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07 City Council (6/16/03)MINUTES OF THE SPECIAL MEETING OF THE CITY COUNCIL June 16, 2003 The City Council of the City of Paris met in special session, Monday, June 16, 2003, 6:00 P.M. at Paris Junior College, Applied Technology Building Room 1208, 2400 Clarksville Street, Paris, Texas. Mayor Curtis Fendley called the meeting to order with the following Council Members present: Jim Bell, Jay Guest, Joe McCarthy, Francine Neeley, Willie Weekly, Jr., and Benny Plata. Also present were City Manager Michael E. Malone, City Attorney Larry W. Schenk, and City Clerk Mattie Cunningham. Mayor Fendley announced that the first item on the agenda was presentation of revenue projections and proposed rate adjustments by special consultants Reed, Stowe & Yanke. City Manager Malone introduced Jack Stowe who is one of the principals of the firm of Reed, Stowe & Yanke, which is now a Division of the International Engineering Consulting Firm of R. W. Beck Inc., who has conducted the city's Water and Wastewater Study as well as consulted with the city on amendments and the new Campbell Soup water contract. City Manager Malone said that Mr. Stowe was going to review the rate study as well as projections based on the change in the Campbell Soup contract. Mr. Stowe said, to put this study in prospective, he would go back and talk about the existing rates. He said those rates were based on the 1999-2000 budget. They were also based on the 1998-1999 actual for the contractual customers. Mr. Stowe said when it comes to water, the City of Paris is in the unique position of having approximately 35% of its revenue come from wholesale and retail customers, those being primarily Lamar County Water Supply and Campbell Soup Company. He said those particular contracts require the rates to be set on the audited financial statements; so, the contract rates that are being charged today are based upon 1998-1999 financial data. That data is approximately four years old. The contractual obligation of both parties is that these rates are to be adjusted once every three years, and the adjustment should have taken place in the year 2002. He said the study that City Council has before them was originally given to the Council on March 17, 2003. This study was based on the 2001-2002 budget for retail customers. For the wholesale Regular City Council Meeting June 16, 2003 Page 2 customers, it was based upon the audit financial statement for 2000-2001. Mr. Stowe said that the financial data that they are looking at, at this point in time, is getting stale. Mr. Stowe advised the Council if they were comparing it to the 2002-2003 budget, obviously the numbers that they have employed in performing this rate analysis is substantially less than what would be in that budget from an actual standpoint from the wholesale customers as well as the budgeting process itself. Mr. Stowe said to cut to the chase on the study, they are recommending, again it has been since 1999 since the last rate increase, a rate increase of approximately 14% on residential customers. He said the current residential rate for the first 200 hundred cubic feet is $5.91 and they are suggesting that rate goes to $7.00. The current rate per 100 cubic feet is $2.15 and they are suggesting an increase to $2.45. As for the wastewater, the existing base rate is $6.31 and they are suggesting a change to $7.50, and for the 100 cubic feet it is currently $3.10 and they are suggesting that change to $3.25. Mr. Stowe said that, in performing this rate analysis, because of the city's wholesale customers being on a contractual basis and specifically the Lamar County Contract provides for rather than recovery of debt service, it requires for the recovery of the capital cost through depreciation. The depreciable life of the assets to service Lamar County are approximately 40 to 50 years. The debt to finance those capital assets is 20 years. So, what they have when they calculate the rates for wholesale customers is a quarter of a million dollar shortfall that has to be recovered from the retail customers. He said in the years to come, that will reverse and it will become a credit; the city is not there yet. Mr. Stowe advised that the City Council needs to keep that in perspective as it looks at this. Mr. Stowe said the rates developed to recover the revenue requirement based for the retail rates was 6.4 million, and in addition to that, they had a revenue shortfall on the contracts because of the contract methodology right at $300,000.00, so, the retail rates are designed to recover 6.7 million and that will be back based upon the 2001-2002 budget. Mayor Fendley wanted to know how that compared with the 2001-2002 actual audit for the water. Mr. Stowe advised that they had not gone back and looked at the 2001-2002 actual. Mayor Fendley said the water sales is 5.9 million, and your estimated revenue to be 6 4, but asked what was the revenue off of 2001-2002 budget. Mr. Stowe advised that the budget for 2001-2002 was 6.4 million. Mayor Fendley said he thought that is Regular City Council Meeting June 16, 2003 Page 3 what the rate increase would generate in revenue. Mr. Stowe said that was correct and it was based off of the 2001-2002 budget. Mayor Fendley said you can back that up by 14% and come up with that number. Mr. Stowe said that is approximately 14% increase over the existing rate. Mr. Stowe pointed out that the actual water sale has been dropping substantially and the state references about a 14% decline in water sales primarily due to Campbell Soup, and in the wastewater side they were down about 4%. Mr. Stowe said that at the conclusion of the April meeting, City Council had asked him to meet with Campbell Soup to determine if there was any type of meeting of the minds. There have been a number of meetings with Campbell Soup representatives from New Jersey. He said they discussed their production volumes and the drop in volumes at this Campbell Soup Company facility. No promises were made but it was definitely conveyed to us that they would look favorably at new production lines if they received favorable rates. The discussions resulted in a new type of billing structure and a new approach to servicing Campbell Soup. It will result in approximately $150,000 less revenue from Campbell Soup than what was identified during the study. Mr. Stowe said they were dealing with a zero sum gain. Obviously, if the city loses $150,000.00 in one place it has to be make it up in another place. Mr. Stowe said at this junction this is not his recommendation to the city. His recommendation to the city regarding the Campbell Soup situation is, at this time, they are agreeable to revisiting their rate structure and their policy on an annual basis. He said the city is already two-thirds through this year and it would be impossible to make up the $150,000.00 and it is going to be impossible to hit the revenue target that they have identified. There is going to be a significant shortfall in the city's water and wastewater utility fund for 2002-2003. Mr. Stowe said what he would suggest however, if the city moves forward to start fixing the revenue problem as it is today, realizing that they are looking at data some of it as much as 36 to 48 months old, and move toward the future as to whether of not adjustments need to be made in future budgets or what needs to be done. No matter what is done today on budgets, going forward he wanted to emphasize that they are addressing data now as far as the retail basis from this study is some 24 months old and that Regular City Council Meeting June 16, 2003 Page 4 the contractual customers data is 36 months old. Councilman Bell questioned the use of old data. Mr. Stowe advised that because the contract for Campbell Soup called for rated to be reviewed every three years, the city's practice had been to review rates every three years. Mr. Stowe said that in this particular study when they were dealing with the 2001-2002 budget, the city was late getting started. Then they had situations to arise, also, which delayed them a couple of more months. He said this study has been somewhat tardy in getting completed and they were willing to take some of the blame for it. City Manager Malone advised that they had suggested in the past that the city should update the rate annually, but the City Council did not seem to want to go that direction. He thought the reason for that is each time a study is presented based on the Campbell Soup Company' s contract, they do not want to lay out the money to do a full rate study. Once the study has been presented, it is for a three year period, then the city has all of this additional debt to meet these mandates, and it is uncomfortable once the rates have