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09/22/2014MINUTES OF THE REGULAR CITY COUNCIL MEETING OF THE CITY OF PARIS, TEXAS September 22, 2014 The City Council of the City of Paris met for a regular session at 5:30 p.m. on Monday, September 22, 2014, at the City Council Chamber, 107 E. Kaufman, Paris, Texas. Present: Mayor: Matt Frierson Council Members: Richard Grossnickle; Aaron Jenkins; Billie Lancaster; Benny Plata; Edwin Pickle; and A.J. Hashmi City Staff: John Godwin, City Manager; Kent Mellyar, City Attorney; Janice Ellis, City Clerk; Gene Anderson, Finance Director; Shawn Napier, City Engineer; Bob Hundley, Police Chief, Larry Wright; Fire Chief; Jerry McDaniel, Public Works Director; Doug Harris, Utilities Director; and Priscilla McAnally, Library Director Opening Agenda 1. Call meeting to order. Mayor Frierson called the meeting to order at 5:30 p.m. 2. Invocation. Reverend Bob Bush gave the invocation. Pledge of Allegiance. Council Member Pickle led the pledge. 4. Citizens' Forum. Bob Bush, 507 CR 32050, Brookston, Texas — he said several clergy no longer wanted to give invocation at City Council meetings, because of the issue between City Council and PEDC, but that he was always willing to do so. Carolyn Williams, 1205 W. Center — she said she was involved in a confrontation with the police department at Exum Plumbing on August 19. She said she was there to protest and prior to the protest the police could not even tell here where to stand. Michael Glatfelter, 1345 S.E. 6a' Street — he said read the PEDC Defenbaugh summary report. He said he read about coercion of the former mayor, conflict of interest by the former Regular Council Meeting September 22, 2014 Page 2 mayor, insider information, and money given without a contract. He said they needed to shut down the PEDC. Robert Moseley, 3915 Shannon — he said the Defenbaugh report reflected every indication of fraud, waste and abuse and that subpoenas needed to be issued and a grand jury convened. Louise Moseley, 3915 Shannon — she said she was impressed with the very educated PEDC Board Members and referenced Steve Grubbs as the CFO for the hospital and John Brockman as a loan officer for a bank. She said if they ran business like they did the PEDC, they businesses would be bankrupt. Mayor Frierson said the public forum was not for the purpose of attacking individuals. Mrs. Moseley said subpoena power was needed to get to the bottom of this. Brenda Cherry, 1442 Fitzhugh — she said some of the police officers had a disrespect for people of color and wished that the city officials cared as much about people and feelings as they did about power and money. Consent Agenda Mayor Frierson inquired of Council Members if they wished to pull any items from the Consent Agenda for discussion. Council Member Hashmi inquired about the Profit and Loss Statement for the Chamber and why there were several months in the negative. Steven Gerald explained that the budget was divided out by month and there were negative months when they had not received the hotel /motel tax. Chamber Director Melissa Cook said the year -end budget was balanced. A Motion to approve the Consent Agenda was made by Council Member Pickle and seconded by Council Member Lancaster. Motion carried, 7 ayes — 0 nays. Approve the minutes from the City Council meeting on September 8, 2014. 6. Receive reports and/or minutes from the following boards, commissions, and committees: a. Historic Preservation Commission (8 -12 -2014) b. Paris Economic Development Corporation (8 -12 -2014 & 8 -21 -2014) 7. Receive August monthly financial report. 8. Receive August drainage ditch maintenance report. 9. Approve amendments to the Visitors & Convention Council's budget for fiscal year 2013 -2014. 10. Approve the Visitors & Convention Council budget for fiscal year 2014 -2015. Regular Council Meeting September 22, 2014 Page 3 11. Approve the Love Civic Center budget for fiscal year 2014 -2015. 12. Approve an Amendment to the City's Ground Lease Agreement with Red River Valley Veteran's Memorial to add an additional .9022 acre. Regular Agenda 13. Discuss and act on ORDINANCE NO. 2014 -019: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, AUTHORIZING AND DIRECTING THE DIRECTOR OF FINANCE TO TRANSFER UNENCUMBERED FUNDS FROM VARIOUS DEPARTMENTS TO OTHER DEPARTMENTS WHICH ARE EXPECTED TO OVER - EXPEND THEIR ORIGINAL BUDGET APPROPRIATIONS; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; PROVIDING A REPEALER CLAUSE, A SEVERABILITY CLAUSE, A SAVINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE. City Manager John Godwin said this was an annual year end housekeeping ordinance that increased certain departmental budgets to cover anticipated expenditures and these increases were offset by decreasing other departmental budgets which had an appropriation surplus. A Motion to approve this item was made by Council Member Hashmi and seconded by Council Member Lancaster. Motion carried, 7 ayes — 0 nays. 14. Discuss and act on ORDINANCE NO. 2014 -020: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, ADOPTING A BUDGET FOR THE ENSUING FISCAL PERIOD BEGINNING OCTOBER 1, 2014, AND ENDING SEPTEMBER 30, 