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Min 08/05/1997 613 Wichita Falls, Texas Memorial Auditorium Building August 5, 1997 Items 1 & 2 The City Council of the City of Wichita Falls, Texas met in regular session on the above date in the Council Room of the Memorial Auditorium Building at 8:30 o'clock a.m., with the following members present: Kay Yeager - Mayor Don Johnston - Councilors Dan Shine - Angus Thompson - Bill Daniel - J.W. Martin - Harold Hawkins - James Berzina - City Manager Greg Humbach - City Attorney Lydia Torres - City Clerk Mayor Yeager called the meeting to order. Invocation was given by Reverend Greg Neal, Beverly Drive United Methodist Church. Item 3a Sharon Brumfield, Police Department Field Services Division Secretary, was honored as Employee of the Month for the month of August. Mayor presented her with a plaque, City pin, transit tickets, dinner tickets, and a check. In keeping with the spirit of "Celebrating Our Successes", and at the same time recognizing young people in our community who have achieved success within the perimeters of a good quality of life and the future of our community, 1997 college and high school graduates of City employees were recognized for their achievement. Thirty graduates were recognized for their success and willingness to go forward with their careers. Mayor presented each graduate with an organizer. Mayor, on behalf of the City Council and the City of Wichita Falls commended their hard work and dedication, and look forward to taking their place in our community as we all work together to make it a better place to live. Parents of the graduates who were present were recognized and Mayor congratulated them for their sons' and daughters' accomplishment. Item 4 Paul Lance, #4 Karen Court, Wichita Falls, Texas 76310, spoke on Lake Kickapoo and provided the Council with some documents. Mr. Lance said that he had great concerns about the letter he received on Lake Kickapoo. He owns a cabin at Lake Kickapoo. He purchased this property with a boathouse and pier across the road. The boat was on styrofoam, since that is what was required before I could renew my lease. I bought this property from Don Flowers who had the boathouse across the street. I was told from many people who managed the Lake that I could fence that property as long as I left the gate open and fenced only to the waterline. Nobody could decide what the waterline was. There are other people in the same situation. I bought this property in 1970. There are four different maps showing where the cabins are located and none of the maps agree with each other. We are very confused at Lake Kickapoo. I think $100 a year is pretty steep. I do not mind paying $100 one time and an inspection fee, and I am willing to have a lock box put on my boathouse so an inspector can 614 Item 4 cont'd. come at any time. We elected a committee at Lake Kickapoo and I would like to yield the rest of my time to that committee. We appreciate if you would look at it differently before you make us move the boathouses off the Lake. Jan Brott, 108 Cliffside, Lake Kickapoo, spokesperson for lease holders at Lake Kickapoo gave Council copies of a letter from the Lake Lot Administration Office, a proposal presented by Mr. Dave Clark at the June 17, 1997 Council meeting, and an item in the terms of their lease. Ms. Brott focused on the proper procedure for executing that proposal and the letter received from the Lake Lot Administrator. She referred to the Lake Administrator's letter and page 3 of Mr. Clark's proposal, and concluded that it was not the same proposal. In addition, she informed that the procedure on Page 4, Item 24 of the lease had not been . followed. The Lake Lot Administrator's letter stated that these issues had been addressed and policies established by City Council on June 17, but according to the minutes only Mr. Clark's proposal was presented. How can City Council establish these polices if the items in the letter have not been presented to the Council? She pointed out two differences in the two different proposals. On Page 3, Item 4 Mr. Clark addresses inspection and permits for docks but does not say anything about a $25 fee as stated in the Lake Lot Administration letter. Also, on Page 1, Item 1 requires a $100 per year fee for boathouses and that all boathouses will be removed by the year 2000. Ms. Brott referred to Page 3 of Mr. Clark's proposal and stated that it does not even address boathouses. If polices were established by the Council concerning boathouses like the letter says, why are boathouses not addressed in Mr. Clark's proposal? Our lease states that adoption of additional rules and regulations must go through the City Council and since this proposal in this letter was not presented at the June 17 meeting, the Lake Lot Administration did not follow proper procedure according to our lease. We have many questions and concerns and would like to discuss these issues with City Council at a worksession to resolve these problems. Mr. Hitchcock had signed up to speak but he said he would pass since Ms. Brott had addressed his concerns. Mayor thanked them for coming and informed them that Council will not respond at this time to their questions, but we will get in touch with them shortly. Sammy Holgin, 3216 York, provided the Council with a profile on Louis Esquibel. Mr. Holgin highlighted Mr. Esquibel's community involvement and his accomplishments. He proposed that the Council rename Loop 11 as Louis Esquibel. Mayor commented that Mr. Holgin come with a united request of one person that Council can consider and relay that to the Council. Mr. Holgin informed that he is the Chair of the Mexican American Democrats and that he has received approval from Hermanas Hispanas. He has not contacted the Capri Club or the local LULAC organization. Councilor Hawkins asked if it was possible to hold a public hearing on this. City Manager replied that a public hearing may be part of the actual process to rename a street, but we will have to check. Mayor said that if it please the Council we will proceed in that direction. Councilor Hawkins commented that it would not literally be renamed because it would still say Loop 11; this would be an additional name. Deviating slightly from Council procedure, Mayor asked, if it is agreeable with the Council, that Staff proceed in the proper direction and at that time we will then conduct the necessary public hearing and allow public comment. Councilor Daniel, called a point of order, and said that the Lake Kickapoo people would probably like to have a similar response from the Council. We told them that we would not respond and take it under advisement, but we responded to this other group. How best can the Council respond to people who come up here in this forum? Mayor replied that her comment to the Lake Kickapoo people was that Council would take it under advisement and proceed in a way to address their concerns within Staff. Councilor Thompson suggested reiterating the ramifications of the discussion to prevent improper conclusions. Mayor informed that the page of the minutes provided to the Council this morning does not reflect the entire discussion held that morning and all the memo is not detailed. City Manager commented that everything contained in those letters was in the memo that was discussed by this body before you took your action, including the fees and the policies. It is all there, it is just not captured in the minutes. Even if it is not just for the Kickapoo people, I think 615 Item 4 cont'd. it is important when a point of order or procedure is challenged that if we have information that says that was followed, then I think the general public needs to know that everything in the four page memo was discussed and that is exactly how the letter was tailored, word for word from the memo. Mayor suggested that Staff come up with a suggestion on how to get back with the owners who obviously have concerns, and we will proceed in that direction. Councilor Shine said he was not present at that meeting, but he read the minutes and he felt it was like a workshop and no decision should have been made at that workshop. As a point of order, I think it should have been brought up as a policy procedure and been voted on. Mayor clarified that it was not a workshop, but a discussion session at the end of a regular Council meeting. Councilor Shine commented that he felt it was out of order, and added that it would be in order for this topic as a discussion item with a policy to be brought to the Council for a vote. Councilor Daniel stated that our policy has been that we receive comments early in the meeting and if it is the desire of the Council, as a whole or individually, during the closing comments we can ask for a request through the Mayor to the City Manager for a workshop or public forum. We would all like to respond immediately but we decided that would not be the proper move. We do have a procedure set up. Mayor clarified that when persons come before the Council during the public comments, the Council does not normally have the background on the subject. Both sides need to be fully aware of what is being discussed and this procedure allows for that. This in no way takes away any of the Council's responsibility to follow through and satisfy the questions and concerns of the citizens. It is simply that we want to proceed in a professional and well intentioned manner with all of the facts before us. Several Councilors felt that a worksession should be held to work together and solve this. Councilor Hawkins suggested that the Kickapoo people should be notified of the worksession. Item 5 The Minutes were approved as distributed. Items 6a-8e Councilor Hawkins requested that Items 6c and 8d be moved to the regular agenda. Moved by Councilor Martin that the consent agenda be approved with the exception of Items 6c and 8d. Motion seconded by Councilor Shine and carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None Item 6a RESOLUTION NO. 108-97 RESOLUTION TO AWARD BID AND CONTRACT FOR 1997 ALLEY REHABILITATION PROJECT Item 6b RESOLUTION NO. 109-97 RESOLUTION TO AWARD BID AND CONTRACT FOR JASPER PLANT #4 HIGH SERVICE PUMP MOTOR STARTER RETROFIT PROJECT TO SHERMCO INDUSTRIES 616 Item 7a RESOLUTION NO. 110-97 RESOLUTION TO ACCEPT THE PHASE I SANITARY SEWER IMPROVEMENTS COLLECTION SYSTEM LINING PROJECT AND AUTHORIZE FINAL PAYMENT TO CAT CONTRACTING, INC. Item 7b RESOLUTION NO. 111-97 RESOLUTION TO ACCEPT THE ARIZONA INTERCEPTOR PROJECT AND AUTHORIZE FINAL PAYMENT TO ATKINS BROTHERS