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November 15, 2011 Agenda
AGENDA CITY OF DENTON CITY COUNCIL November 15, 2011 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 15, 2011 at 3:30 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 15, 2011. 3. Receive a report, hold a discussion, and give staff direction regarding a proposed ordinance requiring the use of reflectors on bicycles operated on roadways and paths set aside for the exclusive operation of bicycles in the city. 4. Receive a report, hold a discussion and give staff direction regarding the Phase II amendments of the City’s Gas Well Ordinance; and receive a report on activities germane to the City’s Gas Well Inspections. 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. Deliberations regarding Certain Public Power Utilities: Competitive Matters – Under Texas Government Code, Section 551.086; Consultation with Attorneys – Under Texas Government Code, Section 551.071; Deliberations regarding Real Property – Under Texas Government Code, Section 551.072. 1. Receive a briefing from staff, discuss and deliberate regarding public power competitive and financial matters regarding the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project in the City of Denton, Texas; consult with the City’s attorneys regarding legal issues involved in the said Project, where a public discussion of these legal matters would conflict with the duty of the City’s attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the City of Denton City Council Agenda November 15, 2011 Page 2 State Bar of Texas; and discuss, deliberate and receive information from Staff and provide Staff with direction regarding the acquisition or condemnation of tracts involved in the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project. B.Consultation with Attorneys – Under Texas Government Code, Sec. 551.071. 1. Receive a briefing and a presentation from the City’s attorneys and staff regarding a spill incident at the Lake Ray Roberts Water Treatment Plant facility, along with possible regulatory consequences; and discuss, deliberate and provide the City’s attorneys with direction and any recommendations regarding such legal matter. A public discussion of this legal matter would conflict with the duty of the City’s Attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. 2. Consult with and provide direction to City’s attorneys regarding legal issues and strategies associated with Phase I and proposed Phase II Gas Well Ordinance regulation of gas well drilling and production within the City Limits and the extraterritorial jurisdiction, including Constitutional limitations, statutory limitations upon municipal regulatory authority and statutory preemption of municipal regulatory authority. 3. Consult with and provide direction to the City’s attorneys associated with proposed enforcement related to sanitary sewer overflows and where a public discussion of such legal matters would conflict with the duty of the City’s attorneys to the City of Denton, Texas and the City Council of the City of Denton, Texas under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. C.Deliberations regarding consultation with the City Attorney – Under Texas Government Code Section 551.071; Deliberations regarding Economic Development Negotiations – Under Texas Government Code Section 551.087. 1.Receive a report and hold a discussion regarding legal issues on matters in which the duty of the attorney to the governmental body under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with the provisions of the Texas Open Meetings Act, Chapter 551 of the Texas Government Code. Also hold a discussion regarding granting economic development incentives to Project NEOS, a parts assembly company. This discussion shall include commercial and financial information the City Council has received from Project NEOS which the City Council seeks to have locate, stay, or expand in or near the territory of the city, and with which the City Council is conducting economic development negotiations; including the offer of financial or other incentives. City of Denton City Council Agenda November 15, 2011 Page 3 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. GOV’T. CODE, §551.001, ET SEQ. (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. CITIZEN REPORTS A. Review of procedures for addressing the City Council. B. Receive citizen reports from the following: 1. Gricelda Samano regarding outside food vendors. 4. 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 – L). 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 – L 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. City of Denton City Council Agenda November 15, 2011 Page 4 A.Consider approval of a resolution revising Administrative Policy No. 403.07 “Debt Service Management” and providing for an effective date. The Audit/Finance Committee recommends approval (3-0). B.Consider approval of a resolution reviewing and adopting revisions to the Investment Policy regarding funds for the City of Denton; and providing an effective date. The Audit/Finance Committee recommends approval (3-0). C.Consider adoption of an ordinance of the City of Denton, Texas to declare the intent to reimburse expenditures from the Technology Services Fund with Certificates of Obligation with an aggregate maximum principal amount equal to $215,000 to allow the Fire Department and Police Department to purchase thirty- eight mobile data computers, and providing an effective date. D.Consider adoption of an ordinance awarding a contract for the purchase of eighteen Mobile Data Computers (MDCs) for the City of Denton Fire Department and twenty Mobile Data Computers for the City of Denton Police Department as awarded by the State of Texas Department of Information Resources (DIR) through the Go Direct Program, Contract Number DIR-SDD-1365; providing for the expenditure of funds therefor; and providing an effective date (File 4741– Purchase of Thirty-Eight Toughbook Mobile Data Computers awarded to John Wright Associates, Inc. in the amount of $211,112.70). E.Consider adoption of an ordinance accepting sealed proposals and awarding an “Agreement for Collection Services [Part D: Municipal Court Fines]” by and between the City of Denton, Texas and Linebarger, Goggan, Blair, and Sampson, LLP, a corporation; providing for the expenditure of funds therefor and providing an effective date (RFP 4633–Agreement for Collection Services awarded to Linebarger, Goggan, Blair, and Sampson, LLP a corporation in an amount which is contingent upon its monetary recoveries from persons, in accordance with the percentages expressed in its price proposal which is on file with the City of Denton Purchasing Department). The Audit/Finance Committee recommends approval (3-0). F.Consider adoption of an ordinance accepting sealed proposals and awarding an “Agreement for Collection Services [Parts A-C: Utility, EMS, Code Enforcement, Returned and Miscellaneous Items]” by and between the City of Denton, Texas and Credit Systems International, Inc., a corporation; providing for the expenditure of funds therefor and providing an effective date (RFP 4633– Agreement for Collection Services awarded to Credit Systems International. Inc., a corporation in an amount which is contingent upon its monetary recoveries from persons, in accordance with the percentages expressed in its price proposal which is on file with the City of Denton Purchasing Department). The Audit/Finance Committee recommends approval (3-0). G.Consider adoption of an ordinance of the City Council of the City of Denton, Texas authorizing the City Manager to execute a contract with MarketSphere Consulting, LLC to perform a JD Edwards (JDE) Software Application Upgrade from Version 8.11 to 9.X; providing for the expenditure of funds therefor; and City of Denton City Council Agenda November 15, 2011 Page 5 providing an effective date (RFP 4762–JD Edwards 9.X Upgrade Services for the City of Denton awarded to MarketSphere Consulting, LLC in the amount of $295,500.00). The Audit/Finance Committee recommends approval (3-0). H.Consider adoption of an ordinance approving an Interlocal Cooperation Agreement (ICA) between the City of Denton and Denton County, Texas, in the amount of $100,000.00; $50,000 being payable by Denton County, Texas and up to $50,000 being payable by the City of Denton, related to the engineering and construction of certain bicycle roadway accommodations within the street or roadways within the municipal limits of the City and Denton County Commissioner Precinct No. 1, authorizing the Mayor to execute said agreement on behalf of the City of Denton; authorizing the expenditure of funds; and declaring an effective date. I.Consider adoption of an ordinance approving an Interlocal Cooperation Agreement (ICA) between the City of Denton and Denton County, Texas, in the amount of $100,000.00; $50,000 being payable by Denton County, Texas and up to $50,000 being payable by the City of Denton, related to the engineering and construction of certain bicycle roadway accommodations within the street or roadways within the municipal limits of the City and Denton County Commissioner Precinct No. 4, authorizing the Mayor to execute said agreement on behalf of the City of Denton; authorizing the expenditure of funds; and declaring an effective date. J.Consider adoption of an ordinance of the City of Denton, Texas, amending Chapter 18 of the Code of Ordinances by modifying the speed zone on Loop 288 in Section 18-73; altering the prima facie speed limits established for vehicles under the provision of Transportation Code, Section 545.356, providing a penalty not to exceed $200.00 unless the violation occurs in a work zone and then the penalty shall not exceed $400.00; providing a severability clause; providing a repealing clause; providing for publication; and declaring an effective date. K.Consider adoption of an ordinance authorizing the first amendment of an agreement between the City of Denton, Texas and Protect Environmental Services, Inc. and the expenditure of funds pursuant to Section 252.022(A)(1) and (2) of the Texas Local Government Code in the interest of preservation of property and health and safety, which purchases are exempt from the requirements of competitive bidding, and providing an effective date. The Public Utilities Board will consider this item on November 14, 2011. L.Consider approval of the minutes of: October 3, 2011 October 4, 2011 October 11, 2011 October 17, 2011 October 18, 2011 City of Denton City Council Agenda November 15, 2011 Page 6 5.PUBLIC HEARINGS A.Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, amending Subchapter 4 of the Denton Development Code by adding Section 35.4.4.3 entitled “Governmental Entity Development Review Process,” providing a severability clause; and declaring an effective date. (DCA10-0011) The Planning and Zoning Commission recommends approval (5-0). B.Hold a second public hearing and consider recommendations regarding the preferred alignment of the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project; and consider a resolution of the City Council of the City of Denton, Texas regarding establishment of the route of the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project; and providing an effective date. 6. 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 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 ___________________, 2011 at ________o'clock (a.m.) (p.m.) __________________________________________ CITYSECRETARY NOTE: THECITYOFDENTONCITYCOUNCILCHAMBERSISACCESSIBLEINACCORDANCEWITHTHE AMERICANSWITHDISABILITIESACT.THECITYWILLPROVIDESIGNLANGUAGEINTERPRETERSFORTHEHEARING IMPAIREDIFREQUESTEDATLEAST48HOURSINADVANCEOFTHESCHEDULEDMEETING.PLEASECALLTHECITY SECRETARY'SOFFICEAT349-8309ORUSETELECOMMUNICATIONSDEVICESFORTHEDEAF(TDD)BYCALLING1-800- RELAY-TXSOTHATASIGNLANGUAGEINTERPRETERCANBESCHEDULEDTHROUGHTHECITYSECRETARY’SOFFICE. AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011 DEPARTMENT: Police ACM: Fred Greene SUBJECT Receive a report, hold a discussion, and give staff direction regarding a proposed ordinance requiring the use of reflectors on the sides of bicycles operated on roadways and paths set aside for the exclusive operation of bicycles in the city. BACKGROUND The City Council gave direction to City staff to bring forth a City ordinance that would require the following equipment on bicycles operated on city roadways or paths set aside for the exclusive operation of bicycles: Headlamps Red reflector on the rear of the bicycle Side reflectors on the spokes of each bicycle wheel The City of Denton does not currently have a City ordinance requiring specific safety equipment on bicycles. However, the Texas Transportation Code, Section 551.04, states the following: (b) A person may not operate a bicycle at nighttime unless the bicycle is equipped with: (1) a lamp on the front of the bicycle that emits a white light visible from a distance of at least 500 feet in front of the bicycle; and (2) on the rear of the bicycle: (A) a red reflector that is: (i) of a type approved by the department; and (ii) visible when directly in front of lawful upper beams of motor vehicle headlamps from all distances from 50 to 300 feet to the rear of the bicycle; or (B) a lamp that emits a red light visible from a distance of 500 feet to the rear of the bicycle. According to one local bicycle shop reflectors are installed on the wheels at the factory on complete bicycles. The shop representative stated that many cyclists take the reflectors off as soon as they purchase the bicycles. The representative stated he would rather see the rear flashing lights made mandatory rather than side reflectors or reflective tires. Replacement side reflectors can be purchased for anywhere from two dollars to five dollars per set and reflective sidewall tires from anywhere from twenty to fifty dollars. Agenda Information Sheet November 15, 2011 Page 2 Accidents: City staff looked at statistics for bicycle accidents that occurred from June 2008 through October 2011. The statistics showed the following information: 77 total bicycle/vehicle accidents 56 occurred during the day 21 occurred during the night Vehicles were at fault in 27 of the accidents Bicycles were at fault in 36 of the accidents Both were at fault in 10 of the accidents Fault was unable to be determined in 3 of the accidents One accident was a false report Response: City staff proposes an ordinance for specific equipment on bicycles that are operated at night. The ordinance that is proposed mirrors the State Transportation Code with one additional requirement. The proposed ordinance will require a reflector on the spokes of each wheel of the bicycle, that is visible when directly in front of lawful upper beams of motor vehicle headlamps from all distances 100 feet to the side of the bicycle, or reflective tires and rims that are visible when directly in front of lawful upper beams of motor vehicle headlamps from all distances to 50 feet to the side of the bicycle. OPTIONS 1. Council can approve the ordinance as written. 2.Council can take no action on the ordinance and instruct staff to make additional changes. 3.Council can reject the ordinance. RECOMMENDATION Staff recommends that Council approve the ordinance. PRIOR ACTION/REVIEW None FISCAL IMPACT None Respectfully submitted: Captain Roger White Denton Police Department \\codad\global\agendas\neighborhood svcs\2011 agenda items\november 2011\november 15 - 2011\ws - bicycle reflectors\ord - bicycle reflector ordinance.doc ORDINANCE ________________ AN ORDINANCE OF THE CITY OF DENTON, TEXAS, ADDING SECTION 18-_____ OF THE CODE OF ORDINANCES REQUIRING THE USE OF REFLECTORS ON THE SIDES OF BICYCLES OPERATED ON ROADWAYS AND PATHS SET ASIDE FOR THE EXCLUSIVE OPERATION OF BICYCLES IN THE CITY; PROVIDING A DEFENSE TO PROSECUTIION; PROVIDING A SAVINGS CLAUSE; PROVIDING FOR A PENALTY NOT TO EXCEED $200 FOR VIOLATIONS OF THIS ORDINANCE; AND PROVIDING FOR AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1 Denton, Texas is hereby amended by adding Section 18-_____ requiring the use of reflectors on the sides of bicycles operated on roadways and paths set aside for the exclusive operation of bicycles in the City and which shall read as follows: Sec. 18-____. Persons Affected (1) a roadway; or (2) a path set aside for the exclusive operation of bicycles. Sec. 18-____. Reflectors Required A person may not operate a bicycle at nighttime unless the bicycle is equipped with: (1) a lamp on the front of the bicycle that emits a white light visible from a distance of at least 500 feet in front of the bicycle; and (2) a reflector on the spokes of each wheel of the bicycle, that is visible when directly in front of lawful upper beams of motor vehicle headlamps from all distances to 100 feet to the side of the bicycle, or reflective tires and rims that are visible when directly in front of lawful upper beams of motor vehicle headlamps from all distances to 50 feet to the side of the bicycle; and (3) a red reflector on therear of the bicycle that is visible when directly in front of lawful upper beams of motor vehicle headlamps from all distances from 50 to 300 feet to the rear of the bicycle. (4) In addition to the reflector required by Subsection (3), a person operating a bicycle at nighttime may use a lamp on the rear of the bicycle that emits a red light visible from a distance of 500 feet to the rear of the bicycle. \\codad\global\agendas\neighborhood svcs\2011 agenda items\november 2011\november 15 - 2011\ws - bicycle reflectors\ord - bicycle reflector ordinance.doc Sec. 18-_____ Defense to Prosecution (1)It is a defense to prosecution that the person charged produces to the court proof that the person has since purchased and installed on that persons bicycle reflectors required by this ordinance. (2)After the court verifies the purchase and installation of the reflectors as specified in Subsection (1) of this Section, the court may dismiss the charge. SECTION 2. If any section, subsection, paragraph, sentence, clause, phrase, or word in this ordinance, or application thereof to any person or 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 invalidity. SECTION 3. Save and except as amended hereby, all the provisions, sections, subsections, paragraphs, sentences, clauses, and phrases of the Code of Ordinances shall remain in full force and effect. SECTION 4. Any person found guilty of violating this Ordinance by a court of competent jurisdiction shall be fined a sum not to exceed two hundred dollars ($200). SECTION 5. This ordinance providing for a penalty shall become effective fourteen (14) days from the date of its passage, and the City Secretary is hereby directed to cause the caption of this Ordinance to be published twice in the Denton Record-Chronicle, the official newspaper of the City of Denton, Texas, within ten (10) days of the date of 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: __________________________________ Page 2 AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011 DEPARTMENT: Planning & Development ACM: Fred Greene SUBJECT Proposed Gas Well Phase II Amendments; and Gas Well Inspections Division Update Receive a report, hold a discussion and give staff direction regarding the Phase II BACKGROUND I.Phase II Gas Well Ordinance Amendment On December 1, 2009, staff presented findings and comparison analysis of drilling and production ordinances from seven (7) municipalities within the Metroplex. The list of comparison cities included: Denton, Ft. Worth, Lewisville, Arlington, Weatherford, Corinth, Roanoke, and Flower Mound. The purpose of the findings and analysis was to present information to the City Council relative to how these cities are regulating gas well drilling and production within their jurisdiction. Staff also sought direction from the City Council regarding the issues and concerns to address while amending Subchapter 22 of the Denton Development Code (DDC). A the conclusion of the presentation and subsequent discussion, the City Council directed staff to conduct further investigation on various gas well drilling and production issues, and to report the findings of those investigations City Council at a future date. On April 20, 2010, staff presented the findings from the additional investigations performed after receiving direction from the City Council during the aforementioned December 1, 2009 work session. Staff also presented a comparison mmended that the City increase existing gas well permit fees and creates new fees for additional gas well related services. At the conclusion of the April 20, 2010 work session, the City Council directed staff to amend Subchapter 22 of the DDC and to increase the relative fees. Staff was also directed to include the input received from citizens, gas well industry representatives, and external drilling and production professionals into the amended ordinance. Following the April management team, Office, and various other department representatives, met and discussed the process by which staff would amend of the gas well ordinance. During that meeting, it was determined that due to the magnitude and complexity of the task, it would be best to approach the task in two (2) phases. A.Phase I: It was determined that Phase I of the process would involve an initial amendment to the ordinance to: (1) revise the Fee Schedule to cover review costs associated with the various gas drilling and production applications and generate adequate revenue to sufficiently cover the budget, salary, and benefits of the proposed Gas Well Inspections Division; (2) amend the allowable decibel levels emanating from drilling and production sites; (3) increase the minimum separation distance requirements between gas wells and Protected Uses, active potable freshwater wells, and certain platted residential lots; (4) increase the minimum screening requirements between gas drilling and production sites and protected uses; (5) amend language governing Gas Well Development Plats and Gas Well Permits; and (6) establish a requirement for Gas Well Development Site Plans for gas drilling and production sites within the City. On July 20, 2010, after conducting a public hearing, the City Council adopted Ordinance 2010-181 (See Exhibit 1) to amend several chapters of the DDC. The amendments included: (1) Subchapter 23 Definitions of the Denton Development Code (DDC); (2) Subchapter 22 of the DDC regarding gas well drilling and production; (3) Subchapter 16 of the DDC regarding gas well development plat; (4) Subchapter 3 of the DDC regarding authority given to the Zoning Board of Adjustment; and (5) the schedule of fees contained in Ordinances 2005-237, and 2009-098 (2006 City Fire Code), pertaining to gas well drilling and production within the City limits and the Extra Territorial Jurisdiction. More specifically, the amendments included the following: 1.Increased Gas Well Fees based on cost-of service and added several new fees; 2.Minimum Separation requirement (Setback): a.1,000 feet from Protected Uses and fresh water wells; and b.500 feet from all other uses; 3.Reduced expiration timeframe of Gas Well Permits from 12 months to 6 months; 4.Screening of site within 1,000 feet of any protected use, or within 500 feet of all structures with an 8-foot high opaque decorative masonry wall, if the use, lot or structure pre-existed the commencement of gas well drilling activity; 5.Noise Mitigation a.noise levels cannot exceed 75dB b.measured 300 feet from the boundaries; 6.Reduced expiration timeframe of Gas Well Plats from 2 years to 1 year; 7.Storage tank height limited to 8 feet; 8.Fracking and Flaring activities restricted to day light hours only, except for emergencies; 9.Required Gas Well Development Plats in the ETJ; 10.Required Gas Well Development Site Plans within the City limits; and 11.Required a Specific Use Permit (SUP) for all compressor stations. During the July 20, 2010 City Council public hearing, several concerns were raised by both area residents and oil and gas industry representatives. Staff also received input via several emails following the public hearing and subsequent adoption of Ordinance 2010-181. As a result of the concerns that were raised, staff conducted further review of Ordinance 2010-181 and made several amendments to address those concerns, eliminate potentially ambiguous language, and to provide further clarity relative to the spirit and intent of the ordinance. These subsequent amendments are as follows: 35.16.19.E 1. deleted language pertaining to annual inspections and the collection of fees in the ETJ.; 35.22.2 2. 35.22.3 3. A added language to allow gas well drilling and but are subject to the Rural Residential 5 (RD-5) use regulations; 35.22.3.B, 35.22.4.A.1, 35.22.10.A and C 4.amended language to provide applicability of code within a Planned Development (PD) and Master Planned Community (MPC) district; 35.22.4.G 5.Added language to address issues of legal non- conformity; 35.22.5. 6. corrected alpha-numeric sequencing and revised language to add clarity regarding separation standards; 35.22.5.A.2.n 7. revise language to tie screening requirement to the sequencing requirements under 35.22.4, and to further clarify when screening is required; 35.5.A.6.p 8. deleted this language as it could create potential conflicts with other requirements in the code; 35.22.5.D 9. corrected alpha-numeric sequencing and added ity to abate nuisances within 5,000 feet of the City limits in accordance with Texas Local Government Code §217.042; 35.22.6.D 10.deleted second sentence because it did not fall under the Criteria for Approval; 35.22.10.I 11. revised language to provide delineation between the issuance of permits by the City and the Texas Rail Road Commission. 35.22.13 12. amended language to provide applicability of code within a Planned Development (PD) and Master Planned Community (MPC) district, and to improve readability. The above amendments were adopted on August 14, 2010 via Ordinance 2010-196 (see Exhibit 2). B.Creation of the Gas Well Inspections Division In April 2011, the City created the Gas Well Inspections Division within the Planning and Development Department. The Division is comprised of four (4) full-time staff that includes a Gas Well Administrator, a Senior Gas Well Inspector, a Gas Well Inspector, and an Administrative Assistant. This Division serves as a one-stop shop for the permitting, regulating, inspecting, and investigating of gas drilling and production facilities and point of contact relative to oil and gas well codes and regulations, the processing of citizen and customer inquiries, and serve as technical experts for City Boards and Commissions, the City Council, other staff, and citizens. More specifically, the major line of business associated with this Division is as follow: Provides comprehensive inspection oversight of natural gas drilling and production sites and operations in accordance with the Denton Development Code (DDC) and all other applicable standards and policies; Review and process gas drilling and production development related applications to ensure compliance with established policies and procedures; Participates in the development of gas well drilling and production policies and standard operating procedures including researching and preparing special studies on gas drilling and production/regulatory policy; Makes recommendations for changes and improvements to existing standards and procedures; Serves as technical adviser to the City Council, City staff, Boards, and Commissions as needed; Provides consultation and assistance with technical and procedural issues; Serves as liaison to the RRC and the Texas Commission on Environmental Quality (TCEQ) regarding regulatory standards germane to natural gas drilling and production, permitting, and violation reporting activities; Prepares analytical and statistical reports on natural gas drilling and production activities; Oversees to ensure all records are archived in compliance with established policies and procedures; review of gas well insurance and security bonds; and efficient processing and review of road remediation agreement relating to gas well drilling and production; nsure effective and efficient processing and review of drainage plans and clearing and grading permits to identify best management practices relating to gas well drilling and production; Manages the scheduling of inspections for drilling and production sites Coordinates with the Fire Department to ensure efficient and effective review of gas well permit application and site inspections; Coordinates with the Finance Department to ensure effective and efficient processing and collection of the annual Gas Well Inspection and Administrative fees; and Conducts complex gas drilling and production research that may require coordination with the RRC, the TCEQ, and other local, state, and federal agencies. The Gas Well Inspections Division is diligently implementing and enforcin where applicable. The Division is also in the process of accurately mapping all the wells, drilling and production sites, and associated appurtenances B.Phase II Amendments: The goal of the Phase II amendments is to focus on a comprehensive rewrite of the entire Gas Well Drilling and Production ordinance (DDC Subchapter 22) with the objective to provide further protection from any potentially harmful side-effects of natural gas drilling and production. It was intended that these amendments would potentially address the following issues: 1.Vapor Recovery/Air Quality monitoring; 2.Environmentally friendly completion; 3.Freshwater well pollution; 4.Prohibition of City water for fracing; 5.Development of a permitting process for seismic testing and addressing the use of explosives in this testing; 6.Use of recycled water only, during fracing; 7.Chemical-free fracing; 8.Prohibition against gas well flaring; and 9.Use of closed loop systems only. C.Gas Well Advisory Task Force: Due to the highly technical and complex nature of the issues germane to the Phase II ordinance revisions, staff determined that it was in the best interest of all stakeholders (including our citizens, neighborhoods, the industry, and the City) to seek out individuals, external to the organization, with specialized knowledge in the environmental, gas, engineering, and legal industries. Staff also determined that it was crucial to capture the concerns and experiences of our citizens prior to and during the development of the Phase II Ordinance. As such, with the concurrence of the City Council, the City Manager appointed a Gas Well Advisory Task Force to assist the City with the development and drafting of the Phase II Drilling and Production Ordinance for eventual presentation to and consideration by the City Council. The preliminary objectives of the Task Force were identified as: (1) assist the City draft an ordinance that is fair, defensible, appropriate, and does not risk taxpayer resources, and (2) represent the interests of all stakeholders by soliciting public input. The ultimate goal is to implement reasonable regulations to protect the health, safety, and general welfare of the public and to accomplish the orderly and practical development of mineral resources. To this end, the appointed Task Force is comprised of the following personnel: Karen Moss (later replaced by Don Butler) , New Tech Global Regulatory Affairs (an oil and gas engineering firm), Operator perspective; Dr. Ed Ireland , Executive Director, Barnett Shale Energy Education Council (a non-profit organization); Dr. Tom La Point , UNT Professor, environmental research; Vicki Oppenheim , Founder and Principal of Green Leaf Environmental Planning (an environmental planning and sustainability firm); John Siegmund, Retired VP, Wells Fargo Advisors (former petroleum engineer); Dr. Kenneth Tramm, Modern Geosciences; Terry Morgan , Gas Well Legal Planning Issues; Terry Cross , Oil and Gas Drilling Legal Issues; Martin Rochelle(and David Klein) , Gas Well Legal Environmental Issues; and City Staff , from various departments, including: Mark Cunningham , Director of Planning and Development; o Dr. Kenny Banks , Director of Environmental Services and o Sustainability; Darren Groth , Gas Well Administrator; o City Legal staff; and o Other City Staff as deemed necessary. o A listing of the task force members and their contact information is attached as Exhibit 3. The citizen representatives of the Gas Well Advisory Task Force (Vicki Oppenheim, Tom La Point, and John Siegmund) with the assistance of City Staff, facilitated the first public meeting on August 25, 2011. The public meeting was regarding gas well drilling and production within the City. During the meeting, comments cards were distributed to each attendee, and were subsequently collected prior to adjournment. There was also a court reporter in attendance who recorded the minutes of the meeting. Subsequent to the August 25, 2011 public meeting, Staff tallied the cards and arranged the information gathered by topic and frequency. This information is presented in the table below: bu E bu E · Topics / ©7 {¦; ;© Toughest ordinance possible (Flower Mound example) and penalty for noncompliance Complete ban on drilling/moratorium Use legal consultant and other experts (James Bradbury) Report inspection results and meetings Prohibition of City Water for Fracing Zoning, SUP, and Industrial Uses and property values Freshwater Well Pollution (other water quality environmental concerns) Use of Closedloop Systems Only Bonds, Letter of Credit, Insurance, Pollution Liability Setbacks Changes of ownership Vapor Recovery/Air Quality Monitoring Pipeline routing Review both short-term and long-term implications Use of Recycled Water Only during Fracing No visible storage tanks or appurtenances, no electric power generating equipment Limit number of wells Increase fees Truck traffic using city streets Work together with all parties, limited use of City government Chemicalfree Fracing, disclosure of chemicals Environmentally Friendly Completion Prohibition against Gas Well Flaring Require Operators to Produce Timelines for Operational Events and Mail to Affected Property Owners Prohibition of Compression and Collections Stations, Tank Farms, and Land Farms within City Limits Develop Permit Process for Seismic Testing and Address Explosives in Testing The meeting minutes, presentation, comment cards, and above table are all at: http://www.cityofdenton.com/index.aspx?page=1548. On October 27, 2011, City Staff and the all members of the Gas Well Advisory Task Force met and team discussed: (1) the Task Force Scope of Responsibility; (2) the relative to the Phase II amendments; (3) the comments and input received during the August 25, 2011 Public Meeting, as identified in Exhibit 3; (4) potential topics to be included in the Phase II ordinance update; and (5) the process by which the ordinance would be written. In addition, a timetable and action plan was also presented. This timetable is considered to be dynamic, as is it subject to change, if and when deemed necessary. See Exhibit 4. Since the August 25, 2011 public meeting, the University of North Texas Department of Philosophy and Religion Studies Professor Dr. Adam Briggle and the Denton Stakeholders Drilling Advisory Group (DAG) held a series of meetings to address gas drilling and production concerns that should be considered during the Phase II rewrite. Via a panel discussion, the DAG meetings presented pertinent drilling and production information to the pu City by serving as an additional forum for capturing public input that will greatly contribute to the Phase II revisions. City Staff met with Dr. Briggle on November 10, 2011 to share and discuss information and core principles that should be considered during the Phase II draft. We anticipate future meetings of this nature with DAG. II.Gas Well Inspections Update A.Gas Wells within the City and Division 1 ETJ. Initial efforts to map the wells within the City and ETJ relied on data obtained by the Railroad Commission of Texas (RRC). The RRC data records three hundred and thirty-two (332) gas wells and one (1) oil well within the corporate city limits (COD), and another one thousand and fifty (1,050) gas wells in all of the ETJ, totaling one thousand, three hundred and eighty-three (1,383) wells. However, the City is currently limited to inspect those wells located within the COD, and the Division I ETJ where the City has gas well platting authority. To garner more accurate figures of the total number of wells under the (COD and Division 1 ETJ), the Gas Well Inspections Division conducts site inspections of each facility. To date, this Division has inspected and verified the existence of two hundred and fifty seven (257) active wells within the City, and one hundred and seventy four (174) active wells w. The aforementioned permits; however, it did not include all active wells and counted wells that were permitted and never drilled, plugged wells, and cancelled locations. The 257 and 174 well totals, in the COD and Division I ETJ, respectively, account for those errors and omissions originally included in the well totals presented to City Council that were based on RRC data and accurately B.Gas Well Permitting Activities Prior to the August 4, 2010 effective date of the Ordinance 2010-196, the City issued one hundred and eighty six (186) gas well permits. Since August 4, 2010, twenty one (21) drilling permits have been issued for new wells. Of the twenty one (21) issued permits, eighteen (18) wells were already drilled, one (1) well is currently being drilled, and two (2) wells are pending a spud date. C.Annual Inspection and Administrative Fee Collection In September 2011, the City sent Annual Inspection and Administrative Fee invoices to all Gas Well Operators with well locations identified from the RRC data within the City and Division 1 ETJ. The total amount of the invoices is approximately $161,000, and as of November 10, 2011, we have only received approximately $32,305 in payments. A full report detailing the Gas Well invoices is attached as Exhibit 5. City Staff will continue to monitor collections and if we do not receive substantial payments in the near future, we will meet with our Executive Leadership and Legal teams to consider what actions to take to receive payment. In addition to the above, the City intends to invoice Oil and Gas Operators approximately $320,000 during January 2012 to cover the anticipated costs of the upcoming annual inspections during 2012. CONCLUSION: Staff is actively involved in gathering data to be used for ordinance and will present our recommendation after the completion of gathering public input, and the input has been reviewed and analyzed by the Gas Well Task Force. ATTACHMENT(S) Exhibit 1 Ordinance 2010-181 Exhibit 2 Ordinance 2010-196 Exhibit 3 Gas Well Task Force Members Exhibit 4 Phase II Action Plan Exhibit 5 Gas Well invoices Prepared by: Mark A. Cunningham, AICP, CPM Planning and Development Department Director Respectfully submitted: Fred Greene Assistant City Manager NAME BUSINESS/TITLE TELEPHONE EMAIL ADDRESS GAS WELL DRILLING TASK FORCE Darren Groth Gas Well Adm. 940.349.8363 darren.groth@cityofdenton.com Chair John Siegmund 940.382.3830 johnsiegmund@verizon.net Tom LaPoint UNT 940.369.7776 lapoint@unt.edu Vicki Oppenheim 940.367.8029 vicki@greenlep.com Kenneth Banks Dir. Environment 940.349.7165 kenneth.banks@cityofdenton.com Services Ed Ireland Barnett Shale 817.338.3305 eireland@bseec.org Energy Don Butler Sr. Proj. Manager 817.529.6699 dbutler@newtecheng.com New Tech Global Kenneth S. Tramm Modern Geosciences 682.223.1322 ktramm@moderngeosciences.com CITY STAFF George Campbell City Manager 940.349.8307 george.campbell@cityofdenton.com Fred Greene Asst. City Manager 940.349.8354 fred.greene@cityofdenton.com Mark Cunningham Dir. Planning/Dev. 940.349.8504 mark.cunningham@cityofdenton.com Howard Martin Asst. City Manager 940.349.8230 howard.martin@cityofdenton.com John Cabrales, Jr. PIO/IRO 940.349.8509 john.cabrales@cityofdenton.com ATTORNEY STAFF Anita Burgess City Attorney 940.349.8336 anita.burgess@cityofdenton.com Richard Casner Deputy City 940.349.8198 richard.casner@cityofdenton.com Attorney Aaron Leal Deputy City 940.349.8376 aaron.leal@cityofdenton.com Attorney Terry Cross McClure & Cross, 214.329.1241 terry.cross@mcclurecross.com LLP Martin Rochelle Lloyd Gosselink 512.322.5810 mrochelle@lglawfirm.com David Klein Lloyd Gosselink 512.322.5818 dklein@lglawfirm.com Terry Morgan Goins, Underkofler, 214.740.9944 terrym@gucl.com Crawford & Langdon, LLP s:\legal\our documents\gas well documents\gas well drilling task force.docx 11/11/2011 10:57 AM Phase II Gas Well Ordinance Amendment Action-Plan 11/09/11 Item Date Action Status 1 8/25/11 1.Present gas drilling and production Complete overview; st 1 Citizen Task Force Meeting 2.Review Phase I amendments; 3.Review Phase II recommendations that were collected during the Phase I amendment process; and, 4.Public in-put on Phase II amendments. 2 Staff Action 1.Group Public input per topic and post Complete on City web site; 2.Post minutes from 8/25/11 meeting on website; and, 3.Update Q&A document, if necessary. 3 10/27/11 1.Introduction of Staff and Taskforce Complete Members; Assemble full Task Force members, 2.Taskforce Scope of Responsibility; including Legal, Technical Experts, and 3.; City staff 4.Present topics from August 25, 2011 Public Meeting, and Discuss Potential Topics to be included in Ordinance Update; and 5.Discuss Ordinance Update Protocol 4 11/08/11 Identify the steps to take moving forward Complete for presentation to CC on 11/15/11; Meeting of City Staff Complete Meet with DAG on 11/10-11; Mindmixer website potential; Second public meeting planned for the first week of December 5 11/10/11 Meet with Dr. Briggle to share and discuss Complete Meet with DAG representative information and core principles that should be considered during the Phase II Draft. 6 11/15/11 1.Update on Gas Well Ordinance rewrite: a.Elements possibly considered City Council Work Session for inclusion in the Phase II Ordinance revision; b.Process discussion; and c.Projected time frame. 2.Gas Well Inspections Divisions field observation update 7 TBD 1.Receive feedback and recommendation Follow-Up Meeting with full Task Force on all information presented. 8 First week of December 1.Invite DAG representatives; 2.Present results of previous input nd 2 Public Meeting with Full Task Force. gathering efforts and discuss potential regulatory cause-and-effects; 3.Discuss any insight gained from DAG meetings; and 4.Finalize received input to begin drafting revisions. 9 TBD 1.Prepare a DRAFT of the Phase II ordinance revisions; Staff Action 2.DRAFT reviewed by full Gas Well Task Force and revised as necessary (may be multiple reviews); 3. for public review and comments; 4.Amend ordinance, as necessary; and 5.Present DRAFT to Task Force for final . 10 TBD Present DRAFT of Phase II ordinance and City Council Work Session seek City Council input and direction. 