The City Council of the City of Abilene, Texas, met in Regular Session on May 10, 2001, at 8:30 a.m. in the City Council Chambers of City Hall. Mayor Grady Barr was present and presiding with Councilmen Norm Archibald, Kris Southward, Victor G. Carrillo, Rob Beckham, Versie L. Brown, Jr., and Councilwoman Kay Alexander. Also present were City Manager Roy L. McDaniel, Assistant City Manager Michael Morrison, City Attorney Sharon Hicks, City Secretary Jo Moore, and various members of the City staff.

Councilwoman Kay Alexander gave the invocation.

Pledge of Allegiance was led by Meredith Varner, a fifth grader at Taylor Elementary who was accompanied by her mother, Linda Varner. Mrs. Varner is a fifth-grade teacher at Taylor.

Jo Moore, City Secretary, assisted Mayor Barr in presenting the following Employee Service Award:

20 Years, Carol E. Peterson, Housing Counselor I, Housing

Mayor Barr presented a Proclamation for May 20-26, 2001 as "National Public Works Week".

Mayor Barr asked Mr. McDaniel to introduce the environmental lab division presentation. Mr. McDaniel introduced Larry Bailey, Environmental Lab Manager in the Quality Control Division, Water Utilities Department. Mr. Bailey briefed the Council on the Division's mission, performance measures, example analysis, pre-treatment program/objectives, pretreatment facts, additional industrial waste manager duties, facilities and instrumentation, and customer service. In conclusion, Mr. Bailey recognized Environmental Lab employees in attendance.

No Council action was required.

There being no corrections, additions, or deletions to the April 26, 2001 Council Minutes, Councilman Southward moved to approve the minutes as printed. Councilman Carrillo seconded the motion and the motion carried.

AYES: Councilmen Archibald, Southward, Carrillo, Beckham, Brown, Councilwoman Alexander, and Mayor Barr.

NAYS: None.

Mayor Barr noted Item 3.6 was withdrawn at the proponent's request and is removed from today's agenda, and Item 3.7 was denied by the Planning and Zoning Commission and is removed from today's agenda pending appeal. Councilman Carrillo moved to approve consent agenda items 3.1 through 3.4, as recommended by the staff and approval of first reading of items 3.5 and 3.8. Councilwoman Alexander seconded the motion and the motion carried.

AYES: Councilmen Archibald, Southward, Carrillo, Beckham, Brown, Councilwoman Alexander, and Mayor Barr.

NAYS: None.

1. Bucket truck for Traffic Signals division, Bid #CB-1036. The bid was awarded to Equipment Technology, Inc., the low responsible bidder in the amount of $43,211.00 as recommended by staff.
2. Resurfacing and restoration of S. Mockingbird/Barrow Street from S. 3^rd Street to S. 14^th Street, Bid #CB-1039. The bid was awarded to J. H. Strain & Sons, including the add alternate for a total bid of $432,172.58, as recommended by staff.

Resolutions:

3. Oral Resolution authorizing a commercial Ft. Phantom Lake lot lease with Tige Boats, Inc. for a private boat launch area.
4. Oral Resolution authorizing City Manager to execute a Professional Design Service Agreement with Hibbs & Todd, Inc. for the Buck Creek Lift Station Rehabilitation project. The engineering fee shall not exceed $125,000.00 for service.

Ordinances:

5. Approval of first reading - Z-01101 - Rezone from AO & RM-2 (Agricultural Open Space & Residential Multi-Family) to RM-2 (Residential Multi-Family) zoning district located at 3549 Curry Lane, and set a public hearing for May 24, 2001 at 8:30 a.m.

6. Withdrawn at proponent's request - Z-01301 - Rezone from RM-2 (Residential Multi-Family) to GC (General Commercial) zoning district located at 302 N. Mockingbird.
7. Denied by the Planning & Zoning Commission and removed from the agenda pending appeal by the proponent - Z-01401 - Rezone from RS-12 (Residential Single Family) to LC (Limited Commercial) zoning district located at 1394 S. Pioneer.
8. Approval of first reading - Z-01601 - Rezone from AO (Agricultural Open Space) to GC (General Commercial) zoning district located at Hwy. 277 and Rebecca Lane, and set a public hearing for May 24, 2001 at 8:30 a.m.

4.1 Jo Moore, City Secretary, briefed the Council on a Resolution canvassing the returns and declaring the results of the May 5, 2001 City of Abilene General Election. The returns show that Jimmy McNeil was elected to Council Place 5 and Kay Alexander was elected to Council Place 6, each having received the majority of the votes cast. Total votes cast were as follows: Council Place 5: Andre Dukes - 33, Russell Kerby - 233, Jimmy McNeil - 1285. Council Place 6: Kay Alexander - 1324. Ms. Moore also stated there had been an error in the canvassing of the votes in which 65 ballots were not counted in Precinct 417, which, although it would not have affected the outcome of the election, will be noted on the canvass return. The error occurred when the 65 ballots were placed in the counting machine upside down. Ms. Moore further stated the Election Division of the Secretary of State had been notified of the error and the State office advised Council to proceed with the canvass and declare the results. The option to file for a recount is that of the losing candidate.

