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January 10, 2012 Agenda
AGENDA CITY OF DENTON CITY COUNCIL January 10, 2012 After determining that a quorum is present, the City Council of the City of Denton, Texas will 2:30 p.m. convene in a Work Session on Tuesday, January 10, 2012 at 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 January 10, 2012. 3. Receive a report, hold a discussion, and give staff direction regarding Naming Policy Guidelines for City Buildings, Facilities, and Land. 4. Receive a report, hold a discussion, and give staff direction regarding amendments to the City of Denton smoking ordinance (86-069 as amended by 93-193). 5. Receive a report, hold a discussion, and provide staff direction concerning the current drought conditions and recommended revisions to Denton's Water Conservation and Drought Contingency Plan. 6. Receive a report, hold a discussion and give staff direction regarding the preferred alignment of the portion of the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project running from the King’s Row Substation to the Denton North Interchange. 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 Real Property – Under Texas Government Code Section 551.072; Consultation with Attorney – Under Texas Government Code Section 551.071. City of Denton City Council Agenda January 10, 2012 Page 2 1.Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the potential purchase of a tract of land, located in the N.H. Meisenheimer Survey, Abstract Number 810, Denton, County, Texas, and located generally south of Riney Road, and north of the City of Denton North Lakes Park. Consultation with the City’s attorneys regarding legal issues associated with the potential acquisition of the real property described above, where a public discussion of these legal matters would 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, or would jeopardize the City’s legal position in any potential litigation. 2.Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the potential purchase of a 6.205 acre tract and a 142 acre tract, more or less, located in the David Davis Survey, Abstract Number 356, Denton, County, Texas, and located generally along the west side of Tom Cole Road, directly across Tom Cole Road from the Denton Municipal Airport. Consultation with the City’s attorneys regarding legal issues associated with the potential acquisition of the real property described above; where a public discussion of these legal matters would 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, or would jeopardize the City’s legal position in any potential litigation. 3.Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the potential purchase of a 33 acre tract, more or less, located in the J. McDonald Survey, Abstract Number 873, Denton, County, Texas, and located generally west of the southwest end of the Denton Municipal Airport. Consultation with the City’s attorneys regarding legal issues associated with the potential acquisition of the real property described above, where a public discussion of these legal matters would 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, or would jeopardize the City’s legal position in any potential litigation. B.Consultation with 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 the leasing of land and financing of a City facility on University of North Texas property located at I-35 and North Texas Boulevard. The City of Denton City Council Agenda January 10, 2012 Page 3 discussion shall include financial information the City Council will review, including the offer of financial or other incentives. C.Consultation with Attorney – Under Texas Government Section 551.071. 1.Receive a briefing from and consult with the city’s attorneys regarding Item 5.A. on the agenda of January 10, 2012 regarding a Specific Use Permit (SUP) to allow for the drilling and extraction of natural gas from an underground storage formation on property located within a Neighborhood Residential 4 (NR-4) zoning and use district on approximately 2.066 acres located generally south of McKinney Street, approximately 900 feet west of Trinity Road. 2.Receive a briefing from and consult with the city’s attorneys regarding Item 6.B. on the Regular Meeting Agenda of January 10, 2012, regarding a Specific Use Permit (SUP) for an existing gas well drilling and production facility on property located within a Neighborhood Residential Mixed Use (NRMU) zoning and use district on approximately 2.64 acres generally located south of Airport Road, east of Interstate 35 West, and west of South Bonnie Brae Street. D.Deliberations regarding Real Property – Under Texas Government Code Section 551.072; Consultation with Attorney – Under Texas Government Code Section 551.071. 1.Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the potential lease of a tract of land, located at 910 Aeronca, Denton, Texas. Consultation with the City’s attorneys regarding legal issues associated with the potential lease of the real property described above, where a public discussion of these legal matters would conflict with the duty of the City’s attorneys to the City of Denton, Texas and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, or would jeopardize the City’s legal position in any potential litigation. 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: City of Denton City Council Agenda January 10, 2012 Page 4 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 1.National Blood Donor Month B.Presentation by Rotary Youth Exchange Student, Javier Vereda Gorge, from Melilla Spain, to the Mayor of a letter and a flag from the Mayor of his town in Spain. 3. CITIZEN REPORTS A. Review of procedures for addressing the City Council. B. Receive citizen reports from the following: 1. Timothy Trawick regarding the recent increase in parking fines and the enforcement policy. 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 – M). This listing is provided on the Consent Agenda to allow Council Members to discuss or withdraw an item prior to approval of the Consent Agenda. If no items are pulled, Consent Agenda Items A – M below will be approved with one motion. If items are pulled for separate discussion, they may be considered as the first items following approval of the Consent Agenda. A.Consider adoption of an ordinance of the City Council of the City of Denton, Texas, amending the Downtown Incentive Reimbursement Grant Program, and establishing an effective date. The Downtown Task Force recommends approval (14-0). The Economic Development Partnership Board recommends approval (8-0). B.Consider adoption of an ordinance of the City of Denton authorizing an Agreement between the City of Denton, Texas and the Children’s Advocacy Center for Denton County, Incorporated in the amount of $121,648; providing aid to the City of Denton Police Department in the investigation of child abuse cases; City of Denton City Council Agenda January 10, 2012 Page 5 providing client and clinical services to victims of child abuse and non-offending family members; providing for the expenditure of funds therefor; and providing for an effective date. C.Consider adoption of an ordinance of the City of Denton, Texas to declare the intent to reimburse expenditures from the General Fund with Certificates of Obligation with an aggregate maximum principal amount equal to $445,000 to allow for the design and construction oversight of the Linda McNatt Animal Care and Adoption Facility, and providing an effective date. D.Consider adoption of an ordinance authorizing the City Manager to execute a Professional Services Agreement (PSA) with Connolly Architects and Consultants for Design Services and Construction Oversight for the Linda McNatt Animal Care and Adoption Facility; and providing for an effective date (File 4817–Design Services and Construction Oversight for the Linda McNatt Animal Care and Adoption Facility awarded to Connolly Architects and Consultants in the amount of $440,532). E.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 Texas Association of School Boards (TASB) for the acquisition of fourteen vehicles for the City of Denton Police Department and one tractor for Denton Municipal Airport; and providing an effective date (File 4866– Purchase of Vehicles and Equipment for Police and Airport Departments awarded to Caldwell Country Chevrolet in the amount of $326,104 and Ag-Power, Inc. in the amount of $55,309.08 for a total award of $381,413.08). F.Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute a contract through the Buy Board Cooperative Purchasing Network for the acquisition of an excavator for the City of Denton Solid Waste Construction and Demolition Division; and providing an effective date (File 4878–Purchase of Excavator for Solid Waste Construction and Demolition Division awarded to Darr Equipment Company in the amount of $108,659). The Public Utilities Board recommends approval (5-0). G.Consider adoption of an ordinance accepting proposals and awarding a public works contract for the construction of the Bonnie Brae Substation for the City of Denton; providing for the expenditure of funds therefor; and providing an effective date (RFP 4861–awarded to Can-Fer Utility Services, LLC. in the estimated amount of $634,739). The Public Utilities Board recommends approval (5-0). H.Consider adoption of an ordinance accepting competitive bids and awarding an annual contract for the purchase of the electric transmission conductors for the City of Denton, Texas, Denton Municipal Electric; providing for the expenditure of funds therefor; providing for the retroactive ratification of the purchase in the amount of $335,129.60 as permitted in the provisions of the Ordinance No. 2009- 189, the ordinance providing for procurement procedures for purchases by Denton Municipal Electric for electric production, transmission, distribution, and station City of Denton City Council Agenda January 10, 2012 Page 6 systems in accordance with Texas Local Government Code Section 252.022(c); providing an effective date (Bid No. 4880–Annual Contract for the Purchase of Electric transmission conductors awarded to Stuart C. Irby in the net pricing as shown in Exhibit A of the ordinance). I.Consider adoption of an ordinance approving a salary increase for George C. Campbell under the performance review provision of his employment agreement with the City; authorizing the expenditure of funds; and providing an effective date. J.Consider adoption of an ordinance approving a salary increase for Anita Burgess under the performance review provision of her employment agreement with the City; authorizing the expenditure of funds; and providing an effective date. K.Consider adoption of an ordinance approving a salary increase for Robin A. Ramsay under the performance review provision of his employment agreement with the City; authorizing the expenditure of funds; and providing an effective date. L.Consider adoption of an ordinance authorizing the City Manager, or his designee, to execute on behalf of the City of Denton an Airport Lease Agreement between the City of Denton, Texas and First Financial Resources, Inc. for the property located at 910 Aeronca at the Denton Municipal Airport; and providing an effective date. The Council Airport Committee recommends approval (3-0). M.Consider adoption of an ordinance rejecting any and all competitive proposals for a public works contract for the construction of the Bonnie Brae Substation Masonry Fence for the City of Denton (Bid Number 4811), or take other appropriate action with regard to such proposals; and providing an effective date. 5. ITEMS FOR INDIVIDUAL CONSIDERATION A. Consider adoption of an ordinance of the City of Denton, Texas, approving a Specific Use Permit (SUP) to allow for the drilling and extraction of natural gas from an underground storage formation on property located within a Neighborhood Residential 4 (NR-4) zoning and use district on approximately 2.066 acres. The subject property is generally located south of McKinney Street, approximately 900 feet west of Trinity Road; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, severability and an effective date.(S11-0002) The Planning and Zoning Commission recommends approval (3-2). 6.PUBLIC HEARINGS A.Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, approving an amendment to Ordinance 2006-348, an environmentally sensitive area alternative development plan for approximately 71.01 acres of land located on the south side of I-35 East, south of Wind River Boulevard and west of Unicorn Lake Boulevard, within a Neighborhood City of Denton City Council Agenda January 10, 2012 Page 7 Residential Mixed-Use 12 (NRMU-12) zoning district with an overlay district, a Neighborhood Residential 4 (NR-4) zoning district, and a Regional Center Commercial Downtown (RCC-D) zoning district, and legally described as within the M.E.P. & P.R.R. Survey, Abstract No. 950 and the B. Lewis Survey, Abstract No. 769 in the City of Denton, Denton County, Texas; providing for a penalty in the maximum amount of $2,000.00 for violations thereof; providing a severability clause and an effective date. (ADP11-0009) The Planning and Zoning Commission recommends approval (7-0). B.Hold a public hearing and consider adoption of an ordinance of the City of Denton, approving a Specific Use Permit (SUP) for an existing gas well drilling and production facility on a property located within a Neighborhood Residential Mixed Use (NRMU) zoning and use district on approximately 2.64 acres. The subject property is generally located south of Airport Road, east of Interstate 35 West, and west of South Bonnie Brae Street; and providing for a penalty in the maximum amount of $2,000.00 for violations, thereof, severability and an effective date.(S09-0007) The Planning and Zoning Commission recommends approval (5-2). C.Hold a third public hearing and consider recommendations regarding the preferred alignment of the portion of the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project running from the King’s Row Substation to the Denton North Interchange; and consider a resolution of the City Council of the City of Denton, Texas regarding establishment of the route for this section of the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project; and providing an effective date. 7. CITIZEN REPORTS A. Review of procedures for addressing the City Council. B. Receive citizen reports from the following: 1. Donna F. Woodfork regarding new development. 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 City of Denton City Council Agenda January 10, 2012 Page 8 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 ___________________, 2012 at ________o'clock (a.m.) (p.m.) __________________________________________ CITYSECRETARY NOTE: THECITYOFDENTONCITYCOUNCILCHAMBERSISACCESSIBLEIN ACCORDANCEWITHTHEAMERICANSWITHDISABILITIESACT.THECITYWILL PROVIDESIGNLANGUAGEINTERPRETERSFORTHEHEARINGIMPAIREDIF REQUESTEDATLEAST48HOURSINADVANCEOFTHESCHEDULEDMEETING. PLEASECALLTHECITYSECRETARY'SOFFICEAT349-8309ORUSE TELECOMMUNICATIONSDEVICESFORTHEDEAF(TDD)BYCALLING1-800-RELAY- TXSOTHATASIGNLANGUAGEINTERPRETERCANBESCHEDULEDTHROUGHTHE CITYSECRETARY’SOFFICE. AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: CMO ACM: Fred Greene SUBJECT Receive a report, hold a discussion and give staff direction regarding proposed Naming Policy Guidelines for City Buildings, Facilities, and Land. BACKGROUND With the exception of City Council initiated naming of City facilities, there is no city-wide policy available that specifically addresses citizen requests to name or rename a City building, facility, land or portions thereof. The Library and Parks and Recreation are currently the only two City departments that have policies regarding the naming of facilities designed for use by their respective departments. City Council passed and approved Resolution No. R97-003 on January 21, 1997 which adopted tPark and Facilities Naming Policy. The Library Facilities Naming Policy was approved by the Denton Public Library Board on September 13, 2010, but not adopted by Council action. The City Council passed and approved a resolution amending the Park and Facilities Naming Policy (R2007-035) on October 16, 2007. The amended policy more clearly defines the procedures for naming or renaming of Park facilities. The resolution states that it is for the naming of parks and park facilities. The proposed naming policy guidelines provide for the purchase of naming rights, renaming of existing facilities, and the procedures for citizen participation in facility naming. It also provides a means for the City Council to waive the application of these guidelines. Several months ago prior to the development of these guidelines, a name change request was submitted to the City and forwarded to the Parks Board for consideration. The Parks Board denied that request. Since then the same organization has requested changing the name of other City facilities. They are now awaiting Council consideration and formal approval of a naming policy guideline. Agenda Information Sheet January 10, 2012 Page 2 RECOMMENDATION Staff recommends the approval of the proposed Naming Policy Guidelines for City Buildings, Facilities, Land or Portions Thereof. The proposed policy is applicable to all City departments. Further, it is recommended that, if approved by the Council, the policy be adopted by resolution at a subsequent Council meeting. PRIOR ACTION/REVIEW (Council, Boards, Commissions) City Council amended the Park and Facilities Naming Policy (R2007-035) on October 16, 2007. EXHIBITS PowerPoint Presentation Proposed Resolution Proposed Naming Policy Guidelines Proposed Name Application Form Respectfully submitted: _______________________ Eva Poole Director of Libraries CITY OF DENTON NAMING POLICY GUIDELINES FOR CITY BUILDINGS, FACILITIES, LAND OR PORTIONS THEREOF I.PURPOSE These policy guidelines are intended to address naming opportunities when a citizen, group, or organization submits a nomination to name a City building, facility, land, or portions thereof. These policy guidelines do not address the naming of streets, fire and police stations, or City Council initiated naming. II.DEFINITIONS City Buildings. City owned facilities used to conduct City business. Buildings may include, but are not limited to, City Halls, civic/community centers, conference/convention centers, public libraries, and public utility buildings/structures. City Facilities. City owned structures, amenities, or features, which are open to the public and used for City business, or public attractions of any kind, including, but not limited to, athletic fields, bridges, fountains, gymnasiums, library collections and/or departments/interior and exterior spaces, meeting rooms, picnic shelters, playground equipment, recreation facilities, swimming pools, tennis and basketball courts. City Land. Real estate owned and/or managed by the City, including park property or other open space areas. Funded Project. Any project that the City has fully funded prior to the start of construction. Non-Funded Project. Any project that the City wishes to construct, but does not have designated funding to do so. III. NAMING A CITY BUILDING, FACILITY, LAND, OR PORTION THEREOF THAT DOES NOT YET EXIST A City building, facility, land, or a portion thereof that does not yet exist, may be named after an individual, or as part of a fundraising campaign and donation. A. Naming After an Individual 1. The individual must be deceased at least five (5) years, and; 2. The individual must have been a resident of the City of Denton for fifteen (15) years or more at the time the naming is approved; and 3. The individual must be of good moral character and must not have been convicted of a felony, or Class A or B misdemeanor; and 4.The individual must have made exceptional contributions to either the City of Denton, the State of Texas, or the United States of America; and 5. a lasting legacy to the mission of the City building, facility, land, or portions thereof yet to be named. 6. New buildings, facilities, land, or portions thereof may also be named in memory of individuals who died in the line of duty serving the City of Denton, the State of Texas, or the United States of America; or died performing a heroic act, such as saving the life of another person; or a deceased individual who has made a significant and lasting contribution to humanitarian causes on a world or national level. In these instances, the City will obtain and/or attempt to make contact for approval from living family members of the individual recommended for having a City building, facility, land, or portion thereof named in their honor. B. Naming As Part of a Fundraising Campaign or Donation 1. A City building, facility, land, or portion thereof may also be named for an individual as part of a public fundraising campaign or donation. 2. Naming rights for a funded project can be accepted at any point during construction. 3. A funding agreement for the naming rights of a non-funded project or a portion thereof must be in place prior to start of construction. IV. PURCHASING NAMING RIGHTS FOR A CITY BUILDING, FACILITY, LAND OR PORTION THEREOF A. Cost of Naming Rights 1. The required donation to acquire the naming rights of a City building, facility, land, or portion thereof will be based on the following chart: Total Cost of A City Building, Facility, Land, Naming Cost or Portion Thereof $0 - $25,000 100 percent of total project cost $25,000 plus 50 percent of the proportionate $25,001 - $2,525,000 project cost over $25,000 up to $2,500,000 $1,275,000 plus 25 percent of the proportionate Over $2,525,000 project cost over $2,500,000 2. All funds contributed to naming City buildings, facilities, land, or portions thereof will be nonrefundable. 3. In the event a donor fails to meet the total required commitment, the City Council may reconsider the naming of the building, facility, or land. Portions of the required commitment already donated to the City are nonrefundable. B. Plaques, Markers and Memorials 1. Plaques, markers, and memorials that are requested to be located on City buildings, facilities, land, or portions thereof, must be reviewed and approved by the City as to design and maintenance requirements. 2. Total costs for purchasing plaques, markers, and memorials involved in the naming of a new building, facility, land, or portion thereof, as well as up to five (5) years of maintenance costs, shall be paid by the nominating individual or organization, unless City Council waives such funding. V. RENAMING AN EXISTING CITY BUILDING, FACILITY, LAND, OR PORTION THEREOF A. In order to respect the historical tradition and community values, which previous generations bestowed on these resources, City buildings, facilities, and land, shall typically not be renamed; however, City Council may elect to rename a City building, facility, land, or portion thereof. B. If an individual for whom a City building, facility, land or portion thereof has been named is later determined to have not met or no longer meets the criteria listed in III. A.3 set forth herein, the City Council may elect to remove the individual name from the City building, facility, or land. VI. PROCEDURES FOR NAMING CITY BUILDINGS, FACILITIES, LAND OR PORTION THEREOF A. Groups or individuals may submit nominations for naming a city building, facility, land, or portion thereof, by submitting a nomination to the City Manager on the City of Denton Name Application Form For City Buildings, Facilities, And Land. B. The City Manager, upon the receipt of the City of Denton Name Application Form For City Buildings, Facilities and Land, shall refer such naming request to the City Council. C. The City Council may, if it determines that such naming is desirable appoint, upon nomination by individual Council Members, a seven-member ad hoc Naming Committee to review the request. D. At least two members of the ad hoc Naming Committee shall be selected from any appropriate advisory board as the Council may determine appropriate, to make a recommendation to the Council. E. The name or names submitted will be considered by the members of the ad hoc Naming Committee and their recommendation will be forwarded to the City Council for consideration. F. Final decisions for such naming will rest with the City Council. G. The City Council may, by three fourth vote of entire City Council, waive the application of the guidelines outlined herein. CITY OF DENTON NAME APPLICATION FORM FOR CITY BUILDINGS, FACILITIES AND LAND 1. Date of Submittal: ________________________________________________________ 2. Individual or Organization Submitting Nomination: ________________________________________________________________________ 3. Signature of Nominator or Organization Representative: ________________________________________________________________________ Point of Contact: ________________________________________________________________________ Address: _______________________________________________________________ City, State, Zip: __________________________________________________________ Telephone: _____________________________________________________________ Email: _________________________________________________________________ 4. Nominee (Check One): Individual Organization 5. Recommended Name of City Building, Facility or Land: ________________________________________________________________________ 6. Location of City Facility, Building or Land: ________________________________________________________________________ 7. Explanation of why this name should be considered. biographical information and vitae or resume. Use additional sheets, if necessary: ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ ________________________________________________________________________ AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: CM/ ACM: George C. Campbell SUBJECT Receive a report, hold a discussion, and give staff direction regarding amendments to the City of Denton smoking ordinance (86-069 as amended by 93-193). BACKGROUND The City Council received citizen reports on August 16, 2011, September 6, 2011, and October 4, 2011, all of which advocated for a Smoke-Free Denton. Following the September 6, 2011 Citizen Report, Council Members requested a work session item be placed on the agenda to discuss an update to the smoking ordinance. Council Members also requested information be -free legislation and the current ordinances of surrounding communities. The following information, in addition to the exhibits attached hereto, is extensive. Staff understands Council has limited time to review all materials prior to January 10. As such, staff views the January 10 Work Session on this item as an introductory presentation and discussion, which may be followed by future meetings to allow for more in-depth discussion and review should Council so choose. The purpose of this report is to provide empirical data and factual information regarding the nature of local smoking ordinances in the state of Texas. This report does not purport to advocate for a particular position, rather intends only to provide Council with the most up-to-date and accurate information available to assist in the decision- and policy-making processes. In the event Council provides direction to amend the smoking ordinance, staff has included recommendations on the process by which to The Basics The issue of smoking has long been a controversial one, dating back to 1590 when Pope Urban VII issued the first smoking ban in history. In light of this, it is safe to say that no city is re- creating the wheel, as new an issue as it may be to an individual community. Starting in 1975, states and municipalities began to prohibit smoking with varying restrictiveness. Since then, 27 states have enacted statewide comprehensive bans on smoking in all enclosed public places, including bars and restaurants: Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Iowa, Kansas, Maine, Maryland, Massachusetts, Michigan, Minnesota, Montana, Nebraska, New Jersey, New Mexico, New York, Ohio, Oregon, Rhode Island, South Dakota, Utah, Vermont, Washington, and Wisconsin. Many of these states provide exemptions, the most common of which are gambling establishments, tobacco retail outlets, cigar bars, outdoor patios of restaurants and bars, small workplaces (fewer than five people), and private clubs/fraternal organizations. Cities in the state of Texas have had varying degrees of smoking ordinances in place for decades. Currently, 270 cities have smoking ordinances, ranging from the most skeletal to the most comprehensive. In 1992, El Paso was the first city in the state to implement a comprehensive smoking ban which includes the workplace, restaurants, and bars. Since the passage of the El Paso smoking ban, many other cities have followed suit with comprehensive ordinances, each tailored to their individual communities. 31 cities have comprehensive bans and 19 have bans that extend to restaurants and bars in restaurants, but exempt free-standing bars from the smoking ordinance. 57 cities ban smoking in private and municipal workplaces. In order to break down the basic components and most salient points of various municipal ordinances, two matrices have been provided for your review as Exhibits 2 and 3. Those chosen represent a cross-section of 17 Texas municipalities, many of which are in North Texas and in Denton County. Also included in the matrices, nd legislation from the state of Legislative Session, HB 670. HB 670 was -free legislation. When the bill seemed all but passed as an amendment to HB 1, it was ultimately eliminated. According to political analysts, this was the most politically amenable environment in which to pass such legislation, and still the bill did not succeed. The matrix in Exhibit 2 is in order of restrictiveness. This allows you to quickly assess who has the most comprehensive smoking bans. The cities of Allen and Denton rank as the least restrictive of those researched, where the cities of Southlake, McKinney, and Plano rank as the most restrictive. Exhibit 3 provides the list in alphabetical order for quick general reference. The matrix looks at the most common elements found in smoking ordinances: workplace, restaurants, outdoor patios, bars, billiard/bowling/bingo facilities, percentage of hotel rooms designated as smoking, parks, distance designated from a public entrance, exceptions to the ordinance, and penalties. The matrix stops short of providing other information that the Council may choose to consider if the direction is to amend the current ordinance, such as defining public places and workplaces. The workplace is addressed in most city smoking ordinances by including language referring to a ordinances independently define workplace and explicitly prohibit smoking therein. Others, such as Arlington, allow smoking if all employees are smokers, provided that the ventilation system does not allow smoke into common areas and the business does not share a ventilation system with other businesses. Most ordinances require a business or operator of a public place to conspicuously post a No Smoking sign. Likewise, if smoking is permitted, there must be signage to that effect in many ordinances. In order to assist the community in the event of a significant policy shift, staff would recommend that the City have signs printed for businesses to use, to help mitigate some of the initial costs incurred by existing businesses. The Public Debate The smoke-free movement has gained traction over the last decade due to an increasing amount of data that indicate tobacco products decrease the health of tobacco consumers, and that second- hand smoke is a greater risk to the general population than previously thought. Those representing the Smoke-Free movement frequently cite morbidity and health figures, some of which are included here. According to the Texas Department of State Health Services, nearly 25,000 deaths were attributable to tobacco use in 2001. More than 270 deaths per 100,000 population are attributable to smoking in Texas each year, according to data from the American Lung Association. The CDC claims that smoking and second-hand smoke exposure caused 443,000 deaths annually in the United States. Finally, 90% of lung cancer cases in Denton alone are caused by tobacco use, as indicated to Council in a citizen report from the Denton Regional Medical Center. Other smoke-free advocates argue that allergies and environmental quality are also issues that should be taken into consideration, as they are negatively impacted by cigarette smoking. The other side of the debate focuses on the issue of smoking as a personal right and private property right as a restaurant or bar owner. Some argue that the market should determine which establishments should be smoking and which should be non-smoking. Others claim that a smoking ban is direct government interference in the market, and will reduce business and sales tax receipts, negatively affecting the business community and the city tax base. Included as Exhibit 7, is an analysis from the Cato Institute that argues against smoking bans by providing oft-quoted arguments from market-oriented advocates. While the opposition to smoking bans frequently cite the loss of business as a counter-point to the implementation of an updated ordinance, studies have been conducted that empirically refute these claims. Provided in your exhibits are studies that have been conducted in cities which have implemented comprehensive smoking bans, assessing the trends in sales tax and mixed beverage sales tax among restaurants and bars. Exhibit 4 is a study conducted in 2006 on the impact of the smoking ordinance in Houston and Dallas. Exhibit 5 is a follow-up study conducted in 2009 from the Houston study to determine the long-term impact. Exhibit 6 is a study conducted by the CDC and Texas Health and Services Department in 2003 on the impact of the El Paso smoking ordinance. Each case study concludes that the smoking ordinances did not negatively impact sales tax or mixed beverage sales tax in the long-term. If Directed to Amend Ordinance Should the City Council direct staff to draft an amended smoking ordinance, public engagement may be a critical component of the process. Staff would propose, as one option, convening a citizen committee, representative of key stakeholders including the restaurant and bar industries and health officials, to develop and present a formal recommendation to City Council. Also, in order to maximize public engagement, staff would recommend including a question on the 2012 Citizen Survey addressing smoking in public places, and using Mind Mixer to further encourage public dialogue. Staff would also recommend that any ordinance be assessed through a scientifically valid study after one year, or other pre-determined period of time, to ascertain the economic impact on the Denton community. OPTIONS 1. 2.Direct staff to draft an updated smoking ordinance based on information provided at the work session and direction from Council. 3.Convene a citizen committee to develop a comprehensive update to the current smoking ordinance, which will present a formal recommendation to City Council to reject, amend, or accept as drafted. RECOMMENDATION 1.Option 3, Convene a citizen committee to develop a comprehensive update to the current smoking ordinance, which will present a formal recommendation at a future date to City Council to reject, amend, or accept as drafted, with an objective to adopt amendments for implementation effective no later than January 1, 2013. EXHIBITS 1.City of Denton Ordinance 86-069, amended by Ordinance 93-193 2.City of Denton Ordinance 2003-091 and 2010-287 (PARD Smoking Regulations) 3.Municipal Smoking Ordinance Matrix (in order of restrictiveness) 4.Municipal Smoking Ordinance Matrix (in alphabetical order) 5.The Impact of the Smoking Ordinance on Restaurant Sales in Houston, Texas Austin, 2006. 6. 7.Impact of a Smoking Ban on Restaurant and Bar Revenues El Paso, Texas, Morbidity and Mortality Weekly Report, Centers for Disease Control, 27 February 2004: 150-152. 8.LambertaRegulation, Cato Institute (Winter 2006-2007): 34-40. Respectfully submitted: ______________________________ George C. Campbell City Manager Prepared by: _______________________ Lindsey Baker Assistant to the City Manager Exhibit2 Exhibit5 September 2006 The Impact of the Smoking Ordinance on Restaurant Sales in Houston, Texas As prepared by MGT of America, Inc. th 502 East 11 Street, Suite 300 Austin, Texas 78701 (512)476-4697 (T) (512)476-4699 (F) www.mgtofamerica.com (W) This report was revised on September 27, 2006 due to the release of first quarter 2006 sales tax data by the Texas Comptroller of Public Accounts on September 26, 2006. This data was incorporated into the analysis of Houston’s smoking ordinance. As such, the results and conclusions of the report have been adjusted accordingly. TABLEOFCONTENTS TABLEOFCONTENTS Executive Summary........................................................... Background.............................................................. Methods................................................................ Results and Conclusions.............................................................3 Background..............................................................4 Project Overview.......................................................... Rising Popularity of Smoking Control Ordinances..................................5 Economic Studies........................................................... Methods................................................................ Results and Conclusions............................................................. Performance of DallasÓ and HoustonÓs Restaurant Sectors....................16 Economic Impact of the Dallas Smoking Ordinance..............................17 Economic Impact of the Houston Smoking Ordinance..........................18 Conclusions............................................................. Endnotes................................................................ Appendix A: Historic Performance.................................................... Appendix B: Analysis of Sales....................................................... EXECUTIVESUMMARY EXECUTIVESUMMARY Background In March of 2005, the City of Houston passed an ordinance prohibiting smoking in restaurants and limiting smoking in a number of other public spaces, including restaurant bars. As part of this ordinance, the city council passed an amendment requiring an independent third-party evaluation of the ordinanceÓs economic impact 18 months after its passage. The City of Houston contracted with MGT of America to prepare this evaluation. They also asked MGT to evaluate the economic impact of a similar ordinance passed in Dallas in o effects of smoking ordinances. Over the past 20 years, numerous states and localities have passed smoking control laws to limit smoking in work and public spaces. Across the U.S., more than 44 percent of the population is covered by 100% smoke-free provisions in workplaces, restaurants, bars or some combination thereof. While most of these bans have been passed by municipalities, 17 states also have passed laws that limit smoking to some degree. In Texas, which has no statewide smoking control law, more than 220 municipalities have passed ordinances limiting smoking in some way. All of the stateÓs 20 largest cities have passed some type of smoking restriction for at least one setting The cities with the most comprehensive bans are El Paso, Austin, Amarillo, Pasadena, and Mesquite have the least coverage and/or the least restrictive smoking ordinances. HoustonÓs smoking ordinance is considered to be of the least restrictive because of the exception areas in which smoking is permitted. Dallas, on the other hand, is considered to be more restrictive because it has designated municipal worksites, restaurants and bars in restaurants as smoke-free. The Dallas and Houston ordinances are similar in that smoking generally is prohibited in restaurants and allowed in bars. The two ordinances differ, however, in the restrictions placed on restaurant bars as well as in the number and type of exceptions Page 1 Executive Summary Past studies of the economic impact of smoking have varied based on the sponsoring partiesÓ support for or opposition to smoking control laws. Studies sponsored by public health agencies and professionals tend to find that smoking ordinances have no economic impact on restaurants, while those sponsored by the restaurant or tobacco industries tend to find negative effects. These studies use differing methodologies. Studies sponsored by public health authorities generally focus on the restaurant industry as a whole, while the restaurant and tobacco industries prefer studies focusing on individual restaurants or restaurant types. While the results of these competing studies seem contradictory, they may not be. Individua affected in different ways Î some positively and some negatively Î while aggregated revenues remain unchanged. Methods To better understand the restaurant sectors in Dallas and Houston, MGT first analyzed the performance of the two citiesÓ restaurant industries over the ten years prior to implementation of the ordinances. Next, to examine the economic impact of the ordinances in Housto the aggregate level and by restaurant type, MGT analyzed municip PlacesÑ and ÐEating and Drinking Places,Ñ and municipal mixed beverage sales data for ÐFull- Service RestaurantsÑ and ÐDrinking Places.