EQUIPMENT COMPANY, INC. Item 7c RESOLUTION NO. 112-97 RESOLUTION TO ACCEPT THE BONNER STREET WASTEWATER IMPROVEMENTS PROJECT AND AUTHORIZE FINAL PAYMENT TO PM CONSTRUCTION Items 8a-8e, excluding 8d Minutes of the following boards and commissions were received. a. Tax Increment Financing Board, July 17, 1997 b. Planning and Zoning Commission, July 9, 1997 c. Commission on Human Needs, July 21, 1997 e. Wichita Falls-Wichita County Public Health Board, June 27, 1997 Item 6c Moved by Councilor Martin that bid be awarded to Berend Bros. Inc. in the amount of $45,025 for the purchase of portable horse stalls for J.S. Bridwell Agriculture Center. Motion seconded by Councilor Johnston. Councilor Hawkins pointed out that we had previously voted to accept the system if it would last for a long period of time and we were trying to get a product that we could obtain in years coming, like we are now. I was contacted by one of the bidders who was not accepted, and who felt his products met the specifications. Councilor Hawkins asked if it met the specifications and if not, why? Mayor commented that we have what is deemed a proprietary system. The original bid specifications were done as the original construction process of MPEC and was bid through the Architect's bidding process at which point there were two manufacturers in the United States who were listed as acceptable bidders. Once the bid was awarded to W. W. Manufacturing that system then became a proprietary system, because of the very labor intensive and dangerous physical capabilities caused by setting up and shutting down these systems. Everything must be exchangeable and it must be continued to be supplied by a manufacturer who has a long history in this manufacturing process. There was a local person who desired to enter in the bidding and he built a sample stall. He was given the opportunity to let us try it as a prototype, but he declined. There were several areas which his stall did not meet the same specifications of the stalls that we have in use right now. Mrs. Gahagan went beyond what was required for her to do in giving him the opportunity to participate in the bid. However, he declined to submit his stall during the bidding process for acceptance as an approved equal. Councilor Hawkins stated that we did want to set a proprietary system, but now the manufacturer's requirement of ten years should not be a requirement of the product that we use now. If the product will retrofit with this, that is what we should be looking at, not the age of the manufacturing firm that is building it. Mayor informed that during the bidding process if you have a proprietary system you have to request approval as an approved equal. This particular person did not do that, and part of the process is that you have to show you are a reliable manufacturer and that your product is being used in other facilities like this, and that 617 Item 6c cont'd. you have the capability to back this up. That is a part of being accepted as an approved equal. We did not in any way try to preclude this man from the bidding process. In almost every bid that the City puts out, the capability of being an approved equal is included. Mrs. Gahagan confirmed that was a part of the City's bidding process. She felt that one of Mr. Toby's main concerns was that we had requested that the vendors have some proof of their manufacturing ability and could guarantee that we would receive a product of the same quality as what we have currently purchased, and that is why we have the ten year minimum. Mr. Toby did point out that he had been in business in another area for a period of ten years, but he was unable to give us any references or supply us with any sources that we could go out and actually look at his equipment in use. The City does not have the opportunity or luxury to take risks with a system that we have already spent $250,000 on, and put some components in there that would not work and would not be acceptable with what we currently have. Mr. Toby did not submit anything to the Purchasing Office requesting any approved equals. He was advised as to what areas his stalls were deficient in and he never made any effort to correct that and resubmit it to us. Councilor Hawkins said that Mr. Toby informed him that he was told he had not been manufacturing agricultural equipment for ten years and, therefore, would not be allowed to bid. Mrs. Gahagan informed that Mr. Toby was given the opportunity to allow the City to test the stalls, and if he had and had tested well over the next 12-18 months then he would have proven that his product is acceptable and of the same quality as what we now have. He was not willing to do that, therefore, we could not eliminate the ten year experience requirement. Had he let us test those and they worked well, then the next time those stalls were bid out, if they worked, his products would have been acceptable. But we could not take the risk at this time of him not having experience and not allowing us to test his stall. Motion carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None Item 8d Moved by Councilor Thompson that the minutes of the 4A Sales Tax Corporation, June15, 1997, be received. Motion seconded by Councilor Johnston. Councilor Hawkins stated the he had misread this item thinking it was the 4B Board and apologized for his mistake. Motion carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None Item 9a A public hearing was held to receive comments regarding a grant application to the Federal Transit Administration to receive assistance for capital, operating and planning funds for the Wichita Falls transit system. Mayor Yeager declared the public hearing open and allowed for public comment. Mr. Dave Clark informed that this is the application for federal assistance which is the primary funding for operation of the transit system. There are three sources of funding, federal, state and local. There has been a question of the future of transit funding and the federal government is still a bit of an unknown. We anticipate that the format for operation 618 Item 9a cont'd. made through the State is likely to be consistent for the next two years. Also, the local share in the transit system is slightly reducing from what it is the current year. Currently, we have a budget of$218,875 and the local amount for the upcoming year is $194,925. We do anticipate continuation of the transit system. The primary elements for the upcoming year are the operation of the system, acquisition of two buses as replacements, and the completion of an aerial mapping digitized system. Councilor Thompson stepped out of the Council Chambers. Councilor Johnston asked if the only revenue we have from this is approximately $135,000. Mr. Clark responded that was correct. Councilor Johnston stated that our local share is $162,000 of the operating expenses. Mr. Clark concurred. Mayor allowed for additional questions or comments. There being none, Mayor declared the public hearing closed. Item 10a ORDINANCE NO. 69-97 ORDINANCE MAKING AN APPROPRIATION IN THE GENERAL FUND FOR ADDITIONAL GRANT REVENUE FROM THE TEXAS DEPARTMENT OF HEALTH AND AUTHORIZING THE CITY MANAGER TO EXECUTE CONTRACT ACCEPTING SAME Moved by Councilor Martin that Ordinance No. 69-97 be passed. Motion seconded by Councilor Shine and carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None Item 10b ORDINANCE NO. 70-97 AN ORDINANCE AMENDING THE DEFINITION OF A LIMITED RESTAURANT IN SECTION 2030 OF THE ZONING ORDINANCE; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE WAS PASSED WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW Moved by Councilor Thompson that Ordinance No. 70-97 be passed. Motion seconded by Councilor Martin. Councilor Johnston asked if we were limiting this to 1200 square feet by definition. Mr. Clark replied that this changes the definition of limited restaurant and principally incorporates the 1200 square feet maximum. Previously, it had to do more with the nature of service and the type of foods being served. Therefore, it was looked at that if a grease trap would have been required that would not have been allowed. However, in this we think that the broader Building Code should be followed and where grease traps are required they should be required. This being a limited restaurant is a smaller scale operation with a smaller area to be utilized, less parking, etc. Councilor Johnston asked what kind of seating capacity are we talking about? Mr. Clark replied that you would be talking about twenty or thirty. Councilor Johnston said that we are making distinctions in restaurants between large ones and small ones. Mr. Clark commented that this gives an ability for Planning and Zoning Commission to provide a conditional use permit in certain zones that allow the operation of a limited, smaller scale 619 Item 10b cont'd. restaurant. This opens up the Ordinance a little and is more inclusive than it otherwise would have been. Councilor Hawkins asked if this expands the use of the Tea Room. Mr. Clark replied that was correct, essentially. These are small scale operations with limited food service but didn't feel the grease trap should be the limiting factor. If a grease trap needs to be provided it should be provided. This permits a little more latitude. Motion carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None Item 10c ORDINANCE NO. 71-97 AN ORDINANCE AMENDING CHAPTER 30 OF THE MOBILE HOME PARK ORDINANCE BY DELETING PARAGRAPHS b & c OF SUBSECTION (b)(4) OF SECTION 30-10, OF THE CODE OF ORDINANCES; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE WAS PASSED WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW Moved by Councilor Martin that Ordinance No. 71-97 be passed. Motion seconded by Councilor Daniel. Mr. Dave Clark informed that this Ordinance would allow a little more flexibility in the operation of mobile home parks. Ten years ago when this Ordinance was established the regulations had to do with the set back, distance, etc. requirements. It provided that new mobile homes to come would provide new spacing as they were established and the old ones had ten years to comply with the spacing requirements, and the ten years is up. What has happened over the ten year period is those distances have been complied with on an individual basis. What this ordinance would accommodate is that rather than having a moratorium at a particular point and time, attrition would provide for the separation increases and continue to allow some additional time to take place, rather than shutting down some of the mobile home