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HomeMy WebLinkAbout1989/11/02-Minutes-City CouncilCouncil Met Members Present Special Meeting SPECIAL CITY COUNCIL MEETING NOVEMBER 2, 1989 On the 2nd day of November, A.D., 1989, the City Council of the City of Fort Worth, Texas, met in special session, with the following members and officers present, to -wit: Mayor Bob Bolen; Mayor Pro tempore Garey W. Gilley; Council Members Louis J. Zapata, William N. Garrison, Kay Granger, Eugene McCray, Steve Murrin, Jr., and Virginia Nell Webber; City Manager David Ivory; City Attorney Wade Adkins; City Secretary Ruth Howard; Council Member David Chappell absent; with more than a quorum present, at which time the following business was transacted: Attention of the City Council was called to a call of the Mayor for a special meeting of the City Council, as follows: NOTICE OF SPECIAL MEETING OF THE FORT WORTH CITY COUNCIL TO BE HELD IN THE CITY COUNCIL CHAMBER OF THE FORT WORTH CITY HALL 1000 THROCKMORTON STREET, FORT WORTH, TEXAS 76102 AT 10:00 A.M. ON NOVEMBER 2, 1989 The following matters will be considered by the Fort Worth City Council at a special meeting to be held in the City Council Chamber of the City Hall commencing at 10:00 A.M. on November 2, 1989: 1. The City Council will meet in closed or executive session for the following purposes: (a) To discuss the following lease of Fort Worth real property at Fort Worth Alliance Airport: ground lease and management agreement with Pinnacle Air Services, Inc. as authorized by Section 2(f), Article 6252-17, V.A.C.S. The public discussion of such item would have a detrimental effect on the negotiating position of the City as between the City and a third person, firm or corporation. Minutes of City Council N-3 Page 292 Thursday, November 2. 1989 293 Special City (b) To receive the advice of its attorney concerning the Council Meeting following matters which are protected from public cont. disclosure by Canon 4, Texas Code of Professional Responsibility and Section (e), Article 6252-17, V.A.C.S.: ground lease and management agreement with Pinnacle Air Services, Inc. 2. Discussion and action concerning authorization for the City Manager to sign a ground lease and management agreement at Fort Worth Alliance Airport with Pinnacle Air Service, Inc. /S/ Bob Bolen It was the consensus of the City Council that the City Council recess into a Recess into a closed or executive session to discuss the ground lease and management agreement with closed or ex- Pinnacle Air Services, Inc., as authorized by Section 2(f), Article 6252-17, V.A.C.S., ecutive session the public discussion of which would have a detrimental effect on the negotiating position of the City as between the City and a third person, firm, or corporation; and to receive the advice of its attorney concerning the ground lease and management agreement with Pinnacle Air Services, Inc., which are protected from public disclosure from Canon 4, Texas Code of Professional Responsibility and Section 2(e), Article 6252-17, V.A.C.S. Reconvened into The City Council reconvened into regular session with all members present, at regular session which time the following business was transacted: City Attorney Adkins announced the following proposed changes to the proposed ground lease and management agreement with Pinnacle Air Services, Inc., as follows: 1. Section 4.3 Vendor Contracts - applies only to those contracts that are contracts between the City of Fort Worth and the vendor and not those contracts that are between Pinnacle Air Services, Inc., and vendors. 2. Annual financial statements to be provided to the City by Pinnacle Air Services, Inc., shall be audited financial statements. 3. For clarification purposes, in the language indicating what City Services Pinnacle Air Services, Inc., will be required to pay, those would include impact fees which are charged by the City and those would then be rolled into the Capital Account and would be expenses that would be reimbursed. 4. In the language of the management agreement, dealing with payment of taxes, insertion of language indicating it is not the intention to indicate that the City deems that any of those improvements put on the property would be taxable. 5. Insertion of language indicating it would be personal property that was used in the management of the airport and not other personal property belonging to Pinnacle that could be rolled into the business expenses at the airport. 6. On Page 15 of the management agreement, Section 11.3.3(d)(ii) change to read as follows: "Fair market value of the improvements as of the date of termination, such payment to be made to manager within two years of date of termination;" 7. Add paragraph indicating that, in the construction contracts that were entered into by Pinnacle Air Services, Inc., it would comply with the Disadvantaged Business Enterprise Guidelines of the City of Fort Worth for construction contract. 8. Amend Article 6.1(b), the next to the last sentence, to read as follows: "If the City waives or reduces Airport Revenues without the consent of the Manager, or if the City takes any other action with respect to the airport without the consent of the Manager which abates, abridges, or diminishes the right of the Manager specifically set forth in this agreement and reduces Airport Revenues or increases Airport Expenses, the annual contribution will be increased by an amount of money equal to the decrease in Airport Revenues or the increase in Airport Expenses. 