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MINUTES REGULAR CITY COUNCIL MEETING December 12, 2011 at 6:00 p.m.

1) Call to order. Mayor Danner called the meeting to order at 6:00p.m.

2) Quorum check: Mayor James Danner, Pro Tem Keith Lutz, Councilmember Clyde Haak, Councilmember Eric Torres, Councilmember Ann Michelle Long, Councilmember Mike Sanchez, City Manager Robert T. Herrera, City Attorney Adolfo Ruiz and City Secretary Gloria Colbath.

3) Invocation by Pastor Stephen Schur, Bethlehem Lutheran Church.

4) Pledge of Allegiance led by Mayor Danner

5) Citizens’ Comments No comments made.

6) City Manager’s Report. City Manager Herrera reported that a tentative date was set for the Audit Committee to meet with the Auditors regarding the 2011 audit on December 20, 2011.

7) City Council review of the October 2011 departmental reports. City Council did not have any questions regarding the departmental reports.

8) Discuss and consider Resolution No. 229-11, a resolution of the City of Hondo, Texas to express appreciation to Holland and Lee, LLC for their economic contributions to the city of Hondo, Texas. Mayor Danner referred to the Award presented to Hondo Railway on October 13, 2011, noting that he would have preferred to present the Resolution to Holland and Lee sooner. Councilmember Haak asked to have the resolution amended because he wanted it to be more comprehensive. He stated he was in favor of the resolution but felt that it should include recognizing the accommodations provided by the citizens of Hondo. He recommended the following amendments be made to the resolution. Amendment A: “Whereas, the City of Hondo has shown tremendous confidence in the company of Holland and Lee Properties, LLC by providing substantial incentives, accommodations, and capital improvements in order to start up and enhance their business”. Amendment B: “Whereas, the City of Hondo, Texas recognizing not only this honor which has brought recognition to the company but also to our South Texas Intermodal Industrial Park, the growth of which has largely been a result of South Texas Liquid Terminal’s initial move to Hondo by and through the accommodations provided by the people of Hondo, we hereby wish to recognize the joint efforts of this fine company and the people of Hondo; so Amendment C: “THAT THE ACHIEVEMENTS OF HOLLAND AND LEE PROPERTIES, LLC, SOUTH TEXAS LIQUID TERMINAL, AND HONDO RAILWAY WORKING IN CONJUNCTION WITH THE INCENTIVES, ACCOMODATIONS, AND CAPITAL IMPROVEMENTS PROVIDED BY THE PEOPLE OF HONDO BE RECOGNIZED IN THE PERMANENT RECORDS OF THE CITY OF HONDO, TEXAS, AND THAT THE CITIZENS OF THE CITY OF HONDO BE URGED TO APPLAUD THE RESULTANT SUCCESS OR WORKING TOGETHER WHICH HAS CONTRIBUTED TO THE ECONOMIC GROWTH OF OUR COMMUNITY”.

Mayor Danner remarked that the intent of the resolution was to honor Hondo Railway/Holland and Lee and not the City of Hondo or the citizens of Hondo. Councilmember Haak spoke to the contributions the city has made to Holland and Lee and that it showed how the City can work with private enterprise. Mayor Danner proceeded to read the Resolution he prepared aloud. Councilmember Long moved to approve Resolution 229-11 as written. Motion was seconded by Councilmember Torres. Councilmember Haak moved to amend the motion to include his amendments and recognize the contributions of the City of Hondo and how the city has worked with the private enterprise efforts at the airport and the industrial park. Councilmember Sanchez asked if the record could reflect the amendments without changing the resolution. City Secretary Gloria Colbath stated that the amendments submitted by Councilmember Haak would be recorded in the minutes. The amendment failed for lack of a second. Original motion passed 3-0. Councilmember Haak did not vote.

9) Discuss and consider approving the minutes of October 10, 2011 and October 24, 2011 Regular Council meetings. Councilmember Long moved to approve the minutes as presented. Motion was seconded by Councilmember Haak. Motion carried 4-0.

