expects Oakdale to make money. Theoretically, he said, 4B could come to the City with a budget that included the profit from the operation of Oakdale, and makes a recommendation to the City Council on how those funds should be spent. It would still be up to the Council to approve the 4B proposed budget.
Dr. Jones asked if the people working at Oakdale will be City or 4B employees. They will definitely be city employees, Mr. Sabonis said. 4B has no staff.
Dr. Jones asked if the City has a Parks & Recreation Department, and was told that the City has always had a Parks Department. Mr. Dodson asked if that is what is meant by the “City Parks Program.” Ronald Bruce explained that the Riverwalk, Big Rocks, and Oakdale Park constitute the parks program at this time. Mr. Dodson said that he understood that 4B was going to issue the CO’s. Now it appears that the City will be issuing the CO’s and the 4B will simply exist to provide debt service. Mr. Sabonis said the common way, and the way that works best is for the City to issue the bonds and purchase the project, and contract with 4B to make payments. He added that most of the 4B Boards that he works with concentrate on parks and tell the City Council what the citizens want.
Mr. Best asked Connally Miller and Mayor Miller if, at any time, there was a Resolution, voted on and approved by the Board that stated that monies that were generated by the sales tax would be exclusively used for Parks & Recreation? Mr. Miller stated that as far as he knew, there was no such Resolution; however, the only interest that was ever shown in a public hearing or public discussion, other than signage, was in parks projects. CVB said they would take care of signage. Barnard’s Mill was brought forth later, but we were advised that it was not a project that 4B could act on, because neither the 4B nor the City owns it and it is run by a separate corporation, so it was dropped. Mr. Best said that in reading the law and looking at other cities, things like Barnard’s Mill are absolutely supportable. Mr. Stricklin pointed out that Council had decided that the main thing the citizens need at want is park area. He added that with 4B making decisions and bringing it to Council, it makes it a strange way to operate. In the future, as we get things ironed out, he said, the 4B should look at projects, evaluate them, bring them to the Council and let Council determine whether or not the City wants to go forward on them. Mr. Miller pointed out to Mr. Best that three different legal opinions were obtained, and all three stated that donating to Barnard’s Mill would not be an acceptable project. If a different opinion is obtained from the Attorney General, 4B would gladly revisit the possibility.
Mr. Best reiterated that it presently appears that the only thing the 4B monies can be used for is parks. Mr. Stricklin said that applies to the bond money. There are other monies that are and can be amassed that are not a part of the bond, and they can be redirected to other areas. But, he added, you must be very careful when you take public monies and you give it to a private organization. You may be able to do it, but you want to research it very, very carefully.
Mr. Dodson asked what the Council’s intention is for the Board, since they serve at the pleasure of Council? Mr. Stricklin said his intention right now is parks and things to enhance the Riverwalk, for bringing people to come to this city. What we need to do, he said, is to get something going that helps to bring people here. Barnard’s Mill is something that we should look at down the road, because if it goes it will be a tourist attraction. Making retail stronger, making people want to come here and spend money ~ but the 4B right now is parks, because parks is what we need most. Mr. Villa said he felt it was important to acquire land at this point, as much as possible.
Dr. Jones asked if Council saw the 4B Board as managing the projects or would they meet once a year and bring ideas to Council. Mr. Villa said he sees 4B as managers. Mayor Miller says she sees them working together, Board and Council. “It shouldn’t be us against you,” she added. “It should always be us working together.” Mr. Villa pointed out that if 4B manages the projects, then nothing will be approved without first going through Council. Dr. Terry said the City would be responsible for the hands-on operation of the facilities, and all personnel would be city employees. Mr. Sabonis said perhaps the terminology should be changed to “strategic direction” rather than “management.”
