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HomeMy WebLinkAboutMinutes - City Council - Special - 1/7/2004CITY OF LUBBOCK SPECIAL CITY COUNCIL MEETING JANUARY 7, 2004 9:30 A. M. The City Council of the City of Lubbock, Texas met in special session on the 7th day of January, 2004, in Committee Room 103, City Hall, 1625 13th Street, Lubbock, Texas at 9:30 A. M. 9:35 A. M. CITY COUNCIL CONVENED Committee Room 103, 1625 13th Street, Lubbock, Texas Present: Mayor Marc McDougal, Mayor Pro Tern Victor Hernandez, Council Member Jim Gilbreath, Council Member Tom Martin, Council Member Frank W. Morrison and Council Member T.J. Patterson Absent: Council Member Gary O. Boren Mayor McDougal called the meeting to order at 9:35 A. M. Invocation was given by Council Member Patterson. The first item considered was Item 2. ( 1.) Presentation regarding a recommendation for a bond election date. This item was considered following Item 2. Mayor McDougal stated that Council had previously seen the presentation and Council agreed they did not feel it necessary to see it at this time. It was the consensus of Council to call for the bond election for May 15, 2004 on the package that was recommended by the Citizen's Advisory Executive Committee. Anita Burgess, City Attorney, stated that the call for the May election would require two readings and would be on the January 22nd and February 5th agendas. Phyllis Jones, Chairperson of the Citizen's Advisory Executive Committee, was present and expressed the Committee felt each issue they recommended was important. Council Member Gilbreath stated that Council cannot go out and actively campaign for these bonds and suggested that the Citizen's Advisory Executive Committee be asked to do so after an action item was passed. Council Member Morrison asked that the abovementioned presentation be shown on Channel 2 to allow the public to see it. At this time, Council adjourned. (2.) Discussion of terrorism coverage offered on various bonds required by the City of Lubbock. This presentation was designed to convey to Council the options for rejection of terrorism coverage being offered by bond companies on bonds required by the City of Lubbock through Charter, Ordinance or purchasing contract agreement. The City requires surety bonds to answer for the default and acts or omissions of a party to guarantee the performance under a contract and/or to protect against the dishonesty of its employees. In all instances that the City requires a bond, the City becomes the bondholder or obligee. The City holds approximately 500 surety bonds, which are renewed annually. Some bond companies have determined that the Terrorism Risk Insurance Act of 2002 applies to them and are now offering terrorism coverage to the obligee. As with terrorism coverage for the city -owned policies, the Council has only 30 days to reject or accept and pay for the coverage. Special City Council Meeting January 7, 2004 Page 2 Due to the short time frame to respond, and in light of the fact that there is normally limited risk exposure, staff asked Council to consider one of the following options for rejection of terrorism coverage on bonds: • Delegation of the Authority to Reject Coverage to the City Manager • Adoption of a Policy Rejecting Terrorism Coverage on Bonds At any time that the City Manager deems an item to be worthy of consideration for terrorism coverage due to the financial risk or inherent risk in the project, the City Manager would bring that particular issue forward for Council's consideration. FISCAL IMPACT: No funds are directly impacted, however, acceptance of the terrorism coverage could potentially impact costs of projects and costs to citizens doing business in the City of Lubbock. This was to inform Council of their right to accept or reject terrorism coverage on the bonds, which it holds and to offer suggestions of relief for rejection of routine bonds through adoption of a policy or delegation to the City Manager. Leisa Hutcheson, Risk Manager, gave the presentation. She stated there was an action item on the January 81h Council agenda requesting that Council delegate authority to the City Manager for rejection of coverage. Council Member Boren arrived at 9:42 A.M. The next item considered was Item 1. 9:53 A. M. COUNCIL ADJOURNED There being no further business to come before Council, Mayor McDougal adjourned the meeting. 1 i MARC MCDOUGAL, MAYOR ATTEST: Rebecca darza, City Secretary Read and approved this day of ` V, 2004. MARC MCDOUGAL, MAYOR ATTEST: Rebecca Garza, City Secretary 2