Ñ Standard Industrial Classification (SIC) codes define Eating Pla restaurants that do not sell alcohol and Eating and Drinking Pla and wine (SIC 5816) or restaurants that sell alcoholic beverages (SIC 5817). The North American Industry Classification System (NAICS) defines Full-Service Rest establishments primarily engaged in providing food services to patrons who order and are served while seated, and Drinking Places (NAICS 722410) as establishments primarily engaged in preparing and serving alcoholic beverages for immediate consumpt To analyze restaurant taxable sales and mixed beverage sales in MGT employed multivariate regression analysis to estimate the im For HoustonÓs restaurant sales, MGT also used an adaptive forecasting technique to impute what restaurant sales would have been from 2005 onward had they followed past patterns. Actual sales Page 2 Executive Summary figures were plotted against the forecast to estimate whether sales were higher or lower than they would have been otherwise. Results and Conclusions The Houston and Dallas smoking ordinances do not carry adverse o restaurant sector in aggregate. The smoking ordinance in Dallas is associated with somewhat less favorable sales for Eating and Drinking Establishments than for Eating Establishments, although the results were statistically insignificant. In Houston, the analysis of restaurant sales by type suggests that the smoking ordinance was not associated with negative outcomes in the first two quarters after implementation. The smoking ordinance in Dallas is associated with declines in mixed beverage sales in Full-Service Restaurants, although this trend is not replicated in Houston. The results of the analysis on mixed beverage sales in Houston showed no adverse economic outcomes associated with the smoking ordinance for any of the groups of establishmen Page 3 BACKGROUND BACKGROUND Project Overview On March 9, 2005, the City of Houston passed an amendment to its Code of Ordinances concerning smoking in public places. The ordinance, which went into effect on September 5, 2005, generally prohibits smoking in public places and large multi-tenant buildings, making exceptions for a number of specific areas. These areas include taxicabs, hotel and motel rooms, certain hos rooms, restaurant and lounge bars, tobacco specialty shops, convention center exhibition areas, lobbies and waiting rooms, rooms or halls used for private functions, stadium hospitality suites and separate, enclosed individual workspaces. The ordinance specifies that smoking areas must be separate and enclosed, or located near the exhaust system of an enclosed area so that smoke is not drawn into non-smoking areas. As a result, all Houston restaurants other than restaurant bars and rooms used for private functions are 100% smoke-free. Due to the continuing debate over the economic impact of similar HoustonÓs ordinance included a provision requiring that an independent third party conduct a study of its economic impact on restaurant sales. This study is to be presented to the City Council within 18 months of the passage of the ordinance. To comply with this provision, the City of Houston contracted wi conduct the study. Because the ordinance had been in place for less than a year before the study began, the city asked MGT to estimate the economic impact of the City of DallasÓ three-year-old smoking ordinance, to consider the longer-term effects of such b Dallas implemented its smoking control ordinance on March 1, 2003. Like HoustonÓs, the Dallas ordinance prohibits smoking in restaurants and permits it in designated areas in bars. The Dallas ordinance is more restrictive than HoustonÓs, however, in areas. In particular, smoking is not permitted in Dallas restaur Page 4 Background Rising Popularity of Smoking Control Ordinances In the past 20 years, public sentiment favoring smoke-free work gained considerable momentum. Many cities and even some states across the U.S. have passed ordinances limiting smoking in varying degrees. Since 1985, the limiting smoking has risen from 200 to more than 2,000. More tha population currently resides in areas covered by 100% smoke-free provisions applicable to Exhibit 1 1 workplaces, restaurants and bars in various combinations (). Exhibit 1 In addition to the localities mapped in , 17 states have passed laws limiting smoking to some degree, including California, Colorado, Connecticut, Delaware, Florida, Idaho, Maine, Massachusetts, Montana, New Jersey, New York, North Dakota, Rhode Island, 2 South Dakota, Utah, Vermont and Washington. Exhibit 1 Local Smoking Control Laws as of July 1, 2006* * Laws shown are those that restrict smoking to any extent. NOTE: some laws shown are not yet in effect. Source: ANR Foundation, Local Tobacco Control Ordinance Database. Page 5 Background Many Texas cities have enacted smoking ordinances in the absence of a statewide law. The Texas Smoke-Free Ordinance Database, created by the Universi Network for Evaluation and Training Systems, lists all known Texas municipal ordinances designed to restrict exposure to second-hand smoke. Of the 241 Texas municipalities included in this database, most support smoke-free 3 municipal worksites and more than half have limited smoking in restaurants. Few, however, have limited smoking in bars. Ninety-three percent of the municipalities have laws that limit smoking at municipal worksites and 55 percent limit smoking in restaurants. Only 19 percent have passed Exhibit 2 laws limiting smoking in bars (). Exhibit 2 Summary of Restrictiveness by Setting, Texas Municipal Smoking Control Ordinances No100% All Setting CoverageLimitedMixed Moderate Smoke-free Restricted #%#%#%#%#%#% Municipal Worksites 18 7 98 41 4 2 9 4 112 46 223 93 Private Sector Worksites 141 59 69 29 6 2 10 4 15 6 100 41 Restaurants 108 45 87 36 19 8 8 3 19 8 133 55 BarsÎIn Restaurants 183 76 33 14 10 4 5 2 10 4 58 24 BarsÎNot in Restaurants 195 81 31 13 8 3 2 1 5 2 46 19 Source: Texas Smoke-Free Ordinance Database, University of Houston Health Network for Evaluation and Training Systems. ÐNo CoverageÑ indicates that there are no restrictions on smoki the setting is not specifically addressed in the local ordinance The ÐLimitedÑ category indicates that designated smoking areas a or ÐMixedÑ indicates either that no smoking is allowed that designated smoking areas are allowed if separately ventilated, but that the ordinanceÓs coverage is only partial due to exceptions, ambiguities or legal issues. The ÐModerateÑ category denotes either that no smoking is allowed or that designated smoking areas are allowed if separately ventilated. Ð100% Smoke-freeÑ indicates that no smoking is allowed in a particular setting. The ÐAll Res ÐLimitedÑ, ÐMixedÑ, ÐModerateÑ, and Ð100% Smoke-freeÑ categories All of TexasÓ 20 largest cities have passed some type of smoking one setting. The first of these cities to place restrictions on smoking was Grand Prairie in 1986, which passed an ordinance restricting smoking in restaurants and Page 6 Background The most comprehensive bans are found in El Paso, which passed i Austin, which passed its ordinance in 2005; and Laredo and Beaumont, both of which passed an ordinance in 2006. Amarillo, Pasadena, and Mesquite have the least coverage and/or the least restrictive smoking ordinances. Eleven of the stateÓs 20 largest cities have passed ordinances since 2000; many of these included the most restrictive controls. HoustonÓs smoking ordina restrictive. Exhibit 3 summarizes the restrictiveness of smoking ordinances in TexasÓ 20 largest cities. The ordinances are rated according to restrictiveness, with 5 being the most restrictive (100% Smoke-free) and 1 being the least restrictive (No Coverage). Exhibit 3 Restrictiveness of Smoking Control Ordinances Texas’ 20 Largest Cities Minority Passage Municipality Population County %Date Houston 2 2 2 2 2 1,953,631 69.19 Harris 3/9/2005 Dallas 5 2 5 2 5 1,188,580 65.44 Dallas 1/22/2003 San Antonio 5 5 2 2 2 1,144,646 68.17 Bexar 8/7/2003 Austin 5 5 5 5 5 656,562 47.06 Travis 3/3/2005 El Paso 5 5 5 5 5 563,662 81.65 El Paso 1/2/2002 Fort Worth 5 3 3 2 2 534,694 54.19 Tarrant 5/20/1997 Arlington 3 3 2 3 3 332,969 40.36 Tarrant 10/11/2005 Corpus Christi 2 2 5 1 1 277,454 61.47 Nueces 1/11/2005 Plano 1 1 3 3 3 222,030 27.24 Collin 8/28/1995 Garland 5 1 3 1 1 215,768 46.71 Dallas 2/21/2006 Lubbock 4 4 4 1 1 199,564 38.70 Lubbock 7/12/2001 Irving 2 2 3 1 2 191,615 51.75 Dallas 7/17/1997 Laredo 5 5 5 5 5 176,576 94.96 Webb 4/3/2006 Amarillo 1 1 2 1 2 173,627 31.57 Potter 9/19/1989 Pasadena 5 1 1 1 1 141,674 52.76 Harris 2/19/1996 Brownsville 2 2 2 1 1 139,722 92.25 Cameron 1/31/1989 Grand Prairie 1 2 2 2 1 127,427 52.82 Dallas 2/4/1986 Mesquite 2 1 2 1 1 124,523 34.64 Dallas 1/1/1999 Abilene 2 2 2 1 1 115,930 31.24 Taylor 4/23/1987 Beaumont 5 5 5 5 5 113,866 57.32 Jefferson 4/25/2006 *Note: 100% Smoke-free (5) - No smoking allowed in a particular setting; Moderate (4) - Either no smoking allowed OR designated smoking areas are allowed if separately ventilated; Mixed (3) - Either no smoking is allowed OR designated smoking areas are allowed if separately ventilated, but coverage is partial due to exceptions, ambiguities, or legal issues; Limited (2) - Designated smoking areas allowed or require; No Coverage (1) - No restrictions on smoking. A setting not specifically indicated is scored as ÐNo Coverage.Ñ Source: Texas Smoke-Free Ordinance Database, University of Houston Health Network for Evaluation and Training Systems. Page 7 Background Economic Studies Smoking control ordinances have generated much debate, primarily concerning the economic impact that such restrictions may have on restaurant, bar and hospitality revenues. Numerous studies have attempted to examine the effect of these o these studies focus on a single city, while others seek to draw broader conclusions by examining multiple localities as well as previous studies. Perhaps unsurprisingly, the results of these studies tend to cor sources. Studies funded by the tobacco and restaurant industries tend to find that restaurant jobs and sales decline under smoke-free ordinances, while studies conducted by public health agencies 4 or professionals show that such policies do not have a significa This divergence may be due to the different study methods employed by the two camps. Tobacco and restaurant industry studies tend to focus on the eff 5 individual businesses, relying on survey data. By analyzing such data, these studies can compare the effects on individual restaurants or groups of restaurants and identify whether some are affected more or less than others. In other words, they can identify whether the effects of the uniformdifferential ordinances are across restaurants, affecting all restaurants the same, or , affecting various restaurants differently. Studies performed by public health agencies or professionals, by contrast, tend to focus on aggregate effects, using aggregate sales or employment data. data on all restaurants lumped together to identify the impact on the sector as a whole. As such, these studies cannot determine whether the effects of an ordinance are uniform or differential, but can they determine whether the sector as a whole is affected. Each group criticism of the otherÓs methodology, and no consensus appears to have been reached regarding an appropriate method for capturing both differential effects and aggregate impacts. Exhibit 4 summarizes publicly available studies on Texas cities as well a studies that have been conducted across the U.S. Note that many of the studies associated with the tobacco or restaurant industry are not published or publicly available, and therefore are not included in the exhibit. Three of the four studies focusing on Texas cities found no evid ordinances affect restaurant sales. These studies employed statistical modeling to control for exogenous factors and isolate the impact of the ordinance itself Page 8 Background changes in aggregate sales as well as individual restaurant sales data obtained through a survey. This study found that the smoking control ordinance had negative effects on restaurant sales. The other key studies included in the exhibit all relied on regression analysis and reached the same conclusion, that smoking control ordinances have no economic impact on restaurant sales. The Dunham and Marlow study, however, concluded that bars and taverns are more likely to be adversely affected by smoking laws than restaurants, highlighting the existence of differential effects among various types of establishments. The exhibit demonstrates that differing methodologies produce se results. It should be noted, however, that individual restaurant revenues may be affected in different ways Î some positively and some negatively Î while aggregate revenues remain unchanged. To address this issue, aggregated and disaggregated revenues can be examined to identify whether certain groups of establishments are affected more or less than other groups. Page 9 Background Exhibit 4 Summary of Key Studies Locality(ies) Affiliation / Studied AuthorMethodology Results / Conclusions Sponsor (Report Date) Texas Cities: West Lake Hills, Huang, P Centers for Disease Used linear regression Total sales of the (1995) Tobias, S Control model to estimate the restaurants did not Kohout, S effect of smoking decrease after Harris, M ordinance on aggregate implementation of the Saterwhite, D restaurant sales, ordinance. Simpson, D controlling for seasonal Winn, L and temporal economic Foehner, J trends. Pedro, L Arlington Hayslett, J Texas Department of Used linear regression Total sales showed no Austin Huang, P Health model to estimate the evidence of decreasing Plano effect of smoking with the implementation ordinance on aggregate Wichita Falls of clean indoor air restaurant sales, (2000) ordinances in any of the controlling for seasonal four cities reviewed. and temporal economic trends. El Paso Huang, P Centers for Disease Used linear regression Total sales and mixed (2004) McCusker, M Control model to estimate the beverage sales were not effect of smoking affected by the smoking ordinance on aggregate ban. restaurant sales and mixed-beverage sales tax receipts, controlling for seasonal and temporal economic trends. Dallas Clower, T L Greater Dallas Evaluated alcoholic Alcohol sales in Dallas (2004) Weinstein, B L Restaurant beverage sales data, eating and drinking Association reviewed a survey of the establishments fell Greater Dallas between 2002 and 2003, Restaurant Association while sales in membership and surrounding areas analyzed information increased. Self-reported obtained from press survey data found that reports. restaurant sales declined. Page 10 Background Exhibit 4 (Continued) Summary of Key Studies Locality(ies) Studied Author Journal / Affiliation Methodology Results / Conclusions (Report Date) Other Key Reports: American Journal of 15 Cities in Colorado Glantz, S Used linear regression Smoke-free ordinances Public Health and California Smith, L analysis to estimate the do not affect restaurant (1997) effect of smoking or bar revenue. ordinance on restaurant and bar revenues, controlling for seasonal and temporal economic trends. Included a comparison group of cities that did not have smoking ordinances. Cornell Hotel and New York State: Hyland, A Used regression Smoke-free regulations Restaurant Suffolk Puli, V analysis to estimate the were not associated Administration New York City Cummings, M effect of smoking with adverse economic Quarterly Westchester Sciandra, R ordinance on revenues outcomes in restaurants. Erie and employment, Monroe controlling for seasonal, (2003) secular and economic trends. Included a comparison group of counties that did not have smoking ordinances. Tobacco Control 293 municipalities in Bartosch, W Used regression Highly restrictive Massachusetts Pope, G analysis to estimate the restaurant smoking (2002) effect of smoking policies do not have a ordinance on meal and significant effect on a alcohol sales, communityÓs level of controlling for seasonal, meal receipts. secular and economic trends. Included a comparison group of counties that did not have smoking ordinances. Contemporary Nationwide Dunham, J Used a survey of 1,300 A subset of restaurants Economic Policy (2000) Marlow, M / owners/ managers of and the majority of bars Philip Morris restaurants and bars and taverns are likely to across the U.S. to suffer adverse effects analyze expectations of from smoking laws. effect of smoking More importantly, not restrictions on bars and all establishments are restaurants. effected to the same degree, confirming the existence of differential effects. Page 11 METHODS METHODS MGT developed a method to examine both the aggregate and differential effects of HoustonÓs and DallasÓ smoking ordinance. In this way, the present study attempts to address the concerns of both supporters and opponents. To understand the context in which these ordinances were implemented, MGT examined and compared the historical performance of the restaurant sectors in both Houston and Dallas. MGT then used a statistical analysis to examine the relationship ordinances and restaurant and mixed beverage sales. To yield com a method similar to that employed in other quantitative studies. Our economic outcome indicator is per-outlet sales, both restaurant sales per outlet and mixed beverage sales per outlet. To examine differential effects, sales data were analyzed by type of establishment, as defined by Standard Industrial Classification (SIC) codes or North American Industry Classification System (NAICS) codes. In the analysis, sales tax data for Eating Places (SIC 5812), which are restaurants that do not sell alcohol, were analyzed separately from Eating and Drinking Places, which are restaurants that sell beer and wine (SIC 5816) and restaurants that sell alcoholic beverages (SIC 5817). In the analysis of mixed beverage tax data, we analyzed Full-Ser (NAICS 722110), which are establishments primarily engaged in providing food services to patrons who order and are served while seated, separately from D 722410), which are establishments primarily engaged in preparing and serving alcoholic beverages for immediate consumption. In addition, we identified indicators to control for secular, economic and seasonal trends. Secular trends are general long-term trends not tied to the economy (such as the increasing popularity of eating out), while economic trends are specifically tied to the economy. Seasonal trends are associated with regular cycles that occur over the co this case, a year. (Examples of seasonal trends would include re Page 12 Methods The following data were used to construct the dataset used in this analysis: quarterly taxable sales data for the SIC codes corresponding to as well as Eating and Drinking Places (5816 and 5817) in Houston and Dallas, from 1993 through fourth quarter 2005 (Source: Texas Comptroller of P quarterly gross mixed beverage sales for NAICS codes correspondi Restaurants (722110) and Drinking Places (722410) in Houston and 1994 through first quarter 2006 (Source: Texas Comptroller of Pu the Consumer Price Index for the Houston and Dallas metropolitan statistical areas (MSAs) from 1993 through the first quarter of 2006 (Source: Bure Statistics). the Business Cycle Index (BCI) for the Houston and Dallas MSAs f first quarter 2006 (Source: Federal Reserve Bank, Dallas). The BCI is a coincident index (that is, an index that that varies directly with, and at the same time as, related economic trends) constructed from unemployment data, nonfarm employment and 6 the real gross state product. Because sales tax and mixed beverage data were available only up to the first quarter of 2006, only two quarters of data were available to analyze the im HoustonÓs restaurant sales. To illustrate the impact of HoustonÓs ordinance on restaurants sales, we used the Holt- Winters adaptive forecasting technique, a time-series method used to predict trend behavior. Such forecasts assume that future performance will follow the same pattern as past performance. The Holt-Winters method employed here includes a seasonal component to account for the strong seasonality of restaurant sales. By forecasting a trend from past performance and comparing the H actual results after the implementation of a smoking ordinance, effects of the ordinance on restaurant sales. In addition, we analyzed taxable sales and mixed beverage data for Houston and Dallas using a multivariate (that is, involving multiple variables) reg model was used to estimate the impact of the smoking ordinance: Page 13 Methods Y = + (Tm) + (Q1) + (Q2) + (Q3) + (BCI) + (Ord) + 0123456 where: Y = Local taxable restaurant sales per outlet in constant 2006 dollars, or local gross mixed beverage sales per outlet in constant 2006 dollars. Tm = the time period in which the observation was taken. Q1 = 1 if the observation was in the first quarter and 0 if othe Q2 = 1 if the observation was in the second quarter and 0 if oth Q3 = 1 if the observation was in the third quarter and 0 if othe BCI = Business Cycle Index for the appropriate MSA and time peri Ord = 1 if the smoking ordinance was in effect and 0 if otherwis The model employed per-outlet sales figures as a control for sal annexations as well as restaurant openings and closings. We used real (inflation-adjusted) sales rather than nominal sales to control for inflation; all sales figures were inflated to 2006 constant dollars. A time variable was included as a continuous variable to control trends. In addition, we constructed variables to represent each quarter, to control for seasonal changes. Finally, to control for economic trends, we incorporated the Business Cycle Index for the Houston and Dallas MSAs into the model. The BCI was used because it more accurately reflects the movement of the Texas economy than employment or pr To measure the effect of the smoking ordinance, we constructed a variable that took a value of 1 in quarters in which the ordinance was in place and a value of 0 when the ordinance was not in place. Both Houston and Dallas implemented their ordinances in the third month of a quarter, but these quarters were assumed to be entirely pre-ordinance due to implementation delays. We analyzed restaurant sales data for Dallas for all three applicable SIC codes in aggregate, and then ran separate models for Eating Places (SIC 5 Drinking Places (SIC 5816 and 5817). We did not analyze restaura this manner due to the data limitations discussed above. We then analyzed mixed beverage sales for Houston and for Dallas separately for Full-Service Restauran Places (NAICS 722410). We ran these separate models to enable us to determine whether the Page 14 Methods smoking ordinance had differential effects on Eating Places versus Eating and Drinking Places, and Full-Service Restaurants versus Drinking Places. To account for serial correlation (the correlation of successive values in a time series) present in the models, we calculated Newey-West standard errors, which correct for the downward bias in unadjusted standard errors. The results of MGTÓs analysis are presented in the following chapter. Page 15 RESULTSANDCONCLUSIONS RESULTSANDCONCLUSIONS Performance of Dallas’ and Houston’s Restaurant Sectors The charts of restaurant and mixed beverage sales per outlet show strong seasonality. In both cities, the first and second quarter restaurant sales figures are generally higher than the third and fourth quarters, and the fourth and first quarter mixed beverage sales are generally higher than second and third quarter figures. This seasonality creates the ups and downs apparent in Exhibits 58 through . We controlled for this seasonality with variables representing in which the observations were taken. In terms of restaurant sales per outlet, DallasÓ and HoustonÓs restaurant sector responded differently to the economic recession of the early 2000s. While DallasÓ restaurant sales declined Exhibit 5 significantly, and were still declining when the smoking ordinance was put into place (), Exhibit 6 HoustonÓs restaurant sales per outlet remained quite stable (). Exhibit 5 Exhibit 6 Dallas Restaurant Sales per OutletHouston Restaurant Sales per Outlet By Restaurant Type By Restaurant Type in Constant 2006 Dollars in Constant 2006 Dollars pyyp 200,000 240,000 190,000 220,000 180,000 200,000 170,000 160,000 180,000 150,000 160,000 140,000 140,000 130,000 120,000 120,000 100,000 110,000 80,000 100,000 All RestaurantEating PlacesEating and Drinking Places All RestaurantEating PlacesEating and Drinking Places In terms of mixed beverage sales per outlet, DallasÓ Drinking Pl Exhibit 7Exhibit 8 sensitivity to the recession () than HoustonÓs (). Full-service restaurants, on the other hand, remained relatively stable in both cities. To control for the sensitivity of the restaurant sectors to the economy and business cycles, we included the Business Cycle Index in our models. Additional information on the performance of the restaurant sectors in Houston and Appendix A Dallas may be found in . Page 16 Results and Conclusions Exhibit 7 Exhibit 8 Dallas Mixed Beverage Sales per Outlet Houston Mixed Beverage Sales per Outlet By Outlet TypeBy Outlet Type in Constant 2006 Dollars in Constant 2006 Dollars gp 160,000 170,000 150,000 160,000 140,000 150,000 130,000 140,000 120,000 130,000 110,000 120,000 110,000 100,000 100,000 90,000 90,000 80,000 Full-Service RestaurantsDrinking PlacesFull-Service RestaurantsDrinking Places Economic Impact of the Dallas Smoking Ordinance The City of DallasÓ smoking ordinance went into effect in March Exhibits 57 dotted vertical line on and . To analyze the effect of the ordinance on Dallas restaurants, MGT created separate models to examine the relationship between the ordinance and per-outlet sales both for total restaurant sales and mixed beverage sales. Furthermore, these two categories of sales were analyzed by establishment type. These separate models allowed for the identification of differential effects among the types of establ Exhibit 9 summarizes the results of this analysis. Coefficient estimates are on the top line, with associated p-values beneath. At the 95 percent confidence level, a p-value of less than 0.05 is significant and greater than 0.05 is insignificant. Addi Appendix B . The ordinance was not associated with adverse effects on total p either in aggregate or by type. It was associated with minor increases in per-outlet sales for all restaurants and for Eating Places, and with minor decreases in p Drinking Places. These outcomes, however, were statistically insignificant at the 95 percent confidence level. For mixed beverage sales, the smoking ordinance was associated with a statistically significant decrease in per-outlet sales for Full-Service Restaurants and a statistically insignificant increase in per outlet sales for Drinking Places. Page 17 Results and Conclusions These results indicate that the smoking ordinance did have differential effects. While the Full-Service effects on Eating Places and Eating and Drinking Places were ins Restaurants’ mixed beverage sales were negatively affected by the smoking ban. Exhibit 9 Dallas Restaurant and Mixed Beverage Sales Trend Analysis Constant Time Q1 Q2 Q3 BCI Ord Restaurant Sales All Restaurants 66,822.68 -325.70 3,970.84 5,800.87 4,513.57 21,739.51 0.000 0.000 0.000 0.000 0.000 0.000 0.146 2 Adj. R = 0.838 Eating Places 99,896.96 -508.32 6,514.53 11,229.28 9,983.74 575.60 5,424.73 (SIC 5812) 0.000 0.000 0.000 0.000 0.000 0.000 0.064 2 Adj. R = 0.808 Eating and Drinking Places 246,661.90 -1,284.36 11,143.59 10,064.27 3,524.66 645.60 -2,038.81 (SIC 5816, 5817) 0.000 0.000 0.000 0.000 0.044 0.000 0.215 2 Adj. R = 0.910 Mixed Beverage Sales Full-Service Restaurants 57,647.01 285.71 -1,392.02 -4,319.52-9,061.34 (NAICS 722110) 0.000 0.081 0.267 0.000 0.000 0.534 0.013 2 Adj. R = 0.529 Drinking Places 182,805.00 -1,629.69 -3,092.96 -13,241.06 -17,917.88 1,176.71 5,863.49 (NAICS 722410) 0.000 0.000 0.092 0.000 0.000 0.000 0.080 2 Adj. R = 0.908 Economic Impact of the Houston Smoking Ordinance The City of Houston implemented its smoking control ordinance in September 2005, as Exhibits 68 denoted by the dotted line in and . To illustrate how the restaurant sector has performed since the implementation of the ordinance, we used the seasonal Holt-Winters method to model restaurant sales, projecting them actual to the fourth quarter of 2008. Comparing restaurant sales for fourth quarter 2005 and the first quarter of 2006 to the projections implies that actual sales were higher than they might have Exhibit 10 been otherwise (). We then used multivariate regression analysis to analyze the effect of the smoking Exhibit 11 ordinance on both restaurant sales and mixed beverage sales. summarizes the results of this analysis. Coefficient estimates are displayed on the top beneath. Additional information may be found in Appendix B. Page 18 Results and Conclusions Exhibit 10 Houston Restaurant Sales per Outlet in 2006 Constant Dollars All Restaurants (SIC 5812, 5816, 5817) Holt-Winters Forecast 190,000 3/31/06 Actual 180,000 12/31/05 Actual 170,000 160,000 150,000 140,000 130,000 120,000 110,000 100,000 With respect to restaurant sales, the ordinance was not associated with adverse effects. In the analysis of restaurant sales in aggregate and by type, there is no evidence of the ordinance having a negative impact. In addition, the Houston ordinance does not appear to have significant differential effects on restaurants by type as the Dallas ordina In the analysis of mixed beverage sales, the smoking ordinance had a positive but insignificant effect on both Full-Service Restaurants and Drinking Places. Note that the ordinance coefficient for the Drinking Places model is of a higher magnitude, implying that the presence of the smoking ordinance was associated with a greater increase in per-outlet sales for Drinking Places than for Full-Service Restaurants. Page 19 Results and Conclusions Exhibit 11 Houston Restaurant and Mixed Beverage Sales Trend Analysis Constant Time Q1 Q2 Q3 BCI Ord Restaurant Sales All Restaurants 134,137.30 -926.27 10,436.83 14,267.48 10,020.19,329.55 0.000 0.000 0.000 0.000 0.000 0.000 0.000 2 Adj. R = 0.919 Eating Places 133,940.70 -1,050.79 9,759.65 14,243.74 11,161.76 814.25 17,919.75 (SIC 5812) 0.000 0.003 0.000 0.000 0.000 0.000 0.000 2 Adj. R = 0.840 Eating and Drinking Places 177,384.60 -1,218.06 9,922.66 11,704.81 3,950.92 1,103.61 18,250.95 (SIC 5816, 5817) 0.008 0.240 0.001 0.002 0.213 0.053 0.000 2 Adj. R = 0.724 Mixed Beverage Sales Full-Service Restaurants 90,750.06 -154.49 -2,995.34 -4,141.11,299.72 (NAICS 722110) 0.000 0.157 0.001 0.000 0.000 0.016 0.233 2 Adj. R = 0.718 Drinking Places 108,984.90 -1,299.30 3,725.85 -8,567.19 -9,891.79 1,183.43 3,249.61 (NAICS 722410) 0.000 0.001 0.063 0.000 0.000 0.000 0.282 2 Adj. R = 0.900 Conclusions The analyses of per-outlet restaurant sales in Houston and Dalla ordinances do not carry adverse outcomes for the restaurant sector in aggregate. Although the smoking ordinance in Dallas is associated with less favorable sales for Eating and Drinking Establishments than for Eating Establishments, the effect is statistically insignificant. In Houston, the analysis of restaurant sales by type suggests that the smoking ordinance was not associated with negative outcomes in the first two quarters after implement The analysis of per-outlet mixed beverage sales indicates that, associated with declines in mixed beverage sales in Full-Service Restaurants. This trend, however, does not appear to be replicated in Houston. The results of the analysis on mixed beverage sales in Houston showed no adverse economic outcomes associated with the smoking ordinance for any of the groups of establishments studied. The results of our analysis on restaurant sales in aggregate are quantitative studies performed on other Texas cities. Analyzing sales by restaurant type, however, does indicate that smoking ordinances may not have a uniform effect on all types of restaurants. Page 20 ENDNOTES ENDNOTES 1 ÐOverview List Î How Many Smoke-free Laws?Ñ American NonsmokersÓ Rights Foundation, July 1, 2006. Available online in pdf format at http://www.no-smoke.org/pdf/mediaordlist.pdf. 2 ÐOverview List Î How Many Smoke-free Laws?Ñ 3 Municipalities selected for the study include incorporated municipalities with more than 5,000 residents; all municipalities in the East Texas Pilot Study of 2000 Î 2002, sponsored by the Texas Tobacco Prevention Initiative of the Texas Department of State Health Services; municipalities of fewer than 5,000 residents with identified second-hand smoke ordinances; and a representation of each county with at least one municipality. 4 Bartosch, W., and G.C. Pope, ÐEconomic Effect of Restaurant Smoking Restrictions on Tobacco Control, Restaurant Business in Massachusetts, 1992 to 1998,Ñ 2002, 11:38-42; and Scollo, Michelle, A. Lal, A. Hyland and S. Glantz, ÐReview of the Quality of Studies on the Tobacco Control Economic Effects of Smoke-Free Policies on the Hospitality Indus, 2003, 12:13-20. 5 Dunham, J and M Marlow, ÐSmoking Laws and Their Differential Effects on Restaurants, Bars, Contemporary Economic Policy, and Taverns,Ñ 2000, 18: 326-333; and Clower, T., and B. Weinstein, ÐA Report on the Impacts of the City of Dallas Smoking Ban on Alcoholic Beverage Sales, March 2003 to March 2004.Ñ Prepared for the Greater Dallas Restaurant Association, 2004. 6 Phillips, Keith R. ÐA New Monthly Index of the Texas Business Cycle.Ñ Federal Reserve Bank of Dallas, working Paper 0401, Jan 2004. Page 21 Appendix A: Historic Performance APPENDIXA:HISTORICPERFORMANCE APPENDIXA:HISTORICPERFORMANCE Houston Restaurant Sector Performance Houston Restaurant Sales and Restaurant Outlets All Restaurants (SIC 5812, 5816, 5817) 1,000,000,00010,000 9,000 900,000,000 8,000 7,000 800,000,000 6,000 700,000,0005,000 4,000 600,000,000 3,000 2,000 500,000,000 1,000 400,000,0000 Restaurant SalesRestaurant Outlets Houston Restaurant Sales per Outlet By Type 240,000 220,000 200,000 180,000 160,000 140,000 120,000 100,000 80,000 All RestaurantEating PlacesEating and Drinking Places Page-A-1 Appendix A: Historic Performance Houston Mixed Beverage Sales By Type 160,000 150,000 140,000 130,000 120,000 110,000 100,000 90,000 80,000 Full-Service RestaurantsDrinking Places Dallas Restaurant Sector Performance Dallas Restaurant Sales and Restaurant Outlets All Restaurants (SIC 5812, 5816, 5817) 500,000,00010,000 9,000 450,000,0008,000 7,000 400,000,0006,000 5,000 350,000,0004,000 3,000 300,000,0002,000 1,000 250,000,0000 Restaurant SalesRestaurant Outlets Page A-2 Appendix A: Historic Performance Dallas Restaurant Sales per Outlet By Type 200,000 190,000 180,000 170,000 160,000 150,000 140,000 130,000 120,000 110,000 100,000 All RestaurantEating PlacesEating and Drinking Places Dallas Mixed Beverage Sales per Outlet By Type 170,000 160,000 150,000 140,000 130,000 120,000 110,000 100,000 90,000 Full-Service RestaurantsDrinking Places Page A-3 Appendix B: Analysis of Sales APPENDIXB:ANALYSISOFSALES APPENDIXB:ANALYSISOFSALES Houston Restaurant Sales Houston Holt-Winters Forecast All Restaurants 190,000 3/31/06 Actual 180,000 12/31/05 Actual 170,000 160,000 150,000 140,000 130,000 120,000 110,000 100,000 Houston Holt-Winters Forecast Eating Places (SIC 5812) 170,000 3/31/06 Actual 160,000 150,000 12/31/05 Actual 140,000 130,000 120,000 110,000 100,000 Page B-1 Appendix B: Analysis of Sales Houston Holt-Winters Forecast Eating and Drinking Places (SIC 5816, 5817) 250,000 3/31/06 Actual 240,000 12/31/05 Actual 230,000 220,000 210,000 200,000 190,000 180,000 170,000 160,000 150,000 Houston Mixed Beverage Sales Houston Real Mixed Beverage Sales per Outlet Full-Service Restaurants (NAICS 722110) 105,000 100,000 95,000 90,000 85,000 80,000 Mar-94Aug-95Dec-96May-98Sep-99Feb-01Jun-02Oct-03Mar-05 PredictedActual Page B-2 Appendix B: Analysis of Sales Houston Real Mixed Beverage Sales per Outlet Drinking Places (NAICS 722410) 160,000 150,000 140,000 130,000 120,000 110,000 100,000 90,000 Mar-94Aug-95Dec-96May-98Sep-99Feb-01Jun-02Oct-03Mar-05 PredictedActual Dallas Restaurant Sales Dallas Real Sales per Outlet All Restaurants (SIC 5812, 5816, 5817) 160,000 150,000 140,000 130,000 120,000 110,000 100,000 Mar-93Aug-94Dec-95May-97Sep-98Feb-00Jun-01Oct-02Mar-04Jul-05 PredictedActual Page B-3 Appendix B: Analysis of Sales Dallas Real Sales per Outlet Eating Places (SIC 5812) 155,000 150,000 145,000 140,000 135,000 130,000 125,000 120,000 115,000 110,000 Mar-93Aug-94Dec-95May-97Sep-98Feb-00Jun-01Oct-02Mar-04Jul-05 PredictedActual Dallas Real Sales per Outlet Eating and Drinking Places (SIC 5816, 5817) 185,000 175,000 165,000 155,000 145,000 135,000 125,000 Mar-93Aug-94Dec-95May-97Sep-98Feb-00Jun-01Oct-02Mar-04Jul-05 PredictedActual Page B-4 Appendix B: Analysis of Sales Dallas Mixed Beverage Sales Dallas Real Mixed Beverage Sales per Outlet Full-Service Restaurants (NAICS 722110) 125,000 120,000 115,000 110,000 105,000 100,000 95,000 90,000 Mar-94Aug-95Dec-96May-98Sep-99Feb-01Jun-02Oct-03Mar-05 PredictedActual Dallas Real Mixed Beverage Sales per Outlet Drinking Places (NAICS 722410) 170,000 160,000 150,000 140,000 130,000 120,000 110,000 100,000 90,000 Mar-94Aug-95Dec-96May-98Sep-99Feb-01Jun-02Oct-03Mar-05 PredictedActual Page B-5 Exhibit6 January2009 TheEconomicImpactof theSmokingOrdinanceon RestaurantSalesand MixedBeverageSalesin Houston,Texas Aspreparedby MGTofAmerica,Inc. th 502East11Street,Suite300 Austin,Texas78701 (512)476-4697(T) (512)476-4699(F) www.mgtofamerica.com(W) TABLEOFCONTENTS TABLEOFCONTENTS Background..........................................................................................................................2 Methods................................................................................................................................3 ResultsandConclusions......................................................................................................7 Page1 BACKGROUND BACKGROUND InMarchof2005,theCityofHoustonpassedanordinanceprohibitingsmokingin restaurantsandlimitingsmokinginanumberofotherpublicspaces,includingrestaurantbars.As partofthisordinance,thecitycouncilpassedanamendmentrequiringanindependentthird-party evaluationoftheordinanceseconomicimpact18monthsafteritspassage.TheCityofHouston contractedwithMGTofAmericatopreparetheinitialevaluation.TheyalsoaskedMGTto evaluatetheeconomicimpactofasimilarordinancepassedinDallasinordertodeterminethe longer-termeffectsofsmokingordinances. MGTsstudyanalyzedtheperformanceoftheHoustonandDallasrestaurantindustries overthetenyearspriortoimplementationoftheordinances.Thefirststudyanalyzedmunicipal salestaxdatafor EatingPlaces and EatingandDrinkingPlaces, andmunicipalmixed beveragesalesdatafor Full-ServiceRestaurants and DrinkingPlaces. MGTutilizedthe standardstatisticaltechniqueusedbyothersmokingordinancestudiesreferencedinourfirst study-multivariateregressionanalysis.Thestudyalsousedanadaptiveforecastingtechniqueto overcomelimiteddata.ThestudyfoundthattheHoustonandDallassmokingordinancesdidnot carryadverseoutcomesfortherestaurantsector. OnSeptember2007,anexpandedversionoftheinitialHoustonsmokingordinancewent intoeffect.Thenewordinanceincludedallenclosedpublicspaces.Publicspacesconstitute retailoperationssuchasbars,bingofacilities,conventionfacilities,gamingfacilities,healthcare facilities,hotelsandmotels(exceptforsmokingrooms),poolhalls,restaurants,retailers, shoppingmalls,sportsarenasandtheaters.TheCityofHoustoncontractedMGTtoprovidean updatetothe2005study.Thisstudyexaminesthelonger-termeffectsoftheinitialordinanceas wellasitsexpansionunderthenew2007provisions.Specifically,thisinterimreportexamines theimpactontheeconomicactivityoftheHoustonrestaurantanddrinkingestablishmentsector. Thestudyusesthesamestatisticaltechniquemultivariateregressionanalysisasits predecessor.ItundertakesthisanalysissolelyfortheCityofHouston. BecausesalesdataisnotreleasedbytheStateComptrollersOfficeforseveralquarters, thisisaninterimreportbasedonninemonthsofpost-newordinancedata.Anupdatedversionof thestudyutilizingayearsworthofsalesdatawillbecompletedinApril2009. Page2 METHODS METHODS MGTdevelopedadatasetofthehistoricalperformanceoftherestaurantsanddrinking establishmentsinHouston.MGTthenusedstatisticalanalysistoexaminetherelationship betweentheadoptionofsmokingordinancepoliciesandtaxablerestaurantsalesandmixed beveragesales. MGTsoriginalstudyselectedmultivariatelinearregressionasitsstatisticaltechnique. Thistechniquewastheconsensusmethodusedinsimilarsmokingordinancestudiesreviewedin theoriginalreport.Asaresult,MGTchosetousethesamemethodagaintofacilitate comparisons.Oureconomicoutcome(or dependentvariable )remainsper-outletsales.Thisis thecaseforbothtaxablerestaurantsalesper-outletandmixedbeveragesalesper-outlet. Differentialeffectscouldnotbecalculatedtothesameextentasintheoriginalstudydue toatransitionindatacollectioneffortsbytheTexasComptrollerofPublicAccounts. Specifically,thedifferentialeffectsfocusedonacomparisonbetweentheestablishmentsthat primarilysoldalcoholandthosethatdidnot.MGTsoriginalstudyexamineddifferentialeffects ofsmokingordinancepolicyonsalesbytypeofestablishmentasdefinedbyStandardIndustrial Classification(SIC)codes.TheoriginalanalysisexaminedseveralSICcodes.Theoriginalstudy examinedtaxablesalestaxdataforEatingPlaces(SIC5812),whicharerestaurantsthatdonot sellalcohol.ThestudyalsoseparatelyexamineddatafromEatingandDrinkingPlaces,whichare restaurantsthatsellbeerandwine(SIC5816)andrestaurantsthatsellalcoholicbeverages(SIC 5817).Thestudythenaggregatedthisdata. AstheComptrollertransitionedtousingtheNorthAmericanIndustryClassification System(NAICS)coding,theabilityforconsistentcomparisonsacrosstheSICandNAICS classificationswaslost.Instead,MGTfocusedonaggregatingseveralNAICSgroupstomakean applestoapples comparisonwiththeSICcodesexaminedbythefirststudy(SIC5812,SIC 5816,SIC5817.)MGTsettledonaggregatingthesalesdataandoutletcountsforHoustonsFull ServiceRestaurants(NAICS722110),Limited-ServiceRestaurants(NAICS722211),Cafeterias, GrillBuffets,andBuffets(NAICS722212),andunclassifiedfoodserviceestablishments(NAICS 722000.)ThesecategoriescoverthesamedefinitionsasthedefinitionsforSIC5812,SIC5816, andSIC5817. Intheanalysisofmixedbeveragetaxdata,MGTsoriginalstudyanalyzedFull-Service Restaurants(NAICS722110),whichareestablishmentsprimarilyengagedinprovidingfood servicestopatronswhoorderandareservedwhileseated.Italsoseparatelyanalyzeddatafrom Page3 Methods DrinkingPlaces(NAICS722410),whichareestablishmentsprimarilyengagedinpreparingand servingalcoholicbeveragesforimmediateconsumption.Thestudythenaggregatedthedatafrom thesetwogroups.Inthepresentstudy,wefocusonaggregateddatafromthetwodifferentcode groupswithoutaseparateanalysisbyNAICScode. Ouroriginalregressionmodelfeaturedseveralcontrolvariablesforsecular,economic andseasonaltrends.Seculartrendsaregenerallong-termtrendsnottiedtotheeconomy(suchas theincreasingpopularityofeatingout),whileeconomictrendsarespecificallytiedtothe economy.Seasonaltrendsareassociatedwithregularcyclesthatoccuroverthecourseofa particulartimeperiodinthiscase,ayear.(Examplesofseasonaltrendswouldincluderetail salesdrivenbyChristmas.) Thefollowingdatawereusedtoconstructthedatasetusedinthisanalysis: quarterlytaxablesalesdatafortheSICcodescorrespondingtoEatingPlaces(5812) aswellasEatingandDrinkingPlaces(5816and5817)inHoustonfrom1993 throughfourthquarter2005.Fromthefirstquarterof2006tothesecondquarterof 2008,thestudyusedNAICScodescorrespondingtoFull-ServiceRestaurants (NAICS722110),Limited-ServiceRestaurants(NAICS722211),Cafeterias,Grill Buffets,andBuffets(NAICS722212),andunclassifiedfoodserviceestablishments (NAICS722000.)