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March 6, 2012 Agenda
AGENDA CITY OF DENTON CITY COUNCIL March 6, 2012 After determining that a quorum is present, the City Council of the City of Denton, Texas will 3:30 p.m convene in a Work Session on Tuesday, March 6, 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 March 6, 2012. 3. Receive a report, hold a discussion, and give staff direction regarding the FY 2010-11 Comprehensive Annual Financial Report and annual audit. 4. Receive a report, hold a discussion and give staff direction regarding: a. An ordinance to amend the currently adopted 2009 International Energy Conservation Code (IECC). b. An ordinance to adopt the 2009 International Building Code (IBC), the 2009 International Residential Code (IRC), the 2009 International Plumbing Code (IPC), the 2009 International Mechanical Code (IMC), and the 2009 International Fuel Gas Code (IFGC) as amended by the City. c. An ordinance to adopt the 2011 National Electrical Code (NEC) as amended by the City. 5. Receive report, hold discussion, and give staff direction regarding the proposed adoption of an ordinance amending Chapter 29 of the Code of the City of Denton, Texas, to provide for the adoption of the International Fire Code, 2009 Edition. 6. Receive a report, hold a discussion and give staff direction regarding the request for City sponsorship of the Second Annual Susan G. Komen Race for the Cure to be held on September 29, 2012, in South Lakes Park and surrounding neighborhoods. 7. Receive a report, hold a discussion, and give staff direction regarding the development of a Local Preference Purchasing Policy. 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. City of Denton City Council Agenda March 6, 2012 Page 2 CLOSED MEETING 1.Closed Meeting: A. Consultation with Attorneys – Under Texas Government Code Section 551.071. 1. Consultation, discussion, deliberation, and receipt of legal information and legal advice from the City’s attorneys regarding a Local Preference Purchasing Policy, where the duty of the City’s attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas clearly conflicts with Chapter 551 of the Texas Government Code. 2. Consult with City’s attorneys regarding litigation strategy and the status of Love’s Travel Stops & Country Stores v. City of Denton, Cause No. 2010- th 50304-367, currently pending in the 367 District Court of Denton County. B. Consultation with Attorneys – Under Texas Government Code, Section 551.071; Deliberations regarding Real Property – Under Texas Government Code, Section 551.072. 1. Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the potential purchase of a 2.0 acre tract, more or less, located in the Hiram Sisco Survey, Abstract No. 1184, Denton, County, Texas, and located generally at the corner of McKinney Street and Oakland Street, City of Denton, Texas. 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 administrative proceeding or potential litigation. 2. Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the potential purchase of certain real property interests located in the O.S. Brewster Survey, Abstract No. 56, Denton County, Texas, and located generally in the 1700 Block of Bonnie Brae Street, City of Denton, Texas. 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 administrative proceeding or potential litigation. City of Denton City Council Agenda March 6, 2012 Page 3 3. Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the potential purchase of certain real property interests located in the O.S. Brewster Survey, Abstract No. 56, Denton County, Texas, and located generally in the 2200 Block of South Bonnie Brae Street, City of Denton, Texas. Consultation with the City’s attorneys regarding legal issues associated with the potential acquisition of the real property interests 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 administrative proceeding or potential litigation. C. Deliberations Regarding Certain Public Power Utilities: Competitive Matters – Under Texas Government Code, Section 551.086; Consultation with Attorneys – Under Texas Government Code, Section 551.071; Deliberations Regarding Real Property – Under Texas Government Code, Section 551.072. 1.Receive a briefing from staff, discuss and deliberate regarding public power competitive and financial matters involving the established route for the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project in the City of Denton, Texas; consult with the City’s attorneys regarding additional legal issues involved in said Project, where a public discussion of these legal matters would conflict with the duty of the City’s attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas; and discuss, deliberate and receive information from staff and provide staff with direction regarding the value, location, acquisition or condemnation of tracts of real property involved in the Denton Municipal Electric Northeast Denton Transmission Line Re-Build Project. ANY FINAL ACTION, DECISION, OR VOTE ON A MATTER DELIBERATED IN A CLOSED MEETING WILL ONLY BE TAKEN IN AN OPEN MEETING THAT IS HELD IN COMPLIANCE WITH TEXAS GOVERNMENT CODE, CHAPTER 551, EXCEPT TO THE EXTENT SUCH FINAL ACTION, DECISION, OR VOTE IS TAKEN IN THE CLOSED MEETING IN ACCORDANCE WITH THE PROVISIONS OF §551.086 OF THE TEXAS GOVERNMENT CODE (THE ‘PUBLIC POWER EXCEPTION’). THE CITY COUNCIL RESERVES THE RIGHT TO ADJOURN INTO A CLOSED MEETING OR EXECUTIVE SESSION AS AUTHORIZED BY TEX. GOV’T. CODE, §551.001, ET SEQ. (THE TEXAS OPEN MEETINGS ACT) ON ANY ITEM ON ITS OPEN MEETING AGENDA OR TO RECONVENE IN A CONTINUATION OF THE CLOSED MEETING ON THE CLOSED MEETING ITEMS NOTED ABOVE, IN ACCORDANCE WITH THE TEXAS OPEN MEETINGS ACT, INCLUDING, WITHOUT LIMITATION §551.071-551.086 OF THE TEXAS OPEN MEETINGS ACT. Regular Meeting of the City of Denton City Council at 6:30 p.m. in the Council Chambers at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be considered: REGULAR MEETING City of Denton City Council Agenda March 6, 2012 Page 4 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. Women Veterans Month th 2.100 Anniversary of the Girl Scouts of America 3.American Red Cross Month 4.Surveyor’s Week 5.Presentation of Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association. 3. CITIZEN REPORTS A. Review of procedures for addressing the City Council. B. Receive citizen reports from the following: 1) Dr. Bettye Myers concerning the Denton City County Day School request for the addition of a cover over a concrete slab on their playground. 2) Bob Clifton regarding city elections. 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 – S). 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 – S 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 by the City of Denton Texas, authorizing the City Manager to execute Amendment No. One to a Professional Services Agreement with AR/WS Texas, LP, for further services regarding the Procurement and Delivery of Land Rights for the Denton Municipal Electric 69kV Spencer to Denton North Interchange Transmission Line Upgrade Project; authorizing the expenditure of funds therefor in an amount not-to-exceed $63,600; and providing an effective date (File 4744–aggregating not-to-exceed $445,400). The Public Utilities Board recommends approval (6-0). City of Denton City Council Agenda March 6, 2012 Page 5 B.Consider adoption of an ordinance authorizing the City Manager or his designee to execute a Professional Services Agreement (PSA) with Wallace, Roberts and Todd, LLC for Consulting Services relating to a Comprehensive Plan Update for the City of Denton Planning Department, and providing for an effective date (File 4672–Comprehensive Plan Update awarded to Wallace, Roberts and Todd, LLC in the amount of $628,500). C.Consider adoption of an ordinance accepting competitive bids and awarding a four year contract for the purchase of traffic signs and accessories for the City of Denton Traffic Department; providing for the expenditure of funds therefor; and providing an effective date (Bid 4844–Four Year Contract for traffic signs and accessories awarded to the lowest responsible bidder meeting specification in the unit price amounts shown on Exhibit A for an annual estimated expenditure of $100,000 and a four year estimated total of $400,000). D.Consider adoption of an ordinance accepting competitive bids and awarding an annual contract for the purchase of water treatment chemicals for the City of Denton Water Treatment Plant; providing for the expenditure of funds therefor; and providing an effective date (Bid 4890–Annual Contract for water treatment chemicals awarded to the lowest responsible bidder meeting specification in the unit price amounts shown on Exhibit A for an annual estimated expenditure of $820,000). The Public Utilities Board recommends approval (6-0). E.Consider a request for an exception to the noise ordinance for the purpose of performing live music during house concerts hosted by Cassandra Fuhrmann. The house concerts will be located at 616 Woodland Street, beginning at 5:00 p.m. and concluding at 8:00 p.m., on the following Sundays: March 25, April 22, May 27, August 26, September 23, and October 28, 2012. This request is for an increase in decibels from 65 to 69 and for amplified sound on Sundays. Staff recommends approving the noise exception request. F.Consider adoption of an ordinance of the City Council of the City of Denton, Texas, approving a grant application from Bryan Korba, representing JDFIU Texas Building, LLC, from the Downtown Reinvestment Grant Program not to exceed $25,000; and providing for an effective date. The Economic Development Partnership Board recommends approval (6-0-1). G.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 Bill Davidson for the property located at 4824 Lockheed, Denton Municipal Airport; and providing an effective date. The Council Airport Committee recommends approval (3-0). H.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 Hangars Plus, L.L.C. for the property located at 4846 Lockheed, Denton Municipal Airport; and providing an effective date. The Council Airport Committee recommends approval (3-0). City of Denton City Council Agenda March 6, 2012 Page 6 I.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 Hangars Plus, L.L.C. for the property located at 4888 Lockheed, Denton Municipal Airport; and providing an effective date. The Council Airport Committee recommends approval (3-0). J.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 David Smith for the property located at 4862 Lockheed, Denton Municipal Airport; and providing an effective date. The Council Airport Committee recommends approval (3-0). K.Consider adoption of an ordinance authorizing the City Manager, or his designee, to execute on behalf of the City of Denton a Third Amendment to an Airport Lease Agreement approved by Ordinance 2009-018 dated January 6, 2009 and amended by Ordinance 2009-323 dated December 15, 2009 and amended by Ordinance 2010-193 dated August 17, 2010 between the City of Denton, Texas and Sykes-Vaughn Investments, LLC, which includes among other provisions the right to sell aviation fuel to the public for a fuel flowage fee and to provide commercial hangar and tie-down service at the Denton Municipal Airport for real property located at 4600 Taxiway “H”; and, providing an effective date. The Council Airport Committee recommends approval (3-0). L.Consider adoption of an ordinance authorizing the City Manager, or his designee, to execute on behalf of the City of Denton a Fourth Amendment to an Airport Lease Agreement approved by Ordinance 2009-018 dated January 6, 2009 and amended by Ordinance 2009-323 dated December 15, 2009 and amended by Ordinance 2010-193 dated August 17, 2010 and amended by Ordinance dated March 6, 2012 between the City of Denton, Texas and Sykes-Vaughn Investments, LLC, which includes among other provisions the right to sell aviation fuel to the public for a fuel flowage fee and to provide commercial hangar and tie-down service at the Denton Municipal Airport for real property located at 4703 Spartan Drive; and, providing an effective date. The Council Airport Committee recommends approval (3-0). M.Consider approval of the minutes of: January 31, 2012 February 6, 2012 February 7, 2012 N. Consider adoption of an ordinance abandoning and vacating a utility easement reserved by the City of Denton, Texas in (i) that certain Quitclaim, dated on or about January 16, 1979, from the City of Denton to W.D. Gaston, recorded in Volume 934, Page 669, Real Property Records, Denton County, Texas; and (ii) that certain Quitclaim, dated on or about January 16, 1979, from the City of Denton to Eva Inez Giles, recorded in Volume 934, Page 667, Real Property Records, Denton County, Texas, said utility easement located in the E. Puchalski Survey, Abstract No. 996, Denton County, Texas; and declaring an effective date. City of Denton City Council Agenda March 6, 2012 Page 7 O. Consider adoption of an ordinance abandoning and vacating a portion of a drainage easement granted to the City of Denton, Texas pursuant to that certain drainage easement, accepted by the City of Denton, March 15, 2007, from D.R. Horton – Texas, Ltd., and recorded as instrument No. 2007-30855, Real Property Records, Denton County, Texas, said drainage easement located in the William Roark Survey, Abstract No. 1087, Denton County, Texas; and declaring an effective date. P. Consider adoption of an ordinance authorizing the City Manager or his designee to execute a contract for sale of real estate (the “contract”), by and between the City of Denton, Texas as buyer and Denton County, Texas, as seller, contemplating the sale to and purchase by the City of Denton of an approximate 2.0 acre tract of real property in the Hiram Sisco Survey, Abstract No. 1184, Denton County, Texas, located generally at the corner of McKinney Street and Oakland Street, City of Denton, Texas (the “property”), for the purchase price (herein so called) of one million and no/100 dollars ($1,000,000.00); authorizing the City Manager to execute and deliver any and all other documents necessary to accomplish the closing of the transaction contemplated by the contract; terminating the prior contract offer submitted by the City of Denton to Denton County, Texas related to the property; authorizing the expenditure of funds therefor; and providing for an effective date. Q. Consider adoption of an ordinance finding that a public use and necessity exists to acquire (I) a utility and slope easement encumbering a 0.02 acre tract and a 0.03 acre tract, and (II) a temporary construction, grading and access easement, encumbering a 0.06 acre tract and a 0.02 acre tract, all tracts located in the City of Denton, Denton County, Texas, and situated in the O.S. Brewster survey, abstract number 56, City of Denton, Denton County, Texas, as more particularly described on exhibit “A”, to the referenced ordinance, located generally in the 1700 block of south Bonnie Brae street (the “Property Interests”), for the public use of expanding and improving Bonnie Brae road, a municipal street and roadway; authorizing the city manager or his designee to make an offer to Bettye L. Martin to purchase the property interests for the purchase price of seven thousand sixty 00 ), and other consideration, as prescribed in nine dollars and no cents ( $7,069. the easement purchase agreement, attached to the referenced ordinance; authorizing the expenditure of funds therefore; and providing an effective date. R. Consider adoption of an ordinance finding that a public use and necessity exists to acquire (I) fee simple to a .07 acre tract; (II) a utility and slope easement encumbering a 0.07 acre tract; (III) a utility and drainage easement encumbering a .01 acre tract; (IV) a drainage easement encumbering a .03 acre tract; (V) a slope easement encumbering a 213 square foot tract; and (VI) a temporary construction, grading and access easement encumbering a 0.08 acre tract, all tracts located in the City of Denton, Denton County, Texas, and situated in the O.S. Brewster survey, abstract number 56, City of Denton, Denton County, Texas, as more particularly described on exhibit “A”, to the referenced ordinance, located generally in the 2200 block of south Bonnie Brae street (the “Property Interests”), for the public use of expanding and improving Bonnie Brae road, a municipal street and roadway; authorizing the city manager or his designee to make an offer to Christopher M. Watts to purchase the property interests for the purchase price of nine thousand three hundred twenty two dollars and no cents ( $9,322.00), and City of Denton City Council Agenda March 6, 2012 Page 8 other consideration, as prescribed in the purchase agreement, attached to the referenced ordinance; authorizing the expenditure of funds therefore; and providing an effective date. S. Consider adoption of an ordinance of the City Council of the City of Denton, Texas authorizing the City Manager to execute a second amendment to an agreement for professional legal services with Wolfe, Tidwell & McCoy, LLP for professional legal services relating to pending litigation styled Love’s Travel Stops and Country Stores v. City of Denton, Cause No. 2010-50304-367, filed in th the 367 District Court of Denton County, Texas; authorizing the expenditure of funds therefor in an amount not to exceed $185,000; and providing an effective date. 5. ITEMS FOR INDIVIDUAL CONSIDERATION A.Consider adoption of an ordinance amending the water conservation and drought contingency plan of the City of Denton, Texas previously adopted by the city nd council in Ordinance No. 2009-134 enacted on the 2 day of June, 2009 regarding only sections 6.6 and 6.7 thereof; amending the drought and emergency response stages of the water conservation and drought contingency plan; amending the enforcement provisions of mandatory restrictions of the water conservation and drought contingency plan; providing for the stages of enforcement for violators of the plan; providing for administrative fees to be charged to violators for certain violations of the plan; providing a criminal penalty not to exceed $2,000 per violation of the plan; providing a civil penalty not to exceed $1,000 per day per violation of the plan; providing civil legal remedies for the City of Denton, Texas; providing a savings clause; providing a severability clause; and providing an effective date. B.Consider appointments to the Citizen Advisory Committee for the proposed 2012 Bond Election. 6. CONCLUDING ITEMS A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an City of Denton City Council Agenda March 6, 2012 Page 9 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: March 6, 2012 DEPARTMENT: Finance ACM: Jon Fortune SUBJECT Receive a report, hold a discussion, and give staff direction regarding the FY 2010-11 Comprehensive Annual Financial Report and annual audit. BACKGROUND financial statements. The purpose of the audit is to express an opinion as to whether th financial statements present fairly, in all material respects, the financial position of the City. The annual audit report is comprised of four major components: 1) the Comprehensive Annual Financial Report (CAFR), 2) Management Letter (when appropriate), 3) Single Audits, and 4) . The CAFR represents the entire financial position of the City, specifically for the fiscal year ending September 30, 2011. The document includes the clean opinion (unqualified), which means that in the opinion of Weaver, LLP., the City financial statements present fairly, in all material respects, the financial position of the City. A clean or unqualified opinion is the best opinion that may be rendered in an audit of the financial statements. The Weaver audit specifically included the following items: FR in accordance with generally accepted auditing standards. Federal grant awards. An e over financial reporting. The auditor understanding of the internal control structure to determine the nature, timing, and extent of audit procedures. The auditors did not perform an audit of internal controls, but performed limited tests of internal controls for the purpose of providing an opinion on the financial statements. Additionally, the auditors examined, on a test basis, evidence supporting amounts and disclosures in the combined financial statements. Committee, and 4) a letter to City Management from the auditor. Agenda Information Sheet March 6, 2012 Page 2 /Finance Committee, an audit adjustment for the current and prior periods was recommended to defer the recognition of revenue associated with the receipt of Regional Toll Revenue (RTR) from the Texas Department of Transportation for the Bonnie Brae and Mayhill Road construction projects. Essentially, management recognized the RTR funding as revenue at the time of receipt instead of deferring the recognition of revenue over time as the funds were spent. This transaction was reviewed by both City of Denton and Weaver staff, but unfortunately, the review did not include a detailed analysis of the reimbursement clause contained in the RTR contract. As a result, revenue and fund balance was overstated in the Capital Projects Fund in FY 2009-10 and FY 2010-11, and deferred or unearned revenue was understated. While all of the RTR funds should not have been recognized as revenue, it is important to note that these funds will be recognized as revenue over time if the projects are completed as planned. Further, the fund balance associated with these misapplied. With this said, management agrees with the audit adjustment as recommended, and the audit adjustment was recorded in the financial statements presented for FY 2010-11. The management letter provided by the auditor also suggests a more robust review process to determine the proper accounting treatment for unusual transactions in the future. Management also agrees with this comment, and we will work to enhance this process in the future. Representatives from Weaver, LLP, will be present at the City Council meeting to provide their opinion and to answer any questions that you may have. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On February 14, 2012, the Audit/Finance Committee unanimously recommended approval to forward the CAFR and annual audit to the City Council for consideration. EXHIBITS 1)PowerPoint Presentation 2)Comprehensive Annual Financial Report (CAFR) 3)Single Audit Report 4) 5)Management Letter Respectfully Submitted: Bryan Langley Chief Financial Officer City of Denton, Texas Comprehensive Annual Financial Report For Year Ended September 30, 2011 TABLE OF CONTENTS Page INTRODUCTORY SECTION (UNAUDITED): Transmittal Letter ................................................................................................................................................. i Organizational Chart .......................................................................................................................................... vii Certificate of Achievement .............................................................................................................................. viii List of Principal Officials.................................................................................................................................... ix FINANCIAL SECTION: Independent Auditors Report.............................................................................................................................. 1 ............................................................................................................. 3 Basic Financial Statements: Government-wide Financial Statements: Statement of Net Assets ........................................................................................................................ 13 Statement of Activities .......................................................................................................................... 14 Fund Financial Statements: Governmental Fund Financial Statements: Balance Sheet ................................................................................................................................. 16 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Assets ...... 17 Statement of Revenues, Expenditures and Changes in Fund Balances .......................................... 18 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities .............................................................. 19 Statement of Revenues, Expenditures and Changes in Fund Balance Budget to Actual General Fund............................................................................................................................... 21 Proprietary Fund Financial Statements: Statement of Net Assets ................................................................................................................. 22 Statement of Revenues, Expenses and Changes in Fund Net Assets ............................................. 26 Statement of Cash Flows ................................................................................................................ 28 Fiduciary Fund Financial Statements: Statement of Assets and Liabilities ................................................................................................ 30 Notes to Basic Financial Statements ........................................................................................................... 31 Required Supplementary Information: Schedule of TMRS Funding Progress and Contributions Last Three Fiscal Years ................................. 63 and Contributions Last Three Valuation Years ................................................................................. 63 Schedule of Other Post Employment Benefits Funding Progress and Contributions Last Three Valuation Years .................................................................................................................. 64 Combining and Individual Fund Financial Statements and Schedules: Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual: Debt Service Fund ................................................................................................................................ 65 Combining Balance Sheet Nonmajor Governmental Funds..................................................................... 68 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds ............................................................................................................ 70 Schedule of Revenues, Expenditures and Changes in Fund Balances Budget to Actual: Recreation....................................................................................................................................... 72 Police Confiscation ........................................................................................................................ 73 Tourist and Convention .................................................................................................................. 74 Gas Well Revenues Fund ............................................................................................................... 75 Citizens Park Trust ........................................................................................................................ 76 City of Denton, Texas Comprehensive Annual Financial Report For Year Ended September 30, 2011 TABLE OF CONTENTS (Continued) Page FINANCIAL SECTION (continued): Combining and Individual Fund Financial Statements and Schedules (continued): Combining Statement of Net Assets Internal Service Funds ................................................................... 78 Combining Statement of Revenues, Expenses and Changes in Fund Net Assets - Internal Service Funds .......................................................................................................................... 80 Combining Statement of Cash Flows Internal Service Funds .................................................................. 82 Combining Statement of Assets and Liabilities Agency Funds ...................................................................... 84 Combining Statement of Changes in Assets and Liabilities Agency Funds ................................................... 85 Capital Assets Used in the Operation of Governmental Funds: Comparative Schedules by Source .............................................................................................................. 87 Schedule by Function and Activity ............................................................................................................. 88 Schedule of Changes by Function and Activity .......................................................................................... 89 STATISTICAL SECTION (UNAUDITED): Table 1Net Assets by Component ......................................................................................................................... 92 2Changes in Net Assets ............................................................................................................................... 94 3Fund Balances of Governmental Funds .................................................................................................... 98 4Changes in Fund Balances of Governmental Funds ................................................................................ 100 5Assessed Value and Estimated Actual Value of Taxable Property ......................................................... 102 6Property Tax Rates (Per $100 of Assessed Value) Direct and Overlapping Governments .................. 103 7Principal Property Taxpayers .................................................................................................................. 105 8Property Tax Levies and Collections ...................................................................................................... 106 9Ratio of Outstanding Debt by Type......................................................................................................... 108 10Ratio of General Bonded Debt Outstanding ............................................................................................ 110 11Direct and Overlapping Governmental Activities Debt .......................................................................... 111 12Pledged Revenue Coverage ..................................................................................................................... 112 13Demographic and Economic Statistics .................................................................................................... 114 14Principal Employers ................................................................................................................................ 115 15Full-Time Equivalent City Government Employees by Function/Program ............................................ 116 16Operating Indicators by Function/Program ............................................................................................. 118 17Capital Asset Statistics by Function/Program ......................................................................................... 120 OTHER SUPPLEMENTAL INFORMATION: Schedule of Expenditures - Budget and Actual General Fund ............................................................... 123 --7206 February 10, 2012 The Honorable Mayor and Members of the City Council City of Denton Denton, Texas It is with great pleasure that I present to you a copy of the Comprehensive Annual Financial Report (CAFR) of the City of Denton (the City) for the fiscal year ended September 30, 2011. The purpose of the report is to provide the City Council, management, citizens, and other interested parties with detailed information THE REPORT The Texas Local Government Code (103.001) requires an annual audit for municipalities. In addition, the § City Charter (Section 2.13) requires a Certified Public Accountant who, as of the end of the fiscal year, shall make an independent audit of accountsand prepare a report to the City Council and the City Manager.This document fulfills the above mentioned requirements, and topinion is included in the report for the fiscal year ended September 30, 2011. The CAFR is presented in three sections:Introductory, Financial, and Statistical. The Introductory Section includes this transmittal letter, the Supplementary Information, Combining and Individual Fund Financial Statements and Other Supplemental Information, as well as, demographic information, generally presented on a multi-year basis. The responsibility for both the accuracy of the presented information and the completeness and fairness of the presentation of the data, including all disclosures, rests with the City. To the best of our knowledge and belief, the enclosed data is accurate in all material respects and is reported in a manner designed to fairly present the results of our operations in each of the various funds reported by the City. All disclosures necessary to enable The accounting firm of Weaver, LLP statements for the period ended September 30, 2011. As a recipient of federal and state grant awards, a separate audit is prepared to meet the requirements of the Single Audit Act Amendments of 1996 and related OMB Circular A- with applicable laws and regulations related to federal awards. iscussion and A provides a narrative introduction, overview, and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. PROFILE OF THE GOVERNMENT Originally incorporated on September 26, 1866, the City of Denton is now 94.901 square miles and has an estimated population of 114,517.The City is a home rule city and operates under the Council-Manager form of government. The elected seven-member council consists of a Mayor and six Council Members. The Mayor and two Council Members are elected at large, while the remaining representatives are elected from single member districts.The City Council enacts local laws, determines policy, and adopts the annual budget, and the City Manager is the chief executive officer for the City. i The City of Denton is located in the northern portion of the Dallas/Fort Worth Consolidated Metropolitan Statistical Area (CMSA). The City is a part of the Dallas/Fort Worth Metroplex, and is situated at the apex of a triangle based by Dallas (38 miles to the southeast) and Fort Worth (36 miles to the southwest) providing excellent access to and from all parts of the area. The City provides a full range of general government services to its citizens including: public safety (police and fire protection); public works (construction and maintenance of highways, streets and infrastructure); parks and recreation; library; planning and zoning; economic development; and general administrative services. The , solid waste, and airport utility system provides electric, water and wastewater services. The internal service operations consist of the Materials Management, Fleet Services, Risk Retention, Health Insurance, and Technology Services funds. The Materials Management Fund accounts for the financing of Warehouse and Purchasing services which are provided to other City departments. The Fleet Services Fund accounts for the financing of goods and services provided by the municipal garage to other departments within the City. The Risk Retention F compensation, general liability claims, and insurance policies. The Health Insurance Fund accounts for administration of the self-insurance program in the City. The Technology Services Fund provides support for the various information and computer systems within the City. Reprographics, which is part of the Technology Services Fund, provides imaging, print shop, and office services to City departments. The financial statements presented include all government activities, organizations, and functions for which the City is financially accountable as defined by the Governmental Accounting Standards Board (GASB). LOCAL ECONOMY sto grow. After declining by approximately 1.55% in FY 2010-11, the grew by 2.93% in FY 2011-12. While the growth has moderated from levels since just a few years ago, it is important to note that the tax base has increased substantially in the past few years. For instance, the FY 2011-12certified values of $6.412 billion are now $971 million or 17.8% higher than the FY 2006-07 values. After property tax revenues, the second largest source of revenue in the General Fund is sales tax. Representing approximately 24% of overall revenue in the General Fund, sales tax is a significant revenue source that is heavily dependent upon a variety of economic factors. For FY 2010-11, total sales tax revenues equaled $22,871,282, which is $2,386,328, or 11.65%, more than theprior year collections of $20,484,954. For FY 2011-12, sales tax collections are expected to increase by 2.0% over FY 2010-11receipts. Employment and personal income levels continue to be a major indicator of sales tax growth, and according to Regional Economic Updatein the Texas economy slowed slightly in October due to continued declines in state and local government employment and the further weakening of exports. According to Federal Reserve Bank of Dallas surveys, the manufacturing Index increased in October but not enough to offset declines in previous months. Given the deceleration in job growth and recent overall weakness in the leading index, the job forecast for 2012 is for similar or slightly recent pattern in the leading index, combined with the slowdown in job growth, suggests that 2012 employment growth will be 1.5 to 2 ii The below chart from the Regional Economic Updateprovides a graphical illustration of the expected changes. On a more positive note, as depicted below, the Regional Economic Updateindicates consumer confidence in the West South Central Region, which includes Texas, is Fiscal year 2010-11 brought exciting news in economic development. Listed below are just a few of the highlights: and Wal- valued at $12.2 million and Wal-Mart at $15.4 million. The new 30,000 square foot strip center is home to 15 retail and restaurant tenants. Another 30,000 square feet of space adjacent to the center, which it mirrors, is currently under construction. The stores planned for the new center include: Villa iii Grande Mexican Restaurant, AT&T Store, HCA urgent Care, north east corner of the development. Mixed-use development, Unicorn Lake, continues to experience growth. Foundation Management held the official grand opening of their 45,000 square foot headquarters and training facility in September nd Pasta, also opened in 2011. U.S. Aviation completed their 28,400 square foot expansion at a $1.2 million valuation. The company officially gained fixed base operator (FBO) status at the Denton Municipal Airport. The expansion provides space for FBO services and flight training room space. U.S. Aviation is the official flight training school for Chinese commercial aircraft pilots. The company provides a complete package of housing, flight training and other services to the students. Helicopter flight training is also offered through All American Helicopters, a U.S. Aviation company. Denton became the terminus for the Denton County Transportation Authority (DCTA) transit rail line -rail service to the City of Carrollton, where riders can transfer to the Dallas Area Rapid Transit (DART) system and continue into the Dallas/ Fort Worth metroplex. The Downtown transit station is expected to generate other development surrounding the site. The Medpark transit station, located near the Denton Regional Medical Center, serves as the main park and ride station. DCTA buses serve both stations, transporting riders to the stations and/or their final Denton locations. Fortune 50 Target Corporation began construction of their 365,853 square foot frozen and refrigerated food distribution center in April 2011. The facility is located on the southeast corner of Airport and Corbin Roads. This $100 million project received a 65% tax abatement for five years from the City of Denton to help offset costs to improve Airport and Corbin Roads. This facility will service over 230 stores in eight states with frozen and perishable food products. Schlumberger, a Fortune 500, French-owned oilfield service company, held a grand opening in September 2011 for their new 150,000 square foot regional maintenance facility at the Granite Point Industrial Park. Renovation of the building is estimated at $10 million. A Chapter 380 grant previously given to Granite Point was transferred to the company as an incentive for the Denton location. Golden Triangle Mall was purchased by the Herring Group and the Weitzman Group in 2011. The two major retail companies will be making major renovations to the mall to include: the addition of restaurants and stores; improving the building façade; creating a food court; and improving the parking lot and landscaping. A Chapter 380 grant was awarded as an incentive for the renovations to the 1980 mall. The joint venture will invest a minimum of $45 million in the development by October 2014 to qualify for the incentive. Work has begun and a grand reopening is expected in 2012. Peerless Manufacturing selected Denton to expand and consolidate some of their Texas operations. The company designs, engineers and manufactures highly specialized filtration, separation equipment, industrial silencers, heat exchangers, and air pollution reduction systems to energy industry customers involved in gas and oil production, petrochemical processing, and power generating. They plan to build an 80,000 square foot manufacturing facility. The valuation of the proposed project is estimated at $16 million. Peerless received a 40% tax abatement from the City of Denton for the new facility. iv LONG-TERM FINANCIAL PLANNING In conjunction with this document, interested parties are encouraged to read the 1-12 Annual Budget document. This document details the strategic plan, long-term financial policies, program accomplishments, and other key initiatives. The document also includes the long-term financial forecasts for each of the major funds, and a summary of the assumptions that are included in these plans. In addition, the budget document provides an overview of the adopted Capital Improvement Program and planned future debt issuances. The budget document can be obtained from the City of Denton Department by calling (940) 349-8531. The Annual Budget can also be accessed web site at www.cityofdenton.com RELEVANT FINANCIAL POLICIES The City of Denton maintains reserve balances for emergencies. In the General Fund, the reserve was previously established at a level of 12-15% of budgeted expenditures (approximately 45 to 60 days of operating expenditures) to provide stability and flexibility for the organization. As a result of the recent national economic recession, bond rating agencies have increased their scrutiny on the financial stability of local governments, and accordingly, the rating agencies have indicated that a reserve level below 15% would be considered low compared to similarly rated cities. Therefore, the City updated our target reserve balance level to 15-20% of budgeted expenditures for the General Fund in FY 2010-11, which will be more commensurate with a similarly rated city. This increased reserve requirement will address the rating agency concerns, and more importantly, will provide the City with increased financial flexibility in the future. As described in the accompanying CAFR document, the unassigned fund balance is $22.8 million, or 25.4%, of annual budgeted expenditures for the General Fund for the fiscal year ended September 30, 2011. Beginning in FY 2011-12, the City adopted a policy which requires a minimum ending working capital balance (current assets minus current liabilities) of at least 8% of budgeted expenditures for each of the proprietary funds. If the working capital level should fall below the desired minimum, the City will implement necessary corrective action with a five-year plan to restore the working capital balance to 8% of budgeted expenditures. Additionally, the Electric, Water, Wastewater, and Solid Waste funds, also established minimum rate stabilization reserve balance levels in FY 2011-12 according to the unique operational aspects of each utility. The rate stabilizations funds are intended to minimize the fluctuation in rates due to unforeseen revenue and expenditure variances. The minimum rate stabilization balance is established as 12% of expenses for the Electric and Wastewater funds, 16% for expenses for the Water fund, and 4% of expenses for the Solid Waste fund. If the rate stabilization balance falls below the desired level, the City will implement necessary corrective action within a five-year plan to restore the rate stabilization balances to the levels outlined above. The City of Denton has adopted an Investment Policy which guides the investment of all City funds. In accordance with State law, the policy is reviewed annually by the City Council to ensure that public funds are being invested in a conservative and prudent fashion. In addition, the City also annually reviews and approves a Debt Management policy. The purpose of this policy is to provide general guidelines regarding the issuance of City debt and the use and limitation of such debt. The City complied with all aspects of the Investment and Debt Management policies during fiscal year 2011. MAJOR INITIATIVES In FY 2010-11, the City increased funding for street maintenance and repair activities. In addition, the adopted FY 2010-11 budget included additional resources for street maintenance in the newly annexed areas of the City. Additional funding for bridge and guardrail repairs was also included in the budget as well. Public safety funding continues to be a priority for the City of Denton as well. In FY 2010-11, the City provided additional funding for personal protective equipment in the Fire Department to replace bunker gear Funding was also provided in the Municipal Court to hire a new collections specialist position. v The City also continues to emphasize community service programs. The FY 2010-11 budget included additional funding for a newly created gas well inspection program in the Code Enforcement Department. A new gas well administrator, two new gas well inspectors, and an administrative assistant were included in the budget to manage this function, and expenses will be recovered through permit and inspection fees. AWARDS AND ACKOWLEDGEMENTS in Financial Reporting to the City for its Comprehensive Annual Financial Report for the fiscal year ended September 30, 2010, for the twenty-sixth consecutive year. In order to be awarded the Certificate of Achievement in Financial Reporting, the City must publish an easily readable and efficiently organized Comprehensive Annual Financial Report. This report satisfies both generally accepted accounting principles and applicable legal requirements. The Certificate of Achievement is held for a period of one year only. I believe our current Comprehensive Annual Financial Report continues to meet the Certificate of Achievement requirements, and I am submitting it to GFOA to determine its eligibility for another certificate. The City also received the GFOA award for Distinguished Budget Presentation for its fiscal year 2010-11 Annual Budget for the twenty-fifth consecutive year. In order to qualify for the Distinguished Budget guidelines established by GFOA. These guidelines he operations guide, financial plan, policy document, and communications device. The City has submitted its fiscal year 2011-12 Annual Budget to GFOA to determine its eligibility for another certificate. I believe it continues to meet the Distinguished Budget Presentation Award criteria. In 2011Department earned the Excellence in Procurement Award from the National Purchasing Institute, Inc. (NPI) for the thirteenth year in a row. This award is achieved by those organizations that demonstrate excellence in procurement by achieving a high score on standardized criteria designed to measure innovation, professionalism, productivity, and leadership. NPI represents purchasing officials employed by national, state, and local governments; educational institutions; and tax-supported and public entities throughout the country. I would like to thank the City Council for their strong leadership and support that helped make the presentation of this report possible. I would also like to thank the City Manager, Finance staff, department directors, division heads and especially the Accounting Division staff for their diligent efforts in the preparation of the annual financial report. Bryan Langley Chief Financial Officer vi CITYOFDENTON CURRENTORGANIZATIONALCHART vii CITY OF DENTON, TEXAS List of Principal Officials September 30, 2011 ELECTED OFFICIALS Title Name Mayor Mark Burroughs Mayor Pro-Tem Pete Kamp Councilmember Jim Engelbrecht Councilmember Dalton Gregory Councilmember James King Councilmember Kevin Roden Councilmember Chris Watts CITY OFFICIALS Title Name City Manager George C. Campbell Assistant City Manager Howard Martin Assistant City Manager Jon Fortune Assistant City Manager Fred Greene Chief Financial Officer Bryan Langley City Attorney Anita Burgess Municipal Judge Robin Ramsay City Secretary Jennifer Walters ix To The Honorable Mayor and Members of City Council City of Denton, Texas We have audited the accompanying financial statements of the gov business-type activities, each major fund, and the aggregate remaining fund information of the City of Denton, Texas (the City) as of and for the year ended September 30, 2011, which collectively comprise the City These financial statements are the responsibility of the City Our responsibility is to express opinions on these financial statements based on our a We conducted our audit in accordance with auditing standards gene United States of America and the standards applicable to financial audi Auditing Standards, issued by the Comptroller General of the Uni Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fi An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statemen We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities business-type activities, each major fund, and the aggregate remaining fund information of the City of Denton, Texas, as of September 30, 2011, and the respective changes in financial position, and, where applicable, cash flows, thereof and the budgetary comparison for the General Fund for the year then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note I.D.10 to the basic financial statements, tCity implemented GASB Statement No. 54, In accordance with Government Auditing Standards, we have also issued our report dated February 10, 2012, on our consideration of the City of Denton's internal control over financial reporting and our tests of its compliance with certain provision grants. The purpose of that report is to describe the scope of opinion on the internal control over financial reporting or on c part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. City of Denton Page 2 The nalysis (on pages 3 through 12), the retirement plan funding progress and contributions (on page 63), and the schedule of other post employment benefits (on page 64) are not a required part of the basic financial statements but are supplementary information required by the Governmental Accounting Standards Board. We have applied certain limited procedures, which consisted princip regarding the methods of measurement and presentation of the req information. However, we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming opinions on t collectively comprise the Citycombining and individual fund financial statements and schedules, capital assets used in the operation of governmental funds schedules, the statistical section, and the other supplementary information as listed in the table of contents are presented for purposes of not a required part of the basic financial statements. The combining and individual fund financial statements and schedules, capital assets used in the operation of governmental funds schedules, and the other supplementary information have been subjected to the auditing procedures applied in the audit of the basic financial statement stated in all material respects in relation to the basic financi The introductory section and the statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statement accordingly, we express no opinion on them. WEAVER AND TIDWELL, L.L.P. Dallas, Texas February 10, 2012 CITY OF DENTON, TEXAS SEPTEMBER 30, 2011 is is designed to (a) assist the reader in focusing material deviations from the financial plan (the approved budget), and (e) identify individual fund issues or concerns. activities, resulting changes and currently known facts, please read it in conjunction with the Transmittal Letter (beginning on page i) beginning on page 13). FINANCIAL HIGHLIGHTS The assets of the City exceeded its liabilities at the close of the fiscal year ended September 30, 2011 by $625,085,345 (net assets). Of this amount, $192,711,409 (unrestricted net assets) may be used to meet the o citizens and creditors. increased by $31,620,807.This increase can be attributed to the net revenue of the governmental activities, business-type activities and the contribution of capital assets by developers. As of September 30, 2011balances of $70,924,005, adecrease of $12,766,305 in comparison with the prior fiscal year. Compared to the prior year, revenues were higher due primarily to higher franchise fees of $1.8 million, higher sales and property tax of $3.4 million, higher intergovernmental transfers of $3.9 million, offset by lower fees for service of $3.8 million. Expenses reflect higher cost for public safety of $2.2 million, higher costs for public works of $1.0 million, offset by lower costs for general government of $1.1 million, and lower capital expenditures of $1.2 million. New proceeds from the issuance of long-term debt added $3.5 million in new funding. Net transfers out increased by $3.3 million due the creation of a new Airport enterprise fund and the transfer of all Airport related assets and liabilities to the new business type fund. Approximately 31.1% of the $70,924,005, or $22,075,374, is available for spending at the governmen discretion (unassigned fund balance). At the end of the fiscal year, the unassigned fund balance for the General Fund was $22,834,108, or 25.4% of budgeted general fund expenditures. increased by $981,536 during the fiscal year. The primary reasons for the changes are the issuance of $10.9 million of general obligation refunding bonds, $32.1 million of certificates of obligation, along with the normal pay down of general obligation bonds and certificates of obligation of $17.6 million, and the normal pay down of revenue bonds of $13.2 million.The general obligation refunding bonds reduced the utility revenue bonds outstanding by $9.1 million. OVERVIEW OF THE FINANCIAL STATEMENTS are comprised of three components: (1) government-wide financial statements, (2) fund financial statements and (3) notes to the financial statements. This report also contains other supplementary information in addition to the basic financial statements themselves. Government-wide Financial Statements. The government-wide financial statements are designed to provide readers wit-sector business. between the two reported as net assets. Over time, increases or decreases in net assets may serve as a useful indicator of whether the financial position of the City is improving or deteriorating. t cash is received or paid. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but not used vacation leave). 3 CITY OF DENTON, TEXAS nued) SEPTEMBER 30, 2011 Both the statement of net assets and the statement of activities are prepared using the accrual basis of accounting as opposed to the modified accrual basis. In its Statement of Net Assets and the Statement of Activities, the City is divided between two kinds of activities: Governmental activities libraries, development, public services and operations, public works, building inspection, technology services and general administration. Property taxes, sales taxes and franchise fees finance most of these activities. Business-type activities . The City charges a fee to customers to cover the cost of services it provides. The s (electric, water and wastewater), solid waste and airport activities are reported here. The government-wide financial statements can be found on pages 13 - 15 of the report. Fund Financial Statements. A fund is a grouping of related accounts used to maintain control over resources that have been segregated for specific activities or objectives. Fund financial statements provide detailed information about the most significant funds, not the City as a whole. Some funds are required to be established by state law or bond covenants. However, the City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants and other monies. The below illustration summariz financial statements. 4 CITY OF DENTON, TEXAS nued) SEPTEMBER 30, 2011 All of the funds of the City can be divided into three categories: governmental funds, proprietary funds and fiduciary funds. Governmental funds which focus on how money flows into and out of those funds and the balances left at year-end that are available for spending.These funds are reported using an accounting method identified as the modified accrual basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short- government operations and the basic services it provides. Governmental fund information helps the reader determine whether there are more or fewer financial resources that can be spent in the near future to finance the C presented for governmental activities in the government-wide financial statements, readers may better understand the long-ar-term financing decisions. The relationship or differences between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds are detailed in a reconciliation following the fund financial statements. The City of Denton maintains eleven governmental funds. Information is presented separately in the governmental funds balance sheet and in the governmental funds statement of revenues, expenditures and changes in fund balances for the general fund, debt service fund and capital projects fund, all of which are considered to be major funds. Data from the other eight governmental funds are combined into a single, aggregated presentation. Individual fund data for seven of these non-major governmental funds along with an aggregate of all other is provided in the form of combining statements elsewhere in this report. Proprietary funds . The City charges customers for certain services it provides, whether to outside customers or to other units within the City. These services are generally reported in proprietary funds. Proprietary funds are reported in the same manner that all activities are reported in the Statement of Net (a component of proprietary funds) are similar to the business-type activities that are reported in the government-wide statements but provide more detail and additional information, such as cash flows. The internal service funds (the other component of proprietary funds) are utilized to report activities that provide supplies and services for the -insurance fund and equipment maintenance function. Because these services benefit both governmental and business-type functions, they have been included in both the governmental and business-type activities in the government-wide financial statements. The City of Denton maintains five enterprise funds. The City uses enterprise funds to account for its electric, water and wastewater systems, solid waste and airport operations. The funds provide the same type of information as the government-wide financial statements, only in more detail and include some of the internal service fund-type activity. The City considers all enterprise funds to be major funds. Fiduciary funds . Fiduciary funds are used to account for resources held for the benefit of parties outside the government. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not fiduciary funds is much like that used for proprietary funds. Agency funds are a component of fiduciary funds. Agency funds differ from other fiduciary funds in that they do not typically involve a formal trust as receipt, temporary investment and remittance of fiduciary resources to individuals, private organizations, or other governments. The City maintains three fiduciary funds , and other agency funds. The City uses agency funds to account payroll and associated liabilities, employee-purchased insurance and other similar relationships. Notes to the financial statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 31 - 62 of this report. 5 CITY OF DENTON, TEXAS nued) SEPTEMBER 30, 2011 GOVERNMENT-WIDE FINANCIAL ANALYSIS As of September 30, 2011assets were $625,085,345, of which $140,503,694 can be attributed to governmental activities and $484,581,651 attributed to business-type activities. This analysis nmental and business- type activities. The largest portion of the (63.8%) reflects its investment in capital assets (e.g., land, building, machinery and equipment), less any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. 