Corpus Christi City Council Meeting - December 10, 2024

The Corpus Christi City Council met at 11:30 a.m. on Tuesday, December 10, 2024, in Council Chambers at 1201 Leopard Street, with Mayor Paulette Guajardo presiding and a quorum present. The Council honored late former Mayor Henry Garrett by proclaiming December 10, 2024 as Mayor Henry Garrett Day in Corpus Christi. The agenda included the FY2024 fourth quarter financial report, Lake Corpus Christi water safety, a Bond 2024 residential streets briefing, consent agenda actions, an executive session, and public hearings and individual items on zoning, North Beach, a Chapter 380 agreement, the North Padre Island seawall, and a Project Financing Zone.

City Manager’s Report

• FY2024 Fourth Quarter Financial Report: City Manager Peter Zanoni presented preliminary, unaudited results. General fund revenues were estimated at $332 million but came in at $323 million, about $9 million less, largely because an industrial district partner (Valero) contested its appraisal and received a $9 million refund. Sales tax came in at $72.1 million versus the $72.7 million estimate. Expenditures were about $357 million versus the $363 million estimate, and no operating department went over budget. The general fund ended with a fund balance of $78.3 million, at the council's 20 percent reserve policy cap, leaving little flexibility for one-time spending in the next budget. Water fund revenues were lower than projected ($154 million vs. $157 million), while wastewater revenues were higher ($92 million vs. $88.5 million). The gas fund remained below its 25 percent reserve target ($4.3 million vs. a $9.1 million goal). For capital projects, Bond 2022 had 32 projects, with 2 complete, 2 under construction, and 28 in design; Bond 2020 had 42 projects, with 40 complete or nearly complete.
• Lake Corpus Christi Water Safety Coalition: The city is partnering with Mathis, Texas Parks and Wildlife, and others after four drownings at Lake Corpus Christi in the past five months. The coalition plans water safety orientation, free life-jacket vouchers, additional signage, and education, with a goal of being ready by Easter. Funding is expected from private donations and the Corpus Christi Water fund.
• 48th Annual Christmas Angels: Police Chief David Blackman announced the December 24, 2024 Christmas Eve food basket delivery, organized by the police department and volunteers. About 125 food baskets and roughly 200 participants are expected, with volunteers gathering at Windsor Park Elementary at 6 a.m.

Public Comments & Testimony

• Ron Graben, president of the North Beach Community Association, expressed support for the North Beach construction item and thanked staff for engaging the community.
• Carrie Meyer, a North Beach resident, supported the project but urged that the Eco Park remain a passive, habitat-focused park with boardwalks and educational signage, no large buildings or shade structures, and continued public involvement.
• Bob Catalano, a North Beach resident, thanked the city and raised tidal flooding adjacent to his property, asking the city to consider his future requests.
• John Weber, a Corpus Christi resident, urged restrictions on unlimited car-wash business models, citing a spreadsheet figure of 25 for a single car wash's daily average water use and estimating 325,000 gallons per day for 13 locations. He also noted commercial water rates drop from $5.56 to $3.94 and said the city was giving up revenue for non-essential water use, estimating annual savings of more than $193,000 for the car-wash company.
• Kristin Cook, executive director of South Texas Workforce and a Corpus Christi resident, supported continued funding for the South Texas Military Task Force, saying area military facilities create over 12,000 direct jobs and 35,000 indirect jobs and contribute over $7 billion annually, about 20 percent of the local economy.
• Mark Munster, a Corpus Christi resident, spoke on stage three drought restrictions, cited EPA climate-change findings, and opposed desalination as energy-intensive and geared toward industrial demand, urging conservation and changes to industrial water pricing.
• Jerry Sinclair, a resident, supported the Michael J. Ellis Seawall improvement project and thanked the council for moving it forward.

