09141998 Regular Meeting - Laserfiche WebLink

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51 Regular Meeting September 14, 1998 Page 6 AYE: Mihalkanin, Doiron. NAY: Hughson, Moore, Moseley, Cox, Hernandez. ABSTAIN: None. The motion failed. Mr. Gilley advised the 21% rate increase was based on a model which we sold bonds to build the project. The project has been anticipated for some time and Mr. Gilley had concern if the rate was not adopted because it would have to be offset somewhere. Mr. Hernandez stated businesses may choose to expand outside the City to avoid this rate, even low water users with many employees. Mr. Hernandez stated this matter has been looked at for many years and would prefer to go across the board and include residential customers. Mayor Moore stated there needs to be public education that the 21% is not for all services, just water. Mr. Cox stated we have told the bond rating companies we would raise our rates to 21% across the board and feel we are locked in to do so. Mr. Cox stated our bond consultant has advised the Council of this commitment this year and thinks we should raise across the board. Mr. Gilley stated the rate model began three years ago with a growth rate of 1%, and the actual rate of growth is approximately 3.4% (CAPCO estimates). Mr. Gilley stated there is expectation by the bond rating companies we will maintain certain fund balances. If the City does not keep this commitment with the bond rating companies, it will possibly affect our future ratings on future debts with higher interest rates. Mr. Hernandez stated the City did not get upgrades in our ratings until we made commitments to increase rates and not rely only on sales tax. Mr. Mihalkanin stated if a commitment was made to the bond agencies, we should uphold it. It was bad judgment of past Councils to bunch up rate increases so close together. Mr. Cox stated it has been a long range planning project. Mr. Mihalkanin and Ms. Hughson stated they would like to review this matter in six months to see if the 21% increase will meet the needs. Mr. Moseley stated the Council needs to show strong leadership where the Council stands on the water issue and explain why there is a 21% increase and how this will benefit the citizens. Ms. Hughson asked if the rate could decrease next year, and Mr. Gilley stated it could be evaluated again to see if that is possible. Mr. Hernandez stated not only will this make the City less dependent on the aquifer, it will provide a state of the art water plant to serve a long time into the future. On roll call the following vote was recorded: AYE: Hughson, Moore, Moseley, Cox, Hernandez. NAY: Mihalkanin, Doiron. ABSTAIN: None. Mayor Moore introduced for consideration approval of the minutes of the Regular Meeting held August 24, 1998, approval of three Ordinances on second reading, adoption of two Ordinances on third and final reading, adoption of seventeen Resolutions and approval of expenditures from the Tourist Account: FY1997-98 in the amount of $4,700.00 and FY1998-99 in the amount of $1,650.00 for the promotion of tourism and related to the Exhibitor's Booth at the Texas Municipal League Conference in October, 1998 in San Antonio, Texas on consensus. The Council removed Items 10.B.(2), approval of Ordinance on second reading, 10.C.(1) and 10.C.(2), adoption of Ordinances on third and final reading, 10.D.(7), 10.D.(9) and 10.D.(17), adoption of Resolutions, to be