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CITY COUNCIL AGENDA PACKET
October 26, 199?
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AGENDA ~ndaNo ~.s:.1~
CITY OF DENTON CITY COUNCIL AQe~daiteM
October 26, 1993 We
Work Session of the City of. Denton City Council on Tuesday, Oc6ber
26, 1993 at 5:15 p.m. in the Civil Defense Room of City Hall, 215
E. McKinney, Denton, Texas at which the following items will be
considered:
5:15 p.m.
NOTE: Any Stem listed on the Agenda for the Work Session may
aleo be considered as part of the Agenda for the Regular Session.
1. Executive Session:
A. Legal Matters Under TEX. GOVtT CODE Sec, 551.071
1. Consider action in Williams, et al v Cabrales st al.
B. Real Estate Under TFX. GOVT CODE Sec. 551.072
C. Personnel/Board Appointments Under TEX. GOVT CODE
Sec. 551.074
2. Receive a report, hold a discussion and give staff direction
regarding the City Employees' Health Insurance Program for the
plan year beginning January 1, 1994.
3. Receive a report, hold a discussion and give staff direction
regarding the City's Wellness Program for employees.
4. Receive a report, hold a discussion and give staff direction
regarding amending the zoning ordinance,
5. Receive a report, hold a discussion and give staff direction
reyarding code enforcement activities.
Special Call Session of the City of Denton City Council on Tuesday,
October 26, 1993 at 7s00 p.m, in the Council Chambers of City Hall,
215 E. McKinney, Denton, Texas at which the following items will be
considered:
7:00 p.m.
1. Consider approval of a resolution supporting the University of
North Texas request for Division I football status.
2. Receive a report regarding a possible half cent sales tax to
reduce the property tax.
A. Dr. Weinstein
B. Comments from Other Committee Members
C. Discussion regarding Council procedures to consider the
issue and give staff direction.
Agenda No 93 - of
City of Denton City Council Agenda Agandaitem------ =
October 26, 1993
Page 2 Oafs /o
C E R T I F I C A T E
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 1993 at o'clock (a.m.)
(p.m.)
CITY SECRETARY
NOTE: THE CITY OF DENTON CITY COUNCIL CHAMBERS IS ACCESSIBLE IN
ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE
CITY WILL PROVIDE SIGN LANGUAGE INTERPRETERS FOR THE
HEARING IMPAIRED IF REQUESTED AT LEAST 48 HOURS IN
ADVANCE OF THE SCHEDULED MEETING. PLEASE CALL THE CITY
SECRETARYtS OFFICE AT 566-8309 OR USE TELvCOMMUNICATIONS 1
DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-RELAY-TX SO
THAT A SIGN LANGUAGE INTERPRETER CAN BE SCHEDULED THROUGH
THE CITY SECRETARY'S OFFICE.
ACCO0163
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DATE: October 26, 1993 al,z 67
D
ELTY 44_.K4LL PEN-91 FORM-Al
WORK SESSION
TO: Mayor and Members of the City Council
FROM: Lloyd V. Harrell, City Manager
SUBJECT: City Employee's Health Insurance Program - Effective January 1,
1994
RF_Q= iQAMN!
It is the staff's recommendation that the City Council authorize staff to
enter into a contract with Harris Methodist Health Plan (Harris Methodist
Plan) to provide health insurance coverage for City of Denton employees and
their dependents for the plan year January 1 to December 31, 1994.
On September 240 1993, the City received eight bids for a fully-insured
managed care health insurance program. Six bids were on fully-insured
basis, and two were on self-insured basis. The two self-insured bids did
not meet specifications. Staff reviewed the six proposals that met our bid
specifications for a fully-insured program. The following criteria were
used to evaluate the bids:
1) total plan cost using monthly premiums quoted and projected
enrollment (City cost and employee cost);
2) length of rate guarantee;
3) schedule of benefits and plan design features, such as co-payment,
deductibles and out-of-pocket maximums;
4) Network providers (Doctors, hospitals, and other medical providers)
5) ability to provide quality service for providers, employees and
dependents, and administering contract provisions.
Considering the combUied relative importance of these criteria, our analysis
shows that the Harris Methodist Plan is the most advantageous to the City,
Exhibit I-A and I-B displays the variance between the City cost, employee
cost, and combined plan cost for the two lowest cost bidders (Harris
Methodist Health Plan and Aetna/Southwest Health Plan) and is compared to
the proposed renewal rates of Philadelphia American Life Insurance Company
(PALICO).
As shown in Exhibit I, by awarding a contract to Aetna/Southwest, the City
could save approximately $398,000 over the current proposed PALICO renewal
costs for the 0 months remaining in the 1993/94 budget. However, It is
still felt that the Harris Methodist plan is the most advantageous plan
overall because depondent (family) premiums are considerably less than
Aetna's dependent (family) premium rates.
41
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October 20, 1993
City Council Report on Employee Health Insurance
Page 2
Employees who cover dependents (and pay this cost) would pay considerably
more out of pocket if the City placed its health insurance coverage with
Aetna (see Exhibit III for premium rate comparisons). In addition, Harris
Methodist has assured the City that it will guarantee that the HMO component
rates will not increase more than a total of 15% over a 3 year period.
There Is no guarantee, beyond one year, against any rate increases for
either Aetna or PALICO. Thus, with the Harris Methodist plan, the City
would be in a position to better budget for and control long-term health
insurance costs. The renewal rates quoted by our current vendor,
Philadelphia American Life Insurance Company (PMICO), are higher than
Harris Methodist Plan's rates.
Exhibit II provides an analysis of the advantages and disadvantages of each
of the
three health insurance programs under consideration. Based on these
issues
It 1s the staff's recommendation to
place our health insurance
coverage with Harris Methodist Health Plan.
We are proposing the Harris Methodist Plan's Options 1 and III to employees
in 1994. This will provide employees an opportunity to choose during
enrollment either:
o a Health Maintenance Only (HMO) Only - Option I
Q8
o an HMO " Indemnity Plan - Option III
Exhibit III shows the monthly premium rates for the two Harris Methodist
plans and the same two options with the Aetna plan compared with the
proposed PALICO premiums.
Our cost-analysis of the Harris Plan shows that the City would be
approximately $201,710 under the 14% increase currently in the 1993/94
health Insurance budget (see Exhibit IV). This assumes that the City's
contribution for ill employees would be based on the "Employee Only" premium
($188.60) for the Harris Methodist HMO Only (Plan I).
Tho Employee Insurance Committee (EIC) has reviewed the Harris Methodist
Plan and unanimously agreed to recommend it to the Executiva Committee and
the City Council. Following the Executive Committee's approval of the EIC's
recommendation, staff requests Council direction to:
o develop a service agreament with Harris Methodist Health Plan to be
brought to the Council to consider for approval in November, 1993; and
o develop a transition and open enrollment plan 0 implement the Harris
Plan, should the City Council give staff the final approval to place
the employee health insurance program with Harris Methodist Health
Plan.
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October 26, 1993 Date
City Council Report on Employee Health Insurance ~y 51
Page 3
BACKGROUND:
In June 1993, the City began negotiations with Philadelphia Life Insurance
Company (PALICO), the current employee health insurance carrier. In a
letter to the City, dated August 9, 1993, PALICO outlined the conditions
under which it would renew its contract with chi City of Denton (see Exhibit
V). Although a risk-sharing arrangement was one of the conditions for
PALICO's renewal with the City in 1994, there were other intervening factors
that had to be resolved to ensure that we had stable and guaranteed rates in
1994. There were several negative contingencies built into PALICO's
renewal. Thus, staff decided to re-bid the health plan to ensure we had a
back-up position in the event our negotiations with PALICO felled to
guarantee a stable health insurance program during the 1994 plan year.
Exhibit VI provides a comparison of the benefits, coverages, and costs (co-
pays, deductibles, out-of-pocket maximums, etc.) of the Harris Methodist
Plan, Aetna/Southwest Plan, and the proposed PALICO plan. This display
shows that Harris Methodist Plan offers employees more benefits at lower co-
payments, deductibles and out-of-pocket maximums.
An evaluation has also been ccdrpleted on the network of physicians,
hospitals, and other medical providers. Exhibit VII provides the listing of
local providers for the Harris Methodist Plcn, Aetna/Southwest Plan, and
PALICO. PALICO has a significantly larger network of providers. Howover,
the concern for the City employees was that the PALICO renewal required the
employee to initiate and be responsible to any referral to a specialty
doctor. Thus, the Employee Insurance Committee felt it would create an
additional burden on employees and providers to effectively arrange proper
and timely care. While the Harris Methodist network is not as extensive, it
is a sound, stable, and Denton established group. We have further
communicated to Harris Methodist our desire to have additional local
providers (Including Denton Regional Medical Center) in the network (see
Exhibit VIII). While they have indicated they cannot accomplish this before
January 1, 1994, they will review the providers in the first quarter of 1994
and consider additional providers (see Exhibit VII).
The final recommendation for Harris Methodist Health Plan was based on:
1) Improved plan design and coverage
2) lower combined plan cost to both employees and the City, and a
guaranteed 3 year not to exceed 15% rate Increase
3) positive references of both employees and providers
Overall, the Harris Methodist Plan was rated more advantageous to the
employees and the City. The Harris Methodist Plan offers a better plan
design and coverages. Compared with the PALICO's proposed 1994 premium
rates, the Harris Methodist Plans (Options I and III) offer premium rates
for family coverage that are substantially tower than PALICO's rates. Our
evaluation of City employee's selection of dependent coverage shows that
when health premium for family coverage is high, family enrollment tends to
decline. The Harris Methodist Plan's family pramium would encourage those
ApendaNo, w/
Agenda
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October 26, 1993 Da Is
City Council Report on Employee Health Insurance `f
Page 4
employees who could not afford family coverage under the current one-option
plan with PALICO to enroll in family coverage through the Harris Methodist
HMO Only.
While on the surface the Aetna proposed plan offers considerable savings to
the City over that budgeted, it has several negative features:
1) Higher dependent (family) premiums so that employees who cover
dependents would bear an additional cost or not cover
dependents at all; no second or subsequent rate increase
guarantees
2) Limited access to pharmacies (Eckerd's only)
3) Limited provider network and concerns about the stability of
the current network
4) No in-Denton representative to assist employees, dependents,
and providers with problems and questions
6) No mental health coverage expect through network providers; no
mental health providers listed for Denton
PROGRAM, DEPARTMENTS OR GROUPS AFFECTED:
The employee Health Insurance Program covers all regular full-time and part-
time employees in all City departments.
ElFCAL INPACT[1
If the Harris Methodist Plan 1s implemented on January 1, 1994, the City's
cost for employee health insurance coverage would be reduced substantially
from the proposed PALICO plan of 1220.32 per employee per month to the
Harris Methodist Plan of $192.60 per employee per month. The estimated
difference for the City over what was budgeted in 1993/94 is $201,770 (and
1121,663 in General Fund).
Respec lly submitted:
Q 4~Z
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L oyd V. Harrell
City Manager
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October 26, 1993 pate `
Cit) Council Report on Employee Health Insurance
Page 5
Prepared by:
Thomas W. Klinck; Director of Human Resources
Approved:
Betty McKean, Exe utive Director
Municipal Servic and Economic oevelopment
ecrpt/if, tfr
Prsparod: fo/!1/N
Apei►OaNo,~ -
We Exhibit 1
Inertl3b.uk1 EXHIBIT I-A
AETNA HEALTH PROORAH COST AS COMPARED TO PROPOSED PALICO COST (6.12K)
...................................................................................................1............
Of)TIG:l $I: PLAN III TOTAL PLAT! COST 1
11 JANUAAY 1. SEPT 30, 1114 1; AETNA VS PALICO
H92 ONLY 313/520 Doctor Co-Days; 11 .......................................1
60% Hospitali Prosolptlon Drugs 11 TOTAL TOTAL 1; /TOTAL CITY 44 TOTAL EE
110 Co-pay CITY 13/94 EMPYEE TOTAL 1; EXTRA EXTRA
11 COST COST PLAN COST 11 SVGS/(COST) SVGS/(COST)
ENROLL OUOTS CITY'S COSTo EE COST 1 "IS 3 X065 1 lolls 1 "is 1 Molls
.1--------------------- -11
Eaployss Only 62 $151.35 1151,33 10.00 5111,716 V H11,718 11 (140,531) (11,225)
Employee op. 31 237,62 151.31 136.24 11 42,235 352,661 311,303 11 115,125) $666
Employee Child 123 257.34 151.33 105.16 11 170,303 245,410 415,712 11 (611765) 1150120
Employes Pam. 121 336.01 151.51 234.63 11 164,653 615,126 111,171 ;1 (53,603) 611,231
il
TOTAL 363 11 1461,101 $1,413,204 51,902,312 II ($177.447) 623.120
II 11
■IalaMaasasuasu aslaaasuasasvaRas asausasa uasa uRUaaRVavRRRRas uause•uusuuasaas 62444 uaatea cafe.HasuuRaaseRauasuas
OPTION e2: PLAN I 11
HMO S Indemnity; HMO 3151320 Doctor Co-pay II 11
10% Hospital: Indemnity 6500 Deduct. TOTAL TOTAL 11 $TOTAL CITY 44TOTAL EE
920 Co-Pay: 70% Hoop,; Pro$, Drugs 110 CO-pay 11 CITY 93/14 EMPYEE TOTAL 11 EXTRA EXTRA
H COST COST PLAN COST SVGS/(COST) SVGS/( COST) N
ENROLL` OWTE CITY'S COST♦ EE COST 1 110113 3 MONS 1 "is 1 MOILS 1 "is
............................................................................1i----------------------------
EnPIaYN Only 231 5116,02 1151,31 521,34 11 1322,191 131,034 (361,!13 II (5147,144) 525,3!6 0
Employs* Sp, to 334.44 151.33 162,06 11 3!,510 551,003 5301513 11 (14,331) 112,162 i
Employee Child 54 259.24 151.36 147,66 11 73,511 391,211 471,751 11 (26,611) 626,6!5
Employs# Pam. 127 446.16 151.36 297.16 11 113,02? 11201,742 11374,769 11 (62,774) 161,!31
11 .....................................:1............................ 1 1
TOTAL 411 li 560!,002 12,162,990 32,7!6,112 11 (1220,143) 11551563 U
II 11 ~
i i aIRAs at at ris e a asfas s 2AMaAas2 2 22 Rasa aJ■ as ■ a■ as as as aaas v a A a asans a 121
TOTAL PLAN: OPTIONS 1 AND 2 11 11,016,111 62,403,114 14,701,304 11 (5311,310) 5111.403
$Ewtra cost to the City because of more City contribution it we 3o with PALICO In 1114
449avinge to employees because City will contribute more if we go with PALICO In 1114
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EXHIBIT i-6
HARRIS METHODIST HEALTH PROGRAM COST AS COMPARED TO PROPOSED 1ALI:O (6.T2%)
11. - 1--
1 TOTAL PLAN COST
OPTI d1 Pit PLAN I
11 JANUARY 1, SEPT 70, 1914 HARRIS V! PAU CO
HMO ONLY 113/120 Doctor Go-pays; .......................................11............................
„
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10% Hospital: Presciption Drugs 11 TOTAL TOTAL i1
910 00-OILY li CITY 03/14 EHPYEE TOTAL 1i TOTAL CITY TOTAL EE
11 COST COST PLAN COST li JVOS/BOOST) SVOS/(GUST)
ENROLL OIXDTE CITY'S COST# EE COST 11 / MdIS / HO+S 1 MON! 11 1 "is I MONS
11- I 1;.............
Employ" only 62 6166130 1188,30 10.00 11 1131,117 1 1171,117 11 ($is, If) ($3.225)
Employ" 6O• 11 212.16 176150 104.46 11 $2,312 27!,413 321,066 1' (411") (t1)17!)
Employ" Child 125 233.13 165.50 41.63 11 212,067 111,271 351,301 1i 120,02!) (171 376)
Employ" Pam. 121 311.45 161,50 121.95 11 205,211 372,443 $77,720 II (11,311) (114 736)
TOTAL •••--351 11 1601,044 {715,176 65,404,220 11 (157,3121 (111!,531)
„ 11
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OPTION 921 PLAN III i1 I.
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HMO 1 Indemnity; HMO 955/120 Doctor Ca-PAY 11
10% Hospital Indemnity 8500 Deduct, I; TOTAL TOTAL 11 TOTAL CITY TOTAL E1
620 Cc-pay; 70% Hoop.; Pr". Drugs 110 Co-p►v 11 CITY 17/14 EMPYEE TOTAL 11 ADDITIONAL ADDITIONAL
;I COST COST PLAIT COST 11 SVGS/(C061) SVO!/(COST) 2 Iff
ENROLL OLX7TE city's COST# EE COST 11 1 MONS 1 "49 1 MONS 11 1 HOTS ...-._.1 MOBS
i1........... v
Employee Only 277 $217.90 1141.50 121.30 11 1402,071 657,171 14511504 i1 ($37,167) 1!!,W{ 1
19,111 132,062 502,160 11 (4,141) 97,!16 7
Employee !p. 21 337.51 166.50 119.09 ;
Employee Child 54 291.15 111.30 103.35 11 11,011 271,464 163,075 11 (11651) 13,267 •
Employee Pam. 127 368.06 111150 171.33 11 215,450 $14,696 11U,351 11 120,3<!1 (611,128) 1 J~
\
TOTAL -••-•415• •.-1756,336• !1,!16,77/ 621135,114 11 (111,601) 121!
i1
11 11
TOTAL PLAN: OPTIONS 1 AND 2 i1 51,307,311 12,171,954 63,539,133 li (6121021) (114!,261)
4EILtea cost to the City and employees if we to with PALICO in 1194
anoa ao _ .
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Exhibit 1I
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HARRIS METHODIST HEALTH INSURANA1e 3
PROPOSAL ..~5/
ADVANTAGES/DISADVANTAGES
o Offers employees an option and choice between a high and
low plan designs, coverages, and premiums
o Superior plan design - lower co-pays, deductibles and
out-of-pocket maximums
o Doctor and other health provider network sound and
stable (16 Primary Care Physicians in Denton)
o Network includes Denton HCA hospital; have commitment to
evaluate and potentially add Denton Regional Medical
Center
o Proposal endorsed by Employee Insurance Committee and
Executive Committee
o very positive evaluation by employees, dependents, and
providers
o Improved ability to budget, control, and manage long-
term costs with a 3 year rate guarantee not to exceed a
total of 15% on HMO component
o Lowest costs for dependent coverages; improves
employee's ability to cover all family members
o Lowest overall cost for total plan (City's expense
and costs for dependent coverage)
o In-Denton representative to assist with employee,
dependent, and provider questions and problems
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PALICO HEALTH INSURANCE
PROPOSAL
ADVANTAGES/DISADVANTAGES
o Provides one plan design, schedule of benefits,
coverages, and premiums
o Provides a stable and consistent health insurance
program - employees, dependents and providers are
familiar and knowledgable of coverages and procedures
o Plan design and coverages less desirable than other
options (higher co-pays, deductibles, and out-of-pocket
maximums)
o Doctor and other health provider network very expansive
(40 Primary Care Physicians in Denton)
o Referral to Physician Specialists necessary; employee
initiates and responsible for referral through Cost Care
o Network includes both Denton hospitals
o Concerns about quality of administration services
(claims payments, provider payments, balance billing,
etc.)
o No second or subsequent rate guarantee; future premium
increases unknown
o Highest cost for City's and dependent coverage expense
(8.72% higher than 1993)
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10/21/93
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AETNA/SOUTHWEST HEALTH INSURANCE Cble 1~~~at/er~3
PROPOSAL
ADVANTAGES/DISADVANTAGES
o Offers employees an option and choice between a high and
low plan designs, coverages, and premiums
o Doctor and other health provider network very restricted
and limited (only 11 Primary Care Physicians in Denton)
o Network includes both Denton hospitals
0 Stability of network (doctors and both hospitals) is
unknown and questionable
o Mental health coverage only if by network providers;
services provided through Primary Care referral and/or
crisis intervention "hot-line"; no direct Denton
providers on provider list
o Concerns about service expressed by references
o Limited COBRA administration
o No second or subsequent rate guarantee; future premium
increases unknown
o Lowest cost for City's expense
o Higher costs for dependent coverage
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1 Agenda No.
AQendalten~!Oa~
Insrt93x, wk 1 Dale-ID--
21-Oct-93 EXHIBIT III
HARRIS METHODIST HEALTH PROGRAM
PREMIUM COMPARISON TO PROPOSED PALICO PREMIUM
ACTIVE EMPLOYEES
OPTION 111: PLAN I
HMO ONLY $15/$20 Doctor Co-pays;
80% Hospital: Prescipticn Drugs
S10 Co-pay
MONTHLY
DIFFERENCE
--QUOTE- CITY'S COST EE COST (1994)
Employee Only 5188.50 $188.50 $0.00 (12.50)
Employee Sp. 292.98 188.50 $104.48 (29.30)
Employee Child 253.13 188.50 64.63 (27.89)
Employee Fam. 318.45 188.50 129.95 (88.85)
OPTION 02: PLAN III
HMO b Indemnity
HMO $15/$20 Doctor Co-pay; 80% Hospital
Indemnity $500 Deduct.; $20 Dr. Co-pay;
70% Hosp.; Prescription Drugs $10 Co-pay
MONTHLY
DIFFERENCE
QUOTE CITY'S COST EE COST (1994)
Employee Only $217.80 $188.50 $29.30 16.80
Employee Sp. 337.59 188.50 149.09 16.31
Employee Child 291.85 188.50 103.35 10.83
Employee Fam. 368.08 188.50 179.68 (39.22)
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(EXHIBIT III continued)
Insrt93x.wk1
AETNA HEALTH PROGRAM
PREMIUM COMPARISON TO PROPOSED PALICO PREMIUM
ACTIVE EMPLOYEES
AETNA OPTION 01; PLAN III
HMO ONLY $15 Doctor Co-pay;
$150/5 days Hospital: Presciation Drugs
$10 Co-pay
MONTHLY
DIFFERENCE
QUOTE CITY'S COST EE COST (1994)
Employee Only $151.38 $151.38 $0.00 (12.60)
Employee Sp. 287.62 151.38 138.24 2.46
Employee Child 257.34 151.38 105.95 13.44
Employee Fam. 386.01 151.38 234.63 16.83
AETNA; OPTION 112 - PLAN I
HMO 8 Indemnity; HMO $15 Doctor Co-pay
$150/5 days Hospital:
Indemnity $500 Deduct.; 70% Hospital
Prescription Drugs $10 Co-pay
MONTHLY
DIFFERENCE
QUOTE CITY'S COST EE COST (1994)
Employee Only $176.02 $151.38 $24.64 12.14
Employee Sp. 334.44 151.38 183.06 49.28
Employee Child 299.24 151.38 147.86 6E.34
Employee Farm. 448.86 161.38 207.48 7s.68
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AgendaltertL.,a,.„_._ i
Insrt93x.wk1 (EXHIBIT III continued) "yJ
PALICO HEALTH PROGRAM v
1994 PREMIUM COMPARISON
ACTIVE EMPLOYEES
PROPOSED PLAN
Network 8 Non-Network
Network $15/$65 Doctor Co-Rays;
$500 Hospital: Non-Network $1000 Deduct.
70% Hosp.; Presciption Drugs $150 Deduct.
$5/$15 Co-pays
QUOTE CITY'S COST EE COST
Employee Only $218.80 $206.30 $12.50
Employee d Sp. 340.08 206.30 133.78
Employee+Child 298.82 206.30 92.52
Employee 3 Fam 425.10 206.30 218.80
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Exhibit IV
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Nine93J.wkl EXHIBIT IV 22-Oct-93
08;31 AM
1913/94 BUDGET
WEALTH INSURANCE
DIf FERENCE 1993/14 TOTAL HEALTH INSURANCE BUDGET
11f111111s111 Ntft1l 11111 1f 1111! tt1ttlll!lfi tf1p111 N111it11p tlN Slf 1l1tt11s/11s1f1.1t11111s I Sl 11f 1!111•
6000ETEO ADJUSTED DIFFERENCE
PROPOSED PROPOSED 1193114 1193/14 VARIANCE JAN. 1194 -
1991 1191 CITY'S CITY'S BUDGETED THRU
Coverage Enrollment HARRIS CITY'S PER 40. PER NO. MINUS DIFFERENCE SEP. 1194
(00.) (Mo.) 14094 1166.90.14 ADJUSTED PER MO. 0 MOS)
Employee only 375 1188.50 1116.50 1220.32 1112.50 127.11 910,430.82 113,175.62
Employ" A Spouse 71 292,16 188.50 220.32 112.50 27.11 2117.36 11,776
Employee 1 Children 177 253.13 158.50 220.32 112.50 27.61 4923.25 41,701
Employee 1 Family 175 718.45 186.50 220.32 192,50 27.81 4867,62 43,809
TOTAL BD6 122,419 9201,770
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BREAKDOWN Of COST DIFFERENCE T
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GEN. RECR. EL(CTR. WATER/MW Wit. N/CAP. OTHERS TOTAL d
NO. OF EMPLOYEES 166 4 124 48 51 20 8 741
1 y
PERCENTAGE BY FUNDS 85.511 0.54% 16.73% 6.11% 6.86% 2.10% 1.06% 100% R
1
DIFFERENCE BY FUNDS 132,335 7,081 33,764 13,070 13,687 5,446 2,178 1201,770 I.
tt11tl1lt!!tl It111t1~11f11111s11tl111lt1lf 111/111111 tl1111111/t11t11tt11.1111111111111t1111111f 11111/11111 U
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Exhibit V
MUDELPFRA AM CAN LIFFINSURAN
P 0 a" 2665
HOualdt. Texas r>zSa
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agenda Mo. 99-0~/
August 9.1992 Agerldaliem ZA
Tom KGnd Cate /U :A-- Z6
Director of Human Resources
City of Deotoa D
324 East McKianq
Deotoo TX 76201
Re: City of Denton I/t/94 Renewal Esttiosate
Dear Sir:
I an writing you to provide an estimate of the renewal rate increase for the City of Deoloa that will be Elective
11194,
To estimate the rate increase that will be efoctive Ull94 1 used the plan txperenca from 11192 to 6/30M. For
1992 Experience. adjustments were made to rcOm the benefit changes that were made cf Uve 111/93.
A tite Increase for vdeodar year 1994. estimatod to be 111,721,1a will be added to the current rates • this increase
assumes the following conditions will be in place when the 1994 plan year begui :
1. The 1993 Estimated Lou Ratio of 86 90%, or less. conunues.
U. The 1994 expense componenu of rcitnuon. 13,78'1.. are as follows:
A. Roster Billing.
B. Claim Processint
C. Yew Sookleu.
D. Provider Lisungs.
E. Account Manager 2sadable for Open Enrollment meeunp.
F. Account Manager 2valable rot 12 monthly meeungs with client in Denton.
G. Fees for Drug Card Admirui nuon
H. Expenses of program Coordinauon.
I Unliz,uon Rcvnew. Hospital Pre<entflcauon. and Large Cue Alazugement.
J. Fees for uutiution management of non- psychzatne claims.
K. Fed for psychsatnc, mental 2nd nenous. and drug abuse mwgemeni by tBH.
L. Provider Neuvork Contracung.
M. PrO%1derNt%%ork.%llln1enance
111. Those functions not included in ectenuon ore a follows:
A. Retiree Scnezit An2Hsts • this function is resened for Coopers and LMrnnd.
8 Other functions that Coopers S Ltbrand mar resene for rtsed.
PHILADELPHIA AMERICAN LIFE
+t
xx. v.
City of Denton 11,1/91 RCnew%) Esvnsue ,gerdaNo
August 9. 199) agendaitt nl~
Page 2
bite
lV. provider nsk sharing arrangrmenu and utrlfrauon management programs are put in place
for 1991.
A. For Physicians this would mew the present fa xhedu)es Would be maintained for
1991 and ti ithbold taraagement, of as lase i$% wouk be applied to than fen
The physidtna have conditioned acceptance of the withhold on revitw of the
schedule of ienefits.
8. Forl<(mpiW UH; would mew newly negoumW DRO x.hedules would be
established for )991 reirnbursemenlt
C. UtiliZadoo mms,crrteat programs wtU be WAblisikd for 000 ptychWrio UdUitatiaa
D. The utilization msvgeo ew program for psychiauicidrug abuse trarment
utiHzationL cumody by OR -MU be conunuai
V. There are no regulations or laws( staw federal. or loaf) or otber business emdronmental
factors that Mladelphis American Life management may consider detrimental to profitably
insuring this benefit plan.
VI. The current schedule of benefits remains the same.
I hope this renewal information meets your needs • JnoL plam tall. My direct number is (713) 3714788.
Ycun Truly.
John B. Kerr
Second Vice President and Associate Actuary
ce Davtd Palavers. Coopers & Lybrand
Ike Obi. City of Denton
John PAWL Philadelphia American Lde
Stephanie Frem Philadelphia Amencan Life
PHILADELPHbk+AMERICAN LIFE
All ~ . 1 ~'.mrin
ii
,gendaNo.
Agendaltem~
late /D 'of -92
aa~ s/
Exhibit V1
J ~~VC 1
CITY OF DENTON
COMPARISON OF BENEFITS
PALICO vs. HARRIS METHODIST
HARRIS METHODIST PAL1CO
d
REl1EElI Each employee and dependent Each employee may took care Each employee and dependent Each employee may seek ewe
must select a Primary Care Irom a physician of their choice. must select any PCP listed on the from a physcian of their choice.
Physician (PCP) from the Harris provider list.
Methodist Health Plan Netwurk
PROVIDER NETWORK
Denton Regional Medical and
Denton HCA Community Hospila' Donlon HCA Comrrluniry Hospital
Haab NEB Hospital
13 PCPs, 26 Specialists 40 PCPs, 60+ SpedallMs
IJbertsons, Eckerds, Kmart, and Albertsons, Eckards, Kmart
Kroger pharmacies Kroger pharmacies, Walmart and
some Independent pharmacies
LIFE TIME MAXIMUMS
Major medical None N" $1.000,000 $1.00,000
Mental disorders None None $10,000 $10,000
ANNUAL DEDUCTIBLE
• Individual No deductible $500 per calendar year $500 per calendar year, plus $150 $1,000 par calendar year
drug deductible
family No deduclible $1,500 per calendar year $1,500 par calendar year $1,000 per calendar year
MAXIMUM OUT-OF-POCKET
IndlNdual $2,000 per calendar year $4,000 par colander year $2,000 per calendar year $6,000 per slender Year
• family $4,000 par calendar year $8,000 par calendar year $6,000 per calendar year $16,1100 Lx calendar year
PRE-EXISTING CONDITIONS
No Exclusions Diagnosis or treatment received Yet, 3H2 Y", $112
Al six (6) months preceding
employee or dependent offeclWa c
date Is limited.
CLAIMS FORMS
No claim forms to file Employ" must file claim form for Employee must file Initial calm Employee mart Ole ti claim
reimbursement form for rolmbinsenent 11!fm for rdpm I
~1
1
10113193 PAGE 2
CITY OF DENTON
COMPARISON OF BENEFITS
PALICO vs. HARRIS METHODIST
HARRIS METHODIST PALICO
PRESCRIPTION DRUGS
Participating Pharmacy: $10 Covered 70% after a $500 annual Participating Pharmacy'. $150 No!-Covered
co- payment far up to a 30 day deductible. deductible, $5 generic drug
supply, co-pament. for s up to a JO drug
day
supply,
Mail Order: 610 co-paymanl for Mail Order: $150 deductible, $5
up to a 90 day supply. generic drug co-paymant, $15
brand drip co.paymant for up to a
100 day supply.
OUTPATIENT SERVICES
Physician allies visits for diagnosis, $15! Primary Care Physician per $20 par visit after a $500 annual $15 per visit; plus up to $50 Covered 70% slier a $1,000
care and treatment of [liness and visit deductible, for dlagnostie procedures. annual deductible.
Injury, S20/specialist per visit.
Adult health assessment, well child $151 Primary Cara Physkian per Coverod 50% after a 5500 annual $15 per visit; plus up to $50 Not-Covered
care and well roman examinations v{sil. deductible, for dlegrwstic procedures.
$2015pecialls! per visit,
OBIGYN no referral
requirement.
Mantel health. $20 per visit. Up to 20 visits par S20 Per visit after a $500 annual $15 par visit Covered 70% after a $1,000
year for short term crlsis deductible. Up to 20 visits per $10,000 maximum coverage annual deductible. $10,000
interwntlorl and treatment, year for short term erilis maximum Coverage.
Intervention and treatnront.
Ovtppstlent surgery, anesthesia and Physican • $50 co-paymem $500 annual deducllbts Physician • 1115 per visit Covered 70% after a11,
Facility • $100 co, payment Physician • $50 co-payment Facility • $75 per visit annual deductible. A
trwtrnenls performed In the
's office, surgery renter or FeelNty • $100 co. payment
~at~
01pnostle services, laboratory testis Covered 100% Covered 70% after a 5500 annual Up 10 $50 per visit Covered 70% after $1, c
and a-rays deductible. annual deductible.
IftyQN28dws, and lNectlona Covered 100% Covered SO% after a $500 annual $15 per visit Not•Covww
ks -A
deductible.
t
EmerWicy roan visits or Urgent Care Covered 00% Covered 70% after a SSW annual $16 per visit $75 per will
Cenlw deductible, t\ \
Arhbi lone services, for th"Calty Covered 00% Covered 70% after a $500 annual Covered 00% Mor a S500 annual Covered 00% after a $ I,
rwoosary emergency Care, deductible. deductible. a-inual deductible.
it
10113!93 PAGE 3
CITY OF DENTON
COMPARISON OF BENEFITS
PALICO vs. HARRIS METHODIST
HARRIS METHODIST PALICO
INPATIENT SERVICES
Semi-private roan, Including all Covered 80% Covered 70% after a $500 annual Covered 100% after a 5500 Covered 70% after a $300 per
sarvlces and medical supplies, deductible, annual deductible, admisslon deductiLie plus a
$1,000 annual deductible.
All Myslelan fees Including anesthesia Covered 80% Covered 70% adar a $500 annual Covered 100% after a $500 Covered 70% after a $1,000
while a member is hospitalized deductible. annual deductible, annual deductible.
Up to 30 inpallsnt days per calendar Covered 00% Covered 70% alter a $500 annual Covered 100% after a 3500 Covered 70% after a $300 per
year for mental hsalih services. deductible. annual deductible, admisslon dedur.lible plus a
$1,000 annual deductible.
Q AL
~1
PAGE 1
.Y ~JrH
CM OF DENTON
COMPARISON OF BENEFITS
PALICO vs. AEMa
AEdia PALICO
BF~£IY Each WnPlay • and dos wdwt Each employ" m+y took oan Each amplayea and dap~ Eadi wn lam may snk ew
mutt sobal a Prirrwry Can hom a physkhn d 0,Wr dviee. muM solid any PCP Asted on 2w kom a 0"pdan of #*F ctiaka.
Ust.
Ptrytkiw+ (PCP) horn the AFtna
Hm* Plan U*00 k.
PROVIDER NETWORK 25 Hotpitds • inaluduV Denton Nnion R.yonW Me" and
Ropier 1Ma6oa1 Cor4w, Dw•t«+ Darlon H" Carmui ly HotsW
HCA Comm* H000W. I
Lawbvlt~ MwnaW wd Wx
Me" NOW.
21 PCPs,1 OBI m and 76
300 pCPj in AEvo sw~vloo w" 40 PCPs, 60o Spod"s
Edcerdt owmad" NEwtwm, Eckwds, "K
wovw owmo os. Wakwt and
saw dopw+dwd O m oc*
LIFE TIME MAXIMUMS
major medial NaM Nww $1,000,000 $4,000,00Q
Manta dsoRk" } NO Cavwsd $10,000 $10,000
ANNUAL DEDUCTIBLE
kvdhidutl No dod x" $s00 Par edw4w yew 3 W per w yoer, Pka $1 50 $1,000 W aiwda► yar do&xftk
fw* NO deduollbia $1,500 pw alwdw year $1.700 pw ca wdw yw $31000
MAXIMUM OUT-OF-POCKET
6 d Mdwl $1, 000 pw alwtdw yaw $1,400 plus amual dadtaeSbia $2,000 pw oaiwdw year $6,000
fan* $2000 pw eaiandw year $4.500 plus art Huai dedueWo WOW Par catwdar yw $16,000 Yaw
PRE-EXISTING CONDITIONS lV t
No Eschrdons NO Ecdusksv Ysa, 3112 Yss, 3!1
CLAIMS FORMS
ft IN d claim ~ ^
No daim fomr b Ab ErV" t Ab daNn kxm for E a nand t
Y 1
5
1 0171193 PAGE ?
CITY OF DENTON
COMPARISON OF BENEFITS
PALICO v5. AEtna
AEtna PALICO
PRESCRIPTION DRUGS
Parlkip,*V P wVwy: sic Cawed 70% dW a $5W wasal pw kk*WV phenticy; WO O Not•Cowred
capsyvrwd kw up 10 a 30 day dado". diduc#* S5 garw bug
ems' ~PsNnisol. $1S band Bug
co DPmr l for up to a 30 day
SLF*.
me order ROM ma order: $1SO do$rA $5
9wwkbug oo Prfl"nk 315
brad drug ooteyvrrnt la up to a
100 day v**.
OUTPATIENT SERVICES
Plyskien at#a vhas for Qa0^osd 3151 Nmwy Can PMwm par Cawed 70% ow a Sm mew s, S w vita; Ptua uP b $60 Covered 70% ow a $1.000
4n and t o* w i of amps and vltk deducioble. fr drank voo" es. amul dadudMa
HM 315spedaaal pr vfst
. Adult heelll, aassesrasK Well cW 3151 Prtrr" Caw Physidan W Not Covred $15 per visa; plus up b 360 Not-Owsnd
cm rd well uomm aowy*wGora_ With for dh yoosft praoeAl
. MW" Poli t $10 pr vWt Up b 20 vhlls per Not CwwW $15 pr NN1 Cavemd
►br r dtnrdmr. rret $10,000mat)rWanoaerage rr.asl QO 0
O
ou"" anphoold Ord cowed 100% Covered 70% sAr a $No w W Pnyebtan • $15 per visit Cowell :1000
tromom i Pollan nsd In
deauct♦bh, faeNlpr. $73 per Nsl, am,ar
phyekl q Mae, caller or
raaw
hosollM.
01'q m 111 prvkok Wo ahoy Mole Cawed 100% Cowed 70% seller a Saco aftw Up b $so par vfslt Cowed ~ 71.000
dedKaa., anrwal
. IrrsRpozollons Old Y~eeaoeN Comvd 100% Not Cawed $15 per AM t
kj k,
• Em go y room Asft Covered 100% altar $50 Cawed 70% Mfr a SW mr4w S75 per visa f7S ea Mall
C"fty nnl dedut". j~
• kwarroO serNca. "W"Ity No Cho" comw M gfw a 3600 On w Covered 60% a* a 3600 annual cover" W% aw a $1.000
rnopsry.n "hydra dsductlble deduoMds rWwMe.d,trow
6
PAGE 3
CITY OF DENTrA4
COMPARISON OF BENEFITS
PAL ICO vs. AEtna
AEtna PALICO
INPATIENT SERVICES RETINOSK
SenA-pl Wd roam, kxkdw an j Covered 100%
farvkea andmedcal sul~piea. Covered 70% after a $500 amud 09"W 100% dW a 5500 Cwarsd
deduckWe. amuddoAxUWe. &*W&Wmdwkx*le~Dar
$1.000 anwidaducmo a
M Rryaldan fees k+cAdnq aws11 11 Coverrd 100%.
wove a w,jm to hoa avared 70% ansr a 1500 amuel Covered 100% aRer a > 600
ARged CoveriWe, Comvd 70% arm a 51,000
srrxd dedudWe. amwl dodwAblc
up b 30 h""t drys pet a wwo Cow vd 100%. (Up b 30 days) Nol Ca ora t
yew for n>orrtal heallr ft mm. amwl dsducl%le a 5500 Covavd 70% after a i700 per f
a*Yn $ lore dedoc" ow a
51,000 anroW de&c*o.
r
r
E
AgendaNo !?J -2i1
npertdaltenL ~.r3
Data ~Q a?~-
Exhibit VII
agenda No,
Ageedaltem e
Date 42 -AZ 9
HARRIS METHODIST HEALTH PLAN
Local Provider Listing
Denton & Surrounding Area
+gerdaNo
4genda~terrr
HARRIS METHODIS'P 21EALTH PLAN • PIIYSICI,INS IN DF-NrON '1110 -12--2w3
BLUCKER, THOMAS O., MD FAMILY PRACTICE PRIMARY CARE PHYSICIAN O
2509 Scriptu-e, /200
Denton, TX 76201
CUDD, WILLIAM W, Do FAMILY PRACnCE PRIMARY CARE PIfYSICWJ
2412 Old Nonb Rd., 0101
Denton, IX 762M
EVANS, SCANItY C., DJ FAMILY PRACTICE PRIMARY CARE PHYSICIAN
2412 010 North Road, /101
Denton, TX 76201
HAGE,N, DOUGIAS B., MD FAMAY PRACTICE PRIMARY CARE PHYSICIAN
2509 Scripture, f200
Donlon, TX 76201
McBRAYER, HARVARD L., MD FAMILY PRACTICE PRIMARY CARE PHYSICIAN
2509 Scripture, 0200
Denton, TX 76201
NORTH 7EXAS MEDICALSURGICAL, PA FAMILY PRACTICE
2509 Scripturc, 0200
Dcnton,TX 76201
SHELTON, 1CHN S, MD FAMILY PKACIIC'B PRIMARY CARE PHYSICIAN
2_W9 Smpture,1200
De n ton. TX 76:01
TAYLOR, EUGENE M, MD FAMILY PRAC27CI? PRIMARY CARE PHYSICIAN
1509 Scripture, /200
Denton, TX 76201
BHA7T, IHENI)RA,N N., MD INTERNAL MEDICINE PRIMARY CARE PHYSICIAN
1105 DaOu Dr, #137
Denton, TX 762M
NORRIS, JAME R, MD TNIERNAL MEDICINE PRIMARY CARS PHYSICIAN
625 Dalai Drive, 1375
Denton, TX 762W
WAHLERT, CFIARLES H., MD ~ 7ERNAL MEDICLIIE PRLMARY CARE PHYSICIAN
2509 Scriplure, i200
Denton, 7X 76201
ECKEL, BRUCE ALAN, MD PEDIATRICS PRIMARY CARE PHYSICIAN
2S 15 Scripture, suite 201
Da ntoo, TX 76NI
IANKE, MARILYN ROSE, MD PEDIAIIUCS PRIMARY CARE PHYSICIAN
2515 Scripture, TAM
Dc neon, TX 76201
McOF11EF, FRANK T, MD PEDIATRICS PRIMARY CARE PHYSICIAN
42M N.145
DENPON, TX 76207
Pap I of 3, September 24, 1993
DAVIS, GORDON W., MD A.NMItFSIOLOGY Agenda N4`4
2513 Scripture. 1200 Agenda IICnLr-~
Dcnton,,X 76201 E~t9__~ .3
GARCIA. CARLOS J., MD ANESIIIFSIOLOGY
2515 Scripture, 0200
Denton, TX 76201
GREEN, CIiRISIIA.N A., MD ANESIIIESIOLOGY
2515 Scripture, two
Denton, TX 76201
H#&17, 7AFAR A., MD ANESTIIESIOLOGY
2515 Scripture, 1200
Denton, IX 76201
POURZAN, DARIUS PE IPR., MD .ANT51IIESIOLOGY
2513 Scripture, 0200
Denton, TX 76201
CAGENI[FAD, WOMAS A., MD ENf
4402A 1-33 North
Dc mon, TX 76207
WILLIAMS. h, J. R, MD FNf
4210 Mcu, /A
Dcoton, TX 76207
FMCIIEK JOSEPH D., MD GASMOEN-MROLOGY
4405 N-135, 012
Denton, TX 76M
CILIRNLY, STAMIN J, MD GENERAL SURGERY
440LA North 1.33. #200
Denton, 7% 76201
FELDMAN,JAMESJ.,MD GENERAL SURGERY
4401A North 1.35, 0370
Denton, TX 76207
MIZER, G. LAVELI, MD GENERAL SURGERY
4401 A North 1.35, #370
Denton, TX 76207
MOSIER, CURT15 L, MD GENERAL SURGERY
1300 Fulton, 0203
Denton, TX 762M
SNORT, ARVIN D., MD GENERAL SURGERY
2509 Scripture, #200
Denton, 7X 16201
BALSLEY, JIL, GERARD C, MD GYNECOLOOY/OBSIYMCS (Oir/OYN)
1300 Fulton Ave.. /502
Demon, TX 76201
BOATW RIOHT, R. BRYAN, MD ,YNECOLOGY
4101 1.15 North, 4310
Denton, TX 76207
DMEMBA, JOI W F, MV aYNECOLOOY/OBSIITTUCS (OB/GY1)
41221-35
Denton, TX 76207
Pete 2 of 3, Septembei N, 1993 Denlon Phyelciene
t
AGandaNo .g
Agenda te(TLEE, ROBERT J. MD GYTTSCOLOGY Oahe J 49- ale.