11 TBD Present DRAFT Phase II ordinance to P&Z P&Z Work Session 12 TBD P&Z public hearing P&Z Public Hearing 13 TBD City Council public hearing CC Public Hearing AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011 DEPARTMENT: Finance ACM: Jon Fortune SUBJECT Consider a for an effective date. The Audit/Finance Committee recommends approval (3-0). BACKGROUND 1995 and adopted by the City Council on March 5, 1996. On April 20, 2010, the City Council adopted revisions to the policy, including the requirement that the policy be reviewed at least annually to ensure compliance with statutory and Securities and Exchange Commission (SEC) requirements. The Debt Service Management Policy provides general guidelines by which the City will issue debt and addresses the issues of process, use and limitations. After revie Bond Counsel and internal Debt Management Committee, the following revisions are being proposed: 1.Section II, E Removal of process for Financial Advisor to bid or underwrite City debt issues in accordance with new rules by the Municipal Security Rulemaking Board (MSRB). 2.Section IV, B Addition of requirement to report certain events to the MSRB within ten (10) business days after occurrence. 3.Section VI Clarification t Obligation or tax-supported debt to no more than 30% of budgeted expenditures in the General Fund (i.e., FY 2011-12 tax-supported debt service is $14.8 million or 16.8% of budgeted General Fund expenditures of $88.3 million), and clarification that debt coverage ratios for the Utility Funds (Electric, Water and Wastewater) include other indebtedness (i.e., self-supporting General Obligation debt). 4.Section VIII Clarification that variable rate debt and interest rate swaps are expressly prohibited by this policy. Agenda Information Sheet November 15, 2011 Page 2 5.Section XVI, B Clarification on the selection of underwriters in a negotiated sale. The Cit Additionally, other minor changes are recommended to clarify language, reduce redundancy, and improve sentence structure. The changes outlined above represent changes that allow for both RECOMMENDATION Staff recommends approval of this resolution. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On November 2, 2010, the City Council approved a Resolution No. 2010-039 revising the Debt Service Management Policy. On November 7, 2011, the Audit/Finance Committee unanimously recommended approval to forward the revised Debt Service Management Policy to the City Council for consideration. EXHIBITS Red-line version of Debt Service Management Policy Resolution Respectfully Submitted By: Bryan Langley Chief Financial Officer CITY OF DENTON 1221 Page of POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: SECTION: FINANCE 403.07 INITIAL EFECTIVE DATE: SUBJECT: DEBT MANAGEMENT 03/05/96 LAST REVISION DATE: TITLE: DEBT SERVICE MANAGEMENT 11/2/1011/15/11 POLICY STATEMENT This policy shall provide general guidelines by which the City of Denton (the City) will issue debt. In as much as this policy may be in conflict or inconsistent with state law, state law will prevail. Furthermore, state law will prevail on matters not specifically addressed in this policy. It is the objective of this policy that (1) the City obtain financing only when necessary, (2) the process for identifying the timing and amount of debt or other financing proceed as efficiently as possible, and (3) the City seek the most favorable interest rate and competitive costs in accordance with this policy while maintaining financial flexibility. This debt management policy applies to the financing activities of the City of Denton, Texas. It also addresses the issues of process, use and limitations. Proceeds from debt issuances will be delivered as closely as possible to the time that contracts are expected to be awarded so that the proceeds are spent in the most efficient manner. The City Council shall review and approve the debt management policy at least annually and be documented by ordinance or resolution, which shall include any changes made. ADMINISTRATIVE PROCEDURES I. DEBT MANAGEMENT COMMITTEE A.Members The Debt Management Committee (the Committee) will consist of the City Manager, Assistant City Managers, and the Chief Financial Officer. The City’s financial advisor and bond counsel shall act as consultants to the Committee. B.Scope The Committee shall meet at least annually to review the debt program or as necessary. Topics for discussion should include: the Capital Improvement Program, status of outstanding debt, unspent bond proceeds, and unissued voter authorized debt, timing of additional financing needs and financing options, and the effect of proposed financing activity on the related rates supporting the debt (i.e., property tax rate, utility rates, user fees, etc.). 222 Page of II. RESPONSIBILITY AND STANDARD OF CARE The Finance Department will coordinate all activities required for the issuance of all debt. A.Delegation The Chief Financial Officer shall have primary responsibility for developing financing recommendations. The Chief Financial Officer shall: Meet no less than annually with Department Directors to consider the need for financing, review debt capacity and assess progress on the Capital Improvement Program; Review changes in state and federal legislation; Review annually the provisions of ordinances authorizing issuance of obligations; Periodically review the City’s Charter to ensure compliance with state law; and Annually review services provided by the financial advisor, bond counsel, paying agent, and other service providers to evaluate the extent and effectiveness of the services being provided. B.Conflicts of Interest All participants in the debt management process shall seek to act responsibly as custodians of public assets. Officers and employees involved in the debt management process shall refrain from personal business activity that could conflict with proper execution of the financing program, or which could impair their ability to make impartial financing decisions. C.Reporting The Chief Financial Officer shall include in the Comprehensive Annual Financial Report (CAFR) a report summarizing all debt outstanding by type (tax-supported and self-supported general obligation debt, and revenue backed debt), remaining balance of bond proceeds, update of arbitrage liability, and update of pertinent legislative changes. D.Investor Relations The City shall endeavor to maintain a positive relationship with the investment community. The Chief Financial Officer and the City’s financial advisor shall, as necessary, prepare reports and other forms of communications regarding the City’s indebtedness, as well as its future financing plans. This includes information presented to the press and other media. The information includes, but is not limited to, the annual program of services, comprehensive annual financial report, financial plans, capital improvement plans, and comprehensive development plans. 322 Page of All forms of media deemed appropriate and immediately available to the City will be utilized to disseminate information to all investors. Examples include the Texas Municipal Report, The Bond Buyer, Electronic Municipal Market Access (EMMA) and the Municipal Advisory Council of Texas (MAC). Bond counsel will advise on the use of electronic media in connection with the City's debt program. E.Financial Advisor The City shall retain an independent financial advisor for advice on the structuring of new debt, financial analysis of various options, the rating review process, the marketing of debt issues, marketability of City obligations, sale and post-sale services, the review of the official statement, and other services, as necessary. The City will seek the advice of the financial advisor on an ongoing basis. The financial advisor will perform other services as defined by the agreement approved by the City Council. The financial advisor will not bid on nor underwrite any city debt issues in accordance with Municipal Security Rulemaking Board (MSRB) rules, effective November 2011.without requesting and obtaining a written consent to bid prior to submitting a bid in accordance with the provisions of Rule G-23 of the Municipal Securities Rulemaking Board (MSRB).TheChief Financial Officershall be the responsible person to receive such a request and will make the final written recommendation to the City Council. F.Bond Counsel The City shall retain bond counsel for legal and procedural advice on all debt issues. Bond counsel shall advise the City Council in all matters pertaining to its bond ordinance(s) and/or resolution(s). No action shall be taken with respect to any obligation until a written instrument (i.e., Certificate of Ordinance or other prevailing instrument) has been prepared by the bond attorneys certifying the legality of the proposal. The bond attorneys shall prepare all ordinances and other legal instruments required for the execution and sale of any bonds issued which shall then be reviewed by the City Attorney and the Chief Financial Officer. The City will also seek the advice of bond counsel on all other types of debt and on any other questions involving federal tax or arbitrage law. Special counsel may be retained to protect the City's interest in complex negotiations. III. OFFICIAL STATEMENT The preparation of the Official Statement is the responsibility of the financial advisor in concert with the Chief Financial Officer. Information for the Official Statement is gathered from departments/divisions throughout the City. The City will take all appropriate steps to comply with the federal disclosure rules (i.e., Securities and Exchange Commission Rule 15c2-12). The City will provide annual and 422 Page of material event disclosure to information repositories throughout the term of securities for the benefit of the primary and secondary municipal markets as required by Rule 15c2-12. IV. DISCLOSURE A.With each bond offering, and at least annually, in the preparation of Financial Reports or Official Statements or any other offering document, the City will follow a policy of full and complete disclosure of operating, financial and legal conditions of the City, in conformance with the Government Finance Officers Association Disclosure Guideline, and as advised by disclosure counsel or financial advisor. B.Notice of Events Securities and Exchange Commission (SEC) Rule 15c2-12 lists certain events that must be reported in a timely fashion to the Municipal Security Rulemaking Board (MSRB) via the Electronic Municipal Market Access (EMMA) system and, if required by Rule 15c2-12, to the State Information Depository (SID), the Municipal Advisory Council of Texas (MAC). On May 26, 2010, the SEC made amendments to Rule 15c2-12, which only apply to primary offerings that occur on or after December 1, 2010. While not required, the City will make every effort to apply the new requirements to existing bond issuances since the amendments make Rule 15c2-12 more stringent. Amended Rule 15c2-12 requires that events be reported to the MSRB within 10 business days after the occurrence of the event. 1.The events that must be reported, if material are: a.Nonpayment related defaults; b.Modifications of rights of security holders; c.Bond calls; d.Release, substitution, or sale of property securing repayment of the securities; e.Mergers, consolidations, acquisitions, the sale of all or substantially all of the assets of the obligated person or their termination; f.Appointment of a successor or additional trustee or the change of the name of a trustee. 2.The events that must be reported, regardless of materiality, are: a.Principal and interest payment delinquencies; b.Nonpayment related defaults; c.Unscheduled draws on debt service reserves reflecting financial difficulties; d.Unscheduled draws on credit enhancements reflecting financial difficulties; e.Substitution of credit or liquidity providers, or their failure to perform; 522 Page of f.Adverse tax opinions or events affecting the tax-exempt status of the security; g.Defeasances; h.Rating changes; i.The issuance by the IRS of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the securities; j.Tender offers; k.Bankruptcy, insolvency, receivership or similar proceeding. C.Rule 15c2-12 also requires the City to report to the MSRB the failure of the City to provide the required annual financial information or operating data on or before the dates specified under a continuing disclosure undertaking. In addition, the SEC has approved the following proposals to becomebecame effective within the next year in May 2011: a.Underwriters shall indicate on the EMMA system whether the issuer has agreed to provide secondary market disclosure information, when it will be provided, and the name of the obligated entity. b.The MSRB shall indicate on the EMMA system the issues that voluntarily agree to provide the following: 1.Annual financial information within 120 days (150 days until December 31, 2013) after the fiscal year ends; 2.An undertaking to prepare audited financial statements in compliance with accounting standards established by the Governmental Accounting Standards Board; and 3.The website link to the issuer’s financial information. Full disclosure of the operations will be made to the bond rating agencies. The City staff, with the assistance of the financial advisors and bond counsel, will prepare the necessary materials for and presentation to the rating agencies. V. RATING AGENCY COMMUNICATIONS & CREDIT OBJECTIVES The City will seek to maintain and improve its current bond rating so its borrowing costs are reduced to a minimum and its access to credit is preserved. In conjunction with the financial advisor, the City shall maintain a line of communication with at least two of the rating agencies (Moody's, Standard & Poor's, and Fitch), informing them of major financial events in the City as they occur. The Comprehensive Annual Financial Report, Annual Program of Services, and Capital Improvement Plan, shall be distributed to the rating agencies after they have been accepted/adopted by the City Council on an annual basis. When necessary, a conference call or personal meeting with representatives of the rating agencies will be scheduled when a major capital improvement program is initiated, or to 622 Page of discuss economical and/or financial developments which might impact credit ratings. The following documents may be required by the rating agencies: -Most recent annual audit reports, including a description of accounting practices. Accounting changes in the past three years and the impact on financial results should be explained. -Current budget. -Current Capital Improvement Program. -Official statements for new financings. -Description of projects being financed. -Sources and uses statement for bond issuance. If additional funds are required to complete specific projects being financed, the source of the funds and any conditional requirements may be discussed. -Engineering and feasibility report (if applicable). -Zoning or land-use map (if applicable). -Cash flow statement, in the case of interim borrowing. Statement of long – and short-term debt with annual and monthly maturity dates as appropriate. Also, a report of any lease obligations, their nature and term. -Indication of appropriate authority for debt issuance -Investment policy (if applicable). -Statement concerning remaining borrowing capacity plus tax rate and levy capacity or other revenue capacity. VI. LIMITATIONS OF INDEBTEDNESS AND AFFORDABILITY STATEMENT City staff, in conjunction with the financial advisor and bond counsel, will present to the City Council, and any city committee as appropriate, a comprehensive analysis of debt capacity prior to issuing bonds. This analysis should cover a broad range of factors, including: • Legal debt limits, tax or expenditure ceilings. • Coverage requirements or additional bonds tests in accordance with bond covenants. • Measures of the tax and revenue base, such as projections of relevant economic variables (e.g., assessed property values, employment base, unemployment rates, income levels, and retail sales). • Population trends. • Utilization trends for services underlying revenues. • Factors affecting tax collections, including types of property, goods, or services taxed, assessment practices and collection rates, evaluation of trends relating to the City’s financial performance, such as revenues and expenditures, net revenues available after meeting operating requirements. • Reliability of revenues expected to pay debt service. • Unreserved fund balance levels. • Debt service obligations, such as existing debt service requirements. • Debt service as a percentage of expenditures or tax or system revenues. 722 Page of • Measures of debt burden on the community, such as debt per capita, debt as a percentage of full or equalized assessed property value, and overlapping or underlying debt. • Tax-exempt market factors affecting interest costs, such as interest rates, market receptivity, and credit rating. Annual debt service on General Obligation debt (tax-supported), which excludes self- supported general obligation debt, shall be limited to no more than 30% of budgeted expenditures in the City’s General Fund. The City has revenue bonds and other indebtedness of the Electric, Water, and Wastewater Funds. The City will maintain coverage ratios as dictated by the City’s outstanding bond covenants, including other indebtedness of the Electric, Water and Wastewater Funds (e.g. 1.25 times the maximum principal and interest of all outstanding revenue bonds and other indebtedness, and/or 1.50 times the average annual principal and interest of all outstanding revenue bonds and other indebtedness, or as required by individual bond covenants). The Electric, Water, and Wastewater Funds' total long-term debt outstanding shall not exceed the amount of combined fund equity. VII. CAPITAL IMPROVEMENT PLAN A. The City will seek all possible federal and state reimbursement for mandated projects and/or programs. The City will pursue a balanced relationship between issuing debt and pay-as-you-go financing as dictated by prevailing economic factors and as directed by the City Council. B. Current operations will not be financed with long-term debt. C. Debt incurred to finance capital improvements will be repaid within the useful life of the projectassetor earlier, if callable. D. High priority will be assigned to the replacement of capital improvements when they have deteriorated to the point there they are hazardous, incur high maintenance costs, negatively affect property values, or no longer serve their intended purposes. E. An updated Capital Improvement Plan will be presented to the City Council for approval on an annual basis. This plan will be used as a basis for the long-range financial planning process. VIII. TYPES OF DEBT The City's bond counsel and financial advisor will present the different types of debt best suited and legally permissible under state law for each debt issue and assist in analyzing the use of capital lease purchases or the use of lines of credit. These types may include: 822 Page of • short-term vs. long-term debt, • general obligation vs. revenue debt, • fixed debt, • lease-backed debt, • special obligation debt such as assessment district debt, • certificates of obligation debt • combination tax and revenue debt, • tax increment debt, • conduit issues, and • taxable debt. The issuance of variable rate debt and interest rate swapsrequiresthe approval of the City Council and is notare expressly permittedprohibited by this policy. The Chief Financial Officer will be responsible for evaluating this type of debt and will present a recommendation and variable rate debt or interest rate swap policy to the City Council as necessary. IX. BOND STRUCTURE Structural features that may be considered are: • maturity of the debt, • setting the final maturity of the debt equal to or less than the useful life of the projectasset, • use of zero coupon bonds, capital appreciation bonds, deep discount bonds, or premium bonds, • debt service structure (level debt service payments, level principal payments or other repayment structure defined by state law), • redemption provisions (mandatory and optional call features), • use of credit enhancement, • use of senior lien and junior lien obligations, and • others, as deemed appropriate in consultation with financial advisor and bond counsel. X. SHORT-TERM DEBT A. General Short-term obligations may be issued to finance projects or portions of projects for which the City ultimately intends to issue long-term debt; i.e., it will be used, when appropriate, to provide interim financing which will eventually be refunded with the proceeds of long-term obligations. Short-term obligations may be backed with a tax and/or revenue pledge or a pledge of other available resources. 922 Page of Interim financing may be appropriate when long-term interest rates are expected to decline in the future. In addition, some forms of short-term obligations may be obtained more quickly than long-term obligations and, thus, may be used until long-term financing is secured. B. Commercial Paper Due to the financing costs associated with the marketing and placement of commercial paper, programs of less than $25 million may not be cost effective. Should the opportunity to participate in a commercial paper issuance pool present itself or if the establishment of a program becomes cost effective, the advantages and disadvantages shall be evaluated by the Chief Financial Officer. The use of a commercial paper program requires approval by the City Council. C. Anticipation Notes Anticipation notes do not require giving a notice of intent. Anticipation notes may be secured and repaid by a pledge of revenue, taxes, or the proceeds of a future debt issue. Anticipation notes may be authorized by an ordinance adopted by the City Council. Anticipation notes may be used to finance projects or acquisitions that could also be financed using Certificates of Obligation and have the following restrictions: 1)Anticipation notes may not be used to repay interfund borrowing or a borrowing that occurred up to/or more than 24-months prior to the date of issuance, and 2)A governing body may not issue anticipation notes that are payable from general obligation bond proceeds unless the proposition authorizing the issuance of the general obligation bonds has already been approved by the voters. D.Line of Credit To the extent authorized by state law and with the approval of the City Council, the City may establish a tax-exempt line of credit with a financial institution selected through a competitive process. Draws shall be made on the line of credit when (1) the need for financing is so urgent that time does not permit the issuance of long-term debt, or (2) the need for financing is so small that the total cost of issuance of long-term debt including carrying costs of debt proceeds not needed immediately is significantly higher. Draws will be made on the line of credit to pay for projects designated for line of credit financing by the City Council. Borrowings under the line of credit shall be repaid from current revenues. The Chief Financial Officer will authorize all draws on the line of credit, as authorized in the agreement approved by the City Council. E.Capital Leasing 1022 Page of Capital leasing is an option for the acquisition of a piece or package of equipment. Leasing shall not be considered when funds are on hand for the acquisition unless the interest expense associated with the lease is less than the interest that can be earned by investing the funds on hand or when other factors such as budget constraints or vendor responsiveness override the economic consideration. Whenever a lease is arranged with a private sector entity, a tax-exempt rate shall be sought. Whenever a lease is arranged with a government or other tax-exempt entity, the City shall obtain an explicitly defined taxable rate so that the lease will not be counted in the City’s total annual borrowings subject to arbitrage rebate. The lease agreement shall permit the City to refinance the lease at no more than reasonable cost should the City decide to do so. A lease which may be called at will is preferable to one which may merely be accelerated. The City shall obtainseek at least three (3) competitive proposals for any lease financing. The net present value of competitive bids shall be compared, taking into account whether payments are in advance or in arrears, and how frequently payments are made. The purchase price of equipment shall be competitively bid, as required by state law, as well as the financing costs. The Chief Financial Officer will ensure any leasing agreement is compared to other financing options to ensure the lease is cost beneficial. Alternate financing options will include revenue bonds, contractual obligations, certificates of obligation and lines of credit. The Chief Financial Officer will be the person responsible for evaluating this financing source, and will make a recommendation to the City Council for approval. F.Interfund Loans As allowed by the City, the Chief Financial Officer will review opportunities whereby interfund loans may be utilized to meet short-term financing needs. Interfund loans will only be utilized if economically beneficial to the lending fund and only if the rate of return is comparable or higher than the rate of return the lending fund would otherwise receive by keeping funds in the City’s investment pool. Any interfund loan must be approved by the City Council. XI. LONG-TERM DEBT A. General Proceeds from the sale of long-term obligations will not be used for operating purposes, and the lifefinal maturity of the obligations will not exceed the estimated useful life of the projectsasset financed. Voter approved general obligation bonds will strive to have a final maturity of twenty (20) years or less. Revenue bonds and certificates of obligation will strive to have a final maturity of 1122 Page of thirty (30) years or less. If deemed appropriate, staff may present to the City Council extraordinary circumstances in which longer final maturities may be necessary but never in excess of the useful life of an individual projectasset. A level debt service structure will be used unless operational matters and marketing considerations dictate otherwise. The cost of issuance of private activity bonds is usually higher than for governmental purpose bonds. Consequently, private activity bonds will be issued only when they will economically benefit the City. The cost of taxable debt is higher than for tax-exempt debt. However, the issuance of taxable debt may be required or may be more appropriate in some circumstances and may allow valuable flexibility in subsequent contracts with users or managers of the improvement constructed with the bond proceeds. Therefore, the City will usually issue tax-exempt obligations but may occasionally issue taxable obligations. B. Bonds Long-term general obligation, including certificates of obligation, or revenue bonds shall be issued to finance significant and desirable capital improvements. The general obligation bonds will be used for purposes set forth by voters in bond elections or set forth in the notices of intent or to refund previously issued general obligation bonds,orcertificates of obligation or revenue bonds. All bonds shall be sold in accordance with applicable law. C. Certificates of Obligation Certificates of obligation may be issuedto: finance permanent improvements and land acquisition finance costs associated with capital project overruns acquire equipment/vehicles leverage grant funding renovate, acquire, construct facilities and facility improvements construct street improvements provide funding for master plans/studies address necessary life safety needs finance revenue producing facilitiessupported projects/assets if determined to be more economical than revenue bonds In accordance with state law, a resolution authorizing publication of notice of intent to issue certificates of obligation shall be presented for the consideration of the City Council. The notice of intent shall be published in a newspaper of 1222 Page of general circulation in the City once a week for two consecutive weeks with the first publication to be at least thirty (30) days prior to the sale date. Certificates of obligation may be backed by a tax pledge under certain circumstances as defined by law. They may also be backed by a combination tax and revenue pledge eligible under state law. Some revenues are restricted as to the uses for which they may be pledged. Electric, Water, and Wastewater revenues may be pledged without limit for Electric, Water, and Wastewater purposes but may only be pledged to a limit of $1,000 for any one series of bonds issued for non-utility system purposes. The final maturity of certificates of obligation will be in accordance with Section XI, A. D. Public Property Finance Contractual Obligation Public property finance contractual obligations may be issued to finance the acquisition of personal property. E. Revenue Bonds In addition to the policies set forth above, when cost-beneficial and when permitted under applicable state law, the City may consider the use of surety bonds, letters of credit, or similar instruments to satisfy mandated debt service reserve fund requirements on outstanding and/or proposed revenue bonds. F. Combination Tax and Revenue Bonds In addition to the policies set forth above, when cost-beneficial and when permitted under applicable state law, the City may consider the use of Combination Tax and Revenue Bonds for refunding obligations of the Electric, Water and Wastewater combined utility system, and Solid Waste or any other self-supporting revenue producing City enterprise. Combination Tax and Revenue Bonds will comply with applicable state law and are assigned the full faith and credit of the City, thereby enhancing the credit rating otherwise obtained from revenue supported only debt (Revenue Bonds). XII. CREDIT ENHANCEMENTS Credit enhancements are mechanisms which guarantee principal and interest payments. They include bond insurance, lines of credit, surety bonds and letters of credit. A credit enhancement, while costly, is intended to bring a lower interest rate on debt and a higher rating from the rating agencies, thus lowering overall costs. 1322 Page of The City’s financial advisor will advise the city whether or not a credit enhancement is cost effective under the circumstances and what type of credit enhancement, if any, should be purchased. In a negotiated sale, bids will be taken during the period prior to the pricing of the sale. In a competitive sale, bond insurance may be provided by the purchaser if the purchaser finds it cost effective. Other credit enhancements may arise in the future, which may be beneficial. The City’s financial advisor will present these options for consideration. XIII. REFUNDING AND RESTRUCTURING OPTIONS In the case of advance refundings, the City shall consider refunding debt whenever an analysis indicates the potential for present value savings of at least 3% of the par amount being refunded. In the case of current refundings, the City shall consider refunding debt whenever an analysis indicates the potential for present value savings above the costs of refunding the bonds. Refunding for savings should not extend the final maturity of the original obligations, unless specifically approved by the City Council. XIV. REIMBURSEMENT ORDINANCES The Chief Financial Officer will review and approve all reimbursement ordinances from City departments, including enterprise fund departments, before forwarding to the City Council for consideration. In no event will a reimbursement ordinance exceed the unreserved fund equity of the combined Utility System for Electric, Water or Wastewater requests or the operating fund of any other department making a request. Reimbursement ordinances must be adopted within sixty (60) days of the date the original expenditures were paid. Bonds must be issued and the reimbursement allocation made not later than eighteen (18) months after the later of (1) the date the original expenditures were paid, or (2) the date the project is placed in service or abandoned, but in no event more than three (3) years after the original expenditures were paid. XV. USE OF ANTICIPATED BOND PROCEEDS The use of anticipated bond proceeds will be limited to preliminary (soft) costs, which may include engineering fees, architect fees, feasibility studies, etc…. The Director of FinanceChief Financial Officer may provide additional parameters regarding qualifying uses and will review and approve all requests for the use of anticipated bond proceeds. Departments may not use anticipated bond proceeds for preliminary costs earlier than 60 days from the date the City Council adopts an ordinance authorizing the sale of said bonds. In no event will the use of anticipated bond proceeds exceed the unreserved fund equity of the combined Utility System for Electric, Water or Wastewater requests or the operating fund of any other department making a request. 1422 Page of XVI. METHOD OF SALE A.Competitive Sale When feasible and economical, obligations shall be issued by competitive rather than negotiated sale. Favorable conditions for a competitive method of sale include the following: • The market is familiar with the issuer, and the issuer is a stable and regular borrower in the public market. • An active secondary market with a broad investor base for the issuer's bonds. • The issue is neither too large to be easily absorbed by the market nor too small to attract investors without a concerted sales effort. • The issue is not viewed by the market as carrying overly complex features or requiring explanation as to the bonds' soundness. • Interest rates are relatively stable, market demand is strong, and the market is able to absorb a reasonable amount of buying or selling at reasonable price changes. 1.Bidding Parameters The notice of sale will be carefully constructed so as to ensure the best possible bid for the City, in light of existing market conditions and other prevailing factors. Parameters to be examined may include: a.Limits between lowest and highest coupons b.Coupon requirements relative to the yield curve c.Method of underwriter compensation, discount or premium coupons d.Use of true interest cost (TIC) versus net interest cost (NIC) e.Use of bond insurance f.Serial bonds vs term bonds with mandatory sinking fund redemptions g.Deep discount bonds h.Call provisions B.Negotiated Sale Bonds issued for the purpose of refunding and/or restructuring outstanding debt may appropriately be sold on a negotiated basis when maximum flexibility is required in order for the City to respond to day-to-day nuances in the marketplace and other complications peculiar to the issuance of refunding debt. Whenever the option exists to sell an issue on a negotiated basis, an analysis of the options shall be performed to aid in the decision-making process. The City will present the reasons and will actively participate in the selection of the underwriter or direct purchaser. 1522 Page of In a negotiated sale, the underwriter may be selected through a request for proposals (RFP) or because of a relationship established by previous debt transactions.In negotiated sales, the City attempts to involve qualified and experienced firms which consistently submit financing plans to the City and actively participate in the City’s competitive sales. The criteria used to select an underwriter in a negotiated sale may include the following: • Overall experience • Participation in the City’s past competitive sales • Marketing philosophy • Capability • Previous experience as managing or co-managing partner • Financial statement and financing plans that are relevant and appropriate • Public finance team and resources • Breakdown of underwriter's discount, which includes management fee, underwriting fee, average takedown and other administrative expenses C.Private Placement When cost-beneficial, the City may privately place its debt. Since no underwriteringparticipates in a private placement and rating agency expenses may be avoided, it may result in a lower cost of issuance. Private placement is sometimes an option for small issues. The opportunity may be identified by the financial advisor. XVII. INVESTMENT OF BOND PROCEEDS A.Strategy The City should actively monitor its investment practices to ensure maximum returns on its invested bond funds while complying with federal arbitrage guidelines. Specific investment strategies for the investment of bond proceeds are provided in the City's Investment Policy # 403.06. B. Arbitrage Compliance The City will follow a policy of full compliance with all arbitrage rebate requirements of the federal tax code and Internal Revenue Service regulations, and will perform (internally or by contract consultants) arbitrage rebate calculations for each issue subject to rebate on an annual basis. All necessary rebates will be filed and paid when due. C. Arbitrage Liability Management The Chief Financial Officer will maintain a system for tracking arbitrage rebate liability and ensuring that required calculations are performed on a timely basis. These calculations will be performed annually. Funds should be set aside in 1622 Page of anticipation of potential rebate liabilities. Due to the complexity of the arbitrage calculations and regulations, and to the severity of the penalties for noncompliance, the advice of Bond Counsel and qualified experts will be pursued on an ongoing basis. D. All bond proceeds will be separately accounted for in the financial accounting system to facilitate arbitrage tracking and reporting. The Chief Financial Officer shall include in the CAFR a report summarizing the City’s arbitrage rebate liability. 