been introduced and no body wants to visit that for the next couple years, so, that is how we have gotten into this pattern. He said each time they have expressed interest in doing the rate study annually so they will be fresh and an incremental increase if necessary. City Manager Malone advised that they have the results back for the lost water study and they have been working to reduce the lost water by repairing mains in the systems and looking for leaks. He said they have had an ongoing program to address these problems. The City Manager advised that they have switched out all of the meters and believe about 100% of all meters are touch-read. He said they have an annual program changing out about 700 meters a year. Herb Campbell, Director of Utilities, advised that they are down to about 15% for lost water. He said they were making progress. Mayor Fendley asked Mr. Stowe to put in the actual numbers since he already had his data base up for September ,2002, and since Mr. Stowe was working on that budget. Mr. Stowe advised that they would have to plug in both the budget Regular City Council Meeting June 16, 2003 Page 5 data and the historical data. He said the city could use the 2001-2002 audit if the city wanted to. Mr. Stowe advised that the city would have to use the new production and sales data and that could be done without a problem. Mr. Stowe said the fastest way of doing it, in his opinion, for where the city is today, as this is already June, and if these rates do not go into effect this summer, the city is looking at 30 days before you can do an effective date. He said that would put the increase in the middle of July and you are only going to have about a month and one-half to two months of water sales and they are going to be looking at some serious financial situations. He said what the city could look at is their 2001-2002 budget compared to the 2000-2001 budget and compare to the 2002- 2003 budget to see how much increase would be in the budget. He said if there has not been a significant shift from one year to the next in the budget, and by significant he meant 3, 4, or 5 hundred thousand dollars, and he would be surprised if there is that much change. He said that the production and sales data is so static it stays pretty much constant that he felt the city could get a feeling. He said he would be glad to enter the data and it would take a couple of weeks probably to get it back to the city. Councilman Bell said he and Councilman Guest attended one of Mr. Plata's committee meetings prior to them election. Of course, Councilman Weekly and Councilwoman Neeley were also present. Councilman Bell stated that during the course of that discussion, it became apparent that our water rates appear to be driven by debt. He said if that is the case, the city needs to be looking at debt in 2000 and 2001 and where the city incurred more debt and debt service, which is based on the information that Mr. Campbell gave them. The cost of water production was not up and he was of the impression that only debt and a decrease in revenue by the sale of water has gone down because of consumption and that is what is driving this particular cost. Councilman Bell wanted to know if Mr. Stowe, under his opinion, what would allow the city to produce that. Mr. Stowe explained that the debt is about 30% of the revenue requirements. He said the electric cost is another 15% to 20% and the balance of it is salary and wages, material and supplies, capital outlay, transfer to the general fund and franchise fees. Mr. Stowe said if Councilman Bell is asking if there are expenses that can be cut, he cannot answer that question. He advised that he has not looked at that Regular City Council Meeting June 16, 2003 Page 6 and cannot really give him an answer to that question, but what he could answer is after looking at the city' s rate based on the rates that they were recommending, and he looked at them and compared them to cities that are in the City of ?aris's population range and when he starts isolating out the cities that are part of large systems, such as Farmers Branch who is a customer of Dallas Water Utilities, and isolating them out and stand alone for the 25,0000 to 30,000 population, the City of Paris' rates are about in the middle to the low side based on what they are recommended. He said this should give the city some level of confidence that they are doing things right. Councilman Bell asked Mr. Stowe how much money he provided to be transferred to the General Fund. Mr. Stowe said it was approximately $750,000.00 for general administrative costs and overhead. If the city calculates it as a percentage of revenue, the figure would be 7% to 7-1/2% of total revenue. Mr. Stowe said that they look at this for Paris and for other cities. What Paris is charging is in about the middle area. Mr. Stowe said the franchise fee is approximately 4% and that is what other utilities are charged. Councilman Guest asked what was the total debt service. Gene Anderson, Director of Finance, advised that the debt service was about 33 million dollars for the water and sewer fund combined; and the annual expenses are about 11 million including debt service. Mr. Anderson said that he had provided the Council two years of the financial statement and in 2000-2001 the transfer out is a larger number. That is because the city did two refunding issues to save money and the money in there would have gone to the Interest and Sinking Fund, because this was done ahead of time as an advance refunding, he had to take that money and transfer it over to the Interest and Sinking Fund to make the debt payment that was coming up, which was a one time deal. That money went into the Interest and Sinking Fund to pay debt. Mayor Fendley said we show retained earnings and it is not the typical retained earnings because you are showing 30 million dollars in retained earnings. Mr. Anderson said that would include the asset base. Mayor Fendley stated that it is not actually the accumulated profit from the water and sewer departments over Regular City Council Meeting June 16, 2003 Page 7 the years. Mr. Anderson said it would be a combination of your buy-down on the city's debt. Mr. Anderson advised that there are several sub-funds that all come under water and sewer. There is the operating account, construction fund, and the interest and sinking fund. The ten million dollars is a combination of all of those funds because you have to do a consolidated statement. Mr. Anderson pointed out that if the Council would look at the statement on the far left hand corner they would see just the Water and Sewer system separated from the on going construction as well and the Interest and Sinking Fund and that is where you get the 30 million, but if you combine all those fund together you will get a total number. Councilman Guest asked if there was such a thing as the city having debt to asset ratios and there being any importance to those and can you feel comfortable with that. Mr. Stowe advised that the debt to asset ratio is one of the things that the rating agencies will look at even though it is a revenue bond and the city's revenue is being pledged to cover it. They will still look at that for the city's rating, and he felt that was significant to the numbers. Mr. Stowe said he was looking at the City of Garland and they are at about 25% to 75% and the City of Paris is about 40% to 60%, and if you look at the old rule of thumbs that the PUC and all the regulatory agencies that use to apply here when they approved financing they have from 25% - 75% to 40% - 60%, so, the city is up on the end right there and every month your are adding to it, if you are borrowing money. If you are not borrowing more money, then every month you are increasing you equity and it is going down that percentage. Mr. Anderson answered Councilman Bell' s question regarding the balance in the bond fund, advising that there is approximately 3.8 million dollars that has not been spent. Mr. Anderson further advised that this money is obligated for projects such as the water storage tower and for the lines to feed the tower. He said there may be a few hundred thousand dollars that is not obligated. City Manager Malone said the Council will be furnished a break-down of the construction fund. Mr. Stowe said that one number he can tell the City Council is that for every Regular City Council Meeting June 16, 2003 Page 8 $50,000.00 reduction in cost that may be there or not, it means one cent on the rate. Councilman Guest stated that the city only has 3 million dollars in operating expenses to deal with to begin with, and if you reduce it 20% ,you still have not reduced the water rate that many cents. Councilwoman Neeley asked Mr. Stowe that when he was here before