10) Public Hearing: Hold a public hearing to receive public input regarding taxing tangible personal property in transit which would otherwise be exempt pursuant to Texas Tax Code, Section 11.253. City Manager Herrera briefly explained the item and stated that the intent of the proposed ordinance is to allow the continuation for the City to receive property taxes on goods-in-transit. He reported that this past year the Medina County Appraisal District estimated that the City’s portion from the inventory was $22,000. Mayor Danner stated that Medina County and the Hondo ISD both published their public hearing because they intend to keep their goods-in-transit tax. After a brief discussion, Finance Officer Betty Brown was asked to get a breakdown for Council of the taxing properties from the appraisal office. Mayor Danner opened the public hearing at 6:28p.m. No one spoke at the public hearing. Mayor Danner closed the public hearing at 6:29p.m.

11) Discuss and consider Ordinance No. 947-12-11, an ordinance of the City of Hondo to tax tangible personal property in transit which would otherwise be exempt pursuant to Texas Tax Code, Section 11.253, and providing an effective date on and after its adoption. (Robert T. Herrera) Councilmember Long moved to approve Ordinance No. 947-12-11 to allow the continuation for the City of receive property taxes from goods-in-transit. Motion was seconded by Councilmember Torres. Motion carried 4-0.

12) Discuss and consider Resolution No. 231-11, a resolution of the City of Hondo nominating a candidate for election to the Medina County Appraisal District Board of Directors for years 2011-2012. Councilmember Long moved to approve Resolution No. 231-11 nominating J. Gruber for election to the Medina County Appraisal District Board of Directors for years 2011-2013. Motion was seconded by Councilmember Sanchez. Motion carried 4-0.

13) Discuss and consider appointments to the City of Hondo Planning and Zoning Commission/Board of Adjustments to serve out unexpired terms of two existing members who have submitted their resignations to the Mayor. Mayor Danner stated that there were two vacancies due the resignations of board members Stephen Gray and Mike Groff. He stated that they had served diligently and were very contributory in their service to the City of Hondo. Mayor Danner recommended David Bain to serve out Mr. Gray’s unexpired term and Lynda Hook to serve out Mr. Groff’s unexpired term. Councilmember Long moved to approve the two recommendations as presented by Mayor Danner. Motion was seconded by Councilmember Torres. Motion carried 4-0.

14) Discuss and consider adopting Resolution No. 230-11, a resolution of the City of Hondo naming the Mayor, City Manager, Public Works Director, and City Secretary as signatories for the City of Hondo for the 2011 Texas Department of Agriculture CDBG Project awarded to the City of Hondo. Public Works Director Tim Fousse reported that this would be the seventh grant awarded to the City of Hondo. He stated that the signatories were for contractual documents associated with the grant.

2 Councilmember Haak moved to adopt Resolution No. 230-11 as signatories for the City of Hondo for the 2011 Texas Department of Agriculture CDBG Project awarded to the City of Hondo and that the Mayor or City Manager be one of the signers with the combination of either or Public Works Director or City Secretary. Motion was seconded by Councilmember Long. Motion carried 4-0.