2015, IN ACCORDANCE WITH THE CHARTER OF THE CITY OF PARIS; APPROPRIATING THE VARIOUS AMOUNTS THEREOF; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; PROVIDING A REPEALER CLAUSE, A SEVERABILITY CLAUSE, A SAVINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE. Mr. Godwin said Council received a draft budget more than two months ago and had discussed the budget on several occasions. He said the total budget including all funds was $44,572,692, it was a balanced budget and it left the tax rate the same as the current year. Council Member Plata inquired if step increases were included. Mr. Godwin answered in the affirmative and said with the exception of EMS, raises were not scheduled to begin until January 1. He said there was time for the Council to come up with a different plan. He said they could defer or discuss again tonight. Mr. Godwin said the numbers were included in the budget, but that if Council approved the budget tonight they had until January 1 to decide how to do the raises. Council Member Hashmi said he would make a motion to approve the budget, but wanted to discuss the raises further. He said he had concerns about not giving every employee a raise. Mr. Godwin said he would place it on an agenda in October or November. Regular Council Meeting September 22, 2014 Page 4 With the exception of raises, Council Member Hashmi approved this item and seconded by Council Member Pickle. Motion carried, 7 ayes — 0 nays. 15. Discuss and ratify the property tax rate increase reflected in the budget as required by Local Government Code Section 102.007(C). Mr. Godwin explained that City Council was required to take a separate vote to ratify the property tax increase reflected in the 2014 -15 Budget in compliance with Local Government Code Section 102.007(c). A Motion to approve this item was made by Council member Hashmi and seconded by Council member Pickle. Motion carried, 7 ayes — 0 nays. 16. Discuss and act on ORDINANCE NO. 2014 -021: AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PARIS, TEXAS, FIXING THE TAX RATE AND THE TAX LEVY AND LEVYING AD VALOREM TAXES FOR THE CITY OF PARIS FOR THE CALENDAR YEAR 2014 UPON ALL TAXABLE PROPERTY WITHIN THE CITY OF PARIS IN CONFORMITY WITH THE CHARTER PROVISIONS AND ORDINANCES OF THE CITY; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; REPEALING ALL ORDINANCES OR PARTS OF ORDINANCES IN CONFLICT HEREWITH; AND PROVIDING AN EFFECTIVE DATE. Mr. Godwin said the ad valorem tax rate of $0.50195 per $100 would be maintained and this tax rate would increase property tax revenue by $189,690 over the current year's budget. A Motion to approve this item was made by Council Member Hashmi and seconded by Council Member Lancaster. Motion carried, 7 ayes — 0 nays. 17. Discuss and act on proposed amendments to the Paris Economic Development Corporation's budget for fiscal year 2013 -2014. PEDC Interim Executive Director explained these amendments were budget neutral and were unanimously approved by the Board. A Motion to approve this item was made by Council Member Hashmi and seconded by Council Member Plata. Motion carried, 7 ayes — 0 nays. 18. Discuss Paris Convention & Visitors Council minutes of May 29, 2014 and receive clarification on reference made of the economic study and upstairs remodel. Mr. Godwin said he met with Melissa Cook on August 29 and confirmed that the economic development expense was for the study done by TAMU regarding the economic impact of various programs hosted in Paris. He also said the expense for upstairs work for 50% Regular Council Meeting September 22, 2014 Page 5 of the cost of remodeling work at the office on the plaza and the expense was an eligible use of HOT revenues, because that is where the VCC manager offices. Mr. Godwin said the city attorney concurred this was a legally eligible expenditure. Council Member Hashmi said if it was legally allowed that he did not have reservations, but it was still best practices to keep the accounts separate. 19. Receive and discuss dilapidated structure report. Code Enforcement Supervisor Robert Talley gave a presentation to City Council about the progress on demolition of dilapidated structures. Mr. Talley reported that 8 structures were demolished in August 2014; 69 structures were awaiting demolition; 146 residential structures had been demolished by the City from August 2012 through the present; 42 structures had been demolished by property owners from August 2012 through the present; and an average of 5.66 structures were torn down per month over the past 6 months. Council Member Hashmi inquired of the 146 home demolished what was the cost per structure. Mr. Godwin said it was $2,200. He also inquired how many properties had been sold out of the 146 and Mr. Godwin told him 140 properties and that he had a new list and would forward to the Council. A Motion to move items 21 and 22 up was made by Council Member Pickle and seconded by Council Member Grossnickle. Motion carried, 7 ayes — 0 nays. 21. Discuss the failure to disclose and possible fraudulent activity as it pertains to the Rodgers -Wade Manufacturing and Distribution Warehouse facility appraisal as it relates to an anonymous