parks. If those distance requirements are met as individual mobile homes are brought in, then the same thing can be accomplished. Mr. Clark informed that the basic change is the September 1, 1997 moratorium on requirements that all these distances be accomplished. This ordinance would allow that as new mobile homes are brought in they must meet set back requirements. Those that have been there ten years or more do not need to be moved to meet the distance requirements. Councilor Hawkins asked if the park operators had been notified of this. Mr. Clark replied that they had and this is going to help them. This is enforced by Building Inspection. Councilor Daniel stated that when this Ordinance was originally adopted in 1987 as a desire and intent of the Council and the staff at that time, that certain changes come about in the operation such as the appearance and presence of mobile home parks. He asked if the intent of that Ordinance had been met. Mr. Earl Potts said that actually in 1987 it was not staff's proposal to do this. We knew it would be impossible to comply with. We have come to this date and it basically needs to be changed. If we left the Ordinance as it is, we would have to be forced to have them move the mobile homes and they would have to shut down because they could not comply. Mr. Clark clarified that over the past ten years when new mobile homes have been put in they have met the new set-back requirements. Some of the ones that were existing at that time have not changed or moved and these are the ones we are talking about here to essentially "grandfather" to allow them to continue to exist. The nature of the homes and set back have not changed. The question is do we want to tell them to move them and meet the 620 Item 10c cont'd. distance requirements or can attrition over time accomplish that? He added that the broader issue is fire safety from a point of view of distance. Motion carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None Item 10d ORDINANCE NO. 72-97 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS; PROHIBITING ENTRANCE ONTO LAKE WICHITA PRIMARY SPILLWAY; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE WAS PASSED WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW Moved by Councilor Johnston that Ordinance No. 72-97 be passed. Motion seconded by Councilor Shine. Mr. Jerry Gross informed that this was a safety question. There have been reports of some activity on the spillway that probably cause injury to some of our citizens, and our Police Department is looking for a way to enforce some rules there. We have reviewed the current ordinances and we do not believe that they give adequate enforcement capability, therefore, we have submitted this ordinance. POW Councilor Johnston questioned that the prohibited area is started from the edge of the water to the concrete structure. If you have 20 feet of shoreline in front of it, and a person is walking in front of it by definition that person would be within the zone and subject to a $500 fine. Mr. Gross stated that Legal's opinion was that because it says "onto the concrete surface," it adequately defines it to the point where the concrete surface begins, and the concrete surface does not extend back into the water when it is not at spillway level. Councilor Johnston said he wanted to make certain that everyone understood that we are talking about the concrete itself. If you are between the concrete and the water's edge, you are okay. Councilor Thompson had the same concerns as Councilor Johnston and wanted to know if signs would be posted. Mr. Gross stated that he would post a sign that states "at the beginning of the concrete structure" to define that edge rather than the water's edge. Mayor asked City Attorney for wording to better state that and that would be easier for non-legal minds to understand. City Attorney said that water's edge is a moving target depending on the height of the lake, and he did not know how to get there as far as defining a specific area without including the water's edge and the concrete surface. We all understand that we want to keep them off the concrete structure, between there and the water's edge is shoreline and we do not care. Moved by Councilor Thompson that Section 22-41(a) be amended to read as follows: It shall be unlawful for any person to go onto the primary spillway at Lake Wichita or the stilling basin at the bottom of the spillway for any purpose. The prohibited area is defined as the concrete surface of the spillway and extending down the spillway surface, into and through the stilling basin, including the side walls and appurtenances of the spillway. Motion seconded by Councilor Johnston and carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Vote on the original motion as amended carried as follows. 621 Item 10d cont'd. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None Item 10e ORDINANCE NO. 73-97 ORDINANCE WAIVING STRICT CONFORMANCE WITH THE MOST RECENT THOROUGHFARE PLAN AS SET FORTH IN APPENDIX A, SUBDIVISION SECTION 9(B)(1)(A) WITH RESPECT TO THE NORTH SIDE OF MIDWESTERN PARKWAY ADJACENT TO THE SOUTH LINE OF LOTS 8-A AND 8-13, COUNTY FARM ADDITION Moved by Councilor Shine that Ordinance No. 73-97 be passed. Motion seconded by Councilor Martin. Doug Burns, President of Bluffs Development Corporation, expressed appreciation to City Staff and the City Manager for looking at this unique tract and making suggestions which led to this compromise. The street system meets all of the Staff's requirements, plus future needs of the City and is affordable to developers. We all come out ahead in this compromise. He asked for Council's approval of this ordinance. Motion carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None Item 10f ORDINANCE NO. 74-97 ORDINANCE APPROVING A LOAN OF $87,564 FROM THE GENERAL FUND TO THE WICHITA FALLS ECONOMIC DEVELOPMENT CORPORATION TO DEFER THE COSTS OF A SALARY, BENEFITS AND RELATED ADMINISTRATIVE EXPENSES Moved by Councilor Martin that Ordinance No. 74-97 be passed. Motion seconded by Councilor Daniel. Councilor Hawkins stated that he has a concern with this money going to the BCI, and asked if it would be better if this person was an employee of the City of Wichita Falls instead. He added that the City of Wichita Falls are the ones we should be looking to and not BCI, because we do want to keep them separate. Mr. John Gavin, Chair of the 4A Corporation, stated that what they propose to do is a continuation of a partnership of an ongoing relationship with BCI. We have had a success rate in the City of Wichita Falls in job creation and economic development which has occurred between the private and public sectors. We are talking about a continuation of that. We are considering and looking at what other cities are doing and they are forming a complete separate management staff, economic development person and support staff for economic development. However, their costs are running two to three times what we are proposing. We feel that this is an absolute best means of providing value to the citizens because we already have a very successful program through BCI. If you compare the results of the City of Wichita Falls in job creations for the last five years, we are second only to Amarillo in percentage of civilian job growth. That has occurred without spending anywhere near the money that the City of Amarillo has spent. We are going to continue to have oversight from the 4A Board to the 622 Item 1 Of cont'd. BCI on a quarterly basis at a minimum and whatever other process we elect would be appropriate to make sure we are keeping City funds and citizens' dollars used to the best possible means. He clarified that in their presentation to the voters they never said that this was to shut out the BCI or to keep it separate. If that had been the case he would not have been involved in the promotion of the position. He felt that BCI has done a tremendous job in the support of this community and its record speaks for itself. Councilor Hawkins stated that he was not against BCI. I think they have done a good job. I am questioning should we go the way Amarillo has or should we go with giving this money to BCI so they can provide the support, and Mr. Gavin has answered my question. Councilor Johnston commented that it appears like we are piece mealing this thing and I do not want to dedicate some money to 4A then 4B gets another, and we really do not know what our costs are going to be because we do not have a budget. He asked if it would be possible to defer this until Council gets a complete budget. Mr. Gavin said that they had discussed that but what they want to do is get this person on board. A search process does not happen overnight and we feel in order to be successful in this process we need to have someone in place right now. It is, to a certain extent, piece mealing by running this in first, but our intent is that by the time we bring the entire budget to the Council that this will be in it. We are still limited by law on the maximum amount we can spend of 4A dollars for staffing and administration, and we will not exceed that mandated level. Councilor Thompson asked if this would be a permanent or temporary position and if there would be a point where the Board would have a person working directly for them or if this would always be flowing through BCI. Mr. Gavin replied that as long as we have the success that we envision this partnership having, basically, taking the past success, efforts, experience and the expertise that the BCI has, coupled now with the 4A dollars, we are very positive that those results will continue and possibly get better. We can only approve the payment on an annual basis so it does give us an opportunity to look at it every year. I hope that we are successful enough that it is permanent. Councilor Thompson asked what they expected the staffing for the Corporation to be. Mr. Gavin responded that the 4A Corporation will not have a staff, however, before we were talking about providing these funds for BCI, my proposal would be that we will come back to hire an economic development vice president. BCI has recently , hired a new person, Lisa Lawson, who will be more involved with the traditional chamber or City-Chamber type activities. This person will be involved directly in economic development and job creation from the standpoint of soliciting new industry and retaining existing industry or getting existing industry to expand and jobs. The 4A Corporation itself would not hire any staff, we would in essence contract with