HomeMy WebLinkAboutNovember 16, 2010 AgendaAGENDA
CITY OF DENTON CITY COUNCIL
November 16, 2010
After determining that a quorum is present, the City Council of the City of Denton, Texas will
convene in a Work Session on Tuesday, November 16, 2010 at 4:30 p.m. in the Council Work
Session Room at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items
will be considered:
WORK SESSION
1. Citizen Comments on Consent Agenda Items
This section of the agenda allows citizens to speak on Consent Agenda Items only. Each
speaker will be given a total of three (3) minutes to address any items he/she wishes that
are listed on the Consent Agenda. A Request to Speak Card should be completed and
returned to the City Secretary before Council considers this item.
2. Requests for clarification of agenda items listed on the agenda for November 16, 2010.
3. Receive a report, hold a discussion and give staff direction regarding the creation of a
Tax Increment Reinvestment Zone for Downtown.
4. Receive a report and hold a discussion on the status of the 2005 Capital Improvement
Program.
Following the completion of the Work Session, the City Council will convene in a Closed
Meeting to consider specific items when these items are listed below under the Closed Meeting
section of this agenda. When items for consideration are not listed under the Closed Meeting
section of the agenda, the City Council will not conduct a Closed Meeting and will convene at
the time listed below for its regular or special called meeting. The City Council reserves the
right to adjourn into a Closed Meeting on any item on its Open Meeting agenda consistent with
Chapter 551 of the TEXAS GOVERNMENT CODE, as amended, as set forth below.
CLOSED MEETING
1. Closed Meeting:
A. Consultation with Attorney - Under Texas Government Code Section 551.071.
1. Discuss legal strategies and alternatives regarding potential litigation or
settlement, concerning street failures in a portion of the Wind River
subdivisions.
B. Deliberations Regarding Security Devices or Security Audits - Under Texas
Government Code Section 551.076.
1. Discuss and deliberate the deployment of security devices or security
personnel, including the conduct of security audits or the consideration of
specific occasions for the deployment of security devices or personnel in,
around, or involving City of Denton facilities or personnel.
City of Denton City Council Agenda
November 16, 2010
Page 2
ANY FINAL ACTION, DECISION, OR VOTE ON A MATTER DELIBERATED IN A CLOSED MEETING
WILL ONLY BE TAKEN IN AN OPEN MEETING THAT IS HELD IN COMPLIANCE WITH TEXAS
GOVERNMENT CODE, CHAPTER 551, EXCEPT TO THE EXTENT SUCH FINAL ACTION, DECISION, OR
VOTE IS TAKEN IN THE CLOSED MEETING IN ACCORDANCE WITH THE PROVISIONS OF §551.086 OF
THE TEXAS GOVERNMENT CODE (THE `PUBLIC POWER EXCEPTION-). THE CITY COUNCIL
RESERVES THE RIGHT TO ADJOURN INTO A CLOSED MEETING OR EXECUTIVE SESSION AS
AUTHORIZED BY TEX. GOVT. CODE, §551.001, ET SE Q. (THE TEXAS OPEN MEETINGS ACT) ON ANY
ITEM ON ITS OPEN MEETING AGENDA OR TO RECONVENE IN A CONTINUATION OF THE CLOSED
MEETING ON THE CLOSED MEETING ITEMS NOTED ABOVE, IN ACCORDANCE WITH THE TEXAS
OPEN MEETINGS ACT, INCLUDING, WITHOUT LIMITATION §551.071-551.086 OF THE TEXAS OPEN
MEETINGS ACT.
Regular Meeting of the City of Denton City Council at 6:30 p.m. in the Council Chambers at
City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be
considered:
REGULAR MEETING
1. PLEDGE OF ALLEGIANCE
A. U. S. Flag
B. Texas Flag
"Honor the Texas Flag - I pledge allegiance to thee, Texas, one state under God, one and
indivisible."
2. PROCLAMATIONS/PRESENTATIONS
A. Proclamations/Awards
3. CONSENT AGENDA
Each of these items is recommended by the Staff and approval thereof will be strictly on
the basis of the Staff recommendations. Approval of the Consent Agenda authorizes the City
Manager or his designee to implement each item in accordance with the Staff recommendations.
The City Council has received background information and has had an opportunity to raise
questions regarding these items prior to consideration.
Listed below are bids, purchase orders, contracts, and other items to be approved under
the Consent Agenda (Agenda Items A - M). This listing is provided on the Consent Agenda to
allow Council Members to discuss or withdraw an item prior to approval of the Consent Agenda.
If no items are pulled, Consent Agenda Items A - M below will be approved with one motion. If
items are pulled for separate discussion, they may be considered as the first items following
approval of the Consent Agenda.
A. Consider adoption of an ordinance of the City of Denton, Texas amending the
City's utility credit and collection policies that are contained in the Denton Code
of Ordinances, Chapter 26, "Utilities," Sections 26-3, 26-4, 26-5, 26-6, 26-8 and
26-9; providing an open meetings clause; providing a cumulative clause;
providing a repealer; providing a severability clause; providing an effective date.
The Public Utilities Board recommends approval (5-0).
City of Denton City Council Agenda
November 16, 2010
Page 3
B. Consider adoption of an ordinance of the City of Denton, Texas, amending
Ordinance No. 2009-236 prescribing the number of positions in each
classification of Police Officer; prescribing the number of positions in each
classification of Fire Fighter; providing a savings clause; providing a severability
clause; and declaring an effective date.
C. Consider approval of a resolution of the City Council of the City of Denton,
Texas (City), authorizing the intervention at the Railroad Commission of Texas
concerning the filing for an increase in rates by Atmos Pipeline - Texas; requiring
Atmos Pipeline to reimburse reasonable rate case expenses; authorizing the
retention of counsel and rate consultants; finding that the meeting at which this
resolution was approved complied with the open meetings act; making such other
findings and other provisions related to the subject.
D. Consider adoption of an ordinance of the City of Denton, Texas adopting the
Denton Municipal Airport Business Plan as an official policy document intended
to guide future development and financial performance of the Denton Municipal
Airport, and providing an effective date.
E. Consider adoption of an ordinance of the City of Denton authorizing the City
Manager, or his designee, to execute on behalf of the City of Denton an
acceptance of an offer from the Texas Department of Transportation (TxDOT)
relating to a grant for the Routine Airport Maintenance Program (RAMP);
authorizing the City Manager to expend funds provided for in the grant program;
and declaring an effective date. JxDOT Project No. AM 2011DNTON and
TxDOT CSJ No. M118DNTON). The Airport Advisory Board recommends
approval (6-0).
F. Consider approval of a resolution of the City of Denton, Texas requesting
improvements to Interstate 35 East as designed by the Texas Department of
Transportation to be fully funded and implemented for the full project length from
Interstate 635 in Dallas County to U.S. Highway 380 in Denton County; and
providing an effective date.
G. Consider adoption of an ordinance of the City of Denton, Texas to declare the
intent to reimburse expenditures from the Unreserved Fund Balance of the
Electric Fund with Certificates of Obligation with an aggregate maximum
principal amount equal to $11,752,000 to allow Denton Municipal Electric to
continue funding ongoing capital expenditures for expansion of the distribution
and transmission electric facilities.
H. Consider adoption of an ordinance accepting competitive bids and awarding a
two-year contract for tree trimming services for Denton Municipal Electric
(DME); providing for the expenditure of funds therefor; and providing an
effective date (Bid 4401-Two Year Contract for Tree Trimming Services Section
B awarded to the lowest responsible bidder meeting specification, ABC
Professional Tree Services, Inc., in the two-year estimated amount of $900,000)
City of Denton City Council Agenda
November 16, 2010
Page 4
L Consider adoption of an ordinance of the City of Denton, Texas authorizing the
City Manager to execute two professional service agreements to assist the City of
Denton in advancing its State Legislative Program, assist Council and staff in
addressing proposed legislation, and make the City aware of any legislative or
administrative initiatives believed to be detrimental to the interests of the City;
authorizing the expenditure of funds therefor; and providing an effective date
(RFP 4576-Legislative Consulting Services awarded to Focused Advocacy, LLC
in an amount not to exceed $132,500 and Solutions for Local Control, LLC in an
amount not to exceed $45,000 for a total award not to exceed $177,500 annually).
J. Consider adoption of an ordinance authorizing the City Manager to execute a
Professional Services Agreement with Camp Dresser & McKee, Inc. for
preparation of a sustainability plan and implementation strategy for the City of
Denton; authorizing the expenditure of funds therefor; and providing an effective
date (RFP 4536 in an amount not to exceed $169,190).
K. Consider adoption of an ordinance approving the expenditure of funds for the
purchase of software and hardware for the E.J. Ward Automated Fuel
Management System to be installed at the Fuel Island and Trick Wash Facility at
the City of Denton Landfill available from only one source in accordance with the
provision for State Law exempting such purchases from requirements of
competitive bids; providing for the expenditure of funds therefor; and providing
an effective date (File 4610-Purchase of Software/Hardware for Fuel
Management System to E.J. Ward, Inc. in the amount of $68,429).
L. Consider adoption of an ordinance waiving the City of Denton allocation of
Recovery Zone Bonds; designating Fort Bend County as the designee; and
declaring an effective date.
M. Consider adoption of an ordinance of the city of Denton, Texas, establishing the
new Public, Education and Government (PEG) subscriber fee rate as one percent
of the cable providers' gross revenue; authorizing and directing the City Manager
or his designee to execute a letter to all Denton cable providers; and declaring an
effective date.
4. CONCLUDING ITEMS
A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries
from the City Council or the public with specific factual information or recitation
of policy, or accept a proposal to place the matter on the agenda for an upcoming
meeting
AND
Under Section 551.0415 of the Texas Open Meetings Act, provide reports about
items of community interest regarding which no action will be taken, to include:
expressions of thanks, congratulations, or condolence; information regarding
holiday schedules; an honorary or salutary recognition of a public official, public
employee, or other citizen; a reminder about an upcoming event organized or
sponsored by the governing body; information regarding a social, ceremonial, or
community event organized or sponsored by an entity other than the governing
City of Denton City Council Agenda
November 16, 2010
Page 5
body that was attended or is scheduled to be attended by a member of the
governing body or an official or employee of the municipality; or an
announcement involving an imminent threat to the public health and safety of
people in the municipality that has arisen after the posting of the agenda.
B. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the
Texas Open Meetings Act.
C. Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the
Texas Open Meetings Act.
CERTIFICATE
I certify that the above notice of meeting was posted on the bulletin board at the City Hall of the
City of Denton, Texas, on the day of 2010 at o'clock
(a.m.) (p.m.)
CITY SECRETARY
NOTE: THE CITY OF DENTON CITY COUNCIL CHAMBERS IS ACCESSIBLE IN
ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE CITY WILL
PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED IF
REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED MEETING.
PLEASE CALL THE CITY SECRETARY'S OFFICE AT 349-8309 OR USE
TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-RELAY-
TX SO THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED THROUGH THE
CITY SECRETARY'S OFFICE.
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AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010
DEPARTMENT: Economic Development A~T
ACM: Jon Fortune
SUBJECT
Receive a report, hold a discussion and give staff direction regarding the creation of a Tax
Increment Financing Reinvestment Zone (TIF) in Downtown.
BACKGROUND
A Tax Increment Financing Reinvestment Zone (TIF) is a tool that local governments can use to
publicly finance needed structural improvements and enhance infrastructure within a defined area in
order to stimulate private development and redevelopment. An ad valorem valuation base is
established in the first year, and the revenue from the increased valuation from subsequent years is
reallocated to TIF development. The City enlisted the services of Schrader and Cline, Dallas
economic development consultants, to assist in establishing the TIF. The process requires the
compilation of a great deal of data to ensure the area will meet TIF criteria and to develop the final
project and financing plans.
The City Council reviewed the process and purpose of a TIF in 2008. After several meetings
regarding the Downtown TIF, it was decided to postpone the establishment of the TIF until the
Downtown Implementation Plan (DTIP) was complete; the DTIP was approved by City Council on
August 17, 2010. The DTIP identified specific projects and goals in order to spur development and
redevelopment in Downtown, as well as financing opportunities, which includes creating a TIF
district.
Based on the recommendations of the Downtown Master Plan, the RTKL study and the Downtown
Implementation Plan, staff recommends the creation of a TIF Reinvestment Zone for the downtown
area. In previous discussions regarding a TIF for downtown, Council requested information on
specific projects that would be eligible for TIF funds. Although the DTIP does not provide
information on specific projects, it does identify the types of projects needed and areas where
eligible projects should be considered. For example, the DTIP identifies three locations for
parking/parking strictures, describes the elements of complete streets, and supports redevelopment
projects in downtown.
TIF District Boundaries: On October 19, 2010, Council discussed the proposed TIF district.
Council was informed at that time that the boundaries of the TIF duplicated the Downtown
Implementation Plan excluding the tax exempt properties around Quakertown Park. The boundaries
are actually larger than the DTIP boundaries. It is more accurate to say that the boundaries include
all of the DTIP properties (excluding the tax exempt area around Quakertown Park). The reason for
the larger boundary is mainly due to the need for a property description for the TIF. The property
description is much easier to understand when it follows roadways than to identify specific
properties, which would have been required if the specific southern boundaries of the DTIP were
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applied. The current recommended district is approximately one-half the size of the 2008
recommended TIF district. The current recommended district contains approximately 413
properties.
TIF District Valuation: The estimated value generated by the 2008 TIF was $35 million,
compared to $23.6 million for the 2010 revised boundaries. These dollars reflect 2009 valuations
and tax rate and City of Denton participation only. The process of capturing the valuation within
such a district can be complicated and time-consuming. Staff is currently working with the
Appraisal District to become educated on the best process to administer the TIF. In visiting with
the City of Lewisville, staff learned that Lewisville originally captured this information through
their GIS process - the same process our Denton staff has been using. Lewisville indicated they
now rely on the Appraisal District to provide that information.
Board Structure: At the October 19, 2010 work session meeting, Council recommended the
proposed TIF Board be structured as a seven-member board. Our Economic Development
Partnership Board (EDPB) discussed the Downtown TIF at their November 2, 2010 meeting and
provided a recommendation regarding TIF Board stricture. The EDPB recommends that the
Council consider a similar stricture as that of the EDPB, with defined areas of qualification. As
you know, the EDPB is made up of two Council Members, two Chamber of Commerce Board
members, two representatives from the top twenty taxpayers and one representative from UNT.
They suggested Council might consider any combination from a list of qualifiers; such as Council
members; property owners, residents, or business operators from within the TIF District; individuals
with historic preservation experience, etc.
ESTIMATED SCHEDULE OF PROJECT
On August 3, 2010, Council approved a resolution for a Notice of Intent regarding the Downtown
TIF. Approval of the resolution did not formally commit the City to establish the TIF. It provided
the opportunity for the City to notify the DISD and Denton County of its intent to create a TIF and
to seek participation from them. The DISD and Denton County declined to participate. Council
discussed the TIF at their October 19, 2010 meeting.
The proposed TIF was presented to the Downtown Task Force on October 21, 2010 and to the
Economic Development Partnership (EDP) Board at their November 2, 2010 meeting. In addition
to the proposed stricture of the TIF Board mentioned above, the EDP Board recommends the list of
TIF projects provide flexibility to allow the TIF Board and City Council to address issues as they
arise. The EDPB recommends approval of the Downtown TIF and provided the following reasons
for their support:
• Redevelopment of downtown is important to our economic development allies. When the
stricture of the EDP was adopted in 2003, it was the result of over one year of meetings
with representatives of our economic development allies. The City of Denton, the Chamber
of Commerce, the University of North Texas, Texas Woman's University, North Central
Texas College, and Denton Independent School District each contributed to the funding and
the decision-making process that culminated in the strategic plan. They identified
Downtown as a key focus area for economic development.
• The EDP Board supports the recommendations of the Downtown Master Plan, TIP
Strategies Economic Development Plan, RTKL redevelopment study, and the Downtown
Implementation Plan, all of which recommended the creation of the TIF.
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• The creation of the Downtown TIF will demonstrate continuity over its 30-year period
through the fiscal commitment of the City. Leadership may change; however, property
owners will understand that there is an ongoing investment being made.
• Downtown involves redevelopment, which is more difficult than greenfield development.
The TIF will send a message to developers that the City wants to encourage infill and
sustainable development.
• Transportation Reinvestment Zone (TRZ) legislation is being proposed in Austin that may
allow other entities to capture property tax revenue from areas surrounding passenger rail.
The proposed TIF would grandfather the area around the downtown transit center and
establish the City's right to determine the use of future revenues.
If directed by City Council to proceed, the following actions are required:
1. Public Hearing adopting an ordinance creating the TIF and authorizing the formation of a
TIF Board and TIF Fund. In order to establish 2010 as the base year, this must be
accomplished prior to December 31, 2010.
2. Approval of Board Bylaws.
3. Appointment of Board by City Council. (City Council members may serve on Board)
4. Board develops final Project and Financing Plans.
5. City Council approves final Project and Financing Plans.
6. Report to State Comptroller of TIF establishment.
7. TIF Board provides Annual Report to City Council, Comptroller and Attorney General on
TIF Fund and project activity 90 days following the end of the fiscal year.
PRIOR ACTION/REVIEW
The Downtown Master Plan, the RTKL Catalyst Project study, and the Downtown Implementation
Plan (DTIP) have all been reviewed and have been endorsed by the Downtown Task Force, the
Economic Development partnership Board and City Council. All three of these studies/plans
recommended the creation of a TIF. In addition, the Economic Development Partnership Board
discussed the Downtown TIF at their August and November meetings. The Board supports the
creation of the TIF.
City Council approved the Notice of Intent resolution on August 3, 2010 and discussed the
Downtown TIF at their October 19, 2010 meeting.
FISCAL INFORMATION
It is estimated that the TIF would generate approximately $23.6 million over a 30 year period for
downtown improvements.
Respectfully submitted:
Linda Ratliff, Director
Economic Development Department
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AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010
DEPARTMENT: Streets
ACM: Howard Martin, 349-8232
SUBJECT
Receive a report and hold a discussion on the status of the 2005 Capital Improvement Program.
BACKGROUND
This agenda item is to provide an update to City Council on the status of the 2005 Capital
Improvement Program. The total dollar amount for the Bond Program was $42.4 million. The
$42.4 million was allocated in the following categories:
Public Building Improvements
Park System Improvements
Transportation Improvements
(Transportation & Street Reconstruction)
Total
Public Building Improvements (EXHIBIT 1)
• South Branch Library Expansion (Library)
• Senior Center Improvements (Parks)
Park System Improvements (EXHIBIT 2)
$4.0 million
$10.7 million
$27.7 million
$42.4 million
$4.0 million
$2.1 million (complete)
$1.9 million (complete)
$10.7 million
The Parks and Recreation Department has made solid progress toward completion of the 2005
CIP Bond Program. The 200 acre Southwest Park has been purchased and it will provide
recreational opportunities for the next generation of Denton residents. Property has been
purchased at North Lakes Park to help accommodate new adult soccer fields and additional
property acquisition at Carl Young Park is working its way through the legal process.
Improvements have been made at Avondale, Quakertown, Fred Moore and Denia Parks. The
slide at the Civic Center Pool was replaced, City Hall courtyard was reconstructed and made
ADA compliant, and backstop and dugout improvements were made at Evers and North Lakes
Parks. Projects currently under design include the Rail Trail Bridge over Loop 288, the IOOF
and Oakwood Cemetery fences, and the adult soccer fields at North Lakes Park.
Transportation Improvements (EXHIBIT 3) $27.7 million
0 Streets Reconstruction $10.0 million
The Street Reconstruction portion of the bond program is nearing completion. There were a total
of 41 street segments identified for reconstruction; we have five streets remaining to complete
the bond program (Exhibit 3). We anticipate some savings when all projects are completed. The
original plan for the streets reconstruction projects was to contract outside for the majority of the
projects. Early on in the bond program we realized that the approximate doubling of asphalt
prices that occurred in association with hurricane Katrina would cause cost overruns on these
projects. As a result staff elected to do most of the reconstruction with internal forces. Staff will
take the savings to the Citizen Oversight Committee with recommendations for additional road
work. For example: one project which has changed significantly, and is currently on hold, is the
Bonnie Brae project from Scripture to W. Oak. In 2003 when many of the CIP projects were
identified some of the large constriction projects on the west side of town were not on the radar
screen. With Rayzor Ranch expanding to the north and the new stadium and expansion of Bonnie
Brae to the south plus the extension of the north south water transmission line along Bonnie Brae
extensive reconstruction will be necessary to repair the roadway.
• Transportation $17.7 million
Hobson
$1.20 million
Brinker
$0.91 million
Mayhill
$.50 million
Shady Oaks
$35 million
Western
$3.64 million
Shady Oaks
$2.20 million
FM 1830
$0.80 million
US 377
$2.00 million
Walnut, Pecan, Austin
$2.80 million
Sidewalks
$1.10 million
Misc. Roadways
$1.10 million
Intersections Signals
$1.10 million
The Utility and CIP Engineering department (Engineering) has placed almost all of the funding
associated with this aspect of the bond program into play, including a large part of the remaining
dollars associated with Miscellaneous Sidewalks (approved by City Council on October 5, 2010
to be used for the walkways associated with the extension of Paisley Street).
1. Shady Oaks Drive and Brinker Road - The Shady Oaks Drive and Brinker Road projects
were approved as separate projects as part of the 2005 Blue Ribbon Bond election package.
The purpose of the Shady Oaks Drive project was to provide access between existing Shady
Oaks Drive extending east from Woodrow Lane to Loop 288 at Morse Street. The purpose
of the Brinker Road project was to extend existing Brinker Road north from its intersection
with Spencer Road to tie in with the new section of Shady Oaks Drive. The Brinker Road
project was also intended to provide some relief for traffic along Loop 288 during the
constriction of that particular project. Although these two roadways were approved as
separate projects in the bond election, for the purposes of design and bidding they were
treated as a single job.
As previously discussed with the Oversight Committee and the City Council, cost
considerations and the inability to negotiate right-of-way (ROW) values led to the Brinker
Road portion of the combined project not being awarded. Staff recommended bid award to
the low bidder, JRJ Paving, L.P. in the amount of $2,884,059.98 for Bid Option No. 2 (Shady
Oaks only) plus Alternative Bid No. 3 (48" steel casing pipe) to City Council on January 8,
2008. City Council approved staff s recommendation.
Shady Oaks Drive was completed in all respects in March 2009. There are some issues
associated with a failed section of the pavement adjacent to the Loop 288 intersection, and it
is apparent that this issue has been caused by a separate utility contract. Sufficient funding to
resolve this issue has been retained in the project number. All remaining bond dollars from
the Shady Oaks and Brinker projects have been reallocated as a portion of the local match
funding for the Mayhill Road widening project (also approved by the Oversight Committee
and City Council).
2. Western Boulevard - Bonds for the constriction of the Western Boulevard project were sold
in FY 2004-2005 and FY2005-2006 as part of the 2005 Blue Ribbon Bond election package.
This project was intended to provide access between US Highway 380 south to FM 1515
(Airport Road). It was also intended to provide access for the Denton Municipal Airport
when Masch Branch Road was closed as a result of runway extensions. The City received
bids on the referenced project on December 13, 2007. Western Boulevard constriction was
completed in all respects in March 2009. The roadway was actually opened to the public on
March 4, 2009. All funds allocated to the project have been expended.
3. Mayhill Road -This project was placed on hold pending confirmation on the receipt of
funding from S.H. 121 tolling proceeds (RTR funding). The funding provided in FY2004-
FY2005 ($500,000.00) was reprogrammed to the Western Boulevard Project per previous
direction by the Oversight Committee and City Council.
4. Intersection Improvements at Hobson Lane/U.S. Hwy. 377/F.M. 1830 - The constriction of
TxDOT improvements to U.S. Hwy. 377 will supplant the need for this project. The funding
provided in FY2004-FY2005 ($1.2 million) was reprogrammed into the Western Boulevard
and Shady Oaks/Brinker projects per previous direction by the Oversight Committee and
City Council. This project will be constricted by Denton County through the use of RTR
funds.
5. FM 1830 Design - TxDOT does not have a project for the widening and improvement of FM
1830 programmed into their slate of projects at the current time. Funding from Denton
County for this project was reallocated to other projects. For this reason, the bonds
associated with this project were never sold.
6. Intersection Signalization - The four signalization projects on Carroll Blvd have been
completed.
7. Miscellaneous Roadways - The miscellaneous roadway dollars were designed to allow
flexibility in the event that a critical roadway design/constriction project came up during the
CIP period. One of the larger projects included in this category is the Paisley Street
extension project recently approved by City Council at an estimated cost of approximately
$520,000. Another significant project involved improvements to Mockingbird Lane for a
total project cost of $216,000.
8. Sidewalk Installations - A number of projects including the Teasley Lane Pathway and the
Woodrow sidewalk have been completed. The anticipated remaining dollars is to be used on
the Paisley project.
FXHTBTT,
1. Public Building Improvements
2. Parks CIP Projects
3. Transportation Improvements
Respectfully submitted:
Jim Coulter
Director of Water Utilities
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AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010
DEPARTMENT: Finance
ACM: Jon Fortune 1/ 0
SUBJECT
Consider approval of an ordinance of the City of Denton, Texas amending the City's utility
credit and collection policies that are contained in the Denton Code of Ordinances, Chapter 26,
"Utilities," Sections 26-3, 26-4, 26-5, 26-6, 26-8 and 26-9; providing an open meetings clause;
providing a cumulative clause; providing a repealer; providing a severability clause; providing
an effective date (The Public Utilities Board recommends approval of this item by a vote of 5-0)
BACKGROUND
During the summer of 2008, the Customer Service department participated in the management
study conducted by Navigant Consulting. The results of the study provided an evaluation of the
department's current processes including procedures related to customer credit issuance and
revenue collection. Navigant's findings indicated that Denton's annual bad debt is high,
especially for a small utility. Contributing factors to the bad debt included a lack of effective
customer credit screening, inadequate deposit policies, and ineffective collection efforts. Based
on these findings, Navigant recommended that Utilities Customer Service revamp procedures to
reduce the City's bad debt and enhance the customer experience.
To assist with prompt implementation of these recommendations, Customer Service once again
partnered with Navigant in July 2009. The goal of this collaborative effort was to introduce a
strategy that bases collection activity on customer credit risk. By adhering to a risk based
system, Customer Service can make processes easier for good paying customers and protect the
City from bad debt associated with high risk customers. The proposed processes can be used to
guide decision making when working with new, existing, and former customers.
An essential element of the proposed process will be to ask customers to verify their identity and
participate in a credit check when requesting new service. The credit check will be a "soft"
inquiry on the customer's credit, and as such, will not negatively affect their credit rating. Based
on the results of the credit check or previous payment history with the City, Customer Service
employees will determine the appropriate deposit for each customer.
After an account is established in the customer's name, Customer Service will evaluate the
customer's payment activity on a monthly basis. These activities will be reflected via a credit
rating within the utility billing software. On-time bill payment has a positive impact on the
credit rating while poor payment habits will affect it negatively. This credit rating will then be
used as the basis for reevaluating deposit coverage and determining the timing and type of
collection action.
Agenda Information Sheet
November 16, 2010
Page 2
During the March 2, 2010 City Council meeting, Customer Service presented Council with an
overview of the aforementioned changes along with a proposal to revise the Code of Ordinances.
The proposal was originally an item on the consent agenda; however, Council recommended the
item be removed from the agenda so that staff could research 1) options available for customers
attempting to connect service and unable to pay deposits, 2) changes to due dates and collection
timelines, 3) possible increases to late fee penalties, and 4) the need for further documentation of
the City's collection processes.
The City Council expressed concern that high credit risk customers could be denied services
until deposit amounts were paid in full. It was suggested that staff investigate funds from
charitable organizations being used toward service deposits. After reviewing this suggestion
with the charitable organizations serving Denton, staff found that organizations such as
Community Services will not provide funds for delinquent fees or deposits. Other charities may
elect to provide a donation to assist with a deposit requirement; however, the donation may
depend on the availability of funds, customer income, and billing documentation.
In addition, Council asked staff to consider waiving the deposit amount if a customer agrees to a
shorter collection cycle. Doing so may allow the customer entering the utility system to receive
services without payment for up to sixty days. Additional administrative and meter reading work
will be required to effectively manage such agreements, and as a result, additional resources for
both Customer Service and the metering department would be required. Due to the debt risk and
additional resources required to implement this suggestion, staff recommends maintaining the
proposed collection timeline and the collection of service deposits prior to connection of utility
service.
In a review of Customer Service's collection action timeline, the City Council requested that
staff consider adjusting due dates and the timing of collection actions. Council mentioned that
the current due date of sixteen days may prove to be too aggressive for many commercial
customers and recommended that staff consider implementing a due date of thirty days. In order
to accommodate a separate collection cycle for commercial accounts, additional resources will
be required. Staff also reviewed credit ratings by customer type within the utility billing system
and found that commercial customers maintain a higher ratio of good credit than residential
customers. Based on these findings, it appears that most commercial customers are adhering to
the current due date.
The Council also requested that staff consider reducing the timeline's forbearance period. The
proposed timeline allows twelve days to elapse before assessing late penalties and another ten
days to elapse before terminating a customer's service for nonpayment. Staff agrees with this
suggestion; however, further changes to the collection timeline will be difficult due to the
manual nature of the meter reading and billing processes. It is also possible that changes to the
penalty schedule could result in drastic changes to customer credit ratings. Staff recommends
the implementation of the proposed timeline, and if unpaid utility debts continue to grow, the
timeline will be reevaluated.
Agenda Information Sheet
November 16, 2010
Page 3
Council members expressed concern that the current late fee charge of $10.00 may not be an
adequate penalty to encourage late paying customers to change their behavior. Staff agrees with
this observation and an increase to a $20.00 penalty for late payment is recommended. This
increase can be implemented in conjunction with the approval of the proposed ordinance
changes.
During a meeting with City Council on November 1, 2010, staff was asked to investigate the cost
for maintaining multiple collection timelines and due dates by customer type. Doing so would
require a minimum of twenty new billing cycles along with twelve additional billing and
metering employees. Implementation of such a change would exceed $268,000 in onetime costs.
This amount includes the costs associated with the purchase of workstations, vehicles, and
equipment. In addition, recurring annual costs, such as fuel, vehicle maintenance, and employee
compensation, would exceed $573,000. Based on these figures and the complexity of managing
additional billing cycles, staff recommends maintaining a single collection timeline and due date.
Council also inquired about the cumulative amount of uncollectible debt. The total amount of
debt that has been classified as uncollectible in the utility billing system is $18,258,472.01. Of
this amount, $10,642,861.39 has been recorded in the last ten fiscal years from 1999-2000
through 2009-2010. The remaining debt of $7,615,610.62 was accumulated in the preceding
twenty-five years.
In addition, Council requested information about the number of delinquent customers that
typically pay by credit card. In September 2010, staff found that 30% of the 8,268 delinquent
customers paid by credit card. An additional 56% utilized the other payment methods allowed
by the City, and the remaining 14% did not remit payment within the month. 70% of the 8,498
credit card payments in September were made by customers in good standing.
While discussing the implementation plan for assessing additional deposits, staff was asked to
consider providing customers the option to pay the deposit over a period of monthly billings.
Staff agrees with this recommendation and will allow deferment of equal deposit payments over
a three month period. During the deferment, the customer will be required to remit the
installment payment for deposit in addition to their normal utility charges by the due date
communicated on their monthly billing.
Staff was also asked to report back to the City Council in twelve months to discuss the
implementation of an escalating late fee charge and to provide an update regarding collection
performance. Staff agrees to provide the requested report and will investigate the
implementation of further late fee changes.
Agenda Information Sheet
November 16, 2010
Page 4
RECOMMENDATION
If the City Council is in agreement with the proposed strategy, staff will begin implementing the
plan as outlined in the presentation with an effective date of January 1, 2011.
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
During the summer of 2008, the City Council and Public Utilities Board reviewed the Navigant
Management Report prepared for Denton Municipal Electric.
On January 26, 2009, a Customer Service strategy was presented to the Public Utilities Board.
The Board recommended that staff proceed with the suggested strategy.
On March 10, 2009, a Customer Service strategy was presented to the City Council. The City
Council recommended that staff proceed with the suggested strategy.
On February 22, 2010, the Public Utility Board recommended implementation of the proposed
ordinance changes and requested that staff conduct further investigation regarding the continued
practice of paying interest toward customer service deposits.
On March 2, 2010, the City Council reviewed proposed ordinance changes and requested that
staff investigate recommendations regarding alternatives to service deposits, changes to due
dates and collection timelines, increases to late payment penalties, and documentation of
collection processes.
On November 1, 2010, the City Council reviewed proposed ordinance changes and staff
responses to recommendations regarding alternatives to service deposits, changes to the
collection timeline, and increases to late payment penalties.
FISCAL INFORMATION
Uncollectible utility debt has increased each of the past two fiscal years. In fiscal year 2006-
2007, uncollectible debts totaled $690,317.70. In fiscal year 2007-2008, debts increased to
$761,722.52 followed by $1,121,273.06 in fiscal year 2008-2009.
EXHIBITS
1. PowerPoint Presentation
2. Navigant Report PowerPoint Presentation
3 . Ordinance
4. Redline Version of Ordinance
5. Departmental Policies
Agenda Information Sheet
November 16, 2010
Page 5
Respectfully submitted:
Bryan Langley
Chief Financial Officer
Prepared by:
Ethan Cox
Customer Service Manager
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ORDINANCE NO. 2010-
AN ORDINANCE OF THE CITY OF DENTON, TEXAS AMENDING THE CITY'S
UTILITY CREDIT AND COLLECTION POLICIES THAT ARE CONTAINED IN THE
DENTON CODE OF ORDINANCES, CHAPTER 26, "UTILITIES," SECTIONS 26-3, 26-4,
26-5, 26-6, 26-8, AND 26-9; PROVIDING AN OPEN MEETINGS CLAUSE; PROVIDING A
CUMULATIVE CLAUSE; PROVIDING A REPEALER; PROVIDING A SEVERABILITY
CLAUSE; PROVIDING AN EFFECTIVE DATE (THE PUBLIC UTILITIES BOARD
RECOMMENDS APPROVAL OF THIS ITEM BY A VOTE OF 5 TO 0).
WHEREAS, in the summer of 2008 the Utilities Customer Service department
participated in a management study conducted by Navigant Consulting ("Navigant"). The
results of that study provided an evaluation of the Department's current processes including
procedures related to customer credit issuance and revenue collection. Navigant's findings
indicated that the City's annual bad debt is high, especially for a small utility. These findings
were due to a lack of effective customer credit screening, inadequate deposit policies, and
ineffective collection efforts. Navigant recommended that Utilities Customer Service revamp
procedures in order to reduce the City's bad debt load, as well as to enhance the utility customer
experience; and
WHEREAS, in order to implement the Navigant recommendations, Utilities Customer
Service once again partnered with Navigant in July, 2009. The goal of this collaborative effort
was to introduce a strategy that bases collection activity on consumer credit risk. By going into
a risk-based system, Utilities Customer Service can make processes easier for good paying
customers and protect the City from bad debt that is associated with high risk customers. The
processes that are a part of this ordinance can be used to guide decision making when working
with new, existing, as well as former customers; and
WHEREAS, Chapter 26 of the Denton Code of Ordinances presently addresses the
subjects of utility service deposits and the collection of accounts regarding all City utility
customers; this ordinance clearly provides amended and updated collection procedures for all
City utility customers that are beneficial to both the City and to its utility customers. This
ordinance implements credit reporting requirements for all customers as well, and states the
criteria and alternatives for establishing utility service; and
WHEREAS, the City Council of the City of Denton deems it to be in the public interest
to adopt these amendments to the Code of Ordinances as set forth herein, NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings contained in the preamble of this ordinance are incorporated
herein as if fully set forth within the body of this ordinance.
SECTION 2. The following sections of the City of Denton Code of Ordinances,
Chapter 26, "Utilities" are hereby amended to read as follows:
-1-
Refer to Exhibit "A" incorporated herewith and attached hereto, which sets forth the
provisions of Sections 26-3, 26-4, 26-5, 26-6, 26-8, and 26-9, in their entirety, as said
Sections are now amended by this ordinance.
SECTION 3. It is officially found and determined that the meeting at which this
ordinance was passed was open to the public as required by law, and that public notice of the
time, place and purpose of this meeting was given as required by law.
SECTION 4. This ordinance shall be cumulative of all other ordinances of the City of
Denton and shall not repeal any of the provisions of said ordinances except for the sections
specifically repealed by this ordinance and in those instances where the provisions of those
ordinances are in direct conflict with the provisions of this ordinance.
SECTION 5. If any section, subsection, paragraph, sentence, clause, phrase, or word in
this ordinance, or the application thereof to any person or under any circumstances is held invalid
by any court of competent jurisdiction, such holding shall not affect the validity of the remaining
portions of this ordinance, and the City Council of the City of Denton, Texas, hereby declares it
would have enacted such remaining portions despite any such invalidity.
SECTION 6. Save and except as amended hereby, all of the provisions, sections,
subsections, paragraphs, sentences, clauses, and phrases in the City Code of Ordinances shall
remain in full force and effect.
SECTION 7. This ordinance and the rates herein adopted shall become effective,
charged, and applied to all utility services rendered by the City, and shall become effective with
the first billing issued on and after January 1, 2011; and a copy of said rates and charges shall be
maintained on file in the Office of the City Secretary of the City of Denton, Texas.
PASSED AND APPROVED this the day of 12010.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By:
-2-
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
By:
EXHIBIT "A"
ARTICLE L IN GENERAL
Sec. 26-1. Assistant city manager - utilities.
(a) Definition. As used in this chapter and wherever it may appear in this Code, the
term assistant city manager - utilities or public utilities director shall mean the assistant
city manager - utilities of the utilities department.
(b) Appointment. The assistant city manager - utilities shall be appointed by the city
manager subject to confirmation by the public utilities board.
(c) Powers and duties. The assistant city manager -utilities shall have such powers and
duties as may be provided by ordinance.
(d) Mapping of systems. The assistant city manager - utilities shall prepare and maintain
complete, up-to-date maps of the electric, sanitary sewerage and water systems of the
city.
(Code 1966, § 25-1; Ord. No. 2001-200, § 1, 5-15-01)
Sec. 26-2. Right of entry.
Employees of the utilities department shall have the authority to enter any house or
premises at any reasonable time in the regular line of duty for the purpose of inspecting any
water, electric or sewer line or any water or electric meter or for the purpose of making necessary
repairs. If such entry is refused, the employee shall have recourse to every remedy provided by
law to secure entry.
(Code 1966, § 25-5)
Cross references: Inspection and abatement warrants, § 19-86 et seq.
State law references: Inspection warrants, Vernon's Ann. C.C.P. art. 18.05.
Sec. 26-3. Service deposits and alternatives.
Employees of 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.
-4-
(a) Residential customers. If a customer receiving residential service is required to
make a deposit, the deposit may be as much as an amount equal to one-sixth of the last
twelve (12) months billing at the service location or a similar location as determined by
the utility representative.
(b) Residential exemption from deposit. No service deposit will be required of an
applicant for residential utility service if the applicant can provide and qualify for one (1)
of the following:
(1) The applicant 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. The customer must pay the cost of obtaining the credit rating.
This cost will be set annually within the utility rate ordinance, but will not exceed
one hundred dollars ($100.00).
(3) Customers with little credit history or a fair credit rating may be allowed to
provide one of the following alternatives in lieu of deposit:
a. A signed letter of good standing for utility services from a former utility
company for verification within twenty (20) days of applying for service;
or
b. The applicant provides a cosigner who accepts responsibility and is
verified to have an acceptable credit rating with the city utility system, and
who is willing to be listed on the applicant's account to guarantee payment
of the applicant's utility bills. This guarantee will be in effect until the
applicant develops an acceptable credit rating and the cosigner requests
removal from the account.
For purposes of this chapter, "acceptable credit rating" shall mean a credit rating which is based
upon a commonly used formula or a formula approved by the city council.
(c) Commercial customers. In the case of commercial or industrial service, if the
applicant for service is required to make a deposit, the amount of the deposit shall be an
amount up to one-sixth of the last twelve (12) months of billing at the location where
service is requested. If no previous history is available for the location, a representative
facility similar to the type where service is requested will be used to establish the amount
of the deposit.
(d) Commercial exemption from deposit. An applicant for utility service for a
commercial or industrial entity or business may not be required to make a deposit if the
applicant:
-5-
(1) Provides the city an acceptable commercial/industrial credit rating for the last
twenty-four (24) months the customer received service from the city utility
system; or
(2) The customer receives an acceptable credit rating from a credit source
available to the city. The customer must pay the cost of obtaining the credit rating.
This cost will be set annually within the utility rate ordinance, but will not exceed
one hundred dollars ($100.00).
(3) If the credit of a commercial/industrial customer for service has not been
established satisfactorily to the city, the applicant may provide an irrevocable
letter of credit in lieu of a deposit within twenty (20) days of signing for service.
The irrevocable letter of credit must be executed by a Texas bank and must be
approved by the city manager and city attorney. The customer must maintain the
irrevocable letter of credit in effect at all times. If the customer allows the
irrevocable letter of credit to expire, the customer shall pay a deposit in the
amount provided as listed above, or the city may terminate utility service.
(Code 1966, § 25-4; Ord. No. 94-132, § I, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord. No.
2002-316, § 1, 9-17-02)
Sec. 26-4. Additional deposit required.
(a) Additional deposits. The city may require a customer to make an additional deposit
in the event that a deposit made as specified in subsection (a), (b), (c), or (d) is
subsequently determined to no longer be sufficient. The city may disconnect service if
the customer does not remit the additional deposit within fourteen (14) days of the city's
request, provided a written disconnect notice has been issued. Such disconnect notice
may be issued concurrently with the written request for the additional deposit.
A customer may be required to pay a deposit or put down an additional deposit amount if:
(1) The customer has been terminated from the receipt of utility service due to
non-payment of a utility bill; or
(2) The city has determined there is evidence of a customer tampering with the
city's meter; or
(3) The customer has an unacceptable credit rating and the city does not have in
its files a current cosigner who meets the requirements of section 26-3(a) or (b);
or
(4) The customer has been required to pay or is paying off a utility account
balance previously deemed uncollectible or is past due; or
-6-
(5) The customer's irrevocable letter of credit filed with the city in lieu of a
deposit has expired.
(b) Interest. The city shall pay interest on deposits at an annual rate established by city
council. If a refund of the deposit is made within thirty (30) days of receipt of the deposit,
no interest will be paid. If the deposit is retained more than thirty (30) days, payment of
interest shall be retroactive to the date the entire amount of deposit has been made. The
deposit shall cease to draw interest on the date it is returned or credited to the customer's
account. Payment of the interest to the customer shall be made at the time the deposit is
returned or credited to the customer's account. If the customer's account is active, the
deposit will automatically be applied to the customer's account to offset current billing.
(c) Credit checks. After making application for service, the customer service
department may at any time pursue a credit reference check. If the credit check shows
the customer does not have an acceptable credit rating, the customer will be required to
place a deposit on the account. Failure to do so will result in the discontinuance of service
with no less than two (2) days of notification given verbally or in writing, to the
prospective customer by the customer service department.
(Ord. No. 94-132, § I, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord. No. 2002-316, § 1, 9-17-
02)
Sec. 26-5. Refunds of deposits.
The city shall refund deposits to applicants and customers if one of the following events
occurs:
(1) The customer's service has been disconnected. The city shall refund the
deposit plus accrued interest less any outstanding balances. A transfer of service
from one service location to another shall not be deemed a disconnection and the
city shall not require an additional deposit unless authorized by section 26-3 or
section 26-4 hereof.
(2) When the customer has paid bills and avoided delinquent status for service
for twelve (12) consecutive residential billings without having service
disconnected for non-payment of bills, or meter tampering, and provided the
customer is not delinquent in the payment of the current bill. The city shall then,
in that event, refund the deposit (plus accrued interest) to the customer in the form
of a credit to the customer's account.
(Ord. No. 94-132, § I, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord. No. 2002-316, § 1, 9-17-
02)
Sec. 26-6. Other fees.
-7-
(a) Installation charge. A first service connection charge in an amount established by
the city council and on file in the office of the city secretary will be charged to customers
requesting electric service, where no permanent service previously existed and where a
new account number is established.
(b) Connection charge. A connection charge in an amount established by the city
council and on file in the office of the city secretary will be charged to customers
requesting water and/or electric service
(c) Delinquent service charge, reconnect charge, and deposit. If water and/or electric
utility service is processed for nonpayment, then the customer will be required to pay a
delinquent service charge or reconnect charge in an amount established by the city
council and on file in the office of the city secretary and establish and maintain a deposit
sum up to one-sixth of the last twelve (12) months' billings on billing at the location
where service is requested. If a twelve (12) month history is not available, an estimated
usage will be used to determine the deposit amount.
(d) Unauthorized usage penalty. If a customer fails to request a water and/or electric
connection within twenty-four (24) hours of occupancy in a new service location, then
the customer will be required to pay an unauthorized usage penalty in an amount
established by the city council and on file in the office of the city secretary.
(e) Meter reading charge. If a customer requests a reading of a city meter due to a
contested billing more than two (2) times in the previous twelve (12) months and if no
error is found, the customer will be charged a meter reading charge. The meter reading
charge will be in an amount established by the city council and on file in the office of the
city secretary.
(f) Meter testing charge. If a utility customer requests the testing of a city meter that
was previously tested within the past four (4) years and the meter is found to be within
accuracy standards, the customer will be charged a meter testing charge. The meter is
defined as within accuracy standards when found to be plus or minus two (2) percent or
less. This meter testing charge will be established by the city council and on file in the
office of the city secretary.
(g) Meter tampering and or damage charge. A meter tampering charge will be required
of any person that tampers with, damages, or illegally connects to any city electric, or
water, or wastewater system. The meter tampering charge will be established by the city
council and on file in the office of the city secretary.
(h) Meter inaccessibility charge. A meter inaccessibility charge will be required of any
customer that prevents the regular and routine reading or repair, maintenance or
replacement of any city electric or water meter. The meter inaccessibility charge will be
established by the city council and on file in the office of the city secretary.
-8-
(i) Returned pavment charge. If a customer has a check, money order, or bank draft that
has been dishonored by the maker's bank and returned to the city as unpaid, the customer
will be required to pay a returned payment charge in an amount established by the city
council and on file in the office of the city secretary.
0) Late pavment charge due on delinquent balances. A late payment charge in the
amount of $20.00 will be assessed on past due balances on the fifth business day
following the due date.
(k) Interest charge on past due account balances. Interest shall be assessed on any past
due account balance (excluding late payment charges) that remains unpaid prior to the
current month's billing calculation. Interest shall be assessed based on the customer's
monthly billing schedule and the due date of the customer's past due bill. The interest
charge shall be due and payable on the due date of the current month's billing. The
interest charge will be established by the city council and on file in the office of the city
secretary.
(1) Application fee. An application fee may be charged if the customer cannot provide a
satisfactory credit rating through previous service history with Denton Municipal
Utilities. The application fee will be established by the city council and will be on file in
the office of the city secretary.
(Ord. No. 94-132, § I, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord. No. 2002-316, § 1, 9-17-
02)
Sec. 26-7. Service prohibited to premises in violation of city ordinances.
No utility service of the city or connection for such service shall be furnished or provided
to any person engaged in the erection, constriction, alteration or repair of any building or
premises or any part thereof or engaged in the excavation or the laying of the foundation for any
building or premises or part thereof where any part of such building or premises is being erected,
constricted, altered or repaired in violation of any ordinance of the city.
(Code 1966, § 25-2; Ord. No. 94-132, § III, 7-19-94)
Sec. 26-8. Grounds for discontinuance of service.
(a) The assistant city manager-utilities, or his designee, shall discontinue service to any
person violating any provision of this chapter or any published rile or regulation of the
utilities department, or of the city, until such violation has been corrected.
(b) The assistant city manager-utilities, or his designee, shall discontinue service to any
person found defrauding the utilities department by tampering with any water or electric
line or meter. Service disconnected for any such reason shall not be restored until the
assistant city manager-utilities, or his designee, is satisfied that all loss to the utilities
-9-
department has either been repaid, or is financed for repayment, and that service may be
restored without undue risk of further loss through such acts or nonpayment.
(c) Subject to the approval of the city manager, the assistant city manager-utilities, or his
designee, shall discontinue service to any person found to be unreasonably wasting or
diverting electricity or water.
(d) Utility services may be terminated if payments become delinquent. The city may
terminate services at any time upon delinquent status of an account. Once services are
terminated, any deposit held by the city will be applied to the delinquent account when
the final bill is generated. If the customer wishes to reconnect services, the customer will
be required to pay a delinquent service charge or a reconnect charge and the remaining
balance of the delinquent amount. The city may refuse service and require payment in
full, based on the credit history of the customer. For continued service, the city will
require an additional deposit amount as described in 26-4.
(Code 1966, § 25-3; Ord. No. 94-132, § III, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord. No.
2002-316, § 1, 9-17-02)
Sec. 26-9. Billing and collection for services.
(a) Due date for pavment of statements. The due date for the payment of the bill for
utility services shall not be less than ten (10) business days after issuance. Payment must
be posted to the customer's account by close of business on the due date, in order to
avoid assessment of a delinquent penalty. Payments placed in the mail and showing a
postmark on the due date will not be considered as being received on the due date. In
addition payments made through alternative sources such as, telephone, remote payment
locations, drop box, or internet, will be accepted according to the terms established for
those services. These payment requirements will be made available on the customer's
utility bill, the city's website, and posted at customer access points when possible.
(b) Discontinuance of service for nonpavment. Each customer of the city's utility
system who has not paid by the due date as noted on the billing, or according to finance
agreements, is eligible for disconnect after the due date upon two (2) days notice.
(c) Notice of termination of services. A customer will be notified on his current utility
statement that his service is eligible for disconnection if payment is not received by the
terms stated on the current bill. The notice will inform the customer that he should remit
payment immediately to avoid disconnection. Should the customer contact the utility
customer service department within a five (5) day period and prior to disconnection of
utility services to present any evidence or argument concerning the statement or amount
of utility service provided by the city, the customer will be required to pay any amounts
not registered by the customer service department as under dispute by the due date. Any
disputed items must be resolved within sixty (60) days of notification to utility customer
service. The city will attempt to call the customer and provide a verbal warning of
termination of services at least two (2) days prior to actual termination.
-10-
(d) Alternatives to termination of service. A customer with a past due or delinquent
balance may avoid termination of utility service by doing one (1) of the following:
(1) Paying the total amount due by the specified due date;
(2) Requesting a payment arrangement with the utility customer service
department. The payment arrangement guidelines will be established by the city
council and on file in the office of the city secretary.
(e) Certain adjustments prohibited No adjustment will be made in any monthly bill
because of any water or electric leak or loss, unless otherwise stated in this ordinance. No
allowance shall be made on utility bills because of use of less service than the quantity set
as the basis for the minimum charge.
(f) Service meters required Each customer maintaining a separate residence, either
house or apartment, shall have a separate water meter and electric meter and a separate
service connection to the city sewer lines; provided, however, that multiple dwellings
containing less than four (4) units may be served by one (1) water and one (1) electric
meter and one (1) sewer service connection and will be billed under the residential
multiple block rate. Multiple dwellings containing four (4) or more units which do not
have separate metering and service facilities shall be classified as commercial buildings
for utility purposes and shall be billed under the applicable commercial rates.
(g) Notice of service changes required Any customer or prospective customer of the
city utility system moving into or out of a building where electric, water, sewer or solid
waste service is or will be provided, shall give a minimum of twenty-four (24) hours
notice to the customer service department prior to the proposed date of connection or
disconnection of utilities. If the customer fails to give proper notification for connection,
he will be required to pay an unauthorized usage penalty and payment for services shall
be prorated based on evidence provided by the customer or available to utility services
and the amount billed will be due and payable by the customer.
(h) Proration of utility bills. The billings for utilities consumption may be calculated on
a thirty-day basis and prorated higher or lower for longer or shorter billing periods
respectively.
(i) Proration of customer facility charge. All monthly customer facility charges
contained in this chapter shall be prorated higher or lower for billing periods longer or
shorter than thirty (30) days, respectively. In such cases, the actual number of days in the
reading period shall be divided by thirty (30) days, then multiplied by the net monthly
charge to arrive at a customer facility charge.
0) Estimated billings and billing adjustments. The city may estimate active utility
services for no more than two (2) consecutive billing periods. This estimate shall be
considered the current month billing and must be paid accordingly. The city shall also
- 11 -
have the right to provide billing adjustments, consisting of back-billing or back credits,
on prior billings for a period up to, but no greater than two (2) years. These prior period
billing adjustments must be based on actual meter readings, verifiable evidence, or
proration based on actual readings.
(k) Rejection of application for services. An application maybe rejected if utility
customer service has a record of previous past due accounts owing by the applicant
and/or any occupant therein that will receive benefit of the services provided to the
service location. The city has the option of requiring these amounts to be paid in full or
transferring the amounts to the new service account.
(Code 1966, § 25-6; Ord. No. 94-132, III, IV, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord.
No. 2002-316, § 1, 9-17-02)
Sec. 26-10. Budget billing customer option.
Any residential or local government utility customer of the city may request to be billed
for electrical, water, sewer and/or sanitation services based upon an average billing amount. The
eligibility and calculation criteria are as follows:
(1) The customer shall request budget billing in accordance with the provisions
of this section. The customer must have established residence and have a good
credit history within the past six (6) months with the city. Budget billing will not
be open for enrollment during the four (4) months preceding the settlement
month, or 12-month, of the budget billing year.
(2) The city may accept or deny the request based on the customer's credit
historv and circumstances as presented by the customer. Upon acceptance of the
request, the city will compute the budget billing amount based on the last twelve
(12) months of billing, and adjusted for any rate changes that would affect the
budget billing calculation and as described in this subsection. The customer shall
be billed this budget billing amount for the remaining months after approval of
the application. On the settlement month, or twelfth billing month, the city will
credit the customer's account for any accumulated amount in excess of the actual
twelve (12) months' consumption. If the amount is greater than two (2) average
monthly billings, the customer can request that the amounts be refunded, if
requested prior to the due date of the credit. If the amount remaining represents an
amount owed by the customer to the city, the customer shall have until the due
date of the current billing to pay the additional amount due. The customer's
account may be reviewed quarterly, and the budget billing amount may be
adjusted based upon the current billings.
(3) Monthly billing amount calculation. The city will compute the customer's
monthly budget billing amount by totaling the billings for the services for the
previous twelve (12) months. If twelve (12) months of billing history is not
available, utility customer service may estimate the billing based upon the best
-12-
available information. These budget billing averages can be adjusted to reflect any
rate changes that would likely increase or decrease the average annual billing
amount. These annual billing amounts will be divided by eleven (11) to produce
estimated usages per month for the next twelve (12) months.
(4) The city may provide budget billing for utility services based 11pon the
customer's length of residence, credit history, and upon information provided by
the customer. Upon approval, the customer's written or oral consent shall
constitute a legal agreement between the customer and the city. The customer
must comply with the terms of this section, the terms of the agreement, and the
budget billing policies of the city.
(5) Termination of budget billing services. Any late payment (payment received
after the billing due date) of any budget billing which occurs more than twice in a
twelve-month period shall be cause for discontinuation of budget billing. Any
returned check will also constitute a reason for termination of this service. Such
customer may not re-qualify for such program until the customer re-establishes at
least six (6) months of qualifying payment history. After a second removal from
the program, a customer may not re-qualify for such program until after the
expiration of one (1) year and a consecutive six (6) months of qualifying payment
history.
(Code 1966, § 25-6.1; Ord. No. 94-132, § III, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord.
No. 2002-316, § 1, 9-17-02)
Sec. 26-11. Electrical meters, electrical meter terminal boxes and supply conductors; water
meters and water distribution mains and lines.
(a) It shall be unlawful for any person, other than an officer or employee of the city
within the department of electric utilities or fire department, to knowingly or
intentionally:
(1) Remove or cause to be removed any electrical meter owned by the city from
any electrical meter terminal box;
(2) Remove or cause to be removed the cover or any other part or portion from
any such meter or terminal box or loosen or cause to be loosened any part or
portion thereof,
(3) Insert or cause to be inserted any foreign object or inject or cause to be
injected any foreign substance into any such meter or terminal box;
(4) Make or cause to be made any adjustment in the mechanism of any such
meter; or
-13-
(5) Tap onto or connect or cause to be tapped onto or connected any wire to the
supply conductor of any such terminal box.
(b) In the prosecution of any offense charged under subsection (a)(1) of this section, it
shall be a complete defense to such offense if the person charged shows to the court by
legal and competent evidence:
(1) That such meter was removed for the purpose of protecting life or preserving
property being immediately threatened by a hazard on the premises served by
such;
(2) That such meter was removed for the purpose of preventing a hazard to the
stricture served by it due to a short circuiting in the electrical conductor between
the terminal box in which such meter was housed and a main line switch or fuse
box; or
(3) That such meter was removed by a duly licensed electrician to facilitate the
repair of the defective electrical conductor or for checking the supply voltage and
at a time when an employee of the city within the department of electric utilities
was not available to remove such meter.
(c) In the event of the removal of any electrical meter by a duly licensed electrician
under the circumstances enumerated in subsection (b)(3) of this section, the fact of such
removal and the circumstances permitting the removal must be reported to the
superintendent of the electric distribution division of the department of electric utilities
by such electrician not later than one (1) hour after the commencement of the workday of
such municipal employee next following such removal.
(d) Unless written permission is first obtained from the superintendent of the water
distribution division of the department of utilities of the city, it shall be unlawful for any
person, other than an officer or employee of the city within the department of utilities, to
knowingly or intentionally:
(1) Tap onto or connect or cause to be tapped onto or connected any pipe with
any water distribution main or line owned by the city;
(2) Disconnect or cause to be disconnected any such water meter from any such
water distribution main or line owned by the city;
(3) Remove or cause to be removed the cover from any such water meter; or
(4) Disconnect or cut off the water service to a stricture, dwelling or building.
All meters, curb cocks, valves and meter boxes connected with the city water mains and service
pipes, including those furnished at the expense of the consumers or property owners, shall
remain under the direct control of the department of utilities, and it shall be unlawful for any
-14-
person other than those licensed to do plumbing or those with special permission from the city
utilities department to connect, disconnect, move or tamper with any such meter or to turn on or
off the water at the curb cock, valve or meter box in any way except with a regulation meter
brass key. No bypass or connection between the meter and the main shall be made, maintained or
permitted except upon written permission from the department of utilities.