17221 Pageof POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE (Continued) REFERENCE NUMBER: DEBT SERVICE MANAGEMENT TITLE: 403.07 GLOSSARY Amortization –The planned reduction of a debt obligation according to a stated maturity or redemption schedule Arbitrage – The gain which may be obtained by borrowing funds at a lower (often tax-exempt) rate and investing the proceeds at higher (often taxable) rates. The ability to earn arbitrage by issuing tax-exempt securities has been severely curtailed by the Tax Reform Act of 1986, as amended Average Life – The average length of time debt is expected to be outstanding. Generally, a level debt service structure will limit the average life of a bond issue (i.e., a 20 year final maturity will have an approximate average life of 12 years, and a 30 year final maturity will have an approximate average life of 18 years). Basis Point – One one-hundredth of one percent (0.0001) BBI – Bond Buyer Index. Comparison of current rates for various maturities Bid Form – The document used by an underwriter to submit his bid at a competitive sale Bond – A security that represents an obligation to pay a specified amount of money on a specific date in the future, typically with periodic interest payments Bond Counsel – An attorney (or firm of attorneys) retained by the issuer to give a legal opinion concerning the validity of the securities. The bond counsel’s opinion usually addresses the subject of tax exemption. Bond counsel may prepare, or review and advise the issuer regarding authorizing resolutions or ordinances, trust indentures, official statements, validation proceedings and litigation Bond Insurance – Bond insurance is a type of credit enhancement whereby a monoline insurance company indemnifies an investor against a default by the issuer to pay principal and interest in-full and on-time. Once assigned, the municipal bond insurance policy generally is irrevocable. The insurance company receives an up-front fee, or premium, when the policy is issued Book-Entry-Only – Bonds that are issued in fully-registered form but without certificates of ownership. The ownership interest of each actual purchaser is recorded on computer Bond Years - $1,000 of debt outstanding for one year used to compute average life and net interest cost Call Option – The right to redeem a bond prior to its stated maturity, either on a given date or continuously. The call option is also referred to as the optional redemption provision 18221 Pageof POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE (Continued) REFERENCE NUMBER: DEBT SERVICE MANAGEMENT TITLE: 403.07 Capital Appreciation Bond – A bond without current interest coupons that is sold at a substantial discount from par. Investors are provided with a return based upon the accretion of value in the bond through maturity Capital Lease – The acquisition of a capital asset over time rather than merely paying a rental fee for temporary use. A lease-purchase agreement, in which provision is made for transfer of ownership of the property for a nominal price at the scheduled termination of the lease, is referred to as a capital lease Certificates of Obligation – A type of debt authorized to be issued pursuant to the Certificates of Obligation Act of 1971 (Subchapter C of Chapter 271, Texas Government Code). Closing – When bonds are exchanged for money (a/k/a delivery or settlement) Commercial Paper (Tax-Exempt) – By convention, short-term, unsecured, tax-exempt promissory notes issued in either registered or bearer form with a stated maturity of 270 days or less Competitive Sale – A sale of securities in which the securities are awarded to the bidder who offers to purchase the issue at the best price or lowest cost Coupon Rate – The interest rate on specific maturities of a bond issue. While the term “coupon” derives from the days when virtually all municipal bonds were in bearer form with coupons attached, the term is still frequently used to refer to the interest rate on different maturities of bonds in registered form Cover Bid – The runner-up in a competitive bond sale Credit Enhancements – Credit enhancements are mechanisms which guarantee principal and interest payments. They include bond insurance and a line or letter of credit. A credit enhancement, while costly, will usually bring a lower interest rate on debt and a higher rating from the rating agencies, thus lowering overall costs. Cost effectiveness of credit enhancement will be evaluated for each debt issue CUSIP Number – The term CUSIP is an acronym for the Committee on Uniform Securities Identification Procedures. An identification number is assigned to each maturity of an issue, and is usually printed on the face of each individual certificate of the issue. The CUSIP numbers are intended to help facilitate the identification and clearance of municipal securities. As the municipal market has evolved, and the new derivative products are devised, the importance of the CUSIP system for identification purposes has increased Dated Date – A defined date at which interest begins to accrue from 19221 Pageof POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE (Continued) REFERENCE NUMBER: DEBT SERVICE MANAGEMENT TITLE: 403.07 Debt Burden – The ratio of outstanding tax-supported debt to the market value of property within a jurisdiction. The overall debt burden includes a jurisdiction’s proportionate share of overlapping debt as well as the municipality’s direct net debt Debt Limitation – The maximum amount of debt that is legally permitted by a jurisdiction’s charter, constitution, or statutory requirements Debt Service – The amount necessary to pay principal and interest requirements on outstanding bonds for a given year or series of years Debt Service Reserve Fund – The fund into which moneys are placed which may be used to pay debt service if pledged revenues are insufficient to satisfy the debt service requirements. The debt service reserve fund may be entirely funded with bond proceeds, or it may only be partly funded at the time of the issuance and allowed to reach its full funding requirement over time, due to the accumulation of pledged revenues. If the debt service reserve fund is used in whole or part to pay debt service, the issuer usually is required to replenish the funds from the first available funds or revenues. A typical reserve requirement might be the maximum aggregate annual debt service requirement for any year remaining until the bonds reach maturity. The size of the reserve fund, and the manner in which it is invested, may be subject to arbitrage regulations. Default – The failure to pay principal or interest in full or on time. An actual default should be distinguished from technical default. The latter refers to a failure by an issuer to abide by certain covenants but does not necessarily result in a failure to pay principle or interest when due. Defeasance – Providing for payment of principal of premium, if any, and interest on debt through the first call date or scheduled principal maturity in accordance with the terms and requirements of the instrument pursuant to which the debt was issued. A legal defeasance usually involves establishing an irrevocable escrow funded with only cash and U.S. government obligations Depository Trust Company (DTC) – A limited purpose trust company organized under the New York Banking Law. DTC facilitates the settlement of transactions in municipal securities Downgrade – A reduction in credit rating Enterprise Activity – A revenue-generating project or business. The project often provides funds necessary to pay debt service on securities issued to finance the facility. The debts of such projects are self-liquidating when the projects earn sufficient monies to cover all debt service and other requirements imposed under the bond contract. Common examples include water and sewer treatment facilities and utility facilities 20221 Pageof POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE (Continued) REFERENCE NUMBER: DEBT SERVICE MANAGEMENT TITLE: 403.07 Electronic Municipal Market Access (EMMA) – Effective July 1, 2009, the SEC implemented amendments to SEC Rule 15c2-12 which approved the establishment by the MSRB of EMMA, the sole successor to the nationally recognized municipal securities information repositories with respect to filings made in connection with disclosure undertakings. Access to filings are made free of charge to the general public by the MSRB. Final Official Statement (FOS) – A document published by the issuer which generally discloses material information on a new issue of municipal securities including the purposes of the issue, how the securities will be repaid, and the financial, economic and social characteristics of the issuing government. Investors may use this information to evaluate the credit quality of the securities Flow of Funds – The order in which pledged revenues must be disbursed, as set forth in the trust indenture or bond resolution. In most instances, the pledged revenues are deposited into a general collection account or revenue fund as they are received and subsequently transferred into the other accounts established by the bond resolution or trust indenture. The other accounts provide for payment of the costs of debt service, debt service reserve deposits, operation and maintenance costs, renewal and replacement, and other requirements General Obligation Debt - Debt that is secured by a pledge of the ad valorem taxing power of the issuer. Also known as a full faith and credit obligation. Good Faith Deposit – A sum of money given by the Underwriter to assure his bid Institutional Buyer – Banks, financial institutions, insurance companies, and bond funds Issuance Costs – The costs incurred by the bond issuer during the planning and sale of securities. These costs include but are not limited to financial advisory and bond counsel fees, printing and advertising costs, rating agencies fees, and other expenses incurred in the marketing of an issue Junior Lien Bonds – Bonds which have a subordinate claim against pledged revenues Letter of Credit – Bank credit facility whereby a bank will honor the payment of an issuer’s debt, in the event that an issuer is unable to do so, thereby providing an additional source of security for bondholders for a predetermined period of time. A letter of credit often is referred to as an L/C or an LOC. Letter of Credit can be issued on a “stand-by” or “direct pay” basis Level Debt Service – When annual payments are substantially the same each year Line of Credit – Bank credit facility wherein the bank agrees to lend up to a maximum amount of funds at some date in the future in return for a commitment fee 21221 Pageof POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE (Continued) REFERENCE NUMBER: DEBT SERVICE MANAGEMENT TITLE: 403.07 Manager – The member (or members) of an underwriting syndicate charged with the primary responsibility for conducting the affairs of the syndicate. The managers take the largest underwriting commitment Lead Manager or Senior Manager The underwriter serving as head of the syndicate. The lead manager generally handles negotiations in a negotiated underwriting of a new issue of municipal securities or directs the process by which a bid is determined for a competitive underwriting. The lead manager also is charged with allocating securities among the members of the syndicate in accordance with the terms of the syndicate agreement or agreement among underwriters Joint Manager or Co-Manager Any member of the management group Municipal Advisory Council of Texas (MAC) – The designated State of Texas Information Depository as approved by the SEC with respect to filings made in connection with undertakings. Municipal Securities Rulemaking Board (MSRB) – A self-regulating organization established on September 5, 1975 upon the appointment of a 15-member Board by the Securities and Exchange Agreement. The MSRB, comprised of representatives from investment banking firms, dealer bank representatives, and public representatives, is entrusted with the responsibility of writing rules of conduct for the municipal securities market. New Board members are selected by the MSRB pursuant to the method set forth in Board rules Negotiated Sale – A sale of securities in which the terms of sale are determined through negotiation between the issuer and the purchaser, typically an underwriter, without competitive bidding Net Interest Cost – The average interest cost of a bond issue calculated on the basis of simple interest. Paying Agent – An agent of the issuer with responsibility for timely payment of principal and interest to bond holders Preliminary Official Statement (POS) – The POS is a preliminary version of the official statement which is used by an issuer or underwriters to describe the proposed issue of municipal securities prior to the determination of the interest rate(s) and offering prices(s). The preliminary official statement, also called a “red herring”, often is examined uponby potential purchasers prior to making an investment decision Present Value – The value of a future amount or stream of revenues or expenditures in current dollars 22221 Pageof POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE (Continued) REFERENCE NUMBER: DEBT SERVICE MANAGEMENT TITLE: 403.07 Refunding – An advance refunding is a refunding that occurs more than 90 days before the call date of the refunded bonds. A current refunding is a process of selling a new issue of securities to obtain funds needed to retire existing securities. Debt refunding is done to extend maturity and/or to reduce debt service cost Retail Buyer – Individual investors Revenue Bond – A bond which is payable from a specific source of revenue and to which the full faith and credit of an issuer with taxing power is not pledged. Revenue bonds are payable from identified sources of revenue, and do not permit the bondholders to compel a jurisdiction to pay debt service from any other source. Pledged revenues often are derived from the operation of an enterprise activity. Generally, no voter approval is required prior to issuance of such obligations Secondary Market – The market in which bonds are sold after their initial sale in the new issue market Senior Lien Bonds – Bonds having a prior, or first claim on pledged revenues Serial Bonds – A bond issue in which the principal is repaid in periodic installments over the issue’s life Split ratings – Different rating levels from different rating agencies Surety Bond – A bond guaranteeing performance of a contract or obligation Term Bonds – Term bonds usually refer to a particularly large maturity of a bond issue that is created by aggregating a series of maturities. A provision is often made for the mandatory redemption of specified amounts of principal during several years prior to the stated maturity, which effectively simulates serial bonds True Interest Cost (TIC) – An expression of the average interest cost in present value terms. The true interest cost is a more accurate measurement of the bond issue’s effective interest cost and should be used to ascertain the best bid in a competitive sale Variable Rate Bond – A bond on which the interest rate is reset periodically, usually no less often than semi-annually. The interest rate is reset either by means of an auction or through an index Upgrade – An increase in credit rating AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011 DEPARTMENT: Finance ACM: Jon Fortune _____________________________________________________________________________ SUBJECT Consider approval of a resolution reviewing and adopting revisions to the Investment Policy regarding funds for the City of Denton; and providing an effective date. The Audit/Finance Committee recommends approval (3-0). BACKGROUND Since at least 1996, the City of Denton has had a formal Investment Policy to guide decision and in compliance with, the provisions of the Public Funds Investment Act (PFIA) of Texas, Government Code Chapter 2256. In accordance with the Code, and in order of importance, are mature, making any temporary gains and losses unlikely to be realized. The general investment strategy, while taking into account the current interest rate environment, is to ladder out securities to meet cash flow needs. At least annually, the City Council is requested to review and approve the Investment Policy as required by the PFIA. derive from recent changes made by the Texas state legislature to the PFIA during the 2011 fiscal year. Listed below are examples of such revisions: 1) Clarification of the start and end date for the two year required investment training cycle for investment officers and staff engaged in investment transactions. (Page 6) 2) Clarification that obligations fully guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United States are authorized investments. (Page 8) 3) Expansion of providers for the placement of certificates of deposits (CDs) through a network of FDIC insured institutions by allowing investments through a broker/dealer. The mandatory reciprocal deposit requirement for these instruments was also removed. (Page 9) flexible repurchase agreements. (Page 14) Agenda Information Sheet November 15, 2011 Page 2 Additional changes made in the Policy include: 1) Limitations on investment amounts made by the City to not exceed 10 percent of the total assets of any one local government investment pool or money market mutual fund. Although this restriction has not been an issue for the City, it has been a PFIA requirement for money market mutual funds. (Page 9 & 10) 2) Reduction of portfolio exposure, by institution, for collateralized CD providers from 35 percent to no more than 15 percent. The City, however, may still maintain up to 35 percent of its total investments in either fully FDIC insured or collateralized CDs. (Page 11) 3) An increase to 15 percent (from 10 percent) in portfolio exposure, by institution, for repurchase agreement providers. Although the City does not currently invest in repurchase agreements, this change will allow for standardization in institutional exposure for the purchase of collateralized instruments. (Page 11) Other revisions were made to address word redundancy, improve sentence structure, or to provide further clarification. Fi advisor, has reviewed and approved the revised Investment Policy. RECOMMENDATION Staff recommends approval of Investment Policy 403.06 with the recommended changes. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On November 2, 2010, the City Council approved a resolution adopting the revised Investment Policy. On November 7, 2011, the Audit/Finance Committee unanimously recommended approval to forward the revised Investment Policy to the City Council for consideration. EXHIBITS Red-line version of Investment Policy Resolution Respectfully submitted: Bryan Langley Chief Financial Officer CITY OF DENTON Page 1 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE FINANCE POLICIES REFERENCE NUMBER: SECTION: 403.06 INITIAL EFFECTIVE DATE: INVESTMENTS SUBJECT: 02/17/87 REVISION DATE: INVESTMENT POLICY 11/2/10 TITLE: 11/15/11 I.PURPOSE It is the objective of the City of Denton to invest public funds in a manner which will provide maximum security and the best commensurate yield while meeting the daily cash flow demands of the City and conforming to all federal, state, and local statutes, rules, and regulations governing the investment of public funds. This Policy serves to satisfy the statutory requirements of defining and adopting a formal investment policy. The Policy and investment strategies shall be reviewed annually by the Audit/Finance Committee and City Council who will formally approve any modifications. This Investment Policy, as approved, is in compliance with the provisions of the Public Funds Investment Act of Tex. Gov’t. Code Chapter 2256. II.SCOPE A.This Investment Policy applies to the investment activities of the City of Denton, Texas. The specific funds cited hereafter inSection IID, shall be excluded from this Investment Policy. All financial assets of all funds, including the General Fund and any other accounts of the City not specifically excluded in these policy guidelines are included. These funds are accounted for in the City’s Comprehensive Annual Financial Report (CAFR). These funds, as well as othersfunds that may be created from time-to-time, shall be administered in accordance with the provisions of this Policy. All funds will be pooled for investment purposes except for those listed under IIC. In addition to this Policy, the investment of bond proceeds and other bond funds (including debt service and reserve funds) shall be governed and controlled by their governing ordinance and by the provisions of the Tax Reform Act of 1986, including all regulations and rulings promulgated there under applicable to the issuance of tax-exempt obligations. B.Funds covered by this Policy and managed as a pooled fund group: 1.General Fund - used to account for resources traditionally associated with government, which are not required to be accounted for in another fund. 2.Special Revenue Funds – used to account for the proceeds from specific revenue sources which are restricted or committed to expenditures for specific purposes other than debt service or capital projects. 3.Debt Service Fund used to account for resources to be used for the payment of principal, interest and related costs on general obligation debt. 4.Capital Project Funds – used to account for resources to enable the acquisition or construction of major capital facilities which are not financed by enterprise funds, internal service funds, or trust funds. Page 2 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 5.Enterprise Funds – used to account for operations that are financed and operated in a manner similar to private business enterprises. 6.Internal Service Funds – used to account for the cost of providing goods or services between City departments. 7.Trust and Agency Funds – used to account for assets held by the City in a trustee capacity or as an agent for individuals, private organizations, other governments, and/or other funds. 8.Bond Reserve Funds – funds set at prescribed levels by certain bond ordinances to pay principal and/or interest if required to prevent default. 9.New funds available for investment by the City, such as (but not limited to) resources associated with Public Improvement Districts or Tax Increment Financing zones, unless specifically excluded herein. C. Funds covered by this Policy and managed as separately invested assets: 1. Bond Funds – funds established with the proceeds from specific bond issues when it is determined that segregating these funds from the pooled funds’ portfolio will result in maximum interest earning retention under the provisions of the Tax Reform Act of 1986. 2. Endowment Funds – funds given to the City with the instructions that the principal is to remain intact, unless otherwise agreed to, and the income generated by the investments will be used for specified purposes. 3. Trust or Escrowed Funds – funds held outside the City by a trust or escrow agent but belonging to the City. D. This Policy shall not govern funds, which are managed under separate investment programs in accordance with the Tex. Gov’t. Code Sec. 2256.004. Such programs currently include all funds related to employee retirement programs, other funds established by the City for deferred employee compensation, and certain private donations. The City shall and will maintain responsibility for these funds to the extent required by fFederal and sStatelLaw, the City Charter, and donor stipulations. This Policy also does not apply to monies held in escrow to retire bonds which are subject to defeasance requirements stated under their respective bond ordinances. III.INVESTMENT OBJECTIVES & STRATEGIES It is the policy of the City that, giving due regard to the safety and risk of investments, all available funds shall be invested in conformance with sState and fFederal rRegulations, applicablebBondoOrdinance requirements, adopted Investment Policy and adoptedIinvestment Sstrategies. In accordance with the Public Funds Investment Act, the following prioritized objectives (in order of importance) in accordance with the Tex. Gov’t. Code Sec. 2256.005(d) apply for each of the City’s investment strategies. Page 3 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 A.Suitability – Understanding the suitability of the investment to the financial requirements of the City is important. Any investment eligible in the Investment Policy is suitable for all City funds. B.Safety – Preservation and safety of principal are the primary objectives of the Investment Policy. All investments will be in high quality securities with no perceived default risk. C.Liquidity – The City’s investment portfolio will remain sufficiently liquid to meet operating requirements that might be reasonably anticipated. Liquidity shall be achieved by matching investment maturities with forecasted cash flow requirements and by investing in securities with active secondary markets. Short-term investment pools and money market mutual funds provide daily liquidity and may be utilized as a competitive investmentyield alternative to fixed income investmentsinstruments. D.Marketability – Securities with active and efficient secondary markets are necessary in the event of an unanticipated cash requirement. Historical market “spreads” between the bid and offer prices of a particular security type of less than a quarter of a percentage point shall define an efficient secondary market. E.Diversification – Investment maturities shall be staggered throughout the budget cycle to provide cash flow based on the anticipated needs of the City. Diversifying the appropriate maturity structure will reduce market cycle risk. F.Yield – Attaining a competitive market yield, commensurate with the City’s investment risk constraints and the cash flow characteristics of the portfolio, is the desired objective. The goal of the City’s investment portfolio is to regularly meet or exceed the average rate of return on U.S. Treasury Bills at a maturity level comparable to the portfolio’s weighted average maturity in days. The yield of an equally weighted, rolling six-month U.S.Treasury Bill portfolio shall be the minimum yield objective or “benchmark”. Six-month U.S. Treasury Bill information is derived from the Federal Reserve Statistical Release H.15 for constant maturities. A secondary objective will be to obtain a yield equal to or in excess of a local government investment pool or money market mutual fund. The first measure of success in this area will be the attainment of enough income to offset inflationary increases. Although steps will be taken to obtain this goal, the City’s staff will follow the “Prudent Person” statement relating to the standard of care that must be exercised when investing public funds as expressed in the Tex. Gov’t. Code Sec. 2256.006(a-b). The Investment Officers shall avoid any transactions that might impair public confidence in the City’s ability to govern effectively. The governing body recognizes that in adequately diversifying the maturity structure within the portfolio to meet the City’s expenditure needs, occasional measured unrealized losses due to market volatility and rising interest rates are inevitable, and must be considered within the context of the overall portfolio’s investment return, provided that adequate diversification has been implemented. The prudence of the investment decisions shall be measured in accordance with the tests set forth in the Tex. Gov’t. Code Sec. 2256.006(b). IV. INVESTMENT STRATEGY FOR SPECIFIC FUND GROUPS In order to better diversify, maximize interest earnings and otherwise meet stated objectives, fund groups may be combined into one or more internal investment pools. Although fund monies may be combined into a single asset portfolio, proportional fund ownership will be accounted for Page 4 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 separately. The City maintains separate portfolios for some individual funds or groups of funds (as listed under Section II) that are managed in accordance with the terms of this Policy and by the corresponding investment strategies listed below. A.Investment Pool Strategy – The City’s Investment Pool is an aggregation of the majority of City funds which includes tax receipts, enterprise fund revenues, fine and fee revenues, as well as some, but not necessarily all, bond proceeds, grants, gifts and endowments. This portfolio is maintained to meet anticipated daily cash needs for the City’s operations, capital projects and debt service. In order to ensure the ability of the City to meet obligations and to minimize potential liquidation losses, the dollar-weighted average stated maturity of the iInvestment pPool shall not exceed 1.5 years or 550 days. The objectives of this portfolio are to: 1.Ensure safety of principal by investing in only high quality securities for which a strong secondary market exists. 2.Ensure that anticipated cash flowsflow needs are matched with adequate investment liquidity. 3. Limit market and credit risk through diversification. 4. Attain the best feasible yield commensurate with the objectives and restrictions set forth in this Policy by actively managing the portfolio to meet or exceed the six month moving average yield on a six month U.S. Treasury Bill as derived from the Federal Reserve Statistical Release H.15 for constant maturities. B.Bond Funds Strategy - Occasionally, separate non-pooled portfolios are established with the proceeds from bond sales in order to maximize earnings within the constraints of arbitrage regulations. The objectives of the portfolios are to: 1.Ensure safety of principal by investing in only high quality securities for which a strong secondary market exists. 2. Ensure that anticipated cash flows needs are matched with adequate investment liquidity. 3. Limit market and credit risk through diversification. 4. Attain the best feasible yield commensurate with the objectives and restrictions set forth in this Policy and the bond ordinance by actively managing the portfolio to meet or exceed the bond yield. C. Endowment Fund Strategy - Funds received as gifts to the City with instructions that the income generated by the investment of said funds be used for specified purposes are invested as separate non-pooled portfolios in order to maximize return. The objectives of the portfolios are to: 1.Ensure safety of principal by investing in only high quality securities for which a strong secondary market exists. Page 5 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 2. Ensure that anticipated cash flows needs are matched with adequate investment liquidity. 3. Limit market and credit risk through diversification. 4. Attain the best feasible yield commensurate with the objectives and restrictions set forth in this Policy. D. Trust or Escrowed Funds Strategy - Funds that are held outside the City by a trust or escrow agent but belonging to the City are governed by their respective trust or escrow agreement and are subject to the provisions of this Policy. The objectives of the portfolios are to: 1.Ensure safety of principal by investing in only high quality securities for which a strong secondary market exists. 2. Ensure that anticipated cash flow needs are matched with adequate investment liquidity. 3. Limit market and credit risk through diversification. 4. Attain the best feasible yield commensurate with the objectives and restrictions set forth in this Policy and the trust/escrow agreement. V. INVESTMENT COMMITTEE Members – The Investment Committee will consist of the City Manager, Assistant City Manager for Finance, Assistant City Manager for Utilities, Chief Financial Officer, City Controller, Assistant Director of Finance, Treasury Administrator, and the City’s investment advisor. The investment advisor is a non-voting member. When needed, the City Attorney will act as a legal advisor to the Investment Committee. Scope – The Investment Committee shall meet at least quarterly to determine general strategies, investment guidelines and to monitor results. Included in its deliberations will be such topics as: economic outlook, portfolio diversification, maturity structure, potential risk to the City’s funds, authorized broker/dealers (if applicable) and depository institutions,as well asand the target rate of return on the investment portfolio. Procedures - The Investment Committee shall provide meeting summations to all members. Any two members of the Investment Committee may request a special meeting, and four members shall constitute a quorum. The Investment Committee shall establish its own rules of procedures. VI. RESPONSIBILITY AND STANDARD OF CARE A.Delegation & Training – The management responsibility for the investment program is delegated to the Chief Financial Officer. The primary individual who shall be involved in investment activities will be his designee. The designee may delegate the day to day activities to a responsible individual(s) who has received the appropriate training required by state statute. The Chief Financial Officer and department designees will use this Policy as the primary guideline for the City’s investment program, procedures, and internal control issues. The Assistant City Manager who oversees financial operations and the Chief Page 6 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 Financial Officer are designated as the Investment Officers, pursuant to Tex Gov’t. Code Sec. 2256.005(f). Accordingly, the Investment Officers and persons authorized to execute investment transactions shall attend at least one training session relating to their responsibilities under the Public Funds Investment Act within 12 months after assuming duties and receive no less than 10 hours of instruction relating to investment functions every two years period that begins on the first day of the fiscal year and consists of the two consecutive fiscal years after that date. The training must include education in investment controls, security risks, strategy risks, market risks, and compliance with the Public Funds Investment Act. The investment training session shall be provided by an independent source approved by the Investment Committee. For purposes of this policy, an “independent source” from which investment training shall be obtained shall include a professional organization, an institute of higher learning or any other sponsor other than a business organization with whom the City may engage in an investment transaction. Thus, these independent sources will be training sessions sponsored, accredited or byendorsed by the Government Treasurers Organization of Texas (GTOT), Center For Public Management at the University of North Texas (UNT), Government Finance Officers Association of Texas (GFOAT), Texas Municipal League (TML), North Central Texas Council of Governments (NCTCOG), Association of Public Treasurers United States & Canada (APT US & C), and Government Finance Officers’ Association (GFOA). A.No persons may engage in investment transactions except as provided under the terms of this Policy. The Assistant City Manager shall require an annual compliance review by an external auditor that will consist of an audit of management controls on investments, adherence to the City’s Investment Policy and a review of the quarterly investment reports. The reviews will provide internal control by assuring compliance with policies and procedures. The Assistant City Manager, Chief Financial Officer, Mayor, City Council, City Manager and other Finance Department employees shall be personally indemnified in the event of investment loss provided the Investment Policy has been followed. B.Conflicts of Interest – All participants in the investment process shall seek to act responsibly as custodians of public assets. Officers and employees involved in the investment process shall refrain from personal business activity that could conflict with proper execution of the investment program, or which could impair their ability to make impartial investment decisions. C.Disclosure– Anyone involved in investing City funds shall file with the Investment Committee a statement disclosing any personal business relationship with a business organization offering to engage in investment transactions with the City or is related within the second degree by affinity or consanguinity as determined under the Tex. Gov’t. Code Ch. 573, to an individual seeking to transact investment business with the City. A disclosure statement must also be filed with the Texas Ethics Commission and the City Council. An Investment Officer or other employee has a personal business relationship with a business organization if any one of the following three conditions are met: 1.The Investment Officer or employee owns 10% or more of the voting stock or shares of the business organization or owns $5,000 or more of the fair market value of the business organization. 2.Funds received by the Investment Officer or employee from the business organization exceed 10% of the investment officers gross income for the prior year. Page 7 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 3.The Investment Officer or employee has acquired from the business organization during the prior year investments with a book value of $2,500 or more for their personal account. D.Prudence – The standard of prudence to be used by the investment officials shall be the “Prudent Person Rule”, as set forth in Tex. Gov’t. Code Sec. 2256.006, and will be applied in the context of managing an overall portfolio: “Investments shall be made with judgment and care under prevailing circumstances, that a person of prudence, discretion and intelligence would exercise in the management of the person’s own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.” Investment officials acting in accordance with the Investment Policy and exercising due diligence shall be relieved of personal responsibilities for an individual security’s credit risk or market price change, provided deviations from expectations are reported in a timely fashion and appropriate action is taken to control adverse developments. In determining whether an investment official has exercised prudence with respect to an investment decision, the determination shall be made taking into consideration the investment of all funds over which the official had responsibility rather than consideration as to the prudence of a single investment and, whether, the investment decision was consistent with the City’s Investment Policy. E.Reporting Quarterly – Not less than quarterly, the Chief Financial Officer shall submit to the City Manager, Mayor and City Council a written report of the City’s investment transactions within one hundred twenty (120) days of the preceding reporting period. The report shall: 1) describe in detail the investment position of the City as of the end of the reporting period, 2) be prepared jointly by all Investment Officers, 3) be signed by each Investment Officer, 4) contain a summary statement, prepared in compliance with generally accepted accounting principles, of each pooled fund group including a) beginning market value for the reporting period; b) additions and changes to the market value during the period; c) ending market value for the period; and d) fully accrued interest for the reporting period, 5) state the book value and market value of each separately invested asset at the beginning and end of the reporting period by type of asset and fund type invested, 6) state the maturity date of each separately invested asset that has a maturity date, 7) state the account or fund or pooled fund group for which each individual investment was acquired, and 8) state the compliance of the investment portfolio as it relates to the investment strategy expressed in the Investment Policy and with relevant provisions of the Tex. Gov’t. Code Ch. 2256. Annually - The City Council shall review and approve the Investment Policy and investment strategies at least annually and be documented by rule, order, ordinance or resolution which shall include any changes made. Compliance Audit – The City’s external independent auditor will conduct an annual review of the quarterly reports in conjunction with the annual financial audit. The results of the audit will be reported to City Council. The audit will also review compliance with management controls on investments and adherence to this Policy. Page 8 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 F.The guidelines of retaining records for seven years as recommended in the Texas State Library Municipal Records Manual should be followed. The Chief Financial Officer shall oversee the filing and/or storing of investment records. G. Market prices for all public fund investments will be obtained and monitored through the use of Interactive Data Inc., an on-line data service or a similar qualified successor agency. VII. SUITABLE AND AUTHORIZED INVESTMENT SECURITIES A.Active Portfolio Management – The City intends to pursue an active versus a passive investment management philosophy. That is, securities may be sold before they mature if market conditions present an opportunity for the City to benefit from the trade. (Refer to Section VIII of this Policy.) In addition, the Investment Officers may at times restrict or prohibit the purchase of specific types of investments or issuers due to current market conditions. The City shall take all prudent measures consistent with this Investment Policy to liquidate an investment that no longer meets the required minimum rating standards, as per the Tex. Gov’t. Code Sec. 2256.021. However, if it is determined by the Investment Committee that the City would benefit from holding the securities to maturity to recapture its initial investment then the Investment Officers may act accordingly. The City is not required to liquidate investments that were authorized investments at the time of purchase. (Tex Gov’t. Code Sec. 2256.017) B.Authorized Investments – City funds governed by this Policy may be invested in the instruments described below, all of which are authorized by the Public Funds Investment Act. 1.Direct obligations of the United States of America, its agencies and instrumentalities (maturing in less than five (5)years). 2. Other obligations, the principal and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of, the United States of America, or any obligation fully guaranteed or insured by the Federal Deposit Insurance Corporation(maturing in less than five (5) years). 3.Direct obligations of the State of Texas or its agencies thereof, Counties, Cities and other political subdivisions rated as to investment quality by a nationally recognized investment rating firm not less than AA or its equivalent (maturing in less than two (2) years). 4.Other obligations , the principal and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of, the State of Texas, rated as to investment quality by a nationally recognized investment rating firm not less than AA or its equivalent (maturing in less than two (2) years). 5.Fully insured or collateralized certificates of deposit/share certificates issued by state and national banks or savings bank or a state or federal credit union (having its main or branch office in Texas) guaranteed or insured by the Federal Deposit Insurance Corporation or its successor or the National Credit Union Share Insurance Fund or its Page 9 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 successor; and secured by obligations in accordance with Section XII herein (maturing in less than two (2) years). In addition to the City’s authority to invest funds in certificates of deposit and share certificates stated above, an investment in certificates of deposit made in accordance with the following conditions is an authorized investment under Tex. Govt. Code Sec. 2256.010 (b): (1) the funds are invested by the City through a clearing broker registered with the Securities and Exchange Commission (SEC) and operating pursuant to SEC rule 15c3-3 (17 C.F.R. Section 240.15c3-3) with its main office or branch office in Texas and selected from a list adopted by the CityInvestment asCommittee as required by Section 2256.025; or a depository institution that has its main office or a branch office in this state and that is selected by the Investment CommitteeCity; (2) the selected broker or thedepository institution selectedby the City under Subdivision (1) arranges for the deposit of the funds in certificates of deposit in one or more federally insured depository institutions, wherever located for the account of the City; (3) the full amount of the principal and accrued interest of each of the certificates of deposit is insured by the United States or an instrumentality of the United States; (4) the selected broker or depository institution selected by the City under Subdivision(1) acts as custodian for the City with respect to the certificates of deposit issued for the account of the City;.and(5) at the same time that the funds are deposited and the certificates of deposit are issued for the account of the City, the depository institution selected by the City under Subdivision (1) receives an amount of deposits from customers of other federally insured depository institutions, wherever located, that is equal to or greater than the amount of the funds invested by the City through the depository institution selected under Subdivision (1). 6.Fully collateralized repurchase agreements provided the City has on file a signed Master Repurchase Agreement, approved by the City Attorney, which details eligible collateral, collateralizations ratios, standards for collateral custody and control, collateral valuation, and conditions for agreement termination. The repurchase agreement must have a defined termination date and be secured by obligations in accordance with Section XII of this Policy. It is required that the securities purchased by the City be assigned to the City, held in the City’s name and deposited at the time the investment is made with the City or with a third party selected and approved by the City. Repurchase agreements must be purchased through a primary government securities dealer, as defined by the Federal Reserve or a financial institution doing business in this State (termination date must be thirty (30) days or less). An exception to the thirtyday(30) days or less termination date may be made with respect to bond proceeds. The City may specifically authorize in the bond ordinance investments in repurchase agreements, such as a flexible repurchase agreement, with maturities in excess of 30 days subject to any required approvals from bond insurers. 7.Commercial paper that has a stated maturity of 270 days or less from the date of issuance and is rated A-1 or P-1 or an equivalent rating by at least two nationally recognized rating agencies. 8.Public (lLocal)fFundiInvestment pPools with a dollar weighted average maturity of 60 days or less. The pool must be approved (by through resolution) by the City Council to provide services to the City. The pool must and be continuously rated no lower than Aaa or AAAm or at an equivalent rating by at least one nationally recognized rating service. A public funds investment pool created to function as a Page 10 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 money market mutual fund must mark to market daily and stabilize at a $1 net asset value. The City may not invest an amount that exceeds 10 percent of the total assets of any one local government investment pool. To be eligible to receive funds from and invest funds on behalf of the City, an investment pool must furnish to the Investment Officer or other authorized representative an offering circular or other similar disclosure instrument that contains information required by the Tex. Gov’t. Code Sec. 2256.016. Investments will be made in a local government investment pool only after a thorough investigation of the pool and approval by the Investment Committee which shall at least annually review, revise and adopt the local government investment pool(s). 