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Home My WebLink About2021-02-09 Agenda and BackupCity Council City of Denton Meeting Agenda City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com Council Work Session Room2:00 PMTuesday, February 9, 2021 SPECIAL CALLED MEETING WORK SESSION BEGINS AT 2:00 P.M. IN THE COUNCIL WORK SESSION ROOM CLOSED MEETING WILL BEGIN IMMEDIATELY FOLLOWING THE WORK SESSION CITY COUNCIL CONSIDERATION OF THE CONSENT AGENDA AND ITEMS FOR INDIVIDUAL CONSIDERATION WILL BEGIN IMMEDIATELY FOLLOWING THE CLOSED MEETING IN THE COUNCIL WORK SESSION ROOM Note: Mayor Gerard Hudspeth, Mayor Pro Tem Jesse Davis and Council Members Birdia Johnson, Connie Baker, John Ryan, Deb Armintor and Paul Meltzer will be participating in the work session and meeting via video/teleconference. REGISTRATION GUIDELINES FOR ADDRESSING THE CITY COUNCIL Due to COVID-19 precautions, members of the public will not be able to attend the February 9, 2021, City Council meeting in-person. To accommodate and receive input on agenda items, citizens will be able to participate in one of the following ways (NOTE: Other than public hearings, citizens are only able to comment one time per agenda item; citizens cannot use both methods to comment on a single agenda item. Public comments are not held for work session reports.): • Virtual White Card – On February 5, the agenda was posted online at www.cityofdenton.com/publicmeetings. Once the agenda is posted, a link to the Virtual White Card, an online form, will be made available under the main heading on the webpage. Within this form, citizens may indicate support or opposition and submit a brief comment about a specific agenda item. Comments may be submitted up until the start of the meeting, at which time, the Virtual White Card form will be closed. Similar to when a citizen submits a white card to indicate their position on the item, these comment forms will be sent directly to City Council members and recorded by the City Secretary. City Council Members review comments received in advance of the meeting and take that public input into consideration prior to voting on an agenda item. The Mayor will announce the number of Comment Cards submitted in support or opposition to an item during the public comment period. Comments will not be read during the meeting. The City Secretary will reflect the number of comments submitted in favor/opposition to an item, the registrant’s name, address, and (summary of) comments within the Minutes of the Meeting, as applicable. OR Page 1 Printed on 2/10/2021 1 February 9, 2021City Council Meeting Agenda • By phone – Citizens wishing to speak over the phone during this Council meeting, may call (940) 349-7800 beginning 30 minutes prior to the meeting start time. Comments by phone will be accepted until the item is opened for discussion by the Council. When the call is initially received, a staff member will receive the caller’s information and either: 1) offer to call the citizen back when it is time for them to speak, or 2) record the caller’s information, support or opposition, and comment. If the caller chooses to record their support or opposition, rather than speaking during the meeting, the Mayor will announce the number of comments submitted in support or opposition to the item. If the caller wishes to receive a call back, the voice of each caller will be broadcast into the meeting during the public commenting time of their desired agenda item. Individuals will be able to comment once per agenda item, no matter the method. • At regular meetings only, citizens can speak on any topic that is not on the agenda (Open Microphone). Alert the call taker if you wish to speak under the Open Microphone category. If you would like to give a public report, see the information below. After determining that a quorum is present, the City Council of the City of Denton, Texas will convene in a Work Session on Tuesday, February 9, 2021, at 2:00 p.m. in the Council Work Session Room at City Hall, 215 E. McKinney Street, Denton, Texas at which the following items will be considered: WORK SESSION 1. Citizen Comments on Consent Agenda Items This section of the agenda allows citizens to speak on any item listed on the Consent Agenda prior to its consideration. Each speaker will be given a total of three (3) minutes to address any item(s). Any person who wishes to address the City Council regarding these items may do so by utilizing the "By Phone" registration process as referenced under the REGISTRATION GUIDELINES FOR ADDRESSING THE CITY COUNCIL detailed at the beginning of this agenda. Registration is required prior to the time the City Council considers this item. Registrants may call in and remain on hold or receive a call back at the time the Work Session is called to Order and are encouraged to ensure they remain accessible to accept the call. 2. Requests for clarification of agenda items listed on this agenda. 3. Work Session Reports Receive a report, hold a discussion, and give staff direction regarding a Denton County Transportation Authority (DCTA) update, a proposed plan for on-demand service, and next steps. ID 21-238A. Receive a report, hold a discussion, and give staff direction regarding the May 1, 2021 General Election, and any runoff election if applicable, including locations, dates, and times. ID 21-206B. Receive a report, hold a discussion, and give staff direction regarding the Downtown Denton Tax Increment Reinvestment Zone No. 1 study and analysis being conducted by TXP, Inc. and discuss associated projects being considered for TIRZ funding. ID 20-2182C. Receive a report, hold a discussion, and give staff direction regarding the Economic Development Strategic Plan and strategies for implementation. ID 21-124D. Receive a report, hold a discussion, and give staff direction on pending City Council requests for: 1.Form a formal partnership between City of Denton and Solutions Addiction ID 20-2273E. Page 2 Printed on 2/10/2021 2 February 9, 2021City Council Meeting Agenda Treatment Center to help fund their new group homes. 2.Evening Board and Commission meetings. Following the completion of the Work Session, the City Council will convene in a Closed Meeting to consider specific item(s) when these items are listed below under the Closed Meeting section of this agenda. The City Council reserves the right to adjourn into a Closed Meeting on any item on its Open Meeting agenda consistent with Chapter 551 of the Texas Government Code, as amended, or as otherwise allowed by law. 1. Closed Meeting: Deliberations regarding Real Property - Under Texas Government Code Section 551.072; Consultation with Attorneys - Under Texas Government Code Section 551.071. Receive information from staff, discuss, deliberate, and provide staff with direction pertaining to terms and conditions of a potential lease of City-owned property in the BBB & CRR Survey, Abstract No. 185, Denton County, Texas, and located generally south of Parkway Street, between Bolivar Street and North Elm Street, City of Denton, Texas; and the potential sale of City owned property in the Robert Beaumont Survey, Abs No 31 and the William Neill Survey, Abstract No. 971, City of Denton, Denton County, Texas, and being known as part of Lots 6 and 8, Block 1 Barb’s Addition, Denton County, Texas, near Carroll Street and Parkway Street. Consultation with the City’s attorneys regarding legal issues associated with the potential disposal, sale, and lease involving the real property described above where a public discussion of these legal matters would conflict with the duty of the City’s attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, or would jeopardize the City’s legal position in any negotiation, administrative proceeding, or potential litigation. ID 21-187A. Deliberations regarding Real Property - Under Texas Government Code Section 551.072; Consultation with Attorneys - Under Texas Government Code Section 551.071. Receive information from staff, consult with the City’s attorneys, and provide direction pertaining to the status, strategy, and possible resolution of condemnation case styled City of Denton v. Robert P. Donnelly, Cause Number PR-2018-01099, pending in the Probate Court of Denton County, Texas, where discussion of these legal matters in an open meeting would conflict with the duty of the City’s attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, or otherwise compromise the City’s legal position in pending litigation. ID 21-232B. Page 3 Printed on 2/10/2021 3 February 9, 2021City Council Meeting Agenda Any final action, decision, or vote on a matter deliberated in a Closed Meeting will only be taken in an Open Meeting that is held in compliance with Texas Government Code, Chapter 551, except to the extent such final decision, or vote is taken in the Closed Meeting in accordance with the provisions of Section 551.086 of the Texas Government Code (the ‘Public Power Exception’). The City Council reserves the right to adjourn into a Closed Meeting or Executive Session as authorized by Texas Government Code, Section 551.001, et seq. (The Texas Open Meetings Act) on any item on its open meeting agenda or to reconvene in a continuation of the Closed Meeting on the Closed Meeting items noted above, in accordance with the Texas Open Meetings Act, including, without limitation Sections 551.071-551.086 of the Texas Open Meetings Act. NOTE: Any item for which a formal action at the Special Called Meeting has been taken by Council may be subject to a request for a motion for reconsideration at any time during the meeting, at the Concluding Items Section, or after the meeting. In order to comply with the Texas Open Meetings Act, a request for a motion for reconsideration made during, at the end of, or after a Council meeting will be placed on the agenda and considered at the next official meeting of the City Council. Following the completion of the Closed Meeting, the City Council will convene in a Special Called Meeting to consider the following items: 2. CONSENT AGENDA Each of these items is recommended by Staff and approval thereof will be strictly on the basis of the Staff recommendations. Approval of the Consent Agenda authorizes the City Manager or his designee to implement each item in accordance with the Staff recommendations. The City Council has received background information and has had an opportunity to raise questions regarding these items prior to consideration. Listed below are bids, purchase orders, contracts, and other items to be approved under the Consent Agenda (Agenda Items A – K). This listing is provided on the Consent Agenda to allow Council Members to discuss or withdraw an item prior to approval of the Consent Agenda. If no items are pulled, the Consent Agenda Items will be approved with one motion. If items are pulled for separate discussion, they may be considered as the first items following approval of the Consent Agenda. Consider approval of the minutes of January 26, 2021 and February 1, 2021.ID 21-176A. Consider adoption of an ordinance of the City of Denton ratifying and approving the execution of a contract with the Texas Department of Housing and Community Affairs (the “TDHCA Contract”) allocating to City funds for the Texas Emergency Rental Assistance Program and the Texas Eviction Diversion Program; authorizing the receipt and expenditure of funds therefor; authorizing the City Manager to execute a Memorandum of Understanding with the United Way of Denton County, Inc. providing for a subaward of the obligations and funds allocated under the TDHCA Contract; authorizing the expenditure of funds therefor; and providing an effective date. ID 21-140B. Consider adoption of an ordinance of the City of Denton authorizing the City Manager, or his designee, to execute a grant agreement with the United Way of Denton County, Inc. providing for working capital for the Emergency Solutions Grant Program in furtherance of the coordinated system of homeless assistance programs; authorizing the expenditure of funds therefor; and providing an effective date. ID 21-057C. Consider adoption of an ordinance of the City Council of the City of Denton authorizing the City Manager to execute an agreement with the Texas Historical Commission to ID 21-132D. Page 4 Printed on 2/10/2021 4 February 9, 2021City Council Meeting Agenda participate in the Texas Main Street Program demonstrating the City of Denton’s commitment to continue as a “Sustaining Level Official Main Street City” and authorizing payment of the annual fee in the amount of $2,600; and providing an effective date. Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute an Interlocal Agreement with the Denton Independent School District for distance learning through Operation Connectivity wherein the City agrees to contribute an amount not-to-exceed $571,167.74; and declaring an effective date. ID 21-170E. Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute an addendum to Memorandum of Understanding with the Denton Independent School District, for reimbursement to the City in the additional estimated amount of $571,167.74 for compensation and benefits of Student Resource Officers assigned at DISD for the period of January 1, 2021, through June 30, 2021, and providing an effective date. ID 21-142F. Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager, or his designee, to execute a Professional Services Agreement with OCMI, Inc., to provide cost estimating review, cost estimating preparation, and estimate at completion projection services for the City of Denton’s capital infrastructure projects as set forth in the contract; providing for the expenditure of funds therefor; and providing an effective date (RFQ 7508 - Professional Services Agreement for Cost Estimating Services awarded to OCMI, Inc., for two (2) years, with the option for one (1) additional one (1) year extension, in the total three (3) year not-to-exceed amount of $402,780.00). ID 21-172G. Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager, or his designee, to execute a contract with Procore Technologies, Inc. through the North Central Texas Council of Governments (NCTCOG), contract #2020-064 and ratify a contract executed by Purchasing Agent with Calance Software PVT. Ltd. which is the sole provider of these commodities and services, in accordance with Texas Local Government Code 252.022, which provides that procurement of commodities and services that are available from one source are exempt from competitive bidding, for the purchase and implementation of project management software for the Engineering Department; providing for the expenditure of funds therefor; and providing an effective date (File 7533 - awarded to Procore Technologies, Inc., in the two (2) year not-to-exceed amount of $363,078.00). ID 21-173H. Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager, or his designee, to execute a contract with Parker Power Systems, Inc., to provide maintenance, inspection, and repair services on generators for various City of Denton departments; providing for the expenditure of funds therefor; and providing an effective date (RFP 7534 - awarded to Parker Power Systems, Inc., for three (3) years, with the option for two (2) additional one (1) year extensions, in the total five (5) year not-to-exceed amount of $750,000.00). ID 21-174I. Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager, or his designee, to execute a contract with ID 21-175J. Page 5 Printed on 2/10/2021 5 February 9, 2021City Council Meeting Agenda Patel & Patel General Partners dba Deluxe Inn, for temporary emergency shelter in hotels for the Community Development Department; providing for the expenditure of funds therefor; and providing an effective date (RFP 7547 - awarded to Patel & Patel General Partners dba Deluxe Inn, in the one (1) year not-to-exceed amount of $800,000.00). Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager, or his designee, to execute a Professional Services Agreement with NewGen Strategies and Solutions, LLC, a Colorado Limited Liability Company, for transmission rate case filing services related to actions before the Public Utility Commission of Texas as set forth in the contract; providing for the expenditure of funds therefor; and providing an effective date (RFQ 7532 - Professional Services Agreement for case filing services awarded to NewGen Strategies and Solutions, LLC, in the not-to-exceed amount of $500,000.00). ID 21-222K. 3. ITEMS FOR INDIVIDUAL CONSIDERATION Consider approval of a resolution of the City of Denton adopting an Economic Development Strategic Plan; and providing an effective date. The Economic Development Partnership Board recommends approval (8-0). ID 20-1635A. Consider adoption of an ordinance of the City of Denton authorizing the City Manager to execute a Lease Agreement between the City of Denton and the Denton Chamber of Commerce for the use and occupancy of approximately 1600 square feet of office space and 100 square feet of storage space in the City building at 401 North Elm Street; and providing an effective date. ID 21-171B. Consider approval of a resolution of the City of Denton supporting the TX Legacy Denton, LP’s 9% housing tax credit application to Texas Department of Housing and Community Affairs for proposed new construction of The Legacy in Denton Apartments to provide affordable rental housing; committing to provide fee reductions in an amount not to exceed $500.00; and providing an effective date. ID 21-094C. Consider adoption of an ordinance ordering an election to be held in the City of Denton on May 1, 2021 and, if a runoff election is required, on June 5, 2021, for the purpose of electing Council Members to Districts 1, 2, 3 and 4 of the City Council of the City of Denton, Texas; prescribing the time and manner of the conduct of the election to be in accordance with a joint election agreement and contract for election services with the Election Administrator of Denton County; providing a severability clause; providing an open meetings clause; and providing an effective date. ID 21-179D. Consider nominations/appointments to the City’s Boards, Commissions, and Committees: Airport Advisory Board, Animal Shelter Advisory Committee, Board of Ethics, Health & Building Standards Commission, Human Services Advisory Committee, Library Board, Parks, Recreation & Beautification Board, Planning & Zoning Commission, Public Art Committee, and Zoning Board of Adjustment. ID 21-178E. 4. CONCLUDING ITEMS Page 6 Printed on 2/10/2021 6 February 9, 2021City Council Meeting Agenda A. Under Section 551.042 of the Texas Open Meetings Act, respond to inquiries from the City Council or the public with specific factual information or recitation of policy, or accept a proposal to place the matter on the agenda for an upcoming meeting AND Under Section 551.0415 of the Texas Open Meetings Act, provide reports about items of community interest regarding which no action will be taken, to include: expressions of thanks, congratulations, or condolence; information regarding holiday schedules; an honorary or salutary recognition of a public official, public employee, or other citizen; a reminder about an upcoming event organized or sponsored by the governing body; information regarding a social, ceremonial, or community event organized or sponsored by an entity other than the governing body that was attended or is scheduled to be attended by a member of the governing body or an official or employee of the municipality; or an announcement involving an imminent threat to the public health and safety of people in the municipality that has arisen after the posting of the agenda. B. Possible Continuation of Closed Meeting topics, above posted. 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 5th day of February, 2021 at ___________________ __________________________________________ CITY SECRETARY NOTE: THE CITY OF DENTON'S DESIGNATED PUBLIC MEETING FACILITIES ARE ACCESSIBLE IN ACCORDANCE WITH THE AMERICANS WITH DISABILITIES ACT. THE CITY WILL PROVIDE ACCOMMODATION, SUCH AS SIGN LANGUAGE INTERPRETERS FOR THE HEARING IMPAIRED, IF REQUESTED AT LEAST 48 HOURS IN ADVANCE OF THE SCHEDULED MEETING. PLEASE CALL THE CITY SECRETARY'S OFFICE AT 940-349-8309 OR USE TELECOMMUNICATIONS DEVICES FOR THE DEAF (TDD) BY CALLING 1-800-RELAY-TX SO THAT REASONABLE ACCOMMODATION CAN BE ARRANGED. Page 7 Printed on 2/10/2021 7 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-238,Version:1 AGENDA CAPTION Receive a report, hold a discussion, and give staff direction regarding a Denton County Transportation Authority (DCTA) update, a proposed plan for on-demand service, and next steps. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™8 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: City Manager’s Office CM/ DCM/ ACM: Sara Hensley DATE: Feb. 9, 2021 SUBJECT Receive a report, hold a discussion, and give staff direction regarding a Denton County Transportation Authority (DCTA) update, a proposed plan for on-demand service, and next steps. BACKGROUND In the Friday report on Jan. 29, 2021, staff shared a brief update regarding the DCTA Board approving a a preliminary proposal from VIA to launch on-demand service in the City of Denton. They are at the very beginning of the process with a proposed concept and will now move forward with workshops with the City to refine the concept, a substantial public involvement process to solicit feedback from the public, and an equity analysis to ensure no vulnerable populations are negatively impacted by the service changes. DCTA Board Chairman Chris Watts and the City’s transportation consultant, Brandi Bird, will provide a presentation to City Council during this work session on Feb. 9. EXHIBITS Exhibit 1 – Agenda Information Sheet Exhibit 2 – Presentation Respectfully submitted: Sarah Kuechler Chief of Staff City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 9 DCTA UpdateCouncil Meeting February 9, 202110 ContosoSuitesHow We Got HereFall 2018•Looking at historical data, Denton was concerned its citizens weren’t getting the value its sales tax contributions would justify•A‐train Ridership had been steadily declining over the last 5 years•Bus ridership had been fluctuating•DCTA was focused on adding contract service in non‐member cities in Collin County.•Sales tax funding from cities was increasing steadily, but was not invested in increased service.•In the Fall of 2018, the member cities of Denton, Lewisville, and Highland Village began discussing concerns about the direction of DCTA. •The three member cities, in consultation with Denton County, decided to work to transform the agency.211 ContosoSuitesRecap of AccomplishmentsOctober 2018‐ January 2021•Developed consensus amongst Member cities and the County to restructure the Board and restructure the priorities of the agency•Passed legislation to reduce the Board and give greater control to the funding entities, 3 member cities, as well as acknowledging the original investment by the County•City appointed Chris Watts to Board, he was subsequently elected Chairman of the Board of Directors•Went through an extensive 6‐month bylaws rewrite to ensure the member cities that fund the agency effectively control the decisions being made and future of the agency312 ContosoSuitesRecap of AccomplishmentsOctober 2018‐ January 2021•Worked to pass an administrative fee policy on all contract service to ensure the member cities were not subsidizing service in non‐member cities. •Requested an Efficiency study of DCTA’s operations to identify efficiencies and areas of improvement.•Adopted a TRIP program to dedicate 15% of net available fund balance each year to member cities to fund complementary infrastructure413 ContosoSuitesDenton’s Future DCTA Goals2020 ‐ 2021•Protect Taxpayer Money•Increase Ridership•Improve Services for Denton residents514 ContosoSuitesDenton Historical TrendsDCTA Funding from Denton .5% Sales Tax6Rail RidershipBus RidershipSales Tax ContributionsFY 2015555,423 589,404 $ 10,874,766 FY 2016545,250 549,531 $ 12,280,379 FY 2017504,958 487,664 $ 12,756,675 FY 2018419,335 473,234 $ 12,776,942 FY 2019393,700 556,059 $ 13,112,611 15 ContosoSuitesDCTA CurrentBus ServiceExisting Routes in Denton716 ContosoSuitesDCTA CurrentBus ServiceExisting Routes in Denton817 ContosoSuitesDCTA CurrentBus ServiceExisting Routes in Denton918 ContosoSuitesDCTA CurrentBus ServiceExisting Routes in Denton1019 ContosoSuitesDCTA CurrentBus ServiceExisting Routes in Denton1120 ContosoSuitesDCTA CurrentBus ServiceExisting Routes in Denton1221 ContosoSuitesEfficiency Study Transformation Initiative RFPAccenture was selected to conduct an extensive analysis of all aspects of DCTA’s organization and make recommendations, including:1) Organization and Governance Analysis2) Service analysis3) Technology Needs analysis1322 ContosoSuitesCopyright © 2020 Accenture. All rights reserved.| 46Copyright © 2020 Accenture. Allrights reserved. | ‹#›‐246810121416DC 1 DC 2 DC 3 DC 4 DC 5 DC 6 DC 7 DC 8 LC ‐ 21 LC ‐ 22 NTx Express ‐ 64Daily Average Boardings/Revenue Hour ‐ DC, LC & NTXOctNovDecJanFebMarAprMayJunJulAugSepCriteria: 10 boardings/RH: minimumthreshold for fixed-route productivitySources: DCTA, National Transit Database.PRODUCTIVITY CRITERIA FOR FIXED ROUTE SERVICEDC Routes 5 and 8 were discontinued in June.Several routes met thisthreshold prior to COVIDSeveral other routes likelymeet this threshold duringpeak hours – but more datais neededDenton Connect, Lewisville Connect, NTX23 ContosoSuitesOn Demand ServicePotential Service Option15•Similar to Uber Pool•App‐ based, with call in number to schedule trips•Maximum of 6 passengers per trip•Technology pairs riders within short walk of their pickup and destination24 ContosoSuitesOn Demand ServiceService Plan Development in Process16•Contemplating replacing low ridership bus routes with On Demand service•Considering keeping highest ridership bus routes, 3 & 7, for 6 month pilot to determine if riders prefer bus or On Demand•Will provide greater coverage of the City, better frequency and longer hours of coverage•DCTA will host a workshop with City staff this month to refine service in Denton•DCTA will undergo extensive public involvement process (March‐ May) before final decision25 ContosoSuitesOn Demand ServiceService Plan Development in process17•Will provide better service for Denton residents and save at least $2.6 M per year•16 hours/ day‐ 5 am – 9:30 pm•5‐ 7 minute frequency•Sunday and Holiday service•Connectivity to the DART train at Trinity Mills after hours•Overlap in service to help customers transition•Proactive community involvement plan to assist individuals experiencing homelessness, unbanked customers, or customers requiring additional assistance26 ContosoSuitesProposed Denton On Demand ZoneInitial Proposal‐ In Development1827 Discussion & Questions28 ContosoSuitesCopyright © 2020 Accenture. All rights reserved.| 46Copyright © 2020 Accenture. Allrights reserved. | ‹#›‐246810121416DC 1 DC 2 DC 3 DC 4 DC 5 DC 6 DC 7 DC 8 LC ‐ 21 LC ‐ 22 NTx Express ‐ 64Daily Average Boardings/Revenue Hour ‐ DC, LC & NTXOctNovDecJanFebMarAprMayJunJulAugSepCriteria: 10 boardings/RH: minimumthreshold for fixed-route productivitySources: DCTA, National Transit Database.PRODUCTIVITY CRITERIA FOR FIXED ROUTE SERVICEDC Routes 5 and 8 were discontinued in June.Several routes met thisthreshold prior to COVIDSeveral other routes likelymeet this threshold duringpeak hours – but more datais neededDenton Connect, Lewisville Connect, NTX29 ContosoSuitesDCTA CurrentBus ServiceExisting Routes in Denton2130 ContosoSuitesDCTA CurrentBus ServiceExisting Routes in Denton2231 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-206,Version:1 AGENDA CAPTION Receive a report, hold a discussion, and give staff direction regarding the May 1, 2021 General Election, and any runoff election if applicable, including locations, dates, and times. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™32 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: City Manager’s Office ACM: Sara Hensley DATE: February 9, 2021 SUBJECT Receive a report, hold a discussion, and give staff direction regarding the May 1, 2021 General Election, and any runoff election if applicable, including locations, dates, and times. BACKGROUND On Tuesday, February 9, 2021, the City Council will consider an ordinance ordering a municipal election to be held on Saturday, May 1, 2021 for the purpose of electing members to City Council Districts 1, 2, 3, and 4, including a runoff election to be held Saturday, June 5, 2021 if needed. At the January 26 meeting, City Council provided direction on election day/early voting locations to be used with additional follow up needed in specific areas, specifically identifying a polling location in the vicinity of the University of North Texas as they had no facility available, a second early voting location in District 2, as well research the requirements to provide for extended early voting hours in addition to the two (2) 12-hour days required by State law. The following notes Election Day locations as determined by City Council on January 26. The Early Voting locations include only one location in District 2 as a second location could not be located. Staff will work with Denton County to continue attempts in identifying a second location for future elections. ELECTION DAY City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 33 EARLY VOTING OPTIONS The following options exist: • Finalize Early Voting locations for General Election • Finalize Early Voting and Election Day locations for potential Runoff Elections (if any) • Identify the number of extended early voting days/hours desired for future election(s) EXHIBITS Exhibit 1 – Agenda Information Sheet Exhibit 2 – Presentation Exhibit 3 – Maps on EV/ED Locations Respectfully submitted: Rosa Rios City Secretary 34 DENTON CITY COUNCIL MEETING FEBRUARY 9, 2021 Polling Locations, Dates & Times for May/June 2021 Elections ID 21-206 35 Background On January 26, 2021, staff presented historical information on the use of polling locations (2017-2020) Council discussed election day/early voting locations for May 1, 2021 General Election and June 5, 2021 Runoff Election (if needed) Council provided direction on locations to use with additional follow-up required 2ID 21-206 FEBRUARY 9, 2021 36 Summary of Discussion and Follow-up Election Day Locations:2 per district with exception in District 3 due to desire to have additional locations Identify alternate location in the UNT vicinity (since UNT Gateway Center is unavailable for May 2021)with the following preferences in order: 1.Voertman’s –Denton County verified meets eligibility requirements for use as a polling location 2.Denton Wesley Foundation 3.Osher Lifelong Learning Institute at UNT Early Voting:2 per district with exception of District 4 with only one location at South Branch Library as it is centrally located within that district Identify 2nd location in District 2 (if possible) oEfforts to locate a second early voting site were unsuccessful;but will continue to work with Denton County for upcoming elections. Additional 12-hour days: Denton County reports a contract amendment would be necessary as it is a “joint election” with other jurisdictions, some of which have already returned executed agreements. Can address for the next election cycle in 2022. Will need to know the number of 12-hour days/extended hours desired. 3ID 21-206 FEBRUARY 9, 2021 37 Summary of Locations for 2021 4ID 21-206 FEBRUARY 9, 2021 Election Day Early Voting 38 Issues to Consider Initial discussions with Denton ISD (has all “at-large”Board seats up for election) Too many early voting locations and too many election day voting locations in District 3 in viewofitbeingaMayUniformElectionoUnsureifDentonISDBoardofDirectorswillagreetocostsharethatmanylocationsoriftheywillhaveabilitytocanceltheirelection;City may not know until late February/early MarchDenton ISD could select their own locations (if election not cancelled) o Denton County would then be the deciding factor on which locations get usedHigh potential the City will absorb full cost o While other participating jurisdictions will utilize early voting locations,only overlapping entities cost-share If other participating jurisdictions opt to not cost-share: City will absorb 100%of cost for that location Other participating jurisdictions would actually still utilize the locations (appear on the ballot totheextentthatpropositions/seats apply to a given precinct) 5ID 21-206 FEBRUARY 9, 2021 39 Direction Needed Finalize Early Voting locations for General Election Finalize Early Voting and Election Day locations for potential Runoff Elections (if any) Should the same ED/EV locations be used for the applicable “district” where a runoff election is necessary? Identify the number of extended early voting days/hours desired for future election(s) Note: City Council is scheduled to order General Election on Tuesday, February 9, 2021 (includes locations with final determination by Denton County; will include those submitted by the City of Denton and other participating jurisdictions) Last day to order the election is Friday, February 12, 2021 6ID 21-206 FEBRUARY 9, 2021 Election Day Early Voting 40 Ú Ú Ú Ú Ú Ú 2 3 1 4 WINDMERECREEKLAKESHARON ROBSON RANCH NORTH TEXASCOYOTEPOINT WENTWOODI-3 5 W Ra mp GOODLAND WICHITAINDIANRIDGESAD AUNICOSIA H UN TERSR IDG EC H A P ARRA LFRAME BROWNTRAILTRINITYGREENBELTACCESSGEESLINGCOOPER CREEKWHITEROCKDALLAS POST OAKSTATE SCHOOLTAMARACK RIVERSIDEI-35ECROSSOVERBONNIE BRAEPRIVATEDUCHESS MARKET HICKORYCREEKFULTON OCEAN UNICORN LAKEN 1-35ERampSAULS TEASLEYGAYLA CORINTHFALLMEADOWWESTGATERUSSELLNEWMANFM 156P R O M I N E N C E MADISON CRAWFORD COUNTRY CLUBPOINSETTIA MCKINNEY BRIDGE RYAN AUSTINSTANLEYHICKORY STJOHNS CORONADO DOBBSBARNHILLSOLANA REDBUDBRIARBROOK MATT DANA HINKLEYO AKPERSIMMONLITTLEJOE Station5 Access ED ROBSONGRASSLAND CASTLEPINESM IN G O HIALEAHSHARONCORBIN CRAIGBONNIE BRAEDIXON KINGSVINTAGEDIANEROXBURYCUNNINGHAMBROKENBOWCOWLINGFOREST BENDFISTE OAKSHIRE O L D H W Y 7 7 PARKRIDGEBELMONTPARK RIVERINE GREENSPRINGSB R A N T P.R.808WINDSORFARMS BROOKVIEWCROSSTREESCLIFFSIDECIRCLEVIEW ASTER SILVERDOME ALAMO YARBROUGH MANTEN FM 1173 CHERT HOBSON SILVERMEADOWOSAGESPENCER BERNIECEJONES STEEDMANMEADOWHILL RUNNINGBEARWOODBEGONIACEDARPECANCARRIAGECOMOLAKE NO R THFORTY Private PANHANDLE Station2 AccessPONDER OCEANVIEWTWINBROOKTURNLANCE B O X W O O D CRESCENT CARNEGIERIDGEJOHNSONEVERSWAY GLENFALLS BOYDP .R .8 0 9 LEAFYHILL MONTECITONOLENBRETONHILLTOP CA R L I S L E BRITTANYHILLLAKEVIEWBRISASCHAPEL EL PASEOFIRESIDE R OL L I N GGREEN WILSON PRIVATE WINSTON COPPER CANYONRHONEALICEKAREN G R O V E CEDARCREEK BLUEBONNETTLINDAROBERTSONI 35SENA PERIMETERLIDO SOUTHERLAND PHOTINIA NORA COUNTRYVIEW OLD ALTON RANKI NPACEPINTO ROBBIE-O C L U B H O U S E PRIVATE ALDERBROOKTRIPLECROWNBRANDYWINE GARYR IV E R V IE WI 35 WBETH MILLS EGAN PHEASANTHOLLOWPALMERHIGHMEADOW EVERSIR O N W O O D CARMEL HILLSHIGHLANDPARKMATTWRIGHTCHAUCERMEADOWGLEN LAVONZARAHARBOURMISTCHEVY CHASE GREEN RIVERB R I A RFORES T GUNNISONSANLUCASLAKEWAYSUN RAYSHYCREEK BERNSTEINTHISTLEP A R P.R. 6616 CROWNCHONGREATBEAR ATHENS SPRINGVALLEYSUEELLEN PIONEER CLEARRIVERLAKEVIEWCAMINOREALS A D D L E B A C K ABBOTSPARKSIDE DREXELWESTWARD CHAPEL MULKEYO XFORDKIRBYBALMORHEA AUDRAPURBE CKSHADOWMILLWOODLINKS SADDLEDORISALTAVISTA EWINGMOCKINGBIRDCANYON ORRGROVELAND POTTERSTONEPRIVATE T USCANHIL L S FANITACARDINALLAUREL WELLINGTONSANTAFECOPE WESTON WILLOWGROVECOMEROAKPARK PALMWOOD KINGFISHER BEALL HOUSTONHOLLOWRIDGE BUCKTHORN BELLPECAN CREEK BENTCREEK KILKENNY KERLEY CYRUS LANSMAN REDSTONEHORNBEAM INDIGOREDWOODWHEELERRIDGEBONITA T U F F GROSBEAKCAMPBELLC R EE KDALE FANNIN LIPIZZANGREENIVYSUNVALLEY AMISTADGLASGOWBE A T RIZ SIL V E RR OCK PAMELAGLENNGARYTOWERRIDGEWAGONTRAILGRIBBLE SPRINGSVINEARKOSECRESTVIEW RANCHM ANELM BURNING TREE A IR P O R T SYRACUSELA K E RID G E A U G US TA IMPERIAL SANFELIPE MISTYWOOD NAVAJOWHITEDOVEPIERCEMALONETOWNCENTERPVT 3WILLOWWOOD MEADOW OAK GREENWOOD Y O R K S HIR E OAK JOSHUAOAKLAND M E G A N AILEENJUNO VALENCIA S U N D O W N LOCKSLEY GOBERT O W N C E N T E R P V T 9 WINTHROP HILL HINKLEAVEDROBINWOODWAYNE COVEY LOCUSTCALVERTROCKHILLMARIETTAMISTYGLEN S H E N A N D O A HFOUTSBROADWAY OAKWOOD ATLASCLUBVIEWANGELINABENDRUDDELLKNIGHTWESTWAY ANDREWAVEGHANN BAILEYSHAWNEEMEADOWVIEW LIGHTHOUSEGLENWOODKENDOLPH ASPENPINERJOHNSONWILLIAMSTYLER OLD JOHN PAINEGREGG MILLERP O T O M A CAUSTINMESA FM 2449 CARRILAL LAGO BUCEESM U STA N G CLEARSTAR COITCARROLLSECOND W HITEHAW KPEEBLES JEFFREYSTALLI ONLONDONDERRY ANGUSTHIRD COLEPRAIRIE S IL K T R E E FORRESTRIDGEOLDNORTHRICH CARTWRIGHTC R E E KEAGLE SHERATONPACO COOKLAKECRESTSWI SHERFIRST HUDSONBAYOLDDOMINIONWARSCHUN INMAN A P P A L O O S A C LEA R VIE WPERTAINHERCULES I-35ESERVICE RD DAWNLIGHT N I-35ERamp MILAM SKYLANEFOX PAISLEY CONGRESS D O MINIO N FOX CREEKHEADLEE PEPPERIDGE EMERY AVE SJANNIELOOP 288MEADOW SEACOVEINDUSTRIAL TIMBERRIDGELATTIMORE BUENAVISTA STO C K B RID G E G O LFSANDSTONEPINE HILLSS AV A NNA HKINGSTONBUCKI NGHAMPEACH PARKPLACE CARPENTERPINESCRIPTURE HAGGARD DAKOTACEMETERYSECOND FOURTHMAYHILL TRAVISW A R B I R D SYCAMORE REGENCY SI RI USSTELLA MOSSROSEDONELLAECTORFM 2153 COYOTEPASS WILLIS ACME TEXOMA HILLCRESTLOONLAKE P E C A N C R E E K AMARILLOC. WOLFEK E R R Y MICHELLEWAYMONTEREY WOODROWWILLETCOTTONWOODMAYHILLGAYP.R. 6610JOHNCARRELL RODEO SHIRAZBATEYTHOMAS J EGANDEERRUN LAKEFORKLOUISE GRANTSTO N EG ATE ANCHO R AMHERST YUCCABISHOPPINE RIVERCHASEE AS Y LOCUSTWILSONWOODAVEABOBCAT LINDEN MYRTLEPEARL TRINITY BUTTERCUP COSMOS PALOVERDE EMERSONDONNA ANGEL BEND HIGHVIEW CHURCH MILL BOWIE WHITE ROCKREGALOAKHILL WINDHAVEN LANETIF F LAKEHAVENPARKWAY SEVEN OAKSKELLYJOYCEHOLLYHILL FAWNBEAVER C R EE KI-35 SERVICE RDMACAWAYFRITZFM 2164COLTOAK OAKBLUFF RUTH COOPER BRANCH EAST HERITAGE COLLINS BRISTOLFREEPORTFM 2499STUARTBENTLEYJENADOUBLEBUTLER EDWARDSALLISON ARGYLEHERMALINDAJOCKCROOKEDSTICKFOREST VI NTAGEOAKTREE CHESTNUT GRISSOM O L D T H O M A S PAINTEDRAILROADSANMARINO CORDELL STILLHOUSEHOLLOW MASSEY OLYMPIACARLTON OLDEDWARDSJACKSON ENERGY MILLPOND FISHTRAP KIMBERLYD E L MACKMORSE A E R ON C A CHAMPLAINEASTPARK MALLARD SMITH BRINKERFORT WORTHWESSEXBLACKBUTTE S E V IL L EI-35 RampBROOKSIDE STEADMANGREEN VALLEYUPPERGLENWICKPARKH O M E R BRIDGESMEANDERINGCREEK GALLERY BANDED IRON BRADFORDMERLOTBROWNBROTHERS W IN D R IV E RSAULS NOWLIN M O O N S A I LFORTWORTH OAK CREEK AVE CBERNARDBOISD'ARCPEAKFOXCROFTNEFFNORMANCONCORD LAKEVISTADUNCANLIBERTY FAIRVIE W SIERRA MISSION SHORELINE LUCKHOLE MARYLAKEVIEWBRYAN HILLTOPKIOWAWESTVIEW MANORL O O P 2 8 8 CHASEDANIEL AMBERR E A GA NH O US T ONI-35E SERVICE R D WINDINGSTREAMDEERLAKEYMAPLETHOMASDARBYRADECKE CISCODEERFIELD SAN JACINTOSKINNERCOMPTONARCHER CHEBI TWINCANYONTRAILFALLBROOK QUAILRUNKNIGHT ANNARBORW H IT E B R ID G ELOVERSRINEY AVONSOLAR MALLARD LNJACQUELINETIESZEN P A D D O C K LARIAT CENTREPLACEIOOFCINDYMARSHALLFM 1830WESTMINSTERBALENTINE R OYA LCHATEAU OVERLAKEGO ODS ON WEBB BLUEJAY FROSTSKYLINEP.R.5912FLORANCESPRINGCREEK HUISACHELYNDA W IN D W O O D HICKORYCROSSING JOHN BURCHBURYTRAIL PAXTONWAY LIND ENW O O D TRAILAME RANDALL SWEET LEEPEMBROOKESKIVUE DENISONDARBY SMITHRIVERPASSQUAILCREEK LINDSEY MICHAEL JOHND A VID F O R T ROBINSONWESTWOODFRY SHOALPRIVATEOLDMAINMETRO LESLIENORMALNORTH LAKEKINGS ROW MIMOSA I-35 Ram p UNDERWOODVALLEYVIEWHARTLEE LOWRYWOODSCOFFEY AZALEAWORTHINGTONA P O LL O ANNAHETTIEHOLLAND STRATA UNIVERSITY LITTLEBROOK TRIPP COLLIERVILLAGEEASTPINA GEORGETOWNVINSONVILLEMILLER BAYFIELDGATEWOOD ELM BOTTOMP.R.2732 NAILCINNAMON WINDSOR HILCROFTKILLDEER SUSI EMUNDENS I-35E Ramp SHELBY S I-35ERamp CHURCHILL JIM CHRISTAL GREENLEAFUNI V ERS I T Y JAMESMEDPARK HICKORY HILL GR A N A D A GOLDENCIRCLECRIPPLECREEKDOCHOLLIDAY PECANACRESP.R.2728KINGSTONTRCE WHEELER BOB-O-LINK C O L O R A D O SHAWHOUSTON PEBBLECREEK SHEPARD TRAIL GRANITEDENTONBRIARHILL COSNERWESTCOURTLINWOOD HUNTERHILLAMYXSAMBASSLANEYH LIVELY RECTORSHADY SHORES C O U N T R Y S I D E ROSELAWN COLLINSBELLECOTESHADYRESTTOMMAXWELLLAN DFILLPRIVATE SPRING SIDE H A M IL T O N FINCHEROAKMONTBRUSHCREEK VA L L E YVIEWHILLVIEW WOODLANDHILLSS H A D YOAKS HAMPTON BLAGG I-35EMASCHBRANCH SEABORNSOMERSET GOLDENHOOFMCKINNEY MEADOW LARKI-35W RampI-35 SERVICE RDFAIRWAYACRESWOLF RUN LANEYFARRISI 35SERVICE RDLA CROIX SANDERS BURGERWOODHOLLOWQUAIL CREEK CHAPARRAL LAKE SHOREBI DDY BYETOM COLE GAS WELLPRIVATEWALTONCHRIS TIHARTLEE FIELDSHERMAN TRE ATME N TPLANT FUTUREBRONCO SANTA MONICACOUNTRYSIDEINDIAN WELLSOLA MARIE BRITTFOSTER O A K B E N DMESQUITE RIDGEC TAYLORCHINN TOWNCENTERPVT 1GANZER BARTHOLDI-35W ServiceGIBBONSCULP BRANCHREINING PRECISIONAMYX HILLHI CKORY CREEKWESTERNLONG FUTURE BONNIE BRAET.N. SKILES ZACKERYALLRED LAKE RAYROBERTSDAMPRIVATE ORCHID HILL LN I35ESERV SI35ESERV FISHTRAP RDCOOPERCREEKRD SPENCER RD COLLINS RDOAKMONTDRSLO OP288FM 428 N TRINITY RDBURGER RD N MAYHILL RDROCKHILLRDFM2499 EMER SONLN GANZER RD W N BONNIE BRAE STPANHANDLE ST COLORADOBLVD HWY 380 W KINGS ROW ALLRED RD HILLTO P R D JACKSON RD FM 156 NF M1830 MILAM RD W FM 2181 HARTLEE FIELD RD CRAWFORDRD E W INDSOR DR FAUGHTRDMILLS RD POINT V I STA RDFM156NLOVERS LNGA NZER RD E HIDDENVALLEYAIRPARKJOHNSON LN VINTAGE BLVD BRUSH CREEK RD E RYAN RD BLAGG RDBOLIVAR STC O WL I N GRDSTUARTRDNBELLAVEGRIBBLES PRINGSRD MALONE STPLAINVIEW RD PENNSYLVANIADRNSHADYSHORESRDMEADOWVIEW D RTEASLEY LN PR6630 F M 2 4 5 0 W UNIVERSITY DR COUNTRY CLUB RDW EAGLE DR W O A KST NOTTI NGHAMD R PAISLEY ST W W IN D S OR D R WARSCHUN RD FM 2449 EDWARDS RD CRES T V IEW DRMILAM RD E L A K E RAYR O B E R T S D A MRD N MASCH BRANCH RDSCRIPTURE ST L A K ESHORERD W I LDCAT RDHIGHLAN DPARKRDFM 2153 FORT WORTH DRN ELM ST TEASLEYLNEUNIVERSITY DR FM 455 W CORI NTH PKWY AIRPORT RD R OBINSON RDS BONNIE BRAE STE FM 2449 N LOCUST STHOLLY H ILLLNGRA N D V IEWDRSLOCUSTSTHOLDER RD E MCCART ST OLD JUSTIN RD GREEN VALLEYCIRBARTHOLD RD POSTOAKDRDUCK CREEK RD HOPKINS RD GARZA RDPAR K RI D GEDRFINCHER R DLAKEVIE W BLVDLA KE S HARON DR BLAIR RD MONTECITO DR NI35E E MCKINNEYST W HIGHLAND ST SSHADYSHORESRDM IN G O R D TOM COLE RD FM455E I 35 F LORANCERDFM2164WESTGATED RDOYLE RD S I 35 E DAVIDSON RD NI35ESERV OLD STONEY RD NAILRDTURBEVILLE RDCWOLFERDELM BOTTOM CIR SHEPARD RD HAWKEYE RD H LIVELY RD I35SERVFM 1173 HICKORYCREEK RD ESHERMANDR STRADER RD ROSELAWN DRFM156SMASCH BRANCH RDHICKORY HILL RD I35E ROBSON RANCH RD I 35 WNFM156SEABORN RD FM1173 S MAYHILL RDBERNARD RD S S T E M M O N S F W Y SAM BASS RD NFM2499SFM2499INDIAN TRL E D ROBSONBLVD N LOOP 288 N HWY 377JIM CHRISTAL RD N I35 WJOHN PAINE RDI 35BORTH RD RECTOR RD MILLERLUGINBYHL RD S WESTERNBLVDBLACKJACK RDW ZACKER Y RDA USTIN CIRSH ADY OAKSDR MITCHE LLRDMICHAEL RD NICHOLSON RD TRIETSCH RDT N SKILES RD ³±426³±2164 ³±1515 ³±1830³±3163 ³±1173 ³±1173 ³±455 ³±2153 ³±2249³±2450 ³±2181³±428 ³±156 §¨¦35E §¨¦35W §¨¦35W §¨¦35 §¨¦35E §¨¦35 §¨¦35E Lake RayRoberts LakeLewisville£¤77 £¤380 £¤77 £¤380 £¤380 £¤377 ST288 ST288 ST288 ST288 Denton Civic Ctr321 E McKinney St Denton CountyElect Admin701 Kimberly Dr North Branch Library3020 N Locust St Robson RanchClubhouse9428 Ed Robson Cr Voertmans1314 WHickory St South Branch Library3228 Teasley Ln CITY OF DENTONEarly Voting Locations Technology Services - GIS 0 2,400 4,800 7,200 9,6001,200 Feet The City of Denton has prepared maps fordepartmental use. These are not official maps of theCity of Denton and should not be used for legal,engineering or surveying purposes but rather forreference purposes. These maps are the property ofthe City of Denton and have been made available tothe public based on the Public Information Act. TheCity of Denton makes every effort to produce andpublish the most current and accurate informationpossible. No warranties, expressed or implied, areprovided for the data herein, its use, or itsinterpretation. Utilization of this map indicatesunderstanding and acceptance of this statement. µVoter Precincts Ú Early VotingCity LimitsCODETJ District 1District 2District 3District 4 41 Ú Ú Ú Ú Ú Ú Ú Ú Ú ÚÚÚ 2 3 1 4 ROBSON RANCH NORTH TEXASCOYOTEPOINT INDIAN RIDGES A D AUNICOSIA HOBSON TRINITYGEESLINGCOOPER CREEKDALLAS POSTOAKTAMARACK RIVERSIDEBROOKEBONNIE BRAEPRI VAT ESAN GABRIEL DUCHESS MARKET REATA HICKORY CREEK OCEAN U NIC O R N L A K EN 1-35ERampSAULS TEASLEYCORINTHWESTGATERUSSELLNEWMAN THERIDGEFM 156WILDWOOD PR O MI N E N C E CRAWFORD COUNTRY CLUBPOINSETTIA MCKINNEY BRIDGE RYAN HICKORY HALLUMVISTAVIEWCORONADO DOBBSBARNHILLBRIARBROOKHINKLEYOAKPERSIMMONLITTLEJOEEDROBSONGRASSLAND C A S T L EPINES M IN G O SHARONCORBIN CRAIGBONNIE BRAEROXBURYALLISEBROKENBOWCOWLINGF O R E ST B E N D OAKSHIRE PARKRI DGEBELMONT PARKGREENSPRINGS BRANTPHOTINIAFRIARTUCK YARBRO UGH MANTEN FM 1173 N A PAVA L L E Y BURROAK SILVERMEADOW SPENCER B E R N IE C E J O N E S STEEDMANCEDARNORTHFORTY PA N H AN D L E MAPLE BOXWOODCARNEGIERIDGEJOHNSON EVERS WAY HILLMONTECITONOLEN BRITTANYHILLBRISASCRUISE ELPASEO R O L L IN G G R E E N WILSONJAGOE P R IV A T E COPPERCANYONALICEASHKAREN G R O V E REDBUDDUNESLINDAI 35SENA WICKERHILLTOP OLD ALTON RANKINPACEM I R A NDA C L U B H O U S E GA RY R IV E R V IE WI 35 WMILLS BENTO AKSEVERS I R O N W O O D CARMELHILLSSILENTSTARHIGHLANDPARKMATTWRIGHT LAVONZARASUNRAYSANTIAGO THISTLEP A R ATHENS SPRINGVALLEYCLEARRIVERCAMINOREALABBOTSPARKSIDE OTTAWADREXELWESTWARD HEARTH MASTHEADOXFORDAUDRAPURBECKSHADOWHIGHLAND EWINGMOCKINGBI RDSHILOHORRPRI VATEFANITACARDINALLAUREL SANTA FE OAKPARK BEALL SONOMA THUNDERBIRD BELLP E C A NCREEK C RIM S O N KILKENNY HAYESHORNBEAM REDWOODWHEELERRIDGEMIRAVISTATUFFGROSBEAKCREEKDALE GREEN IVYGABLE AMISTADGLASGOWGRANDVIEWPAMELAGLENNGARYTHOROUGHBREDTOWERRIDGEWAGONTRAILGRIBBLE SPRINGSARKOSER A N C H M A N ELM A IR P O R T LAKERIDGE ROSENAVAJOMALONEHILLSIDE MEADOW OAK OAK JOSHUAOAKLAND ME GA NAILEENJUNO VALENCIA G O L DRUSHPENNSYLVANIAGOBER GRITSTONE WINTHROPHILL HINKLEROBINWOODJOHNPAINEGLENWOODDAVIS PRIVATELOCUSTBROADWAY HELMATLASCLUBVIEWD UN LI N ETONRUDDELLKNIGHTWELCHAVEGANDREWCHARLESPICADILLY DESERTWILLOWSHAWNEEME A D O WV I EW U N IO N KENDOLPHTY LE R OLD JOHN PAINEAUSTINMESAFM 2449 CARRILAL LAGO AVE DCOITCARROLLSTANFORD A P P A L O O S A LONDONDERRY WOODBROOKTHIRD B U R N IN G T R E E RICH CREEK EAGLE NOTTI NGHAMSWISHERFIRSTOLD DOMINIONW A R S C H U N CORNELLHERCULES I-35ESERVICE RD ROBERTS MILAM SKYLANELILLIAN B MILLERPAISLE YCROW HOPKINS CEMETERYBEATTYLUTHA EMERY SANTA MONICAFREEDOMLOOP 288LATTIMORE S T O C K B RID G E SANTOS BELLAIREPEACH SCRIPTURE DAKOTAACE FOURTH MAYHILLSYCAMORE SI RI USSTELLAWILLOW MOSSROSEDONELLAECTORFM 2153COYOTEPASS G A R D N E R SEVILLEHILLCRESTWILLETLOON LAKE P E C A N C R E E K COTTONWOODC. WOLFEMARSHRAIL MICHELLE WAYVALLEYCREEKGAYP.R.6610BATEYTHOMASJ EGANDEERRUN G R AN TBISHOPPINE RIVERCHASEEASY AVE ABOBCAT LINDEN MYRTLECARMELCOSMOS PALOVERDE LI PIZ Z A N E M E R S O N CHURCH MILL BOWIE TIF F SEVEN OAKSKELLYPUBLIC ALLEYJOYCEHOLLYHILLCALLAWAYBEAVERCREEKTOWNCENTERPVT 2 I -35 RampFM 2164OAKBLUFF RUTH FM 2499BRIARFORESTSTUART JENAEDWARDS ARGYLEOLDTHOM ASHERMALINDAPOCKRUS PAGE FALLLEAF GRISSOMROYALACRESPAINTEDCORDELL STILLHOUSEHOLLOW MASSEY CARLTON ENERGY JACKSON NEPTU NE FISHTRAPSCHUYLER KIMBERLYD E L MACKMORSE A E R ON C A BRINKERFORT WORTHBROOKSIDE GREENVALLEYBRIDGESBROWN BROTHERS MERLOTWIND RIVER NOWLINDUNCANAVE CBERNARDFOXCROFT SANTANA LAKE VISTA LUCKHOLE MARYLAKEVIEW HILLTOPKIOWALOOP288 CHASEDANIEL AMBERI-35E SERVICE RD TWINCANYONTRAILMEADOWTHOMASCOMPTONSANJACINTODARBYRADECKEPRAIRIE IMPERIAL LOVERSRINEY SOLAR LARIAT MCCORMICKIOOFCINDYMARSHALLFM 1830VIN TA G EROYAL OAK RIDGE MISSIONHILLSWEBBBLUE JAY FROSTP.R.5912FLORANCESPRINGCREEK W IN D W O O D HICKORYCROSSING BURCHBURYTRAILSWEET LEECANARY P E MB ROOK EDARBYSMITH ALDERBROOKDAVID FORT METRO NORMALWARWICKCRESCENT KINGS ROW MIMOSA I -3 5Ramp COFFEY UNDERWOODHARTLEE LOWRYWOODSAZALEAAPOLLO ANNAGOODHOLLAND UNIVERSITY SERENITYSTRATA LITTLE BROOK MCKAMY VILLAGEEASTPINA GEORGETOWNVINSONVILLEMILLER ELM BOTTOM SOUTHERLAND P.R.2732 NAILWINDSOR KILLDEER SHELBY S I-35E Ramp REGENCY JIM CHRISTAL UNIVERSITY JAMESGOLDENCIRCLECRIPPLECREEKDOC HOLLIDAY PECANACRESP.R.2728DUFFYS WAYV IC T O R IA COLORADO SHAWBRITTANYHOUSTON PEBBLECREEK SHEPARD G R A N IT E BRIARHILLWESTCOURT LINWOOD AMYXLANEYH LIVELY RECTORSHADY SHORESCOLLINS BELLECOTESHADYRESTTOMMAXWELLS P R IN G SPRINGSIDE HAMI LT ONFINCHEROAKMONTBRUSH CREEK V A L L E YVIEWHILLVIEW SHADY OAKS HAMPTON BLAGG I-35EMASCH BRANCHSOMERSET G O L D E N H O O F MCKINNEY MEADOWLARKI-35WRampI-35 SERVICE RDWOLFRUN FARRISI 35SERVI CE RDLA CROIX CARPENTER LAKESHOREBURGERWOODHOLLOWQUAILCREEK CHAPARRAL BI DDYBYETOM COLE GASWELLPRIVATEWALTONCHRIST IHARTLEEFIELDT R E A T M E N T P L A N T FUTUREBRONCO COUNTRYSIDEINDIANWELLSOLA MARIE BRITTGI BBONSFOSTER SHERMAN O A K B E N DMESQUITERIDGE C TAYLORCHINN TOWNCENTERPVT 1GANZER BARTHOLDI-35W ServiceCULP BRANCHREINING PRECISIONAMYX HILLHI CKORYCREEKWESTERNLONG FUTUREBONNIE BRAEHICKORY HILLT.N . SKILESZACKERYALLRED PRIVATE I35ESERV SI35ESERVCOOPERCREEKRDSLOOP288 NTRINI T YRDBURGER RD ROCKHILLRDGANZER RD W HWY 380 W KINGS ROW JACKSON RD FM 156 NFM1830 FM 2181 HARTLEE FIELD RD GANZER RDEBOLIVAR STC O WLI NGRDNBELLAVEGRIBBLE SPRINGS RDPLAINVIEW RD MEADOW VIEWD R TEASLEY LNFM2164PR6630F M 245 0 W UNIVERSITY DR W UNIVERSITY DR COUNTRY CLUB RDFM 2449 LA KER A YROB E R T S D AM RDMILAM RD E N MASCH BR ANCHRDWI LDCA TRDFM 2153 FORTWORTHDRN ELM ST E UNIVERSITY DR CORINTHP KWYAIRPORT RD ROBINSONRDSBONNIEBRAESTN LOCUST STOLD JUSTIN RD GREENVALLEYCIRPOSTOAKDRHOPKINS RD LAKE SHAR O N DR NI35E E MCKINNEYST M IN G O R D TOM COLE R DFM 45 5 E I 35DUCK CREEK R D FLORANCE RDS I 35 ECWOLFERD ELM BOTTOM CIR SHEPARD RD HAWKEYE RD H LIVELY R DI35SERVFM 1173 HICKORY CREEK RD ESHERMAND R ROSELAWN DRFM156SBERNARDRD HICKORY HILL RD I35E R OBSONR ANCH RD I 35 WSEABORN RD FM1173 S MAYHILL RDHILLT O PRDINDIAN TRL EDR OBSONBLV DN L OOP 288 FM 455 W MCREYNOLDS RD JIM CHRISTAL RD JOHN PAINE RDSAMBASS RD I 35BORTH RD RECTOR RD MILLERLUGINBYHL RD ZAC KERYRDT N SKILES RD ³±426³±2164 ³±1515 ³±1830³±3163 ³±1173 ³±1173 ³±455 ³±2153 ³±2249³±2450 ³±2181³±428 ³±156 §¨¦35E §¨¦35W §¨¦35 §¨¦35E §¨¦35 §¨¦35 §¨¦35E Lake Ray Roberts LakeLewisville £¤77 £¤380 £¤77 £¤380 £¤380 £¤377 ST288 ST288 Civic Center321 E McKinney St MLK Recreation Ctr1300 Wilson St North Branch Library3020 N Locust St Denton Fire Station #74201 Vintage Blvd North Lakes Recreation Ctr2001 W Windsor Dr Robson Ranch Clubhouse9428 Ed Robson Cir Denia Recreation Ctr1001 Parvin St L.A. Nelson Elementary3909 Teasley Ln Voertmans1314 W Hickory Denton ISD Sisk Service Center Annex230 N Mayhill Rd CITY OF DENTONElection Day Locations Technology Services - GIS 0 2,400 4,800 7,200 9,6001,200 Feet The City of Denton has prepared maps fordepartmental use. These are not official maps of theCity of Denton and should not be used for legal,engineering or surveying purposes but rather forreference purposes. These maps are the property ofthe City of Denton and have been made available tothe public based on the Public Information Act. TheCity of Denton makes every effort to produce andpublish the most current and accurate informationpossible. No warranties, expressed or implied, areprovided for the data herein, its use, or itsinterpretation. Utilization of this map indicatesunderstanding and acceptance of this statement. µVoter Precincts Ú Polling LocationsCity LimitsCODETJ District 1District 2District 3District 4 42 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 20-2182,Version:1 AGENDA CAPTION Receive a report, hold a discussion, and give staff direction regarding the Downtown Denton Tax Increment Reinvestment Zone No. 1 study and analysis being conducted by TXP, Inc. and discuss associated projects being considered for TIRZ funding. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™43 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Economic Development ACM/CFO: David Gaines DATE: February 9, 2021 SUBJECT Receive a report, hold a discussion, and give staff direction regarding the Downtown Denton Tax Increment Financing Reinvestment Zone No. 1 study and analysis being conducted by TXP, Inc. and projects being considered for TIRZ funding. BACKGROUND On September 9, 2019, the City executed a contract with TXP, Inc., an economic analysis and public policy consulting firm. TXP was founded in 1987 and is based in Austin. TXP offers services in economic impact analysis, tax increment financing, land use and transportation, and other related areas. The TXP scope of work is included as Exhibit 2. TIRZ Background The Downtown TIRZ was created in 2010, following the guidance set forth in the Downtown Implementation Plan (DTIP) and the RTKL catalyst study (Exhibit 3) as a way to dedicate revenue to projects in Denton’s downtown core. The TIRZ was established as a 30-year TIRZ (2011-2041). However, the TIRZ also included a revenue cap of $24.8 million, which means the TIRZ will expire either when it hits the 30-year term or when $24.8 million is collected, whichever comes first. The TIRZ Project Plan and Finance Plan are attached as Exhibit 4 and Exhibit 5, respectively, and provide a summary of the original financing goals and proposed projects categories. The City is the only participating entity and contributes revenues at a decreasing rate (100% Years 1-5; 95% Years 6-10; 90% Years 11-20; and 85% Years 21-30). Per the Project Plan, the TIRZ was formed to focus on the following project areas: parking/transportation, complete streets, support for downtown projects, and utility/drainage improvements. The Project Plan was amended in 2014 to include land acquisition and economic development projects as eligible under the “Downtown Projects” category. The original certified value of the TIRZ was established at $79.4 million in 2010, with the 2019 certified value being reported as $170,678,753. The TIRZ currently generates about $750,000 per year in revenues, but that will likely increase over time with a corresponding increase in assessed values. Over the past 10 years, the TIRZ has supported a number of projects, which have included an economic development agreement with Railyard Partners, Ltd. for the development of a mixed-use space ($380,000), downtown lighting and sidewalk improvements ($1.47 million), a mews streets study ($80,000) and downtown grants (expended $56,000 to date, with additional grants in process). In total, the TIRZ has recorded about $3.1 million in revenue since its creation and expended about $1.9 million for projects. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 44 A summary of key actions and dates related to the TIRZ formation, administration, and projects is included as Exhibit 6. Study Background In 2019, the City was approached by multiple developers with interest in pursuing projects inside the Downtown TIRZ and consideration of public-private partnerships with the TIRZ as a funding source for project components. Staff initiated conversations with each developer and performed a preliminary analysis to determine if the projects would fit within the parameters of the Downtown TIRZ Project Plan. Based on that analysis, City Management directed staff to engage a TIRZ consultant to assist with the financial analysis of the proposed projects and assist the City in completing its due diligence. Throughout the course of the study, the previously proposed projects were delayed or postponed. However, there was still a need to understand the TIRZ’s performance and more closely review its financials to determine how to best prioritize TIRZ funds for future projects. Over the past few months, the focus of the analysis has been expanded to be more inclusive of overall TIRZ performance and consideration of possible investments and projects to increase the long term viability of the TIRZ in a manner that generates the greatest benefit in downtown Denton. Study Phase One: Data Collection & Stakeholder Input The first phase of the study was to review the existing data and foundational documents and hold discussions with the TIRZ Board and relevant stakeholders. For this phase, TXP reviewed the original catalyst study which led to the creation of the TIRZ (Exhibit 3), TIRZ financial projections and performance, and TIRZ projects and expenditures. In addition, meetings were held with developers to understand what they saw as the value in downtown and how they forecasted development in the area in the short and long term. TXP and staff held discussions with the TIRZ Board in November 2019 to gather feedback and help set goals for the study. TXP and staff also held meetings with developers to discuss potential opportunities, market demand for various types of development, and what they saw as potential future development zones. Key findings in this phase of the study include: • No consensus on the need for more downtown parking currently. • Downtown needs more daytime office employment and traffic to balance nighttime activity. • Rents are not high enough to justify new construction. • Drainage improvements are necessary to create development opportunities, but new projects and investments might not occur in the short-term. • Downtown lacks an overall vision. Study Phase Two: Review Infrastructure Project & Costs In this phase of the study, TXP and staff reviewed previous projects and possible future projects. This included working with the City’s Capital Projects/Engineering departments to understand full project costs and possible impacts of construction inflation, working with the City’s Finance department to understand the financing costs associated with certain projects, and identifying possible return on investment or future development value that would be created by making certain infrastructure improvements. Projects that were considered and evaluated as eligible TIRZ funded projects included: • Completion of the PEC 4, Phases 3 and 4 Drainage Projects o Scope: Construction of new drainage channel to bring properties out of the floodplain and floodway in southeast corner of downtown TIRZ. o Estimated Cost: $17.8 million (today), estimated at $24.8 million with financing costs 45 o Project Details: The goal of this project would be to bring properties out of the floodplain and floodway, which could create substantial area for possible redevelopment. This could have a long-term impact on downtown by adding developable area. However, a large portion of the project and of the impact are outside of the TIRZ and include many owner-occupied and renter-occupied single-family homes. To fully fund this project with TIRZ revenues, the City would need to expand the boundaries of the TIRZ. If this project were financed, it will take up most of the remainder of the TIRZ revenue to be generated over the life of the TIRZ. Because this project may also have impacts for the County, the City may consider asking the County to participate in the project. The City is also considering other funding sources for portions of this project, which could lessen the burden on the TIRZ. Developers were skeptical of this project’s immediate impact value. Downtown stakeholders did not see this as beneficial to the majority of downtown and not clearly aligned with the vision of supporting the downtown core. • Mews Streets (Austin, Cedar, Pecan, Walnut Streets) o Scope: Reconstruction of Austin, Cedar (already completed), Pecan, and Walnut Streets immediately behind Downtown Square. o Estimated Cost: $7 million (today) o Project Details: The goal with the mews streets would be to extend the walkability, amenities, and aesthetics of the Downtown Square to the areas geographically closest. This could help add value to these areas through by created attractive corridors for additional outdoor dining, patios, lighting, sidewalks, and landscaping. Currently, these streets feel like alleys and remain disconnected from the Square. By adding amenities and making these streets more attractive, they become more usable for businesses and visitors. Developers did not think a lot of new value would be generated by this project as they didn’t see new development potential. Businesses saw these as a significant need and currently an impediment to Downtown Denton’s attractiveness. In a post-COVID environment, adding additional areas for outdoor dining with a park-like feel could greatly increase the attractiveness of downtown. • Corridor Improvements o Scope: Reconstruction or improvements to a key downtown corridor, such as Oak Street (from Bell to Locust). o Estimated Cost: $7 to 8 million for a 0.5-mile project. o Project Details: When the City completed the Hickory Street Grand Project, the corridor become more vibrant and walkable and development occurred in the project’s immediate vicinity. While the project had a short-term detrimental impact on businesses, the project ultimately led to new major investments and the attraction of a new NCTC campus and parking garage. Old buildings have been renovated and new uses have added to a new corridor filled with restaurants and entertainment. By focusing on another corridor, such as Oak Street (from Bell to Locust), the City may see a similar growth and investment. By investing in the area’s infrastructure, the TIRZ revenue can assist in aiding a new corridor becoming attractive to new development and redevelopment. Developers saw this as challenging and thought that corridors should be redeveloped as new users move in. Businesses were not supportive of projects that would greatly impact access, visibility, or operations considering the economic struggles due to COVID. • Developer Incentives o Scope: Creation of public-private partnerships to encourage development or redevelopment of underutilized properties to create new value and grow downtown population. o Estimated Cost: $5 to $10 million, but will vary by project 46 o Project Details: A common use of TIRZ revenues is to work with developers through public- private partnerships to encourage development that meets identified needs. This could include participation in a public parking garage as part of a development, helping to offset infrastructure costs that are often higher where aged infrastructure exists, or helping to improve the quality of public amenities or landscaping that are included as part of a new development. These partnerships could generate significant new investment through physical assets (new apartments, office buildings, etc.) and can also increase spending in the area by adding to the daytime and nighttime populations. These types of projects can help developers build projects that may not otherwise be feasible or may increase the scale and scope of proposed projects. • Expanded Grant Program o Scope: Expand funding for the Downtown Reinvestment Grant Program and increase grant amounts o Estimated Cost: $50,000 to $100,000 per project, varies by project o Project Details: The Downtown Reinvestment Grant Program provides up to $25,000 to projects seeking to renovate or rehabilitate buildings in the TIRZ. The City allocates $100,000 per year towards the grant program currently. The funds can be used for building improvements, impact fees, code improvements, utility upgrades or fees, or exterior signage. During this phase, stakeholders indicated that the cost of projects has increased, the remaining buildings are in worse shape, and the grant funds have not been increased. By increasing the grant funds available, it could help offset costs related to redevelopment of older structures, which then generate revenue back to the TIRZ. Businesses liked the idea of continuing to support and expand the program to help preserve historic structures and improve the aesthetics of Downtown Denton. • General Maintenance o Scope: Investment in ongoing annual maintenance related to Downtown. o Estimated Cost: Varies by project o Project Details: During this phase, stakeholders discussed the need to set aside funds from the TIRZ for care and maintenance of this key area of the City. Stakeholders saw that improvements had been made in some areas, but ongoing maintenance was a challenge. Study Phase Three: Preliminary Tax Revenue Forecast The next phase of the project was to review the TIRZ revenue collection and create a modified tax revenue forecast. The study found that the growth in the TIRZ was tracking as projected by the original Finance Plan, but the primary growth driver was growth in assessed value of existing properties, instead of growth in new value being added in the Zone. Of the projects identified in the original catalyst study, only one project had been implemented, a mixed-use, transit-oriented development on East Hickory Street. Based on the data collected, TXP also put together a forecast. The forecast shows that, assuming a conservative amount of growth and no new development, the TIRZ will hit its $24.8 million cap before it reaches its term (the red line indicates the possible years the TIRZ will hit the cap). [see graph on next page] 47 Key findings in this phase include: • Overall, the TIRZ revenue has been consistent with the original forecast, but the value increase has been driven by an increase in value of existing properties and not necessarily new investments in Downtown. • Only one of the five catalytic project areas has been developed, but there is significant interest from developers in pursuing projects so future development might still occur. • Assuming no new developments and a 4% appreciation rate (growth in assessed value), the TIRZ will hit the $24.8 million dollar cap before Year 30. Study Phase Four: Modify the Tax Revenue Forecast (Not Yet Complete) Based on the projects outlined in Phase Two, the tax revenue forecast can be updated to reflect the assumed return on investment for certain projects. This will guide the TIRZ Board and City Council in deciding on if the TIRZ Project Plan or Financing Plan need to be updated or revised, if County participation is desired and at what level, or if any of the parameters of the TIRZ (term, cap, participation rate) need to be adjusted to accomplish the chosen outcomes. Study Phase Five: Public Input (Partially Complete) In this phase of the study, TXP and staff met with developers, Denton Main Street Association, and other downtown stakeholders to review the original TIRZ goals and plans, update stakeholders on the findings from the preliminary financial data review, and discuss the possible future TIRZ projects and the return on investment. This included hosting two developer-focused forums, one meeting with the DMSA executive board, and one general downtown stakeholder meeting in coordination with DMSA. During these meetings, TXP and staff presented both quantitative and qualitative data collected to date and asked for feedback regarding projects or ideas for improving downtown Denton. Key feedback received in this phase included: Downtown Businesses/Stakeholders • Lighting and walkability projects are key to the growth of Denton. • Continued consensus that building more downtown parking is not a priority but connecting existing parking lots with the downtown area (sidewalks, lighting) would be beneficial. 48 • Mews streets projects are very important and would expand the walkable footprint of downtown. • Large-scale projects, like a full corridor redevelopment, is costly to businesses. Downtown businesses are struggling with COVID-19 response and resulting economic impacts. This needs to be considered if the City is going to start an infrastructure project that impacts businesses. • Smaller projects (like sidewalks) are more appropriate in the short-term. • Drainage projects are necessary to create development opportunities but doesn’t benefit majority of businesses in TIRZ and may not be in alignment and spirit of goal of TIRZ since only a small area benefits from the improvements. • Businesses see value in expanding the Downtown Reinvestment Grant Program as many renovation projects far exceed the value of the grants and bring in private investment. Developers • Indicated the density is key and Downtown needs more daytime office employment and traffic to balance nighttime activity. • Office rents are not high enough to justify new construction without some public-private partnership. • There is uncertainty as to how construction/development will be impacted by COVID in the short- and mid-term. • Developers would like to use TIRZ funds to incentivize larger economic development projects, so that things like additional mixed-use developments or smaller office/flex spaces can be developed. • Mews streets will not create a lot of new value because there are not as many redevelopment opportunities in those areas. Key findings in this phase include: • No clear consensus between developers and businesses as to what would benefit the area the most or generate the most return on investment (ROI) for Downtown. o Groups had different definitions of ROI, with one seeing ROI as an increase in assessed value, while the other sees ROI as creation of a more walkable, useable, beautified downtown that will draw in more visitors. • Because downtown lacks an overall vision, prioritizing TIRZ projects are a challenge. If any future action requires amendment to the Project Plan or Financing Plan, additional public hearings will be required. Study Phase Six: Update TIRZ Final Project & Financing Plan (Not Yet Complete) Once the TIRZ Board and City Council have provided direction regarding goals and uses of TIRZ revenues, and TIRZ eligible projects are prioritized, the TIRZ Project Plan and Financing Plan may need to be updated. In addition, the City may need to request County participation should additional financing be needed for certain projects. Study Phase Seven: Final Plan Presentations & Product (Not Yet Complete) Once the TIRZ Board and City Council have provided direction, TXP will complete a final Plan presentation and provide the final deliverables needed. Travis James from TXP, Inc. presented the study findings and facilitated discussions at the September 23 and October 21, 2020 TIRZ Board meetings. The discussion focused on the preliminary data and scenarios outlined later in this report. 49 Items for Council Discussion Throughout the TIRZ study, the goal has been to use the data being collected to make strategic decisions about the Downtown TIRZ and how best to allocate the revenues collected. This includes reviewing specific strategies and outcomes, analyzing possible ROI, and working with the TIRZ Board to develop a recommendation to make to City Council. The primary focus has been on identifying and analyzing eligible projects that have been suggested by TIRZ Board members, City Council members, or other stakeholders, are eligible under the existing Project Plan, and are feasible given the $24.8 million cap on TIRZ revenues. The next page includes scenarios for consideration and discussion regarding identified projects. In addition to the projects identified on the next page, staff is seeking direction on the following: • What is the primary goal(s) of the TIRZ in regards to funding projects: o Improving infrastructure o Increasing developable acreage o Improving central core, closest to Downtown Square o Improving aesthetics and increasing maintenance o Assisting and incentivizing new development or redevelopment o Encouraging historic preservation or redevelopment o Improving walkability and safety • Under what circumstances would the TIRZ Board recommend and City Council approve amendments to the TIRZ funding cap ($24.8 million) or boundaries. • Under what circumstances would the TIRZ Board recommend and City Council approve pursuing a request to Denton County to join the Downtown TIRZ. [See next page for table] 50 Project Cost Timeline of Positive Impact ROI Items for Discussion PEC 4, Phases 3 & 4 $17.8 million ($24.8 million financed cost) Long-term Increase to surrounding land values; and possible new development • Would require commitment of all remaining TIRZ revenues. • Could request County participation. • Could consider amending revenue cap (amendment to project plan and finance plan). • Would require amending boundaries to fund full project. • Value to current TIRZ overall is limited in short- term. Mews Streets $7 million Short-term Increase to surrounding land values; some new development or redevelopment possible • Would use a large percentage of remaining revenues. • Could be completed with some revenues remaining for other improvements. Corridor Improvements $7 to $8 million Medium- term Increase to impacted land values; possible new development or redevelopment • No immediate impact but could open a new corridor up for development. • Have seen corridor improvements in downtown raise values significantly over time. • Would have immediate impacts on business operations. • No consensus on which corridor would be the most beneficial to improve. • May only want to do sidewalk/lighting work in the near term to help businesses and visitors. Developer Incentives $5 to $10 million (varies) Immediate Varies by project • Will help increase new value in TIRZ and TIRZ may see addition of public amenities. • Interest continues to be high for new development. • Office, townhomes, mixed-use, flex (live/work) space developments possible. • New development could increase the timeline for reaching the TIRZ revenue cap. • TIRZ not required for incentives, but cash incentives may not be possible if TIRZ doesn’t build up reserves. Continue or Expand Downtown Grant Program $50,000 to $100,000 (per year) Immediate Varies by project • Small, localized improvements will add to aesthetics of downtown and help convert underutilized spaces. • Small funding amounts are not enough to catalyze projects but do help offset some costs. • Current Reinvestment Grant Program would need to be analyzed further and new program parameters brought forward. • May not be possible if all funds go toward larger catalyst projects. General Maintenance Varies Immediate Nominal • TIRZ could set aside a small maintenance budget each year to maintain new improvements. 51 PRIOR ACTION/REVIEW (Council, Boards, Commissions) November 20, 2019 – TXP, Inc. facilitated a discussion with the Downtown TIRZ Board regarding the study being conducted. September 23, 2020 – TXP, Inc. presented initial findings and data analysis to the Downtown TIRZ Board. The TIRZ Board discussed possible project prioritization. October 21, 2020 – The Downtown TIRZ Board reviewed proposed options and projects. The Board recommended funding the PEC 4, Phases 3 and 4 drainage project from the TIRZ and recommended changing the TIRZ boundaries to encompass the project. In addition, the Board requested staff review additional funding options for the PEC 4 project so that the TIRZ could split the cost. The Board also recommended continuing to use additional funding for smaller infrastructure projects, such as lighting and sidewalks, and the Downtown Reinvestment Grant program. With any remaining funds, the Board recommended considering economic development incentives for development projects. EXHIBITS 1. Agenda Information Sheet 2. TXP Scope of Work 3. RTKL Catalyst Study 4. TIRZ Project Plan 5. TIRZ Finance Plan 6. TIRZ Project Summary & Timeline 7. Presentation Respectfully submitted: Jessica Rogers Director of Economic Development 52 Page 1 1310 South 1st Street, Suite 105 | Austin, Texas 78704 | (512) 328-8300 phone | (512) 462-1240 fax | www.txp.com August 23, 2019 Antonio Puente, Jr. Chief Financial Officer City of Denton 215 E. McKinney Denton, Texas 76201 Mr. Puente, Thank you for the opportunity to provide consulting services to the City of Denton related to updating the project and finance plan for Tax Increment Financing Reinvestment Zone No. 1 (Downtown TIRZ). This letter summarizes our conversations regarding this project and can serve as the draft scope of work between the City of Denton and TXP, Inc. As background, TXP has decades of experience assisting clients with all phases of TIRZs as well as similar public finance tools such as Public Improvement Districts. First, TXP offers unbiased guidance regarding whether or not a TIRZ or any other instruments is the appropriate financing mechanism to implement. Second, TXP is frequently retained to review and update the tax revenue projections of existing TIRZs. Third, TXP has a 30-year track record of successfully working with all levels of government including cities, counties, hospital districts, community colleges, and water districts. Past TIRZ clients for this type of analysis include Austin, Brownsville, Dallas, Dayton, El Paso, Fort Worth, Irving, McKinney, New Braunfels, Odessa, and San Antonio. Last, the firm has experience working on small and large acreage TIRZ plans that have unique characteristics. After you have reviewed the attached draft Scope of Work, please do not hesitate to contact me. Best regards, Travis D. James Vice President Attachment ADocuSign Envelope ID: 1BC89243-D20C-459D-BF82-1BFFA8A332F9 53 Page 2 1310 South 1st Street, Suite 105 | Austin, Texas 78704 | (512) 328-8300 phone | (512) 462-1240 fax | www.txp.com City of Denton TIRZ #1 - Project and Finance Plan Update TXP will rely on the City of Denton (Client) legal resources to manage the legal requirements associated with TIRZ public notices and legal documents. If required, TXP can recommend a law firm to assist for an additional fee. Step 1: Data Collection & Stakeholder Input The initial phase of the project requires an assessment of the Downtown TIRZ area. TXP will collaborate with City of Denton staff to collect historic data on the performance of the TIRZ, review existing documents, and identify future catalytic projects. The original TIRZ feasibility study identified 5 catalytic projects (labeled A to E). TXP and the Client will need to update this list of projects and identify potential corridors that could attract future redevelopment activity. As part of this task, TXP will obtain parcel data, GIS files, and taxable values from the Denton County Appraisal District. TXP understands the City of Denton already has already collected some of this information. Step 2: Infrastructure Cost Analysis, Identification, and Evaluation Following the collection of relevant data, TXP will work with the Client, private land owners, and other stakeholders to identify the necessary infrastructure projects required in the TIRZ. TXP understands the City of Denton has already identified a drainage project that could be funded from the TIRZ. In this task, the existing TIRZ project plan will be preliminary updated. Step 3: Preliminary TIRZ Tax Revenue Forecast Using the findings of Steps 1 and 2, TXP will forecast annual property tax revenues generated within the TIRZ assuming the existing duration (2041), declining participation rate, and boundary. This task will be complete in October 2019. TXP will review the findings of Step 3 with the Client and other stakeholders as part of Trip #1. Step 4: Modify the TIRZ Tax Revenue Forecast TXP understands the current TIRZ structure might not generate sufficient revenue to pay for needed infrastructure in the area. In Step 4, TXP will run revenue scenarios for the TIRZ assuming the TIRZ duration is extended, the City of Denton modifies its participation rate, the TIRZ boundary is expanded, and other taxing jurisdictions join the TIRZ. TXP will review the findings of Step 4 with the Client and other stakeholders as part of Trip #2. DocuSign Envelope ID: 1BC89243-D20C-459D-BF82-1BFFA8A332F9 54 Page 3 1310 South 1st Street, Suite 105 | Austin, Texas 78704 | (512) 328-8300 phone | (512) 462-1240 fax | www.txp.com Step 5: Update/Amend TIRZ Final Project and Financing Plan Based on the findings in Step 4 and direction from Denton City Council, TXP will update the TIRZ #1 project and finance plan. This might require the City of Denton to expand the boundaries of the TIRZ and alter other assumptions. TXP recommends some decisions such as expanding the TIRZ be made before the end of 2019. Step 6: Final Plan Presentations and Product The TXP project team will present the findings to the Client during Trip #3. TXP will provide the final report in Word document form as well as GIS mapping files. Once the work is completed, effective communication of the findings and recommendations is the bridge to actual implementation. Preliminary Project Timeline TXP believes it will take 3 to 4 months to complete the TIRZ #1 updated project/finance plan. This would include up to four trips as outlined in the proposed scope of work. Step Month 1 Month 2 Month 3 Month 4 Sept. Oct Nov Dec 1: Data Collection & Stakeholder Input 2: Review Infrastructure Projects & Costs 3: Preliminary Tax Revenue Forecast Trip #1 4: Modify the TIRZ Tax Revenue Forecast Trip #2 5: Update TIRZ Final Project & Financing Plan 6: Final Plan Presentations and Product Trip #3 Preliminary Project Timeline The professional fee will be a fixed price fee of $39,500. This fee includes all “normal” costs of doing business (ex. routine copying costs). Travel expenses and other Client approved costs (ex. data from a third-party) will be billed at cost to the client. TXP will be paid within 30 days of submitting an invoice. DocuSign Envelope ID: 1BC89243-D20C-459D-BF82-1BFFA8A332F9 55 Catalyst Project A Transit Oriented Development When RTKL proposed this catalyst project, the exact location of the transit station had not been identified. RTKL recommended the southeast corner of Bell and McKinney as the best site. Although the site is not the same, the concept of the TOD is still valid. Elements of the Project: • Historic fabric with targeted infill around a mid-block pedestrian promenade • Spaces consisting of shops, restaurants, etc. to link square to transit. • Anchor for gateway treatments Catalyst A Development Program Units/Spaces Square Feet Assumption Factors Retail/Office 16,700 Residential (Rental) 267 253,650 950 sf/unit Residential (For sale) 8 14,400 1,800 sf/unit Project Land Area 287,496 6.6 acres Surface Parking 71 23,075 325 sf/space Structured Parking 756 245,700 325 sf/space Estimated Project Value Office/Retail/Rental Housing $26,009,559 For-Sale Housing $1,302,000 Total Project Value $27,311,559 Estimated Project Cost Estimated cost includes purchase of land, demo of buildings, development of parking and facilities and developer profit of $3 million 33,754,938 Project Margin Gap largely due to structured parking (400 add’l spaces). Total estimated cost of structured parking $7.6 million. One of the best opportunities to create incremental value. 