1509 Scripture, #200 Denton, TX 76201
MANfRI, SUHAS D, MD GYNECOLOGY/OBSIEI RJCS (OB/GYN)
2W9 Scripture SL
Denton, TX 76M
WASSERMAN, ASAN S. MD GYNECOLOGY/OBSItTRJCS (OB/GYN)
NOS North 1.35. Suite A
Denton, TX 76201
WILSON, RONo&D T11OMAS, MD GYNECOLOGY/OBS YMCS (OB/GYN)
41051-33, /B
DFNDOX TX 76205
CADDY, DEBRA LOUISE, MD HEMATOLOGY/ONCOLOGY
2515 Scripture, 02M
Denton, TX 76201
ANDERSON, JOKN R, MD OTHOPEDiCS
2515 Scripture, #100
Denton, TX 76201
ANDERSON, WILLLAM JOSEPH, MD ORIIHOPEDICS/t1AND
2513 SCRIPTUM 0100
DENTON, TX 76MI
GLAIR, MAJOR E, MD ORTHOPEDICS
250 Scripture 1100
Dentun, TX 76201
McADAMS, CIWRLES A. MD ORTHOPEDICS
2515 "pture, 4100
Denton, TX 16201
PORTEMELD, RJJONDA R., MD PATHOLOGY
207 N. Bonnie Brae
Denson,'."+ 7.YADMIRA ROBERT C, MD UROLOGY
7509 Scttpiure,1100
Denton, TX 16701
TH 3.04 THOMAS T, MD UROLOGY
DeetOn Rebored Medical Censer
1.35, Suite 03M
Denton, TX 76207
DENDTSN COMMLNTIY HOSPITAL
707 N. Donnie Prot
Denton, TX 76NI
Pala 3 d J, September 71,1997 Denton nyaiclatu
1
VendaNc. 9~
Agendaltemnx
HARRIS METHODIST HEALTH PLAN • PIIYSSCIA.VS IN WAISVILLwe
-47
DAVOODI, FARIBORZ ALAN, MD FAMILY PRACTICE PRIMARY CARE PIfYSICULN
100 W, Main, #A
Lewisville, TX 75057
GARCIA CONRAD M., MD FAMILY PRACTICE PRIMARY CARE PHYSICIAN
100 W. Main
Lewisvilk, TX IM31
HAMMCkLY, MILTON E, MD FAMILY PRACTICE PRIMARY CARE PHYSICIAN
400 W. Main, #A
Lewisville, TX 75M7
SIMON, IOATIIKYN M., MD FAMILY PRACTICE PRIMARY CARE PHYSICIAN
100 W. Main, #A
Lewisville, TX 75057
DE", EMM.ANVEL F, MD INTERNAL MEDICINE PRIMARY CARE PHYSICIAN
M N. Cowan, 0102
Lt isviric, 7X 75057
DIIALTWAL, K.KDEEP S., ND INTERNAL MEDICINE PRIMARY CARE PHYSICIAN
335 W. Purnell, 0160
Ltwisvillc, IX 75057
HARPAVAT, KIRAN, MD PEDIATRICS PRIMARY CARE PIINSICL4N
560 W. Main, #45
Lewisville, TX 75057
KANADIA, K1 RAN, MD PEDIATRICS PRIMARY CARE PHYSICIAN
360 W. Main, #X5
ttwirAlle, TX W7
NOUYEN, DUY XUAN, MD PEDIATRICS PRIMARY CARE PJJYSILLAN
560 W. Main, 05201
Ltwisville, TX 75057
OGDEN,1. GLEN, MD PEDIATRICS PRIMARY CARE PHYSICIAN
560 W. Main, 0201
Lewisville, TX 75057
HAMR DAVID POWELL, MD CARDIOVAgC" DISFASE
614 Edmonds Lam #101
ltwrisville, TX 75067
MAY, DAVID C, MD CARDIOVASCULAR DISEASE
611 Edmonds tam, # 101
Lewisville, TX 73067
ALBUM JAMES P.. MD EINT
1121 W. Main, #200
Lewisville, TX 75067
SANDERS, BARRY, MD GASCROENITROLOGY
560 W. Main, #106
Lewisville, TX '15057
Pace 10( 2, Septcmbes 24.1993
- sue ferrt_
AUERS, LESLIE A. MD GYNECOLOGY/OBSIT:TRICS (OB/GYN) ~d
175 W. Elm
Lewisville, TX 75007
ROSE, GARY L, MD GYNECOLOGYj/OBSIFfRI(S (OD/GYN)
173 W. Elm, 4100
Lewisville,Tx 7$067
BURGESS, MICILAEL C, MD GYNECOLOGY/OBS1EfRICS (OB/GYN)
173 W. Elm, 4100
Lewisville, TX 73031
BAKER, BRUCE H., MD NEPHROLOGY
101 E. Southwest Pkwy.
LtwimTle, TX 750151
NEELY, WANDA F., MD OPHI}ieIAOLOGY
SW W. Main St., 4101A
Lewf sville, TX 13057
ANDERSON, WILLIAM JOSEPH, MD ORwOPF.DICS/H&%D
177 W. Elm
Lewisville, TX 75067
CORBIIT, DANNY KEITH, MD ORTHMPEDICS
177 W. Elm
Lewisville, TX 73067
GIESLER, BRADY GLENN, MD ORTHOPEDICS
177 W. Elm
Lcwinllte, TX 75067
IIEERWAGL,N, JAMES ROBERT, ML 0K11,01 LAICS
177 W. Elm
Lewisville, TX 75067
WiLLLAMSON, RICHARD WALLACE MD. ORT110PEDI S
177 W. Elm
Lewisvitie. TX 75067
I
ALRED, KEnM A., MD PATHOLOGY
500 D. West Main, 4201
lewisvi Ik, TX 73057
BURGESS, RICHARD C, MD PATHOLOGY
300 D. West Main, 4201
Lewisvilk, TX 75M7
POLATIN, PETER BARTH, MD PM k R
477 W. Eim
Lewisville, TX 75067
VASAVADAL, NiSHENDU 144, MD PSYCHLATRY
311 W. Main St, 4110
Lewlnille, TX 73037
LEWISVILLE MEMORW. HOSPffAL
300 W. Main Street
Lewisville, TX 75037
Page 2 o(l. September 71,1993 Lewisville Physician
AgenOaltell ~
*76-1
HARRIS METHODIST HEALTH PLAN UPDATE ON PRIMARY CARE PHYSICIANS
APPROVED BY STANDARDS & SELECTIONS, OCTOBER 6, 1993. CONTRACT
SENT TO PHYSICIAN OCTOBER 14, 1993
Dave, Beena, MD. Internist
4401A 1-35
Denton, TX 76207
I
I
APPROVED BY STANDARDS & SELECTIONS, OCTOBER 6, 1993, PENDING
THE COMPLETION OF FILES (REFERENCE CHECK, ETC.) FOLLOWING THAT,
CONTRACTS WILL BE SENT TO THE FOLLOWING:
Scott, Joseph, MD Family Practice
1108 Dallas Drive
Denton, TX 76205
Gorman, Brent E., DO Family Practice
1108 Dallas Drive
Denton, TX 6205
Schulman, Stephen A., MD Pediatrician
4401A 1.35
Denton, TX 76207
-13-
HARRIS METHODIST
d1ENTAL HEALTH PROVIDERS .37 j~ls~
Denton Child and Family Clinic D
Helena Shapp-Dossey,M.Ed/LPC 817-566-4949
529 Malone, Suite 1
Denton, TX 76201
Steve Barnes,M.Ed/LPC 817-565-0949
900 I-35E South
Denton, TX 76205
John Deines,Ph.D 817-566-5110
1810 Teasley Lane, Suite A
Denton, TX 76205
Wallace R. Townsend-Parchman,MD 817-383-2054
207 W. Hickory, Suite 113
Denton, TX 76201
-IB-
Agenda No 0
Ager,}aller►~.. a
HARRIS METHODIST HEALTH PLAN • PHYSICIANS IN DECATUR,
ALLLNG, JUT BENNT:'S7', MD FAMILY PMCTICE PRIMARY CARE PHYSICIAN
1101 Eagle Drie
Decatur, TX 7QU
DECATUR FAMILY CLINIC FAMILY PRACf7CE
1101 Eagle Dmt
Decatur, TX 76154
DECATUR MEDICAL SURGICAL ASSOC. FAMILY PRACTICE
2706 FM SI South
Decatur, TX 762M
McINTYRL TLM W, MD FAMILY PRACTICE PRIMARY CARE PHYSICIAN
1007 FAI SI South
Decatur, TX 762M
MERRTIT, BEN C. MD FAMILY PRACTICE PPLOY ARY CARE PHYSICLW
2706 FM St South
Decatur, TX 7UM
TIBBEIS, CHARLES K-, MD FAMILY PRACTICE PRIMARY CARE PHYSICIAN
1101 Eagle Drm
Decatur, TX 76731
SIMEN,1 O!AAS P, NiD GENERAL PRACTICE PRIMARY CARE PHYSICIAN
140 North Loop 287
Decatur, TX 16151
DECATUR FAMILY CLINIC PEDIATRICS
1101 Eagle Drive, IB
Decatur, TX 7QU
SMR1I, RON I- MD PEDIATRICS PRIMARY CARE PHYSICIAN
1101 Eagle Dr, 09
Decatur, TX 16234
LONG, IWOAIA,S N., MD GENEML SURGERY
2706 South FM 31
Decatur, TX 76234
COOPER IARY I., MD RADIOLOGY
ISM S Highway S 1
Decatur, TX 76234
DECATUR COMMUNITY IIOSPTTAL
2000 South IM 31
Decatur, TX 76151
September 24, 1993
Agenda N
0
HARRIS METHODIST HEALTH PLAN - PHYSICIANS IN BRIDGEeogelda;let'4L
HUDDLESTON, WILLIAM E, MD FAMILY PRACTICE PRIMARY CARE PHYSICIAN
170613th Street
Bridgeport, TX 16246
RAY, DAVID X. DO FAMILY PRAC11CF. PRIMARY CARE PHYSICIAN
NO Woodrow Wilson Way Grcle
Bridgeport, TX 76N6
WALKER, JON WESLEY, MD FAMILY PRACnCE PRIMARY CARE PHYSICIAN
924 W W Ray Circle
Bridgeport, TX 76026
FAMILY CLINIC FAMILY PRACIICE/GENERAL PRACTICE
BOB Woodrow Wilson Way Grck
Bridgeport, TX 76246
COPELAND, ION W, DO GENERAL PRACnCE PRIMARY CARE PHYSICIAN
we Woodrow Wilson Way Circle
Bridgeport, TX 76426
STOWERS, SCOTT G, DO GENERAL SURGERY
806 W. Wilson Way Circle
Bridgeport, TX 76246
I
it
September 24,1997
I
Agenda No
HARRIS METHODIST HEALTH PLAN • PIIVSICIANS IN JUS I Agendalle 3
Date
POUNDS, MERLE R. MD GENERAL PRACTICE PRIMARY CARE PHYSICIAN
310 Wul Second CCC~~~
Juaiin,TX 76747
September 1A, 1973
=gendaIlerq
ti.te /2 Q
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AETNA/SOUTHWEST HEALTH PLAN
Local Provider Listing
Denton & Surrounding Area
1
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SFp 23 '93 08:25 AETr1q FEAI TN PLC
"gXj P.2/3
1 4
da~t~
ageldaNio LONE STAR PHYSICIAN MEMBERS IN DaA
genTON
September 22, 1993
Cordon 4avis M.D. Anesthesiology Denson Tee
Carlos Garcia M.D. Anesthesiology Denton
Christian Green M.D. Anesthesiology Denton
Zafa,r Ilafit M.D. Ane.,thesivlory Denton
Darius Pourzen M.D. Anesthesiology Denton
R. Conrad Park Cardiology Denton
J.R.Williams M.D. EN14
Don Holt M.D. Family Practice DeDenton
nton
Douglas Hagen M.D. Family Pracdco Denton, liugenc'I'aylor M.U. Family Practice Denton.
Harvard McBrayer M.D. Family Practice
John Shelton M.D. Family Practice Denton,
Linda Yeah. M.D. Family Practice. Denton.
Robert Nobles D.O. Family Practice Donlon
Stanley Fvans U.U. Family Practice Denton
'Terrence Moore M.D. Famil Pracllec Denton, (newborns also)
'T'homas Blacker M.D. Family Practice Denton.
William Cudd D.O. Family Practice
Arvin Short M.D. General Strr++ Dent'
Curtis Mosier M.D. General Surgory Denton
(Wirles Wahleri M,p, Internal Medicine Dcntoa
Alcodra Rhatt M.U. Internal Medicine
Jackie R. Norris M.U. Inlernal Medicine Denton
Bruce Baker M.D. Nephrology/Kidne Denton
Gerard Balsley Jr. M.U. OBIGYN Y Denton / Lewisville
John Dulemba M.D. ORIGYN Denton
Suhas 1). Mantri M.D. OB/OYN Denton
John H. Miller M.D. OWYN Denson
Ixe Robert M.D. OR/C,YN Denton
Denton
John Recd U.D.S. Oral Surgery De
nton
Roy Kindrick D.D.S. Ural Surgery Denton
John Andrson M.V. Orthopedic Surgery Denton
Major Blair M.D. Orlhopedic Surgery
Rhonda Porterfield M.D. Parholo Denson
Frank McClehee M.D. Pediatrics Denton
Denton
Marilyn Janke M.U. Pediatrics Denton
Mukesh Saralya M.D. Pulmonary Medicine Denton
Deboreh Ahrcndt M.D. Radiology Denton
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LAme Star Physician Mesttlwts iti Ucntot► t o ui y - can inuc
I
Gregory Naugher M.U. Radiology Denson
Jon Bergstrom M.U. Radiology Denton
Jules Hrown M.D. Radiology Dealon
i,irtb-th Reynolds M.D. Radiology Denton
Robert Lockwood M,U. Radiology Denton
Susan Hostetter M.D. Radiology Denton
Robert Admire M.D. Urology Denton
Mary 6. Hudetson M,U. Allergy & Immunology Lewisville
Janes Albrite M.D. FN"f Lewisville
Richard Corlett M.D, Family Practice Lewisville
Broce Holmes M.D. Family Pi-flclice. Lewisville
James Long M.D. Family Practice Lewisville
'E'iuxuhy E. Ritter M.D, Gastroenterology Lewisville
Janes Weber M.U. Gastroenterology Lewisville
Bryan J. Borgfeld M.D, General Sutgcry Lewisville
Jonies Conyors M.D. General Surgery Lewisville
William P. Hatton M.D. General Surgery LAwisville
John M. Marsden M.U. General Surgery L.evtisville
F Alward l<rcrner M.D. Internal Medicine Lewisville
Statsley F. Franklin N1,D. 0810YN Lewisville
Rick Gupta M.D. OR/GYN Lewisville
'f'erry Angevin U.D.S. Oral Surgery Lewisvilie
Keith Aldred M.D. Pathology Lewisville
Richard C. Burgess M.U. Pathology Lewisville
Duy Nguyen M.D. Pediatrics Lewisville
J. Glen Ogden M.1), Pediatrics Lewisville
Michael Metzger D.P.M. Podiatry Lewisville
(Muny of the Lewisville physicians bAtve practices in the city of Denton)
i
e PHILADELPHIA AMERICAN LIFE
City of Denton
Participating Providers
- September 1993
D
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S
N 0
This directory is to be used for reference only and does not guarantee participation by the listed providers.
Employees should contact providers and verify their participation before receiving treatment. The City of
Denton personnel office will be updating Its directory with changes as they occur and may be contacted for
assistance.
AWda;fAm 4
Exhibit V[II
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CITY of DENTON, TEXAS MUNICIPAL BUILDING / 215 E. MCKINNEY / D TON, TEXAS 76201
October 14, 1993
Ms, Rosemary Wood, RN
Vice President
Director of Network Management
1300 S. University, Suite 100
Fort Worth, TX 76107
Re: City of Denton Health Plan
Dear Ms. Wood:
The purpose of my 13tter to you is to provide some background
information ro your bid for health insurance coverage for our
employees aid dependents and to request some consideration
regarding the provider network in Denton.
Your bid to provide group health insurance coverage for our
employees and dependents on a fully insured basis for the
1994 plan year has been received. It is being analyzed
against the bid specifications along with several other bids
submitted for consideration.
Preliminary analysis of the bid indicates a very favorable
program overall. Compared to our current program with
Philadelphia American Life Insurance Company (PALICO), the
Harris Methodist program has an improved plan design of
coverages in most aspects. However, thr Primary Care
Physician network is more limited from that availably, under
the PALICO program. Also, the network of specialty
providers, locally, will be significantly reduced with gaps
in some types of specialists. We recognize that there are
many providers in the Ft, Worth - Dallas Metroplex. However,
from a total management standpoint in operating our
organization, it means our employees would use additional
sick leave to travel to Ft. Worth or Dallas to receive care,
when that care is available here in Denton. Finally, the one
hospital, Denton Community (HCA) Hospital is a good hospital
and can provide many services for employees an0 dependents.
In examining the attached data concerning employee and
8 1 715 6 6-8200 D; FW h1ETR0 434.2529
I
4
t
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~gen4at~o _ 93 -
Letter to Ms. Rosemary wood
October 14, 1993 "tF
Page 2
dependent patterns of hospital use in Cent--n ever the `last
year and one-half, a majority of the dollars spent -and,
thus, care provided -goes to Denton Regional Medical Center.
Denton Regional Medical Center, too, is a good hospital; they
are also a good corporate citizen,
As a ?cvernment entity, serving all taxpayers in Denton, it
is i7portant for the City to attempt to l,eep dollars in
Denton for our own economic development. Clearly, Denton
Regional Medical Center is the hospital of choice for a
majority of our employees and dependents. Certainly, it is
more convenient for employees and their dependents to have
access to both hospital facilities, it is more efficient from
a management perspective, and it makes good economic sense
for Denton.
Our request is simple. We would like to explore the
possibility of expanding the list of local medical providers
in the Harris Methodist network in Denton. This would
include physicians and other medical practioners from Denton
and Denton Regional Medical Center. It seems if the
reimbursement agreements were the same, and others were
willing to abide by those conditions, Harris Methodist, other
medical providers, the City and its employees would benefit.
We recognize there is a limit to this as ovor-utilization can
occur. And, we are not suggesting that there are not proper
limitations and controls. However, given our geographic
separation from the Ft. Worth - Dallas Metroplex, we would
appreciate your review of this proposal and request your
consideratior of our circumstances.
Please let me know if you need addition-11 information or I
can answer a specific question.
Thant, you.
Sincerely,
Thomas W. Klinck,
Director of Human Resources
Attachments
harrisle.tk
cc: Robert Hurst, Jr. - Harris Methodist Health services
Dave P31at`•_re - Sprinx Health Systems
CITY OF DENTON 0neaN
~gen0a!lem
INPATIENT HOSPITAL REPORTal~ 1a-~
January 1, 1992 • December 31, 1992
x:
Tote Average Amount Amount Amount
Hos Ital Name Admits LOS LOS Paid !Da !Admit
i`
DENTON REGIONAL MEO CTR 52 234 4.5 $216,178 $924 $4,157
DENTON COMMUNITY • HCA 46 276 BA 147,803 538 3,213
COOK PORT WORTH CHILDREN 2 le 5.0 47,217 2,951 2309
HUMANA-MEDICAL CrTY 5 24 4.8 45,102 1,819 9,020
- CHARTER HOSP. • GRAPE VAE ~4 75 18.8 26,625 355 8,656
HCA ARLINGTON MEDICAL CTR 1 16 18.0 16,468 915 18,486
TWIN LAKES HOSPITAL J 2 25 12.5 11,911 476 5,956
SCHICK SIIADEL HOSPITAL 41 15 15.0 6,265 416 6,265
HARRIS HEB 1 2 2.0 4210 2,135 4.270
CHILDRENS MEDICAL CENTER 1 4 4.0 2,943 738 2,943
OAINESVILLE MEMORIAL 1 3 3,0 1,575 525 1,$75
Orand Total 116 692 1.0 $626,334 $761 54,834
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Coopers Carrier PALICO
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CITY OF DENTON gendaNo.
HIGH PROVIDER REPORT
January1,1992 December 31, 1992
A
Rank Hos ItaUProvider Name Amount Percent 11 of Total
ZIP Paid
.1\ vN',..ye n Y ~ IA bA RtF 1 W. P~• ':Y
1 DENTON REGIONAL MED CTR 75391 $388,198 45.9%
2 DENTON COMMUNITY - HCA 76201 246,545 29.4%
3 HUMANA-MEDICAL CITY 75391 73,708 8.7 °b
4 COOK FORT WORTH CHILDRENS 76104 47,217 5.6%
5 CHARTER HOSPITAL-GRAPE VINE 76099 35,663 42%
6 HCA ARLINGTON MEDICAL CENTER 76015 16,468 1,9%
7 TWIN LAKES HOSPITAL
76201 11,911 1.4 % e
8 SCHICK SHADEL HOSPITAL 76180 6,265 0.7%
9 HARRIS HEB 76095 4,512 0.5%
10 GAINESVILLE MEMORIAL
76240 3,252 0.4%
,
11 CHILDRENS MEDICAL CENTER 75284 2,979 0.4%
12 PRESBYTERIAN HOSPITAL 75284 2,599 0.3%
13 BAYLOR HOSPITAL INSU 75284 2,149 0.3%
14 TEXOMA MEDICAL CENTER 75020 427 OA %
15 BAYLOR MEDICAL CTR•GARLAND 76051 390 0.0%
18 METHODIST HOSPITAL 79336 297 0.0%
17 DRISCOLL CHILDRENS HOSPITAL 76411 254 0.0%
18 MEDICAL CENTER OF PLANO - HCA 75075 235 0.0%
19 MEDICAL ARTS HOSPITAL 75388 180 0.0%
Other 6 Providers 520 0.0%
Grand Total
181,,711 1100 X
Coopers CARRIER: PA
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City of Denton agendaNo
HIGH PROVIDER REPORT
R" January 1, 1993 June 30, 1993 DaIe~ll_ .
Amount Percent
Rank Hos itellprovider Name ZIP Paid of Total
~ r<
1 DENTON REGIONAL MED 75391 • $139'018 43.7 %
2 DENTON COMMUNITY - H 76201 87,214 27.4 %
" 3 HUMANA HOSPITAL MEDI 76391 47,018 14.8 %
4 PARKSIDE LODGE-WESTG 76201 10,508 3.3 %
6 MEDICAL ARTS HOSPITA 75388 7,911 2.6 %
„ 6 CHARTER HOSPITAL-GRA 76099 7,725 2.4%
7 MEDICAL CENTER OF PL 75075 4,722 1.5 %
8 CHILDREN$ MEDICAL CT 76284 4,076 1.3%
9 ZALE LIPSITY UNIV HOS 75391 3,229 1.0%
10 COOK FORT WORTH CHIL 76104 1,408 0.4%
11 IRVING HEALTHCARE SY 76284 11159 0.4%
12 GAINESVILLE MEMORIAL 76240 1,097 0.3%
13 BAPTIST HOSPITAL ORA 77216 1,037 0.3%
14 HILLCREST MEDICAL CT 74182 832 0.3%
16 HARRIS HEB 76095 592 0,2%
18 PARKLAND MEMORIAL HO 76235 237 0.1 %
17 R H 0 MEM MED CTR 75381 164 0.1 %
18 PENNOCK HOSPITAL 49058 87 0.0%
19 BRACKENRIDGE HOSPiTA 78768 78 0.0%
20 UNIVERSITY MEDICAL G 77205 20 0.0%
Other 1 Providers 0 0.0%
Grand Total $318,131 100 %
I Coopers Cartier: PALICO
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City of Denton -VerteaNo
INPATIENT HOSPITAL REPOIrdallerk.-. a,.,..
y 0216 ~ a ~ .
January 1, 1993 a June 30, 1993
Total Average Amount Amount Amount
Hospital Name Admits LOS LOS Paid May /Admit
HUMANA HOSPITAL • MEDI 2 15 9.0 $46,161 $2,566 $23,090
DENTON REGIONAL MED 26 65 2.5 36,363 560 1,399
DENTON COMMUNITY a H 1a 46 2.6 24,485 532 1,380
PARKSIDE LODGE aVVEST0 2 41 20.5 9,260 226 4,630
MEDICAL ARTS HOSPITA 1 3 10 7,911 2,637 7,911
a
MEDICAL CENTER OF PL 1 3 3.0 4,722 1,574 4,722
t
CHILDRENS MEDICAL CT 1 1 140 3,170 3,170 3,170
COOK FORT WORTH CHIL 1 4 4.0 1,228 307 1,228
Grand Total 62 161 7.6 $133,340 $737 12,664
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=C ITY-
COUNC]
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Ag~da~o .3 - VL-L
Agendallem~
DATE: October 26. 1993
CITr COUNCIL REPuRt fCIVM41
WORK SESSION
T Mayor and Members of the City Council
FROM: Lloyd V. Harrell, City Manager
SUBJECT: City's Wellness Program for Employees
RECOMMENDATION:
It is the staff's recommendation that the City Council authorize
the staff to proceed with a Request for Proposal to contract for
services for a Health Risk Assessment for City employees,
SUMMARY:
Based on research of other organization's wellness programs and
activities, the Employee Wellness Committee recommends that the
City's first year wellness activities should be directed at
gathering information that can assure the City it is focusing its
resources where the most impact and results can be accomplished.
In order to do this, the Committee is convinced that an overall
profile of City employees' wellness is the most important and
initial step. Thus, it is recommended that employees participate
in a voluntary and confidential health risk assessment. The
health risk, assessment would serve two purposes:
1. Employees would provide confidential information to a
trained medical professional concerning their health and
wellness lifestyle practices and habits. In turn, the
medical professional would give employees individualized
and confidential reports concerning their health risk,
such as heart disease, cancer, and other potential
medical issues. The report would further provide
employees with recommendations to change their lifestyle
practices and habits and reduce potential medical risks.
2. Tha City would be provided a comprehensive profile report
on the health and wellness of its workforce. The
wellness report would be sorted by age, gender,
department, division, etc. This information would be
used to target specific health and wellness problem
areas. liius, the City could focus its resources on, for
example, educational efforts on areas such as nutrition,
exercise, smoking cessation, etc. Another example might
be information on a particularly stressful departmental
work environment with potential for higher claims cost.
Adjustments might be made in that department's workload
to ease this prublem.
AGenvlall8
t
,qty Rte, ,r, w., r.r
Page
The Health Piss Asse~~n'~~~1 ,.I I I he I,' It Ially limited to 9At her in9
baseline data on the erarloyce ~,crlforce in crder to more
effectively determine which wellness programs and activities Vrould
have the most positive effects on the wellness of the City's
workforce.
i3ACKGROUNO:
With the adoption of the 1993/94 Budget, the City Council
allocated funding to initiate a wellness Program for City
employees. The program was recommended to complement current
health and wellness initiatives, The funding is intended to
establish fundamental activities in this first year.
The employee Wellness Committee has researched a number of other
organization's wellness programs and experiences. After thorough
discussions, it is the Committee's recommendation to first
determine and establish an overall wellness profile of City
employees. This would be accomplished through a confidential and
voluntary health risk assessment of employees conducted by trained
medical profassionals. The health risk assessment would gather
the following information on each participating employee:
o Health Screening
1. Health Questionnaire - age, sex, height, weight,
history, attitudes, habits concerning nutrition,
exercise, drug use, stress, mental health,
interpersonal relations, etc.
2. Resting Blood Pressure
3. Lalood Chemistry - total cholesterol, HDL cholesterol,
triglycerides with LDL, HDL/LDL ratio, Glucose, etc.
4. Self administered stool test (age 50 and over)
5. Percent body fat
6. Height and weight
In addition, and quoted separately, the selected vendor will
provide information on health awareness education. This aspect of
the program could be implemented in the first year, if funding is
available.
As staff has continued research and developed additional budget
information, it has become apparent that the initial funding
request of $19.000 will be insufficient to fully cover the Health
Risi, Assessment for all employees and to begin targeted health and
wellness education. it is anticipated that an additional $17,000
would be required to offer the Health Risk Assessment to all
employees and begin an appropriate educational program.
Educational programs could include health and wellness programs
C~ct b<.r
Cit.~ Counci 1 P,ep:~t t - 'r;r 1 iri£5 Pr c~rtm
FaGF
and activities (such ~s smci rn'J ce6 1t1 vn rl ~ riupsl which can,
for example, help a,) employee hange their tobacco use.
As a result of the favorable Y'ealth insurance bids, the staff is
recommending a new program that will provide improved employee
health insurance through Harris Methodist Health Systems for less
than the current program through Philadelphia American Life
Insurance Company (PALICO). The anticipated 3 month savings over
1993/94 health insurance budget is approximately $200,000. Thus,
1t is the staff's recommendation that t~,e City Council allocate
a small portion ( $17,000) of the savings to ensure adequate
funding for the Employee Wellness Program.
In order to encourage participation by employees, the City's
portion of Health Insurance premiums will be adjusted so that
participating employees will receive an additional $10 per month
from the City toward their health insurance premiums. Employees
who participate in the Health Risk, Assessment will receive
useful information concerning their health and recommendations on
how they can change their lifestyle habits to enhance their
health. This, in torn, could have a positive affect on our health
insurance claims.
Studies conducted by a variety of organizations confirm that
tobacco users face an increased risk of heart attack, heart
diseases, cancer, and other major medical problems. Thus, users
of tobacco products also cost health insurance plans more dollars.
Those employees who represent a lowered health risk. (non-tobacco
users) to the City's Health insurance Program should be rewarded
and pay less for their health insurance than employees who are a
greater risk (users of tobacco products), The City is also
proposing a $10 per month discount for employees who are not users
of tobacco products. For those non-users of tobacco products, the
City will contribute an additional $10 per month toward their
health insurance premiums.
The additional premiums collected from those inployees who
are users of tobacco products or who do not wish to participate in
the Health Risk Assessment would he returned to the City's fund
balance. These dollars cuuld, in turn, off-set the additional
$17,000 to supplement the Wellness Program,
Over time, the Wellness Program can potentially reduce claims to
the Health Insurance Program and, in turn, reduce the costs to
employees and the City. Attachment I details_ an estimated budget
of funding sources and expenditures for 1993/94.
QQ9~dd!V0.
Aa;n~ia!IG
O c t u h e r 2S, 1 9 9 3
City COUr1G11 Report hdllrrtss Pr19m
Page 4
PROGRAM, DEPARTMENTS OR GROUPS A[FECTE1);
The employee wellness Program will be available to all regular
ful l-tire and part-time employees in all City departments.
FISCAL__TMPACT.
The estimated cost for a Health Risk Assessment for all
participating city employees is $25 per employee. The 1993/94
budgeted amount is $19,000. The additional amount requested is
$17,000 and would be funded from savings over 1992/93 budgeted
dollars for the Employee HealtF Insurance Program.
Respectfully submitted:
Lloyd V. Harrell
City Manager
Prepared by:
I ,
Thomas W. Klinck, Director of Human Resources
Approved:
Be y McKean Executive Director
Municipal S vices and Economic Development
ccrpt9J},tA
Propirad, f0/ID/8J
1?-Oa-33 GITr C' IE'~':h
YE~.:AESS FF5R4R
PFOPOSEG 6:GGEI
FUNG3NG OCT NOY GEC :Ry FES r:c. AFF W J:N JUE SEP rTG
93194 04GEi APPROPRIATION 9,C0C g,{,;;,
ADCITICNAI APPROPRIATION
-MEAGT!t INSURANCE SAVINSS II,OGG ?,G?L
TOTAL 1?,7GC ?,GGC G G ^ C G 0 D C 26,G00
EXPENSES
4EAtTN PISA ASSESSMENT 1625/EEI 21,915 2t,S16
C
EDUCAi1CNIAYAPENESS C
-St40KIN5 CESSATICII '.70 ^ SOP SGti VC SGC 5:4 S0 41500
NuTRUITION SC7 i0G iCS 507 2,GG0
DEPCISE S00 5VG 1:0 !CO 'Flo
-STRESS NGNT SCE SGO SOC S07 2,GG0
-OTPER S''0 SGG S{0 '.CC S9G LSG7
TOTAL 23.315 1,506 1„GG I,S 7 1 5S c I,SGO I,SOG T,.1OO 120 3S,311
O4ER1MDEPI 13,000 11,007 C' 2,625 II,115 )162.1 6,125 5,525 1'Ta 3,125 2,125 62S 525
I
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DATES October 26, 1993 (idle-11l
CITY COUNCIL REPORT
T0: Mayor and Members of the City Council
FR'')Mi Lloyd V. Harrell, City Manager
SUBJECTS Amending the Zoning Ordinance
RECOMMENDATION:
1. The Planning and Zoning commission recommends continuing
the amendment process. Sae Attachment 1.
2. The Zoning Ordinance Task Force and the Airport Zoning
Commission have made their recommendations. See
Attachment 2. Attachment 2 also lists some of the
reasons why the Task Force made the recommendations.
3. Each recommendation may be dealt with individually is we
have acted on eight amendments listed in attachment 3.
Staff suggests amendment consideration according to the
numbered sequence in attachment 2.
4. It is recommended that the Airport Zoning commission's
recommendations concerning protecting development around
the airport and to support the new airport master plan
be processed concurrently. The Planning and Zoning
Commission and the Airport Board may begin review and
joint public hearings on the new master plan and land
use compatibility and height hazard zoning provisions in
November.
fiUMMARY S
See the attachments.
Attachment 5 is a summary of Council questions and issues
with a staff response.
RACKGROUNDS
March 2 and April 18. 1990s Briefings to P&Z. P&Z
recommends initiating a re-write.
May 15. 19901 Council directs proceeding with re-write and
that a citizen committee would be formed to make recommen-
dations.
vndaNo
City Council Report Agenda l
October 26, 1993 03ta
Page 2
June 50 1990L Council approves zoning Ordinance Task Force
makeup.
September, 19M Council appoints Task Force.
October. 1990: Task Force begins meeting.
May 7 `1991; Council briefed on first recommendation from
Task Force.
May 8. 1991: P&Z briefed Task Force recommendations.
May 21, 1991: Council briefed on Task Force process and
preliminary recommendations.
October 22.--M-IL Council briefed on MXD and other Task
Force recommendations.
October 23. 19911 P&Z discusses MXD and Task Force j
recommendations.
November 7, 1991, Staff briefs Chamber's Local Affairs
committee concerning MXD and Task Force recommendations.
December, 1991: Appointment to Airport Zoning Commission
made.
April 21. 1992: Council briefed on Task Force recommenda-
tion.
October 28. 1992: discusses MXD and other Task Force
recommendations.
May 26. 1993; P&Z discusses MXD and Task Force firal
recommendations.
June 25. 1993: Briefing for Council at Retreat.
August 25 and September 8 1993: P&Z discusses MXD and
process.
September 22'19939, P&Z strongly recommends continuing the
effort to improve the zoning ordinance.
PROGRAMS. DEPARTMENTS OR GROUPS AFFECTED:
City Attorney's office, Planning and Development, P&Z, City
Council, and anyone using the zoning ordinance.
AgendaNo..._-
City Council Report Agendallem
October 26, 1993 Dace
Page 3
FISCAL IMPACT:
A comprehensive re-write by outside legal consultants is
not budgeted. There is no fiscal impact to piecemeal
amending.
Respect ully submitted:
L1 y V. Harrell, C ty Manager
Prepared by:
Frank . icubin AICP
Executive Direct %r
Planning and Development
Attachments:
1. P&Z Recommendation.
2. Zoning Task Force Recommendations, Rationale, and suggested
sequencey.
3. Amendments since 1989.
4. User Friendly Formats.
5. Council Issues.
6. P&Z Minutes.
7. Neighborhood Planning article.
AXX00490
f~
pp R
upendaNo
A~eada'te~n~_~_
ATTACHMENT 1
CITY Of DENTON, TEXAS MUNICIPAL BUILDfNQ / 215 F. MCKINNEY / DENTON, TEXAS 76201
MEMORANDUM
DATE: September 22, 1993
TOi Mayor and Members of the City Council
FROM: planning and Zoning Commission
SUBJECT; New Zoning Ordinance
In the fall of 1990, the council appointed the Zoning Ordinance
Task Force to re-write the zoning ordinance. The Task Force made
its final recommendations in the summer of 1993. The Council and
the Planning and Zoning Commission have been reviewing their
recommendations.
We believe that the reasons for forming the Task Force remain valid
today. While several amendments proposed by the Task Force have
been adopted, the comprehensive re-writing has not been completed.
In the future, we anticipate even more rapid development. The
recommendations we are now reviewing seem to have considerable
merit. They could improve the way we deal with an increasing
number of zoning cases.
We take no exception to the Council's decision concerning funding
for increased legal assistance, given recognized fiscal con-
straints. Yet, our review and adoption of zoning ordinance
improvements need not be halted.
We wish to convey a strong recommendation that we continue our work
with your support on improving the zoning ordinance. We would hope
recommen-
dations continue
concerning work this with important teffortmthatyyou d bemake ganrino1990.
We would also hope that future cir(:►imstances may allow for funding
of the legal assistance for the project.
8171566.8200 DIFW META0 434.2629
~I
Agenda No
Agendalte
Mayor and Members of the City Council ~!e__.~__
September 22, 1993
Page 2
our mission is to be recognized as a leading city. We would hope
our recommendations to you would lead to our zoning ordinance being
recognized as a leading land use decision making system.
J glebr~ t, Chairman
¢la in3 a zoning Commission
JEtlah
A%%OOC62
-v
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'gendaNo
ATTACHHENT 2 Agondallam_ .
Task Force Recommendations, Why Recommen d; -
eequence of Consideration.
1. User friendly format.
Until the entire ordinance or all of the provisions are
adopted, rewriting the ordinance to be user friendly is
somewhat problematic.
However, staff has developed a number of separate documents,
such as the quick reference chart (attachment 4), consolidated
standards for each district, and flow charts which achieve the
goal of improving service delivery by making the rules easier
to find, communicate, and use.
2. Reorganized Board of Adjustment article with new non-conforming
amortization section. (Draft ordinance completed).
Reasons for re ommendinas
a. Reorganized to be more understandable and consistent.
b. Added provisions for amortizing nonconforming uses to be
n to consistent with court made law. Extensive research of
Dallas experience.
BPS &QlLt4T-se ence: The ordinance draft has been prepared.
3. Design Guidelines for all site plans for PDOs, SUPOs, or
conditioned zoning required site plans.
Reasons for re o mendinas
a. The Design Guidelines provide a checklist for reviewing and
assessing development proposals which require a site plan.
b. Intended to promote quality development in the city.
c. Create a sense of place.
d. Preserve natural resources and encourage environmental
sensitivity.
a. Provide consistancy and predictability in the public site
plan review process,
f. Compiles Denton Development Plan policy and regulation now
in place into one easy to use document.
r 4
t~
e
Agenda No
Agendaiteq .
ATTACHMENT Z
Page 2
Reason Xor secruence:
a. These guidelines would not be adopted by ordinance. Legal
review is unnecessary.
b. The document would be useful immediately for developers
involved in PD's and SUP's.
4. Updated parking standards.
Reasons for recommendingi
a. Allows for shared parking and fewer variance requests and
off-site declarations.
b. Takes into account 20+ years of parking studies.
c. consistency with other metroplex cities.
5. Enable aoeciai districts for special places, such as for
additional neighborhood presentation areas, for instance the
TWU-Alice-Locust-Elm Street area, scenic entranceways, indus-
trial parks, or floodplain overlay districts. This section
only enables them, but does not propose a specific special
district. (See attachment 7).