6 CITY OF DENTON, TEXAS nued) SEPTEMBER 30, 2011 Governmental activities de$2,833,046 with a prior period adjustment decreasing governmental activities an additional $10,674,744 and business- net assets by $45,128,597.The key elements of these increases are contained in Table 2. Table 2 Changes in Net Assets (in thousands) GovernmentalBusiness-type ActivitiesActivitiesTotal 201120102011201020112010 Revenue: Program Revenue: Charges for services$ 15,674$ 14,781$ 215,749$ 187,914$ 231,423$ 202,695 Operating grants and contributions 4,271 3,407 - - 4,271 3,407 Capital grants and contributions 7,498 4,576 5,053 5,154 12,551 9,730 General Revenue: Property tax 44,145 43,145 - - 44,145 43,145 Sales tax 22,871 20,485 - - 22,871 20,485 19,324 17,458 - - 19,324 17,458 Franchise tax Hotel occupancy tax 1,513 1,302 - - 1,513 1,302 Beverage tax 360 348 - - 360 348 Bingo tax 22 22 - - 22 22 Investment Income 459 640 1,472 1,654 1,931 2,294 Miscellaneous 2,371 5,691 278 257 2,649 5,948 Total revenue 118,508 111,855 222,552 194,979 341,060 306,834 Expenses: General government 28,199 29,570 - - 28,199 29,570 Public safety 49,154 47,999 - - 49,154 47,999 Public works 16,089 15,768 - - 16,089 15,768 Parks and recreation 12,422 12,854 - - 12,422 12,854 Interest on long-term debt 5,047 5,121 - - 5,047 5,121 - - 117,770 114,904 117,770 114,904 Electric Water - - 28,293 27,220 28,293 27,220 Wastewater - - 20,455 20,560 20,455 20,560 Solid waste - - 20,009 18,029 20,009 18,029 Airport - - 1,326 - 1,326 - Total expenses 110,911 111,312 187,853 180,713 298,764 292,025 Increase in net assets before transfers 7,597 543 34,699 14,266 42,296 14,809 (10,430) 483 10,430 (483) - - Transfers Increase in net assets (2,833) 1,026 45,129 13,783 42,296 14,809 Net assets at beginning of year, restated 143,336 142,310 439,453 425,670 582,789 567,980 $ 140,503$ 143,336$ 484,582$ 439,453$ 625,085$ 582,789 Net assets at end of year Governmental activities. The most significant governmental activities expense was in providing public safety, which incurred expenses of $49,154,371. These expenses were funded by revenues collected from a variety of sources, with the largest being from property taxes, which are $44,144,844 for the fiscal year ended September 30, 2011.The most significant portion of public safety is the cost of personnel, which totaled $40,029,886.Other significant governmental activities expense for the City includes general government, which incurred $28,198,604 in expenses, of which $16,496,477 represented personnel charges.Decreased expenses for governmental activities includes a decrease of $1.1 million for general government due to personnel costs, which is offset by a$1.0 million increase in public safety. The $6.7 million increased revenues in governmental activities are mainly due to a increase of $0.9 million in charges for services, $0.9 million in operating grants and contributions due primarily to a CDBG grant, $2.9 million increase in capital 7 CITY OF DENTON, TEXAS nued) SEPTEMBER 30, 2011 grants and contribution due to a funding agreement with Texas Department of Transportation for the distribution of regional toll revenues. Revenues in the governmental activities included an increase of $1.0 million for Property tax and an increase of $2.4 million for sales tax due to an improving economy. The $1.8 million in higher franchise fees is due to the hot and dry summer and increased usage. The $3.3 million decrease in miscellaneous revenues is mainly due to the gas well revenues in connection with the Airport, and the transfer out to business type activities of $10.0 million due to the creation of the new Airport enterprise fund in 2011. The governmental activitiesinclude a restatement from a prior period adjustment of $10.7 million related to fiscal year 2010, which is a deferment of the revenues received in connection with the funding agreement with Texas Department of Transportation for the distribution of regional toll revenues. The City will recognize earning the revenues in the Statement of Activities and the Governmental Fundsstatement of revenues, expenditures, and changes in fund balances as the projects are built out and completed. The $3,871,487 of intergovernmental revenues shown in the Capital Projects fund is the recognition in the current period that portion of the projects that have been completed. All cash remaining is shown as deferred revenues in the current liabilities section of the Capital Projects balance sheet. Business-type activities . Business-$45,128,597, accounting for all of the growth in the entity-wide net assets. A key element of this increase is due to the creation of the new Airport enterprise fund in 2011, and the $10.0 million transfers of the asset and liabilities from the Governmental type funds to the Business type funds.Charges for Electric residential services provided $7.1 million in higher revenue due to a hotter than normal summer while Energy Cost Adjustment (ECA) rate revenue increased by $5.0 million. Water charges for residential and commercial services provided an additional $7.0 million in revenue due to the lack of rain fall in the area and a 9% rate increase. The Solid Waste revenues provided an increase of $2.6 million due to a rate increase for both residential and commercial customers. Water and Wastewater collected $3.6 million and $1.6 million respectively in Impact fees. Capital contributions which represent a major revenue source for the Water and Wastewater during the current fiscal year, producing $5.1 million in revenue. Contributions of assets arise from new property development within the City.The Airport gas well revenues contributed an additional $2.4 million to the increase in net assets. Interest expense included an increase of $2.3 million in Electric due the issuance of additional bonds in fiscal year 2010. As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. Governmental funds. -term inflows, outflows, and balances of resources available to spend. Such information is useful in assessing the assigned fund balance may serve as a useful measure of a balance of $70.9 million, a decrease of $12.8 million in comparison with the prior year. Approximately $22.1 million constitutes unassigned The remainder of the fund balance has been classified to indicate that it is not available for new spending because it has already been classified as restricted ($41.8 million), committed ($4.2 million), and assigned ($2.8 million). The General Fund is the chief operating fund of the City. At September 30, 2011, the unassigned fund balance of the General Fund was $22.8 million, or 25.4% of budgeted general fund expenditures. The General Fund also has $1.6 million of fund balance committed to 1) the transfer of $0.9 million to the street improvement fund in FY 2011-12 and 2) the use of fund balance in the following fiscal year of $0.7 million. The Fund Balance of the General Fund increased by $2.9 million during the current fiscal year. The change in fund 8 CITY OF DENTON, TEXAS nued) SEPTEMBER 30, 2011 balance is primarily due to expenditures, including other financing uses, of $82.5 million and $85.4 million of revenue, including other financing sources. Revenues were higher compared to the previous year due to higher taxes of $3.5 million, and franchise fees of $1.8 million, offset by lower fines and forfeitures of $0.2 million and fees for service of $0.3 million.Expenditures were lower compared to the previous year due to $1.1 million of lower general government personnel costs and $1.0 million of additional public safety personnel costs. Personnel costs for general government, public works, parks and recreation were lower due to a vacancy management program. Both general government and parks and recreation were lower due to personnel vacancies, while personnel for public safety continued to receive their step raises. All personnel costs were higher due to increased benefit costs. At the end of the fiscal year, the capital projects fund has a total fund balance of $33.9 million, a decrease of $11.1 million. The total fund balance is made up of $31.9 million that is restricted and the $2.1 million that is assigned for capital construction and acquisition. In 2011, the City received $5.7 million of proceeds from the issuance of debt and $3.9 million of regional toll revenues from the Texas Department of Transportation for street construction while expending $11.3 million on construction and acquisition. In addition, the capital projects fund received $0.2 million in interest income, and $1.3 million due to other government contributions and aid in construction. The debt service fund has a total fund balance of $3.3 million, all of which is restricted for the payment of debt service. The overall decrease in the debt service fund balance of $0.1 million was due to a $0.1 million decrease in debt issuance cost and an increase of $0.4 million in principal and interest costs while revenues decreased by $0.2 million. Proprietary funds. government-wide financial statements, but in more detail. Unrestricted net assets in Electric, Water, and Wastewater at September 30, 2011 are $87.7 million, $34.9 million, and $17.7 million respectively. Solid Waste has unrestricted net assets of $3.1 million and the Airport Fund has unrestricted net assets of $7.3 million. The results reflect an increase of unrestricted net assets in the Electric fund of $12.1 million, an increase in the Water fund of $3.2 million, an increase in the Wastewater fund of $2.4 million, and an increase of $0.9 million in Solid Waste. The Airport fund increase of $7.3 is mainly due to the creation of the new Airport enterprise fund in 2011, and the transfer of the asset and liabilities from the Governmental funds. Other factors concerning the finances of these funds have already -type activities. BUDGETARY HIGHLIGHTS During fiscal year 2010-2011, one formal amendment to adjust the City of Denton Annual Program of Services was approved by Council. The Council increased the Materials Management Fund by $3,900,000 to provide for additional funding capacity for costs of goods sold. GENERAL FUND HIGHLIGHT For fiscal year 2010-11, General Fund actual expenditures (including transfers) on a budgetary basis were $87.3 million compared to the budget of $90.0 million. The $2.7 million expense variance was primarily due to reduced costs of $2.3 million for the general government due to economic incentives not paid out, and due to personnel cost savings. The positive budget variance of $0.5 million in public works is due to maintenance costs being transferred to a capital project. The $0.3 million positive variance for parks and recreation is due to personnel cost savings.Actual revenue (including transfers and sale of capital asset) on a budgetary basis was $90.2 million compared to the original budget of $88.8 million. Of the $1.4 million revenue variance, approximately $0.1 million was due to increased ad valorem tax collection, $1.3 million due to a recovering economy and increased sales tax collection, $0.9 million due to increased franchise fees linked to higher utility 9 CITY OF DENTON, TEXAS nued) SEPTEMBER 30, 2011 usage by our customers.Offsetting the positive revenue variances are $0.5 million lower court fines, and $0.3 million less recreation, planning and building fees. General Fund unassigned fund balance at September 30, 2011 is $22.8 million, or 25.4% of budgeted expenditures.Below is a listing of the ending unassigned balances for the prior year, as well as the fiscal year 2010-11 unassigned fund balance. For years where the actual ending balance has exceeded the -time expenditures. By using the fund balance primarily for one-time expenditures, the financial impact on future budgets is reduced. ActualActual 9/30/109/30/11 Unassigned balance$19,775,512$22,834,108 % of total budgeted expenditures21.7%25.4% Policy level12-15%15-20% The largest reve is comprised of two components. The first is the operations and maintenance component that is used to The second component is the debt portion that is used to calculate revenue to pay a decrease of 1.55%compared to the prior year certified value.The current property tax year included $135 million of new construction that was added to the tax roll. Excluding those new construction values, existing property values on the tax rolls decreased by $233 million in 2010 as compared to 2009. The 2010-11 ad valorem tax rate increased $0.02323 per $100 of valuation to $0.68975. CAPITAL ASSET AND DEBT ADMINISTRATION Capital assets. At the end of fiscal year 2011, the City had $756,812,929 invested in a broad range of capital assets, including police and fire equipment, buildings, park facilities, roads, bridges and water and sewer lines (see Table 3 below). This amount represents a net increase (including additions and deductions) of $24,072,710, or 3.3% over the prior fiscal year. Table 3 Capital Assets at Year-end (Net of Accumulated Depreciation, in Thousands) GovernmentalBusiness-type ActivitiesActivitiesTotals 201120102011201020112010 Land$12,949$ 12,923$ 11,872$ 10,749$24,821$23,672 Landfill improvements--4,6914,8954,6914,895 Buildings and improvements38,44241,5009,5187,81147,96049,311 Plant, machinery and equipment16,23718,973131,322120,578147,559139,551 Water rights--54,31455,01054,31455,010 Infrastructure81,70987,715250,492245,543332,201333,258 Construction in progress45,68340,65499,58486,389145,267127,043 Total capital assets$195,020$201,765$561,793$530,975$756,813$732,740 10 CITY OF DENTON, TEXAS nued) SEPTEMBER 30, 2011 This yearasset additions included: on pages 42 - 44 of this report. Debt. At year-end, the City had $501.7 million in bonds and notes outstanding as compared to $498.7 million at the end of the prior fiscal year, an increase of 0.6%, as shown in Table 4. Table 4 Outstanding Debt at Year-end (in thousands) GovernmentalBusiness-type ActivitiesActivitiesTotals 201120102011201020112010 General obligation bonds$73,396$77,315$ 47,209$ 39,600$120,605$116,915 Certificates of obligation43,03645,728150,554126,207193,590171,935 Revenue bonds--187,525209,885187,525209,885 Total$116,432$123,043$385,288$375,692$501,720$498,735 These amounts do not include net unamortized premiums/(discounts) of $14,553,989 or net deferred gain/(loss) on refunding of ($6,838,860).During the current fiscal year, the City issued debt one time on April 5, 2011.The new debt resulted primarily from the issuance $32.1 million in certificates of obligation primarily for utility operations, and $10.9 million in general obligation refunding bonds. Normal pay down in general obligation bonds was $7.2 million, $10.4 million in certificates of obligation and $13.1 million in utility revenue bonds. No utility revenue bonds have been issued since 2010. Management has elected to utilize general obligation bonds as a result of lower interest rates. Service, 2 and A-, respectively. The City is permitted by Article XI, Section 5 of the State of Texas Constitution to levy taxes up to $2.50 per $100 of assessed valuation for general governmental services including the payment of principal and interest on general obligation long-term debt. The current ratio of tax-supported debt to certified assessed value of all taxable property is 2.35%. Other long-term liabilities. The City maintains a self-insurance program for general liability, auto liability, compensation. Private insurance companies cover claims for property loss over $50,000 per occurrence and judgments of $2.5 million outstanding at year-end compared with $2.6 million at the end of the prior fiscal 11 CITY OF DENTON, TEXAS nued) SEPTEMBER 30, 2011 year. Other obligations include accrued vacation pay and sick leave. More detailed information about the -term liabilities is presented in Note IV. G., on pages 47 - 53 of this report. While growth for the Denton community is expected to be moderate in the short term, demands for city services is expected to remain strong over the long term. As a result, the 2011-12 Budget includes an ad valorem tax rate of $0.68975/$100 valuation, and maintains the same rate in comparison to the prior year. While sales tax has increased over the prior year by 11.6%, financial forecast projects an increase of 2.0% in FY2011-12.Expenditures were also reduced by approximately $1.5 million in the General Fund due primarily to the creation of a separate Streets Improvement Fund. The 2011-12 budget includes no base rate increases for electric customers.The Water budget includes a 9.5% rate increase for all residential and commercial rates. The base rates changes for Wastewater retail or wholesale customers includes a 11% increase.Various rates were adopted for Solid Waste residential, commercial and landfill customers that included increases of between 2% and 3.9%.Other minor fee adjustments were also approved for the electric, water, and solid waste fee schedules. REQUESTS FOR INFORMATION tion provided in this report or requests for additional financial information should be addressed to the City of Denton Finance Department, 215 E. McKinney, Denton, Texas 76201. 12 CITY OF DENTON, TEXASExhibit I STATEMENT OF NET ASSETS SEPTEMBER 30, 2011 Primary Government GovernmentalBusiness-type ActivitiesActivitiesTotal ASSETS: Current assets: Cash, cash equivalents and investments, at fair value$ 45,639,930$ 149,073,516$ 194,713,446 Receivables, net of allowances: Taxes4,903,177-4,903,177 Accounts-14,409,88014,409,880 Unbilled utility service-9,033,7709,033,770 Interest192,487624,599817,086 Other4,107,461565,0284,672,489 Internal balances(10,007,097)10,007,097- Due from other governments1,371,449-1,371,449 Inventory4,306,387-4,306,387 Prepaid items161,17756,433,51956,594,696 Deferred debt issuance costs133,997264,239398,236 Total current assets50,808,968240,411,648291,220,616 Noncurrent assets: Restricted assets: Cash, cash equivalents and investments, at fair value58,299,267112,337,361170,636,628 Escrow deposits937,18650,000987,186 Accrued interest248,756470,707719,463 Other receivables122,782-122,782 Deferred debt issuance costs733,0871,702,5272,435,614 Capital assets not being depreciated: Land12,948,57111,871,87324,820,444 Construction in progress45,683,23199,583,956145,267,187 Capital assets, net of accumulated depreciation: Buildings38,442,0429,517,90147,959,943 Plant, machinery and equipment16,236,578131,322,418147,558,996 Infrastructure81,709,132250,491,864332,200,996 Landfill improvements-4,690,9144,690,914 Water rights-54,314,44954,314,449 Total noncurrent assets255,360,632676,353,970931,714,602 Total assets 306,169,600916,765,6181,222,935,218 LIABILITIES: Current liabilities: Accounts payable4,953,24711,573,31216,526,559 106,58332,015138,598 Retainage payable -4,292,4044,292,404 Deposits Accrued interest700,50811,476711,984 Due to other governments181-181 Noncurrent liabilities due within one year16,379,14227,131,10843,510,250 458,831-458,831 Other liabilities Unearned revenue20,404,6893,683,86824,088,557 Payable from restricted assets: Accounts payable786,0203,083,3783,869,398 Retainage payable68,435815,548883,983 Accrued interest-4,357,5524,357,552 43,857,63654,980,66198,838,297 Total current liabilities Noncurrent liabilities: Noncurrent liabilities due in more than one year121,808,270377,203,306499,011,576 Total noncurrent liabilities121,808,270377,203,306499,011,576 Total liabilities165,665,906432,183,967597,849,873 NET ASSETS: Invested in capital assets, net of related debt103,073,465296,006,601399,080,066 Restricted: Restricted for debt service2,839,55625,748,45528,588,011 Restricted for capital acquisition-4,705,8594,705,859 Unrestricted34,590,673158,120,736192,711,409 Total net assets$ 140,503,694$ 484,581,651$ 625,085,345 The notes to the basic financial statements are an integral part of this statement. 13 CITY OF DENTON, TEXAS STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2011 Program Revenues OperatingCapital Charges forGrants andGrants and Functions/ProgramsExpensesServicesContributionsContributions Primary government: Governmental activities: General government$ 28,198,604$ 4,108,687$ 3,297,327$ 1,810,708 Public safety49,154,3717,075,328839,139289,990 Public works16,089,302525,024-5,397,210 Parks and recreation12,421,8933,964,517134,231- Interest expense5,046,724--- Total governmental activities 110,910,89415,673,5564,270,6977,497,908 Business-type activities: Electric system117,769,599131,435,554-- Water system28,293,10936,790,720-578,374 Wastewater system20,455,42423,338,841-1,537,974 Solid waste20,008,74620,979,967-61,960 Airport1,326,3973,203,4262,874,716 Total business-type activities187,853,275215,748,508-5,053,024 Total primary government$298,764,169$231,422,064$ 4,270,697$ 12,550,932 General revenues: Taxes: Property tax Sales tax Franchise fees Hotel occupancy tax Beverage tax Bingo tax Investment income Miscellaneous Transfers Total general revenues and transfers Change in net assets Net assets at beginning of year Prior period adjustment (Note I.F.) Net assets at beginning of year - as restated Net assets at end of year The notes to the basic financial statements are an integral part of this statement. 14 Exhibit II Net (Expense) Revenue and Changes in Net Assets Primary Government GovernmentalBusiness-type ActivitiesActivitiesTotal $ (18,981,882)$ -$ (18,981,882) (40,949,914)-(40,949,914) (10,167,068)-(10,167,068) (8,323,145)-(8,323,145) (5,046,724)-(5,046,724) (83,468,733)-(83,468,733) -13,665,95513,665,955 -9,075,9859,075,985 -4,421,3914,421,391 -1,033,1811,033,181 4,751,7454,751,745 -32,948,25732,948,257 (83,468,733)32,948,257(50,520,476) 44,144,844-44,144,844 22,871,282-22,871,282 19,324,244-19,324,244 1,513,468-1,513,468 359,671-359,671 21,963-21,963 459,6151,472,0781,931,693 2,370,682278,1802,648,862 (10,430,082)10,430,082- 80,635,68712,180,34092,816,027 (2,833,046)45,128,59742,295,551 154,011,484439,453,054593,464,538 (10,674,744)-(10,674,744) 143,336,740439,453,054582,789,794 $ 140,503,694$ 484,581,651$ 625,085,345 15 CITY OF DENTON, TEXASExhibit III BALANCE SHEET GOVERNMENTAL FUNDS SEPTEMBER 30, 2011 OtherTotal GeneralCapitalGovernmentalGovernmental FundDebt ServiceProjectsFundsFunds ASSETS: Cash, cash equivalents and investments, at fair value$22,153,356$ 3,226,219$ 54,850,066$ 9,076,374$ 89,306,015 Receivables, net of allowances for uncollectibles: Taxes4,599,735303,442--4,903,177 Accrued interest100,44013,518229,82936,140379,927 Other3,500,0144,427-505,1244,009,565 Interfund receivables138,056--203,993342,049 Due from other governments379,296--992,1531,371,449 Total assets $30,870,897$ 3,547,606$ 55,079,895$ 10,813,784$ 100,312,182 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable3,367,8607,542786,020378,9194,540,341 Retainage payable--36,197106,583142,780 Interfund payables---203,993203,993 Due to other governments181---181 Other liabilities458,831---458,831 Deferred revenues2,620,022260,98420,392,251768,79424,042,051 Total liabilities6,446,894268,52621,214,4681,458,28929,388,177 FUND BALANCES: Restricted for: Debt Service-3,279,080--3,279,080 Parks and recreation--4,043,5345,517,7109,561,244 Streets and drainage projects--21,857,670-21,857,670 Other capital projects--5,907,877-5,907,877 Other grants and purposes---1,223,8221,223,822 Committed to: Streets921,779---921,779 Parks and recreation---1,427,7171,427,717 Other purposes---1,867,6391,867,639 Assigned to: Streets and drainage projects--724,241-724,241 Use of reserves668,116---668,116 Other capital projects--1,332,105-1,332,105 Other purposes---77,34177,341 Unassigned 22,834,108--(758,734)22,075,374 Total fund balances24,424,0033,279,08033,865,4279,355,49570,924,005 Total liabilities and fund balances$30,870,897$ 3,547,606$ 55,079,895$ 10,813,784$ 100,312,182 The notes to the basic financial statements are an integral part of this statement. 16 CITY OF DENTON, TEXASExhibit IV RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS AS OF SEPTEMBER 30, 2011 Total fund balances - governmental funds (Exhibit III)$ 70,924,005 Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities are not financial resources and therefore are not reported as assets in governmental funds. 195,019,554 Certain receivables will be collected next year but are not available soon enough to pay for the current period's expenditures and therefore are reported as deferred revenues in the funds.3,637,362 An internal charge to business-type activities is not recorded at the fund level.(7,478,893) Several internal service funds are used by the City's management. The assets and liabilities of the internal service funds are included with governmental activities. Total assets of internal service funds$ 28,359,983 Less: Deferred debt issuance costs(15,966) Less: Capital assets reported above(8,024,091) Less: Total liabilities of internal service funds(12,577,416) Liabilities reported below5,032,68212,775,192 Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore are not reported as liabilities in the funds. Long-term liabilities at year-end consist of: General obligation bonds payable$ (73,395,650) Certificates of obligation payable(43,036,419) Bond (premiums)/discounts(1,475,674) Deferred loss on refunding732,705 Deferred charges for issuance costs867,084 Accrued interest on the bonds(700,508) Capital leases payable(1,879,906) Municipal pension obligation(3,816,746) Other post employment benefits liability(2,046,437) Compensated absences (9,621,975)(134,373,526) Total net assets of governmental activities (Exhibit I)$ 140,503,694 The notes to the basic financial statements are an integral part of this exhibit. 17 CITY OF DENTON, TEXASExhibit V STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 OtherTotal GeneralCapitalGovernmentalGovernmental FundDebt ServiceProjectsFundsFunds REVENUES: Taxes$53,492,664$13,907,958$ -$ 1,513,468$ 68,914,090 Licenses and permits1,460,548---1,460,548 Franchise fees19,324,244---19,324,244 Fines and forfeitures4,216,247--712,8634,929,110 Fees for services5,656,550--2,739,0338,395,583 Investment revenue 172,71935,231198,08153,584459,615 Intergovernmental825,549-3,871,4876,199,02710,896,063 Miscellaneous193,022-1,283,058435,5541,911,634 Total revenues85,341,54313,943,1895,352,62611,653,529116,290,887 EXPENDITURES: Current: General government19,495,940-13,7296,274,62725,784,296 Public safety44,921,713-2,2551,637,77946,561,747 Public works7,483,926---7,483,926 Parks and recreation9,422,432-14,5051,476,51310,913,450 Capital outlay575,128-11,306,6281,055,29712,937,053 Debt service: Principal retirement140,4229,530,470--9,670,892 Bond issuance costs--29,156-29,156 Interest and other charges-5,070,734--5,070,734 Total expenditures82,039,56114,601,20411,366,27310,444,216118,451,254 Excess (deficiency) of revenues over (under) expenditures3,301,982(658,015)(6,013,647)1,209,313(2,160,367) OTHER FINANCING SOURCES (USES): Issuance of long-term debt--5,680,000-5,680,000 Premium on debt issuance--32,628-32,628 Sale of capital assets90,699-212,608-303,307 Transfers in20,304818,8401,013,788115,3211,968,253 Transfers out(515,761)(236,280)(1,355,777)(5,807,564)(7,915,382) Total other financing sources (uses)(404,758)582,5605,583,247(5,692,243)68,806 Net change in fund balances2,897,224(75,455)(430,400)(4,482,930)(2,091,561) Fund balances at beginning of year - as previously stated21,526,7793,354,53544,970,57113,838,42583,690,310 Prior period adjustment (Note I.F.)--(10,674,744)-(10,674,744) Fund balance at beginning of year - as restated21,526,7793,354,53534,295,82713,838,42573,015,566 Fund balances at end of year$24,424,003$ 3,279,080$33,865,427$ 9,355,495$ 70,924,005 The notes to the basic financial statements are an integral part of this statement. 18 CITY OF DENTON, TEXASExhibit VI RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED SEPTEMBER 30, 2011 Net change in fund balances - total governmental funds (Exhibit V) $ (2,091,561) Amounts reported for governmental activities in the statement of activities are different because: Governmental funds report capital outlays as expenditures. However, in the statement of activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlay ($12,937,053) is different from depreciation and retirement of assets ($14,268,250 = $15,782,195 total governmental minus $1,513,945 internal service portion) in the current period. (1,331,197) Revenues in the statement of activities that do not provide current financial resources are not reported as revenues in the funds. Such amounts are recorded in the funds when considered available.691,321 The net effect of various miscellaneous transactions involving capital assets (i.e., sales, trade-ins and donations) is to increase net assets.(5,283,876) Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets. Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net assets. This is the amount by which proceeds exceeded payments.6,149,484 Fund-level financials report costs related to bonds as expenditures; however, these are deferred and amortized on the government-wide financials.(15,746) Certain expenses reported in the statement of activities do not require the use of current financial resources and therefore are not reported as expenditures in governmental funds. (1,529,921) Internal service funds are used by management to charge the costs of certain activities, such as insurance and telecommunications, to individual funds. A portion of the net revenue (expense) of certain internal service funds is reported with governmental activities. The amount reported with business-type activities is $700,723.578,450 Change in net assets of governmental activities (Exhibit II)$ (2,833,046) The notes to the basic financial statements are an integral part of this statement. 19 20 CITY OF DENTON, TEXASExhibit VII STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET TO ACTUAL GENERAL FUND FOR THE YEAR ENDED SEPTEMBER 30, 2011 Variance with Adjustments -Actual on aFinal Budget - Budgeted AmountsActualBudgetaryBudgetaryPositive OriginalFinalAmountsBasisBasis(Negative) REVENUES: Taxes$52,079,219$52,079,219$53,492,664$ -$53,492,664$ 1,413,445 Licenses and permits1,409,8301,409,8301,460,548-1,460,54850,718 Franchise fees18,454,50718,454,50719,324,244-19,324,244869,737 Fines and forfeitures4,722,8684,722,8684,216,247-4,216,247(506,621) Fees for services5,960,3825,960,3825,656,550-5,656,550(303,832) Investment revenue250,000250,000172,719-172,719(77,281) Intergovernmental705,111705,111825,549-825,549120,438 Miscellaneous211,500211,500193,022-193,022(18,478) Total revenues83,793,41783,793,41785,341,543-85,341,5431,548,126 EXPENDITURES: Current: General government26,575,51426,558,36819,495,9404,788,51824,284,4582,273,910 Public safety45,105,58345,014,73344,921,713-44,921,71393,020 Public works7,947,5337,950,4867,483,926-7,483,926466,560 Parks and recreation9,659,7559,681,6839,422,432-9,422,432259,251 Capital outlay504,423504,548575,128-575,128(70,580) Debt service: Principal retirement164,923151,208140,422-140,42210,786 Total expenditures89,957,73189,861,02682,039,5614,788,51886,828,0793,032,947 Excess (deficiency) of revenues over expenditures(6,164,314)(6,067,609)3,301,982(4,788,518)(1,486,536)4,581,073 OTHER FINANCING SOURCES (USES): --90,699-90,69990,699 Sale of capital assets Transfer in4,992,0654,992,06520,3044,788,5184,808,822(183,243) Transfers out(58,984)(155,689)(515,761)-(515,761)(360,072) Total other financing sources (uses)4,933,0814,836,376(404,758)4,788,5184,383,760(452,616) Excess (deficiency) of revenues and other sources over (under) expenditures and other uses(1,231,233)(1,231,233)2,897,224-2,897,2244,128,457 21,526,77921,526,779-21,526,779- Fund balances at beginning of year21,526,779 Fund balance at end of year$20,295,546$20,295,546$24,424,003$ -$24,424,003$ 4,128,457 Adjustments - Budgetary Basis are expenditures allocated to and reimbursed by other funds. These expenditures are recorded in the other funds' financials. The notes to the basic financial statements are an integral part of this statement. 21 CITY OF DENTON, TEXAS STATEMENT OF NET ASSETS PROPRIETARY FUNDS AS OF SEPTEMBER 30, 2011 Business-type Activities - Enterprise Funds Electric WaterWastewater Solid SystemSystemSystemWaste ASSETS: Current assets: Cash, cash equivalents and investments, at fair value$ 89,638,523$ 34,292,567$ 15,341,015$ 3,016,908 Receivables, net of allowances: Accounts 9,321,2922,619,9871,325,2691,128,967 Unbilled utility service5,877,2161,532,364915,611708,579 Accrued interest375,597143,65564,28012,639 Other--2- Interfund receivables2,223,841229,44774,916- Merchandise inventory---- Prepaid items56,427,654-5,865- Deferred debt issuance costs98,479101,64240,51621,630 Total current assets163,962,60238,919,66217,767,4744,888,723 Noncurrent assets: Restricted assets: Cash, cash equivalents and investments, at fair value33,793,48345,183,72416,342,68017,017,474 Escrow deposit-50,000-- Accrued interest141,599189,32568,47871,305 Total restricted assets 33,935,08245,423,04916,411,15817,088,779 Deferred debt issuance costs669,272721,829192,010109,116 Capital assets, net of accumulated depreciation163,706,858202,304,249158,315,34827,941,697 Total noncurrent assets198,311,212248,449,127174,918,51645,139,592 Total assets 362,273,814287,368,789192,685,99050,028,315 LIABILITIES: Current liabilities: Accounts payable9,903,949868,283325,052396,915 Retainage Payable--22,0333,735 Claims payable---- Compensated absences payable601,475494,158289,630307,271 Leases payable--99,318466,404 Deposits4,041,853198,7929,79841,961 Accrued interest---- Interfund payables---- Unearned revenue3,683,868--- Payable from restricted assets: Accounts payable5,5532,758,176251,34168,308 Retainage payable83,841615,72226,26589,720 Accrued interest1,930,0791,667,655545,689214,129 Revenue and certificate and general obligation bonds10,109,2806,813,7554,305,3903,502,856 Total current liabilities paid from restricted assets12,128,75311,855,3085,128,6853,875,013 Total current liabilities30,359,89813,416,5415,874,5165,091,299 22 Exhibit VIII Governmental Activities - Total Internal Enterprise Service AirportFundsFunds $ 6,784,503$ 149,073,516$ 14,630,413 14,36514,409,880- -9,033,770- 28,428624,59961,304 565,026565,028220,678 -2,528,204- --4,306,387 -56,433,519161,177 1,972264,2393,933 7,394,294232,932,75519,383,892 -112,337,3612,769 -50,000937,186 -470,70712 -112,858,068939,967 10,3001,702,52712,033 9,525,223561,793,3758,024,091 9,535,523676,353,9708,976,091 16,929,817909,286,72528,359,983 79,11311,573,3121,198,926 6,24732,015- --1,686,200 10,0321,702,566260,279 -565,722543,957 -4,292,404- 11,47611,47615,770 --2,666,260 -3,683,868- -3,083,378- -815,54832,238 -4,357,552- 131,53924,862,820523,643 131,53933,119,298555,881 238,40754,980,6616,927,273 (continued) 23 CITY OF DENTON, TEXAS STATEMENT OF NET ASSETS PROPRIETARY FUNDS AS OF SEPTEMBER 30, 2011 Business-type Activities - Enterprise Funds Electric WaterWastewater Solid SystemSystemSystemWaste Noncurrent liabilities: Leases payable$ -$ -$ 210,336$ 503,072 Payable from restricted assets: General obligation bonds payable5,913,77321,576,64711,424,3433,623,630 Certificates of obligation108,608,25612,238,3994,653,72120,230,771 Revenue bonds payable, net of premium/discount63,961,05890,789,93627,691,630- Deferred amount on refunding(1,388,052)(3,103,968)(615,976)(104,448) Compensated absences payable96,12236,00646,843110,693 Claims payable---- Municipal pension obligation751,619674,348440,650488,565 Other post employment benefits273,082391,751207,140234,753 Landfill closure/postclosure costs---5,313,807 Total noncurrent liabilities178,215,858122,603,11944,058,68730,400,843 Total liabilities208,575,756136,019,66049,933,20335,492,142 NET ASSETS: Invested in capital assets, net of related debt57,543,438100,843,779118,700,06011,423,190 Restricted for debt service8,417,17012,881,1424,450,143- Restricted for capital acquisition-2,756,5491,949,310- Unrestricted87,737,45034,867,65917,653,2743,112,983 Total net assets$153,698,058$151,349,129$142,752,787$14,536,173 Adjustment to reflect inclusion of internal service fund activities related to enterprise funds. Net assets of business-type activities (Exhibit I) The notes to the basic financial statements are an integral part of this statement. 24 Exhibit VIII Governmental Activities - Total Internal Enterprise Service AirportFundsFunds $ -$ 713,408$ 949,907 693,02743,231,4201,479,620 1,189,119146,920,266675,238 -182,442,624- 15,405(5,197,039)(13,276) 4,906294,57041,057 --1,961,110 8,0132,363,195397,052 14,3291,121,055159,435 -5,313,807- 1,924,799377,203,3065,650,143 2,163,206432,183,96712,577,416 7,496,134296,006,6013,867,771 -25,748,455- -4,705,859- 7,270,477150,641,84311,914,796 $14,766,611$ 477,102,758$ 15,782,567 7,478,893 $ 484,581,651 (concluded) 25 CITY OF DENTON, TEXAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Business-type Activities - Enterprise Funds ElectricWaterWastewaterSolid SystemSystemSystemWaste OPERATING REVENUES: Utility services$ 128,939,659$ 29,739,541$ 20,711,102$20,650,612 Charges for goods and services---- Other fees2,495,8953,476,228996,801329,355 Miscellaneous---- Total operating revenues131,435,55433,215,76921,707,90320,979,967 OPERATING EXPENSES: Operating expenses before depreciation105,356,22118,124,33313,294,31216,064,834 Depreciation6,458,5865,085,0775,401,9373,200,162 Total operating expenses111,814,80723,209,41018,696,24919,264,996 Operating income (loss)19,620,74710,006,3593,011,6541,714,971 NON-OPERATING REVENUES (EXPENSES): Investment revenue693,892465,802180,84593,821 Interest expense and fiscal charges(6,273,202)(5,214,869)(1,846,664)(899,315) Impact fee revenue-3,574,9511,630,938- Gain (loss) on disposal of capital assets(105,691)3,90962,96427,699 Gas well revenues---- Other non-operating revenues (expenses)(1,609)156,758(40,399)165,353 Total non-operating revenues (expenses)(5,686,610)(1,013,449)(12,316)(612,442) Income before contributions and transfers13,934,1378,992,9102,999,3381,102,529 CONTRIBUTIONS AND TRANSFERS: Capital contributions-578,3741,537,97461,960 Transfers in 134,56860,903300,869600,404 Transfers out-(75,000)(565,745)- Total contributions and transfers134,568564,2771,273,098662,364 Change in net assets14,068,7059,557,1874,272,4361,764,893 Net assets at beginning of year139,629,353141,791,942138,480,35112,771,280 Total net assets at end of year$ 153,698,058$ 151,349,129$ 142,752,787$14,536,173 Change in fund net assets of proprietary funds Adjustment to reflect inclusion of internal service fund activities related to enterprise funds. Change in net assets of business-type activities (Exhibit II) The notes to the basic financial statements are an integral part of this statement. 26 Exhibit IX Governmental Activities - TotalInternal EnterpriseService AirportFundsFunds $ -$ 200,040,914$ - 768,352768,35242,415,207 -7,298,279- 46,03946,0391,566,983 814,391208,153,58443,982,190 931,679153,771,37941,020,669 313,62920,459,3911,513,945 1,245,308174,230,77042,534,614 (430,917)33,922,8141,447,576 37,7181,472,07874,955 (87,220)(14,321,270)(181,249) -5,205,889- 9,196(1,923)(4,583) 2,389,0352,389,035- -280,1035,007 2,348,729(4,976,088)(105,870) 1,917,81228,946,7261,341,706 2,874,7165,053,024439,805 10,018,39911,115,14322,319 (44,316)(685,061)(526,615) 12,848,79915,483,106(64,491) 14,766,61144,429,8321,277,215 -432,672,92614,505,352 $14,766,611$ 477,102,758$ 15,782,567 44,429,832 698,765 $ 45,128,597 27 CITY OF DENTON, TEXAS STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Business-type Activities - Enterprise Funds ElectricWaterWastewater SystemSystemSystem CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers $133,435,990$31,819,123$21,542,497 Cash paid to employees for services(7,384,289)(9,520,225)(5,261,130) Cash paid to suppliers(93,232,404)(6,400,158)(8,239,753) Net cash provided (used) by operating activities32,819,29715,898,7408,041,614 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers out-(75,000) (565,745) Transfers in134,56860,903 300,869 Net cash provided (used) by noncapital financing activities:134,568(14,097) (264,876) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Principal payments on capital debt (8,082,185)(10,795,507)(4,584,158) Interest and fiscal charges(7,137,230)(5,255,203)(1,878,160) Principal payments under capital lease obligation -- (95,611) Proceeds from issuance of debt 20,351,2503,800,515 503,583 Proceeds from gas wells-- - Proceeds from impact fees-5,001,8452,193,833 Proceeds from sale of capital assets162,0263,909 - Acquisition and construction of capital assets (21,895,701)(9,717,038)(4,943,699) Net cash provided (used) by capital financing activities (16,601,840)(16,961,479)(8,804,212) CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale and maturities of investment securities 71,176,51756,922,63123,902,962 Purchase of investment securities (86,643,385)(57,398,720)(23,534,994) Interest received on investments 602,637449,376 176,757 Net cash used by investing activities(14,864,231)(26,713) 544,725 Net increase (decrease) in cash and cash equivalents1,487,794(1,103,549) (482,749) Cash and cash equivalents at beginning of year10,202,9068,638,6483,483,901 Cash and cash equivalents at end of year11,690,7007,535,0993,001,152 Investments, at fair value (Note IV.A.)111,741,30671,941,19228,682,543 Cash, cash equivalents and investments, at fair value $123,432,006$79,476,291$31,683,695 RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss)$19,620,747$10,006,359$3,011,654 Adjustments: Depreciation expense6,458,5865,085,0775,401,937 Decrease (Increase) in receivables(1,929,952)(1,457,342) (162,134) Decrease (Increase) in interfund receivables 3,930,38860,695 (3,270) Decrease in inventories-- - Decrease (Increase) in prepaid items4,140,561- (5,865) Decrease in escrow deposits-- - Increase (Decrease) in accounts payable283,1941,878,984 (386,620) Increase in compensated absences payable 14,62511,837 243 Increase in municipal pension obligations245,690234,422 141,884 Increase in other post employment benefits55,45878,708 43,785 Increase in closure/postclosure liability-- - Decrease in interfund payables -- - Total adjustments13,198,5505,892,3815,029,960 Net cash provided by operating activities$32,819,297$15,898,740$8,041,614 NONCASH CAPITAL, INVESTING AND FINANCING ACTIVITIES: Increase (Decrease) in fair value of investments(26,683)(28,106) (11,923) Increase in equity due to non-cash transfers-- - Capital asset contributions-578,3741,537,974 Increase in capital lease obligations-- - The notes to the basic financial statements are an integral part of this statement. 28 Exhibit X Governmental Activities TotalInternal SolidEnterpriseService WasteAirportFundsFunds $20,793,910$838,901$ 208,430,421$43,865,891 (6,914,063)(346,770) (29,426,477)(5,295,262) (8,751,312)(482,867) (117,106,494)(35,215,717) 5,128,5359,264 61,897,4503,354,912 -(44,316) (685,061)(526,615) 600,404371,596 1,468,34022,319 600,404327,280 783,279(504,296) (2,794,302)(130,011) (26,386,163)(607,348) (863,343)(74,769) (15,208,705)(177,796) (449,436)- (545,047)(442,803) 7,959,064- 32,614,412 - -2,247,592 2,247,592 - -- 7,195,678 - -9,196 175,131 - (2,599,606)(828,356) (39,984,400)(948,036) 1,252,3771,223,652 (39,891,502)(2,175,983) 5,963,9553,858,666 161,824,7319,080,880 (12,155,055)(4,808,443) (184,540,597)(9,556,491) 62,64732,165 1,323,58270,060 (6,128,453)(917,612) (21,392,284)(405,551) 1,396,943 852,863642,584269,082 23,370,666 1,045,211-1,116,880 1,898,074642,584 24,767,6091,385,962 18,136,3086,141,919 236,643,26813,247,220 $20,034,382$6,784,503$ 261,410,877$14,633,182 $1,714,971$(430,917)$ 33,922,814$1,447,576 3,200,162313,629 20,459,3911,513,945 (188,019)24,510 (3,712,937)(106,830) -- 3,987,813 - -- -3,874,810 -- 4,134,696(161,177) 66- 66 - (207,269)76,031 1,644,320604,135 4,71614,938 46,3591,975 167,4838,013 797,492131,722 52,2423,060 233,25334,750 384,183- 384,183 - -- -(3,985,994) 3,413,564440,181 27,974,6361,907,336 $5,128,535$9,264$ 61,897,450$3,354,912 895,185 (61,438)(5,093) -9,646,803 9,646,803 - 61,9602,874,716 5,053,024439,805 - --696,186 29 CITY OF DENTON, TEXASExhibit XI STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS AS OF SEPTEMBER 30, 2011 Total Agency Funds ASSETS: Cash, cash equivalents and investments, at fair value$ 1,597,060 Accrued interest945 Other receivables57,516 Total assets$ 1,655,521 LIABILITIES: Accounts payable1,655,521 Total liabilities$ 1,655,521 The notes to the basic financial statements are an integral part of this statement. 30 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30, 2011 I. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The City of Denton is a municipal corporation governed by an elected seven-member council consisting of a mayor elected at large and six councilpersons, four representing specific geographical districts and two elected at large. The City receives funding from state and federal government sources and must comply with the requirements of these funding source entities. However, the City is not included in any other governmental pronouncements by the Governmental Accounting Standards Board (GASB) Statement No. decision-making authority, the authority to levy taxes, the power to designate management, the ability to significantly influence operations, and primary accountability for fiscal matters. The GASB issued Statement No. 54Fund Balance Reporting and Governmental Fund Type Definitions which was effective for the City in the fiscal year ended September 30, 2011. This statement establishes new categories for reporting fund balance and revises the definitions for governmental fund types. Changes to the reporting are reflected in the financial statements and schedules and related disclosures are included in notes I.D.10 and I.D.11. The financial statements of the City have been prepared to conform to accounting principles generally accepted (GAAP) in the United States of America as applicable to state and local governments. GASB is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The following is a summary of the more significant policies. A.Reporting entity An elected seven-member council consisting of a mayor and six councilpersons govern the City.As required by accounting principles generally accepted in the United States of America, these financial statements present the City (the primary government) and its component units, which are entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the City's operations, and so data from these units are combined with data of the primary government. A discretely presented component unit, on the other hand, is reported in a separate column in the government- wide financial statements to emphasize it is legally separate from the City. The City had no component units, discretely presented or blended, at September 30, 2011. B.Government-wide and fund financial statements The basic financial statements include both government-wide (based on the City as a whole) and fund financial statements. The reporting focus is either the City as a whole (government-wide financial statements) or major individual funds (within the fund financial statements). The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all non-fiduciary activities of the primary government. For the most part, the effect of inter-fund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. The government-wide statement of activities demonstrates the degree to which the direct expenses of a functional category (public safety, public works, etc.) or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include (1) charges to customers or applicants who purchase, use or directly benefit from goods, services or privileges provided by a given function or segment; (2) grants and contributions that are restricted to meeting operational requirements of a particular function or segment; and (3) grants and contributions that are restricted to meeting the capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. The net cost (by function or business-type activity) is normally covered by general revenue (property taxes, sales taxes, franchise fees, interest income, etc.). 31 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 Separate fund financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major governmental funds and major enterprise funds are reported as separate columns in the fund financial statements. GASB Statement No. 34 sets forth minimum criteria (percentage of assets, liabilities, revenues or expenditures/expenses of either fund category and for the governmental and enterprise funds combined) for the determination of major funds. Non-major funds are combined in a column in the fund financial statements. Internal service funds, which traditionally provide services primarily to other funds of the government, are presented in summary form as part of the proprietary fund financial statements. The financial statements of internal service funds are allocated (based on the percentage of goods or services provided) between the governmental and business-type activities when presented at the government-wide level. being held for the benefit of a third party (other local governments, individuals, etc.) and cannot be used to address activities or obligations of the government, these funds are not incorporated into the government-wide statements. The government-wide focus is more on the sustainability of the City as an entity and the change in aggregate financial position resulting from the activities of the fiscal period. The focus of the fund financial statements is on the major individual funds of the governmental and business-type categories, as well as the fiduciary funds (by category). Each presentation provides valuable information that can be analyzed and compared to enhance the usefulness of the information. C. Measurement focus, basis of accounting and financial statement presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund statements. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. Governmental fund-level financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Property tax, franchise fees, sales tax and other taxes associated with the current fiscal period are all susceptible to accrual and so have been recognized as revenues of the current fiscal period. All of the other revenue items are considered to be measurable and available only when cash is received. The City reports the following major governmental funds: not allocated by law or contractual agreement to some other fund are accounted for in this fund. From the fund are paid general operating costs, fixed charges and capital improvement costs that are not paid through other funds. The debt service fund accounts for the accumulation of financial resources for the payment of principal, interest and related costs on general long-term debt, paid primarily by taxes levied by the City. The capital projects fund accounts for financial resources used for the acquisition or construction of capital other than those recorded in the enterprise funds and internal service funds. Other governmental funds is a summarization of all of the non-major governmental funds. 32 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 The City reports the following major proprietary funds: The City utility system is made up of three separate funds as follows: The electric fund accounts for electrical utility services to the residents and commercial establishments of the City. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, finance and related debt service. The water fund accounts for water utility services to the residents and commercial establishments of the City. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, finance and related debt service. The wastewater fund accounts for sewer and storm water services to the residents and commercial establishments of the City. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, finance and related debt service. The City provides additional services through the following funds: The solid waste fund accounts for the provision of solid waste services to the residents of the City. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, finance and related debt service. The airport fund accounts for the airport services to the public and is funded through operational and gas well revenues. Activities necessary to provide such services are accounted for in the fund, including, but not limited to, administration, operations, maintenance, finance and related debt service. The City additionally reports the following funds: Internal service funds are used to account for the financing of materials and services provided by one department of the City to other departments of the City on a cost-reimbursement basis. Agency funds are used to account for the payment of payroll, , and other similar liabilities. The City holds the assets in an agency capacity for individuals, private organizations or other governments. The City follows private-sector standards of accounting and financial reporting (as issued by the Financial Accounting Standards Board) issued prior to December 1, 1989 in both the government-wide and proprietary fund financial statements to the extent that those standards do not conflict with or contradict guidance of the GASB. Governments also have the option of following subsequent private-sector guidance for business-type activities and enterprise funds, subject to this same limitation. Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a wastewater, solid waste, and airport funds are charges to customers for services. Operating expenses for the enterprise funds and internal service funds include the cost of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non- operating revenues and expenses. For deferred charges, the City recognizes, as an asset or a liability, the difference between the ele compliance with Financial Accounting Standards Board Statement No. 71 Accounting for the Effects of Certain Types of Regulation. When both restricted and unrestricted resourc resources first, then unrestricted resources as they are needed. 33 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 D.Assets, liabilities and net assets or equity 1. Cash, cash equivalents and investments ts are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Investments are carried at fair value or cost, if maturities are one year or less. Fair value is determined as the price at which two willing parties would complete an exchange. The City uses a pooled cash and investment balances in the pooled fund are allocated back to the individuals funds based on their respective share of the pooled total. Interest earned on investments is also allocated back and recorded directly to the individual funds on a monthly basis. 2. Receivables Outstanding ba balances between governmental activities and business-type activities are reported in the government-wide Trade and property tax receivables are shown net of an allowance for uncollectibles. The City accrues amounts for utility services provided in September, but not billed at September 30, 2011. 3. Inventories Inventories of supplies are maintained at the City warehouse for use by all City funds and are accounted for by the consumption method. Cost is determined using a moving average method. No inventories exist in the governmental fund types. 4. Prepaid Items Certain costs applicable to future accounting periods are recorded as prepaid items. During 2010 the City prepaid certain contractual obligations to the Texas Municipal Power Agency (TMPA) relating to the cost of TMPA providing energy to the City. The benefit from the prepayment is being amortized over the benefit period of 20 years. 5. Restricted Assets governmental and proprietary fund revenue bonds, general obligation bonds, and certificates of obligation, as well as certain resources set aside for their repayment, are classified as restricted assets on the balance sheet because their use is limited by applicable bond covenants. Assets collected from impact fees are limited by state statute in use and also shown as restricted on the balance sheet of the Water and Wastewater funds. 6. Capital Assets Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, bridges, sidewalks and similar items) are reported in applicable governmental or business-type activities columns in the government-wide financial statements and in the proprietary fund financial statements. The City defines capital assets as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair value at the time received. Major outlays for capital assets and improvements are capitalized as projects are constructed. Net interest incurred during the construction phase of capital assets of business-type activities and enterprise funds is included as part of the capitalized value of the assets constructed. For 2011, net interest capitalization of $1,024,142 was recorded for electric fund projects, $682,034 for water fund projects, $248,708 for wastewater fund projects, $90,020 for solid waste fund projects and $19,132 for airport fund projects. 34 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 Capital assets are depreciated using the straight-line method over the following useful lives: AssetsYears Buildings40 Infrastructure2040 General improvements10 Machinery and equipment1020 Furniture and office equipment10 Computer equipment/software310 Plant and equipment5 Underground pipe40 Water storage rights50100 Water recreation rights50 Communication equipment5 Vehicles310 Renewals and betterments of property and equipment are capitalized, whereas normal repair and maintenance are charged to expense as incurred. 7. Compensated Absences The City allows full-time employees to accumulate unused vacation up to 320 hours (480 for Civil Service Fire employees.) Upon termination, any accumulated vacation time will be paid to an employee. Generally, sick leave is not paid upon termination except for fire fighters and police officers. Firefighters and police officers accumulate unused sick leave up to a maximum of 1080 hours and 720 hours, respectively. All other employees are paid only upon illness while employed by the City. Accumulated vacation and sick leave is accrued when incurred in the government-wide, proprietary and fiduciary fund financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements but have not been paid this amount at the end of the fiscal year.The General Fund and Other Governmental Funds are used to record any payout expenditures of the employees and related liability, while proprietary fund payouts for their employees are recorded as reductions to the liabilities in those funds. 8. Arbitrage Arbitrage involves the investment of the proceeds from the sale of tax-exempt securities in a taxable money market instrument that yields a higher rate, resulting in interest revenue in excess of interest costs. Federal tax code requires that these excess earnings be rebated to the federal government. The Capital Projects Fund has been used in prior years to liquidate govern 9. Long-term obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term obligations are reported as liabilities. Bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds. Bonds payable are reported net of the applicable bond premium or discount. Gains and losses on refunding are amortized over the life of the refunded debt or the life of the new issue, whichever is shorter. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 35 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 10. Fund equity The City adopted GASB St changed and are as follows: Nonspendable fund balance includes amounts not in a spendable form or are legally or contractually required to be maintained intact. Examples include inventory or endowments. Restricted fund balance includes amounts that can be spent only for the specific purposes stipulated by external resource providers, creditors, grantors, and contributors or through enabling legislation. Committed fund balance includes amounts that can be used only for the specific purposes determined by the City Council through an ordinance and may only be changed or lifted through another ordinance.The ordinance must either adopt or rescind the commitment, as applicable, prior to the last day of the fiscal year for which the commitment is made. The amount subject to the constraint may be determined in the subsequent period. Assigned fund balance - comprises amounts intended to be used for specific purposes. Intent can be expressed by the City Council, or per the policy adopted by an ordinance by the City Council, the may also make an assignment.In governmental funds other than the general fund, assigned fund balance represents the amount that is not restricted or committed and, at a minimum, is intended for the purpose of that fund. Unassigned fund balance is the residual classification of the general fund and includes all amounts not constrained in the other classifications. Unassigned amounts are technically available for any purpose. When multiple categories of fund balance are available for expenditure and approved for use by the City Council, the City will start with the most restricted category and spend those funds first before moving down to the next category with available funds. Normally this would result in the use of restricted, then committed, then assigned, and lastly, unassigned fund balance. 11. Minimum fund balance policy It is the goal of the City to achieve and maintain an unassigned fund balance in the general fund equal to 20% of budgeted expenditures for unanticipated expenditures, unforeseen revenue fluctuations, or other adverse circumstances. The fund balance level, however, may be reduced to the equivalent of 15% of budgeted expenditures in unusual financial circumstances. However, if such a situation occurs, the City will implement necessary corrective action within a five-year plan to restore the unassigned fund balance to the equivalent of 20% of budgeted expenditures. 12. Net Assets Net assets represent the difference between assets and liabilities. Net assets invested in capital assets, net of related debt consists of capital assets net of accumulated depreciation and the outstanding balances of any borrowing spent for the acquisition, construction or improvements of those assets. Net assets are reported as restricted when there are limitations imposed on their use either through the enabling legislation adopted by the City or through external restrictions imposed by creditors, grantors or laws or regulations of other governments. E.Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses/expenditures during the reporting period. Actual results could differ from those estimates. 36 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 F.Prior period adjustment An adjustment has been recorded to reduce the beginning fund balance of the Capital Projects fund to correct the timing of the recognition of intergovernmental revenues.These funds were received in advance and are refundable if not expended for specific purposes within a stated time-frame. The entry reduced the fund balance and increased deferred revenues by $10,674,744 as of the beginning of the year. II. RECONCILIATION OF GOVERNMENT-WIDE AND FUND FINANCIAL STATEMENTS Explanation of certain differences between the governmental fund statement of revenues, expenditures and changes in fund balances and the government-wide statement of activities Bond proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the statement of net assets.Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in The details of this $6,149,484 difference are as follows. Debt issued or incurred: Issuance of general obligation debt$(2,225,000) Issuance of certificates of obligation(3,455,000) Principal repayments: Certificates of obligation principal retirement4,397,356 General obligation debt principal retirement5,133,114 Debtprincipal transferred to the airport fund2,158,592 Lease obligations principal retirement140,422 Net adjustment to decrease net changes in fund balances total governmentalfunds to arrive at changes in net assets of governmental activities$6,149,484 Another element of that reconciliati capital assets (i.e., sales, trade-ins and donations) 5,283,876 difference are as follows: Net effect of transactions involvingasset retirements/disposals$(673,819) Transfers of capital assets from governmental activities decrease net assets in the statement of activities but do not appear in the governmental funds because they are not financial expenditures(6,135,780) Donations of capital assets increase net assets in the statement of activities but do not appear in the governmental funds because 1,525,723 they are not financial resources Net adjustment to increase net changes in fund balances total $(5,283,876) governmental funds 37 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 require the use of current financial resources and therefore are not reported as expenditures in governmental fund The details of the $(1,529,921) difference are as follows: Compensated absences$(60,195) Municipal pension obligation(1,125,395) Other post employment benefits(367,877) Accrued interest23,546 Net adjustments to decrease net changes in fund balances total governmental funds to arrive at changes in net assets of governmental activities$(1,529,921) III. STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY A. Budgetary information The City Council follows these procedures, as prescribed by City Charter, in establishing the budgets reflected in the financial statements: 1. Within the time period required by law, the City Manager submits to the City Council a proposed budget for the fiscal year beginning on the following October 1. The operating budget includes proposed expenditures and the means of financing them. 2. Public hearings are conducted prior to the adoption of the budget in order to obtain taxpayer comments. 3. The annual budget adopted by the City Council covers the general fund, non-major special revenue funds (Recreation Fund, Police Confiscation Fund, Tourist and Convention Fund, Gas Well Revenues Fund, ), the debt service fund, the enterprise funds, and internal service funds.The budget is legally enacted by the City Council through passage of an ordinance prior to the beginning of the fiscal year. The basic financial statements reflect the legal level of control, (i.e. the level at which expenditures cannot legally exceed the appropriated amount)which is established at the total fund level as approved by City Council. 4. The City Charter provides that the City Manager may transfer any part of the unencumbered appropriation balance or the entire balance thereof between programs or general classifications of expenditures within an office, department, agency or organizational unit. (The City Council defines an organizational unit as set forth in Article VIII, Section 8.07 of the City Charter, to be a fund that has been appropriated by the City Council.) City Council approval is not required up to the fund level. The Charter also provides that at any time during the year, at the request of the City Manager, City Council may by resolution transfer any part of the unencumbered appropriation balances or the entire balance thereof from one office, department, agency, or organizational unit to another, as well as make any increases in fund appropriations. Budgets are adopted on a basis for the governmental funds and the budgeted special revenue funds that is generally consistent with generally accepted accounting principles. Budgets for enterprise funds are prepared on the full accrual basis, except certain noncash transactions such as depreciation expense and amortization on debt issuance costs where it is not budgeted, and debt service payments where it is budgeted. At the beginning of the subsequent year, management reviews all open encumbrances from the prior year and, as provided in the budget ordinance, appropriations for the encumbrances may be carried forward.In the current fiscal year, no appropriations were carried forward for the General Fund or Other Governmental Funds. Also, during the budgetary process, amounts are included in all fund budgets to recognize administrative transfers between funds for goods or services. These amounts are not included in the reporting of actual activity for the funds. For 38 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 funds reporting required budget-to-actual comparisons, these administrative transfers are included as adjustments budgetary basis. B. Deficit fund equity The Criminal Justice and All Other special revenue funds had a deficit unassigned fund balance of ($42,983) and ($715,751) at September 30, 2011, respectively. The deficits were a result of reimbursement timing of grant or other governmental funding. Elimination of the deficit unassigned fund balances are anticipated in 2012. IV. DETAILED NOTES ON ALL FUNDS A.Deposits and investments In order to facilitate effective cash management practices, the operating cash of all funds is pooled into a common account for the purpose of increasing income through combined investment activities. At year-end, the City had $34,753,493 in cash and cash equivalents. Of the $34,753,493, $1,392,965 is included in the agency funds. In addition, the City had $15,028 in petty cash at year-end. The Public Funds Investment Act (Texas Government Code) authorizes the City to invest in obligations of the U.S. Treasury, U.S. agencies, fully collateralized repurchase agreements, public fund investment pools, SEC- registered no-load money market mutual funds, investment-grade rated municipal securities of any state and fully collateralized or insured certificates of deposit. investment options. The investments reported on September 30, 2011 were similar to those held during the fiscal year. The City reports all investments in the financial statements at fair value. At September 30, 2011 investments carried a fair value of $332,178,613. As of September 30, 2011, City investments were as follows: Weighted Average Investment TypeFair ValueMaturity (Years) U.S. Agency Securities - Coupon $ 178,619,725 0.82 U.S. Agency Securities - Step-Up6,992,6361.82 U.S. Agency Securities - Callable34,446,0821.86 Municipal Bonds - Coupon1,021,1701.38 Certificates of Deposit-Insured111,099,0000.83 Total fair value of investments $ 332,178,613 Portfolio weighted average maturity0.95 Interest rate risk.In accordance with its investment policy, the City manages its exposure to declines in fair values due to interest rate fluctuations by limiting the weighted average maturity of its investment portfolio to less than eighteen months. Credit risk.The Cit its agencies, investment quality obligations of the State of Texas with a rating not less than AA, fully insured or collateralized Certificates of Deposits, and commercial paper that has a maturity of 270 days or less and a rating of A-1 or P-ere Custodial credit risk. This is the risk that in the event of a bank or counterparty failure, the City not be returned. The policy states that all bank deposits and bank investments of City funds shall be secured by pledged collateral with a market value equal to no less than 102 percent of the principal plus accrued interest 39 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 less an amount insured by FDIC, if a deposit.As of September 30, 2011, the bank balance for deposits was $36,423,574 and was covered by FDIC insurance. Due to the current FDIC program to fully insure non-interest bearing accounts, no additional collateral was necessary. Cash, cash equivalents and investments, at fair value are reported together on the financial statements. Investments, at fair value, by fund were as follows: Property tax revenue Property taxes attach as an enforceable lien on property as of January 1. Taxes are levied on October 1 and are due and payable at that time; therefore, the legally enforceable claim arises on October 1. A receivable is recorded at that time. All unpaid taxes levied October 1 become delinquent February 1 of the following year. Property taxes at the fund level are recorded as receivables and revenue at the time the tax levy is billed. Current-year revenues recognized are those ad valorem taxes collected within the current period or soon enough thereafter to pay current liabilities, which is sixty days after year-end. All other outstanding receivables are adjusted from revenue and recognized as deferred for future collections. Current tax collections for the year ended September 30, 2011, were 98.99% of the tax levy. An allowance is provided for delinquent taxes not expected to be collected in the future. 40 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 At September 30, 2011, the City had a tax rate of $0.68975 per $100 valuation. Based upon the maximum ad valorem tax of $2.50 per $100 valuation imposed by Texas Constitutional law, the City had a tax rate margin of $1.81025. Additional revenues up to $112,780,710 could be raised per year based on the current year's assessed value of $6,230,117,958before the limit is reached. C. Receivables Receivables at September 30, 2011-major funds, internal service funds and fiduciary funds), including the applicable allowancesfor uncollectible accounts, are shown below. 41 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 D. Capital assets Capital asset balances and transactions for the year ended September30, 2011 are summarized below and on the following page. 42 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 (Continued) Balance at Transfers and Balance at Business-type activities:October 1, 2010IncreasesDecreasesSeptember 30, 2011 Capital assets not being depreciated: Land $ 10,749,322 $ 241,299 $ 881,252 $ 11,871,873 Construction in progress 86,388,337 40,052,289 (26,856,670) 99,583,956 Total capital assets not being depreciated 97,137,659 40,293,588 (25,975,418) 111,455,829 Capital assets being depreciated: Buildings 10,983,496 - 2,985,523 13,969,019 Landfill improvements 14,868,136 166,388 - 15,034,524 Water rights 69,883,098 - - 69,883,098 Infrastructure 331,936,012 11,554,124 4,923,866 348,414,002 Plant, machinery, equipment and other improvements 239,640,411 21,340,387 (1,661,408) 259,319,390 Total capital assets being depreciated 667,311,153 33,060,899 6,247,981 706,620,033 Less accumulated depreciation for: Buildings 3,172,668 452,481 825,969 4,451,118 Landfill improvements 9,973,039 370,571 - 10,343,610 Water rights 14,872,659 695,990 - 15,568,649 Infrastructure 86,393,147 8,327,049 3,201,942 97,922,138 Plant, machinery, equipment and other improvements 119,062,393 10,613,300 (1,678,721) 127,996,972 Total accumulated depreciation 233,473,906 20,459,391 2,349,190 256,282,487 Total capital assets, being depreciated, net 433,837,247 12,601,508 3,898,791 450,337,546 Business-type activities capital assets, net $ 530,974,906 $ 52,895,096 $ (22,076,627) $ 561,793,375 Transfers and decreases in accumulated depreciation include $4,286,017 from the transfer of Airport assets from the General Government Governmental Activities to establish the Airport as an enterprise fund. Depreciation expense was charged to activities of funds/functions/programs as follows: 43 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 Construction commitments: The City has several major construction/capital projects planned or in progress as of September 30, 2011. These projects are evidenced by contractual commitments with contractors and include: Remaining ProjectSpent-to-DateCommitment Lake Lewisville Water Treatment Plant Upgrade$5,288,736$30,830,789 Bonnie Brae Widening Phase 1 Engineering2,010,6543,486,465 Mayhill Widening Phase 1 Engineering1,617,8283,121,137 RemoteElectricMeter Reading Network2,010,858990,111 Landfill Permit Expansion53,884968,577 Eagle Drive Drainage1,655,500571,941 Electric System Operations Center2,111,900545,161 E. Interfund receivables, payables and transfers A summary of interfund receivables and payables (in thousands) at September 30, 2011, is as follows: The more significant interfund receivables and payables include the following: Interfund receivablesInterfund payablesAmount Electric fundInternal service funds-materials management$2,223,841 WaterfundInternal service funds-materials management229,447 GeneralfundInternal service funds-materials management138,056 WastewaterfundInternal service funds-materials management 74,916 The outstanding balances between the Electric, Water,General Fund and Wastewater Funds and the Materials Management Fund are a result of the cash position in the Materials Management Fund due to inventory purchases. 