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Min 12/31/1985 126 Wichita Falls, Texas Memorial Auditorium Building December 31 , 1985 Items 1 & 2 The City Council of the City of Wichita Falls, Texas, met in called 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. Gary Cook Mayor Charles Harper Charles Thomas Lindsey Walker Councilmen Bill Palmer Craig Wilson James Welburn James Berzina City Manager Jeanie Thompson Assistant City Attorney Wilma J. Thomas City Clerk Fred L. Werner Chief Accounting Officer The invocation was given by Councilman Wilson. Item 3 The new County Judge, Nick Gipson, was welcomed by Mayor Cook. The Mayor stated that the purpose of this meeting is to consider designating a certain area as reinvestment zone number one. Tax increases could be captured in the amount of $80,000 in the event we implement tax increment financing this date. A motion was made by Councilman Thomas to adopt an ordinance designating a certain area as Reinvestment Zone Number One, effective December 31 , 1985, subject to working out details of the plan this morning. Motion seconded by Councilman Palmer. Jeanie Thompson, Assistant City Attorney, noted that as an option they could adopt it to be effective until September 30, 1986. She also suggested that it could be made for 22 years. Councilman Palmer asked what happens after ten months? Could it be extended? She stated that it could not. Councilman Thomas noted that if we make it for 15 years it cannot be extended more than 15 years, but it can be reduced, and dropped. He feels that 15 years would provide enough tax base and loan value to purchase and sell bonds. You would have a working capital to get started. Councilman Palmer does not feel that we can sell 20-year bonds for the tax increment financing plan. He would rather go with the 22 years, and stop it earlier if we want to. Councilman Walker asked if we are saying today that the city would go along with it now, and hope that the other entities go along with it? Miss Thompson stated that if we decided this was not the vehicle we wanted to use, then we could repeal it on September 30, 1986. Even though it was passed for 22 years, and it turned out that tax increment financing was not the best plan, it could be repealed on September 30 if no money had gone into it, and none spent. If the ordinance is passed today, the Board of Directors will do a project plan and financing plan. During that financing plan, the County will have an opportunity to participate in the amount of 85 percent. It is pretty well up to the school district at this time, but it wouldn't hurt to go ahead and contract for fifteen percent reduction if the El Paso case is overturned. The contract could be made contingent upon them contributing or not. Councilman Wilson stated that he favors the longer term for tax increment financing. It is the tool that gives us the best vehicle for land acquisition. In terms of a long-range finance tool , the revenues are not there to give 127 Item 3, cont'd. us what we need on the short term. He does not favor the taking of the tax increment from the school district and county. We don't have a plan at this time. He believes it would be more cooperative to develop a plan, and then go to them and ask for their participation. A land acquisition tool should be developed, and then come to those entities and ask for their participation. Councilman Thomas agreed, stating that the school board is holding up on the El Paso case. We . need to sit down with the County, and work out our differences. We tried to do this in 1983. Councilman Wilson noted that no new tax dollars are generated. If we capture them they still go into the coffers of the city, county, and school . Councilman Thomas stated that it will cost the County $20,000 if it is implemented today. Mayor Cook stated that this is one of the problems he sees. He will not vote for establishing it today, but would consider it after January 1 . We have a decision to make on the river project and convention center, and this decision will have an impact on those plans. Mayor Cook noted that he, Miss Thompson, and Mr. Werner visited the Dallas firm of Fulbright and Jaworski recently. They were informed that we are looking, at best, at a six-month arrangement of getting a financing tool available in a public/private partnership. If we do this, we are limiting ourselves to a nine-month plan. We are looking at the Texian, Sheraton, and Hilton in that area. The County is interested in capturing this tax, and also interested in working with the City for development and putting that tool in place. Councilman Thomas stated that if we don't vote it in today, we are looking at 1987 before we have any funds. The Hilton is almost finished, and the Texian would not be more than 25 percent. There would not be much with the Sheraton. Mayor Cook noted that we need to devise the plan and capture the financing. For the potential harm that they may create, and the short time that we would have to implement the plan, is not that much difference. Today they would capture $58,000. Councilman Walker stated that between now and September the City would have this, and any funding we have to acquire land will depend on the amount we generate. We can capture this money. He believes it is in the best interests of everyone that we move on. He favors tax increment financing, if we don't get too aggressive before we see what the other entities will do. Councilman Thomas stated that this is the reason he proposed doing it today. He believes that if this Council saw any problems that we could not work out with the county and school , then we would do away with it. Mayor Cook stated that everything he says is correct, but in 24 hours we will still have the same thing with the county. He would propose that we table it until January 7, and adopt and implement a plan following that time. Councilman Thomas noted that this is his third year on the Council , and we have worked on it at least that long. Mayor Cook stated that it was brought up in 1983, and the county and school wanted to delay. The county wanted the legislature to work out some of the problems in the statute. It was not brought back in 1984 for various reasons, and in 1985 we brought it back because of the river improvements and convention center. He wants to wait until January 7. The money will not be lost. It will still be there. We would be postponing $20,000 for one year. Councilman Thomas and Walker noted that this money has not been designated. It could be spent for anything else that may be needed. Mayor Cook stated that what we would lose would be $20,000 per year. County Judge Nick Gipson stated that he has only been at this job for one week. He does not know exactly what has gone on before, but he thinks