9.A Securities and Exchange Commission (SEC) registered,no load money market mutual fund which has a dollar weighted average stated maturity of 60 days or less and whose investment objectives includes the maintenance of a stable net asset value of $1 for each share. Furthermore, it must be rated not less than Aaa, AAAm or an equivalent rating by at least one nationally recognized rating service and the City must be provided with a prospectus and other information required by the SEC Act of 1934 or the Investment Company Act of 1940. The City may not invest an amount that exceeds 10 percent of the total assets of any one fund. Investments will be made in a money market mutual fund only after a thorough investigation of the fund and approval by the Investment Committee which shall, at least annually, review, revise and adopt the money market mutual fund(s). C.Prohibited Investments – The City’s authorized investment options are more restrictive than those allowed by state law. Furthermore, this Policy specifically prohibits investment in the securities listed below: 1.Obligations, whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal. 2. Obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security collateral and bears no interest. 3. All collateralized mortgage obligations. 4.Reverse repurchase agreements. D.Diversification – It is the policy of the City to diversify its investment portfolios. The diversification will protect interest income from the volatility of interest rates and the avoidance of undue concentration of assets in a specific maturity sector; therefore, portfolio maturities shall be staggered. In establishing specific diversification strategies, the following general policies and constraints shall apply: 1.Risk of market price volatility shall be controlled through maturity diversification and by controlling unacceptable maturity extensions and a mismatch of liabilities and assets. The maturity extension will be controlled by limiting the weighted average maturity of the internal investment pool portfolio to 550 days. All long-term maturities will be intended to cover long-term liabilities. In addition, at least five (5%) percent of the funds in the investment pool portfolio will be liquid at all times. Page 11 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 Investment pool liquidity,which consists of immediately available fundsis, is defined as shares in a local government investment pool and money market mutual fund, as well as bank demand deposit balances. Although there is no maximum defined portfolio liquidity position, it is the intent of this Policy to seek out higher yielding alternative investments in accordance with the prioritized objectives of preservation and safety of principal, meeting liquidity needs and yield enhancement as stated throughout the Public Funds Investment Act. 2.The Investment Committee shall establish strategies and guidelines for the percentage of the total portfolio that may be invested in U.S. Treasury Securities, federal agencies/instrumentalities, repurchase agreements, and insured/collateralized certificates of deposit and other securities or obligations. The Investment Committee shall conduct a quarterly review of these guidelines, and shall evaluate the probability of market and default risk in various investment sectors as part of its considerations. 3.Risk of principal loss in the portfolio as a whole shall be minimized by diversifying investment types according to the following limitations based on book values: % of Portfolio Investment Type U.S.GovernmentTreasury Notes/Bills & Obligations 100% U.S.GovernmentAgencies & Instrumentalities 100% State of Texas Obligations, Agencies & Local Gov’t. 15% Local Government Investment Pools 50% Repurchase Agreements 20% Certificates of Deposit (fully insured or collateralized) 35% U.S. Money Market Mutual Fund 35% Callable U.S. Agencies/Instrumentalities 20% Commercial Paper 5% By Institution: Repurchase Agreements No more than 1015% Collateralized Certificates of Deposit No more than 15% All Other (except U.S. Treasuries) No more than 35% 4.Purchases of securities with stated maturities greater than the maximum authorized under thisSsection VIIB require prior City Council approval. VIII. SALE OF SECURITIES The City’s policy is to hold all securities to maturity. However, securities may be sold to minimize the potential loss of principal on a security whose credit quality has declined, to swap into another security which would improve the quality, yield or target duration of the portfolio or to meet unanticipated liquidity needs.of the portfolio. A horizon analysis is required for each swap proving benefit to the Citybefore the trade decision is made, and will be held in the file for record keeping. IX. COMPETITIVE BIDDING Page 12 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 It is the policy of the City to require competitive bidding for all individual security purchases and sales, as well as for certificates of deposit. Exceptions include: A.Transactions with money market mutual funds and local government investment pools which are deemed to be made at prevailing market rates. B.Treasury and agency securities purchased as new issues through an approved broker/dealer, financial institution or investment advisor. C. Automatic overnight “sweep” transactions with the City’s depository bank. At least three bids or offers must be solicited for all other transactions involving individual securities. The City’s investment advisor is also required to solicit at least three bids or offers when transacting trades on the City’s behalf. In situations where the exact security is not offered by other broker/dealers, offers on the closest comparable investment may be used to establish a fair market price for the security. In the case of a certificate of deposit purchase, at least two other offers should be solicited to provide a comparison. When few, if any, banks wish to participate then staff may use another authorized investment of similar maturity for evaluation purposes. The quotes may be accepted orally, in writing, electronically, or any combination of these methods. The Investment Committee may approve exceptions on a case by case basis or on a general basis in the form of guidelines. These guidelines shall take into consideration the investment type, maturity date, amount and potential disruptiveness to the City’s investment strategy. X. ARBITRAGE The Tax Reform Act of 1986 provided limitations restricting the City’s investmenting of tax-exempt General Obligation Bbond proceeds.and debt service income. Revised arbitrage rebate provisions require that the City compute earnings on investment from each issue of bonds on an annual basis to determine if a rebate is required. To determine the City’s arbitrage position, the City is required to perform specific calculations relative to the actual yield earned on the investment of the funds and the yield that could have been earned if the funds had been invested at a rate equal to the yield on the bonds sold by the City. The rebate provision states that periodically (not less than once every five years, and not later than sixty days after maturity of the bonds), the City is required to pay the U.S. Treasury a rebate of excess earnings based on the City’s positive arbitrage position. The Tax Reform restrictions require precision in the monitoring and recording facets of investments as a whole, and particularly as they relate to yields and computations so as to insure compliance. Failure to comply may dictate that the bonds become taxable, retroactively from the date of issuance The City’s investment position, relative to the revised arbitrage restrictions, is the continued pursuit of maximizing yield on applicable investments while ensuring the safety of capital and liquidity. It is fiscally prudent to continue the maximization of yield and rebate excess earnings, if necessary. XI. SELECTION OF BANKS, BROKER/DEALERS AND INVESTMENT ADVISORS A.Depository – City Council shall, by ordinance, “select and designate one or more banking institutions as the depository for the monies and funds of the City” in accordance with the requirement of Tex. Loc. Gov’t. Code Ch. 105. At least every five years a depository shall be selected through the City’s banking services procurement process, which shall include a formal request for proposal (RFP). The selection of a depository will be determined by a competitive process and evaluated on the following criteria: Page 13 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 1. Qualified as a depository for public funds in accordance with state and local laws. 2. Provided requested information or financial statements for the periods specified. 3. Complied with all requirements in the banking RFP. 4. Completed responses to all required items on the proposal form. 5.Offered lowest net banking service cost, consistent with the ability to provide an appropriate level of service. 6.Met credit worthiness and financial standards. B.Investment Broker/Dealers – If the City has not retained an investment advisor, then the Investment Committee shall be responsible for adopting the list of qualified brokers/dealers and financial institutions authorized to engage in investment transactions with the City. Authorized firms may include primary dealers or regional broker/dealers that qualify under SEC Rule 15C3-1 (uniform net capital rule) and qualified depositories as established by the Tex. Loc. Gov’t. Code Ch. 105. The Investment Committee shall base its evaluation of security broker/dealers and financial institutions upon: 1.Financial condition, strength and capability to fulfill commitments. 2.Overall reputation with other broker/dealers or investors. 3.Regulatory status of the broker/dealer. 4.Background and expertise of the individual representatives. 5.Ability to provide additional advisory services. The Investment Committee must annually review the list of qualified broker/dealers authorized to engage in investment transactions with the City. Investment Officers, or their authorized representatives, shall not conduct business with any firm with whom public entities have sustained realized losses on investments or whose name the Investment Committee has removed from an approved list. C. Investment Advisor – The City may retain the services of an investment advisory firm registered under the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-1 et seq.) or with the State Securities Board to assist in the review of cash flow requirements, the formulation of investment strategies, and the execution of security purchases, sales and deliveries. The investment advisory contract with the City may not be for a term longer than two years and its renewal or extension must be approved by the City Council by ordinance or resolution as required by the Tex. Gov’t. Code Sec.2256.003(b). D.Compliance – A qualified representative from any firm offering to engage in investment transactions with the City is required to sign a written instrument upon receiving and reviewing a copy of the City’s Investment Policy. Investments shall only be made with those business organizations (including money market mutual funds and local government investment pools) which have provided the City with this written instrument executed by a qualified representative of the firm, acknowledging that the business organization has: Page 14 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 1. Received and reviewed the City’s Investment Policy. 2.Implemented reasonable procedures and controls in an effort to preclude investment transactions conducted between the City and the organization that are not authorized by the City’s Investment Policy, except to the extent that this authorization is dependent on an analysis of the makeup of the City’s entire portfolio or requires an interpretation of subjective investment standards. 3. If the City has contracted with an investment advisor, the advisor shall be responsible for performing financial due diligence on the City’s behalf. On an annual basis, the advisor will provide the City with a list of its authorized broker/dealers, as well as the requiredwritten instrument describedabove. XII. COLLATERALIZATION, SAFEKEEPING AND CUSTODY A.Collateralization - The City requires that all uninsured collected balances plus accrued interest, if any, in depository accounts be secured in accordance with the requirements of state law. Financial institutions serving as City depositories will be required to sign a depository agreement with the City which details eligible collateral, collateralization ratios, standards for collateral custody and control, collateral valuation, rights of substitution and conditions for agreement termination. The City requires that all securities purchased under the terms of a repurchase agreement be assigned to the City in accordance with state law. Dealers and financial institutions wishing to transact repurchase agreements with the City will be required to sign a Master Repurchase Agreement which details eligible collateral, collateralization ratios, standards for collateral custody and control, collateral valuation, rights of substitution, and conditions for agreement termination. The City requires that all uninsured certificates of deposit plus accrued interest held with a depository be secured in accordance with the requirements of state law. Financial institutions will be required to sign a written depository and security agreement which stipulates eligible collateral, collateralization ratios, standards for collateral custody and control, collateral valuation, rights of substitution, and conditions for agreement termination. Collateral will always be held by an independent third party with which the City has a current custodial agreement and shall be reviewed at least monthly to ensure that the market value of the pledged securities is adequate. All deposits and investments of City funds, other than direct security purchases, money market mutual funds and local government investment pools shall be secured by pledged collateral set at no less than 102 percent of the market value of the principal and accrued interest on the deposits or investments less an amount insured by FDIC. Eligible collateral to secure the City’s deposits include: 1. Direct obligations of the United States government. 2. Other obligations, the principal and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of, the United States government. 3.3.Direct obligations of agencies or instrumentalities of the United States government, including letters of credit. Page 15 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 4.Cash The City will reject adjustable rate mortgages (ARMs), collateralized mortgage obligations (CMOs), step-ups, variable rate instruments (except U.S. Treasury inflation protected securities), or securities that are not found on common pricing systems. B.Safekeeping and Custody – Safekeeping and custody of the City’s investment securities shall be in accordance with state law. All security transactions, except local government investment pool and money market mutual fund transactions, shall be conducted on a delivery versus payment (DVP) basis. Investment securities will be held by a third party custodian designated by the City, and be required to issue safekeeping confirmation noticesreceipts clearly detailing that the securities are owned by the City. Safekeeping and custody of collateral pledged to the City shall be in accordance with state law. Collateral will be held by a third party custodian designated by the City. The custodian , and is required toissue safekeeping confirmation notices clearly showing that the securities arepledged to the City.as evidencedby safekeeping receipts from the institution holding the securities. C.Subject to Audit – All collateral shall be subject to inspection and audit by the Chief Financial Officer, or designee, as well as the City’s independent auditors. XIII. MANAGEMENT AND INTERNAL CONTROLS Controls shall be designed to prevent losses of public funds arising from fraud, employee error, and misrepresentation by third parties, unanticipated changes in financial markets, or imprudent actions by employees or Investment Officers of the City. Controls and managerial emphasis deemed most important that shall be employed include the following: Imperative Controls -Custodian safekeeping receiptsconfirmation notices records management -Avoidance of bearer-form securities -Documentation of investment bidding events -Written confirmation of telephone transactions -Reconcilements and comparisons of security receiptsconfirmation notices with the investment records -Compliance with Investment Policy -Verification of all interest income and security purchase and sell computations Controls Where Practical Page 16 of 16 POLICY/ADMINISTRATIVE PROCEDURE/ADMINISTRATIVE DIRECTIVE REFERENCE NUMBER: TITLE: INVESTMENT POLICY 403.06 -Control of Collusion -Separation of duties -Separation of transaction authority between Accounting and record-keeping -Clear delegation of authority -Accurate and timely reports -Validation of investment maturity decisions with supporting cash flow data -Adequate training and development of Investment Officersials and staff authorized to execute investment transactions -Review of financial conditions of all brokers/dealers, and depository institutions -Staying Access to information informed about market conditions, changes and trends that require adjustments to investment strategies. XIV. INVESTMENT POLICY ADOPTION The Investment Policy shall be formally approved and adopted by resolution of the City Council and reviewed annually in accordance with the provisions of the Public Funds Investment Act of the Texas Government Code Chapter 2256. AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011 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 Technology Services Fund with Certificates of Obligation with an aggregate maximum principal amount equal to $215,000 to allow the Fire Department and Police Department to purchase thirty eight mobile data computers, and providing an effective date. BACKGROUND The Technology Services Department will be utilizing $215,000 in Certificates of Obligation (COs) to purchase mobile data computers (MDCs) which provides the computing power needed to access applications for 24/7 emergency operations. Approval of this item would provide funding for the replacement of the existing 18 MDCs used in Fire and Emergency Medical Services (EMS) vehicles and 20 devices used for the Police Department. These units have far exceeded their life span and all effective and efficient upgrades have been performed; exhausting all other options. Due to necessary lead times in the purchase of this equipment, Technology Services would like to initiate this purchase prior to the sale of Certificates of Obligation in April 2012. Initially, expenditures will be charged to the Technology Services Fund and will be reimbursed with COs sold in Fiscal Year (FY) 2011-12. In conjunction with this item, the purchase of the MDCs are also being separately presented for City Council consideration on November 15, 2011. RECOMMENDATION Approve the reimbursement ordinance for expenditures related to the purchase of mobile data computers. PRIOR ACTION/REVIEW (Council, Boards, Commissions) both Fire and Police. Council approved the purchase on September 26, 2006, Ordinance No. 2006-269. The Audit/Finance Committee discussed this item at their November 7, 2011, meeting. Agenda Information Sheet November 15, 2011 Page 2 FISCAL INFORMATION The Fire Department MDCs were included in the adopted FY 2011-12 Budget. The Police Department MDCs were not contemplated in the FY 2011-12 Budget, but the equipment is needed to replace the existing MDCs and funding has been identified. This ordinance will allow $215,000 from the Technology Services Fund to be expended and subsequently reimbursed with COs. Respectfully submitted: Bryan Langley Chief Financial Officer AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Kevin Gunn at 349-8595 ACM: Jon Fortune SUBJECT Consider adoption of an ordinance awarding a contract for the purchase of eighteen Mobile Data Computers (MDCs) for the City of Denton Fire Department and twenty Mobile Data Computers for the City of Denton Police Department as awarded by the State of Texas Department of Information Resources (DIR) through the Go Direct Program, contract number DIR-SDD-1365; providing for the expenditure of funds therefor; and providing an effective date (File 4741- Purchase of Thirty Eight Toughbook Mobile Data Computers awarded to John Wright Associates, Inc. in the amount of $211,112.70). BACKGROUND Mobile connectivity in vehicles accessing systems using public safety applications is vital to perform day-to-day emergency operations. At the heart of the system is the mobile data computer (MDC) which provides the computing power needed to access these applications for 24/7 emergency operations. This proposal would provide for the replacement of the existing MDCs used in Fire, Emergency Medical Services (EMS), and Police vehicles. The laptop computers and the Toughbook series is by far superior to other rugged computers on the market today. The devices can withstand variable temperatures, harsh environmental conditions, rough handling and vibrations. Key components of the Mobile Data Computer systems for Police, Fire, and EMS include a ruggedized laptop, docking station, battery and modem. Laptops generally have a three to four year serviceable life. The existing units have far exceeded their life span. Everyday use of the equipment under harsh conditions has contributed to the deterioration of the units. Advances in technology have also surpassed the capabilities of the current units. All effective and efficient upgrades have been performed; exhausting all other options. The proposed new units have a faster processor speed and a built in Gobi card. The faster processor speed will allow personnel to obtain and access information such as call comments, maps and loaded pre-fire plans much quicker as they are responding. The built in Gobi card is a mobile broadband wireless card that provides global connectivity for the end user. Agenda Information Sheet November 15, 2011 Page 2 BACKGROUND CONTINUED This new technology will allow us to choose any broadband (internet) service provider available; therefore giving more options to service coverage and controlling cost. Current units utilize an external modem for broadband connection tied to a particular service provider like AT&T or Verizon. The new units are compatible with existing systems and are also capable of interfacing with future upgrades or changes. Three quotes were obtained by Technology Services through the State of Texas Department of Information Resources (DIR) contract for 38 Toughbook units, docking hardware for mounting, electronic accessories and a three year warranty. John Wright Associates, Inc. submitted the lowest quote which provides the best value. The City will receive discounted pricing of six to twenty six percent through the DIR pricing schedule. The Technology Services Department could not identify any local vendors that provide the required equipment and accessories. RECOMMENDATION Award toJohn Wright Associates, Inc. in the amount of $211,112.70. PRINCIPAL PLACE OF BUSINESS John Wright Associates, Inc. Arlington, TX ESTIMATED SCHEDULE OF PROJECT Acquisition, installation and use of equipment would begin upon Council approval and would be completed during the current fiscal year. PRIOR ACTION/REVIEW (Council, Boards, Commissions) The current equipment was part of a Public Safety package for the purc both Fire and Police. Council approved the purchase on September 26, 2006, Ordinance No. 2006-269. The Audit/Finance Committee discussed this item at the November 7, 2011, meeting. Agenda Information Sheet November 15, 2011 Page 3 FISCAL INFORMATION The Fire Department MDCs were included in the adopted FY 2011-12 Budget. The Police Department MDCs were not contemplated in the FY 2011-12 Budget, but the equipment is needed to replace the existing MDCs and funding has been identified. A Certificate of Obligation job account will be set up and a requisition entered in to the Purchasing software system upon Council approval. EXHIBIT Exhibit 1 Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance ORDINANCE NO. _______ AN ORDINANCE AWARDING A CONTRACT FOR THE PURCHASE OF EIGHTEEN MOBILE DATA COMPUTERS (MDCS) FOR THE CITY OF DENTON FIRE DEPARTMENT AND TWENTY MOBILE DATA COMPUTERS FOR THE CITY OF DENTON POLICE DEPARTMENT AS AWARDED BY THE STATE OF TEXAS DEPARTMENT OF INFORMATION RESOURCES (DIR) THROUGH THE GO DIRECT PROGRAM, CONTRACT NUMBER DIR-SDD-1365; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (FILE 4741-PURCHASE OF THIRTY EIGHT TOUGHBOOK MOBILE DATA COMPUTERS AWARDED TO JOHN WRIGHT ASSOCIATES, INC. IN THE AMOUNT OF $211,112.70). WHEREAS, pursuant to Resolution 92-019, the State Purchasing Building and Procurement Commission 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 on behalf of the City of Denton; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described materials, equipment, supplies or services can be purchased by the City through the Building and Procurement Commission programs at less cost than the City would expend if bidding these items individually; 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 purchase order for materials, equipment, supplies, or services, shown in File 4741 listed hereon, and on file in the office of the Purchasing Agent, are hereby approved: FILE NUMER VENDOR AMOUNT 4741 John Wright Associates, Inc. $211,112.70 SECTION 2. By the acceptance and approval of the above numbered items set forth in the File, the City accepts the offer of the persons submitting the bids to the Building and Procurement Commission for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, conditions, specifications, standards, quantities and for the specified sums contained in the bid documents and related documents filed with the Building and Procurement Commission, and the purchase orders issued by the City. SECTION 3. Should the City and persons submitting approved and accepted items set forth in the File wish to enter into a formal written agreement as a result of the City's ratification of bids awarded by the Building and Procurement Commission, the City Manager or his designated representative is hereby authorized to execute the written contract; provided that the written contract is in accordance with the terms, conditions, specifications and standards contained in the Proposal submitted to the Building and Procurement Commission, quantities and specified sums contained in the City's purchase orders, and related documents herein approved and accepted. SECTION 4. By the acceptance and approval of the above enumerated bids, the City Council hereby authorizes the expenditure of funds therefor 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 _______________________, 2011. ______________________________ MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: _________________________________ 3-ORD-File 4741 AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Bryan Langley at 349-8224 ACM: Jon Fortune SUBJECT Collection Services [Part D: xas and Linebarger, Goggan, Blair, and Sampson, LLP, a corporation; providing for the expenditure of funds therefor; and providing an effective date (RFP 4633Agreement for Collection Services awarded to Linebarger, Goggan, Blair, and Sampson, LLP a corporation in an amount which is contingent upon its monetary recoveries from persons, in accordance with the percentages expressed in its price proposal which is on file with the City of Denton Purchasing Department). (The Audit/Finance Committee recommends approval 3-0). BACKGROUND INFORMATION Municipal Court is responsible for the collection of fines resulting from the issuance of citations by various law enforcement agencies. After a defendant enters a plea before the Judge, a fine is assessed as a part of the judgment. Payment of the fine is due at the time of the assessment; however, the defendant also has the option to request a thirty (30) day extension by completing a Collections Contact Information sheet. If the defendant is unable to pay within the agreed thirty day timeframe, the defendant may apply for an additional payment agreement with the Court Collections office. If the defendant does not qualify for an additional arrangement, the fine amount becomes due immediately. A Capias Pro-Fine Wa within the initial thirty (30) day timeframe, fails to qualify for an additional arrangement or defaults on an existing payment arrangement. A $50.00 fee is added to the fine upon issuance of the warrant. If the defendant has not remitted payment within sixty (60) days from the activation date of agreement with a collection vendor includes a mark-up of thirty percent (30%), as mandated by the Texas Code of Criminal Procedures, Article 103.0031, to the total debt which a vendor keeps upon collection of the debt. In addition to Capias Pro-Fine Warrants, the Municipal Court also sends to a vendor Arrest Warrants in which the defendant has never appeared to answer to the charge. Since October 2008, an annual average of $1,213,142.03 in citations and fines have been referred to a third party collection agency. Services Bureau (MSB) for collection services expired in October 2011. Accordingly, the City requested proposals from qualified vendors to provide collection services. Agenda Information Sheet November 15, 2011 Page 2 RFP INFORMATION The City entered into an agreement with MSB fines and warrants in January 2006. Prior to the expiration of this agreement, Municipal Court partnered with the other departments within the City to issue a Request for Proposal (RFP) to vendors who are qualified to provide collection services. Because the collection of debt is handled somewhat differently by each department, the receivables were separated for evaluation purposes into the following four parts: Utilities (Part A), Ambulance (Part B), Code Enforcement and miscellaneous receivables (Part C), and Municipal Court fines (Part D). A selection committee comprised of five representatives from Customer Service, Fire Administration, Treasury, Budget, and Municipal Court departments reviewed the sixteen proposals that were submitted. Proposals for the collection of delinquent Municipal Court fines and warrants (Part D) were evaluated utilizing the following criteria: 1.Years experience in Texas municipal court collections 20% 2.References listed and response 20% 3.Experience with electronic data and payment transfer 15% 4.Warrant collection experience 10% 5.Collection procedures 15% 6. 10% 7.Process and timing of payments to City and billing for services 10% After reviewing the submissions by each vendor, four vendors were selected for reference checks for part D. After the references were contacted by the evaluation committee members, the committee interviewed the top three firms for part D (Linebarger, MSB, and MVBA). evaluation of the firms selected for part D was to capture the most qualified firm who demonstrated extensive experience in working with Texas municipal courts while offering de software system. The initial committee ranking for each firm is shown in Exhibit 1. Agenda Information Sheet November 15, 2011 Page 3 RFP INFORMATION (CONTINUED) The committee met with the top three firms selected for part D to discuss the criteria and to ensure that each finalist had a clear understanding of what was required by court staff including the Municipal Court Judge. The committee reevaluated the proposals given during the presentation and interview phase, and the three firms were ranked based on the same evaluation criteria (Exhibit 2). During this process, it was determined by the evaluation committee that revenue stream by taking advantag experience and reputation in working closely with a vast range of municipal courts across Texas. -of-the-art technological compatibility with Incode, which includes an automated payment posting program. -65%), the City is projected to recover approximately $492,211 (based on estimated 40 percent (40%) recovery rate) over the two year contract term for new outstanding Municipal Court cases, after the collection fees are paid. In compliance with the collections section of the Texas Code of agreement with the firm, the State mandated fee of 30 percent (30%) will be added to each delinquent fine collected. Subsequently, the City will receive the full amount of each fine collected, minus the 30 percent (30%) collection fee. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On November 7, 2011, the Audit/Finance Committee recommended approval to forward this item to the City Council for consideration. RECOMMENDATION Staff recommends the award of RFP 4633-Two Year Contract for Collection Services for Municipal Court Fines to Linebarger, Goggan, Blair, and Sampson, LLP. PRINCIPAL PLACE OF BUSINESS Linebarger, Goggan, Blair, and Sampson, LLP Fort Worth, TX ESTIMATED SCHEDULE OF PROJECT This is a two year contract with options to renew for three additional years with all terms and conditions remaining the same. Agenda Information Sheet November 15, 2011 Page 4 FISCAL INFORMATION City funds will be expended. EXHIBITS Exhibit 1: Committee Original Ranking Sheet Exhibit 2: Committee Re-evaluation Ranking Sheet Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-RFP 4633 Municipal Court Collections ORDINANCE NO. _________________ AN ORDINANCE ACCEPTING SEALED PROPOSALS AND AWARDING AN BY AND BETWEEN THE CITY OF DENTON, TEXAS AND LINEBARGER, GOGGAN, BLAIR, AND SAMPSON, LLP, A CORPORATION; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (RFP 4633AGREEMENT FOR COLLECTION SERVICES AWARDED TO LINEBARGER, GOGGAN, BLAIR, AND SAMPSON, LLP A CORPORATION IN AN AMOUNT WHICH IS CONTINGENT UPON ITS MONETARY RECOVERIES FROM PERSONS, IN ACCORDANCE WITH THE PERCENTAGES EXPRESSED IN ITS PRICE PROPOSAL WHICH IS ON FILE WITH THE CITY OF DENTON PURCHASING DEPARTMENT). WHEREAS, Article 103.0031 of the Code of Criminal Procedure provides that the governing body of a municipality may enter into a contract with an attorney or private vendor for collection services and may also authorize the addition of collection fees in the amount of 30% on each debt or account receivable such as fines, fees, restitution and other debts and costs, not including forfeited bonds, that are more than 60 days past due and that have been referred to the private vendor or attorney; and WHEREAS, by Ordinance No. 2001-295, approved by the City Council on August 21, 2001, the City Council authorized the additional 30% collection fee allowed by Article 103.0031 of the Code of Criminal Procedure on each debt or account receivable such as fines, fees, restitution, and other debts or costs, not including forfeited bonds, that are more than sixty days past due and that have been referred to a private vendor or attorney; and Goggan, Blair & Sampson, LLP, is the best qualified firm; and WHEREAS, the City Council hereby finds and concludes that Linebarger, Goggan, Blair & Sampson, LLP, is appropriately qualified under the provisions of the law to be retained as a municipal court collection agency for the City; and WHEREAS, the Code of Criminal Procedure provides for payment of the 30% additional collection fee for the foregoing services and the City Council deems it in the public interest to enter into a Contract For The Collection of Municipal Court Fines with Linebarger, Goggan, Blair & Sampson, LLP, for municipal court collection services; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The recitations in the preamble are true and correct, and are incorporated herewith as part of this Ordinance. SECTION 2. The City Manager is hereby authorized to execute a Contract For The Collection Of Municipal Court Fines with Linebarger, Goggan, Blair & Sampson, LLP,, relating to municipal court collection services as set forth above and authorized by Article 103.0031 of the Code of Criminal Procedure, in substantially the form of the Contract attached hereto and incorporated herein by reference. SECTION 3. The award of this Agreement is on the basis of the demonstrated competence and qualifications of Linebarger, Goggan, Blair & Sampson, LLP, and the ability of Linebarger, Goggan, Blair & Sampson, LLP, to perform the services needed by the City for a fair and reasonable price in accordance with the fees authorized by the Code of Criminal Procedure. SECTION 4 This Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the _______ day of _______________________, 2011. ______________________________ MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: _________________________________ APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: _________________________________ Page 2 of 2 AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Bryan Langley 349-8224 ACM: Jon Fortune SUBJECT Collection Services [Parts A-C: Utility, EMS, Code Enforcement, Returned and Miscellaneous corporation; providing for the expenditure of funds therefor and providing an effective date (RFP 4633Agreement for Collection Services awarded to Credit Systems International, Inc., a corporation in an amount which is contingent upon its monetary recoveries from persons, in accordance with the percentages expressed in its price proposal which is on file with the City of Denton Purchasing Department). (The Audit/Finance Committee recommends approval 3-0). BACKGROUND The City of Denton provides a diverse array of services to the community, and in the course of providing these functions, invoices are sent to various individuals and businesses for services rendered. Below is a brief discussion of the key services billed, and the process that is used to receive payments. Utility Service The Utilities Customer Service department is responsible for the billing and collection of utility revenues for services such as Electric, Solid Waste, Water, Wastewater, and Drainage. Each of the departments responsible for these services presents Customer Service with data necessary to Payment for the current service charges outlined on the utility bill is due sixteen (16) days after assessed a late payment fee twelve (12) calendar days after the due date. If payment is not remitted 1% of the past due balance is assessed. Disconnection of utility service is typically scheduled if the bill is still unpaid twenty-two (22) days after the due date. Customer Service personnel will behalf. Over the last two fiscal years, Customer Service has referred an annual average of $752,455 in unpaid utility debts to a third party collection agency. Agenda Information Sheet November 15, 2011 Page 2 BACKGROUND (CONTINUED) Emergency Medical Services The Fire department establishes receivables for patients who receive care from Emergency Medical Services (EMS). These services can include medical assessments, procedures, medications, and physical transport. The paramedic providing care to the patient completes a r within ten (10) business days of the service. If a balance remains after the p has remitted payment, a bill is provided to the patient with a due date of thirty (30) days after presentment. Similarly, a patient receiving care without insurance receives a bill with a due date of thirty (30) days after presentment. Patients who have not remitted payment in accordance with the due date can receive up to three additional reminder notices in the ninety (90) days following the due date. During that time, no late fees or penalties are assessed and service is never refused on the basis of an unpaid debt. If the debt remains unpaid after 180 days, a third party collection vendor is asked to pursue the debt. Over the last two fiscal years, the Fire Department has referred an annual average of $863,100 to a third party collection agency. Miscellaneous Receivables The Finance department is responsible for collecting funds due to the City because of a returned payment. Payments are initially submitted to the City of Denton as payment for services provided to the citizen. If this point, Treasury is notified by the bank that the payment has been returned, and a letter is sent to the check writer demanding restitution for the face value of the check as well as a $27.00 returned item fee. If restitution is not made within ten (10) business days of the dated letter, a third party collection vendor is asked to pursue the debt. The Budget office is responsible for billing many of the additional receivables not accounted for by other departments. These receivables include charges for false alarms and inspections conducted by the Fire Department, as well as escorts and animal control services provided by the Police Department. In addition, Budget personnel also handle receivables for Code Enforcement, Airport leases, fuel charges, gas well inspections, Warehouse outside sales, and the charges associated with various special events. Billing for Fire, Police, and Fleet services occur on a monthly basis while other bills are issued on an annual or ad hoc basis. Each bill for the aforementioned areas is due within thirty (30) days of issuance. In the event that any receivable is unpaid 120 days after the due date, a third party collection vendor is asked to pursue the debt. Over the last two fiscal years, an annual average of $18,200 in miscellaneous receivables has been referred to a third party collection agency. Agenda Information Sheet November 15, 2011 Page 3 BACKGROUND (CONTINUED) Current External Collection Procedures The City currently contracts with Credit Systems International, Inc. (CSII), for the collection of unpaid debts. Once CSII receives a debt, their staff complete an investigation of the debtor by reviewing bankruptcy filings, litigation records, change of address requests, and various other CSII commences with their collection efforts. contact the customer by telephone. If CSII is successful in making contact with the debtor, their representative informs them of the debt and attempts to collect payment or set up a payment staff focuses on providing the appropriate payment options to each debtor. In addition, part of Once a dispute is received, they immediately consult with the City for assistance in seeking a resolution. The fact that the City has received only two cust performance since 2002 is evidence that CSII is dedicated to customer satisfaction. reported to the credit reporting agencies within thirty- with CSII. During this time period and throughout the time in which the debt remains with CSII, collection efforts will continue. These steps can also include skip tracing if the debtor is not initially located. To locate debtors, CSII utilizes a number of resources such as public records, database. If for any reason the City wishes to recall an account, CSII will return the account and pursue no further collection action without penalty to the City. proposals from qualified vendors to provide collection services. RFP INFORMATION Since 2002, t Utilities Customer Service, Finance, and Fire departments have utilized Credit Systems International, Inc., (CSII) to assist with the collection of delinquent receivables. Prior to the expiration of this agreement, Utilities Customer Service partnered with the aforementioned departments as well as Municipal Court to issue a Request for Proposal (RFP) to vendors who are qualified to provide collection services. Because the collection of debt is handled somewhat differently by each department, the receivables were separated for evaluation purposes. The receivables were segregated into the following four parts: Utilities (Part A), Ambulance (Part B), Code Enforcement and miscellaneous receivables (Part C), and Municipal Court fines (Part D). Agenda Information Sheet November 15, 2011 Page 4 RFP INFORMATION (CONTINUED) A selection committee comprised of five representatives from Customer Service, Fire Administration, Treasury, Budget, and Municipal Court departments reviewed the sixteen proposals that were submitted. Proposals for the collection of utility service, ambulance service, code enforcement, and miscellaneous receivables (Parts A C) were solicited utilizing the following criteria to evaluate the best value: 1.Compliance with specifications 25% 2. 