Reasons for recommending:
a. This new section will initially incorporate the existing
Historic District and the Municipal Airport Zoning regula-
tions.
b. The Special District will enable the city to prepare
special regulations for specific neighborhoods as may be
required from time to time.
co Special districts may be designated to preserve and enhance
the imago, character and integrity of a specific neighbor-
hood.
d. Promote and enhance the quality of physical development
with in a specific area, corridor or entranceway.
e. Promote compatible land use and foster economic develop-
ment.
f. Protect valuable natural resources.
g. Follows Denton Development Plan policy and strategic plan
success elements to promote Denton as a unique place and a
y
Agenda No
ATTACtiUNT Z 4genda4ept
Page 3 (bte
sense of place for unique places within Denton,
Reason for ~+~e Provides a useful tool for the neighbor-
hood oriented service delivery and COPS program. ict 6. Environmental i
Heav nduct ial di strict (HI)aand D out rof dateE(industrlal es heavy
mance standards section, } perfnr-
Reasona for recomma„,a s
a. The HEI district is intended to accommodate heavy industri-
al uses and manufacturing activities which requires special
consideration.
b. Incorporates additional regulations to ensure compliance
with State and Federal requirements and consideration of
future transportation needs.
c. Most of the standards in the performance standards section,
such as odor, are not measurable and/or are unenforceable
because there is no eq+jipment to measure the standard.
d. Makes efficient use of Federal and State regulations.
e. Tends to insure protection before the use is built, rather
than relying on enforcement after the use is operating.
Reason tor_gerlu „CV long While a very significant clean up of a
but useless section, there is no immediate danger or need
for it in the very near future.
7. 3 new residential districts in addition to current residential
districts.
Sign Family Estate. SFE. 1 acre minimum. Residential use
only.
Single Family 3.5. SF3.5, Mixed residential use, medium
density. Small lots townhouses, and zero lot lines.
4 Manufactured Housing District. MHD.
Reasons- f_ o_ r rsc~endinu~
a. Enables housing diversity which relates to housing size,
density and cost in accordance with Denton Development Plan
policy.
~eotlaNo.
ATTACHKZNT Z
Page 4 D21A
b. Existing districts cover lot sizes between 7,000 and 160000
sq. ft. SF-E is intended to enable single family develop-
ment with minimum lot sizes of one acre with no agricultur-
al uses, such as poultry hatchery, allowed.
c. SF-3.5 is intended to promote affordable housing and
establish a district to accommodate town houses and zero
lot line developments without site planning with PD zoning.
d. Adopts standards consistent with those in metroplex and
nationally for town houses, zero lot line housing, and
manufactured housing.
e. Provides standards for mobile home subdivisions and mobile
home parks without all having to site plan through SUP's.
f. Incorporates mobile home standards in another chapter of
the code into the zoning ordinance chapter of the code.
Reason for ,fauence, Market conditions at this time are not
such warranting immediate amendments.
8. Antennae standards.
Reasons for recommendinas
as Provide new regulations with regard to the location, height
and construction standards for antennas, satellite dishes
and support structures.
b. ,is ,9gulations address impacts on residential amenity and
safety standards with regard to antennae, satellite dishes
a m .upport structures.
Reason for serruence: No strong demand now for this cleanup and
updating.
9. Mixed Use District (MXD). Bufferyards, master plan policy as
standards, policy sensitive site plans triggers, and wider
notice for heavy impact uses. After Council approves rezoning
to MXD, which may be conditioned, a mix of uses is allowed
according to standards.
old non-residential districts stay, no change in their stan-
dards, but no rezoning to old non-residential districts. All
non-residential rezoning with HEl, PD or MXD.
ATTACHMENT 9 Agenda No
Page 5
AAendalteq
Reasons for reco mendinat Date
a. Best system of zoning.
b. A new framework for zoning in Denton which mitigates land
use impacts consistently in all areas of the city.
Effectively deals with "the edge" between different land
uses,
c. Provides maximum flexibility to respond to market demands
so that a tract of land may be developed for different uses
without a zoning change.
d. Provide a framework for zoning which states the rules and
adopted policy up front to ensure quality development.
e. Zoning standards explicitly follow master plan policy.
I
f, system has been tested, refined, negotiated, discussed
broadly and openly for two years with businesses, P&Z,
council, and neighborhoods with little to no opposition.
The Zoning Ordinance Task Force tested the system with more
than 40 actual zoning cases.
g. Won an American Planning Association award.
h. This will ensure that existing developments and existing
zoning on properties will not be impacted. Development
rights and standards conferred by the existing zoning
districts will generally be maintained.
I. There is no apparent demand to rezone the entire city as a
result of the zoning ordinance rewrite.
Reason for sernlence• Most sensitive to legal questions.
Nf%00491
ATTACHMENT 3
ZONING ORDINANCE Agenda No
AMENDMENTS MADE SINCE 1989 ABendallEnL...,__
We
• 3 Step PD process.
. Conditioned zoning.
• Outdoor Amusement District (OAR).
• Residential use in non-residential building. "Single family
restricted."
Accessory uses.
3 types of Landmark Certificates of Appropriateness, two by
staff.
• Signs in PD's.
• Administrative approval of minor PD detailed plan chrnges.
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MOM
P
QUICK-REFERENCE DISTRICT STANDARD CHART
Z iU AN' 1 A ST P SF SP 21MP I~ff MA P M O 1~S GR C C6 u m PO
c 16 13 l0 7 R 1 2 R
MIN. LOT SIZE SF DETACHED 4000 if) 1 AC 16 17 10 7 6 6 6 6 6
F. Q
MIN. t17T SIZE, SF ATTACHED (000 an 2 2 2 2 2 2 ] 2 7
MIN. LOT SIZE, ]-FAMILY DWEWNG 6 6 6 6 6
MIN. TAT SIZE, MF 1. 3 STORY 6 6 6 6
MIN. VIT SIZF, MF OVER 3 STORY 12 12
MIN. WT WIDTH, SF DETACIIEO ISO, l00' 67 77 67 67 67 67 67 67
v MIN. tOT WIDTH, SF ATTACKED 20' 20' 20' 20' 27 27 W 27 20,
2 N.iN. LOT WIDTH, 2-FAMILY DWEUJNG 60 67 67 67 67
MIN. ~uT WIDTH, MULTIFAMILY 60' 60' 67
MIN. LOT DFSIH, RESIDENTIALUSE 1S7 127 120' 120' 107 107 100' 100' I.W 107
MIN. LOT DEPTII, NONRFSIOENTIAL
MAX. BUILDING OMWLWE (BY PERCENT) 20 3S 3S 35 35 40 40 40 40 40 40
FRONT SETBACK 47 IF f7 30, 2S' IF IV 25' IF W 25' 25' 25' 2S' IS, IF
SLDESE711ACK r is, 17 6' T 6' 6' I7
SICE SETBACK ABU7T1NG11SSTDENTIAL W 17 10, 10, 17 17 l7
RPAR SETBACK 10' 17 30, t7 t7 10'
.REAR SETBACK ABUTTING RESIDENTIAL S7 10' LO' 17 L20 0' t7 17 17
MAXIMUM HEIGIIT (STORIES) 3 23 2,6 2.S 2.5 3.S f 1 3 0 1 7 0 0 0 0
FWOR70AREARATIO t 15:1 3:1 1:1
aa_eati .
tWENC;
Minimum 10' form dories, 6e Y pa r o(hdaht not to em S7.
Distance from street curter line shan not be lest tan 1/2 building Wight Ce IS', wlddwm Y vmtee,
One addidanat foot of wbak dun be added to the dote and rear foe each addidoml foot that such sowures exceed thm (f) moeies.
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-gendaNo.
Commereial _RWzAot
~eA~l32T~ 4sas ~
primarY Rejden&ial Uses
.Community Unit Development
Dormitory, Boarding or Rooming House
Hotel or Hotel
&ducation~i~ Ins>itutional i Special r es
Art Gallery or Museum
Cemetery or Mausoleum
Church or Rectory
College or University or Private School
Community center (Public)
Day Camp
ray Nursery or Kindergarten School
Fairground or Exhibition Area
Group Homes
Halfway House
Home for Care of Alcoholic, Narcotic or Psychiatric Patients
Hospital (General Acute Care)
Hospital (Chronic Care)
Institutions of Religious or Philanthropic Nature
Public Library
Monastery or Convent
Nursing Homo or Residence Home for Aged
occasional Sales
Park, Playground or Public community Center
School, Private Primary or Secondary
School, Public or Denominational
School, Business or Trade
Utility. Accessory and Incidental ses
Accessory Building
Community Center (Private)
Electrical Substation
Electrical Transmission Line
Temporary Field or Construction Office (Subject to Approval and
Control by Building Inspector)
Fire Station or Similar Public Safety Building
Gas Transmission Line and Metering Station
Home Occupation
off street Parking incidental to Main Use
Radio and/or Television Microwave Tower
Cuff Street Remote Packing
B
tr
agenda %
"C" Commercial District Leoatigyi~Qendaltetn
Utility. Accessory Alta Incident~~ tlana ~rnnr~n~ed1
Sewage Pumping Station
Private Swimming Pool
Telephone, Business office
Telephone Line and Exchange Switching or Relay Station
Water Reservoir, Water Pumping Station or Well
water Treatment Plant
Recreational and Entertainment Useq
Amusement, Commercial (outdoor)
Amusement, Commercial (Indoor)
Country Club (Private) with Golf Course
Dance Hall or Night Cluo
Public Golf Course
Commercial Golf Course
Public Park or Playground
Public Playfield or stadium
Rodeo Grounds
Roller or Ice Skating Rink
Sexually Oriented Business
Stable, Private Club
Stable, Commercial Rental
Stable, Boarding
Swim or Tennis Club
Theater, Drive-in
Theater, other than Drive-in Type
Transportation Related Uses
Airport Landing Field or Heliport
Bus Station or Terminal
Hauling or Storage Company
Motor Freight Terminal
Railroad Freight Terminal
Railroad Passenger Station
Railroad Track or Right-of-Way
Railroad Team Track
Truck Parking Lot
Commercial Parking Lot or Structure
Automobile Service Uses
Auto Laundry
Auto Painting and Body Repair
Auto Sales and Repair (In Building)
110 Commeraial Distriot (continuedl
agenda No
Agenda'~1a
Automobile Service Uses fcontinu L
Gasoline Service Station
New Auto Parts Sales Stores
New or Used Car Sales Lot (In Open)
Seat Cover and Muffler Installation Shop
Tire Retreading or Capping
Used Auto Parts Sales (In Building)
Retail and Service Type Uses
Antique Shop
Bakery or Confectionery Shop (Retail)
Cafeteria
Cleaning and Pressing Small Shop and Pickup
Custom Personal Service Shop
Drapery, Needlework or weaving shop
Florist or Garden Shop
Greenhouse or Plant Nursery (Retail)
Handicraft Shop
Household Appliance Service and Repair
Laundry or Cleaning Self Service
Mimeograph, Stationery o:• Letter Shop
Mortuary or Funeral Parlor
Offices, Professional and Administrative
off Premise Sale of Beer and/or wine
on Premise Sale of Beer and/or wine
Licensed Private Club
Pawn Shop
Restaurant
Retail Stores and Shops - 4,000 square feet or less
Retail Stores and Shops - Over 4,000 square feet
Studio for Photographer, Musician, Artist or Health
Secondhand store, Used Furniture or Rummage Sale
Tool or Trailer Rental
Agricultural Twe Uses
Animal clinic or Hospital (no outside runs or pens)
Animal Clinic, Hospital or Kennel (with outside runs or pens)
Farm or Ranch
Greenhouse or Plant Nursery
Hatchery, Poultry
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!+CIO Commercial Distriot tcoatiau of aNo -
Agendal!
Commercial Tvae Uses Date
Bakery (Wholesale)
Building Material Sales
Cabinet and Upholstery Shop
Cleaning and Dyeing Plant (Commercial)
Cleaning Plant, Bags or Carpets (Special Equipment)
Clothing manufacture or Light Compounding or Fabrication
Contractors Shop and Storage Yard
Engine and Motor Repairing
Feed Store
Heavy Machinery Sales and Storega
Job Printing or Newspaper Printing
Laundry Plant (Commercial)
Milk Depot, Dairy, or Ice Cream Plant
Paint Shop
Plumbing Shop
Scientific or Research Laboratories
Storage and Sales of Furniture or Appliances (outside a Building)
Storage or Sales Warehouse
Trailer Rental or Sales
rransfer, Storage and Baggage Terminal
1holesale office and Sample Room
pERMITTEQ_USES WITH APPRMQ SPECIFIC--USE FERMITi
! Primary Residential Uses
T,railor Camp or Mobile Home Park
Educational. Insti ~~t{onal i Soacial Uses
Fraternity, Sorority, Lodge or civic club
Utility. Accessory and Incidental Uses
Electrical Generating Plant
Private Utility Shop or Storage Yard
Public Building, shop, Yard of Local, State or Federal Government
Sewage Treatment Plant
Recreational and Entertainment Uses
Drag strip or Commercial Racinq
Go Cart Track
--~,_(oon inuee~
Aor i cu 1 to ra 1 Agenda No
Animal Pound (Public or Private)
Date
Commer ial e r
Flea Market
Natural -Resource a orate a~-
Extraction and Storage of Sand, Calichs, Stone, Clay or Gravel
Special industrial Pr_` esa~
Temporary Asphalt or Concrete Batching Plant
Mixing and Sale of Concrete
AAEA RRAIIMU•nww.
Floor/Area Ratio
2r1 Maximum
YASQ REOOYRr~rs•~a-
Front Yard Minimum 25 feet
Side Yardr No side yard is specified for non-
residential use except where a non-
residential use abuts upon a
district boundary line dividing such
districts from a residential
district or when the side yard is
adjacent to the street, in which
event a ten (10) foot side yard
shall be provided.
Rear Yards No rear year is specified for non-
residential use. except where retail,
commercial or industrial uses back
upon a common district line, whether
dividingd they district l from any not,
the residential districts listed, a
minimum of ten (10) feet shall be
provided.
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agendaNo--
_Commeroial ~l~triat lconc~*,,..► pQaltBrtt y._:_--- -
KNIGHT AEGOLATIONBs
Twenty (20) stories, except as noted in special setback
required for all structures over three (3) stories.
80PPLEN.ENTAL sen*.AT*nmaL
1. Parking (eased on use. See Article 15.)
2. Signs
3. Lighting
4. Landscaping
5. Screening i Fencing
i
Genual roncy
Prowlonots Snap
Trips Per Acro
Memky And Use Allocated
Yes Yes by Previous zo" • No
Consider Down zonbpT
Separation And
conoent:elkn Policies Amend The Nan by CArging Study Ana
Dlspnportbnsts Shan TM Ana's Intensity Standard Has Dyer Allocated Int"bky
III Mile I-$ Acres Or'lafi Out Lou'
4 Criteria boundary Tripe
100 200 sinks
I, Adequate Infra-Stnrctun
2. Unusual Topography
a Unaccounted
U. Unusablo
conelder 0"? pobcles S. Compatib My Speclsl Sessions 'Least Men".
Such As Dlwnky And 4, 00w Po kles Moll Logical Use'
Neighborhood Protection, zte. Impact Analysis Gkatle
Amend Nan Consider Odw PokW
wlo zw4q
Caw ComMenOon
Consider O&W Pbgales
AAAOWS li
Y
ZONING ~gendaNo.
Yredssto Confarancf&
Submittal of Application
rm,
Staff Review and Comment
i
Mailing List prepared for
Soo tywitthhinthe city
3 - 4 vesk limits
process
Mies nailed 10 days befoee
puowners vith4to property
200 teat
Sta:or, coastandation prepared
lanninq and Soninq
Commission
4.t week process
Planningiaonlrg osalssion
Recomsendation to approve Raaommsndatlen to Deny
Legal Doeusants ass Petitioner may appeal
requested to be reared
xoeias in
Out -
s os
llo`haaMe ps
to pub
City Council Public ■aarinq
Adoption of 16FE
that an erdinanoa genial
an ordinance be d
04coa
asnded but not rvolred.
po/moninq
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AgendaNo
ATTACHKENT 5 Agenda I
Date
Counoil issues
since the Council briefing and discussion on June 25, 1993, four
Council members have met with staff and P&Z has discussed the Task
Force recommendations three times. Following are issues raised and
staff comments.
1. Standards should enable some flexibility in order to take into
account different situations and places. There should be some
way for differing parties to discuss and reach a balanced
solution.
COMMENTS•
• Conditioned and PD zoning enable this.
• None of the Task Force recommendations affect our "work
out'$ systems now in place.
• The MXD district does not mandate or create rigid
standards.
• The Design Guidelines are not rigid, are not adopted by
ordinance, but provide a consistent basis for review.
• There are many different ways bufferyards could be
developed.
• The Task Force recommendations do not mandate sameness,
but reinforce the Denton Development PlanOs policies
concerning mixed uses and neighborhood protection.
2. Buyers should be aware of what is allowed next door.
3. Piecemeal amending will enable more time for Council to
evaluate Task Force recommendations after P&Z has reviewed
each of them.
4. Deal with the simple parts first.
5. There should be a needs analysis for each recommendation.
COMMENTS See Attachment 2.
6. The cost of now regulations or standards should be known.
7. MXD allows too much staff discretion.
COMMENTSi
• All rezoning still must be approved by council.
• MXD allows a wider variety of land uses than any
district, but only with bufferyards and site plan
triggers. Tests on zoning cases since 1990 show that if
MXD were adopted, the most neighborhood sensitive zoning
cases would have resulted in MXD site plans. 911 would
have been site planned, requiring P&Z or Council approval
of a site plan after zoning to MXD.
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AgendaNo
Agcndali8
ATTACHMENT 5 Ue
Page 2
• The Task Force recommended alternate bufferyards be
approved by staff. P&Z expressed concern on this issue.
Staff (Legal and Planning) would recommend alternate
bufferyards be approved by P&Z or Council. P&Z now
approves landscape ordinance alternate bufferyards.
8. MXD enables "spot zoning".
COMMENTS:
• Spot zoning is a court made rule.
• John Mixon, author of Municipal Zoning Lays, notes that
zoning in accordance with master plan policy may not be
spot zoning. In the 1981 landmark Texas Supreme Court
case Pharr vs._Tippitt, it was recognized that long range
master plans must be taken into account and that spot
zoning issues may be mitigated by impact and design
analysis. The MXD adopts master plan policies, mitigates
the "edge" between different land uses, and compels site
planning for the most sensitive building.
• Zoning to MXD still requires Council approval in all
cases.
9. No objection to piecemeal amendment.
A000492
III
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ATTACHMENT 6
Agenda No
Aga?dalte
Planning 6 Zoning
Minutes of Aug. 25,1993
Page 5
IN OPPOSITION: Robert Heilig, 809 Ryan Road, Denton, Texas.
Mr. Heiliq asked why the easement was not used to hook up to
the existing drainage on E1 Paseo.
Mr. Bucek said he wanted everyone to not lose sight that the
case was zoning. The issues that have been brought up are not
the issue, but to find the less intense issue.
REBUTTAL: None
RECOMMENDATION: Staff recommended approval of Z-93-019.
Public hearing was closed.
No further staff comments
Ms. Rttssell moved to recommend approval of Z-93-019. Mr.
Norton seconded and the motion carried unanimously (7-0).
V. Work Session:
New Zoning Ordinance.
Frank Robbins explained that the purpose of the work session
was to answer any questions ti.at the commissioners might have.
The Commissioners discussed the zoning ordinance with special
attention to the MXD zoning. They analyzed the 911 case and
the buffer yards, and the cost that could be involved with the
buffer yards.
VI. Director's Report
Mr. Robbins said his only report was discussed in the work
session.
VII.Future Agenda Items.
Future agenda items were included in the packet backup.
Meeting adjcurned at 7:30 p.m.
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Planning and Zoning commission RpW2U~_.._....°
Minutes for 9/8/93 R~ ^C lCm
Page 3
STAFF REPORT: by David Salmon
Mr. Salmon explained that the easement was obtained in 1979 to
accommodate an electric transformer. The transformer and
conductors were relocated several years ago and a building was
constructed over the easement tract. He explained that when
an easement is created by separate document you must get rid
of it by separate document. The request is basically a clean
up request. Mr. Salmon said there is a building over the
space at the current time.
RECOMMENDATION: Staff recommended approval.
Mr. Norton moved to approve the abandonment. Dr. Huey
seconded and the motion carried unanimously (6-0).
Mr. Cochran left at 5:45 p.m.
V. Work Sessions
The new zoning ordinance, MXD, bufferyards, and
administrative discretion.
Mr. Robbins conducted the work session. He informed the
commission that the council did not approve the rewrite of the
zoning ordinance. No outside legal services were budgeted
for. Mr. Robbins said the outside legal services for the
rewrite were not availai,le in the budget that was approved for
93-94.
A discussion was held to better inform the commission about
the MXD district and the things that were involved in the
rewrite. Barbara Russell and Dick Norton emphasized the
importance of the rewrite and the MXD districts. Mr. Bates,
a member of the Zoning Task Force, asked the commission to
remember that the MXD zoning had two sides, and they should
not put on the the flaxibility demands
that scouldobe gofferedhwiththe developer mixed euse
6istricts. Ms. Russell said she understood about the new
budget, but felt that the Commission should present something
to Council letting them know how the Commission felt about the
importance of the zoning rewrite and the MXD districts. It
was the general consensus that the work should continue,
possibly for the next budget.
V1. Director's Report
* PD-16 minor amendment
ATTACHMENT 7
IOSEon his (oiled some It4vnl tontrp Eoob b cunvnu~et~i~~' congestion became one of the
city 's m. !e o1u`~ Isroolic1lgf'Ol?f r a pee of the
aeeompUsh ambldous look, kludinl prom09111 urban cr{JfG68"C101 li"m m devd-
, re Many historic strictures were razed.
and spreading the beneFlt: of economic pwth, opment pre Wu
protecting dhfenity, achieving urban deslpn Boston tic r, vile ct ''3t7Rf*3S3hlSblenatural re•
source, was being encircled by upscale condomi6-
excellence, and lmproving the quality of IHe. ums and private offices. Opportunities for public ac-
cess to the waterfront and for water-dependent uses
were rapidly diminishing.
By the mid- 1980s, it was clear that Boston needed
a new and substantially different kind of tuning
code. Residents were demanding from City flail a
moratorium on all derelopment in their communi-
ties.'fhey were angered that they had endured the
housing pressures generated by the downtown boom
The Power and the impacts of institutional expansion but had
shared in none of the benefits. Raymond Flynn had
just been elected mayor, largely on the basis of his
commitment to provide for balanced growth, afford-
able housing, and a sharing by the ntighborhoods in
the benefits of the growing downtown economy. The
political will to change the cky s basic land use con.
troll and devtlopment regulatiortvwas clearly present,
Of ZORIN both from the grass roots up and from the top down.
When Flynn began his first mayoral term in
9 r
1984, he asked the Boston Redevelopment Author-
ity (BRA), the city's planning and development
L I N D A M O N G E L L I FA A R A M D
HOMER RUSSELL agency, to reexamine the city's toning and growth
management policies and to develop strategies for
deriving public benefits from the city's rapidly ex-
pandingeconomy. The BRA began a comprehen-
he Boston Zoning Code adopted in 1964 sive revision of the Boston Zoning Code, grounded
was based entirely on the city's urgent need in a community-based planning process, Each of
to stimulate economIc growth. Comprehen• Bostons 21 neighborhoods and its 11 downtown
sive planning was not a consideration. The districts is to have individualized land use plans.
role abolished height limits established in 'the land use Flans are to be articulated within du-
1924 and applied a uniform set of suburban- trio toning plaru that contain a legal framework of
style controls to a diverse array of residential neigh- toning controls. Each neighborhood is viewed as a
borhoods, each with a disdncdve character based on functionally autonomous town that should include
its own housing apes and building patterns. Plan. op;rortunides for housing for all economic groups,
ning by variance became the rule, with over 1,000 quality jobs, an expanding economy, and open-
applications for toning relief received by the Board space and recreational opportunities.
of Appeal in a single year. The BRA thus rejected the 1960s concept of a
In the 20years that followed, 20 million square generalirtd citywide master plan that masks the
feet of office space was built downtown to house the city's rich social, ethnic, architectural, natural, and
service sectur businesses that supported the high- land use diversity. Instead, district toning clans do.
technology industries ringing the city. Between 1965 fining specific goals and objectives and land use
and 1985, 85 percent of all commercial growth in plans and controls for each neighborhood-when
the city occurred within the two-square-mile area completed and combined-will serve as the general
containing the financial district and the Back Bay. plan for the city that thrives on this diversity.
The downtown skyline grew taller and richer The new toning is Intended to be fine grained,
without significantly improving the economic condi. and from the outset it was understood that the plan-
flow and quality of life for the low-income residents ning and rezoning of each district would require con.
In surrounding neighborhood. Most construction siderable time and commitment. City planners and
jobs went to workers turn outside the city, and the the general public wtre concerned, however, that a
central core lost population to the suburbs, At the lengthy process would leave neighborhoods vulner-
same time, traditional manufacturing areas slipped able to Inappropriate development To protect dis•
Into decline. Because most of the new permanent tricts during the plarning process, the Boston Zoning
jobs created by Boston's revival went to suburban Commission adopted the Interim Planning Overlay
Orrober 1993 a Wars land 41
I
bacon Ni bor curt expettstions.'The goal of this balancing pro-
ws mad NstA Bess is to protect the public interest without discour-
n@V*w d 4 aging private enterprise.
protxthtd by No. Decision making in urban planning requires not
torte 6dw 4;sla- only technica re aptitudes, but also thought-
6A 80SIM he ful,qualitativ luo tents. l ma ewise
n idopled
ir-
k . judgments ddb 261106~ po ieateesorkuly
ines~Inihzodhp demonstratckvt6esidesoklywith publicofficials.
tfut fiat or4 pro- Plans work most e RM-%%lc wen a fashioned
ted the dsdtxttn with the direct imuhement of the community at
charades oldie large. Moreover, the ability of the public to under.
dys Metlom neigh- stand complex infurtnation necesury for decision
boftosis bU also making rests, in part, on its ongoing involvement
promote design with planning issues.
tompeobtiry' In Boston, each district's planning and rezoning
process begins with the appointment of a citizens'
advisory ourrunittee nominated from the community,
consisting of local residents, business leaders, and
ii property owners. Representatives of advocacy or•
ganitations that focus on cityn<ide issues like open.
1 space protection, historic preservation, or environ-
mental concerns also are included. BRA planners
q work closely with each citizens' advisory committee
= to codify locally desired development ground rules
j in the form of a toning plan that achieves the objec-
tives established at the outset.
District OPOD) in 1984. An IPOD, established for
a specific geographic area for a two-year period, de• The Public Realm
fines a requiredcommwn typrocess, specifies district The public realm is that aspect of the environment
goals and objectives, and establishes Interim con- that is visible and accessible to the public, including
troll. Development in an [POD may be pernt tted both spaces and the building walls that frame them.
only aher community and BRA review. Planning 'The concept encompasses areas long thought of as
within the context of IPODs was particularly impor• public, such as parks, tree-lined boulevards, sidewalks,
tant during the 1980s, when the economy was strong and streets. It also includes some areas that are held
and the city was under intense development presmm, in private o+snership, but that are truly public in
While the new district toning structure is de- terms of their function, Impact on the streetscape,
signed to rento neighborhood diversity and varying or historic context The principle of the public realm
needs, planning is guided by four primary policies rests on the belief that cities by their nature are pub.
• Community panicipation in the planning and lic places m well as clusters of private property. Bos•
toning process; ton is a great walking city, and special care and atten•
• Preservation and enhance mentorthe public realm; tion have been given to protecting and enhancing
• Protection of rtsidemial neighborhoods Index- the pedestrian experience,
passion of affordable housing; and Open-Space Subdistr[cts. •Ilte toning plans
I • Promotion of balanced economic growth and job for Boston's neighborhoods reflect an expanded
' opportunities. concept of open space and a system of open spaces.
Every neighborhood includes publicly owned open
Several new types of zoning subdistricts have ranging from the relatively formal Public
been created, and traditional zoning controls are ap- spices,
en and historic CAmmon, el the wetlands c
plied i tiy throughout the planning process into the Fens, to cummu Jty garden These public lands
to promote mote these policies and integrate them into are mapped and protected as Open-Space Subdis•
district toning plant,'roday, store than 75 percent the first time in Boston's toning.
of the city has been rezoned; the process is expected trice fOneor of the t t important applications ofopen-
to be comppleted by the end of 1994, when all of the space toning Involves the 27 acres of usable surface
plans
will be combined Into one e document, parcels that will be created along a two-milt stretch
Commun Participation by the depression of the elevated Central Artery,
11trough s communityparticipation effort, the BRA,
I Urban planning must balance many complex fae• the Boston Transportation Department, and the
ton, including history, tradition, social equity, mar- state have established a park plan that limits the use
let forces, property rights, current benefits, and fu• of these parcels to public open-space and cultural
i
14 Wan lnnd • 0,i4er 199;
r ; q!?$r{ - - ar'tt r t. t~~xc * _ * -~t7 r the Fens, a portion
t f , ( r i ; r- ' ) . ' y ~ f1 of Frederkk law
%raw$ EMWNld
• ~'ty r .•A . . r Flecsdaet Oplrr
3r`► ! : spats "enc dr
vi •(s ~ syu4^ nctyagatlntto
tta dovaaorati he
rwided a tour
moo public metON
Vourd tar Mn
dsan a cc
aury.
r
r
if
9
i
uses.11he BRA developed the Central Artery Spe- of Alassachusetts has held in trust for the pubbc,
eial District Zoningto codify this plan and preserve based on a colonial law that remains in effect today.
the air rights for public spaces when roadway con- The Flarborpark District Zoning, estalh jjrLq'~b 7,
struction is completed. (For more details, see "Bos- clearly defines the central rote of the r((>~olairt the
ton's Big Dig" on page 13.) public realm by requiring public acct r}kibi bw).~
Urban Wlds. The city has identified a special waterfront as part of all new or erpandt tlcvt -
collection of 103 sites as Urban Wilds. These are ment. De;clopment of residential and o ce uses on
natural areas that beautify urban neighborhoods piers is prohibited because it impedes pedestrian ac-
and reflect their history and geology. They include cess and pushes out water-dependent uses. Harbor.
meadows and woodlands; low-lying wetlands and park Zoning also requires that water-dependent uses
hilltops with scenic vistas; outcroppings of Roxbury be included in any new development on tidelands.
pudding stone; and historic farm sites, Most are pri- The zoning incurpcrates specific-use subdis-
vately owned, not protected as open space, and tricts to ensure a diversity of uses along the harbor
carry private development rights, typically for sin- and to retain its working-waterfront character. In
gle-family housing. the Nlarieme Fconomy Reserve Subdistrict, uses
'Me new toning establishes a Conservation Pro- are limited to water-dependent industuies. Water-
tecdon Subdistrict (CPS) intended to minimite the front Service Subdisuicts reserve land without deep
disru{ tion of Urban'v't'ilds sites, ne CPS requires water access for suppport uses fur shipping, and for
the clustering of residential uses and allows Institu- small boat repair, fishing, and f sh handling and
donal uses that can be centralized on a site and can processing industries. Ground floor spaces in the
potentially reuse historic structures. A low floor/ district's mixed use comme-cial subdistricts are re-
area ratio of 0 3 is pcmrined and site plan review, in- sened primarily for public and cultural uses.
eluding urban design and landscaping, is required. Urban Design Guidelines. Urban design guide.
Both landscape guidelines and spccific requirements lines also are used to preserve the public realm.
are dcfned in the zoning to preserve natural features. These guidelines respect and prurnote neighbor.
Gtcenbelts.Ile city alsohu csublishcd Green- hood variations in building height, scale, use, mate-
belt Protection Uerlay Districts requiring landscape rials, setbacks, and density. New buildings need not
review and the preservation of opcn•space buffers slavishly replicate adjacent or older ones, but they
for public and private land along Boston's greenbelt should be good neighbors. The urban design gulde-
parkways, which sere as gteen ribbons connecting lines also offer developers and their designers sufft-
many neighborhoods and ma)rrr park sites. cient latitude to respond to market forces and the
Harborpark District, Boston Harbor has been latest trends in building fechnology and architee-
an integral part of Boston's history and its relation- tural expression
ship to the region and the world for over 300 years. The Boston Civic Design Commission was es-
Iistorically, it is s resource that the commonwealth tablished in 1990 as a component of the new toning
OcOer 1993 a hbbaa 1nnJ 51
r' Roxbury w the brick bow-f ont ruw houses of the
South End to the triple deckers of Dorchester. The
district zoning structure recognizes these differ.
ences and ensur s it new construction and reha-
bilitation ~ ~ruswirrYt.WitbJwRiFCkarac-
terkticssir r1~R existing homes,
Alulti famizzt~~iattme1 l b" iT cogs u i y per.
mined in th4 61J asaaing-Aww, ix shrtmost part,
they are permitted only in mixed use neighborhood
business districts. Two- and three-family residential
subdistricts have replaced older multifamily zones.
The boundaries defining ncighhrnrhanl subdis-
FF trice have been painstakingly redrawn to preclude
3 encroachment of incompatible land uses. Buffering
r requirements and environmental perfonnance
i = standards have been incorporated into the revised
industrial and manufacturing toning to protect sur-
rounding residential neighborhoods.
The laWdeeker plan. It provides an appropriate public forum in The city also has established a policy of encour-
1 how* Isa symbol u hich to discuss and debate design Issues, The I I- aging new housing construction in the dou ntwAn.
d nunyol8oston's member commission, appointed by the mayor, tram- A Housing Priority Area therefore has been estab-
,xbarfaoda prises design professionals, preservationists, and lay lisped within the Midtown District For buildings
2W1Moafto people. It publicly reviews the design of large prof- more than 155 feet high, all of the floor area above
Paw Mil tot ects (over 100,000 square feet) and other projects of this height must be devoted to residential uses, In
new andreAebF
tattd houslnp Will significant impact, Includin8 those near parks and certain downtown areas, height and FAR bonuses
be tort"We WMh historic districts. Ths commission also reviews dis- may be approved for a project that h at least 75 per-
txhfng n Vbw- trict design guidelines proposed by the BRA. cent residential, provided at least 10 percent of the
hoodstrubras. Development Review Requin meets. Wide on-site units are affordable.
Boston's new toning sets forth clear use and dimen- Finally, Boston's housing linkage program, one
sional regulations and urban design guidelines, de- of the first in the country, represents a social con-
i velopment review requirements provide a predict- tract to build bridges of economic opportunity be-
able BRA approval process. The requirements are tween areas of a city experiencing rapid growth and
more location-specific and finer grained than the neighborhoods that have not shared in the benefits
guidelines and ensure that approved projects are of that growth. It requires developers of large office
conslstent with the intent of the toning. They im- or retail projects tither to build affordable housing
pose time limits on the design and environmental or to contribute funds to build such housing. The
review process conducted by the BRA. Develop- amount of linkage obligation is calculated at $5 for
ment review requirements apply to all large projects every square foot of development over 100,000
(over 50,000 square feet) and to smaller projects (be- square fetq a typical 20-story office building thus
tween 20,000 and 50,000 square feet) proposed in generates around $2 million in linkage payments.
the neighborhoods, The review of large projects in- To date, $55.3 mullion in linkage payments has been
eludes five components; historic resources, Infra. conurdtted and 533.7 million of this total has been
structure, transportation access, environmental pro- allocated for the rehabilitation or construction of
tection, and urban design. 3,560 units of housing. Seventy-seven percent of
these units are affordable to low- and moderate-
Housing income residents. (For more details, see "Boston's
Boston is defined by the diverse character of its resi. Linkage Program" on page 8.)
dential neighborhoods and the people who live in
them. Protection of existing housing stock and crew EConoMIC Growth
tion of an adequate supply of affordable housing is
critical to the gwUty of tire of its residents and a pri- Although Boston's downtown economy u as strong
angry focus of planning and zoning efforts. Toning when rezoning began in 1984, economic development
regulations play a pivotal role in meeting these ob- was still an issue. One goal was to direct growth to
jectives. The design, siting, and density of housing the neighborhoods and to downtown locations
create a living environment that either can be de- where traffic Impacts could be minimIted. Another
strucuve to social Interactions or can faster s sense was to diversify the economy in order to create and
of well-being. sustain job opportunities. One of the principal totting
The city's older housing stock varies by neigh- tools for directing economic gruw6 Is the mapping
borhood, from the single-family houses of West eon6nued on page 92
12 1. !rban land 0 Ot4er 19 91
UN Old contnrurd from prgr $2 The focal point fur econontic growth
of Economic Development Areas (FDAs), in metropolitan Boston is shifting from
in which relatively higher heights and FARs the R~y~y k iX I.19S computer- and
and diverse uses are permitted. In the down- ehee d(i~6diiQb t9flrf7ltle ~s~ -
town, EpAs hart been t ublishcd at Kurth nomip If,pwth generators are a t `
arc
Sution and South Stadon, both served by center,'6itmehnoingyindrwise,higher
extensive rapid transit and commuter rail education campuses, scientific research and
lints, where intensive development can be development center, pilot production and
accommodated by adjacent, intemiodal tran• traditional manufacturing facilities, and the
sit centers, Boston's I'M Pier-when I9 million tau or IIsh environmental technology industry, The
EDAs have been established elsewhere wen processed In 1992-Wornlres ft mtkkq BRA sets the most potential for this growth
to encourage job generating uses. Uses that waterfrod and ispr9leehd bytlte Martine Econoroy to occur over the next decade in that area of
are promoted vary by the EDA's location, Reservist Subdidrid d ft Harborperk Disaid the city known at Crosstown.
Tables specify which uses are'allowed," The Crosstown corridor cuts a broad
'conditional," or `forbidden," while the text path across the city--from South Sutton/
describes planning and growth objectives of ter plan (L1IP) requirements. Institutional Fort Point Channel to South Bay, the South
the EDA, giving developers a clear idea of subdistricts define large institutional cam- F.nd, hieh,ea Cass Boulesard, Ruggles Cen-
what kinds of growth the city is encourag• poses and recognise the hgleirnacy of their ter, the Longwood Medial Area, Allston
Ing (and will be receptive to) and where. For uses. An L1tP for a large college, university, Landing, and the Charlestown Navy Yard.
example, the Greater Roxbury EDA is lo- or hospital muss include a development More than 90,000 people work in its high-
ated at the Ruggles rapid transit station, plan that projects at least five years into the growth industries, many thousands more in
which links Roxbury to the downtown, and future and defines potential impacts and its other industries. In the health are, bio•
Is directly adjacenttothe Longwood Aiedial community benefits. A major project an be medical research, and higher education see.
Area, which needs room to expand. This approved only if it is consistent with a teas- tors, this area will see an estimated 511 bil-
EDA thus promotes uses that are drawn from ter plan that has been accepted by the BRA, lion in investment during the next several
the downtown and Longwood economies. In addition to the housing linkage pro- years, which will crate approximately 12,000
Underlying eoning'seconomic growth gram. Boston has adopted two other linkage penrunent jobs and 26,000 construction jobs
tools is the belief 0 bringing job opportu- programs. Jobs linkage requires a developer for Boston residents.
nities to Boston's neghborhoods can be sus. to contribute S 1 for every square foot over Boston is already home to several
tained only through economic diversity. 100,000 square feet of commercial and insti• world-renowned unhersities and corpora
%k1thin certain areas of the downtown, height tutional floor space built for job training lions that focus on environmectol engineer.
and density bonuses may be approved on programs that help neighborhood residents ing and its applications. Computer software
the basis of the degree to which a project develop the skills needed to take advantage firms also are a fast-growing industry in
promotes such diversity. For example, In of economic growth. The Boston resident Crosstown. By giving this district a plan.
the South Station and North Station EDA+, jobs policy requires contractors working on ning and toning identity, In combination
the BRA may approve size bonuses if at construction projects funded in whole or in with targeted public improvements, the city
[cost SO percent of a project's gross square part by the city to ensure SO percent Boston has laid out a physical end regulatory 6ame-
foouge Is dedicated to uses other than com- resident, 25 percent minority, and 10 per. work for capturing economic growth,
merdal office space, such as scientific re- cent fennle participation. The resident jobs Finally, tourism--a c;t)nvide phenome-
search and development, engineering or policy also eov'cro privately financed non. non-fs a substantial Boston industry with
medial Instrument development, prototype residential construction projects larger than more dun $6.7 billion in annual visitor
fabrication, and the like. 100,000 square feet. spending, including both direct and spinoff
In the neighborhoods, three new types The city's parcel-to-p.tccl linkage pro- economic benefits. Like other industries,
of manufacturing subdistricts-light menu- gram uses the value of city-owned land and tourism has strong potential for expansion.
facturinS, the Impetus of the private deselo went to As the ciVe planning egcmy,the BRA-
and evelop- produce economic opportunities P for font wlth extenshe community Participation-
ment; Intermediate manufacturing; and develop.
heavy Industry-with accompanying per. residents and other substantial community has successfully developed a multifaceted
formanee sundards and buffering require- benefits, It links the disposition of publicly toning framework for protecting the city's
menu have been established, based on po- owned downtown development sites with housing, public space, and historic febric
tendal impacts to residents. the private development of publicly owned while concurrently promoting and shaping
In the I larborpark District, the Mori- neighborhood sites that probably would not future grow tooth, With Its use of
yria
time Economy Resent (ASER) Subdistrict be developed independendy. Under this calling not
is established on 660 ocr r. Within a AlER, program, the neighborhood sites must be only says 'no'to inappropriate land uses,
water-dependent industrial uses are the developed with the economic participation growth, urbanorsdesign andy ea),%6yecetoeconomic
only as-of-right main uses permitted, to on. of local community development organira• top.
sure that this type of industry 6 not lost bona and local businesses and developers. quality environment fur Bost m's reldents.
through competition from more profitable
eonunetcial or residential uses, 1117 and I#pfW Linda ASongelll Itssr and Homer Rutsell
Two other key toning mechanisms that The direction of Boston's conununity•based err arrllrrnr dinttort Niels rbr 80110a Redevrl•
have been developed to manage and direct planning end tuning has been clearly estab- oprnrnr,lutbonryry. Nor 6 rx ponrible jvr a11sr.
growth and protest residential neighborhoods lisped. One of the challenges now before the peter ojari8bborboodrndautcrfionr pErrmlrg
are the mapping of institutional subdistricts BRA 6 to continue to attract growth and jobs and uning, a bik RurreR b roponribkl0r ear.
end the establishment of institutional mas- to specifically targeted areas. bra daign and downrownpknning,
12 Man lend a orta4r 1993
=CITY-
-:COUNCI
Lill
Nf
°~o°• 1
0:
a.
a'
e w t p0
t
DATE: October 26, 1993
CITY COUNCIL REPORT
TO, Mayor and Members of the City Council
FROM: Lloyd V. Harrell, City Manager
SUBJECT: Code Enforcement
RECOMMENDATION:
No changes to the Code Enforcement system are recommended.