(e) If any such water meter is found to have been removed, if the cover or any part or
portion of any such meter or terminal box is found to have been removed, if any part or
portion thereof is found to have been loosened, if any foreign object is found to have
been inserted or any foreign substance is found to have been injected into any such meter
or terminal box, if any adjustment is found to have been made in the mechanism of any
such meter, if any wire has been found to have been tapped onto or connected to the
supply conductor of any such terminal box, if any pipe is found to have been tapped onto
or connected with any such water distribution main or line, if any such water meter is
found to have been disconnected from any such water distribution main or line or if there
is the finding at any time of any fact, circumstance or condition on or about any such
electrical meter, terminal box, conductor, water meter or water distribution main or line
tending to show or evidencing that any such act has been committed or performed in
violation of any portion or provision of this section, the fact, circumstance or condition
shall be and constitute prima facie evidence and a rebuttable evidentiary presumption of
knowledge on the part of the person having subscribed for electric or water service
through any such electric or water meter or the person having the custody, control or
management of the building, room or place for which such subscription is made of the
performance or commission of any such act prohibited under the terms and provisions of
this section that such subscriber or other person performed or committed such act or
caused or occasioned the performance or commission of the act and shall bring such
subscriber or other person prima facie within the scope, meaning and penalties of this
chapter.
(Code 1966, 17-11, 25-8; Ord. No. 94-132, § III, 7-19-94)
Sees. 26-12--26-35. Reserved.
- 15 -
Exhibit 4
ARTICLE L IN GENERAL
Sec. 26-1. Assistant city manager - utilities.
(a) Definition. As used in this chapter and wherever it may appear in this Code, the
term assistant city manager - utilities or public utilities director shall mean the assistant
city manager - utilities of the utilities department.
(b) Appointment. The assistant city manager - utilities shall be appointed by the city
manager subject to confirmation by the public utilities board.
(c) Powers and duties. The assistant city manager -utilities shall have such powers and
duties as may be provided by ordinance.
(d) Mapping of systems. The assistant city manager - utilities shall prepare and maintain
complete, up-to-date maps of the electric, sanitary sewerage and water systems of the
city.
(Code 1966, § 25-1; Ord. No. 2001-200, § 1, 5-15-01)
Sec. 26-2. Right of entry.
Employees of the utilities department shall have the authority to enter any house or
premises at any reasonable time in the regular line of duty for the purpose of inspecting any
water, electric or sewer line or any water or electric meter or for the purpose of making necessary
repairs. If such entry is refused, the employee shall have recourse to every remedy provided by
law to secure entry.
(Code 1966, § 25-5)
Cross references: Inspection and abatement warrants, § 19-86 et seq.
State law references: Inspection warrants, Vernon's Ann. C.C.P. art. 18.05.
Sec. 26-3. Service deposits and alternatives.
Employees of the utilities customer sei ice department will determine the appropriate
seiA,ice 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) Residential customers. If a customer receiving residential service is required to
make a deposit I,a ~~pvs'rtrE~ isisi ~1 1f
the deposit may be as
much as an amount equal to one-sixth of the last twelve (12) months billing at the service
Exhibit 4
location or a similar location as determined by the utility representative.
'Moll-~~`
(b) Residential exemption from deposit. No service deposit will be required of an
applicant for residential utility service if the applicant can provide and qualify for one (1)
of the following:
(-3- 2) The customer receives an acceptable credit rating from a credit source
available to the city. The customer must pay the cost of obtaining the credit rating.
This cost will be set annually within the utility rate ordinance, but will not exceed
one hundred dollars ($100.00).
(3) Customers with little credit history or a fair credit rating may be allowed to
provide one of the following alternatives in lieu of deposit:
a. A si-ned letter of good standing for utility services from a former utility
company for verification within twenty (20) days of applying for service,
or
For purposes of this chapter, "acceptable credit rating" shall mean a credit rating which is based
upon a commonly used formula or a formula approved by the city council.
(c) Commercial customers. In the case of commercial or industrial service, if the
applicant for service is required to make a deposit, the amount of the deposit shall be a
~ an amount eqthal up to one-sixth of the
last twelve (12) months of billing at the location where service is requested, w e, .
g f If no previous history is available for the location, a representative facility similar
to the type where service is requested will be used to establish the amount of the deposit.
Exhibit 4
(d) Commercial exemption from deposit. An applicant for utility service for a
commercial or industrial entity or business may not be required to make a deposit if the
applicant:
(1) Provides the city an acceptable commercial/industrial credit rating for the last
twenty-four (24) months the customer received service from the city utility
Fe___
(2) The customer receives an acceptable credit rating from a credit source
available to the city. The customer must pay the cost of obtaining the credit rating.
This cost will be set annually within the utility rate ordinance, but will not exceed
one hundred dollars ($100.00).
(223) If the credit of a commercial/industrial customer for service has not been
established satisfactorily to the city, the applicant may provide an irrevocable
letter of credit in lieu of a deposit within twenty (20) days of signing for service.
The irrevocable letter of credit must be executed by a Texas bank
of and must be approved by the city manager and city attorney. The
customer must maintain the irrevocable letter of credit in effect at all times. If the
customer allows the irrevocable letter of credit to expire, the customer shall pay a
deposit in the amount provided as listed above, or the city may terminate utility
service.
(Code 1966, § 25-4; Ord. No. 94-132, § I, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord. No.
2002-316, § 1, 9-17-02)
Sec. 26-4. Additional deposit required.
(a) Additional deposits. The city may require a customer to make an additional deposit
in the event that a deposit made as specified in subsection (a), (b), (c), or (d) is
subsequently determined to no longer be sufficient.°~
4ee
The city may disconnect service if the customer does not remit the
additional deposit within fourteen (14) days of the city's request, provided a written
disconnect notice has been issued. Such disconnect notice may be issued
concurrently with the written request for the additional deposit.
A customer may be required to pay a deposit or put down an additional deposit amount if:
Exhibit 4
(1) The customer has been terminated from the receipt of utility service due to
non-payment of a utility bill; or
(2) The city has determined there is evidence of a customer tampering with the
city's meter; or
(3) The customer has an unacceptable credit rating and the city does not have in
its files a current cosigner who meets the requirements of section 26-3(a) or (b);
or
(4) The customer has been required to pay or is paying off a utility account
balance previously deemed uncollectible or is past due; or
(45) The customer's irrevocable letter of credit filed with the city in lieu of a
deposit has expired.
(b) Interest. The city shall pay interest on deposits at an annual rate established by city
council. If a refund of the deposit is made within thirty (30) days of receipt of the deposit,
no interest will be paid. If the deposit is retained more than thirty (30) days, payment of
interest shall be retroactive to the date the entire amount of deposit has been made. The
deposit shall cease to draw interest on the date it is returned or credited to the customer's
account. Payment of the interest to the customer shall be made at the time the deposit is
returned or credited to the customer's account. If the customer's account is active, the
deposit will automatically be applied to the customer's account to offset current billing.
-4 r-c. -s~.ae-eey~ •-4't~.s- 4I-. ~k-'4'rc.+ r-c,n4ax- 4 i~.y ,ti -._4I-. ,tik-'4I-. c, y I el 'y~
4I'' -s-&H
~rir°~-cii°~~a°rr~°r~°r~
c~°~c~ee
,
(c) Credit checks. After making application for service, the customer service
department may at any time pursue a credit reference check. l+ e~~~~"
If the credit check shows the customer does not
have an acceptable credit rating, the customer will be required
place a deposit on the account. Failure to do so will result in the discontinuance of service
with no less than two (2) days of notification given verbally or in writing, to the
prospective customer by the customer service department.
(Ord. No. 94-132, § I, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord. No. 2002-316, § 1, 9-17-
02)
See. 26-5. Refunds of deposits.
The city shall refund deposits to applicants and customers if one of the following events
occurs:
Exhibit 4
(1) The customer's service has been disconnected. The city shall refund the
deposit plus accrued interest less any outstanding balances. A transfer of service
from one service location to another shall not be deemed a disconnection and the
city shall not require an additional deposit unless authorized by section 26-3 or
section 26-4 hereof.
(Ord. No. 94-132, § I, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord. No. 2002-316, § 1, 9-17-
02)
Sec. 26-6. Other fees.
(a) Installation charge. A first service connection charge in an amount established by
the city council and on file in the office of the city secretary will be charged to customers
requesting electric service, where no permanent service previously existed and where a
new account number is established.
(b) Connection charge. A connection charge in an amount established by the city
council and on file in the office of the city secretary will be charged to customers
requesting water and/or electric service
(c) Delinquent service charge, reconnect charge, and deposit. If water and/or electric
utility service is processed for nonpayment, then the customer will be required to pay a
delinquent service charge or reconnect charge in an amount established by the city
council and on file in the office of the city secretary and establish and maintain a deposit
sum up to one-sixth of the last twelve (12) months' billings on billing
at the location where service is requested. If a twelve (12) month history is not available,
an estimated usage will be used to f R determine the deposit amount.
(d) Unauthorized nsagc penalty. If a customer fails to request a water and/or electric
connection within twenty-four (24) hours of occupancy in a new service location, then
the customer will be required to pay an unauthorized usage penalty in an amount
established by the city council and on file in the office of the city secretary.
(e) Meter reading charge. If a customer requests a reading of a city meter due to a
contested billing more than two (2) times in the previous twelve (12) months and if no
error is found, the customer will be charged a meter reading charge. The meter reading
Exhibit 4
charge will be in an amount established by the city council and on file in the office of the
city secretary.
(f) Meter testing charge. If a utility customer requests the testing of a city meter that
was previously tested within the past four (4) years and the meter is found to be within
accuracy standards, the customer will be charged a meter testing charge. The meter is
defined as within accuracy standards when found to be plus or minus two (2) percent or
less. This meter testing charge will be established by the city council and on file in the
office of the city secretary.
(g) Meter tampering and or damage charge. A meter tampering charge will be required
of any person that tampers with, damages, or illegally connects to any city electric, or
water, or wastewater system. The meter tampering charge will be established by the city
council and on file in the office of the city secretary.
(h) Meter inaccessibility charge. A meter inaccessibility charge will be required of any
customer that prevents the regular and routine reading or repair, maintenance or
replacement of any city electric or water meter. The meter inaccessibility charge will be
established by the city council and on file in the office of the city secretary.
(i) Returned pavment charge. If a customer has a check, money order, or bank draft that
has been dishonored by the maker's bank and returned to the city as unpaid, the customer
will be required to pay a returned payment charge in an amount established by the city
council and on file in the office of the city secretary.
0) Late pavment charge due on delinquent balances. A late payment charge in the
amount of $20.00 will be assessed on past due balances on the fifth business day
following the due date.
(k) Interest charge on past due account balances. Interest shall be assessed on any past
due account balance (excluding late payment charges) that remains unpaid prior to the
current month's billing calculation. Interest shall be assessed based on the customer's
monthly billing schedule and the due date of the customer's past due bill. The interest
charge shall be due and payable on the due date of the current month's billing. The
interest charge will be established by the city council and on file in the office of the city
secretary.
Exhibit 4
(Ord. No. 94-132, § I, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord. No. 2002-316, § 1, 9-17-
02)
Sec. 26-7. Service prohibited to premises in violation of city ordinances.
No utility service of the city or connection for such service shall be furnished or provided
to any person engaged in the erection, constriction, alteration or repair of any building or
premises or any part thereof or engaged in the excavation or the laying of the foundation for any
building or premises or part thereof where any part of such building or premises is being erected,
constricted, altered or repaired in violation of any ordinance of the city.
(Code 1966, § 25-2; Ord. No. 94-132, § III, 7-19-94)
Sec. 26-8. Grounds for discontinuance of service.
(a) The assistant city manager-utilities, or his designee, shall discontinue service to any
person violating any provision of this chapter or any published rile or regulation of the
utilities department, or of the city, until such violation has been corrected.
(b) The assistant city manager-utilities, or his designee, shall discontinue service to any
person found defrauding the utilities department by tampering with any water or electric
line or meter. Service disconnected for any such reason shall not be restored until the
assistant city manager-utilities, or his designee, is satisfied that all loss to the utilities
department has either been repaid, or is financed for repayment, and that service may be
restored without undue risk of further loss through such acts or nonpayment.
(c) Subject to the approval of the city manager, the assistant city manager-
utilities, or his designee, shall discontinue service to any person found to be unreasonably
wasting or diverting electricity or water.
(d) Utility services may be terminated if payments become delinquent. The city may
terminate services at any time upon delinquent status of an account. Once services are
terminated, any deposit held by the city will be applied to the delinquent account when
the feel bill is generated. If the customer wishes to reconnect services, the customer will
be required to pay a delinquent service charge or a reconnect charge and the remaining
balance of the delinquent amount. °gnr4 -w a 4 fee 7 The city
may refuse service and require payment in full, based on the credit history of the
customer. For continued service, the city will require an additional deposit amount as
described in 26-4.
(Code 1966, § 25-3; Ord. No. 94-132, § III, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord. No.
2002-316, § 1, 9-17-02)
Sec. 26-9. Billing and collection for services.
Exhibit 4
(a) Dne date for pavment of statements. The due date for the payment of the bill for
utility services shall not be less than ten (10) business days after issuance. Payment must
be posted to the customer's account
by close of business on the due date, in order to avoid assessment of a delinquent penalty.
Payments placed in the mail and showing a postmark on the due date will not be
considered as being received on the due date. In addition payments made through
alternative sources such as, telephone, remote payment locations, drop box, or internet,
will be accepted according to the terms established for those services. These payment
requirements will be
made available on the customer's utility bill, the city's website, and posted at
customer access points when possible.
(b) Discontinuance of service for nonpavment. Each customer of the city's utility
system who has not paid by the due date as noted on the billing, or according to finance
agreements, is eligible for disconnect after the due date ' s- ffetif°ea4e upon
two (2) days notice.
(c) Notice of termination of services. A customer will be notified on his current utility
statement that his service is eligible for disconnection if payment is not received by the
terms stated on the current bill. The notice will inform the customer that he should remit
payment immediately to avoid disconnection, Should the customer contact the utility
customer service department within toe-te" 4 t nb W4mw s, a live (5) day period and prior
to disconnection of utility services to present any evidence or argument concerning the
statement or amount of utility service provided by the city, the customer will be required
to pay any amounts not registered by the customer service department as under dispute by
the due date. Any disputed items must be resolved within sixty (60) days of notification
to utility customer service. The city will attempt to call the customer and provide a verbal
warning of termination of services at least two (2) days prior to actual termination.
(d) Alternatives to termination of service. A customer with a past due or delinquent
balance may avoid termination of utility service by doing one (1) of the following:
(1) Paying the total amount due by the specified due date;
(2) Requesting a payment arrangement with the utility customer service
department, The payment arrangement guidelines will be established by the city
council and on file in the office of the city secretary.
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(e) Certain adjustments prohibited No adjustment will be made in any monthly bill
because of any water or electric leak or loss, unless otherwise stated in this ordinance. No
allowance shall be made on utility bills because of use of less service than the quantity set
as the basis for the minimum charge.
(f) Service meters required Each customer maintaining a separate residence, either
house or apartment, shall have a separate water meter and electric meter and a separate
service connection to the city sewer lines; provided, however, that multiple dwellings
containing less than four (4) units may be served by one (1) water and one (1) electric
meter and one (1) sewer service connection and will be billed under the residential
multiple block rate. Multiple dwellings containing four (4) or more units which do not
have separate metering and service facilities shall be classified as commercial buildings
for utility purposes and shall be billed under the applicable commercial rates.
(g) Notice of service changes required Any customer or prospective customer of the
city utility system moving into or out of a building where electric, water, sewer or solid
waste service is or will be provided, shall give a minimum of twenty-four (24) hours
notice to the customer service department prior to the proposed date of connection or
disconnection of utilities. If the customer fails to give proper notification for connection,
he will be required to pay an unauthorized usage penalty and payment for services shall
be prorated based on evidence provided by the customer or available to utility services
and the amount billed will be due and payable by the customer.
(h) Proration of utility bills. The billings for utilities consumption may be calculated on
a thirty-day basis and prorated higher or lower for longer or shorter billing periods
respectively.
Exhibit 4
(i) Proration of customer facility charge. All monthly customer facility charges
contained in this chapter shall be prorated higher or lower for billing periods longer or
shorter than thirty (30) days, respectively. In such cases, the actual number of days in the
reading period shall be divided by thirty (30) days, then multiplied by the net monthly
charge to arrive at a customer facility charge.
0) Estimated billings and billing adjustments. The city may estimate active utility
services for no more than two (2) consecutive billing periods. This estimate shall be
considered the current month billing and must be paid accordingly. The city shall also
have the right to provide billing adjustments, consisting of back-billing or back credits,
on prior billings for a period up to, but no greater than two (2) years. These prior period
billing adjustments must be based on actual meter readings, verifiable evidence, or
proration based on actual readings.
(k) Rejection of application for services. An application maybe rejected if utility
customer service has a record of previous past due accounts owing by the applicant
and/or any occupant therein that will receive benefit of the services provided to the
service location. The city has the option of requiring these amounts to be paid in full or
transferring the amounts to the new service account.
l-le E
rta++e rt, as '4I+c, e -z.®a-pia-r e--zr. ~4, at to ed ,..i7E~-E a tlzrn ( _~2lii°ro°nF.ri~.
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(Code 1966, § 25-6; Ord. No. 94-132, III, IV, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord.
No. 2002-316, § 1, 9-17-02)
Sec. 26-10. Budget billing customer option.
Any residential or local government utility customer of the city may request to be billed
for electrical, water, sewer and/or sanitation services based upon an average billing amount. The
eligibility and calculation criteria are as follows:
(1) The customer shall request budget billing in accordance with the provisions
of this section. The customer must have established residence and have a good
credit history within the past six (6) months with the city. Budget billing will not
be open for enrollment during the four (4) months preceding the settlement
month, or 12-month, of the budget billing year.
(2) The city may accept or deny the request based on the customer's credit
historv and circumstances as presented by the customer. Upon acceptance of the
request, the city will compute the budget billing amount based on the last twelve
(12) months of billing, and adjusted for any rate changes that would affect the
budget billing calculation and as described in this subsection. The customer shall
be billed this budget billing amount for the remaining months after approval of
the application. On the settlement month, or twelfth billing month, the city will
credit the customer's account for any accumulated amount in excess of the actual
twelve (12) months' consumption. If the amount is greater than two (2) average
monthly billings, the customer can request that the amounts be refunded, if
Exhibit 4
requested prior to the due date of the credit. If the amount remaining represents an
amount owed by the customer to the city, the customer shall have until the due
date of the current billing to pay the additional amount due. The customer's
account may be reviewed quarterly, and the budget billing amount may be
adjusted based upon the current billings.
(3) Monthly billing amount calculation. The city will compute the customer's
monthly budget billing amount by totaling the billings for the services for the
previous twelve (12) months. If twelve (12) months of billing history is not
available, utility customer service may estimate the billing based upon the best
available information. These budget billing averages can be adjusted to reflect any
rate changes that would likely increase or decrease the average annual billing
amount. These annual billing amounts will be divided by eleven (11) to produce
estimated usages per month for the next twelve (12) months.
(4) The city may provide budget billing for utility services based upon the
customer's length of residence, credit history, and upon information provided by
the customer. Upon approval, the customer's written or oral consent shall
constitute a legal agreement between the customer and the city. The customer
must comply with the terms of this section, the terms of the agreement, and the
budget billing policies of the city.
(5) Termination of budget billing services. Any late payment (payment received
after the billing due date) of any budget billing which occurs more than twice in a
twelve-month period shall be cause for discontinuation of budget billing. Any
returned check will also constitute a reason for termination of this service. Such
customer may not re-qualify for such program until the customer re-establishes at
least six (6) months of qualifying payment history. After a second removal from
the program, a customer may not re-qualify for such program until after the
expiration of one (1) year and a consecutive six (6) months of qualifying payment
history.
(Code 1966, § 25-6.1; Ord. No. 94-132, § III, 7-19-94; Ord. No. 2001-200, § 1, 5-15-01; Ord.
No. 2002-316, § 1, 9-17-02)
Sec. 26-11. Electrical meters, electrical meter terminal boxes and supply conductors; water
meters and water distribution mains and lines.
(a) It shall be unlawful for any person, other than an officer or employee of the city
within the department of electric utilities or fire department, to knowingly or
intentionally:
(1) Remove or cause to be removed any electrical meter owned by the city from
any electrical meter terminal box;
Exhibit 4
(2) Remove or cause to be removed the cover or any other part or portion from
any such meter or terminal box or loosen or cause to be loosened any part or
portion thereof,
(3) Insert or cause to be inserted any foreign object or inject or cause to be
injected any foreign substance into any such meter or terminal box;
(4) Make or cause to be made any adjustment in the mechanism of any such
meter; or
(5) Tap onto or connect or cause to be tapped onto or connected any wire to the
supply conductor of any such terminal box.
(b) In the prosecution of any offense charged under subsection (a)(1) of this section, it
shall be a complete defense to such offense if the person charged shows to the court by
legal and competent evidence:
(1) That such meter was removed for the purpose of protecting life or preserving
property being immediately threatened by a hazard on the premises served by
such;
(2) That such meter was removed for the purpose of preventing a hazard to the
stricture served by it due to a short circuiting in the electrical conductor between
the terminal box in which such meter was housed and a main line switch or fuse
box; or
(3) That such meter was removed by a duly licensed electrician to facilitate the
repair of the defective electrical conductor or for checking the supply voltage and
at a time when an employee of the city within the department of electric utilities
was not available to remove such meter.
(c) In the event of the removal of any electrical meter by a duly licensed electrician
under the circumstances enumerated in subsection (b)(3) of this section, the fact of such
removal and the circumstances permitting the removal must be reported to the
superintendent of the electric distribution division of the department of electric utilities
by such electrician not later than one (1) hour after the commencement of the workday of
such municipal employee next following such removal.
(d) Unless written permission is first obtained from the superintendent of the water
distribution division of the department of utilities of the city, it shall be unlawful for any
person, other than an officer or employee of the city within the department of utilities, to
knowingly or intentionally:
(1) Tap onto or connect or cause to be tapped onto or connected any pipe with
any water distribution main or line owned by the city;
Exhibit 4
(2) Disconnect or cause to be disconnected any such water meter from any such
water distribution main or line owned by the city;
(3) Remove or cause to be removed the cover from any such water meter; or
(4) Disconnect or cut off the water service to a stricture, dwelling or building.
All meters, curb cocks, valves and meter boxes connected with the city water mains and service
pipes, including those furnished at the expense of the consumers or property owners, shall
remain under the direct control of the department of utilities, and it shall be unlawful for any
person other than those licensed to do plumbing or those with special permission from the city
utilities department to connect, disconnect, move or tamper with any such meter or to turn on or
off the water at the curb cock, valve or meter box in any way except with a regulation meter
brass key. No bypass or connection between the meter and the main shall be made, maintained or
permitted except upon written permission from the department of utilities.
(e) If any such water meter is found to have been removed, if the cover or any part or
portion of any such meter or terminal box is found to have been removed, if any part or
portion thereof is found to have been loosened, if any foreign object is found to have
been inserted or any foreign substance is found to have been injected into any such meter
or terminal box, if any adjustment is found to have been made in the mechanism of any
such meter, if any wire has been found to have been tapped onto or connected to the
supply conductor of any such terminal box, if any pipe is found to have been tapped onto
or connected with any such water distribution main or line, if any such water meter is
found to have been disconnected from any such water distribution main or line or if there
is the finding at any time of any fact, circumstance or condition on or about any such
electrical meter, terminal box, conductor, water meter or water distribution main or line
tending to show or evidencing that any such act has been committed or performed in
violation of any portion or provision of this section, the fact, circumstance or condition
shall be and constitute prima facie evidence and a rebuttable evidentiary presumption of
knowledge on the part of the person having subscribed for electric or water service
through any such electric or water meter or the person having the custody, control or
management of the building, room or place for which such subscription is made of the
performance or commission of any such act prohibited under the terms and provisions of
this section that such subscriber or other person performed or committed such act or
caused or occasioned the performance or commission of the act and shall bring such
subscriber or other person prima facie within the scope, meaning and penalties of this
chapter.
(Code 1966, 17-11, 25-8; Ord. No. 94-132, § III, 7-19-94)
Sees. 26-12--26-35. Reserved.
Exhibit 5
CITY OF DENTON
POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE
PAGE 1 OF 2
SECTION:
REFERENCE NT JMMER
SUBJECT:
INITIAL EFFECTIVE DATE:
TITLE:
LAST REVISION DATE:
POLICY STATEMENT
The City of Denton determines credit ratings by reviewing customer activity within the city utility system
or by obtaining a credit report from a reliable external credit source. The customer's credit rating is used
to determine deposit requirements and guide decision making when executing collection action.
NEW UTILITY CUSTOMERS
Utility Customer Service will utilize Online Utility Exchange to obtain credit reports and screen for
identity theft.
Residential utility customers applying for service for the first time with Denton Municipal Utilities will be
asked to provide their Social Security Number. Commercial utility customers will be asked to provide
their tax ID number. Utility Customer Service employees will enter this information into Online Utility
Exchange to verify their identity and review their credit report. Residential applicants will be assessed a
$3.00 application fee and commercial applicants will be assessed a $16.00 application fee.
The credit report will determine if a customer has a good, fair, high risk, or insufficient credit rating.
Based on these results, Customer Service employees will inform the customer of their deposit
requirements to obtain utility service. The deposit requirements and credit score by rating are listed
below:
Residential Credit Rating Based on Credit Repoirt
Customer Rating
Credit Score
Required Deposit
Good
>690
None
Fair
640-689
1/12th annual billing
High Risk
<639
1/6th annual billing
Insufficient Credit
N/A
1/6th annual billing
CUSTOMER SERVICE POLICY 100.01
Exhibit 5
PAGE 2 OF 2
POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE (Continued)
TITLE: EQUAL EMPLOYMENT OPPORTUNITY REFERENCE NTTMBER:
100.01
Commercial Credit Ratin Based on Experian Business Intelliscore
Customer Rating
Credit Score
Required Deposit
Good
>77.47
None
Fair
60.49-77.46
1/12th annual billing
High Risk
<60.48
1/6th annual billing
Insufficient Credit
N/A
1/6th annual billing
EXISTING UTILITY CUSTOMERS
Customers that receive service from Denton Municipal Utilities will be asked to adhere to the due date
communicated on their utility bill. If a customer fails to provide payment by that date, negative credit events
can occur. These events can include late fee charges, disconnection notices, termination of utility service, or
referral to an outside collection agency. Each negative credit event is tracked within the billing system for a
rolling twelve month period. Deposit and collection decisions for active customers will be based on the
accumulation and severity of credit events.
HR POLICY":' 100.01
Exhibit 5
CITY OF DENTON
POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE
PAGE 1 OF 1
SECTION:
REFERENCE NT JMMER
SUBJECT:
INITIAL EFFECTIVE DATE:
TITLE:
LAST REVISION DATE:
POLICY STATEMENT
The City of Denton establishes utility bill due dates to be no less than ten (10) business days after the
bill's issuance. Each customer of the city's utility system who has not paid by the due date as noted on
the billing is eligible for disconnect after the due date upon two (2) days notice. A customer will be
notified on his current utility statement that his service is eligible for disconnection if payment is not
received by the terms stated on the current bill. The notice will inform the customer that he should remit
payment immediately to avoid disconnection.
ALTERNATIVES TO TERMINATION OF SERVICE
Prior to disconnection, a customer with a past due or delinquent balance may avoid termination of utility
service by doing one (1) of the following:
1) Paying the total amount due by the specified due date;
2) Requesting a payment arrangement with the utility customer service department that will
allow five (5) additional days beyond the scheduled disconnection date to make payment.
A customer may apply for a payment arrangement no more than once every six (6) months.
3) Arranging with the utility customer service department for a short-term payment
agreement that would require down payment of at least fifty (50) percent of the
outstanding bill and payment of the remaining amount in no more than three (3)
consecutive equal monthly payments. A customer may apply for a short-term payment
agreement no more than once every six (6) months.
CUSTOMER SERVICE POLICY 100.01
AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010
DEPARTMENT: Police Department/Fire Department
f
ACM: Fred Greene
SUBJECT
Consider approval of an Ordinance of the City of Denton, Texas, amending Ordinance
No. 2009-236 prescribing the number of positions in each classification of Police Officer;
prescribing the number of positions in each classification of Fire Fighter; providing a
savings clause; providing a severability clause; and declaring an effective date.
BACKGROUND
Civil Service law, Texas Local Government Code, Chapter 143, requires governing
bodies of all jurisdictions with Civil Service employees to officially authorize their exact
number of Civil Service employees. Therefore, staff requests the City Council now
authorize the current number of Civil Service positions for the Police Department and the
Fire Department as budgeted for FY 2010-11 and detailed below.
Police Department:
The Police Department had no change in the authorized number of positions.
CLASSIFICATION
FY 2009-2010
NUMBERS
FY 2010-2011
NUMBERS
Chief of Police
1
1
Captain
3
3
Lieutenant
7
7
Sergeant
16
16
Police Officer (and Recruits)
128
128
TOTALS
155
155
Fire Department:
The Fire Department froze one Civil Service Captain's position in the FY2010-11 budget
reducing the authorized number of positions from 158 to 157. This was an
Administrative Captain's position and does not impact the operations or daily staffing of
the Department.
CLASSIFICATION
FY2009-2010
NUMBERS
FY2010-2011
NUMBERS
Fire Chief
1
1
Deputy Fire Chief
1
1
Fire Marshal
1
1
Battalion Chief-Operations
6
6
Assistant Fire Marshal
1
1
Deputy Fire Marshal (vacant)
0
0
Emergency Management Program Manager
1
1
Fire Recruitment Management Analyst
1
1
Captain
26
25
Fire Protection Engineer Associate
1
1
Fire Protection Specialist (vacant)
0
0
Driver
39
39
Fire Inspector Specialist I
4
4
Fire Inspector Specialist II (vacant)
0
0
Firefighter (and Recruits)
76
76
TOTALS
158
157
FISCAL IMPACT
There will be no additional fiscal impact due to the fact that all authorized positions have
been funded in the FY 2010-2011 budget.
If you have any questions, please call Police Chief Roy Minter or Fire Chief Ross
Chadwick.
Prepared by:
Ross Chadwick
Fire Department
Respectfully submitted,
L~r
Fred Greene
Assistant City Manager
Roy W. Minter, Jr.
Police Department
2
SALega1l0ur Documentsl0rdinances\101position ordinance. doc
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, REPEALING ORDINANCE NO.
2009-236, PRESCRIBING THE NUMBER OF POSITIONS IN EACH CLASSIFICATION OF
POLICE OFFICER; PRESCRIBING THE NUMBER OF POSITIONS IN EACH
CLASSIFICATION OF FIRE FIGHTER; PROVIDING A REPEALER CLAUSE; AND
DECLARING AN EFFECTIVE DATE.
WHEREAS, on September 22 2009, the City Council passed Ordinance No. 2009-236,
adopting and approving a schedule of Authorized Positions which relates to compensation and
classification of police officers and fire fighters; and
WHEREAS, since the passage of Ordinance No. 2009-236, the Police Department and
Fire Department have determined that this ordinance needs to be amended to more correctly
reflect the total number of Police Department and Fire Department positions; NOW,
THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Council hereby adopts and approves a schedule prescribing the
number of positions for each classification of police officer and fire fighter in the City of Denton,
attached hereto and incorporated by reference herein as Exhibit "A."
SECTION 2. Ordinance No. 2009-236 is hereby repealed.
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of , 2010.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
sAlegallour documentslordinances1101position ordinance.doc
EXHIBIT "A"
Fire Department:
CLASSIFICATION
FY2010-2011
NUMBERS
Fire Chief
1
Deputy Fire Chief
i
Fire Marshal
1
Battalion Chief-Operations
6
Assistant Fire Marshal
1
Deputy Fire Marshal (vacant)
0
Emergency Management Program Manager
1
Fire Recruitment Management Analyst
1
Captain
25
Fire Protection Engineer Associate
1
Fire Protection Specialist (vacant)
0
Driver
39
Fire Inspector Specialist I
4
Fire Inspector Specialist 11 (vacant)
0
Firefighter (and Recruits)
76
TOTALS
157
Police Department.,
CLASSIFICATION
2010/2011
NUMBERS
Chief of Police
1
Captain
3
Lieutenant
7
Sergeant
16
Police Officer (and Recruits)
128
TOTALS
155
Page 2
salegallour documentslmiscellaneous110lais-gudI0000-atmos pipeline.doc
AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010
DEPARTMENT: Legal Department
CM/DCM/ACM: John Knight, Deputy City Attorney
SUBJECT: Consider approval of a resolution of the City Council of the City of Denton, Texas
(City), authorizing the intervention at the Railroad Commission of Texas concerning the filing
for an increase in rates by Atmos Pipeline - Texas; requiring Atmos Pipeline to reimburse
reasonable rate case expenses; authorizing the retention of counsel and rate consultants; finding
that the meeting at which this resolution was approved complied with the open meetings act;
making such other findings and other provisions related to the subject.
BACKGROUND:
Atmos Pipeline - Texas (APT) filed a request with Railroad Commission of Texas on September
17, 2010 to increase wholesale rates by approximately $38.9 million for its city-gate services
(CGS) and its pipeline-transportation (PT) services.
Because APT proposes to reduce the rates to provide service to the industrial pipeline-
transportation customers, rates APT charges to Atmos Energy Corporation - Mid-Tex Division,
will increase by about $43 million. These increases will in turn be passed on to Atmos-Mid-Tex
Division's retail customers.
APT's application raises numerous issues regarding its proposed increase, including the
following:
• The amount of the increase requested and the allocation of an increase to Atmos - Mid
Tex but a reduction to the industrial PT customers.
• A return on equity of 12.75%.
• Approval of the Company's $482 million "GRIP" investments from January 2003
through March 2010.
• Several accounting adjustments in areas that have been controversial in Atmos Mid-Tex'
cases (including incentive compensation plans, labor costs, deferred taxes, franchise
taxes).
• Affiliate transactions:
o How are customers and assets transferred between APT and Atmos Mid-Tex?
o Are APT competitive transportation prices fairly negotiated for Atmos Energy
Marketing customers within bundled gas supply deals?
o Blue Flame captive insurance affiliate premiums are excessive, relative to the
small risk layer insured.
APT's new depreciation rate study.
sAegaNur documents)miscellaneous\10\6s-gud10000-atmos pipeline.doc
RATE CASE EXPENSES:
Pursuant to the provisions of Section 103.022 of the Texas Utilities Code cities are entitled to
have their reasonable rate case expenses reimbursed.
RECOMMENDATION:
It is recommended that the City intervene in the proceeding at the Railroad Commission to
represent the City's interests in that proceeding and in any related proceedings.
Respectfully submitted,
hn Knight
2
sAegahour documentsVesolutions1101utility atmos intervene gud 10000 2010.docx
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS (CITY),
AUTHORIZING THE INTERVENTION AT THE RAILROAD COMMISSION OF TEXAS
CONCERNING THE FILING FOR AN INCREASE IN RATES BY ATMOS PIPELINE -
TEXAS; REQUIRING ATMOS PIPELINE TO REIMBURSE REASONABLE RATE CASE
EXPENSES; AUTHORIZING THE RETENTION OF COUNSEL AND RATE
CONSULTANTS; FINDING THAT THE MEETING AT WI41CH THIS RESOLUTION WAS
APPROVED COMPLIED WITH THE OPEN MEETINGS ACT; MAKING SUCH OTHER
FINDINGS AND OTHER PROVISIONS RELATED TO THE SUBJECT; AND PROVIDING
FOR AN EFFECTIVE DATE.
WHEREAS, on or about September 17, 2010, Atmos Pipeline - Texas (APT or
Company), a division of Atmos Energy Corporation, filed with the Railroad Commission of
Texas ("RCT") a request to increase its city gate service (CGS) rates and its pipeline
transportation (PT) rates; and
WHEREAS, the APT's request will increase revenues by approximately $389 million
but because of the manner in which APT proposes to recover the increase from its wholesale
customers, rates APT charges to Atmos Energy Corporation - Mid-Tex Division, will increase
by about $43 million, which represents an increase of approximately 41.2% in the CGS rate,
which will ultimately be recovered from retail customers; and
WHEREAS, APT is requesting a return on equity of 12.75%, which is materially higher
than any utility has requested or that the RCT has approved; and
WHEREAS, APT seeks formal approval of certain investments made under the Gas
Utility Regulatory Act (GURA), § 104.301, often referred to as the "GRIP Statute," in the
amount of about $482 million for expenditures made during the period of January 2003 through
March 2010; and
WHEREAS, several accounting adjustments during that time period related to APT's
operation and maintenance expenses that APT proposes, require detailed examination; and
WHEREAS, APT is part of a larger corporation, which raises numerous issues regarding
APT's affiliate transactions; and
WHEREAS, utility law is a complex area of law requiring specialized expertise in the
examination of APT's books and records; and
WHEREAS, given that APT has proposed an October 22, 2010 effective date for this
increase it is important to act promptly to intervene at the Railroad Commission of Texas; and
WHEREAS, the City has participated as a member of a coalition of cities known as the
Atmos Texas Municipalities (ATM) in matters regarding Atmos Mid-Texas and has benefitted
from its participation and membership in such coalition; NOW, THEREFORE,
salegatlour documentslresolutions1101utility atmos intervene gud 10000 2010.docx
THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES:
SECTION 1. That the statements and findings set out in the preamble to this resolution
are hereby in all things approved and adopted.
SECTION 2. That subject to the right to terminate employment at any time, the City
employs the Herrera & Boyle law firm to represent the City in Railroad Commission GUD
Docket No. 10000 and with regard to any administrative proceedings or court actions related
thereto, and the City authorizes counsel to employ, with the approval of the ATM Steering
Committee, such rate experts as are necessary to assist them with regard to the review,
investigation and possible filing of testimony in GUD Docket No. 10000.
SECTION 3. The City authorizes counsel to intervene on behalf of the City in GUD
Docket No. 10000.
SECTION 4. Atmos shall on a monthly basis reimburse the City, by payment to the
designated City representing ATM for this purpose, for the reasonable costs of attorneys and
consultants and expenses related thereto as provided in Texas Utility Code, Section 103.022,
upon the presentation of invoices reviewed by the Steering Committee.
SECTION 5. The meeting at which this resolution was approved was in all things
conducted in strict compliance with the Texas Open Meetings act, Texas Government Code,
Chapter 551.
SECTION 6. This resolution shall take effect immediately from and after its passage.
PASSED AND APPROVED this the day of , 2010.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010
DEPARTMENT: Transportation Operations
ACM: Jon Fortune
SUBJECT
Consider adoption of an ordinance of the City of Denton, Texas adopting the Denton Municipal
Airport Business Plan as an official policy document intended to guide future development and
financial performance of the Denton Municipal Airport, and providing an effective date.
BACKGROUND
The City Council authorized a contract in April, 2009 with R. A. Wiedemann & Associates to
prepare a business plan for the operation of Denton Airport. This $100,000 contract was funded
through a grant from the Texas Department of Transportation Aviation Division (TxDOT
Aviation) on a 50/50 cost sharing basis with the City of Denton. The final DRAFT of the 2010
Business Plan was submitted to Denton Airport staff in mid-June 2010. Randal Wiedemann
presented the 2010 Business Plan to the City Council at a Work Session on August 10, 2010.
Airport Staff, Executive Staff and the Airport Advisory Board have conducted a detailed review
of the 2010 Business Plan DRAFT. The FINAL Airport Business Plan is attached for review
and approval by the City Council as Exhibit 2.
Attached, as Exhibit 3, is a summary of the major edits to the DRAFT 2010 Business Plan.
These include recognition of the fact the City Council has established the Denton Airport as an
Enterprise Fund beginning with the 2010/2011 Budget, modifying reference to the airport
governance stricture relating to development and financial policy, amending the Airport
Organization Chart and reconciling the Baseline Financial Pro Forma. Two additional edits
made following discussion with the City Council in open Work Session on November 9, 2010
include a change in order for land acquisition as a priority in 2011-2012 and including a
reference in Section 2.2 to the City Council as the rate setting authority for Airport property
leases and services. In addition to these edits, the City Council received certain recommendations
from the Airport Advisory Board in a direct communication from the Airport Advisory Board
Chairman.
The final 2010 Business Plan and Executive Summary are attached for reference as Exhibit 2. In
summary, the consultant has included four (4) major business operation initiatives and seventeen
(17) specific action recommendations in the 2010 Business Plan. The four (4) initiatives for
ongoing Airport operation are as follows:
Agenda Information Sheet
November 16, 2010
Page 2
A. Enhance Airport Branding
1. Recognize corporate aviation, including heavy maintenance, and flight training as
focus of Airport operation and development;
a. Corporate aviation generates direct and indirect revenue, jobs and private
investment;
b. Training generates operation activity and consequent revenue from aircraft fuel
sales, service and storage;
2. Airport branding as a corporate and training location influences goals and objectives
for infrastructure development, marketing and future business development.
B. Transition to Enterprise Fund
1. Enterprise Fund recognizes current financial operation as well as maintains
opportunity for future growth and financial self-sufficiency (DTO transition from
local Economic Gateway to Economic Engine);
2. Enterprise Fund operation was adopted by the City Council as a function of the
2010/2011 Budget (Development Policy and Business Plan are related, but separate
issues).
C. Development of Hangar/Rental Property
1. Three types of facilities are identified by Staff for development and management by
Airport:
a. Hangars
b. Aviation Industry
c. Aviation Business/Commercial
2. Financial pro forma for the Airport 2010/2011 Budget as adopted by the City Council
includes investment in revenue generating facilities to produce increased Airport
revenue;
3. Aviation Commercial and Industry build-to-suit opportunities will be presented to the
City Council for consideration in the 2010/2011 Fiscal Year;
4. Individual hangar owners and developers have expressed interest in Southeast
Taxiway area ground leases;
5. Reversion clause issue affects discussion of hangar development as it relates to
Airport ownership and management of privately developed hangars.
D. Long-Term Development
1. Near-term development issues addressed in the Business Plan include Airport public
infrastructure, helipad, University of North Texas Aviation Degree Program, aviation
industrial development, et.al.
2. Marketing for Southeast Taxiway development and west-side development is in
progress;
3. Loop 288 alignment has been determined and Denton County will proceed with land
acquisition at a point in the future;
Agenda Information Sheet
November 16, 2010
Page 3
4. West-side utility development and ground access is underway;
5. Constriction of Loop 288 service roads could resolve issues related to Airport access,
annexation of property to the west of Denton and residential/commercial development
southwest of Airport.
During the Work Session discussion on November 9, 2010, the City Council requested additional
information regarding options for implementing the reversion clause. In addition, the City
Council requested that staff provide a recommendation regarding the airport governance
stricture referenced in the report. This information is a separate matter from the business plan
and will be presented to the City Council at a subsequent meeting.
FISCAL INFORMATION
The final payment for the 2010 Business Plan consulting service has been paid by TxDOT
Aviation. Wiedemann & Associates will be available to provide contract services to assist in
implementation of any portions of the 2010 Business Plan that may be appropriate for initiating
specific action items.
The 2010 Business Plan incorporates the Federal Aviation Administration mandated objective of
creating self-sustaining financial performance for operation of general aviation airports
supported by federal infrastructure grants.
RECOMMENDATION
Airport Staff recommends adoption of the 2010 Business Plan and implementing policy direction
received from Council.
VV HIRITC
1. Exhibit 1 - Ordinance to adopt the 2010 Business Plan for Denton Airport
2. Exhibit 2 - 2010 Business Plan.
3. Exhibit 3 - Edit Summary
Respectfully submitted:
Quentin Hix
Airport Manager
s:Vcgallour documentslordinances1101ordiance airport business plan.doc EXHIBIT 1
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS ADOPTING THE DENTON
MUNICIPAL AIRPORT BUSINESS PLAN AS AN OFFICIAL POLICY DOCUMENT
INTENDED TO GUIDE FUTURE DEVELOPMENT AND FINANCIAL PERFORMANCE OF
THE DENTON MUNICIPAL AIRPORT; AND PROVIDING AN EFFECTIVE DATE.
WHEREAS, the City Council of the City of Denton initiated the Airport Business Plan
process with Texas Department of Transportation, Aviation Division on June 17, 2008 by
approving Resolution 2008-024; and
WHEREAS, the City Council has determined that an Airport Business Plan is necessary
to guide future decision-making related to growth and development of the Denton Municipal
Airport; and
WHEREAS, the Denton Municipal Airport Business Plan evaluates the current financial
status of the Denton Municipal Airport;
WHEREAS, the Denton Municipal Airport Business Plan evaluates a number of potential
operational and development opportunities to improve the financial performance of the Denton
Municipal Airport; and
WHEREAS, the Denton Municipal Airport Business Plan makes certain
recommendations, based on the evaluation and analysis of the Airport operation, to improve the
long-term development and operation of the Denton Municipal Airport;
. WHEREAS, the Airport Business Plan does not limit the ability of the City of Denton to
prepare other plans, policies, or strategies as required for the Airport; and
WHEREAS, input from more than fifty aircraft owners, operators and stakeholders was
received as part of a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis to
identify areas to enhance the long-term performance of the Denton Municipal Airport; and
WHEREAS, the City of Denton Council conducted two public work sessions to review
existing Airport procedures and policies as well as recommended policies, procedures and
actions included in the Denton Municipal Airport Business Plan; and it is the intent of the City
Council to adopt the Denton Municipal Airport Business Plan; NOW, THEREFORE,
THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings set forth in the preambles to this ordinance are true and
correct and are hereby adopted.
SECTION 2. The Denton Municipal Airport Business Plan is hereby adopted as a
financial and development plan to be used as a guide for planning and land use decisions in the
EXHIBIT 1
manner and for the purposes stated therein until such time as it is repealed or hereafter amended.
It is the intent. of the City Council to implement the management recommendations in the Plan
through the adoption of consistent regulations and policies.
SECTION 3. If any provision of this ordinance or application thereof to any person or
circumstance is held invalid by any court, such holding shall not affect the validity of the
remaining portions of this ordinance, and the City Council of the City of Denton, Texas, hereby
declares that it would have enacted the remaining portions despite any such validity.
SECTION 4. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
By:
_ZZ
Page 2 of 2
EXHIBIT 2
Denton Municipal Airport
Business Plan - Executive Summary
October 2010
EXECUTIVE SUMMARY
Denton Municipal Airport Business Plan
INTRODUCTION
THE PURPOSE OF THIS BUSINESS PLAN FOR
Denton Municipal Airport (DTO) is to assess
potential means to improve the Airport's
financial performance, economic
development, and operation. The business plan
evaluates a number of potential operational and
development scenarios and provides the City of
Denton with decision-making information. The
recommended plan of action rests on the following
four initiatives:
1)
i L
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Airport Brand Development: The
suggested Airport brand would target
two distinct segments of aviation
demand: corporate aviation and flight
training. By separating traffic through
the development of a parallel runway,
,
the Airport could enjoy benefits associated with both types of activity.
Corporate aviation benefits bring
5
significantly higher levels of spending
and employment than recreational
general aviation activity. Training activity has also become a big business on the
Airport and is responsible for growth in activity levels, aircraft storage and
maintenance, and on-airport employment. Retaining these two segments of demand
will be important in the long term development of the Airport.
2) Enterprise Fund Transition: The Business Plan recommends the transition of the
Airport financial system from that of general fund to an enterprise fund. This
transition would involve continued management actions to make the Airport
economically self-sufficient in the future. To facilitate long-term financial self-
sufficiency, the Airport should consider a variety of revenue generating
opportunities.
3) Hangar/Rental Property Development: As discussed, the availability ofthegas well
revenues to fund capital development at the Airport should not be limited to non-
revenue producing infrastructure. Rather, this Business Plan recommends that the
City develop hangars and other buildings that can be leased in support of operating
revenues. Development at the southeast taxiway site could be provided solely by the
R.A. Wiedemann & Associates, Inc., in association i s ith CHA, Inc. E-1
EXHIBIT 2
Denton Municipal Airport
Business Plan - Executive Summary
October 2010
City or in concert with private
development, if desired. City
ownership of rental property is
already scheduled to occur as
current leases expire and
reversion clauses transfer
ownership of existing hangars
77
to the City.
016-
4) Long Term Development: In
the near term, the Airport has
expansion capacity on the east
side. However, for the long
term, the focus of development
should be on the west side, with
Loop 288 providing access in the future. To begin moving toward more use of the
west side, this plan recommends the development of a helipad and later, a parallel
runway for general aviation training operations. Other long-term growth involves
the potential partnership with UNT for more training and aviation education,
development/expansion of the Foreign Trade Zone, and attraction of a large aviation
industrial client (aviation manufacturing/fabricating). The City of Denton should
also consider modifying its airport governance stricture to assist with vetting
financial proposals for the Airport as well as provide policy input related to targeted
marketing initiatives and development.
OVERALL AIRPORT DEVELOPMENT
Hangar and other building development is planned on the east side of the runway along the
new Southeast Taxiway. For the 2010-2018 period, an estimated need of 165,000 square feet of
additional hangar space is predicted. On the Southeast Taxiway area, it was estimated that a total
of 22 acres and 288,000 square feet of developable hangar space is available. Thus, all of the
predicted demand will fit into the land area available on the east side of the runway.
With the influx of pilot training in both helicopters and fixed wing aircraft, there is now a
significant need for a parallel runway. The future parallel runway depicted in Figure E-1 is 5,000
feet by 75 feet and would be used primarily for small aircraft, to provide an alternative runway for
training aircraft. This runway could be completed in stages, with the first phase development
providing 3,200 feet in length.
In addition to a parallel runway, there is approximately 200 acres of open land on the west
side of the existing airport property. An additional 150 acres are also available for potential
acquisition for a total of 350 acres for development. However, beyond the runway, there is still
ample land available for additional development. This land could be used for both aviation and non-
aviation development as shown in Figure E-1.
R.A. Wiedemann & Associates, Inc., in association i s ith CHA, Inc. E-2
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EXHIBIT 2
Denton Municipal Airport
Business Plan - Executive Summary
October 2010
Non-aviation development at DTO must ultimately conform to the City's land use plan and be
compatible with surrounding uses and the operation of the Airport. Additionally, it is anticipated that
the proposed Loop 288 Roadway along with appropriate utilities will attract businesses to the area.
While constriction of this section of Loop 288 is still five to ten years away, thoughtful planning
of the timing/phasing and financing of such development should be considered now.
BUSINESS PLAN OPTIONS AND RECOMMENDATIONS
As guidance for the City of Denton and Airport Management, the following is a proposed
timeline for implementing the recommendations presented in this section.
2010
• 1' Priority - Reversion Clauses: The City of Denton should retain its interest in
leases that specify a reversion of ownership of leasehold improvements to the City.
• 2nd Priority - Branding: The focus of Airport branding for DTO should be toward
business, education, and training.
- The City of Denton
should consider renaming the Airport, once
the branding activities have begun.
• 3"d Priority - Existing
Clientele Feedback: The City`
of Denton should meet '
quarterly with existing clients
and tenants to solicit feedback
on economic and service
issues facing tenants.
• Priority - Marketing: The
City of Denton should include
z.
new media as part of its
growth strategy.
• 5' Priority - Revenue Producing Property: The City of Denton should consider
investing in revenue-producing development to ensure future financial self-
sufficiency.
The City of Denton should seek the development of hangar space and other
revenue producing buildings as demand warrants.
- The City of Denton should consider changing the surface gas leases from
non-operating to operating revenue designation.
2011-2012
• 1' Priority - Airport Enterprise Fund: The City of Denton should set up an
enterprise fund accounting stricture for the Airport after FY 2009-2010.
• 2':d Priority -Staffing: The City of Denton should increase Airport staffing to
include at least one additional staff resource.
R.A. Wiedemann & Associates, Inc., in association i s ith CHA, Inc. E-4
EXHIBIT 2
Denton Municipal Airport
Business Plan - Executive Summary
October 2010
• 3pdPriority -Land Acquisition: The City of Denton should acquire land for aviation
and non-aviation activities in support of the Airport mission.
• 4' Priority - Hangar Development: The City of Denton should seek the
development of hangar space and other revenue producing buildings as demand
warrants.
• 5' Priority - Marketing Program: The City of Denton should initiate a direct
marketing information campaign targeting business and corporate aviation.
• 6' Priority - Amenities and Services: The City of Denton should encourage the
provision of other amenities and services described in this Plan as demand warrants.
2013 - 2018
• 1' Priority - Hangar Development: The
City of Denton should seek the
development of hangar space
and other revenue producing
buildings as demand warrants.
• 2nd Priority - Parallel
Runway: The City of Denton
should plan for the
development of a parallels
runway on the West Side to
accommodate pilot training
activity.
• 3"d Priority - West Side
Development: The City of
Denton should plan for the
development of aviation and
non-aviation uses the west
side of the Airport as demand
warrants.
• 0' Priority - Amenities and Services: The City of Denton should encourage the
provision of other amenities and services described in this Plan as demand warrants.
IMPACTS ON REVENUES AND EXPENSES
Alternatives suggested for consideration include revenue derived from:
• Continuing the current practice of developing land for ground leases only
• Investing gas well royalty revenue in income-generating facilities on the Airport
Preliminary analysis indicates the Land Leases Only option shows a negative net operating
revenue through the year 2016. If the City desires to operate the Airport as an Enterprise Fund, it
would best be implemented using the gas well royalty investment scenario to produce revenue
sufficient to achieve financial self-sufficiency.
R.A. Wiedemann & Associates, Inc., in association i s ith CHA, Inc. E-S
EXHIBIT 2
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EXHIBIT 2
EXHIBIT 2
Denton Municipal Airport
Business Plan
Final Technical Report
With Appendices
Prepared for
City of Denton, Texas
Texas Department of Transportation
Prepared by.
R.A. Wiedemann &
Associates, Inc.
in Association with
P.O. Box 621 • Georgetown, KY 40324
(502) 535-6570 • FAX (502) 535-5314
EXHIBIT 2
EXHIBIT 2
TABLE OF CONTENTS
SECTION 1: INTRODUCTION 1
1.1 Understanding and Key Issues 1
1.2 Desired End Products 4
1.3 Report Outline ....................................................5
SECTION 2: AIRPORT MISSION AND MANAGEMENT STRUCTURE 6
2.1 Airport Mission ...................................................6
2.2 Airport Goverance .................................................7
2.3 Airport Management ...............................................7
SECTION 3: EXISTING AIRPORT CHARACTERISTICS 9
3.1 Airside Facilities 9
3
.2
Landside Facilities
11
3
.3
Airport Operational Characteristics
13
3
.4
Airport Development Plan
14
3
.4
Parallel Runway
15
3
.4
West Side Development
19
3
.4
Existing Tenants and Users
21
3
.5
Funding Options
..............22
3
.6
Market Analysis
23
3
.6
Airport Market Area
24
3
.6
Market Area Airport Facilities
24
SECTION 4:
BASELINE FINANCIAL AND ECONOMIC OUTLOOK
32
4
.1
Historical Revenues and Expenses
32
4
.2
Baseline Forecast of Revenues and Expenses
34
SECTION 5: BUSINESS PLAN ALTERNATIVES 38
5.1 Industry Trends Impacting Denton Airport Analysis 38
5.2 Area-wide Factors Supporting Growth and Development of the Airport 39
5.3 Obstacles to Airport Performance and Goal Attainment 42
5.4 Revenue Enhancement .............................................43
5.5 Impact of Revenue Enhancement Strategies on Potential Demand 47
SECTION 6: RECOMMENDED PLAN 49
6.1 Recommended Management and Policy Actions 49
6.2 Revenue Enhancement Recommendations 54
6.3 Impact on Revenues and Expenses 63
6.4 Summary of Business Plan Recommendations 64
6.5 Timetable and Trigger Points 83
EXHIBIT 2
TABLE OF CONTENTS (Cont.)
LIST OF FIGURES
Figure 1
Denton Airport Organization Chart
8
Figure 2
Airport Location
11
Figure 3
Existing Airport Layout Plan
14
Figure 4
Airport Development Areas
29
Figure 5
Airport Service Area
35
LIST OF TABLES
Table 1
Runway Data Summary
9
Table 2
Businesses at Denton Municipal Airport
12
Table 3
Historical Activity: FAA Tower Counts
13
Table 4
Current Denton ACID
15
Table 5
Parallel Runway Options Cost Estimates
16
Table 6
West Side Development Potential Infrastructure Cost
20
Table 7
Airport Comparison Highlights
26
Table 8
Based Aircraft Mix Comparison
26
Table 9
Airport Facility Comparison
29
Table 10
Airport Service Comparison
30
Table 11
Airport Rates and Charges Price Comparison
31
Table 12
Historical Revenues and Expenses
33
Table 13
Denton Airport Baseline Financial Pro Forma
36
Table 14
Baseline Net Operating Income/(Deficit)
37
Table 15
Total Net Income for Baseline Projections
37
Table 16
Major Employers in the Denton Area
40
Table 17
Impact of Revenue Enhancement Strategies on Potential Demand
47
Table 18
Action Plan Trigger Points
67
APPENDICES
Appendix A
Denton Airport SWOT
Appendix B
Detailed Survey Results
Appendix C
Lease Analysis
Appendix D
Local and State Incentives
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
FINAL TECHNICAL REPORT
Denton Municipal Airport Business Plan
1. INTRODUCTION
THE PURPOSE OF THIS BUSINESS PLAN FOR Denton Municipal Airport (DTO) is to assess
potential means to improve the Airport's financial performance, economic development,
and operation. To do this, the business plan will evaluate a number of potential
operational and development scenarios and provide the City of Denton with decision-making
information. Our understanding of the current situation involves several components, including
the Airport's significant recent growth in operations, its competitive setting in North Central
Texas, the highest and best use of Airport property, the benefits and costs of attracting corporate
aviation, safety and noise issues in the vicinity of the Airport, the potential for hangar
development, identifying the optimum development of the Airport's west side, the desire of the
Sponsor to examine the Airport governance stricture, and a number of other facility-related
issues.
1.1 Understanding & Key Issues
Our understanding of the Denton Municipal Airport involves its position as a j et-capable
facility that desires to expand its revenue base, develop a blueprint for moving into the future,
and take advantage of the growing connection between local business/industrial development
and aviation. The location of several large factories adjacent to the Airport has confirmed the
notion of a connection between the two land uses. In addition, the Airport enjoys royalties from
gas wells on the field that add significantly to the capital budget of the Airport. Planning for the
future involves diversification so that limited-term gas revenues allow the Airport to develop
long term revenue sources to support operations.
The Airport desires financial self-sufficiency in the long term and thus will need to
review its policies set for Airport development, management of hangars, and gas well revenues.