(Source:TexasComptrollerofPublicAccounts). quarterlygrossmixedbeveragesalesinHoustonandfrom1994throughfirstquarter 2008(Source:TexasComptrollerofPublicAccounts). theConsumerPriceIndexforHoustonfrom1993throughthefourthquarterof2008 (Source:BureauofLaborStatistics). thetotalretailsalesforHoustonfrom1993throughthefourthquarterof2008. ForHoustonrestauranttaxableandmixedbeveragegrosssales,weanalyzed usingamultivariate(thatis,involvingmultiplevariables)regressionanalysis.Thefo modelwasusedtoestimatetheimpactofthesmokingordinance: Page4 Methods Y=+(Tm)+(Q2)+(Q3)+(Q4)+(Retail)+(Ord1)+(Ord2)+ 01234567 where: Y=Localquarterlytaxablerestaurantsalesper-outletinconstant2006dollars,orlocal grossmixedbeveragesalesper-outletinconstant2008dollarsthroughtheuseofthe ConsumerPriceIndex. Tm=thetimeperiodinwhichtheobservationwastaken. Q2=thevalueis1iftheobservationwasinthefirstquarterand0ifotherwise. Q3=thevalueis1iftheobservationwasinthesecondquarterand0ifotherwise. Q4=thevalueis1iftheobservationwasinthethirdquarterand0ifotherwise. Retail=Totalretailsalesper-outletforHoustonfortheappropriatetimeperiod. Ord1=thevalueis1ifthefirstphaseofthesmokingordinancewasineffectand0if otherwise. Ord2=thevalueis1ifthesecondphaseofthesmokingordinancewasineffectand0if otherwise. Themodelemployedper-outletsalesfiguresastheeconomicoutcomethatwas measured.Thiseconomicoutcomeisthedependentvariable.Bysettingper-outletsalesasthe dependentvariable,themodelcontrolsforsalesgrowththroughcityannexationsaswellas restaurantopeningsandclosings.Evenifthevolumeofsalesmighthavegrownoverall,division bythenumberofoutletsallowsustolookattheeconomichealthofaffectedestablishments.We usedreal(inflation-adjusted)salesratherthannominalsalestocontrolforinflation;allsales figureswereinflatedto2008constantdollarsthroughuseoftheConsumerPriceIndex. Atimevariablewasincludedasacontinuousvariabletocontrolforsecular-term, trends.Inaddition,MGTconstructedvariablestorepresenteachquarter,tocontrolforseasonal changes.Finally,tocontrolforeconomictrends,MGTincludedtotalretailsalesper-outletfor Houston.ThepreviousstudyusedtheDallasFederalReserveBoardsBusinessCycleIndexfor theHouston.TheBCIwassubstitutedforacontrolthatwasspecificallyfocusedonmovements intheretailsector.Inthisstudy,weutilizedper-outletssalesfortheentireretailsectorin Houston.TheBCIreflectsthemovementandgrowthoftheTexaseconomy,makingita potentiallyunreliableindicatorofretailstrengthduetoalackofseasonalityandtheinclusionof energysectorasacomponentintheindex. Page5 Methods Tomeasuretheeffectofbothphasesofthesmokingordinance,weconstructedavariable thattookavalueof1inquartersinwhichthespecificphaseoftheordinancewasinplaceanda valueof0whentheordinancewasnotinplace.Thesebinaryvariablesarereferredtoas dummy variables bystatisticians.Thetwophaseswereconsideredtobediscreteeventswithunique effectsrelevanttoeachordinancesimplementation.Thereisnooverlapintheperiodthattheyare ineffect. MGTanalyzedrestaurantsalesdataforHoustoninaggregateacrossthedifferenttypesof establishments.MGTalsoanalyzedmixedbeveragesalesinaggregate.MGTundertookthis separationtodiscerntheimpactondifferenttypesofconsumptioninrestaurantsandmixed beverages. TheresultsofMGTsanalysisarepresentedinthefollowingsection. Page6 RESULTSANDCONCLUSIONS RESULTSANDCONCLUSIONS PerformanceofHouston’sRestaurantandDrinkingEstablishments RestaurantSales Thechartsofrestaurantandmixedbeveragesalesper-outletprovidedbelowshowstrong seasonality.Thesecondandfourthquarterrestaurantsalesper-outletfiguresaregenerallyhigher Exhibit thanthefirstandthirdquarters.Thisseasonalitycreatesthe upsanddowns apparentin 1 .MGTcontrolledforthisseasonalitywithvariablesrepresentingthequartersinwhichthe observationsweretaken. Houstonsrestaurantsectorhasacyclicalnature.Therecoveryfromtheeconomic slowdownintheearly90s,economicgrowthattheendofthatdecade,thedownturnafter9/11 andthemostrecentboomandrecessionbearanimprintonthegraph.Tocontrolforthecyclical natureoftheretailsector,ourmodelincludedentireretailper-outletsalesforHouston. Exhibit1 HoustonRestaurantSalesper-outletinConstant2008Dollars Page7 ResultsandConclusions MixedBeverageSales Mixedbeveragesalesalsoexhibitacyclicaleffect.Firstandfourthquartermixed beveragesalesper-outletaregenerallyhigherthanthesecondandthirdquarters.Thefourth Exhibit2 quartermixedbeveragesalesarethehighest.visualizesthesetrends.Asindicated above,wecontrolledforthisseasonalitywithvariablesrepresentingthequartersinwhichthe observationsweretaken.Themodelincludedtheentireretailsectorsper-outletsalesfor Houstontocontrolforthiseffect. Exhibit2 HoustonMixedBeverageSalesper-outlet inConstant2008Dollars EconomicImpactoftheHoustonSmokingOrdinance MGTexaminedtheeffectsofbothphasesofitssmokingordinanceonrestauranttaxable Exhibit3 salesandgrossmixedbeveragesales.summarizestheresultsofthisanalysis. Coefficientestimatesareonthetopline,withassociatedp-valuesbeneath.Thecoefficient indicateswhethertherelationshipispositiveornegativeandbyhowmuch. dollars.Atthe95percentconfidencelevel,ap-valueoflessthan0.05issignificantandgreater than0.05isinsignificant.Ifavariabledoesnotachieveastatisticallysignificantp-value,the Page8 ResultsandConclusions directionandmagnitudeofitscoefficientisdeemedtobetoounreliabletobeconsideredavalid indicatorofimpact.Instead,itisseenasbeingcausedbychance. Alldollaramountsdiscussedbelowareinconstant2008dollars. Thefirstphaseoftheordinancewasassociatedwithapositiveeconomicimpactontotal quarterlyper-outletrestaurantsalesof$7,572.86.Inouroriginalstudy,MGTusedtheHolt- Wintersforecastingtechniqueduetoapaucityofdata.Ourconclusionwasthatforecastedsales werehigherthanexpected,butthepredictionwasnotstatisticallysignificant.Ouroriginal analysisindicatedthatitwaspossiblefortheimpacttobeneutralornegative.Thecurrentdataset allowsMGTtoconfirmthepositiveimpactofthefirstphaseoftheordinanceatastatistically significantlevel.Thesecondphaseoftheordinancewasfoundtohaveapositiveeconomic impactonrestaurantper-outletsalesof$1,763.40.Obviously,MGTsoriginalstudydidnot evaluatethesecondphaseoftheordinancesinceithadnotbeenadopted.Thecoefficientis statisticallyinsignificant,withaveryhighp-value.Thisindicatesthatthereisnostatistically validevidenceofcausation.Theoverallmodelisastrongpredictorofper-outletperformance withanadjustedr-squaredof0.92.Anr-squaredof1.00indicatesaperfectfit. Formixedbeveragesales,thefirstphaseofthesmokingordinancewasassociatedwitha statisticallyinsignificantdecreaseof$1,904.63inper-outletmixedbeveragesales.Inour originalstudy,thefirstphaseoftheordinancehadastatisticallyinsignificantpositiveimpactof $1,299.72.Thisconfirmsthelackofacleareffect.Thesecondphaseoftheordinancehada statisticallyinsignificantpositiveeffectof$1,673.81.Overall,theentiremodelisnotasastrong afitastherestaurantsalesmodel.Ther-squaredformixedbeveragesisonly0.51.Theabsenceof statisticallysignificantcoefficientsindicatesthattheordinancedoesnothaveadiscernibleimpact eitherforthepositiveorforthenegative.Inotherwords,themodelscoefficientsarelikelytobe aresultofrandomchance,notofcausation. Exhibit3 HoustonRestaurantandMixedBeverageSales AnalysisoftheEconomicImpactoftheHoustonSmokingOrdinance ConstantTimeQ2Q3Q4RetailOrdinance1Ordinance2 RestaurantTaxableSalesperOutlet Coefficient$69,629.20$125.72$907.10-$851.68$5,336.39$0.51$7,572.86$1,763.40 p-value0.000.100.590.600.110.000.020.65 Adj.R-squared=0.92 MixedBeverageSalesperOutlet Coefficient$97,480.47$86.00-$5,942.93-$7,612.36$3,438.89$0.07-$1,904.63$1,673.81 p-value0.000.190.000.000.210.370.410.53 Adj.R-squared=0.51 Page9 ResultsandConclusions Tohelpexplainthepiecesofthemodelandhowtheycontributetoquarterlysales,this sectionillustratesoneexampleculledfromrestaurantsales.MGTrandomlychosethethird quarterof2007asthedatapointtouseasanexample. First,themodelbeginswiththe constant. The constant issimplyastartingpointthat isconstantacrossallquarters.Theconstantamountfortherestauranttaxablesalesmodelis $69,629.20.Tothatamountweaddthecontributionfromtheseculartrend time variable. Sincethethirdquarterof2007wouldbethefifty-ninthquarteroftimeelapsedsincethestartof oursample,wemultiplythe$125.72contributionpertimeunitbyfiftynineforatotalof $7,419.25.Thisisaddedtotheconstantforatotalof$77,048.45.Sinceitisthethirdquarter,we subtract$831.68fromthisamountforanewrunningtotalof$76,216.77.Inthethirdquarterof 2007,theretailsalesper-outletfigureinHoustonwas$204,080.42.Ofthatamount,themodel awards51centsonthedollartothetaxablerestaurantsalestotal.Thiscomponentscontribution tobeaddedtoourrunningtotalis$104,081.01foranewrunningtotalof$180,297.78.Finally, weaddthecontributionfromtheordinanceineffectatthetimeforafinaltotalof187,870.64. Thisisthemodelspredictionforthatquarter. Theactualamountforthequarterwas$178,351.79oramissbythemodelof$9,518.85. Exhibit4 Themissconstitutes5%oftheactualamount.belowtracesthemodelspredictedsales foreachquarterandtheactualsales.Asthegraphillustrates,themodelhasastrongfitas indicatedbythehighr-squaredmentionedabove. Page10 ResultsandConclusions Exhibit4 HoustonRestaurantPer-outletSales AnalysisofActualvs.PredictedSales . Conclusions MGTsanalysesofper-outletsalesinHoustonindicatesthatthefirstandsecondphases ofthesmokingordinancesdidnotappeartocarryadverseoutcomesfortherestaurantand drinkingestablishmentsectorinaggregate.Thefirstphaseactuallycontributedapositiveamount toper-outletsalesatastatisticallysignificantlevel.Asformixedbeveragesales,theresultofour newstudymatchesourpreviousfindings:thelackofastatisticallysignif result,atthispointneitherphaseoftheordinanceindicatesstatistical onper-outletmixedbeveragesales. Page11 Exhibit7 Weekly February 27, 2004 / 53(07);150-152 Impact of a Smoking Ban on Restaurant and Bar Revenues --- El Paso, Texas, 2002 Smoke-free indoor air ordinances protect employees and customers from secondhand smoke exposure, which is associated with increased risks for heart disease and lung cancer in adults and respiratory disease in children (1,2). As of January 2004, five states (California, Connecticut, Delaware, Maine, and New York) and 72 municipalities in the United States had passed laws that prohibit smoking in almost all workplaces, restaurants, and bars (3). On January 2, 2002, El Paso, Texas (2000 population: 563,662), implemented an ordinance banning smoking in all public places and workplaces, including restaurants and bars. The El Paso smoking ban is the strongest smoke-free indoor air ordinance in Texas and includes stipulations for enforcement of the ban by firefighting and law enforcement agencies, with fines of up to $500 for ordinance violations (4). To assess whether the El Paso smoking ban affected restaurant and bar revenues, the Texas Department of Health (TDH) and CDC analyzed sales tax and mixed-beverage tax data during the 12 years preceding and 1 year after the smoking ban was implemented. This report summarizes the results of that analysis, which determined that no statistically significant changes in restaurant and bar revenues occurred after the smoking ban took effect. These findings are consistent with those from studies of smoking bans in other U.S. cities (5--8). Local public health officials can use these data to support implementation of smoke-free environments as recommended by the Task Force on Community Preventive Services (9). To study the impact of the El Paso smoking ban on all sectors of the local restaurant and bar industry, TDH and CDC obtained quarterly sales tax reports and monthly mixed-beverage tax receipts from the Texas Comptroller of Public Accounts. The sales tax reports provided revenue data for restaurants, bars, and retail businesses, grouped by Standardized Industrial Classification (SIC) codes. Categories were created for restaurants (SIC codes 5812, 5816, and 5817) and bars (SIC codes 5813 and 5814) (10). The sales tax reports included revenue generated by sales of meals and sales of beer and wine for establishments with beer and wine retailer permits; sales tax revenue data were used for 1990--2002. Other restaurant and bar revenue data came from reports filed by holders of mixed-beverage permits. The state's mixed-beverage gross receipts tax, enacted in 1994, is levied on revenue generated by sales of alcoholic beverages (e.g., liquor, beer, and wine) and nonalcoholic beverages and ice used in mixed drinks. Mixed-beverage revenue data were used for 1995--2002. Multiple linear regression analysis was used to examine the effect of the El Paso smoking ban on changes in revenue over time. The following independent variables were considered: a variable indicating whether the smoking ban was in force, an ordinal variable to represent secular time, and three variables to indicate during which one of four calendar quarters the revenue data were collected. Two regression models were created for each of the following primary dependent variables: 1) revenue subject to sales tax from all restaurants and bars, restaurants only, and bars only; and 2) revenue subject to the mixed-beverage tax. For each category, the first model examined the association between the smoking ban and revenue, and the second examined the association between the smoking ban and the fraction of revenue as a percentage of El Paso's total retail revenues (SIC codes 5211--5999). This fraction accounts for economic variation that might impact revenue in all sectors of the retail economy (6). Two sets of statistics were used to evaluate the quality of the models. The Durbin-Watson statistic was calculated for each model to determine if first-order autocorrelation was present. Variance inflation factors were examined to determine if multicollinearity was present in any of the models. Restaurant, bar, and mixed-beverage revenues varied by quarter; in all categories, revenues usually were higher during the fourth quarter (October--December) of each year (Figure 1). During all four quarters, bar and mixed-beverage revenues accounted for approximately 1% of total retail revenues (Figure 2). None of the regression models for restaurant, bar, or mixed-beverage revenues or for such revenues as percentages of total retail revenue over time showed any statistically significant changes after the smoking ban was implemented (Table). In addition, the results did not change when revenues were adjusted for inflation, and adjusting for changes in price did not change the results (8). In all models, the variance inflation factors had values of <2 for each of the independent variables, indicating that multicollinearity was not present, and the Durbin- Watson statistics indicated that none of the autocorrelations was statistically significant (Table). Reported by: P Huang, MD, Texas Dept of Health. AK De, PhD, Div of Applied Public Health Training, Epidemiology Program Office; ME McCusker, MD, EIS Officer, CDC. Editorial Note: No decline in total restaurant or bar revenues occurred in El Paso, Texas, after the city's smoking ban was implemented on January 2, 2002. These findings are consistent with the results of studies in other municipalities that determined smoke-free indoor air ordinances had no effect on restaurant revenues (2,5--8). Despite claims that these laws especially might reduce alcoholic beverage revenues (2), the mixed-beverage revenue analyses indicate that sales of alcoholic beverages were not affected by the El Paso smoking ban. The findings in this report are subject to at least three limitations. First, because sales tax reports lag revenue collection by 6 months, sales tax data were available for only 1 year after the El Paso smoking ban was implemented. However, analyses from other cities that included data for several years after a smoking ban was enacted indicated no declines in restaurant or bar revenues (6--8). Revenue data from El Paso will be monitored for any changes in restaurant and bar revenues. Second, because limited revenue data for El Paso were available, methods that might provide better estimates of the impact of the ban could not be used. Regression models measuring changes in slope for revenues before and after implementation of smoke-free indoor air ordinances might provide better estimates of how these ordinances affect revenues (8); time-series models also might produce better estimates. When more information becomes available, these models should be applied to the El Paso data. Finally, because the SIC code--based restaurant and bar categories are not mutually exclusive, certain bars were included in the restaurant category created for this analysis. However, mixed- beverage tax data, which provide a more precise measure of alcohol-related revenue, support the finding that bar revenues were not affected by the smoking ban. Opponents of smoke-free indoor air ordinances have claimed that enacting smoke-free indoor air ordinances will harm restaurant and bar revenues (2). However, the findings in this report indicate that, in El Paso, Texas, restaurant and bar revenues were not affected by the smoking ban. Such analyses of economic data can provide local policymakers with statistical evidence to evaluate the merit of implementing smoke-free indoor air ordinances in their communities. Acknowledgments This report is based on contributions by M Boerm, P Gingiss, Univ of Houston; Research Div and Open Government Section, Office Texas Comptroller of Public Accounts. References 1.California Environmental Protection Agency. Health effects of exposure to environmental tobacco smoke. Sacramento, California: California Environmental Protection Agency, Office of Environmental Health Hazard Assessment, 1997. Available at http://www.oehha.org/air/environmental_tobacco/finalets.html. 2.Glantz SA. Smoke-free restaurant ordinances do not affect restaurant business. Period [Editorial]. J Public Health Manag Pract 1999;5:vi--ix. 3.American Nonsmokers' Rights Foundation. Clean indoor air ordinance counts summary. Berkeley, California: American Nonsmokers' Rights Foundation, 2004. Available at http://www.no-smoke.org/mediaordlist.pdf. 4.Gingiss PM, Roberts-Gray C, Boerm MC, et al. Texas smoke-free municipal ordinance database. Houston, Texas: University of Houston, 2002. 5.CDC. Assessment of the impact of a 100% smoke-free ordinance on restaurant sales--- West Lake Hills, Texas, 1992--1994. MMWR 1995; 44:370--2. 6.Glantz SA, Smith LR. The effect of ordinances requiring smoke-free restaurants and bars on revenues: a follow-up. Am J Public Health 1997;87:1687--93. 7.Glantz SA. Effect of smokefree bar law on bar revenues in California. Tob Control 2000;9:111--2. 8.Glantz SA, Charlesworth MA. Tourism and hotel revenues before and after passage of smoke-free restaurant ordinances. JAMA 1999; 281:1911--8. 9.Task Force on Community Preventive Services. Recommendations regarding interventions to reduce tobacco use and exposure to environmental tobacco smoke. Am J Prev Med 2001;20:10--5. 10.Occupational Safety and Health Administration. Standard Industrial Classification (SIC) System Search. Washington, DC: U.S. Department of Labor, Occupational Safety and Health Administration, 2003. Available at http://www.osha.gov/oshstats/sicser.html. Figure 1 Return to top. Figure 2 Return to top. Table Return to top. Use of trade names and commercial sources is for identification only and does not imply endorsement by the U.S. Department of Health and Human Services. 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Contact GPO for current prices. **Questions or messages regarding errors in formatting should be addressed to mmwrq@cdc.gov. Page converted: 2/26/2004 HOME | ABOUT | SEARCH |DOWNLOADS | RSS |CONTACT MMWRMMWR POLICY | DISCLAIMER |ACCESSIBILITY Department of Health Morbidity and Mortality Weekly Report and Human Services Centers for Disease Control and Prevention 1600 Clifton Rd, MailStop E-90, Atlanta, GA 30333, U.S.A This page last reviewed 2/26/2004 Exhibit8 RISK Despite their popularity, government-mandated smoking bans are not justified. The Case Against Smoking Bans TA. L HOMASAMBERT University of Missouri Columbia School of Law I n recent months, dozens of localities and a numberto combat the inefficiencies created by negative externalities. of states have enacted sweeping smoking bans. TheNegative externalities are costs that are not borne by the party bans generally forbid smoking in public places,in charge of the process that creates them. For example, the which are defined to include not only publiclyowner of a smoke-spewing factory does not fully bear the owned facilities but also privately owned propertiescosts associated with the smoke, stench, and health risks his to which members of the public are invited (e.g.,factory produces; many of those costs are foisted onto the fac- bars, restaurants, hotel lobbies, etc.). Proponents oftorys neighbors. When conduct involves negative externalities, the bans insist that they are necessary to reduce risks to pub-participants will tend to engage in that conduct to an exces- lic health and welfare and to protect the rights of nonsmok-sive degree, for they bear the full benefits, but not the full c ing patrons and employees of the regulated establishments. of their activities. Quite often, then, government intervention Specifically, ban advocates have offered three justifications(e.g., taxing the cost-creating behavior or limiting the amount for government-imposed bans: First, they claim that suchpermitted) may be desirable as a means of ensuring that the bans are warranted because indoor smoking involves a neg-cost-creator does not engage to an excessive degree in the con- ative externality, the market failure normally invoked to jus-duct at issue. tify regulation of the ambient environment. In addition, advo-Advocates of smoking bans insist that indoor smoking cates assert that smoking bans shape individual preferencesinvolves negative externalities. First, ban advocates argue that against smoking, thereby reducing the number of smokers innonsmoking patrons and employees of establishments that society. Finally, proponents argue that smoking bans are jus-allow smoking are forced to bear costs over which they have tified, regardless of whether any market failure is present,no control. In addition, smokers impose negative externalities simply because of the health risks associated with inhalationin the form of increased healthcare costs, a portion of which of environmental tobacco smoke (), commonly referred tois paid from the public fisc. Thus, taxpayers are required to ets as secondhand smoke. foot the bill for some of the costs associated with smoking in This article contends that government-imposed smokinggeneral. Examined closely, each of these externality-based bans cannot be justified as responses to market failure, asarguments for smoking bans fails. means of shaping preferences, or on risk-reduction grounds. Smoking bans reduce public welfare by preventing an optimalOutdoor air pollution involves PATRONS AND EMPLOYEES allocation of nonsmoking and smoking-permitted publicthe sort of negative externality likely to result in both an ino places. A laissez-faire approach better accommodates hetero-timal (i.e., excessive) amount of the polluting activity and a v geneous preferences regarding public smoking. lation of pollution victims rights. When it comes to indoor air pollution, by contrast, there is no such externality. That i THE EXTERNALITYARGUMENT because the individual charged with determining how much, The conventional justification for regulation of the ambientif any, smoking is permitted in an indoor space ultimately environment (i.e., outdoor air and water) is that it is necessarbears the full costs of his or her decision and is thus likely t select the optimal level of air cleanliness. Moreover, non- Thomas A.Lambert is associate professor at the University of Missouri Columbia smokers rights are not violated, because they are compen- School of Law.He may be contacted by e-mail at lambertt@missouri.edu. 34 REGULATION WINTER 2006 2007 Tragedy of the Commons), the air inside a building is, in essence, owned by the building owner. That means that the building owner, who is in a position to control the amount of smoking (if any) that is permitted in the build- ing, has an incentive to per- mit the right amount of smoking that is, the amount that maximizes the welfare of individuals within the building. Depending on the highest and best use of the space and the types of people who patronize the building, the optimal level of smoking may be zero (as in an art museum), or as much as patrons desire (as in a tobacco lounge), or some- thing in-between (as in most restaurants, which have smoking and nonsmoking sections). Because patrons select establishments based on the benefits and costs of patronage, they will avoid establishments with air poli- cies they do not like or will, at a minimum, reduce the amount they are willing to pay for goods and services at such places. Owners of public places thus bear the full costs and benefits of their deci- sions regarding air quality and can be expected to select the optimal level of air clean- liness. Moreover, customers who do not like the air policy a space-owner has selected will patronize the space only if they are being otherwise sated for the inconveniences and risks they suffer. compensated by some positive attribute of the space at issue One might wonder how this could be. Because smokers in say, cheap drinks or a particularly attractive clientele. They a public space impose costs on nonsmoking patrons, who can-are, in other words, compensated for any rights violation. not order the smokers to stop, will indoor smoking not entailThe de facto property rights that exist in indoor air, then, pre both the inefficiency (an excessive level of pollution) and thevent the inefficiencies and injustices that accompany out- injustice (an infringement of non-polluters rights to enjoydoor air pollution. clean air) associated with outdoor air pollution? In a word, no.But what about workers at businesses that permit smok- There is a crucial difference between outdoor and indoor air,ing? Is there not an externality in that they are forced to bear and that difference alleviates the inefficiencies and rights-costs (and assume risks) over which they have no control? violations normally associated with air pollution.Again, the answer is no. Workers exercise control by demand- The crucial difference is property rights. Whereas outdooring higher pay to compensate them for the risks and unpleas- air is common property (and thus subject to the famousantries they experience because of the smoke in their work- 35 REGULATION WINTER 2006 2007 RISK places. Adam Smith theorized about such risk premiumsous liberty interests would be at stake if a government were to when he wrote in The Wealth of Nations: make its citizens be healthy so as not to impose health care costs on others. Finally, the assumption that public smoking bans reduce The whole of the advantages and disadvantages of the dif- the incidence of smoking seems suspect. As discussed below, ferent employments of labor and stock must, in the same widespread smoking bans may actually increase the incidence neighborhood, be either perfectly equal or tending to equal- of smoking among young people. Externalities in the form of ity. [T]he wages of labor vary with the ease or hardship, increased public health care costs, then, likely cannot justify the honorableness or dishonorableness of employment. widespread bans on smoking in public spaces. He was right. A vast body of empirical evidence, including THE PREFERENCE-SHAPING ARGUMENT most notably that produced by economist W. Kip Viscusi, demonstrates that employers do in fact pay a premium forThe argument above concludes that smoking bans are unnec- exposing their workers to risks and unpleasantries. Suchessary because market processes will ensure either that risk/unpleasantry premiums motivate employers to select thepatrons and employees preferences regarding smoking are optimal amount of smoke in their restaurants. They also alle-honored or that those individuals are compensated for not viate any injustices occasioned by what might otherwise appearreceiving their preferences. That argument assumes, though, to be a violation of employees rights. Thus, smoking in pub-that individuals preferences are unaffected by the legal rule lic establishments does not, in any meaningful sense, imposeitself. A number of scholars have disputed the notion of genuine negative externalities in the form of risks and unpleas-exogenous preferences. Instead, they claim that individuals antries to the patrons and employees of such establishments.preferences regarding activities like smoking are influenced by Any externalities produced are merely pecuniary externalitiesthe background legal rules themselves. Some theorists have that is, externalities that are mitigated by the price mecha-therefore sought to justify smoking bans on grounds that they nism and thus do not create inefficiencies and injustices.make smokers less likely to want to smoke and/or make non- smokers more likely to appreciate smoke-free environments Ban advocates also seek to justify prohibitionsand thus more willing to pay a premium for such environ- PUBLIC COSTS by pointing to externalities in the form of public healthcarements. In the end, neither preference-shaping argument can expenditures. The argument here proceeds as follows: justify widespread bans on public smoking. Smokers face disproportionately high health careIn recent years, legal scholars have pro- SHAPING ATTITUDES costs.duced a voluminous literature on the role of law in indirect- A portion of such costs is borne not by smokersly controlling conduct by shaping social norms and individ- themselves but by the public at large. ual preferences. Smoking bans provide one of the favorite Smokers thereby externalize some of the costs ofsuccess stories of those who laud the use of legal rules to their behavior and thus will tend to engage in toochange norms and preferences. According to these scholars, much smoking.smoking bans affect behavior, even if under-enforced, because Therefore, smoking bans are justified as an effort tothey change the social norm regarding smoking in public. cut back on the level of smoking that would otherwiseWith the advent of smoking bans, nonsmokers who previously exist.felt embarrassed about publicly expressing their distaste for are speaking up. By providing a de facto community ets This argument suffers from several weaknesses. First andstatement that public smoking is unacceptable, the bans most importantly, the initial premise is unsound. According toembolden nonsmokers to confront smokers who are incon- a comprehensive study in the New England Journal of Medicine inveniencing them. Facing heightened public hostility toward 1997, smoking probably has the effect of reducing overall healththeir habits, smokers are likely to revise their preferences care costs because smokers die earlier than nonsmokers. Theregarding smoking. Thus, by making smoking more socially studys authors concluded that in a population in which no onecostly, the theory goes, bans reduce the number of smokers. smoked, health care costs would be 7 percent higher among menOf course, this is a good thing only if actual social utility and 4 percent higher among women than the costs in the cur-is increased by reducing the incidence of smoking. Ban advo- rent mixed population of smokers and nonsmokers. Thecates assume that reducing smoking is welfare-enhancing for authors further determined that if all smokers were to quit,the obvious reason that smoking carries serious health risks. health care costs would be lower at first, but after 15 years thBut ban advocates generally are not in a position to judge the would become higher than at present.cost side of reducing smoking because they do not know the Even if smoking were shown to increase public health caredegree of utility smokers experience by smoking. Smokers expenditures, the argument here would seem to prove toothemselves, who these days are aware of the risks of smoking, much. If increased healthcare costs could justify governmentappear to believe that the benefits they experience from the imposition of a smoking ban in privately owned places, couldactivity outweigh the costs. It is thus not at all clear that el they not similarly justify governmental regulation of menusinating smoking will enhance social welfare. at fast food restaurants or mandatory exercise regimens? Seri-But even if it were clear that society would be better off with 36 REGULATION WINTER 2006 2007 less smoking, attempting to use smoking bans to influenceporting to demonstrate an endowment effect, whereby an social norms may not represent wise policy. Sweeping smokingindividuals valuation of an asset is determined, in part, by bans may actually increase the incidence of smoking. A large perwhether or not she owns that asset. The general finding is that centage of smokers acquire the habit at a young age, and theypeople attach a greater value to things they own than they frequently do so because smoking is cool. Smoking is cool, ofwould attach to those things if they did not own them and had course, because it is rebellious. The harder anti-smoking forcesto purchase them. In other words, ownership enhances sub- work to coerce people into quitting smoking, and the more theyjective value. engage the government and other establishment institutions inWith regard to smoking bans, ban advocates may argue that their efforts, the more rebellious and thus the cooler legal prohibitions effectively endow nonsmokers with the smoking becomes. Even advocates of the use of smoking regu-right to smoke-free air, causing them to value it more than they lation to alter social norms acknowledge that overly intrusivewould if they had to buy it. If that is indeed the case, then regulations may result in this sort of norm backlash. As anthe laissez-faire approach to indoor smoking appears trou- empirical matter, then, it is not clear whether sweeping smok-bling, for it is not, as its advocates maintain, merely a neutra ing bans highly intrusive regulatory interventions actual-policy that facilitates satisfaction of existing preferences. ly reduce the incidence of smoking in the long run.Rather than providing a level playing field on which private- ly adopted nonsmoking and smoking-permitted policies can The preference-shaping argumentcompete, it biases the outcome of competition in favor of WILLINGNESS TO PAY analyzed above focuses on the potential for smoking bans tosmoking-permitted policies. Because a truly neutral market shape the preferences of smokers (and potential smokers) bysolution is really impossible, ban advocates may call for the manipulating social norms. Insights from cognitive psychol-government to weigh in on the side of public health and force There is no need for government to force establishments to go nonsmoking; the market will provide an optimal number of nonsmoking choices. ogy suggest that smoking bans might similarly influence thethe no-smoking policies that will be under-produced by the preferences of nonsmokers, making them more willing to payinherently biased free market. a premium for smoke-free environments and thereby encour-There are several problems with this analysis. First, there is aging more business owners to adopt no-smoking policies.a great deal of debate over the extent to which the endowment Advocates of a laissez-faire approach to the issue of indooreffect really exists and the extent to which it applies to owner smoking maintain that an unregulated market will produceship of intangible rights (e.g., the right to smoke-free air) as an optimal number of smoking and smoke-free establish-as to ownership of tangible property. In addition, given the num ments as business owners respond to the demands of patronsber of public establishments that have already gone smoke-free, and employees. If patrons and employees are willing to paythereby endowing their patrons with the right to smoke-free more for a smoke-free environment (via, respectively, higherair, the argument is a little out of date. Nonsmokers have now prices for the businesss goods and services, or lower wages)been exposed to enough facilities in which they have been than smokers are willing to pay for the right to smoke, thenendowed with the right to smoke-free air that they likely have business owners will be motivated to ban smoking. Otherwise,adjusted upward their subjective valuation of that commodity they will not. Thus, there is no need for the government to(assuming endowment would, in fact, occasion an upward force establishments to go nonsmoking; the market will pro-adjustment). Finally, the endowment effect argument would vide an optimal number of nonsmoking facilities.support, at most, temporary smoking bans i.e., bans that per- This argument assumes, though, that nonsmokers will-sisted long enough to move the amount nonsmokers would be ingness to pay for smoke-free environments is unaffected bywilling to pay to avoid smoke from a willingness to pay meas- the smoking laws themselves. If the laissez-faire approachure to a willingness to accept measure. If the justification f depresses the amount nonsmokers are willing to pay for athe bans is a need to enhance nonsmokers valuation of smoke- smoke-free environment, then intervention in the market infree spaces so as to encourage market creation of such spaces, the form of smoking bans may be justified. then the bans need not be permanent. So why might the background rules on when and where THE RISKARGUMENT smoking is permitted affect nonsmokers willingness to pay for smoke-free environments? In recent decades, cognitiveThe first two arguments for smoking bans focus, to some psychologists have conducted a number of experiments pur-degree, on citizens preferences: the externality argument focus 37 REGULATION WINTER 2006 2007 RISK es on a purported market failure that allegedly prevents the satagencies (and/or the media reports discussing those con- isfaction of preferences regarding smoking, and the preference-clusions), one might conclude that the risks associated with shaping argument focuses on the laws inevitable role in shap-inhalation do justify significant liberty restrictions. ets ing those preferences. By contrast, the third common argumentFirst consider the Environmental Protection Agencys 1992 for smoking bans ignores citizens smoking preferences alto-report, Respiratory Health Effects of Passive Smoking: Lung Can- gether. That argument asserts that smoking should be banned cer and Other Disorders.That study, which concluded that ets in public places, regardless of individuals smoking preferencesis a Class A (known human) carcinogen, purported to show because the health risks it presents are simply too great. Inthat inhalation of causes 3,000 lung cancer deaths per ets other words, smoking bans are justified on risk-based groundsyear. Not surprisingly, the study fueled efforts to impose even if there is no need to remedy a market failure or to correcsmoking bans. a preference-shaping bias in the law. As it turns out, the study hardly amounted to sound sci- Policymakers frequently invoke excessive risk as a sufficientence. A congressional inquiry into the methods the used epa ground for regulating an activity, even when that activity doesin the study found that the process at every turn [was] char- not involve a market failure or reflect preferences that haveacterized by both scientific and procedural irregularities, been skewed by the background legal rules. Consider, forincluding conflicts of interest by both Agency staff involved example, mandatory seatbelt laws. There is not much of anin the preparation of the risk assessment and members of the externality involved in the failure to wear a seatbelt because tScience Advisory Board panel selected to provide a supposedly costs of the conduct are borne by the person deciding toindependent evaluation of the document. The congression- engage in it. While mandatory seatbelt laws may have theal inquiry further concluded that the Agency ha[d] deliber- effect of altering preferences, there is no reason to think thatately abused and manipulated the scientific data in order to the background legal rule had previously biased preferencesreach a predetermined, politically motivated result. against wearing seatbelts, and risk-avoidance is the sole rea-The findings of the s 1992 study have also been under- epa son for altering citizen preferences in the first place. Thus, tmined by court opinion. Charged with evaluating the agencys predominant justification for mandatory seatbelt laws, whichrisk assessment in determining that constitutes a Class A ets have been enacted in every state except Live Free or Die Newcarcinogen, a federal district judge in the case Flue-Cured Tobac- Hampshire, is risk-reduction not externalities or a need to co Coop. Stabilization Corp. v. U.S. EPA criticized the agencys shape preferences for some end other than risk-reduction.analysis in terms that can best be described as scathing. The Similarly, ban advocates argue, public smoking bans may becourt concluded: justified solely on grounds of risk-avoidance. But a purely risk-based argument likely cannot justify a [The EPA] publicly committed to a conclusion before sweeping smoking ban. While risk, standing alone, is some- research had begun; . . . adjusted established procedure and times deemed sufficient to justify government prohibition of scientific norms to validate the Agencys public conclusion[;] private conduct, such prohibition seems appropriate only . . . disregarded information and made findings on selective when the harm avoided is relatively great and the regula- information; did not disseminate significant epidemiologic tions intrusion on personal liberty is relatively small. Again, information; deviated from its Risk Assessment Guidelines; consider mandatory seatbelt laws. The risk associated with failed to disclose important findings and reasoning; and left not wearing a seatbelt is huge, and the regulations intrusion significant questions without answers. on personal liberty is minor no more than a slight incon- venience. Hence, the laws may be justifiable on risk-reductionThus, the s purported finding that poses a serious epaets grounds. Consider, by comparison, whether the governmentcancer risk a finding that has been extremely influential could invoke risk as a legitimate basis for banning drivingin motivating state and local smoking bans throughout the after 1:00 a.m. Such behavior certainly presents a heightenedUnited States, should be discounted. risk (late-night drivers are far more likely to fall asleep at tApparently undeterred by these congressional and judi- wheel), but the magnitude of risk presented does not justifycial reprimands, the U.S. surgeon general recently released a the degree of liberty intrusion occasioned by the regulation.report entitled The Health Consequences of Involuntary Exposure Smoking bans look more like late-night driving bans than to Tobacco Smoke, which purports to settle once and for all the mandatory seatbelt laws and thus likely cannot be justifieddebate over the risks of inhalation. In releasing the report, ets solely with reference to risk. Surgeon General Richard Carmona confidently proclaimed: To see why this is so, we must first isolate the relevant risk. Because public smoking bans do not prohibit smoking alto- The scientific evidence is now indisputable: secondhand gether and may not even reduce its incidence, the risk the bans smoke is not a mere annoyance. It is a serious health hazard aim to avert is not the risk to smokers themselves. It is instea that can lead to disease and premature death in children the risk to nonsmokers i.e., the risks associated with inhala- and nonsmoking adults. tion of . The key question, then, is whether these risks are ets of sufficient magnitude to justify a significant intrusion on thIn presenting the report, the surgeon generals office personal liberty of private business owners and their customers.emphasized to the news media that even brief exposure to ets If one were to rely on the stated conclusions of federalposes immediate and significant health risks. The press release 38 REGULATION WINTER 2006 2007 accompanying the report stated that there is no risk-freebegin with. A 20 percent increase in a tiny risk is, well, reall level of exposure to secondhand smoke and that even brieftiny certainly too tiny to justify the substantial liberty exposure to secondhand smoke has immediate adverse effectsinfringement involved in smoking bans. Indeed, risk alone has on the cardiovascular system and increases risk for heart dis-not justified a ban on smoking itself, an activity that increas- ease and lung cancer. In his remarks to the media, the sur-es the risk of heart disease by 100 to 300 percent and that of geon general stated, Breathing secondhand smoke for evenlung cancer by 900 percent. How, then, could a much small- a short time can damage cells and set the cancer process iner risk justify highly intrusive regulation of the voluntary motion. In a fact sheet accompanying the report, the sur-actions of individuals gathered on private property? geon general explained, Breathing secondhand smoke forThis analysis even assumes that the conclusions of the sur- even a short time can have immediate adverse effects on thegeon generals report are accurate. In fact, they probably are cardiovascular system. These and similar statements, faith-not. The report is a meta-analysis, meaning that the authors fully repeated by the news media, create the impression thatdid not collect their own epidemiological data but instead science has determined that simply being in a smoke-filledcombined the results of previously published studies. ets room exposes one to significant health risks. Meta-analyses are useful analyses, but they are no more com- Examined closely, the surgeon generals report establishedpelling than the underlying studies upon which they are based. The question is whether the risks of secondhand smoke justify a significant intrusion on the personal liberty of business owners and their customers. no such proposition. The underlying studies upon which theIn this case, the meta-analysis rests on findings from a num- surgeon generals report was based considered the effects ofber of discredited studies, including the 1992 study. More- epa chronic exposure to on individuals, such as long-timeover, the analysis treats all studies equally, regardless of the ets spouses of smokers. The studies simply did not consider thescope and rigor. A number of the underlying studies pur- health effects of sporadic exposure to and thus cannotporting to document correlations between chronic expo- etsets provide empirical support for the surgeon generals state-sure and cancer or heart disease were quite small, and most ments about short-term exposure. employed case study methodologies in which individuals ets Moreover, those statements are theoretically unsound, forwith diseases were polled regarding spousal smoking habits they conflict with the basic toxicological principle that theor the presence of at their workplaces. A superior study ets dose makes the poison. According to a study published in thewould involve a large number of subjects some routinely New England Journal of Medicine in 1975, when many moreexposed to , some not and would follow them over time. ets individuals smoked and there were much higher concen-This sort of cohort study is more difficult to perform than ets trations in public places, exposure to an hours worth of pre-after-the-fact case studies, but it is also more accurate. vailing levels of was equivalent to smoking 0.004 ciga-In fact, an extremely large cohort study has recently been con- ets rettes. Put differently, one would have to breathe smoke-filledducted. In 2003, James Enstrom of UCLA and Geoffrey Kabat air for 4,000 hours in order to inhale as much tobacco smokeof the State University of New York, Stony Brook, published a as a smoker inhales in a single cigarette. Given those concen-study of the health histories of more than 35,000 never-smok- tration levels, it seems implausible that short-term exposureing Californians who were married to smokers. Using infor- to poses serious health risks. Possessing neither empiri-mation gathered by the American Cancer Society, the ets cal foundation nor theoretical plausibility, the Surgeon Gen-researchers collected data on the never-smokers for 39 years erals public statements about the health risks of brief expo-(from 1959 to 1998). Their investigation revealed no heightened sure to were misleading. lung cancer risk among study subjects. In fact, the authors ets But what about the actual findings of the surgeon gener-found no causal relationship between exposure to [] and ets als report, as opposed to the hyperbolic (and widely report-tobacco-related mortality, though they acknowledged that a ed) accompanying statements? Those findings even takensmall effect cannot be ruled out. Enstrom and Kabats massive at face value do not provide a risk-based rationale for high-study, which has been vociferously criticized by anti-smoking ly intrusive smoking bans. The report concludes that chron-forces, was not even included in the surgeon generals meta- ic exposure increases the risks of lung cancer and heartanalysis, which covered only studies published through 2002. ets disease by 20 to 30 percent. While those numbers sound fair-The bottom line is that the research on reveals, at ets ly large, one must remember that the underlying risks of lungmost, that even chronic exposure creates only a negligi- ets cancer and heart disease in nonsmokers are quite small toble absolute risk of cancer and heart disease. Advocates of 39 REGULATION WINTER 2006 2007 RISK smoking bans must therefore base their risk arguments onany allocation of the right to the indoor air at issue. Adoption non-disease risks. of a smoking-permitted policy harms nonsmokers, but adop- Some have acknowledged that the purported link betweention of a no-smoking policy harms smokers. and cancer or heart disease is dubious but have nonethe-In light of this unavoidable, reciprocal harm, social welfare ets less maintained that other health risks justify sweeping bans.would be maximized if smoking policies were set to favor the For example, Dr. Elizabeth Whelan of the pro-ban Americangroup whose total happiness would be most enhanced by Council on Science and Health chastised her fellow ban advo-implementation of its favored policy. So, if smoking cus- cates for threaten[ing] their cause with hyperbole about thetomers value the right to smoke in a particular place more likely effects of i.e., claims that causes cancer andthan nonsmoking customers value the right to be free from etsets heart disease. Maintaining that the advocates should havesuch smoke, that place should allow smoking. Conversely, if simply stated that caused irritation of the eyes, nosenonsmoking patrons value an establishments clean air more ets and respiratory tract and aggravated preexisting asthma, shethan smoking patrons value the right to light up, the estab- insisted, that surely that is enough of a reason to justify thelishment should ban smoking. protection of all workers via a sweeping smoking ban. It should thus be clear why a laissez-faire approach of per- Surely it is not. As noted above, paternalistic regulationsmitting establishment owners to set their own smoking poli- aimed solely at reducing risks, not at correcting a legitimatecies will create more welfare than a ban on smoking in public market failure, are justifiable only when the risk is relativelyplaces. Under the laissez-faire approach, a business owner, serious and the liberty intrusion occasioned by the regulationseeking to maximize his or her profits, will set the establish- is relatively minor. Here, the potential harms at issue (a greatments smoking policy to accommodate the patrons who most number of watery eyes and runny noses, and aggravation ofvalue their preferred policy (and thus are most willing to pay complications among asthmatics who voluntarily patronizea premium to be in the proprietors space). This will result in establishments where smoking is permitted) do not seema variety of smoking policies at different establishments, as great enough to justify a governmental command that privatebusiness owners respond to the preferences of their customers. business owners force their invitees to refrain from an activi-Under a smoking ban, by contrast, business owners are ty that affects only other invitees. Hence, widespread smok-not permitted to cater to smoking patrons demands even ing bans are not justifiable solely on risk-based grounds. when those patrons value the right to smoke more than non- smoking patrons (and employees) value the right to be free THE SUPERIORITYOFLAISSEZ-FAIRE from smoke. A smoking ban, then, is less likely to maximize Controversies over smoking in public places are ultimatelysocial welfare than a laissez-faire approach, which ensures controversies over property rights. Does a smoker have thethat the right to any particular public places air is allocated right to fill the air with his or her smoke, or do nonsmokersto the group that values it most. have the right to smoke-free air? In other words, who owns CONCLUSION the air? A smoking ban effectively gives nonsmoking patrons the right to the air. By contrast, the laissez-faire approach efGovernment-imposed smoking bans are unwise. Considered tively permits the owner of the establishment to determine theclosely, the arguments used to justify them falter. The exter- proper allocation of air rights within his or her space. Thenality argument fails because indoor smoking creates, at worst, owner may choose to give the rights to smoking patrons (bya pecuniary externality that will be mitigated by the price permitting smoking), nonsmokers (by banning smoking), ormechanism. Preference-shaping arguments are weak because to try to accommodate both by designating some parts of theheavy-handed government restrictions create a substantial establishment nonsmoking but permitting smoking else-risk of norm backlash. Risk-based arguments are insufficient where within the space. because the slight risks associated with cannot justify the ets However owners allocate the right to air among smokerssubstantial privacy intrusion occasioned by sweeping smok- and nonsmokers, there will be some winners whose preferreding bans. In the end, a laissez-faire policy that would permit policy is adopted and whose happiness is therefore increased,private business owners to tailor their own smoking policies and some losers whose preferred policy is rejected and whoseaccording to the demands of their patrons is most likely to happiness is therefore diminished. There is thus, as Ronaldmaximize social welfare by providing an optimal allocation of Coase explained, an unavoidable reciprocal harm inherent inboth smoking and smoke-free establishments. R Readings The Anti-Tobacco Campaign of the Nazis:Environmental Tobacco Smoke andThe Health Care Costs of Smoking, by A Little Known Aspect of Public Health inTobacco-Related Mortality in a ProspectiveJan J. Barendregt et al. New England Journal of Germany, 1933 45, by Robert N. Proctor.Study of Californians, 1960-98, by James E.Medicine, Vol. 337 (1997). British Medical Journal,Vol. 313 (1996).Enstrom and Geoffrey C. Kabat. British Willingness to Pay vs. Willingness to Journal of Medicine,Vol. 326 (2003). Concentrations of Nicotine and TobaccoAccept: Legal and Economic Implications, Smoke in Public Places, by W. C. Hinds andGentle Nudges vs. Hard Shoves: Solving theby Elizabeth Hoffman and Matthew L. M. W. First. New England Journal of Medicine,Sticky Norms Problem, by Dan M. Kahan.Spitzer. Washington University Law Quarterly, Vol. 292 (1975).University of Chicago Law Review,Vol. 67 (2000).Vol. 71 (1993). 