CRY:
1. What Code Enforcement does. Attachment 1.
2. How Code Enforcement enforces. Attachment 2.
3. Mowing contracts. Attachment 3.
4. Service improvement. Attachment 4.
BACKGROUND:
During this year's budget process, Council asked for a
briefing on code enforcement.
PROGRAMS. DEPARTMENTS OR GROUPS AFFECTED=
Building Inspections.
FISCAL IMPACTt
None.
Respectfully submittedt
Prepared by: Llo V. Harrell, C y Manager
PIr
F ank obbin AICP
Executive Director
Planning and Development
~~MOO<os
ATTACHMENT 1 ,pp~~,~~nnAA''NN
CITY OF DENTON CODE ENFORCEMENT DIVI'SI'C5N0
MONTHLY REPORT Agenda't2
SEPTEMBER, 1993 Date
CURRENT CURRENT YEAR LAST YEAR
VIOLATIONS _HONTR _ TO DATE TO DATE
High Grass and weeds 95 92S 98S
Trash, Oarbags, Debris 43 450 627
Junk Vehicles 26 267 298
Easement and Alleys 23 69 47
View Obstruction 7 S1 38
Signs 121 1,598 681
Zoning 4 30 56
Miscellaneous Violations 32 269 336
SUBTOTAL 3S1 3,670 3,101
NoN-VIOLATIONS 30 240 52
RZ-IKSPPZCcTIONS 335 3,756 20945
TOTAL 716 7,666 60098
Number of Contracted Jobs 10 221 146
Office and Property
Research Hours 197 1,435 10168
COMMENTi Code Enforcement Office had an increase of 130% sign related
inspections over last year. Included In this number is the
reduction of 127 portable signs from the original 30S. This is a
42% reduction. Mowlnq contracted yobs have increased by 76 jobs
above last year's total. The Code Enforcement office's inspections
have increased by 251 compared to last year.
I
I
AAA00081/2
VendaNo -
4Bendalle^^
ATTACHMENT 2
HON CODE VIOUTI0NG ARE ENFORCED
1. The goal is violation abatement. Personal contact is
attempted first, then letters may be sent, and as a last
action, citations may be issued. If personal contact is not
practical, letters are the first contact made. The letters
specify the violation and provide a time frame in which
abatement should be made. If violation begins to be abated
before the end of the time given, or good faith efforts at
abatements appear to be taking place, officers will continue
to work with violators before citations are issued.
2. Most violations are initiated by a complaint, except for
special projects, such as illegal sign abatement following the
March, 1993 sign ordinance amendment, when over 250 illegal
signs were moved.
Many violations are abated after an officer is called on a
complaint and other violations are noted in the vicinity of
the complaint.
3. Notice is made to the land owner of record, who is ultimately
responsible for violations.
A00004
i
D agenda No
ATTACHMENT 3
CITY of DENTQN, TEXAS MUNICIPAL BUILDING / ? 15 E. MCKINNEY / DENTON, TEXAS 76201
MEMORANDUM
DATES September 27, 1993
TO.* Lloyd V. Harrell, City Manager
FROMi Frank H. Robbins, Executive Director of Planning and
Development
SUBJECT: Mowing Costs
Councilman Jack Miller had asked about changing the current one
contractor/year system to one with multiple bids during the year to
encourage competition and provide a greater opportunity for MBE's
(minority business enterprises).
A detailed analysis is attached,
We would not recommend changing the system because:
1. The current contractor is an MBE1
2, The unit and aggregate costs are significantly less with
annual contracts. Single lot contracting is about 40%
more expensive ($10,347 for separate contracts to $6,215
for annual contracts);
3. Competition exists on an annual basis;
4. Quality and timeliness are more effectively assured; and
5. Actual and opportunity costs to administer annual
contracts are significantly less.
If we can provide any further information or clarification, please
let us know.
FHR:lah ;rank H. Robbins, iCP
Attachments Memo, Rais to Robbins, dated September 24, 1993,
A1cItD0ib1
V71666-8200 D/FW METRO 4342529
b
M1
k
4
5
AgerdaN4 - -
Ayoda Iteoj
CITY of DENTON, TEXAS MUNICIPAL BUILDING / 215 E. MCKINNEY / DENTON, TEXAS 76201
MEMORANDUM
TOs Frank Robbins
FROMi Ron Rais, Code Enforcement officer
DATE: September 24, 1993
SUBJECTi Single compared to multi-mowing contractor bidding
process
In the past we used contractors on a low bid system for each job. Each time we bid
a job, it required that 3 or 4 contractors would meet us o, each and every job
location in order to bid on the work. we received several comments from the
contractors that this was a waste of their times as well as ours because this took
them away from actual work that they could be doing. During this time it was not
required by law to have contractors bonded and insured. This all changed two years
ago when the State required contractors working for the City to be insured. Max
Blackburn, Risk Manager for the City, has required contractors to be insured and
bonded. Moot of the local contractors could not afford the high cost of insurance
that the City required ($100,00D+). It should be noted that contractors only receive
about $14500-$20000 worth of jobs from the City each year, and this would not even
pay the required insurance premiums. Also, I reiterate that this was a time consuming
process for Code Enforcement (i.e. filing and maintaining 4-5 different invoices,
check requisitions and spending time in the field with each contractor).
Another factor that was considered for a single contractor system was the varied
charges for the same lot mowed at various times during the year. Attached you will
find lions placed on various properties where the charges are inconsistent for the
same type of work required. Also, another reason the single contractor system works
is that at the busiest time for Contractors we either could not find a contractor to
bid on work or we had to pay extra in order to get them to fulfill the City's
obligations. Working with multi-contractors meant multi-standards concerning the
quality of work that was done, which again, slowed down the process further requiring
that work be redone to the City's standards.
In summary the multi-contractor system has evolved to its present single-contractor
system due to state requirements (bonding and insuring of contractors) and is found
to be more cost effective to the public. Tom Shaw, Purchasing Agent, has stated our
present policy of biding one time per year is our most off icient process of contractor
selections and violation abatement.
If you have anymore quo ions or concerns please contact our office or Building
Inspection
on a , • n orcemen 3ffTcer
RRtdjb
ASSOOO83
R I~
Y
x
Age~Galte
D~±y
SSiEDULE OF MOWING CHARGES
MOWING MOWING
DA DRESS DCAD r DATE FILED PAST PFF=
1128 E. HICKORY 030124 10/18/90 105.00 80.00•
09/30/91 125.00 80.00
03/06/92 115.00 80.00
10/30/92 113.00 80.00
720 COOT 035621 05/01/89 45.00 33.00
02/02/90 180.00 80.00
02/26/91 115.00 80.00
04/18/91 115.00 80.00
407 N. BRADSHAW 033328 09/01/87 50.00 33.00
03/06/92 33.00 33.00
718 BAILEY 032776 05/18/87 150.00 80.00
07/13/87 110.00 80.00
405 S.BRADSHAW 033333 07/13/87 120.00 80.00
09/01/87 125.00 80.00
05/09/88 125.00 80.00
905 INDUSTRIAL 036171 03/05/90 40.00 33.00
04118/91 80.00 80.00
06/30/92 35.00 33.00
625 SMITH 033033 04/04/88 145.00 80.00
03/05/90 575.00 320.00
10/16/90 120.00 80.00
04/18/91 125.00 80.00
09/25/91 125.00 80.00
03/06/92 150.00 80.00
315 FRY 09/01/87 55.00 33.00
02102/90 115.00 80.00
802 BAILEY 032785 08/18/86 135.00 80.00
10/31/88 115.00 80.00
514 WILSON 035170 08/18/86 135.00 80.00
09/17186 225.00 125.00
05/18/87 245.00 135.00
524 WILSON 035161 05/09/88 245.00 135.00
03/05/90 330.00 180.00
08!26/92 147.00 80.00
12/23/92 113.00 80.00
721 BAILEY 032789 08/18/86 135.00 80.00
09/01/88 115.00 80.00
10/31/88 115.00 80.00
500 ROSE 033185 12/30/87 115.00 80.00
01/04/88 138.00 80.00
05/09/88 135.00 80.00
02/21/91 115.00 80.00
3904 WATERFORD 021386 02/02/90 160.00 90.00
02/21/91 130.00 80.00
04/18/91 130.00 80.00
2204 KINGSTON 031665 05/18/87 160.00 90.00
04/04/88 115.00 80.00
517 SMITH 079488 05/01/89 350.00 190.00
02/02/90 840.00 460.00
06/19/90 350.00 190.00
806 MORSE 033125 06/19/90 190.00 170.00
04/18/91 155.00 80.00
509 RUTH 027714 05/01/89 205.00 90.00
02/02/90 160.00 60.00
02/21/91 125.00 60.00
ASS00083
.'~enda No.
Age,~0a~tert~„
CRESS MOWING Nte MOWING
DCAD / DATE PILED PAST
613 MEADOW VIEW 027102 02/21/91 125.00 80.00
10/25191 255.00 135.00
10/30192 113.00 80.00
1126 E. HICKORY 030128 08/18/86 130.00 80.00
05/18/67 155.00 80.00
04/18/91 12C.00 80.00
1013 SHADY OAKS 147893 12/15/89 125.00 80.00
02/02/90 260.00 140.00
06/19/90 115.09 80.00
10/18/90 130.00 80.00
COMMENTi
using fiscal years 1991-92 and 1992-93 for comparison of administration time, number
of jobs contracted and manpower cost per hour the following show the savings using
the present one contractor eyatem. There was a 45♦ reduction of time spent with the
mowing contractors 123 hours compared to 224 hour e. The jobs contracted increased
by 50% from 146 to 220 jobs an6 there was a decreaee of approximately 4516 in man hour
cost per job from $61 to $35.
ASS00083
Ap~idaNo
ATTACHMENT { A~eoOaliem
SERVICE IMPROVEMENT
1. As noted on attachment 1, Code Enforcement officers made
thousands of contacts with potential code violators.
Complaints of poor responsiveness, officer attitude, or errors
are rare but they do occur. The number and type of code
enforcement task's and actions will continue to increase.
2. Code Enforcement productivity and real and perceived service
delivery can and will be improved fundamentally through
enhanced automation, training and continued office environment
cultural change based on the philosophies of orienting on the
customer and their specific needs, self directed team work,
empowerment, and quality service mission focus.
3. Training. All code enforcement officers are certified. They
all attend technical training annually. Some are officers in
their professional association. In October and November code
enforcement officers and their supervisors will attend self
directed work team seminars. With the assistance of the
Police department, code enforcement officers will improve
customer skills by learning about 1tverbal judo", and other
means to deal with tense, argumentative enforcement
situations.
AXX00495
=CITY
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MY of DENTON, TEXAS MUNICIPAL BUILDING / DENTON, TEXAS 762011 TELEPHONE (817) 388-8307
office Of the city manager
M E M O R A N D U M
TO: Mayor and Members of the City Council
FROM: Lloyd V. Harrell, City Manager
DATE: October 21, 1993
RE: Resolution in support of the University of North Texas
The Legal Department is working with the University of North Texas
to prepare a resolution for your consideration concerning the
City's support for Division I football status for the University.
This resolution was not completed at the time the agenda packets
needed to be distributed and will be presented to Council at the
meeting Tuesday evening.
V ~Gti'Z~~J/
Lloyd V. Harrell
City Manager
Ap* MO
CJTYofDENTON,TEXAS MUNICIPAL BUILDING / DENTON, TEXAS 76201 / TELEPHONE(817)568.8307
Office of the City Manager
TOr Mayor and Members of the City Council
FROM: Lloyd V. Harrell, City Manager
DATES October 19, 1993
SUBJECT: Report form Dr. Bernard Weinstein Regarding Impact of
Half Cent Sales Tax to Reduce the Property Tax Rate
Dr. Bernard Weinstein, Director, Center for Economic Development
and Research at the University of North Texas, and his associate
Terry Clower, will present a study regarding the economic Impact of
a half cent sales tax to reduce the property tax which was prepared
for the Citizens' Sales Tax Advisory Committee.
This report was distributed to the City Council in last week's
packet under separate cover. Please bring the booklet of sales tax
information to the October 26 Council meeting.
Llo V. Harrell
City Manager
4CWa No
Onle
TIMELINE FOR POSSIBLE SALES TAX ELECTION
Report Due from Committee October 15
Committee Presentation to CC October 19 or 26
Remaining City Council Meetings October 19, 26
November 2, 9, 16, 23
Receive Pre-Clearance No later than November 16
from the Justice Department
(60 days prior to election)
City Council Call Election No later than December 1
(45 days prior to election)
Election January 15, 1994
I
Agecda No
AQeOJaiteno,...........,..r..
►ldte
Analysis of the Impact of a Sales Tax Increase
for Property Tax Relief in the City of Denton
prepared for:
City of Denton Citizen's Sales Tax Advisory Committee
prepared by:
Bernard L. Weinstein, Ph.D# and Terry Clower, M.S.
Center for Economic Development and Research
University of Korth Texas
Denton, Texas
September, 1993
k
i
Ape~daNo _
Agenda tram
1. Introduction
The residents of Denton, Texas may soon go to the polls
to decide whether to increase the city sales tax by one-half
percent and use the proceeds for local property tax relief.
As proposed, the tradeoff would be revenue neutral-- that
is, property taxes would be reduced by the full anticipated
yield from the hike in the sales tax levy.
This proposed change in the method of local revenue
collection raises a number of policy questions. Will the
swap between sales and property taxes make the overall
revenue system more or less regressive? How will burdens be
shifted among classes of taxpayers? Does the sales or
pr:,perty tax provide a more stable revenue source over the
long-term? Will an increase in the local sales tax send
Denton shoppers to jurisdictions with a lower rate? Would a
reduction in Denton's property tax rate make the city a more
attractive site for industrial location and expansion? The
following analysis attempts to shed some light on these
issues.
Tax Incidence an Burden
2.1 Property Tax
Much of the debate concerning the tradeoff between
sales and property taxes concerns the comparative
regressivity of the two taxes. Sales taxes are generally
thought to be regressive because lower income individuals
Uganda No. _
A6eadallem 2
C~'e
allocate a higher portion of their incomes in payment.
(However, the burden is often mitigated through the
exemption of food and medicine). In contrast, some
scholarly research in the 1970
Y s concluded that on a national
basis, property taxes may be slightly progressive. This
argurent has received some measure of attention in recent
letters to local newspapers. However, to fully examine the
issue of property tax incidence we must delve deeper into
the literature and also assess the local market.
Aaron (1975) espouses one of the more convincing
arguments for the progressivity of property taxes on a
national basis. However, he imposes a major qualification
to that conclusion: If demand for rental property is high,
the tax burden is shifted to renters who are usually at
lower income levels. This is indicative of Denton where the
presence of the two universities increases rental property
demand. Additional research by Mieszkowski (1972) and
Wheaton (1984) supports Aaronts conclusion of property tax
regressivity in strong rental markets. Paglin and Fogarty
(1972) also suggest that as with a sales tax, expenditures
for housing rs a percent of total income decline as income
rises; thus, property taxes impose greater burdens on low
income individuals. Paglin and Fogarty also reveal the
presence of administrative regressivity with property taxes.
Administrative regressivity in property taxes occurs
from two major sources. First, the initial property tax
assessments on higher priced houses tend to understate the
, a
a
Agenda No
Agenda!ferr~- 3
(bite
real market value compared to lower priced houses, Second,
the lag-time between reappraisals tends to accentuate the
differences between low- and higher-valued properties
because low-value, marginal and deteriorating houses will
decline in real market values relative to higher-value
properties. (These findings were supported by Chun and
Linnemann in 19s5). In the area examined by Paglin and
Fogarty, I'the lowest income group experienced a 29.6 percent
higher burden due to the administrative factors while the
highest income class listed was the beneficiary of an 11.9
percent reduction in tax burdens relative to the intrinsic
incidence of the tax."
The unusually r.ilh demand for rental property in Denton
probably means that any reductions in property taxes will
not be passed on to renters in the near-term. However, over
the longer term a reduction In the property tax rate should
temper rent increases,
2.2 Sales Tax
There is no argument that sales taxes are regressive.
However, the structure of the local economy helps to reduce
the tax burden on Denton residents. Denton retailers have
been under pressure from competitors in neighboring
communities resulting in a geographic narrowing of the
Denton retail market. Vista Ridge Mall substantially
altered the shape of Denton's effective retail market to the
south and now the opening of new "outlet malls" is pushing
I
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QgeldaIleq - _ 4
Oa!e
the effective market from the north. This increases
competition for Denton retailers and, as suggested by Braid
(1987), would indicate that a portion oC the sales tax
increase will be absorbed by retailers as they maintain
competitive price levels. This could be considered a
"fair" outcome since these same retailers will experience a
decrease in property tax expenses on real property,
equipment and inventory.
Another advantage of the sales tax is that a portion of
the tax burden is paid by non-residents and students
shopping at local retail establishments. Some of these
students receive financial support from outside the local
community, and many of them reside in university housing and
therefore pay no direct or indirect local property taxes.
Recent surveys conducted by Golden Triangle Mall (GTM)
management have found that 30 to 46 percent of GTM shoppers
reside outside the Denton city limits. If we assume that 20
percent of local retail sales were purchases by non-
residents, the increased tax burden per Denton household
from the proposed one-half percent increase would have been
$45 in 1992.
3. Impact of Higher Sales Tax Rate On Retail SBIes
Fisher (1980) notes three possible negative effects of
I
an increase in sales tax rates. The first would be an
effective lowering of consumer buying power and thus a
reduction in total retail sales. Second, consumers might
a
4nt i'J ; rr.~
shift discretionary purchases to non-taxable goods. Third,
consumers could shift their shopping to a lower tax
jurisdiction. The focus of much of the scholarly literature
examines the third possibility and will be addressed first.
Most of the comparative analysis on retail sales
examines cross-border tax differentials between states.
These studies have indicated declines (increases) in retail
sales of 1 to 11 percent for each 1 percent increase
(decrease) in sales taxes. (See Walsh & Jones, 1988;
Mikeseil & Zorn, 1986; Fox, 1986). The largest effects tend
to occur where there is a difference in the base of taxable
goods, such as the inclusion or exemption of groceries.
Where the taxable base is the same, the lower limits of the
impacts are experienced. Furthermore, Fisher notes that
most of the analyses performed on retail sales performance
under differing tax structures make rigid assumptions about
perfect competition, constant costs in the long run, free
entry and exit in a market, and the absence of external
economies or diseconomies. These criteria are rarely, if
ever, met. Without these conditions the responses to
differences between taxing jurisdictions are probably
minimal. In addition, as noted in the previous section, the
accompanying property tax decrease will allow merchants to
lower prices if they believe their market position will be
damaged by the sales tax increase.
Classic retail site location theory also supports the
minimization of the impacts of a small increase in prices.
v
Aaer~a Na
Agta~a Iem 6
Crie,_._____..._....,, .
The buying location decision will not be altered until tax
savings exceed the additional costs of travel to a lower
cost location. If we consider a Denton resident purchasing
a $l,ooo refrigerator, the marginal cost under the proposed
sales tax increase (assuming the retailer does not pass
along property tax savings) will be $5.00. In contrast, the
buyer could choose to shop at Vista Ridge Mall with travel
expenses estimated at $8.40 (30 miles round-trip at $0.i8
per mile) and perhaps pay a delivery charge as well.
To paraphrase Reilly's retail site location theory:
People will not usually shun a good quality retail center to
a less convenient center with similar quality and degree of
attractiveness (Walsh & Jones). In other words, the retail
buy location decision will be based more on ease of site
access, parking convenience, merchandise quality and non-tax
pricing differentials than on the difference between a sales
tax rate of 7-1/4 percent and 7-3/4 percent. This was
supported by the findings of an unscientific survey of
several Denton area retailers who generally do not believe
that the sales tax increase will affect their store sales.
However, the evidence does support the possibility that
consumers located approximately equidistant from two retail
centers may change their buy location decision if they are
aware of a sales tax rate differential. Therefore, as a
worst case scenario, Denton's retail sales might drop
initially by 1/2 percent with a 1/2 percent tax rate
increase. In 1992, this would have reduced taxable sales in
N0.
Ag,4,iltern 7
lk:;a - Denton by $1.9 million, still leaving a year to year
increase of 6,4 percent compared to 1991. In the long term,
this impact will be lessened and perhaps negated as
neighboring tax jurisdictions respond to increasing fiscal
pressures and are forced to increase their own sales tax
rates.
4. impact ot_Er9.c erty Tax Rates on F'., „
yeloa_ment
Studies performed on the impact of 'props ty taxes on
economic development have not
produ~ed consistkt fitldings;
Some research, such as Carlton(19831, did notind property
taxes to be correlated with 6conot4c pe#orma.Ace. Others
(Papke 6 Papke, 1986 and Pap4, 19$7) have fqp nd property
taxes to be statistically related to measurstlof economic
development. However, in the later .case =the
•#uthore
acknowledged that the tax differentials betweAn locations
must be "fairly large" to demonstrate. a statistically
significant relationship. Other st•idies have produced
equally inconsistent results when attempting to measure the
economic development impact of inter-jurisdictional property
tax differentials (see Helms, 1985 and Wasylenko, 1985).
Surveys of site location professionals often mention
the relative importance of property taxes in the location
decision. However, one cannot overlook the probability of
strategic behavior influencing the responses these
individuals give to such inquiries. Indeed, it has been
suggested by a former site location professional that
property tax reductions granted to companies affect the
salary of the site location professional more than the
actual site location decision.
McGuire (1986) summarized much of the relevant research
and noted that energy costs and government expenditures on
education 'and infrastructure consistently play a more
important role in local economic development than property
taxes. However, McGuire does conclude that while lowering
property taxes may not necessarily improve the success of
economic development efforts, it doesn't hurt. If the above
mentioned site location professionals are conducting
preliminary reviews of potential sites, they may use
property tax rates as an initial criterion to narrow the
field of potential sites. Given Denton's higher property
tax rates compared to other tax jurisdictions in the region,
lowering the property tax rate could improve the city's
chances of receiving an initial site location inquiry.
5._The_Effect of a Tax Base Shift
Perhaps the most important question to be answered in
the evaluation of a partial shift from property taxes to
sales taxes is its impact on the stability of the City's tax
base. Table 1 and Figures 1 and 2 record recent trends in
property values and taxable retail sales for the city of
Denton. These trends show that property values rose sharply
during the early eighties but have declined steadily since
1989. Total retail sales in Denton demonstrated a much more
J
~L
wig di
9
stable pattern of change during the same time period (see
Figure 3). After posting small declines during the depth of
the Texas recession in 1987 and 1988, total taxable sales
have grown at a steady pace that is slightly faster than the
growth of the economy as a whole. The tendency for sales to
move with the econony suggests that retail sales provide a
more stable tax base than property taxes. This is true in
part because retail sales are less likely to be influenced
by short-term speculative influences and national tax
policies compared to property-value-based taxes.
A shift in the relative mix of property and sales taxes
may improve Denton's long-term financial performance and,
thereby, lower borrowing costs for public capital projects.
The ability to maintain and improve local infrastructure and
city services is critical for local economic development.
Two other factors should also boost the yield from the
sales tax over the next decade. First, population growth
will continue along the I-35E corridor as further out-
migration from Dallas and its close-in suburbs continues.
Second, in the unending search for additional revenues, the
State legislature will probably broaden the sales tax base
considerably in future sessions,
I
I
6. Summery
The following conclusions can be drawn from our
literature review and analysis of the impact of increasing
W
P
4
10
Denton's sales tax rate by 1/2 percent and designating the
additional revenue for property tax reductions:
* The sales tax is somewhat regressive but probably no
more so than the combined inherent and administrative
regressivity of the property tax.
* At 1992 sales levels, we estimate that the 1/2
percent increase in sales tax rate will cost the
average Denton household $45 per year.
* An increase in the local sales tax rate of 1/2
percent will affect the buy location decisions of only
those consumers who live approximately equidistant to
Denton and other major shopping areas. The potential
short-term decline in retail sales would be no more
than 1/2 percent, or $1,9 million.
* There is no guarantee that lowering the property tax
rate will improve Denton's ability to attract and
retain businesses. However, it will narrow the tax
rate differential between Denton and neighboring
jurisdictions and possibly support economic development
marketing efforts.
* Retail sales appear to offer a more stable long-run
tax base than property taxes while allowing for
increased economic efficiency and improved city
financing. This in turn can promote the maintenance
and expansion of local infrastructure and city services
that are critical to an area's economic growth.
a
11
TABLE 1 40erda No
Property Values and Taxable ReaaQil~i~sa e
city of Denton, Selected (000's
Year Property % Taxable %
- Qw _ Sales Z=
1984 $ 1,1541036 - $ 303,064 -
1985 $ 1,4431543 25.0 $ 349,499 15.3
1986 $ 1,820,463 26.1 $ 353,427 1.1
1987 $ 2,050,295 12.6 $ 3350930
- 5.0
1988 $ 2,138,361 4.3 $ 3280934
- 2.1
1989 $ 2,1390002 0.3 $ 3381370 2.9
1990 $ 200360603 - 4.8 $ 3460972 2.5
1991 $ 1,951,304 - 4.2 $ 358,657 3.4
1992 $ 1,891,722 - 3.1 $ 3830652 7.0
Sources: City of Denton, Texas State comptroller
12
FIGURE 1
r.
DENTON PROP ENorY--VALUES
(millions
$2500
$2000 -
$1500 -
$1000-
$500-
i
i
I
$0
1984 1985 1986 1987 1988 1989 1990 1991 1992
Source: City of Denton
13
FIGURE 2
DENTON TAXABLE RETAIL SALES
(millions
$400
$300
$200
I
$100
I
$0~
1984 1985 1986 1987 1988 1989 1990 1991 1992
Source: Texas State Comptroller
la
FIGUR~ A^.QaiJO
g~d211em~ -...r-, YEAR TO YEAR PEftENTAGS CHANGE
30 Percentage Change
20
I
10
0
-10
-20
-30
1985 1987 1988 1989 1990 1991 1992
Property Values + Taxable Retail Sales
Source: Center for Economic Development
Y
a~c;1,I3'rem 1 s
References
Aaron, Henry J., w
Institute, Washington nn,,3D.Cthg Property Taxi The Brookings
1475
Braid, Ralph, "The Spatial Incidence of Local Retail
Taxation, Is Quarterly JoL,~nal of
November 1987, pp. 881-892 Vol. 102, No. 4,
NewCarlFirton,msDeAnnnis W., "The
Econometric Location
Employment choices of
Model o with and
Discreet and Continuous
Endogenous Variables,' Th ~~eview of Economics a d
$tatiaricA, Vol. 650 No. 31 August 1983 -'rn
1 pp. 440-449.
Chun, Dong Hoon and Peter Linnemann, "An Empirical Analysis
of the Determinants of Intrajurisdictional Property Tax
. Payment , January 1985, ou a ~f Urban £conomic , Vol. 17,
Y pp. 90-102.
Fischer, Ronald, "Local Sales Taxes: Tax Rate Differentials,
Sales Loss, and Revenue Estimation," publ_ is Finanouar jYf Vol. 8, No, 2, April 1980, pp. 171-18S.-
Fox, William, "Tax Structure and the Location of Economic
Activity Along State BordersNational Tax Journal
39, No. 4, December 1986, pp. 387-407, r Vol.
Helms, L. Jay, "The Effect of State and Local Taxes on
Economic Growth: A Time Series-Cross Section A"
Review of ~~*^mics and srlf<a,.+.... pproach,
1985, pp, 574-592. + Vol. 67, No, 40 November
McGuiro, Therese J., "Interstate Tax Differentials, Tax
Competition and Tax Policy," National Tax Jo
No. 3, September 1986, pp. 367-373.Vol. 19,
Mieszkowski, Peter, "The Property Tax. An Excise Tax or a
Profits Tax?," ,LQiicnal of Public r~~ +
April 1972, pp. 73-96. , Vol. i, No. 1,
Mikesell, John and Kurt Zorn, "Impact of the Sales Tax Rate
on Its Dace: Evidence From a Small Town," public Finance
2"X rl , Vol. 14, No, 30 September 198G, pp. 329-338.
Paglin, Morton and Michael Fogarty, "Equity and The Property
Tax: A New Conceptual Focus,' National Tax oar, Vol, 25,
No. 4, December 1972, pp. 557-s65,
Papke, James and Leslie Papke, ',Measuring Differential
State-Local Tax Liabilities and Their Implications for
Business and Investment Location," National Tax J
Vol. 39, No. 3, September 1986, pp. 357-366.
AAgoiddaNo 16
Papke, Leslie, °Subnational Taxatior5'0~rii '
Estimates of Tax Price Elasticities,DGiQtatiolli~ 4a*oboiuity:
Vol. 40, No. 2, June 1987, pp. 191-203.
Walsh, Michael and Jonathon D. Jones, "More Evidence on the
'Border Tax' Effect: The Case of West Virginia, 1979-1984,01
National Tax1 701 Vol. 41, No. 2, pp. 261-268.
EffWasYctlenofko,BuMischineael and
Climate r on e States' Employment i5rowth McGuirep "Jobs and Taxes: The
Rates, Is National Taxx Joi urnaZ, Vol, 38, No. 4, December 1985,
pp. 497-511.
Wheaton, William, "The Incidence of Inter-Jurisdictional
Differences in Commercial Property Taxes,"
N~tiTax
Journal, Vol. 370 No. 4, December 1984, pr, 515-527.
i
17
Other Readings AgC~dal~0
Aaron, Henry and Joseph Pechman ed., How Taxes affaenL
21lQMic B__ehavior, The Brookings Institute, Washington,
D.C., 1981.
DeTray, Dennis, and Judith Fernandez, "Distributional
Impacts of the Property Tax Revolt,' National Tax Jc~rnal,
Vol. 39, No. 44 December 1988, pp. 435-450,
Mikeseil, John, "Central cities and Sales Tax Rate
Differentials= The Border city Problem," National Tax
Journal, Vol. 23, No. 21 June 19700 pp. 206-213.
Mikesell, John, "Sales Taxation and the Border County
Problem," burt@r-v Review o! Economics and Business, Vol.
11, No. 1, Spring 1971, ply. 23-29,
Parai, Amar and John Beck, "The Incidence of Classified
Property Taxes in a Three Sector Model with an Imperfectly
Mobile Population," Journal of Urban ~onoQ
1, January 1989, pp. ?7-92. Vol. 24, No.
Rock, Steven, 'tThe Impact of Deductibility on the Incidence
of a sleneral Sales Tax,11 National Tax To~rnal, Vol. 37, No.
1, March 1984, pp. 105-112.
Sjoquist, David L., "A Median Voter Analysis of Variations
in the Use of Property Taxes Among Local Governments,"
Public Choice, Vol. 36, No. 2, 1981, pp. 273-285.
CITY.-
- =-CQUNCI
~300400C~0
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N
Cfryol DENTON, rEXAS MUNICIPAL BUILDING / DENTON, TEXAS 76201 / TELEPHONE 017) $48.8307
ONice of the City Merreper
October 15, 1993
Honorable Mayor and Members of the City Council,
It is with pleasure that we present to you a copy of the Citizens'
Sales Tax Advisory Conutittee's recommendation on an additional
sales tax to reduce the property tax. The report attached
represents many hours of hard work performed by each committee
member.
The committee that you appointed, other than myself, was comprised
of fourteen intelligent, independent thinking citizens that
represent a cross-section of the Denton community. I commend you
on your selection of such an outstanding group of citizens,
I would also like to thank each committee member for the amount of
time and study that this group volunteered to develop this report.
Each committee member dedicated many hours and conducted
independent research to evaluate this issue from many angles. The
group also is to be commended for having open minds as many changed
their views on this issue after studying and researching on his/her
own, Finally, I would like to thank the City Council for the
opportunity to be a part of such a productive group.
After many hours of deliberation and discussion, the Committee
recommends the passage of an additional half cent sales tax tho
proceeds of must be used to reduce the property tax and urges the
City Council to call an election on this proposition.
With Denton's property tax base declining over the past five years,
tike City of Denton has had to raise the tax rate to the effective
tax rate merely to keep the same amount of revenue to provide basic
services. Over this same time period, sales tax revenues have
increased each year. The Committee feels that this shift in
funding city services will provide long-term financial stability
and needed property tax relief to both residential and commercial
property owners.
Citizens' Sales Tax Advisory Committee
Letter to the City Council
Page 2
Please accept the Citizens, Sales Tax Advisory Committee's report
and review the Information that we have studied, the
yousth etndisthe Denton voters will We are sur
e that
also arrive at the same come that
tetiative is n win/win situation for
lusion
Denton's future,
ini communit
Y and
Sincerely,
[ Tom Harpool 1
Chairperson
Citizens' Sales Tax Advisory Committee
i
a
CITY COUNCIL REPORT
TOs Mayor and Members of the City Council
FROM: Citizens' Sales Tax Advisory Committee
DATE: October 15, 1993
SUBJECT: REPORT FROM CITIZENS' SALES TAX ADVISORY COMMITTEE ON ONE
RALF CENT INCREASE IN SALES TAX TO REDUCE PROPERTY TAX
Introduction
At the end of the last regular legislative session, the Governor
signed RB384 into lay.' allowing cities under 67,000 in population
size and not included within the boundaries of a transit authority
to adopt an additional sales and use tax to reduce the property tax
with the positive vote of the citizens, Tha City Council worked on
this issue for the last two legislative sessions in an attempt to
allow Denton citizens to have the opportunity to vote on this
option. Approximately 189 Texas cities and 112 counties have held
successful sales tax elections to reduce property taxes.
Citizens' Sales Tax Committee Process
The Citizens' Sales Tax Advisory Committee, comprised of 15 members
appointed by the City Council, met five times. Each City Council
Member nominated two members with the chairperson nominated from
the entire Council. The Committee's charge from the City Council
was as follows
"to study and make recommendations to the City Council,
regarding a possible additional sales tax to reduce the
property tax. The Special Citizens Advisory Committee shall
utilize the findings of outside experts to analyze the
economic impact of such a tax on the various economic groups
of Denton citizens. The Committee shall submit its report to
the Council no later than October 15, 1993 "
Resolution f93-042
The Committee began its first meeting with an overview of a
proposed half cent additional sales tax to reduce the property tax.
After receiving this overview, the Committee brainstormed to
determine what information it would need in order for each member
to make a decision on the issue, A list of questions and
information to be gathered was developed. This became a framework
for presentations at the following meetings. The Committee and
City staff determined which pieces of information could be gathered
by City staff and what information could best be obtained from
outside resources. A list of the Committee's questions and
information needs are attached.
I
CITIZENS' SALES TAX ADVISORY COMMITTEE
LIST OF INFORMATION NEEDED
TENTATIVE TIME LINE FOR MEETINGS
September 8
Summary of where City revenues come from
List of all cities adopted
Number of dorm students
List of incentives for new industries
Effect of 1/2 cont on incentives
Breakdown of assessed value
- residential versus commercial
September I5
List of cities that passed and failed measure
- analysis of why it passed or failed
Effect of property tax reduction on Industries
Effect on capital improvements in cities which pass measure
Effect of outlet mall on sales tax revenue
Influx/Outflux of commuter, etc.
Mesquite Chamber of Commerce/Retailer Preaentation
September 22
Discussion of Mesquite's Experience
Analysis of why it passed
Effects on retailers where tax passed
Dr. Bernard Weinstein, Director
Center for Economic Development and Research, UNT
September 29
11 What are the economic effects of sales in Denton with an
increase in sales tax?
Primary, secondary, tertiary market of Denton
Effect on the shopper
Leakage of sales out of Denton
- current and effect of 1/2 cent
2. Who pays more, who pays less, and by how much?
Average family/homeowner/renter pays in property
tax/sales tax
Effect of 1/2 cent sales tax increase and property tax
reduction on taxpayer
- homeowner, renter, student, commuter, etc.
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~ Recap of September 8 Meeting
Discussion of Questions
At the second Citizens' Sales Tax Committee meeting the Committee
reviewed a surmiiary of City revenue sources, including all taxes,
fines, fees, and utility and other transfers. A fisting of all
cities that had an additional sales tax to reduce property tax
currently in effect was also provided. The number of students in
both universities' dormitories was reviewed. The Committee also
looked at the City's economic development incentives and the affect
of an additional sales tax with a property tax reduction. Assessed
values were also highlighted.
Recap of September 15 Meetinn
Discussion of Questions
At the third Committee meeting, the group reviewed housing
characteristics from 1990 U.S. Census Bureau information. Commuter
data was also discussed. Several of the large employers were
polled. The results showed that UNT, TWU, City of Denton and
Denton County had between 27-485 commuters. Peterbiit had a
commuter rate of 79%, drawing some of its labor pool from as far
away as Oklahoma.
City staff estimated the factors contributing to the growth in the
sales tax this year. The effect of the estimated property tax
reduction was calculated for businesses. The 1993-94 utility rate
structure was also presented.
A brief summary of information from several cities that passed a
half cent sales tax and the effect of capital improvements in
cities which passed the measure was also presented. Most cities
cited that an eroding property tax base with increasing sales tax
revenue was a major reason for the shift in funding. Information
gathered from those cities also indicated that a unanimous City
Council decision and Chamber of Commerce support were important
elements to a successful election. Factors that caused cities to
put the measure to the voters included a large non-resident
employment base, regional retail activity, and a university or
other large tax exempt entities. An education program to inform
the voters was also an important factor.
The City of Bryan received data from a financial expert which
showed that the effect of paying an additional half cent sales tax
on a person with an annual income of $25,000 to be less than $20.
The City of College Station estimated that a household with an
;8,500 annual income would pay an additional ;.35/week or $18/year
and that students would pay an additional ;.50/week or ;26/year.
These figures assume that there is no offsetting reduction in
property taxes.
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The Committee reviewed a list of cities that have passed an
additional sales tax and chose cities to contact to learn more
about the effect of this measure on their community.
The Committee also reviewed the three possible courses of action if
sales tax revenue fell short of estimates which include mid-year
spending freezes, accessing a portion of the fund balance, and
utilizing the City Manager's contingency account.
Re
cn of September 22 Meeting
Presentation from city of Mesquite
Interviews with Other Communities
At the fourth Committee meeting, there was a brief presentation of
the change in taxable values from 1992 to 1993 according to the
various types of property. This showed where the shift in values
occurred. Handouts provided more detail on the philosophy of the
Recreation Fund as well as the total revenue for this fund.
Results from two Golden Triangle Mall shopper surveys indicating
where shoppers reside were also included. The results indicate
that a large number of shoppers, from 30-461, come from outside
Denton to shop. Thus, a sales tax increase would be spread across
non-resident shoppers as well as Denton citizens.
Committee members shared the results of the telephone calls made to
other communities with an additional sales tax to reduce the
property tax. A summary of the results of these contacts made to
other businesses, community organizations, and City personnel are
included in the backup. Most communities expressed that this
measure was a positive Initiative for the city.
Two representatives from the City
community's experience with the Committee. Mike Anderson, current
Mesquite City Council Member and commercial realtor, and Len
Gibbons, Executive Director of the Chamber of Commerce and former
Mayor, gave testimony as to the positive result of the sales tax
election in Mesquite. The City of Mesquite had worked at the State
level to change the law. The election was held in August 1991, and
was passed by 801 of the voters,
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CITY OF MESQUITE EXPERIENCE
HALF CENT SALES TAX TO REDUCE PROPERTY TAX
Speakers: Mike Anderson, City Council Member
Commercial Real Estate
Len Gibbons, Executive Director
Mesquite Chamber of Commerce
In 1985, Mesquite had one of the highest property tax rates in the
Metroplex. The City of Mesquite held a sales tax election in 1991
to reduce property taxes. With the half cent sales tax to reduce
property taxes, the rate dropped 10 cents. Now, Mesquite has the
second lowest property tax rate. The City wanted to be more
competitive from an economic development standpoint.
Federal and state mandates had increased each year and therefore,
the property tax rate had continued to go up to cover these
additional costs. The City was looking for ways to be competitive
in the Metroplex but still meet the citizens' need for services.
Town East Mall is a regional shopping center with 654 of shoppers
residing outside Mesquite and 381 living outside Dallas County. A
sales tax distributed the cost of city services over a larger
number of persons since sales tax is paid by non-resident shoppers.
Mesquite had experienced a mistrust of government. To assure
citizens the additional sales tax would be used to reduce property
taxes, the city promised to lower property taxes by 204. At the
same time, the exemption for senior citizens was raised to $45,000.
The measure brought some unity within the community and restored
some trust in city government. The Chamber of Commerce was in full
support of the measure. The election brought the second largest
voter turnout for a referendum and 804 of the voters wore in favor
of this initiative.
The Council appointed a citizen committee to run the campaign. The
committee utilized a speaker's bureau as well as sending a flyer to
citizens educating them about the election. Marketing consisted
of town hall meetings, speakers bureau to service clubs, letters to
the editor campaign, and editorials. A taxpayer watchdog group was
skeptical at first but caused no major opposition.
The property tax rate was reduced 10 cents with the rest of the
reduction used to pay for the over 65 exemption cost (1 and 1/2
cents). This year property tax rate was raised four cents but with
that increase the City will build roads and a performing arts
center.
Since the sales tax election in August 1991, retail has been
booming with sales tax revenues Increasing. Seven new restaurants
came to Mesquite last year. A Pep Boys opened and a new Wal-Mart
opened creating 365 new jobs in a 127,000 square foot facility.
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Recap of September 29 Meeting
Dr. Bernard Weinstein'. Analysis
At the fifth Committee meeting, Dr, Bernard Weinstein presented "An
Analysis of the Impact of a Sales Tax Increase for Property Tax
Relief in the City of Denton," which is attached in full. The
report prepared by Dr. Weinstein and Terry Clower from the Center
for Economic Development and Research at the University of North
Texas reviews the property tax and sales tax.