20% of utilities, ambulance, miscellaneous receivable accounts code enforcement, and returned items (checks) 3.Number of current contracts with other Texas municipal 15% governmental entities 4.Price for services 25% 5.Process and timing of payments to City and billing for services 15% e Texas Code of Criminal Procedures, Article 103.0031, these types of uncollected debts cannot be reported to a credit bureau. As a result, a different set of evaluation criteria was utilized, and a separate vendor, Linebarger, Goggan, Blair, & Sampson, LLP (Linebarger), was ultimately hile evaluating firms for parts A through C was to ensure that the firm had extensive experience working with utility services, a proven track record of debt recovery, a sound approach toward reporting to all three credit bureaus, and a proven capability to offer extensive on demand reporting. After reviewing the submissions by each vendor, three vendors were selected for reference checks for parts A through C, and the committee then interviewed the top two firms (CSII and MVBA). The initial evaluation summary is attached as Exhibit 1. After the initial evaluation, the committee met individually with the top two evaluated firms for understood each department their rate proposals with the additional outstanding utility and ambulance account information and give their best and final offer. Each of the two finalists (CSII and MVBA) for parts A original and revised pricing submissions are attached as Exhibit 2 and 2A. The committee reevaluated the proposals given during the presentation and interview phase, and the firms were ranked based on the same evaluation criteria (Exhibit 3). Agenda Information Sheet November 15, 2011 Page 5 RFP INFORMATION (CONTINUED) After evaluating all proposals, CSII was determined to be the best proposal by the committee. are paid. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On November 7, 2011, the Audit/Finance Committee recommended approval to forward this item to the City Council for consideration. RECOMMENDATION Staff recommends the award of RFP 4633- Agreement for Collection Services [Parts A-C: Utility, EMS, Code Enforcement, Returned and Miscellaneous Items to Credit Systems International, Inc. in the annual estimated amount of $92,000. PRINCIPAL PLACE OF BUSINESS Credit Systems International, Inc. Fort Worth, TX ESTIMATED SCHEDULE OF PROJECT This is a two year contract with options to renew for three additional years with all terms and conditions remaining the same. FISCAL INFORMATION The following amounts are budgeted annually by the various using departments to be paid to Credit Systems International, Inc. for the collection of delinquent receivables. $65,000 for Utility accounts $25,000 for EMS accounts $500 for Code Enforcement $1,000 for Miscellaneous Receivables Agenda Information Sheet November 15, 2011 Page 6 EXHIBITS Exhibit 1: Committee Original Ranking Sheet Exhibit 2: Original Price Proposals Exhibit 3: Committee Re-evaluation Ranking Sheet Exhibit 4: Contract Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-File 4633 Utilities, EMS Billing, Code Enforcement, Misc. Receivables EXHIBIT 2A - Revised Pricing RFSP #4633 - Collection Services Finalists Proposed Pricing RFSP # 4633 Opened: April 26, 2011 Request for Competitive Sealed Proposals for Collection Services for Utilities and Ambulance Billing, Code Enforcement, Municipal Court Fines, Miscellaneous Receivables, and Returned Items Parts A - C FinalistPart D Finalist Description Item VendorVendorVendorVendor Linebarger CSIMVBAGoggan, Blair & MSB Sampson, LLP Principal Place of Business Fort Worth, TXRound Rock, TXFort Worth, TXAustin, TX A Outstanding accounts (August 2003 to October 2006) 1 18.9%17% N/AN/A Outstanding accounts 1a (November 2006 to May 2011) 21.9%17%N/AN/A Monthly collections - 2 Tiers: Accts placed up to 180 Days 2 from Service Term - 17.9%15%N/AN/A Accts placed up over 180 Days from Service Term - 21.9%15%N/AN/A B 1 April 2006) 20.9% 21%N/AN/A Outstanding accounts (May 1a 2006 - May 2011) 24.9% 21%N/AN/A Monthly collections (Avg. age: 240 days) Accts placed up to 210 Days 2 from Transport - 22.9% 19%N/AN/A Accts placed up over 210 Days from Transport - 24.9% 19%N/AN/A PART C - Code Enforcement Liens including mowing, trash and debris removal and other C liens or judgments, return items (returned checks) 1 August 201021.90%17.5%N/AN/A Monthly collections (Avg. age: 2 45 days) 21.90%17.5%N/AN/A PART D - Municipal Court Class C Misdemeanor violations D 1 February 2011 N/A30%30%30% Monthly collections (Avg. age: 2 870 days) N/A30%30%30% Monthly collections for Utilities/ Ambulance/ Misc. N/AN/AN/A ENo Bid Rec./ Code Enforcement Liens/ Mun. Court (combined) Account collected by City if account had been turned over to N/AN/AN/A0% F the vendor that collections has not yet been actively pursued. Addendum #1 YesYesYesYes Addendum #2 YesYesYesYes Addendum #3 YesYesYesYes *Rate is a portion of the evaluation, except Part D- Municipal Court. 7/15/2011 RFP# 4633 Evaluation Summary Parts A - C: Utilities and Ambulance Billing, Code Enforcement Liens, Misc. Receivables, and Returned Items Exhibit 3 Collection Services for Utilities and Ambulance Billing, Code Enforcement Liens, Municipal Court Fines, Miscellaneous Receivables, and Returned Items Score with Weighted No.COMMITTEE MEMBERStraight Scoring Price Calculation CSI - Credit System CSI - Credit System InternationalInternational Fort Worth, TXFort Worth, TX 1 10096 Customer Service 2 9795 Municipal Court 3 9596 Fire Administration 4 9091 Budget 5 8889 Treasury TOTAL470468 AVERAGE SCORE9494 Score with Weighted No.COMMITTEE MEMBERStraight Scoring Price Calculation MVBAMVBA Round Rock, TXRound Rock, TX 1 8085 Customer Service 2 9090 Municipal Court 3 9090 Fire Administration 4 9193 Budget 5 6873 Treasury TOTAL419431 AVERAGE SCORE8486 11/10/2011 Exhibit 5 ORDINANCE NO. ___________________ AN ORDINANCE ACCEPTING SEALED PROPOSALS AND AWARDING A FOR COLLECTION SERVICES [PARTS A-C: UTILITY, EMS, CODE ENFORCEMENT, TEXAS AND CREDIT SYSTEMS INTERNATIONAL, INC., A CORPORATION; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR AND PROVIDING AN EFFECTIVE DATE (RFP 4633AGREEMENT FOR COLLECTION SERVICES AWARDED TO CREDIT SYSTEMS INTERNATIONAL. INC., A CORPORATION IN AN AMOUNT WHICH IS CONTINGENT UPON ITS MONETARY RECOVERIES FROM PERSONS, IN ACCORDANCE WITH THE PERCENTAGES EXPRESSED IN ITS PRICE PROPOSAL WHICH IS ON FILE WITH THE CITY OF DENTON PURCHASING DEPARTMENT). WHEREAS, the City has solicited, received and evaluated competitive sealed proposals for the purchase of Collection Services in accordance with the procedures of State law and City ordinances; and WHEREAS, the City Manager or a designated employee of the City has received and reviewed and recommended that the herein described proposals are the most advantageous to the City considering the relative importance of price and the other evaluation factors included in the request for sealed proposals; and WHEREAS, the City Manager or a designated employee of the City has determined that two proposers have qualified under this request for sealed proposals, each for a portion of the services described in the request for sealed proposals; one proposer, Credit Systems International, Inc., a Corporation of Fort Worth, Texas, has been chosen to collect Parts A-C: Utility, EMS, Code Enforcement, Returned and Miscellaneous Items; while the other proposer, who is described under a separate ordinance will be responsible for collections that relate to the collection of municipal court fines in accordance with the Texas Code of Criminal Procedure; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the services approved and accepted herein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The items in the following numbered request for sealed proposal for services, City of Denton Purchasing Agent, are hereby accepted and approved as being the most advantageous to the City considering the relative importance of price and the other evaluation factors included in the request for proposals. RFSP NUMBER CONTRACTOR AMOUNT 4633 Credit Systems International, Inc., a Corporation Contingent [Parts A-C: Utilities, EMS, Code Enforcement, Returned and Miscellaneous Items only] SECTION 2. By the acceptance and approval of the above numbered item of the submitted proposal, the City accepts the offer of the entity submitting the proposals for such items and agrees to purchase the services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Proposal Invitations, Proposals, and related documents. SECTION 3. Should the City and the entity submitting approved and accepted items and of the submitted proposals desire to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the proposals, the City Manager or his designated representative is hereby authorized to execute the written agreement; provided that the written agreement is in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Proposal and related documents herein approved and accepted. SECTION 4. The City Council of the City of Denton, Texas hereby expressly delegates the authority to take any actions that may be required or permitted to be performed by the City of Denton under the Agreement for Collection Services, to the City Manager of the City of Denton, Texas, or his designee. SECTION 5. By the acceptance and approval of the above enumerated proposals, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved proposal. SECTION 6. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2011. ______________________________ MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY By:____________________________________ APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: _________________________________ 6-ORD-RFP 4633 Utilities AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011 Questions concerning this acquisition may be directed DEPARTMENT: Materials Management Kevin Gunn at 349-8595 ACM: Jon Fortune ______________________________________________________________________________ SUBJECT Consider adoption of an ordinance of the City Council of the City of Denton, Texas authorizing the City Manager to execute a contract with MarketSphere Consulting, LLC to perform a JD Edwards (JDE) Software Application Upgrade from Version 8.11 to 9.X; providing for the expenditure of funds therefor; and providing an effective date (RFP 4762-JD Edwards 9.X Upgrade Services for the City of Denton awarded to MarketSphere Consulting, LLC in the amount of $295,500.00.). (The Audit/Finance Committee recommends approval (3-0). BACKGROUND The JD Edwards Enterprise Resource Planning (JDE) software is used by the City of Denton to perform essential general ledger, Accounts Payable (A/P), Accounts Receivable (A/R), Fixed Asset Accounting, Budgeting, Human Resources, Payroll, Purchasing, and Warehouse functionality for all departments. JDE was initially acquired in 1999 to replace a non-Y2K compliant financial and human resources software system. Since then, the JDE software was upgraded twice to keep a vendor supported version of the software. The vendor will end support for the current version (8.11) as of December, 2012. An upgrade to the most current version (9.0.2) will ensure continued vendor support through November, 2018. RFP INFORMATION The City of Denton has invested over $6 million in JDE since 1999 on procurement, installation, configuration, recurring maintenance (software support), and associated software. This investment secured a stable and reliable software system for essential general ledger, Accounts Payable, Accounts Receivable, Fixed Asset accounting, budgeting, Human Resources, Payroll, Purchasing, and Warehouse functionality for all departments. The daily operation of the City is dependent on this software system. The vendor will end support for the software version currently used by the City of Denton as of December, 2012. At that time, no new updates, bug fixes, or security patches will be available. In addition, no new tax, legal or regulatory updates will be available (e.g. Federal income tax, FICA, Medicare withholding calculations). Therefore, it is critical for the City of Denton to upgrade to a software version with continuing vendor support. Agenda Information Sheet November 15, 2011 Page 2 RFP INFORMATION (CONTINUED) Upgrading JDE is an involved process which begins with setting up computer server equipment, installation of new software, and configuration of system settings. With the new system prepared, repeated iterations of transferring data, testing and validating the results are performed to ensure the new system produces the same results as the existing system. This process requires a mix of technical skills and subject matter experts including project management, financial systems, human resources, purchasing/warehousing, and computer/database systems to ensure a smooth transition with minimal disruption to daily activities. In total, these migration activities will span approximately six months requiring an estimated 2,000 hours of effort. Adding to the complexity of the project, Finance staff has a small window of opportunity between end of year closeout activities for the prior fiscal and the beginning of budgeting for the next fiscal year in which to perform the validation tasks required to begin using the new system. This period is six to eight weeks spanning late March to early May. For these reasons, staff recommends hiring a technology firm to perform the bulk of the upgrade -upgrade solution. A hired technology firm will have the skills mix needed to successfully execute the upgrade in the timeframe required by staff. Also, a technology firm can focus their efforts and resources entirely on the upgrade allowing staff to continue to perform daily activities without disruption. Request for Proposals (RFP) #4762 was issued on August 18, 2011 to procure these professional services, with responses due on September 22, 2011. Six proposals were received that met the minimum requirements for submission. The proposals included firm-fixed pricing including travel, lodging and expenses. The proposals ranged from $295,500 to $740,825. An evaluation team of eight members from Finance, Treasury, Human Resources, and Technology Services reviewed all six proposals and received on-site presentations from two firms; MarketSphere Consulting, LLC and AMX International, Inc. MarketSphere Consulting, LLC provided the lowest total cost proposal and received the highest ranking based on the criteria listed on Exhibit 1. RECOMMENDATION After an extensive review and analysis performed by the evaluation team and favorable direction received from the Audit/Finance Committee, staff recommends authorizing the City Manager to execute a contract with MarketSphere Consulting, LLC for a total cost of $295,500 as the best value for the City of Denton JD Edwards software system upgrade. PRIOR ACTION On September 6, 2011, the Audit/Finance Committee discussed the need and process for upgrading the JD Edwards software system. Agenda Information Sheet November 15, 2011 Page 3 PRIOR ACTION (CONTINUED) On November 7, 2011, the Audit/Finance Committee recommended approval to forward this item to the City Council for consideration. FISCAL IMPACT Funding in the amount of $295,500 has been allocated to this project from available Capital Improvement Program (CIP) resources. The principal source of funds is savings related to the implementation of the fixed asset module in JD Edwards during FY 2009-10. The total amount of the purchase will be paid from account 830041744.1360.30100. Requisition 105752 has been entered in the Purchasing software system. EXHIBITS Exhibit 1: Initial Evaluation Documents Exhibit 2: Final Evaluation Documents Exhibit 3: MarketSphere Consulting, LLC Contract Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-RFP 4762 Exhibit 3 ORDINANCE NO. _________ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER TO EXECUTE A CONTRACT WITH MARKETSPHERE CONSULTING, LLC TO PERFORM A JD EDWARDS (JDE) SOFTWARE APPLICATION UPGRADE FROM VERSION 8.11 TO 9.X; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (RFP 4762-JD EDWARDS 9.X UPGRADE SERVICES FOR THE CITY OF DENTON AWARDED TO MARKETSPHERE CONSULTING, LLC IN THE AMOUNT OF $295,500.00). WHEREAS, the City has solicited, received and evaluated competitive sealed proposals for the purchase of JD Edwards software application upgrade in accordance with the procedures of State law and City ordinances; and WHEREAS, the City Manager or a designated employee has received and reviewed and recommended that the herein described proposals are the most advantageous to the City considering the relative importance of price and the other evaluation factors included in the request for proposals; 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 items in the following numbered request for proposal for materials, Purchasing Agent, are hereby accepted and approved as being the most advantageous to the City considering the relative importance of price and the other evaluation factors included in the request for proposals. RFSP NUMBER CONTRACTOR AMOUNT 4762 MarketSphere Consulting, LLC $295,500 SECTION 2. By the acceptance and approval of the above numbered items of the submitted proposals, the City accepts the offer of the persons submitting the proposals for such items and agrees to purchase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Proposal Invitations, Proposals, and related documents. SECTION 3. Should the City and person submitting approved and accepted items and of the submitted proposals wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the proposals, the City Manager or his designated representative is hereby authorized to execute the written contract; provided that the written contract is in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Proposal and related documents herein approved and accepted. SECTION 4. The City Council of the City of Denton, Texas hereby expressly delegates the authority to take any actions that may be required or permitted to be performed by the City of Denton under the RFP 4762 to the City Manager of the City of Denton, Texas, or his designee. SECTION 5. By the acceptance and approval of the above enumerated bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids. SECTION 6. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of , 2011. ______________________________ 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 15, 2011 DEPARTMENT: Utilities ACM: Howard Martin, 349-8232 ______________________________________________________________________________ SUBJECT Consider adoption of an ordinance approving an Interlocal Cooperation Agreement ("ICA") between the City of Denton and Denton County, Texas, in the amount of $100,000.00, $50,000 being payable by Denton County, Texas and up to $50,000 being payable by the City of Denton, related to the engineering and construction of certain bicycle roadway accommodations within the street or road ways within the municipal limits of the City and Denton County Commissioner Precinct No.1; authorizing the mayor to execute said agreement on behalf of the City of Denton; authorizing the expenditure of funds; and declaring an effective date. BACKGROUND The City of Denton is in the process of updating the Pedestrian and Bicycle Linkage Component of the Denton Mobility Plan and has identified potential projects aimed at improving the accommodation of these alternative modes of transportation on the roadway system. One component of the updated plan involves increased bicycle accommodation on Pennsylvania Drive from its intersection with the IH35E frontage road south to Teasley Lane. The project extents are shown on Exhibit 1. Denton County Precinct No. 1 has offered the City $50,000 in funds towards the implementation of increased bicycle accommodation on Pennsylvania Drive if the City will agree to a similar commitment. The ICA reflecting the agreement to pursue this accommodation is included herein as Exhibit 2. OPTIONS 1.Approve the interlocal cooperation agreement with Denton County. 2.Reject the interlocal cooperation agreement with Denton County. RECOMMENDATION Staff recommends approval of the ICA with Denton County in the amount of $100,000. The amount to be made available from Denton County will be $50,000, with the City’s share identified as being $50,000. PRIOR ACTION/REVIEW (Council, Boards, Commissions) Not applicable. FISCAL INFORMATION Denton County Precinct No. 1 has identified a total of $50,000 in funding available for the City’s use. The City Manager’s FY 2011-12 proposed budget including $50,000 in funding for bike plan improvements. During the budget approval process, staff identified $333,676 in the General Fund that could be used for City Council initiatives. The City Council’s priorities were discussed extensively during the budget development process, and at a budget work session on September 13th, the City Council directed staff to incorporate an additional $50,000 of these funds for bike plan improvements. With this change, the FY 2011-12 budget was revised to include a total of $100,000 in funding to implement elements of the bike plan. This funding was approved by the City Council as part of the FY 2011-12 budget on September 20, 2011. BID INFORMATION Not applicable. EXHIBITS 1. Ordinance 2. Interlocal Cooperation Agreement 3. Pennsylvania Drive Layout Respectfully submitted, Frank G. Payne, P.E. City Engineer Project Location Lynhurst Ln Hobson Ln EXHIBIT 1 PENNSYLVANIA DRIVE BICYCLE ACCOMMODATIONS IH35E to Teasley Lane AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011 DEPARTMENT: Utilities ACM: Howard Martin, 349-8232 ______________________________________________________________________________ SUBJECT Consider adoption of an ordinance approving an Interlocal Cooperation Agreement ("ICA") between the City of Denton and Denton County, Texas, in the amount of $100,000, $50,000 being payable by Denton County, Texas and up to $50,000 being payable by the City of Denton, related to the engineering and construction of certain bicycle roadway accommodations within the street or road ways within the municipal limits of the City and Denton County Commissioner Precinct No.4; authorizing the mayor to execute said agreement on behalf of the City of Denton; authorizing the expenditure of funds; and declaring an effective date. BACKGROUND The City of Denton is in the process of updating the Pedestrian and Bicycle Linkage Component of the Denton Mobility Plan and has identified potential projects aimed at improving the accommodation of these alternative modes of transportation on the roadway system. One component of the updated plan involves increased bicycle accommodation between the Denton County Transportation Authority (DCTA) multi-modal facility on Hickory Street and the University of North Texas (UNT) main campus. The project extents are shown on Exhibit 1. Denton County Precinct No. 4 has offered the City $50,000 in funds towards the implementation of increased bicycle accommodation on the streets connecting the DCTA facility and UNT. The ICA reflecting the agreement to pursue this accommodation is included herein as Exhibit 2. OPTIONS 1.Approve the interlocal cooperation agreement with Denton County. 2.Reject the interlocal cooperation agreement with Denton County. RECOMMENDATION Staff recommends approval of the ICA with Denton County in the amount of $100,000. The amount to be made available from Denton County will be $50,000 with the City’s share identified as being $50,000. PRIOR ACTION/REVIEW (Council, Boards, Commissions) Not applicable. FISCAL INFORMATION Denton County Precinct No. 4 has identified a total of $50,000 in funding available for the City’s use. The City Manager’s FY 2011-12 proposed budget including $50,000 in funding for bike plan improvements. During the budget approval process, staff identified $333,676 in the General Fund that could be used for City Council initiatives. The City Council’s priorities were discussed extensively during the budget development process, and at a budget work session on September 13th, the City Council directed staff to incorporate an additional $50,000 of these funds for bike plan improvements. With this change, the FY 2011-12 budget was revised to include a total of $100,000 in funding to implement elements of the bike plan. This funding was approved by the City Council as part of the FY 2011-12 budget on September 20, 2011. BID INFORMATION Not applicable. EXHIBITS 1. Ordinance 2. Interlocal Cooperation Agreement 3. DCTA to UNT Layout. Respectfully submitted, Frank G. Payne, P.E. City Engineer EXHIBIT 1 DCTA - UNT BICYCLE ACCOMMODATIONS AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011 DEPARTMENT: Utility and CIP Engineering ACM: Howard Martin, (940) 349-8232 ______________________________________________________________________________ SUBJECT Consider adoption of an ordinance of the City of Denton, Texas, amending Chapter 18 of the Code of Ordinances by modifying the speed zone on Loop 288 in Section 18-73; altering the prima facie speed limits established for vehicles under the provision of Transportation Code, Section 545.356, providing a penalty not to exceed $200.00 unless the violation occurs in a work zone and then the penalty shall not exceed $400.00; providing a severability clause; providing a repealing clause; providing for publication; and declaring an effective date. BACKGROUND Speed zones are typically established based on engineering investigations. The primary criterion used in establishing a speed limit is the eighty-fifth percentile (85%) speed. This speed is established by performing a speed study and calculating the speed at which the 85% vehicle is traveling. The 85% speed is the speed at which a prudent driver, given the type of street, will drive that street under normal driving conditions. The courts have determined that the 85% is the primary criterion by which a reasonable speed limit should be established. The speed limit is usually rounded to the 5MPH increment that is just higher or lower than the 85% (unless the 85% calculated is at a 5MPH increment). Other factors that can be considered in lowering a speed limit are: Roadway pavement width of 20ft or less, Horizontal and vertical curves, Hidden driveways and other roadside developments, High driveway density, A high crash history, Substantial pedestrian activity, Rural residential or development area and Lack of striped, improved shoulders. The State of Texas considers the above list of factors as the means of establishing a speed limit up to 10MPH (12MPH for locations with a crash rate higher than the statewide average) lower than the 85%. Speed limit studies are typically done when there are moderate volumes that are under generally free-flow conditions. Accordingly, speed limit studies do not normally include the AM or PM peak periods, industrial plant let-out times, school hour drop-off/pick-up times or other such short-term, potentially congested times. Speeds are generally lower during these events because of the corresponding congestion; therefore, they do not reflect the less restricted conditions the driver is under during most of the day. The Texas Department of Transportation (TxDOT) periodically performs speed limit studies on all of its highways, including those in the City of Denton. Loop 288 speed limits were previously adjusted through Ordinance 2005-173 to include a 35 MPH zone from IH35E to Morse Street and a 50 MPH zone from Morse Street north to University Drive/US380/US377. After Loop 288 construction was completed, TxDOT performed an additional speed limit analysis on the revised roadway section. In a letter dated February 19, 2010 (attached as Exhibit 1), TxDOT recommended that the City modify the speed limits on Loop 288 to include a 40 MPH zone from IH35E to Spencer Road and a 50 MPH zone from Spencer Road to University Drive/US380/US377. It should be noted that, based upon new conditions in the future (completion of schools, commercial or industrial areas, residential subdivisions, new City street connections, increased driveway connections and the like), the City can request that TxDOT conduct a new survey at any time. Therefore, the speed limits being recommended herein for the affected stretches of roadway are for the conditions as they are today and not for any future situation. The State’s Transportation Commission can establish a Minute Order (a state law) that would invalidate any City ordinance of a speed limit posting that is contrary to those proposed by TxDOT. The State can remove the City’s posting and install signs reflecting the Minute Order. OPTIONS 1.Approve the ordinance. 2.Approve the ordinance with conditions. 3.Deny approval of the ordinance. RECOMMENDATION Staff has worked with TXDOT over a period of many years to establish speed limits on TxDOT roadways. The passage of this ordinance will officially modify the limits on Loop 288 by ordinance to agree with the TxDOT speed study. Staff recommends that, in order to resolve any potential timing/delay issues potentially causing unwanted action by TxDOT and the State of Texas, the ordinance for the revised speed limits for Loop 288 resulting from the TxDOT restudy as discussed herein be established. PRIOR ACTION/REVIEW (Council, Boards, Commissions) April 5, 2010 – Traffic Safety Commission. FISCAL INFORMATION TxDOT has already installed the necessary signing and posts at its expense. BID INFORMATION Not applicable. EXHIBITS 1.Ordinance 2.February 9, 2010 TxDOT Letter for Loop 288 3.Location Map 4.Traffic Safety Commission Minutes of April 5, 2010 Respectfully submitted: ______________________________ Frank G. Payne, P.E. CityEngineer s:\legal\our documents\ordinances\11\loop 288 speed zone amendment ordinance.doc ORDINANCE NO._________________ AN ORDINANCE OF THE CITY OF DENTON, TEXAS, AMENDING CHAPTER 18 OF THE CODE OF ORDINANCES BY MODIFYING THE SPEED ZONE ON LOOP 288 IN SECTION 18-73; ALTERING THE PRIMA FACIE SPEED LIMITS ESTABLISHED FOR VEHICLES UNDER THE PROVISION OF TRANSPORTATION CODE, SECTION 545.356 UPON THE FOLLOWING ROADWAYS OR PARTS THEREOF, WITHIN THE INCORPORATED LIMITS OF THE CITY OF DENTON; PROVIDING A PENALTY NOT TO EXCEED $200.00 UNLESS THE VIOLATION OCCURS IN A WORK ZONE AND THEN THE PENALTY SHALL NOT EXCEED $400.00; PROVIDING A SEVERABILITY CLAUSE; PROVIDING A REPEALING CLAUSE; PROVIDING FOR PUBLICATION; AND DECLARING AN EFFECTIVE DATE. WHEREAS, Section 545.356 of the Texas Transportation Code provides that whenever the governing body of the City shall determine upon the basis of an engineering and traffic investigation that any prima facie speed therein set forth is greater or less than is reasonable or safe under the conditions found to exist at any intersection or other place or upon any part of a street or highway within the City, taking into consideration the width and condition of the pavement and other circumstances on such portion of said street or highway, as well as the usual traffic thereon, said governing body may determine and declare a reasonable and safe prima facie speed limit thereat or thereon by the passage of an ordinance, which shall be effective when appropriate signs giving notice thereof are erected at such intersection or other place or part of the street or highway; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1 Denton, Texas is hereby amended by modifying Section 18-73 regulating speed of vehicles on Loop 288. Section 18-73, Item XII shall read as follows: XII.Loop 288 A. 40 mph From IH-35E southbound main lanes to Spencer Road. B. 50 mph From Spencer Road to University Drive/US 380. C. 60 mph From University Drive/US 380 to IH-35. SECTION 2. Any person violating any provision of this ordinance shall, upon conviction, be fined a sum not to exceed Two Hundred Dollars ($200.00), unless the violation occurs in a work zone and then the penalty shall not exceed Four Hundred Dollars ($400.00). SECTION 3. If any section, subsection, paragraph, sentence, clause, phrase, or word in this ordinance, or application thereof to any person or circumstance is held invalid by any court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of S:\Legal\Our Documents\Ordinances\11\Loop 288 Speed Zone Amendment Ordinance.doc this ordinance, the City Council of the City of Denton, Texas, hereby declares that they would have enacted such remaining portions despite any such invalidity. SECTION 4. All provisions of the ordinances of the City of Denton in conflict with the provisions of this ordinance are hereby repealed, and all other provisions of the ordinances of the City of Denton, not in conflict with the provisions of this ordinance, shall remain in full force and effect. SECTION 5. This ordinance shall become effective fourteen (14) days from the date of its passage, and the City Secretary is hereby directed to cause the caption of this ordinance to be published twice in the Denton Record-Chronicle, the official newspaper of the City of Denton, Texas, within ten (10) days of the date of its passage. PASSED AND APPROVED this the _______ day of _______________________, 2011. ______________________________ MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: _________________________________ APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: _________________________________ Page 2 of 2 Previous Extents - 50mph New Extents - 50mph Previous Extents - 35mph New Extents - 40mph EXHIBIT 2 LOOP 288 SPEED LIMIT CHANGES MINUTES TRAFFIC SAFETY COMMISSION April 5, 2010 After determining that a quorum of the Traffic Safety Commission of the City of Denton, Texas was present, the Chair of the Traffic Safety Commission thereafter convened into an Open Meeting on Monday, April 5, 2010, at 5:33 p.m. in the City Council Work Session Room, City of Denton City Hall, 215 E. McKinney Street, Denton, Texas. Present: Chair John Crew Pat Cheek Michael Green Connie Baker Marion Scott Kim Spivey Zackary Tucker Ralph Glass Howard Draper (5:35 p.m.) Also Present : Frank Payne, City Engineer Bud Vokoun, Traffic Engineer Clay Riggs, Associate Engineer Roy Minter, Police Chief Stephanie Berry, Assistant City Attorney Council Member Dalton Gregory Ann Forsythe, Boards and Committees Coordinator Kim Mankin, Administrative Assistant III OPEN MEETING: 1)Consider recommending approval of the Traffic Safety Commission meeting minutes of March 1, 2010. The minutes were approved as circulated. 2)Receive a report, hold a discussion and make a recommendation concerning speed limits on Loop 288. Engineer Payne called on Engineer Vokoun to present this item. Vokoun stated that staff received a letter from TxDOT recommending the City establish speed limits of 40MPH from IH- 35E to Spencer Road, and 50MPH from Spencer Road to University Drive. Staff is in agreement with both the speed limits and the locations and staff recommends that the Commission recommend to City Council the approval of the speed limits for Loop 288 at 40 MPH from IH- 35E to Spencer and 50MPH from Spencer Road to University Drive. Payne added that previous speed limits were set by a speed zone study conducted approximately eight years ago and that a speed zone study was conducted after construction of Loop 288 was completed. Chair Crew noted that new speed limit signs were already in place. Vokoun stated that signs have been posted about two to three weeks at some locations. Commissioner Cheek asked why the Commission is making a recommendation. Vokoun stated there were concerns about the speed limits and that Assistant City Attorney Berry having Chief Minter sign an emergency order worked with TxDOT to get the signs posted as quickly as possible. Vokoun added that staff still needs to go forward to make it official by the City Council. Commission Cheek moved to approve with a second from Commission Tucker. The motion was approved by a 9-0 vote. AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Jim Coulter at 349-7194 ACM: Jon Fortune SUBJECT Consider adoption of an Ordinance authorizing the First Amendment of an agreement between the City of Denton, Texas and Protect Environmental Services, Inc. and the expenditure of funds pursuant to Section 252.022 (A)(1) and (2) of the Texas Local Government Code in the interest of preservation of property and health and safety, which purchases are exempt from the requirements of competitive bidding; and providing an effective date. FILE INFORMATION The Lake Ray Roberts Water Treatment Plant experienced a chemical spill onto the grounds of the plant while performing maintenance on a chemical tank. The material that was spilled was a strong caustic solution. The chemical seeped down into the ground around the tank structure and various pipes. A small portion of the solution entered a concrete drainage ditch and was contained within the plant grounds. The Texas Commission on Environmental Quality (TCEQ) is involved and remediation of the impacted areas is ongoing according to TCEQ procedures and protocols. At no time was the City impaired and there were no employee injuries or offsite consequences. The City of Denton has an existing contract with Protect Environmental to perform hazardous material remediation if needed for any hazardous material incidents within the city. Since Protect Environmental is under contract for these services, they were selected to perform the remediation for the water plant. The current contract with the City covers remediation jobs up to $50,000. The remediation of the spill at the water plant is beyond the scope of the current contract and estimated to be $250,000. Severe cracking of the soil around the water plant allowed the solution to impact soil three to four feet in some areas which required careful excavation around buried piping and electrical lines. This extensive excavation requires the use of various pieces of heavy equipment and individuals with shovels which has greatly increased the remediation costs. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On November 14, 2011, the Public Utilities Board will consider approval to forward this item to the City Council for consideration. Agenda Information Sheet November 15, 2011 Page 2 RECOMMENDATION Approve the First Amendment to the Agreement with Protect Environmental Services in an amount not to exceed $200,000 for a total contract amount of $250,000. PRINCIPAL PLACE OF BUSINESS Protect Environmental Services Haltom City, TX ESTIMATED SCHEDULE OF PROJECT The remediation is ongoing until resolution of the clean up. FISCAL INFORMATION This expenditure will be funded from operating account 630100.7879. Purchase Order 154663 will be revised to add the First Amendment amount of $200,000. EXHIBITS Exhibit 1: Declaration of Emergency Form Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-File 4856 Exhibit 1 CITY OF DENTON CITY COUNCIL MINUTES October 3, 2011 After determining that a quorum was present, the City Council convened in a Special Called Work Session on Monday, October 3, 2011 at 12 noon in the Denton Municipal Electric System Operations Building, 1659 Spencer Road, Denton, Texas. PRESENT: Council Member Gregory, Council Member Watts, Mayor Pro Tem Kamp, and Mayor Burroughs. ABSENT: Council Member Engelbrecht, Council Member King, and Council Member Roden. 1. Hold a discussion and receive information from City Staff regarding Public Power Week and DME system operations and conduct a tour of DME facilities. Phil Williams, General Manager-Denton Municipal Electric, presented an update on Denton Municipal Electric’s year. He indicated that even though there were rolling outages in the winter and summer, service reliability was good. He indicated the awards that had been received during the year and thanked the employees for a job well done. The DME System Operations Building was the focus of the tour and he reviewed the major points of interest of the building. The building would house Engineering, Systems Operation and Dispatch. The Dispatch Room, Data Room and Mechanical Yard would be F3 tornado proof. Technology Services would be able to utilize a portion of the Data Room to install a backup system for the City network. Building materials, structural foundation, construction techniques, and moisture control methods were expected to contribute towards a 50 year building life span. Following the completion of the luncheon, the Council participated in a tour of the building. With no further business, the meeting was adjourned. ___________________________________ MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS ____________________________________ JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON CITY COUNCIL MINUTES October 4, 2011 After determining that a quorum was present, the City Council convened in a Work Session on Tuesday, October 4, 2011 at 4:30 p.m. in the Council Work Session Room at City Hall. PRESENT: Council Member Watts, Council Member Gregory, Council Member Roden, Mayor Pro Tem Kamp, and Mayor Burroughs. ABSENT: Council Member Engelbrecht and Council Member King. 1. Citizen Comments on Consent Agenda Items Bryan Langley, spoke regarding Consent Agenda Item 4K. He indicated that the lease agreement with was with Denton County and Council had been provided an amended ordinance. The only language change was the amount indicating an amount not to exceed. Staff was not opposed to that language and was submitting it for Council approval. The time allotment for the parking spaces would be from 8:00 a.m. until the end of the Commissioners Court meeting. Mayor Burroughs asked if the parking stickers were only for the Commissioners. Langley replied the stickers also included 5 for staff. Council Member Watts asked for the total amount of contract. Langley stated that would be about $3,000. Council Member Roden asked about the parking lot behind Wells Fargo in terms of parking there after 5:00 p.m. and on weekends. Spaces were not designated with a time frame there. Langley stated that the spaces were not marked but the signage could be improved. This was an annual renewal so it could be changed if needed. 