40 REGULATION WINTER 2006 2007 AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: Utility Administration ACM: Howard Martin, 349-8232 ______________________________________________________________________________ SUBJECT Receive a report, hold a discussion, and provide staff direction concerning the current drought conditions and recommended revisions to Denton's Water Conservation and Drought Contingency Plan (last updated in 2009). BACKGROUND The previous fiscal year (October 1, 2010 to September 30, 2011) has exceeded all previous years in Texas as the hottest and driest 12 month period for the state as a whole. Although the Dallas – Fort Worth area received a near normal amount of rainfall during the first half of this time period, high summer water demands took their toll on area reservoirs (Exhibit 1). In addition, some water utilities (North Texas Municipal Water District, the City of Irving and the Upper Trinity Regional Water District) that were dependent upon Lake Chapman in East Texas for some or all of their water supply found this lake in a severe state of depletion by the end of summer. Recent long range weather forecasts are also not encouraging and many water utilities are taking steps to accelerate their drought management plan actions to help reduce water demands and extend supplies. The City of Denton adopted its original Water Conservation and Drought Contingency Plan on December 7th, 1999. The plan was developed according to criteria established by the Texas Natural Resources Conservation Commission (now called Texas Commission on Environmental Quality (TCEQ)) and established drought management measures that were designed to match Dallas Water Utilities Drought Management Plan. This alignment with the Dallas Water Utilities plan was important for several reasons, including the following: 1.Denton’s two water supply reservoirs (Lake Lewisville and Lake Ray Roberts) are also major water supply sources for Dallas Water Utilities. 2.Dallas Water Utilities has four other water supply sources (Lakes Grapevine, Ray Hubbard, Tawakoni, and Fork) currently connected to their water supply system with plans to connect a seventh water supply source (Lake Palestine) in the near future. 3.Dallas Water Utilities serves approximately 2.4 million people with approximately 40% of them living in 22 cities that are a part of their wholesale treated water supply customer base. 4.Dallas Water Utilities uses approximately 20 times the amount of water used by the City of Denton. 5.Denton’s water conservation efforts would have minimal impact to preserving water supplies within Lake Lewisville and Lake Ray Roberts if similar efforts were not being made by Dallas Water Utilities and their wholesale customer base. This customer base also includes the Upper Trinity Regional Water District and the City of Lewisville that both pull water from Lake Lewisville into their water treatment plants using untreated water supply contracts with Dallas Water Utilities. 6.Although Denton’s current water use can be met by their existing water rights from Lake Lewisville and Lake Ray Roberts, our long range water supply plan under the Region C and State of Texas Water Plan depends upon additional water supply purchases from Dallas Water Utilities in the near future. 7.Denton currently has a 30 year untreated water supply contract with Dallas Water Utilities that will expire in 2015. The terms of this contract requires that the City of Denton implement “like measures” to conserve water during a drought period. The Plan was updated in 2005 in response to the passage of HB 2660, requiring quantified 5-year and 10-year water savings targets in the Conservation Plan. The 2005 Conservation Plan update set a goal of one percent annual reductions in per-capita usage. Denton’s existing Conservation Plan already outlined several conservation practices, including a residential conservation rate structure, waterline replacement program, public awareness and xeriscape programs, an annual internal water audit, and reuse programs meant to meet this goal. After the 2005 Conservation Plan update, staff proposed a water waste ordinance, as an additional conservation measure. The Lawn and Landscape Irrigation and Water Waste Ordinance were subsequently implemented in an accelerated fashion during the drought of 2006. In 2008, DWU also implemented seasonal commercial irrigation pricing as a way to curb summer peak usage, which can be partially attributed to commercial irrigation practices. Since the 2005 Drought Contingency and Water Conservation Plan update was largely focused on expanding on the Water Conservation Plan, there were only minor revisions made to the city’s Drought Management Plan. Dallas Water Utilities was also updating their plans to comply with HB 2660 but staff was only able to see the draft version of their plan shortly before we had to make our recommendations to the PUB and City Council to comply with the deadlines outlined HB 2660. Staff did identify one change to the 2005 Dallas Water Utilities Drought Management Plan (a shift in Stage 2 and Stage 3 from once every 5 day watering schedules to twice a week water schedules). The primary driver behind this change was even though the 5 day watering schedule made sense from a reduced watering frequency perspective, it was more difficult to communicate to customers and more difficult for automatic sprinkler system controllers to be programmed that way compared to a twice a week watering schedule. Based upon input from the PUB, this change was made to the Denton 2005 Drought Management Plan. However, Dallas Water Utilities also made two additional changes to their plan that were not noticed by staff and included in the 2005 Denton plan update. In the previous plans, under Stage 2, twice a week watering was mandatory for city operations but was voluntary for all retail water customers. Under Stage 3 restrictions, twice a week watering was required for both city and all other retail water customers. Under the 2005 Dallas Water Utilities Drought Plan, twice a week all retail water customers watering restrictions were mandatory for . In addition, under the only using hand 2005 Dallas plan, Stage 3 restrictions still allowed twice a week watering but held hoses. Watering with automatic irrigation systems and hose end sprinklers was prohibited. Staff saw the twice a week watering restrictions for Stages 2 and 3 in the Dallas Plan (same as their previous plan) but failed to recognize these two significant changes discussed above, due in large part to a lack of coordination or communication from Dallas Water Utilities to their wholesale customer cities of these significant changes. Following the 2006 drought in Texas, legislative changes in 2007 required the following: Legislative changes to Water Conservation and Drought Contingency Plans New Submittal Dates for 5 year plan updates. Effective January 1, 2008 Title 30 Chapter 288 of the Texas Administrative Code (TAC) entitled Water Conservation Plans, Drought Contingency Plans, Guidelines and Requirements requires the holder of an appropriation of surface water in the amount of 1,000 acre feet a year or more for industrial, municipal, and other non-irrigation uses develop, submit a water conservation plan meeting the requirements of Subchapter A of Chapter 288 to the executive director of the Texas Commission on Environmental Quality and to the Texas Water Development Board no later than May 1, 2009 to coincide with the regional planning group process. In addition, retail public water suppliers providing water service to 3,300 or more connections must also submit a drought contingency plan to the executive director of TCEQ by the same date. Yearly Water Conservation Implementation Report Also effective January 1, 2008 Title 30 Chapter 288 of the Texas Administrative Code requires the holder of an appropriation of surface water in the amount of 1,000 acre feet a year or more to submit a yearly implementation report listing conservation methods used and dates implemented, data about whether conservation targets are being met and explanations of failure to meet targets, and the actual amount of water saved. The first implementation report is due with the May 1, 2009 update to our Conservation Plan. These legislative changes were again focused on requiring water utilities to “ramp up” their water conservation efforts and staff revised the Water Conservation portion of our plan to comply with these new legislative requirements. Unfortunately, there was no real focus on the Drought Management side of the plan and staff was not aware of changes made in the 2005 Dallas Water Utilities Drought Management Plan. Staff obtained approval from the PUB and City Council in the spring of 2009 and submitted the revised adopted plans to the TCEQ. To complicate things further, Dallas Water Utilities elected to delay their update to their plan until 2010 (the original schedule for the 5 year update prior to the new legislation) and petitioned the TCEQ to approve this request since they had planned on having a consultant assist them with this overhaul of their Water Conservation and Drought Contingency Plans. This time, Dallas Water Utilities invited their wholesale water customers to a briefing on their proposed changes to their 2010 update to their Water Conservation and Drought Contingency Plans prior to their formal adoption, but it was one year after all of their customers had turned in their updated plans to the TCEQ. It was at this time staff became aware of the 2005 Drought Contingency Plan changes Dallas had made as well as proposed changes they were including in their 2010 plan update. Under the 2010 Dallas Water Utilities Drought Contingency Plan, Stage 1 watering voluntarymandatory restrictions went from twice a week as a measure to a restriction for all twiceonce retail water customers. Stage 2 went from a mandatory a week to a a week watering twice schedule. Stage 3 went from a a week watering schedule using hand held hoses only to once a week using hand held hoses only. All of the Dallas and Denton plans from 1999 to the present have all been consistent in prohibiting outside water use. When staff became aware of this significant disconnect between the 2009 Denton and the 2010 Dallas Drought Management Plans, we elected to monitor if drought plan activation was a likely occurrence prior to the next 5 year plan update required in 2014. Until the past six months, this was not projected to occur in the foreseeable future but multiple events have dramatically changed this situation including: 1.The record dry and hot summer weather of 2011. 2.The water supply and management problems related to the North Texas Municipal Water District (NTMWD). 3.Although the NTMWD situation closely mirrors their circumstances near the end of 2006 (another record dry year), it has been further complicated due to the zebra mussel infestation on Lake Texoma that has restricted their access to this water supply that represents 28% of their total water supply system. 4.Lake Chapman in East Texas has been over drafted by NTMWD as a result of these circumstances but has also been over drafted by the City of Irving and the Upper Trinity Regional Water District (UTRWD) for other reasons. 5.The depletion of Lake Chapman due to limited inflows and over drafting has resulted in increased water supply demand pressures on the Dallas Water Utilities western reservoir system (Lakes Lewisville, Ray Roberts and Grapevine) from the City of Irving and the UTRWD that have supply contracts with Dallas Water Utilities. 6.Dallas Water Utilities is also receiving pressures from NTMWD to supply temporary emergency water supplies to alleviate their near desperate water supply situation. These pressures are both local political pressures as well as potential pressures from the TCEQ to reallocate water’s of the state under an emergency condition. 7.The spring and summer floods of 2007 that ended the NTMWD water supply problem from the 2006 Drought are extremely unlikely to occur based upon current long range weather forecasts currently available. As a result of these factors, Dallas Water Utilities has announced they will implement Stage 1 of their Drought Management Plan December 12, 2010 (Exhibit 3), approximately 4-6 months ahead of their earlier forecast that was based upon their existing drought plan trigger conditions. It has also been discussed that if Dallas does enter into a temporary emergency water supply contract to assist NTMWD, they would likely activate Stage 2 of their plan as early as February and Stage 3 prior to summer. Due to these recent and dramatic changes, staff is recommending that we make adjustments to the current 2009 Drought Management Plan to realign our water restrictions in various stages of the plan to more closely match the 2010 Dallas Drought Management Plan. Since these changes are significant, staff is looking for guidance and direction from the PUB on this proposal. In addition, staff will provide a more detailed briefing on the emerging drought situation in North Texas as well as a comparison of the major water supplier’s drought plan measures. EXHIBITS 1.Presentation on Drought Conditions and Drought Management Plan Comparisons. 2.2009 Drought Contingency Plan redlined to match 2010 Dallas Water Utilities Plan. 3.Dallas Water Utilities Stage 1 Drought Plan Activation Notice November 11, 2011. 4.Dallas Water Utilities Letter to Denton City Manager Requesting Implementation of Stage 1, December 5, 2011. Respectfully submitted: Tim Fisher Assistant Director, Water Utilities WaterConservationandDroughtContingencyPlanCityofDenton CITYOFDENTON WaterConservationandDroughtContingencyPlan April2009 6.6DroughtandEmergencyResponseStages 6.6.1Stage1,Mild 6.6.1.1TriggeringAndTerminationConditionsForStage1,Mild 6.6.1.1.1 TypeA WaterManagementCondition Totalrawwatersupplyin(1)DentonandDallasconnectedlakes(eastandwest);or(2)westernconnectedlakes; or(3)easternconnectedlakesdropsbelow65%ofthetotalconservationstorageofthelakes 6.6.1.1.2 TypeB WaterManagementCondition Waterdemandreachesorexceeds85%ofdeliverycapacityfor4consecutivedays 6.6.1.1.3 TypeC WaterManagementCondition Waterdemandapproachesareduceddeliverycapacityforallorpartofthesystem,asdeterminedbyDWU RequirementsforTermination: Stage1maybeterminatedwhenStage1conditionsnolongerexistandwouldbeunlikelytorecurupon termination. 6.6.1.2GoalForUseReductionsAndActionsAvailableUnderStage1,Mild ThegoalforwaterusereductionunderStage1,Mild,isa5percentreductionoftheusethatwouldhave occurredintheabsenceofdroughtcontingencymeasures.ThepurposeofactionsunderStage1istoraise publicawarenessofpotentialdroughtproblems.TheDirectorofWaterUtilitiesoradesigneecanorderthe implementationofanyoftheactionslistedbelow,orotheractionsnotlisted,asdeemednecessary: VoluntaryWaterUseRestrictionsforReducingDemand: [JN1] Followingisamenuofpossibleactions.TheDirectorofWaterUtilitieswilldeterminespecificactionstaken duringanydroughtsituation.TheDirectormayalsotakeotheractionsnotlisted,ifdeemednecessary. WaterConservationandDroughtContingencyPlanCityofDenton AllWaterUsers (a)Requirethatalllandscapewateringbelimitedtothedayofweekschedulebetweenthehoursof [JN2] 6:00PMto10:00AM.Irrigationoflandscapedareaswithhoseendsprinklers,automaticirrigation systems,soakerhoses,dripirrigationsystems,handheldhosesandfaucetfilledbucketsshouldbe limitedtoSundaysandThursdaysforcustomerswithastreetaddressendinginanevennumber(0,2,4, 6or8)andforlocationswithoutaddressesandlimitedtoSaturdaysandWednesdaysforwater customerswithastreetaddressendinginanoddnumber(1,3,5,7or9).Apartments,officebuilding complexesorotherpropertycontainingmultipleaddressesmaybeidentifiedbythelowestaddress number. (a)(b)Encouragereductioninfrequencyofwateringnewandfirstyearlandscapingandfoundations. (b)(c)Encourageonlyinitialfillingofornamentalfountains. (c)(d)Encouragereductioninfrequencyofwashingorrinsingofvehiclesandrecommenduseof bucket/container,handheldhosewithpositiveshutoffvalveorcommercialcarwash. (e)Encouragereductioninfrequencyindrainingandrefillingofswimmingpools. (d) (f)Encouragereductioninfrequencyofrecreationalwateruseincludinguseoffaucets,hosesorhydrants. (e)(g)Foundationsmaybewateredonanydayoftheweekbetweenthehoursof10PMand6AM. Foundationsmaybewateredwithasoakerhoseorahandheldhoseequippedwithapositiveshutoff nozzleonly. CityGovernment (a)StaffwillbeginreviewoftheproblemsinitiatingStage1actionsandwillidentifypossiblesolutionsto addressthewatershortage. (b)Initiatepubliceducationcampaignteachingandencouragingreducedwaterusepractices. (c)Intensifynormalleakdetectionandrepairactivitiesonwaterpipesandmains. (d)Encouragereductionofwateruseincityownedornamentalfountains. (e)Encouragereductioninlandscapeusesforparksandgolfcourses. (f)StaffwillbeginreviewoftheproblemsinitiatingStage1actionsandwillidentifypossiblesolutionsto addressthewatershortage. (g)Onlyflushnewlyconstructedmainsandmainsthatareessentialforwaterqualitymaintenance. CommercialCustomers (a)Identifyandencouragevoluntaryreductionmeasuresbyhighvolumewaterusersthroughwateruse audits. WaterConservationandDroughtContingencyPlanCityofDenton (b)Encouragereductioninlandscapeusesforparksandgolfcourses. (c)Encouragereductioninwateruseforlandscapenurserystock. (d)Requirereductionofwaterusethroughdayofweeklandscapewateringscheduleforgolfcourses. [JN3] (e)Encouragearearestaurantstoservecustomerswaterbyrequestonly. (c)(f)Encouragehotel/motelstorequestmultipledaypatronstoreuselinensinsteadofchanging everyday. InterruptibleCustomers (a)Reduceusageforinterruptiblecustomerspercontractterms. WholesaleCustomerCities (a)Encourageimplementationoflikeproceduresbywholesalecustomers. Notifications CityofDenton NotifymajorCitydepartments,bytelephoneandfollowupmemo,ofWaterAwarenessStage#1and requestvoluntarywaterusereduction. Stressvoluntaryeliminationofnonessentialuses. ExternalCustomers Issuepressrelease,radioandvideopublicserviceannouncementtoareamediadescribingWater AwarenessStage#1andthevoluntaryrestrictionsthatapply. DistributewaterconservationmaterialstoDentonIndependentSchoolDistrict,UNT,TWUand communitygroupsifappropriate PostWaterAwarenessnoticesatpublicbuildingsincludingcitybuildings,countybuildingsandthe federalpostoffice. Encouragereductionofwaterusethroughthepublicationofthevoluntarylandscapewateringschedule andrequestwateringonlyduringoffpeakhours. WholesaleCustomers Advisewholesalecustomersbytelephoneandfollowupmemo,ofWaterAwarenessStage#1and requestvoluntarywaterusereductionconsistentwithactionstakenbytheCityofDenton. WaterConservationandDroughtContingencyPlanCityofDenton Penalties [JN4] Nopenaltiesenforcedatthistime. 6.6.2Stage2,Moderate 6.6.2.1TriggeringConditionsForStage2,Moderate 6.6.2.1.1 TypeA WaterManagementCondition Totalrawwatersupplyin(1)DentonandDallasconnectedlakes(eastandwest);or(2)westernconnectedlakes; or(3)easternconnectedlakesdropsbelow55%ofthetotalconservationstorage 6.6.2.1.2 TypeB WaterManagementCondition Waterdemandreachesorexceeds90%ofdeliverycapacityfor3consecutivedays 6.6.2.1.3 TypeC WaterManagementCondition Waterdemandequalsareduceddeliverycapacityforallorpartofthesystem,asdeterminedbyDWU RequirementsforTermination: Stage2maybeterminatedwhenStage2conditionsnolongerexistandwouldbeunlikelytorecurupon termination. 6.6.2.2GoalForUseReductionAndActionsAvailableUnderStage2,Moderate ThegoalforwaterusereductionunderStage2,Moderate,isa1510percentreductionoftheusethatwould haveoccurredintheabsenceofdroughtcontingencymeasures.TheDirectorofWaterUtilitiesorhis/hera designeecanordertheimplementationofanyoftheactionslistedbelow,orotheractionsnotlisted,asdeemed necessary: WaterUseRestrictionsforDemandReduction: [JN5] Followingisamenuofpossibleactions.TheDirectorofDWUwilldeterminespecificactionstakenduringany droughtsituation.TheDirectormayalsotakeotheractionsnotlisted,ifdeemednecessary. AllWaterUsers (a)RequireRequestthatalllandscapewateringbelimitedtothedayofweekdayofweekschedule [JN6] betweenthehoursof6:00PMto10:00AM.Irrigationoflandscapedareaswithhoseendsprinklersor automaticirrigationsystemsshouldbelimitedtoSundaysandThursdaysforcustomerswithastreet WaterConservationandDroughtContingencyPlanCityofDenton addressendinginanevennumber(0,2,4,6or8)andforlocationswithoutaddresses,andSaturdays andWednesdaysforwatercustomerswithastreetaddressendinginanoddnumber(1,3,5,7or9). Apartments,officebuildingcomplexesorotherpropertycontainingmultipleaddressesmaybe identifiedbythelowestaddressnumber.Irrigationoflandscapedareasispermittedatanytimeifitisby meansofahandheldhose,afaucetfilledbucketordripirrigationsystem. (b)Restrictoperationofornamentalfountainsorpondstoinitialfillingexceptwherenecessarytosupport aquaticlifeorwheresuchfountainsorpondsareequippedwitharecirculationsystem. (a)(c)ProhibitRequestthatrecreationalwateruseincludinguseoffaucets,hosesorhydrants,which usewaterinsuchamannerastoallowrunofforotherwastesbelimitedtothedayof weekdayofweekwateringschedule. (b)(d)Restrictwashingofanymotorvehicle,motorbike,boat,trailer,airplaneorothervehicletothe useofahandheldbucketorahandheldhoseequippedwithapositiveshutoffnozzleforquickrinses. Vehiclewashingmaybedoneatanytimeontheimmediatepremisesofacommercialcarwashor commercialservicestation.Further,suchwashingmaybeexemptedfromtheseregulationsifthe health,safety,andwelfareofthepubliciscontingentuponfrequentvehiclecleansing,suchasgarbage trucksandvehiclesusedtotransportfoodandperishables.Requestthatwashingofanymotorvehicle, bike,trailer,boatorairplanebelimitedtothedayofweekdayofweekwateringschedule. (c)Requestthatirrigationofgolfcoursegreens,tees,andfairwaysbelimitedtothedayofweek [JN7] schedule. (e)Requestthatuseofwatertofill,refill,oraddtoanyindoororoutdoorswimming,wading,orjacuzzi poolsbelimitedtothedayofweekdayofweekschedule. (d)(f)Prohibithosingoffpavedareas,buildings,windowsorothersurfaces. CityGovernment (a)StaffwillbeginreviewoftheproblemsinitiatingStage2actionsandwillidentifypossiblesolutionsto addressthewatershortage. (b)Acceleratepubliceducationcampaignteachingandencouragingreducedwaterusepractices. (c)Restrictflushingofnewmainsnotimmediatelyrequiredtoprovideservice. (d)Continueintensifiedleakdetectionandrepairactivitiesonwaterpipesandmains. (e)Prohibitoperationofornamentalfountainsbycitygovernmentexceptwherenecessarytosupport aquaticlifeorwheresuchfountainsorpondsareequippedwitharecirculationsystem. WaterConservationandDroughtContingencyPlanCityofDenton (f)Citygovernmentrestrictedtodayofweekdayofweekwateringscheduleexceptforparksandgolf courses. (g)EncourageRequiredayofweekdayofweekwateringscheduleforparksandgolfcourses. [JN8] (h)Increaseenforcementefforts. (i)Washingofanycityvehicle,bike,ortrailer,limitedtothedayofweekdayofweekwateringschedule. Prohibitexcessivewaterrunofffromanylandscapedareaontostreets,alleys,orparkinglots.Runoffis excessivewhenitgoesten(10)feetbeyondthepropertyline. (j)Useofwaterfromfirehydrantslimitedtofirefighting,essentialdistributionsystem (k)Restricttheflushingoffirehydrants,blowoffsandserviceconnectionsfornewmainconstructionby specialpermitonly. (l)Prohibithosingoffpavedareas,buildings,windowsorothersurfaces. CommercialCustomers Identifyandencouragevoluntaryreductionmeasuresbyhighvolumewaterusers. (a)Requiredayofweekwateringscheduleforparksandgolfcourses.Encouragefurtherreductionin [JN9] landscapeusesforparksandgolfcourses. (b)Encouragefurtherreductioninlandscapeusesfornurserystock. InterruptibleCustomers (a)Reduceusageforinterruptiblecustomerspercontractterms. WholesaleCustomers (a)Requirewaterdemandreductionsinaccordancewithcontractobligationsforwholesalecustomers. (b)WholesalewatersystemsaskedtoabidebyCityofDentonpolicyforbothinternaloperationsandall retailcustomers.Reductioninrateofflowcontrollersettingsby10%20%areoptional. Notifications CityofDenton Bytelephoneandattachedfollowupmemo,notifyallmajorCitydepartmentwaterusersofWater WatchStage#2andthewateruserestrictionsunderthisstage.Instructthemtoimplement restrictionsonnonessentialuses.UsecitydepartmentcontactsinAppendixF. Coordinatedistributionofwateremergencyplandetails,posters,andhandoutstocustomerservice representatives,utilitydispatchpersonnelandDentonpublicaccessbuildings. WaterConservationandDroughtContingencyPlanCityofDenton RetailCustomers TCEQnotifiedofStage2restrictions. Issuepressrelease,radioandvideopublicserviceannouncementtoareamediadescribingWaterWatch Stage#2andthewateruserestrictionsunderthisstage.Keepmediaupdatedonthewatersituation. UsemediacontactslistedinAppendixF. Bytelephoneandfollowupletter,notifymajorareawaterusersofWaterWatchStage#2andthe restrictionsthatapply.UseplantmanagercontactslistedinAppendixF Acceleratepubliceducationcampaigntopromoteandencourageefficientwateruse. Ifapplicable,notifytheU.S.CorpofEngineersbytelephoneandfollowupletteroftheWaterWatch Stage#2conservationmeasures. WholesaleCustomers AdvisewholesalecustomersbytelephoneandattachedletteroftheactionstakenbytheCityofDentonin responsetoWaterWatchStage#2andrequiretheimplementationoflikeproceduresamongtheircustomers. Wholesalecustomercitiesshalleitherimposewateruserestrictionsequivalenttothoseimposedon5;·x retailcustomersORwhereapplicable,Dentonmayreducerateofflowcontrollersettingsby10%20%.Use wholesalecustomercontactsinAppendixF. Penalties Nopenaltiesenforcedatthistime. 6.6.3Stage3,Severe 6.6.3.1TriggeringConditionsForStage3,Severe 6.6.3.1.1 TypeA WaterManagementCondition Totalrawwatersupplyin(1)DentonandDallasconnectedlakes(eastandwest);or(2)westernconnectedlakes; or(3)easternconnectedlakesdropsbelow45%ofthetotalconservationstorage 6.6.3.1.2 TypeB WaterManagementCondition Waterdemandreachesorexceeds95%ofdeliverycapacityfor23consecutivedays 6.6.3.1.3 TypeC WaterManagementCondition Waterdemandexceedsareduceddeliverycapacityforallorpartofthesystem,asdeterminedbyDWU WaterConservationandDroughtContingencyPlanCityofDenton Amajorwaterlinebreaks,orapumporsystemfailureoccurs,whichcauseunprecedentedlossof capabilitytoprovidetreatedwaterservice Naturalormanmadecontaminationofthewatersupply RequirementsforTermination: Stage3maybeterminatedwhenStage3conditionsnolongerexistandwouldbeunlikelytorecurupon termination. 6.6.3.2GoalForUseReductionAndActionsAvailableUnderStage3,Severe ThegoalforwaterusereductionunderStage3,Severe,isareductionof2015percentoftheusethatwould haveoccurredintheabsenceofdroughtcontingencymeasures.Ifthecircumstanceswarrant,theDirectorof WaterUtilitiesoradesigneecansetagoalforgreaterwaterusereduction.TheDirectorofWaterUtilitiesor his/heradesigneecanordertheimplementationofanyoftheactionslistedbelow,orotheractionsnotlisted, asdeemednecessary.: AllWaterUsers (a)RequirethatalllandscapewateringIrrigationoflandscapedareasshallbelimitedtothedayof [JN10] weekdayofweekwateringschedulebetweenthehoursof6:00PMand10:00AMbymeansof handheldhoses,soakerhosesandhandheldbucketsonly.Theuseofhoseendsprinklersor permanentlyinstalledautomaticsprinklersystemsisprohibitedatalltimes.Irrigationoflandscaped areaswithhoseendsprinklersorautomaticirrigationsystemsshallbelimitedtoSundaysandThursdays forcustomerswithastreetaddressendinginanevennumber(0,2,4,6or8)andforlocationswithout addresses,andSaturdaysandWednesdaysforwatercustomerswithastreetaddressendinginanodd number(1,3,5,7or9),andirrigationoflandscapedareasisfurtherlimitedtothehoursof12:00 midnightuntil10:00a.m.andbetween8:00p.m.and12:00midnightondesignatedwateringdays. Apartments,officebuildingcomplexesorotherpropertycontainingmultipleaddressesmaybe identifiedbythelowestaddressnumber.Irrigationoflandscapedareasispermittedatanytimeifitisby meansofahandheldhose,afaucetfilledbucketordripirrigationsystem. (b)Useofwatertowashanymotorvehicle,motorbike,boat,trailer,airplaneothervehiclenotoccurringon thepremisesofacommercialcarwashandcommercialservicestationsandnotintheimmediate interestofpublichealth,safety,andwelfareisprohibited.Further,suchvehiclewashingatcommercial andcommercialservicestationsshalloccuronlybetweenthehoursof6:00PMto10:00AM. carwashes WaterConservationandDroughtContingencyPlanCityofDenton (c)Thefilling,refilling,oraddingofwatertoswimmingpools,wadingpools,andJacuzzitypepoolsis prohibitedrestrictedtothedayofweekdayofweekwateringschedule.Existingpoolsmayaddwaterto replacelossesduringnormaluseandtoreplaceevaporationinordertomaintainproperwaterquality andproperoperationofthepoolequipment. (d)Foundationsmaybewateredforatwohourperiodonlybetweenthehoursof10PMand6AMduring onthedesignatedwateringdayoffpeakhourswithsoakerorhandheldhoseequippedwithapositive shutoffnozzleonthewateringschedule. (e)Operationofanyornamentalfountainorpondforaestheticorscenicpurposesisprohibitedexcept wherenecessarytosupportaquaticlifeorwheresuchfountainsorpondsareequippedwitha recirculationsystem (f)Noapplicationfornew,additional,expanded,orincreasedinsizewaterServiceconnections,meters, servicelines,pipelineextensions,mains,orwaterservicefacilitiesofanykindshallbeapproved,and timelimitsforapprovalofsuchapplicationsareherebysuspendedforsuchtimeasthisdrought responsestageorahighernumberedstageshallbeineffect. newswimmingpools,hottubs,spas,ornamentalpondsandfountainconstructionis (g)Permittingof prohibited. (h)Prohibitexcessivewaterrunofffromanylandscapedareaontostreets,alleys,orparkinglots [JN11] throughcodeenforcementwarnings.Runoffisexcessivewhenitextendsbeyondten(10)feetofthe propertyline. CityGovernment (a)Wetstreetsweepingandcityvehiclewashingorrinsingisprohibited. (b)Municipallandscapewateringprohibitedexceptgolfcourses(seebelow). [JN12] (c)Wateringofgolfcoursegreensandteeboxesrestrictedtooffpeakhours;wateringofothergolfcourse areasandparksisprohibited. (d)Departmentstaffimplementaselfauditandlimitcomputerizedwaterusageofcityownedgolfcourse greens,tees,fairways,sportsfacilitiesandrecreationareasby20%to30%betweenthehoursof6pmto 10amonthepostedfivedaywateringschedule.Wateringwithahandheldhoseorbucketcanbedone anytime. (e)(c)Discontinueuseofwaterfornewwaterlineconstructionpurposesfromfirehydrants,blowoffs andserviceconnectionsfornewwaterlineconstructionpurposes. WaterConservationandDroughtContingencyPlanCityofDenton CommercialCustomers (a)Restrictwateringofgolfcoursegreensandteeboxesrestrictedtooffpeakhoursthehoursbetween10 PMand6AMandthedayofweekwateringschedule;wateringofothergolfcourseareasandparksis prohibitedunlessthegolfcourseutilizesawatersourceotherthanthatprovidedbytheCityofDenton. (b)Wateringofnurseryplantstockrestrictedtodesignatedoffpeakhoursthehoursbetween10PMand6 AMandthedayofweekdayofweekwateringschedule. InterruptibleCustomers (a)Servicetointerruptiblecustomersistemporarilysuspended. WholesaleCustomers (a)Sameexternalrestrictionsapplytowholesalesuppliers. Notifications CityofDenton Coordinatedisseminationofwaterconservationplandetails,posters,andhandoutstocustomerservice representatives,utilitydispatchpersonnelandpublicaccessbuildings. Bytelephoneandattachedfollowupmemo,notifyallmajorCitydepartmentusersofWaterWarning Stage#3andofthewateruserestrictionsunderthisstage.Instructthemtoeliminatenonessentialuses includingstreetandvehiclewashingandoperationofornamentalfountains,andtoimplementrestrictions onessentialuses.UsesamecontactsasthoselistedinAppendixF. RetailCustomers TCEQnotifiedofStage3restrictions. videopublicserviceannouncementtoareamediadescribingWaterWarning Issuepressrelease,radioand Stage#3andthewateruserestrictionsunderthisstage.Keepmediaupdatedonthewatersituation.Use samemediacontactsasthoseinAppendixF. Bytelephoneandfollowupletter,notifymajorwaterusersofWaterWarning#3andthemandatorywater usereduction.UsecontactslistedinAppendixF. PostWaterWarningnoticesatpublicbuildingsincludingcitybuildings,countybuildings,andthefederal postoffice. Ifapplicable,notifyU.S.CorpsofEngineersbytelephoneandattachedletteroftheWaterWarningStage #3conservationmeasures. WaterConservationandDroughtContingencyPlanCityofDenton WholesaleCustomers AdvisewholesalecustomersbytelephoneandattachedletteroftheactionstakenbytheCityofDenton inresponsetoWaterWarningStage#3andrequiretheimplementationoflikeproceduresamongtheir customers.Wholesalecustomercitiesshalleitherimposewateruserestrictionsequivalenttothose imposedon5;·xretailcustomersORwhereapplicable,mayreducerateofflowcontrollersettings by20%30%.UsewholesalecustomercontactslistedinAppendixF. Penalties Initiatea120%rateincreaseforresidentialcustomersforwaterusagegreaterthan130,000gallons [JN13] peraccountper30days. Imposea20%surchargepenaltyforcommercialandindustrialcustomersformonthlywateruseabove 80%ofpriorbillingvolumesfora30dayperiod. InitiatecodeenforcementfinesforanyviolationoftheDroughtContingencyPlan. 6.6.4Stage4,Emergency 6.6.4.1TriggeringConditionsForStage4,Emergency 6.6.4.1.1 TypeA WaterManagementCondition DentonandDallasconnectedlakesdrops(eastandwest);or(2)westernconnected Totalrawwatersupplyin(1) lakes;or(3)easternconnectedlakesbelow30%ofthetotalconservationstorage 6.6.4.1.2 TypeB WaterManagementCondition Waterdemandreachesorexceeds98%ofdeliverycapacityfor12consecutivedays 6.6.4.1.3 TypeC WaterManagementCondition Waterdemandseriouslyexceedsareduceddeliverycapacityforallorpartofthesystem,asdeterminedby DWU RequirementsforTermination: Stage4maybeterminatedwhenStage4conditionsnolongerexistandwouldbeunlikelytorecurupon termination. WaterConservationandDroughtContingencyPlanCityofDenton 6.6.4.1GoalForUseReductionAndActionsAvailableUnderStage4,Emergency ThegoalforwaterusereductionunderStage4,Extreme,isareductionof25percentoftheusethatwouldhave occurredintheabsenceofdroughtcontingencymeasures.Ifthecircumstanceswarrant,theDirectorof [JN14] WaterUtilitiesoradesigneecansetagoalforgreaterwaterusereduction.TheDirectorofWaterUtilitiesora designeecanordertheimplementationofanyoftheactionslistedbelow,orotheractionsnotlisted,asdeemed necessary: AllUsers (a)Irrigationoflandscapedareasisabsolutelyprohibited. (b)Useofwatertowashanymotorvehicle,motorbike,boat,trailer,airplaneorothervehicleisabsolutely prohibited. (c)ProhibitRestrictuseofwaterfromfirehydrantstofirefighting,essentialdistributionsystem maintenanceandrelatedactivities. (d)Nurseriesshallwaterplantstockonlybetweenthehoursof6PMand10AMandmustalsoadhereto ofweekdayofweekwateringschedule. theday (e)Foundationsmaybewateredforatwohourperiodonlybetweenthehoursof10PMand6AMonthe designatedwateringdayfromStage3withsoakerorhandheldhoseequippedwithapositiveshutoff nozzleonthewateringschedule.Residentsshalllimitfoundationwateringtoatwohourperiodonthe dayofweekdayofweekwateringschedulebetween6PMto10AMwithsoakerorhandheldhose only. (f)Servicetointerruptiblecustomersistemporarilysuspended [JN15] (g)Requesta25%reductionofindoorwateruses. (h)Prohibitpermittingofnewswimmingpools,hottubs,spas,ornamentalponds,andfountain construction. InterruptibleCustomers (a)Servicetointerruptiblecustomersistemporarilysuspended. (h)(i) Notifications CityofDenton Bytelephoneandattachedfollowupmemo,notifyallmajorCitydepartmentwaterusersofWater EmergencyStage#4andofthewateruserestrictionsunderthisstage.Instructthemtoeliminate WaterConservationandDroughtContingencyPlanCityofDenton nonessentialusesandtoimplementrestrictionsonessentialuses.Usedepartmentcontactslistedin AppendixF. Coordinatedisseminationofwaterconservationdetails,posters,andhandoutstocustomerservice representatives,utilitydispatchpersonnelandDentonpublicaccessbuildings. RetailCustomers TCEQnotifiedofStage4restrictions. Issuepressrelease,radioandvideopublicserviceannouncementtoareamediadescribingWater emergencyStage#4andthewateruserestrictionsunderthisstage.Keepmediaupdatedonthewater situation.UsesamemediacontactsasthoseinAppendixF. countybuildings,andthe PostWaterEmergencynoticesatpublicbuildings,includingcitybuildings, federalpostoffice. Bytelephoneandfollowupletter,notifymajorareawaterusersofWaterEmergencyStage#4and mandatorycessationofalloutsidewatering.UseplantmanagercontactslistedinAppendixF. Ifapplicable,notifyU.S.CorpsofEngineersbytelephoneandattachedletteroftheWaterEmergency Stage#4conservationmeasures. WholesaleCustomers AdvisewholesalecustomersbytelephoneandattachedletterofactionsbeingtakenbytheCityin responsetoWaterEmergencyStage#4andmandatoryimplementationofsimilarproceduresamong restrictionsequivalenttothose theircustomers.Wholesalecustomercitiesshallimposewateruse imposedon5;·xretailcustomersor,whereapplicable,reducetheirrateofflowcontrollersettings byapercentagedeterminedbytheDirectorofWaterUtilities.AppendixFlistswholesalecustomersthat needtobecontacted. Penalties Imposea120%rateincreaseforresidentialcustomersforwaterusagegreaterthan1015,000gallonsper accountper30days). Imposea20%surchargepenaltyforcommercialandindustrialcustomersformonthlywateruseabove 70%ofpriorbillingvolumesfora30dayperiod. Lz·z ·;codeenforcementfinesforanyviolationoftheDroughtContingencyPlan. WaterConservationandDroughtContingencyPlanCityofDenton WaterAllocation RetailCustomers: DuringStages2,3and4oftheDroughtContingencyPlan,DWUmayimposearetailwaterrateincreaseto discouragewateruse.Allratesforusageinexcessof10,000gallonspermonth(persinglefamilyresidential account),oranyotherusageamountabove10,000gallonspermonth,asdeemedappropriatebytheDirector, maybeincreasedbyanadditional10percentoranyotherpercentagedeemedappropriatebythe Director.DuringStages3and4oftheDroughtContingencyPlan,theCitymayimposearetailwaterrate [JN16] increasetodiscouragewateruse.Ratesforresidentialcustomerusagemorethan30,000gallonsper30daysper accountinStage3orabove15,000gallonsper30daysperaccountinStage4maybeincreasedbyasmuchas twentypercent(20%).Asimilartwentypercent(20%)rateincreaseforcommercialandindustrialcustomers maybeimposedforuseexceeding80%(Stage3)and70%(Stage4)ofpriorbillingvolumesper30dayperiod. WholesaleCustomers IntheeventthatthetriggeringcriteriaspecifiedinSection6ofthePlanforStage4havebeenmet,theDirector isherebyauthorizedtoinitiateallocationofwatersuppliesonaproratabasisinaccordancewiththelatest revisionofTexasWaterCodeSection11.039.TexasWaterCodeSection1.039,DistributionofWaterDuring Shortage,states: (a)Ifashortageofwaterinawatersupplynotcoveredbyawaterconservationplanpreparedin compliancewithTexasNaturalResourceConservationCommissionorTexasWaterDevelopmentBoard rulesresultsfromdrought,accident,orothercause,thewatertobedistributedshallbedividedamong allcustomersprorata,accordingtotheamounteachmaybeentitledto,sothatpreferenceisgivento nooneandeveryonesuffersalike. (b)Ifashortageofwaterinawatersupplycoveredbyawaterconservationplanpreparedincompliance withTexasNaturalresourceConservationCommissionorTexasWaterDevelopmentBoardrulesresults fromdrought,accident,orothercause,theperson,associationofperson,orcorporationowningor controllingthewatershalldividethewatertobedistributedamongallcustomersprorata,accordingto: watertowhicheachcustomermaybeentitled;or 1.theamountof 2.theamountofwatertowhicheachcustomermaybeentitled,lesstheamountofwaterthe customerwouldhavesavedifthecustomerhadoperateditswatersystemincompliancewith waterconservationplan. WaterConservationandDroughtContingencyPlanCityofDenton (c)NothinginSubsection(a)or(b)precludestheperson,associationofpersonsorcorporationowningor controllingthewaterfromsupplyingwatertoapersonwhohasapriorvestedrighttothewaterunder thelawsofthisstate. accordancewiththetermsandconditionsofits DWUmaycurtailwaterdeliveriesorreducediversionsin wholesalewatersupplycontracts.Ifnecessary,orifspecificcontractprovisionsarenotprovidedfor,DWUmay curtailwaterdeliveriesorreducediversionsinaccordancewithTexasWaterCodeSection11.039.DWUwill haveauthoritytorestrictflowtoitswholesalewatercustomersthroughtherateofflowcontrollers. TheDirectorwillestablishproratawaterallocations,determinedasapercentagereductionofthewholesale -Ò·;©xwaterusage,atthetimeofimplementation.Thetotalvolumereductionforeachwholesale customerwillbecalculatedmonthly,basedonaveragewaterusageforthepreviousthreeyears.TheDirector willestablishthepercentagereductionbasedonanassessmentoftheseverityofthewatershortagecondition andtheneedtocurtailwaterdiversionsand/ordeliveries,andthepercentagereductionmaybeadjusted by,ordeliveriesto,each periodicallybytheDirector.Onceprorataallocationisineffect,waterdiversions wholesalecustomerwillbelimitedtotheallocationestablishedforeachmonth. 