Additionally, the Airport must keep its existing clientele and provide revenue producing facilities
such as development pad sites, hangars, and aviation industry incentives for continued growth.
Finally, the Airport is expanding its runway system to 7,000 feet to attract the largest business
and corporate clients. The Denton Municipal Airport is fast becoming the northern business hub
airport for the Dallas region. Properly managing and directing that effort is essential to
successful capture of the business aviation market. Key issues that are recognized by the
business plan include the following:
• Reversion Clauses in Lease Agreements: There is significant debate about the
value or justification for including reversionary clauses in hangar leases,
especially for major investments financed by aviation industry. The business plan
will address this issue by providing information on how these lease arrangements
work at other airports. In addition, the business plan will examine the pros and
cons associated with this practice at Denton and other airports.
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• Parallel Runway: Recently, the need for a parallel runway has been justified from
an operational standpoint. With the influx of significant pilot training in both
helicopters and fixed wing aircraft, there is now a significant usage of current
airfield capacity. The business plan will examine the issues associated with the
development of a parallel runway, including cost, justification, access, safety,
impact to airspace, and other issues.
• Radar Displays: The FAA has plans in the summer of 2010 to provide the Tower
with radar displays to supplement the current visual traffic control.
• General Fund versus Enterprise Fund: Questions have been raised concerning
the best accounting model to use for the Airport. At stake is whether or not the
Airport should be operated under the General Fund or as an Enterprise Fund. The
business plan will present the pros and cons of either method and describe the
ideal conditions for each to be used.
• Airport Management Structure: The current airport management and advisory
board stricture will be reviewed, along with alternative methods, such as Airport
Commissions, Boards, Authorities, and Departments. The ideal conditions under
which different operating strictures work will be described.
• Airport Branding: The City has undertaken some significant branding efforts in
the past for Denton Municipal Electric (the City's electric utility), the City's
economic development activities, and the Airport (slogan, "North Texas Airport
of Choice"). While the Airport should conform or be complementary to the
City's branding efforts, a significant change in the operational make-up of the
Airport has occurred over the last five years. It is no longer a small airport
primarily serving a small general aviation client base. Instead, the Airport has
grown into a corporate base and training facility that can compete with any of the
general aviation airports in North Central Texas. As such, it is believed that the
Airport brand should reflect this larger role in Denton's economic development.
• West Side Development: The development of the west side of the Airport may be
highly dependent upon the ground access available to that side of the Airport. In
this regard, the proposed development of Loop 288 has been delayed for a number
of years. It is currently unknown when that important road will be constricted.
While there are interim access alternatives, the major west side development is
linked to the Loop 288 schedule. West side development could accommodate
additional airport facilities and commercial-industrial facilities. Also at issue is
the cost to extend utilities to the west side, the responsibility for that cost, the
location of existing and future gas wells, and potential property acquisition.
• City Development of Hangars or Private Enterprise: Another topic with diverse
opinions involves the political decision as to whether or not the City should be
involved in hangar development at the Airport. This topic is related to the lease
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reversionary clause issue in that both situations might require the City to own and
manage rental property at the Airport. The economic consequences of these
options will be identified in the business plan.
• Airport Financial Performance: A significant question about the Airport
involves whether or not it can operate without subsidy. The business plan will
examine the financial performance of the Airport and project at least two different
scenarios: the Status Quo and Revenue Enhancement Options.
• Gas Well Leases and Royalties: As mentioned, the Airport enjoys revenues from
gas wells on Airport property. These revenues have a finite timeframe due to
depletion of the gas. It has been suggested that to plan for future revenue sources
and needs, the revenues from the wells may be best used on new revenue-related
infrastructure development at the Airport. The Business Plan will suggest means
of diversifying revenue generation.
• Rates and Charges Comparison: The financial analysis will examine lease rates
and other fees and taxes paid by tenants. Typically, rates should be market based,
i.e., competitive with alternative airport facilities. Tenant comments have
indicated that lease rates are reasonable, tax rates are high, and the permitting
process cannot be completed in a reasonable timeframe.
• Future Client Base and Amenities: If the City is to take a proactive role in
securing new tenants at the Airport, a key question involves the target market for
promotional activities and resources. The business plan will help identify those
industries. As the Airport continues to grow and attract business aviation, certain
amenities are expected from the corporate users, including Airport Rescue and
Fire Fighting (ARFF), rental cars, U.S. Customs, meeting facilities, food service,
and other business-enabling services.
• University of North Texas Aviation Program: The University has just approved
an Aviation Curriculum and will start the program in the fall of 2010. While no
flight training has been proposed for the initial program, a cooperative training
program with existing airport tenant(s) is planned. It is anticipated that a formal
training program could evolve in a few years. Thus, the UNT aviation program is
expected to further stimulate airport activity - particularly pilot training.
• Flight Training Operations: Significant growth in flight training activity has
occurred in the past few years with a major fixed wing flight school and two
helicopter programs. Training activity and facilities increase airport revenues, but
also significantly increase FAA tower controller workload, traffic pattern
congestion, and may constrain corporate aviation activity and/or recruitment.
Training operations versus corporate activity can sometimes be seen as competing
for limited resources of airport operational capacity and landside space.
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• Limited Development Area: Only a limited amount of development area remains
on the east side of the Airport. The highest and best use for this property should
be addressed as alternate development locations would have substantially high
costs and access issues. The Business Plan will make recommendations for
potential acquisition of property. The need and feasibility to physically segregate
light general aviation activity/facilities from corporate/business aircraft is a
related issue.
• International Activity: The City has applied for a Foreign Trade Zone (FTZ)
designation that incorporates all of the airport property. Approval of the FTZ
could stimulate the need/demand for U. S. Customs Service. The Airport currently
operates under a limited area, temporary FTZ.
• Master Plan Update: The current master plan is now dated. As such, the
Business Plan will consider options that may not have been addressed in the old
master plan. It is anticipated that the Business Plan will focus on strategic
initiatives that can be used by future master planning efforts.
1.2 Desired End Products
The desired end products produced as a result of this analysis include the following:
A well-defined mission statement for the Airport.
An identification and evaluation of strengths, weaknesses, opportunities, and
threats facing the Airport.
0 A ten-year projection of revenues and expenses at the Airport for the baseline
case and alternative scenarios.
An examination of re-branding for the Airport.
Strategic planning recommendations for the Airport, including those for capital
development, leases, operations, marketing, zoning, and management.
Recommendations for development of the West Side of the Airport.
Analysis of potential hangar development options - private versus public
ownership.
Budget pro formas showing the status quo and revenue enhancement options for
the future.
Detailed analyses of leases.
Potential impacts of the runway extension and attraction of more corporate
aviation.
Examination of the need for a parallel runway.
Identification of the need for an advertising and/or marketing strategy for the
Airport, if warranted.
Executive summaries and technical reports for the Airport and City.
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1.3 Report Outline
In order to address the issues described above and to produce the desired end products,
this report has been organized to include the following sections:
Section I - Introduction
Section 2 - Background and Management Stricture
Section 3 - Existing Airport Characteristics
Section 4 - Baseline Financial Projection
Section S - Business Plan Alternatives
Section 6 - Findings and Recommendations
Section 7 - Economic Impact Assessment
Appendix A - SWOT Analysis
Appendix B - Detailed Survey Results
Appendix C -Lease Analysis
Appendix D - Local and State Incentives
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2. BACKGROUND AND AIRPORT MISSION
A CLEARLY ARTICULATED MISSION REFLECTS THE GOALS AND vision for the Airport. It also
empowers all Airport staff to fulfill their roles. The overall Airport mission provides a
foundation of common purpose from which decisions can be made and changes can be
pursued. The management stricture and capabilities of the Sponsor must fit with the mission of
the Airport to ensure success.
Understanding the background and management stricture of Denton Airport aids in
working through the key issues identified in the previous section (e.g. Enterprise Fund vs.
General Fund stricture). This examination can identify whether roles and/or responsibilities are
clearly defined, or if authority in the decision-making process is granted at the proper levels. To
address these issues, this section is organized to include the following:
Airport Mission
Airport Management Stricture
2.1 Airport Mission
Denton Airport's role is that of a publicly-owned, public-use airport. The Airport is
classified in the National Plan of Integrated Airports System (NPIAS) as a General Aviation
Reliever airport, providing access to the air transportation system for general aviation aircraft.
The mission statement under which the current Airport staff operates is:
It is the mission of Denton Airport to provide: operational safety; outstanding
service; and, absolute security. "
Because of the increasing role of the Airport in attracting and supporting businesses and
creating local jobs, it may be helpful to expand the mission statement to include wording about
economic development and the creation of jobs in the Denton area. As such, it is suggested that
the Airport mission statement be revised as follows:
It is the mission of Denton Airport to serve as an engine for economic
development in the Denton area, providing operational safety; outstanding
service; and, absolute security for private pilots and the aviation industry. "
Discussions with Airport Management indicate that at least two other goals and objectives for the
Airport exist:
Additional revenue generation and diversification of revenue sources.
Development of a new airport brand that recognizes its elevation as a top tier
general aviation facility in the region.
While the Airport mission statement is adequate, the challenge to achieving greater
financial performance in the future will depend on the City's ability to partner with private
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enterprise in creating a strong brand and market niche. Subsequent sections of this Business Plan
will further examine the Airport's market potential in an effort to achieve these goals.
2.2 Airport Governance
Denton Airport is owned and operated by the City of Denton, Texas. Figure 1 presents
the organizational chart for the Airport and its management stricture. As shown, the chain-of-
command authority flows from the Denton City Council through the City Manager to the
Assistant City Manager, to the Director of Strategic Services and on through the Transportation
Director to the Airport Manager. The Airport Manager has a staff of three with roles shown in
the Organization Chart.
Administratively, Denton Airport is an operating department of the City. As a Home
Rule Charter City with a Council-Manager form of government, City of Denton administration is
the responsibility of a City Manager who is appointed by the City Council. The City Council
also appoints an Airport Advisory Board which makes recommendations regarding Airport
policy directly to the City Council. The City Council reviews and approves all Airport operating
policies including rate schedules for Airport property leases and services. The daily operation of
Airport services, infrastructure and aviation business relations is the direct responsibility of the
Airport Manager. Contract service providers operate the on-Airport FBO (pilot services) and
control tower. These contractors are supervised by Airport Staff under authority of the Airport
Manager.
2.3 Airport Management
The day-to-day operation of the Airport is the responsibility of the Airport Manager. The
Airport Manager's position incorporates all facets of Airport administration including
responsibility for budget oversight, public infrastructure management, lease administration and
maintenance of grounds at the Airport. The Airport Manager must have a working knowledge of
Federal, State, and local laws and regulations relating to aviation. From an administrative
standpoint, the Airport Manager supervises Airport staff, administers Airport security and
emergencies, and coordinates the financial responsibilities of the Airport with the Transportation
Director. The Airport Manager also is responsible for the planning and environmental processes
at the Airport. The Administrative Assistant to the Airport Manager and Airport Operations
Coordinator perform the duties of the Manager when he is absent. The maintenance field service
worker supervises and performs maintenance on the Airport, mowing, repairs to equipment,
buildings etc. Large parcels of Airport land are mowed by the Parks Department personnel under
contract with the Airport. Anything beyond the City's capabilities is coordinated through other
contractors. Airport attendants are needed to staff the Airport during its working hours.
The Airport is open 24 hours per day, seven days per week. However, it is only staffed
by the City from 8:00 am to 5:00 pm, Monday through Friday. The FBO (Business Air Center)
is open from 6:00 am to 10:00 pm, Monday through Friday and from 7:00 am to 7:00 pm on the
weekends. The Airport's second FBO, U.S. Aviation Group, will begin in mid-2010 to operate
24/7 with complete line services. The Air Traffic Control Tower is operated from 6:00 a.m. to
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Denton Municipal Airport
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10:00 p.m. seven days per week. The Airport Manager or his designate is on call after operating
hours for emergencies.
Figure 1 -
Organization Chart
City Council
Denton, Texas
City of Denton
City Manager
City of Denton
Assistant City Manager
City of Denton
Director of Strategic Services
City of Denton
Transportation Director
Denton Municipal Airport i
Manager
Denton Municipal Airport
Administrative Assistant
Airport Maintenance
Coordinator
Airport Maintenance
Field Service Worker
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3. EXISTING AIRPORT CHARACTERISTICS
A Il2PORT FACILITIES ARE OFTEN DESCRIBED AS AI RSIDE or landside. Airside (or airfield)
facilities include those directly used by aircraft during takeoff and landing, such as
runways, taxiways, lighting, and instrumentation. Landside facilities include support
buildings and strictures, such as aircraft hangars and parking (tie-down) aprons, automobile
parking lots, and access roads.
This section presents an inventory of airside and landside facilities at Denton Municipal
Airport. However, as part of the Airport Business Plan, this inventory considers the utility of
these facilities for the Airport as a business enterprise. In this way, this section not only reports
on what facilities exist on the Airport, but also how they affect the Airport business operations.
3.1 Airside Facilities
From a business perspective, airside facilities at DTO provide an access point into the
National Airspace System (NAS) for aircraft owners, operators, and business travelers. These
facilities include one asphalt runway (Runway 17-35) which is 5,999 feet long and 150 feet wide
with a full length parallel taxiway. All primary taxiways are 50 feet wide. The runway has a
precision instrument approach which permits operation during low visibility weather conditions.
Figure 2 graphically shows these facilities while Table 1 summarizes the runway facilities and
characteristics.
Table I - Runway Data Summary
F
ilit
T
Runway 17-35
ype
ac
y
17 35
Length
5,999'
Width
150'
Pavement
Asphalt
Weight Bearing Capacity
70,000 lbs Single Wheel - 100,000 lbs Dual Wheel
Markings
Precision
Non-Precision
Runway Lighting
Medium Intensity
Approach Lighting
MALSR
None
Visual Aid
VASI
Traffic Pattern
Left
Approaches
RNAV, ILS, & NDB
RNAV
Legend: MALSR = Medium Intensity Approach Light System with Runway Alignment Indicator Lights
VASI = Visual Approach Slope Indicator
RNAV = Area Navigation
IL,S = Instrument Landing System
NDB = Non-Directional Beacon
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EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
DTO is considered a reliever to Dallas/Fort Worth International Airport (DFW) in the
FAA's National Plan of Integrated Airport Systems (NPIAS). The runway covers between 96
percent and 99 percent of all-weather wind conditions. The Airport is further equipped with the
following:
• Four Instrument Approaches, Including RNAV/GPS Approaches at Both Runway
Ends
• ILS Approach on Runway 17
• RNAV for geographic positioning
• NDB Rotating Beacon (Offers Aircraft w/o GPS to Fly Instrument Approaches)
• Segmented Circle and Lighted Wind Indicators
• Automated Surface Observance System (ASOS)
• Medium Intensity Runway Lights
FAA Airport design standards are based on the Airport's Reference Code (ARC)'. The
ARC of any airport is based on the largest aircraft category that conducts at least 500 annual
itinerant operations. DTO is classified as a D-11 airport (accommodating turboprops and jets). D-
II airport design aircraft include the Hawker 700, Learjet 35, and Gulfstream IV. In general,
DTO adequately provides for ARC D-II design standards. Additional standards may be put into
place if the Airport were to obtain a Part 139 certification for commercial operations. These
standards would include firefighting, wildlife, security, and others. In summary, the DTO airfield
offers the full complement of infrastructure facilities and approach equipment desired by a wide
range of aircraft in the business and corporate fleet.
3.2 Landside Facilities
In terms of landside facilities, Denton Municipal Airport offers a range of buildings and
equipment that serve the business aircraft owner, operator, and traveler. These include an
administration building, many aircraft storage hangars, an aircraft museum, maintenance
facilities, and fixed base operator (FBO) hangars. Currently, there are over 30
corporate/conventional hangars and 12 T-hangar buildings, many of which are utilized by
businesses.
In addition to these facilities, there are two Fixed Based Operators (FBO) and other on-
site business operators that provide all of the traditional aviation services including aircraft rental
flight training, charter, avionics, aircraft sales, aircraft maintenance, painting and upholstery, full
and self-serve fueling, ground power units (GPU) for external power, and line service. Business
Air Center is the senior provider of these services. Table 2 displays aviation businesses at DTO;
there may be private individuals who use their aircraft for business purposes that are not included
in Table 2. Each of the businesses is housed within a stricture fitted to their requirements, and
includes attached or interior offices, vehicle parking, and apron area.
The ARC has two components. The first component, depicted by a letter, is the Aircraft Approach Category and
refers to the aircraft approach speed during landing. The second component, depicted by a Roman numeral, is the
Airplane Design Group, and refers to the aircraft iv ingspan.
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The paved aircraft parking apron has approximately 75 tie-down spaces for itinerant and
based aircraft use for either overnight or monthly parking. In total, there is over 720,000 square
feet of hangar space at DTO. Other landside facilities and services available include:
• Six Fuel Tanks Offering 70,000 Gallons of Fuel;
• Two Fuel Tricks with a Combined 1,750-Gallon Capacity;
• 24-Hour Fueling Access;
• Approximately 100 Automobile Parking Spaces
• Each building also contains an apron area or taxilanes, and separate or combined auto
parking
Table 2 - Businesses at Denton Municipal Airport
Business
Function
Alan RitcheN-
Postal Contractor
All American Helicopters, LLC
Flight School
Alliance Air Charter
Charter
Avionics International Supply, hrc
Maintenance
Avionics Test Equipment Calibration, Inc
Maintenance
Barrett Aviation Maintenance
Maintenance
Business Air Center
Aircraft Sales, FBO, Charter, Hangar Rental
City of Denton
Airport Management and Administration
EZ Composites
Experimental Aircraft Manufacturing
Ezell Aviation
Commercial Hangars
GCBSXX, LLC / FinleN- Ledbetter
Electric Manufacturing
Haltom Aircraft Seivice
Maintenance
Hangar 10 Flying Museum
Museum
Jet Works Air Center
Maintenance & Paint Shop
Longhorn Helicopters, Inc
Charter, Flight School
Nebrig & Associates, Inc
Aircraft Sales, Hangar Rental
Owens Aviation
Aircraft Sales
Piaggio
Aircraft Interiors
Tech Aero Avionics, LLC
Avionics Maintenance
US Aviation
Aircraft Sales, FBO, Flight School Hangar Rental,
Maintenance
Used Dealer's Aircraft
Aircraft Sales
Weyer Investments
Hangar Rental
In summary, the landside facilities currently available at DTO are quite comprehensive,
and improvements are continuing. The operation of several FBO's on the Airport is evidence that
the market for corporate/business aviation services is strong, as is the list of existing business
tenants.
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3.3 Airport Operational Characteristics
The primary and driving force of growth at general aviation airports involves increases in
based aircraft and operations. These two measures of activity affect not only an airport's
infrastructure requirements, but also the amount of revenues and expenses it can generate. This
market demand reflects the airport as both a product and service that consumers will buy.
Therefore, development of future airside and landside facilities at DTO, if constricted and
phased in response to market demand, can contribute significantly to the Airport's revenues
through rents paid on new leases.
In recent years, the operating environment at DTO has changed from a relatively low
activity general aviation airport to a significant business and corporation aviation oriented
facility with a growing flight training and aircraft service business component. This growth has
come primarily within the last seven years and has altered the character of the Airport to become
an economic development engine for Denton. This change, coupled with the expansion of gas
well development has created a unique nexus of both aviation and economic activity.
Since 2004, DTO has experienced a significant increase in both based aircraft and total
annual operations. (An aircraft operation is defined as either a takeoff or a landing. A takeoff and
landing are two operations.) Because of the significant growth in training operations between
2006 and 2009, official FAA Terminal Area Forecast records have not yet shown the significant
spike in operational activity. The most recent FAA TAF is shown in Table 3.
Table 3 - Historical Activity: FAA Tower Counts
Year
Total Operations
2004
57,612
2005
86,802
2006
88,832
2007
99,734
2008*
126,670
* Source: FAA Air Traffic Activity Systems (ATADS)
As indicated by the ATADS, the Airport has gained more than 69,000 annual operations
between 2004 and 2008. An annualized extrapolation of the 2009 FAA Air Traffic Control
Tower (ATCT) counts at DTO predicts approximately 150,000 annual operations for calendar
year 2009. These annual ATCT counts do not include activity that takes place when the tower is
not operational. With training operations now taking place 24 hours per day, it might be expected
that the Airport will have as much as 50,000 more actual operations than those recorded by the
ATCT. This is significantly higher than 2009 TAF forecast of 119,081 and exceeds both the
FAA forecast for 2014 and the Airport Master Plan forecast for 2011.
In an effort to improve the integrity of the FAA's based aircraft data, a new methodology
for accounting for aircraft based at an airport was implemented by the FAA in 2009 through the
FAA Order 5010.4, Airport Safety Data Program. Airports are now required to enter the tail
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numbers (also known as N-numbers) of the aircraft that are based at their airport. The FAA will
then cross reference the tail numbers between airports and in cases where an aircraft appears at
multiple airports, will reconcile the discrepancy. In some cases, this methodology significantly
changed the number of based aircraft at an airport. As this is in the first year of the new program,
its affects on forecasts and funding await to be seen. The March 2009 effort for DTO resulted in
the following aircraft fleet mix:
• 131 Single-Engine (73%)
• 29 Multi-Engine (16%)
• 10 Jets (6%)
• 7 Helicopters (4%)
• 2 Other (1
• TOTAL = 179
The mix shows DTO's activity is based mainly on flight training and corporate activity. While
some single-engine aircraft are used for the individual businesses that utilize the Airport, most
are used for recreational or flight training. Flight training also utilizes the helicopters and some
multi-engine aircraft. With almost one-quarter of the total aircraft made up of multi-engine
aircraft and jets, the Airport has a healthy level of corporate and business aviation.
It should be noted that Airport Management has a higher number of based aircraft listed
in their records. It is believed that these will eventually show up in FAA 5010 reports as new
inspections are undertaken. Importantly for this business plan, the actual number of existing
based aircraft will not impact future revenue projections because only the growth in based
aircraft is used in the projection methodology. Section 5 of this Plan addresses based aircraft
growth.
3.4 Airport Development Plan
One of the tasks of this business plan is to evaluate the existing Airport Capital
Improvement Program (ACID). This review includes suggestions for any revisions (either
specific projects or timing and phasing of projects) that may better suit the business need or
market demand for the projects. For the purpose of the business plan, review of the ACIP
considers opportunities for revenue generation. The 2003 Master Plan describes the last formal
recommended development plan - the Airport Capital Improvement Program (ACID) for DTO.
The Terminal Area Plan was revised in 2006 to reflect the buildings that had been constricted
since 2003 and any additional changes of locations or plans of buildings. The short-term projects
identified in the Master Plan have either been completed or under constriction at this time. Table
4 shows the current ACID for DTO as provided by the City of Denton.
The 2010 - 2012 TxDOT Capital Improvement Program (CIP) has listed a total of
$1,146,100 in funding for DTO for 2012. There are no proj ects funded for 2010 or 2011 listed at
this time. One project previously added to the TxDOT CIP for 2010 is for security fencing,
including the engineering/design and installation of 18,000 linear feet of perimeter fencing.
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Table 4 - Current Denton ACIP
Pro'ect
Local
Federal
Total
Short Term
1. Southeast Taxiway- Expansion
77,135
1,094,615
1,171,750
2. Rumvai- Extension
425,000
8,275,000
8,700,000
3. Security Fence (Perimeter-south)
57,000
570,000
627,000
4. Southeast Road Infrastructure
500,000
-
500,000
5. Air port Entrance (Design)
50,000
-
50,000
6. Airport Signage (On-site)
50,000
-
50,000
7. Maintenance Facility
145,000
-
145,000
Short Term Total
51,304,135
59,939,615
511,243,750
Intermediate Term
1. Ramp Expansion
89,000
890,000
979,000
2. Parallel Runway- / Taxiway- (5,000 ft)
761,050
6,849,450
7,610,500
3. RADAR Equipment Installation
250,000
1,025,000
1,275,000
4. Airport Entrance (constmction)
150,000
1,350,000
1,500,000
Intermediate Term Total
51,250,050
510,114,450
511,364,500
Lon Term
1. Rumvai- Overlai-
240,000
2,160,000
2,400,000
2. General Aviation Parking Facilities
14,000
126,000
140,000
3. Taxiway- A & B Rehabilitation
140,000
1,260,000
1,400,000
Long Term Total
5394,000
53,546,000
53,940,000
Not On Current Master Plan:
1. Airport master Plan / Business Plan
285,000
-
-
2. Heliport (west side)
1,500,000
-
-
3. Public Ramp / Taxiway (west side)
2,500,000
-
-
Not On Master Plan Total
$4,285,000
-
-
TOTAL
57,233,185
523,600,065
526,548,250
Source: City of Denton
Parallel Runway
Until recently, the need for a parallel runway could not be justified from an operational
standpoint. With the influx of pilot training in both helicopters and fixed wing aircraft, there is
now a significant usage of current airfield capacity according to the FAA tower counts. The mix
of the slower propeller aircraft and faster jet aircraft contributes to the immediate need for a
parallel runway. The future parallel runway depicted on the ALP is 5,000 feet by 75 feet and
would be used primarily for small aircraft, to provide an alternative runway for training aircraft.
According to the 2003 Master Plan, a parallel runway would increase the Annual Service
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Volume of DTO to 300,000 operations. A second runway would also provide an alternative
should the main runway need to be closed due to maintenance or emergencies.
Figure 3 displays the 5,000-foot by 75-foot parallel runway from the Airport Layout Plan
(ALP) with a full length parallel runway. The distance between the two runways is 700 feet,
which allows for simultaneous operations of the two runways, and for aircraft to hold on the exit
taxiways. Figure 4 displays an alternative parallel runway of 3,200 feet. While this runway
would be shorter, it would be adequate for most small aircraft and flight training and is long
enough to obtain an instrument approach. The shorter length would also contain the Runway
Protection Zones mostly within the existing airport property, reducing the requirement for land
acquisition or easements. The shorter runway could be extended at a later date as necessary. In
an effort to further reduce the cost, only 35-foot wide exit taxiways are provided. Aircraft may
safely hold on the exit taxiways between the runways.
Table 5 - Parallel Runway Options Cost Estimates
Item
Amount
Units
Cost/Unit
Total Cost
O )tion #1- 5,000 ft
Runivav
Pavement
375,000
SF
$10.00
$3,750,000
Lighting
10,000
LF
$20.00
$200,000
Markings
375,000
SF
$1.50
$562,500
TaxiLN'av
Pavement
252,000
SF
$10.00
$2,520,000
Lighting
10,000
LF
$20.00
$200,000
Markings
252,000
SF
$1.50
$378,000
Total
$7,610,500
O )tion #2 - 3,200 ft
Runivav
Pavement
232,500
SF
$10.00
$2,325,000
Lighting
6,400
LF
$20.00
$128,000
Markings
232,500
SF
$1.50
$348,750
TaxiLN'av
Pavement
84,000
SF
$10.00
$840,000
Lighting
6,400
LF
$20.00
$128,000
Markings
84,000
SF
$1.50
$126,000
Total
$3,895,750
Source: RAWA Consultant Team
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 16
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EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
West Side Development
There is approximately 200 acres of open land on the west side of the existing airport
property, a portion of which would be reserved for the parallel runway as discussed above. An
additional 150 acres are also available for potential acquisition for a total of 350 acres for
development. However, beyond the runway, there is still ample land available for additional
development. This land could be used for both aviation and non-aviation development as shown
in Figure 5 - Potential Long-Term Development.
Non-aviation development at DTO must ultimately conform to the City's land use plan
and be compatible with surrounding uses and the operation of the Airport. Additionally, it is
anticipated that the proposed Loop 288 Roadway along with appropriate utilities will attract
businesses to the area. While constriction of this section of Loop 288 is still five to ten years
away, thoughtful planning of the timing / phasing and financing of such development should be
considered now.
The development illustrated on Figure 5 includes a conceptual airport business park,
composed of two distinct sections. Immediately west of the potential parallel runway, is a 100
acres area suggested to be reserved for additional airport-related facilities. This area can
accommodate virtually any type of airport user, including major corporate flight departments,
maintenance facilities, and specialty services. The illustration depicts an assortment of large
hangars, aprons, offices, roadways, and vehicle parking along a new 5,000-foot long parallel
taxiway, sized for Airplane Design Group III (e.g., Boeing Business Jets). For comparison, this
area is similar in size and capacity to the existing development area on the east side of the
Airport.
In addition to the airport-related development, the concept also illustrates a potential 50
acre business and industrial park, with instant access to the Airport, adjacent to the Loop 288
highway corridor. With some land acquisition to the north and west, the business park could be
expanded to 100 acres, and would be bounded by the Dry Fork Creek to the north and Hickory
Creek to the south.
As the area is generally level and undeveloped, there are few impediments to future
development, with the exception of a few existing gas well locations. However, initial
development would require investment (whether public or private) to foster implementation of
the concept. Although, the actual costs cannot be projected prior to specific site planning, the
table below provides some order of magnitude costs for initial public infrastructure. Note that
concept assumes that proposed Loop 288 is constricted, and includes utility rights-of-way and
the extension of municipal sewer and water. The conceptual costs below are for public
infrastructure improvements located on Airport property. All buildings and associated facilities
would be at the expense of the developers or tenants.
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 19
EXHIBIT 2
Denton Municipal Airport
Business Plan
October 2010
Table 6 - West Side Development Potential Infrastructure Cost
Amount
Units
Cost/Unit
Total Cost
Airside
Taxii-ay
Includes Pavement, Lighting, and Markings
6,000
LF
$700.00
$4,200,000
Apron
Main Apron
300,000
SF
$16.00
$4,800,000
Design & Contingency
25% of cost
$2,250,000
Subtotal Estimate
$11,250,000
Landside
Access Road
Includes Pavement, & Markings
6,000
LF
$300.00
$1,800,000
Lighting
6,000
LF
$50.00
$300,000
Utilities
Sewer
6,000
LF
$110.00
$660,000
Water
6,000
LF
$110.00
$660,000
Design & Contingency
25% of cost
$855,000
Subtotal Estimate
$4,275,000
Total
$15,525,000
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 20
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EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
3.5 Funding Options
The ACIP lists the recommended projects and associated cost estimates for the 20-year
planning period. The local, state, and federal governmental agencies utilize the ACID as a
reference document for future funding. The main source of funding for many airports is grants
through the FAA's Airport Improvement Project (AIP). Texas is designated as one of ten states
in the U. S. that serves as a "block grant state." As such, TxDOT acts, by law, as the agent for
political subdivisions for the purpose of applying for, receiving, and disbursing federal funds for
GA airports. TxDOT also funds 50 percent of non-federal airfield maintenance projects up to a
maximum participation amount of $50,000.
Improvements related to enhancing airport safety, capacity, security, and environmental
concerns are eligible through the AIP program. Typical AIP eligible projects include: airport
master plans and airport layout plans; land acquisition and site preparation; airfield pavements,
e.g. runways, taxiways, and transient aprons; lighting and navigational aids; safety, security, and
snow removal equipment; selected passenger terminal facilities; and obstruction identification
and removal. In addition, some revenue producing projects can be funded from an airport's
entitlement grants if there are no runway or safety projects at that airport. These items can
include hangars, fueling facilities, automobile parking facilities, private use areas of terminal
facilities, and other revenue generating facilities. Highest funding priority according to FAA's
rating procedure is generally offered those projects that are safety related such as obstruction
removal, runway safety area improvements, and facility improvements to meet current FAA
Airport Design Standards. There are several other requirements to obtain AIP funding and
include items such as:
• Project Must Be Reasonably Consistent With Regional Plans
• Project Is Included on the Most Current FAA Approved Airport Layout Plan
• Sufficient Funds Available to Pay the Non-Federal Share
As Texas is a block grant state, TxDOT has developed the Texas Airport System Plan
(TASP) which includes all the airports from the FAA's National Plan of Integrated Airport
Systems (NPIAS) along which a few additional airports it deems necessary for the system. There
are additional goals beyond the FAA's AIP program and include:
• Scheduled Air Carrier Service Within a 60-Minute Drive for All Residents
• Business Jet Aircraft Access Within 30-Minute Drive of Significant Population or
Mineral Resource Centers
• Light Piston-Engine Aircraft Access Within 30-Minute Drive of Agricultural Centers
The goals of the federal and state plans are combined by TxDOT in the following order
for project funding priority:
1. Safety
2. Preservation
3. Standards
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 22
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
4. Upgrade
5. Capacity
6. New Access
7. New Capacity
Texas is one of only three states in the country that does not have a state tax on aviation
fuel, nor does it have any other dedicated source of funds for airport development. Historically,
state funds for matching 50 percent of the sponsor share of federal airport grants have come from
"Fund Six", the state's transportation fund which is funded primarily through an excise tax on
gasoline. For the past three years, the state's aviation funding has been $16 million annually.
There is a proposal to redirect the existing state sales tax on aviation and air transportation-
related goods and services that currently go into the state's general fund into a dedicated fund to
provide additional revenues for airport projects. The primary advantage to this proposal is
airports would receive additional funding without requiring new taxes.
The formation of public/private partnerships is another emerging trend for GA airports.
In today's economy, businesses require more than a parcel of land or a building from which to
operate in order to realize their success. Many state and local governments across the country
offer corporate incentives in an effort to attract businesses and promote economic development
within their communities. Whether they are companies just starting their business or well-
established enterprises looking to relocate, these incentives provide excellent opportunities to
evaluate and compare multiple sites and seek out the locations that offer the most benefits (see
Appendix D).
It is here that owners of GA airports may find methods in addition to traditional
incentives such as low interest loans and temporary tax abatement, to entice economic
development. Public/private partnerships are sometimes created as a means to provide a mutually
beneficial financial relationship between a private entity and a local government. The community
wins by gaining the positive (and often substantial) economic impact generated by the business.
The business wins by gaining previously inaccessible assistance, and the local government wins
by gaining additional revenues and/or reducing its cost for the project. DTO is uniquely
positioned to use gas well royalty, which must be used exclusively for on-Airport expenditures,
to fund public participation in projects that increase annual revenue for the Airport.
3.6 Market Analysis
To understand the revenue-producing potential of DTO, it is important to evaluate the
economic forces at play in the existing market. The interaction of customers in the market with
existing offerings of aviation products and services determines prices, and can guide the Airport
in finding a unique position in the market that can produce revenue. In addition to assessing the
condition of the existing market in the Dallas/Fort Worth region, there is also some
undetermined amount of potential new customers (e.g. based aircraft or itinerant users), should
the Airport find the right balance of product/service, price, and value to offer the market. The
ultimate goal of DTO is to become an economic development hub by capturing an increased
share of both the existing customer market and a share of the natural regional growth of general
aviation demand in the Dallas/Fort Worth market.
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 23
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
Airport Market Area
For the purpose of this Business Plan, the existing geographic market of DTO is defined
by a 30-nautical-mile ring centered on the airport, which includes the north-central portion of the
Dallas/Fort Worth Metroplex. While there is no hard rile that sets these boundaries, particularly
in a large metropolitan region, this geographic area represents the target market from which the
Airport is likely to draw users and activity that will assist in driving revenue growth. It is
unlikely that DTO would be competing with airports in the southwestern portion of the region
for based aircraft and activity due to regional factors such as vehicle congestion/travel time and
the ability for these airports to fulfill the needs of their tenants. It should be noted that transient
activity at DTO originates in many other regions of the country. Figure 6 illustrates the general
market area of the Airport and includes other nearby public-use airports.
Market Area Airport Facilities
Within the geographic service area for DTO, there are a number of other public-use
airports, which provide a range of general aviation services, and likely compete with DTO for
activity and users. While there may be other large airports in the Metro area that compete with
DTO for corporate aviation facilities and services, a 30-mile geographic area was considered
inclusive of most, since locational convenience is one factor used in selecting a home-base
airport. For this Business Plan, there were several potential airports considered as competing
facilities. These airports include, but are not limited to:
• Addison (ADS)
• Aero Country (T31)
• Airpark-Dallas (1769)
• Collin County (TKI)
• Gainesville (GLE)
• Hicks Airfield (T67)
• Lakeview (3 OF)
• North Texas Regional (GYI)
• FW Alliance (AFW)
• FW Meacham (FTW)
• Northwest Regional (52F)
The location of these facilities can be seen in Figure 6. Although general aviation airports
with smaller runways were included in the above list (52F, 30F, F69, T31, T67), airports within
the market service area with less than 59 based aircraft or without paved runways were not
included as competitors to DTO in this analysis. Tables 9 and 10 present information regarding
the facilities and services offered by these airports for comparison purposes.
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 24
EXHIBIT 2
Denton Municipal Airport
Business Plan
October 2010
Legend
Denton Municipal Airport
Public Use General Aviation Airports
,
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C1 ki Denton Airport Market Service Area 6
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 25
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
The majority of the airports shown on the map northwest of DTO are smaller and
privately-owned; thus, not likely competitors. A few airports to the south and east, such as Aero
Country, Lakeview and Airpark-Dallas, appear to be used mainly for recreational traffic and
offer very few services. These airports have almost no multi-engine based aircraft or jets. As
DTO is focused on providing business activity and flight training, these airports were not used as
competing facilities even though they are in proximity to DTO. As indicated, airports within the
DTO market area offer a range of options to general aviation users. Highlights of the comparison
are shown in Table 7 below.
Table 7 - Airport Comparison Highlights
Other Aiiports
Denton Airport
Longest Runway
Fort Worth Alliance
9,600 feet
5,999 feet
Largest Aiifield
Gainesville
1,336 acres
716 acres
Most Based Aircraft
Nortfivest Regional
612
179
Most Based Jets
Addison
199
10
Most Based Multi-Engine Aircraft
Addison
88
29
Least Based Aircraft
Gainesville
59
170
Comparisons to other airports must be qualified due to the specific characteristics of the
region. Addison (ADS), Fort Worth Alliance (AFW), and Fort Worth Meacham (FTW) are also
reliever airports to DFW, but are significantly closer to downtown Dallas and Fort Worth than
DTO. They have the highest levels of based aircraft and longer runways. They also have a higher
percentage of jets in their based aircraft mix. As shown in Table 10, DTO has six percent of all
based jets, while ADS has 36 percent and FTW has 32 percent. This suggests that jet aircraft
operators have a high desirability to access the central business districts of Dallas and Fort
Worth. Table 8 also shows that regionally, a tower and higher approach capabilities do not
necessarily mean a higher percentage of based jets. It should be noted, however, the airports
without these services do not have any based jets.
Table 8 - Based Aircraft Mix Comparison
Airport
Total
Based
Aircraft
Jet
Total % of
ME Tota% l of
SE +
Other %
of Total
NAVAID
Tower
Denton Nlunici al (DTO)
I-O
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1LS
Yes
Addison (ADS)
545
37%
16%
47%
IL,S
Yes
Aero Countn- (T31)
90
0%
11%
89%
-
No
Collin County- (TKI)
206
5%
17%
78%
IL,S
Yes
Gainesville (GLE)
59
5%
20%
75%
LPV
No
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 26
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
Table 8 - Based Aircraft Mix Comparison
Airport
Total
Based
Aircraft
Jet
Total % of
ME Tota% l of
SE +
Other %
of Total
NAVAID
Tower
Hicks Airfield (T67)
321
0%
6%
94%
-
No
North Texas Regional (GYI)
161
12%
11%
77%
ILS
Yes
Air ark - Dallas (F69)
68
0%
1%
99%
-
No
FW Alliance (AFW)
107
23%
25%
51%
ILS
Yes
FW Meacham (FTW)
198
32%
23%
44%
ILS
Yes
Lakeview (30F)
63
0
0
0%
100%
Nortfivest Regional (52F)
612
2)
0X
0
10%
90%
-
No
The prices of 100LL at these airports are at the higher end of the range, but not
significantly higher for Jet-A, suggesting that these airports are attempting to promote business
activity and discourage recreational traffic. If regional growth patterns continue, it is only a
matter of time before communities in traditionally suburban areas of the region expand into
active and competitive business markets. As growth does occur, DTO will likely find itself in an
improved position to attract additional corporate market share.
There are several privately-owned airports that are open to the public. Many of these
airports operate as such in order to preserve the surrounding airspace from obstructions and
encroachment. Hicks Airfield has over 321 based aircraft and offers charter service. The fuel
rates at Hicks are at the lower end of the range, which may attribute to the large number of
aircraft. However, in terms of business activity, Hicks Airfield has a relatively short runway,
does not offer Jet-A fuel, and has zero based jets. Therefore, the likelihood that Hicks will
compete with DTO for business activity is low.
Market Area General Aviation Services
General aviation services available at area airports include airframe repairs, avionics,
power plant repairs, flight instruction, rental and sales, and charter, and were shown in Table 10.
DTO appears to offer comparable, if not better, services than other airports within the region.
Fort Worth Meacham and Addison airports are the only two other airports to provide the same
level of services recorded by the FAA's 5010 Master Record. DTO also offers a paint shop,
interior refurbishment, and a foreign trade zone (FTZ). Other FTZ's are located at Dallas/Fort
Worth International and Fort Worth Alliance.
Market Area Rates and Charges
As indicated in Table 11, prices for 100LL in August of 2009 were found to be as low as
$3.25 per gallon at North Texas Regional, and as high as $6.09 per gallon at Addison. Jet A was
$2.80 at Gainesville, and $4.95 at Addison. From this analysis, it appears that airports closer to
downtown Dallas and Fort Worth have higher fuel prices.
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 27
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
A telephone survey to FBOs and airport managers/owners was conducted to determine
the rates for aircraft storage, including tie-downs, T-hangars, and conventional hangars. Rates for
daily tie-downs range from no cost at DTO and Gainesville to $20 at Fort Worth Alliance (for
12,5001bs and under). Fort Worth Alliance and Fort Worth Meacham rates vary based upon
aircraft weight. At DTO the monthly tie-down fee is $40, while at Alliance it is $300. T-hangars
at DTO range from $180 to $250 depending upon the type of aircraft, size of hangar space, and
number of other aircraft in the hangar. According to the FBOs contacted, community space is
available in a conventional hangar at DTO, Fort Worth Alliance and Fort Worth Meacham, and
North Texas Regional, but individual conventional hangars are not. Gainesville offers a $0.05
discount on fuel on the weekends for basing the aircraft in one of their hangars.
Market Analysis Summary
Overall, DTO is in the mid-range for fuel prices and is on the lower end for aircraft
storage rates. DTO should market the wide variety of services and facilities it provides. It has a
business jet capable runway system with precision approach, ATCT, and highly qualified FBO
service providers. In particular, it is a key aviation provider for aviation demand in the north-
central Dallas/Fort Worth region.
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 28
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EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
4. BASELINE FINANCIAL AND ECONOMIC OUTLOOK
THIS SECTION IDENTIFIES HISTORICAL REVENUES AND EXPENSES attributable to Denton
Municipal Airport and projects those revenues and expenses to the year 2018. This
projection only considers a baseline scenario with no revenue enhancement projects
included. In a later section, alternative projections of financial performance will be developed
based upon revenue enhancement initiatives and marketing pro-fortas. In order to properly
frame these financial statements, this section is organized to present the following:
• Historical Revenues and Expenses
• Baseline Forecast of Revenues and Expenses
4.1 Historical Revenues and Expenses
Table 12 shows the historical revenues and expenses for FY 2006 through FY 2008 as
well as the budget for FY 2009. This information was taken from the statements of revenues and
expenses for Denton Airport provided by Airport management. Many of the revenue and cost
categories represent aggregated totals of several accounting sub-categories. Revenues from
Airport operations are derived from the following:
• Airport Lease Revenues: Lease revenue is earned from over 30 corporate/conventional
hangars and 12 T-hangar facilities at the Airport.
• Aircraft Storage (Tie-downs): The Airport has a paved aircraft parking apron that has
approximately 60 tie-downs for itinerant and based aircraft use.
• Airport FBO Commissions: These revenues come from a percentage of revenue from
the FBOs, as well as fuel flowage fees for fuel facilities.
• Agricultural Lease: Revenues from agricultural leases of land on the west side of the
Airport.
• Fees and Fines: Revenues include assignment fees, photo shoots, and late fees.
• Airport Miscellaneous Revenues: This category captures all revenue that is not
attributable to the other categories.
Airport Operating Expenses were made up of the following cost items:
• Personal Services: This includes salary and benefit costs of Airport workers.
• Materials and Supplies: This category includes such things as office/building supplies,
postage, and uniform expenses.
• Maintenance and Repair: Includes machinery and equipment, buildings and equipment,
radio equipment, and sidewalks and grounds maintenance and fuel.
• Insurance: Includes the commercial insurance premiums and self insurance premiums
for the Airport.
• Miscellaneous: This includes the Airport Advisory Board expenses as well as other
miscellaneous expenses.
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 32
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
• Operations Expense: The Operations Expense category involves the cost of day-to-day
operations at the Airport, including utilities expense, training, vehicle operations, dues
and fees, office expenses, etc.
• Indirect Allocation: The Indirect Allocation includes the portion of general overhead
costs of the City of Denton that are allocated to the Airport.
• Interfund Transfers: These are transfers to other City Funds for services rendered to the
Airport.
Not included in these operating income and expense statements are the annual
contributions to the Airport from the City and State for capital development grants. Those
contributions are not considered operating revenues by this analysis. Rather, this analysis is
geared to identify the direct revenue producing ability of the Airport, along with its direct
operating costs. In this regard, revenues from gas wells are considered non-operating since they
are not generated by aviation activity. However, they do impact the total revenues generated for
the Airport. As such, any surplus revenues can be applied to non-operating costs such as capital
development, debt service, etc. Thus, for presentation purposes, the non-operating revenues and
expenses are shown at the end of Table 12 to reflect the overall financial picture of the Airport.
Table 12 - Historical Revenues and Expenses
Operating Revenue:
FY2005-2006
FY2006-2007
FY2007-2008
FY2008-2009
Airport Lease Revenues
$202,318
$218,325
$257,639
$292,750
Aircraft Storage (Tie-Downs)
$8,614.68
$8,702
$8,789
$8,877
Fuel Flowage Fees & FBO
Commissions
$120,426
$138,231
$222,769
$176,483
Agricultural Lease
$5,072.48
$5,176
$5,280
$5,385
Fines and Fees
$2,190
$3,750
$0
$1,000
Airport Miscellaneous Revenues
$166.74
$11,572.85
$10,994.76
$8,179.29
Total Operating Revenues
$338,788
$385,721
$505,470
$492,674
Operating Expenses:
FY 2005-2006
FY 2006-2007
FY 2007-2008
FY 2008-2009
Personal Services
$272,632
$323,169
$223,118
$277,561
Materials and Supplies
$5,022
$8,212
$6,850
$8,800
Maintenance and Repair
$17,286
$21,492
$20,486
$58,533
Insurance
$25,863
$19,580
$18,011
$17,350
Miscellaneous
$1,156
$1,345
$1,257
$1,200
Operations
$126,261
$167,947
$161,708
$142,773
Indirect Allocation
$230,712
$240,325
$327,858
$340,972
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 33
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
Table 12 - Historical Revenues and Expenses
Operating Revenue:
FY2005-2006
FY2006-2007
FY2007-2008
FY2008-2009
InteiTimd Transfers
$44,596
$34,700
$43,901
$27,550
Total Operating Expenses
$723,528
$816,769
$803,189
$874,739
Net Operating Revenues/Expenses
$384,739
$431,012
$297,719
($382,065)
Non-Operating Revenues
FY 2005-2006
FY 2006-2007
FY 2007-2008
FY 2008-2009
Gas Well Revenue
$1,152,785
$817,347
$1,732,414
Airport Propeity Tax Revenue
$67,586
$71,143
$74,700
Non-Operating Expenses
Cost of Debt
($204,282)
($200,992)
CIP Local Funding
($765,000)
($410,837)
Net Non-Operating
Revenues/Expenses
$1,220,371
$80,792
$1,195,285
Total Net Revenues/Expenses
$384,739
$789,359
($378,511) 1
$813,219
For purposes of the business plan, the ability of the Airport to generate revenues and
cover operating costs is the primary concern. From the historical information, Total Operating
Expenses grew by an average of 6.5 percent per year from FY 2006 to FY 2009 largely due to
increased maintenance and indirect allocation costs. The increased costs are associated in part
with the new terminal building, new taxiway, and enhanced grounds maintenance. Operating
income has increased by 13.3 percent per year. This is a due to an increase of FBO Commissions
due to increases in flight training and fuel sales. The net operating revenues and expenses deficit
has fluctuated each year but has decreased in FY 2009 by $2,000 dollars compared to FY 2006.
Of significance is the impact of gas well revenue, which can be used to fund capital and other
projects at the Airport. This revenue source has a finite lifespan and as such, should be used in a
manner that creates revenue producing facilities that diversify income production at the Airport.
It is against this historical backdrop that the baseline forecast of revenues for Denton
Municipal Airport is presented. It should be noted that most public-use general aviation airports
in the United States do not cover annual direct expenses with revenues and thus become
subsidized by their owners/sponsors. From this perspective, it appears that DTO has benefited
significantly from the increases in activity and gas well production since FY 2005-2006.
4.2 Baseline Forecast of Revenues and Expenses
This baseline forecast presents a status quo look at revenues and expenses, influenced
primarily by historical activity. It does not consider all of the potential changes at the Airport
that might occur through the implementation of this Business Plan or in the City of Denton's
economy that might change the historical trend. To determine the historical trend, the percent
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 34
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
increase from the fiscal year 2006 to the fiscal year 2009 was examined to find the average
percent change in revenues and expenses. Thus, any major fluctuation during any one year did
not unduly affect the overall trend. The history of non-operating revenues and expenses was not
used to determine the forecast for the planning period. Airport management provided the non-
operating revenue and expense schedules anticipated for the planning period. These will be
verified to the extent possible, later in this plan.
In order to show a conservative baseline forecast, a number of assumptions were used
about the growth of individual line items in the budget. In this regard, the following growth rates
were assumed:
• The future rate of price inflation was assumed to mirror the Consumer Price Index (CPI),
and was estimated at 4 percent per year.
• Tie-down fees were grown by 1 percent per year to reflect the historically slow growth of
pricing of these services.
• Agricultural Lease was grown by 2 percent per year, also because of the history of slow
growth.
• Lease Revenues, FBO Commissions and Miscellaneous categories were grown by the
rate of CPI or 4 percent annually.
• Maintenance and Repair Expense was taken from a list of maintenance projects and costs
that Airport management submitted, which include costs associated with the new runway
and taxiway extensions.
• All other expenses were increased at the rate of CPI.
As shown, baseline operating revenues are anticipated to grow from $459,359 in FY
2009 to $644,069 by the fiscal year 2018 - an average yearly increase of 3.8 percent and an
overall increase of 40.2 percent for the period. Baseline operating expenses, on the other hand,
are expected to increase from $457,011 in FY 2009 to $843,985 by the fiscal year 2018 - an
average yearly increase of 7.1 percent and an overall increase of 84.7 percent for the period.
In addition to operating revenues and expenses, there are non-operating revenues and
expenses. These non-operating accounts include the revenues from the gas wells and the
expenses associated with debt service and capital expenditures. Any operating deficits from the
Airport are taken directly from the gas well fund. Thus, the operating pro forma for the Baseline
scenario has its primary impact on the gas well fund balance, which is anticipated to grow by
$8.7 million over the period.
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 35
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EXHIBIT 2
Denton Municipal Airport
Business Plan
October 2010
When the baseline operational costs are compared with the baseline forecasts of
operational revenues, the net operating costs for the Airport can be predicted as follows:
Table 14 - Baseline Net Operating Income/(Deficit)
Year
Operating Expense
Operating Revenues
Net Operating Income/(Deficit)
2009
$457,000
$459,400
$2,400
2010
$559,900
$473,300
($86,600)
2011
$642,600
$491,800
($150,800)
2012
$662,700
$511,100
($151,600)
2013
$696,800
$531,200
($165,600)
2014
$749,300
$552,000
($197,300)
2015
$890,400
$573,700
($316,700)
2016
$883,000
$596,300
($286,700)
2017
$860,800
$619,700
($241,100)
2018
$844,000
$644,100
($199,9(0)
From Table 14, the net operating deficit is anticipated to grow from -$86,600 in 2010 to -
$199,900 by the year 2018 - a 9.7 percent per year increase. Cumulative net operating revenues
for the period total 41,793,900. However, non-operating revenues currently work to offset these
deficits. When considering both operating and non-operating income, Table 15 shows the effects
of gas well revenue and property taxes on total net revenues. Cumulative net revenues for the
forecast of total revenues and expenses (including non-operating income and costs) are
anticipated to reach +$9,869,500 through 2018. Thus, the favorable airport revenue forecast is
made possible by gas well revenue, which has a finite life.
Table 15 - Total Net Income for Baseline Projections
Year
Net Operating Income/(Deficit)
Net Non-Operating Income/(Deficit)
Total Net Income/(Deficit)
2009
$2,400
$1,120,600
$1,123,000
2010
($86,600)
$785,300
$698,700
2011
($150,800)
$2,070,900
$1,920,100
2012
($151,600)
$1,772,000
$1,620,400
2013
($165,600)
$1,434,400
$1,268,800
2014
($197,300)
$1,412,100
$1,214,800
2015
($316,700)
$1,229,400
$912,700
2016
($286,700)
$947,400
$660,700
2017
($241,100)
$589,900
$348,800
2018
($199,9(0)
$301,400
$101,500
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 37
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
5. BUSINESS PLAN ALTERNATIVES
SEVERAL BUSINESS PLAN ALTERNATIVES WERE IDENTIFIED, ANALYZED, and compared based
on their ability to improve the financial performance of Denton Municipal Airport. The
ultimate goal of the alternatives' analysis for the Airport is to provide the City with
sufficient information to make informed decisions concerning airport operating practices and
capital improvement spending. In addition, the long-term financial viability of the Airport is a
significant part of this analysis. Thus, any increases in operating revenues that result from a
selected plan can then be used to cover the Airport's operating expenses, pay for portions of the
local share of capital development projects, finance additional terminal services, or provide for
other needs at the Airport. In order to present these alternatives, this section is organized to
include the following:
Industry Trends Impacting Denton Airport Analysis
Area-wide Factors Supporting Growth and Development of the Airport
Obstacles to Airport Performance and Goal Attainment
Revenue Enhancement
Impact of Revenue Enhancement Strategies on Potential Demand
5.1 Industry Trends Impacting Denton Airport Analysis
There are at least three industry trends that impact the analysis and recommendations of
this business plan:
Growth in Airport Operations
Cost of New Hangar Development
Cost of Fuel
Airport Operational Count Estimates
In total, 146,000 annual aircraft operations were conducted at DTO in 2009. These
annual ATCT counts do not include activity that takes place when the tower is not operational.
With training operations now taking place 24 hours per day, it can be expected that the Airport
will have as much as 30,000 more actual operations than those recorded by the ATCT. This is
significantly higher than the 2009 TAF forecast of 119,081 and exceeds both the Airport Master
Plan forecast for 2011, and the FAA forecast for 2014.
Impacts of high operational levels to this plan are significant in that the business
strategies must be adapted to this new reality. New thinking spurred by the higher operational
estimates includes the following strategic considerations:
0 With operations approaching 200,000 annually, there is a need to consider a
parallel runway for capacity purposes and to segregate itinerant from training
operations.
0 Hours of operation for the FAA Air Traffic Control Tower were recently
expanded from the former 12-hour shift (8:00 a.m. to 8:00 p.m.) to the expanded
R.A. Wiedemann & Associates, Inc., in association with CHA, Inc. 38
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
16-hour shift (6:00 a.m. to 10:00 p.m.) in the FY 2010 budget and should take
effect this year.
Cost of New Hangar Development
Between 2007 and 2009, hangar development costs have soared with increases in the
price of steel and energy. Reports of T-hangars costing as much as $100,000 per individual unit
(including site preparation) are becoming common. When these costs are translated into 20-year
payoffs toward debt service, monthly rentals of more than $650 must be charged. Such
rents/prices are approaching the market ceiling for hangar rentals. As mentioned later in this
plan, the financial feasibility of hangar constriction may require the use of grant money in the
public sector or private developers using land leases and pre-engineered buildings. Options for
these development possibilities are outlined in the pro formas presented in Section 6.
Cost of Fuel
A spike in the cost of Avgas and Jet A fuel in 2008 created a significant downturn in the
use of general aviation aircraft. Avgas prices in the $5 per gallon range and Jet A prices
reaching as high as $7 per gallon at some airports were record breaking at the time. In this
regard, it was estimated that general aviation activity was down almost 30 percent in some parts
of the nation. In terms of operations, the hardest hit were the personal and training operations,
where the cost of flying typically exceeded disposable income for those activities. The least
impacted segment of aircraft operations has been corporate and business flying. Much of this
activity was maintained through the high fuel price period because businesses can typically pass
their air transportation costs along to their customers. Fuel prices per gallon have abated since
2008 and at Denton Airport are $3.68 for self-serve Avgas, $5.24 for full service Avgas, and
$4.55 for full service Jet A (October 2009). For the future, prices are likely to increase. With
those increases comes the possibility of reductions in operational demand.
5.2 Area-wide Factors Supporting Growth and Development of the Airport
There are a number of factors that now support the potential growth and development of
Denton Airport. These factors are briefly described below.
Airport Location
Regionally, Denton Airport is located north of Dallas and Fort Worth, at the intersection
of Interstate Highways 35E and 35W. From city center to city center, Denton is 39 miles from
Dallas, and 39 miles from Fort Worth. The population growth in the D/FW metro area is moving
north and will likely increase the demand for aviation services in Denton. Locally, Denton
Airport is located adjacent to a developing industrial area west of the City. The Airport's
location is considered a strength, given that it has good access to two Interstate Highways and it
is far removed from residential housing and other development encroachment. The Airport is
located close enough to both Dallas and Fort Worth to serve these communities, yet it is far
enough away from D/FW International Airport to have favorable airspace within the Class B
airspace environment.
or R.A. Wiedemann & Associates, Inc., in association with CHA, Inc. 39
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
Gas Well Revenue Estimates
Gas well revenue estimates are subject to change, depending upon market prices and the
production life of the gas wells on the Airport property. From the Baseline Forecast, it was
projected that gas well revenue of $16.6 million would accrue between now and FY 2017.
Annual revenues are predicted to grow to a maximum of $2.6 million in 2011 and slowly decline
to $1.9 million by 2017. The production curve for these wells is said to decline throughout their
20+ year lifespan. If forecasts of revenues are accurate, the City can look to invest its gas well
revenues in capital projects that will provide future revenue streams or needed infrastructure.
This source of income is unusual at airports and will significantly benefit any projected growth at
DTO.