didn't he tell Council that what was driving the rate increase was debt retirement, franchise and utility cost. Mr. Stowe advised that the main driver is the debt for the system and then the other thing here is the decline in water sales. Mr. Stowe told the City Council that there is a project that is on the drawing board for East Texas to West Texas. It is a pipeline that is going to run close to here and as it develops and becomes public knowledge, he will be contacting the City of Paris to see if there is an interest in selling raw water into that pipeline. Councilman Bell asked if the city can live with what we have, with what the city has going on, such as the water tower and the water lines, and if Mr. Stowe was talking about doing it with more borrowed debt he was not for that at this point. Manager Malone said there is a production study underway and part of that is to identify any effect that mandates that the city has already received and know what effect they will have on the city. He said when the city receives that data they will be able to determine what the city's production capacity is, and will know what they are already obligated to do under the existing contracts along with knowing what people are asking for currently. The City Manger said the City Council will have a decision to make. It may be that our capacity is adequate for the present time and the city can expand these contracts and obligate ourselves to sell more water. But if the study comes back that additions to the plant have to be made in order to meet the mandates and to get the capacity at the level that is needed to meet the obligations of the city, then council will need to decide if they want to expend funds to increase the levels so the city can sell water to Lamar County Water Supply. If you want to reduce the lost water situation by replacing lines, the Council might want to issue debt. Those are decisions that the Council has to make as staff furnishes them the data. City Manager Malone said they have an up to date water master plan, but the Regular City Council Meeting June 16, 2003 Page 9 wastewater plan may be out of date. He said they have made a tremendous amount of progress on making repairs to the wastewater system and the water system and that is why the city did not get fined. That is how the city got out from under that order. The City Manager said they had been spending money and getting bang for the buck in repairing the system and the city would be in a lot worse shape if the money had not been borrowed to make those repairs and meet those mandates. Councilman Plata wanted to know how long the water loss study has been going on and when it was completed. Mr. Campbell advised that there is a preliminary report that is very good and they are making repairs based on it. The final report has been delayed because the engineer doing the report became ill. Mayor Fendley called for discussion of and possible action regarding privatization of the water and sewer facilities. Mayor Fendley asked if the Council recalled that they had this discussion within the last three or four weeks and had a presentation for OMI and called for comments from the City Council. Councilman Bell advised that he has had some discussion with Councilman Plata and others and he cannot see why we would not proceed with the RFP (Request for Proposals). Councilman Bell said in visiting with OMI he found that their RFP's are not that complicated and should not take that much staff time. It would be a preliminary step, and he felt that if they had some type proposal, it would give us, if nothing else, some ideas where to look at possible cuts in cost if we do not have them presented by Mr. Campbell at some point. Hopefully he is looking at that, and finally, he did not want to have an RFP from just one company. City Attorney Schenk advised that what they would do is not adopt out of hand OMI's proposal for RFP because he thinks it is like stipulating that you want a 3.8 engine in what you are buying and that is what you are going to get. He felt that the city should get RFP's from other entities and then create our own, and that is what he was saying to this Council. In doing that, saying the city can do an RFP is one thing, but it is another thing to decide an RFP for what level Regular City Council Meeting June 16, 2003 Page 10 service you want. Do you want the entity to do the billing, maintenance and repair of the lines, operate the water plant or operate the sewer plant. Attorney Schenk said that you want to get proposals on the level of service that you are expecting. Keep in mind that the companies prepare these RFPs as a reality in the prospect of making a contractual award. City Attorney Schenk said he was suggesting that they not get a proposal from OMI. He thought it would be prudent for the city to create their own based on the experience of other cities as well as suggestions from some of the entities that have privatized. Mr. Schenk said in it is important to have input from this Council as to what kinds of service they want to privatize. Mr. Stowe advised that it does not hurt to look at options and they have done RFPs for privatizing O&M operations before; but if the city does this, give your staff an opportunity to compete. They need to have the opportunity to bid also. He said if you look at the City's 4 ½% debt that they can issue at and you look at the fact that you do not pay 35% federal income taxes and for these people to able to make that debt cost is around 6 ½% to 7% and their return on equity is about 10% to 12%, and to cover the taxes and find $500,000.00, he can't wait to read those proposals. Councilman Bell said they are willing to come to us and say they can do that and if they can, where is our cut? This item was placed on the agenda before Mr. Campbell was allowed to come forward and address the item brought up by Mr. Plata and his committee. Mayor Fendley announced that the City Council would move forward to Item No. 3.B (1), staff reports; Agenda Item No. 3.B. (2); and Agenda Item No. 3.B. (3) other related information. Gene Anderson, Director of Finance, came stating that he had some information that would be considered historical that would give council some perspective. Mr. Anderson said he went back and extracted some data of a cool weather month (March) and a hot weather month (August) to try to put the size of our water bill in perspective because of anyone sitting around the coffee shop or any Regular City Council Meeting June 16, 2003 Page 11 other place discussing bills and that whatever the bill, they thought it is too high. Mr. Anderson said his information was of all city customers residential, commercial, industrial or whatever, all of them rolled into together. In March of 2003, there were 8,547 combined water and sewer bills (this excludes trash pick up) that were $50.00 or less that is 84.13% of accounts including industrial. There were another 1,220 that fell between $51.00 and $100.00, which represents 12%. He said those two top category represent 96.13% of all of the city's customers and they had a bill of $100.00 or less for water and sewer and that is in a cool weather month. He said in August 2002, which is dry and hot as it can get, and in the zero to $50.00 range 7,275 account or 71.63% of the bills were $50.00 or less. He said the range from $5.00 to $100.00 there were 2,143 customers, or 21.10%, and those two categories represent 92.73%. Mr. Anderson said if you really put it in perspective and look and see what they really are compared to the other utility bills, he did not think these were exorbitant rates. Mr. Anderson said that Mr. Stowe mentioned the TML Survey and over the past two years, TML surveys of 673 cities indicate that water rates have increased 11.93% and sewer rates have increased 9.9%, so, the City of Paris is not the only city facing this type situation, and as Mr. Malone said in the past no one wants to do it. It is not the popular thing to do. Councilman Plata said that sounds good, but here are the things that he looks at when you talk about rate increases. You say this is not bad, then all of the other utilities go up and you need to think about these people that are on a fixed income. He advised that he is not saying that we do not need a rate increase, but he would like to see about cutting fat out of the budget first, and then raise the rates. Mr. Anderson said he understands what Councilman Plata said, but he pointed out that he always hears about people on a fixed income, and he said that he does not know anyone that is on a strictly fixed income even if someone only has social security checks as their only income, that is adjusted by the cost of living by the Federal Government based on the inflation rate, so