6.7ProceduresforEnforcementofMandatoryRestrictions Violations Apersoncommitsanoffenseifheorsheknowinglymakes,causes,orpermitsauseofwatercontrarytothe measuresimplementedintheDroughtContingencyPlan.Itispresumedthatapersonhasknowinglymade, caused,orpermitteduseofwatercontrarytothemeasuresimplementedifthemandatorymeasureshavebeen implementedaccordingtothePlanandanyoneofthefollowingconditionsapply: TheDroughtContingencyPlanprohibitsthemannerofuse. TheamountofwaterusedexceedsthatallowedbytheDroughtContingencyPlan thetermsandconditionsofacomplianceagreementmade Themannerofuseortheamountusedviolates followingavariancegrantedbytheACM/Utilities. Anypersoninapparentcontrolofthepropertywhereaviolationoccursororiginatesshallbepresumedtobe theviolator,andproofthattheviolationoccurredonthe¦;©xpropertyshallconstitutearebuttable WaterConservationandDroughtContingencyPlanCityofDenton presumptionthatthepersoninapparentcontrolofthepropertycommittedtheviolation,butanysuchperson shallhavetherighttoshowthathe/shedidnotcommittheviolation.Parentsshallbepresumedtobe responsiblefortheirminorchildrenandproofthataviolation,committedbyachild,occurredontheproperty withincontroloftheparentsshallconstitutearebuttablepresumptionthattheparentcommittedtheviolation. But,anysuchparentmaybeexcusedifhe/sheprovesthathe/shehadpreviouslydirectedthechildnottouse thewaterasitwasusedinviolationofthisPlanandthattheparentcouldnothavereasonablyknownofthe violation. AnyCodeEnforcementOfficer,PoliceOfficer,orothercityemployeedesignatedbytheAssistantCity Manager/Utilities,mayissueacitationtoapersonhe/shereasonablybelievestobeinviolationofthis induplicateandshallcontainthenameandaddressofthealleged Ordinance.Thecitationshallbeprepared violator,ifknown,theoffensecharged,andshalldirecthim/hertoappearinmunicipalcourtonthedateshown onthecitation. FirstViolation Customersreceiveawrittenwarningthattheyhaveviolatedrestrictions. SubsequentViolations AnypersonwhoviolatesthisPlanisguiltyofamisdemeanorand,uponconviction,shallbepunishedbyafineof notlessthan$250andofnotmorethan$2,000.EachdaythatoneormoreprovisionsinthisPlanisviolated shallconstituteaseparateoffense.Flowrestrictorsmaybeplacedinlinesaftertwoviolationshaveoccurredto limittheamountofwaterpassingthroughthemeterina24hourperiod.TheCityofDentonUtilitiesreserves canberesolved.Services therighttotemporarilycancelwaterservicetothecustomeruntilthesituation discontinuedundersuchcircumstancesshallberestoredonlyuponpaymentofareconnectioncharge,hereby establishedatanamountnottoexceed$135.00(orasadjustedbyCityordinance),andanyothercostsincurred bytheDWUindiscontinuingservice.Inaddition,suitableassurancemustbegiventotheDirectorthatthesame actionwillnotberepeatedwhilethePlanisineffect.CompliancewiththisPlanmayalsobesoughtthrough injunctivereliefinthedistrictcourt. WaterConservationandDroughtContingencyPlanCityofDenton 6.8ProceduresforGrantingVariances GrantingaVariance TheACM/UtilitiesmaygrantvariancesfromtheDroughtContingencyPlaninspecialcasestopersons demonstratingextremehardshipandneed.Inordertoobtainavariance,theapplicantmustsignacompliance agreementonformsprovidedbytheACM/UtilitiesandapprovedbytheCityAttorney.Theapplicantmustagree tousethewateronlyintheamountandmannerpermittedbythevariance.Avariancemustmeetthefollowing conditions: Grantingofavariancemustnotcauseanimmediatesignificantreductioninthe/z·äxwatersupply. Theapplicantmustdemonstratethattheextremehardshiporneedisrelatedtothehealth,safety,or welfareofthepersonrequestingit. Thevariancewillnotadverselyaffectthehealth,safety,orwelfareofotherpersons. NovarianceisretroactivenorcanitjustifyanyviolationofthisDroughtContingencyPlanbeforeits issuance. RevokingaVariance TheACM/UtilitiesmayrevokeavariancegrantedwhentheDirectorofWaterUtilitiesdeterminesanyoneofthe following: Conditionscausinginitialissuanceofthevariancearenolongerapplicable. Violationofthetermsofthecomplianceagreement. Thehealth,safety,orwelfareofotherpersonsrequiresrevocation. WholesaleCustomerVariances TheACM/UtilitiesmaygrantvariancesfromtheDroughtContingencyPlantowholesalewatercustomersin specialcases.Wholesalewatercustomersmayrequestreducedvarianceallocationsforthefollowing conditions: Thedesignatedperioddoesnotaccuratelyreflectawholesalecustomer'snormalwaterusage. Thecustomeragreestotransferpartofitsallocationtoanotherwholesalecustomer. Otherobjectiveevidencedemonstratesthatthedesignatedallocationisinaccurateunderpresent conditions. WaterConservationandDroughtContingencyPlanCityofDenton Inordertograntavariance,theapplicantmustsignacomplianceagreementonformsprovidedbythe ACM/UtilitiesandapprovedbytheCityAttorney.Novarianceshallberetroactiveorotherwisejustifyany violationofthisDroughtContingencyPlanoccurringbeforetheissuanceofthevariance. 6.9CoordinationwiththeRegionalWaterPlanningGroup TheCityofDentonislocatedwithintheRegionCwaterplanningarea.AppendixEincludesacopyofaletter senttotheChairoftheRegionCWaterPlanningGroup(RCWPG)alongwiththewaterconservationanddrought contingencyplan. 6.10ReviewandUpdateofDroughtContingencyPlan AsrequiredbyTCEQrules,theCityofDentonwillreviewthisdroughtcontingencyplaneveryfiveyears, beginningin2009.Theplanwillbeupdatedasappropriatebasedonneworupdatedinformation.Astheplanis reviewedandsubsequentlyupdated,acopyoftherevisedDroughtContingencyPlanwillbesubmittedtothe TCEQandtheRCWPGfortheirrecords. 7.0Severability TheCityofDentonPublicUtilityBoardagreesthatsections,paragraphs,sentences,clauses,andphrasesofthis DroughtContingencyPlanareseverable.Ifanyphrase,clause,sentence,paragraph,orsectionofthisDrought ContingencyPlanisdeclaredunconstitutionalbythevalidjudgmentordecreeofanycourtofcompetent jurisdiction,suchunconstitutionalityshallnotaffectanyoftheremainingphrases,clauses,sentences, paragraphs,andsectionsofthisDroughtContingencyPlan,sincethesamewouldnothavebeenenactedbythe CityofDentonPublicUtilityBoardwithouttheincorporationintothisDroughtContingencyPlanofanysuch paragraph,orsection. unconstitutionalphraseclause,sentence APPENDIXA ListofReferences 1.TexasCommissiononEnvironmentalQuality:{ ·;©ConservationPlansforMunicipalUsesbyPublicWater {Ò¦¦z;©r|TexasAdministrativeCodeTitle30PartISubchapterA§288.2,effectiveOctober7,2004 WaterConservationandDroughtContingencyPlanCityofDenton 2.TexasCommissiononEnvironmentalQuality:{ ·zz·äProfile&WaterConservationPlanRequirementsfor MunicipalWaterUsebyPublicWater{Ò¦¦z;©r|TCEQpublication10218Rev1104and{ ·zz·äProfile&Water ConservationPlanRequirementsforWholesalePublicWater{Ò¦¦z;©r|TCEQpublication20162Rev1104 3.TexasWaterDevelopmentBoard:{ ·;©ConservationBestManagementPracticesDÒz7;r|Report362, WaterConservationImplementationTaskForce,publishedNovember2004 AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2011 DEPARTMENT: Denton Municipal Electric ACM: Howard Martin, Utilities 349-8232 SUBJECT Receive a report, hold a discussion, and give staff direction regarding the preferred alignment of the portion of the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project running from the King’s Row substation to the Denton North Interchange; and consider a Resolution of the City Council of the City of Denton, Texas regarding establishment of the route for this section 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 portion of the Transmission Line Re-Build Project running from the King’s Row substation to the Denton North Interchange, DME held a neighborhood meeting, notifying 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 “a”, “b” and “c” 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 1 Distribution line construction cost 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 November 15, 2011 Presented to the City Council and held a public hearing OPTIONS 1. Recommend approval of the preferred route “c”. 2. Direct staff to consider other alternative routes. RECOMMENDATIONS Staff recommends the preferred route “c”. EXHIBITS 1. Resolution 2. Route “C” Respectfully prepared and submitted by, Phil Williams General Manager, Denton Municipal Electric 2 �1-1 � OPTION C 14,600 Feet - ,,,,� �,�, 11111 11 �� ���������►���i� = u���u���uu ��uuuui i - ����������� � ��i ,��= uumfmui uuuwmi � �����������►s���■ = �������t����� ������o� : ������►��������� ��� : ����������t�� t�t����� : ■���.�u����►� : : ��I�►����u�rD���� Gi��������������� ������� � ■ vi �1[��u�►����� �11111 - .I�I ���� �� � � � �►��j i1�1/►► �� . � � � :'� ►\��►►���i �� � ������ �� ��� ��������� ��� ��������//���� ������ � � i �� �� �� � �� Denton North ! '� � ~ �� � ____________� � I � " �� � ♦� �� ♦ �iiiiii � � � = = �� #����[ �:� �j �11 � ��j�i�\ � �� ������� : : .����: :� == ' �+f��� �ii �1�1�0� i �i � � �i 1� i�llll -- ������� = � .. .. '� �— — �. � ♦ Ir � .. �. I� l� .���� �����i�♦ ���r� � I� � �� � � .... .� �� � ��It�,����� ��� ������l���'i :i ii ���� ���11111111111�.....����� � � � �� �1���1��11� � � �� �� �� � � � � �� �� 1\� �\��„ II� � � � .. .� � ���� �I�� � 11�11�� � � i� � 1��1�1 fI� � I ��������� 1I,/� ��/� � � �� � ���� �� �I���� ��������� , �-� �������i� � ����■����■ " �• � _ .� . • � N w�e S OPTION C KINGS ROW TO DENTON NORTH (Previously Yellow Route) Denton Municipal Electric ZLf1 Proposed New Kings Row Substation �_. �� _. � ����� � _,_ �' AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: Economic Development ACM: Jon Fortune SUBJECT Consider adoption of an ordinance of the City Council of the City of Denton, Texas, amending the Downtown Incentive Reimbursement Grant Program, and establishing an effective date. (Downtown Task Force recommends approval 14-0. Economic Development Partnership Board recommends approval 8-0.) BACKGROUND City Council adopted the Downtown Incentive Reimbursement Grant Program on April 3, 2007, and has allocated $50,000 for each fiscal year through 2011-2012. On December 6, 2011, City Council received a report regarding proposed changes to the Program which include the following: 1. . This better describes the purpose of the grant, which is to assist businesses with the costs involved in renovation/redevelopment projects and developing on infill sites. 2.Change all references to th Implementation Plan (DTIP) area.When the Form Based Code is passed, the Central Business District zoning will become obsolete. 3.Change the maximum grant allowed from $50,000 to $25,000. 4.Change the allocation limits to be .In this way, if an individual owns more than one property, he/she may apply for grants for each project. By applying the limitation of $25,000 per property, the property owner and a tenant may both apply for grants; however, no more than $25,000 could be awarded in one year. 5.On page 1City of Denton Municipal Codes and Ordinances. 6.On pages 2, 10 and 11, change review criteria to property value or sales tax revenues; Historic accuracy; Utility upgrades/impact fees; Increases downtown population (residents, day or night users); Location; and Other. Agenda Information Sheet January 10, 2012 Page 2 7.On page 3 subject to approval by the Downtown Task Force. Grants more than $10,000 will be reviewed by the Economic Development Partnership Board (EDPB). Grants more than ts more than $10,000 will be placed on the City Council agenda for final approval. 8.On page 9 I am awarded a Downtown Reinvestment Grant by the City of Denton 9.Grants will be scored by Task Force members and averaged to reach an aggregate scoring number (page 11). ESTIMATED SCHEUDLE FOR PROJECT This Ordinance shall become effective immediately upon passage and approval. PRIOR ACTION/REVIEW On December 6, 2011, City Council discussed the purpose and need for the program and directed staff to bring back an ordinance reflecting the proposed changes as presented, Council will reconsider funding the grant for future years during the budget discussions for the 2012-2013. The Downtown Task Force Grant Sub-Committee met on August 25 and September 9, 2011. On October 13, 2011, the Downtown Task Force received a report from the sub-committee, reviewed the grant program changes and recommended approval to the Economic Development Partnership Board (14-0). On November 1, 2011, the Economic Development Partnership Board reviewed the changes to the grant application and recommends approval 8-0. On December 6, 2011, the City Council reviewed the proposed changes at a work session and asked staff to move forward. FISCAL INFORMATION A total of $50,000 has been allocated for FY 2011-2012. EXHIBITS Ordinance Grant Program Policy Agenda Information Sheet January 10, 2012 Page 3 Prepared by: ________ Julie Glover, Economic Development Program Administrator Respectfully Submitted, _____________________________ Linda Ratliff, Director Economic Development AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: Police ACM: Fred Greene SUBJECT Consider adoption of an ordinance of the City of Denton authorizing an agreement between the City of Denton, Texas and the , Incorporated in the amount of $121,648; providing aid to the City of Denton Police Department in the investigation of child abuse cases; providing client and clinical services to victims of child abuse and non-offending family members; providing for the expenditure of funds therefor; and providing for an effective date. BACKGROUND The CACDC) is a non-profit agency that assists the Denton Police Department with the investigation and prosecution of child abuse cases in Denton County. CACDC uses a team approach to consolidate law enforcement, Child Protective Services, prosecutors, therapists and volunteers in one location which helps to minimize the trauma experienced by victims of child abuse. CACDC also provides free counseling services to abused children and their family members. This collaborative approach has become the gold standard for investigating child abuse. The CACDC does not bill law enforcement for its services, but rather makes an annual request that participating municipalities consider allocating ved. for fiscal year 201112 is $121,648. On September 20, 2011, as part of the 2011-12 budget process, the Denton City Council formally approved an allocation o provided by CACDC for fiscal year 201112. This amount exceeds $100,000 therefore Council is required to consider an ordinance approving the annual contract between CACDC and the Denton Police Department. RECOMMENDATION Staff recommends that Council approve the ordinance as written. Agenda Information Sheet January 10, 2012 Page 2 PRIOR ACTION/REVIEW On September 20, 2011, City Council formally approved an allocation of $121,648 as part of the 2011-12 budget process. FISCAL IMPACT Subject to this Agreement the funds were allocated as part of the fiscal year 201112 budget process. The funds will continue to be administered by the Denton Police Department. Respectfully submitted, Lee Howell Chief of Police Prepared by: Lenn Carter, Captain \\codad\departments\legal\our documents\ordinances\11\2012 ordinance childrens advc center.doc ORDINANCE NO. ______________ AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING AN AGREEMENT BETWEEN THE CITY OF DENTON, TEXAS AND THE DENTON COUNTY, INCORPORATED IN THE AMOUNT OF $ 121,648.00; PROVIDING AID TO THE CITY OF DENTON POLICE DEPARTMENT IN THE INVESTIGATION OF CHILD ABUSE CASES; PROVIDING CLIENT AND CLINICAL SERVICES TO VICTIMS OF CHILD ABUSE AND NON-OFFENDING FAMILY MEMBERS; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, the , a Texas non- aids the City of Denton Police Department of investigation of child abuse cases and provides client and clinical services to victims of child abuse and non- offending families members WHEREAS, the Organization and the City of Denton desire to enter into an agreement to provide for the continuance of the Program which agreement is substantially in the same form as the and authorized by Chapter 373 of the Local Government Code and it helps to eliminate conditions detrimental to the public health and safety by providing opportunities and services to low to moderate persons in Denton that would otherwise not be available; and WHEREAS, the Program and the Public Service Agreement are necessary to preserve and assistance is provided to aid in the investigation of child abuse cases and that victims of child abuse and non- offending families members have adequate client and clinical services; and WHEREAS, City Council finds that if the Program and the Public Service Agreement are not available, families would be at risk of further abuse and trauma, thereby creating a substantial health and safety risk for citizens of Denton; and WHEREAS, the Program is supervised and administered by professional personnel which maintain licenses as counselors or social workers; and WHEREAS, City Council finds that the Public Service Agreement and the expenditures provided for in the Agreement are exempt from competitive bidding as a procurement necessary to the Local Government Code and as a procurement for professional services under Section 252.022(a)(4) of the Local Government Code; and AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: Finance ACM: Jon Fortune SUBJECT Consider adoption of an ordinance of the City of Denton, Texas to declare the intent to reimburse expenditures from the unreserved fund balance of the General Fund with Certificates of Obligation with an aggregate maximum principal amount equal to $445,000 to allow for the design and construction oversight for the Linda McNatt Animal Care and Adoption Facility, and providing an effective date. BACKGROUND The Animal Control Department will be utilizing $445,000 in Certificates of Obligation (COs) to execute a contract with Connolly Architects and Consultants to begin the first phase of the new animal care and adoption facility. Approval of this item would provide funding for Connolly Architects and Consultants for design services and construction oversight of the facility. As a separate item for consideration on this agenda, staff is recommending approval of a professional services agreement with Connolly Architects and Consultants. Due to necessary lead times for this project, a reimbursement ordinance is needed prior to the Certificates of Obligation sale in April 2012. RECOMMENDATION Approve the reimbursement ordinance for expenditures related to the contract execution for Connolly Architects and Consultants to begin work on the design and construction of this facility. FISCAL INFORMATION The construction of a new animal care and adoption facility was included in the FY 2011-12 capital improvement program budget. A total budget of $3,000,000 is programmed for this purpose. This ordinance will allow $445,000 from the unreserved fund balance of the General Fund to be expended and subsequently reimbursed with COs. Respectfully submitted: Bryan Langley Chief Financial Officer AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Scott Fletcher at 349-7939 ACM: Jon Fortune SUBJECT Consider adoption of an ordinance authorizing the City Manager to execute a Professional Services Agreement (PSA) with Connolly Architects and Consultants for Design Services and Construction Oversight for the Linda McNatt Animal Care and Adoption Facility, and providing for an effective date (File 4817Design Services and Construction Oversight for the Linda McNatt Animal Care and Adoption Facility awarded to Connolly Architects and Consultants in the amount of $440,532). FILE INFORMATION In 2008, the City of Denton and the Denton Animal Shelter Foundation (DASF) entered into an agreement to fund and construct a new animal shelter facility. The City contracted with Connolly Architects and Consultants to develop a Master Plan for the new shelter at that time. The Master Plan called for a new facility totaling just over 15,000 square feet, which includes housing space to hold stray and adoptable animals, medical facilities, staff offices, and a public education/community room. The new facility will replace the existing shelter which was constructed in 1979. Connolly Architects and Consultants has extensive experience in consulting and designing public and private animal care facilities. The Animal Shelter Building Committee, consisting of select City staff and members of the DASF Board of Directors, was very satisfied with the work of Connolly Architects during the development of the Master Plan. Therefore, the committee desires An analysis of the proposed fees in this PSA indicate that Connolly Architects is well within the established pricing percentages for this type and scope of work. Industry standard provides for the cumulative design services package to total roughly 12 percent of the total anticipated cost of the construction project. City staff examined this proposal and other recent projects in terms of the total design percentage and the individual design components, including: Architectural, Mechanical/Electrical/Plumbing (MEP), Structural Engineering, Civil Engineering, and Landscape Architecture. The components in the proposal from Connolly Architects calculate to just over 10 percent of the estimated project construction total. Therefore, fees and reimbursable items are in keeping with industry standards and are acceptable for this scope of work. Agenda Information Sheet January 10, 2012 Page 2 PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On July 12, 2011 Council directed staff to proceed with contract negotiations with Connolly Architects for the design services package, including construction oversight, for the planned Linda McNatt Animal Care and Adoption Facility. RECOMMENDATION Award a Professional Services Agreement for Design Services and Construction Oversight for the Linda McNatt Animal Care and Adoption Facility to Connolly Architects and Consultants in the amount of $440,532. PRINCIPAL PLACE OF BUSINESS Connolly Architects and Consultants Austin, TX ESTIMATED SCHEDULE OF PROJECT Project design will begin upon Council approval. The entire construction project is anticipated to take 22 months to complete. FISCAL INFORMATION The City Council has committed to provide up to $3,000,000 in funding for the Design and Construction of the new Animal Services Facility. The funding will be obtained by issuing Certificates of Obligation (COs), which have been included in the adopted Capital Improvement Program budget for fiscal year 2011-12. The $440,532 cost for Design Services will be deducted from the $3,000,000 commitment of City of Denton funds, leaving $2,559,468 for the Construction phase of the project. These funds are in addition to any donations that will be raised by the DASF. EXHIBITS Exhibit 1: Connolly Architects Proposal Exhibit 2: Connolly Architects Cost Spreadsheet Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-File 4817 Exhibit 1 ORDINANCE NO. AN ORDINANCE AUTHORIZING THE CITY MANAGER TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT (PSA) WITH CONNOLLY ARCHITECTS AND CONSULTANTS FOR DESIGN SERVICES AND CONSTRUCTION OVERSIGHT FOR THE LINDA MCNATT ANIMAL CARE AND ADOPTION FACILITY, AND PROVIDING FOR AN EFFECTIVE DATE (FILE 4817DESIGN SERVICES AND CONSTRUCTION OVERSIGHT FOR THE LINDA MCNATT ANIMAL CARE AND ADOPTION FACILITY AWARDED TO CONNOLLY ARCHITECTS AND CONSULTANTS IN THE AMOUNT OF $440,532). WHEREAS, is being selected as the most highly qualified on the basis of its demonstrated competence and qualifications to perform the proposed professional services; and WHEREAS, The fees under the proposed contract are fair and reasonable and are consistent with and not higher than the recommended practices and fees published by the professional maximum provided by law; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the City Manager is hereby authorized to enter into a professional service contract with Connolly Architects and Consultants, to provide design services and construction oversight for the Linda McNatt animal Care and Adoption Facility, a copy of which is attached hereto and incorporated by reference herein. SECTION 2. The City Manager is authorized to expend funds as required by the attached contract. SECTION 3. 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 professional services agreement with Connolly Architects and Consultants, the City Manager of the City of Denton, Texas, or his designee. SECTION 4. The findings in the preamble of this ordinance are incorporated herein by reference. SECTION 5. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of ,2012. ______________________________ MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY:_________________________________ APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY:_________________________________ 4-ORD-File 4817 AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012Questions concerning this Acquisition may be directed DEPARTMENT: Materials Management to Mike Ellis at 349-8424 ACM: Jon Fortune SUBJECT 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 Texas Association of School Boards (TASB) for the acquisition of fourteen vehicles for the City of Denton Police Department and one tractor for the City of Denton Municipal Airport; and providing an effective date (File 4866-Purchase of Vehicles and Equipment for Police and Airport Departments awarded to Caldwell Country Chevrolet in the amount of $326,104 and AG-Power, Inc. in the amount of $55,309.08 for a total award of $381,413.08). FILE INFORMATION The items listed below reflect replacements of vehicles and/or equipment for the Police and Airport Departments. These purchases were outlined in the fiscal year 2011-2012 Vehicle Replacement Plan and fiscal year 2011-2012 Capital Improvement Program Budget. The cost reflected here does not include light bars, decals or other accessories. Those items will be presented once the vehicles are ready. The Police vehicles are replacements for current vehicles which will be sold at auction. Item #15 represents a fleet addition, necessary to assist ground maintenance needs resulting from the recently completed runway extension project and was approved as part of the fiscal year 2011-2012 Annual Operating Budget. Item Description Price (Ea) Department Contract# 1 Chevrolet Tahoe $ 25,176.00 Police 358-10 2 Chevrolet Tahoe $ 25,176.00 Police 358-10 3 Chevrolet Tahoe $ 25,176.00 Police 358-10 4 Chevrolet Tahoe $ 25,176.00 Police 358-10 5 Chevrolet Tahoe $ 25,176.00 Police 358-10 6 Chevrolet Tahoe $ 25,176.00 Police 358-10 7 Chevrolet Tahoe $ 25,176.00 Police 358-10 8 Chevrolet Tahoe $ 25,176.00 Police 358-10 9 Chevrolet Tahoe $ 25,176.00 Police 358-10 10 Chevrolet Tahoe $ 25,176.00 Police 358-10 11 Chevrolet Impala $ 18,386.00 Police 358-10 12 Chevrolet Impala $ 18,386.00 Police 358-10 13 Chevrolet Impala $ 18,386.00 Police 358-10 14 Chevrolet Impala $ 18,386.00 Police 358-10 15 John Deere 5085M Utility Tractor $ 55,309.08 Airport 373-11 Total $380,613.08 Buy Board Fee ($400 per Purchase Order) 800.00 $381,413.08 Agenda Information Sheet January 10, 2012 Page 2 FILE INFORMATION (CONTINUED) Cooperative agreement handling fees and service manuals are estimated at $800 and may vary depending upon the number of purchase orders issued and service manuals required for the The quotes were received from cooperative purchasing network vendors and the equipment/vehicles are not available from local car dealers. The John Deere Utility Tractor is not available locally-the local dealer does not carry the class of tractor needed. RECOMMENDATION Award the purchase of fourteen Police vehicles and one tractor for the City of Denton Airport through Buy Board Cooperative Purchasing Network to the vendors listed below for a total award amount of $381,413.08. ITEM NUMBER VENDOR AMOUNT 1- 14 Caldwell Chevrolet $326,104.00 15 AG-Power, Inc. $ 55,309.08 Total for Vehicles/Equipment $ 381,413.08 PRINCIPAL PLACE OF BUSINESS Caldwell Country AG-Power, Inc. Caldwell, TX McKinney, TX ESTIMATED SCHEDULE OF PROJECT The purchase and delivery of vehicles and equipment will occur within 180 days of purchase order issuance. FISCAL INFORMATION On October 4, 2011, the City Council adopted Ordinance No. 2011-181 to declare the intent to reimburse expenditures for Police vehicles totaling $712,636 (11 Tahoes at $56,000 each and three Impalas at $32,212 each). This estimate represents fully ready vehicles, including all accessories. The Airport Tractor will be cash funded by the Airport Operating Budget. The dollar amounts for the Police vehicles include the Buy Board cooperative agreement fee split between each line item account number. Agenda Information Sheet January 10, 2012 Page 3 Account# Requisition# Dollar Amount 810092464.1355.30100 106244 $ 18,486.00 810093464.1355.30100 106244 $ 18,486.00 810094464.1355.30100 106244 $ 18,486.00 810095464.1355.30100 106244 $ 18,486.00 810096464.1355.30100 106245 $ 25,216.00 810097464.1355.30100 106245 $ 25,216.00 810098464.1355.30100 106245 $ 25,216.00 810099464.1355.30100 106245 $ 25,216.00 810100464.1355.30100 106245 $ 25,216.00 810101464.1355.30100 106245 $ 25,216.00 810102464.1355.30100 106245 $ 25,216.00 810103464.1355.30100 106245 $ 25,216.00 810104464.1355.30100 106245 $ 25,216.00 810105464.1355.30100 106245 $ 25,216.00 200034565.1365.40100 106264 $ 55,309.08 Total Expenditure $ 381,413.08 EXHIBITS Exhibit 1: Price Quotes Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-File 4866 EXHIBIT 1 CONTRACT PRICING WORKSHEET QUOTE# 001A End User: CITY OF DENTON Contractor: CALDWELL COUNTRY Contact Name: MIKE ELLIS CALDWELL COUNTRY Email: MIKE.ELLIS@CITYOFDENTON.COM Prepared By: Averyt Knapp Phone #: 940-349-8410 Email: aknapp@caldwellcountry.com Fax #: 940-349-8492 Phone #: 800-299-7283 or 979- 567-6116 Location City & State: DENTON, TX Fax #: 979-567-0853 Date Prepared: DECEMBER 27, 2011 Address: P. O. Box 27, Caldwell, TX 77836 Contract Number: BUY BOARD #358-10 Tax ID # 14-1856872 Product Description: 2012 CHEVROLET TAHOE PPV CC10706 A Base Price & Options: $25,176 B Published Options Code Description Cost Code Description Cost LH SPOTLIGHT, INCL 5.3LV8-FFV, 6-SPD AUTOMATIC, CLOTH BUCKET FRONT/VINYL REAR BENCH, FULL RUBBER FLOOR, AIR CONDITION FRONT/REAR, TILT, CRUISE, DEEP TINT GLASS, RUNNING BOARDS, POWER SEAT, POWER WINDOWS, POWER LOCKS, POWER MIRRORS, KEYLESS ENTRY, 3 KEYS TOTAL GM WARRANTY INCL CALDWELL COUNTRY 5YR/100,000 MILES POWERTRAIN @ N/C PO BOX 27 CALDWELL,TEXAS 77836 INCL Subtotal B C Unpublished Options Code Description Cost Code Description Cost Subtotal C INCL Subtotal D E Unit Cost Before Fee & Non-Equipment Charges(A+B+C+D) $25,176 Quantity Ordered 10 X $251,760 Subtotal E F Non-Equipment Charges (Trade- BUY BOARD FEE $400 G. Color of Vehicle: BLACK H. Total Purchase Price (E+F) $252,160 Estimated Delivery 60-90 DAYS APPX Date: CONTRACT PRICING WORKSHEET QUOTE# 002A End User: CITY OF DENTON Contractor: CALDWELL COUNTRY Contact Name: MIKE ELLIS CALDWELL COUNTRY Email: MIKE.ELLIS@CITYOFDENTON.COM Prepared By: Averyt Knapp Phone #: 940-349-8410 Email: aknapp@caldwellcountry.com Fax #: 940-349-8492 Phone #: 800-299-7283 or 979- 567-6116 Location City & State: DENTON, TX Fax #: 979-567-0853 Date Prepared: DECEMBER 27, 2011 Address: P. O. Box 27, Caldwell, TX 77836 Contract Number: BUY BOARD #358-10 Tax ID # 14-1856872 Product Description: 2012 CHEVROLET IMPALA LS 1WF19 A Base Price & Options: $18,386 B Published Options Code Description Cost Code Description Cost LS PACKAGE, 3.6LV6, INCL AUTOMATIC, AIR CONDITION, AMFM-CD, TILT, CRUISE, POWER SEAT, POWER WINDOWS, POWER LOCKS, POWER MIRRORS, CARPET FLOOR W/MATS, BODY SIDE MOLDING, CLOTH BUCKET FRONT/CLOTH REAR BENCH, 3 KEYS TOTAL GM WARRANTY INCL CALDWELL COUNTRY 5YR/100,000 MILES POWERTRAIN @ N/C PO BOX 27 CALDWELL,TEXAS 77836 INCL Subtotal B C Unpublished Options Code Description Cost Code Description Cost Subtotal C INCL Subtotal D E Unit Cost Before Fee & Non-Equipment Charges(A+B+C+D) $18,386 Quantity Ordered 4 X $73,544 Subtotal E F Non-Equipment Charges (Trade- BUY BOARD FEE $400 G. Color of Vehicle: BLACK GRANITE, ASHEN GRAY, SILVE ICE, IMPERIAL BLUE H. Total Purchase Price (E+F) $73,944 Estimated Delivery 60-90 DAYS APPX Date: AG-POWER, INC. 3501 N. Central Expressway McKinney, TX 75071 Phone: 972-542-0301 Fax: 972-542-4321 Customer Name :CITY OF DENTON MATERIALS MANAGEMENT Quote Id : 6192517 ALL PURCHASE ORDERS MUST BE MADE OUT TO (VENDOR): John Deere Company 2000 John Deere Run Cary, NC 27513 Ph: 888-222-7239, Fax: 309-749-2313 FED ID: 36-2382580; DUNS#: 60-7690989 Quote Summary Prepared For :Delivering Dealer : Quote ID : 6192517 AG-POWER, INC.December 27, 2011 CITY OF DENTON MATERIALS Created On : MANAGEMENT Last Modified On: December 27, 2011 MIKE BARKER 901 TEXAS ST STE B Expiration Date: May 31, 2012 3501 N. Central Expressway DENTON, TX 76209 McKinney, TX 75071 Business:940-349-8410 Phone:972-542-0301 mbarker@ag-power.com Equipment SummarySelling PriceQtyExtended JOHN DEERE 6330 Cab Tractor$ 55,309.08X1=$ 55,309.08 Contract: TASB_373-11 Price Effective Date: March 3, 2011 Equipment Total$ 55,309.08 Quote Summary * Includes Fees and Non-contract items Equipment Total$ 55,309.08 Trade In $ 55,309.08 SubTotal Total$ 55,309.08 Down Payment(0.00) Rental Applied(0.00) Balance Due $ 55,309.08 Accepted By : X ______________ Salesperson : X ______________ CONFIDENTIAL Selling Equipment Quote Id : Customer Name : 6192517 CITY OF DENTON MATERIALS MANAGEMENT ALL PURCHASE ORDERS MUST BE MADE OUT TO (VENDOR): John Deere Company 2000 John Deere Run Cary, NC 27513 Ph: 888-222-7239, Fax: 309-749-2313 FED ID: 36-2382580; DUNS#: 60-7690989 JOHN DEERE 6330 Cab Tractor Contract: TASB_373-11 Price Effective Date: March 3, 2011 Selling Price * $ 55,309.08 * Price per item - includes Fees and Non-contract items CodeDescriptionQtyList PriceDiscountDiscountContractExtended %AmountPriceContract Price 3122R6330 Cab Tractor1$ 64,431.0026.00$ 16,752.06$ 47,678.94$ 47,678.94 Standard Options - Per Unit Competitive Package - Cab $ -575.0026.00$ -149.50$ -425.50$ -425.50 06071 MFWD PQ Plus w/ LHR Flanged Air Seat Value Package $ 0.0026.00$ 0.00$ 0.00$ 0.00 0150Standard Cab1 MFWD Front Axle with Limited $ 0.0026.00$ 0.00$ 0.00$ 0.00 02501 Slip Differential 18.4R34 In. 144A8 R1W$ 0.0026.00$ 0.00$ 0.00$ 0.00 12881 Radial (460/85R34 In. 147A8 R1W Radial) 14.9R24 In. 126A8 R1W$ 0.0026.00$ 0.00$ 0.00$ 0.00 42491 Radial (380/85R24 In. 131A8 R1W Radial) PowrQuad PLUS 16F/16R $ 3,685.0026.00$ 958.10$ 2,726.90$ 2,726.90 70731 Transmission with Left Hand Power Reverser (19 mph/30 kmh) Rear Independent 540/1000 $ 685.0026.00$ 178.10$ 506.90$ 506.90 71021 RPM PTO Flanged Axle, 8 Position Steel $ 0.0026.00$ 0.00$ 0.00$ 0.00 71521 Wheels Deluxe Cab Corner Post $ 827.0026.00$ 215.02$ 611.98$ 611.98 74531 Exhaust with Underhood Muffler Super Comfort Seat (MSG 95) $ 849.0026.00$ 220.74$ 628.26$ 628.26 76621 with Air Suspension, 3-In. Seat Cushion CONFIDENTIAL Selling Equipment Quote Id : Customer Name : 6192517 CITY OF DENTON MATERIALS MANAGEMENT ALL PURCHASE ORDERS MUST BE MADE OUT TO (VENDOR): John Deere Company 2000 John Deere Run Cary, NC 27513 Ph: 888-222-7239, Fax: 309-749-2313 FED ID: 36-2382580; DUNS#: 60-7690989 CodeDescriptionQtyList PriceDiscountDiscountContractExtended %AmountPriceContract Price Rear Windshield Wiper with $ 467.0026.00$ 121.42$ 345.58$ 345.58 91021 Front & Rear Washer $ 31.0026.00$ 8.06$ 22.94$ 22.94 9216Bottle Holder1 Second SCV Deluxe (3 Detents $ 1,065.0026.00$ 276.90$ 788.10$ 788.10 92601 - 301 Series) with Standard Couplers Third SCV Standard (2 Detents $ 1,080.0026.00$ 280.80$ 799.20$ 799.20 93031 - 201 Series) with Standard Couplers Condensor Screen, Air $ 19.0026.00$ 4.94$ 14.06$ 14.06 88901 Conditioning (4 or 6 cylinder engine) Loader Joystick with 2-$ 1,379.0026.00$ 358.54$ 1,020.46$ 1,020.46 88101 Function Midmount Independent Control Valve (M-ICV) $ 0.0026.00$ 0.00$ 0.00$ 0.00 9988No Specific Tire brand1 Standard Options Total$ 9,512.00$ 2,473.12$ 7,038.88$ 7,038.88 Dealer Attachments/Non-Contract/Open Market Radio, Deere/Delco AM/FM $ 421.0026.00$ 109.46$ 311.54$ 311.54 RE2898481 Stereo with Clock, Front Audio Input Jackfor MP3 Players, and Weatherband Front Weight Support, 132 Lb. $ 378.0026.00$ 98.28$ 279.72$ 279.72 RE3008381 (60 Kg) 21 In. (535 mm) Wide Dealer Attachments Total$ 799.00$ 207.74$ 591.26$ 591.26 $ 55,309.08 Suggested Price Total Selling Price$ 74,742.00$ 19,432.92$ 55,309.08$ 55,309.08 CONFIDENTIAL ORDINANCE NO. ___________ 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 TEXAS ASSOCIATION OF SCHOOL BOARDS (TASB) FOR THE ACQUISITION OF FOURTEEN VEHICLES FOR THE CITY OF DENTON POLICE DEPARTMENT AND ONE TRACTOR FOR DENTON MUNICIPAL AIRPORT; AND PROVIDING AN EFFECTIVE DATE (FILE 4866-PURCHASE OF VEHICLES AND EQUIPMENT FOR POLICE AND AIRPORT DEPARTMENTS AWARDED TO CALDWELL COUNTRY CHEVROLET IN THE AMOUNT OF $326,104 AND AG-POWER, INC. IN THE AMOUNT OF $55,309.08 FOR A TOTAL AWARD OF 381,413.08). WHEREAS, pursuant to Ordinance 2005-034, the Buy Board Cooperative Purchasing Network 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 Buy Board Cooperative Purchasing Network 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 items shown office of the Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: FILE NUMBER VENDOR AMOUNT 4866 Caldwell Country Chevrolet $326,104.00 4866 Ag-Power, Inc. $ 55,309.08 SECTION 2. By the acceptance and approval of the items set forth in the referenced file number, the City accepts the offer of the persons submitting the bids to the Buy Board Cooperative Purchasing Network 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 Buy Board Cooperative Purchasing Network and the purchase orders issued by the City. SECTION 3. Should the City and persons submitting approved and accepted items set forth in the referenced file number wish to enter into a formal written agreement as a result of the Manager or his designated representative is hereby authorized to execute the written contract which shall be attached hereto; provided that the written contract is in accordance with the terms, conditions, specifications and standards contained in the Proposal submitted to the Buy Board Cooperative Purchasing Network, 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 File 4866 to the City Manager of the City of Denton, Texas, or his designee. SECTION 5. By the acceptance and approval of the items set forth in the referenced file number, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approval purchase orders or pursuant to a written contract made pursuant thereto as authorized herein SECTION 6. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this ________ day of ______________, 2012. ______________________________ MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: ________________________________ APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY ________________ BY: _________________ 4-ORD-File 4866 AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Mike Ellis at 349-8424 ACM: Jon Fortune SUBJECT Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute a contract through the Buy Board Cooperative Purchasing Network for the acquisition of an Excavator for the City of Denton Solid Waste Construction and Demolition Division; and providing an effective date (File 4878-Purchase of Excavator for Solid Waste Construction and Demolition Division awarded to Darr Equipment Company in the amount of $108,659). The Public Utilities Board recommends approval (5-0). FILE INFORMATION A Construction and Demolition (C&D) recycling pilot program was conducted in 2008 and 2009. The pilot showed that sorting of recoverable materials was economically feasible at the working face of the City of Denton Landfill. Materials that were recovered included cardboard, metals and wood. In the fiscal year 2011 Capital Improvements Project budget, equipment funding was included to purchase a vibratory screen, picking station and other equipment to mechanize the previously manual sorting process in order to improve efficiency and recover a larger percentage of recyclable materials from the waste loads originally destined for Landfill disposal. An excavator is used to pre-screen and load the sorting line and this equipment purchase will provide this loading component of the system. The equipment will be purchased through the State of Texas Buy Board purchasing cooperative that has a contract with Darr Equipment Company to provide a variety of heavy equipment which includes the JCB Excavator needed for the C&D recycling operation. Fleet Services could not identify any local vendors that quote this type of equipment. The meets the air emissions requirements for Tier IV engine compliance as specified by the Environmental Protection Agency (EPA) standards. This equipment is currently being leased until approval by the PUB and City Council in order to allow the system to complete its commissioning process and meet its performance requirements. Item Description Price (Ea) Department Contract# 1 Excavator $108,659.00 SW Construction Buy Board and Demolition #345-10 *Cooperative agreement handling fees and service manuals are estimated at $1,000 or less. This piece of equipment is powered by a diesel engine w/ LEV ratings that meet or exceed EPA Standards. Agenda Information Sheet January 10, 2012 Page 2 PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) The funding for this purchase was previously approved by the Public Utilities Board (PUB) on October 10, 2011. On December 6, 2011, the Public Utilities Board recommended approval to forward this item to the City Council for consideration. RECOMMENDATION Staff recommends the approval of the purchase in the amount of $108,659 to Darr Equipment Company. PRINCIPAL PLACE OF BUSINESS Darr Equipment Company Dallas, TX ESTIMATED SCHEDULE OF PROJECT The purchase and delivery of this equipment will occur within 180 days of purchase order issuance. FISCAL INFORMATION City Council approved the purchase of the excavator as part of the fiscal year 2011-2012 budget. The equipment will be funded from 2010 Bond fund account #660548592.1355.30100 in the amount of $108,659. Requisition #106003 has been entered in the Purchasing software system. EXHIBITS Exhibit 1: Price Quote from Darr Equipment Exhibit 2: Price Comparison for Excavator Exhibit 3: Public Utilities Board Minutes Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-File 4878 Exhibit 1 Exhibit 3 DRAFT MINUTES 1 PUBLIC UTILITIES BOARD 2 3 December 12, 2011 4 5 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas is 6 present, the Chair of the Public Utilities Board will thereafter convene into an open meeting on 7 Monday, December 12, 2011 at 9:00 a.m. in the Service Center Training Room, City of Denton 8 Service Center, 901-A Texas Street, Denton, Texas. 9 10 Present: Vice Chair Bill Cheek, Randy Robinson, Phil Gallivan, Barbara Russell 11 and Leonard Herring 12 13 Ex Officio Members: George Campbell, City Manager, Howard Martin, ACM Utilities 14 15 Absent excused: Chair Dick Smith, John Baines 16 OPEN MEETING: 17 18 CONSENT AGENDA: 19 20 Approval of the Consent Agenda authorizes the Assistant City Manager of Utilities, or his 21 designee, to implement each item in accordance with the staff recommendations. The Public 22 23 opportunity to raise questions regarding these items prior to consideration. 