44 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 Transfers between funds (in thousands) during the year were as follows: The more significant transfers include the following: Transfers from fundTransfers to fundAmount Non--Gas Well RevenuesAirport$4,645,090 -WideGovernmental ActivitiesAirport4,017,532 Capital ProjectsAirport1,355,777 WastewaterDebt Service556,245 General FundCapital Projects402,205 Beginning on October 1, 2010 the City created an Airport enterprise fund to account for all Airport operations. Previously the Airport operations were reported as part of the General Fund, the Capital Projects fund, and the Gas Well Revenues fund. All equity balances related to the Airport as of September 30, 2010 were transferred to the newly created Airport fund on October 1, 2010. The fixed assets and long-term debt balances related to the Airport were transferred to the newly created Airport fund as one net equity balance from the governmental activities in the government-wide presentation. The three transfers listed above are the significant amounts associated with the creation of the new Airport fund. Transfers from the Wastewater Fund to the Debt Service Fund were for related debt service payments. Transfers from the General Fund to the Capital Projects Fund were to fund capital projects. 45 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 F. Leases Leases payable represent the remaining principal amounts payable under lease purchase agreements for the acquisition of equipment through the General, Solid Waste, Tech Services, and Wastewater funds. These leases are recorded as capital leases. Remaining requirements, including interest, under these leases are as follows: YearPayments 2012$1,343,688 2013996,146 2014877,555 201558,497 58,497 2016 58,497 2017 Total minimum lease payments3,392,880 Less: amount representing interest233,844 $3,159,036 Present value of minimum future lease payments ent under capital lease arrangements as of September 30, 2011: Equipment$ 11,781,542 Less: Accumulated Depreciation (9,312,827) Total$ 2,468,715 46 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 G.Long-term debt Long-term liabilities transactions for the year ended September 30, 2011, are summarized as follows below and on the following pages: For Internal Service funds, long-term liabilities are included as part of the above totals for governmental activities. Compensated absences payables and municipal pension obligations are based on the assignment of an employee within a fund, with both historically being liquated predominantly by the General Fund.Other post employment benefits are liquidated from the Health Insurance internal service fund, with the retiree subsidy amounts paid predominantly by the General Fund. Claims payable represents an estimate of self- insured claims liability outstanding in the Health Insurance and Risk Retention internal service funds. 47 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 In October 2010, the Airport fund was created as an Enterprise fund as part of the Business-type Activities. The general bonded debt, unamortized premiums/(discounts), deferred gain/(loss) and bond issuance costs related to the Airport operations in the amount of $2,157,123 were transferred into the newly established fund. General bonded debt - General bonded debt at September 30, 2011, is comprised of the following: Gross Amount OriginalOutstanding at Interest RateFinalAmountSeptember 30, Bonded Debt(%)Issue DateMaturityof Issue2011 General obligation5.0 to 5.252002202212,075,000575,000 General obligation refunding3.0 to 4.75200320237,122,9992,915,650 General obligation refunding 2.5 to 5.0200420207,370,0005,330,000 General obligation 3.0 to 5.0200520255,000,0003,990,000 General obligation 4.25 to 4.875200620263,695,0003,080,000 General obligation4.0 to 4.52007202615,285,00013,805,000 General obligationrefunding4.0 to 5.252007202226,025,00024,800,000 General obligation4.0 to 4.75200820287,300,0006,595,000 General obligation refunding3.0 to 5.0200920166,695,0002,720,000 General obligation refunding3.0 to 5.0201020223,350,0003,350,000 General obligation4.0 to 4.3201020304,115,0004,010,000 General obligation2.0 to 4.75201120312,225,0002,225,000 Total general obligation bonds100,257,99973,395,650 Certificates of obligation4.7 to 5.25200220227,828,046498,927 Certificates of obligation3.0 to 4.75200320235,550,0002,669,440 Certificates of obligation2.0 to 5.02004202412,105,0009,053,052 Certificates of obligation3.0 to 4.375200520255,575,0003,195,000 Certificates of obligation4.0 to 4.75200620266,509,9503,985,000 Certificates of obligation4.7 to 5.0200720278,855,0005,785,000 Certificates of obligation4.0 to 5.02007A20287,065,0006,385,000 Certificates of obligation3.0 to 4.625200820287,865,0005,585,000 Certificates of obligation2.0 to 4.125201020302,750,0002,425,000 Certificates of obligation2.0 to 4.75201120313,455,0003,455,000 67,557,996 Total certificates of obligation43,036,419 Total general bonded debt$167,815,995$116,432,069 [These amounts do not include net unamortized premiums/(discounts) of $1,475,673 nor net deferred gain/(loss) on refunding of ($732,704).] Proceeds of general bonded debt are restricted to the uses for which they were approved in the bond elections. The City Charter expressly prohibits the use of bond proceeds to fund operating expenses. The general obligations are collateralized by the full faith and credit of the City and, primarily, payable from property taxes. In prior years, the City defeased general obligation bonds and certificates of obligation by placing the proceeds of new debt in an irrevocable trust to provide for all future debt service payments on the old bonds. 48 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 Accordingly, the trust account assets and liabilities for the defeased debt are not included in the City's financial statements. On September 30, 2011, $7,730,000 of general obligation bonds and $5,425,000 of certificates of obligation considered defeased are still outstanding. In May 2011, the City issued $32,100,000 ($28,645,000 of which is included as part of business type activities) in certificates of obligation. The debt was issued to pay the costs of various capital improvements in the Capital Projects Fund ($3,455,000), Electric ($20,250,000), Wastewater ($500,000), and Solid Waste ($7,895,000). In May 2011, the City issued $10,845,000 ($8,620,000 of which is included as part of business-type activities) of general obligation refunding bonds. The reacquisition price exceeded the net carrying amount of the old debt by $338,921, all of which is reported in business-type activities. This amount is being amortized over the remaining life of the refunded debt, which is shorter than the life of the new debt issued. This advance refunding was undertaken to reduce total debt service payments over the next 20 years by $724,809 and resulted in a net present value savings of $120,078. Revenue bonds Revenue bond debt at September 30, 2011, is comprised of the following issues: PrincipalNetNet OriginalOutstanding atUnamortizedOutstanding at Interest RateIssueFinalAmountSeptember30,Premium/September30, Revenue Bonds(%)DateMaturityof Issue2011(Discount)2011 Utility system4.25 to 5.02002202256,710,0005,340,00017,0795,357,079 Utility system5.0 to 6.52002202213,985,0001,280,000(1,282)1,278,718 Utility system 3.625 to refunding5.6252003202250,180,00027,635,000632,75928,267,758 Utility system refunding2.0 to 5.252004202424,850,00023,555,000708,12224,263,122 Utility system refunding3.0 to 5.02005202353,845,00053,255,0002,493,21855,748,218 Utility system refunding4.5 to 5.0200620268,515,0007,050,000 7,050,000 Utility system4.0 to 4.252007202616,740,00014,450,0002,86814,452,868 Utility system refunding4.0 to 4.252007202941,795,00041,330,00060,93041,390,930 Utility System3.50 to 5.002008202715,290,00013,630,00060,22613,690,226 Total revenue Bonds$281,910,000$187,525,000$3,973,920$191,498,920 [These amounts do not include net unamortized gain/(loss) on refunding of ($5,689,618).] The revenue bonds are collateralized by the revenue of the Denton utility system funds (System) and the various special funds established by the bond ordinance. The ordinance provides that the revenue of the System is to be used first to pay operating and maintenance expenses of the System and second to establish and maintain the revenue bond funds. Any remaining revenues may then be used for any lawful purpose. The ordinance also contains provisions, which among other items restrict the issuance of additional revenue bonds unless the special funds noted above contain the required amounts and certain financial ratios are met. Management believes the City is in compliance with all significant requirements. Assets in these accounts consist of cash and U.S. government securities. Below is a summary of the various net asset balances in the funds required by the bond ordinance to be restricted for debt service. Interest and sinking fund$11,946,307 Reserve fund13,802,154 Total net assets restricted for debt service$25,748,461 49 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 In prior years, the City defeased revenue bonds by placing the proceeds of new bonds in an irrevocable trust to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and liabilities for the defeased bonds are not included in the City's financial statements.On September 30, 2011, $41,050,000 of revenue bonds considered defeased are still outstanding. Other enterprise obligations General obligation bonds and certificates of obligation issued for electric, water, wastewater, solid waste and airport funds at September 30, 2011, is comprised of the following: Gross Amount OriginalOutstanding at Interest RateFinalAmountSeptember 30, Issue Other Obligations(%)DateMaturityof Issue2011 General obligation refunding3.0 to 4.7520032023$ 957,001$ 204,350 General obligation refunding2.5 to 5.0200420152,040,000590,000 General obligation refunding4.0 to 5.25200720222,885,0002,830,000 General obligation refunding3.0 to 5.020082016830,000575,000 General obligation refunding3.0 to 5.02010202235,815,00034,390,000 General obligation refunding2.0 to 4.0201120318,620,0008,620,000 Total general obligation bonds51,147,00147,209,350 Certificates of obligation4.7 to 5.25200220224,761,954166,073 Certificates of obligation3.0 to 4.75200320231,855,000240,560 Certificates of obligation2.0 to 5.0200420241,895,0001,181,948 Certificates of obligation3.0 to 4.375200520251,570,000640,000 Certificates of obligation4.0 to 4.75200620266,155,0503,030,000 Certificates of obligation4.7 to 5.0200720272,590,0001,455,000 Certificates of obligation2,820,0002,015,000 3.0 to 4.62520082028 Certificates of obligation58,295,00056,440,000 2.0 to 5.020102030 Certificates of obligation58,820,00056,740,000 2.0 to 5.020102025 Certificates of obligation28,645,00028,645,000 2.0 to 4.020112031 Total certificates of obligation167,407,004150,553,581 Total other enterprise obligations$218,554,005$197,762,931 [These amounts do not include net unamortized premiums/(discounts) of $9,104,396nor net deferred gain/(loss) on refunding of ($416,538).] 50 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 Schedule of long-term debt maturities Aggregate maturities of the long-term debt (principal and interest) for the years subsequent to September 30, 2011, are shown below: Governmental Activities: Business-Type Activities: [These amounts do not include net unamortized premiums/(discounts) of $14,553,986 nor net deferred gain/(loss) on refunding of ($6,838,862).] 51 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 Bonds authorized and unissued General obligation bonds authorized but unissued as of September 30, 2011 amounted to $3,994,000. When issued, the proceeds will be allocated to the applicable capital projects. H.Landfillclosure and post-closure cost State and federal laws and regulations require the City to place a final cover on its Mayhill Road landfill site upon closure and to perform certain maintenance and monitoring functions at the site for thirty years after closure. Although closure and post-closure care costs will be paid only upon anticipated closure, the City reports a portion of these costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. Based on a model created by a 2009 engineering study, total landfill closure and post- closure cost increased from $14,490,440 at September 30, 2010 to $14,838,211 at September 30, 2011. The $5,313,807 reported as landfill closure and post-closure care liability is a $384,183 increase from the $4,929,624 liability reported on September 30, 2010. This liability represents the cumulative amount incurred to date based on the use of 35.8% of the estimated capacity of the entire landfill at September 30, 2011. Based on this estimate, the remaining potential estimated liability for closure and post-closure care of the entire landfill is $9,524,404. The City will recognize the remaining estimated cost of closure and post-closure care as the remaining capacity is filled. These amounts are based on what it would cost to perform closure and post- closure care in 2011. Actual cost may fluctuate due to inflation, changes in technology, or changes in regulations. The landfill has a remaining life of 38 years, and the City expects to close the landfill in fiscal year 2049. The solid waste fund has provided for a restriction and designation of cash and investments of $5,385,000 at September 30, 2011, and anticipates increasing the reserve in future periods as the closure and post-closure activities are carried out. V.OTHER INFORMATION A.Pension plans Texas Municipal Retirement Plan Plan description The City provides pension benefits for all of its eligible employees (except fire fighters) through a non- traditional, joint contributory, hybrid-defined benefit plan in the state-wide Texas Municipal Retirement System (TMRS), one of 842 administered by TMRS, an agent multiple-employer public employee retirement system. Benefits Upon retirement, benefits depend upon the sum of the employee's contributions to the plan, with interest, and the city-financed monetary credits, with interest. City-financed monetary credits are composed of three sources: prior service credits, current service credits, and updated service credits. At the inception of each e credits) of a theoretical amount at least equal to two times what would have been contributed by the employee, with interest (3% annual), prior to establishment of the plan.Monetary credits for service since the plan began (or current service credits) are a percent (200%) of the employee's accumulated contributions. In addition, the City can grant, either annually or on an annually repeating basis, another type of monetary credit referred to as an updated service credit. This monetary credit is determined by hypothetically account balance by assuming the current member deposit rate of the City (7%) has always been in effect. The using a salary calculation based on the 36-month period ending a year before the effective date of calculation. This hypothetical account balance is increased by 3% each year, and increased by the city match currently in effect (200%). The resulting sum is then city match and actual interest credited. If the hypothetical calculation exceeds the actual calculation, the member is granted a monetary credit (or Updated Service Credit) equal to the difference between the 52 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 hypothetical calculation and the actual calculation times the percentage adopted. At retirement, the benefit is calculated as if the sum of the employee's accumulated contributions with interest and the city-financed monetary credits with interest were used to purchase an annuity. Members can retire at ages 60 and above with 5 or more years of service or with 20 years of service regardless of age. A member is vested after five years. The plan provisions are adopted by the governing body of the City, within the options available in the state statutes governing TMRS and within the actuarial constraints also in the statutes. Contributions The contribution rate for the employees is 7% of gross earnings, and the City matching percentage is currently 200%, both as adopted by the governing body of the City. Under the state law governing TMRS, the actuary annually determines the city contribution rate using the Projected Unit Credit actuarial cost method. This rate consists of the normal cost contribution rate and the prior service contribution rate, both of which are calculated to be a level percent of payroll from year to year. The normal cost contribution rate finances the portion of an nnually. The prior service contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's 30-year amortization period. Both the normal cost and prior service contribution rates include recognition of the projected impact of annually repeating benefits, such as Updated Service Credits and Annuity Increases. Both the employees and the City make contributions monthly. Since the City needs to know its contribution rate in advance for budgetary purposes, there is a one-year delay between the actuarial valuation that serves as the basis for the rate and the calendar year when the rate goes into effect. Funded status and funding progress ver a period of up to eight years in order to recognize the change to a Projected Unit Cost Method in the 2007 valuation. By doing so, the City will contribute less than the actuarially determined annual required contribution (ARC), and as such will need to accrue a net pension obligation on its balance sheet. In subsequent years, this net pension obligation will continue to increase until the full actuarially determined ARC is paid. The annual pension cost and net pension obligation are as follows: Net Pension Obligation Annual required contribution$ 11,580,085 Interest on prior year net pension obligation 309,400 Adjustment to annual required contribution (255,518) Annual pension cost 11,633,967 Contributions made 9,579,358 Increase in net pension obligation 2,054,609 Net Pension obligation - beginning of year 4,125,332 Net pension obligation - end of year$ 6,179,941 Three-Year Trend Information for TMRS Funding Year ending9/30/119/30/109/30/09 Annual pension costs(APC)$11,633,967$11,218,568$9,709,279 Actual contributions$9,579,358$8,849,577$7,952,938 Percent contributed82%79%82% Net pension obligation$6,179,941$4,125,332$1,756,341 53 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 In 2011, the Texas Legislature approved Senate Bill 350 (SB 350) which restructered the TMRS funds. This legislation permitted the TMRS actuary to prepare the December 31, 2010 actuarial valuation as if the fund restructuring had occurred as of December 31, 2010. In addition, the actuarial assumptions were updated for the new fund structure and adopted by the TMRS Board at their May 2011 meeting. For a more complete description of the impact of the legislation and new actuarial assumptions, please refer to the December 31, 2010 TMRS Comprehensive Annual Financial Report (CAFR). The funded status as of December 31, 2010 under the two separate actuarial valuations is presented below: Actuarial Actuarial Actuarial Accrued Valuation Valuation of Liability Unfunded Funded Fiscal YearDateAssets(AAL)AAL (UAAL)RatioARC Rate 1 201112/31/2010$148,131,734$231,155,736$83,024,00264.1%20.54% 2011 2 12/31/2010$208,101,143$279,659,548$71,558,40574.4%18.58% 1 Actuarial valuation performed under the original fund structure. 2 Actuarial valuation performed under the new fund structure approved in SB 350. through fiscal year 2016, but due in part to the new fund structure approved by SB 350, management intends on paying the full ARC beginning in fiscal year 2012-2013. Actuarial Assumptions 12/31/10 Actuarial cost methodProjected unit credit Amortization methodLevel percent of payroll Remaining amortization period27.2years closedperiod Amortization period for new Gains/Losses30 years Asset valuation method10-year Smoothed Market Investment rate of return7.0% Projected salary increasesVaries by age and service Includes inflation at3.0% Cost-of-living adjustments2.1% As of December 31, 2010, the most recent valuation date, the covered payroll (annual payroll of active employees covered by the plan as of the valuation date) was $58,112,441, and the ratio of the UAAL to the covered payroll was 123.1%.The City adopted the Updated Service Credit provision in 1992, on a repeating basis. Additionally, the City adopted annuity increases for its retirees, on a repeating basis in 1992 equal to 70% of the change in consumer price index. The City of Denton is one of 842 municipalities having the benefit plan administered by TMRS. Each of the 842 municipalities has an annual, individual actuarial valuation performed. All assumptions for the December 31, 2010, valuations are contained in the 2010 TMRS Comprehensive Annual Financial Report, a copy of which may be obtained by writing to P.O. Box 149153, Austin, Texas 78714-9153; in addition, the at www.TMRS.com. 54 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 Supplemental death benefit fund The City of Denton contributes to a cost-sharing multiple-employer defined benefit group-term life insurance plan known as the Supplemental Death Benefits Fund (SDBF). This is a separate trust administered by the TMRS Board of Trustees and is a voluntary program in which the City elected, by ordinance, to provide group term life insurance coverage to active and retired members. The City may terminate coverage under and discontinue participation in the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. Contributions are made monthly based on the covered payroll of employee members of the City. The contractually required contribution rate is determined annually, and the rate is based on the mortality and service experience of all employees covered by the SDBF and the demographics specific to the workforce of the City. There is a one-year delay between the actuarial valuation that serves as the basis for the employer contribution rate and the calendar year when the rate goes into effect. The contributions to the SDBF are pooled for investment purposes with those of the Pension Trust Fund described above. The TMRS Act requires the Pension Trust Fund to allocate investment income to the SDBF on an annual basis. The funding policy of the plan is to assure adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to prefund reti are utilized to fund active member deaths on a pay-as-you-go basis; any excess contributions and investment income over payments then become net assets available for postemployment benefits other than pension benefits (OPEB).fiscal years ended September 30, 2009, 2010, and 2011, were $124,275, $116,414, and $123,135 respectively, which equaled the required contributions each year. Payments from this fund are similar to group term life insurance benefits, and are paid to the designated beneficiaries upon the receipt of an approved application for payment. The death benefit for active employees provides a lump-sum payment approximately retirees is considered an OPEB and is a fixed amount of $7,500. The obligations of this plan are payable only from the SDBF and are not an obligation of, or claim against, the Pension Trust Fund. Denton Firemen's Relief and Retirement Plan Plan description - employer defined benefit pension plan. covers firefighters in the Denton Fire Department. The table below summarizes the membership of the fund as of December 31, 2009, the most recent biennial actuarial valuation. 12/31/09 1.Retirees and beneficiaries currently receiving benefits and terminated employees entitled to 63 benefits but not yet receiving them 2.Current employees a. Vested92 b. Nonvested71 3.Total226 wal benefits. These benefits vest after 10 years of credited service. Firefighters may retire at age 50 with 20 years 55 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 of service. As of the December 31, 2009 actuarial valuation date, the Plan effective September 1, 2008 provided a monthly normal service retirement benefit, payable in a joint and two-thirds to spouse form of annuity, equal to 2.59% of highest 36-month average salary for each year of service. There is no provision for automatic postretirement benefit increases. The fund has the authority to provide, and has periodically in the past provided for, ad hoc postretirement benefit increases. The benefit provisions of this authority and procedure to amend benefit provisions. Contributions required and contributions made The contribution provisions of this plan are authorized by TLFFRA. The TLFFRA provides the authority and procedure to change the amount of contributions determined as a percentage of pay by each firefighter and a percentage of payroll by the city. While the contribution requirements are not actuarially determined, state law requires that each plan of benefits adopted by the fund must be approved by an eligible actuary.The actuary certifies that the contribution commitment by the firefighters and the city provides an adequate financing arrangement. Using the entry age ex accrued liability is determined using an open, level percentage of payroll method. The costs of administering the plan are financed from the fund. 2.6% of pay by the firefighters and contributions by the City equal to the same percentage of payroll the City contributes to the Texas Municipal Retirement System for other employees.The December 31, 2009 actuarial valuation assumes that the city contribution rate will average 16%of payroll in the future.The City contribution rate for 2011 was 17.17% by the City and 12.6% by the firefighters and is scheduled to be 17.58% by the City and 12.6% by the firefighters for 2012. Three-unding Year ending9/30/119/30/109/30/09 Annual pension costs (APC)$2,141,662$1,976,155$1,747,908 Actual contributions$2,141,662$1,976,155$1,747,908 Percent contributed100%100%100% 56 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 Actuarial Assumptions 12/31/09 Actuarial cost methodEntry age Amortization methodLevel percent of payroll, open Amortization period for ARC26years Asset valuation method5-year adjusted market value Investment rate of return7.25% Projected salary increases3.75% plus promotion and longevity Includes inflation at3.50% Cost-of-living adjustmentsNone Payroll increases3.75% ARC as percent of payrollBudgeted rates As of December 31, 2009, the most recent valuation date, the plan was 70.2% funded. The actuarial accrued liability for benefits was $65,874,164, and the actuarial value of assets was $46,256,617, resulting in an unfunded actuarial accrued liability (UAAL) of $19,617,547. The covered payroll (annual payroll of active employees covered by the plan as of the valuation date) was $12,750,355, and the ratio of the UAAL to the covered payroll was 153.9%. Financial statements are available and can be obtained by contacting the Denton Fire Department at the City of Denton at 332 E. Hickory, Denton, Texas 76201. B. Post-employment benefits other than pensions (OPEB) The cost of post-employment healthcare benefits, from an accrual accounting perspective, similar to the cost of pension benefits, should be associated with the periods in which the cost occurs, rather than in the future year when it will be paid. According to the requirements of GASB Statement No. 45 for the fiscal year ended September 30, 2011, the City recognizes the cost of post-employment healthcare in the year the employee services are received, reports the accumulated liability from prior years, and provides information useful in years will be amortized over 30 years, the first period commencing with the fiscal year ending September 30, 2008. Plan description The City provides post-employment medical care (OPEB) for retired employees through a single-employer defined benefit medical plan. The plan provides medical benefits for eligible retirees, their spouses and benefits, benefit levels, and contribution rates are approved annually by the City management as part of the budget process. Any changes in rate subsidies for retirees are approved by the City Council.Since an irrevocable trust has not been established, the plan is not accounted for as a trust fund. The plan does not issue a separate financial report. Benefits provided The City provides post-employment medical, dental, and vision care benefits to its retirees. To be eligible for benefits, an employee must qualify for retirement under the Texas Municipal Retirement System or the Denton 57 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 Relief and Retirement Plan. Retirees must make a one-time irrevocable decision to chose benefits at the time of retirement, after that their eligibility for the benefits ceases. -insured health plan. The benefit levels are the same as those afforded to active employees. As of September 30, 2011, membership consisted of: Retirees and beneficiaries receiving benefits 132 Terminated employees eligible for benefits, but not yet enrolled - Active employees 1,129 Total 1,261 Funding policy The plan premium rates are determined annually by City management and approved by the City Council as part of the annual budgetfull amount of the actuarially determined blended premium rate less a subsidy dependent upon years of service at retirement. By providing retirees with access to n effect providing a subsidy to retirees. This implied subsidy exists because, on average, retiree health care costs are higher than active employee healthcare costs. By the City not contributing anything toward this plan in advance, the City employs a pay-as-you-go method through paying the higher rate for active employees each year. The subsidies paid by the City for the fiscal year ended September 30, 2011 totaled $66,960 and are calculated as follows: Years of serviceSubsidy < 5 years$20/month 5 - 9 years$40/month 10 - 14 years$60/month 15 - 19 years$80/month 20+ years$100/month No. 45 liability was discussed at length with the Audit/Finance Committee and the City Council. At the conclusion of these discussions, the City Council concurred with the staff -as-you-go basis. This basis has been recommended overall budget, and 3) the pay-as-you-go cost is not forecast to exceed the ARC until approximately the year 2031. This approach will be reevaluated every two years when new valuations are prepared. Annual OPEB costs and Net OPEB obligation -employment benefit (OPEB) cost is calculated based on the annual required contribution of the City (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities over a period not to exceed thirty years. as follows at September 30, 2011: 58 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 Annual required contribution$ 1,314,901 Interest on prior year Net OPEB obligation 100,814 Adjustment to annual required contribution (145,436) Annual OPEB cost 1,270,279 Contributions made 623,130 Increase in net OPEB obligation 647,149 Net OPEB obligation - beginning of year 2,520,343 Net OPEB obligation - end of year$ 3,167,492 Percentage of OPEB costs contributed49.05% Funded status and funding progress The funded status of the plan as of the actuarial measurement date of October 1, 2009 was as follows: Actuarial accrued liability$ 10,944,544 Actuarial value of plan assets - Unfunded actuarial accrued liability$ 10,944,544 Funded ratio0.0% Covered payroll$ 74,045,518 Unfunded actuarial accrued liability as a percentage of covered payroll14.8% Three-Year Trend Information for OPEBFunding Year ending9/30/119/30/109/30/09 Annual OPEB costs$1,270,279$1,284,569$866,645 Actual contributions$623,130$370,759$69,696 Percent contributed49%29%8% Net OPEBobligation$3,167,492$2,520,343$1,606,533 The schedule of funding progress, presented as Required Supplementary Information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability of benefits. Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. Actuarial methods and assumptions Projections of benefits are based on the substantive plan (the plan understood by the employer and plan members) and include the type of benefits in force at the valuation date and the pattern of sharing benefits between the City and the plan members at that point. Actuarial calculations reflect a long-term perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Significant method and assumptions used for this fiscal year valuation as shown on the following page were as follows: 59 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 Actuarial Assumptions 10/1/09 Actuarial cost methodProjected Unit credit Amortization methodLevel dollar, closed Amortization period for ARC28years Asset valuation methodN/A Investment rate of return4.0% Includes inflation at2.75% Healthcare inflation rate8.2% initial, 4.2% ultimate grade-in periodthrough2082 Medical reimbursements The federal government may provide the city subsidy per the Medicare Part D Prescription Drug Subsidy Program for providing healthcare for Medicare eligible employees. As the City does not participate in these subsidies, any current and future year subsidies are notrecognized as a reduction to the actuarial accrued liability. C. Deferred compensation plan The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. For the calendar 2011 year, the plan, available to all permanent City employees, permitted them to defer, until future years, up to 25% of annual gross earnings not to exceed $16,500. Employees who are age 50 or older may contribute an amount not to exceed $22,000. Employees who are within three years of retirement eligibility may elect to participate in a catch-up provision allowed by Section 457, which has an annual maximum contribution amount of $33,000. The withdrawal of deferred compensation funds is not available to employees until termination, retirement, death, or unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are, until paid or made available to the employee or other beneficiary, solely the property and rights of the employees. Accordingly, the assets and It is the opinion of the City's legal counsel that the City has no liability for losses under the plan. D. Self-insurance plan The City has established a self-insurance plan for liability and workers' compensation benefits in the Risk Retention Fund. Accrued claims payable include provisions for claims reported and claims incurred but not reported. The provision for reported claims is determined by estimating the amount which will ultimately be paid for each claimant. The provision for claims incurred but not yet reported is estimated based on actuarial studies. It is the policy of the City of Denton not to purchase commercial insurance for workers' compensation claims or general liability. Commercial liability insurance coverage is purchased for public officials, airport operations, emergency medical services, take-home vehicles, and employee theft and dishonesty. Additionally, excess s. The City reports liabilities when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. Liabilities include an amount for claims that have been incurred but not reported. Because actual claim liabilities depend 60 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 on such complex factors as inflation, changes in legal doctrines, and damage awards, the process used in computing claims liability does not necessarily result in an exact amount. In January 2008, the City started a self-insured group employee health insurance plan. Claims are paid from the Health Insurance Fund, which has an annually negotiated stop loss provision. The -insurance plans are reported as interfund transactions. Accordingly, they are treated as operating revenues of the Internal Service Risk Retention Fund and Health Insurance Fund and operating expenditures (expenses) of the other funds and employee payroll deductions. Claims liabilities are re-evaluated periodically to take into consideration settlement of claims, new claims and other factors. As of September 30, 2011, the estimated value of these liabilities was $3,647,310. Changes in balances of claims liabilities during fiscal years 2011 and 2010 were as follows: Claims LiabilityClaims andClaims Liability Beginning ofChange inClaimsEnd of Fiscal YearEstimatesPaymentsFiscal Year Workers' Compensation 2011$2,053,404$276,552$471,042$1,858,914 20103,478,137(808,247)616,4862,053,404 General Liability 2011$564,539$260,318$166,411$658,446 2010376,518228,05840,037564,539 Health Insurance 2011$826,510$14,502,936$14,199,496$1,129,950 2010952,17814,481,86314,607,531826,510 On September 30, 2010, the City of Denton held additional amounts in unrestricted net assets of $3,891,035 in the Risk Retention Fund and $4,777,722 in the Health Insurance Fund for payment of claims. There were no significant reductions in insurance coverage from coverage in the prior year, and the amount of settlements did not exceed insurance coverage in the current year or in any of the past three fiscal years. E. Commitments and contingencies Agreement with TMPA In 1976, the City, along with the cities of Bryan, Greenville, and Garland, Texas (the Cities) entered into a Power Sales Contract with the Texas Municipal Power Agency (TMPA). TMPA was created through concurrent ordinances of the Cities and is governed by a Board of Directors consisting of eight members, two appointed by the governing body of each city. Under the terms of the agreement, TMPA agreed to construct or acquire electric generating plants to supply energy and power to the Cities for a period of not less than 35 years. The Cities in turn agreed to purchase all future power and energy requirements in excess of the amounts generated by their systems from TMPA at prices intended to cover operating costs and retirement of debt. In the event that revenues are insufficient to cover all costs and retire the outstanding debt, each of the Cities has guaranteed a portion of the unpaid debt based, generally, upon its pro rata share of the energy delivered to consumers in the prior operating year. As of September 30, 2011, total TMPA long-term debt outstanding was approximately $858,612,000, and the City's percentage was approximately 21.3%.In December 2009, the City and the other Member Cities entered into a Global Compromise Settlement Agreement. As part of the settlement, the Member Cities agreed to issue Subordinate Lien Bonds. The City Council approved the issuance of $58,820,000 of combination tax and refinanced. In the opinion of management, the possibility of a material payment in the near future under this agreement is remote in that TMPA is generating operating profits, and assets exceed liabilities. 61 CITY OF DENTON, TEXAS NOTES TO BASIC FINANCIAL STATEMENTS (continued) SEPTEMBER 30, 2011 TMPA operates a 462-megawatt, coal-fired generating plant. In 1996, TMPA switched to an external source of coal to reduce costs. Should TMPA be dissolved, each city would be entitled to an undivided interest in the property. Selected financial statement information of TMPA is as follows: September 30 (Unaudited) 20112010 (000s)(000s) Operating revenues$ 180,586$ 253,647 Operating expenses159,862143,998 Operating income20,724109,649 Other non-operating sources (uses)3,291(3) Current unrestricted assets45,32144,080 Total assets1,189,1651,190,004 Long-term debt Noncurrent826,414787,195 Total liabilities1,137,6861,132,361 Total net assets51,47957,643 Agreement with the City of Dallas During 1985, the City entered into an agreement with the City of Dallas that provides for the purchase of a minimum of 500,000 gallons/day of untreated water from the City of Dallas from Lake Lewisville. This contract will be effective for 30 years. The cost of water purchased under this agreement during fiscal year 2011 was $85,678. F.Litigation Various claims and lawsuits are pending against the City. In accordance with GAAP, those judgments disclosed but not accrued. In the opinion of City management and legal counsel, the maximum amount of all significant claims considered reasonably possible, excluding condemnation proceedings, is approximately $500,000 as of September 30, 2011. Potential losses after insurance coverage on all probable claims and lawsuits will not have a material effect on the City's financial position as of September 30, 2011. G.Subsequent events The City has evaluated all events or transactions that occurred after September 30, 2011 up through February 10, 2012, the date the financial statements were issued. In October 2011 the City received $70 million in additional funding on an ongoing project from the Texas Department of Transportation for the widening and reconstruction of Bonnie Brae and Mayhill roads. Total funding for these two projects will be over $91 million. As the funding is received in advance of project expenditures, it will be recorded as unearned (deferred) revenues and recognized as revenues when valid expenditures are incurred and earned. In October 2011 the City created a new special revenue fund, the Street Improvement Fund. The purpose of the fund is to provide a dedicated mechanism to account for street maintenance and improvement activities. The fund will receive revenue from a portion of the franchise fees previously accounted for in the General Fund, as well as street cut reimbursement revenues. Additionally, interest cost saving associated with the sale of Certificates of Obligation in lieu of Revenue Bonds will be recorded as revenue in this fund. All of these revenues have been committed by City Council for street maintenance and improvement activities. Currently the revenues and expenditures associated with these activities are recorded and presented as part of the General Fund, and $921,779 of the General Fund fund balance on September 30, 2011 have been committed for the Street Improvement Fund. **** 62 CITY OF DENTON, TEXAS REQUIRED SUPPLEMENTARY INFORMATIONExhibit XII SCHEDULE OF TEXAS MUNICIPAL RETIREMENT SYSTEM FUNDING PROGRESS AND CONTRIBUTIONS LAST THREE FISCAL YEARS (Unaudited) ActuarialUnfunded AccruedActuarial ActuarialActuarialLiability (AAL)Accrued FiscalValuationValue ofUnit CreditLiabilityFunded YearDateAssetsMethod(UAAL)Percent 200912/31/2008$ 122,458,472$ 195,038,325$ (72,579,853) 63% 201012/31/2009137,336,828221,022,906(83,686,078)62 201112/31/2010208,101,143279,659,548(71,558,405)74 UAAL as Percent ofAnnual FiscalCoveredCoveredPensionActualPercent YearPayrollPayrollCostsContributionsContributed 2009$55,905,136 129.8%$ 9,709,279$ 7,952,938 82% 201061,295,163136.511,218,5688,849,57779 201158,112,441123.111,633,9679,579,35882 SCHEDULE OF DENTON FIREMEN'S RELIEF AND RETIREMENT PLAN FUNDING PROGRESS AND CONTRIBUTIONS LAST THREE VALUATION YEARS (Unaudited) ActuarialUnfunded AccruedActuarial ActuarialActuarialLiability (AAL)Accrued FiscalValuationValue ofUnit CreditLiabilityFunded YearDateAssetsMethod(UAAL)Percent 200612/31/2005$ 34,677,009$ 45,341,724$ (10,664,715) 77% 200812/31/200741,020,64852,675,541(11,654,893)78 201012/31/200946,256,61765,874,164(19,617,547)70 UAAL as Percent ofAnnual FiscalCoveredCoveredPensionActualPercent YearPayrollPayrollCostsContributionsContributed 2006$10,445,026 102.1%$ 942,237$ 942,237 100% 200811,320,817103.01,426,9061,426,906100 201012,750,355153.91,976,1551,976,155100 63 CITY OF DENTON, TEXAS REQUIRED SUPPLEMENTARY INFORMATIONExhibit XIII SCHEDULE OF OTHER POST EMPLOYMENT BENEFITS FUNDING PROGRESS AND CONTRIBUTIONS LAST TWO VALUATION YEARS (Unaudited)* ActuarialUnfunded AccruedActuarial ActuarialActuarialLiability (AAL)Accrued FiscalValuationValue ofUnit CreditLiabilityFunded YearDateAssetsMethod(UAAL)Percent 20087/31/2007-$ 7,926,202$ (7,926,202) 0% 201010/1/2009-10,944,544(10,944,544)0 UAAL as Percent ofAnnual FiscalCoveredCoveredOPEBActualPercent YearPayrollPayrollCostsContributionsContributed 2008$61,668,312 12.9%$ 879,280$ 69,696 8% 201074,045,51814.81,284,569370,75929 *Fiscal year 2008 was the first year the City implemented GASB Statement No. 45. Only two actuarial valuation studies have been performed, with the next valuation scheduled for fiscal year 2012. 64 CITY OF DENTON, TEXASExhibit XIV SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL DEBT SERVICE FUND FOR THE YEAR ENDED SEPTEMBER 30, 2011 Variance with Adjustments -Actual on aFinal Budget - Budgeted AmountsActualBudgetaryBudgetaryPositive OriginalFinalAmountsBasisBasis(Negative) REVENUES: Taxes$ 13,826,539$ 13,826,539$ 13,907,958$ -$ 13,907,958$ 81,419 Investment revenue350,000350,00035,231-35,231(314,769) Total revenues14,176,53914,176,53913,943,189-13,943,189(233,350) EXPENDITURES: Debt service: Principal, interest and fiscal charges31,283,17731,283,17714,601,20416,523,88231,125,086158,091 Total expenditures31,283,17731,283,17714,601,20416,523,88231,125,086158,091 Deficiency of revenues under expenditures(17,106,638)(17,106,638)(658,015)(16,523,882)(17,181,897)(75,259) OTHER FINANCING SOURCES (USES): Transfers in17,494,85417,494,854818,84016,523,88217,342,722(152,132) Transfers Out--(236,280)-(236,280)(236,280) Total other financing sources17,494,85417,494,854582,56016,523,88217,106,442(388,412) Net change in fund balance388,216388,216(75,455)-(75,455)(463,671) Fund balance at beginning of year3,354,5353,354,5353,354,535-3,354,535- Fund balance at end of year$ 3,742,751$ 3,742,751$ 3,279,080$ -$ 3,279,080$ (463,671) 65 66 NONMAJOR GOVERNMENTAL FUNDS SPECIAL REVENUE FUNDS Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for particular purposes. Community Development Block Grant (CDBG) to account for the operations of projects utilizing Community Development Block Grant Funds. Such revenues are restricted to expenditures for specified projects by the Department of Housing and Urban Development. Recreation to account for the revenues and expenditures for the recreation programs that are self-supporting. All expenditures will be reimbursed 100%. Various business operations, such as concessions, fall into this account. Criminal Justice to account for revenue received from the State of Texas Criminal Justice Division and other grants administered by the police department. Police Confiscation to account for revenues received from confiscated goods. Expenditures are restricted to enhancing law enforcement. Tourist and Convention to account for taxes received from hotel and motel occupancy for the purpose of promoting tourism. Gas Well Revenues to account for the receipt of royalty, pooling, tax, and lease revenue related to gas wells. to account for several small trust funds that are for park development. All Other to account for miscellaneous special revenue sources that are required to finance specific activities. 67 CITY OF DENTON, TEXAS COMBINING BALANCE SHEET NONMAJOR GOVERNMENTAL FUNDS SEPTEMBER 30, 2011 Special Revenue Funds Community DevelopmentCriminalPolice Block GrantRecreationJusticeConfiscation ASSETS Cash, cash equivalents and investments, at fair value$ -$ 447,755$ -$ 152,406 Receivables (net of allowances): Accrued interest-1,870-579 Other125--- Interfund receivables-203,993-- Due from other governments216,528-81,907- Total assets$ 216,653$ 653,618$ 81,907$ 152,985 LIABILITIES AND FUND BALANCES LIABILITIES: Accounts payable$ 78,872$ 57,280$ -$ 10 Interfund payables122,087-81,906- Retainage payable---- Deferred revenues--42,984- Total liabilities200,95957,280124,89010 FUND BALANCES: Restricted for: ---- Parks and recreation 15,694--152,975 Other grants and purposes Committed to: -596,338-- Parks and recreation ---- Other purposes Assigned to: ---- Other purposes Unassigned--(42,983)- Total fund balance15,694596,338(42,983)152,975 Total liabilities and fund balances$ 216,653$ 653,618$ 81,907$ 152,985 68 Exhibit XV Special Revenue Funds (continued)Total TouristCitizens'Nonmajor andGas WellParkAllGovernmental ConventionRevenuesTrustsOtherFunds $ 435,776$ 2,166,186$ 4,779,478$ 1,094,773$ 9,076,374 -9,07720,0274,58736,140 122,782252,411-129,806505,124 ----203,993 ---693,718992,153 $ 558,558$ 2,427,674$ 4,799,505$ 1,922,884$ 10,813,784 $ 20,264$ -$ 87,083$ 135,410$ 378,919 ----203,993 ---106,583106,583 -32,865-692,945768,794 20,26432,86587,083934,9381,458,289 -761,2574,712,42244,0315,517,710 538,294--516,8591,223,822 ---831,3791,427,717 -1,633,552-234,0871,867,639 ---77,34177,341 ---(715,751)(758,734) 538,2942,394,8094,712,422987,9469,355,495 $ 558,558$ 2,427,674$ 4,799,505$ 1,922,884$ 10,813,784 69 CITY OF DENTON, TEXAS COMBINING STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES NONMAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Special Revenue Funds Community DevelopmentCriminalPolice Block GrantRecreationJusticeConfiscation REVENUES: Fees for services$ -$ 1,385,850$ -$ - Fines and forfeitures---96,446 Investment revenue-4,232-1,384 Tax revenue---- Intergovernmental2,092,517-57,124- Miscellaneous78,188152-14,423 Total revenues2,170,7051,390,23457,124112,253 EXPENDITURES: General government1,790,815--- Public safety--61,358147,291 Parks and recreation-1,335,961-- Capital outlay27,71655,72054,61145,709 Total expenditures1,818,5311,391,681115,969193,000 Excess (deficiency) of revenues over (under) expenditures352,174(1,447)(58,845)(80,747) OTHER FINANCING SOURCES (USES): Transfers in--15,862- Transfers out(352,428)(35,000)-- Total other financing sources (uses)(352,428)(35,000)15,862- Net change in fund balances(254)(36,447)(42,983)(80,747) Fund balance at beginning of year15,948632,785-233,722 Fund balance (deficit) at end of year$ 15,694$ 596,338$ (42,983)$ 152,975 70 Exhibit XVI Special Revenue Funds (continued) Total TouristCitizens'Nonmajor andGas WellParkAllGovernmental ConventionRevenuesTrustsOtherFunds $ -$ 475,238$ 604,459$ 273,486$ 2,739,033 ---616,417712,863 -14,50228,6134,85353,584 1,513,468---1,513,468 ---4,049,3866,199,027 -8,501-334,290435,554 1,513,468498,241633,0725,278,43211,653,529 1,250,249--3,233,5636,274,627 ---1,429,1301,637,779 ---140,5521,476,513 --464,191407,3501,055,297 1,250,249-464,1915,210,59510,444,216 263,219498,241168,88167,8371,209,313 ---99,459115,321 -(5,090,990)-(329,146)(5,807,564) -(5,090,990)-(229,687)(5,692,243) 263,219(4,592,749)168,881(161,850)(4,482,930) 275,0756,987,5584,543,5411,149,79613,838,425 $ 538,294$ 2,394,809$ 4,712,422$ 987,946$ 9,355,495 71 CITY OF DENTON, TEXASExhibit XVII SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL SPECIAL REVENUE FUNDS: RECREATION FUND FOR YEAR ENDED SEPTEMBER 30, 2011 Variance with Adjustments -Actual on aFinal Budget - Budgeted AmountsActualBudgetaryBudgetaryPositive OriginalFinalAmountsBasisBasis(Negative) REVENUES: Fees for services$ 1,421,460$ 1,421,460$ 1,385,850$ -$ 1,385,850$ (35,610) Investment revenue20,00020,0004,232-4,232(15,768) Miscellaneous--152-152152 Total revenues1,441,4601,441,4601,390,234-1,390,234(51,226) EXPENDITURES: Parks and recreation1,366,7631,366,7631,335,961-1,335,96130,802 Capital outlay100,000100,00055,720-55,72044,280 Total expenditures1,466,7631,466,7631,391,681-1,391,68175,082 Excess of revenues over expenditures(25,303)(25,303)(1,447)-(1,447)23,856 OTHER FINANCING SOURCES (USES): Transfers out(156,735)(156,735)(35,000)-(35,000)121,735 Total other financing uses(156,735)(156,735)(35,000)-(35,000)121,735 Net change in fund balance(182,038)(182,038)(36,447)-(36,447)145,591 Fund balance at beginning of year632,785632,785632,785-632,785- Fund balance at end of year$ 450,747$ 450,747$ 596,338$ -$ 596,338$ 145,591 72 CITY OF DENTON, TEXASExhibit XVIII SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL SPECIAL REVENUE FUNDS: POLICE CONFISCATION FUND FOR YEAR ENDED SEPTEMBER 30, 2011 Variance with Adjustments -Actual on aFinal Budget - Budgeted AmountsActualBudgetaryBudgetaryPositive OriginalFinalAmountsBasisBasis(Negative) REVENUES: Fines and forfeitures$ 178,875$110,869$ -$ (68,006) $ 1 78,875$ 110,869 Investment Revenue--1,384-1,3841,384 Total revenues178,875178,875112,253-112,253(66,622) EXPENDITURES: Public safety193,000193,000147,291-147,29145,709 Capital outlay--45,709-45,709(45,709) Total expenditures193,000193,000193,000-193,000- Net change in fund balance(14,125)(14,125)(80,747)-(80,747)(66,622) Fund balance at beginning of year233,722233,722233,722-233,722- Fund balance at end of year$ 219,597$152,975$ -$ (66,622) $ 2 19,597$ 152,975 73 CITY OF DENTON, TEXASExhibit XIX SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL SPECIAL REVENUE FUNDS: TOURIST AND CONVENTION FUND FOR YEAR ENDED SEPTEMBER 30, 2011 Variance with Adjustments -Actual on aFinal Budget - Budgeted AmountsActualBudgetaryBudgetaryPositive OriginalFinalAmountsBasisBasis(Negative) REVENUES: Taxes$1,294,014$ 1,294,014$1,513,468$ -$1,513,468$ 219,454 Total revenues1,294,0141,294,0141,513,468-1,513,468219,454 EXPENDITURES: General government1,314,2461,314,2461,250,249-1,250,24963,997 Total expenditures1,314,2461,314,2461,250,249-1,250,24963,997 Net change in fund balance(20,232)(20,232)263,219-263,219283,451 Fund balance at beginning of year275,075275,075275,075-275,075- Fund balance at end of year$ 254,843$ -$ 283,451 $ 254,843$ 538,294$ 538,294 74 CITY OF DENTON, TEXASExhibit XX SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL SPECIAL REVENUE FUNDS: GAS WELL REVENUES FUND FOR YEAR ENDED SEPTEMBER 30, 2011 Variance with Adjustments -Actual on aFinal Budget - Budgeted AmountsActualBudgetaryBudgetaryPositive OriginalFinalAmountsBasisBasis(Negative) REVENUES: Fees for service$ 352,000$ 475,238$ -$ 475,238$ 123,238 $ 352,000 Investment revenue41,30041,30014,502-14,502(26,798) Miscellaneous10,50010,5008,501-8,501(1,999) Total revenues403,800403,800498,241-498,24194,441 EXPENDITURES: General government392,900392,900---392,900 Total expenditures392,900392,900---392,900 Excess (deficiency) of revenues over (under) expenditures10,90010,900498,241-498,241487,341 OTHER FINANCING SOURCES (USES): Transfers out(350,000)(350,000)(5,090,990)4,645,090(445,900)(95,900) Total other financing uses(350,000)(350,000)(5,090,990)4,645,090(445,900)(95,900) Net change in fund balance(339,100)(339,100)(4,592,749)4,645,09052,341391,441 Fund balance at beginning of year6,987,5586,987,5586,987,558-6,987,558- Fund balance at end of year$6,648,458$ 6,648,458$ 2,394,809$ 4,645,090$ 7,039,899$ 391,441 Adjustments - Budgetary Basis is the amount transferred out to the newly created Airport enterprise fund. These expenditures are the equity balance of Airport gas well revenues through September 30, 2010. 75 CITY OF DENTON, TEXASExhibit XXI SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES - BUDGET TO ACTUAL SPECIAL REVENUE FUNDS: CITIZENS' PARK TRUST FOR YEAR ENDED SEPTEMBER 30, 2011 Variance with Adjustments -Actual on aFinal Budget - Budgeted AmountsActualBudgetaryBudgetaryPositive OriginalFinalAmountsBasisBasis(Negative) REVENUES: Fees for service$ 97,650$ 604,459$ -$ 604,459$ 506,809 $ 97,650 Investment revenue50,00050,00028,613-28,613(21,387) Total revenues147,650147,650633,072-633,072485,422 EXPENDITURES: Capital outlay1,065,0001,065,000464,191-464,191600,809 Total expenditures1,065,0001,065,000464,191-464,191600,809 Net change in fund balance(917,350)(917,350)168,881-168,8811,086,231 Fund balance at beginning of year4,543,5414,543,5414,543,541-4,543,541- Fund balance at end of year$3,626,191$ 3,626,191$ 4,712,422$ -$ 4,712,422$ 1,086,231 76 INTERNAL SERVICE FUNDS Internal Service Funds account for the financing of goods or services provided by one department for another. The City has five Internal Service Funds as follows: Materials Management Fund to account for the financing of goods and services provided by Materials Management to other City departments. Such costs provided by Materials Management are billed to the other departments at standard labor charges and cost of parts plus 13 percent. Actual costs include depreciation on machinery and equipment used to provide the service. Fleet Services Fund to account for the financing of goods and services provided by the Municipal Garage and Machine Shop to other City departments. Municipal Garage and Machine Shop billings include labor charges and cost of parts plus 25 percent. Actual costs include depreciation on the building, improvements, machinery, and equipment used to provide the service. Health Insurance Fund to account for the accumulation of resources for the self-insurance activities of the City for employee medical insurance as well as other employee insurance benefits including long-term disability, short-term disability, dental insurance, and vision insurance. Risk Retention Fund to account for the accumulation of resources for the payment of employee insurance claims and insurance policies. Technology Services Fund to account for the accumulation of resources to provide computer programming services, systems analysis, imaging, print shop, and office services to City departments. 77 CITY OF DENTON, TEXAS COMBINING STATEMENT OF NET ASSETS INTERNAL SERVICE FUNDS SEPTEMBER 30, 2011 Materials Fleet HealthRisk ManagementServicesInsuranceRetention FundFundFundFund ASSETS: Current assets: Cash, cash equivalents and investments, at fair value$ 21,067$ 823,813$ 5,515,516$ 6,563,460 Receivables, net of allowances: Accrued interest883,45223,11127,502 Other116220,456-- Merchandise inventory4,105,495200,892-- Prepaid items12,5759,469135,440- Deferred debt issuance costs3682,475-- Total current assets4,139,7091,260,5575,674,0676,590,962 Noncurrent assets: Restricted assets: Cash, cash equivalents and investments, at fair value---- Accrued interest---- Escrow deposit--241,000- Deferred debt issuance costs2,2268,851-- Capital assets, net of accumulated depreciation786,8073,787,327-1,081 Total noncurrent assets789,0333,796,178241,0001,081 Total assets4,928,7425,056,7355,915,0676,592,043 LIABILITIES: Current liabilities: Accounts payable240,502731,8837,395110,073 Claims payable--1,129,950556,250 Compensated absences payable43,60076,784-17,139 Accrued interest2,5458,962-- Interfund payables2,666,260--- Leases payable---- Payable from restricted assets: Retainage payable-32,238-- Certificate and general obligation bonds28,795194,346-- Total current liabilities2,981,7021,044,2131,137,345683,462 Noncurrent liabilities: Leases payable---- Payable from restricted assets: General obligation bonds payable-1,363,036-- Certificates of obligation406,937133,422-- -(13,368)-- Deferred amount on refunding Compensated absences payable2,10016,950-7,735 Claims payable---1,961,110 64,602115,178-34,207 Municipal pension obligation 32,02051,641-13,413 Other post employment benefits Total noncurrent liabilities:505,6591,666,859-2,016,465 Total liabilities3,487,3612,711,0721,137,3452,699,927 NET ASSETS: Invested in capital assets, net of related debt351,0752,109,891-1,081 Unrestricted1,090,306235,7724,777,7223,891,035 Total net assets$ 1,441,381$ 2,345,663$ 4,777,722$ 3,892,116 78 Exhibit XXII Total Technology Internal ServicesService FundFunds $ 1,706,557$ 14,630,413 7,15161,304 106220,678 -4,306,387 3,693161,177 1,0903,933 1,718,59719,383,892 2,7692,769 1212 696,186937,186 95612,033 3,448,8768,024,091 4,148,7998,976,091 5,867,39628,359,983 109,0731,198,926 -1,686,200 122,756260,279 4,26315,770 -2,666,260 543,957543,957 -32,238 300,502523,643 1,080,5516,927,273 949,907949,907 116,5841,479,620 134,879675,238 92(13,276) 14,27241,057 -1,961,110 183,065397,052 62,361159,435 1,461,1605,650,143 2,541,71112,577,416 1,405,7243,867,771 1,919,96111,914,796 $ 3,325,685$ 15,782,567 79 CITY OF DENTON, TEXAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN FUND NET ASSETS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Materials Fleet HealthRisk ManagementServicesInsuranceRetention FundFundFundFund OPERATING REVENUES: Charges for goods and services$ 8,139,786$8,837,422$16,264,072$2,757,066 Miscellaneous48,2477,4981,466,61339,905 Total operating revenues8,188,0338,844,92017,730,6852,796,971 OPERATING EXPENSES: Operating expenses before depreciation8,225,3018,354,40717,206,8422,088,834 Depreciation29,672120,023-1,174 Total operating expenses8,254,9738,474,43017,206,8422,090,008 Operating income (loss)(66,940)370,490523,843706,963 NONOPERATING REVENUES (EXPENSES): Investment revenue2632,59726,32036,928 Interest expense and fiscal charges(20,757)(75,203)-- Loss on disposal of capital assets---- Other non-operating expenses---- Total non-operating revenues (expenses)(20,494)(72,606)26,32036,928 Income (loss) before contributions and transfers(87,434)297,884550,163743,891 Capital contributions---- Transfers in-4,969-- Transfers out-(264,020)-- Change in net assets(87,434)38,833550,163743,891 Total net assets at beginning of year1,528,8152,306,8304,227,5593,148,225 Total net assets at end of year$ 1,441,381$2,345,663$ 4,777,722$3,892,116 80 Exhibit XXIII Total Technology Internal ServicesService FundFunds $ 6,416,861$42,415,207 4,7201,566,983 6,421,58143,982,190 5,145,28541,020,669 1,363,0761,513,945 6,508,36142,534,614 (86,780)1,447,576 8,84774,955 (85,289)(181,249) (4,583)(4,583) 5,0075,007 (76,018)(105,870) (162,798)1,341,706 439,805439,805 17,35022,319 (262,595)(526,615) 31,7621,277,215 3,293,92314,505,352 $ 3,325,685$15,782,567 81 CITY OF DENTON, TEXAS COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 MaterialsFleetHealth ManagementServicesInsurance FundFundFund CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from customers$ 8,187,917$ 8,728,365$ 17,730,686 Cash paid to employees for services(843,994)(1,590,487)- Cash paid to suppliers(7,191,138)(6,527,684)(17,042,273) Net cash provided by operations152,785610,194688,413 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Transfers out-(264,020)- Transfers in-4,969- Net cash used by noncapital financing activities-(259,051)- CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Principal payments on capital debt(27,343)(194,546)- Interest and fiscal charges(20,498)(73,554)- Principal payments under capital lease obligation--- Acquisition and construction of capital assets(106,374)(398,884)- Net cash used by capital financing activities (154,215)(666,984)- CASH FLOWS FROM INVESTING ACTIVITIES: Proceeds from sale and maturities of investment securities1,372783,0652,845,478 Purchase of investment securities-(484,304)(3,420,579) Interest received on investments2653,76022,726 Net cash provided (used) by investing activities 1,637302,521(552,375) Net increase (decrease) in cash and cash equivalents207(13,320)136,038 Cash and cash equivalents at beginning of year1,78891,346386,357 Cash and cash equivalents at end of year1,99578,026522,395 Investments, at fair value 19,072745,7874,993,121 Cash, cash equivalents and investments, at fair value$ 21,067$ 823,813$ 5,515,516 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Operating income (loss)$ (66,940)$ 370,490$ 523,843 Adjustments: Depreciation expense29,672120,023- Decrease (Increase) in receivables(116)(107,085)- Decrease (Increase) in inventories4,006,765(131,955)- Decrease in prepaid items(12,575)(9,469)(135,440) Increase (Decrease) in accounts payable147,092317,514300,010 Increase (Decrease) in compensated absences8,4481,377- Decrease in interfund payables(3,985,994)-- Increase in municipal pension obligation20,33238,199- Increase in other post employment benefits6,10111,100 Total adjustments219,725239,704164,570 Net cash provided by operating activities$ 152,785$ 610,194$ 688,413 NONCASH CAPITAL AND RELATED FINANCING ACTIVITIES: Decrease in fair value of investments(10)(701)(1,416) Capital asset contributions--- Increase in capital lease obligations--- 82 Exhibit XXIV Total RiskTechnologyInternal RetentionServicesService FundFundFunds $ 2,796,971$6,421,952$43,865,891 (449,498)(2,411,283)(5,295,262) (1,636,042)(2,818,580)(35,215,717) 711,4311,192,0893,354,912 -(262,595)(526,615) -17,35022,319 -(245,245)(504,296) -(385,459)(607,348) -(83,744)(177,796) -(442,803)(442,803) -(442,778)(948,036) -(1,354,784)(2,175,983) 4,064,4051,386,5609,080,880 (4,655,198)(996,410)(9,556,491) 33,06510,24470,060 (557,728)400,394(405,551) 153,703(7,546)269,082 467,947169,4421,116,880 621,650161,8961,385,962 5,941,8101,547,43013,247,220 $ 6,563,460$1,709,326$14,633,182 $ 706,963$ (86,780)$ 1,447,576 1,1741,363,0761,513,945 -371(106,830) --3,874,810 -(3,693)(161,177) (13,822)(146,659)604,135 2,658(10,508)1,975 --(3,985,994) 11,43361,758131,722 3,02514,52434,750 4,4681,278,8691,907,336 $ 711,431$1,192,089$ 3,354,912 (1,803)(1,163)(5,093) -439,805439,805 -696,186696,186 83 CITY OF DENTON, TEXASExhibit XXV COMBINING STATEMENT OF ASSETS AND LIABILITIES AGENCY FUNDS AS OF SEPTEMBER 30, 2011 Agency Funds OtherTotal PayrollDevelopers'AgencyAgency FundEscrow FundFundsFunds ASSETS: Cash, cash equivalents and investments, at fair value$ 1,141,276$ 225,448$ 230,336$ 1,597,060 Accrued interest-945-945 Other assets--57,51657,516 Total assets$ 1,141,276$ 226,393$ 287,852$ 1,655,521 LIABILITIES: Accounts payable$ 1,141,276$ 226,393$ 287,852$ 1,655,521 Total liabilities$ 1,141,276$ 226,393$ 287,852$ 1,655,521 84 CITY OF DENTON, TEXASExhibit XXVI COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES AGENCY FUNDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 BalanceBalance October 1, 2010AdditionsDeductionsSeptember 30, 2011 PAYROLL FUND ASSETS Cash and deposits$ 935,415$ 39,097,264$ 38,891,403$ 1,141,276 Total assets$ 935,415$ 39,097,264$ 38,891,403$ 1,141,276 LIABILITIES Accounts payable$ 935,415$ 39,097,264$ 38,891,403$ 1,141,276 Total liabilities$ 935,415$ 39,097,264$ 38,891,403$ 1,141,276 DEVELOPERS' ESCROW FUND ASSETS Cash and deposits$ 224,138$ 1,310$ -$ 225,448 Accrued interest9111,3441,310945 Total assets$ 225,049$ 2,654$ 1,310$ 226,393 LIABILITIES Accounts payable$ 225,049$ 2,654$ 1,310$ 226,393 Total liabilities$ 225,049$ 2,654$ 1,310$ 226,393 OTHER AGENCY FUNDS ASSETS Cash, cash equivalents and investments, at fair value$ 172,347$ 1,673,190$ 1,615,201$ 230,336 Other assets44,040372,812359,33657,516 Total assets$ 216,387$ 2,046,002$ 1,974,537$ 287,852 LIABILITIES Accounts payable$ 216,387$ 2,046,002$ 1,974,537$ 287,852 Total liabilities$ 216,387$ 2,046,002$ 1,974,537$ 287,852 TOTAL AGENCY FUNDS ASSETS Cash, cash equivalents and investments, at fair value$ 1,331,900$ 40,771,764$ 40,506,604$ 1,597,060 Accrued interest9111,3441,310945 Other assets44,040372,812359,33657,516 Total assets$ 1,376,851$ 41,145,920$ 40,867,250$ 1,655,521 LIABILITIES Accounts payable$ 4,262,738$ 41,145,920$ 40,867,250$ 1,655,521 Total liabilities$ 4,262,738$ 41,145,920$ 40,867,250$ 1,655,521 85 86 CITY OF DENTON, TEXASExhibit XXVII CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS COMPARATIVE SCHEDULES BY SOURCE* SEPTEMBER 30, 2010 AND 2011 20112010 Governmental funds capital assets: Land$ 12,149,929$ 12,124,142 Construction in progress44,784,26139,839,064 Buildings53,168,30855,664,154 Plant, machinery and equipment44,900,13544,987,697 Infrastructure192,774,337193,226,264 Total governmental funds capital assets$ 347,776,970$ 345,841,321 Investments in governmental funds capital assets by source: General fund$ 169,877,915$ 177,165,321 Special revenue funds5,804,9875,281,322 Capital projects funds172,094,068163,394,678 Total governmental funds capital assets$ 347,776,970$ 345,841,321 *This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 87 CITY OF DENTON, TEXASExhibit XXVIII CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE BY FUNCTION AND ACTIVITY* SEPTEMBER 30, 2011 Plant, MachineryConstruction andin Function and ActivityLandBuildingsEquipmentInfrastructureProgressTotal General government: Finance$ -$ -$ 23,100$ -$ 38,263$ 61,363 Legal--327,493--327,493 Municipal court/judge/clerks--292,252-190,356482,608 Human resources--6,643--6,643 City manager/economic development-808,462375,445-2,780,1413,964,048 Facilities management286,07415,529,8554,601,443570,0212,074,44823,061,841 Library-9,386,3866,402,02614,7152,617,70018,420,827 Building inspections--237,710--237,710 Planning/community development-494,500125,80024,057538,4961,182,853 Engineering--359,827769,237-1,129,064 Code Enforcement--190,629--190,629 Total general government286,07426,219,20312,942,3681,378,0308,239,40449,065,079 Public works: Traffic operations-14,6001,253,57416,170,2601,945,11319,383,547 Streets792,6655,0003,634,603163,503,94827,664,987195,601,203 Total public works792,66519,6004,888,177179,674,20829,610,100214,984,750 Parks and recreation9,046,48614,420,7277,103,59011,722,0993,090,45845,383,360 Public safety: Fire administration--119,467--119,467 Fire operations2,024,70412,109,98310,162,426-1,987,67426,284,787 Fire prevention--633,442--633,442 Emergency medical services--381,368--381,368 Police-11,9938,362,110-765,5469,139,649 Animal services-386,802307,187-1,091,0791,785,068 Total public safety2,024,70412,508,77819,966,000-3,844,29938,343,781 Total governmental funds capital assets$ 12,149,929$ 53,168,308$ 44,900,135$ 192,774,337$ 44,784,261$ 347,776,970 *This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 88 CITY OF DENTON, TEXASExhibit XXIX CAPITAL ASSETS USED IN THE OPERATION OF GOVERNMENTAL FUNDS SCHEDULE OF CHANGES BY FUNCTION AND ACTIVITY* FOR THE YEAR ENDED SEPTEMBER 30, 2011 GovernmentalGovernmental Funds CapitalFunds Capital AssetsAssets Function and ActivityOctober 1, 2010AdditionsDeductionsSeptember 30, 2011 General government: Finance$ 23,100$ -$ -$ 23,100 Legal300,93726,556-327,493 Municipal court/judge/clerks292,252--292,252 Human resources27,703-(21,060)6,643 City manager/economic development1,133,99049,917-1,183,907 Facilities management20,487,278644,761(144,646)20,987,393 Library15,900,754493,133(590,760)15,803,127 Building inspections237,710--237,710 Planning/community development644,357--644,357 Engineering1,129,064--1,129,064 Code Enforcement190,629--190,629 Airport9,373,838-(9,373,838)- Total general government49,741,6121,214,367(10,130,304)40,825,675 Public works: Traffic operations17,590,8289,348(161,742)17,438,434 Streets164,108,3293,857,235(29,348)167,936,216 Total public works181,699,1573,866,583(191,090)185,374,650 Parks and recreation39,966,3002,388,503(61,901)42,292,902 Public safety: Fire administration145,011-(25,544)119,467 Fire operations24,565,94557,269(326,101)24,297,113 Fire prevention343,450289,992-633,442 Emergency medical services453,555-(72,187)381,368 Police8,393,238165,998(185,133)8,374,103 Animal services693,989--693,989 Total public safety34,595,188513,259(608,965)34,499,482 Construction in progress39,839,06411,867,669(6,922,472)44,784,261 Total governmental funds capital assets$ 345,841,321$19,850,381$ (17,914,732)$ 347,776,970 *This schedule presents only the capital asset balances related to governmental funds. Accordingly, the capital assets reported in internal service funds are excluded from the above amounts. Generally, the capital assets of internal service funds are included as governmental activities in the statement of net assets. 