Council to spend $2 million in sales tax on sewage plant
Tables action on certificates of obligation sale after proposal to use 4B sales tax funds for wastewater treatment plant improvements
Sep 06, 2008 | 604 views | 0 0 comments | 9 9 recommendations | email to a friend | print
posted June 28 -

Beeville City Council members once again postponed action on proceeding with a $2 million sale of certificates of obligation when they met at City Hall Tuesday evening.

The decision to table discussion on the sale came after Mayor Pro Tem John Fulghum suggested that the council approach the Beeville Economic Improvement Corporation for assistance in financing the replacement of a bar screen at the city’s main wastewater treatment plant on Cook Road.

Fulghum made his recommendation after the council heard from financial advisor Steve Elliott, vice president of Southwest Securities in San Antonio.

Elliott had been asked to attend the Tuesday night meeting during the council’s June 10 session and to bring information on different funding opportunities offered by the Texas Water Development Board.

Councilman Jimbo Martinez had expressed interest in the TWDB’s grant and loan programs, saying he thought it might be possible to save city taxpayers some money by obtaining state assistance in funding water and wastewater improvements.

City Manager Ford Patton said someone from the state agency was to have been at the meeting but no one had shown up that evening.

Elliott outlined three programs through which the TWDB might provide funding for the project. The first funding method he mentioned would was a loan in which the state would set an interest rate of 4.53 percent. Elliott anticipated that the interest rate on $2 sale of certificates of obligation would be about 4.57 percent on the open market.

The drawback would be a six-nine-month pre-application process.

“We’ve done a number of these, it’s just a matter of working through the program,” Elliott said.

Then Patton mentioned that the most significant project for the certificate sale was the replacement of a bar screen at the city’s Moore Street wastewater treatment plant.

“Sometime last week the bar screen just quit working,” Patton said. The plant now depends solely on a manual bar screen device that has to be cleaned by personnel at the plant. That, Patton said, means that some materials could be getting past the device and causing damage to other equipment at the plant.

The city has received a $300,000 Community Development Block Grant to help pay for the replacement of the bar screen. But the city needs $175,000 more, based on its estimates, to pay for that project and that money was to come from the sale of the certificates.

Fulghum mentioned that he had been told of the failure of the bar screen at the plant and he said he was concerned about getting the equipment replaced as soon as possible. He then proposed that the city submit a request for that money from the EIC for $175,000 in 4B sales tax funds.

“I don’t want to shoot it down again. I don’t want to delay this,” Fulghum said.

That prompted Councilmen Mike Scotten and Martinez to ask of it would be acceptable to use those funds for that purpose.

Councilmen discussed that possibility back and forth for some time before one recommended asking the Texas Attorney General’s office for an opinion on using 4B sales tax money for something like a bar screen replacement.

Although city officials have been told that it is acceptable for cities with populations of fewer than 20,000 people to spend 4B sales tax funds on such projects, Scotten said he was not sure that information was accurate.

Scotten did agree with Fulghum’s suggestion to go after 4B funds as long as the city was sure the expenditure was legal. Martinez also agreed with the proposal.

However, City Attorney Frank Warner said he did not feel the city would be able to get an opinion on using 4B sales tax money for the bar screen project from the Attorney General’s Office.

Martinez then suggested that some of the other water system projects be funded with something other than a sale of certificates and suggested that the city go ahead and seek funding assistance from the TWDB.

But Patton outlined some of the city’s needs and said they had to be addressed soon to avoid the need to replace items rather than repair them.

“I can’t, in good conscience, say the city can wait two years on this,” Patton said. “I don’t think we want to wait until they tell us they need to be done.”

Elliott then said there is no guarantee that TWDB funds will be available when the city applies for them. “They have limited funds for loans,” the financial consultant said.

Fulghum then made a motion to proceed with a request to the EIC for the $175,000 for the bar screen project.

But that prompted Martinez to suggest that if 4B sales tax funds could be used to replace the bar screen, then why could the same funds be used to pay for the other projects.

At that point Patton assured the council that 4B sales tax funds could be used to retire debt incurred by the city.

He then suggested that he obtain more information on how 4B sales tax funds could be used by the city and return to the council with that information at a later meeting.

Fulghum withdrew his motion and the matter was tabled again.

In other business the council voted to:

— Require an audit prepared by a certified public accountant from the Bee County Chamber of Commerce on how it uses hotel and motel occupancy tax funds each year. Warner pointed out that the requirement is part of the contract between the city and the chamber,

— Approve a request from the Fiesta Bee County organization for $5,300 in hotel and motel occupancy tax funds to advertise this year’s event.

— Accept the audit of the ity’s 2007 fiscal year funds as prepared by Ernest R. Garza & Co.

— Authorize the transfer of $3,500 in funds budgeted to the Beeville Volunteer Fire Department to allow the department to fund the construction of a cover for some of its brush fire fighting trucks.

— Allow the closure of the 100 block of West Walton Street from 5:30-7:30 p.m. from July 13-17 as requested by the First Christian Church.

— Authorize the Beeville Independent School District to use Veterans Memorial Park for a cross country meet on Saturday, Sept. 13 and Saturday, Oct. 25.

— Allocate $5,500 in general contingency funds for the completion of the City Hall annex where the new Municipal Court officers are to be located.

— Approve management and engineering agreements necessary for the city to obtain the $300,000 in community development block grant funds for wastewater treatment plant repairs.

— Appoint Mario Muñiz to the city’s Planning and Zoning commission and Fernando Galvan to the city’s Traffic Safety Commission.

— Schedule a public hearing for July 8 to har public comment on a proposed ordinance regulating the use of plastic shopping bags within the city limits.

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