it is not really fixed. Regular City Council Meeting June 16, 2003 Page 12 Councilwoman Neeley spoke about a City Council who decided that we needed to make some improvements and needed some things and then voted to borrow this money without raising rates. She said that some one near and dear to her (former Mayor Neeley) came home jumping up and down screaming that they have just robbed Peter to pay Paul and somebody down there, in a few years, is going to have to bite the bullet and raise these rates and take care of it. She stated that it seems that they were there whether they liked it or not. Councilwoman Neeley said that much of the things that they did were mandated by the EPA that was threatening daily large fines. She said that she talked to people, talked to industry and we do not want to drive industry out of town by raising our rates, but we also don't want to lose our bond rating. Mr. Anderson said he would like to address something that came up at the last Water and Sewer Subcommittee meeting that involved the possibility of going to the 12 hour shifts. He did, at Councilman Plata's suggestion, call the Financial Director at Kimberly Clark and discussed their 12 hour shift rotation schedule and essentially their employees work four 12 hour shifts one week, and three 12 hour shifts the next week. In other words, they work 36 hours one week and 48 hours the next unless they are called in for some other purpose. Mr. Anderson said if you wanted to do that, if you wanted to convert that to straight time equivalent hours in a two week pay period which is what the city uses, that is equivalent to 88 straight time hours compared to 80 straight time hours that the city currently utilize. Mr. Anderson said there was a question on how that would effect overtime and whether or not it would invoke overtime in that week that an employee would work in excess of 40 hours. The Fair Labor Standard Act is pretty clear on that and any hours worked over 40 are mandatory time and one- half. Mr. Anderson said what Kimberly Clark does, as he understands, the schedule their fourth day is intended to be and is normally scheduled for a Sunday. The week they work 4 days one of them is normally a Sunday and what they do on Sunday's they pay double time and not time and one-half. He said that under a normal two week cycle for a K-C employee, they are going to be paid for 72 straight time hours, and 12 double time hours for a total of 84 hours worked; but that is the straight time equivalent of 96 hours. Mr. Anderson said the overtime is a valid issue, and the largest drawback that he can see as it has Regular City Council Meeting June 16, 2003 Page 13 been proposed, is on those 4 shifts you have two people on a shift, you have an operator and a maintenance person, which if either of those people are out for any reason, who ever gets called in the odds are 65%-75% that the are going to start out at time and one-half rate as soon as they come in even if someone is pulled off the regular standard day shift to cover for that employee the odds are that they are going to be in an overtime situation. Mr. Anderson said if you spread that out over a year, and calculate how many days of holidays, and vacation, he went back and looked at how many sick days were involved and assuming that 65% to 75% of the hours that are going to be necessary to cover those type of known and expected absences, the equivalent straight time hours come out close to the number of straight time hours that the city is paying now. Mr. Anderson said there is a real danger that the city is not going to save as much money by going to that schedule and doing those employee cuts as what might be expected. He advised that the addition problem that he sees is that it will put a strain on the employees that are left because there are fewer employees to cover the hours. Mr. Anderson said another thing he wanted to mention is the fact that the Water and Sewer Fund is an enterprise fund. It is suppose to carry its own weight, to be self supporting, and any operating expenses related to that should be charged to that fund and the rates are to support that. That is the accounting theory behind it and that is how everybody does it. Mr. Anderson said one of the other suggestions that was made at that meeting had to do with shifting some of those proposed cut employees over to the Parks Department and then having them come back and do ground keeping at the water plant or the sewer plant. He advised that type of cost shifting of genuine water and sewer related cost to the General Fund defeats that theory and defeats that purpose and would also adversely alter our ability to recover the cost to our contract customers because those costs, it would no longer be in the Water and Sewer Fund Budget and they could no longer roll those into the contracts. Mr. Anderson said another item in the Water and Sewer Budget has to do with the administrative transfer and the franchise fee. He said it is a percentage of the Regular City Council Meeting June 16, 2003 Page 14 General Fund overhead which is just a little over 12%. He advised that compared to other cities it is very reasonable and as Mr. Stowe mentioned it is probably lower than most of them. He said that is a genuine cost to the system and he did not think the Council could ignore that theoretically and accurately report the cost to the Water and Sewer Fund. Mr. Anderson stated that the morale of the employees had been adversely affected since there is the possibility that some of them will not have a j ob. Mr. Anderson thought that the sooner the Council can address these issues the better employee morale would be. Councilman Bell asked Mr. Anderson if it is possible for him to give the City Council a printout telling the Council how much money has been transferred to the General Fund from the Water and Sewer Fund over the last 10 or 15 years. Mr. Anderson said he could do that pretty quickly, but it has been roughly a million dollars for some time and it has not increased. The City Manager asked Mr. Anderson if it has been that amount for the past five years. Mr. Anderson said that the franchise fee fluctuates. Mr. Stowe said it was about 4% and it is actually 3% of anticipated revenue. City Attorney Schenk asked the City Council if they understood the Fair Labor Standard Act. Mr. Anderson advised that he hit that pretty quickly, but essentially anybody that actually works more than 40 hours a week has to be paid time and one-half. Councilman Plata said he had looked at that and he called Longview and talked to them, and you are correct. Councilman Plata said there are other ways in dealing with the 3 ½ hours that will be paid overtime. Councilman Plata said that Mr. Anderson made an incorrect statement on what he said about people coming back and doing ground maintenance at the water and wastewater plants. He advised that what he was saying is they will not be in the water department when you transfer the employees to the Parks Department. Councilman Plata said the city could use a lot of maintenance men to do a lot of ground maintenance, and to him, maintenance men should not be doing that type work. Mr. Anderson said that the maintenance workers at both the water and wastewater plants historically have not only maintained pumps and motors and that type maintenance, but as part of their job, they have also Regular City Council Meeting June 16, 2003 Page 15 done the ground maintenance at the facilities. Mr. Anderson said that is a cost to operate the system. Mr. Anderson said even if you move those employees over to the Parks Department, that work has got to be done and it is a cost that should be charged to the system. At 7:24 P.M. Mayor Fendley announced that the City Council would take a 10 minute break. Mayor Fendley reconvened the meeting at 7:35 P.M. Mayor Fendley said they would move to Agenda Item No. 3.B(3), other related information for the Water and Sewer Departments. Herb Campbell, Director of Utilities, was present stating that he looks at this from a different perspective than everybody else. He said he looks at the production end. Mr. Campbell presented the City Council with a memorandum with several attachments. He stated that it is his job to protect the health of the citizens that the city serves. Next, they must protect the health and provide for the safety of our employees; and the city must do it efficiently and as cost effectively as possible. He said since the city is a service organization, it takes well- trained people to perform that service. Mr. Campbell told the City Council that when he was hired as Director of Utilities in 1987, the City of Paris decided that it did not want to just be mediocre when it came to protecting the health and safety of