BCI to provide that source for us, and we are proposing that it will be done at a much lesser price than we are seeing in other cities. Councilor Thompson asked if it would have been more truthful if we had told the voters that rather than setting up a 4A Board that we use BCI and we would fund them directly. Mr. Gavin replied that as far as he knew there was no decision to do that as part of the election. Councilor Daniel stated that this was discussed a number of times, even through the media, and a question was asked as to how much staff would be required. Some of us indicated that some cities like Amarillo had a separate staff, and the committee, myself included, indicated a desire to utilize existing staff and if the occasion was there that we utilize BCI staff. This is not a direct funding of BCI, it is a utilization of their resources and it does fund the position through BCI for joint use with the 4A Board. I do not think it is deceptive. Mr. Gavin added that it does not even fund the entire issue. The BCI economic development budget is much greater than $87,000; we are in essence supplementing part of it but we are not paying their way. Mayor commented that in the presentation of the last 4A Corporation meeting it was made very clear that Ron Mertens would continue to be involved in economic development and would work in concert with this person. There are different functions and it is bigger than a one person job. In addition, we can look at Amarillo's budget, which obviously their sales tax collection is greater than ours, and the one in Abilene which is half a million dollars for their administrative overhead. When you look at the restriction of the statutes which restrict the administrative cost to 10%, that does not leave all that big a budget to do a full fledged economic development program and I think that is what the 4A Board is looking at. Their intent is to funnel as much of that 4A money as possible into areas where it will be more beneficial and produce the best results and that is not in creating an administrative bureaucracy within that Corporation. 623 Item 10f cont'd. City Manager agreed that the BCI can run that more cheaply than the City can. We would have to staff up greater than what they would have to because they are obviously going to supplement that business in that effort with existing staff. But the BCI pays for it through its dues membership and things like that. He raised a point that in doing the recruiting there are a lot of confidentiality issues and he does not think we could come through that very good, being a public body. You just saw a good example in the Blue Cross Blue Shield situation. I think there has to be a way for a private organization to bring those organizations to town and we can't do it if it is done here. Councilor Thompson clarified that he did not ask the questions in hostility but to clear it up for the public. If the Board is to going to work through BCI that is what we should say that we are going to do, and not mealy mouth or beat around the bush about it. Also, the public needs to know how this is going to work. Mr. Gavin informed that the 4A Board, which Council appointed, went through a very in- depth presentation in an open meeting by BCI. We analyzed why we should look at this. There are three key factors: 1) we could not do it ourselves and achieve to build our own staff without using too much of the citizens funds; 2) we can continue a partnership which has been going on for a number years and has been very successful, 3) 1 agree that this needs to be something that is very positive and we think it is a great solution and we are going to save money. Councilor Martin agreed that this was an excellent approach the Board has taken. Also, there is a double check of the Board checking and the Council checking. Councilor Shine stated that we need to let the Board do its job and we have the necessary checks in place and we must let them operate. Mayor stated that the Board is comprised of members who have been active in BCI in the past and that is the only avenue that has been available within this community to perform the function or task of economic development. I think each individual is keenly aware of the public sentiment of the relationship with BCI, and I think they have looked at it in a very thoughtful and positive manner trying to make a structure that will perform and give us the results we are anticipating. Motion carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None Mayor recognized the City Manager's wife, Carol Berzina. Item 10i was taken out of sequence and taken up at this time. Item 10i ORDINANCE NO. 77-97 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, MAKING APPROPRIATIONS FROM THE TAX INCREMENT FINANCING (TIF) FUNDS IN THE AMOUNT NOT TO EXCEED $37,830 TO SALADELI RESTAURANT FOR EXTERIOR IMPROVEMENTS AT 1600 NINTH STREET (FORMERLY GUFFEY'S DRUG STORE); FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS ORDINANCE WAS PASSED WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW Moved by Councilor Martin that Ordinance No. 77-97 be passed. Motion seconded by Councilor Daniel. Mr. Dave Clark informed that there was an error in the Ordinance. The amount of money should be $37,830 instead of$37,850. 624 Item 10i cont'd. Mr. Clark explained the concept of Tax Increment Financing. The project cost, not including acquisition, is estimated at $408,000 for the development of a new restaurant/catering facility. The participation recommended by TIF Board is $37,830 which covers work on the exterior of the building. More so of a benefit to the citizens at large is landscaping, irrigation, retaining walls, lighting and other improvements that will be accessible and very visible to the public. This will be leveraging job creation and additional property tax investment in assessed valuation for the community. This is a good project and the TIF Board recommends approval. Mr. Steve Shipp, owner of SaladDeli, expressed appreciation for this type of opportunity which provides the ability to encourage increased growth of a small business. Our facility will offer services that have not been that varied in that area. That corner has been vacant for a long time and has been somewhat of an eyesore. Funds will be used to beautify that area and add some park benches and some security lighting and landscaping to make it a much more attractive area. This business will create new jobs and will be opening the first part of September. Moved by Councilor Martin that the ordinance be amended to reflect the amount of $37,830 rather than $37,850. Motion seconded by Councilor Shine and carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None The original motion as amended carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None Item 16 was taken out of sequence and taken up at this time. Item 16 Mayor stated that it is the request of the Steering Committee that this discussion take place in a very informal manner and not to be construed as coming before the Council asking for a vote either for or against the affiliation. Mayor welcomed members of the Steering Committee and the attorneys present, who were Judge Nick Gipson, Tom Elam representing Wichita General Corporation Board, John Gavin representing Bethania Board, Frank Yeager representing Wichita County/Wichita Falls Hospital Board, Ed Moran, Jr. representing Wichita General Services Corporation, Sister Ancilla Sojka Chair of the Bethania Board, David Whitaker CEO Bethania, Jeff King, Attorney representing the City/County Board and Ian A. Boase, Attorney for the affiliation. Mayor commented that she, Frank Yeager and Judge Gipson had met early on to discuss what their role and responsibility was. They decided that the ultimate responsibility was to protect the public's interest in health care in our community and protect the public assets in respect to the Wichita General Hospital. In addition, to insure to the best of our ability that those assets are protected and that in the future the public's interest and good would be served. Mayor felt that the first question to address was what is the driving force of the affiliation. Mr. Boase states in his commentary that as we look at changing health care in our community and in the nation, we have to position ourselves to provide the best health care to the public and to carry out the missions of both hospitals. If you took the fact that the Wichita General Hospital is a public hospital and that Bethania is a Catholic hospital, I believe both hospitals have identical missions. 625 Item 16 cont'd. Mayor added that early on Council asked that we come out in the end with the result that we should have nothing less than what was agreed to in the restated lease of two years ago, and I think we have arrived there. We are in a better position in these proposed documents than we were in the re-negotiated lease that was signed January 1996. There are some differences which have occurred since the MOU was presented to the Council last September, namely, the board membership has increased from 12 to 16. As proposed in the new MOU, a new corporation was to be formed but has not and will not happen. But if the affiliation is consummated at that point, the Wichita General Services Corporation will amend their Articles of Incorporation and will be the Corporation for United Regional Health Care. There have been several steps that have occurred during this process, some of which continue as of today. Others which are not complete, I would put under the umbrella of due diligence. Our due diligence is to satisfy ourselves that this is in the best interest of the citizens of Wichita Falls and Wichita County. There are several areas that I would like to point out that we should be particularly cognizant of: 1)reserve powers which are now in the restated lease and management agreement; 2) indigent health care provisions which are also stated there; 3) unwind and mediation clauses. Mr. Ian A. Boase gave an overview of the transaction as they structured it. There are a lot of changes going on in the medical industry today and that has prompted the boards of these two hospitals to come together and ask members of the community to look at ways that the hospitals could work together to ensure there is local control, local participation, and local sponsorship going forward. Because of the number of limitations under the anti-trust laws, under municipal law, and the missions of the two hospitals, we originally conceived of a joint venture of sorts. It became important to find a way