9. Amend Article 6.1(c) by adding the following language: "Furthermore, the City shall incur no liability regarding any ad valorem taxes levied and assessed on the Manager's property, whether real or personal, by any other taxing unit having jurisdiction at the airport. Minutes of City Council N-3 Page 293 291 Thursday, November 2, 1989 Special City 10. Amend Article 8.2, Assignment by the City, by striking the Council Meeting first sentence and rewording the remainder of Article 8.2, as cont. follows: Any sale, conveyance, transfer, assignment, mortgage, or pledge by the City resulting from a requirement of law will constitute a termination of this agreement and the consequences of such termination will be the same as the consequences for termination set forth in 11.3.1." 11. Add to the contract for the management of Fort Worth Alliance Airport a last paragraph: "The terms and conditions of this agreement and the rights, duties, and obligations of the parties hereunder shall be subject to the terms, conditions, rights, and duties of the City as set forth in and governed by ordinances adopted by the City including but not limited to the ordinances adopted by the City with respect to the issuance of bonds and other obligations for the acquisition, construction, and expansion of facilities owned in whole or in part by the City." 12. Amend Article 11.3.4(c) to read as follows: "The City will acquire all rights and revenues, and assume (and release the Manager from) all obligations, with respect to the Capital Improvements." Mr. Will Williams o6 Mr. Will Williamson, 5424 Odom Avenue, appeared before the City Council and re Special City expressed opposition to Article 12.3 of the contract regarding additional obligations Council Meeting of the City and to the non -participation of the Fort Worth Aviation Advisory Board in the development of the management contract. Mayor Bolen advised Mr. Williamson the City Council is in receipt of correspondence from Anne Cozart, Chairman of the Fort Worth Aviation Advisorty Board, as follows: November 1, 1989 TO: The Honorable Mayor and City Council FROM: Anne Cozart, Chairman of the Aviation Advisory Board SUBJECT: Contract for Management of Alliance Airport by Pinnacle Air Services At a special, called meeting on November 1, 1989, the Aviation Advisory Board reviewed the most recent draft of the contract for management of Alliance Airport. It is the consensus of the Board that: 1. As the Board has previously stated, we still believe it to be in the best interest of the City that the City retain the management of Alliance Airport; 2. However, if it is the determination of the City Council that management of Alliance Airport will be placed with a private entity, we can endorse the most recently drafted contract provided that no significant changes are made through further negotiations with The Perot Group. Thank you for the opportunity to review and comment on the contract. Further we want to commend the City staff on the revised document which addresses many of those concerns expressed by Board members and citizens. Respectfully submitted /S/ Anne Cozart, Chairman Fort Worth Aviation Advisory Board Mr. Timothy Mr. Timothy Stewart, 6209 Vel Drive East, a member of the Fort Worth Aviation Stewart re Advisory Board, appeared before the City Council and stated that, in his opinion, the Special City City of Fort Worth is better suited to manage the Alliance Airport. Council Meeting Mr. Slats Freeland I Mr. Slats Freeland, 3408 Creston Avenue, appeared before the City Council and re Special City 1 expressed opposition to the proposed management contract for Alliance Airport. Council Meeting Mr. Henry L. New- Mr. Henry L. Newman, representing the Aircraft Owners and Pilots Association, man re Special appeared before the City Council and expressed opposition to the proposed contract for City Council Meet- management of Alliance Airport. ing Mr. David Broiles Mr. David Broiles, representing Mr. Reed Pigman, appeared before the City re Special City Council and advised the City Council of correspondence delivered to City Manager David Council Meeting Ivory, as follows: Minutes of City Council N-3 Page 294 295 Thursday, November 2, 1989 Special City November 2, 1989 Council Meeting Hand Delivery cont. Mr. David Ivory, City Manager City of Fort Worth 1000 Throckmorton Street Fort Worth, Texas 76102 RE: Agreement between City and Pinnacle Air Services, Inc. Dear Mr. Ivory: Late Wednesday, November 1, 1989, 1 received a copy of the new proposed Management Agreement for Fort Worth Alliance Airport. On behalf of Mr. Reed Pigman, I offer the following comments and observations concerning the agreement: 1. It does not appear that the proposed Manager has posted the $5 million deposit as required by the bid documents. I do not know why the City appears to have waived this requirement. It was not proposed in the bid documents that a bidder could negotiate with the City without posting the $5 million. 