6,443,379 56 Catalyst Project B Wells Fargo Development RTKL recognized the potential for the development of the land east of the Wells Fargo building, as well as the small parking garage owned by Wells Fargo. The garage has since been demolished. It was RTKL who suggested the City contact Wells Fargo regarding the catalyst project concept. Elements of the Project: • Take advantage of under-utilized and undeveloped space • Provide shared parking garage to serve new and existing users • Strengthen core frame Catalyst B Development Program Units/Spaces Square Feet Assumption Factors Retail/Office 12,120 Residential (Rental) 110 104,500 950 sf/unit Residential (For sale) 6 10,800 1,800 sf/unit Project Land Area 191,664 4.4 acres Surface Parking 40 13,000 325 sf/space Structured Parking 315 102,375 325 sf/space Estimated Project Value Office/Retail/Rental Housing $12,433,533 For-Sale Housing $1,116,000 Total Project Value $13,549,533 Estimated Project Cost Estimated cost includes purchase of land, demo of buildings, development of parking and facilities and developer profit of $1.7 million $18,423,214 Project Margin Gap largely due to structured parking (150 add’l spaces). Total estimated cost of structured parking $3.2 million. Opportunities to build on current quality investment. $4,873,680 57 Catalyst Project C North Downtown RTKL selected the area south of Parkway and north of McKinney between Locust and Bolivar as Project C. Although not shown as a part of this project, RTKL also suggested that the City might consider including City owned property for this project (Old Central Fire Station and City Hall West). Elements of the Project: • Infill residential of varying densities and price points to increase critical mass and diversity in downtown. • RTKL suggested City facilities could become commercial properties. No costs or values were included in this report for the City facilities. Catalyst C Development Program Units/Spaces Square Feet Assumption Factors Retail/Office 0 Residential (Rental) 77 73,150 950 sf/unit Residential (For sale) 65 97,500 1,500 sf/unit Project Land Area 333,234 7.7 acres Surface Parking 272 88,400 325 sf/space Structured Parking 0 0 Estimated Project Value Rental Housing $6,306,343 For-Sale Housing $9,672,000 Total Project Value $15,978,343 Estimated Project Cost Estimated cost includes purchase of land, demo of buildings, development of parking and facilities and developer profit of $1.7 million $19,089,552 Project Margin Gap largely due to rent risk (proving up market). Opportunities to build residential density to support downtown commercial space. $3,111,209 58 Catalyst Project D West Downtown RTKL identified the area between Oak and Hickory Streets and Cedar and Carroll Blvd. as Project D. Elements of the Project: • Infill residential of varying densities and price points to increase critical mass and diversity in downtown • Alternative office product with potential housing integration • Anchor for gateway treatments Catalyst D Development Program Units/Spaces Square Feet Assumption Factors Office 134,400 Residential (Rental) 31 33,480 1,080 sf/unit Residential (For sale) 0 0 Project Land Area 267,894 6.2 acres Surface Parking 68 22,100 325 sf/space Structured Parking 476 154,700 325 sf/space Estimated Project Value Office/Retail/Rental Housing $26,725,782 For-Sale Housing Total Project Value $26,725,782 Estimated Project Cost Estimated cost includes purchase of land, demo of buildings, development of parking and facilities and developer profit of $2.3 million $25,752,265 Project Margin Gap largely due to rent risk. Opportunity to create live/work environment in downtown. $973,517 59 Catalyst Project E McKinney Street Catalyst E represents the property on the south side of McKinney from Bell to Austin. About one block of the area is owned by Denton County and scheduled to be abandoned in the near future. Elements of the Project: • Historic fabric with targeted infill around mid-block pedestrian promenade • Spaces consisting of shops, restaurants, etc. o Estimates provided by RTKL referred to residential infill only Catalyst E Development Program Units/Spaces Square Feet Assumption Factors Residential (Rental) 137 130,150 950 sf/unit Residential (For sale) 9 16,200 1,800 sf/unit Project Land Area 303,613 7.0 acres Surface Parking 134 43,550 325 sf/space Estimated Project Value Rental Housing $11,220,376 For-Sale Housing $1,339,200 Total Project Value $12,559,576 Estimated Project Cost Estimated cost includes purchase of land, demo of buildings, development of parking and facilities and developer profit of $1.2 million $13,792,702 Project Margin Gap largely due to rent risk. One of best opportunities to create incremental value. $1,233,126 60 Examples of “Filling the Gap” for Catalyst Projects The following examples were prepared by RTKL in November 2005. Please note that the numbers have not been updated to reflect current tax rate or property values. Tax Increment Financing District (TIF) Development Type Total Sq Ft of Units Market Value Per SF/Unit Total Market Value Assessment Ratio Taxable Value Tax Rate Property Tax Revenue Retail/Office 163,220 $100 $16,322,000 1% $163,220 0.608 $99,262 Residential (rental) 622 $100,000 $62,200,000 1% $622,000 0.608 $378,269 Residential (for sale) 88 $200,000 $17,600,000 1% $176,000 0.608 $107,034 Totals $96,122,000 $961,220 $584,566 Less Current Base -96,000 Net Tax Increment $488,566 Special Improvement District (BIDs, PIDs, MMDs) Development Type Total Sq Ft of Units Market Value Per SF/Unit Total Market Value Assessment Ratio Taxable Value Tax Rate Property Tax Revenue Retail/Office 163,220 $100 $16,322,000 1% $163,220 0.100 $16,322 Residential (rental) 622 $100,000 $62,200,000 1% $622,000 0.100 $62,200 Residential (for sale) 88 $225,000 $19,800,000 1% $198,000 0.100 19,800 Totals $98,322,000 $983,220 $98,322 Sales Tax Sharing Development Type Total Sq Ft Retails Sales Per Sq Ft Total Retail Sales City Sales Tax Rate Total Sales Tax Revenue D/T Share 50% Retail 163,220 $250 $40,805,000 1.5% $612,075 $306,038 Totals $40,805,000 $612,075 $306,038 Gap Fill Summary Revenue Type Annual Amount 10-Year Amount TIF $488,566 $4,885,659 Special District $98,322 $983,220 Sales Tax Sharing $306,038 $3,060,375 Totals $892,925 $8,929,254 61 Downtown Redevelopment Implementation Strategies Denton, TX 09.13.05 62 TWU ~~ Foundation Analysis, interviews, and visual preference voting were undertaken to determine downtown’s market context and the development preferences of its stakeholders. University Corridor Golden Triangle UNT 63 ~~ Psychographic AnalysisTop Trade Area Lifestyle (Tapestry) Segments City of Denton Segment Trade Area Households Index to U.S. College Towns 7,114 2,532 Young and Restless 4,881 867 Aspiring Young Families 3,517 434 Dorms to Diplomas 3,486 2,009 Denton County Segment Households Index Up and Coming Families 34,395 614 Boomburbs 28,879 765 Young and Restless 25,486 844 Suburban Splendor 12,338 382 Neighborhoods in College Towns represent on-and off-campus living. This market has a strong presence of college students. Nearly 42 percent are enrolled in college and one-third of these students still live on campus. The median age is 25 years, with a high concentration of 18–24 year olds. Housing is a mix of affordable, multi-unit rentals and multi-income single-family detached homes with married couples. The median home value is $119,900. 64 ~~ Psychographic AnalysisTop Trade Area Lifestyle (Tapestry) Segments City of Denton Segment Trade Area Households Index to U.S. College Towns 7,114 2,532 Young and Restless 4,881 867 Aspiring Young Families 3,517 434 Dorms to Diplomas 3,486 2,009 Denton County Segment Households Index Up and Coming Families 34,395 614 Boomburbs 28,879 765 Young and Restless 25,486 844 Suburban Splendor 12,338 382 Convenience is the primary consideration for food purchases. Residents frequently eat out, order in, or eat ready-made or easy to prepare meals bought from the closest grocery store. Owning a laptop or desktop computer and being able to access the Internet are necessities. MTV and Comedy Central are their favorite cable television channels. In their leisure time, they enjoy playing sports, attending rock concerts and college football games, and going to the movies and bars. 65 ~~ Market AnalysisCurrently, the City of Denton has less retail space per capita than nearby urbanizing cities such as Frisco and Lewisville. If Denton County added 4.8 million s.f. of new retail space, it would reach 40 s.f. per capita (the current 4-county average) Over 875,000 s.f. of new retail demand is forecast over 10 yrs. based on projected trade area (through trade area growth and obsolescence) Retail Demand Analysis Primary Trade Area (City of Denton) Ten Year Demand Estimates 10-year Demand Category Current Demand from Trade Area Households (retail potential) Est. Sales / s.f. New Demand from Household Growth ($) New Demand from Household Growth (s.f.) New Demand from Turnover / Obsolescence (10-yr) Auto Parts, Accessories, and Tire Stores $18,378,814 $250 $8,051,666 32,207 Furniture & Home Furnishings Stores $19,106,016 $225 $8,370,249 37,201 Electronics & Appliance Stores $11,184,255 $225 $4,899,766 21,777 Bldg Mater., Garden Equip. & Supply $29,066,050 $300 $12,733,690 42,446 Food & Beverage Stores Grocery Stores $149,062,052 $375 $65,303,334 174,142 Specialty Food Stores $1,164,312 $350 $510,079 1,457 Beer, Wine, and Liquor Stores $8,555,229 $300 $3,748,003 12,493 Health & Personal Care Stores $25,036,635 $275 $10,968,424 39,885 Clothing and Clothing Accessories Stores $33,678,472 $200 $14,754,369 73,772 Sporting Goods, Hobby, Book, & Music $19,118,647 $200 $8,375,783 41,879 General Merchandise Stores $121,836,817 $325 $53,376,095 164,234 Miscellaneous Store Retailers $13,329,516 $200 $5,839,594 29,198 Food Services & Drinking Places Full-Service Restaurants $60,525,676 $225 $26,515,994 117,849 Limited-Service Eating Places $56,467,612 $325 $24,738,176 76,117 Special Food Services $2,933,502 $250 $1,285,152 5,141 Drinking Places (Alcoholic Beverages)$7,042,979 $350 $3,085,494 8,816 878,614 406,983 Source: U.S. Census, ESRI-BIS, Urban Land Institute, Leland Consulting Group Note: Assumes trade area household growth of 3.7% annually Note: Assumes 10% turnover from retail space obsolescence over 10 years (or approx. 25% of pre-1980 construction)66 Residential Demand Analysis Households 2005 38,624 Primary Trade Area (City of Denton)2010 46,272 CAGR 3.7% Residential Trade Area 2015 55,434 Ten Year Demand Estimates Household Growth (05-15)16,810 Demolition Rate/yr.0.02% Annual Pct. "2nd Home"3.0% Total Unit Requirement 17,392 Pct. Renters*40% Trade Area Demand from New Households (10-yr) Annual Income Range (2005 dollars) Approx. Rent Range Approx. Home Price Range Current HHs in Income Bracket (2005) Est. Net New HHs by Income Bracket Total Units Est. Pct. Renters Total Rental Units Total Ownership Units up to $15K up to $375 up to $50K 18%8%1,391 95%1,322 70 $15-25K $375 - $625 $50 to $85K 14%10%1,739 80%1,391 348 $25-35K $625 - $875 $85 to $120K 12%13%2,261 65%1,470 791 $35-50K $875 - $1,000 $120 to $175K 16%18%3,131 40%1,252 1,878 $50-75K $1,000+$175 to $250K 18%20%3,478 30%1,044 2,435 $75-100K $1,000+$250 to $350K 10%13%2,261 15%339 1,922 $100-150K $1,000+$350 to $500K 9%11%1,913 5%96 1,817 $150K and up $1,000+$500K and up 5%7%1,217 3%37 1,181 Totals 100%100%17,392 40%6,950 10,442 Source: ESRI-BIS, NCTCOG, U.S. Census, and Leland Consulting Group *Percent renters is an average of the existing percent renter households and the percent of new construction that is multifamily (since 2000) Notes: Household growth rate is based on NCTCOG projections ~~ Market Analysis Residential building permits have averaged 1,500+ units per year, although permits topped 2,000 in 2001 and close again in 2003. 10-yr. trade area growth at projected rates calls for almost 7,000 new rental units and 10,442 new for-sale units (although a portion of rental demand will be met by turnover of existing student- serving properties). 67 ~~ Market Analysis Over the next 10 years Denton should see new demand for approx. 300,000 s.f. of office space from job growth and another 180,000 s.f. from turnover/ replacement of older space. Summary of Office Space Demand from Employment Growth Primary Trade Area (City of Denton) Est. 2005 Jobs Annual Job Growth Rate* 10-yr. Job Growth Est. Pct. Office 10-yr. Office Demand from Job Growth (s.f.) Est. Existing Office Supply Est. 10-year Turnover/ Replacement Est. Office Demand From Turnover Agriculture & Mining 244 1.6%42 5%441 2,562 10%256 Construction 2,153 1.6%370 5%3,889 22,607 10%2,261 Manufacturing 3,428 1.6%590 5%6,192 35,994 10%3,599 Transportation 740 1.6%127 5%1,337 7,770 10%777 Communication 65 1.6%11 5%117 683 10%68 Electric, Gas, Water, Sanitary Services 18 1.6%3 5%33 189 10%19 Wholesale Trade 1,923 1.6%331 5%3,473 20,192 10%2,019 Retail Trade Summary 9,216 1.6%1,585 5%16,647 96,768 10%9,677 Finance, Insurance, Real Estate 1,952 1.6%336 80%56,413 327,936 10%32,794 Services (Non-Retail) Hotels & Lodging 348 1.6%60 5%629 3,654 10%365 Automotive Services 878 1.6%151 5%1,586 9,219 10%922 Entertainment & Recreation Services 591 1.6%102 5%1,068 6,206 10%621 Health Services 4,597 1.6%791 25%41,517 241,343 10%24,134 Legal Services 404 1.6%69 90%13,135 76,356 10%7,636 Education Institutions & Libraries 8,654 1.6%1,489 20%62,526 363,468 10%36,347 Other Services 4,567 1.6%786 25%41,246 239,768 10%23,977 Government 3,784 1.6%651 40%54,679 317,856 10%31,786 Other 59 1.6%10 30%639 3,717 10%372 Totals 43,621 7,504 305,566 1,776,285 177,629 Source: ESRIBIS, NCTCOG, Leland Consulting Group * Trade Area employment growth rate based on NCTCOG Note: Assumes 210 s.f. of office space per office employee 68 ~~ Physical Analysis There is strong urban definition in Square. There is a lack of urban “closure” outside the Square. The Square needs a stronger Context. 69 ~~ Physical Analysis Square to Transit Zone, Entry to Downtown, and Transition to UNT are all defined by the car. There is an opportunity to close these gaps. 70 ~ Inventory Analysis Improvements worth more than land Improvements worth less than land Little improvement value Government and Cultural Facilities 71 ~ Inventory Analysis Ownership outside Denton Ownership outside Texas 72 ~~ Planning Concepts ElmLocustCarrollMulberry McKinney Parkway Oak Hickory Emphasize street grid through infill development on street faces Provide interest from Transit to Square 73 ~~ Planning Concepts The Core Strengthening the “hook” Connectors Linking the “anchors” Infill Opportunities Encouraging “synergies” 74 ~ Catalyst Areas Five areas have been identified as redevelopment zones capable of viable catalyst development projects. Sycamore Hickory McKinney ElmLocustCarrollMulberry Oak Parkway Hickory Oak Pearl 75 ~ Catalyst Areas Five areas have been identified as redevelopment zones capable of viable catalyst development projects. These projects will rely on the strengthening of the Square through the roll-out of a retail and parking strategy.Sycamore Hickory McKinney ElmLocustCarrollMulberry Oak Parkway Hickory Oak Pearl 76 ~ Catalyst Project A Transit-Oriented infill development with shared parking garage between McKinney, Bell, Hickory and the Commuter Rail. Planned around existing historic structure, partnership defined by land assembly and parking.Sycamore Hickory McKinney ElmLocustCarrollMulberry Oak Parkway Hickory Oak Pearl Oak Hickory McKinney Old Mill 77 ~ Catalyst Project A Transit-Oriented infill development with shared parking garage between McKinney, Bell, Hickory and the Commuter Rail. Planned around existing historic structure, partnership defined by land assembly and parking.Carroll78 ~ Catalyst Project B Mixed-use infill adjacent to the Wells Fargo tower. New shared garage is added as southeastern parking anchor for the Square. Existing garage removed to make way for retail and motor bank with loft space above. Sycamore Hickory McKinney ElmLocustCarrollMulberry Oak Parkway Hickory Oak Pearl MULBERRY Wells Fargo 79 ~ Catalyst Project B Mixed-use infill adjacent to the Wells Fargo tower. New shared garage is added as southeastern parking anchor for the Square. Existing garage removed to make way for retail and motor bank with loft space above. 80 ~ Catalyst Project C Pocket park with new surrounding development to define northern gateway into Downtown. Includes adaptive reuse of existing buildings (old city hall) and provides a northwestern parking anchor for the Square.Sycamore Hickory McKinney ElmLocustCarrollMulberry Oak Parkway Hickory Oak Pearl PEARL City Hall West 81 ~ Catalyst Project C Pocket park with new surrounding development to define northern gateway into Downtown. Includes adaptive reuse of existing buildings (old city hall) and provides a northwestern parking anchor for the Square.CarrollOak 82 Sycamore Hickory McKinney ElmLocustCarrollMulberry Oak Parkway Hickory Oak Eagle ~ Catalyst Project D Mixed-use Office infill between Oak and Hickory along Carroll. Existing businesses incorporated into development; shared parking lined with live- work space. Verizon building now gains a “context.” Hickory Verizon First State Bank 83 ~ Catalyst Project D Mixed-use Office infill between Oak and Hickory along Carroll. Existing restaurants incorporated into development; shared parking lined with live- work space. Verizon building now gains a “context.” 84 ~ Catalyst Project E Residential infill with ground level service uses between McKinney, Oak, Austin and Bell. Provides an “urban edge” to contrast the municipal complex. Small scale live-work infill around existing structures on Oak.Sycamore Hickory McKinney ElmLocustCarrollMulberry Oak Parkway Hickory Oak Eagle Oak McKinney Melrose 85 ~ Catalyst Project E Residential infill with ground level service uses between McKinney, Oak, Austin and Bell. Provides an “urban edge” to contrast the municipal complex. Small scale live-work infill around existing structures on Oak. 86 Efforts Underway –Study Area 1.Establishing a set of criteria for infill and redevelopment projects –including measures of benefit to the community –tying criteria to potential incentives 2.Analyzing reduction and / or waiver of development fees and program rewards for past investment –since redevelopment projects oftentimes upgrade infrastructure –burden of public upgrades should not wholly transfer to early projects 3.Confirming and growing targeted areas for infill and redevelopment –refining market potential across land uses and product types –quantifying strategic public investment required 4.Preparing menu of public / private funding mechanisms for infrastructure and impact –(TIFs, special districts, etc.) –off-site development costs can be prohibitive and disproportionately imposed on early projects –district mechanisms promote equitability 5.Identifying positions within the city and support organizations where project coordination can occur–goal is to shepherd projects through system largely geared towards new development –advocates are needed at multiple levels of delivery ~87 Efforts Underway –Project Specific 1.Quantifying market share of specific land uses –in an effort to ensure that projects make sense not only in the study area, but the market 2.Matching lifestyle and product opportunities to concepts –revisiting psychographics and demographics, locally and regionally –striving for unique offerings with market support which will leverage the urban environment 3.Researching case studies –looking beyond the local experience for lessons learned, as well as roles and responsibilities of the partners 4.Preparing developing economic analysis (proformas) –based on the RTKL programs, quantifying any economic “gap” due to financial, regulatory or market barriers –preparing recommendations for refinement 5.Estimating fiscal impact of projects –quantifying the economic impact of the catalyst projects in the market –to inform and support Council from an economic perspective (return on investment) 6.Developing content for “story” and promotion materials –knowing that accurate numbers have not historically been reported for the market, determining the truth and developing a new investment “story”~88 ~ Implementation Next Steps: Determine 3 Projects Run Economics Package and Market Establish TIF District Streamline Process 89 Downtown Redevelopment Implementation Strategies Denton, TX 09.13.05 90 ORDINANCE NO. 2014°221 AN ORDINANCE OF THE CITY OF DENTON, TEXAS, APPROVING AN AMENDMENT TO THE PROJECT PLAN FOR TAX 1NCREMENT FINANCE ZONE NUMBER 1 DOWNTOWN TIF) BY ADDING EXAMPLES OF CERAIN TYPES OF PROJECTS WHICH MAY FACILITATE ECONOMIC DEVELOPMENT; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Manager, or his designee, is hereby authorized to execute an Amendment (the "Amendment") to the Project Plan for Tax Increment Finance Zone Number 1 Downtown TIF No. 1) in substantially the form of the Amendment, which is attached hereto and made a part of this ordinance for all purposes. SECTION 2. The City Manager, or his designee, is authorized to exercise the City of Denton's rights and duties as set forth in the Amendment. SECTION 3. This ordinance shall become effective immediately upon its passage and approvaL PASSED AND APPROVED this the ,'''w ATTEST: JENNIFER WALTERS, CITY SECRETARY BY . , APPROVED AS TO LEGAL FORM ANITA BURGESS, CITY ATTORNEY BY: "' V, ;#,y t y .,. day of ' -s' ' , 2014. I 'VVATTS, MAYOR 91 PROJECT PLAN — DENTON TIF NO. 1 PRELIMINARY PROJE C T PLAN December 2010 Tax Increment Financing Reinvestment Zone No. 1 City of Denton, Texas r . SCHRADER & CLINE, LLC George R. Schrader Larry D. Cline 4800 Broadway, Ste A Addison, TX 75001 972-661-1973 schcli(a swbell.net 92 December 2010 The City of Denton, Texas proposes to establish a Tax Increment Financing Reinvestment Zone ("TIF") for the purpose of dedicating the increase in tax revenue generated within the TIF to provide funds for public infrastructure to encourage accelerated development and redevelopment in the downtown area of the City. The TIF consists of approximately 225.73 acres and is more fully described in Project Plan Exhibit A. The City is creating this TIF to encourage accelerated development and redevelopment in this area of the City in an effort to stimulate new higher value, higher density development which would beneiit and be incentivized from the proposed public infrastructure improvements. It is expected that the TIF will exist for thirty (30) years or the date when all project costs are paid, whichever comes first. As set forth in Section 311.011 of the Tax Increment Financing Act of the Texas Tax Code Ann., the Project Plan for Tax Increment Financing Reinvestment Zone No. 1, Denton, Texas must and does include the following elements: 1. A map showing existing uses and conditions of real property in the TIF and a map showing proposed improvements to and proposed use of the property. The boundaries ofthe TIF are shown on the map labeled Project Plan Exhibit: B; Project Plan Exhibit: C shows existing land use within the TIF. Currently, the area is generally developed but contains less than ten percent residential. Project Plan Exhibit: D lists and defines the public improvements being proposed for the TIF; Project Plan Exhibit: E shows anticipated Future Land Use within the TIF. 1 93 PROJECT PLAN — DENTON TIF NO. 1 PRELIMINARY 2. Proposed changes of zoning ordinances, the master plan of the municipality, building codes, and other municipal ordinances. d Any changes to codes, ordinances, or master plan as a result of the creation of the TIF will be made through the standard process and procedures of the City. 3. A list of estimated non-project costs. Non-project costs within the TIF are those development costs not paid for by the TIF. These costs will include, but are not limited to, $207.5 million, which is comprised of new private development. 4. A statement of a method of relocating persons to be displaced as a result of implementing the plan. Although not anticipated, in the process of developing the TIF, any relocation will be made through the standard process and procedures of the City. 94 1 :,.. , 1: .: .' ..: .., ..': . . Boundary Description Beginning at the southwest corner of the ROW intersection of Carroll Blvd. and Sycamore, the PO1NT OF BEGINNING; THENCE, north along the west ROW of Carroll Blvd. to the northwest corner of the ROW intersection of Carroll Blvd. and W. Parkway Street; THENCE, east along the north ROW of W. Parkway Street to the northeast corner of the ROW intersection of W. Parkway Street and Locust; THENCE, south along the east ROW of Locust to the north ROW of McKinney; THENCE, east along the north ROW of McKinney to a point directly north of the southeast corner of the ROW intersection of McKinney and N. Bradshaw Street; THENCE, south across McKinney and continuing south along the east ROW of N. Bradshaw Street continuing directly south across E. Hickory Street to the south ROW of E. Hickory Street; THENCE, west along the south ROW of E. Hickory Street to the northeast corner of a tract in the Fred Hill Addition, Block A, Lot 1; THENCE, south and east following the property line of a tract in the Fred Hill Addition, Block A, Lot 1 to the northwest corner of a 1.406 acre tract, A1184A H. Cisco, Tract 14; THENCE, south along the west property line of a 1.406 acre tract, A1184A H. Cisco, Tract 14 to its intersection with the north property line of a 1.694 acre tract A1184A H. Cisco, Tract 15; THENCE, west and south along the north and west property line of a 1.694 acre tract A1184A H. Cisco, Tract 15 to the northwest corner of a 0.16 acre tract, A1184A H. Cisco, Tract 20; THENCE, south along the west property line of a 0.16 acre tract, A1184A H. Cisco, Tract 20 to the north ROW of 5ycamore; THENCE, directly south across Sycamore to the south ROW of Sycamore; THENCE, west along the south ROW of Sycamore to the northwest corner of the Oakwood Cemetery; THENCE, south along the west property line of the Oakwood Cemetery to the north ROW of Prairie; THENCE, directly south across Prairie to the south ROW of Prairie; THENCE, west along the south ROW of Prairie to the southwest corner of the ROW intersection of Prairie and Elm; 3 95 PROJECT PLAN — DENTON TIF NO. 1 PRELIMINARY Boundary Description THENCE, north along the west ROW of Elm to the south ROW of Sycamore; THENCE, west along the south ROW of Sycamore to the southwest corner of the ROW intersection of Sycamore and Carroll Blvd. and the POINT OF BEGINNING, and containing a total area of approximately 225.73 acres. 96 PROJECT PLAN — DENTON TIF NO. 1 PRELIMINARY TIF Boundary EXHIBIT B Legend TIF Boundary Centerline Streets perty Description Acreage w/or w/o Agr use Cable Company uplex Exempt Gas Company Multifamily Phone Company Real and Commercial Single Family Townhome Vacant Commercial Lots N W E 5 April 16 2010 Miles Th s map Is a graphlc represeMalbn preparetl bythe Qty oF Dentonand Is Intendetl for use only as a reference. DataAeplcted 0 O,d5 0 1 02 0.3 0.4 Is not guaranteed for accuracyand may be subJect to revlslon at ary tlme wNhoW notlfkatlon. A ReplsSerod Surveyorfor the State of TeHas was not consutted. ForSurvey level eacurecy, supervlslon antlcertlflcetlon o11he producetl tlata by aReglstered Professlonal Land Surveyafor the 51a1e of Texas would need to be performed 97 i,, , . , .. Legend TIF Boundary Centerline Streets perty Description Acreage wlor w/o Agr use Cable Company Duplex Exempt Gas Company Multifamily Phone Company Real and Commercial Single Family Townhome Vacant Commercial Lots 4? E April'iG i 19 Miles Thls map Is agraphk ropresentatbn prepared bylhe CHy oF Denton and Is Intended for use only as a reference. Data tleplatetl 0 0.05 0.1 02 0.3 0.4 s notguarorM1eed fa accurncy and may be suhJect to revlslon a1 arry 11me wlthout notlflcatlon. A Reglstered 9urveyor for theStafeo1Texaswasnolcansulted. ForSurvey level accura y, s ervlslon andcertlflcatlon oilhe produced dala by a Reglstered ProFesslonal Land Surveyor forthe Stafe oi Te as would needto be performed 98 i, , , . . , . EXHIBIT D Project Plan PROJECT ESTIMATED COST, $M Parking / Transportation 8.0 u. _ ... Complete Streets 7•9 Support forpowntown Projects 4.9 Utility / Drainage Improvements 4.0 w _. ......_ m._ v TOTAL 24. g Project Defnitions Parkin /portation: Parking includes, but is not limited to, parking garages; surface parking; parking lighting; and parking signage and wayfinding. This project category was designed to provide adequate public facilities for transportation and to foster Transit Oriented Development TOD) that will occur as a result of the planned transit station that will link Denton with passenger rail service to the City of Carrollton, where riders can transfer to the Dallas Area Rapid Transit (DART) system into the Dallas/ Fort Worth metroplex. The goal is to create compact, walkable, pedestrian-centered developments to enhance and act as a catalyst to spur additional development and redevelopment in the district. Complete Streets: are "multi-functional, pedestrian-oriented, aesthetically-pleasing, and safe and inviting for residents and visitors. Redeveloping the existing downtown street network into complete streets will create a pleasing public realm, which in turn supports and encourages a wide variety of new development and investment" according to the Downtown Implementation Plan. Elements of complete streets include the building to building improvements which may encompass: sidewalks, shared travel lanes (e.g. bus and bicycle), parallel and angled parking, pedestrian crosswalks, pedestrian and emergency bulb (American with Disabilities Act (ADA) accessibility), awnings, street improvements, planters, pedestrian street furniture, bike racks and pedestrian lighting. Downtown Proiects: may include grants, loans and services for public and private development. Eligible TIF project costs axe not limited to public uses and may also include projects that involve: historic preservation, demolition, environmental remediation and economic development grants. Chapter 380 of the Local Government Code grants municipalities in Texas the authority to offer grants and loans of public funds to stimulate economic development. The chapter also includes a provision for the use of City employees, facilities and services. An example of a City service may include additional public safety personnel to serve the increased population created by the transit station and the surrounding transit oriented development. Solid 7 99 1 . fD:i`:ff Y'1 1, Project Plan waste and recycling services tailored to serve the downtown area is another example of a public service. Pursuant to the Texas Local Government Code, section 272.001, the City of Denton may utilize City-owned property that is located in a reinvestment zone to facilitate economic projects which the City' and TIF Board deem appropriate and desirable. The City may acquire, lease, sell or otherwise transfer property to accomplish the public purpose of economic development hat is consistent with the Project Plan. Such projects may include public-private partnerships, transit-oriented developments, or the recruitment of specific industries including, but not limited to, hi-tech or emerging technology companies, local start-up businesses, artesian or "maker" industries, the creative sector, bakeries, microbreweries, micro-distilleries, wineries, grocery stores, or other industries that the TOF Board and the City Council deem desirable. Utility Draina The downtown TIF district has an aging infrastructure and a number of properties that are situated in the floodplain making proper utility drainage an important component of the project plan. Utility drainage encompasses the physical provisions to accommodate and regulate stormwater runoff to preclude excessive erosion and sedimentation and to control and regulate the rate of flow. Facilities/systems can include natural features and conduits, channels, ditches, swales, pipes, detention devices or other devices designed or intended to carry, direct, detain or otherwise control stormwater," according the Denton Development Code. Projects may include one or more categories that may be leveraged as an incentive for development in the TIF district. An example of such a project, that would include both the parking/transportation and the downtown project categories, is a public private partnership for the construction of a parking garage and mixed use development that includes a public investment for additional parking for the public. 100 PROJECT PLAN - DENTON TIF NO. 1 PRELIMINARY EXHIBIT E Future Land Use 101 FINANCE PLAN – DENTON TIF NO. 1 FINAL 1 FINAL FINANCE PLAN December 2010 Tax Increment Financing Reinvestment Zone No. 1 City of Denton, Texas George R. Schrader Larry D. Cline 4800 Broadway, Ste A Addison, TX 75001 972-661-1973 schcli@swbell.net December 2010 102 FINANCE PLAN – DENTON TIF NO. 1 FINAL 2 The Financing Plan provides information on the projected monetary impact that the formation of the Tax Increment Financing Reinvestment Zone (TIF) could have on the property described in Finance Plan Exhibit: A and shown in Finance Plan Exhibit: B. It will also describe how that impact can be utilized to enhance the area and region through leveraging the resources of each entity that participates in the project. Below is a summary of the Financing Plan items required by law. 1. The proposed public improvements in the TIF may include: Capital costs, including the actual costs of the construction of public works, public improvements, new buildings, structures, and fixtures; and the actual costs of the acquisition of land and the clearing and grading of land; Financing costs, including all interest paid to holders of evidences of indebtedness or other obligations issued to pay for project costs and any premium paid over the principal amount of the obligations because of the redemption of the obligations before maturity; Any real property assembly costs; Professional service costs, including those incurred for architectural, planning, engineering, and legal advise and services; Any relocation costs; Organizational costs, including costs of conducting environmental impact studies or other studies, the cost of publicizing the creation of the TIF, and the cost of implementing the project plan for the TIF; Interest before and during construction and for one year after completion of construction, whether or not capitalized; The amount of any contributions made by the municipality from general revenue for the implementation of the project plan; Imputed administrative costs, including reasonable charges for the time spent by employees of the municipality in connection with the implementation of a project plan; The cost of operating the TIF and project facilities; and Payments made at the discretion of the governing body of the municipality that the municipality finds necessary or convenient to the creation of the TIF or to the implementation of the project plans for the TIF. 103 FINANCE PLAN – DENTON TIF NO. 1 FINAL 3 The specific capital improvement projects anticipated to be undertaken in the Denton TIF No. 1, are included in Finance Plan Exhibit: C. 2. Estimated Project Cost of TIF, including administrative expenses. Project costs are estimated at approximately $24.8 million dollars. Specific cost estimates are included in Finance Plan Exhibit: C. 3. Economic Feasibility Study. An economic feasibility analysis has been completed and is included as Finance Plan Exhibit: D. 4. The estimated amount of bonded indebtedness to be incurred. If initial project costs are not advanced by a Developer, the City of Denton may consider issuing bonds when tax increment funds exceed the amount necessary to support debt service. 5. The time when related costs or monetary obligations are to be incurred. Please refer to Finance Plan Exhibit: C for details regarding the type of improvement costs anticipated. The timing will be monitored by the TIF Board to insure adequate TIF funds are available. 6. A description of the methods of financing all estimated project costs and the expected sources of revenue to finance or pay project costs including the percentage of tax increment to be derived from the property taxes of each taxing unit on real property in the TIF. Project costs will be financed through loans advanced by developers or by the use of tax increment funds received on a pay-as-you-go basis. No new debt is envisioned at this time, but bonds may be issued at a later date when adequate tax increment has been created to support debt service. The revenue sources will be the real property taxes captured by the TIF, which will account for 100% of revenues used to fund project costs or bond debt service. For the Financial Plan, the City will participate at varied tax rates for thirty (30) years. 7. The current total appraised value of taxable real property in the TIF. The current appraised base value of the taxable real property in the TIF using the 2010 certified values provided by the Appraisal District is $80.2 million. 8. The estimated appraised value of the improvements in the TIF during each year of its existence. The estimated appraised value of the improvements in the TIF per year is listed in the following FINANCE PLAN TABLE 1. 104 FINANCE PLAN – DENTON TIF NO. 1 FINAL 4 TABLE 1 Assessed Real Property Value Including Anticipated New Development Years 2010-2039 YEAR TOTAL ASSESSED VALUE, $M 2010 80.2 2011 81.6 2012 95.5 2013 100.2 2014 115.1 2015 118.9 2016 137.6 2017 145.5 2018 149.3 2019 162.2 2020 168.7 2021 177.1 2022 191.6 2023 200.2 2024 209.8 2025 223.9 2026 234.1 2027 244.3 2028 259.6 2029 266.9 2030 277.8 2031 283.7 2032 294.6 2033 300.6 2034 311.7 2035 318.3 2036 327.9 2037 334.6 2038 344.4 2039 351.2 105 FINANCE PLAN – DENTON TIF NO. 1 FINAL 5 The estimated annual incremental funds available from future development in the TIF are listed in the following table. TABLE 2 Annual Incremental Funds Provided for TIF No. 1 Years 2010-2040 Year ASSESSED VALUE $M BASE ASSESSED VALUE $M ANNUAL CAPTURED VALUE $M TIF FUND, $K 2010 80.2 80.2 -- -- 2011 81.6 80.2 1.4 -- 2012 95.5 80.2 15.3 10 2013 100.2 80.2 20.0 106 2014 115.1 80.2 34.9 138 2015 118.9 80.2 38.7 241 2016 137.6 80.2 57.4 254 2017 145.5 80.2 65.3 376 2018 149.3 80.2 69.1 428 2019 162.2 80.2 82.0 453 2020 168.7 80.2 88.5 537 2021 177.1 80.2 96.9 549 2022 191.6 80.2 111.4 602 2023 200.2 80.2 120.0 692 2024 209.8 80.2 129.6 745 2025 223.9 80.2 143.7 805 2026 234.1 80.2 153.9 892 2027 244.3 80.2 164.1 955 2028 259.6 80.2 179.4 1,019 2029 266.9 80.2 186.7 1,114 2030 277.8 80.2 197.6 1,159 2031 283.7 80.2 203.5 1,159 2032 294.6 80.2 214.4 1,193 2033 300.6 80.2 220.4 1,257 2034 311.7 80.2 231.5 1,292 2035 318.3 80.2 238.1 1,357 2036 327.9 80.2 247.7 1,396 2037 334.6 80.2 254.4 1,452 2038 344.4 80.2 264.2 1,492 2039 351.2 80.2 271.0 1,549 2040 -- -- -- 1,589 TOTAL 351.2 80.2 271.0 24,811 2010 TIF CONTRIBUTION TAX RATE / $100 VALUATION Tax Rate / $100 Valuation YEARS 1 - 5 YEARS 6 - 10 YEARS 11 - 20 YEARS 21 - 30 City of Denton 0.68975 0.68975 0.6552625 0.6207750 0.5862875 9. The duration of the TIF: 106 FINANCE PLAN – DENTON TIF NO. 1 FINAL 6 The TIF was created in 2010. It is proposed that the TIF exist for thirty (30) years with termination of the TIF set as 2039 or the date when all project costs are paid and any debt is retired, whichever comes first. EXHIBIT A Boundary Description Beginning at the southwest corner of the ROW intersection of Carroll Blvd. and Sycamore, the POINT OF BEGINNING; THENCE, north along the west ROW of Carroll Blvd. to the northwest corner of the ROW intersection of Carroll Blvd. and W. Parkway Street; THENCE, east along the north ROW of W. Parkway Street to the northeast corner of the ROW intersection of W. Parkway Street and Locust; THENCE, south along the east ROW of Locust to the north ROW of McKinney; THENCE, east along the north ROW of McKinney to a point directly north of the southeast corner of the ROW intersection of McKinney and N. Bradshaw Street; THENCE, south across McKinney and continuing south along the east ROW of N. Bradshaw Street continuing directly south across E. Hickory Street to the south ROW of E. Hickory Street; THENCE, west along the south ROW of E. Hickory Street to the northeast corner of a tract in the Fred Hill Addition, Block A, Lot 1; THENCE, south and east following the property line of a tract in the Fred Hill Addition, Block A, Lot 1 to the northwest corner of a 1.406 acre tract, A1184A H. Cisco, Tract 14; THENCE, south along the west property line of a 1.406 acre tract, A1184A H. Cisco, Tract 14 to its intersection with the north property line of a 1.694 acre tract A1184A H. Cisco, Tract 15; THENCE, west and south along the north and west property line of a 1.694 acre tract A1184A H. Cisco, Tract 15 to the northwest corner of a 0.16 acre tract, A1184A H. Cisco, Tract 20; THENCE, south along the west property line of a 0.16 acre tract, A1184A H. Cisco, Tract 20 to the north ROW of Sycamore; THENCE, directly south across Sycamore to the south ROW of Sycamore; 107 FINANCE PLAN – DENTON TIF NO. 1 FINAL 7 THENCE, west along the south ROW of Sycamore to the northwest corner of the Oakwood Cemetery; THENCE, south along the west property line of the Oakwood Cemetery to the north ROW of Prairie; THENCE, directly south across Prairie to the south ROW of Prairie; THENCE, west along the south ROW of Prairie to the southwest corner of the ROW intersection of Prairie and Elm; Boundary Description THENCE, north along the west ROW of Elm to the south ROW of Sycamore; THENCE, west along the south ROW of Sycamore to the southwest corner of the ROW intersection of Sycamore and Carroll Blvd. and the POINT OF BEGINNING, and containing a total area of approximately 225.73 acres. 108 FINANCE PLAN – DENTON TIF NO. 1 FINAL 8 EXHIBIT B Property Boundary Map 109 EXHIBIT C PROJECT ESTIMATED COST, $M Parking / Transportation 8.0 Complete Streets 7.9 Support for Downtown Projects 4.9 Utility / Drainage Improvements 4.0 TOTAL 24.8 Project Definitions Parking/Transportation: Parking includes, but is not limited to, parking garages; surface parking; parking lighting; and parking signage and wayfinding. This project category was designed to provide adequate public facilities for transportation and to foster Transit Oriented Development (TOD) that will occur as a result of the planned transit station that will link Denton with passenger rail service to the City of Carrollton, where riders can transfer to the Dallas Area Rapid Transit (DART) system into the Dallas/ Fort Worth metroplex. The goal is to create compact, walkable, pedestrian-centered developments to enhance and act as a catalyst to spur additional development and redevelopment in the district. Complete Streets: are “multi-functional, pedestrian-oriented, aesthetically-pleasing, and safe and inviting for residents and visitors. Redeveloping the existing downtown street network into complete streets will create a pleasing public realm, which in turn supports and encourages a wide variety of new development and investment” according to the Downtown Implementation Plan. Elements of complete streets include the building to building improvements which may encompass: sidewalks, shared travel lanes (e.g. bus and bicycle), parallel and angled parking, pedestrian crosswalks, pedestrian and emergency bulb (American with Disabilities Act (ADA) accessibility), awnings, street improvements, planters, pedestrian street furniture, bike racks and pedestrian lighting. Downtown Projects: may include grants, loans and services for public and private development. Eligible TIF project costs are not limited to public uses and may also include projects that involve: historic preservation, demolition, environmental remediation and economic development grants. Chapter 380 of the Local Government Code grants municipalities in Texas the authority to offer grants and loans of public funds to stimulate economic development. The chapter also includes a provision for the use of City employees, facilities and services. An example of a City service may 110 include additional public safety personnel to serve the increased population created by the transit station and the surrounding transit oriented development. Solid FINANCE PLAN – DENTON TIF NO. 1 PRELIMINARY EXHIBIT D Project Plan waste and recycling services tailored to serve the downtown area is another example of a public service. Utility Drainage: The downtown TIF district has an aging infrastructure and a number of properties that are situated in the floodplain making proper utility drainage an important component of the project plan. Utility drainage encompasses the physical provisions to accommodate and regulate stormwater runoff to preclude excessive erosion and sedimentation and to control and regulate the rate of flow. Facilities/systems can include natural features and conduits, channels, ditches, swales, pipes, detention devices or other devices designed or intended to carry, direct, detain or otherwise control stormwater,” according the Denton Development Code. Projects may include one or more categories that may be leveraged as an incentive for development in the TIF district. An example of such a project, that would include both the parking/transportation and the downtown project categories, is a public private partnership for the construction of a parking garage and mixed use development that includes a public investment for additional parking for the public. 111 10 112 Downtown Denton Tax Increment Financing Reinvestment Zone No. 1 Project History Summary and Timeline 2003 – The Downtown Master Plan (Ordinance No. 2003-164) was adopted by the City Council after a review process that included a public hearing and a report and recommendation by the Planning and Zoning Commission. The plan was a framework of recommendations on future land use, transportation, and public improvements that was formulated to assist with redevelopment and development in the Downtown area. 2005 – RTKL was hired to identify five catalyst projects Downtown that would be capable of becoming viable developments and would spur other development in those areas. This information was one of the primary sources ultimately used in formulating the Downtown TIRZ Project, Feasibility and Finance Plans. 2007 – The City enlisted the services of Schrader and Cline, a Dallas economic development consultant firm, to assist in establishing the Downtown TIRZ. 2008 – Denton County Commissioners’ Court received a presentation from City staff on the proposed Downtown TIRZ. 2008 – Council reviewed the process and purpose of a TIRZ. After several meetings regarding the Downtown TIRZ, it was decided to postpone the establishment of the TIRZ until the Downtown Implementation Plan (DTIP) was complete. August 3, 2010 – Denton City Council voted to begin the process of establishing a TIRZ. The Tax Increment Financing Act requires that all taxing jurisdictions be notified of this “intent.” In complying with this requirement, the City provided the Council Resolution 2010-027 and “Notice of Intent” to establish the TIRZ to Denton County and the Denton Independent School District. August 17, 2010 – The DTIP was approved by City Council (Resolution No. R2010-032). It identified specific projects and goals in order to spur development and redevelopment in Downtown, as well as financing opportunities, which included creating a TIRZ district. The Downtown Master Plan, the RTKL Catalyst Project study, and the DTIP all were reviewed and endorsed by stakeholders, the Downtown Task Force, the Economic Development Partnership Board and City Council. All three of these studies/plans recommended the creation of a TIRZ. December 7, 2010 – Council passed Ordinance No. 2010-316, which established the Downtown TIRZ. It took effect on January 1, 2011, and the City of Denton is the sole participating jurisdiction. August 16, 2011 – Council passed Ordinances No. 2011-128 and 2011-129, the Downtown TIRZ Project Plan and Finance/Feasibility Plan, respectively. The plans define the boundaries, scope, feasibility, and projects that may be funded by the TIRZ. 113 August 5, 2014 – Council passed Ordinance No. 2014-221 approving the following amendment to Exhibit D of the Project Plan: “Pursuant to the Texas Local Government Code, section 272.001, the City of Denton may utilize City-owned property that is located in a reinvestment zone to facilitate economic projects which the City and TIRZ Board deem appropriate and desirable. The City may acquire, lease, sell or otherwise transfer property to accomplish the public purpose of economic development that is consistent with the Project Plan. Such projects may include public-private partnerships, transit-oriented developments, or the recruitment of specific industries including, but not limited to, hi-tech or emerging technology companies, local start-up businesses, artisan or “maker” industries, the creative sector, bakeries, microbreweries, micro-distilleries, wineries, grocery stores, or other industries that the TIRZ Board and the City Council deem desirable.” September 15, 2015 – Council passed Ordinance No. 2015-300 approving a Chapter 380 incentive grant of $76,000 for five years ($380,000) from the Downtown TIRZ fund for the Railyard development at 608 E. Hickory. June 20, 2017 – Council held a courtesy public hearing regarding the Downtown TIRZ. September 13, 2017 – Economic Development Partnership Board received a Work Session presentation regarding the Downtown TIRZ, including planned capital improvement projects within the next 5 years within the zone. The Board provided input regarding prioritization of planned projects. September 14, 2017 – Downtown Task Force (a subcommittee of the Economic Development Partnership Board) received a presentation regarding the Downtown TIRZ, including planned capital improvement projects within the next 5 years within the zone. The Task Force provided input regarding prioritization of planned projects. September 18, 2017 – Main Street Association Board received a presentation regarding the Downtown TIRZ, including planned capital improvement projects within the next 5 years within the zone. The Board provided input regarding prioritization of planned projects. November 17, 2017 – Downtown TIRZ Board recommended the following projects be funded from the Downtown TIRZ: • North Locust, north of the Square: sidewalks on both sides, ADA Ramps, and Pedestrian- scale lighting to McKinney. • North Elm, north of the Square: sidewalks on both sides, ADA ramps, and pedestrian – scale lighting to Parkway. • Pedestrian scale lighting on W. Oak Street, west of the Square, from the 200 block to the east side of Carroll Blvd. • Pedestrian scaled lighting on W. Hickory Street, west of the Square, from the 200 block to the east side of Carroll Blvd. 114 December 5, 2017 – City Council provided direction to pursue capital projects as recommended by the TIRZ Board. August 7, 2018 – City Council provided direction to fund downtown reinvestment grants out of the Downtown TIRZ. September 25, 2019 – TIRZ begins work with TXP, Inc. on Downtown TIRZ study. 115 Tax Increment Reinvestment Zone Denton, Texas Downtown TIRZ City Council Work Session February 9, 2021 ID20-2182 TXP, Inc. (512) 328-8300 phone www.txp.com 116 •TXP was retained at the end of 2019 to review revenue projections •Focus of the analysis was to determine if PEC 4 (Phase 3 and 4) could be funded by the TIRZ •COVID changed the timeline and the analysis parameters •Now focus is broader use of the TIRZ for different projects Study Background 2ID20-2182; Feb. 9, 2021 117 •Downtown TIRZ created in 2010, took effect on Jan. 1, 2011. •TIRZ terminates on Dec. 31, 2041 or when $24.8M collected •City of Denton is only participating jurisdiction •Years 1-5, 100% •Years 6-10, 95% •Years 11-20, 90% •Years 21-30, 80% •As of previous Annual Report: •Total TIRZ revenue: $2.4 million •Total TIRZ expenditures: $1.9 million Downtown TIRZ Background 3ID20-2182; Feb. 9, 2021 118 •Parking / Transportation •Complete Streets •Support for Downtown Projects •Grants •Loans •380 Agreements •Maintenance •Utility / Drainage Improvements Eligible Projects Per Downtown TIRZ Project Plan 4ID20-2182; Feb. 9, 2021 119 Downtown TIRZ Boundary 5ID20-2182; Feb. 9, 2021 120 Catalytic Projects from Original Feasibility Study 6ID20-2182; Feb. 9, 2021 121 Catalytic Projects Summary 7 Area Description Value ($M)Timeline A Mixed-use Residential/Retail/Transit (but slightly different location)$55M 2012-2028 B Mixed-use Residential/Retail $14M 2017-2029 C Residential Infill $16M 2020-2034 D Mixed-use Office/Residential $27M 2022-2038 E Residential Infill $13M 2017-2027 Total $126M Value of Developments B to E ~$70M ID20-2182; Feb. 9, 2021 122 •Overall TIRZ revenue had been consistent with the original finance plan •About $4M collected to date -$21M remaining •Assuming no new development and 4% appreciation rate, the TIRZ will hit the $24.8M cap a few years before Year 27 (2037) Downtown TIRZ Performance 8ID20-2182; Feb. 9, 2021 123 Downtown TIRZ Annual Taxable Value (DCAD) 9 $0 $50,000,000 $100,000,000 $150,000,000 $200,000,000 $250,000,000 20102011201220132014201520162017201820192020New Construction: $28M Appreciation: $124M ID20-2182; Feb. 9, 2021 124 Downtown TIRZ Annual TIRZ Revenue 10 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 $900,000 20102011201220132014201520162017201820192020ID20-2182; Feb. 9, 2021 125 Downtown TIRZ Performance –Cumulative 11 $0 $5,000,000 $10,000,000 $15,000,000 $20,000,000 $25,000,000 $30,000,000 $35,000,000 2010201120122013201420152016201720182019202020212022202320242025202620272028202920302031203220332034203520362037203820392040Appreciation Only ID20-2182; Feb. 9, 2021 126 •Downtown TIRZ Board •In person (2019) •Virtual (2020) •Downtown Developers •In person (2019) •Virtual follow up (2020) •Existing Businesses Owners (Denton Main Street) Stakeholder Input 12ID20-2182; Feb. 9, 2021 127 •Consensus that more downtown parking is not a priority (ex. parking garage) •Downtown businesses are struggling w/ COVID, need to think about when to start a big infrastructure project •Smaller projects focused on lighting and sidewalk improvements are more appropriate in short-term •Drainage improvement projects are necessary to create development opportunities –but new projects might not occur in the short-term Stakeholder Input Summary 13ID20-2182; Feb. 9, 2021 128 •Downtown needs more daytime office employment and traffic to balance nighttime activity •Office rents not high enough to justify new construction •Developers would like to use TIRZ funds to incentivize larger economic development projects •Existing businesses would like to use TIRZ funds on expanded building improvement and façade programs •Downtown lacks an overall vision –makes prioritizing TIRZ projects a challenge Stakeholder Input Summary 14ID20-2182; Feb. 9, 2021 129 Eligible TIRZ Projects Reviewed with Stakeholders 15ID20-2182; Feb. 9, 2021 130 Eligible TIRZ Projects Cost & ROI Matrix 16 Project Estimated Cost Project Specific Impact on Downtown Impacts on Value & Development PEC 4 (Phase 3/4) $17.6M (alternative funding No Long-term Increase to surrounding land values; and possible new development Mews Streets ~$7M Yes / No Short-term Increase to surrounding land values; some new development or redevelopment possible Corridor Improvements ~$7-$8M (.5 mile)No Medium-term Increase to impacted land values; possible new development or redevelopment Developer Incentives $5 -$10M (varies by project)Yes Immediate Varies by Project Expanded Grant Program $50,000 -$100,000 (varies by project)Yes Immediate Varies by Project General Maintenance Varies by Project Yes Immediate Minimal ID20-2182; Feb. 9, 2021 131 1.Expand TIRZ boundary so the entire PEC 4 (3/4) project becomes an eligible TIRZ project 2.How much should the Downtown TIRZ pay for PEC 4 (3/4): a)Fund PEC 4 project 100% from TIRZ b)Fund PEC 4 project 50% from TIRZ + Some other mechanism c)Do not fund PEC 4 and prioritize other projects 3.Consider increasing/removing TIRZ cap to fund the following: •Developer incentives •Smaller sidewalk and lighting projects •Larger corridor projects such as Elm and Locust Recommendations from TIRZ Board 17ID20-2182; Feb. 9, 2021 132 Staff Analysis 18ID20-2182; Feb. 9, 2021 133 •Staff focused additional analysis on the PEC 4 project. •PEC 4 was recommendation from TIRZ Board. •Project will have the most significant impact on the TIRZ fund of all projects considered. •Seeking Council direction regarding: •Prioritization of projects •Does Council concur with TIRZ Board recommendation? •Does Council want to pursue some other projects or goals? Staff Analysis 19ID20-2182; Feb. 9, 2021 134 Fund 100% of PEC Project Fund 0% of PEC Project Cost of PEC Project (incl. financing costs)24,778,123 0 Downtown Grants 2,000,000 2,000,000 Total Future TIRZ Expenditures $26,778,123 $2,000,000 Amendment to TIRZ Expand Boundaries & Remove Cap Expand Boundaries No Amendments Total Revenue to be collected 35,406,674 24,800,000 24,800,000 Remaining Revenue to be collected 32,347,367 21,740,693 21,740,693 Estimated Fund Balance 1,068,863 1,068,863 1,068,863 Total Avail. For Projects $33,416,230 $22,809,556 $22,809,556 Remaining for Other Projects $6,638,107 $8,350,500 $22,809,556 Actions Required:Required: Expand TIRZ boundaries and remove cap Identify another source of funding for PEC Possible:Possible: Prioritize other projects to be funded.Prioritize other projects to be funded and consider removing cap Advantages •Drainage project can begin as soon as ROW & easements acquired. •TIRZ can invest in P3s or other projects to create additional value. •Properties in area are removed from floodplain. •Downtown stakeholders favored other projects over PEC-4. •Large area of land now available for redevelopment and increased value. •No amendments to project or finance plan, including boundaries, term, or cap, required. •Project supported by TIRZ board. Disadvantages •Downtown stakeholders didn’t believe project benefitted central parts of downtown Denton where most visitors go. •No funding source identified for City to fully fund project. Would need to be incorporated into CIP and funded through CO or GO issuance. •Developers did not feel project would result in significant return to City.•Properties would remain in floodplain until project could be funded and completed. •Lose TIRZ as economic development tool in downtown Denton. •Limited redevelopment possible until project completed. Expand TIRZ Boundaries Possible: Remove cap. Prioritize other projects to be funded. Fund 50% of PEC Project 12,459,056 2,000,000 $14,459,056 Required: Expand Boundaries & Remove Cap 35,406,674 32,347,367 1,068,863 $33,416,230 $18,957,174 •Developers did not feel project would result in significant return to City. •Downtown stakeholders didn’t believe project benefitted central parts of downtown Denton where most visitors go. •Drainage project can begin as soon as City funding source is identified. •Properties in area removed from floodplain. •Redevelopment becomes possible. •TIRZ can invest in other projects or P3s to create •Project supported by TIRZ board. TIRZ Forecast & Options ID20-2182; Feb. 9, 2021 20 135 •If Council does not want to pursue PEC 4 project, other projects or multiple other projects could be funded. •About $22 million in revenue is available with no changes. Project Estimated Cost Project Specific Impact on Downtown Impacts on Value & Development Mews Streets ~$7M Yes / No Short-term Increase to surrounding land values; some new development or redevelopment possible Corridor Improvements ~$7-$8M (.5 mile)No Medium-term Increase to impacted land values; possible new development or redevelopment Developer Incentives $5 -$10M (varies by project)Yes Immediate Varies by Project Expanded Grant Program $50,000 -$100,000 (varies by project)Yes Immediate Varies by Project General Maintenance Varies by Project Yes Immediate Minimal TIRZ Forecast & Options ID20-2182; Feb. 9, 2021 21 136 •Does City Council want to… –Fund PEC 4, Phases 3 & 4 at 100%. •Must amend boundaries and remove cap. –Fund PEC 4, Phases 3 & 4 at 50%. •Must amend boundaries; could remove cap. –Prioritize other projects. •Options include: Developer incentives, small capital improvements, mews streets, general maintenance, increasing downtown grants. –Consider other options: •Continue to allow TIRZ fund to grow and wait for future projects/developments. •Consider ending TIRZ and funding projects through General Fund and other mechanisms Project Estimated Cost PEC 4 (Phase 3/4) $17.6M ($24.8 with financing costs) Mews Streets ~$7M Corridor Improvements ~$7-$8M (.5 mile) Developer Incentives $5 -$10M (varies by project) Expanded Grant Program $50,000 -$100,000 (varies by project) General Maintenance Varies by Project Council Direction ID20-2182; Feb. 9, 2021 22 137 Questions? 23ID20-2182; Feb. 9, 2021 138 Tax Increment Reinvestment Zone Denton, Texas Downtown TIRZ City Council Work Session February 9, 2021 TXP, Inc. (512) 328-8300 phone www.txp.com 139 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-124,Version:1 AGENDA CAPTION Receive a report, hold a discussion, and give staff direction regarding the Economic Development Strategic Plan and strategies for implementation. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™140 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Economic Development ACM/CFO: David Gaines DATE: February 9, 2021 SUBJECT Receive a report, hold a discussion, and give staff direction regarding the Economic Development Strategic Plan and strategies for implementation. BACKGROUND In 2019, the City engaged economic development consulting firm TIP Strategies to lead Denton’s comprehensive economic development strategic planning process. Since November 2019, staff and the TIP team have worked together to develop a strategic plan for economic development that outlines a specific vision for Denton, as well as the strategies and tactics to bring the vision to fruition. Community members and various internal and external stakeholders were engaged throughout the process, with the Economic Development Partnership Board serving as the primary steering committee. The draft plan is attached as Exhibit 2. The plan is representative of the input received through the engagement process, which included City Council, EDPB, Denton Chamber of Commerce, Denton Young Professionals, real estate professionals and local developers, industry representatives, education and workforce professionals, and entrepreneurs. In addition, City of Denton and Denton County economic development staff, and staff from the City’s Development Services, Capital Projects, Electric, and utility departments have provided valuable feedback. Due to the cancellation of planned community meetings as a result of the COVID-19 pandemic, staff posted the plan on a dedicated webpage and allowed for an online public comment period (July 1 to July 31) to engage the community at-large in the planning process. The EDPB also reviewed the draft plan at the June 24, July 8, and August 12, 2020 meetings. The plan includes five guiding principles, developed from input from stakeholders, which help define economic development in Denton. The principles are core resiliency, future-focused, inclusive growth, entrepreneurial spirit, and cultural vitality. In addition, the plan includes three goals, including accelerating recovery, fostering growth, and strengthening community inclusion. A set of strategies and actions are identified for each goal and provide the City with a roadmap to organize its economic development efforts. In addition, the plan includes an implementation matrix (Exhibit 3), which outlines specific tasks, a proposed timeline, estimated costs, and identifies what entity will be responsible for implementation. At the July 8, 2020 EDPB meeting, the Board requested additional details be brought back regarding the Implementation Matrix, the cost associated with implementing the strategic plan, and what amount of funding would be needed for the proposed catalyst fund. Staff and TIP Strategies worked together to complete a draft Implementation Matrix and quantify estimated costs and an annual investment that correlates with the proposed implementation matrix. This information was presented to EDPB at their August 12 meeting. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 141 At the August 18 and October 27, 2020 City Council meetings, TIP Strategies and staff presented an overview of the economic development strategic plan and discussed options for funding the catalyst fund recommended in the plan. Staff and TIP also presented information related to connecting the North American Industry Classification System (NAICS) codes associated with the strategic growth areas and target industries to use during implementation, as well as the development of a scoring tool that can be used and integrated in future incentive evaluations. As part of the Feb. 9 presentation, Council will review key elements of the Strategic Plan, review the scoring matrix presented on Oct. 27, and receive an overview of the timeline and next steps needed to begin implementing the economic development strategic plan. Staff will present detailed information regarding the proposed scoring matrix that was presented on Oct. 27, 2020. Staff is seeking Council’s feedback regarding the framework of the matrix. Staff will then begin using the scoring matrix as a complement to the existing incentive framework. PRIOR ACTION/REVIEW (Council, Boards, Commissions) • September 9, 2019 – The Economic Development Partnership Board and City Council held a joint meeting and discussed the scope of work for a comprehensive economic development strategic plan. • November 5, 2019 – The City Council approved the contract with TIP Strategies for development of an economic development strategic plan. • January 15, 2020 – EDPB strategic plan steering committee meeting and discussion. • February 12, 2020 – EDPB strategic plan steering committee meeting and discussion. • March 5, 2020 – The Downtown Economic Development Committee participated in a SWOT analysis regarding the strategic plan development. • June 24, 2020 – EDPB strategic plan steering committee meeting and discussion. • July 8, 2020 – EDPB strategic plan steering committee meeting and discussion. • August 8, 2020 – EDPB strategic plan steering committee meeting and discussion. The EDPB recommended the City Council adopt the Economic Development Strategic Plan (8-0). The EDPB reviewed funding options and recommended City Council pursue the staff recommended hybrid option of utilizing some existing utility system fund balance and dedicating 0.5% of utility system ROI for future funding (8-0). • August 18, 2020 – The City Council held a work session to discuss the strategic plan and possible options for funding an economic development fund. • October 27, 2020 – the City Council held a work session to discuss the strategic plan and possible options for funding an economic development fund. EXHIBITS 1. Agenda Information Sheet 2. Draft Economic Development Strategic Plan 3. Draft Implementation Matrix 4. Presentation Respectfully submitted: Jessica Rogers Director of Economic Development 142 ECONOMIC DEVELOPMENT STRATEGIC PLAN CITY OF DENTON, TEXAS DECEMBER 2020 143 ACKNOWLEDGMENTS Marty Rivers Denton Chamber of Commerce John BainesDenton Black Chamber of Commerce Keely Briggs Denton City Council, District 2 Jesse DavisDenton City Council, District 3 Tony Clark Independent Bank Group Chris DavisPeterbilt Charlie Dromgoole Denton Chamber of Commerce Bob EamesAviation Steve Edgar Medical City Denton Todd HilemanCity of Denton Jill Jester Denton Chamber of Commerce Mark McLellan University of North Texas Jimmy MejiaDenton Hispanic Chamber of Commerce Pamela Padilla University of North Texas Erica PangburnDenton Chamber of Commerce Jessica Rogers City of Denton Erica Sullivan City of Denton Jason TomlinsonTexas Woman’s University Jamie Wilson Denton Independent School District CONSULTING TEAM TIP STRATEGIES, INC., is a privately held economic development consulting firm with offices in Austin and Seattle. TIP is committed to providing quality solutions for public sector and private sector clients. Established in 1995, the firm’s primary focus is economic development strategic planning. CONTACTTIP Strategies2905 San Gabriel Street, Suite 309, Austin, TX 78705PH: 512-343-9113www.tipstrategies.com CONSULTING TEAMTom Stellman, CEO/FounderJaclyn Le, ConsultantBrent McElreath, SVP, Research & DevelopmentEvan Johnston, AnalystPhoebe Polakovic, AnalystMeredith Eberle, Designer TIP Strategies would like to thank the following individuals for their participation in this planning process, along with the hundreds of business leaders, community leaders, young professionals, and other major stakeholders from Denton who participated in this project. ACKNOWLEDGMENTS All images in this report were provided by the city of Denton or purchased from Adobe Stock by TIP Strategies, unless otherwise noted. 144 CONTENTS Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 Project Background and Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Plan Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Guiding Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Economic Development Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Strategic Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5 Goal 1 Accelerate Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Goal 2 Foster Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Goal 3 Strengthen Community Inclusion . . . . . . . . . . . . . . . . . . . . .42 Capacity and Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45 Economic Development Partnership . . . . . . . . . . . . . . . . . . . . . . . .46 Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47 Programs and Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52 Internal Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53 Strategic Performance Metrics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55 Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57 Appendix A. Data Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58 Appendix B. SWOT Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60 Appendix C. Municipal Utility Comparison . . . . . . . . . . . . . . . . . . . .65 Appendix D. Ecosystem Directory . . . . . . . . . . . . . . . . . . . . . . . . . . .66 145 EXECUTIVE SUMMARY INTRODUCTION Denton has changed. Once considered a quiet college town on the outskirts of the Dallas-Fort Worth (DFW) Metroplex, Denton has grown significantly since the City’s last comprehensive economic development plan. The City leaders must be commended for the investments made in downtown Denton and the Westpark Industrial Park over the past decade. These intentional efforts have put Denton squarely in the path of growth. Today, Denton is well within the orbit of its surrounding DFW communities. The DFW Metroplex is one of the fastest-growing metropolitan regions in the country. As DFW grows, so will Denton. It is not only more connected to Dallas and Fort Worth but also the global markets and supply chains that are represented by a diverse array of industries across the region. All evidence points toward an upward trajectory for Denton. But Denton is at an inflection point—one not about attracting growth, but instead about how to respond to and embrace it. Denton must determine how it will welcome the opportunities associated with growth while also preserving the culture that makes this community so unique. The community must open its arms to new residents without letting existing residents fall behind. This is no easy feat, but Denton has already demonstrated that it has the leadership and assets necessary to successfully navigate through and thrive with change. What Denton needs now is a modern approach to economic development that is appropriate for a community of its size and is capable of leveraging public and private resources to capitalize on the opportunities that lie ahead. During this planning process, the 2019 coronavirus (COVID-19) pandemic not only disrupted the writing of this plan but also upended almost every aspect of life for people around the world. The extent of the health crisis and economic damage cannot be understated. There is still immense uncertainty about the breadth and depth of the recession caused by this pandemic. The road to economic recovery will likely be bumpy, especially for a community like Denton that depends heavily on sales tax revenue to fund City operations and services. Denton’s immediate focus should be on accelerating economic recovery with a special focus on serving vulnerable populations that have been disproportionately impacted by this crisis. Still, there are a lot of reasons to be optimistic about Denton’s future. All the things that make Denton so attractive—its major industries, universities, arts and culture, downtown square, authentic people, and unique charm—will also be the things that help Denton to recover. 1 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS146 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 2 This plan is meant to help focus economic development efforts to be more strategic and effective in responding to forthcoming changes in Denton. The plan’s framework, including guiding principles and goals are detailed in the next section. Strategic recommendations and actions are organized around three goals: accelerate recovery, foster growth, and strengthen community inclusion. Finally, the plan addresses the issue of organizational capacity and resources needed to modernize Denton’s economic development approach. PROJECT BACKGROUND AND SCOPE In late 2019, TIP Strategies (TIP) was engaged by the City of Denton Economic Development Department to develop an economic development strategic plan for the City. A strategic plan helps to focus and maximize economic development and workforce development efforts, especially during times of crisis. The economic development landscape is undergoing significant changes, and the economic fallout from the COVID-19 pandemic will be immense. Over the course of nine months, the TIP Strategies consulting team worked closely with the City of Denton (hereafter the City) to identify promising opportunities to capitalize on Denton’s growth. The planning process was conducted in three phases: discovery, opportunity, and implementation. The City should not view this strategic plan as a static document, but as one that invites revisions and amendments as conditions change. Now, more than ever, stakeholders should take a dynamic approach to implementation—one that revisits this plan on a regular basis to measure progress and to reprioritize strategies and actions as needed. ►Core Resiliency ►Future Focused ►Inclusive Growth ►Entrepreneurial Spirit ►Cultural Vitality ►Accelerate Recovery ►Foster Growth ►Strengthen Community Inclusion ►Connectivity ►Creativity ►Sustainability ►Competitiveness GUIDING PRINCIPLES ECONOMIC DEVELOPMENT GOALS STRATEGIC GROWTH AREAS PHASE 1 DISCOVERY Conducted roundtable discussions and interviews with Denton stakeholders. Important constituencies were engaged during this process, including the following. ►The Economic Development Partnership Board ►Denton City Council members ►Denton Chamber of Commerce ►Business and industry representatives ►City and county staff ►Entrepreneurs ►Higher education leaders ►Real estate developers ►Workforce development organizations ►Young professionals PHASE 2 OPPORTUNITY Identified major priorities for the strategic plan. A strengths, weaknesses, opportunities, and threats (SWOT) analysis, guiding principles, and strategies were developed based on input from discovery. PHASE 3 IMPLEMENTATION Developed action items and tactical recommendations. 147 PLAN FRAMEWORK With rapid changes reshaping the global economy, the need for strategic focus and organization is greater now. The purpose of this plan is to enable Denton’s Economic Development Department to better anticipate, respond, and evolve with changes affecting the economic success of residents and businesses. The framework, strategies, and actions detailed in this plan are informed by extensive data analysis and thorough stakeholder input, including interviews and roundtables with City, community, and business leaders. GUIDING PRINCIPLES Guiding principles reflect the values of a community. In the context of an economic strategy, they are a set of statements expressing how a community defines economic development. These principles were crafted through input from Denton stakeholders throughout the planning process. CORE RESILIENCY Protect the City’s core economic base and major employers by retaining businesses and providing them with the support necessary to continue doing business in Denton. FUTURE FOCUSED Position Denton for future growth by understanding trends and adopting a proactive approach to economic development. INCLUSIVE GROWTHEnhance economic opportunity for all residents by utilizing different strategies that recognize the diverse needs and assets of different communities, especially those in south and east Denton. ENTREPRENEURIAL SPIRITCultivate the City’s entrepreneurial ecosystem by investing in quality of place and catalyzing innovation that will continue to attract creative professionals to Denton. CULTURAL VITALITY Strengthen Denton’s cultural vitality by continuing to promote arts and music while also marketing the City as DFW’s cultural hub. 3 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS148 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 4 ECONOMIC DEVELOPMENT GOALS This plan is built around three major goals: accelerate recovery, foster growth, and strengthen community inclusion. Developed based on input from stakeholder engagement and economic assessments, the set of strategies and actions identified under each goal are meant to provide the City with a roadmap to organize its programs and bolster Denton’s vitality over the next several years. ACCELERATE RECOVERY Coordinate short-term economic recovery efforts from the COVID-19 pandemic by aggregating information, collaborating with regional partners, and allocating resources to top priorities.1 FOSTER GROWTHAttract long-term economic growth aligned with community priorities by focusing on four strategic growth areas: connectivity, creativity, sustainability, and competitiveness.2 STRENGTHEN COMMUNITY INCLUSION Align economic, workforce, and community development efforts to meet critical community needs and to strengthen community inclusion.3 149 STRATEGIC RECOMMENDATIONS 5 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS150 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 6 GOAL 1 ACCELERATE RECOVERY When the City of Denton and TIP Strategies began the planning process for this strategic plan, the original intent was to create a long-term vision for the City’s economic development efforts. The context for the planning process was one of optimism. The US was experiencing one of the longest uninterrupted periods of economic growth in history. Texas had one of the lowest unemployment rates in the country, and the DFW Metroplex was one of the fastest-growing metropolitan regions in the US. Much of that growth and opportunity was headed in Denton’s way. But now that context has shifted for everyone, everywhere. Early signs indicate that the current economic crisis might be one of the worst in US history. It is difficult to predict how things will evolve over the new few weeks and months. The lasting health and economic effects of the COVID-19 pandemic are still unfolding. Because strategic plans are meant to be forward looking, this plan would be incomplete, maybe even irrelevant, if it did not address the challenges that Denton will face as a result of this crisis. While the bulk of this strategic plan is still focused on Denton’s long-term future, this section provides recommendations for how the City can work to accelerate economic recovery once the health risks subside and sheltering mandates are lifted. Many of these strategies will likely need to be implemented virtually, as social distancing measures might be in place for an extended time. The City’s Economic Development Department team has already initiated positive efforts to support Denton’s businesses and residents during the early phase of crisis relief. Those efforts should be leveraged and expanded as the community moves into a recovery phase. Recognizing that resources in Denton will be impacted by the crisis, many of the recommendations are centered around the City in a convening and coordinating role with other community and economic development partners. STRATEGIES AND ACTIONS 1.1. ECONOMIC RECOVERY NERVE CENTER. The City’s Economic Development Department should function as Denton’s economic recovery nerve center with a primary focus on a cross-functional coordination of resources and responses related to the economic fallout from the COVID-19 pandemic. 1.1.1. Pull together a small group of top-level leadership from the City, the Economic Development Partnership Board (EDPB), and the Denton Chamber of Commerce to form the economic recovery nerve center. ►The purpose of the nerve center is to set the overall tone of economic recovery work, aggregate all information and actions across cross-functional teams, and allocate resources to integrate the responses of smaller teams. Coordinate short-term economic recovery efforts from the COVID-19 pandemic by aggregating information, collaborating with regional partners, and allocating resources to top priorities. 