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082021 Friday Staff Report
City Manager's Office "F 215 E. McKinney St., Denton, TX 76201 • (940) 349-8307 DENTON MEMORANDUM DATE: August 20, 2021 TO: The Honorable Mayor Hudspeth and Council Members FROM: Sara Hensley, Interim City Manager SUBJECT: Staff Report I. Council Schedule A. Meetings 1. Public Utilities Board on Monday, August 23, 2021, at 9:00 a.m. in the Council Chambers. 2. Cancelled - Council Airport Committee on Tuesday, August 24, 2021, at 10:00 a.m. in the City Hall Conference Room. 3. Work Session of the City Council on Tuesday,August 24, 2021, at 2:00 p.m. in the Council Chambers. 4. Cancelled - Development Code Review Committee on Wednesday, August 25, 2021, at 12:30 p.m. in the City Council Work Session Room 5. Cancelled - Civil Service Commission on Wednesday, August 25, 2021, at 1:00 p.m. in the City Council Work Session Room. 6. Denton Police Department Chief of Police Advisory Board on Wednesday, August 25, 2021, at 6:00 p.m. in the Public Safety Training Center. 7. Cancelled-Health and Building Standards Commission on Thursday,August 26, 2021, at 3:00 p.m. at the Development Service Center. 8. Cancelled - Board of Ethics on Thursday, August 26, 2021, at 3:00 p.m. in the Finance Conference Room. 9. Audit/Finance Committee on Friday, August 27, 2021, at 1:00 p.m. in the City Hall Conference Room. OUR CORE VALUES Integrity • Fiscal Responsibility • Inclusion • Transparency • Outstanding Customer Service II. General Information & Status Update A. Pending Council Requests Work Session Topics — Pursuant to Ordinance No. 19- 2026, the following items will be discussed during the August 24 City Council Work Session. Each week, the topics included on the next week's agenda will be in the Friday Report. Staff contact: Rachel Balthrop Mendoza, City Manager's Office 1. A work session to add Denton college and university campuses to our new mask ordinance. a. Requestor: Council Member Armintor b. Council Member Request: "I'm requesting a work session to add Denton college and university campuses to our new mask ordinance,which currently covers pre-k through 12 and child care centers. On Thursday August 12th, the same day of Council's emergency meeting where our new mask ordinance was decided, Dallas County's Judge Jenkins added colleges and universities to the Dallas County mask mandate,which Denton City Council strategically decided to copy in ours. Because of Denton City Council's strategic direction to copy Dallas County in our mask mandate; because of the public health benefit of protect the over 100,000 additional Denton residents, students, and workers covered by such an addition; and because of the additional public health benefit of protecting the rest of Denton from the COVID D Variant that will inevitably spread from these mask-optional higher education facilities into the city populations in which local students and staff circulate, it is urgent that Council discuss following Dallas County's lead on protecting our city's large college population as well and consider altering our new mask ordinance accordingly before in-person college classes start and the dorms fill up." c. Stafflnformation: City Council adopted Ordinance No. 21-1771 (Exhibit 3) during an Emergency Meeting on August 12, 2021 that requires a "Health and Safety Policy"to be developed and implemented at Pre-K through 12 Public Schools and Child Care Centers, and Commercial Entities. The Health and Safety Policies must require, at a minimum, universal indoor masking for all teachers, staff, students, and visitors to child care centers and pre-K through 12 schools, regardless of vaccination status, except for children under 2 years of age. Commercial entities must also require, at a minimum, universal indoor masking for all employees and visitors to the commercial entity's business premises or other facilities. If a consensus of Council would like to move forward with Council Member Armintor's request, staff can prepare a work session to discuss during the next Council meeting. The local colleges and universities have information available on their websites (links provided below) regarding their COVID- 19 precautions and policies. State universities, such as the University of North Texas and Texas Woman's University, would need to assess and determine on their own if they could comply with a local mask requirement, or if the Governor's state-wide order,which prohibits masking requirements, would supersede the local ordinance for their entity. 2 University of North Texas COVID-19 Information Texas Woman's University COVID-19 Information North Central Texas Colle_e COVID-19 Information d. Date requested:August 13, 2021 e. Format for response: Work Session 2. A resolution opposing Senate Bill 1 and House Bill 3,which are planned for consideration in the Texas Legislature's special session. a. Requestor: Council Member Maguire b. Council Member Request. "I would like to make a one-minute pitch at the 9/24 Council meeting to consider a resolution opposing Senate Bill 1 and House Bill 3, which are planned for consideration in the Texas Legislature's special session. The City's 2021 State Legislative Program states, "The City of Denton will work to protect Denton residents' right to govern themselves and work with their local government and local elected officials to make decisions about their community at the local level." Voting rights are at the heart of our residents' ability to self-govern, and SB 1 and HB 3 include provisions that, if enacted, would chip away at Denton voters' ability to participate in our democracy at the local, state, and national level. Resolutions opposing these bills have passed in the cities of El Paso and Austin and in Bexar and Harris Counties. Below is sample language to be included in such a resolution, based upon Austin's resolution: WHEREAS,the foundational importance of the right to vote in free and fair elections justifies and requires vigilant protection and active encouragement at every level of government,necessitating the implementation of new action to eliminate barriers that intentionally abridge the franchise; and WHEREAS, Denton voters again find themselves on the brink of further disenfranchisement as House Bill 3 and Senate Bill 1 have been introduced during the second 2021 Special Legislative Session; and WHEREAS, these bills would make it harder for Denton voters — and especially voters of color—to vote through: • Banning 24-hour voting; • Banning drive-through voting; •Prohibiting state election officials from proactively disseminating absentee ballots; • Adding new identification requirements for voting-by-mail; • Limiting third-party ballot collection; • Expanding the authority and autonomy of partisan poll watchers; and • Requiring monthly reviews of the state's voter rolls which has, in the past, led to removal of qualified voters from the rolls; 3 WHEREAS, these provisions conflict with the City's adopted legislative priorities for the 87th Texas Legislative Session which include protecting "Denton residents' right to govern themselves and work with their local government and local elected officials to make decisions about their community at the local level"; and WHEREAS, if passed, House Bill 3 and Senate Bill 1 would exacerbate already low voter turnout rates in Texas which is ranked 50th in the nation by the Election Law Journal for ease of voting; and WHEREAS, the legislation currently being considered by the Texas legislature — introduced under the guise of election integrity — would be a solution in search of a problem,as evidenced by the Texas Secretary of State office's assertion that the 2020 election was "smooth and secure," and the consistent lack of widespread voter fraud throughout Texas; and WHEREAS, conversely, House Bill 3 and Senate Bill 1 are responses to historic voter participation in Texas during the 2020 election resulting from jurisdictions increasing access to the ballot box through ensuring voters felt safe (i.e., creating mobile or temporary voting locations, expanding provisions that allow curbside voting, and extending early voting); and WHEREAS, proponents of this legislation seek to build on recent Supreme Court precedent eliminating voting protections once provided by the Voting Rights Act of 1965 and on anti-voter Texas laws which have been ruled unconstitutional by lower courts and placed within the context of the state's long history of voter suppression that has disproportionately disenfranchised Texans of color; and WHEREAS,House Bill 3 and Senate Bill 1 would silence many in our City, thus disallowing community input needed to equitably address today's challenges; and WHEREAS, these anti-democratic bills are antithetical to the values that define the City of Denton; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF DENTON: The City of Denton recognizes that our communities thrive when all voices are heard in our democratic processes and reaffirms support for state and federal legislation that promotes and protects voting rights and access to voting, as well as greater inclusion and civic empowerment. BE IT FURTHER RESOLVED: City Council urges members of the Texas Legislature to withdraw House Bill 3 and Senate Bill 1 and instead take proactive measures to protect voting rights and promote access to voting. BE IT FURTHER RESOLVED: 4 The City Manager is directed to send copies of this resolution to the Governor, Lt. Governor, Speaker of the House, the Denton state and federal delegations, sister City Councils, and to the President of the United States." c. Staff Information: If a consensus of Council would like to consider a Resolution to oppose these two proposed bills,staff can prepare a Resolution and place on September 14 City Council meeting agenda. Staff has included the current draft versions of the bills as they are being considered in this special session of the Legislature,which began on August 7 and is currently scheduled to conclude after 30 days. View Senate Bill 1 View House Bill 3 d. Date requested:August 20, 2021 e. Format for response: Resolution B. DCPH Update to Commissioner's Court — On Tuesday, Aug. 17, Denton County Public Health(DCPH)presented their standing COVID update to the Denton County Commissioner's Court(begins shortly after 59 minute mark and is approx. 25 minutes in length). The following are some notes from the video for convenience only; the video should be watched for the full context, charts, and interpretation. Stats can be viewed at www.DentonCounty.gov/COVIDstats. • Active Cases—As of Tuesday,there were a total of 6,800 active cases county- wide. The total number of active cases by week is still trending up. • Hospitalizations—As of Tuesday, there were about 150 COVID patients in Denton County hospitals. • Vaccines—On Monday 8/16, DCPH opened registration for a 3rd vaccine dose for severely immunocompromised individuals per the recent CDC recommendations. By end of the day on 8/16, DCPH received 815 total 3rd dose registrations. DCPH had two clinics scheduled for the 3rd dose registrations on Tuesday and Thursday,using Pfizer and Moderna vaccines. • When will the age group 5-11 be approved for vaccinations? Pfizer and Moderna both are undergoing studies for this age group. It has been reported that the current estimated timeline for this age group to receive emergency use authorization from FDA/CDC will likely be the last week of September or first week of October. That is just the current estimated timeline. • How effective are the vaccines looking to be? Approximately 9 out of 10 COVID-related hospitalizations in Denton County are unvaccinated. It is possible though that as more people get sick, more variations of the virus could be created, and the vaccine effectiveness could weaken. To date,no one in Denton County that has been vaccinated has passed away due to COVID- 19. Staff contact: Sarah Kuechler, City Manager's Office C. COVID Vaccination Booster Shots—The Denton Fire Department assisted the Denton County Public Health Department recently with COVID Vaccinations on August 19. 5 Fire department paramedics were provided to assist with COVID Booster Shots at their clinics for Moderately and Severely Immunocompromised people based on Centers for Disease Control guidelines. This week the clinic was hosted at a Denton County Facility, but next Thursday, August 26 several City departments including Parks and Recreation Department, Police Department, and Fire Department will be assisting Denton County Public Health Department with Booster Shot Clinics at the Denton Civic Center. Staff contact: Brad Lahart, Fire D. Nighttime Construction on FM-2181 — On Friday August 20, 2021, the Texas Department of Transportation (TxDOT) team managing the road widening and reconstruction project on FM-2181 between Wind River Lane and Barrel Strap Road notified the City of Denton's Capital Projects/Engineering Department that their contractor would be conducting nighttime paving work between August 24, 2021 and September 17, 2021. The reason for the nighttime construction is high daytime temperatures negatively impacts the quality of concrete pavement when it is placed in large quantities. The heat generated by the concrete as it cures combined with the heat absorbed from the atmosphere can cause structural cracking and rapid deterioration of the road surface. Due to daily temperatures continuing to reach the high 90's, TxDOT and their contractor were faced with the choice to either break up the pavement work into much smaller sections which would further delay project construction or shift paving operations to night work to take advantage of the lower temperatures. Paving operations planned to take place between 7:00 p.m. and 6:00 a.m. The TxDOT management team decided that paving at night would provide the best quality roadway and cause the least amount of delay to the schedule. TxDOT is targeting a lane shift in October 2021 to move traffic onto the newly constructed driving lanes while the old lanes are removed and replaced. The FM-2181 project is currently on target to be completed by June of 2022. Staff will continue to share additional information on the FM-2181 project, including the status of nighttime paving work, as it becomes available. Staff contact: Kyle Pedigo, Capital Projects/Engineering E. Status of Fitness Classes and Recreation Facilities During Mask Mandate — In accordance with the ordinance issued by Council on August 12, 2021, Parks and Recreation staff are requesting all participants, visitors, staff, and contractors to wear a face mask while in City facilities. This includes while participating in fitness classes, exercising in the fitness rooms, and participating in athletic activities in the gym. Masks are provided to anyone who may not have one. Staff has been directed to request people to comply but not to get into a confrontation with participants. Staff has not refused services or contacted Denton Police for participants who do not comply. Many fitness room and gym users have refused to comply with the mask mandate. Additionally, several fitness instructors have informed PARD they won't be able to continue to teach classes while the mask mandate is in place due to complications of wearing a mask during intense physical activity. Strict compliance with the mask mandate may lead to further losses among instructors and place staff in confrontational situations with non-complying participants. Staff contact: Gary Packan, Parks and Recreation 6 F. Forestar Rayzor Devleopment—Many Council Members have received e-mails from a concerned resident about the Forestar Rayzor development that is under construction near Roselawn Dr. Staff responded to the resident's concerns by e-mail, and those responses are included below in green. Moving forward, if a resident contacts staff and the City Council about this development, staff will respond to the resident and those responses will be included in that week's Friday Report. Staff contact: Deborah Viera, Environmental Services • I want you all to be aware of the violations that the Forestar Development company have done in relation to the Eagle Creek phase 4 development: Good afternoon, [resident]. I have included responses to your questions below. I feel a point of clarification is needed. The concerns brought up here do not amount to violations as a permit has not been issued. 1.Not putting tree protection fences at drip line. If fences are not at drip line large machinery can compress or dig up the roots, change soil level, and damage bark. The "protected" trees on the fence line have a large chance of dying. Staff continues to be in communication with the site operator and project engineer and is working on changes that will improve the protection of trees intended for preservation. Things on the ground are in flux and not ready for staff approval yet. Please note, any trees that may die will be counted against the minimum of 50%preservation offered. This has been communicated to the developer and site operator. 2. Not preserving 50% of the historical 200-year old trees. The developer continues to demonstrate that 50% of the identified area of Cross Timbers Upland Habitat will be preserved. 3. Orange protection fence is falling down. Black silt fencing is not along all protected areas. Staff continues to be in communication with the site operator and project engineer and working on changes that will improve the protection of trees intended for preservation. Things on the ground are in flux and not ready for staff approval yet. Subcontractor is still in process of installing the silt fences. 4. Orange and black fencing is INSIDE the protected area and not where tree protection stakes are. Things on the ground are in flux and not ready for staff approval yet. No clearing in Phase 4 will be allowed to start until the site passes the initial inspection by city staff. 5. Tree protection stakes are on city of Denton property on Roselawn Circle and not on Forestar property. As shared with you in June (6/23/21), drainage improvement necessary for Eagle Creek will include improving an existing drainage swale located on city property. The developer is required by the Texas Commission of Environmental Quality (TCEQ) to obtain a general construction permit that must include all the land that will be disturbed as part of the project. The general construction permit also requires erosion and sediment controls to be installed for capturing sediments generated by the disturbing activities on both the private property and portions of the city-owned property. Staff is also aware that stakes indicating the silt fence and tree protection locations have moved based on staff comments during a site visit with the site operator and project engineer. Staff will confirm silt fencing and tree protection has been installed to satisfy these comments prior to issuing any permits. 