24 25 3) Consider a recommendation of an ordinance of the City of Denton authorizing the City 26 Manager or his designee to execute a contract through the Texas Buy Board Purchasing 27 Network for the acquisition of one Excavator for the Solid Waste Construction & 28 Demolition Division (C&D); and providing an effective date (File 4878-Excavator for 29 Solid Waste C&D Division awarded to DARR Equipment Company in the amount of 30 $108,659). 31 Board Member Gallivan moved to approve item 3 with a second from Board Member 32 Russell. The motion was approved by a 5-0 vote. 33 34 35 Adjournment at 12:08pm ORDINANCE NO. ___________ AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE A CONTRACT THROUGH THE BUY BOARD COOPERATIVE PURCHASING NETWORK FOR THE ACQUISITION OF AN EXCAVATOR FOR THE CITY OF DENTON SOLID WASTE CONSTRUCTION AND DEMOLITION DIVISION; AND PROVIDING AN EFFECTIVE DATE (FILE 4878- PURCHASE OF EXCAVATOR FOR SOLID WASTE CONSTRUCTION AND DEMOLITION DIVISION AWARDED TO DARR EQUIPMENT COMPANY IN THE AMOUNT OF $108,659). WHEREAS, pursuant to Ordinance 2005-034, the Buy Board Cooperative Purchasing Network 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 Buy Board Cooperative Purchasing Network 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. office of the Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: FILE NUMBER VENDOR AMOUNT 4878 Darr Equipment Company $108,659 SECTION 2. By the acceptance and approval of the items set forth in the referenced file number, the City accepts the offer of the persons submitting the bids to the Buy Board Cooperative Purchasing Network 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 Buy Board Cooperative Purchasing Network and the purchase orders issued by the City. SECTION 3. Should the City and persons submitting approved and accepted items set forth in the referenced file number wish to enter into a formal written agreement as a result of the Manager or his designated representative is hereby authorized to execute the written contract which shall be attached hereto; provided that the written contract is in accordance with the terms, conditions, specifications and standards contained in the Proposal submitted to the Buy Board Cooperative Purchasing Network, 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 File 4878 to the City Manager of the City of Denton, Texas, or his designee. SECTION 5. By the acceptance and approval of the items set forth in the referenced file number, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approval purchase orders or pursuant to a written contract made pursuant thereto as authorized herein SECTION 6. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this ________ day of ______________, 2012. ______________________________ MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: ________________________________ APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY ________________ BY: _________________ 5-ORD-File 4878 AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Phil Williams at 349-8487 ACM: Jon Fortune SUBJECT Consider adoption of an ordinance accepting proposals and awarding a public works contract for the construction of the Bonnie Brae Substation for the City of Denton; providing for the expenditure of funds therefor; and providing an effective date (RFP 4861-awarded to Can-Fer Utility Services, LLC, in estimated amount of $634,739). The Public Utilities Board recommends approval (5-0). RFP INFORMATION The Bonnie Brae Substation is an approved Capital Improvements Project that will supply electric power to the west and central areas of the Denton Municipal Electric service territory. Construction of the substation is necessary to support continued growth, including the Rayzor Ranch development, and to relieve load from the North Lakes and Hickory substations. All major equipment items and galvanized steel structures for the substation have been purchased and are awaiting shipment to the City. Construction will include site work, foundation construction, ground grid installation, conduit installation, steel structure assembly and installation, bus work, and equipment installation-all in accordance with the Request For Proposal (RFP) specifications. The RFP was advertised in accordance with Materials Management procedures. Eight contractors requested proposal packages. Seven responsive proposals were received. The members of the RFP evaluation team consisted of five employees from the Materials Management and Electric Engineering Departments. The proposals were evaluated in accordance with the factors included in the RFP which were: a)Indicators of Probable Performance (FACTOR: 30%). Evaluation of indicators of probable performance will include: past performance, financial resources and ability to perform, experience or demonstrated capability and responsibility, references, and the ve warranty support. b)Delivery Timeframe (FACTOR: 20%). The ability to commence work within 14 days of the Notice of Award and to complete the project by the date stated in the Technical Specification. c)Compliance with specifications, quality, reliability, characteristics to meet stated or implied needs (FACTOR 20%). Agenda Information Sheet January 10, 2012 Page 2 RFP INFORMATION (CONTINUED) Compliance with the requirements and intents of the specification(s) coupled with the quality and reliability of the goods and services such as fitness for use that meets or exceeds ocharacteristics of the product or servicethat bear on its ability to meet the stated/implied needs. d)Price, Total Cost of Ownership (FACTOR: 30%). The price of the items, to include total cost of ownership, such as installation costs, life cycle costs, and warranty provisions. The four evaluation factors were assessed independently and then totaled to determine the proposal with the best value to the City (Exhibit 1). The respondent with the highest points was Can-Fer Utility Services, LLC. Can-Fer Utility Services also presented the lowest pricing received from the competitive process (Exhibit 2). PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On December 12, 2011, the Public Utilities Board recommended approval to forward this item to the City Council for consideration. RECOMMENDATION Award a contract for the construction of the Bonnie Brae substation to Can-Fer Utility Services, LLC in the estimated amount of $634,739. PRINCIPAL PLACE OF BUSINESS Can-Fer Utility Services, LLC Grand Prairie, TX ESTIMATED SCHEDULE OF PROJECT The estimated completion date for the substation is June 1, 2012. FISCAL INFORMATION The project will be funded from Capital Improvement Project account no. 602099498.1350.3530 in the amount of $444,317.30 and account no. 602099498.1350.3620 in the amount of $190,421.70. Requisition #106347 has been entered in the Purchasing software system. Agenda Information Sheet January 10, 2012 Page 3 EXHIBITS Exhibit 1: Evaluation Ranking Exhibit 2: Best and Final Offer Pricing Exhibit 3: Public Utility Board Minutes Respectfully submitted: nio Puente, Jr., 349-7283 Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-RFP 4861 Exhibit 1 RFP 4861 - Evaluation Bonnie Brae Substation Construction December 12th, 2011 Initial Ranking/Score 100.001st Can-Fer Utility Services - Grand Prairie, Texas 86.822nd Ernest P. Breaux - New Iberia, Louisiana 85.703rd Re-Con Company - Okla City, Oklahoma 84.324th Pike Electric - Mount Airy, North Carolina 77.955th Thayer - Richmond. Texas 65.966th Power Line Utility Services - The Woodlands, Texas 65.817th Chain Electric Company - Hattiesburg, Massachusetts All the finalists will be sent a BAFO letter to determine the overall best value to the city. Exhibit 3 DRAFT MINUTES 1 PUBLIC UTILITIES BOARD 2 3 December 12, 2011 4 5 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas is 6 present, the Chair of the Public Utilities Board will thereafter convene into an open meeting on 7 Monday, December 12, 2011 at 9:00 a.m. in the Service Center Training Room, City of Denton 8 Service Center, 901-A Texas Street, Denton, Texas. 9 10 Present: Vice Chair Bill Cheek, Randy Robinson, Phil Gallivan, Barbara Russell 11 and Leonard Herring 12 13 Ex Officio Members: George Campbell, City Manager, Howard Martin, ACM Utilities 14 15 Absent excused: Chair Dick Smith, John Baines 16 OPEN MEETING: 17 18 CONSENT AGENDA: 19 20 Approval of the Consent Agenda authorizes the Assistant City Manager of Utilities, or his 21 designee, to implement each item in accordance with the staff recommendations. The Public 22 23 opportunity to raise questions regarding these items prior to consideration. 24 25 4)Consider a recommendation for an approval to award a contract for construction of the 26 Bonnie Brae Substation in accordance with the specifications for RFP #4861 to Can-Fer 27 Utility Services, LLC, whose business address is 3340 Roy Orr Blvd, Grand Prairie, 28 Texas, in the total estimated expenditure amount of $634,739. 29 Board Member Gallivan moved to approve item 4 with a second from Board Member 30 Russell. The motion was approved by a 5-0 vote. 31 32 33 Adjournment at 12:08pm ORDINANCE NO. _________ AN ORDINANCE ACCEPTING PROPOSALS AND AWARDING A PUBLIC WORKS CONTRACT FOR THE CONSTRUCTION OF THE BONNIE BRAE SUBSTATION FOR THE CITY OF DENTON; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (RFP 4861-AWARDED TO CAN-FER UTILITY SERVICES, LLC, IN ESTIMATED AMOUNT OF $634,739). WHEREAS, the City has solicited, received and tabulated competitive proposals for the construction of public works or improvements in accordance with the procedures of STATE law and City ordinances; and WHEREAS, the City Manager or a designated employee has received and recommended that the herein described bids are the lowest responsible bids for the construction of the public works or improvements described in the bid invitation, proposals and plans and specifications therein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. That the following competitive bids for the construction of public works or improvements, as described in the "Bid Invitations", "Request for Proposals" or plans and specifications on file in the Office of the City's Purchasing Agent filed according to the bid number assigned hereto, are hereby accepted and approved as being the lowest responsible proposal: RFP NUMBER CONTRACTOR AMOUNT 4861 Can-Fer Utility services, LLC $634,739 SECTION 2. That the acceptance and approval of the above competitive proposals shall not constitute a contract between the City and the person submitting the proposal for construction of such public works or improvements herein accepted and approved, until such person shall comply with all requirements specified in the Notice to Bidders including the timely execution of a written contract and furnishing of performance and payment bonds, and insurance certificate after notification of the award of the bid. SECTION 3. That the City Manager is hereby authorized to execute all necessary written contracts for the performance of the construction of the public works or improvements in accordance with the proposals accepted and approved herein, provided that such contracts are made in accordance with the Notice to Bidders and Request for Proposals, and documents relating thereto specifying the terms, conditions, plans and specifications, standards, quantities and specified sums contained therein. 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 RFP 4861 to the City Manager of the City of Denton, Texas, or his designee. SECTION 5. That upon acceptance and approval of the above competitive proposals and the execution of contracts for the public works and improvements as authorized herein, the City Council hereby authorizes the expenditure of funds in the manner and in the amount as specified in such approved proposals and authorized contracts executed pursuant thereto. SECTION 6. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of ,2012. ______________________________ MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: 5-ORD-RFP 4861 AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012Questions concerning this acquisition may be directed DEPARTMENT: Finance to Phil Williams at 349-8487 ACM: Jon Fortune SUBJECT Consider adoption of an Ordinance accepting competitive bids and awarding an annual contract for the purchase of electric transmission conductors for the City of Denton, Texas, Denton Municipal Electric; providing for the expenditure of funds therefor; providing for the retroactive ratification of the purchase in the amount of $335,129.60 as permitted in the provisions of Ordinance No. 2009-189, the Ordinance providing for procurement procedures for purchases by Denton Municipal Electric for electric production, transmission, distribution, and station systems in accordance with Texas Local Government Code Section 252.022(c); providing an effective date (Bid No. 4880-Annual Contract for the Purchase of Electric transmission conductors BID INFORMATION This item is for ratification to award an annual contract for the purchase of high strength conductors (a.k.a. Suwannee) for an initial purchase in the amount of $335,129.60. The initial purchase will be used to re-conductor the Texas Municipal Power Agency (TMPA) 138kV transmission line from Denton West to Fort Worth Substation and from Denton West to Jim Christal Substation. This purchase was declared a Critical Business Need Purchase under the Denton Municipal Electric (DME) specialized procurement policy in accordance with Ordinance 2009-189. The total length of the transmission line re-conductor is about eight miles (Exhibit 2-Map). This project will involve replacing existing conductors and attachment hardware with new conductors that will significantly increase capacity but, will not require any additional land rights acquisition. It recently became apparent that TMPA will not complete the project to re- conductor two TMPA 138 KV transmission lines from Denton West before next summer. This project is critical to reliability in the Denton area. Outage of either of the two transmission lines from Denton West could result in overload of the other line, if the outage occurred at or near the time of the daily peak, from May through October. The overload resulting from outage of either line would require shedding of customer load to avoid more customer outages and to avoid damage to electric utility infrastructure. DME is capable of implementing solutions to this issue, but needs to act quickly. Agenda Information Sheet January 10, 2012 Page 2 The transmission line re-conductor project needs to be completed no later than May 1, 2012. In order for DME to complete the project, materials must be procured and a construction contractor must be engaged immediately. Lead time for the transmission line re-conductor wire is at least 12 to 13 weeks, placing delivery in late February or early March. BID INFORMATION (CONTINUED) The construction contractor will require six to eight weeks to complete the construction, therefore, expedited procurement of the transmission line re-conductor wire was implemented through the issuance of Purchase Order 156422 on December 15, 2011. Bids for the annual contract were solicited with five vendors responding. Stuart C. Irby was determined to be the lowest responsive bidder meeting specification and the best value for the City (Exhibit 1). PRIOR ACTION/VIEW (COUNCIL, BOARDS, COMMISSIONS) Per Ordinance 2009-189, the purchase in the amount of $335,129.60 was submitted to the City Manager and approved on December 15, 2011. Ordinance 2009- busine then retroactively ratified by Council. This item will also be considered for approval at the January 9, 2012, Public Utilities Board meeting. RECOMMENDATION Award an annual contract for the purchase of electric transmission conductors to the lowest responsible bidder, Stuart C. Irby in the pricing as shown on Exhibit A of the ordinance. Retroactively ratify the purchase of 135,200 feet of conductors and $2,400 deposit per reel for 13 reels from Stuart C. Irby in the amount of $335,129.60. PRINCIPAL PLACE OF BUSINESS Stuart C. Irby Fort Worth, TX ESTIMATED SCHEDULE OF PROJECT This is a one year contract that may be renewed for four additional one year periods if agreed upon in writing by both parties. The transmission line re-conductor project is planned for completion before May 1, 2012. Agenda Information Sheet January 10, 2012 Page 3 FISCAL INFORMATION This project will be funded from account numbers 603027498.1350.3560 in the amount of $180,454.40 and 603028498.1350.3560 in the amount of $154,675.20 from Denton West Substation to Fort Worth Substation and from Denton West Substation to Jim Cristal Substation respectively. The projects will either be reimbursed by TMPA or filed in DME transmission cost of service filings with the Public Utility Commission. EXHIBITS Exhibit 1: Bid Tabulation Exhibit 2: Map of Project Location Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-Bid 4880 ORDINANCE NO. 2012- __ AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING AN ANNUAL CONTRACT FOR THE PURCHASE OF THE ELECTRIC TRANSMISSION CONDUCTORS FOR THE CITY OF DENTON, TEXAS, DENTON MUNICIPAL ELECTRIC; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; PROVIDING FOR THE RETROACTIVE RATIFICATION OF THE PURCHASE IN THE AMOUNT OF $335,129.60 AS PERMITTED IN THE PROVISIONS OF THE ORDINANCE NO. 2009-189, THE ORDINANCE PROVIDING FOR PROCUREMENT PROCEDURES FOR PURCHASES BY DENTON MUNICIPAL ELECTRIC FOR ELECTRIC PRODUCTION, TRANSMISSION, DISTRIBUTION, AND STATION SYSTEMS IN ACCORDANCE WITH TEXAS LOCAL GOVERNMENT CODE SECTION 252.022(C); PROVIDING AN EFFECTIVE DATE (BID NO. 4880-ANNUAL CONTRACT FOR THE PURCHASE OF ELECTRIC TRANSMISSION CONDUCTORS AWARDED TO STUART WHEREAS, the City has solicited, received and tabulated competitive bids for the purchase of necessary materials, equipment, supplies or services in accordance with the procedures of State law and City ordinances; and WHEREAS, there is an urgent need to reconstruct the Texas Municipal Power Agency nton West to Jim Christal Substation, as the lines do not currently meet the NERC and ERCOT performance requirements for single outages. If either line experiences an outage at or near the time of the summer peak, the other line will overload, possibly to the point of failure. TMPA has been unable to approve, design, and procure materials and construction services to reconductor these lines before the summer of 2012. As a member city of TMPA, and because of the potentially severe impact to the City, the City proposes to undertake the project; and WHEREAS, an immediate purchase and ordering of the materials covered in this ordinance is necessary, without any delay, because of the lag time involved in the production and the delivery of the materials to the City in order for the City to then construct and secure the conductor; and it is in the interests of the public health and safety to do so; and WHEREAS, the City Council finds and concludes that due to the circumstances recited requirements and prerequisites that are required by Ordinance No. 2009-189 regarding this procurement; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described bid for the materials, equipment, supplies or services as shown in the "Bid Proposal" submitted therefor; 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 preamble hereinabove is hereby adopted and is incorporated herewith for all purposes pertinent, as a part of this ordinance. SECTION 2. The numbered items in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposal" on file in the office of the City Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: BID ITEM NUMBER NO VENDOR AMOUNT 4880 Various Stuart C. Irby . Exhibit A SECTION 3. By the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the person submitting the bid 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 Bid Invitations, Bid Proposals, and related documents. SECTION 4. Should the City and the winning bidder wish to enter into a formal written contract as a result of the acceptance, approval, and awarding of the bid, the City Manager or his designated representative is hereby authorized to execute a written Contract in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Bid Proposal and the related documents thereto, and to further extend that Contract as determined to be advantageous to the City of Denton, Texas. SECTION 5. 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, Texas under the Purchase Order to the City Manager of the City of Denton, Texas, or his designee. SECTION 6. By the acceptance and approval of the above enumerated bid, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bid. SECTION 7. All actions taken by Staff regarding the purchase of the goods referenced hereinabove are hereby approved, ratified and confirmed; and this Ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this day of , 2012. ________________________________ MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY By: APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY By: _________________________________ 3-ORD-BID 4880 Exhibit A BID # 4880 DATE: December 2, 2011 Annual Contract for Electric Transmission Conductor -Suwannee Est. ItemDESCRIPTIONVENDOR Annual Qty Stuart C. Irby Co. Ft. Worth, Principle Place of Business: TX Wire, 959.6 Bare Aluminum Conductor, Class ACSS/TW, 22 D.C. resistance 0.0172 Ohm/1000 1130000$2.248 Rated breaking ft. @ 20°C, strength 33,100 lbs . (Code name on 5,000 ft. minimum standard returnable steel reels). 226Reel Deposit$2,400.00 10,400'/steel Notes reel Total Wire Cost$292,240 Total Wire Cost with Reel$354,640 Reel Return$62,400 Delivery22-24 wks Authorized DistributorYes AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: Human Resources ACM: Jon Fortune SUBJECT Consider adoption of an ordinance approving a salary increase for George C. Campbell under the performance review provision of his employment agreement with the City; authorizing the expenditure of funds; and providing an effective date. BACKGROUND On December 12, 2011, the Council reviewed the accomplishments and goals of the City Manager in a closed meeting. During this meeting, the Council discussed providing a 2% increase to base pay for the City Manager as a result of his performance, retroactive to October 1, 2011. The attached ordinance authorizes this recommendation. OPTIONS Approve the ordinance as proposed, not approve the ordinance, or make modifications . EXHIBITS Ordinance Approving Salary Increase for Campbell Respectfully submitted: ______________________________ Carla Haggmark-Romine Director of Human Resources AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: Human Resources ACM: Jon Fortune SUBJECT Consider adoption of an ordinance approving a salary increase for Anita Burgess under the performance review provision of her employment agreement with the City; authorizing the expenditure of funds; and providing an effective date. BACKGROUND On December 13, 2011, the Council reviewed the accomplishments and goals of the City Attorney in a closed meeting. During this meeting, the Council discussed providing a 2% increase to base pay for the City Attorney as a result of her performance, retroactive to October 1, 2011. The attached ordinance authorizes this recommendation. OPTIONS Approve the ordinance as proposed, not approve the ordinance, or make modifications . EXHIBITS Ordinance Approving Salary Increase for Burgess Respectfully submitted: ______________________________ Carla Haggmark-Romine Director of Human Resources AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: Human Resources ACM: Jon Fortune SUBJECT Consider adoption of an ordinance approving a salary increase for Robin A. Ramsay under the performance review provision of his employment agreement with the City; authorizing the expenditure of funds; and providing an effective date. BACKGROUND On December 13, 2011, the Council reviewed the accomplishments and goals of the Municipal Court Judge in a closed meeting. During this meeting, the Council discussed providing a 2% increase to base pay for the Municipal Court Judge as a result of his performance, retroactive to October 1, 2011. The attached ordinance authorizes this recommendation. OPTIONS Approve the ordinance as proposed, not approve the ordinance, or make modifications . EXHIBITS Ordinance Approving Salary Increase for Ramsay Respectfully submitted: ______________________________ Carla Haggmark-Romine Director of Human Resources AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: Transportation Operations ACM: Jon Fortune ______________________________________________________________________________ SUBJECT Consider adoption of an ordinance approving a Commercial Operator Airport Lease Agreement between the City of Denton, Texas and First Financial Resources, Inc.; and providing an effective date. Council Airport Committee recommends approval (3-0). BACKGROUND First Financial Resources, Inc. owns an 8,000 square foot hangar constructed on an Airport ground lease first approved in September 1987. Hangar enlargement and renovations were constructed by First Financial Resources early in 2010. The lease has a primary term of twenty- three (23) years with three (3) consecutive options to renew for a five (5) year period each. The primary term of twenty-three (23) years would have expired on September 15, 2010; however, it was extended by City Council action to a new expiration date of January 13, 2012, to allow staff time to complete a revision of the standard ground lease document and to negotiate a new lease with First Financial Resources. First Financial Resources, Inc. has agreed to the terms and conditions and is in the process of signing the original lease agreement. A copy of the signature sheet of the lease agreement will be provided at the January 10, 2011, Council Meeting. The lease attached to the proposed ordinance will authorize acceptance by the City providing a twenty (20) year term and extending reversion of the property improvements to the end of the new lease period. The lease rate includes an amount to compensate for the value of the property improvements that would have reverted to City ownership. Other terms and conditions have been included to accommodate the current use of the hangar which was significantly renovated in 2010. FISCAL IMPACT The ground lease rate for First Financial Resources, Inc. has escalated through Consumer Price Index adjustments since the inception of the lease to a current rate of $0.1148 per square foot for an annual rate of $2,745. A new lease rate of $0.5569 per square foot annually ($13,318.26) which includes compensation to the City for the value of improvements made to the property under the terms for reversion has been accepted by First Financial Resources, Inc. Agenda Information Sheet January 10, 2012 Page 2 of 2 PRIOR ACTION (COUNCIL, BOARDS, COMMISSIONS) On September 7, 2010, the City Council approved the first six (6) month lease extension to the agreement with First Financial Resources, Inc. On March 1, 2011, a second amendment for a three (3) month lease extension was approved by City Council. On June 7, 2011, a third amendment for a four (4) month lease extension was approved by City Council. On October 4, 2011, a fourth amendment for a three (3) month lease extension was approved by City Council. On January 3, 2012, the Council Airport Committee unanimously approved this item for Council consideration. RECOMMENDATION Airport staff recommends approval of the twenty (20) year property lease for First Financial Resources, Inc. EXHIBITS Draft Council Airport Committee Meeting Minutes Ordinance Respectfully submitted, Quentin Hix Airport Manager City Council Airport Committee Tuesday, January 3, 2012 Draft Meeting Minutes After determining that a quorum is present, the Airport Committee of the Denton City Council will convened in a regular meeting on Tuesday, January 3, 2012, at 1:35 p.m. in the City Hall Conference Room, 215 E. McKinney Street, Denton, Texas to consider the specific agenda items listed below: PRESENT: Council Member Jim Engelbrecht, Mayor Pro Tem Pete Kamp, and Council Member Chris Watts. STAFF PRESENT: Jon Fortune, Assistant City Manager; Bryan Langley, Chief Financial Officer; John Knight, Deputy Attorney; Mark Nelson, Director of Transportation; Quentin Hix, Airport Manager; Paul Williamson, Real Estate and Capital Support Manager, Pamela England Real Estate Specialist, and Theresa Jaworski, Recording Secretary. OPEN MEETING 4) Receive a report, hold a discussion and provide a recommendation regarding an ordinance authorizing the City Manager, or his designee, to execute on behalf of the City of Denton an Airport Lease Agreement between the City of Denton, Texas and First Financial Resources, Inc. for the property located at 910 Aeronca at the Denton Municipal Airport; and providing an effective date. Airport Manager Quentin Hix gave an update on the status of the First Financial Lease Agreement. The current extension expiDepartment has approved the lease as to form and currently the lease is in the hands of First Financial for review and approval. The First Financial legal department has no questions or concerns and has forwarded the agreement for signatures. Following a short discussion about the terms and conditions of the lease, Mayor Pro Tem Kamp motioned that the Committee approve th by a second from Council Member Watts. Motion carried unanimously. AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Phil Williams at 349-8487 ACM: Jon Fortune SUBJECT Consider adoption of an ordinance rejecting any and all competitive proposals for a public works contract for the construction of the Bonnie Brae Substation Masonry Fence for the City of Denton (Bid Number 4811), or take other appropriate action with regard to such proposals; and providing an effective date. BID INFORMATION The Bonnie Brae Masonry Fence Project, Request for Proposal (RFP), was released to the public on October 20, 2011. The project for which proposals are requested is to construct a concrete and masonry perimeter fence for the Bonnie Brae Substation located at 1221 Bonnie Brae Street, Denton, Texas 76201. The fence was designed with drilled piers and grade beams as the foundation. Concrete masonry units were requested to be used to construct an above-grade structural wall. A Leuders Limestone veneer was requested to be installed on the outside and top of the fence. The west section of the fence foundation included a concrete retaining wall as part of the grade beams. The total length of the fence is approximately 1,016 feet. The project also included clean up, compacting, regrading, and restoration of the silt fences after the fence was completed. The contractor was required to provide all concrete, reinforcing, and masonry materials for the fence except for the Leuders Limestone. Proposals were due on November 3, 2011. There were a total of ten (10) proposals received, with pricing ranging from a low of $258,626 to a high of $738,194. The proposal pricing summary is enclosed as Exhibit 1. As this was an RFP, the evaluation team met and conducted a weighted evaluation, ranking the proposals based on the following factors: 15% - Indicators of Probable Performance, Delivery30%, Compliance with specifications, quality, reliability and characteristic to meet stated needs25%, Price and Total Cost of Ownership30%. The evaluation results are also enclosed as Exhibit 2. On November 14, 2011, the PUB approved staff initial recommendation to award this project to Ratliff Hardscape. Once the evaluation process was completed, it was apparent that the lowest priced respondent was not the highest ranked proposal. There were only minor differences in the analysis of the top After closer evaluation, staff was concerned that the substantially higher pricing of some proposals was not appropriately considered in the evaluation criteria. As a result, staff has reassessed the evaluation criteria and determined that Agenda Information Sheet January 10, 2012 Page 2 the project should be re-solicited and combined with other like projects to gain more economies of scale. Staff has notified the Public Utility Board (PUB) of this change and received no objections. Additionally, the vendors have also been notified. Since proposals for a new combined project will be solicited, staff is recommending the rejection of all proposals for this project. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On November 14, 2011, the PUB Ratliff Hardscape by a unanimous vote of 7-0. Subsequent to this vote, staff is recommending that the project be re-solicited and combined with other like projects to gain more economies of scale. This will require the City Council to reject all proposals. The PUB members have been notified of this action and they have not indicated any objection to this approach. RECOMMENDATION Staff recommends the rejection of all proposals submitted. However, the City Council, at its discre ESTIMATED SCHEDULE OF PROJECT The RFP documents specified that the construction of the fence be completed on or before March 15, 2012. FISCAL INFORMATION There is no financial impact since no dollar amount will be awarded. EXHIBITS Exhibit 1: Proposal Pricing Summary Exhibit 2: Evaluation Ranking Sheet Exhibit 3: Public Utilities Board Minutes Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-Bid 4811 Exhibit 2 RFP 4811 - Evaluation Bonnie Brae Substation Masonry Fence November 7th, 2011 Initial Ranking/Score 81.681st Ratliff Hardscape - Lewisville, TX 80.962nd Pete Durant & Associates, Inc. - Fort Worh, TX 80.843rd RBR Construction, Inc. - Weatherford, TX 80.204th Caliber Construction, Inc. - Denton, TX 76.335th CPS Civil - Duncanville, TX 75.516th Can-Fer Utility Services, Inc. - Grandprairie,TX 73.677th Quality Excavation, Ltd. - Aubrey, TX 73.588th IDG Services, Inc. - Richardson, TX 72.009th Concord Commercial Services, Inc. - Balch Springs, TX 68.8210th Allbrite Construction - San Antonio, TX The top four finalists will be sent a BAFO letter to determine the overall best value to the city. Exhibit 3 DRAFT MINUTES 1 PUBLIC UTILITIES BOARD 2 3 November 14, 2011 4 5 After determining that a quorum of the Public Utilities Board of the City of Denton, Texas is 6 present, the Chair of the Public Utilities Board will thereafter convene into an open meeting on 7 Monday, November 14, 2011 at 9:00 a.m. in the Service Center Training Room, City of Denton 8 Service Center, 901-A Texas Street, Denton, Texas. 9 10 Present: Chair Dick Smith, Vice Chair Bill Cheek, Randy Robinson, John Baines, Phil 11 Gallivan, Barbara Russell and Leonard Herring 12 13 Ex Officio Members: Howard Martin, ACM Utilities 14 15 Absent excused: George Campbell, City Manager 16 17 OPEN MEETING: 18 19 CONSENT AGENDA: 20 21 Approval of the Consent Agenda authorizes the Assistant City Manager of Utilities, or his 22 designee, to implement each item in accordance with the staff recommendations. The Public 23 24 opportunity to raise questions regarding these items prior to consideration. 25 26 7) Consider a recommendation of an approval to award a contract for construction of the Bonnie 27 Brae Substation concrete and masonry fence in accordance with the specification for RFP 28 #4811 to Ratliff Hardscape, Ltd., whose business address is 1740 Midway Road, Lewisville, 29 Texas 75056, in the total estimated expenditure amount of $438,736.20. 30 31 Herring stated that he understands the rating process of the bids but it seems that the low bid is 32 $100k less than the bid that is recommended. Is the bidder recommended that much better than 33 the low dollar bidder. Chuck Sears, Engineering Division Manager, answered yes. Sears then 34 stated that the low bid firm had not completed a great deal of wall construction compared to the 35 one that is being recommended. There is nothing comparable in the experience and background 36 level. The size of the firm and types of projects that they have completed do not compare to the 37 other firms. The criterion was evaluated independently and the points came out for the firm that 38 was selected. Gallivan asked if there was a difference in materials. Sears stated there was not. 39 The materials were specified, it was based on experience level. 40 Board Member Robinson moved to approve item 7 with a second from Board Member 41 Russell. The motion was approved by a 7-0 vote 42 43 44 Adjournment at 10:59am ORDINANCE NO. ________________ AN ORDINANCE REJECTING ANY AND ALL COMPETITIVE PROPOSALS FOR A PUBLIC WORKS CONTRACT FOR THE CONSTRUCTION OF THE BONNIE BRAE SUBSTATION MASONRY FENCE FOR THE CITY OF DENTON (BID NUMBER 4811), OR TAKE OTHER APPROPRIATE ACTION WITH REGARD TO SUCH PROPOSALS; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City has solicited, received and tabulated competitive bids for the construction of Bonnie Brae Substation Masonry Fence ProjectRFP Number 4811) in accordance with the procedures of State laws and City ordinances; and WHEREAS, the City Council has determined that it is in the best interest of the City that the herein described bids should be rejected; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The following competitive bids for the construction of public works or Request for led according to the request for proposal number assigned herein (for the construction of a the Bonnie Brae substation Masonry Fence RFP Number 4811) are hereby rejected: RFP NUMBER CONTRACTOR AMOUNT 4811 Concord Commercial Services $ 258,626.18 Caliber Construction, Inc. $ 349,560.00 RDR Construction, Inc. $ 443,000.00 Ratliff Hardscape $ 438,736.64 CPS Civil $ 484,900.00 Pete Durant and Associates, Inc. $ 488,000.00 IDG Services, Inc. $ 497,909.00 Quality Excavation, Ltd. $ 502,689.00 Allbrite Construction $ 716,770.00 Can-Fer Utility Services Inc. $ 738,194.00 SECTION 2. The City Manager is hereby authorized to execute all necessary documents for the rejection of said bids. SECTION 3. 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 RFP 4811 to the City Manager of the City of Denton, Texas, or his designee. SECTION 4. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the _____ day of _________, 2012. ____________________________________ MARK A. BURROUGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: __________________________________ APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: ______________________________ 5-ORD-RFP 4811 AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: Planning and Development ACM: Fred Greene SUBJECTS11-0002 (Lake Dallas Storage) Consider adoption of an ordinance of the City of Denton, Texas, approving a Specific Use Permit (SUP) to allow for the drilling and extraction of natural gas from an underground storage formation on property located within a Neighborhood Residential 4 (NR-4) zoning and use district on approximately 2.066 acres. The subject property is generally located south of McKinney Street, approximately 900 feet west of Trinity Road; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, severability and an effective date. (S11- 0002) The Planning and Zoning Commission recommends approval (3-2). PROPOSAL The Applicant, New Tech Global (on behalf of Atmos Energy Corporation), is requesting approval of an SUP to allow for the drilling and extraction of natural gas from an underground storage formation on the subject site. The storage formation is only used to store natural gas or other gaseous material. The storage formation is not intended to produce natural gas, nor is there any fracking done to this type of development. The proposed storage formation will not increase the natural gas storing capacity on the site and will be in addition to eight (8) existing storage wells that are located on the adjacent property to the west of the subject site. Per the Applicant, this additional storage well (when combined with those existing 8 wells) will improve efficiency of retrieving the natural gas that is stored underground. No production gas wells will be drilled on the subject site via this SUP, and any future drilling of any additional wells will require City Council approval via a SUP modification. BACKGROUND The subject property has existing subsurface development that is currently being used by Atmos Energy Corporation for the storage of natural gas. According to the Applicant, the site was previously used to extract oil and natural gas dating back to the 1950s. After production activities ceased, the subsurface development was converted to a natural gas storage reservoir. The Atmos Energy Corporation currently operates the existing 8 storage gas wells, and a gas collection and processing facility on the adjacent property to the west of the subject site. These eight (8) existing storage wells are used to inject natural gas to existing under-ground reservoirs that are located below the adjacent property and the subject property. The storing of the gas occurs in the summer months when natural gas demand is low, and is then retrieved and treated for distribution during the winter months as usage, and demand increases. Agenda Information Sheet January 10, 2012 Page 2 Seven (7) public notices were sent to property owners within 200 feet of the subject site (Exhibit 6). Eleven (11) courtesy notices were also sent to residents within 500 feet of this proposal. As of this writing, staff has received one (1) property owner response in opposition to the proposed rezoning request representing 8.14% of the area within 200 feet of the subject site. PRIOR ACTION/REVIEW November 2, 2011 Planning & Zoning Commission Public Hearing December 6, 2011 City Council Meeting December 13, 2011 City Council Meeting OPTIONS 1.Approve as submitted. 2.Approve subject to conditions. 3.Deny. 4.Postpone consideration. 5.Table item. RECOMMENDATION APPROVAL The Planning and Zoning Commission recommends of this request (3-2) APPROVAL The Development Review Committee recommends , subject to conditions. EXHIBITS 1.Staff Report 2.Site Location/Aerial Map 3.Zoning Map 4.Future Land Use Map 5.Letter From Applicant 6.Notification Map 7.Site Plan 8.Site Photos 9.Planning and Zoning Commission, November 2, 2011, Meeting Minutes Email Correspondence 10. Ordinance 11. Agenda Information Sheet January 10, 2012 Page 3 Prepared by: Nana Appiah, AICP Senior Planner Respectfully submitted: Mark Cunningham, AICP, CPM Director of Planning and Development EXHIBIT 1 CITY OF DENTON DEVELOPMENT REVIEW COMMITTEE STAFF REPORT P&Z Date: November 2, 2011 TYPE: Specific Use Permit CC Date: December 6, 2011 PROJECT #:S11-0002 December 13, 2011 January 10, 2012 Project Number: S11-0002 Request: A Specific Use Permit (SUP) to allow for the drilling and extraction of natural gas from an underground storage formation. Applicant: New Tech Global Property Owner: 5420 LBJ Freeway, Suite 1700 Dallas, TX 75240 Location: The property is located south of McKinney Street, approximately 900 feet west of Trinity Road (S11-0002). Size: 2.066 acres ± Zoning Designation: Neighborhood Residential 4 (NR-4) Future Land Use: Neighborhood Centers Case Planner: Nana Appiah, AICP DRC Recommendation: The Development Review Committee (DRC) recommends Approval of S11-0002 subject to conditions. Summary of Analysis: In accordance with Sections 35.5.2.2 and 35.22.3 of the Denton Development Code (DDC), gas well drilling and production are permitted with an SUP within the NR-4 zoning district. Pursuant to Section 35.6.4 of the DDC, a SUP may be granted if the proposed use conforms (or can be made to conform through the use of conditions) to the standards established in the NR-4 zoning district. Section 35.6.4.B of the DDC also provides standards by which a SUP may be granted. Below are staff’s analyses of these standards: B. A specific permit shall be issued only if all of the following conditions have been met: 1.That the specific use will be compatible with and not injurious to the use and enjoyment of other property nor significantly diminish or impair property values within the immediate vicinity; Granting this SUP would not be injurious to the use and enjoyment of other property nor significantly diminish or impair property values within the immediate vicinity. This request is to allow for the drilling and extraction of natural gas from an underground storage formation. There are similar wells surrounding the site. Currently, there are no residential properties located within one thousand (1,000) feet to the south, east and west of the site. However, there is a metal building located to the north of the subject site, and is within 1,000’ of the site. The property owner, Mr. Khosrow Sudegian, stated at the Planning and Zoning Commission meeting that the metal structure is being used as a residential rental property. Notwithstanding repeated requests, Mr. Sadegian has not submitted any documentation to corroborate the use of the metal structure. Email communication to and from the applicant, and to Mr. Sedegian is attached as Exhibit 11. Per Section 35.22.5 of the City of Denton Development Code, any proposed residential structure or other protected use shall be required to be set back a minimum of 250 feet from the gas well. 2.That the establishment of the specific use will not impede the normal and orderly development and improvement of surrounding vacant property; Granting the SUP would not impede the normal and orderly development of the surrounding undeveloped property. As previously stated, there is a metal structure located north of the site. However, staff has not been able to determine the use of this structure. Currently, the City of Denton does not provide any utility services to the structure. The immediate property to the south is undeveloped. The property to the west is developed as the central treatment facility for the operation of the existing surrounding storage wells. The property to the east is undeveloped, however, there is a residential structure farther east to the site. This residential property is located more than a 1,000 feet from the site. It is staff determination that approval of this SUP should not deter further development of the surrounding property. 