151 7 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 1.1.2. Shift the focus of the existing economic development structure from relief and policy enforcement to cross-functional elements of economic recovery, such as business retention, workforce development, and community services. ►BUSINESS RETENTION. Continue to focus on establishing a relationship with leaders in Denton’s main businesses, understanding short-term and long-term needs of those businesses, and communicating information with a unified voice. ► WORKFORCE DEVELOPMENT. Continue to work closely with Workforce Solutions, human resource leaders from businesses, and City departments to support businesses in protecting their employees while also maintaining business productivity as sheltering mandates begin to ease. ►COMMUNITY SERVICES. Provide vital wraparound services to Denton residents. Representatives of major nonprofits, foundations, and City departments should work together on creating a centralized inventory of resources, understanding resident needs, and identifying gaps in available services. 1.1.3. Develop an internal data dashboard to guide economic recovery efforts using a limited number of indicators that can be tracked over time and shared with partner organizations. ►Potential indicators include rate of full-time vs. part-time employment, retail sales, growth in construction permits, missed rent payments, access to broadband, and other qualitative information from business surveys (see Strategy 1.2). ►Where possible, indicators should be disaggregated by race and income levels to track how recovery efforts are reaching vulnerable communities. 1.2. TAKING THE PULSE OF THE BUSINESS COMMUNITY. As the health issues and economic fallout from COVID-19 evolve, the City should continue to implement strategies and tools to take the pulse of Denton’s businesses on a regular basis. 1.2.1. Continue to coordinate with the Denton Chamber of Commerce and Denton Main Street Association to assess short-term needs and long-term projections for Denton’s businesses. ►Ideally, the City and the chamber should distribute a joint survey to Denton businesses. Consistency in questions is integral to tracking data and information over time.► As an alternative to surveys, the City could implement monthly virtual office hours or roundtables with businesses to gather information about their needs and challenges. 1.2.2. Stay connected to DFW organizations coordinating economic recovery and community service efforts across the DFW Metroplex. ►Organizations, such as the Dallas Regional Chamber, have created small business resources and a displaced workers job campaign that can be shared in Denton. 1.3. VIRTUAL BUSINESS RETENTION. The top economic development priority for the City is to continue supporting and retaining existing businesses through the recovery period. In-person visits might not be possible even after sheltering mandates are lifted, therefore, the City should create virtual business retention and expansion (BRE) options. 1.3.1. Continue to develop and maintain a database of Denton-based businesses. 1.3.2. Shift the City’s business visitation efforts to a virtual setting and establish a cadence of meetings with businesses as soon as appropriate. 1.3.3. Expand existing goals for business touchpoints on a monthly, quarterly, and annual basis. INTEGRATED NERVE CENTER RESPONSE “In an unfamiliar crisis, such as the COVID-19 outbreak, the nerve center concentrates crucial leadership skills and organizational capabilities and gives leaders the best chance of getting ahead of events rather than reacting to them.” —McKinsey & Company, “Responding to Coronavirus: The Minimum Viable Nerve Center.” GOAL 1 STRATEGIES 152 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 8 1.3.4. Reevaluate and adjust standard questions and protocols utilized in the City’s BRE program to be more responsive to the COVID-19 crisis and recovery. 1.3.5. Prioritize business retention efforts based on strategic growth areas (see Goal 2), employer size, employer growth (number of employees, revenue growth, etc.), and lease terminations. ►This data can be obtained through a database of existing businesses (see the “Internal Systems” section) as well as information from pulse surveys and other interactions with businesses. 1.3.6. Structure BRE efforts to serve several purposes. ►Educate businesses about resources and services offered by the City to aid in recovery. ►Collect answers to a short list of questions to quantify challenges the company is facing. ►Identify short-term and long-term issues the companies are grappling with across a variety of topics, including workforce and infrastructure needs. 1.3.7. Act as a concierge to priority businesses to help navigate processes within other municipal departments (e.g., partner with a project facilitator from the City’s Development Services Department). 1.4. WORKFORCE COLLABORATIVE. Focus on the workforce development function listed in Action 1.1.2 to develop broader strategies supporting Denton’s talent pipeline through recovery. 1.4.1. Prioritize engagement with the Denton County Workforce Success Leadership Team (DCWSLT) to connect City efforts to the broader regional context. ►While DCWSLT might be solely focused on the Asset Limited, Income Constrained, Employed (ALICE) population, the City should also focus on developing supports for unemployed residents, including those who have been displaced from jobs and might require upskilling or retraining in order to access new employment opportunities. ► The City can bring the perspectives of businesses to DCWSLT by aggregating and sharing information obtained through business retention activities and business engagement with the Denton Chamber of Commerce and the Denton Main Street Association. 1.4.2. Catalog which industries have been severely impacted by COVID-19 and determine if targeted resources can be deployed to support workers in those industries. ►For example, displaced retail workers might require special support in accessing training programs in order to switch occupations and/or sectors. 1.4.3. Use insights and data from business retention efforts and surveys of the business community as a baseline for employer demand. Couple this information with other data about unemployment rates and the needs of jobseekers. 1.4.4. Develop an inventory of training resources across providers, such as North Central Texas College (NCTC), Workforce Solutions for North Central Texas, and United Way. Include capacity levels and flexibility to streamline, redesign, or create new programs to meet employer needs. 1.4.5. Engage in demand planning to understand which businesses expect to hire and when. ►If specific occupations will be in demand, develop projections as well as competency requirements from employers. Communicate this information to training providers. ►Create a skills inventory using existing sources of data, such as Economic Modeling Specialists International (Emsi). 1.4.6. Identify barriers to accessing training and other workforce resources. Continue to coordinate with partner organizations to help remove these barriers for those seeking jobs. 1.5. INCLUSIVE ECONOMIC RECOVERY. The COVID-19 pandemic has had a disproportionate impact on low-income residents (of all races) and people of color (across socioeconomic status). Compared to other DFW cities, Denton has a larger proportion of its community (primarily in the southern and eastern parts of the City) that is more vulnerable to both GOAL 1 STRATEGIES 153 9 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS the health and economic fallout from COVID-19. Therefore, equitable and inclusive economic recovery strategies should be central in Denton’s efforts to stabilize its economy and recover from the pandemic. 1.5.1. Extend existing collaboration efforts with the City’s Community Development Department to coordinate resources and efforts to support residents through economic recovery. 1.5.2. Coordinate with the Denton Black Chamber of Commerce and other multicultural organizations to provide targeted information for businesses owned by women and people of color. ►Research indicates that these small business owners face structural exclusion from traditional sources of capital and aid packages, including the US Small Business Administration (SBA) Paycheck Protection Program. ► Partner with community development financial institutions in the DFW area to expand resources and programming into Denton to aid in economic recovery efforts. 1.5.3. Continue to collaborate with local and regional nonprofits in gathering information about what challenges residents are facing due to the economic impact of the COVID-19 pandemic. ►Use this information to work closely with other City departments, business leaders, and philanthropic entities to develop solutions that directly address resident needs. ►Having more accurate information about challenges and needs can be helpful in attracting funding from public and philanthropic sources. It can also help the City take actions or design policies that directly benefit vulnerable communities. 1.5.4. Disaggregate social and economic indicators by race and income levels to show how vulnerable populations are faring in comparison to other segments of the population. 1.5.5. Highlight businesses owned by women and people of color in marketing materials and through digital marketing channels to increase awareness and promote their success. 1.6. REGIONAL COLLABORATION. The economic fallout from COVID-19 will impact US metropolitan regions in different ways. Denton’s economic recovery is tied, in part, to recovery efforts in Denton County and in the broader DFW Metroplex. While Denton has unique assets and challenges as a college town, it can benefit from and contribute to regional resources and recovery efforts. 1.6.1. Continue the City’s existing support for the United Way of Denton County Information & Referral services to assist small businesses. ►If possible, add extra support for entrepreneurs and businesses owned by people of color by soliciting volunteers with expertise in these areas. ►Support DFW organizations, such as Capital Factory and Venture Dallas, to provide targeted support to Denton entrepreneurs and startups. 1.6.2. Strengthen the Denton County chamber and economic development workgroup and continue to build this network throughout the economic stabilization and recovery periods. ►In addition to information sharing, create task forces within the network to focus on critical issues and challenges that partner organizations are facing. 1.6.3. Leverage the Denton Innovation Group to develop targeted supports and resources to assist entrepreneurs through economic recovery. ►Continue to partner with organizations such as Stoke, the University of North Texas (UNT) Murphy Center for Entrepreneurship and Innovation, the Center for Women Entrepreneurs at Texas Woman’s University (TWU), TechMill, Denton Angel Investment Group, and the Dallas Entrepreneur Center. 1.6.4. Connect with regional DFW organizations, such as the Dallas Regional Chamber, to expand the information-sharing network beyond Denton County. GOAL 1 STRATEGIES 154 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 10 Attract long-term economic growth aligned with community priorities by focusing on four strategic growth areas: connectivity, creativity, sustainability, and competitiveness. GOAL 2 FOSTER GROWTH THE TRADITIONAL APPROACH Target industries have been a cornerstone of economic development programs. The six sectors in Figure 1 were identified as targeted sectors many years ago and have guided the work of Denton’s Economic Development Partnership (EDP). While these targets made sense at the time, they now cover much of Denton’s existing economy and do not capture the full extent of the City’s assets. Traditionally, target industries are defined by quantitative analysis to identify a concentration of industries that exist in a city or a region. Figure 2 illustrates the process by which traditional targets are identified. Analysis of data from the North American Industry Classification System (NAICS) is used to highlight where a community already has a larger- than-average concentration of employers and jobs. For example, a community with clusters of advertising, legal services, and tax preparation services might identify corporate and professional services as a target sector. This approach has several limitations. First, targets are identified using existing data that often fail to capture a community’s full assets and advantages. Emerging industries with growing momentum might not be captured in the NAICS taxonomy. Second, traditional targets say nothing about the institutions and organizations that contribute to building a concentration of industries. Third, traditional targets SUPPLY CHAIN LOGISTICS ADVANCED MANUFACTURING AVIATION RENEWABLE ENERGY INFORMATION TECHNOLOGY RESEARCH & DEVELOPMENT Figure 1. DENTON’S EXISTING TARGETS Quantitative analysis is used to identify a concentration of industries that exist in a city... TRADED CLUSTER LOCAL CLUSTER LOCAL CLUSTER TRADED CLUSTER Which are then grouped to form a target sector... TARGET SECTOR Figure 2. TRADITIONAL TARGET INDUSTRIES 155 11 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS are a static measure that can quickly become outdated. Or, in the case of Denton, a list of targets can keep growing until it covers most of the economy. Finally, from an organizational standpoint, traditional targets can, by default, tempt economic development offices to focus their time and measure their performance in inefficient ways. The challenge that Denton faces today is how to focus efforts and resources in a more strategic manner. THE PATH FORWARD As the DFW Metroplex grows, much of that growth will spread into Denton County. Planned developments, most notably Cole and Hunter Ranch, will continue to connect Denton to the broader DFW ecosystem. While the COVID-19 crisis will affect the timing of these developments, there is reason to be optimistic that Denton will continue to experience growth after a period of economic recovery. A modernized economic development approach is focused on cultivating strategic growth areas that fully leverage the community’s major employers, institutions, and intangible elements. Quantitative data, like NAICS codes, are one of many factors that informs a community’s strategic growth areas. Instead of targeting sectors, the main role for economic development organizations is to build ecosystems around their strategic growth areas. An ecosystem is comprised of many elements, including anchor institutions, principal and emerging participants, competitions and events, building blocks, local capital, and public awareness. The ecosystem overview on the next page provides a description of each element. The process of ecosystem building is illustrated in the case studies presented in this section. ►Connecting companies to top talent and innovations through the University of Arkansas Center of Excellence in Logistics and Distribution (CELDi) is one example of this concept in practice (page 19). ►An innovative business model mixing philanthropy with revenues earned from consulting services was part of building an entrepreneurial community in the Fargo, North Dakota, Emerging Prairie initiative (page 27). ►The focus of San Antonio, Texas, efforts to build a sustainable energy hub around its public utility was facilitating access to capital, expertise, and mentors through its Energy Partnerships Innovation center (EPIcenter) nonprofit (page 34). ►Chattanooga, Tennessee, efforts to upgrade its electrical grid with fiber optic cables laid the groundwork for the growth of a high-tech ecosystem and gave the city its Gig City moniker (page 41). Ecosystem building has several advantages. First, ecosystems factor in both quantifiable and intangible assets that a community possesses. Second, ecosystem building is a team sport that requires different contributions from different organizations so that economic growth is not the sole responsibility of one entity. Finally, ecosystems are more dynamic and more adaptable as elements change over time. DENTON’S STRATEGIC GROWTH AREAS The question remains, how will Denton respond to incoming growth? There is a way for Denton to welcome and attract growth that leverages the community’s assets and preserves its unique culture. Together the four growth areas below define a holistic approach to growth that applies to various aspects of Denton’s economy. By adopting growth areas, the City can ensure that Denton grows in a way aligned with both economic priorities and community needs. Furthermore, each of these growth areas can be used to organize economic development efforts. The following pages include more details about each growth area, including anchor institutions, principal and emerging participants, competitions and events, building blocks, local capital, and public awareness, that will drive growth in these areas. Appendix D includes more detailed information about trade associations, relevant conferences/events, and trade publications associated with each strategic growth area. CONNECTIVITY Denton’s major employers, interstate access, and planned infrastructure improvements make it a transportation and logistics hub for the DFW Metroplex. CREATIVITY A growing entrepreneurship community, including startups in the tech and arts/culture sectors, contributes to Denton’s unique vibe. SUSTAINABILITYThe City’s investment in 100 percent renewable resources positions Denton to be a global leader in renewable energy and green technology. COMPETITIVENESS Denton’s economic competitiveness will continue to improve with planned housing developments, downtown amenities, digital marketing, and infrastructure improvements. 156 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 12 ANCHOR INSTITUTIONS Anchor institutions—universities, hospitals, and schools—are interwoven in a community’s economic, social, and cultural fabric. Partnering with anchors in economic development efforts can drive innovation and enrich economic vitality. COMPETITIONS & EVENTS Events can drive growth by cultivating sector-based networks, attracting tourists, and building a community’s brand. Competitions and events not only raise the profile of a community with outsiders, but also connect a community to a larger network of aligned stakeholders. LOCAL CAPITAL Access to capital can facilitate new ideas, deepen partnerships, and result in bigger impact for companies and community-based organizations. Ranging from venture capital to philanthropic grants, local capital is central to growth and success. BUILDING BLOCKS No ecosystem can thrive without a group of ecosystem builders that focus on collaboration across organizations, inclusion of diverse voices, and sustainability of economic development efforts. These builders can be coworking spaces, catalytic programs, or even visionary individuals. EMERGING PARTICIPANTS Every community has emerging players, including scrappy startups and innovative entrepreneurs, that have the potential to change the trajectory of the community. The buzz, innovation, and energy that emerging players bring is vital to renewing and reinventing a community’s economy. PUBLIC AWARENESS Branding and marketing are vital to growth. A community’s success stories should be shared widely through traditional media, social media, and industry-specific channels. Bringing attention to the businesses and people that are the heartbeat of a community can drive investment and foster growth. STRATEGIC GROWTH AREAS ECOSYSTEM DENTON’S GROWTH ECOSYSTEM 157 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS13 2A. CONNECTED DENTON THE VALUE In the past, Denton was viewed as a community on the outskirts of the DFW Metroplex, both geographically and economically. That has changed. The combination of highway improvements and significant growth into areas north of Dallas and Fort Worth has brought Denton into the DFW community in a more intensive way. Recent growth in Denton’s transportation and logistics-oriented businesses as well as improvements to the City’s infrastructure position Denton as a hub for business connectivity. THE ANCHORS Since the 1980s, Peterbilt has been one of Denton’s largest employers and a cornerstone of the City’s economy. Its success played a vital role in attracting other transportation and logistics companies to the west side of Denton. Both private sector businesses and publicly owned assets, such as Denton Enterprise Airport, contribute to Denton’s impressive transportation infrastructure. The airport’s recent addition of a second runway as well as the US Aviation Academy position the airport for increased business activity and usage. THE ECOSYSTEM Denton’s location at the intersection of I-35E and I-35W, as well as its proximity to three Class-1 railroad lines, makes it an ideal hub for transportation and logistics-focused businesses. Examples include companies that manufacture vehicles and transportation equipment, as well as warehousing and distribution activities. The expansion of e-commerce nationally, which has been accelerated by the COVID-19 pandemic, fuels demand for logistics firms. New entrants, such as United States Cold Storage and WinCo Foods, recognize Denton’s strategic advantages. As the industry undergoes major technological change, Denton is poised to be a leader in connectivity. Leveraging existing businesses and higher education institutions will make the City a nexus for supply chain innovation, research, and development. 158 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 14 ANCHOR INSTITUTIONS ►Peterbilt ►Denton Enterprise Airport ►US Aviation Academy ►UNT Center for Logistics & Supply Chain Management ►North Central Texas College COMPETITIONS & EVENTS ►International Conference on Information, Logistics and Supply Chain ►Accelerate! Conference & Expo ►Heavy Duty Aftermarket Week LOCAL CAPITAL ►Westpark Industrial Park TIRZ ►EDP Investment Fund BUILDING BLOCKS ►DFW Roundtable, Council of Supply Chain Management Professionals ►North Texas Commission, Logistics Development and Marketing Committee ►Institute for Supply Management Dallas ►Texas Association of Manufacturers EMERGING PARTICIPANTS ►United States Cold Storage ►Tetra Pak ►WinCo Foods ►Tyson Foods PUBLIC AWARENESS ►Item Journal of Commerce ►Advanced Manufacturing Insight ►Logistics Management ►International Journal of Shipping and Transport Logistics DENTON’S GROWTHECOSYSTEM CONNECTED DENTON ECOSYSTEM 159 15 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS RELATED INDUSTRIES AND SECTORS Sectors and industries that keep Denton connected include all aspects of transportation, distribution, logistics, and communication systems, as well as manufacturing of vehicles and parts related to these systems. Representative Economic Development Administration (EDA) clusters include the following. Sources: US Bureau of Labor Statistics; Emsi 2020.1—QCEW Employees, Non-Quarterly Census of Employment and Wages (QCEW) Employees, and Self-Employed; US Economic Development Administration; Institute for Strategy and Competitiveness at Harvard Business School (HBS); TIP Strategies.Note: The cluster methodology developed at HBS has been adjusted by TIP Strategies to align with the six-digit NAICS classifications used by Emsi. STRATEGIES AND ACTIONS 2A.1. BUSINESS RETENTION AND EXPANSION (BRE). A strong BRE program is the foundation of any economic development program. In addition to developing a virtual business retention program (see Strategy 1.3), Denton also needs to enhance its existing BRE program in order to support existing businesses in a more intensive and robust manner. 2A.1.1. Refine and enlarge the City’s database of existing employers. The database should be expanded to include companies in the area that serve external markets or are suppliers to existing employers. 2A.1.2. Revise and ramp up the business visitation program to track trends among Denton employers and identify business needs. ►Virtual visits should be made until the COVID-19 health crisis recedes. ►Establish a visitation protocol, a list of information to be collected during each visit, and a goal for the number of businesses visited each year. DISTRIBUTION AND E-COMMERCE TRANSPORTATION AND LOGISTICS LOCAL LOGISTICS SERVICES AUTOMOTIVE (INCL. TRUCK MANUFACTURING) COMMUNICATIONS EQUIPMENT AND SERVICES CONNECTIVITY Number of jobs in the DFW metropolitan area: 423,873 Percent of jobs in the DFW metropolitan area: 10.7% EFFECTIVE BRE Businesses already in the community are well-positioned to create jobs and contribute to the tax base. Yet, often their achievements are overshadowed by the headlines of a new business moving to town. However, the effort and expense it can take to recruit a new business to town can be multiples of what it takes to support existing businesses, while the outcomes and impact of the two can be similar. An effective BRE program focuses on building relationships with existing businesses, establishing lines of communications such that any needs or challenges are voiced, and responding to those needs or challenges. One of the best means for doing this is to provide concierge services. Business concierges are often staff within an economic development organization who provide guidance to businesses in navigating planning, zoning, development, permitting, and construction processes. The concierge makes it easier for businesses to access services from different city departments so that any challenges are resolved efficiently. CONNECTED DENTON STRATEGIES 160 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 16 ►Organize joint business visits with area workforce development partners, including higher education and training providers. 2A.1.3. Communicate success stories that result from BRE visits. These might not translate directly to new job creation or increased capital investment, but they can still be valuable to businesses. ►Examples include assistance with permitting, workforce training, or infrastructure challenges. 2A.1.4. Provide incentives and/or grants to existing companies to assist with business expansion and help retain these valuable assets in Denton. 2A.2. ATTRACT NEW INVESTMENT. Recruiting new businesses should remain a top priority for the City’s Economic Development Department team. The City has a track record of success with business attraction, and efforts can be strengthened by focusing on external marketing and cultivating relationships in critical sectors. 2A.2.1. Cultivate relationships with real estate brokers and site selectors. ►Build a database of national and regional developers, brokers, and site consultants to identify targets, raise awareness of sites, development, and investment opportunities in Denton. ►Connect with site consultants in the DFW Metroplex and targeted regions on a regular basis. ►Host events that showcase specific assets, such as available sites, buildings, or new projects. Some communities host site tours or reverse pitch events where developers and brokers pitch their vision for a specific site or project. 2A.2.2. Create a centralized lead tracking system for Denton (see the “Capacity and Resources” section). 2A.2.3. Engage with regional economic development organizations, industry groups, and professional networks in the DFW Metroplex. ►Join regional industry associations and networks focused on Denton’s growth areas to remain current on critical issues, build stronger networks, and leverage resources. ►Attend conferences and trade shows held in the DFW Metroplex by national industry organizations aligned with Denton’s growth areas. 2A.2.4. Maintain and enhance the site location factors that are essential for connectivity industries: labor availability, highway access, affordable land and facilities, and favorable tax incentives. ►Denton’s triple freeport tax exemption is an example of a policy that is critical to business recruitment efforts in these sectors. 2A.3. WESTPARK INDUSTRIAL PARK. The industrial park is vital to Denton’s economic growth. Success in attracting new businesses, such as WinCo Foods and Tyson Foods, as well as retaining major employers like Peterbilt, is crucial for the City’s economic vitality. To build on this success, undeveloped land can be better marketed, and improvements can be made to core infrastructure. 2A.3.1. Prioritize infrastructure investments, particularly with respect to roads and utilities. ►Dedicate a set percentage of the City’s capital improvements budget to projects in the area to ensure that improvements are made in a timely manner. ►Expand Jim Christal Road to improve the connection between the industrial park and I-35. Stakeholders believe that the existing road cannot accommodate a growing number of businesses. This will require additional investment from the City beyond the Westpark tax increment reinvestment zone (TIRZ). 2A.3.2. Continue to track vacant properties and parcels, partnering with brokers and developers on new developments or redevelopments to increase the usefulness and value of these properties. 2A.3.3. Partner with UNT on relocating the sports recreation fields located at Precision Drive and Airport Road to an area outside the industrial park to improve safety and make better use of the land. CONNECTED DENTON STRATEGIES 161 17 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 2A.3.4. Provide public infrastructure incentives (such as credits or reimbursements) for projects aligned to Denton’s growth areas. ►The City already utilizes most economic development tools available to incentivize development. Continue using the Westpark TIRZ to support the industrial park. 2A.4. CENTER OF EXCELLENCE. Denton has all the necessary assets to create a center of excellence (COE) focused on logistics and supply chain management. The presence of several logistics-oriented companies—Denton Enterprise Airport, NCTC, and UNT Center for Logistics & Supply Chain Management—provide Denton with a distinct advantage in the connectivity space. 2A.4.1. Leverage over $2.8 billion in planned projects from Texas Department of Transportation (TxDOT) in Denton to increase connectivity between Denton and surrounding DFW communities (Figure 3). ►A significant number of planned infrastructure improvements will continue to make Denton a competitive community for logistics and transportation-oriented firms. ►Denton’s continued competitiveness in the connectivity space, coupled with other assets, should be the basis for creating a COE. It is essential for the partners interested in creating a COE to speak with a unified voice about the strategic advantages that Denton offers, which can be leveraged for even greater recognition and innovation. 2A.4.2. Explore the feasibility of a partnership between the businesses located in the Westpark Industrial Park, NCTC, UNT Center for Logistics & Supply Chain Management, and the City. ►Form a committee comprised of representatives from these organizations and other potential partners to meet regularly to move the concept forward. ►Compile an inventory of local and regional assets that would support the COE, including education and training programs, relevant university research, industry conferences and events, and companies. ►Research other COEs focused on logistics and distribution to understand potential organizational models, funding strategies, and areas of focus. ►Host a summit on topics affecting the logistics and distribution industry. ►Identify strategies for drawing researchers and faculty to the region, such as creating an endowed chair or designing opportunities for collaboration across institutions. 2A.4.3. Include workforce partners to create career pathways for Denton students and residents into in-demand occupations for Denton’s transportation and logistics businesses. 2A.4.4. Promote opportunities in the transportation, logistics, and supply chain fields to students in Denton and in economic development marketing materials. WHAT IS A CENTER OF EXCELLENCE? Centers of excellence are a collaboration between higher education institutions and businesses, leveraging the unique assets found within a region to support the advancement of research and training within a specific industry. They often serve as a magnet for industry expertise and are dedicated to the success of companies within a region. Expected outcomes include the following. ►Generating statewide and national recognition. ►Supporting Denton’s economic growth. ►Leveraging the unique assets of Denton’s higher education institutions. CONNECTED DENTON STRATEGIES 162 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 18 Figure 3. PLANNED TXDOT PROJECTS IN DENTON PHASE PROJECTS EST. COST Construction underway or begins soon 24 $99,035,892 Construction begins within 4 years 8 $421,055,003 Construction begins in 5 to 10 years 8 $756,529,022 Corridor Studies, construction in 10+ years 5 $1,394,440,290 TOTALS 45 $2,671,060,207 Source: Texas Department of Transportation, Project Tracker. CONNECTED DENTON STRATEGIES 163 CONNECTED DENTON CASE STUDY TAKEAWAYS FOR DENTON ►Establish a COE in Logistics at UNT with industry leaders in the area, like Peterbilt, to facilitate collaboration between the public and private sectors. ►Join CELDi to access an established network of universities, national companies, and funding. ►Creating a COE not only provides benefits to existing companies but also acts as a talent development strategy for Denton and its major employers. BACKGROUND Headquartered at the University of Arkansas in Fayetteville, CELDi (Center for Excellence in Logistics and Distribution) is a multidisciplinary industry and university research center established in 2001. The cooperative is comprised of six university partners from across the nation and 31 companies, ranging from global corporations to municipalities like San Pedro, Mexico. For universities, admission to CELDi is predicated on the expertise of each institution, while industry partners provide ongoing financial support for logistics research through tiered membership options. Companies benefit from increased efficiency in their supply chain as a direct result of the innovation created with university partners as well as having direct access to top students. CELDi hosts biannual joint meetings in which researchers and the Industrial Advisory Board (comprised of representatives from member companies) coordinate new projects and offer continuing education courses. CELDi’s mission is to produce the next generation of engineers in logistics and distribution centers while advancing the industry through innovations in products and systems.. PROGRAM OUTCOMES (2019) ►UA has received over $3 million in industry-funded research sponsorship. ►CELDi industry members include Walmart Stores, UPS—Chain Supply Solutions, Air Liquide, The Boeing Company, Lockheed Martin Aircraft & Logistics Center, and Medical Center Hospital in Odessa, Texas. CELDi | UNIVERSITY OF ARKANSAS, DEPARTMENT OF INDUSTRIAL ENGINEERING www.celdi.org ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXASThe University of Arkansas Union by Brandonrush via Wikimedia Commons (CC-BY-SA 3.0) 164 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 20 2B. CREATIVE DENTON Photo by Annie Spratt via Unsplash THE VALUE Denton’s reputation for arts and culture makes it a standout destination within the DFW Metroplex. Its cultural assets not only foster quality of place but also create an economic advantage. Over the past decade, a budding creative economy has attracted entrepreneurs to Denton, making the City a hub for big ideas and innovation. Denton has a vibe unlike any other community in the region. By continuing to nourish this creative ecosystem, the City can flourish and become a vibrant destination for talent and investment. THE ANCHORS From higher education to coworking spaces, Denton’s creative economy is anchored by diverse and thriving institutions. TWU and UNT are catalysts for innovation and drivers of the City’s talent pipeline. Stoke is the heartbeat of Denton’s startup scene, providing a hub for entrepreneurs near downtown amenities. Embracing and strengthening these anchor institutions will not only attract growth but also ensure that the creative elements at the heart of Denton’s culture will continue to thrive. THE ECOSYSTEM In recent years, a strong cluster of education technology companies has emerged in Denton. The presence of two universities along with strong support for entrepreneurs has made Denton an ideal location for edtech startups. Events such as the Denton Black Film Festival have also drawn tourists to Denton and strengthened community ties. However, Denton’s creative economy requires additional support, including stronger connections to the DFW tech scene and venture capital. The City can nurture Creative Denton by cultivating relationships with DFW capital sources and raising public awareness of Denton artists and entrepreneurs. 165 21 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS ANCHOR INSTITUTIONS ► UNT Murphy Center for Entrepreneurship and Innovation► Center for Women Entrepreneurs at TWU► North Central Texas College► Denton ISD COMPETITIONS & EVENTS► FlintConf► Denton Black Film Festival► Bootstrap Denton► TIACON LOCAL CAPITAL► Denton Angels► Tech Wildcatters► North Texas Angel Network EMERGING PARTICIPANTS► Ready Rosie► Kubos► Wildcards► iTeach BUILDING BLOCKS► Stoke► TechMill► Capital Factory, Dallas► Open Denton► Dallas Entrepreneur Center PUBLIC AWARENESS► Denton Record-Chronicle► Discover Denton► North Texas Daily► Voice of Denton► Dallas Innovates CREATIVE DENTON ECOSYSTEM CREATIVE DENTON ECOSYSTEM 166 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 22 RELATED INDUSTRIES AND SECTORS Sectors and industries that make Denton creative include computer technology, research, design, and the arts. Representative EDA clusters include the following. Sources: US Bureau of Labor Statistics; Emsi 2020.1—QCEW Employees, Non-QCEW Employees, and Self-Employed; US Economic Development Administration; Institute for Strategy and Competitiveness at Harvard Business School (HBS); TIP Strategies. Note: The cluster methodology developed at HBS has been adjusted by TIP Strategies to align with the six-digit NAICS classifications used by Emsi. STRATEGIES AND ACTIONS 2B.1. CHAMPION AND CONVENE. The City can strengthen entrepreneurship in Denton by advocating for local startups and serving as a connector between entrepreneurs and the talent, capital, and networks they need. 2B.1.1. Support the expansion of networking channels and opportunities for relationship building among the region’s entrepreneurs, startups, and students. ►While the City might not directly oversee these programs, it can support the efforts of partner organizations, such as Stoke and universities. 2B.1.2. Establish connections with DFW entrepreneurship organizations such as Dallas 1 Million Cups, 1 Million Cups Frisco, Dallas Innovates, Capital Factory, and the Dallas Entrepreneur Center. ►Connecting with regional efforts not only helps make local entrepreneurs aware of available resources but also helps raise awareness in DFW about Denton’s assets and the City’s commitment to creating an entrepreneurial ecosystem. ►Networking with regional organizations and becoming more visible in these initiatives can also help attract entrepreneurs to Denton. 2B.1.3. Assemble a knowledge resource network to support entrepreneurs and companies with access to financial, legal, policy, and research information needed to grow their businesses. ►Communities take different approaches to creating “entrepreneur support mechanisms,” a phrase coined by the Ewing Marion Kauffman Foundation, to connect CREATIVITY Number of jobs in the DFW metropolitan area: 179,361 Percent of jobs in the DFW metropolitan area: 4.5% COMPUTER SERVICES SOFTWARE PUBLISHERS RESEARCH ORGANIZATIONS ARCHITECTURAL SERVICES PRINTING SERVICES DESIGN SERVICES OTHER MARKETING-RELATED SERVICES PUBLISHING ADVERTISING-RELATED SERVICES PERFORMING ARTISTS “There are a lot of pearls in Denton, but they’re not on a string yet.” —Denton entrepreneur CREATIVE DENTON STRATEGIES 167 23 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS entrepreneurs with the information they need. For example, KCSourceLink, an intermediary in the Kansas City region, created a Resource Navigator with over 240 businesses that can connect entrepreneurs to different types of knowledge and resources. More examples can be found through Kauffman’s ESHIP Communities initiative. ►Fargo’s Emerging Prairie initiative provides an ecosystem that brings together entrepreneurs, large corporations, educational institutions, nonprofits, and students through networking events, coworking space, skills training, and more (see case study on page 27). 2B.1.4. Partner with local and regional partners to design reverse-pitch competitions to engage major corporations and organizations in the DFW Metroplex with needs for innovation. ► In a reverse-pitch competition, established businesses pitch a challenge to entrepreneurs and solicit solutions. Businesses have their challenges addressed while entrepreneurs benefit from establishing connections and increased awareness about their startups.► Denton can customize a reverse-pitch competition for its entrepreneurship community by connecting local entrepreneurs with school districts in the region to tackle edtech challenges. ► Helping the City solve issues, such as sustainability, housing, and other community challenges through social entrepreneurship, is another area where this approach could be beneficial. 2B.1.5. Ensure that targeted resources are available for businesses owned by women and people of color, who have historically faced barriers to accessing traditional economic development tools (e.g., create a dedicated fund to assist historically underutilized businesses). 2B.2. ACCESS TO CAPITAL. Increase access to capital for Denton entrepreneurs by aggregating information about diverse sources of funding and developing relationships with potential funders. 2B.2.1. Cultivate relationships with the DFW venture capital (VC) community so that local companies are not forced to relocate after they grow beyond their initial rounds of capital. ► Gather information about trends in the DFW market, what local VCs are investing in, and projections for growth. ► Connect Denton’s high-potential startups to local and regional funders. ► Create a database of capital resources, including local banks, angel investors, and high-net-worth individuals, to drive the City’s internal work plan (e.g., guide networking strategies and establish priorities) and share with partner organizations (i.e., Denton Innovation Group). 2B.2.2. Partner with the Denton Angels to expand access to capital for Denton startups. Work with other angel networks in the DFW Metroplex, and across Texas, to improve deal flow for Denton companies and investors. ►The role of the City should be focused on facilitating connections between investors and startups in Denton and making connections to regional organizations. 2B.2.3. Network with regional entrepreneurship programs so that they become familiar with Denton and the resources available for businesses looking to grow within the DFW Metroplex. 2B.2.4. Revise the funding requirements for the EDP Investment Fund to be more inclusive of innovative startups that might not meet current thresholds for employment and capital investment.► Over the long term, creating a separate fund dedicated to entrepreneurship in Denton is preferable, however, a short-term solution is to create an exception for startups seeking support from the EDP Investment Fund. CREATIVE DENTON STRATEGIES 168 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 24 ► A potential model for a startup fund is the McKinney Innovation Fund (announced in January 2020) provided by the McKinney Economic Development Corporation. Eligibility and incentives are differentiated for startups at different phases of their life cycles. For example, growth startups have lower thresholds for minimum annual revenue and employees compared to established startups seeking to relocate to McKinney, Texas. ► A more rigorous analysis and exploration of the needs of startups in Denton is required to develop a new fund that effectively addresses barriers specific to this community. The City can convene a small task force of entrepreneurs and those connected to the DFW entrepreneurial ecosystem to provide input that can guide specific elements of a startup fund. ► Some elements that the City should consider for building a startup fund include differentiated support for startups at different phases of growth, target industries and sectors, hiring of targeted residents (such as women and Black, indigenous, and people of color [BIPOC]), number of jobs, and wages. 2B.3. ECOSYSTEM BUILDERS. Thriving entrepreneurial ecosystems rely on ecosystem builders to coordinate disparate organizations and initiatives. Denton has a handful of strong builders, including Stoke and TechMill. Their efforts to foster collaboration should be supported through financial resources and capacity building. 2B.3.1. Support the Denton Innovation Group to define a vision for entrepreneurship in Denton, establish goals, measure progress, and connect with DFW organizations.► The City’s role in this effort is envisioned as a supporting partner rather than a lead. ► Support could include donating financial resources, such as helping to engage a consultant or facilitator to build out a detailed work plan, or the commitment of time and participation in this effort. 2B.3.2. Launch an accelerator to support growth of existing companies. ► Accelerators are programs that help startups scale-up by offering mentorship, facilitating connections to investors and other businesses, and building capacity for the startup to grow. Typically, accelerators support a small cohort of high-potential, early-stage startups that have already experienced some level of success or market validation. ►A major challenge in Denton is the lack of resources for companies that seek to scale up. Startups tend to “outgrow” Denton and move to more well-resourced communities. Examples of successful accelerators include Techstars and Y Combinator. The Innovation Depot in Birmingham, Alabama, is another potential model to follow.► State and federal resources are available to support accelerators. For example, the US SBA Growth Accelerator Fund provides over $4 million in prizes to accelerators across the country on an annual basis. 2B.3.3. Host a Citywide pitch competition to identify and develop innovative entrepreneurs in Denton. This not only builds Denton’s creative brand but also provides the City with a way of identifying top talent in the community. 2B.3.4. Support the development of office space where companies can expand. Continuing to prioritize redevelopment in the downtown area and using flexible zoning will facilitate these efforts. WHAT IS ECOSYSTEM BUILDING? “Ecosystem building is emerging as a new profession at the intersection of economic and community development. Successful ecosystem builders must connect traditional, top-down economic development approaches with the grassroots, bottom-up, community-driven environments in which most entrepreneurs thrive.” —Ewing Marion Kauffman Foundation, “Entrepreneurial Ecosystem Building Playbook 3.0.” CREATIVE DENTON STRATEGIES 169 25 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 2B.4. EDTECH CLUSTER. Strong higher education presence and innovation in Denton independent school district (ISD) make Denton a competitive spot for education technology (edtech) companies. A growing cluster of edtech companies in Denton is applying advanced technologies in K–12, higher education, and adult learning environments. 2B.4.1. Capitalize on Denton’s status as an emerging hub for edtech companies to drive additional growth and investment in this sector and to attract more creative professionals to Denton. ►Promote Denton’s edtech companies and link them with potential business expansion/relocation prospects in other markets. 2B.4.2. Create an edtech alliance with entrepreneurial companies, Denton ISD, UNT Murphy Center for Entrepreneurship and Innovation, and the Center for Women Entrepreneurs at TWU to identify opportunities to strengthen and diversify edtech in Denton. ►Research other edtech alliances across the US to understand how they are structured. ►Hold an introductory meeting to identify the range of possible partners and to explore common opportunities and/or needs the alliance could address. ►Consider possible activities the alliance could take on, such as hosting networking events and conferences, publishing materials, and advocating for policies supportive of edtech. ►Establish channels for students to engage with edtech companies and leaders through internships and case competitions. 2B.4.3. Support the expansion of Denton ISD’s annual Technology in Action Conference (TIACON) about education technology and curriculum. ►Utilize the event to highlight existing edtech businesses that have been founded in Denton, including ReadyRosie, Wildcards, ALL In Learning, From the Future, and Kinful. 2B.5. RECRUIT GROWING STARTUPS. Target and recruit growing early-stage firms in the DFW Metroplex and other target markets in the US, including larger urban areas on the coasts. Companies growing out of the startup phase might be looking for ways to expand their businesses. 2B.5.1. Engage with DFW entrepreneurship organizations, talent networks, and industry associations to identify new companies. 2B.5.2. Target successful startups in business incubators/accelerators that are on the cusp of outgrowing their existing spaces and are positioned for expansion/relocation to Denton. ►Denton can target startups in several ways, including alignment with the four strategic growth areas of this plan and size of the startup (i.e., by revenue or number of employees). The City is poised to best support small to medium-sized firms that have outgrown initial rounds of funding or support from incubators. Firms that are interested in expansion but not large enough to need extensive office space in Denton are a good fit. The related industries and sectors listed for each growth area also offer a starting point for identifying aligned startups.► Many universities in the DFW Metroplex operate incubators and/or accelerators for businesses started by students or faculty. The City could target entrepreneurs located at these institutions who are ready to expand beyond the university. For example, Denton could partner with the UNT Murphy Center for Entrepreneurship and Innovation to identify the next level of funding and support that its entrepreneurs need to expand or stay in Denton. ►Some chambers of commerce and economic development organizations in the region maintain lists of major incubators and accelerators that the City can use to begin outreach and relationship-building efforts. One example is the incubator list from Say Yes to Dallas. CREATIVE DENTON STRATEGIES 170 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 26 2B.5.3. Track VC firms in DFW, Silicon Valley, Austin, and other markets that have recently funded high-growth, innovative businesses. ►Use this list to follow VC trends and identify high-growth businesses that might be targets for expansion or relocation. This will also help the City build relationships in the VC community and facilitate connections to Denton startups. 2B.5.4. Use resources like the Inc. 5000 (a list of the fastest-growing private firms in the US based on year-over-year revenue growth) to identify firms that would be a good fit for Denton. Additional resources include the following. ►Crunchbase (for identifying recipients of venture funding) ►Fast Company (magazine about the world’s most innovative companies) ►MIT Technology Review (magazine about the smartest companies) 2B.6. PROMOTING DENTON’S CREATIVE BRAND. A foundational component of building an entrepreneurial ecosystem is making residents aware of how entrepreneurship can help to drive the economy. The City should collaborate in raising awareness of success stories, both locally and regionally. More information about the need for a revamp of Denton’s marketing efforts is in the Capacity and Resources section. 2B.6.1. Revise marketing materials to include specific information about the economic impact of startups to Denton’s economy and the incentives/resources provided specifically to startups. 2B.6.2. Aggressively utilize the City’s social media channels to publicize successes. 2B.6.3. Pitch stories about successful Denton companies to media outlets, such as the Denton Record-Chronicle, Dallas Morning News, Fort Worth Star-Telegram, Dallas Innovates, and D Magazine. 2B.6.4. Develop a Citywide entrepreneurial recognition program to harness the strengths of local efforts that already exist in Denton. CREATIVE DENTON STRATEGIES 171 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS27 CREATIVE DENTON CASE STUDY EMERGING PRAIRIE | FARGO, ND www.emergingprairie.com TAKEAWAYS FOR DENTON ►At a critical point in its history, EP changed its business model in order to diversify its funding sources and become more financially stable. ►While the coworking space is an important part of EP, its ecosystem consists of broader components aligned to clear economic goals and targets for growth. ►Equity and inclusion are viewed as a business imperative, and intentional efforts are made to diversify the entrepreneur pipeline. BACKGROUND Emerging Prairie opened in 2013 with the mission of growing the entrepreneurial community in North Dakota and furthering economic growth for the state. Originally a for-profit organization, EP became a non-profit in 2016 in order to remain a financially stable independent organization. Their revenue model is a mix of philanthropy and earned income, which is generated through consulting services, membership to the coworking space (the Prairie Den), and paid partnerships. EP has three divisions: 1) the Ecosystem which includes the Prairie Den, events, conferences, and programming, 2) the Emerging Digital Academy, a full-time, 20-week coding school that launched in 2020, and 3) the Grand Farm Initiative, which will create an AI-based working farm prototype by the year 2025 while cultivating a support system for the future of farming. PROGRAM OUTCOMES (2019) ►Microsoft invested $1.5 million in the Grand Farm Initiative ►EP held 135 events with more than 11,000 community members in attendance ►Year-over-year membership increased by 41 percent 172 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 2828 2C. SUSTAINABLE DENTON THE VALUE Cities and regions are starting to embrace the growing importance of sustainability to economic vitality. Due to its 100 percent renewable energy goal, Denton is on track to becoming one of the most sustainable communities in the country. A select group of US cities have committed to this ambitious goal, and only a handful have achieved it. Aligning the City’s economic development efforts with its sustainability goals can bring environmentally conscious growth to Denton that both enhances the City’s environmental ethos and attracts business investment. THE ANCHORS Denton Municipal Electric (DME) is one of Denton’s greatest assets not only because of affordable rates but also because of its role in fostering sustainable development and growth. Denton’s ability to meet 100 percent of its electric needs from renewable sources and have a local gas plant allows the City to maintain competitive rates, while also reducing its environmental impact. Building a sustainability-focused growth strategy with DME as a centerpiece will provide Denton with a strategic advantage in attracting green businesses and investment. THE ECOSYSTEM Denton has a significant opportunity to lead the sustainability ecosystem in North Texas as well as the entire state. Its commitment to renewable energy and environmentalism is forward looking and progressive. Working closely with DME, the City’s Economic Development Department can continue to build resources and incentives for greater energy efficiency among Denton’s businesses. The City can leverage its reputation for sustainability to attract environmentally conscious businesses and be a thought leader in DFW’s renewable energy sector. Strategies include identifying environmentally conscious businesses, preparing targeted marketing materials, helping developers and companies access federal energy incentives, and staying current on relevant trends. 173 29 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS SUSTAINABLE DENTON ECOSYSTEM ANCHOR INSTITUTIONS ►Denton Municipal Electric ►UNT Department of Geography and the Environment ►UNT College of Engineering DENTON’S GROWTH ECOSYSTEM COMPETITIONS & EVENTS ►NTAEP TCEQ Trade Fair ►CleanTX GridNEXT Conference ►Society of Texas Environmental Professionals Annual DFW Meeting LOCAL CAPITAL ►Energy Efficiency Incentive ►Solar Installation Incentive ►Engineering Audit ►Standard Offer Incentive ►Green Business Program BUILDING BLOCKS ►North Texas Association of Environmental Professionals ►CleanTX ►Texas Municipal Utilities Association ►Advancing Data Center and IT (Information Technology) Infrastructure Professionals EMERGING PARTICIPANTS ►Embassy Suites ►North Central Texas Council of Governments Public Works Council ►North Texas Green Council ►North Texas Renewable Energy Group ►Sierra Club Lone Star Chapter PUBLIC AWARENESS ►Green Source DFW ►Renewable Energy ►Journal of Renewable and Sustainable Energy ►The Solar Reflector 174 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 30 RELATED INDUSTRIES AND SECTORS Sectors and industries where Denton can have a sustainable impact include construction, utilities, and engineering. Representative EDA clusters include the following. Sources: US Bureau of Labor Statistics; Emsi 2020.1—QCEW Employees, Non-QCEW Employees, and Self-Employed; US Economic Development Administration; Institute for Strategy and Competitiveness at Harvard Business School (HBS); TIP Strategies. Note: The cluster methodology developed at HBS has been adjusted by TIP Strategies to align with the six-digit NAICS classifications used by Emsi. STRATEGIES AND ACTIONS 2C.1. SIMPLY SUSTAINABLE STRATEGIC PLAN. Denton’s Simply Sustainable strategic plan from 2012 was ahead of its time and offered a blueprint for improving the City’s sustainability. Integrating economic development efforts with those goals can strengthen Denton’s environmentally conscious identity and attract investments aligned with environmental priorities. This plan is not meant to replace other sustainability efforts from the City but is intended to draw attention to areas where the Economic Development Department can support and build on the City’s existing sustainability strategies. 2C.1.1. Prioritize the energy efficiency and conservation goal from the Simply Sustainable plan by focusing on building standards and incentives for greener residential and business development. ►Explore options for putting this priority into practice, such as creating a green incentive fund, dedicating part of an existing fund, or establishing a point system for the award of incentives. 2C.1.2. Work with DME and the City’s Development Services Department to better understand green building standards, including what is currently required of developers. ►Continue to incorporate leadership in energy and environmental design (LEED) certification and environmentally beneficial activities into incentive policies and development standards. ►Develop tiers of building standards that will promote sustainability and can be opted into by developers who want to build more environmentally friendly buildings. 2C.1.3. Build a more robust set of incentives to encourage developers to adopt green building standards. More incentives should be offered for developments that meet higher tiers of standards. ►Strengthen the commercial incentives currently offered by DME by offering stronger incentives differentiated by different levels of energy efficiency. SUSTAINABILITY Number of jobs in the DFW metropolitan area: 265,586 Percent of jobs in the DFW metropolitan area: 6.7% ENGINEERING SERVICES GENERAL CONTRACTORS SPECIALTY CONTRACTORS DEVELOPERS ALTERNATIVE ELECTRIC POWER ELECTRIC POWER DISTRIBUTION WATER PROCESSING WATER, SEWAGE, AND OTHER SYSTEMS WATER AND SEWER LINE DISTRIBUTION SANITARY SERVICES SUSTAINABLE DENTON STRATEGIES 175 31 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS ►Collaborate with the City’s Development Services Department in adding structural incentives for green buildings, such as expedited review/permitting processes and density bonuses. ►Reduce or reimburse fees for developments that follow green building standards. Examples of fees include review/permitting fees and impact fees. This might require setting aside funds for fee reduction/reimbursement. 2C.2. TARGET ENVIRONMENTALLY CONSCIOUS BUSINESSES. Denton has an opportunity to target environmentally conscious businesses that are attracted to the community’s sustainability and conservation efforts. The community’s commitment to and actions toward sustainability will make Denton a national, and even global, leader in sustainable growth and green development. 2C.2.1. Identify businesses that are high electricity users, such as data centers. DME’s competitive rates and the ability to power businesses using 100 percent renewables is a good marketing opportunity for both the company and for Denton. ►While data centers do not bring many jobs to a community, they consume vast amounts of electricity, which will provide Denton with additional revenue. Global innovation is focused on making data centers more energy efficient, and Denton can be on the cutting edge of this movement because of its renewable resources. ►According to a CBRE US Data Center Trends report, the DFW Metroplex was the second fastest-growing market for data centers in 2019. Low utility costs, ease of transportation access, incentives, and safe climate conditions make DFW an ideal location for data centers. 2C.2.2. Provide technical assistance to developers and businesses that want to leverage federal incentives, such as the Business Energy Investment Tax Credit, or obtain LEED certification. 2C.2.3. Network with regional and statewide organizations focused on clean energy, municipal utilities, and data centers to understand trends and develop relationships with industry leaders. 2C.2.4. Connect with real estate developers and site selectors who have experience supporting environmentally conscious firms or industries that would benefit from renewable energy. ►For example, there are data center operators and developers who specialize in data center development. Example firms include Edgecore Networks, Aligned Energy, and CBRE’s Data Center Solutions group. The City should develop relationships with these firms and pitch Denton’s value proposition for data centers, including low utility rates, 100 percent renewable energy, and other incentives offered to businesses seeking to expand or relocate to Denton. ►Denton should also build stronger relationships with site selectors, both general and those specializing in specific industries. The list of related industries and sectors provided earlier in this section provides a starting point. It is worth noting that priority relocation and attraction factors still include land availability, low utility rates, access to skilled labor, and easy logistics. Denton’s renewable energy is a value-add but should not be relied on alone to drive site selection and relocation decisions. ENERGY EFFICIENT DATA CENTERS “More and more IT companies are boasting of their commitment to achieving 100 percent reliance on renewable energy. To fulfil such pledges, some of the biggest are building their own energy campuses… More often, the data titans sign contracts to receive dedicated supply from existing wind and solar farms. In the U.S., those can still be hard to come by.” —Fred Pearce, “Energy Hogs: Can World’s Huge Data Centers Be Made MoreEfficient?” Yale Environment 360. SUSTAINABLE DENTON STRATEGIES 176 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 32 2C.3. THINK GLOBAL, ACT LOCAL. In 2015, the United Nations Member States adopted 17 Sustainable Development Goals (SDGs). The SDGs create a vision for economic prosperity, sustainability, and equity that is shared by many cities around the world, including Denton. The City’s leaders have an opportunity to think global and act local by adopting several SDGs focused on sustainability and economic growth. 2C.3.1. Adopt the SDGs as part of the City’s work plan and formally make them a priority for the City of Denton through Council approval. The four SDGs most related to Denton’s sustainability and economic development efforts are highlighted here. ►SDG 7: AFFORDABLE AND CLEAN ENERGY. Ensure access to affordable, reliable, sustainable, and modern energy for all. ►SDG 8: DECENT WORK AND ECONOMIC GROWTH. Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. ►SDG 9: INDUSTRY, INNOVATION, AND INFRASTRUCTURE. Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation. ►SDG 11: SUSTAINABLE CITIES AND COMMUNITIES. Make cities and human settlements inclusive, safe, resilient, and sustainable. 2C.3.2. Align performance metrics with the targets and indicators associated with each SDG. Not all targets will be directly applicable, so Denton can also set its own targets aligned to the SDGs. See the “Strategic Performance Metrics” section for more details. 2C.4. GREEN MARKETING. Denton should be commended for the ambitious sustainability goals and significant progress toward those goals. These sustainability efforts should not be distinct from the City’s economic development activities. With better marketing of Denton’s sustainability as a business advantage, the City can achieve both its environmental and economic ambitions. See the “Marketing” section for more details. 2C.4.1. Incorporate Denton’s Green Business Program in economic development digital marketing. The program can benefit from more targeted promotion to the business community. ►Add an annual award or appreciation period for Denton’s most sustainable and energy efficient businesses. ►Promote the Green Business Program during BRE visits and include information on participation in the City’s database of existing businesses. 2C.4.2. Revise digital marketing materials to include a greater focus on Denton’s sustainability goals and 100 percent renewable energy resources. ►According to the Sierra Club, over 150 US cities have committed to 100 percent renewable electricity for their entire communities. Fewer than 10 cities have already achieved this milestone, and soon Denton will be in that elite group. This should be promoted widely and used as a focal point in economic development materials. ►Create more specific resources to target companies in the clean energy sector and include information on incentives for those companies to relocate or expand to Denton. 2C.4.3. Cultivate relationships with regional and statewide clean energy networks. Treat these networks as a channel for promoting Sustainable Denton as well as furthering business attraction efforts. SUSTAINABLE DENTON STRATEGIES 177 33 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS Figure 4. UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS Source: United Nations, Sustainable Development Goals Knowledge Platform. SUSTAINABLE DENTON STRATEGIES 178 34 PROGRAM OUTCOMES (2019) ►Since its inception in 2017, EEIA has supported six to seven startups per cohort. ►EPI has hosted three international summits and conferences focused on sustainable energy. ►San Antonio-based EEIA member, Terra Solar, won $50,000 in the Department of Energy’s 2020 American-Made Solar Prize. ►University of Texas at San Antonio Leaptran won a Smart 50 Award for its energy monitoring and control system for buildings in 2019. TAKEAWAYS FOR DENTON ►Municipal utilities can support economic development efforts in a variety of ways beyond providing utilities. ►DME can play a central role in facilitating green energy innovation in Denton, especially as the City reaches its 100 percent renewable resource goal. ►The combination of Denton’s entrepreneurial scene and broader sustainability goals makes Denton a prime location for clean tech and green energy startups. BACKGROUND Cofounded in 2015 by CPS Energy (San Antonio’s municipal electric utility company) and three energy technology companies (OCI Solar Power, Itron and Landis+Gyr), EPIcenter (EPI) is a nonprofit innovation hub focused on sustainable energy research with a local, national, and global perspective. EPI advances the industry through the EPI Energy Incubator and Accelerator (EEIA) program, advisory services, and networking events and conferences. EEIA’s mission is to support early-stage startups with commercially viable technologies and services related to sustainable energy innovation. EEIA matches startups with mentors and subject matter experts to help create and refine business plans as well as connect to the funding, legal, and capital sources needed to achieve commercialization and financial sustainability. EEIA also offers tiered membership for businesses and entrepreneurs who are looking for select services or virtual support. EPICENTER SAN ANTONIO, TX www.epicenterus.org SUSTAINABLE DENTON CASE STUDY 179 35 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 2D. COMPETITIVE DENTON THE VALUE Planned developments and improved infrastructure will continue to elevate Denton as a vibrant economic node in the DFW Metroplex. Denton already has unique assets in its universities, hospital systems, and authentic town square that make it stand apart from other DFW communities. As new housing developments and transportation improvements are made over the next 10 years, Denton will be in a more competitive position for business development and talent attraction. THE ANCHORS Denton’s strong hospital systems draw visitors to the City to receive vital medical services. These hospitals provide a fundamental service for the entire county and contribute significant tax revenue for the City of Denton both directly and indirectly. Furthermore, the A-train rail service and bus system operated by the Denton County Transportation Authority (DCTA) provide critical transit infrastructure that many other DFW communities lack. Leveraging these anchors for future development is crucial for Denton’s long-term growth. THE ECOSYSTEM Numerous recent and planned developments are raising Denton’s profile and will position the community for more business investment and new residents. Most notably, the Cole and Hunter Ranch development off I-35W will alter Denton’s profile for the better and make the City a formidable competitor for DFW businesses and talent. Facilitating the success of these developments, continuing to incentivize downtown growth, and improving vital infrastructure will lay the groundwork for Denton’s long-term vitality. 35 180 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 36 ANCHOR INSTITUTIONS ►Medical City Denton ►Texas Health Presbyterian Hospital Dallas ►Denton County Transportation Authority ►University of North Texas ►Texas Woman’s University ►North Central Texas College DENTON’S GROWTH ECOSYSTEM COMPETITIONS & EVENTS ►NTCAR Commercial Real Estate Expo ►Dallas Regional Chamber Annual Meeting ►Fort Worth Chamber of Commerce Annual Meeting LOCAL CAPITAL ►Downtown Denton TIRZ ►EDP Investment Fund BUILDING BLOCKS ►Denton Chamber of Commerce ►Denton Black Chamber of Commerce ►Commercial Real Estate Development Association EMERGING PARTICIPANTS ►Hillwood Communities ►Stratford Land ►Allegiance Hillview ►Denton Main Street Association PUBLIC AWARENESS ►Development Magazine ►Texas Hospitals ►BOMA Magazine COMPETITIVE DENTON ECOSYSTEM 181 37 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS RELATED INDUSTRIES AND SECTORS With the Hunter Ranch and Cole Ranch developments, Denton is poised for a major expansion of both residents and jobs. To be competitive, Denton must capture an adequate share of DFW’s growth in areas such as higher education, healthcare, and office campuses. Representative EDA clusters include the following. Sources: US Bureau of Labor Statistics; Emsi 2020.1—QCEW Employees, Non-QCEW Employees, and Self-Employed; US Economic Development Administration; Institute for Strategy and Competitiveness at Harvard Business School (HBS); TIP Strategies.Note: The cluster methodology developed at HBS has been adjusted by TIP Strategies to align with the six-digit NAICS classifications used by Emsi. STRATEGIES AND ACTIONS 2D.1. COLE AND HUNTER RANCH. Denton City Council’s approval of the Cole and Hunter Ranch development will bring significant change to Denton. The addition of new homes, an employment center, retail amenities, and greenways stretched across 6,400 acres will transform Denton into a major economic hub. The development also opens the potential for more industrial and commercial development, especially south of the airport. 2D.1.1. Dedicate staff resources to supporting Hillwood and Stratford in making the Cole and Hunter Ranch vision come to fruition. 2D.1.2. Provide concierge services to help the developers navigate processes across City departments and solve challenges that arise. 2D.1.3. Continue to work with Hillwood and Stratford to ensure that a mix of housing options, from high-density to low-density, are built to increase the diversity in Denton’s housing stock. ►The development will bring higher-end housing options that are necessary to attracting and retaining many high-paying jobs and professional talent. ►The City can work with Hillwood and Stratford to ensure that a mix of commercial, industrial, and retail opportunities unfold as planned. The developers already have a master plan for the development; therefore, the City should continue to work with them, maintain flexibility as issues arise, and help resolve challenges in a timely manner to not delay development. 2D.2. DOWNTOWN DEVELOPMENT. Successful downtown development and an authentic town square are among Denton’s top economic development achievements. The City should continue to prioritize the downtown area by incentivizing residential and commercial development beyond the square. 2D.2.1. Sustain implementation of the City’s Downtown Implementation Plan adopted in 2010. CORPORATE HEADQUARTERS FINANCIAL / CREDIT INTERMEDIATION SERVICES INSURANCE CARRIERS COLLEGES, UNIVERSITIES, PROFESSIONAL SCHOOLS HOSPITALS COMPETITIVENESS Number of jobs in the DFW metropolitan area: 504,819 Percent of jobs in the DFW metropolitan area: 12.8% HEALTHCARE PROVIDERS COMPETITIVE DENTON STRATEGIES 182 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 38 ►The plan’s recommendations to create more mixed use, pedestrian-friendly development extending off the downtown square are still essential to Denton’s success. 2D.2.2. Continue utilizing various tools (development incentives, Chapter 380 agreements, TIRZ financing, and historic tax exemptions) to stimulate new private investment in the downtown. ►Some communities offer incentives to developers in order to build developments aligned with the goals of the cities. Incentives for developers often come in the form of fee reimbursements, density bonuses, expedited processing, and other rebates. Developer incentives are commonly used to stimulate development of affordable housing (or mixed-income housing in dense areas) as well as energy-efficient buildings. 2D.2.3. Prioritize development of additional residential and commercial office space in downtown Denton, especially the corridors extending off the square. ►It is important to incentivize the location of new industrial businesses and the relocation of existing industrial businesses to Westpark Industrial Park so that downtown Denton can be more pedestrian friendly and accommodate nonindustrial companies. ►Though the downtown square is thriving, more focus on the corridors extending off the square will help transform downtown Denton into a robust residential and commercial district. 2D.3. PROFESSIONAL OFFICE SPACE. Denton’s lack of professional office spaces poses a barrier to the growth of existing companies as well as the attraction of larger professional services firms. To boost Denton’s competitiveness for business investment, the City must incentivize the development of office spaces. 2D.3.1. Promote the development of Class A buildings for office space and creative redevelopment of existing structures to attract professional services and tech-oriented companies. ►The City could utilize a Chapter 380 agreement to incentive the development of new or refurbished office space in the downtown for small businesses and entrepreneurs. ►Alternatively, the City might apply for a grant from the US EDA to support the public infrastructure needed for a development project. ►Ensure that new Class A building office space is developed as planned in the Cole and Hunter Ranch developments to create a new employment center for Denton. 2D.3.2. Utilize financial incentives to support the development of new or refurbished office space. ►For example, Sugar Land, Texas, created an incentive focused on Class A building development. The existing incentives (e.g., grants, loans, tax abatements) to real estate developers who create new Class A building office space according to a range of guidelines. 2D.3.3. Strengthen relationships with the regional real estate development and brokerage community by hosting quarterly or annual meetings with DFW real estate professional and trade associations. 2D.4. INFRASTRUCTURE. As Denton continues to grow, the need for its infrastructure to keep up is paramount. The City’s Economic Development Department team should work with the City’s Development Services Department in prioritizing improvements that will provide the most return on investment and catalyze other transformational projects. 2D.4.1. Extend basic infrastructure to north Denton around Loop 288 to lay the groundwork for future residential and commercial development after TxDOT completes reconstruction of the loop. 2D.4.2. Improve the aesthetics and accessibility of main corridors leading into the downtown square. Dallas Drive and Fort Worth Drive are the main entrances from I-35 into the City core. COMPETITIVE DENTON STRATEGIES 183 39 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 2D.4.3. Launch a Denton Fiber initiative to expand broadband connectivity and access to all businesses and residents. ►Work with all broadband internet providers in Denton to create an initiative under one brand as a tool to attract technology companies, investors, and talent. ►Develop procedures and requirements for the installation of 5G infrastructure in new developments to prepare Denton for future technology. ►Close the digital divide by targeting resources to expand internet access for Denton residents. As seen in Figure 5, a larger share of Denton’s residents lacks broadband internet at home compared to surrounding communities. ►Explore building a municipally owned broadband network and leasing it to internet service providers to incentivize last-mile services to residents in low- and moderate-income neighborhoods. ►The City can also apply for an EDA grant to help cover infrastructure costs associated with an initiative to expand broadband connectivity in Denton. 2D.5. DIGITAL MARKETING. One of the most common challenges cited by stakeholders is the ability to tell the “Denton story” in a way that fully captures the City’s advantages and leverages modern communications platforms. Digital marketing resources are necessary for a modernized economic development program. 2D.5.1. Refresh the Denton EDP website so that it serves as the City’s primary online portal for economic development prospects, site location consultants, commercial real estate brokers, and other business decision-makers. The new sites should include features and information such as the following. ►The City’s specific functions related to economic development (e.g., incentive programs, economic development initiatives, staff directory). Figure 5. BROADBAND CONNECTIVITY IN DENTONSHARE OF HOUSEHOLDS WITH ACCESS TO BROADBAND INTERNET AT HOME Sources: American Community Survey, 2018 5-year sample; TIP Strategies. COMPETITIVE DENTON STRATEGIES 184 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 40 ►Focus on providing relevant details highlighting what makes Denton competitive for investment and talent in its strategic growth areas. ►Present in-depth profiles and descriptions of local and regional workforce strengths. ►Include testimonials from business leaders about why Denton is a great place to do business. This information can be captured during BRE visits. 2D.5.2. Establish a digital marketing campaign to highlight Denton’s economic development advantages and success stories. Develop baseline digital marketing tools and engage in regular digital marketing activities, including the following. ►Infographics created to visually highlight Denton’s core assets and advantages. ►Periodic LinkedIn Pulse articles that describe Denton’s competitive business advantages, using interviews with existing businesses to tell their story. ►Weekly Facebook, LinkedIn, and Twitter posts linking to the Pulse article. ►Short YouTube videos created to highlight what makes Denton a great community for businesses and residents. These videos can also be aired on Denton Television. 