6. Building line is not 10" away from property line or city of Denton water tank fence. Staff believes you may be referring to the zoning requirement for final building setbacks. Property owners may disturb land on any location on the property up to the property line, as long as the property owner meets the standards set forth in the Denton Development Code. Homes placed on lots will not be allowed to be less than 10 feet from the lot line. Please contact Development Services if you have questions about building setbacks. Offsite property may be disturbed by the developer with proper approvals. The project engineer has obtained the proper approvals for offsite work. 7. Trails are not marked on replat map for Eagle Creek phase 4. As shared with you in June (6/23/21), the Parks Department has not finalized plans for a bike and hike trail on this property. Please have an inspector come out to the Eagle Creek site and correct the violations before final approval and construction begins. Staff met with the site operator, developer representatives, and development engineer multiple times to check on how things are progressing and discuss minor tweaks to ensure the 50%preservation is met. Things on the ground are in flux and not ready for staff approval yet. No clearing in Phase 4 will be allowed to start until the site passes the initial inspection by city staff. Your prompt response can mean the survival of many historical, endangered post oak trees that improve the beauty and environment of the "tree" city of Denton. G. City Council Call-In Comments and Online Agenda Item Commenting — During the COVID-19 pandemic, the City of Denton began allowing community members the opportunity to provide public comment on agenda items remotely through two methods: by phone or by written comment submitted online. While fully in-person City Council meetings will resume beginning Sept. 1, 2021, staff has decided to continue to temporarily provide options for call-in and online commenting at this time due to the COVID situation. However, included in the proposed FY21/22 budget is funding for a part-time public meeting attendant. If this is approved as part of the budget, this person would, among other duties in support of City Council meetings, receive requests to make comment by phone and connect callers to the meeting audio for comment to the Council and allow the call-in option to be continued. Staff will also be upgrading its method for online agenda item comments. Currently, residents utilize a form where residents provide their information, select the item that 8 they wish to provide comment on, and input their comments. This form is accessible separate from the agenda and time intensive to prepare every week. The City has procured an online agenda commenting solution through Granicus that will be fully integrated with the agenda management system. When fully deployed, residents will have options to provide written comment directly from the agenda itself. In addition to being more intuitive,this will reduce the staff time required for each week's agenda. Residents will be prompted to register to provide written comment,which is a security measure to prevent spamming of the feature. Staff have not set a date to implement the new online comment feature but expect it to launch this fall. Until that time, residents will still be able to provide online comments through the current method. Staff will also ensure that any procedural changes are communicated to the community. Staff contact: Ryan Adams, Customer Service and Public Affairs H. 2020 Census Results — On Thursday, August 12, the U.S. Census Bureau released results from the 2020 Census. Overall,the United States grew by 7.4%,the lowest rate of population growth since the 1940 Census,which recorded a population growth rate of 7.3%. Metro areas grew significantly, with counties of 100,000 or more people growing by 9.1%while counties under 10,000 people shrank. The share of Americans living in metropolitan areas increased from 84.3% in 2010 to 86.3% in 2020. Not surprisingly,north central Texas grew rapidly, and the City of Denton Denton County shared in that growth. • The City of Denton 2020 population is 139,869 versus 116,326 in 2010, an increase of 23,543 or 20.2% • The Denton County 2020 population is 906,422 versus 662,614 in 2010, an increase of 243,808 or 36.7% Over time, the updated population statistics received through the Census have the potential to impact the City's allocation of federal and state grant funding, eligibility for state programs, and our own long-term planning. Staff will update the Council in future Friday reports when it is determined that the updated Census figures will affect operations or services. Additionally, staff intends to schedule a work session in the fall to begin the redistricting process as well as the use of outside counsel/consultants to advise and guide the discussion. Staff contact: Ryan Adams, Customer Service and Public Affairs. I. September 11 Memorial Service — On September 11, 2021 beginning at 0746 hours, the Denton Fire Department plans to host a Memorial Ceremony at 332 E Hickory commemorating the 20th anniversary of events that transpired on September 11, 2001. The intent of the service is to pay honor to the fallen firefighters, law enforcement officers and emergency medical personnel who made the ultimate sacrifice while serving to protect others. The service will consist of Posting of Colors, presenting wreaths in memory of the fallen and Retiring the Colors by a combined Honor Guard consisting of members from both Denton Police and Fire Departments. Denton Fire Pipes and Drums will also be an integral part of the proceedings. Buglers Across America will be in attendance. The ceremony will also include 3 speakers reflecting on how September 11, 2001 impacted their lives and how it impacted the Fire and Police service.Upon completion of the ceremony,the wreaths honoring the fallen will 9 remain on display near the 9/11 Firefighter Memorial Bell Tower at the entrance to the Denton Firefighters Museum(332 East Hickory St.) Staff Contact: David Becker, Fire J. SEDNA Neighborhood Meeting— The attached letter was mailed to residents of the South East Denton Neighborhood Association regarding a public meeting on August 23 that will discuss the development of the vacant lot at 418 Robertson St. Because the meeting will take place at MLK, Jr. Rec Center, staff notified the host that face coverings will be required for attendees. Staff contact: Cameron Robertson, Development Services K. Transparency Star— The Texas Comptroller of Public Accounts' Transparency Stars program recognizes local governments for going above and beyond in their transparency efforts. The Texas Comptroller of Public Accounts' Transparency program has recognized the City of Denton for its commitment to transparency regarding the Public Pension Plans (attached). The City of Denton provided clear and helpful information which included visuals and downloadable data to help vendors, cities and other agencies with understanding the current Public Pension which is available on the City's Financial Transparency website. This is the second star the City has received,the first being the Traditional Finances Star. A total of five stars are available (Traditional Finances, Public Pensions, Debt Obligations, Economic Development and Contracts & Procurement) which the City plans to attain the remaining 3 stars during the next year. Staff contact: Cassey Ogden and Perla Tavera, Finance L. FY 2020-21 Distinguished Budget Award — On August 16, the Finance Department was awarded the Distinguished Budget Presentation Award from the Government Finance Officers Association (GFOA) for Fiscal Year 2020-21. To qualify for this award, the City's budget document, the Annual Program of Services, was judged according to its compliance with specific guidelines established by the GFOA. These guidelines help ensure that the City of Denton's budget document is distinguished as a policy document, financial plan, operations guide, and communications device. The Distinguished Budget Presentation Award is the highest form of recognition in governmental budgeting. Its attainment represents a significant achievement by the organization. This is the thirty-fifth consecutive year the Finance Department has received this award. Staff Contact: Heather Gray, Finance M. COVID-19 Vaccine Clinic Reimbursement — The City of Denton's Fire and Police Departments recently participated in the Texas Motor Speedway vaccine clinic. A portion of the personnel expenses associated with this event are eligible for reimbursement through Denton County. In total, the Finance Department submitted $134,432 in eligible personnel expenses for reimbursement. Staff was recently notified that the City will receive $79,114 in reimbursement, with the remaining amount to be reimbursed in the coming months. Staff contact: Cassey Ogden,Finance N. Deerwood Parkway Sidewalk Ramps - On August 11, the City Manager's Office forwarded a resident's concerns about ADA compliance related to the recent sidewalk repairs on Deerwood Parkway.The repairs in question were prompted from an Engage Denton request filed on June 30 regarding a trip hazard on Deerwood Pkwy. During the repairs,multiple sidewalk panels were replaced along with many sidewalk ramps. 10 Typically, staff will assess and upgrade facilities to meet ADA compliance during any repair or upgrade to sidewalks and other pedestrian facilities. Staff met onsite Tuesday, August 17 to assess the ADA compliance concerns and determined that the ramps will need to be removed and replaced with ADA compliant ramps. The fact that this was not performed with the previous work was an oversight on staffs part, and moving forward,staff will ensure ADA compliance is assessed and addressed as stated above. Staff plans to have to work completed before mid-September, weather dependent. Staff contact: Daniel Kremer, Public Works O. Triple Play Beer Update—The Denton Parks Foundation(DPF)hosted its first Friend of the Parks donor appreciation event at the Denton County Brewing Company (DCBC) on Thursday, August 19 with approximately 60 people attending the event. As of Wednesday,August 18,43 people have registered as donors to become a"Friend of the Parks." Donors were given exclusive access to a Triple Play beer tasting, a DCBC tour, plus food and fun. This was the first time the public has had a chance to taste the Triple Play beer created by DCBC for DPF. Based on the response of this event, DPF may host another in the winter or spring to steward and recruit more donors. September 1, 2021, is the official launch day for the Triple Play brew. The entire day will be a Canning Day with special guests invited to join DPF to kick off this endeavor at 6 p.m. at DCBC. The event will feature outdoor fun as and encourage folks to come and grab a brew for better parks. Staff contact: Brooke Moore, Denton Parks Foundation, via Gary Packan, Parks and Recreation P. Denton Natatorium Closure — The Natatorium will be closed August 23-27 for maintenance. The Ultraviolet Light (UV) system is part of the sanitation process for the pools. The Natatorium has two UVs that have reached their lifecycle and will be replaced during this time. Additionally, staff will replace tiles and grates in needed areas to bring the pools back to pristine condition. During this time, Denton ISD students will have the option of swimming at the Civic Center Pool for their normally scheduled practices. Staff contact: Monica Martin, Parks and Recreation Q. Dog Days of Denton — On September 11 from 9 a.m.-3 p.m. in Quakertown Park (between the Senior Center and Civic Center Pool), Denton Parks Foundation (DPF) will host the Dog Days of Denton. This is the first year DPF will host the event, and DPF will combine it with the Splish Splash Doggie Bash from 2019.All money raised will go to bettering the Denton dog parks. The Dog Days of Denton committee is hard at work to make the event a reality. Together they've raised over$15,000 in sponsorship support and vendor fees. The event will be free for pups and people. There will be vendors, events, and contests throughout the day. Some events will be Upward Dog Yoga, Camp Gladiator, "Ask a Trainer," and even a ball pit and lure course for the dogs to enjoy. The contests will include a new Spokesdog and some fun contests like longest legs and best singing. The Mutt Market has over 30 confirmed vendors, and Fido's Food Court will have something delicious for the people. 11 There is a V.I.Paw area for the Civic Center Dog Pool Party(formally Splish Splash Doggie Bash). For access to this off-leash area,tickets are $15 for one human and two dogs. Included with each Human and Pup V.I.Paw pass is a Dog Days t-shirt, a wag bag filled with human and pup treats, one hotdog, and one free beer for the first 250 to sign up (21+). While Dog Days is a free public event, only V.I.Paw pass holders will have access to the Civic Center Pool. This is a family-friendly Denton treasure with something for everyone. For more information, visit the website at www. dentondogdays.com. Staff contact: Brooke Moore, Denton Parks Foundation, via Gary Packan, Parks and Recreation R. North Lakes Dog Park Grand Opening/Fetch Sculpture Dedication/Movie in the Park—On September 10, from 6 to 10 p.m. Denton Parks and Recreation will host the Grand Opening celebration for the North Lakes Dog Park, 808 W. Windsor. The dog park is in North Lakes Park near the Linda McNatt Animal Care &Adoption Center. The event will feature pet vendors, food, and furry fun! Mayor Gerard Hudspeth and pet mayor Elvis will attend to help unveil the park's new sculpture "Fetch." After the dedication ceremony,join us for a Movie in the [Dog] Park, "Best in Show." The dog park was completed in 2020, and the grand opening celebration was postponed due to the pandemic. The event will be held per current local and CDC COVID-19 guidelines. Staff contact: Autumn Natalie, Parks and Recreation S. Downtown Police Recognition — This week, staff received the e-mail below from a property manager to recognize the Police Department's efforts related to the Downtown Area. The department is very appreciative of the relationships that they have formed throughout the City. Staff contact: Frank Dixon, Police Sgt Pohler: I'm a commercial property manager in the downtown area,and I also live on the square.I'm not sure what's changed in the past few months but please KEEP IT UP!There has been a significant decline in homeless-related disturbances at our properties. I was receiving daily complaints from tenants/property owners(often multiple per day)and spending a lot of time and money on cleaning, repairs and added security.We are definitely still experiencing the same types of problems(trespassing,drug use,harassment,urine/feces, fighting,trash,etc)however,they are not happening nearly as often. I also want to compliment the officers that work the downtown area.Sgt.Bryan has been incredibly responsive and goes above and beyond to assist us.Officers Scott,Newton,and Hernandez have been consistently patrolling our problem areas and have maintained excellent communication with me when necessary.Their diligence has been crucial in resolving many issues for our tenants and property owners.They conduct themselves in a courteous and professional manner,and sustain a good rapport with the people downtown,including the homeless population. DPD's responsiveness and dependability downtown has made a huge difference and is very much appreciated. Sincerely, Brandt Bobbitt Property-Manager Scott Bronn Commercial III. Responses to Council Member Requests for Information A. Follow up to Questions for Aug. 17 City Council Meeting — At the August 17 City Council meeting, Council Member Armintor requested information related to 12 PACCAR/Peterbilt's COVID safety protocols. PACCAR provided the following information: "To prioritize the safety of our employees and ensure continuity of our business, PACCAR implemented and enforces key written protocols in all PACCAR locations. These protocols are under constant review, taking into consideration local infection rates, CDC, OSHA, and WHO guidelines, and national and local mandates. In the United States, all locations adhere to the same protocols below, even if state and local regulations do not require some or all of those protocols. The removal or adjustment of any COVID-19 protocol is submitted to the legal department for review. To minimize risk of employee-to-employee spread of COVID-19, the following written protocols are in place: • Entrance screening protocol, employees and visitors are not allowed entry if exposed to COVID-19, have symptoms, and/or pending test results • Mandatory masks for unvaccinated employees and visitors. • Fully vaccinated individuals must show proof of vaccination to Human Resources. • Masks available to all employees, regardless of vaccination status. • Social distancing for those unvaccinated. • COVID-19-related signage throughout facility with respect to social distancing and sanitation. • Occupancy limits based on local regulations • Tracking and tracing in the event of a confirmed COVID-19 related illness. • Testing before or after travel or self-quarantine after travel. To further promote and protect the safety of our employees and community, Peterbilt sponsored multiple vaccination clinics for employees and family members to get vaccinated. " Staff contact: Jessica Rogers, Economic Development B. Budget Work Session Follow-up Information—Please see the attached memo from Cassey Ogden with responses to questions that were raised during the August 17 Budget work session. Staff contact: Cassey Ogden, Finance C. Quakertown Park Electrical Pedestals— On August 16, Council Member Armintor forwarded an inquiry regarding electrical pedestals within Quakertown Park. On June 10, staff sent a Friday Report to City Council regarding replacing electrical pedestals within Quakertown Park. The pedestals have been replaced to improve the safety of the park. The park has 32 USB outlets to charge personal devices and support the electrical needs for planned events. Previous public accessible electrical outlets have been replaced with USB ports due to public safety. Staff contact: Drew Huffman, Parks and Recreation D. Speeding Concerns in the Preserve at Pecan Creek Neighborhood— On August 13, Capital Projects/Engineering staff received a concern from a resident of the Preserve at Pecan Creek neighborhood. The same resident previously wrote a letter to Mayor 13 Hudspeth in February 2021 highlighting their concerns. Below are the specific concerns followed by the staff response: • Can there be City MPH Signs posted of no more than 10 MPH in our subdivision? o The default speed limit in the State of Texas on a public residential street is 30 miles per hour. If the subdivision is private, then the homeowners' association has the option to post a lower speed limit within its jurisdiction. • Can speed bumps be implemented to slow traffic? o Staff can evaluate the neighborhood streets with a traffic study prior to determining if traffic calming measures, such as speed bumps are warranted. Traffic study requests can be submitted through Engage Denton located here: hgps:Hdentontx.citysourced.com/ o If speed bumps/cushions are determined to be the most appropriate traffic calming measure, they would need to be evaluated and discussed with the Fire Department, Police Department, Streets Department, and Solid Waste Department to ensure there is not a negative impact on emergency response vehicles and other heavy machinery used on that specific street. • Can "Children at Play"signage be installed throughout the neighborhood? o The City of Denton does not install "Children at Play" signs, and Manual on Uniform Traffic Control Devices (MUTCD) also removed these signs from their sign list toolkit. The Capital Projects/Engineering Department is required to use the MUTCD standards to determine appropriate signage throughout the City, and all signs must be compliant with the MUTCD code. o A resident or private homeowners' association has the option to post "Children at Play" signs on private property that is outside of easements and/or the City's right-of-way. This type of signage would be considered temporary, and residents are allowed one per property at no more than 32 square feet in effective area, no more than six feet in height, and should not be illuminated. Most residential properties have around eight feet of right-of-way and then an additional eight feet of easement near the road. This means the signage would need to be about 16 feet away from the edge of the road. • Would it be possible to implement a "No Street Parking"policy throughout the neighborhood? o Residential streets are designed to provide parking, allow for emergency access, and prevent traffic from driving too fast in front of homes. Residential streets need to be narrow to discourage people from speeding in front of people's homes, yet they need to be wide enough to allow emergency vehicles to drive past cars that are parked on the street. Residential streets are not intended to be wide enough for traffic to continually flow in both directions at the same time. o It is not legal to park in front of a fire hydrant or too close to a crosswalk. If cars in a neighborhood chronically park in these areas, staff can observe the situation and post a"No Parking" sign if it is warranted. These issues can be reported through Engage Denton for staff observation. 