Corpus Christi City Council Regular Meeting - September 3, 2024

The Corpus Christi City Council met on Tuesday, September 3, 2024, in a lengthy session that began at 11:30 AM and continued through the afternoon. The meeting covered a wide range of topics including the adoption of the Fiscal Year 2025 operating and capital budgets, setting the property tax rate, multiple fee increases, approval of new 15-year Industrial District Agreements, and a briefing on American Rescue Plan Act (ARPA) spending. Public comment was heard on several items, with strong opinions expressed regarding industrial tax abatements, water fluoridation, COVID-19 vaccine policies, and the overall budget. The council took numerous votes, with some items passing by narrow margins.

Consent Calendar

• Approved the August 8, 2024 and August 15, 2024 Budget Workshop Minutes and August 27, 2024 Regular Meeting Minutes.
• Approved a resolution for annual renewal of Excess Liability and Excess Workers’ Compensation insurance coverage ($994,688).
• Approved a one-year service agreement with Blue Cross Blue Shield of Texas for stop loss coverage ($2,436,190).
• Approved a two-year professional services agreement with Axim Geospatial, LLC ($525,959.47) for GIS database upgrade.
• Approved a one-year supply agreement with Rush Truck Centers (up to $870,000 total).
• Approved a one-year cooperative purchase agreement with Rehrig Pacific Company for refuse and recycling carts ($675,324).
• Approved a three-month service agreement with Zeitenergy, LLC for CNG dispensers ($239,742.50).
• Approved a professional services contract with Hazen and Sawyer for fluoride system upgrade at O.N. Stevens Water Treatment Plant ($532,418) – pulled and voted separately.
• Approved a professional services contract with Urban Engineering, LLC for Northwest Blvd Wastewater Infrastructure Upgrade Preliminary Engineering Report ($80,210).
• Approved a resolution adopting the Nueces County Multi-Jurisdictional Hazard Mitigation Action Plan.
• Approved acceptance of two Motor Vehicle Crime Prevention Authority grants totaling $963,242 for the Auto Theft Task Force.

Public Comments & Testimony

• Sean Flanagan (4218 Herndon St.) spoke on a petition regarding informed consent for COVID-19 vaccinations, reporting progress in meetings with city staff and health department. He claimed the current data on vaccine adverse effects is inadequate.
• John Webber (6009 Naples St.) criticized the proposed Industrial District Agreements (IDAs), arguing that the city is giving too generous a deal to industry compared to residential property taxes. He requested postponement of the vote.
• Samuel Andre Fryer (District 4) expressed frustration with the city’s handling of COVID-19 vaccine safety concerns, stating that the health department has provided no evidence of illegality and that the vaccines are dangerous.
• Rachel Caballero (522 Hancock) opposed the budget and fee increases, stating that small businesses are being targeted while large industries receive tax breaks. She called for the resignation of the City Manager and advised the community to vote 'no' on the bond proposals and sales tax reauthorization.
• Mark Minster (1013 Barracuda) spoke against industrial tax abatements, claiming that major corporations are not paying their fair share. He also raised concerns about the desalination plant and the city paying legal fees for officials.
• Mary Dale Peterson (210 Naples St.) supported the budget and investments in water infrastructure, specifically fluoridation. She detailed the health impacts of insufficient fluoride on children, citing increased surgeries due to dental caries.
• Victoria Holland (235 Ohio Ave.) echoed support for community concerns over COVID-19 vaccines and asked the council to consider her application for appointment to the Type B Corporation Board.
• Ernest Buck (823 Southwater) supported water fluoridation and opposed a hidden tax of having to prescribe fluoride drops to patients.
• Michael Miller (51 Camden Place) flagged several CIP projects as excessively expensive, including a park pavilion, helicopter monument base, city hall exterior illumination, vehicle fleet wash, solid waste complex, animal care kennels design, underground gas storage, and the desalination plant.
• Jason Hale (211 Lemming) argued that IDAs should be tied to environmental stewardship, such as using best available technology and reducing abatements as air quality declines. He requested postponement to review budget alternatives.
• Lamarck Taylor (522 Hancock) opposed IDAs from an environmental justice perspective, stating that pollution from industrial plants harms nearby neighborhoods and contributes to health issues like cancer.
• Bill Durrell (22 Hewitt) questioned the use of Type A funds to incentivize a one-night event (Parker McCollum concert) at the American Bank Center, arguing it is not a lawful use of those funds.
• Maggie Peacock (virtual) spoke against IDAs, stating that Corpus Christi is treated as a sacrifice zone and that industries should be annexed rather than given tax breaks.