to do this in a way that preserved the missions of both hospitals. The first step was to review the management contract and the lease, and concluded that the best approach would be to restate the management contract and lease and actually restructure Wichita General Service Corporation as what we will call United Regional Health Care System if the transaction is approved. The restructuring of Wichita General Service Corporation will allow us to have a track record in terms of going to bonds just for the refinancing of the transaction. The United Regional Health Care System Board will be expanded to include appointees, nine of whom are appointed by the City/County Board, the Mayor and the County Judge. A number of them would be ex-officio members. The CEO of the Hospital, the Chief Operating Officer of the Hospital and the Sister Superior of the Holy Family of Nazareth would be on the board as well. Bethania would also have appointments. The By-laws and Articles of Incorporation would be amended essentially to create a new entity with a new board named United Regional Health Care Center. There is a description of meetings and voting requirements for the new board. As part of this new structure there was a decision, that in addition to having certain reserve powers to the City/County Board, there would be super majority voting requirements for certain decisions. Any extraordinary decisions of the United Board will require approval of the City/County Board as well. He listed the reserve powers which are in the management contract. Another aspect of the transaction involves Bethania Regional Health Care Center. That transaction has been structured in a way that assures we can avail ourselves of certain laws that allow us to combine the two hospitals. There are some limitations. We received approval from the State and Governor Bush for this transaction, and part of that approval involved the structure of this transaction. First step is that Bethania Hospital will be leased to the City/County Board on the same term as the Wichita General Hospital is leased to United, which is a fifty year term. The leases for all the hospitals are basically the same. The prime lease for Bethania that goes to the City/County Board, however, states that it is not the City/County Board that is responsible for performance under that lease. Bethania after being leased to the City/County Board would be sub-leased to United Regional Health Care System essentially on the same term as the prime lease. It is under that sub-lease that the indigent health care obligations are undertaken and continued the same as the Wichita General Hospital. The obligation to perform under all of these leases is on United and they have the obligation and not the City/County Board, and Bethania recognizes that. He pointed out that the leases are for fifty year terms and may be renewed for two twenty-five year terms in all cases. He described the Bethania sub-lease. If United did not follow the obligation under these leases there would be a breach of the lease and the entire transaction could be unwound as a result. The Assignment and Assumption Agreement, which is a direct contractual obligation agreement, creates certain contractual obligations between United and Bethania and assigns certain contracts which were not susceptible to being assigned through the sub-lease arrangement, such as managed care contracts, employee pension contracts, etc. Again it is tied through a cross default provision with the sub-leases so that any breach of that agreement 626 Item 16 cont'd. would be a breach of the other leases as well. So the transaction stays together as a whole or comes apart entirely if there is a problem in terms of breaching of the obligations of the parties. Mr. Boase informed that there were extensive discussions on the unwind and arbitration provisions. Those are described in the summary of the master agreement. In terms of the unwind provisions, it is fairly complex, but what we attempted to do is set forth basic standards of how an unwind would occur and what the considerations would be in effecting that unwind. The costs are to be borne equally by the parties and what would occur is that the assets would be divided equally, with the major assets of Wichita General going back to the City/County Board and the assets of Bethania going back to Bethania to the extent that their assets have been combined. For instance, a particular program that was operated at one hospital and not at the other, after operation for a while there would be an arbitrator to make the decision about how that would be allocated. Under the Alternative Dispute Resolution, to the extent that there is ever a dispute, we attempt to have the parties work out between them exactly how that dispute will be resolved. Mr. Boase explained the steps involved in this process. Mayor commented that they ended up having to go to the Legislature for help in respect to the State's Action Defense, which is a defense that was claimed on behalf of the City/County Board in the provision of oversight in respect to the anti-trust laws. The successful passage of that legislation in no way negates the State's Action Defense nor does it negate the authority and responsibility of the City/County Board to continue to provide the oversight in respect to anti-trust. One of the questions I hear in the community is how will prices be controlled and what will then keep the prices from continuing an upward spiral? That is where I see the role of the City Council and the County Commissioners as taking a lead here, by making the proper appointments to the City/County Board to assure that Board consists of people who recognize that oversight responsibility and will exercise that responsibility. With this affiliation it takes an added significance as far as what that City/County Board needs to do. Mr. Boase pointed out that under the Reserved Powers included are aggregate changes in the price of services by either lessee's hospitals and that includes monthly reports to the City/County Board on the status of capital and operating budgets. That gives , appropriate oversight with respect to pricing of services by United Regional Health Care System. Councilor Martin mentioned that of the indebtedness, approximately 60% going in, is from Bethania's indebtedness and so unless those bonds are paid off, he does not think it would be very equitable to say that it is going to be divided 50/50. Any new bonds that you issue could be divided equally, but coming in on this basis now, I don't think it is a fair exchange to the citizens protecting our assets to say at that point, it is going to be divided equally. Mr. Boase stated that in the event of an unwind, all bonded indebtedness will be retired and new bonds will have to be issued by the separate entities. In terms of the indebtedness it would be treated and the separate parties would go their separate ways with respect to having their own indebtedness and their own facilities. Mr. Whitaker will respond to the terms of the allocation of the 50% interest,. Mr. Boase mentioned that the Steering Committee did discuss that as a part of the due diligence and the parties are currently looking at that issue. David Whitaker, Bethania CEO, said that there are more assets being brought in by Bethania and if we divide as equally as possible there are less assets going back to Bethania under an unwind event. What we were looking for was to make this representative of a true community partnership and build some incentives in place to work issues out so that an unwind procedure would never occur. That was the point in the 50/50 approach. If you look at the net equity being brought in by both facilities, as of June 30 it was less than $1 million difference between the two. If you look at the asset side plus the liability side the net value is relatively the same and that is why we took the 50/50 approach. Not only going forward but in the event of an unwind. Councilor Martin said he understood the asset but the indebtedness is a different issue from the assets. Mr. Whitaker stated that the assets less the indebtedness comes out to net worth. If we try to revert back to pulling out 60% of the debt, 60% of the assets would come to Bethania and only 40% of the assets would go back to the Wichita General Services Corporation. That is why going in, the Steering Committee and the two Boards felt it was in 627 Item 16 cont'd. the best interest of making this a successful venture to emphasize the 50/50 nature of the deal when you look at the net worth of the two organizations. Councilor Martin asked if they plan to consolidate the property and casualty insurance into one master comprehensive plan. Mr. Whitaker replied that they were and probably through the refinancing of bonds. Councilor Martin asked if they had any objection to naming the City/County Board as additional insured on the liability policy. Mr. Boase replied that they had spoken to insurance adjusters and it will not be a problem and will be included. Councilor Martin asked what exposure the City has in respect to the self-insurance. Mr. Whitaker replied that in terms of casualties and medical malpractice, United will have a primary coverage for individual claims and an aggregate amount. We will then purchase a commercial umbrella coverage of which an amount has not been determined. He informed that Bethania carries a $25 million umbrella coverage, and he suspects it would be similar. They are both our primary; secondary layers are basically the same in terms of the amount that we self-insure the potential loss with the umbrella kicking in at the $2 million level. We have had both of those looked at actuarially, and both of the reserve funds, based on past claims history, are fully funded by both hospitals. Councilor Martin asked if the Veteran's Administration Program at Bethania would have any changes and if it would continue. Mr. Whitaker responded that their plans are to assign that contract to United and United would carry on the same efforts. Councilor Hawkins asked Mr. Whitaker if he had said that the net worth of both hospitals are approximately the same within $1 million. Mr. Whitaker replied that he believed so. That surprised Councilor Hawkins because his understanding is that the Wichita General has a very high cash reserve as compared to Bethania bringing in a high debt load. He asked if there would be an appraisal that would confirm Mr. Whitaker's statement in respect to the net worths being approximately equal or was Council to take that at face