Ballot and Seal Certificates were received by mail from each presiding judge, duly signed by same and released to the City Secretary for filing in the official election records.

Councilman Brown moved to approve the Resolution canvassing the returns and declaring the results of the General election held May 5, 2001 as presented by staff. Councilman Archibald seconded the motion and the motion carried.

AYES: Councilmen Archibald, Southward, Carrillo, Beckham, Brown, Councilwoman Alexander, and Mayor Barr.

NAYS: None.

The Resolution is numbered 19-2001 and is captioned as follows:

4.2 City Secretary Jo Moore presented to the Mayor and each member of the City Council their annual paycheck of one ($1.00) dollar. Mrs. Moore then presented to outgoing Councilmember Versie Brown, Jr. a City of Abilene clock and logo lapel pin, along with a City of Abilene logo charm bracelet for Mrs. Brown, who was unable to be in attendance. Council expressed their appreciation to Mr. Brown for his service on the Council.

4.3 City Secretary Jo Moore administered the Oaths of Office to Jimmy McNeil, Council Place 5 and Kay Alexander, Council Place 6.

4.4 At 9:15 a.m., Council recessed for a reception honoring newly elected Councilman McNeil, re-elected Councilwoman Alexander, and outgoing Councilman Brown.

Following the reception, Council reconvened into Regular Session at 9:45 a.m.

Mayor Barr welcomed new Councilman Jimmy McNeil and re-elected Councilwoman Kay Alexander, stating Council is looking forward to serving with them.

4.5 City Manager Roy McDaniel briefed the Council on an Oral Resolution concerning financing options for the O. H. Ivie Project. Mr. McDaniel stated the decision before Council today is to approve a payment plan for the project. Mr. McDaniel reviewed the payment schedules as follows: Schedule 1, equal principal on $31 million for 20 years and an 8-year schedule on $30 million refundable anytime, with a scenario if Rural Development (RD) provides a $5 million grant and $25 million 40 year loan under their requirement and a scenario if RD provides $0 and we refund the $30 million under our choice; and Schedule 2, modified principal payment on the $31 million utilizing the payoff of the parallel pipeline with the same scenarios as shown under Schedule 1. Mr. McDaniel explained the Rural Development (RD) funding is speculative at this point and could be anywhere from $0 to $30 million in any combination of grant and loan, and RD has informed us their funding if approved will come at the end of the project. Mr. McDaniel then recognized Joe Smith of First Southwest Company, who reviewed the schedules with Council. The bid openings for the sale of the $31,000,000 Combination Tax & Waterworks and Sewer System Revenue Certificates of Obligation, Series 2001A would be scheduled for the June 28, 2001 Council meeting and the sale of the $30,000,000 Combination Tax & Waterworks and Sewer System Revenue Certificates of Obligation, Series 2001B would require a special Council meeting to be held July 13, 2001.

Council, staff and financial advisor discussion and questions included: if a long term RD loan would be beneficial in any way, a 40 year loan lowers payments but almost triples in interest, a $5 million grant being needed in order to borrow $15 million on RD's terms, how much is this costing if RD denies the grant and we've already issued this debt, refunding is calculated on today's rates, but the cost would probably be approximately $200,000, the growth in the city and outlying areas will contribute to paying for the project was noted.

Mayor Barr recognized Ken Martin of Jacob & Martin, Inc., who referenced the memo he sent to Council that stated RD makes the amount of grant determination based upon the water rate to be charged to the rural contract customers. The lower the debt payment for the first few years will likely result in a lower grant amount. Once the debt schedule is decided on, the RD budget will need to be prepared which will be used to determine the rural water rates and the amount of the grant eligibility.

Council and staff discussion continued as follows: the priority being to make the best decision for our customers instead of focusing on the RD funding, adhering to policy as close as possible but looking at all the circumstances, this $61 million not being a part of the calculation when funding is rolled over and when CO debt is considered this spring, the fact that this debt does not touch the tax rate, preference noted that when the CO retires it actually does retire and that it would require Council action to add this $61 million to future COs, and it was also noted the $61 million will be paid for from water revenue and not taxes.

Mayor Barr thanked all in attendance that participated in the discussion.

Councilman Beckham made a motion to approve by Oral Resolution Financing Schedule 2 as presented for the O. H. Ivie Project. Councilman Southward seconded the motion and the motion carried.

AYES: Councilmen Archibald, Southward, Carrillo, Beckham, McNeil, Councilwoman Alexander, and Mayor Barr.

NAYS: None.