The report stated that while the sales tax is generally thought to
be more regressive than the property tax this may be offset by the
exemption of food, medicine, services, and other essential items
from sales tax. The report also argues that the property tax is
more regressive in markets where the demand for rental property is
high, therefore, the tax burden is shifted to renters. Denton has
a strong rental market because of the two universities, The report
concedes that Denton'e strong rental market will mean that property
tax reductions will not be immediately passed on to renters.
However, Dr. Weinstein believed that in the long term, a property
tax reduction would retard the rate of rental increases.
The analysis cited an advantage of the sales tax to shift some of
the cost of providing city services to non-residents and dormitory
students that pay no direct or indirect property taxes. Denton's
two universities, other employers, Exposition Mills Factory Stores,
Golden Triangle Mall, and other retailers draw many non-residents
into Denton, This constitutes a large population of non-residents
that use city streets, parks, and police and fire protection
without paying property taxes. A shift of more of this cost to be
supported with sales tax revenues would allow the users to pay for
the services.
Dr. Weinstein also noted that while property values may begin to
increase slightly, that there will be no large increases in
property values as in the early 1980's at any point in the
foreseeable future. However, he feels sales tax revenue will
continue to rise each year.
The report also highlighted the effect of an increased sales tax on
retail sales and the impact of property tax rates on economic
development. The study found that such a slight increase in a
sales tax would be unlikely to shift any retail sales patterns away
from Denton. Quality, selection, and convenience are much more
important to consumers than a slight difference in sales tax. The
report also notes that many retailers may absorb the increase and
not pass it on to their customers. This would be reasonable since
the retailer would be experiencing a decrease in property taxes,
Although property taxes are not the number one factor in site
location, it is generally held that a reduction in the property tax
rate would be beneficial to businesses looking to relocate. By
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lowering the property tax rate, Denton's competitiveness with
nearby cities would improve.
Finally, the study discusses the effect of a tax base shift from
the property tax to sales tax. Trends show that Denton's property
values have declined while retail sales have increased over the
same period. Sales tax revenues have risen slightly faster than
the economy. The report states that by shifting the mix of
property and sales taxes Denton may Improve its long term financial
performance.
Dr. Weinstein's report makes several conclusions, includingi
o The sales tax is somewhat regressive but probably no more
so that the combined inherent and administrative
regressivity of the property tax.
o At 1992 sales levels, we estimate that the 1/2 percent
Increase in sales tax rate will cost the average Denton
household $45 per year (using a very conservative
estimate of only 20% of total retail sales from non-
residents),
o An increase in the local sales tax rate of 1/2 percent
will probably affect the buy location decisions of only
those consumers who live approximately equidistant to
Denton and other major shopping areas.
0 There is no guarantee that lowering the property tax rate
will improve Denton's ability to attract and retain
businesses. However, it will narrow the tax rate
differential between Denton and neighboring jurisdictions
and possibly support economic development marketing
efforts.
o Retail sales appear to offer a more stable long-run tax
base than property taxes while allowing for 1.:;. =sed
economic efficiency and Improved city financing. This in
turn can promote the maintenance and expansion of local
infrastructure and city services that are critical to an
area's economic growth.
(Analysis of the Impact of a Sales Tax Increase for Property
Tax Relief In the City of Denton, p. 10)
7
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COMMITTEE RECOMMENDATION
After a great deal of fact-finding, research, and discussion, the
Citizens' Sales Tax Advisory Committee overwhelmingly supported an
additional sales tax to reduce the property tax.
Several member of the Committee expressed that their initial pre-
disposition was to be against an increased sales tax to reduce the
property tax. However, after studying the issue and learning what
other communities with the measure had experienced, they changed
their minds.
The Committee cited the main reasons to favor the sales tax to
reduce the property tax includes
o Such a small increase in sales tax will not cause a
measurable reduction in Denton retail sales.
o A large amount of non-residents who use Denton services
commute to work or go to school in Denton. A shift to
sales tax would shift some of the cost providing of these
services to the users and relieve Denton property
taxpayers.
o Businesses and residential taxpayers would both benefit
from the decrease in property taxes,
o There would be some degree of captured tax dollars for
services provided to Denton's large amount of tax exempt
entities without additional costs being borne by the
residential taxpayer.
o Although it may not be the most important factor in
attracting new industry to Denton, a decrease in the
property tax rate cannot hurt Denton from a competitive
economic development standpoint. Coupled with the City
Council's other economic development policies, it places
Denton with an edge on the competition from neighboring
communities.
o As Dr. Weinstein's report cites, sales tax revenue
provides a more stable, long term revenue source in the
face of decreasing property values. The sales tax base
is expected to grow more rapidly than the property tax
base. A shift in the structure of the City's financing
would provide a growing, rather than declining revenue
base for future needs of Denton citizens.
Several Committee members felt that their discussions with people
in communities with the sales tax to reduce property taxes helped
in their decision-making. One Committee member called the sales
tax to reduce property tax a win/win proposition for businesses and
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homeowners without adversely affect retail sales. Another member
took an informal survey at his business and found that customers'
Purchasing decisions would not be affected by an additional half
cent sales tax. One Committee member felt that the proposal was a
reasonable tradeoff chat was good for the city and complemented the
Vision for Denton project. Another Committee uomber said that
Denton needed a more stable, more dynamic tax base than relying so
heavily on the declining property tax base.
Although there was overwhelming support of the sales tax to reduce
the property tax, the Committee discussed three concerns. The
first concern centered on the affect of the sales tax on low income
citizens in Denton. Several of the Committee members were
' concerned that the sales tax is regressive and therefore adversely
affects low income persons most. The property tax reduction would
not be passed on to renters, many of which are the lowest income
citizens. Although rental prices would likely increase at a slower
rate, that group would not be likely to see a direct benefit with
a property tax reduction.
The second concern stated by several of the members was related to
the City's dependence on utility return on investment and
administrative transfers to support general fund operations.
Although the Committee realized that private utilities pay a
franchise fee to local governments somewhat higher than Denton's
transfers, these are still taxes on necessary items which low
income consumers have no choice but pay. Some on the Committee
felt that these utility payments were far more regressive than
either the property or sales tax. One possible way to remedy this
would be for the City Council to liberalize the very low cost
lifeline electric rate (RI). This could alleviate some of the
burden on the low income, modest electric user. However, several
members expressed a concern that any reduction in utility rats to
help low income citizens should not be given at the expense of the
commercial electric customers.
Finally, the Committee challenged the City to hold costs down
instead of raising taxes. With a reduction in property taxes, the
Committee felt it was incumbent upon both the City Council and
Denton citizens to keep the tax rate from climbing back to the
current rate over time. Although the Committee understands that
the tax rate will not remain constant, it challenges the City
Council to keep the rate as low as possible while continuing to
provide vital city services.
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Statement
William
On the ProposedProperty/sales Tax Tradeoff
Local Government and Taxation
At the outset, I wish to express my general position on
government and taxation. Like moat Americans, I
minimalist government. While definitions of "miprefer a
nimalist
atvl astn two cr tvAr eria must lbeeincludedlinany political discussion oof sits
meaning.
First, minimalist government must provide the essential
services that U citizens need but cannot provide independently,
e.g., public safety (including traffic control), fire prevention
and response, streets and roads, public health, waste disposal,
parks and recreation. Second, minimalist government reduces
intrusions into personal life and collects only those taxes
necessary to provide services needed by the community.
Despite political differences, most people would agree that
a CLjXLq_4 government is not in th4 public interest. The general
welfare is promoted by a functioning government--one that to
effective, efficient, accountable, and just,
Essential to a functional government is a tax structure that
is reliable and predictable, dynamic, and equitable2. State and
federal shifting of public responsibilities to local govpin+ents
through unfunded mandates has exacerbated taxing "burdens.'
I
In this context, effective means allocating resources to
proper ends. Efficient means maximizing the effects of
resource allocation. Accountable means constant
assessment of program effects relative to goals. Justice
means fairness.
i
Dynamic mains expandable relative to expanding needs.
Equitable taxation has two dimensions: horizontal and
vertical. Horizontal equity is achieved when people with
compA -Able incomes are taxed at about the same rate.
Vertical equity is the result of a tax structure that is
based on the ability to pay.
3
Use of the term "t~_])urdgn" is biased and inappropriate
in a functioning government. Taxes are part of the cost
of a civilized life (civility, freedom, and order, as
well as legal, economic and social justice).
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The Proposed Sales/Property Tax Tradeoff
My original opposition to the proposed sales tax/property tax
tradeoff was based on what I considered to be its inherent
regressivity. However, after careful study and deliberation, I now
favor the proposal. I still believe that the proposed change would
be regressive in the short run, shifting taxation from property
owners to renters4. The long run effect, however, would tend to
be more equitable. The reasons for my change of position are
outlined briefly as follows.
The City of Denton has three principal sources of revenue: the
ad valorem property tax, the general sales tax, and revenue
transferred from municipally-owned utilities (electricity,
water, waste disposal). Each source contributes about one-
third of the total revenue.
There is little difficulty in understanding the mechanics of
property and sales taxes. More ambiguous, however, are the
tax implications of supplementing the operating budget with
utility transfers. Differer,L perspectives can result from the
use of disparate professional vocabularies,
From an accountant's perspective, there are two types of
transfers: 1) reimbursements for the City's share of the
expenses of operating the utility, and 2) return on the city's
investment (limited to six percent of the depreciated capital
investment). From the accountant's position, these transfers
would be viewed as routine bookkeeping transactions reflecting
expenses and the return on investment.
These proponents further argue that citizens would be paying
equal or higher utility rates for the same services if they
were provided by a privately-held utility. Thus in this
argument, by using transfers from a public utility to
partially fund city government, citizens benefit through
lower tax levies.
By contrast, using the language of economics, any surplus
revenue supplementing the operating budget is a sales tax.
Furthermore, this sales is perniciously regressive because it
is levied on fundamental necessities of life--electricity and
water. Its regressivity is clearly manifest in the "base
rate", a charge that is made independent of use. Further
4
There are forces that mitigate this effect. But
generally, with an average per household effect of about
$45,00, lower incomes will be hit harder as a percentage
of gross and net income.
3
rceovmplinuecaitisngxthe
empt issue
from regulatory hrevi w, of The b nominal utility
percent limit on depreciated investment is not a real
constraint because the city can simply increase rates based
upon increased "expenses." By charging a lower or zero base,
the city could achieve greater equity. Another way to achieve
greater equity would be to accelerate the progressivity of the
use rates.
Summary and Conclusion
Thus, critical to any discussion of a tax tradeoff is the
city's traditional use of utility transfers to make up shortfalls
in the budget. This practice is even more regressive than the
proposed increase in the sales tax.
This accounting system is not the result of an intentional
plot to deceive taxpayers. Rath9r, the system was devised by a
group of public-spirited citizens committed to meeting the needs
of a growing city. It is obvious that a system that funds as much
as one-third of the city's operating budget cannot be radically
dismantled.
I am suggesting, however, that the City Council and Staff
demonstrate an increased sensitivity to economic inequality when
utility rates are used to fund budget shortfalls, I am suggesting
as well that as part of the tax tradeoff, the Council consider
further reducing the base utility rates for those citizens in our
community with lower incomes.
In conclusion, I support the sales tax/property tax tradeoff
r because I believe it will provide a greater degree of stability and
dynamism to the tax structure. And, in the longer run, if the
tradeoff reduces the use of invisible taxation called utility
transfers, the tax system of the City of Denton will be more
equitable.
i
Ton Harpool, the Chairman of this committee, was a member
of that group.
Y
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TO: Members of the City Council
FROM: Dorothy Damico, Citizens' Sales Tax Advisory Committee
Member
I have approached my task as a member of the Sales Tax Advisory
Committee as being twofold: 1) to study the sales tax proposal,
and 2) to recommend to the City Council concerning whether or not
the citizens should vote on the proposal. Adhering to that
approach, I determined to study all sides of the issue, expecting
that all sides will now be presented to City Council and perhaps
ultimately to the voters. From my unenviable position of being the
sole, dissenting vote from the Committee's recommendation, I am
presenting the rationale that brought me to my dissenting vote:
Inasmuch as the half-cent sales tax will generate revenue
equal to the reduction in revenue from the decrease in
property tax, this plan is a tax shift rather than either an
overall increase or overall decrease. The question, so far as
my vote was concerned, is: from whcm to whom will the taxes
be shifted?
As I understand the information given to me on this part of
the issue, business and industrial property owners will see a
property tax reduction. Owners of rental property, also, will
see a reduction in property taxes (but will not be required to
pass the reduction on to their renters in the form of lower
rents.) For these, two groups, the proposal will bo a
benefit.
Private homeowners will have their property taxes reduced by
an amount about equal to the added sales tax, leaving them
about even.
Non-residents who shop in Denton (university students and
shoppers at the malls, primarily) will assume a part of the
cost of providing for them the city services that they use
while they are in the city, which is equitable.
Renters, however, who pay a share of the property tax in their
rent payments, will pay the added sales tax but will not
likely see their rents reduced. They will pay more in taxes.
According to the information provided to us, 45% of the
household units in Denton have incomes of less than $20,000.
Many of these are students, of course, but certainly not the
majority of them because there aren't that many students.
Theso are poor, single-parent families with heads of
households who are laid-off or employed part time, or retired
low income elderly who are in retirement facilities or
otherwise do not own their own homes. These households will
pay increased taxes while the rest of us do not.
a . ,M
APPENDIXES
Copy of State Law
Resolution 43-042
Citizens' Sales Tax Advisory Committee Members
List of Questions Asked by Committee Members
Agendas, Backup Information$ and Handouts from each Committee
Meeting
List of Cities that Passed Additional Sales Tax to Reduce the
Property Tax
List of Counties that Passed Additional Sales Tax to Reduce the
Property Tax
Information from Cities Contacted by Committee Members
City of Mesquite Materials
Dr. Bernard Weinstein and Terry Clover's Report
10
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MUNICIPAL SALES k LSE TAX ACT
Ch. alt $ 32I.101
5;:s 1969, 61st Leg, Ind CS, pp 94, 974 ch
I art I if 39, J J , leis 1974, 6Nh Leg, p. IJOt..h. 6'. J, an. I.
i:'s 43',,, 65th Leg., ;nd CS., p, 3, ch. 2, an. Acts 1991, 67th Leg„ p. 1770, ch. 389, ii 7,
Acu 1979. 66th log. p 93 ch 59, t'ernon's knn.Ci%St. aa, 1066c i 6 , 4(C). 6iA).
Cross References
.aeaal pupose ta~tng ruthonties, sales and use t
aces, application of this section, see 4 )::,109,
§ 321.004, References to Sales or Use Tax
A reference to a sales tax or a use tax imposed or authorized by this chapter
a a reference to both the taxes imposed under Sections 321.101(a) and (b)
unless otherwise provided,
added by Acts 1987, 70th Leg, ch. 191, 1 1, off, Sept 1, 1987.
Rnisor's Note
The preceding section was added as a drafting cu,nenience.
(Sections 311.005 to 321.100 reserved for expansion)
SUBCHAPTER B. IMPOSITION OF SALES AND
L'SE TAXES By' MUNICIPALITIES
$ 321,101, Tax Authorized
(a) A municipality may adopt or repeal a sales and use tax authorized by
this chapter, other than the additional municipal sales and use tax, at an
election in which a majority of the qualified voters of the municipality
approve the adoption or repeal of the tax.
(b) A municipality that Is not disqualified may, by majority vote of the
qualified voters of the municipality voting at an election held for that
Purpose, adept an additional sales and use tax for the benefit of the munici.
Pality in accordance with this chapter. A municipality is disqualified from
adopting the additional sales and use tax if the municipality:
(1) is Included within the boundaries of a rapid transit authority created
under Chapter 141, Acts of the 63rd Legislature, Regular Session, 1973
(Article 1118x, Vernon's Texas Civil Statutes);
(2) is included within the boundaries of a regional transportation author.
ity created under Chapter 683, Acts of the 66th Legislature, Regular Session,
1979 (Article Hilly, Vernon's Texas Civil Statures), by a principal city
having a population of lass than 800,000;
(3) Is wholly or partly located in a county that contains territory within
th
e boundaries of a regional transportation authority created under Chapter
683,
Vern onct'ssTof the 66th
Civil Staeges)tby a principal city having a( popullalllon ein
excess of 800,000, unless:
337
§ 321.101
LOCAL T,A]MTIO,~
(A) the city is a contiguous city; or retie !
(8) the municipality is not included ssithin the boundaries of the
authority and is located wholly or partly to a county in which fewer than
250 persons are residents of both the county and the authority according
to the most recent federal census; or
(C) the municipality is not and on January 1, 1991, was not included
Mthin the boundaries of the authority and the municipality had a
population in excess of 67,1x)0 as reported in the 1990 federal census; or
(4) imposes a tax authorized by Article 1118z, Revised Statutes.
(c) For the purposes of Subsection (b), "principal city" and "contiguous
city" have the meanings assigned by Chapter 683, Acts of the 66th Legislature.
Regular Session, 1979 (Article I I18y, %'ernori s Texas Civil Statutes).
(d) In any municipality in which an additional sales and use tax has been
imposed, in the same manner and by the same procedure the municipajil% ba
majority vote of the qualified voters of the municipality voting at an election
held for that purpose may reduce, increase, or abolish the additional sales and
use tax.
(e) An authority created under Chapter 141, Acts of the 63rd Legislature
Regular Session, 1973 (Article 1118x, Vernon's Texas Civil Statutes), or Chap
ter 683, Acts of the 66th Legislature, Regular Session, 1979 (Article IlI9y,
Vernon's Texas Civil Statutes), is prohibited from imposing the tax provided
for in those Acts if within the boundaries of the authority there is a muntcl
pality that has adopted the additional sales and use tax provided for in this
section.
(f) A municipality may not adopt or increase a sales and use tax or an
additional sales and use tax under this section if as a result of the adoption or
increase of the tax the combined rate of all sales and use taxes imposed by the
municipality and other political subdivisions of this state having ierriton in
the municipality would exceed two percent at any location in the municipal
ty.
Added by Acts 1987, 70th Leg„ ch. 191, § 1, eff. Sept, 2, 1987. Amended by Acts 194'
70th Leg., 2nd C.S., ch. 54, § 1, eff. Oct. 20, 1987; Acts 1989, 71st Leg, ch.
§ 14,14(a), eff. Au q. 28, 1989; Acts 1989, 71 s! Leg„ ch. 489, § 1, eff, Aug. 28, 1989 Acts
1991, 72nd Leg., ch. 184, § 2, eff, May 24, 1991; Acts 1991, 72nd Leg., ch. 223.1 t. rll
May 29, 1991.
HIstoNcal and Statutory Noted
The 1987 amendment added subsea if). or tax rate increase the combined rare I +
Section 6 of the 1987 amendatory act pro- safes and use taxed impaled at an* lu+i n
sides: the municifpaiity, county, or other pold~,+
"(a) An election held before the effectlye rate increase %outdteeceedttwo she +u r w
date of this Act to adopt a local sales and use percent
tax or to increase the rate of a local sales and (b) In this action, 'local sales and MY a+
use tax has no effect if the tax or tax rate Ipality, cou nty. or otherapoliticalee bdn w.r•-e
increase does not take effect before the eHea this state the taxable Items of which tilt
tise date of this Act and if as a result of the sax stantially the same as "able urn, -W
338
I
TR! AS IYA-3511A71VY CP3t"Clit 4ILY PA. &D AM1
0771BG0VFRN0R 1 trnspoltalion wlhorttY ruat•d undo chapsrr W. Acts nt fla
NUS41ri-Me 1 66th LpIQ tture, 11094ar Seeminn, 1171 Itrticle "'at' "t"m's
/ I Texas Civil Statwts+l, by a pflnelpal city ha•lna a population in
I AM A" 1 egau of 100,000. unroest -
I rrletlna to the authority of a aunirlpallty to adopt an Ndltlonal
S IAI the city is a contiguous ellry or
t tales and use tar.
6 161 the eanlclpality Is not tncluded Within the
1 Of IT n6A[ttro at roe Lr6)SUlvhr or Tie rTAx Of TrzAa,
7 boundsrtas of the authority and Is located wholly of partly In A
S fCCT[On 1. Sect ten lli.taltM}, to Codf, Is sae ndN 10 read a county in wbleh [wnr than 190 petaees ate reslGntf of both !N
S at lollawn
9 county and LM owthotlty ■ceordlna to the most eseent teMral
7 lb) A funl0l pal lly that to not dlslvall!!N nay. by •
10 eenauu or
a "Jorlty wte of the anallflN eotes$ of the wnlcipellty "tins at
11 01 the ounlctlality Is net and an ~orwary I,
a sn elecet..n bald for that purpose. adopt an aNIllonal sates and
I) 1191 109111. was set included within the boundaries of the
t0 oM to for the benelll of the sunlelpallty to accordance with this
U avlheel!/ pN--tM--wntelpeiltt••Ma--e-•papaNlNn•0n•ereen•e1
II chaplet, A twnltlpalfly to alpvallfled tree adeptlny the
11 NtaN-ee-espsrlN-wtM-ONS-f go tiel•eeire"11 or
17 factional sales and Wes tog It tile wnlelpslitry
Is 1e) loposea a tar wtborived by Article 1110, lo•lsod
11 (l) Is Included rlthlA IM boundaries at . to>Id
Is statatfs.
11 tranalt authority created under charpror lat, Acts of the Slid
If aE[f tOS 7. The lttporlun at this tptatet ten and the
IS teelslatsa, npvtar Session, 1111 lArtlele filar, Tart6ea'e Tr149 to crowded condition of the uLndare In lgtA ho0ees create an
If Ctrl{ 11tatutnl1
19 arrysncy and an lsperatiot public hece olty that the
aietl, a Aela of of $ t the e )l eonalltetienal role reeiviriM bills to be road on three +e•frel
17 Ill IS Included treated N t under nder r Chapter boundaries
is transportation authority en 11 days to tech 1wuN be suependfd, god this rule is hereby suspended,
19 Nth Legtrlature, rpwNf session, 1179 MOWS {illy, 1e1non'+
and that this Act take effect and be In feree from and alter its
It
Ia hue [full Stalutnl. by a ptlntlpl elk/ M•Inp ■ pepalatlon of
21 pauap, and it to w enacted.
11 Ian than ao0,000yue1•+R elk hoe a population of 100.000 er -
12 nor and .16 located Il~ore !Mn one count t
11 111 16 Mont 01 partly 1000ted Ih A county that '
16 oontalns territory within the bound+tlee of a re7lonat
)
rl
rlpaldpnt or the Spnatf SppaYpr or 1M louse
I certify lnat W.I. Nc. 713 wee pafaad by th• loaat, on 14tch
)0, 109). ►1 the follovlnv volel Tpae Ie). Pays 0, 1 plflrnt, not
voti"I and that the Rouse coneuued In swrats saand"nte to P1.1.
nh. 111 on Rat IN. 1993, by the ralloving ►alu Iua 117, lure 0.
T prtsem. not votlnq.
Olaf tlatk of the loves
t certify that ■.J. No. 311 vat peaed by the !sluts, with
aapn&ments, oo Play 11, 1001, by t7N following VCtat TNS 30, Mays -
lipcrptauy of the !mate
1Tntovrat
Date
tAYf l nOf
i
~ i
c
r
R
) w 1
1
1
1
1
§ 321.403 LOCAL MATIO\
This
3
Historical and Statutop. Notes
Prior Laws ictl 1 86, e9th Leg, )rd C.S., ch. 10, art
I.
lets 1957, 60th Leg. p. 62, ch. 36, $ 12
~ern~n s {nn Cat St. art 1066c, 2211, 21.
§ 321.404. Ballot Wording
(a) In an election to adopt the tax, the ballot shall be printed to provide for
voting for or against the applicable proposition; 'A one percen: sales and use
tax is adopted within the city" or "The adoption of an additional sales and use
tax within the city at the rate of of one percent to be used to reduce
the property tax rate" (one-eighth, one-fourth, three-eighths, or one-half to be
inserted as appropriate).
(b) In an election to repeal the tar, the ballot shall be printed to provide for
voting for or against the applicable proposition: "The local sales and use tax
within the city is abolished" or "The abolition of th- additional sales and use
tax within the city."
(c) In a municipality that does not impose a property tax, the ballot at an
election to adopt the additional municipal sales and use tax shall be printed to
provide for voting for or against the following proposition: "The adoppon of
an additional sales and use tax within the city at the rate of of one
percent" (one-eighth, one-fourth, three-eighths, or one-half to be inserted as
appropriate).
Added by Acts 1987, 70th Leg., ch. 191, § I, eff. Sept. 1 1987. Amended by Acts 1039.
71st Leg., ch. 2, § 14.14(b), eff. Aug. 28, 1989; Acts 1991, 72nd Leg., ch, 184, § 7, off
May 24, 1991.
Reviaor's Note
Subdivision 8 of Article 6.05 of the old Texas Election Code and current
Section 52.073, Election Code, provide that a proposition appear only ~ a
onetime
on a ballot with the voter having the capability of votin for or against
g test that
proposition. The wording of the ballot in the revised law conforms to that
voting procedure.
Hlstoti
sal and Statutory Nola
Section 24 of Acts 3987, 10th Leg., ch. 11 sion$ permitling an additional sales and u
provides: tax within the city of oneeighth onedounh.
'The exemptions provided by Subsection L. threetighths or one-half of one percent for
Section 2A, "I Sales and Use Tax Act ( 4ni• Dr*siom permitting an additional tae of one
cle 1066c, Vernon's Texas Chit Statutes), Sec, half of one percent.
Lion 26A, County Sales and Use Tat Act (Anicte For provisions of the 1991 amendaton m
2353e, Vernon's Texas Civil Statutes), and Sec• relating to the validity and effenitentu of he
tion 6(;)(6), Article II Its, Revlsed Statutes, as Imposition of a sates and use tax for a hmded
added by this Act toply to a tax eserl if the length of time by a municipality before he
election to adopt it tax is held before the effective date of the amendatoryact, see H,1
effective date of this Act (April 2, 19871." torical and Statutor) Votes follom rt
The 1969 amendment, to conform to Acts § 321.101.
1967, 70th Leg., ch. 11, § 1, added subsea (ct,
The 1991 amendment in the propositions set Prior Laws:
forth in substcs. (a) and (c) substituted provi. Acts 1967, 60th Leg„ p. 62, ch. 36,
362
i
MUNICIPAL SALES k USE TAX ACT § 321,501
Ch. 321
Historical and Statutory Notes
Prior Lear
%as 1967, 6oth Leg., p. 62. 4. 36
A'ernons Ann Lii Sr, art. 106ec5 ihBi.
(Sections 321 409 to 321.500 reserved for expansion)
Revisor's Note
(End of Subchapter)
Portions of Subsection G, Section 2, and Subsection F, Section 2A, of former
VACS. Article 1066c, are omitted from the res ision because the Election
Code applies to an election to adopt a local sales and use tax, No other iuu
prosiding for municipal elections is applicable to an election held under this
chapter,
Subsection F, Section 2, and Subsection E, Section 2A, of former A'.A C S,
Article 1066c, are urnitted because those prosisions have been replaced by
Chapter 4, Election Code.
SUBCHAPTER F, REVENUE DEPOSIT, DISTRIBUTION, AND USE
321.501, Trust Account
(a) The comptroller shall deposit the taxes collected by the comptroller
under this chapter with the state treasurer. The treasurer shall keep the
deposits in trust In the separate suspense account of the municipality from
.shich the taxes were collected.
(b) The comptroller and each employee of the comptroller who has any
duty or responsibility in connection with the collection, deposit, transfer,
transmittal, disbursement, safekeeping, accounting, or recording of the funds
that are acquired by the comptroller under this chapter shall enter into one or
more surety bonds in the amount of $100,000 payable to any and all munici-
palities from which the funds are collected. The comptroller may enter into a
blanket bond or bonds covering the comptroller and the comptroller's em.
ployees.
(c) The premiums for the bonds required by this section shall be paid when
due from the state's share of money collected and held by the comptroller
under this chapter before its deposit in the general revenue fund.
Added by Acts 1987, 70th Leg., ch. 191, 1 I, elf, Sept. 1, 1987.
Historical and Statutory Notes
Mor Lary
tcts 1967, 60th Le``, p. e2, ch. 36.
ssrnon s Ann Clv St. art. 1066c, 1 7.
Cross References
9.1d premium deduction from state's share, we 1 321,503.
:crest accrued or tuned pursuant to this section, deemed state funds, we T,C,A. Gmerrment
Code, 1 404,073(c).
365
i;
t
i
§ 321.501 LOCAL TAXATIO`
Title 3
Interest on deposits, we 1 321 !0!.
Single bands, see 323 !01.
Special purpose taxing aurhorIlIft collection of sales and use iases, applical,on of this seclmn,,
we 1 322,301.
§ 321,502. Distribution of Trust Funds
.At least twice during each state fiscal year and at other times as often as
feasible, the comptroller shall send to the municipal treasurer or to the person
%w ho performs the office of the municlpai treasurer payable to the municipali•
ty the municipality's share of the saxes collected by the comptroller under this
chapter. t`
Added by Acts 1987, 7(th Leg., ch. 191, J t, eff. Sept. 1, 1957,
HlstericeJ and Statutory Note
Prior LAU9: _ Acts 1986, 69th Leg., 2nd C.S. ch. 2, 8 1
Acts 1967. 60th Leg p. 62. ch. 36. Vernon's Ann Ctw.St, art. 1066c, 1 $I&).
Acts 1983. 68th Ug, p 4792, ch. 841, 1 7,
§ 321.503. State's Share.
Before sending any money to a municipality. under this subchapter the
comptroller shall deduct two percent of the arnotlAt of the taxes collected
within the municipality during the period for wkich a distribution is made as
the state's charge for its services under this Napter and shall, subject to
premiums payments under Section 321.501(c), credit the money deducted to
the general revenue fund,
Added by Acts 1987, 70th Leg., ch. 191, 1 L eff, Sept. 1, 1987,
Historical and Statutory Notes
Prior Uwe; Acts 1986, 69th Leg., 2nd C,S., ch. 2, 8 1
Acts 1967, 601h Leg., p. 62, ch. 36, Vernon's Ann0%St. art 1066c.; SW
Acts 1963, 68th Leg., p. 4792, ch. 141, t 7.
§ 321.504. Amounts Retained in Trust Account
(a) The comptroller may retain in the suspense account of a municipality a
portion of the municipality's share of the tax collected for the municipality
under this chapter, not to exceed five percent of the amount remitted to the
municipality. If the municipality has abolished the tax, the amount that draw
be retained may not exceed five percent of the final remittance to the
municipality at the time of the termination of the coilectlon of the ILL
(b) From the amounts retained In a municipality's suspense account, the
comptroller may make refunds for overpayments to the account and to
redeem dishonored checks and drafts deposited to the credit of the accoar.t
(c) Before the expiration of one year after the effective date of the abolition
of a municipality's tax under this chapter the comptroller shall send to he
366
MI;NICIPAL SAI.ES At L'SE TAX ACT § 321,306
Ch. 321
municipality the remainder of the money in the municipality's account and
shall close the account.
Added by Acts 1987. 70th Leg , ch. 191, 1 1, eff. Sept 1 1937.
Reiiisor's Note
Former V.A,C.S. Article 1066c, Section 8(a), literally required the comptroh
ler to close out an account after a year after the repeal of the tat in a city, but
does not provide a date when the account must be closed. The raised law
assumes +hat the statute was intended to require the comptroller to close out
an account within a yrar of the tar's repeal in a city: The purpose of this
provision was to protect cities and ensure that a city Hill receive its morev
after a reasonable delay.
Historical and Statutory Notes
prior Laws: Acts 1986. 69th Let„ 2nd CS ch. 2. 1
Acts 1x67, 60th Leg, p. 62 ch. 36. t'ernon's Ann CivSt an. 1066c. 5 9ial
Acct 1983. 68ih Leg, p. 4792. ch. 941, ! 7.
Cross References
nicest accrued or earned pursuant to this section, deemed state Funds, see 1'.T C A GQ%ernment
Coda; 404,073Ic).
321.505. Interest on Trust Account
[purest earned on all deposits made with the state treasurer under Section
)21.401, including interest earned from retained suspense accounts, shall be
credited to the general revenue fund:
Added by Acts 1987, 70th Leg., ch. 191, 6 I, eff. Sept. 1. 1987:
Historical and Statutory i"ales
Prior UWe' Acts 1986, 69th Leg. 2nd C,S, ch. 2 4 1,
Acts 1967. 60th Leg., p. 62, ch. 36. Vernan's Ann Civ St. art. I066c, 1 1(4).
Acts 1983. 681h Leg, p. 4792. ch. 141, 8 7.
Notes of Decisions
le pnsrd I units, and any Interest previously deposited in
the general revenue hind of the state treasury
must receive specific Ieglslsuve sppNitriation
I, In loosed before such interest can be remtttel to the
Inieresl earned on taxes collected on behalf ssrlous taxing units: Op Ally Gen 1966, So.
d local taxing units roust be credited to those JSI-339.
321.306. Use of Tax Revenue by Municipality
Except as. provided by Section 321,507, the money received by a municipali•
under this chapter is for the use and benefit of the municipality and may be
jsed for any purpose for which the general funds of the municipality may be
,tad, except that a municipality may not pledge the revenue received under
h s chapter to the payment of bonds or other indebtedness.
Wded by Acts 1987, 70th Leg:, ch. 191, 1 1, eff. Sept, I, 1987,
367
a
§ 321,506
LOCAL T.LXAT1O.%
Historical and Statutom Votes Title 3
Prlor Laver inf 1486, 641h Lee. 31d C S. ch to' art. 1.
ACIf 1467. 60th Ley., p 6:, ch. 16, s 16,
10% 1453, 68th Lei, p. 4702, ch. 841. 8 7. 1ernonf inn,Cj%Sr ar:. 106& 14 pal, 9ia,
La 1486. e9th Leg, 2nd CS., :h. g I.
§ 321,507. Use of Additional Municipal Sales and Use Tar
(a) In each year in %khich a municipality imposes an additional municipal
sales and use tax, if the revenue from the collection of the additional tax
exceeds the amount of taxes computed for the municipality under Section
26.04(c), except for the amount required to be deposited in a special account
under Subsection (b), the excess shalt be deposited in an account to be called
the municipal sales tax debt service fund. Revenue deposited in the munici•
pal sales tax debt service fund may be spent only for the reduction of lak{u)
debts of the municipality, except that deposits that exceed the amount of
revenue needed to pay the debt service needs of the municipality in the
current year may be used for any municipal purpose consistent with the
municipal budget,
(b) Revenue from the collection of the additional municipal sales and use
tax in each of the first three years in which the tax is imposed in the
municipality in excess of the amount determined as provided by Section
26,041(d), for each year shall be deposited in an account to be called the
excess sales tax revenue fund. During thou three years, revenue deposited in
the excess sales tax revenue fund may be spent only if and to the extent that
taxes or other revenues of the municipality are collected in amounts less than
anticipated. After that period, the revenue In the fund may be used for any
municipal purpose consistent with the municipality's budget. The fund teas.
es to exist when all revenue deposited in the fund has been spent. This
subsection does not apply to a municipality that does not impose a property
lax,
.Added by Acts 1987, 70th Leg., ch. 191, § 1, eff, Sept, 1, 1987. Amended by Acts 1989,
71st Leg, ch. 2, § 14.16(s), eH, Auy. 28, 1989.
Historical surd Statutory Notes
The 1989 amendment, to conform to Acts Amos Laws:
1917, 70th Les„ ch. 11, ! 3, desEgnated subsee. Acts 1947, 60th Leg, p. 62, ch, J6.
(a) as such, inserted "except for the amount ;cis 1996, 69th Let{, 3rd C.S, ch. 10. an. L
required to be deposited in a special account 8 t6.
under subsection (b):' following "section Acts 1937, 70th Leg„ ch. 11, S 1
2604(c),"and added subset, (b), relating to the Acis 1989, IN Le . ch. 2, 1 14 mbi,
excess sales tax rrsenue fund. vernon's Ann,Clf it. art. 1066c, 8 9tb,, !ct
Cross Referenesa
Cm of tae revenue by munlctpatity, we 1321.506.
368
a
f
d
Tax to Reduce Property Tax
Burden Shifts from Property Owners
Since l~8 cities and counties have been principal city with a population of 300,000
able to provide property tat relief or more, A contiguous city may also be a
throu,zh a safes and use tax to reduce I city that borders a principal city and that
property taxes. Cities and counties i has boundaries extending into two or more
have spearic eligibility requirements for adopt' adjacent counties that include a principal
ing increasing, reducing or repealing the sales city)
tax. Although there are similarities in hots cities - is not included within the boundaries of the
and counties must use the revenue cities have f authority and fewer than 350 residents of
specific requirements in how they must use the county are within the boundaries of the
excess funds, IReter a, Tax Codc, Sec. 321 and authority, or
is not, not was on January 1, 1991, included
I in the boundaries of the ar-hority and the
Eligibility Requirements for Cities city's population in the latest census was
Most cities are eligible for an additional sales more than 67,X0. (Refer to Tax Code, Sec.
and use tax to reduce property taxes. The criteria 321.101)
for implerrenting An additional sales tax is as fol-
lows The city may pass the tax if Adopting, Increasing, Reducing, or
• the city has nut reached the maximum local Repealing the Additional Sales Tax
rate of two percent at any location within the for Cities
city's authority to tax; The additional sales and use tax rate must be
• the city has not imposed a tax authorised by Art. I adopted, Increased, or reduced in o,ie•eighth
II18z, Vernon's CMI Stances. According to Art. ! increments and must be a minimum of one'
1118z, El Paso and Linda are ineligible, eighth of one percent up to a maximum • the city is not included within the boundaries half of one percent, (Refer to
Tax Code, tSecs
of a rapid transit authority iNITA) created 321,101 and 32110
under Vernon's Civil Statutes Art, 1118x. An election to adopt, increase, reduce, or
According to Art, 1118x, cities within the repeal must be held after the city's governing
Austin, Cot aus Christi, Hoyson, and San body adopts an ordinance. The ordinance to
Antonio NITAs are ineligible, adopt, increase, reduce, or repeal the tax can be
• the city is not Included within the boundaries initiated in one of two ways: by a ma}ority, ote of
created under Vernon's Civil Statutes, Art. the governing body's members or by petition of
111fv, by a principal city with a population of five percent of the registered voters. (Refer to Tax
less than 800,000, (According to Art, II18y, Code Stv.321401)
cities within the Dallas and Fort Worth A1TAs If the election to adopt, increase, reduce, or
are in,Jiglble); or repeal is by petition, the governing body must
• the ctt,y is not located (wholly or partially) determine if the names of the registered voters
within a county that contains territory within are sufficient within 30 days after receiving the
the boundaries of a regional transportation petition. If the governing body determines the
Authority created under Vernon's Civil petition is sufficient, then the city must adopt an
Statutes, Art. 1I IBy, by a principal city with a ordinance calling for the election within b0 davs
population of more than 800,000 un'ess this after receiving the petition. (Refer toTax Code.
city, Sec. 321,402.1
- is a contiguous city as defired in All, 11. -v, When preparing for the election to adopt,
(A contiguous city Is a city with a pops la• increase, reduce, or repeal, the city must print the
lion of more than 250,000 that borders a I ballot to allow voters with A choice of voting
A Special issue. December 1992, Cdyd CounryAnanoa7M,anapemenl
i
3
s
rer ur against the Fropcsiuon. Follotx)ng are Eligibility Requirements tar Counties
examples Most counties are eligible to adopt or repeal A
sales and use tax to reduce property taxes,
I For A city with A property tax to adopt, Counties have two eligibility requirements coup.
(rcrease, or reduce the additional sales tax, the ties are eligible if the county has not reached the
bsllot should state two percent maximum local rate at Any location
The adoph,») 11f,rn addiHenal sates and use tat `o% 'thin its taxing authority, and no part of a coon-
riN;ur rJ;e cf!u at the rate of pf core ty ithsoincluded %vithin the boundaries of a transit
fcrcr,t to Ae ersr.f to reduce the proTertu tar aurity creat
r ed under Art, I11Rx or IIIBv. A
ri transit authority is not considered part of a coun-
Inert one•eighth. one-fourth, three-eighths, or ty if fecx•er than people are residents of both
one-holf as appropriate,) (Refer to Tax Code, Sec.
321 4)4(a) ) the county and the authority, (Refer to Tax Code,
,
I Sec. 323 101 )
Ballot wording in the lats allows for a city County Election to Adopt or Repeal
without a property tax to Adopt, increase, or A county may adopt a sales and use tax to
reduce the additional sales tax, the ballot reduce property taxes at a rate of one-half of one
should state:
Pre a percent In addition, a county haying no territory
;;dth,Ht the iLthe crity it at at n a rate te of i if sales j ,rd use tar I within the limits of a city may adopt the tax at a
_ p pore
)x r rat f rate of one percent. An election to adopt or repeal
the tax may be held after the commissioners
(insert one-eighth, one-fourth, three eighths, or court adopts an order The order can be initiated
one-half As appropriate,) (Refer to Tax Code, Sec, in one of two ways: by a majority vote of the
321 404(c).)
commissioners court of by petition of five per.
cent of the registered voters, If the commissioners
3. For a atv with or without a property tax to court is petitioned, then the commissioners court
repeal, the ballot should state: must determine v hether the petition is sufficient
T))e al•oht,nt of the additipiml sales and use tax within 30 days of receiving it If the petition is
within the city sufficient, then the commissioners court must
(Refer to Tax Ede, Sec 321.4)4(bi) pass an ordinance calling for an election within
60 days of receiving the petition. (Refer to Tax
within ten days after an election approving or Code, Sec. 323401.)
Abolishing the tax, the governing body must when preparing for the election to adopt or
enter Into its minutes the resolution or ordinance to repeal, the counties must print the ballot to
that declares the results. The resolution or ordi• allow voters a choice of voting for or against the
nance must include the following: proposition. Following are examples of ballot
1. the date of the election language.
2. the proposition on which the vote was held
3. the total number of notes cast for and against In it county with territory within the limits of
the proposition a city, the ballot to adopt the tax sho,ild state:
the number of votes h which the Adoption of a one-halt percent county sales acid
by proposition use tar within the cow y to Fe used to reduce
was approved, thecounty property taz rate.