Growth Trends in City of Denton
Aviation industry forecasts have linked the growth in economic activity and
demographics to the demand for air transportation services. Over the course of the last 10 years,
the Dallas/Fort Worth (D/FW) Metropolitan Statistical Area (MSA) has experienced a 29 percent
growth in population. In Denton, the growth has been even more pronounced, with a positive
change in population of 48 percent since the year 2000. Similarly, employment growth in the
D/FW MSA has totaled 14 percent since 2000. In the same period, Denton area employment has
grown 42 percent. By all measures, the area is out-performing population and employment
growth statistics for the Dallas/Fort Worth MSA and State of Texas as a whole.
The growth in per capita personal income (PCPI) in the Denton area has lagged slightly
behind the D/FW MSA, growing 19 percent since the year 2000, as compared to 22 percent for
the D/FW MSA. Even so, these numbers show a significant and consistent set of growth trends
for Denton, relative to its market area. It would seem that there is linkage between the demand
for air transportation services and economic and demographic trends, as the actual growth
experienced at the Denton Airport from the year 2000 to the present has also been dramatic.
Table 16 lists the major employers in Denton, showing the spectrum of large government,
educational, and business organizations in the area.
I Table 16 - Major Employers in the Denton Area
Employer
Estimated Number of Employees
University of North Texas (Education)
7,762
Denton Independent School District (Education)
2,948
Frito-Lay Inc. (Manufacturing)
2,050
Texas Woman's University, Denton (Education)
1,586
Denton State School, Denton (N:IMR Facility)
1,500
Denton County (County Goverrnnent)
1,458
Peterbilt Motors, Denton (Diesel Trucks)
1,404
Centex Home Equity Phase I & II (Real Estate)
1,400
City of Denton (Municipality)
1,300
EMC Mortgage Corp. (Finance)
1,000
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Table 16 - Major Employers in the Denton Area
Employer
Estimated Number of Employees
Wal-Mart (Distribution Center)
900
Denton Regional Medical Center (Health Care)
800
Thermadyne Holding Corp. (Manufacturing)
751
Presbyterian Hospital of Denton (Health Care)
750
American Building Control (Distribution Center)
710
Trinity Medical Center (Health Care)
700
Household Automotive Finance (Finance)
680
Source: «-«-«-.dentoncountN-.com/dept/main.asp
Denton Plans for Future Development
The Denton Comprehensive Plan 1999-2020 was developed in 1999 to guide the next 20
years of development in the City of Denton. It sets the framework for the organization of new
development and land uses envisioned by the residents. The Plan emphasizes essential services
such as clean water, good roads, and efficient wastewater and stormwater systems. Life issues
considered important to the residents include urban design, environmental quality, and parks.
The Plan was to be updated every five years in the form of ordinances.
The primary goal of the Plan is to "Preserve and retain the qualities that make Denton the
unique and prosperous place it is today and to help it develop into an even better city in the
future." The Plan outlines policies for public involvement, land use, urban design, street
development, historic preservation, environmental management, economic diversification,
housing, schools, and transportation, waste and water services. An implementation plan guides
the City by using tools and timeframes to implement sections of the Plan and how to track the
progress.
The Plan's goal for the Airport is to "Provide aviation facilities that will integrate with
the various coordinated transportation systems." Strategies include:
0 The Airport shall be a key component in the multi-modal transportation system.
The Airport is effectively located to optimize the movement of goods and services
throughout the Metroplex.
0 Maintain and improve Airport infrastructure to promote additional development
through high-quality service and to reduce costly reconstruction.
0 Coordinate with the FAA and State Aviation Division to determine likely funding
of proposed airport improvements. Get in queue for runway extension and
terminal expansion/reconstruction.
0 Plan active property acquisition to avoid inflated real estate costs. Investigate joint
use of low-impact land usage (open space, nature areas, maintenance depots, etc.).
0 Maintain a development pattern consistent with the airport master plan. Work
with neighboring and affected property owners to ensure airport consolidated
land-use districts (ACLUD) are effective. Maintain integrity of Airport height
hazard district and ACLUD.
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0 Investigate public-private partnership agreements to assist with infrastructure and
facility development.
0 Establish a formal western entranceway into the Airport when Loop 288 is
completed to the west side of the airport. Design transportation routes to
maximize trick, auto, and aircraft mobility.
0 Since the Airport is located in the industrial center, it will support activities in the
movement of goods and services of city businesses.
The City has implemented some of these strategies, but many are still in the works and those are
addressed in this Business Plan.
Local and State Development Incentives & Programs
There are a number of incentives for business development and expansion in the Denton
area. These incentives have been developed to spur growth by reducing the costs of expanding
or locating to Denton. In this regard, there are a number of tax abatement programs, electric
utility cost reductions, infrastructure financing, grants, reduced educational costs, and other
benefits for growing companies. The purpose of these programs is to expand economic
development in the Denton area, bringing new jobs and a higher standard of living. A side
benefit of this economic growth is greater demand for aviation services at the Airport. Appendix
D presents a more detailed listing of these state and local incentive programs.
Summary of Factors Supporting Growth and Development of the Airport
The factors discussed in this section point toward a highly positive environment for
continued growth and development in Denton which translate into opportunities for growth at
Denton Airport. In fact, growth and development trends in the Dallas/Fort Worth Region, and
Denton in particular, are encouraging, as evidenced by growth in population, employment, and
income. Additionally, the City has identified the Airport as offering excellent potential for
business development and has committed significant financial resources in recent years. All of
these factors support a future of growth and development at the Airport.
5.3 Obstacles to Airport Performance and Goal Attainment
In addition to factors that support growth and development of Denton Airport, there are a
number of factors that present challenges to such growth. The following briefly identifies these
obstacles.
Competition with Other North Central Texas Airports: The future success of
Denton Airport must be considered in light of other airports in the Dallas/Fort
Worth metro area that compete for the local market of general aviation activity.
In particular, nearby airports such as Alliance, Addison, and Collin County all are
competing for corporate and business jet aircraft. These airports alone account
for nearly 860 based aircraft, of which, 235 are jets. DTO success in competing
for based aircraft and in filling new or existing hangar space with business and
corporate client is enhanced by the Airport making a compelling value
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proposition to the local market to capture activity that may have options at other
regional airports.
Ground Access to the West Side of the Airport: Once the runway extension is
completed, convenient ground access to the west side of the Airport will no longer
be available. Development of that Airport property and surrounding land will
require adequate access, such as the proposed Loop 288. Without this access,
significant development cannot be expected in the near term.
Land Saturation: Other development around the Airport may threaten DTO's
expansion capability or operational flexibility. There are floodplain issues around
the Airport and the east side has only about 25 percent more expansion available
on the landside area. Without adequate land for runway expansion, the Airport is
limited in what types of aircraft can be served in the future. Similarly, without
adequate landside area, the Airport's operational activity will cease to grow,
simply because users have no place to park or store their aircraft at the Airport.
Class B Airspace: Currently the Class B Airspace surrounding the Dallas/Fort
Worth area begins at 4,000 feet above DTO. (Class B airspace resembles an
upside down wedding cake.) If greater airspace restrictions are placed on the
Airport in the future, it may result in reduced activity levels.
Other Limitations: As listed in the SWOT analysis, there are a number of other
limitations or threats to the continued growth of the Airport, including, but not
limited to:
- Airport Security
- Tower Personnel Workload
- Municipal Site Plan Approval Requirements and Associated Delays
- Potential Conflict Between Training and Corporate Aircraft Operations
- Potential Future Reductions in Flight Training Contracts
- General Aviation User Fees in National Legislation
- Another Significant Downturn in the National Economy
- Airfield Capacity Constraints
- Lack of Utilities on the West Side
- Cole Ranch Residential Development South of DTO
All of these factors have the capability to constrain growth and development of
the Airport to its fullest potential.
5.4 Revenue Enhancement
Considering the positive factors and obstacles discussed in previous sections along with
current activity levels and financial conditions at Denton Airport, there are a number of ways to
increase net revenues and improve the long-term financial viability of the Airport. Generally,
such strategies can be understood as those which either increase revenues or cut costs. In this
section, revenue enhancement strategies are presented that focus on either increasing aviation
activity or increasing rental fees. Elements of these strategies include the following:
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Extension of Runway 17-35: The extension of Runway 17-35 to a length of
7,000 feet is an ongoing project that will help the Airport accommodate regional
aviation demand. This extended runway length will provide the ability to attract
potential specialty air cargo activity, larger business j ets for
Maintenance/Repair/Overhaul (MRO) activities, and more FAR Part 135 charter
activities associated with athletics or vacation travel. During hot summer days,
the added 1,000 feet of runway will extend flight stage lengths for some aircraft
and permit greater payloads for others. By increasing the size of aircraft that can
use the Airport, additional revenues can be generated.
Addition of a Parallel Runway: The potential addition of a parallel runway on the
west side of the Airport would increase the capacity for Denton Airport and
permit the separation of training activity from corporate and other aircraft
operations. By increasing the capacity, DTO would gain potential to attract more
aircraft activity. These activity gains are usually accompanied by increases in
fuel sales, aircraft maintenance work, and aircraft storage fees. There are two side
benefits of this additional runway. One is an increased margin of safety. The
other benefit is a reduction in the financial impact to tenants during scheduled
runway maintenance.
0 Attraction of Corporate Aviation: The attraction of new corporate aviation
activities, including transient operations and based corporate tenants at Denton,
can be linked to the provision of corporate and business amenities at the Airport.
This would include upscale FBO service, longer runway length, growing business
activity in the Denton area, and attractive fee schedules. When successful, new
businesses create significant revenue enhancement for airport sponsors. Possible
jet tenants could include those currently basing at other regional airports, new jet
owners, or companies that manage fractional ownership of business jets.
For an average 400-hour flight year, a medium corporate jet can consume
between 85,000 and 100,000 gallons of jet fuel (for a Learjet 60 or Citation
Excel). Large business jets can use between 180,000 and 200,000 gallons of jet
fuel (Gulfstream 550 and Global Express). If only half of this fuel is purchased at
the Denton Airport, it could still increase fuel flowage revenues significantly.
These benefits do not include the potential aircraft storage fees, maintenance
expenditures, or jobs created by new flight crews and maintenance personnel.
• Hangar Development: The attraction of new business aviation users and based
corporate flight operations to the Airport can be accelerated through the
development of aircraft storage hangars, which also provide additional sources of
revenue for the City. Currently, there are 134 T-hangar bays that encompass
155,000 square feet and 38 conventional and box hangars with a total storage
capacity of approximately 568,000 square feet. The paved aircraft parking apron
has 75 tie-downs for itinerant and based aircraft and is approximately 30,000
square yards. Because of significant recent price inflation, conventional hangars
may be more cost-effective to develop because of their flexibility to accommodate
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small aircraft in the near term, and larger aircraft as business/corporate aviation
activity increases. Conversely, T-hangars are limited in their ability to
accommodate only smaller aircraft. Different methods of funding hangar
development are presented in Section 6 of this plan.
Airport Branding: Branding is the process of developing a unique identity for a
product or service in a given market, which can be defined as both the geographic
area and the conceptual space occupied by service providers in competition for
customers shopping for such services. In this regard, the development of a unique
selling point and identity in the market for Denton Airport can be beneficial to the
future growth of the Airport. Currently, the Airport brand is not well defined. In
the past five years, the Airport has outgrown its former image of being a relatively
inactive municipal airport. Instead, the current level of corporate aviation and
pilot training activity at the Airport indicate a change in the image and direction
of the facility. From a branding standpoint, this may include a name change for
the Airport, new logo, upgraded website, new Airport entranceway, or marketing
campaign.
New or Improved Terminal Services, Amenities, and Activities: This business
plan examined a number of existing terminal services, airport amenities, and
activities. Services and accompanying facilities that have been suggested include:
- Airport restaurant,
- Public transportation to and from the Airport and the City,
- On-Airport satellite car rental station,
- Terminal building expansion, with an Automated Teller Machine (ATM)
within the terminal building,
- Convenient hotel near Airport property,
- U. S. Customs facilities and services that may attract international flights
from Mexico and other countries,
Also, if corporate activities continue to increase, greater airfield security is needed
to assure aircraft owners that their property is safe against vandalism or theft. The
Airport could also benefit from a formal entrance that uses a new branded logo,
colors, etc., to project the upscale image of the facility. It functions as the
gateway to the community for air travelers who use Denton Airport and often
helps form their first impressions of the area. As such, it conveys much about the
professionalism and image of the City itself.
Maintain/Increase Training Activity: Because the Airport may become
committed to significant training activity (increased staffing of the Tower, FBO
commitments for aircraft, hangar space, mechanics, etc.), there is a potential
downside to the Airport should future training contracts be cancelled or lost to a
competing airport. For this reason, a diversification of flight training clients may
be needed to ensure that future activity levels meet expectations. As such, the
encouragement of the North Texas University Provost and faculty to include
flight training in their new aviation program is warranted.
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0 Attraction of Specialty FBO(s): The City should be prepared to deal with
requests and offers from large specialty FBOs that desire to locate at Denton
Municipal Airport. Such companies could include Maintenance/Repair/Overhaul
(MRO) operations, specialty engine repair, aircraft manufacturing, or other
similar types of operation. Denton is a location where unexpected business
ventures can materialize on relatively short notice. Because the Dallas/Fort
Worth area is a major economic activity center, aviation businesses desiring to
locate in the metro area have a variety of airports from which to choose. As a
result, DTO has a significant target market of aviation related business and
industry to pursue. There is no accurate method that can predict when
opportunities of any size will occur. However, the City should be prepared to
take advantage of such proposals. The Potential locations on the east and west
sides of the Airport exist for such expansion, however, west side options were not
included as near term opportunities.
Gas Well Revenues: The forecast of revenues from gas wells on the Airport will
add to the Airport's bottom line. However, the spending management for these
revenues will be important in helping the Airport to develop revenue producing
facilities or needed infrastructure. These funds can also be used strategically to
reduce debt and its associated interest expense. FAA Order 5190.6B states that
"A sponsor may use its airport revenue to repay funds it contributed to the airport
from general accounts or to repay loans from the general account to the airport
provided the sponsor makes its request for reimbursement within six (6) years of
the date on which it made the contribution (See 49 U.S.C. § 47107(1))." Thus,
historical revenue shortfalls can be recovered from gas well revenues. This may
or may not be the best use of these revenues from a strategic investment
standpoint.
Rates & Charges Analysis: One method to potentially increase revenues is to
examine rates and charges at the Airport and adjust those to be competitive with
the regional market prices. For Denton, the lease rates may be underpriced and
could over a period of years be increased to reflect market values. The schedule
of fees will be examined to see which ones are impacted by the City and which
ones are exclusively controlled by the FBOs. Those that are City controlled can
be changed as needed to increase competitiveness or improve revenues. Differing
pricing strategies will have a varying influence on overall revenues to the Airport.
West Side Aviation and Non-Aviation Property Development: At Denton
Airport, there are approximately 200 acres of open land on the west side of the
existing runway with an additional 150 acres of land that could be acquired for
development. Of these, approximately 50+ acres are available for potential non-
aviation development. Figure 5, presented in Section 3, shows an ultimate
potential development scheme for the west side. Airport property that will not be
needed for aeronautical purposes can be developed for non-aviation uses to
increase revenue production at the Airport. To obtain land releases from the
FAA, the Airport must agree to devote all revenues from that land to the operation
or capital improvement of the Airport. Significant development of the Airport's
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west side was not assumed until after the 2018 timeframe. Thus, revenue
production from this source was limited to the east side development for the
planning period. For the east side, there is roughly 35 acres remaining of
undeveloped property that can be used for either aviation or non-aviation
development.
5.5 Impact of Revenue Enhancement Strategies on Potential Demand
The first step in determining the impacts of the revenue enhancement strategies is to
predict the change in aviation demand that would occur if each strategy were implemented.
Table 17 presents a listing of the potential demand changes along with the assumptions used in
estimating demand changes. As shown, if all activity-generating strategies are undertaken,
aviation demand could be anticipated to grow by 80 based aircraft and 50,400 aircraft operations
by the year 2018.
Some of the strategies listed in Table 17 work together and cannot be adequately
separated, such as the effects of branding versus other marketing efforts for the attraction of
corporate aviation or more training activity. Similarly, the addition of a parallel runway would
enhance aircraft training operations and safety by providing an alternate runway for their use.
For this reason, some categories were cross-referenced in the demand estimation process. In
addition, there are a number of activities that may impact revenues, but will not impact overall
aviation activity levels. This would include strategies such as Gas Well revenues, Non-aviation
Property Development, and the new Terminal Services and Amenities described in this Plan.
Table 17 - Impact of Revenue Enhancement Strategies on Potential Demand
Strategy
Assumptions
Based Aircraft
Operations
Current
Source: FAA 5010, March 2009
179
180,000
Rumvay 17-35 Extension
Permits use by larger corporate aircraft.
Assume attraction of itinerant jets.
2
2%
New Parallel Rumvay
Permits up to 50,000 more operations
(primarily training).
See Training Activit-
Attraction of Corporate Aviation
Marketing corporate sectors through
branding, added capacity, and services.
20
4%
Assume 200 operations/based business
aircraft plus itinerant operations.
Training Activity
University flight program added to
expanded international and domestic
6
10%
student pilot training. Assume 3,000
operations per training aircraft annually.
Hangar Development
Increases based aircraft capacity in
concert w/new parallel rum-ay. Assume
35
6%
300 operations/based aircraft.
Airport Branding
Marketing efforts to promote Airport to
See Corporate Aviation and
targeted segments of demand
Training Activity
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Table 17 - Impact of Revenue Enhancement Strategies on Potential Demand
Strategy
Assumptions
Based Aircraft
Operations
New Terminal Seivices
U. S. Customs may attract flights from
Mexico. Other amenities may increase
N/A
<1%
value-added experience but not assumed
to increase based aircraft
Additional Specialty FBOs
For post-2018, new. large specialty FBOs
were assumed to locate on the west side
N/A
N/A
of the Airport No activity gains were
assumed for pro formas.
Gas Well Revenues
Should increase overall revenues but not
impact aviation activity.
N/A
N/A
Rates & Charges
Pricing below market may increase
activity; pricing above market may
Assume Zero Net
decrease activity-.
Non-Aviation Property Development
Should increase overall revenues but not
impact aviation activity. West side
N/A
N/A
development revenues not assumed until
post-2018 period.
Additional Growth From Plan
Includes all strategies
65
22%
Total Activity - Year 2018
244
219,600
As mentioned in Section 3, Airport Management has a higher number of based aircraft listed in
their records. It is believed that these will eventually show up in FAA 5010 reports as new
inspections are undertaken. Importantly for this business plan, the actual number of existing
based aircraft will not impact future revenue projections because only the growth in based
aircraft (65) is used in the projection methodology.
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6. RECOMMENDED PLAN
THE RECOMMENDED BUSINESS PLAN FOR DENTON AIRPORT focuses on methods that the
City of Denton can use to maximize future growth opportunities for the Airport. As
mentioned in Section 1 of this plan, the Airport has significant opportunities to develop
future revenue. These opportunities stem from the physical expansion of the Airport, coupled
with the aviation demand growth in the greater Dallas metro area. This business plan outlines
the possible steps the City can take to improve revenues by expanding its ground leases or
developing revenue producing facilities with gas well revenue. The business plan also suggests a
future change from general fund to enterprise fund status for the Airport. The sections that
follow summarize the recommended Business Plan for the Airport.
6.1 Recommended Management and Policy Actions
The first steps toward managing the growth at the Airport may include accounting
changes for the Airport to better track revenues and expenses in the future. As the Airport moves
from a General Fund supported department in the City to a revenue producing Enterprise Fund,
the FAA will require that all revenues from the Airport be accounted-for and spent on Airport
related activities. Recommended actions to account for these net revenues include the following:
Establishment of an Enterprise Fund
Enterprise funds are used to account for the acquisition, operation and maintenance of
governmental facilities and services that are entirely or predominantly self-supporting by user
charges. The operations of enterprise funds are accounted for in such a manner as to show a
profit or loss similar to comparable private enterprises. Enterprise funds are often created as a
means to ensure that tax dollars are not required to provide annual operating cost or future capital
improvements of the airport. Communities that accept this general law statute do so with the
intent that user charges will be set at appropriate levels to cover the activity's operating cost and
capital improvements. The theory behind this practice is that the users of services should pay for
all costs, as they create the specific demand for service.
Enterprise funds are no longer solely used to account for governmental activities that are
like commercial activities. As defined by GASB 34, enterprise funds may be used to report any
activity for which a fee is charged to external users for goods and services. The need for an
enterprise fund may be triggered if any one of the following criteria is met:
• The activity is financed with debt that is secured solely by the revenues from fees,
charges or other revenue from the activity. Debt that is secured by revenues from fees,
charges and other revenue from the activity still has the full faith and credit of a related
primary government or component unit, even if that government is not expected to make
any payments. Debt service is not payable solely from fees and charges of the activity,
but should be scheduled as payable "solely" from the revenues of the activity.
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• Laws or regulations require that the activity's costs of providing services, including
capital costs (such as depreciation or debt service), be recovered with fees and charges,
rather than with taxes or similar revenues.
• The pricing policies of the activity establish fees and charges designed to recover its
costs, including capital costs.
State unemployment compensation funds, turnpike authorities, lotteries, airports, and
public colleges and universities are examples of activities that may be accounted for as enterprise
funds. Once it is determined that an activity should be accounted for in an enterprise fund, a
separate fund should be established for each distinct service provided by the governmental unit.
Separate accounting entities facilitate the measurement of costs incurred to deliver each service.
Segment information disclosure may also be required for enterprise funds.
Some communities have actually established enterprise fund operations that are not self-
supporting and are supported by taxes to a certain degree. This mainly happens when fees are set
too low and revenues taken in do not cover operating expenses and/or capital improvements.
Conversely, some communities opt not to establish enterprise funds and allow any surplus
generated to be added to its general fund surplus and used to fund other operations not associated
with the activity. This practice is not permitted at airports that have grant assurance covenants
with the FAA because of its ban on revenue diversion.
If the City decides to operate the Airport as an enterprise fund a slightly revised
accounting system would be used for Airport revenues and expenditures. By law, an
"enterprise" fund is self-sustaining, meaning that all expenditures must be directly related to the
operation, maintenance, repair, and management of the City's Airport. Revenues to the Airport
enterprise fund would be kept separate from other municipal funds and uses and cannot be co-
mingled with funds for any other activities.
FAA Policy on Revenue Diversion
An overriding concern that would cause the City of Denton to consider the establishment
of an Enterprise Fund for the Airport involves the FAA policy on revenue diversion. In this
regard, airports receiving Federal Assistance must restrict their use of airport revenue for strictly
prescribed airport purposes (Title 49 U.S. Code 47107(b), 47133). When airport revenue of a
federally assisted airport is used for other than airport capital costs and operations, with few
exceptions, it is generally considered an unlawful airport revenue diversion. The FAA issued a
policy statement on this issue, which went into effect February 16, 1999. According to the
policy, any airport that receives Federal financial assistance must sign assurances, as part of the
Grant Agreement, that the revenue generated by the operator will be used only for purposes
related to the airport. The assurance also prohibits the diversion of airport revenue to non-airport
use. The policy statement tends to offer general guidance, with only limited discussion of the
application of the airport revenue-use restriction to specific situations.
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The FAA relies upon several means for monitoring compliance with its revenue use
requirements and interpreting those requirements:
• The sponsor's annual auditing report on revenue use required by statute.
• Single audit reports as authorized.
• Investigations prompted by third-party complaints pursuant to 14 CFR, Part 16.
• Department of Transportation, Office of Inspector General Audits
• Publicly available FAA Chief Counsel and DOT General Counsel Opinions.
• Guidance letters issued by TxDOT Aviation Department Staff based on specific fact
situations presented by operators.
Information on the application of the airport revenue-use requirements to a specific situation is
developed through these monitoring activities. Thus, information pertaining to revenue diversion
cannot be found at a central location, but is contained in all of the above sources. It is important
to remember that revenue diversion is typically "alleged" and not an obvious finding in most
cases. Cases such as these require in-depth investigations conducted by FAA and, when required
or requested, by the Office of Inspector General (OIG) within the Department of Transportation.
The origin of this policy was with airlines that believed it was unfair to charge them high
rates that created surplus revenues which were then spent off the airport on non-aviation projects.
A lawsuit at Los Angeles International Airport helped define cost strictures that were permitted
and those that were not. For example, an airport sponsor cannot give excess land to its own
parks department for athletic fields. Rather, market rates have to be charged and applied to
airport revenues.
For Denton Airport, the concept of revenue diversion is important, since there is likely to
be a significant surplus net revenue stream for the long term future. This money can be
reinvested in the Airport's infrastructure. For example, revenue producing hangars can be
reconstructed when they reach the end of their useful life. Other projects, as needed, could be
funded from this surplus as well.
Recommended Action for Denton Airport
For Denton Airport, it is recommended that:
The City of Denton should set up an Enterprise Fund accounting
structure for the Airport after FY 2009-2010.
This accounting change will require that the City track all revenues and expenses associated with
the Airport. In this regard, the indirect allocation that the Airport pays will be augmented by the
5.0 percent Franchise Fee plus a 3.5 percent Return On Investment fee that is paid by other City
enterprise fund activities such as the Electric, Water, Waste Water, and Solid Waste funds. The
Airport would be operated the same as these enterprise funds by virtue of its ability to produce
more operating revenue than operating expenses.
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To accomplish this change, several preparatory steps must be taken. These include, but
are not limited to:
• Treating Range Resources Surface Lease Revenue as an operating revenue similar to
other on-Airport lease revenues.
• Identifying the indirect allocation expense that the Airport pays each year, based in part
on the Maximus Report.
• Using Gas Well royalty revenues (not related to surface leases) as a capital investment
pool, similar to how it is being used today, except for the surface lease revenue portion.
• Preparing to pay to the City and reserving a 5.0 percent Franchise Fee plus a 3.5 percent
Return On Investment fee based on gross revenues of the Airport.
As an enterprise fund, the City would benefit from development of additional revenues from
ground leases or constriction and ownership of hangars or other aviation related facilities. This
would include hangars that reverted ownership to the City by virtue of reversion clauses in lease
agreements. As part of the transition to an enterprise fund it is recommended that:
The City of Denton should identify an Advisory Board or Commission to
provide policy recommendations for the Enterprise Fund
Reversion Clauses
Reversion clauses have become normal in the aviation industry for a number of reasons.
These include maximizing future revenue streams and maintaining a level of control over the
development and maintenance of facilities on the airport. Each airport has its own lease language
and different approaches to the issue. At Denton, the current lease language supports the
reversion of property improvements to the City. From our analysis, it can be shown that the
Airport will have greater financial production with the reversion clauses than without. Even if
there are individual cases where a negotiated lease term increase or other modification that
postpones the actual property reversion is reached, the prime motivation is because of the
reversion clause. Thus, the reversion clause is a valuable part of the Airport's future revenue
stream and should remain in place. Therefore, it is recommended that:
The City of Denton should retain its interest in leases that specify a reversion
of ownership of leasehold improvements to the City.
Once a property reverts to City ownership, it is incumbent upon the City to seek rental
rates as close to market value as can be negotiated. It is understood that this may be difficult
with tenants that have constricted their hangars and now must pay more for them after 30 years
of leases. However, the value of the hangar or other property is that it adjoins the Airport
runway system. Thus, its location is functional to its value. Likewise, extending the lease
should have some value above prevailing ground lease rates.
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Staffing
As the Airport continues to grow and attract more activity, the staffing should also
expand. Currently, four full time staff operate the Airport. This covers business hours, but after-
hours are difficult to fill, since the current staff is stretched so far. It is recommended that an
additional staff position be created that would assist with virtually all aspects of airport operation
and management. This addition will increase personnel costs for the Airport, but will benefit the
management team over the long run, by reducing the amount of overtime work and other burnout
inducing factors. Therefore, it is recommended that:
The City of Denton should increase Airport staffing to include at least one
additional staff resource.
This staffing increase should occur in the near term - either FY 2010-2011 or FY 2011-2012.
Capital Development and Revenue Producing Projects
From a policy standpoint, it is recommended that the gas well revenue continue to be
reserved for capital development purposes or specific programs. These purposes should include
the payment of local share capital costs for Airport improvement projects as well as investment
in revenue-producing projects. Non-revenue producing projects include matching local share
funding for runway and taxiway projects and the like. Revenue-producing projects, on the other
hand, involve hangar and other building development that will produce long-term revenue
streams for the Airport. In Texas and around the nation, this is a very common practice, as
airports own their own hangars, fuel farms, etc. Examples in Texas where the airport owns some
or all of its hangars include: Sugar Land Regional, Taylor Municipal, Stephenville Municipal,
New Braunfels Municipal, North Texas Regional, and Kimble County, to name a few.
Therefore, it is recommended that:
The City of Denton should consider investing in revenue producing
development to ensure future financial self-sufficiency.
Retention of Existing Business/Corporate Clientele
Existing business and corporate clients represent a large part of Airport activities, as well
as sources of revenues at Denton Airport. Additionally, each contributes jobs to the local
economy. Looking forward, it is important for the Airport to retain these operators as a baseline
to preserve current revenue streams. The retention of existing clientele requires care and
communication, particularly in this difficult economic environment. Today, there are no regular
meetings held with existing tenants. Airport management indicated that the Airport has hosted a
hamburger cook-out in the past to communicate the constriction phasing plan for the runway
constriction and that a portion of the Airport's website will be devoted to tenant feedback. In
striving to meet and exceed customer expectations, the City of Denton should consider
expanding its communications with Airport tenants. Therefore, it is recommended that:
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Denton Municipal Airport
Business Plan October 2010
The City of Denton should meet quarterly with existing clients and tenants
to solicit feedback on economic and service issues facing tenants.
Such quarterly meetings with tenants should seek to learn of future plans for operations at the
Airport or changes to their corporate flight operations that may affect the Airport. In this way,
the City of Denton will be better positioned to provide assistance where appropriate for
expansions, or take steps to address any negative issues that could decrease use of the facility by
these clients.
6.2 Revenue Enhancement Recommendations
Revenue enhancement options for Denton Airport are based upon the Plan's
recommended business response to aviation demand growth in the region. The sections that
follow describe how a number of options might improve revenues for the Airport. The projected
levels of enhanced revenues, which are presented in tables at the end of this section, reflect these
and other specific initiatives recommended by this Plan.
Airport Branding
The current Denton Airport brand has been defined by aviation business that has been
"home grown" at the Airport. In the past five years, the Airport has evolved from its former
image of being a municipal airport focused on service to general aviation pilots for recreational
and personal flying. Instead, the current level of corporate aviation and pilot training activity at
the Airport indicate a change in the image and direction of the facility. From a branding
standpoint, this may include the need for a name change for the Airport, new logo, upgraded
website, new Airport entranceway, or marketing campaign. Ideally, a branding process should
precede marketing and promotional campaigns so that materials and communications sent can
benefit from the new Airport identity.
The focus of Airport branding for DTO should be toward business aviation, education,
and training. The business and corporate aviation focus is paramount in improving the revenue
picture for the long term. However, pilot training has also become a very valuable activity
source for the Airport. With UNT becoming the focal point of aviation education in the region,
there is a natural bridge toward pilot training at the Airport. The term "education" is viewed
favorably by most people, whereas the phrase "pilot training" does not convey the same image.
Negatives associated with pilot training may include a perception of noise generation, high
activity, and possibly safety concerns. Thus, crafting the Airport brand must include
consideration of potential upsides to the mix of activities at the Airport. This includes the
spreading of revenue generation to several different activities rather than relying on one segment
of demand.
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 54
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Denton Municipal Airport
Business Plan October 2010
While this business plan is not commissioned to specify a new Airport brand, suggestions
toward this end are included. In this regard, potential name changes and taglines are suggested
as follows:
• Denton Regional Airport
• Denton Regional Jetport
• Dallas/Fort Worth Regional Airport
• Dallas/Fort Worth Executive Airport
The terms "Jetport" and "Executive" imply a primary business use. This may be too strong for
the Airport due to its current role in pilot training. However, the concept of geography should be
included in the name, along with the size of the facility (regional versus municipal), and its target
clientele.
Taglines for the Airport can build upon the brand image and help to convey more than the
name implies. The existing tagline "North Texas Airport of Choice" is serviceable, but lacks
information describing its brand. Thus, for the Airport, the following taglines (among others)
could be considered:
• "DiFW's General Aviation Business Hub "
• "D'FW's Top Business, Education, and Training Airport"
• "Where Business, Education, and Training Excel"
These and other concepts should be explored by the City as they change the legal name of the
Airport from Denton Municipal to a name more closely tied to its evolving image and brand.
Therefore, it is recommended that:
The focus of Airport branding for DTO should be toward business,
education, and training.
In addition:
The City of Denton should consider renaming the Airport, once the
branding activities have begun.
This process may require the allocation of resources for the design of a new logo. This can be
accomplished through a design agency by invitation or by using an RFP process.
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 55
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Denton Municipal Airport
Business Plan October 2010
Communicating the Brand
Communication of a new Airport brand would utilize the normal channels of media,
including direct mail (to potential corporate users), print media, web page design, and industry
conferences (NBAA, TxDOT/TTI, and AAAE). In addition, the new social media can be used
effectively by airports to promote their brand awareness. In this regard, the use of Facebook,
Twitter and even YouTube is growing as a means for airports to stay in touch with their users.
These sites offer an opportunity for the Airport to connect directly with users on their terms and
in ways these users already connect with other brands. While utilizing such tools is relatively
new to the aviation industry, just a few minutes of searching on these and other sites revealed the
following aviation/airport-related results:
Communities of Enthusiasts Use these Sites: Interestingly, a "Support General
Aviation" page on Facebook has 1,570 members. Exploring this community of
general aviation enthusiasts could uncover insights for generating interest and
activity at Denton Airport.
A Compelling Case: Akron-Canton Airport: Located approximately 15 miles
outside of greater Cleveland, the airport is making tremendous strides utilizing
new media. The airport maintains two blogs, has more than 1,800 followers on
Twitter, and over 10,600 fans on Facebook. A YouTube post of their capital
improvement plan has already had over 4,000 hits.
The use of new media is a means to communicate directly with those who are passionate about
and rely on general aviation for business, training, and recreational travel. Such tools offer a
new opportunity to create "fans" where the Airport can engage directly with users who will
ultimately contribute to the Airport's brand. Therefore, it is recommended that:
The City of Denton should include new media as part of its growth strategy.
To accomplish this, the City of Denton should select the best tools (blog, Facebook, Twitter,
YouTube, etc.), that can help the Airport break into this new territory. Also, there may be an
opportunity to assign this task to existing administrative staff that updates the Airport website.
Social networking as a strategy for communicating the Airport brand requires regular attention,
therefore the media utilized should be updated regularly (at least once per week).
Attraction Corporate/Business Aviation
As the general aviation industry has evolved, most airport owners, sponsors, and
operators throughout the country have recognized that corporate/business aviation provides a
higher source of revenue to airports than recreational general aviation. This is especially the case
given the rising costs of fuel, which business users can more easily pass on to customers. For
Denton Airport, the international contract pilot training business of US Aviation Group has
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 56
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
similar diversification qualities. Both of these areas of business should be encouraged and
pursued.
One of the benefits of being located in the greater Dallas area is the amount of aviation
demand searching for airport locations. Unlike many general aviation airports in other parts of
the nation, Denton Airport has had a significant number of inquiries from businesses and aircraft
owners desiring to locate at the Airport. Most other general aviation airports have to pursue
marketing leads and generate their own list of potential tenants. Thus, Denton's job of screening
potential tenants is much easier, as Airport Management sifts through the backlog of calls and
requests. Two facility developments will encourage more corporate aviation at Denton Airport:
• The on-going runway extension
• The development of corporate aviation hangars.
In this regard, the expansion of the runway to 7,000 feet, coupled with the Airport's development
of hangar facilities should serve to accommodate inquiries received.
To ensure that sufficient exposure is given to these facility developments, it is
recommended that a formal program announcing these developments is undertaken. In this
regard, detailed contact information for corporate and business aircraft owners can be used for
direct mail marketing. Preliminary queries of data available from Avantextu indicate that there
are over 2,600 multi-engine aircraft registered in the North Central Texas region. Registered
aircraft owners include individuals and corporations, co-owners, and partnerships. Prior to the
completion of expanded facilities, it is recommended that:
The City of Denton should initiate a direct marketing information campaign
targeting business and corporate aviation.
A direct mail campaign is relatively inexpensive and can use the brochure and target
mailing list generated as a part of this business plan. One focus is to identify owners that might
be willing to relocate their aircraft to Denton and work toward securing pre-sale commitments
for new hangars. Additionally, Internet marketing through social networking sites offers an
inexpensive method for engaging prospective tenants and transient activity as the facilities are
developed.
Hangar Development
There is a significant demand for additional hangar space at Denton Airport. This
demand can be accommodated through a variety of methods. The primary methods analyzed in
this analysis include the following:
Avantext, Inc., Aircraft and Airmen CD, 2009
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 57
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
• Ground Lease with private hangar development
• City development of new hangars
• Combination of City and private hangar development
These methods were used in evaluating potential net revenues to the Airport, based upon demand
forecasts through the year 2018. Estimates of hangar demand were generated from the activity
forecasts. For the period, an estimated need of 165,000 square feet of additional hangar space is
predicted. On the Southeast Taxiway area, it was estimated that a total of 22 acres and 288,000
square feet of developable hangar space is available. Thus, all of the predicted demand will fit
into the land area available on the east side of the runway.
This is not to say that the west side development will not occur before 2018. Rather, it is
to say that the business options evaluated in this plan use only the east side development area in
ascertaining the feasibility of each hangar development option. For this analysis, it was assumed
that the site preparation for the hangar development cost $10 per square foot, while constriction
of the hangars themselves cost $40 per square foot. The need for hangar apron or taxiways
resulted in a total cost of near $60 per square foot of finished hangar space. Some projects
would be less expensive and some more. It is recommended that:
The City of Denton should seek the development of hangar space
and other revenue producing buildings as demand warrants.
As activity at Denton Airport increases, requests for hangar space can be taken until there
is enough critical mass to warrant constriction of hangars. In some cases, private sector
constriction costs are believed to be significantly lower than similar public sector costs. This
cost differential may reduce demand for some portion of City-built hangars. In the event that
private developers of hangars desire to lease property for hangar constriction rather than to lease
completed hangar buildings, the City may consider the combination option of ground leases and
City-constriction of hangars. In this regard, private constriction of hangars with ground leases
should be allowed on a case-by-case basis. However, for City-sponsored development, pre-sale
commitments should be secured prior to the use of public money to prepare land or develop new
hangars or buildings.
Aviation Education and Pilot Training
An important segment of Denton Airport's business is the pilot training that is conducted
by US Aviation Group and others. Operational growth supporting increased Control Tower
hours, increased fuel sales, hangar storage area, and aircraft maintenance activities can be
attributed in large part to the growth in the pilot training business. For the short and intermediate
future, this component of Denton's demand is an integral part of the Airport's overall success. If
the University of North Texas (UNT) adds a flight training program to its aviation curriculum, it
will bring with it the prestige of the State university system to the Airport. While there have been
discussions regarding whether or not training activities hurt the corporate aviation business and
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 58
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
overall Airport brand, there is no argument about the current significance of the economic impact
(in terms of local jobs and income) of pilot training.
The recommendation of this business plan is to promote and continue the aviation
education and pilot training brand. Working with US Aviation Group and UNT, the City can
develop capacity enhancements such as a new parallel runway, an on-airport student pilot
dormitory, and extended Control Tower hours needed to demonstrate a safe flying environment
for corporate aviation. As such, it is recommended that:
The City of Denton should encourage aviation education and flight
training as a part of its core brand while maintaining general aviation service
for individual pilots.
West Side Development
At Denton Airport, there are approximately 200 acres of open land on the west side of the
existing runway. Figure 7 shows the full aviation development of that area. Shown in the
concept plan is a parallel runway that should be constricted in the near term to relieve training
activity on the main runway. Thus, it is recommended that:
The City of Denton should plan for the development of a parallel runway on
the West Side to accommodate pilot training activity.
In addition to the 100 acres of airport-related development area west of the airfield, the
concept also displays a potential of nearly 100 acres on existing airport property for a potential
on-airport business and industrial park, with instant access to the Airport as well as the Loop 288
highway corridor. Within this area, there are two existing gas wells sites that are approximately
two acres each that provide revenue to the Airport for future development projects.
Development of the west side is believed to be several years away, barring the possibility that a
large tenant requiring significant property desired to locate there in the near term. However, by
developing a helipad in the near term and possibly a parallel runway in the intermediate term on
west side of the existing runway, aviation demand for the west side property may be jumpstarted.
The conventional wisdom suggests that Loop 288 highway will open and encourage
development on that side of the Airport. Timing, then, for revenue development from this
property would likely occur in the post-2018 period. However, this area remains a significant
future potential revenue generator for both aviation and non-aviation sources. Therefore, it is
recommended that:
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 59
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EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
The City of Denton should plan for the development of aviation uses the west
side of the Airport as demand warrants.
Non-Aviation Property Development/Acquisition
Currently, non-aviation property at the Airport (primarily on the west side) is used for
both agricultural operations and gas well leases, generating revenue. While the gas well revenue
is essential to the Airport's future growth and development, the agricultural revenue is not
significant. By preserving the footprint of land needed for the gas wells, the remaining non-
aviation property could be reserved for future development. Conversion of this property for
other commercial or light industrial development should wait until demand warrants. With that
demand will be improved surface access, which is critical to non-aviation development purposes.
Thus, the Loop 288 Highway is an important ingredient in the timing for non-aviation property.
Non-aviation development revenues could be significant for the Airport, particularly if
they support the operation of the facility after the depletion of gas well revenues. Therefore, it is
recommended that:
The City of Denton should plan for the development of non-aviation uses on
the west side of the Airport as demand warrants.
Property Acquisition
It is recommended that the City purchase land adjacent to the current Airport boundaries
in order to protect the Airport from incompatible development and in some instances, as a
reserve for future economic development. Figure 6 shows the recommended property
acquisition for the Airport. The concept also displays an 87-acre area to the north of the existing
property and along the planned Loop 288 that could be potentially acquired and used for aviation
or non-aviation use or an extension of both uses. While the exact location of Loop 288 has not
yet been determined, the Airport should keep the acquisition of any property between the
existing property line and the future Loop 288 corridor in their plans as it may provide an
opportunity to extend the business park. The Airport should consider acquiring 29-acres to the
south of the existing property line along Hickory Creek. The business park area concept would
be bounded by the Dry Fork Creek to the north and Hickory Creek to the south if this property
was acquired.
In addition, to the east of the existing airfield, there are two prime locations for
commercial development in conjunction with the Airport. A 6-acre area is available along
Westcourt Road near the existing gas well that is ideally suited to aviation industry use. An
additional 16-acre site along the airport entrance could potentially be acquired and used as a
hotel/restaurant site. Furthermore, there are two locations totaling 47 acres to the north that are
s~ R.A. Wiedemann & Associates, Inc. in association with CHA, Inc. 61
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
recommended for acquisition in order to have the recommended development control over the
future Runway Protection Zones for the existing runway and the potential parallel runway.
In total, the Plan suggests the potential acquisition of 185 acres at a number of different
locations adjacent to the Airport. By acquiring the property, the Airport stands to benefit in the
future either through the protection of its on-going aviation activities, or through additional
revenue production resulting from lease revenues. Therefore, it is recommended that:
The City of Denton should acquire land for aviation and non-aviation
activities in support of the Airport mission.
Most of the revenue production capability of this property can be considered as long term or
ultimate phase income.
Foreign Trade Zone
In concert with long-term non-aviation development at the Airport, the Foreign Trade
Zone (FTZ) at Denton Airport should be incorporated into the long-term marketing, advertising,
and promotion of Airport amenities. FTZs are designated sites that serve as autonomous
territories outside the Customs territory of the United States where special customs procedures
apply. Essentially, FTZs function as a "buffer," where goods may be transported and stored
before they are assessed customs duties and certain excise taxes. Goods are not considered
imported until they leave the zone and enter the flow of the United States commerce system for
domestic consumption. Likewise, all foreign merchandise that is imported, and at some point re-
exported, is not subject to U.S. customs duties. By deferring customs duty until merchandise is
actually imported from a FTZ into the United States, companies avoid having expenses tied-up
in Customs duties on their inventory and are able to utilize that money for other purposes. Such
benefits also apply to the elimination of duties on waste, scrap, and yield loss.
The existing FTZ at Denton Airport is used by an avionics manufacturing and repair
company that ships aircraft instrumentation internationally. As such, the long-term marketing
and business development functions of the Airport should include the identification of other
importers, manufacturing and processing companies as those most likely to be attracted to and to
benefit from the Airport FTZ. This task is well suited to a partnership effort with the Denton
Economic Development Department and Chamber of Commerce.
Other Amenities and Services
There are a number of amenities and services that would help the Airport attract more
customers and create convenience for users. Services and accompanying facilities that have been
suggested include:
City-Controlled Services
• Public Transportation to and from the Airport and the City
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Denton Municipal Airport
Business Plan October 2010
• U. S. Customs Facilities and Services that May Attract International Flights from
Mexico and Other Countries
• Greater Airfield Security (to assure aircraft owners that their property is safe against
vandalism or theft)
• Airport Rescue and Fire Fighting (ARFF) Services
Market-Controlled Services
• Airport Restaurant
• On-Airport Satellite Car Rental Station
• Automated Teller Machine (ATM) within the Terminal Building
• Convenient Hotel Near Airport Property
• U. S. Customs Facilities and Services that May Attract International Flights from
Mexico and Other Countries
• Public Transportation to and from the Airport and the City
Greater airfield security is something that the City is already planning for. The U.S. Customs
facilities and services are shown in both the City-Controlled and Market-Controlled services
since they are dependent upon both. Typically, an airport sponsor will have to pay the cost to
locate U. S. Customs on their field. However, this should not be undertaken without some market
assurance of commercial demand. The same holds true for public transportation to and from the
Airport and the City. With this in mind, it is recommended that:
The City of Denton should encourage the provision of other amenities and
services described in this Plan as demand warrants.
6.3 Impact on Revenues and Expenses
The revenue enhancement strategies recommended for Denton Airport represent growth
opportunities, and as such, will impact baseline projections of revenues and expenses. Those
impacts are discussed in this section.
Revenue Impacts
Quantifying the levels of additional potential revenue that might result from
implementing the strategies presented above is highly subjective. In this regard, there are a wide
variety of complex external economic forces that will have some affect on revenues at the
Airport, not the least of which is the fluctuating cost of aviation fuel and uncertainty regarding
the regional and national economic conditions. For each strategy, a cost/benefit analysis should
be undertaken. Alternatives suggested for consideration include analysis of revenues and
expenses that would be derived from:
• Continuing the current practice of developing land for ground leases only;
• Investing gas well royalty revenue in income-generating facilities on the Airport; or,
• A combination of those actions to maximize the financial performance of the Airport.
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Business Plan October 2010
Those analyses should give consideration to the financial impact on individuals and companies
who have invested private funds in the successful development of individual hangars and
aviation industry at DTO.
From preliminary analyses, both options where the City invests in revenue producing
development would produce positive cumulative net revenues over the planning period. The
Land Leases Only option shows negative net operating revenues through the year 2016, which
produces cumulative negative net revenues of -$582,000 through the planning period. If the City
desired to operate the Airport as an Enterprise Fund in the near term, it would best be
implemented using either the gas well royalty investment scenario or a combination of City
investments and private ground leases for future Airport development.
Impact on Expenses
When projecting impacts of increasing activity at Denton Airport, and subsequent
increases in revenue, it is important to consider any effects that such activity may have on
expenses. Such impacts typically come from spending that must be made for capital projects
used to accommodate the growth. At Denton Airport, much of the revenue potential is based on
investments in hangar and rental property development. Costs associated with these activities
should be included in any projection of expenses at the Airport.
Assumptions for growth rates on the cost side of the Airport financial operation are
primarily related to the capital costs of revenue producing projects. In this regard, revenues from
the gas wells could be used in capital development projects. Amounts of usage should be based
upon investment policies adopted by the City. From a strategic planning standpoint, a more
active role on the part of the City in developing rentable property could ensure a strong near-term
financial performance. This is particularly important if the City is considering the Airport as a
future enterprise fund.
6.4 Summary of Business Plan Recommendations
A number of recommendations have been made as a part of this Business Plan, all with
the ultimate goal of improving the financial performance of Denton Airport and helping to attract
growth. To do so, this Business Plan sets forth a recommended plan of action for the City that
rests on the following four initiatives:
1) Airport Brand Development: The suggested Airport brand would target two
distinct segments of aviation demand: corporate aviation and flight training. By
separating traffic through the development of a parallel runway, the Airport could
enjoy benefits associated with both types of activity. Corporate aviation benefits
bring significantly higher levels of spending and employment than recreational
general aviation activity. Training activity has also become a big business on the
Airport and is responsible for growth in activity levels, aircraft storage and
maintenance, and on-airport employment. Retaining these two segments of
demand will be important in the long term development of the Airport.
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Business Plan
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2) Enterprise Fund Transition: The Business Plan recommends the transition of the
Airport financial system from that of general fund to an enterprise fund. This
transition would involve continued management actions to make the Airport
economically self-sufficient in the future. The City of Denton should identify an
Advisory Board or Commission to provide policy recommendations for the
Enterprise Fund.
3) Hangar/Rental Property Development: As discussed, the availability of the gas
well revenues to fund capital development at the Airport should not be limited to
non-revenue producing infrastructure. Rather, this Business Plan recommends
that the City develop hangars and other buildings that can be leased in support of
operating revenues. Development at the southeast taxiway site could be provided
solely by the City or in concert with private development, if desired. City
ownership of rental property is already scheduled to occur as current leases expire
and reversion clauses transfer ownership of existing hangars to the City.
4) Long Term Development: In the near term, the Airport has expansion capacity on
the east side. However, for the long term, the focus of development should be on
the west side, with Loop 288 providing access in the future. To begin moving
toward more use of the west side, this plan recommends the development of a
helipad and later, a parallel runway for general aviation training operations. Other
long-term growth involves the potential partnership with UNT for more training
and aviation education, development/expansion of the Foreign Trade Zone, and
attraction of a large aviation industrial client (aviation manufacturing/fabricating).
As guidance for the City of Denton and Airport Management, the following is a proposed
timeline for implementing the recommendations presented in this section.
2010
• P Priority - Reversion Clauses: The City of Denton should retain its interest in
leases that specify a reversion of ownership of leasehold improvements to the City.
• 2n`i Priority - Branding: The focus of Airport branding for DTO should be toward
business, education, and training.
o The City of Denton should consider renaming the Airport, once the branding
activities have begun.
• 3rd Priority - Existing Clientele Feedback: The City of Denton should meet quarterly
with existing clients and tenants to solicit feedback on economic and service issues
facing tenants.
• e Priority - Marketing: The City of Denton should include new media as part of its
growth strategy.
• 5`h Priority - Revenue Producing Property: The City of Denton should consider
investing in revenue-producing development to ensure future financial self-
sufficiency.
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Business Plan
October 2010
o The City of Denton should seek the development of hangar space and other
revenue producing buildings as demand warrants.
o The City of Denton should consider changing the surface gas leases from non-
operating to operating revenue designation.
2011-2012
• 1" Priority - Airport Enterprise Fund: The City of Denton should set up an
enterprise fund accounting stricture for the Airport after FY 2009-2010.
• 2n`Z Priority -Staffing: The City of Denton should increase Airport staffing to include
at least one additional staff resource.
• 3rd Priority -Land Acquisition: The City of Denton should acquire land for aviation
and non-aviation activities in support of the Airport mission.
• e Priority - Hangar Development: The City of Denton should seek the
development of hangar space and other revenue producing buildings as demand
warrants.
• 5 h Priority - Marketing Program: The City of Denton should initiate a direct
marketing information campaign targeting business and corporate aviation.
• 6`h Priority - Amenities and Services: The City of Denton should encourage the
provision of other amenities and services described in this Plan as demand warrants.
2013 - 2018
• 1" Priority - Hangar Development: The City of Denton should seek the development
of hangar space and other revenue producing buildings as demand warrants.
• 2n`i Priority - Parallel Runway: The City of Denton should plan for the development
of a parallel runway on the West Side to accommodate pilot training activity.
• 3rd Priority - West Side Development: The City of Denton should plan for the
development of aviation and non-aviation uses the west side of the Airport as demand
warrants.
• e Priority - Amenities and Services: The City of Denton should encourage the
provision of other amenities and services described in this Plan as demand warrants.
Timetable and Trigger Points
Table 18 presents a timetable and listing of trigger points for implementation of the
recommended plan, grouped by type of action (administrative, marketing, etc.).
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Table 18 - Action Plan Trigger Points
Action
Description
Trigger Point
Timeframe
Airport Services
Market-Controlled Seivices
Airport Restaurant, On-Airport Satellite Car
As demand
N/A
Rental Station, Automated Teller Machine (ATM)
warrants
within the Terminal Building, Convenient Hotel
Near Airport Property
City-Controlled Services
Public Transportation to and from the Airport and
As soon as
2010
the City, U.S. Customs Facilities and Services,
practical
Greater Airfield Securit-v
Airport Development
Aircraft Hangars
City should develop hangars for revenue
As demand
Immediate -
production as demand warrants
warrants
2018
Land Acquisition
Acquire property adjacent to current boundaries
As soon as
2011
for potential development
practical
Parallel Runway
Develop parallel runway for pilot training.
When funding
2013
becomes
available
Development of the West
Develop the landside area of the West Side
Adequate access
2013 - 2018
Side
Marketing
Create a stronger brand
Create a stronger brand name for the Airport
As soon as
2010
name
focusing on business, education, and training
practical
New Media
Use new media in marketing efforts for the
When Branding is
2010-2018
Airport.
Completed
Market Business Aviation
Develop marketing materials for the Airport that
Continuous
2011-2018
are targeted on business aviation.
Other Items
Reversion Clauses
City should keep reversion clauses in leases
Continuous
2010-2018
Client Feedback
City should begin holding quarterly meetings for
Continuous
2010-2018
airport tenants
Enterprise Fund
City should set up the Airport as an Enterprise
Next Fiscal Year
2011
Fund, considering property taxes and other
indirect revenues and expenses.
Staffing
City should add one staff member to Airport
Next Fiscal Year
2011
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Appendix A:
SWOT Analysis
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Denton Municipal Airport
Business Plan October 2010
APPENDIX A
Denton Airport SWOT
A SWOT (STREN(iTHS/WEAKNESSES/OPPORTUNITIES/THREATS) WORKSHOP WAS held at
the Denton Airport on July 22, 2009. A total of 26 professionals representing a wide
range of the Airport stakeholder base attended the sessions. The purpose of the SWOT
Workshop was to provide an opportunity to better identify and understand the Airport operating
environment. In this regard, the SWOT is not a strategy session. Rather, it is the preparatory
step toward making strategic recommendations. Thus, the information generated in the SWOT
about the Airport's position in its environment can be used to develop follow-on strategies for
achieving the Airport's mission. This Business Plan will serve as the vehicle to define these
strategies and focus resources on the implementation process which will take place over the next
ten years.
From a definitional standpoint, a SWOT for Denton Airport involves the following:
• Strengths:
Internal attributes of the Airport. These can include
Physical/Infrastructure, Managerial, Financial, Political, Brand,
Tenants, and "Other."
• Weaknesses:
Internal attributes of the Airport. These also can include
Physical/Infrastructure, Managerial, Financial, Political, Brand,
Tenants, and "Other."
• Opportunities:
External conditions that may be available to the Airport. These
can include such items as Regional Business, On-Airport Business,
Funding, Aviation Trends, Branding, and "Other."
• Threats:
External conditions that may threaten the Airport's viability.
These conditions may include Funding, Operational Activity (e.g.
Loss of Future Contracts for Pilot Training), Local Surface Access,
Infrastructure, Brand, and "Other."
There were five simple riles for the SWOT Workshop itself:
1) It is okay to disagree.
2) All ideas are potentially good ideas.
3) We will honor time limits unless the entire group desires longer sessions.
4) What is said at the meeting will not be attributed to a specific person
(confidentiality).
5) Cell phones should be in the "off' position.
The Workshop began at 10:00 am and ended at 3:00 pm. Discussion topics included a wide
range of issues including, but not limited to:
• Reversion Clauses in Lease Agreements;
• Need for a Parallel Runway;
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• FAA Tower Service;
• Financial Operation as a General Fund Department or an Enterprise Fund;
• Airport Management Stricture (Including the Role of the Airport Advisory Board);
• Airport Branding;
• West Side Development;
• City Development of Hangars or Private Enterprise Development of Hangars;
• Gas Well Lease Royalty Fund Management;
• Rates and Charges Comparison with Other Airports;
• Future Client Base and Airport Amenities;
• University of North Texas Aviation Program and Other Educational Services;
• Flight Training Operations;
• Airport Property Expansion;
• International Activity Through a Foreign Trade Zone;
• Master Plan Update
The following sections summarize the discussions held at the Workshop concerning Airport
Strengths, Weaknesses, Opportunities, and Threats. Participants were asked to rank the top five
items of importance within each category.
1. AIRPORT STRENGTHS
Nine areas of Airport Strengths were identified during the Workshop including the
following, in rank order of importance:
• Services: The number of services offered by the Airport was viewed as a significant
strength, relative to its competitive position and future viability. These internal
attributes were identified as including the following:
- Fuel Sales, Maintenance for both Jet and smaller GA aircraft, Paint Shop
- Full Service and Specialty FBOs, Avionics Sales and Repair
- Interior Refurbishment, Aircraft Sales, Charter/Air Taxi, Supplies
- Flight Training - Fixed Wing and Helicopter
- Rentals - Aircraft and Automobile, Courtesy Car
DTO enjoys services from two major FBOs which sell fuel. Also of note, avionics
sales and repair is performed at DTO and the Foreign Trade Zone permits economical
international sales of these instruments. Also, fixed wing and helicopter flight
training are offered at DTO. This activity has grown significantly over the last three
years with pilot training contracts for foreign airlines and governments.
• Financial Resources: The Airport has financial resources that give the City an
ability to develop capital infrastructure as needed and to withstand downturns in the
aviation economy. Revenue sources and financial support is derived from the
following:
- Gas Well Revenue, Operating Revenue, Investment Revenue (from CDs)
- Government Support (Grants, Contributions In-Aid)
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- Capital Improvement Bonds
DTO has a growing number of gas wells that produce royalty income which can
provide for capital improvements or help to offset operating costs, as needed. In
addition, the Airport generates significant income from operations, including those
from land leases and fuel flowage fees.