value. Mr. Whitaker responded that is a part of the due diligence process. There is the legal due diligence and also the organization and financial due diligence that each of the parties will have to undertake for their organization. The Bethania Board has completed the financial due diligence and each of the organizations has to go through that due diligence process and look at those issues. Each of the seven parties to this agreement will have to make those determinations based on what they think is the best for their individual organization. Councilor Thompson questioned whether what Mr. Whitaker had said before might not be true. Mr. Whitaker assured Council that was absolutely not the case. He clarified that your organization and Mayor Yeager will probably lead you through that due diligence process or you will depend on your City/County Hospital Board representative to assure you that the proper due diligence has been done and that what has been presented in these documents is in fact the case. One of the schedules you will be getting over the next couple of weeks, as an attachment to the master agreement, is the audited financial statements of both facilities which will show net worth, total assets and total liabilities. You will be able to look at those statements and make those determinations for yourselves and you will not have to rely on me. Those attachments are in the process of being put together and the contract will probably be a three volume contract. Mayor commented that as we get some of these documents there are certain things that we would have to recognize as confidential as we move through this process. Councilor Daniel asked if things go badly who is going to own what. Right now the City/County Board owns the General Hospital building and has the bond indebtedness, and this document says that the bond indebtedness will be retired by the new bonds issued by North Texas Health Facilty Development Corporation. Also, where does this Development Corporation fit into this whole diagram? Mayor commented that this is a change from what the Council understood from the original MOU. Our understanding was at that point that the bonds would be refinanced through the City/County Board. Councilor Daniel asked if we were essentially selling the hospital. Mr. Boase replied that it was being leased for a fifty year term. What will happen is that there will be another line running off United to the North Texas Development Corporation which is a public body structured for the purpose of issuing bonds for health care facilities. That organization will issue bonds and enter into a loan agreement with United, and essentially, that is how Bethania's current bonds are financed. Therefore, the City/County Board's bonds would be retired, as well as existing Bethania bonds, with a new set from the North Texas Facility Development Corporation. That is not going to be an owner of the Hospital, it is simply the entity that has the legal authority under Texas law to issue bonds 628 Item 16 cont'd. and enter into trust indenture and a loan agreement to make the funds available to a licensed health care facility. City Manager asked if there was a provision in this that transfers those assets, paid by the new debt, that is held by some people outside this agreement. And if those assets can be transferred back to the original owners should there ever be an unwind. Can we in defacto be selling the hospital by letting someone else pay the debt and own the debt and therefore own those assets? Mr. Boase replied that the lease provisions will ensure that there is a default. First the bond indebtedness gets repaid and those assets go back to all the original owners. City Manager felt it was important that everyone understand that regardless how it is paid back during the operating years of this situation, that those assets are not owned somewhere else other than the original owner, Bethania and the City/County Board. Councilor Daniel referred to a bona-fide offer from some entity to purchase either the Bethania or Wichita General Hospital System. Is it possible for this system, the Hospital, to consign to some entity out there and the system to disappear from the City's control? Mr. Boase replied in the negative and added that the lease is only a lease and any acquirer would only be acquiring the lease interest if they attempted to do that. But the lease has specific prohibition on any transfer of interest in the lease without the consent of the City/County Board. We recognize that these assets cannot be sold or disposed of without the vote of the bodies that control them. Mayor believed there was a provision in the statutes that the sale of the hospital, if that ever occurred, can it be called to a vote by the citizens on petition. In relation to bona-fide offers, the City Manager commented that the last sentence on Page 7 can be interpreted to stop a change in operation. It says it shall have first option to purchase, then the Bethania and the City/County Board also agree that neither of them nor their affiliates shall engage in provision of health care in Wichita Falls, Northern Texas and Southern Oklahoma. That tells me that if things are not working well and we want the URHCS gone and unless their permission would be given to leave, they are not leaving. Mr. Boase replied that if there was a breach of the terms of the agreements, since that is a provision under the agreements, that essentially would go away as a result of the termination of the , agreements. But this is specifically intended to address the situation if you have two hospitals that have been given a contract for United to operate them and the concern would be that other facilities could be opened by Bethania or by City/County Board that would compete with those facilities. It is a standard provision included specifically to ensure that the resources of all the parties are focused on providing services through this structure as opposed to creating other structures that might undermine the economics of the deal. City Manager said he understood that, but it still seems to be worded that there is a real potential blockage that would keep the City/County Board or Bethania from going a different direction even with cause unless they had the up with United to do it. Mr. Boase said that was not the intent and he would go through the actual specific language and agreement with him, and if that remains a concern we can address that. The idea was if there was a breach that the City/County Board or Bethania has the right to unwind the transaction and United cannot block that. City Manager asked how the unwind would work. Mr. Boase explained that the first step is that there is an alleged dispute, one of the parties feels there has been a breach of one of the leases, the indigent health care is not being provided according to the contract or one of the other clauses of the covenant is breached. A notice would be given of the agreements and a mediation would occur for ninety days. If that failed it would go to arbitration. The arbitrator determines if an unwind must occur. As a part of that determination, the arbitrator looks at the operating assets of the facilities and what they are worth, and goes through a process of determining the Wichita General assets and the Bethania assets, the leased facilities, the land, etc. and what will go back to each facility. With respect to those things like an operating program, such as a free standing cancer center or those assets that have been combined so they are no longer distinguishable as operating assets, the arbitrator would make a determination about the value of those and make a quid pro quo so as to liquidate those and sell them or take them and transfer one of those as an operating unit to one of the facilities in exchange for transferring something of equal value to another. City Manager asked if the subject of poor performance was dealt with. If the City/County Board has a feeling that things are not working well. How is this dealt with in this contract and do they have a provision to change service provider? Mr. Boase replied that they do not have that option; however, they have addressed the issue whereby both parties 629 Item 16 cont'd. together can make the decision to unwind. If there is a poor performance, you are going to have difficulty performing on the bond covenants. The bond covenants have early warning signals, then the next step is that the parties will get together and address an unwind. City Manager informed that bond covenants usually say if you have specific and sufficient reason and you make payments; there isn't much of a catchall beyond that. Mr. Boase commented that you are required to maintain certain ratios and if things are not working well it will show up in the financial performance. If there is a deterioration situation and the parties see that the financial performance is going down hill, they are going to address that. Councilor Johnston commented that quality of care also needs to be considered. Mayor stated that oversight comes back to the City/County Board. City Manager added that if they have the authority. Again, he asked if they City/County Board came to the conclusion that things were not going well, what is their capacity at that point to do something about it? Mr. Boase responded that at that point you are looking at management change and I think you have appointees to be called to address that. There is no direct mechanism for City/County Board to unwind the transaction, or for Bethania. City Manager referred to the Chief Executive Officer and Chief Operating Officer, it takes 75% of the vote to remove management; everything else is a simple majority. The board has 16 people and all the Chief Executive Officer and Chief Operating Officer would need is two other people to keep them from being removed. I do not think that management change would be a solution. You need to look strongly at making it a simple majority vote for their removal. Mr. Boase commented that the by-laws exclude the vote of the two executives on a removal. Councilor Daniel said this is a merger not a marriage. Once that marriage is achieved how do we make changes within the structure? Councilor Martin asked the County Judge if he was comfortable with the provision for their indigent care. If they have poor performance, the County is going to have to pay more, is that correct? County Judge replied that this formula is what we presently have with Wichita General, and what we have done is extended it another three years. We are