Afterwards. if the election results change the (Refer to Tax Code, Sec. 323.404ia) )
pplUdOn of the tax, the city secretary must send, 2, In a county that has no territory within the
by L; 5, certified or registeroti mail, a certified copy limits of a city, the ballot to adopt the tax
of the resolution or ordinance, and a map of the should state:
city that shows its boundaries to the Comptroller's Adoption of a one p scent county sales and use
office. Then, the Comptroller has 30 days to nuhfy ta.r within the county to be used to reduce the
the city secretary that the Comptroller's Office is county property taz rate,
ready to handle the administration of the tax (Refer to Tax Code, Sec 323404(b).)
(Refer to Tax Code, Sec. 321.403)
special Issue. Decemter 1992. Ctyd CouniyfnanaalManagement G
In an cie%t"on t:+ rL-t 11 the tae, the ballot The cash tloxv dltterence 1s an ImFortant ta. rr
should ,I,tte to consider because cities and crunres collect t v-
Ah,ht"o"tJl'iri it'w U-ahi wJ;IryL,rvar:itoi 1 u311y ail the propertx t3xes Irom October
pit LONOv through January, Sales tax allocations are not
Refer to Tax Cekte.5erc 323;? Ircr.i made until DecemL*r. Therefore, a city or county
may" have to delay purchasing major item's
l~ithul pen sax "s after an election, the commis- because it will not Kaye received the aGocations
>1011ers COUrt mint enter Into its minutes the reso• until then, The delay in receiving the sales tax
lutirn that declares the results The resoiution allocation may prevent a city or county from
mu,t Include the feeiErt+tn, earning the same interest as it
P R OP ER could on property taxes,
I the dateoEtheelectton which are collected.
e_. the pmprsition deposited and
can which earn interest
the Bore %S,1s before the end
held of the city or
3 the trial Courtv's fiscal
rnmber of year.
rotes cast .:mother fac.
for and d for to con-
,11 ainsttbe cider is the
prol:"itionard G ❑ amount of re-
p the number of tail business a
cures by ++hich the city of county is
proposition
producing. If
teas approevd a city or county
. has a high volume
.Afterwards the k "r of retail sales, it may
electicon n results s chance the of
to consider passing
application of the tax, the coun• the additional sales and use
ty judge must send, by U S. certi• tax and reducing property taxes
tied or registered mail, a certified copy by shifting a portion of the tax burden
of the resolution or ordinance to the state to the sale of taxable goods and sen ices.
Comptroller's Office. (Refer to Tax Code, Sec.
323.403.) Reducing the Property Tax Rate
Once voters approve the sales and use tax to The purpose of this additional safes and use
reduce property taxes, and after the Comptroller tat is to reduce property taxes. A city, county, or
receives notification, one calendar quarter must hospital district that adopted the sales tax in
elapse for the sales tax to become effective Lin August or November of the preceding year or in
October 1. (For cities, refer to Tax Code, Sec. January or Slay of the current year must adjust
321,102; for counties, refer to Tax Code, Sec, its effective and rollback property lax rates In the
323,10:1 second and following years, txnly the rollback
rate is adjusted.
Two Factors to Consider The effective tax rate enables the public to
8e/ore Adopting the rax compare the proposed taxes for the current year
Cities and counties may want to consider two and the previous year's taxes. The effective rate Is
factors before adopting an ordinance calling for the rate that a local government must establish to
an election to adopt the additional sales and use raise the same amount of taxes raised in the prior
tax to reduce property taxes: the cash flow differ. year, taking into account changes In property val-
ence between the sales tax and the property tax, ues.
and the amount Of the local tax burden that may The rollback rate is the highest rate a taxing
be shifted from property owners to those who unit can adopt without voters being entitled to a
buy taxable goods and services rollback of the property tax rate through a yeti.
10 SPecial Issuo, Decembe, 1992, Crry S County FrnanclarManayemont
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F r m ae'sr r•rat;L1 n, .nc:uair4'rrmu..i• ..t
.illxn+e up to an eight percent Increase in ,?perat• the Corrcrcll,r s Pro
ng taxes from the preceding vear plus taxes to Fern' Tax Dut_.i,.,n at',•:,x
I I tor a cape of l'~:~tH•i>r•f uar;r~t
Fay debt in the coming year These calculations
change from the first to the second vear in t%hkh Use of Revenue and Excess Funds
the additional sales and use tax to reduce proper- Cities and counties face spectfic limitations on
ty taxes is collected, j the tie of collected revenue from the addmvral
A first•vear adjustment applies to both the ales and use tat, Hoc ever, excess retenue is
ettective and rollbackk rates by subtracting a sales hardled differentiy for cities and counties. For
tax gain rate C.ilculatwns for the sales tax gain cities and counties that impose a property tax, the
rate are outlired in the property Tax Code Sec, revenues collected from the additional sales and
a 041d1 as follows use tax up to the projected amount mac be used
for anv legal budgeted purpose, The projected
I. Request the iaxable sales figures available amount is the estimate of sales tat revenues
from the Comptroller's Office for the last pre- required under Property Tax Cade Sec
ceding four quarters for tour city, county. or 26.041(d) I
hospital district. I During the first three years of imposing the
Multiply the taxable sales by the sale tax rate, tat, a city or county must deposit any amounts
expressed in decimal format, to estimate the that exceed the projected amount into the "ex;ess
revenue a taxing authority would have sales tax revenue fund." During these first three
received from the additional sales tax had it years, a city or county may only use the excess
been in effect for the year. revenues if, and to the extent that, ether revenues
3. Multiply this amount by 95 percent. (The leg- fall short of budgeted amounts. After the third
islature allowed a conservative amount to off- year, a city or county may use the re%erue in the
set low first-year estimates of the total taxable excess sales tax revenue fund for any legal pur-
sales.) pose listed in the city or county budget. When all
4 Divide the adjusted sales tax amount by the revenue in the furd has been spent, the fund
current year's total taxable value ceases to exist. (For cities, refer to Tax Code, Sec
321.307; for counties, refer to Tax Code, Sec,
For the second and following years, since the 323.505.1
city, county, or hospital district has adjusted its Similarities In depositing and using funds end
property tax rate in the first year, the city, county, with the beginning of the fourth year. In the
or hospital district will not have to adjust the fourth year, cities must deposit excess funds into
effective rate in the following years. However, a city sales and use tax debt service fund, which
the city, county, or hospital district will have to must be used to pay city debts After the current
adjust the rollback rate each year. This adjust- debt obligations have been paid, excess funds
ment is necessary to properly reflect the changes may be used for any legal budgeted purpose, A
in sales tax revenue from one year to the next, city cannot pledge anticipated tax revenue to pay
After the first year, adjusting the rollback rate bonds or other debts. (Refer to Tax Code, Secs,
includes two steps. First, the preceding year's 321,506 and 321.507.)
sales tar revenue spent for operations (not debt) A county must also use excess funds to reduce
is added to tha preceding year's maintenance and county debts Once ali county debt Is paid, the
operating taxes. Second, the sales tax gain rate is county may use the excess for any legal budgeted
subtracted for the rollback rate. In the second and purpose. Similarly, a county cannot pledge antici•
following years, the sales tax g ain rate is calculat• pated tax revenue to pay bonds or other debts for
ed as follows: longer than one year. Although counties are not
legally required to set up a county sales and use
1, Contact the Comptroller for actual sales tax tax debt service fund, an excess fund account is a
collections In the previous four quarters good Idea if counties would like to identify
2 Divide the sales tax amount by the current excess amounts and track the use of the fund;.
year's total taxable values. (Refer to Tax Code, Sec. 323.505.) A
Specie) Issue. December 1992, City a County Financial Management 11
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RESOLUTION NJ
A RESOLUTION ESTABLISHING AND CREATING A SPECIAL CITIZENS ADVISORY
COMMITTEE TO PROVIDE RECOMMENDATIONS REGARDING A POSSIBLE ADDITION-
AL SALES TAX TO REDUCE THE PROPERTY TAX; AND PROVIDING AN EFFECTIVE
DATE,
WHEREAS, recently, the Governor signed House Bill 384 into
law, allowing a city not included within the boundaries of a
transit authority to adopt an additional sales and use tax to
r: uce the property tax with the positive vote of its citizens; and
WHEREAS, the City Council has determined that it would be ad-
visable to create a Special Citizens Advisory Committee to study
and provide recommendations regarding a possible additional sales
tax to reduce the property tax; and
WHEREAS, the City Council desires that the special Citizen Ad-
visory Committee make a report regarding the results of its study
and a recommendation for a course of action; NOW, THEREFORE,
THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES:
2_vXjjON I. That the City Council shall create and appoint a
special Citizens Advisory Committee to study and make recommenda-
tions to the City Council, regarding a possible additional sales
tax to reduce the property tax. The Special Citizens Advisory Com-
mittee shall utilize the findings of outside experts to analyze the
economic impact of such a tax on the various economic groups of
Denton citizens. The om ttee h 1 submit its report to the
Council no later than jS.. , 1993.
SECTION II. That the Special Citizens Advisory Committee
shall be composed of IA~__ persons of the community and shall
perform its functions in accordance with the intent of this reso-
lution, as directed by the Co ncil. Furthermore, each member of
the council will nominates individuals to serve on the
Committee and the Council shall designate the chairperson of the
Committee.
SECTION III. That this resolution shall become effective imm-
ediately upon itn passage and approvals
PASSED AND APPROVED this the day of , 1993.
BOB CASTLEBERRY, MAYO
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
BY:
APPA VED A TO LEGAL FORM:
DEBRA A. DRAYOVITCH, CITY ATTORNEY
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CITIZENS' SALES TAX ADVISORY COVITTEE
Tom Harpool, Chairman Retired
2222 Houston Place (76201)
382-8822
Joe Alford Joe Alford Florist
2608 Glenwood Lane (76201)
387-1582 531 N. Elm St.
387-4373
Dr. Derrell Bulls Texas Woman's University
1428 Windsor (76201)
383-1754 Dept. of Business 6 Economics
P. O.Box 23805
Denton, 76204-3805
898-2111
Dorothy Damico
1801 Panhandle (76201) R.S.V.P.
382-3327 1400 Crescent
383-1509
Rev. Alton Donsbach Retired
1426 Kendolph Drive (76203)
387-1592
Neil Durrance Attorney at Law
1902 Williamsburg Row (76201) 120 N. Austin
898-1975
Dr. William Luker University of North Texas
1213 Piping Rock (76205)
382-8559 Dept. Of Applied Economics
P. 0. Box 12988
Denton, 76203-2988
565-3437
Roy Metzler
3613 Dalton Metzler's Food b Beverage Corint 111 E, University D
h TX 76208 r. 383-1987
Bill Patterson Denton Record Chronicle
1309 Gatewood (76205)
382-8594 314 East Hickory
387-3811
Barbara Philips Homemaker
2200 Southridge (76205)
382-3000
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CITIZENS' SALES TAX ADVISORY COMMITTEE
Page 2
Dr. John Ellis Price University of North Texas
3300 Broken Bow (76201) College of Business
566-9514 P. 0. Box 13677
Denton, 76203-3677
565-3097
Tom Sass Peterbilt
7 Oak Forest Circle (76205) 3200 Airport Road
383-3823 566-7100
Ellen Schertz Schertz-Feucht Custom Homes
3820 Granada (76205) 512 West Hickory
566-6005 566-3005
Bill E. Utter, Sr. Bill Utter Ford
1915 Archer Trail (76201) 2230 West Unive-sity Dr.
387-1236 382-5404
Steve Woerner Denton Regional Medial Center
2903 Forrestridge (76205) 4405 1-35 (76207)
382-3506 566-4000
AMM00323
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CITIZENS' SALES TAX ADVISORY COMMITTEE
LIST OF INFORMATION NEEDED
Primary, secondary, tertiary market of Denton
Effect on the shopper
rnflux/Outflux of commuter, etc.
Effect on taxpayer
-homeowner and renter
Effect of property tax reduction on industries
Summary of where City revenues come from
List of cities that passed and failed measure
-why it passed or failed
List of all cities adopted
List of incentives for new industries
Effect of 1/2 cent on incentives
Effect on capital improvements in cities which pass measure
Average family/homeowner/renter pays in property tax/sales tax
-effect of 1/2 cent on each group
Effects on retailers where tax passed (invite speaker)
Breakdown of assessed value
-residential versus commercial
Number of dorm students
Leakage of sales out of Denton
-effect of 1/2 cent
Effect of outlet mall on sales tax revenue
Outside Resources; Dr. Bud Weinstein
Center for Retailing at Texas A&M
Next meeting - Wednesday, Sept, 8, 7 am, Council Chambers
Wednesday, Sept. 15, 5 pm, Civil Defense
Wednesday, Sept. 22, 5 pi, Civil Defense
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SALES TAX TO REDUCE PROPERTY TAX
PRESENTATION TO
CITISENS SALES TAX
ADV=SORY COr~ITTEE
AUC31US rM 16* 19 9 3
X. SRIEF INTRODUCTION
II. NEW LEQXSLATIOH
III DISCUSSION OF PROPOSAL.
I V . SAFEGUARDS TO C3tTARANTEE
FUNDS USED TO REDUCE
PROPERTY TAXES
V. SOME PROS AND CONS
V I . INTRODUCTION OF TOM
HARPOOL. CHAIRPERSON or
CXWXZENS • SALES TAX
ADVISORY COMMITTEE
VII. QUESTIONS AND ANSWERS
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II NEW LECQISLATION
o Governor aigr►ed Houae
E1i11 384
0 170 Texaa cities have
adopted
x I I D I Sic VS 8 I ON O F P RO PO SAL
0 1/2 cent aalea tax to
reduces the property tax
o Ca11 an election:
City C o u n c i l
Citizen p e t i t i o n
o F co u r u n i f co rm e l e c t i o n
dates
A u q u a t, N o v e m b e r,
aaknuaary, May
o Majority of zens
voting in election
o Effective October 1
0 1/2 Cent Sales Ta x
$3,031,675
0 16.73 Cent Property Tax
Reduction
Co 22.4s to 23.3 • Reciucstion
In Property Ta xe s
o Reduce Property Tax Ral t e
from .7180 to between
.5503 to 03813
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IV. SAFEOUAROS TO QUARANTEE
FUNDS USED TO RE DUC E
PROPERTY TAX E S
Ad Valorem Tax SafaQuarda
x t • s the Law
0 3% Ov ! r E f f e c t s v• Rat e
Public I3eariny
Public Notices in
NewsF.,aper
C30 Rollback Rate 8%
Votera Petition for
Rollbackc Election
Political Prasauris
o Political Accountability
o f C i ty C o u nc i 1
L a a t Four a n d Cq e t a At o jr
]Below Effective Rata
o Elactiora Would 2ntenaify
Public t3crutiny of
Property Z`a x Rat e
L.o42a1 Safequarda Under
i.vg31s1ati6n
o Law Statea Teti Rata Muat
b• Rolled Sack separate Fund for any
Excess Sal4us Tax Revreraue
o First Thro• Years Can
Only Se Used I :E Revenues
Selow Sudgated Estimates
C20 Fourth Year acid
T h e r e a f t e r Mu s t b e
Vaed for Debt Retirement.
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V. SOME PROS AND cons
PROS
o L a r g e Amount o f T a x
E x smp t P r o p e rty T a x
Rmlis.f
CITY 1993 CERTIFIED 1993 TOTAL ROLL FY 1993
ROLL (WITH PROTEST) TAX RATE
CARROLLTON ;4,556,661,364 ;4,573,871,900 .5866
LEWISVILLE ;1,843,069,688 $1o884,024,994 .5608
DENTON ;1,801,107,962 ;1,859,596,269 .7180
o L owe r P r op a r t y Tax Ra t Q
L c o nom i s D a v ®1 o pma n t
F r a a p o r t E x a mp t i o n
o Shi=t Coat to Sarv3.c®
limobrs
CONS
o Loss in =ntarast =n=ame
($49#330)
o Lass Predictable RsVanua
V X. I NT RODUC T I ON or TOM
HARPOOL, CHAIRPERSON cxr
CITIZENS' SALES TAX
ADVISORY C OMM I TT E E
VII. QUEGFMXONS AND ANSWERS
The Office of
4P Economic Development
PE\T, i\ rH VNI BER Of I'I IM%IER( E
yU 11%HHAU 0P ii [IN %A EKP
h1\ •I :u µii
March 3, 1993
Mr. Lloyd Harrell
City of Denton
215 E. McKinney
Denton, TX 76201
Dear Lloyd:
Regarding HB 384, let me tell you that from an economic development standpoint,
our ability to offset ad valorem taxes by raising the sales tax would be very
advantageous.
As you are well aware, prospective businesses looking for expansion or relocation
are quite cost conscious and looking at every incentive available. Denton is an
snique community in that we have a tremendous amount of non-taxable property
within its city limits. Two mayor universities, a state school and the regional
headquarters of Federal Emergency Management Agency all require city services but
are not on the tex rolls, requiring a higher tax rate to cover cost of service.
The ability to lessen the ad valorem tax rate would give us another tool to lure
companies from outside the state and foreign firms into the state and our
community, benefitting both economically. our current economic development
marketing program is targeted toward the west coast and Canada, areas where high
taxes are primarily responsible for companies looking at relocation
possibilities.
In ennclucion, for my say once again how very pleased we at the chamber are with
the Economic Development Partnership between the city ana the chamber and how
very much we appreciate the cooperation and assistance given by the city.
Sincere Y'
Ken eth D. Burdick
Vice President
KB:bg
letters/1034
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1993 IAX RATERS
Rranbury 0.4079
O 0.4099
0.4250
F~ 8rh 0.4400
Frboo 0.4500
Mosquito 0.4700
Flow Mound 0.5040
Piano 0.51 Q2
North Rbi4~ HIMs 0.6235
Addison 0.5338
Koller 0.5398
0.5808
O.b838
0.6777
Crr'o~on O.bBN
Euim 0.596
Gomm 5
015m
Hurd 0.8080
0.66
Wadwhis 0.4440
aflind 0.00
Tomsk
0.
~ O.Nf
Lar~cM~ler 0.
Gs~ 0.8717
~ Po+n< o.e744
0.8800
0.8996
0.7277
M~rNfNb 017614
Tfu 0.8000
0,8381
0.9500
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CITIZENS' SALES TAX ADVISORY COMMITTEE
AGENDA
September B, 1993
?:00 a.m.
City Council Chambers
I. Review of Questions from August 16 meeting
II. Presentation and Discussion of Questions from August 16
meeting - Part I
A. Summary of City Revenue Sources
a. Cities with Additional Sales Tax
C. Number of students in university dorms
D. List of Economic Development Incentives
E. Effect of 1/2 cent on Economic Development
Incentives
F. Assessed Value: Residential versus Commercial
in. Other Information Needed
IV. Timeline and Agenda fc• Future Meetings
CITIZENS' SALES TAX ADVISORY COMMITTEE
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LIST OF INFORMATION NEEDED
TENTATIVE TIME LINE FOR MEETINGS
September 8 700 a.m.
Summary of where City revenues come from
List of all cities adopted
Number of dorm students
List of incentives for new industries
Effect of 1/2 cent on incentives
Breakdown of assessed value
- residential versus commercial
September 15 5:00 P.M.
List of cities that passed and failed measure
- analysis of why it passed or failed
Effect of property tax reduction on industries
Effect on capital improvements in cities which pass measure
Effect of outlet mall on sales tax revenue
Influx/Outflux of commuter, etc.
Mesquite Chamber of Commerce/Retailer Presentation
September 22 5:00 p.m
Discussion of Mesquite's Experience
Analysis of why it passed
Effects on retailers where tax passed
Dr. Bernard Weinstein, Director
Center for Economic Development and Research, UNT
September 29
1. What are the economic effects of sales in Denton with an
increase in sales tax?
Primary, secondary, tertiary market )f Denton
Effect on the shopper
Leakage of sales out of Denton
- current and effect of 1/2 cent
2. Who pays more, who pays less, and by how muc4?
Average family/homeowner/renter pays in property
tax/sales tax
Effect of 1/2 cent sales tax Increase aid property tax
reduction on taxpayer
homeowner, renter, student, commuter, etc.
CITIZENS' SALES TAX ADVISORY COMMITTEE
ANSWERS TO COMMITTEE QUESTIONS
PART I
1. Summary of City Revenue Sources
Attachments 1 has some historical data relating to the City's
revenue sources.
City of Denton Po;ulation
City of Denton Taxable Value
City of Denton Sales Tax History
Tax Revenue Per Capita _
General Fund Revenue by Source `
2. Cities with Additional Sales Tax
This item lists the Texas cities that have passed an
additional sales tax to reduce property tax.
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3. Number of Students in University Dorms
This attachment shows the distribution of the student
population as estimated by both universities.
4. List of Economic Development incentives
Attachment 4 outlines the economic development incentives
given to industries that meet the criteria.
5. Effect of 1/2 Cent on Economic Development Incentives
This item discusses the effects of a half cent sales tax on
the incentives offered.
6. Assessed Value: Residential vs. Commercial
This information will be passed out at the meeting.
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Attachment 1
CITY OF OmNrraw
REVOPTUE Sc3uXICES
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CITY OF DENTON POPULATION
(Ten Year History)
[ I~ou~an~_is
80-~
70 -
6 U
25,
50- gl~'
40-
j/ 'i /
30-
ONEIDA AS
2.0 i/ i% , /
i % /
i /
je,
-0i /%Q
1~IE3`J 1J~s ~ l,a~17 1J~if3 1JESll 1sj~ju 1091 101D2 1993 1904
Su~~rr•r; slily ~~I f)rrf~lUrt I'Isiir,~i~~~ ~~rF~
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CITY OF DENTON TAXABLE VALUE
(Ten Years and Projected)
Millions
$2500
$2000-
$1600-
$1000-
$500
$0
1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994
FISCAL YEAR 'PRA.)
REAL PROPERTY =PERSONAL PROPERTY
Preliminary
CITY OF DENTON SALES TAX REVENUE
(Thirteen Year History)
Milllons
$6
S6 iE
.
MI.
i Hill i H! -.1 6,40"
$2 i : E i=
.
.:..:E
10
....ii
.
$ 1 Ei..
4 4
1982 1283 1984 1986 1986 1987 1988 1989 1990 1991 1992 1993 1994
FISCAL YEAR
SALES TAX
TAX REVENUE PER CAPITA
(5 YRS AND PROJECTED)
FISCAL YEAR
i
1989 ;~*"~l\\\,\\
j
1990 G^ VAvvPA;vA~~Vvw:AVAA\: ~Awvv ~V~ t
1991 n ~vv : Q VAVAb~ :V`:k\~~ AA v,v, A;v'~f ~
VV` ~~\V A~~V~~
II r- - I
I I
(EST.) 1993 -v ~vv c `vv: A v`vy `v•~ vv v A~U `1 k
(PRJ.) 1994 -
$0 $20 $40 $60 $80 $100$120$140$160
=PROPERTY TAX =SALES TAX
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General Fund
Sources and Uses of Funds
Revenues
$29,021,976
Irons. Other F-uniJs .'~i u%
l l'
MisCellarn~ci~a~, 4 4'
~fi~r is a ° Firme, I-ees
"!A. 1
i:~r ri
!i !rlrrd ~p:~ Ifir++:N r. :ru~~m r.F:uY
li3E i l { hill i v'r r r'3ri ' :
~'r'i3ii~~!i~i ~0iiii~IE:Ia :ri•':iiiiE'.
L:;!{I ~ff.•....33r.{:{: :!ri?I ~'ief:ii!;j~:,n
•3i'~i i'i°j Iii! ~:i i~ ~I,i~ yi
r € u
F ,1111" I I"' ~ !\!1 ~`,}Ir~t! fll I;]~!~',
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GENERAL FUND REVENUE
(REVENUE BY SOURCE)
Millions
$30-
I~
1
i
$25 r7 +
= TRANSFERS--
$2411 1 1
MISC REV
LIC/PERMITS
$1 FINES/FEES
SERVICE FEES
OTHER TAXES
\
$10~~w SALES TAXES
+ AD VALOREM
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CITY OF DENTON, TEXAS_ _
ANNUAL PROGRAM OF SERVICES
GENERAL FUND REVENUE SUMMARY
PROPOSED BUDGET
1993.94
1991.92 1992.93 199293 199394
DESCRIPTION ACTUAL BUDGET ESTIMATE' PROPOSED
Current Year Ad Valorem 6 8,959,670 1 8,892,976 S 8,987,874 ! 8,927,298
Derinquent Ad Valorem 260,584 200,000 3961000 200,000
Current-Penalties Blnterest 80,552 70,000 70,000 70,000
Prior-Penalties 6lnterest 99,983 80,000 801000 60,000
Tax Coi!ecticn Fees 79,143 80,000 80,000 80,000
Ad Valorem Taxes d 9,519,932 1 9,322,976 1 9,613,874 1 9,357,296
Sales Tax 6 5,536,602 i 5,920,095 4 6,113,418 1 8,424,578
Sales rim 4 5,536,602 1 5,920,095 - $ 6,113,418 T-8,424,578
Franchise-Lone Star Gas $ 294,101 1 302,925 1 270,700 $ 282,925
Franchise-GTE 180,691 132,250 132,250 136,217
Franchise-Sammons 239,505 232,200 257,404 260,000
FirurcAimeApr morris 1 714,297 s 667,316 / 660,354 8 679,142
Mixed Beverage Tax 1 68,157 s 60,000 1 68,000 $ 68,000
Hotel/Motel Tex 428,783 420,000 445,000 458,000
B;ngo Tax 18,441 27,000 15,000 11,000
Franchise•TU Electric 34,798 35,600 38,000 39,160
Total OfAerTexee 1 550,179 S 542,600 $ 664,000 s 676,160
Swimming Pool $ 44,132 ! 42,600 4 46,800 ! 46,800
Cemetery Fees 10,275 9,000 91000 9,000
Community Building Rent 17,301 25,100 23,510 23,510
Airport 57,924 55,200 31,181 55,000
Athletic Fields-Electric Fee 0 0 0 17,000
Recreation Program Act Fees 9,443 10,800 11,390 11,390
Athletic 11,066 6,023 3.400 5,023
Ambulance Service Fees 224,170 224,800 243,339 324,800
William Square Parking Fees 12,138 12,264 12,264 12,264
Fire Inspection 29,290 22,500 26,000 26,500
Engineering-Charge to Bond Fund 403,782 455,000 455,000 455,000
Sub Ambulance 0 0 6,562 28,060
Revenue Fees $ 819,521 1 683,287 ! 868,438 s 1,014,361
' Estimate as of May, 1993
'Dedicated to Ou0ty Sefvlcs'
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CITY OF DENTON, TEXAS`
ANNUAL PROGRAM OF SERVICES
GENERAL FUND REVENUF. SUMMARY
PROPOSED BUDGET
1993-94
1991.92 1992.93 1992-93 1993.9:
DESCRIPTION ACTUAL BUDGET ESTIMATE • PROPOSED
Warrant Fees 1 28,549 1 60,000 1 60,000 1 50,000
Animal Pound Fees 101,614 66,000 61,154 62,000
Auto Pound Fees 30,517 31,545 42,000 40,000
Mowing Fines 11,547 12,000 12,000 12,000
Police Escort 6 Guard Fees 14,602 14,800 23,000 23,000
Court Cost Service Fees 23,036 25,000 25,000 25.000
Animal Control Fines 4,683 6,000 4,600 5,000
Denton Police Fines 491,756 660,000 640,000 640,000
Inspection Fines 6 Fees 969 800 800 800
Fire Department Fines 8,457 24,420 10,500 10,500
UNT Police Fines 31,485 41,000 36,000 36,000
TWU Police Fines 6,276 11,000 6,000 6,000
Parking Fines 54,657 45,CO0 36,000 38,000
Appearance Bond Forfeiture 5,205 6,000 8,000 8,000
Court Administrative Fees 48,844 $0,000 78,000 78,000
Arrest Fees 51,684 55,000 76,000 76,000
Restaurant Inspection 21,743 28,500 26,600 27,000
Grocery Insrection 11,615 10,240 10,450 11,600
Swimming Pool Inspection 15,520 14,400 14,240 14,240
Food Handler Inspection 35,551 43,500 43,500 43,500
Daycare Inspection 3,147 2,802 3,150 3,151
Uniform Traffic 24,636 0 41,000 11,000
False Alarm Fees 6,850 8,500 51100 5,000
Pool Manager's Cert. 1,295 1,500 1,550 1,000
F14e8 end tees 1 1,038,933 11 1,214,007 1 1,258,544 Il 1,256,791
I
' Estimate as of May, 1993
'Dedkst'ed to Qaelity S*Wcoo
I
y
CITY OF DENTON, TEXAS
ANNUAL PROGRAM OF SERVICES
GENERAL FUND REVENUE SUMMARY
PROPOSED BUDGET
1993.94
1991-92 1992.93 199243 1993-94
DESCRIPTION ACTUAL BUDGET ESTIMATE • PROPOSED
Zone Permits & Petitions 1 21,025 ! 28,000 f 21,000 a 21,000
Wine & Beer licenses/Permits 7,178 71160 7,050 1,000
Electric b Plumbing Licenses 19,637 15,000 16,500 19,375
Vital Statistics-Birth 21,966 20,000 18,000 20,000
Building Permits 97,302 74,300 97,500 97,500
Temporary Gas 13,285 1,600 1,600 1,500
Loading Zones 0 1,000 0 1,000
Right-cf•Way Inspection Fees 14,896 17,600 23,000 25,000
Curb Cut Permits 4,922 31000 4,200 4,200
Mobile Home Licenses 10,971 11,300 11,300 11,300
Vital Statistics-Death 18,536 14,000 2$,000 21,000
Development Fees 31,221 19,600 36,540 36,000
Sign Permits 15,840 10,600 15,000 16,600
Sale of Oocuments 2,028 1,800 3,000 2,200
Plan Review Fees 14,500 18,400 19,000 19,000
Certificates of Occupancy 0 81000 7,000 71000
Reroof ng Permits 0 3,500 1,300 1,300
Reinspiction Fees 0 1,100 400 400
Variance Filing Fees 150 350 160 I50
Landscape Fees 0 540 540 540
Parking Lo' Permit! 200 0 0 0
Fence Permits 0 1,200 1,800 1,600
Mechanical Permits 0 7,200 8,000 8,000
Moving Permits 0 260 120 120
Oemalition Permits 0 800 160 150
Pool, Spa, Hot Tub Permit 0 1,200 1,200 1,200
lkenses end PwMs 8 W ASS / 267,000 t 313,150 1 322,035
a
' Estimate as of May, 1993
-Dedicated to Cooky S*-Wce'
n
-CITY OF DENTON, TEXAS
ANNUAL PROGRAM OF SERVICES
'N GENERAL FUND REVENUE SUMMARY
PROPOSED BUDGET
1993.94
1991.92 1992.93 1992-93 1993.94
DESCRIPTION ACTUAL BUDOET ESTIMATE • PROPOSED
Parking Meter Receipts S 24,387 1 20,0,0 1 21,000 1 21,000
Electric Inspection 12,900 12,400 15,000 15,000
Plumbing Inspection 18,915 14,000 16,000 16,000
Overtime Inspection 560 1,250 31000 1,500
interest income 578,159 510,000 470,000 450,000
Traffic/Police Reports 18,570 18,000 18,000 18,000
Miscellaneous Income 195,907 73,260 74,700 75,000
Street Cuts 24E,734 350,000 250,000 275,000
County Contribution-Civil Defense 19,869 0 0 O
Federal ContrbuCon-Civil Defense 36,548 0 0 0
County Contribution-library 105,355 108,128 108,128 108,126
County Contribution-
Ambulance Service 271,140 262,883 245,534 245,534
Small Cities Contribution-
Ambulance 48,719 48,719 48,719 48,719
Pick Up Animat Carcasses 2,676 1,700 1,639 1,639
Administrative Fees 0 3,847 0 0
C.I.P. Engineering Fees 1,649 11500 2,250 1,760
GDAC Revenue 21,094 0 0 0
miscoleneous Revenwt 1 1,603,162 1 1,426,489 4 1,272,968 1 1,276,268
Administrative Transler-Electric 1 1,684,835 1 1,762,007 1 1,752,007 1 1,822,684
Return on Investment-Electric 2,333,538 2,294,399 2,294,399 2,338,380
Administrative Transfer•Watee 11052,515 647,593 847,593 632,640
Return on lovestment•Water 1,682,162 943,345 943,345 1,134,373
Administrative Trans.-Wastewater 0 480,214 480,214 471,852
Return on Investment-Wastewater 0 837,829 837,829 969,386
Administrative Transfer-Sanitation 358,885 389,155 3891165 384,012
Transfer-Defensive Driving 10,000 15,000 16,000 15,000
Transfer.Foe Risk Management 235,000 76,000 75,000 76,040
Transfer-Insurance Fund 100,000 125,000 126,000 40,000
Transfer-Receestlon Fund 0 37,500 24,000 25,000
Transfer-Other 222,040 0 0 0
Transfer Flra Reserve 0 137,000 137,000 131,000
State/Federal Grant 0 1,601 1,601 14,918
Contribution OISD 45,408 61,878 82,966 65,186
rrensfave 1 7,724,343 1 7,797,531 / 71785,118 / 8,115,339
ORAND rOrAi REVENUES 127,800,629 128,020,366 128,449,862 129,021,978
Estimate as of May, 1993
'Dedleated to Quedty Survlce' -
8 ~
CITIES WITH ADDITIONAL SALES TAX TO REDUCE PROPERTY TAX
Abbott Fairfield Madisonville Somerville
Abernathy Falfurrias Marble F,7Ils So Padre Island
Abilene Farwell Marion Springtown
Alice Flatonia Marlin Stephenville
Alpine Fort Gates Marshall Sweetwater
Amarillo Fredericksburg Mathis Teague
Angus Galveston McAllen Temple
Athens Gatesville Memphis Terrell
Ballinger George West Mercedes Texarkana
Beaumont Glen Rose Mesquite Tomball
Beverly Hills Goliad Mexia Trinity
Big Spring Golinda Midway Tulia
Blanco Graford Mineral Wells valley view
Boerne Granberry Mission Vldor
Borger Greenville Mustang Village of Bee Cave
Boyd Gun Barrel City Nazareth Waco
Brazoria Harker Heights Nixon Weatherford
Bridge City Harlingen Oak Ridge North Wellington
Brownsville Haskell Onalaska Weslaco
Brownwood Hemphill Orange Grove Wharton
Bryan Hempstead Palestine Whitehouse
Caldwell Henderson Pampa Whitney
Caney City Hewitt Pearsall Willow Pa--k
Canton Hidalgo Pecos City Wills Point
Carts Corner Hillsboro Pharr Winters
Carrizo Springs Hudson Oaks Pinohurst Woodville
Carthage Huntsville Plainview Woodway
Chandler Ingleside Pleasanton Zavalla
Cleveland Ingram Port Isabel
Coleman Johnson City Port Lavaca
College Station Jourdanton Premont
Colorado City Kemah Presidio
Conroe Kennedale Progreso Lakes
Corrigan Killeen Quitaque
Corsicana Kingsville Ralls
Crosbyton Kyle Raymondville
Caney LaMarque Rhome
Daingerfield Lake Bridgeport Riverside
Del Rio Lampasas Robinson
Devine Levelland Rosenberg
Diboll Livingston Rotan
Dickens Liano Round Rock
Dilley Lometa San Augustine
Dimmitt Longview San Felipe
Early Lufkin San Marcos
Edinburg Lytle Seadrift
Edna Seven Points
E1 Campo Smithville
Snyder
Notei Cities with sales tax in effect as of October 1, 1992.
j
Attachment 3
3. Number of Students in University Dorms
TOTAL TOTAL 4 TOTAL N TOTAL 9 OF
ENROLLMENT IN DORM IN DENTON COMMUTERS
UNT 250500 4,000 120500 9 000
TWU 80500 1,414 1,422 5,664
TOTAL 34,000 51414 . 13,922 14,664
NOTESs
Total Enrollment based on estimates obtained from each university.
Total 9 in Dorm based on the estimated current dormitory residents, not
total capacity figures.
Total N in Denton represents the total number of students that live in
Denton, but do not live in a dormitory.
Total i Commuters estimated number of commuters based on the total
enrollment minus dorm and other Denton residents.
TWU estimates provided by Institutional Research Office and Housing Office
UNT estimates provided by Institutional Research Office and Public Affairs
and Information Services
r
CITY OF DENTON
ECONOMIC DEVELOPMENT
INCENTIVE PROGRAMS
AND POLICIES
o~
Fail wadi 'gas
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n
l~
r.
ti
n
col y of Ou,latl ulfice of icu (joc U/Y/IJpolleod
7f 6 t Mc Ramey DOW00), NASA /6701
(6171 666 /J06 98 17) 6455 N/J6 h9
r_
TAX ABATEMENT ENTERPRISE ZONES FREEPORT EXEMPTION
The City of Denton, Denton County, and the Texas Department of Commerce The City of Demon, Denton County, aid
the Denton independent School District approved deslpn.Gon of two Renton Enterprise the Denton Independent School District passed
adopted a tax abatement policy available to loiies in Juno 1990 ll+e Freeport Amendment which exempts
new and expanding industries, corporate office certain business personal property from all
hesdquarlers, and distribution centers. Zonal 9.11 square miles. located on the valorem taxes,
west side of Denton: it includes the
Denton is unique In that all three taxing Denton Municipal Airport, the industrial Few cities In Texas can boast that all of
jurisdictions jointly developed and approved the park, and major tracts of land along their taxing entities have adopted the Freeport
policy. The policy provides lot 25% abatement Interstate 35. Exemption, In fact, only one other city in the
of new structure and personal property DallaslForl Worth/Denton melroplex can make
valuations, and has a qualifying threshold of $5 Zone II 7, 31 square mites. located mainly on this claim.
million, The number of years tax abatement the east side of Denton; it includes the
may be approved increases as thg total amount area neat the Golden Triangle Mall, Goods, wares, merchandise, other tangible
of new valuation increases, Pecan Creek Industrial Development, personal properly, and ores (other than oil,
and contains 'fingers' that extend to natural gas and other petroleum products) are
lfislory and philosophy of the firm, project the Highway 77/toop 288 intersection exempt from ad valorem taxation
specifications, and the potential impact on tl+e and the Ilighwav 380/Loop 288 area.
community are factors that are considered • the property is acquired in or imported into
during the application approval process. The Enterprise Zones were established to the State to be forwarded outside the State;
promote economic development and to create and
new jobs in Denton, The program provides the
VALUE OF 1NCENIIVE City of Denton the opportunity to pass on state ■ the property is detained in the State for
benefits to Industry. Qualifying Enterprise Zone assembling, storing, manufacturing,
Projects may receive: processing, or fabricating purposes by the
Va/uaUon Vows person who acquired or Imported the
a Refunds of state sales lax up to $250,000 Plbperty; and
per year on materials used in construction of
100 10 for equipment. Refunds are based on r it* property is transported outside the Stale
80 9 $2,000 per qualified employee Ian employee not later than 175 days after the date the
65 8 who lives within the zone or who Is person acquired or imported the properly in
50 7 classified as disadvantagedl. the State.
35 6
20 5 a A discount of 50% on corporate franchise
15 4 tax on depreciable capital acquired during
10 3 the five year Enterprise Project designation.
5 2
r
ELECTRIC UTILITY INDUSTRIAL I INFRASTRUCTURE ASSISTANCE
ECONOMIC DEVELOPMENT RIDER WORK FORCE
The City of Uentun Utilities Department
New and existing commercial electric service Texas Worts force Incentive Program promotes economic growth through a program
customers, as described below, rnay receive a of infristrucluie hnamcino, $500,000 is
reducli•;in in their billing or system demand, finder ttie Stale of Texas Work Forte allocated annually to hnance the construction
Incenti•"e Program, training grant requests may of water and sewer tines,
■ New customers whose electric service be submitted for amounts up to $250,000
represents demand not previously served annually without any cash match requirement selection Policy
by the City at any location in the City's by a corporation. Requests for amounts over
service area in the last 12 months and $250,000 require a 2.1 cash match on the part Infrastructure financing 13 ova fable to
where such metered demand is in excess of the corporalion. Each contract is limited to
of 200 KW. $1,000 per trainee. A new industry rnav ■ Industrial prospects which have committed
participate in the program for up to three years to budding facilities
■ Existing customers served under Rata
11-PI, General JobfNJninyParblershpAetIJTPAI is colimwciallreti prospects which hove
committed to building facilities and which,
Schedules 'litnary large Primary Service ICS), aria
F
'time of use' customers under these rate JTPA services are available in Uentun
schedules (1111, 1GP, TGS) who add through the North Texas Education and _ sell a majority of tile'( goods or services
additional demand of at least 200 KW on Training Coop. Employers bencli. from hiring 10 mdwiduals ur businesses oulsrdu ul
lop of their existing level of demand. JTPA participants because JTPA will reimburse Damon, or
The adddional load must be separately an amount equal to 509E of their wages for on.
metered. the job training JTPA also offers on site , manufacture goods for consumption in
specialized training for employers who use Oenlon which were previously
The monthly billing/system demand will be J1PA parllcipanls. JTPA will provide trainers manufactured outside Denton
adjusted in accordance with the following and equipment to provide whatever specialized
table, training the employer needs if the employer will ■ Prospects which have tommilted to building
involve a minimum of 10 12 JFPA participants corporate headquarte+s facilities
REDUCTION TO arid will agree to hire those who successfully
81111NO OR SYSTEM DEMAND complete the program. Economic Analysis
- - Educated Work force An economic analysis is performed on cant,
Reduction to project to determine project costs and benefits
Time Period Demand A highly educated work force is abundant ill over a live year period, The results of tllu
Denton, Uentun is the home of two (main( analysis are an important factor in the prujer l
umversnies, the tillrvelsity of North lexas and approval process.
First Year LO's~ lexas Woman's Ihuverslly. Ill addition, e:uu4e
qU'N, Cuunly Con,mlululy College provlllrts vuc,lllnnal
Second
year Year 40~A, educallurl J1141 lraminu IIIUutalllb A Its Uenlu I
cJnlptls All Ihrce provide spucl,dizr:d tlauunU
Irnld Yee( 7O
dill Year lU'n, litugrdnls for local Lu,ulusses.
ti
Attachment 5
5. Effect of 1/2 Cent on Economic Development Incentives
Tax Abatement
This incentive abates property taxes. The only effect would be to further
reduce the amount of ad valorem taxes paid by the entity.