15) Discuss and consider accepting the 2012 Routine Airport Maintenance Program grant and authorizing the City Manager to enter into an Agreement with TxDOT Aviation Division to accept the grant. Public Works Director Tim Fousse reported that the total amount of the grant was $100,000 with a 50% match coming from the South Texas Regional Airport Fund. He stated that the funds from the grant would be used to complete needed airport maintenance for facilities upgrades at a reduced cost. He specifically stated that the grant funds would be utilized by making upgrades to the commercial hangars, maintaining the airport’s radio beacon, installing an irrigation system at the terminal building and to replace fencing around the airport terminal. After a brief discussion, Councilmember Long moved to approve the 2012 Routine Airport Maintenance Program Grant and authorize the City Manager to enter into an Agreement with TxDOT Aviation Division to accept the grant. Motion was seconded by Councilmember Torres. Motion carried 4-0. Councilmember Lutz arrived at 6:47p.m. 16) Discuss and consider Resolution No. 232-11, a resolution of the City of Hondo authorizing the Mayor or his/her designee to implement a Section 3 Program, which to the greatest extend feasible, will provide job training, employment, and contracting opportunities for Section 3 businesses of the area in which the Texas Community Development Block Grant (TXCDBG) Program/Project is being carried out. Public Works Director Tim Fousse reported that the CDBG now calls for a resolution to adopt Section 3 Program as part of the requirements of the grant. He explained that the Section 3 Program is for the City to enforce to the greatest extent feasible, that residents with median to low incomes or underutilized business’ be hired. Councilmember Haak asked if it would change the way the City does business. Mr. Fousse replied that the change would require that when the bids come in that the contractor have a plan in place to hire under employed, underutilized business’ locally. City Manager Herrera stated that the requirement would be in the bid package and that the contractor would have to show on his bid proposal where the attempt was made. Mayor Danner also noted that the grant administrator would be responsible for the recommendation of the contractor. City Manager Herrera also stated that the grant administrator is responsible for maintaining all the records for the CDBG program and stated that he felt very comfortable with the grant administrator fulfilling all the requirements. After discussion, Councilmember Long moved to adopt Resolution No. 232-11authorizing the Mayor or his/her designee to implement a Section 3 Program, which to the greatest extend feasible, will provide job training, employment, and contracting opportunities for Section 3 businesses of the area in which the Texas Community Development Block Grant (TXCDBG) Program/Project is being carried out. Motion was seconded by Councilmember Torres. Councilmember Haak asked for clarification on who would maintain the documents. City Manager Herrera responded that he would meet with the grant administrator and respond to the Council with a memo. Motion carried 5-0.

17) Discuss and consider the placement of a Hondo Historical marker on Highway 90. Councilmember Haak recommended that a duplicate historical marker be placed where the new Highway 90 monuments are being erected between Avenues M and K. Mayor Danner agreed with his idea but recommended a plaque with the same language. City Manager Herrera stated that the safest place to set it would be between Avenues M and K and did not believe it would be an issue. Mayor Danner recommended that the suggestion be forwarded to the Highway 90 Beautification Committee. After discussion, the item was tabled and the Council’s consensus was to visit with the Beautification Committee first.

18) Receive report and discuss any infrastructure improvements in the City of Hondo, Airport, or the Industrial Park since September 1, 2011. Director of Public Works Tim Fousse reported on the following city projects have been under construction

3 or completed since September 1, 2011 and noted that the projects were not in any specific order.