still satisfied with it and we recommend it at this point. Mayor stated that the Bethania and Service Corporation Boards went into this with the understanding that it was gong to work. Unwind was the last result. They went into it on an equal basis and in good faith. Councilor Thompson stated that there is a lot of uncertainty as to whether it is going to work and much that is unknown. Some of us feel uneasy about it and we do not know where this is going to lead us and we have gone so far that it seems there is no turning around. One thing that bothers me is that it has not been adequately explained in regards to improved quality of care, if we want to change can we, how do the doctors feel about this, and who is behind it. He asked Mr. Boase if he was a consultant. He replied that he is an attorney. Councilor Hawkins left the Council Chambers. Mr. Boase explained that they were asked to assist the hospitals and the Steering Committee along with a consultant to come up with a legal structure to address what they wanted to do in terms of pursuing an affiliation, an effort between both hospitals. We are a transaction counsel and we do not represent specifically Wichita General or Bethania. We have been engaged by Wichita General Service Corporation and Bethania to advise in the affiliation. Each of the parties have their own counsel. Councilor Johnston asked who they were representing. Mr. Boase replied that they were advising Wichita General Services Corporation and Bethania Regional Health Care Center. But to the extent we have been working with the Steering Committee that consist of members of the City/County Board and the City and the County, we are presenting a package that was negotiated by all those parties. Councilor Thompson asked if when he is retained by someone to represent them do you tilt one way or another. Mr. Boase replied that what they are doing is advising the Council and advising the members of those two Boards that this is a transaction that we have participated in with various representatives of the community to put together the best approach to insure local control and locally sponsored health care facilities in this community. I am not advocating to the Council specifically as a typical attorney would in the capacity where I am here representing Wichita General Services Corporation. We are here to answer questions and give you the opportunity to review this and address your concerns. City Manager asked if there were any unfunded pension liabilities and if so how would they be handled. Mr. Boase replied that was in connection with the due diligence, to my 630 Item 16 cont'd. knowledge there are none, but, I have not seen the final reports. That will be reflected in the specific schedules that will be on the agreement. City Manager asked him to address the County prisoner situation and also putting City prisoners in there. There is an interpretation of when a City prisoner becomes a County prisoner or if we ever get back into the business of keeping City prisoners. He asked that they look at inserting City in the provision. Also, we have two hospitals and we have a self-funded medical plan, and he asked that he address previously negotiated rates that are discounted. We are trying to get the best deal for the plan. Mr. Whitaker informed that we will be dealing with one organization and to this point we have not been made privy to those. We still have to protect the anti-trust problems that are out there. We have not shared contractually what the terms are, for example the City Wichita Falls benefit program. We can only do that going forward at closing. If we are successful, at that point the majority of the Bethania contracts will be assigned to United. Then the United management will be sitting down with the individual parties and those negotiations will carry on. Obviously, it is not in our best interest to play a trump card about being the only hospital in town. Because the true threat to health care as we know it in Wichita Falls is not the two hospitals; the real threat to you making the decision about how you will spend your local health care dollar comes from outside this market; it is not inside this market. In addition, we have the City/County Health Board providing that oversight and looking at exactly those type issues, in what is their reserve powers in terms of approving financials and budget. There is probably more oversight into the two hospitals about being good citizens as a result of these documents that are put together now, that in realty what we have now are two stand alones. Mayor commented that the oversight has to be there in a much greater way than it has been exhibited in the past or else the public interest will not be served. That can happen by who we put on the City/County Board. Councilor Hawkins returned to the Council Chambers. Councilor Thompson referred to the health care provision dealing with indigent inmates and said that it appears to him that if you are an inmate, poor, and if a particular condition is not in their record they are going to stay where they are, is that correct? Mr. Boase replied that r this is one of the provisions that is in the existing management contract and lease agreement and it has not been changed. My understanding of what is intended for that paragraph to say is that this hospital will provide services to those individuals, and the only situations where it will not is where there is a particular expertise at another facility, in which case they will arrange for a transfer but it has to be medically appropriate. If they do not do it you have a breach of the lease agreement. Councilor Thompson asked how someone appeals if they are refused proper medical care. Mr. Boase responded that they should go directly to the hospital administration, but essentially the City/County Board is the lessor under this contract and they have the right to enforce it. So, any of the members of the City/County Board would have the right to go after that breach. Councilor Thompson found that hard to believe. Councilor Thompson said he wanted to know the mechanism for them to receive adequate medical health care and he was concerned about the way it was worded. Mr. Boase agreed that it was worded in a way that sounds negative but we did not want to modify the language from the original management contract and lease agreement because it was highly negotiated between the City/County Board, the City and County representatives, and the Wichita General Hospital representatives. That clause needs to be read with the prior paragraph and the only situation is that it will never refer an inmate unless they cannot provide that type of medical care they need. These provisions, as are reserve power provisions, are now in a contract and if they are not complied with you have a breach of contract and you will be able to make that claim. Councilor Thompson asked if Bethania receives Hill Burton funds. Mr. Whitaker replied that we received $2 million in the late 1950's and complied fully with our obligations and received our release fifteen years ago. Councilor Johnston asked how they planned to accomplish better cost control of patient care and better quality. Mr. Whitaker responded that it is clinically proven that your outcomes improve if you can do more procedures of the same type in the same setting. In those cases where it makes sense to consolidate services, that is our plan. Why do this if we are not going to try to reduce duplication of services and consolidate those services. We estimate that there is between $9413 million in savings in the first eighteen months just through making some consolidations of the administrative and overhead services and those critical services. We are working with the medical staffs from both facilities on how to consolidate the clinical services. That is where the reductions in cost savings will come from that you as the Council expect. 631 Item 16 cont'd. That is where those savings, improvements, and outcomes occur. Also, that frees up the capacity to offer new services which is another aspect. The three tenants of this is to control the residuary operating costs, improve your clinical outcomes, and to offer new services that our citizens currently do not have access to. Councilor Johnston asked if this extended all the way down to the elimination of one of the emergency areas. Mr. Whitaker explained that in the State of Texas the Texas Department of Health regulates the licenser process. That will be one of the consolidation issues we are dealing with right now . Councilor Johnston asked if the several million dollars that you are projecting to save in the next eighteen months was going to be reflected in reduced costs to the patients. Mr. Whitaker said he could not answer that because he did not know what the various affects of what your insurance company is going to do or what Medicare is going to do. But there is the target of slowing down the increase in cost of health care. I am interested in seeing that slow down but I don't think that a reduction will ever happen. Mr. Boase added that when you do reduce prices, the problem is you don't have insurance companies that are the intermediaries passing those on to the consumers, and record HMO profits from last year are a good example. Here you have a unique situation where the funding mechanism for indigent health care is to the extent that there is a surplus operating within the hospitals. That fund goes directly to assist the provision of indigent health care under the provisions of these lease agreements. I think this is something to be lauded. Councilor Hawkins asked how many jobs this was going to cost the City. Mr. Whitaker replied that they are not removing any of the existing capacity of either hospitals and there are no plans to close one facility and consolidate all to the other. Job loss is minimum and the persons who are more at risk are management. There is no reason to have two chiefs for each department. Councilor Hawkins asked if the medical staff will be the same. Mr. Whitaker replied in the affirmative. Councilor Martin commented that this will give us some control of the medical facilities in Wichita Falls and this will strengthen our position in making Wichita Falls the medical center for this region. Councilor Thompson left the Council Chambers. Mr. Gavin pointed out that the Sisters of the Holy Family of Nazareth are giving Bethania Hospital to this community and he applauds the Sisters for the action they are taking because this community is gaining what was once a privately