its citizens and employees and protecting the environment. They have far exceeded that expectation and continue to do so with a modern and progressive system. To ensure that high quality, potable water reaches our customers we regularly exceed all state and federal standards at the water treatment plant. He said that "WATER IS LIFE" and nothing positive can happen in this city, or any other city for that matter, without water. Water is the most important resource on this planet. Good, clean, safe water is not free, even as much as we would like for it to be. He said water ranks higher than air for survival of life Regular City Council Meeting June 16, 2003 Page 16 on earth. Some things on earth can live without air, but nothing can live without water. Mr. Campbell advised that for the past sixteen years, they have met all of the demanding and ever-changing state and federal water and wastewater rules, regulations and unfunded mandates placed upon this city and specifically upon the Utilities Department. In the past ten years, there have been no new positions added in the Utilities Department and the budgets have been basically flat for the last three years. They have met this challenge by properly training and retaining a good core staff of personnel. This has never been more evident than this year when they have had two major water breaks. Quick and proper action by our trained staff averted several hundreds of thousands of dollars in lost time and products for some of our major industries and there will be many more challenges in the future as our system continues to age. He said this department is well respected by the citizens of Paris and rightfully so. He did not believe that now is the time to be reducing personnel, especially in light of current world events. The water and wastewater systems need your support now more than ever before as they are high on terrorist target lists. Mr. Campbell stated that for months a study has been on going by an Ad-Hoc Committee of the City Council. Certain recommendations have been made by this Committee. In his opinion, adopting all of these recommendations would not be in the best interest of the city. Mr. Campbell said if all of the personnel recommendations of the Committee were implemented, the savings to the average water user (around 5000 gallons per month) would be only 13.5 cents per month for water and $0.74 per month for wastewater service. That is a total of 87.5 cents per month or just a little less than 3 cents per day. Mr. Campbell said as a citizen of Paris, he considered that a small amount to pay for the continued protection of his health and the protection of the environment. Mr. Campbell said there were other items addressed in the recommendations that should be considered during the budget making process. Mr. Campbell said that with all the things they have accomplished, they have always worked with less people than budgeted. This is because at least three Regular City Council Meeting June 16, 2003 Page 17 personnel positions are always in a state of flux with people going in and out of the department. He said while he did not wish to have these positions cut, it would be possible to operate without them if, when other vacancies do occur, they are filled on a timely basis with quality personnel. Additionally, Mr. Campbell said they will continue, as they have always done, to operate in the most efficient manner. Mr. Campbell said that they have always looked for better and more efficient ways to do things and still accomplish their stated mission. Mr. Campbell advised that several documents were attached to his memo. The first thing is a Summary of Effect of Personnel cuts as recommended by the Ad Hoc Committee showing how he made the calculations to arrive at the 3 cents per day or less. Next were several pages of the summaries of Acts and Mandates that the City of Paris has been under for drinking water showing required action and comments. Mr. Campbell said there are also pages for wastewater mandates. Mr. Campbell advised that he went to the Texas Water Session in Corpus Christi this last spring and he has listed the break-out session, and as you can see there are a lot of things that are going on. In order to keep informed, these are the things that he does, and as the Council can see, there are a lot of presenters affiliated with TCEQ. The next page is a Treatment Plant Process Flow Diagram (2003). He said this shows the treatment process of the plant flow diagram for the City of Paris Water Treatment Plant and everything showing in red has been added to this plant since 1987. The next page reflects the changes in the treatment system at ground storage and everything shown in red has been changed. They added a 4 million gallon ground storage tank, 4 new pumps, and several new meters. The next page is a graph showing the water that was treated and the top line is the Water Treatment Plant water and it has gone down some in the last four years. He pointed out a small line at the top which is raw water and the city is pumping more raw water because of Lamar Power ?artners; soon the raw water pumping costs is going to be a lot more than they have been in the past. Regular City Council Meeting June 16, 2003 Page 18 The next page was a list of all the pumps in the Water Treatment Plant Division and the next page is the scope of services agreement that the city has with Freese and Nichols and he knew what they were doing when they were conducting this water treatment plant evaluation. He asked the City Council to look at item nine which shows where they are suppose to estimate the staffing requirements for the current and future capacities (if they are different). So, they are looking ahead on that. Mr. Campbell said the next page is for Water and Wastewater Plant is an illustration showing the schedules as they were recommended. Mr. Campbell asked Councilman Plata why he recommended that the city use a day shift operator at the water plant but he did not make that recommendation for the wastewater plant. Councilman Plata explained that there was not a need for an operator at the sewer treatment plant. Mr. Campbell asked that they look at the next page, which is a comparison he did with other cities, Greenville, Sherman, Denison, Mt. Pleasant, Corsicana and Lewisville. He said that Lewisville is a lot larger than the City of Paris, but we compare comparably to this, and this gives a lot of information such as the water rates, population, wastewater, water source, water plant capacity, and their average water production. If you will notice, the city's average water production is 11.4, which is higher than any other of the cities listed including Lewisville, as they have a purchase contract with Dallas Water Utilities and they purchase 7.5 million gallons a day, but they only treat 4 ½ million a day. Mr. Campbell said that the city's peak flow is higher than all of them, but the interesting point is the next number down which is called water production dollars per 1,000 gallons and the city's water production cost is $0.56 per 1,000 gallons; Greenville is $0.79. Sherman you will have to read the notes to get theirs because it is convoluted. Denison gets their water from wells, so naturally they would be lower than the city. Mt. Pleasant is about the same as Paris's, Corsicana and Lewisville are a lot higher than the City of Paris. Regarding the wastewater plant, Mr. Campbell said there are different types. Greenville has the simplest type, a trickling filter system. Mr. Campbell said the Regular City Council Meeting June 16, 2003 Page 19 City of Paris has activated sludge with extended aeration, which some of these cities have, but if you will look at the Sludge Disposal Method some of the cities uses the landfill, which is very cheap at this time. That will be stopped soon because TCEQ does not want to fill up landfills with the treatment plant sludge. He asked that the Council look at their water treatment cost per thousand. The City of Paris is $1.10; where Greenville, with a much simpler plant and easy disposal, is only $1.03; Sherman is higher than the City of Paris; Denison is about the same; and he has not figured out Mt. Pleasant yet because they have such a varied cost center that is hard to figure out, just like what he had talking about where all their costs are. Corsicana is lot higher and Lewisville is pretty much in line with the City of Paris. Lewisville also operates their plant 24 hours a day with two operators per shift. Corsicanna operates their plant 24 hours day with one person per shift, but that 8 hours and one person is an over-land flow. They have an over-land flow field, which is like Campbell Soup and this most unusual. Mt. Pleasant only operates their wastewater plant 8 hours