Political Support: DTO enjoys widespread political support from a large base of
stakeholders. Such support is important for funding, land use protection, and future
projects. Supportive groups include:
- City Council, TXDOT Aviation, Congressional Delegation
- Greater Denton Community
Potential support also exists at the County level, particularly regarding the proposed
West Loop 288. It should also be noted that the City has provided land use and
zoning protection for the Airport through an overlay zoning district called an Airport
Compatibility Land Use District, which limits the types of land uses in the vicinity of
the Airport that may be subject to noise impacts from aircraft operations. In addition,
the City has instituted an overlay zoning district which limits building heights, called
an Airport Height Hazard District.
Location: The Airport's location is considered a strength, given that it has good
access to two Interstate Highways and US 380 (east-west highway). Another plus is
that the Airport is far removed from residential housing. The Airport is located close
enough to both Dallas and Fort Worth to serve these communities, yet it is far enough
away from D/FW International Airport to have favorable airspace within the Class B
airspace environment.
Economic Development Engine: The Airport is becoming more of an economic
development engine, particularly over the past three years. In addition to the
international flight training activity, the Airport is teamed with the University of
North Texas for the development of an aviation curriculum that may include domestic
student pilot training. One of the Airport's Specialty Aviation Service Organization
(SASOs) - Jet Works - performs interior finishing work for aircraft, including those
for the Italian aircraft manufacturer of the Piaggio. There are also a growing number
of businesses that are locating at the Airport. All together, these and other activities
at the Airport have produced a significant employment base, which continues to build
over time.
• Annual Air Show: The annual Air Fair is considered a strength, gaining significant
positive public relations for the Airport. Last year, over 10,000 spectators attended
the event.
Transportation Utility: The Airport provides a transportation utility and
infrastructure that cannot be duplicated in Denton. Air access is provided through a
variety of outlets:
- Air Charter Operations, Business/Corporate Flights, Sports Events
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- Air Cargo (both Turboprop and Jet), Flight Training, Personal Flying
- Civil Air Patrol, U. S. Marshall - Law Enforcement, Government
- FAA Flight Certification and Test Flights
The more services available from the Airport, combined with its close proximity to
the community, the greater is its transportation utility.
• Leadership/Management Support: In addition to political support, the Airport has a
significant leadership and management support base. That is, the technical expertise
provided by the City Staff and Airport Advisory Board, combined with the leadership
of the City Council is a strength for DTO. In addition, TxDOT and the FAA have
provided support for management decisions regarding the future development of the
Airport.
• Airport Facilities and Expandability: The size and capability of the Airport itself is
considered a strength. In this regard, the Airport has 6,000 feet of runway length that
will soon be expanded to 7,000 feet. Other important facilities include:
- Full Parallel Taxiway, Aircraft Hangars, New Terminal Building
- Instrument Landing System, contract FAA Control Tower
- Available Development Sites, Offsite Development for Non-aviation Use
In addition to these impressive facilities, water and electricity is available on the
Airport. The west side of the Airport is available for the development of a second
runway or landing area for helicopter pilot training. The west side also has additional
space for landside development and the capacity to take advantage of new business
opportunities.
2. AIRPORT WEAKNESSES
Seven major areas of Airport weakness were identified as a part of the SWOT workshop
process. These are internal to the Airport and are listed below in rank order of importance to the
SWOT participants:
• Airport Brand: According to participants, the Airport brand is nonexistent. That is,
there is confusion in the marketplace concerning Denton Airport's core identity. In
some cases, residents of Denton do not even know that they have a local airport.
Likewise, business users are not sure whether the Airport is primarily devoted to
flight training or to corporate aviation. Several brand weaknesses that were identified
include:
- Airport Name: The word "Municipal" in "Denton Municipal Airport"
gives the impression that DTO is a low activity, small general aviation
aircraft airport. Airport names that incorporate terms like "regional" or
"executive" imply a larger service area than a municipal airport. Also,
airport names that can include larger, more nationally identifiable cities
tend to extend their service area reach.
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- Airport Entrance: The lack of a formal airport entrance is considered a
brand weakness.
There has been a limited amount of funding for public relations and marketing for
branding the Airport. Funds will be needed when and if a new brand is developed for
the Airport.
• Security: External (perimeter) and on-field security are weaknesses that need to be
addressed, according to SWOT Workshop participants. The Airport houses Boeing
727 and 737 jets, along with other large corporate jet aircraft. As such, owners of
these and other aircraft desire protection from theft, vandalism, and terroristic acts.
As a general aviation airport, security card access and other forms of protection
against airfield incursions are not mandated by FAA or the Transportation Security
Administration. Only some FBO facilities require card access presently. There is no
assigned law enforcement officer to the Airport and City police rounds are infrequent
at night. In addition, portions of the Airport perimeter are not protected by security
fencing.
• Tower Operating Hours/Staffing and Other Issues: i The Airport has a contract
FAA Air Traffic Control Tower, meaning that a private firm trains and staffs the
tower for the FAA. Currently, the working hours for the tower staff are from 8:00 am
to 8:00 pm, even though flight training is conducted 24 hours per day, seven days per
week. On many days, the airport traffic pattern for aircraft is full by the time
controllers get to work in the morning. Thus, it is believed that there is a significant
need for longer hours and more staff for the Tower. Other issues for the Tower
include:
- Lack of Repeater Radar ,Scope: The Tower operates on a visual flight rile
basis. That is, there is no radar scope within the Tower cab that shows
controllers what air traffic controllers in Dallas can see with their radar. A
repeater radar scope would increase margins of safety during poor weather
visibility conditions and high activity periods.
- Language Barrier: English is the universal language of international air
traffic control. Foreign student pilots have the challenge of learning to fly
an aircraft within a controlled airspace environment, in addition to
mastering conversational English. When operational activity at DTO
exceeds 100 per hour, it is vital that student pilots understand and respond
to air traffic control directions.
With operations now exceeding 15,000 per month, many of these problems could not
have been anticipated five years ago when operations were one-third that amount.
However, the combined effects of the issues described above are now considered an
inherent Airport weakness, particularly with the mixing of large and small aircraft.
1 This issue was address by FAA after the SWOT, by increasing Control Tower hours of operation to a 16-hour
day - 6:00 a.m. to 10:00 p.m.
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• Infrastructure: While the large infrastructure at the Airport is a strength, there are
aspects of the infrastructure that represent weaknesses. In this regard, the SWOT
Workshop participants identified the following infrastructure needs at the Airport:
- Parallel Runwav: It is believed that an airfield operational capacity issue
is developing, based upon the high numbers of training operations at DTO.
One solution would include the addition of a parallel runway on the West
side of the Airport. Thus, the lack of a parallel runway is considered a
weakness of the current infrastructure.
- Ramp Space: There is a need for additional ramp space at the Airport.
While the West side has an abundance of space, there is no adequate
ground access. The East side is limited in the amount of additional
landside expansion that can be accommodated.
- ARFF: The Airport does not have aircraft rescue and firefighting
equipment located at the Airport.
- Utilities: Water and electricity are available to most of the east side,
however, they are nonexistent on the west side. Sewer service is available
to portions of the east side but not to the west side of the Airport.
- Ground Access: Access to the west side of the Airport will be significantly
inconvenient when the imminent runway extension closes portions of Tom
Cole and Masch Branch Roads.
- UX Customs: International air cargo and passengers from Mexico and
other foreign nations cannot be cleared through U.S. Customs at DTO for
lack of those facilities and services. It is believed that this deficiency
inhibits some business expansion at the Airport.
- Restaurant Facilities: With more than 5,600 workers at Airport area
industries, there is no restaurant at DTO.
- Signage: Unless an airport is directly off of a State or an Interstate
highway, TxDOT will not install a sign directing traffic off an exit. Thus,
directions to the Airport may be difficult for those not familiar with the
area.
- Security Fencing: The lack of full perimeter security fencing was listed as
a weakness.
- Heliport: It was said that the present location of the helipad is not far
enough removed from the active runway and taxiway system to eliminate
interaction with fixed wing operational activity.
• Lack of Services: Participants indicated another weakness at the Airport involves the
lack of certain services including: public transportation to/from Airport, on-Airport
police, and banking services. With the large number of employees that work near the
Airport, it was viewed as a weakness that public transportation/bus service was not
available.
• Slow/Non-Responsive Development Support: For private enterprise to constrict
facilities at the Airport, there is a very long development approval process required by
the City. It is believed that the length of time required to gain these approvals is
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driving business away from the Airport. Some of the delays are caused by a lack of
understanding of aviation needs and requirements. That is, instead of treating each
new hangar proposal as a completely new item, there may be a way to permit certain
similar types of buildings within an Overlay District.
Other weaknesses that were listed in the exercise included a lack of ramp clearance with
light poles on their perimeter, limited ramp access, an overall resistance to change within City
government, and a lack of County Commissioner awareness of the Airport situation.
3. AIRPORT OPPORTUNITIES
Opportunities that exist are considered external conditions that may be available to the
Airport. Generally, these opportunities will require strategies and efforts to achieve. Most
opportunities involve the market place or additional services or facilities at the Airport.
Participants in the SWOT Workshop identified a number of opportunities available to the Airport
and ranked them in the following order of importance:
• Branding: There is an opportunity to increase the use of DTO through branding.
This branding would involve a name change for the Airport. Participants indicated
that the Airport name should reflect the fact that DTO is a business reliever airport,
and that it is a regional facility rather than a "municipal" airport.
• FAA Tower Services: By providing repeater radar scopes in the Tower, more
corporate aviation may be attracted to DTO. Some corporate aviation departments
will choose radar airport environments over visual/non-radar service airports. In
addition, by increasing the staffing and hours of Tower operation, the Airport could
benefit by improved safety and from greater utilization by all types of general
aviation aircraft.
• Parallel Runway: The Airport could benefit from the addition of a parallel runway.
Current activity levels, if sustained, would justify the additional runway from an
airfield capacity standpoint. The parallel runway would also help to separate some of
the training activity from the corporate aviation activity, thereby enhancing safety.
• Public Transportation: Public transportation from the City to the Airport could
assist employees working at or near the Airport. Public transportation could also
accommodate foreign student pilots that live near the Airport and travel back and
forth. Most of these students do not have their own vehicles for transportation. The
provision of bus service would have to be addressed by the Denton County
Transportation Authority (DCTA).
• Enterprise Fund vs. General Fund: It is believed that the Airport could benefit by
setting up an enterprise fund versus the current general fund accounting. The primary
benefit cited was greater independence and flexibility, relative to the budget process.
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• University Pilot Training: It was stated that diversification in pilot training would be
advantageous to the Airport, since the impacts of losing a foreign contract could be
offset with other sources of student pilots. Thus, the addition of a North Texas
University aviation curriculum with pilot training at DTO could smooth out future
activity swings and reduce the risk of relying on one source for pilot training.
• Reversion Clause: The inclusion of reversion clauses in leases is seen by some as a
means to decrease the impact of reduced funding of the Airport by existing sources.
If the City can lease property at full market rates, the Airport may become more
financially self-sufficient.
• Highway Access to the West Side: The proposed Texas State Highway Loop 288
would open access to the Airport's West side. This would be important for any
industrial or commercial development of that area, in addition to aviation-type
development.
• Super Bowl: It is believed that the Super Bowl football game being held in Dallas in
2011 will attract activity to the entire Dallas/Fort Worth area. This would include a
significant number of general aviation/corporate aircraft at DTO.
• Attraction of Corporate Aviation: Corporate aviation was viewed as a potential
opportunity for growth at DTO. Corporate aviation generates significant airport
revenues due to hangar leases, fuel consumption, and maintenance requirements.
• Other Opportunities: There are a number of other opportunities listed during the
SWOT Workshop that only received one or fewer votes. These included:
- Airport Restaurant
- Terminal Expansion
- Greater Use of the Foreign Trade Zone
- More Charter Operations
In addition, it was stated that a hotel at the Airport and a small museum might attract
additional patrons to DTO.
It was stated that population migration trends in the D/FW area are to the north toward Denton.
Because of the lakes that are blocking development in Dallas, Workshop participants believe that
the northward growth will eventually result in a common border with Dallas/Fort Worth. That
works favorably for the location of the Airport and the City for future growth potential.
4. THREATS TO THE AIRPORT
In this context, threats to the Airport refer primarily to its potential growth, development,
and viability. While security is an important threat issue, it is not the only issue. Threats are
external conditions to which the Airport is exposed. In some cases, unresolved weaknesses may
develop into threats. In other cases, threats may be perceived as the other side of the
"opportunity coin." For example, if the opportunity to expand the Tower hours and staffing does
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not occur, it could turn into a threat for Airport operational activity and possible degradation of
flight safety margins. Threats to Airport viability were listed by SWOT Workshop participants
in the following rank order:
• Security: A threat to the growth of corporate aviation and other businesses on the
Airport is a lack of perimeter and internal security. This is needed to prevent
vandalism, theft, and inadvertent airfield incursions.
• Tower Personnel Workload: The Tower personnel workload was cited as a threat to
the Airport, in that continued growth in operations may be limited by Tower staffing.
In addition, margins of safety, particularly during high training activity periods might
be increased with more personnel.
• SaturationlLand: Other development around the Airport may threaten DTO's
expansion capability or operational flexibility. There are floodplain issues around the
Airport and the East side has only about 25 percent more expansion available on the
landside area. Without adequate land for runway expansion, the Airport is limited in
what types of aircraft can be served in the future. Similarly, without adequate
landside area, the Airport's operational activity will cease to grow, simply because
users have no place to park or store their aircraft on the Airport.
• City Bureaucracy: The bureaucratic process required to develop or improve Airport
property is believed to be a hindrance to future growth at DTO. Airport users would
like uniform standards and a quick process.
• Conflict Between Training and Corporate Activity: There is a perception that
training activity and corporate activity do not mix at an airport. The threat expressed
by SWOT Workshop participants was that future corporate aviation activity may be
reluctant to locate at an airport where significant student pilot training occurs.
• Future Training Demand: Because the Airport may become committed to
significant training activity (increased staffing of the Tower, FBO commitments for
aircraft, hangar space, mechanics, etc.), there is a significant threat to the economic
well being of the Airport should future training contracts be cancelled or lost to a
competing airport.
• Future Funding: A loss of future funding (both capital and operating) would
threaten the Airport's viability. State and federal programs appear stable, but should
they be cut, it may adversely impact DTO. Similarly, if local support for the Airport
declines, the operating budget may suffer. Also, as gas well royalties decrease in the
future, that revenue may need to be replaced with other sources of revenue.
• Maintenance Support: Similar to the funding issue, a lack of proper Airport
maintenance will threaten the Airport's future ability to compete for the region's
general aviation aircraft users.
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• Reversion Clause: Property reversion to the City after the expiration of a long term
lease is considered a threat to the Airport by some.
• GA User Fees: General Aviation user fees that were considered in the recent federal
funding legislation are considered a threat to overall activity in the general aviation
system nationwide. These fees were eliminated from the current legislation, but will
likely return in future proposals.
• National Economy: As demonstrated in 2008, the aviation industry is closely tied to
the national economy. Downturns in the economy impact aviation in that businesses
will eliminate discretionary air travel at the beginning of the negative cycle and then
do not resume normal air travel until well after the recovery is underway.
• Class B Airspace: Currently the Class B Airspace surrounding the Dallas/Fort Worth
area permits a 4,000 foot ceiling above DTO. If greater airspace restrictions are
placed on the Airport in the future, it may result in reduced activity levels.
• Fuel Cost. As demonstrated in 2008, rising fuel costs significantly reduced general
aviation operations. This threat remains, as fuel prices can escalate at any time due to
unforeseen political events in or near oil-producing nations.
• Residential Development: Residential development near an airport can threaten its
long term growth. This may not be a current threat at DTO since the City of Denton
has protected its Airport with zoning restrictions on the land uses under the approach
areas of existing and future runways. However, large residential development areas
are planned just beyond these restricted zones. Proposed residential development to
the south will need to be closely monitored to ensure compliance with the Airport
Compatibility Land Use District regulation.
Competition from Other Airports: DTO competes with other airports in the region
that can provide similar facilities and services. Significant competing airports would
include Addison, Fort Worth Alliance, North Texas Regional (Grayson County), and
Collin County Regional. These airports can take market share from Denton unless
DTO remains competitive with regard to pricing, services, and facilities.
5. SUMMARY
To summarize the SWOT workshop results, a graphic representation of the process was
developed that shows the relationships between the components of the analysis. Figure 1 shows
four quadrants, each representing one area of the SWOT. The axes of the quadrants indicate the
degrees of flexibility or change for each of the SWOT components. The center of the graphic
represents the highest degree of flexibility or ability to change, whereas the outer edges represent
the greatest inflexibility or lack of ability to change. For example, the Super Bowl is an
inflexible Opportunity that will happen in Dallas regardless of any actions taken in Denton. On
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the other hand, Airport Branding is something that can be controlled by the City and as such, it is
located near the center or most flexible
Components that are located on an axis show that, depending upon how they are
addressed, can move from one SWOT function to another. For example, highway access to the
west side is currently a Weakness and an Opportunity. If the Access is provided, then the
Opportunity is fulfilled and it no longer is a Weakness. The future access will then move into a
Economic
I Y ~ I II Super Bowl
b DevetopmentEngine ! k
e
FAA Tower l oration
P
Services
€ir~ I`'€nancial ~ ~ °^~r
rtllrti`\1r~` Resources ' Transportation utility
Public. Tra
Enterprise Fund vs political Support
General Fund \~~,r>>
University Pilot
Airport Facilities
Training &Expandability
Attraction of Anr€ual
Corporate Aviation Alr Shnw Airport Services
allel t~unway
' eadership
'.1anaaorrent
Hl~way Aocess i~ Brandmp lr, Support
to VGest side
1 Security
Tower i`? Future f-unAinn
Slow
Development
Support
InfraslgiehK
Personnel
Workload
r' Class B
laininglCorporale
Lack of Services A€rspace
t
S Ilvay Conflict
P..
1 City Bureaucracy
E
Competition
front Other
Airports
National
~.Wnonly I
GA User Fuel Casts f
Fees
Figure I - SWOT Illustration
Strength for the Airport. Similarly, Branding at the Airport is currently a Weakness and an
Opportunity. When a new brand is successfully promoted, it will cease to be a Weakness and
ultimately become an Airport Strength. Also, the issue of the Reversion Clause has been
characterized as both an Opportunity and a Threat. Analysis in this business plan will help to
establish grounds for each claim. One other item, Security (the lack thereof), is both a Weakness
and Threat.
The FAA Tower appears in two different quadrants - Opportunity and Threat. There are
different aspects of the Tower's operation considered in each SWOT function, such that the
Opportunity relates to the availability of Tower services and its attraction of corporate aviation,
while the Tower Threat refers to workload and safety margins.
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Overall, the SWOT Workshop highlighted the key issues for the Airport and its operating
environment. The Business Plan will use the results to develop strategies for building on
strengths, overcoming weaknesses, taking advantages of opportunities, while minimizing threats
to the Airport's future operation.
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Appendix B:
Detailed Survey Results
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Denton Municipal Airport
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APPENDIX B
Detailed Survey Results
N EARLY JULY, 2009, DENTON MTJNICIPAL AIRPORT users and businesses were surveyed for
purposes of evaluating local area business use of Denton Municipal Airport. The Airport
User Survey was developed and mailed to two groups of aircraft owners: those who base
their aircraft at Denton Municipal Airport; and those known to have used the Airport. A total of
74 Airport User Surveys were mailed. The Airport Business Survey was developed and mailed
to 34 businesses that either use the Airport or have owners that base their aircraft at the Airport.
In addition to these direct mailings, the Airport User and Business Surveys were distributed by
FBOs on the Airport to their sub-tenants. The surveys were also launched via Zoomerang.com
so that respondents could complete them online. The surveys were posted on the Business Plan
project website at www.dentonairpoi-tsuivel.com. Both the Airport User Survey and the
Business Survey are included in this Appendix.
The direct mailings and online surveys asked respondents to return completed surveys by
the end of September. This date was then extended to the beginning of December due to a low
response rate. During this period, a total of 43 visits were recorded on Zoomerang.com with 14
Airport User Surveys and 6 Business Surveys completed. Additionally, a number of hard copy
surveys were received, for a total of 18 responses to the Airport User Survey and 7 responses to
the Airport Business Survey and 5 mailed surveys returned undeliverable. This created a
response rate of 24 percent, which is between the normal response range of 18 percent and 28
percent. A total of 15 different cities and towns within Texas were represented in the responses.
1. AIRPORT USER SURVEY
Questions and responses from the Airport User Survey are described briefly below.
1. Please list type of aircraft (specify make & model)
A total of 18 Airport users responded to this question. Aircraft types included 16 single-
engine aircraft, 2 multi-engine aircraft, and 5 helicopters (four respondents owned multiple
aircraft) for a total of 23 aircraft. All but two of the users that responded had all of their based
aircraft at Denton Municipal Airport. One respondent that did not base his or her single engine
aircraft at the Airport still supplied information about their expenses at Denton Airport. The
second respondent had multiple aircraft (three single engine aircraft) of which, one aircraft was
based at the Airport. They also reported their expenses at Denton Airport.
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usinesslA viation Relationships
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2-3. Please estimate the total annual level of spending associated with your aircraft at your
home airport:
Seventeen respondents, accounting for 26 based aircraft at Denton Municipal Airport
spent an average per aircraft of $10,427 annually for fuel, $4,013 for maintenance, $4,862 for
storage, $279 for aviation related taxes and $569 for "other." Average annual aircraft spending
for the group was $30,819. Total spending for the 17 respondents to this question equaled
$523,920.
If the response from one major respondent is taken out of the mix, the average spending
per aircraft decreases significantly to $3,386 annually for fuel, $3,064 for maintenance, $4,591
for storage, $345 for aviation related taxes and $705 for "other." Average annual aircraft
spending (fuel, maintenance, storage, aviation-related taxes, and other) per aircraft (21) in this
context dropped to $12,090 with total spending falling to $253,920.
4-5. Estimated Yearly Takeoffs at Denton Municipal Airport and expected changes in the
future:
Seventeen users with 24 aircraft (22 single engine and 2 multi-engine) reported an
estimated 2,838 annual operations (1,419 takeoffs) for an average of 118 operations per aircraft
or 167 operations per user. One user with five based helicopters had an additional 7,200
operations per year. All together, survey respondents accounted for a total of 10,038 annual
operations with 29 aircraft.
Seventeen respondents answered the question about their expected change in aircraft
activity over the next five years. Of these respondents, 12 indicated that their activity would
remain the same. Four respondents expected to increase their activity by an average of 16
percent, for a total of 7,379 operations, over the next five years (one respondent indicated an
increase of 7,200 operations). One respondent indicated that they expected their activity to
decrease by 50 percent (100 operations).
6. Are there any services or facilities needed at the Airport that, if provided, would
increase your use of the facility?
There were nine responses to this question. Three respondents had remarks concerning
the Air Traffic Control Tower. One respondent thought that the tower should be closed, one
wanted to have the tower's hours minimized, and one wanted to see an improvement in control
tower personnel. Two respondents indicated the need for radar. One respondent indicated the
need for addition of RNAV/ LPVs for 17/35 GPS approaches. One respondent indicated that
they would like to have freedom to buy fuel from someone other than their landlord and would
also like to have the restrictions taken away so that they could build their own facilities. Other
needed facilities and services mentioned were a restaurant and additional air shows/events. Two
of the respondents did not have any requests and were positive about management, facilities and
fuel prices.
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7. Please estimate the percentage use of your aircraft?
A total of 17 Airport users responded to this question. The Airport users indicated that
79.2 percent of flights flown were for business reasons, 17.8 percent of flights flown were for
personal reasons, and 3 percent of flights flown were for other reasons. In terms of the number
of flights flown, respondents indicated that 3,976 were for business, 894 were personal, and 150
were for other purposes.
If the response from one major respondent (3,600 business flights) is taken out of the
mix, the percentages change dramatically. This will show a more realistic number as to the
percentage use (business, personal, and other) of the average airport user. If the 3,600 flights
from this one outlier are taken out of the mix then 26.4 percent of the flights flown were for
business reasons, 63 percent of the flights flown were for personal reasons, and 10.6 percent of
flights flown were for other reasons.
8. If possible, please explain the importance of the business use of your aircraft to your
company or business:
There were eight responses to this question. All eight respondents indicated that business
use was very important to them and their companies. Responses included the importance of time
savings, accessibility, convenience, and commuting.
Summary of Airport User Survey Results
In summary, there were several key points expressed by respondents to the Denton
Municipal Airport User Survey:
• A total of $523,920 was spent by 17 Denton Municipal Airport users on their aircraft in
2008. If the response from one major outlier is taken out of the mix, the average
spending amounts at Denton Municipal Airport per aircraft were $3,386 annually for fuel,
$3,064 for maintenance, $4,591 for storage, $345 for aviation related taxes and $705 for
"other." Average annual aircraft spending (fuel, maintenance, storage, aviation-related
taxes, and other) per aircraft (21) was $12,090, with total spending of $253,920.
• If the average level of spending is extrapolated to all aircraft reported at the Airport, over
$5.5 million is the estimated expenditure by users of the Airport.
• Sixteen based airport users and one itinerant user reported an estimated 10,038 annual
operations, with 7,200 of these being helicopter operations.
• Twelve Airport users indicated that their activity would remain the same. Four
respondents expected to increase their activity by an average of 16 percent, for a total of
7,379 operations, over the next five years (one respondent indicated an increase of 7,200
operations). One respondent indicated that they expected their activity to decrease by 50
percent (100 operations).
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2. AIRPORT BUSINESS SURVEY
The business survey responses represent seven businesses located in Denton County.
The survey form is presented on the following page. Six of the businesses are located in the City
of Denton and one business is located in the City of Plano. All seven of the businesses responded
to the question concerning frill and part-time employment. They also provided data related to
their annual gross sales volume for the year 2008. The following is a summary of these
answers.
• Full-time Employees: 121
• Part-time Employees: 36
• Total Annual Gross Sales Volume: $18,398,000
• Total Expenditures in Denton County: $24,226,000
1. Type of Business Product or Service
The following businesses responded to this question:
• Title Insurance
• Aircraft Hangars
• Flight Training / Aircraft Maintenance
• Wholesale Avionics and Parts Supplier
• Repair of Solid State Electronics
• Helicopter Charter and Flight Instruction
2. Is this business Aviation-related?
Of the seven businesses that responded to this question, all but one are aviation related.
3. Estimate what percent at your company's employment and sales are related to the
availability of Denton Municipal Airport
Businesses asked to attribute jobs and sales to the availability of Denton Municipal
Airport responded as follows: Six businesses indicated a total of 73 frill-time and 28.3 part-time
employee positions were generated by the availability of Denton Municipal Airport. Seven
businesses reported that 31 percent of their sales, or $5,738,000 was related to the availability of
the Airport.
4. Does your company or client base use air travel to and from Denton Municipal
Airport?
Of the 7 businesses that answered this question, 6 indicated that they used Denton
Municipal Airport for business purposes. Frequency of use was estimated by 5 businesses at
2,966 times per year. Five businesses indicated that their visiting clients used Denton Municipal
Airport an estimated 25,940 times per year.
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conorn'lo lmpL~ct assessment of
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Denton Municipal Airport
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6• Jlpa~,,J P.l l percent, if any, of your company's employment ar d ~;ale, is related to the availability of the
ier'',:,rl )lunrtdpal Airport.
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3, Please de(: JLe your business or organ lza on's use of or dep9n6erce Jn per:L-in ~ricipal Airpoirt
Thank yoti for your response.F
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5. Please describe your business or organization's use of or clepentlence on Denton
Municipal Airport
Business users indicated that they rely on the use of the Denton Airport for:
• Extremely dependent on services of airport including tower operations and runway
availability. Strongly feel a second runway would enhance our business opportunities at
airport.
• We capitalize on the growth of DTO and the surrounding business community.
• We rely on the Airport to bring in clients. We lease hangar space at the airport, buy fuel
from the FBO, and use the terminal building for business meetings.
• Convenience to their office facilities.
• Corporate flights come in and out at DTO.
• As a helicopter operator we are not as dependent on the airport facilities as a fixed wing
operator. The fuel availability is a convenience. The tower offers more training options.
We can operate easily away from a runway surface.
Summary of Business Survey Results
A summary of findings from the business user survey include4 the following points:
A total of seven firms that were represented in the business survey had 121 full-
time employees and 36 part-time employees.
Six of the businesses indicated that they were aviation-related.
The availability of Denton Municipal Airport can be linked to the creation of 73
frill-time and 283 part-time employment positions for 6 of the businesses
responding to the survey. Seven firms indicated that $5,738,000 of their gross
annual sales in 2008 was due to the availability of Denton Municipal Airport.
0 Overall, six businesses indicated that they used Denton Municipal Airport for
business-related purposes. Five businesses indicated that they used the Airport an
estimated 2,966 times per year, while five businesses had clients that used the
Airport an estimated 25,940 times annually.
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Appendix C:
Lease Analysis
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Business Plan October 2010
Appendix C
Leasehold Analysis
This section summarizes findings from a review of lease agreements in place at Denton
Municipal Airport. In short, the leases are well written and offer no significant or glaring
omissions or causes for great concern. Generally, the leases reviewed appear to be standardized
and without a significant amount of deviation in clauses from lease to lease. It is important to
note that this review was not performed by an attorney and should not be taken as legal advice.
Therefore, before modifications to any existing leases at the Airport are pursued, these
recommendations should be reviewed with and by the City's legal counsel. The leases reviewed
are summarized in Table C-1. Leases or other lease assignment documents for several Tenants
were either expired or not available, and are therefore not included in this analysis'.
1. KEY FINDINGS
One point that became apparent in the review is that there seems to be some history
regarding indemnification, specifically referring to the added bold, capitalized and underlined
text distinguishing between "sole" and "concurrent" negligence on behalf of the Lessor. To
clarify, it is common for Lessors to be indemnified against negligence claims if they are a
contributor to a cause, but not if they are the sole cause. This added language to some of the
leaseholds at the Airport clarifies and better defines that distinction. Some best practices and
sound advice regarding indemnification is outlined below, courtesy of The Barthet Firm of
www. thelienzone. com:
• Who Is Indemnifying Whom;
• Does The Contract Clearly Express an Intent to Indemnify a Party Against Its Own
Negligence;
• Do the Terms of the Agreement Determine Whether the Indemnitor Is Obligated to
Reimburse the Indemnitee for a Particular Claim;
• What Is Being Indemnified, i.e., Personal Injury, Property Damage, Attorneys' Fees And
Costs of Defense, Economic Loss;
• Is There a Monetary Limitation on the Extent of the Indemnification That Bears a
Reasonable Commercial Relationship to the Contract and Is Such Monetary Limitation
Part of the Project Specifications or Bid Documents, If Any; and,
• Is There a Provision Requiring That the Risk Be Covered by Insurance Such That the
Indemnity Is Limited to the Amount of the Insurance Coverage (Contractual Liability
Insurance).
Another area which should be addressed is the "required services" sections of the leases.
For aeronautical activities, the Airport should have or cause to be developed Minimum Standards
r The David Moore, First Financial, and the William Evans leases appear to be expired, and are therefore not included in
the analysis. No documentation was found regarding extensions and/or new agreements signed for those leases.
Additionally, the Nebrig lease refers to an assignment of a lease that is not accounted for.
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for Aeronautical Activities so that these requirements are removed from the lease agreements
and identified in a separate, FAA-approved document. The primary purpose for developing
minimum standards is to "level the playing field" for all aeronautical tenants, so as not to offer
an unfair advantage to one over another, while ensuring that the Airport is able to offer the
services it needs and desires to the flying public at an acceptable standard. If such required
services are negotiated in each lease agreement, chance arises for inconsistencies that can lead to
claims of discrimination and/or exclusive rights (by default, not intent) between competing
businesses on the Airport (or those wishing to become a tenant).
One additional trend noted during the analysis is that lease terms among many Tenants,
regardless of the size of space rented or the purpose/use of the space (i.e., recreational, business,
or corporate), appear similar in length. Specifically, 30 year lease terms (with two, 10-year
options) are offered to a wide variety of Tenants. From a business perspective, terms should be
directly proportional to the amount of investment a Tenant is making in the property. In some
cases, where the Tenant is pledging larger, community-wide impacts such as job creation, some
consideration of these impacts might also be considered in the lease, if not addressed by separate
agencies involved in a State or local incentive package arrangement. One approach for resolving
this is to develop a matrix or formula, which establishes certain criteria and/or investment and
impact thresholds required to qualify for a 10, 20, or 30 year lease at the Airport. As mentioned
below, all options should be mutually shared by both the Airport and the Tenant, not just
assigned to Tenants.
Additional key findings include:
• Rights of First Refusal and purchase options on property should have some form of
consideration.
• Avoid multiple assignments and use those opportunities to renegotiate. Multiple
assignments and amendments make for confusing provisions and allow for
misunderstanding of terms and obligations.
1.1 Reversion Clauses
Many lease documents for long-term ground leases at airports contain a provision known
as a Reversion Clause. FAA Order 5190.6a requires airports to make all facilities and services
available on a fair and reasonable term without unjust discrimination. A perpetual lease would
violate this condition. The Reversion Clause addresses what happens to improvements on a
leasehold at the end of a lease. Generally, the ownership of improvements made by the tenant
will revert to the airport sponsor at the end of the lease period, which can vary from 20 to 40
years, depending upon the amount of investment, useful life assessments of the building
involved, and the length of time required by the investor to recoup his/her capital investment. A
long term lease lets the tenant get financing to build the improvements and gives them adequate
time to get a return on their investment. At the conclusion of the initial lease term, the airport
sponsor can assess the improved value of the property and strictures, and exercise the right to
lease both the land and improvements at their prevailing market rent. A sample reversion clause
from a Denton Airport lease is:
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C. Ownership of Improvements: All buildings and improvements constructed upon the premises by
Lessee shall remain the property of Lessee unless said property becomes the property of Lessor under
the following conditions, terms and provisions:
1. Removal of Buildings. No building or permanent fixture may be removed from the premises.
2. Assumption. All buildings and improvements of whatever nature remaining upon the leased
premises at the end of the primary term, or any extension thereof, of this lease shall
automatically become the property of Lessor absolutely in fee without any cost to Lessor.
3. Building Life. It is agreed that the life of the building to be constructed by Lessee on the
property herein leased is thirty (30) years.
4. Cancellation. Should this lease be cancelled for any reason before the end of the thirty (30)
years expected building life, it is especially understood and agreed that Lessor reserves the
right to purchase all buildings, structures and improvements then existing upon the premises
by tendering to Lessee one thirtieth (1130) of the undepreciated value of such building for
each year remaining on the agreed life of such building. The undepreciated value of all
improvements is to be determined by having such improvements appraised by three
appraisers, one appointed by Lessor, one appointed by Lessee and one appointed by the two
appraisers.
The Pros and Cons of Reversion Clauses: A Tenant's Perspective
Tenants have at least two main concerns about reversion clauses. The first is the future
loss of property title, which will ultimately lead to the payment of market rents for facilities that
they have improved. Thus, property on which they were paying land leases only will revert to
full market rates for their building rents as well. The second concern is that tenants must pay full
taxes each year until reversion on a building in which the tenant is losing equity because of the
reversion clause.
For the tenant, there is no real solution to paying full market rents after the expiration of
the lease term except the possible extension of the lease. That is, some tenants approaching a
lease reversion deadline will attempt to negotiate with the airport sponsor to extend the lease for
a period of time. This extension can postpone the market rate hike, but at a cost. Extensions
such as these are negotiated and can include up-front cash payments along with higher rent
amounts. They can be preemptively negotiated several months or years before the expiration of
the lease in question.
In some cases the airport sponsor provides compensation for the residual value of the
improvement at the end of the lease. This only occurs through negotiation and implies that the
facilities to be constricted are valuable to the sponsor or that the tenants cannot recoup their
investment through the lease period. This also motivates tenants to maintain their premises.
For the tax issue, one solution (implemented in Brookhaven NY), is to let tenants develop
improvements but the title to those improvements transfers immediately to the airport sponsor
upon building completion or certificate of occupancy. The ground lease protects the tenant
investor for a specified period of time (usually more than 20 years). At the expiration of that
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lease, the airport sponsor (as owner of the improvements) can then lease the property and its
improvements at full market rates. Tenants are required to maintain the rented building during
the lease period, and the airport sponsor inspects and requests repairs and maintenance if needed.
This takes the tax burden off of the tenant and also lets the airport sponsor remain in control of
their hangars.
Another solution to the tax issue may be a Payment in Lieu of Taxes (PILOT). PILOT
can be used as an incentive for investment in taxable infrastructure or other facilities that create a
public benefit. The PILOT may be negotiated to reduce or defer the property taxes on a
developer, striking a balance between public and private financial burdens and needs. In effect,
the sponsor absorbs tax payments on the improved property because it is receiving the benefit of
the business (jobs, activity at the airport, road improvements, etc).
The Pros and Cons of Reversion Clauses: A Sponsor's Perspective
One concern with reversion clauses for the Sponsor is that tenants are less likely to make
improvements on their buildings toward the end of the lease period. One solution to this is by
performing inspections of the tenant premises well before the expiration date of the lease. At
this time a lessor can determine the condition and use of the premises, and ascertain the
willingness of the tenants to make new investments in the leasehold that might merit an
extension of the lease.
In some cases new leases have been approved with suitable ground lease escalators, if the
tenant was willing to make significant new investments in the leasehold. In other cases, an
inspection has shown seriously deficient buildings that cannot readily or cost-effectively be
brought up to code. Then the airport will notify the tenant that the reversion clause of the lease
will take effect at the end of the lease period.
Performing inspections well in advance of the lease expiration date, especially if the
building is in good condition, allows the tenant to get an early answer on what lies ahead, make
investments before the lease is up, and keep the building in good condition. Making sure that
new leases have a clause that allow for periodic inspections of new facilities by airport staff can
also help ensure that the airport takes over a building that has been properly maintained. If an
inspection does not happen until the lease is almost expired, the building may suffer from
deferred maintenance since the building owner may be reluctant to put money into it without
knowing how much time is available to amortize such improvements.
Further Considerations
Before adopting a leasing policy that addresses reversion, the Airport should consider the
following issues:
• The reversion policy should be consistently applied to all existing and prospective
tenants.
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• The airport should take an inventory of the buildings it will be absorbing in the near term
and determine if it can cover the cost to bring any real property improvements up to code.
• Determine if reverted improvements will be attractive to prospective tenants.
• Refer to the airport's Master Plan to find out if current strictures and their locations meet
current and future airport development needs.
• Confirm that the reversion policy is in agreement with the FAA Airport Compliance
Manual stated in FAA Order 5190.613.
• Ensure that there is no discrimination between prospective tenants and current tenants
whose property has reverted.
No Reversion
• This approach may be appropriate if the building is in reasonably good shape and the
type of land use on the leasehold meets the needs of the airport and its tenants. However,
this approach will not maximize the financial return to the sponsor.
• It provides an incentive for tenants to maintain their buildings well and make
improvements over time, and to make sure that all airport riles and lease conditions are
met at all times. However, providing an existing tenant with a new (long-term) lease may
not meet federal non-discrimination requirements if there is other demand for the
leasehold, because it precludes opportunities for new tenants.
• A short-term lease may be appropriate if the Airport Master Plan and/or Layout Plan
defines a new use for it but the new use is not practical yet because other leaseholds that
would be needed are not available yet.
Reversion: Airport,Sponsor Takes Title to a Building
For the reversion options under which the airport sponsor takes title to a building, a
number of issues must be considered:
• The sponsor gains more control over the airport, as there are no tenant subleasing
arrangements.
• The City gains additional revenue.
• The City will have to commit staff and resources to manage and maintain the buildings.
Some buildings may take more resources than others.
• Building maintenance and management needs for facilities that have reverted to the
sponsor will vary.
• Since facilities would revert to the airport sponsor over a long period of time, other
factors (such as whether building maintenance can be adequately handled by existing
airport sponsor staff, or would require additional hiring) are also relevant. Further
detailed analysis would be required.
Building Is Not Salvageable or Land Is Needed for Other Purposes
If the building is not salvageable or the land is needed for other purposes the following
options should be considered:
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• Lease the building back to the tenant, who then makes a new investment.
• Lease it to a new tenant that will make an investment.
• Airport sponsor develops the land.
A reversion clause can also state that the tenant remove any improvement that they have
made to the property. This can be beneficial to the sponsor if the sponsor believes that the
hangar is in too much disrepair to salvage. This saves the cost of demolishing buildings that are
in structural failure. This can also be beneficial to the tenant if the tenant believes the building
materials can be used or sold for some other project.
Reversion clauses have become normal in the aviation industry for a number of reasons.
These include maximizing future revenue streams and maintaining a level of control over the
development and maintenance of facilities on the airport. Each airport has its own lease language
and different approaches to the issue. At Denton, the current lease language supports the
reversion of property improvements to the City. From this analysis, it can be shown that the
Airport will have greater financial production with the reversion clauses than without. Even if
there are individual cases where a negotiated lease term increase or other modification that
postpones the actual property reversion is reached, the prime motivation is because of the
reversion clause. Thus, the reversion clause is a valuable part of the Airport's future revenue
stream and should remain in place.
1.2 Recommendations
The following are a number of basic recommendations to address the key findings
discussed above:
• Thresholds for Terms: Draft and adopt a matrix or formula, which establishes certain
criteria and/or investment and impact thresholds required to qualify for short, medium,
and long term leases. For example, if a tenant is investing up to $100,000, they qualify
for a 10 year lease. For investments of $100,001 to $500,000, tenants would qualify for a
lease of between 10 and 20 years. Investments of over $500,000 could qualify a tenant
for a 30 year lease. Other criteria, such as jobs created or retained, may also be
developed.
• New Leases for Changes: Ensure a new lease is drafted when a tenant wishes to increase
its permitted uses. Assignments only change the responsible party.
• Lease Extensions: For lease extension options, there should be more requirements than
simply the tenant's choice to extend at a new rate. A list of requirements is typically
present in leases for term extensions (tenant is in compliance, no more than X events of
default over X time period, it is in the best interest of the airport, etc.). Additionally, there
may be statutory and/or charter-based limitations on leasehold agreements. Often, options
are not considered part of such limitations; however, if not articulated precisely, some
language could actually exceed the authority of the City.
• Rent Escalations: The method of determining rent escalations should be modified at the
Airport. While escalations based on the Consumer Price Index (CPI) are common, a
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growing number of lessor's and lessee's prefer straight-line increases (X percent
annually, periodically, etc). Additionally, the analysis found no provisions in lease rent
escalations for re-appraisals of the demised premises being rented. In this way, the
Airport as the lessor could be vulnerable to changes in the market value that are not
balanced with CPI or other increases. The inclusion of property appraisals every five
years, with maximum limitations, will likely provide added protection to the Airport.
• FAA Requirements: Ensure that all FAA required and recommended clauses are
present.
• Insurance Provisions: Ensure that there is a clear procedure and method of dividing up
insurance proceeds in the event of partial or total destruction of the property. It is clear
that the buildings revert to the Airport at the end of the lease; however, it is unclear what
happens if the demised premises are destroyed in year one or in year 29. Thus, leases
should establish the procedure and identify recipients of insurance claim payments.
• Reversion Clauses: From this analysis, it can be shown that the Airport will have greater
financial production with the reversion clauses than without. Even if there are individual
cases where a negotiated lease term increase or other modification that postpones the
actual property reversion is reached, the prime motivation is because of the reversion
clause. Thus, the reversion clause is a valuable part of the Airport's future revenue
stream and should remain in place.
R.A. Wiedemann & Associates, Inc. in association i s ith CHA, Inc. C- 7
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EXHIBIT 2
Appendix D:
Local and State Incentives
EXHIBIT 2
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
Appendix D - Local and State Incentive Programs
There are a number of local and State incentive programs available to businesses that intend
to expand or locate in Denton. These programs are listed on the Denton Economic Development
Partnership web site (http:Hdentonedp.com/existing business/existing business incentives. asp) as
follows:
1. LOCAL PROGRAMS
1.1 Tax Abatement
The City of Denton adopted a tax abatement policy that is available to new and expanding
businesses, corporate office headquarters and distribution centers. History and philosophy of the
firm, project specifications, and the potential impact on the community are factors that are
considered during the application approval process. Projects must meet the Qualifying Criteria. Each
project is negotiated on a case-by-case basis and must be approved by the City Council.
Qualifying Criteria:
• New and expanding businesses
• Corporate office headquarters and distribution centers
• Minimum capital investment required is $5 million
• History and philosophy of the firm, project specifications, and the potential impact
on the community are factors that are considered during the application approval
process.
Abatement Guidelines:
• Abatements begin at 25% and can range up to 50% based on additional factors.
• Each project is negotiated on a case-by-case basis and must be approved by the City
Council.
• No applicant may receive credit for more than five of the additional factors.
Additional Factors (5% Each):
• The project will occupy a building that has been vacant for at least two years;
• The proj ect will create high-skilled, high-paying j obs as documented by the applicant
(A breakdown of number of jobs per job classification and entry level wage per
classification will be used to determine eligibility);
• The project will involve a significant relationship with one of the two universities in
Denton;
• At least 25% of the new jobs created by the project will be filled by Denton
residents;
• The project will provide knowledge-based jobs (at least 25 percent of jobs require
college bachelors degree at entry level);
• The proj ect will donate significant public art to the community (To qualify, donation
must be approved by Greater Denton Arts Council and City Council);
R.A. Wiedemann & Associates, Inc., in association i s ith CHA, Inc. D-1
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
• The project will donate significant materials/equipment to the public schools (to
qualify, donation must be approved by DISD and City Council);
• The project will create improvements to the Denton Central Business District;
• The project will result in the formation of a business park;
• The project is an international or national headquarters facility;
• The project is a medical manufacturing or research facility.
1.2 Denton Municipal Electric Industrial Development Rider
Denton's electric utility service provider is Denton Municipal Electric (DME). New and
expanding industrial and commercial service customers may receive a reduction from DME in their
demand billing.
Qualifying Criteria:
• New and expanding industrial and commercial service customers.
• Customers whose electric service represents demand not previously served by the
City at any location in the City's service area in the last 12 months.
• Metered demand is in excess of 225 KVA or 200 KW per month.
1.3 Triple Freeport Tax Exemption
The City of Denton, Denton County and Denton Independent School District passed the
Freeport Amendment, which exempts certain business personal property from ad valorem taxes.
Goods, wares, merchandise, other tangible personal property, ores (other than oil, natural gas and
other petroleum products) are exempt from ad valorem taxation if the property is (1) used for
assembling, storing, manufacturing, processing, or fabricating and (2) is shipped outside the state
no longer than 175 days after it is acquired.
1.4 Infrastructure Assistance
The City of Denton promotes economic growth through a program of infrastructure
financing. This program is available to industrial, distribution, and corporate headquarter prospects
which have committed to building facilities in Denton. Commercial and retail prospects, which sell
a majority of their goods or services to individuals or businesses outside of Denton, may also
qualify. An economic analysis is performed on each project to determine project costs and benefits
over a five-year period. The results of the analysis are an important factor in the project approval
process.
1.5 Industrial Revenue Bonds
The City of Denton has established a nonprofit industrial development corporation
authorized to issue tax-exempt or taxable revenue bonds under Texas' Development Corporation Act
of 1979. Eligible projects must promote the development or expansion of manufacturing facilities
in Denton. Bond proceeds may be used for land, depreciable property, inventory, raw materials,
R.A. Wiedemann & Associates, Inc., in association i s ith CHA, Inc. D-2
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
finance charges, and research and development costs.
1.6 Downtown Incentive Reimbursement Grant Program
The City of Denton Economic Development Department works to revitalize and enhance the
unique character of Downtown through historic preservation and community involvement, while at
the same time promoting Downtown, providing educational and technical assistance to business and
property owners, and maintaining the beauty of Denton. As an economic incentive, the City of
Denton Economic Development Department has designed an incentive reimbursement grant
program that provides up to $50,000 for qualifying projects.
1.7 Grants and Loans (Chapter 380)
Chapter 380 of the Local Government Code provides very significant legislative authority
for Texas municipalities in the area of economic development. When a city wants to provide a grant
or a loan of city funds or services in order to promote economic development, it generally cites its
powers under Chapter 380. Cities have utilized the provisions under this law to provide a myriad
of incentives that have drawn businesses and industries to locales throughout Texas. This statute
basically allows the provision of loans and grants of city funds, as well as the use of city staff, city
facilities, or city services at minimal or no charge.
2.0 STATE INCENTIVES
The Texas Office of the Governor, Economic Development & Tourism assists relocating
businesses by linking them with other programs that are offered through agencies statewide. Listed
below are some additional economic development programs:
2.1 Texas Enterprise Fund
The Texas Enterprise Fund can be used for a variety of economic development projects,
including infrastructure development, community development, job training programs, and business
incentives. These funds are used primarily to attract new business to the State of Texas or to assist
with the substantial expansion of an existing business as part of a competitive recruitment situation.
2.2 Emerging Technology Programs
The Texas Emerging Technology Program is designed to help Texas create jobs and grow
the economy over the long-term by expediting the development and commercialization of new
technologies and attracting and creating j obs in technology fields that will from the backbone of our
economy. The program works through three-way partnership between the state, institutions of higher
educations, and private industry to focus greater attention on the research, development and
commercialization of emerging technology.
R.A. Wiedemann & Associates, Inc., in association i s ith CHA, Inc. D-3
EXHIBIT 2
Denton Municipal Airport
Business Plan October 2010
2.3 Skills Development Fund
The Skills Development Fund is an innovative program created to assist Texas public
community and technical colleges in financing customized job training for their local businesses.
Average training costs are $1,000 per trainee; however, the benefit may vary depending on the
proposal. North Central Texas College has worked in conjunction with state officials on the skills
development fund program and would be willing to submit an application on the project's behalf.
2.4 In-State Tuition for Employees
The Economic Development and Diversification In-State Tuition incentive may be offered
to qualified businesses that are in the decision-making process to relocate or expand their operations
into Texas. The incentive allows employees and family members of the qualified businesses to pay
in-state tuition fees if the individual files with a Texas institution of higher education. Without this
incentive designation, a student must reside in Texas for a 12-month period to be entitled to pay the
tuition fees of a Texas resident.
2.5 Pollution Control Property Tax Exemption
A Texas constitutional amendment providing an exemption from property taxation for
pollution control devices, equipment or land for air, water, or land pollution control was approved
in 1993. This program provides an exemption of real and personal property tax for the life of the
eligible equipment. The individual or company seeking the exemption must submit a use and
determination permit to the Texas Commission on Environmental Quality (TCEQ). That positive
use determination is then provided to the local appraisal district, which must accept the TCEQ's
decision and grant the property an exemption from property taxes.
2.6 Texas Manufacturing Assistance Center
The Texas Manufacturing Assistance Center (TMAC) is part of a national network of
Manufacturing Extension Partnerships supported by the National Institute of Standards and
Technology. TMAC helps identify problems in manufacturing processes, recommends solutions,
and helps execute projects. TMAC field engineers operate out of offices located nearby to provide
hands-on assistance to firms seeking to upgrade their operations to become more competitive.
TMAC services include assessment and benchmarking of existing operations; technical awareness
projects (seminars, workshops, etc.); technical assistance projects including specific technology,
engineering or management solutions (e.g., TQM, ISO 9000, Process Improvement, Inventory
Control and Management, Plant/Equipment upgrades, CAD/CAE/CAM); and Deployment Group
Management to assist sets of companies with common problems implement common solutions.
R.A. Wiedemann & Associates, Inc., in association i s ith CHA, Inc. D-4
EXHIBIT 3
2010 Airport Business Plan
Summary of Edits
In addition to minor text edits to clarify intent, the following revisions have been made to the
DRAFT 2010 Business Plan:
ntan+
Pate Reference
1. Reference to transition to operating the Airport E-1; Pg 49-53
as an Enterprise Fund was edited to reflect the
financial management status as approved by the
City Council beginning with the 2010/2011 Airport
Budget;
2. Modified reference to governance of the Airport E-1; Pg 52
as an Enterprise Fund;
3. Updated the Airport Organization Chart to Pg 8
Identify the current management structure;
4. Modified the Baseline Financial Pro Forma to Pg 36
correct the Gas Well Fund balance projection.
5. Priority of recommendations for Land Acquisition E-5
and Hangar Development were switched for the
2011-2012 timeline.
6. In Section 2.2, a statement of the City Council as Pg 7
the authority to review and approve Airport
operating policy and rates for property leases
and services was added.
This page left blank intentionally .
AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010
DEPARTMENT: Airport
ACM: Jon Fortune
SUBJECT
Consider adoption of an ordinance of the City of Denton authorizing the City Manager, or his
designee, to execute on behalf of the City of Denton an acceptance of an offer from the Texas
Department of Transportation (TxDOT) relating to a grant for the Routine Airport Maintenance
Program (RAMP); authorizing the City Manager to expend funds provided for in the grant
program; and declaring an effective date. (TxDOT Project No. AM 2011DNTON and TxDOT
CSJ No. M118DNTON). (Airport Advisory Board approved 6-0)
BACKGROUND
Since 1996, the City of Denton has entered into grant agreements with the Texas Department of
Transportation Aviation Division (TxDOT Aviation), known as the Routine Airport Maintenance
Program (RAMP). The RAMP grant provides for a fifty percent (50%) state-funding match to the
local government sponsor. The 2011 grant is capped at $50,000 of available state assistance.
Airport Management has identified a number of projects that could be completed with this grant
for 2011.
Pavement $40,000
Pavement Markings $15,000
Miscellaneous $45,000
Following is a summary of actual RAMP Grant expenditures for the prior two fiscal years:
Proi ects
2008/09
2009/2010
Drainage Improvements
$51,300
$19,512.90
Asphalt Paving/Repair
$ -0-
$37,934.48
Concrete Paving/Repair
$ -0-
$ 9,30736
Navigation Aids Improvements
$21,215
$10,768.00
Gate Control Repair
$ 2,050
$ 2,425.00
Security & Fence Repair
$ 3,551
$10,100.00
Other Maintenance/Supplies
$21,882
$ 5,058.43
Chemicals
$ -0-
$ 4,565.92
TOTAL
$99,998
$99,672.09
ESTIMATED SCHEDULE OF PROJECT
TxDOT Aviation is requesting two signed copies of the agreement be returned expeditiously. The
State must approve its share of funding prior to the start of any project and TxDOT Aviation has
requested that all projects be completed by September 2011.
Agenda Information Sheet
November 16, 2010
Page 2
PRIOR ACTION/REVIEW (Council, Boards, Commissions)
The Airport Advisory Board recommended approval at their November 10, 2010 meeting.
FISCAL INFORMATION
The City's fifty percent (50%) match for the $100,000 grant is $50,000, which is reflected in the
2011 Airport Budget.
EXHIBITS
1. Ordinance
2. TxDOT Grant Agreement
3. Draft Airport Advisory Board Minutes
Respectfully submitted:
Quentin Hix
Airport Manager
sAegaAour documentslordinances\10\airport txdot ramp grant.doc
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AUTHORIZING THE CITY
MANAGER, OR HIS DESIGNEE, TO EXECUTE ON BEHALF OF THE CITY OF DENTON
AN ACCEPTANCE OF AN OFFER FROM THE TEXAS DEPARTMENT OF
TRANSPORTATION RELATING TO A GRANT FOR THE ROUTINE AIRPORT
MAINTENANCE PROGRAM; AUTHORIZING THE CITY MANAGER TO EXPEND FUNDS
PROVIDED FOR IN THE GRANT PROGRAM; AND DECLARING AN EFFECTIVE DATE
(TXDOT Project No.: AM 2011DNTON AND TXDOT CSJ No.: M118DNTON).
WHEREAS, the City Manager recommends that the City accept an Agreement with the
Texas Department of Transportation ("TxDOT") providing a grant of $50,000 for the Routine
Airport Maintenance Program and requiring the City to provide $50,000 in matching funds; and
WHEREAS, the City Council deems the acceptance of this Agreement with TxDOT to be
in the public interest; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City Manager of the City of Denton, or his designee, is hereby authorized
to execute on behalf of the City of Denton an acceptance of an offer from the Texas Department of
Transportation relating to a grant for Routine Airport Maintenance Program, a copy of such grant
being attached hereto and made a part hereof for all purposes (the "Grant Agreement").
SECTION 2. The City Manager is hereby authorized to expend such funds as are provided
for in the Grant Agreement and to take all actions necessary to implement the Grant Agreement.
SECTION 3. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of , 2010.
MARK A. BURROUGHS, MAYOR
1
s:VegAour documentslordinances1101airport txdot ramp grant.doc
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
TEXAS DEPARTMENT OF TRANSPORTATION
GRANT FOR ROUTINE AIRPORT MAINTENANCE PROGRAM
(State Assisted Airport Routine Maintenance)
TxDOT Project No.: AM 2011DNTON
TxDOT CSJ No.: M118DNTON
Part I - Identification of the Project
TO: The City of Denton, Texas
FROM: The State of Texas, acting through the Texas Department of Transportation
This Grant is made between. the Texas Department of Transportation, (hereinafter
referred to as the "State"), on behalf of the State of Texas, and the City of Denton, Texas,
(hereinafter referred to as the "Sponsor").
This Grant Agreement is entered into between the State and Sponsor shown above, under
the authority granted and in compliance with the provisions of the Transportation Code, Chapter
21.
The project is for airport maintenance at the Denton Municipal Airport.
Part II - Offer of Financial Assistance
For the purposes of this Grant, the annual routine maintenance project cost, Amount A, is
estimated as found on Attachment A, Scope of Services, attached hereto and made a part
of this grant agreement.
State financial assistance granted will be used solely and exclusively for airport
maintenance and other incidental items as approved by the State. Actual work to be
performed under this agreement is found on Attachment A, Scope of Services. State
financial assistance, Amount B, will be for fifty percent (50%) of the eligible project
costs for this project or $50,000.00, which ever is less, per fiscal year and subject to
availability of state appropriations.
The Sponsor may request the State to provide mowing services, services to be provided at
the discretion of the State. However, mowing services will not be eligible for state
financial assistance. Sponsor will be responsible for 100% of costs of any mowing
services.
Page 1 of 12
AVN4301.DOC (8!2008)
Scope of Services, Attachment A, of this Grant, may be amended, subject to availability
of state funds, to include additional approved airport maintenance work. Scope
amendments require submittal of an Amended Scope of Services, Attachment A.
Services will not be accomplished by the State until receipt of Sponsor's share of project
costs.
Only work items as described in Attachment A, Scope of Services of this Grant are
reimbursable under this grant.
Work shall be accomplished by August 31, 2011, unless otherwise approved by the State.
2. The State shall determine fair and eligible project costs for work scope. Sponsor's share
of estimated project costs, Amount C, shall be as found on Attachment A and any
amendments.