14 o Upon request through outlets such as Engage Denton, staff can assess streets on an individual basis to determine if the width warrants no- parking signs and to potentially pursue a no parking ordinance for a street or stretch of roadway. o For neighborhoods with private streets or gated communities with fire lanes, homeowners' associations and property owners have the option to restrict parking. • Can a leash law be implemented in the neighborhood? o Section 6-8 of the City of Denton's Code of Ordinances requires states that it is unlawful to leave an animal unattended in public and unlawful to allow animals to run at large in the City or to trespass on private property. Section 6-8 of the Code of Ordinances is attached for reference. Staff contact: Chandrakanth Muruganandham, Capital Projects/Engineering E. Scripture Street Crane Concern— On August 13, Mayor Pro Tem Meltzer forwarded a concern from a resident regarding a construction crane over Scripture Street. The Capital Projects/Engineering Department contacted the Development Services Department to inquire if the crane violated current building codes.The Building Safety team responded that crane does not present a safety concern, and there are no codes preventing the crane's current location. Public Works Inspections staff also assessed the crane and determined that does not present a safety concern. Staff contacts: Rebecca Diviney, Engineering/Capital Projects and Emily Loiselle, Development Services F. Striping on Spencer Road— On August 17, Mayor Hudspeth requested staff evaluate the condition of the striping on Spencer Road at the intersection of Loop 288. Staff had previously identified this intersection for restriping and the work was originally scheduled for the week of August 16 but has been postponed due to weather delays. Staff estimates this intersection will be restriped by mid-September, weather permitting. Staff contact: Daniel Kremer, Public Works G. Crescent Construction: On July 28, Council Member Davis inquired about the status of construction on Crescent Street, given its proximity to Denton High School. The 2019 Street Reconstruction Bond includes roadway reconstruction and utility upgrades for three segments of Crescent Street from Fulton Street to Alice Street, Alice Street to Denton Street, and Denton Street to Coit Street. While sequencing for all segments of the 2019 Street Reconstruction Bond is still being refined, staff currently anticipates construction associated with the 2019 Bond Program will not begin on Crescent Street until quarter two of calendar year 2023. Staff will coordinate construction of the project closely with the Denton Independent School District. Staff contact: Seth Garcia, Capital Projects H. Striping and Markings Replacement Program — On July 28, Mayor Hudspeth requested updated information on the Traffic Operations department's striping and marking replacement schedule. Research has shown that roadway striping and marking have a lifespan of 3 to 5 years depending on traffic volumes,paint treatment, and weather conditions.Beginning in 2020,Traffic Operations secured the appropriate equipment and resources to meet the demands of this replacement cycle. 15 Currently, Traffic Operations is replacing over 10% of the roughly 2 million linear feet of striping and reflectors on Denton roadways every year. According to the 2019/2020 fiscal year data, in-house crews replaced approximately 140,000 feet of striping, or 7% of the total network, while the City's striping contractor replaced another 65,000 feet of striping, or 3.25% of the total network. Additionally, the striping replaced by Capital Improvement reconstructions for the 2019/2020 fiscal year totaled 296,557 linear feet, or another 14% of the total network. This totaled a 24.25% replacement of the total striping network city-wide. Staff is anticipating similar results for 2020/2021 fiscal year. Based on recent operational practices, staff is confident in our capability to replace 20-25% of the striping and marking annually and maintain a 5-year replacement cycle. Staff contact: Daniel Kremer, Public Works I. Drainage Concerns in Scripture Street—On July 27,a resident who has been in contact with Council Member Davis and other City staff about draining concerns on Scripture Street, sent a video depicting roadway flooding in front of several homes on Scripture St during a recent rain event. The drainage infrastructure in this area was designed to handle a 10-year storm event, and based on site visits by staff, the infrastructure appears to be working according to the design. That being said, Staff recognizes that improvements to allow for greater stormwater runoff capacity should be relatively low cost and benefit property owners and motorists in the area.As a result, staff is working on a design to increase the intake capacity of the inlets with minimal disturbance to the recently reconstructed roadway. Staff will provide an update in a future Friday Report when design is complete, and a construction timeline is determined. Staff contact: Daniel Kremer, Public Works J. Credit-Based Deposits — At the July 20 City Council meeting, Council Member Armintor requested information on how credit-based deposits can be made "less onerous". Deposits for City of Denton utility accounts are required for certain utility accounts under Section 26.3-5 of the Code of Ordinances. Under City code, the "utilities customer service department will determine the appropriate service deposit requirement based on the customer's credit rating with the city utility system or by a reliable external credit source available to the city."A deposit is generally not required if. 1. The customer has an acceptable credit rating for twelve (12) consecutive months within the last two (2) years with the city utility system; 2. The customer receives an acceptable credit rating from a credit source available to the city; or 3. The customer provides a letter of good credit from a former utility company or provides a cosigner with acceptable credit who accepts responsibility for the account. Depending on credit rating, as defined by city ordinance, customers will either pay no deposit, a deposit worth the average monthly charge of the previous 12 months billing for that location, or twice the average monthly charge for the previous 12 months at that location. Over the past year, only 21.6% of new customers had aM deposit assessed. Deposits are refunded, with interest, when the account is closed or the customer has kept their account in good standing for 12 consecutive months of service (residential only). 16 When customers set up new service, City of Denton customer service representatives fully explain the deposit requirements and process. There is opportunity to include additional deposit-related information on the City's website,prior to customers setting up their service, and staff will make this additional information available shortly after the implementation of the new City of Denton website is launched. City ordinance is very prescriptive on how the City conducts utility deposits. Changes to the deposit process would likely require modification of the ordinance and a significant amount of staff resources. As a result, staff would seek Council direction to modify the ordinance and/or holding a work session discussion regarding modifying the ordinance. Staff contact: Ryan Adams, Customer Service and Public Affairs K. Standing Water Near Service Center - On July 20, Mayor Hudspeth forwarded a resident's concerns about standing water in an empty lot off Ruddell Street, behind the City's Service Center. Staff investigated the concern and found the standing water is resulting from discharge from a nearby subdivision that was recently developed. Staff is working on a long-term solution to mitigate the increased discharge, which will be incorporated in the drainage improvements of the Mingo/Ruddell Project. This project is currently being designed. In the interim, crews have placed mosquito briquets in the area to control the mosquito population. Staff contact: Daniel Kremer, Public Works L. Pothole on Locust Street at University - On July 7, Council Member Beck forwarded a resident's concerns about a pothole on the Locust Street near the intersection of University. Staff investigated the issues and determined the main issue was a base failure. Staff reached out to TxDOT, who owns and maintains Locust St., to inform them of the issue. Staff was notified on Friday. August 13 by TxDOT that the repairs have been completed. Staff contact: Daniel Kremer, Public Works 17 IV. Upcoming Community Events and Meetings A. None V. Attachments A. SEDNA Community Meeting Letter..........................................................................19 B. Transparency Stars Certificate ...................................................................................20 C. Budget Follow Up Memo...........................................................................................21 D. Sec. 6.8 Restraining Animals and Tethering Animals ...............................................24 VI. Informal Staff Reports A. 2021-061 Hotel Occupancy Tax Revenue Fund and City Sponsorship Program......25 B. 2021-062 DEC June 2021 Dashboard........................................................................27 C. 2021-063 Utility S&P Fitch Ratings ..........................................................................29 D. 2021-064 Sustainability Framework Advisory Committee........................................51 Council Information A. Council Requests for Information .............................................................................54 B. Council Calendar .......................................................................................................56 C. Future Work Session Items .......................................................................................59 D. Street Construction Report ........................................................................................61 18 3JM Asset Holdings, LLC 1517 Centre Place Dr., Suite 300 - Denton,TX 76205 Aug. 16, 2021 RE: NOTICE OF NEIGHBORHOOD MEETING Dear Neighbor, Next week, on August 23, 2021, the SEDNA will be holding a neighborhood meeting at the MLK Center at 6pm. As part of that meeting, we will be presenting some information we have regarding the development of a currently vacant lot located at 418 Robertson Street. We are excited to show you an example of what we have in mind for this lot and why we have submitted a request for rezoning as part of this. We would love to have you attend to share any comments you have, and for us to answer any questions that might arise. We look forward to seeing you there! Kind regards, Mike Stolle SEDNA Community Meeting August 23, 2021 @ 6pm MILK Center 1300 Wilson Street Denton,TX 76205 19 TransparencyStars The Texas Comptroller of Public Accounts awards the City of Denton the Public Pensions Star for exemplary efforts in creating financial transparency around public pension plans. The Transparency Stars program recognizes local governments across Texas that are striving to meet a high standard for financial transparency online.These efforts provide citizens with clear,consistent information about public spending in user-friendly formats. 'Parencys��� A4blic Pens\O August 1, 2021 20 ci&FOMM DENTON 215 E. McKinney St., Denton, TX 76201 • (940) 349-8307 MEMORANDUM DATE: August 20, 2021 TO: Honorable Mayor and Members of the City Council FROM: Cassandra Ogden - Director of Finance SUBJECT: City Council Budget Presentation Questions and Responses A budget presentation was given to City Council on August 17, 2021. Below is a summary of questions and requests from the City Council as I understand them. 1. Is it possible to see the public feedback submitted in Balancing Act regarding adjusting the property tax rate? As of August 19, Finance received 151 submissions from the Balancing Act portal. The breakdown of those responses is below: • 105 requested no change the property tax rate • 19 requested to decrease the property tax rate by %2 of 1 cent • 7 requested to decrease the property tax rate by 1 cent • 15 requested to increase the property tax rate by 1/2 of 1 cent • 5 requested to increase the property tax rate by 1 cent Staff Contact: Cassey Ogden and Jennifer Tips, Finance 2. Why is the Franchise Fee for Oncor 4% and others are 5%? What would the budget impact be if the fee was raised to 5%? In December of 2012 the Denton City Council approved a franchise agreement with Oncor Electric (Ordinance 2012-359)with a term ending September 30, 2022. The ordinance assigns a 4% fee of the gross revenues of discretionary service charges and a base factor of.003002 multiplied times each kilo watt hour delivered to City of Denton customers. An increase of this franchise agreement from 4%to 5%would generate additional revenues of approximately $15,000 annually. Staff Contact: Cassey Ogden and Dan Galizia, Finance 3. Additional information was requested about the live translation services supplemental. How much would it cost to expand the contract with the existing provider and what would it look like to provide live, in-person service before each meeting? Would Council need to make a request prior to each meeting or would a OUR CORE VALUES Integrity • Fiscal Responsibility • Inclusion • Transparency • Outstanding Customer Service 21 translator always be available? Explain the data and the usage.What is the need and how often is it being utilized? Included within the proposed funding of$74,400 are two interpreters who would provide Spanish language interpretation for all City Council meetings. This is accomplished via interpretation through a second Spanish language stream that can be accessed on our website for remote viewers and through a handheld audio receiver for any persons who attend in person(and make such request). Two interpreters are required so that they may alternate as needed through the duration of the meeting. Additionally, should a Spanish speaking attendee wish to address the Council on an agenda item, one interpreter will facilitate the discussion between the Council and speaker. Once our processes are finalized, staff will include appropriate language on our website, on our agenda, and in the Council Chamber to note that Spanish language interpretation is available.Note: staff determined it was not feasible to have interpretation services available by request, given the short time frame between the posting of an agenda and the amount of notice required to secure an interpreter. The City has budgeted for this service for 50 Council meetings per year at an estimated 8 hours per meeting. It is important to note that this is an estimate. The ultimate cost will largely be determined by the number of meetings and their duration. Since this intensive utilization of interpreters was not included in our contract with our interpretation service, we expect that the contract will likely need to be extended to increase the allowable spending amount under the contract by roughly the amount included in the supplemental budget item. Staff will monitor the contract utilization and update the Council on any changes needing their approval. There is not currently data that would indicate to what degree this service would be utilized. Once implemented, staff can report on the average number of views on its Spanish language stream and requests for in-person interpretation over time to give a general indication of usage. Like our current English language stream, we are not able to record unique views or the duration of a view. Staff Contact: Ryan Adams, Public Affairs 4. Information was requested on cost and use of a blocker truck for the Fire Department. The Fire Department is currently researching the feasibility of converting a retired fire truck into a "blocking" unit that could be used to protect Denton Public Safety employees on the area highways. The blocking strategy is to repurpose an aging fire truck with traffic management devices and to position the vehicle between the oncoming traffic and the first responders working incidents on roadways. Numerous design options are available in which range in pricing from approximately $20,000-$65,000. Initial challenges will be determining how this unit could be staffed when requested by either Fire or Police for employee protection. Staff Contact: Kenneth Hedges, Fire Department 2 22 The budget work session on August 24, 2021 has been removed from the City Council agenda. A budget work session will be held on September 14, 2021 to receive Council feedback regarding the tax rate and supplemental options before budget adoption on September 21, 2021. 