 23 rd Street Opening – the survey work for the surrounding areas has been completed and the base material for the road has been installed. This project is on hold, pending warm enough weather to complete the double shot seal coat.  Alley Reconstruction between Avenue J and Avenue N – this project has been moving forward steadily. The water department has installed a complete new 2” water main from Avenue J to the mid-point between Avenue M and Avenue N. Additionally, at total of 24 new water services have been completed to allow the reconstruction of the alleyway. Base work is scheduled to start the week of December 12th. This project is scheduled to receive a double shot seal coat once the base work has been completed.  Highway 90 Beautification Project – this project remains on schedule at this time. The monument work is approximately 80% complete and concrete work is approximately 60% complete. The lighting portion of the project will be started once the concrete work is finished. Tree, flowers and grass will be planted in early spring and a ribbon cutting/dedication ceremony is being planned for mid-May 2012.  Wrought Iron Fence UPRR Project – this project is ongoing and should be completed in the next two to three weeks. The UPRR, in cooperation with the City of Hondo, is installing a wrought iron fence along the railroad tracks in an effort to reduce pedestrian traffic on railroad property. The fence will be installed from Avenue E to Avenue I and from Avenue P to Avenue U. This project is funded completely by the UPRR.  Wastewater Treatment Plant Projects – there have been several improvements completed at the WWTP. We have cleared an additional .25 acres of land at the entrance of the plant. Base material has been laid to allow vehicular traffic. A new fence has been constructed and a new security gate has been installed. Additional work completed earlier this year included a complete overhaul of the U.V. light system used as a final treatment to water leaving the plant, I additional lift pump was installed, and new sonic flow meters are being installed to the influent line as well as the sludge return line.  Regional Women’s Shelter Project – this project was completed in early November of this year. This project replaced a sub-standard building with a modern 4 bedroom facility. The project was completed on budget and on time. Funding for this project was provided through an earmark from former Congressman Ciro Rodriguez.  Harper Street Water Main Upgrade Project – This project is replacing 69 year old 8” water mains with new 12” water mains. Additionally, three new fire hydrants were installed. This project was funded with monies from the Airport Fund and grant money from the TxDOT Aviation RAMP Grant program.  Torres Park – This project is now complete, except for planned planting of flowers, shrubs, and trees. These are expected to be planted in the spring. This “pocket park” adds a neighborhood park to an area that did not have any parks. The park features a walking trail, park benches, picnic tables, barbeque pits, volleyball area, swings, see-saws, and a merry-go-round. This entire project was completed using city team members from the Parks Department and the Streets Department.  Electric System Expansion – Baker Hughes Project - South Texas Regional Intermodal Park – Upgraded utility lines have been installed in support of the Baker Hughes Sand Plant project. This project brought higher capacity primary distribution wiring to this area of the intermodal park. It also added new distribution wiring out to our prison sewer lift station. This entire project was funded by fees paid by Baker Hughes for their electrical services.  Curb Program – Curbs and additional pavement were installed along Avenue M, from 23rd Street to 28th Street in 6 areas where curbs were missing along this feeder road. Additional curbing with pavement was completed along 26th Street, near Avenue P. New curbs and pavement were installed along 17th Street from Avenue E westbound to Avenue G.  Holiday Lighting Program – a holiday tradition of “lighting Hondo” was completed successfully again this year. The very popular Christmas Card program was completed on schedule. Some upgrades to holiday lighting around the city hall complex were also completed. New lighting was added to the Medina County Courthouse Annex (old jail building), at the request of the County Judge.

4  12” Water Main Extension – S.T.L.T. - South Texas Regional Intermodal Park – this project is scheduled to be completed this week. It brings a 12” water main southwards from the existing 12” water main allowing the installation of two new fire hydrants, including one inside the fence line near S.T.L.T. It also is the first phase of a looped water system for the future development of the entire intermodal park. 19) Workshop: Receive a presentation from Tetra Tech, Inc., concerning the development of a planning document entitled “Vision Plan” which was prepared for the City’s South Texas Regional Intermodal Park and for airport properties owned by the City of Hondo. City Manager Herrera stated that that this item did not require formal action at this time and that the City of Hondo Economic Development Corporation would receive the same presentation and that they can forward a recommendation to City Council. City Manager Herrera also clarified that the plan included the western and the northern sections of the property around the airport and was not limited to the southern sections. Tetra Tech Vice President Marc Long provided on a summary of the Vision Plan as follows: What is a Vision Plan, or more simply put, what is it that we are going to do, for who are we doing it for, and how do we succeed at this process. He stated that their goal was to provide a plan that the City of Hondo could optimize for use for both aviation and non-aviation purposes. He stated that the vision plan is a tool that establishes a three to five year calendar for developing an intermodal park. It is also a tool for establishing partnerships with developers, investors and possible tenants. Mr. Long showed a presentation noting the four reasons for their recommendation as follows: 1) The Intermodal Park is located such that it can be serviced by three of the four intermodal transport modes: air, rail, and highways. 2) The central location of Hondo within two major east-west corridors and a major north-south corridor as well as the rail corridors that exist and the proximity close to the Gulf of Mexico. 3) The large amount of undeveloped land tied to the existing infrastructure. He noted that this was a great benefit to the City in that the airbase that was decommissioned decades ago left a lot of infrastructure in place and that the infrastructure had been maintained and upgraded over time by the City and it is now preserved as an asset. 4) A proactive strategy for non-aeronautical uses as well as aeronautical users. The modes are compatible with the existing airport and yet maintain the ability to provide rail and truck options. Their intent was to create a synergy so that the City of Hondo Economic Development Corporation in their objectives can further the goals for revenue increases in the City of Hondo, and provide a more diverse business portfolio. Mr. Long stated that the first major step is for the City Council to approve the preliminary vision plan. Second step is for Council to move forward with the creation of a special business district, a public improvement district, or a tax reinvestment zone. etc., He noted that it was imperative that the district be formed because the boundaries would be set and once this is done it would set the stage for the next stages of development; Third step is to create a District Board. The Board would manage the improvement district, technical and operational phases of the intermodal park. Fourth step is to determine possible financing alternatives. Although the City has spent a great deal of time talking about the private investment development opportunities that the vision plan will provide, the city will need to begin looking at the public improvements that will be done in concert with the private development investment. Fifth step is to solicit potential users for the industrial park. Mr. Long noted that the vision plan is a technical document but that it could be used as a marketing tool for the city staff, chamber of commerce or the COHEDC for soliciting potential users. He then stated that the city could solicit for developers and that the broader plan is to look at three different development phases spread out over 30 years. Mr. Long stated that the City would need to be transitioning the vision plan into a more comprehensive master plan and a more detailed development plan. He stated that this could be accomplished as part of a program management approach that the district board will be able to manage. Mr. Long stated that to successfully manage the intermodal port in Hondo the City would need to engage in a public/private partnership like the two intermodal ports already operating in Texas. He stated that that was a specific recommendation of the vision plan and that the plan also recommends that the unified management provides almost a one-stop shop for developers, investors and tenants.