It is mutually understood and agreed that if, during the term of this agreement, the State
determines that there is an overrun in the estimated annual routine maintenance costs, the
State may increase the grant to cover the amount of the overrun within the above stated
percentages and subject to the maximum amount of state funding.
The State will not authorize expenditures in excess of the dollar amounts identified in this
Agreement and any amendments, without the consent of the Sponsor.
Sponsor, by accepting this Grant certifies and, upon request, shall furnish proof to the
State that it has sufficient funds to meet its share of the costs. The Sponsor grants to the
State the right to audit any books and records of the Sponsor to verify expended funds.
Upon execution of this Agreement and written demand by the State, the Sponsor's
financial obligation (Amount C) shall be due in cash and payable in full to the State.
State may request the Sponsor's financial obligation in partial payments. Should the
Sponsor fail to pay their obligation, either in whole or in part, within 30 days of written
demand, the State may exercise its rights under Paragraph V-3. Likewise, should the
State be unwilling or unable to pay its obligation in a timely manner, the failure to pay
shall be considered a breach and the Sponsor may exercise any rights and remedies it has
at law or equity.
The State shall reimburse or credit the Sponsor, at the financial closure of the project, any
excess funds provided by the Sponsor which exceed Sponsor's share (Amount C).
4. The Sponsor specifically agrees that it shall pay any project costs which exceed the
amount of financial participation agreed to by the State. It is further agreed that the
Sponsor will reimburse the State for any payment or payments made by the State which
are in excess of the percentage of financial assistance (Amount B) as stated in Paragraph
II-1.
Page 2 of 12
AV N430I .DOC (8/2008)
Scope of Services may be accomplished by State contracts or through local contracts of
the Sponsor as determined appropriate by the State. All locally contracted work must be
approved by the State for scope and reasonable cost. Reimbursement requests for locally
contracted work shall be submitted on forms provided by the State and shall include
copies of the invoices for materials or services. Payment shall be made for no more than
50% of allowable charges.
The State will not participate in funding for force account work conducted by the
Sponsor.
6. This Grant shall terminate upon completion of the scope of services.
Part III - Sponsor Responsibilities
In accepting this Grant, if applicable, the Sponsor guarantees that:
a. it will, in the operation of the facility, comply with all applicable state and federal
laws, rules, regulations, procedures, covenants and assurances required by the
State in connection with this Grant; and
b. the Airport or navigational facility which is the subject of this Grant shall be
controlled by the Sponsor for a period of at least 20 years; and
c. consistent with safety and security requirements, it shall make the airport or air
navigational facility available to all types, kinds and classes of aeronautical use
without discrimination between such types, kinds and classes and shall provide
adequate public access during the period of this Grant; and
d. it shall not grant or permit anyone to exercise an exclusive right for the conduct of
aeronautical activity on or about an airport landing area. Aeronautical activities
include, but are not limited to scheduled airline flights, charter flights, flight
instruction, aircraft sales, rental and repair, sale of aviation petroleum products
and aerial applications. The landing area consists of runways or landing strips,
taxiways, parking aprons, roads, airport lighting and navigational aids; and
it shall not enter into any agreement nor permit any aircraft to gain direct ground
access to the sponsor's airport from private property adjacent to or in the
immediate area of the airport. Further, Sponsor shall not allow aircraft direct
ground access to private property. Sponsor shall be subject to this prohibition,
commonly known as a "through-the-fence operation," unless an exception is
granted in writing by the State due to extreme circumstances; and
f. it shall not permit non-aeronautical use of airport facilities without prior approval
of the State; and
g. the Sponsor shall submit to the State annual statements of airport revenues and
Page 3 of 12
AVN4301.DOC (8/2048)
expenses when requested; and
h. all fees collected for the use of the airport shall be reasonable and
nondiscriminatory. The proceeds from such fees shall be used solely for the
development, operation and maintenance of the airport or navigational facility;
and
i. an Airport Fund shall be established by resolution, order or ordinance in the
treasury of the Sponsor, or evidence of the prior creation of an existing airport
fund or a properly executed copy of the resolution, order, or ordinance creating
such a fund, shall be submitted to the State. The fund may be an account as part of
another fund, but must be accounted for in such a manner that all revenues,
expenses, retained earnings, and balances in the account are discernible from
other types of moneys identified in the fund as a whole. All fees, charges, rents,
and money from any source derived from airport operations must be deposited in
the Airport Fund and shall not be diverted to the general revenue fund or any
other revenue fund of the Sponsor. All expenditures from the Airport Fund shall
be solely for airport purposes. Sponsor shall be ineligible for a subsequent grant
or loan by the State unless, prior to such subsequent approval of a grant or loan,
Sponsor has complied with the requirements of this subparagraph; and
j. the Sponsor shall operate runway lighting at least at low intensity from sunset to
sunrise; and
k. insofar as it is reasonable and within its power, Sponsor shall adopt and enforce
zoning regulations to restrict the height of structures and use of land adjacent to or
in the immediate vicinity of the airport to heights and activities compatible with
normal airport operations as provided in Tex. Loc. Govt. Code Ann. Sections
241.001 et seq. (Vernon and Vernon Supp.). Sponsor shall also acquire and retain
aviation easements or other property interests in or rights to use of land or
airspace, unless sponsor can show that acquisition and retention of such interest
will be impractical or will result in undue hardship to Sponsor. Sponsor shall be
ineligible for a subsequent grant or loan by the State unless Sponsor has, prior to
subsequent approval of a grant or loan, adopted and passed an airport hazard
zoning ordinance or order approved by the State.
2. The Sponsor, to the extent of its legal authority to do so, shall save harmless the State, the
State's agents, employees or contractors from all claims and liability due to activities of
the Sponsor, the Sponsor's agents or employees performed under this agreement. The
Sponsor, to the extent of its legal authority to do so, shall also save harmless the State, the
State's agents, employees or contractors from any and all expenses, including attorney
fees which might be incurred by the State in litigation or otherwise resisting claim or
liabilities which might be imposed on the State as the result of those activities by the
Sponsor, the Sponsor's agents or employees.
Page 4 of 12
AVN4301.DOC (8/2008)
3. The Sponsor's acceptance of this Offer and ratification and adoption of this Grant shall be
evidenced by execution of this Grant by the Sponsor. The Grant shall comprise a
contract, constituting the obligations and rights of the State of Texas and the Sponsor
with respect to the accomplishment of the project and the operation and maintenance of
the airport.
ff it becomes unreasonable or impractical to complete the project, the State may void this
agreement and release the Sponsor from any further obligation of project costs.
4. Upon entering into this Grant, Sponsor agrees to name an individual, as the Sponsor's
Authorized Representative, who shall be the State's contact with regard to this project.
The Representative shall receive all correspondence and documents associated with this
grant and shall make or shall acquire approvals and disapprovals for this grant as required
on behalf of the Sponsor, and coordinate schedule for work items as required.
5. By the acceptance of grant funds for the maintenance of eligible airport buildings, the
Sponsor certifies that the buildings are owned by the Sponsor. The buildings may be
leased but if the lease agreement specifies that the lessee is responsible for the upkeep
and repairs of the building no state funds shall be used for that purpose.
6. Sponsor shall request reimbursement of eligible project costs on forms provided by the
State. All reimbursement requests are required to include a copy of the invoices for the
materials or services. The reimbursement request will be submitted no more than once a
month.
7. The Sponsor's acceptance of this Agreement shall comprise a Grant Agreement, as
provided by the Transportation Code, Chapter 21, constituting the contractual obligations
and rights of the State of Texas and the Sponsor with respect to the accomplishment of
the airport maintenance and compliance with the assurances and conditions as provided.
Such Grant Agreement shall become effective upon the State's written Notice to Proceed
issued following execution of this agreement.
Page 5 of 12
AVN430LDOC (8/2008)
PART IV - Nomination of the Agent
The Sponsor designates the State as the party to receive and disburse all funds used, or to
be used, in payment of the costs of the project, or in reimbursement to either of the
parties for costs incurred.
2. The State shall, for all purposes in connection with the project identified above, be the
Agent of the Sponsor. The Sponsor grants the State a power of attorney to act as its agent
to perform the following services:
a. accept, receive, and deposit with the State any and all project funds granted,
allowed, and paid or made available by the Sponsor, the State of Texas, or any
other entity;
b. enter into contracts as necessary for execution of scope of services;
C. if State enters into a contract as Agent: exercise supervision and direction of the
project work as the State reasonably finds appropriate. Where there is an
irreconcilable conflict or difference of opinion, judgment, order or direction
between the State and the Sponsor or any service provider, the State shall issue a
written order which shall prevail and be controlling;
d. receive, review, approve and pay invoices and payment requests for services and
materials supplied in accordance with the State approved contracts;
obtain an audit as may be required by state regulations; the State Auditor may
conduct an audit or investigation of any entity receiving funds from TxDOT
directly under this contract or indirectly through a subcontract under this contract.
Acceptance of funds directly under this contract or indirectly through a
subcontract under this contract acts as acceptance of the authority of the State
Auditor, under the direction of the legislative audit committee, to conduct an audit
or investigation in connection with those funds. An entity that is the subject of an
audit or investigation must provide the state auditor with access to any
information the state auditor considers relevant to the investigation or audit.
reimburse sponsor for approved contract maintenance costs no more than once a
month.
PART V - Recitals
This Grant is executed for the sole benefit of the contracting parties and is not intended or
executed for the direct or incidental benefit of any third party.
Page 6 of 12
AVN430] .DOC (812008)
It is the intent of this grant to not supplant local funds normally utilized for airport
maintenance, and that any state financial assistance offered under this grant be in addition
to those local funds normally dedicated for airport maintenance.
This Grant is subject to the applicable provisions of the Transportation Code, Chapters 21
and 22, and the Airport Zoning Act, Tex. Loc. Govt. Code Ann. Sections 241.001 et seq.
(Vernon and Vernon Supp.). Failure to comply with the terms of this Grant or with the
rules and statutes shall be considered a breach of this contract and will allow the State to
pursue the remedies for breach as stated below.
a. Of primary importance to the State is compliance with the terms and conditions of
this Grant. If, however, after all reasonable attempts to require compliance have
failed, the State finds that the Sponsor is unwilling and/or unable to comply with
any of the terms of this Grant, the State, may pursue any of the following
remedies: (1) require a refund of any financial assistance money expended
pursuant to this Grant, (2) deny Sponsor's future requests for aid, (3) request the
Attorney General to bring suit seeking reimbursement of any financial assistance
money expended on the project pursuant to this Grant, provided however, these
remedies shall not limit the State's authority to enforce its rules, regulations or
orders as otherwise provided by law, (4) declare this Grant null and void, or (5)
any other remedy available at law or in equity.
b. Venue for resolution by a court of competent jurisdiction of any dispute arising
under the terms of this Grant, or for enforcement of any of the provisions of this
Grant, is specifically set by Grant of the parties in Travis County, Texas.
4. The State reserves the right to amend or withdraw this Grant at any time prior to
acceptance by the Sponsor. The acceptance period cannot be greater than 30 days after
issuance unless extended by the State.
This Grant constitutes the full and total understanding of the parties concerning their
rights and responsibilities in regard to this project and shall not be modified, amended,
rescinded or revoked unless such modification, amendment, rescission or revocation is
agreed to by both parties in writing and executed by both parties.
All commitments by the Sponsor and the State are subject to constitutional and statutory
limitations and restrictions binding upon the Sponsor and the State (including Sections 5
and 7 of Article I I of the Texas Constitution, if applicable) and to the availability of
funds which lawfully may be applied.
Page 7 of 12
AVN4301.DOC (812008)
Part VI - Acceptances
Sponsor
The City of Denton, Texas, does ratify and adopt all statements, representations,
warranties, covenants, agreements, and all terms and conditions of this Grant.
Executed this day of
20
City of Denton Texas
Sponsor
Witness Signature
Sponsor Signature
Witness Title Sponsor Title
Certificate of Attorney
I, 7S-nr\ M . c.~.t acting as attorney for 0 z~ku S b'Q ACj':I ,
Texas, do certify that I have y examined the Grant and the proceedings taken by the Sponsor
relating to the acceptance of the Grant, and find that the manner of acceptance and execution of
the Grant by the Sponsor, is in accordance with the laws of the State of Texas.
Dated at j, & 1 , Texas, this <'4-L day of L )0 Oe.411~ , 2O- p.
OAA.c a ~a
'Att 2L~L "
itness Signature
AftornWs Signa e
Witness Title
Page S of 12
A VN430 ] .DOC (812008)
Acceptance of the State
Executed by and approved for the Texas Transportation Commission for the purpose and effect
of activating and/or carrying out the orders, established policies or work programs and grants
heretofore approved and authorized by the Texas Transportation Commission.
STATE OF TEXAS
TEXAS DEPARTMENT OF TRANSPORTATION
By:
Date:
Page 9 of 12
AVN4301 DOC (8/2008)
Attachment A
Scope of Services
TxDOT CSJ No.:M118DNTON
Eligible Scopeltems:
Estimated Costs
State. Share
Sponsor Share
AmountA
AmountB
Amount`C
PAVEMENTS
$40,000.00
$20,000.00
$20,000.00
GENERAL MAINTENANCE
$0.00
$0.00
$0.00
PAVEMENT MARKINGS
$15,000.00
$7,500.00
$7,500.00
GRADING/DRAINAGE
$0.00
$0.00
$0.00
MISCELLANEOUS
$45,000.00
$22,500.00
$22,500.00
ITotal
$100,000.00
$50,000.00
$50,000.00
Accepted by: City_ of Denton, Texas
Signature
Title:
Date:
Notes: (explanations of any specifications or variances as needed for above scope items)
PAVEMENTS - Sponsor to contract for pavement maintenance/imvrovements.
GRADING/DRAINAGE - Sponsor to contract for drainage improvements.
MISCELLANEOUS - Sponsor to contract for chemical applications, radio repairs-, fence and
gate reevairs/maintenance; airport signage; and security lighting. Other projects to, be determined
and added by amendment.
Only work items as described in Attachment A, Scope of Services of this Grant are
reimbursable under this grant.
Page 10 of 12
AVN4301.DOC (812008)
CERTIFICATION OF AIRPORT FUND
TxDOT CSJ No.: M118DNTON
The City of Denton does certify that an Airport Fund has been established for the Sponsor, and
that all fees, charges, rents, and money from any source derived from airport operations will be
deposited for the benefit of the Airport Fund and will not be diverted for other general revenue
fund expenditures or any other special fund of the Sponsor and that all expenditures from the
Fund will be solely for airport purposes. The fund may be an account as part of another fund,
but must be accounted for in such a manner that all revenues, expenses, retained earnings, and
balances in the account are discernible from other types of moneys identified in the fund as a
whole.
City of Denton, Texas
(Sponsor)
By:
e" 9
Title:
Date: '6 /Z J// C,
T
State of Texas Single Audit Requirements
1, do certify that the City of Denton will comply with all
esignated Repr tati
requirements of the State of-Texas Single Audit Act if the city/county spends or receives more
than $500,000 in any funding sources during this fiscal year. And in following those
requirements, the City of Denton will submit the report to the audit division of the Texas
Department of Transportation. If your entity did not meet the threshold of $500,000.00 in grant
expenditures, please submit a letter indicating that your entity is not require~d't~ have a State
Single Audit performed for the most recent audited fiscal yew
v ~ z
Title
Date
Page 11 of 12
AVN4301.DOC (812008)
DESIGNATION OF SPONSOR'S AUTHORIZED REPRESENTATIVE
TxDOT CSJ Number: M118DNTON
The City of Denton designates, I"tYlaVP- k J~ttY1t~1~ _y~'~
e, Title)
as the Sponsor's authorized representative, who shall receive all correspondence and documents
associated with this grant and who shall make or shall acquire approvals and disapprovals for
this grant as required on behalf of the Sponsor.
City of Denton, Texas
(Sponsor)
By:
Title:
Date:
TPIN:
Address:
DESIGNATED REPRESENTATIVE
Mailing Address:
5om A.-rc-ac-c KwA
ay-) X t C~ I
Overnight Mailing Address:
R-,o
eN-A(LG I T~, 1 l A::Lj
Telephone/Fax Number: C h6 5 q q - i y(S
_ c x Le4 L49 LZ9
Email address: COY iC~ n e &r Ci 46~Ae~LLon , C,0~rv-~
Page 12 of 12
AVN4301.DOC (8/2008)
Approved by Airport Advisory
Board on
Chairman Mr. Brown
DRAFT MINUTES
AIRPORT ADVISORY BOARD Secretary, Mrs. Mullins
NOVEMBER 10, 2010
After determining that a quorum was present, the Airport Advisory Board of the City of Denton, Texas
convened in a Regular Meeting on November 10, 2010 at 5:30 p.m. in the Airport Terminal Building,
Meeting Room at 5000 Airport Road, Denton, Texas, at which the following items were considered:
BOARD MEMBERS PRESENT: Chairman, Mr. Brown, Vice Chairman Mr. Brewer, Dr. Smith, Mr.
Pugh, Mr. Schofield and Mr. Clark.
BOARD MEMBERS ABSENT: Mr. Fykes excused absent.
STAFF MEMBERS PRESENT: Quentin Hix, Airport Manager, Julie Mullins, Administrative
Assistant, Andrea Sumner, Operations Coordinator, Mark Nelson, Transportation Director, Bryan
Langley, Chief Financial Officer and Director of Strategic Services.
PUBLIC PRESENT: Mark Taylor, US Aviation Group, Jeff Soules, US Aviation Group, Rick
Woolfolk.
ITEMS FOR INDIVIDUAL CONSIDERATION
IV. Receive a report, hold a discussion and provide a recommendation to City Council requesting the
City Manager, or his designee, to execute on behalf of the City of Denton an acceptance of an
offer from the Texas Department of Transportation (TxDOT) relating to a grant for the Routine
Airport Maintenance Program (RAMP); authorizing the City Manager to expend funds provided
for in the grant program; and declaring an effective date. TxDOT Project No. AM 201IDNTON
and TxDOT CSJ No. M118DNTON).
Mr. Hix explained the Routine Airport Maintenance Program (RAMP) Grant to the Board and
how the 50/50 grant will be identified in different areas of maintenance. Chairman Brown had
questions on the project breakdown mentioning the miscellaneous amount. Mr. Hix explained
that the Texas Department of Transportation Aviation Division approves the amounts in each
category.
Dr. Smith made a motion to make a recommendation to City Council for approval. Mr.
Clark seconded motion.
Motion carried 6-0.
This page left blank intentionally .
AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010
DEPARTMENT: Transportation Operations
Al-L
ACM: Jon Fortune
SUBJECT
Consider approval of a resolution of the City of Denton, Texas requesting improvements to
Interstate 35 East as designed by the Texas Department of Transportation to be fully funded and
implemented for the full project length from Interstate 635 in Dallas County to U.S. Highway
380 in Denton County; and providing an effective date.
BACKGROUND
In May 2010, the Dallas Regional Mobility Coalition (DRMC) formed the Interstate Highway 35
East (I-35E) Stakeholder's Coalition to address the critical funding shortfall for 1-35E. The
I-35E Stakeholder's Coalition is composed of elected and appointed officials representing
communities along the 28-mile I-35E corridor, I-635 in Dallas County to U.S. 380 in Denton,
where planned improvements will enhance the mobility of the region. Mayor Pro-Tem Kamp
serves as the City of Denton representative on the 1315E Stakeholder's Coalition. One of the
primary goals of the I-35E Stakeholder's Coalition is to serve as a unifying body to present a
single voice to the State Legislature and demonstrate local support for a project delivery method.
Project delivery concept is currently in the form of a public-private partnership which will fund
the proposed enhancements thereby improving mobility, air quality and the quality of life for all
in the North Texas Region.
The Texas Department of Transportation (TxDOT) estimates that the total cost of the 28-mile
I-35E expansion project is $4.4 billion. There are currently no significant state or federal funds
allocated towards the expansion of this section of I-35E to alleviate current and projected traffic
congestion. To date, Denton County has pledged $590 million towards the I-35E expansion
project; $535 million from State Highway 121 Regional Toll Revenues and $55 million from
transportation bonds. No federal, state or private equity funds have been made available to the
I-3 5E project; however, other priority projects in the North Texas Region do enjoy these funds.
Transportation experts estimate a public-private partnership delivery method can constrict this
project in five to seven years. The "pay as you go" appropriations method using traditional gas
tax revenue could delay implementation of this project for an additional 20-30 years.
The use of managed lanes on I-35E has been authorized by the Federal Highway Administration
(FHWA) through approval of an Expressed Lane Demonstration Program entered into between
TxDOT and FHWA on September 30, 2009. On November 18, 2010, a Public Hearing will be
held for the Environmental Assessment for the 12-mile middle segment, George Bush in
Agenda Information Sheet
November 16, 2010
Page 2
Lewisville to FM 2181 in Corinth. At the November 2, 2002 I-35E Stakeholder's meeting,
DRMC Executive Director, Rider Scott, requested that Stakeholder entities consider support
resolutions by their respective legislative bodies for the I-35E public private partnership delivery
method and have those available, if possible, prior to the November 18, 2010, Public Hearing. A
draft resolution, supporting this position, has been provided, as Exhibit 1, for Council
consideration.
PRIOR ACTION/REVIEW
City of Denton Legal Department has reviewed and approved Exhibit 1 as to legal form.
RECOMMENDATION
Staff recommends approval of the draft support resolution.
EXHIBITS
Draft Support Resolution for I-35E
Respectfully submitted,
~C
Mark Nelson
Transportation Director
1lcodadldepartmentsl1ega1lour documentsWesolutionsl1 pltxdot improvements to i35e.doc
RESOLUTION NO.
A RESOLUTION OF THE CITY OF DENTON, TEXAS REQUESTING IMPROVEMENTS
TO INTERSTATE 35 EAST AS DESIGNED BY THE TEXAS DEPARTMENT OF
TRANSPORTATION TO BE FULLY FUNDED AND IMPLEMENTED FOR THE FULL
PROJECT LENGTH FROM INTERSTATE HIGHWAY 635 IN DALLAS COUNTY TO U.S.
HIGHWAY 380 IN DENTON COUNTY; AND PROVIDING AND EFFECTIVE DATE.
WHEREAS, the interstate highway system in Texas has a positive economic impact and
Interstate Highway 35 ("I-35") in particular has become one of the nation's most important
interstate routes due to international trade and commerce; and
WHEREAS, traffic volume has increased geometrically as cities along 1-35 grew and
became economic centers of national importance; and
WHEREAS, Interstate Highway 35 East ("I-35E") has been designated as an
international trade route for commerce known as the NAFTA Superhighway; and
WHEREAS, I-35 was an original Interstate Highway and approved by the Texas State
Highway Commission in 1962 that was 492 miles in length; and
WHEREAS, I-35 has been designated by the United States Congress as a National High
Priority Corridor - Corridor 23; and
WHEREAS, the segment of I-35E from Interstate Highway 635 in Dallas to U.S.
Highway 380 in Denton is approximately 28 miles in length with an average daily vehicle count
of between 175,000 and 200,000 vehicles; and
WHEREAS, the 2030 traffic projections show traffic will exceed 330,000 vehicles per
day in the most congested areas of I-35E; and
WHEREAS, the use of managed toll lanes on 1-35E has already been authorized by the
Federal Highway Administration ("FHWA") through approval of an Express Lane
Demonstration Program entered into between TxDOT and FHWA on September 30, 2009; and
WHEREAS, the current Design Schematics and Interstate Access Justification for I-35E
were approved by FHWA on October 28, 2009; and
WHEREAS, the current design plans for I-3 5E provides for the construction of four
general purpose lanes and three access road lanes in each direction, which when combined are a
total of fourteen (14) lanes, for which no toll will be assessed; and
WHEREAS, the capacity for the 1-35E general purpose lanes and access lanes will be
enhanced with the inclusion of two managed toll lanes in each direction where the managed
lanes are a critical component to obtain financing necessary to complete development of the
project; and
Exhibit 1
WHEREAS, there has been significant public involvement during the development of the
I-35E design process, including multiple public meetings and forums; and
WHEREAS, TxDOT has over the past ten years worked closely with local elected
officials, stakeholders, and communities of interest along I-35 on the planned improvements; and
WHEREAS, the total cost of the project which is divided into three segments covering 28
miles, is projected to be $4.4 billion; and
WHEREAS, Denton County has pledged its Regional Toll Revenue in the amount of
$535 million, in addition to voter approved County Road Bond funds in the amount of $55
million, to help finance the completion of the entire 1-3 5E project; and
WHEREAS, local officials understand the need for and support the inclusion of managed
lanes in the congested I-3 5E corridor; and
WHEREAS, the completion of 1-35E with the "pay as you go" appropriation method
utilizing motor fuel tax revenue could delay implementation of the project for an additional 20-
30 years; and
WHEREAS, staged construction of I-35E, utilizing innovative financing mechanisms,
including public private partnerships, remains the only viable alternative to complete the
construction of 1-35E within a time horizon of 5-7 years; and
WHEREAS, 1-3 5E public hearings are scheduled for the Fall of 2010 with environmental
clearance and the issuance of a Finding of No Significant Impact expected in the first quarter of
2011; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES:
SECTION 1. The findings set forth in the preamble of this Resolution are incorporated
by reference into the body of this Resolution as if fully set forth herein.
SECTION. 2: The City Council supports the proposed TxDOT schematic and design of
I-35E from Interstate Highway 635 to U.S. Highway 380, which incorporates managed toll lanes.
SECTION 3: The City Council supports the authorization of innovative funding
concepts, public private partnerships and other funding alternatives which can be implemented
by reauthorizing TxDOT to enter into contracts with private sector partners to complete I-35E, as
designed, in 5-7 years.
SECTION 4: The City Council joins with the other political subdivisions adjacent to and
along the I-35E corridor to request and support the statutory authority for TxDOT to enter into
public private partnerships, as previously authorized by statute, for the purpose of seeking
competitive proposals and awarding the construction of the designed improvements for I-35E.
SECTION 5. The City Council supports the expedited consideration of reauthorization
for TxDOT to enter into public private partnerships with an effective date in the first quarter of
calendar year 2011 to facilitate an early issuance of requests for proposals to accelerate the
initiation of the needed improvements for I-35E.
SECTION 6: This Resolution shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of , 2010.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
7
BY:
This page left blank intentionally .
AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010
DEPARTMENT: Finance
ACM: Jon Fortune
SUBJECT
Consider adoption of an ordinance of the City of Denton, Texas to declare the intent to reimburse
expenditures from the Unreserved Fund Balance of the Electric Fund with Certificates of
Obligation with an aggregate maximum principal amount equal to $11,752,000 to allow Denton
Municipal Electric to continue funding ongoing capital expenditures for expansion of the
distribution and transmission electric facilities. The Public Utilities Board recommends approval
(4-0).
BACKGROUND
Denton Municipal Electric is utilizing $11,752,000 in Certificates of Obligation (COs) for
ongoing capital expansion of distribution and transmission facilities. The COs will only be issued
to cover the cost of planned electric capital facilities. Initially, these funds will be provided by
the Unreserved Fund Balance of the Electric Fund and will be reimbursed with COs sold in fiscal
year 2010-11. These funds will be used for the Denton Municipal Electric capital facilities that
were approved as part of the FY 2010-11 Capital Improvement Program Budget.
PRIOR ACTIONNIEW (COUNCIL, BOARDS, COMMISIONS)
The Public Utilities Board (PUB) considered this item at the November 8, 2010 meeting and
recommended approval of this item.
RECOMMENDATION
Staff recommends Council approve the ordinance.
FISCAL INFORMATION
This ordinance will allow $11,752,000 from the Electric Fund unreserved retained earnings to be
expended and subsequently reimbursed with COs.
Respectfully submitted:
Bryan Langley
Chief Financial Officer
saleo\our documentslordinancesl101reimbursement ord-electric fund 111610.doc
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS TO DECLARE THE INTENT TO
REIMBURSE EXPENDITURES FROM THE UNRESERVED FUND BALANCE OF THE
ELECTRIC FUND WITH CERTIFICATES OF OBLIGATION WITH AN AGGREGATE
MAXIMUM PRINCIPAL AMOUNT EQUAL TO $11,752,000 TO ALLOW DENTON
MUNICIPAL ELECTRIC TO CONTINUE FUNDING ONGOING CAPITAL
EXPENDITURES FOR EXPANSION OF THE DISTRIBUTION AND TRANSMISSION
ELECTRIC FACILITIES.
WHEREAS, the City of Denton (the "Issuer") is a municipal corporation/political
subdivision of the State of Texas; and
WHEREAS, the Issuer expects to pay expenditures related to the ongoing capital
expansion of the distribution and transmission facilities of Denton Municipal Electric, which was
approved in the FY 2010-11 Capital Improvement Program Budget and are described in
Attachment "A"; and
WHEREAS, the Issuer finds, considers, and declares that the reimbursement of the Issuer
for the payment of such expenditures will be appropriate and consistent with the lawful
objectives of the Issuer and, as such, chooses to declare its intention, in accordance with the
provisions of Section 1.150-2 Treasury Regulations, to reimburse itself for such payments at
such time as it issues the obligations to finance the Projects; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The Issuer reasonably expects to incur debt, as one or more series of
obligations, with an aggregate maximum principal amount equal to $11,752,000 for the purpose
of paying the costs of the Project, as set forth in the attached Attachment "A", which is made a
part of this Ordinance for all purposes as if incorporated word for word herein.
SECTION 2. All costs to be reimbursed pursuant hereto will be for the ongoing capital
expansion of the distribution and transmission facilities of Denton Municipal Electric as
authorized by Section 271.045(a)(1) of the Texas Local Government Code. No tax-exempt
obligations will be issued by the Issuer in furtherance of this Ordinance after a date which is later
than 18 months after the later of (1) the date the expenditures are paid, or (2) the date on which
the property, with respect to which such expenditures are made, is placed in service. That all
amounts expended from the Unreserved Fund Balance of the Electric Fund for the Project set
forth in Attachment "A" to pay any costs of the Project shall be reimbursed from Certificates of
Obligation proceeds within the 2010-11 fiscal year.
SECTION 3. The foregoing notwithstanding, no tax-exempt obligation will be issued
pursuant to this Ordinance more than three years after the date any expenditure which is to be
reimbursed is paid.
salegallour documentslordinancesAfteimbursement ord-electric fund 1116 10 doc
SECTION 4. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of , 2010.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
- - - '
Page 2 of 2
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AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010 Questions concerning this
acquisition may be directed
DEPARTMENT: Materials Management to Phil Williams 349-8487
A~T
ACM: Jon Fortune
SUBJECT
Consider adoption of an ordinance accepting competitive bids and awarding a two-year contract
for the purchase of tree trimming services for Denton Municipal Electric; providing for the
expenditure of funds therefor; and providing an effective date (Bid 4401- Two Year Contract for
tree trimming services Section B awarded to the lowest responsible bidder meeting specification,
ABC Professional Tree Services, Inc., in the two-year estimated amount of $900,000).
BID INFORMATION
Section B of this bid is for tree trimming and vegetation management services for hot spot and
emergency tree trimming. A detailed description of the services to be performed is included in
the attached Public Utilities Board agenda information sheet (Exhibit 1). Section A of this bid,
which is for specific electric feeders, has been completed. Section C of this bid, which is for
non-electric projects, was awarded separately.
This bid was originally awarded by the City Manager under the DME specialized procurement
policy (Ordinance 2009-189) in an amount not to exceed $500,000 on January 11, 2010. During
the past two months, it has been determined that there is a higher demand for this service than
originally anticipated and that the estimated amount needs to be increased for Section B - the hot
spot and emergency tree trimming services. The revised estimate of $900,000 exceeds the City
Manager's authority under the Ordinance 2009-189, and approval by Council is required.
PRIOR ACTIONNIEW (COUNCIL, BOARDS, COMMISSIONS)
This bid was awarded to ABC Professional Tree Trimming Services, Inc. in an amount not to
exceed $500,000 by the City Manager. This purchase originally fell under the DME specialized
procurement policy in accordance with Ordinance 2009-189. The City Manager can approve
budgeted purchases between $250,000 and $500,000 with a recommendation for approval from
the Public Utilities Board. Approval by City Council was not required at the original estimated
total expenditure.
The Public Utilities Board approved this item at its December 14, 2009 meeting.
Agenda Information Sheet
November 16, 2010
Page 2
RECOMMENDATION
Award to ABC Professional Tree Trimming Services, Inc the two year contract in the estimated
amount of $900,000.
PRINCIPAL PLACE OF BUSINESS
ABC Professional Tree Services, Inc.
Houston, TX
ESTIMATED SCHEDULE OF PROJECT
This is a two year contract with the option to renew for additional one year periods with all terms
and conditions remaining the same. The current contract expiration date is January 11, 2012.
FISCAL INFORMATION
This service will be funded from account 600200.7899.5930.
EXHIBITS
Exhibit 1: Public Utilities Board Agenda Information Sheet without Exhibits
Exhibit 2: Bid Tabulation
Respectfully submitted:
Antonio Puente, 349-7283
Assistant Director of Finance
I-.CIS-Bid 4451
Exhibit 1
PUBLIC UTILITIES BOARD AGENDA ITEM #3
AGENDA INFORMATION SHEET
AGENDA DATE: December 14, 2009
DEPARTMENT: Electric Utility
ACM: Howard Martin, Utilities, 349-8232
SUBJECT
Consider recommending approval of bid and awarding contracts totaling approximately
$500,000 for Tree Trimming and Vegetation Management Services to ABC Tree for the
following electrical feeder projects:
Section A:
Arco 212 Feeder
Kings' Row 222 Feeder
Woodrow 211 Feeder
Pockrus Feeders
Locust 211 & 233 (Double Circuit)
Section B:
Two year contract for Hot Spot and Emergency Tree Trimming
BACKGROUND
As trees continue to grow up into the power lines or, outages and safety hazards can occur. Last
year DME selected 9 feeders to be trimmed based on 67 tree related outages from the previous
2008 fiscal year records. Those same 9 feeders had 6 tree related outages after a successful tree
trimming in 2009. In an effort to maintain system reliability and to conform to ERCOT
compliances DME has in place an extensive Vegetation Management Program that utilizes
Contracted Tree Trimming. This year's contract will be separated into two sections: Section A -
Will be 6 feeders selected as annual project's based on lump sum per feeder. Section B -Hot Spot
and Emergency trimming to be awarded as a two-year contract. Hot Spots are defined as
individual job orders during the year and customer request based on limbs or trees that are
contacting energized lines. Emergency trimming is defined as outage situations due to inclement
weather or outages caused by trees. A five year vegetation management plan is what is in place
and will help ensure system reliability and maintain vegetation growth around or near DME's
overhead power lines, within the five years it is DME's goal to have all the overhead power line
easements trimmed properly by industry standards and then we should be able to drop back to a
maintenance trim. Once we are doing maintenance trims, the cost of tree trimming should
AIS - PUB Agenda Item #3
December 14, 2009
Page 2 of 3
decrease due to the fact the easements and overhead power lines were trimmed properly in that
five year plan.
The bid stricture and benefits are:
1. Issuing a Tree Trimming Contract based on two sections:
Section A - Will be based on a lump sum bid on selected feeders. Project trimming will
help ensure that the electric lines will be trimmed properly in a timely manner that will be
cost effective.
Section B - Will be a two year contract for Hot-Spot and Emergency Trimming.
2. Supporting a five year vegetation management plan will improve system reliability.
3. Accessibility will be easier for crews to perform routine maintenance on the overhead
lines and strictures.
4. During thunderstorms, ice storms, and high winds, damage will be less likely to happen if
the vegetation around the overhead power lines is maintained to the electric industry
standard.
5. Once the 5 year vegetation management plan has been achieved it will allow Electric
Operations budget for tree trimming and vegetation management to decrease.
RECOMMENDATION
DME recommends awarding the contract as indicated above for Tree Trimming and Vegetation
Management Services with options to renew the two year contract to ABC Tree based on lowest
bid for all feeders to be trimmed.
DATE SCHEDULED FOR COUNCIL APPROVAL
This purchase falls under the DME specialized procurement policy in accordance with Ordinance
2009-189. The City Manager may approve budgeted purchases between $250,000 and $500,000
with a recommendation for approval from the PUB. Approval by the City Council is not
required.
FISCAL INFORMATION
This purchase is included in DME's approved FY09-10 Operating budget for $267,257 under the
following budget codes 600200.7899.5930
AIS - PUB Agenda Item #3
December 14, 2009
Page 3 of 3
BID INFORMATION
2010 Feeder
Trim
ABC Tree
Rios
Asplundh
Tree's Inc.
Arco 212
$
41,584.00
$
40,944.00
$
61,803.00
$ 79,157.00
Kings Row 222
$
57,950.00
$
32,755.00
$
79,581.00
$ 86,202.00
Woodrow 211
$
9,750.00
$
22,811.00
$
21,842.00
$ 25,032.00
Pockruss 213
$
55,750.00
$
36,030.00
$
114,800.00
$ 232,171.00
Locust 211 & 233
$
17,156.00
$
61,767.00
$
48,380.00
$ 44,510.00
Total
$
182,190.00
$
194,307.00
$
326,406.00
$ 467,072.00
Respectfully submitted:
Phil Williams
DME General Manager
Prepared by:
Jeff Morris
DME Operations Division Manager
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c6
ORDINANCE NO.
AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A TWO-YEAR
CONTRACT FOR THE PURCHASE OF TREE TREVE\41NG SERVICES FOR DENTON
MUNICIPAL ELECTRIC; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR;
AND PROVIDING AN EFFECTIVE DATE (BID 4401-TWO-YEAR CONTRACT FOR TREE
TRIMMING SERVICES SECTION B AWARDED TO THE LOWEST RESPONSIBLE BIDDER
MEETING SPECIFICATION, ABC PROFESSIONAL TREE SERVICES, INC. IN THE TWO-
YEAR ESTIMATED AMOUNT OF $900,000).
WHEREAS, the City has solicited, received and tabulated competitive bids for the purchase
of necessary materials, equipment, supplies or services in accordance with the procedures of State
law and City ordinances; and
WHEREAS, the City Manager or a designated employee has reviewed and recommended that
the herein described bids are the lowest responsible bids for the materials, equipment, supplies or
services as shown in the "Bid Proposals" submitted; and
WHEREAS, the City Council has provided in the City Budget for the appropriation of funds
to be used for the purchase of the materials, equipment, supplies or services approved and accepted
herein; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The numbered items in the following numbered bids for materials, equipment,
supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent,
are hereby accepted and approved as being the lowest responsible bids for such items:
BID ITEM
NUMBER NO VENDOR AMOUNT
4401 Part B, Items 2-16 ABC Professional Tree Services, Inc. Exhibit A
SECTION 2. By the acceptance and approval of the above numbered items of the submitted
bids, the City accepts the offer of the persons submitting the bids for such items and agrees to pur-
chase the materials, equipment, supplies or services in accordance with the terms, specifications,
standards, quantities and for the specified sums contained in the Bid Invitations, Bid Proposals, and
related documents.
SECTION 3. Should the City and the winning bidder(s) wish to enter into a formal written
agreement as a result of the acceptance, approval, and awarding of the bids, the City Manager or his
designated representative is hereby authorized to execute a written contract in accordance with the
terms, conditions, specifications, standards, quantities and specified sums contained in the Bid
Proposal and related documents and to extend that contract as determined to be advantageous to the
City of Denton.
SECTION 4. By the acceptance and approval of the above enumerated bids, the City Council
hereby authorizes the expenditure of funds in the amount and in accordance with the approved bids.
SECTION 5. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of 12010.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
4-ORD-Bid 4401
Exhibit A
BID # 4401
DATE: November 17, 2009
Two Year Contract for Tree Trimming Services
ITEM DESCRIPTION
Principle Place of Business:
VENDOR
ABC Professional Tree Svc.
Houston, Tx
PART B - TWO-YEAR CONTRACT PRICING AS NEEDED FOR EMERGENCY ELECTRIC
DISTRIBUTION LINE CLEARANCE:
ITEM
DESCRIPTION
EMERGENCY AND ADDITIONAL LINE CLEARING WORK AS NEEDED - AERIAL LIFT CREWS:
2
HOURLY LABOR FOR AERIAL LIFT CREWS - 55' MINIMUM WORKING HEIGHT
Total of one (1) crew (capable of back lot wvork) with three (3) persons: one working Foreman with a
CDL, one qualified line clearance tree trimmer with CDL and one trimmer trainee or ground man.
a
Standard Time (8 hours notice) 1 crew/hour
585.00
b
Emergency Time (less than 8 hours notice) 1 crew/hour
5116.00
3
SUPPORT CREWS: TRIM AND BRUSH PICK-UP Total of one (1) crew (trim and brush pick up),
two (2) persons (one working foreman with CDL and one ground man)
a
Regular Time 1 crew/hour
$63.50
b
Overtime 1 crew/hour
$83.50
ITEM
DESCRIPTION
EMERGENCY OR ADDITIONAL HOT SPOT LINE CLEARING WORK AS NEEDED -
INDIVIDUAL LABOR & EQUIPMENT RATES:
4
SupeiA-isor Tree Trimming
a
Hourly Rate
539.50
b
Overtime Rate
558.45
5
Foreman Tree Trimmer (Climbing)
a
Hourly Rate
$24.50
b
Overtime Rate
536.26
Exhibit A
BID # 4401
DATE: November 17, 2009
Two Year Contract for Tree Trimming Services
ITEM DESCRIPTION
Principle Place of Business:
VENDOR
ABC Professional Tree Svc.
Houston, Tx
6
Line Clearance Tree Trimmer (Climbing)
a
Hourly Rate
$22.00
b
Overtime Rate
53256
7
Line Clearance Trainee or Ground Man/Flagman
a
Hourly Rate
$19.00
b
Overtime Rate
$28.12
8
Equipment Operator (tractor)
a
Hourly Rate
$24.00
b
Overtime Rate
53550
q
Aerial Lift with dump bed and disc or drum chipper 75-ft. minimum working height and associated
equipment
a
Hourly Rate
$27.00
b
Overtime Rate
527.00
10
Chip truck, 10 cu. yd. covered dump bode with disc chipper and associated equipment
a
Hourly Rate
$16.00
b
Overtime Rate
516.00
11
Tractor, WD with bush-hog and associated equipment
a
Hourly Rate
$37.00
b
Overtime Rate
$37.00
12
Chipper only (Disc or drum chipper only)
a
Hourly Rate
$6.00
b
Overtime Rate
$6.00
Exhibit A
BID # 4401
DATE: November 17, 2009
Two Year Contract for Tree Trimming Services
ITEM DESCRIPTION
Principle Place of Business:
VENDOR
ABC Professional Tree Svc.
Houston, Tx
ITEM
TREE DIAMETER- REMOVAL RATE
TREE REMOVAL - To be utilized at the sole discretion of DME to have contract crews while working on the
associated circuit remove entire trees as identified by DME.
13
3" - 6" Dbh
$25.00
14
6" - 12" Dbh
$45.00
15
12" - 18" Dbh
$125.00
16
18"+ Dbh
$350.00
Vendor complies with new ANSI standards as described on page 36
YES NO
Yes
Number of crews available to the City at one time
As Needed
Response time after notification by the City
24 Hours
*In case of calculation error, crew hourly rate shall prevail.
This page left blank intentionally .
AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010 Questions concerning this
acquisition may be directed
DEPARTMENT: Materials Management to John Cabrales, Jr. 349-8509.
ACM: Jon Fortune
SUBJECT
Consider adoption of an ordinance of the City of Denton, Texas authorizing the City Manager to
execute two Professional Service Agreements to assist the City of Denton in advancing its State
Legislative Program, assist Council and staff in addressing proposed legislation, and make the
City aware of any legislative or administrative initiatives believed to be detrimental to the
interests of the City; authorizing the expenditure of funds therefor; and providing an effective
date (RFP 4576-Legislative Consulting Services awarded to Focused Advocacy, LLC in an
amount not to exceed $132,500 and Solutions for Local Control, LLC in an amount not to exceed
$45,000 for a total award not to exceed $177,500 annually.
BID/RFSP INFORMATION
As we prepare for the 82nd Texas Legislature, staff has been evaluating options for engaging
legislative consulting services. The trend of the Texas Legislature has been that each new session
brings an increased number of city-related bills filed, with the majority proposing impediments
to the ability of cities to govern from a local perspective. For the last several sessions, legislative
leaders have continued to file and support bills that would lower or broaden the current cap on
annual increases in property tax appraisals, impose a local revenue cap, enact costly unfunded
mandates, or erode municipal authority to conduct local affairs. As Denton continues to grow,
our legislative exposure continues to increase with potentially greater negative impacts to our
budget; and more importantly, on our ability to deliver services in the best interest of our
citizens.
A perfect storm is brewing for the 82nd Texas Legislature with a state financial crisis of $10-$25
billion shortfall; redistricting of House, Senate and Congressional districts; and the sunset review
of 28 state agencies, several of which have regulatory authority over our municipal functions.
One of the biggest concerns for cities is that the legislature will pass unfunded mandates to local
governments as they look for ways to move legislation without having a negative financial
impact to the state. A good example of the negative impact of unfunded mandates is the
approximate $252,000 in lost annual drainage fee revenue that the City is unable to collect from
state agencies and public universities due to a legislative exemption. Another concern is that the
legislature will look for additional ways to turn cities into collection agents for the state.
Municipal courts in Texas are a good example because over the years the legislature has added
fees to speeding tickets, such that today the first $82 collected must be submitted to the state to
fund various state programs and the state general fund.
In addition, redistricting will play a prominent role, and will be the focus of a power struggle,
which will probably distract the membership and cause considerable political posturing. We will
Agenda Information Sheet
November 16, 2010
Page 2
have to guard against cities becoming collateral damage, through the passage of any bad public
policy bill resulting from political deal-making.
Staff feels that now, more than ever, it is important to utilize legislative consultants as part of our
legislative strategy. Given the history of bad policy bills that our consultants have helped us
defeat, we feel that the benefits of having legislative consultants outweigh the costs. The City of
Denton began using legislative consultants to assist with general government issues during the
80th Regular Session of the Texas Legislature (2007). Prior to that, only Denton Municipal
Electric (DME) had used a legislative consultant to assist them with utility issues. Staff felt that
the volume of bills being filed, approximately 6,374 in 2007, and the number of city-related bills
that could have an impact on Denton, approximately 1,200 in 2007, were becoming difficult for
staff to manage alone. Staff also felt that the benefit of having a consultant to assist the City in
minimizing its legislative exposure was greater than the cost.
Denton has been actively involved with the Texas Municipal League's (TML) Big City Lobby
group since 2003. This group brings together representatives from TML and major Texas cities
to work together on legislative strategy, and coordinate support of beneficial legislation and
opposition of detrimental legislation to cities. However, due to unique characteristics of each
city, Denton sometimes found itself without allies on proposed legislation, such as on the college
textbook sales tax exemption bills.
For the 81st Regular Session of the Texas Legislature (2009), legislators filed 7,609 bills, and
approximately 1,700 were city-related. The City's legislative consultant contracts for this session
totaled $199,500 for: Solutions for Local Control, LLC; HillCo Partners; and Herrera & Boyle,
PLLC (DME's legislative consultant). With the exception of Solutions for Local Control, LLC,
the legislative consultant contracts expired in 2009. The biggest victory of the legislative session
for Denton and other Texas cities was the defeat of hundreds of bad policy bills that would have
lowered or broadened the current cap on annual increases in property tax appraisals, imposed a
revenue cap on local governments, enacted costly unfunded mandates, or eroded municipal
authority to conduct local affairs.
It is difficult to place a dollar amount to the cost avoidance for the defeat of bad policy bills
during the 81st Session, but the amount can easily run into several million dollars. With the
assistance of our consultants, we were successful in opposing sales tax holidays for textbooks
bills that could have cost approximately $1,620,000 in annual sales tax revenue loss for the City.
We were also successful in opposing bills that could have had a negative cost impact to our
organization including: mandated mailed boiled water notices, broadening sales tax and ad
valorem tax exemptions, solar mandates, cap and trade programs for carbon dioxide, and impact
and water meter fee exemptions for independent school districts. The passage of any one of these
Agenda Information Sheet
November 16, 2010
Page 3
bad policy bills could have easily cost more than the total cost of our legislative consultant
contracts.
During the 81st Texas Legislature Interim Session, numerous "interim charges," were given to
the legislature by the Speaker of the House and the Lt. Governor to study and report back to the
House and Senate members. Typically, these studies identify possible legislative actions relating
to such topics and often result in the filing of bills in the next regular legislative session. Several
of these interim charges could have had an impact on the City of Denton. There were also several
issues that were being considered that could have had negative impacts to Denton Municipal
Electric (DME) and its rate payers.
As a result, staff determined that it is essential that the City and DME have some legislative
consulting assistance to address these issues and hopefully minimize or eliminate any negative
impacts prior to the start of the 82nd Legislative Session. In April 2010, staff entered into a six-
month contract with Focused Advocacy, LLC for legislative services for general government
issues and DME electric issues. The contract cost was $52,500, in addition to a not-to-exceed
$2,000 for reimbursable expenses. The cost of the contract was split between the General Fund
and the Electric Fund. The City also maintained its contract with Solutions for Local Control, for
specific work being performed on appraisal and revenue cap issues, sales tax issues, and
Community Housing Development Organization issues. Both of these contracts expired at the
end of September 2010.
For the reasons stated above, a Request for Proposals for Legislative Consulting Services (R-FP 4
4576) was sent out to several qualified individuals and firms in September 2010. The RFP was
structured so that a proposal could be submitted to provide legislative services for only general
government issues, legislative services for only DME electric issue, or legislative services for
both general government and DME issues. Seven proposals were submitted. Two submitted
services for only general government issues, one submitted for only DME issues, and the
remainder submitted proposals for representation of both general government and DME issues.
Representatives from the City Manager's Office and DME reviewed and evaluated the proposals,
based on the criteria listed below.
The criteria for the evaluation of proposals for legislative consulting services for general
government issues were based on the following:
1. Demonstrates a specialty or expertise in certain areas that is best suited to represent the
City's legislative needs.
FACTOR: 40%
2. Demonstrates a successful experience as a legislative consultant for municipalities or
other organizations of a similar size, or with similar needs as the City.
FACTOR: 20%
Agenda Information Sheet
November 16, 2010
Page 4
3. Demonstrates a long and proven track record protecting and advocating for North
Texas transportation issues, especially those similar to the City of Denton's position.
FACTOR: 20%
4. Demonstrates a proven legislative consulting experience with an established
professional reputation as being a very effective advocate of successful legislation.
FACTOR: 10%
5. Cost of services.
FACTOR: 10%
The criteria for the evaluation of proposals for legislative consulting services for DME issues
were based on the following:
1. Demonstrates a specialty or expertise in certain areas that is best suited to represent
DME's legislative needs.
FACTOR: 40%
2. Demonstrates a competent knowledge of municipal electric utility operation, state
electric generation and distribution systems, and electric regulatory environment and
current major issues.
FACTOR: 15%
3. Demonstrates a long and proven track record protecting and advocating for electric
utility issues, especially those similar to DME's position.
FACTOR: 25%
4. Demonstrates a proven legislative consulting experience with an established
professional reputation as being a very effective advocate of successful legislation.
FACTOR: 10%
5. Cost of services.
FACTOR: 10%
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
Two informal reports, 410-012 dated March 19, 2010 and 410-025 dated April 2, 2010, were
provided.
At the November 2, 2010 City Council Work Session, staff were directed to proceed with
drafting the contracts for approval by Council on November 16, 2010.
RECOMMENDATION
No single proposal met all the general government legislative needs, however, Focused
Advocacy, LLC, did receive the highest evaluation rating. Their proposed cost to provide
legislative services for only general government was $82,200 annually, plus an annual not to
Agenda Information Sheet
November 16, 2010
Page 5
exceed $3,500 for reimbursable expenses. Focused Advocacy, LLC, also received the highest
evaluation rating from DME. Their proposed cost to provide legislative services for only DME
was $94,200 annually, plus an annual not-to-exceed $3,500 for reimbursable expenses.
However, Focused Advocacy, LLC did offer a price break if they were selected to provide
legislative services for both general government and DME. That proposed cost is $129,000
annually, plus an annual not-to-exceed $3,500 for reimbursable expenses. There is a potential
savings of $47,400 annually to the City if they are selected to provide legislative services to both
general government and DME. This reduction in cost was given with the knowledge that the City
may engage the services of another legislative consultant on certain critical legislative issues.
The proposal that received the next highest ranking for general government legislative needs was
Solutions for Local Control, LLC. This is former State Representative Fred Hill's firm. Mr. Hill
served ten terms in the Texas House of Representatives, and Chaired the Committees on Urban
Affairs and on Local Ways and Means. He also served on the Transportation Committee for
sixteen years and on the Legislative Budget Board for three terms. He led a coalition in
opposition to the appraisal cap and revenue cap legislation in the 2003, 2005, and 2007 sessions.
He was named legislator of the year by the Texas Municipal League, the Council of Urban
Counties and the Texas Association of Counties several times, and is one of only three legislators
ever named to the Texas Municipal League Hall of Fame. His knowledge of key finance issues
of interest to the City, and his relationship with current members of the legislature, make him an
invaluable consultant. The Solutions for Local Control, LLC proposal for legislative services for
general government only was $42,000 annually, plus an annual not-to-exceed $3,000 for
reimbursable expenses.
Due to the critical issues being faced by the City and DME this next session, legislative
consulting services are going to be critical to protect us from bad public policy legislation.
Focused Advocacy, LLC and Solutions for Local Control, LLC have proven track records with
the City and DME. For these reasons, staff recommends approval of a contract with each of
these firms. Staff also recommends that both contracts have a term of two (2) years commencing
on October 1, 2010, that may be extended for not more than one (1) additional two (2) year term
upon the prior written agreement of the parties.
PRINCIPAL PLACE OF BUSINESS
Focused Advocacy, LLC
Austin, TX
Solutions for Local Control, LLC
Richardson, TX
Agenda Information Sheet
November 16, 2010
Page 6
FISCAL INFORMATION
The Focused Advocacy, LLC contract will be funded from account 600001.7854.9210A in the
amount of $53,000 and account 160099.7850 in the amount of $79,500. Requisition 101039 in
the amount of $132,500 has been entered in the Purchasing software system for the hardware.
The Solutions for Local Control, LLC contract will be funded from account 160099.7850 in the
amount of $45,000. Requisition 101042 has been entered in the Purchasing software system.
EXHIBITS
RFP Tabulation
Ordinance
Respectfully submitted:
Antonio Puente, Jr., 349-7283
Assistant Director of Finance
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.
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY
MANAGER TO EXECUTE TWO PROFESSIONAL SERVICE AGREEMENTS TO ASSIST THE
CITY OF DENTON IN ADVANCING ITS STATE LEGISLATIVE PROGRAM, ASSIST
COUNCIL AND STAFF IN ADDRESSING PROPOSED LEGISLATION, AND MAKE THE
CITY AWARE OF ANY LEGISLATIVE OR ADMINISTRATIVE INITIATIVES BELIEVED TO
BE DETRIMENTAL TO THE INTERESTS OF THE CITY; AUTHORIZING THE
EXPENDITURE OF FUNDS THERFOR; AND PROVIDING AN EFFECTIVE DATE (RFP 4576--
LEGISLATIVE CONSULTING SERVICES AWARDED TO FOCUSED ADVOCACY, LLC IN
AN AMOUNT NOT TO EXCEED $132,500 AND SOLUTIONS FOR LOCAL CONTROL, LLC
IN AN AMOUNT NOT TO EXCEED $45,000 FOR A TOTAL AWARD NOT TO EXCEED
$177,500 ANNUALLY).
WHEREAS, The professional services provider (the "Provider) mentioned in this ordinance
is being selected as the most highly qualified on the basis of its demonstrated competence and
qualifications to perform the proposed professional services; and
WHEREAS, The fees under the proposed contract are fair and reasonable and are consistent
with and not higher than the recommended practices and fees published by the professional
associations applicable to the Provider's profession and such fees do not exceed the maximum
provided by law; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. The City Manager is hereby authorized to enter into two professional service
agreements with Focused Advocacy, LLC and Solutions for Local Control, LLC, to provide
legislative consulting services to the City of Denton, a copy of which is attached hereto and
incorporated by reference herein.
SECTION II. The City Manager is authorized to expend funds as required by the attached
contract.
SECTION III. The findings in the preamble of this ordinance are incorporated herein by
reference.
SECTION IV. This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of 2010.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
r
BY:
4-0 e 4576
e, • S
Agreement for Legislative Representation
This Agreement, made this day of , 2010, by and between the City of
Denton, a municipal corporation, hereinafter referred to as the "City," its electric utility, Denton
Municipal Electric (DME), hereinafter referred. to as "DME," and Focused Advocacy, 832
Congress, Ste. 200, Austin, Texas, hereinafter referred to as "Consultant".
WiTNESSETH
WHEREAS, The City of Denton (City), and its electric utility, Denton Municipal Electric
(DME), wish to enter into an agreement with Focused Advocacy (Consultant) for legislative
representation at the Texas State Government level to assist the City in advancing its State
Legislative Program, assist council and staff in addressing proposed legislation, make the City
aware of any legislative or administrative initiatives believed to be detrimental to the interests of
the City, augment the City's existing relationship with key legislators and policy administrators,
and maintain a high level of effective advocacy with the legislative and executive branches of the
state government.; and
WHEREAS, Consultant has professional staff experienced and qualified to provide and
perform the services desired by City as set forth hereinabove;
NOW, THEREFORE, and in consideration of the terms, covenants and conditions herein
contained, the parties hereto do mutually agree as follows.
ARTICLE 1
The City will contract with the Consultant for the service specified herein for the period
commencing October 1, 2010 and ending September 30, 2012. This contract shall have a term of
two (2) years commencing on October 1, 2010, and may be extended for not more than one (1)
additional two (2) year term upon the prior written agreement of the parties.
The City will not be responsible for any additional expenses incurred by the Consultant, with the
exception of travel costs requested and authorized by the City. These reimbursable costs are not
to exceed three thousand five hundred dollars ($3,500) annually, for a contract total of seven
thousand dollars ($7,000). Reimbursable costs include the following.
Costs incident to travel outside Austin shall be reimbursed to the Consultant upon
submission of its invoice to the City. It is understood that travel is to be pre-
authorized by the City.
2. Costs for the following items which exceed the allocation for such items in the
Agreement cost shall, when authorized by the. City, be reimbursed to the
Consultant upon presentation of an invoice:
a) Printing and graphics.
&\Legallour Documents\ContractsUOTocused Advocacy Agreement (Nov 2010).doc
b) Supplies.
c) Rental of meeting facilities, catered meals and other meeting
expenses.
ARTICLE 2
The City and the Consultant shall have the right to terminate this Agreement upon 30 days'
written notice.