3 23 Sec. 6-8. Restraining animals and tethering animals. (a) It shall be unlawful to stake or restrain any domestic animal outside on a leash,tether,chain or similar apparatus unless a person who is in control,custody,or caring for the animal remains with the animal throughout the period of restraint.This prohibition shall apply to public and private property. (b) It shall be unlawful for any person who is in control,custody,or caring for any animal to permit the animal to run at large in the city or to trespass upon the premises of any other person. (c) It shall be unlawful for any person who is in control,custody,or caring for any animal to leave the animal unattended in a public place. (d) It shall be unlawful for any person who is in control,custody,or caring for any animal to leave the animal restrained by a leash,attended or unattended, in any manner that allows the animal to enter the private property of another without the effective consent of the owner. (e) Subsections(a)through (d)do not apply to police canines. (f) It shall be unlawful to attach a collar or harness to a domestic animal that chokes, pinches or harms the animal. (g) It shall be unlawful for any animal to be attached to a chain or tether that weighs ten percent or more of the animal's body weight. (h) It shall be unlawful to tether any animal in the open bed of a pickup style vehicle that is open to the elements, unless the vehicle is a livestock trailer designed for the purpose of transporting livestock. (Ord. No.2000-460, § 1, 12-19-00;Ord. No. 2006-330, §3, 12-12-06;Ord. No. 2020-2235, § 1, 11-10-20;Ord. No. 2021-010, §2(Exh.A), 1-5-21) Created: 2021-07-07 13:33:42 [EST] (Supp.No.32,Update 2) Page 1 of 1 24 Date: August 20,2020 Report No. 2021-061 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Hotel Occupancy Tax (HOT) Revenue Fund and City Sponsorship Program EXECUTIVE SUMMARY: The administration of the Hotel Occupancy Tax (HOT)revenue and City Sponsorship Program will transition from Treasury to the Grants Management Office (GMO) in FY 2021-2022. The HOT Fund program uses hotel receipts to actively promote Denton as a tourist destination. The City provides funds through the Sponsorship Program to support non-profit and civic-minded programs and organizations which further a charitable cause, economic or community growth or serve a public interest. Similar to grants, local organizations can apply annually to the City for a funding under both programs. Applicants must meet eligibility requirements and follow the approved guidelines of the program to receive funding. Historically, Treasury has administered the programmatic activities of the HOT Fund and Sponsorship Program. With the formation of the GMO in 2020, grant activities are now being centralized and standardized across all City departments. The Office was recently moved under the Finance Department which has allowed multiple sections of Finance to work seamlessly in management and compliance monitoring of grants. In a continued effort to centralize grant related activities, GMO staff will work closely with Treasury to move these programs under the purview of the GMO. DISCUSSION: The City of Denton's Hotel Occupancy Tax(HOT) Program uses hotel receipts to actively promote Denton as a tourist destination. Local organizations apply to the City for a portion of the hotel receipts to use in promoting their event or location to tourists outside of Denton. The City Sponsorship Program funds are used to support non-profit and civic-minded programs and organizations, which further a charitable cause, economic or community growth or serve a public interest. The use of sponsorship funds will be in the best interest of the general welfare of the City of Denton and ensure the City receives a return benefit. Like grants, local organizations can apply annually to the City for funding under both programs. Applicants must meet eligibility requirements and follow the approved guidelines of the program to receive funding. Historically, Treasury has administered the programmatic activities of the HOT Fund and Sponsorship Program and serves as the liaison to the Community Partnership Committee, a sub- committee of the City Council assigned to monitoring the allocation and use of both funds. Treasury opens the application period, accepts applications, and reviews them for completeness. The Community Partnership Committee reviews the applications and makes a recommendation on funding awards. Treasury notifies applicants of awards, initiates award contracts, and prepares the required documentation for City Council approval. The program is included in the City's budget process and funds are allocated to the program recipients during the following 25 Date: August 20,2020 Report No. 2021-061 calendar year. During the term of the program, Treasury monitors the awardee's activities through review of spending documentation and quarterly reports. The formation of the Grants Management Office (GMO) in 2020 included goals to centralize and standardize grant activities across all City departments. Staff is comprised of a Grant Administrator and a Grant Analyst. The GMO was recently moved under the Finance Department and staff offices with the Finance Team. This has allowed multiple sections of Finance to streamline the management and compliance monitoring of grants. In a continued effort to centralize grant related activities, GMO staff will work closely with Treasury to transition the HOT Fund and Sponsorship Program to the GMO in FY 2021-2022. The GMO staff is shadowing Treasury through the current application process. Under the new structure, program administration and record retention of awards will remain under the Finance Department for program continuity. During this transition period, the GMO will solicit feedback from Treasury, the Community Partnership Committee, and eligible applicants on the programs and evaluate opportunities for enhancements. STAFF CONTACT: Laura Behrens Grant Administrator Laura.Behrens@cityofdenton.com 26 Date: August 20,2021 Report No. 2021-062 INFORMAL STAFF REPORT TO JUNEOR AND CITY COUNCIL SUBJECT: FY 2020-21 Denton Energy Center(DEC) YTD June 2021 Dashboard BACKGROUND: Attached is the June FY 2020-21 Dashboard for the Denton Energy Center. The dashboard is intended to give a snapshot of relevant DEC metrics. The dashboards highlight the following: • The Emission Charts (based on calendar year) display the June engine runtime hours, starts, stops, monthly and annual emissions totals and limits. • DEC MWh Generation and Gross Revenue for FY 2020-21 through June 2021. o The DEC ran 35,647 MWh more through June of FY 2020-21 compared to FY 2019-20. This resulted in approximately $123.1 million more in DEC Revenue. • A DEC financial summary showing June FY 2019-20 Actuals, FY 2020-21 Budget, Actuals as of June 2021 and the FY2020-21 end of year projections. o As a result of Winter Storm Uri, the FY 2020-21 year-end projections have been updated to show a $28.8 million increase in DEC fuel cost. • The Plant Monthly Run Hour Comparison Graph illustrates the monthly plant run times. • The Key Trends section explains variances in revenues and expenses. o Due to running more hours through June, the fuel cost was $23.7 million higher. o The net income for the DEC through June equals $88.3 million, which is a direct result of Winter Storm Uri in February and higher run times than forecasted during the months of October 2020, April 2021 and June 2021. o The DEC Gross Margin through June was $104.8 million which is $103.4 million higher than budgeted also mainly due to Winter Storm Uri. (The Gross Margin= DEC Revenue—Fuel cost—Variable Operating &Maintenance cost.) Gross Margin represents the component of revenue available to pay fixed cost including debt. ATTACHMENT(S): Denton Energy Center(DEC) Dashboard STAFF CONTACTS: Cassey Ogden Director of Finance (940) 349-7195 cassandra.ogdenkcityofdenton.com Nick Vincent Assistant Director of Finance (940) 349-8063 nicholas.vincent&cityofdenton.com 27 City of Denton, Texas FY 2020-21 Denton Energy Center DENTON YTD JUNE 2021 Dashboard Emissions June 2021 Volatile Particulate Particulate Carbon Engine Nitrogen Carbon Organic Matter<10 Matter<2.5 Sulphur Dioxide Runtime Hot Warm Cold Oxides Monoxide Compound microns microns Dioxide Ammonia Equivalents Description (hours)* Starts Starts Starts Stops Description (NOx) (CO) (VOC) (PMlo) (PMZ.$) (S02) (NHA (CO2e) DEC Monthly Emissions Total(tons) 1.51 1.44 1.27 1.09 1.09 0.02 0.26 10,237.00 Engines(1-12) 1, DEC Annual Permit Limit Operations(tons)** 29.78 93.52 48.16 69.72 69.72 1.45 60.90 Monthly Plant Emissions per DEC Permit Limit 5.06% 1.54% 2.63% 1.57% 1.57% 1.33% 0.43% Annual to Date Plant Emissions per DEC Permit Limit 31.20% 9.90% 15.40% 8.20% 8.20% 7.20% 2.00% *Over the past 12 months,the DEC engines ran 17%of the time. During the month of June,the DEC engines ran 21%of the time. **Operations Annual Limit accounts for Balance of Plant standard emissions Generation&Gross Revenues Revenue Plant Monthly Run Hour Comparison Month MWh $/MWh soot Oct-20 $2,739,241 31,581 $86.74 2,558 2.477 Nov-20 $1,037,719 14,117 $73.51 2.50C 2,257 Dec-20 $457,097 7,225 $63.27 1,969 '^ 2•�� 1,794 Jan-21 $565,793 8,622 $65.62 C 1,6z7 Feb-21 $118,076,297 32,026 $3,686.89 = 1.500 - 1,214 Mar-21 $545,993 5,143 $106.17 CC 980 1•� 938 it Apr-21 $3,441,543 18,842 $182.66 1.000 670 647 May-21 $921,026 8,653 $106.44 500 Jun-21 $2,904,459 120 $24,203.82 Total FY 2020-21 $130,689,166 126,328 $1,034.52 _ FY 2019-20 FY 2020-21 FY 2020-21 FY 2020-21P ACTUALS* BUDGET YTD PROJECTION DEC REVENUE $ 7.57 $ 24.55 $ 130.69 $ 137.16 Operating Month EXPENDITURE SUMMARY Energy Expense-Fuel $ 2.05 $ 10.35 $ 25.75 $ 39.16 Personnel Services 1.47 1.79 1.38 1.79 Key Trends Materials&Supplies 0.26 1.72 0.12 1.72 Maintenance&Repair 0.13 0.56 0.33 0.56 For the first 9 months of FY 2020-21,the DEC produced 35,647 MWh more than the same period of Insurance 0.51 1.11 1.19 1.11 FY 2019-20. This resulted in approximately$123.1 million more in revenues and$24.8 million more in Operations 0.16 0.33 0.52 0.66 total expenses than the same time in the previous fiscal year. These increases are a result of the Debt Service-Principal 5.59 7.85 5.88 7.85 Debt Service-Interest 7.37 9.43 7.09 9.43 Winter storm Uri event in mid-February 2021. Interfund Transfers 0.06 0.24 0.18 0.24 Transfer to Capital Projects - 0.02 - 0.02 The DEC Gross Margin as of June 30 was$104.8 million which is 103.4 million higher than budgeted. DEC EXPENDITURES $ 27.60 $ 33.40 $ 42.44 $ 62.54 (Gross Margin=DEC Revenue-Fuel Cost-Variable Operating&Maintenance Cost). DEC NET INCOME $ (10.03) $ (8.85) $ 88.25 $ 74.62 As a result of the February storm,the DEC projected expenditures have been increased by$29.1 *Represents same period(9 months)as FY 2020-21 YTD for comparison purposes.Total Net million28Fuel expenses account for$28.8 million of this increase. Income for FY 2019-20 was($11.98 million). Note: All dollar figures presented in millions. Date: August 20,2021 Report No. 2021-063 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: S&P Global and Fitch Ratings for the upcoming Utility System revenue refunding bond sale. BACKGROUND: The purpose of this report is to provide City Council notice of recent bond credit ratings from Fitch Ratings (Fitch) and Standard& Poor's (S&P) for the upcoming Utility System revenue refunding bond sale. During July and August, staff and the City's financial advisor, Hilltop Securities Inc., participated in conference calls with analysts from Fitch and S&P to discuss the City's financials and upcoming Utility System bond sale. As a result of these conference calls, and a review of the Utility System's financial information, S&P assigned a rating of`A+' and Fitch assigned a rating of W. For your review, staff has attached the rating reports and a ratings definition chart for each rating agency. DISCUSSION: S&P affirmed its 'A-F short-term rating on the Utility System commercial paper notes and'A+' long- term rating on the Utility System outstanding debt. At the same time, S&P assigned its 'A+' long-term rating to the City's upcoming $141.3 million 2021 Utility System revenue refunding bond sale. Fitch has assigned an 'A'rating to the 2021 Utility System revenue refunding bonds which reflects a downgrade from the prior `A+' rating assigned to the 2017 Utility System revenue bonds. The lower rating is the result of Fitch's expectation that the combined utility's leverage profile will weaken over the near term as a result of extraordinary winter storm costs and an expanded plan for capital improvements. In addition, to ensure parity between the upcoming and outstanding issuances, Fitch downgraded the rating on the 2017 Utility System revenue bonds from `A+' to W. Interest the City pays on the existing Utility System bonds will not be impacted by the rating change. However, the lowered Fitch rating may slightly increase the interest costs on the new 2021 Utility System bonds. Future debt issuances for the Utility System in Certificate of Obligations (COs) will be backed by the City's credit rating. The new ratings continue to classify the Utility System debt as "Investment Grade" and denotes the Utility System's capacity for payment of financial commitments as strong. However, as noted in S&P and Fitch's report, their assigned `Negative Outlook' reflects susceptibility to the potential unknown industry-wide effects of regulatory reforms in the wake of the winter storm. For your review, staff has attached the Credit Opinion report from S&P and Fitch. ATTACHMENTS: S&P Credit Opinion Report 29 Date: August 20,2021 Report No. 2021-063 Fitch Credit Opinion Report Rating Definition Charts STAFF CONTACT: Cassey Ogden, Director of Finance (940)-349-7195 Cassandra.Ogden&cityofdenton.com 30 S&P Global Ratings RatingsDirect° ............................................................................................................. Summary: Denton, Texas; CP; Combined Utility; Retail Electric Primary Credit Analyst: Paul J Dyson,San Francisco+ 1 (415) 371 5079;paul.dyson@spglobal.com Secondary Contact: Doug Snider,Centennial+ 1 (303) 721 4709;doug.snider@spglobal.com Table Of Contents ............................................................................................................. Rating Action Negative Outlook Credit Opinion Related Research WWW.STANDARDANDPOORS.COM/RATING3SDIRECT JULY 22, 2021 1 Summary: Denton, Texas; CP; Combined Utility; Retail Electric CreditProfile US$141.285 mil util sys rev rfdg bnds ser 2021 dtd 08/15/2021 due 12/01/2051 Long Term Rating A+/Negative New Denton comb util Long Term Rating A+/Negative Affirmed,Removed from CreditWatch Denton util sys rev extendable cml pap nts prog ser A due 01/12/2031 Short Term Rating A-1 Affirmed,Removed from CreditWatch Rating Action S&P Global Ratings affirmed its 'A-1'short-term rating and'A+'long-term rating on the City of Denton,Texas'utility system debt outstanding and removed the ratings from CreditWatch,where they had been placed with negative implications on March 3, 2021.At the same time, S&P Global Ratings assigned its 'A+'long-term rating to the city's $141.3 million series 2021 taxable utility system revenue refunding bonds. The outlook is negative. The CreditWatch removal reflects our view of the utility's refined policies and procedures and remediation plans with regard to the procurement,hedging, and management of natural gas for its 225-megawatt(MW) Denton Energy Center(DEC),including possible alternate fuel,second gas pipeline, and gas compressor station, and our view that Denton's exposure to the Electricity Reliability Council of Texas's(ERCOT)market price volatility this summer will likely be manageable because of the utility's dispatchable generation resources, overall expected long resource position, and exceptional system liquidity. The negative outlook reflects our view of Denton's increasing reliance on intermittent resources to meet peak load, with 58%of total resources consisting of nonfirm wind and solar energy, and uncertainty as to timing of completion and ultimate success of various gas supply initiatives or winterization projects for the DEC that Denton is considering or undertaking.We will monitor Denton's resiliency projects for the DEC and ERCOT market reforms to assess the utility's vulnerabilities given such a dependence on renewable resources,which, despite its environmental aims, could have negative credit implications. The negative outlook also reflects our view of the continued uncertainty associated with many factors facing utilities throughout the state,including an uncertain regulatory environment.We believe Denton, as with many other Texas utilities, could continue to face challenges associated with the market's relative price volatility,heightened gas and power reliability risks, extreme temperature and demand fluctuations, and weaker grid interconnectivity as compared with grids in other states.We could lower our long-term rating if our view of the utility's operations deteriorates or WWW.STANDARDANDPOORS.COM/RATINGSDIRECT 32 JULY 22, 2021 2 Summary: Denton, Texas; CP; Combined Utility;Retail Electric Denton is unable to manage the risks associated with its participation in the ERCOT market. The bonds are being issued to refund$140 million in commercial paper(CP) outstanding that was issued to fund costs associated with the February winter storm(unofficially known as Uri). A first lien on net revenue of Denton's combined electric,water, and wastewater systems secures the proposed bonds and parity debt outstanding,with approximately$207 million in long-term debt outstanding as of fiscal year-end 2020. In addition,more than$450 million of general obligation bonds and other tax-secured debt was issued on behalf of the utility and is self-supported by limited surplus net revenue that is subordinate to the ECP;by practice,the combined utility fully self-supports the entirety of its allocable tax-backed debt. In fiscal 2020,the electric system alone accounted for the vast majority of net revenue available for debt service,making it the focus of our analysis. The short-term or CP rating is linked to the long-term rating based on the application of our"Methodology For Linking Long-Term And Short-Term Ratings,"published April 7, 2017, on RatingsDirect. Credit overview During the week of Feb. 14,purchased power and natural gas prices skyrocketed, as extreme winter weather plagued the entire State of Texas. The cost to Denton is now estimated at approximately$141 million,largely because the DEC lost access to natural gas,leading to pipeline freeze-ups and an inability to operate for two days, and thus the electric system lost its natural hedge to high power prices that reached$9,000 per MW-hour for several days. In addition, demand was 30%above forecast peak load,which exacerbated the situation. Denton funded the costs through the issuance of CP. A couple weeks after the storm,the city disputed additional payments potentially due to ERCOT,and filed for and was granted a temporary restraining order seeking full relief from ERCOT's"uplift"mechanism,where if one or more ERCOT market participants fails to pay ERCOT for power purchases,those costs are spread to other ERCOT participants pro rata so that ERCOT can reimburse electricity suppliers.A local court has since dismissed Denton's case claiming that the Public Utility Commission of Texas has jurisdiction over the claim. As of June 22, Denton's electric system, Denton Municipal Electric,has been assessed$9.4 million in potential uplift or short pays attributed to defaulting market participants;management believes its short pay could be reduced or eliminated if certain market participants are able to take advantage of securitization legislation passed in June 2021. Including short pays,the total cost of the storm is approximately$150 million. Environmental, social, and governance (ESG) factors February's severe winter event has brought into sharper focus a spectrum of ESG-related risks that may inform our credit analyses and ratings over the longer term. In our view,the specter of climate change may weigh more heavily as a credit risk factor for Texas utilities. In particular,we expect to consider the adequacy of management's counterbalancing measures to plan for,mitigate, or adapt to risks associated with extreme weather conditions that have the potential to disrupt power generation and transmission, as well as gas supply.Among these considerations are exposures under hedging arrangements,plans relating to power plant weatherization and gas line redundancy, and capital and liquidity sufficiency. The combined utility has taken steps in recent years to reduce its carbon footprint and meet potential greenhouse gas WWW.STANDARDANDPOORS.COM/RATINGSDIRECT 33 JULY 22, 2021 3 Summary: Denton, Texas; CP; Combined Utility;Retail Electric emission regulations, given that its power supply centers on renewables and natural-gas-fired peaking generation and has shifted away from coal. In February 2018,the city council adopted the Denton Renewable Resource Plan,which set a goal to have under contract 100%of the city's annual electricity from renewables by 2020.Assuming its intermittent assets perform,management reports that close to 100%of energy consumed each year will be renewable energy. We believe Denton's exposure to social factors could present elevated risk given below-average income indicators and above-average weighted average revenue per kilowatt-hour as a percentage of the state average for which Denton has used or will use reserves to manage affordability. In addition, almost half of its potential service territory, currently undeveloped, can be served by two other transmission/distribution utilities,with one offering retail choice.The city has not opted into customer choice so existing customers cannot switch. Overall,we have not seen competition manifest as a material credit risk to Denton. In our view,governance risk is heightened given that the environment in which Denton operates increasingly requires stronger liquidity,proactive planning,hedging, and financial flexibility,which come at a cost,versus utilities in other regions where these risks are lower. Negative Outlook Downside scenario We could lower the rating is Denton is unable to address its gas supply vulnerabilities and power plant reliability, or if the utility's dependence on renewable resources leads to materially worse financial metrics in stressed conditions.We could also lower the rating if actual peak summer or winter demand materially exceed projections and result in much higher costs and lower unrestricted cash and fixed-charge coverage(FCC). Return to stable scenario We could revise the outlook to stable if Denton's winterization and gas resiliency projects are successfully completed and,in our view,put the utility in a more stable position as relates to exposure to gas supply disruptions, extreme temperatures, and potentially volatile or high ERCOT market prices.We could also revise the outlook to stable if Denton is able to generate FCC materially above forecast and we come to believe such performance is sustainable. Credit Opinion The rating reflects our view of Denton's strong enterprise risk profile,with a diverse and primarily residential customer base,below-average income indicators, above-average electric rates, and mostly renewable power portfolio, although Denton's moderate reliance on intermittent power to meet peak load and challenges related to gas supply resiliency partly offset this. Our assessment of Denton's strong financial risk profile reflects our forward-looking view of lower FCC as result of increasing debt service requirements,very strong liquidity position(nearly 11 months'unrestricted cash), and manageable debt burden.We have applied a one-notch positive adjustment from the initial indicative rating to arrive at the final rating based on peer comparisons,including the utility's exceptional liquidity we consider to be supportive of the 'A+'rating, despite moderate operating risks. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT 34 JULY 22, 2021 4 Summary: Denton, Texas; CP; Combined Utility;Retail Electric Denton's combined utility provides electric,water,wastewater, drainage, and solid waste services to the city. Median household effective buying income is 93%of the national average and weighted average electric system rates are 17% above the state average. These factors limit Denton's financial flexibility, although we understand that no rate increases are planned pending a cost-of-service study,none have been made for five years for the electric system, and water rates were reduced slightly in 2020.Water and wastewater operations are stable with ample system capacity,in our view. Denton's power supply includes its 225 MW gas-fired DEC, 30 MW of firmed wind power, and 150 MW of additional wind power. In addition to this, Denton has three purchased power agreements for 205 MW of solar for a total resource position of 610 MW versus peak summer load forecast at 375 MW.An additional 75 MW of solar through a purchased power agreement comes on line in 2022. Given that firm resources only cover about two-thirds of Denton's projected peak summer demand,we believe the electric system could face high market prices during extreme weather events and/or in cases where intermittent resources do not perform as expected. As a result of the February winter storm, Denton has revisited its policies,procedures,risk management practices, natural gas infrastructure condition, and power supply, and is undertaking or considering various projects to become more resilient. For 24 hours during the winter storm,natural gas was not flowing to the plant, and,when it began flowing again,the plant took another 24 hours or so to get almost fully back on line. To manage this risk,management is considering changes to the DEC so it can burn other types of fuel such as hydrogen or liquified natural gas, and local gas storage. It is also looking to add pipeline redundancy and to increase pressure on the gas lines to be better able to deliver gas to the DEC during times of significant demand.A new procedure has also been set up to ensure that sufficient staff are on hand to quickly drain fluid from the pipelines in case of a loss of pressure to avoid freeze-ups. Management also reports that it will hedge gas prices and volumes further in advance,and,if prices are rising,that it will hedge a greater quantity earlier. By revised policy, 100%of its forecast winter(December,January,and February) gas needs will be secured by Nov. 15. Nonetheless,an interruptible fuel supply and lack of certainty of supply temper the benefits of hedging. Management also plans to manage power supply and hedge positions six to 10 days and up to one month ahead of predicted extreme temperatures,rather than one to five days in advance. Under its financial modeling scenarios, Denton has determined that there is only a 10%chance peak demand will exceed its forecast;this has not happened in the summer historically. Management is also considering additional power supply contracts for renewables that are backed by firm power(which helped generate revenue from ERCOT during the winter storm), although those arrangements are substantially more costly than nonfirmed renewables. According to management's financial forecast,higher debt service requirements associated with the proposed CP refunding and additional debt issuances to fund 99%of its $213 million capital improvement plan will likely put pressure on Denton's FCC.We calculate that FCC will range from 1.1x to 1.3x over the next five years, down from about 1.4x on average in fiscal years 2018-2020, although,in our view,the financial forecast is conservative. System liquidity is robust with about$174 million in cash, or 334 days'operating expenses, as of fiscal 2020,with current liquidity balances virtually unchanged from those figures.We view such liquidity as a significant credit positive given the various operating risks facing Denton in the ERCOT market and given exposure to extreme temperature fluctuations and volatile market prices for power in the event that generation does not perform as expected(and in the WWW.STANDARDANDPOORS.COM/RATINGSDIRECT 35 JULY 22, 2021 5 Summary:Denton, Texas; CP; Combined Utility;Retail Electric event of another gas supply interruption). In our view, Denton's debt to capitalization is manageable at about 48%. Related Research Through The ESG Lens 2.0:A Deeper Dive Into U.S. Public Finance Credit Factors,April 28, 2020 Certain terms used in this report,particularly certain adjectives used to express our view on rating relevant factors,have specific meanings ascribed to them in our criteria,and should therefore be read in conjunction with such criteria.Please see Ratings Criteria at www.standardandpoors.com for further information.Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com.All ratings affected by this rating action can be found on S&P Global Ratings'public website at www.standardandpoors.com.Use the Ratings search box located in the left column. WWW.STANDARDANDPOORS.COM/RATINGSDIRECT 36 JULY 22,2021 6 Copyright©2021 by Standard&Poor's Financial Services LLC.All rights reserved. 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WWW.STANDARDANDPOORS.COM/RATINGSDIRECT 37 JULY 22,2021 7 8/16/2021 Fitch Rates Denton,TX's Utility System Rev Bonds'A';Outlook Negative FitchRatings RATING ACTION COMMENTARY Fitch Rates Denton, TX's Utility System Rev Bonds 'A; Outlook Negative Mon 16 Aug,2021-5:48 PM ET Fitch Ratings-Austin-16 Aug 2021:Fitch Ratings has assigned an'A rating to the following bonds issued by the city of Denton on behalf of its combined utility system: --$141.3 million utility system revenue refunding bonds,taxable series 2021. Bond proceeds from the series 2021 bonds will be used to refund extendable CP(ECP)amounts used to fund extraordinary storm costs associated with above budget energy and natural gas prices experienced during Winter Storm Uri in February 2021.Proceeds will also be used to fund costs of issuance.The bonds are expected to price on Aug.26,2021 via negotiated sale. In addition,Fitch downgrades the rating on the following parity bonds issued by the city to'A from'A+': ---$199.3 million utility system revenue bonds,series 2017. Fitch assesses Denton's standalone credit profile(SCP)at'a'.The SCP represents the credit profile of the utility on a stand-alone basis, irrespective of its relationship with the related credit quality of the city of Denton(AA+/Stable). The Rating Watch Negative(RWN)is removed from the series 2017 bonds.The Rating Outlook on all of the bonds is Negative. ANALYTICAL CONCLUSION The downgrade to'A from'A+'reflects Fitch's expectation that the combined utility's leverage profile will weaken over the near term as a result of debt financing related to extraordinary winter storm costs,as well as an expanded plan for capex.Weaker operating income is also anticipated as Denton has delayed consideration of electric rate increases and has assumed a transmission rate reduction beginning in 2023.Lower funds available for debt service(FADS)and higher debt issuance in 2022-2026,are expected to push the utility's leverage ratio above 9x over the next five years,a level more commensurate with an'A rating. Fitch's removal of the RWN designation is based on the adequacy of the city's liquidity sources during,and since,the winter storm event. Robust cash reserves and the city's extendible CP programs allowed the utility to meet cash payments due during and immediately following the storm. The Negative Outlook reflects Fitch's view that ongoing state investigations,the implementation and rule-making process associated with state legislative efforts to address the exceptional market risks of the Electric Reliability Council of Texas(ERCOT)exposed by Winter Storm Uri,multiple legal cases,and the lack of resolution of the approximately$3.0 billion shortfall in payments to ERCOT continue to pose risk with unknown credit implications.The overall risk exposure for utilities such as Denton,required to transact all energy sales and purchases through ERCOT,remains pronounced. CREDIT PROFILE The city of Denton,TX(AA+/Stable),is a high growth suburb located approximately 35 miles north of the cities of Dallas and Fort Worth. With a population of about 142,000,Denton is located at the northern end of the Dallas-Fort Worth(DFW)metro area.The local economy features institutions of higher education,a regionally prominent m3e8dical sector,and a strong warehousing and manufacturing https://www.fitch ratings.com/research/us-pu bl ic-finance/fitch-rates-denton-tx-utility-system-rev-bonds-a-outlook-negative-16-08-2021 1/10 8/16/2021 Fitch Rates Denton,TX's Utility System Rev Bonds'A';Outlook Negative base.The city provides retail electric,water,and wastewater services through its municipally owned utilities.The electric system is the largest of the city's combined utilities and accounts for the majority of the revenues(76%in FY20). Denton's electric system serves an approximately 55 square mile,single-certified area within city limits and an additional 53 square mile area that is multiply certified outside of the city's boundaries.The electric system served approximately 56,400 customers in fiscal 2020. Customer growth is strong,averaging 2.4%over the last five years.Denton embarked on a trajectory to increase its renewable energy supplies and over 60%of energy supply was provided by wind and solar resources in fiscal 2020. Fitch considers the combined utility to be a related entity of the City of Denton,given the organization of those operations as enterprise funds of the city and the city's oversight,including budget and rate setting.The rating on the utility revenue bonds is not constrained by the credit quality of the city.However,as a result of being a related entity,the rating could become constrained in the event of a very material decline in the general credit quality of the city. Winter Storm URI Denton's net storm costs are estimated at approximately$141 million,allocable to the electric utility.The cost estimate includes net energy service costs from ERCOT and natural gas suppliers incurred during the week of Feb.14-19,2021.The exponential prices spikes were prompted by unprecedented and prolonged below freezing temperatures across the state and the resulting ERCOT market dislocation,when over 30,000 MW of various fuel-type generation failed to deliver in the extreme conditions. Denton experienced outages at its own generation resources,curtailed gas delivery to the Denton Energy Center and a wind energy contract that failed to deliver,which collectively exposed the utility to market prices that reached and remained at the$9,000 per megawatt hour(MWh)ERCOT market price cap for multiple days during the event.Denton's net storm costs are net of receipts from ERCOT for generation delivered in the hours its gas and wind generation resources were available. While the net amount is estimated at$141 million,initial cash outflows were higher at over$200 million,before Denton began to receive offsetting receipts for generation sold into the ERCOT market.Denton successfully managed the acute liquidity demands of the event by issuing$100 million in ECP during the week of the storm and increasing the authorization of the ECP program to$300 million in the days following the storm.The ECP proceeds,along with Denton's electric cash reserves(equal to 383 days cash on hand at the end of fiscal 2020)were used to satisfy immediate cash needs during the storm.Proceeds of the series 2021 bonds will refinance ECP notes into long- term debt. Denton Litigation with ERCOT Dismissed The city of Denton filed suit against ERCOT in February 2021 to prevent being allocated any of the ERCOT defaults from other parties, arguing that paying for the defaults of other entities would constitute an unconstitutional gifting of public funds.A temporary restraining order was initially granted,preventing ERCOT from allocating any of the uplift costs to the city of Denton in the early weeks following the storm.In June,the court dismissed the case and ERCOT invoiced Denton for approximately$9.4 million for its allocable share of the short payment amount.Denton did not appeal the court decision in light of state legislation passed in the interim designed to ultimately address the full amount of ERCOT shortfall payments through various securitization financings. KEY RATING DRIVERS Revenue Defensibility:'aa' Growing Retail Municipal Utility with Rate Flexibility Revenues are provided by combined retail electric,water and wastewater services to a growing service area in and around the city.The service area is characterized by very strong customer growth averaging 2.4%annually,median household income(MHI)levels in line with the national average and low unemployment.The utility has competitive,highly affordable utility rates,supported by the city's independent rate authority. Operating Risk:'a' Low Cost Burden;Weaker Operating Cost Flexibility 39 https://www.fitchratings.com/research/us-public-finance/fitch-rates-denton-tx-utility-system-rev-bonds-a-outlook-negative-16-08-2021 2/10 8/16/2021 Fitch Rates Denton,TX's Utility System Rev Bonds'A';Outlook Negative Denton's operating cost burden remains low,at 11.5 cents per kWh in fiscal 2020,including franchise fees and return on investment paid to the city of Denton general fund.Fitch considers operating flexibility weak based on Denton's firm capacity concentration in gas and ERCOT's structural market weaknesses exposed by the February 2021 winter weather event. Capital spending continues to escalate with a 19%increase in the$595 million five-year capital improvement plan(CIP;2022-2026)over the 2021-2025 plan,following a 38%increase the year prior.Fitch expects 88%of the five-year Cl P to be debt financed. Financial Profile:'a' Leverage Increasing from Increased Capital and Storm Costs Fitch expects Denton's leverage profile to weaken as storm-related costs are financed over 30 years and planned capital spending requires additional debt.Fitch expects leverage(measured by Fitch as net adjusted debt to adjusted funds available for debt service)to end FY2021 at around 9x(compared to 6.1x at the end of FY2020)and to trend upwards from 9x to 10x over the next five years. Coverage of full obligations was 1.2x in FY2020,and Fitch expects it to remain in this range.No rate increases are planned for the three utilities. Cash reserves and the city's extendable CP program supported Denton's ability to handle the liquidity crisis associated with the winter storm and payments due to ERCOT within days of the event.The city intends to increase its minimum reserves target at the electric utility to 175 days of budgeted expenditures,up from 60 days.The new policy is subject to final approval by City Council. ASYMMETRIC ADDITIONAL RISK CONSIDERATIONS No asymmetric additional risk considerations affected the rating outcome. RATING SENSITIVITIES Factors that could,individually or collectively,lead to positive rating action/upgrade: --Stabilization of the Negative Outlook will depend on actions by the state and market regulators to reduce financial risk to ERCOT market participants and resolution of the approximately$3 billion net short amount that remains unpaid to ERCOT; --Lower than expected capital spending,or increased pay-go funding of the capital program could lower leverage from current anticipated levels. Factors that could,individually or collectively,lead to negative rating action/downgrade: --Legislative or regulatory changes that impose material new capex or operating costs for utilities; --Lower operating margins and cash flow as a result of an increase in operating expenses,including transfer payments to the city of Denton's General Fund; --Weaker liquidity profile or leverage consistently above 10x in Fitch's base or stress case. BEST/WORST CASE RATING SCENARIO International scale credit ratings of Sovereigns,Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions,measured in a positive direction)of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario(defined as the 99th percentile of rating transitions,measured in a negative direction)of three notches over three years.The complete span of best-and worst-case scenario credit ratings for all rating categories ranges from 'AAA to'D'.Best-and worst-case scenario credit ratings are based on historical performance.For more information about the methodology used to determine sector-specific best-and worst-case scenario credit ratings,visit https://www.fitchratings.com/site/re/10111579. SECURITY The bonds are payable from the net revenues of the combined utility system,including the water,wastewater,and electric light and power systems. 