2. Receive a report, hold a discussion and give staff direction regarding the Aesthetic Study that the Texas Department of Transportation (TxDOT) is preparing for the IH-35E expansion project. Emerson Vorel, Director of Parks and Recreation, presented an update on the item. On th September 6, the TxDOT consultant did a presentation on the guidelines for the expansion project. At that time, Council asked staff for additional information requesting an extension to th the September 15 deadline, additional locations to be considered for Accent or Enhanced treatments, partners for these projects and the form of the graphic panels that were proposed to th be part of this project. Another work session was done on September 13 regarding the enhancements and Council received an Informal Staff report on September 16th. TxDOT has granted the extension and comments were now due on October 15th. During the discussions, staff had talked about aluminum versus form liner panels. As the aluminum product was not used very often, concerns were raised regarding weather damage, theft, and corrosion. Based on those concerns, the aluminum product was no longer a consideration, leaving only the form liner option. City of Denton City Council Minutes October 4, 2011 Page 2 Another consideration of the enhancements dealt with the locations of the artwork. There were two types of intersections - Enhanced and Accent. TxDOT would pay for the Accent intersections. In Denton, the recommended Accent intersections included Lillian Miller, Fort Worth Drive and Bonnie Brae. The cost of the project included operation and maintenance costs which would be TxDOT responsibility as well. The Council’s last request was to determine if the North Texas Blvd. intersection could be upgraded to an Accent intersection as well as the Highway 380 intersection. RED Development had indicated that they would like to explore a partnership with the City to fund an Enhanced intersection at Highway 380. Staff’s recommendation was to add this intersection to the list of Accent intersections as RED Development and the City further pursue the funding to create an Enhanced intersection. UNT had indicated that they would like to have the North Texas Blvd. intersection added to the Accent list. Council Member King arrived at the meeting. Mayor Burroughs stated that in the worst case scenario if the City did not received any feedback from RED, it would not force the City to pay for an Enhanced intersection. Vorel stated that was correct and was the reason staff was asking for an Accent intersection while exploring the possibilities of an Enhanced intersection. These were not guarantees at this point. Council Member Roden asked if TxDOT wanted the City to prioritize which intersections were definitely requested. Vorel stated that would be a further discussion at another point in time. After this meeting, staff would engage the community through the Public Art Committee to determine the way the th artwork would look. A response was due by October 15 on the location, type and kind of artwork. Mayor Pro Tem Kamp asked if UNT wanted an Enhanced intersection. Mayor Burroughs stated they wanted an Accent intersection but also a say in the artwork. Consensus of the Council was to proceed with the staff recommendation on the form base panels and intersections. Following the completion of the Work Session, the Council convened into a Closed Meeting to consider the following items: 1. Closed Meeting: A.Deliberations regarding Certain Public Power Utilities: Competitive Matters - Under Texas Government Code Section 551.086; and Consultation with City of Denton City Council Minutes October 4, 2011 Page 3 Attorneys - Under Texas Government Code Section 551.071. 1.Consultation and receipt of information from the City's attorneys regarding the present status of and possible alternatives to pursue regarding the pending rate litigation entitled: The University of North Texas, Appellant v. The City of Denton, Texas, Appellee, Cause No. 02- 09-00395-CV; and receive a Public Power competitive and financial matters presentation from Denton Municipal Electric staff regarding possible electric rate-setting factors and methodologies, and possible provisions of contracts for the sale of power by and between the City and the two State universities located in the City; discuss, deliberate, consider, and provide Staff with direction regarding these matters 2.Receive a briefing from Staff regarding public power competitive and financial matters regarding Wholesale Transmission Charges for September through December 1999; and consult with the City's attorneys regarding legal issues involved in PUCT Docket No. 20381 and 39066 and Cause No. 99-14787 that resulted in a decision by the Supreme Court of Texas, Texas Municipal Power Agency et al. v. Public Util. Comm'n of Texas, 253 S.W.3d 184 (Tex. 2007), which has resulted in a Stipulation disposing of the all pending litigation regarding this matter, where a public discussion of this legal matter would conflict with the duty of the City's attorneys to the Public Utilities Board under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. Discuss, deliberate and provide Staff with direction. This item was not considered. B.CONSULTATION WITH ATTORNEYS - Under Texas Government Code, Section 551.071. 1.Consult with and provide direction to the City's attorneys associated with proposed enforcement related to sanitary sewer overflows and where a public discussion of such legal matters would conflict with the duty of the City's attorneys to the City of Denton, Texas and the City Council of the City of Denton, Texas under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. 2.Consultation, discussion, deliberation, and receipt of information from the City's attorneys regarding potential litigation with Denton County Electric Cooperative, Inc. d/b/a CoServ Electric and CoServ Gas, Ltd. relating to disputes concerning franchise issues, where public discussion of these legal matters would clearly conflict with the duty of the City's attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. Council convened in a Regular Meeting at 6:40 p.m. in the Council Chambers at City Hall. City of Denton City Council Minutes October 4, 2011 Page 4 1. PLEDGE OF ALLEGIANCE The Council and members of the audience recited the Pledge of Allegiance to the U. S. and Texas flags. 2. PROCLAMATIONS/PRESENTATIONS A. Proclamations/Awards 1. Fire Prevention Week Mayor Burroughs presented a proclamation for Fire Prevention Week. 2. Presentation of the CLIDE Award for the Downtown Implementation Plan The CLIDE award was presented to the City of Denton from the North Central Texas Council of Governments. CITIZEN REPORTS 3. A. Review of procedures for addressing the City Council. B. Receive citizen reports from the following: 1. Alfred Sanchez regarding an exception to the Code to allow for housing for the homeless. Mr. Sanchez stated that he owned 27 rental properties in Denton. He wanted to change 921 Hill from a residential zoning category to a multi-family zoning category to operate a boarding house for the working homeless. He used the home on Hill for the working homeless. The home contained 4 bedrooms, 2 bathrooms and 2 living areas. He charged $40 per person including amenities with two persons per room. He averaged 6-7 people living there with a maximum of 10. His long term objective was to find a stable living environment for these people. He was requesting a zone change or exemption to operate a boarding house for the working homeless. 2. Kirsten Bah regarding a smoke free Denton. Ms. Bah expressed a concern regarding the lack of smoking regulations in the city of Denton. She was not against smoking but disagreed with her health being compromised at her place of work due to a smoking environment. The Council had an opportunity to protect public health. City of Denton City Council Minutes October 4, 2011 Page 5 4 CONSENT AGENDA Council Member King motioned, Council Member Gregory seconded to approve the Consent Agenda and accompanying ordinances and resolutions noting that Item K ordinance would be approved as amended. On roll call vote: Council Member King “aye”, Council Member Watts “aye”, Council Member Gregory “aye”, Council Member Roden “aye”, Mayor Pro Tem Kamp “aye” and Mayor Burroughs “aye”. Motion carried unanimously. Resolution R2011-036 A. Consider approval of a resolution adopting a revised City of Denton Handbook for Boards, Commissions and Council Committees; and declaring an effective date. Ordinance No. 2011-175 B. Consider adoption of an ordinance accepting competitive bids and awarding a public works contract for the construction of the Brown Street and Preston Place 8 Inch Sanitary Sewer Replacements; providing for the expenditure of funds therefor; and providing an effective date (Bid 4801-awarded to the lowest responsible bidder meeting specification, Jagoe-Public Company, in the amount of $241,220). The Public Utilities Board recommends approval (6-0). Ordinance No. 2011-176 C. Consider adoption of an ordinance accepting competitive bids and awarding a public works contract for the construction of the Ruth Street 8 Inch Sanitary Sewer Replacement; providing for the expenditure of funds therefor; and providing an effective date (Bid 4802-awarded to the lowest responsible bidder meeting specification, Jagoe- Public Company, in the amount of $187,025). The Public Utilities Board recommends approval (6-0). Ordinance No. 2011-177 D. Consider adoption of an ordinance accepting competitive bids and awarding a one year contract for water and sewer inventory parts for the City's Water and Wastewater departments; providing for the expenditure of funds therefor; and providing an effective date (Bid 4753-One Year Contract for Water and Sewer Inventory Parts awarded to the lowest responsible bidder for each item as shown on Exhibit A in the annual estimated amount of $250,000). Ordinance No. 2011-178 E. Consider adoption of an ordinance accepting competitive proposals and awarding a three year contract for traffic signal hardware for the City of Denton Traffic Division; providing for the expenditure of funds therefor; and providing an effective date (RFP 4757-Three Year Contract for Supply of Traffic Signal Hardware awarded to the supplier that provided the best value for each item as shown on Exhibit A in the three year estimated amount of $725,000). Ordinance No. 2011-179 F. Consider adoption of an ordinance accepting competitive bids and awarding an annual contract for soil, sand, aggregate and lime for various City departments; providing for the expenditure of funds therefor; and providing an effective date (Bid 4798-Annual City of Denton City Council Minutes October 4, 2011 Page 6 Contract for Soil, Sand, Aggregate and Lime awarded to the lowest responsible bidder for each item as shown on Exhibit A in the annual estimated amount of $2,000,000). Ordinance No. 2011-180 G. Consider adoption of an ordinance amending Ordinance Number 2001-406 of the Code of Ordinances of the City of Denton, Texas, relating to compensation paid to the City for use and occupancy of public rights-of-way by providers; providing a savings clause; and providing an effective date. First Reading H. Consider adoption of an ordinance of the City Council of the City of Denton, Texas, granting to Denton County Electric Cooperative, Inc., D/B/A CoServ Electric, its successors and assigns, the non-exclusive right to use and occupy rights-of-way within the City of Denton for the construction and operation of an electric transmission and distribution system; prescribing conditions governing the use of the public rights-of-way; providing for compensation therefor, providing for a term of said franchise, providing for written acceptance of this franchise; finding that the meeting at which this ordinance is passed is open to the public; providing for severability; and providing for an effective date. Ordinance 2011-181 I.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 General Fund with Certificates of Obligation with an aggregate maximum principal amount equal to $2,070,092 to facilitate the purchase of General Fund vehicles and equipment, and providing an effective date. Ordinance No. 2011-182 J. Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute contracts through the Buy Board Cooperative Purchasing Network and Houston-Galveston Area Council of Governments (H-GAC) for the acquisition of one Vacuum Truck, two Backhoe Loaders, and two Skid Steers for various City of Denton Utility Departments; and providing an effective date (File 4807-Truck and Heavy Equipment for Utility Departments awarded to Southwest International Trucks in the amount of $289,399.40, Holt-Cat in the amount of $173,016, and AG- Power Inc. in the amount of $75,402.17 for a total award amount of $537,817.57). The Public Utilities Board recommends approval (7-0). Ordinance No. 2011-183 K.Consider adoption of an ordinance approving a lease agreement with Denton County for parking lot spaces located at the Williams Trade Square; providing a severability clause; and an effective date. Ordinance No. 2011-184 L.Consider adoption of an ordinance approving a lease agreement with Wells Fargo Bank for parking lot spaces located at the Williams Trade Square; providing a severability City of Denton City Council Minutes October 4, 2011 Page 7 clause; and an effective date. Ordinance No. 2011-185 M.Consider adoption of an ordinance of the City Council of the City of Denton, Texas, approving a funding agreement between the City of Denton and the Denton Affordable Housing Corporation; providing for the terms of said contract; authorizing the City Manager to execute the agreement and to expend Home Investment Partnership Program funds with respect to the agreement; and providing for an effective date. Ordinance No. 2011-186 N.Consider adoption of an ordinance of the City Council of the City of Denton, Texas, approving guidelines for operation of the City of Denton Home Improvement Program and eligibility criteria; authorizing expenditures in excess of $50,000 for projects meeting program guidelines and criteria; and providing for an effective date. Ordinance No. 2011-187 O.Consider adoption of an ordinance authorizing the City Manager to approve a fourth amendment to an Airport lease dated September 15, 1987 as amended by Ordinance 2010-297 dated September 7, 2010 and by Ordinance 2011-035 dated March 1, 2011 and by Ordinance 2011-097 between the City of Denton, Texas, and First Financial Resources, Inc. at the Denton Municipal Airport; and providing an effective date. The Council Airport Committee recommends approval (3-0). Ordinance No. 2011-188 P.Consider adoption of an ordinance approving an Airport Safety Equipment Lease Agreement between the City of Denton, Texas and Jet Works Air Center; and, providing an effective date. The Council Airport Committee recommends approval (2-0). Ordinance 2011-189 Q.Consider adoption of an ordinance authorizing the City Manager to execute a Consent To Assignment and Assumption of Obligations between the City of Denton, Energy Assets Operating Company L.L.C. ("Energy Assets") and Legend Gathering Company L.L.C. ("Legend") consenting to the assignment of certain rights and obligations from Energy Assets to Legend related to Right Of Way License To Use Certain City Property For Placement of Transmission Pipelines, dated on or about October 26, 2007, from the City to Energy Assets; providing for severability and an effective date. 5. ITEMS FOR INDIVIDUAL CONSIDERATION A. Consider nominations/appointments to the City's boards and commissions. 1. Health & Building Standards Commission 2. Public Art Committee City of Denton City Council Minutes October 4, 2011 Page 8 Council Member Gregory nominated Rod Reeves to the Health & Building Standards Commission. Mayor Burroughs nominated Nancy Walkup to the Public Art Committee. Council Member Gregory motioned, Council Member Roden seconded to approve the nominations. On roll call vote: Council Member King “aye”, Council Member Watts “aye”, Council Member Gregory “aye”, Council Member Roden “aye”, Mayor Pro Tem Kamp “aye” and Mayor Burroughs “aye”.Motion carried unanimously. B. Consider approval of a resolution nominating members to the Board of Directors of the Denton Central Appraisal District; and declaring an effective date. Bryan Langley, Chief Financial Officer, stated that the terms of some of the members of the Board of Directors were expiring which required additional nominations. Council could make up to five nominations with three of the existing members interested in serving again. Once the District received all of the nominations, a ballot would be sent to each entity. The number of votes each entity had was based on a proportional share of the tax levy in the Appraisal District. Denton had 193 votes and the DISD had 643 votes. The minimum number of votes to be elected was 1000. In 2009 the DISD and City combined their votes for Rick Woolfolk and Charles Stafford. Mayor Pro Tem Kamp motioned, Council Member King seconded to nominate Rick Woolfolk and Charles Stafford. On roll call vote, Council Member King “aye”, Council Member Watts “aye”, Council Member Gregory “aye”, Council Member Roden “aye”, Mayor Pro Tem Kamp “aye” and Mayor Burroughs “aye”. Motion carried unanimously. C. Consider approval of a resolution confirming the appointment of Warren Lee Howell, by the City Manager, as Police Chief for the City of Denton Police Department, and declaring an effective date. City Manager Campbell indicated that Police Chief Roy Minter had resigned in March of this year. Civil Service regulations stated that the Police Chief would be appointed by the City Manager and confirmed by the City Council. He was recommending the confirmation of Warren Lee Howell as Police Chief in the city of Denton. Mayor Pro Tem Kamp motioned, Council Member Gregory seconded to confirm the nomination of Warren Lee Howell as Police Chief. On roll call vote: Council Member King “aye”, Council Member Watts “aye”, Council Member Gregory “aye”, Council Member Roden “aye”, Mayor Pro Tem Kamp “aye” and Mayor Burroughs “aye”. Motion carried unanimously. 6. PUBLIC HEARINGS Ordinance No. 2011-190 A. Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas providing for the Ad Valorem taxation of tangible personal property in transit or "Super Freeport" goods pursuant to Section 11.253 of the Texas Tax Code; providing a severability clause; providing a repealer clause; authorizing the City Manager to forward said ordinance to the Denton Central Appraisal District; and providing for an effective date. The Audit/Finance City of Denton City Council Minutes October 4, 2011 Page 9 Committee recommends approval (3-0). Bryan Langley, Chief Financial Officer, stated that currently Denton provided an ad valorem tax exemption to goods that were stored in the city for less than 175 days provided they would eventually be shipped out of the state. This process was referred to as a Freeport Exemption. In 2007 the Legislature passed House Bill 621 which would have extended an ad valorem tax exemption to goods in transit that were shipped to other locations within the state. Freeport was only for goods shipped out of state. At that time Denton opted out of the goods in transit provisions in order to continue its taxing authority. Senate Bill 1 of the 2011 Special Session included language making it necessary for a governing body of a taxing unit to opt out in order to continue its taxing authority on goods in transit. The Audit/Finance Committee recommended that the city opt out of the exemption. A COG survey indicated that 16 of 21 communities had indicated that they would be opting out with only one keeping the exemption. The law required a public hearing before the opting out process could be adopted. Mayor Burroughs stated that this would not affect the Freeport Exemption. Langley stated that was correct. The Mayor opened the public hearing. No one spoke during the public hearing. The Mayor closed the public hearing. Council Member Watts motioned, Council Member King seconded to adopt the ordinance. On roll call vote: Council Member King “aye”, Council Member Watts “aye”, Council Member Gregory “aye”, Council Member Roden “aye”, Mayor Pro Tem Kamp “aye” and Mayor Burroughs “aye”. Motion carried unanimously. Ordinance No. 2011-191 B. Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, providing for a zoning change from Rural Residential 5 (RD-5) zoning district classification and use designation to Industrial Center General (IC-G) zoning district classification and use designation, on 29 acres of land legally described as Lot 1, Block B, Corbin Road Business Park Phase I, Lots 1- 5, Block C, Corbin Road Business Park Phase II; Lots 1-6, Block A and Lots 6 and 7, Block C, Corbin Road Business Park, Phase III; providing for a penalty in the maximum amount of $2,000.00 for violations thereof; providing a severability clause and an effective date. (Z11-0014) The Planning and Zoning Commission recommends approval (5-0). Mayor Burroughs indicated that Items B and C would be presented as one item. Mark Cunningham, Director of Planning and Development, indicated that both sites were located east of Corbin Road in the Corbin Road Business Park. Both parcels were annexed in 2010 as part of DH-3 and were currently zoned RD-5. The applicant was requesting to rezone the property in order to bring the current uses of the site into conformance with the Denton City of Denton City Council Minutes October 4, 2011 Page 10 Development Code. The first site was comprised of eleven platted lots with the current uses of warehouse, assembly, fabrication and distribution facilities, and vehicle storage and repair facilities. The proposed IC-G zoning district would permit the exiting uses and was compatible with the use of the land and the surrounding area. The second site was comprised on five platted lots with the current uses of manufacturing, assembly and distribution facilities, warehouses, a gas well and a single family residence. Two of the lots were undeveloped at this time. The single family residence would become a non-conforming use with this proposed zoning change. The proposed zoning for the second site was also compatible with the use of the land and the surrounding area. Staff and the Planning and Zoning Commission recommended approval. Council Member Gregory asked if there would be the need to duplicate this process on other parcels that were annexed that did not meet the default zoning. Cunningham stated that none of the parcels that were annexed had official designation for zoning as they were all assigned the RD-5 zoning category. In the future if properties to be annexed wanted to have official zoning at the time of annexation staff or the property owner would request Council to act on that request. Council Member Watts asked if any type of analysis had been done that if a request were received to build the same structure with the current code if it would come close to meeting code such as with setback requirements. Cunningham stated that the structure might be non-conforming due to height or setbacks but it would still have the privileges of the Code. Council Member Watts asked if the single-family home were demolished, would new construction have to meet current code. Cunningham stated that whatever the zoning district was on the property at the time of construction would be the code requirements that would have to be followed. The Mayor opened the public hearing for both Items B and C. Patricia Adams, attorney for applicant, spoke in favor of the proposal. She stated that this was unique property because it was already largely developed. She indicated that some of the landscaping requirements did not fit well with the development in place. She asked that the City look at properties like theirs that might have problems meeting some of the landscaping requirements due to the fact that the properties might already be developed. The Mayor closed the public hearing. Council Member Watts asked if such a situation would be a Certificate of Occupancy issue and how it would apply to new tenants. Cunningham stated that non-conforming uses were not required to meet current standards but had to keep what was there. If 10% landscaping was required and only 8% was there with the property already built, 2% would not have to be taken down to get to the landscaping requirement. City of Denton City Council Minutes October 4, 2011 Page 11 Mayor Burroughs stated that it sounded like these situations would fit into a small infill development category and staff might consider adding newly annexed properties to that category. Council Member Gregory asked about issues with a Certificate of Occupancy that might affect the fire or electrical code. Cunningham stated that staff would try to be flexible with that situation but life-safety issues would be held to the Development Code requirements before issuing a Certificate of Occupancy. Council Member Watts stressed that there be a mechanism whereby if staff could make a call on flexibility with the Code that there be criteria in place to do so. It could be a challenge on what was a life, health or safety issue. Cunningham stated that building issues were governed by a separate set of Code requirements and each set provided how to deal with a Certificate of Occupancy and how to provide for flexibility. Council Member Gregory motioned, Council Member King seconded to approve the ordinances for both Public Hearings B and C. On roll call vote: Council Member King “aye”, Council Member Watts “aye”, Council Member Gregory “aye”, Council Member Roden “aye”, Mayor Pro Tem Kamp “aye” and Mayor Burroughs “aye”. Motion carried unanimously. Ordinance No. 2011-192 C. Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, providing for a zoning change from Rural Residential 5 (RD-5) zoning district classification and use designation to Industrial Center General (IC- G) zoning district classification and use designation, on 22.03 acres of land legally described as Lots 3-7, Block A, Corbin Road Industrial Park Phase I; providing for a penalty in the maximum amount of $2,000.00 for violations thereof; providing a severability clause and an effective date. The Planning and Zoning Commission recommends approval (5-0). This item was discussed and voted on with Item B. 7. CITIZEN REPORTS A. Review of procedures for addressing the City Council. B. Receive citizen reports from the following: 1. Donna Woodfork regarding bringing rental property up to code in Southeast Denton. Ms. Woodfork felt that a rental inspection program was needed in Denton to provide safety for diverse economic classes in Denton. Leased residential property would be included in this program. She felt there were many slum landlords in Denton who took advantage of the poor, City of Denton City Council Minutes October 4, 2011 Page 12 students, illegal immigrants, and felons. She would like to see a rental code program implemented by the present Council. 2. Rebecca Murdock regarding a smoke free ordinance in Denton. Ms. Murdock thanked the Council for the consideration of a smoke free ordinance in Denton. A concern was the second hand smoke hazards. The economic impact of going smokeless had been watched throughout Texas with no negative economic impact noted when implementing a smoke free ordinance. She thanked Council for taking such an ordinance under consideration. Many felt Denton needed to move beyond a negative image 8. 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 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. Mayor Burroughs asked for a report outline on what alternatives, if any, were available for granting an individual a specific use permit for a group home in a mainstreaming context. Mayor Burroughs asked staff to research a mechanism to zone property at the time of annexation. Council Member Roden asked for a clarification on what could be done in temporary situations to house more than 4 non-family members in one single-family residence. B. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the Texas Open Meetings Act. There was no continuation of the Closed Meeting. C. Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the Texas Open Meetings Act. City of Denton City Council Minutes October 4, 2011 Page 13 There was no official action on Closed Meeting Items. With no further business, the meeting was adjourned at 8:02 p.m. _____________________________ MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS _____________________________ JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON CITY COUNCIL MINUTES October 11, 2011 After determining that a quorum was present, the City Council convened in 2nd Tuesday Session on Tuesday, October 11, 2011 at 4:00 p.m. in the City Council Work Session Room at City Hall. PRESENT: Council Member King, Council Member Roden, Council Member Engelbrecht, Mayor Burroughs, Council Member Watts ABSENT: Council Member Gregory, Mayor Pro Tem Kamp 1. Receive a report, hold a discussion and give staff direction regarding drafting a new Planned Development (PD) ordinance for inclusion within the Denton Development Code (DDC), with associated development standards. The discussion will include a general overview of the outline of the draft PD ordinance that will be included in the DDC. Mark Cunningham, Director of Planning and Development, stated that this presentation was the completion of one started at a prior meeting. The steps for a PD Detail Plan process involved the submission of a PD Concept Plan that was non-binding; a community input meeting; a Council work session; PD Development Plan with Council approval; and the PD Detail Plan with Planning and Zoning Commission approval. General PD Regulations - to avoid the identified short comings of the City's former PD regulations, the new PD regulations would address 28 specific areas. The adoption of the PD Development Plan was required by the Council and established the PD District. He noted that Item 4 which stated “include a master transportation, water, wastewater, and drainage study for the entire PD area that is of such detail that identify the major public infrastructure facilities needed by each phase, the connection of these facilities to the existing public infrastructure, and any off-site improvements required” had raised questions from Council at the last presentation. Council Member Watts noted that last time concerns from Council were on how to do a long range plan. He questioned if that portion was not being included or did staff need direction on #4. Cunningham stated that staff still needed direction from Council on how to proceed with the item or if Council still had questions. Mayor Burroughs indicated he was worried about not having adequate public infrastructure if a development was started and was not provided for a number of years. The proposal read that the developer would have to come up with that up front but the time frame might be many years out. He suggested putting in a time frame that would trigger an element for phasing. PS Arora, Division Manager-Wastewater Administration, stated that a development would do a master plan for the entire project which would show how the development fit in the larger picture of the infrastructure. That would show what needed to be identified in terms of water, streets, etc. City of Denton City Council Minutes October 11, 2011 Page 2 Mayor Burroughs questioned how a developer could predict where the water connection would come through because as time went on it might change due to other circumstances. Arora stated that an initial look would be done with what facilities currently were in place with the water lines, etc. They had models to know what the existing use was and if an additional load was placed on it how it would be handled. If the project was going to exceed the load, the model of the project would show that. Mayor Burroughs stated that only what the load was internal to the development in terms of volume for drainage or the water requirement would have to be identified. A developer would not have to identify the connections to other city facilities. Arora stated correct that once the impact of the load was identified, staff would know what to assess the developer for the infrastructure needs. Mayor Burroughs stated that the wording for Item #4 implied that the developer would have to know what the project would do to the city's infrastructure off- site as well. Arora stated that it could be both internal and external to the development. Council Member Watts felt that the wording of Item #4 needed to include that if the PD didn’t have the interior capacity when it came to Council, the developer needed to acknowledge that and have a plan on how to solve the problem. This was an issue of how to strike a balance of planning the capacity needs of development with an understanding of what the developer would have to do. Arora stated that was how the City would get there and know what was being proposed. If the infrastructure would not support the PD, then the developer and City needed to know what requirements were needed. Mayor Burroughs noted that the current wording for Item #4 included "connection of these facilities to exiting public infrastructure". He asked how a developer would know many years in the future where the connections would be and how would that be known up front to be meaningful. Arora stated that was done through the model. He stated that wording could be modified based on Council’s concerns. Council Member Watts asked about the list of 28 general fee regulations and who decided on the specifics of those items. Cunningham stated that there were guidelines associated with the list of 28. Council Member Watts stated that staff and a developer would agree on the general concepts and the project would then to the Planning and Zoning Commission and Council. Cunningham replied that was the correct sequence. City of Denton City Council Minutes October 11, 2011 Page 3 Cunningham stated that the next step was the PD Detail Plan. The proposal was to have the Detail Plan approved by the Planning and Zoning Commission and not Council as it had to be in accordance with the PD Development Plan. The PD Detail Plan must be in accordance with the adopted PD District Development Plan. Council Member Engelbrecht stated that he was not comfortable with that procedure. Cunningham stated that the PD Development Plan set the standards for the development. Twenty five years from now the applicant could have the opportunity to review the plan as it might be dated and could make adjustments for current standards. Once the plan was vested, it was there. Council Member Engelbrecht stated that it was one thing to have a plan and another thing to have it built. He was not convinced that this approach for approving the basic standards 25 years out would work. Mayor Burroughs asked at what point a Detail Plan was required to be submitted such as with a multi-phase development. Cunningham stated it was done when the developer was ready to do the phase. He noted that there would be some vesting due to state law. Something had to be done with the development plan within 24 months. If nothing was done, then the plan would expire. If something was done with the plan, then the entire plan would be vested. Aaron Leal, Deputy City Attorney, stated that the project was looked at as a whole and that was what was looked at for vested rights due to state law. Mayor Burroughs stated that a Detail Plan was when the elements on the ground were known. The specifics were for the Detail Plan and that was not done for the whole development. The uses were permanent when zoned and could not be changed. The way a development looked with trees, utilities, traffic flow, etc. was done at the detail level and that was under a structured time frame. Previously there was no time frame that expired but this proposal did have those time frames. Council Member Watts felt that in order to continue to give staff direction there was a need for an informal staff report or a work session on vesting rights as it applied to PDs and what vesting rights were or were not. That should include which regulations were subject to vesting and which had to follow under the current regulations. Mayor Burroughs suggested staff outline each of the elements and what would vest when a Concept Plan or Detail Plan was done and when they were lost. Cunningham stated that a detail plan would be approved by the Planning and Zoning Commission instead of the Council. Council Member Watts stated that he struggled with this option of not coming to Council for final approval. The Detail Plan phase was when everything was decided and at times those were very important to the community at large. City of Denton City Council Minutes October 11, 2011 Page 4 Cunningham stated that the PD Development Plan was when regulations for land use, etc. were determined and adopted by Council. The Detail Plan phase ensured that what was proposed on smaller tracks were designed in accordance with the regulations determined by Council. Council Member Watts asked how that figured into the example of Robson Ranch with its second detail plan. Cunningham stated that there were a lot of loop holes with the original plan regulations. The Detail Plan was to make sure it was in accordance with the regulations approved by Council. The developer could not go outside the standards set by the Council and if a change was needed, it would have to go back to Council. The bulk of the regulations were in the PD Development Plan. Council Member Engelbrecht stated that the interest of the community was in the site plan not the development plan. Cunningham stated that right now development plans did not come to Council for review and were only reviewed by staff. The development plan would have all of the lot coverage and all of the 28 items listed in the development plan regulations. Mayor Burroughs noted that the wording for the 28 areas did not indicate that they were under the development plan stage and he could not tell when that review occurred. He felt that needed to be made clearer. Cunningham stated that all of those design standards would be in the PD District Development regulations. When the proposal went to the Planning and Zoning Commission, the Commission was only ensuring that what was in the detail plan was in keeping with the PD District Development Plan. Council Member Roden asked what amount of time would be saved by not having Council approval in the fourth step. Cunningham stated that it might add another month. The goal was that the detail plan would not rehash the development standards already in place. Council Member Roden questioned the placement of the community input meeting. As it was now proposed, the community meeting would be showing the use of the property. However, the use was not the issue but rather what the project was going to look like. He asked when those types of discussions would take place. Cunningham stated that once the PD Development Plan was submitted, there would be two public hearings; one at the Planning and Zoning Commission level and one at the Council level to address the detail issues. Council Member Roden asked for an example of what the entire process would look like going through this process. Cunningham stated that staff could make such a presentation at a future work session. City of Denton City Council Minutes October 11, 2011 Page 5 Council Member Engelbrecht asked about an abandonment of a project or the starting of a project and not finishing it. Cunningham stated that staff was working on a possible cash out provision to make sure the project was implemented. Council Member Watts stated that as this was a change from the current process and that all of the ramifications might not be fully understood, he would suggest leaving the Detail Plan at the Council level so as to make the process comfortable with Council and then move it to the Planning and Zoning Commission in the future. Cunningham stated that the next step would be to address Council's input regarding the regulations and to run a couple of projects through the process to work out the kinks before it was adopted. Consensus of the Council was to keep working on the ordinance noting the Council’s concerns. Following the completion of the 2nd Tuesday Session, the City Council convened in a Closed Meeting to consider specific items listed below under the Closed Meeting section of this agenda. 1. Closed Session A. Consultation with Attorneys - Under Texas Government Code Section 551.071. 1. Consult with, and provide direction to, City's attorneys on legal rights, restrictions, obligations, and issues associated with the proposed annexation of DH-12, where a public discussion of such legal matters would conflict with the duty of the City's attorneys to the City of Denton, Texas under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, and where such matters may become an issue in potential litigation. B. Deliberations regarding Certain Public Power Utilities: Competitive Matters - Under Texas Government Code Section 551.086; and Consultation with Attorneys - Under Texas Government Code, Section 551.071. 