89 90 STATISTICAL SECTION for understanding what the information in the financial statements, note disclosures, and required supplementary inform Contents Financial Trends performance and well-being have changed over time. (Tables 1 4) Revenue Capacity source, the property tax. These tables do not include the Electric fund information due to confidentiality of information necessary for competitive rates. (Tables 5 8) Debt Capacity 12) Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the 14) Operating Information These schedules contain service and infrastructure data to help the reader understand how the information (Tables 15 17) Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. The city implemented GASB Statement 34 in 2002; schedules presenting government-wide information include information beginning in that year. 91 CITY OF DENTON, TEXAS NET ASSETS BY COMPONENT LAST TEN FISCAL YEARS (accrual basis of accounting) 20022003200420052006 Governmental activities Invested in capital assets, net of related debt$ 88,162,242$ 100,876,627$ 107,754,576$ 107,112,321$ 107,410,289 Restricted1,000,906428,426296,731451,046439,658 Unrestricted14,091,68113,185,86514,615,29418,519,18530,352,691 Total governmental activities net assets103,254,829114,490,918122,666,601126,082,552138,202,638 Business-type activities Invested in capital assets, net of related debt131,316,531163,784,452172,589,102193,657,258213,074,701 Restricted28,456,44730,558,41735,812,11730,863,58030,974,925 Unrestricted94,356,56978,074,62978,543,92976,726,02590,843,185 Total business-type activities net assets254,129,547272,417,498286,945,148301,246,863334,892,811 Primary government Invested in capital assets, net of related debt219,478,773264,661,079280,343,678300,769,579320,484,990 Restricted29,457,35330,986,84336,108,84831,314,62631,414,583 Unrestricted108,448,25091,260,49493,159,22395,245,210121,195,876 Total primary government net assets$ 357,384,376$ 386,908,416$ 409,611,749$ 427,329,415$ 473,095,449 Source: Comprehensive Annual Financial Reports 92 Table 1 20072008200920102011 $ 99,858,383$ 102,040,021$ 102,110,134$ 104,636,239$ 103,073,465 886,1411,454,5791,947,5532,894,6762,839,556 30,738,02637,610,96638,252,07846,480,56934,590,673 131,482,550141,105,566142,309,765154,011,484140,503,694 242,015,614263,325,859282,463,031277,356,195296,006,601 31,015,18833,087,60933,380,59530,598,92330,454,314 107,837,825107,545,434109,826,810131,497,936158,120,736 380,868,627403,958,902425,670,436439,453,054484,581,651 341,873,997365,365,880384,573,165381,992,434399,080,066 31,901,32934,542,18835,328,14833,493,59933,293,870 138,575,851145,156,400148,078,888177,978,505192,711,409 $ 512,351,177$ 545,064,468$ 567,980,201$ 593,464,538$ 625,085,345 93 CITY OF DENTON, TEXAS CHANGES IN NET ASSETS LAST TEN FISCAL YEARS (accrual basis of accounting) 20022003200420052006 EXPENSES Governmental activities: General government$ 16,240,418$ 22,933,107$ 26,411,608$ 26,675,799$ 22,165,661 Public safety27,322,15328,837,15830,508,76533,642,44536,626,635 Public works13,691,51410,274,82211,053,13111,986,88112,485,281 Parks and recreation7,362,9398,419,5089,418,5809,912,99610,497,241 Interest expense4,252,9704,186,0514,494,8514,175,4664,333,428 Total governmental activities expenses68,869,99474,650,64681,886,93586,393,58786,108,246 Business-type activities: Electric system99,831,597113,674,296119,650,157132,829,976145,368,132 Water system18,095,10720,424,80521,278,79122,380,58926,708,095 Wastewater system15,555,68716,560,30818,528,34818,808,37419,027,926 Solid waste11,658,56512,366,91011,301,94013,168,88013,454,556 Airport----- Building inspections1,731,031---- Total business-type activities expenses146,871,987163,026,319170,759,236187,187,819204,558,709 Total primary government expenses215,741,981237,676,965252,646,171273,581,406290,666,955 PROGRAM REVENUES Governmental activities: Charges for services: General government1,428,0983,654,3873,417,6573,333,8663,904,941 Public safety4,082,8594,371,4073,382,7914,965,0566,023,100 Public works1,085,2001,803,0251,280,4231,086,387802,711 Parks and recreation1,597,496347,1102,143,7562,613,5673,234,347 Operating grants and contributions2,480,3093,221,2643,264,7772,995,9783,712,817 Capital grants and contributions6,379,22814,023,05614,046,0717,426,1945,536,786 Total governmental activities program revenues17,053,19027,420,24927,535,47522,421,04823,214,702 Business-type activities: Charges for services: Electric system91,315,761105,509,934111,742,276129,343,037149,419,800 Water system22,352,63624,552,65824,331,55524,890,28933,436,651 Wastewater system15,398,21817,144,31219,210,52920,423,42423,670,458 Solid waste10,383,29611,728,02413,172,55613,600,51214,624,132 Airport----- Building inspections1,415,998---- Capital grants and contributions8,504,90019,022,0458,415,4709,808,84210,022,654 Total business-type activities program revenues149,370,809177,956,973176,872,386198,066,104231,173,695 Total primary government program revenues166,423,999205,377,222204,407,861220,487,152254,388,397 NET (EXPENSE)/REVENUE Governmental activities(51,816,804)(47,230,397)(54,351,460)(63,972,539)(62,893,544) Business-type activities2,498,82214,930,6546,113,15010,878,28526,614,986 Total primary government program net expense$ (49,317,982)$ (32,299,743)$ (48,238,310)$ (53,094,254)$ (36,278,558) 94 Table 2 20072008200920102011 $ 22,145,804$ 26,408,949$ 27,482,131$29,569,535$28,198,604 42,161,67443,426,52645,368,78347,998,90649,154,371 14,008,86715,448,47315,816,06515,767,92616,089,302 11,564,24712,927,02012,755,03712,854,33612,421,893 4,658,1285,372,8685,733,2685,121,3295,046,724 94,538,720103,583,836107,155,284111,312,032110,910,894 123,926,967138,791,009124,901,262114,903,831117,769,599 25,839,61426,226,06828,636,19027,219,94428,293,109 18,785,35319,413,24719,909,22920,560,60020,455,424 15,451,02517,065,29518,036,33118,028,83220,008,746 ----1,326,397 ----- 184,002,959201,495,619191,483,012180,713,207187,853,275 278,541,679305,079,455298,638,296292,025,239298,764,169 3,694,8693,310,5924,792,8563,551,7334,108,687 6,160,6116,461,0376,554,6196,431,0077,075,328 800,378853,091586,3771,425,683525,024 3,220,8373,292,5282,990,9213,372,5793,964,517 2,991,2243,306,3252,281,1363,407,0854,270,697 5,399,2207,308,3983,641,29615,206,4247,497,908 22,267,13924,531,97120,847,20533,394,51127,442,161 128,973,477138,467,222128,511,236119,156,314131,435,554 27,830,76730,843,79730,067,77428,407,95436,790,720 22,634,45423,184,36922,342,17421,917,65123,338,841 15,967,05116,660,37518,386,61618,432,24520,979,967 ----3,203,426 ----- 8,440,6345,742,1398,099,7225,153,5685,053,024 203,846,383214,897,902207,407,522193,067,732220,801,532 226,113,522239,429,873228,254,727226,462,243248,243,693 (72,271,581)(79,051,865)(86,308,079)(77,917,521)(83,468,733) 19,843,42413,402,28315,924,51012,354,52532,948,257 $ (52,428,157)$ (65,649,582)$ (70,383,569)$ (65,562,996)$ (50,520,476) (continued) 95 CITY OF DENTON, TEXAS CHANGES IN NET ASSETS LAST TEN FISCAL YEARS (accrual basis of accounting) 20022003200420052006 GENERAL REVENUES AND OTHER CHANGES IN NET ASSETS Governmental activities: Taxes: Property tax$ 19,075,268$ 20,964,738$ 23,149,916$ 26,678,783$ 30,000,847 1 15,875,93516,047,29717,871,38018,998,05720,343,413 Sales tax Franchise tax11,930,61212,571,98913,215,88214,250,48416,499,994 Hotel occupancy tax938,225855,879911,505988,5731,132,500 Beverage tax174,264192,243208,855215,872257,950 Bingo tax20,67328,14621,12725,46624,260 Investment income3,990,6791,451,1061,332,5681,148,5171,967,473 Miscellaneous3,246,8515,354,7834,213,1634,218,2453,892,087 Transfers1,073,8571,000,3051,410,947864,493895,106 Total governmental activities56,326,36458,466,48662,335,34367,388,49075,013,630 Business-type activities: Investment income11,819,5124,143,0392,698,5513,252,3427,298,870 Miscellaneous379,357214,563914,0871,035,581627,198 Transfers(1,073,857)(1,000,305)(1,410,947)(864,493)(895,106) Total business-type activities11,125,0123,357,2972,201,6913,423,4307,030,962 Total primary government67,451,37661,823,78364,537,03470,811,92082,044,592 CHANGE IN NET ASSETS Governmental activities4,509,56011,236,0897,983,8833,415,95112,120,086 Business-type activities13,623,83418,287,9518,314,84114,301,71533,645,948 Total primary government$ 18,133,394$ 29,524,040$ 16,298,724$ 17,717,666$ 45,766,034 Source: Comprehensive Annual Financial Reports 1 Sales tax figures in fiscal years 2010 and prior present amounts net of economic incentive payments. 96 Table 2 20072008200920102011 $ 34,756,356$ 41,499,791$ 43,187,433$43,144,645$44,144,844 20,653,93221,440,83920,466,77220,484,95422,871,282 15,197,94316,197,04215,669,98117,457,99419,324,244 1,268,6271,369,6671,239,2611,302,6171,513,468 294,623319,541338,700347,940359,671 23,70823,65322,91522,61121,963 3,632,7443,287,2822,413,339684,709459,615 3,199,1314,214,0283,327,7585,690,9692,370,682 (13,475,571)323,038846,119482,801(10,430,082) 65,551,49388,674,88187,512,27889,619,24080,635,687 12,108,6327,817,6716,075,4531,653,5151,472,078 548,189195,055557,690257,379278,180 13,475,571(323,038)(846,119)(482,801)10,430,082 26,132,3927,689,6885,787,0241,428,09312,180,340 91,683,88596,364,56993,299,30291,047,33392,816,027 (6,720,088)9,623,0161,204,19911,701,719(2,833,046) 45,975,81621,091,97121,711,53413,782,61845,128,597 $ 39,255,728$ 30,714,987$ 22,915,733$ 25,484,337$ 42,295,551 97 CITY OF DENTON, TEXAS FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2002200320042005 General fund Reserved for encumbrances$ 431,528$ 137,051$ 112,292$ 210,818 Unreserved, designated---- Committed to streets---- Assigned to use of reserves---- Unreserved, undesignated, unassigned8,033,0928,442,9429,504,9889,718,368 Total general fund8,464,6208,579,9939,617,2809,929,186 All other governmental funds Reserved for: Debt service934,406428,426296,731451,046 Capital projects37,584,61524,389,22626,548,13027,671,252 Encumbrances2,89914,295-- Unreserved, undesignated reported in: Special revenue funds2,390,0651,678,6203,607,2003,614,489 Restricted for: Debt Service---- Parks and recreation---- Streets and drainage projects---- Other capital projects---- Other grants and purposes---- Committed to: Parks and recreation---- Other purposes---- Assigned to: Streets and drainage projects---- Other capital projects---- Other purposes---- Unassigned ---- Total all other governmental funds$ 40,911,985$ 26,510,567$ 30,452,061$ 31,736,787 Source: Comprehensive Annual Financial Reports 1 The City adopted GASB Statement No. 54 which changed the classification of governmental fund balances to nonspendable, restricted, committed, assigned, and unassigned. 98 Table 3 1 2011 20062007200820092010 $ 242,088$ -$ 123,696$ -$ -$ - 1,550,0004,360,649---- -----921,779 -----668,116 13,264,02718,199,16125,253,79722,794,95521,526,77922,834,108 15,056,11522,559,81025,377,49322,794,95521,526,77924,424,003 439,658886,1411,954,9552,414,2883,354,535- 32,840,64048,971,61057,887,53135,339,60644,970,571- --5,515--- 5,534,7018,896,1119,534,62716,435,44913,838,425- -----3,279,080 -----9,561,244 -----21,857,670 -----5,907,877 -----1,223,822 -----1,427,717 -----1,867,639 -----724,241 -----1,332,105 -----77,341 -----(758,734) $ 38,814,999$ 58,753,862$ 69,382,628$ 54,189,343$ 62,163,531$46,500,002 99 CITY OF DENTON, TEXAS CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2002200320042005 REVENUES: Taxes: Property tax$ 18,894,068$ 20,964,737$ 22,986,590$ 26,640,930 1 15,875,93316,047,29717,684,89918,998,058 Sales tax Hotel occupancy tax938,225855,879911,505988,573 Beverage tax174,264192,243208,855215,872 Bingo tax20,67528,14721,12725,465 Licenses and permits91,0491,151,1691,700,0441,235,337 Franchise fees11,930,61212,571,98913,215,88214,250,484 Fines and forfeitures3,522,8953,422,9523,338,9793,959,476 Fees for services6,818,3638,556,00210,022,0018,255,342 Investment revenue 2,963,7551,451,1061,332,5681,148,517 Intergovernmental3,573,3995,757,5436,655,2405,443,517 Miscellaneous656,1861,304,3675,012,6071,931,762 Total revenues65,459,42472,303,43183,090,29783,093,333 EXPENDITURES: General government14,748,84221,025,98624,894,43822,272,681 Public safety26,155,87628,406,26129,689,08333,057,120 Public works7,949,4724,627,2924,752,4095,247,546 Parks and recreation6,962,3738,094,7808,404,0749,176,686 Capital outlay15,005,65922,845,20413,463,61911,760,356 Debt service: Principal retirement5,019,1645,027,2225,502,8975,642,487 Advance refunding escrow---216,148 Bond issuance costs---293,668 Interest and other charges4,215,6734,487,7784,544,5024,018,765 Total expenditures80,057,05994,514,52391,251,02291,685,457 Excess (deficiency) of revenues over (under) expenditures(14,597,635)(22,211,092)(8,160,725)(8,592,124) OTHER FINANCING SOURCES (USES): Refunding bonds issued-4,130,000-7,316,688 Payment to refunded bond escrow agent-(4,130,000)-(7,491,938) Issuance of long-term debt20,120,0006,913,48311,805,0009,070,000 Premium on debt issuance---404,361 Proceeds of capital lease---- Sale of capital assets---- Transfers in1,454,5412,192,6803,496,7653,341,047 Transfers (out)(1,906,600)(1,181,116)(2,162,259)(2,451,402) Total other financing sources (uses)19,667,9417,925,04713,139,50610,188,756 NET CHANGE IN FUND BALANCES$ 5,070,306$ (14,286,045)$ 4,978,781$ 1,596,632 Debt service as a percentage of noncapital expenditures14.2%13.3%12.9%12.7% Source: Comprehensive Annual Financial Reports 1 Sales tax figures in fiscal years 2010 and prior present amounts net of economic incentive payments. 100 Table 4 200620072008200920102011 $ 30,019,657$ 34,662,336$ 41,436,012$ 42,980,209$ 43,326,427$44,147,706 20,343,41320,653,93221,440,83920,466,77220,484,95422,871,282 1,132,5001,268,6271,369,6671,239,2611,302,6171,513,468 257,950294,623319,541338,700347,940359,671 24,26023,70823,65322,91522,61121,963 1,383,1691,097,3231,080,5801,265,7331,198,5521,460,548 16,499,99415,197,94316,197,04215,669,98117,457,99419,324,244 4,639,9225,065,0495,262,1894,972,9054,828,1594,929,110 6,779,9047,624,2657,951,6657,595,44012,244,2588,395,583 1,967,4733,632,7443,287,2822,415,817684,709459,615 5,254,0583,852,5138,094,3074,049,43916,639,03810,896,063 3,424,7863,006,7513,778,6733,183,8911,002,1331,911,634 91,727,08696,379,814110,241,450104,201,063119,539,392 116,290,887 20,539,00620,158,73924,110,32925,223,04126,909,48525,784,296 35,813,32937,755,27240,855,11242,540,42344,398,44246,561,747 5,206,2245,624,2876,596,1916,753,3146,517,7177,483,926 9,548,41610,234,36111,557,16811,444,57711,072,06110,913,450 9,056,10217,237,92223,275,70321,863,64714,164,66212,937,053 5,914,8196,808,4398,479,1369,479,2439,277,8049,670,892 ---148,575-- 70,745314,286530,137105,39278,91929,156 4,210,6284,389,3075,261,3465,570,7705,095,2455,070,734 90,359,269102,522,613120,665,122123,128,982117,514,335 118,451,254 1,367,817(6,142,799)(10,423,672)(18,927,919)2,025,057(2,160,367) -24,780,00024,595,0006,120,0003,460,000- --(25,117,336)(6,265,255)(3,774,764)- 9,550,000-22,230,000-6,905,0005,680,000 49,644528,630937,755246,012498,68232,628 -1,108,13169,897--- --582,08744,865160,495303,307 4,095,01812,323,1322,406,67810,286,4965,815,7691,968,253 (2,857,338)(5,154,536)(1,833,960)(9,280,022)(8,384,227)(7,915,382) 10,837,32433,585,35723,870,1211,152,0964,680,95568,806 $ 12,205,141$ 27,442,558$ 13,446,449$ (17,775,823)$ 6,706,012$ (2,091,561) 12.5%13.5%14.7%15.1%14.0%14.0% 101 CITY OF DENTON, TEXASTable 5 ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Estimated Market ValueLess:Total TaxableTotal Direct FiscalRealPersonalTax-ExemptAssessedTax YearPropertyPropertyPropertyValueRate 2002$ 3,343,400,379$ 618,020,979$ 594,129,333$ 3,367,292,0250.54815 20033,761,322,990654,159,101712,069,5763,703,412,5150.54815 20044,129,344,174659,848,833746,990,1364,042,202,8710.54815 20054,468,428,305695,572,385789,056,8594,374,943,8310.59815 20064,876,565,660733,405,037820,593,8864,789,376,8110.60815 20075,475,770,871952,273,984986,815,9465,441,228,9090.62652 20086,159,567,238969,219,5271,039,286,9906,089,499,7750.66652 20096,443,103,507938,547,0471,090,291,4426,291,359,1120.66652 20106,619,118,472922,539,8011,213,749,2516,327,909,0220.66652 20116,744,096,534879,202,4961,393,181,0726,230,117,9580.68975 Source: Denton Central Appraisal District 102 CITY OF DENTON, TEXASTable 6 PROPERTY TAX RATES (PER $100 OF ASSESSED VALUE) 1 DIRECT AND OVERLAPPING GOVERNMENTS LAST TEN FISCAL YEARS Overlapping Rates Denton City of DentonIndependentTotal Direct FiscalOperatingDebt ServiceTotalDentonSchool& Overlapping YearRateRateDirect RateCountyDistrictRates 20020.319480.228670.548150.251931.854002.65408 20030.338160.209990.548150.248971.864002.66112 20040.349280.198870.548150.247171.864002.65932 20050.399280.198870.598150.254801.864002.71695 20060.429280.178870.608150.246481.864002.71863 20070.447650.178870.626520.231921.764002.62244 20080.447650.218870.666520.235771.490002.39229 20090.447650.218870.666520.249801.490002.40632 20100.447650.218870.666520.249801.490002.40632 20110.470880.218870.689750.249801.490002.42955 Source: Denton County Tax Office 1 Overlapping rates are those of local and county governments that apply to property owners with the City of Denton. 103 104 CITY OF DENTON, TEXASTable 7 PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO 2011 2002 Percentage ofPercentage of TaxableTotal TaxableTaxableTotal Taxable AssessedAssessedAssessedAssessed 12 Name of TaxpayerValueName of TaxpayerValue ValueValue Columbia Medical Columbia Medical Center of Denton Center of Denton (Denton Regional (Denton Regional Hospital)Hospital) $79,500,7891.28%$43,286,5571.19% PACCAR Inc Verizon Southwest (Peterbilt)(Telephone Company) 46,352,5560.74%40,674,5551.12% Inland Western Crossing (Denton PACCAR Inc Crossing)(Peterbilt) 45,253,7990.73%34,893,2530.96% Anderson Cypress Denton Merchandisers Station LTD(Distribution Center) 36,113,2130.58%24,903,1490.69% Verizon Southwest (Telephone Tetra Pak (Packaging Company)Manufacturing) 33,371,0000.54%20,004,4560.55% GEL Timberlinks (The Timbers at Denton)Wal-Mart Supercenter 26,450,0000.42%19,750,1520.54% Devon Energy Production Co LLP (Oil and Gas United Copper (Copper Production)Wire Plant) 25,356,5500.41%18,348,5310.51% Range Texas Denton Regional Production LLC (Oil Medical Center/Health and Gas Production)Trust Inc. 22,097,3780.35%17,203,4400.47% Denton Education Housing Corp (University Courtyard Golden Triangle Mall Apartments)(Shopping Mall) 21,312,4520.34%17,581,3240.48% $335,807,737Total$236,645,417 Total 5.39%6.52% Source: Denton Central Appraisal District 1 Total taxable assessed value for tax year 2010 (fiscal year 2011) is $6,230,117,958 2 Total taxable assessed value for tax year 2001 (fiscal year 2002) is $3,630,711,000 105 CITY OF DENTON, TEXAS PROPERTY TAX LEVIES AND COLLECTIONS LAST SEVEN FISCAL YEARS Taxes LeviedAdjustmentsAdjustedCollected Within the Within theto Levy inTaxes LeviedFiscal Year of the LevyCollections FiscalFiscal YearSubsequentfor thePercentagein Subsequent Yearof the LevyYearsFiscal YearAmountof LevyYears 2005$ 26,457,399$ 171,604$ 26,629,003$ 26,016,23997.70%$ 544,046 200629,545,033128,93629,673,96929,162,97898.28%450,853 200734,273,862327,96334,601,82533,872,40497.89%654,259 200840,816,25639,77340,856,02940,354,52898.77%329,503 200943,086,12362,22843,148,35142,423,70798.32%481,313 201042,898,41431,72142,930,13542,448,36498.88%225,251 201143,890,121-43,890,12143,447,50898.99%- Source: Denton Central Appraisal District Only seven years of data included due to inability to obtain correct data from previous tax software. 106 Table 8 Total Collections to Date Percentage Amountof Levy $ 26,560,28599.74% 29,613,83199.80% 34,526,66399.78% 40,684,03199.58% 42,905,02099.44% 42,673,61599.40% 43,447,50898.99% 107 CITY OF DENTON, TEXAS RATIO OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS Governmental ActivitiesBusiness-Type Activities GeneralCertificatesGeneralCertificates FiscalObligationofOtherRevenueObligationofOther YearBondsObligationObligationsBondsBondsObligationObligations 2002$58,663,791$27,628,284$ 274,875,129$1,508,017$12,188,878$3,141,222 $ 635,442 200359,721,87030,148,929696,508304,366,3522,191,16811,765,6123,328,798 200455,893,37040,540,1621,244,678293,105,0002,046,63011,325,8383,141,222 200558,870,84941,791,5882,210,846281,120,0003,904,1519,233,4123,141,222 200658,742,90046,700,0003,559,742277,305,0003,582,10011,975,0003,141,222 200770,650,31751,355,1002,393,684281,750,0003,099,68313,889,9007,032,986 200880,814,59455,097,5501,819,298282,200,0004,865,40612,952,4505,713,041 200977,358,65048,611,1502,769,671266,705,0004,366,35011,243,8503,161,549 201077,314,65045,727,9501,771,952209,885,000 126,207,0501,824,177 39,600,350 201173,395,65043,036,4191,879,906187,525,000 150,553,5811,279,130 47,209,350 Source: Comprehensive Annual Financial Reports Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 1 See Table 13 for personal income and population data. 108 Table 9 TotalPercentage Primaryof PersonalPer 11 Government IncomeCapita $ 378,640,7630.01852%4,062.41 412,219,2370.01945%4,266.57 407,296,9000.01852%4,071.91 400,272,0680.01740%3,869.76 405,005,9640.01665%3,790.66 430,171,6700.01778%3,947.25 443,462,3390.01754%3,989.41 414,216,2200.01678%3,653.25 502,331,1290.01916%4,386.52 504,879,0360.01926%4,408.77 109 CITY OF DENTON, TEXASTable 10 RATIO OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS General Bonded Debt OutstandingPercentage of GeneralCertificatesLess: AmountsActual Taxable FiscalObligationofAvailable in DebtValue ofPer 12 YearBondsObligationService FundTotal PropertyCapita 2002$ 60,185,495$ 39,806,000$ 934,406$ 99,057,0892.94%1,025.27 200361,913,03841,978,000428,426103,462,6122.79%1,034.36 200457,940,00051,866,000296,731109,509,2692.71%1,058.72 200562,775,00051,025,000451,046113,348,9542.59%1,060.89 200662,325,00058,675,000439,658120,560,3422.52%1,106.26 200773,750,00065,245,000886,141138,108,8592.54%1,242.43 200880,814,59455,097,5501,954,955133,957,1892.20%1,181.46 200977,358,65048,611,1502,414,288123,555,5121.96%1,089.72 201077,314,65045,727,9503,354,535119,688,0651.89%1,045.16 201173,395,65043,036,4193,279,080113,152,9891.82%988.09 Source: Comprehensive Annual Financial Reports Note: Details regarding the City's outstanding debt can be found in the notes to the financial statements. 1 See Table 5 for property value data. 2 See Table 13 for population data. 110 CITY OF DENTON, TEXASTable 11 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF SEPTEMBER 30, 2011 Estimated EstimatedShare of DebtPercentageOverlapping 1 Governmental UnitOutstandingDebt Applicable Debt repaid with property taxes: Denton Independent School District$ 587,340,39863.25%$ 371,492,802 Denton County493,272,66711.97%59,044,738 Aubrey Independent School District52,685,8970.03%15,806 Krum Independent School District46,985,3792.69%1,263,907 Argyle Independent School District54,858,2207.90%4,333,799 Sanger Independent School District27,589,6961.07%295,210 Ponder Independent School District30,505,0002.15%655,858 Pilot Point Independent School District18,455,6820.07%12,919 Subtotal, overlapping debt437,115,039 City of Denton, direct debt100.00%116,432,069 Total direct and overlappping debt$ 553,547,108 Source: Compiled from data from the "Texas Municipal Report" prepared for the Municipal Advisory Council. Note: Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the city. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City of Denton. This process recognizes that, when considering the City of Denton's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt, of each overlapping government. 1 The percentage of overlapping debt applicable is estimated using taxable assessed property values. Applicable percentages were estimated by determining the portion of the overlapping government's taxable assessed value that is within the City of Denton's boundaries and dividing it by the overlapping government's total taxable assessed value. 111 CITY OF DENTON, TEXAS PLEDGED REVENUE COVERAGE LAST TEN FISCAL YEARS 1 Utility System Revenue Bonds Less:Add: Fair MarketLess:Franchise Fees ValueOperatingand Return AdjustmentExpenseson Investment FiscalOperatingInvestmentto InvestmentImpact FeeBeforePaid to 23 YearRevenueRevenueRevenueDepreciation RevenueGeneral Fund 2002$ 124,769,615$ 8,406,425$ 2,515,297$ 4,294,000$ 113,557,718$ 8,487,570 2003140,450,8194,320,188(2,599,123)5,150,000125,351,8379,207,505 2004148,512,6892,618,296(1,523,523)6,771,671134,885,3299,596,617 2005170,450,1203,114,254(2,027,258)4,206,630150,549,00710,922,442 2006200,970,5607,061,556721,0585,556,349166,537,86712,839,184 2007173,879,71311,390,1422,710,7425,558,985142,890,60311,283,647 2008185,874,4507,458,60569,2926,620,938158,245,88511,862,151 2009176,464,3575,817,918930,9364,456,827147,392,05611,325,647 2010166,295,6941,593,161(550,830)3,186,225135,112,90112,828,293 2011186,359,2261,340,539(62,127)5,205,889136,774,86614,304,393 Source: Comprehensive Annual Financial Reports 1 The Utility System includes the Electric, Water, and Wastewater funds. 2 For the coverage calculation, the fair market adjustment to the value of investments is excluded. 3 For the coverage calculation, franchise fees and return on investment payments to the General Fund are excluded from operating expenses. 4 Revenue bond covenants require a times coverage of 1.25 or greater. 5 Total times coverage provided to assess total bond debt related to the Utility System. 112 Table 12 Certificate of Obligation & Revenue Bond DebtGeneral Obligation Bond Debt NetTotal AvailableTimesTimesTimes 45 RevenuePrincipalInterestPrincipalInterestCoverage CoverageCoverage $ 29,884,595$ 7,345,000$ 12,130,0211.53N/A1.53 $ -$ - 36,375,7989,965,00014,324,1781.50--N/A1.50 34,137,46711,255,00015,979,9501.25--N/A1.25 40,171,69712,545,00014,429,9251.49--N/A1.49 59,168,72412,330,00013,798,8112.26--N/A2.26 56,511,14213,325,00012,265,4612.21--N/A2.21 53,500,96714,840,00013,088,9281.92--N/A1.92 49,741,75715,670,00013,073,9921.73--N/A1.73 49,341,30215,935,00012,267,7991.75--N/A1.75 70,497,30813,180,0009,208,6823.154,290,5007,315,1896.072.07 113 CITY OF DENTON, TEXASTable 13 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN FISCAL YEARS FiscalEstimatedPersonalPer CapitaMedianGrade SchoolUniversityUnemployment 122345 YearIncome PopulationIncomeAgeEnrollmentEnrollmentRate 200289,7961,674,066,82818,64326.813,60036,9857.4% 200393,2062,044,193,99221,93226.915,12838,6127.4% 200496,6162,118,982,11221,93227.116,93239,6185.8% 2005100,0262,199,071,61021,98527.118,39541,2043.3% 2006103,4362,300,106,33222,23727.119,70142,4083.5% 2007106,8432,431,746,68022,76027.120,88043,1333.4% 2008108,9802,419,464,98022,20127.922,22143,7704.4% 2009111,1602,527,667,24022,73928.822,76145,6586.5% 2010113,3832,467,894,37821,76628.924,04747,2366.3% 2011114,5172,621,408,64722,89128.924,90147,7206.7% Sources: 1 City of Denton Planning and Development Department estimate. Prior population figures have been adjusted to reflect the 2010 census data. 2 United States Census and Denton Chamber of Commerce 3 Denton Independent School District 4 University of North Texas' and Texas Woman's University's Denton campus enrollment 5 Texas Workforce Commission estimate 114 CITY OF DENTON, TEXASTable 14 PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO 20112002 PercentagePercentage of Total Cityof Total City Name of EmployerEmployeesEmploymentName of EmployerEmployeesEmployment University of North Texas7,76412.59%University of North Texas6,99514.75% Denton Independent School Denton Independent 2,6004.22%2,0004.22% DistrictSchool District Texas Woman's University1,5862.57%Boeing Electronics1,7003.59% Peterbilt Motors- 1,4502.35%Denton State School1,3802.91% Headquarters & Plant Denton County 1,4412.34%Peterbilt Motors1,3252.79% (in Denton) Denton County Denton State School1,4002.27%1,2252.58% (in Denton) City of Denton1,3342.16%City of Denton1,2002.53% Federal Emergency Texas Woman's 1,1001.78%9001.90% Management AgencyUniversity Denton Regional Medical Denton Regional Medical 8501.38%8501.79% CenterCenter Presbyterian Hospital of Federal Emergency 8001.30%7501.58% DentonManagement Agency Total 20,32532.96%Total18,32538.64% Source: Office of Economic Development & Denton Chamber of Commerce 115 CITY OF DENTON, TEXAS FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Full-time Equivalent Employees for Fiscal Year Function / Program20022003200420052006 General government203.75202.75202.75211.75192.50 Public safety Police178.14180.14183.73198.23206.23 Fire151.25152.25152.25160.25162.25 Animal services8.008.008.008.008.00 Public works83.0084.0084.0077.0037.00 Parks and recreation117.17136.37152.34149.62141.85 Electric system107.50108.50109.50110.50110.50 Water system112.71113.71120.00130.00161.75 Wastewater system76.0079.1280.1283.2283.12 Solid waste88.5088.5088.5082.5085.00 Airport Materials management13.0015.0015.0014.0012.50 Fleet services18.5020.0019.0016.0017.00 Technology services34.7533.7533.7529.7526.00 Risk Retention----- Total1,192.271,222.091,248.941,270.821,243.70 Source: City of Denton Budget Office 116 Table 15 20072008200920102011 192.38197.38208.38212.13213.50 212.23217.23217.23217.23222.23 162.25162.25163.25163.25163.25 8.008.008.008.008.00 38.0039.0039.0039.0039.00 142.07144.15144.15143.08142.58 112.00120.50125.00129.50129.50 164.50165.00160.50158.00158.50 82.8783.3784.8786.3788.37 87.0088.0093.5093.5098.50 5.00 12.5012.5013.5013.5013.50 18.0019.0021.0021.0021.00 24.5025.0025.0025.0026.00 5.005.005.005.005.00 1,261.301,286.381,308.381,314.561,333.93 117 CITY OF DENTON, TEXAS OPERATING INDICATORS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Fiscal Year Function / Program2002200320042005 Public Safety Police Calls for service68,86968,72769,31273,154 Traffic citations issued39,13838,18134,80436,757 Fire Fire calls for service2,8002,8942,9173,013 EMS calls for service7,2008,8087,0126,527 Inspections (Businesses)2,8023,1143,0003,727 Animal Services Animals sheltered5,0984,7695,1664,320 Animals adopted, transferred, or returned3,0151,4871,7772,091 Public Works 11 Street repaving (square yards)107,956211,11332.4119.44 Pot holes repaired8,3045,1624,0045,479 Cutouts base failures (square feet)165,33594,87679,010124,442 Crack seal maintenance (linear feet)NANANA40,338 Parks and Recreation Attendance Leisure Services893,7101,026,309981,883952,866 Water ParkNA102,637107,198141,495 Total Acres Maintained2,0842,1072,1902,208 Water System Number of customers23,09824,08925,30326,715 Annual finished water production (in thousand gallons)5,070,2005,636,7685,369,9575,901,750 Wastewater System Number of customers21,45522,56123,55024,894 Annual wastewater discharge (in thousand gallons)4,687,9604,689,4504,967,4405,039,240 Solid Waste Number of customers (residential and commercial)23,78324,25425,15426,062 MSW Landfilled (tons)107,901107,061122,113122,477 2 Recycling collections (tons)11,96515,32216,35316,195 Source: Various city departments Note: Fire calls for 1997-2002 were rounded to the nearest hundred by department. 1 lane miles of repaving and reconstruction 2 curbside residential recycling program introduced 118 Table 16 200620072008200920102011 73,34674,39780,11783,55783,74684,899 39,48331,13131,61036,59833,99029,162 3,4953,5393,7033,3913,1993,423 6,8406,5446,8627,0177,2557,458 3,8823,1443,5913,6224,7394,370 4,4435,4274,9674,3415,0424,936 2,1672,2972,1192,1933,2643,730 111111 16.4123.3841.2817.4310.278.33 3,9718,1536,84111,59320,98810,535 171,54344,56675,877126,691169,396146,925 79,31442,62440,28855,89453,712116,556 985,7781,048,5001,010,3511,031,5301,153,6321,093,705 162,039163,000169,000179,386193,361200,553 2,2622,2932,6332,6332,6332,570 27,88428,89829,67930,28830,88931,222 7,097,4035,671,1246,582,1516,210,4726,209,9667,331,902 26,07927,18528,01928,64729,10529,519 4,428,7005,174,1005,263,7804,733,8395,617,4904,852,097 27,80528,95430,68031,17332,04432,621 114,060128,644136,024160,378140,284149,930 17,76221,17924,24844,54050,24673,912 119 CITY OF DENTON, TEXAS CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM LAST TEN FISCAL YEARS Fiscal Year Function / Program20022003200420052006 Public safety Police Police stations11111 Police patrol units138141143148149 Fire Fire stations66666 Emergency vehicles2021222122 Animal services Animals shelters11111 Public works Lane miles added per year32.1534.9514.7924.5625.34 Streetlights5,7136,0866,9317,1047,118 Parks and recreation Parks2833343437 Park acreage9811,1771,2401,2051,272 Recreation centers1011121313 Water system Water mains (miles)458478497511520 Raw water (in thousand gallons)5,472,7086,168,0396,046,0706,234,0767,322,361 Wastewater system Wastewater mains (miles)414426442452459 Maximum daily capacity (in million gallons)1515212121 Solid waste Landfills11111 Source: Various city departments 120 Table 17 20072008200920102011 11111 149147149149143 77777 2424263030 11111 22.6610.1014.7941.771.56 7,0087,0117,0157,0166,996 3037373737 1,2101,4441,4491,4491,444 1313131313 530533550558560 5,801,9946,694,7346,471,2586,416,0867,572,149 470481488495496 2121252525 11111 121 122 CITY OF DENTON, TEXASExhibit XXX SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Variance with Actual on aFinal Budget - Budgeted Amounts BudgetaryPositive OriginalFinalBasis(Negative) EXPENDITURES: Personal Service$ 1,807,019$ 1,807,019$ 1,817,850$ (10,831) Materials and Supplies39,55839,55818,37421,184 Maintenance and Repairs4,4284,4281,7282,700 Insurance144,292144,292144,292- Miscellaneous38,07538,07525,01813,057 Operations, Services92,714112,71491,35621,358 Transfers - Interfund92,33692,33692,336- City Manager's Office2,218,4222,238,4222,190,95447,468 Personal Service147,602147,602147,182420 Materials and Supplies1,4501,4502,093(643) Maintenance and Repairs1,5001,500461,454 Insurance1,5241,5241,524- Miscellaneous500500255245 Operations, Services13,45113,4513,4809,971 Transfers - Interfund12,47812,47812,478- Cable Television178,505178,505167,05811,447 Insurance1,4091,4091,409- Operations, Services150,739150,739124,23326,506 Transfers - Interfund11,07511,07511,075- Internal Audit163,223163,223136,71726,506 Personal Service275,627275,627274,767860 Materials and Supplies13,79513,79520,084(6,289) Insurance2,1212,1212,121- Miscellaneous--165(165) Operations, Services109,238109,23879,85429,384 Transfers - Interfund19,15919,15919,159- Public Communications419,940419,940396,15023,790 Personal Service1,137,4911,138,9351,133,9275,008 Materials and Supplies24,75024,75023,802948 Maintenance and Repairs500500-500 Insurance9,4709,4709,470- Miscellaneous50,77350,77335,03415,739 Operations, Services172,438170,994153,79317,201 Transfers - Interfund83,39783,39783,397- Human Resources$ 1,478,819$ 1,478,819$ 1,439,423$ 39,396 (continued) 123 CITY OF DENTON, TEXASExhibit XXX SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Variance with Actual on aFinal Budget - Budgeted Amounts BudgetaryPositive OriginalFinalBasis(Negative) EXPENDITURES: Personal Service$ 1,507,445$ 1,507,445$ 1,483,991$ 23,454 Materials and Supplies16,14816,14818,024(1,876) Insurance8,5588,5588,558- Operations, Services193,231193,231108,90884,323 Transfers - Interfund36,59736,59736,597- Fixed Assets14,24414,24426,556(12,312) Legal Administration1,776,2231,776,2231,682,63493,589 Personal Service320,678320,678289,00831,670 Materials and Supplies4,9434,9433,5451,398 Insurance3,0563,0563,056- Operations, Services5,4955,4954,3891,106 Transfers - Interfund20,71120,71120,711- Municipal Judge354,883354,883320,70934,174 Personal Service1,489,6261,484,3621,450,57133,791 Materials and Supplies45,19033,10235,902(2,800) Insurance90,00890,00890,008- Miscellaneous3,00039,68139,281400 Operations, Services49,89138,89637,2771,619 Transfers - Interfund179,094179,094179,094- Planning1,856,8091,865,1431,832,13333,010 Personal Service1,393,6651,396,2731,397,410(1,137) Materials and Supplies61,00059,72555,3034,422 Maintenance and Repairs10,0007,0002,5834,417 Insurance16,61116,61116,611- Operations, Services62,51462,51453,7788,736 Transfers - Interfund109,290109,290109,290- Building Inspections1,653,0801,651,4131,634,97516,438 Personal Service203,390207,641206,0131,628 Materials and Supplies1,5761,5762001,376 Maintenance and Repairs100100-100 Insurance1,2611,2611,261- Operations, Services203,145198,89436,923161,971 Transfers - Interfund1,8281,8281,828- Development Review411,300411,300246,225165,075 Personal Service315,278265,778142,900122,878 Materials and Supplies28,84920,51922,061(1,542) Operations, Services5,82560,3889,28951,099 Fixed Assets-1,600-1,600 Gas Well Review$ 349,952$ 348,285$ 174,250$ 174,035 (continued) 124 CITY OF DENTON, TEXASExhibit XXX SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Variance with Actual on aFinal Budget - Budgeted Amounts BudgetaryPositive OriginalFinalBasis(Negative) EXPENDITURES: Personal Service$ 966,847$ 966,847$ 941,057$ 25,790 Materials and Supplies41,61651,11649,6141,502 Insurance11,27811,27811,278- Operations, Services167,639153,139117,05536,084 Transfers - Interfund83,71683,71683,716- Code Enforcement1,271,0961,266,0961,202,72063,376 Personal Service1,008,193993,993953,73040,263 Materials and Supplies60,60575,61764,68010,937 Maintenance and Repairs3,1433,1432,988155 Insurance10,60010,60010,600- Operations, Services143,939143,127109,04234,085 Transfers - Interfund4,1714,1714,171- Municipal Court1,230,6511,230,6511,145,21185,440 Personal Service2,151,4672,154,9632,163,465(8,502) Materials and Supplies84,03979,46381,281(1,818) Maintenance and Repairs6756751,345(670) Insurance16,60716,60716,607- Miscellaneous1,4401,3801,702(322) Operations, Services779,120780,734768,87911,855 Transfers - Interfund137,402137,402137,402- Finance3,170,7503,171,2243,170,681543 Personal Service497,800497,800485,27912,521 Materials and Supplies38,43537,26229,9727,290 Insurance3,6533,6533,653- Miscellaneous28,00028,00015,58812,412 Operations, Services1,955,5451,946,586672,5011,274,085 Transfers - Interfund25,86035,99235,992- Economic Development2,549,2932,549,2931,242,9851,306,308 Personal Service5,991,6725,995,5045,570,012425,492 Materials and Supplies628,663591,663585,6685,995 Maintenance and Repairs739,018797,252749,58147,671 Insurance176,591176,591176,591- Miscellaneous150150-150 Operations, Services1,866,0211,847,8212,037,456(189,635) Transfers - Interfund378,398393,398393,454(56) Fixed Assets--34,608(34,608) Parks & Recreation$ 9,780,513$ 9,802,379$ 9,547,370$ 255,009 (continued) 127 CITY OF DENTON, TEXASExhibit XXX SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Variance with Actual on aFinal Budget - Budgeted AmountsBudgetaryPositive OriginalFinalBasis(Negative) EXPENDITURES: Personal Service$ 1,010,205$ 1,010,205$ 1,027,779$ (17,574) Materials and Supplies47,24847,24829,73617,512 Maintenance and Repairs554,507553,318620,681(67,363) Insurance19,32219,32219,322- Miscellaneous1,5031,5033371,166 Operations, Services1,091,2961,091,2961,022,49868,798 Transfers - Interfund69,84871,03771,037- Facilities Management2,793,9292,793,9292,791,3902,539 Personal Service3,026,8663,033,2793,001,82431,455 Materials and Supplies151,738143,695147,616(3,921) Maintenance and Repairs51,95328,41926,6891,730 Insurance59,16359,16359,163- Operations, Services379,656400,595390,03110,564 Transfers - Interfund641,810641,810641,810- Fixed Assets490,179488,704487,6521,052 Library4,801,3654,795,6654,754,78540,880 Personal Service148,789148,789165,573(16,784) Materials and Supplies5,3325,3321,2604,072 Insurance630630630- Miscellaneous3,4003,4001,0402,360 Operations, Services201,192200,492158,85041,642 Transfers - Interfund13,91913,91912,1441,775 Transportation Operations373,262372,562339,49733,065 Personal Service869,365869,365827,11842,247 Materials and Supplies19,31719,31714,6064,711 Maintenance and Repairs479,242479,242353,518125,724 Insurance12,22112,22112,221- Miscellaneous2,7002,7001,5401,160 Operations, Services143,619143,619101,98341,636 Transfers - Interfund69,73069,730169,730(100,000) Traffic Operations1,596,1941,596,1941,480,716115,478 Personal Service1,825,7771,825,7771,816,1639,614 Materials and Supplies65,55064,67270,665(5,993) Maintenance and Repairs2,870,5952,904,0242,706,599197,425 Insurance53,15153,15153,151- Miscellaneous4,5504,5503,3061,244 Operations, Services406,223363,672436,836(73,164) Transfers - Interfund76,39686,396211,396(125,000) Streets5,302,2425,302,2425,298,1164,126 Operations, Services735,000735,000645,43989,561 Street Lighting$ 735,000$ 735,000$ 645,439$ 89,561 (continued) 128 CITY OF DENTON, TEXASExhibit XXX SCHEDULE OF EXPENDITURES - BUDGET AND ACTUAL GENERAL FUND FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 2011 Variance with Actual on aFinal Budget - Budgeted Amounts BudgetaryPositive OriginalFinalBasis(Negative) EXPENDITURES: Personal Service$ 19,544,383$ 19,522,453$ 19,332,847$ 189,606 Materials and Supplies131,452112,632155,358(42,726) Maintenance and Repairs178,850174,818175,038(220) Insurance345,966345,966345,966- Miscellaneous--96(96) Operations, Services848,749765,015912,940(147,925) Transfers - Interfund933,944933,944933,944- Police21,983,34421,854,82821,856,189(1,361) Personal Service475,214475,214487,719(12,505) Materials and Supplies35,49030,89030,913(23) Maintenance and Repairs10,8368,3369,325(989) Insurance8,6368,6368,636- Operations, Services174,236310,552343,529(32,977) Transfers - Interfund26,79426,79426,794- Animal Services731,206860,422906,916(46,494) Personal Service18,312,15318,236,76918,150,65686,113 Materials and Supplies489,720489,720455,47834,242 Maintenance and Repairs204,428204,062198,2555,807 Insurance285,436285,436285,436- Miscellaneous46,85046,85041,0105,840 Operations, Services1,055,3681,039,5681,189,968(150,400) Transfers - Interfund455,528530,912583,762(52,850) Fire20,849,48320,833,31720,904,565(71,248) Personal Service121,980121,980121,355625 Insurance1,0621,0621,062- Miscellaneous140,512140,512120,78419,728 Operations, Services1,9361,9361,936- Transfers - Interfund22,18622,18622,498(312) Agency Contributions287,676287,676267,63520,041 Personal Service50,00050,00078,989(28,989) Materials and Supplies--15(15) Miscellaneous115,000115,000155,308(40,308) Operations, Services1,059,7681,039,294864,476174,818 Transfers - Interfund474,787474,787469,6095,178 Miscellaneous/Finance1,699,5551,679,0811,568,397110,684 Personal Service64,598,53264,454,29863,467,185987,113 Materials and Supplies2,036,4641,964,1931,916,25047,943 Maintenance and Repairs5,109,7755,166,8174,848,376318,441 Insurance1,282,6261,282,6261,282,626- Miscellaneous436,453473,074440,46432,610 Operations, Services12,067,98812,079,00010,476,6991,602,301 Transfers - Interfund3,980,4544,092,1594,363,424(271,265) Fixed Assets504,423504,548548,816(44,268) TOTAL GENERAL FUND$ 90,016,715$ 90,016,715$ 87,343,840$ 2,672,875 129 130 EXHIBIT 3 CITY OF DENTON, TEXAS SINGLE AUDIT REPORTS YEAR ENDED SEPTEMBER 30, 2011 EXHIBIT 3 EXHIBIT 3 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Honorable Mayor and City Council City of Denton, Texas We have audited the accompanying financial statements of the Cit as of and for the year ended September 30, 2011 and have issued February 10, 2012. We conducted our audit in accordance with auditing standards gen accepted in the United States of America and the standards appli contained in Government Auditing Standards, issued by the Comptr States. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City reporting as a basis for designing our auditing procedures for t opinions on the financial statements, but not for the purpose of effectiveness of internal control over financial reporting. Acco opinion on the effectiveness of the Cityeporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing thei prevent, or detect and correct misstatements on a timely basis. material weakness is a deficiency, or a combination of deficiencies, in internal contro possibility that a material misstatement of the City or detected and corrected on a timely basis. Our consideration of internal control over financial reporting w described in the first paragraph of this section and was not des in internal control over financial reporting that might be defic material weaknesses. We did not identify any deficiencies in int reporting that we consider to be material weaknesses, as defined Compliance and Other Matters As part of obtaining reasonable assurance about whether the City free of material misstatement, we performed tests of its complia laws, regulations, contracts, and grant agreements, noncomplianc direct and material effect on the determination of financial sta providing an opinion on compliance with those provisions was not accordingly, we do not express such an opinion. The results of of noncompliance or other matters that are required to be report Standards. 1 EXHIBIT 3 City of Denton, Texas Page 2 This report is intended solely for the information and use of th City Council, federal awarding agencies, and pass-through entities and is not in should not be used by anyone other than these specified parties. WEAVER AND TIDWELL, L.L.P. Dallas, Texas February 10, 2012 2 EXHIBIT 3 REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 AND ON THE SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS The Honorable Mayor and City Council City of Denton, Texas Compliance We have audited the compliance of the City of Denton (the City), requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that could have a direct and material effect on each of its maj programs for the year ended September 30, 2011. The City and questioned costs. Compliance with the requirements of laws, grants applicable to each of its major federal programs is the r management. Our responsibility is to express an opinion on the audit. We conducted our audit of compliance in accordance with auditing accepted in the United States of America; the standards applicab in Government Auditing Standards, issued by the Comptroller Gene OMB Circular A-133, Audits of States, Local Governments, and Non Those standards and OMB Circular A-133 require that we plan and reasonable assurance about whether noncompliance with the types referred to above that could have a direct and material effect o occurred. An audit includes examining, on a test basis, evidence with those requirements and performing such other procedures as the circumstances. We believe that our audit provides a reasona audit does not provide a legal determination on the City In our opinion, the City, complied, in all material respects, wi above that could have a direct and material effect on each of it year ended September 30, 2011. Internal Control Over Compliance The management of the City is responsible for establishing and m control over compliance with requirements of laws, regulations, to federal programs. In planning and performing our audit, we co control over compliance with requirements that could have a dire major federal program in order to determine our auditing procedu expressing our opinion on compliance but not for the purpose of effectiveness of internal control over compliance. Accordingly, the effectiveness of the City 3 EXHIBIT 3 City of Denton, Texas Page 2 A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the n their assigned functions, to prevent, or detect and correct, non compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal co compliance, such that there is a reasonable possibility that mat of compliance requirement of a federal program will not be preve corrected, on a timely basis. Our consideration of internal control over compliance was for th the first paragraph of this section and was not designed to iden control over compliance that might be deficiencies, significant weaknesses. We did not identify any deficiencies in internal con consider to be material weaknesses, as defined above. Schedule of Expenditures of Federal Awards We have audited the basic financial statements of the government activities, each major fund, and the aggregate remaining fund in as of and for the year ended September 30, 2011 and have issued February 10, 2012. Our audit was performed for the purpose of forming our taken as a whole. The accompanying schedule of expenditures of for purposes of additional analysis as required by OMB A-133 and basic financial statements. Such information has been subjected applied in the audit of the basic financial statements and, in o material respects in relation to the basic financial statements This report is intended solely for the information and use of th City Council, federal awarding agencies, and pass-through entiti should not be used by anyone other than these specified parties. WEAVER AND TIDWELL, L.L.P Dallas, Texas February 10, 2012 4 EXHIBIT 3 CITY OF DENTON, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2011 I. Summary of the Auditor's Results : Financial Statements a. An unqualified opinion was issued on the financial statement b. Internal control over financial reporting: Material weakness(es) identified? Yes X No Significant deficiency(ies) identified that are not considered a material weakness? Yes X No c. Noncompliance material to financial statements noted Yes X No Major Programs d. Internal control over major programs: Material weakness(es) identified? Yes X No Significant deficiency(ies) identified that are not considered a material weakness? Yes X No e. An unqualified opinion was issued on compliance for major pr f. Any audit findings disclosed that were required to be reported under Section 510(a) or OMB Circular A-133. Yes X No g. Identification of major programs: 14.239 Home Improvement Partnerships Program 14.257 ARRA - Homelessness Prevention and Rapid Re-Housing Program 81.086 ARRA - Conservation Research and Development Grant 81.128 ARRA - Energy Efficiency and Conservation Block Grant h. The dollar threshold used to distinguish between type A and type B programs. $300,000 i. Auditee qualified as a low-risk auditee. X Yes No 5 EXHIBIT 3 CITY OF DENTON, TEXAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30, 2011 II. Findings Relating to the Financial Statements Which Are Required To Be Reported in Accordance with . Generally Accepted Government Auditing Standards None III. Findings and Questioned Costs for Federal Awards None IV. Summary of Prior year Findings. None 6 EXHIBIT 3 CITY OF DENTON, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 * CDBG Entitlement Grants Cluster (Continued) 7 EXHIBIT 3 CITY OF DENTON, TEXAS SCHEDULE OF EXPENDITURES OF FEDERAL AND STATE AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 Federal Grantor/FederalPassed Pass-Through Grantor/GrantCFDAAT 9-30-11Through to Program TitleI.D. NumberNumberExpendituresSubrecipients U. S. DEPARTMENT OF JUSTICE Byrne Justice Assistance Grant2009-SB-B9-243516.804$ 2,703$ - 2009 Byrne Justice Assistance Grant2009-DJ-BX-138716.580 42,621 - 2010 Byrne Justice Assistance Grant2010-DJ-BX-063516.580 38,922 - Total U. S. Department of Justice 84,246 - U. S. DEPARTMENT of AGRICULTURE Passed through Texas Department of Health and Human Services Summer Food Services Grant061-100210.559 126,878 - Total U.S. Department of Agriculture 126,878 - U. S. DEPARTMENT OF TRANSPORTATION Federal Transportation GrantTX-03-0293-0020.507 2,047,412 - Passed Through State Department of Transportation STEP - Comprehensive 2011-DentonPD-S-1YG-007120.600 73,882 - STEP - Click It OrTicket Mobilization2011-DentonPD-CIOT-0000020.600 6,971 - Total U.S. Department of Transportation 2,128,265 - TOTAL EXPENDITURES OF FEDERAL AWARDS$ 6,319,492$ 688,650 STATE AWARDS TEXAS STATE LIBRARY AND ARCHIVES COMMISSION Loan Star Library Grant442-11555N/A$ 45,375$ - Homebound Project Grant478-11010N/A 23,894 - Total library 69,269 - TEXAS DEPARTMENT OF TRANSPORTATION Airport Maintenance GrantM118DNTONN/A 44,316 - Total Texas Department of Transportation 44,316 - NORTH CENTRAL TEXAS COUNCIL OF GOVERNMENT (NCTCOG) Construction & Demolition Equipment Grant11-04-G04N/A 98,000 - Organic Grant11-04-G05N/A 58,875 - Big Belly Grant11-04-G06N/A 67,628 - Total North Central Texas Council of Government 224,503 - TOTAL EXPENDITURES OF STATE AWARDS$ 338,088$ - TOTAL FEDERAL AND STATE FINANCIAL ASSISTANCE EXPENDED$ 6,657,580$ 688,650 (Concluded) 8 EXHIBIT 3 CITY OF DENTON, TEXAS NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED SEPTEMBER 30, 2011 1. GENERAL The accompanying schedule of expenditures of federal and state a activity of all applicable federal and state awards of the City Federal and state awards received directly from federal and stat federal and state awards passed through other government agencie respective schedule. 2. BASIS OF ACCOUNTING The accompanying schedule of expenditures of federal awards is p statements. 3. RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Grant expenditures reports as of September 30, 2011, which have grantor agencies will, in some cases, differ slightly from amoun reports prepared for grantor agencies are typically prepared at refined estimates of year-end accruals. The reports will agree a the discrepancies noted are timing differences. 4. SCHEDULE OF FINDINGS AND QUESTIONED COSTS The schedule of findings and questioned costs, in results for federal awards, is included beginning on page 5. 9 EXHIBIT 4 February 10, 2012 To the Audit Committee City of Denton 215 E. McKinney Street Denton, Texas 76201 We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Denton, Texas(the City) for the year ended September 30, 2011. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards Government Auditing Standardsand OMB Circular A-133, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated September 6, 2011. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note I to the financial statements. As described in Note I, “Fund Equity”, the City changed accounting policies related to fund balance by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 54, Fund Balance Reporting and Governmental Fund Definitions, in 2011. We noted no transactions entered into by the governmental unit during the year for which there is a lack of authoritative guidance or consensus. Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were: Management’s estimates relating to the allowance for uncollectible receivables for property taxes and utility services. We evaluated the key factors and assumptions used to develop the allowances in determining that it is reasonable in relation to the financial statements taken as a whole. EXHIBIT 4 City of Denton February 10, 2012 Page 2 Management’s estimates of useful lives in calculating depreciation on capital assets. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable. Management’s estimates relating to the recognition of claims liability for the City’s self-insurance plans were made based on actuarial calculations. We evaluated the key factors and assumptions used to develop the claims liability in determining that it is reasonable in relation to the internal service fund-type financial statements taken as a whole. Management’s estimates relating to the recognition of a liability for the City’s Other Post-Employment Benefits (OPEB) were made based on actuarial calculations. We evaluated the key factors and assumptions used to develop the estimate in determining that it is reasonable in relation to the financial statements taken as a whole. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements.See the attached schedule for an adjustment identified during the audit. Disagreements with Management For purposes of this letter, professional standards define a disagreement with management as a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated February 10, 2012. EXHIBIT 4 City of Denton February 10, 2012 Page 3 Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the governmental unit’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the governmental unit’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. This information is intended solely for the use of the audit committee and management of City of Denton and is not intended to be and should not be used by anyone other than these specified parties. Yours truly, WEAVER AND TIDWELL EXHIBIT 4 City of Denton February 10, 2012 Page 4 Audit Adjustment Schedule The following entry is an audit adjustment to defer intergovernmental revenue and investment income that is refundable to the State if it is not expended within a specified timeframe. The adjustment also records a prior period adjustment, as prior year proceeds from the same agreements should have been deferred but were recognized as revenue. Account Description Debit Credit Prior period adjustment- Fund Balance Capital Projects Fund $10,674,744 Deferred Revenue- Capital Projects Fund $20,392,251 Intergovernmental Revenue- Capital Projects Fund $9,585,875 Investment Revenue- Capital Projects Fund $131,632 Prior period adjustment- Net Assets Governmental Activities $10,674,744 Deferred Revenue- Governmental Activities $20,392,251 Capital Grants and Contributions- Governmental Activities $9,585,875 Investment Income- Governmental Activities $131,632 EXHIBIT 5 February 10, 2012 To City Managementof the City of Denton In planning and performing our audit of the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Denton (the City) as of and for the year ended September 30, 2011, in accordance with auditing standards generally accepted in the United States of America, we considered the City’s internal control over financial reporting (internal control) as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness ofthe City’sinternal control.Accordingly, we do not express an opinion on the effectiveness of the City’s internal control. Our consideration of internal control was for the limited purpose described in the preceding paragraph and was not designed to identify all deficiencies in internal control that might be significant deficiencies or material weaknesses and, therefore, there can be no assurance that all such deficiencies have been identified. However, during our audit we became aware of an opportunity for strengthening controls and/or operational efficiency. A separate letter dated February 10, 2012 contains our communications on internal controls and compliance in accordance with governmental auditing standards. This letter does not affect our report dated February 10, 2012 or the financial statements of the City of Denton. ADVANCE FUNDING AGREEMENTS During fiscal year ended September 30, 2010, the City entered into agreements and received funding for two projects using funds held by the State in the State Highway 121 subaccount. Upon review of these agreements, unexpended amounts received under these agreements, including interest earned on these funds, are refundable upon the completion of the projects or after ten years from the execution of the agreement. Additionally, the agreements stipulate a 20% matching provision. During fiscal years 2011 and 2010, all amounts received under these advance funding agreements were recognized as revenue. During 2010, both City staffand audit representatives reviewed these agreements and failed to recognize provisions in the agreements that would require unexpended amounts to be refunded. As the unexpended amounts are refundable and there is a 20% matching provision, the City should recognize revenue only for the amount of 80% of eligible expenditures. EXHIBIT 5 We recommend the City ensure contracts or agreements with significant monetary amounts be thoroughly reviewed for unusual provisions to ensure proper accounting recognition for transactions. The City should consider developing a checklist to be completed for such transactions to ensure that issues impacting accounting recognition and disclosure are appropriately considered. This communication is intended solely for the information and use of management, City Council, and others within the organization, and is not intended to be and should not be used by anyone other than these specified parties. WEAVER AND TIDWELL, L.L.P. Dallas, Texas AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Planning and Development, Building Inspections Division ACM: Fred Greene SUBJECT Receive a report, hold a discussion and give staff direction regarding an ordinance to amend the currently adopted 2009 International Energy Conservation Code (IECC). BACKGROUND The 2009 International Energy Conservation Code was published by the International Code Council in early 2009. Subsequent to its publication, the Energy Board of the North Central Texas Council of Governments (NCTCOG) conducted a review of the Code. As a result of their review, the Energy Board recommended several amendments which were then presented the municipalities within the 16-county north central Texas region for consideration of adoption. The City of Denton adopted the 2009 Energy Code, as amended, on May 4, 2010 before the NCTCOG amendments were published. The propo ability of this Code, for example: by deleting the complicated requirements for residential alterations; requiring that builders and designers submit energy compliance reports that are created by certified professional; and requiring commercial projects to be certified by energy professionals before receiving final City approval. This proposed revision of the Energy Code will also include a requirement for all one and two family dwellings to demonstrate surpassing the current Code requirement by a minimum of ten percent (10%). This 10% over Code requirement has been in each of the last three The City of Denton Building Inspections staff began reviewing the NCTCOG amendments in early 2011 with the goal of adopting the amended ordinance by early 2012. On January 31, 2012, staff presented the draft amendments of the 2009 Energy Code to a group of approximately 50 stakeholders including builders, contractors, plumbers, mechanical contractors, architects, and engineers. The presentation highlighted the most significant changes from the current version of the 2009 IECC to the proposed amended version of the 2009 IECC which were received well by the attendants. A copy of the proposed amended 2009 International Energy Conservation Code is posted on the Building Inspections webpage. Agenda Information Sheet March 6, 2012 Page 2 On February 16, 2012 the amended Code was presented to the Health and Building Standards Commission (HaBSCo). The HaBSCo commissioners voted unanimously to recommend adoption of the amended Energy Code to the City Council. OPTIONS 1.Request more information about the 2009 IECC 2.Postpone consideration 3.Table item for future consideration RECOMMENDATION Staff recommends that the City Council adopt the amended 2009 International Energy Conservation Code. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On February 16, 2012 the amended Code was presented to the Health and Building Standards Commission (HaBSCo). The HaBSCo commissioners voted unanimously to recommend adoption of the amended Energy Code to the City Council. FISCAL IMPACT Staff does not anticipate any fiscal impact as a result of adopting this Code. EXHIBITS HaBSCo February 16, 2012 Minutes Proposed Ordinance Prepared by: Kurt Hansen, Building Official City of Denton Respectfully submitted: Mark Cunningham, AICP, CPM Minutes Health and Building Standards Commission April 21, 2011 Members present: Janay Tieken, Jim Strange, Jeff Wawro, Rod Reeves, Rosanne Ciccia and Gary Robinson Members absent: David Hoenig Staff members present: Kurt Hansen, Glenda Gailliard, Zackery Loiselle, Dean Bray and Chad Weldon Welcome and Call to Order Kurt Hansen, Building Official, called the meeting to order at 4:05p.m. Consider approval of the minutes of May 19, 2011 Jim Strange made a motion to approve the minutes of May 19, 2011. Seconded by Rosanne Ciccia. Motion carried 6-0. Elect a chair for the Health and Building Standards Commission Kurt requested that all members introduce themselves. Janay Tieken moved that Jim strange be the new Chairman and Jeff Wawro be the Vice Chairman. Seconded by Rosanne Ciccia. Review the requirements for C Meetings Training, and City of Denton Handbook for Boards, Commissions, and Council Committees Jennifer Walters came forward and gavea brief description and overview of each. There was a brief question and answer session. Hold a discussion concerning the adoption of the 2009 International Fire Code as amended by the City and make recommendation to the City Council. Dean Bray (Fire Protection Engineer Associate) and Chad Weldon (Assistant Fire Marshall) came forward. Chad gave a slide presentation and briefed the Commissioners on the adoption of the 2009 International Fire Code. There was a brief question and answer session. Janay Tieken made a motion to recommend to the City Council the adoption of the 2009 International Fire code as amended by the City. Seconded by Rod Reeves. Motion carrie 6-0. Hold a discussion concerning the adoption of the 2009 International Building Code as amended by the City, 2009 International Residential Code as amended by the City, 2009 International Plumbing Code as amended by the City, 2009 International Mechanical Code as amended by the City, and the 2009 International Fuel Gas Code as amended by the City and make recommendation to the City Council. Kurt Hansen, came forward and presented a slide presentation and briefed the Commissioners on the adoption of the 2009 International Building Code as amended by the City, 2009 International Residential Code as amended by the City, 2009 International Plumbing Code as amended by the City, 2009 International Mechanical Code as amended by the City, and the 2009 International Fuel Gas Code as amended by the City. There was a brief question and answer session. Rosanne Ciccia made a motion to recommend to the City Council the adoption of the 2009 IBC, the 2009 IRC, the 2009 IPC, the 2009 IMC, and the 2009 IFGC, as amended by the City. Seconded by Janay Tieken. Motion carrie 6-0. Hold a discussion concerning the adoption of the 2011 National Electrical Code as amended by the City and make recommendation to the City Council. Kurt Hansen, came forward and presented a slide presentation and briefed the Commissioners on the adoption of the 2011 National Electrical Code as amended by the City. There was a brief question and answer session. Jeff Wawro made a motion to recommend to the City Council the adoption of the delete the requirement 2011 National Electrical Code with the consideration to to install Arc-Fault Circuit-Interrupter protection for all 15 and 20 ampere branch circuits in the rooms not protected with a Ground-Fault Circuit- Interrupter protection device of all dwelling units and maintain the current code requirement. Seconded by Rod Reeves. Motion carried 6-0. Hold a discussion concerning the adoption of the amendments to the 2009 International Energy Conservation Code by the City and make recommendation to the City Council. There was a brief question and answer session. Janay Tieken made a motion to recommend to the City Council the adoption the new amendments to the 2009 International Energy Conservation Code. Seconded by Rosanne Ciccia. Motion carried 6-0 Hold a discussion about the HaBSCo meeting schedule for March 15, 2012. The next meeting will be held March 15, 2012. Under Section 551.042 of the Texas Open Meeting Act. Hold a discussion and set the date for future CAAB meetings. Under Section 551.042 of the Texas Open Meetings Act, Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. Adjourn There being no further business the meeting adjourned at 5:24 p.m. ________________________________ Jim Strange, HaBSCo Chairman ________________________________ Jeff Wawro, Co-Chairman ________________________________ Glenda Gailliard, Permit Technician Supervisor, City of Denton AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Planning and Development, Building Inspections Division ACM: Fred Greene SUBJECT Receive a report, hold a discussion and give staff direction regarding an ordinance to adopt the 2009 International Building Code (IBC), the 2009 International Residential Code (IRC), the 2009 International Plumbing Code (IPC), the 2009 International Mechanical Code (IMC), and the 2009 International Fuel Gas Code (IFGC) as amended by the City. BACKGROUND The current 2006 Building Codes, as amended, were adopted on February 3, 2009. The 2009 International Building Codes were published by the International Code Council (ICC) early in 2009. After its publication, the various building code boards of the North Central Texas Council of Governments (NCTCOG) began their review of the Codes. Subsequent to their review, the Boards recommended several amendments to the Codes. The recommended NCTCOG amendments were then published to the municipalities within this 16-county North Central Texas region for consideration of adoption. The City of Denton Building Inspections staff began reviewing the NCTCOG amendments early in 2011 with the goal of adoption in early 2012. On January 31, 2012, the amended 2009 International Building Codes were presented to approximately 50 area professionals including builders, contractors, plumbers, mechanical contractors, architects, and engineers. The presentation highlighted the most significant changes from the 2006 Codes to the 2009 version of the Building Codes, which were received well by the attendants. Copies of the proposed 2009 Building Code are posted on the Building Inspections Division webpage. On February 16, 2012 the draft ordinance of the 2009 Building Codes was presented to the Health and Building Standards Commission (HaBSCo). The HaBSCo commissioners voted unanimously to recommend adoption. OPTIONS 1.Request more information about the 2009 Building Codes 2.Postpone consideration 3.Table item for future consideration Agenda Information Sheet March 6, 2012 Page 2 RECOMMENDATION Staff recommends that the City Council adopt the 2009 International Building Code, Residential Code, Plumbing Code, Mechanical Code, and the Fuel Gas Code along with staff recommended amendments. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On February 16, 2012 the draft ordinance of the 2009 Building Codes was presented to the Health and Building Standards Commission (HaBSCo). The HaBSCo commissioners voted unanimously to recommend adoption. FISCAL IMPACT Staff does not anticipate any fiscal impact as a result of adopting this Code. EXHIBIT HaBSCo February 16, 2012 Minutes PowerPoint Ordinance Prepared by: Kurt Hansen, Building Official Respectfully submitted: Mark Cunningham, AICP, CPM Minutes Health and Building Standards Commission April 21, 2011 Members present: Janay Tieken, Jim Strange, Jeff Wawro, Rod Reeves, Rosanne Ciccia and Gary Robinson Members absent: David Hoenig Staff members present: Kurt Hansen, Glenda Gailliard, Zackery Loiselle, Dean Bray and Chad Weldon Welcome and Call to Order Kurt Hansen, Building Official, called the meeting to order at 4:05p.m. Consider approval of the minutes of May 19, 2011 Jim Strange made a motion to approve the minutes of May 19, 2011. Seconded by Rosanne Ciccia. Motion carried 6-0. Elect a chair for the Health and Building Standards Commission Kurt requested that all members introduce themselves. Janay Tieken moved that Jim strange be the new Chairman and Jeff Wawro be the Vice Chairman. Seconded by Rosanne Ciccia. Review the requirements for C Meetings Training, and City of Denton Handbook for Boards, Commissions, and Council Committees Jennifer Walters came forward and gavea brief description and overview of each. There was a brief question and answer session. Hold a discussion concerning the adoption of the 2009 International Fire Code as amended by the City and make recommendation to the City Council. Dean Bray (Fire Protection Engineer Associate) and Chad Weldon (Assistant Fire Marshall) came forward. Chad gave a slide presentation and briefed the Commissioners on the adoption of the 2009 International Fire Code. There was a brief question and answer session. Janay Tieken made a motion to recommend to the City Council the adoption of the 2009 International Fire code as amended by the City. Seconded by Rod Reeves. Motion carrie 6-0. Hold a discussion concerning the adoption of the 2009 International Building Code as amended by the City, 2009 International Residential Code as amended by the City, 2009 International Plumbing Code as amended by the City, 2009 International Mechanical Code as amended by the City, and the 2009 International Fuel Gas Code as amended by the City and make recommendation to the City Council. Kurt Hansen, came forward and presented a slide presentation and briefed the Commissioners on the adoption of the 2009 International Building Code as amended by the City, 2009 International Residential Code as amended by the City, 2009 International Plumbing Code as amended by the City, 2009 International Mechanical Code as amended by the City, and the 2009 International Fuel Gas Code as amended by the City. There was a brief question and answer session. Rosanne Ciccia made a motion to recommend to the City Council the adoption of the 2009 IBC, the 2009 IRC, the 2009 IPC, the 2009 IMC, and the 2009 IFGC, as amended by the City. Seconded by Janay Tieken. Motion carrie 6-0. Hold a discussion concerning the adoption of the 2011 National Electrical Code as amended by the City and make recommendation to the City Council. Kurt Hansen, came forward and presented a slide presentation and briefed the Commissioners on the adoption of the 2011 National Electrical Code as amended by the City. There was a brief question and answer session. Jeff Wawro made a motion to recommend to the City Council the adoption of the delete the requirement 2011 National Electrical Code with the consideration to to install Arc-Fault Circuit-Interrupter protection for all 15 and 20 ampere branch circuits in the rooms not protected with a Ground-Fault Circuit- Interrupter protection device of all dwelling units and maintain the current code requirement. Seconded by Rod Reeves. Motion carried 6-0. Hold a discussion concerning the adoption of the amendments to the 2009 International Energy Conservation Code by the City and make recommendation to the City Council. There was a brief question and answer session. Janay Tieken made a motion to recommend to the City Council the adoption the new amendments to the 2009 International Energy Conservation Code. Seconded by Rosanne Ciccia. Motion carried 6-0 Hold a discussion about the HaBSCo meeting schedule for March 15, 2012. The next meeting will be held March 15, 2012. Under Section 551.042 of the Texas Open Meeting Act. Hold a discussion and set the date for future CAAB meetings. Under Section 551.042 of the Texas Open Meetings Act, Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. Adjourn There being no further business the meeting adjourned at 5:24 p.m. ________________________________ Jim Strange, HaBSCo Chairman ________________________________ Jeff Wawro, Co-Chairman ________________________________ Glenda Gailliard, Permit Technician Supervisor, City of Denton AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Planning and Development, Building Inspections Division ACM: Fred Greene SUBJECT Receive a report, hold a discussion and give staff direction regarding an ordinance to adopt the 2011 National Electrical Code (NEC) as amended by the City. BACKGROUND The current 2005 National Electrical Code as amended was adopted on February 7, 2006. The 2011 National Electrical Code was published by the National Fire Protection Association early 2010. Subsequent to its publication, the Electrical Board of the North Central Texas Council of Governments (NCTCOG) conducted a review of the Code. As a result of their review, the Electrical Board recommended several amendments to the codes. The recommended NCTCOG amendments were then presented to the municipalities within the 16-county north central Texas region for consideration for adoption. The City of Denton Building Inspections staff began reviewing the NCTCOG amendments early in 2011 with the goal of adoption in early 2012. On January 31, 2012, the amended 2011 Electrical Code was presented to approximately 50 area professionals including builders, contractors, plumbers, mechanical contractors, architects, and engineers. During the presentation, staff highlighted the most significant changes from the 2005 Electrical Code to the 2011 version of the Electrical Code. The presentation information was received well by those in attendance. A copy of the proposed 2011 Electrical Code adoption ordinance is posted on the Building Inspections webpage. On February 16, 2012, the amended 2011 Electrical Code was presented to the Health and Building Standards Commission (HaBSCo). The HaBSCo commissioners voted unanimously to recommend adoption of the 2011 Code as amended to the City Council; however, the commissioners suggested to delete the requirement to install Arc-Fault Circuit-Interrupter protection for all 15 and 20 ampere branch circuits in the rooms not protected with a Ground- Fault Circuit-Interrupter protection device of all dwelling units. However, the State of Texas has adopted the 2011 National Electrical dard" for all electrical work in -ride this recommendation from the Health and Building Standards Commission. Agenda Information Sheet March 6, 2012 Page 2 OPTIONS 1.Request more information about the 2011 National Electrical Code 2.Postpone consideration 3.Table item for future consideration RECOMMENDATION Staff recommends that the City Council adopt the 2011 National Electrical Code along with staff recommended amendments. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On February 16, 2012, the amended 2011 Electrical Code was presented to the Health and Building Standards Commission (HaBSCo). The HaBSCo commissioners voted unanimously to recommend adoption of the 2011 Code as amended to the City Council; however, the commissioners suggested to delete the requirement to install Arc-Fault Circuit-Interrupter protection for all 15 and 20 ampere branch circuits in the rooms not protected with a Ground- Fault Circuit-Interrupter protection device of all dwelling units. However, the State of Texas has adopted the 2011 National Electrical Code -ride this recommendation from the Health and Building Standards Commission. FISCAL IMPACT Staff does not anticipate any fiscal impact as a result of adopting this Code. EXHIBIT HaBSCo February 16, 2012 Minutes Proposed Ordinance Prepared by: Kurt Hansen, Building Official Respectfully submitted: Mark Cunningham, AICP, CPM Minutes Health and Building Standards Commission April 21, 2011 Members present: Janay Tieken, Jim Strange, Jeff Wawro, Rod Reeves, Rosanne Ciccia and Gary Robinson Members absent: David Hoenig Staff members present: Kurt Hansen, Glenda Gailliard, Zackery Loiselle, Dean Bray and Chad Weldon Welcome and Call to Order Kurt Hansen, Building Official, called the meeting to order at 4:05p.m. Consider approval of the minutes of May 19, 2011 Jim Strange made a motion to approve the minutes of May 19, 2011. Seconded by Rosanne Ciccia. Motion carried 6-0. Elect a chair for the Health and Building Standards Commission Kurt requested that all members introduce themselves. Janay Tieken moved that Jim strange be the new Chairman and Jeff Wawro be the Vice Chairman. Seconded by Rosanne Ciccia. Review the requirements for C Meetings Training, and City of Denton Handbook for Boards, Commissions, and Council Committees Jennifer Walters came forward and gavea brief description and overview of each. There was a brief question and answer session. Hold a discussion concerning the adoption of the 2009 International Fire Code as amended by the City and make recommendation to the City Council. Dean Bray (Fire Protection Engineer Associate) and Chad Weldon (Assistant Fire Marshall) came forward. Chad gave a slide presentation and briefed the Commissioners on the adoption of the 2009 International Fire Code. There was a brief question and answer session. Janay Tieken made a motion to recommend to the City Council the adoption of the 2009 International Fire code as amended by the City. Seconded by Rod Reeves. Motion carrie 6-0. Hold a discussion concerning the adoption of the 2009 International Building Code as amended by the City, 2009 International Residential Code as amended by the City, 2009 International Plumbing Code as amended by the City, 2009 International Mechanical Code as amended by the City, and the 2009 International Fuel Gas Code as amended by the City and make recommendation to the City Council. Kurt Hansen, came forward and presented a slide presentation and briefed the Commissioners on the adoption of the 2009 International Building Code as amended by the City, 2009 International Residential Code as amended by the City, 2009 International Plumbing Code as amended by the City, 2009 International Mechanical Code as amended by the City, and the 2009 International Fuel Gas Code as amended by the City. There was a brief question and answer session. Rosanne Ciccia made a motion to recommend to the City Council the adoption of the 2009 IBC, the 2009 IRC, the 2009 IPC, the 2009 IMC, and the 2009 IFGC, as amended by the City. Seconded by Janay Tieken. Motion carrie 6-0. Hold a discussion concerning the adoption of the 2011 National Electrical Code as amended by the City and make recommendation to the City Council. Kurt Hansen, came forward and presented a slide presentation and briefed the Commissioners on the adoption of the 2011 National Electrical Code as amended by the City. There was a brief question and answer session. Jeff Wawro made a motion to recommend to the City Council the adoption of the delete the requirement 2011 National Electrical Code with the consideration to to install Arc-Fault Circuit-Interrupter protection for all 15 and 20 ampere branch circuits in the rooms not protected with a Ground-Fault Circuit- Interrupter protection device of all dwelling units and maintain the current code requirement. Seconded by Rod Reeves. Motion carried 6-0. Hold a discussion concerning the adoption of the amendments to the 2009 International Energy Conservation Code by the City and make recommendation to the City Council. There was a brief question and answer session. Janay Tieken made a motion to recommend to the City Council the adoption the new amendments to the 2009 International Energy Conservation Code. Seconded by Rosanne Ciccia. Motion carried 6-0 Hold a discussion about the HaBSCo meeting schedule for March 15, 2012. The next meeting will be held March 15, 2012. Under Section 551.042 of the Texas Open Meeting Act. Hold a discussion and set the date for future CAAB meetings. Under Section 551.042 of the Texas Open Meetings Act, Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. Adjourn There being no further business the meeting adjourned at 5:24 p.m. ________________________________ Jim Strange, HaBSCo Chairman ________________________________ Jeff Wawro, Co-Chairman ________________________________ Glenda Gailliard, Permit Technician Supervisor, City of Denton AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 Questions concerning this may be directed to DEPARTMENT: Fire Rick Jones 349-8860 ACM: Fred Greene SUBJECT Receive report, hold discussion, and give staff direction regarding the proposed adoption of an ordinance amending Chapter 29 of the Code of the City of Denton, Texas, to provide for the adoption of the International Fire Code, 2009 Edition. FILE INFORMATION The "International Codes" were introduced to provide a model code with national consistency. The International model codes consist of: International Residential Code; International Building Code; International Mechanical Code; International Fuel Gas Code; International Plumbing Code; and International Fire Code. The International Codes are intended to provide regulations that safeguard public health and safety in all communities. Because the Codes are designed to be national, local amendments are required to meet the needs of local jurisdictions. The North Texas Regional Council of Governments has participated in the development of local regional amendments. Several of these amendments are found in the Code that is proposed for adoption. In an effort to provide consistency, the 2000 International Codes were first adopted by the City of Denton in February of 2002. Prior to the adoption of the 2000 International Codes, the City of Denton, like most other cities in the Metroplex, had adopted the Uniform Codes. The "2009 International Fire Code" has since been introduced after a lengthy review process through the International Code Council, (ICC). Changes to the International Codes are brought about by new technology and events that have occurred throughout the nation. The majority of the changes are related to health and safety. The purpose of the International Codes is to establish the minimum requirements to safeguard the public health, safety and general welfare through structural strength, means of egress facilities, stability, sanitation, adequate light and ventilation, energy conservation, and safety to life and property from fire and other hazards attributed to the built environment. The Fire Department has performed a comprehensive local review of these changes. In addition, the 2009 International Fire Code and local amendments were presented, in a public meeting, to local building contractors, sub-contractors, and other interested parties. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On February 16, 2012 the Health and Building Standards Commission unanimously voted to support and recommend the adoption of the 2009 International Fire Code along with staff recommended amendments. Agenda Information Sheet March 6, 2012 Page 2 FISCAL INFORMATION There is no fiscal impact with the adoption of the proposed Code. EXHIBITS Proposed Ordinance Respectfully Submitted: Rick Jones, 349-8860 Fire Marshall AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Parks and Recreation Department ACM: Fred Greene SUBJECT Receive a report, hold a discussion and give staff direction regarding the request for City sponsorship of the 2nd Annual Susan G. Komen Race for the Cure, North Texas, to be held in Denton on September 29, 2012, in South Lakes Park and the run routed through surrounding neighborhoods. BACKGROUND Last year was the first time for Denton to host the Susan G. Komen for the Cure. The event was held on the University of North Texas campus and had an attendance of approximately 2,300. The City of Denton provided up to $10,000 as in-kind sponsorship, which included Police and Fire/EMS support and barricades for street closures. In return, the City was considered to be an event sponsor at a sponsorship level equal to the in-kind value. televised scenes promoting the event were shown throughout the morning. The University of North Texas Police assisted with the 2011 race because it was held primarily on their campus. Since the event will be held in a city park and neighborhood, the UNT Police will not be involved and more assistance will be required from the City of Denton Police for the 2012 event. from Denton County and the surrounding seven counties served by the Susan G. Komen for the Cure, North Texas. Last year, 457 participants were from the city of Denton the remaining 1,753 came from the surrounding area to participate in the Denton run. The event will be held in South Lakes Park and the 5K and one mile courses will be routed through the surrounding neighborhoods. Hobson Lane and the neighborhood streets will be closed for approximately one hour during the runs. Guests attending the event will park at Golden Triangle Mall and be shuttled to the park. This same process was used last year with great success. Trinity Methodist Church and McMath Middle School will be contacted so see if those lots will be available for parking for the volunteers and survivors. The Susan G. Komen for the Cure, North Texas, is requesting the City to participate as a sponsor at the same level as last year. The City sponsored up to $10,000 for the 2011 event. The attached lists of in-kind services and resources (Exhibit 1) allow the City of Denton to be recognized again as a Silver level sponsor. Agenda Information Sheet Susan G. Komen for the Cure Sponsorship March 6, 2012 Page 2 ESTIMATED SCHEDULE OF EVENT The proposed timeline for the run/walk activities is the Race Day Registration opening at 6:00 a.m. and the Survivor Celebration ending approximately at 10:15 a.m. 8:00 Competitive 5k (about 30-45 minutes to complete) 8:05 Casual 5k (about 1 hour to complete) 8:30 1 Mile (about 20 minutes to complete) 9:15 50-yard dash (held in the park) 9:45 Survivor Celebration (held in the park) FISCAL INFORMATION Estimated costs to provide requested services and resources are: Police: $3,800 Fire: $2,250 Barricades: $1,200 Park Rental $ 450 Total $7,700 EXHIBITS 1.In-Kind Services and Resources for 2011 and Proposed for 2012 2.Route Maps for Races 3.Sponsorship Opportunities Respectfully submitted: Emerson Vorel, Director Prepared by: Janie McLeod Community Events Coordinator Exhibit 1 In-Kind Services and Resources for 2011 and Proposed In-Kind Services and Resources for 2012 2011 Actual 2012 Proposed Barricades for street closure $ 4,525 Barricades for street closure $ 1,200 for the run for runs Police $ 1,658 Police *$ 3,800 EMS $ 2,250 EMS $ 2,250 Rental of South Lakes Park $ 450 TOTAL $ 8,433 $ 7,700 *1 overnight officer inside park to guard equipment/tents, etc. (requested by Komen staff) 1 officer to guard money at money tent/bank (requested by Komen staff) 1 officer available to escort Komen staff during their money runs (requested by Komen staff) 1 bicycle officer to rove park grounds & immediate area 11 officers needed at selected intersections and along race routes for traffic control plus the supervisor - 1 - 1 _ F„ : + � +�,,,�, ' , �, ,..� �. .. ,� ', , }•� � � �, �'s. 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TCP NOTES SALESMAN/EXECUTIVE ciTY ROAD Blake Tu le Denton CLOSED JOBNAME CONTRACTOR I I N TCP DESIGNER Denton Race Cit of Denton B UYE RS Run Michael Coo er CONTACTPERSON CONTRACTORPHONE# Route w E Janie McLeod 940-349-8272 THIS PLAN IS FOR ILLUSTRATNE PURPOSES ONLYAND IS NOT INTENDED TO RELIEVE THE EST 1984 r� ��� � l� �1� , CONTRACTOR FROM THE REQUIREMENTS OF Traffic Control Plans(TCP's) are included Date S THE CONTRACT DOCUMENTS AND HIS with Buyers Barricades rental agreements. Y //O'.b�a� ,? RESPONSIBILITY TO TRAFFIC AND IS PROPERTY Traffic Control Plans issued without rental n n n 817.535.3939 5 F OF BUYERS BARRICADES, INC. agreement will be charged to the customer. OG/GO/� G AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Finance ACM: Jon Fortune SUBJECT Receive a report, hold a discussion, and give staff direction regarding the development of a local preference purchasing policy. BACKGROUND In 2010, the City updated its Purchasing and Payment Procedures Manual, which contained procedures for applying local preference on certain purchases. The procedures complied with the Texas Local Government Code (Chapter 271) provisions in effect at that time. The existing procedures are applicable to competitively bid contracts of less than $100,000 and provide a local preference if 1) the local bidder is within five percent (5%) of low bidder, and 2) the local bidder offers the best combination of price and economic development opportunities. In 2011, an internal purchasing stakeholders group was created to review, revise, and improve the . The working group was comprised of staff members from almost every area of the city organization (Engineering, Electric, Water/Wastewater, Solid Waste, Parks, Fire, Fleet, Streets, Legal, Technology Services, Facilities Management, Utilities Administration, Purchasing and Finance). While the group has not yet finished their work, the stakeholders have met several times and significant progress has been made on updating the Of particular note, the group has developed some proposed procedures to encourage local preference in our purchasing process. These proposed procedures have been developed in response to amendments to the Texas Local Government Code (LGC Chapter 271.905 and nd 271.9051) that were approved in 2011 by the 82 Legislature of the State of Texas. Below are key elements of the proposed local preference procedures for your consideration: 1.Provisions in LGC 271.905 and 271.9051 apply to competitive bids only. These are specifically identified as Lowest Responsible Bids and Best Value Bids. a.Lowest Responsible Bids Price is the single determinant factor when awarding a bid to a responsible bidder. In this case, the following criteria will apply: Agenda Information Sheet March 6, 2012 Page 2 i.A five percent (5%) price differential will apply to construction bids less than $100,000 and all other bids, including services, less than $500,000. Excludes telecommunication and information services. ii.A three percent (3%) price differential will apply to bids, excluding construction and services, greater than $500,000. The chart below is a summary of the proposed procedure for Lowest Responsible Bids: LGC 271.9051 LGC 271.905 5% price differential 3% price differential Construction bids less than $100,000 All other bids, excludes construction and services, greater than $500,000 All other bids, including services, less than $500,000 b.Best Value Bids Price is only one of a number of determining factors that are weighted for evaluation purposes. As a result, an additional weighted factor will be added to all such bids for bidders meeting local preference criteria. The appropriate weight, either 5% or 3%, will be consistent with the criteria outlined above. 2.Implementation of Local Bidder Preference Consideration Application (Attachment 1) a.A new and complete application must be submitted with each competitive bid by the due date. b.This application serves to ensure the qualification of a bidder as a local bidder and find, in writing, that a bidder is a local bidder. The application also removes any subjectivity on the part of staff in attempting to make this determination. 3.Bidders seeking local preference must meet all specifications and minimum requirements contained in the bid documents. 4.These procedures do not apply to purchases obtained through a Request for Qualifications (Professional Services), Requests for Proposals or bids involving Federal funds, in whole or part. 5.Regarding purchases through Cooperative Programs and Interlocal Agreements, staff will periodically complete a pricing comparison of select purchases to verify that the best price is being obtained. Agenda Information Sheet March 6, 2012 Page 3 In accordance with the statutory provisions, it is important to point out that the City may award a competitively bid contract to the lowest responsible bidder, local bidder or reject all bids. As such, staff will continue to make appropriate award recommendations to the City Manager or City Council with necessary justifications. preference purchasing procedures, the group is also actively working on additional updates to the presented to the Audit/Finance Committee in the near future. RECOMMENDATION Staff recommends approval of the proposed local preference purchasing policy. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On January 12, 2010, the City Council gave staff direction in a work session to proceed with t Procedures Manual. On February 14, 2012, the Audit/Finance Committee unanimously recommended that the proposed local preference policy be submitted to the City Council for consideration. EXHIBITS Exhibit 1: Proposed Local Bidder Preference Consideration Application Exhibit 2: Sample Tax Certificate Exhibit 3: PowerPoint Presentation Respectfully submitted: Bryan Langley CFO and Director of Strategic Services Prepared by: Antonio Puente, Jr. Assistant Director of Finance EXHIBIT 1 Purchasing Department 901B Texas Street Denton, TX 76209 940-349-7100 940-349-7302 (f) purchasing@cityofdenton.com APPLICATION FOR LOCAL BIDDER PREFERENCE CONSIDERATION mean that the City of Denton is limiting responses to their competitive bids to only those businesses located within the city limits. All bids are welcome. Bidders who wish to request a LOCAL PREFERENCE must have their principal place of business located within the City of Denton, city limits. If your principal place of business is within the Denton city limits and you wish to apply for local preference consideration, then youmust meet the minimum requirements below for each bid: a) Provide a Tax Certificate from the Denton County Tax Assessor showing the current status of taxes, penalties, interest, and any known costs due on a property; and b) Submit the completed application on the following page. Local Preference may be considered in the following instances: A. In purchasing any real property or personal property that is not affixed to real property, if a local government receives one or more bids from a bidder whose principal place of business is in the local government and whose bid is within three percent of the lowest bid price received by the local government from a bidder who is not a resident of the local government, the local government may enter into a contract with the bidder whose principal place of business is in the local government. (Local Government Code 271.905) B. In purchasing any real property, personal property that is not affixed to real property, or services, if a municipality receives one or more competitive sealed bids from a bidder whose principal place of business is in the municipality and whose bid is within five percent of the lowest bid price received by the municipality from a bidder who is not a resident of the municipality, the municipality may enter into a contract for construction services in an amount of less than $100,000 or a contract for other purchases of less than $500,000 with the bidder whose principal place of business is in the municipality. This section does not apply to the purchase of telecommunications services or information services, as defined by 47 U.S.C. Section 153. (Local Government Code 271.9051) The City of Denton reserves the right to award to the lowest bidder or reject all bids. The full text of the Local Government Code related to Purchasing and Contracting Authority of Municipalities, Counties, and certain other Governments is available at http://www.statutes.legis.state.tx.us/Docs/LG/htm/LG.271.htm#271. Detailed information related to local bidders is found in Section §271.905 and §271.9051 CONSIDERATION OF LOCATION OF . LOCAL PREFERENCE CONSIDERATION APPLICATION For bidders whose business is located within the Denton city limits ____________________________________________________________________________________________ The City of Denton requires the following information for consideration in award of competitive bids: 1.Location Eligibility: Principal place of business is defined herein as any business which owns or leases a commercial building within the City of Denton, Texas? a.If yes, identify the following: i.Business Name/DBA: _______________________________________________________ ii.Address: _____________________________________________________________ iii.Business Structure: ____________________________________________________ (sole proprietorship/partnership/corporation/other) b.Name and city of residence of owner(s)/partners/corporate officers, as applicable. iv.Name/Title: __________________________________________________________ v.City of Residence: _____________________________________________________ If more than one owner/partner/corporate officer exists, attach a separate sheet of paper. 2.Economic Development benefits that would result from award of this contract: a.Total number of current employees who are residents of the City of Denton? __________ b.Will award of this contract result in the employment/retention of residents of the City of Denton? ___ Yes ___ No c.Will subcontractors with principal places of business in the City of Denton be utilized? ___ Yes ___ No d.Will award of this contract result in increased tax revenue to the City? ___ Yes ___ No e.If yes, check types of taxes? ___ Property Taxes ___ Sales Taxes ___ Hotel Occupancy Taxes f.Other economic development benefits deemed pertinent by applicant (attach separate sheet if necessary): _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ _________________________________________________________________________________ City Bid Number for which local preference is requested:______________________________ Certification of information: The undersigned does hereby affirm that the information supplied in its bid and this application are true and correct as of the date hereof, under penalty of perjury. / Company Name Date / Signature Print Name Tax Certificate from Denton County Tax Assessor is attached AGENDA INFORMATION SHEET AGENDA DATE: March 6, 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 by the City of Denton Texas, authorizing the City Manager to execute Amendment No. One to a Professional Services Agreement with AR/WS Texas, LP, for further services regarding the procurement and delivery of land rights for the Denton Municipal Electric 69kV Spencer to Denton North Interchange Transmission Line Upgrade Project; authorizing the expenditure of funds therefor in an amount not-to-exceed $63,600; and providing an effective date (File 4744aggregating not-to-exceed $445,400). The Public Utilities Board recommends approval (6-0). FILE INFORMATION This amendment will authorize AR/WS Texas LP, to continue to assist Denton Municipal Electric with achieving the acquisition of easements and fee tracts necessary for the completion of the 69kV Spencer to Denton North Interchange Transmission Line Upgrade Project. A description of the project is included as (Exhibit 1). PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On June 13, 2011, the Public Utilities Board recommended approval to forward the original contract in the amount of $381,800 to the City Council for consideration. The original contract with AR/WS Texas, LP to assist DME with the acquisition of easements and fee tracts needed for the Denton North Interchange Transmission Line was approved by City Council on June 21, 2011. On February 27, 2012, the Public Utilities Board recommended approval of Amendment No. One to the original contract, and recommended forwarding this item to the City Council for consideration. RECOMMENDATION Approve Amendment No. One to the Professional Services Agreement with AR/WS Texas, LP, in an amount not-to-exceed $63,600 for a total award of $445,400. PRINCIPAL PLACE OF BUSINESS AR/WS Texas, LP Abilene, TX Agenda Information Sheet March 6, 2012 Page 2 ESTIMATED SCHEDULE OF PROJECT This agreement shall become effective upon approval by City Council and shall remain in force for the period which may be reasonably required for the completion of the project. FISCAL INFORMATION The services will be funded from Certificate of Obligation Bond account 600483498.1365.3500. The amendment amount will be added to Purchase Order 153969. EXHIBITS Exhibit 1: Project Description Exhibit 2: Map of Approved Route Exhibit 3: Amendment No. One/Original Approved Contract Exhibit 4: Public Utilities Board Minutes Exhibit 5: Ordinance Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-RFP 4744 9ãwz,z· Project Description lines that are situated in the northeast quadrant of Denton. Th Spencer Generating Plant site north to the Kings Row Substation located along Kings Ro one-half mile inside Loop 288. The second transmission line is from the Denton North Interchange (along the west side of North Locust Hercules Street). Reconstruction of these two lines is required to provide the cap growth, to replace facilities before they reach the ends of thei facilities to areas that are less congested. Galvanized steel poles will be used for the projec and the widths of the easements reflected the settings and the pme. As development has occurred, the easements for several sections of the transmis the point where there are significant challenges to maintenance eventually be required. Current National Electrical Safety Code standards indicate that an easem width of seventy- power transmission line structures and the operations and maintell be required over time. Because of the congestion in some segments of the ex to relocate portions of the lines to areas where easements of th AR/WS Texas LP has been hired by the City to provide appraisal and acquisition services for the project. background in successful utility driven projects. AR/WS is know culture of professionalism among its staff. AR/WS also has an industry property owners in such a way that demonstrates a respectful ack s unique situation. After input from several community, Public Utility Board, and City Council meetinhe project alignment was determined that reflects the least impact on home owners. The ultimate alignments th were approved by City Council on November 15, 2011, and January 10, 2012. The final alignments resulted in an increase in the number of tracts from the initial Amendment No. one reflects appraisal and land rights procurement for all phasereet north to Kings Row then west to the Denton North Interchange. Exhibit 2 DENTON NORTH SUBSTATION PROPOSED NEW KINGS ROW SUBSTATION KINGS ROW SUBSTATION N we s WOODROW SUBSTATION SPENCER SWITCH Spencer to Denton North 69kV Transmission Line Exhibit 3 Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit A Exhibit 4 DRAFT MINUTES 1 PUBLIC UTILITIES BOARD 2 3 February 27, 2012 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, February 27, 2012 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, Phil Gallivan, 11 John Baines and Leonard Herring 12 13 Absent Excused: Barbara Russell 14 15 Ex Officio Members: George Campbell, City Manager; Howard Martin, ACM Utilities 16 OPEN MEETING 17 18 CONSENT AGENDA 19 20 21 2)Consider a recommendation of an approval of adoption of an Ordinance by the City of 22 Denton Texas, authorizing the City Manager to execute Amendment No. One to a 23 Professional Services Agreement with AR/WS Texas, LP, for further services regarding the 24 procurement and delivery of land rights for the Denton Municipal Electric 69kV Spencer to 25 Denton North Interchange Transmission Line Upgrade Project; authorizing the expenditure 26 of funds therefore in an amount not-to-exceed $63,600; and providing an effective date (File 27 4744aggregating not-to-exceed $445,400). 28 29 Howard Martin, ACM Utilities, stated there was a typographical error in the ordinance. The 30 correct amount is $381,000; it was typed as $318,000. The total amount is correct at 31 $445,400. Michael Copeland, Utility Attorney, stated that he can correct the ordinance before 32 the City Council meeting. The amount was posted correct; the error was within the 33 ordinance itself. 34 35 Motion to approve item 2 by Board Member Gallivan with a second from Board Member 36 Baines. Vote 6-0. 37 38 39 Adjournment at 9:57 am AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012Questions concerning this acquisition may be directed DEPARTMENT: Materials Management Brian Lockley at 349-8378 ACM: Jon Fortune SUBJECT Consider adoption of an ordinance authorizing the City Manager or his designee to execute a Professional Services Agreement (PSA) with Wallace, Roberts and Todd, LLC for consulting services relating to a Comprehensive Plan Update for the City of Denton Planning Department, and providing for an effective date (File 4672Comprehensive Plan Update awarded to Wallace, Roberts and Todd, LLC in the amount of $628,500). BACKGROUND On April 25, 2011, the City issued a Request for Qualifications (RFQ #4672) seeking qualified professionals with considerable experience in citizen involvement, citizen participation, planning, land use, and sustainability, to develop an update to prehensive plan (The Denton Plan). On June 21, 2011, the RFQ closed, and the City received five (5) submittals from multi- disciplined firms that partnered with other consulting firms in the Dallas-Ft. Worth area. Based , and the evaluation criteria outlined in the RFQ, four (4) of the consultants were interviewed by a panel of City staff from the City Utilities Administration. Each team of consultants made a presentation about their project team, their approach to this project, the scope of work to be performed, and how their previous experience would benefit the City in the process of updating The Denton Plan. Each consultant team made a thorough presentation that highlighted their expertise and some intangible, value added features that made the selection more challenging. However, at the conclusion of the interviews, panel members were consistent in their rankings and selection of Wallace, Roberts, and Todd (WRT) as the consulta WRT is an interdisciplinary planning and design firm based in Philadelphia. WRT is a leader in community visioning, comprehensive planning, and sustainable development. Their approach acts upon the values and aspirations of each community, engaging citizens and community This approach is especially well-suited for Denton, which seeks to update the existing comprehensive plan in innovative ways to deal with municipal challenges and consider the integrated nature of municipal decision making. Agenda Information Sheet March 6, 2012 Page 2 BACKGROUND (CONTINUED) To date, WRT has completed thirty (30) comprehensive plans that have been successfully adopted and implemented nationally and locally by the respective municipality. These plans have been developed utilizing the latest techniques in consensus building, and includes guidelines for fluid responsiveness to upcoming changes both anticipated and unforeseen. As well, WRT has incorporated interactive planning initiatives and schemes to guide, reinvigorate, and position cities to stay on the leading edge of the planning profession. WRT has utilized state-of-the-art techniques to engage all citizens and to develop and test future scenarios for measures of sustainability and quality of life. To develop a comprehensive plan for the City of Denton, WRT has partnered with the following (3) three firms to address specific aspects of the plan: Gresham Smith and Partners (GS&P) 1. is a multi-disciplinary environmental consulting, architecture, engineering and planning firm that has provided services to federal, state and local governments, educational institutions, and private industry clientele for the past 43 years. GS&P offers full-service transportation and community planning; economic analysis; energy efficiency and use reduction; water, wastewater, solid waste and storm water consulting services. The Wolf Group 2.is a strategic communications firm offering advertising, public relations and grassroots services across the country. The Wolf Group is headquartered in Dallas and provides expertise in public relations and outreach, strategic assessment, market research, internet and social media, traditional media, message and strategy development, and media training. Insight Research Corporation 3.is an economic analysis firm. Insight has refined and improved traditional economic analysis protocols to evaluate the detailed economic, employment and investment-grade tax impacts of public and private capital investments, major projects, transportation alternatives and business site locations and expansions. and experience with the respective consultant. All of the references noted that their expectations were met, the plans the consultant were tasked to completed were prepared on time and on responsive to issues raised by the respective cities. Once the project has commenced, development of the update will progress through five (5) phases. Included in the table below are the project phases with title and cost: Agenda Information Sheet March 6, 2012 Page 3 BACKGROUND (CONTINUED) Phase Title Cost 1 Project Organization & Mobilization $54,100 2 Issues, Existing Conditions & Trends $172,300 3 Framing the Vision $140,400 4 Comprehensive Plan Development $216,200 5 Final Comprehensive Plan and Adoption $45,500 Total Contract Value $628,500 Each phase is designed to elicit the necessary data to assess the current conditions, develop a vision and goals, and identify strategies for achieving goals, plan preparation and adoption. Staff anticipates that City Council will be briefed quarterly on the progress of the update to the comprehensive plan. RECOMMENDATION Staff recommends the approval of a Professional Services Agreement between the City of Denton and Wallace, Roberts, and Todd, LLC in the amount of $628,500. PRINCIPAL PLACE OF BUSINESS Wallace, Roberts, & Todd, LLC Philadelphia, PA ESTIMATED SCHEDULE OF PROJECT It is anticipated that the update to the comprehensive plan will be performed in multiple phases over an 18 month to 24 month time schedule. The project timeline is detailed in the Professional Services Agreement (attached to the Ordinance) with an estimated completion date of December 2013. This schedule is contingent on completion of defined deliverables at each project phase. FISCAL INFORMATION Funding for the Comprehensive Plan Update in the amount of $628,500 is budgeted in the current fiscal year operating account 300029444.1365.10100. Requisition 107157 has been entered in the Purchasing software System. Respectfully Submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance Denton Comprehensive Plan Scope of Work and Services Phase 1.0 Project Organization and Mobilization This initial mobilization phase has two primary purposes. The first is to finalize the project organizational structure, including responsibilities, schedule, and mechanisms for community outreach. The second is to orient the consultant team to the City of Denton and the key issues to be addressed in the Comprehensive Plan update and to the data and information resources (existing city and regional plans, codes and regulations, digital mapping and other data, etc.) available to inform the planning process. Task 1.1: Website Development The Consultant will work with the Client to create a dedicated Comprehensive Plan website. Examples of content / output from the comprehensive planning process that could be included on this site include community forum results, interactive maps, wikis, draft plan products, online feedback, and photo galleries. The Consultant will assist with content generation and website maintenance and provide city staff with training in these areas to allow the continued use of appropriate online feedback mechanisms in the future. Task 1.2: Kick-Off Meeting and Community Tour Kick-off meetings and a field tour will be held with the Client to initiate discussion of the issues to be addressed in the Comprehensive Plan update and to begin collection and assessment of existing plans and data. WRT will also work with the Client to identify key city departments and personnel and stakeholders to contribute to the comprehensive plan process. An important outcome of this task will be to define an initial framework of issues, expectations, and topics that will require additional research, education, and facilitation in the comprehensive planning process. This framework will be used to help shape the work to be performed in subsequent phases. Task 1.3: Informational Sessions The Consultant will conduct informational sessions with City executive staff, city department personnel, City Council on the role of the comprehensive plan, expectations, and desired outcomes. WRT will also use these sessions to identify key departments, documents, and additional personnel to provide an overview of the dynamics of the community, the array of supporting information, and the status of current governmental initiatives through the following activities: Review supporting data and mapped information Review current policies and ongoing plans and studies Identify consensus on key issues Identify key stakeholders for stakeholder group interviews Establish protocols for interdepartmental and intergovernmental coordination Define institutional "partner" roles Define a detailed work program with milestones for subsequent phases of work Task 1.4: Public Outreach Plan We see civic engagement as a collaborative effort in which the Consultant and Client together define and execute a public outreach plan that involves citizens at multiple levels. The Consultant will lead core components of the public outreach plan, including public meeting facilitation, stakeholder group interviews, randomized surveys, and available technology such as an interactive comprehensive plan website, email subscription lists, and social media sites. The proposed public outreach plan includes the following general elements, described in more detail in later phases, which can be defined in more detail with the client during the kickoff meeting: Website Development (initiated in Phase 1, ongoing task throughout the planning process) Stakeholder Engagement (interviews and focus groups, occurs in Phase 2) Community Forums (three meetings at key intervals in the process, occur in Phases 2, 3, and 5) Community Survey (occurs in Phase 2) Phase 1.0 Deliverables Comprehensive Plan Website Summary of key issues, desired outcomes, identified stakeholder groups, and available data from information sessions Refined public outreach plan Refined project work plan and schedule Phase 1.0 Meetings/Trips One including the Kickoff meeting Phase 2.0 Issues Identification, Existing Conditions Inventory, and Trends Analysis The purpose of this phase is to understand community dynamics and values as they relate to a vision for a sustainable future for Denton. The Consultant will synthesize and interpret information gathered through the following tasks: Task 2.1: Stakeholder Engagement To begin the stakeholder engagement process, the Consultant will conduct focused interviews with members of the community identified with the Client to represent a cross-section of government, business, nonprofit, academic, and citizen interests, including, but not limited to city departments, elected and appointed officials, neighborhood organizations, developers / real estate professionals, business groups, Denton Independent School District, University of North Texas, Texas Woman’s University, North Central Texas Council of Governments, Texas Department of Transportation, DART, Vision North Texas, and surrounding municipalities. In addition to providing insights into the range of perspectives regarding key issues for Denton’s future, these interviews will lay the groundwork for involving potential partners in the planning process and, ultimately, plan implementation. To expand the number of persons reached and to encourage dialogue among the participants, the interviews can be scheduled as small focus groups or as a combination of focus groups and one-on-one interviews. The Client will be responsible for scheduling the interviews over a two to three-day period. Task 2.2: Community Survey The Consultant will conduct a community survey to provide statistically valid input from a cross-section of the community to supplement the “self-selected” approach via the community forum and other means of input. The Consultant will work with the Client to define the precise format and content of the survey. Task 2.3: Denton Plan Assessment The Consultant will review the current Denton Plan and develop a strategy to identify areas of the Plan that could potentially be carried over into the update as well as identify elements that may need to be created for the updated plan. The Consultant will also identify areas where other city initiatives and plans can be incorporated and into the comprehensive plan update. The assessment of the current Denton Plan will need to be revisited after the community input is received via Community Forum 1 and 2 regarding Denton’s current issues and opportunities and vision and goals for the future. Task 2.4: Review of Existing Plans, Initiatives and Policies The Consultant will review and evaluate the goals, strategies, recommendations, and degree of implementation of existing plans, planning initiatives, and policies affecting the City and region. The Client will provide the plans and policies to be reviewed by the consultant team. Plans to be reviewed include the following: Denton Sustainability Plan Denton Mobility Plan Denton Downtown Implementation Plan Denton’s Capital Improvement Program Open Space Master Plan Neighborhood Plans Utility Plans (Water, Wastewater, Denton Municipal Electric, Solid Waste and Recycling) Gas Well Drilling and Protection Ordinance , other plans and operations related to gas processing and distribution serving the City and ETJ Dallas-Fort Worth (DFW) State Implementation Plan (SIP) - 8-Hour Ozone Attainment Demonstration SIP Revision , DFW 8-Hour Ozone Reasonable Further Progress SIP Revision Relevant regional, municipal and institutional plans Denton Development Code Tree Preservation and Landscape Ordinance Task 2.5: Data Assessment The Consultant will work with the Client in Phase 1 to identify sources of data to be used in the comprehensive plan update and comprehensive plan data book. The Consultant will identify and document available sources of GIS and other data as well as identify data gaps, i.e., data that is missing or in need of updating and the potential methods for filling data gaps. The Client will be responsible for providing available data to the Consultant. Task 2.6: Comprehensive Plan Data Book To ensure a concise, yet complete update to the comprehensive plan, WRT’s approach to data analysis is to develop a “data book” or compilation of key data analysis and trends as a separate document and provide a summary of the key trends within the plan itself. This will help keep the planning document trim and focused on recommended strategies and implementation while having detailed analysis available for reference. The Comprehensive Plan Data Book will be formatted in a user-friendly document containing text, table, and map summaries of key factors indicating current conditions and trends. The Consultant will work with the Client to define the contents of the data book and how it will address the components identified in the RFP. The Client will be responsible for providing data for inclusion in the data book. Task 2.7: Growth Scenario Model The Consultant will prepare population forecasts and growth scenario models based on current population distribution, land use designations, and land use patterns to identify current and possible future trends if current trends continue. If desired by the Client, Insight Research Corporation can use their FlexTRAK modeling system, an innovative and accurate development simulation modeling process, to DSM SM examine future growth trends and their estimated financial impacts. The future growth scenario will be used as a baseline analysis to inform preferred growth concept based on the vision developed in Phase 3. Task 2.8: Community Forum #1 (Issues and Trends) The first Community Forum will be designed to define areas of consensus on the important issues facing the City of Denton and on citizens’ values and aspirations for the future. The meeting will begin with a summary presentation by the Consultant of the findings of Tasks 2.1 to 2.9 to set the context for facilitated citizen discourse. The structure of the forum will be developed with the client in Phase 1, but a recommended approach that has been very successful in previous planning efforts includes the use of breakout groups using a form of SWOT analysis and issue-oriented discussion (transportation, housing, etc.) about Denton’s strengths, challenges, and ideas for the future. Phase 2.0 Deliverables Community Survey Stakeholder engagement summary notes Denton Plan Assessment Data Assessment Comprehensive Plan Data Book Digital and hard copies of data collected Growth Scenario Model Community Form 1 presentation materials and summary results Phase 2.0 Meetings/Trips Three including stakeholder engagement, Community Forum 1, and steering committee coordination Phase 3.0 Framing the Vision In this phase the analysis and input from Phase 2 will be synthesized into a long-term vision, goals, and policy framework that sets the direction for preparation of the full Denton Comprehensive Plan Update. Task 3.1: Vision and Goals Using documentation from Phase 2, particularly input gathered from Community Forum #1 and other public outreach, The Consultant will draft a vision statement that articulate citizen’s goals and aspirations for the future of Denton. Task 3.2: Strategic Policy Directions and Growth Scenarios This task will consider and flesh out the vision and goals in the context of the findings of the inventory and analysis work conducted in Phase 2 by developing a framework of policy responses, or strategic directions, to achieve the vision and address the issues and challenges identified through the planning process. Strategic directions are general statements of guidance concerning the goals expressed for each of the plan elements. The Consultant will also develop up to three potential future growth scenarios based on a combination of current trends, Phase 2 public input, and the vision statement. If desired by the Client, Insight Research Corporation can use their FlexTRAK DSM modeling system to examine future growth SM and land use options under different development or redevelopment scenarios while simultaneously estimating the financial impacts of each alternative. The strategic policy directions and growth scenarios will be reviewed and evaluated with the Client and the public in Community Forum 2 for the purpose of developing the comprehensive plan elements and Preferred Growth Concept map (Task 3.4). Task 3.3: Community Forum #2 (Vision and Policy Framework) A second Community Forum will be conducted to receive citizen input and build consensus on the vision statement, strategic directions, and growth scenarios. The exact format of these meetings will be finalized in Phase 1 but is recommended to include keypad polling for soliciting and prioritizing input from participants on the vision statement, strategic directions, and growth scenarios and may also include a mapping exercise to refine the growth scenarios. The results of the forum voting and mapping exercises will be used to refine the vision statement and strategic directions as well as develop the Preferred Growth Concept map. Task 3.4: Preferred Growth Concept Using the results of the prioritization exercise and mapping exercise from Community Forum 2, the Consultant will develop a preferred growth concept map to determine the general desired future pattern of growth and development in the City of Denton. The Preferred Growth Concept is a map that sets out, conceptually, how Denton should grow in the future. It represents the most desirable way, based on Denton’s Vision for 2030, in which the City can accommodate new residents, jobs, mixed-use areas, open space, transit, and transportation infrastructure over the next 30 years. If desired by the Client, Insight Research Corporation can use their FlexTRAK DSMSM modeling system to examine the financial impacts of the Preferred Growth Concept. Phase 3.0 Deliverables Draft and Final Vision Statement Draft and Final Strategic Directions Future Growth Scenarios (up to three) Draft and Final Preferred Growth Concept Community Forum 2 presentation materials and results Phase 3.0 Meetings/Trips Three including Community Forum 2 and steering committee coordination Phase 4.0: Comprehensive Plan Development In this phase the Consultant will work with the Client to develop a complete comprehensive plan document based on the systems planning approach, including identification of integrated strategies, plus an implementation strategy that prioritizes short, mid, and long-term actions and establishes a monitoring program with indicators and benchmarks to measure plan performance. Task 4.1: Plan Elements, Strategies and Actions Building upon the Vision Statement, Strategic Directions, and Preferred Growth Concept developed in Phase 3, the Consultant will develop the full draft comprehensive plan update, including updated and new elements and references to supporting plans. The updated plan elements will be defined with the Client, but may include the following: Community Form: Land use, urban design, public spaces, historic resources, architectural character, development regulation, multi-family development Economy: Employment, investment, business diversity Society:Education, community health and safety, recreation, youth activities, senior citizens support, public services, volunteer organizations, arts and culture Mobility: Complete streets, bicycle and pedestrian networks, transit, road connectivity, parking, modal choices Natural Resources: Open space, water resources, air quality, protected natural areas, greenways and trails, habitat, and tree preservation Utilities and Infrastructure: Energy, water, sewer and stormwater infrastructure, green infrastructure systems, communications infrastructure, public buildings, green building practices, and impacts of gas wells Regional / Institutional Coordination: State, county, and local government, adjacent municipalities, regional agencies, school district, colleges and universities, non-profits. For each plan element, the Consultant will refine and incorporate the strategic directions developed in Phase 3 and develop more specific actions for each strategic direction. Strategies that are similar to and overlap with strategies in other elements and other related plans will be identified as interrelationships that can be used to inform prioritization of projects in the implementation strategy. Task 4.2: Implementation Strategy The Implementation Strategy will integrate the recommendations of the strategies and actions developed in Task 4.1 into a series of projects that will produce tangible results in achieving Denton’s vision. The implementation projects typically come in the form of capital improvements, policy, and regulatory changes. These projects will be prioritized in terms of short term initiation (first 1-2 years), intermediate term (3-5 years), and long term (6-10 years) initiation phases based on criteria that include: Alignment with the Vision Statement and Preferred Growth Concept. Combinations of strategies that yield the most direct interrelationships among elements and related planning strategies and that leverage other strategies most effectively and efficiently toward achieving plan goals and objectives. Leadership capacity, staff capacity, partnerships, and financial capacity Time required to initiate and complete the project Each project will be organized into an implementation matrix that provides the following information: Project description Related element strategies and actions Lead agency(s) responsible for overseeing the project implementation Partnership strategy to fulfill project implementation, including partnerships among key agencies and public/private partnerships. Potential funding source(s) Task 4.3: Plan Monitoring and Evaluation Plan monitoring provides a process for keeping track of progress in achieving the initiatives called for in the Comprehensive Plan, measuring success in achieving its vision and goals, and keeping it current as new information becomes available and conditions change. The plan monitoring process includes the use of indicators, benchmarks, and metrics as measures of success to help evaluate the effectiveness of implementation efforts and advancement of the Plan vision and goals. The plan monitoring process also defines methods for evaluating and documenting progress on plan implementation, including bi-annual reports indicating actions taken and progress made towards meeting benchmarks and indicators during the previous two years, establishing an action plan for the upcoming two years, and establishing a longer term (approximately 10 years) approach to reviewing and updating the Plan with regard to current data analysis and confirming or revising the Plan vision and goals. The Denton Comprehensive plan will truly be a living document allowing implementation modification based upon changing priorities. Task 4.4: Internal Draft Plan Review The Consultant will present and review the draft plan in phases to staff and the appropriate sub-committees of City Council. Upon receive comments and preparing updates, a full draft comprehensive plan will be developed and presented to the Planning and Zoning Commission and City Council for input and modifying the plan accordingly in preparation for presenting to the public and developing the final plan. Task 4.5: Community Forum #3 (Draft Plan Review) Following acceptance of the preliminary Draft Comprehensive Plan document by the client, the Consultant will lead a third and final Community Forum meeting series to receive citizen input and feedback on the Draft Comprehensive Plan. The forum will include a presentation of a synopsis of the plan in PowerPoint or similar format, and will be conducted in the same manner as the first forums, with a variety of opportunities for participation and input. Task 4.6 Follow Up Meetings and Data Collection Follow up public meetings or further data collection may be required to address issues or concerns raised during the completion of the Draft Comprehensive Plan. Phase 4.0 Deliverables Draft phases of the comprehensive plan for review Full Draft Comprehensive Plan document (min. 15 hard copies and one electronic copy), including the Implementation Strategy, Standard Procedure for requesting amendments to the updated plan (plan monitoring), and program for bi-annual re-evaluation of elements and key indicators Maps and appropriate accompanying graphics GIS map data Presentation materials and results of Community Forum 3 Phase 4.0 Meetings/Trips Four including Community Forum 3 and steering committee coordination Phase 5.0 Final Comprehensive Plan and Adoption In this phase the Consultant will work with the Client to develop a final comprehensive plan document. Task 5.1: Final Plan Preparation Based on input and direction received from staff, sub-committees, Planning and Zoning Commission, City Council, and public meetings, plan refinements will be incorporated into a Final Comprehensive Plan document for vetting by the Planning and Zoning Commission and recommendation to submit to City Council for adoption. Task 5.2: Plan Adoption Once adopted, the final version of the Plan will be provided to the Planning Division in electronic format, along with a minimum of 20 hard copies, unless otherwise negotiated. Phase 5.0 Deliverables Final Comprehensive Plan, minimum 20 copies and one electronic copy Phase 5.0 Meetings/Trips Three including steering committee coordination and public hearing Client Responsibilities The Client shall provide full information regarding requirements for the Project. The Client shall furnish required information as expeditiously as necessary for the orderly progress of the Work, and WRT shall be entitled to rely on the accuracy and completeness thereof. Specifically, the Client shall be responsible for the following: Organize and conduct Community Tour Organize and schedule Informational Sessions Organize and schedule stakeholder interviews Organize and schedule Community Forums Provide the plans and policies to be reviewed by the consultant team. Provide data for inclusion in the Comprehensive Plan Data Book Review and provide feedback on project deliverables. The Client shall designate the Director of Planning and Development, or designee as the Project Manager, who is authorized to act on the Client’s behalf with respect to the Project. The Project Manager shall render decisions in a timely manner pertaining to documents submitted to WRT in order to avoid unreasonable delay in the orderly and sequential progress of WRT’s services. AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Elton Brock at 349-7133. ACM: Jon Fortune SUBJECT Consider adoption of an ordinance accepting competitive bids and awarding a four year contract for the purchase of Traffic Signs and Accessories for the City of Denton Traffic Department; providing for the expenditure of funds therefor; and providing an effective date (Bid 4844-Four Year Contract for Traffic Signs and Accessories awarded to the lowest responsible bidder meeting specification in the unit price amounts shown on Exhibit A for an annual estimated expenditure of $100,000 and a four year estimated total of $400,000). BID INFORMATION This bid is for traffic signs and accessories including posts, barricades, safety netting, cones, warning light flashers, sign bases and glass beads. The items are stocked by the Warehouse and sold to various field service departments as needed. Most of the items are used to provide traffic control devices in work zones. The sign blanks and posts are utilized by the Traffic Department to replace or install new roadway signs. Standard City of Denton purchasing procedures were used. Bid packets were posted on the internet and emailed to prospective bidders. The bid tabulation is included as Exhibit 1. RECOMMENDATION Award a four year contract for Traffic Signs and Accessories to the lowest responsible bidder meeting specification in the unit price amounts shown on Exhibit A for an annual estimated expenditure of $100,000 and a four year estimated total of $400,000. No bids were received for Items 1-3 so they will not be awarded. Staff recommends award of Item 61 to Diversified Highway Products in accordance with Government Code 2252.002 regarding reciprocity of non- resident bidders. Diversified was within five percent of the non-resident bid submitted by Osburn Associates, Inc., for this line item. PRINCIPAL PLACE OF BUSINESS Traffic and Parking Control Co., Inc. Custom Products Corp. Allied Tube and Conduit Brown Deer, WI Jackson, MS Harvey, IL Osburn Associates, Inc. Centerline Supply Pathmark Traffic Products Logan, OH Grand Prairie, TX San Marcos, TX Agenda Information Sheet March 6, 2012 Page 2 PRINCIPAL PLACE OF BUSINESS (CONTINUED) Diversified Highway Products Delta Specialties Supply Fort Worth, TX Edinburg, TX ESTIMATED SCHEDULE OF PROJECT The initial term of this contract is for (4) four years ending March 6, 2016. The contract may be renewed for two additional one year periods if agreed upon in writing by both parties, with all terms and conditions remaining the same. FISCAL INFORMATION The items in this bid will be funded out of the Warehouse Working Capital account and charged back to the using department. EXHIBITS Exhibit 1: Bid Tabulation Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-Bid 4844 ORDINANCE NO. __________ AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING A FOUR YEAR CONTRACT FOR THE PURCHASE OF TRAFFIC SIGNS AND ACCESSORIES FOR THE CITY OF DENTON TRAFFIC DEPARTMENT; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (BID 4844-FOUR YEAR CONTRACT FOR TRAFFIC SIGNS AND ACCESSORIES AWARDED TO THE LOWEST RESPONSIBLE BIDDER MEETING SPECIFICATION IN THE UNIT PRICE AMOUNTS SHOWN ON EXHIBIT A FOR AN ANNUAL ESTIMATED EXPENDITURE OF $100,000 AND A FOUR YEAR ESTIMATED TOTAL OF $400,000). WHEREAS, the City has solicited, received and tabulated competitive bids for the purchase of necessary materials, equipment, supplies or services in accordance with the procedures of State law and City ordinances; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described bids are the lowest responsible bids for the materials, equipment, supplies or services as shown in the "Bid Proposals" submitted therefore; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies or services approved and accepted herein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The numbered items in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: BID ITEM NUMBER NO VENDOR AMOUNT 4844 4-5,21-23,25-26,28-37 Osburn Associates, Inc. Exhibit A 41-51, 53-60,62-67, 73-74,88,95-97 4844 6,8,19 Delta Specialties Supply Exhibit A 4844 7,10,12,17 Centerline Supply Exhibit A 4844 9,40 Traffic and Parking Control Co., Inc. Exhibit A 4844 11,20,24,27 Pathmark Traffic Products Exhibit A 4844 13-16,18 Allied Tube and Conduit Exhibit A 4844 38-39,61,65 Diversified Highway Products Exhibit A 4844 52,68-72,75-87,89-94 Custom Products Corp. Exhibit A 98-99 SECTION 2. By the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to pur- chase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid Invitations, Bid Proposals, and related documents. SECTION 3. Should the City and the winning bidder(s) wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the bids, the City Manager or his designated representative is hereby authorized to execute a written contract in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Bid Proposal and related documents and to extend that contract as determined to be advantageous to the City of Denton. SECTION 4. 