2D.5.3. Collaborate with the Denton Chamber of Commerce to create digital materials aimed at commercial real estate brokers, describing the attractive environment for business relocation. ►Use the material to teach local brokers about the top selling points of Denton and why it stands out compared with the rest of the DFW Metroplex. COMPETITIVE DENTON STRATEGIES 185 41 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS TAKEAWAYS FOR DENTON ►Leverage DME’s workforce and capabilities to lay the foundation for advanced technology benefitting both residents and businesses. ►Create an inclusive and affordable broadband network for residents and businesses to enable growth and prosperity. ►Market Denton as a technologically advanced and inclusive community to attract new residents and drive business investment in the city. BACKGROUND In the last half of the twentieth century, Chattanooga was a city in decline. Many residents did not have access to broadband services, and talent was fleeing in search of better opportunities. The Enterprise Center (TEC), a nonprofit public- private partnership, was created and tasked with growing a high-tech ecosystem in Chattanooga and improving its citizens’ lives through technology. To minimize power outages and create a smart grid for the city, EPB (Chattanooga’s municipal electric utility company) began to update its electrical grid with fiber optic cables. EPB and city officials realized that universal access to fiber could also slow the outflow of talent and attract businesses. Since then, TEC has prioritized research and development of the smart grid by connecting EPB and the University of Tennessee at Chattanooga with organizations across the nation. In 2019, EPB remains the only provider in the nation to offer residential 10-gigabit internet service. EPB’s territory extends over 600 miles and includes more than 100,000 customers for its telecom services.PROGRAM OUTCOMES (2019) ►In 2009, EPB received $111 million from the US Department of Energy to build its fiber network. ►Between 2011 and 2016, almost 4,000 jobs were created or maintained in Hamilton County, Tennessee. Chattanooga generated nearly $1 billion as a direct result of its fiber optic network. ►Having the fastest internet connection in the nation has attracted major businesses (e.g., Volkswagen and Amazon), startups and investors, and led to the creation of an Innovation District. GIG CITYCHATTANOOGA, TN www.chattanoogagig.com COMPETITIVE DENTON CASE STUDY 41 186 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 42 GOAL 3 STRENGTHEN COMMUNITY INCLUSION Many in the economic development field are beginning to recognize the importance of inclusive economic growth to provide opportunity for all residents, particularly those with lower incomes or levels of educational attainment. An economic development strategic plan that does not address how to deliver broader prosperity to all constituents would be shortsighted. This is especially imperative for Denton, which has a larger share of low-income residents than its peers. The median household income in Denton is $56,500, falling below the overall median household income in Denton County of $83,400 (American Community Survey, 2018 5-year sample). Efforts to grow Denton’s existing industries and attract new business investment will not guarantee that Denton’s vulnerable communities will be able to share in this prosperity. Denton cannot afford to leave existing residents behind. Addressing the challenges and barriers that low- and moderate-income residents face will be crucial to creating a more economically vibrant and resilient community. The City’s Economic Development Department and Community Development Department teams already recognize this reality and are collaborating on efforts to expand affordable housing in Denton. This collaboration should be expanded on and integrated with workforce development priorities. Expanding affordable housing options and building career pathways in high-demand industries are two central ways that the City can align its economic, workforce, and community development efforts to benefit Denton’s most vulnerable residents. STRATEGIES AND ACTIONS 3.1. WORKFORCE COLLABORATIVE. Successful communities across the US are focused on aligning the needs of businesses and creating workforce pathways for residents. Denton should convene businesses, training providers, and nonprofits to work together in creating meaningful career pathways in critical sectors. 3.1.1. Build off the workforce collaborative, detailed in Strategy 1.4, to focus on workforce needs during the period of economic recovery. ►Convening a workforce collaborative should be an ongoing task of the City’s Economic Development Department team. ►Connect any efforts of a Denton-specific workforce collaborative to the work of the DCWSLT focused on the ALICE population. 3.1.2. Continue to convene regular meetings with major employers, Workforce Solutions, NCTC, and other providers to identify business needs and connect unemployed residents to jobs. Align economic, workforce, and community development efforts to meet critical community needs and to strengthen community inclusion. 187 43 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS ►Considering COVID-19, the immediate focus should be on supporting unemployed residents in connecting to jobs or reskilling them for new opportunities. 3.1.3. Over the long term, identify two to three occupations and/or skills that are critical to Denton employers and develop pathways to support residents in moving into those roles. 3.1.4. Organize the collaborative around sharing data, coordinating demand and supply, aligning efforts to build talent pipeline, and streamlining BRE efforts. 3.2. HOUSING AFFORDABILITY. In addition to needing higher-end housing options (see Appendix A for more details), Denton also has a housing affordability issue. Compared to surrounding cities, Denton has a larger share of high-need populations. City leaders must address the needs of low- and moderate-income residents to ensure that Denton’s growth is equitable and inclusive. 3.2.1. Continue to collaborate with the City’s Community Development Department in supporting the development or redevelopment of affordable housing in south and east Denton. 3.2.2. Preserve existing housing by offering financial assistance for repairs or retrofitting to maintain naturally occurring affordable housing. ►Work with community development organizations to leverage and scale up existing programs (versus creating new ones). ►Coordinate with the organizations and individuals preparing the City’s affordable housing strategic plan to identify the best approach. 3.2.3. Leverage the federal Opportunity Zones incentive and New Markets Tax Credit to support the development of valuable projects that will support the needs of existing residents. ►Work with the Community Development Department and community organizations to identify projects that need access to capital and can add value to under-resourced neighborhoods. ►Identify specific projects that would benefit the community and pitch the projects to investors in the DFW area with Opportunity Funds. ►Offer financial and other incentives to facilitate the development of these projects. Utilize community development block grants and other economic development grants as well as support through City processes. ►Seek philanthropic funding to support project finances in order to reduce risk for developers and make affordable housing projects more financially feasible. 3.2.4. Identify opportunities for adaptive reuse of existing buildings that can be converted into multiunit housing and preserve existing structures and utility connections. 3.2.5. Improve the development review process to decrease costs for those committed to building workforce and affordable housing. ►Expedited reviews, fee reimbursements, and preapproved plans at low or no cost are best practices used by other communities. TALENT-DRIVEN ECONOMIC DEVELOPMENT PRIORITIES 1. “Realign state economic development spend to invest in proven training solutions, such as customized job training grants and community college partnerships. 2. Target economic development incentives towards opportunity-rich business practices that help build local talent pipelines. 3. Develop and disseminate new skills-based hiring tools that facilitate more efficient and equitable hiring practices. 4. Test new local talent financing solutions, such as revolving loan funds, that target training toward high-demand jobs. 5. Experiment with new regional Talent Exchange intermediaries that connect middle schools, high schools, community colleges, higher education institutions, and in-demand skills providers with businesses in key growth sectors.” —Joseph Parilla and Sifan Liu, Talent-Driven Economic Development: A New Vision and Agenda for Regional and State Economies, Brookings Institution, 2019. GOAL 3 STRATEGIES 188 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 44 3.3. GROW YOUR OWN TALENT INITIATIVE. One of Denton’s top assets is the young talent and energy that the City possesses, due in part to the presence of multiple universities. Over 58 percent of Denton’s population is below the age of 35. By strengthening youth programs and retaining more graduates, Denton can significantly strengthen its talent pipeline and competitiveness for business investment. 3.3.1. Support youth entrepreneurship programs at the local level to foster a culture of innovation and cultivate an entrepreneurial spirit. ►Support could include promotion of activities, programs, and events; financial sponsorships; or participation in the event and/or planning. ►Entrepreneurship education is significant for helping low-income youth to develop skills and knowledge that will support their future success and benefit their communities. ►The National Consortium for Entrepreneurship Education provides resources and technical assistance for entrepreneurial education (http://www.entre-ed.org). 3.3.2. Encourage Denton ISD to incorporate entrepreneurship into academic curricula and increase exposure and access to Denton’s startups. 3.3.3. Gather data from UNT, TWU, and NCTC about graduates, including how many students stay in Denton and the DFW Metroplex versus relocating to other parts of the state or country. ►Identify programs or departments that produce graduates in industries and sectors related to Denton’s strategic growth areas. ►Enhance student connections to the Denton community and businesses by creating internship opportunities, showcasing Denton businesses on campus, and targeting digital marketing for some events and programs to students. GOAL 3 STRATEGIES 189 CAPACITY AND RESOURCES 45 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS190 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 46 Denton’s ability to successfully modernize its economic development programs and implement this plan will depend on a revised approach to its governance and funding mechanisms for economic development. Additionally, the City will require more robust customer relationship management (CRM) systems to track leads and manage information about Denton’s businesses. This section describes considerations for Denton’s capacity and resources to carry out a modernized economic development approach. Recommendations and considerations are provided related to Denton’s EDP, funding resources for short-term economic recovery and long-term success, and internal systems for the City. ECONOMIC DEVELOPMENT PARTNERSHIP The Denton EDP was created in 1987 to formalize shared economic development responsibilities and functions between the City and the Denton Chamber of Commerce. One of TIP’s primary recommendations in the 2003 economic development strategic plan was to create the EDPB to oversee activities of both the City and the chamber. Since then, the EDPB has grown to include representatives from the public and private sectors, anchor institutions, and major constituencies across Denton. The goals and mission of the EDP remain relevant and appropriate for Denton’s economic development efforts. As Denton navigates economic recovery from the COVID-19 pandemic, the EDP will play a critical role in supporting businesses and residents. The economic fallout will be too great for individual organizations and entities to manage alone. It is pivotal that the EDP coordinates efforts to accelerate recovery. Once Denton’s economy recovers from the COVID-19 effects, the EDP will play a leading role in fostering growth and capitalizing on planned investments, such as the Cole and Hunter Ranch development. It will be more necessary than ever to have a high-functioning EDP that can be aggressive, targeted, and strategic in its approach to economic development. Figure 6 provides an overview of the EDP governance structure. Recommendations for the EDP structure include three changes. 1. Creating a partners working group with staff to coordinate core economic development activities. 2. Aligning representation on the EDPB with priorities and strategic growth areas outlined in this plan. 3. Changing the EDPB’s meeting cadence to a quarterly, rather than monthly, basis. Figure 6. ECONOMIC DEVELOPMENT PARTNERSHIP STRUCTURE PARTNERS WORKING GROUP EDP BOARD Membership City, Chamber, DME staff, EDPB Chair or Vice-Chair Broad group of stakeholders Meeting Frequency Monthly Quarterly Purpose Coordinate economic development tasks and activities with a focus on prospect generation, business attraction, BRE, and marketing. Make strategic decisions related to Denton’s economic development goals and the resources necessary to meeting those goals. To facilitate closer coordination, the EDP needs a smaller working group, including primary partners who can manage day-to-day economic development activities. ►This working group should be comprised of staff from the City, the chamber, and the DME. Regular participation from the EDPB chair and/or vice-chair should be included to bridge between the working group and full EDPB. ►Monthly meetings of the partners working group will provide a regular cadence of check-ins about prospects and progress toward implementing the strategies and actions in this plan. A more focused and strategic EDPB should be revised to include representatives from critical sectors and organizations in Denton aligned to the strategies outlined in this plan. ►EDPB meetings should be shifted to a quarterly schedule and focused on Denton’s broad economic development goals and the resources necessary to meeting those goals. ►The current size of the EDPB should be maintained, but seats on the board should be revised to include new representation from the following sectors and functions. ►Denton Municipal Electric ►Entrepreneurship and/or technology ►Workforce development ►Community development ►Marketing and/or tourism 191 47 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS ►Additionally, the EDPB should explore using informal, ad hoc task forces (as needed) to advance work around significant issues like COVID-19 economic recovery and workforce development. FUNDING One of the reasons why Texas is one of the most economically competitive states in the country is a statewide policy allowing local communities to dedicate a portion of their sales tax to fund economic development corporations (EDCs). Communities across the state utilize Type A (focused on industrial development) or Type B (focused on industrial development, parks, museums, sports facilities, and affordable housing) EDCs in order to fund economic development projects. As evidenced in Figure 7, many of Denton’s surrounding neighbors dedicate resources toward economic development in this way. Denton has elected to dedicate its sales tax resources to the DCTA rather than create an EDC. With a sizeable portion of the City’s land off the tax rolls, most of the City’s total revenue comes from sales tax and property taxes from a smaller group of businesses and households. Denton needs to find creative ways to increase the level of resources dedicated to economic development efforts. Successful implementation of this strategic plan will demand increased investment. ECONOMIC RECOVERY AND RELIEF In the short term, Denton’s resources should be focused on providing relief to and accelerating recovery for business and residents. This can be challenging for many communities, as the level of need far exceeds the resources and capacity available. Furthermore, local governments will likely see a decline in their budgets as revenue from sales and other taxes have decreased during the COVID-19 pandemic. Fortunately, Denton County received a large share of the federal 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act and plans to use $24 million for business support. Communities across the US have implemented a few best practices in supporting economic recovery that might be models for Denton. In addition to the strategies highlighted under Goal 1 Accelerate Recovery, the City should apply for federal stimulus funds, repurpose existing tools, and create public-private initiatives. ►APPLY FOR FEDERAL STIMULUS FUNDS. The EDA allocated $1.5 billion from the CARES Act to supplement existing funds dedicated to the Public Works and Economic Adjustment Assistance programs. These programs provide economically distressed communities and regions with funds to support job creation and retention, innovation, enhanced manufacturing, workforce development, and business investment. Some census tracts within Denton meet economic distress criteria. The City’s Economic Development Department team has already identified potential projects that will benefit important communities and priorities in Denton. Efforts to package a possible grant submission to the EDA should be prioritized, as this is a prime opportunity to leverage federal funds to accelerate economic recovery and to support catalyst projects. ►REPURPOSE EXISTING TOOLS. As Denton businesses start to reopen, it is possible that county-level funds will be enough to meet the needs of the business community. However, as the City continues to develop an understanding of how economic recovery is unfolding, there might be gaps in relief and recovery tools that can be filled by temporarily revising existing tools. For example, the EDP Investment Fund, TIRZ funds, and Chapter 380 grants might need to be repurposed to benefit groups that are unable to access county or federal funds. The City could provide targeted supports by creating more flexibility within existing tools. ►CREATE PUBLIC-PRIVATE INITIATIVES. Some communities have formed a public-private partnership to coordinate resources across organizations, provide technical assistance for businesses applying for federal funds and sharing information about the effects of COVID-19 across their cities. Denton is already doing this to provide rental and residential utility assistance. A more robust example of this is #BhamStrong, a public-private partnership formed in Birmingham, Alabama. The partnership includes local businesses, the United Way, the municipal government, and more. Partners have created a resource directory for businesses and residents seeking relief, financial assistance, and information. While existing resources might be limited for the City, creating an economic relief fund in collaboration with the chamber might be helpful in aiding recovery efforts. Alternatively, repurposing the EDP Investment Fund in the short term to provide relief and recovery aid is another option. The regional economic development group formed with the chamber, Denton County, and other economic development partners could potentially be expanded to play a stronger role in aggregating information, providing technical assistance, and offering other resources during economic recovery. 192 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 48 Figure 7. SALES AND USE TAX ELECTIVES AS OF MARCH 2020 Sources: Texas Comptroller of Public Accounts; TIP Strategies. Note: Larger bubble sizes indicate higher elective rates. Circles appearing gray in color are locations with both A and B type electives. 193 49 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS UTILITIES Percentage contribution from utility for economic development activities CITY Incentive rollbacks or earmarked percentage of tax revenue from future developments BUSINESSES Fundraising campaign led by the Denton Chamber to increase private sector engagement DENTON CATALYST FUND DENTON CATALYST FUND Denton’s economic competitiveness over the long term will require more significant investment in economic development. Many strategies outlined in this plan depend on an increased investment in economic development efforts. It is paramount that Denton’s leaders make a strong commitment to increasing resources dedicated to economic development. Figure 8 provides information about the level of resources invested in economic development by some of Denton’s surrounding communities. Many communities in Texas dedicate a portion of their sales tax for economic development. These resources are often funneled through local EDCs that are categorized by the intended use of those funds. Type A EDCs support industrial development projects, such as business infrastructure, manufacturing, research and development, job training, and public transportation. Type B EDCs can support not only all projects eligible for Type A funding but also parks, museums, sports facilities, and affordable housing. Without sales tax election for economic development, Denton’s best course of action is to establish a catalyst fund that can be used not only to provide incentives but also fund specific programs to grow Denton’s economy. Catalyst funds can also be used to support transformational projects or provide seed funding for innovative initiatives. Several successful communities in Texas are turning to similar funds as either an alternative to Type A or Type B EDCs or to supplement the work of their EDCs. Developing a catalyst fund will allow Denton to better meet the strategic objectives and goals of this plan; however, maintaining flexibility in determining how to build resources to meet those goals will be necessary. What is possible and reasonable for other DFW communities might not be for Denton. It is up to Denton’s leaders to determine what level of commitment and investment they should make for economic development. Increasing Denton’s level of investment in economic development will require gradually building resources over time, and the level of resources needed to carry out the City’s strategic goals will likely not be static from year to year. Ultimately, a catalyst fund will provide Denton with more options and mechanisms to better support economic development initiatives and projects aligned with the City’s strategic priorities. A catalyst fund is often comprised of resources from both the public and private sectors. Aggregating resources from several sources not only increases the level of resources available but also builds broad community support for economic development. Typically, contributions to a catalyst fund come from major businesses and institutions as well as public investments from local and/or regional governments. In addition to public and private resources, one of Denton’s greatest untapped assets for economic development is DME. Denton can draw on its utility, public resources, and businesses to create a robust catalyst fund appropriate for modernized economic development efforts (Figure 9). ►UTILITIES. Communities with municipally owned utilities often leverage their utilities to support economic development efforts. Beyond providing competitive rates and supporting incentive packages, some utilities transfer a percentage of utility revenues into a fund dedicated to economic development. This contribution is made on top of revenue transfer into a Figure 8. ECONOMIC DEVELOPMENT CORPORATION REVENUE FOR SELECT- ED DFW CITIES (2019) CITY SALES TAX TYPE TOTAL EDC REVENUE ($ MILLION) Allen Type A $13.5 Type B $11.1 Coppell Type B $13.1 Flower Mound Type B $3.2 Frisco Type A $43.0 Type B $29.6 Grapevine Type B $19.3 Lewisville Type B $9.0 McKinney Type A $16.7 Type B $14.1 Southlake Type A $6.3 Type B $8.0 Source: Texas Comptroller of Public Accounts. Figure 9. RECOMMENDED STRUCTURE FOR A DENTON CATALYST FUND 194 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 50 city’s general fund. In addition to contributing financial resources, a utility can also support economic development through education and workforce development programs that build the talent pipeline for a city’s primary industries. More information about creative uses of municipal utility funds can be found in Appendix C. ►CITY RESOURCES. Cities often contribute resources to an economic development fund that can be used to provide incentives for business attraction or to support economic development programs. There are several ways that cities set aside resources for economic development. The most common way is to fund economic development through a general fund. Alternatively, cities can adopt policies to roll back expired incentives into other economic development efforts. Some communities earmark a portion of anticipated tax revenue from future developments to support economic development. For example, the City could earmark a portion of future tax revenue from the Cole and Hunter Ranch development for an investment in the catalyst fund. This would require consideration by and approval from City Council members. ►BUSINESS INVESTMENT. It is critical that existing businesses continue supporting economic development efforts that will grow Denton’s economy. Successful and effective catalyst funds require significant business engagement in both financial support and participation in economic development efforts, such as business attraction and support for education and workforce development. Existing businesses often invest in a catalyst fund to maximize the effectiveness of their investments in their communities and efforts to improve economic conditions. A business-oriented organization, such as a chamber of commerce, is usually responsible for leading a fundraising campaign and ensuring continued business engagement. These organizations can set up and manage funds more easily than public sector partners. INCENTIVES Cities invest in economic development efforts in many ways. Most cities provide financial and/or operational support for programs and initiatives that support residents and businesses. For example, entrepreneurship and business recruitment programs often receive municipal support. In addition, cities make infrastructure improvements that have a significant effect on growth and development. Marketing, site selection support, and data analysis are also common functions provided by municipal economic development departments. Incentives are also common ways that cities support economic development efforts. They are only one tool used by cities, and there are many types of incentives that can be offered to support economic growth. Figure 10 highlights the portfolio of incentives provided by a select group of DFW communities. Denton already utilizes most incentives used by other cities; therefore, the City should update its incentive policies to align with the goals of this strategic plan in order to continue being competitive in the DFW market. Resources from a catalyst fund should support the development of various incentive funds that will promote the goals and priorities listed in this strategic plan. Currently the City’s primary vehicles for economic development investments are the EDP Investment Fund, the Westpark TIRZ, and the downtown TIRZ. Allocating resources for more targeted incentive funds will allow the City to better support its goals. Figure 11 includes a listing of recommended incentive funds. The City will likely need to adopt a phased approach to building these funds. 195 51 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS Figure 10. ECONOMIC DEVELOPMENT INCENTIVES OFFERED BY SELECTED DFW CITIES ALLENCARROLLTONCOPPELLFARMERS BRANCHFLOWER MOUNDFRISCOGRAPEVINEIRVINGLEWISVILLEMCKINNEYRICHARDSONSOUTHLAKEDENTONJob cash grants Property tax abatements Sales tax rebates/credits ** Fee waivers (impact or permit)* Infrastructure grants Special district financing (TIRZ, TIF, FTZ, PID) Expedited services * Figure 11. PROPOSED INCENTIVE FUNDS FUND PURPOSE GOAL ALIGNMENT DESCRIPTION Business recruitment Multiple goals Fund for recruiting and attracting new businesses to Denton. Business retention and expansion Goal 2A: Connected Denton Fund for the retention and expansion of existing businesses, particularly in the Westpark Industrial Park area. Infrastructure, utilities, and development assistance Goal 2D: Competitive Denton Fund to support major infrastructure and development needs, including broadband connectivity. Job-based grants Multiple goals Grants to businesses based on number of jobs and wages. Innovation and entrepreneurship Goal 2B: Creative Denton Fund to grow and expand Denton’s entrepreneurship ecosystem. Access for historically underutilized businesses (HUBs)Goal 2B: Creative Denton Fund to provide resources to businesses owned by women and people of color in Denton. Green incentives Goal 2C: Sustainable Denton Fund providing incentives to attract environmentally conscious businesses or support greater energy efficiency. Class A office space development Goal 2D: Competitive Denton Fund to incentivize the development of Class A office space, especially in the downtown area. Affordable housing or housing redevelopment Goal 3: Strengthen Community Inclusion Fund to support the City’s affordable housing goals and priorities. *Carrollton only provides sales tax rebates for data centers. Irving provides sales tax rebates for certain retail projects. McKinney provides general permitting and inspection assistance. Denton provides expedited development services for a fee. Acronyms are defined as follows: TIRZ (tax increment reinvestment zone), TIF (tax increment financing), FTZ (foreign trade zone), and PID (public improvement district).Source: TIP Strategies research. 196 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 52 PROGRAMS AND POLICIES The strategies and actions outlined in this plan will require significant changes to the City’s current economic development program; however, it is important to remember that this is a long-term plan intended to be refined and implemented over a 5-year horizon. TIP will provide the City with a detailed implementation matrix with recommendations for how to phase all the strategies and actions in this plan. Figure 12 summarizes potential new programs and policies that will need to be enacted. While this plan has laid the foundation for what the City needs to do, the process to implement the strategies and actions will likely require several additional steps for the Economic Development Department and its partners. A framework for developing new programs and policies for adoption includes the following steps. ►RESEARCH AND ANALYSIS. The City’s Economic Development Department might need to conduct additional research and analysis to provide details for a new program or policy. For example, the development of an edtech alliance (see Strategy 2B.4.2) will likely require additional research about models of similar alliances from which Denton can adopt. Analysis of existing edtech companies in Denton and trends in the edtech sector should also be conducted to inform a new program. ►PARTNER CONVENING. Many of the strategies recommended require the City to work in partnership with other economic and workforce development organizations in Denton and the DFW Metroplex. Where existing partnerships do not yet exist, the City might need to convene potential partners to discuss how the entities can collaborate and for what purpose. For example, the Denton Innovation Group and Stoke could be partners with the City in developing an entrepreneurship knowledge resource network. ►POLICY DEVELOPMENT. Once specific parameters of a new program or fund are identified, the City’s Economic Development Department should draft policies for adoption by the EDPB and the City Council. Not all programs might require formal policy adoption. New incentive funds will likely require new policies to outline fund eligibility and requirements. Figure 12 lists a few policies that might need to be developed or revised in order to meet the strategic goals of this plan. Staff will be able to craft more detailed policies after conducting additional research and gathering information from partners for the specific focus area. ►IMPLEMENTATION. The City can move into an implementation phase once these additional steps have been completed. Again, not all programs or policies will require staff to go through each step. Additional work required to implement new programs and policies will vary based on numerous factors, including the level of resources required, whether there are existing partnerships, and the level of oversight by the EDPB and/or City Council. Implementation is also an iterative process that will require the City to continually refine and improve its strategies and actions. Flexibility is necessary for the City to adapt to changing economic conditions, address challenges in a timely manner, and respond to new opportunities that will emerge. Figure 12. RECOMMENDED NEW PROGRAMS AND POLICIES NEW PROGRAMS NEW OR REVISED POLICIES ►Center of excellence for logistics and supply chain management ►Entrepreneurship knowledge resource network ►Pitch and reverse-pitch competitions ►Startup accelerator ►Edtech alliance ►Broadband connectivity initiative ►Expanded workforce collaborative ►Youth talent initiative ►Eligibility requirements and policies for each incentive fund (Figure 11) ►Adoption of sustainable development goals (SDGs) ►Revision of policies associated with the EDP Investment Fund, Westpark TIRZ, and downtown TIRZ (as needed) MARKETING How a city is perceived—by the public, by visitors, by the media, by corporations, and by site selectors—is crucial to its economic health. This perception can be heavily influenced by marketing programs. The most effective city marketing efforts build on a community’s existing brand and tell authentic stories that highlight local assets. A common theme that emerged from stakeholder input was that Denton needed to do a better job of marketing itself and telling the “Denton story” to a variety of audiences, including prospective residents, business prospects, and visitors. Effective marketing can also foster a greater sense of community and build stronger ties of existing residents to Denton. 197 53 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS While this plan is not meant to serve as a comprehensive marketing assessment, Denton could benefit from refreshed and rebranded marketing. Given the new priorities and focus areas outlined in this strategic plan, the City should conduct a more extensive review of its current marketing efforts, realign marketing to the goals of this plan, and create more sophisticated branding that promotes Denton’s people, businesses, and assets. The City should consider undertaking the following steps to refresh its marketing and branding efforts. ►REGIONAL MARKETING AUDIT. A marketing audit will allow Denton to gain a sense of the image it is projecting. What do people think of when they think of Denton? What is Denton’s current image to different audiences? Marketing audits typically include a review of other organizations’ websites to assess how Denton is conveyed and promoted (if at all) by other economic and workforce development organizations. ►MARKETING PLAN. Based on information gathered through the marketing audit, the City should create a more comprehensive marketing plan that includes new messaging and branding. A marketing plan will help the City determine the kind of image and messaging it wishes to convey to potential residents and businesses. While a stronger marketing plan will be beneficial, TIP has also identified a few strategies in this plan that touch on the need for marketing improvements. ►2B.6. PROMOTING DENTON’S CREATIVE BRAND. Incorporate entrepreneurship into Denton’s marketing. The purpose of this is to both identify specific resources for entrepreneurs and to raise awareness about entrepreneurial success stories in Denton. ►2C.4. GREEN MARKETING. Include Denton’s sustainability goals and successes in the City’s marketing materials. Denton’s leadership in renewable energy and sustainability is a way to distinguish this community from others for both placemaking and economic efforts. ►2D.5. DIGITAL MARKETING. Lean on more digital channels to communicate the “Denton story” to different audiences. The City can do more to leverage digital platforms to raise awareness about Denton as a desirable place for people and businesses. ►DIGITAL MARKETING MATERIALS. Information from a marketing audit and plan will inform what kinds of information should be included in new digital marketing materials. Modern economic development programs rely on digital marketing materials and social media to communicate to external audiences. Information such as the City’s specific economic development functions (e.g., incentives, initiatives, staff contacts) should still be included. Additionally, the City needs to communicate its specific value proposition for different industries and sectors (i.e., what does Denton offer for entrepreneurs and companies interested in sustainability). Leading examples of high-quality economic development marketing include Tampa Bay EDC, Fairfax County Economic Development Authority, One Columbus, and Thrive in Fort Worth. INTERNAL SYSTEMS In addition to a revised governance structure and increased funding, the City can also benefit from modernizing internal systems to track data and manage information about businesses. Like all business enterprises, the ability to quickly access reliable data is an essential feature of successful economic development organizations. Creating and maintaining well-organized information systems helps facilitate the best decision-making. The City’s Economic Development Department has already made great strides in improving its internal systems over the past few years. As Denton navigates economic recovery and returns to a path of growth, the need for strong systems will be even greater. High-functioning economic development organizations all have organized and centralized information systems that are flexible enough to easily share information with partners. The core systems that the City should invest in and continue to improve include the following. ►DATABASE OF DENTON BUSINESSES. A database of existing businesses is central to BRE efforts. Information gathered about business needs, challenges, and successes should be recorded in the database on a regular basis. It is paramount that this database is up to date so the City can generate timely reports, identify potential warning signs, and make decisions about how to support Denton’s businesses and employers. ►CENTRALIZED PROSPECT/LEAD GENERATION SYSTEM. Having a centralized system to track prospects and leads is crucial so that information (and therefore opportunities) is not lost between partner organizations. Standardized information gathered about prospects should be entered into the system and be used to develop a package for potential businesses. ►RELATIONSHIPS/CONTACTS DATABASE. As the Economic Development Department team builds relationships across the City, the DFW Metroplex, and beyond, maintaining an updated contacts database is vital. As noted throughout the plan, networking with VC firms, entrepreneurship organizations, and regional economic development entities is a central function that the City needs to play. A relationships/contacts database is vital to facilitating that relationship building. 198 ►PROCESS AND POLICY DOCUMENTATION. The City needs a more organized way to document different processes and polices associated with economic development. For example, the process and cadence by which the City conducts BRE visits should be clearly documented for the benefit of current and future staff as well as more consistency in business engagement. Updates to policies should also be documented in a clear and accessible manner for both City staff as well as partners, including the EDPB and the chamber. ►PERFORMANCE MEASUREMENT. Tracking a short set of meaningful metrics is important for evaluating progress toward desired outcomes. The City should establish a mechanism for tracking reporting metrics to the EDPB and the City Council to establish transparency and accountability for achieving economic development goals. Metrics can rally partners around a common vision and standard for progress. Suggested metrics are provided in the next section. ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 54199 STRATEGIC PERFORMANCE METRICS 55 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS200 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 56 A critical component of a successful strategic plan is the set of metrics by which the plan’s implementation is tracked. It is imperative that the EDPB and the City Council focus on a set of strategic metrics to track progress on critical economic outcomes. Staff should create a performance dashboard that can be used to communicate performance metrics to City leadership on a regular basis. This is vital to tracking progress as well as maintaining accountability throughout the implementation of this plan. Figure 13 provides a list of performance metrics that are intended to focus the EDPB and the City Council on high-level strategy and outcomes; however, the City’s staff will also need to identify programmatic and operational metrics to track progress toward program-specific goals. TIP strongly recommends that the City disaggregate metrics by race and ethnicity where possible and that disaggregated data is shared in a transparent manner. Figure 13. RECOMMENDED STRATEGIC PERFORMANCE METRICS GOAL ALIGNMENT LEGEND:Economic Recovery Connected Denton Creative Denton Sustainable Denton Competitive Denton Community Inclusion METRIC DESCRIPTION SOURCE GOAL Unemployment rate Unemployment rate, overall and by gender and race/ethnicity.Texas Workforce Commission  Labor force participation Civilian labor force participation rate.US Census Bureau American Community Survey  Employment gap Percentage difference in employment rate between white and people of color (ages 16-64).US Census Bureau American Community Survey  Retail sales growth Rate of growth or decline in retail sales within Denton. Texas Comptroller  Job growth Number of jobs created and retained.Texas Workforce Commission, business surveys, and interviews  Vacancy rate Percentage of Westpark Industrial Park area with vacancies. In-house data collection, business surveys, and interviews  Startup survival Percentage of startups that are active after 1 year and 5 years. In-house data collection, business surveys, and interviews  New business establishments Number of new businesses in Denton and year-to-year growth. In-house data collection, business surveys, and interviews  Access to capital Number and dollar value of venture capital, angel investment, or other capital for startups.In-house data collection, business surveys, and interviews  Energy competitiveness Electricity cost rate (and comparison to peers).DME  Energy efficient businesses Percentage of businesses benefiting from federal energy efficiency tax credits or local rebates.In-house data collection, business surveys, and interviews  Downtown retail occupancy Occupancy rate of downtown retail spaces (or vacancy decline).In-house data collection, business surveys, and interviews  Downtown housing Increase in downtown housing units over time.In-house data collection, business surveys, and interviews  Office space Amount of new office space (square feet) added as well as vacancy rate.Regional commercial real estate brokerage (e.g., Jones Lang LaSalle—JLL) Broadband internet access Percentage of population without access to broadband internet access. US Census Bureau American Community Survey  Talent availability Population 25+ with associate’s degree or higher.US Census Bureau American Community Survey  Population 25+ with bachelor’s degree or higher.US Census Bureau American Community Survey  Cost-burdened households Percentage of households spending more than 30 percent of income on rent or mortgage. US Census Bureau American Community Survey  Portion of jobs at a livable wage Percentage of jobs in Denton that pay a living wage (see MIT living wage calculator). Texas Workforce Commission, Massachusetts Institute for Technology  201 APPENDICES 57 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS202 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 58 AppenDix A. DATA FINDINGS ECONOMIC INDICATORS AND DEMOGRAPHICS ►ESTABLISHED AND GROWING INDUSTRIES. The education and healthcare sectors continue to dominate in Denton, together accounting for nearly one-third of total employment in 2019.1 Manufacturing employment has steadily risen in recent years, focused on automobile and related component manufacturing, and has overtaken retail and accommodation/food services as the third largest industry sector in the City. The transportation and warehousing sector has also become a significant source of jobs in Denton since 2017, employing nearly 4,000 workers in 2019.1 These employment trends support the notion that Denton has been successful in strengthening some of its existing target sectors, such as supply chain logistics and advanced manufacturing. ►BUILDING AN INCLUSIVE AND DIVERSE DENTON. Compared to neighboring communities, Denton is racially and ethnically diverse with BIPOC residents accounting for more than 40 percent of the population in 2018.2 Among these, the Hispanic or Latinx population is the largest, representing more than half the non-white population and nearly one-quarter of all residents. Leaders should pay close attention to the developing needs of Denton’s relatively large, BIPOC population in the wake of the COVID-19 crisis in order to promote inclusive economic recovery across racial, ethnic, and socioeconomic groups. ►TRAINING AND RETAINING TALENT. Though the presence of two major higher education institutions can attract economic and research activity and talent, Denton has not been able to retain a workforce as educated as its neighboring communities. Denton is educating a substantial number of workers with potential to enter the labor market.2 However, less than 40 percent of Denton residents 25 and older have a bachelor’s degree or higher, compared to well over 50 percent in neighboring Plano and Frisco.2 This suggests that Denton’s college graduates are leaving the City to work elsewhere, possibly to seek higher wages. Denton’s relatively low household median income is partially attributable to the presence of two large universities, where students tend to have lower incomes, but Denton also lacks a base of moderate-to-high-income households compared to nearby communities—there are about 4,000 households in Denton (<10 percent) with an income over $150,000, compared to about 14,000 in McKinney (about 25 percent) and over 22,000 in Frisco (>40 percent).2 1 US Bureau of Labor Statistics; Emsi 2019.4—QCEW (quarterly census of employment and wages) Employees, Non-QCEW Employees, and Self-Employed. The City of Denton is based on the aggregation of 10 ZIP Codes (76201, 76202, 76203, 76204, 76205, 76206, 76207, 76208, 76209, and 76210).2 American Community Survey, 2018 5-year sample. HOUSING ►MORE MULTIFAMILY HOUSING. Denton has a larger share of multifamily housing and renters compared to its neighbors, in part because of the student population’s need for short-term housing options. Almost half (47.8 percent) of all housing units in Denton were occupied by renters in 2018, compared to about one-third in Plano and McKinney, respectively, and less than one-quarter in Frisco, Corinth, and Argyle.2 Moreover, multifamily housing accounted for nearly 40 percent of Denton’s housing stock as of 2018, compared to one-third of Plano’s and less than one-quarter of McKinney’s, Frisco’s, Corinth’s, and Argyle’s.2 ►STRADDLING AFFORDABILITY. The median home value and rent in Denton were much lower than the surrounding communities in 2018 (more than half of Denton’s owner-occupied housing was valued under $200,000).2 Relatively lower housing costs than neighboring communities make Denton more attractive for those seeking affordable housing in the northern DFW Metroplex. However, more than one-quarter of Denton homeowner households are cost-burdened (spend more than 30 percent of income on housing)—a higher rate than the surrounding communities with higher housing costs.2 Because Denton household incomes tend to be lower than those in neighboring communities, many households struggle with housing costs even at relatively reduced rates. For instance, suppose a Denton household earning the median income ($56,500) who currently rents at the median monthly rate ($1,046) wants to buy a median-priced home ($196,900).2 Depending on the mortgage terms, monthly payments range from $800 to $1,200.3 While those able to get more favorable loan terms might be able to make payments without financial strain, other households with lower down payments and higher interest rates would likely find the mortgage payment unaffordable. ►HIGHER-VALUE HOUSING. In addition to its affordable housing challenge, Denton also has fewer high-value homes that are often needed to attract professional service businesses. Denton lacks a substantial stock of high-value housing (less than 18 percent of owner-occupied homes were valued over $300,000 in 2018),2 which stakeholders cited as a challenge in recruiting high-paying jobs and professionals to the City. In comparison, over 47 percent of Plano’s and over 67 percent of Frisco’s owner-occupied homes are valued above $300,000. 3 Estimated mortgage payments and associated affordability calculated using a modified version of Texas A&M University Real Estate Center’s Housing Affordability Index. 203 59 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS COMMUTING PATTERNS ►EXCHANGING LABOR IN DFW. In 2017, more than 43,000 Denton residents had jobs outside the City.4 More than half those jobs (22,000) were in nine DFW cities with Dallas and Fort Worth together accounting for over 10,000 jobs. Among those 22,000 jobs, about half earned less than $40,000 annually.4 In contrast, about 39,000 Denton workers who lived outside the City in 2017 had residences spread more evenly across DFW communities (i.e., 30 DFW cities account for about half these workers), and more than two-thirds of these workers (27,000) earned less than $40,000 annually.4 This suggests that the jobs in Denton that attract workers from outside the region tend to be lower-earning positions compared to the jobs many Denton residents seek outside the City. In other words, the commuting story in Denton also reflects the notion that the City might be losing skilled labor to neighboring regions with higher-wage job opportunities. ECONOMIC DEVELOPMENT RESOURCES ►GROWING DIVERSE TAX REVENUE STREAMS. Denton’s tax revenue sources have followed the same general trend between 2009 and 2018; property tax accounts for more than one-third of revenues (averaging 38 percent over 10 years), sales and use tax generate an average of 20 percent, franchise fees at 15 percent, and other sources make up the remaining 25 percent.5 Additionally, the City saw substantial revenue growth in 2017 (11 percent increase) and 2018 (19 percent increase) driven mostly by increased property tax revenues and other sources.5 Denton appears to have more diverse tax revenue sources than neighboring communities that depend more heavily on property and sales and use taxes. ►AN OPPORTUNITY FOR MORE ROBUST ENTREPRENEURSHIP. The DFW Metroplex has received more than $6 billion in capital funding for startups since 2009, and about two-thirds of this capital was invested in Dallas, Plano, and Irving startups.6 Though investors tend to be based in the capital hubs outside the state (nearly half of investment funds are sourced from California, Massachusetts, and New York), Texas accounts for about one-fifth of the funding, with most dollars coming from Dallas investors (>$500 4 LODES (Longitudinal Employer-Household Dynamics’ Origin-Destination Employer Statistics).5 TIP Strategies analysis of the most recent CAFRs (comprehensive annual financial reports) for Denton and selected DFW communities. Revenue categories are generally consistent across most Texas municipal CAFRs: property taxes, sales and use taxes, and franchise fees. Other revenues is a catchall term for all other taxes and service fees for government and business-type activities. Denton's CAFR specifically notes on page 119 that the electric fund is not shown separately due to confidentiality of information necessary for competitive rates.6 Investment data from Crunchbase—a crowdsourced data set that is not comprehensive. Analysis of VC funding should be interpreted with this limitation in mind. million).6 Denton’s startups have not received much of this funding ($3.2 million).6 It might benefit the City’s developing entrepreneurial ecosystem to network with VC firms and startups in the DFW Metroplex. 204 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 60 AppenDix B. SWOT ANALYSIS A thorough SWOT analysis of Denton was developed based on direct input from stakeholders through interviews and roundtable discussions. These findings offer insights into areas that can be leveraged or strengthened to support economic growth as well as potential challenges and risks that might impede growth. Areas of the SWOT are defined as follows. ►STRENGTHS: Advantages that can be leveraged and strengthened to bolster economic vitality. ►WEAKNESSES: Challenges and risks to economic development that might stifle growth. ►OPPORTUNITIES: Positive trends and assets that have potential to increase prosperity. ►THREATS: External factors and risks that might negatively affect the local/ regional economy. Though the City has less influence over national and global trends, it can focus on how Denton should respond to those trends and prioritize local/regional opportunities (see Figure 14). The graphics on the subsequent pages summarize the results of the analysis. NATIONAL STATE LOCAL & REGIONAL GLOBAL DE G R E E O F C O N T R O L followtrends shape trends STRENGTHS WEAKNESSES OPPORTUNITIES THREATS Figure 14. SWOT FRAMEWORK 205 61 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS Downtown Convention Center Sustainability Hiking & biking trails Water rights University of North Texas Texas Woman’s University Power generation Unique culture Growing DFW metro Music & arts Land availability Interstates Airport NCTC WorkforceAffordable cost of living Growing tech scene Manufacturing Competitive tax climate Lower cost of living compared to coasts Inmigration growth LOCAL/REGIONALSTATENATIONALGLOBAL Venture capital Innovation capacity Diverse economic base STRENGTHS Denton’s numerous strengths should be leveraged to attract business investment and to develop talent pipelines for the City’s major industries. Certainly, Denton’s higher education assets make it stand out among other DFW communities. A robust arts and culture scene has also attracted students, tourists, and new residents to Denton over the years. Much of this development and growth has centered around Denton’s downtown square. What is less known about Denton is its strong base of transportation and logistics-oriented companies that benefit from the City’s proximity to the intersection of I-35E and I-35W. Denton’s location in the DFW Metroplex is one of its biggest strengths, especially as the DFW Metroplex continues to grow. Furthermore, the community’s commitment to sustainability puts Denton in an elite group of US cities that will rely on 100 percent renewable resources. A strategic focus on these strengths will continue to make Denton an attractive place to live and work. 206 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 62 LOCAL/REGIONAL STATE NATIONAL GLOBAL WEAKNESSES Stakeholder input highlighted housing as one of Denton’s top challenges. Housing—both affordable housing and higher-value homes—is one of the top barriers to Denton’s growth. Compared to its DFW peers, Denton has a higher share of low-income and moderate-income residents who cannot afford to live in Denton. At the same time, Denton’s housing value tends to be lower than that of other communities, making it difficult to attract professional service businesses, medical professionals, and more. Beyond housing, Denton’s lack of resources available for economic development makes it difficult for the City to compete for business investment and talent. The lack of an EDC or fund, along with reduced tax revenue, will require Denton to find creative ways to invest more significantly in its business attraction, retention, and expansion efforts. Lack of affordable housing Equity & inclusion Infrastructure Limited jobs Lack of high-end housing Limited (ED) economic development resources Leadership transitions Town vs. gown No tax base for community colleges No Class Aoffice stock Lack of uniting vision Many non-taxing entities High share of vulnerable populations Corridors into city Retention of graduates Construction costs Reliance on volatile industries (oil & gas) Workforce for skilled trades Talent shortages Aging population Growing income inequality US national debt 207 63 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS LOCAL/REGIONALSTATENATIONALGLOBAL OPPORTUNITIES Denton’s economic future depends on the community’s ability to capitalize on investments already made and opportunities that will come with growth. For example, the City should continue to prioritize downtown development and placemaking to attract businesses and talent. The City’s support of Stoke has led to increased entrepreneurship and a cluster of edtech startups that should be fostered. The biggest opportunity will be the Hunter and Cole Ranch development, which is set to add thousands of new houses, create a new employment center, and improve retail options along I-35W. Cole and Hunter Ranch will also create more possibilities for both industrial and commercial development on the west side of Denton. If the City does nothing else, it should dedicate staff time and resources to ensuring that the original vision for the development is implemented successfully and in a timely manner. Denton Catalyst Fund Leverage higher education assets Golden Triangle Mall redevelopment Telling the “Denton Story” better Utilizing DME funds for economic development Airport expansion Hunter & Cole Ranch Edtech Cluster Logistics hub Downtown development & placemaking Expand tech, R&D, innovation Talent retention Athletic complex Younger workforce Renewable energy Migration from urban areas on the coasts Growing tech sector Economic diversification Opportunity Zones Rise of remote workers Historic preservation tax credits Federal stimulus funds New Market Tax Credits Global sustainable development goals (SDGs) Foreign Direct Investments 208 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 64 LOCAL/REGIONAL STATE NATIONAL GLOBAL THREATS It is necessary to understand threats not in order to control them, but instead to develop a proactive response to factors that are often outside the influence of local and regional organizations. Before COVID-19 became a pandemic, it was a looming threat that had the potential to disrupt every aspect of life. There are other looming threats that can impact Denton soon or over a long horizon. Climate change is a threat to which the City is already developing a response by investing in renewable energy sources. On a smaller scale, threats to Denton’s vitality include outmigration of talent because of a lack of professional opportunities, attractive housing, or amenities. Coupled with aggressive growth in other parts of the DFW Metroplex, the need to develop and retain talent in Denton has never been greater. Many of the recommendations offered throughout this plan are meant to support Denton’s leaders in proactively responding to these threats. Aggressive growth in other DFW communities Higher wages in other DFW cities Outmigration of talent Industries vulnerable to disruption Retention of existing employers & industries Boom/bust cycle of oil & gas industry Inequitable distribution of jobs & opportunity Aggressive business recruitment across US South Aging workforce Economic recession Workforce for skilled trades US political uncertainty Decreased defense spending Disruption in healthcare industry Immigration restrictions (workforce) Trade policy uncertainty COVID-19 Competition with China Fragile global supply chains Cybersecurity threats Climate change 209 65 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS AppenDix C. MUNICIPAL UTILITY COMPARISON Utility Company AE (AUSTIN ENERGY) 2018 CPS (CPS ENERGY) 2019 EPB (2019)CU (CITY UTILITIES) 2019 City Austin, TX San Antonio, TX Chattanooga, TN Springfield, MO City Population 962,469 1,547,253 182,799 167,882 Economic Development Budget $47,261,386 $15,354,284 $8,268,037 $481,989 ED Budget Per Person $49.10 $9.92 $45.23 $2.87 Electricity Customers ~485,000 ~ 820,000 ~170,000 ~111,000 Total Utility Revenue $945,000,000 $2,744,159,000 (includes gas)$741,651,000 $474,126,000 Revenue Transferred to General Fund $109,000,000 (12% of total revenue) $361,351,000 (13% of total revenue) $7,618,000 (1% of total revenue) $14,559,000 (3% of total revenue) Workforce and Education Initiatives ►Energy and education program with eight school districts in its service territory to increase interest in green energy. ►Summer internship program for college-aged students. ►Three paid internship programs for high school juniors and a Corporate College Internship Program. ►New Energy Economy program generated $23M for local schools and created 600 jobs. ►STEP-UP paid summer internship program for high school students. ►EPB Institute of Technology and Networking to prepare students for careers in coding and IT. ►Workforce development program with local high school covering team building, goal setting, conflict resolution, and career exploration. Sustainability Initiatives ►Climate Protection Plan seeks to achieve 100% carbon-free electricity generation by 2035. ►65% renewable energy by 2027. ►AE offers commercial and residential rebates when using smart thermostats and other technologies. ►Solar powers more than 55K homes in the region. ►Cut nitrogen oxide emissions by 75% since 1997. ►Invested in a smart grid for the city and, in 2017, installed the one millionth advanced meter or gas meter-enhancing device, completing 90% of the project. ►EPB-owned fiber optic communications network provides a smart grid for the entire service area. ►$3M Chattanooga Clean Energy for Low Income Communities Accelerator. ►Green and Healthy Homes pilot to reduce childhood asthma through better air quality. ►Since 2006, CU generates electricity from methane gas produced by the city’s landfill. ►CU Solar Farm (powers 902 homes) leased to CU through Purchased Power Agreement with purchase option after 25 years. ►Commercial and residential rebates for adoption of smart technology. 210 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 66 AppenDix D. ECOSYSTEM DIRECTORY CONNECTIVITY Industrial Supply Association www.isapartners.org Institute for Supply Management—Dallas www.ismdallas.org/index.cfm Intermodal Association of North America www.intermodal.org Logistics & Transportation Association of North America www.ltna.org National Industrial Transportation League www.nitl.org Southern Association of Wholesale Distributors the-southern.org Texas Airports Council texasairportscouncil.org Texas Association of Manufacturers manufacturetexas.org Texas Commercial Airports Association www.texas-airports.com Texas Trucking Association www.texastrucking.com Texas Warehouse Association www.texaswarehouseassociation.org Transportation Club of Dallas/Fort Worth www.tcdfw.org TRADE ASSOCIATIONS Design-2-Part Show February 26–27, 2020 | Grapevine, TX www.d2p.com International Conference on Information, Logistics and Supply Chain April 22–24, 2020 | Austin, TX 10times.com/ils-austin Aviation Conference to Focus on Innovation June 11, 2020 | Virtual www.texas-airports.com/p/getinvolved Accelerate! Conference & Expo September 23–25, 2020 | Dallas, TX www.womenintrucking.org/accelerate-conference Heavy Duty Aftermarket Week January 25–28, 2021 | Grapevine, TX www.hdma.org/content/heavy-duty-aftermarket-week-hdaw HOUSTEX February 23–25, 2021 | Houston, TX houstexonline.com RELEVANT CONFERENCES / EVENTS American Shipper americanshipper.com American Trucker www.trucker.com/american-trucker-magazine International Journal of Adv. Manufacturing Technology www.springer.com/engineering/industrial+management/journal/170 Int’l. Journal of Shipping and Transport Logistics www.inderscienceonline.com/loi/ijstl Journal of Commerce www.joc.com Logistics Management www.logisticsmgmt.com Manufacturing Technology Insights www.manufacturingtechnologyinsights.com Supply Chain www.supplychaindigital.com/magazine TRADE PUBLICATIONS Note: Events were correct at the time this document was created. Due to the COVID-19 pandemic, details are subject to change. 211 67 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS CREATIVITY Denton County India Cultural Association www.dcica.org Denton Film Society www.facebook.com/DentonFilmSociety Denton Main Street Association www.dentonmainstreet.org Keep Denton Beautiful kdb.org Master Networks, Denton Chapter www.meetup.com/Master-Networks-Denton-Chapter North Texas State Fair Association www.ntfair.com Stoke stokedenton.com TechMill techmill.co Technology Resource Center of America www.trca.com UNT Murphy Center for Entrepreneurship and Innovation cob.unt.edu/murphycenter TRADE ASSOCIATIONS FlintConf 2020 April 29–May 1, 2020 | Virtual stokedenton.com/events/2020/4/10/flintconf-2020 Business Success Summit May 4–8, 2020 | Virtual www.mnbusinesssuccesssummit.com 1 Million Cups Frisco June 2, 2020 | Virtual www.meetup.com/1-Million-Cups-Frisco/events/skvdrrybcjbfb CONNECT 2020 August 6–8, 2020 | Allen, TX www.attend-connect.com/connect-2020 Techstars Startup Week Waco October 19–22, 2020 | Waco, TX waco.startupweek.co Denton Arts & Jazz Festival April 23–25, 2021 | Denton, TX dentonjazzfest.com DFW Open Data Day TBD 2021 | Frisco, TX www.dfwopendataday.com RELEVANT CONFERENCES / EVENTS Arts and Culture Texas artsandculturetx.com Journal of Innovation and Entrepreneurship innovation-entrepreneurship.springeropen.com Stoke Newsletter stokedenton.com/join-newsletter Techstars Startup Digest www.startupdigest.com Texas Highways texashighways.com Texas Monthly www.texasmonthly.com TRADE PUBLICATIONS Note: Events were correct at the time this document was created. Due to the COVID-19 pandemic, details are subject to change. 212 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 68 SUSTAINABILITY Conserve North Texas conservenorthtexas.org Environment Texas environmenttexas.org North Texas Association of Environmental Professionals www.ntaep.org North Texas Green Council northtexasgreencouncil.org North Texas Renewable Energy Group www.ntreg.org Society of Texas Environmental Professionals txstep.org Texas Conservation Alliance www.tcatexas.org Texas Municipal Utilities Association tmua.org Texas Public Power Association www.tppa.com Texas Renewable Energy Industries Alliance www.treia.org Texas Solar Energy Society txses.orgtxses.org TRADE ASSOCIATIONS NTAEP Fourth Annual Texas Commission on Environmental Quality (TCEQ) Trade Fair May 12, 2020 | Austin, TX www.ntaep.org/happyhour GRIDNEXT 2020 June 3, 2020 | Houston, TX https://www.treia.org/gridnext-2020-virtual Texas STEP Annual Joint DFW Meeting July 21, 2020 | Grapevine, TX txstep.org/meetings/annual-dfw Regional Centre of Expertise North Texas Symposium September 16, 2020 | Arlington, TX sustainability.uta.edu/rce/events/rce-symposium TMUA Utility Leadership and Management Conference April 28–30, 2021 | Round Rock, TX tmua.org/future-conference-dates RELEVANT CONFERENCES / EVENTS Green Source DFW www.greensourcedfw.org Journal of Renewable and Sustainable Energy aip.scitation.org/journal/rse POWER Magazine www.powermag.com Renewable Energy www.journals.elsevier.com/renewable-energy Utilities Policy www.journals.elsevier.com/utilities-policy Texas Journal of Oil, Gas, and Energy Law tjogel.org The Solar Reflector txses.org/the-solar-reflector TRADE PUBLICATIONS Note: Events were correct at the time this document was created. Due to the COVID-19 pandemic, details are subject to change. 213 69 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS COMPETITIVENESS Association of Texas College & University Facilities Professionals www.t-cuf.org BOMA Greater Dallas www.bomadallas.org Career & Technical Association of Texas www.ctat.org NAIOP North Texas www.northtexasnaiop.com National Association of Colleges and Employers www.naceweb.org North Texas Commercial Association of Realtors and Real Estate Professionals www.ntcar.org Texas Association of Healthcare Facilities Management www.tahfm.org Texas Higher Education Human Resources Association www.txhehra.org Texas Hospital Association www.tha.org Texas Medical Association www.texmed.org TRADE ASSOCIATIONS TMA Winter Conference January 29–30, 2021 | Austin, TX www.texmed.org/Winter 2020 NACE Conference + Expo June 2–5, 2020 | Minneapolis, MN www.naceweb.org/conferenceexpo/default.htm 2020 Commercial Real Estate Expo September 9, 2020 | Dallas, TX www.ntcar.org/ntcar-events/2020-expo NTCAR Reunion and Hall of Fame September 22, 2020 | Dallas, TX www.ntcarhalloffame.org THEHRA Summer 2020 October 18–20, 2020 | Galveston, TX www.txhehra.org/conferences.html 2021 TAHFM Annual Conference March 28–31, 2021 | Fort Worth, TX www.tahfm.org/general/custom.asp?page=2020conference RELEVANT CONFERENCES / EVENTS BOMA Magazine www.boma.org/BOMA/Research-Resources Development Magazine www.naiop.org/en/Research-and-Publications/Magazine Texas Hospitals www.tha.org/TexasHospitalsMagazine The American Journal of Medicine www.amjmed.com The Journal of Continuing Higher Education www.tandfonline.com/loi/ujch20 The Journal of Higher Education www.tandfonline.com/loi/uhej20 The Journal of Real Estate Research https://aresjournals.org/loi/rees TRADE PUBLICATIONS Note: Events were correct at the time this document was created. Due to the COVID-19 pandemic, details are subject to change. 214 Economic Development Strategic Plan Implementation Matrix POTENTIAL PARTNERS (lead partner highlighted in bold) 12-18 months 2-3 years 3-5 years Ongoing Current Foundational Aggressive POTENTIAL FUNDING SOURCES 1.1.1. Pull together a small group of top-level leadership from the City, the EDPB, and the Denton Chamber of Commerce to form the “economic recovery nerve center.” City, Chamber, EDPB <City - Economic Development IN-PROGRESS 1.1.2. Shift the focus of the existing economic development structure from relief and policy enforcement to cross-functional elements of economic recovery, such as business retention, workforce development, and community services. City, Chamber, EDPB <City - Economic Development IN-PROGRESS 1.1.3. Develop an internal data dashboard to guide economic recovery efforts using a limited number of indicators that can be tracked over time and shared with partner organizations. City, Chamber, EDPB <City - Economic Development IN-PROGRESS 1.2.1. Continue to coordinate with the Denton Chamber of Commerce and Denton Main Street Association to assess short-term needs and long-term projections for Denton’s businesses. City, Chamber, Main Street Association <City - Economic Development IN-PROGRESS 1.2.2. Stay connected to DFW organizations coordinating economic recovery and community service efforts across the DFW Metroplex. City, Chamber, Denton County <City - Economic Development IN-PROGRESS 1.3.1. Continue to develop and maintain a database of Denton-based businesses. City, Chamber <City - Economic Development Excel or free option $7,500 per year $10,000 for CRM system City General Fund IN-PROGRESS 1.3.2. Shift the City’s business visitation efforts to a virtual setting and establish a cadence of meetings with businesses as soon as appropriate. City <City - Economic Development IN-PROGRESS 1.3.3. Expand existing goals for business touchpoints on a monthly, quarterly, and annual basis. City <City - Economic Development IN-PROGRESS 1.3.4. Reevaluate and adjust standard questions and protocols utilized in the City’s BRE program to be more responsive to the COVID-19 crisis and recovery.City <City - Economic Development IN-PROGRESS 1.3.5. Prioritize business retention efforts based on strategic growth areas (see Goal 2), employer size, employer growth (number of employees, revenue growth, etc.), and lease terminations. City <City - Economic Development IN-PROGRESS 1.3.6. Structure BRE efforts to serve several purposes: educate businesses about resources offered by the City, identify challenges companies are facing, and identify short-term and long-term issues.City <City - Economic Development IN-PROGRESS 1.3.7. Act as a concierge to priority businesses to help navigate processes within other municipal departments (e.g., partner with a project facilitator from the City’s Development Services department).City, Development Services <City - Economic Development INCOMPLETE 1.4.1. Prioritize engagement with the DCWSLT (Denton County Workforce Success Leadership Team) to connect City efforts to the broader regional context. City, DCWSLT, Workforce Solutions <City - Economic Development IN-PROGRESS 1.4.2. Catalog which industries have been severely impacted by COVID-19 and determine if targeted resources can be deployed to support workers in those industries. City, Denton County, Chamber <City - Economic Development INCOMPLETE 1.4.3. Use insights and data from business retention efforts and surveys of the business community as a baseline for employer demand. Couple this information with other data about unemployment rates and the needs of jobseekers. City, Chamber <City - Economic Development IN-PROGRESS 1.4.4. Develop an inventory of training resources across providers, such as NCTC (North Central Texas College), Workforce Solutions for North Central Texas, and United Way. Include capacity levels and flexibility to streamline, redesign, or create new programs to meet employer needs. City, DCWSLT, Workforce Solutions <City - Economic Development INCOMPLETE 1.4.5. Engage in demand planning to understand which businesses expect to hire and when.City <City - Economic Development INCOMPLETE 1.4.6. Identify barriers to accessing training and other workforce resources. Continue to coordinate with partner organizations to help remove these barriers for those seeking jobs. City, DCWSLT, Workforce Solutions <City - Economic Development IN-PROGRESS 1.5.1. Extend existing collaboration efforts with the City’s Community Development Department to coordinate resources and efforts to support residents through economic recovery.City, Community Development <City - Economic Development IN-PROGRESS None None None None None None None None None 1.1. ECONOMIC RECOVERY NERVE CENTER. GOALS & STRATEGIES TIMELINE LEVEL OF COMPLETION ORGANIZATION RESPONSIBLE GOAL 1. ACCELERATE RECOVERY ESTIMATED ANNUAL COSTS 1.2. TAKING THE PULSE OF THE BUSINESS COMMUNITY. 1.3. VIRTUAL BUSINESS RETENTION. None None None None None 1.4. WORKFORCE COLLABORATIVE. 1.5. INCLUSIVE ECONOMIC RECOVERY. None None None None 215 Economic Development Strategic Plan Implementation Matrix 1.5.2. Coordinate with the Denton Black Chamber of Commerce and other multicultural organizations to provide targeted information for businesses owned by women and people of color. City, Chamber, Denton Black Chamber <Chamber IN-PROGRESS 1.5.3. Continue to collaborate with local and regional nonprofits in gathering information about what challenges residents are facing due to the economic impact of the COVID-19 pandemic. City <City - Community Development IN-PROGRESS 1.5.4. Disaggregate social and economic indicators by race and income levels to show how vulnerable populations are faring in comparison to other segments of the population. City <City - Economic Development INCOMPLETE 1.5.5. Highlight businesses owned by women and people of color in marketing materials and through digital marketing channels to increase awareness and promote their success.City, Chamber <Chamber INCOMPLETE 1.6.1. Continue the City’s existing support for the United Way of Denton County Information & Referral services to assist small businesses. City, United Way, Denton County <City - Community Development Already funded IN-PROGRESS 1.6.2. Strengthen the Denton County chamber and economic development workgroup and continue to build this network throughout the economic stabilization and recovery periods. City, Denton County, Chamber <City - Economic Development IN-PROGRESS 1.6.3. Leverage the Denton Innovation Group to develop targeted supports and resources to assist entrepreneurs through economic recovery. City, Denton Innovation Group, Stoke <City - Economic Development IN-PROGRESS 1.6.4. Connect with regional DFW organizations, such as the Dallas Regional Chamber, to expand the information-sharing network beyond Denton County. City, Chamber, Dallas Regional Chamber <Chamber IN-PROGRESS 2A.1.1. Refine and enlarge the City’s database of existing employers. The database should be expanded to include companies that serve external markets or are suppliers to existing employers.City, Chamber <City - Economic Development IN-PROGRESS 2A.1.2. Ramp up the business visitation program to track trends among Denton employers and identify business needs. City <City - Economic Development $150,000/year dedicated to Investment Fund $250,000 to $500,000 Up to $1,000,000 New job-based incentive program IN-PROGRESS 2A.1.3. Communicate success stories that result from BRE visits. These might not translate directly to new job creation or increased capital investment, but they can still be valuable to businesses. City <City - Economic Development INCOMPLETE 2A.2.1. Cultivate relationships with real estate brokers and site selectors. City, Chamber <Chamber Use existing fund and abatements $2,000,000 $3,000,000 General incentive fund IN-PROGRESS 2A.2.2. Create a centralized lead tracking system for Denton.City, Chamber <City - Economic Development IN-PROGRESS 2A.2.3. Engage with regional economic development organizations, industry groups, and professional networks in the DFW Metroplex. City, Chamber, Denton County <Chamber IN-PROGRESS 2A.3.1. Prioritize infrastructure investments, particularly with respect to roads and utilities. City, Development Services <City - Development Services Use existing funds $250,000 to $500,000 $1,000,000 for infrastructure incentive funding Utility development line funds; future TIRZ funds; IN-PROGRESS 2A.3.2. Continue to track vacant properties and parcels, partnering with brokers and developers on new developments or redevelopments to increase the usefulness and value of these properties. City, Chamber <Chamber IN-PROGRESS 2A.3.3. Partner with UNT on relocating the sports recreation fields located at Precision Drive and Airport Road to an area outside the industrial park to improve safety and make better use of the land.City, UNT <City - Economic Development INCOMPLETE 2A.3.4. Provide public infrastructure incentives (such as credits or reimbursements) for projects aligned to Denton’s growth areas. City, Development Services <City - Economic Development None $50,000 per year $100,000 per year Can be provided as reimbursements or credits as part of incentives on high priority projects IN-PROGRESS 2A.4.1. Leverage over $2.8 billion in planned projects from TxDOT in Denton to increase connectivity between Denton and surrounding DFW communities.City, Development Services <City - Economic Development IN-PROGRESS 2A.4.2. Explore the feasibility of a partnership between the businesses located in the Westpark Industrial Park, NCTC, UNT Center for Logistics & Supply Chain Management, and the City.City, Chamber, EDPB <City - Economic Development INCOMPLETE Same as 1.3.1 Same as 1.3.1 None 2A.4. CENTER OF EXCELLENCE. GOAL 2. FOSTER GROWTH 2A. CONNECTED DENTON 2A.1. BRE (BUSINESS RETENTION AND EXPANSION). 2A.2. ATTRACT NEW INVESTMENT. 2A.3. WESTPARK INDUSTRIAL PARK. None None $50,000 None None None None None None None None None None 1.6. REGIONAL COLLABORATION. 216 Economic Development Strategic Plan Implementation Matrix 2A.4.3. Include workforce partners to create career pathways for Denton students and residents into in- demand occupations for Denton’s transportation and logistics businesses. City <City - Economic Development INCOMPLETE 2A.4.4. Promote opportunities in the transportation, logistics, and supply chain fields to students in Denton and in economic development marketing materials. City, Chamber, EDPB <City - Economic Development INCOMPLETE 2B.1.1. Support the expansion of networking channels and opportunities for relationship building among the region’s entrepreneurs, startups, and students. City, Chamber, EDPB <City - Economic Development No additional staff No additional staff $150,000 for qualified staff City General Fund IN-PROGRESS 2B.1.2. Establish connections with DFW entrepreneurship organizations such as Dallas 1 Million Cups, 1 Million Cups Frisco, Dallas Innovates, Capital Factory, and the Dallas Entrepreneur Center. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.1.3. Assemble a knowledge resource network to support entrepreneurs and companies with access to financial, legal, policy, and research information needed for their businesses to grow. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.1.4. Partner with local and regional partners to design reverse-pitch competitions to engage major corporations and organizations in the DFW Metroplex with needs for innovation. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development None City General Fund or private funds INCOMPLETE 2B.1.5. Ensure that targeted resources are available for businesses owned by women and people of color, who have historically faced barriers to accessing traditional economic development tools.City, Chamber <City - Economic Development INCOMPLETE 2B.2.1. Cultivate relationships with the DFW VC (venture capital) community so that local companies are not forced to relocate after they grow beyond their initial rounds of capital. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.2.2. Partner with the Denton Angels to expand access to capital for Denton startups. Work with other angel networks in the DFW Metroplex, and across Texas, to improve deal flow for Denton companies and investors. City, Denton Angels, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.2.3. Network with regional entrepreneurship programs so that they become familiar with Denton and the resources available for businesses looking to grow and expand within the DFW Metroplex. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.2.4. Revise the funding requirements for the EDP Investment Fund to be more inclusive of innovative startups that might not meet current thresholds for employment and capital investment.City, EDPB <City - Economic Development $150,000/year in Investment Fund $250,000 $500,000 General incentive fund, programmed for entrepreneurship INCOMPLETE 2B.3.1. Partner with the Denton Innovation Group to define a vision for entrepreneurship in Denton, establish goals, measure progress, and connect with DFW organizations.City, Denton Innovation Group <City - Economic Development Work done in- house Hire limited consultant ($25,000) $100,000 for entrepreneurship plan development City funds and private funds IN-PROGRESS 2B.3.2. Launch an accelerator to support the growth of existing companies. City, Denton Innovation Group, Stoke <City - Economic Development None None $250,000 City funds and private funds INCOMPLETE 2B.3.3. Host a Citywide pitch competition to identify and develop innovative entrepreneurs in Denton. This not only builds Denton’s creative brand but also provides the City with a way of identifying top talent in the community. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development City General Fund INCOMPLETE 2B.4.1. Capitalize on Denton’s status as an emerging hub for edtech companies to drive additional growth and investment in this sector and to attract more creative professionals to Denton. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.4.2. Create an edtech alliance with entrepreneurial companies, Denton ISD, UNT Murphy Center for Entrepreneurship and Innovation, and the Center for Women Entrepreneurs at TWU to identify opportunities to strengthen and diversify edtech in Denton. City, UNT, TWU, Denton Innovation Group, Stoke <City - Economic Development City funds and private funds INCOMPLETE 2B.4.3. Support the expansion of Denton ISD’s annual TIACON (Technology in Action Conference) about education technology and curriculum. City, Denton ISD, Denton Innovation Group, Stoke <City - Economic Development City General Fund INCOMPLETE 2B.5.1. Engage with DFW entrepreneurship organizations, talent networks, and industry associations to identify new companies. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.5.2. Target successful startups in business incubators/accelerators that are on the cusp of outgrowing their existing spaces and are positioned for expansion/relocation to Denton.City <City - Economic Development General incentive fund, programmed for entrepreneurship; Job- based incentive program INCOMPLETE 2B.5.3. Track VC firms in DFW, Silicon Valley, Austin, and other markets that have recently funded high- growth, innovative businesses. City <City - Economic Development INCOMPLETE $10,000 for event or sponsorship costs None $5,000 for administrative, marketing, or operating costs $10,000 for sponsorships or support funding None Included in 2B.2.4. 2B.4. EDTECH CLUSTER. 2B.5. RECRUIT GROWING STARTUPS. None 2B.1. CHAMPION AND CONVENE. 2B.2. ACCESS TO CAPITAL. 2B.3. ECOSYSTEM BUILDERS. None None None None None None None $10,000 for sponsorships 2B. CREATIVE DENTON None 217 Economic Development Strategic Plan Implementation Matrix 2B.5.4. Use resources like the Inc. 5000 (a list of the fastest-growing private firms in the US based on year- over-year revenue growth) to identify firms that would be a good fit for Denton.City <City - Economic Development INCOMPLETE 2B.6.1. Aggressively utilize the City’s social media channels to publicize successes.City <City - Economic Development INCOMPLETE 2B.6.2. Pitch stories about successful Denton companies to media outlets, such as the Denton Record- Chronicle, Dallas Morning News, Fort Worth Star-Telegram, Dallas Innovates, and D Magazine.City, Chamber <Chamber INCOMPLETE 2B.6.3. Develop a Citywide entrepreneurial recognition program that harnesses the strengths of local efforts that already exist in Denton. City, Chamber, Denton Innovation Group, Stoke <Chamber INCOMPLETE 2C.1.1. Prioritize the energy efficiency and conservation goal from the Simply Sustainable plan by focusing on building standards and incentives for greener residential and business development. City, Development Services, DME <City - Economic Development IN-PROGRESS 2C.1.2. Work with DME and the City’s Development Services department to better understand green building standards, including what is currently required of developers.City, Development Services <City - Economic Development IN-PROGRESS 2C.1.3. Build a more robust set of incentives to encourage developers to adopt green building standards. More incentives should be offered for developments that meet higher tiers of standards. City, Development Services <City - Economic Development None (Scored during incentive process) $50,000 $100,000 DME; Green Sense Program INCOMPLETE 2C.2.1. Identify businesses that are high electricity users, such as data centers. DME’s competitive rates and the ability to power businesses using 100 percent renewables is a good marketing opportunity for both the company and for Denton. City, DME <Chamber INCOMPLETE 2C.2.2. Provide technical assistance to developers and businesses that want to leverage federal incentives, such as the Business Energy Investment Tax Credit, or obtain LEED certification. City, Development Services, DME <DME INCOMPLETE 2C.2.3. Network with regional and statewide organizations focused on clean energy, municipal utilities, and data centers to understand trends and develop relationships with industry leaders.City, Chamber <DME INCOMPLETE 2C.3.1. Adopt the SDGs and formally make them a priority for the City of Denton. The four SDGs most related to Denton’s sustainability and economic development efforts are highlighted here.City <City - Economic Development INCOMPLETE 2C.3.2. Align performance metrics with the targets and indicators associated with each SDG. Not all targets will be directly applicable, so Denton can also set its own targets aligned to the SDGs. City <City - Economic Development INCOMPLETE 2C.4.1. Incorporate Denton’s Green Business Program in economic development digital marketing. The program can benefit from more targeted promotion to the business community.City, Chamber <Chamber INCOMPLETE 2C.4.2. Revise digital marketing materials to include a greater focus on Denton’s sustainability goals and 100 percent renewable energy resources. City, Chamber <Chamber INCOMPLETE 2C.4.3. Cultivate relationships with regional and statewide clean energy networks. Treat these networks as a channel for promoting Sustainable Denton as well as furthering business attraction.City, Chamber <DME INCOMPLETE 2D.1.1. Dedicate staff resources to supporting Hillwood and Stratford in making the Cole and Hunter Ranch vision come to fruition. City, Development Services <City - Economic Development None None $100,000 for future staff Revenues from Cole and Hunter Ranch development INCOMPLETE 2D.1.2. Provide concierge services to help the developers navigate processes across City departments and solve any challenges that arise. City, Development Services <City - Economic Development INCOMPLETE 2D.1.3. Continue to work with Hillwood and Stratford to ensure that a mix of housing options, from high- density to low-density, are built to increase the diversity in Denton’s housing stock. City, Development Services <City - Economic Development IN-PROGRESS 2D.2.1. Sustain implementation of the City’s Downtown Implementation Plan adopted in 2010.City, Development Services <City - Economic Development IN-PROGRESS None 2D.1. COLE AND HUNTER RANCH. None None None 2D. COMPETITIVE DENTON 2D.2. DOWNTOWN DEVELOPMENT. None None None None None 2B.6. PROMOTING DENTON’S CREATIVE BRAND. 2C. SUSTAINABLE DENTON 2C.1. SIMPLY SUSTAINABLE STRATEGIC PLAN. None None None None 2C.2. TARGET ENVIRONMENTALLY CONSCIOUS BUSINESSES. 2C.3. THINK GLOBAL, ACT LOCAL. 2C.4. GREEN MARKETING. None None None None 218 Economic Development Strategic Plan Implementation Matrix 2D.2.2. Continue utilizing various tools (development incentives, Chapter 380 agreements, TIRZ financing, and historic tax exemptions) to stimulate new private investment in the downtown. City, EDPB, Development Services <City - Economic Development Use existing tools $500,000 $1,000,000 Downtown TIRZ fund IN-PROGRESS 2D.2.3. Prioritize development of additional residential and commercial office space in downtown Denton, especially the corridors extending off the square. City, EDPB, Development Services <City - Economic Development INCOMPLETE 2D.3.1. Promote the development of Class A buildings for office space and creative redevelopment of existing structures to attract professional services and tech-oriented companies.City, EDPB <Chamber INCOMPLETE 2D.3.2. Utilize financial incentives to support the development of new or refurbished office space.City, EDPB, Development Services <City - Economic Development None None Up to $1,000,000 for office space incentives General incentive fund; future TIRZ; tax abatement INCOMPLETE 2D.3.3. Strengthen relationships with the regional real estate development and brokerage community by hosting quarterly or annual meetings with DFW real estate professional and trade associations.City, Chamber <Chamber INCOMPLETE 2D.4.1. Extend basic infrastructure to north Denton around Loop 288 to lay the groundwork for future residential and commercial development after TxDOT completes reconstruction of the loop.City, Development Services <City - Economic Development INCOMPLETE 2D.4.2. Improve the aesthetics and accessibility of main corridors leading into the downtown square. Dallas Drive and Fort Worth Drive are the main entrances from I-35 into the City core. City, Development Services <City - Economic Development INCOMPLETE 2D.4.3. Launch a Denton Fiber initiative to expand broadband connectivity and access to all businesses and residents. City, EDPB, Development Services <City - Economic Development INCOMPLETE 2D.5.1. Refresh the Denton EDP website so that it serves as the City’s primary online portal for economic development prospects, site location consultants, commercial real estate brokers, and other business decision- makers. City, Chamber <Chamber Private funds INCOMPLETE 2D.5.2. Establish a digital marketing campaign to highlight Denton’s economic development advantages and success stories. Develop baseline digital marketing tools and engage in regular digital marketing activities, including the following. City, Chamber <Chamber None $10,000 $25,000 Private funds INCOMPLETE 2D.5.3. Collaborate with the Denton Chamber of Commerce to create digital materials aimed at commercial real estate brokers, describing the attractive environment for business relocation.City, Chamber <Chamber IN-PROGRESS 3.1.1. Build off the workforce collaborative, detailed in Strategy 1.4, to focus on workforce needs during the period of economic recovery. City, DCWSLT, Workforce Solutions <City - Economic Development INCOMPLETE 3.1.2. Continue to convene regular meetings with key employers, Workforce Solutions, NCTC, and other providers to identify business needs and connect unemployed residents to jobs. City, DCWSLT, Workforce Solutions, NCTC <City - Economic Development INCOMPLETE 3.1.3. Over the long term, identify two to three occupations and/or skills that are critical to Denton employers and develop pathways to support residents in moving into those roles. City, DCWSLT, Workforce Solutions, NCTC <City - Economic Development Job-based incentive fund INCOMPLETE 3.1.4. Organize the collaborative around sharing data, coordinating demand and supply, aligning efforts to build talent pipeline, and streamlining BRE efforts. City, DCWSLT, Workforce Solutions, NCTC <City - Economic Development INCOMPLETE 3.2.1. Continue to collaborate with the City’s Community Development department in supporting the development or redevelopment of affordable housing in south and east Denton. City, Community Development <City - Economic Development IN-PROGRESS 3.2.2. Preserve existing housing by offering financial assistance for repairs or retrofitting to maintain naturally occurring affordable housing. City, Community Development <City - Economic Development Use existing abatements $25,000 per year $50,000 per year Tax abatements; Neighborhood empowerment zones IN-PROGRESS 3.2.3. Leverage the federal Opportunity Zones incentive and New Markets Tax Credit to support the development of valuable projects that will support the needs of existing residents.City, Community Development <City - Economic Development INCOMPLETE 3.2.4. Identify opportunities for adaptive reuse of existing buildings that can be converted into multiunit housing and preserve existing structures and utility connections. City, Community Development <City - Economic Development INCOMPLETE 3.2.5. Improve the development review process to decrease costs for those committed to building workforce and affordable housing. City, Community Development, Development Services <City - Economic Development INCOMPLETE None None None None None TBD $10,000 for website upgrades None None None Included in 2A.1.2 3.1. WORKFORCE COLLABORATIVE. 3.2. HOUSING AFFORDABILITY. 3.3. GROW YOUR OWN TALENT INITIATIVE. 2D.3. PROFESSIONAL OFFICE SPACE. 2D.4. INFRASTRUCTURE. 2D.5. DIGITAL MARKETING. GOAL 3. STRENGTHEN COMMUNITY INCLUSION None None None TBD TBD 219 Economic Development Strategic Plan Implementation Matrix 3.3.1. Support youth entrepreneurship programs at the local level to foster a culture of innovation and cultivate an entrepreneurial spirit. City, Denton ISD, Denton Innovation Group, Stoke <City - Economic Development City General Fund INCOMPLETE 3.3.2. Encourage Denton ISD to incorporate entrepreneurship into academic curricula and increase exposure and access to Denton’s startups. City, Denton ISD, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 3.3.3. Gather data from UNT, TWU, and NCTC about graduates, including how many students stay in Denton and the DFW Metroplex versus relocating to other parts of the state or country. City, UNT, TWU, NCTC <City - Economic Development INCOMPLETE Explore options to update and/or refine Denton's economic development operations, including a Customer Relationship Management (CRM) system for information and contact management.City <City - Economic Development Excel or free option $7,500 per year $10,000 for CRM system City General Fund INCOMPLETE Update the City's incentive policies to align with the strategies and actions outlined in the economic development strategic plan.City <City - Economic Development INCOMPLETE Develop cost estimates for implementation of the strategic plan and options for the City to allocate the resources necessary for implementation.City <City - Economic Development IN-PROGRESS None None $10,000 for sponsorship programs CAPACITY AND RESOURCES None None 220 ECONOMIC DEVELOPMENT STRATEGIC PLAN & IMPLEMENTATION City Council Work Session Feb. 9, 2021 ID21-124 221 2 Objective •Provide overview of Denton’s Economic Development Strategic Plan. •A resolution to adopt the Plan is on the City Council agenda. •Review and discuss options regarding the proposed policies, programs, and scoring matrix. •Review the Catalyst Fund creation. •Review next steps and future discussions. ID21-124; Feb. 9, 2021 222 Review of Strategic Plan 3ID21-124; Feb. 9, 2021 223 4 Strategic Plan Development ID21-124; Feb. 9, 2021 Nov. 2019 Contract with TIP Strategies Dec. 2019 Data Collection Jan. 2020 Roundtables & interviews; EDPB workshop March 2020 Roundtables and interviews April 2020 COVID impacts & adjustments May 2020 COVID impacts & adjustments Feb. 2020 Roundtables & interviews; EDPB workshop June 2020 EDPB workshop July 2020 Online public comment & EDPB workshop Aug. 2020 City Council workshop Oct. 2020 City Council workshop Feb. 2021 City Council workshop & plan adoption DISCOVERY OPPORTUNITY IMPLEMENTATION 224 5 Plan Framework ID21-124; Feb. 9, 2021 CORE RESILIENCY Protect the City’s core economic base and major employers by retaining businesses and providing them with the support necessary to continue doing business in Denton FUTURE FOCUSED Position Denton for future growth by understanding trends and adopting a proactive approach to economic development. INCLUSIVE GROWTH Enhance economic opportunity for all residents by utilizing different strategies that recognize the diverse needs and assets of different communities, especially those in south and east Denton. ENTPRENEURIAL SPIRIT Cultivate the City’s entrepreneurial ecosystem by investing in quality of place and catalyzing innovation that will continue to attract creative professionals to Denton. CULTURAL VITALITY Strengthen Denton’s cultural vitality by continuing to promote arts and music while also marketing the City as DFW’s cultural hub. ACCELERATE RECOVERY FOSTER GROWTH STRENGTHEN COMMUNITY INCLUSION Coordinate short-term economic recovery efforts from the COVID-19 pandemic by aggregating information, collaborating with regional partners, and allocating resources to top priorities. Attract long-term economic growth aligned with community priorities by focusing on four strategic growth areas: connectivity, creativity, sustainability, and competitiveness. Align economic, workforce, and community development efforts to meet critical community needs and to strengthen community inclusion.GUIDING PRINCIPLESGOALS225 6 Strategic Recommendations & Implementation ID21-124; Feb. 9, 2021 Coordinate short-term economic recovery efforts from the COVID-19 pandemic by aggregating information, collaborating with regional partners, and allocating resources to top priorities. Accelerate Recovery Foster Growth Strengthen Community Inclusion 1.1 Build a cross-functional team to coordinate resources and response 2A.1 Enhance BRE Program by expanding goals and outreach 2C.1 Connect Denton’s sustainability goals through economic development 3.1 Convene businesses, training providers, and nonprofits 1.2 Take the pulse of the business community 2A.2 Focus on attraction through relationships and external marketing 2C.2 Target environmentally conscious businesses in attraction efforts 3.2 Work the Community Development on affordable housing initiatives 1.3 Provide virtual business retention, support, and assistance 2A.3 Continue developing Westpark industrial area 2C.3 Think globally, act locally by linking sustainable and economic growth 3.3 Create a “grow your own” talent initiative 1.4 Focus on workforce development and the local talent pipeline 2A.4 Create a logistics and supply chain management Center of Excellence 2C.4 Market Denton’s sustainability as a business advantage 1.5 Ensure recovery efforts are inclusive of all communities 2B.1 Connect entrepreneurs, capital, talent, and networks 2D.1 Dedicate staff and resources to Cole and Hunter Ranch developments 1.6 Maintain partnerships and collaborate for regional recovery 2B.2 Increase access to capital and funding for entrepreneurs 2D.2 Focus on investments in Downtown Denton and foster growth 2B.3 Build successful ecosystems and foster collaboration 2D.3 Incentivize development of professional office space 2B.4 Support the growing EdTech cluster through promotion and partnerships 2D.4 Remained focused on keeping up with infrastructure needs 2B.5 Recruit growing startups looking to expand or relocate 2D.5 Use digital marketing channels to tell Denton’s story 2B.6 Promote Denton’s creative brand through marketing and recognition 226 7 Capacity and Resources ID21-124; Feb. 9, 2021 •Consider structural changes to EDPB to focus on goals and resources. •Create an economic development partners working group to focus on operations. Economic Development Partnership •Pursue federal stimulus funding for COVID-19 recovery. •Create the Denton Catalyst Fund. •Review incentive policy and programs. Funding •Conduct additional research and analysis to develop new programs and policies. •Work in partnership and collaborate with subject matter experts. Programs and Policies •Conduct a regional marketing audit. •Create a marketing plan. •Focus on development of digital marketing materials. Marketing •Develop new database of Denton businesses and maintain a relationship and contacts database. •Implement a centralized prospect and lead tracking systems. •Document processes and policies to ensure consistency. •Develop a set of performance metrics to regularly track for transparency and accountability. Internal Systems 227 8 Adoption of the Strategic Plan ID21-124; Feb. 9, 2021 •A resolution to adopt the Economic Development Strategic Plan is on the agenda for Council consideration on Feb. 9. •Adoption of the Economic Development Strategic Plan is not the end of the project, it’s the beginning. •The Strategic Plan will be used to develop work plans and goals moving forward. •Updates regarding implementation are provided in the Economic Development Quarterly Reports. •Any amendments or changes will be brought to EDPB and City Council in the future. 228 Policies and Programs 9ID21-124; Feb. 9, 2021 229 10 Denton’s Building Blocks ID21-124; Feb. 9, 2021 The Policy is the guiding document for staff and City Council. It provides the overall guidance under which the City Council will consider incentives, outlines the priorities, and will include the scoring matrix. To implement the Strategic Plan, the City will need to make updates and revisions to its existing policy. Tax Abatement & Incentive Policy Economic Development Programs Individual programs will be developed and presented for adoption. The programs will include parameters, criteria, processes, etc. for various economic development support programs. Currently, programs are included as part of the policy. Programs proposed in the Strategic Plan include: General; Infrastructure, Utilities & Development; Innovation, Entrepreneurship & Access; Green; Targeted Office Space. Council will be able to consider each program individually and select the program criteria. Applications will also be developed. The Catalyst Fund will be the fund from which incentives, grants, and programs can be funded if policy and program criteria are met. Currently, the City uses the Economic Development Investment Fund (or other economic development tools) to fund incentives. Catalyst Fund 230 11 Project Consideration Process ID21-124; Feb. 9, 2021 •Prospect interest in Denton. •Staff due diligence on sites, development, utilities, etc. •New business prospect is recruited. •Prospect applies for incentive. •Staff completes review of application for compliance with incentive policy. •Project is scored using scoring matrix. •Prospect is determined as eligible for incentives under general incentive program. •Staff completes analysis of application and develops proposed incentive package under program parameters. •Staff presentation to EDPB and City Council. •If approved, package (or a component thereof) may be funded from Catalyst Fund. 231 12 Proposed Development Timeline ID21-124; Feb. 9, 2021 2022 2023 2024 2025 Develop new policy and program criteria. Implement new policy and programs. Policy review and updates. Policy and program implementation. Develop catalyst fund ordinance. Catalyst Fund considered as part of budget development. Program funding and capacity building. Review and update. Review and update. Review and update. Policy and Program Timeline Catalyst Fund Timeline 232 13 Scoring Matrix •The economic development scoring matrix was introduced at the Oct. 27, 2020 City Council meeting as a tool understand and evaluate both Council priorities and individual projects. ID21-124; Feb. 9, 2021 233 14 Scoring Matrix: Targets •Targeted projects are those identified as high priority and connected to strategic growth areas in the Strategic Plan. •Examples of targets include: •Connected: Distribution, e-commerce, logistics, and transportation. •Creative: Computer services, research, advertising, marketing, performing arts, design, and software. •Sustainable: Engineering, developers, construction, and alternative electric power. •Competitive Denton: Corporate HQ, financial/credit services, insurance, and healthcare. •Target lists are provided on page X of Strategic Plan. ID21-124; Feb. 9, 2021 Targets IndustrialOfficeRetail/HotelDistribution Company X Software Company X Downtown Hotel X 234 15 Scoring Matrix: Priority & Bonus Considerations ID21-124; Feb. 9, 2021 •Staff developed priority and bonus considerations based on the Strategic Plan and existing Tax Abatement and Incentive Policy. •Staff recommendation regarding points are on the next slide. •Council direction needed regarding point distributions. •Staff will evaluate projects and score applications as part of review process. •Points assigned based on established criteria. •Incentive packages will be developed based on project’s eligibility and overall score. •Until scoring matrix can be adopted into policy, staff will use matrix concurrently with existing evaluation processes. 235 16 Scoring Matrix: Priority Considerations ID21-124; Feb. 9, 2021Priority Considerations (100 Points)Consideration Max Points Expand the tax base Project provides new property, sales, HOT, or other taxes to the City, County, DISD, and DCTA through the development of property or facility or by making improvements to an existing property or facility, through the development of a new business or expansion of an existing business, through the development of a new multi-tenant complex where businesses can locate, or through the addition or increase in jobs available in the City. 20 Generates new utility customers Project is a customer of City of Denton Utilities, including water, wastewater, and electric. Higher points awarded for larger customers. 20 Encourages new business markets/suppliers and entrepreneurship Project is from an industry not significantly represented in local economy or company is a new business startup or entrepreneurial endeavor. 10 Engages in sustainable practices Project has adopted sustainable or green business practices (e.g. LEED certification, renewable energy commitment or use, energy efficient construction).10 Increases high wage jobs (# or %) Project includes new jobs or has a significant percentage of jobs that earn an annual base salary of $65,000 or more.15 Encourage knowledge base jobs. Project includes new jobs or has a significant percentage of jobs that require specialized and theoretical knowledge, usually acquired through work experience or a college education, or other training which provides comparable knowledge; requires some research, analysis, report writing and presentations, or requires special licensing, certification, or registration to perform the job. 10 Spur infill development or redevelopment Project is to develop/redevelop a property or facility in a manner that reduces urban sprawl and or increases density in a desirable area; project includes use of existing facility that has been vacant for at least two years. 10 Other priorities or considerations as determined by City Council This category allows Council flexibility to add additional points to projects that generate public or community benefit beyond the defined priorities. 5 236 17 Scoring Matrix: Bonus Considerations ID21-124; Feb. 9, 2021Bonus Considerations(15 Points)Consideration Max Points Public-Private Partnership Project includes development of public infrastructure or public amenities that City deems beneficial, or developer assumes responsibility for development of infrastructure or other public facilities beyond what is required. Project will involve a significant relationship with a public school district or institution of higher education. 5 Community Investment Project, company, or developer demonstrates a commitment to community support or involvement through monetary or in-kind support of local nonprofits, public institutions, or community organizations. 5 Use of local contractors/construction vendors Project agrees to use vendors that have their principal place of business within the Denton City Limits.5 237 18 Scoring Matrix: Example ID21-124; Feb. 9, 2021 Targets Priority Considerations (100 Points) Bonus Considerations (15 Points) T o t a l IndustrialOfficeRetail/HotelExpand the tax baseGenerates new utility customersEncourages suppliers and entrepreneurshipEngages in sustainable practicesIncreases high wage jobs (# or %)Encourage knowledge base jobs.Spur infill development or redevelopmentOther priorities or considerations as determined by City CouncilPublic-Private PartnershipCommunity InvestmentLocal ContractorsMAX POINTS ------20 20 10 10 15 10 10 5 5 5 5 Distribution Company X 10 15 5 5 12 2 0 2 0 5 5 61 Software Company X 3 8 10 2 9 10 6 5 0 5 0 58 Downtown Hotel X 5 5 2 10 4 5 10 5 2 2 1 51 238 Catalyst Fund 19ID21-124; Feb. 9, 2021 239 20 Considerations for Building a Catalyst Fund ID21-124; Feb. 9, 2021 The goal of building a catalyst fund is to meet the strategic objectives of the plan. Flexibility will be necessary to determine the path to meet those goals and objectives. Investing in economic development will require building resources over time. The level of resources needed to carry out the plan each year is not static. Denton needs a toolbox of different resources and mechanisms to support economic development. 240 21 Denton Catalyst Fund •At the Aug. 18, 2020 City Council Work Session, Council: •Reviewed available economic development tools. •Discussed the estimated costs to implement the strategic plan. •Considered options to increase economic development program funding. •Provided direction to further investigate the aggressive model (+$7M/yr). •At the Oct. 27, 2020 City Council Work Session, Council: •Provided direction to pursue options to dedicate additional funding for economic development. •Reviewed a timeline of fund and policy development. •Reviewed options for a potential incentive scoring matrix •Considered options for funding the Catalyst Fund. •Staff recommendation: Use of utility system fund balance in FY 2020-21 and dedicate 0.5% of utility system ROI in future years. •Staff will bring back discussions regarding the Catalyst Fund during the FY 21-22 budget preparation. ID21-124; Feb. 9, 2021 Current StateInvestment Fund Adopted by City Council in 2016. $150,000 of mixed beverage sales tax allocated annually. Cash grants considered when 2/3 program criteria are met.Future StateCatalyst Fund New resolution to create fund will be developed. Portion of Utility System ROI allocated annually. New program criteria to be developed based on strategic goals. 241 Next Steps 22ID21-124; Feb. 9, 2021 242 23 Next Steps ID21-124; Feb. 9, 2021 •Staff will: •Finalize the draft scoring matrix and use concurrently with existing policy. •Start process to draft new tax abatement and incentive policy that aligns with Strategic Plan. •Draft new program guidelines. •Will be brought back to City Council for discussions later in 2021. •Prepare information regarding the Catalyst Fund as part of the FY 21-22 budget preparation. •Develop Catalyst Fund ordinance. 243 24 Questions? ID21-124; Feb. 9, 2021 244 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 20-2273,Version:1 AGENDA CAPTION Receive a report, hold a discussion, and give staff direction on pending City Council requests for: 1.Form a formal partnership between City of Denton and Solutions Addiction Treatment Center to help fund their new group homes. 2.Evening Board and Commission meetings. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™245 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: City Manager’s Office DCM: Sara Hensley DATE: February 9, 2021 SUBJECT Receive a report, hold a discussion, and give staff direction on pending City Council requests for: 1. Form a formal partnership between City of Denton and Solutions Addiction Treatment Center to help fund their new group homes. 2. Evening Board and Commission meetings. BACKGROUND During the annual City Council retreat on Saturday, August 17, 2019, the City Council agreed to a process to ensure there is a consensus of the City Council regarding the use of staff time when responding to requests from elected officials that anticipate taking more than two hours to complete or if there is a City Council policy decision to be made. The process developed during the retreat was further discussed and formally adopted at the August 27, 2019 City Council meeting (Exhibit 2). Staff will review one outstanding request for information per elected official during each work session. The weekly work session process will include staff introducing the requested topic followed by the requesting elected official having up to one minute to describe and justify their request. Remaining elected officials will then have up to one minute to provide feedback and indicate their support for the use of staff time to respond to the request. Staff will respond to all requests where a consensus of at least four elected officials is established. Responses will be provided in the requested format including Informal Staff Reports, Legal Status Reports, City Council work session topics, or ordinances and resolutions to be considered on future City Council agendas. The following item will be discussed during the February 9, 2021 work session: 1. Form a formal partnership between City of Denton and Solutions Addiction Treatment Center to help fund their new group homes. a. Requestor: Council Member Armintor b. Council Member Request: I would like to make a one minute pitch to Council at the next possible meeting to form a formal partnership between City of Denton and Solutions Addiction Treatment Center to help fund their new group homes --homes that save Denton money, facilitate employment, promote public health, and prevent homelessness while, most importantly, giving residents jobs and saving Denton lives and families. If there is consensus on Council to formalize this relationship and help to fund those new homes, then the exact terms of the partnership and the dollar amount of the city's investment could be worked out in an upcoming work session where Solutions can make their proposal and Council can deliberate on it. If Council agrees to let Solutions make a pitch for a public-private partnership at an upcoming work session, Solutions staff would meet with city staff in advance of the meeting so that City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 246 their proposal and presentation could be included as backup in the publicly posted agenda for the work session. c. Staff information: The City has existing annual grant programs that are available to nonprofits for public facility and social services, including the Community Development Grant, Human Services Grant, and the Development Fee Grant. The established grant funding processes provide fairness and equity in distribution of available funding, reduces perceived bias, ensures the City’s ability to provide appropriate oversight for the use of tax payer supported grant funds, and improves transparency in the funding process overall. Nonprofit public facility projects may be eligible for CDBG. Eligible nonprofit organizations apply annually to be considered for Community Development Block Grant (CDBG), HOME Investment Partnership (HOME), and General Fund grant allocations. The Community Development Grant and Human Services Grant application process follows the same timeline annually. The Community Development Advisory Committee (CDAC) and Human Services Advisory Committee (HSAC) review applications to determine eligibility under the applicable guidelines for the funding source and make funding recommendations for City Council approval. The FY2021-2022 Grant Application Process is underway. Applications have been submitted and will be considered by the CDAC and HSAC in February, 2021. 247 Nonprofit projects may also be eligible for the Development Fee Grant Program (DFGP). In collaboration and partnership with local nonprofits, the City is offering the program as an incentive for supportive services provision to: • Reduce barriers to residents in need to receive assistance through supportive services; • Increase access to supportive services; • Encourage preservation of existing and construction of new accessible public facilities in Denton. The DFGP guidelines can be found on the City’s website at www.cityofdenton.com/communitydevelopment under Grants. The funding chart of allocations by funding source is also attached as Exhibit 3. It will not break out specific project list. Current public facility projects underway include: • PY2019-20 – Grace Like Rain, Pre-Development costs for Supportive Housing • PY2019-20 – CASA, ADA accessible parking lot • PY2019-20 – Habitat for Humanity, Land Acquisition • PY 2020-21 – Denton City County Day School, Phase 2 Playground Improvements • PY 2020-21 – Serve Denton, Sidewalks and ADA improvement d. Date Requested: January 28, 2021 e. Requested Format for Response: Work Session 2. Evening Board and Commission meetings a. Requestor: Council Member Meltzer b. Council Member Request: In order to accommodate video requirements for board and commission meetings under COVID within available resources, some boards and commissions are now required to meet during the workday. Board and commission positions are unpaid and may be filled by members of the community with full time day jobs. This is to request that staff develop options other than workday meetings that may include having less frequent and potentially longer meetings. I ask that current board and commission members be polled as to who cannot attend day meetings so if any boards or commissions can meet during the day without losing members, those can be identified. 248 c. Staff information: At the beginning of the pandemic last spring, staff immediately developed a virtual solution for all public meetings, significantly changing operations for all Council and Board/Commission/Committee meetings. Staff presented a plan to Council last spring for the scheduling and production of all virtual public meetings, discussed the constraints we faced, and received direction to proceed. As a reminder, under this virtual-only environment, the City is significantly limited by schedule availability and staff resources. • Since the shift to all virtual meetings at the start of the pandemic, every Board/Commission/Committee meeting has to be both streamed online and broadcast through the DTV cable channel so that the meetings can be watched live by the public (rather than allow access for in-person attendance at meetings that would be available under normal circumstances). This is significantly different than pre-COVID when DTV only produced for a few committees. • Due to the need to produce and broadcast/stream every meeting, meetings are unable to be held concurrently. • Additionally, because of the use of the Zoom platform, the remote production capability of Swagit (our outside vendor) is not able be used as a means to produce meetings. Therefore, DTV staff are producing the few committees that Swagit use to. • As a result, we have had to shift many of our board and commission meetings into the daytime. Staff currently schedules meetings no later than 3pm (those meetings conclude between 5-6pm), but does not generally schedule any meetings after that time with the exceptions of City Council (every Tuesday), the Planning and Zoning Commission (every other Wednesday), and other exceptions (e.g. State of the City event or the Use-of-Force Ad Hoc Committee met each week over the summer on Thursday evenings). If Council would like to hold more evening meetings under this environment, it would require committees to meet significantly less often to create the schedule space necessary to stream each one and likely require additional production staff to be hired to produce these meetings. Additionally, Council would also need to provide direction on which meetings it would prefer to be held in the evening timeframe. Exhibit 4 includes information about the frequency and general meeting times of board and commission meetings prior to the virtual format caused by the COVID-19 pandemic. Originally in March 2020, when the COVID-19 pandemic began, staff scheduled only decision-making bodies (City Council, Planning and Zoning, Board of Adjustments). Exhibit 5 includes a list of the virtual meetings held since May 2020 after the COVID- 19 pandemic began once other, non-decision making, board and commission meetings began being scheduled. d. Date requested: February 1, 2021 e. Format for response: Work Session EXHIBITS 249 Exhibit 1 – Agenda Information Sheet Exhibit 2 – Ordinance No. 19-2026 Exhibit 3 – Community Services Source Funding Chart Exhibit 4 – B&C Meetings prior to COVID-19 Exhibit 5 – B&C Virtual Meetings since May 2020 Exhibit 6 – Presentation Respectfully Submitted: Stuart Birdseye Assistant to the City Manager 250 1 • 1 # • • 1 ' " : ' • R „ .1 1 l .. .' , . • ', M R . , ' ! . # ......., ' [ '.. . ': r - .... . 1 . #' . • .. ! . .. . `. • ... .. ...., ,. • - . + ... .,. ,.. R + . ' '. ' . . f` r * ' " • . . . . * * .• . _ . # . w f#•. ' " + '! ' . I , '! -, * • - ' ' . ., . •# # - .' . ! r *r i 1 • •,,. ' ••' '# . • 1''• ' 1 # . -, s . " . ' " !!' ' ' #' ' /' •' . ' _ •' ! i '' . - r "'•' # . . . a} Definitions. 1 . •- .• i . ! • ",." . . : .' . 1 # " , I . ! # ' . . • !' ' . w ' ' '' '•' • "" ' ""• " + " r • !"+ • • " ' ,' • # • ! /• j reporting ta, the City Manager or City Attorney. 251 b) City Council Requests for Information from City Staff. 1) All City Council requests for information from City Staff, must be submitted to the City Manager's Office via email and include at a minimum, the following details: a, Request Type; b. Purpase; c. Time Sensitivity; and d. Preferred Respanse Format. 2) The City Manager's Office and/or the City Attorney's Office will estimate the amaunt af time required to respond ta each request. 3) Requests estimated to take more than a total of twa hours to complete will be brought forward within the next 30 calendar days, to a City Council wark session to seek cansensus from the full City Council regarding the use af City Staff time to fulfill the request. Requests for information referred to a work session will fallow the procedures provided in sub-section (b) of Sectian 2-30. c) City Cauncil Requests for Informatian Referred to a Work Session. 1) A standing work session item will be added to each City Council agenda for City Council requests ta be cansidered. a. The requesting Council Member will be required ta pravide a clear, written explanation describing the reason for the informatian requested. This description will be included as an attachment ta the work session agenda materials and must he provided to the City Secretary in time to fully camply with Texas Open Meeting Act requirements. 2) During the work session, the requesting Cauncil Member will have a maximum af one minute to describe and justify their request. a. Remaining Cauncil Members will then have a maximum of one minute each to provide feedback and indicate their support for the use of City Staff time to respond ta the request, 3} City Staff will respond to all requests where a consensus of at least four elected officials is established. Each elected official will alsa have the option to request City Staff respond to a maximum of two requests per quarter where a consensus is not met, pravided each request in this category is not estimated to take mare than a total of ten City Staff hours to complete, Ta the extent possible, responses will be make in the requested format including Informal Staff Reports, Legal Status Reports, City Council work session topics, or ardinances and resalutians ta be cansidered on future City Council agendas. SECTION 2. This ordinance shall become effective immediately upon its passage and approval. 252 S„ECTION 3, To the extent not otherwise provided, this ordinance shall repeal every prior ordinance in conflict herewith, but only insofar as the portion of such ordinance shall be in conflict; and as to all other sections of the ordinance not in direct conflict herewith, this ordinance shall be and is hereby made cumulative except as to such prior ordinances or portions thereof as are expressly repealed hereby. SECTION 4. If any provision of this ordinance or the application thereof to any person or circumstance is held invalid by any court, such invalidity shall not affect the validity of the provisions or applications, and to this end the provisions of this ordinance are severable. ro ordinance was made by ' ° m Y ; ' ° The motion to app ve this and seconded by '' m , the ordinance was r,a.l anda z r•r y t 7 a l>r ir r N ..,. b Mayor Chris Watts: Gerard Hudspeth, District 1 Keely Briggs, District 2: Jesse Davis, District 3: John Ryan, District 4: Deb Armintor, At Large Place 5: Paul Meltzer, At Large Place 6: Aye Nay Abstain Absent PASSED AND APPROVED this the °,, day of , , _ t 2019, n. --,, w , ; C i' I: WATTS, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY BY° ' 6 . .,.o . w. , . ... ... ,,, APPROVED AS TO LEGAL FORM: AARON C.. ITY A"1 l! ;' y B Y: " „ . r r i ' y r>,, " " 4 r r , r , " G y 9 d 9 r 5i tl . 1, s ' w ,,.„d, y, i w , J' 253 City of Denton Community DevelopmentSource Funding Chart2020‐212020‐21Social ServicesGeneral Fund2020‐21Social ServicesCDBGMulti‐YearHousing & CDCDBGMulti‐YearHousingHOME2020 +6YrsCARES ActOne‐TimeCDBG‐CV1 CDBG‐CV32020 Thru 07/31/21CARES ActOne‐TimeESG‐CVOne‐TimeDebt FundedTOTAL PRIOR YEARFY2019‐20 FY2018‐19 HS Grant (CDBG) $157,769157,769$ 148,978$ 148,500$ HS Grant (General Fund) $342,231342,231$ 333,522$ 322,500$ HS Admin & Operations (General Fund) $378,063378,063$ 348,018$ 341,606$ 1Children's Advocacy Center (Police)$180,405180,405$ 165,485$ 144,897$ 1Interfaith (DME)$133,000133,000$ 133,000$ 125,000$ Homelessness Initiatives ‐ ie. DCHLT ‐ CE/HMIS (UW) $18,85018,850$ 12,000$ 18,000$ Homelessness Initiatives ‐ DCHLT (UW) MOU $80,00080,000$ 80,000$ 107,748$ Homelessness Initiatives ‐ Barriers Fund MOU (UW) $40,00040,000$ 40,000$ ‐$ Homelessness Initiatives ‐ Street Outreach (SO) $64,60064,600$ 64,600$ ‐$ Homelessness Initiatives ‐ Rapid Re‐Housing (RRH) $100,000100,000$ 100,000$ ‐$ Homelessness Initiatives ‐ Facility The Junction4‐$ 80,000$ ‐$ Homelessness Initiatives ‐ Shelter The Junction4$400,000400,000$ 400,000$ ‐$ Homelessness Initiatives ‐ Loop 288$2,000,000 2,000,000$ ‐$ CDBG/HOME Prior Year Balances3,773,121$ 3,637,048$ 2City Housing Assistance Projects (HAP, HIP, MRP)$706,181 $1,172,411 1,878,592$ MY2Nonprofit Housing (DAHC, Fairoaks, Cumberland, etc.)$0 $300,783 300,783$ MY2City Infrastructure Projects $638,610 $0 638,610$ MY2Public Facility Improvements$429,367 $0 429,367$ MY2Admin & Operations (CDBG, HOME)$219,103 $75,233 294,336$ MYUnprogrammed Federal/State $49,340 $0$618,736 $1,425,0002,093,076$ ‐$ Unprogrammed Federal/State$866,704866,704$ ‐$ TOTAL BY FUNDING CATEGORY $1,737,149 $157,769 $2,042,601 $1,548,427$1,485,440 $1,425,000$2,000,000 $10,396,385 5,678,724$ 4,845,299$ All %16.71% 1.52% 19.65% 14.89%14.29% 13.71%19.24% 100.00%2019‐20$1,723,475 $148,978Cumulative Difference$13,674$8,7911Funding Budgeted through other Department HBU2Multiyear activities ‐ Funds available & encumbered but unspent (as of 09/01/20) Balance is revolving. PY 2019‐20 CDBG, HOME Beginning Balance was $3.78m3Development Fee Grant not included ($225,000)4Previously MKOC/ODB1/29/2021254 Airport Advisory Board Monthly 2nd Wednesday Airport Terminal Meeting Room 5:30 p.m. Animal Shelter Advisory Committee Quarterly 3rd Wednesday Animal Services Training Room 6:00 p.m. Board of Ethics Monthly Last Thursday Work Session Room Varies Civil Service Commission As Needed 4th Wednesday HR Training Room at City Hall East 3:00 p.m.; varies Committee on Persons with Disabilities Monthly 3rd Thursday Work Session Room 6:00 p.m. Community Development Advisory Cmte As Needed November through March Second Floor Conference Room at City Hall East Varies Denton Police Department Chief of Police Advisory Board Work Session Room Health and Building Standards Commission Monthly 3rd Thursday Council Chamber 4:00 p.m. Historic Landmark Commission Monthly 2nd Monday Work Session Room 5:30 p.m. Human Services Advisory Committee As Needed Nov. through March Second Floor Conference Room at City Hall East Varies Library Board Monthly 2nd Monday Meeting Room at the North Branch Library 5:30 p.m. Parks, Recreation and Beautification Board Monthly 1st Monday Civic Center Community Room 6:00 p.m. Planning and Zoning Commission Bi-Monthly 2nd and 4th Wednesday Work Session Room & Council Chambers WS 5:30 p.m./Reg Mtg 6:30 p.m. Public Art Committee Monthly 1st Thursday Work Session Room 4:00 p.m. Public Utilities Board Bi-Monthly 2nd and 4th Monday Work Session Room 2nd Mon 9 a.m./4th Mon 6 p.m. Sustainability Framework Advisory Committee Work Session Room Traffic Safety Commission Monthly 1st Monday Work Session Room 5:30 p.m. Zoning Board of Adjustment Monthly Last Monday Work Session Room 5:30 p.m. Bond Oversight Committee As Needed As Needed Work Session Room Varies Council Committees and Boards & Commissions Prior to COVID-19 Board/Commission/Committee Meeting Frequency Meeting Days Meeting Location Meeting Times (All Subject to Change) Board/Commission/Committee Meeting Frequency Meeting Days Meeting Location Meeting Times (All Subject to Change) 12:00 p.m.Downtown Denton TIF Reinvestment Zone No 1 Bi-Monthly 4th Wednesday Work Session Room 255 Economic Development Partnership Board Monthly 2nd Wednesday Work Session Room 11:00 a.m. Tax Increment Reinvestment #2 As Needed As Needed Work Session Room 12:00 p.m. Agenda Committee Weekly Wednesdays City Manager's Conference Room 2:30 p.m. Audit Finance Committee Monthly - As needed Tuesday City Hall Conference Room 9:00 a.m. Committee on Community Engagement [Renamed from Committee on Citizen Engagement by Resolution No. 20-1873 adopted October 20, 2020.]Bi-Monthly 1st Tuesday City Hall Conference Room 10:30 a.m. Committee on the Environment Monthly 1st Monday Work Session Room 1:30 p.m. Council Airport Committee Monthly 4th Tuesday City Hall Conference Room 10:00 a.m. Council Appointee Performance Review Committee Not operational Not operational N/A --- Community Partnership Committee [Renamed from Hotel Occupancy Tax & Sponsorship Community by Resolution No. 20-1471 adopted September 1, 2020.] As Needed; Usually April-June Thursdays Work Session Room 10:00 a.m. Denton Code Review Committee As Needed; Usually April-June Mobility Committee Monthly 2nd Tuesday Work Session Room 9:00 a.m. 12:00 p.m.Downtown Denton TIF Reinvestment Zone No 1 Bi-Monthly 4th Wednesday Work Session Room Board/Commission/Committee Meeting Frequency Meeting Days Meeting Location Meeting Times (All Subject to Change) 256 Month Day Date Time Body Tuesday May 5, 2020 2:00 p.m. City Council Wednesday May 6, 2020 5:30 p.m. P&Z Commission Friday May 8, 2020 HSAC/CDAC Monday May 11, 2020 9:00 a.m Public Utilities Board Tuesday May 12, 2020 City Council Thursday May 14, 2020 1:00 p.m. HOT and Sponsorship Committee Tuesday May 19, 2020 1:00 p.m. City Council Wednesday May 20, 2020 5:30 p.m. P&Z Commission Wednesday May 27, 2020 11:30 a.m. Civil Service Commission Friday May 29, 2020 1:00 p.m. City Council Tuesday June 2, 2020 12:00 p.m. City Council Emergency Mtg Tuesday June 2, 2020 1:00 p.m City Council Wednesday June 3, 2020 5:00 p.m. P&Z Commission Thursday June 4, 2020 1:00 p.m. Public Art Committee Monday June 8, 2020 9:00 a.m. Public Utilities Board Monday June 8, 2020 3:00 p.m. Historic Landmark Commission Tuesday June 9, 2020 1:00 p.m. City Council Wednesday June 10, 2020 9:00 a.m. Civil Service Commission Thursday June 11, 2020 10:00 a.m. HOT and Sponsorship Committee Monday June 15, 2020 11:00 a.m. Civil Service Commission Tuesday June 16, 2020 2:00 p.m. City Council Wednesday June 17, 2020 1:00 p.m. Airport Advisory Board Wednesday June 17, 2020 5:00 p.m. P&Z Commission Monday June 22, 2020 9:00 a.m. Public Utilities Board Monday June 22, 2020 3:00 p.m. Public Art Committee Tuesday June 23, 2020 8:00 a.m. City Council Wednesday June 24, 2020 11:00 a.m. Economic Dev. Partnership Board Thursday June 25, 2020 10:00 a.m. Committee on the Environment Thursday June 25, 2020 3:00 p.m. Board of Ethics Thursday June 25, 2020 6:00 p.m. Use-Of-Force Ad Hoc Committee Friday June 26, 2020 1:00 p.m. City Council Emergency Mtg Friday June 26, 2020 2:30 p.m. Council Airport Committee Tuesday June 30, 2020 TBD City Council Budget Workshop Thursday July 2, 2020 8:30 a.m. Downtown Economic Development Commmittee Tuesday July 7, 2020 3:00 p.m. Board of Ethics - Panel Wednesday July 8, 2020 11:00 a.m. Economic Dev. Partnership Board Wednesday July 8, 2020 5:00 p.m. Planning & Zoning Commission Thursday July 9, 2020 10:30 a.m. Civil Service Commission Monday July 13, 2020 9:00 a.m. Public Utilities Board Monday July 13, 2020 12:30 p.m. to 2:30 p.m. Parks, Recreation and Beautification Board Monday July 13, 2020 3:00 p.m. Historic Landmark Commission Thursday July 16, 2020 1:00 p.m. Comittee on Persons with Disabilities City Council, Board and Commission Meetings (since May 2020) June May 257 Thursday July 16, 2020 6:00 p.m. Use-of-Force Ad Hoc Committee Friday July 17, 2020 3:00pm Public Art Committee Monday July 20, 2020 9:00 a.m. Hotel Ocupancy Tax and Sponsorship Committee Monday July 20, 2020 3:00 p.m. Traffic Safety Commission Tuesday July 21, 2020 1:00 p.m. City Council Wednesday July 22, 2020 12:00 p.m. Downtown Denton TIF Reinvestment Zone No. 1 Wednesday July 22, 2020 5:00 p.m.Planning & Zoning Commission Thursday July 23, 2020 11:30 a.m. Bond Oversight Committee Thursday July 23, 2020 2:00 p.m. Animal Shelter Advisory Committee Thursday July 23, 2020 6:00 p.m. Use of Force Ad Hoc Committee Friday July 24, 2020 10:00 a.m.Council Airport Committee Monday July 27, 2020 9:00 a.m. Public Utilities Board Tuesday July 28, 2020 1:00 p.m. City Council Thursday July 30, 2020 8:30 a.m. City Council Budget Workshop (End @ 2:30 p.m. Thursday July 30, 2020 3:00 p.m. Board of Ethics Thursday July 30, 2020 6:00 p.m. Use of Force Ad Hoc Committee Monday August 3, 2020 8:30 a.m. PUB Monday August 3, 2020 11:30 a.m. City Council Tuesday August 4, 2020 1:00 p.m.City Council Wednesday August 5, 2020 5:00 p.m.Planning and Zoning Commission Thursday August 6, 2020 8:30 a.m. City Council Friday August 7, 2020 3:00 p.m.Public Art Committee Monday August 10, 2020 9:00 a.m. Public Utilities Board Tuesday August 11, 2020 1:00 p.m.City Council Wednesday August 12, 2020 11:00 p.m. Economic Development Partnership Board Thursday August 13, 2020 6:00 p.m. Use-Of-Force Ad Hoc Committee Monday August 17, 2020 3:00 p.m.Parks, Recreation and Beautification Board Tuesday August 18, 2020 12:00 p.m.City Council Wednesday August 19, 2020 5:00 p.m.Planning and Zoning Commission Thursday August 20, 2020 6:00 p.m.Use-Of-Force Ad Hoc Committee Monday August 24, 2020 9:00 a.m. Public Utilities Board Tuesday August 25, 2020 1:00 p.m.City Council Thursday August 27, 2020 11:30 a.m.City Council Thursday August 27, 2020 3:00 p.m. Board of Ethics Thursday August 27, 2020 6:00 p.m. Southwest Park Area Plan Tuesday September 1, 2020 10:00 a.m. Committee on Citizen Engagement Tuesday September 1, 2020 12:00 p.m.City Council Wednesday September 2, 2020 5:00 p.m.Planning and Zoning Commission Thursday September 3, 2020 8:30 a.m. Downtown Economic Dev. Committee Thursday September 3, 2020 6:00 p.m. Use-of-Force Ad Hoc Committee Friday September 4, 2020 3:00 p.m.Public Art Committee Tuesday September 8, 2020 9:00 a.m. Mobility Committee Tuesday September 8, 2020 1:00 p.m. Committee on the Environment Wednesday September 9, 2020 11:00 a.m. Economic Development Partnership Board Thursday September 10, 2020 9:00 a.m. Public Utilities Board (this is a tour - NO ZOOM) Thursday September 10, 2020 6:00 p.m. Use-of-Force Ad Hoc Committee Monday September 14, 2020 9:00 a.m. Public Utilities Board Monday September 14, 2020 12:30 p.m.Parks, Recreation and Beautification Board Tuesday September 15, 2020 12:00 p.m.City Council Wednesday September 16, 2020 5:00 p.m.Planning and Zoning Commission Thursday September 17, 2020 11:00 a.m.Traffic Safety Commission Thursday September 17, 2020 3:00 p.m.Committee on Persons with Disabilities Thursday September 17, 2020 6:00 p.m.Use-Of-Force Ad Hoc Committee July AUGUST SEPTEMBER 258 Friday September 18, 2020 3:30 p.m.Civil Service Commission Monday September 21, 2020 3:00 p.m.Historic Landmark Commission Tuesday September 22, 2020 2:00 p.m.City Council Wednesday September 23, 2020 12:00 p.m. Downtown Denton TIF Reinvestment Zone No 1 Thursday September 24, 2020 6:00 p.m. Use-of-Force Ad Hoc Committee Monday September 28, 2020 9:00 a.m. Public Utilities Board Monday October 5, 2020 9:00 a.m. Committee on the Environment Monday October 5, 2020 11:30 a.m. City Council Tuesday October 6, 2020 3:00 p.m.City Council Wednesday October 7, 2020 1:00 p.m.Library Board Wednesday October 7, 2020 3:30 p.m.Planning and Zoning Commission Thursday October 8, 2020 2:00 p.m. Community Development Advisory Cmte Monday October 12, 2020 9:00 a.m. Public Utilities Board Monday October 12, 2020 3:00 p.m.Parks, Recreation and Beautification Board Tuesday October 13, 2020 12:00 p.m.City Council Wednesday October 14, 2020 11:00 a.m. Economic Development Partnership Board Monday October 19, 2020 11:00 a.m. Development Code Review Committee Tuesday October 20, 2020 1:00 p.m.City Council Wednesday October 21, 2020 9:00 a.m. Downtown TIF Wednesday October 21, 2020 3:00 p.m. Animal Shelter Advisory Committee Wednesday October 21, 2020 4:30 p.m.Planning and Zoning Commission Thursday October 22, 2020 12:00 p.m.Public Art Committee Monday October 26, 2020 9:00 a.m. Public Utilities Board Monday October 26, 2020 5:00 p.m. Board of Ethics (Special Called Panel Meeting) Tuesday October 27, 2020 2:00 p.m.City Council Wednesday October 28, 2020 9:00 a.m. Mobility Committee Thursday October 29, 2020 10:00 a.m. Council Airport Committee Friday October 30, 2020 10:30 a.m. Human Services Advisory Committee Monday November 2, 2020 9:00 a.m. Committee on the Environment Wednesday November 4, 2020 1:00 p.m. Development Code Review Committee Wednesday November 4, 2020 4:00 p.m.Planning and Zoning Commission Thursday November 5, 2020 12:00 p.m. Bond Oversight Committee Monday November 9, 2020 9:00 a.m. Public Utilities Board Monday November 9, 2020 12:30 p.m.Traffic Safety Commission Monday November 9, 2020 3:00 p.m.Historic Landmark Commission Tuesday November 10, 2020 3:00 p.m.City Council Wednesday November 11, 2020 11:00 a.m. Economic Development Partnership Board Wednesday November 11, 2020 1:00 p.m. Development Code Review Committee Thursday November 12, 2020 1:00 p.m.Airport Advisory Board - Special Monday November 16, 2020 12:30 p.m.Parks, Recreation and Beautification Board Monday November 16, 2020 3:30 p.m.Civil Service Commission Tuesday November 17, 2020 6:30 p.m.City Council Wednesday November 18, 2020 1:00 p.m. Development Code Review Committee Wednesday November 18, 2020 4:30 p.m.Planning and Zoning Commission Thursday November 19, 2020 3:00 p.m.Committee on Persons with Disabilities Friday November 20, 2020 3:00 p.m. Board of Ethics (Special Called) Monday November 30, 2020 10:00 a.m. Council Airport Committee Monday November 30, 2020 3:00 p.m.Zoning Board of Adjustment Tuesday December 1, 2020 4:00 p.m.City Council Wednesday December 2, 2020 4:00 p.m.Planning & Zoning Commission Friday December 4, 2020 12:00 p.m.Public Art Committee Monday December 7, 2020 3:00 p.m.City Council Wednesday December 9, 2020 11:00 a.m. Economic Development Partnership Board Thursday December 10, 2020 1:00 p.m.Airport Advisory Board - Special Friday December 11, 2020 12:00 p.m. Human Services Advisory Meeting Monday December 14, 2020 9:00 a.m. Public Utilities Board Monday December 14, 2020 12:30 p.m.Parks, Recreation and Beautification Board OCTOBER NOVEMBER DECEMBER 259 Monday December 14, 2020 3:30 p.m.Zoning Board of Adjustment Wednesday December 16, 2020 9:00 a.m. Mobility Committee Wednesday December 16, 2020 5:00 p.m.P&Z Thursday December 17, 2020 5:30 p.m.City Council (Reception @ 5:30-6; CC @ 6:30p Tuesday December 22, 2020 10:00 a.m. Council Airport Committee Monday January 4, 2020 12:00 p.m.City Council (Luncheon) Tuesday January 5, 2020 3:00 p.m.City Council Regular Meeting Wednesday January 6, 2020 5:00 p.m.Planning and Zoning Commission Monday January 11, 2020 9:00 a.m.Public Utilities Board Monday January 11, 2020 3:00 p.m.Historic Landmark Commission Tuesday January 12, 2020 3:00 p.m.City Council 2nd Tuesday Session Wednesday January 13, 2020 11:00 a.m. Westpark TIRZ (Tax Increment Reinvestment #2) Thursday January 14, 2020 11:00 a.m.Airport Advisory Board - Special Thursday January 14, 2020 2:00 p.m.Library Board Thursday January 14, 2021 4:00 p.m.Development Code Review Committee Tuesday January 19, 2020 3:30 p.m.Civil Service Commission Wednesday January 20, 2020 4:00 p.m.Planning and Zoning Commission Thursday January 21, 2020 3:00 p.m.Committee on Persons with Disabilities Monday January 25, 2020 9:00 a.m.Public Utilities Board Monday January 25, 2020 3:00 p.m.Zoning Board of Adjustment Tuesday January 26, 2020 2:00 p.m.City Council 4th Tuesday Session Thursday January 28, 2020 12:00 p.m.Public Art Committee Thursday January 28, 2020 3:00 p.m. Board of Ethics Friday January 29, 2020 9:00 a.m. Community Development Advisory Cmte Friday January 29, 2020 12:00 p.m. Human Services Advisory Committee Monday February 1, 2021 9:00 a.m.Committee on the Environment Monday February 1, 2021 11:30 a.m.City Council (Luncheon) Tuesday February 2, 2021 10:00 a.m. Committee on Community Engagement Tuesday February 2, 2021 2:00 p.m.City Council Regular Meeting Thursday February 4, 2021 12:00 p.m.Bond Oversight Committee Friday February 5, 2021 12:00 p.m.Downtown Denton TIF Reinvestment Zone No 1 Monday February 8, 2021 9:00 a.m.Public Utilities Board Tuesday February 9, 2021 2:00 p.m.City Council 2nd Tuesday Session Wednesday February 10, 2021 11:00 a.m Economic Development Partnership Board Wednesday February 10, 2021 2:30 p.m.Audit Finance Committee Moday February 15, 2021 3:00 p.m.Parks, Recreation and Beautification Board Tuesday February 16, 2021 City Council Regular Meeting Wednesday February 17, 2021 9:00 a.m.Mobility Committee Wednesday February 17, 2021 2:00 p.m.Animal Shelter Advisory Committee Wednesday February 17, 2021 6:30 p.m.Planning and Zoning Commission Monday February 22, 2021 9:00 a.m.Public Utilities Board Monday February 22, 2021 3:00 p.m.Zoning Board of Adjustment Tuesday February 23, 2021 City Council 4th Tuesday Session Wednesday February 24, 2021 3:30 p.m.Civil Service Commission Thurday February 25, 2021 3:00 p.m.Board of Ethics JANUARY 2021 FEBRUARY 2021 260 261 ) 262 263 ) 264 City Council Pending Requests for Information City Council Meeting February 9, 2021 265 Work Session Process •Up to seven requests will be reviewed per meeting (one per Council Member) •Staff will introduce each request •The elected official that made the request will have up to one minute to describe and justify their request •Remaining elected officials will then have up to one minute to provide feedback and indicate their support for the use of staff time to respond to the request •Staff will respond to all requests where a consensus of Council is established Legistar ID: 20-2273 February 9, 2021 2 266 Item 1 Form a formal partnership between City of Denton and Solutions Addiction Treatment Center to help fund their new group homes. •Requestor: Council Member Armintor •Council Member Request: I would like to make a one minute pitch to Council at the next possible meeting to form a formal partnership between City of Denton and Solutions Addiction Treatment Center to help fund their new group homes --homes that save Denton money, facilitate employment, promote public health, and prevent homelessness while, most importantly, giving residents jobs and saving Denton lives and families. If there is consensus on Council to formalize this relationship and help to fund those new homes, then the exact terms of the partnership and the dollar amount of the city's investment could be worked out in an upcoming work session where Solutions can make their proposal and Council can deliberate on it. If Council agrees to let Solutions make a pitch for a public-private partnership at an upcoming work session, Solutions staff would meet with city staff in advance of the meeting so that their proposal and presentation could be included as backup in the publicly posted agenda for the work session. •Staff Information: The City has existing annual grant programs that are available to nonprofits for public facility and social services, including the Community Development Grant, Human Services Grant, and the Development Fee Grant. The established grant funding processes provide fairness and equity in distribution of available funding, reduces perceived bias, ensures the City’s ability to provide appropriate oversite for the use of tax payer supported grant funds, and improves transparency in the funding process overall. Additional information about these opportunities is provided in the AIS and Exhibit 3. If Council would like to consider separately from these grants, staff can schedule a Work Session for full discussion and direction. •Requested Format for Response: Work Session 3Legistar ID: 20-2273 February 9, 2021 267 Item 2 Evening Board and Commission meetings. •Requestor: Council Member Meltzer •Council Member Request: In order to accommodate video requirements for board and commission meetings under COVID within available resources, some boards and commissions are now required to meet during the workday. Board and commission positions are unpaid and may be filled by members of the community with full time day jobs. This is to request that staff develop options other than workday meetings that may include having less frequent and potentially longer meetings. I ask that current board and commission members be polled as to who cannot attend day meetings so if any boards or commissions can meet during the day without losing members, those can be identified. •Staff Information: Included in the backup documents, staff has provided information about the current process for board and commission meetings, staffing and other considerations if additional meetings were held during the evening hours. Also included is a list of the pre-COVID-19 meeting schedule and a list of the meetings that have been held virtually since May 2020 for reference. •Requested Format for Response: Work Session 4Legistar ID: 20-2273 February 9, 2021 268 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-187,Version:1 AGENDA CAPTION Deliberations regarding Real Property - Under Texas Government Code Section 551.072; Consultation with Attorneys - Under Texas Government Code Section 551.071. Receive information from staff, discuss, deliberate, and provide staff with direction pertaining to terms and conditions of a potential lease of City-owned property in the BBB & CRR Survey, Abstract No. 185, Denton County, Texas, and located generally south of Parkway Street, between Bolivar Street and North Elm Street, City of Denton, Texas; and the potential sale of City owned property in the Robert Beaumont Survey, Abs No 31 and the William Neill Survey, Abstract No. 971, City of Denton, Denton County, Texas, and being known as part of Lots 6 and 8, Block 1 Barb’s Addition, Denton County, Texas, near Carroll Street and Parkway Street. Consultation with the City’s attorneys regarding legal issues associated with the potential disposal, sale, and lease involving the real property described above where a public discussion of these legal matters would conflict with the duty of the City’s attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, or would jeopardize the City’s legal position in any negotiation, administrative proceeding, or potential litigation. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™269 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-232,Version:1 AGENDA CAPTION Deliberations regarding Real Property -Under Texas Government Code Section 551.072;Consultation with Attorneys - Under Texas Government Code Section 551.071. Receive information from staff,consult with the City’s attorneys,and provide direction pertaining to the status, strategy,and possible resolution of condemnation case styled City of Denton v.Robert P.Donnelly,Cause Number PR-2018-01099,pending in the Probate Court of Denton County,Texas,where discussion of these legal matters in an open meeting would conflict with the duty of the City’s attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, or otherwise compromise the City’s legal position in pending litigation. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™270 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-176,Version:1 AGENDA CAPTION Consider approval of the minutes of January 26, 2021 and February 1, 2021. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™271 CITY OF DENTON CITY COUNCIL MINUTES January 26, 2021 After determining that a quorum was present, the City Council of the City of Denton, Texas convened in a Work Session on Tuesday, January 26, 2021, at 2:02 p.m. in the Council Work Session Room at City Hall, 215 E. McKinney Street, Denton, Texas. PRESENT: Mayor Gerard Hudspeth, Mayor Pro Tem Jesse Davis and Council Members Birdia Johnson, Connie Baker, John Ryan, Deb Armintor, and Paul Meltzer ABSENT: None Also present were City Manager Todd Hileman and City Attorney Aaron Leal. Note: Mayor Gerard Hudspeth, Mayor Pro Tem Jesse Davis and Council Members Birdia Johnson, Connie Baker, John Ryan, Deb Armintor, and Paul Meltzer participated in the work session, and special meeting via video/teleconference under the provisions allowed by the Texas Government Code Section 551.127. The posted agenda noted the registration process for public participation at this virtual meeting. While citizen commentary received via the online registration process was not read, each member of the City Council received each registration as it was submitted. WORK SESSION 1. Citizen Comments on Consent Agenda Items None 2. Requests for clarification of agenda items listed on this agenda. • Clarification was requested on the following items: o None • The following items were pulled for Individual Consideration: o Council Member Meltzer: Items 1.E (21-092) and 1.G (21-141) o Council Member Armintor: Items 1.B (21-009) and 1.G (21-141) 3. Work Session Reports A. ID 20-2117 Receive a report, hold a discussion, and give staff direction regarding an update to the City of Denton’s COVID-19 response. The item was presented and discussion followed. 272 City of Denton City Council Minutes January 26, 2021 Page 2 Following discussion, there was no direction provided as the presentation was only for reporting purposes. B. ID 20-1668 Receive a report, hold a discussion, and give staff direction on the City’s Extraterritorial Jurisdiction (ETJ) and possible updates to the Interlocal Agreement with Denton County. Mayor Pro Tem Davis had a conflict of interest regarding the discussion pertaining to a proposed ILA with Denton County, and was removed from the video conference, thereby not participating in any deliberation where Denton County was mentioned or addressed. The item was presented and discussion followed. Following discussion, City Council consensus was for Staff to proceed as presented and schedule a work session/closed meeting on regulating plats within Division 1 and ensure it includes all areas with the CCN. The work session was recessed for a short break at 4:30 p.m. and reconvened at 4:40 p.m. C. ID 20-2399 Receive a report, hold a discussion, and give staff direction regarding the May 1, 2021 General Election, and any runoff election if applicable, including locations, dates, and times. The item was presented and discussion followed. With discussions turning to the use of masks by poll workers contracted by Denton County, Mayor Hudspeth ruled the topic was outside of posting and not subject to discussion. Council Member Armintor called a point of order to allow discussion on the matter. Following inquiry, City Attorney Leal advised a procedural motion to appeal would be the proper recourse. Council Member Armintor moved to appeal Mayor Hudspeth’s decision and allow discussion of face masks at polling locations. Procedural motion seconded by Council Member Meltzer. Motion failed. AYES (2): Council Members Armintor and Meltzer NAYS (5): Mayor Hudspeth, Mayor Pro Tem Davis and Council Members Johnson, Baker, and Ryan Following further discussion, City Council consensus was as follows and to present findings at a future work session: 273 City of Denton City Council Minutes January 26, 2021 Page 3 • Obtain a polling location near the University of North Texas since they had no facility available which will provide use of the facility for both early voting/election day, to be selected based on the following order: o Voertner’s (Book Store) o Denton Wesley Foundation o Osher lifelong leaning Institute @ UNT • Identify an additional early voting location in District 2. • Requirements/Steps to request more than the two (2) 12-hour days currently mandated by State law. • For the next election cycle [2022], research/provide the opportunity for voters to go to any desired “election day” location, the same as is done during the early voting period; with this process being separate from the “vote centers” process. D. ID 21-122 Receive a report, hold a discussion, and give staff direction regarding a proposed plan for the annual City Council retreat. The item was presented and discussion followed. Following discussion, City Council consensus was to have staff add process questions and include a review of the Texas Open Meetings Act as to the “1” Minute Pitch to the proposed agenda for the retreat. The work session ended at 5:46 p.m. CLOSED MEETING 1. The City Council convened into a Closed Meeting at 5:47 p.m. consistent with Chapter 551 of the Texas Government Code, as amended, or as otherwise allowed by law, as follows. A. ID 21-006 Deliberations regarding Real Property - Under Texas Government Code, Section 551.072; and Consultation with Attorneys Under Texas Government Code, Section 551.071. Receive information from staff, discuss, deliberate, and provide staff with direction pertaining to the potential disposal, exchange, sale, or acquisition of certain real property interests located in the David Hough Survey, Abstract Number 646, generally located in the 2100 block of South Mayhill Road, in the City of Denton, Denton County, Texas. Consultation with the City’s attorneys regarding legal issues associated with the potential disposal, exchange, sale, or acquisition involving the real property described above where a public discussion of these legal matters would conflict with the duty of the City’s attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas, or would jeopardize the City’s legal position in any negotiation, administrative proceeding, or potential litigation. DELIBERATED 274 City of Denton City Council Minutes January 26, 2021 Page 4 B. ID 21-108 Deliberations regarding Personnel Matters - Under Texas Government Code Section 551.074. Deliberate and discuss the evaluation, duties, discipline, dismissal, compensation, and/or contract of the Municipal Judge. DELIBERATED The closed meeting started at 5:47 p.m. and ended at 6:40 p.m. No votes or actions were taken during the closed meeting. SPECIAL CALLED MEETING After determining that a quorum was present, the City Council of the City of Denton, Texas convened in a Special Called Meeting on Tuesday, January 26, 2021, at 6:47 p.m. in the Council Work Session Room at City Hall, 215 E. McKinney Street, Denton, Texas. PRESENT: Mayor Gerard Hudspeth, Mayor Pro Tem Jesse Davis and Council Members Birdia Johnson, Connie Baker, John Ryan, Deb Armintor, and Paul Meltzer ABSENT: None Also present were City Manager Todd Hileman and City Attorney Aaron Leal. Note: Mayor Gerard Hudspeth, Mayor Pro Tem Jesse Davis and Council Members Birdia Johnson, Connie Baker, John Ryan, Deb Armintor, and Paul Meltzer participated in the work session, and special meeting via video/teleconference under the provisions allowed by the Texas Government Code Section 551.127. The posted agenda noted the registration process for public participation at this virtual meeting. While citizen commentary received via the online registration process was not read, each member of the City Council received each registration as it was submitted. 1. CONSENT AGENDA The Consent Agenda consisted of Items 1.A-G. During the Work Session held earlier in the day, Items 1.B (21-008) and 1.G (21-141) were pulled for Individual Consideration by Council Member Armintor and Items 1.E (21-092) and 1.G (21-141) were pulled for Individual Consideration by Council Member Meltzer. Council Member Ryan moved to adopt the Consent Agenda, now consisting of Items 1.A, 1.C, 1.D, and 1.F. Motion seconded by Council Member Meltzer. Motion carried. AYES (7): Mayor Hudspeth, Mayor Pro Tem Davis and Council Members Johnson, Baker, Ryan, Armintor, and Meltzer NAYS (0): None 275 City of Denton City Council Minutes January 26, 2021 Page 5 A. ID 21-101 Consider approval of the minutes of January 4, January 5, and January 12, 2021. APPROVED C. ID 21-011 Consider adoption of an ordinance approving an encroachment on easement agreement between the City of Denton and the Oncor Electric Delivery Company, LLC, relating to the construction, operation, and maintenance of public facilities ("Taylor Park Boulevard" crossing including a ten (10) foot wide sidewalk crossing, four (4) by two (2) foot RCB crossing, twenty-one (21) inch RCP crossing, eighteen (18) inch RCP crossing, eight (8) inch waterline crossing, eight (8) inch sanitary sewer crossing, and a Denton Municipal Electric line bore crossing) within Oncor’s Easement; authorizing the City Manager to execute the agreement; authorizing the expenditure of funds; and providing an effective date. "Cambridge Brook Oncor Encroachment Agreement - Mark Laird" ASSIGNED ORDINANCE NO. 21-011 D. ID 21-091 Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager, or his designee, to execute an Interlocal Cooperative Purchasing Agreement with the City of Midlothian, under the Texas Government Code, Section 791.001, to authorize City of Denton contracts for the purchase of various goods and services; authorizing the expenditure of funds therefor; and declaring an effective date (File 7590 - award an Interlocal Cooperative Purchasing Agreement with the City of Midlothian). ASSIGNED ORDINANCE NO. 21-091 F. ID 21-119 Consider approval of a resolution of the City Council of the City of Denton revising the City’s Cash Disbursements policy; and providing an effective date. ASSIGNED RESOLUTION NO. 21-119 ITEMS PULLED FOR INDIVIDUAL CONSIDERATION B. ID 21-009 Consider adoption of an ordinance of the City of Denton releasing, abandoning, and vacating a 715.20 square foot Electric Utility Easement granted to the City of Denton by James H. Jones, H.M. Burgess, Billy R. Jones, and J. Dan Harvey, recorded as Instrument No. 1978-2348 in the Deed Records of Denton County, Texas; providing for severability and an effective date. (Park 7 Addition, electric easement abandonment - Mark Laird) ASSIGNED ORDINANCE NO. 21-009 Pulled for Individual Consideration by Council Member Armintor. There were no online registrations or call-ins on the item. The item was presented and discussion followed. 276 City of Denton City Council Minutes January 26, 2021 Page 6 Following discussion, Mayor Pro Tem Davis moved to adopt the item as presented. Motion seconded by Council Member Ryan. Motion carried. AYES (6): Mayor Hudspeth, Mayor Pro Tem Davis and Council Members Johnson, Baker, Ryan, and Meltzer NAYS (1): Council Member Armintor E. ID 21-092 Consider adoption of an ordinance of the City of Denton authorizing the City Manager, or his designee, to accept the TSLAC CARES Grant Program-Cycle 2 (Grant CAR2-21007) for State Fiscal Year 2021 (Federal Award Identification #LS-246561-OLS- 20) from the Texas State Library and Archives Commission through the Institute of Museum and Library Services, in the amount of $20,929.00, for the period of April 1, 2020, through August 31, 2021; authorizing the City Manager to carry out all duties of the City pursuant to the grant; providing a savings clause; and providing an effective date. ASSIGNED ORDINANCE NO. 21-092 Pulled for Individual Consideration by Council Member Meltzer. There were no online registrations or call-ins on the item. The item was presented and discussion followed. Following discussion, Council Member Meltzer moved to adopt the item as presented. Motion seconded by Council Member Armintor. Motion carried. AYES (7): Mayor Hudspeth, Mayor Pro Tem Davis and Council Members Johnson, Baker, Ryan, Armintor, and Meltzer NAYS (0): None G. ID 21-141 Consider adoption of an ordinance approving a Settlement Agreement and Release implementing the terms of the settlement in litigation styled "Stonetown Country View, LLC v. City of Denton, Texas and Board of Adjustment for City of Denton, Texas," Cause No. 19-10653-442, pending in the 442nd Judicial District Court, Denton County, Texas, as discussed in closed session; and directing the City Manager, or his designee, and the City’s attorneys to effectuate as necessary and appropriate the terms of a Settlement Agreement and Release to effectuate this approval; and declaring an effective date. ASSIGNED ORDINANCE NO. 21-141 Pulled for Individual Consideration by Council Member Armintor and Meltzer. There were no online registrations or call-ins on the item. The item was presented and no discussion followed. 