1. Receive a briefing from Staff regarding public power competitive and financial matters regarding Wholesale Transmission Charges for September through December 1999; and consult with the City's attorneys regarding legal issues involved in Public Utilities Commission of Texas Docket No. 20381 and 39066 and Cause No. 99-14787 that have resulted in a decision by the Supreme Court of Texas, styled Texas Municipal Power Agency et al. v. Public Util. Commission of Texas, 253 S.W.3d 184 (Tex. 2007), which has now resulted in a Stipulation disposing [I have deleted "all"] of the pending litigation regarding this matter, where a public discussion of this legal matter would conflict with the duty of the City's attorneys to the City under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. Discuss, deliberate and provide Staff with direction. City of Denton City Council Minutes October 11, 2011 Page 6 Following the completion of the Closed Session, the Council convened in a Special Called Session to consider the following: Ordinance 2011-193 1. Consider adoption of an ordinance amending a Service Plan adopted on August 16, 2011, for an area of land to be annexed to the City of Denton, Texas, pursuant to an annexation plan, generally identified as DH-12 consisting of approximately 1,167 acres located south of east University Drive, east of north Mayhill Road, north and south of Blagg Road, north and south of Mills Road and east and west of south Trinity Road, and more specifically identified and depicted in Exhibit "A" attached hereto, which area is adjacent to and abuts the existing city limits of the City of Denton, Texas; providing for a savings clause; and providing an effective date. Jon Fortune, Assistant City Manager, stated that staff was recommending approval of the ordinance and plan as amended. Council Member Engelbrecht motioned, Council Member Roden seconded to adopt the ordinance as amended. On roll call vote: Council Member King “aye”, Council Member Roden “aye”, Council Member Engelbrecht “aye”, Council Member Watts “aye” and Mayor Burroughs “aye”. Motion carried unanimously. Ordinance 2011-194 2. Consider adoption of an ordinance of the City of Denton, Texas approving and authorizing the "Stipulation and Motion for Approval Thereon" regarding Public Utilities Commission of Texas Docket No. 39066 that involves the wholesale transmission cost payments for the period September 1, 1999 through December 31, 1999; authorizing the settlement of claims and authorizing the city's legal counsel of record to execute and deliver the stipulation; authorizing the city manager to receive payments and to pay out the applicable payments in such amounts as provided in said stipulation; and providing an effective date. Mike Copeland, Utility Attorney, stated that the ordinance had been provided in the Council packets. Council Member King motioned, Council Member Engelbrecht seconded to adopt the ordinance. On roll call vote: Council Member King “aye”, Council Member Roden “aye”, Council Member Engelbrecht “aye”, Council Member Watts “aye” and Mayor Burroughs “aye”. Motion carried unanimously. With no further business, the meeting was adjourned at 5:55 p.m. _____________________________ ___________________________ MARK A. BURROUGHS JENNIFER WALTERS MAYOR CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON, TEXAS CITY OF DENTON CITY COUNCIL MINUTES October 17, 2011 After determining that a quorum was present, the City Council convened in Work Session on Monday, October 17, 2011 at 9:00 a.m. in the City Council Work Session Room. PRESENT: Council Member King, Council Member Roden, Council Member Engelbrecht, Mayor Burroughs, Mayor Pro Tem Kamp ABSENT: Council Member Gregory and Council Member Watts 1. Receive a report and hold a discussion regarding the 111th Congress, 2nd Session and outlook for 112th Congress, 1st Session, to include Budget Issues, the Federal Debt Ceiling issue, Super Committee of Congress concerning deficit reduction, President's jobs plan, Surface Transportation, Aviation, Infrastructure Bank, Telecommunications, Cap & Trade/Climate Legislation, Hotel Occupancy Tax, HUD/DOT Sustainable Development, and other topics impacting local government. Ralph Garboushian, Capital Edge, presented a federal legislative update. Topics of discussion included budget issues in terms of debt ceiling deal, Super Committee and deficit reduction, President’s jobs plan, and outlook for FY 2010 appropriations and core local government programs. Council Member Watts arrived at the meeting. Garboushian stated that the Super Committee would be looking at a deficit reduction for the next decade with $1.5 trillion in budget cuts in the next ten years. The FY 2012 discretionary spending was of particular concern to cities which would be looking at cuts in CDBG funding on the Senate side but a slight increase on the House side. Local law enforcement assistance and local homeland security grants were also looking at cuts in funding. If those programs were cut, it would place an administrative burden on cities to run those programs. Mayor Pro Tem Kamp questioned what that would mean for Denton if the administrative fee was reduced from 20% to 10% as some of those funds were used for staff. Barbara Ross, Community Development Administrator, stated that this year the administrative cap for CDBG was $197,000 and of that $189,000 was used for staff salaries. In the HOME program the cap was 10% which was all used for staff salaries. A large funding cut would require a cut in at least one staff position. Currently two positions were funded through the General Fund. Staff could always be paid from those programs but then the funding for assisting households would be less. Mayor Burroughs asked if the administrative costs paid by CDBG and HOME funds in Denton were standard among other cities. Ross stated that she did not know of any comparisons with other communities. It depended on the size of community and what that community wanted to administer. Mayor Burroughs asked how much of the inspections were discretionary or were all mandated by the programs. City of Denton City Council Minutes October 17, 2011 Page 2 Ross stated that they were mandated in order to show that there had been involvement in the program and were drawing federal funds for a project which was allowed. Garboushian stated that one proposal for homeland security was to place all state and local grant programs in one category, fund $1 billion and have the Secretary of Homeland Security determine how best to spend the money. In that scenario, a number of communities would be cut from the program. The State Homeland Security grant was looking at a 33% cut in the Senate and House. He indicated that there was a focus on jobs in Washington with the American Jobs Act. He detailed the background of the President's plan to Congress. Key components included infrastructure, aid to State and local governments, tax cuts, unemployment and offsets. The Republicans had proposed their own jobs plan. Key elements included spending reform, tax reform, regulations reform, and domestic energy job promotion. City Manager Campbell asked about tax exemption on municipal bonds. Garboushian stated that he had only seen a draft but the President had submitted a proposal for deficit reduction with the thought to eliminate tax exemption for municipal bonds. That would be very hard on cities. Another element might be to force every city to be involved in social security. Council Member Roden asked if and when some version of a job bills passed, what would be the city's process to receive funding. John Cabrales, Public Information and Intergovernmental Affairs Officer, stated that in the past, Capital Edge notified the city when funding was available. Eligible departments were then contacted to submit for funding. Staff worked with the Budget Office as some grants required a match from the city. There were various staff members in place in various departments who were knowledgeable about the grants. Garboushian continued with transpiration issues which included surface transportation, aviation, and infrastructure bank. Surface transportation was currently on a short term extension of the Federal Highway Transportation program. He did not think there would be an opportunity for individual projects included in the bills and no earmarks for the bill. One concern was the Transportation Enhancement Program and the Safe Routes to School Programs which might be in jeopardy. Reserving those funds might be difficult but local Metropolitan Planning Organizations would still receive some funding. Council Member Watts stated that as a member of the TMPA Board he had seen a lot in the news about rail costs for transportation and asked if there any kind of status on that issue. Garboushian stated that railroads were a large lobby presence in Washington but as more and more people sent a message out regarding the costs, the Transportation Safety Board would have to look closer at it. He presented a handout comparing the President’s, Republican and Democratic proposals for the National Infrastructure Bank In the area of Hotel Occupancy tax Garboushian noted an effort by on-line travel to preempt the ability of cities to collect hotel occupancy taxes. Another issue of note dealt with post offices. One proposal suggested was to close some post offices across the county while another proposal City of Denton City Council Minutes October 17, 2011 Page 3 was to close processing centers such as the one in Dallas. No Denton facility was suggested at this point. Garboushian continued with a review of HUD/DOT Sustainable Development, Cap & Trade/Climate Legislation and telecommunications. Council discussed those issues in terms of what it meant for Denton. With no further business, the meeting was adjourned at 10:25 a.m. _____________________________ MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS _____________________________ JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON CITY COUNCIL MINUTES October 18, 2011 After determining that a quorum was present, the City Council convened in a Work Session on Tuesday, October 18, 2011 at 3:30 p.m. in the Council Work Session Room at City Hall. PRESENT: Council Member Watts, Council Member Gregory, Council Member Engelbrecht, Mayor Pro Tem Kamp, Council Member Roden ABSENT: Council Member King and Mayor Burroughs 1. Citizen Comments on Consent Agenda Items There were no citizen comments on Consent Agenda items. 2. Requests for clarification of agenda items listed on the agenda for October 18, 2011. Mayor Pro Tem Kamp noted that Consent Agenda Item E was presented to the Mobility Committee which recommended the item to Council for consideration. Council Member King arrived at meeting. 3. Receive a report and hold a discussion regarding the draft Update to the City of Denton Pedestrian and Bicycle Linkage Component of the Mobility Plan. Jim Coulter, Director of Water Utilities, stated that a document had been created that the community would be able to work with and would continue to grow in the future. He introduced Kevin St. Jacques from Freese and Nichols who would provide an update on the Plan. St. Jacques stated that a pedestrian/bicycle plan focus group has been formed. Seventeen individuals were invited to participate with fourteen individuals responding. There had been eleven active members participating in the group. The invitees were from various stakeholder groups such as TxDOT, Parks and Recreation, Denton ISD, Denton Police, UNT/TWU, DCTA, local bicycle groups and downtown business owners. Benefits of walking/bicycling included public health, community vitality, reduced parking footprint, and efficient roadway use. Pedestrian/bicycle plan development approach – The approach included (1) assessing the origins and destinations, (2) assessing facility options for various user types, (3) developing on-street, off-street networks, (4) preparing design guidelines for facilities, (5) developing supporting programs & policies, (6) establishing priorities, (7) estimating costs, and (8) adoption. He reviewed bicycling/walking destinations, pedestrian/bicycle networks and the Plan timeline. Immediate range facilities were those with a goal of 1-3 years. These included 35 miles of on- street network bike routes & lanes with an estimated cost of $0.6-$1.2 million. Short range facilities were those with a goal of 3-10 years and included 48 miles of on-street network with an estimated cost of $0.7 million - $1.7 million and 20 miles of sidepaths and trails network with an City of Denton City Council Minutes October 18, 2011 Page 2 estimated cost of $5 million - $10 million. Other immediate and short range projects would involve supporting amenities and programs. Implementation of the plan – Implementation would involve (1) bond elections and a Blue Ribbon Committee, (2) CIP projects, (3) short range projects with restriping, signage, and ongoing projects, (4) medium range projects including capital improvements and grant funds, and (5) long range projects including mobility plan expansion and private investments. Council Member Roden asked if it would be appropriate to identify certain target goals in terms of ridership or pedestrian activity for future years. St. Jacques stated that was often done. If there was a good base line measurement, goals could be set for future years. Sometimes it could be too far out and not realistic. Recommendations include benchmarks for the projects. The city website could be used for citizens to log their trips. Council Member Roden stated that the plan had “pedestrian” in the name but specific recommendations were only for bicycles. He questioned if there was any sidewalk connectivity in the city considered. St. Jacques stated that the plan started out as a bike plan but morphed into a bike and pedestrian plan. A survey of city sidewalks was done and recommendations were made on where to connect the gaps in the school areas. This plan was more of a bike and pedestrian plans as far as facilities that would share paths and trails. Council Member King asked about the process for allocating funds and what project to pick first. St. Jacques stated that portion was left vague for local preference and selection. The 1-3 year core activities were centered in the TWU/UNT/downtown area. Council Member Gregory questioned where the sidepaths and trails network were located in the plan. St. Jacques stated that they were not specifically listed in the plan and not prioritized in the plan. The Parks Department was working on some of the projects and where to go with those. Council Member Gregory asked how pedestrians and bicycles would share facilities. St. Jacques stated that the minimum width for sidewalk sharing was 8 feet. A trail would be 10- 12 feet wide due to the amount of usage at the same time. Council Member Gregory stated that when there were shared trails like the Denton rail trail he would recommend signs to caution bikes to ride certain speeds around pedestrians. St. Jacques stated that there were standard signs that bicycles needed to yield to pedestrians. Those could be posted up and down the corridor. Council Member Gregory felt it was a great plan and as time went on things would be discovered that needed to be modified and needed to come before Council. Some issues might only have to City of Denton City Council Minutes October 18, 2011 Page 3 go to the Mobility Committee or the Traffic Safety Commission. Those entities could review any revisions and make recommendations to Council. Council Member Watts questioned the method for determining costs as they did not include right-of-way, street repair or street configuration. St. Jacques stated that the costs dealt with the details of how specific the plan needed to be for each street. Council Member Watts stated that restriping for Jagoe Street was listed. He questioned how close the estimate was to the actual cost. He stated that he would like to see that if the plan was prioritized with DCTA and the universities which projects would be preferred. Council Member Engelbrecht noted that the wording of the objectives used "consider". He suggested using “implement” as he was concerned that using “consider” would not indicate that it should be done. St. Jacques stated that he would be glad to strengthen the words but he did not want to originally be highhanded if the city didn't have money to do it. Council Member Engelbrecht suggested the following word changes: In Objective #1 strike “consider” and put “implement”; in Objective #2 strike “encourage”; in Objective #4 reduce the number of bike/ pedestrian accidents and in Objective #8 he did not know what “strategically” meant. Council Member Roden felt that Bell Avenue should be added to the list of arterial roadways with barriers due the problem area near the rail station. He also recommended a bike coordinator for the implementation of the plan. Coulter stated that would be nice but felt it would be better to spend the dollars on projects rather than staff 4. Receive a report, hold a discussion, and give staff direction regarding the execution of a contract for Professional Services for Wallace Roberts and Todd to serve as the consultant on the update to the City of Denton Comprehensive Plan. Bryan Lockley, DRC Administrator, stated that staff had updated Council in August regarding the selection of Wallace Roberts and Todd (WRT) to serve as the lead consultant on the update of the Comprehensive Plan. WRT has partnered with a number of subcontractors to address specific aspects of the plan. Staff had started contract negotiations with WRT to identify phasing, project tasks and project costs. The latest fee proposal from WRT for their project team consisted of a five phased approach from project organization to plan adoption. Each project phase included the amount of hours each project team member would need to complete the task along with the total hours and cost for that phase. This provided an itemization of tasks, hours and cost per phase with each phase building on the previous with the majority of the responsibilities being performed in Phases 2 through 4. It was anticipated that this effort would take 18-24 months for completion, at a total cost of $628,500. Although the contract had not been finalized, staff expected that the final cost would be in the range provided by WRT. A City of Denton City Council Minutes October 18, 2011 Page 4 project total for hours had been received but not for each task. The fee proposal originally submitted was more detailed and staff asked WRT to put in the actual contract the task as a whole and as specific tasks. Staff was also asking for meeting costs and other costs that could either be taken away or be put into the plan. Once the contract was finalized, it would come back to Council for approval. At that time, the work plan itself would be reviewed with a schedule for each phase, a formal kickoff with a public announcement, a Face Book page and other information to tell citizens about the project and how to be involved in the project. Council Member Engelbrecht asked for a list of citizen participation when the time came for Council review. Lockley stated that the initial phase was to identify them but staff did not want to exclude anyone. This would be an open process for all to be involved with. Council Member Engelbrecht asked if the list of those who would be invited to participate in the project would include neighborhood representatives, industrial representatives or other employees. Lockley stated that the initial plan was to identify major employers such as UNT, TWU, FEMA, Peterbilt and other large organizations to be involved in the process. Neighborhood groups, large developers, large land owners all had a role in the process of the plan. The cost of the project would include $600,000 out of the non-airport gas well fund and the remaining funds from the General Fund. Mayor Pro Tem Kamp asked for a brief explanation of why the city was doing this process. City Manager Campbell stated that a Comprehensive Plan was a major guide for Council and staff to use in the process of development of the city. Zoning and standards had to be met while the city was developing. The Comprehensive Plan objective was to update the plan every 10 years and Denton was behind that time frame. It was a time consuming effort with lots of expertise needed to do the project but it was a very valuable asset to the community. Council Member Gregory stated that the last time the plan was updated he knew over 1000 citizens participated. As the cost of this plan was considered, was the cost of the time for the consultants included for meetings with citizens. He questioned what the goal was for the number of citizens to be involved. Lockley stated that staff had a discussion about the prior update and noted that they had about 60% citizen participation. One consideration was traditional meetings that were done in the past versus today with so many different types of social media available which would assist in citizen participation. Staff was working on the development of a Face Book page and Twitter page which would get the information out to citizens and allow for the citizens to respond back. Traditional meetings with everyone in one place would not be so necessary with the use of more social media. City of Denton City Council Minutes October 18, 2011 Page 5 Council Member Gregory stated that by using social media outlets, the amount of citizen participation could be increased plus keep costs down. Lockley stated that it would keep the costs down and reach a portion of the citizens that might not have been reached before. Council Member Watts stated that he struggled with the hour breakdown and what was all included. He would like to see that before the contract came for a final review so he could look at what was all involved. He was concerned that the consultant knew how much money had been set aside for the project and the estimate went to that amount. Lockley stated that the consultant did not know how much had been set aside for the project. Council Member Watts indicated that he did not have a problem with the project but was concerned with the amount of money involved. Lockley stated that the initial submission was much higher than the current proposed cost. As staff continued with the process, there would be a level or degree of involvement by staff to reduce the amount or cut out some of the tasks. Council Member Watts stated that he would like to see the original submission to compare it with the current proposal. 5. Receive a report, hold a discussion, and give staff direction regarding the alignment of the Denton Municipal Electric Northeast Denton Transmission Line Upgrade Rebuild Project. Phil Williams, General Manager of DME, provided an update on the project and indicated that there was a public hearing on this item at the regular meeting. Williams presented a summary of the three public hearings that already had been held. He showed examples of the old transmission lines and the proposed new lines. He also showed the existing line and indicated that the rebuild project had been in the capital budget for several years. The project was needed due to the growth of the City. The original line was built to the standards at that time with 30 feet of right-of-way. As staff went further into the project, they learned that there would be a need for 75 feet of right-of-way. If that would have been done in an existing neighborhood it would have taken many homes. Staff knew that they needed to get out of the neighborhoods and into open field areas. Significant activities to date included (1) the project was approved in the CIP budget, (2) identified the need for property acquisition assistance, (3) held neighborhood meetings on July 18, August 8 and October 3, (4) updated the th City Council on September 13, (5) Public Utility Board recommended approval on October 10 and (6) City Council public hearings on October 18 and November 15. At the second neighborhood meeting staff discussed alternate routes trying to get to open fields. One option, the Red Route, impacted several homes which prompted staff to look at further options. Option B, the Green Route, had an issue getting over to Mack Park. When using parkland which was partially funded with State funds which Mack Park was, there was the issue that any land displaced with transmission lines would have to be replaced. Besides the additional City of Denton City Council Minutes October 18, 2011 Page 6 cost of going through the park, this route would impact 14 homes. Another option would have stayed on the TMPA route but there was an apartment complex there which would not allow for the expansion of the right-of-way. One of the neighborhood meetings suggested combining the two options going up as far as possible in open land and then cut over at Paisley. That route would only impact 3 homes but would require an additional crossing of Highway 380 and an additional railroad crossing. North of Highway 380 the other issue was with Kings Row and TxDOT right-of-way which came right up to the homes. There was the issue of whether the city could overhang TxDOT or have to cross over to the other side. The substation itself was moved. Going north out of the substation, the exiting line went through some very tight areas with limited right-of-way. An option would be to go more along Loop 288, come down Sherman and north to Hercules. Most of Hercules, however, was too tight and couldn’t be done in some areas. One other route was Loop 288, cross it and go over on to school property then go back over Loop 288 and come in on north side. Mayor Burroughs joined the meeting. Planned activities going forward included a City Council public hearing on November 15 and Council approval after the public hearing on that date. Council Member Gregory asked about the decision to move the new King Row substation. Williams stated that the neighborhood asked to move the substation closer to Loop 288 plus there was a gas line in the area and staff did not want to get too close to that. Council Member Roden questioned if there was a requirement to notify residents within a certain distance about the public hearing. City Attorney Burgess stated that the City was not required to hold a public hearing on this matter but felt it would be good for transparency. Council Member Roden asked how confident staff was that everyone one involved knew about the new route. Williams stated that notices were sent to all residences within 500 feet of any of the published routes such as the purple, green, red, etc. Mayor Burroughs asked about the time period for the expansion. Williams stated that the present line had been there for forty years. With the steel line it should last indefinitely. Following the completion of the Work Session, the Council convened in a Closed Session to discuss the following items: 1. Closed Meeting: A. Deliberations regarding Certain Public Power Utilities: Competitive Matters - City of Denton City Council Minutes October 18, 2011 Page 7 Under Texas Government Code Sec. 551.086; and Consultation with Attorneys - Under Texas Government Code, Sec. 551.071. 1. Discuss, deliberate, and receive a report and presentation from Staff regarding public power competitive and financial matters regarding Denton Municipal Electric's electric transmission operations, its transmission system needs, and the current regulatory requirements for DME; further discuss, deliberate and provide Staff with direction regarding the proposed "Transmission Operator Consulting Services Agreement" by and between the City of Denton, Texas and the City of Garland, Texas, who is a "Transmission Operator," which agreement provides for Garland's cooperation, supervision and assistance regarding Denton's qualification and certification as a "Transmission Operator," being a mandatory Federal regulatory requirement for utilities attaining the level of transmission assets owned and to be operated by DME. Receive a consultation from the City's attorneys regarding possible legal issues involved in retaining services for assistance from third-party transmission operators, where a public discussion of this legal matter would conflict with the duty of the City's attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. The Council convened in a Regular Meeting at 6:30 p.m. in the Council Chambers. 1. PLEDGE OF ALLEGIANCE The Council and members of the audience recited the Pledge of allegiance to the U. S. and Texas flags. 2.PROCLAMATIONS/PRESENTATIONS A. Proclamations/Awards There were no proclamations/awards for this meeting. 3. CITIZEN REPORTS A. Review of procedures for addressing the City Council. B. Receive citizen reports from the following: 1. Rochelle Cummings regarding green initiative projects. Ms. Cummings presented an overview of a Million Acts of Green. The project was an initiative to be greener in the nation and more energy efficient. She discussed the savings from using a soy City of Denton City Council Minutes October 18, 2011 Page 8 candle instead of a wax candle. A Million Acts of Green would unite a million people trading their wax candles for soy candles. She requested support in Denton for this project. 4. CONSENT AGENDA Council Member Gregory motioned, Council Member King seconded to approve the Consent Agenda and accompanying ordinances and resolutions. On roll call vote: Council Member King “aye”, Council Member Watts “aye”, Council Member Gregory “aye”, Council Member Engelbrecht “aye”, Council Member Roden “aye”, Mayor Pro Tem Kamp “aye”, and Mayor Burroughs “aye”. Motion carried unanimously. Ordinance No. 2011-195 A. Consider adoption of an ordinance adopting a schedule of fees for use of certain park facilities; superseding all prior fees in conflict with such schedule and providing for severability and an effective date. The Parks, Recreation and Beautification Board recommends approval (6-0). Ordinance No. 2011-196 B. Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute contracts through the Buy Board Cooperative Purchasing Network for the acquisition of two trucks, two Backhoe Loaders, and one Skid Steer Loader for the City of Denton Street and Traffic Departments; and providing an effective date (File 4839-Trucks and Heavy Equipment for Street and Traffic Departments awarded to Southwest International Trucks in the amount of $190,034.31, Holt-Cat in the amount of $173,016, and Bobcat Co. in the amount of $47,766.04 for a total award amount of $410,816.35). Ordinance No. 2011-197 C. Consider adoption of a an ordinance authorizing the City Manager to execute a Professional Services Agreement (PSA) with CP&Y, Inc. of Dallas, Texas for Engineering Services, Design and Development, Texas Commission on Environmental Quality Interface, and other consulting services associated with the City of Denton's Municipal Solid Waste (MSW) Facility and providing an effective date (File 4840-in an amount not to exceed $135,000). The Public Utilities Board recommends approval (7-0). Ordinance No. 2011-198 D. Consider adoption of an ordinance of the City of Denton, Texas providing for, authorizing, and approving the expenditure of funds for the purchase of Retaining Wall Materials utilized in the construction of a screening wall at the City of Denton Landfill. The requested materials are from only one source and in accordance with Chapter 252.022 of the Texas Local Government Code and City of Denton Purchasing Policy Chapter 2, Section III. Such purchases are exempt from the requirements of competitive bidding; and providing an effective date (File 4834-Three Year contract for the Purchase of Retaining Wall Materials for City of Denton Landfill awarded to Stone Strong, LLC in the estimated amount of $150,000 annually). The Public Utilities Board recommends approval (5-0). Ordinance No. 2011-199 City of Denton City Council Minutes October 18, 2011 Page 9 E. Consider adoption of an ordinance authorizing the City Manager to execute a Professional Services Agreement (PSA) with Innovative Transportation Solutions, Inc. for transportation services as set forth in the contract; and providing an effective date (File 4848-Professional Service Agreement for Transportation Consultant Services to Innovative Transportation Solutions, Inc. for a total amount of $126,000). Resolution No. R2011-039 F. Consider approval of a resolution allowing the Denton Community Theatre to be the sole participant allowed to sell alcoholic beverages at the Beaujolais on November 17, 2011, upon certain conditions; authorizing the City Manager or his designee to execute an agreement in conformity with this resolution; and providing for an effective date. Staff recommends approval of Denton Community Theatre's request to allow alcohol to be sold in the Civic Center for the Beaujolais event. Approved the request listed below. G. Consider a request for an exception to the Noise Ordinance for the purpose of the first Denton Day of the Dead, sponsored by the Industrial Street Guild. The event will be held on Industrial Street on Saturday, October 29, 2011, from 11:00 a.m. to 10:30 p.m. The exception is specifically requested to increase hours of operation for amplified sound on Saturday from 10:00 p.m. until 10:30 p.m. The amplified sound will not go above the allowable 70 decibels for an outdoor concert. Staff recommends approval of the request. Ordinance No. 2011-200 H. Consider adoption of an ordinance of the City of Denton, Texas to declare the intent to reimburse expenditures from the Wastewater Fund with Certificates of Obligation with an aggregate maximum principal amount equal to $350,000 to allow the Wastewater Department to purchase and acquire a piece of equipment for the beneficial reuse division, and providing an effective date. The Public Utilities Board recommends approval (5-0). Ordinance No. 2011-201 I. Consider adoption of an ordinance of the City of Denton, Texas to declare the intent to reimburse expenditures from the Solid Waste Fund with Certificates of Obligation with an aggregate maximum principal amount equal to $2,261,655 to allow the Solid Waste Department to purchase and acquire refuse and recycling vehicles and equipment in order to continue providing solid waste refuse and recycling collection operations; and providing an effective date. The Public Utilities Board recommends approval (5-0). Second Reading J. Consider adoption of an ordinance on second reading of the City Council of the City of Denton, Texas, granting to Denton County Electric Cooperative, Inc., D/B/A CoServ Electric, its successors and assigns, the non-exclusive right to use and occupy rights-of- way within the City of Denton for the construction and operation of an electric transmission and distribution system; prescribing conditions governing the use of the public rights-of-way; providing for compensation therefor, providing for a term of said City of Denton City Council Minutes October 18, 2011 Page 10 franchise; providing for written acceptance of this franchise; finding that the meeting at which this ordinance is passed is open to the public; providing for severability; and providing for an effective date. Ordinance No. 2011-202 K. Consider adoption of an ordinance of the City Council approving a "Transmission Operator Consulting Services Agreement" by and between the City of Denton, Texas and the City of Garland, Texas in the amount not-to-exceed $350,000; directing the City Attorney or her designee to seal Exhibit "C" to the Agreement and deliver said Exhibit "C" to the City Secretary for deposit; as the said Exhibit "C" contains information that is confidential, competitive, sensitive and deals with the security of the DME system; which Exhibit "C" constitutes a Public Power Competitive and Financial Matter in accordance with Section 552.133 of the Texas Government Code; authorizing the City Manager to execute and deliver said agreement; providing for the expenditure of funds; and providing an effective date. The Public Utilities Board has considered this agreement. Approved the minutes listed below. L. Consider approval of the minutes of: September 6, 2011 September 13, 2011 September 20, 2011 5. PUBLIC HEARINGS A. Hold a public hearing and consider recommendations regarding the preferred alignment of the Denton Municipal Electric Northeast Denton Transmission Line Upgrade Rebuild Project. Phil Williams, DME General Manager, stated that the project was to rebuild a transmission line in northeast Denton from Kings Row Substation to northeast Denton. He presented a summary of the three public hearings that already had been held. He showed examples of the old transmission lines and the proposed new lines. He also showed the existing line and indicated that the rebuild project had been in the capital budget for several years. The project was needed due to the growth of the City. The original line was built to the standards at that time with 30 feet of right-of-way. As staff went further into the project, they learned that there would be a need for 75 feet of right-of-way. If that would have been done in an existing neighborhood it would have taken many homes. Staff knew that they needed to get out of the neighborhoods and into open field areas. Significant activities to date included (1) the project was approved in the CIP budget, (2) identified the need for property acquisition assistance, (3) held neighborhood meetings on July 18, August 8 and October 3, (4) updated the City Council th on September 13, (5) Public Utility Board recommended approval on October 10 and (6) City Council public hearings on October 18 and November 15. At the second neighborhood meeting staff discussed alternate routes trying to get to open fields. City of Denton City Council Minutes October 18, 2011 Page 11 One option, the Red Route, impacted several homes which prompted staff to look at further options. Option B, the Green Route, had an issue getting over to Mack Park. When using parkland which was partially funded with State funds which Mack Park was, there was the issue that any land displaced with transmission lines would have to be replaced. Besides the additional cost of going through the park, this route would impact 14 homes. Another option would have stayed on the TMPA route but there was an apartment complex there which would not allow for the expansion of the right-of-way. One of the neighborhood meetings suggested combining the two options going up as far as possible in open land and then cut over at Paisley. That route would only impact 3 homes but would require an additional crossing of Highway 380 and an additional railroad crossing. North of Highway 380 the other issue was with Kings Row and TxDOT right-of-way which came right up to the homes. There was the issue of whether the city could overhang TxDOT or have to cross over to the other side. The substation itself was moved. Going north out of the substation, the exiting line went through some very tight areas with limited right-of-way. An option would be to go more along Loop 288, come down Sherman and north to Hercules. Most of Hercules, however, was too tight and couldn’t be done in some areas. One other route was Loop 288, cross it and go over on to school property then go back over Loop 288 and come in on north side. Planned activities going forward included a City Council public hearing on November 15 and Council approval after the public hearing on that date. Council Member Watts stated that currently the line cut through neighborhoods. He questioned that as the transmission portion would be going away, would the poles be cut down to match the height. Williams stated that the pole would remain if it was structurally sound. Council Member Gregory asked if the City was required to have the public hearings. City Attorney Burgess stated that the hearing were discretionary and not required by law. Council Member Gregory asked about public notification. Williams stated that everyone within 500 feet of the existing routes and alternate routes had received notification. City Attorney Burgess stated it was also published in the newspaper. Council Member Gregory asked if the route was on the city’s website. Williams indicated that all of the alternates were on the website. The Mayor opened the public hearing. The following individuals spoke during the public hearing: Sam Alexander, 3219 McReynolds Road, Sanger 76266 - opposed David Zoltner, 2501 Timbertrail, Denton - support for purple route City of Denton City Council Minutes October 18, 2011 Page 12 Valerie McSween, 3028 Paisley, Denton 76209 - questions concerning the project Kathleen Davis, 2620 Piccadilly Lane, Denton, 76209 - disagreed with the route at Hercules and suggested using the Loop out to Locust The Mayor closed the public hearing. No action was required by Council on this item at this time. 6. CITIZEN REPORTS A. Review of procedures for addressing the City Council. B. Receive citizen reports from the following: 1. Donna Woodfork regarding Code Enforcement unfairness. Ms. Woodfork was not present at the meeting. 7. 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 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. Mayor Burroughs suggested that as answers were identified for questions presented regarding the alignment of the transmission line, they be posted on the city’s website. He also suggested a more enhanced map be posted in order to see street names, etc. Council Member Gregory requested an informal staff report on accidents that have happened on Bell Avenue around the Senior Center as he had been informed about issues with the angled parking in that area. City of Denton City Council Minutes October 18, 2011 Page 13 Council Member Gregory requested a report in a Work Session regarding an update on the variety of vehicles the city was using through the Internet and social media to provide information to citizens. Mayor Pro Tem Kamp noted that it was UNT’s Homecoming this Saturday and also a fund raiser event for the Denton Animal Shelter Foundation. Mayor Pro Tem Kamp requested a review of naming rights for public buildings and parks. B. Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the Texas Open Meetings Act. There was no continuation of Closed Meeting items. C. Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the Texas Open Meetings Act. There was no official action on Closed Meeting items. With no further business, the meeting was adjourned 7:20 p.m. _____________________________ MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS _____________________________ JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011 DEPARTMENT: Planning and Development ACM: Fred Greene SUBJECTDCA10-0011 Governmental Entity Development Review Process Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, amending Subchapter 4 of the Denton Development Code by adding section 35.4.4.3, entitled evelopment Review Process, providing a severability clause; and declaring and effective date. (DCA10-0011) The Planning and Zoning Commission recommends approval of this request (5-0). BACKGROUND In response to a request by the Denton Independent School District (DISD) regarding an expedited building permit review process, an Ad Hoc Committee was formed to review the existing process with the goal of developing a more streamlined review process for governmental entities such as DISD and Denton County. The City contracted with Tom Rutledge (TN&P) to assist in the facilitation of the process of the Ad Hoc Committee. The Ad Hoc Committee included representation from DISD, City of Denton, Denton County, contractors, architects, and engineers. (Exhibit I). The committee began by evaluating components of the existing development review process, reviewing primary purposes of each step, and ultimately identified a number of changes that could be utilized to facilitate a more concurrent review of governmental projects thus potentially shortening the timeline necessary to complete a project. The committee also discussed a number of ways in which to improve the overall process coordination between the City of Denton, DISD, and Denton County primarily in the forecasting, planning, site selection and project scheduling and construction of anticipated DISD and County facilities. To that end, the Ad Hoc Committee recommended actions or immediate steps governmental entities could undertake to facilitate a more efficient process. These are outlined as follows: Agenda Information Sheet November 15, 2011 1.COD Governmental Category Development Review Process The current review process was developed primarily for nongovernmental entities and as such, establishes specific criteria that attempts to ensure that public safety, adequate public facilities, regulatory compliance and appropriate environmental stewardship are accomplished. The primary purpose for developing a governmental category was to accomplish the same basic objectives as the nongovernmental process but recognize that governmental entities have a fundamentally different project purpose, commitment to code and regulatory compliance and profit motivation than the non-governmental developers. Recognizing these differences, we have attempted to evaluate the development review process with the idea of revising and reducing the approval timelines through concurrent reviews and approvals while maintaining the fundamental objectives of the review process. As part of the development review process, the City of Fort Worth utilizes what is called (CFA) that effectively takes the place of the three- way development agreement currently utilized in the existing process. This document serves to identify the public infrastructure and associated costs, sets the initial development fees based on the public infrastructure estimates and includes as part of the CFA the bonding and insurance requirements once project bids have been awarded. The proposed governmental category development review process includes this approach. 