ARTICLE 3
The City will pay the Consultant ten thousand seven hundred and fifty dollars ($10,750) per
month, for a total of one hundred and twenty-nine thousand dollars ($129,000) annually, for a
contract total of two hundred and fifty eight thousand dollars ($25$,000), .for the specified
services. Payments will be sent monthly.
ARTICLE 4
1) The Consultant will operate a unit to act as an Austin Office for the City and furnish requisite
staff, office space, utilities, furnishings, equipment, secretarial services, common use office
supplies and services, and general administrative support.
2) The Consultant will provide advice, counsel, and intervention to the City with regards to the
City's relationship and interaction with the Texas State Legislature, including key Legislative
committees, the Governor's Office, and the key state administrative agencies, which the City
interface with.
3) The Consultant will track, monitor, and report on every individual bill that impacts the City,
either directly or indirectly. The consultant will employ a variety of techniques to monitor
and track bills, including sophisticated computer software, electronic notification systems
and visits with legislators and their staff. The Consultant will make the City ware of every
piece of legislation, every amendment and every proposal that affects the City.
4) The Consultant will provide advance notice to the City of every public hearing related to any
bill that impacts the City.
5) The Consultant will analyze and summarize any legislation that affects the City, including,
but not limited to, any revenue impacting legislation, water legislation, land use legislation,
or transportation legislation that affects municipal entities; and will produce written
memoranda and reports for the City, as appropriate.
6) The Consultant will assist the City in supporting the authorization of innovative funding
concepts, Public-Private Partnerships and other funding alternatives which can be
implemented by reauthorizing TxDOT to execute Public-Private Partnership agreements with
a private sector contractor to complete 1-3 5E, as designed, in 5-7 years.
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7) The Consultant will provide legislative analysis on a weekly basis in the format choice of the
City: written reports, conference calls with City staff, in private meetings or any other
method that is agreeable to the City and Consultant.
8) The Consultant will directly intervene in the legislative and regulatory process on matters
that affect the City. Activities may involve communicating with members of the Legislature
and their staffs, conducting complex negotiations, identifying opportunities for the City to
testify on important matters, and develop collateral materials to support the City's positions.
9) The Consultant will also do the following as needed: draft legislation and amendments;
identify and secure the most effective House and Senate bill sponsors; identify funding
opportunities; represent the City during planning and negotiating sessions; prepare testimony
for City representatives to deliver before legislative committees; arrange meeting between
City representatives and selected legislators, and prepare briefings for these meetings;
research relevant state laws and administrative rules; advocate before the Governor,
Lieutenant Governor and Speaker of the House; advocate before relevant committee chairs in
both the Senate and the House; maintain relationships with key staff in both chambers; and
maintain strong relationships with key state regulatory agencies.
10) The Consultant will prepare back-up strategies and alternative legislative vehicles as needed
to accomplish the City's legislative goals.
11) The Consultant will immediately notify the City in writing when a conflict of interest occurs
between one of the Consultants other clients and the legislative goals and interests of the
city.
12) No Conflicts of Interest Assurance: In order to ensure the ability to fully represent the City's
interests, the Consultant will resolve any conflict of interest, with a private sector entity or
client, in favor of the City.
13) During the interim period when the Texas Legislature is not in session, the Consultant will
monitor interim committee studies, attend appropriate committee hearings and communicate
regularly with key legislators and staff on issues of interest to the City.
14) During the interim period when the Texas Legislature is not in session, the Consultant will
monitor interim activities closely, report back to the City and assist as needed to preempt the
development of ideas that are detrimental to the City's legislative goals.
15) During the interim period when the Texas Legislature is not in session, the Consultant will
monitor all major state administrative and regulatory agencies and advise the City of any
proposed administrative rules that may affect the City or its legislative goals.
16) During the interim period when the Texas Legislature is not in session, the Consultant will
assist the City in developing its State Legislative Program prior to the start of the next regular
session of the Texas Legislature.
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17) The Consultant shall work under the policy direction of the Denton City Council, and be
administratively responsive to the City Manager, City Attorney and staff coordinating
legislative/intergovernmental relations. The Public Information/Intergovernmental Relations
Officer shall be the designated administrator of this Agreement. Curtis Seidlits, Snapper Carr
and Brandon Aghamalian are deemed essential personnel for the Consultant as part of this
contract. If one or all of these individuals are no longer able to service this contract, the City,
at its discretion, may immediately terminate the remaining term of the contract by providing
written notice as set forth in Article 2 herein.
ARTICLE 5
In addition to the services provided to the City, the Consultant will also provide the same scope
of services outlined in Article 4 of this agreement for DME. It is understood and agreed that
DME requires an additional level of services and constitutes an expanded scope of services
beyond the representation of the City of Denton's regular legislative representation. As part of
the Consultant's representation of DME, the Consultant agrees to provide, but not limited to, the
following specific services:
1) Any legislation related to implementation of a new wholesale market design based on
locational marginal pricing theory (often referred to as LMP or a "nodal" design), which
could significantly increase the price to consumers of electricity in the DFW area over those
same costs.in other areas of the state.
2) Any legislation related to efforts to extend, re-enact, or otherwise impose any university
discount, or to expand its applicability to other entities.
3) Any legislation related to providing any mandatory discount to any electric ratepayer or class
of ratepayers.
4) Any legislation that imposes limits on a municipal electric utility's ability to utilize its
facilities to support new technologies, such as delivery of broadband services over electric
distribution lines, etc.
5) Any legislation related to imposition of limits on a municipal utility's ability to charge for
such things as attachments to its poles by other utilities.
6) Any legislation to weaken the ability of municipal utilities to maintain the confidentiality of
issues; such as the terms of individual wholesale power purchase contracts.
7) Any legislation that imposes further deregulation of municipal electric utilities or any
legislation that requires that Municipally Owned Utilities (MOU) to opt-in to deregulation.
8) Any exemptions relating to sales tax from any energy device.
9) Any legislative relating to the regulation and governing bodies of independent organizations
that govern power regions.
10) Any legislation affecting Electric Reliability Council of Texas (ERCOT) representation.
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11) Any legislation that require retail water and/or utility services to adopt an emergency
preparedness plan for use during a local power outage.
12) Any legislation relating to establishing a carbon dioxide "cap and trade" program vis.-a-vis
the Regional Greenhouse Gas Initiative.
13) Any legislation regarding low interest energy efficiency improvement loans.
14) Any legislation relating to the goal of installing additional capacity for generating renewable
energy.
15) Any legislation relating to the use of advanced metering technology.
16) Any legislation relating to air quality, including the capture and storage of carbon dioxide.
17) Any legislation relating to immunity of the state and state agencies and employees of the
state and state agencies from suit by certain public entities.
18) Full representation of DME's interests during the Sunset Commission Reviews of the Texas
Public Utility Commission (PUC) and Electric Reliability Council of Texas (ERCOT).
19) Full representation of DME's interests during all legislative hearings and meetings, including
but not limited to, the Senate Business and Commerce, and State Affairs Committee study
charges related to municipally owned utilities.
20) Assist in educating all legislative, regulatory and policy leaders on electric utility issues of
importance to DME.
21) Work with all stakeholder groups and interests on electric utility matters to ensure that
DME's interests and positions are advanced.
22) Preparation of issue papers and reports for legislators and staff
23) Communicating with the General Manager of DME, or the Executive Manager of DME
regarding strategy and issues.
24) Meeting with the Denton City Council and/or the Denton Public Utilities Board in Denton,
Texas, as requested, to provide advice, recommendations, and guidance regarding DME's
legislative plans, strategies, and other related issues.
ARTICLE 6
1) The Consultant shall perform all services as an independent contractor not under the direct
supervision and control of the City. Nothing herein shall be construed as creating a
relationship of employer and employee or joint venture between the parties.
2) The City and Consultant agree to cooperate in the defense claims, actions, suits, or
proceedings of any kind brought by a third party which may result from or directly or
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I ° - , S:1LegalkOur DocumentslContracts1I01Focused Advocacy Agreement (Nov 2010).doe
indirectly arise from any breach of the Consultant's obligations under this agreement. In the
event of any litigation or claim under this Agreement in which the City is joined as a party,
Consultants shall provide competent legal counsel to defend City and Consultant against such
claim, provided that Consultant shall have the right to proceed with the competent legal
counsel of its own choosing.
The Consultant agrees to defend, indemnify, and hold harmless the City and all of its
officers, agents, servants, and employees against any all such claims. to the extent of coverage
by Consultant's commercial liability policy. The Consultant agrees to pay all expenses,
including, but not limited to attorney's fees, costs of court; reasonable expenses, and satisfy
all judgments, which may be incurred or rendered against the Consultant's commercial
liability insurance policy. Nothing herein constitutes a waiver of any rights or remedies the
City may have to pursue under either law or equity, including, without limitations, a cause of
action for specific performance or for damages, a loss to the City resulting from Consultant's
negligent errors or omissions, or breach of contract, and all such rights and remedies. are
expressly reserved.
3) The Consultant shall maintain and shall be caused to be in force at all times during the terms
of this Agreement, a legally binding policy of commercialliability insurance, with a rating of
at least A- with Best Rated Carriers. Such coverage shall cover any claim hereunder
occasioned by the Consultant's negligent professional act and/or error or omission, in an
amount not less than $500,000 combined single limit coverage occurrence. In the event of
change or cancellation of the policy by the insurer, the Consultant herby covenants to
forthwith advise the City thereof, and in such event, the Consultant shall, prior to the
effective date of change or cancellation, serve substitute policies furnishing the same
coverage. The Consultant shall provide a copy of such policy or the declarations page of the
policy or a certificate of insurance, whichever is reasonably satisfactory, to the City through
its City Manager simultaneously with the execution of this Agreement. Consultant's
insurance policies, through policy endorsement, shall include wording which states that the
policy shall be primary and non-contributory with respect to any insurance carried by the
City. The certificate of insurance must reflect that the above wording is included in
evidenced policies.
ARTICLE 7
f
This Agreement constitutes the complete and final expression of the agreement of the parties.
No oral statement of any person shall modify or otherwise change or affect the terms, conditions
or specifications stated in this agreement. All change orders to the Agreement will be made in
writing by the City and approved by the City Council.
ARTICLE 8
The Consultant covenants and agrees that its officers, employees, and agents will have no
interest, including personal financial interest, and will acquire no interest, either directly or
indirectly, which will conflict in any manner with the performance of the services called for
under this agreement. No officer or employee of the City shall have a financial interest, direct or
indirect, in any contract with the City, or be financially interested, directly or indirectly, in the
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sale to the City of any land, materials, supplies or services, except on behalf of the City or in
compliance with the provisions of the City of Denton's Personnel Policies and Procedures
Manual. Any violation of this provision shall render this Agreement voidable at the discretion of
the City.
ARTICLE 9
The Consultant shall comply with all applicable local, state and federal laws, rules and
regulations.
ARTICLE 10
All notices, communications and reports required or permitted under this Agreement shall be
personally delivered or mailed to the respective parties by depositing same in the United States
mail to the address shown below, certified mail, return receipt requested, unless otherwise
specified herein. Mailed notices shall be deemed communicated as of three (3) days' mailing
To City:
John Cabrales
Public Information Officer
215 E. McKinney
Denton, TX 76201
To Consultant:
Snapper Carr
Focused Advocacy
823 Congress, Ste 1200
Austin, TX 78701
To DME:
Mike Grim
Executive Manager
Denton Municipal Electric
1659 Spencer Road
Denton, TX 76205
ARTICLE 11
This Agreement shall be governed by the laws of the State of Texas, venue and jurisdiction of
any suit or cause of action arising under this agreement shall lie exclusively in a court of
competent jurisdiction sitting in Denton County, Texas.
ARTICLE 12
Consultant shall not assign or transfer any interest in this Agreement (whether by assignment,
transfer, novation or otherwise) without the prior written consent of the City.
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IN WITNESS HEREOF, the City of Denton, Texas, has caused this Agreement to be
executed by its duly .authorized City Manager and Consultant has executed this Agreement
through its duly authorized President, dated this day of , 2010.
CITY OF DENTON, TEXAS
GEORGE C. CAMPBELL, CITY MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY: L
FOCUSED ADVOCACY, LLC
SNAPPER CARR, FOCUSED ADVOCACY
823 CONGRESS, STE 1200
AUSTIN, TX 78701
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Amement for Legislative Representation
This Agreement, made this day of , 2010, by and between the City of
Denton, hereinafter referred to as the "City," and Solutions for Local Control, LLC, hereinafter
referred to as "Consultant".
WITNESSETH
WHEREAS, The City of Denton (City), wishes to enter into an agreement with Solutions
for Local Control, LLC (Consultant) for legislative representation at the Texas State Government
level to assist the City in advancing its State Legislative Program, assist council and staff in
addressing proposed legislation, make the City aware of any legislative or administrative
initiatives believed to be detrimental to the interests of the City, augment the City's existing
relationship with key legislators and policy administrators, and maintain a high level of effective
advocacy with the legislative and executive branches of the state government.; and
WHEREAS, Consultant has professional experience and is qualified to provide and
perform the services desired by City as set forth hereinabove;
NOW, THEREFORE, and in consideration of the terms, covenants and conditions herein
contained, the parties hereto do mutually agree as follows.
ARTICLE 1
The City will contract with the Consultant for the service specified herein for the period
commencing October 1, 2010 and ending September 30, 2012. This contract shall have a term of
two (2) years commencing on October 1, 2010, and may be extended for not more than one (1)
additional two (2) year term upon the prior written agreement of the parties.
The City will not be responsible for any additional expenses incurred by the Consultant, with the
exception of travel costs requested and authorized by the City. These reimbursable costs are not
to exceed three thousand dollars ($3,000) annually, for a contract total of six thousand dollars
($6,000). Reimbursable costs include the following.
I . Costs incident to travel shall be reimbursed to the Consultant upon submission of
its invoice to the City. It is understood that travel is to be pre-authorized by the
city.
2. Costs for the following items which exceed the allocation for such items in the
Agreement cost shall, when authorized by the City, be reimbursed to the
Consultant upon presentation of an invoice:
a) Printing and graphics.
b) Supplies.
c) Rental of meeting facilities, catered meals and other meeting
expenses.
salcgallour docurneniskontracts1101fred hill contract 2010-12 (nov 2010).doc
ARTICLE 2
The City and the Consultant shall have the right to terminate this Agreement upon 30 days'
written notice.
ARTICLE 3
The City will pay the Consultant three thousand five hundred ($3,500) per month, for a total of
forty-two thousand dollars ($42,000) annually, for a contract total of eighty-four thousand dollars
($84,000), for the specified services. Payments will be sent monthly.
ARTICLE 4
The parties agree that the Consultant shall perform the following services:
The Consultant will assist the City in developing political and legislative strategies to
achieve its goals.
2. The Consultant will analyze and summarize any legislation that affects the City,
including, but not limited to, any revenue impacting legislation, water legislation,
land use legislation, or transportation legislation that affects municipal entities; and
will produce written memoranda and reports for the City, as appropriate.
3. The Consultant will assist the City in supporting the authorization of innovative
fixnding concepts, Public-Private Partnerships and other funding alternatives which
can be implemented by reauthorizing TxDOT to execute Public-Private Partnership
agreements with a private sector contractor to complete I-35E, as designed, in 5-7
years.
5. 4. The Consultant will assist in communicating the position of the City to the
legislative and executive branches of Texas government, interested parties and the
public. The Consultant will represent the City during meetings, hearings and
negotiating sessions involving the executive or legislative branches of Texas
government regarding issues of importance to the City.
6. The Consultant will assist the City in working with elected officials and members
and staff persons of the Texas House of Representatives and Texas Senate in
passing or amending legislation favorable to the City or in defeating legislation
deemed harmful to the goals of the City.
7. The Consultant will monitor and represent the City during interim legislative
studies or interim committee meetings.
8. The Consultant will provide routine status reports to the City regarding the items
outlined above.
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salegallour documentskontracts1101fred hill contract 2010-12 (nov 2010).doc
ARTICLE 5
The Consultant shall perform all services as an independent contractor not under the direct
supervision and control of the City. Nothing herein shall be construed as creating a relationship
of employer and employee or joint venture between the parties.
The City and Consultant agree to cooperate in the defense claims, actions, suits, or proceedings
of any kind brought by a third party which may result from or directly or indirectly arise from
any breach of the Consultant's obligations under this agreement. In the event of any litigation or.
claim under this Agreement in which the City is joined as a party, Consultants shall provide
competent legal counsel to defend City and Consultant against such claim, provided that
Consultant shall have the right to proceed with the competent legal counsel of its own choosing.
The Consultant agrees to defend, indemnify, and hold harmless the City and all of its officers,
agents, servants, and employees against any all such claims to the extent of coverage by
Consultant's commercial liability policy. The Consultant agrees to pay all expenses, including,
but not limited to attorney's fees, costs of court, reasonable expenses, and satisfy all judgments,
which may be incurred or rendered against the Consultant's commercial liability insurance
policy. Nothing herein constitutes a waiver of any rights or remedies the City may have to pursue
under either law or equity, including, without limitations, a cause of action for specific
performance or for damages, a loss to the City resulting from Consultant's negligent errors or
omissions, or breach of contract, and all such rights and remedies are expressly reserved.
The Consultant shall maintain and shall be caused to be in force at all times during the terms of
this Agreement, a legally binding policy of commercial liability insurance, with a rating of at
least A- with Best Rated Carriers. Such coverage shall cover any claim hereunder occasioned by
the Consultant's negligent professional act and/or error or omission, in an amount not less than
5500,000 combined single limit coverage occurrence. In the event of change or cancellation of -
the policy by the insurer, the Consultant herby covenants to forthwith advise the City thereof;
and in such event, the Consultant shall, prior to the effective date of change or cancellation, serve
substitute policies furnishing the same coverage. The Consultant shall provide a copy of such
policy or the declarations page of the policy or a certificate of insurance, whichever is reasonably
satisfactory, to the City through its City Manager simultaneously with the execution of this
Agreement. Consultant's insurance policies, through policy endorsement, shall include wording
which states that the policy shall be primary and non-contributory with respect to any insurance
carried by the City. The certificate of insurance must reflect that the above wording is included
in evidenced policies.
ARTICLE 6
This Agreement constitutes the complete and final expression of the agreement of the parties.
No oral statement of any person shall modify or otherwise change or affect the terms, conditions
or specifications stated in this agreement. All change orders to the Agreement will be made in
writing by the City and approved by the City Council.
Page 3
Oepllour documentskontracts\10Vred hill contract 2010-12 (nov 2010).doc
ARTICLE 7
The Consultant covenants and agrees that its officers, employees, and agents will have no
interest, including personal financial interest, and will acquire no interest, either directly or
indirectly, which will conflict in any manner with the performance of the services called for
under this agreement. No officer or employee of the City shall have a financial interest, direct or
indirect, in any contract with the City, or be financially interested, directly or indirectly, in the
sale to the City of any land, materials, supplies or services, except on behalf of the City or in
compliance with the provisions of the City of Denton's Personnel Policies and Procedures
Manual. Any violation of this provision shall render this Agreement voidable at the discretion of
the City.
ARTICLE 8
The Consultant shall comply with all applicable local, state and federal laws, rules and
regulations.
ARTICLE 9
All notices, communications and reports required or permitted under this Agreement shall be
personally delivered or mailed to the respective parties by depositing same in the United States
mail to the address shown below, certified mail, return receipt requested, unless otherwise
specified herein. Mailed notices shall be deemed communicated as of three (3) days' mailing
To City: To Consultant:
John Cabrales Fred Hill
Public Information Officer Solutions for Local Control, LLC
215 E. McKinney 909 N Waterview Dr.
Denton, TX 76201 Richardson, TX 75080
ARTICLE 10
This Agreement shall be governed by the laws of the State of Texas, venue and jurisdiction of
any suit or cause of action arising under this agreement shall lie exclusively in a court of
competent jurisdiction sitting in Denton County, Texas.
ARTICLE 11
Consultant shall not assign or transfer any interest in this Agreement (whether by assignment,
transfer, novation or otherwise) without the prior written consent of the City.
IN WITNESS HEREOF, the City of Denton, Texas, has caused this Agreement to be
executed by its duly authorized City Manager and Consultant has executed this Agreement
through its duly authorized President, dated this day of , 2010.
Page 4
sAlegahour documentslcontracts\10\fred hill contract 2010-12 (nov 2010).doc
CITY OF DENTON, TEXAS
GEORGE C. CAMPBELL, CITY MANAGER
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY: , L~
CONSULTANT
By: 2!(~,44
F H LL EHALF OF
SOLUTIONS FOR
LOCAL CONTROL, LLC
Page 5
AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010 Questions concerning this
acquisition may be directed
DEPARTMENT: Materials Management to Katherine Barnett 349-8202.
ACM: Jon Fortune
SUBJECT
Consider adoption of an ordinance authorizing the City Manager to execute a Professional
Services Agreement with Camp Dresser & McKee, Inc. for preparation of a Sustainability Plan
and Implementation Strategy for the City of Denton; authorizing the expenditure of funds
therefor; and providing an effective date (RFP 4536 in an amount not to exceed $169,190).
RFP INFORMATION
Phase II of the City of Denton Sustainability Plan is funded through Energy Efficiency and
Conservation Block Grant (EECBG) funds received by the City of Denton from the Department
of Energy. Phase I developed an Energy Efficiency Conservation Strategy (EELS) that outlined
the proposed projects to be completed with the remaining funds. Phase II is an approved project
under the EECS presented to the City Council.
The Scope of Service for Phase 11 of the City of Denton Sustainability Plan will provide the
following services: develop surveys for both internal and external stakeholders, analyze
responses by holding internal and community meetings to garner additional feedback and present
its conclusions. The required services in Phase II also includes performing strategy prioritization
and a strengths weaknesses opportunities threats analysis for the final list of strategies, drafting a
sustainability plan and presenting it to internal and external stakeholders for comment and
review. The second phase of the plan requires the vendor to develop a tracking system and
implementation tool that will provide readily accessible reporting on identified priorities and
implementation progress. Once these requirements are completed, the vendor will finalize and
present a City of Denton Sustainability Plan and Data Tracking System that will outline the path
for the City of Denton to follow while implementing sustainable programs and processes for the
City's internal services as well as the community.
The selection of a consultant for Phase II of the City of Denton Sustainability Plan was
accomplished through a Request for Proposals (RFP) for Professional Services. Three
engineering consulting firms were invited to submit proposals. All three firms submitted written
proposals as outlined in the request and were ranked based on the criteria outlined in the RFP.
The evaluation of the proposals was based on the following criteria:
1. Identification and understanding of the City's requirements for this project.
FACTOR: 20%
Agenda Information Sheet
November 16, 2010
Page 2
2. Firm's/sub-consultant's past performance and experience on projects of this magnitude
and complexity.
FACTOR: 20%
3. Firm's/sub-consultant's experience with specific issues.
FACTOR: 20%
4. Experience and qualifications of key personnel available for this project.
FACTOR: 20%
5. Schedule and information/alternatives presented for this scope of services as defined in
the scope of work.
FACTOR: 20%
The top two firms were asked to make a presentation to the selection committee. Following the
presentations, the committee unanimously selected Camp Dresser and McKee (CDM) to begin
contract negotiations.
PRIOR ACTIONNIEW (COUNCIL, BOARDS, COMMISSIONS)
February 2, 2009: Committee on the Environment (Individual Item concerning Community
Sustainability Initiatives).
February 18, 2009: Committee on the Environment (Individual item concerning Community
Sustainability initiatives)
September 17, 2009: Committee on the Environment (as a part of Assistant City Manager
"ACM" grant update)
November 2, 2009: Committee on the Environment (ACM update).
December 9, 2009: Presentation of ranking strategy methodology to the Committee on the
Environment.
January 13, 2010: Presentation of final ranking strategy to the Committee on the
Environment.
January 15, 2010: Staff report to Mayor and City Council outlining Committee on the
Environment Recommendation and staff s intent to submit recommended
proj ects.
April 5, 2010: Presentation of approved projects to the Mayor and City Council
November 1, 2010: Committee on the Environment recommended approval of the project in
the budgeted amount.
Agenda Information Sheet
November 16, 2010
Page 3
RECOMMENDATION
Award a Professional Services Agreement to Camp Dresser & McKee, Inc. in an amount not to
exceed $169,190.
PRINCIPAL PLACE OF BUSINESS
Camp Dresser & McKee, Inc.
Fort Worth, TX
ESTIMATED SCHEDULE OF PROJECT
The consulting services will commence upon Council approval and is estimated to be completed
by October 2011.
FISCAL INFORMATION
The total formula funding allocated to Denton was $1,117,000. Denton was provided $65,100 to
develop the required Energy Efficiency and Conservation Strategy. The Denton Sustainability
Plan Phase 11 contract (in an amount not to exceed $169,190) will be funded from the remaining
$1,051,900 in accordance with the City of Denton's Energy Efficiency and Conservation
Strategy, as approved by the Department of Energy.
This project will be funded from account 982009070. 13160. 101000. Requisition 100979 has been
entered in the Purchasing software system.
EXHIBITS
Exhibit 1: Scope of Service, Camp Dresser & McKee, Inc.
Exhibit 2: List of Respondents
Respectfully submitted:
Antonio Puente, Jr., 349-7283
Assistant Director of Finance
I -.CIS-RFP 4536
Exhibit 1
SCOPE OF WORK
CITY OF DENTON, TEXAS, PHASE II SUSTAINABILITY PLANNING:
PUBLIC PROCESS, SUSTAINABILITY PLAN AND TRACKING TOOL FOR IMPLEMENTATION
SEPTEMBER 28, 2010
Definitions
Project Team - Core City Sustainability staff to set the high level goals, lead the project's execution, and
coordinate with the CDM team on a regular basis (Staff members include Kenny Banks, Katherine
Barnett, and Victoria Venet).
Steering Committee - A select group of City staff representing key departments and government
functions that provide input on strategies / priorities for the Sustainability Plan.
Sustainability Partners - an invited group of external stakeholders that will participate in three workshops
designed to help shape the Sustainability Plan by providing input on sustainability strategies / priorities,
and engaging their constituencies to participate in the development and implementation processes.
Regular Communications
It is assumed that throughout the project, the CDM team will organize regular conference calls
(anticipated to be weekly to start, bi-weekly after the first Workshop and Public Meeting) with the Project
Team as needed to ensure effective communication and progress updates. A communications protocol
will be established in the Kick-Off Meeting Summary Report deliverable from Task 1.
TASK 1 - PRELIMINARY PLANNING & KICK-OFF MEETING
This Task will include all work preliminary work leading up to the official kick-off meeting, the meeting and
the Summary Report.
Phase I Review: CDM will review the Phase I Sustainability Report, the Downtown Implementation Plan,
and the Greenhouse Gas Inventory Report and synthesize relevant data from the Phase I Report on
Denton's current sustainability status into a more useful format for future planning.
Sustainability Partners Identification and Invitations: CDM will work with the Project Team to identify
interests with a stake in the Sustainability Plan, potential Partner organizations that represent those
interests, then individual members to invite to participate in the Steering Committee and as Sustainability
Partners (Partners). CDM will work with the Project Team to prepare a list of potential candidates for
Council consideration, and then send letter invitations to the Kick-off Meeting and the Partners Workshop
respectively, following Council selection and approval.
Draft Vision Statement, Goals, and "Mission & Guidelines": CDM will work with the Project Team to
draft elements of a Vision Statement and identify top tier goals to discuss at the Kick-off Meeting with the
Steering Committee, as well as a "Mission & Guidelines" document to guide Partners through the
planning process: This document should explain what we are doing, why we need the partners help, the
role the partners will play in the development of the plan, the role we hope the partners will play in
continually supporting the plan during implementation, and our estimation of the time commitment that will
be needed from the Partners.
A DRAFT September 28, 2010 P a g e 1 1
Draft Public Involvement Strategy: CDM will work with the Project Team to outline strategies and
expectations for public involvement in a Draft Public Involvement Strategy. This will identify key
organizations to assist with public participation and meeting attendance, any City staff resources and/or
communications policies, and a variety of media to use in engaging the public in the process.
Graphic Design & Brand Development: Based on this Draft Vision Statement, CDM will also develop
some graphic design concepts, expanding on the City's Sustainable Denton brand and review these with
the Project Team to determine a design aesthetic for the Sustainability initiative going forward. This brand
will be incorporated into all materials and outreach and help to establish a motivational message based
on the sustainability progress the City has already made and what it means to the average citizen.
Kick-off Meeting & Draft Stakeholder Survey: Finally, CDM will facilitate a discussion with the Steering
Committee to develop a draft project work plan and schedule and identify critical success factors through
a 2-3 hour, in person Kick-Off Meeting. In addition, CDM will work with the Steering Committee to develop
the stakeholder survey instrument described in Task 3.
Task 1 Deliverables: Kick-Off Meeting Summary Report, including Draft Project Work Plan,
schedule, critical success factors, a Draft Public Involvement Strategy, and a Draft Stakeholder
Survey. The Summary Report will also include the Draft Vision Statement and top level goals to be
vetted with the Partners at the 1st workshop, and a "Sustainable Denton" graphic design concept
for materials and outreach. A list of Sustainability Partners, letter invitations to those individuals,
and a "Mission & Guidelines" document will also be delivered to outline the Partners role in the
process.
TASK 2 - SUSTAINABILITY PARTNERS WORKSHOPS
CDM will organize and facilitate two (2) Workshops for the Sustainability Partners Workshops (2-3 hour in
person meetings with the consulting team and the Project Team). The purpose of Partners Workshop 1
will be to present the "Mission & Guidelines" and to discuss the Partners' mission in the Plan development
and implementation, the purpose of the project, a Sustainable Denton vision statement, and gather initial
input from Partners for the Sustainability Plan. The survey instrument described in Task 3 will be
administered in Workshop 1 as well.
At the Partners Workshop 2 the consulting team will present the Draft Sustainability Plan and gather
feedback on the strategies and implementation plan, prior to a public comment period.
Task 2 Deliverable: Sustainability Partners Workshop Agendas, presentation materials, and
Summary Reports (2)
TASK 3 - DISTRIBUTE SURVEY & ANALYZE AND REPORT SURVEY RESULTS
CDM will work with the Project Team to finalize a Sustainability Survey to gather input from the Partners
and the public. The purpose of the survey will be twofold: to solicit ideas of sustainability strategies to
consider in the Plan, and to gather input on how to prioritize those strategies down to a manageable
number (20-30) to facilitate implementation and desirable outcomes. CDM will distribute the Survey
electronically and on paper at the Partners Workshop 1 and Public Meetings (see Task 4), analyze data
and summarize results in a brief report. The electronic survey should also be accessible through the
City's Sustainability website. Survey results can also be summarized on the City's website from the
Report deliverable.
Task 3 Deliverable: Sustainability Survey Results Report - to be included as an Appendix to the
Sustainability Plan.
A DRAFT September 28, 2010 P a g e 12
TASK 4 - PUBLIC MEETINGS
CDM will work with the Project Team, the Steering Committee, the Partners and elected officials to
organize and facilitate two (2) public meetings. Ideally, the Mayor and/or a City Council member will be in
attendance and present opening remarks to demonstrate the City's high level commitment to the project.
CDM will organize and execute outreach to key individuals and organizations to facilitate active and
diverse participation in the public meetings. The Public Involvement Strategy will be developed as part of
Task 1 and will remain flexible so as to be able to respond to successful methods for encouraging
participation - some methods for encouraging participation include flyers, in person
meetings/announcements to key organizations, email list-serves, organizational newsletters and other
regular publications, web-page announcements, DTV, and perhaps also through social media such as
Facebook.
These two meetings will occur the same week in different venues (to be determined) to provide an
overview of the project purpose and schedule, present the Vision Statement and Goals, and invite ideas
and input for the Sustainability Plan in terms of specific strategies and priorities. This may be
accomplished through 3-4 smaller breakout sessions by topic. The paper survey will be available for the
Public Meetings as well. CDM will compile the results of the public meetings into a Public Participation
report to be included in the Sustainability Plan.
The City will publish the information presented at the meetings and any photographs on the City's
Sustainability website. CDM will provide content for the website. The City is responsible for website
programming, design, updating, and hosting.
Task 4 Deliverable: Public Participation Report - a summary of public input received and how it
will be incorporated into the planning process, to be included as an Appendix to the Sustainability
Plan.
TASK 5 - SWOT MEETING
CDM will compile and consolidate the sustainability strategy ideas collected through public meetings,
survey, Kickoff Meeting, Partners Workshops, and other venues into one list of potential strategies for
inclusion in the Plan.
CDM will develop a Prioritization Framework with the Project Team and the results of the survey
instrument to assist in ranking the proposed strategies according to a number of prioritization criteria as
identified through the Framework development. Some of these criteria will likely include return on
investment, triple bottom line, and any other key factors such as resources available and emissions
reduction potential. The consulting team, working with the Project Team, will utilize the criteria and a
simple, qualitative scoring system to apply the prioritization framework to the proposed strategies. The
outcome will be a numerical score assigned to each proposed strategy to help rank strategies according
to the framework criteria. This numerical score is not the final answer, as other political priorities may
arise - rather, it provides a backdrop to facilitate decision-making. This will be accomplished through
conference calls and e-mail exchanges and one formal meeting.
This list of prioritized strategies will form the basis of the SWOT meeting. Steering Committee and
Partners members will be invited to the SWOT meeting to discuss the top strategies from the prioritization
framework, to identify any critical gaps or challenges, and to identify key performance metrics and
implementation actions.
Task 5 Deliverable: A prioritized list of strategies consolidated from the public process and one
meeting with the Project Team to finalize that list. One SWOT meeting with the Project Team,
Steering Committee and Partners and a Summary Report.
TASK 6 - DRAFT SUSTAINABILITY PLAN
A DRAFT September 28, 2010 P a g e 1 3
Prior to Draft Sustainability Plan development, CDM will present an update on progress to date to the
Committee on the Environment (COE) to gather initial input and guidance. CDM will present draft
prioritized list of strategies, key performance metrics and implementation actions to the COE for input and
feedback.
CDM will develop the Draft Sustainability Plan based on the Vision for a Sustainable Denton, the top level
sustainability goals, and a targeted number of sustainability strategies (20-30).
The plan will identify strategies for meeting sustainability goals and metrics for measuring progress,
including policies, projects and program development. The draft plan will also layout a short-term
implementation plan for 3-5 years, to be accompanied by an implementation and communications tool as
identified in Task 7. The plan will also accommodate goals and strategies - in less detail - that may be
more appropriate for longer-term consideration.
Before the Draft Plan is opened up to public review (CDM suggests a 30 day comment period) CDM will
assist the Project Team in presenting the Draft Plan to the Partners and the Steering Committee, and in
presenting the Draft Plan to the City Council.
Task 6 Deliverable: COE presentation prior to Draft development. Draft Sustainability Plan in
electronic format for review. Presentations to Partners (see Task 2 - Workshop 2), the Steering
Committee and the City Council prior to public comment period.
TASK 7 - DRAFT IMPLEMENTATION & COMMUNICATION TOOL
Concurrent with the review period for the Draft Sustainability Plan, CDM will work with the Project Team
to develop a draft data management tool for tracking progress and communicating results. This web-
based tool will provide data management capabilities to track progress and metrics, and will include
dashboard and reporting functions to visually communicate results both internally and externally. The
following provides a description of the major functions of the proposed tracking system. CDM will work
with the Steering Committee to refine the purpose and functions of the tool at the Kick-off Meeting and
following review of the Draft Sustainability Plan. The Prioritization Framework as developed in Task 5
above will also serve to guide the development of metrics or "key performance indicators" (KPI's) for
tracking and dashboard management.
Management Dashboard - Information Portals and Dashboards typically provide a mechanism to
integrate data from existing information systems and deliver "management at a glance" - visualization of
KPI's and trends that support decision-making. The Dashboard aids stakeholders at multiple levels in
recognizing and responding to business events, project status, and progress towards critical goals. The
tool will include a management dashboard that presents a high-level summary of data from the system.
For example, the dashboard will present summaries of strategy progress to date reported across relevant
project dimensions such as by City department or by high-level goals.
Operational Data Component - The data presented in the tool will be managed via an operational data
component which will be available to appropriate stakeholders to add, edit and delete project tracking
data. Examples of the type of data tracked in the system may include water consumed at public facilities,
or vehicle miles traveled by City staff. The intent is to utilize data that are already readily available to City
staff to minimize data collection and quality management requirements. CDM will work with the Project
Team to identify KPI's that represent the goals of the project, but that also facilitate measurement and
verification.
Reporting - The tool will also include reporting functionality that provides the ability to export tool
information to Word, Excel or PDF. A "progress report" functionality will be developed to allow the users
to report out to upper management as well as elected officials.
A DRAFT September 28, 2010 P a g e 14
Sign-On - The tool will include a sign-on component to manage users by role, such as by City
department. The system can include a "general public" non-credentialed user, if public access is needed.
Public Website - CDM will also provide a template and design assistance to create a Sustainable
Denton Scorecard for the public website to showcase progress and increase engagement. The scorecard
will be created externally as a PDF or other stand alone document and posted to the website by the City.
Task 7 Deliverable: Draft Data Tracking & Implementation Tool (containing all of the elements
outlined within this task) for Project Team Review and Testing.
TASK 8 - FINAL PLAN & IMPLEMENTATION AND COMMUNICATIONS TOOL
Following Steering and Stakeholder Committee review of Task 5 and 6 deliverables, and a public
comment period, CDM will finalize the Sustainability Plan and Data Tracking & Implementation Tool. CDM
will work with the Project Team, Steering committee, and Partners to organize a multi-media, multi-
organizational launch of the Sustainability Plan, and determine a feasible strategy for ongoing
collaboration between the City and the Partners.
Task 8 Deliverables: Final Sustainability Plan (electronic format); Data Tracking & Implementation
Tool (web-based); and a Presentation (PowerPoint) summarizing the Sustainability Plan and
ongoing implementation for City communications purposes. CDM will also present the Final Plan
to City Council.
DRAFT SCHEDULE:
meetings or workshops
review period
A DRAFT September 28, 2010 P a g e 1 5
Exhibit 2
RFP # 4536
Opens: 7/27/2010
Phase II Denton Sustainability Plan
DESCRIPTION RESPONDENT
RESPONDENT
RESPONDENT
Gresham Smith
HDR
CDM
& Partners
Engineering, Inc.
Principle Place of Business: Fort Worth, TX
Dallas, TX
McKinney, TX
ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL
SERVICES AGREEMENT WITH CAMP DRESSER& MCKEE, INC. FORPREPARATION OF
A SUSTAINABILITY PLAN AND IMPLEMENTATION STRATEGY FOR THE CITY OF
DENTON; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING
AN EFFECTIVE DATE (FILE 4536 IN AN AMOUNT NOT TO EXCEED $169,190).
WHEREAS, The professional services provider (the "Provider) mentioned in this ordinance
is being selected as the most highly qualified on the basis of its demonstrated competence and
qualifications to perform the proposed professional services; and
WHEREAS, The fees under the proposed contract are fair and reasonable and are consistent
with and not higher than the recommended practices and fees published by the professional
associations applicable to the Provider's profession and such fees do not exceed the maximum
provided by law; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION L That the City Manager is hereby authorized to enter into a professional service
contract with Camp Dresser & McKee, Inc., to oversee the development of a sustainability plan and
an implementation strategy for the City of Denton, a copy of which is attached hereto and
incorporated by reference herein.
SECTION 11. The City Manager is authorized to expend funds as required by the attached
contract.
SECTION III. The findings in the preamble of this ordinance are incorporated herein by
reference.
SECTION IV.
This ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of 12010.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
3-oRD-File 4536
STATE OF TEXAS
COUNTY OF DENTON §
PROFESSIONAL SERVICES AGREEMENT
FOR PREPARATION OF A SUSTAINABILITY PLAN AND AN IMPLEMENTATION
STRATEGY FOR THE CITY OF DENTON TEXAS
THIS AGREEMENT is made and entered into as of the 01 day of 0 ) v0YYI
2010, by and between the City of Denton, Texas, a Texas municipal corporation, with its
principal office at 215 East McKinney Street, Denton, Denton County, Texas 76201, hereinafter
called "OWNER" and Camp Dresser & McKee, Inc-, with its corporate offices at 777 Taylor
Street, Suite 1050, Fort Worth, Texas 76102, hereinafter called "CONSULTANT," acting herein,
by and through their respective duly authorized officers and representatives-
WITNESSETH, that in consideration of the covenants and agreements herein contained,
the parties hereto do mutually agree as follows:
ARTICLE I
EMPLOYMENT OF CONSULTANT
The OWNER hereby contracts with the CONSULTANT, as an independent contractor,
and the CONSULTANT hereby agrees to perform the services herein in connection with the
Project as stated in the sections to follow, with diligence and in accordance with the highest
professional standards customarily obtained for such services in the State of Texas. The
professional services set out herein are in connection with the following described project:
The Project shall include, without limitation, Creation of a Sustainability Plan and
Implementation Strategy for the City of Denton, Texas.
ARTICLE II
SCOPE OF SERVICES
The CONSULTANT shall perform the following services in a professional manner:
A. The CONSULTANT shall perform all those services as necessary and as described in the
Scope of Services which is attached hereto as Exhibit "A" and is incorporated by
reference as if set forth fully herein.
B. If there is any conflict between the terms of this Agreement and the exhibits attached to
this Agreement, the terms and conditions of this Agreement will control over the terms
and conditions of the attached exhibits or task orders.
ARTICLE III
ADDITIONAL SERVICES
Additional services shall be requested in writing by the OWNER and shall be in
accordance with the Cost Schedule described in Article V.C., hereunder.
ARTICLE IV
PERIOD OF SERVICE
This Agreement shall become effective upon execution of this Agreement by the
OWNER and the CONSULTANT and upon issuance of a notice to proceed by the OWNER, and
shall remain in force for a period of eighteen (18) months, which may reasonably be required for
the completion of the Project, including Additional Services, if any, and any required extensions
approved by the OWNER. This Agreement may be sooner terminated in accordance with the
provisions hereof. Time is of the essence in this Agreement. The CONSULTANT shall make all
reasonable efforts to complete the services set forth herein as expeditiously as possible and to
meet the schedule established by the OWNER, acting through its City Manager or his designee.
ARTICLE V
COMPENSATION
A. COMPENSATION TERMS:
"Direct Non-Labor Expense" is defined as that expense for any assignment incurred by
the CONSULTANT for supplies, transportation and equipment, travel, communications,
subsistence, and lodging away from home, and similar incidental expenses in connection
with that assignment.
B. BILLING AND PAYMENT: For and in consideration of the professional services to be
performed by the CONSULTANT herein, the OWNER agrees to pay, based on the cost
estimate detail at the hourly rates shown in Exhibit "B" which is attached hereto and is
incorporated by reference as if set forth fully in this Agreement, a total fee, including
reimbursement for direct non-labor expenses not-to-exceed $169,190_
Partial payments to the CONSULTANT will be made on the basis of detailed monthly
statements rendered to and approved by the OWNER through its City Manager or his
designee; however, under no circumstances shall any monthly statement for services
exceed the value of the work performed at the time a statement is rendered.
Nothing contained in this Article shall require the OWNER to pay for any work which is
unsatisfactory, as reasonably determined by the City Manager or his designee, or which is
not submitted in compliance with the terms of this Agreement. The OWNER shall not be
required to make any payments to the CONSULTANT when the CONSULTANT is in
default under this Agreement-
It is specifically understood and agreed that the CONSULTANT shall not be authorized
to undertake any work pursuant to this Agreement which would require additional
Page 2
payments by the OWNER for any charge, expense, or reimbursement above the
maximum not-to-exceed fee as stated above, without first having obtained written
authorization from the OWNER. The CONSULTANT shall not proceed to perform the
services listed in Article III "Additional Services," without obtaining prior written
authorization from the OWNER.
C. ADDITIONAL SERVICES: For additional services authorized in writing by the
OWNER in Article III, the CONSULTANT shall be paid based on the Schedule of
Charges at an hourly rate shown in Exhibit "B." Payments for additional services shall
be due and payable upon submission by the CONSULTANT, and shall be paid in
accordance with subsection B of this Article IV. Statements shall not be submitted more
frequently than monthly.
D. PAYMENT: If the OWNER fails to make undisputed payments due the CONSULTANT
for services and expenses within thirty (30) days after receipt of the CONSULTANT's
undisputed statement thereof, prompt payment act interest as provided in Chapter 2251 of
the Texas Government Code shall be paid on the amounts due the CONSULTANT. In
addition, the CONSULTANT may, if it has not received payment by the thirty-first (31St)
day after receipt of statement, after giving ten (10) days written notice to the OWNER,
may suspend services under this Agreement until the CONSULTANT has been paid in
full all amounts due for services, expenses, and charges owed to date; provided, however,
nothing herein shall require the OWNER to pay prompt payment act interest if the
OWNER has a bona- fide dispute with the CONSULTANT concerning the payment or if
the OWNER reasonably determines that the work is unsatisfactory, in accordance with
this Article IV, "Compensation" and the OWNER notifies CONSULTANT in writing
with fifteen (15) days after the receipt of a billing statement from CONSULTANT of the
unsatisfactory work, specifying the OWNER's complaint.
ARTICLE VI
OBSERVATION AND REVIEW OF THE WORK
The CONSULTANT will exercise reasonable care and due diligence in discovering and
promptly reporting to the OWNER any defects or deficiencies in the work of the
CONSULTANT or any subcontractors or subconsultants.
ARTICLE VII
OWNERSHIP OF DOCUMENTS
All documents prepared or furnished by the CONSULTANT (and CONSULTANT's
subcontractors or subconsultants) pursuant to this Agreement are instruments of service, and
shall become the property of the OWNER upon the termination of this Agreement. If either party
terminates this Agreement prior to its completion, the OWNER is entitled to originals of all
documents that have been produced and paid for by OWNER by CONSULTANT up to the date
of termination. The CONSULTANT is entitled to retain copies of all such documents. The
documents prepared and furnished by the CONSULTANT are intended only to be applicable to
this Project, and OWNER's use of these documents in other projects shall be at OWNER's sole
Page 3
risk and expense. In the event the OWNER uses any of the information or materials developed
pursuant to this Agreement in another project or for other purposes than specified herein,
CONSULTANT is released from any and all liability relating to their use in that project.
ARTICLE VIII
INDEPENDENT CONTRACTOR
CONSULTANT shall provide services to OWNER as an independent contractor, not as
an employee of the OWNER. CONSULTANT shall not have or claim any right arising from
employee status.
ARTICLE IX
INDEMNITY AGREEMENT
The CONSULTANT shall indemnify and save and hold harmless the OWNER and its
officers, agents, and employees from and against any and all liability, claims, demands, damages,
losses, and expenses, including, but not limited to court costs and reasonable attorney fees
incurred by the OWNER, and including, without limitation, damages for bodily and personal
injury, death and property damage, resulting from the negligent acts or omissions of the
CONSULTANT or its officers, shareholders, agents, or employees in the execution, operation, or
performance of this Agreement.
Nothing in this Agreement shall be construed to create a liability to any person who is not
a party to this Agreement, and nothing herein shall waive any of the parties' defenses, both at
law or equity, to any claim, cause of action, or litigation filed by anyone not a party to this
Agreement, including the defense of governmental immunity, which defenses are hereby
expressly reserved.
ARTICLE X
INSURANCE
During the performance of the services under this Agreement, CONSULTANT shall
maintain the following insurance with an insurance company licensed to do business in the State
of Texas by the State Insurance Commission or any successor agency that has a rating with Best
Rate Carriers of at least an "A-" or above:
A. Commercial General Liability Insurance with bodily injury limits of not less than
$500,000 for each occurrence and not less than $500,000 in the aggregate, and with
property damage limits of not less than $100,000 for each occurrence and not less than
$100,000 in the aggregate.
B. Automobile Liability Insurance with bodily injury limits of not less than $500,000 for
each person and not less than $500,000 for each accident, and with property damage
limits of not less than $100,000 for each accident.
Page 4
C. Worker's Compensation Insurance in accordance with statutory requirements, and
Employers' Liability Insurance with limits of not less than $100,000 for each accident.
D. Professional Liability Insurance with limits of not less than $1,000,000 annual aggregate
E. The CONSULTANT shall furnish insurance certificates or insurance policies at the
OWNER's request to evidence such coverages. The insurance policies shall name the
OWNER as an additional insured on all such policies except for the professional liability
policy, and shall contain a provision that such insurance shall not be canceled or modified
without thirty (30) days' prior written notice to OWNER and CONSULTANT. In such
event, the CONSULTANT shall, prior to the effective date of the change or cancellation,
serve substitute policies furnishing the same coverage.
ARTICLE XI
MEDIATION AND ALTERNATE DISPUTE RESOLUTION
The parties may agree to settle any disputes under this Agreement by submitting the
dispute to mediation. No mediation arising out of or relating to this Agreement may proceed
without the agreement of both parties to submit the dispute to mediation. The location for the
mediation shall be the City of Denton, Denton County, Texas unless a different location is
agreed to by the parties.
ARTICLE XII
TERMINATION OF AGREEMENT
A. Notwithstanding any other provision of this Agreement, either party may terminate by
giving thirty (30) days' advance written notice to the other party.
B. This Agreement may be terminated in whole or in part in the event of either party
substantially failing to fulfill its obligations under this Agreement. No such termination
will be affected unless the other party is given (1) written notice (delivered by certified
mail, return receipt requested) of intent to terminate and setting forth the reasons
specifying the non-performance, and not less than thirty (30) calendar days to cure the
failure; and (2) an opportunity for consultation with the terminating party prior to
termination.
C. If the Agreement is terminated prior to completion of the services to be provided
hereunder, CONSULTANT shall immediately cease all services and shall render a final
bill for services to the OWNER within thirty (30) days after the date of termination. The
OWNER shall pay CONSULTANT for all services properly rendered and satisfactorily
performed and for reimbursable expenses to termination, incurred prior to the date of
termination, in accordance with Article V "Compensation." Should the OWNER
subsequently contract with a new consultant for the continuation of services on the
Project, CONSULTANT shall cooperate in providing information. The CONSULTANT
shall turn over all documents prepared or furnished by CONSULTANT pursuant to this
Page 5
Agreement to the OWNER on or before the date of termination, but may maintain copies
of such documents for its use.
ARTICLE XIII
RESPONSIBILITY FOR CLAIMS AND LIABILITIES
Approval by the OWNER shall not constitute, nor be deemed a release of the
responsibility and liability of the CONSULTANT, its employees, associates, agents,
subcontractors, and subconsultants for the accuracy and competency of their designs or other
work; nor shall such approval be deemed to be an assumption of such responsibility by the
OWNER for any defect in the design or other work prepared by the CONSULTANT, its
employees, subcontractors, agents, and consultants. CONSULTANT retains design
responsibility and liability at all times during this Agreement and after completion of this
Agreement.
ARTICLE XIV
NOTICES
All notices, communications, and reports required or permitted under this Agreement
shall be personally delivered or mailed to the respective parties by depositing same in the United
States mail to the address shown below, certified mail, return receipt requested, unless otherwise
specified herein. All notices shall be deemed effective upon receipt by the party to whom such
notice is given, or within three (3) days' mailing.
Alternatively, notice may be provided by electronic means once OWNER and
CONSULTANT exchange e-mail addresses in writing. In that event the notice shall be effective
as of the date of receipt of the e-mail if received by 5 p.m. on that business day. Otherwise, it
shall be deemed received as of the next business day.
To CONSULTANT:
Camp, Dresser & McKee, Inc.
Douglas Varner, P.E.
777 Taylor Street, Suite 1050
Fort Worth, Texas 76102
To OWNER:
City of Denton, Texas
City Manager
215 East McKinney Street
Denton, Texas 76201
Katherine Barnett-White
Sustainability & Utility Project Coordinator
Utility Administration
215 East McKinney Street
Denton, Texas 76201
Page 6
ARTICLE XV
ENTIRE AGREEMENT
This Agreement, consisting of twenty (20) pages and two (2) exhibits, constitutes the
complete and final expression of the agreement of the parties, and is intended as a complete and
exclusive statement of the terms of their agreements, and supersedes all prior contemporaneous
offers, promises, representations, negotiations, discussions, communications, and agreements
which may have been made in connection with the subject matter hereof.
ARTICLE XVI
SEVERABILITY
If any provision of this Agreement is found or deemed by a court of competent
jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of
this Agreement and shall not cause the remainder to be invalid or unenforceable. In such event,
the parties shall reform this Agreement to replace such stricken provision with a valid and
enforceable provision which comes as close as possible to expressing the intention of the stricken
provision.
ARTICLE XVII
COMPLIANCE WITH LAWS
The CONSULTANT shall comply with all federal, state, and local laws, rules,
regulations, and ordinances applicable to the work covered hereunder as they may now read or
hereinafter be amended.
ARTICLE XVIII
DISCRIMINATION PROHIBITED
In performing the services required hereunder, the CONSULTANT shall not discriminate
against any person on the basis of race, color, religion, sex, national origin or ancestry, age, or
physical handicap.
ARTICLE XIX
PERSONNEL
A. The CONSULTANT represents that it has or will secure, at its own expense, all
personnel required to perform all the services required under this Agreement. Such
personnel shall not be employees or officers of, nor have any contractual relations with
the OWNER. CONSULTANT shall inform the OWNER of any conflict of interest or
potential conflict of interest that may arise during the term of this Agreement.
B. All services required hereunder will be performed by the CONSULTANT or under its
supervision. All personnel engaged in work shall be qualified, and shall be authorized
and permitted under state and local laws to perform such services.
Page 7
C. In those instances deemed necessary by the OWNER, the CONSULTANT, its employees
and/or its Sub-consultants shall be required to submit to background checks.
ARTICLE XX
ASSIGNABILITY
The CONSULTANT shall not assign any of its scope of work under this Agreement, and
shall not transfer any of its scope of work under this Agreement (whether by assignment,
novation, or otherwise) without the prior written consent of the OWNER. Should the
CONSULTANT assign any part of the monies due under this Agreement, CONSULTANT is
required to provide written notice of the same to OWNER. Any assignment of monies due under
this Agreement shall not change any of the terms or conditions of this Agreement to include, but
not limited to the terms and conditions for payment under this Agreement.
ARTICLE XXI
MODIFICATION
No waiver or modification of this Agreement or of any covenant, condition, or limitation
herein contained shall be valid unless in writing and duly executed by the party to be charged
therewith, and no evidence of any waiver or modification shall be offered or received in evidence
in any proceeding arising between the parties hereto out of or affecting this Agreement, or the
rights or obligations of the parties hereunder, and unless such waiver or modification is in
writing and duly executed; and the parties further agree that the provisions of this section will not
be waived unless as set forth herein.
ARTICLE XXII
MISCELLANEOUS
A. The following exhibits are attached hereto and made a part of this Agreement:
Exhibit "A" - Scope of Services
Exhibit "B" - Estimated Cost and Hourly Rates
Standard of Care: The standard of care for all professional engineering and related
services performed or furnished by the CONSULTANT under this agreement will be the
care and skill ordinarily used by members of CONSULTANT'S profession practicing
under similar conditions at the same time and in the same locality.
B. Mutual Waiver of Consequential Damages: Notwithstanding any other provision of this
Agreement to the contrary, neither party including their officers, agents, servants and
employees shall be liable to the other for lost profits or any special, indirect, incidental, or
consequential damages in any way arising out of this Agreement however caused under a
claim of any type or nature based on any theory of liability (including, but not limited to:
contract, tort, or warranty) even if the possibility of such damages has been
communicated.
Page 8
Limitation of Liability: In no event shall CONSULTANT'S total liability to OWNER
and/or any of the OWNER'S officers, employees, agents, contractors, or subcontractors
for any and all injuries, claims, losses, expenses or damages whatsoever arising out of or
in any way related to this Agreement from cause or causes, including, but not limited to,
CONSULTANT'S wrongful act, omission, negligence, errors, strict liability, breach of
contract, breach of warranty, express or implied, exceed the total amount of fee paid to
CONSULTANT. However, the parties understand and stipulate that this provision
operates independently from the insurance coverage otherwise required to be maintained
by this Agreement.
C. CONSULTANT agrees that OWNER shall, until the expiration of three (3) years after
the final payment or after final completion of all work required under this Agreement,
whichever is longer, have access to and the right to examine any directly pertinent books,
documents, papers, correspondence, to include e-mails, and records of the
CONSULTANT involving transactions relating to this Agreement. CONSULTANT is
required to maintain and make available all electronic records associated with this
Agreement for purposes of examination. CONSULTANT agrees that OWNER shall
have access during normal working hours to all necessary CONSULTANT facilities and
shall be provided adequate and appropriate working space in order to conduct audits in
compliance with this section. OWNER shall give CONSULTANT reasonable advance
notice of intended audits. This paragraph shall work in conjunction with the Audit
provision set forth in Article XXII hereinbelow.
D. Venue of any suit or cause of action under this Agreement shall lie exclusively in Denton
County, Texas. This Agreement shall be construed in accordance with the laws of the
State of Texas.
E. For the purpose of this Agreement, the key person shall be Amelia L. Pellegrin, AICP,
LEED AP, Principal; and Douglas Varner, P.E., Principal will be the project manager.
However, nothing herein shall limit CONSULTANT from using other qualified and
competent members of its firm to perform the services required herein. CONSULTANT
understands that OWNER is to be informed of the removal or loss of any of the key
persons working under this Agreement. CONSULTANT also agrees to provide the
OWNER with notice of the name(s) of who it intends to replace the key person.
OWNER shall have a right to reject any replacement key person(s) and CONSULTANT
agrees to name a replacement key person(s) acceptable to the OWNER.
F. CONSULTANT shall commence, carry on, and complete any and all projects with all
applicable dispatch, in a sound, economical, and efficient manner and in accordance with
the provisions hereof. In accomplishing the projects, CONSULTANT shall take such
steps as are appropriate to ensure that the work involved is properly coordinated with
related work being carried on by the OWNER.
G. The OWNER shall assist the CONSULTANT by placing at the CONSULTANT's
disposal all available information pertinent to the Project, including previous reports, any
Page 9
other data relative to the Project, and arranging for the access thereto, and make all
provisions for the CONSULTANT to enter in or upon public and private property as
required for the CONSULTANT to perform services under this Agreement.
H. The captions of this Agreement are for informational purposes only, and shall not in any
way affect the substantive terms or conditions of this Agreement.