Enterprise Zones
Enterprise zones refund state sales tax only. Therefore, there would be no
effect on the local portion or additional 1/2 cent sales tax if enacted.
Freeport Exemption
The Freeport Exemption has already exempted goods in transit from the ad
valorem tax. There is no effect on this incentive with an additional sales
tax to reduce property tax.
Infrastructure Assistance
There is no effect on an additional sales tax on this incentive.
Work Force Training
These state and federal programs are not affected by either the sales tax or
property tax.
ONE TAX DOLLAR DISTRIBUTION
CITY SCHOOL DISTRICT CNTY
F767882380
' wullavw.AC8 ' x. 6 F . °
7 F76 82830 l i eW
~ J tiLAC F
~ 1+.ry 14 ~II.W
I..MM1 1
r
. F767882380
9 wmamwmamrl 1
6 OF
O F7678823180 W f
c.~,~~ !rl z, s.t 6
~I..Iw. llr\R.M
F767882380 '
9 ~ wullsoracD.G
9 EF67882,.~~ 6
1987 37.33% 48.48% 14.19%
1990 30.50% 57.17% 12.32%
1992 28.95% 59.28% 11.79%
N
CITIZENS' SALES TAX ADVISORY COMMITTEE
AGENDA
September 150 1993
5to0 P.M.
City Council Chambers
I. Presentation and Discussion of Questions from August 16
meeting - Part II
II. Discussion of Cities to Be Polled by Committee
III. Other Information Needed
IV. Timeline and Agenda for Future Meetings
i~
I
CITIZENS' SALES TAX ADVISORY COMMITTEE
AGENDA
September 151 1993
5300 P.M.
City Council Chambers
Item 1
Renter vs. Owner Occupied Housing Housing characteristics are
listed from 1990 Census information.
Influx/Outflux of commuter 1990 Census information has data for
City of Denton citizens that work inside and outside of Denton. No
data is available yet on the amount of commuters coming into
Denton.
Item 2
Effect of outlet mall on sales tax revenue This information was
not available in an exact format from the State Comptroller's
Office. The owners of the outlet center are reluctant to give out
this information since it could harm its competitiveness if
business rivals had the sales information. City staff estimated
the factors contributing to the growth in the sales tax this year.
Item 3
Effect of property tax reduction on industries This will be
handed out at the meeting.
Item 4
Utility Rate Structure The 1993-94 utility rates are included
for electric, water, and wastewater which provide transfers and
return on investment to the general fund. A utility rate brochure
is also attached.
Item 5
Brief summary of information from several cities that have passed
a half cent sales tax and the effect of capital improvements in
cities which passed the measure. Also attached is a list of the
cities that have passed the 1/2 cent sales tax with population
figures. The committee may which to choose cities to contact from
this list.
Item b
other Sources of Revenue If the sales tax revenue falls short of
the estimates, there are three courses of action.
1 The City Council has adopted a policy of retaining an 8-101
fund balance. The City Council determined the 1994 fiscal
year would include a 101 fund balance. This represents
approximately $3 million which could be utilized if sales tax
revenue fell. short.
2 The City Manager has authority for a contingency amount of
approximately $75,000 to be used if necessary on unanticipated
expenditures. This could also be utilized.
3 The other course of action would be to initiate midyear
adjustments. These adjustments could include a hiring freeze
and/or a freeze on capital expenditures.
HOUSING CHARACTERISTICS
1990 CENSUS
Occupied Housing Units
Owner occupied 10,058 39.1%
Renter Occupied 15,661 60.9%
Total 25,719
Value - Owner Occupied
Less than $50,000 11310 15.71
$40,000 to $99,999 4,889 58.5%
$100,000 to $149,000 1,415 16.9%
$1500000 to $199,999 458 5.51
$200,000 to $299,999 213 2.51
$300,000 or more 70 .8%
Median Value $77,300
Rent - Renter Occupied
Less than $250 1,652 10.81
$250 to $499 11,378 74.71
$500 to $749 1,882 12.4%
$750 to $999 223 1.51
$1,000 or more 99 .61
Median Rent $362
iN
r
t
City Housing Summary (01Les with over 1,000 Donura7,on only) konn Central F.as CJUnci ;t Gc.e'~re~r5
Sb1a1 iFp n/
pN Dem0111100l E411rn47Ld t
rift d U98 i, illa all AdjuUmenb NOU/l oils1 s
City ti Fin
Cmime 4M80 s VnefnL
Units i4
1TYW Of NouLln to u
91 M1 1110 bL3U90 1!1191 t990
Cainm Cene
S,ngy Fyvry 2~
Mum Famay 2t 0 ' '27 t 5t5
Maur K~4 J
tes se ,s .2 0
TOTAL 52f e45 449 32 3t '23 96
36 2' , eft .355
04nlon
5nay Frr2y
M 10.523 t 513 1 re9 135
uro Frnay 7.54E 4 976 1 t95 J 312 0 13 376
Muay nome
014 1273 95 2 0 14 014
TOTAL J 0 48 1924
19.279 t 774 2 374 135 3' 4
45 29296 35)
Oel
4mdy 241 346
mum, Panty 9 0 $p 0 r '2t Sit
npme 3 0 ° 0 ° 3 0
249 346 54
art
Mound
~'_4W 353 7 t0 S t Sgt 429
Ny 41 574
5133
0 0 4
tm. 3o 199 0 0 640 29220 5 t 59t a2B 705 Creek
cae X.4
Jum hft* ~It 121 0 43 0 0 711
Mott* Noay 4E 1 0 ° 0 7
TOT4 0 t ' 0 33
606 12e 4.11 4 4 0 776
7.
HIONamil Village
Mpwof y 98E 717 052 229 S C 2 S8,
Mo" Nome 0 0 ) 0 0
0
0 0
TOTAL - 71i 452 229 S J 2 she ; 772
Juel n r
smote irmry 34
Mum FrNy 43 36 2e 0 ° i 414
MaD4e M" ` y 0 0 2 00
TOTLL32p 109 30 0 ° J 4
7 24 478 451
Krwm
M n h 33f,, 145 e
0 86 5 0 3 339
MOGJ4 nary ' ~ 7 t J 0
MAIL
1 0 23 t0
347 t32 Dr S I1
2e 5.9 545
Like Douse
So" F4vuy 820 It2 29 6 43 0 929
Mum 94r.ry EI 42 184 p
MOON aaarn/ 388 267 78 is r ° 3 360
7CtAl 1,281 461 291 30 1 t2 U3
21 .u3 .r59 IJ12 r 557
lerNMM
Snpe Fe^ Y7 9,201 2 233 t t/7 241 e9 0 10 300
M'aR' Fy'dy _ 7,401 4 829 t 112 0 0 567 7 361
'/ooae +t.+e "1 0 901 0 .3 re
TOTAL E.aFIF 7062 4330 260 467 0 x,446
5}7 19333 ) 724
IF~Cer Old "I are rotate by lite *,pin Corponefi bouNerNS fltn CRy a Wad
county CMI,nQ Me misporly 01 the fly3 populebon.
10
M
v
llousing Values of owner occupied Units for Selected Cities: 1y90
Total Percent of All Units
owner
Selected occupied Median More
Cities Housing Value LASS $50,000 $100,000 $150,000 Than
Units Than
1990 $50,000 $99,999 $149,999 $199,999 $200,000
17 5 3
Denton 8,510 $76,400 17 58
2 49 38 q 3
Carrollton 17,543 $99,300
43 15 8
Coppell 4,177 $113,300 1 33
Frisco 1,097 $80,900 14 59 11 8 7
30 4 1 1
Gainesville 3,348 $40,300 65
3 38 30, 18 11
Keller 3,555 $115,200
73 17 2 1
Lewisville 7,871 $81,500 7
34 39 13 5 9
McKinney 31739 $68,600
2 36 36 14 12
Plano 6,251 $1130600
8 2 1
Sherman 6,553 $48,800 51 38
I
Gxnpiud by the Dry J Denton Mnning and DewkvaMt D"runem u4ni IM Ceram lots.
I
14
w,nwe
Distribution of Household Income for Selected Cities: 1990
Percent of All Households
Selected Total Less $20,000 $40,000 $60,000
Cities Households Than to to and
$20,000 $391999 $59,999 Greater
Denton 25,702 45 29 15 11
Carrollton 30,462 14 28 26 32
Coppell 6,073 8 19 25 49
Frisco 2,049 21 36 22 22
Gainesville 5,728 49 30 13 7
Keller 4,451 9 24 24 43
Lewisville 17,611 19 37 26 17
McKinney 7,532 36 34 16 14
Plano 44,528 10 23 24 43
Sherman 12,371 41 32 16 11
' Compiled Dy the ary of Demon 9lennins end Development Depertmeni using 1990 Ceneue dua.
20
1
Travel Time to Work
by Percentage of Labor Force for Selected Cities: 1990
Total Percentage of Labor Force
Selected labor
Cities < 15 15 to 29 30 to 44 > 44
Force Minutes Minutes Minutes Minutes
mwwwwwm~
Denton 32,759 49 25 12 14
Carrollton 46,617 21 40 28 11
Coppell 9,707 r2l 46 29 10
Frisco 34161 31 28 20
Gainesville 5,660 18 7 14
Keller 7,182 32 31 22
Lewisville 26,609 28 32 25 15
McKinney 91474 44 26 15 15
Plano 68,609 26 37 21 15
Sherman 13,845, 57 28 5 10
cwpged by the city of Denton mannins end Dere"mt Depertowt mini 1990 ctma data,
21
COMMUTING CHARACTERISTICS
1990 CENSUS
Commuters Leaving Denton
Worked in City of Denton 22,276 66.421
Worked outside City of Denton 11,265 33.581
g
COMMUTER INFORMATION FROM DENTON'S LARGEST EMPLOYERS
TOP EMPLOYERS TOTAL EMPLOYEES EMPLOYEES
IN THE NUMBER OF LIVING IN COMMUTING TO
CITY OF DENTON EMPLOYEES DENTON DENTON
*UNT 1839 1339 500
734 274
**TWU 889 558 331
634 374
PETERBILT 1018 218 800
214 794
***DENTON 725 375 350
COUNTY 524 484
CITY OF DENTON 838 503 334
604 404
NOTESr
* Sourcer UNT data was gathered from 1992-93 Student
Association Directory. In addition to the 1839 employees
reporting an address, there were 628 employees that did
not report any address. This number only reflects the
number of employees listed in the directory and does not
include teaching assistants, teaching fellows, etc.
Sourcer TWU Human Resources Department. TWU data was
based on full time staff and faculty only.
Sourcer Denton County Personnel Department. The total
number of Denton County employees reflects only those
Denton County employees that work within the Denton city
limits.
FY 1993 Sales Tax Growth
Total Sa'o. Tax Growth 11.96%
5 - 6% Electric/Gas Sales Tax
(repeal of exemption effective January 11 1993)
1/2 - 1% Audit Adjustment
2% Exposition Mille Factory Stores
2 - 3 1/2% Inflation
it Other Growth
Estimates Only
Electric/Gas sales estimate based on City's total sales
Audit estimate based on past history
Exposition Mille sales based on percentage of total zip code
Other growth based on inflation
1
DENTON BUSINESS SAMPLE
REDUCTION IN PROPERTY TAXES
.r 1993 APPRAISED VALUES
TOTAL PROPER
TYPE OF REAL , PERSONAL APPRAISED I TAX BILL TAX BILL TAX
BUSINESS PROPERTY PROPERTY VALUE 0.7476 5946 SAVINGS
UtIltyC0 f26a8, 1 $31,920,510 $37,600,321 $261,260 1223735 637,542
Not iW A 615.54zm $4,1111000 (20,136,070 $155,002 8125.361 151,721
ManulactvWA $7,233,110 $5135,164 (15,550.651 $117,195 $05216 923,075
Wife Relailer A • 513,152,600 f0 113,152,590 $!00613 $60,030 1120,581
Hot U18 810,022,710 $1,821,013 $12,5/9,755 193060 $74,656 110,201
ManUrictaw 8 $7,060,353 51,728 537 111,750.090 566,169 $70.132 $16,037
Grocer Chin $6.056,460 13,270,776 $11,336,256 961,164 107,130 $171311
Manu acu r C $2,379,177 $0,360,6121 110759,710 $60.472 $61.010 116,462
Manufectlaar 0 15.145 506 $5 282,714 510 726 260 $80 237 $63823 $16.4141
La~ Retuler B $4,573,262 /0 $1.3733111 $32,75' $26817 16801
DltcOUniStora 13,/75,602 12.079603 15555,405 $41,540 $53,019 16.500
Grocer Stae _ $2605601 81,26020 $3875,160 1121,062 123053 85,029,
Budding Supplits 11,060,314 11,421,202 $2501,5161 $16,709 814,8821 83,8271
2epartmentSIW6A so, 5294.039, $291,056 $2.199 f1,740r $450
Ratlauranl A 1340,864 i $96215 $445 1091 63.3511 1~ - 1658,
Past Pond 1620,659 $13120 1803777 99 $5,1691 - $4,127' $1,061
GdtSwe 150,001 $76,026 $02,035 $1,951 (3938 $1813
Law Office $69,615 1a ,9a5' $75,600 $5581 No i $120
Convenience Store $149,612 178,435 $228,047 $1,706 $1,55? 1 13491,
f51~
0octar'sOffke 11305,813 $300001 $333,613 $2512 81,0261
Department WS ore B 12,360,905 $2,470,155 14,660060 136,318 $26 12 i $7.138
Fletlauranla $339,133 5212571 1571,727 $1,276 63 01 $8751
TOTAL $89,192,193 170,515,950 5169,109,149 11,254,701 1111.006400 1 $258,737
NOTES: Eslimab of prop" tax reduction (153 MIS) Dead on SO" lax IWO' N Jul 1963
Oiparcnent Store A rents property and pays no property lax diec6y
lndivlduel 9%wo m Wgo iet"s A W 8 pay P fsoml Property WA
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CITY OF DENTON ELECTRIC UTILITY
CURRENT VERSUS PROPOSED RATES
Rate Schedule
Proposed Current
t
Rates Rates Increase
Residential - R1
Facility Charge S 6.65 6.50 231%
Energy Charge cents per KWH 4 30 4 20 2.38'6
A~erageCustomer Bill at400KWH;Month 31,45 30.50 3,11'6
Average Monthly Dollar increase 0,95
Residential - R2
Faality Charge S - Single Phase 7.65 7 50 2.00°0
Facility Charge S - Triple Phase 15,30 1500 20006
Energy Chargecents per KWH:
0 - 1,000 KWH (Winter) 4,30 4 20 2 38'6
All additional KWH (Winter) 3.90 3 80 2,63°6
0 - 3,000 KWH (Summer) 5.55 5.45 1,83%
All additional KWH (Summer) 6 15 600 2 $046
Average Customer Bill At 840KWH,Month 68.13 66 27 281"o
Average Monthly Dollar Increase 1.86
General Service Largo - GSL
Facility Charge 60,00 60,00 00014
Demand Charge$ per KW 9,50 9.00 5,56%
Energy Charge;cents per KWH 1.40 1.40 0.0056
Riders: Energy Charge/cents per KWH
For Primary Service 1.30 1,30 00006
For Primary Service & Ownership 1.10 1.10 0.00'0
Bill at 1000KW Demand and 365000KWHr'Month 21,60500 2U.740 00 4.17'6
Average Monthly Dollar Increase 865.00
General Service Small - GSS
Facility Charge $ - Single Phase 15.00 15.00 0.00°6
Facility Charge $ - Triple Phase 20.00 2000 00006
Demand Charge,$ per KW 7 .SO 700 7A436
(First 20 KW not Bifled)
Energy Charger'cenls KWH (0 - 2500) 6.70 6.56 2.1316
Energy Charge All additional KWH 3.35 3.50 -4 29°6
Bill at 90KW and 35000KWKMonlh 2,61600 2.562.00 4.3206
Average Monthly Dollar Increase 34.00
Experimental Weekend Rate - EWK
Facility Charge $ - Single Phase 22.00 1500 4667'6
Facility Charge $ - Triple Phase 27.00 2000 35 0036
Demand Charge,$ per KW 600 5 60 7.14°6
Demand Charge: (First 20 KW not Billed)
Energy Charge,cents KWH (0 - 2,500) 6.70 6.56 213'6
All Additional KWH 3.35 3.50 -4.29°6
Local Government - G1
Facility Charge S - Single Phase 1500 15.00 0.0036
Facility Charge $ - Triple Phase 20.00 2000 0000,
Demand Charge) per KW 6,25 6.00 4,17'6
Energy Charge,'cents per KWH 3.00 2.88 4.17'6
CITY OF DENTON ELECTRIC UTILITY
CURRENT VERSUS PROPOSED RATES
Rate Schedule Proposed Current
_Rates Rates Increase
Residential Time of Use - TR
Facility Charge S -Single Phase 15 30 15.00 2 0006
Facrtity Charge S - Triple Phase 20.40 2000 2.0006
Energy Charge cents per KWH On Peak 25 30 24.80 2,02°6
Energy Charge,cents per KWH 01 Peak 1,40 1.40 0.000,6
General Service Time of Use - TGS
Facility Charge $ 70,00 70.00 4.00%
Demand Charge!$ per KW On Peak 10,30 10.00 3.0006
System Demand Charge,$ per KW 4.15 4.00 3.75%
Energy Charge'cents per KWH 0,50 0,50 0.00°6
Riders, Energy Charge,'cents per KWH
For Primary Service 0 40 0.40 0.00%
For Primary Service & Ownership 0.20 0.20 0.00°a
Street Lighting - LS
Sodium
100W Facility Charges 4.85 4.75 2.11%
250 W 6.90 615 2,22°6
400 W 8.65 8.50 1.76°:
Mercury;
175W Facility Charges 5.60 510 1,82°6
250 W 6.65 6.50 2,31 06
400 W 8.40 8,25 1 8236
1.000 W 15.30 1500 2.00°6
Energy Cost = Monthly Bulb Wattage Factor x
Current Energy Cost Adjustment
Monthly Bulb Wattage Factors:
100 W 48.00 48 00 0.0006
25o w 105.00 105.00 0,0086
-:0 W 159,00 159.00 0.00°6
Mercury:
175 W 70,00 70.00 0.0006
250 W 9800 98.00 0.00°6
400 W 15300 153.00 0.00°6
1.000 W 380.00 380.00 0 0006
Other Lighting - LO
Energy Charge/cents per KWH
26O W Sodium 5.25 5.14 2.146,
40O W Sodium 5 25 5.14 2 14%
40O W Mercury 5,25 5.14 2 14°6
1,000W Mercury 5,25 5.14 2 1446
Monthly Bulb Wattage Factors:
25O W Sodium 105.00 105.00 0.0006
40O W Sodium 159,00 159.00 0.00°,6
400 W Mercury 153.00 153.00 0.00%
1.000W Mercury 360.00 380.00 000010
Traffic Lighting - LT
Energy Charge/cents per KWH 5.15 5,14 0.19°6
CITY OF DENTON ELECTRIC UTILITY
CURRENT VERSUS PROPOSED RATES
Rate Schedule Proposed Current
Rates Rates Increase
De.orative_Lightin9 - OL
Facility Charge S 3.80 3,70 2,70%
KWH per Customer 4,25 4.15 2.4106
Energy Charge - Monthly Bulb Wattage Factor
x KWH per Customer.
Dawn to Dusk - DID
Sodium
10O W Facility Charges 7,65 7.50 2.00°6
250 W 9.95 9.75 2.05°',
400 W 12,25 12 00 2,08'6
Mercury.
175W Facility Charges 6.40 6.25 2 4006
250 W 7.45 7,25 2.76%
400 W 8.25 8.00 3.13%
Energy Cost = Monthly Bulb Wattage Factor x
Current Energy Cost Adjustment
Monthly Bulb Wattage Factors:
100 W 48.00 48.00 0001,0
250 W 105.00 105.00 0.00°6
400 W 159.00 159.00 0.00%
Mercury:
175 W 7000 7000 0.0006
250 W 98.00 98.00 0,00 e
400 W 153.00 153.00 0.00%
1.000 w
TemporaryService - TI
Facility Charge S - Single Phase 15,00 15.00 0 0006
Facility Charge $ - Triple Phase 2000 20.00 0,0046
Energy Charga,cents per KWH 6,70 6.56 2.1306
Labor,Equipment S per Hour - Regular Time 60.00 60.00 0.00°6
Labor,Equipment S per Hour - Overtime 75.00 75.00 0,0056
Interruptible Primary Servlce - PI
Facility Charge $ 70.00 7000 0,0006
Demand Chargers per KW 4 AS 4 00 3 7516
Energy Charge,rcents per KWH 0 20 0.20 0 00°C
Athletic Field - AF
Facility Charge $ - Single Phase 20.00 20.00 0.0066
Facility Charge $ - Triple Phase 30.00 30.00 0 00
Demand Chargers per KW:
October through May 1.10 1 10 00%
June through September ON Peak 1.10 1.00 10 00%
Juno through September On Peak 4.65 4.50 333%
Energy Charge/cat is par KWH;
October through May 375 315 0.00%
Juno through September Ott Peak 3 ,75 3.75 000
'6
June through September On Peak 7 50 7 50 0001's
CITY OF DENTON ELECTRIC UTILITY
CURRENT VERSUS PROPOSED RATES
Rate Schedule -
Proposed Current
_ Rates
Rates Increase
Unmterruptib-le -Power Supply_~_UPS
Facility Charge $ 2S0 W Power Standby Unit
Facility Charge 5 1.200 W Power Standby Unit 31 1 770
7 55 1 94 %
Installation Charge $ . 55 55 30 95 1 9 4 6
25.50 2500 20046
Standby,_S_qp Ip orn ntary, d, Maintenance Service `ES
Fac; ity Charge S - Primary Service
Facility Charge $ - Secondary Servke 256000 00 25 00 0,00 e
Demand Charge Primary,$ per KW On Peak It .35 11 11 00 000°`,0
Demand Charge Primary$ per KW Ott Peak 00 3. 5% 415 Demand Charge Secondary$ per KW On Peak 4.00 3.75
Demand Charge Secondary,$ per KW ON Peak 11 1, 35 95 11.00 3 t8°b
Energy Charge a Prima 4'15 0 3 75',0
9Y 9 ryicents per KWH Emergency 5,29 5 5. 220 0,0006
Energy Charge Primary/cents per KWH Non-Emerg 0.20
Energy Charge Secondary,lcents per KWH Emer enc 0 20 0.000,0
Energy Charge Secondarycents per KWH Non Eme~ 5.30 5 30 0 00%
9 0,50 0.50 0.0006
nduWial;Economic Development Rider =1DR
Reduction to System Demand,
Year 1 50.00919 50,00% 0.00%
Year 2 40.00% 40.00%',0 0.0066
Year 3 30,00% 30,00% 0.00°'e
Year 4
200096 20.00% 0000°C
Year 5 10.00% t0.00"° 0 00°5
Thermal Store a Incentive - TS
KW Demand shifted to OM Peak
First S00 KW - $ per KW 250,00 250.00 0 0036
All Additional KW - $ per KW 125,00 125.00
0.00°a
Energy_Cost Adjustment - ECA
ECA Winter/cents per KWH 1.90 1.80 5 ,56°,0
ECA Summer/cents per KWH 1,90 1 80 5 5616
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CITY OF DENTON WATER UTILITY
CURRENT VERSUS PROPOSED RATES
Rate Schedule proposed -Curierii
Rates Rates Increase
Residential - WR _S WRN
34 ter - - 9.15 8 80 3 98'0
1' Meer 10.95 10 50 4 29013
1 1 ~ 2" Meter 15.60 15 00 4.00'16
2" Meter 17.40 16.75 3 88%
All Gallons Block Rate - Winter 2.50 2,40 4.1 7°0
First Block Rate - Summer 2 50 2.40 4.17'0
Second Block Rate - Summer 3.35 3 35 0 00"0
Third Block Rate - Summer 4 20 4.20 0.00=0
Average Customer Bill At 8,500 Gallons;Month 3040 29 20 4 11'6
Average Monthly Uollar Increase 1.20
Residential outside Corporate Limits= WRE
'0
3,41 -Wlt r 11.15 11 15 000
1" Meter 12,60 12.25 2 86'13
1 112" Meter 17.90 16.70 7 19%
2" Meter 20.00 2000 0.000,0
000%
All Gallons Block Rate - Winter 2 95 2.95 0 OU00
First Block Rate - Summer 2,95 2 95 0 00°'0
Second Block Rate - Summer 4.00 4.00 000,10
Third Block Rate - Summer 5.00 Soo 0 00%
Commer~cialllndustrlal - WC & WCN
314" ter 19.40 18.45 5 t 51-
11 Meter 21.30 2025 ,5.19°0
1 112" Meter 24.75 23.50 5.32°6
2" Meter 30.45 28.65 5 55'0
3" Meter 65,00 60.00 8 330
4" Meter 120,00 110.00 9091,10
6" Meter 150.00 140.00 714'0
8" Meter 175.00 165.00 6.06110
Volume Charge/1000 Gallons 2,78 2 65 3 7710
Average Bill At 40,000 Gallons/Month 131,30 126.25 4.000,13
AV rage Monthly Uollar increase 5.04
Commercial outside Corporate Umits - WCE
3/4" Neter 20.00 1855 7 82°13
1" Meter 22,00 20.50 7 32113
1 112" Meter 28.00 25 95 7 90°6
2" Meter 32,00 29.50 8 47'.0
3" Meter 87.90 67,90 000,10
4" Meter 147,40 147.40 0 0036
6" Meter 168,90 188.90 0.00'0
8" Meter 214.05 214.05 0.00'13
00041,
Volume Charge11000 Gallons 3.15 3.15 000"o
0000,10
Wholesale - WWI & WW2 0 000;
Facl iti ty Charji- WWT 155.00 155 00 0000"
Facility Charge %M2 170.00 17000 000010
WWI Demand/1000 Gallons 19.42 19.42 0 00'6
WW2 Demand/1000 Gallons 27.34 27.34 0 00%
Readiness to serve+1000 Gallons 04691 04862 -3 5206
Volume Charge/ 1000 Gallons 0 95 0.95 000,10
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CITY OF DENTON WATER UTILITY
CURRENT VERSUS PROPOSED RATES
Rate' Sch edule T Proposed Current Increase
Rates Rates
Government - WG
34" Meter 14.25 1360 4,78 o
1" Meter 1590 15.05 5 656,10
1 ii2" Meter 19.75 1865 5.90°!6
2" Meter 2615 2365 1311%
3" Meter 56.00 5275 6.16'10
4" Meter 93.00 9265 0.00%
6" Meter 122.00 11665 4.59°10
8" Meter 143.00 136.25 4 95%
Volume Charge/1000 Gallo,is 2 70 2.60 3 8535
Local Government .Irrigation_WGI & WGN
3 4' Meter 1425 13.60 4 78'0
1" Meter 15 90 1505 5.65%
1 1l2" Meter 19.75 1865 5906'0
2" Meter 26.75 23 65 13 11016
Volume Charge/1000 Gallons (Interruptible) 2,30 2 20 4 551,16
Volume Charge/1000 Gallons (Non-Interruptible) 2,70 2.60 3 85%
Sprinkler Charge Per 100 Square Feet 0.00 0.00 0.00%
Adopt A S of - WGA
314" 1GTeter (Billable 3 times annually) 9.15 8.80 3 98x6
1" Meter 10.95 10,60 4.29%
1 112" Meter 15.60 1500 4 00%
2" Meter 17.40 16,75 3 88010
Volume Charge/1000 Gallons 2.70 2.60 3.85%
Government Raw Water - WGU
aCi ity Charge 14710 142.00 3870%
Volume Charge/1000 Gallons 1.45 1.40 3 570,10
Metered Hydrant - WFH
acihty Charge 31,20 30.00 400%
Volume Charge/1000 Gallons 2,75 2.65 3.77%
Deposit 65000 650.00 000%
lnstallation Charge 5200 50.00 4.00%
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CITY OF DENTON WASTEWATER UTILITY
CURRENT VERSUS PROPOSED RATES
fro pused-- - -
Curre"nt e
_ Rates Sates Increase
Residential - SR
Facility Charge-- 5.61, 5,00 1300110
Volume Charge/1000 Gallons 215 1.90 13,16%
Average Customer Bill At 6100 Gailons/Month 18 77 1659 13.14°0
Average Monthly Uollar Increase 2.13
Residential without Wa!3r Service - SPIN
Facility -barge (Inside qty) 5.65 5 00 13 0000
Facility Charge (Outside City) 6.50 6.40 1 56'0
Volume Char3e/1000 Gallons Inside City) 215 1.90 1316',0
Volume Char9e11000 Gallons Outside City) 2.50 2.50 0 000b
Residential outside Corporate Limits
an~witF pity -&-Der Water -S-Nice - SRW
Facility Charge 6 50 6.40 1.56%
Volume Charge/1000 Gallons 2.50 2,50 0 0096
Regular Commercial - SC
Facility haC rge - 14.70 13.00 1308%
Volume Charge/1000 Gallons 2.80 2.45 14.29010
Sampling Charge (As Required) 3500 35.00 000010
Analysis Charge (As Required) 15,00 15.00 000%
Surcharge - See Below
Customer Bill At 32,000 Gallons Discharge/Month 104.30 91.40 14 11%
Average Monthly Uollar increase 12.9U
Commerciadustrlal without Water Service - SCN
aci ity arge ( nsi a it 14.70 13.00 13.0806
Facility Charge (Outside City) 16.30 1440 13.19%
Sampling Charge (As Required) 35.00 3500 00006
Analysis Charge `As Required) 1500 15.00 000%
Volume Charge/1000 Gallons Inside 2.80 2.45 14 2,)%
Volume Charge/1000 Gallons ~Outslcle) 3 20 215 12 28%
Commercial with _ Oedicated Water Meters - SCO
3,4' l+Veter 20.65 18,45 13.0106
1" Meter 22.90 20.25 13.09"0
1112" Meter 2655 2350 12.9890
2" Meter 32,60 28.85 13 00°,
3" Meter 68.00 60.00 13 334
4" Meter 124.50 110.00 13.16%
6" Meter 158,00 140,00 12.86%
8" Meter 186,50 165.00 13.03%
Sampling Charge (As Required) 3500 35.00 0.00%
Analysis Charge ((As Reqquired) 1500 15,00 0.00°'0
Volume Charge/1800 Gallons 2,80 2.45 14.29%
Surcharge - See Below
RReeou_lla~r.__Coommercial outside C_or~ato Limits
and ith City~?f-Denton ater Service - SCW
Facility Charge 16.30 14 40 13 190,16
Volume Chargel1000 Gallons 3.20 2 85 12 2816
Sampling Charge (As Requlred) 35,00 35 00 0.0000
Analysis Charge (As Required) 15,00 1500 0 00%
Surcharge - See Below
CITY OF DENTON WASTEWATER UTILITY
CURRENT VERSUS PROPOSED RATIES
`Proposed Current 6
___Rates _.__---Rates Increase
Pretreatment SPT (SPA or SPB)
Facility Charge _ 1470 13,00 13,08°6
Volume Charge/1000 Gallons 2.80 2.45 1429%
Administrative,,Program Categorical (SPA) 365.00 320.50 13.88°10
Administrative, Program Non-Categorical (SPB) 4200 3700 1351%
Sampling Charge 35 00 35.00 0 0006
Analysis Charge 15.00 15.00 0 C0%
Surcharge - See Below
Metered Wastewater SM
i acility Charge (Inoide City) 182.00 161.00 13 04=6
Facility Charge (Outside City) 210.00 195 00 7 69'6
Volume Charge/1000 Gallons Inside 2.60 2 45 14 2906
Volume Charge/1000 Gallons ~OutsiJe) 3 20 2.85 12 2806
Sampling Charge 35.00 3500 0.00%
Analysis Charge 15.00 15..") 0.00%
Surcharge - See Below
Metered Wastewater CCat_egoriri_cal~- SMA
F ci iti y C-harge (ins a iC ty) 182.00 161.00 13.040,6
Facility Charge (Outside City) 210 00 195.00 7.69%
Volume Charge/1000 Gallons (Inside) 2.80 2.45 14 29%
Volume Charge/1000 Gallons (Outside) 3.20 2 85 12.28°6
Administrative/Program Categorical 36500 320 50 13 8806
Sampling Charge 35.00 3500 000;6
Analysis Charge 15.00 1500 0009,
Surcharge - See Below
Metered Wastewater Non-Categoilcal - SMB
Facility arge (Inside ity) 182.00 161.00 1304%
Facility Charge (Outside City) 210.00 19500 7 69%
Volume Charge/1000 Gallons Inside) 2.60 2.45 14 29%
Volume Charge/1000 Gallons (Outside) 3.20 2 85 12 29%
AdminisVative/Program Non-Categorical 42.00 3700 13.510%
Sampling Charge 35.00 35.00 000%
Analysis Charge 1500 15.00 0 00%
Surcharge - See Below
Eating _Places - SEP
Facility Charge 1410 1300 13080,16
Volume Charge/1000 Gallons 3.85 3.40 1324%
Sampling Charge (As Required) 3500 35.00 000%
Analysis Charge (As Required) 15,00 15.00 000%
Surcharge - See Below
Equipment Services - SES
Facil` s a gra a 14.70 13,00 11080,6
Volume Charge/1000 Gallons 3.85 3.40 13.24%
Sampling Charge (As Required) 35.00 3500 000%
Analysis Cherg• (As Required) 15.00 15,00 0 00%
Surcharge - See Below
CITY OF DENTON WASTEWATER UTILITY
CURRENT VERSUS PROPOSED RATES
------iru~rnt 'o
_-proposed e
Rate ScFedufe Rates Pates Increase
Government_-__SG 14.70 13 00 13 08'~
Facility Charge 2 45 2.15 13 95°b
Volume Chargel1000 Gallons
Surcharge - See Below
Industrial _Water_-_SGE 100.00 0.00°6
Facility Charge 11pppp 0 1 10 0 00%
Volume Charge/1000 Gallons
Surcharge - See Below
Wholesale__- SSC 75 00 75.00 O CO°~
Viuarge 1.85 0 00%
Vollumm che Charge11000 Gallons 1 85
Surcharge - See Below
Surcharge 000207 0,00183 13,00°0
Biochemical Oxygen Demand - BCD 0 00257 0.00227 13.00°/a
Total Suspended Solids - TSS
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INFORMATION FROM OTHER CITIES
Amarillo
The City of Amarillo held an election in 1989 to increase sales tax
one half cent to reduce property taxes. Amarillo used the sales
tax to reduce the property tax rate by thirteen cents. The City of
Amarillo is a major retail center for the Texas panhandle and
experiences a large influx of out-of-town shoppers. Amarillo's
property tax base had been declining for a number of years. This
measure was initiated to become less reliant on the property tax
base.
Mesquite
The Cit.; of Mesquite held a sales tax election in 1991 to reduce
property taxes. The City Council appointed a citizen committee to
run the campaign. The Chamber of Commerce also gat involved and
supported this issue. The additional sales tax generated allowed
the City Council to reduce property taxes by 10 cents. Mesquite
estimated that approximately 68% of Town East Mall shoppers came
from out of the city.
Bryan
The City of Bryan held a successful sales tax election in 1990 and
reduced property taxes by approximately 10 1/2 cents. Bryan had
been losing property values every year while sales tax revenue
thise election nh to cities
held atBryan.
then same Collee Station
The planned
nformation
attached shows the informal study conducted by the City to estimate
effects on Bryan citizens. Both Bryan and College Station felt
that the voters passed this initiative because of the type of
community Bryan-College Station is with a major university and as
a retail center for the area.
College station
The City of College Station used the additional sales tax to reduce
property taxes in 1990. However, the election was premised on the
amount to be designated to reduce electric fund transfers to the
general fund and for street reconstruction and maintenance instead
of reducing property taxes. The utility rates in College Station
were very high. The tradeoff for the citizen was the City's pledge
to reduce transfers from the utility fund to the general fund,
thereby reducing utility rates, I have attached an example of the
information the City of College Station used to educate its
citizens, Although College Station did not reduce property taxes,
the Information distributed is helpful.
Effect on Capital Improvements
None of the cities indicated any effect on capital improvements
because of an additional sales tax to reduce property taxes. By
State law, a city cannot pledge anticipated revenue to pay bonds or
other debts. However, in the fourth year and thereafter, excess
revenue is placed in a fund to pay debt service for debts already
incurred.
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CITIZENS' SALES TAX ADVISORY COMMITTEE
LIST OF INFORMATION NEEDED
TIME LINE FOR MEETINGS
September 15 5:00 p.m. Civil Defense Room - City Hall
List of cities that passed and failed measure - redo list with
preface about no list of cities that failed
- analysis of why it passed or failed
Effect of property tax reduction on industries - Vic
Effect on capital improvements in cities which pass measure - list,
assign committee members
Effect of outlet mall on sales tax revenue
Number of renters, home owners
Influx/Outflux of commuter, etc.
Utility Rate Structure
Other than reserves, other revenue sources to be tapped if sales
tax revenue shortfall
Mesquite Chamber of Commerce/Retailer Presentation
September 22 5:00 p.m. Civil Defense Room
Discussion of Mesquite's Experience
Analysis of why it passed
Effects on retailers whero tax passed
Dr. Bernard Weinstein, Director
Center for Economic Development and Research, UNT
September 29 5:00 p.m. Civil Defense Room
11 What are the economic effects of sales in Denton with an
increase in sales tax?
Primary, secondary, tertiary market of Denton
Effect on the shopper
Leakage of sales out of Denton
- current and effect of 1/2 cent
2. Who pays more, who pays leas, and by how much?
Average family/homeowner/renter/business pays in property
tax/sales tax
Effect of 1/2 cent sales tax increase and property tax
reduction on taxpayer
- homeowner, renter, student, commuter, business etc.
Committee Discussion
October 5 5:00 p.m. Civil Defense Room
Re ort Due To City Council
Octo er 15
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CITIZENS' SALES TAX ADVISORY COMMITTEE
AGENDA
September 22, 1993
5115 P.M.
Civil Defense Room
F. City of Mesquite's Experience
Mr. Lynn Gibbons, Executive Director
Mesquite Chamber of Commerce
Mr. Mike Anderson
City Council Member and Owner, Anderson Realtors
III Discussion of Information from Other Cities Polled by
Committee
111. Review of Answers to Questions
IV. Timeline and Agenda for Future Meetings
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CITIZENS' SALES TAX ADVISORY COMMITTEE
AGENDA
September 22, 1993
5115 P.M.
Civil Defense Room
Item 1
Item 1 includes a chart of revenues of the Recreation Fund. Rich
Dlugas, Director of Parks and Recreation, has also included a
memorandum explaining the philosophy of this fund.
Item 2
Appraised values of multi family and single family housing units
according to the Denton Central Appraisal District.
Information comparing the breadown in property values from 1992 to
1993 will be passed out at the meeting on Wednesday.
Item 3
Results from two Golden Triangle Mall shopper surveys indicating
where shoppers reside.
Recreation Fund
Sources and Uses of Funds
Revenues
$600,709
Aqualic$ 7.2%
Goldfield Censer 9.57)
i E Senior Center 3,3%
N. t_-skos Center 9.4%
~ ,~ii j. l`~•i,~ `li
Civlc Center 4,6%
K+d' Prog. 50 57, Other 3.3%
Special Protects 3,5%
l?enla park Center 3,7%
Morkohng 5.0%
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CITY Of DENTON, TEXAS MUNICIPAL BUILDING / 215 E. MCKINNEy / DENTON, TEXAS 76201
M E M O R A N D U M
TO: Catherine Tuck, Administrative Assistant
FROM; Rich Dlugas, Director of Parks and Recreation
DATE: September 16, 1993
SUBJECT: Recreation Fund
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The Recreation Fund was established to give the Parks and Recrea-
tion Department a method to fund certain programs that are self-
supporting in nature. All programs that operate out of the
Recreation Fund that use City Facilities charge an Administrative
Fee which goes back to the General Fund.
Full funding from the General Fund is provided for the general
operation of the recreation centers, senior Center, Civic Center
and all parks. Full funding from the General Fund also covers the
cost of community-wide special events unless sponsors are found to
fund all or a portion of the casts. It is intended that all other
classes or programs be self-supporting. Class costs range from
$4.00 to $87.00 which includes costs of instructors, supplies,
equipment and administrative fees, Examples of classes operating
out of the Recreation Fund are fitnoss programs, swimming lessons,
camps, trips, after school programs and gymnastics. Financial
assistance is available to individuals that are unable to pay for
these programs. Special interest facilities like the tennis center
and pool charge fees for admission or services that will allow the
department to cover a minimum of 50% of the operation and
maintenance cost.
Rich Dlugas, Director of Parks and Recreation
RD:ps
AJJ007DO
8171566.8200 01FW METRO 434.2529
CITY OF DENTON, TEXAS
ANNUAL PROGRAM OF SERVICES
RECREATION FUND FUNDING PHILOSOPHY
The Recreation Fund was established in the 1982.83 fiscal year to give the City a method to fund Leisure
Services programs that are Self supporting in nature and difficult to estimate in the General Fund budget. This
Fund also allows for the supportnf new programs and activities and development of facilities that will pay back
the cost to the Fund over a period of years. All classes that operate out of the Fund that use City facilities
charge a small administrative fee which goes back to the General Fund to cover overhead expenses associated
with coerating facilities.
A Basic Programs and Facilities;
1) Full funding from the General Fund will support the Recreation Centers, Senior Center and Civic
Center.
2) Full funding from the General Fund will cover the cost of community wide special events, unless
sponsors are found to fund all or a portion of such costs. Examples of these would be the 4th of July
Celebration, JazzFest, Halloween, etc,
3) Specific programming expenses which are approved in the General Fund budgeting process for
youth, seniors, or the disabled include Kid Connection Camp, therapeutic recreation camp, A Very Special Arts
Fair, Special Olympics, and general therapeutic monthly activities. All sport field maintenance is budgeted in
the General Fund within the Parks Maintenance Division.
4) It is intended that all other classes and programs be sell supporting, but if a non subsidized
program is determined to be too expensive for the public due to its fee structure, it can apply to the General
Fund for support during the budgeting process. The degree of support will be determined by City staff and
City Council. All Parks and Recreation general administrative staff will be funded In the General Fund.
