02/17/2009-CC-Minutes-Work SessionMINUTES: CITY COUNCIL WORKSESSION
February 17, 2009
MEMBERS
PRESENT:Mayor Pro-Tem Glenn Ervin, Councilman Robert Patton, Councilman Mike
Walker, Councilman Thomas Muir
MEMBERS
ABSENT:Mayor Joe Higgs, Councilman Andy Garza
OTHERS
PRESENT:Mike Brice City Manager, Rose Chavez City Secretary/Asst. City Manager,
City Engineer Rob Woods, Director of Developer Services Joe Iliff
1.Call Meeting to Order.
Mayor Pro-Tem Ervin called meeting to order.
2.Discussion on Implementing an Annual Road Reconstruction Program.
City Manager discussed the annual implementation of a road reconstruction
program. He expressed a concern that the City can’t sell enough bonds to keep up
with capital improvements for the reconstruction of streets in Sanger. The streets in
Sanger have been a major issue. The one thing that can be done to ease the burden
for the next few years, in an effort to get caught up, is for the City to do some road
reconstruction on existing roadways. City Manager discussed the opportunity for
the City to purchase an asphalt zipper. This piece of machinery mills the existing
surface and creates a solid base that will allow for the overlay on the street. The
savings for the City is that the employees can do the road mill to create the base for
the overlay. The overlay can be contracted at a lesser cost. The City Manager
continued with a discussion concerning the cost savings to the City. He advised the
Council that a company did come and demonstrate the machine. They worked on
Pecan Street and staff was impressed by the end result. A new machine runs about
$90,000, and Denton County has one for sell for $50,000. The County wants to sell
this equipment since it did not meet their needs for their construction projects. The
machine has about 1 ½ hour of time used. In his opinion this is the best way to
proceed in an effort to get caught up with street repairs. The purchase of this
equipment will allow the City to implement a program for street construction. The
first area they would like to work on is Holt and Berry.
Discussion continued concerning the cost to rent a front end loader to be able to use
the asphalt zipper, and allocation of funds for the purchase. The life span for this
equipment is 10-15 years. City Manager advised if the Council did not have any
objections, he would like to proceed with the purchase of this equipment.
3.Discussion on Purchasing of Property by the 4A Board for Economic Development
Purposes.
City Manager advised that this property (103 Bolivar) has been vacant for a long
time. There have been several companies who were interested in the building, but
those have fallen out. The owner had contacted him sometime in December and
wanted to know that if the sale price was reduce significantly would the City be
interested in purchasing the property. He advised the owner that from the City’s
standpoint we would not be interested; however, from an economic development
perspective it might be a possibility.
He scheduled a meeting with the 4A Board and they agreed that the City Manager
pursue the purchase of this property. He negotiated a price of $825,000 for the
purchase of this property, and after another scheduled meeting of the 4A Board the
members agreed to move forward with the purchase.
The City Manager advised he called the owner to let him know. At that time, the
owner notified him he had received another proposal from a potential buyer with a
range of creating 100 jobs. This was the intent of the 4A Board in purchasing this
property for economic development. The realtor advised him today that the
property is still in sale negotiations with the potential buyer.
Councilman Muir inquired on the square footage of the building.
City Manager advised the building has 51,000 square ft. There was a discussion
concerning the improvements that have been made to the building, which included a
new roof. City Manager also advised that Elk River had contacted him concerning
the marketing of this property on a national level. He advised that either way, this
is good move for the City.
Discussion continued concerning financing and the interest rates. City Manager
advised that Prosperity Bank had the best interest rate of 4.6% for a 15 year term.
4.Discussion on Wholesale Electric Purchase Options.
The City Manager discussed that on the regular agenda this is an action item for the
Council to authorize him to research alternative wholesale electric providers and to
notify Brazos of the City’s intent to switch providers. He has talked to other
providers concerning locking in a base rate. The current agreement with Brazos
specifies a 3 year notice to terminate contract. Brazos is willing to let the City
terminate the contract at a cost. The savings to switch providers will outweigh the
cost to get out of the contract. City Manager recommended this is the time to make
the move. He has been in discussion with AEP who is one of the largest nationwide
electric producers and suppliers of electricity. He indicated that if the City could
get a locked rate it will also benefit the customers.
Councilman Patton asked the City Manger if he had any idea on how much the buy-
out would be.
City Manager advised the buy-out cost is $350,000 and this represents the initial
demand charge for this summer. He advised that this cost will be made up the first
year in the savings. He discussed the buy-out could possibly be paid over a year.
The discussion continued concerning the buy-out agreement with Brazos and the
possibility of paying a lesser amount.
Councilman Patton indicated that in the utility audit conducted by Mr. Baines he
had recommended the City conduct a rate analysis since the City was not making
any money.
City Manager advised he had conducted a rate analysis last year and with the
economy taking such a hit, it was put on the shelf. He did not think Council would
consider raising the rates at that time.
5.Overview of Items on Regular Agenda.
There were no other items discussed.
6.Adjournment.
Mayor Pro-Tem adjourned the meeting.