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 Bid 4844 to the City Manager of the City of Denton, Texas, or his designee. SECTION 5. By the acceptance and approval of the above enumerated bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids. SECTION 6. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this 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 4844 AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012Questions concerning this acquisition may be directed DEPARTMENT: Materials Management to Jim Coulter at 349-7194 ACM: Jon Fortune SUBJECT Consider adoption of an ordinance accepting competitive bids and awarding an annual contract for the purchase of Water Treatment Chemicals for the City of Denton Water Treatment Plant; providing for the expenditure of funds therefor; and providing an effective date (Bid 4890- Annual Contract for Water Treatment Chemicals awarded to the lowest responsible bidder meeting specification in the unit price amounts shown on Exhibit A for an annual estimated expenditure of $820,000). (The Public Utilities Board approved this item by a vote of 6-0). BID INFORMATION This bid is for the annual contract to supply water treatment chemicals for the water production and wastewater treatment process. The chemicals are delivered in bulk quantities to on-site storage facilities. RECOMMENDATION Award to the lowest responsible bidder meeting specification for each item as listed below: Item Description Price Vendor 1 DPC INDUSTRIES LIQUID CHLORINE, NSF 60 CERTIFIED $0.2885/lb (ONE TON) INC. 2 DPC INDUSTRIES LIQUID CHLORINE, NSF 60 CERTIFIED $0.274/lb (BULK) INC. 3 SODIUM HYPOCHLORITE 10% DPC INDUSTRIES $0.069/lb INC. 4 SODIUM HYPOCHLORITE 12.5% PETRA CHEMICAL $0.077/lb COMPANY 5 FLUROSILICIC ACID, HARCROS $0.32/lb NSF 60 CERTIFIED CHEMICALS 6 K.A. STEEL LIQUID CAUSTIC SODA $0.268/lb NSF 60 CERTIFIED CHEMICALS, INC. 7 BRENNTAG POTASSIUM PERMANGANATE $3.269/lb SOUTHWEST, INC. 8 LIQUID AMMONIUM SULFATE (LAS) BRENNTAG $0.0935/lb SOUTHWEST, INC. 9 ANHYDROUS AMMONIA, TANNER $0.69/lb NSF 60 CERTIFIED INDUSTRIES, INC. 10 CATIONIC POLYMER, NSF 60 POLYDYNE, INC. $0.70/lb CERTIFIED 11 PENNCO, INC. LIQUID FERRIC SULFATE 60% $0.0572/lb Agenda Information Sheet March 6, 2012 Page 2 RECOMMENDATION (CONTINUED) The apparent low bidders on Line Item 7 did not meet specification. American International, General Chemical and Marubeni Specialty Chemicals bid products that did not meet the requirements of Specification 7b. which states that the chemical be a free flowing grade of United States origin. Therefore, Brenntag Southwest, Inc. was the lowest bid meeting specification for Item 7. Item 12 will not be awarded as part of this bid. Staff is reviewing options to either renew the existing contract or bid this item separately at a later date. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) At its February 27, 2012 meeting, the Public Utilities Board recommended approval to forward this item to the City Council for consideration (Exhibit 2). PRINCIPAL PLACE OF BUSINESS DPC Industries Inc. Harcros Chemicals Brenntag Southwest, Inc. Cleburne, TX Dallas, TX Houston, TX Petra Chemical Company K.A. Steel Chemicals, Inc. Tanner Industries, Inc. Dallas, TX Lemont, IL Southampton, PA Polydyne, Inc. Pennco, Inc. Air Liquide Industrial U.S. LP Riceboro, GA San Felipe, TX Grand Prairie, TX ESTIMATED SCHEDULE OF PROJECT This is an annual contract with the option to renew for additional one-year periods contingent upon all prices, terms, and conditions remaining the same. Delivery of individual chemicals varies from two days to two weeks and will be ordered as needed. FISCAL INFORMATION Funding for these water treatment chemicals will come from account 630100.6334. Individual purchase orders will be issued as needed. EXHIBITS Exhibit 1: Bid Tabulation Exhibit 2: Public Utilities Board Draft Minutes Exhibit 3: Annual Cost Estimate Per Chemical Agenda Information Sheet March 6, 2012 Page 3 Respectfully submitted: Antonio Puente, Jr., 349-7283 Assistant Director of Finance 1-AIS-Bid 4890 Exhibit 2 DRAFT MINUTES 1 PUBLIC UTILITIES BOARD 2 3 February 27, 2012 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, February 27, 2012 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, Phil Gallivan, 11 John Baines and Leonard Herring 12 13 Absent Excused: Barbara Russell 14 15 Ex Officio Members: George Campbell, City Manager; Howard Martin, ACM Utilities 16 OPEN MEETING 17 18 CONSENT AGENDA 19 20 21 1)Consider a recommendation of an approval of competitive bids and awarding an annual 22 contract for the purchase of water treatment chemicals (Bid 4890Water Treatment 23 Chemicals awarded to the lowest responsible bidder in the total estimated amount of 24 $820,000). 25 Baines asked questions regarding the chemicals, for a tabulation sheet. 26 Tim Fisher, 27 Assistant Director Water Utilities, discussed the cost, up and down prices for past years. Smith asked about a summary sheet 28 29 George Campbell, City Manager, stated that these cost are an estimate, actual will depend on 30 what is in fact 31 32 Motion to approve item 1 by Board Member Cheek with a second from Board Member 33 Herring. Vote 6-0. 34 35 Adjournment at 9:57 am 9ãwz,z· Chemical Cost Estimate Summary for Bid #4890 Bid Item # Chemical Description Estimated Cost per Total Pounds Pound Estimated Cost 1 Chlorine (Gas - 1Ton Cylinders) 175,000 $0.2885 $ 50,488 2 Chlorine (Gas - Bulk) 150,000 0.274 41,100 3 Chlorine (10% Sodium Hypochlorite) 854,000 0.069 58,926 4 Chlorine (12.5% Sodium Hypochlorite) 750,000 0.077 57,750 5 Fluoride 180,000 0.32 57,600 6 Caustic - Liquid 700,900 0.268235 188,006 7 Potassium Permanganate 20,000 3.269 65,380 8 Liquid Ammonium Sulfate (LAS) 300,000 0.0935 28,050 9 Ammonia Anhydrous 40,000 0.69 27,600 10 Polymer Cat-Floc CL 105,000 0.70 73,500 11 Iron - Liquid 3,000,000 0.0572 171,600 Total $820,000 ORDINANCE NO. AN ORDINANCE ACCEPTING COMPETITIVE BIDS AND AWARDING AN ANNUAL CONTRACT FOR THE PURCHASE OF WATER TREATMENT CHEMICALS FOR THE CITY OF DENTON WATER TREATMENT PLANT; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (BID 4890-ANNUAL CONTRACT FOR WATER TREATMENT CHEMICALS AWARDED TO THE LOWEST RESPONSIBLE BIDDER MEETING SPECIFICATION IN THE UNIT PRICE AMOUNTS SHOWN ON EXHIBIT A FOR AN ANNUAL ESTIMATED EXPENDITURE OF $820,000). WHEREAS, the City has solicited, received and tabulated competitive bids for the purchase of necessary materials, equipment, supplies or services in accordance with the procedures of State law and City ordinances; and WHEREAS, the City Manager or a designated employee has reviewed and recommended that the herein described bids are the lowest responsible bids for the materials, equipment, supplies or services as shown in the "Bid Proposals" submitted therefore; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies or services approved and accepted herein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The numbered items in the following numbered bids for materials, equipment, supplies, or services, shown in the "Bid Proposals" on file in the office of the City Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: BID ITEM NUMBER NO VENDOR AMOUNT 4890 1-3 DPC Industries, Inc. Exhibit A 4890 4 Petra Chemical Company Exhibit A 4890 5 Harcros Chemicals Exhibit A 4890 6 K.A. Steel Chemicals, Inc. Exhibit A 4890 7-8 Brenntag Southwest, Inc. Exhibit A 4890 9 Tanner Industries, Inc. Exhibit A 4890 10 Polydyne, Inc. Exhibit A 4890 11 Pennco, Inc. Exhibit A SECTION 2. By the acceptance and approval of the above numbered items of the submitted bids, the City accepts the offer of the persons submitting the bids for such items and agrees to pur- chase the materials, equipment, supplies or services in accordance with the terms, specifications, standards, quantities and for the specified sums contained in the Bid Invitations, Bid Proposals, and related documents. SECTION 3. Should the City and the winning bidder(s) wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the bids, the City Manager or his designated representative is hereby authorized to execute a written contract in accordance with the terms, conditions, specifications, standards, quantities and specified sums contained in the Bid Proposal and related documents and to extend that contract as determined to be advantageous to the City of Denton. SECTION 4. 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 Bid 4890 to the City Manager of the City of Denton, Texas, or his designee. SECTION 5. By the acceptance and approval of the above enumerated bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids. SECTION 6. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this 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-4890 AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Parks and Recreation ACM: Fred Greene _____________________________________________________________________________ SUBJECT Consider a request for an exception to the Noise Ordinance for the purpose of performing live music during House Concerts hosted by Cassandra Fuhrmann. The House Concerts will be located at 616 Woodland Street, beginning at 5:00 p.m. and concluding at 8:00 p.m., on the following Sundays: March 25, April 22, May 27, August 26, September 23, and October 28, 2012. This request is for an increase in decibels from 65 to 69 and for amplified sound on Sundays. Staff recommends approving the noise exception request. BACKGROUND A House Concert is defined as a musical event house or backyard where families and neighbors can share music and artists can perform to an intimate crowd. The music to be presented would be limited to Americana, Folk and Bluegrass artists consisting of solos or duet acoustic acts. No large bands will be invited to perform at this venue. The audience would be limited to 50 people maximum, with an average crowd of approximately 30 expected. A House Concert is not a public event, an invitation is required and admission is not charged. music at the concerts. RECOMMENDATION Staff recommends approving the noise exception requests. This will be the fifth year for House Concerts at this address and there have been no complaints from neighbors for previous concerts. EXHIBITS 1.Letter of Request 2.Exception to Noise Ordinance Signature Sheet Respectfully submitted: Emerson Vorel, Director Parks and Recreation Department Prepared by: Janie McLeod Community Events Coordinator AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Economic Development ACM: Jon Fortune SUBJECT Consider adoption of an ordinance of the City Council of the City of Denton, Texas, approving a grant application from, Bryan Korba, representing JDFIU Texas Building, LLCowner of 100 W. Oak Street, from the Downtown Reinvestment Grant Program not to exceed $25,000; and providing for an effective date. The Economic Development Partnership Board recommends approval 6-0-1. BACKGROUND On April 3, 2007, the City Council adopted the Downtown Incentive Reimbursement Grant Program. The grant program was designed to assist people wishing to redevelop downtown properties or build in the area. As Downtown is a very old, dense area, development is more Since its inception, the grant program has been allocated $50,000 each fiscal year. Over the life of the grant program, for every dollar that the city has granted, the private sector has invested $50. As the grant program has gained popularity, some concerns were raised about the amounts awarded and how decisions were made. A subcommittee of the Downtown Task Force was e scoring system less subjective. The Downtown Task Force and Economic Development Partnership Board sent the ensuing recommendations to City Council. On January 10, 2012, City Council approved the recommended changes to the grant program. Major changeand giving the Downtown Task Force the authority to recommend approval of grants of $10,000 and less to the City Manager, instead of going to the Task Force, EDPB and then Council. A scoring system was devised, ranking each application in the following categories: Economic Impact, Historical Accuracy, Utility Upgrades/Impact Fees, Increases Population (day or night users), Location and Other. This application scored 26 out of a possible 30 points. The Downtown Reinvestment Grant Policy allows the applicant to begin work on their project after the grant application has been submitted to Economic Development. This application was received on October 3, 2011. The Downtown Task Force delayed consideration of all grant requests until the revisions were approved by City Council (January 10, 2012). This is the first application of the 2011-2012 fiscal year to be considered by City Council. Applicant: Bryan Korba Denton, Texas Originally the site of the Lacy Hotel, where Sam Bass worked as a stable boy before he turned to a life of crime, the Texas Building (100 W. Oak) was the first major rehabilitation after revitalization efforts began in downtown in 1990. At that time, the owners invested approximately $1 million in the structure, revealing the beautiful, original brick. Many of the transom and side windows were intact beneath the covering. After this 1994 te went from less than 15% to 98%. In the past 17 years, the building has not had any major repairs. The offices are out-of-date and the elevator is, at best, unreliable. Mr. Bryan Korba and Mr. Greg Johnson recently purchased the building and plan a complete renovation of the property including utility upgrades, roof repair, new restrooms and a modern elevator. Exterior work includes repainting the back of the building (facing Pecan Street), new windows along the Locust Street side (which will oa historically correct flat canopy on the Oak Street side, and general repair to the brick and façade. The ground floor facing Oak Street has been leased to two restaurants, Garliq Italian Restaurant and Buffalo Cantina. The top two floors will be renovated and remain office space. Construction began in December, and the building is already 90% leased. The owners expect the restaurants to be operating by early summer. RECOMMENDATION The Economic Development Partnership Board recommends approval 6-0-1. ESTIMATED SCHEDULE FOR PROJECT The project should be completed by the end of 2012. PRIOR ACTION/REVIEW On January 12, 2012, the Downtown Task Force reviewed the grant application and recommended a grant in the amount of $25,000 for façade improvements, utility upgrades, and awnings. The motion was approved 11-0-1 (Rivers abstained). On February 7, 2012, the Economic Development Partnership Board reviewed the grant application and recommends a grant in the amount of $25,000 to the Denton City Council. The motion passed 6-0-1 (Rivers abstained). FISCAL INFORMATION The total cost of the project is $1.7 million. A $25,000 grant represents a return on investment of $1:$68 (which does not include purchase price). EXHIBITS Excerpt from EDPB Minutes Ordinance and Agreement Prepared by: _________ Julie Glover, Economic Development Program Administrator Respectfully Submitted, ______________________________ Linda Ratliff, Director Economic Development Excerpt from the February 7, 2012 Economic Development Partnership Board Draft Minutes: 15.Made a recommendation to the City Council regarding a Downtown Reinvestment Grant application for 100 W. Oak Street. he request for a Downtown Reinvestment Grant application for 100 W. Oak Street in the amount of $25,000 for façade improvements, utility improvements, and awnings. The motion was seconded by Gregory and carried (6-0-1) with Rivers abstaining. AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Transportation ACM: Jon Fortune ______________________________________________________________________________ SUBJECT 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 Bill Davidson for the property located at 4824 Lockheed, Denton Municipal Airport; and providing an effective date. The Council Airport Committee recommends approval (3-0) BACKGROUND Denton Airport entered into a lease in September 1990 for approximately 2,000 square feet of property located at 4824 Lockheed for the installation of a portable T-hangar owned by a private party. The lease location was, at that time, a remote area of the Airport with only taxiway access and no vertical development. This property and three similar, adjacent properties were leased for a period of fifteen (15) years with an option to extend for an additional five (5) years. The lease plus option period expired in September 2010 and has been carried forward on a month-to-month rental while the new taxiway has been constructed in the southeast area of the Airport. The portable T-hangar currently located on the property was identified in the 1990 lease as personal property and not a property development which would become an improvement subject to reversion to the City at the end of the lease. In subsequent years, the Airport has developed with box hangars that surround the T-hangar and taxiways that restrict development of the property on which the T-hangar is located. The property located at 4824 Lockheed is configured for a small T-hangar and is not suited to re- development with larger box hangars. If the T-hangar is relocated, the required Object Free Area (OFA) setback from taxiways on both sides of the property would restrict new vertical construction. Although the existing T-hangar is non-conforming, it does not create a safety hazard for operation of the aircraft movement area on either side of the structure. Airport on-site management considered numerous alternative structure developments and determined that the most practical use of the property is to continue the current use with requirements to upgrade the T-hangar with maintenance improvements specified in the proposed new lease. Because the area surrounding the property has been developed in recent years, and, the new southeast taxiway development will further isolate this location on the Airport, the highest and best use of the property is to continue operation of the T-hangar. Agenda Information Sheet March 6, 2012 Page 2 of 2 RECOMMENDATION Airport on-site management recommends approval of a new lease for the property at 4824 Lockheed with a continuation to recognize the T-hangar at this location as personal property of the current owner. The new lease period is recommended to be twenty (20) years in recognition that this area of the Airport contains mostly new development and a re-development plan is not probable for the proposed lease period. PRIOR ACTION/REVIEW (Council, Boards, Commissions) 1.The initial fifteen (15) year property lease to Acme Auction, Inc. was approved by the City Manager effective September 1, 1990; 2.A property lease transfer to Bill Davidson was approved by the City Manager effective March 17, 2003; 3.The property lease expired for 4824 Lockheed effective August 31, 2010 and rental has continued on a month-to-month basis. 4.On February 28, 2012, the Council Airport Committee unanimously recommended approval to forward the Airport Lease Agreement between the City of Denton, Texas and Bill Davidson, for City Council consideration. FISCAL INFORMATION The current annualized property lease rate for 4824 Lockheed is $392.26. The lease rate with the proposed lease will be $540.00 annually. Respectfully submitted, Quentin Hix Airport Manager AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Transportation ACM: Jon Fortune ______________________________________________________________________________ SUBJECT 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 Hangars Plus, L.L.C. for the property located at 4846 Lockheed, Denton Municipal Airport; and providing an effective date. Council Airport Committee recommends approval (3-0) BACKGROUND Denton Airport entered into a lease in December 1989 for approximately 2,000 square feet of property located at 4846 Lockheed for the installation of a portable T-hangar owned by a private party. The lease location was, at that time, a remote area of the Airport with only taxiway access and no vertical development. This property and three similar, adjacent properties were leased for a period of fifteen (15) years with an option to extend for an additional five (5) years. The lease plus option period expired in November 2009 and has been carried forward on a month-to-month rental while the new taxiway has been constructed in the southwest area of the Airport. The portable T-hangar currently located on the property was identified in the 1989 lease as personal property and not a property development which would become a fixture subject to reversion to the City at the end of the lease. In subsequent years, the Airport has developed with box hangars that surround the T-hangar and taxiways that restrict development of the property on which the T-hangar is located. The property located at 4846 Lockheed is configured for a small T-hangar and is not suited to re- development with larger box hangars. If the T-hangar is relocated, the required Object Free Area (OFA) setback from taxiways on both sides of the property would restrict new vertical construction. Although the existing T-hangar is non-conforming, it does not create a safety hazard for operation of the aircraft movement area on either side of the structure. Airport on-site management considered numerous alternative structure developments and determined that the most practical use of the property is to continue the current use with requirements to upgrade the T-hangar with maintenance improvements specified in the proposed new lease. Because the area surrounding the property has been developed in recent years, and, the new southeast taxiway development will further isolate this location on the Airport, the highest and best use of the property is to continue operation of the T-hangar. Agenda Information Sheet March 6, 2012 Page 2 of 2 RECOMMENDATION Airport on-site management recommends approval of a new lease for the property at 4846 Lockheed with a continuation to recognize the T-hangar at this location as personal property of the current owner. The new lease period is recommended to be twenty (20) years in recognition that this area of the Airport contains mostly new development and a re-development plan is not probable for the proposed lease period. PRIOR ACTION/REVIEW (Council, Boards, Commissions) 1.The initial fifteen (15) year property lease to Donald Maxwell was approved by the City Manager effective December 1, 1989; 2.A property lease transfer to Charles Menger, Jr. was approved by the City Manager effective October 17, 1994; 3.A property lease transfer to David Rosol was approved by the City Manager effective October 28, 1997; 4.A property lease transfer to Tony Montgomery was approved by the City Manager effective January 16, 2002; 5.The City Council approved a nine (9) month extension of the property lease at 4846 Lockheed on February 16, 2010; 6.The property lease expired for 4846 Lockheed effective August 31, 2010 and rental has continued on a month-to-month basis. 7.On February 28, 2012, the Council Airport Committee unanimously recommended approval to forward the Airport Lease Agreement between the City of Denton, Texas and Hangars Plus, L.L.C., for City Council consideration. FISCAL INFORMATION The current annualized property lease rate for 4846 Lockheed is $441.22. The lease rate with the proposed lease will be $540.00 annually. Respectfully submitted, Quentin Hix Airport Manager AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Transportation ACM: Jon Fortune ______________________________________________________________________________ SUBJECT 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 Hangars Plus, L.L.C. for the property located at 4888 Lockheed, Denton Municipal Airport; and providing an effective date. Council Airport Committee recommends approval (3-0) BACKGROUND Denton Airport entered into a lease in December 1989 for approximately 2,000 square feet of property located at 4888 Lockheed for the installation of a portable T-hangar owned by a private party. The lease location was, at that time, a remote area of the Airport with only taxiway access and no vertical development. This property and three similar, adjacent properties were leased for a period of fifteen (15) years with an option to extend for an additional five (5) years. The lease plus option period expired in November 2009 and has been carried forward on a month-to-month rental while the new taxiway has been constructed in the southeast area of the Airport. The portable T-hangar currently located on the property was identified in the 1989 lease as personal property and not a property development which would become an improvement subject to reversion to the City at the end of the lease. In subsequent years, the Airport has developed with box hangars that surround the T-hangar and taxiways that restrict development of the property on which the T-hangar is located. The property located at 4888 Lockheed is configured for a small T-hangar and is not suited to re- development with larger box hangars. If the T-hangar is relocated, the required Object Free Area (OFA) setback from taxiways on both sides of the property would restrict new vertical construction. Although the existing T-hangar is non-conforming, it does not create a safety hazard for operation of the aircraft movement area on either side of the structure. Airport on-site management considered numerous alternative structure developments and determined that the most practical use of the property is to continue the current use with requirements to upgrade the T-hangar with maintenance improvements specified in the proposed new lease. Because the area surrounding the property has been developed in recent years, and, the new southeast taxiway development will further isolate this location on the Airport, the highest and best use of the property is to continue operation of the T-hangar. Agenda Information Sheet March 6, 2012 Page 2 of 2 RECOMMENDATION Airport on-site management recommends approval of a new lease for the property at 4888 Lockheed with a continuation to recognize the T-hangar at this location as personal property of the current owner. The new lease period is recommended to be twenty (20) years in recognition that this area of the Airport contains mostly new development and a re-development plan is not probable for the proposed lease period. PRIOR ACTION/REVIEW (Council, Boards, Commissions) 1.The initial fifteen (15) year property lease to Robert Malechek was approved by the City Manager effective December 1, 1989; 2.A property lease transfer to William J. Evans. was approved by the City Manager effective January 14, 2002; 3.The City Council approved a nine (9) month extension of the property lease at 4846 Lockheed on February 16, 2010; 4.The property lease expired for 4888 Lockheed effective August 31, 2010 and rental has continued on a month-to-month basis. 5.The new property lease to Hangars Plus, L.L.C. will be concurrent with a transfer of ownership of the T-hangar to Hangars plus, L.L.C. 6.On February 28, 2012, the Council Airport Committee unanimously recommended approval to forward the Airport Lease Agreement between the City of Denton, Texas and Hangars Plus, L.L.C., for City Council consideration. FISCAL INFORMATION The current annualized property lease rate for 4888 Lockheed is $409.12. The lease rate with the proposed lease will be $540.00 annually. Respectfully submitted, Quentin Hix Airport Manager AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Transportation ACM: Jon Fortune ______________________________________________________________________________ SUBJECT 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 David Smith for the property located at 4862 Lockheed, Denton Municipal Airport; and providing an effective date. Council Airport Committee recommends approval (3-0) BACKGROUND Denton Airport entered into a lease in December 1989 for approximately 2,000 square feet of property located at 4862 Lockheed for the installation of a portable T-hangar owned by a private party. The lease location was, at that time, a remote area of the Airport with only taxiway access and no vertical development. This property and three similar, adjacent properties were leased for a period of fifteen (15) years with an option to extend for an additional five (5) years. The lease plus option period expired in November 2009 and has been carried forward on a month-to-month rental while the new taxiway has been constructed in the southeast area of the Airport. The portable T-hangar currently located on the property was identified in the 1989 lease as personal property and not a property development which would become an improvement subject to reversion to the City at the end of the lease. In subsequent years, the Airport has developed with box hangars that surround the T-hangar and taxiways that restrict development of the property on which the T-hangar is located. The property located at 4862 Lockheed is configured for a small T-hangar and is not suited to re- development with larger box hangars. If the T-hangar is relocated, the required Object Free Area (OFA) setback from taxiways on both sides of the property would restrict new vertical construction. Although the existing T-hangar is non-conforming, it does not create a safety hazard for operation of the aircraft movement area on either side of the structure. Airport on-site management considered numerous alternative structure developments and determined that the most practical use of the property is to continue the current use with requirements to upgrade the T-hangar with maintenance improvements specified in the proposed new lease. Because the area surrounding the property has been developed in recent years, and, the new southeast taxiway development will further isolate this location on the Airport, the highest and best use of the property is to continue operation of the T-hangar. Agenda Information Sheet March 6, 2012 Page 2 of 2 RECOMMENDATION Airport on-site management recommends approval of a new lease for the property at 4862 Lockheed with a continuation to recognize the T-hangar at this location as personal property of the current owner. The new lease period is recommended to be twenty (20) years in recognition that this area of the Airport contains mostly new development and a re-development plan is not probable for the proposed lease period. PRIOR ACTION/REVIEW (Council, Boards, Commissions) 1.The initial fifteen (15) year property lease to Steve Malechek was approved by the City Manager effective December 1, 1989; 2.A property lease transfer to Timothy Lambert was approved by the City Manager effective January 14, 2002; 3.A property lease transfer to David Smith was approved by the City Manager effective January 14, 2002; 4.The City Council approved a nine (9) month extension of the property lease at 4862 Lockheed on February 16, 2010; 5.The property lease expired for 4862 Lockheed effective August 31, 2010 and rental has continued on a month-to-month basis. 6.On February 28, 2012, the Council Airport Committee unanimously recommended approval to forward the Airport Lease Agreement between City of Denton, Texas and David Smith for City Council consideration. FISCAL INFORMATION The current annualized property lease rate for 4862 Lockheed is $393.38. The lease rate with the proposed lease will be $540.00 annually. Respectfully submitted, Quentin Hix Airport Manager AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Transportation ACM: Jon Fortune ______________________________________________________________________________ SUBJECT Consider adoption of an ordinance authorizing the City Manager, or his designee, to execute on behalf of the City of Denton a Third Amendment to an Airport Lease Agreement approved by Ordinance 2009-018 dated January 6, 2009 and amended by Ordinance 2009-323 dated December 15, 2009 and amended by Ordinance 2010-193 dated August 17, 2010 between the City of Denton, Texas and Sykes-Vaughan Investments, LLC, which includes among other provisions the right to sell aviation fuel to the public for a fuel flowage fee and to provide commercial hangar and tie-down service at the Denton Municipal Airport for real property Council Airport Committee recommends approval (3-0) BACKGROUND Sykes-Vaughan Investments, LLC for use as an aircraft ramp. The proposed improvement is a 30,000 square foot, that will be constructed by the Airport. The lot has been offered to Sykes-Vaughan Investments at a base annual rate of $16,200 plus an 11% commission on all revenue received from storage of aircraft for customers of the U.S. Aviation Group Fixed Base Operator (FBO) service. This proposed lease is the third amendment to the FBO Lease approved between the City of Denton and Sykes-Vaughan LLC. Ordinance 2009-018 dated January 6, 2009, approved the original FBO lease. This and prior amendments have added ground lease area for a total of 301,398 square feet of Airport ground leased to Sykes-Vaughn Investments, LLC. The balance of the lease period for the Sykes-Vaughn, LLC FBO lease, to which this lease amendment applies, is thirty-seven (37) years. RECOMMENDATION Airport on-site management recommends construction of the new ramp and approval of a new lease for the improved property at Agenda Information Sheet March 6, 2012 Page 2 of 2 PRIOR ACTION/REVIEW (Council, Boards, Commissions) On February 28, 2012, the Council Airport Committee unanimously recommended approval to forward the Third Amendment to an Airport Lease Agreement for City Council consideration. FISCAL INFORMATION The proposed property lease rate for is $16,200 annually. The annual lease rate will be adjusted every second year of the lease period by any increase in the Consumer Price Index. The estimated cost of improvements is $150,000, to be funded from the 2012 Budget for the Airport. The lease rate for unimproved property would be $8,100 annually. Respectfully submitted, Quentin Hix Airport Manager ATTACHMENT A Copyright NCTCOG DISCLAIMER This data has been compiled for NCTCOG. My Map Various official and unofficial sources were used to gather this DFWMaps.com information. Every effort was made to ensure the accuracy of this data, however, no guarantee is given or implied as to the accuracy of said data. ATTACHMENT "B" AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Transportation ACM: Jon Fortune ______________________________________________________________________________ SUBJECT Consider adoption of an ordinance authorizing the City Manager, or his designee, to execute on behalf of the City of Denton a Fourth Amendment to an Airport Lease Agreement approved by Ordinance 2009-018 dated January 6, 2009 and amended by Ordinance 2009-323 dated December 15, 2009 and amended by Ordinance 2010-193 dated August 17, 2010 and amended by Ordinance dated March 6, 2012 between the City of Denton, Texas and Sykes-Vaughan Investments, LLC, which includes among other provisions the right to sell aviation fuel to the public for a fuel flowage fee and to provide commercial hangar and tie-down service at the Denton Municipal Airport for real property located at 4703 Spartan Drive; and, providing an effective date. Council Airport Committee recommends approval (3-0) BACKGROUND Airport Staff has negotiated to lease an improved lot at 4703 Spartan Drive to Sykes-Vaughan Investments, LLC for use as a paved parking area for their Fixed Base Operator (FBO) service and Flight Academy. The proposed improvement is a 16,200 square foot, concrete parking surface with a connection to Spartan Drive to be constructed by the Airport. The lot, with proposed improvements, has been offered to Sykes-Vaughan Investments at a base annual rate of $7,100. This proposed lease is the fourth amendment to the FBO Lease approved between the City of Denton and Sykes-Vaughan LLC. Ordinance 2009-018 dated January 6, 2009, approved the original FBO lease. This and prior amendments, including a proposed 30,000 square foot aircraft ramp, have added ground lease area for a total of 317,598 square feet of Airport ground leased to Sykes-Vaughn Investments, LLC. The balance of the lease period for the Sykes-Vaughn, LLC FBO lease, to which this lease amendment applies, is thirty-seven (37) years. RECOMMENDATION Airport on-site management recommends construction of the new parking area and approval of a lease amendment for the improved property at 4703 Spartan Drive. Agenda Information Sheet March 6, 2012 Page 2 of 2 PRIOR ACTION/REVIEW (Council, Boards, Commissions) On February 28, 2012, the Council Airport Committee unanimously recommended approval to forward the Fourth Amendment to an Airport Lease Agreement between the City of Denton, Texas and Sykes-Vaughan Investments, LLC, for City Council consideration. FISCAL INFORMATION The current property lease rate for 4703 Spartan Drive is $7,140 annually. The annual lease rate will be adjusted every second year of the lease period by any increase in the Consumer Price Index. The estimated cost of improvements is $80,000, to be funded from the 2012 Budget for the Airport. The lease rate for unimproved property would be $4,374 annually. Respectfully submitted, Quentin Hix Airport Manager ATTACHMENT A Copyright NCTCOG DISCLAIMER This data has been compiled for NCTCOG. USAG Parking Various official and unofficial sources were used to gather this DFWMaps.com information. Every effort was made to ensure the accuracy of this data, however, no guarantee is given or implied as to the accuracy of said data. ATTACHMENT "B" ANNUAL PLANNING SESSION MINUTES CITY OF DENTON CITY COUNCIL January 31, 2012 After determining in Open Session that a quorum was present, the City Council convened in an Annual Planning Session on Tuesday, January 31, 2012, at 8:30 a.m. in the Facilities Management Department Training Room at 869 S. Woodrow Lane. PRESENT: Mayor Burroughs, Council Member Engelbrecht, Council Member Gregory, Council Member King, Council Member Roden, and Council Member Watts. ABSENT: Mayor Pro Tem Kamp 1. Closed Session A.Consultation with Attorneys under Texas Government Code Section 551.071. 1. Consult with and provide direction to City’s attorneys regarding legal issues and strategies associated with Phase I and proposed Phase II Gas Well Ordinance regulation of gas well drilling and production within the City Limits and the extraterritorial jurisdiction, including Constitutional limitations, statutory limitations upon municipal regulatory authority, moratorium on drilling and production, and statutory preemption of municipal regulatory authority. Mayor Pro Tem Kamp arrived during the Closed Meeting discussion. Following the completion of the Closed Session, the Council convened in a Planning Session. ITEMS FOR DISCUSSION: 1.Receive a report, hold a discussion and give staff direction concerning the long and short term goals of the city including, but not limited to, the following: a.Gas Wells Fred Greene, Assistant City Manager, stated that there had been two public meetings of the Task Force. The meetings were progressing well and one of the ten focus areas was completed. The Task Force would be meeting every Monday night through March. Darren Groth, Gas Well Administrator, presented the objectives of the Task Force. Those included (1) assisting the City to draft an ordinance that was fair, defensible, appropriate and did not risk taxpayer resources and (2) representing the interests of all stakeholders by soliciting public input. He presented information on city staff and voting members of the Task Force. The action items had been forwarded to the scientific and legal members for review. A review of the scheduled meetings was presented along with a gas well ordinance Phase II Amendment flow chart that showed how items would proceed through the review. Council Member Gregory noted that some issues might not have any scientific areas associated with that topic. City of Denton City Council Minutes January 31, 2011 Page 2 Groth stated that those would have a notation as to why no scientific area was included with the issue. The focus areas included air quality, water, compliance, other gas well drilling related facilities, public input process, insurance and bonding, lease process and property acquisitions, on-site requirements, city infrastructure and seismic testing. He presented the voting results for the air quality action items and the summary of those issues. Council Member Roden suggested that as the process moved forward annotations be added where the items were addressed in ordinance. If they were not in the ordinance, indicate why. Annual inspections - Groth presented information concerning the 2011 annual inspections. Total invoiced amount was $165,700 with $144,335 received in payments. That resulted in a 4.5% outstanding collection rate. The collection rate of nearly 96% included all payments remitted by operators; plus wells voided due to multiple factors such as plugged wells; wells permitted and not drilled, or RRC permitted dry holes. The figures for 2012 included 266 city of Denton wells at a cost of $850/well and 185 ETJ wells at a cost of $580/well. For 2012, the estimated invoice amount would be $333,400. At a 95% collection rate, the figure would be $316,730; at 90%, it would be $300,060; and at 85% it would be $283.390. Council Member Roden asked about the cost of the inspection team as opposed to the invoices. Mark Cunningham, Director of Planning and Development, stated that staff had started out with a budget and what was anticipated that would be needed. All of those funds were not used and they were able to cut some costs. Council Member Roden asked if it was being considered to recalculate the inspection fees in Phase II. Cunningham stated that the fees were based on a cost of service analysis and would probably not be increased unless staff could justify the work being done would be at a higher cost. City Manager Campbell stated that as the staff provided more services, there was the possibility of having to adjust the fees as the objective was to have the program pay for itself. Groth continued with information concerning gas well permitting. He stated that prior to August 4, 2010 the City issued 186 gas well permits. Since August 4, 2010 the City issued 21 permits. Four permit applications had been submitted for new wells from January 13, 2012 to January 25, 2012. Permits and inspections – Groth noted that operators must obtain their RRC permit prior to the city’s permitting process. The RRC permit data was used to anticipate the number of future gas wells. The 2011 inspection summary noted 2,344 notices of violation and 1,592 total inspections. Council Member Gregory requested that future reports include the number of violations that were abated. City of Denton City Council Minutes January 31, 2011 Page 3 Council Member Roden stated that after 30 days the violation would go into a citation. Groth stated that was correct and that staff worked with the prosecutor to work with those issues. At date, there was a high compliance rate to get the issues corrected. Council Member Roden asked if there ever was a point where the violations were so large that the well had to be shut down immediately. Groth stated that inspectors had issued stop work orders until the violations were corrected. b. Future Bond Programs Bryan Langley, Chief Financial Officer, stated that during the development of the FY 2011-12 budget, the improvement of street infrastructure was a major initiative for the City. Overview and Purpose – the Overview and Purpose of the presentation was to (1) review key elements of the Strategic Plan related to street infrastructure, (2) discuss street maintenance and capital funding needs, (3) present key elements of the proposed bond issuances in FY 2011-12 and beyond, (4) discuss the proposed structure and charge of the advisory committee for the 2012 bond election, and (5) review key elements of the proposed bond program calendar and outline next steps. The Key Focus Area of Public Infrastructure was associated with street related goals and objectives. These were based on the Council Retreat and Citizens Survey. Key objectives included developing a long-range strategy to transition street funding to achieve the OCI criteria and developing and implementing financing plans for identified infrastructure needs. Street Funding – as previously discussed with Council the OCI rating (quality) of streets in Denton had deteriorated over the past several years. The current level of street maintenance funding was insufficient to maintain the current OCI rating. Approximately $10 million was needed on an annual basis to prevent further decline and an enhanced capital program was also required on an annual basis to maintain the OCI rating. A long-term strategy should be developed to address maintenance and capital funding requirements. In the FY 2011-12 adopted budget, street maintenance funding was increased from $2.8 to $3.5 million. In addition to the maintenance funding requirement, a capital investment of approximately $4 million per year was needed to reconstruct existing streets. Mayor Burroughs asked if that figure included streets available to received state funding. Howard Martin, Assistant City Manager, stated it did not include any TxDOT roadways. Mayor Burroughs suggested including that in the presentation as there was the need to differentiate between local streets and those the City might be able to leverage outside funds for such as from TxDOT. Council Member Watts asked if the reconstruction of existing streets involved the removing of the old asphalt to the base or overlaying. City of Denton City Council Minutes January 31, 2011 Page 4 Martin stated that an OCI of 40 or less would involve a complete reconstruction down to the base. Council Member Watts asked about the table of specific street projects and those streets that might have a utility CIP. Martin stated that staff had coordinated with the utility CIP for water/wastewater line replacements and also coordinated with the bike program. Council Member Roden questioned that if there presently was not a bike lane on the street would the amount be included for a bike lane. Martin stated it would be covered under that part of the project. Langley continued that the proposed $20 million bond program would address the first five years of the commitment, but future bond programs would also need to devote significant resources to street construction. FY 2011-12 Bond Program Highlights – Langley presented details on the issuance of dollars for the program in terms of Certificates of Obligation and General Obligation bonds. COs would be issued in lieu of Utility System Revenue Bonds for water, wastewater, and electric system projects. Mayor Burroughs requested that in the bond program highlights, utilities be separated out from the other items as he would be looking at what would affect the tax rate as utilities were rate based. Langley stated that in 2012 there was also a potential debt issuance associated with the proposed conference center under discussion. In November 2012, a $20 million street infrastructure voter approved bond program was proposed. $4 million was expected to be sold each year over a five year period. Council Member Watts questioned why COs would be issued for the conference center rather than an election for GOs. Langley stated that COs were being proposed due to the timing of the project but could do an election if Council directed. Council Member Watts stated that there was no timeline at this point in time. Langley stated that the general time frame was to begin construction in the summer with a fairly aggressive schedule. Mayor Burroughs suggested more public involvement in the conference center concerning the issuance of certificates of obligation. City Manager Campbell indicated that staff was keeping the Economic Development Partnership Board appraised on what was happening with the proposed conference center. City of Denton City Council Minutes January 31, 2011 Page 5 Mayor Burroughs suggesting thinking about an additional vetting process to afford the same discussion that utility Cos received with the Public Utilities Board. Langley stated that the $20 million bond program was intended to be only be used for the reconstruction of existing streets. Funding was intended to complement increased street maintenance funding. The bond program assumed no tax rate increase. Council Member Engelbrecht asked about drainage. Martin stated that any drainage component which might be needed to accommodate the street reconstruction would be considered. Council Member Engelbrecht stated that he would like to know how much of $20 million would be used for drainage as opposed to building the road. Martin stated that they would not know that before the start of the project but could as the project progressed. Mayor Burroughs questioned if the committee would know about that when considering the project streets. Martin stated that if there were substantial drainage improvements needed, staff would be able to address that but not be able to determine normal drainage requirements. Bond Program Advisory Committee – Langley stated in prior bond elections large advisory committees were formed to explore the needs of the community. Staff was recommending a bond advisory committee no larger than 14 members with up to 2 appointments per council member. This would be similar to the size of the Transportation Subcommittee used in a prior process. Council Member Roden asked if the committee would be put together prior to the bond election. Langley stated yes and reviewed the bond election schedule. Council Member Roden asked if the recommendation of the Committee might change as time went on. Langley suggested that the provisions of the election be worded carefully so they would be flexible to reallocate the funds to a different project if needed. An oversight committee would be created to monitor the use of the funds. Council discussed the number of members for the committee. Council Member Watts suggested making sure there were a certain number of members from each district. Mayor Burroughs suggested having a good representation from members and then divide the city per area for the members to concentrate on. City of Denton City Council Minutes January 31, 2011 Page 6 Mayor Pro Tem Kamp stated that these would be appointments and not nominations. She suggested choosing two people per district so there would be balanced representation across the city. Council Member Watts felt that it would be better to have 3 appointments per council member. Charge of Advisory Committee – Langley stated that the Committee charge would be to assist the Council with determining projects for consideration. Staff had completed a preliminary review of the potential projects which would serve as a foundation for the Committee’s work. Other future bond issuances planned – Langley noted that in FY 2013-14 approximately $9 million in COs were expected to be sold for the City’s matching requirements associated with the Bonnie Brae and Mayhill projects. In FY 2015-16, an additional $40-50 million voter approved bond election was planned. Mayor Burroughs asked if the $4 million per year was a single amount needed or if every year that amount would be permanently needed. Langley stated that at least for the short time it would be issued every year but may be reduced as the maintenance caught up to the needs. Martin stated that as the program moved forward, staff would through look at how the backlog was being reduced. At some point there would be an acceptable amount of backlog and then there would not be the need to spend that $20 million. In the long term there would be less spending as the $10 million maintenance kicked in. c. Comprehensive Plan Fred Greene, Assistant City Manager, presented information on where staff was in the process. He indicated that the original bid was $743,700 and was negotiated down to $640,900. Further reductions in the contract produced the amount of $628,500 which was $115,200 less than originally bid. Each reduction was made to provide the greatest opportunity for the public input and to take advantage of the consultant’s experience in community visioning, comprehensive planning, and sustainable development. If the project was reduced any further it would impact the scope of the project. Staff would like to put the contract on an upcoming agenda to get approval to start the process. Brian Lockley, Development Review Committee Administrator, presented a Comprehensive Plan update. He stated in April the City issued a request for quote and received five proposals. There were five phases of the work program. Those included (1) project organization, (2) issues and existing conditions, (3) framing and vision, (4) comprehensive plan development, and (5) final comprehensive plan and adoption. Each phase was designed to elicit the necessary data to assess the current conditions, develop a vision and goals, and identify strategies for achieving goals, plan preparation and adoption. Staff anticipated that Council would be briefed quarterly on the progress of the update to the Comprehensive Plan. City of Denton City Council Minutes January 31, 2011 Page 7 He reviewed the steps to be included in each phase as listed on the Gantt chart which was included in the agenda backup materials. The plan went through November 2013 to complete. The current bid was $628,500 with staff participation to take over some of the consultant’s time. Staff was requesting direction concerning the schedule/time frame and the current bid amount. Mayor Burroughs felt that the timing was good and was glad to move forward with the project. He noted that Phases 3 and 4 sounded like the current plan was being discarded and starting over with a new phase. He did not want to discard the old plan but rather make an adjustment to the old plan. Lockley indicated that the concept was to update and not discard. Council Member Gregory asked about the expenses for travel and incidentals. Lockley stated those were included in the price. Council Member Gregory asked about the procedures for community forums. Lockley stated that the consultants would be in Denton for about a week. Meetings would be held for several days but not so many meetings that people would not want to attend. After each meeting, the results would be prepared and sent out with a newsletter and put on the City’s web page. Council Member Gregory questioned if the first forum would be more of a brainstorming session and the second forum would be a reporting back scenario. Lockley stated that the first forum would look at the information already prepared. Each meeting would look at the information done in that section. Council Member Gregory asked if the mind mixer program would be on-going. Lockley stated that staff would launch the comprehensive plan on that and inform citizens on how to participate. Council Member Roden suggested putting on line what had been done before so residents not familiar with the former process would know what was done before. City staff or Council could also have additional meetings as desired and report those back to the consultant with no additional costs. Council Member Engelbrecht questioned who would be involved in the tour. Lockley stated that any staff or Council who was interested could participate. Council Member Engelbrecht questioned how to get people up to speed about the planning issues on the comprehensive level as well as the history of how it was developed. He felt waiting too long would be difficult to attract new individuals to the process. He suggested staff oriented meetings to bring people up to speed on the proposal. City of Denton City Council Minutes January 31, 2011 Page 8 Lockley stated that before getting into the actual details of the update staff would have a series of meetings around the city to announce what the update of comprehensive plan would involve and what was a comprehensive plan. Council Member Gregory suggested four pre-meeting in the four council districts as neighborhood meetings that the Council could participate. Mayor Pro Tem Kamp stated that an update of the current comprehensive plan was to have been updated every 10 years but it was not done at the ten year mark due to financial reasons. d. City Council Meeting Procedures City Attorney Burgess stated that she would be presenting information on parliamentary procedures and the fundamentals of delaying a question. Commonly misused motions included lay on the table (to table), postpone to a certain time and postpone indefinitely. Laying on the table - the purpose of the motion to “Lay on the table” was to take up a matter of immediate urgency, putting the pending question aside. It could be used when considering an item on the agenda and a speaker came in and Council wanted to hear the speaker. In that instance, Council could lay the motion on the table so they could hear the speaker. A motion to lay on the table was non debatable. Mayor Burroughs stated that a motion to lay on the table would be during the meeting and Council would intend to come back to it. Burgess continued that the motion to lay on the table remained on the table until there was a motion to take it off the table or it died at the end of the next meeting. There was no such thing as tabling a motion indefinitely. It was not proper to table until a certain time and was only used to lay something aside temporarily to attend to an urgent matter. It took a majority vote, was not debatable and died if not removed from the table by the next meeting. Postpone to a certain time (postpone definitely) – the purpose to postpone to a time certain was to allow a motion to be put off, within limits, to a definite day, meeting or hour or until after a certain event. This motion could be debated but debate had to be confined to the merits of the postponement and not the question being postponed. A motion to postpone to certain time took precedence over the main motion and amendment, and to postpone indefinitely or to amend. Motion to postpone indefinitely – the effect of this motion would be to kill the main motion and was useful in disposing of a badly chosen main motion without adopting or rejecting the motion. It could be put back on an agenda and would not need a vote by Council to consider. Council Member Gregory stated that a motion to delay to a date or event certain would be the one most often used. Burgess stated that a motion to postpone would be used rather than one to continue. City of Denton City Council Minutes January 31, 2011 Page 9 Mayor Burroughs stated at times a public hearing was kept open and the item continued so that it would not have to go through reposting requirements. He questioned if that postponement to date certain was against the notice requirements. Burgess stated that the public hearing could open and Council postpone all of it and not violate the publication notices. The public there would hear that it was being postponed and not have to be published again. City Manager Campbell presented information on the City Council public hearing process. With the existing process, the Mayor typically read the caption, the City Manager introduced staff for a presentation, staff presented the case, there were potential questions of staff by Council, potential statements were made by Council and then the Mayor would open the public hearing. He had a concern that during the questioning and dialog portions there might be the impression that Council had made a decision on a case before opening the public hearing. The Mayor asked if the applicant was present to speak before other individuals spoke on the issue which resulted in potential questioning of the applicant by Council. There was the potential for questioning of staff by Council and potential statements made by Council before the Mayor opened the public hearing. Staff was proposing a process whereby the Mayor read the caption and then opened the public hearing. Staff would be introduced to make the staff presentation which would consist of facts relative to the case. The applicant would then present his case with potential questioning of the applicant by the Council. Input would then be provided by the public with potential questioning of the public by the Council. Following that there would be a potential rebuttal by the applicant, potential questioning of staff and/or the applicant by