letter presented to the City Council on March 10, 2014 and related discussions of said appraisal. If necessary during this discussion convene into Executive Session pursuant to Section 551.074 of the Texas Government Code to hear a complaint or charge against an officer or employee, as follows: receipt by the city attorney of the above referenced appraisal and subsequent events leading up to and including the city council meeting of March 10, 2014. Council Member Pickle said prior to discussion that he would like Mr. Godwin to play a video that contained excerpts of March 10, 2014 meeting. Mr. Godwin played the video excerpts and Council Member Hashmi asked that the video of the entire conversation of agenda item #11 be played. Council Member Pickle said the thing that pushed this over the edge was an appraisal and referenced that Council Member Hashmi had called Holland Harper at the time he received the anonymous letter. He asked Holland Harper to come forward. Mr. Harper told the City Council in late February he received a phone call from Dr. Hashmi and was told he had received an anonymous letter about the property of Rodgers Wade being collateralized by a $42,000 piece of property. Mr. Harper said he told Dr. Hashmi they had an appraisal for the property for 7.5 million dollars but it turned out to be worth 7.75 million dollars. Mr. Harper also said a week later he received a phone call from Matt Frierson about the same issue. Mr. Harper said he called CFO Mike Anders and sent him to the Council meeting to state the company's position. He also said they did not get the opportunity to state their position Regular Council Meeting September 22, 2014 Page 6 and for the entire time they had not been able to state their position in a reasonable and fair investigation. Council Member Hashmi said Mr. Harper was correct about the timing of the call; however, Mr. Harper had stated to him they were not worried it, and that he never mentioned an appraisal. Mr. Harper said that was not correct. Council Member Hashmi said that was Mr. Harper's position. Council Member Hashmi said the video reflects that he never mentioned the company's name, the Harper name nor did he discuss the appraisal other than what was written in the letter. Council Member Hashmi said his motion was about PEDC accounts. He also said the day after the Council meeting that he received an e -mail from Mr. Anders saying no one had asked him any questions. Council Member Hashmi said he did not know Mr. Anders but Council Member Frierson did as he had pointed him out at the meeting that night. He said when he was serving as mayor that he never stopped anyone from speaking in the council chambers. Council Member Hashmi said Mr. Anders could have stood up and said he had information. He also said that Council Member Grossnickle pointed out in his own discussion that night he had some information and if Council Member Frierson knew about it, either one could have simply told the Council. Council Member Hashmi said he took it into executive session and did not allow the city attorney, the city clerk or the city manager in executive session, because he was not sure what to do with the letter. He said he did not want a bad name coming to the City or to any individual. Mr. Harper said the company sent a packet to all of them to show them exactly what the property was worth. Council Member Hashmi said he got the packet after the Council had sent the request to PEDC and PEDC had the right to refuse the request and send it back to the Council. Council Member Pickle said that was not true. Council Member Hashmi said he felt as though he needed to show the letter to City Council, he did call Mr. Harper and he told the city manager about it, because he did not know how to word it on the City Council agenda. Council Member Hashmi said whether or not there was an appraisal that he would have stilled voted for an audit of PEDC, partly because of the receipts that he presented, partly because of what the PEDC Chair presented and partly based on statistics that were presented to the Council by Mr. Strathern. Mr. Harper said the investigation was not necessary. Council Member Hashmi said he was not involved in selection of the firm and Council Member Pickle said that was not what the Defenbaugh report said and Council Member Hashmi said he voted to direct PEDC to engage a firm. Council Member Pickle and Council Member Hashmi continued to disagree about persons who knew or did not know about the appraisal. Council Member Pickle said if any reports are turned over to the AG, that he wanted full disclosure and transparency and he thought an appraisal would have made a difference. Council Member Pickle said he agreed there were problems with the PEDC that he understood what he was trying to do but did not agree with the way he was going about it. He also said he was the Council liaison to PEDC at that time and he did voice his opinion during the loan discussions and the process and anyone could check the minutes. Council Member Pickle asked that Mike Anders come forward. Mr. Anders stated that on the morning of March 10th Jordan Harper called him and asked him to attend the City