a day; Denison operates their 24 hours a day with one operator; Sherman operates theirs 24 hours a day with one operator; and Greenville operates theirs 13 hours a day and the City of Paris operates 24 hours a day with 2 operators. Mr. Campbell asked the Council to look back at the operated hours per day on water and Lewisville is the only one that works 12 hours shifts and they have 3 operators on each shift and working 12 hours a shift, and one is not only operating, he is doing some type maintenance. If you go down to how stringent the government is enforcing against them or what their permits calls for, the permit limits and the City of Paris has a pretty stringent permit. He said the lower the numbers the more stringent it is except on the DO and you have to have a higher DO because they want you to have more oxygen in the water. If the Council will notice the city's is 10, 15, 2, & 6, and Greenville is still 20-20 and their ammonia in the summer is 2, but in the winter it is 10 and their DO level is lower. Mr. Campbell said he could tell right now that Greenville is going to have to get ready to spend some money, and they are getting ready to spend money on bonds. Sherman is comparable to Paris, Denison is the same 20-20 and they do not have an ammonia limit, but they have a 2 DO, and those will change because all of the others are 10, 15 for most of the cities and that is the norm for now days and that is what TCEQ requiring. Regular City Council Meeting June 16, 2003 Page 20 Councilman Plata wanted to know how many people did these cities have in the lift stations. Mr. Campbell said that Greenville has people committed to lift stations and the reason they do is because they are under what is called an SSI? Program (Sanitary Sewer Improvement Program). Mr. Campbell said that some of the others have the lift stations included in their wastewater plants and some of them have dedicated lift stations crews. Mr. Campbell said the people who have switched from dedicated lift station crews are rethinking their decision, and he has talked to others such as Lewisville, where they do not have a lift station crew, but it is not working as well as in Denton. Councilman Plata said he had checked out all of these cities and none of them have lift station crews. Mr. Campbell said he did not think that was true in Greenville because they work under their SSI? Program. Mr. Campbell advised that the next page is the Lift Station Comparison from 1987 to 2003 and there have been a lot of changes made, plus a lot of life stations have been added. There is also a Major Equipment List for all of the lift stations. Mr. Campbell said the next page is the Time Breakdown (Hours) for calendar year 2002, and they went into great detail for the time breakdown. Mr. Campbell broke down the time for three lift station people and this is a time breakdown in hours for last year and it tells in great detail what these people do. Mr. Campbell asked the Council to look through this breakdown and they will see all of the things they do. Page 16 of 18 shows everything that they do broken down by the percent of time they spend; pump repair and preventive maintenance are the largest items and that is what he wants them to be doing. Mr. Campbell went to the next page which shows from 1987 to the present. He said that he can only speak for the time he has been with the City of Paris because no one was keeping these records before he came. It was required by law, if there were overflows in the sanitary sewer or anywhere else, like a lift station, it is suppose to be reported. It is called a noncompliance notification and that is what the NCN Report is. Mr. Campbell said the orange line goes way up; but on the lower left you will see that a big dent was made in lift station overflows during his first two years with the city. Since that time, the lift station overflow is fiat and that is where they want to keep it. Mr. Campbell said it Regular City Council Meeting June 16, 2003 Page 21 would be bad as the guys have worked long and hard keeping the city out of the administrative orders to try to take that lift station crew down and put them somewhere else where they will not be able to respond and do the job that they are trained to do. He said if they were not doing a good job, he would be the first to say let's do something else. They keep adding new lift stations, but we have not added additional personnel. Mr. Campbell said the next several pages show the changes that have been made at the Wastewater Treatment Plant. Next was the Operator Education, Training and Certification Program, Operator Training and Certification Curriculum Program and he wanted the City Council to know that this is what the state expects city employees to know how to do if they are going to be certified operators. There were seven pages of things they have to know. The following pages shows the Certified Water/Wastewater Courses that they have had since 1987. Mr. Campbell said they started having water and wastewater courses here since he has been with the city and they have saved over $100,000.00 in training by not having to send these people out of town. Mr. Campbell said that he downloaded off the internet from the Texas Resources Institute the last pages of his report, which was Water and Wastewater Utilities Enhance System Security Malicious attacks now to be addressed along with natural disasters in the new plans. Mr. Campbell said this is the best synopsis that he has seen about what cities are facing as far as security is concerned, and it would be good for the City Council to read this when they get a chance. Councilman Guest asked Mr. Campbell how much he could eliminate out of his budget. Mr. Campbell stated that what he would like to do is eliminate those three vacant positions, which would amount to $75,000.00 to $80,000.00. Councilman Plata asked about the people working over-lapping, like on Monday you have three, the next day you would have two. Mr. Campbell said the reason Regular City Council Meeting June 16, 2003 Page 22 is these people are new hires and they have to be trained, and they fill in when other people are off sick or out on vacation. Mr. Campbell stressed the need for continuing training. He said if the city had not had people trained when these two water leaks came up, Campbell Soup would have lost $400,000.00 worth of product and that is their figure. Mayor Fendley moved to the next item on the agenda, receipt of a preliminary 2003-2004 budget for the water and wastewater departments. City Manager Malone stated that the City Council had been presented the preliminary 2003-2004 budget for the water and wastewater departments. He advised that there are actually two documents in this folder. He said it is all preliminary information and Mr. Anderson has been able to use a program in the AS400 format to do this. He said the first section contains a preliminary budget for all departments in the Water and Sewer Fund without including a cost of living increase. The second section is the same preliminary budget presented with a 3.43% cost of living, which is what the cost of living was over the past 24 months, and that would give them some indication of the range of what it would take to give a cost of living raise should the Council require staff to do so. City Manager Malone pointed out that going through the table of contents, these pages are numbered on both presentations, so the Council can find the summary by function, activity and character and object, etc. City Manager Malone advised that they had reduced personnel within these departments by four. They have already eliminated one meter reader position by transferring that person into an open position in Public Works. This was the result of the fact that the city instituted touch-read metering over the past two years and they now have the majority of the meters switched out. This process is much faster and computerized and when they finish their rounds, they swap out meters. City Manager Malone said they also eliminated one Maintenance I person in Water Production, a Maintenance II person in the Lift Station and a Maintenance I person in Wastewater. City Manager Malone advised that there are line item Regular City Council Meeting June 16, 2003 Page 23 reductions throughout these budgets. Some of the summaries are up and some of them are down. On page 1 of 53 is the Summary of Expenditures by Functions and Activity Classification, so, you can see over all the budgetary numbers and how they compare to the 2002-2003 budget. He said there is a small amount of capital in this budget and there will be a page that will give you a detail of what that capital expenditure is. This budget has been flat for the last three years as Mr. Anderson and