40 https://www.fitchratings.com/research/us-public-finance/fitch-rates-denton-tx-utility-system-rev-bonds-a-outlook-negative-16-08-2021 3/10 8/16/2021 Fitch Rates Denton,TX's Utility System Rev Bonds'A';Outlook Negative REVENUE DEFENSIBILITY Denton derives its revenues from the sale of electric(76%),water(17%)and wastewater(7%)services to retail customers.Denton's electric system serves an approximately 55 square mile,single certified area within the city of Denton's city limits and an additional 53 square mile area that is served by multiple suppliers outside of the city's boundaries.The electric system served approximately 56,400 customers in fiscal 2020. The city has not opted-in to retail competition.However,the system does face limited competition based on new customers that move into limited dual and triple certified areas around the perimeter of the city of Denton.Roughly 6%of Denton's electric customers reside in the multi-certificated area. SERVICE AREA CHARACTERISTICS Demand for services is supported by strong customer growth,averaging 2.4%over the past five years.Average electric sales over the same period has been more measured,averaging 0.6%,and reflecting national trends of energy efficiency and declining per capital electric usage.Service area characteristics in the city of Denton include median household income(MHI)that approximates the national average and unemployment that has been well below the national average in recent years(85%in 2020).Unemployment metrics increased in 2020 given the economic challenges of the coronavirus pandemic,but the city's unemployment levels remained below the state and national levels.Higher unemployment levels have begun to trend down in 2021. The utility customer base is well diversified and exhibits no concentration.Residential electric revenue accounts for about 45%of revenue and 40%of sales.Top-10 electric customers provided about 19%of electric revenues in fiscal 2020,the largest of which, University of North Texas,accounted for approximately 4%of electric revenues,down slightly from typical levels due to the closure of the campus in spring 2020 due to the coronavirus. The water system's top-10 customers,including wholesale customers,reflect relatively stable entities,including the University of North Texas,the local school district,and local health centers and hospitals.Top-10 customers of the water and wastewater systems comprise approximately 10%or less of the respective system revenue. RATE FLEXIBILITY Rate flexibility is very strong.Utility rates are determined independently by City Council and are not subject to third-party regulation. Electric distribution rates approximate that of the state and are highly affordable.According to the most recent data available from the US Energy Information Administration in 2019,Denton's average retail electric rate is 110%of the state average but average residential revenue is more competitive at 91%of the state residential average.Total average annual energy costs as measured as a percentage of MHI was 2.2%in 2019,indicating very high affordability. Electric rates include fixed and volumetric charges and adjustable components to recover or return costs that exceed or outperform budgeted levels.The energy cost adjustment factor(ECA)is adjusted on a quarterly basis to stay within a$5 million over/under range on fuel and purchased power costs.Rates also include a transmission cost recovery(TCR)factor,adjusted annually,that recovers the utility's net transmission costs from its electric customers. The city receives approximately 25%of its electric revenues from its owned transmission assets.Transmission revenues are collected from utilities across the ERCOT regional market,as opposed to Denton's retail electric customers,to socialize transmission costs across the state.Denton collects a regulated transmission tariff on its owned transmission assets.Transmission rates are regulated by the Public Utility Commission of Texas(PUCT).The PUCT has required Denton to complete a full transmission cost of service filing by November 2021 to consider the city's transmission tariff. OPERATING RISK Denton's operating cost burden over the past five years(calculated by Fitch as total electric operating costs in relation to energy sales) has been low and relatively stable at around 11 cents per kWh over the last three years,with the exception of fiscal 2019 when expenditures included a large one-time noncash decommissioning expense for the Gibbons Creek coal plant. Renewable Resource Plan Denton embarked on a renewable energy plan in 2015,adopted as the Denton Renewable Resource Plan(DRRP)in 2018,with a goal to secure 100%of its energy demand through renewable purchase power agreements(PPA)by 2020.The DRRP incorporated the closure of 41 https://www.fitchratings.com/research/us-public-finance/fitch-rates-denton-tx-utility-system-rev-bonds-a-outlook-negative-16-08-2021 4/10 8/16/2021 Fitch Rates Denton,TX's Utility System Rev Bonds'A';Outlook Negative Gibbons Creek,a coal-fired power plant owned by the Texas Municipal Power Agency(TMPA)and replaced the loss of this capacity with Denton's construction of the Denton Energy Center(DEC)that entered commercial operation in 2018 and multiple wind and solar PPAs. Denton has entered into a large wind PPA for the 150 MW Santa Rita wind project located in Texas,which began delivery wind energy to the city in 2018.While deliveries fluctuate with wind conditions,the PPA still provided a significant 43%of Denton's energy supply in fiscal 2020.Denton has another older,firm wind PPA for 30 MW from the Wolf Ridge wind project that provided another 17%of energy in fiscal 2020.The Santa Rita contract was unable to deliver during Winter Storm Uri but deliveries continued from the Wolf Ridge site, although wind was conditions were very low during the storm event. Denton Energy Center The other large component of Denton's energy portfolio is the DEC.The DEC is a 225 MW combined cycle natural gas-fired generation plant located in the city of Denton.The DEC is designed to firm the intermittent renewable resources provided by PPAs and to act as a physical price hedge against potential high market prices within ERCOT.The DEC provided 24%of energy supply in fiscal 2020 and the balance was supplied from smaller solar and landfill gas contracts and market energy purchases. Gas deliveries to the DEC were curtailed during Winter Storm Uri,which in turn,resulted in a freezing of certain plant components.The city is exploring options to improve gas supply reliability at the DEC,including the installation of a second delivery pipeline to the plant, installation of a natural gas compressor to support pressure on the existing delivery pipeline,or installation of on-site liquified natural gas storage. General Fund Transfers Fitch's operating cost calculation includes the electric fund transfer to the city's general fund.Each of the three utilities make transfer to the general fund equal to an indirect cost allocation,a 3.5%return on investment(ROI)and a payment in lieu of franchise fees equal to 5% of revenues.While the indirect cost allocation portion of the transfer is considered an operating expense,the other components are subordinate to debt service per the revenue bond ordinance.All three components are included in Fitch's calculation. Following the closure by TMPA of Gibbons Creek and related cost savings that occurred as a result of that closure,City Council increased the return on investment(ROI)from the electric fund to the general fund to 6%from 3.5%in April 2020 through the end of fiscal 2022. The increase was designed to mitigate the potential shortfall of economically sensitive sales tax and potential flattening of property tax values associated with the developing coronavirus pandemic.The increase in the ROI accounts for a$2 million increase in the electric fund's fiscal 2020 transfer and$5 million annually through fiscal 2022.The temporary increase has not been reversed in light of the magnitude of storm costs facing the electric utility. OPERATING COST FLEXIBILITY Fitch views Denton's operating cost flexibility as weak as a result of its natural gas concentration as well as its reliance on the ERCOT market,which exhibited thinning reserve margins even before the 2021 winter storm event.The majority of Denton's capacity,225MW, is provided from natural gas-fired DEC combined cycle plant and represents firm capacity,along with 30MW from Wolf Ridge.Denton also has intermittent capacity-150 MW from the Santa Rita Wind Project and several solar projects.Denton uses financial transactions to cover its peak demand,356MW in fiscal 2020,in excess of its owned/contracted capacity.The energy risk management program is currently a three-year program. In addition,the weak operating flexibility assessment reflects the systematic failure of the ERCOT organized market to consistently supply energy,albeit during an unparalleled series of winter storms and cold weather,which resulted in widespread blackouts across the region.Denton was required by ERCOT to shed 25%of its load during the storm event.The weaknesses of the ERCOT organized market exposed by this event could limit Denton's ability to preserve or manage costs during adverse operating conditions in the future. CAPITAL PLANNING AND MANAGEMENT Fitch considers lifecycle investment needs as moderate,although Denton's increased its CIP reflects larger planned investments in system aging infrastructure,specifically the wastewater system.Denton's five-year Cl P(2022-2026)is projected at$595 million,up from the$501 million 2021-2025 CIP and the$363 million capital plan(2020-2024)considered two years ago. While the capital spending amounts for the electric and water utilities are slightly higher,the bulk of the increase occurred in projected spending for the wastewater utility.Management indicates the increases represent needed investment in aging infrastructure and capital 42 https://www.fitchratings.com/research/us-public-finance/fitch-rates-denton-tx-utility-system-rev-bonds-a-outlook-negative-16-08-2021 5/10 8/16/2021 Fitch Rates Denton,TX's Utility System Rev Bonds'A';Outlook Negative needs should decline after the current five-year CIP.The CIP also does not include potential weatherization or dual fuel options under consideration for the electric utility. Water System The water system provides retail water service to a growing customer base within the city and sells raw and treated water wholesale to the Upper Trinity Regional Water District(UTRWD)for resale to two of its customer cities.Wholesale sales comprise less than 2%of total gallons sold.Raw water supplies and treatment capacity appear sufficient to meet expected water demands.The water system experienced operational impacts from Winter Storm URI but did not experience material over budget costs like the electric utility. The water system's top 10 customers,including wholesale customers reflect relatively stable entities,including the University of North Texas,the local school district,and local health centers and hospitals.Top 10 customers comprise approximately 10%of water revenues. Wastewater System The wastewater system provides retail wastewater collection and treatment service to a growing customer base within the city and to four wholesale customers.Treatment capacity is sufficient.The top ten customers contribute less than 10%to the wastewater system's revenue. FINANCIAL PROFILE Denton's operating performance has exhibited variability,but remained generally strong.The combined utility system's leverage ratio has ranged between 6x and 10x over the five-year period,reflecting variability in operating income and FADS,as well as higher levels of outstanding debt beginning in fiscal 2017 and used to finance the DEC construction.Denton's leverage ratio declined to 6.1x in fiscal 2020 with stronger cash flow resulting from lower expenditures and relatively strong sales,notwithstanding the closures of a few of its largest electric customers during the initial months of the coronavirus pandemic. Leverage is expected to weaken in 2021 with the approximately$141 million in storm-related debt and issuance of$77 million to fund a portion of the combined utility CIP.Fitch anticipates leverage will end FY2021 at around 9.0x,assuming the regulatory deferral treatment of the extraordinary storm costs over 30 years to match the amortization of the related debt. Robust Liquidity Buffers Winter Storm Liquidity Crisis Liquidity is considered neutral to the rating,but Denton's strong reserve levels and available liquidity through the extendable CP program were instrumental in responding to the winter storm event and the acute liquidity crisis that developed within days.Combined utility cash on hand totaled 383 days at the end of fiscal 2020,which cash reserves at the electric fund accounted for approximately$83 million of the$173.6 million in unrestricted cash at the end of fiscal 2020.A portion of the reserves for each of the utilities are held in a designated rate stabilization fund. The winter storm event prompted Denton to increase its minimum targeted reserves levels,subject to final approval by City Council in September.The proposal will increase the electric fund target for working capital and operating reserves of at least 175 days of budgeted expenses,up from 60 days.The new policy will result in electric fund reserves of at least$100 million.The water and wastewater funds each have respective minimum reserve targets of 120 days and 100 days,given the large capital programs underway at those utilities to meet new customer growth requirements. Fitch Analytical Stress Test(FAST)-Base Case and Stress Case Fitch's analysis and Fitch Analytical Stress Test(FAST)are informed by Denton's combined utility financial projections.Denton's sales forecast reflects generally robust growth for all three utilities over the next five years and no base rate increases are assumed for any of the three utilities.The forecast also factors a reduction in transmission revenues given the ongoing transmission rate case.Fitch assumes the cost of power to grow at the same rate as energy.Base case capital requirements and debt issuances are informed by the utility's forecast,which have increased since last year. Fitch's base case scenario indicates that Denton's leverage ratio is expected to increase to between 9x and 10x over the next five years, driven primarily by the increased debt funding to support higher capex,no planned rate increases at any of the three utilities and expectations for lower transmission revenues.To the extent that actual capex and debt issuance occurs below projected levels,as it has in recent years,leverage should remain closer to 9x.Coverage and liquidity lev4e31s remain consistent with historical levels. https://www.fitchratings.com/research/us-public-finance/fitch-rates-denton-tx-utility-system-rev-bonds-a-outlook-negative-16-08-2021 6/10 8/16/2021 Fitch Rates Denton,TX's Utility System Rev Bonds'A';Outlook Negative Fitch's stress case imposes a modest decline in energy demand to the existing base case expectations in the first two years,followed by a three-year recovery.Water,wastewater and transmission revenues are not stressed.The stress case indicates that leverage could be marginally higher in certain years,but should approximate 10x. DEBT PROFILE Denton's debt profile is neutral to the rating.The majority of the city's utility debt is in the form of general obligation(GO)bonds and certificates of obligation(CO)that are issued and secured by a dual pledge of utility system revenues and general government tax receipts but consistently paid from utility system revenues.The combined utility has approximately$530 million in GO and CO debt, including the series 2021 COs issued in May 2021.Fitch's coverage and debt calculations include the GO and CO bonds and the respective debt service paid by the utility systems. Utility system revenue bonds include the series 2017 and series 2021 bonds,outstanding following the current issuance,at approximately$340 million.Similar to the revenue mix,the electric system is responsible for the majority(over 80%)of the total combined debt obligations of the electric,water and wastewater debt.All of the outstanding long-term debt is fixed rate with a final maturity in 2050.The ECP program(not rated by Fitch)is the only variable rate debt in the portfolio. In addition to the sources of information identified in Fitch's applicable criteria specified below,this action was informed by information from Lumesis. REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING The principal sources of information used in the analysis are described in the Applicable Criteria. ESG CONSIDERATIONS Denton(TX)[Electric]has an ESG Relevance Score of A'for Exposure to Environmental Impacts due to the extreme winter weather event in February 2021 and structural aspects of the ERCOT organized market that resulted in extraordinary energy cost increases,which has a negative impact on the credit profile,and is relevant to the ratings in conjunction with other factors. Unless otherwise disclosed in this section,the highest level of ESG credit relevance is a score of'3'.This means ESG issues are credit- neutral or have only a minimal credit impact on the entity,either due to their nature or the way in which they are being managed by the entity.For more information on Fitch's ESG Relevance Scores,visit www.fitchratings.com/esg VIEW ADDITIONAL RATING DETAILS FITCH RATINGS ANALYSTS Kathy Masterson Senior Director Primary Rating Analyst +1 512 215 3730 kathryn.masterson@fitchratings.com Fitch Ratings,Inc. 2600 Via Fortuna,Suite 330 Austin,TX 78746 Rebecca Meyer,CFA,CPA,CISA Director Secondary Rating Analyst +1 512 215 3733 rebecca.meyer@fitchratings.com Dennis Pidherny Managing Director Committee Chairperson +1 212 908 0738 dennis.pidherny@fitchratings.com MEDIA CONTACTS 44 https://www.fitchratings.com/research/us-public-finance/fitch-rates-denton-tx-utility-system-rev-bonds-a-outlook-negative-16-08-2021 7/10 8/16/2021 Fitch Rates Denton,TX's Utility System Rev Bonds'A';Outlook Negative Sandro Scenga New York +1 212 908 0278 sandro.scenga@thefitchgroup.com Additional information is available on www.fitchratings.com PARTICIPATION STATUS The rated entity(and/or its agents)or,in the case of structured finance,one or more of the transaction parties participated in the rating process except that the following issuer(s),if any,did not participate in the rating process,or provide additional information,beyond the issuer's available public disclosure. APPLICABLE CRITERIA Public Sector,Revenue-Supported Entities Rating Criteria(pub.23 Feb 2021)(including rating assumption sensitivity) U.S.Public Power Rating Criteria(pub.09 Apr 2021)(including rating assumption sensitivity) APPLICABLE MODELS Numbers in parentheses accompanying applicable model(s)contain hyperlinks to criteria providing description of model(s). 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ENDORSEMENT POLICY Fitch's international credit ratings produced outside the EU or the UK,as the case may be,are endorsed for use by regulated entities within the EU or the UK,respectively,for regulatory purposes,pursuant to the terms of the EU CRA Regulation or the UK Credit Rating Agencies(Amendment etc.)(EU Exit)Regulations 2019,as the case may be.Fitch's approach to endorsement in the EU and the UK can be found on Fitch's Regulatory Affairs page on Fitch's website.The endorsement status of international credit ratings is provided within the 46 https://www.fitchratings.com/research/us-public-finance/fitch-rates-denton-tx-utility-system-rev-bonds-a-outlook-negative-16-08-2021 9/10 8/16/2021 Fitch Rates Denton,TX's Utility System Rev Bonds'A';Outlook Negative entity summary page for each rated entity and in the transaction detail pages for structured finance transactions on the Fitch website. These disclosures are updated on a daily basis. Utilities and Power US Public Finance North America United States 47 https://www.fitchratings.com/research/us-public-finance/fitch-rates-denton-tx-utility-system-rev-bonds-a-outlook-negative-16-08-2021 10/10 S&P Long-Term Issue Credit Ratings Table 1 Category Definition AAA An obligation rated'AAA'has the highest rating assigned by S&P Global Ratings.The obligors capacity to meet its financial commitments on the obligation is extremely strong. AA An obligation rated 'AA'differs from the highest-rated obligations only to a small degree.The obligor's capacity to meet its financial commitments on the obligation is very strong. An obligation rated 'A' is somewhat more susceptible to the adverse effects of changes in circumstances and A economic conditions than obligations in higher-rated categories. However, the obligor's capacity to meet its financial commitments on the obligation is still strong. An obligation rated 'BBB' exhibits adequate protection parameters. However, adverse economic conditions or BBB changing circumstances are more likely to weaken the obligor's capacity to meet its financial commitments on the obligation. BBB Obligations rated 'BB', '13% 'CCC', 'CC', and 'C'are regarded as having significant speculative characteristics. 