3.That adequate utilities, access roads, drainage and other necessary supporting facilities have been or will be provided; The DRC has reviewed this proposed project and have determined that adequate utilities, access road, drainage, and other necessary supporting facilities have been or will be provided. 4.The design, location and arrangement of all driveways and parking spaces provides for the safe and convenient movement of vehicular and pedestrian traffic without adversely affecting the general public or adjacent developments; The design, location and arrangements of the driveway will not adversely affect the general public or adjacent development. Currently, the site has one (1) driveway entrance onto McKinney Street. The DRC has reviewed this vehicular access and have determined that the driveway must be widened to provide safe and convenient access. This improvement shall be required prior to issuance of a gas well site plan. 5.That adequate nuisance prevention measures have been or will be taken to prevent or control offensive odor, fumes, dust, noise and vibration; Except during the initial drilling of the well, dust, noise, and vibration should not occur on this site. Per Section 35. 22.12 of the DDC, the operator of the gas wells are required to provide a written notice to the City and residences within one thousand feet of the intention to re-work the well. This notice shall be given at least 10 days before the re-work activity begins. In addition, such operations shall conform to Sections 35.22.5 and 35.12.11 of the DDC. This Sections of the Code establishes standards such as controlling noise, fumes and use of odorous materials on property. Further, Section 20 of the City’s Nuisance Code Ordinance also regulates dust, noise, and odor control during constructions. 6.That directional lighting will be provided so as not to disturb or adversely affect neighboring properties. According to the applicant, the site requires little lighting. Any proposed lighting shall comply with the standards and regulations of Section 35.13.12 of the DDC, which limits the illumination of light onto adjacent property. 7.That there is sufficient landscaping and screening to ensure harmony and compatibility with adjacent property. Adjacent properties to the south and east are vacant. There is a metal building located within 1,000’ of the site. Due to the structure’s metal façade, the compatibility requirement does not apply. However, staff is recommending an eight (8) foot screening fence along the perimeter of the drilling site. This fence will enhance compatibility of the site to adjacent future development. C.That adequate capacity of infrastructure can and will be provided to and through the subject property. The DRC has reviewed this request and determined that adequate capacity of infrastructure can and will be provided to and through the subject property. D.That the Special Use is compatible with and will not have an adverse impact on the surrounding area. When evaluating the effect of the proposed use on the surrounding area, the following factors shall be considered in relation to the target use of the zone: 1.Similarity in scale, bulk, and coverage. The existing gas wells operation is smaller in scale, bulk and coverage to the uses on the adjacent property to the west. The properties to the south, and east are vacant. The use of the property to the north is undocumented. Except occasional re-work of the wells, activities on the site are minimal and should not adversely affect the surrounding uses. 2.Generation of traffic and effects on surrounding streets. Increases in pedestrian, bicycle, and mass transit use are considered beneficial regardless of capacity of facilities. Staff does not anticipate increase in vehicular traffic via the granting of this requested SUP. There may be occasional truck traffic during re-work of the site. However, noise generating from vehicular traffic should not be different from current existing vehicular traffic on the adjacent property to the west. Both the subject site and the adjacent property are currently used as the central operating facility, and will utilize one driveway to the site. 3.Architectural compatibility with the impact area. The visible elevated structures on the site are the existing central procession operating facility located to the west of the site. This proposed SUP will not have elevated structures that required it to be compatible with existing facilities. 4.Air quality, including the generation of dust, odors, or other environmental pollutants. Except during drilling of the well; minimum noise, dust, or other pollutants will emanate from the site. Operational activities on the site are required to comply with Sections 35.22.5 and 35.12.11 of the DDC. These Sections of the Code establish standards for controlling noise, fumes and use of odorous materials on property. 5.Generation of noise, light, and glare. Development or operation of current activities on the site shall be required to comply with Sections 35.22.5 and 35.12.11 of the DDC. These Sections of the DDC regulate noise, light and glare emanating from property. 6.The development of adjacent properties as envisioned in The Denton Plan. Future land use designation of the property to the west is Industrial Center. Per the Denton Plan, “Industrial Centers” future land use areas are intended to provide locations for a variety of work processes and work places such as manufacturing, warehousing and distributing, indoor and outdoor storage, and a wide range of commercial and industrial operations. The industrial centers may also accommodate complementary and supporting uses such a convenience shopping and child-care centers. Adequate public facilities are criterion by which zoning is granted. It is staffs determination that approval of the SUP will not impede development of the adjacent site for industrial uses. The properties to the north are located in the “Existing Land Use” future land use designation. The “Existing Future Land Use” areas are typically established residential areas, which new development should respond to existing development with compatible land uses, patterns and design standards. There is a metal structure on site; however, staff has been unable to determine this structure’s use. Therefore, it is staffs determination that approval of this SUP will not change the character or pattern of a development on the adjacent property. Farther north to the site, approximately 1900 feet, is a mobile home development. However, McKinney Street and a hill separate the mobile home park from the proposed well site. The properties to the south and east are in the “Neighborhood Center” future land use designation. Per the Denton Plan, these areas are to be developed in conventional patterns or may be developed in a pattern of ‘neighborhood centers’. Neighborhood centers are oriented inwardly, focusing on the center of the neighborhood and containing facilities vital to the day-to-day activity of the neighborhood. A neighborhood center might contain a convenience store, small restaurant, personal service shop, church or synagogue, daycare, individual office space, a small park and perhaps an elementary school. It is staff determination that approval of the SUP will not impede development of the adjacent site for intended uses within the Neighborhood Center. 7.Other factors found to be relevant to satisfy the requirements of this Chapter. The DRC has considered factors necessary for approval of this site and have applied appropriate conditions of approval. Findings of Fact 1.The request is a Specific Use Permit to allow the development of gas well drilling and production on 2.066 acres. The surface site is currently undeveloped. 2.The site is within the Neighborhood Center Future Land Use District. “Neighborhood Centers” 3.Per Element 3 of the Denton Plan, future land use areas are to be developed in conventional patterns or may be developed in a pattern of ‘neighborhood centers’. Neighborhood centers are oriented inwardly, focusing on the center of the neighborhood and containing facilities vital to the day-to-day activity of the neighborhood. A neighborhood center might contain a convenience store, small restaurant, personal service shop, church or synagogue, daycare, individual office space, a small park and perhaps an elementary school. 4.The subject site is not located within a Historic or Conservation district. 5.The subject site has vehicular access to McKinney Street. McKinney Street is classified as Primary Arterial per the City of Denton Mobility Plan. 6.The anticipated transportation demand for this development is very minimal once the gas storage well is drilled and operating. 7.This site is not currently served by the City of Denton water or sewer systems. 8.According to the Applicant, the estimated water demand for the well drilling would be approximately 6,000 barrels (252,000 gallons). In addition, that applicant has stated that there is no need for sanitary services for the site. 9.According to the City of Denton Fire Department, this property is serviced by the City’s Fire Station #2, located at 2209 East McKinney Street. Planning and Zoning Commission Recommendation The P&Z recommended APPROVAL of this Specific Use Permit (3-2) at its meeting on November 2, 2011 subject to the following conditions: 1.The site plan as submitted and shown in Exhibit 6 shall guide the development of the drilling and extraction of natural gas from an underground storage formation. 2.The applicant shall install an eight (8) foot screening fence along the perimeter of the gas well operation area. Materials for the construction of this screening fence shall be of masonry, metal, wood, vinyl, PVC, or composite and shall be maintained on state of good repair at all times. 3.The screening fence, as conditioned, shall be constructed within 30 days after drilling of the well is completed. 4.If the fence is damaged or removed during re-work operations, the operator of the gas well shall be responsible for replacing the damaged or removed portions of the fence. Development Review Committee Based on the information provided by the applicant and a recent site visit, the Development IS CONSISTENT Review Committee finds that with the recommended conditions, the request IS CONSISTENT with the surrounding land uses and general character of the area, with the IS CONSISTENT Denton Plan, and with the Denton Development Code. Based on the findings-of-fact, the Development Review Committee (DRC) recommends APPROVAL of S11-0002 with conditions as stated above. GENERAL NOTES NOTE: Approval of this request shall not constitute a waiver or variance from any applicable development requirement unless specifically noted in the conditions of approval and consistent with the Denton Development Code. NOTE: All written comments made in the application and subsequent submissions of information made during the application review process, which are on file with the City of Denton, shall be considered to be binding upon the applicant, provided such comments are not at variance with the Denton Plan, Denton Development Code or other development regulations in effect at the time of development. Surrounding Zoning Designations and Current Land Use Activity: Northwest: North: Northeast: ETJ:ETJ:ETJ: VacantVacant./Metal Structure,/ /Mobile Vacant/Agriculture Home Park West:East: Subject Property: RD-5/IC-G: NR-4/NRMU: NR-4 Vacant/Gas WellsVacant/Residential Structure Vacant Southwest: South: Southeast: IC-G/NRMU-12: ETJ/NR-2NR-2: VacantVacant property Vacant Source: City of Denton Geographical Information System and site visit by City staff Comprehensive Plan: A.Consistency with Goals, Objectives and Strategies: The subject site is located in the “Neighborhood Centers” future land use designation. Per the Neighborhood Centers Land Use Element of the Denton Plan, should develop in conventional patterns or may be developed in a pattern of ‘Neighborhood Centers’. The Plan recommends Neighborhood Centers to be oriented inwardly, focusing on the center of the neighborhood and containing facilities vital to the day-to-day activity of the neighborhood. A neighborhood center might contain a convenience store, small restaurant, personal service shops, church or synagogue, daycare, individual office space, a small park and perhaps an elementary school. Staff finds the location of this proposed well consistent with the existing development patterns of the surrounding area. No residential development exists within immediate vicinity of the site. The property to the west is developed for similar uses. It is also designated as Industrial Center Future land use. The property to the south and immediate east are currently vacant. There is a metal building located to the north. Staff has requested that the property owner provide documentation showing that it is a habitable structure. B.Land Use Analysis: Staff finds this request with recommended conditions of approval compatible with the surrounding land uses. Nearest Elementary, Middle, and High School This request is to allow for the drilling and extraction of natural gas from an underground storage formation. Therefore, the development will not produce any elementary, middle or high school students, and will not impact the associated Independent School District. Nearest Fire and EMS Station Approximate Distance From Name of Station Subject Property Fire Station #2, 2209 East ± 2.4 miles McKinney Street This proposed development has been reviewed for compliance with the 2006 International Fire Code and City Ordinance 2009-098, Section 29-2 Amendments to the Fire Code. The applicant is responsible for compliance with all applicable portions of the Fire Code and City Ordinances even in the absence of review comments. Water and Wastewater Demand and Capacity: A. Estimated Demand and Service Provider: According to the Applicant, the estimated water demand for well drilling would be approximately 6,000 barrels (252,000 gallons). This water would be transported in by the Applicant. B. Available Capacity: Applicant is providing for necessary capacity for the operation. C.CIP Planned Improvements : There are planned CIP water main and sewer main projects along McKinney Street in this area. Roadways/Transportation Network: A.Estimated Demand : Subject Property Estimated Impact Analysis Adequate to Serve (Yes or 2.066 Proposed Demand ± acres No) Minimal Average Annual Yes Subject Property Estimated Impact Analysis Adequate to Serve (Yes or 2.066 Proposed Demand ± acres No) Daily Trips (AADT) B. Available Capacity: The street serving the subject site has adequate capacity. C. Roadway Conditions: McKinney Street is an asphalt pavement street that is in fair condition. McKinney Street is also owned and maintained by TXDOT. D. CIP Planned Improvements: McKinney Street is a TXDOT right-of-way. The City of Denton has no CIP project for this road. Environmental Conditions: There are no Environmental Sensitive Areas (ESAs) on this site. Wells (Public/Private): No public or private portable water wells are proposed for the site. Airports: The subject site is not within the boundaries of the Denton Municipal Airport Overlay District. Electric: No comment Park Facilities: No comment Comments from other Departments: N/A Exhibit 2 – Site Location/Aerial Map Existing Gas Processing Facility Site Exhibit 3 – Zoning Map Existing Gas Processing Facility Site Exhibit 4 – Future Land Use Map Existing Gas Processing Facility Site Exhibit 5 – Letter from Applicant Exhibit 6 – Notification Map Public Notification Date: 10/20/11 200’ Legal Notices sent: 7 500’ Courtesy Notices sent: 11 Number of responses to 200’ Legal Notice: In Opposition: 1 In Favor: 1 Neutral: 0 Exhibit 7 – Site Plan Exhibit 8 – Site Photos Looking north from the site Look south from the site Look east from the site Look west from the site Metal Structure EXHIBIT 9 1neighborhood meetings or discussions with the neighborhood regar 2the City going to protect them. Jackson stated that this request 3that she was not aware of any neighborhood meetings. The opposi 4to Crescent Street, which is also not a part of this plat. Jack 5begun on Emery Street. 6 7The applicants representative was present to speak and stated t 8this time for development. Half of the middle lot has been pave 9lot, a rent house on the other lot and a potential future develo 10proposed newly platted lot. 11 12Reece motioned to approve this request with a second by Lyke. O 13Patrice Lyke "aye", Commissioner Thom Reece "aye", Commissioner 14Commissioner Jay Thomas "aye", and Commissioner Brian Bentley "a 150). 16 B.Hold a public hearing and consider making a recommendation to Cia Specific Use Permit (SUP) to allow gas well drilling and productd within a Neighborhood Residential Mixed Use (NRMU) zoning and us approximately 2.64 acres. The subject property is generally loc east of Interstate 35 West, and west of South Bonnie Brae Streett Gas Wells, Nana Appiah) 17 18Thomas stated that a couple of cards had been received requestin 19applicant requested to postpone this hearing until a date certai 20hearing and requested to entertain a motion to allow a postponem 21certain. 22 23Reece motioned to postpone this item to a date certain of Decemb 24Bentley. On roll call vote: Commissioner Patrice Lyke "aye", Co 25Commissioner Frank Conner "aye", Commissioner Jay Thomas "aye", 26Bentley "aye". Motion approved (5-0). 27 C.Hold a public hearing and consider making a recommendation to th a Specific Use Permit (SUP) to allow gas well drilling and produd within a Neighborhood Residential 4 (NR-4) zoning and use distri acres. The subject property is generally located south of McKin 900 feet west of Trinity Road. (S11-0002, Lake Dallas Storage, N 28 29 301.Appiah stated that the purpose of this gas well is not to extract gas from the Barnett 31Shale. The intent is to inject gas from other locations into th 32Appiah provided a location map indicating that the site is west 33processing facility on that site that is owned by Atmos. Appiah 34map, future land use map, site plan and site photos. Notices we 35by certified mail within 200 feet of the subject site and courte 5 1property owners within 500 feet of the subject site. One respon 2of the request and one response was received in opposition. The 3Committee recommends approval with conditions as follows: The si 4and shown in Exhibit 6 shall guide the development of the storag 5site. The applicant shall install an eight (8) foot screening fe 6gas well operation area. Materials for the construction of this 7masonry, metal, wood, vinyl, PVC, or composite and shall be main 8repair at all times. The screening fence, as conditioned, shall 9days after drilling of the well is completed. If the fence is da 10work operations, the operator of the gas well shall be responsib 11damaged or removed portions of the fence. 12 13The applicants representative was present to answer any questio 14the Commission at that time. 15 16Thomas opened the public hearing. Two people were present to sp 17request. 18 19Khosrow Sadeghin, PO Box 50593, Property Owner 20Charles Heasley, 2709 Charter Oaks Drive, Plano, Texas, Property 21 22The applicants representative addressed the property owners com 23property owner was aware of the intention of Atmos, as discussio 24waterline easement for fire protection, a negotiation for a gas 25preliminary discussions. The applicants representative also st 26indicated that he has production wells on other properties that 27well will not be producing, but for storage. The house on the p 28sometime and that Atmos has been communicating with the property 29that he was aware of the gas well plat. 30 31 32Bentley stated that this is an interesting case because there is 33rights and another owner who has mineral rights. The Specific U 34requested for the mineral rights. Cunningham clarified and stat 35that the SUP is for the mineral rights. The request is not extr 36gas beneath the surface. Bentley stated he understood that part 37who has to use the easements and cross over the top surface of a 38the gas underground. Bentley noted it was an unusual case and s 39surface owner is not in agreement. Cunningham stated that from 40response that Atmos and the property owner have a contract, but 41discussion for this item. Bentley stated that the Denton Develo 42mineral interest as well as surface development. Cunningham res 43discuss a matter of right, but it does discuss mineral and surfa 44 45Bentley directed the question to the applicants representative 46land owner. The applicants representative stated that Atmos ha 6 1Atmos would have to negotiate with the landowner to put the 20 f 2site. If the owner does not want to negotiate, Atmos could cond 3the facility. The applicants representative stated that they d 4try to be good neighbors. 5 6Sadeghin stated that he did not have an agreement with Atmos. T 7property and Sadeghin stated that Atmos has an easement. Sadegh 8taking care of that easement and now Atmos claims that they are 9Sadeghin stated he has requested a scope of the project and that 10by Atmos to the northeast. Sadeghin stated that he has a devalu 11Atmos has not discussed anything new with him, though he has req 12Sadeghin that Atmos has completed the road and asphalt on the ea 13 14Conner questioned if Sadeghin owned the mineral rights to the pr 15owns the mineral rights below 5,000 feet. Lyke stated that the 16rights issue is something that needs to be worked out. Sadeghin 17regarding an incident about 7 years ago and surrounding properti 18 19The Commission ensued in additional discussion regarding the min 20Thomas stated the discussion was getting off topic. Cunningham 21rights is a civil matter. What is before the Commission is a re 22this storage well. Leal also stated that the dispute is a civil 23owner had the right to seek private legal counsel. 24 25Bentley questioned if the owner of the property had any current 26Sadeghin stated that development was not a consideration at this 27surrounding property owners were interested in development 3 or 28that the way his question ties in is that the SUP is not suppose 29development of adjacent property. 30 31Bentley stated that he would move to table or continue the item 32the surface and mineral owners. Cunningham again stated that th 33an SUP to construct a gas well storage site. Bentley stated he 34this meeting on this item without additional information for ass 35damaging to the adjacent properties. Thomas stated that the par 36quiet narrow and encouraged the Commission to stay at the task a 37 38Bentley made a motion to table the item with a second by Lyke. 39Patrice Lyke "aye", and Commissioner Brian Bentley "aye". Commis 40Commissioner Frank Conner "nay", and Commissioner Jay Thomas "na 41 42Bentley stated he would like more of a definition from legality 43underground site is contained to just two acres. Lyke stated th 44information from staff and questioned if the Commission should b 45and what parameters to the rights exist. Cunningham stated that 46again into a civil matter and referred to a case of right at Ray 7 1the Commission would know if this use is not going to spill out 2properties owned by different people. Cunningham responded that 3answer that, it is true of any development. No parameter can be 4 5Conner motioned approval of this request with conditions present 6Reece. On roll call vote: Commissioner Thom Reece "aye", Commis 7and Commissioner Jay Thomas "aye". Commissioner Patrice Lyke "na 8Brian Bentley "nay". Motion passed (3-2). 9 10 D.Hold a public hearing and consider making a recommendation to Cia proposed amendment to Subchapter 4 of the Denton Development Code regardinga governmental entity development review track. (DCA10-0011, Gove Development Review Process, Brian Lockley) 11 12Lockley stated that the governmental entity development review p 13Independent School District (DISD) in association with the City 14from issues that arose during renovation work by DISD. The curr 15process in place is more for profit entities. This proposed dev 16services for government entities. Lockley provided a list of re 17in the creation of the governmental entities development review 18process flow charts for this proposed development process that w 19completed concurrently throughout the planning and building insp 20Lockley noted the benefits of this proposed process would allow 21issuance for limited purposes such as ground work before the ver 22by the Planning Division. The language for the process would go 23process flow chart would go into the Criteria Manual. Governmen 24DISD, Denton County and internal City of Denton projects. This 25number of concerns over time. 26 27Reece moved approval of this request with a second by Lyke. On r 28Patrice Lyke "aye", Commissioner Thom Reece "aye", Commissioner 29Commissioner Jay Thomas "aye", and Commissioner Brian Bentley "a 300). 31 6.FUTURE AGENDA ITEMS: Under Section 551.042 of the Texas Open Me respond to inquiries from the Planning and Zoning Commission or factual information or recitation of policy, or accept a proposa agenda for an upcoming meeting. 32 33Cunningham stated that a joint City Council and Planning and Zon 34would be coming in 2012 and requested that the Commission inform 35would like to be addressed. 36 37 38Thomas adjourned the meeting at 8:04 p.m. 8 10 EXHIBIT Appiah, Nana K. Landmark Surveyors LLC [landmarksv@aol.com] From: Monday, November 21, 2011 10:13 AM Sent: Appiah, Nana K. To: Re: Atmos Energy Lake Dallas Gas Well Specific Use Permit Subject: Nana, The yellow metal building is the building we showed on our plat, The other building is clearly a dilapidated barn. Does the owner Thanks, Jerald D. Yensan, President Landmark Surveyors LLC. 4238 I-35 North Denton, Texas 76207 PH 940-382-4016 FAX 940-387-9784 www.landmarksurveyors.com * This email and any files transmitted with it are confidential whom they are addressed. If you have received this email in error please notify the system mntended only for the individual named. If you are not the named addressee you should the sender immediately by e-mail if you have received this e-mail by mistake and delete this e-mail from your system. If you are not the intended recipient you are notified that disclosing, copying, distributing or taking any action in reliance on the contents of this information is strictly prohibited. -----Original Message----- From: Appiah, Nana K. <Nana.Appiah@cityofdenton.com> To: 'Landmark Surveyors LLC' <landmarksv@aol.com> Cc: Boykin, Katia D <Katia.Boykin@cityofdenton.com>; John.Manganilla <John.Manganilla@atmosenergy.com> Sent: Mon, Nov 21, 2011 9:58 am Subject: Atmos Energy Lake Dallas Gas Well Specific Use Permit Jerry, During the November 2, 2011, Planning and Zoning Commission meeting for t surrounding site stated that he has a residential rental propertf comments that there were no Protected Uses within a 1,000 foot rAs attached to this email, there are two structures on the site, please verify which of these struc showing the 1,000 foot radius. In addition, please confirm that f the gas well site. Please contact me if you have any questions. Thanks. Nana Appiah, AICP Senior Planner City of Denton, Planning and Development Office: 940-349-8541 Direct:940-349-7785 Fax: 940-349-7707 email: nana.appiah@cityofdenton.com Excellence is never an accident, it is always the result of highcution and the vision to see obstacles as opportunities. 1 Appiah, Nana K. Appiah, Nana K.; 'khosrowsadeghian@yahoo.com' To: Boykin, Katia D Cc: RE: Atmos Energy Lake Dallas Storage (S11-0002) Subject: Nana Appiah, AICP Senior Planner City of Denton, Planning and Development Office: 940-349-8541 Direct:940-349-7785 Fax: 940-349-7707 email: nana.appiah@cityofdenton.com Excellence is never an accident, it is always the result of highcution and the vision to see obstacles as opportunities. Appiah, Nana K. Monday, November 21, 2011 1:53 PM 'khosrowsadeghian@yahoo.com' Boykin, Katia D; Appiah, Nana K. RE: Atmos Energy Lake Dallas Storage (S11-0002) Nana Appiah, AICP Senior Planner City of Denton, Planning and Development Office: 940-349-8541 Direct:940-349-7785 Fax: 940-349-7707 email: nana.appiah@cityofdenton.com Excellence is never an accident, it is always the result of highcution and the vision to see obstacles as opportunities. Appiah, Nana K. Monday, November 14, 2011 1:32 PM 'khosrowsadeghian@yahoo.com' Boykin, Katia D Atmos Energy Lake Dallas Storage (S11-0002) 1 Nana Appiah, AICP Senior Planner City of Denton, Planning and Development Office: 940-349-8541 Direct:940-349-7785 Fax: 940-349-7707 email: nana.appiah@cityofdenton.com Excellence is never an accident, it is always the result of highcution and the vision to see obstacles as opportunities. 2 Appiah, Nana K. Appiah, Nana K. From: Monday, November 21, 2011 4:48 PM Sent: Cox, Ethan To: Boykin, Katia D Cc: RE: Utility Information Subject: Nana Appiah, AICP Senior Planner City of Denton, Planning and Development Office: 940-349-8541 Direct:940-349-7785 Fax: 940-349-7707 email: nana.appiah@cityofdenton.com Excellence is never an accident, it is always the result of highcution and the vision to see obstacles as opportunities. Cox, Ethan Monday, November 21, 2011 4:24 PM Appiah, Nana K. Boykin, Katia D RE: Utility Information Appiah, Nana K. Monday, November 21, 2011 3:28 PM Cox, Ethan Boykin, Katia D Utility Information Nana Appiah, AICP 1 Senior Planner City of Denton, Planning and Development Office: 940-349-8541 Direct:940-349-7785 Fax: 940-349-7707 email: nana.appiah@cityofdenton.com Excellence is never an accident, it is always the result of highcution and the vision to see obstacles as opportunities. 2 AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: Planning and Development ACM: Fred Greene SUBJECTADP11-0009 (Unicorn Lake ESA) Hold a public hearing and consider adoption of an ordinance approving an amendment to Ordinance 2006-348, an Environmentally Sensitive Area Alternative Development Plan for approximately 71.01 acres of land located on the south side of I-35 East, south of Wind River Boulevard and west of Unicorn Lake Boulevard, within a Neighborhood Residential Mixed Use 12 (NRMU-12) zoning district with an overlay district, a Neighborhood Residential 4 (NR-4) zoning district, and a Regional Center Commercial Downtown (RCC-D) zoning district, and legally described as within the M.E.P & P.R.R. Survey, Abstract No. 950 and the B. Lewis Survey, Abstract No. 769 in the City of Denton, Denton County, Texas; 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 (7-0). (ADP11- 0009) BACKGROUND The applicant (Contrast Development) is requesting an amendment to the Tuscan Hills ADP ESA Plan (ADP06-0005 and ADP06-0015) to accommodate the construction of an access road. The request would exchange 0.4 acres which are designated as a natural zone on the Tuscan Hills ADP ESA Plan for approximately 0.58 acres of enhanced social zones within the Unicorn Lake Estates subdivision (Exhibit 5). Enhanced social zones are designed (re-vegetated and spatially laid out) to allow activities that complement a proposed walking trail. These areas are considered to be an active outdoor amenity versus a more natural area where trees and under canopy vegetation are left to take their own course. The social zones are maintained to allow longer sight distances (meaning trimming of trees and clearing of overgrown under canopy vegetation) for aesthetic and safety reasons. Additionally, vegetation is sparser in social zones to increase the visibility in the area. The alignment of Frontier Road (a proposed access road) for the Unicorn Lake Estates subdivision must maintain minimum distances from existing street intersections and align with Bella Lago Drive to the southeast (Exhibit 6). Approval of the final plat for Unicorn Lake Estates is contingent upon the approval of the Frontier Road alignment. The required alignment would cause the road to encroach into an area designated as a natural zone on the Tuscan Hills ESA mitigation plan (Exhibit 7). In exchange, the applicant is proposing the construction of a pproximately 0.58 acres (Exhibit 7). The proposed mitigation is very similar to the social zone approved for Tuscan Hills and would connect the existing retail/office/entertainment uses at the Unicorn Lake development with Unicorn Lake Estates and the existing Wind River Estates subdivisions. The proposed mitigation abuts the remaining natural zone, and native species trees would be planted in areas where gaps in tree canopy exist (Exhibit 7). The construction of the trail and the tree planting would be concurrent with the development of the first residential lots during the second phase of development. The first phase would only include the construction of Frontier Road. The developer would also be responsible for irrigating the trees until such time the trees are established. The 0.58 acre site is part of an approved 5-acre parkland dedication. The planting plan includes a no-planting zone to accommodate the construction of future playground facilities. In summary, the proposed amendment would substitute 0.4 acres of natural mitigation with 0.58 acres of social mitigation. It would provide the additional benefits of pedestrian connectivity between existing and proposed neighborhoods with the Unicorn Lake development, the planting of trees where gaps in tree canopy exist, and compatibility with parkland uses. The ordinance for the Tuscan Hills ADP ESA Plan was approved by City Council in May of 2006 (Ordinance No. 2006-138) as mitigation for the clearing of 22.68 acres of Upland Habitat, development of 0.18 acres of riparian buffers, and reclamation of 0.07 acres of undeveloped floodplain ESA. Since this item was originally approved by the City Council, any amendments to the Plan must also be approved by the City Council. The subject property was heavily treed and 50% of the tree canopy would have otherwise had to be preserved in its natural state (DDC Sec. 35.17.9). The developer of Tuscan Hills offered the preservation of 1.18 acres of the existing Upland Habitat onsite as series of corridors throughout the subdivision, and 10.16 acres of enhanced Upland Habitat located offsite but within the periphery of the proposed Tuscan Hills development. There were two distinct zones within the enhanced Upland Habitat area, with specific planting requirements for each zone (Exhibit 8). The 3.13 acre comprised of a north-south trail system located between Tuscan Hills and Unicorn Lake and the re-vegetation of the area with trees (larger than bare-root seedlings) at a rate of 50 trees per acre. This area was to be a manicured treed zone with minimal underbrush growth for uninterrupted visibility. The - vegetated with bare-root seedlings (350 plants per acre), and to be left unkempt for a more natural habitat. Later in December of 2006, the original ADP ESA Plan was amended (Ordinance No. 2006-348) to adjust the boundary of the natural zone in order to accommodate development of adjacent land to the north. The amendment allowed for the removal of 0.09 acres from the approved mitigation natural zone in exchange for 0.15 acres of new natural zone (Exhibit 9). The change resulted in an increase of 0.06 acres of additional enhanced natural zone. The approved mitigation plan, as amended, included a trail and the planting of 157 trees on 3.13 acres, and the planting of 2,671 bare-root seedlings on 8.21 acres. One hundred and twenty-four (124) public notices were sent to property owners within 200 feet of the subject site (Exhibit 10). Two hundred and forty (240) courtesy notices were also sent to residents within 500 feet of this proposal. As of this writing, staff has received two neutral responses and one response in approval of the request from notified property owners. The response in approval and one of the neutral responses are from property owners within the subject area and as such have not been shown on the map. OPTIONS 1.Approve 2.Approve subject to conditions. 3.Deny. 4.Postpone consideration. 5.Table the item RECOMMENDATION APPROVAL The Planning and Zoning Commission recommended of this application with a vote of 7-0. APPROVAL The Development Review Committee recommends of this request. PRIOR ACTION/REVIEW 1.City Council approved an ADP ESA Plan for Tuscan Hills (Ordinance No. 2006-138), May, 2006. 2.Tuscan Hills Overlay District approved by City Council (Ordinance No. 2006-0139), May, 2006 3.City Council approved an amendment to the Tuscan Hills ADP ESA Plan (Ordinance No. 2006-348), December 2006. 4.Tuscan Hills Overlay District amended to revise minimum required dwelling unit size (Ordinance No. 2007-238), October, 2007. 5.Unicorn Lake Estates site rezoned from Neighborhood Residential 3 (NR-3) to Neighborhood Residential 4 (NR-4) (Ordinance No. 2011-116), July, 2011. 6.Preliminary Plat of Unicorn Lake Estates approved by Planning and Zoning Commission, November, 2010. EXHIBITS 1.Staff Report 2.Alternate Development Plan 3.Site Location/Aerial Map 4.Zoning Map 5.Letter from the Applicant 6.Proposed Overall Amendment to ESA Plan 7.Proposed Mitigation Plan 8.Unicorn Lake Approved ESA Plan 9.Amendment to Approved ESA Plan (Ord. No. 2006-348) 10.Notification Map 11.Property Owner Responses 12.Site Photos 13.Planning and Zoning Commission Minutes 14.Ordinance Prepared by: Cindy Jackson, AICP Senior Planner Respectfully submitted: Mark A. Cunningham, AICP, CPM Planning and Development Director Exhibit 1 PLANNING DEPARTMENT STAFF ANALYSIS CASE NODATE TO BE CONSIDERED: : ADP11-0009 January 10, 2012 LOCATION : The property is located south of Interstate 35E, along both sides of Wind River Lane and both north and west of Clubhouse Drive. APPLICANT: Paul McCracken Kimley-Horn and Associates. 5750 Genesis Court Frisco, TX 75034 OWNERS: Wind Jammer, LTD. ULE, LLC c/o Mr. Bob Shelton c/o Contrast Development 2308 Ranch House Drive Attn: Mr. Terry Mitchell Denton, TX 75210 300 E. John Carpenter Freeway Irving, TX 75062 REQUEST: Hold a public hearing and consider making a recommendation to City Council concerning an amendment to an Alternative Development Plan for an Environmentally Sensitive Area (ESA) Plan. STAFF RECOMMENDATION:approval The DRC recommends of the request for an amendment of the Tuscan Hills ADP ESA Plan (ADP06-0005 and ADP06- 0015) to accommodate the construction of an access road. ZONING DISTRICT: The subject site is located within the Regional Commercial Center Downtown (RCC-D) zoning district, a Neighborhood Residential Mixed-Use (NRMU-12) zoning district with an overlay district, and a Neighborhood Residential 4 (NR-4) zoning district. The purpose of the Regional Commercial Center Downtown zoning district is to create centers of activity including shopping, services, recreation, employment and institutional facilities supported by and serving an entire region. The purpose of the Neighborhood Residential districts is to preserve and protect existing neighborhoods and to ensure that any new development is compatible with existing land uses, patterns, and design standards. COMPREHENSIVE PLAN DESIGNATION: The subject site is designated Regional Mixed Use Centers and Existing Land Use on the Future Land Use map. SITE AND SURROUNDINGS: Northwest: North:Northeast: NR-3 and RCC-D RCC-D RCC-N Single Family Residential and Undeveloped Undeveloped Land, Interstate I-35E Undeveloped Land Subject Property:East: West: RCC-D RCC-D, NR-4, NR-2 NR-3, NR-4 Single Family Residential, Single Family Residential, City Single Family Residential, Proposed Professional Offices, Retail and Parkland, Denton State School, and Unicorn Lakes Estates, Undeveloped Restaurant uses, a Hotel and Jostens, Interstate I-35E, Denton Land Undeveloped Land Regional Medical Center Southwest:South: Southeast: NR-4 NR-2 NR-2 Single Family Residential Denton State School Denton State School Source: City of Denton Geographical Information System and site visit by City staff ANALYSIS: Development Code/ Zoning Analysis: The proposed amendment to the previously approved Alternative ESA plan involves an exchange 0.4 acres which are designated as natural zone on the Tuscan Hills alternative ESA plan for approximately 0.58 acres of enhanced social areas within the Unicorn Lake Estates subdivision (Exhibit 6). The approved ADP ESA Plan deviates from three (3) site design requirements in Subchapter 17 of the Denton Development Code (DDC). They are as follows: 35.17.7.A. Undeveloped Floodplain Development 1. Standards, Permitted Uses and Activities. Residential Development is not a permitted use in designated undeveloped floodplain. 35.17.8 Riparian Buffer and Water Related Habitat 2. Development Standards. Residential development is not a permitted use in designated riparian and water related habitats. 35.17.9 Upland Habitat Development Standards. 3. Residential development shall be designed to retain a contiguous fifty percent (50%) tree canopy, which shall remain predominantly in its natural state. These deviations were mitigated with the preservation of 1.18 acres of Upland Habitat and the creation of 10.16 acres of Upland Habitat, for a total of post-project Upland Habitat area of 11.34 acres. The ADP ESA Plan provides for a natural zone plantings and social zone plantings. The applicant is proposing to exchange 0.4 acres which are designated as natural zone on the Tuscan Hills ADP ESA Plan for approximately 0.58 acres of enhanced social areas within the Unicorn Lake Estates subdivision to accommodate the construction of Frontier Road. The result would be a net increase of 0.18 acres of enhanced social area within the area. FINDINGS: Criteria for Approval . The goals and objectives which must be met are the following: 1. Preserve Existing Neighborhoods In addition to the preservation of existing neighborhoods, this proposal would connect two residential neighborhoods, and extend the trail system which is already located in the area. 2. Assure quality development that fits in with the character of Denton. The applicant will be required to adhere to all requirements of the Denton Development Code with the exception of those regulations deviated from with this Alternative Development Plan. The applicant will be adding additional tree plantings, extending the 3. Focus new development to activity centers to curb strip development. This site is located in existing neighborhood and commercial areas and will complement both the residential and commercial uses already established in the vicinity. 4. Ensure that the infrastructure is capable of accommodating development prior to the development occurring. Sanitary sewer and water are available to the site. An extension of the infrastructure is not necessary for this request. 5. overall in a high quality development meeting the intent of the design standards in Chapter 13 of the Denton Development Code. Although the developer wishes to deviate from some of the requirements of the DDC, he intends to add additional tree canopy coverage; develop an extension of the trail system; provide park land for the neighborhood; and is meeting all other requirements of the Denton Development Code. Exhibit 2 Alternative Development Plan The purpose of an Alternative Development Plan (ADP) is to provide an option for developments that do not meet the standards in the Denton Development Code (DDC) and that meet or exceed the objectives of the Denton Plan and the DDC. The applicant is requesting approval of revision to an approved Alternative Development Plan Section 35.17.12, Alternative Environmentally for an Environmentally Sensitive Area. Sensitive Area Plans in the DDC permits the proposed ADP procedure. The Alternative Development Plan for this site will deviate from the following Denton Development Code Subchapters: 35.17.7.A. Undeveloped Floodplain Development Standards, Permitted Uses and 1. Activities. Residential Development is not a permitted use in designated undeveloped floodplain. 