Mr. Stowe alluded to, but in some cases, they are down and other cases they are up. Mayor Fendley stated that the actual expenditure twelve months ago was about $600,000.00 less than that and wanted to know how this 3.9 million is going to annualize out. Mr. Anderson said that it should annualize out pretty close to what the budget number is. He said that one of the things that makes it kind of an uneven cash flow wise is that the city only make debt payments twice a year and once in June and once in December and one of those payments, depending on which bond issue it is, pays principal in December, which distorts the number in total until those payments have been made. City Manager Malone said that the administrative fee is also normally done at the end of the year. Mr. Anderson explained that they normally transfer the sanitation fee collection once or twice a year, which is a matter of convenience. That money is billed on the water bill and collected in the Water and Sewer Fund, and then it is transferred to the General Fund. Mr. Anderson advised that he brought that up to date in May and he will probably transfer whatever is accumulated since then. Councilman Bell stated that the department head requested $7,786,057.00. Mr. Anderson advised that is all the Water and Sewer related departments, which would include, not only Mr. Campbell's departments, but two departments that Terry Townsend has. Mr. Townsend's departments maintain water and sewer lines, and it also includes the two departments that he has that are water- related which is the Warehouse and Water Billing and Collection Department. City Manager Malone advised that the Department Heads make all their requests through him. Then Mr. Anderson puts the budget together. Department Heads do not do any calculations on the salary and payroll. Regular City Council Meeting June 16, 2003 Page 24 Councilman Bell said Mr. Campbell mentioned cutting personnel and Mr. Malone also mentioned personnel that he had already cut. City Manager Malone advised that the one that he cut was in Mr. Anderson's Water Billing and Collection Department. He said they had planned all along that they would have a retirement to take that spot, but there was an opening in Public Works so, they took the opportunity to move a person to the Water Distribution Department. Mr. Malone said that in the past he was trying to get these rates before the Council on an annual basis, but over the past couple of years they have had concerns about whether they needed to fill these positions until they get this rate presented. He said that he had been keeping these positions open. He said that, in effect, the city has had the savings from these positions not being filled. He said he was willing to go ahead and eliminate these three positions, but they may be placed back in the budget if more mandates or more requirements are placed on our people that require more effort. He said that all of our people are being trained by the department. We have not been able to hire anyone that is already trained. The City Manager advised that when people are hired they cannot go out and operate the plant. So if we lose people through retirement, illness or they take another job the city is going to be in a bind if we do not have some people already trained. This is a short term, stop gap solution. Mr. Anderson said that in the 17 or 18 years he has been with the city he can count on one hand the number of new employees that already had a certificate. Normally, you have to train them from within. City Manager Malone said that even if they are trained they still have to learn how to operate our plants which are more complicated that plants found in the other cities we have discussed. Mayor Fendley advised that the Council had moved off of Agenda Item 3A, privatization of water and sewer facilities, in order to receive historical information and if the Council wishes to move back up to Agenda No. 3A and discuss that item or they could leave it be. He asked what the pleasure of the Council was. Regular City Council Meeting June 16, 2003 Page 25 Councilman Plata said he would like to see the request for proposals for the Water and Wastewater Treatment Plants and all of the others, Water Billing, Water Distribution, but not Lift Station. Mayor Fendley stated that it might be something the Council would want to look at, but at this time the Council needed to address the rate issue and we have budgeting coming up, it may be something that they could look at in 90 days. Councilman Plata said he was not recommending holding it up, but he would like to see the proposals. Mayor Fendley suggested that this be placed on the September agenda. After discussion, a motion was made by Mayor Pro Tem McCarthy, seconded by Councilman Weekly, to place this back on the agenda in 90 days (September). The motion carried 6 ayes, 1 nay, Councilman Plata voting no. Mayor Fendley advised that the next item was a resolution accepting the findings of a Water and Sewer Rate Study performed by Reed, Stowe & Yanke, Inc., and authorizing the implementation of said rates for certain contracted water customers, and he needed a motion to bring this from the table. A motion was made by Councilman Weekly, seconded by Councilwoman Neeley, to bring the above item from the table. The motion carried 7 ayes, 0 nays. City Attorney Schenk informed the Council that the item that they previously had was for all contracted customers and they have removed Campbell Soup from this listing and that would be intending bring back to the City Council a new contract with Campbell Soup. Resolution No. 2003-108, accepting the findings of the Water and Sewer Rate Study performed by Reed, Stowe, Yanke, Inc.; authorizing the implementation of said rates for certain contracted water customers, was presented. A motion was made by Councilwoman Neeley, seconded by Mayor Pro Tem McCarthy, for approval of the resolution. The motion carried 7 ayes, 0 nays. Regular City Council Meeting June 16, 2003 Page 26 Resolution No. 2003-109, awarding the bid for construction of a restroom, restroom/concession building, gateway building, and entry sign (masonry, building, plumbing, electrical, and roofing) as part of the overall completion of Phase I of the Paris Sports Complex project to the GEAUX Corporation of Tyler, Texas, in the amount of $211,358.00, was presented. Terry Townsend, Director of Public Works, came forward advising the City Council that this is the third time this has been put out for bids. He said the first time no bids were received for Contract 5; the second time two bids were received and rejected due to the high cost; and the third time the total bid dropped $133,554.00, which does fall with in their project scope. In this case they actually made some of the issues to make sure they could fall within their scope as added alternatives and the entire thing still came in under their budget. A motion was made by Councilman Bell, seconded by Councilman Weekly, for approval of the resolution. The motion carried 7 ayes, 0 nays. Mayor Fendley announced that the next item on the agenda, awarding the bid and authorizing the execution of a contract for the furnishing and delivery of labor, materials, and equipment and for performing all work required for grounds maintenance (mowing) on City of Paris parks and facilities, had been tabled and a motion was needed to bring this item from the table. A motion was made by Mayor Pro Tem McCarthy, seconded by Councilman Weekly, to bring the this item from the table. The motion carried 7 ayes, 0 nays. Mayor Fendley said that the two bidders for this service, Mr. Good and Mr. Glover, were both present and he asked Mr. Townsend to address this matter. Mr. Townsend advised that at the last meeting, it was asked that this item be tabled based on the fact that the low bidder was not present and they did not have any direct information from him. Mr. Townsend said he did ask him to attend with his information. Jackie Good with Good Tree Service was present to talk about his bid. Mr. Regular City Council Meeting June 16, 2003 Page 27 Good advised that he is a contractor with the State of Texas and he has a bid on getting bonded for his work and he knows how important it is just to bid the amount that you can do. Mr. Good said he that he can have under $300,000.00 worth of contracts bid at all times with the State of Texas. He advised that he only has one contract with the State because he wants to do his job and do it right. He said this is a family owned and operated business and they do all of their work themselves. Steve Glover came forward and read the bid specs that were sent to him before he bid on this job. Item No. 4 said bidders must have a minimum of three years experience in commercial grounds