ARTICLE XXIII
RIGHT TO AUDIT
The OWNER shall have the right to audit and make copies of the books, records and
computations pertaining to this agreement. The CONSULTANT shall retain such books,
records, documents and other evidence pertaining to this Agreement during the contract period
and three years thereafter, except if an audit is in progress or audit findings are yet unresolved, in
which case records shall be kept until all audit tasks are completed and resolved. These books,
records, documents and other evidence shall be available, within ten (10) business days of
written request. Further, the CONSULTANT shall also require all Subcontractors, material
suppliers, and other payees to retain all books, records, documents and other evidence pertaining
to this agreement, and to allow the OWNER similar access to those documents. All books and
records will be made available at the CONSULTANT's corporate office (headquarters) in
Cambridge, Massachusetts where all records are retained per the CONSULTANT's record
retention policy. The cost of the audit will be borne by the OWNER unless the audit reveals an
overpayment of 5% or greater by the OWNER. If an overpayment of 5% or greater occurs, the
reasonable cost of the audit, including any travel costs, must be borne by the CONSULTANT
which must be payable within fifteen (15) days of receipt of an invoice by OWNER.
IN WITNESS HEREOF, the City of Denton, Texas has caused this Agreement to be
executed by its duly authorized City Manager, and CONSULTANT has executed this Agreement
through its duly authorized undersigned officer on this the day of
2010.
"OWNER"
THE CITY OF DENTON, TEXAS
A Texas Municipal Corporation
By:
GEORGE C. CAMPBELL
CITY MANAGER
Page 10
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
By:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
By:
"CONSULTANT"
CAMP, DRESSER & McKEE, INC.
A CORPORATION
By:
OU AS VARNER, P.E.
PRINCIPAL
ATTEST:
B
APPROVED AS TO LEGAL FORM:
By:
Page I I
CITY OF DENTON
INSURANCE REQUIREMENTS FOR
CONS ULTANTSICONTRACTORS
The Offeror'sBidder's attention is directed to the insurance requirements below. It is highly
recommended that offerors/bidders confer with their respective insurance carriers or brokers
to determine in advance of its proposal or bid submission the availability of insurance
certificates and endorsements as prescribed and provided herein. If an offeror/apparent low
bidder fails to comply strictly with the insurance requirements, that offeror/bidder may be
disqualified from award of the contract. Upon award, all insurance requirements shall
become contractual obligations, which the successful offeror/bidder shall have a duty to
maintain throughout the course of this contract.
STANDARD PROVISIONS:
Without limiting any of the other obligations or liabilities of the Consultant/Contractor, the
Consultant/Contractor shall provide and maintain until the contracted work has been completed
and accepted by the City of Denton, Owner, the minimum insurance coverage as indicated
hereinafter.
As soon as practicable after notification of award, Consultant/Contractor shall file with the
Purchasing Department satisfactory certificates of insurance, containing the proposal/bid
number and title of the project. Consultant/Contractor may, upon written request to the
Purchasing Department, ask for clarification of any insurance requirements at any time;
however, Consultants/Contractors are strongly advised to make such requests prior to
proposal/bid opening, since the insurance requirements may not be modified or waived after
proposal/bid opening unless a written exception has been submitted with the proposal/bid.
Consultant/Contractor shall not commence any work or deliver any material until he or she
receives notification that the contract has been accepted, approved, and signed by the City of
Denton.
All insurance policies proposed or obtained in satisfaction of these requirements shall comply
with the following general specifications, and shall be maintained in compliance with these
general specifications throughout the duration of the Contract, or longer, if so note&
• Each policy shall be issued by a company authorized to do business in the State of
Texas with an A.M. Best Company rating of at least "A-".
• Any deductibles or self-insured retentions shall be declared in the proposal or bid. If
requested by the City, the insurer shall reduce or eliminate such deductibles or
self-insured retentions with respect to the City, its officials, agents, employees and
volunteers; or, the Consultant/Contractor shall procure a bond guaranteeing payment of
losses and related investigations, claims administration and defense expenses.
Page 12
• Liability policies shall be endorsed to provide the following:
• Name as additional insured the City of Denton, its Officials, Agents,
Employees and volunteers.
That such insurance is primary to any other insurance available to the
additional insured with respect to claims covered under the policy and that this
insurance applies. separately to each insured against whom claim is made or
suit is brought. The inclusion of more than one insured shall not operate to
increase the insurer's limit of liability.
• Cancellation: City requires 30-day written notice should any of the policies
described on the certificate be cancelled or materially changed before the
expiration date.
Should any of the required insurance be provided under a claims-made form,
Consultant/Contractor shall maintain such coverage continuously throughout
the term of this contract and, without lapse, for a period of three years beyond
the contract expiration, such that occurrences arising during the contract term
which give rise to claims made after expiration of the contract shall be covered.
• Should any of the required insurance be provided under a form of coverage that
includes a general annual aggregate limit providing for claims investigation or
legal defense costs to be included in the general annual aggregate limit, the
Consultant/Contractor shall either double the occurrence limits or obtain
Owners and Contractors Protective Liability Insurance.
• Should any required insurance lapse during the contract term, requests for
payments originating after such lapse shall not be processed until the City
receives satisfactory evidence of reinstated coverage as required by this
contract, effective as of the lapse date. If insurance is not reinstated, City may,
at its sole option, terminate this agreement effective on the date of the lapse.
Page 13
SPECIFIC ADDITIONAL INSURANCE REQUIREMENTS:
A11 insurance policies proposed or obtained in satisfaction of this Contract shall additionally
comply with the following marked specifications, and shall be maintained in compliance with
these additional specifications throughout the duration of the Contract, or longer, ifso noted:
[XI A. General Liability Insurance:
General Liability insurance with combined single limits of not less than $5.00,000.00
shall be provided and maintained by the Contractor. The policy shall be written on
an occurrence basis either in a single policy or in a combination of underlying and
umbrella or excess policies.
If the Commercial General Liability form (ISO Form CG 0001 current edition) is
used:
Coverage A shall include premises, operations, products, and completed
operations, independent contractors, contractual liability covering this
contract and broad form property damage coverage.
• Coverage B shall include personal injury.
Coverage C, medical payments, is not required.
If the Comprehensive General Liability form (ISO Form GL 0002 Current Edition
and ISO Form GL 0404) is used, it shall include at least:
Bodily injury and Property Damage Liability for premises, operations,
products and completed operations, independent contractors and property
damage resulting from explosion, collapse or underground (XCU)
exposures.
• Broad form contractual liability (preferably by endorsement) covering this
contract, personal injury liability and broad form property damage liability.
[X] Automobile Liability Insurance:
Contractor shall provide Commercial Automobile Liability insurance with Combined
Single Limits (CSL) of not less than $500,000.00 either in a single policy or in a
combination of basic and umbrella or excess policies. The policy will include bodily
injury and property damage liability arising out of the operation, maintenance and use of
all automobiles and mobile equipment used in conjunction with this contract.
Satisfaction of the above requirement shall be in the form of a policy endorsement for:
• any auto, or
• all owned, hired and non-owned autos.
14
JX] Workers Compensation Insurance
Contractor shall purchase and maintain Worker's Compensation insurance which, in
addition to meeting the minimum statutory requirements for issuance of such insurance,
has Employer's Liability limits of at least $100,000 for each accident, $100,000 per each
employee, and a $500,000 policy limit for occupational disease. The City need not be
named as an "Additional Insured" but the insurer shall agree to waive all rights of
subrogation against the City, its officials, agents, employees and volunteers for any work
performed for the City by the Named Insured. For building or construction projects, the
Contractor shall comply with the provisions of Attachment 1 in accordance with
§406.096 of the Texas Labor Code and Rule 2$ TAC 110.110 of the Texas Worker's
Compensation Commission (TWCC).
L] Owner's and Contractor's Protective Liability Insurance
The Contractor shall obtain, pay for and maintain at all times during the prosecution of
the work under this contract, an Owner's and Contractor's Protective Liability insurance
policy naming the City as insured for property damage and bodily injury which may arise
in the prosecution of the work or Contractor's operations under this contract. Coverage
shall be on an "occurrence" basis, and the policy shall be issued by the same insurance
company that carries the Contractor's liability insurance. Policy limits will be at least
combined bodily injury and property damage per occurrence with a aggregate.
] Fire Damage Legal Liability Insurance
Coverage is required if Broad form General Liability is not provided or is unavailable to
the contractor or if a contractor leases or rents a portion of a City building. Limits of not
less than each occurrence are required.
[X] Professional Liability Insurance
Professional liability insurance with limits not less than $1,000,000.00 per claim with
respect to negligent acts, errors or omissions in connection with professional services is
required under this Agreement.
Builders' Risk Insurance
Builders' Risk Insurance, on an All-Risk form for 100% of the completed value shall be
provided. Such policy shall include as "Named Insured" the City of Denton and all
subcontractors as their interests may appear.
Commercial Crime
Provides coverage for the theft or disappearance of cash or checks, robbery inside/outside
the premises, burglary of the premises, and employee fidelity. The employee fidelity
portion of this coverage should be written on a "blanket" basis to cover all employees,
including new hires. This type insurance should be required if the contractor has access
to City funds. Limits of not less than each occurrence are required.
Page 15
LJ Additional Insurance
Other insurance may be required on an individual basis for extra hazardous contracts and
specific service agreements. If such additional insurance is required for a specific
contract, that requirement will be described in the "Specific Conditions" of the contract
specifications.
Page 16
ATTACHMENTI
Worker's Compensation Coverage for Building or Construction Projects for
Governmental Entities
A. Definitions:
Certificate of coverage ("certificate")-A copy of a certificate of insurance, a
certificate of authority to self-insure issued by the commission, or a coverage
agreement (TWCC-81, TWCC-82, TWCC-83, or TWCC-84), showing statutory
workers' compensation insurance coverage for the person's or entity's employees
providing services on a project, for the duration of the project.
Duration of the project - includes the time from the beginning of the work on the
project until the contractor's/person's work on the project has been completed and
accepted by the governmental entity-
Persons providing services on the project ("subcontractor" in §406.096) - includes all
persons or entities performing all or part of the services the contractor has
undertaken to perform on the project, regardless of whether that person contracted
directly with the contractor and regardless of whether that person has employees.
This includes, without limitation, independent contractors, subcontractors, leasing
companies, motor carriers, owner-operators, employees of any such entity, or
employees of any entity which furnishes persons to provide services on the project.
"Services" include, without limitation, providing, hauling, or delivering equipment or
materials, or providing labor, transportation, or other service related to a project.
"Services" does not include activities unrelated to the project, such as food/beverage
vendors, office supply deliveries, and delivery of portable toilets.
B. The contractor shall provide coverage, based on proper reporting of classification
codes and payroll amounts and filing of any overage agreements, which meets the
statutory requirements of Texas Labor Code, Section 401.011(44) for all employees
of the Contractor providing services on the project, for the duration of the project.
C. The Contractor must provide a certificate of coverage to the governmental entity prior
to being awarded the contract.
D. If the coverage period shown on the contractor's current certificate of coverage ends
during the duration of the project, the contractor must, prior to the end of the
coverage period, file a new certificate of coverage with the governmental entity
showing that coverage has been extended.
E. The contractor shall obtain from each person providing services on a project, and
provide to the governmental entity:
1) a certificate of coverage, prior to that person beginning work on the project, so the
governmental entity will have on file certificates of coverage showing coverage
for all persons providing services on the project; and
Page 17
2) no later than seven days after receipt by the contractor, a new certificate of
coverage showing extension of coverage, if the coverage period shown on the
current certificate of coverage ends during the duration of the project.
F. The contractor shall retain all required certificates of coverage for the duration of the
project and for one year thereafter.
G. The contractor shall notify the governmental entity in writing by certified mail or
personal delivery, within 10 days after the contractor knew or should have known, of
any change that materially affects the provision of coverage of any person providing
services on the project.
H. The contractor shall post on each project site a notice, in the text, form and manner
prescribed by the Texas Workers' Compensation Commission, informing all persons
providing services on the project that they are required to be covered, and stating how
a person may verify coverage and report lack of coverage.
I. The contractor shall contractually require each person with whom it contracts to
provide services on a project, to:
1) provide coverage, based on proper reporting of classification codes and payroll
amounts and filing of any coverage agreements, which meets the statutory
requirements of Texas Labor Code, Section 401.011(44) for all of its employees
providing services on the project, for the duration of the project;
2) provide to the contractor, prior to that person beginning work on the project, a
certificate of coverage showing that coverage is being provided for all employees
of the person providing services on the project, for the duration of the project;
3) provide the contractor, prior to the end of the coverage period, a new certificate of
coverage showing extension of coverage, if the coverage period shown on the
current certificate of coverage ends during the duration of the project;
4) obtain from each other person with whom it contracts, and provide to the
contractor:
a) certificate of coverage, prior to the other person beginning work on the
project; and
b) a new certificate of coverage showing extension of coverage, prior to the
end of the coverage period, if the coverage period shown on the current
certificate of coverage ends during the duration of the project;
5) retain all required certificates of coverage on file for the duration of the project
and for one year thereafter;
6) notify the governmental entity in writing by certified mail or personal delivery,
within 10 days after the person knew or should have known, of any change that
materially affects the provision of coverage of any person providing services on
the project; and
Page 18
7) contractually require each person with whom it contracts, to perform as required
by paragraphs (1) - (7), with the certificates of coverage to be provided to the
person for whom they are providing services.
3. By signing this contract or providing or causing to be provided a certificate of
coverage, the contractor is representing to the governmental entity that all employees
of the contractor who will provide services on the project will be covered by workers'
compensation coverage for the duration of the project, that the coverage will be based
on proper reporting of classification codes and payroll amounts, and that all coverage
agreements will be filed with the appropriate insurance carrier or, in the case of a self
insured, with the commission's Division of Self insurance Regulation. Providing
false or misleading information may subject the contractor to administrative penalties,
criminal penalties, civil penalties, or other civil actions.
K. The contractor's failure to comply with any of these provisions is a breach of contract
by the contractor which entitles the governmental entity to declare the contract void if
the contractor does not remedy the breach within ten days after receipt of notice of
breach from the governmental entity.
Page 19
CONFLICT OF INTEREST QUESTIONNAIRE
For vendor or other person doing business with local qc
FORM CI
This questionnaire reflects changes made to the law by H.B. 1491, 80th Leg., Regular Session.
I OFFICE USE ONLY
This questionnaire is being filed in accordance with chapter 176 of the Local Government Code by a Dare Received
person who has a business relationship as defined by Section 176.001(1-a) with a local
governmental entity and the person meets requirements under Section 176.006(a).
By law this questionnaire must be filed with the records administrator of the local government entity
not later than the 7th business day after the date the person becomes aware of facts that require the
statement to be filed. See Section 176.006, Local Government Code.
A person commits an offense if the person knowingly violates Section 176.006, Local Government
Code. An offense under this section is a Class C misdemeanor.
1 Name of person who has a business relationship with local governmental entity.
Douglas L. Varner, P.E.
❑ Check this box if you are filing an update to a previously filed questionnaire.
(The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7m business
day after the date the originally filed questionnaire becomes incomplete or inaccurate.)
Name of local government officer with whom filer has an employment or business relationship.
Katherine Barnett
Name of Officer
This section, (item 3 including subparts A, B, C & D), must be completed for each officer with whom the filer has an employment or other business
relationship as defined by Section 176.001(1-a), Local Government Code. Attach additional pages to this Form CIQ as necessary.
A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the
filer of the questionnaire?
0 Yes 0 No
B. Is the filer of the questionnaire receiving or likely to receive taxable income, other than investment income, from or at the direction of the
local government officer named in this section AND the taxable income is not received from the local governmental entity?
Q Yes 0 No
C. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer
serves as an officer or director, or holds an ownership of 10 percent or more?
0 Yes 0 No
D. Describe each affiliation or business relationship.
Si a of perso oing business with the governmental entity
November 1, 2010
Date
Adopted 0612912007
20
EXHIBIT A
Definitions
Project Team - Core City Sustainability staff to set the high level goals, lead the project's execution, and
coordinate with the CDM team on a regular basis (Staff members include Kenny Banks, Katherine
Barnett, and Victoria Venet).
Steering Committee - A select group of City staff representing key departments and government
functions that provide input on strategies / priorities for the Sustainability Plan.
Sustainability Partners an invited group of external stakeholders that will participate in three workshops
designed to help shape the Sustainability Plan by providing input on sustainability strategies 1 priorities,
and engaging their constituencies to participate in the development and implementation processes.
Regular Communications
It is assumed that throughout the project, the CDM team will organize regular conference calls
(anticipated to be weekly to start, bi-weekly after the first Workshop and Public Meeting) with the Project
Team as needed to ensure effective communication and progress updates. A communications protocol
will be established in the Kick-Off Meeting Summary Report deliverable from Task 1.
TASK 1 - PRELIMINARY PLANNING & KICK-OFF MEETING
This Task will include all work preliminary work leading up to the official kick-off meeting, the meeting and
the Summary Report.
Phase I Review: CDM will review the Phase I Sustainability Report, the Downtown Implementation Plan,
and the Greenhouse Gas Inventory Report and synthesize relevant data from the Phase I Report on
Denton's current sustainability status into a more useful format for future planning.
Sustainability Partners Identification and Invitations: CDM will work with the Project Team to identify
interests with a stake in the Sustainability Plan, potential Partner organizations that represent those
interests, then individual members to invite to participate in the Steering Committee and as Sustainability
Partners (Partners). CDM will work with the Project Team to prepare a list of potential candidates for
Council consideration, and then send letter invitations to the Kick-off Meeting and the Partners Workshop
respectively, following Council selection and approval.
Draft Vision Statement, Goals, and "Mission & Guidelines": CDM will work with the Project Team to
draft elements of a Vision Statement and identify top tier goals to discuss at the Kick-off Meeting with the
Steering Committee, as well as a "Mission & Guidelines" document to guide Partners through the
planning process: This document should explain what we are doing, why we need the partners help, the
role the partners will play in the development of the plan, the role we hope the partners will play in
continually supporting the plan during implementation, and our estimation of the time commitment that will
be needed from the Partners.
Draft Public Involvement Strategy: CDM will work with the Project Team to outline strategies and
expectations for public involvement in a Draft Public Involvement Strategy. This will identify key
organizations to assist with public participation and meeting attendance, any City staff resources and/or
communications policies, and a variety of media to use in engaging the public in the process.
Cm September 28, 2010 Page 11
Graphic Design & Brand Development: Based on this Draft Vision Statement, CDM will also develop
some graphic design concepts, expanding on the City's Sustainable Denton brand and review these with
the Project Team to determine a design aesthetic for the Sustainability initiative going forward. This brand
will be incorporated into all materials and outreach and help to establish a motivational message based
on the sustainability progress the City has already made and what it means to the average citizen.
Kickoff Meeting & Draft Stakeholder Survey: Finally, CDM will facilitate a discussion with the Steering
Committee to develop a draft project work plan and schedule and identify critical success factors through
a 2-3 hour, in person Kick-Off Meeting. In addition, CDM will work with the Steering Committee to develop
the stakeholder survey instrument described in Task 3.
Task 1 Deliverables: Kick-Off Meeting Summary Report, including Draft Project Work Plan,
schedule, critical success factors, a Draft Public Involvement Strategy, and a Draft Stakeholder
Survey. The Summary Report will also include the Draft Vision Statement and top level goals to be
vetted with the Partners at the 1"t workshop, and a "Sustainable Denton" graphic design concept
for materials and outreach. A list of Sustainability Partners, letter invitations to those individuals,
and a "Mission & Guidelines" document will also be delivered to outline the Partners role in the
process.
TASK 2 - SUSTAINABILITY PARTNERS WORKSHOPS
CDM will organize and facilitate two (2) Workshops for the Sustainability Partners Workshops (2-3 hour in
person meetings with the consulting team and the Project Team). The purpose of Partners Workshop 1
will be to present the "Mission & Guidelines" and to discuss the Partners' mission in the Plan development
and implementation, the purpose of the project, a Sustainable Denton vision statement, and gather initial
input from Partners for the Sustainability Plan. The survey instrument described in Task 3 will be
administered in Workshop 1 as well.
At the Partners Workshop 2 the consulting team will present the Draft Sustainability Plan and gather
feedback on the strategies and implementation plan, prior to a public comment period.
Task 2 Deliverable: Sustainability Partners Workshop Agendas, presentation materials, and
Summary Reports (2)
TASK 3 - DISTRIBUTE SURVEY & ANALYZE AND REPORT SURVEY RESULTS
CDM will work with the Project Team to finalize a Sustainability Survey to gather input from the Partners
and the public. The purpose of the survey will be twofold: to solicit ideas of sustainability strategies to
consider in the Plan, and to gather input on how to prioritize those strategies down to a manageable
number (20-30) to facilitate implementation and desirable outcomes. CDM will distribute the Survey
electronically and on paper at the Partners Workshop 1 and Public Meetings (see Task 4), analyze data
and summarize results in a brief report. The electronic survey should also be accessible through the
City's Sustainability website. Survey results can also be summarized on the City's website from the
Report deliverable.
Task 3 Deliverable: Sustainability Survey Results Report - to be included as an Appendix to the
Sustainability Plan.
TASK 4 - PUBLIC MEETINGS
CDM will work with the Project Team, the Steering Committee, the Partners and elected officials to
organize and facilitate two (2) public meetings. Ideally, the Mayor and/or a City Council member will be in
attendance and present opening remarks to demonstrate the City's high level commitment to the project.
CDM will organize and execute outreach to key individuals and organizations to facilitate active and
cm September 28, 2010 P a g e 12
diverse participation in the public meetings. The Public Involvement Strategy will be developed as part of
Task 1 and will remain flexible so as to be able to respond to successful methods for encouraging
participation - some methods for encouraging participation include flyers, in person
meetings/announcements to key organizations, email list-serves, organizational newsletters and other
regular publications, web-page announcements, DTV, and perhaps also through social media such as
Facebook.
These two meetings will occur the same week in different venues (to be determined) to provide an
overview of the project purpose and schedule, present the Vision Statement and Goals, and invite ideas
and input for the Sustainability Plan in terms of specific strategies and priorities. This may be
accomplished through 3-4 smaller breakout sessions by topic. The paper survey will be available for the
Public Meetings as well. CDM will compile the results of the public meetings into a Public Participation
report to be included in the Sustainability Plan.
The City will publish the information presented at the meetings and any photographs on the City's
Sustainability website. CDM will provide content for the website. The City is responsible for website
programming, design, updating, and hosting.
Task 4 Deliverable: Public Participation Report - a summary of public input received and how it
will be incorporated into the planning process, to be included as an Appendix to the Sustainability
Plan.
TASK 5 - SWOT MEETING
CDM will compile and consolidate the sustainability strategy ideas collected through public meetings,
survey, Kickoff Meeting, Partners Workshops, and other venues into one list of potential strategies for
inclusion in the Plan.
CDM will develop a Prioritization Framework with the project Team and the results of the survey
instrument to assist in ranking the proposed strategies according to a number of prioritization criteria as
identified through the Framework development. Some of these criteria will likely include return on
investment, triple bottom line, and any other key factors such as resources available and emissions
reduction potential. The consulting team, working with the Project Team, will utilize the criteria and a
simple, qualitative scoring system to apply the prioritization framework to the proposed strategies. The
outcome will be a numerical score assigned to each proposed strategy to help rank strategies according
to the framework criteria. This numerical score is not the final answer, as other political priorities may
arise - rather, it provides a backdrop to facilitate decision-malting. This will be accomplished through
conference calls and e-mail exchanges and one formal meeting.
This list of prioritized strategies will form the basis of the SWOT meeting. Steering Committee and
Partners members will be invited to the SWOT meeting to discuss the top strategies from the prioritization
framework, to identify any critical gaps or challenges, and to identify key performance metrics and
implementation actions.
Task 5 Deliverable. A prioritized list of strategies consolidated from the public process and one
meeting with the Project Team to finalize that list. One SWOT meeting with the Project Team,
Steering Committee and Partners and a Summary Report.
TASK 6 - DRAFT SUSTAINABILITY PLAN
Prior to Draft Sustainability Plan development, CDM will present an update on progress to date to the
Committee on the Environment (COE) to gather initial input and guidance. CDM will present draft
prioritized list of strategies, key performance metrics and implementation actions to the COE for input and
feedback.
CDM September 28, 2010 P a g e 13
CDM will develop the Draft Sustainability Plan based on the Vision for a Sustainable Denton, the top level
sustainability goals, and a targeted number of sustainability strategies (20-30).
The plan will identify strategies for meeting sustainability goals and metrics for measuring progress,
including policies, projects and program development. The draft plan will also layout a short-term
implementation plan for 3-5 years, to be accompanied by an implementation and communications tool as
identified in Task 7. The plan will also accommodate goals and strategies - in less detail - that may be
more appropriate for longer-term consideration.
Before the Draft Plan is opened up to public review (CDM suggests a 30 day comment period) CDM will
assist the Project Team in presenting the Draft Plan to the Partners and the Steering Committee, and in
presenting the Draft Plan to the City Council.
Task 6 Deliverable: COE presentation prior to Draft development. Draft Sustainabillty Plan in
electronic format for review. Presentations to Partners (see Task 2 - Workshop 2), the Steering
Committee and the City Council prior to public comment period.
TASK 7 - DRAFT IMPLEMENTATION & COMMUNICATION TOOL
Concurrent with the review period for the Draft Sustainability Plan, CDM will work with the Project Team
to develop a draft data management tool for tracking progress and communicating results. This web-
based tool will provide data management capabilities to track progress and metrics, and will include
dashboard and reporting functions to visually communicate results both internally and externally. The
following provides a description of the major functions of the proposed tracking system. CDM will work
with the Steering Committee to refine the purpose and functions of the tool at the Kick-off Meeting and
following review of the Draft Sustainability Plan. The Prioritization Framework as developed in Task 5
above will also serve to guide the development of metrics or "key performance indicators" (KPI's) for
tracking and dashboard management.
Management Dashboard - Information Portals and Dashboards typically provide a mechanism to
integrate data from existing information systems and deliver "management at a glance" - visualization of
KPI's and trends that support decision-making. The Dashboard aids stakeholders at multiple levels in
recognizing and responding to business events, project status, and progress towards critical goals. The
tool will include a management dashboard that presents a high-level summary of data from the system.
For example, the dashboard will present summaries of strategy progress to date reported across relevant
project dimensions such as by City department or by high-level goals.
Operational Data Component - The data presented in the tool will be managed via an operational data
component which will be available to appropriate stakeholders to add, edit and delete project tracking
data. Examples of the type of data tracked in the system may include water consumed at public facilities,
or vehicle miles traveled by City staff. The intent is to utilize data that are already readily available to City
staff to minimize data collection and quality management requirements. CDM will work with the Project
Team to identify KPI's that represent the goals of the project, but that also facilitate measurement and
verification.
Reporting - The tool will also include reporting functionality that provides the ability to export tool
information to Word, Excel or PDF. A "progress report" functionality will be developed to allow the users
to report out to upper management as well as elected officials.
Sign-On - The tool will include a sign-on component to manage users by role, such as by City
department. The system can include a "general public" non-credentialed user, if public access is needed.
Public Website - CDM will also provide a template and design assistance to create a Sustainable
Denton Scorecard for the public website to showcase progress and increase engagement. The scorecard
will be created externally as a PDF or other stand alone document and posted to the website by the City.
cm September 28, 2010 Page 14
Task 7 Deliverable: Draft Data Tracking & Implementation Tool (containing all of the elements
outlined within this task) for Project Team Review and Testing.
TASK 8 - FINAL PLAN & IMPLEMENTATION AND COMMUNICATIONS TOOL
Following Steering and Stakeholder Committee review of Task 5 and 6 deliverables, and a public
comment period, CDM will finalize the Sustainability Plan and Data Tracking & Implementation Tool. CDM
will work with the Project Team, Steering committee, and Partners to organize a multi-media, multi-
organizational launch of the Sustainability Plan, and determine a feasible strategy for ongoing
collaboration between the City and the Partners.
Task 8 Deliverables: Final Sustainability Plan (electronic format); Data Tracking & Implementation
Tool (web-based); and a Presentation (powerpoint) summarizing the Sustainability Plan and
ongoing implementation for City communications purposes. CDM will also present the Final Plan
to City Council.
com September 28, 2010 P a g e 15
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This page left blank intentionally .
AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010 Questions concerning this
acquisition may be directed
DEPARTMENT: Materials Management to Mike Ellis, 349-8424.
ACM: Jon Fortune
SUBJECT
Consider adoption of an ordinance approving the expenditure of funds for the purchase of
software and hardware for the E.J. Ward Automated Fuel Management System to be installed at
the Fuel Island and Trick Wash Facility at the City of Denton Landfill available from only one
source in accordance with the provision for State Law exempting such purchases from
requirements of competitive bids; providing for the expenditure of funds therefor; and providing
an effective date (File 4610-Purchase of Software/Hardware for Fuel Management System to E.J.
Ward, Inc. in the amount of $68,429).
BID INFORMATION
Fleet Management utilizes E.J.Ward Fuel Management software and hardware to manage the use
of fuel per piece of equipment throughout the City's departments. We currently have this
installed at the Service Center Fuel Island. However, with the constriction of the Fuel Island
and Trick Wash Facility at the Solid Waste Landfill, Fleet Services must install new software
and hardware at the new site. The software being used at the current Landfill fuel site is
outdated and requires manual downloads in various weather conditions. The new software and
hardware will be completely automated and used at the fuel island to charge departments for
usage per piece of equipment. The E.J. Ward Fuel Management system will be updated several
times on a daily basis through transmissions from the Fuel Island and Trick Wash Facility.
Fleet Services desires to continue using the E.J.Ward Fuel Management system as it records fuel
usage per vehicle or equipment, records high speed incidents, accurate mileage reporting in
which will be helpful in calculating the carbon footprint for each piece of equipment, and other
details by unit. This fuel management system is integrated with the Fleet Management software
called FASTER, which is currently being used to monitor equipment costs, maintenance and
repair costs, age, and to calculate replacement schedules.
The continued progress of this Fuel Island and Trick Wash Facility project depends upon the
purchase of this software and hardware from E.J.Ward, Inc. Please note that the delay of this
project could cost the City of Denton in daily charges by the constriction company.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
Public Utilities Board recommended approval of the Fuel Island and Trick Wash Facility project
on October 12, 2009.
Agenda Information Sheet
November 16, 2010
Page 2
City Council approved the constriction of the Fuel Island and Trick Wash Facility on December
1, 2009.
RECOMMENDATION
Approve the award to E.J.Ward, Inc., in the amount of $68,429 for the purchase of software and
hardware for the E.J. Ward Automated Fuel Management System to be installed at the Fuel
Island and Trick Wash Facility.
PRINCIPAL PLACE OF BUSINESS
E.J. Ward, Inc.
San Antonio, TX
ESTIMATED SCHEDULE OF PROJECT
The purchase and delivery will begin upon Council approval and is estimated to be completed
within 30 days after the signing of the contract.
FISCAL INFORMATION
This item will be funded from account 660051591.1365.30100 - Solid Waste Trick Wash
Facility in the amount of $12,475. Requisition 100975 in the amount of $5,000 has been entered
in the Purchasing software system for the hardware. Requisition 100996 in the amount of $7,475
has been entered for the software portion.
This item will also be funded from account 820100.6512 - Fleet Services Fuel Island in the
amount of $55,954. Requisition 100994 in the amount of $44,779 has been entered in the
Purchasing software system for the hardware. Requisition 100995 in the amount of $11,175 has
been entered for the software portion.
EXHIBITS
Exhibit 1: E.J.Ward, Inc., Price Quotation
Exhibit 2: E.J.Ward, Inc., Sole Source Letter
Respectfully submitted:
.J
Antonio Puente, 349-7283
Assistant Director of Finance
I AIS-File 4610
Exhibit 1
Terry Kader October 27, 2010
City of Denton
Denton Texas
RE: Price Quote - F.J. Ward Automated Fuel Management System
F.J. Ward, Inc. (Ward) is pleased to submit this Price quote to City of Denton, as you know Ward has led
the industry for more than 36 years in developing the most advanced fuel management technology. As
the leading fuel management solutions provider, Ward brings a new level of product reliability, technical
support, and integrated systems solutions unmatched in today's industry. This proposal reflects our
comprehensive expertise in providing City of Denton the most innovative and advanced fuel management
technology available.
As you learned, our advanced systems represent the industry's most reliable technology and are
designed to meet your current needs while offering the greatest flexibility to expand with your future
requirements. Our solutions provide the most robust foundation for future fleet technology expansion with
minimal cost. This scalable system approach is unique and is what distinguishes Ward as the "Lowest
Total Cost of Ownership" supplier from other fuel management system manufactures.
Please review the attachments and do not hesitate to call for clarifications as the need may arise.
In summary E.J. Ward will provide:
Proven Exveriwce
- Leader in fuel management in the U.S.
- 1,000's of fuel management
implementations
- 35 years fuel management expertise
d" i
Regional based technical support team
24 hour customer/technical support
- Dedicated project manager
Compri pensive training program
Thank you in advance,
City of Denton
Fuel t System
Addition
$49,779.00
Lee Christensen - Western Regional Sales Manager
8801 Tradeway San Antonio, TX 78217
leechris@_eiward.com ( San Antonio Office- 210.824.7383 1 Mobile- 210.601.4436 ( Fax 210.824.2031
8801 Tradeway • San Antonio, Texas 78217 P 210.8243383 • F 210.824.2031 ® www.ejward.com
PRICING and NOTES CONFIDENTIAL AND PROPRIETARY INTENDED jR CITY OF DENTON USE ONLY
DF ! r ON C/ H D FUEL ST T")N
Ward Car Wash Control Terminal (FCT-XT) -FCT XT -1 1 $5,000.00 $5,000.00
Car Nash Control
Wgstripe Reader- Alpha-Numeric Keypad - VIT and CANceiver Ready
TCP/IP LAN Card
Ward Fuel Control Terminal (FCT- XT) - Pedestal Mount Kit
3
$650.00
$1,950.00
Ward Fuel Control Terminal (FCT-RT) - FCT-RT- 1-5 Hose
3
$6,000.00
$18,000.00
Hose count_2-4's__ and 1-for bulk 1 hose
Nlagstripe Reader, - Alpha-Numeric Keypad -VIT and CANceiver Ready
TCP/IP LAN Card,
Veeder Root TLS-350 with Printer, Probe Interface Board, Four relay output Board,
1
$6,930.00
$6,930.00
8 Input Interstitial Board, and Network Board
Veeder Root Probes with Floats and Cap and ring (Lot)
1
$6,804.00
$6,804.00
Veeder Root Leak Detection K/lonitors (Lot)
1
$5,695.00
$5,695.00
Dispenser SP1 Pulser with Installation
8
$275.00
$2,200.00
Hose Wdule Kit
8
$300.00
$2,400.00
Freight (estimated)
1
$
800.00
$800.00
M
Total
$49,779.001
8801 Tradeway • San Antonia, Texas 78217 P 210.824.7383 ® F 210.824.2031 • www.ejward.co
NOTES:
Ward Fuel View Whin Client pricing assumes City of Denton will provide Microsoft SQL Server 2000,
2003 or 2008 or newer database license and backup software. SQL Server 7.0 or SQL Lite not
supported. Customer will provide Adobe JRUN unless noted in the quotation.
4. Final Wiring, System Startup, Testing and Hardware Training
8801 Tradeway • San Antonio, Texas 78217 P 210.824.7383 • F 210.824.2031 • www.ejward.com
5. A System Maintenance Contract is available.
i. Contract factory within 60 days of warranty expiration or sooner to review options
Hardware and software labor rates - Standard work week - Monday - Friday, 8 - 5p.rn
Current Standard "Preferred" rates for the uroose of this agreement are defined as.
7. Custom Reports and Software Changes
i. A minium charge will be assessed for all custom reports, report modifications, and
changes to the Ward software systems.
ii. Charges above the minium will be billed at the standard software hourly rate or a rate set
by Ward based on the complexity of the request.
8. The pricing in this quotation does not include any applicable tax, permits, or fees and is valid for
sixty (60) days from its receipt.
9. Contractors must possess a valid reseller certificate where applicable.
i. Ward will not ship materials without a valid certificate; this will cause a signiviant
delay in quoted lead times.
8801 Tradeway • San Antonio, Texas 78217 P 210.824.7383 • F 210.824.2031 • www.ejward.com
Terry Kader October 27, 2010
City of Denton
Denton Texas
RE: Price Quote - E.J. Ward Automated Fuel Management System
E.J. Ward, Inc. (Ward) is pleased to submit this Price quote to City of Denton, as you know Ward has led
the industry for more than 36 years in developing the most advanced fuel management technology. As
the leading fuel management solutions provider, Ward brings a new level of product reliability, technical
support, and integrated systems solutions unmatched in today's industry. This proposal reflects our
comprehensive expertise in providing City of Denton the most innovative and advanced fuel management
technology available.
As you learned, our advanced systems represent the industry's most reliable technology and are
designed to meet your current needs while offering the greatest flexibility to expand with your future
requirements. Our solutions provide the most robust foundation for future fleet technology expansion with
minimal cost. This scalable system approach is unique and is what distinguishes Ward as the "Lowest
Total Cost of Ownership" supplier from other fuel management system manufactures.
Please review the attachments and do not hesitate to call for clarifications as the need may arise.
in summary E.J. Ward will provide:
ProvegYAqgn6gq0
- Leader in fuel management in the U.S.
- 1,000's of fuel management
implementations
- 35 years fuel management expertise
- Regional based technical support team
- 24 hour customer/technical support
- Dedicated project manager
- Comprehensive training program
Thank you in advance,
e Sol J
Completely Integrated Systems:
o Fuel Management
o GPS
o Tire Pressure Management
The industries only integrated provider
i of Denton
Fuel Management System
Addition
$18,650.00
Lee Christensen -Western Regional Sales Manager
8801 Tradeway O San Antonio, TX • 78217
leechris apeiward.com I San Antonio Office- 210.824.7383 1 Mobile- 210.601.4436 1 Fax 210.824.2031
8801 Tradeway • San Antonio, Texas 78217 P 210.824.7383 • F 210.824.2031 • www.ejward.com
PRICING and NOTES CONFIDENTIAL AND PROPRIETARY INTENDED FUR CITY OF DENTON USE ONLY
DE TON C I I D FUEL STATION
1 $3,500.00 $3,500.001
1
$1,500.00
$1,500.00
1
$750.00
$750.00
-1
--i6,150.00
$6,150.00
5
$1,350.00
$6,750.00
Total $18,650.01
8801 Tradeway • San Antonio, Texas 78217 P 210.824.7383 • F 210.824.2031 • www.ejward.co
TES:
Ward Fuel View Thin Client pricing assumes City of Denton will provide Microsoft SQL Server 2000,
2003 or 2008 or newer database license and backup software. SQL Server 7.0 or SQL Lite not
supported. Customer will provide Adobe JRUN unless noted in the quotation.
8801 Tradeway • San Antonio, Texas 78217 P 210.824.7383 • F 210.824.2031 • www.ejward.com
5. A System Maintenance Contract is available
9. Contractors u ~se~s a v li reveller i irate here lice le.
i. Ward will not ship materials without a valid certificate; this will cause a signiviant
delay in quoted lead times.
8801 Tradeway • San Antonio, Texas 78217 P 210.824.7383 • F 210.824.2031 • www.ejward.com
EJ WARD COST FOR CAR WASH & FUEL STATION
Hardware
DESCRIPTION
CITY
SW
FLT
Total
Ward Car Wash Control Terminal (FCT-XT)
1
$ 5,000.00
$ 5,000.00
Ward Fuel Control Terminal (FCT-XT) Pedestal Mount Kit
3
$ 1,950.00
$ 1,950.00
Wad Fuel Control Terminal (FCT-RT)
3
$ 18,000.00
$ 18,000.00
Veeder Root TLS-350
1
$ 6,930.00
$ 6,930.00
Veeder Root Probes w/ Floats & Cap & Ring
1
$ 6,804.00
$ 6,804.00
Veeder Root Leak Detection Monitors (lot)
1
$ 5,695.00
$ 5,695.00
Dispenser SP1 Pulser w/ Installation
8
$ 2,200.00
$ 2,200.00
Hose Module Kit
8
$ 2,400.00
$ 2,400.00
Freight (estimated)
1
$ 800.00
$ 800.00
Total by Fund
$ 5,000.00
$ 44,779.00
$ 49,779.00
EJ WARD COST FOR CAR WASH & FUEL STATION
SOFTWARE
DESCRIPTION
CITY
SW
FLT
Total
Software Support for Car Wash Terminal
Project Management
TLS Probe Installation
Electrical Installation (1/4 SW; 3/4 Fleet)
EJ Ward Final Wiring, System Start up, Testing (1/4 SW; 3/4 Flt)
1
1
1
1
5
$ 3,500.00
$ 750.00
$ 1,537.50
$ 1,687.50
750
$ 750.00
$ 4,612.50
$ 5,062.50
$ 3,500.00
$ 1,500.00
$ 750.00
$ 6,150.00
$ 6,750.00
Total by Fund
$ 7,475.00
$ 11,175.00
$ 18,650.00
GRAND TOTAL OF PROJECT
$ 12,475.00
$ 55,954.00
$ 68,429.00
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Exhibit 2
TP5
8801 Tradeway
San Antonio, TX 78217
October 20, 2010
Robyn Forsyth
Fleet Management Department
City of Denton
215 East McKinney Street
Denton, Texas 76201
Dear Ms. Forsyth
For more than 36 years EJ Ward Inc. has developed the most advanced fuel management
technology and became a leading fleet asset management solutions provider. Ward's solutions
offer a new level of product reliability, technical support, and integrated systems unmatched in
today's industry. This comprehensive expertise will be leveraged in providing the City of Denton
with the most innovative and advanced fuel management technology available.
EJ Ward Inc. (Ward) is the original equipment manufacturer (OEM) of the Ward Fuel View
Automated Fuel Management System (AFMSTM) and the Ward Fleet View Asset Tracking System
(ATSTM)
EJ Ward, Inc. owns the intellectual property rights to its Automated Fuel Management System
(AFMS), Telematics GPS /AVL system, Related Software Programs, Communication Systems
and Documentation.
E.J. Ward, Inc. is the sole supplier and support agent direct or through its authorized agents of its
fuel control terminals and all internal components, including but not limited to mother boards,
communications controllers, EPROMS / firmware and related software programs and
documentation utilized in the Automated Fuel Management System (AFMS), Telematics GPS
/AVL systems.
At this time, Ward has not certified any other fuel management technology, vehicle installed
devices or global positioning system's (GPS) based tracking devices other than those
offered directly by Ward to be installed in conjunction with or plugged into the vehicle Engine
Control Module (ECM) port (e.g. OBD II etc.) in parallel with the Ward CANceiverTM. Only the
Ward supplied devices are certified to operate simultaneously with the Ward fuel management
system or its CANceiverTM while plugged into the vehicle ECM. Installing non-certified devices
may affect operations of the Ward AFMS, the CANceiverTM, as well as potential vehicle
functionality.
If you have any questions, please don't hesitate to give me a call
Regards,
Robert E. Kettyle - Director of Sales
8801 Tradeway • San Antonio, TX • 78217
rkettyle( eiward.com I San Antonio Office 210.824.7383 1 Mobile 713.806.3711
1 Web Fax 281.754.4842 1 Office Fax 210.824.2031
ORDINANCE NO.
AN ORDINANCE APPROVING THE EXPENDITURE OF FUNDS FOR THE
PURCHASE OF SOFTWARE AND HARDWARE FOR THE E.J. WARD
AUTOMATED FUEL MANAGEMENT SYSTEM TO BE INSTALLED AT THE
FUEL ISLAND AND TRUCK WASH FACILITY AT THE CITY OF DENTON
LANDFILL AVAILABLE FROM ONLY ONE SOURCE IN ACCORDANCE WITH
THE PROVISION FOR STATE LAW EXEMPTING SUCH PURCHASES FROM
REQUIREMENTS OF COMPETITIVE BIDS; PROVIDING FOR THE
EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE
(FILE 4610-PURCHASE OF SOFTWAREMARDWARE FOR FUEL MANAGEMENT
SYSTEM TO E.J. WARD, INC., IN THE AMOUNT OF $68,429).
WHEREAS, Section 252.022 of the Local Government Code provides that
procurement of items that are only available from one source, including; items that are
only available from one source because of patents, copyrights, secret processes or natural
monopolies; films, manuscripts or books; electricity, gas, water and other utility
purchases; captive replacement parts or components for equipment; and library materials
for a public library that are available only from the persons holding exclusive distribution
rights to the materials; and need not be submitted to competitive bids; and
WHEREAS, the City Council wishes to procure one or more of the items
mentioned in the above paragraph; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The following purchase of materials, equipment or supplies, as
described in the "File" listed hereon, and on file in the office of the Purchasing Agent,
and the license terms attached are hereby approved:
FILE
NUMBER VENDOR AMOUNT
4610 E.J. Ward, Inc. $68,429.00
SECTION 2. The City Council hereby finds that this bid, and the award thereof,
constitutes a procurement of items that are available from only one source, including,
items that are only available from one source because of patents, copyrights, secret
processes or natural monopolies; films, manuscripts or books; electricity, gas, water and
other utility purchases; captive replacement parts or components for equipment; and
library materials for a public library that are available only from the persons holding
exclusive distribution rights to the materials; and need not be submitted to competitive
bids.
SECTION I The acceptance and approval of the above items shall not
constitute a contract between the City and the person submitting the quotation for such
items until such person shall comply with all requirements specified by the Purchasing
Department.
SECTION 4. The City Manager is hereby authorized to execute any contracts
relating to the items specified in Section 1 and the expenditure of funds pursuant to said
contracts is hereby authorized.
SECTION 5. This ordinance shall become effective immediately upon its
passage and approval.
PASSED AND APPROVED this the day of 12010.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
4-ORD-File 4610
This page left blank intentionally .
AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010
DEPARTMENT: Finance
ACM: Jon Fortune
SUBJECT
Consider adoption of an ordinance waiving the City of Denton allocation of Recovery Zone
Bonds; designating Fort Bend County as the designee; and declaring an effective date.
BACKGROUND
Pursuant to the American Recovery and Reinvestment Act (ARRA) of 2009, a new bond
program was created for certain counties and large municipalities. Under this new program,
Recovery Zone Bonds can be issued for qualified economic development or business purposes
in areas formally designated as a recovery zone. The purpose of the program is to provide the
issuer with an opportunity to reduce interest costs on eligible projects by utilizing a federal
subsidy.
There are two types of Recovery Zone Bonds: (1) Recovery Zone Economic Development
Bonds are a type of taxable Build America Bonds that allow state and local governments to
obtain lower borrowing costs by receiving a direct federal payment subsidy, for 45 percent of
the interest, to finance a broad range of qualified economic development projects, such as job
training and educational programs; (2) Recovery Zone Facility Bonds are a type of traditional
tax-exempt private activity bond that may be used by private businesses in designated recovery
zones to finance a broad range of depreciable capital projects. The ARRA authorizes the
issuance of Recovery Zone Bonds on or before January 1, 2011, after which the authorization
will expire unless extended by Congress.
The City of Denton was awarded an allocation of $1,657,000 in Recovery Zone Economic
Development Bonds and $2,488,000 in Recovery Zone Facility Bonds. After consultation with
the City's financial advisor and bond counsel, staff has concluded that the City's Recovery Zone
Bond allocation is too small to be of any use to the City. In addition, the City does not have an
eligible planned project for which these bond proceeds can be applied. Further, since these
bonds must be issued by the end of the year, there is insufficient time for the City to close on
any such bond sale.
The Texas Bond Review Board has established a voluntary program for the reallocation of
Recovery Zone Bonds that are waived by their initial recipients. Recovery Zone Bonds can be
waived entirely by the recipient, or they may be designated to another entity. While no other
entity in the immediate area has requested a designation, Fort Bend County (see exhibit 1) has
requested the City of Denton's allocation. Since staff can identify no other purpose for the
Recovery Zone Bond allocation, we recommend that the City of Denton's entire allocation be
designated to Fort Bend County.
Agenda Information Sheet
November 16, 2010
Page 2
EXHIBITS
City of Sugar Land, Ft. Bend County Letter
Ordinance
Respectfully submitted:
Bryan Langley
Chief Financial Officer
CITY SUGAR LAND
OFFICE OF MAYOR
JAMES A. THOMPSON
October 27, 2010
Mayor Mark A. Burroughs
City of Denton.
215 E. McKinney Street
Denton, TX 76201
Re: Recovery Zone Facility Bond Waiver Request
Dear Mayor Burroughs:
As you may be aware, your city received an initial allocation for Recovery Zone Facility Bonds, a type of
tax-exempt private activity bond created by the American Recovery and Reinvestment Act, passed by
Congress in February 2009. Unused Recovery Zone Facility Bond allocations are now in the process of
being made available to cities and counties which did not receive an initial allocation under the program
but have eligible projects. These bonds must be issued prior to January 1, 2011, after which point the
funds will disappear. At this late stage, cities which have not already applied with eligible projects would
most likely not meet this deadline due to the length of the application process. Based on the fact.that your
city's initial Recovery Zone Facility Bond allocation has not been utilized and there are no pending
applications on file with the State, we respectfully request that your City waive its Recovery Zone Facility
Bond allocations to allow the opportunity for other Texas communities to benefit from the program.
A project located in our County, Fort Bend, is one such project that has applied for the Recovery Zone
Facility Bonds under the reallocation process. As such, we are respectfully requesting that our fellow
municipalities with available, unused Recovery Zone Facility Bond funds waive and designate that
allocation directly to Fort Bend County. This can be done by action of your governing body and
completion of the attached waiver and designation form. Otherwise, unutilized funds will be dissolved.
More information on the Recovery Zone Bonds and the reallocation process is available on the Texas
Bond Review Board RZFB webpage: http://www.brb.state.tx.us/RZBs/RZBs.aspx
Please do not hesitate to contact Regina Morales with any questions at 281-275-2229. We request
that you notify us via return e-mail (ecodev@sugarlandtx.gov) if you will agree to waive or
designate your funds. Thank you for your consideration.
Sincerely,
A. Thompson
Recovery Zone Facility Bond Waiver Forms
2700 TOWN CENTER BLVD NORTH • P.O. BOX 110 • SUGAR LAND TX 77487-0110 •281/275-2710 • FAx 281/275-2721
s:Aegahour documentslordinances\10\recoveryzonebonds.doc
ORDINANCE NO.
AN ORDINANCE WAIVING THE CITY OF DENTON ALLOCATION OF RECOVERY
ZONE BONDS; DESIGNATING FORT BEND COUNTY AS THE DESIGNEE; AND
DECLARING AN EFFECTIVE DATE.
WHEREAS, pursuant to Section 1401 of the American Recovery and Reinvestment Act
of 2009 (ARRA) and Section 6.04 of Internal revenue Service Notice 2009-50, the City of
Denton has been allocated volume cap authority to issue Recovery Zone Bonds (RZBs); and
WHEREAS, the RZB allocations consist of authority to issue Recovery Zone Economic
Developments Bonds (RZEDBs) and Recovery Zone Facility Bonds (RZFBs); and
WHEREAS, the Governor of the State of Texas has established a voluntary program,
which shall expire on January 1, 2011, for the reallocation by the State of Texas of RAEDB and
RZFB volume cap allocations and has directed the Texas Bond Review Board (BRB) to
administer the program; and
WHEREAS, local governments electing to waive RZB allocations may, at their option,
express a preference that waived allocations be reallocated by the State of Texas to a designated
local government and project use (Designee); and
WHEREAS, the City Council hereby finds that the allocation to the City of Denton is too
small to be of use to the City, and
WHEREAS, the City of Sugarland, Texas has requested the City of Denton to waive its
RZB allocation in favor of Fort Bend County, Texas; and
WHEREAS, the City Council hereby finds that it is in the best interest of the City to
waive its RZB allocation in favor of Fort Bend County, Texas; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The City of Denton allocation of Recovery Zone Bonds (RZBs) is hereby
waived.
SECTION 2. Fort Bend County, Texas is hereby designated as the Designee for the City
of Denton's allocation of Recovery Zone Bonds (RZBs).
SECTION 3. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of 2010.
MARK A. BURROUGHS, MAYOR
sAlegaAour documents)ordinances1101recoverymnebonds.doc
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
BY:
This page left blank intentionally .
AGENDA INFORMATION SHEET
AGENDA DATE: November 16, 2010
DEPARTMENT: City Manager's Office
CMM: George Campbell
SUBJECT
Consider adoption of an ordinance of the city of Denton, Texas, establishing the new Public,
Education and Government (PEG) subscriber fee rate as one percent of the cable providers' gross
revenue; authorizing and directing the City Manager or his designee to execute a letter to all
Denton cable providers; and declaring an effective date.
BACKGROUND
The City's local franchise agreement with Charter Communications expires on January 1, 2011.
Pursuant to Section 66.006 of the Texas Utility Code in regards to Public, Education, and
Government (PEG) subscriber fees, "On the expiration of the incumbent cable service provider's
agreement, the holder of a state-issued certificate of franchise authority shall pay a municipality
in which it is offering cable service or video service 1 percent of the provider's gross revenues, or
at the municipality's election, the per subscriber fee that was paid to the municipality under the
expired incumbent cable service provider's agreement."
FILE INFORMATION
During this transition from local franchise to state franchise, the City has a one-time opportunity
to change the PEG subscriber fee collected by all cable providers. Pursuant to City of Denton
Ordinance 2004-181 and pursuant to section 66.009 of the Texas Utility Code, all cable
providers within the Denton city limits are required to collect a PEG fee from every cable
subscriber. Our PEG fee is $0.50 per subscriber, per month and remitted to the City on a
quarterly basis. The FCC restricts the use of this PEG fee, allowing the funds only to be used to
acquire additional PEG production equipment, capital, and other lawful PEG purposes.
An analysis of the last four quarterly PEG fee payments at the current $0.50 per subscriber
resulted in fees totaling $154,913. Changing the fee to one percent of gross revenues would
produce a comparable $248,537. The PEG fee election authorized by the City Council must be
conveyed to the cable providers in a timely fashion to allow the collection of the fee to begin on
January 1, 2011, which is the expiration date of Charter Communications local franchise
agreement.
RECOMMENDATION
Staff recommends the City elect to change the Public, Education, and Government (PEG)
subscriber fee, from $0.50 per subscriber, per month, to one percent of the gross revenue of the
cable provider effective January 1, 2011.
FISCAL INFORMATION
The City asks that PEG fee payments continue to be made quarterly, so as to remain consistent
with the other cable system payments in Denton. The payment shall be made to the City no later
than 45 days after the expiration of the date for which payment is due. A complete and accurate
verified statement of the total cable subscriber count during the period for which the quarterly
payment is made must accompany each payment.
Respectfully submitted:
4z2j~ z4L~
Betty Williams
Director of Administrative Services
Prepared by:
MM41192
Billy Matthews
Cable Television Supervisor
lk~
salegallour docurnentslordinances%10\peg subscriber fee ord.docx
ORDINANCE NO.
AN ORDINANCE OF THE CITY OF DENTON, TEXAS, ESTABLISHING THE NEW
PUBLIC, EDUCATION AND GOVERNMENT (PEG) SUBSCRIBER FEE RATE AS ONE
PERCENT OF THE CABLE PROVIDERS' GROSS REVENUE; AUTHORIZING AND
DIRECTING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE A LETTER TO
ALL DENTON CABLE PROVIDERS; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, pursuant to section 66.006 of the Texas Utility Code in regards to Public,
Education, and Government (PEG) subscriber fees, "On the expiration of the incumbent cable
service provider's agreement, the holder of a state-issued certificate of franchise authority shall
pay a municipality in which it is offering cable service or video service one percent (1%) of the
providers' gross revenues, or at the municipality's election, the per subscriber fee that was paid to
the municipality under the expired incumbent cable service provider's agreement;" and
WHEREAS, during this transition from local franchise to state franchise, the City has a
one-time opportunity to change the PEG subscriber fee collected by all cable providers; and
WHEREAS, pursuant to City of Denton Ordinance 2004-181 and pursuant to section
66.009 of the Texas Utility Code, all cable providers within the Denton city limits are required to
collect a PEG fee from every cable subscriber; and
WHEREAS, the City's PEG fee is $0.50 per subscriber, per month and remitted to the
City on a quarterly basis; and
WHEREAS, the City Council finds that it is in the interest of the City of Denton to
establish the PEG subscriber fee as one percent of the cable providers gross revenue per month;
NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION 1. The findings and recitations contained in the preamble of this ordinance are
incorporated herein by reference.
SECTION 2. The City Council approves setting the PEG subscriber fee as one percent of
the cable providers' gross revenue per month effective January 1, 2011.
SECTION 3. The City Council approves that the PEG subscriber fee be remitted
quarterly no later than 45 days after the expiration of the date for which payment is due.
7
salegallour documentslordinancesl10lpeg subscriber fee ord.docx
SECTION 4. The City Manager, or his designee, is authorized to execute a letter to all
Denton cable providers regarding the new PEG subscriber fee rate as set forth in Attachment A,
which is attached and made a part of hereto.
SECTION 5. This Ordinance shall become effective immediately upon its passage and
approval.
PASSED AND APPROVED this the day of _ 32010.
MARK A. BURROUGHS, MAYOR
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPROVED AS TO LEGAL FORM:
ANITA BURGESS, CITY ATTORNEY
-9~
BY
Page 2
Exhibit A
101F
D E N T Q N 215 E. MCKINNEY DENTON, TEXAS 76201 • (940) 349-8200 • FAX (940) 349-8236
A EB E
November 16, 2010
Charter
Verizon
Grande
Re: Public, Education, and Government (PEG) Subscriber Fee
Dear (Name):
Pursuant to Section 66.006(b) of the Texas Utility Code, "On the expiration of the incumbent cable
service provider's agreement, the holder of a state-issued certificate of franchise authority shall pay a
municipality in which it is offering cable service or video service one percent of the provider's gross
revenues, or at the municipality's election, the per subscriber fee that was paid to the municipality under
the expired incumbent cable service provider's agreement, in lieu of in-kind compensation and grants."
With the adoption of Ordinance No. 2010 - XXX and effective January 1, 2011, the City has elected to
change the Public, Education, and Government (PEG) subscriber fee, which is currently collected from
cable providers in the city, from $0.50 cents per subscriber, per month, to 1 percent of the gross revenue
of your cable services. The ordinance requires PEG fee payments continue to be made quarterly to the
City, so as to remain consistent with the other cable system PEG fee payments in Denton. The ordinance
also requires that the payment shall be made to the City no later than 45 days after the expiration of the
date for which payment is due. A complete and accurate verified statement of the total cable subscriber
count during the period for which the quarterly payment is made must accompany your payment.
If you have any questions or need additional information, please contact our Cable Television Supervisor,
Billy Matthews at (94) 349-7272.
Sincerely,
George C. Campbell
City Manager
Attachment: Ordinance No. 2010-
"Dedicated to Quality Service"
www.cityofdenton.com