the school district does not want to participate in this. It has not been on the agenda of the county commissioners. He has talked with Judge Bacus , but he cannot tell them what the feelings of the commissioners' court are. He thinks they would be in favor of considering the implementation of tax increment financing after the first of the year from the extent of the loss of this tax base. He agrees with Councilman Thomas in that they feel like they are progressive, and he wants to work with the city. He would be worried about it passing, and then going back to the commissioners to try to explain why it passed. He believes input from the commissioners would be helpful . He wants to work with the city, and he believes the city wants to work with them. 128 iItem 3 cont'd. I Councilman Thomas stated that he has worked more with local people. He is on the BCI Board. If we don't go ahead with this, and don't show some imovement, and if they downscale their operations, they feel that the losses ' would be as much in ad valorem taxes as we have here this morning. We will . have nine months to explain it and go forward. He is afraid if we don't do it this morning, it willbe this time next year before we do it. Judge Gipson stated that he does not feel that the commissioners have I spoken on it as a body, but he would like to know more about it so he can explain it to them. He has been under the impression that they would be more in favor of considering it after the first of the year, but he is not speaking for them as a position. Councilman Thomas feels that if we don't capture { it now, we will lose it in 1987. Judge Gipson would like to have it a few more months to study it. { Assistant City Attorney Jenie Thompson stated that there has been a change since 1983, and now the law states that it can be implemented after the fact. Councilman Walker noted that four seats on the council will be up for election in April , and they may want another whole year to look at it. This is a temporary move to hold it in place. They have until September to either scratch or go forward with the plan. Mayor Cook stated that you have to make progress, and you have to do it prior to the election. He would propose to do it in January. Any Council can terminate it if there is no debt. If it is done before April , the three members of this Council who are not up for election could be appointed to work on the plan. Moved by Councilman Welburn that this matter be tabled, and reconsidered on January 7, 1986. Motion seconded by Councilman Wilson, and failed by the following vote. Ayes: Mayor Cook, Councilmen Wilson and Welburn Nays: Councilmen Harper, Thomas, Walker, and Palmer Councilman Harper stated that he feels that it is important that we go on, and he would only vote for it in case we could stop it if we cannot come up with an agreement before September. He also mentioned the boundary, stating that it looks like very little is residential . He also wonders why we left out those ten blocks? Roger McKinney stated that there was enough residential that they did not have to get more. Other properties were commercial . You can only have ten percent residential . Councilman Harper stated that we will have a cancer in the zone if we have to spend money in it. If we are going to redevelop that whole area , then it looks like we would have to have the whole area in tax increment financing. Mr. McKinney stated that it could be expanded, but we would still have the same process to go through, and no more than ten percent residential . The same ratio will apply. Jeanie Thompson stated that any changes in the boundaries, after adoption, could be made only on the recommendation of the board of directors. Councilman Walker noted that it would appear that this small ten-block area would be a problem if we can 't get it. Councilman Welburn stated that it has been his experience with plans that it takes a certain amount of time, and that much time is usually required. You can screw it up in less time and spend the rest of the time trying to straighten it up, or you can give it the amount of time needed, and follow with an orderly progression. Councilman Palmer stated that he did not want to see us pass this ordinance binding future potential buildings to that one area. Councilman Thomas withdrew his motion. Moved by Councilman Harper that this matter be tabled until March 18, 1986, to give the Planning Department a chance to rework the zone area, and meet with the commissioners. Miss Thompson stated that when you are changing boundaries, you have to have 60 days notice for a public hearing. The hearing can be set for 60 days after today, provided that the Planning Department had time to work with the figures. A hearing can be set on March 18, 1986, and pass the ordinance on the same day. 129 Item 3 cont'd. The City Council set March 18, 1986, as the date of the public hearing, and consideration of the ordinance. Motion seconded by Councilman Thomas, and carried by the following vote. Ayes: Mayor Cook, Councilmen Harper, Thomas, Walker, Palmer, and Wilson Nays: Councilman Welburn Item 4 No one desired to address the Council on the convention and river projects. Councilman Harper proposed that the Council decide on the location of the Civic Center no later than January 21 , 1986. We can stop a lot of problems we have had in the past if we make that decision. Mayor Cook was hopeful that the financial data can be obtained by that time. A decision has to be made on the river project in February. He stated that in meeting with Jaworski and Fulbright, they learned some ways they can't do it, and some things they can do. Councils cannot bind future councils in a lease agreement. A non-profit corporation could be established on behalf of the city. The cost ramifications of bonding will require a financial commitment on the part of the city. We might have to establish an increase in the tax rate to retire the indebtedness. In a public/private partnership there is no indebtedness incurred by the public sector, and all incurred by the private sector. A not-for-profit corporation would take about six months to establish. Councilman Harper requested a work session on January 7 to look at all financial aspects of the civic center and river project. Mayor Cook suggested that we schedule the proposals on the civic center at a specific time so that those here for that purpose will not have to wait. Councilman Wilson would like to structure the hearings on softball fields to make it convenient for the participants. The City Manager suggested that this be delayed until the January 21 meeting. There was no other business, and the meeting adjourned at 10:00 A.M. . PASSED AND APPROVED this 01_4'e day of , 1986. d y, ok, Mayor ATTEST: Wilma J. Thomas, CMC, City Clerk