Council. The Mayor would then close the public hearing, discuss the case, provide a motion, second of the motion, discussion and vote. Mayor Burroughs indicated that he did not have a problem with that adjustment. He questioned the time allotted to the applicant. City Manager Campbell stated that the Council’s Rules of Procedures indicated the allotted time. Council Member Gregory indicated he was in agreement with the new proposal and asked about the length of time for rebuttal. Council Member Engelbrecht suggested being sensitive to the number of people speaking as opposed to allowing the applicant a larger amount of time. He questioned if the Planning and Zoning Commission had the same regulations City Manager Campbell felt that the same principles would apply. Council Member Watts stated that once the public hearing was closed and Council was in discussion, they might have questions for the applicant. At that point the applicant would have the opportunity to come back up and speak which the public would not be able to do. Unless it was a question of fact, how would it be handled that so that the applicant did not come back with more time. City of Denton City Council Minutes January 31, 2011 Page 10 Council Member Gregory stated that if the process was followed and the public hearing was closed, then the item postponed to a certain time or event to get answers back, citizens would have another opportunity to speak on the item when it was placed back on an agenda. Mayor Burroughs stated that there was a difference between closing the public hearing and leaving the public hearing open when postponing an item. If the public hearing was left open, citizens could not speak again and Council could only hear new speakers. Perhaps the public hearing could be reopened. Burgess stated that she would not be in favor of reopening a public hearing in a different meeting. Council Member Gregory stated that he did not like negotiating with the applicant during the meeting. Council Member Roden suggested an educational moment before the start of a public hearing so everyone knew how the process was done. Council Member Gregory suggested the City Secretary develop a fact sheet on the purpose of a public hearing; how it happened, group speakers so as to not repeat information, how to do it effectively to make all of the points. Perhaps this could be added to the agenda so the public could view it when they clicked on the agenda. Mayor Pro Tem Kamp felt that the most confusion was with Individual Items and Public Hearings. Blue speaker cards were not required for Public Hearings. Council Member Engelbrecht felt that the differences between Individual Items and Public Hearings needed to be presented. He knew that in the past at the Planning and Zoning Commission meetings, the process was discussed prior to opening a public hearing. He suggested finding tapes of prior meetings that citizens could view ones that were good examples of public hearings. Mayor Pro Tem Kamp suggested putting a permanent note on agendas or prepare an information sheet with a brief statement about the process. e. Citywide Strategic Plan Bryan Langley, Chief Financial Officer, presented an update on the Strategic Plan. Overview and purpose of the presentation included (1) a review of the goal and history of the City’s strategic planning process, (2) provide an overview of key focus areas and goals outlined in the Strategic Plan, (3) discuss potential changes to the Strategic Plan, (4) outline design and intent of the Strategic Plan performance report, and (5) next steps. Goal of Strategic Plan – a strategic plan defined who we were, where we wanted to go, and how we planned to get there. It shifted policy and administrative decision-making from a reactive to a proactive approach. It established long-term commitment and stability for the community and organization, and linked organizational direction to established vision, mission, and values. City of Denton City Council Minutes January 31, 2011 Page 11 A review of the strategic planning process from the January 2008 Council Planning Session through January 2010 Leadership Team performance report was presented. Key Focus Areas consisted of (1) organizational excellence, (2) public infrastructure, (3) sustainable economic development & environmental stewardship, (4) safe, livable, and family friendly community, and (5) partnerships, and regional leadership; Council made suggested language changes to some to the subgroups under the KFAs which Langley indicated would be incorporated into the document. Potential changes to the Strategic Plan – Langley indicated that the Strategic Plan was approved in April 2011. Strategic Plans should be reviewed at least annually to determine if any modification were necessary. The Leadership Team had reviewed the Strategic Plan and did not recommend any changes at this time. As staff went through other KFAs they might find areas of suggested changes and those would be brought back to Council. Langley reviewed the Strategic Plan Department Responsibility Matrix and Performance Report Dashboard. Council made comments and suggestions on the key performance indicators. Council agreed with the process and to continue with the other key focus areas. Langley stated that the next steps in the process were to revise the Strategic Plan for Council review in necessary, incorporate Council feedback and complete the Strategic Plan Performance Report, utilize the Strategic Plan and performance data in development of the 2012-13 budget, refine and improve performance measures and scorecard for the next fiscal year. f. DME Infrastructure Planning and Pole Attachment Policy Phil Williams, General Manager-Denton Municipal Electric, stated that although DME’s substations serviced the peak loads experienced this summer, the present system continued to need new substations and transmission infrastructure which must be constructed to provide customers highly reliable electric service and to comply with NERC requirements. He presented statistics on the percentages of the station’s maximum transformer ratings and a 2013-2017 transmission enhancement schedule. He indicated that continued emphasis on electric system construction, improvement, and age related replacement was essential. Williams continued with a pole attachment discussion. He indicated that electric and phone companies had been in the pole business for a long time. To minimize the number of poles required to provide utility services and to share costs, many years ago, electric and telephone entities agreed to allow each other to attach to each other’s poles. As cable companies entered the market they also sought to utilize and attach to existing poles. Cable companies attached via pole attachment agreements where telephone companies attached via shared cost agreements. Currently there were 7,083 Verizon attachments to DME poles and 2,168 DME attachments to Verizon poles for a net of 4,915 pole attachments billed to Verizon. It was estimated that cable companies had about 6,600 pole attachments. Periodic pole inventories were done and audited to keep accurate records. The poles were also inspected at that time to determine if they needed to be replaced. City of Denton City Council Minutes January 31, 2011 Page 12 Council Member Gregory asked if the current contract required the entities to change out in a certain amount of time. Williams indicated that Verizon had not signed a current contract and the old contract did not have a time frame. Council Member Engelbrecht felt that residents needed to know that some poles were still up due to Verizon lines on it. Council Member Roden asked if there were certain sections of town when new pole were constructed and the old poles were cut down but still used. Williams replied correct. He indicated that currently all telecommunication companies had signed an agreement and were paying the per pole attachment cost except for Verizon. Verizon was billed the same amount per pole as the cable companies, but Verizon had indicated that according to FCC rules their calculations indicated that they should be paying much less. Staff was in discussions with the City Attorney’s office about legal options. g. Regional Transportation Issues Mark Nelson, Director of Transportation, indicated that he would be discussing an alternate delegate to the Regional Transportation Counsel, I35E, the fleet maintenance agreement with DCTA and the A-train. RTC alternate –the current alternate delegate was not seeking re-election thus the alternate delegate would no longer be an elected official.The need was to find a new alternate prior to the May-June time frame. Mayor Pro Tem Kamp stated that she had not heard from anyone in the other cities who might be interested in serving as an alternate. Her preference, unless heard otherwise from other cities, was to have Mayor Burroughs serve as the alternate. Council Member Gregory suggested having a newer council member be an alternate to keep the history going as Mayor Pro Tem Kamp and Mayor Burroughs would soon be term limited. This would especially be needed in the last year of the term. After discussion, consensus of the Council was to proceed with contacting the area cities to see if anyone would object to Mayor Burroughs serving as the alternate. I35 widening –Nelson stated that the southern portion of the project from I-635 to George Bush and up to Hickory Creek had been cleared by the environmental study. The northern section from Swisher Road to Highway 380 had not yet received environmental clearance. That should st be received by April 1. TxDOT had issued a Request for Quote to see what type of responses they could receive regarding the project. DCTA/City joint fleet maintenance facility – the Federal Transportation Authority had expressed a concern about the project time line. The facility DCTA planned for the Teasley area and southeast Denton was near the end of the design. They received grant money for a portion of the City of Denton City Council Minutes January 31, 2011 Page 13 project. FTA was concern if the project was constructed on city property and there was, at some point in the future, a desire to discontinue the agreement how would the funds be paid back to th the FTA. If the project built 6 bays and only 5 were used by DCTA, the FTA indicated the 6 bay could not be used by the City. Incidental use by the city would not be allowed. DCTA was now thinking about moving forward with their own facility. The Landfill also wanted their facility back from DCTA and returned to Solid Waste by July of 2012. The joint maintenance agreement would not be completed. Council Member Roden asked if a new DCTA facility would have to have city approval. Mark Cunningham, Director of Planning and Development stated that the site was zoned correctly but would have to go through the permitting process. Downtown shuttle – there was some desire by Council to have a downtown circulator route around the Square to the Transit Center which would be a hop-on/hop-off service. Recently DCTA had changed some frequencies for service around the Square and there was no signature service from the Square. In 2011 DCTA presented a plan to the Mobility Committee for a circulator route. Hours of operation were proposed for Friday 3:00 pm to 11:30 pm and Saturday 11:00 am to 11:15 p.m. at a proposed cost of $95,000. Service for Monday through Thursday and weekend service would be in $100,000 range. SPAN was also contacted about providing service with an estimated cost of $117,000 as opposed to the $95,000 from DCTA. Complimentary ADA services would also have to be provided at a cost of $20,000. The City would also have to provide that service if it did the circulator route. Council Member Watts indicated that he would like to know how the Friday night service would be worked out with DCTA before considering this service. Mayor Burroughs felt that it could be an on-the-shelf item to take down when they were able to do it. Have the details worked out so it could be used when ready. A Train service – Nelson indicated that the DCTA had benchmarked weekend service to meet 50% of the weekday service. Council Member Watts asked how that benchmark was established. City Manager Campbell stated that DCTA had worked with the cities and had some discussion about the benchmarks but there never was an agreement regarding those benchmarks. DCTA went back to the Board and the Board adopted those benchmarks. Nelson stated that DCTA had collected data from July to the end of December and only on 3 of 4 weekends did Friday night service meet the threshold with ridership continuing to go down. Saturday service was much higher than anticipated. Friday night and Saturday service had always been viewed as a package service. The City’s figures indicated 95% when combined. There was some discussion at the DCTA Board meeting regarding efforts to market the service whether from the Chamber of Commerce, the city of Denton or merchants in the downtown area. The Board voted 7-2 to continue the pilot service until June of 2012. Some opponents of Friday service were in favor of midday service as currently there was no midday service. City of Denton City Council Minutes January 31, 2011 Page 14 City Manager Campbell presented information concerning inspection fees and the traffic signal at MedPark. Staff was still working with DCTA regarding the inspection fees. When the project started the inspection fees were discussed and at that time reduced the fees to 2.5% from the normal fee of 3.5%. The original estimated fee would have been $265,337. Based on the cost of the project at that time, that would have saved DCTA $106,000 in costs. During the course of the project DCTA paid $188,000, leaving a balance due of $76,000 which was invoiced to DCTA. In January, DCTA revised the unit costs downward and omitted some costs originally included in the agreement indicating that the balance they owed was $10,000. Staff reviewed the DCTA revised unit costs and added back the items omitted. By accepting DCTA’s revised unit costs and including the omitted items, the balance due would be $36,000. Traffic Signal at MedPark- Construction of the signal (not operable) was a requirement of DCTA as part of the project costs. The cost of the signal was about $250,000 but the contractor built it too tall to meet separation requirements with TMPA power lines and there was not enough clearance between the signal and the TMPA power line. Staff was working with DCTA to find a remedy and have determined that the clearance would have to be expanded and change out the poles for shorter ones. Additional poles would also have to be purchased for storage if needed. Cost for the modification to DCTA was unknown at this time. The issue was that DCTA paid $250,000 for the signal and would have to pay all costs for remediation of the problem. The City had capital funds that could be paid to DCTA in an amount up to $165,000 as a contribution to the cost of the signal. Funds came from another developer who paid funds to the City. The City could either use it to contribute to the signal costs or return it to the developer. Scenarios to consider were (1) the City pay DCTA $165,000 as a contribution to the signal, (2) DCTA pay the City $36,265 in final Inspection fees and (3) DCTA nets $128,735 to apply to the construction of the signal, use in operating budget, put in a working capital reserve fund for Positive Train Control or for any other purpose. Campbell indicated that unless Council had a problem, staff would proceed with discussions with DCTA. Consensus of the Council was to continue with the negotiations. With no further business, the meeting was adjourned at 3:40 p.m. _________________________ MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS __________________________ JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON CITY COUNCIL MINUTES February 6, 2012 After determining that a quorum was present, the City Council of the City of Denton, Texas convened in a Special Called Work Session on Monday, February 6, 2012 at 11:30 a.m. in the Council Work Session Room. PRESENT: Council Member Watts, Council Member Gregory, Council Member King, Council Member Engelbrecht, Council Member Roden and Mayor Burroughs ABSENT: Mayor Pro Tem Kamp 1. Receive a report and hold a discussion with Library staff regarding, but not limited to Library programs, services and project updates. Eva Poole, Director of Libraries, stated that the Library Management Team anticipated changes in how the public accessed information. She stated that they would be presenting information on new programs and services at the libraries including e-books, e-readers, a smart phone application and new programming efforts. Kimberly Wells, North Branch Library Manager, stated that new technology resulted in library services for e-books. She presented information on the number of e-books checked out over the past year and the number of audio books and e-books on hand at the libraries. She showed how to find the information on the website. Downloading from the library provided instant access, customer service from a librarian, no late fees, ability to change font size for easier reading, and checkout of up to 10 books at a time. Council Member Roden asked about the cost of e-books as opposed to hardbacks. Wells stated that it about the same price. Terri Gibbs, Emily Fowler Central Library Manager presented an update on the library’s customer focused services. Classes were available for e-readers that included topics of how to buy, what to do with it after receiving one, Overdrive instructions, and e-reader covers. The libraries also served the underserved with programs in adult literacy, homebound services, English conversation classes, beginner technology classes and adult book adventures. Partnership building was done with various organizations such as Vita for tax assistance; DISD for ELS and GED; Texas AgriLIFE Extension for senior programming; Library Larry's Big Day featuring city departments, county offices, universities and other local attractions. With all of these new programs, the standard favorites were still provided such as the summer reading club, preschool classes, Adventure Club, special programs that stressed science, annual contests for teens, crafting classes and book clubs. Stacy Sizemore, South Branch Library Manager, presented information on how to take the library with you. Patrons were now able to access the catalog and download e-books and audio books from one application. The phone app provided access to the library’s events calendar, social media sites, and Book Look which worked with the camera in the mobile device to scan a barcode to see if the library had it on file. Mayor Burroughs asked about the monitoring of blogs and whether the blogger had to be identified. He felt there was a balance between expression and responsible expression. City of Denton City Council Minutes February 6, 2012 Page 2 Sizemore stated that there was a staff person who managed the web blog and looked at the comments before being posted. Council Member Gregory stated that there was no way to identify the blogger. Sizemore stated that was correct. Poole presented information on the FRID Project, Radio Frequency Identification. The five components of the system included tags, a station, a reader, workstations and a detection system. She provided information on how the system worked. The advantages of this system were real- time automatic check-in, it streamlined work flow, reduced handling time and help with inventory. She reviewed the project timeline for branch closings in order to tag all of the items. Branches would be closed two days for the project. Mayor Burroughs asked if with this system would allow employee hours be used in other areas. Poole stated that they were working with limited staff so it would help with the amount of materials circulating each day. Council Member Roden questioned if the detection location of a book was only in the library area. Poole stated that it only worked within the library. 2. Receive an update, hold a discussion and give staff direction regarding supplemental street funding. PS Arora, DRC Engineering Administrator, stated that in December staff presented a report to Council on supplemental street funding options. During that discussion, several questions and clarification issues were raised by Council. Staff had prepared a response to each of the items and; in addition, staff did an analysis of all building permits going back three fiscal years. For each permit, staff calculated a road impact fee assuming a $1,500 and $2,000 single family equivalent. He reviewed the impact fee calculation spreadsheet calculating the fees for the past three years based on the building permits. Staff then took that information and compared exactions versus road impact fees from 1998 to current. Council Member Gregory asked about the time limit to spend aid-to-construction contributions. Arora stated that after ten years it had to go back to the developer. Council Member Watts asked if multi-family was based on unit number or bedroom number. Arora stated that unit number was used. Council Member Watts asked if the plat determined what system would be used for determining the fee. Arora replied correct. City of Denton City Council Minutes February 6, 2012 Page 3 Council Member Watts asked if a water line was replaced without upsizing it, would it be an impact fee project. Arora stated that the impact fee could only be charged when adding capacity. It could not be used just for infrastructure Council Member Watts stated that a road impact fee was based not on increasing the capacity of roads but was aimed more towards reconstruction. He was having trouble differentiating between new development and repairing/reconstructing current roads. Arora stated that impact fees applied only for adding capacity to accommodate growth such as intersection improvements, signal lights, and turn lanes. Council discussed street capacity and road impact fee versus construction. Road Impact Fee Calculation results – Arora stated that the analysis results showed that the City could have collected approximately $4.4 million more for road improvements in the last 3 fiscal years with the assumed impact fee of $1,500 per SFE, than was assessed using the current Denton Development Code exactions. For the assumed $2,000 per SFE impact fee, the difference would be $6.8 million. Infill/Downtown Area – This issue seemed to be the most significant issue raised by Council. Through the adopted impact fee ordinance, Council would have the ability to control this via policy. There were three possible options: (1) Create a "no fee/reduced fee" service area. This would require carving out a roadway service area for downtown or infill areas where no capacity or minimal capacity improvements were identified within the road impact fee CIP. (2) Create a clear policy for fee reductions. For projects that met some certain set of criteria established via the road impact fee ordinance, the impact fee collection rate would be discounted. Encourage a certain development type that met a certain threshold for level of investment, type of development and number of jobs. (3) Create a hybrid approach with a combination of no fee areas and policies for fee reductions. Change of Use Permits/Redevelopment – State law allowed for the assessment and collection of impact fees for change of use. These required administrative time to calculate proportionality and created a lot of pushback from local developers. Fort Worth was exploring a change where all change of use permits were exempt except where there was a major change in intensity. Staff would need support from the City Attorney on this issue as it related to some equal protection issues. Minimum Impact Fee/Size of Development – this issue related to the question of minimum size of development to which a road impact fee was applied. Staff would recommend against it as it could create some equity issues. A small development would just have a much smaller impact fee; however, the issue of equal protection issues could be of concern when developments were treated differently without a basis to do so. City of Denton City Council Minutes February 6, 2012 Page 4 Right-Of-Way Dedication Issue/Credits - Assuming that right-of-way acquisition costs were included in the impact fee CIP, the dedication would still be required and credit would be given to the developer against impact fees for the dedication. Capacity versus Pavement Conditions – The impact fee statute required the impact fee to handle capacity issues only. More fees could not be charged based on the type of vehicle traffic and the weight via the impact fee. The costs for the roadways were based on the impact fee master plan and construction standards, so any additional design criteria to accommodate heavy vehicles were figured into the fee in this manner. Credit for Internal Capture/TOD related land uses – The impact fee could be reduced for projects that via their design or their location reduced the amount of vehicular traffic. If the traffic study showed reduced traffic generation, then impact fee collection rate would be reduced in accordance with the reduction in trips. Land Use/Transportation Connection Discount – Arora reviewed the ordinance Fort Worth used for this issue. A 5-9% trip capture would result in a 5% impact fee reduction; a 10-14% trip capture would result in a 10% impact fee reduction and a 15% or greater trip capture would result in a 15% impact fee reduction. Economic development for industrial Area – There would be a need to write a clear section in the road impact fee ordinance on how a development would qualify for a fee reduction. Assessment versus Collection – Impact fees were assessed at the time of final plat, but collected at the time of building permit. Fees could not be collected on property platted prior to the Impact Fee Ordinance adoption. Information was presented on the current Denton Development Code requirements versus the impact fee requirements. Mayor Pro Tem Kamp arrived at the meeting. Options for the fee included (1) continue to implement the current DDC embedded transportation exactions, (2) direct staff to bring additional information on implementation of road impact fees, or (3) direct staff to proceed on the implementation of the road impact fees. Staff was recommending proceeding on the implementation of the road impact fees. Council Member Engelbrecht asked how the streets to be included would be determined. Arora stated that the streets would be identified ahead of time and approved in the service area with costs of improvements. Mayor Burroughs noted that a listing of projects would help determine on how to proceed. Arora stated that staff would put a few sample projects on a spreadsheet and determine the impact fee in each category. Mayor Burroughs stated that it was his understanding that this would be more equitable than currently was being used. It was critical to know the exceptions. He requested a comparison among competitive cities of all of the impact fees. City of Denton City Council Minutes February 6, 2012 Page 5 Council Member Engelbrecht suggested having the legal definitions completed to have those available to include in the calculations. 3. Receive a report, hold a discussion, and give staff direction regarding a Street Improvement Bond Program. Howard Martin, Assistant City Manager, stated that Council had already seen most of this presentation at the Council Planning Session. He had included information on a 2012 bond election schedule. Appointments to the bond committee needed to be completed as soon as possible. Mayor Burroughs asked about the number of people on the committee. Consensus of Council was to appoint three people per council person. Council Member Roden suggested a geographically diversified panel and to have members from each council district. Mayor Burroughs felt a general goal would be to nominate people from the single member districts and to get the names to Council as soon as possible with their respective districts so any gaps could be filled in. Council Member Engelbrecht stated that he would also want some community organizational representation such as a business aspect, public transportation or the walking community. He suggested two representatives from a district and one from a different aspect. With no further business, the meeting was adjourned at 1:52 p.m. ____________________________ MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS _____________________________ JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON CITY COUNCIL MINUTES February 7, 2012 After determining that a quorum was present, the City Council convened in a Work Session on Tuesday, February 7, 2012 at 3:00 p.m. in the Council Work Session Room at City Hall. PRESENT: Council Member King, Council Member Watts, Council Member Gregory, Council Member Engelbrecht, Council Member Roden, Mayor Pro Tem Kamp, Mayor Burroughs. ABSENT: None 1.Citizen Comments on Consent Agenda Items There were no citizen comments on Consent Agenda Items. 2.Requests for clarification of agenda items listed on the agenda for February 7, 2012. Council Member Gregory asked about Consent Agenda Item E. He noted that 4300 trash carts were being purchased while over 12000 recycling carts were being purchased. He questioned the reason for more recycling carts. Vance Kemler, Director of Solid Waste, stated that the useful life of the recycling carts was about 10 years and the 10 years was just about up. Council Member Roden asked about Consent Agenda Item A and whether voters will be required to vote in the district where they live. Jennifer Walters, City Secretary, replied yes that even though it was an at-large election, voters on Election Day would still have to vote in their districts. Council Member Roden asked for additional education for voters with new districts and the ID requirements. Walters replied that staff was already working on the notices. 3.Receive a report, hold a discussion and give staff direction regarding an Interlocal Cooperation Agreement between the City of Denton and Denton County for Ambulance and Fire Protection Services. Ross Chadwick, Fire Chief, stated that there were two action items on Consent Agenda regarding fire and ambulance services. He reviewed the funding from 2008 to 2012. He stated that over the years the Council provided $10,000 in “readiness funding” which was divided among the various entities. It was anticipated that there would be thirty calls for fire services for a funding of $13,500. In terms of ambulance funding, the County provided funding according to population, EMS ambulance runs and rural square miles. He provided information on funding in those areas. The County funding to Denton would be $125,166.57 which was a 4.4% increase from last year. He noted that on the EMS side, the City was subsidizing the cost of providing the services. City of Denton City Council Minutes February 7, 2012 Page 2 4.Receive an update, hold a discussion, and give staff direction concerning the final draft of the Phase II Sustainability Plan. Katherine Barnett, Sustainability and Special Projects Administrator, presented an overview of the project and introduced the members of the consulting team from Camp, Dresser and McKee. Amelia Pellegrin presented a recap of the project. She indicated that the purpose of Phase II was to develop a sustainability plan for the city of Denton. The plan organization of focus areas, goals, strategies and actions was presented. She demonstrated the layout of each page that showed strategies and actions, and a snapshot guide. Key performance indicators were done for each of the focus areas. The plan would be evaluated and updated on a regular basis with strategies and actions that might shift given different priorities, funding changes, staff changes, etc. She indicated that measuring and communicating progress were very important to the success of the plan. A tracking tool was under development with the conceptual area completed. Public communication was also a large portion of the plan. They would be creating a sustainable Denton scorecard to rate the various areas. It was anticipated that the plan would be adopted at st the February 21 council meeting. Mayor Burroughs asked how this plan would marry into the Denton plan review. Barnett stated that several items went back to the Denton plan review and they were waiting to get information from Planning before completing them. Kenneth Banks, Environmental Services and Sustainability Director, stated that the request for proposal was written to incorporate the sustainability plan into the rewrite of the Denton Plan. Mayor Burroughs stated that he did not see any wording in the document about limiting sprawl or dissuading sprawl. Banks stated that the language might not be that specific but the topic was mentioned. Mayor Burroughs requested that a statement regarding sprawl be incorporated. Council Member King noted that there was not a lot of suggestion regarding solar power and asked if it was because it was too expensive to have individual homes using that. Lisa Lemons, Key Accounts, Energy Efficiency and Sustainability Manager, stated that the City currently had a healthy rebate up to $15,000 for any solar installation for home or small business. Council Member Roden agreed with the comments by the Mayor regarding sprawl. He suggested that the land use section might be a good place to have it located. He suggested maintaining an ongoing citizen committee regarding sustainability. Barnett stated that the plan suggested creating a sustainability committee. Council Member Roden noted that there was no link on the website for this plan. He suggested st putting it on the website prior to February 21 for citizens to look at. City of Denton City Council Minutes February 7, 2012 Page 3 Barnett stated that staff wanted to present the plan to Council before putting on the website. Council Member Gregory stated that page 6 of the plan talked about a Denton score card. He questioned who would be responsible for that score card and how the progress would be monitored. Barnett stated that there would be benchmarks for the majority of the items. Council Member Gregory asked who would track the items. Barnett stated that there would be an interdepartmental team to track the information. st Council Member Gregory stated that at the February 21 Council meeting, Council was scheduled to consider the Sustainability Plan and a bike plan supplement to the Mobility Plan. He felt there was still a need to address the area of education of motorists, pedestrians and cyclists on how to share the road. He questioned if the education element fit more in the Sustainability Plan or the Mobility Plan. Barnett stated that it would be a collaborative effort between the two teams working on the two plans. 5.Receive a report, hold a discussion and give staff direction on the proposed revisions to Denton's Water Conservation and Drought Contingency Plan. Tim Fisher, Water Division Manager, presented information on probable water sales. Dallas had been approached by other entities to purchase water. Water sales, assuming drought conditions continued as forecasted, might require Dallas to implement stronger drought measures such as Stages 2-4 and sales of water may also change DWU’s budget implications. Proposed changes in Denton’s plan included irrigation restrictions. Those would include mandatory day-of-week watering starting in Stage 1. Two days a week in Stage 1 would be allowed, 1 day a week in Stage 2 and 1 day a week in Stage 3 which would be by hand only and no automatic or hose-end sprinklers. There would be no irrigation allowed in Stage 4. Enforcement would start in Stage 1 instead of Stage 3. He reviewed the proposed fee and fine schedule. Mayor Burroughs asked if the fines would be on an annual basis. Fisher replied correct. Mayor Burroughs suggested looking that the El Paso plan. He believed the fee was assessed on the second offence but fines were not going to Municipal Court until the fourth offense. Council Member Watts asked how violators would be located and who would keep track of the violations. City of Denton City Council Minutes February 7, 2012 Page 4 Fisher stated that it would be a balance between city resources and citizen involvement. Council Member Watts questioned if violations in other stages should be larger than in Stage 1. Fisher stated that they were dealing with supply issues and conditions ramped up gradually. The language could be such as to be flexible in that area. Council Member Engelbrecht asked what happened to the fine money. He suggested using it for educational purposes. Fisher stated that some of the money could be earmarked for those types of programs. Council Member Watts asked about a commercial buffer. Fisher stated that there was no way to implement that provision at this time without a major overhaul of the billing system. He noted that golf courses were more aligned with other irrigators as well as city parks aligned with other irrigators. Foundation watering was more restricted. Mayor Burroughs felt that a lot of this was based on the circumstances and there would be a need to play the fines by ear and adjust as it went along. He could see a tiered structure in the future as the situation progressed. Fisher stated that most of the provisions were not mandated but were empowered to the Director. 6.Receive a report, hold a discussion, and give staff direction regarding a resolution created by the City of Denton Historic Landmark Commission. City Manager Campbell stated that this item was placed on the agenda for Council to give direction on how they wanted to proceed. Recently the Council held a joint meeting with TWU and discussed issues such as opening the lines of communication between TWU and the City in regards to a growth plan. At the time, the City’s interest was to encourage more dialogs, sensitive to TWU's need for expansion and growth and the sensitivity of the needs of the neighborhood. There was reluctance at that time on Council to not appear to direct policy decisions for the University. The Historic Landmark Commission passed a resolution giving a clear indication of what it wanted TWU to do with regards to growth and acquisition and/or demolition of houses in the neighborhood. It was unusual for an advisory board to pass such a resolution and if it was going to be pursued, Council should give direction on the wording, etc. Staff needed direction on whether the proposed resolution accurately reflected direction of Council. Council had the ability to change or adopt the resolution. Mayor Burroughs felt that there was a need to discuss this procedure going forward. He was not in favor of a policy done on the board/commission level without Council approval. The Historic Landmark Commission could provide suggestions to Council on a policy of preservation of homes or a neighborhood or what they might like to do on how to look at policies for historic City of Denton City Council Minutes February 7, 2012 Page 5 sites, environmental areas, green spaces, etc. They could provide an affirmative measure for Council to consider and Council then reach out to TWU. Council Member Roden asked if there was a process mechanism by which a city board or commission could suggest a policy to Council. In this case there did not seem to be one and questioned how to have Council address the issue. City Attorney Burgess stated that this was a policy issue for Council to consider. In this instance, the charge to this committee did not provide them the authority. There was a need to determine a mechanism on how to do this in terms of recommendations to Council. Mayor Burroughs suggested fashioning some kind of statement in a way that it would function as a general charge to make a recommendation to Council. City Attorney Burgess stated that staff could review how it was handled in the Board and Commission Handbook and fashion it in that manner. Council Member Gregory asked that if a board or commission passed a resolution was it appropriate for those reading or receiving the resolution that it was representing anything other than the thoughts of that board or commission. In this instance the Historic Landmark Commission was not trying to represent the Council. Mayor Burroughs noted that was part of the confusion and what would the third party think. The board or commission charge, at this point, was not to communicate with third parties. The charge was to communicate with the Council. If a board or commission saw a policy need, it should go to Council and not go to an outside third party. City Manager Campbell stated that every board and commission had a staff liaison. Procedures could be drafted in a specific way to make recommendations to Council. There always was an avenue to express to the staff liaison to have Council consider an item. Council could also assign something to a board or commission to make a recommendation as a policy statement on “x”. That recommendation could then be approved, changed or not passed by Council. In this case, Council could consider the recommendation from the Historic Landmark Commission or amend it as desired. Council Member Watts questioned that if a neighborhood acquired a historical conservation status around a university and the university had expansion plans, did the historical designation bind the university from the plans. City Attorney Burgess stated that it was her understanding that such a designation was a city designation and was not binding on a state institution in regards to taking of the property. John Knight, Deputy City Attorney, stated that it also depended on the nature of the designation. Some were on the federal level and others merely had a plaque on the property. Council Member Watts felt that the Historic Landmark Commission was deliberating about this issue at the same time Council was meeting with TWU. His hope was that, based on the Council’s meeting and different direction of communication with the Historic Landmark City of Denton City Council Minutes February 7, 2012 Page 6 Commission, that something opposite of what council wanted was done. It was good to have a committee charged to preserve and instead of being reactive, be proactive on some issues. City Manager Campbell stated that the Historic Landmark Commission had asked that the resolution be forwarded to Dr. Ann Stewart. If the resolution did not reflect the direction by Council, it should be reworded consistent with Council aspects or not proceed at all. His suggestion was to have it redrafted and adopted by Council. Council Member Watts stated that he would be more comfortable if a TWU official had a meeting with the Historic Landmark Commission outside the realm of the resolution in terms of their plans. It was hard to support the wording based on who was involved and who created it. Mayor Pro Tem Kamp stated that she appreciated the work of the boards and commissions but the bottom line was that Council set policy. She felt the resolution was setting some sort of policy. She agreed that it should not be sent to TWU before the Council looked at it. Mayor Burroughs stated that he did not have a problem with the essential elements but did have a problem with some of the wording. He felt it would be appropriate at the next meeting with TWU to identify this as a discussion item along with general thoughts of goals and objectives of preservation of neighborhoods. Ask TWU to be sensitive to the issue of neighborhood preservation but not make it a policy statement. City Manager Campbell stated that staff could work on a wording change in the Handbook for all boards and commissions. He felt that the next meeting with TWU would be on the staff level to work on issues rather than the Cabinet and Council. This could be a topic of discussion at that next meeting. Council Member Roden asked if it would be appropriate to have a discussion between the Historic Landmark Commission and Council on this issue. The issue was not going to die whether or not there was a resolution. Council Member Gregory suggested using one of the first of the month luncheons to meet with the Historic Landmark commission. He agreed with the thought of taking an initiative but also felt it was more appropriate to have a resolution coming from Council. Following the completion of the Work Session the Council convened into a Closed Session to discuss the following: 1. Closed Meeting: A.Certain Public Power Utilities: Competitive Matters - Under Texas Government Code, Section 551.086; Consultation with Attorneys - Under Texas Government Code, Section 551.071. 1.Receive a report and a presentation from Denton Municipal Electric staff regarding certain public power competitive and financial matters related to the Request for Proposals No. 4859 issued by the City soliciting proposals for a solar-generated energy facility or facilities for the City of Denton, City of Denton City Council Minutes February 7, 2012 Page 7 Texas; discuss, deliberate and provide staff with direction regarding such matters. Consultation with the City's attorneys regarding legal advice regarding such matters. A public discussion of this legal matter would conflict with the duty of the City's Attorneys to the City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas. 2.Receive a report from Denton Municipal Electric ("DME") staff regarding a public power competitive and financial matter concerning the planning, construction, re-conductoring, and financial recourse available to DME regarding the TMPA 138 kV transmission line extending from Denton West to Teasley Substation, and from Denton West to Denton North Substation; receive a consultation from the City's attorneys regarding legal issues involved respecting these matters, where a public discussion would conflict with the duty of the City's attorneys to the City Council under the Texas Rules of Professional Conduct of the State Bar of Texas. Discuss, deliberate, and provide Staff with direction regarding same. B.Certain Public Power Utilities: Competitive Matters - Under Texas Government Code, Section 551.086. 1.Receive a briefing and information pertaining to certain competitive public power and financial issues regarding Texas Municipal Power Agency ("TMPA") on matters including, without limitation: present and future plant operations issues, plant and system expenses, maintenance issues, performance issues, financial issues, reliability issues, planning issues, and any related issues concerning the City's interest in, and its business relationship with the Texas Municipal Power Agency; and discuss, deliberate, and provide Staff with direction regarding such matters. C.Consultation with Attorneys - Under Texas Government Code, Section 552.071; Deliberations regarding Real Property - Under Texas Government Code, Section 552.072. 1.Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the potential purchase of a 2.0 acre tract, more or less, located in the Hiram Sisco Survey, Abstract No. 1184, Denton, County, Texas, and located generally at the corner of McKinney Street and Oakland Street, City of Denton, Texas. 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 administrative proceeding or potential litigation. 2. Consult with and provide direction to City's attorneys regarding legal City of Denton City Council Minutes February 7, 2012 Page 8 issues and strategies associated with Phase I and proposed Phase II Gas Well Ordinance regulation of gas well drilling and production within the City Limits and the extraterritorial jurisdiction, including Constitutional limitations, statutory limitations upon municipal regulatory authority, moratorium on drilling and production, and statutory preemption of municipal regulatory authority. 1. PLEDGE OF ALLEGIANCE The Council and members of the audience recited the Pledge of Allegiance to the U. S. and Texas flags. 2.PROCLAMATIONS/PRESENTATIONS A. Proclamations/Awards 1. Denton Family Unity Week Mayor Burroughs presented the proclamation for Denton Family Unity Week 2. National Apartment Careers Month Mayor Burroughs presented the proclamation for National Apartment Careers Month 3.CONSENT AGENDA Council Member King motioned, Mayor Pro Tem Kamp seconded to approve the Consent Agenda and accompanying ordinances and resolutions. On roll call vote: Council Member King “aye”, Council Member Watts “aye”, Council Member Gregory “aye”, Council Member Engelbrecht “aye”, Council Member Roden “aye”, Mayor Pro Tem Kamp “aye”, and Mayor Burroughs “aye” . Motion carried unanimously. Ordinance No. 2012-015 A. Consider adoption of an ordinance ordering an election to be held in the city of Denton, Texas, on May 12, 2012, and if a runoff election is required, on June 23, 2012, for the purpose of electing Council Members to Places 5 and 6 and electing a Mayor to Place 7 of the City Council of the City of Denton, Texas; prescribing the time and manner of the conduct of the election to be in accordance with an agreement with the Elections Administrator of Denton County; prescribing the form of the ballot; providing for notice; providing for publication of notice of this election; providing a severability clause; providing an open meetings clause; and providing for an effective date. Ordinance No. 2012-016 B. Consider adoption of an ordinance of the City of Denton, Texas approving and authorizing the City Manager to execute an Interlocal Cooperation Agreement between the City of Denton and Denton County for Ambulance Services; and declaring an effective date. City of Denton City Council Minutes February 7, 2012 Page 9 Ordinance No. 2012-017 C. Consider adoption of an ordinance of the City of Denton, Texas approving and authorizing the City Manager to execute an Interlocal Cooperation Agreement between the City of Denton and Denton County for Fire Protection Services; and declaring an effective date. Ordinance No. 2012-018 D. 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, Houston Galveston Area Council of Governments (H-GAC) and Texas Association of School Boards (TASB) for the acquisition of eleven vehicles, ten trucks, and two pieces of equipment for the City of Denton Utility Departments; and providing an effective date (File 4891-Purchase of Vehicles and Equipment for City of Denton Utility Departments awarded to numerous vendors for a total award of $2,582,948.96). The Public Utilities Board recommends approval (5-0). Ordinance No. 2012-019 E. 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 Residential Refuse and Recycling Carts for the City of Denton Solid Waste Division; and providing an effective date (File 4845-Purchase of Refuse and Recycling Carts awarded to Rehrig Pacific Company in the amount of $791,322.72). The Public Utilities Board recommends approval (7-0). Ordinance No. 2012-020 F. Consider adoption of an ordinance authorizing the City Manager to execute a three year Professional Services Agreement (PSA) with Coleman and Associates Land Surveying for Ground Surveying Services for the City of Denton Landfill, and providing for an effective date (File 4858-Ground Surveying Services for City of Denton Landfill awarded to Coleman and Associates Land Surveying in an amount not to exceed $350,000). The Public Utilities Board recommends approval (6-1). Ordinance No. 2012-021 G. Consider adoption of an ordinance accepting bids and awarding a public works contract for the construction of Pedestrian Trails and Sidewalk Improvements at the City of Denton Quakertown Park; providing for the expenditure of funds therefor; and providing an effective date (Bid 4885-awarded to JDC Construction Company in the amount of $145,776). Ordinance No .2012-022 H. Consider adoption of an ordinance accepting competitive proposals and awarding a contract for Virtual Desktop Infrastructure expansion for the City of Denton Technology Services Division; providing for the expenditure of funds therefor; and providing an effective date (RFP 4819-Contract for Virtual Desktop Infrastructure Expansion awarded to INX, LLC. in the amount of $786,271.61, inclusive of interest charges over the three year lease period). Ordinance No. 2012-023 City of Denton City Council Minutes February 7, 2012 Page 10 I. Consider adoption of an ordinance accepting competitive bids by way of an Interlocal Agreement with Tarrant County and awarding a contract for the purchase of gasoline and diesel fuel; providing for the expenditure of funds therefor; and providing an effective date (File 4492-Interlocal Agreement for Gasoline and Diesel Fuel with Tarrant County, contract awarded to Douglass Distributing Company, in the annual estimated amount of $5,300,000). ITEMS FOR INDIVIDUAL CONSIDERATION 4. A. Consider nominations/appointments to the City's boards and commissions: 1. Denton County Housing Finance Corporation Council did not have any nominations at this time. Ordinance No. 2012-024 B. Consider adoption of an ordinance declaring a 120-day moratorium on the acceptance or processing of certain applications for permits to authorize oil and gas exploration and production activities and other mineral exploration and production activities (collectively, "mineral activities") within the corporate limits of the City of Denton, Texas; directing the City staff to complete a comprehensive review of the City's ordinance governing the mineral activities and procedures related thereto and to propose revisions thereto; providing for a method of repeal of this moratorium; providing a procedure for a variance from this moratorium; providing a cumulative clause; providing a severability clause; and providing an effective date. Mark Cunningham, Director of Planning and Development, stated that Council had requested an ordinance declaring a moratorium on the acceptance or processing of certain applications for permits authorizing oil and gas exploration and production in the city. The proposed ordinance imposed a 120-day moratorium on certain applications in order to preserve the status quo while a review was on-going, and directed staff to complete any studies and analyses and make recommendations to the Council within this period of time. The ordinance also created a variance process for any property owner who believed imposition of the moratorium would create a unique and undue hardship upon his or her property or business. Council Member Gregory asked what might allow the moratorium to end sooner. Cunningham stated that would be a Council decision. Council Member Gregory stated that something that might trigger that would be the passage of Phase II of the new gas well ordinance. He asked if the moratorium could be extended if the new gas well ordinance was not completed within 120 days. He also questioned the status of a specific use permit that was filed but not approved. Cunningham stated if there was an application such as a specific use permit, site plan, etc that had been submitted prior to the effective date of the moratorium, that application would continue to be processed per Section 2 of the ordinance. The ordinance allowed that if there was an City of Denton City Council Minutes February 7, 2012 Page 11 approved specific use permit, approved site plan or development plan that had recognized gas wells on them but did not have a permit, those approved documents would be reviewed if a permit were applied for. There were two exemptions: a drilling permit application already filed pursuant to an already approved specific use permit, site plan, development plan or development plat. Then there were the applications already submitted or a specific use permit, site plan, development plan, etc. that was already in the process and submitted prior to date of moratorium. City Attorney Burgess stated that was her understanding that it was Council's intent that in light of the fact that the conditions attached to a specific use permit might be impacted with the new ordinance during the study process, that the moratorium would stay the processing of specific use permits filed. She felt it was the intent of the Council to allow permits associated with already approved specific use permits to go ahead and proceed through the process so as to not disturb those activities Council Member Watts asked what had been filed since the last public meeting. Cunningham stated that at the time of the Council Planning Session there had been four applications. Since that time up through today, there were eleven additional applications for a total of fifteen applications. Council Member Watts asked for a breakdown of the applications. Darren Groth, Gas Well Administrator, stated that there had been eleven applications since January 31, 2012. There were four site plans, three gas well development plats and three gas well permits. One specific use permit had been submitted and withdrawn. These ten would continue to be processed per Section Two of the proposed ordinance. The specific use permit would not have been processed. Council Member Watts stated that there were two exceptions listed. One was permits only and there was an exception to permits in the condition that if the City had approved a specific use permit, site plan, development plan or other plat in the past, they would be processed. City Attorney Burgess stated that those would be continued to be processed with those permits. Council Member Watts stated that the second exception was permits relating to the drilling of wells in conjunction with injection or storage of natural gas as personal property. In Section Two the moratorium would apply to all oil and gas well developments that do not a specific use permit, site plan, development plan or plat. In the eleven mentioned, there three gas well permits related to an application already in progress. But the three gas well development plats and the four site plans would not be allowed to continue. City Attorney Burgess stated that was correct. Council Member Watts stated that the development plats would be stayed. City Attorney Burgess stated correct. City of Denton City Council Minutes February 7, 2012 Page 12 Council Member Watts stated that the exceptions only applied to permits and injection wells or gas with personal property. City Attorney Burgess stated that was correct. Council Member Roden asked staff to clarify the variance process to the moratorium. Cunningham stated that the requestor must provide (1) a description of the property proposed to be covered by the variance, (2) an explanation as to why the application of the moratorium to the applicant’s property would create an undue hardship, and (3) a description of any negative impacts created by the moratorium. The City Secretary would place the request for a variance on a City Council agenda for consideration at a public meeting. The applicant would receive written notice of the date of the proposed hearing. A notice would be published advising the general public of the time and place of the hearing on the City’s Internet website and on “EngageDenton.com”. Council Member Roden asked if this would be a public hearing. City Attorney Burgess replied correct. Council Member Gregory stated that the proposed moratorium carved out a few exceptions as a moratorium that froze everything would delay some activity that would take place anyway. Some activities were vested and the new rules and moratorium would not affect them City Attorney Burgess stated that the moratorium was limited in duration to 120 days. Because there was certain vesting issues that would apply, the ordinance was narrowed for the least impact and tried to narrow the application of the ordinance so as to not impact those that otherwise would be vested. The moratorium would apply to those issues where the study and information gathered could be valuable to the Council with the crafting of certain conditions on the specific use permits. Council Member Watts asked for the rational for the exceptions as they were additions after the agenda was posted. City Attorney Burgess stated that the first exception was for the applications for oil and gas well permits. That exception was an acknowledgement that the permit was filed and attended to a prior permit so that the applicant would be able to process under the existing law. The second exception dealt with applications for permits relating to the drilling of wells in conjunction with injection, production and/or storage of gas as personal property. The following individuals presented Speaker Cards: Naomi Meier, 1400 LaMirada, Denton, 76208 – in support Gilbert Horton, 777 Main Street, Fort Worth, 76102 - opposed Victor Eneh, 1222 Golden Hoof, Krum, 76249 – in favor and opposed Clinton McBride, 1400 N. Elm, Denton, 76201 – in support Candice Bernd, 412 ½ Fry Street, Denton, 76201 – in support Ike Shup, 500 Main, Suite 800, Fort Worth, 76102 – opposed City of Denton City Council Minutes February 7, 2012 Page 13 Council Member Gregory asked Mr. Shup if he was aware of a Gas Well Task Force meeting every Monday. Shup replied yes. Marcio DeSilva, 223 Fry Street #s, Denton, 76201 – in support The following individuals submitted Comment Cards: Mari Metzcar, 2417 Natchez Trace, Denton, 76210 – in support Karen DiVinney, 1820 West Oak, Denton, 76201 – in support Hatice Salih and Daniel Garza, 300 Northridge, Denton, 76201 – in support Christa Crowe, 3320 Dunes Street, Denton, 76209 – in support Pauline Raffestin, 2015 Bowling Green, Denton, 76201 – in support Lisa Allen, 609 Lafayette, Denton, 76205 – in support Rhonda Love, 1921 Hollyhill, Denton, 76205 – in support Andrea Schreiber, 308 Marietta, Denton, 76201 – in support Wendy Wharton, 1209 CR 1304, Bridgeport, 76426 – opposed Laura Anderson, 1208 CR, 1304 Bridgeport, 76426 - opposed Richard and Janelle Burch, 4478 Country Club Road, Denton, 76210 - opposed Additional speakers included: Phillip Sweet, 9713 Grandview, Denton - opposed Amber Briggle, 1315 Dartmouth, Denton, 76201 – in support Ben Kessler, 2228 Lookout Lane, Denton, 76207 – in support Sharon Wilson, 1121 Belvedere Drive, Allen, 75013 – in support Additional Comment Cards were received from: Patrice Lyke, 1109 Egan Street, Denton, 76201 – in support Heidi Barnberg, 1620 Meadow Oak, Denton, 76209 – in support Council Member Watts indicated that he was in favor of the moratorium but had a problem with the wording of the injection exception. A major concern of the citizens dealt with hydraulic fracking. Some of these wells did not require fracking. He suggested adding wording such as “which do not require hydraulic fracturing”. Mayor Burroughs suggested adding wording such as “that do not require fracking in conjunction with personal property”. Council Member Gregory stated that he was in agreement with the amended wording per Mayor Burroughs. Council Member Roden stated that “production” was not included in that clause. Council Member Watts replied correct. City of Denton City Council Minutes February 7, 2012 Page 14 Mayor Burroughs stated that he usually was not in favor of a moratorium but in this case, it had implications with pending changes in the regulations. Council Member Gregory motioned, Mayor Pro Tem Kamp seconded to adopt the ordinance with the amended wording. On roll call vote, Council Member King “aye”, Council Member Watts “aye”, Council Member Gregory “aye”, Council Member Engelbrecht “aye” , Council Member Roden “aye”, Mayor Pro Tem Kamp “aye” and Mayor Burroughs “aye”. Motion carried unanimously. Ordinance No. 2010-025 C. Consider adoption of an ordinance accepting competitive proposals and awarding a contract for tree trimming services for Denton Municipal Electric (DME); providing for the expenditure of funds therefor; and providing an effective date (RFP 4825-Electric Utility Line Tree Trimming Services awarded to ABC Professional Tree, Inc. in an amount not to exceed $2,000,000). The Public Utilities Board recommends approval (5-0). Phil Williams, General Manager – Denton Municipal Electric, presented information on the contract for ABC Tree Services. This service was vital for the reliability and safety of employees and was important for a utility. Council Member Roden asked how the aesthesis of trimming the trees would be addressed. Williams stated that the company would be required to have a certified utility tree arborist with the crew when they went out to do the trimming. The tree would be evaluated by type and whether it was a slow or fasting growing tree. The cutting would be shaped around the lines and the trees trained to go around the line. In some cases there may be an offer to take down the tree and plant another in different location. Council Member Roden asked about notification to property owners. Williams stated that the feeders that were going to be trimmed were identified and 3-4 weeks before the trimming, postcards were sent out to that area. Two weeks before door hangers and the City’s interactive voice system to was used to leave messages. The day of the trimming the workers knocked on doors to see if anyone was home who might want to watch how the trees were trimmed. David Kaplan, 300 Marietta, Denton, 76201 spoke in opposition to the contract. Council Member Roden asked if the company coordinated with the arborist on staff. Williams stated that the Urban Forester had reviewed the program and the contractor work and approved what they did. Mayor Burroughs noted that there used to be lots of complaints about tree trimming with a different contractor. There appeared to be a lot less complaints with this firm. City of Denton City Council Minutes February 7, 2012 Page 15 Council Member King motioned, Mayor Pro Tem Kamp seconded to adopt the ordinance. On roll call vote, Council Member King “aye”, Council Member Watts “aye”, Council Member Gregory “aye”, Council Member Engelbrecht “aye” , Council Member Roden “aye”, Mayor Pro Tem Kamp “aye” and Mayor Burroughs “aye”. Motion carried unanimously. CITIZEN REPORTS 5. A. Review of procedures for addressing the City Council. B. Receive citizen reports from the following: 1. Bob Clifton regarding Senate Bill 1230 - 82nd Legislature Regular Session. Mr. Clifton - spoke regarding Senate Bill 1230 - 82nd Legislature Regular Session and felt that the Mayor did not have the authority to send a letter to the State representatives. He was opposed to the legislation. CONCLUDING ITEMS 6. A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. th Mayor Pro Tem Kamp stated that on Friday, February 10 there would be a fundraiser for Our Daily Bread. B.Possible Continuation of Closed Meeting under Sections 551.071-551.086 of the Texas Open Meetings Act. Mayor Burroughs announced that Council would return to the Closed Session to continue with Items C and D as listed on the agenda. C.Consultation with Attorneys - Under Texas Government Code, Section 552.071; City of Denton City Council Minutes February 7, 2012 Page 16 Deliberations regarding Real Property - Under Texas Government Code, Section 552.072. 2.Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the value of a 2,174 square foot tract of land, more or less, located in Lot A, Block 1 of R.N.W. Addition, an addition to the City of Denton, Texas, recorded in Cabinet H, Page 338, Plat Records, Denton County, Texas (the "Property"). Consultation with the City's attorneys regarding legal issues associated with the value of the Property and the pending litigation matter styled "The State of Texas v. City of Denton, a Municipal Corporation", condemnation proceeding filed in the Probate Court of Denton County, Texas, Cause No. PR-2011-00827, 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 the referenced pending litigation. (Williamson) 3.Discuss, deliberate and receive information from staff and provide staff with direction pertaining to the potential purchase of four separate tracts of land, located in the Gideon Walker Survey, Abstract Number 1330, Denton, County, Texas, and located generally north of Treatment Plant Road along the east side of the Mayhill Road right of way. 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. (England) D. Consultation with Attorneys - Under Texas Government Code, Section 552.071. 