CITY OF LAREDO
                              CITY COUNCIL
                         AIRPORT ADVISORY BOARD
                     CONVENTION AND VISITORS BUREAU
               WORKSHOP ON ECONOMIC DEVELOPMENT SALES TAX

                    MAIN LIBRARY MULTI-PURPOSE ROOM
                          1120 E. CALTON ROAD
                             LAREDO, TEXAS
                         11:30 A.M. - 2:00 P.M.


                                MINUTES

      M-98-W-06                                  FEBRUARY 11, 1998

   I.  CALL TO ORDER

       With a quorum present Cm. Alfonso I. "Poncho" Casso called the meeting to
       order.

  II.  PLEDGE OF ALLEGIANCE

       Cm. Casso led in the Pledge of Allegiance.

 III.  ROLL CALL
       IN ATTENDANCE:
       JOSE R. PEREZ, JR.,   COUNCILMEMBER, DISTRICT I  (arrived 11:40)
       LOUIS H. BRUNI,              "     , DISTRICT II
       ALFONSO I. "PONCHO" CASSO,   "     , DISTRICT III
       CECILIA MAY MORENO,          "     , DISTRICT IV (arrived 11:40)
       JOE A. GUERRA,               "     , DISTRICT VI
       MARIO G. ALVARADO,           "     , DISTRICT VII
       CONSUELO "CHELO" MONTALVO,   "     , DISTRICT VIII
       FLORENCIO PENA, III,  CITY MANAGER
       JAIME L. FLORES,      CITY ATTORNEY

       ABSENCES:

       ELISEO VALDEZ,        COUNCILMEMBER, DISTRICT V
       GUSTAVO GUEVARA, JR., CITY SECRETARY

  IV.  DISCUSSION REGARDING JET SERVICE FOR THE CITY OF LAREDO TO INCLUDE A
       BRIEFING ON THE PROPOSALS PUT FORWARD BY AMERICAN AIRLINES AND
       CONTINENTAL AIRLINES.

       Jose Luis Flores, Airport Director, made the presentation and gave an
       overview of jet service initiative, a comparison of two proposals, that
       will fit the city's needs, a prospectus of future eventualities under the
       provisions of each proposal, and a presented a listing of the support of
       jet service in the community.

       He said that they received concrete proposals form both American and
       Continental Airlines and have spent considerable time and effort
       comparing the two, to determine the best alternative for the City.

       They believed they have found the partner they want in Continental
       Airlines.

       Through exploration of the issues inherent with the two proposals, one
       fact stood out in a sharp relief - jet service at reasonable air fares
       will be an expensive enterprise for the
       city to undertake.

       The reason is simple, domestic airlines are currently enjoying a period
       of unprecedented success and profitability.  The demand for jet aircraft
       is high, as is witnessed by the record high load factors on all routes
       flown by the major airlines.

       Continental Airlines' 1997 profits rose 15 percent compared to
       1996, making 1997 the third consecutive year that Continental set a
       record for profitability.

       What all that means to Laredo is this:  No airline will take a jet off a
       successful route and put it on the unproved Laredo route without a
       guarantee they will receive at least as much revenue as they would have
       previously.

       Depending on the proposal and assuming a worst-case-scenario, it could
       cost between $1 million and $3.2 million dollars a year to underwrite a
       minimum level of jet service.

       Assuming the best-case-scenario, the city would not pay a cent.

       The question is, can we afford to do otherwise?  The City of Brownsville
       faced the same question five years ago, and said no.  Brownsville spent
       nearly $2 million over three years, and now has two jet flights daily at
       not cost to the city.

       When Brownsville secured jet service, Laredo was left as the only large
       metropolitan center on the Texas-Mexico border without jet service. Can
       Laredo afford jet service?


       Continental has offered a one year contract for one 129 seat Boeing 737
       flight daily except Sunday, to take the place of one of the five flights
       currently offered by Continental Express.  They suggest the flight to be
       the last one in the evening and the first one in the morning, with the
       jet remaining in Laredo overnight.  He briefed council on schedules,
       fares at their current level for the duration of the contract, securing
       the Boeing 737, etc. vs. American Airlines, and comparison of proposals.

   V.  DISCUSSION REGARDING SECTION 4b OF THE DEVELOPMENT CORPORATION ACT OF
       1979, TO INCLUDE PURPOSE AND LIMITATIONS OF THE ACT, THE PROCESS FOR THE
       APPOINTMENT OF THE DEVELOPMENT CORPORATION'S BOARD AND THE TYPES OF
       PROJECTS THAT CAN BE FUNDED THRU THE ECONOMIC DEVELOPMENT SALES AND USE
       TAX.