Bond 2024 Residential Streets Briefing

• Public Works Director Ernie Delagarza briefed the Council on the $35 million residential streets component of the $174 million Bond 2024 program approved November 5, 2024.
• Staff reviewed the shift from complete reconstruction to a pavement-only approach: 373 miles of residential streets were in very poor condition; the network was degrading at 12 miles per year while only about 6 centerline miles per year were being completed.
• Under the old approach, staff estimated it would take 62 years and about $930 million to fix the 373 miles. The new approach initially estimated 31 miles per year over 12 years at $180 million, assuming $15 million annually.
• After one year of pavement-only work, FY2024 production was 44 centerline miles at a cost of $39 million, with public works completing 60 miles and contractors 28 miles. Staff revised the estimate to about 8.5 years and $332 million.
• The Rapid Pavement Program 2025 streets are targeted for completion by June 2025, with updated Pavement Condition Index (PCI) data expected by July 2025 before beginning Bond 2024 street work.
• Council discussion covered the need to explain the cost increase, funding after the street user fee was not renewed, alley and industrial street tracking, and coordination with engineering projects.

Consent Calendar

The Council approved the remaining consent agenda in one vote after pulling items 6, 7, 11, 15, 22, 23, 27, and 28 for individual consideration; item 18 was removed from the agenda because it was not ready. The consent items adopted in the block included the December 3, 2024 minutes; homeland security and health grants; airport rental car agreements; TIRZ No. 2 Briscoe King Pavilion funding of $1,911,385; an $820,000 coastal erosion matching grant; ARPA funding reallocations; contracts for generator maintenance, airport tasers, gas main control, communications equipment, and software; the Halff water main design contract; renewal of the South Texas Military Task Force support agreement for $75,000; and the Bayside Area Development Plan on first reading.

Pulled Consent Items

• Item 6: The Council approved a substitute ordinance annexing land within Industrial District No. 1 and Industrial District No. 2. The substitute removed the HS Constructors tract after another industrial district agreement was signed. It was treated as a second-reading ordinance with a minor scope change.
• Item 7: The Council approved the ordinance disannexing approximately 15.4 acres near Nueces Bay Boulevard and Broadway Street. Councilmember Campos stated she voted against the disannexation because she believed the city would be better served keeping the property annexed.
• Item 11: The Council approved three airline use and lease agreements with United Airlines, Southwest Airlines, and American Airlines. Councilmember Campos asked why the rate increases were very low; staff said they were based on market rates. Councilmember Klein said he hoped airport staff would continue recruiting more carriers.
• Item 15: The Council approved the ARPA ordinance reallocating funding for waterlines, lift stations, stormwater, North Beach drainage, Fire Station #3, police and fire services, and other approved projects. Councilmember Campos asked about grant position funding and then moved approval.
• Items 22 and 23: The Council approved the Ardurra professional services contract for the O.N. Stevens Water Treatment Plant Solids Handling and Disposal Facility design, in an amount not to exceed $4,789,425, and the STV contract amendment for the Navigation Pump Station Improvements Project in the amount of $626,237. Councilmember Hernandez asked for better tracking of water fund project costs given the fund's debt level.
• Item 27: The Council approved the three-year WellMed Charitable Foundation Joint Use Agreement for Zavala Senior Center and Joe Garza Recreation Center, with two one-year options. Councilmember Klein raised concerns about privatization; staff said WellMed had been providing services since 2014, Zavala has 439 registered members, and WellMed would invest $108,000 in renovations and had taken over the meal program, saving about $480,000 annually. Councilmember Campos said she reluctantly voted for it while urging restoration of the volunteer committee and responsiveness to senior concerns.
• Item 28: The Council approved the disannexation of approximately 129.44 acres between IH-37 and Industrial District No. 1, with Flint Hills Resources, Koch Refining Co LP, and Osage Power Inc required to make payment in lieu of taxes equal to 100 percent of ad valorem taxes that would be due if the property remained in the city. Staff estimated the annual payment at about $45,000 based on an assessed value of $7.639 million. Councilmembers Klein and Hernandez expressed concerns about the 15-year agreement term and legislative risk.