35.17.8 Riparian Buffer and Water Related Habitat Development Standards. 2. Residential development is not a permitted use in designated riparian and water related habitats. 35.17.9 Upland Habitat Development Standards. 3. Residential development shall be designed to retain a contiguous fifty percent (50%) tree canopy, which shall remain predominantly in its natural state. The following mitigation plan was required as part of the previously approved ADP ESA Plan for this site. The applicant will mitigate the deviations from the DDC by preservation of 1.18 acres of Upland Habitat and the creation of 10.16 acres of Upland Habitat, for a total of post- project Upland Habitat area of 11.34 acres. The ADP ESA Plan provides for a natural zone plantings and social zone plantings. The natural zone constitutes approximately 8.21 acres, of which 7.63 acres need to be planted. This would provide approximately 2,671 bare-root seedlings for the Upland Habitat natural zone. The natural zone will be planted with bare-root seedlings at a rate of 350 per acre in the area indicated in Exhibits 7 and 8. The social zone plantings will occur along potential trail corridors in an area of approximately 3.71 acres and will be maintained to allow for longer sight distances for both aesthetic and safety reasons. Tree plantings will consist of the same native species as the natural zone, however, these trees will be larger than the bare-root seedlings planted in the natural zone and will be planted at a rate of 50 trees per acre. A meandering walking trail has been constructed through the social zone. With this amendment to the ADP ESA Plan, the newly added 0.58 acre enhanced social zone will accommodate a playground and an extension of the meandering walkway/trail system. Twenty-four (24) will be planted in this new area. NOTE: This Alternative Development Plan allows only for the deviations and mitigations listed here; all other regulations in the Denton Development Code, Criteria manuals, and other applicable regulations will apply. The approval of this Alternative Development Plan does not explicitly or implicitly approve any Engineering issues, including but not limited to, access points, easement locations, or utility locations. Exhibit 3 Location Map Exhibit 4 Zoning Map Exhibit 5 A Letter Exhibit 6 Proposed Overall Amendment to ESA Plan Exhibit 7 Proposed Mitigation Plan Exhibit 8 Unicorn Lake Approved ESA Plan (Ord. No. 2006-138) Exhibit 9 Amendment to Approved ESA Plan (Ord. No. 2006-348) Exhibit 10 Notification Maps Public Notification Date: 11/23/11 124 5 In Opposition: 0 In Favor: 0 Neutral: 1 Exhibit 10 Notification Maps Exhibit 11 Property Owner Responses Exhibit 12 Site Photos East side of subject site West side of subject site South side of subject site North side of subject site Exhibit 13 Draft Planning and Zoning Commission Meeting Minutes Exhibit 14 Ordinance � a--� � �"" � � v° -V' O � c � �a u � � v o` c E U O � � C � bll N � " :�� � ti� 1 , �'n � Y � �.e � r k�'�.����yti _ ~ 3� A �y"C�� � � � �-ia. � ' �!� 4C � � � �� `._�. . � � ;�.,..��' l:i . \h'�`�%•. y�•!�5 \ey ,•' � .. �� � �. � ; !!� �'p� • 7 f!/�'f ��r`_ � L�� � ��'"� � .�.�:-[�. = _ _ _ ' f�, d � � � x W AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2012 DEPARTMENT: Planning and Development ACM: Fred Greene SUBJECTS09-0007 (Smith East Gas Wells) Hold a public hearing and consider adoption of an ordinance of the City of Denton, Texas, approving a Specific Use Permit (SUP) for an existing gas well drilling and production facility on a property located within a Neighborhood Residential Mixed Use (NRMU) zoning and use district on approximately 2.64 acres. The subject property is generally located south of Airport Road, east of Interstate 35 West, and west of South Bonnie Brae Street; providing for a penalty in the maximum amount of $2,000.00 for violations thereof, severability and an effective date. (S09-0007) The Planning and Zoning Commission recommends approval (5-2). PROPOSAL The Applicant (Allison Engineering) is requesting approval of a Specific Use Permit (SUP) for an existing gas well drilling and production operation site. The subject site is currently zoned NRMU, and requires an SUP to allow gas well drilling and production, per Sections 35.5.2.2 and 35.22.3 of the Denton Development Code (DDC). The requested SUP will govern the gas well drilling and production operation as depicted on the site plan hereto attached as Exhibit 7. It is important to note that if this SUP is granted, the existing two (2) gas wells may be re-fracked or re-worked by after obtaining approval from the Development Review Committee, and a Gas Well Drilling Permit for each well. Future permission to drill any additional wells will require City Council approval via a modification of the subject SUP. BACKGROUND Presently, there are two (2) gas wells and a tank battery located on the site. However, there are no records showing that the City issued permits for the operation of gas well drilling and production for this location. According to the Applicant, the site was developed without permits by the previous operator, Darkhorse Operating, LLC., due to a prior determination by the City of Denton on December 30, 2004 that the property was under the jurisdiction of the University of North Texas (UNT) and that City of Denton permits were not required. Please see Exhibit 11. The City, however, found in 2009 via Denton Appraisal District that the subject property is not owned by UNT and is therefore subject to the DDC. The application associated with this current request for an SUP was submitted to the Planning production ordinance in 2010. However, given that this is a request for an SUP, staff is applying many of the current standards as conditions of approval. Two (2) public notices were sent to property owners within 200 feet of the site (Exhibit 6). Four (4) courtesy notices were also sent to residents within five hundred (500) feet of this request. As of this writing, staff has received one (1) property owner response in support to the request, representing 7.24 % of the area within 200 feet of the subject site. PRIOR ACTION/REVIEW November 2, 2011 The Planning and Zoning Commission (P&Z) continued this item to the December 7, 2011 meeting December 7, 2011 Planning and Zoning Commission Public Hearing 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 this request (5-2), subject to conditions. APPROVAL The Development Review Committee recommends , subject to conditions. EXHIBITS 1.Staff Report 2.Site Location/Aerial Map 3.Zoning Map 4.Future Land Use Map 5.Letter From Applicant 6.Notification Map 7.Site Plan 8.Site Photos 9.Planning and Zoning Commission, December 7, 2011, Meeting Minutes 10.Response to Public Notification 11.2004 Trakit Information 12.Ordinance Prepared by: Nana Appiah, AICP Senior Planner Respectfully submitted: Mark Cunningham, AICP, CPM Director of Planning and Development EXHIBIT 1 CITY OF DENTON DEVELOPMENT REVIEW COMMITTEE STAFF REPORT P&Z Date: December 7, 2011 TYPE: Specific Use Permit CC Date: January 10, 2012 PROJECT #:S09-0007 Project Number: S09-0007 Request: A Specific Use Permit (SUP) to allow gas well drilling and production on 2.64 acres. Applicant: Allison Engineering Property Owner: Eagle Ridge Operating, LLC 300 Blackburn, Suite 202 Dallas, TX 75204 Location: The property is located south of Airport Road, east of Interstate 35 West, and west of South Bonnie Brae Street (S09-0007). Size: 2.64 acres ± Zoning Designation: Neighborhood Residential Mixed Use (NRMU) Future Land Use: Existing Land Use Case Planner: Nana Appiah, AICP DRC Recommendation: The Development Review Committee (DRC) recommends Approval of S09-0007 subject to conditions. Summary of Analysis: In accordance with Sections 35.5.2.2 and 35.22.3 of the Denton Development Code (DDC), gas well drilling and production are permitted with an SUP within the NRMU zoning district. Pursuant to Section 35.6.4 of the DDC, an SUP may be granted if the proposed use conforms (or can be made to conform through the use of conditions) to the standards established in the NRMU zoning district. Section 35.6.4 of the DDC also provides standards by which an SUP is granted. Below are staff’s analyses of these standards: B. A specific permit shall be issued only if all of the following conditions have been met: 1.That the specific use will be compatible with and not injurious to the use and enjoyment of other property nor significantly diminish or impair property values within the immediate vicinity; Granting this SUP would not be injurious to the use and enjoyment of other property nor significantly diminish or impair property values within the immediate vicinity. Two (2) gas wells are existing on this site. The purpose of this request is to lawfully allow gas well drilling and production on the site. Currently, there are no walls, landscaping or landscaped buffers surrounding the site. Approval of this SUP with P&Z recommended conditions of approval will enhance the site and improve its general appearance. Such improvements will provide buffering between the subject use and existing and future uses of the area. 2.That the establishment of the specific use will not impede the normal and orderly development and improvement of surrounding vacant property; Granting the SUP would not impede the normal and orderly development of the surrounding undeveloped property. Surrounding property to the north and south are undeveloped. Approval of this SUP should not deter further development of the surrounding property. Staff is requiring an eight-foot (8’) high screening fence and a type “B” buffer along the perimeter of the site. This requirement, if approved, will be an improvement to the existing conditions on the site. 3.That adequate utilities, access roads, drainage and other necessary supporting facilities have been or will be provided; The DRC has reviewed this proposed project and have determined that adequate utilities, access road, drainage, and other necessary supporting facilities have been or will be provided. 4.The design, location and arrangement of all driveways and parking spaces provides for the safe and convenient movement of vehicular and pedestrian traffic without adversely affecting the general public or adjacent developments; The design, location and arrangements of the driveway will not adversely affect the general public or adjacent development. Currently, the site has one driveway entrance onto Bonnie Brae Street. The DRC has determined that the driveway must be widened to provide safe and convenient access. This improvement shall be constructed prior to issuance of a gas well site plan. 5.That adequate nuisance prevention measures have been or will be taken to prevent or control offensive odor, fumes, dust, noise and vibration; Except during re-fracturing or re-work of the wells, dust, noise, and vibration should not occur on this site. Per Section 35. 22.12 of the DDC, the operator of the gas wells is required to provide a written notice to the City and residences within one thousand feet of the intention to re-work or re-frac the wells. This notice shall be given at least ten (10) days before the re-work or re-frac activity begins. In addition, such operations shall conform to Sections 35.22.5 and 35.12.11 of the DDC. This Sections of the Code establishes standards such as controlling noise, fumes and use of odorous materials on property. Further, Section 20 of the City’s Nuisance Code Ordinance also regulates dust, noise, and odor control during constructions. 6.That directional lighting will be provided so as not to disturb or adversely affect neighboring properties. According to the applicant, the site requires little lighting. Currently there is no lighting on the site. Any proposed lighting shall comply with the standards and regulations of Section 35.13.12 of the DDC. This requirement limits illumination of light onto adjacent propertyIn addition, the nearest residential structure (UNT’s . Victory Hall of Residence) is approximately 1,200 feet from the subject property. 7.That there is sufficient landscaping and screening to ensure harmony and compatibility with adjacent property. Currently, the site contains no tree plantings or landscaping. Staff is requiring a type “B’ buffer in conjunction with an eight (8) feet fence along the perimeter of the site. This requirement will enhance aesthetics of the site, and ensure the general safety of the public. C.That adequate capacity of infrastructure can and will be provided to and through the subject property. The DRC has reviewed this request and determined that adequate capacity of infrastructure such as water and sewer can and will be provided to and through the subject property. D.That the Special Use is compatible with and will not have an adverse impact on the surrounding area. When evaluating the effect of the proposed use on the surrounding area, the following factors shall be considered in relation to the target use of the zone: 1.Similarity in scale, bulk, and coverage. The existing gas wells operation is smaller in scale, bulk and coverage to the surrounding uses. Except occasional re-work of the wells, activities on the site are minimal and should not adversely affect the surrounding uses. 2.Generation of traffic and effects on surrounding streets. Increases in pedestrian, bicycle, and mass transit use are considered beneficial regardless of capacity of facilities. Staff does not anticipate increase in vehicular traffic via the granting of this requested SUP, as the site is already developed. There may be occasional truck traffic during re-fracturing or re-work of the site. However, noise generating from vehicular traffic should not be different from existing vehicular noise emanating from Interstate I-35, which is located west to the site. 3.Architectural compatibility with the impact area. The only visible elevated structures on the site are the existing tank batteries. There are no buildings proposed at this time and there are no buildings on adjacent properties for the tank batteries to be compatible with. 4.Air quality, including the generation of dust, odors, or other environmental pollutants. This SUP is for existing gas wells. The site is required to comply with Sections 35.22.5 and 35.12.11 of the DDC. These Sections of the Code establish standards for controlling noise, fumes and use of odorous materials on property. 5.Generation of noise, light, and glare. Development or operation of current activities on the site is required to comply with Sections 35.22.5 and 35.12.11 of the DDC. These Sections of the DDC regulate noise, light and glare emanating from property. 6.The development of adjacent properties as envisioned in The Denton Plan. Future land use designation of the property to the west is Industrial Center. Per the Denton Plan, “Industrial Centers” future land use areas are intended to provide locations for a variety of work processes and work places such as manufacturing, warehousing and distributing, indoor and outdoor storage, and a wide range of commercial and industrial operations. The industrial centers may also accommodate complementary and supporting uses such a convenience shopping and child-care centers. Adequate public facilities are criterion by which zoning is granted.” It is staff determination that approval of the SUP will not impede development of the adjacent site for industrial uses. The properties to the north, south, and east are located in the “Existing Land Use” future land use designation. The “Existing Future Land Use” areas are typically established residential areas, which new development should respond to existing development with compatible land uses, patterns and design standards. However, there are no residential developments within the immediate vicinity of the site. Therefore, it is staff determination that approval of this SUP will not change the character or pattern of a development on the adjacent property. 7.Other factors found to be relevant to satisfy the requirements of this Chapter. The DRC has considered factors necessary for approval of this site and have applied appropriate conditions of approval. Findings of Fact 1.The request is a Specific Use Permit to allow the development of gas well drilling and production on 2.64 acres. The site is already developed with two (2) gas wells and a storage tank facility. 2.There are no approved City of Denton permits for gas well drilling and production on this property. According to the applicant, this site was developed without city permits because the previous owner was misinformed that this property was under the jurisdiction of UNT. The applicant has not provided any permits issued by UNT. 3.The subject site is located within the Existing Land Use future land use category which includes existing residential uses and new infill compatibility. New development should respond to existing development with compatible land uses patterns and design standards. The plan recommends that existing neighborhoods within the city be vigorously protected and preserved. Housing that is compatible with the existing density, neighborhood service and commercial land uses is allowed. 4.The subject site is not located within a Historic or Conservation district. 5.The subject site has vehicular access to Bonnie Brae Street. Bonnie Brae Street is classified as Secondary Major Arterial per the City of Denton Mobility Plan. 6.The anticipated transportation demand will be high during the fracturing process, but once the gas well drilling process is complete, then the traffic demand will be minimal. 7.According to the Applicant, the estimated water demand is approximately 40,000 barrels (1,680,000 gallons). This water is necessary for the drilling and fracture stimulation process. The water utilized for this procedure will come from recycled water and from an existing stock tank re-supplied by an existing water well located south of Jim Christal Road. This water will be transported by truck to the well site. Sanitary services will be provided by portable bathrooms stored on site. 8.According to the City of Denton Fire Department, this property is serviced by the City’s Fire Station #3, located at 1204 McCormick Street. Planning and Zoning Commission Recommendation The P&Z recommended APPROVAL of this Specific Use Permit (5-2) at its meeting on December 7, 2011 subject to the following conditions: CONDITIONS OF APPROVAL: 1.The site plan as submitted and shown in Exhibit 7 shall guide the development of gas wells. 2.The applicant shall install an eight-foot (8’) high screening fence and a type “B” buffer along the northern, eastern, and western perimeter of the site. The applicant shall construct a screening fence along the southern property boundary. The screening fence along the southern boundary shall be constructed outside the City’s easement or drainage channel. Materials for the construction of the fence shall be of one of the following; masonry, wood, vinyl, PVC, or composite and shall be maintained in good repair at all times. 3.The required landscaping shall be planted along the outside of the fence, and shall be irrigated and kept alive at all times. 4.The screening fence and type ‘B’ buffer, as conditioned, shall be constructed within 120 days after approval of this SUP or within a reasonable period determined by the City’s Landscape Administrator. 5.If screening or landscaping is damaged or removed during fracturing or re-fracturing operations, the operator of the gas well shall be responsible for replacing the damaged or removed portions of the landscaping. 6.Any violations of the above conditions may result in the revocation of this SUP in accordance with Section 35.6.6 of the Denton Development Code. Development Review Committee Based on the information provided by the applicant and a recent site visit, the Development IS CONSISTENT Review Committee finds that with the recommended conditions, the request IS CONSISTENT with the surrounding land uses and general character of the area, with the IS CONSISTENT Denton Plan, and with the Denton Development Code. Based on the findings-of-fact, the Development Review Committee (DRC) recommends APPROVAL of S09-0007 with conditions as stated above. GENERAL NOTES NOTE: Approval of this request shall not constitute a waiver or variance from any applicable development requirement unless specifically noted in the conditions of approval and consistent with the Denton Development Code. NOTE: All written comments made in the application and subsequent submissions of information made during the application review process, which are on file with the City of Denton, shall be considered to be binding upon the applicant, provided such comments are not at variance with the Denton Plan, Denton Development Code or other development regulations in effect at the time of development. Surrounding Zoning Designations and Current Land Use Activity: Northwest: North: Northeast: IC-E: NRMU: NR-2: I-35W/VacantVacant propertyVacant property West:East: Subject Property: IC-E: NR-2: NRMU I-35W/Industrial UseUNT Football Stadium Gas Wells Southwest: South: Southeast: IC-E: NRMU: NR-2: I-35W/Industrial UseVacant property/Soccer and UNT Football Stadium Baseball fields Source: City of Denton Geographical Information System and site visit by City staff Comprehensive Plan: A.Consistency with Goals, Objectives and Strategies: The subject site is located in the “Existing Land Use” future land use designation. These areas are typically established residential areas. New development should respond to existing development with compatible land uses, patterns and design standards. The plan recommends that existing neighborhoods within the city be vigorously protected and preserved. Housing that is compatible with the existing density, neighborhood service and commercial land uses is allowed. Staff finds the location of these gas wells consistent with the existing development patterns of the surrounding area. No residential development exists within a thousand foot radius of the gas wells. The property to the west is developed as an industrial use. It is also designated as Industrial Center Future land use. The property to the south and east are developed as athletic fields and a football stadium. The property to the north is vacant. However, the location of major roadways and industrial uses surrounding this northern property makes it less feasible to develop as residential. B.Land Use Analysis: Staff finds this request with recommended conditions of approval compatible with the surrounding land uses. Nearest Elementary, Middle, and High School This request is for gas well drilling and production. Therefore, the development will not produce any elementary, middle or high school students and therefore will not impact the associated Independent School District. Nearest Fire and EMS Station Approximate Distance From Name of Station Subject Property Fire Station #3, 1204 McCormick ± 1.7 miles Street This proposed development has been reviewed for compliance with the 2006 International Fire Code and City Ordinance 2009-098, Section 29-2 Amendments to the Fire Code. The applicant is responsible for compliance with all applicable portions of the Fire Code and City Ordinances even in the absence of review comments. Water and Wastewater Demand and Capacity: A. Estimated Demand and Service Provider: According to the applicant, if additional fracture stimulation of the wells are necessary in the future, the total estimated water demand would be 40,000 barrels (1,680,000 gallons). This water would be from recycled water and from an existing stock tank re-supplied by an existing water well located south of Jim Christal Road and would be transported by truck to the well site. Sanitary services will be provided by portable bathrooms stored on site. B. Available Capacity: Applicant is providing the necessary water and sewer capacity for the operation. C.CIP Planned Improvements : There are planned CIP water main and sewer main projects along Bonnie Brae Street in this area. Roadways/Transportation Network: A.Estimated Demand : Subject Property Estimated Impact Analysis Adequate to Serve (Yes or 2.64 Proposed Demand ± acres No) Average Annual NA Yes Daily Trips (AADT) B. Available Capacity: Bonnie Brae Street serves the subject site and has adequate capacity. C. Roadway Conditions: Bonnie Brae Street is an unimproved perimeter street. D. CIP Planned Improvements: The City of Denton has a CIP project for the widening of Bonnie Brae Street serving the subject site. Environmental Conditions: The City’s Environmental Sensitive Areas (ESAs) map shows a stream buffer ESA. However, the stream buffer has been removed after staff assessment of the site. The assessment showed that the ESA does not meet established criteria for a stream buffer. Wells (Public/Private): No public or private portable water wells are proposed for the site. Airports: The subject site is not within the boundaries of the Denton Municipal Airport Overlay District. Electric: There is an existing DME overhead electric line north of this gas development. Park Facilities: No comment Comments from other Departments: N/A Exhibit 2 – Site Location/Aerial Map Sit e UNT New Football Stadium Baseball Field Exhibit 3 – Zoning Map Sit e UNT New Football Stadium UNT Victory Hall Baseball Field Exhibit 4 – Future Land Use Map UNT New Site Football Stadium Baseball Field Exhibit 5 – Letter from Applicant Exhibit 6 – Notification Map Exhibit 7 – Site Plan Exhibit 8 – Site Photos Looking toward the site Look east from the site Look north from the site Look south from the site Exhibit9December7,2011P&ZMinutes DRAFT DRAFT MINUTES PLANNING AND ZONING COMMISSION December 7, 2011 C.Hold a public hearing and consider making a recommendation to City Council regarding a Specific Use Permit (SUP) to allow gas well drilling and production on a property located within a Neighborhood Residential Mixed Use (NRMU) zoning and use district on approximately 2.64 acres. The subject property is generally located south of Airport Road, east of Interstate 35 West, and west of South Bonnie Brae Street. (S09-0007, Smith East Gas Wells, Nana Appiah) Chair Thomas called a break from 8:25-8:32 p.m. Appiah provided the location and zoning map and stated staff recommends approval of this request with conditions, Appiah listed the six conditions. The six conditions are: 1. The site plan as submitted and shown in Exhibit 6 shall guide the development of gas wells. [Planning] 2. The applicant shall install an eight-foot (8’) high screening fence and a type “B” buffer along the northern, eastern, and western perimeter of the site. The applicant shall construct a screening fence along the southern property boundary. The screening fence along the southern boundary shall be constructed outside the City’s easement or drainage channel. Materials for the construction of the fence shall be of one of the following; masonry, wood, vinyl, PVC, or composite and shall be maintained in good repair at all times. [Planning] 3. The required landscaping shall be planted along the outside of the fence, and shall be irrigated and kept alive at all times. [Planning] 4. The screening fence and type ‘B’ buffer, as conditioned, shall be constructed within 120 days after approval of this Specific Use Permit (SUP) or within a reasonable period determined by the City’s Landscape Administrator. [Planning] 5. If screening or landscaping is damaged or removed during fracturing or re-fracturing operations, the operator of the gas well shall be responsible for replacing the damaged or removed portions of the landscaping. Planning] 6. In accordance with Section 35.6.6 of the DDC, any violations of the above conditions shall render this SUP null and void. [Planning] Bentley questioned how staff determined what was deemed necessary for the fence screening requirements; he also questioned the elevation height of the neighboring street and highway. Appiah confirmed that Bentley’s elevation statement is correct; therefore staff is making conditions aesthetically satisfying to the current land conditions. Taylor questioned if the City would approve an SUP under the current condition of the site, or as the site was developed in 2005. Cunningham stated given there were no permits issued for this site the SUP would be approved under today’s conditions of the site depending on staff’s approval and conditions. Since there have been no previous permits pulled, even if it was developed prior to today’s date, it is not considered vested. Taylor questioned what the minimum distance is allowed of a gas well site to be located next to residential property. Cunningham clarified on his previous statement that the applicant submitted the application for the SUP under the old code; the vesting is not necessarily tied to the permit. However, when the actual application was made the City applied current standards to the greatest extent possible for the fact that it is an SUP which gives us the authority to do so. Cunningham stated when the application was made the setback was 500 feet which could be reduced to 200 feet, however since the City has current standards that require 1000 feet from protected uses the City would put that as a condition of approval. Taylor referred to page 9 of the staff report with the surrounding zoning designation there are football stadiums to east and southeast of the site that do not reflect the dorms built into the stadium. Appiah mentioned what was provided indicates what was directly adjacent to the site; the dorms are at Victory Hall which are approximately 1050 feet away from the site. Appiah introduced Lee Allison with Allison Engineering to speak on behalf of this project. Allison provided the proposed conditions of the approval along with a hard copy of slide 8 to the Commissioners and staff. Allison discussed that conditions one through three are the same conditions that staff provided, however, condition 4 had been changed to address the screening fence only and not to include the type ‘B’ buffer. Allison stated condition 5 would now include the type ‘B’ buffer; he also stated they would like to see the buffer applied within the next two years or with the completion of Bonnie Brae Street, whichever occurs first. Allison stated condition number 6 will remain the same as what staff provided, condition 7 is a representation of the previous condition number 6, which is failure to comply with any of the above mentioned conditions render this site subject to relative code violations and the associated fees and penalties. Allison listed the steps to the proposed gas well permit conditions including: existing permit for the Railroad Commission, Special Use Permit, a required site plan, the City Gas Well permit, the fence design permit and construction, and the landscape design, permit and construction. Allison provided the background history of the site, including the history of the applicant being notified the site was on University of North Texas state property and a permit would not be needed by the City. Allison provided an aerial site plan of the property indicating where an existing fence was constructed on the north side of the property on Texas Department of Transportation’s side of the property. Lyke questioned when Darkhorse Operating, LLC obtained a permit by the Rail Road Commission, Allison stated he believes it was around 2004-06, he is unsure at this time. Conner questioned if there are any other future plans to drill on this site. Allison stated there is future plans anticipated, however they would need an amendment to this SUP in order to drill. Thomas introduced nine citizens to speak on behalf of this agenda item. Tara Linn Hunter who resides at 412 Pierce Street stated her understanding of the company was drilling without a permit since 2004. Hunter stated she read an article that a City inspector found the company illegally dumping chemicals that lead into Hickory Creek and into the Lake Lewisville, which feeds into drinking water. Hunter states the request seems obscured to grant the company permission to continue operating after having been done so illegally, she states they have lost trust with local citizens and would like to see them pay fines. Clinton McBride a local resident at 1400 N. Elm Street stated he doesn’t believe a company should be given a permit to continue to operate after being caught working illegally. McBride discussed the history of the operation as well as the effects of issuing this company a permit to continue operation after being done so illegally. McBride discussed University of North Texas property and the benefit of the three wind turbines that are located on the property. He stated directly across the street there are two hydraulic fracking wells that are hazardous to the environment. Kati Trice resident at 615 ½ Coit Street stated with the approval of this SUP it sets precedence to additional companies operating in the City can exceed without pulling proper permits. Trice stated she a fine should be paid before an SUP is considered. Trice stated the current situation brings up a list of additional questions to take into consideration, including how this company as well as the previous company could operate for a long time period without City staff recognizing there were no proper permits pulled, additionally, why has it taken so long to come before the Planning and Zoning Commission. Trice recommends not requesting this SUP until the stated issues are resolved. Jason Netek a resident at 1128 Frame Street stated the representative of the gas well company spoke with do diligent, which is interesting to hear coming from a company that acquired a spot that wasn’t permitted. Netek stated this Commission should have the right to terminate this proposal, granted the citizens of this City oppose the mentioned projects. Netek stated the permit should be denied and the fees should be levied, this City should not tolerate this to be allowed. Ben Kessler, 2228 Lookout Lane, stated he is strongly opposed to this request for several reasons, the fact the company had been sold several times indicated the previous company wanted to remove it from their hands. This company has broke laws in the past, there is no reason it would not occur again. Kessler stated the company is dumping waste illegally and the City is going to pass new regulations, he questioned what the operators are going to do once new regulations have been adopted. Marcio DaSilva a resident at 223 Fry Street recited a paper he wrote that stated the endangers of the quality of life, he stated this is not radical or unimaginable. DaSilva stated “we” are being poisoned in the air and across the airwaves. Pauline Raffestin a resident at 2015 Bowling Green Street, Raffestin stated her and her husband have a four year old son. She provided the history information of the operator and their illegal operations and dumping. Raffestin stated granting the operator a permit would be sending an inaccurate message to additional operators. Raffestin would like to see the operator fined for operating illegally. David Kaplan resident at 308 Marietta Street stated the history of the site is relevant, he also stated the issue of the SUP is a noticeable choice. Kaplan questioned the Commissioners to consider if the approval of the SUP is making the lives of the citizens of Denton better or worse. Amber Briggle resident at 1315 Dartmouth Place questioned who is in the wrong in this situation, she stated in 2004 two permits were filed with the Rail Road Commission, and then in 2005 the wells were constructed. Briggle stated that in 2009 it was noticed there were no gas well permits and the wells were still producing gas illegally. Briggle stated this gives the wrong message, Briggle would like to see the permits denied, and the wells shut down, as well as a daily fine. Thomas stated there are five remaining cards of citizens that would not like to speak on behalf of their favor; he stated they were all in opposition. Lyke questioned if the names and comments could be read out loud. Thomas provided the citizens names and comments starting with Wesley Sheet a resident at 3400 Fallmeadow Street stated he would like to say that Eagle Ridge Operating, LLC should not be allowed a special permit; they should be fired according to the law. Karen DeVinney a citizen at 1820 West Oak Street stated as the mother of two children she is aware of the importance of not rewarding bad behavior. DeVinney asked the Commissioners not to award the drillers for their misbehavior. Sarah Gamblin a citizen at 2113 Preston Place stated before an SUP is issued Eagle Ridge Operating, LLC should be punished for operating illegally and polluting local air. Gamblin stated Denton needs to stand up for oil companies and stake a claim for liability and protect its citizens. Jacob West a citizen at 2005 Azalea Street stated he doesn’t believe it is right of beneficial for Denton to grant forgiveness for gas companies drilling without the proper permits. West stated if the proper permits are granted Eagle Ridge Operating, LLC should be fined, along with other companies that have operated the well in the past. Andrea Schreiber a citizen at 308 Marietta Street stated she is in opposition, with no comments provided. Allison clarified this Commission is aware that Eagle Ridge Operating, LLC will not receive any penalties today in addition there are no permits that will be issued today. Allison stated this request is individually for an SUP on the property, he also stated Eagle Ridge Operating, LLC may be one of the largest if not the largest operator within the jurisdiction of the City of Denton. Allison continued that they only have one gas well with an incident which it is being addressed, which is this site was acquired from another operator, at the time the site was empty and all contents were empty years prior. Allison indicated that all comments need to be addressed with the proper committees, and that the Rail Road Commission permits need to be processed. Bentley stated the mentioned gas wells will not cease to exist any time soon. Bentley referred to item number 7 of the applicants recommendations compared to staffs recommendations, Bentley questioned if the applicant proposed fines and penalties opposed to null and void of the SUP. Thomas confirmed Bentley’s question to be correct. Bentley questioned if staff and the legal department has had time to review this item recommendation. Leal clarified item number 7 would be an alteration to the code, Leal also stated neither this Commission nor the City Council have the authority to approve this amendment to the code. Allison stated he presumes the mentioned elements are already in the code. Bentley questioned what the life line of a gas well, Allison stated it differs from formation to formation, on average the life line is around fifteen years. Allison continued that the operator will return to the gas well every fifteen years to refrack, after a thirty year lifeline of the well revisiting will determine what is left of the formation. Bentley questioned if the Development Review Committee receives public comments, Cunningham clarified it would not be a public hearing process; it is a permit review and applicant process which does not allow comments from the public. Allison stated that would allow the right to refrack within the jurisdiction of the City of Denton along with additional permits. Taylor questioned staff what is the standard procedure of a business operating without the proper permits; Taylor also stated if it were brought to staffs attention what procedure would occur. Cunningham clarified this particular case is different than normal cases; the applicant did come back to the City to file for a permit previously. Cunningham stated in June of 2004 the project was located within the Neighborhood Residential Mixed Use (NRMU) zoning district and an SUP was required. Cunningham added that in October of 2004 after the permit had been created it was determined the property was owned by University of North Texas, which was not subject to the City. Cunningham stated the information provided had been determined by previous historical documents. Leal stated we cannot determine what originally occurred. Cunningham stated several conclusions could be drawn; the applicant was given direction. Cunningham continued that the permit was applied for in December of 2009, and would like to clarify staff recommends approval based on the stated conditions. Cunningham stated in December of 2009 the conditions were in place. Cunningham addressed Bentley’s comment stating all conditions in the books are neither practical nor applicable; the City will be applying conditions that are applicable. Cunningham continued to state that staff will continue with the conditions on the staff report. Taylor discussed local business The Angry Friar, a mobile unit in Denton that had been operating in Denton for 3 months had been shut down due to operation without the proper rights, Taylor stated the City then stated the business would be fined if operation did not cease. Cunningham stated he is unavailable to speak on the mentioned case. Cunningham discussed in 2004 when the operator came to the city they were told by staff they were not located in the City’s jurisdiction, he additionally stated the City has restrictions and due dates to respond to comments to be addressed. Taylor questioned if this situation would set precedence for other businesses to be able to operate without proper permits then apply for permits and continue to operate without still having proper permits or paying applicable fines. Cunningham stated he could not speak on the mentioned question; the City has regulations that are enforced. Leal stated this particular application is for the approval of an SUP. Schaake stated she would like clarification from Leal or Cunningham as to what is exactly is on the panel for discussion. Cunningham clarified this is a recommendation by the applicant for an SUP, Gas Well operations requires an SUP. Cunningham additional stated the zoning permit allows the use this will not allow the operation of the gas well. Leal added this Commission does not have the ability to assign a fine. Commissioner Brian Bentley motioned, Commissioner Tom Reece seconded to approve this request with conditions presented by staff. On roll call vote: Commissioner Jean Schaake, Commissioner Thom Reece, Commissioner Frank Conner, Commissioner Jay Thomas, and Commissioner Brian Bentley – “aye”. Commissioner Patrice Lyke "nay", Commissioner Devin Taylor “nay”. Motioned carried (4-3). Thomas adjourned the meeting at 9:54 p.m. due to interruption from the audience. Action Type Staff Name Comment in TrakiT Date Staff notes Kay Liang Emailed comments to 06/04/2004 applicant Staff contacts applicant Kay Liang Called applicant for project 09/07/2004 status. The applicant stated that the gas well is already drilled. Forwarded project information to Quentin Hix and Rick Jones for possible citation. Staff notes Kay Liang Per Legal and Larry's 10/30/2004 interpretation, the subject site is within UNT property, not subject to City regulation. File closed. June4,2004Comment September7,2004Comment October30,2004Comment AGENDA INFORMATION SHEET AGENDA DATE: January 10, 2011 DEPARTMENT: Denton Municipal Electric ACM: Howard Martin, Utilities 349-8232 SUBJECT Hold a third public hearing and consider approval of staff recommendations regarding the preferred alignment of the portion of the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project running from the King’s Row substation to the Denton North Interchange; and consider a Resolution of the City Council of the City of Denton, Texas regarding establishment of the route for this section 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 portion of the Transmission Line Re-Build Project running from the King’s Row substation to the Denton North Interchange, DME held a neighborhood meeting, notifying 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 “a”, “b” and “c” 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 1 Distribution line construction cost 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 November 15, 2011 Presented to the City Council and held a public hearing OPTIONS 1. Recommend approval of the preferred route “c”. 2. Direct staff to consider other alternative routes. RECOMMENDATIONS Staff recommends the preferred route “c”. EXHIBITS 1. Resolution 2. 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