owned hospital. Councilor Thompson returned to the Council Chambers. Mayor expressed appreciation to the Order for wanting to continue to serve this community which they have done for a long time and to provide the care to the citizens of the community through this proposed affiliation. Councilor Thompson asked if Council would discuss this again. Mayor replied that there was that option where it could be discussed again at the August 19 Council meeting. Also, we are tentatively looking at September 2, 1997 for approval of the master agreement only. Mr. Boase informed that they expect to have the entire master agreement completed by August 21 or 22 and we will get the documents to the appropriate parties at that time. It is hoped that we can address the Council on September 2 and address your questions raised by the schedules. We can in the interim address you on August 19 on the documents you now have. He mentioned that the master agreement is the agreement to go forward with the transaction, and once it is approved that document that will be the commitment to do the transaction. There will be a period of time when the bonds will be sold and that will be about four or six weeks, then there will be a closing when all the leases would be signed and the existing bonds retired and new bonds issued. The decision time will be around the time to approve the master agreement and we are aiming for September 2. We would have to have approval before we go the bond market. Mr. Lee Templar, Times Record News, requested that these documents, which can be made public, be made available in a public place. It was agreed to make these documents available at the Kemp Public Library. 632 City Council recessed at 12:30 p.m. and reconvened at 12:45 p.m. Item 10a ORDINANCE NO. 75-97 ORDINANCE WAIVING APPENDIX A, SUBDIVISIONS SECTION 9(B)(2)(a) OF THE CODE OF ORDINANCES WITH RESPECT TO PLACING CURB AND GUTTER ON THE NORTH SIDE OF OLD IOWA PARK HWY., ADJACENT TO THE SOUTH LINE OF LOT 1, BLOCK 1, FELL LANE ADDITION Moved by Councilor Martin that Ordinance No. 75-97 be passed. Motion seconded by Councilor Johnston and carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None Item 10h ORDINANCE NO. 76-97 ORDINANCE WAIVING APPENDIX A, SUBDIVISIONS SECTION 9(B)(2)(a) OF THE CODE OF ORDINANCES WITH RESPECT TO PLACING CURB AND GUTTER ON THE EAST SIDE OF FELL LANE, ADJACENT TO THE WEST LINE OF LOT 1, BLOCK 1, FELL LANE ADDITION Moved by Councilor Martin that Ordinance No. 76-97 be passed. Motion seconded by Councilor Daniel and carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None Item 100 ORDINANCE NO. 78-97 ORDINANCE EXPRESSING INTENT TO MANAGE THE OPERATION OF WEEKS PARK GOLF COURSE AS AN ENTERPRISE FUND AND ESTABLISHING THE MANAGEMENT STRUCTURE FOR SUCH OPERATIONS Moved by Councilor Martin that Ordinance No. 78-97 be passed. Motion seconded by Councilor Thompson and carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, Martin, and Hawkins Nays: None 633 Item 14c The City Council went into Executive Session at 1:00 p.m. as authorized by Section 551.071 of the Government Code, and Section 551.074 of the Government Code. The City Council reconvened at 2:10 p.m. Councilor Martin was not in attendance. Mayor announced that there was no action taken in executive session and that no appointments would be made at this time. Item 11a RESOLUTION NO. 113-97 A RESOLUTION SUPPORTING PRINCIPALS EMBODIED IN THE STREAMLINED TRANSPORTATION EFFICIENCY PROGRAM FOR THE 21ST CENTURY; AND SUPPORTING THE TEXAS TRANSPORTATION COMMISSION IN ITS RESOLUTION ON ITS IMPLEMENTATION; FINDING AND DETERMINING THAT THE MEETING AT WHICH THIS RESOLUTION WAS PASSED WAS OPEN TO THE PUBLIC AS REQUIRED BY LAW Moved by Councilor Thompson that Resolution No. 113-97 be passed. Motion seconded by Councilor Johnston and carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, and Hawkins Nays: None Item 11 b RESOLUTION NO 114-97 RESOLUTION AUTHORIZING THE SANITATION DEPARTMENT TO APPLY TO NORTEX FOR A SOLID WASTE GRANT TO CONTINUE THE BACKYARD COMPOSTING PROGRAM AND TO EXPAND THE CURBSIDE ORGANICS Moved by Councilor Hawkins that Resolution No. 114-97 be passed. Motion seconded by Councilor Thompson and carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, and Hawkins Nays: None Item 11 c RESOLUTION NO 115-97 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WICHITA FALLS AUTHORIZING THE WICHITA FALLS POLICE DEPARTMENT TO PARTICIPATE IN A JOINT OPERATION WITH THE DEPARTMENT OF TREASURY, BUREAU OF ALCOHOL, TOBACCO AND FIREARMS IN SUPPRESSING THE USE OF FIREARMS IN THE CITY OF WICHITA FALLS Moved by Councilor Thompson that Resolution No. 115-97 be passed. Motion seconded by Councilor Johnston. Mayor noted that the date on the resolution was incorrect. City Clerk informed that the date error had been corrected. 634 Item 11 c cont'd. Motion carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, and Hawkins Nays: None Item 11 d A proposed resolution was presented rejecting bids for an irrigation system in Lamar Park. Moved by Councilor Shine that proposed resolution be passed. Motion seconded by Councilor Hawkins. There was a question as to the extreme bids and whether the entire park should be done. Mr. Murphy stated that this is a budgeted item and the $40,000 bid is for the entire park and it is a good bid. Mr. Murphy recommended doing half the park now and if there is a public demand that we address that later. Moved by Councilor Hawkins to table this item until August 19, 1997 Council Meeting in order to determine if the entire park should be done now. Motion seconded by Councilor Johnston and carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, and Hawkins Nays: None 01 limp, Item 11 e RESOLUTION NO. 116-97 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF WICHITA FALLS AUTHORIZING THE CITY MANAGER TO ADVERTISE FOR BIDS FOR TWENTY-FIVE (25) OUTDOOR WARNING SIRENS Moved by Councilor Thompson that Resolution No. 116-97 be passed. Motion seconded by Councilor Daniel. City Manager informed that five of these sirens were put in at the beginning of the year and the system called for 28 or 29 to be put in, and we would like to get one for a backup. This completes the plan. In order to meet the March deadline we need to get started now and the 4B Board needs to be informed that this is a high priority. Motion carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, and Hawkins Nays: None Item 12a RESOLUTION NO. 117-97 RESOLUTION TO ACCEPT THE SOUTHWEST LIFT STATION AND FORCE MAIN PROJECT AND AUTHORIZE FINAL PAYMENT TO JALYN CONSTRUCTION COMPANY 635 Item 12a cont'd. Moved by Councilor Shine that Resolution No. 117-97 be passed. Motion seconded by Councilor Daniel and carried by the following vote. Ayes: Mayor Yeager, Councilors Johnston, Shine, Thompson, Daniel, nd Hawkins Nays: None Item 13a City Manager made the following correction. The curb and gutter should read sidewalk. Discussion was held for waiver for sidewalk requirements of Section 27-30 of the Code of Ordinances for Lot 6-A, Block 13A, Amended Bateson Second Addition. Mr. Michael Cox informed that this was located on Eastside Drive and Sullivan Street. There is no sidewalk at the location at this time and it is a high density in residential population. There is some side walk in the area on Sullivan and Eastside Drive. It is technically feasible to construct a sidewalk and no reason to waive it. Item 14a Councilor Shine stated that they were very happy with the progress at the golf course and he wanted the golfers to realize that if there are questions or concerns that they can contact the management out there. The management will make the determination on the passes in addition to other decisions. Councilor Shine said he still has a problem with the point of order regarding the lake lots. He did not think a consensus should be taken at a workshop; it would be better if we came back and had policies and had a vote on it. Councilor Daniel referred to Councilor Shine's comments about Lake Kickapoo. There are a lot of questions and a lot of misunderstandings, and that is a good reason to have a public hearing to discuss the situation between the staff, Council and those involved. Also, he addressed calls he has received on cars being towed away from Sikes Senter and he wanted the public to know that the City does not have control over private property. Councilor Hawkins hopes that everything in regards to the Lake Kickapoo situation is put on hold and that information will be sent out to the lease holders. He thanked TXDOT for the asphalt work done along S.H.240. Councilor Johnston commended the Police Department for the good job they are doing. Councilor Thompson asked for a report from the Police Department on criminal activities and the progress in prevention of their activities for the past year Mayor expressed appreciation to the Council for their interest particularly with the hospital presentation today. Councilor Hawkins read a resolution which proposed making the wearing of ties illegal in Wichita Falls during the time period beginning June I and ending September 30 of each calendar year. He proposed that this be passed and if not that Mayor consider this as a proclamation. There was a lack of interest and support from the Council for this. Item 14b City Manager informed that there was a flashing light at Brook and 8`h Streets and it will go to a stop sign on 81h Street. He informed that there will be a Council worksession on Wednesday at 2:00 p.m. 636 Item 14b cont'd. City Manager commented that if there is a policy set by Council we follow it until it is changed for whatever reason. Regarding Lake Kickapoo, he recalled that staff was instructed to proceed with the exception of the re-leasing of the lots. I welcome the chance to review it if you like. Councilor Thompson concurred that Council had agreed on everything that Staff had recommended. City Manager said that Staff needs direction as to what the Council wants to do at this point. Councilor Daniel stated that we as a Council body moved too quickly and it is not Staff's fault. We need to stand back and look at it again and re-direct Staff. Councilor Thompson said that when we decide on the direction we want to go that is how we should proceed. If a citizen comes in with something different, we should stand up and say that is not the way it occurred at the Council Session. He was disappointed by that. The City Council adjourned at 3:00 p.m. r, PASSED AND APPROVED this day of V I 1 6 Xk 1997. KATFJRYN A. YE GER MAYOR ATTEST: Lydia Torres City Clerk