277 City of Denton City Council Minutes January 26, 2021 Page 7 Mayor Pro Tem Davis moved to adopt the item as presented. Motion seconded by Council Member Baker. Motion carried. AYES (5): Mayor Hudspeth, Mayor Pro Tem Davis and Council Members Johnson, Baker and Ryan NAYS (2): Council Members Armintor and Meltzer 2. ITEMS FOR INDIVIDUAL CONSIDERATION A. ID 20-2507 Consider adoption of an ordinance adopted concurrently with the cities of Garland, Greenville, Bryan and Denton, approving the execution by the Texas Municipal Power Agency ("Agency") of an asset purchase agreement for the sale of the Agency’s Gibbons Creek Steam Electric Station and related assets in Grimes County, Texas; approving an associated generation budget amendment; and providing an effective date. ASSIGNED ORDINANCE NO. 20-2507 There were no online registrations or call-ins on the item. The item was presented and discussion followed. Following discussion, Mayor Pro Tem Davis moved to adopt the item as presented. Motion seconded by Mayor Hudspeth. Discussion continued. Council Member Meltzer offered a friendly amendment to provide the environmental report once per year to the new buyer. Mayor Hudspeth did not accept the friendly amendment and called the vote on the item. Motion carried. AYES (5): Mayor Hudspeth, Mayor Pro Tem Davis and Council Members Johnson, Baker and Ryan NAYS (2): Council Members Armintor and Meltzer B. ID 20-1898 Consider nominations and appointments to the Downtown Denton Tax Increment Financing Reinvestment Zone No. One Board (Downtown TIRZ), including appointment of a Board Chair. APPROVED There were no online registrations or call-ins on the item The item was presented and discussion followed. 278 City of Denton City Council Minutes January 26, 2021 Page 8 Following discussion, Mayor Pro Tem Davis moved to appoint the nominees as shown in Exhibit A. Motion seconded by Council Member Ryan. Motion carried. AYES (7): Mayor Hudspeth, Mayor Pro Tem Davis and Council Members Johnson, Baker, Ryan, Armintor, and Meltzer NAYS (0): None Following discussion, Council Member Armintor moved to appoint the nominees as shown in Exhibit A. Motion seconded by Council Member Meltzer. Motion carried. AYES (6): Mayor Hudspeth, Council Members Johnson, Baker, Ryan, Armintor, and Meltzer NAYS (1): Mayor Pro Tem Davis C. ID 20-2550 Consider nominations/appointments to the City’s Economic Development Partnership Board. APPROVED There were no online registrations or call-ins on the item. The item was presented and discussion followed. Following discussion, Mayor Pro Tem Davis moved to appoint the nominees as shown in Exhibit A. Motion seconded by Council Member Ryan. Motion carried. AYES (5): Mayor Hudspeth, Mayor Pro Tem Davis and Council Members Johnson, Baker and Ryan NAYS (2): Council Members Armintor and Meltzer D. ID 21-029 Consider nominations/appointments to the City’s Boards, Commissions, and Committees: Airport Advisory Board, Animal Shelter Advisory Committee, Board of Ethics, Committee on Persons with Disabilities, Community Development Advisory Committee, Health & Building Standards Commission, Human Services Advisory Committee, Library Board, Parks, Recreation & Beautification Board, Planning & Zoning Commission, Public Art Committee, Public Utilities Board, Traffic Safety Commission, and Zoning Board of Adjustment. APPROVED There were no online registrations or call-ins on the item. There was no presentation on the item, and discussion followed. 279 City of Denton City Council Minutes January 26, 2021 Page 9 Following discussion, Council Member Armintor moved to appoint the nominees as shown in Exhibit A. Motion seconded by Council Member Baker. Motion carried. AYES (7): Mayor Hudspeth, Mayor Pro Tem Davis and Council Members Johnson, Baker, Ryan, Armintor, and Meltzer NAYS (0): None Council Members expressed items of interest. With no further business, the meeting was adjourned at 7:39 p.m. ____________________________________ ____________________________________ GERARD HUDSPETH ZOLAINA R. PARKER MAYOR DEPUTY CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON, TEXAS MINUTES APPROVED ON: ____________________________________ 3. CONCLUDING ITEMS 280 BOARD/COMMITTEE/COMMISSION SEAT STATUS & QUALIFICATION OR PREFERENCE, IF ANY Downtown Denton Tax Increment Financing Reinvestment Zone No. One Board (Downtown TIRZ) City Council Member (Unexpired Term)New Downtown Denton Tax Increment Financing Reinvestment Zone No. One Board (Downtown TIRZ) City Council Member (Full Term)Reappointment Downtown Denton Tax Increment Financing Reinvestment Zone No. One Board (Downtown TIRZ) Business Owner or Member of Denton Chamber of Commerce (Full Term) Reappointment Downtown Denton Tax Increment Financing Reinvestment Zone No. One Board (Downtown Qualified Voter (Full Term)New Downtown Denton Tax Increment Financing Reinvestment Zone No. One Board (Downtown Board Chair (One Year Term)Reappointment Downtown Denton Tax Increment Financing Reinvestment Zone No. One Board (Downtown TIRZ) Business Owner or Member of Denton Chamber of Commerce (Unexpired Term) New BOARD/COMMITTEE/COMMISSION SEAT STATUS & QUALIFICATION OR PREFERENCE, IF ANY Economic Development Partnership Board City Council Representative (Unexpired Term)New Economic Development Partnership Board Top 20 Taxpayer Representative (Unexpired Term)New BOARD/COMMITTEE/COMMISSION COUNCIL PLACE NOMINATING CCM MEMBER FIRST NAME PRESENT TERM NEW TERM STATUS & QUALIFICATION OR PREFERENCE, IF ANY Airport Advisory Board 3 Davis-3 Ed Ahrens 2018-2020 September 1, 2020 through August 31, 2022 Reappointment Animal Shelter Advisory Committee 1 Johnson-1 Charlie Hunter 2018-2020 September 1, 2020throughAugust 31, 2022 Reappointment Animal Shelter Advisory Committee 2 Baker-2 Randi Weinberg 2018-2020 - UN September 1, 2020throughAugust 31, 2022 ReappointmentQualif. 3 - City Official Board of Ethics 3 Davis-3 Don Cartwright 2018-2020 September 1, 2020throughAugust 31, 2022 ReappointmentQualif. 1 - Attorney Committee on Persons with Disabilities 3 Davis-3 Joe Rivas 2018-2020 - UN September 1, 2020through August 31, 2022 Reappointment Community Development Advisory Committee 3 Davis-3 Doray Hill Jr.2018-2020 - UN September 1, 2020through August 31, 2022 Reappointment Health & Building Standards Commission 2 Baker-2 David Mollen 2018-2020 July 1, 2020 through June 30, 2022 ReappointmentQualif. 4 - Associated w/construction, development or real estate Human Services Advisory Committee 2 Baker-2 Gretchen Busl 2018-2020 September 1, 2020 through August 31, 2022 Reappointment Human Services Advisory Committee ALL-2 Baker-2 Hannah Garcia 2018-2020 September 1, 2020 through August 31, 2022 Reappointment Library Board 3 Davis-3 Jean Greenlaw 2018-2020 - UN September 1, 2020through August 31, 2022 Reappointment Library Board 5 Armintor-5 Vicki Byrd N/A UNEXPIRED September 1, 2020 through August 31, 2022 New Parks, Recreation & Beautification 3 Davis-3 Alana Presley Taylor 2018-2020 September 1, 2020 through August 31, 2022 Reappointment Parks, Recreation & Beautification 5 Armintor-5 George Ferrie 2018-2020 September 1, 2020 through August 31, 2022 Reappointment Planning & Zoning Commission 3 Davis-3 Jason Cole 2018-2020 September 1, 2020through August 31, 2022 Reappointment Public Art Committee 3 Davis-3 Joey Liechty N/A UNEXPIREDSeptember 1, 2020throughAugust 31, 2022 New Public Utilities Board 3 Davis-3 Lee Riback N/A UNEXPIRED September 1, 2020 through August 31, 2024 New Traffic Safety Commission 1 Johnson-1 Daniel Krutka 2018-2020 September 1, 2020through August 31, 2022 Reappointment Traffic Safety Commission 2 Baker-2 Melissa Carr 2018-2020 September 1, 2020throughAugust 31, 2022 Reappointment Zoning Board of Adjustment 2 Baker-2 Amber Briggle 2018-2020 September 1, 2020through August 31, 2022 Reappointment Zoning Board of Adjustment ALL - ALT. 3 Baker-2 Kathryn (Kate) Lynass 2018-2020 - UN September 1, 2020through August 31, 2022 Reappointment EXHIBIT A BOARDS & COMMISSIONS - NOMINATIONS LIST January 26, 2021 Melissa Lenaburg Jimmy Meredith TERM Unexpired term2019-2021 Full term 2020-2022 Full term2020-2022 Full term 2020-2022 2021-2022 Unexpired term 2019-2021 APPOINTEE Connie Baker Paul Meltzer Ben Esely Eric Pruett APPOINTEE TERM Agenda item 2.D (ID 21-029) Agenda item 2.B (ID 20-1898) Agenda item 2.C (ID 20-2550) Gerad Hudspeth Tina Albert Unexpired term2019-2021 Unexpired term 2019-2021 281 CITY OF DENTON CITY COUNCIL MINUTES February 1, 2021 After determining that a quorum was present, the City Council of the City of Denton, Texas convened in a Work Session on Monday, February 1, 2021, at 11:43 a.m. in the Council Work Session Room at City Hall, 215 E. McKinney Street, Denton, Texas. PRESENT: Mayor Gerard Hudspeth, Mayor Pro Tem Jesse Davis and Council Members Birdia Johnson, Connie Baker, John Ryan, Deb Armintor, and Paul Meltzer ABSENT: None Also present were City Manager Todd Hileman and City Attorney Aaron Leal. Note: Mayor Gerard Hudspeth, Mayor Pro Tem Jesse Davis and Council Members Birdia Johnson, Connie Baker, John Ryan, Deb Armintor, and Paul Meltzer participated in the work session, and special meeting via video/teleconference under the provisions allowed by the Texas Government Code Section 551.127. The speaker registration process did not apply as the proceedings included only a Work Session with a Closed Meeting to follow; therefore, public commentary not included. WORK SESSION 1. Work Session Reports A. ID 20-2354 Receive a report and hold a discussion on the Police Department Overview. The item was presented and discussion followed. Following discussion, there was no direction provided as the item was for presentation/reporting purposes only. The work session ended at 12:40 p.m. CLOSED MEETING 1. The City Council convened into a Closed Meeting at 12:40 p.m. consistent with Chapter 551 of the Texas Government Code, as amended, or as otherwise allowed by law, as follows. A. ID 21-217 Deliberations regarding Personnel Matters - Under Texas Government Code 551.074; and Consultation with Attorneys - Under Texas Government Code 551.071. Deliberate and discuss the appointment, employment, duties, and resignation of the City Manager, including the appointment of an interim City Manager; consultation with the City’s attorneys regarding associated legal issues where public discussion associated with these 282 City of Denton City Council Minutes February 1, 2021 Page 2 legal matters would conflict with the duty of the City’s attorneys to the City of Denton and the Denton City Council under the Texas Disciplinary Rules of Professional Conduct of the State Bar of Texas DELIBERATED The closed meeting started at 12:54 p.m. and ended at 1:21 p.m. No votes or actions were taken during the closed meeting. With no further business, the closed meeting was adjourned at 1:21 p.m. ____________________________________ ____________________________________ GERARD HUDSPETH ROSA RIOS MAYOR CITY SECRETARY CITY OF DENTON, TEXAS CITY OF DENTON, TEXAS MINUTES APPROVED ON: ____________________________________ 283 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-140,Version:1 Consider adoption of an ordinance of the City of Denton ratifying and approving the execution of a contract with the Texas Department of Housing and Community Affairs (the “TDHCA Contract”)allocating to City funds for the Texas Emergency Rental Assistance Program and the Texas Eviction Diversion Program; authorizing the receipt and expenditure of funds therefor;authorizing the City Manager to execute a Memorandum of Understanding with the United Way of Denton County,Inc.providing for a subaward of the obligations and funds allocated under the TDHCA Contract;authorizing the expenditure of funds therefor;and providing an effective date. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™284 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Public Affairs and Community Development CM/ DCM/ ACM: Sara Hensley DATE: February 9, 2021 SUBJECT Consider adoption of an ordinance of the City of Denton ratifying and approving the execution of a contract with the Texas Department of Housing and Community Affairs (the “TDHCA Contract”) allocating to City funds for the Texas Emergency Rental Assistance Program and the Texas Eviction Diversion Program; authorizing the receipt and expenditure of funds therefor; authorizing the City Manager to execute a Memorandum of Understanding with the United Way of Denton County, Inc. providing for a subaward of the obligations and funds allocated under the TDHCA Contract; authorizing the expenditure of funds therefor; and providing an effective date. BACKGROUND The Texas Emergency Rental Assistance Program (TERAP) provides rental assistance to income-eligible households (up to 80% area median income) impacted by COVID-19 to help them stay housed during the pandemic and help them recover economically from the impact of the pandemic. Administered by the Texas Department of Housing and Community Affairs (TDHCA), with Community Development Block Grant CARE Act funds (CDBG-CV), the program can pay up to six months of an eligible household’s rent, including rental arrears, with at least one of those months covering a month of future rent. The program can specifically provide rental assistance to tenants who have been sued for eviction (i.e. forcible detainer action) filed against them, providing the landlord and tenant an alternative to eviction. Funded through the U.S. Department of Housing and Urban Development (HUD), this CDBG-CV program is specifically designed to help households prepare for, respond to, and recover from the impacts of COVID- 19. The Governor of the State of Texas designated TDHCA as the administrator of the state’s allocation of these funds. TDHCA has designated $105 million to eligible jurisdictions or entities through direct awards and through a competitive process for the exclusive purpose of providing emergency rental assistance for Texans. As an entitlement community with an existing COVID-19 eviction prevention program, the City of Denton (the City), has been allocated $ 187,444.13 for the TERAP pursuant to a CDBG-CV contract with the TDHCA executed January 15, 2021 (the TDHCA Contract). The program is estimated to serve approximately nineteen (19) Denton households. As a recipient of TERAP funding, the City will be required to reserve 10% of its TERAP allocation for the Texas Eviction Diversion Program (TEDP) in conjunction with one or more designated Justices of the Peace as specified by TDHCA and the Texas Office of Court Administration. TEDP helps eligible Texas tenants, who are behind on their rent due to the COVID-19 pandemic and whose landlords have initiated eviction proceedings, stay in their homes and provides landlords with an alternative to eviction. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 285 Staff collaborated with the City of Lewisville (estimated to receive and allocation of $151,833.25 of TERAP) to identify the United Way of Denton County (UWDC) as the subawardee of these funds as a continuation of the Denton County COVID-19 Relief Fund Eviction Prevention program. As the subawardee pursuant to a memorandum of understanding with the City, UWDC will be responsible for performing the City’s obligations under the TDHCA Contract, receiving referrals and providing direct assistance to eligible households as part of the TERAP, and to receive referrals from the Justice of the Peace as part of the TEDP. RECOMMENDATION Ratify and approve the TDHCA Contract, and approve the Memorandum of Understanding identifying the UWDC as the subawardee of the City’s obligations and TERAP fund allocation from the TDHCA. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Ordinance and MOU with United Way of Denton County Respectfully submitted: Dani Shaw Community Services Manager Courtney Cross Assistant Community Services Manager 286 Page 1 ORDINANCE NO. ___________ AN ORDINANCE OF THE CITY OF DENTON RATIFYING AND APPROVING THE EXECUTION OF A CONTRACT WITH THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS (THE “TDHCA CONTRACT”) ALLOCATING TO CITY FUNDS FOR THE TEXAS EMERGENCY RENTAL ASSISTANCE PROGRAM AND THE TEXAS EVICTION DIVERSION PROGRAM; AUTHORIZING THE RECEIPT AND EXPENDITURE OF FUNDS THEREFOR; AUTHORIZING THE CITY MANAGER TO EXECUTE A MEMORANDUM OF UNDERSTANDING WITH THE UNITED WAY OF DENTON COUNTY, INC. PROVIDING FOR A SUBAWARD OF THE OBLIGATIONS AND FUNDS ALLOCATED UNDER THE TDHCA CONTRACT; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, Congress passed the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act to provide much needed resources to help governments, businesses, and individuals respond to the current pandemic; and WHEREAS, funds from the CARES Act were allocated to the U.S. Department of Housing and Urban Development for State grantees to help households prepare for, respond to, and recover from the impacts of COVID-19 (“CDBG-CV funds”); and WHEREAS, HUD allocated $141,486,258 in total CDBG-CV funds to the State of Texas, administered by the Texas Department of Housing and Community Affairs (“TDHCA”); and WHEREAS, TDHCA allocated $105,000,000.00 of these funds to eligible jurisdictions or entities through direct awards and through a competitive process for the Texas Emergency Rental Assistance Program (“TERAP”) and the Texas Eviction Diversion Program (“TEDP”) for the exclusive purpose of providing emergency rental assistance for Texans; and WHEREAS, TERAP provides rental assistance to income-eligible households (up to 80% area median income) impacted by COVID-19 to help them stay housed during the pandemic and help them recover economically from the impact of the pandemic; and WHEREAS, TEDP provides rental assistance allowing Texans who have fallen behind on their rent because of the impact of COVID-19 and whose landlords have initiated eviction proceedings to stay in their homes; and WHEREAS, on January 15, 2021, the TDHCA and the City of Denton (the “City”) entered into the TDHCA Contract under which the TDHCA allocated to the City $187,444.13 in program and administrative funds for TERAP and TEDP; and WHEREAS, the City and the United Way of Denton County, Inc. (the “United Way”) desire to enter into a memorandum of understanding in the form attached hereto as Exhibit A (the “MOU”) providing for a subaward to the United Way of the City’s obligations and funds allocated under the TDHCA Contract attached to the MOU as Exhibit B; and 287 WHEREAS, the City Council of the City of Denton hereby finds that the TDHCA Contract and the MOU serve a municipal and public purpose, are in the public interest, and are of a benefit to the citizens of the City of Denton; NOW THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and recitations contained in the preamble of this Ordinance are incorporated herein by reference. SECTION 2. The execution of the TDHCA Contract is hereby ratified and approved, and the City Manager, or his designee is hereby authorized to carry out the duties and responsibilities of the City under the TDHCA Contract, including the receipt and expenditure of funds as provided for therein. SECTION 3. The City Manager, or his designee, is hereby authorized to execute the MOU with the United Way providing for a subaward of the City’s obligations and funds allocated under the TDHCA Contract and is hereby further authorized to carry out the duties and responsibilities of the City under the MOU, including the expenditure of funds as provided for therein. SECTION 4. This Ordinance shall become effective immediately upon its passage and approval. The motion to approve this Ordinance was made by __________________________ and seconded by _________________________________, the Ordinance was passed and approved by the following vote [___ - ___]: Aye Nay Abstain Absent Mayor Gerard Hudspeth: ______ ______ ______ ______ Birdia Johnson, District 1: ______ ______ ______ ______ Connie Baker, District 2: ______ ______ ______ ______ Jesse Davis, District 3: ______ ______ ______ ______ John Ryan, District 4: ______ ______ ______ ______ Deb Armintor, At Large Place 5: ______ ______ ______ ______ Paul Meltzer, At Large Place 6: ______ ______ ______ ______ PASSED AND APPROVED this the ________ day of ___________________, 2021. __________________________________ GERARD HUDSPETH, MAYOR 288 Page 3 ATTEST: ROSA RIOS, CITY SECRETARY BY: __________________________________ APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: __________________________________ Kendra Kennedy 289 2021 MEMORANDUM OF UNDERSTANDING for a SUBA WARD of CDBG-CV FUNDS for the TEXAS EMERGENCY RENTAL ASSISTANCE PROGRAM and TEXAS EVICTION DIVERSION PROGRAM The City of Denton (the ·'City .. ), a Texas home-rule municipal corporation, with its principal office at 215 East McKinney Street, Denton, Texas 7620 I, and the United Way of Denton County, Inc. (the ·'United Way''), a 50 I (c)(3) organization with an office at 1314 Teasley Lane, Denton, Texas 76205, acting by and through their duly authorized representatives, enter into this 202 1 Memorandum of Understand ing for a Su baward of CDBG-CV Funds for the Texas Emergency Rental Assistance Program and Texas Eviction Diversion Program (''MOU'') on this __ day of -------' 2021. BACKGROUND The City and'the Texas Department of Housing and Communi ty Affairs ("TDH CA '')have entered into 2020 CDBG-CV Contract Number 7020000 I 013 (the ''TDHCA Contract) for purposes of implementing the Texas Emergency Rental Assistance Program ("TERAP .. ) and to carry out the Texas Eviction Diversion Program (''TEDP'') in connection with the grant by the TDHCA to the City as a subrecipient of $187,444.13 in program and adm inistrative funds under the TDCHCA Contract. The TDHCA Contract is attached to this MOU as Exhibit B and is incorporated herein and made a part hereof for all purposes. The City and the United Way share the goal of preventing homelessness as the result of eviction of tenants who are residents of Denton, Texas. In furtherance of their shared goal, the City now wishes to enter into this MOU and agrees to make a subaward to the United Way of the City's obligations and funds granted under the TDHCA Contract, and the United Way agrees to become the City's subawardee under the TDHCA Contract, al l in accordance with the terms and conditions of this MOU. ARTICLE I RESPONSIBILITIES OF THE CITY The City of Denton agrees to the following: I. The Assistant Community Services Manager will serve as the City's key staff position to oversee this MOU. 2. During the term of this MOU, the City agrees to transfer to the United Way program and administrative funds received by the City under the TDHCA Contract up to a total amount of $187,444.13 in accordance with the procedures and requirements set forth in this MOU and subject to the requirements of the TDHCA Contract. 3. The City wi ll work with the United Way as needed in connection with the TERAP and TEDP programs. 4. The City will assist the United Way with marketing and communicating the TERAP and TEDP programs. 1 290 5. The City will provide guidance and technical support to the United Way as needed in connection with the data system and information reporting requirements of the City and the TDHCA. 6. The City will have the right to review and monitor the United Way 's compliance with the terms and conditions of the TDHCA Contract. ARTICLE II RESPONS IBILI TIES OF THE UNITED WAY The United Way agrees to the following: I. The United Way 's Director of Housing Initiatives will serve as the key staff position for United Way to oversee, implement, perform and administer the subaward by City pursuant to this MOU. 2. Unless otherwise agreed in writing by the parties, the United Way agrees perform as the subawardee under this MOU all of the City's obligations as subrecipient under the TDHCA Contract, including the implementation of the TERAP and the carrying out of the TEDP, all in accordance with the term and conditions of the TDHCA Contract. 3. The United Way will serve as fiscal administrator on behalf of the City for the programs under the TDH CA Contract. 4. The United Way agrees to perform all of its obl igations hereunder and as the subawardee of the TDHCA Contract in accordance with the Texas Emergency Rental Assistance Program (TERAP) Program Guidelines attached hereto as Exhibit A (the "TERAP Guide! ines"). 5. The United Way agrees to comply with all applicable terms and conditions required by federal and state requirements, including but not limited to those reflected in the TDHCA Contract, 2 CFR §200.332 and 2 CFR Patt 200 Appendix II, as applicable. 6. The United Way wi ll conduct and participate in an ongoing evaluation of the performance of its obligat ions under this MOU and the TDHCA Contract, including but not limited to a review of the pace of fund expenditures to ensure that program funds are disbursed as soon as administratively possible in accordance with terms and conditions of this MOU and the TDHCA Contract. As needed, the United Way wil l make course corrections in a timely manner to ensure the timely and proper petformance of its obligations under this MOU and the TDHCA Contract. 7. The United Way will collaborate with community partners as appropriate to promote the strategic distribution of funds. 8. The United Way will provide the Assistant Community Services Manager or her designee with monthly reports that include: a) budget spreadsheet reflecting the budget categories set forth at Exhibit C of the TDHCA Contract, b) performance data, and c) a funding distribution and expenditure report. 9. The United Way will submit by the 5111 of each month for the previous month its request for reimbursement along with all necessary or required supporting documentation adequate to fully justify all expenditures of program and adm inistrative fund s requested to be reimbursed hereunder. I 0. The United Way agrees to comply with all subawardee requirements, including performance reporting, as outlined in the TDHCA Contract and TERAP Guidelines .. 2 291 ll. The United Way will refund to City any sum of money which has been paid or reimbursed to the United Way by City, which City determines has resulted in an overpayment. The United Way shall make such refund within ten (I 0) calendar days after City's request. 12. The United Way will repay to the City any funds that the City at any time determines have resulted in an overpayment to the United Way or have not been spent strictly in accordance with the terms and conditions of this MOU and the TDHCA Contract during the term of this MOU or are not supported by documentation adequate to fully justify the expenditure . The United Way shall make such repayment within ten (1 0) calendar days after City's request. 13. The United Way will communicate the availability of funds and eligibility criteria to community members and nonprofit partners. 14. The United Way will receive and track all referrals for rental assistance electronically (in the Homeless Management Information System ("HMIS") or an alternative electronic tracking system acceptable to the City). 15. The United Way will enroll TERAP and TEDP clients in the electronic tracking system and track required metrics, including but not limited to: demographics (name, address, birth date, income, household size, etc.), assistance provided (amount, number of months), any additional services provided, and referrals to additional services. 16. The United Way will participate in the TEDP and will collaborate with and receive referrals from the Justice of the Peace for households whose landlords have initiated eviction proceedings. The United Way shall reserve 10% of total TDHCA Contract funding to assist households referred by the Justice of the Peace under the TEDP. The TEDP reserved funding and the TEDP assistance will be administered and provided in accordance with the TDHCA Contract and the TERAP Guidelines. ARTICLE III NOTICE Any notice or other written instrument required or permitted to be delivered under the terms of this MOU shall be deemed to have been delivered, whether actually received or not, when sent via electronic mail, hand-delivery or overnight mail service, addressed or sent to the United Way or the City, as the case may be, at the following address: CITY City of Denton, Texas Attn: City Manager 215 E. McKinney Denton, TX 7620 I Todd.Hileman@cityofdenton.com UNITED WAY United Way Attn: President and CEO 1314 Teasley Lane Denton, Texas 76205 gary@unitedwaydenton.org Either party may change its notice address by sending a notice of change of address in accordance with the provisions of this Article Ill to the other party at the above address or at the current address previously designated by such other party for notice in accordance with this Article. 3 292 ARTICLE IV NO ASSIGNMENT This MOU is solely between the parties hereto and cannot be assigned to another without the express advance written approval of the non-assigning patty. ARTICLE V MODIFICATION OF AGREEMENT No modification of this MOU shall be effective unless it is in writing and signed by both parties to the MOU. ARTICLE VI TERMINATION OF AGREEMENT Notwithstanding any other provision of this MOU, either party may terminate this MOU as provided in this Article VI. I. This MOU may be terminated by either party in connection with the material default by the other party in its performance of any of its obligations under this MOU. No such termination will be effected unless and un til the other party is given (I) written notice (in accordance with Atticle Ill herein) of the intent to terminate, specifying the default, providing not less than thirty (30) calendar days from the date of the written notice to cure the default and specifying the effective date of the termination if the default is not cured within the cure period; and (2) an opportunity to consultation with the terminating party prior to termination. 2. This MOU may be te rminated for convenience by either party hereto giving written notice to the other patty thirty (30) days in advance of the effective date of termination stated in the notice. 3. Upon the effective date of termination, the United Way shall immediately cease to perform its obligations hereunder and shall submit to City within thirty (30) days after the effective date of termination its final request for reimbursement of funds expended or disbursed in accordance with this MOU prior to the effective date of the termination. 4. Should the City subsequently contract with a third party for the continuation of services, the United Way shall cooperate with such third party by providing information necessary to ensure a smooth transition. The United Way shall turn over all documents prepared or furnished by United Way pursuant to this MOU to the City on or before the effective date of termination but may maintain copies of such documents for its records. 4 293 ARTICLE VII GOVERNING LAW AND VENUE This MOU is subject to, governed by, and shall be construed under the laws of the State of Texas. Venue of any suit or cause of action arising under this MOU shall be exclusively in Denton County, Texas. ARTICLE VIII SEVERABILITY If any provision of this MOU is found or deemed by a court of competent Jurisdiction to be invalid, or unenforceable, it shall be considered severable from the remainder of this MOU and shall not cause the remainder of th is MOU to be invalid or unenforceable. In such event, the parties shall reform this MOU to replace such stricken provision with a valid and enforceable provision which comes as close as possible to expressing the intention of the parties hereto respecting the stricken provision. ARTICLE IX TERM OF AGREEMENT To the extent allowed by state law, this MOU shall be effective as of January 15, 202 I and shall te rmina te on January I 4, 2022, unless extended by written agreement or sooner terminated because funding is no longer available or in accordance with Article VI "Termination of Agreement." ARTICLE X BINDING AGREEMENT This MOU is a binding agreement by and between the parties and enforceable against each of the patties in accordance with its terms. [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 5 294 IN WITNESS WHEREOF, the City and the United Way have executed this MOU in one or more origina l counterparts, the City acting by and through its duly-authorized City Manager, and the United Way acting by and through its duly-authorized undersigned officer on the date first written above. ATTEST: ROSA RIOS, CITY SECRETARY BY: ________________________ __ APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY ~"r CITY OF DENTON TODD HILEMAN, CITY MANAGER AY OF DENTON COUNTY, L/ ~ /«o::2./ GARY HENDERSON, PRESIDENT & CEO 6 295 THIS AGREEMENT HAS BEEN BOTH REVIEWED AND APPROVED as to financial and operational obli ations and business terms Community Services Manager Title Community Development Department Date Signed: _0--11/~z-=-v,f-/_2....:..1 __ 7 296 Exhibit A Texas Emergency Rental Assistance Program (TERAP) Program Guidelines 8 297 TEXAS EMERGENCY RENTAL ASSISTANCE PROGRAM (TERAP) A COMMUNITY DEVELOPMENT BLOCK GRANT CARES ACT (CDBG-CV) PROGRAM PROGRAM GUIDELINES REV. 01/10/2021 This document was last updated on 01/09/2021 and the updated sections appear in green font. 298 Tab le of Cont ents 1. Background ........................................................................................................................................... 3 2. Program Goals ....................................................................................................................................... 3 3. CDBG National Objective ...................................................................................................................... 3 4. Governing Requirements ...................................................................................................................... 3 5. Program Overview ................................................................................................................................ 5 6. Eligible Activities ................................................................................................................................... 6 7. Geographic Coverage and Non-duplication of Benefits ....................................................................... 7 8. Time Period of Assistance ..................................................................................................................... 8 9. Subawards ............................................................................................................................................. 8 10. Tenant Eligibility Requirements ........................................................................................................ 9 11. Appeal Procedures for Households ................................................................................................ 10 12. Income Determination and Verification ......................................................................................... 11 13. Affordable Rent Standard/ Rent Ceiling ......................................................................................... 13 14. l andlord Eligibility Requirements ................................................................................................... 14 15. Required Documentation for Application ....................................................................................... 14 16. Environmental Review .................................................................................................................... 15 17. lead Based Paint Requirements ..................................................................................................... 15 18. Affirmatively furthering fair housing .............................................................................................. 15 19. Procurement ...................................................................................... Error! Bookmark not defined. 20. Program Administration and Performance ..................................................................................... 15 21. Other Federal Cross-cutting requirements ..................................................................................... 17 22. list of Program Forms ..................................................................................................................... 17 Appendix 1: Annualized Income ................................................................................................................. 18 Appendix 2: Excluded lncome ..................................................................................................................... 19 Page 2 of 19 299 1. Background The Texas Emergency Renta l Assistance Program (TERAP) provides renta l assistance to income-eligible households impacted by COVID-19 to help them stay housed during the pandemic and help them recover economically from the impact of the pandemic. Administered by the Texas Department of Housing and Community Affairs (TDHCA), with Community Development Block Grant CARE Act funds (CDBG-CV), the program can pay up to six months of an eligible household's rent, including rental arrears, with at least one of those months covering a month of future rent. The program can specifically provide rental assistance to tenants who have been sued for eviction (i.e. forcible detainer action filed against them), providing the landlord and tenant an alternative to eviction. Funded through the U.S. Department of Housing and Urban Development (HUD), this CDBG-CV program is specifically designed to help households prepare for, respond to, and recover from the impacts of COVID-19. The Governor of the State of Texas designated TDHCA as the administrator of the state's allocation of these funds. TDHCA has designated $105 million to eligible jurisdictions or entities through direct awards and through a competitive process for the exclusive purpose of providing emergency rental assistance for Texans. These program guidelines list program requirements including tenant and landlord eligibility requirements, minimum federal administration and reporting requirements, length of assistance, maximum amounts of assistance, and maximum household income. 2. Program Goals The goal ofthe Texas Emergency Rental Assistance Program is to help stabilize low-and moderate-income Texas renters impacted by the coronavirus pandemic through the provision of up to six months of rental assistance. 3. CDBG National Objective Rental assistance payments will be available exclusively to households whose incomes are at or below 80% or less of Area Median Income (AMI). This activity qualifies under the "limited clientele" category of the CDBG national objective of benefit to low-and moderate-income persons or households (24 CFR §570.483((b )(2)(C)). 4. Governing Requirements The following regulations establish federal and state requirements. Relevant legal authority includes, but is not limited to, the following as now in effect or as amended in the future: • CARES Act (Public law No: 116-136) • Texas Government Code 2105: Administration of Block Grants • Housing and Community Development Act of 1974 (42 U.S.C. 5301 et seq) • 24 CFR Part 570 Subpart I • CDBG-CV Notice, FR-6218-N-01 • 24 CFR Part 58 • 2 CFR Part 200 • Uniform Grant Management Standards (UGMS) • Texas Department of Housing and Community Affairs 2019 Annual Action Plan, as amended • Texas Administrative Code: Title 10, Part 1, Chapters 1 and 2 Page 3 of 19 300 If state or federal statutes or regulations, or other laws, relating to the CDBG-CV funds are modified by the United States Congress, HUD, the Department, the Texas State Legislature, or the Governor, the changes may become effective immediately and may be applicable to existing contracts. If there is a conflict between the state and federal regulations, the federal regulations shall prevail. In addition, the Department reserves the right, at its sole discretion, to suspend or amend the provisions governing this program. If such an action occurs, the Department will notify interested parties. Awards are also contingent upon the Department executing a grant agreement from HUD for the CDBG CARES Act funds. Financial Management Subrecipients must demonstrate to the satisfaction of the Department that they are in compliance with the financial management requirements at 2 CFR Part 200, including the single audit requirements of 2 CFR §200.501. All Subrecipients are subject to the requirements of 10 TAC §1.403, concerning Single Audits. If a Subrecipient utilizes subawardees the Subrecipient is responsible for monitoring the subawardees financial management systems in accordance with 10 TAC §1.402. Previous Participation Review and Federal/State Debarment All entities will be subject to a Previous Participation Review by the Department, as outlined in 10 TAC §1.302. Pursuant to 24 CFR Part 5, all CDBG-CV applicants are required to verify that they and their principals, or any/all persons, contractors, consultants, businesses, subawardees, etc., that will be conducting business with the applicant as part of the rental assistance activity are not presently debarred, proposed for debarment, suspended, declared ineligible, or voluntarily excluded from participation in the covered transaction or in any proposal submitted in connection with the covered transaction. The Department will not award any CDBG-CV funds to organizations that are debarred, suspended, proposed for debarment, and declared ineligible or voluntarily excluded from participation from federal or state assisted programs, or that are proposing to partner, contract, or otherwise fund rental assistance activities through an organization that is debarred, suspended, proposed for debarment, or otherwise ineligible from participation in federally assisted programs. If an organization has a member of its governing body that has this status, the Department will allow the member to resign so that the organization can enter into a Contract with the Department. Page 4 of 19 301 5. Program Overview The following table provides an overview of eligible program components explained in detail in subsequent sections. 1Program Component 'Criterion· · · " ~ Eligible Activities Income Determination Rent Ceilings Rent Payment Administrative Costs for Grantee Tenant Certification landlord Certification Duplication of Benefits lead-based paint requirement Environmental review • Emergency Rental assistance o Tenant/landlord learn about the program and voluntarily apply. • Texas Eviction Diversion Program o Tenant/landlord are referred by Justices of the Peace after the filing of an eviction (i.e. forcible detainer) and Tenant/landlord voluntarily apply. • Zero Income to 60% of AMI -7 Self-Certification form • 60% to 80% of AMI-7 Income Verification • Considered income-eligible if: o Household has 6 or less members and is receiving SNAP, LIHEAP or SSI (for the head or co-head of household) benefits LIHEAP Medicaid. o living in rent-restricted property, has evidence of income certification on or after April1, 2020 (but within one year of the household assistance application), and self-certify that income does not exceed 80% of AMI. • Yes, assistance up to 120% of, and rent max up to 150% of, Small Area Fair Market Rent (SAFMR) or Fair Market Rent (FMR) limits (as applicable). • Units with contract over 150% SAFMR or FMR are not eligible. • Rent difference between 120% and 150% is certified to be pa id by a certified responsible party. • Up to 6 consecutive months • Includes rental arrears • At least one month must cover a month of future rent -------- • Salary and benefits • Supplies and equipment • Overhead (administration utilities, maintenance, etc.) • Transportation/mileage Required Required Prohibited; Cannot have already received six months of payment from CDBG funds or another payment method covering the same time period. For more than 3 months of CDBG-CV rental assistance on units built prior to 1978 (and that do not qualify for a federal exception), a visua l assessment must be performed. ___ ·-______ _ __ ----------·- No-TDHCA has received statewide clearance for this activity and no action is required from the program administrator. Page 5 of 19 302 6. Eligible Activities Emergency Rental Assistance To keep Texans who need assistance with rent because of the impact of COVID-19 in their homes, TERAP provides income-eligible, COVID-impacted households, with up to six months of rental assistance. Any combination of arrears, current and future rent will be available to assist the household so long as at least one month of assistance is not for arrears (is current or future rent). Current and future rent payments must be for consecutive months. Assistance can be in the form of a one-time lump-sum payment and/or scheduled payments for future rent up to six months of total assistance. Program administrators can incur the following administrative costs to deliver the emergency rental assistance program (24 CFR § 570.206(a)): salary and benefits, supplies, equipment, overhead (utilities, maintenance, etc.), and transportation and mileage. Texas Eviction Diversion Program Each TERAP contract includes the requirement that a Subrecipient participate in the Texas Eviction Diversion Program (TEDP). TEDP allows Texans who have fallen behind on their rent because of the impact of COVID-19 and whose landlords have initiated eviction proceedings, to stay in their homes. TEDP is operated in partnership with the Supreme Court of Texas, the Office of Court Administration (OCA) and local courts and provides referred income-eligible, COVID-impacted households with up to six consecutive months of rental assistance. Any combination of arrears, current and future rent will be available to assist the household so long as: • the future months of assistance are all consecutive, and • at least one month of assistance is not for arrears (is future rent) and • at least one month of rent is for rent in arrears. Assistance can be in the form of a one-time lump-sum payment and/or scheduled payments for future rent for up to six months of total assistance. All Subrecipients will be required to administer the eviction diversion emergency rental assistance activity in conjunction with one or more designated Justices of the Peace as specified by TDHCA and the OCA. In this partnership, the Supreme Court of Texas is intending to remove or seal the initiated eviction from the household's record to mitigate the secondary effects on the tenant's ability to rent housing in the future. Information on the order issued by the Court and the Court's portion of the program can be found at the OCA program website. Subrecipients whose service area contains an organization in the Texas Eviction Diversion Pilot Program may, for a time, be required to receive referrals from, , or refer households to, these pilot program providers. Ten percent of the contract amount will be allocated for the TEDP activity for a specified time. If there are limited referrals from the local courts or referrals are primarily ineligible, the Department may reallocate these funds to other Subrecipient contracts for this activity, or may allow the funds to be used for emergency rental assistance payments by the Subrecipient. If this ten percent is spent, Subrecipient may spend other contract funds on this activity without prior Department approval, but will need to accurately report these funds for the activity utilized in monthly reporting to the Department. Administrative Costs Subrecipients can incur the following administrative costs to deliver the emergency rental assistance program (per 24 CFR § 570.206(a) and UGMS): salaries and related costs, supplies, overhead (utilities, maintenance, etc.), equipment (with Department approval), transportation, and mileage. Funds requested for administration are limited up to 13 percent of the total amount of funds requested. Page 6 of 19 303 Preparation of the CDBG-CV application and staff time to attend pre-contract training are eligible pre- award administrative costs and may be reimbursed. All methods of allocating administrative costs (per 2 CFR § 200.405, 414 & 416) to the Department are allowable; however, indirect costs are allowable if the entity has an approved federal indirect cost rate or are using the de minimis rate per 2 CFR §200.414(f). In the application, subrecipients must identify each department or division that will administer activities under the grant. 7. Geographic Coverage and Duplication of Benefits A Duplication of Benefits (DOB) occurs when a program beneficiary receives assistance from multiple sources for a cumulative amount that exceeds the total need for a particular funding need. The amount of the duplication is the amount of assistance provided in excess of the need. In the case of rental assistance, a duplication of benefits would occur if a program beneficiary (either landlord or tenant) received assistance for the same mont hs of rent for the same unit. Per CDBG-CV Notice Part 111.8.9, it is the Department's responsibility to ensure that each CDBG-CV grantee provides assistance only to the extent that the rental assistance needs have not been met by another source. As a Grantee, TDHCA is required to develop and maintain adequate procedures to prevent a duplication of benefits that address (individually or collectively) each activity or program. To accomplish this TDHCA has instituted the following requirements: • Any person or entity receiving CDBG-CV assistance certifies that they have not, and will not, pursue assistance for the same period of time for the same unit and household; • Any person or entity receiving CDBG-CV assistance (including Subrecipients) must agree to repay assistance that is determined to be duplicative (this is included in both the tenant and landlord certifications); and • Prohibiting any geographic area from being covered by more than one CDBG-CV Subrecipient. Any refunds the Subrecipient receives or other program income must be returned to the Department within ten calendar days. To analyze duplication of benefits a grantee should complete the following steps: 1. Assess Need: Determine the amount of need (total cost). 2. Determine Assistance: Determine the amount of assistance that has or will be provided from all sources to pay for the cost. 3. Calculate Unmet Need: Determine the amount of assistance already provided compared to the need to determine the maximum CDBG-CV award (unmet need). 4. Document analysis: Document calculation and maintain adequate documentation justifying determination of maximum award. Example: A family that has suffered job loss due to the economic impact of the coronavirus seeks rental assistance under a CDBG-CV Emergency Payment program for 3 months of arrears payments and 2 months of current/ future rent. • Step 1: Assess Need Page 7 of 19 304 Monthly Rent= $1,000 Potential Total Need: $1,000 * 5 months= $5,000 • Step 2: Determine Assistance In the application, the applicant was asked to report if they are receiving or expecting to receive any additional or similar assistance. The applicant reported that a local faith-based organization provided $250/ month for the past three months, but that aid is no longer available. The family certified that it has not applied for assistance from any other source. • Step 3: Calculate Unmet Need Total Need= $5,000 Other Assistance= $750 ($250/ month for three months) Actual Unmet Need (Maximum Award)= $4,250 ($5,000-$750) • Step 4: Document the Analysis Maintain documentation of calculation and justification to confirm amount of unmet need. 8. Time Period of Assistance Landlords may receive financial assistance for past-due rent payments dating back to April 1, 2020. 9. Subcontractors and Subawards Subcontractors Subrecipient, in subcontracting for any performances described in this Contract, expressly understands that in entering into such subcontracts, TDHCA is in no way liable to the Subrecipient's subcontractor(s). All subcontracts must be for goods or services and paid out of administrative funds. Subcontractors must be procured in accordance with 2 CFR Part 200, UGMS, and 10 TAC §1.404. Subrecipient has the responsibility for ensuring that the performances rendered under all subcontracts are rendered so as to comply with all Contract terms and as if such performances rendered were rendered by Subrecipient. Department maintains the right to monitor and require Subrecipient's full compliance with the terms of this Contract. Subwards Subrecipient may request to the Department to enter into a subaward to a unit of local government, council of government, public housing authority, or private nonprofit organization for some or all of its program and administrative funds through a direct (non-competitive) award. The Subrecipient must fulfil all of the requirement of a pass-through entity listed in 24 CFR §200.332, and must monitor its subawardee at least once during the Contract Term. Any subaward must contain all the applicable terms and conditions required by federal and state requirements and as further reflected this Contract including but not limited to items specifically identified in this Contract, 2 CFR §200.332, and 2 CFR Part 200 Appendix II (as applicable) . Subrecipient must provide the Department with the applicable contact information for all subawards to ensure that accurate contact information is available relating to both rental assistance and eviction diversion activities to include in a list of resources for landlords/tenants. Subawardees may not further subaward funds. Before entering into a contract or other agreement with a subawardee, Subrecipient must: 1) check the Federal and State debarment and suspended lists of both the Department (all subawardees) and Texas Page 8 of 19 305 Department of Agriculture (only if the subawardee is a non-entitlement city or county) for the entity and for governing board members of subawardees; 2) ensure that the entity (if applicable) is current on its Single Audit submission to the Federal Audit Clearinghouse; 3) request a disclosure for matters under 2 CFR §200.113, 2 CFR Part 200 Appendix XII, 24 CFR Part 9, or the Fair Housing Act; and 4) provide the Department this information on the Department's form by February 15, 2021. The Subrecipient, in subawarding for any performances described in this Contract, expressly understands that in entering into such subawards, the Department is in no way liable to the Subrecipient's subawardee(s). Department's approval under this Section 17 does not constitute adoption, ratification, or acceptance of Subrecipient's or subawardee's performance hereunder. Department maintains the right to monitor and require Subrecipient's full compliance with the terms of this Contract. Department's approval under this Section 17 does not waive any right of action which may exist or which may subsequently accrue to Department under this Contract. Prohibition on Certain Funds Transfers Per the CDBG-CV Notice Part III.B.S.{c)(ii), all Subrecipients that directly or indirectly receive CDBG-CV funds are prohibited from selling, trading, or otherwise transferring all or any such portion of such funds to another such entity in exchange for any other funds, credits or non-Federal considerations, and must use such funds only for eligible activities, in this case, emergency rental assistance and eviction diversion. 10. Tenant Eligibility Requirements Regardless of whether the household is assisted with TERAP or TEDP, the tenant must certify the following in the Tenant Certification form to qualify for assistance. 0 Income Eligibility: The Household must have gross annual income at or below 80% of the Area Median Income (AMI) and the program administrator must follow the income verification guidelines in the following section to determine the household's income eligibility. 0 COVID-19 Impact: The Household must have been economically impacted by COVID-19. The household will be asked to describe the impact, but is not requested to submit documentation of such impact with their application. 0 Proof of Tenancy: Proof of tenancy is most readily established with a copy of the lease for the unit. If there is no copy of the lease provided, or no lease exists, both tenant and landlord are required to certify that the information t hey have provided on the application regarding the terms of the lease and the rent amount is true and accurate and proof of tenancy must be provided (e.g. cancelled check, money order, utility bill etc.). 0 Unit Eligibility: Rental units must be eligible. Ineligible units include those already receiving project-based assistance, public housing units, and units owned by a unit of government. 0 No Duplication of Benefits: The Household must: • Certify that they have not received assistance for the same period of time for the same unit and household, or if they do rece ive funding, that they will pay back Subrecipient within ten calendar days. • Certify that they cannot have previously received rental assistance funded with CDBG CARES funds, that would exceed 6 months in total, when combined with this assistance. 0 Truth and Accuracy: The tenant must certify to the accuracy of all they are stating. Page 9 of 19 306 Ineligible Clients • Households receiving duplicative rental assistance from any other source for the same period of time for which they are seeking assistance from the CDBG-CV program. Other sources may include but are not limited to rental assistance programs run by cities, counties, nonprofits or religious organizations. • Tenants receiving tenant-based voucher assistance, those who are in a unit receiving project- based assistance, or those who are in public housing are ineligible. Public housing authority (PHAs) properties or properties receiving federal or state rental assistance are not eligible as they are already receiving assistance to meet their rent obligations. Examples of federal rental assistance programs whose program participants are not eligible for CDBG-CV rental assistance include but are not limited to the Housing Choice Voucher program (tenant or project based), Housing Opportunities for Persons with Aids {HOPWA), and HOME Tenant-Based Rental Assistance (TBRA). 11. Appeal Procedures for Households Subrecipient must establish a written denial of service complaint procedure to address written complaints (or an oral complaint if a person with a disability requests a reasonable accommodation based on their disability} from a household or landlord. The appeal procedure is not applicable to a household if the la ndlord declines to participate in the program. If a household's denial is solely based on income eligibility, the complaint procedure would not apply, but the household may request a recertification of income eligibility based on initial documentation provided at the time of the original application. The recertification will be an analysis of the initial calculation based on the documentation received with the initial application for services and will be performed by an individual other than the person who performed the initial determination. If the recertification upholds the household's income as ineligible, the household must be notified in writing. If the household is not satisfied with the Subrecipient's decision under the complaint procedure, the household may appeal the decision in writing (or telephonically if a person with a disability requests a reasonable accommodation based on their disability} to the Department within 10 calendar days of notification of an adverse decision. Households who allege that the Subrecipient has denied all or part of a service or benefit in a manner that is unjust, violates discrimination laws, or without reasonable basis in law or fact, may request a contested hearing under Tex. Gov't Code, Chapter 2001. The hearing shall be conducted by the State Office of Administrative Hearings on behalf of the Department in the locality served by the Subrecipient, for which the procedures are further described in 10 TAC §1.13 (relating to Contested Case Hearing Procedures). If the household appeals to the Department, the Subrecipient's funds that could be pledged to that household should remain unencumbered until the Department completes the appeal process. Page 10 of 19 307 12. Income Determination and Verification To determine whether a household qualifies for the program they must have gross annual income at or below 80% of the Area Median Income (AMI). Program administrators must follow these guidelines and should complete the Household Income Certification (HIC} Form to determine a household income, unless they have a similar tool that achieves the same purpose. The household income determination process used for this program is based on HUD's Handbook 4350.3, Part 5, Income Determination, but has been modified by TDHCA to minimize barriers to income documentation recordkeeping. • A household is defined as all persons occupying the same housing unit, regardless of their relationship to each other. The occupants could consist of a single family, two or more families living together, or any other group of related or unrelated persons who share living arrangements. • Gross amount. For the types of income counted, gross amounts means income before any deductions have been taken. Annualized Gross Income Annualized Gross Income provides a "snapshot" of the household's current estimated annual income. For TERAP the household's circumstances for the most recent four weeks (or month, if monthly) are used to project future income. Please refer to the Appendix 1 for details on annualizing income. Every household must qualify under one of the following four categories of income eligibility. A list of the income types that must be excluded from consideration is provided in Appendix 2. Page 11 of 19 308 Income/Eligibility Type 1. Considered income eligible if the household has 6 or less members and is currently receiving SNAP, SSI benefits (for the head or co-head only), or UHEAP benefits 2. Considered income eligible if living in a rent-restricted property and has evidence of income certification on or after April1, 2020, but within 12 months of the CDBG application 3. Zero Income to 60% of AMI Documentation • Enrollment documentation for the eligible program, e.g. benefit letter( no further documentation is needed and an income self-certification is not needed). • An email from the source agency for LIHEAP enrollment. • A copy ofthe Property/landlord's Income Certification dated on or after April1, 2020 (within 12 months of the CDBG application) AND • Submission of the "Self-Certification of Annual Income by Beneficiary" form certifying that their income remains below 80% of AMI. • Submission of the "Self-Certification of Annual Income by Beneficiary" form certifying that their income is below 60% of AMI. 4. 60% to 80% of AMI • Income Verification as provided below. An income self-certification form is not permitted for households in this income range. Included Income o The full amount, before any payroll • Pay stub(s) covering at least most recent 4 weeks (weekly, bi-weekly) or covering most recent month (monthly, semi-monthly) deductions of wages and salaries, overtime pay, commissions, fees, tips and bonuses, (before payroll deductions), o The net income from the operation • Self-certification of a business (self-employment) o Payments in lieu of unemployment and disability compensation, worker's compensation, and severance pay, and similar payments in lieu of earnings o Actual Child Support Received o Part-time students over 18 years of age o Full-time students over 18 years of age AND Head or Co-head of household o Full-time students over 18 years of age and NOT Head or Co-head of household • Benefits statement from agency OR One month's bank statement demonstrating deposit(s) made from agency. Note: unemployment benefits should be included only for the period oftime the applicant is actually eligible to receive those benefits • Bank statements or payment log from attorney general • Bank statements or pay stub(s) covering at least most recent 4 weeks (weekly, bi-weekly) or covering most recent month (monthly, semi- monthly) • Bank statements or pay stub(s) covering at least most recent 4 weeks (weekly, bi-weekly) or covering most recent month (monthly, semi- monthly) • Proof of full-time status from institution • Do NOT count income if they can prove full-time status Page 12 of 19 309 o Social Security (not SSI), annuities, insurance policies, retirement funds, pensions, disability benefits, death benefits or other types of similar periodic receipts. Report the total amount received. o All regular pay, special pay, and allowance of a member ofthe Armed Forces except special pay for a family member who is exposed to hostile fire. Report total amount_ received. 13. Affordable Rent Standard/ Rent Ceiling • Social Security or other Award Letter; or Bank Statements • Bank statements or pay stub(s) covering at least most recent 4 weeks (weekly, bi-weekly) or covering most recent month (monthly, semi- monthly) To ensure cost reasonableness, the contract rent (the lease amount) for the unit in which the household is requesting assistance may not exceed the following limits. • The maximum amount of rental assistance (arrears, current and future months) the program will ~is set at 120% of the Small Area Fair Market Rent (SAFMR), or where no SAFMR exists, the Fair Market Rent (FMR). • The maximum amount of contract rent for the unit cannot exceed 150% of the SAFMR, or where no SAFMR exists, the FMR. If a unit's contract rent exceeds this amount, the unit and household are not eligible for assistance under the program. • If a tenant's contract rent falls between 120% and 150% of the applicable SAFMR or FMR (as applicable), the program will still be able to assist the tenant. However, an agreed upon party, either the tenant, landlord, sub recipient or other, must pay the amount of contract rent in excess of the 120% limit, or enter into a payment plan executed by both the tenant and the landlord, before the program will pay the 120% contribution. For any forward payment of rent, the household will have to pay that amount in excess of the 120% limit each month. • To find the 120% and 150% limits described above, use the Rent Limit Calculator {XLSX) found under Program Documents. Enter the zip code for the unit for which assistance is being requested. If no zip code is listed, clear the zip code cell and enter the county. Example for a housing unit with the following rent and applicable SAFMR/FMR: If: The Contract Rent= $1,300 AND SAFMR or FMR = $1,000 120% SAFMR or FMR = $1,200 150% SAFMR or FMR = $1,500 Then7: Maximum TERAP Rental Ass istance= $1,200 AND Certified Responsible Party Portion (Tenant, la ndlord, subredpient, or other) = $100 Page 13 of 19 310 14. Landlord Eligibility Requirements The landlord must complete and certify the following in the Landlord Form and Certification to qualify for assistance. 0 Proof of Tenancy: the landlord must certify the lease term, rent amount, and be able to provide proof of tenancy by: o Providing a copy of the Tenant's lease. o If no written lease is available, the landlord must provide: • Proof of Unit ownership or ability to sublease. • Evidence of payment from or benefiting Tenant for the unit dated on or after February 1, 2020 (e.g. cancelled checks or money order). 0 Documentation of missed payments: e.g. missed payment on ledger for rental arrears. 0 Unit Eligibility: Rental units must be eligible. Ineligible units include those already receiving project-based assistance, public housing units, and a property owned by a unit of government. 0 Age of Property: the Landlord is certifying to the accurate age of the property. 0 Prevention of Duplication of Benefits Certification: o Landlord cannot have received assistance from another program for the same rent for the same client and must agree to not apply in the future for the covered months. o The landlord receiving CDBG-CV assistance must agree to repay any assistance that is determined to be duplicative. Landlord will reimburse the TEDP Program Administrator within 10 business days if they receive duplicative payment for the same tenant and same time period. 0 Non-Eviction: To receive fina ncial assistance, the landlord must agree not to evict the renter for non-payment of rent associated with any of the months for which the rental assistance payment is made. In the case of TEDP assistance, the Landlord must agree to release the tenant from payment liability and waive all claims raised in the eviction case and not evict the tenant for non- payment of rent for the period covered by the assistance. 0 Fees and Penalty Forgiveness: Landlord must agree to forgive late fees/penalties for rental arrears. 0 Direct Deposit: Landlord must have a bank account with direct deposit, unless otherwise agreed to with the program administrator. 0 W-9: Submission of a W-9 form completed by the landlord. 0 Assistance cannot cover rent any earlier than April 2020. 0 Truth and Accuracy: The landlord must certify to the accuracy of all items on the certification. 15. Required Documentation for Application landlord Tenant • Copy of the executed lease with the • PersonaiiD for one household member tenant or if no written lease, required that is on the lease, or where the certification proving tenancy and ability member demonstrates occupancy to provide proof of tenancy (e.g. through another identification method cancelled check, money order, or missed such as a sublease agreement, utility bill, payment on ledger). voter registration, school registration form, etc. Page 14 of 19 311 • Documentation of missed payments (e.g. • Written lease OR certification to tenancy missed payment on ledger for rental and another method (e.g. cancelled arrears) check, money order, utility bill, etc.) • IRS W-9 • Evidence of income eligibility under other • Completed Landlord Form and qualified program OR income Certification determination documentation • Completed Tenant Application • If applicable, copy of the Property's Income Certification dated on or after • Completed Housing Income Certifjcation April1, 2020 (within 12 months of the • Completed Tenant Certifjcation CDBG application) for the applicable household 16. Environmental Review The Department has received statewide environmental clearance for this rental assistance program and program administrators will not have to perform individual environmental reviews. 17. Lead Based Paint Requirements Emergency Rental Assistance, provided for any period of time longer than 100 days for current or forward rent, is covered by the lead Safe Housing Rule (lSHR) at Title 24, Part 35 and must follow the requirements of Subpart K, whether occupied by a child less than six years or not. Rental assistance for arrears does not trigger the lSHR. The landlord Certification form requ ires the landlord to disclose the date the property was constructed. If the date disclosed is 1978 or newer, no further action is required by the Subrecipient. However, units built before 1978 and receiving four or more months of assistance are subject to this requirement. Subpart K requires that most dwelling units built prior to January 1, 1978, that receive Federal assistance undergo a visual assessment for deteriorated paint (inside, outside and all common areas) by a trained grantee or subrecipient. Visual Assessment training is free and may be taken through this link: https://apps.hud.gov/offices/lead/training/visualassessment/h00101.htm. The results of the visual assessment must be documented. Should deteriorated paint be identified, the household is not eligible to be assisted unless the administrator elects to follow the compliance steps to properly address the deteriorated painted surfaces, detailed in Subpart K. A list of exemptions to the LSHR, steps to comply with Subpart K, and associated resources can be reviewed here: https://portalapps.hud.gov/CORVID/HUDlBPAdvisor/welcome.html. 18. Affirmatively furthering fair housing All Subrecipients must affirmatively further fair housing. This includes but is not limited to marketing the program to those least likely to apply. Examples of actions of affirmative marketing are reaching out to organizations that work with persons with disabilities or marketing the program to communities that may not speak English or speak English less t han well in their preferred spoken language. 19. Program Administration and Performance Execution of Grant Documents Before accessing the CDBG-CV funds, the Subrecipient must execute and deliver a Contract to TDHCA and Page 15 of 19 312 must provide to TDHCA all executed, legally enforceable grant documents, as applicable, and any other documents reasonably requested by TDHCA in connection with these funds. One-Time Advance of Funds Per 2 CFR 200.305, the Subrecipient may request a one-time advance of funds (no more than 30 days cash need) by submitting to TDHCA a properly completed planned expenditure report that includes a request for advance funds, in a format specified by TDHCA. TDHCA shall determine the reasonableness of each amount requested and shall not make disbursement of any such payment until TDHCA has reviewed and approved such request. TDHCA may request Subrecipient to make modifications to the disbursement request and is authorized to modify the disbursement procedures set forth herein as may be necessary or advisable for compliance with the Federal Act and Program Requirements. The Subrecipient's requests for t he advance of funds shall be limited to the minimum amounts needed for effective operation of programs, and shall be timed as closely as possible to be in accord with actual cash requirements. The Subrecipient shall establish procedures to minimize the time elapsing between the transfer of funds from TDHCA to the Subrecipient and the spending of such funds and shall ensure that such funds are disbursed as soon as administratively possible. If Subrecipient subgrants any part of its award, it must have financial management systems in place to pay the subgrantee for expenses under the agreement, generally within 30 days. Performance Benchmarks, Contract Term and Deobligation The contract will be issued for a term of 12 months, subject to extension requests at the sole discretion of the Department. Contract benchmarks will be reflected in the contract with the Subrecipient that require expenditures as follows: • No later than the end of the fourth month of the contract, at least 20% of total contracted funds must be reported as expended. • No later than the end of the sixth month of the contract, at least 40% of total contracted funds must be reported as expended. • No later than the end of the ninth month of the contract, at least 70% of total contracted funds must be reported as expended. • No later than the end of the twelfth month of the contract, at least 100% of total contracted funds must be reported as expended. • Failure to achieve contract benchmarks may be cause for a partial or complete deobligation of the remaining unexpended contract funds, as determined by TDHCA on a case-by-case basis. Once General Administration expenditures reach 40% of the budgeted amount, the Department will only reimburse Subrecipient for additional General Administration costs at a rate such that the percentage of budgeted General Administration funds reimbursed is no more than 20 percentage points higher than the percentage of budgeted Emergency Payments expended. Reporting Responsibilities & Records to be maintained Subrecipients will be required to submit monthly performance reports outlining households assisted, funds expended, client demographic data and verification of grant-funded program expenses. The reports will be reviewed for accuracy, performance measures and compliance. In addition, monitoring and auditing of grantees for ongoing compliance and eligibility will be performed by the State to ensure federal requirements are being met. Subrecipients will be required to maintain client data supporting client eligibility for services provided. Data shall include, but not be limited to: how the person/household was directly impacted by the Page 16 of 19 313 coronavirus, number of persons/households served, family size, race/ethnicity and income documentation. Subrecipients will also be required to maintain client and program data relating to the Texas Eviction Diversion Program including, but not limited to: number of persons whose evictions were diverted, client eligibility and demographic information. By the 15th of each month, Subrecipient shall report: Aggregate-level data to be reported via the Housing Contract System: 1. Summary data for households served by race, ethnicity, and household income level, and other demographic data as required by HUD. 2. Number of Households that received emergency rental assistance. 3. Number of Households that received emergency rental assistance through the Eviction Diversion program. 4. Total number of households served. 5. Number of pending Households to receive assistance in the following thirty (30) days. For Texas Eviction Diversion Program: 1. Number of eligible tenants referred to the program for the previous month's activity. 2. Number of ineligible tenants referred to the program for the previous month's activity. Number of eligible landlords referred to the program for the previous month's activity. 3. Number of ineligible landlords referred to the program for the previous month's activity. 4. Number of referred tenants withdrawing from the program. 5. Number of referred landlords withdrawing from the program. Subrecipient must also report household-level data, including demographic data, as described on TDHCA's Excel Monthly Performance Report spreadsheet. 