Mr. Best said he feels the “rules of engagement” need to be documented, i.e., how a project is brought to 4B, how 4B selects a project, and what role Council plays in the project selection process. There are other projects in the community that will generate economic development, he added. Mayor Miller said that when we had public hearings and notified the public to appear, everything that was discussed was in some way tied to parks. Mr. Dodson said he doesn’t think the public is educated about what 4B can and cannot do. Mayor Miller said that until the water park project came about, no matter how much we advertised, there were very few people who attended the meetings. So we took the input from the citizens, and everyone’s concern was parks, so that’s where the focus was directed. She added that this focus has been prominent since before she became mayor six years ago. Mr. Villa pointed out that he had done several surveys, which all pointed to parks. Ms. Thomas said in the 15 years she has been with the City, there have been 5 or 6 surveys done, and every one said what was needed is parks and something for the kids to do.
Mr. Stricklin said that admittedly things have been “loosey-goosey” for a while, and what is needed is to firm it up and go forward from here. Mr. Villa said that once the Comprehensive Plan comes out, it will be spelled out a lot clearer. Mr. Best said that by appropriating $4million in 4B funds for parks at this time, then whatever the Comprehensive Plan advises is moot. Mr. Stricklin pointed out that the $4 million is the maximum amount. The Riverwalk project, he said, was sort of inherited by 4B because it was already in the works. The acquisition of Oakdale is $1 million, so you are at $1.64 there. Another million will probably been needed for Oakdale itself, bringing you to $2.64 million. If the other side of the Riverwalk project is done, with the sidewalks to the downtown area enabling people to travel the entire circuit, you are looking at another $0.5 million there, so you are up over $3 million already. And you don’t want to come up “cash poor” when you are doing a project. The money can always be given back, so it puts 4B in a better situation. The bond has to be written fairly specific to what we are going to use it for. Mayor Miller said she agreed that if you start a project then you don’t want to find yourself in a position to where it is not completed and you don’t have any more cash and have to go back at a cost of approximately $75,000. When asked by Mr. Dodson, Mr. Sabonis said that fees are pro-rated according to the amount of the bond. He added that it is always more efficient to do one large bond issue than a series of smaller ones. Mr. Best objected to that, saying that we need to figure out exactly what we need and write the bond for that amount. If $4 million is what we ask for, then we need to find a project to support a $4 million bond.
Mayor Miller said she feels there is probably another project that the people are wanting that would require the remainder of the $4 million. Mr. Dodson asked why it has not been brought to the attention of 4B. Mayor Miller said it had to do with the acquisition of more land.
Mr. Villa mentioned the feasibility study, and said if you want to know exactly how much it is going to cost for Oakdale to be brought up to code, then we need the study done as quickly as possible.
Mr. Stricklin again said that 4B sort of “backed into” the Oakdale project, because it came on the market and someone else would certainly have bought it. Mr. Dodson said, “It’s been on the market for at least 5 years.” When several people disagreed, he said he “begged to differ.” Mr. Stricklin said Scott May came to Council and said he was serious, that he was going to sell the property. Mr. Dodson said he agreed that Mr. May does want to sell. Mr. Stricklin said a comprehensive study and 1 evaluation of the property was done by a company in Houston. Mr. Dodson asked if that was done by the City or by 4B, and was told it was funded by the City. Barbara Mitchell mentioned that another report was done by Mike Shaw of TML. Mr. Dodson asked about Darrell Webb’s report, and Ms. Thomas reported that Mr. Webb said that basically, everything needs to be replaced ~ all the wiring, all the sewer, all the water ~ it all needs to be replaced, that that is his report. The electrical switchboxes are encased in wood, the electrical wiring is buried, but it is not in conduit. So it needs to be ripped up and started over, and it is going to take a lot of time, and lot of money, and a lot of work. Ms. Oldenburg asked if, in lieu of the time frame, we might call a local plumber and electrician for an estimate. Mr. Stricklin suggested again that Mitchell George would be interested in serving on a committee to do a study of the property. He described him as a knowledgeable individual who can present a ballpark figure that is going to be fairly accurate.