maintenance operations. He said that for Item No 5, Bidders should include a list of references for whom they have performed grounds maintenance during the past three years. Mr. Glover said he provided that information to the city last week. He referred to Item No. 6, Bidders must currently own or operate a landscape company at the time of bid and have equipment capable of performing the work required (no exceptions.) The City of Paris reserves the right to reject any or all bids, to waive any informality in bidding, and to award the bid as may be advantageous to the city. Mr. Glover said on September 17, 2002, the city did award the bid for grounds maintenance to Mr. Jack Ray Barton. On that date Mr. Barton did not have the equipment nor the experience needed to be awarded that contract. As a result of this, Mr. Barton was notified by a letter from the City's Director of Public Works dated April 17, 2003, exactly seven months later into the five-year contract that the city was terminating the contract for failure to perform the services required under the terms and conditions of the agreement. Mr. Glover said, as they are aware, he is not the lowest bidder; however, his bid is only $47.50 per year higher than the lowest. Mr. Glover requested that the City Council honestly and sincerely review his and Mr. Good's experience, background, and equipment carefully in order to assure this process will not be taking place again. Resolution No. 2003-110, awarding the bid and authorizing the execution of a contract for the furnishing and delivery of labor, materials, and equipment and Regular City Council Meeting June 16, 2003 Page 28 for performing all work required for grounds maintenance (mowing) on City of Paris Parks and Facilities to Good Tree Service in the amount of $38,000.00, was presented. After discussion, a motion was made by Councilman Weekly, seconded by Councilman Plata, for approval of the resolution. The motion carried 6 ayes, 1 nay, Councilman Bell voting no. Mayor Neeley advised that Agenda Item No. 4D, a resolution approving the sale of tax delinquent property described as Lot 6, City Block 355, being number 2015, Loop 286 N.W., had been tabled and a motion was needed to bring it from the table. Councilwoman Neeley asked to be excused from the meeting due to a conflict of interest. A motion was made by Councilman Bell, seconded by Councilman Weekly, to excuse Councilwoman Neeley and to bring the above item from the table. The motion carried 6 ayes, 0 nays. City Attorney Schenk advised that the instruction they had was to check and see if there was a bid from the Girl Scouts and in the packet of material were resolutions to award the sale of the property to the original bidder or to award that sale to the Girls Scouts. A motion was made by Mayor Pro Tem McCarthy to have the resolution for Mr. Roberts read. The motion was seconded by Councilman Guest and carried 7 ayes, 0 nays. Resolution No. 2003-111, approving the sale of tax delinquent property described as Lot 6, City Block 355 being number 2015 Lop 286 N.W. to H. B. Roberts, was presented. A motion was made by Councilman Guest, seconded by Councilman Weekly, for approval of the resolution. The motion carried 6 ayes, 0 nays. Regular City Council Meeting June 16, 2003 Page 29 A motion was made by Mayor Pro Tem McCarthy, seconded by Councilman Weekly, to allow Councilman Neeley to return to the council meeting. The motion carried 6 ayes, 0 nays. Resolution No. 2003-112, reappointing Patrick Brown and Ward Hall to serve as alternate members of the Building and Standards Commission of the City of Paris for terms of two (2) years, beginning July 1, 2003 and ending June 30, 2005, was presented. A motion was made by Councilwoman Neeley, seconded by Mayor Pro Tem McCarthy, for approval of the resolution. The motion carried 7 ayes, 0 nays. Agenda Item No. 4.F, appointing members to the Board of Adjustment and Agenda Item No. 4G were left on the table. Mayor Fendley advised that Agenda Item No. 5.A, an ordinance amending the Code of Ordinances of the City of Paris by revising subsections (b) and (c) of Section 34-22 thereof to establish water rates for residential, commercial, and industrial customers that are based upon the cost to serve each class, and revising subsections (a), (b), and (c) of Section 34-23 to establish a sewer service rate for City water customers, had been tabled and a motion is needed to bring it from the table. A motion was made by Mayor Pro Tem McCarthy, seconded by Councilwoman Neeley, to bring the above item from the table. The motion carried 7 ayes, 0 nays. ORDINANCE NO. 2003-024 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, PROVIDING THAT THE CODE OF ORDINANCES, CITY OF PARIS, BE AMENDED BY REVISING SUBSECTIONS (b) AND (c) OF SECTION 34-22 OF SAID CODE TO ESTABLISH WATER RATES FOR RESIDENTIAL, COMMERCIAL, AND INDUSTRIAL CUSTOMERS THAT ARE BASED UPON THE COST TO SERVE EACH CLASS; BY REVISING Regular City Council Meeting June 16, 2003 Page 30 SUBSECTIONS (a), (b), AND (c) OF SECTION 34-23 TO ESTABLISH A SEWER SERVICE RATE FOR CITY WATER CUSTOMERS; PROVIDING FOR A PENALTY NOT TO EXCEED $2,000.00; REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT HEREWITH; AND PROVIDING FOR AN EFFECTIVE DATE, WAS PRESENTED. A motion was made by Councilwoman Neeley, seconded by Councilman Guest, for adoption of the ordinance. The motion carried 6 ayes, 1 nay, Councilman Plata voting no. ORDINANCE NO. 2002-025 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, AMENDING SECTION XVt, CHANGES AND VARIATIONS, AS CONTAINED IN ORDINANCE NO. 1315, AS AMENDED, THE CITY SUBDIVISION ORDINANCE, TO REVISE THE LANGUAGE IN SUBSECTION (B) THEREOF TO PROVIDE FOR THE CITY COUNCIL, IN THE EVENT THE PLANNING AND ZONING COMMISSION HAS FAILED TO APPROVE A REQUEST FOR A SUSPENSION OR VARIATION FROM ONE OR MORE SUBDIVISION REGULATIONS, TO GRANT SAID SUSPENSION OR VARIATION UPON A THREE-FOURTHS (3/4) VOTE OF ALL COUNCIL MEMBERS; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE ,WAS PRESENTED. A motion was made by Councilman Bell, seconded by Councilman Guest, for adoption of the ordinance. The motion carried 7 ayes, 0 nays. Mayor Fendley advised the City Council that Agenda Item No. C, an ordinance granting a variance for the requirements of Section VIII (A), Curb and Gutter, of the Subdivision Regulations of the City in accordance with Section XVt (B), Changes and Variations, of the Subdivision Regulations of the City to the developer on Lots 1-4, Block A. Beezley Estates, had been tabled, and a motion to bring it from the table was needed. Regular City Council Meeting June 16, 2003 Page 31 A motion was made by Councilman Bell, seconded by Councilman Guest, to bring the above item from the table. The motion carried 7 ayes, 0 nays. ORDINANCE NO. 2003-026 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, PAIRS, TEXAS, GRANTING A VARIANCE PURSUANT TO SECTION XVI (B) OF ORDINANCE NO. 1315, THE CITY SUBDIVISION ORDINANCE, FROM THE REQUIREMENTS OF SECTION VIII (A), CURB AND GUTTER, OF THE AFORESAID SUBDIVISION ORDINANCE, TO THE OWNER OR OWNERS OF CITY BLOCK 317, BLOCK A, LOTS 1-4; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE WAS PRESENTED. A motion was made by Councilman Bell, seconded by Councilman Guest, for adoption of the ordinance. The motion carried 7 ayes, 0 nays. ORDINANCE NO. 2003-027 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, PARIS, TEXAS, AMENDING SECTION X OF ORDINANCE NO. 1315, THE CITY SUBDIVISION ORDINANCE, TO PROVIDE A PROCESS FOR CITY PARTICIPATION IN THE EXTENSION OR ALTERNATE SEWER COLLECTORS FOR EXISTING STRUCTURES LOCATED IN HISTORIC DISTRICTS; PROVIDING FOR A COST SHARING WITH OWNERS OF STRUCTURES BENEFITTED FROM SAID SEWER LINE EXTENSION; AUTHORIZING A CONTRACT ESTABLISHING AN ASSESSMENT AND MEANS OF PAYING SAID COSTS OVER TIME; AUTHORIZING THE COLLECTION OF SAID ASSESSMENTS WITH REGULAR MONTHLY SEWER AND WATER BILLS; PROVIDING FOR A CONTRACTUAL LIEN; PROVIDING FOR COLLECTION OF SAID LIEN; PROVIDING FOR WITHHOLDING OF WATER AND SEWER SERVICE FOR NON- PAYMENT OF ASSESSMENT; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AMD DECLARING AN EFFECTIVE DATE, WAS PRESENTED. Regular City Council Meeting June 16, 2003 Page 32 A motion was made by Councilman Guest, seconded by Councilman Weekly, for adoption of the ordinance. The motion carried 7 ayes, 0 nays. A motion was made by Mayor Pro Tem McCarthy, seconded by Councilman Weekly, for approval of the Preliminary Plat of Lots 1-4, Block A, Beezley Estates, being located in the 2200 Block of 36th Street N.E. subject to the requirements of the City Engineer. The motion carried 7 ayes, 0 nays. There being no further business, the meeting was adjourned. CURTIS FENDLEY, MAYOR ATTEST: MATTIE CUNNINGHAM, CITY CLERK