'BB' CCC, CC, indicates the least degree of speculation and 'C' the highest.While such obligations will likely have some quality and C and protective characteristics, these may be outweighed by large uncertainties or major exposure to adverse conditions. An obligation rated 'BB' is less vulnerable to nonpayment than other speculative issues. However, it faces major BB ongoing uncertainties or exposure to adverse business, financial, or economic conditions that could lead to the obligor's inadequate capacity to meet its financial commitments on the obligation. An obligation rated 'B' is more vulnerable to nonpayment than obligations rated 'BB', but the obligor currently B has the capacity to meet its financial commitments on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitments on the obligation. An obligation rated 'CCC' is currently vulnerable to nonpayment and is dependent upon favorable business, CCC financial, and economic conditions for the obligor to meet its financial commitments on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitments on the obligation. An obligation rated 'CC' is currently highly vulnerable to nonpayment.The'CC' rating is used when a default has CC not yet occurred but S&P Global Ratings expects default to be a virtual certainty, regardless of the anticipated time to default. C An obligation rated 'C' is currently highly vulnerable to nonpayment, and the obligation is expected to have lower relative seniority or lower ultimate recovery compared with obligations that are rated higher. An obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within five business days in the absence of a stated grace D period or within the earlier of the stated grace period or 30 calendar days.The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to'D' if it is subject to a distressed debt restructuring. Ratings from 'AA'to'CCC'may be modified by the addition of a plus (+)or minus (-) sign to show relative standing within the rating categories. 48 S&P Short-Term Issue Credit Ratings Table 2 Shon-Term issue Credit Ratings Category Definition A short-term obligation rated 'A-1' is rated in the highest category by S&P Global Ratings. The obligor's capacity A-1 to meet its financial commitments on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor's capacity to meet its financial commitments on these obligations is extremely strong. A short-term obligation rated 'A-2' is somewhat more susceptible to the adverse effects of changes in A-2 circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitments on the obligation is satisfactory. A short-term obligation rated 'A-T exhibits adequate protection parameters. However, adverse economic A-3 conditions or changing circumstances are more likely to weaken an obligor's capacity to meet its financial commitments on the obligation. A short-term obligation rated 'B' is regarded as vulnerable and has significant speculative characteristics. The B obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties that could lead to the obligor's inadequate capacity to meet its financial commitments. A short-term obligation rated 'C' is currently vulnerable to nonpayment and is dependent upon favorable C business, financial, and economic conditions for the obligor to meet its financial commitments on the obligation. A short-term obligation rated 'D' is in default or in breach of an imputed promise. For non-hybrid capital instruments, the 'D' rating category is used when payments on an obligation are not made on the date due, unless S&P Global Ratings believes that such payments will be made within any stated grace period. However.. D any stated grace period longer than five business days will be treated as five business days. The 'D' rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action and where default on an obligation is a virtual certainty, for example due to automatic stay provisions. A rating on an obligation is lowered to'D' if it is subject to a distressed debt restructuring. 49 Fitch Ratings-Issuer Default Ratings AAA Highest credit quality AAA ratings denote the lowest expectation of default risk.They are assigned only in cases of exceptionally strong capacity for payment of financial commitments.This capacity is highly unlikely to be adversely affected by foreseeable events. AA Very high credit quality AA ratings denote expectations of very low default risk.They indicate very strong capacity for payment of financial commitments.This capacity is not significantly vulnerable to foreseeable events. A High credit quality A ratings denote expectations of low default risk.The capacity for payment of financial commitments is considered strong.This capacity may,nevertheless,be more vulnerable to adverse business or economic conditions than is the case for higher ratings. BBB Good credit quality BBB ratings indicate that expectations of default risk are currently low.The capacity for payment of financial commitments is considered adequate,but adverse business or economic conditions are more likely to impair this capacity. BB Speculative BB ratings indicate an elevated vulnerability to default risk,particularly in the event of adverse changes in business or economic conditions over time;however,business or financial flexibility exists that supports the servicing of financial commitments. B Highly speculative B ratings indicate that material default risk is present,but a limited margin of safety remains.Financial commitments are currently being met;however,capacity for continued payment is vulnerable to deterioration in the business and economic environment. CCC Substantial default risk CCC ratings indicate that default is a possibility. CC Very high default risk CC ratings indicate that a default of some kind appears probable. C Exceptionally high C ratings indicate that a default or default-like process has begun,or the issuer is in standstill,or for a closed default risk funding vehicle,payment capacity is irrevocably impaired. Note:The modifiers"+"or"-"may be appended to a rating to denote relative status within major rating categories. 50 Date: August 20,2021 Report No. 2021-064 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Sustainability Framework Advisory Committee Recommendations for Greenhouse Gas Reduction Target Setting and Race to Zero challenge. BACKGROUND: The Sustainability Framework Advisory Committee (SFAC) is charged to advise the Denton City Council on the implementation of, and matters related to, the City's Sustainability Framework. During the first two SFAC meetings, May and June 2021, staff provided background information regarding the Simply Sustainable Framework and the Greenhouse Gas (GHG) Management program. At the July meeting the SFAC recommended that the City of Denton City Council adopt"science-based"targets for GHG emissions reduction, and that the City join the ICLEI 150/Cities Race to Zero challenge. The science-based target represents the City of Denton's "fair share of global reductions to avoid a 1.5-degree Celsius increase in global temperatures. The quantitative outcome is a 46.3 % decrease in emissions from 2018 to 2030 and achieving net zero emissions by 2050. DISCUSSION: Greenhouse Gases (GHGs) trap heat in the atmosphere and are produced from natural and anthropogenic sources, which include Carbon Dioxide (CO2), Methane (CH4), and Nitrous Oxide (N20). Examples of anthropogenic (manmade) sources include fossil fuel combustion for energy and transportation, landfill and other sources of decomposing organic matter, and agriculture and industrial processes. Reductions in anthropogenic emissions have direct and indirect benefits such as climate change mitigation, improved public health, and resource conservation. A baseline GHG inventory for the City of Denton for the year 2006 was assembled in 2011. The 2006 inventory is used as a benchmark to track improvements in emission reduction for subsequent years. Since 2015, Sustainability staff has completed an annual greenhouse gas inventories update to improve data understanding and provide a basis for better informed, decision-making. The Sustainability Framework, the City's comprehensive plan related to sustainability, lists the following goals related to Greenhouse Gas Management and Air Quality: • Set reduction targets for municipal and community greenhouse gas emissions, • Annually update Greenhouse Gas Inventory and Contribution Analysis, and 51 Date: August 20,2021 Report No. 2021-064 • Create Greenhouse Gas Mitigation Plan GHG Management Program Tools and 2019 Results Greenhouse Gas Inventory: The greenhouse gas inventory is an annual analysis that aims to calculate the "carbon footprint" of both municipal operations and the Denton community. Both analyses look at consumption-based data for items such as fuel, electricity, waste generation, and natural gas. All GHGs are converted into 100-year carbon equivalence and data is reported in metric tons of carbon dioxide equivalence (MT CO2e). Based on the 2019 GHG inventory current community reductions are at approximately 33% compared to 2006 and 17.8% compared to 2018. The City is currently using the ICLEI ClearPath tool to manage it GHG Inventory. Contribution Anal: The contribution analysis calculates the net change in two greenhouse gas inventories and identifies increases and decreases that contribute to the overall difference, including weather normalization to calculate the impact of temperature differences, population growth, consumption per capita, housing development, and behavior change. Notable increases between 2018 and 2019 include: growth in population, increased vehicle travel, and increased electricity use per household. Notable decreases include: the increased use of renewable energy, improved vehicle efficiency, and a slightly cooler summer. Greenhouse Gas Forecasting: The forecasting tool is used to calculate a Business as Usual (BAU) scenario for future GHG emissions in Denton. The tool considers several factors expected to change in future years such as, electricity generation sources,population growth, residential development, and vehicle efficiency/electrification. It also assumes certain factors to remain constant such as residential behavior related to rates of consumption per capita. Science Based Targets The International Panel on Climate Change (IPCC) is widely referenced as the source for reduction target setting to avoid a 1.5°C increase in global temperatures by 2050 and avert many of the effects associated with that increase. The IPCC 5t'assessment models indicate that, to avoid exceedance of 1.5°C increase in global temperatures, the global net anthropogenic CO2 emissions will need to be reduced by 40-60%by 2030 and achieve net zero between 2045 and 2055 (based on the model's interquartile range statistic). Governments at all levels have historically utilized these goals and incorporated them into their own planning efforts if they choose to align with the concept of avoiding a 1.5°C global temperature increase. New methodologies released in late 2020 offer alternative methods for achieving this alignment, Science Based Target setting. Cities with GHG reduction targets to this point have chosen to enact their own short and long- term goals based on feasibility, scope of influence, or matching global IPCC recommendations. 52 Date: August 20,2021 Report No. 2021-064 These goals range in quantity and can be altered when achieved, or new technology becomes available. Timeline/Next Steps July 23, 2021 — Sustainability Framework Advisory Committee recommendation August 2021 COE - Cancelled August 20, 2021 - ISR to City Council September 2021 —Work session, Resolution or Ordinance to Council to adopt SFAC recommendation. CONCLUSION: The Sustainability Framework Advisory Recommends 1. The adoption of a Science Based Target to reduce Greenhouse Gas Emissions 46.3%between 2018 and 2030, and achieve net zero emissions by 2050 2. That the City of Denton sign on to the ICLEI 150 Challenge and Cities Race to Zero initiative Staff will provide council with next steps in the form of a work session, resolution, or ordinance in the coming months to seek direction on these recommendations. STAFF CONTACT: Katherine Barnett, Sustainability Manager REQUESTOR: Staff Report- Sustainability Framework Advisory Committee Recommendation 53 FY 20/ 21 Council Requests Open Requests Requests Answered by Department FY All Time Request Volume by 1/21 Council Person Paul Meltzer - Deb Armintor Community Svcs Alison Maguire Environmental Svcs ■ Jesse Davis Public Works Mayor Gerard Hudspeth Capital Projects �% Vicki Byrd Utilities 26% Brian Beck - CMO Library 0 2 4 6 8 Legal Fire Police Tech Services Airport Requests • " by Quarter Public Affairs/Customer Svc Economic Development ■ 400 Development Svcs 1 s9 160 208 Finance E 200 112 Audit Paul Meltzer • Deb Armintor 0 Municipal Court • Alison Maguire • Jesse Davis 01 20;21 0220121 0320121 04 20/21 Procurement Real Estate • Mayor Gerard Hudspeth Yicki Byrd Risk I ® Brian Beck Other 0 50 100 150 200 Total Open Elected Official Some requests involve multiple departments. causing the Requeststotal requests by department to add up higher than the 27 Submit New 54 total request count Request Council Requests for Information • • - -• • 1 - •- -• • D. • -• Assigned D-•. Comments 1 ❑ Mayor Hudspeth 07/20/21 Can staff check on a drainage issue on N.Ruddell St.across from the Service Center? Daniel Kremer Public Works-Drainage Information is provided in the August 20 Friday Report 2 Q Council Member Davis 07/27/21 Can staff follow up on an email about flooding on Scripture? Daniel Kremer Public Works-Drainage Information is provided in the August 20 Friday Report 73 ❑ Council Member Davis 07/27/21 What is the status of the Crescent St.project?Have with missed our window for this year,with Becky Diviney CIP-Capital Projects Information is provided in the August 20 Friday Report school starting again soon? 4 ❑ Mayor Hudspeth 07/28/21 Does the City have a plan to replace road markings and reflectors? Daniel Kremer Public Works-Streets Information is provided in the August 20 Friday Report Council Member Byrd 07/30/21 One Minute Pitch Request:Worksession to establish an action plan to elevate and implement the Sarah Kuechler City Manager's Office Council Member will advise staff on scheduling pending the Sept. 5 proposed development of what is known as Denton Basic Services Center:Ruddell Tiny Village 23 trip to Community First EL Project . — :i 6 U Council Member Davis 08/09/21 Can staff address concerns about a herbicide that was sprayed in the paved drainage area between Daniel Kremer Public Works-Drainage Staff will provide information to the Council Member Hillcrest and Bellemead? 7 ❑ Mayor Pro Tern Meltzer 08/10/21 It has been alleged in social media that the city had the option to pay more to get the work done Becky Diviney CIP-Capital Projects Staff will provide information to the Council Member more quickly on Elm but elected not to do it. Is that correct? 8 ❑ Council Member Beck 08/13/21 Can staff follow up with information about the Forestar Rayzor development? Deborah Viera Environmental Services Staff will provide information to the Council Member 9 Tw Council Member Armintor 08/13/21 One Minute Pitch Request:Can we update the order to also require masks on College and Sarah Kuechler City Manager's Office Staff will schedule this one-minute pitch for the August 24 Work or University campuses? Session 10 ❑ Council Member Armintor 08/14/21 What accountability tools are at our disposal to get such"repeat offenders"to stop(regarding Deborah Viera Environmental Services Staff will provide information to the Council Member Forestar Rayzor Development)? 11 a Council Member Armintor 08/14/21 Can staff respond to questions about Deerwood drainage? Hayley Zagurski Development Services Staff has provided information to the Council Member 12 Mayor Hudspeth 08/16/21 Can staff check on mail that is being returned to residents intended for Development Services? Scott McDonald Development Services Staff has provided information to the Council Member 13 r Council Member Armintor 08/16/21 Can staff provide information about the electrical outlets in Quakertown Park? Drew Huffman Public Works-Parks Information is provided in the August 20 Friday Report i 14 Q Council Member Armintor 08/17/21 Can staff update me on a police interaction outside of Applejacks? Frank Dixon Police Staff has provided information to the Council Member 15 D Council Member Byrd 08/17/21 Can staff provide information about an email about electric vehicle charging on lamp posts Antonio Puente DME Staff has provided information to the Council Member 16 D Council Member Maguire 08/17/21 Can staff provide a response to recommendations about COVID-19 protocols? Sarah Kuechler Public Affairs Staff has provided information to the Council Member 17 Mayor Hudspeth 08/17/21 Can staff check on trash removal at the Retreat of Denton? Brian Boerner Solid Waste Staff has provided information to the Council Member 18 Mayor Hudspeth 08/17/21 Can staff check on the striping at Spencer and Loop 288?It is very hard to see there Daniel Kremer Public Works-Streets Staff has provided information to the Council Member 19 Mayor Hudspeth 08/17/21 Does staff have any recommendation re:mask mandate in Parks programming? Gary Packan Public Works-Parks Staff has provided information to the Council Member 20 Mayor Pro Tern Meltz 08/17/21 Cans staff provide information about the total number of ICU beds? Sarah Kuechler City Manager's Office Staff has provided information to the Council Member 21 ❑ Council Member Maguire 08/18/21 can staff provide information about a neighborhood who may have homes with leins on them? Rachel Balthrop Mendoza City Manager's Office Staff will provide information to the Council Member 22 ❑ Council Member Davis 08/19/21 Can we please get an update on the Downtown TIRZ expansion and PEC conversation?When will Becky Diviney,Jessica Rogers CIP-Capital Projects Economic Staff will provide information to the Council Member this come back to the TIRZ Board and Council? Development 23 ❑ Council Member Davis 08/19/21 Can we get an update on the mews streets plan?What is the status and when will it come back to Becky Diviney,Scott McDonald CIP-Capital Projects Staff will provide information to the Council Member Council? Development Services 24 ❑ Council Member Davis 08/19/21 Do we have the same total number of hospital beds overall today that we did in March?Or Sarah Kuechler City Manager's Office Staff will provide information to the Council Member December?Or last June? 25 ❑ Council Member Beck 08/19/21 Can staff provide information and potential solution for the traffic issues near Hodge Elementary? Becky Diviney CIP-Traffic Engineering Staff will provide information to the Council Member 26 ❑ Council Member Armintor 08/19/21 Can staff provide information to follow up questions for bitcoin mining? Terry Naulty DME Staff will provide information to the Council Member Council Member Maguire 08/20/21 I would like to make a one-minute pitch at the 9/24 Council meeting to consider a resolution Ryan Adams Public Affairs Staff will schedule this one-minute pitch for the August 24 Work 27 opposing Senate Bill 1 and House Bill 3,which are planned for consideration in the Texas Session Legislature's special session. 