The format of the park needs to be changed, Mr. Stricklin added. The pool might be saved, along with some of the buildings, but the size of the RV pads are too small. Mr. Miller suggested that most of the RV spaces will be deleted. Mr. Stricklin pointed out that the Oakdale name is good for family reunions, and that brings people into town. Mr. Dodson said that the discussion has been going on for a long time about the purchase of Oakdale, and he finds it odd that there has been no plan to determine direction, yet we are getting the funding for it. Mr. Villa said what has been talked about is that at first we are just going to bring it up to code, and future uses will be when money becomes available.
Mr. Best suggested that the City take its money and purchase Oakdale, then have 4B do the feasibility studies, design plans, etc., to determine the uses, then when and if 4B agrees that it is a project that they should fund, they could decide to reimburse the City. Dr. Terry said he had no problem with the City buying Oakdale. Mr. Villa said you could look at it several ways. If we do the full $4 million, we could still have a buffer with the City money. Or we could do $3 million in bonds and the City could buy Oakdale. Mayor Miller said she has talked to Scott and he is aware that funds will not be available until September 1.
Mr. Bryant asked Mr. Sabonis if any gains generated by a 4B project would be given back to 4B. Mr. Sabonis said that would be a policy decision. Mr. Villa said that he felt the monies should be given back to 4B.
Ms. Thomas underscored Mr. Stricklin’s comment that Glen Rose is a tourist town. She mentioned that well over $1 million is spent on hotel rooms every quarter, and the CVB gets 7% of that. The people who are staying in those rooms buy gas, they buy beer, groceries, they go to restaurants ~ and we need to build on that. Mr. Best agreed, and said that anything that can be turned into a tourist attraction should be.
Mr. Miller asked Mr. Sabonis, since there has already been a 30-day delay in funding, if we were ask the City to purchase Oakdale and to delay bond funding for an additional period, are we shooting ourselves in the foot? Mr. Sabonis replied that generally the notice will go stale after about 90 days. Dr. Terry asked if there is any reason why the City can’t go ahead and purchase Oakdale now. It would get the issue settled, he said, and get Billy Huckaby involved in the planning stages. Mr. Villa suggested that the City buy it September 1, and Dr. Terry asked, “Why?” Mr. Stricklin said we don’t need the liability of the pool right now, and if we purchase it we would have to close the pool earlier than its normal closing date of Labor Day.
Dr. Jones said he is really comfortable with getting the $4 million, and feels we will have no problem spending it. Mr. Best said he had no objection to $4 million as long as it is not so narrowly defined as to parks. He would like to see it fund economic development of the community in addition to the parks. Mr. Miller said if we were sitting here with a design plan, then this would be a different discussion, and everyone agreed.
Mr. Sabonis said he feels that he and Ms. Bankhead need to go back to their office and develop some different scenarios for funding, perhaps in two phases. Mayor Miller said she has a problem with that, because if we do not go with the full $4 million, and we purchase Oakdale, then we don’t have any funds to start working on improving it. Ms. Mitchell mentioned that Mr. Sabonis had said that we should not spend reserves, but go for the bond instead. Mr. Sabonis said he recommended hanging onto whatever cash you have. Ms. Mitchell asked, if we find that we don’t need the entire $4 million, we can refund it without penalty, and Mr. Sabonis agreed.
Mr. Stricklin agreed that a delay of 30-60 days would be beneficial. Mr. Bryant said that we still don’t know what 4B monies can be used for besides parks and recreation. We need to know that before we know how much money we can put into Oakdale. Mr. Stricklin added that there are funds available for parks and recreation, but we cannot use it unless we own the property.
Mr. Sabonis said that when he first came out to Glen Rose, he talked about the difference between 4A and 4B corporations, and Council decided they wanted to go with 4B because they wanted the parks and all the things that 4B can do, which is pretty broad.
Mr. Stricklin asked if there is something that perhaps another city has used that we can boilerplate off of to establish guidelines. Mr. Sabonis said he would send out some e-mails and see what he could come up with.