Council meeting in regard to an anonymous letter based on the Rodgers Wade appraisal as there were some discrepancies. He said he printed off the appraisal and attended the Council meeting that night. Mr. Anders said when Matt Frierson identified him in the audience he raised his hand Regular Council Meeting September 22, 2014 Page 7 thinking he would get the opportunity to come up. Mr. Anders apologized for not walking to the podium that night and saying there was an appraisal. He said he followed up via e -mail with Dr. Hashmi to let him know he was willing to sit down with him and the City Council about the appraisal, because no financial institution would loan 5.8 million dollars on a piece of property worth $40,000. Council Member Hashmi confirmed with Mr. Anders that he copied Council Member Frierson on the e -mail. Mr. Anders said he was trying to get to the point if it was an appraisal question, and that Dr. Hashmi told him there were other issues. Council Member Pickle said the tape reflected the appraisal was the issue with the majority of the Council at that time. Council Member Hashmi said that was Council Member Pickle's interpretation and there were four other Council Members that voted for it and inquired why he did not ask them about it. Council Member Pickle said it was not fair to ask them why they made the decision back then. Council Member Grossnickle said the main reason he voted against the audit was because the anonymous letter dealt strictly with this issue and nothing else was talked about. He said the credit cards had already been audited and corrections made. Council Member Grossnickle said they were dealing with the letter which really dealt with one issue and possibly involvement by Judge Biard. Council Member Pickle said in spite of, or as a result of the discussions they had heard he was going to ask the city attorney the same question he asked him the other night and he refused to answer because it included a member of the current City Council. Mr. McIlyar said it was the prior City Council. Mr. Pickle said no, he did not. Mr. McIlyar said he referenced that there were members of the City Council that were not on the current City Council. Council Member Pickle asked him if there was anyone that knew about the appraisal before they met at the City Council meeting that night. He wanted to know if any current or past City Council Members knew there was an appraisal prior to the Council meeting. Mr. McIlyar said as he told the Council at the meeting last Monday night, that he had an attorney - client privilege to Council Members whether they were current or former and there were two former City Council Members who were not on this current City Council. Mr. McIlyar said following Council Member Pickle's questions at the last meeting that he had spoken with Cleonne Drake and asked her if the remembered catching him between meetings and asking him if he knew anything about the anonymous letter agenda item. He said Ms. Drake said he told her that Shannon Barrentine that very day had found a 2010 appraisal report from Thompson Appraisal Service that was written for Community Trust Bank, that it was 80 pages long, that he did not have it with him and had not had a chance to review it. Mr. McIlyar said he asked Ms. Drake if she remember there being any other Council Members present and she told him no. Mr. McIlyar said that is what he had remembered as well, and the conversation lasted 15 -20 seconds. He said he had an e -mail that proved Ms. Barrentine took the appraisal to the legal department close to 5:00 p.m. that day and he was in the smoking task force meeting at that time. Council Member Pickle asked if he still had copies of those appraisals. Mr. McIlyar said he did have a copy of the Thompson Appraisal. Council Member Pickle said he was talking about the copies. Mr. McIlyar said he did not recall the number of copies that were dropped off at the legal department but several Council Members either picked up copies or he distributed copies to them. Ms. Barrentine said she made nine copies of the appraisal and delivered them to Billie Harris at 4:45 p.m. on March 10th. She said she specifically told Billie that Kent wanted them to distribute at the Council Meeting that night and please let him know, because she knew he was in another meeting. Ms. Barrentine said Kent Regular Council Meeting September 22, 2014 Page 8 left her office with a copy of the appraisal. Mr. McIlyar said he did not remember it that way at all and he did not have nine copies of the report in the City Council meeting, because he was in the Council Chambers from 4:15 p.m. through the Council meeting on that day. Mr. McIlyar said the item was posted to act on an anonymous letter, it was the first time it went to Council and he had no idea it was going to a forensic investigation in one meeting. Council Member Pickle asked that Council go into Executive Session. Council Member Plata said all he had to say was this finger pointing that was going on was not making them work as a Council. He said they were really being divided and they needed to put some kind of closure on this. 22. Convene into Executive Session