55 August 2021 1 2 3 4 5 6 7 10:00 am Community 5:00 pm P&Z Commission 8:00 Agenda C o m m itte e 9 am Councilluncheon Engagement 8:30a.m.DEDC 3:00 pm—Health& 2:00 pm CC Work Session Building Standards 6:00 p.m.P&R Beautification 6:3 0 pm CC Regular Commission Board Se ssion Public Art—4pm 8 9 10 11 12 13 14 9:00amPUB 2:00pm 2nd Tuesday 11:00 a.m.EDPB 3:00pm—Health& 9:00amCOE-cancelled Se ssion Building Standards HLC-5pm CANCELLED-5:30 pin— Cornnrission AAB 5:30 p.m.library Board Denton Police Department Chief of Police Advisory Board—6 m 15 16 17 18 19 20 21 CANCELLED 5:30 pm 3:00 pm CC Work Session CANCELLED-9:00 am 3:00 pm—Health& CANCELLED-1:00 pm 9:00 am Council Retreat Traffic Safety Connr»ssion 6:3 0 pm CC Re g ula r Nobility Committee Building Standards Sustainability Framework Se ssion 11:00 a.m Development Commission Advisory Committee Code Review Committee 5:00 pm P&Z Commis s ion 5:30 pm Council Retreat Day 1 22 23 24 25 26 27 28 9:00 am PUB Cancelled-10:00 am Council CANCELLED-12:30 p.m Airport Connnittee Development Code Review CANCELLED -3:00 pm 1:00 pin—Audit/Finance Committee Board of Ethics 2:00 p m 4th Tue sd a y Cancelled-1:00 pm Civil Session Service Commission CANCELLED-3:00 pm— Denton Police Department Health&Building Chief of Police Advisory Standards COnll ssion Board—6pm 29 30 31 o Council Meeting 56 September 2021 1 2 3 4 8:00 am Agenda Committ 8:30 a.m.DEDC 12:00 Bond Oversight 4 pm Public Art 5 6 7 8 9 10 11 LABOR DAYHOUDAY No Council Meeting 11:00 a.m EDPB 3:30 p.m.Library Board 10:00 am Community 5:30 pm—AAB No CouncilLuncheon Engagement 6:30pmP&ZCommission 12 13 14 15 16 17 18 9:00 am PUB 2:00 p m 2nd Tue sd a y 3:00 Commvttee on Persons w/ Se ssion Disablilites 4:00 p.m.P&R Beautificatioi Board 19 20 21 22 23 24 25 11:30 am Traffic Safety 2:00 pm CC Work Session 9:00 am Nbbility Comr,�— "00am Audit/Finance Corrimsion 6:30 pm CC Regular Se ssion 12:00 p.m.TIRZNo.I 6:30 pm PBrZ Commission 26 27 28 29 30 9:00 am PUB 10:00 am-CAC 3:OOpm-Board ofEthics 2:00 pm 4th Tuesday Se ssion 57 October 2021 1 2 3 4 5 6 7 8 9 9:00 amCOE No Council Meeting 6:30 pmP&MCommission 8:00 am Agenda Conmattee 11:30 am Council Luncheon 8:30 a.m.DEDC 4:00 p.m.P&2 BeauuucUIIG 4 pm Public Art Board 10 11 12 13 14 15 16 9:00amPUB 2:00pm 2nd Tuesday 11:00 a.m.EDPB 3:30 p.m.library Board Se ssio n 5:30 pm-AAB 17 18 19 20 21 22 23 11:30 am Traffic Safety 2:00 pm CC Work Session 9:00 am Nbbility Conmrittee 1:00pm Audit/Finance Commission 6:30 pm CC Regular Ntvetmg Se ssio n 2 pm Animal Shelter Advisory 6:30 pm P&M Commission 24 25 26 27 28 29 30 9:00 am PUB 10:00 am-CAC 2:00 p in 4th Tue sd a y 3:00 Board ofEthics Se ssion 31 58 Tentative Work Session Topics and Meeting Information Updated: August 20, 2021 Meeting Date Item Legistar ID (Departments Involved (Type (Estimated Time August 20,2021 Council Retreat:Discussion includes Council Dynamics,One-Minute City Manager's Office 21-1600 Annual Retreat 2 hours (Council Retreat Day 1) Pitch Process,Council Priorities Legal August 21,2021 Council Retreat:Discussion includes Council Dynamics,One-Minute City Manager's Office 21-1601 Annual Retreat 6 hours (Council Retreat Day 2) Pitch Process,Council Priorities Legal City of Denton COVID-19 response 21-1818 City Manager's Office Water Rate 21-1718 Finance Budget 60 minutes August 24,2021 TWU Master Plan/Update 21-1478 Capital Projects City Business 30-60 minutes (Special) One-Minute Pitch: 21-1091 City Manager's Office Council Request Less than 30 minutes Other Major Items for Meeting: August 31,2021 NO MEETING-5TH TUESDAY September 6,2021 NO MEETING-Labor Day September 7,2021 NO MEETING-Labor Day Comprehensive Solid Waste Management Strategy 21-1409 Solid Waste Council Priority 60-90 minutes Internal Audit-Water Production 21-981 Internal Audit Internal Audit Report 30 minutes Water,CMO Comprehensive Planning and Small Area Plan 21-1719 Development Services City Business 60 minutes September 14,2021 City Manager's Office Council Request Work Session(@2:00 p.m.) Non-Discrimination Ordinance Research 21-1639 Legal Maguire(6/15/21) 60-90 minutes Special Called Meeting(@6:30 p.m.) Bell Avenue Discussion 21-1651 Capital Projects City Business 60 minutes Budget Presentation 21-1806 Finance Budget 30-60 minutes One Minute Pitch: 21-1272 City Manager's Office Council Request Less than 30 minutes Other Major Items for Meeting:Budget Public Hearings Community Services Affordable Housing Plan 21-1419 City Manager's Office, Council Priority 60-90 minutes Development Services Internal Audit-EMS Billing&Collection Audit 21-1269 Internal Audit Internal Audit Report 30 minutes Fire Parks and Recreation September 21,2021 Interactive Fountain/Sculpture at Rayzor Ranch Park 21-1750 Economic Development, Council Request 30 minutes Davis(4/13/21) (Regular) Finance Development Services Council Request Meltzer DDC Tree Preservation Review 21-1162 60-90 minutes Parks (5/11/21) DCTA Update provided by the City's appointee: Chris Watts 21-1835 City Manager's Office City Business 30-60 minutes One-Minute Pitch: 21-1273 City Manager's Office Council Request Less than 30 minutes Other Major Items for Meeting:Consideration of budget adoption Internal Audit-Payroll Administration Audit 21-1267 Internal Audit Internal Audit Report 30 minutes Finance Construction Code Review 21-735 Development Services City Business 60-90 minutes September 28,2021 Parkland Dedication and Development Ordinance 21-109 Parks&Rec City Business 60 minutes (Special) Denton Central Appraisal District Nominations 21-1806 Finance City Business 30-60 minutes One-Minute Pitch: 21-1274 City Manager's Office Council Request Less than 30 minutes Other Major Items for Meeting: FY 2021-22 Annual Audit Plan 21-1319 Internal Audit Internal Audit Report 30-60 minutes October 4,2021 Southwest Park Master Plan 21-553 Parks and Recreation Bond Project 60 minutes (Luncheon) Parks,Recreation,and Trails System Master Plan Update TBD Parks&Recreation City Business 60 minutes Other Major Items for Meeting: October 5,2021 NO MEETING-NATIONAL NIGHT OUT Tourism Public Improvement District Update 21-1332 Economic Development City Business 60-90 minutes October 12,2021 Economic Development Programs and Policy Discussion 21-1330 Economic Development City Business 30-60 minutes (Special) Solid Waste Comprehensive Plan Update' TBD Solid Waste Council Priority 60 minutes One-Minute Pitch: 21-1416 City Manager's Office Council Request Less than 30 minutes Other Major Items for Meeting: Reimbursement Ordinance Audit Follow-Up-Roadway Quality Management 21-1802 Internal Audit Internal Audit Report 30 minutes Electric Service Standards TBD DME City Business 60 minutes October 19,2021 Stormwater Master Plan 21-1415 CIP/Engineering City Business 60-90 minutes (Regular) Solid Waste Comprehensive Plan Updatez TBD Solid Waste Council Priority 60 minutes CIP Construction Projects Update 1 21-1663 CIP/Engineering City Business 30-60 minutes One-Minute Pitch: 21-1417 City Manager's Office Council Request Less than 30 minutes Other Major Items for Meeting: City Holidays TBD Human Resources City Business 60 minutes Community Services Annual Grant Program Overview(Multiple TBD Community Services City Business 60 minutes Sessions) October 26,2021 DME Transmission Cost of Service TBD DME City Business (Special) Solid Waste Comprehensive Plan Update TBD Solid Waste Council Priority 60 minutes One-Minute Pitch: 21-1418 City Manager's Office Council Request Less than 30 minutes Other Major Items for Meeting: *This is for planning purposes only.Dates are subject to change. 59 Meeting Date Item Legistar ID Departments Involved IType Estimated Time Update on Homelessness Initiatives and Housing Crisis Response TBD Community Services Council Priority/ November 2021 System City Business November 1,2021 (Luncheon) Other Major Items for Meeting: Audit Follow-Up-Police Property Room Procedures 21-1803 Internal Audit Internal Audit Report 30 minutes Municipal Court/Court's Online Dispute Resolution Platform 21-1807 Municipal Court City Business 30-45 minutes Ranked-Choice Voting for Council and Committee Board Officers TBA City Manager's Office Council Request Beck 30-60 minutes November 2,2021 City Secretary's Office,Legal (5/25/21) (Regular) One-Minute Pitch: 21-1762 City Manager's Office Council Request Less than 30 minutes Other Major Items for Meeting: Appointment of Assistant Judges(21-1808) Off-premise Signs TBA Development Services Council Request Davis 60-90 Minutes Legal (6/8/21) Comprehensive Solid Waste Management Strategy Implementation TBA Solid Waste&Recycling Council Priority 90 minutes November 9,2021 and Funding Plan and Schedule (Special) One-Minute Pitch: 21-1763 City Manager's Office Council Request Less than 30 minutes Other Major Items for Meeting: FINAL Draft Presentation-Parks,Recreation,and Trails System Master TBD Parks&Rec City Business 90 minutes Plan Update Polling Locations for May 7,2022 21-1765 City Secretary City Business Less than 30 minutes November 16,2021 (Regular) Audit Follow-Up-Police Overtime 21-1804 Internal Audit Internal Audit Report 30 minutes One-Minute Pitch: 21-1764 City Manager's Office Council Request Less than 30 minutes Other Major Items for Meeting: Estimated Work Item Legistar ID Departments Type Session Date Redistricting Update TBD City Secretary's Office City Business Fall 2021 Presentation of final Comprehensive Solid Waste Management Strategy TBD Solid Waste&Recycling Council Priority January 2022 ETJ-Lake Ray Roberts 21-738 Development Services City Business Leak Adjustment Ordinance 21-557 Water/Wastewater City Business Work Session Dates to be Determined Late-August/Early- Closed Session:City Attorney interviews TBD Human Resources City Business September 2021 DIVE Cost of Service TBD DME City Business November 2021 Estimated Work Item Dates Departments Type Session Date FY 2022-23 Budget Development February- Finance Budget Summer 2022 October 2022 All other departments Community Services Affordable Housing Plan(Multiple Sessions Likely) Ongoing Fall/Winter 2021 City Manager's Office, Council Priority November 2021 Council Priorities and Significant Work Plan Items Development Services to be Scheduled Comprehensive Solid Waste Management Plan(Multiple Sessions Ongoing- Solid Waste and Recycling Council Priority November 2021 Likely) Fall/Winter 2021 Engineering Mobility Plan(Multiple Sessions Likely) Ongoing-Fall 2021 Public Works,Development Council Priority Fall/Winter 2021 Services Item Date Approved Department Estimated Hours to Requestor Complete Flag Policy Discussion June 15,2021 City Manager's Office 20-35 hours Armintor Legal Approved Council Request Work Sessions to be LINT Parking Agreements June 15,2021 Engineering 20 hours Hudspeth Scheduled Legal,Development Services More Inclusive Board and Committee requirements July 25,2021 City Secretary's Office 20-30 hours Armintor City Manager's Office,Legal *This is for planning purposes only.Dates are subject to change. 60 1 Street Closure Report: Upcoming Closures smartsheet SCR Aug 23rd - Aug 29th Closure Start Street/Intersection From To Date Description Department Contact Bell Ave Texas St Withers St 09/30/21 11/03/21 Water Distribution will be Water Tiffany Sherrane 1 installing a new water main line and services. Bell Ave Withers St Mingo Rd 10/13/21 11/23/21 Water Distribution will be Water Tiffany Sherrane 2 installing a new water main line and services. Bell Ave at Mingo Rd 09/01/21 10/12/21 Water Distribution will be Water Tiffany Sherrane 3 installing a new water main line and services. Bernard St Hickory St Chestnut St 11/24/21 01/10/22 Water Distribution will be Water Tiffany Sherrane 4 replacing the water main line and services. Exported on August 20,2021 11:39:36 AM CDT 61 Page 1 of 1 2 Street Closure Report: Current Closures smartsheet Street/Intersection From Closure End Description Department F Department Contact Date Bell Hickory McKinney 07/28/21 08/25/21 Storm drain installation across Engineering Streets Kyle Pedigo 1 Bell on Oak.Bell will be closed half at a time as the storm drain is installed Bell Ave at Mckinney St 07/03/21 08/31/21 Water Distribution will be Water Tiffany Sherrane 2 installing a new water main line and services. Bell Ave College St Texas St 08/04/21 09/20/21 Water Distribution will be Water Tiffany Sherrane 3 installing a new water main line and services. Bonnie Brae(SB) Oak Hickory 06/14/21 09/22/21 This block is closed to Other Mark Zimmerer southbound traffic only,detours are posted.Northbound lane 4 still open.Installation of electric duct banks for DME substation project and steel casing for water main project Carroll Blvd(SB)&(NB) Mulberry Eagle 07/12/21 10/01/21 Concrete Street Panel and Streets robbin.webber@cityofdenton.co Sidewalk Repair.The process m 5 starts with Barricading the failed sections of concrete pavement, remove the pavement,and install new concrete. Chebi Lane Old North Road Freedom Lane 06/21/21 09/10/21 Full width pavement Engineering Streets Kyle Pedigo 6 replacement and subgrade improvement. College Park Dr Peach St End of College Park Dr 06/28/21 09/24/21 Wastewater collections will be Wastewater Tiffany Sherrane 7 installing a new wastewater main line and services. Collier Ave. 1-35 NB Frontage Road Eagle Drive 08/23/21 08/27/21 Repairing asphalt road Private Development Robert Plato 8 damaged during construction of Carriage Square Apartments Colorado Boulevard Valley Creek Road San Jacinto Boulevard 07/26/21 08/26/21 Building a right-turn lane into Public Works Inspections Robert Plato the new Vista Verde project on 9 the west side of Colorado. The right lane will be closed while operations are being performed to add the turn lane. 10 Eagle Locust Elm 06/28/21 09/03/21 Patching of utility trench lines. Engineering Seth Garcia 11 Elm Hickory Eagle 05/11/20 08/27/21 PEC 4 Utility Project Engineering Seth Garcia Elm Street Eagle Drive (dead end) 05/17/21 09/30/21 Atmos Energy will be closing Atmos Alice Province 12 street intermittently to replace and relocate an existing gas main and service lines F.M.428 Poinsettia Drive Loop 288 08/09/21 09/06/21 Concrete approach and turn TXDOT Robert Plato 1- lane improvements on TXDOT Roadway Fowler Dr College Park Dr Peach St 06/28/21 09/24/21 Wastewater collections will be Wastewater Tiffany Sherrane 14 installing a new wastewater main line and services. Hickory Street Welch Carroll 08/31/20 09/04/21 Construction is set to begin on Engineering Kyle Pedigo West Hickory Street between N. Welch Street and Carroll Blvd in October of 2020 and continue 15 through September of 2021. Detailed lane closure information is forthcoming pending approval of the contractor's phasing and traffic control plans. Exported on August 20,2021 11:39:47 AM CDT 62 Page 1 of 2 Street/Intersection From To Closure Start Closure End Description Department Department Contact Date Date Lido Way and Balboa Court Bell Avenue End 07/05/21 09/01/21 Full width pavement Engineering Streets Kyle Pedigo 16 replacement and subgrade improvement. 17 Locust Eagle Hickory 06/28/21 09/03/21 Patching of utility trench lines. Engineering Seth Garcia Loop 288 SB On-Ramp at FM 428 Loop 288 Mainlanes 08/06/21 09/06/21 Placing concrete approaches TXDoT Robert Plato 18 FM428 for development at corner of Loop 288 and FM428 Mckinney duchess Glengarry 02/01/21 12/24/21 McKinney-Mayhill Intersection Engineering Trevor Crain This project is widening the intersection and 600'each way 19 to match existing conditions along McKinney.Also includes water,wastewater,and drainage improvements. McKinney St @ Elm St intersection 08/02/21 10/29/21 Temporary lane closures in Traffic James Andrews 20 place as crews work to safely install new traffic signals at the intersections McKinney St @ Locust St intersection 08/02/21 10/29/21 Temporary lane closures in Traffic James Andrews 21 place as crews work to safely install new traffic signals at the intersections Mistywood Lane Old North Road Craig Lane 06/21/21 09/10/21 Full width pavement Engineering Streets Kyle Pedigo 22 replacement and subgrade improvement. Oak Street Bell Street UPRR Railroad 02/01/21 08/28/21 Adding drainage line to Oak Engineering kyle.pedigo@cityofdenton.com 23 Street as part of the Downtown Storm Sewer Project. Peach St N Locust Dr Fowler Dr 06/28/21 09/24/21 Wastewater collections will be Wastewater Tiffany Sherrane 24 installing a new wastewater main line and services. Scripture Bonnie Brae 1,300 ft.to the West 03/22/21 09/06/21 Reconstruct;Scripture from Streets robbin.webber@cityofdenton.co Bonnie Brae to approximately m 1,300 ft.to the west.This includes removal and replacement of failed sections of curb and gutter.Milling of the old asphalt pavement and the 25 stabilization of subgrade and the installation of new asphalt pavement. Phase I East Bound Outside Lane Phase II West Bound Outside Lane Phase III Middle Lane Walnut Street Locust Street Elm Street 05/17/21 09/30/21 Atmos Energy will be Atmos Alice Province 26 excavating street to complete replacement/relocation of their existing gas main 27 Western Blvd Jim Chrystal Airport Rd 08/16/21 12/31/21 Paving:Decal Lanes Private Development Public Jeremiah Tillman-David Works Inspections 28 Windsor Bonnie Brae Parkside 08/09/21 12/31/21 Pavement Restoration Private Development Public Jeremiah Tillman-David Works Inspections 29 Windsor Dr East Nottingham Branch Crossing 06/14/21 08/27/21 Roadway reconstruction Engineering Dustin.Draper@cityofdenton.co Windsor Dr East Broken Bow Armstrong 07/28/21 09/30/21 Street Reconstruction will be Engineering Dustin Draper 30 performed on the westbound lane of E Windsor Exported on August 20,2021 11:39:47 AM CDT 63 Page 2 of 2 3 Street Closure Report: Completed Closures smartsheet Street/Intersection From Closure End Description Department p- � Department Contact wo Date Avenue C 1-35 North Frontage Eagle Drive 07/26/21 Lane shift to allow for repair of Private Development Robert Plato damaged streets due to 1 contractor activity on the Carriage Square Apartment 0110111 project. Bell Ave Administration Dr College St 07/02/21 08/03/21 Water Distribution will be Water Tiffany Sherrane 2 installing a new water main line and services. 3 Bonnie Brae IH 35E Scripture 06/15/20 07/30/21 North South Water Main Phase Streets Robin Davis 3 4 Bryan Street Jagoe Ponder 07/22/21 07/22/21 Flagging traffic to offload Private Development Public equipment from the job site Works Inspections Bryan Street Ponder Jagoe 07/29/21 07/29/21 Lane closure so contractor can Private Development Public Stephany Trammell 5 load and unload equipment Works Inspections from jobsite Bryan Street Ponder Jagoe 08/02/21 08/02/21 Lane closure so contractor can Private Development Public Stephany Trammell 6 load and unload equipment Works Inspections from jobsite Dakota In Airport Rd Shelby In 07/20/21 07/23/21 Water Distribution will be Water Tiffany Sherrane 7 installing a new water main line and services. 8 Deerwood PWY Kings Row Grant PWY 07/06/21 07/30/21 Sidewalk Repair Streets Robbin Webber Hickory St West Welch Bernard 07/15/21 07/23/21 The intersection of Welch and Engineering Streets Kyle Pedigo 9 W.Hickory will be completely closed for pavement replacement. Riney Bonnie Brae Hardaway 07/06/20 07/30/21 Removing panel to adjust valve Private Development Public Jeremiah Tillman-David stack and center gate valve nut. Works Inspections 10 Replace panel after adjusting valve stack.Traffic control up from 8am-5pm Western Blvd Jim Chrystal Airport Rd 06/01/21 08/02/21 PH1-Installing sewer line Private Development Public Jeremiah Tillman-David across Western from median to Works Inspections 11 private property.PH2-Median removal,future pour for Turn Lanes Windsor Dr East Hanover Dr Longfellow In 06/01/21 07/30/21 Complete street reconstruction Engineering Dustin Draper 12 only allowing resident only traffic. Woodhaven Mistywood Emerson 04/05/21 08/12/21 This project will consist of the Streets robbin.webber@cityofdenton.co removal and replacement of m failed sections of curb and 13 gutter,the milling off the old asphalt and base material,lime stabilize the subgrade and the installation of new asphalt pavement. Exported on August 20,2021 11:39:56 AM CDT 64 Page 1 of 1