1. Consult with the City's attorneys and provide them with direction concerning Texas Food Establishment Rules §229.170 involving Temporary Food establishments and the requirement of ceilings and outer openings of food preparation areas 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 administrative proceeding or potential litigation. C.Official Action on Closed Meeting Item(s) under Sections 551.071-551.086 of the Texas Open Meetings Act. There was no official action on Closed Session items. The Council returned to open session and with no further business, the meeting was adjourned. City of Denton City Council Minutes February 7, 2012 Page 17 _____________________________ MARK A. BURROUGHS MAYOR CITY OF DENTON, TEXAS _____________________________ JENNIFER WALTERS CITY SECRETARY CITY OF DENTON, TEXAS AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Utilities ACM: Howard Martin, 349-8232 ______________________________________________________________________________ SUBJECT Consider adoption of an ordinance abandoning and vacating a utility easement (herein so called) reserved by the City of Denton, Texas in (I) that certain Quitclaim, dated on or about January 16, 1979, from the City of Denton to W.D. Gaston, recorded in Volume 934, Page 669, Real Property Records, Denton County, Texas; and (II) that certain Quitclaim, dated on or about January 16, 1979, from the City of Denton to Eva Inez Giles, recorded in Volume 934, Page 667, Real Property Records, Denton County, Texas, said utility easement located in the E. Puchalski Survey, Abstract No. 996, Denton County, Texas; and declaring an effective date. BACKGROUND The developer and owner of the Crosswind Village development has made a formal request for the City of Denton to abandon its interest of two utility easements that encumbers its planned development. The development area is also known as Lot 1R, Block 5, Wattam Addition. The plat and the construction plans are under review by the Development Review Committee. The subject easements for abandonment were originally reserved by the City of Denton when the th public right-of-way of Beatty Street was abandoned on January 16, 1979. No public or private utilities are located within the easement abandonment areas and there are no future plans to utilize the easement areas for public utilities. The Development Review Committee has reviewed the abandonment request and recommends approval of the request. Staff performs an analysis on the request for easement abandonments as follows: Is the easement tract requested for abandonment considered “excess easement”? Does the easement tract requested for abandonment have a continued public use? Is it in the best interest of the general public to abandon the government’s rights in the subject abandonment tract? Would the granting of this request establish a precedent for easement abandonment for future requests? Staff findings on this analysis are as follows: 1.The requested easement abandonment tracts fit the criteria of “excess easement.” Excess easement is defined as: Property acquired or used by the City for easement subsequently declared excess (not needed for any public project, the continuation of operation and maintenance of public facilities, and/or no foreseeable utility application in the future). 2.The easement abandonment tract areas are not slated for utilization of any future public utilities. 3.The easement abandonments are in the public interest because the areas for the subject abandonments are no longer needed by the public and/or have not been utilized for the public. 4.These abandonments will not set precedent because the above three standards have been met. OPTIONS 1. Recommend approval of the Easement Abandonment. 2. Do not recommend approval. RECOMMENDATION Development Review Committee endorses approval of the Easement Abandonment. PRIOR ACTION/REVIEW (Council, Boards, Commissions) Development Review Committee February 27, 2012 – The Public Utility Board recommends approval (6-0). FISCAL INFORMATION Not applicable. BID INFORMATION Not applicable. EXHIBITS 1. Ordinance 2. Location Map 3. Exhibit 4. Final Plat – Crosswind Village Development / Wattam Addition Replat 5. PUB Minutes Respectfully submitted: Jimmy D. Coulter Director of Water/Wastewater Water Administration Prepared by: ____________________________________________ Mark A. Laird Right-of-way Agent Real Estate and Capital Support DENTON DOWNTOWN MULBERRY SYCAMORE PRAIRIE NTS Easement Abandonment Area EAGLE LOCATION MAP DRAFT MINUTES 1 PUBLIC UTILITIES BOARD 2 3February 27, 2012 4 5After determining that a quorum of the Public Utilities Board of the City of Denton, Texas is 6present, the Chair of the Public Utilities Board will thereafter convene into an open meeting on 7Monday, February 27, 2012 at 9:00 a.m. in the Service Center Training Room, City of Denton 8Service Center, 901-A Texas Street, Denton, Texas. 9 10Present: Chair Dick Smith, Vice Chair Bill Cheek, Randy Robinson, Phil Gallivan, 11John Baines and Leonard Herring 12 13Absent – Excused: Barbara Russell 14 15Ex Officio Members: George Campbell, City Manager; Howard Martin, ACM Utilities 16 OPEN MEETING 17 18 CONSENT AGENDA 19 20 213)Consider a recommendation of an adoption of an ordinance abandoning and vacating a public 22utility easement (herein so called) reserved by the City of Denton, Texas in (i) that certain 23Quitclaim, dated on or about January 16, 1979, from the City of Denton to W.D. Gaston, 24recorded in Volume 934, Page 669, Real Property Records, Denton County, Texas; and (ii) 25that certain Quitclaim, dated on or about January 16, 1979, from the City of Denton to Eva 26Inez Giles, recorded in Volume 934, Page 667, Real Property Records, Denton County, 27Texas, said public utility easement located in the E. Puchalski Survey, Abstract No. 996, 28Denton County, Texas; and declaring an effective date. 29 Motion to approve item 3 by Board Member Gallivan with a second from Board 30 Member Cheek. Vote 6-0. 31 32 33 Adjournment at 9:57 am AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Utilities ACM: Howard Martin, 349-8232 ______________________________________________________________________________ SUBJECT Consider adoption of an ordinance abandoning and vacating a portion of a drainage easement (herein so called) granted to the City of Denton, Texas pursuant to that certain drainage easement, accepted by the City of Denton, March 15, 2007, from D.R. Horton – Texas, Ltd., and recorded as Instrument No. 2007-30855, Real Property Records, Denton County, Texas, said drainage easement located in the William Roark Survey, Abstract No. 1087, Denton County, Texas; and declaring an effective date. BACKGROUND D.R. Horton – Texas, Ltd., owner and developer of the Meadows of Hickory Creek Development has made a formal request for the City of Denton to abandon a portion of it interest in a public drainage easement that encumbers five lots of its planned development. The requested abandonment area was designed as a transitional easement with temporary drainage improvements. The temporary drainage improvements allowed the planned development to be constructed in phases. As new phases are constructed permanent public improvements are made to address the developmental requirements. To address the specific issue of the subject drainage easement, D.R. Horton – Texas, Ltd., has made the necessary drainage improvements to the area. And the requested easement abandonment portion is no longer needed for public drainage. The public drainage improvements have been constructed and accepted by the City of Denton. The Development Review Committee has reviewed the abandonment request and recommends approval of the request. Staff performs an analysis on the request for easement abandonments as follows: Is the easement tract requested for abandonment considered “excess easement”? Does the easement tract requested for abandonment have a continued public use? Is it in the best interest of the general public to abandon the government’s rights in the subject abandonment tract? Would the granting of this request establish a precedent for easement abandonment for future requests? Staff findings on this analysis are as follows: 1.The requested easement abandonment tracts fit the criteria of “excess easement.” Excess easement is defined as: Property acquired or used by the City for easement subsequently declared excess (not needed for any public project, the continuation of operation and maintenance of public facilities, and/or no foreseeable utility application in the future). 2.The easement abandonment tract area, are not slated for utilization of any future public drainage. 3.The easement abandonments are in the public interest because the areas for the subject abandonments are no longer needed by the public and/or have not been utilized for the public. 4.These abandonments will not set precedent because the above three standards have been met. OPTIONS 1. Recommend approval of the Ordinance. 2. Do not recommend approval. RECOMMENDATION Staff recommends approval of the Ordinance. ESTIMATED PROJECT SCHEDULE Summer 2012 PRIOR ACTION/REVIEW (Council, Boards, Commissions) Development Review Committee FISCAL INFORMATION Not applicable. EXHIBITS 1. Ordinance 2. Location Map 3. Exhibit A 4. Final Plat – Meadows of Hickory Creek Addition, Phase 2 Respectfully submitted: Jimmy D. Coulter Director of Water/Wastewater Water Administration Prepared by: ____________________________________________ Mark A. Laird Right-of-way Agent Real Estate and Capital Support DENTON DOWNTOWN CONGRESS HICKORY SYCAMORE PRAIRIE MORSE FANNIN RICH NTS Easement Abandonment Area LOCATION MAP EXHIBIT “A” DRAINAGE EASEMENT ABANDONMENT METES & BOUNDS DESCRIPTION BEING a 0.811 acre tract of land located in the William Roark Survey, Abstract No. 1087, in the City of Denton, Denton County, Texas, being a portion of a Variable Width Drainage Easement, filed for record in County Clerk's Instrument No. 2007-30855, Official Public Records, Denton County, Texas, and being a portion of Meadows at Hickory Creek, Phase Two, an addition to the City of Denton, Denton County, Texas, according to the plat recorded in County Clerk’s Instrument No. 2011-151, said Official Public Records, also being a portion of a called 66.330 acre tract of land (Tract One), as described in the General Warranty Deed to D.R. Horton - Texas, a Texas limited partnership, filed for record in County Clerk's Instrument No. 2005- 144272, said Official Public Records, said 0.811 acre tract of land being more particularly described by metes & bounds as follows; COMMENCING at a 5/8 inch capped iron rod set stamped "Mycoskie McInnis" for the easternmost northeast corner of said Meadows at Hickory Creek, Phase Two, and being on the north right-of-way line of Stonecrop Trail, a 50 foot right-of-way; THENCE South 00 degrees 51 minutes 12 seconds East, along the east line of said Meadows at POINT OF BEGINNING; Hickory Creek, Phase 2, a distance of 7.54 feet, to the THENCE South 00 degrees 51 minutes 12 seconds East, continuing along said east line, a distance of 77.81 feet, to a 5/8 inch capped iron rod set stamped "Mycoskie McInnis", being at the beginning of a curve to the right having a radius of 945.00 feet, THENCE along said curve to the right, and in a southerly direction, and continuing along said east line, through a central angle of 00 degrees 15 minutes 15 seconds, an arc length of 4.19 feet, and having a long chord which bears South 00 degrees 43 minutes 34 seconds East, a chord length of 4.19 feet, to a point for corner; THENCE South 89 degrees 08 minutes 48 seconds West, over and across Lot 6, Block N, and Lots 8,7,6, & 5, Block K, of said Meadows at Hickory Creek, Phase 2, a distance of 430.65 feet, to a point for corner; THENCE North 00 degrees 51 minutes 12 seconds West, continuing over and across said Meadows at Hickory Creek, Phase 2, a distance of 82.00 feet, to a point for corner, from which a 5/8 inch capped iron rod set stamped "Mycoskie McInnis" for the southeast end of a corner clip at the intersection of said north right-of-way line, and the east right-of-way line of Loblolly Lane, a 50 foot right-of-way, bears North 70 degrees 12 minutes 02 seconds West, a distance of 21.37 feet; t m; E THENCE North 89 degrees 08 minutes 48 seconds East, a distance of 430.66 feet, to the POINT OF BEGINNING and containing 0.811 acres (35,314 square feet) of land, more or less. See attached Exhibit “A” dated December 20, 2011 ___________________________________________ Merle W. Miller Date: December 20, 2011 Registered Professional Land Surveyor No. 5438 State of Texas t m; E AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Finance ACM: Jon Fortune ______________________________________________________________________________ SUBJECT Consider adoption of an ordinance authorizing the City Manager, or his designee to execute a Buyer and Denton County, Texas, as Seller, contemplating the sale to and purchase by the City of Denton of an approximate 2.0 acre tract of real property in the Hiram Sisco Survey, Abstract 1184, Denton County, Texas, located generally at the corner of McKinney Street and Oakland 00 Million and No/100 Dollars ($1,000,000.); authorizing the City Manager to execute and deliver any and all other documents necessary to accomplish the closing of the transaction contemplated by the Contract; terminating the prior contract offer submitted by the City of Denton to Denton County, Texas related to the Property; authorizing the expenditure of funds therefor; and providing an effective date. BACKGROUND In spring of 2011, Denton County offered for public sale the subject 2.00 acre tract and solicited bids via public auction method with the City Denton being the sole bidder. Denton County officials thereafter have been evaluating the disposition of the property, in respect to the timing of when a Purchase and Sale contract would be effected, given their ongoing need to use a portion of buildings situated on the 2.0 acre tract for storage until their new facility on Loop 288 is completed. The property tract is located in close proximity to City of Denton land and an acquisition of the tract by the City would complement the programming and operations of Main City Hall, the Civic Center and Quakertown Park. Also, a purchase would also provide space to accommodate ancillary municipal purposes and/or serve as a catalyst for future transit oriented development. Denton County presently desires to enter into a Contract for Sale for the 2.0 acre tract, with the provision that the closing and funding date will be November 29, 2012, to accommodate their storage needs in the interim. Also, the Contract includes a provision to allow the City to perform an environmental site assessment and analysis of the 2.0 acre tract within the Contract period, so that determinations can be made in respect the environmental conditions, prior to any prospective closing and funding event. OPTIONS 1.Recommend approval of the Ordinance 2.Do not recommend approval Agenda Information Sheet March 6, 2012 Page 2 RECOMMENDATION Staff endorses approval of the Ordinance. PRIOR ACTION/REVIEW (Council, Boards, Commissions) City Council Closed Session Briefing on March 8, 2011. City Council Closed Session Briefing on April 5, 2011. City Council Closed Session Briefing on April 19, 2011. Resolution 2011-013 Offer to Purchase Contract City Council Closed Session Briefing on July 19, 2011. City Council Closed Session Briefing on August 2, 2011. City Council Closed Session Briefing on February 7, 2012. FISCAL INFORMATION 00 Purchase Price is $1,000,000. EXHIBITS 1.Location Map 2.Ordinance Respectfully submitted, Paul Williamson Real Estate Manager Luster to Denton County Coleman to Denton County Volume 695, Page 371 Volume 651, Page 569 Deed Records, Denton County, Texas Deed Records, Denton County, Texas Operations Building 1,800 sq. ft. Old County Tax Office 1 Story Bldg. Approx. 6,800 sq. ft. Storage 800 sq. ft. Stone to Denton County Volume 666, Page 504 Mays to Denton County Deed Records, Denton County, Texas Volume 705, Page 438 Deed Records, Denton County, Texas 400 sq. ft. Evers to Denton County Volume 690, Page 704 520 sq. ft. Deed Records, Denton County, Texas Bldg. House Kerley to Denton County 1,800 Volume 685, Page 234 1,500 sq. ft. sq. ft. Deed Records, Denton County, Texas AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Utilities ACM: Howard Martin, 349-8232 ______________________________________________________________________________ SUBJECT Consider adoption of an ordinance finding that a public use and necessity exists to acquire (I) a utility and slope easement encumbering a 0.02 acre tract and a 0.03 acre tract, and (II) a temporary construction easement encumbering a 0.06 acre tract and a 0.02 acre tract, all tracts located in the City of Denton, Denton County, Texas, and situated in the O.S. Brewster Survey, Abstract Number 56, City of Denton, Denton County, Texas, as more particularly described on Exhibit “A”, attached hereto and made a part hereof, located generally in the 1700 block of South Bonnie Brae Street (the “Property Interests”), for the public use of expanding and improving Bonnie Brae Road, a municipal street and roadway; authorizing the City Manager or his designee to make an offer to Bettye L. Martin (the “Owner”) to purchase the Property 00 Interests for the purchase price of Seven Thousand Sixty Nine Dollars and No Cents ( $7,069.), and other consideration as prescribed in the Easement Purchase Agreement (the “Agreement”), as attached hereto and made a part hereof as Exhibit “B”; authorizing the expenditure of funds therefore; and providing an effective date. (Bonnie Brae Widening and Improvements project) BACKGROUND In accord with the current Bonnie Brae Widening and Improvements project initiative, staff is undertaking the identification of the additional land rights necessary to accommodate the construction and operation of the improved roadway. Integra Realty Resources has been engaged to provide real estate appraisal services in regard to those identified tracts that will be directly impacted by the project. In respect to the tracts owned by Mrs. Bettye L. Martin, the project requires the acquisition of Utility and Slope Easement, to accommodate the relocation of utilities and provide lateral support slope for the makeup of roadway itself. Also, Temporary Construction, Grading and Access Easement is necessary to provide work space for the road contractor to reconstruct the property owner’s driveways that are affected by roadway elevation changes. Integra Realty Resources has provided a real estate appraisal report in regard to Mrs. Martin’s property tracts and the land rights necessary for the Project. Their findings constitute the present offer to purchase. OPTIONS 1.Approve the proposed Ordinance. 2.Decline to approve the proposed Ordinance. 3.Table for future consideration. RECOMMENDATION Recommend approval of the Ordinance. PRIOR ACTION/REVIEW (Council, Boards, Commissions) No prior review regarding the identified easement tracts affecting Mrs. Martin’s property tract. FISCAL INFORMATION The overall Bonnie Brae Widening and Improvements project is being funded with a combination of Regional Toll Revenue (RTR) funds, Denton County Transportation Road Improvement Program (TRIP ‘08) funds and City of Denton local match funds. The purchase 00 offer price of $7,069. plus closing costs as prescribed in the Agreement are to be funded through a combination of these funding sources. BID INFORMATION Not applicable EXHIBITS 1. Ordinance 2. Location Map Respectfully submitted Frank G. Payne, P.E. Prepared by, City Engineer Paul Williamson, Real Estate Manager AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Utilities ACM: Howard Martin, 349-8232 ______________________________________________________________________________ SUBJECT Consider adoption of an Ordinance finding that a public use and necessity exists to acquire (I) fee simple to a 0.07 acre tract; (II) a utility and slope easement encumbering a 0.07 acre tract; (III) a utility and drainage easement encumbering a 0.01 acre tract; (IV) a drainage easement encumbering a 0.03 acre tract; (V) a slope easement encumbering a 213 square foot tract and (VI) a temporary construction, grading and access easement, encumbering a 0.08 acre tract, all tracts located in the City of Denton, Denton County, Texas and situated in the O.S. Brewster Survey, Abstract Number 56, City of Denton, Denton County, Texas, as more particularly described on Exhibit “A”, attached hereto and made a part hereof, located generally in the 2200 block of South Bonnie Brae Street (the “Property Interests”), for the public use of expanding and improving Bonnie Brae Road, a municipal street and roadway; authorizing the City Manager or his designee to make an offer to Christopher M. Watts (the “Owner”) to purchase the property interests for the purchase price of Nine Thousand Three Hundred and Twenty Two Dollars and No Cents ( $9,322.00 ), and other consideration, as prescribed in the Purchase Agreement (the “Agreement”), as attached hereto and made a part hereof as Exhibit “B”; authorizing the expenditure of funds therefore; and providing an effective date. (Bonnie Brae Widening and Improvements project) BACKGROUND In accord with the current Bonnie Brae Widening and Improvements project initiative, staff is undertaking the identification of the additional land rights necessary to accommodate the construction and operation of the improved roadway. Integra Realty Resources has been engaged to provide real estate appraisal services in regard to those identified tracts that will be directly impacted by the project. In respect to the tract owned by Mr. Christopher M. Watts, the project requires the acquisition of several discrete tracts. A Fee Tract for street purposes, and several other distinct easement types to accommodate the relocation of utilities, provide for drainage, and provide lateral support slope for the makeup of roadway itself. In addition, a Temporary Construction, Grading and Access Easement is required to provide work space for the road contractor to reconstruct the property owner’s driveway that is affected by changes to roadway elevation and alignment. Integra Realty Resources has provided a real estate appraisal report in regard to Mr. Watts’ property tract and the land rights necessary for the Project. Their findings constitute the present offer to purchase. OPTIONS 1.Approve the proposed Ordinance. 2.Decline to approve the proposed Ordinance. 3.Table for future consideration. RECOMMENDATION Recommend approval of the Ordinance. PRIOR ACTION/REVIEW (Council, Boards, Commissions) No prior review regarding the identified fee tract and easement tracts affecting Mr. Watts’ property. FISCAL INFORMATION The overall Bonnie Brae Widening and Improvements project is being funded with a combination of Regional Toll Revenue (RTR) funds, Denton County Transportation Road Improvement Program (TRIP ‘08) funds and City of Denton local match funds. The purchase 00 offer price of $9,322. plus closing costs as prescribed in the Agreement are to be funded through a combination of these funding sources. BID INFORMATION Not applicable EXHIBITS 1.Ordinance 2.Location Map Respectfully submitted, Frank G. Payne, P.E. Prepared by, City Engineer Paul Williamson, Real Estate Manager AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Utility Administration ACM: Howard Martin, Utilities, 349-8232 ______________________________________________________________________________ SUBJECT Consider adoption of an ordinance amending the Water Conservation and Drought Contingency Plan of the City of Denton, Texas previously adopted by the City Council in Ordinance No. nd 2009-134 enacted on the 2 day of June, 2009regarding only Sections 6.6 and 6.7 thereof; amending the drought and emergency response stages of the Water Conservation and Drought Contingency Plan; amending the enforcement provisions of mandatory restrictions of the Water Conservation and Drought Contingency Plan; providing for the stages of enforcement for violators of the plan; providing for administrative fees to be charged to violators for certain violations of the plan; providing a criminal penalty not to exceed $2,000 per violation of the plan; providing a civil penalty not to exceed $1,000 per day per violation of the plan; providing civil legal remedies for the City of Denton, Texas; providing a savings clause; providing a severability clause; and providing an effective date. BACKGROUND The City of Denton adopted its Water Conservation and Drought Contingency Plan on December 7, 1999. At the time, the Plan was designed to match the Dallas Water Utilities Drought Contingency Plan. As both Denton and Dallas updated their plans, the Dallas drought plan measures became stricter, while Denton’s drought plan remained relatively unchanged. The main purpose of the current Plan update is to align the actions in Denton's Water Conservation and Drought Contingency Plan with the actions in contained in the current Dallas Drought Contingency plan. Council has previously been briefed on the changes to the Drought Contingency Plan. The major change is a shift from voluntary irrigation restrictions in Stages 1 and 2 to mandatory 2-day-a- week irrigation in Stage 1 and 1-day-a-week irrigation in Stage 2; and from mandatory 2-day-a- week irrigation in Stage 3 to mandatory 1-day-a-week irrigation by hand only. Based upon review of other cities' enforcement plans and suggestions by the City's legal department, staff also proposed a codified fee and fine schedule for Plan enforcement. Versions of this schedule were presented to Council during work session on January 10, 2012; to Public Utilities Board on January 23, 2012; and to Council during work session on February 7, 2012. Based upon Council input during the February 7 work session presentation, staff revised the fee and fine system to be tiered by Drought Response Stage to ensure effective penalties are in the Plan for more severe drought management stages. This was intended to emphasize education in earlier drought stages, but emphasized enforcement in the later drought stages. The Drought Contingency Plan update presented for approval incorporates feedback from Council and staff regarding the proposed fee and fine schedule. The revised schedule tiers fees and fines according to meter size, as before, but also increased fines and fees in successive Drought Stages. The table in Exhibit 1 shows the previous proposal and the revised fee and fine proposal. In Stage 1, two warnings would be given before fees are assessed instead of one warning under the previous proposal. The fifth violation in the previous 12 months would be referred to the municipal court for assessment of fines up to $2,000 per day that the offense occurs. Based on the City Attorney's suggestion that we give the Municipal Judge latitude in determining fines based upon the facts of the specific case, we have referred to the existing language in the current Plan that caps fines at $2,000, the statutory cap for the violation of City ordinances, instead of prescribing the fine as in the previous proposal. In Stage 2, one warning would be given before fees are assessed. The fourth violation in the previous 12 months would be referred to the municipal court for the assessment of fines up to $2,000. In Stage 3, fees would double. The fourth violation in the previous 12 months would be referred to the municipal court for the assessment of fines up to $2,000. In Stage 4, fees would double again. The fourth violation in the previous 12 months would be referred to the municipal court for the assessment of fines up to $2,000. There was an inconsistency discovered in the proposed Drought Contingency Plan with respect to restrictions for soaker hoses, drip irrigation systems and hand held hoses and faucet-filled buckets, that were included for Stage 1 but not for Stage 2. Staff recommends that the best method to resolve this inconsistency was to remove restrictions for soaker hoses, drip irrigation systems and hand held hoses and faucet-filled buckets for both Stage 1 and Stage 2. Even though this does not completely mirror the wording in the Dallas drought management plan, staff felt these types of watering uses would be difficult to restrict from an enforcement perspective. In addition, these types of water uses are not significant and water use reductions would not be beneficial enough to warrant these customer restrictions under Stage 1 and Stage 2 conditions. Violations would cumulate across stages of the plan and would be counted for twelve months from the date of the violator’s first offense. Besides changes to the fee and fine schedule, the previously proposed Drought Contingency Plan updates are unchanged and intended to align Denton's Plan with the updated Dallas Water Utilities Plan. OPTIONS 1. Approve the proposed ordinance updating the Drought Contingency Plan. 2. Deny the proposed ordinance updating the Drought Contingency Plan and provide further feedback on desired changes. RECOMMENDATION Staff recommends adoption of the proposed ordinance. PRIOR ACTION/REVIEW (Council, Boards, Commissions) PUB was previously briefed on drought conditions and proposed changes to the Drought Contingency Plan on December 17, 2011. Council was previously briefed on drought conditions and proposed changes to the Drought Contingency Plan on January 10, 2012. PUB recommended approval of the revised Drought Contingency Plan by a vote of 5-0 on January 23, 2012. Council was previously briefed on drought conditions and the latest proposed changes to the Drought Contingency Plan on February 7, 2012. EXHIBITS 1.Ordinance 2.Amended Drought Plan Respectfully submitted: Tim Fisher Assistant Director, Water Utilities ORDINANCE NO. 2012-________ AN ORDINANCE AMENDING THE WATER CONSERVATION AND DROUGHT CON- TINGENCY PLAN OF THE CITY OF DENTON, TEXAS PREVIOUSLY ADOPTED BY ND THE CITY COUNCIL IN ORDINANCE NO. 2009-134 ENACTED ON THE 2 DAY OF JUNE, 2009REGARDING ONLY SECTIONS 6.6 AND 6.7 THEREOF; AMENDING THE DROUGHT AND EMERGENCY RESPONSE STAGES OF THE WATER CONSERVATION AND DROUGHT CONTINGENCY PLAN; AMENDING THE ENFORCEMENT PROVI- SIONS OF MANDATORY RESTRICTIONS OF THE WATER CONSERVATION AND DROUGHT CONTINGENCY PLAN; PROVIDING FOR THE STAGES OF ENFORCEMENT FOR VIOLATORS OF THE PLAN; PROVIDING FOR ADMINISTRATIVE FEES TO BE CHARGED TO VIOLATORS FOR CERTAIN VIOLATIONS OF THE PLAN; PROVIDING A CRIMINAL PENALTY NOT TO EXCEED $2,000 PER VIOLATION OF THE PLAN; PROVIDING A CIVIL PENALTY NOT TO EXCEED $1,000 PER DAY PER VIOLATION OF THE PLAN; PROVIDING CIVIL LEGAL REMEDIES FOR THE CITY OF DENTON, TEXAS; PROVIDING A SAVINGS CLAUSE; PROVIDING A SEVERABILITY CLAUSE; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City Council is cognizant of the persistent drought and near-drought conditions that have occurred and which exist in this geographic area and is also aware that water supply in area lakes and reservoirs has become severely depleted; it further coming to the atten- tion of the City Council that the City of Dallas, Texas, who is a party to contracts for the sale of water to the City from Lake Lewisville and Lake Ray Roberts, has recently enacted an ordinance that limits certain uses and the timing of such use of water, and provides for violations of that ordinance; and WHEREAS, §11.1271 and 11.1272 of the Texas Water Code and the applicable rules of the Texas Commission on Environmental Quality require the City to include specific, quantified five-year and ten-year targets for water savings and specific quantified targets for water use re- ductions during periods of water shortages and drought in the Water Conservation and Drought Contingency Plan; and WHEREAS, on April 19, 2005, the City Council adopted the ordinance providing for the Water Conservation and Drought Contingency Plan for the City, by enacting Ordinance No. 2005-121; and WHEREAS, on May 2, 2006, the City Council adopted the ordinance providing for the Amended Water Conservation and Drought Contingency Plan for the City, by enacting Ordi- nance No. 2006-127, by adding Appendix “G” to said plan, which was the “Lawn and Landscape Irrigation and Water Waste Ordinance’; and WHEREAS, on June 2, 2009, the City Council adopted the ordinance providing for the further Amended Water Conservation and Drought Contingency Plan, by enacting Ordinance No. 2009-134, by including two additional Texas Water Development Board, Best Management 1 Practices recommended by the Task Force’s Water Conservation Best Management Practices Guidethat relate to park and athletic field conservation; and WHEREAS, the City of Denton, Texas recognizes that the amount of water available to the City and its water utility customers is limited, is subject to depletion and should be used effi- ciently; and the City Council desires to further amend the said Water Conservation and Drought Contingency Plan to include amendments to Sections 6.6 and 6.7 thereof; and WHEREAS, the City Council finds that this ordinance is necessary to protect the public health of the residents of the City of Denton, Texas, in accordance with §54.001 and §54.004 of the Texas Local Government Code; and WHEREAS, the City Council deems it in the public interest to adopt the following amendments to the Amended Water Conservation and Drought Contingency Plan adopted on June 2, 2009, by adopting the provisions attached in the “April 2009 - Water Conservation and Drought Contingency Plan (updated February 2012)” that is attached hereto as Exhibit “A”, said Plan is incorporated by reference herewith; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The Preamble to this ordinance is incorporated by reference herewith, and made a part of this ordinance for all purposes. SECTION 2.. City of Denton Ordinance No. 2005-121, pertaining to the “Water Conser- vation and Drought Contingency Plan,” and codified in Chapter 26 of the Code of Ordinances of the City of Denton, Texas, at §§26-233 and 26-234, amended, by City of Denton Ordinance No. 2006-127, by adding to it Appendix “G”, which is the “Land and Landscape Irrigation and Water Waste Ordinance”; and as further amended by the “Water Conservation and Drought Contingen- cy Plan – April 2009” by City of Denton Ordinance No. 2009-134; and now as amended by this ordinance, the said Sections 26-233(a) and 26-234 are amended as follows: Sec. 26-233. Water conservation and drought contingency plan. (a)Adoption of plans. The Water Conservation and Drought Contingency Plan of the City adopted dated April 19, 2005, and the previous amendment thereto adopted by ordinance dated May 2, 2006, and the “City of Denton – Water Conservation and Drought Contingency Plan – April 2009” are hereby adopted by reference herein; and the attached ”City of Denton – Water Conservation and Drought Contingency Plan (updated February 2012)” is hereby added to, incorporated by reference herewith, being attached as Exhibit “A” hereto, and made a part of this Code of Ordinances for all purposes, as to its Sections 6.6 and 6.7, as if fully set forth herein (hereafter collectively referred to as the “Plan”). Sec. 26-234. Criminal and Civil Penalties. (a) A person commits an offense if he or she knowingly makes, causes, or permits a use of water contrary to the measures implemented in the Water Conservation and Drought Con- 2 tingency Plan, as amended. For purposes of this section, it is presumed that a person has know- ingly made, caused, or permitted a use of water contrary to the measures implemented if the mandatory measures have been implemented according to the Plan and any one of the following conditions apply: (1) The Plan prohibits the manner of use; or (2) The amount of water used exceeds the amount allowed by the Plan; or (3) The amount of use or the amount used violates the terms and conditions of a compliance agreement following a variance granted by the Assistant Cy Manager for Utilities; or (4) The violation of any provision of the “Land and Landscape Irrigation and Water Waste Ordinance” (b) The following penalty shall apply during Stages 3 and 4 of the Water Conserva- tion and Drought Contingency Plan, as amended. Any person who knowingly violates any pro- vision of this article shall, upon conviction, be punished by a fine not to exceed two thousand dollars ($2,000.00). Each day that one or more provisions in this Plan is violated shall be con- sidered to be a separate offense. (c) The City Attorney is authorized to commence an action for appropriate legal or equitable relief in a court of competent jurisdiction in addition to the penalty mentioned in the above Subsection (b). Such additional relief may include: (1) An injunction to prevent a violation of this chapter, or of the Water Con- servation and Drought Contingency Plan, as amended; (2) Recovery for expenses incurred by the City in responding to a violation of this Chapter, or of the Water Conservation and Drought Contingency Plan, as amended; (3) A civil fine of up to one thousand dollars ($1,000.00) per day for viola- tions of §26-233 or for violations of the Water Conservation and Drought Contingency Plan, as amended; (4) All other damages, costs, remedies and legal processes to which the City may be entitled. SECTION 3. This ordinance shall be cumulative of all provisions of ordinances and of the Code of Ordinances of the City of Denton, Texas, as amended, except when provisions of this ordinance are in direct conflict with the provisions of such ordinances and such Code. All conflicting provisions of such ordinances and such Code are hereby repealed to the extent of that conflict only. 3 SECTION 4. It is hereby declared to be the intention of the City Council that the sec- tions, paragraphs, sentences, clauses, and phrases of this ordinance are severable, and, if any phrase, clause, sentence, paragraph, or section of this ordinance shall be declared unconstitution- al by the valid judgment or decree of any court of competent jurisdiction, such unconstitutionali- ty shall not affect any of the remaining phrases, clauses, sentences, paragraphs, and sections of this ordinance since the same would have been enacted by the City Council without the incorpo- ration of this ordinance of any such unconstitutional phrase, clause, sentence, paragraph, or sec- tion. SECTION 5. This ordinance shall become effective fourteen (14) days from the date of its passage, and the City Secretary is hereby directed to cause the caption of this ordinance to be published twice in the Denton Record-Chronicle, the official newspaper of the City of Denton, Texas, within ten days of the date of its passage. PASSED AND APPROVED this the ______ day of ________________, 2012. _________________________________ MARK A. BURROUIGHS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY By: _________________________________ APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY By: _________________________________ 4 CITYOFDENTON,TEXAS April2009WaterConservationandDroughtContingencyPlan (updatedFebruary2011) 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%ofdeliverycapacityforfour(4)consecutivedays 6.6.1.1.3 TypeC WaterManagementCondition Waterdemandapproachesareduceddeliverycapacityforallorpartofthesystem,asdeterminedbyDWU RequirementsforTermination: Stage1maybeterminatedwhenStage1conditionsnolongerexistandwouldbeunlikelytorecurupon termination. 6.6.1.2GoalForUseReductionsAndActionsAvailableUnderStage1,Mild ThegoalforwaterusereductionunderStage1,Mild,isa5percentreductionoftheusethatwouldhave occurredintheabsenceofdroughtcontingencymeasures.TheDirectorofWaterUtilitiesoradesigneecan ordertheimplementationofanyoftheactionslistedbelow,orotheractionsnotlisted,asdeemednecessary: AllWaterUsers (a)Requirethatalllandscapewateringbelimitedtothedayofweekschedulebetweenthehoursof6:00 PMto10:00AMandnotviolatetherestrictionsagainstirrigationwasteinSections1Band1Cofthe Stage11 WaterWasteOrdinanceinAppendixG.Irrigationoflandscapedareaswithhoseendsprinklersor automaticirrigationsystemsshouldbelimitedtoSundaysandThursdaysforcustomerswithastreet addressendinginanevennumber(0,2,4,6or8)andforlocationswithoutaddressesandlimitedto SaturdaysandWednesdaysforwatercustomerswithastreetaddressendinginanoddnumber(1,3,5, 7or9).Apartments,officebuildingcomplexesorotherpropertycontainingmultipleaddressesmaybe identifiedbythelowestaddressnumber. (b)Encouragereductioninfrequencyofwateringnewandfirstyearlandscaping (c)Encourageonlyinitialfillingofornamentalfountains. (d)Encouragereductioninfrequencyofwashingorrinsingofvehiclesandrecommenduseof bucket/container,handheldhosewithpositiveshutoffvalveorcommercialcarwash. (e)Encouragereductioninfrequencyindrainingandrefillingofswimmingpools. (f)Encouragereductioninfrequencyofrecreationalwateruseincludinguseoffaucets,hosesorhydrants. (g)Foundationsmaybewateredonanydayoftheweekbetweenthehoursof6:00PMand10:00AM. withapositiveshutoff Foundationsmaybewateredwithasoakerhoseorahandheldhoseequipped nozzleonly. CityGovernment (a)StaffwillbeginreviewoftheproblemsinitiatingStage1actionsandwillidentifypossiblesolutionsto addressthewatershortage. (b)Initiatepubliceducationcampaignteachingandencouragingreducedwaterusepractices. (c)Intensifynormalleakdetectionandrepairactivitiesonwaterpipesandmains. (d)Encouragereductionofwateruseincityownedornamentalfountains. (e)Encouragereductioninlandscapeusesforparks. (f)Onlyflushnewlyconstructedmainsandmainsthatareessentialforwaterqualitymaintenance. CommercialCustomers (a)Identifyandencouragevoluntaryreductionmeasuresbyhighvolumewaterusersthroughwateruse audits. (b)Encouragereductioninlandscapeusesforparks. (c)Encouragereductioninwateruseforlandscapenurserystock. (d)Requiredayofweeklandscapewateringscheduleforgolfcourses. (e)Encouragearearestaurantstoservecustomerswaterbyrequestonly. multipledaypatronstoreuselinensinsteadofchangingeveryday. (f)Encouragehotel/motelstorequest Stage12 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. andfinesasspecifiedbelowinthisPlanforanyviolationoftheDrought PenaltiesInitiatefees ContingencyPlan. Stage13 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%ofdeliverycapacityforthree(3)consecutivedays 6.6.2.1.3 TypeC WaterManagementCondition Waterdemandequalsareduceddeliverycapacityforallorpartofthesystem,asdeterminedbyDWU RequirementsforTermination: Stage2maybeterminatedwhenStage2conditionsnolongerexistandwouldbeunlikelytorecurupon termination. 6.6.2.2GoalForUseReductionAndActionsAvailableUnderStage2,Moderate ThegoalforwaterusereductionunderStage2,Moderate,isa15percentreductionoftheusethatwouldhave occurredintheabsenceofdroughtcontingencymeasures.TheDirectorofWaterUtilitiesoradesigneecan ordertheimplementationofanyoftheactionslistedbelow,orotheractionsnotlisted,asdeemednecessary: AllWaterUsers (a)Requirethatalllandscapewateringbelimitedtothedayofweekschedulebetweenthehoursof6:00 PMto10:00AMandnotviolatetherestrictionsagainstirrigationwasteinSections1Band1Cofthe WaterWasteOrdinanceinAppendixG.Irrigationoflandscapedareaswithhoseendsprinklersor automaticirrigationsystemsshouldbelimitedtoThursdaysforcustomerswithastreetaddressending inanevennumber(0,2,4,6or8)andforlocationswithoutaddresses,andWednesdaysforwater customerswithastreetaddressendinginanoddnumber(1,3,5,7or9).Apartments,officebuilding complexesorotherpropertycontainingmultipleaddressesmaybeidentifiedbythelowestaddress number (b)Restrictoperationofornamentalfountainsorpondstoinitialfillingexceptwherenecessarytosupport orpondsareequippedwitharecirculationsystem. aquaticlifeorwheresuchfountains Stage24 (c)Restrictwashingofanymotorvehicle,motorbike,boat,trailer,airplaneorothervehicletotheuseofa handheldbucketorahandheldhoseequippedwithapositiveshutoffnozzleforquickrinses.Vehicle washingmaybedoneatanytimeontheimmediatepremisesofacommercialcarwashorcommercial servicestation.Further,suchwashingmaybeexemptedfromtheseregulationsifthehealth,safety,and welfareofthepubliciscontingentuponfrequentvehiclecleansing,suchasgarbagetrucksandvehicles usedtotransportfoodandperishables.Requestthatuseofwatertofill,refill,oraddtoanyindooror outdoorswimming,wading,orjacuzzipoolsbelimitedtothedayofweekschedule. (d)Prohibitrecreationalwateruseincludinguseoffaucets,hosesorhydrants,whichusewaterinsucha mannerastoallowrunofforotherwastes. (e)Prohibithosingoffpavedareas,buildings,windowsorothersurfaces. CityGovernment (a)StaffwillbeginreviewoftheproblemsinitiatingStage2actionsandwillidentifypossiblesolutionsto addressthewatershortage. (b)Acceleratepubliceducationcampaignteachingandencouragingreducedwaterusepractices. (c)Continueintensifiedleakdetectionandrepairactivitiesonwaterpipesandmains. (d)Prohibitoperationofornamentalfountainsbycitygovernmentexceptwherenecessarytosupport aquaticlifeorwheresuchfountainsorpondsareequippedwitharecirculationsystem. (e)Requiredayofweekwateringscheduleforparks. (f)Restrictflushingofnewmainsnotimmediatelyrequiredtoprovideservice. Useofwaterfromfirehydrantslimitedtofirefightingandessentialdistributionsystemmaintenance. (g)Restricttheflushingoffirehydrants,blowoffsandserviceconnectionsfornewmainconstructionby specialpermitonly. trailerlimitedtothedayofweekwateringschedule. (h)Washingofanycityvehicle,bike,or (i)Prohibithosingoffpavedareas,buildings,windowsorothersurfaces. CommercialCustomers (a)Requiredayofweekwateringscheduleforparks. (b)Encouragefurtherreductioninlandscapeusesfornurserystock. (c)Requiredayofweeklandscapewateringscheduleforgolfcourses. InterruptibleCustomers (a)Reduceusageforinterruptiblecustomerspercontractterms. Stage25 WholesaleCustomers (a)Requirewaterdemandreductionsinaccordancewithcontractobligationsforwholesalecustomers. (b)WholesalewatersystemsaskedtoabidebyCityofDentonpolicyforbothinternaloperationsandall retailcustomers.Reductioninrateofflowcontrollersettingsby10%20%areoptional. Notifications CityofDenton Bytelephoneandattachedfollowupmemo,notifyallmajorCitydepartmentwaterusersofWater WatchStage#2andthewateruserestrictionsunderthisstage.Instructthemtoimplement restrictionsonnonessentialuses.UsecitydepartmentcontactsinAppendixF. Coordinatedistributionofwateremergencyplandetails,posters,andhandoutstocustomerservice representatives,utilitydispatchpersonnelandDentonpublicaccessbuildings. RetailCustomers TCEQnotifiedofStage2restrictions. Issuepressrelease,radioandvideopublicserviceannouncementtoareamediadescribingWaterWatch restrictionsunderthisstage.Keepmediaupdatedonthewatersituation. Stage#2andthewateruse 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. Stage26 InitiatefeesandfinesasspecifiedbelowinthisPlanforanyviolationoftheDroughtContingencyPlan. Stage27 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%ofdeliverycapacityfortwo(2)consecutivedays 6.6.3.1.3 TypeC WaterManagementCondition Waterdemandexceedsareduceddeliverycapacityforallorpartofthesystem,asdeterminedbyDWU Amajorwaterlinebreaks,orapumporsystemfailureoccurs,whichcauseunprecedentedlossof capabilitytoprovidetreatedwaterservice Naturalormanmadecontaminationofthewatersupply RequirementsforTermination: Stage3maybeterminatedwhenStage3conditionsnolongerexistandwouldbeunlikelytorecurupon termination. 6.6.3.2GoalForUseReductionAndActionsAvailableUnderStage3,Severe ThegoalforwaterusereductionunderStage3,Severe,isareductionof20percentoftheusethatwouldhave occurredintheabsenceofdroughtcontingencymeasures.Ifthecircumstanceswarrant,theDirectorofWater Utilitiesoradesigneecansetagoalforgreaterwaterusereduction.TheDirectorofWaterUtilitiesora designeecanordertheimplementationofanyoftheactionslistedbelow,orotheractionsnotlisted,asdeemed necessary: AllWaterUsers (a)Requirethatalllandscapewateringbelimitedtothedayofweekwateringschedulebetweenthehours of6:00PMand10:00AMbymeansofhandheldhoses,soakerhosesandhandheldbucketsonly.The useofhoseendsprinklersorpermanentlyinstalledautomaticsprinklersystemsisprohibitedatall times.IrrigationoflandscapedareasshallbelimitedtoThursdaysforcustomerswithastreetaddress endinginanevennumber(0,2,4,6or8)andforlocationswithoutaddresses,andWednesdaysfor watercustomerswithastreetaddressendinginanoddnumber(1,3,5,7or9).Apartments,office Stage38 buildingcomplexesorotherpropertycontainingmultipleaddressesmaybeidentifiedbythelowest addressnumber. (b)Operationofanyornamentalfountainorpondforaestheticorscenicpurposesisprohibitedexcept wherenecessarytosupportaquaticlifeorwheresuchfountainsorpondsareequippedwitha recirculationsystem. (c)Useofwatertowashanymotorvehicle,motorbike,boat,trailer,airplaneothervehiclenotoccurringon thepremisesofacommercialcarwashandcommercialservicestationsandnotintheimmediate interestofpublichealth,safety,andwelfareisprohibited.Further,suchvehiclewashingatcommercial carwashesandcommercialservicestationsshalloccuronlybetweenthehoursof6:00PMto10:00AM. (d)Thefilling,refilling,oraddingofwatertoswimmingpools,wadingpools,andJacuzzitypepoolsis prohibited.Existingpoolsmayaddwatertoreplacelossesduringnormaluseandtoreplace evaporationinordertomaintainproperwaterqualityandproperoperationofthepoolequipment. (e)Foundationsmaybewateredforatwohourperiodonthedesignatedwateringdaybetweenthehours hoseequipped of6:00PMand10:00AM.Foundationsmaybewateredwithasoakerhoseorhandheld withapositiveshutoffnozzleonly.Noapplicationfornew,additional,expanded,orincreasedinsize waterServiceconnections,meters,servicelines,pipelineextensions,mains,orwaterservicefacilitiesof anykindshallbeapproved,andtimelimitsforapprovalofsuchapplicationsareherebysuspendedfor suchtimeasthisdroughtresponsestageorahighernumberedstageshallbeineffect. (f)Permittingofnewswimmingpools,hottubs,spas,ornamentalpondsandfountainconstructionis prohibited. CityGovernment (a)Wetstreetsweepingandcityvehiclewashingorrinsingisprohibited. (b)Irrigationofparksisprohibited. useofwaterfromfirehydrants,blowoffsandserviceconnectionsfornewwaterline (c)Discontinue constructionpurposes. CommercialCustomers (a)Wateringofnurseryplantstockrestrictedtothehoursbetween6:00PMand10:00AMandthedayof weekwateringschedule. (b)Restrictwateringofgolfcoursegreensandteeboxesrestrictedtothehoursbetween6:00PMand 10:00AMandthedayofweekwateringschedule;wateringofothergolfcourseareasandparksis prohibitedunlessthegolfcourseutilizesawatersourceotherthanthatprovidedbytheCityofDenton. Stage39 InterruptibleCustomers (a)Servicetointerruptiblecustomersistemporarilysuspended. WholesaleCustomers (a)Sameexternalrestrictionsapplytowholesalesuppliers. Notifications CityofDenton Coordinatedisseminationofwaterconservationplandetails,posters,andhandoutstocustomerservice representatives,utilitydispatchpersonnelandpublicaccessbuildings. Bytelephoneandattachedfollowupmemo,notifyallmajorCitydepartmentusersofWaterWarning Stage#3andofthewateruserestrictionsunderthisstage.Instructthemtoeliminatenonessentialuses includingstreetandvehiclewashingandoperationofornamentalfountains,andtoimplementrestrictions onessentialuses.UsesamecontactsasthoselistedinAppendixF. RetailCustomers TCEQnotifiedofStage3restrictions. Issuepressrelease,radioandvideopublicserviceannouncementtoareamediadescribingWaterWarning Stage#3andthewateruserestrictionsunderthisstage.Keepmediaupdatedonthewatersituation.Use samemediacontactsasthoseinAppendixF. Bytelephoneandfollowupletter,notifymajorwaterusersofWaterWarning#3andthemandatorywater usereduction.UsecontactslistedinAppendixF. PostWaterWarningnoticesatpublicbuildingsincludingcitybuildings,countybuildings,andthefederal postoffice. Ifapplicable,notifyU.S.CorpsofEngineersbytelephoneandattachedletteroftheWaterWarningStage #3conservationmeasures. WholesaleCustomers AdvisewholesalecustomersbytelephoneandattachedletteroftheactionstakenbytheCityofDenton inresponsetoWaterWarningStage#3andrequiretheimplementationoflikeproceduresamongtheir customers.Wholesalecustomercitiesshalleitherimposewateruserestrictionsequivalenttothose imposedon5;·xretailcustomersORwhereapplicable,mayreducerateofflowcontrollersettings by20%30%.UsewholesalecustomercontactslistedinAppendixF. Stage310 Penalties Initiatea20%surchargeforresidentialcustomersforwaterusagegreaterthan30,000gallonsper accountperbillingperiod. Imposea20%surchargeforcommercialandindustrialcustomersformonthlywateruseabove80%of priorbillingvolumesperaccountperbillingperiod. belowforanyviolationoftheDroughtContingencyPlan. Initiatefeesandfinesasspecified Stage311 6.6.4Stage4,Emergency 6.6.4.1TriggeringConditionsForStage4,Emergency 6.6.4.1.1 TypeA WaterManagementCondition Totalrawwatersupplyin(1)DentonandDallasconnectedlakesdrops(eastandwest);or(2)westernconnected lakes;or(3)easternconnectedlakesbelow30%ofthetotalconservationstorage 6.6.4.1.2 TypeB WaterManagementCondition Waterdemandreachesorexceeds98%ofdeliverycapacityforoneconsecutiveday 6.6.4.1.3 TypeC WaterManagementCondition Waterdemandseriouslyexceedsareduceddeliverycapacityforallorpartofthesystem,asdeterminedby DWU RequirementsforTermination: Stage4maybeterminatedwhenStage4conditionsnolongerexistandwouldbeunlikelytorecurupon termination. 6.6.4.1GoalForUseReductionAndActionsAvailableUnderStage4,Emergency ThegoalforwaterusereductionunderStage4,Extreme,isareductionof25percentoftheusethatwouldhave occurredintheabsenceofdroughtcontingencymeasures.Ifthecircumstanceswarrant,theDirectorofWater Utilitiesoradesigneecansetagoalforgreaterwaterusereduction.TheDirectorofWaterUtilitiesora designeecanordertheimplementationofanyoftheactionslistedbelow,orotheractionsnotlisted,asdeemed necessary: AllUsers (a)Irrigationoflandscapedareasisabsolutelyprohibited. (b)Useofwatertowashanymotorvehicle,motorbike,boat,trailer,airplaneorothervehicleisabsolutely prohibited. (c)Foundationsmaybewateredforatwohourperiodonlybetweenthehoursof6:00PMand10:00AM onthedesignatedwateringdayfromStage3withsoakerorhandheldhoseequippedwithapositive shutoffnozzle. (d)Prohibitpermittingofnewswimmingpools,hottubs,spas,ornamentalponds,andfountain construction. Stage412 (e)Restrictuseofwaterfromfirehydrantstofirefighting,essentialdistributionsystemmaintenanceand relatedactivities. Notifications CityofDenton Bytelephoneandattachedfollowupmemo,notifyallmajorCitydepartmentwaterusersofWater EmergencyStage#4andofthewateruserestrictionsunderthisstage.Instructthemtoeliminatenon essentialusesandtoimplementrestrictionsonessentialuses.Usedepartmentcontactslistedin AppendixF. Coordinatedisseminationofwaterconservationdetails,posters,andhandoutstocustomerservice representatives,utilitydispatchpersonnelandDentonpublicaccessbuildings. RetailCustomers TCEQnotifiedofStage4restrictions. Issuepressrelease,radioandvideopublicserviceannouncementtoareamediadescribingWater emergencyStage#4andthewateruserestrictionsunderthisstage.Keepmediaupdatedonthewater situation.UsesamemediacontactsasthoseinAppendixF. PostWaterEmergencynoticesatpublicbuildings,includingcitybuildings,countybuildings,andthe federalpostoffice. majorareawaterusersofWaterEmergencyStage#4and Bytelephoneandfollowupletter,notify mandatorycessationofalloutsidewatering.UseplantmanagercontactslistedinAppendixF. Ifapplicable,notifyU.S.CorpsofEngineersbytelephoneandattachedletteroftheWaterEmergency Stage#4conservationmeasures. WholesaleCustomers AdvisewholesalecustomersbytelephoneandattachedletterofactionsbeingtakenbytheCityin responsetoWaterEmergencyStage#4andmandatoryimplementationofsimilarproceduresamong theircustomers.Wholesalecustomercitiesshallimposewateruserestrictionsequivalenttothose offlowcontrollersettings imposedon5;·xretailcustomersor,whereapplicable,reducetheirrate byapercentagedeterminedbytheDirectorofWaterUtilities.AppendixFlistswholesalecustomersthat needtobecontacted. Stage413 Penalties Imposea20%surchargeforresidentialcustomersforwaterusagegreaterthan15,000gallonsper accountperbillingperiod. Imposea20%surchargeforcommercialandindustrialcustomersformonthlywateruseabove70%of priorbillingvolumesperaccountperbillingperiod. anyviolationoftheDroughtContingencyPlan. Initiatecodeenforcementfinesfor Stage414 WaterRateSurchargeandAllocation RetailCustomers DuringStages3and4oftheDroughtContingencyPlan,theCitymayimposearetailwaterrateincreaseto discouragewateruse.Ratesforresidentialcustomerusagemorethan30,000gallonsperaccountperbilling periodinStage3orabove15,000gallonsper30daysperaccountperbillingperiodinStage4maybeincreased byasmuchastwentypercent(20%).Asimilartwentypercent(20%)rateincreaseforcommercialandindustrial customersmaybeimposedforuseexceeding80%(Stage3)and70%(Stage4)ofpriorbillingvolumesper30 dayperiod. 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: 1.theamountofwatertowhicheachcustomermaybeentitled;or 2.theamountofwatertowhicheachcustomermaybeentitled,lesstheamountofwaterthe customerwouldhavesavedifthecustomerhadoperateditswatersystemincompliancewith waterconservationplan. precludestheperson,associationofpersonsorcorporationowningor (c)NothinginSubsection(a)or(b) controllingthewaterfromsupplyingwatertoapersonwhohasapriorvestedrighttothewaterunder thelawsofthisstate. 15 DWUmaycurtailwaterdeliveriesorreducediversionsinaccordancewiththetermsandconditionsofits wholesalewatersupplycontracts.Ifnecessary,orifspecificcontractprovisionsarenotprovidedfor,DWUmay curtailwaterdeliveriesorreducediversionsinaccordancewithTexasWaterCodeSection11.039.DWUwill haveauthoritytorestrictflowtoitswholesalewatercustomersthroughtherateofflowcontrollers. TheDirectorwillestablishproratawaterallocations,determinedasapercentagereductionofthewholesale -Ò·;©xwaterusage,atthetimeofimplementation.Thetotalvolumereductionforeachwholesale customerwillbecalculatedmonthly,basedonaveragewaterusageforthepreviousthreeyears.TheDirector willestablishthepercentagereductionbasedonanassessmentoftheseverityofthewatershortagecondition andtheneedtocurtailwaterdiversionsand/ordeliveries,andthepercentagereductionmaybeadjusted Onceprorataallocationisineffect,waterdiversionsby,ordeliveriesto,each periodicallybytheDirector. wholesalecustomerwillbelimitedtotheallocationestablishedforeachmonth. 6.7ProceduresforEnforcementofMandatoryRestrictions Violations Apersoncommitsanoffenseifheorsheknowinglymakes,causes,orpermitsauseofwatercontrarytothe measuresimplementedintheDroughtContingencyPlan.Itispresumedthatapersonhasknowinglymade, caused,orpermitteduseofwatercontrarytothemeasuresimplementedifthemandatorymeasureshavebeen implementedaccordingtothePlanandanyoneofthefollowingconditionsapply: TheDroughtContingencyPlanprohibitsthemannerofuse. TheamountofwaterusedexceedsthatallowedbytheDroughtContingencyPlan thetermsandconditionsofacomplianceagreementmade Themannerofuseortheamountusedviolates followingavariancegrantedbytheACM/Utilities. Anypersoninapparentcontrolofthepropertywhereaviolationoccursororiginatesshallbepresumedtobe theviolator,andproofthattheviolationoccurredonthe¦;©xpropertyshallconstitutearebuttable presumptionthatthepersoninapparentcontrolofthepropertycommittedtheviolation,butanysuchperson shallhavetherighttoshowthathe/shedidnotcommittheviolation.Parentsshallbepresumedtobe responsiblefortheirminorchildrenandproofthataviolation,committedbyachild,occurredontheproperty withincontroloftheparentsshallconstitutearebuttablepresumptionthattheparentcommittedtheviolation. But,anysuchparentmaybeexcusedifhe/sheprovesthathe/shehadpreviouslydirectedthechildnottouse 16 thewaterasitwasusedinviolationofthisPlanandthattheparentcouldnothavereasonablyknownofthe violation. AnyCodeEnforcementOfficer,PoliceOfficer,orothercityemployeedesignatedbytheAssistantCity Manager/Utilities,mayissueacitationtoapersonhe/shereasonablybelievestobeinviolationofthis Ordinance.Thecitationshallbepreparedinduplicateandshallcontainthenameandaddressofthealleged violator,ifknown,theoffensecharged,andshalldirecthim/hertoappearinmunicipalcourtonthedateshown onthecitation. FirstViolationofthePlan Customersreceiveawrittenwarningthattheyhaveviolatedrestrictionsthatwillberecordedinthe/z·äx CustomerServicerecords. SubsequentViolationsofthePlan AnypersonwhoviolatesthisPlanisguiltyofamisdemeanorand,uponconviction,shallbepunishedbyafineof notmorethan$2,000.EachdaythatoneormoreprovisionsinthisPlanisviolatedshallconstituteaseparate offense.ThecaseshallbefiledinDentonMunicipalCourt. However,InlieuofprosecutingamisdemeanorinDentonMunicipalCourt,DWUmay,atitssoleoption,impose anadministrativefee,herebyestablishedatanamountnottoexceed$2,000perviolation,uponviolationofthis punishedbaseduponthe plan.IftheadministrativefeeoptionischosenbyDWU,thenviolationswillbe DroughtStageinforcewhentheviolationoccursandalsoaccordingtothesizeofthemeterusedinviolationof theplan.AtableofadministrativefeesissetoutinTable1hereinbelow. ForpurposesofdeterminingthefilingofacaseinDentonMunicipalCourtand/ortheimpositionofan administrativefeeupontheviolator,themeasuringperiodforthenumberofoffensescommittedbyany violatorshallbeoneyearfromthedateofthefirstoffensebeingcommittedbytheviolator.Uponthefirst anniversaryofthefirstoffensebeingcommitted,thenanewmeasuringperiodbeginsanew. ForthefifthviolationcommittedbyapersonorentityinStage1,ofthisdroughtplan,intheoneyearperiod followingthedateoffirstoffense,allegingaviolationofthisdroughtcode,themattershallbefiledinDenton MunicipalCourt,whereafineofupto$2,000perviolationmaybeassesseduponconvictionoftheviolation, suchfinetobesetbytheCourt. 17 ForthefourthandfifthviolationscommittedbyapersonorentityinStage2,Stage3andStage4,inthis droughtplan,intheoneyearperiodfollowingthedateoffirstoffense,allegingaviolationofthisdroughtcode, themattershallbefiledinDentonMunicipalCourt,whereafineofupto$2,000perviolationmaybeassessed uponconvictionoftheviolation,suchfinetobesetbytheCourt. Table1: Stage1 (a)Meters1"indiameterandsmaller st 1Violation:Warning nd 2Violation:Warning rd 3Violation:$50administrativefee th 4Violation:$100administrativefee th 5Violation:Finenotmorethan$2000 (b)Meterslargerthan1"indiameterandsmallerthan3"indiameter st 1Violation:Warning nd 2Violation:Warning rd 3Violation:$100administrativefee th 4Violation:$250administrativefee th 5Violation:Finenotmorethan$2000 (c)Meters3"indiameterandlarger st 1Violation:Warning nd 2Violation:Warning rd 3Violation:$250administrativefee th 4Violation:$500administrativefee th 5Violation:Finenotmorethan$2000 Stage2 (a)Meters1"indiameterandsmaller st 1Violation:Warning 18 nd Violation:$50administrativefee 2 rd 3Violation:$100administrativefee th 4Violation:Finenotmorethan$2000 th 5Violation:Finenotmorethan$2000 (b)Meterslargerthan1"indiameterandsmallerthan3"indiameter st Violation:Warning 1 nd 2Violation:$100administrativefee rd 3Violation:$250administrativefee th 4Violation:Finenotmorethan$2000 th 5Violation:Finenotmorethan$2000 (c)Meters3"indiameterandlarger st 1Violation:Warning nd 2Violation:$250administrativefee rd 3Violation:$500administrativefee th 4Violation:Finenotmorethan$2000 th 5Violation:Finenotmorethan$2000 Stage3 (a)Meters1"indiameterandsmaller st 1Violation:Warning nd 2Violation:$100administrativefee rd 3Violation:$200administrativefee th 4Violation:Finenotmorethan$2000 th 5Violation:Finenotmorethan$2000 (b)Meterslargerthan1"indiameterandsmallerthan3"indiameter st 1Violation:Warning nd 2Violation:$200administrativefee 19 rd Violation:$500administrativefee 3 th 4Violation:Finenotmorethan$2000 th 5Violation:Finenotmorethan$2000 (c)Meters3"indiameterandlarger st 1Violation:Warning nd Violation:$500administrativefee 2 rd 3Violation:$1000administrativefee th 4Violation:Finenotmorethan$2000 th 5Violation:Finenotmorethan$2000 Stage4 (a)Meters1"indiameterandsmaller st 1Violation:Warning nd 2Violation:$200administrativefee rd 3Violation:$400administrativefee th 4Violation:Finenotmorethan$2000 th 5Violation:Finenotmorethan$2000 (b)Meterslargerthan1"indiameterandsmallerthan3"indiameter st 1Violation:Warning nd 2Violation:$400administrativefee rd 3Violation:$1000administrativefee th 4Violation:Finenotmorethan$2000 th 5Violation:Finenotmorethan$2000 (c)Meters3"indiameterandlarger st 1Violation:Warning nd 2Violation:$1000administrativefee rd 3Violation:$2000administrativefee 20 th Violation:Finenotmorethan$2000 4 th 5Violation:Finenotmorethan$2000 FlowrestrictorsmaybeplacedbyDWUinlinesaftertwo(2)violationshaveoccurredtolimittheamountof waterpassingthroughthemeterina24hourperiod. TheCityofDentonUtilitiesreservestherighttotemporarilydisconnectwaterservicetothecustomeraftertwo (2)violationsofthePlanhaveoccurred.Servicesdiscontinuedundersuchcircumstancesshallberestoredonly uponpaymentofareconnectioncharge,herebyestablishedatanamountnottoexceed$135.00atthistime (orassubsequentlyadjustedupwardordownwardbyCityordinance),andanyothercostsincurredbytheDWU indiscontinuingservice;anduponcorrectionofthecauseoftheviolation.Inaddition,suitableassurancemust begiventotheDirectorthatthesameactionwillnotberepeatedwhilethePlanisineffect.Compliancewith thisPlanmayalsobesoughtthroughinjunctivereliefintheDistrictCourt. APPENDIXA ListofReferences 1.TexasCommissiononEnvironmentalQuality:{ ·;©ConservationPlansforMunicipalUsesbyPublicWater {Ò¦¦z;©r|TexasAdministrativeCodeTitle30PartISubchapterA§288.2,effectiveOctober7,2004 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 21 AGENDA INFORMATION SHEET AGENDA DATE: March 6, 2012 DEPARTMENT: Finance ACM: Jon Fortune SUBJECT Consider appointments to the Citizen Advisory Committee for the proposed 2012 Bond Election. BACKGROUND As discussed during the development of the FY 2011-12 Budget, the improvement of our street infrastructure is a major initiative for the City. The Strategic Plan approved by the City Council in April 2011 reinforces this concept in Key Focus Area 2: Public Infrastructure. Specifically, goals 2.1 and 2.5 of the Strategic Plan provide the following objectives related to street infrastructure: Objective 2.1.2 Develop a long-range strategy to transition street funding to achieve the OCI criteria. Objective 2.5.2 Develop and implement financing plans for identified infrastructure needs. As a result of this approach, the City significantly increased street maintenance funding from $2.8 to $3.5 million in FY 2011-12. Additionally, it is planned that this funding level will increase on an annual basis to $5.8 million by FY 2015-16. While this increase in funding is noteworthy, it is still significantly below the $10 million in annual funding that is needed for street maintenance. As a result, further enhancements to maintenance funding will also need to be considered in future budget cycles as well. In addition to the street maintenance funding, the City also needs to provide a capital investment of approximately $4 million per year to reconstruct existing streets. As a result, staff is proposing the development of a $20 million street infrastructure bond program to address this need. The program assumes no tax rate increase, and it is expected that voters would be requested to approve the program in the November 2012 election. During prior discussions, the City Council has indicated a preference for a twenty-one (21) member Citizen Bond Advisory Committee (up to 3 appointments for each City Council member). As such, the purpose of this item is to request City Council appointments to the Citizen Bond Advisory Committee. Agenda Information Sheet March 6, 2012 Page 2 To solicit public interest, staff concerning the appointment process. Citizens interested in serving on the bond advisory committee were encouraged to . In addition, the notice has been distributed on social media channels as well. The names of all citizens that respond to this request will be provided to the City Council prior to the discussion of this item on March 6. The City Council will have an additional opportunity to make appointments to the Citizen Advisory Committee on April 3. The charge of the Bond Advisory Committee and committee appointments are expected to be formally approved by the City Council on April 3. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) At the January 31, 2012, retreat, staff briefed the City Council on the proposed 2012 bond election priorities and schedule. On February 6, 2012, the City Council discussed the proposed bond election and indicated a preference for a twenty-one (21) member Citizen Bond Advisory Committee (3 appointments for each City Council member). On February 21, 2012, the City Council discussed the proposed bond election, calendar of events, and advisory committee appointment process. Respectfully submitted: Bryan Langley CFO and Director of Strategic Services