Discussion Items

• City Manager's Comments: Peter Zanoni highlighted continued investment in public safety positions and training, and reminded of the upcoming 9/11 anniversary.
• FM 624 (Northwest Boulevard) Project Overview: A $35 million Texas Department of Transportation (TxDOT) project to widen the road to six lanes, add turn lanes, sidewalks, and shared-use paths from Wildcat Drive to CR 73. Construction is expected to begin in late 2025. Council members discussed the need for additional street lighting, with the city possibly sharing costs with TxDOT.
• Bond 2024 and Sales Tax Reauthorization Informational: City Manager Zanoni presented the four bond propositions (A: streets $89.5M; B: parks $37.6M; C: public safety $45M; D: cultural facilities $2M) and two sales tax reauthorization propositions (E: split between streets and American Bank Center; F: downtown seawall and flood control). Total potential investment of $575 million in city infrastructure.
• FY 2025 Operating Budget (Item 6): Presentation by Eddie Hoolahan. The $990 million operating budget includes property tax relief (doubled homestead exemption to 20%, increased over-65/disabled exemption), no tax rate increase (stays at $0.599774 per $100 valuation), and $129.4 million for streets. A $4.39/month typical residential increase due to water/wastewater/stormwater adjustments. Use of $77.7 million in one-time fund balances was detailed. Councilman Pusley questioned the net impact on taxpayers despite fee reductions. Councilman Hunter raised concerns about water rate structure between inside and outside city limits customers. Councilman Hernandez noted future revenue requirements will require significant rate increases. After public hearing, the budget was approved on first reading (6-3 vote).
• FY 2025 Capital Budget (Item 7): The 10-year Capital Improvement Program totals $1.058 billion, with water/wastewater/streets comprising 77%. Council discussed debt levels ($1.7 billion total) and the need to pace capital projects. Councilman Klein questioned the $49.4 million underground gas storage project and $221 million desalination project. Councilman Campos expressed concerns about SWIFT loan commitment. Councilman Pusley urged better communication on how debt is spread over multiple years. Approved.
• Property Tax Rate (Item 8): Set at $0.599774 per $100 valuation, a 6.03% increase over the no-new-revenue rate. Average homestead will see a 2.24% decrease due to increased exemptions. Approved.
• Ratifying Property Tax Increase (Item 9): Required by state law because total revenue from property taxes will increase by $531,037. Approved.
• Airport Parking Rates (Item 10): Approved.
• Water and Wastewater Rates (Item 11): Combined water/wastewater rates for a typical residential user (6,000 gallons water, 5,000 gallons wastewater) will increase by $2.91/month. Rates were discussed at length, including equalization between inside and outside city limits and the impact of the consent decree. Councilman Hunter questioned why outside city limit residential customers see a decrease while inside customers increase. Councilman Campos noted the interconnectedness with IDA revenue. Approved (5-4).
• Drought Surcharge Exemption Fee (Item 12): Increased from $0.25 to $0.31 per thousand gallons for large volume industrial users, generating an additional $1 million/year. Councilman Klein expressed reluctance without seeing the full drought contingency plan update. Councilman Campos questioned fairness to residents. Approved.
• Development Services Fees (Item 13): Final year of 10% annual increase for building permits, trust fund fees, etc. Approved.
• Fire Prevention Fees and Lift Assist Fee (Item 14): Introduced a $500 non-emergency lift assist fee for licensed care facilities. Fire Chief Wade explained the fee is to recover costs for calls where facilities should be providing the service. Councilman Hunter opposed due to cumulative business fee burdens. Approved.
• Health Department Fees (Item 15): Increased fees for food health permits, vendor permits, etc., which had not been raised since 2006. Councilman Hernandez questioned cost-of-service basis. Approved.
• Parks and Recreation Fees (Item 16): Increased rental rates for athletic fields, community centers, and after-school programs. Also introduced new fees for outdoor sports facility usage agreements. Council discussed the transition to city-managed field maintenance. Approved.
• Stormwater Drainage Charge (Item 17): Increased to continue the five-year enhancement plan for street sweeping, ditch maintenance, and inlet inspections. Councilman Seckley raised concerns about vegetation maintenance frequency. Approved.
• Industrial District Agreements (Item 19 – pulled from consent): Ordinance authorizing new 15-year IDAs with 74.5% payment-in-lieu-of-taxes on improvements, land taxed at 100%. Council debated the length (10 vs. 15 years), the value compared to potential taxes if annexed, and the lack of job creation requirements. Councilman Campos proposed an amendment to reduce to 10 years, which failed. The original 15-year motion carried. Councilman Klein expressed concern about CC Polymers' financial stability; City Manager clarified they are not bankrupt and the city will receive payments even if the plant is idle.
• Fluoride System Upgrade Contract (Item 26 – pulled from consent): Professional services contract with Hazen and Sawyer for $532,418. Councilman Hernandez questioned the higher cost relative to CIP budget. Contract approved.
• Citizen Referendum on Ethics Commission Representation (Item 31): Council considered whether to reconsider an ordinance allowing outside counsel for city officials facing ethics complaints. After public comment and discussion, a motion to reconsider failed, so the ordinance stands. The proponents may now circulate a petition.
• ARPA Funding Update (Item 32): Finance Director Sergio Yzaguirre reported that $67.6 million in federal funds have been allocated for infrastructure projects, with $5.9 million needing to be obligated by December 2024. Councilman Klein suggested using some for homeless services, but City Manager noted the money is already committed to existing projects (North Beach drainage, water/wastewater improvements, etc.).

Key Outcomes

• FY 2025 Operating Budget approved on first reading (6-3).
• FY 2025 Capital Budget approved (voice vote with opposition).
• Property Tax Rate set at $0.599774 per $100 valuation (approved).
• Water/Wastewater Rate Increase approved (5-4).
• Drought Surcharge Exemption Fee Increase approved.
• Industrial District Agreements (15-year) approved with a provision for voluntary annexation petitions.
• Fees for Fire, Health, Parks, Development Services all approved.
• Ethics Ordinance Reconsideration motion failed (no majority to reconsider).
• Appointments: Diana Summers and Jesus Menez reappointed to Type A/B corporations; Victoria Holland and Philip Philipello appointed to full terms; Dr. Vishni Reddy to partial term. Downtown Management District reappointments: Leslie Lomax, Ben Molina, Raymond Jenak, Cheryl Botzmeyer Rios; new appointments: Avery Rennie, Zachary Bernstein, Chris Navarro.