20. Other Federal Cross-cutting requirements • 24 CFR 570 Subpart K • Fair Housing Act • Federal reporting requirements-24 CFR 91.520 • Monitoring and reporting program performance-2 CFR 200.329 • Monitoring requirements-24 CFR 91.330 21. List of Program Forms Tenant Forms • Tenant Application Form • Rent Limit Calculator • Household Income Certification Landlord Form • Landlord Certification Form Page 17 of 19 • Income Self-Certification • Tenant Certification Form 314 Appendix 1: Annualized Income In general, a Subrecipient evaluating a household's income should assume t hat the household's circumstances today will continue for the next 12 months (ANNUALIZE), unless there is verifiable evidence to the contrary. For example, if a head of household is currently working for $7.00 per hour, 40 hours per week, the Subrecipient should assume that this family member will continue to perform that work for that rate and amount of time for the next year. Thus, estimated earnings will be $7.00 per hour multiplied by 2,080 hours (40 hours per week for 52 weeks of the yea r), or $14,560 per year. This method should be used even when it is not clear that the type of income received currently will continue in the coming year. For example, assume a family member has been receiving unemployment benefits of $100 per month for 16 weeks at the time of income certification. It is unlikely that the family member will continue on unemployment for another 52 weeks. However, because it is not known whether or when the family member will find employment, the Subrecipient should use the current circumstances to anticipate annual (gross) income. Income would therefore be calculated as follows: • $100 per week x 52 weeks, or $5,200. The exception to this ru le is when documentation is provided that current circumstances are known to be time limited or about to change. For example, an employer might report that an employee current ly makes $7.50 an hour, but a negotiated union contract will increase this amount to $8.25 an hour eight weeks from the date of assistance. In such cases, income can be calcu lated based on t he information provided. In this example, the calculation would be as follows: • $7.50/hour x 40 hours/week x 8 weeks = $2,400 • $8.25/hour x 40 hours/week x 44 weeks (remaining weeks in the year) = $14,520 • $2,400 + $14,520 = $16,920=Anticipated and Annualized Gross Income from that household member. Methods to annualize for part-time and full-time gross income Weekly pay: 4 pays stubs: Add the four gross amounts of each stub and divide by four to give you the weekly average. Multiply the weekly average by 52 to arrive at the gross annualized income. Bi-weekly (every two weeks) pay: 2 pay stubs: Add the two gross amounts of each stub and divide by two to give you the bi-weekly average. Multiply the bi-weekly average by 26 to arrive at the gross annualized income. Semi-monthly (twice per month) pay: 2 pay stubs: Add the two gross amounts of each stub and divide by two to give you the semi-monthly average. Multiply the semi-monthly average by 24 to arrive at the gross annualized income. Monthly pay: One pay stub: Multiply gross amount by 12 to arrive at the gross annualized income. Irregular pay: Use a reasonable, consistent method to arrive at the gross annualized income. Page 18 of 19 315 Appendix 2: Excluded Income The calculation of annual income shall not include the following: A. Income from Children, which is income from the employment of children (including foster children) under the age of 18 years. B. Payments Received for the Care of Foster Children, including foster adults (usually persons with disabilities, unrelated to the family, who are unable to live alone). C. Lump-Sum Payments, including additions to family assets, such as inheritances, insurance payments (e.g., health and accident insurance, and worker's compensation), capital gains and settlement for personal or property losses [except as provided]. D. Reimbursement for Medical Costs, including all payments received by the family that are specifically for, or in reimbursement of, medical expenses for any family member. E. Live-in Aide, including the income of a live-in aide employed because of a medical condition or disability of a family member. A live-in aide is determined to be essential to the care and well-being of the person, not obligated for the support of the person, and would not be living in the unit except to provide the necessary supportive services. F. Education Assistance, including the full amount of educational scholarships paid directly to the student or to the educational institution, and Government funds paid to a veteran for tuition fees, books, equipment, materials, supplies, transportation and miscellaneous personal expenses of the student. Any amount of such scholarship or payment to a veteran not used for the above purposes that is available for subsistence is to be included in income. G. Government Programs, including the following: Amounts received under training programs funded by HUD and earnings and benefits from participation in qualifying State or local employment training programs {including training programs not affiliated with a local government.) Amounts received by a disabled person that are disregarded for a limited time for purposes of Supplemental Security Income (SSI) eligibility and benefits, because they are set aside for use under a Plan to Attain Self-Sufficiency (PASS). Amounts received by a participant in other publicly-assisted programs, which are specifically for or in reimbursement of out-of-pocket expenses incurred (special equipment, clothing, transportation, child care, etc.) and made solely to allow participation in a specific program. Amounts specifically excluded by any other Federal statue from consideration as income for purposes of determining eligibility or benefits under a category of assistance programs that includes assistance under the U.S. Housing Act of 1937. Amounts paid by a State agency to a family with a member who has developmental disability and is living at home to offset the cost of services and equipment needed to keep the developmentally disabled family member living at home. H. Temporary Income, considered temporary, nonrecurring or sporadic in nature (including gifts). I. Income of Full-Time Students, earnings in excess of $480 for each full-time student 18 years old or older attending school or vocational training (excluding the head of household and spouse). J. Property Tax Refunds, including amounts received by the family in the form of refunds or rebates under State or local law for property taxes paid on the dwelling of the unit. K. Adoption Assistance Payments, in excess of $480 per adopted child. Page 19 of 19 316 Exhibit B TDHCA Contract 9 317 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC23584 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS FY2020 COMMUNITY DEVELOPMENT BLOCK GRANT Coronavirus Aid, Relief, and Economic Security Act (11CDBG CARES" or 11CDBG-CV") Texas Emergency Rental Assistance Program ("TERAP") and Texas Eviction Diversion Program (11TEDP") CONTRACT NO. 70200001013 CFDA: 14.228 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM Awarding Federal Agency: U.S. Department of Housing and Urban Development Federal Award Number(s): B-20-DW-48-0001 Federal Award Year: 2020 Pass Through Entity: Texas Department of Housing and Community Affairs HUD Entity Type: Subrecipient Unique Entity Identifier Number: 071380190 SECTION 1. PARTIES TO THE CONTRACT This 2020 CDBG-CV Contract Number 70200001013 ("Contract") is made and entered into by and between the Texas Department of Housing and Community Affairs, a public and official of the State ofTexas, ("Department" or "TDHCA") and City of Denton, a political subdivision of the State of Texas ("Subrecipient") hereinafter, collectively, the "Parties". SECTION 2. CONTRACT TERM This Contract shall commence on January 15, 2021, and shall terminate on January 14, 2022, unless extended by written agreement or terminated earlier ("Contract Term"). SECTION 3. SUBRECIPIENT PERFORMANCE. SCHEDULE. AND SERVICE AREA A. Purpose. Subrecipient shall utilize federal CDBG-CV funds to implement a Texas Emergency Rental Assistance Program ("TERAP") and carry out the Texas Eviction Diversion Program ("TEDP") as further permitted herein and as administered by the Department. B. Program Design. Generally, Subrecipient shall utilize CDBG-CV funds to provide rental assistance to income-eligible Households economically impacted by the Coronavirus Disease 2019 ("COVID-19") to help them stay housed during the pandemic by paying for up to six months of rent, including rental arrears, with at least one of those months covering a current or future month of rent. Current and future months of rent must be consecutive. C. TEDP 1. TEDP Activity. i. Subrecipient must participate in TEDP. TEDP allows Texans who have fallen behind on their rent because of the impact of COVID-19 and whose landlords have initiated eviction proceedings, to stay in their homes. TEDP operates in partnership with the Supreme Court of Texas, the Office of Court Administration ("OCA"), and local courts and provides referred income-eligible Households economically impacted by COVID-19 with up to six months of rental assistance and an alternative to eviction. ii. Subrecipient is required to administer the eviction diversion emergency rental assistance activity in conjunction with one or more designated Justices of the Peace as specified by TDHCA and the OCA and listed on their websites. Page 1 of 32 318 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC23584 2. Confidential Information. In this partnership with OCA, the Department, and the Supreme Court of Texas, Subrecipient will make all court records, files, and information, relating to the eviction confidential to mitigate the secondary effects on the Household's ability to rent housing in the future. Visit the Court's website at http:/ /www.txcourts.gov/programs-services/eviction-diversion- program/. 3. Allocation. Ten percent (10%) of the contract amount is allocated for the TEDP activity. If this ten percent (10%) is spent, Subrecipient may spend other funds under this Contract on TEDP without prior Department approval, but will need to accurately report these funds for this activity utilized in the monthly reporting to the Department. 4. Deobligation. If there are limited referrals from the local courts or referrals are primarily ineligible, the Department may in its sole but reasonable written authority deobligate all or a portion of these funds, or may allow the funds to be used for emergency rental assistance payments by the Subrecipient, on or after the six-month expenditure benchmark. 5. Security and Utility Deposits. If the landlord refuses to participate in TEDP, Subrecipient may transfer the Household to the TERAP. If Subrecipient transfers the Household to the TERAP, TERAP funds may also be used for one month's security and utility deposit(s). Subrecipient may not pay a utility deposit to a public utility company that it or an affiliate owns or controls, or that another unit of government or affiliate of local government owns or controls without prior written permission from the Department. If these deposits are refundable, the Subrecipient must require the landlord or the utility company to return the funds to the Subrecipient upon the Household's departure from the Unit. 6. Intentionally Deleted. D. Program Requirements. Subrecipient must comply with the all applicable statutes, regulations, and U.S. Department of Housing and Urban Development ("HUD") guidance, including, but not limited to the following: the Coronavirus Aid, Relief, and Economic Security Act (Public Law 116-136) ("CARES Act"); Chapter 2105 of the Texas Government Code; Administration of Block Grants, Housing and Community Development Act of 1974, as amended and codified at 42 U.S.C. § 5301; the Federal CDBG Regulations, found at Title 24 Code of Federal Regulations (CFR) Subpart I; and the CDBG-CV notice found at FR-6218-N-01 ("Notice") and FAQs: Program Rules, Waivers, and Alternative Requirements Under the CARES Act for CDBG-CV Grants, FY 2019 and 2020 CDBG Grants, and for Other Formula Programs"); 24 CFR Parts 58, and 75; 2 CFR Part 200, Uniform Grant Management Standards (UGMS), Texas Department of Housing and Community Affairs 2019 Annual Action Plan, as amended, the Department's CDBG-CV TERAP Program Guidelines ("Program Guidelines") and Chapters 1 and 2 of Title 10, Part 1 of the Texas Administrative Code. Subrecipient further agrees to comply with the Certification Regarding Lobbying for Contracts, Grants, Loans, and Cooperative Agreements attached hereto as Addendum A. Certification Regarding Drug-Free Workplace Requirements attached hereto as Addendum B, Certification Regarding Debarment, Suspension and Other Responsibility Matter attached hereto as Addendum C, the Contract Benchmarks attached hereto as Exhibit A; the Performance Statement and Benchmarks attached hereto as Exhibit B; the Budget attached hereto as Exhibit C; all such addendums and exhibits incorporated herein for all relevant purposes; the assurances, certifications, and all other statements made by Subrecipient in its application for CDBG- CV, as defined in Section 4, funding under this Contract; and with all other terms, provisions, and requirements herein set forth. All such addendums and exhibits are incorporated herein for all relevant purposes. E. Service Area. Subrecipient's service area consists of: City of Denton, TX. Page 2 of 32 319 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC235B4 F. Performance. The Subrecipient shall perform all activities in accordance with the Program Requirements in Section 3 D of this Contract "Program Requirements", "Contract Benchmarks" attached hereto as Exhibit A and incorporated herein for all relevant purposes; the "Performance Statement and Benchmarks"" attached hereto as Exhibit B and incorporated herein for all relevant purposes; the "Budget" attached hereto as Exhibit C and incorporated herein for all re levant purposes; the "Certification Regarding Lobbying for Contracts, Grants, Loans and Cooperative Agreements" attached hereto as Addendum A and incorporated herein for all relevant purposes; Certification Regarding Drug-Free Workplace Requirements attached hereto as Addendum B, the Certification Regarding Debarment, Suspension and Other Responsibility Matter attached hereto as Addendum C, the assurances, certifications, and all other statements made by the Subrecipient in its application for the activity funded under this Contract; and with all other terms, provisions, and requirements set forth in this Contract. The Subrecipient shall ensure that the persons to benefit from the activities described in the "Performance Statement and Benchmarks" attached as Exhibit B to this Contract are receiving the service or a benefit and activities for t he Contract obligations to be fulfilled and before submitting the "Project Completion Report", as described in the Program Guidelines to TDHCA. G. Implementation Schedule. All funds must be fully expended within the Contract Term and must be expended at a reasonable rate acceptable to the Department and as indicated in the "Contract Benchmarks" and "Budget" attached hereto as Exhibits A and C. As further detailed in Exhibits A and C, once General Administration expenditures reach 40% of the budgeted amount, the Department will only reimburse Subrecipient for additional General Administration costs at a rate such that the percentage of budgeted General Administration funds reimbursed is no more than 20 percentage points higher than the percentage of budgeted Emergency Payments expended. H. Income and Household Qualification. 1. Definitions. For purposes of this Contract, the following definitions apply: i. "Household" or "Households" is defined as all persons occupying the same housing unit, regardless of their relationship to each other. The occupants could consist of a single family, two or more families living together, or any other group of related or unrelated persons who share living arrangements. Live-in aides are not part of the Household. i. "Gross Annual Income" is defined as annual income before any deductions have been taken. 2. Tenant Certification. The Household must complete a tenant certification form, as described in the Program Guidelines. 3. Statements of Economic Impact. Subrecipient must collect statements from Households attesting to having been economically impacted by COVID-19 such as disaster related unemployment, lost wages, or increased Household costs. 4. Household Income Certification. Unless otherwise noted, Subrecipient must complete a household income certification form ("HIC") or a similar tool, as described in the Program Guidelines. 5. Household income. Household income is based on Part 5 of HUD's Handbook 4350.3, as modified for TERAP and TEDP and defined in the Department's CDBG-CV TERAP Program Guidelines found here: https://www.tdhca.state.tx.us/pdf/covid19/cdbg/TERAP-Program-Guidelines.pdf 6. Household Qualifications. Households can qualify as follows: Page 3 of 32 320 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC235B4 i. Subrecipient is not required to further determine Household income if the Household consists of 6 or fewer individuals and signs a self-certification that its income does not currently exceed 80% of HUD's Area Median Income ("AMI"), and the Household provides documentation that it is currently receiving benefits from Supplemental Security Income ("SSI") for the Head or Co-Head of household" Low-Income Energy Assistance Program ("LIHEAP"), or the Supplemental Nutrition Program ("SNAP"). ii. If the Household resides in a development that is a property whose rent limit is capped by HUD, the Department of Agriculture or the Department, the landlord may provide documentation that an income certification was done pursuant to 24 CFR Part 5 on or after April 1, 2020, but must be within twelve months of the CDBG-CV application for assistance, and the residing Household's income does not exceed 80% of HUD's AMI. In this circumstance, after reviewing the landlord's documentation and receiving a certification from the Household that its income is still under HUD's 80% AMI, Subrecipient is not required to further determine Household income. iii. If income is from 0% to 60% AMI, a Household self-certification of income is required. iv. For Household income 60% to 80% of AMI, see page 11 of the Program Guidelines. For TERAP, Subrecipient must qualify all Households using the 4350.5 modified income qualification process explained on the Program Guidelines. 7. Duplication of Benefits. Under no circumstances shall a Household or landlord receive a duplication of benefits ("DOS"). A DOS occurs when a beneficiary receives assistance from multiple sources for the same purpose, and the total assistance received for that purpose is more than the total need for assistance. Any excess from a DOB must be returned to the Department within 10 (ten) days. 8. Subaward Agreements. This subsection H of Section 3 of the Contract must be incorporated into any and all subaward agreements. SECTION 4. DEPARTMENT FINANCIAL OBLIGATIONS A. Financial Obligatjons. In consideration of Subrecipient's satisfactory performance of this Contract, Department shall reimburse the actual allowable costs incurred by Subrecipient in an amount up to $187,444.13 and in accordance with the terms of this Contract. B. Ayai!abi!ity of Funds. Department's obligations under this Contract are contingent upon the actual receipt and availability by the Department of adequate CDBG-CV funds from the U.S. Department of Housing and Urban Development ("HUD"). If sufficient funds are not available to make payments under this Contract, Department shall notify Subrecipient in writing within a reasonable time after such fact is determined. Department shall then terminate this Contract, and will not be liable for the failure to make any payment to Subrecipient under this Contract. Department acknowledges that it has received obligations from those sources which, if paid, will be sufficient to pay the allowable costs incurred by Subrecipient under this Contract. C. Ineligible Costs. Department shall not be liable to Subrecipient for certain costs, including but not limited to costs which: 1. have been reimbursed to Subrecipient or are subject to reimbursement to Subrecipient by any source other than Department; 2. are not allowable costs, as set forth in the CDBG-CV Notice and the CARES Act and in Section 8 of this Contract; Page 4 of 32 321 DocuSign Envelope 10: BAFCF163-1016-46F4-8664-88542AC23584 3. are not strictly in accordance with the terms of this Contract, including the addendums and exhibits attached hereto; 4. have not been reported to Department within forty-five (45) calendar days following termination of this Contract; 5. are not used to prevent, prepare for, or respond to the Coronavirus Disease 2019 pandemic "COVID-19"}; or 6. are not incurred during the Contract Term, except for rental arrears payments between April 1, 2020, and January 14, 2021, and eligible pre-award administrative costs incurred after April 1, 2020, as further detailed in Section 5 C of this Contract. D. Deobligation of Funds. Failure to meet an expenditure benchmark as reported in the Monthly Expenditure and Performance Report as identified in Exhibit A, Contract Benchmarks, may result in the Department (in its sole discretion) deobligating the unreported amount of expended funds for the benchmark and deobligating an equivalent proportion of administrative funds. Funds obligated to specific landlords or utility providers by July 31, 2021, but not paid to those landlords or utility providers may be reobligated by the Subrecipient in accordance with the terms of this Contract. SECTION 5. PAYMENT/ CASH BALANCES A. One-Time Request for Advance of Funds. 1. Per 2 CFR 200.305, the Subrecipient may request a one-time advance of funds (no more than 30 days cash need) by submitting to TDHCA a properly completed planned expenditure report that includes a request for advance funds, in a format specified by TDHCA. TDHCA shall determine the reasonableness of each amount requested and shall not make disbursement of any such payment until TDHCA has reviewed and approved such request. TDHCA may request Subrecipient to make modifications to the disbursement request and is authorized to modify the disbursement procedures set forth herein as may be necessary or advisable for compliance with Program Requirements. 2. Subrecipient's requests for the advance of funds shall be limited to the minimum amounts needed for effective operation of programs, and shall be timed as closely as possible to be in accord with actual cash requirements. Subrecipient shall establish procedures to minimize the time elapsing between the transfer of funds from TDHCA to the Subrecipient and the spending of such funds and shall ensure that such funds are disbursed as soon as administratively possible. If Subrecipient subcontracts or subawardees any part of its award, it must have financial management systems in place to pay the subcontractor or subawardee for expenses under the agreement, generally within thirty (30) days. B. Disbursement Procedures. Subrecipient shall establish procedures to minimize the time between the disbursement of CDBG-CVD funds from Department to Subrecipient and the expenditure of such funds by Subrecipient. C. Allowable Expenses. All funds paid to Subrecipient pursuant to this Contract are for the payment of allowable expenditures to be used for the exclusive benefit of low-to moderate-income Households with Gross Annual Income at or below 80 percent of HUD's AMI, applicable per each Household's size and zip code and county of residence. Subrecipient may incur administrative costs to deliver emergency assistance: salaries and related costs; supplies and equipment (with Department approval and as limited by 10 TAC §1.10}, overhead (utilities, maintenance, etc.), transportation, and mileage. Preparation of the CDBG-CV application and staff time to attend or participate in pre-contract training are eligible pre-award administrative costs. Subrecipient may incur costs for activities associated with the closeout of the Contract for a period not to exceed forty-five (45) calendar days from the end of the Contract Term. Page S of 32 322 DocuSign Envelope ID: BAFCF163-1016-46F4-B664-B8542.AC235B4 D. Refund. Subrecipient shall refund to Department any sum of money which has been paid to Subrecipient by Department, which Department determines has resulted in an overpayment. Subrecipient shall make such refund within ten (10) calendar days after the Department's request. E. Reoavment. Subrecipient shall repay funds that the Department determines has not been spent strictly in accordance with the terms of this Contract and by which the period of obligation has expired. Subrecipient shall make such repayment within ten (10) calendar days after the Department's request. SECTION 6. ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES AND AUDIT REQUIREMENTS A. Administrative Requirements and Cost Principles. Except as expressly modified by law or the terms of this Contract, Subrecipient shall comply with the cost principles and uniform administrative requirements set forth in the state Uniform Grant Management Standards, 34 TAC §20.421 in effect on the effective date of this Contract ("UGMS"). B. Indirect Cost Rate. Subrecipient has an approved indirect cost rate of 0%. Indirect costs are only allowable if Subrecipient has an approved federal indirect cost rate or is using the de minims rate on all its federal contracts per 2 CFR §200.414(f). C. Financial Management and Audit Requirements. Subrecipient must demonstrate to the satisfaction of the Department that they are in compliance with the financia l management requirements at 2 CFR Part 200, including t he single audit requirements of 2 CFR §200.501. Audit requirements are set forth in the Texas Single Audit Act and 2 CFR Part 200, Subpart F. The expenditure threshold requiring an audit is $750,000 of Federal and/or state funds. If an audit is required under the Texas State Single Audit Act, this audit must be submitted to the Department pursuant to 10 TAC §1.403, but CDBG-CV funds may not be used to pay for the audit. Subawardees of the Subrecipient must comply with financial management systems in accordance with 10 TAC §1.402. Subrecipient shall ensure compliance by subawardee, if applicable. D. Audit Review. Department reserves the right to conduct additional audits of funds received and performances rendered under this Contract. Subrecipient agrees to permit Department, or its authorized representative, to audit Subrecipient's records and to obtain any documents, materials, or information necessary to facilitate such audit. E. Subcontracts and Subawards. The Subrecipient shall include language in any subcontract or subaward that provides the Department the ability to directly review, monitor, and/or audit the operational and financial performance and/or records of work performed under this Contract. F. Certification Form. For any fiscal year ending within or one year after the Contract Term, Subrecipient must submit an "Audit Certification Form" (available from the Department) within sixty (60) days after the Subrecipient's fiscal year end. If the Subrecipient's Single Audit is required by 2 CFR Part 200, Subpart F, the report must be submitted to the Federal Audit Clearinghouse ("FAC") the earlier of thirty (30) calendar days after receipt of the auditor's report or nine (9) months after the end of its respective fiscal year. As noted in 10 TAC §1.403(f), Subrecipient is required to submit a notification to Department within five (5) business days of submission to the FAC. Along with the notice, indicate if the auditor issued a management letter. If there is a management letter, a copy of the letter must be sent to the Department. Both the notice and the copy of the management letter, if applicable, must be submitted by electronic mail to: SAandACF@tdhca.state.tx.us SECTION 7. TERMINATION AND SUSPENSION Page 6 of 32 323 DocuSign Envelope 10: BAFCF163-1016-46F4-8664-B8542AC235B4 A. Termination. Upon adequate notice, and as per 10 TAC §2.202, Department may terminate this Contract, in whole or in part, at any time Department determines that there is cause for termination. Cause for termination includes, but is not limited to, Subrecipient's failure to comply with any term of this Contract or reasonable belief that Subrecipient cannot or will not comply with the requirements of this Contract. If the Department determines that a Subrecipient has failed to comply with the terms of the Contract, or to provide services that meet appropriate standards, goals, or other requirements established by the Department, the Department will notify Subrecipient of the deficiencies to be corrected and may require the deficiencies be corrected. Repeated instances of not meeting the Contract Benchmarks as reflected in Exhibit A will be good cause to terminate the Contract, in the Department's sole discretion. B. Suspension. As per 10 TAC §2.202, Department may suspend this Contract, in whole or in part, at any time Department determines that there is cause for suspension. Nothing in this Section 7 shall be construed to limit Department's authority to withhold payment and immediately suspend this Contract if Department identifies possible instances of fraud, abuse, waste, fiscal mismanagement, or other deficiencies in Subrecipient's performance. C. liability. Department shall not be liable for any costs incurred by Subrecipient after termination or during suspension of this Contract. D. Withholding of Payment. Notwithstanding any exercise by Department of its right of termination or suspension, Subrecipient shall not be relieved of any liability to Department for damages by virtue of any breach of this Contract by Subrecipient. Department may withhold any payment due to Subrecipient until such time as the exact amount of damages due to Department or other liability is agreed upon or is otherwise determined in writing between the Parties. SECTION 8. PROHIBITED USE OF FUNDS A. Budget. Subrecipient may not use funds under this Contract for any activity or in any manner not reflected in Exhibit C, Budget. B. Rental Payment Restrictions. Subrecipient may not use funds under this Contract to assist a Household whose contract rent in its dwelling unit exceeds 150% of the Small Area Fair Market Rent ("SAFMR"), or where no SAFMR exists, the Fair Market Rent ("FMR"), and may not make a payment for a dwelling unit in an amount greater than 120% of the SAFMR or FMR. A Subrecipient may assist a Household with nonfederal funds for the rental arrears for the monthly amount between 120% and 150% of Small Area Fair Market Rent or Fair Market Rent (if Small Area Fair Market Rent is not published in the jurisdiction). C. Project-Based and Tenant-Based Rental Assistance. Subrecipient may not use funds under this Contract to assist a Household whose dwelling unit also has project-based rental assistance, whose development uses project-based operating assistance, or where the tenant has a tenant-based voucher. D. Public Housing Unit. Subrecipient may not use funds under this Contract to assist a Household whose dwelling unit is a public housing unit. E. Assistance Period. Subrecipient may not assist a Household with funds under this Contract, for more than a total of six (G) months (rental arrears payment + current or future monthly rental payment). F. Local Government Owned Property. Subrecipient may not use funds under this Contract to assist a Household whose dwelling unit is owned by a Unit of Local Government (as that term is defined in Page 7 of 32 324 DocuSign Envelope 10: BAFCF163-1016-46F4-8664-B8542AC235B4 UGMS), unless it has prior written permission from the Department (to be reviewed on a case by case basis). SECTION 9. RECORDKEEPING REQUIREMENTS A. General. For purposes of compliance, all associated documentation must be readily available, whether stored electronically or hard copy to justify compliance with program rules and regulations. Subrecipient shall maintain fiscal and programmatic records and supporting documentation for all expenditures made under this Contract in accordance with the UGMS. B. Open Records. Subrecipient acknowledges that all information collected, assembled, or maintained by Subrecipient pertaining to this Contract, except records made confidential by law, is subject to the Texas Public Information Act (Chapter 552 of Texas Government Code) and must provide citizens, public agencies, and other interested parties with reasonable access to all records pertaining to this Contract subject to and in accordance with the Texas Public Information Act. C. Access to Records. Subrecipient shall give HUD, the U.S. General Accounting Office, the Texas Comptroller, the State Auditor's Office, and Department, or any of their duly authorized representatives, access to and t he right to examine and copy, on or off the premises of Subrecipient, all records pertaining to this Contract. Such right to access shall continue as long as the records are retained by Subrecipient. Subrecipient agrees to cooperate with any examination conducted pursuant to this Subsection C. D. Record Retention. Subrecipient agrees to maintain such records in an accessible location for the greater of: (i) the time period described in the state Uniform Grant Management Standards, Chapter Ill, "State Uniform Administrative Requirements for Grants and Cooperative Agreements", Subpart C- Post Award Requirements, §_.42; (ii) if notified by the Department in writing, the date that the final audit is accepted with all audit issues resolved to the Department's satisfaction; (iii) if any litigation claim, negotiation, inspection, or other action has started before the expiration of the required retention period records must be retained until completion of the action and resolution of all issues which arise under it; (iv) a date consistent with any other period required by the performed activity reflected in federal or state law or regulation. Upon termination of this Contract, all records are property of the Department. E. CARES Act Funds. Subrecipient shall track, account for, and report on this CDBG-CV Act funding separate from other funds. Upon request, Subrecipient shall report to the Department to extent these funds were used as match for other programs. SECTION 10. REPORTING REQUIREMENTS A. General. Subrecipient shall submit to Department such reports on the performance of this Contract as may be required by Department including, but not limited to, the reports specified in this Section. B. Expenditure and Performance Reports. By the fifteenth (15th) day of each month, Subrecipient shall electronically subm it an Expenditure and Performance Report to the Department of all expenditures of funds and clients served under this Contract during the previous month (including a partial month), regardless of whether Subrecipient makes a fund request. Subrecipient must file a monthly Expenditure and Performance Report in a timely manner, prior to accessing funds. The failure of Subrecipient to provide a full accounting of all funds expended under this Contract shall result in the automatic suspension of the ability of Subrecipient to request reimbursements and shall be identified as a finding in any monitoring review. Page 8 of 32 325 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC235B4 C. Final Reports. Subrecipient shall submit a final Expenditure and Performance Report to the Department after the end of the Contract Term. Subrecipient must file a final Expenditure and Performance Report within forty-five (45) calendar days after the end of the Contract. D. lnventorv. Subrecipient shall submit to Department no later than forty five (45) calendar days after the end of the Contract Term an inventory of all vehicles, and equipment (as defined federally and by UGMS) with a unit acquisition cost of $5,000.00 or more and/or a useful life of more than one year, if purchased in whole or in part with funds received under this Contract. The inventory shall reflect the equipment on hand as of the last day of the Contract Term Upon the termination of this Contract, Department may transfer title to any equipment to the Department or to any other entity receiving federal funds from the Department. E. Default. If Subrecipient fails to submit within forty-five (45) calendar days of its due date, any report or response required by this Contract, including responses to monitoring reports, Department may, in its sole discretion, suspend payments, place Subrecipient on cost reimbursement method of payment, and initiate proceedings to terminate the Contract. F. Entity Identifier Number. Subrecipient shall provide the Department with a Data Universal Numbering System ("DUNS") number to be used as the Unique Entity Identifier Number on all contracts and agreements. The DUNS number must be provided in a document from Dun and Bradstreet must be submitted from a document retrieved from the https://www.sam.gov website. These documents must be provided to the Department prior to the processing first payment to Subrecipient. Subrecipient shall maintain a current DUNS number for the entire Contract Term. G. Rental Assistance. During the Contract Term, reimbursements from rental arrears or rental assistance payments must be reported to the Department in the next monthly Expenditure and Performance Report and spent on qualifying rental arrears or rental assistance payments. SECTION 11. CHANGES AND AMENDMENTS A. Amendments and Required Changes by law. Any change, addition, or deletion to the terms of this Contract required by a change in state or federal law or regulation is automatically incorporated herein and is effective on the date designated by such law or regu lations without the requirement of a written amendment hereto. Said changes, additions, or deletions referenced under this Section 11 of this Contract may be further evidenced in a written amendment. B. General. Except as specifically provided otherwise in this Contract, any changes, additions, or deletions to the terms of this Contract not required by a change in state or federal law or regulation shall be amended in writing and executed by both Parties to this Contract. C. Electronic Signatures. If any Party returns an executed copy by electronic transmission, the signing party intends the copy of its authorized signature, to be its original signature. D. Amendment Requests. The Department must receive any Contract amendment requests in writing. SECTION 12. PROGRAM INCOME A. General. Subrecipient shall account for and expend program income derived from activities financed in whole or in part with funds provided under this Contract in accordance with the state Uniform Grant Management Standards, more specifically Chapter Ill, "State Uniform Adm inistrative Requirements For Grants and Cooperative Agreements", Subpart C-Post-Award Requirements-- Financial Administration, §_.25, Program Income, 2 CFR §200.80, and 10 TAC §6.205(c). Page 9 of 32 326 OocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC235B4 B. Reimbursement. During and after the Contract Term, Subrecipient will return refunds or reimbursements from rental arrears, rental assistance payments, rental deposits, or utility deposits, or any other program income to the Department within ten (10) days of receipt. Program income any subcontractor, or subawardee receives, must also be returned to the Department within ten (10) calendar days. This requirement must be listed in the Subrecipient's agreement with subcontractor or subawardee. SECTION 13. TECHNICAL ASSISTANCE AND MONITORING Department may issue technical guidance to explain the rules and provide directions on terms of this Contract. Department or its designee may conduct periodic on-site monitoring and evaluation of the efficiency, economy, and efficacy of Subrecipient's performance of this Contract. Department will advise Subrecipient in writing of any deficiencies noted during such monitoring. Department will provide technical assistance to Subrecipient and will require or suggest changes in Subrecipient's program implementation or in Subrecipient's accounting, personnel, procurement, and management procedures in order to correct any deficiencies noted. Department may conduct follow-up visits to review and assess the efforts Subrecipient has made to correct previously noted deficiencies. Department may place Subrecipient on a cost reimbursement method of payment, suspend or terminate this Contract, or invoke other remedies in the event monitoring or other reliable sources reveal material deficiencies in Subrecipient's performance or if Subrecipient fails to correct any deficiency within the time allowed by federal or state law or regulation or by the terms of this Contract. SECTION 14. INDEPENDENT SUBRECIPIENT Subrecipient is an independent contractor. Subrecipient agrees to hold Department harmless and, to the extent allowed by law, indemnify it against any disallowed costs or other claims which may be asserted by any third party in connection with Subrecipient's performance of this Contract. SECTION 15. PROCUREMENT STANDARDS A. Subrecipient shall comply with UGMS and 10 TAC §1.404, this Contract, and all applicable federal, state, and local laws, regulations, and ordinances for making procurement transactions and purchases under this Contract. B. Subrecipient may not use funds provided under this Contract to purchase equipment (as defined federally or by UGMS) with a unit acquisition cost (the net invoice unit price of an item of equipment) of more than $5,000.00, or on any vehicle purchase unless Subrecipient has received the prior written approval from the Department for such purchase. SECTION 16. SUBCONTRACTS A. Subrecipient, in subcontracting for any performances described in this Contract, expressly understands that in entering into such subcontracts, TDHCA is in no way liable to the Subrecipient's subcontractor(s). All subcontracts must be for goods or services and paid out of administrative funds. Subcontractors must be procured in accordance with 2 CFR Part 200, UGMS, and 10 TAC §1.404. B. Subrecipient has the responsibility for ensuring that the performances rendered under all subcontracts are rendered so as to comply with all Contract terms and as if such performances rendered were rendered by Subrecipient. Department maintains the right to monitor and require Subrecipient's full compliance with the terms of this Contract. Page 10 of 32 327 DocuSign Envelope ID: BAFCF163-1016-46F4-B664-88542AC23584 SECTION 17. SUBAWARDS A. Subrecipient may request to the Department to enter into a subaward to a unit of local government, council of government, public housing authority, or private nonprofit organization for some or all of its program and administrative funds through a direct (non-competitive) award. The Subrecipient must fulfil all of the requirement of a pass-through entity listed in 24 CFR §200.332, and must monitor its subawardee at least once during the Contract Term. B. Any subaward must contain all the applicable terms and conditions required by federa l and state requirements and as further reflected this Contract including but not limited to items specifically identified in this Contract, 2 CFR §200.332, and 2 CFR Part 200 Appendix II (as applicable) . C. Subrecipient must provide the Department with the applicable contact information for all subawards to ensure that accurate contact information is available relating to both rental assistance and eviction diversion activities to include in a list of resources for landlords/tenants. Subawardees may not further subaward funds. D. Before entering into a contract or other agreement with a subawardee, Subrecipient must: 1) check the Federal and State debarment and suspended lists of both the Department (all subawardees) and Texas Department of Agriculture (only if the subawardee is a non-entitlement city or county) for the entity and for governing board members of subawardees; 2) ensure that the entity (if applicable) is current on its Single Audit submission to the Federal Audit Clearinghouse; 3) request a disclosure for matters under 2 CFR §200.113, 2 CFR Part 200 Appendix XII, 24 CFR Part 9, or the Fair Housing Act; and 4) provide the Department this information on the Department's form by February 15, 2021. E. The Subrecipient, in subawarding for any performances described in this Contract, expressly understands that in entering into such subawards, the Department is in no way liable to the Subrecipient's subawardee(s). Department's approval under this Section 17 does not constitute adoption, ratification, or acceptance of Subrecipient's or subawardee's performance hereunder. Department maintains the right to monitor and require Subrecipient's full compliance with the terms of this Contract. Department's approval under this Section 17 does not waive any right of action which may exist or which may subsequently accrue to Department under this Contract. SECTION 18. TRAVEL Subrecipient shall adhere to 2 CFR Part 200 and either its board-approved travel policy (not to exceed the amounts established in subchapter I of Chapter 57 of Title 5, United States Code "Travel and Subsistence Expenses; Mileage Allowances), or the State of Texas travel policies. Subrecipient's written travel policy shall delineate the rates which Subrecipient shall use in computing the travel and per diem expenses of its board members and employees. SECTION 19. LITIGATION AND CLAIMS Subrecipient shall immediately provide Department with written notice of any claim or action filed with a court or administrative agency against Subrecipient arising out of the performance of this Contract or any subcontract hereunder. Subrecipient shall provide Department with copies of any and all relevant papers Subrecipient receives with respect to such action or claim. SECTION 20. LEGAL AUTHORITY A. legal Authority. Subrecipient assures and guarantees that it possesses the legal authority to enter into this Contract, to receive and manage the funds authorized by this Contract, and to perform the services Subrecipient has obligated itself to perform hereunder. The execution, delivery, and Page 11 or 32 328 DocuSign Envelope ID: BAFCF163-1016-46F4-8664-88542AC23584 performance of this Contract will not violate Subrecipient's constitutive documents or any requirement to which Subrecipient is subject and represents the legal, valid, and binding agreement of Subrecipient, enforceable in accordance with its terms. B. Signature Authority. The person signing this Contract on behalf of Subrecipient hereby warrants that he/she has been duly authorized by Subrecipient's governing body to execute this Contract on behalf of Subrecipient and to validly and legally bind Subrecipient to the terms, provisions and performances herein. C. Termination; liability. Department shall have the right to terminate this Contract if there is a dispute as to the legal authority of either Subrecipient or the person signing this Contract on behalf of Subrecipient to enter into this Contract or to render performances hereunder. Subrecipient is liable to Department for any money it has received from Department for performance of the provisions of this Contract, ifthe Department has terminated this Contract for reasons enumerated in this Section 20. D. Merger; Default. Subrecipient understands that it is an event of default under this Contract if the Subrecipient liquidates, terminates, dissolves, merges, consolidates or fails to ma intain good standing in the State of Texas, and such is not cured prior to causing material harm to Subrecipient's ability to perform under the terms of this Contract. SECTION 21. COMPLIANCE WITH LAWS A. Federal, State and local law. Subrecipient shall comply with the CARES Act, the Housing and Community Development Act of 1974, the CDBG and CDBG-CV federal ru les and regulations the certifications attached hereto, and all federal, state, and local laws and regulations applicable to the performance of this Contract. Subrecipient shall not violate any federal, state, or local laws, stated herein or otherwise, nor commit any illegal activity in the performance of or associated with the performance of this Contract. No funds under this Contract shall be used for any illegal activity or activity that violates any federal, state, or local laws. B. Drug-Free Workplace Act of 1988. The Subrecipient affirms by signing this Contract and Addendum B that it is implementing the Drug-Free Workplace Act of 1988 (41 USC §701, et seq). C. limited English Proficiency (lEP). Subrecipient must ensure equal access to services by non-English speaking residents. Subrecipient must provide program applications, forms, and educational materials in English, Spanish, and any appropriate language, based on the needs of the service area and in compliance with the requirements in Executive Order 13166 of August 11, 2000 reprinted at 65 F.R 50121, August 16, 2000 Improving Access to Services with lEP at 67 F.R. 41455. To ensure compliance, the Subrecipient must take reasonable steps to insure that persons with LEP have meaningful access to the program. Meaningful access may entail providing language assistance services, including oral and written translation, where necessary. D. Information Security and Privacy Requirements. 1. General. Subrecipient shall comply with the information security and privacy requirements under 10 TAC §1.24 to ensure the security and privacy of Protected Information (as said term is defined under 10 TAC §1.24). 2. Information Security and Privacv Agreement ("ISPA"}. Prior to beginning any work under this Contract, Subrecipient shall either (i) have an effective, fully executed ISPA, as required by 10 TAC §1.24, on file with the Department, or (ii) will execute and submit to the Department an ISPA in accordance with instructions found on the Department's website at the "Information Security and Page 12 of 32 329 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC23584 Privacy Agreement" link. The requirements of the ISPA must be incorporated into an agreement with any subcontractor or subawardee, as applicable. E. Prevention of Trafficking. Subrecipient and its contractors must comply with Section 106(g) of the Trafficking Victims Protection Act of 2000, as amended (22 U.S.C. §7104 et seq.). If Subrecipient or its contractor or subcontractor engages in, or uses labor recruiters, brokers or other agents who engage in any of the prohibited activities under Section 106(g) of the Trafficking Victims Protection Act of 2000, Department may terminate this Contract and Subrecipient hereby agrees and acknowledges that upon termination, Subrecipient 's rights to any funds shall be terminated. F. Section 3. If Subrecipient's project contains covered activities not paid for CDBG-CV funds, Subrecipient agrees to comply with HUD's regulations in 24 CFR Part 75, which implement Section 3 of the Housing and Urban Development Act of 1968, as amended. As evidenced by their execution of this Contract, the parties certify that they are under no contractual or other impediment that would prevent them from complying with 24 CFR Part 75. G. Lead-based Paint. Emergency Rental Assistance under TERAP or TEDP for current rental payments covering an excess of 100 days, is subject to the Lead Safe Housing Rule ("LSHR") requirements and Subrecipient must follow the requirements of 24 CFR Part 35 Subpart K, whether occupied by a child less than six years or not. Subpart K requires that almost all dwelling units built prior to January 1, 1978 that receive Federal assistance undergo a visual assessment for deteriorated paint (inside, outside and all common areas) by a trained grantee or subrecipient. The results of the visual assessment must be documented. Should deteriorated paint be identified, Subrecipient must follow the compliance steps to properly address the deteriorated painted surfaces, detailed in Subpart K. A list of exemptions to the LSHR, steps to comply with Subpart K, and associated resources can be reviewed here: https://portalapps.hud.gov/CORVID/HUDLBPAdvisor/welcome.html. SECTION 22. ENVIRONMENTAL CLEARANCE REQUIREMENTS The Department has performed a state-wide environmental review under 24 CFR §58.35(b)(2) for this emergency rental assistance activity. Subrecipient will not have to perform individual environmental reviews. SECTION 23. CITIZEN PARTICIPATION REQUIREMENTS and COMPLAINTS A. Citizen Participation. In accordance with Section 2105.058 of the Texas Government Code, Subrecipient must conduct a public meeting at least annually to seek public comment on the needs or uses of CDBG-CV funds. B. Complaints. Subrecipient must provide residents the address, phone number, email (if applicable) and times for submitting complaints and grievances, and provide timely written answers to complaints and grievances, within fifteen (15) working days where practicable. C. Subaward Agreements. Subrecipient must incorporate the provrsrons of this Section 23 into its agreement with any subawardee that receives more than $5,000 in CDBG-CV funding and of this Section 23B with any subawardee. SECTION 24. PREVENTION OF WASTE, FRAUD, ABUSE, and DUPLICATION OF BENEFITS A. Subrecipient sha ll establish, maintain, and utilize systems and procedures to prevent, detect, and correct waste, fraud, and abuse in activities funded under this Contract. The systems and procedures shall address possible waste, fraud, and abuse by Subrecipient, its employees, clients, vendors, subcontractors and administering agencies. Subrecipient's internal controls systems and all transactions and other significant events are to be clearly documented, and the documentation is to be readily available for monitoring by Department. Page 13 or 32 330 DocuSign Envelope 10: BAFCF163-1016-46F4-8664-B8542AC235B4 B. Subrecipient shall establish and maintain adequate procedures to prevent any duplication of benefits as required by section 312 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5155), as amended by section 1210 of the Disaster Recovery Reform Act of 201$ (division D of Public Law 115-254; 132 Stat. 3442). C. Subrecipient shall give Department complete access to all of its records, employees, and agents for the purpose of monitoring or investigating the CDBG-CV program. Subrecipient shall immediately notify Department of any discovery of waste, fraud, or abuse. Subrecipient shall fully cooperate with Department's efforts to detect, investigate, and prevent waste, fraud, and abuse. D. Subrecipient shall not discriminate against any employee or other person who reports a violation of the terms of this Contract, or of any law or regulation, to Department or to any appropriate law enforcement authority, if the report is made in good faith. E. Subrecipient is prohibited from selling, trading, or otherwise transferring all or any such portion of such funds to another such entity in exchange for any other funds, credits or non-Federal considerations, and must use such funds only for eligible activities, in this case, emergency renta l assistance. F. Subaward. Subrecipient must incorporate the provisions of this Section 24 into its agreement with any subawardee. SECTION 25. CERTIFICATION REGARDING UNDOCUMENTED WORKERS Pursuant to Chapter 2264 of the Texas Government Code, by execution of this Contract, Subrecipient hereby certifies that Subrecipient, or a branch, division, or department of Subrecipient does not and will not knowingly employ an undocumented worker, where "undocumented worker'' means an individual who, at the time of employment, is not lawfully admitted for permanent residence to the United States or authorized under law to be employed in that manner in the United States. If, after receiving a public subsidy, Subrecipient or a branch, division, or department of Subrecipient is convicted of a violation under 8 U.S.C. §1324a(f), Subrecipient shall repay the public subsidy with interest, at the rate of five percent {5%) per annum, not later than the 1201h day after the date the Department notifies Subrecipient of the violation. SECTION 26. CONFLICT OF INTEREST/NEPOTISM A. Subrecipient shall maintain written standards of conduct governing the performance of its employees engaged in the award and administration of contracts. Failure to ma intain written standards of conduct and to follow and enforce the written standards is a condition of default under this Contract. In addition, the written standards must meet the requirements in 2 CFR §200.318. B. No employee, officer, or agent of Subrecipient shall participate in the selection, award, or administration of a contract supported by federal funds if a real or apparent conflict of interest would be involved. Such a conflict would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the Parties indicated herein, has a financial or other interest in the firm selected for an award. This also applies to the procurement of goods and services under 24 CFR §§200.317 and 200.3186. C. The officers, employees, and agents of the Subrecipient shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors, or parties to sub-agreements. Subrecipient may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct shall provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the Subrecipient Page 14 of 32 331 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC235B4 D. Failu re to maintain written standards of conduct and to follow and enforce the written standards is a condition of default under t his Contract and may result in termination of the Contract or deobligation of funds. E. Subrecipient must incorporate the provisions of this Section 26 with any subcontractor or subawardee. SECTION 27. POLITICAL ACTIVITY AND LEGISLATIVE INFLUENCE PROHIBITED A. None of the funds provided under this Contract shall be used for influencing the outcome of any election, or the passage or defeat of any legislative measure. This prohibition shall not be construed to prevent any state official or employee from furnishing to any member of its governing body upon request, or to any other local or state official or employee or to any citizen, information in the hands of the employee or official not considered under law to be confidential information. B. No funds provided under this Contract may be used directly or indirectly to hire employees or in any other way fund or support candidates for the legislative, executive, or judicial branches of government, the State of Texas, or the government of the United States. C. None of the funds provided under this Contract shall be used to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any Federal contract, grant or any other award governed by the Byrd Anti-lobbying Amendment (31 U.S.C. §1352) as the Subrecipient and each of its tiers have certified by their execution of the "Certification Regarding lobbying for Contracts, Grants, loans, and Cooperative Agreements" attached hereto as Addendum A and incorporated herein for all relevant purposes. SECTION 28. NON-DISCRIMINATION, EQUAL ACCESS AND EQUAL OPPORTUNITY A. Non-Discrimination. A person shall not be excluded from participation in, be denied the benefits of, be subjected to discrimination under, or be denied employment in the administration of or in connection with any program or activity funded in whole or in part with funds made available under this Contract, on the grounds of race, color, religion, sex, national origin, age, familial status, disability, or political affiliation or belief. B. Equal Opportunity. Subrecipient agrees to carry out an Equal Employment Opportunity Program in keeping with the principles as provided in President's Executive Order 11246 of September 24, 1965, as amended, and its implementing regulations at 41 CFR Part 60 . C. Affirmatively Further Fair Housing. Subrecipient must affirmatively further fair housing to include but is not limited to marketing the program to those least likely to apply. D. Accessibility. Subrecipient must meet the standards under (i) Section 504 of the Rehabilitation Act of 1973 (5 U.S.C. §794) Titles II and Ill of the Americans with Disabilities Act (42 U.S.C. §§12131-12189; 47 U.S.C. §§155, 201, 218 and 255) as implemented by U.S. Department of Justice at 28 CFR Parts 35 and 36. Subrecipient shall follow the Department's accessibility rules in 10 TAC Chapter 1, Subchapter B. Subrecipient shall operate each program or activity receiving financial assistance so that the program or activity, when viewed in its entirety, is readily accessible and usable by individuals with disabilities. Subrecipient is also required to provide reasonable accommodations for persons with disabilities. SECTION 29. MAINTENANCE OF EFFORT Page 15 of32 332 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC23584 Funds provided to Subrecipient under this Contract may not be substituted for funds or resources from any other source or in any way serve to reduce the funds or resources which would have been available to or provided through Subrecipient had this Contract never been executed. SECTION 30. PREVIOUS PARTICIPATION REVIEW DEBARRED AND SUSPENDED PARTIES A. All entities will be subject to a Previous Participation Review by the Department, as outlined in 10 TAC §1.302. Pursuant to 24 CFR Part 5, all CDBG-CV applicants are required to verify that they and their principals, or any/all persons, contractors, consultants, businesses, subawardees, etc., that will be conducting business with the applicant as part of the rental assistance activity are not presently debarred, proposed for debarment, suspended, declared ineligible, or voluntarily excluded from participation in the covered transaction or in any proposal submitted in connection with the covered transaction. B. The Department will not award any CDBG-CV funds to organizations that are debarred, suspended, proposed for debarment, and declared ineligible or voluntarily excluded from participation from federal or state assisted programs, or that are proposing to partner, contract, or otherwise fund rental assistance activities through an organization that is debarred, suspended, proposed for debarment, or otherwise ineligible from participation in federally assisted programs. If an organization has a member of its governing body that has this status, the Department will allow the member to resign so that the organization can enter into a Contract with the Department. C. By signing this Contract, Subrecipient certifies that its principal employees, board members, agents, or contractors are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any federal department or agency as provided in the Certification Regarding Debarment, Suspension and Other Responsibility Matters attached hereto as Addendum C and incorporated herein for all relevant purposes. The terms "covered transaction", "debarred", "suspended", "ineligible", "lower tier covered tra nsaction", "participant", "person", "primary covered transaction", "principal", "proposal", and "voluntarily excluded", as used in the certification attached as Addendum C, have the meaning set out in the Definitions and Coverage sections of rules implementing Executive Order 12549. D. Subrecipient also certifies that it will not knowingly award any funds provided by this Contract to any person who is proposed for debarment under 48 CFR Part 9, Subpart 9.4 or that is debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs under Executive Order 12549. Subrecipient agrees that prior to entering into any agreement with a potential subcontractor that the verification process to comply with this requ irement will be accomplished by checking the System for Award Management ("SAM") at www.sam.gov and including a copy of the results in its project files. After said verification, Subrecipient may decide the frequency by which it determines the eligibility of its subcontractors during the term of subcontractor's agreement. Subrecipient may subsequently rely upon a certification of a pros pective subcontractor that is not proposed for debarment under 48 CFR Part 9, Subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless Subrecipient knows that the certification is erroneous. E. Failure of Subrecipient to furnish the certification attached hereto as Addendum C or an explanation of why it cannot provide said certification shall disqualify Subrecipient from participation under this Contract. The certification or explanation will be considered in connection with the Department's determination whether to continue with this Contract. Subrecipient shall provide immediate written notice to Department if at any time Subrecipient learns that the certification was erroneous when submitted or has become erroneous by reason of changed circumstances. Subrecipient further agrees by executing this Contract that it will include the certification provision titled "Certification Regarding Page 16 of 32 333 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC235B4 Debarment, Suspension, Ineligibility and Voluntary Exclusive-Subcontracts," as set out in Addendum C, without modification, and this language under this Section 30, in all its subcontracts. SECTION 31. FAITH BASED AND SECTARIAN ACTIVITY Funds provided under this Contract may not be used for explicitly religious activities, such as worship, religious instruction, or proselytization, as part of the programs or services funded with direct financial assistance from the Department. If an organization conducts such activities, the activities must be offered separately, in time or location, from the programs or services funded with direct financial assistance from the Department, and participation must be voluntary for beneficiaries of the programs or services funded with such assistance Subrecipient shall comply with the regulations in 24 CFR §5.109. SECTION 32. COPYRIGHT Subrecipient may copyright materials developed in the performance of this Contract or with funds expended under this Contract. If copyrighted materials are developed in the under this Contract, the Department and HUD shall each have a roya lty-free, nonexclusive, and irrevocable right to reproduce, publish, or otherwise use, and to authorize others to use, the copyrighted work for government purposes. SECTION 33. NO WAIVER Any right or remedy given to Department by this Contract shall not preclude the existence of any other right or remedy, nor shall any action taken in the exercise of any right or remedy be deemed a waiver of any other right or remedy. The failure of Department to exercise any right or remedy on any occasion shall not constitute a waiver of Department's right to exercise that or any other right or remedy at a later time. SECTION 34. SEVERABILITY If any section or provision of this Contract is held to be invalid or unenforceable by a court or an administrative tribunal of competent jurisdiction, the remainder shall remain valid and bi nding. SECTION 35. ORAL AND WRITTEN AGREEMENTS A. All oral and written agreements between the parties to this Contract relating to the subject matter of this Contract have been reduced to writing and are contained in t his Contract. B. The attachments enumerated and denominated below are a part of this Contract and constitute promised performances under this Contract: 1. Addendum A -Certification Regarding Lobbying for Contracts, Grants, Loans, and Cooperative Agreements 2. Addendum B-Certification Regarding Drug-Free Workplace Requirements 3. Addendum C-Certification Regarding Debarment, Suspension and Other Responsibility Matters 4. Exhibit A-Contract Benchmarks 5. Exhibit B-Performance Statement and Benchmarks 6. Exhibit C --Budget SECTION 36. USE OF ALCOHOLIC BEVERAGES Funds provided under this Contract may not be used for the payment of salaries to any Subrecipient's employees who use alcoholic beverages while on active duty, for travel expenses expended for alcoholic beverages, or for the purchase of alcoholic beverages. SECTION 37. FORCE MAJURE Page 17 of 32 334 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC235B4 If the obligations are delayed by the following, an equitable adjustment will be made for delay or failure to perform hereunder: A. Any of the following events: (i) catastrophic weather conditions or other extraordinary elements of nature or acts of God; (ii) acts of war (declared or undeclared), (iii) acts of terrorism, insurrection, riots, civil disorders, rebellion or sabotage; and (iv) quarantines, disease pandemics, embargoes and other similar unusual actions of federal, provincial, local or foreign Governmental Authorities; and B. The non-performing party is without fault in causing or failing to prevent the occurrence of such event, and such occurrence could not have been circumvented by reasonable precautions and could not have been prevented or circumvented through the use of commercially reasonable alternative sources, workaround plans or other means. SECTION 38. ALTERNATIVE DISPUTE RESOLUTION In accordance with Section 2306.082 of the Texas Government Code, it is the Department's policy to encourage the use of appropriate alternative dispute resolution procedures ("ADR") under the Governmental Dispute Resolution Act and the Negotiated Rulemaking Act (Chapters 2009 and 2006 respectively, Texas Government Code), to assist in the fair and expeditious resolution of internal and external disputes involving the Department and the use of negotiated ru lemaking procedures for the adoption of Department ru les. As described in Chapter 154, Civil Practices and Remedies Code, ADR procedures include mediation. Except as prohibited by Department's ex parte communications policy, Department encourages informal communications between Department staff and the Subrecipient, to exchange information and informally resolve disputes. Department also has administrative appeals processes to fairly and expeditiously resolve disputes. If at any time the Subrecipient would like to engage Department in an ADR procedure, the Subrecipient may send a proposal to Department's Dispute Resolution Coordinator. For additional information on Department's ADR policy, see Department's Alternative Dispute Resolution and Negotiated Rulemaking at 10 TAC §1.17. SECTION 39. TIME IS OF THE ESSENCE Time is of the essence with respect to Subrecipient's compliance with all covenants, agreements, terms and conditions of this Contract. SECTION 40. COUNTERPARTS AND FACSIMILE SIGNATURES This Contract may be executed in one or more counterparts each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Signed signature pages may be transmitted by facsimile or other electronic transmission, and any such signature shall have the same legal effect as an original. SECTION 41. NUMBER, GENDER Unless the context requires otherwise, the words of the masculine gender shall include the feminine, and singular words shall include the plural. SECTION 42. NOTICE A. If a notice is provided concerning this Contract, notice may be given at the following ("Notice Address"): As to Department: Page 18 of 32 335 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC235B4 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS P. 0. Box 13941 Austin, Texas 78711-3941 Attention: Mariana Salazar, Director of CDBG CARES Telephone: (512) 655-9616 mariana.salazar@tdhca.state.tx.us As to Subrecipient: City of Denton 215 E McKinney Street Denton, TX 76201 Attention: Todd Hileman, City Manager Telephone: 949-349-8560 Email: todd.hileman@cityofdenton.com B. All notices or other communications hereunder shall be deemed given when delivered, mailed by overnight service, or five (5) days after mailing by certified or registered mail, postage prepaid, return receipt requested, addressed to the appropriate Notice Address as defined in the above Subsection A of this Section 42. C. Subrecipient shall provide contact information to the Department in accordance with 10 TAC §6.6. SECTION 43. VENUE AND JURISDICTION This Contract is delivered and intended to be performed in the State of Texas. For purposes of litigation pursuant to this Contract, venue shall lie in Travis County, Texas. SECTION 44. DENIAL OF SERVICE APPEALS PROCESS FOR HOUSEHOLDS A. Subrecipient must establish a written denial of service complaint procedure to address written complaints (or an oral complaint if a person with a disability requests a reasonable accommodation based on their disability) from a Household or landlord. This appeal procedure is not applicable to a Household if t he landlord declines to participate in the program. B. If a Household's denial is solely based on income el igibility, this complaint procedure would not apply, but the Household may request a recertification of income eligibility based on initial documentation provided at the time of the original application. The recertification will be an analysis of the initial calculation based on the documentation received with the initial application for services and must be performed by an individual other than the person who performed the initial determination. If the recertification upholds the Household's income as ineligible, the Household must be notified in writing. C. If the Household is not satisfied with the Subrecipient's decision under the service complaint procedure, the Household may appeal the decision in writing (or telephonically if a person with a disability requests a reasonable accommodation based on their disability) to the Department within ten (10) calenda r days of notification of an adverse decision. D. Households who allege that the Subrecipient has denied all or part of a service or benefit in a manner that is unjust, violates discrimination laws, or without reasonable basis in law or fact, may request a contested hearing under Tex. Gov't Code, Chapter 2001. The hearing shall be conducted by the State Office of Administrative Hearings on behalf of the Department in the locality served by the Subrecipient, for which the procedures are further described in 10 TAC §1.13 (relating to Contested Case Hearing Procedures). If the Household appeals to the Department, Subrecipient's CDBG-CV funds Page 19 of 32 336 DocuSign Envelope 10: BAFCF163-1016-46F4-8664-88542AC23584 that could be pledged to that Household should remain unencumbered until the Department completes the appeal process. SECTION 45. ASSIGNMENT This Contract is made by Department to Subrecipient only. Accordingly, it is not assignable without the written consent and agreement of Department, which consent may be withheld in Department's sole discretion. SECTION 46. LIMITATION ON ABORTION FUNDING A. Pursuant to Chapter 2272 of the Texas Government Code, to the extent allowed by federal and state law, the Department may not enter into this Contract with an "abortion provider" or an "affiliate" of an abortion provider, as sa id terms are defined thereunder, if funds under this Contract are appropriated from state or local tax revenue. B. By execution of this Contract, the Subrecipient hereby certifies that, as a condition of receipt of any funds under this Contract from state or local tax revenue, it is eligible to receive said funds, and that it will not utilize said funds in any way contrary to this Section 46 during the Contract Term. Page 20 of 32 337 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC23584 EXECUTED to be effective on January 15, 2021. SUBRECIPIENT: City of Denton, a political subdivision of the State of Texas By: ~mt...c Name: ~ifllt!E!'MtR\54 .. Title: City Manager Date: 1/15/2021 I 4:04:54 PM PST DEPARTMENT: TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS, a public and official agency of the State of Texas Date: 1/15/2021 I 7:47:01 PM CST Page 21 of 32 338 DocuSign Envelope 10: BAFCF163-1016-46F4-8664-88542AC23584 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS FY2020 COMMUNITY DEVELOPMENT BLOCK GRANT Coronavirus Aid, Relief, and Economic Security Act ("CDBG CARES" or "CDBG-CV") Texas Emergency Rental Assistance Program ("TERAP") and Texas Eviction Diversion Program ("TEDP'') ADDENDUM A CERTIFICATION REGARDING LOBBYING FOR CONTRACTS, GRANTS, LOANS, AND COOPERATIVE AGREEMENTS The undersigned certifies, to the best of its knowledge and belief, that: 1. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, or cooperative agreement. 2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit Standard Form -LLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. 3. The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including subcontracts, subgrants, and contracts under grants, loans, and cooperative agreements) and that all subrecipients shall certify and disclose accordingly. This certification is material representation of fact on which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. STATEMENT FOR LOAN GUARANTEES AND LOAN INSURANCE The undersigned states, to the best of its knowledge and belief, that: If any funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this commitment providing for the United States to insure or guarantee a loan, the undersigned shall complete and submit Standard Form-lLL, "Disclosure Form to Report Lobbying," in accordance with its instructions. Submission of this statement is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required statement shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. Page 22 of 32 339 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-88542AC235B4 SUBRECIPIENT: City of Denton, a political subdivision of the State of Texas QPlfu~ By: Name: Todd Hile nec711BA00454 ... Title: City Manager Date: 1/15/2021 I 4:04:54 PM PST Page 23 of 32 340 DocuSign Envelope ID: BAFCF163-1016-46F4-B664-B8542AC23584 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS FY2020 COMMUNITY DEVELOPMENT BLOCK GRANT Coronavirus Aid, Relief, and Economic Security Act (11CDBG CARES" or "CDBG-CV") Texas Emergency Rental Assistance Program ("TERAP") and Texas Eviction Diversion Program ("TEDP") ADDENDUM B CERTIFICATION REGARDING DRUG-FREE WORKPLACE REQUIREMENTS This certification is required by the regulations implementing the Drug-Free Workplace Act af 1988: 45 CFR Part 76, Subpart, F. Sections 76.630(c) ond (d){2) and 76.645 (a)(l) and (b) provide that a Federal agency moy designate a central receipt point for STATE-WIDE AND STATE AGENCY-WIDE certifications, and for notification of criminal drug convictions. For the Department of Health and Human Services, the central point is: Division of Grants Management and Oversight, Office of Management and Acquisition, Department of Health ond Human Services, Room 517-D, 200 Independence Avenue, SW Washington, DC 20201. The undersigned certifies that it will or will continue to provide a drug-free workplace by: (a) Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the grantee's workplace and specifying the actions that will be taken against employees for violation of such prohibition; (b) Establishing an ongoing drug-free awareness program to inform employees about- (1) The dangers of drug abuse in the workplace; (2) The grantee's policy of maintaining a drug-free workplace; (3) Any available drug counseling, rehabilitation, and employee assistance programs; and (4) The penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; (c) Making it a requirement that each employee to be engaged in the performance ofthe grant be given a copy of the statement required by paragraph (a); (d) Notifying the employee in the statement required by paragraph (a) that, as a condition of employment under the grant, the employee will- (1) Abide by the terms of the statement; and (2) Notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace no later than five (5) calendar days after such conviction; (e) Notifying the agency in writing, within ten (10) calendar days after receiving notice under paragraph (d)(2) from an employee or otherwise receiving actual notice of such conviction. Employers of convicted employees must provide notice, including position title, to every grant officer or other designee on whose grant activity the convicted employee was working, unless the Federal agency has designated a central point for the receipt of such notices. Notice shall include the identification number(s) of each affected grant; (f) Taking one of the following actions, within thirty (30) calendar days of receiving notice under paragraph (d)(2), with respect to any employee who is so convicted- (1) Taking appropriate personnel action against such an employee, up to and including termination, consistent with the requirements of the Rehabilitation Act of 1973, as amended; or Page 24 of 32 341 DocuSign Envelope ID: BAFCF163-1016-46F4-B664-88542AC23584 (2) Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency; (g) Making a good faith effort to continue to maintain a drug-free workplace through implementation of paragraphs (a), (b), (c), (d), (e) and (f). Place(s) of Performance [site(s) for the performance of work done in connection with the specific grant) (include street address, city, county, state, zip code): 1. 401 N. Elm Street Denton, TX 76201, Denton County 2. 3. 4. Workplace identifications must include the actual address of buildings (or parts of buildings) or other sites where work under the grant takes place. Categorical descriptions may be used (e.g., all vehicles of a mass transit authority or State highway department while in operation, State employees in each local unemployment office, performers in concert halls or radio studios). If Sub recipient does not identify the workplaces at the time of application, or upon award, if there is no application, the Subrecipient must keep the identity of the workplace(s) on file in its office and make the information available for Federal inspection. Failure to identify all known workplaces constitutes a violation of the Subrecipient's drug-free workplace requirements. This certification is a material representation of fact upon which reliance is placed when the Department awards the grant. If it is later determined that Subrecipient knowingly rendered a false certification, or otherwise violates the requirements of the Drug-Free Workplace Act, Department, in addition to any other remedies available to the Federal Government, may take action authorized under the Drug-Free Workplace Act. SUBRECIPIENT: City of Denton, a political subdivision of the State of Texas lnDocuSigned by: ~~:me: Todd Hile~!s~,,~:~ Title: City Manager Date: 1/15/2021 I 4:04:54 PM PST Page 25 of 32 342 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC23584 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS FY2020 COMMUNITY DEVELOPMENT BLOCK GRANT Coronavirus Aid, Relief, and Economic Security Act ("CDBG CARES" or "CDBG-CV") Texas Emergency Rental Assistance Program ("TERAP") and Texas Eviction Diversion Program ("TEDP'') CONTRACT NO. 70200001013 ADDENDUMC CERTIFICATION REGARDING DEBARMENT, SUSPENSION AND OTHER RESPONSIBILITY MATTERS The undersigned certifies, to the best of its knowledge and belief, that it and its principals: (a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any Federal department or agency; (b) Have not within a three-year period preceding this proposal been co nvicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (c) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State or local) with commission of any of the offenses enumerated in section (b) of this certification; and (d) Have not within a three-year period preceding this application/proposal had one or more public transactions (Federal, State or local) terminated for cause or default. (e) Will submit to the Department information about each proceeding that occurs during this Contract Term or during the recordkeeping period that: (1) Is in connection with this award; (2) Reached its final disposition during the most recent five year period; and (3) Is one of the following: i. A criminal proceeding that resulted in a conviction, as defined below; ii. A civil proceeding that resulted in a finding of fault and liability and payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more; iii. An administrative proceeding, as defined below, that resulted in a finding of fault and liability and your payment of either a monetary fine or penalty of $5,000 or more or reimbursement, restitution, or damage in excess of $100,000; or iv. Any other crim inal, civil, or administrative proceeding if: 1. It could have led to an outcome described in this section (e) paragraph (3) items (i)-(iii) of this award term and condition; 2. It had a different disposition arrived at by consent or compromise with an acknowledgment of fault on your part; and Page 26 of 32 343 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC235B4 3. The requirement in this award term and condition to disclose information about the proceeding does not conflict with applicable laws and regulations. (4) For purposes of section (e) of this certification the following definitions apply: i. An "administrative proceeding" means a non-judicial process that is adjudicatory in nature in order to make a determination of fault or liability (e.g., Securities and Exchange Commission Administrative proceedings, Civilian Board of Contract Appeals proceedings, and Armed Services Board of Contract Appeals proceedings). This includes proceedings at the Federal and State level but only in connection with performance of a Federal contract or grant. It does not include audits, site visits, corrective plans, or inspection of deliverables. ii. A "conviction", for purposes of this award term and condition, means a judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, and includes a conviction entered upon a plea of nolo contendere. Where the undersigned Subrecipient is unable to certify to any of the statements in this certification, such Subrecipient shall attach an explanation of why it cannot provide said certification to this Contract. The undersigned Subrecipient further agrees and certifies that it will include the below clause titled "Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Subcontracts/Lower Tier Covered Transaction," without modification, in all subcontracts and in all solicitations for subcontracts: "CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY AND VOLUNTARY EXCLUSION -SUBCONTRACTS/ LOWER TIER COVERED TRANSACTIONS (1} The prospective lower tier participant/subcontractor certifies, by submission of this proposal, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. (2) Where the prospective lower tier participant/subcontractor is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal. LOWER TIER PARTICIPANT /SUBCONTRACTOR: [Signature} Printed Name: Title: Date: -------------------------------------------- This certification is a material representation of fact upon which reliance is placed when the Department awards the grant. If it is later determined that Sub recipient knowingly rendered an erroneous certification, in addition to any other remedies available to the Federal Government, the Department may terminate this Contract for cause or default. SUBRECIPIENT: City of Denton, a political subdivision of the State of Texas Page 27 of 32 344 DocuSign Envelope 10: BAFCF163-1016-46F4-8664-88542AC23584 DocuSigned by: By: nJi f\-i~~ Name: Todd Hile ensc711BAOD454 .. Title: City Manager Date: 1/15/2021 I 4:04:54 PM PST Page 28 of 32 345 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC235B4 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS FY2020 COMMUNITY DEVELOPMENT BLOCK GRANT Coronavirus Aid, Relief, and Economic Security Act ("CDBG CARES" or "CDBG-CV") Texas Emergency Rental Assistance Program ("TERAP") and Texas Eviction Diversion Program ("TEDP") CONTRACT NO. 70200001013 EXHIBIT A CONTRACT BENCHMARKS City of Denton, a political subdivision of the of State of Texas CONTRACT BENCHMARKS1 AS REFLECTED THROUGH THE MONTHLY EXPENDITURE AND PEFORMANCE REPORT: 1. All subawardee information provided to the Department by February 15, 2021. 