pursuant to Section 551.074 of the Texas Government Code to deliberate the appointment, employment, evaluation, reassignment, duties, discipline, or dismissal of a public officer or employee as follows: performance of city attorney. Mayor Frierson convened City Council into Executive Session at 7:05 p.m. 23. Reconvene into Open Session and possibly take action on those matters discussed in Executive Session. Mayor Frierson reconvened City Council into open session at 7:47 p.m. A Motion to table item 22 until such time the city attorney completed his 90 day performance evaluation was made by Council Member Pickle and seconded by Council Member Grossnickle. Motion carried, 7 ayes — 0 nays. 20. Discuss and possibly act on the Defenbaugh report regarding the investigation of the PEDC. Council Member Plata said he asked for this agenda item and he said he believed that the PEDC was wasteful at times, but that he did not believe anything criminal had occurred. He said at first he thought there was a severe ethical breach but that was not the case. Council Member Plata said he wished there was a way to get some money back but he did not believe that could happen. He also said to put everyone's mind at ease, he wanted to get questions answered and in his opinion the thought the report needed to be sent to the AG for several reasons. He said 1) it would give them a different insight from someone who did not have an interest in what happened; 2) that most people wanted the information sent to the AG and if it was sent maybe the matter would be put to rest; 3) that the AG had the final say and as Council Members he thought this was the last step they could take to clarify things and to satisfy the minds of the people; and 4) it would not cost the City anything to take this action. A Motion to send the total report to the AG including Mr. Biard's conflict disclosure statement was made by Council Member Plata and seconded by Council Member Hashmi. Regular Council Meeting September 22, 2014 Page 9 Council Member Pickle inquired if they were going to send a copy of their discussions at this meeting. Council Member Hashmi asked that the appraisal also be included and whatever other information was available. Council Member Plata amended his Motion to include any additional information that any Council Member wanted to send with the report and seconded by Council Member Hashmi. City Clerk Janice Ellis asked for clarification with regard to the final report if the Council wanted the July or the August report sent, and that Council had mentioned a packet of information received from Mr. Harper that contained the appraisal. Ms. Ellis said she did not have any of that information and would need for a Council Member to provide it to her. Mayor Frierson asked that Council be specific about what they wanted to be sent to the AG for review, so there was not a last minute inclusion. He asked Council if they were referring to the preliminary or the final. Council Member Hashmi inquired which preliminary report was being referred to as they got one that was to be a final then learned it was a preliminary. Mayor Frierson referenced the preliminary report as they one they received in the box July 28. Council Member Hashmi suggested they send both reports in an effort to provide all possible information. Council Member Grossnickle said he would like Will Biard's conflict disclosure statement included. He also said he would like to include the Hayes letter or e -mail which stated some matters were grossly misrepresented in the Defenbaugh report and Ms. Ellis asked that he forward that to her. Mr. Godwin verified with the Council when they were referring to the Council meetings minutes they wanted DVDs of those meetings sent, including the March 10, 2014 meeting. Mayor Frierson said he had a Motion and a second with the inclusion of the additional information. Mayor Frierson said her understood the motivation to go to the AG, but that he hated the concept of extending any sort of negativity or perception longer. He asked what was about a reasonable expectation of receiving a response. Mr. McIlyar said if the AG did not feel like they had jurisdiction they would probably kick it back pretty quickly. He said if they sent it to another jurisdiction for review, it could take several months before the City hears anything. Council Member Plata said if it is sent to the AG it shows that they want to bring this to closure and this is what the people of Paris want to see right now. Mayor Frierson called the Motion to a vote. Motion carried, 4 ayes — 2 nays and 1 abstention, with Mayor Frierson and Council Member Grossnickle casting the dissenting votes and Council Member Pickle abstaining from the vote. 24. Consider and approve future events for City Council and /or City Staff pursuant to Resolution No. 2004 -081. None were referenced. Regular Council Meeting September 22, 2014 Page 10 25. Adjournment. There being no further business, a Motion to adjourn was made by Council Member Pickle and was seconded by Council Member Jenkins. Motion carried, 7 ayes — 0 nays. The meeting was adjourned at 8:00 p.m. MATT FRIERSON, MAYOR - cova'o_ JANICE ELLIS, CITY CLERK