4.6 Councilman Archibald made a motion to remove from the table and agenda the Resolution directing publication of Notice of Intention to Issue Combination Tax and Waterworks and Sewer System Revenue Certificates of Obligation, Series 2001, for the O. H. Ivie Project. Councilman Southward seconded the motion and the motion carried.

AYES: Councilmen Archibald, Southward, Carrillo, Beckham, McNeil, Councilwoman Alexander, and Mayor Barr.

NAYS: None.

David Wright, Director of Finance, briefed the Council on a Resolution directing publication of a Notice of Intention to Issue Combination Tax and Waterworks and Sewer System Revenue Certificates of Obligation, Series 2001A, for the O. H. Ivie Project. Mr. Wright stated with the commencement of construction of the O. H. Ivie Project, the City has planned to finance the $61,000,000 cost by the issuance and sale of Combination Tax and Waterworks and Sewer System Revenue Certificates of Obligation. The $61,000,000 will pay the City's contractual obligations for construction of a water transmission line, related water treatment facilities, and electric transmission line for delivery and treatment of water from the O. H. Ivie Reservoir. The application submitted to the USDA Rural Development (RD) on behalf of our contractual customers is pending, and therefore staff is unsure the participation level of grant versus loan that might be approved. However, a letter from USDA Rural Development, Acting State Director Richard Perryman, stated that the City could proceed with construction prior to their approval without jeopardizing our application. In order for the City to proceed, we will need to issue two (2) separate certificates of obligation instruments. One will be for $31,000,000 of permanent financing for the amount we know will not be funded through RD and the other will be a $30,000,000 in temporary financing certificate that would be refunded once we are aware of RD funding. Even if no RD funds are used, the City would still refund and issue a 20 year maturity. Item 4.6 before the Council is the notice of intent to issue the $31,000,000 in Certificates of Obligation permanent financing. If approved, staff will complete preparation of the Official Statement and set June 28, 2001 as the sale date.

Councilman Archibald made a motion to approve the Resolution directing publication of a Notice of Intention to Issue Combination Tax and Waterworks and Sewer System Revenue Certificates of Obligation, Series 2001A, for the O. H. Ivie Project as recommended by staff. Councilman Southward seconded the motion and the motion carried.

AYES: Councilmen Archibald, Southward, Carrillo, Beckham, McNeil, Councilwoman Alexander, and Mayor Barr.

NAYS: None.

The Resolution is numbered 20-2001 and is captioned as follows:

4.7 David Wright, Director of Finance, briefed the Council on the Resolution directing publication of Notice of Intention to Issue Combination Tax and Waterworks and Sewer System Revenue Certificates of Obligation, Series 2001B, for the O. H. Ivie Project. Mr. Wright stated Item 4.7 before the Council is the notice of intent to issue the $30,000,000 in Certificates of Obligation temporary financing. Because this is temporary financing, this will be a negotiated sale rather than competitive. First Southwest Company will act as our underwriter. If approved, staff will complete preparation of the Official Statement and set July 13, 2001 as the sale date.

Councilwoman Alexander made a motion to approve the Resolution directing publication of Notice of Intention to Issue Combination Tax and Waterworks and Sewer System Revenue Certificates of Obligation, Series 2001B, for the O. H. Ivie Project as recommended by staff. Councilman Southward seconded the motion and the motion carried.

AYES: Councilmen Archibald, Southward, Carrillo, Beckham, McNeil, Councilwoman Alexander, and Mayor Barr.

NAYS: None.

The Resolution is numbered 21-2001 and is captioned as follows:

Mayor Barr recessed the Council into executive session pursuant to Sections 551.071, 551.074, and 551.072 of the Open Meetings Act, to seek the advice of the City Attorney with respect to pending and contemplated litigation, to consider the appointment and evaluation of public officers, and to consider the purchase, exchange, lease or value of real property.

The Council reconvened from executive session and reported no action taken.

Councilman Archibald left the meeting during executive session.

5.1 Councilman Carrillo made a motion to approve Mayor Barr's appointments of Judy Godfrey, term expiring 11/2001 and Bill Senter, term expiring 11/2001 to the Reinvestment Zone #1 City of Abilene (TIF) Board. Councilman Southward seconded the motion and the motion carried.

AYES: Councilmen Southward, Carrillo, Beckham, McNeil, Councilwoman Alexander, and Mayor Barr.

NAYS: None.

5.4 Councilwoman Alexander made a motion to elect Councilman Rob Beckham as Mayor Pro Tempore and Councilman Victor Carrillo as Deputy Mayor Pro Tempore. Councilman McNeil seconded the motion and the motion carried.

AYES: Councilmen Southward, Carrillo, Beckham, McNeil, Councilwoman Alexander, and Mayor Barr.

NAYS: None.

There being no further business, the meeting was adjourned at 11:40 a.m.

Jo Moore, City Secretary

Grady Barr, Mayor