       Florencio Pena, City Manager, made the presentation, he expressed that
       several cities have adopted a sales tax, several using a 4a and 4B.  He
       said that Section 4a was created to fund expansion of industrial or
       manufacturing enterprises, and Section 4b was created to fund a wide
       range of civic and commercial projects, in addition to manufacturing.

       He briefed council on the Economic Development sales tax facts, added
       that 265 cities adopted either 4a or 4b economic development sales tax,
       such as McAllen, Weslaco, Cotulla, etc.
       It is created by a majority vote of the electorate and may be dissolved
       by a resolution of the City Council.  All expenditures must be approved
       by the City Council and all projects are subject to petition by the
       electorate.  He added that Economic Development Corporation gets its
       funds from a fraction of the sales tax up to half a cent per dollar of
       retail.  A quarter-cent sales tax will generate about $3 million
       annually, which can leverage up $30 million in bonds.

       Currently sales tax in Laredo is 8.00 cents per dollar of retail sales.
       The maximum allowable sales tax is 8.25 per dollar of retail sales.
       Laredo voters may approve up to .25 cents (a quarter-cent) sales tax for
       economic development.

       He explained the local sales tax breakdown:
             6.25 cents..........State of Texas for all state
                                 Government functions.
              .50 cents..........County of Webb for general
                                 purposes.
              .25 cents..........Transit tax
             1.00 cents..........City of Laredo for general fund
             __________
             8.00 cents..........Total local sales tax

       Mr. Bob Bearden, of the State Comptroller's Office in Austin,
       and Mr. Mike Kazen of the Laredo Office made the presentation and stated
       that it is not 265 Texas cities that have adopted either the 4a and 4b
       economic development sales tax, but 362 cities.

       He explained the economic development sales tax process, a report must be
       filed annually, for a 4b sales tax there must be a public hearing held in
       advance, and an election must be called.

 VI.   DISCUSSION ON THE TIME LINE LEADING UP FOR THE ELECTION, PROCEDURES TO
       FOLLOW ON SELECTION OF PROJECTS OR GOALS PROPOSED (FUNDED BY THE
       DEVELOPMENT CORPORATION), AND SCHEDULING OF PUBLIC HEARINGS TO GET
       COMMUNITY'S INPUT.

       Cm. Casso was in favor of the Economic Development Sales Tax, thinks it
       will not pass in 1998, but if they go for it he rather have it in May in
       terms of the 4a.

       Mr. Bearden stated if they chose a 4a they have to get rid of it, by
       election to repeal it.  With a 4b the statute provides if there is no
       debts and obligations, they notify them and they stop it (depends on
       obligations).  He added if this election is held it needs to pass the
       first time.

       Mr. Pena stated the proposed time frame would be March 23 to pass an
       ordinance, for an election on May 2nd.

       The other would be until August to hold an election, the ordinance must
       be passed by June 28th, there is a process that they would have to
       follow.

       Cm. Bruni wants to see this item for the May election and that other
       projects be presented such as a sports complex.

       Mr. Guerra of the Airport Advisory Board was concerned about the $3
       million, that it is too much money, and maybe not enough time to educate
       the voter for May, and that no money will be left for other projects.

       Cm. Alvarado agreed to the sales tax election, because jet service is
       needed, but thinks it should be held in August because May is too soon
       and thinks it will be defeated.

       Cw. Montalvo thinks that May is too soon.

       Mr. Jerry Swebel stated they need time, in order to inform the public,
       because there will be confusion and because two months is not enough.

       Cm. Perez stated they need to set up a meeting for February 24th, bring
       proposed projects and approaches.

       Mr. Pena stated they need to act as if it was for May 2nd, bring project
       and evaluate them, start working in two or three
       projects and if they are not ready then do it in August.

       Mayor Protem Perez wants staff to explore the possibility of a water
       park.

       Louis Shuey member of Convention and Visitors Bureau stated that the
       issue is selling the sales tax to the public.

       Mr. Pena asked whether we want to go specific or do we want to
       undertake more projects.  He said they will post a workshop
       for February 24th with the same group plus the with the retail group from
       11:30 to 2:00 p.m, but before that meeting, meet with the Economic group.

 VII.  ADJOURNMENT

       Motion to adjourn.

       Moved : Cm. Bruni
       Second: Cm. Casso
       For:  5                     Against:  0         Abstain:  0

I HEREEBY CERTIFY THAT THE ABOVE THE MINUTES CONTAINED IN PAGES 01 TO 05 ARE
TRUE COMPLETE AND CORRECT PROCEEDINGS OF THE WORKSHOP HELD ON THE 11TH DAY OF
FEBRUARY, 1998.  A CERTIFIED COPY IS ON FILE AT THE CITY SECRETARY'S OFFICE.


                                  ________________________
                                   GUSTAVO GUEVARA, JR.
                                   CITY SECRETARY