9. Special Interest Programs and Facilities:
t) Programs, classes and events that are for specific recreational interests will be budgeted and
funded from the Recreation Fund. Currently these programs include tennis programs, gymnastics programs,
swimming programs, after school programs, summer camps, golf programs, fitness programs, single adult
programs, adult sports programs, teen programs and fee based therapeutic classes.
2) It is Intended, unless otherwise approved, that fees and charges for these classes will be
established to cover the costs of all Instruction, equipment, supplies and serviceladministrative fees.
31 When a staff member who Is funded out of the General Fund teaches or leads a class or activity
funded out of the Recreation Fund, any staffing and Instruction fees charged will go back to the General Fund.
Examples are senior citizen programs and therapeutic programs.
41 Special interest facilities will charge fees for admission or services that will recover a minimum of
50% of operations and maintenance costs, Currently, these facilities include the tennis center and swimming
pool.
5) Other special interest areas that will establish fees to cover 100% of the cost will include the golf
driving range, concession stands, and group trips coordinated by travel agencies.
276
'Dedicated to Duality Servka'
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1993 APPRAISED VALUES
RESIDENTIAL
1993 APPRAISED RESIDENTIAL 1993 TAXABLE
VALUE EXEMPTIONS VALUE
SINGLE FAMILY $913,545,003 ;42,248,168 $821,348,800
Homestead
$49,245,427
Over 65
;702,618
Disabled Vets
$92,196,203
Total
Exemptions
MULTI FAMILY $181,938,506 51811938,506
TOTAL
RESIDENTIAL $1,095,483,509 $1,003,287,306
Source: Denton Central Appraisal District, 1993 Cert!fied Roll
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SHOPPER SURVEYS
GOLDEN TRIANGLE MALL
March 1993
Denton Citizens 54%
Outside Denton 468
76201 288 Denton
76205 188 Denton
76240 5% Gainesville
76203 4% Denton
75067 48 Lewisville
4% Aubrey
76208 4% Denton
Other 338
August 1993
Denton Citizens 708
Outside Denton 308
ZIP CODE
76201 378 Denton
76205 188 Denton
76208 138 Denton
76226 7% Argyle
76207 2% Denton
75067 28 Lewisville
76240 18 Gainesville
75028 It Lewisville
Other 19%
Sources Golden Triangle Mall
CITIZENS' SALES TAX ADVISORY COMMITTEE
AGENDA
September 29, 1993
5:15 p.m.
Civil Defense Room
I, Receive a Report on the Economic Impact of a Half Cent
Sales Tax to Reduce the Property Tax
Dr. Bernard Weinotein, Ph.D.
Director
Center for Economic Development and Research
University of North Texas
(Report will be distributed at meeting)
II. Questions and Answers
III. Discussion of Half Cent Sales Tax to Reduce Property Tax
IV. Discussion of Report to City Council
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PROPERTY TAX REDUCTIONS
Median Value of House in Denton: $76,400
Assuming ;5,000 Homestead Exemption - 51000
Total Value ;71,400
Assessed Value X Tax Rate = Tax Levy on House
Current Tax Rate ;71,400 4 100
X .7180
; 512.65
15.3 Cent Rollback $710400 i 100
X .5650
403.41
Savings t 109.24
Effective Tax Rate $71,400 t 100
X .7479
; 534.00
16.75 Cent Rollback ;710400 i 100
X .5949
; 424.76
Savings 109.24
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CITIES WITH AN ADDITIONAL SALES TAX TO REDUCE PROPERTY TAX
CITY POPULATION
Abbott 314
Abernathy 2720
Abilene 106,707
Alice 19,788
Alpine 5,637
Amarillo 156,615
Angus 363
Athens 100967
Ballinger 3,975
Beaumont 113,352
Beverly Hills 2,048
Big Spring 23,093
Blanco 1,238
Boerne 4,800
Borger 150675
Boyd 1,041
Bra,oria 2,717
Bridge City 8,010
Brownsville 102,000
Brownwood 18,387
Bryan 55,002
Burnet 3,423
Caldwell 31181
Caney City 170
Canton 3,000
Carls Corner 94
Carrizo Springs 50745
Carthage 6,496
Chandler 1,630
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Cleveland 7,124
Coleman 5,410
College Station 52,456
Colorado City 40749
Conroe 28,000
Corrigan 1,764
Corsicana 22,911
Crosbyton 2,026
Cuney 170
Daingerfield 2,572
Del Rio 30,705
Devine 3,928
Diboll 4,341
Dickens 322
Dilley 2,632
Dimmitt 4,408
Early 2,380
Edinburg 29,885
Edna: 5o343
E1 Campo 10,511
Fairfield 3,234
Falfurrias 5,788
Farwell 1,373
Flatonia 11295
Fort Gates 818
Fredericksburg 61934
Galveston 59,070
Gatesville 11,492
George West 2,586
Glen Rose 1,949
Goliad 1,946
Golinda 347
Graford 561
Granberry 4,045
Greenville 23,071
Gun Barrel City 3,526
Harker Heights 12,841
Harlingen 48,735
Haskell 3,362
Hemphill 1,182
Hempstead 3,556
Henderson 11,139
Hewitt 8,983
Hidalgo 30292
Hillsboro 7.092
Hudson Oaks 1,024
Huntsville 27,925
Ingleside 51696
Ingram 1,408
Johnson City 932
Jourdanton 31220
Kaufman 5,238
Kemah 1,094
Kennedale 41209
Killeen 680000
Kingsville 25,276
Kyle 2,225
Lacy Lakeview 31617
LaMarque 14,120
Lake Bridgeport 322
Lampasas 61382
Levelland 13,986
Livingston 5,019
Llano 2,962
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Lometa 625
Longview 70,311
Los Fresnos 2,473
Lufkin 30,206
Lytle 2,255
Madisonville 3,569
Marble Falls 4,007
Marion 984
Marlin 6,386
Marshall 23,682
Mathis 5,423
McAllen 84,021
Meadows 4,606
Memphis 2t465
Mercedes 12,694
Mesquite 106.411
Mexia 6,933
Midway Unincorpor
ated
Mineral wells 14,870
Mission 28,653
Mount Pleasant 12,291
Mustang 35
Nazareth 293
Nixon 1,995
Oak Hidge North 2j454
Onalaska 728
Orange Grove 1 175
Palestine 18,042
Pampa 19,959
Paris 24,699
Pearsall 6,924
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Pecos City 12,069
Pharr 32,921
Pinehurst 2,82
Plainview 22,000
Pleasanton 7,678
Port Isabel 41467
Port Lavaca 100886
Premont 2,914
Presidio 3,072
Progreso Lakes 154
Quitague 513
Ralls 2,172
Raymondville 81880
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Rhome 605
Riverside 451
Robinson 7,111
Rosenberg 20,183
Rotan 1,913
Round Rock 36,139
Runge 1,139
San Augustine 2,337
San Benito 20,125
San Felipe 618
San Marcos 28,743
Seadrift 11277
Seven Points 723
Silsbee 6,368
Smithville 3,196
Snyder 12,195
Somerville 11542
South Padre Island 11677
Springtown 1,781
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Stamford 3,817
Stephenville 13,502
Sugarland 34,875
Sweetwater 110967
Teague 3,268
Temple 4611.°l
Terrell 12,490
Texarkana 31,656
Texas City 41,500
Tomball 6,370
Trinity 2,648
Tulia 4,703
valley view 640
Vidor 10,935
Village of Bee Cave 241
Waco 102,271
Waxahachie 17,984
Weatherford 14,804
Webster 5,315
Wellington 21456
Weslaco 21,877
Wharton 10,200
Whitehouse 4,032
Whitney 11626
Willow Park 2,423
Wills Point 2,986
Winters 20905
Woodville 2,636
Woodway 8,695
2avalla 701
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COUNTIES ADOPTING ADDITIONAL 1/2 PERCENT SALES TAX
Anderson Falls Medina
Angelina Fannin Midland
Aransas Fayette Milam
Archer Franklin Mitchell
Atascosa Frio Morris
Austin Gillespie Navarro
Bailey Gonzales Orange
Bandera Gregg Palo Pinto
Bastrop Grimes Parker
Bee Guadalupe Polk
Bell Hale Rains
Blanco Hamilton Real
Bosque Hardeman Red River
Bowie Hays Runnels
Brazoria Hill Sabine
Brazos Hood San Augustine
Brewster Hopkins San Jacinto
Burleson Houston San Saba
Caldwell Hunt Schleicher
Calhoun Jack Scurry
Camp Jackson Smith
Castro Jeff Davis Swisher
Cherokee Jefferson Titus
;hildress Jim Wells Tom Green
Colorado Karnes Tyler
Comas Kendall Upshur
Comanche Kerr Uvalde
Concho Kinney Victoria
Cooke Lamar Walker
Coryell Lampasas Washington
Crosby Lee Webb
Dawson Leon Wharton
Deaf Smith Liberty Wise
Delta Lubbock Wood
Dickens Mario Young
Dimmit Maverick
El Paso McCulloch
Erath McLennan
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DISCUSSIONS WITH OTHER COMMUNITIES
Abilene (Joe Alford)
Joe Alford called the owner of three large businesses. The owner
initially was against the proposal but shifted his thinking in
support of the measure. There has been no effect on his
businesses.
College Station (Joe Alford)
Pleased, stores with higher valued items felt negative effect at
first, no effect on businesses
Greenville (Joe Alford)
No one paid much attention to the election
Killeen (Joe Alford)
Transient group of people, popular with people that owned rental
property
Mineral Wells (Joe Alford)
No indication, turmoil in city
Texarkana (JoA Alford)
Good reaction
College Station (Ellen Schertz)
Passing an increase in ad valorem taxes to keep up with bare
essentials (police, fire, etc.)
Home Builders Associations (Ellen Schertz)
Contacted home builders association in 10-15 cities; some were not
aware that the measure had passed, lowered taxes, no great
interest, not much effect
League of Women Voters (Dorothy Damico)
Contacted Leagut of Women Voters in Amarillo, Beaumont, Galveston,
Waco, San Marcos, end Brazos County; little controversy or notice;
caution of regressivity of sales tax, shift to low income renters
Huntsville (Alton Donsbach)
Sales tax revenue has gone up, property values have gone down; held
property taxes down; bond election on same ballot
Beaumont (Tom Sass)
No decrease in retail sales with additional sales tax
College Station (Tom Sass)
No decrease in retail sales with additional sales tax;
underestimated sales tax first year; used portion for utility
transfer and road improvements; incremental increases in property
taxes since election
Port Arthur (Bill Utter)
City has had a bad economy; not sure if the additional sales tax
has had any effect
Amarillo (Bill Utter)
Economic development sales tax passed at same time; have not used
money from economic development sales tax yet
McKinney (Bill Utter)
Economic development sales tax election was defeated before and
recently passed
Hillsboro (Barbara Philips)
Economic development sales tax (1/8) election at the same time as
sales tax to reduce property tax (3/8); proceeds used for street
improvements; economic development funds not used yet; 751 of
shoppers are from out of the city
Killeen (Barbara Philips)
There has been fierce competition for industry in the area; city
wished they had chosen 1/2 cent for economic development instead of
to reduce property tax; could only increase sales tax one half cent
total; property tax rate back up from where it was (election
January 1989)
Temple (Derrell Bulls)
Very strong economy; 18-191 revenue increase; regional shopping
center with many out of town shoppers; did not reduce property tax
but used it for fire, police, street, and economic development; had
a rollback election which failed
McAllen (Derrell Bulls)
601 of retail trado comes from Mexico; regional shopping for
surrounding small towns as well; property tax rate back up to same
level in three years; low voter turnout; half cent economic
development tax has failed two times; suggested packaging two
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elections together if community decides to do both
Mexia (Derrell Bulls)
Half cent election passed by a margin of 3t1; infrastructure paid
by those outside of city; property tax has not gone up
Texarkana (Bill Patterson)
Measure passed by a margin of 211; sales tax has grown each year
(last year 6.51); property tax rate has gone up 3 cents In four
year period] tax rate not at top of list for company relocations;
chamber informal survey was 50-50
Beaumont (Bill Patterson)
Sales tax has provided more revenue than property tax; ongoing
watchdog group of citizens that watch the property tax; no one
fought against the measure in the election; last five years
property tax rates were 69, 541 59, 62, 621 61.5 cents.
Longview (Neil Durrance)
Sales tax to reduce property tax was used for drainage
Improvements; economic development sales tax was passed at the same
time; economy has been depressed by loss of major employer and
downturn in the gas and oil industry
Waco (Bill Luker)
Please see summary attached.
Brownsville (Bill Luker)
Please see summary attached.
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I spoke with the assistant city nanager's office last
week, rhere eras not been a sales tax increase *.o
specifically )ff_et :r~;perty t3AeS for the City of .taco. in
the late 19e0s there was an increase of 1/2 percant in the
:ity sales tax rate. The additional revenue from this
Increase was desi-3nated for street maintenance and
impyovements. Inasmuch a3 the alternative financing far
these activities would be through the sale of municipal
bends paid for by incr?a_ad 3ropart'/ :axes, Lha 311.: tdx
increase was a substitute for hi,aheir property tax rates.
This was confirmed by a conversation with the r-)search
snalyst for the Waco Chamber of Commerce. Inter:Bstingly,
Waco has the maximum salas tax rate of 8 1/4% and hds also
increased property tax ratas each of the last 3 years. At
the sam.a time, Waco has been growing in terms of total
arnployment. However, caution must be used when comparing
waca with possible scenarios for Denton. Most notably. Waco
i3 the center for retail activity in their area - i ::ain
Denton cannot make.
eROWNSVILLE
In :onveriation with a r,!Pi-z;antativa of tha
Brownsville Chamber of Commar,:j, I was informed that the 1r:
w nt sales tax increase was de3iynatsd as fund u1g f..r in
4conomic development corporation to be operated by th- 4:1ty
and Chamber. However. a ovrticn of the new tux r -j;ruu3 wuS
designated for property tax ralisf. This was d ona in
aAchange for Political suppovt for the zaloc tax increase.
According to the chamber repro3ontative, thar.~ was no impact
on retail sales or economic deveivpment that could b3
zpeeifically attributed to this tax change. R,stall :alas
zontinued to increase after the tax increase most probabl,
as a result of increased trade activity between Taxes an,;
flex ico. This individual was not aware of any Lompan,-
daciding to locate to Brownsville because of the d-ac,•aase in
3ffActive property tax rata:.
I hava yat to hear from tho arawnsvilla CiIy H,;nugcr. I
will uNdata this r4prir t ac Coon .a:. I have (nu;v t iwi' n.<C tGn.
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This is a
Once-in-a-Lifetime
Opportunity to Reduce
Your Property Taxes
VOTE YES AUGUST 10TH
for the 1/2% sales tax
r Property tax rates may be reduced as much as 20% if this
optioaa] sales tax is approved by the voters.'
Passage will allow City Council to increase homestead
exemption for senior citizens to $30,000 (an increase of
$15,000).
a If approved, Mesquite's sales tax will still be 1/2% below
most other cities in the metroplex.
' Based on figures prepared by the City of Mesquite.
Paid for by The Citizens for Lower Property Taxes,
Rob Schlegel, Treasurer.
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IMPORTANT TAXPAYER ALERT!
On August 10th the citizens of Mesquite will have the opportunity to cut their property
tares.
Say what?
That's right! By approving the additional one-half percent sales tax, property tares may be
reduced as much as 20%.
Outlined below are answers to a few commonly asked questions about this election.
1. Whet Is the election all about?
State law authorizes voters to approve an additional one-half percent sales tax to
reduce prop taxes. The law requires that the effective property tax rate be
reduced by a rate that represents the "projected" revenue that will be received from
the additional sales tax.
2. As a Mesquite propgdy owner, how do I benefit?
Passage of the additional sales tax shifts the local tax burden from property owners
to those that buy taxable goods and services. A larger share of the tax burden will
now be picked up from non-Mesquite residents who shop in our community.
Statistics supplied by the State Comptroller's Office and the 1990 census provide
information that indicates that conservatively 65% of Mesquite's shoppers live
outside the City. This percentage assumes that all Mesquite citizens do all their
shopping within Mesquite. Therefore, it is conceivable that the percentage of
revenue received from non-Mesquite residents is much higher.
3. As a senior citizen on a fixed income, how do I benefit?
The City Council has committed to increasing the senior citizen homestead
exemption for property owners that have reached 65 years of age by a minimum of
$15,000. This would mean that Mesquite's senior citizens would be receiving at least
a $30,000 homestead exemption that will assist them in maintaining their quality of
life in our community.
4. How does Mesquite's sales tax compare with surrounding communitle`?
Currently, Mesquite's sales tax is 7.25%. Most communities competing with
Mesquite for retail business are members of the Dallas Area Rapid Transit District
and their sales tax rate is 8.250/b. If Mesquite voters pass this optional sales tax.
Mesquite's tax rate will still be one-half perce it Im than those communities.
,
5. How wjJLthis sales tax increase affect life's necessities?
Mesquite residents and non-residents do not currently pay City sales tax on items
such as groceries, housing, automobiles, prescriptions, doctor's visits and gasoline.
State law exempts these items from municipal sales tax, and these items are not
affected by this sales tax increase.
6, no much will my proper taxes be reduced?
According to past sales tax estimates, the effective property tax rate could be reduced
by approximately 2001c.
7. Can the actual tax rate he ralsed aher the new sales tax is In place?
Yes, but the City Council wants to keep taxes as low as possible and this allows them
to do that while spreading the tax burden more equitably.
g, ;.Rat happens If the C,ily collects more sales tax than thsy_4stimate?
Any excess amounts of sales tax collected must be placed in a "excess sales tax
revenue fund" and may not be used except under State authorized circumstances for
three years. .
9, Whv hits. the City not don e thim before?
The Texas Legislature approved only a couple of months ago Mesquite's ability to
adopt this optional sales tax. Until then, Mesquite was prohibited from utilizing this
State law because it lies within a municipal transit district. Now the City is able to
balance the tax revenues from both property taxes and sales taxes in a 'more
equitable manner. In other words, non-Mesquite residents are paying a fairer
proportion of their share of City services including City streets, the traffic signal
system, park facilities, fire and ambulance services, and police service including costs
to provide security in the major retail center3.
Let us all work together for a better and more competitive Mesquite. Vote Yes On
Saturday, August 10th.
PAH) FOR BY THE MULNS FOR LOWER PROPERTY TAXES, ROB SCNLECEL, TREASURER
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Analysis of the Impact of a Sales Tax iacrease
for Property Tax Relief in the City of Denton
prepared fur:
City of Denton Citizen's Sales Tax Advisory Committee
prepared bl:
Bernard L. Weinstein# Ph.D, and T*-_1 Closer, H.8.
Canter for Economic Development and Research
University of North Texas
Denton, Texas
September, 1993
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1 . Introduction
The residents of Denton, Texas may soon go to the polls
to decide whether to increase the city sales tax by one-half
percent and use the proceeds for local property tax relief.
As proposed, the tradeoff would be revenue neutral-- that
is, property taxes would be reduced by the full a3itioipatad
yield from the hike in the sales tax levy.
This proposed change in the method of local revenue
collection raises a number of policy questions. Will the
swap between sales and property taxes make the overall
revenue system more or less regressive? How will burdens be
shifted among classes of taxpayers? Does the sales or
property tax provide a more stable revenue source over the
long-term? Will an increase in the local sales tax send
Denton shoppers to jurisdictions with a lower rate? Would a
reduction in Denton's property tax rata maks the city a more
attractive site for industrial location and expansion? The
following analysis attempts to shed some light on these
issues.
2. Tax Incidence and s}rden
2.1 ProBer y Tax
Much of the debate concerning the tradeoff between
sales and property taxes concerns the comparative
regressivity of the two taxes. Sales taxes are generally
thought to be reg;,essive because lower income individuals
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allocate a higher portion of their incomes in payment.
(However, the burden is often mitigated through the
exemption of food and medicine). In contrast, so'.a
scholarly research in the 1970s concluded that on a national
basis, property taxes may be slightly progressive. This
argument has received some measure of attention in recent
letters to local newspapers. However, to fully examine the
issue of property tax incidence we must delve deeper into
the literature and also assess the local market.
Aaron (1975) espouses one of the more convincing
arguments for the progressivity of property taxes on a
national basis. However, he imposes a major qualification
to that conclusion: If demand for rental property is high,
the tax burden is shifted to renters who are usually at
lower income levels. This is indicative of Denton where the
presence of the two universities increases rental property
demand. Additional research by Mieszkowski (1972) and
Wheaton (1984) supports Aaron's conclusion of property tax
regressivity in strong rental markets. Paglin and Fogarty
(1972) al--o suggest that as with a sales tax, expenditures
for housing as a percent of total income decline as income
rises; thus, property taxes impose greater burdens on low
income individuals. Paglin and Fogarty also reveal the
presence of administrative regressiv.ty with property taxes.
Administrative regressivity in property taxes occurs
from two major sources. First, the initial property tax
assessments on higher priced houses tend to understate the
3
real market value compared to lower priced houses. Second,
the lag-time between reappraisals tends to accenl:uate the
differences between low- and higher-valued properties
because low-value, marginal and deteriorating houses will
decline in real market values relative to higher-value
properties. (These findings were supported by Chun and
Linnemann in 1985). In the area examined by Faglin and
Fogarty, "the lowest income group experienced a 29.6 percent
higher burden due to the administrative factors while the
highest income class listed was the beneficiary of an 11.9
percent reduction in tax burdens relative to the intrinsic
incidence of the tax."
The unusually high demand for rental property in Denton
probably means that any reductions in property taxes will
not be passed on to renters in the near-term. However, over
the longer term a reduction in the property tax rate should
temper rent increases.
L2 Sales Tex
There is no argument that sales taxes are regressive.
However, the structure of the local economy helps to reduce
the tax burden on Denton residents. Denton retailers have
been under presrure from competitors in neighboring
communities resulting in a geographi. narrowing of the
Denton retail market. Vista Ridge Mall substantially
altered the shape of Denton's effective retail market to the
south and now the opening of new "outlet malls" is pushing
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the effective market from the north. This increases
competition for Denton retailers and, as suggested by Braid
(1987), would indicate that a portion of the sales tax
increase will be absorbed by retailers as they maintain
competitive price levels. This could be considered a
"fair" outcome since these same retailers will experience a
decrease in property tax expenses on real property,
equipment and inventory.
Another advantage of the sales tax is that a portion of
the tax burden is paid by non-residents and students
shopping at local retail establishments. Some of these
students receive financial support from outside the local
community, and many of them reside in university housing and
therefore pay no direct or indirect local property taxes.
Recent surveys conducted by Golden Triangle Mall (GTM)
management have found that 30 to 46 percent of GTM shoppers
reside outside the Denton city limits. If we assume that 20
percent of local retail sales were purchases by non-
residents, the increased tax burden per Denton household
from the proposed one-half percent increase would have been
$45 in 1992.
3. Impact Of p~~~er cwln
ys s Tax Rate On Retail Sales
Fisher (1980) notes three possible negative effects of
an increase in sales tax rates. The first would be an
effective lowering of consumer buying power and thus a
reduction in total retail sales. Second, consumers might
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shift discretionary purchases to non-taxable goods. Third,
consumers could shift their shopping to a lower tax
jurisdiction. The focus of much of the scholarly literature
examines the third possibility and will be addressed f1rat.
Most of the comparative analysis on retail sales
examines cross-border tax differbntials between states.
These studies have indicated declines (increases) in retail
sales of i to 11 percent for each I percent increase
(decrease) in sales taxes, (See Walsh & Jones, 19881
Mikesell & Zorn, 19861 Fox, 1986). The largest effects tend
to occur where there is a difference in the base of taxable
goods, such as the inclusion or exemption of groceries.
Where the taxable base is the same, the lower limits of the
impacts are experienced. Furthermore, Fisher notes that
most of the analyses performed on retail sales performance
under differing tax structures make rigid assumptions about
perfect competition, constant costs in the long run, free
entry and exit in a market, and the absence of external
economies or diseconomies. These criteria are rarely, if
ever, met. Without these conditions the responses to
differences between taxing jurisdictions are probably
minimal. In addition, as noted in the previous section, the
accompanying property tax decrease will allow merchants to
lower prices if they believe their market position will be
damaged by the sales tax increase.
Classic retail site location theory also supports the
miniirAzation of the impacts of a small increase in prices.
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The buying location decision will not be altered until tax
savings exceed the additional costs of travel to a lower
cost location. If we consider a Denton resident purchasing
a $1,000 refrigerator, the marginal cost under the proposed
sales tax increase (assuming the retailer does not pass
along property tax savings) will be $5.00. In contrast, the
buyer could choose to shop at :.sta Ridge Mall with travel
expenses estimated at $8.40 (30 miles round-trip at $0.28
per mile) and perhaps pay a delivery charge as well.
To paraphrase Reilly's retail site location theory:
People will not usually shun a good quality retail center to
a less convenient center with similar quality and degree of
attractiveness (Walsh 6 Jones). In other words, the retail
buy location decision will be based more on ease of site
access, parking convenience, merchandise quality and non-tax
pricing differentials than on the difference between a sales
tax rate of 7-1/4 percent and 7-3/4 percent. This was
supported by the findings of an unscientific survey of
several Denton area retailers who generally do not believe
that the sales tax increase will affect their store sales.
However, the evidence does support the possibility that
consumers located approximately equidistant from two retail
centers may change their buy location decision if they are
aware of a sales tax rate differential. Therefore, as a
worst case scenario, Denton's retail sales might drop
initially by 1/2 percent with a 1/2 percent tax rate
increase. In 1992, this would have reduced taxable sales in
7
Denton by $1.9 million, still leaving a year to year
increase of 6.4 percent compared to 1991. In the long term,
this impact will be lessened and perhaps negated as
neighboring tax jurisdictions respond to increasing fiscal
pressures and are forced to increase treir own sales tax
rates.
4,_Impact of Procerty Tax Rats on F~pnomic Developmep
4
Studies performed on the impact of property taxes on
economic development have not produced consistent findings,
Some research, such as Carlton (1983), did not find property
taxes to be corzelated with economic performailce. Others
(Papke i Papko, 1986 and Papke, 1987) have found property
taxes to be statistically related to measures of economic
development. However, in the later case -,the authors
acknowledged that the tax differentials between locations
mutt be "fairly large" to demonstrate a statistically
significant relationship. Other studies have produced
equally inconsistent results when attempting to measure the
economic development impact of inter-jurisdictional property
tax differentials (see Helms, 1985 and Wasylenko, 1985).
Surveys of site location professionals often mention
the relative importance of property taxes in the location
decision. However, one cannot overlook the probability of
strategic behavior influencing the responses these
individuals give to such inquiries. Indeed, it has been
suggested by a former site location professional that
8
I
property tax reductions granted to companies affect the
salary of the site location professional more than the
actual site location decision.
McGuire (1986) summarized much of the relevant research
and noted that energy costs and government expenditures on
education 'and infrastructure consistently play a more
important role in local economic development than property
taxes. However, McGuire does conclude that while lowering
property taxes may not necessarily improve the success of
economic development efforts, it dogsn't hurt. If the above
mentioned site location professionals are conducting
preliminary reviews of potential sites, they may use
property tax rates as an initial criterion to narrow the
field of potential sites. Giveit Dentonts higher property
tax rates compared to other tax jurisdictions in the region,
lowering the property tax rate could improve the city's
chances of receiving an initial site location inquiry.
5. The Effect of a Tax Bass Shift
Perhaps the most important question to be answered in
the evaluation of a partial shift from property taxes to
sales taxes is its impact on the stability of the City's tax
base. Table 1 and Figures 1 and 2 record recent trends in
property values and taxable retail sales for the City of
Denton. These trends show that property values rose sharply
during the early eighties but have declined steadily since
1989. Total retail sales in Denton demonstrated a much more
1
9
stable pattern of change during the same time period (see
Figure 3). After posting small declines during the depth of
the Texas recession in 1987 and 1988, total taxable sales
have grown at a steady pace that is slightly faster than the
growth of the economy as a whole. The tendency for sales to
move with the economy suggests that retail sales provide a
more stable tax base than property taxes. This is true in
part because retail sales are less likely to be influenced
by short-term speculative influences and national tax
policies compared to property-value-based taxes.
A shift in the relative mix of property and sales taxes
may improve Denton's long-term financial performance and,
thereby, lower borrowing costs for public capital projects.
The ability to maintain and improve local infrastructure and
city services is critical for local economic development.
Two other factors should also boost the yield from the
sales tax over the next decade. First, population growth
will continue along the I-35F corridor as further out-
migration from Dallas and its close-in suburbs continues.
Second, in the unending search for additional revenues, the
State legialature will probably broaden the sales tax base
considerably in future sessions.
6. Summary
The following conclusions can be drawn from our
literature review and analysis of the impact of increasing
4
to
Denton's sales tax rate by 1/2 percent and designating the
additional revenue for property tax reductions:
* The sales tax is somewhat regressive but probably no
more so than the combined inherent and administrative
regressivity of the property tax.
* At 1992 sales levels, we estimate that the 1/2
percent increase in sales tax rate will cost the
average Denton household $45 per year.
* An increase in the local sales tax rate of 1/2
percent will affect the buy location decisions of only
those consumers who live approximately equidistant to
Denton and other major shopping areas. The potential
short-term decline in retail sales would be no more
than 1/2 percent, or $1.9 million.
* There is no guarantee that lowering the property tax
rate will improve Denton's ability to attract and
retain businesses. However, it will narrow the tax
rate differential between Denton and neighboring
jurisdictions and possibly support economic development
marketing efforts.
* Retail sales appear to offer a more stable long-run
tax base than property taxes while allowing for
increased economic efficiency and improved city
financing. This in turn can promote the maintenance
and expansion of local infrastructure and city services
that are critical to an area's economic growth.
i
11
TABLE 1
Property Values and Taxab3s Retail Sales
City of Donlon, Soloatrd Years
(000's
Property Taxable
Y ValygS rlhm Sales-
1984 1984 $ 1,154,036 - $ 303,064 -
1985 $ 1,443,543 25.0 $ 3490499 15.3
1986 $ 1,8200463 26.1 $ 353,427 1.1
1987 $ 2,0501295 12.6 $ 3350930 - 5.0
1988 $ 2,1381361 4.l $ 328,934 2.1
1989 $ 2,139,002 0.3
$ 338,370 2.9
1990 $ 2,036,603 - 4.8 $ 346,972 2.5
1991 $ 109510304 - 4,2
$ 3580657 3.4
1992 $ 118910722 - 3.1 $ 383,652 7.0
Sources: C ty of Dentin, Texas State Comptroller
i
i
i
12
FIGURE 1
DENTON PROPERTY VALUES
(millions
$2600
$2000
$1500
$1000
$600
$0
1984 1985 1986 1987 1988 1989 1990 1991 1992
i
Source: City of Denton
13
FIGURE 2
DENTON TAXABLE RETAIL SALES
(millions
$400
$300
$200 - -
$100 -
$0
1984 9985 1986 1987 1988 1989 1990 1991 1992
Source; Texas State Comptroller
it
cew. u~
14
FIGM 3
YEAR TO YEAR PERCENTAGE CHANGE
Percentage Change
30
20-
10-
0
-10 _
-20
-30
1986 1987 1988 1989 1990 1991 1992
Property Values T Taxable Retail Sale.3
Source: Center for Economic Development
A
15
References
Aaron, Henry J., Who PavP-the Property Tam, The Brookings
Institute, Washington, D.C., 1975
Braid, Ralph, "The Spatial Incidence of Local Retail
Taxation," Quarterly Journal of Economics, Vol. 102, No. 4,
November 1987, pp. 881-892.
Carlton, Dennis W., "The Location and Employment Choices of
New Firms: An Fconometric Model with Discreet and Continuous
Endogenous Variables," TheReview of Economics and
Statistics, Vol. 65, No. 3, August 1983, pp. 440-449.
Chun, Dong Hoon and Peter Linnemann, "An Empirical Analysis
of the Determinants of Intrajurisdictional Property Tax
Payment Inequities," Journal of Urban Economics, Vol. 17,
No. 1, January 1985, pp. 90-102.
Fischer, Ronald, "Local Sales Taxes: Tax Rate Differentials,
Sales Loss, and Revenue Estimation," Public Finance
Quarterly, Vol. 8, No. 2, April 1980, pp. 171-188.
Fox, William, "Tax Structure and the Location of Economic
Activity Along State Borders," Notional Tax Journal, Vol.
39, No. 4, December 1986, pp. 387-407.
Helms, L. Jay, "The Effect of State and Local Taxes on
Economic Growth: A Time Series-Cross Section Approach,"
Review of Economics and Statistics, Vol. 67, No. 4, November
1985, pp. 574-582.
McGuire, Therese J., "Interstate Tax Differentials, Tax
Competition and Tax Policy," National Tax Journal, Vol. 39,
No. 3, September 1986, pp. 367-373.
Mieszkowski, Peter, "The Property Tax: An Excise Tax or a
Profits Tax?," jornal of Public Economics, Vol. 1, No. 1,
April 1972, pp. 73-96.
Mikesell, John and Kurt Zorn, "Impact of the Sales Tax Rate
on Its Base: Evidence From a Small Town," Public Finance
Quarterly, Vol. 14, No. 3, September 1986, pp. 329-338.
Paglin, Morton and Michael Fogarty, "Equity and The Property
Tax: A New Conceptual Focus," National Tax Journal, Vol. 25,
No. 4, December 1972, pp. 557-565.
Papke, James and Leslie Papke, "Measuring Differential
State-Local Tax Liabilities and Their Implications for
Business and Inveatment Location," National Tax Journal,
Vol. 39, No. 3, September 1986, pp. 357-366.
16
Papke, Leslie, "Subnational Taxation and Capital Mobility:
Estimates of Tax Price Elasticities,' National Tax Journal,
Vol. 40, No. 2, June 19870 pp. 191-203.
Walsh, Michael and Jonathon D. Jones, "More Evidence on the
'Border Tax' Effect: The Case of West Virginia, 1979-1984,"
National Tax Journal, Vol. 41, No. 2, pp. 261-268.
Wasylenko, Michael and Therese McGuire, "Jobs and Taxes: The
Effect of Business Climate on States' Employment Growth
Rates," National Tax Journal, Vol. 38, No. 41 December 1985,
pp. 497-511.
Wheaton, William, "The Incidence of Inter-Jurisdictional
Differences in Commercial Property Taxes," National Tax
Journal, Vol. 37, No. 4, December 1984, pp. 515-527.
i
17
Other Readings
Aaron, Henry and Joseph Pechman ed., How Taxes Affect
Economic Behavior, The Brookings Institute, Washington,
D.C., 1981.
DeTray, Den:tis, and Judith Fernandez, "Distributional
Impacts of the Property Tax Revolt," National Tax Journal,
Vol. 391 No. 4, December 1?88, pp. 435-450.
Mikesell, John, "Central cities and Sales Tax Rate
Differentials: The Border City Problem," National Tax
Journal, Vol. 23, No. 2, June 1970, pp. 206-213.
Mikesell Juhn, "Sales Taxation and the Border County
Problem," Quarterly Review of Economics and Business, Vol.
110 No. 1, Spring 1971, pp. 23-29.
Parai, Amar and John Beck, "The Incidence of Classified
Property Taxes in a Three Sector Model with an Imperfectly
Mobile Population," Journal of Urban Economics, Vol. 25, No.
1, January 1989, pp. 77-92.
Rock, Steven, "The Impact of Deductibility on the Incidence
of a General Sales Tax," National Tax Journal, Vol. 37, No.
1, March 1984, pp. 105-112.
Sjoquist, David L., "A Median Voter Analysis of Variations
in the Use of Property Taxes Among Local Governments,"
Public Choice, Vol. 36, No. 2, 1981, pp. 273-285.
1 f
sea.^m
HANDOUT TO COUNCIL - 10-26-'93
inv t93b.wMl EXHIBIT Z-A
AETNA HEALTH PROGRAM COST AS COMPARED To PROPOSED PALICO COST 16.72%)
.................................................................................................11
OPTION 61: PLAII III ;1 TOTAL PLAN COST 11
11 JANUARY 1, SEPT 30. t914 ii AETNA VS PALICO
HMO ONLY 11!/ Doctor Co-DaYe1 ..1t
1150/1 DAYS Hospital: Preec4otion Drugs TOTAL TOTAL $TOTAL CITY 4110TAL EE
910 Cc-pay 11 CITY 13191 EMPYEE TOTAL 11 EXTRA EXTRA
11 COST COST PLAN COST 11 SVGS/(COST) SVGS/(COSTS
ENROLL QUOTE CITY'S COST♦ EE COST 1) 9 WNS 1 MONS I NONS 11 I MONS / MONS
II--------- 11'...........................
Employee Only 02 9131.35 1151.311 60.00 it Willis 90 $111,715 11 (110,531) (11,225)
Employee SP. 31 267.62 151.35 136.24 1; 42,235 976.011 50,246 11 (75,323) $615
Employee Child 12S 257.34 151.30 105.96 11 1701303 1119,205 2391SOS 11 (61,765) 915,120
Employee Fan. 121 366.01 131.39 234.53 11 161,653 1255,512 420,363 11 (59,606) 117,239
"
TOTAL 359 it $461.101 $412,726 1101,637 11 11777,447) $23,520
uuasn saausunu uttraaaaa usuteau ut+a usua:::e+u ass+axap■.+aus+asatw++u ass+ss+aavusst+xeu uaa u■ataa saas+•us++t
OPTION 02; PLAN I 11
1 ,
1 it
HMO A IndemnitY7 HMO $19 Doctor Co-DAY 11 it
5750/5 DAYS Hospital: Indemnity 9500 D*A.Kt. TOTAL TOTAL ;1 4TOTAL CITY 4e TOTAL E1
10% Hoop, Pro$. Drugs 110 Co-DmY 11 CITY 93/11 EMPYEI TOTAL it EXTRA EXTRA
11 COST COST PLAN COST it SVGS/(COSY) SY03MCOSTI
ENROLL OUOTI CITY'S COST♦ EE COST 11 1 NONE / MONS 1 NONS 11 1 MONS / MONS
...................................................................................'11-'..........................
Employee Only 237 1176.02 115t.35 124,64 11 1322,114 952,557 1175,4S1 11 (1117,1411 125,115
Employee OP. 21 334.44 131.35 163.06 11 39,570 147,775 17,261 ;1 (11,531) $12,562
Employee Child 54 291.24 151.36 147.61 11 73,771 171.300 145,431 11 (26,611) 9261115
Employee Fan. 127 446.66 151.36 217.41 11 173,027 $340,020 513,047 11 5/2,7741 151,631
i1 .....................................1i....-...._.............--...
TOTAL 447 11 1609,002 1512,215 91,121,217 (1220,913) $555,563
„
1 ( ■asu nesrauv+a+raasas+ua■:uaouau uu+a■aaau ueasau+.ne■
TOTAL PLAN: OPTIONS 1 AND 2 11 11,015,111 1121,143 92,023,054 ;1 (1396,310) 91710103
4E.tra cost to the City because of more City contribution if we 90 with PALICO In 1114
e4Savings to employees because City will contribute more IF we go with PAL200 in 1194
- 4.
Inert93b.wk1 EXHIBIT I.6
HARRIS HEALTH PROGRAM COST AS COMPARED TO PROPOSED PALICO COST (8.121)
TOTAL PLAN COST i.
OPTION etf PLAN III it
it HARRIS VS PALICO
it JANUARY 1, SEPT 30. 11N „
HMO ONLY 61 S/620 Doctor Co-DAYS: 11... I 11074E CITY MTOTAL EE
101 Hospital: Presc(ptlon Drugs 11 TOTAL TOTAL 11
CITY 93/14 E14PYEE TOTAL it EXTRA EXTRA
St0 C0-Day 11 C051 COST PLAN COST 11 SVGS/ (COST) SVOS/(COST)
it
ENROLL QUOTE CITY'S COST* EE COST 1 HOHS S MONS 9 "is 11 ! MOHS 1 MONS
11 I I__-_
Employee Only 82 !180.50 51116.50 10.00 it 61 N ,113 !o !13!,113 11 (113, 35) 169,225)
$2,592 !29,150 61,111 (41115) (601115)
Sp. Employee 31 292.91 6168.50 101.18 1t 212,063 672,70! 261,771 (20,025) (131,376)
Employee Child 125 2!3.13 !168.!0 61.63 it 6111,516 316,7!2 (11,311) 16!6,158}
E■D1oYN fam. 121 110.4S 6188.50 129.95 1t 205,277 ..........it
TOTAL •••-_3Sl• 11 600!,044 1243,374 SBS2,419 11 (657,5121 (9145,534)
11 '
suraaasssaaaau aanaasras:as asaaa:aasaaaa asa+aaaaassaaaassaa:a sa aseuuvoaasss+aes++aa asaau aseeu sa sa:aasss eesu 000000 uasu
" 11
OPTION 021 PLAN I 11
"
„
HMO A Ind WIt Y.1 HMO 155/120 Doctor Co•P•Y l1 TOTAL TOTAL 11 (TOTAL CITY sa707A1 It
101 Hoepttall Indemnity 1500 Deduct.
120 Co-Day: 70% Hasp.: Pres. Drugs $10 Co-PAY 11 CSTY 03/64 ECOSTE PLAN COST 11 6VO1/(COST) SVGS/(COST)
H COST ENROLL OUOTE CITY'S COST♦ EE COSt 11 9 MONS 6 MONS 1 MDNS „ -1 MONS•.....-.I MONS
Employee Only 237 6217.00 $108.SD 621.30 11 1402,011 662.497 5104,507 (631,961) $35,834
61.115 11 (1,611) SS, 596
Employee 60• 29 331,51 6186.50 11!.09 11 19,199 $35,112
SS,2N
Employee Child $4 2!6,06 5186,50 503.35 11 !1,655 150,226 141,639 11 (11651)
211,456 1205,260 4201715 li (20,315) (144,826)
Employee fu. . 124 366.08 5188.50 179.50 ;1
.1
•-•••147 1736.336 6350,697 61,115,233 11 (111,009) 126!
TOTAL "
„ 11
i i uauuarts■sau a:u ueaaaas■aaasst uaas sf sea:+aaausaateen uaa asst
11 11.167.371 $600,272 111467.651 11 (510 ,121) (5115,266)
TOTAL PLAN: ovnals 1 A)iD :
IEatre cwt to the City because of sore city contribution 4f we 90 with PALICO in 1194
IlSawln9e to employees betauss City will Luntl lbtits mots if we Vo with PALICO In 1191
. a.-.'NaYJ