Executive Session

The Council recessed into executive session on items 34 and 35, which involved legal consultation on industrial, infrastructure, annexation, and economic development matters, and personnel and employment law matters. It reconvened in open session without reporting action.

Individual Consideration and Public Hearings

• Item 29 – Zoning Case ZN8477, MPM Development LP: The Council approved rezoning property at or near 6817 Brooke Road from RM-2 Multifamily to CG-2 General Commercial. Discussion emphasized a masonry wall and sound buffer to protect nearby residences. No public comment was offered.
• Item 30 – North Beach Canal and Streets Construction: The Council approved awarding a construction contract to Mako Contracting for the North Beach canal, Beach Avenue and Gulfspray Avenue reconstruction, Eco Park facilities, and utility improvements. The agenda caption listed $23,830,788.56, but staff said that was a caption error and the motion was amended on the record to the correct bid amount of about $24 million. Scope includes about 4,600 feet of canal, shared-use paths, two pedestrian bridges, drainage work, and all three additive alternatives for Eco Park and bridge improvements. Only one bid was received despite 44 companies expressing interest. North Beach community members had previously urged support. No public comment was offered at the hearing.
• Item 31 – Chapter 380 Economic Development Agreement with 2AVH Calallen, LP: The Council approved a performance-based Chapter 380 agreement for a retail development near I-69E in Calallen, with up to $5.2 million in ad valorem and sales tax rebates. The project includes about 27 acres, 120,000 square feet of junior box retail, 14,000 square feet of strip retail, an estimated total cost of $53.8 million, and $11 million in infrastructure. The agreement includes a 50 percent sales tax rebate, a 75 percent property tax reimbursement, a 10-year term, and a minimum appraised value of $26.9 million. Councilmember Hernandez opposed the incentive, saying it picked winners and losers in retail and did not create primary jobs; supporters said it would capture sales tax from outside the city and benefit northwest Corpus Christi. No public comment was offered.
• Item 32 – Michael J. Ellis Seawall Improvement Design: The Council approved a professional services contract with Hanson Professional Services for up to $1,181,870 to design the North Padre Island seawall improvement project, funded from TIRZ No. 2. Staff noted the final easement was received the day before the meeting. Councilmember Klein said he voted against it because he opposed the city taking over the seawall project. No public comment was offered.
• Item 33 – Project Financing Zone No. 1: The Council unanimously approved a one-reading ordinance designating Project Financing Zone No. 1 in the area around the American Bank Center. Incremental hotel occupancy, sales, and mixed beverage taxes from approximately 20 hotels in a three-mile radius are estimated to generate about $70.8 million over 30 years. Councilmember Hernandez questioned why the three-mile radius could not be reduced because much of it is water and asked staff for written documentation of the state position and for consideration of a legislative fix. No public comment was offered.

Key Outcomes

• Approved the remaining consent agenda as a block, with pulled items individually considered and item 18 removed from the agenda.
• Approved the item 6 substitute annexation ordinance after removing the HS Constructors tract.
• Approved item 7 disannexation of about 15.4 acres; Councilmember Campos stated she voted against it.
• Approved item 11 airline use and lease agreements with United, Southwest, and American.
• Approved item 15 ARPA funding reallocation.
• Approved items 22 and 23, including the O.N. Stevens solids handling design contract with Ardurra and the Navigation Pump Station contract amendment with STV.
• Approved item 27, the WellMed Joint Use Agreement for Zavala Senior Center and Joe Garza Recreation Center.
• Approved item 28, disannexation of approximately 129.44 acres, with 100 percent payment in lieu of taxes and an estimated annual payment of about $45,000.
• Approved item 29 zoning change at 6817 Brooke Road.
• Approved item 30 North Beach construction contract as amended.
• Approved item 31 Chapter 380 agreement with 2AVH Calallen, LP despite Councilmember Hernandez's stated opposition.
• Approved item 32 seawall design contract; Councilmember Klein stated he voted against it.
• Approved item 33 Project Financing Zone No. 1 unanimously, with Councilmember Hernandez requesting written documentation on the three-mile radius issue and a possible legislative change.