5 He also stated that he did not want to imply that the city would be giving away control of over 3,000 acres of airport property, but it would be transitioning from having the intermodal park managed by the airport or the city directly to a system of having its regulatory policies and that the city would still have regulatory control over zoning, ordinances, permits, transportation, infrastructure and public right-away management. Mr. Long stated that the intermodal park needs to be a showcase for innovated and progressive thinking. Mr. Long showed an audio video slide show presentation which he stated could be used as a great marketing tool in the near future. After the audio/video slide show, Councilmember Haak asked if the businesses already in place could be in the district? City Manger Herrera replied that they can be in the district but noted that if STLT is valued at 10M that would be the base amount of funds that the General Fund would continue to receive in property taxes and if the zone is created and STLT is within the zone then the incremental increase of the growth above the base line will stay with the special district. Councilmember Haak stated that it needed to be made clear to the public. City Manager Herrera explained that whether it was a special district or a tax increment reinvestment zone, noting that staff would probably recommend a tax increment reinvestment zone, any tax increase will only affect the industrial customers that are within that zone and it does not affect any one else within the City of Hondo. Councilmember Haak spoke to his concern regarding informing the public. Mr. Long stated that they did a proactive effort to inform the citizens and felt that they did succeed in doing so by publishing the major feature notices in the local newspaper, meeting with the County, Chamber of Commerce, Airport Board, City of Hondo Economic Development Corporation and the businesses at the intermodal park and that over 300 key people did attend the meetings. In closing, City Manager stated that the same presentation would be shown to the COHEDC at their meeting and they would have a recommendation to the Council for the January 9th meeting.

20) Executive Session: The City Council of the City of Hondo convened in Executive Session at 8:12 p.m. and reconvened in Open Session at 8:37 p.m.in accordance with the Texas Open Meetings Act, Texas Government Code, Section 551.071 (Consultations with Attorney) on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly requires discussion in closed session); Section 551.072 (Deliberations about Real Property), Section 551.074 (Personnel Matters), Section 551.087 (Deliberations Regarding Economic Development Negotiations): a. Discuss land acquisition of approximately one-lot located behind the Hondo Water Department which is located at 20th Street, Hondo Texas. 21) Discuss and consider authorizing the City Manager to negotiate purchase of one-lot of property located behind the Hondo Water Department which is located at 20th Street, Hondo Texas. No action taken.

22) Adjourn. Councilmember Sanchez moved to adjourn the meeting at 8:38p.m. Motion was seconded by Councilmember Lutz. Motion carried 5-0.

Passed and approved this 9th day of January, 2012.

______JAMES W. DANNER, MAYOR

ATTEST:

______Gloria Colbath, City Secretary

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