2.COD/DC/DISD Project Point of Contact and Development Review Interface Most projects require substantial coordination with many different disciplines and various organizations for the successful completion of a complex construction project. Reviewing project design and development compliance, inspecting the construction activities, integrating the project with public infrastructure, mitigating the project impact on the environment and facilitating the timely completion of new facilities are the key functions of the development review process. The committee agreed that project communication is the key to successful project completion. Identification of specific communication and problem resolution. Additional discussion focused on the inclusion in the review of major development projects such as Master Planned Community projects that come through the Denton review process. 3.DISD/DC Facility Development Projections Currently, the City develops five-year capital plans for general fund and utility projects. These capital plans are reviewed on an annual basis and bonds sold to fund projects within the five-year plan. The general fund capital plans are generally a result of five- year capital plan committee recommendations with the addition of various projects required for efficient City function. The utilities capital plans are developed based on community infrastructure need and priorities and also include projects necessary to address utility infrastructure requirements of projects from other entities such as TxDOT and Denton County. However, these capital plans have not been traditionally shared and/or coordinated with either DISD and/or Denton County except on an as needed basis. 2 Agenda Information Sheet November 15, 2011 There has been no attempt to share and/or coordinate capital planning efforts and associated project construction. DISD typically develops a growth management plan that addresses student demographic and associated facility needs but again it is an independent effort that rarely gets coordinated with either the City or County. 4.DISD/DC Bond Program Coordination and Project Structuring The primary issue discussed on this point was the lack of time from funding a project to opening or completing a project. DISD staff has a very short window to get projects accomplished. With multiple projects in any one year, the completion of these projects in the timeframe required has been unmanageable to address all of the infrastructure components of a project. Many of the infrastructure components are either not addressed or left until after the project is complete (open) to finish. The committee discussed how additional time could be achieved if the entities were willing to consider changing the structure of the bond committee process and/or project financing. Improvements in project planning and scheduling combined with restructuring of the capital process and project financing could provide additional time for facility and infrastructure review and construction particula. 5.COD/Developer Interface with DISD/DC The Developer interface is generally an independent function with only select individuals of each organization being included in the discussion. There is no overall developer coordination between entities. The City may inquire about school sites with the developer but, there is no agreed upon or codified requirements for school sites as part of the development review process. Currently, it is left to the developer to make contact and work through the development requirements with DISD. 6.DISD/COD Facility Site Selection Process The school site selection is an area that is critically important and impacts both DISD and the City. The site selection process has traditionally been a closed process involving only a select few. Yet, site selection can be a very important factor in determining the overall project costs. Good site selection can reduce the number of project challenges and associated construction costs. Good coordination of site selection coupled with appropriate confidentiality would yield future benefits. 7.COD/DC/DISD Planning Coordination Currently each entity does some level of planning for infrastructure needs utilizing various data from a variety of different sources. These planning efforts are primarily independent in nature and little information is ever shared as it relates to each other. The City and DISD do attempt to present the status of projects related to development and the associated need for infrastructure at the quarterly joint meetings between the Board and Council. However, there is very little coordination of common demographics, infrastructure forecasting and project timing between the City and DISD and no meaningful interaction with the County except for independent Precinct meetings regarding County projects (generally transportation). Generally, the funding interface 3 Agenda Information Sheet November 15, 2011 with Denton County for joint transportation projects is through a hired consultant, Innovative Transportation Solutions. Governmental Entity Development Review Process Development Review After numerous meetings, the Ad Hoc Committee developed a process that they believe addresses the concerns that are inherent in the current system. The current development review process is best described as linear applicants submit plans that are then reviewed by the development review committee members. This procedure prescribes that plans be submitted and approved before proceeding to the next phase of the process. The revised process allows for concurrent reviews utilizing a three pronged approach for development. Governmental entities will have the ability to submit plans concurrently for building construction, land use review, and infrastructure process review. These reviews will be performed over two phases, administrative and process approval, to ensure that preliminary approvals are received from outside agencies (i.e., TxDOT, FEMA) if necessary, and plans are submitted as agreed (Exhibits 2 and 3). The greater benefit of this process for governmental entities is their ability to commence construction sooner than would be allowed under the current system. Under this process, as reviews are performed and approved, limited purpose building permits may be issued at various points to allow for continual construction as along the plans are submitted at the requisite stage of review. As well, the process may be utilized for new construction or renovations and additions to existing school facilities. The proposed ordinances will amend Subchapter 4 of the Denton Development Code by inserting Section 35.4.4.3 entitled, governmental entity development review process. The ordinance language will acknowledge the establishment of this development review process, the applicability of the ordinance to which governmental entities, and the administration of the process by the Development Review Administrator. Staff has attempted to identify and define the characteristics of governmental entities to establish the organizations that are eligible for the governmental entity development review track. Staff has determined the following four (4) criteria to ascertain eligibility: 1.the power to tax real and tangible personal property; 2.limited geographic and jurisdictional boundaries; 3.locally elected or locally appointed governing members; and 4.the authority to provide a general public service or benefit. The ordinance will also define the Community Facilities Agreement and includes the information that is required for the agreement to be reviewed for approval. The flowchart that defines the operational characteristics of the process will be included in the criteria manual. PRIOR ACTION/REVIEW October 19, 2011 Planning & Zoning Commission Work Session November 2, 2011 Planning & Zoning Commission Public Hearing 4 Agenda Information Sheet November 15, 2011 OPTIONS 1.Approve as submitted 2.Approve subject to conditions 3.Deny 4.Postpone consideration 5.Table item RECOMMENDATION The Planning and Zoning Commission recommends approval of the proposal (5-0) and staff recommends approval of this proposed Code amendment. EXHIBITS 1.Ad Hoc Committee Members 2.Government Category Development Review Process flowchart 3.Government Category Development Review Process description 4.Draft Ordinance 5.November 2, 2011 Planning and Zoning Commission Public Hearing Minutes. Prepared by: Brian Lockley, AICP Development Review Administrator Respectfully submitted by: Fred Greene Assistant City Manager 5 "GOVERNMENTAL""GOVERNMENTAL""GOVERNMENTAL""GOVERNMENTAL"CATEGORYCATEGORYCATEGORYCATEGORY DEVELOPMENTDEVELOPMENTDEVELOPMENTDEVELOPMENTPROCESSPROCESSPROCESSPROCESS Green FieldGreen FieldGreen FieldGreen Field PREAPPLICATIONPREAPPLICATIONPREAPPLICATIONPREAPPLICATION MandatoryMandatoryMandatoryMandatoryforforforforGovernmentalGovernmentalGovernmentalGovernmentalCategory)Category)Category)Category) Renovations/AdditionsRenovations/AdditionsRenovations/AdditionsRenovations/Additions Approval ProcessApproval ProcessApproval ProcessApproval Process PlattingPlattingPlattingPlatting RoadwayRoadwayRoadwayRoadwayImprovementsImprovementsImprovementsImprovements Process Sequencing forProcess Sequencing forProcess Sequencing forProcess Sequencing for ROWROWROWROWDedicationsDedicationsDedicationsDedications the “Non Governmental” the “Non Governmental” the “Non Governmental” the “Non Governmental” OutsideOutsideOutsideOutsideAgencyAgencyAgencyAgencyReviewReviewReviewReviewand/orand/orand/orand/orApprovalApprovalApprovalApproval(i.e.(i.e.(i.e.(i.e.FEMA)FEMA)FEMA)FEMA) CategoryCategoryCategoryCategory ESAESAESAESADesignationsDesignationsDesignationsDesignations AlternativeAlternativeAlternativeAlternativeDevelopmentDevelopmentDevelopmentDevelopmentPlansPlansPlansPlans ExactionsExactionsExactionsExactionsbybybybytypetypetypetype VarianceVarianceVarianceVariance PublicPublicPublicPublicSafetySafetySafetySafety DevelopmentReviewDevelopmentReviewDevelopmentReviewDevelopmentReviewCommitteeCommitteeCommitteeCommittee (Brian(Brian(Brian(BrianLockley)Lockley)Lockley)Lockley) CivilCivilCivilCivilReviewReviewReviewReviewProcessProcessProcessProcess ApprovalApprovalApprovalApprovalProcessProcessProcessProcessBuildingPlanBuildingPlanBuildingPlanBuildingPlanProcessProcessProcessProcess (P.S.Arora)(P.S.Arora)(P.S.Arora)(P.S.Arora) ((BrianLockley(BrianLockley(BrianLockleyBrianLockley&&&&P.S.P.S.P.S.P.S.AroraArora)Arora)Arora))((Rodney(Rodney(RodneyRodneyPattersonPatterson)Patterson)Patterson)) SubmitSubmitSubmitPAC,PAC,PAC,andandandreviewPACreviewPACreviewPAC SubmitSubmitSubmitPAC,PAC,PAC,andandandreviewreviewreviewPACPACPAC commentscommentscommentswithwithwith commentscommentscommentswithwithwith staff/applicant/engineerstaff/applicant/engineerstaff/applicant/engineer CommunityCommunityCommunityFacilityFacilityFacilityAgreementAgreementAgreement staff/applicant/engineerstaff/applicant/engineerstaff/applicant/engineer BuildingBuildingBuildingPlanPlanPlanSubmissionSubmissionSubmission InfrastructureInfrastructureInfrastructureReviewReviewReview SubmitSubmitSubmitBuildingBuildingBuildingPermitPermitPermitpackagepackagepackage whichwhichwhichincludesincludesincludesthethethefollowing:following:following: SubmitSiteSubmitSiteSubmitSitePlanPlanPlanthatthatthatshowsshowsshowsthethethe following:following:following: CompleteCompleteCompletePermitPermitPermitApplicationApplicationApplication OffOffOffSite/OnSite/OnSite/OnSiteSiteSiteEasementEasementEasement andandandsupportingsupportingsupportingdocumentationdocumentationdocumentation CityCityCityWater,Water,Water,Sewer,Sewer,Sewer,Drainage,Drainage,Drainage, IdentificationIdentificationIdentificationand/orand/orand/or (Energy(Energy(EnergyCodeCodeCodeReports,Reports,Reports,TDLRTDLRTDLR roadsroadsroadsthatthatthatwouldwouldwouldserveserveservethethethe AcquisitionAcquisitionAcquisition LetterLetterLetteretc.)etc.)etc.) property.property.property. 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Cunningham responded that he did not know how to 2 answer that, it is true of any development. No parameter can be guaranteed to stay intact. 3 4 5 Conner motioned approval of this request with conditions presented by staff with a second by 6 Reece. On roll call vote: Commissioner Thom Reece "aye", Commissioner Frank Conner "aye", 7 and Commissioner Jay Thomas "aye". Commissioner Patrice Lyke "nay", and Commissioner Brian 8 Bentley "nay". Motion passed (3-2). 9 10 D. Hold a public hearing and consider making a recommendation to City Council regarding a proposed amendment to Subchapter 4 of the Denton Development Code regarding a governmental entity development review track. (DCA10-0011, Governmental Development Review Process, Brian Lockley) 11 12 Lockley stated that the governmental entity development review process was created for Denton 13 Independent School District (DISD) in association with the City of Denton and Denton County 14 from issues that arose during renovation work by DISD. The current development review process 15 in place is more for profit entities. This proposed development process is to improve services for 16 government entities. Lockley provided a list of representatives who were involved in the creation 17 of the governmental entities development review process. Lockley provided process flow charts for 18 this proposed development process that would allow for some steps to be completed concurrently 19 throughout the planning and building inspection phases of development. Lockley noted the benefits 20 of this proposed process would allow for faster building permit issuance for limited purposes such 21 as ground work before the vertical development is approved by the Planning Division. The 22 language for the process would go in the DDC and the descriptive process flow chart would go into 23 the Criteria Manual. Governmental entities would include DISD, Denton County and internal City 24 of Denton projects. This process would address a number of concerns over time. 25 26 Reece moved approval of this request with a second by Lyke. On roll call vote: Commissioner 27 Patrice Lyke "aye", Commissioner Thom Reece "aye", Commissioner Frank Conner "aye", 28 Commissioner Jay Thomas "aye", and Commissioner Brian Bentley "aye". Motion approved (5-0). 29 6. FUTURE AGENDA ITEMS: Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the Planning and Zoning Commission 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. 30 31 Cunningham stated that a joint City Council and Planning and Zoning Commission session would 32 be coming in 2012 and requested that the Commission inform him of any issues they would like to 33 be addressed. 34 35 36 Thomas adjourned the meeting at 8:04 p.m. 37 1 AGENDA INFORMATION SHEET AGENDA DATE: November 15, 2011 DEPARTMENT: Denton Municipal Electric ACM: Howard Martin, Utilities 349-8232 SUBJECT Hold a second public hearing and consider recommendations regarding the preferred alignment of the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project; and consider a Resolution of the City Council of the City of Denton, Texas regarding establishment of the route of the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project; and providing an effective date. BACKGROUND Denton Municipal Electric has a project underway consisting of the rebuild of two existing 69kV electric transmission lines, in the northeast quadrant of the city. The existing electric transmission lines occupy an approximately thirty-foot wide easement corridor that begins at the Spencer Substation, goes north to the Kings Row Substation, then westerly to the Denton North Interchange (west side North Locust Street at Hercules Street). Reconstruction is required to replace aging facilities and to increase the capacity to 138kV in the future. Also, the existing wooden poles, having ostensibly reached the end of their useful service lives, will be replaced with steel poles, of similar class to that of recent DME system upgrade projects. The original easement footprint, established in the early 1960’s, conformed to the rural nature of the affected land tracts of that period. Presently, the proliferation of urbanized development activity and encroachments along and within the easement corridor has made it increasingly difficult to operate and maintain the existing electric facilities. Current practice indicates that an easement width of seventy-five feet (75’) is the optimal minimum width to accommodate electric power transmission infrastructure, operations, and maintenance. To determine a final alignment for the rebuild of the transmission line, DME has held three neighborhood meetings with citizens living within 500 feet of the existing transmission line and any alternative routes. Three routes were presented as alternatives to the original alignment. Those alternative routes were commonly referred to in the meetings and in information on the DME website as the “red”, “purple” and “green” routes. Cost estimates were formulated by DME staff to evaluate all routes. The factors employed to evaluate each of the alternate routes were: Impact on homeowners Cost of easements Cost of work in existing substations Transmission line construction cost Distribution line construction cost 1 PRIOR ACTION/REVIEW (Council, Boards, Commissions) October 10, 2011 Presented to the Public Utility Board in Open Meeting October 18, 2011 Presented to the City Council and held a public hearing OPTIONS 1. Recommend approval of the preferred route as indicated on the exhibit. 2. Direct staff to consider other alternative routes. RECOMMENDATIONS Staff recommends the preferred route. EXHIBITS 1. Resolution Respectfully prepared and submitted by, Phil Williams General Manager, Denton Municipal Electric 2 DENTON NORTH SUBSTATION E�hibit A KINGS ROW SUBSTATION WOODROW SUBSTATION SPENCER SWITCH i I I I I � __.,.� I I I Y �� � � W � � C� I zl � � �IW ' I ' ' I � ' ' PROPOSED NEW KINGS ROW SUBSTATION Spencer to Denton North 69kV Transmission Line � W � e S Consent Agenda — Item 4.H. THE STATE OF TEXAS § § COUNTY OF DENTON § INTERLOCAL COOPERATION AGREEMENT BETWEEN DENTON COUNTY, TEXAS, AND THE CITY OF DENTON, TEXAS THIS AGREEMENT is made, entered into and executed by and between Denton County, Texas, a political subdivision of the State of Texas, engaged in the administration of county government and related services for the citizens of Denton County, Texas, hereinafter "the County;" and the City of Denton, Texas, a home rule municipality duly organized and existing under the laws and constitution of the State of Texas, engaged in the administration of municipal government and related services for the citizens of the City of Denton, Texas, hereinafter "the City." The County and the City are hereinafter collectively referred to as "the Parties." WHEREAS, the County and the City mutually desire to enter into this Agreement whereby the City agrees to perform construction of certain bicycle roadway accommodations within the street or road ways within the municipal limits of the City and Denton County Commissioner Precinct #1, as more particularly described herein, hereinafter "the Project;" and WIiEREAS, the Interlocal Cooperation Act, Texas Government Code Chapter 791 (the "Act"), provides authorization for a local government to contract with one or more local governments to perform goveinmental functions and services under the terms of the Act; and the County and the City herby mutually agree to be subject to the provisions of the Act; and; WHEREAS, the City is in the process of updating the Pedestrian and Bicycle Linlcage Component of the Denton Mobility Plan and has identified potential projects, including the Project, aimed at improving the accommodation of these alternative modes of transportation on the roadway system; and WHEREAS, the County and the City value the timely completion of the Project which involves roads which are an integral part of the City's and County's road system and the Parties are undertaking the Project to improve safe travel on an improved roadway. NOW, THEREFORE, this Agreement is hereby made and entered into by the County and the City upon and for the mutual consideration stated herein: WITNESSETH: I. Pursuant to Texas Government Code §791.011, the County and the City hereby enter into this Agreement in order to perform certain govenunental functions and services in the area of streets and roads. The purpose of this Agreement is to provide a governmental function or service that each party is authorized to perform individually. � � . -r �:� ���- • •� � �- -� .� � . . � • • � r • .•- � � ,• � '- . �� � � ' � � � .•- �,.�� � � r,�� � - , . � ; � - � _ ., � - • . a r- ;� l� l; ! � � 1' �. .!. ,� ! 1 i 11 11 _,;_ ;, � � - -... r � - � �- � � , . � � . - � •, ' � � ,� • • . �j 1111i1 -, i i ;� �; � , • , . � a � - � ♦ - � r. • , � , . -r , � •' , � � �, . � �� 1 111 11 1 . ,• � a- � � r-� .� ••: � • ,, ,. . � • �- r • ' •- . -• ! ,- . . � - . • • t. r ,�-� � f � �- . •; t �• '•, • '� �" - � . . • ' " • " " . . � i '. � ' � � I�I � ' � � ' . •' • • , ,' ' - �; , ', � • s ) ' ' t �� ' R� ! • s � �� � � �f • � ,r� •�� ' • • � !' � • f • •' •1 •, � a '� � � 1, � • ! #, •; -� � � . �, ''� � • • � , � _ 1 � ' � � - � � ♦ . �" /� � 'i � ��� � '• ' . 1, f - �` � ', ; '� ' � - . - �- � ♦ �,, � _ ' � . '' ' � , /' � + • � • i �.. � ' � � � � � ; �', ; � _ • y �, � �'• • i • � • � �! � � ' •� , • � i t • � ' � �!' � � � • - � - l � i r I;: � '�• � ' � :a: . s. ��,,, r. ' • � ' �' ► r r l ' .. � • • �, � �! � � � + R'� •' '� • ' �s! � •,'! � � • i � �' �• - • � � 1,-�;. � ' �.�. � i '�,. • ' � t ' '�,. .� , ��. � • , - " •' '•. '• '•. !�, � - � �.,' � �t ' • � # ■. • � .1. : ���: • � R �; failure; and (3) an opportunity for consultation with the non-defaulting party prior to termination. In the event of such termination, the County shall pay all approved invoices submitted by the City up to and including the date of termination. VII. This Agreement represents the entire integrated agreement between the County and the City and supersedes all prior negotiations, representations andJor agreements, either oral or written. This Agreement may be amended only by written instrument signed by both of the Parties. Notices shall be directed as follows: For City: Honorable Mark Burroughs Mayor of the City of Denton, Texas 215 E. McKinney Street Denton, Texas '76201 Copy To: Mr. George C. Campbell, Ciry Manager City of Denton 215 E. McKinney Street Denton, Texas 76201 For County: Honorable Mary Horn Denton County Judge 110 West Hickory Denton, Texas 76201 Copy To: Denton County Criminal Distric� Attorney's Office Civil Division 1450 East McKinney Street, Suite 3100 Denton, Texas 76209 VIII. The covenants, terms and conditions herein are to be construed under the laws of the State of Texas and are performable by the Parties in Denton County, Texas. THE PARTIES MUTUALLY AGREE THAT VENUE FOR ANY OBLIGATION ARISING FROM THIS AGREEMENT SHALL LIE SOLELY IN DENTON COUNTY, TEXAS. IX. The County agrees and understands that the County, its employees, servants, agents andJor representatives shall at no time represent themselves to be employees, servants, agents andJor representatives of the City. � The City agrees and understands that the City, its employees, servants, agents and/or representatives shall at no time represent themselves to be employees, servants, agents and/or representatives of the County. � As between the City and the County, and as permitted by law, the County agrees to accept full responsibility for the acts, negligence and/or omissions of all County employees, agents, subcontractors and/or contract laborers and for all other persons doing work under a contract or agreemeni with the County. XII. As between the City and the County, and as permitted by law, the City agrees to accept full responsibility for the acts, negligence and/or omissions of a11 City employees, agents, subcontractors and/or contract laborers and for all other persons doing work under a contract or agreement with the City. M:i:�i� This Agreement is not intended to extend the liability of the Parties beyond that provided for by law. Neither the County nor the City waive, nor shall be deemed to have hereby waived, any immunity or defense that would otherwise be available to it against claims made by third parties. '/.1 [� Subject to the terms hereof, in the event that any provision of this Agreement shall be found to be void or otherwise unenforceable pursuant to law, it is the intent of the Parties hereto that the remaining portions shall remain valid and in full force and effect to the fullest extent possible. Notwithstanding anything to the contrary herein, should the obligation of the County to reimburse the funds as contemplated by Article III and Article V, above, be found to be void or otherwise unenforceable, this Agreement may, if so elected by City, be terminated by the City, thereby relieving the Parties of all obligations hereunder. XV. The undersigned officers and/or agents of the Parties hereto are the properly authorized officials and have the necessary authority to execute this Agreement on behalf of the Parties hereto, and each party hereby certifies to the other that any necessary resolutions or other actions extending said authority have been duly passed and are now in fu11 farce and effect. XVI. Each party paying for the performance of governmental functions as provided herein shall make those payments from current revenues available to the paying party. XVII. This Agreement becomes effective when signed by the last party whose signing makes the respective agreement fully executed and the term of this Agreement is for the life of the Project beginning on the date of execution of this Agreement and continuing until the Project is completed. Executed in triplicate originals this DENTON COUNTY, TEXAS 110 West Hickory Denton, Texas 76201 By: Honorable Mary Horn Denton County Judge Acting on behalf and by the authority of The Commissioners Court of Denton County, Texas ATTEST: By: Denton County Clerk APPROVED AS TO FORM: By: Assistant District Attorney day of CITY OF DENTON, TEXAS 215 E. McKinney Denton, Texas 76201 By: Honorable Mark Burroughs Mayor of the City of Denton, Texas 20 Acting on behalf and by the authority of the City of Denton, Denton County, Texas ATTEST: By: Ciry Secretary APPROVED AS TO FORM: By: City Attorney COUNTY AUDITOR'S CERTIFICATE I hereby certify funds will be available to accomplish and pay the obligation of Denton County, Texas, under this Agreement. Denton County Auditor CITY CERTIFICATE I hereby certify funds will be available to accomplish and pay the obligation of the City of Denton, Texas, under this Agreement. Director of Finance APPROVAL OF INTERLOCAL COOPERATION AGREEMENT Denton County, Texas, acting by and through the Denton County Commissioners Court, having been advised of the Project requiring the payment of funds and assignment of responsibility and obligation for engineering and construction of striping, signage and other improvements to Pennsylvania Drive from its intersection with the IH35E frontage road south to Teasley Lane located in the City of Denton, Texas, and Denton County Commissioner Precinct #1, herein gives its specific written approval to the Project prior to beginning the Project in satisfaction of the requirements of the Interlocal Cooperation Act, Texas Government Code Chapter 791, and specifically Texas Goverrunent Code §791.014. The description of the Project to be undertaken and its location are as follows: Striping, signage and other improvements to Pennsylvania Drive from its intersection with the IH35E frontage road south to Teasley Lane, located within the corporate limits of the City of Denton, Texas, and Denton County Commissioner Precinct #1. The local governments which requested the Project and with whom the agreement is by and between are Denton County, Texas, and the City of Denton, Texas. By vote on the date below, the Denton County Commissioners Court has approved the project identified above and authorized execution of this document by the presiding officer of the Denton County Commissioners Court. Date: By: Presiding Officer of the Denton County Commissioners Court APPROVAL OF INTERLOCAL COOPERATION AGREEMENT The City of Denton, Texas, acting by and through the Denton City Council, having been advised of the Project requiring the payment of funds and assignment of responsibility and obligation for engineering and construction of striping, signage and other improvements to Pennsylvania Drive from its intersection with the IH35E frontage road south to Teasley Lane, located in the City of Denton, Texas, and Denton County Commissioner Precinct #l, herein gives its specific written approval to the Project prior to beginning the Project in satisfaction of the requirements of the Interlocal Cooperation Act, Texas Government Code Chapter 791. The description of the Project to be undertaken and its location are as follows: Striping, signage and other improvements to Pennsylvania Drive from its intersection with the IH35E frontage road south to Teasley Lane, located within the corporate limits of the City of Denton, Texas, and Denton County Commissioner Precinct #1. The local governments which requested the Project and with whom the agreement is by and between are Denton County, Texas and the City of Denton, Texas. By vote on the date below, the Denton City Council has approved the Project identified above and authorized execution of this document by the presiding officer of the Denton City Council. Date: By: Presiding Officer of the City of Denton, Texas Consent Agenda — Item 4.I. THE STATE OF TEXAS § § COUNTY OF DENTON § INTERLOCAL COOPERATION AGREEMENT BETWEEN DENTON COUNTY, TEXAS, AND THE CITY OF DENTON, TEXAS THIS AGREEMENT is made, entered into and executed by and between Denton County, Texas, a political subdivision of the State of Texas, engaged in the administration of county government and related services for the citizens of Denton County, Texas, hereinafter "the County;" and the City of Denton, Texas, a home rule municipality duly organized and existing under the laws and constitution of the State of Texas, engaged in the ac�ministration of municipal government and related services for the citizens of the City of Denton, Texas, hereinafter "the City." The County and the City are hereinafter collectively referred to as "the Parties." WHEREAS, the County and the City mutually desire to enter into this Agreement whereby the City agrees to perform construction of certain bicycle roadway accommodations within the street or road ways within the municipal limits of the City and Denton County Com�nissioner Precinct #4, as more particularly described herein, hereinafter "the Project;" and WHEREAS, the Interlocal Cooperation Act, Texas Government Code Chapter 791 (the "Act"), provides authorization for a local government to contract with one or more local governments to perform governmental functions and services under the terms of the Act and the County and the City herby mutually agree to be subject to the provisions of the Act; and; WHEREAS, the City is in the process of updating the Pedestrian and Bicycle Linkage Component of the Denton Mobility Plan and has identified potential projects, including the Project, aimed at improving the accommodation of these alternative modes of transportation on the roadway system; and WHEREAS, the County and the City value the timely completion of the Project which involves roads which are an integral part of the City's and County's road system and the Parties are undertaking the Project to improve safe travel on an improved roadway. NOW, THEREFORE, this Agreement is hereby made and entered into by the County and the City upon and for the mutual consideration stated herein: WITNESSETH: I. Pursuant to Texas Government Code §791.011, the County and the City hereby enter into this Agreement in order to perform certain governmental functions and services in the area of streets and roads. The purpose of this Agreement is to provide a governmental function or service that each party is authorized to perform individually. t i; , � � / . 1 1 • 1 ... , f f � � ,::,. . r, � I . • ��, / . �', .� � � � � F ,: - :� �! r �. / 1.. � � � � . ' � ��. • .,. � � � � . �i � .I: �' , I, I. , ,. � --. �'. i � . . �..�. � ,: � � � �' :. � . ..: . • � �' '. I .I I� � � 1 � �. , �' 1 �... / �',. :, i , ,.� �. � . �. 7 , � ) � � 1 , ., .�,. � ; �. '�,. � ; . '� 1 - t�'., � • � ;� c, /4 �!�� � � . 'i �� ��'� �� !! ■ - - • . }, ! - � , . ' �, � ' � � � " � "" �' � • _ +- �- �� �. • , �� ; �i� �� � .�, ' � . ' � " �• •,' � �! . � ; # F ' � ,, ' � ' '. _ • • ' 1 • ' ', .� r � � ' � � I � [. 1 '� � , � � °� � � � � � ` � . • � • ,' � ! . •"• ♦' i . � �� : � # . . • � . • ' •, • ' � �,- ' � •' • • " •' • � ;� •,,� �. ' �'� -• •�..' �,- � � � ; , � • •' ' � i ',, • . � ,, � • ` � � ' �' • - � -, . ' ' � ' r � . � � � •, • ' � ` * f: i • . ' ,. ' �, , _ � � �- '•,, '!: I f � �., � ' 1 • � ,�. � ; � � � , # ' • ' � � .' f' • : ', • • � � • f • • • , +. ' • � t , ',.. ! s • �' ! �'. � k � �, '� � � ' • � � ! . �,, • �,, � - ;� �" t� � � 1'� � �. !� �! ! �:� � t. � � " � '. � I . !' ' s: ,.........�,. _., � ' . • -/ • � � ' f• i• . � _ .. � �,, + � �, ,, - 1 .,. ! � - i� i - . � �. �. . �.. � � � A � .. .. . , .. � � � � I� ' � � - � � ` • ii 1 • , . • ., � • ' • � ,, �. � ) � ' � • � ". • ' • ', i • R, • !, � � • , • - ',, � • � � i •, •' � � ♦ + � 7� l. ' � - f � � �' � , . f� �, !, � � � �,-f, . ��....... ' �, - ',�:.. � �.�i r •" r '• � , � � � •' � '� � �' •I the substantial failure to perform; and (2) not less than thirty (30) calendar days to cure the failure; and (3) an opportunity for consultation with the non-defaulting party prior to termination. In the event of such termination, the County shall pay all approved invoices submitted by the City up to and including the date of termination. VII. This Agreement represents the entire integrated agreement between the County and the City and supersedes all prior negotiations, representations andlor agreements, either oral or written. This Agreement may be amended only by written instrument signed by both of the Parties. Notices shall be directed as follows: For City: Honorable Mark Burroughs Mayor of the City of Denton, Texas 215 E. McKinney Street Denton, Texas 76201 Copy To: Mr. George C. Campbell, City Manager City of Denton 215 E. McKinney Street Denton, Texas 76201 For County: Honorable Mary Horn Denton County Judge 110 West Hickory Denton, Texas 76201 Copy To: Denton County Criminal District Attorney's Office Civil Division 1450 East McKinney Street, Suite 3100 Denton, Texas 76209 VIII. The covenants, terms and conditions herein are to be construed under the laws of the State of Texas and are performable by the Parties in Denton County, Texas. THE PARTIES MUTUALLY AGREE THAT VENUE FOR ANY OBLIGATION ARISING FROM THIS AGREEMENT SHALL LIE SOLELY IN DENTON COUNTY, TEXAS. li�� The County agrees and understands that the County, its employees, servants, agents and/or representatives shall at no time represent themselves to be employees, servants, agents and/or representatives of the City. X. The City agrees and understands that the City, its employees, servants, agents and/or representatives shall at no time represent themselves to be employees, servants, agents and/or representatives of the County. .M� As between the City and the County, and as permitted by law, the County agrees to accept full responsibility for the acts, negligence and/or omissions of all County employees, agents, subcontractors and/or contract laborers and for all other persons doing work under a contract or agreement with the County. XII. As between the City and the County, and as permitted by law, the City agrees to accept full responsibility for the acts, negligence and/or omissions of all City employees, agents, subcontractors and/or contract laborers and for all other persons doing work under a contract or agreement with the City. XIII. This Agreement is not intended to extend the liability of the Parties beyond that provided for by law. Neither the County nor the City waive, nor shall be deemed to have hereby waived, any immunity or defense that would otherwise be available to it against claims made by third parties. _�I.� ►i� Subject to the terms hereof, in the event that any provision of this Agreement shall be found to be void or otherwise unenforceable pursuant to law, it is the intent of the Parties hereto that the remaining portions shall remain valid and in fuli force and effect to the fullest extent possible. Notwithstanding anything to the contrary herein, should the obligation of the County to reimburse the funds contemplated by Article III and Article V, above, be found to be void or unenforceable, this Agreement may, if so elected by City, be terminated by the City, thereby relieving the Parties of all obligations hereunder. � The undersigned officers andJor agents of the Parties hereto are the properly authorized officials and have the necessary authority to execute this Agreement on behalf of the Parties hereto, and each party hereby certifies to the other that any necessary resolutions or other actions extending said authority have been duly passed and are now in full force and effect. XVI. Each party paying for the performance of governmental functions as provided herein shall make those payments from current revenues available to the paying party. XVII. This Agreement becomes effective when signed by the last party whose signing makes the respective agreement fully executed and the term of this Agreement is for the life of the Project beginning on the date of execution of this Agreement and continuing until the Project is completed. Executed in triplicate originals this DENTON COUNTY, TEXAS 110 West Hickory Denton, Texas 76201 By: Honorable Mary Horn Denton County Judge Acting on behalf and by the authority of The Commissioners Court of Denton County, Texas ATTEST: By: Denton County Clerk APPROVED AS TO FORM: By: Assistant District Attorney day of , 20_. CITY OF DENTON, TEXAS 215 E. McKinney Denton, TeXas 76201 By: Honorable Mark Burroughs Mayor of the City of Denton, Texas Acting on behalf and by the authority of the City of Denton, Denton County, Texas ATTEST: By: City Secretary . ' ' ' � � _�_ _ • • : ►i By: City Attorney COUNTY AUDITOR'S CERTIFICATE I hereby certify funds will be available to accomplish and pay the obligation of Denton County, Texas, under this Agreement. Denton County Auditor CITY CERTIFICATE I hereby certify funds will be available to accomplish and pay the obligation of the City of Denton, Texas, under this Agreement. Director of Finance APPROVAL OF INTERLOCAL COOPERATION AGREEMENT Denton County, Texas, acting by and through the Denton County Commissioners Court, having been advised of the Project requiring the payment of funds and assignment of responsibility and obligation for engineering and construction of striping, signage and other improvements to City streets to establish two-way bicycle lanes from the Denton County Transportation Authority (DCTA) station west to the University of North Texas (LTNT) campus, which may affect Sycamore Street, Industrial Street and/or Mulberry Street, at the discretion of the City, located in the City of Denton, Texas, and Denton County Commissioner Precinct #4, herein gives its specific written approval to the Project prior to beginning the Project in satisfaction of the requirements of the Interlocal Cooperation Act, Texas Government Code Chapter 791, and specifically Texas Government Code §791.014. The description of the Project to be undertaken and its location are as follows: Striping, signage and other improvements to City streets to establish two-way bicycle lanes from the Denton County Transportation Authority (DCTA) station west to the University of North Texas (iJNT) campus, which may affect Sycamore Street, Industrial Street and/or Mulberry Street, at the discretion of the City, located within the corporate limits of the City of Denton, Texas, and Denton County Commissioner Precinct #4. The local governments which requested the Project and with whom the agreement is by and between are Denton County, Texas, and the City of Denton, Texas. By vote on the date below, the Denton County Commissioners Court has approved the project identified above and authorized execution of this document by the presiding officer of the Denton County Commissioners Court. Date: By: Presiding Officer of the Denton County Commissioners Court APPROVAL OF INTERLOCAL COOPERATION AGREEMENT The City of Denton, Texas, acting by and through the Denton City Council, having been advised of the Project requiring the payment of funds and assignment of responsibility and obligation for engineering and construction of striping, signage and other improvements to City streets to establish two-way bicycle lanes from the Denton County Transportation Authority (DCTA) station west to the University of North Texas (UNT) campus, which may affect Sycamore Street, Industrial Street and/or Mulberry Street, at the discretion of the City, located in the City of Denton, Texas, and Denton County Commissioner Precinct #4, herein gives its specific written approval to the Project prior to beginning the Project in satisfaction of the requirements of the Interlocal Cooperation Act, Texas Government Code Chapter 791. The description of the Project to be undertaken and its location are as follows: Striping, signage and other improvements to City streets to establish two-way bicycle lanes, from the Denton County Transportation Authority (DCTA) station west to the University of North Texas (LJNT) campus, which may affect Sycamore Street, Industrial Street and/or Mulberry Street, at the discretion of the City, located within the corporate limits of the City of Denton, Texas, and Denton County Commissioner Precinct #4. The local governments which requested the Project and with whom the agreement is by and between are Denton County, Texas and the City of Denton, Texas. By vote on the date below, the Denton City Council has approved the Project identified above and authorized execution of this document by the presiding officer of the Denton City Council. Date: By: Presiding Officer of the City of Denton, Texas