Mr. Stricklin said the City will work on the land for Oakdale. The 4B Board will come up with a plan of how they want to operate. Mr. Miller said that right now there are two separate issues: the procedures, and development and design for Oakdale Park. He said he would like to appoint a committee to come up with something they can give a design firm an idea of what we want. Mr. Villa asked if we need to put a statement in the newspaper that the process is put on hold. Mr. Sabonis said the statement needs to read “extended for further review.” Mr. Stricklin instructed Mr. Miller to set up a committee to start the design process. Mr. Miller said he had already selected Mike Shaw and Billy Huckaby. Dr. Terry said, “You don’t need any more than that.”
Mr. Dodson said there needs to be someone from 4B and someone from City Council to negotiate the purchase of Oakdale. Mr. Stricklin said, “If we are going to purchase it, you are going to reimburse us for it.” Mr. Miller asked if there is a need for additional agreements between 4B and the City, and if so, what are they? Mr. Sabonis said he would like to go back through everything that has been discussed and get back to us. Mr. Stricklin said one thing we are forgetting is funding the Riverwalk, because construction has already begun on it. Mr. Miller said funds are available if we have to use them.
Mention was made of the petition that is being circulated in town. Mr. Sabonis said there are two kinds of petitions, but the one that is being discussed in your local paper is against doing the projects. It would force you to have another vote in order to be able to do park projects again. It is much more dangerous because it actually threatens the viability of your 4B Corporation. It is not about stopping the City from issuing debt; it is about stopping the 4B Corporation from undertaking those projects. If that were to be received and validated, then in order for you to undertake any projects that you gave notice for, you would have to have another vote of the general population.
Dr. Terry asked who is circulating the petition. Mr. Bruce said, “Nobody will own up to it.” Mr. Bryant asked if we could put an ad in the paper to clarify it, because there are people who are being misled by the petition, and people who are actually removing their names because they were misled. Mr. Dodson said he would address that issue. Whenever that was done, he said, he contacted Mr. Villa to let him know where there was a petition, and Mr. Villa made threats against that person. Mr. Villa denied ever making any threats. He said he told the person that the information on the petition was not correct and the person might not want to be associated with it, but he never made any threats. Mr. Dodson said that was not how it was related to him.
Mr. Sabonis reiterated the danger inherent in any petition, but the one that is circulating would require a public vote before the 4B Corporation could undertake any park project. Mr. Bryant said he had spoken to one of the individuals who supposedly knew about the petition, and was told that they were not against the project, but the dollar amount. Mr. Sabonis said that the bond attorneys had reviewed what was in the local paper, and they feel it is against the Corporation doing the projects. There are 1,500 registered voters in Glen Rose, he added. Ten percent would stop the Corporation’s project; five percent could stop the funding.
Mayor Miller said if worse came to worse and the City decided to purchase all the land, and if the funding was stopped, then if we had to raise taxes to operate and maintain it, we would have to do it because the objectors had stopped all the projects. Mr. Sabonis said he would do a report on how much taxes would have to be raised to support the project. Mayor Miller commented that ever since she has been mayor, the City Council has done everything in their power not to raise taxes. They felt that having 4B and having that revenue would be the best thing possible.
Mayor Miller asked if anyone had any other questions for Mr. Sabonis, and thanked him and Mr. Bankhead for coming to the meeting.
2. Legal Counsel: Mr. Miller determined that this item could be postponed until the Annual Meeting to be held on July 14. Mr. Best made such a motion, and Ms. Oldenburg provided a second. The motion passed 7/0.
3. Executive Session: Neither Council nor the 4B Board saw any reason to enter into Executive Session.
4. Action on Executive Session: No action taken.
With no further business to be discussed, Mr. Stricklin moved to adjourn. Mr. Bryant seconded the motion, and it passed unanimously. The meeting adjourned at 7:32 PM.
_______________________________ ________________________________
Pam Miller, Mayor Peggy Busch, City Secretary