2. The failure to require the $5 million posting of security is not remedied by the requirement that Pinnacle furnish a financial statement (see, p. 2). Can the City reject Pinnacle as a bidder if it is not satisfied with its financial condition? Pinnacle appears to be a shell corporation formed in June 1989. 3. Section 4.3, p. 3, relates to obtaining bids from vendors. Does the Manager have to comply with state law and the City Charter on seeking competitive sealed bids for acquisitions? 4. Though the City requested it in its supplement to the request for bids, Pinnacle never specified its proposed rate of return, but made that subject to negotiation. I believe this is in violation of the requirements of state law as set forth in Section 252.044 of the Local Government Code. The negotiated rate of 5.5 percent, plus the 13 -week T -Bill rate, was not in the Pinnacle bid, and has been a negotiated term. In that respect, it violates the State bidding requirements, and I would call your attention to Sterrett v. Bell, 240 S.W.2d 516 (Tex. Civ. App. --Dallas 1951). I find nothing in the contract that required Pinnacle to build the facilities according to its bid, which it estimated to be $10,700,000 for the improvements. Is there such an obligation? Why has it been waived, since the bid documents required each bidder to specify the cost of the proposal for capital expenditures? 5. There was nothing in the bid documents allowing the bidder to terminate on six months' notice, and receive all money back. The bid documents required a 30 -year agreement, but with five-year intervals if agreed by both parties. The proposed contract allows the City to terminate at 5 -year intervals. However, it gives the bidder something which was not set forth in the bid documents, the right to terminate on six months' notice anytime. This is a violation of the requirements of the state statute on bidding and does not conform to the Pinnacle bid. 6. The condemnation provision in Section 12.13 was not included in the original bid package, and therefore was not a benefit to the bidder known to others who may have been interested in this public bidding. 7. Exhibit B to the Management Agreement does not contain any obligation on the part of the Manager to construct the improvements as set forth in the original bid response or the supplement to that response, in the amount of $10,700,000. I believe this covers some major differences between the bid proposals and the proposed contract. I call them to your attention in an effort to make sure that the bidding process conforms to applicable state law. I have not tried to cover all possible issues. Respectfully submitted, /S/ R. David Broiles RDB:smb cc: City Council Members Minutes of City Council N-3 Page 295 296 Special City Council Meeting cont. Mr. Reed Pigman re Special City Council Meeting Ms. Dynette Torres re Special City Council Meeting Mr. Jack Tollett re Special City Council Meeting Mr. Bili Moore re Special City Council Meeting Mr. H. Ross Perot re Special City Council Meeting lAdjourned Thursday, November 2, 1989 Mr. Broiles suggested that approval of the contract for the management of Alliance Airport with Pinnacle Air Services, Inc., may lead to a taxpayer's suit. Mr. Reed Pigman appeared before the City Council and expressed opposition to the proposed management contract with Pinnacle Air Services, Inc., for Fort Worth Alliance Airport. Ms. Dynette Torres, 2808 Ryan Place Drive, appeared before the City Council and expressed opposition to the management contract for operation of Alliance Airport by Pinnacle Air Services, Inc. Mr. Jack Tollett, 1144 Clara Street, appeared before the City Council and expressed opposition to the proposed management contract with Pinnacle Air Services, Inc., for management of Alliance Airport. At this time, Mayor Bolen excused himself from the Council table and Mayor Pro tempore Gilley assumed the chair. Mr. Bill Moore, 2509 West Berry, No. 3, appeared before the City Council and expressed support of the proposed management contract with Pinnacle Air Services, Inc., for Alliance Airport. Mr. H. Ross Perot, Jr., 777 Main Street, appeared before the City Council and expressed his concern regarding the proposed contract having the potential to create tremendous losses for Pinnacle Air Services, Inc.; and the extent of the risk the City of Fort Worth is willing to take; and stated that, in his opinion, compliance with FAA grant regulations should not be endangered; that revenue at Alliance Airport should stay at Alliance Airport; that the name "Alliance" should remain with the airport; and pledged his willingness to continue to work on the contract. At this time, Council Member Webber excused herself from the Council table. Mayor Bolen returned to the Council table and assumed the chair. Council Member Chappell made a motion, seconded by Council Member Garrison, that the management contract with Pinnacle Air Services, Inc., for management of Alliance Airport be approved in principal only and that the City Manager be instructed to address the concerns raised today and to proceed with finalizing the contract. When the motion was put to a vote by the Mayor, it prevailed by the following vote: AYES: Mayor Bolen; Mayor Pro tempore Gilley; Council Members Zapata, Garrison, Granger, McCray, Murrin, and Chappell NOES: None ABSENT: Council Member Webber There being no further business, the "'v - CITY SECRETARY Minutes of City Council N-3 Page 296