2. Contract 20% expended, as provided in the Budget, by fourth month reporting. 3. Contract 40% expended, as provided in the Budget, by sixth month reporting. 4. Contract funds 100% obligated, by July 31, 2021. 5. Contract 70% expended, as provided in the Budget, by ninth month reporting. 6. Contract 100% expended, as provided in the Budget, by thirteen month reporting. 1 The Department may recapture the unexpended funding up to the expenditure benchmark funding, as further detailed in Section 4 D. of this Contract. The Department may recapture all or a portion of funding not obligated by the Contract benchmark. Page 29 of 32 346 DocuSign Envelope 10: BAFCF163-1016-46F4-8664-88542AC23584 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS FY2020 COMMUNITY DEVELOPMENT BLOCK GRANT Coronavirus Aid, Relief, and Economic Security Act (11CDBG CARES" or 11CDBG-CV") Texas Emergency Rental Assistance Program (11TERAP'') and Texas Eviction Diversion Program ("TEDP") CONTRACT NO. 70200001013 EXHIBITS PERFORMANCE STATEMENT AND BENCHMARKS City of Denton, a political subdivision of the State of Texas CONTRACT TERM: 01/15/2021 -01/14/2022 SERVICE AREA: CITY OF DENTON, TX ACTIVITIES DESCRIPTION: A. Estimated number of Households to be assisted: 19 B. Activities: 1. To provide emergency rental assistance to low-to moderate-income tenants impacted by the Coronavirus pandemic, to help them stay housed during the pandemic. 2. To assist eligible tenants with emergency rental assistance made directly to the landlord or property owner, on behalf of the eligible tenant. 3. To provide up to six months of rental assistance with at least one month's worth of current or future rent and not to exceed five months of rent in arrears. 4. To provide up to six months of rental assistance with at least one month's worth of current or future rent and not to exceed five months of rent in arrears to Households who have been sued for eviction (forcible detainer). C. Reporting: By the 15th of each month, Subrecipient shall report: Aggregate-level data to be reported via the Housing Contract System: 1. Summary data for Households served by race, ethnicity, and household income level, and other demographic data as required by HUD. 2. Number of Households that received emergency rental assistance. 3. Number of Households that received emergency rental assistance through the Eviction Diversion program. 4. Total number of Households served. 5. Number of pending Households to receive assistance in the following thirty (30) days. Page 30 of 32 347 DocuSign Envelope 10: BAFCF163-1016-46F4-B664-B8542AC23584 For Texas Eviction Diversion Program: 1. Number of eligible tenants referred to the program for the previous month's activity. 2. Number of ineligible tenants referred to the program for the previous month's activity. 3. Number of eligible landlords referred to the program for the previous month's activity. 4. Number of ineligible landlords referred to the program for the previous month's activity. 5. Number of referred tenants withdrawing from the program. 6. Number of referred landlords withdrawing from the program. Subrecipient must also report household-level data, including demographic data, as described on TDHCA's Excel Monthly Performance Report spreadsheet. Page 31 of 32 348 DocuSign Envelope ID: BAFCF163-1016-46F4-B664-B8542AC235B4 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS FY2020 COMMUNITY DEVELOPMENT BLOCK GRANT Coronavirus Aid, Relief, and Economic Security Act ("CDBG CARES" or "CDBG-CV") Texas Emergency Rental Assistance Program ("TERAP"} and Texas Eviction Diversion Program ("TEDP"} CONTRACT NO. 70200001013 EXHIBITC BUDGET City of Denton, a political subdivision of the State of Texas LINE CATEGORIES CDBG·CV TOTAL CONTRACT p5Q Emergency Payments Rental Assistance2 :;>149,955.31 :;>149,955.31 Eviction Diversion :;>18,744.41 p18,744.41 21A General Administration3 :;>18,744.41 ~18,744.41 TOTAL $187,444.13 ~187,444.13 2 Rental Assistance may also be used for Eviction Diversion without prior Department approval, but must be reported as Eviction Diversion in the Monthly Reporting. 3 After reaching 40% of expenditure reporting of its General Administration funding under this Contract, Sub recipient will not be reimbursed for General Administration funding that is greater than 20% of its reported expenditure of Emergency Payments. Page 32 of 32 349 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-057,Version:1 AGENDA CAPTION Consider adoption of an ordinance of the City of Denton authorizing the City Manager, or his designee, to execute a grant agreement with the United Way of Denton County, Inc. providing for working capital for the Emergency Solutions Grant Program in furtherance of the coordinated system of homeless assistance programs; authorizing the expenditure of funds therefor; and providing an effective date. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™350 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Public Affairs and Community Development CM/ DCM/ ACM: Sara Hensley DATE: February 9, 2021 SUBJECT Consider adoption of an ordinance of the City of Denton authorizing the City Manager, or his designee, to execute a grant agreement with the United Way of Denton County, Inc. providing for working capital for the Emergency Solutions Grant Program in furtherance of the coordinated system of homeless assistance programs; authorizing the expenditure of funds therefor; and providing an effective date. INFORMATION /BACKGROUND Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act to provide much needed resources to help governments, businesses, and individuals respond to the current pandemic. The CARES Act included $4 billion for Emergency Solutions Grants (ESG) funding to support additional homeless assistance and homelessness prevention activities to mitigate the impacts created by coronavirus under the Emergency Solutions Grants program as authorized under subtitle B of title IV of the McKinney- Vento Homeless Assistance Act (42 U.S.C. 11371 et seq.). The ESG-CV funding supports programs in our Housing Crisis Response System (HCRS) providing services to people experiencing and at-risk of homelessness, and to collaboratively address the increased needs of people experiencing homelessness who are disproportionately affected by the COVID-19 and the global pandemic. The funds may be used to cover allowable costs incurred to prevent, prepare for, and respond to COVID-19. ESG ROUND ONE (ESG-CV1) The first allocation of ESG CARES Act funding (ESG-CV1) released by HUD allocated $33,254,679 to the Texas Department of Housing and Community Affairs (TDHCA), the State ESG Recipient. In May, $7,020,131 of these ESG CARES funds was distributed through a competitive application process administered by the Texas Homeless Network (THN), the CoC Lead Agency for the Texas Balance of State Continuum of Care (TX BoS CoC). The City of Denton applied on behalf of Denton County. Thirty-one communities applied and 14 were funded. In October of this year, the City of Denton was awarded $1.425M of ESG-CV funding from the TDHCA to provide homeless services (outreach, shelter, rapid rehousing and homeless prevention) in partnership with agencies throughout Denton County. ESG ROUND TWO (ESG-CV2) The second allocation of ESG CARES Act funding (ESG-CV) released by HUD allocated $64,537,937 to the Texas Department of Housing and Community Affairs (TDHCA), the State ESG Recipient. TDHCA allocated $27,593,278 of these ESG CARES funds to Texas Homeless Network (THN), the CoC Lead Agency for the Texas Balance of State Continuum of Care (TX BoS CoC). TDHCA ESG-CV2 funding is limited to rehousing and homeless prevention eligible activities. THN hosted a competitive application process to make recommendations to TDHCA for funding. The United Way of Denton County (UWDC) City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 351 applied on behalf of Denton County through a competitive application process administered by THN. UWDC was awarded $3,300,333.00 of ESG-CV2 funding from the TDHCA to provide rehousing and homeless prevention assistance in partnership with agencies throughout Denton County. The Emergency Solutions Grant is a reimbursement grant. As one of the largest single allocations of grant funding received in Denton County the UWDC has requested a total of $1,500,000 in working capital from the three government entities, the City of Denton, the City of Lewisville, and Denton County to assist with the distribution of funding for housing assistance. Of the total, $500,000 has been requested from the City. The United Way will repay this grant in accordance with the terms and conditions of a Grant Agreement with interest to the City at the conclusion of the ESG-CV grant program with funds from the $3,300,333 grant award under the ESG-CV2 Service Agreement between the United Way and TDHCA or from other sources if necessary. RECOMMENDATION Recommend approval of the Grant Agreement in support of funding for the Emergency Solutions Grant CARES Act (ESG-CV). EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Ordinance and Grant Agreement Respectfully submitted: Dani Shaw Community Services Manager Courtney Cross Assistant Community Services Manager 352 Page 1 ORDINANCE NO. ___________ AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE A GRANT AGREEMENT WITH THE UNITED WAY OF DENTON COUNTY, INC. PROVIDING FOR WORKING CAPITAL FOR THE EMERGENCY SOLUTIONS GRANT PROGRAM IN FURTHERANCE OF THE COORDINATED SYSTEM OF HOMELESS ASSISTANCE PROGRAMS; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), Public Law 116-136, was signed by President Trump on March 27, 2020, to respond to the growing effects of this historic public health crisis, and allocated $4 billion in Emergency Solutions Grant Program (“ESG-CV”) funds to provide additional funding to state and local governments; and WHEREAS, ESG-CV Grant funding is provided to assist people experiencing homelessness or at risk of homelessness to regain stability in permanent housing quickly after experiencing a housing crisis or homelessness; and WHEREAS, the City has a special concern for making homelessness rare, brief, and nonrecurring; and WHEREAS, the Texas Department of Housing and Community Affairs (“TDHCA”) has awarded to the United Way CARES Act ESG-CV Round 2 funds as part of a coordinated system of homeless assistance programs in the City for the purpose of paying for contractual services named in the United Way’s ESG-CV application to TDHCA for homelessness prevention and rapid re-housing and in response to the COVID-19 pandemic; and WHEREAS, the ESG-CV grant program provides reimbursement of expenditures, so to meet the immediate working capital needs of the United Way for the ESG-CV grant programs, the United Way has requested from multiple entities a total of $1,500,000 in working capital, of which amount a total of $500,000 has been requested from the City; and WHEREAS, pursuant to Resolution 20-2191, the City authorized and ratified the execution of a Letter of Intent to provide the $500,000 requested by the United Way in connection with the ESG-CV grant programs in accordance with the terms of an agreement to be considered by the City Council of the City at a later date; and WHEREAS, the City now wishes to enter into a Grant Agreement with the United Way substantially in the form attached hereto as Exhibit A (the “Agreement”) to provide the United Way with a grant of $500,000 as working capital to be repaid by the United Way, with interest, to the City at the conclusion of the ESG-CV grant program with funds from the $3,300,333 grant awarded to the United Way under its ESG-CV2 Service Agreement with the TDHCA or from other sources if necessary; and WHEREAS, the City Council of the City hereby finds that the Agreement serves a municipal and public purpose, is in the public interest, and is of benefit to the citizens of the City; NOW THEREFORE, 353 THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and recitations contained in the preamble of this Ordinance are incorporated herein by reference. SECTION 2. The City Manager, or his designee, is hereby authorized to execute the Agreement and to carry out the duties and responsibilities of the City under the Agreement, including the expenditure of funds as provided for therein. SECTION 3. This Ordinance shall become effective immediately upon its passage and approval. The motion to approve this Ordinance was made by __________________________ and seconded by _________________________________, the Ordinance was passed and approved by the following vote [___ - ___]: Aye Nay Abstain Absent Mayor Gerard Hudspeth: ______ ______ ______ ______ Birdia Johnson, District 1: ______ ______ ______ ______ Connie Baker, District 2: ______ ______ ______ ______ Jesse Davis, District 3: ______ ______ ______ ______ John Ryan, District 4: ______ ______ ______ ______ Deb Armintor, At Large Place 5 ______ ______ ______ ______ Paul Meltzer, At Large Place 6: ______ ______ ______ ______ PASSED AND APPROVED this the _______ day of _______________________, 2021. ______________________________ GERARD HUDSPETH, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY BY: __________________________________ 354 Page 3 APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: __________________________________ Kendra Kennedy 355 356 357 358 359 360 (Vbkl:J\JTN`l(Vbkl]Ol*N\b]\l l+l:L7V\\Nkl*N\b]\lBNiJal"!lXl hlJlL]_klb]$l (Vbkl&bb]`\Nkl l+l:L7V\\Nkl *N\b]\lBFl"!l D\VbNMlEJkl]Ql*N\b]\l(]d\bkl1\Ll&bb\%l >`NaVMN\bll(+=llBNJaYNkl8J\Nl*N\b]\lBNiJal#! l '+WbUN`l_J`ckl[JklLUJ\TNl\]bVLNlJMM`NaalKklaN\MV\Tl\]bVLNl]PlLUJ\TNl]PlJMM`Naalb]lbUN]bUN`l JLL]`MJ\LNl bUNl _`]fVaV]\al ]PlANLbV]\l 2l&l D\bVYl h`VbbN\l \]bVLNl ]PlaeLULUJ\TNlVal`NLNVgNMlKklbUNl]bUN`l_J`bk lbUNl_J`ckalYJablJMM`NaalMNaVT\JbNMlS`l\]bVLNlaUJYZ`N[JV\laeLUl_J`ckalJMM`NaalR^`l\]cVLN 3;lE3B<+AAl=,lE0+?+=- lbUVal&T`NN[N\blUJalKNN\lNjNLebNMl]\lbUValbUNlHIIlMJkl]Ql ll B=**l049+:&;l (5BGl:&;&.+@l ?=A&l?3=Al (5BGlA+(@+C&?Gl &&@=;l9+&9l )6BGl&BB=@;+Gl /l 0+;*+?A=;l >?+l 4*+;Bll(+=l A+(?+B&?Gl Kendra Kennedy 361 362 Exhibit A Texas Department of Housing and Community Affairs Service Agreement with the United Way of Denton County Contract: #44206070041 FY 2020 Emergency Solutions Grants (ESG) Program Contract Term: 01/14/2021-03/31/2022 Agency: United Way of Denton County 363 44206070041, United Way of Denton County, Inc. Page 1 of 31 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS EMERGENCY SOLUTIONS GRANTS PROGRAM (ESG) AND CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT (CARES ACT) CONTRACT NUMBER 44206070041 WITH United Way of Denton County, Inc., A TEXAS NONPROFIT CORPORATION CFDA No.: 14.231 Emergency Solutions Grants Program Awarding Federal Agency: United States Department of Housing and Urban Development Federal Award Number: E-20-DW-48-0001 Federal Award Year: 2020 Pass Through Entity: Texas Department of Housing and Community Affairs Unique Entity Identifier Number: 782112114 SECTION 1. PARTIES TO THE CONTRACT This Fiscal Year (FY) 2020 Emergency Solutions Grants Program and CARES Act Contract Number 44206070041 (“Contract”) is made by and between the Texas Department of Housing and Community Affairs, a public and official agency of the State of Texas, (“Department”) and United Way of Denton County, Inc., a Texas nonprofit corporation (“Subrecipient”). Subrecipient is a private nonprofit organization as defined in 24 CFR §576.2. SECTION 2. CONTRACT TERM FOR PERFORMANCE AND CLOSE-OUT PROCESS This Contract shall commence on January 14, 2021 and, unless earlier terminated as provided herein, terminate as follows: (1) the Subrecipient is permitted to incur allowable expenses under this Contract until March 31, 2022 (“Contract Term”); and (2) the Department’s obligations under the Contract shall end forty-five (45) calendar days after the Contract Term, and is conditioned on the Subrecipient’s successful completion of the terms herein (“Close-Out Process”). SECTION 3. SUBRECIPIENT PERFORMANCE A. Subrecipient shall develop and implement an Emergency Solutions Grants Program (“ESG”) in accordance with the terms of this Contract and the exhibits and addendums attached to this Contract incorporated herein for all relevant purposes. Subrecipient shall develop and implement the ESG to assist homeless individuals or persons at risk of homelessness to quickly regain stability in permanent housing. Subrecipient shall implement the ESG in accordance with, but not limited to, the provisions of the Homeless Emergency Assistance and Rapid Transition to Housing Act as amended (42 U.S.C. §11302 et. seq.), as amended (“Federal Act”); Coronavirus Aid, Relief, and Economic Security Act (Public Law 116-136) (“CARES Act”); the U.S. Department of Housing and Urban Development (“HUD”) regulations codified in 24 CFR Parts 91,200, and 576 (“Federal Regulations”); CPD Notice 20-08 (“Notice”); the implementing State rules under Title 10, Part 1, Chapter 1, Chapter 2 and Chapter 7, Subchapter A and Subchapter C, of the Texas Administrative Code (collectively, the “ESG State Rules”).Subrecipient shall perform all activities in accordance with the terms of the Budget and Performance Statement attached hereto as Exhibit A, the Certification Regarding Lobbying for Contracts, Grants, Loans, and Cooperative Agreements attached hereto as Addendum A, Certification Regarding Drug-Free Workplace Requirements attached hereto as Addendum B, the Certification Regarding Debarment, Suspension and Other Responsibility Matter attached hereto as Addendum C, the assurances, certifications, and all other statements made by Subrecipient in its ESG application, and with all other terms of this Contract. All exhibits and addendums attached hereto are incorporated herein for all relevant purposes. B. The Subrecipient is liable for any associated disallowed costs if a person who is eligible to receive the benefit or services described in the Budget and Performance Statement attached hereto as Exhibit A 364 44206070041, United Way of Denton County, Inc. Page 2 of 31 does not actually receive them and the Subrecipient reported the costs or received reimbursement for the costs. C. Performance related to established targets will be reported in the ESG monthly performance report and failing to meet targets may be considered in deobligation of funds in this Contract, and in future funding opportunities with the Department. D. All funds must be expended in accordance with the Budget and Performance Statement attached hereto as Exhibit A, prior to the expiration of the Contract Term and reported within the Close-Out Processing date. The Department reserves the right to request an additional expenditure plan if it appears funds will not be expended within the Contract Term, and may deobligate funding in whole or in part if expenditure deadlines are missed. E. SERVICE AREA. ESG activities under this Contract are limited to occur in areas located in Denton County, Texas, and in Continuum of Care Region Number TX-607 (Texas Balance of State) unless otherwise approved by the Department by amendment to this Contract. F. LAND USE RESTRICTION AGREEMENT. Some Subrecipient activities may require that Subrecipient enter into a land use restriction agreement in accordance with Section 35(C) of this Contract, as further detailed in 10 TAC §7.3. SECTION 4. DEPARTMENT FINANCIAL OBLIGATIONS A. In consideration of Subrecipient's ongoing and satisfactory performance of this Contract, Department shall reimburse Subrecipient for the actual allowable costs incurred beginning not earlier than March 13, 2020 (except for project based rental assistance which may be reimbursed beginning the date of environmental clearance or March 13, 2020, whichever is later), and prior to the expiration of the Contract Term by Subrecipient in the amount specified in the Budget and Performance Statement attached hereto as Exhibit A. B. Department's obligations under this Contract are contingent upon the actual receipt and availability by the Department of adequate Emergency Solutions Grants Program and CARES Act (“ESG-CV”) funds from HUD. If sufficient ESG-CV funds are not available to make payments under this Contract, Department shall notify Subrecipient in writing within a reasonable time after such fact is determined. Department may then terminate this Contract and will not be liable for the failure to make any payment to Subrecipient under this Contract. C. Notwithstanding any other provision of this Contract, Department shall only be liable to Subrecipient for eligible costs incurred or performances rendered for activities specified in 24 CFR Part 576, the Notice, and the CARES Act. D. In addition to the pre-award costs allowable under 2 CFR §200.458, Subrecipient may submit for reimbursement costs for activities that are exempt under 24 CFR §58.34 or Categorical Exclusions under §58.35(b), not subject to §58.5 and that were performed in accordance with this Contract. E. The Department shall not be liable for costs submitted after the Close-Out Process date which is 45 calendar days after end of the Contract Term. F. The Department shall not be liable for costs related to providing emergency shelter after the earlier of the end of the Contract Term or January 31, 2022. 365 44206070041, United Way of Denton County, Inc. Page 3 of 31 SECTION 5. METHOD OF PAYMENT/CASH BALANCES A. DISBURSEMENT PROCEDURES. Subrecipient shall establish procedures to minimize the time elapsing between the disbursement of ESG-CV funds from Department to Subrecipient and the expenditure of such funds by Subrecipient. B. REIMBURSEMENT. The Department will reimburse Subrecipients for eligible costs incurred during the contract term whereby reimbursement of costs incurred by a Subrecipient is made only after submission of the Monthly Performance Report in accordance with the requirements of 10 TAC §7.5. C. ALLOWABLE EXPENSES. All funds paid to Subrecipient pursuant to this Contract are for the exclusive benefit of the eligible Program Participants of ESG services and for the payment of allowable expenditures. D. REFUND. Subrecipient shall refund to Department any sum of money which has been paid to Subrecipient by Department, which Department determines has not been spent strictly in accordance with the terms of this Contract. Subrecipient shall make such refund no later than the date specified in the notice that repayment is required, but if no date is specified within five (5) business days in accordance with 10 TAC §1.21(e) SECTION 6. ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES AND AUDIT REQUIREMENTS A. ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES. 1. Subrecipient is a private nonprofit organization, and will follow the requirements under 2 CFR Part 200. 2. If Subrecipient wishes to utilize procurement flexibilities as provided for in the CARES Act, it must submit a procurement plan to the Department, and the Department must approve the plan in writing. B. LIABILITY FOR COSTS. Department shall not be liable to Subrecipient for certain costs, including but not limited to costs which: 1. Are not used to prevent the spread of, prepare for, and respond to Coronavirus Disease 2019 pandemic (“COVID-19”) among individuals and families who are homeless or receiving homeless assistance or are not used to support additional homeless assistance and homelessness prevention activities to mitigate the impacts created by COVID-19; 2. Have been reimbursed to Subrecipient or are subject to reimbursement to Subrecipient by any source other than Department; 3. Are not allowable costs; 4. Are incurred to involuntary separate a family; 5. Are incurred to provide certain legal services for immigration and citizenship matters and issues relating to mortgages; 6. Are incurred to provide certain substance abuse treatment services; 7. Are incurred to pay arrears for temporary storage fees; 8. Are incurred to pay or modify a debt; 366 44206070041, United Way of Denton County, Inc. Page 4 of 31 9. Are incurred to acquire property or to construct new property (except as approved by the Department in writing in accordance with Section 9E ; 10. Are incurred for the rehabilitation of structures to the extent that those structures are used for explicitly religious activities; 11. Are expended on activities prior to the submission of a Request for Release of Funds and prior to the release of funds by HUD; 12. Are used in a manner that requires persons experiencing homelessness to receive treatment or perform any other prerequisite activities as a condition for receiving shelter, housing, or other services or assistance; 13. Are not strictly in accordance with the terms of this Contract, including the exhibits; 14. Have not been reported to Department during the Close-Out Process of this Contract; 15. Are not incurred between March 13, 2020, and before the expiration of the Contract Term (except for project based rental assistance which may be reimbursed for costs incurred after the date of environmental clearance or March 13, 2020, whichever is later); or 16. Are incurred by a unit of general purpose local government, to replace funds provided by a local government for street outreach and emergency shelter services during the preceding 12-month period, without a HUD-approved exception. C. ACCESS. Department reserves the right to conduct additional audits of the funds received and performances rendered under this Contract. Subrecipient agrees to permit Department or its authorized representative to audit Subrecipient’s records related to its performance under this Contract and to obtain any documents, materials, or information necessary to facilitate such audit. D. AUDIT. In accordance with 10 TAC §1.403(e), if Subrecipient expends $750,000 or more in federal and/or state awards or have an outstanding loan balance associated with a federal or state resource of $750,000 or more with continuing compliance requirements, or a combination thereof must have a Single Audit or Program-Specific Audit conducted. If the Subrecipient's Single Audit is required by 2 CFR Part 200, Subpart F, the report must be submitted to the Federal Audit Clearinghouse (“FAC”) the earlier of 30 calendar days after receipt of the auditor's report or nine (9) months after the end of its respective fiscal year. As noted in 10 TAC §1.403. Subrecipient is required to submit a notification to Department within five (5) business days of submission to the FAC. Along with the notice, indicate if the auditor issued a management letter. If there is a management letter, a copy of the letter must be sent to the Department. Both the notice and the copy of the management letter, if applicable, must be submitted to SAandACF@tdhca.state.tx.us. E. AUDIT CERTIFICATION FORM. For any fiscal year ending within and the year after the Contract Term, Subrecipient must submit an Audit Certification Form (available from the Department) within sixty (60) calendar days after the Subrecipient's fiscal year end as outlined in 10 TAC §1.403. F. SUBAWARDS. The Subrecipient shall include this language in any subcontract that provides the Department or HUD the ability to directly review, monitor, and/or audit the operational and financial performance and/or records of work performed under this Contract. 367 44206070041, United Way of Denton County, Inc. Page 5 of 31 SECTION 7. TERMINATION, DEOBLIGATION, AND SUSPENSION A. TERMINATION. Department may terminate or suspend this Contract, in whole or in part, at any time Department determines that there is cause for termination. Cause for termination includes, but is not limited to, Subrecipient’s failure to comply with any term of this Contract or reasonable belief that Subrecipient cannot or will not comply with the requirements of this Contract. If the Department determines that a Subrecipient has failed to comply with the terms of the Contract, or to provide services that meet appropriate standards, goals, or other requirements established by the Department, the Department will notify Subrecipient of the deficiencies to be corrected and may require the deficiencies be corrected prior to implementing suspension. B. DEOBLIGATION. Any decision to obligate or deobligate additional funds shall be made in writing by Department in its sole but reasonable discretion based upon the status of grant funding to Department and Subrecipient’s overall compliance with the terms of this Contract. C. SUSPENSION. Nothing in this Section 7 shall be construed to limit Department’s authority to withhold payment and immediately suspend this Contract if Department identifies possible instances of fraud, abuse, waste, fiscal mismanagement, or other deficiencies in Subrecipient’s performance. D. LIABILITY. Department shall not be liable for any costs incurred by Subrecipient during suspension or after termination of this Contract. Subrecipient shall not be relieved of any liability to Department for damages by virtue of any breach of this Contract by Subrecipient E. WITHHOLDING OF PAYMENTS. Notwithstanding any exercise by Department of its right of termination or suspension, Department may withhold any payment due to Subrecipient until such time as the exact amount of damages due to Department or other liability is agreed upon or is otherwise determined in writing between the Parties. SECTION 8. MATCH REQUIREMENT No Match funds are required to be provided under the Contract. SECTION 9. ALLOWABLE EXPENDITURES A. The permissibility of Subrecipient’s costs incurred in the performance of this Contract shall be determined in accordance with the provisions of Section 6 and the regulations set forth in 10 TAC §7.24, 24 CFR §576.100 through 24 CFR §576.109, and the CARES Act, subject to the limitations and exceptions set forth in this Section. B. ESG funds may be used for administrative activities as well as program components as set forth in 10 TAC §7.32(b), 24 CFR §576.101 through §576.107, and the CARES Act, only as reflected in the Budget and Performance Statement attached as Exhibit A. C. Administrative costs incurred by Subrecipient in performing this Contract are to be based on actual programmatic expenditures and shall be allowed up to the amount outlined in the Budget and Performance Statement attached hereto as Exhibit A of this Contract. Eligible administrative costs include: 1. General management, oversight and coordination including indirect costs (with an indirect cost rate as approved by the Federal cognizant agency), and 2. Environmental review. 368 44206070041, United Way of Denton County, Inc. Page 6 of 31 D. In addition to allowable costs under 10 TAC §7.24 and 24 CFR §576.100 through 24 CFR §576.109, funds may be utilized for training on infectious disease prevention and mitigation and to provide hazard pay, including for time worked on or after March 13, 2020, and the end of the Contract Term, for staff working directly to prevent the spread of, prepare for, and respond to COVID-19 among persons who are homeless or at risk of homelessness. E. In addition to allowable costs under 10 TAC §7.24 and 24 CFR §576.100 through 24 CFR §576.109, funds may be utilized for may be used to provide temporary emergency shelters (through leasing of existing property, temporary structures, or other means) prevent the spread of, to prepare for, and respond to COVID-19. If Subrecipient intends to expend funds for temporary emergency shelter for shelter operations, renovation, major rehabilitation, construction, in a manner other than leasing of existing property, it must submit an expenditure plan to the Department and the Department must approve the plan in writing. SECTION 10. TERMINATING ASSISTANCE A. If a Program Participant violates program requirements, the Subrecipient may terminate the assistance in accordance with Section 576.402 of the Federal Regulations. B. Termination under this Section 10 does not bar the Subrecipient from reinstating the same individual or family at a later date and providing further assistance under this Contract. SECTION 11. RECORDKEEPING REQUIREMENTS A. GENERAL. Subrecipient shall comply with all the recordkeeping requirements set forth in 10 TAC §7.8 and 24 CFR §576.500, and shall maintain fiscal and programmatic records and supporting documentation for all expenditures made under this Contract B. OPEN RECORDS. Subrecipient acknowledges that all information collected, assembled, or maintained by Subrecipient pertaining to this Contract, except records confidential by law, is subject to the Texas Public Information Act (Chapter 552 of Texas Government Code) and must provide citizens, public agencies, and other interested parties with reasonable access to all records pertaining to this Contract subject to and in accordance with the Texas Public Information Act. C. ACCESS TO RECORDS. Unless prohibited by applicable laws, Subrecipient shall give HUD, the U.S. General Accounting Office, the Texas Comptroller, the State Auditor’s Office, and Department, or any of their duly authorized representatives, access to and the right to examine and copy, on or off the premises of Subrecipient, all records pertaining to this Contract. Such right to access shall continue as long as the records are retained by Subrecipient. D. RECORD RETENTION. Subrecipient agrees to maintain such records in an accessible location for the greater of five (5) years after the expenditure of all funds from the grant, or the period specified below: 1. Where funds from this Contract are used for the renovation of an emergency shelter involves costs charged to the ESG grant that exceed seventy-five percent (75%) of the value of the building before renovation, records must be retained until ten (10) years after the date that ESG funds are first obligated for the renovation. 2. Where funds from this Contract are used to convert a building into an emergency shelter and the costs charged to the ESG grant for the conversion exceed seventy-five percent (75%) of the value of the building after conversion, records must be retained until ten (10) years after the date that ESG funds are first obligated for the conversion. 369 44206070041, United Way of Denton County, Inc. Page 7 of 31 E. EXCEPTIONS. Exceptions to the record retention periods outlined above include: (i) if any litigation claim, negotiation, inspection, or other action has started before the expiration of the required retention period records must be retained until completion of the action and resolution of all issues which arise under it; and (ii) a date consistent with any other period required by federal or state law or regulation. Subrecipient agrees to cooperate with any examination conducted pursuant to this Subsection E. Upon termination of this Contract, all records are property of the Department. F. CARES ACT FUNDS. Subrecipient shall track, account for, and report on this funding separate from any other ESG or other funding. Subrecipient will report to the Department or to HUD upon request to what extent these funds were used as matching funds for other activities or programs. G. SUBCONTRACTS. Subrecipient shall include the substance of this Section 11 in all subcontracts under this Contract. SECTION 12. REPORTING REQUIREMENTS A. REPORTS. Subrecipient shall submit to Department such reports on the performance of this Contract as may be required by Department including, but not limited to, the reports specified in this Section 12. B. MONTHLY REPORTS. Pursuant to 10 TAC §7.5, Subrecipient shall electronically submit to the Department no later than the last day of each month following the preceding month in the Contract Term a performance report listing required demographic information, the number of persons assisted, and the outcomes achieved in the previous month, and an expenditure report listing all expenditures of funds under this Contract during the previous month. These reports are due even if Subrecipient has no new activity to report during the month. C. CONSTRUCTION ACTIVITIES. If this Contract provides assistance for acquisition, renovation, rehabilitation, or conversion, in addition to the electronic final report, Subrecipient shall submit cover photographs of the finished construction work, and verification of passed inspections in the form of certificate occupancy not later than the last day of the Close-Out Process date. This is not required for those temporary emergency shelters that have been determined by State or local health officials to be necessary to prevent the spread of. prepare for, and respond to COVID-19, and that were approved by the Department in accordance with Section 9E of this Contract, except for the Accessibility Standards required by 10 TAC Chapter 1 Subchapter B, as further detailed in this Contract. D. DATA COLLECTION. Pursuant to 10 TAC §7.6, Subrecipient must enter client-level data into the Homeless Management Information System (“HMIS”). Victim service or legal service providers may use a comparable database. E. INVENTORY REPORTS. Subrecipient shall submit to Department no later than the last day of the Close- Out Process a cumulative inventory report of all real property and tangible personal property having a useful life of more than one year or a per-unit acquisition cost which equals or exceeds the lesser of the capitalization level established by entity for financial statement purposes, or $5,000, acquired in whole or in part with funds received under this or previous ESG contracts, in accordance with 10 TAC §§1.401 and 1.407. F. DEFAULT. If Subrecipient fails to submit within forty-five (45) calendar days of its due date, any report or response required by this Contract, including responses to monitoring reports, Department may, in its sole discretion, suspend payments, , and initiate proceedings to terminate the Contract. If Subrecipient receives ESG funds from Department over two or more Contract Terms, termination proceedings may be initiated on this Contract for Subrecipient’s failure to submit a report, including an audit report, from a prior contract. 370 44206070041, United Way of Denton County, Inc. Page 8 of 31 G. ANNUAL REPORTS. Subrecipient must submit yearly information as required by HUD for the Consolidated Annual Performance and Evaluation Report, including but not limited to HMIS exports and information related to compliance with Section 3 of the HUD Act of 1968, as required by HUD. SECTION 13. CHANGES AND AMENDMENTS A. AMENDMENTS AND CHANGES REQUIRED BY LAW. Any change, addition, or deletion to the terms of this Contract required by a change in state or federal law or regulation is automatically incorporated herein and is effective on the date designated by such law or regulations without the requirement of a written amendment hereto. Said changes, additions, or deletions referenced under this Subsection A of Section 13 of this Contract may be further evidenced in a written amendment. B. GENERAL. Except as specifically provided otherwise in this Contract, any changes, additions, or deletions to the terms of this Contract shall be in writing and executed by both Parties to this Contract. C. FACSIMILE SIGNATURES. If any Party returns an executed copy by facsimile machine or electronic transmission, the signing party intends the copy of its authorized signature printed by the receiving machine or the electronic transmission, to be its original signature. D. REQUEST. Written requests for Contract amendments must be received in writing by the Department by no later than thirty (30) calendar days prior to the end of the Contract Term, and such requests will be considered at the discretion of the Department in accordance with 10 TAC §7.4(e), except that requests to move funds to Emergency Shelter or Street outreach will only be considered if any ESG CARES first or second allocation funds are returned or made available, and are reallocated at the discretion and authority of the Department’s Executive Director or designee. SECTION 14. PROGRAM INCOME A. Program income includes any gross income received by the Subrecipient, its Affiliate, or their subcontractor directly generated by a grant-supported activity, or earned only as a result of the grant agreement during the Contract Term. Any security or utility deposits refunded from vendor or fees associated with ESG-funded emergency shelters or other ESG program activity must be treated as program income. B. In accounting for program income, Subrecipient and its Affiliate or subcontractor must accurately reflect the receipt of such funds separate from the receipt of federal funds and Subrecipient /Affiliate or subcontractor funds. C. Program income earned and expended during the Contract Term by Subrecipient or subcontractor must be reported to the Department and the costs must be eligible ESG-CV costs that supplement the Subrecipient’s ESG program. D. Program income received by the Subrecipient and its Affiliate or subcontractor during the Contract Term and not expended during the Contract Term along with program income received two (2) years following the end of the Contract Term must be returned to the Department. Program income must be returned within ten (10) working days of receipt by the Subrecipient/Affiliate or subcontractor. E. Income directly generated by a grant-support activity received by the Subrecipient and its Affiliate or subcontractor after the two (2) year period described in Subsection D of this Section 14 is no longer program income, and may be retained by the Subrecipient or subcontractor. 371 44206070041, United Way of Denton County, Inc. Page 9 of 31 SECTION 15. INDEPENDENT SUBRECIPIENT AND INDEMNIFICATION It is agreed that Department is contracting with Subrecipient as an independent contractor. Subrecipient agrees to hold the Department harmless and to the extent allowed by law indemnify Department against any disallowed costs or other claims which may be asserted by any third party occurring or in any way incident to, arising out of, or in connection with the services to be performed by Subrecipient under this Contract. SECTION 16. PURCHASE AND PROCUREMENT STANDARDS A. Subrecipient shall comply with 2 CFR Part 200, this Contract, and all applicable federal, state, and local laws, regulations, and ordinances for making procurements under this Contract, and as detailed in Section 6B(2) of this Contract. B. In the use of ESG-CV funds under this Contract, Subrecipient and its contractors must comply with Section 6002 of the Solid Waste Disposal Act, as applicable and as amended by the Resource Conservation and Recovery Act. The requirements of Section 6002 include procuring only items designated in guidelines of the Environmental Protection Agency (“EPA”) at 40 CFR Part 247 that contain the highest percentage of recovered materials practicable, consistent with maintaining a satisfactory level of competition, where the purchase price of the item exceeds $10,000 or the value of the quantity acquired by the preceding fiscal year exceeded $10,000; procuring solid waste management services in a manner that maximizes energy and resource recovery; and establishing an affirmative procurement program for procurement of recovered materials identified in the EPA guidelines. SECTION 17. SUBCONTRACTS/SUBGRANTS A. Subrecipient may not subgrant funds awarded under this Contract. Any subcontract for the delivery of services will be subject to monitoring by the Department per Section 24 of this Contract. B. Intentionally Left Blank. C. In no event shall any provision of this Section 17 be construed as relieving Subrecipient of the responsibility for ensuring that the performances rendered under all subcontracts are rendered so as to comply with all of the terms of this Contract. Department maintains the right to monitor and require Subrecipient’s full compliance with the terms of this Contract. SECTION 18. ENVIRONMENTAL REVIEW A. Activities are subject to environmental review under 24 CFR Part 58, unless waived under the CARES Act for those temporary emergency shelters that have been determined by State or local health officials to be necessary to prevent the spread of, prepare for, and respond to COVID-19.. The Subrecipient shall supply to the Department all available, relevant information necessary to perform any environmental review required for each property or activity as required by 24 CFR Part 58. B. The Subrecipient or subcontractor may not commit or expend any funds on acquisition, construction, project-based vouchers, or leasing activities that subject to environmental regulations where ESG funds are part of the project (as defined in 24 CFR §58.32), until an environmental review that meets the standards outlined in 24 CFR Part 58 has been reviewed and approved in writing by the Department. SECTION 19. WRITTEN STANDARDS A. Subrecipient must establish and consistently apply written standards within its program and written standards must contain the required topics listed in 24 CFR §576.400(e). Subrecipient must provide the Department a copy of the Subrecipient’s written standards. If Subrecipient changes the written standards 372 44206070041, United Way of Denton County, Inc. Page 10 of 31 during the Contract Term, Subrecipient must submit revised standards to the Department before implementation. B. Subrecipient may not require persons or families experiencing homelessness to receive treatment or perform any prerequisite activity or activities as a condition for receiving shelter, housing, or other services under this Contract. C. The written standards must include the expanded definition of At-risk of Homelessness as provided under the CARES Act, which expands the definition to include those individuals or households at or below 50% of Area Median Family Income. D. Subrecipient shall develop and implement procedures to ensure the confidentiality of records pertaining to any individual provided family violence prevention or treatment services under any project assisted under this Contract, and that the address or location of any family violence shelter project assisted will, except with written authorization of the person or persons responsible for the operation of such shelter, not be made public. SECTION 20. MANAGEMENT OF EQUIPMENT AND INVENTORY Subrecipient shall comply with 2 CFR Part 200, and 10 TAC §1.407. SECTION 21. TRAVEL For any travel for which Subrecipient seeks reimbursements under this Contract, Subrecipient shall abide by travel polities that adhere to 2 CFR Part 200 or the State of Texas travel policies for any travel funded by this Contract either directly or indirectly. Subrecipient’s written travel policy shall delineate the rates that Subrecipient shall use in computing the travel and per diem expenses of its board members and employees. SECTION 22. INSURANCE AND BONDING REQUIREMENTS A. INSURANCE. Subrecipient shall maintain adequate personal injury and property damage liability insurance. Subrecipient is encouraged to obtain pollution occurrence insurance in addition to the general liability insurance. Generally, regular liability insurance policies do not provide coverage for potential effects of many health and safety measures, such as lead disturbances and other pollution occurrence items. Subrecipient should review existing policies to determine if lead contamination is covered. B. BONDING REQUIREMENTS. Subrecipient shall comply with the bonding requirements in 10 TAC §1.405 and §1.406. SECTION 23. LITIGATION AND CLAIMS Subrecipient shall give Department immediate written notice of any claim or action filed with a court or administrative agency against Subrecipient and arising out of the performance of this Contract or any subcontract hereunder. Subrecipient shall furnish to Department copies of all pertinent papers received by Subrecipient with respect to such action or claim. SECTION 24. TECHNICAL ASSISTANCE AND MONITORING Department may issue technical guidance to explain the rules and provide directions on terms of this Contract. Department or its designee may conduct periodic on or off-site monitoring and evaluation of the efficiency, economy, and efficacy of Subrecipient’s performance of this Contract. Department will advise Subrecipient in writing of any deficiencies noted during such monitoring. Department will provide technical assistance to Subrecipient and will require or suggest changes in Subrecipient’s program implementation or in Subrecipient’s 373 44206070041, United Way of Denton County, Inc. Page 11 of 31 accounting, personnel, procurement, and management procedures in order to correct any deficiencies noted. Department may conduct follow-up visits to review and assess the efforts Subrecipient has made to correct previously noted deficiencies. Department may suspend or terminate this Contract, or invoke other remedies in the event monitoring or other reliable sources reveal material deficiencies in Subrecipient’s performance or if Subrecipient fails to correct any deficiency within the time allowed by federal or state law or regulation or by the terms of this Contract. SECTION 25. LEGAL AUTHORITY A. LEGAL AUTHORITY. Subrecipient assures and guarantees that it possesses the legal authority to enter into this Contract, to receive and manage the funds authorized by this Contract, and to perform the services Subrecipient has obligated itself to perform hereunder. The execution, delivery, and performance of this Contract will not violate Subrecipient’s constitutive documents or any requirement to which Subrecipient is subject and represents the legal, valid, and binding agreement of Subrecipient, enforceable in accordance with its terms. B. SIGNATURE AUTHORITY. The person signing this Contract on behalf of Subrecipient hereby warrants that he/she has been duly authorized by Subrecipient's governing board to execute this Contract on behalf of Subrecipient and to validly and legally bind Subrecipient to the terms, provisions and performances herein. C. TERMINATION. Department shall have the right to terminate this Contract if there is a dispute as to the legal authority of either Subrecipient or the person signing this Contract on behalf of Subrecipient to enter into this Contract or to render performances hereunder. Subrecipient is liable to Department for any money it has received from Department for performance of the provisions of this Contract, if the Department has terminated this Contract for reasons enumerated in this Section 25. D. MERGER; DEFAULT. Subrecipient understands that it shall be an event of default under this Contract, if the Subrecipient liquidates, terminates, dissolves, merges, consolidates or fails to maintain good standing in the State of Texas, and such is not cured prior to causing material harm to Subrecipient’s ability to perform under the terms of this Contract. E. NONPROFIT ORGANIZATION. Subrecipient is a private nonprofit charitable organization organized and operated exclusively for exempt purposes set forth in section 501(c)(3) of the Internal Revenue Code, Subrecipient is and will continue to remain duly organized, validly existing and in good standing under the laws governing its creation and existence, and will continue to be duly authorized and qualified to transact any and all applicable business contemplated hereunder in the State of Texas, and possesses and will continue to possess all requisite authority, power, licenses, permits and franchises to conduct its business and to execute, deliver and comply with its obligations under the terms of this Contract, the execution, delivery and performance of which have been or will be duly authorized by all necessary action. SECTION 26. COMPLIANCE WITH LAWS A. FEDERAL, STATE AND LOCAL LAW. Subrecipient shall comply with the McKinney-Vento Homelessness Assistance Act, the federal rules and regulations promulgated under 24 CFR Parts 58, 91, and 576, Title 10, Part 1 of the Texas Administrative Code, and all other applicable federal, state, and local laws and regulations applicable to the performance of this Contract. Subrecipient shall not violate any federal, state, or local laws, stated herein or otherwise, nor commit any illegal activity in the performance of or associated with the performance of this Contract. No funds under this Contract shall be used for any illegal activity or activity that violates any federal, state or local laws. B. DRUG-FREE WORKPLACE ACT OF 1988. The Subrecipient affirms by signing this Contract and the “Certification Regarding Drug-Free Workplace Requirements” attached hereto as Addendum B that it is 374 44206070041, United Way of Denton County, Inc. Page 12 of 31 implementing the Drug-Free Workplace Act of 1988 (41 U.S.C. §701, et seq) and HUD’s implementing regulations including, without limitation, 2 CFR Parts 182 and 2429. C. LIMITED ENGLISH PROFICIENCY (“LEP”). Subrecipient must provide program applications, forms, and educational materials in English, Spanish, and any appropriate language, based on the needs of the service area and in compliance with the requirements in Executive Order 13166 of August 11, 2000. To ensure compliance, the Subrecipient must take reasonable steps to insure that LEP persons have meaningful access to programs and activities. Meaningful access may entail providing language assistance services, including oral and written translation, where necessary. D. LEAD-BASED PAINT. Lead-based paint remediation and disclosure applies to all ESG-CV funded shelters and all housing occupied by participants. The Lead-Based Paint Poisoning Prevention Act (42 U.S.C. §§4821-4846), the Residential Lead-Based Paint Hazard Reduction Act of 1992 (42 U.S.C §§4851-4856), and the relevant subparts of the implementing regulations at 24 CFR Part 35, Subparts A, B, H, J, K, M, and R apply to activities under this grant program. The Subrecipient must also comply with the Lead, Renovation, Repair, and Painting Program Final Rule, 40 CFR Part 745, where applicable. E. PROTECTED HEALTH INFORMATION. If Subrecipient collects or receives documentation for disability, medical records or any other medical information in the course of administering the ESG CARES Act Program, Subrecipient shall comply with the Protected Health Information state and federal laws and regulations, as applicable, under 10 TAC §1.24, Chapter 181 of the Texas Health and Safety Code, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) (Pub.L. 104–191, 110 Stat. 1936, enacted August 21, 1996), and the HIPAA Privacy Rules (45 CFR Part 160 and Subparts A and E of 45 CFR Part 164). F. INFORMATION SECURITY AND PRIVACY REQUIREMENTS. 1. General. Subrecipient shall comply with the information security and privacy requirements under 10 TAC §1.24 to ensure the security and privacy of Protected Information (as said term is defined under 10 TAC §1.24). 2. Information Security and Privacy Agreement (“ISPA”). Prior to beginning any work under this Contract, Subrecipient shall either (i) have an effective, fully executed ISPA, as required by 10 TAC §1.24, on file with the Department, or (ii) will execute and submit to the Department an ISPA in accordance with instructions found on the Department’s website at the “Information Security and Privacy Agreement” link. G. VIOLENCE AGAINST WOMEN ACT (“VAWA”). VAWA provides basic protections for applicants and residents receiving rental assistances. Pursuant to 24 CFR §576.409 the “Notice of Occupancy Rights under the Violence Against Women Act” based on HUD form 5380, and the “Certification of Domestic Violence, Dating Violence, Sexual Assault, or Stalking,” HUD form 5382, must be provided by the ESG Subrecipient to: 1. All applicants for short- and medium-term rental assistance at the time of admittance or denial; 2. Program Participants of short- and medium-term rental assistance prior to execution of a Rental Assistance Agreement; 3. Program Participants of short- and medium-term rental assistance with any notification of eviction or notification of termination of assistance; and 4. Program Participants of short- and medium-term rental assistance either during an annual recertification or lease renewal process, whichever is applicable. 375 44206070041, United Way of Denton County, Inc. Page 13 of 31 H. CONFIDENTIALITY: COMPLIANCE WITH VIOLENCE AGAINST WOMEN ACT. Subrecipient shall develop and implement procedures to ensure the confidentiality of records pertaining to any individual provided family violence prevention or treatment services under any project assisted under this Contract, and that the address or location of any family violence shelter project assisted will, except with written authorization of the person or persons responsible for the operation of such shelter, not be made public in accordance with 24 CFR §5.2007. I. EMERGENCY TRANSFER PLAN. Subrecipient will be required to develop and follow an Emergency Transfer Plan pursuant to 24 CFR §5.2005(e) that will inform Program Participants of the availability of the Emergency Transfer Plan. Within three calendar days after Program Participants request transfers, Subrecipient will inform Program Participants of their eligibility under their Emergency Transfer Plans, and keep records of all outcomes. J. DISPLACED PERSONS. Subrecipient must follow Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (42 U.S.C. §§4201 – 4655) (“URA”) and its implementing regulations at 49 CFR Part 24, Subpart B, and HUD Handbook 1378. K. SECTION 3. If participating in covered activities, Subrecipient if utilizing ESG funds for construction, renovation, repair, rehabilitation, or conversion of buildings is responsible for compliance with 24 CFR Part 75, referred to as “Section 3,” and shall include the requirements of Section 3 in all subcontracts covered by Section 3. Homeless individuals have hiring priority over Section 3 residents. L. PREVENTION OF TRAFFICKING. Subrecipient and its contractors must comply with Section 106(g) of the Trafficking Victims Protection Act of 2000, as amended (22 U.S.C. §7104 et seq.). If Subrecipient or its contractor or subcontractor engages in, or uses labor recruiters, brokers or other agents who engage in any of the prohibited activities under Section 106(g) of the Trafficking Victims Protection Act of 2000, Department may terminate this Contract and Subrecipient hereby agrees and acknowledges that upon termination, Subrecipient's rights to any funds shall be terminated. SECTION 27. PREVENTION OF WASTE, FRAUD, AND ABUSE A. Subrecipient shall establish, maintain, and utilize systems and procedures to prevent, detect, and correct waste, fraud, and abuse in activities funded under this Contract. The systems and procedures shall address possible waste, fraud, and abuse by Subrecipient, its employees, clients, vendors, subcontractors, to the extent they are permitted, and administering agencies. Subrecipient’s internal controls systems and all transactions and other significant events are to be clearly documented, and the documentation is to be readily available for monitoring by Department. B. Subrecipient shall give Department complete access to all of its records, employees, and agents for the purpose of monitoring or investigating the ESG Program. Subrecipient shall immediately notify Department of any discovery of waste, fraud, or abuse. Subrecipient shall fully cooperate with Department's efforts to detect, investigate, and prevent waste, fraud, and abuse. C. Subrecipient may not discriminate against any employee or other person who reports a violation of the terms of this Contract, or of any law or regulation, to Department or to any appropriate law enforcement authority, if the report is made in good faith. SECTION 28. CERTIFICATION REGARDING UNDOCUMENTED WORKERS Pursuant to Chapter 2264 of the Texas Government Code, by execution of this Contract, Subrecipient hereby certifies that Subrecipient, or a branch, division, or department of Subrecipient does not and will not knowingly employ an undocumented worker, where “undocumented worker” means an individual who, at the time of 376 44206070041, United Way of Denton County, Inc. Page 14 of 31 employment, is not lawfully admitted for permanent residence to the United States or authorized under law to be employed in that manner in the United States. If, after receiving a public subsidy, Subrecipient or a branch, division, or department of Subrecipient is convicted of a violation under 8 U.S.C. §1324a(f), Subrecipient shall repay the public subsidy with interest, at the rate of five percent (5%) per annum, not later than the 120th day after the date the Department notifies Subrecipient of the violation. SECTION 29. CONFLICT OF INTEREST A. Subrecipient shall maintain written standards of conduct governing the performance of its employees engaged in the award and administration of contracts. Failure to maintain written standards of conduct and to follow and enforce the written standards is a condition of default under this Contract and may result in termination of the Contract or deobligation of funds. In addition, the written standards must meet the requirements in 2 CFR §200.318 B. No employee, officer, or agent of Subrecipient shall participate in the selection, award, or administration of a contract supported by federal funds if a real or apparent conflict of interest would be involved. Such a conflict would arise when the employee, officer, or agent, any member of his or her immediate family, his or her partner, or an organization which employs or is about to employ any of the Parties indicated herein, has a financial or other interest in the firm selected for an award. This also applies to the procurement of goods and services under 24 CFR §§200.317 and 200.318. C. The officers, employees, and agents of the Subrecipient shall neither solicit nor accept gratuities, favors, or anything of monetary value from contractors, or parties to subagreements. Subrecipient may set standards for situations in which the financial interest is not substantial or the gift is an unsolicited item of nominal value. The standards of conduct shall provide for disciplinary actions to be applied for violations of such standards by officers, employees, or agents of the Subrecipient. D. The provision of any type or amount of ESG assistance may not be conditioned on an individual's or family's acceptance or occupancy of emergency shelter or housing owned by Department, the Subrecipient, or a parent or subsidiary of the Subrecipient. E. No Subrecipient may, with respect to individuals or families occupying housing owned by the Subrecipient, or any parent or subsidiary of the Subrecipient, carry out the initial evaluation required under Section 576.401 of the Federal Regulations or administer homelessness prevention assistance under Section 576.103 of the Federal Regulations. F. Intentionally left blank. SECTION 30. POLITICAL ACTIVITY AND LEGISLATIVE INFLUENCE PROHIBITED A. None of the funds provided under this Contract shall be used for influencing the outcome of any election, or the passage or defeat of any legislative measure. This prohibition shall not be construed to prevent any state official or employee from furnishing to any member of its governing body upon request, or to any other local or state official or employee or to any citizen information in the hands of the employee or official not considered under law to be confidential information. B. No funds provided under this Contract may be used directly or indirectly to hire employees or in any other way fund or support candidates for the legislative, executive, or judicial branches of government, the State of Texas, or the government of the United States. C. None of the funds provided under this Contract shall be used to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any 377 44206070041, United Way of Denton County, Inc. Page 15 of 31 Federal contract, grant or any other award governed by the Byrd Anti-Lobbying Amendment (31 U.S.C. §1352) as the Development Owner and each of its tiers have certified by their execution of the “Certification Regarding Lobbying for Contracts, Grants, Loans, and Cooperative Agreements” attached hereto as Addendum A and incorporated herein for all relevant purposes. SECTION 31. NON-DISCRIMINATION, FAIR HOUSING, EQUAL ACCESS AND EQUAL OPPORTUNITY A. NON-DISCRIMINATION. A person shall not be excluded from participation in, be denied the benefits of, be subjected to discrimination under, or be denied employment in the administration of or in connection with any program or activity funded in whole or in part with funds made available under this Contract, on the grounds of race, color, religion, sex, national origin, age, disability, political affiliation, belief, sexual orientation or gender identity. B. EQUAL ACCESS. Subrecipient agrees to follow the Equal Access to Housing Final Rule [FR 5359-F-02]. C. EQUAL OPPORTUNITY. Subrecipient and its subcontractors agree to carry out an Equal Employment Opportunity Program in keeping with the principles as provided in President’s Executive Order 11246 of September 24, 1965, as amended, and its implementing regulations at 41 CFR Part 60. D. REASONABLE ACCOMMODATIONS AND ACCESSIBLITY. Subrecipient shall operate each program or activity receiving ESG financial assistance so that the program or activity, when viewed in its entirety, is readily accessible and usable by individuals with disabilities. Subrecipient is also required to provide reasonable accommodations for persons with disabilities. E. AFFIRMATIVELY FURTHERING FAIR HOUSING. By Subrecipient’s execution of the Contract, Subrecipient agrees to affirmatively further fair housing by using funds in a manner that follows the “State of Texas’ Analysis of Impediments” and will maintain records in this regard. F. SUBCONTRACTS. Subrecipient will include the substance of this Section 31 in all subcontracts under this Contract. SECTION 32. CONSTRUCTION, HABITABILITY, AND ACCESSIBILITY STANDARDS A. LOCAL STANDARDS. Subrecipient shall ensure that any building for which ESG amounts are used for renovation, conversion, or major rehabilitation must meet local government safety and sanitation standards and shelter and housing standards as outlined in Section 576.403 of the Federal Regulations unless waived under the CARES Act for those temporary emergency shelters that have been determined by State or local health officials to be necessary to prevent the spread of, prepare for, and respond to COVID-19. B. ACCESSIBILITY STANDARDS. Subrecipient must meet the accessibility standards under (i) Section 504 of the Rehabilitation Act of 1973 (5 U.S.C. §794) and its implementing regulations at 24 CFR Part 8, (ii) the Fair Housing Act (42 U.S.C. §3601 et seq.) as implemented by HUD at 24 CFR Parts 100-115, 24 CFR §92.250, 24 CFR §92.202 and 24 CFR §5.105(a), (iii) Titles II and III of the Americans with Disabilities Act (42 U.S.C. §§12131-12189; 47 U.S.C. §§155, 201, 218 and 255) as implemented by U. S. Department of Justice at 28 CFR Parts 35 and 36, and (iv) the Equal Opportunity in Housing (Executive Order 11063 as amended by Executive Order 12259) and its implementing regulations at 24 CFR Part 107. C. NATIONAL FIRE PROTECTION. None of the funds provided under this Contract may be used in connection with any dwelling unit unless the unit is protected by a hard-wired or battery-operated smoke detector installed in accordance with National Fire Protection Association Standard 74. 378 44206070041, United Way of Denton County, Inc. Page 16 of 31 SECTION 33. LIMITATION ON ABORTION FUNDING A. Pursuant to Chapter 2272 of the Texas Government Code, to the extent allowed by federal and state law, the Department may not enter into this Contract with an “abortion provider” or an “affiliate” of an abortion provider, as said terms are defined thereunder, if funds under this Contract are appropriated from state or local tax revenue. B. By execution of this Contract, the Subrecipient hereby certifies that, as a condition of receipt of any funds under this Contract from state or local tax revenue, it is eligible to receive said funds, and that it will not utilize said funds in any way contrary to this Section 33 during the Contract Term. SECTION 34. DEBARRED AND SUSPENDED PARTIES By signing this Contract, Subrecipient certifies that neither it nor its current principal employees, board members, agents, or contractors are presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any federal department or agency as provided in the Certification Regarding Debarment, Suspension and Other Responsibility Matters attached hereto as Addendum C and incorporated herein for all relevant purposes. The terms “covered transaction”, “debarred”, “suspended”, “ineligible”, “lower tier covered transaction”, “participant”, “person”, “primary covered transaction”, “principal”, “proposal”, and “voluntarily excluded”, as used in the certification attached as Addendum C, have the meaning set out in the Definitions and Coverage sections of rules implementing Executive Order 12549. Subrecipient also certifies that it will not award any funds provided by this Contract to any person who is proposed for debarment under 48 CFR Part 9, subpart 9.4 or that is debarred, suspended, or otherwise excluded from or ineligible for participation in federal assistance programs under Executive Order 12549. Subrecipient agrees that, prior to entering into any agreement with a potential subcontractors procured by Subrecipient, that the verification process to comply with this requirement will be accomplished by checking the System for Award Management (“SAM”) at www.sam.gov and including a copy of the results in its project files. After said verification, Subrecipient may decide the frequency by which it determines the eligibility of its subcontractors during the term of the subcontractor’s agreement. Subrecipient may subsequently rely upon a certification of a subcontractor that is not proposed for debarment under 48 CFR Part 9, subpart 9.4, debarred, suspended, ineligible, or voluntarily excluded from the covered transaction, unless Subrecipient knows that the certification is erroneous. Failure of Subrecipient to furnish the certification attached hereto as Addendum C or an explanation of why it cannot provide said certification shall disqualify Subrecipient from participation under this Contract. The certification or explanation will be considered in connection with the Department’s determination whether to continue with this Contract. Subrecipient shall provide immediate written notice to Department if at any time Subrecipient learns that the certification was erroneous when submitted or has become erroneous by reason of changed circumstances. Subrecipient further agrees by executing this Contract that it will include the certification provision titled “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusive- Subcontracts,” as set out in Addendum C, without modification, and this language under this Section 34, in all its subawards. SECTION 35. SPECIAL CONDITIONS A. DIRECT DEPOSIT AUTHORIZATION. Department shall not release any funds under this Contract until Department has received a properly completed Direct Deposit Authorization form from Subrecipient and all Contract start-up documentation required by the Department. B. RECAPTURE OF FUNDS. Intentionally left blank. C. USE RESTRICTION PERIOD. Subrecipient shall ensure that any building rehabilitated with funds provided under this Contract is maintained as a shelter for the homeless for not less than a three (3)-year period or for not less than a ten (10)-year period if such funds are used for major rehabilitation or conversion of the building. The applicable period shall be calculated in accordance with 24 CFR §576.103(c), unless utilized 379 44206070041, United Way of Denton County, Inc. Page 17 of 31 for the provision of temporary emergency shelters (though leasing of existing property, temporary structures, or other means) to prevent the spread of, prepare for, and respond to COVID-19, as approved by the Department in accordance with Section 9 E. of this contract. D. DRUG AND ALCOHOL POLICY. Subrecipient shall administer, in good faith, a policy designed to ensure that its homeless facility is free from the illegal use, possession, or distribution of drugs or alcohol. E. PARTICIPATION OF HOMELESS INDIVIDUALS AND FAMILIES. Subrecipient shall, to the maximum extent practicable, involve, through employment, volunteer services, or otherwise, homeless individuals and families in constructing, renovation, maintaining, and operating facilities assisted under this Contract, in providing services assisted under this Contract, and in providing services for occupants of facilities assisted under this Contract. F. ELIGIBILITY CONDITIONS FOR YOUTH. 1. Notwithstanding any contrary requirements under the McKinney-Vento Homeless Assistance Act or 24 CFR Part 576, youth aged 24 and under seeking assistance (including shelter, services, or rental assistance) shall not be required to provide third party documentation that they meet the homeless definition in 24 CFR §578.3 as a condition for receiving assistance. 2. Unaccompanied youth aged 24 and under, or families headed by youth aged 24 and under who have an unsafe primary nighttime residence and no safe alternative to that residence shall be considered homeless for purposes of assistance provided by any private nonprofit organization whose primary mission is to provide services to youth aged 24 and under and families headed by youth aged 24 and under. G. HUD REGULATORY WAIVERS. 1. HMIS Lead Activities. As a result of the COVID-19 pandemic, HUD expanded eligible uses of HMIS. HUD waived 24 CFR §576.107(a)(2) which authorizes use of ESG funds for managing and operating the HMIS database if the recipient is the HMIS lead agency, and 24 CFR §576.107(b) to expand allowable costs to include activities for HMIS lead agencies. This waiver allows Subrecipient to use ESG funding for the provisions in 24 CFR §576.107(a)(2) and (b), even if the Subrecipient is not an HMIS lead agency. This waiver and these alternative requirements provide additional flexibility beyond the waiver extended to ESG-CV funds on May 22, 2020 by permitting ESG recipients who are not also HMIS Leads to pay for the costs eligible at 24 CFR §576.107(b) and lifting the 6-month limit on the waiver so that this flexibility applies throughout the period the subrecipient uses funds to prevent, prepare for, and respond to coronavirus. The waiver of 24 CFR §576.107(a)(2) to expand HMIS eligible activities will be in effect from May 22, 2020, to the end of the Contract Term, and waiver to 24 CFR §576.107(b) to expand HMIS costs will be in effect from September 1, 2020, to the end of the Contract Term. 2. Rental Assistance. HUD waived 24 CFR §576.106(a)(2), where medium-rent is defined as “for more than 3 months but not more than 24 months of rent” and established an alternative requirement where medium-term is established as for more than 3 months, but not more than 12 months. Up to an additional six months of rental arrears and fees on those arrears is eligible, and does not count toward the 12 months of rental assistance. This waiver applies from September 1, 2020, to the end of the Contract Term. 3. Re-evaluations for Homelessness Prevention. As a result of the COVID-19 pandemic, HUD changed re-evaluations from three to six months for homelessness prevention. HUD waived 24 CFR §576.401(b) which requires a re-evaluation of the Program Participant’s eligibility and the 380 44206070041, United Way of Denton County, Inc. Page 18 of 31 types/amounts of assistance to occur not less than once every three months. With the waiver, re- evaluations for homelessness prevention will be required not less than once every six months. Waiving three-month re-evaluation requirement for homelessness prevention assistance is necessary to help Program Participants remain stable in housing during the economic uncertainty caused by COVID-19. This waiver applies from April 5, 2020, to March 31, 2022. 4. Housing Stability Case Management. HUD waived 24 CFR §567.401(e)(1), which requires Program Participants to meet with a case manager not less than once per month, unless the Violence Against Women Act of 1994 or Family Violence Prevention and Services Act prohibits the shelter or housing being conditional on the Program Participant’s acceptance of services. This waiver is in effect from April 5, 2020, through the end of the Contract Term. 5. Short-Term and Medium-Term Rental Assistance. As a result of the COVID-19 pandemic, HUD waived the Fair Market Rent (FMR) requirement. HUD waived 24 CFR §576.106(d), which requires total gross rent to be equal or less than the FMR established by HUD, so long as the rent complies with HUD’s standards of rent reasonableness, as established under 24 CFR §982.507. Moving people into permanent housing is especially critical to prevent the spread of COVID-19, and this waiver will assist providers to more quickly locate additional units to house persons experiencing homelessness. The rent reasonableness standard still applies. The FMR requirement is waived from April 5, 2020, through the end of the Contract Term. 6. Helping current ESG Program Participants Maintain Housing. In order to ensure current program participants receiving homelessness prevention and rapid re-housing assistance do not lose their housing during the coronavirus public health crisis and the subsequent economic downturn caused by the crisis, the requirements in 24 CFR §576.105(c) and §576.106(a) are waived and alternative requirements are established as follows: (a) The requirement at 24 CFR §576.105(c) limiting the total period of time for which any program participant may receive the services under paragraph (b) to 24 months during any 3-year period is waived solely for those program participants who reach their 24- month maximum assistance during the period beginning on the presumed start of this crisis, January 21, 2020 – the date the first confirmed case was reported in the United States, and ending February 28, 2021, provided that the services are only extended for these program participants for up to a maximum of an additional six months; and (b) The requirement at 24 CFR §576.106(a) limiting the total number of months a program participant can receive rental assistance to 24 months in a 3-year period is waived solely for those program participants who reach their 24-month maximum during the period beginning on the presumed start of this crisis, January 21, 2020 – the date the first confirmed case was reported in the United States, and ending February 28, 2021, provided that the rental assistance is only extended for these program participants for up to a maximum of an additional six months. 7. Coordination With Other Targeted Homeless Services. To ensure funds are deployed quickly to address the immediate public health crisis and prevent the spread of coronavirus, the coordination requirements at 24 CFR §576.400(b) are waived from September 1, 2020 to the end of the Contract Term. 8. System and Program Coordination with Mainstream Resources. To ensure funds are deployed quickly to address the immediate public health crisis and prevent the spread of coronavirus, the coordination requirements at 24 CFR §576.400(c) are waived from September 1, 2020, to the end of the Contract Term. 381 44206070041, United Way of Denton County, Inc. Page 19 of 31 H. INAPPLICABILITY OF RULES AND DEPARTMENT WAIVERS 1. Because these funds were not made out of the annual allocation, and were not awarded by local competition or NOFA, 10 TAC §§7.33-7.34, §7.36-40, and §7.41(a) and (f), do not apply to this Contract. 10 TAC §7.43(b) is not applicable because ESG-CV funding does not require match. 2. On May 21, 2020, the Department’s Governing Board waived for limited temporary shelter activities 10 TAC §7.3(a)-(c), (e) [only for the requirement for the individual who will be executing a LURA] and (f) [all provisions except the Accessibility Standards], 10 TAC §7.32(c) for limited temporary shelter activities (as further described in this Contract and the Notice) through the earlier of the end of the Contract Term or January 31, 2022. 3. On May 21, 2020, the Department’s Governing Board waived 10 TAC §7.32(i) for the limited purpose of allowing HMIS funds to be expended under 24 CFR §576.107(a)(2) until September 30, 2020 or other date allowed by HUD. 4. Through the authority of 10 TAC §1.5, the Department’s Executive Director waived the following sections of 10 TAC for the limited purpose of alignment with the HUD Notice 20-08 and effective September 1, 2020, to the earlier of the expiration date described in the Notice or the end of the Contract Term: §7.32(b) to allow contracts with only HMIS funds; §7.32(f) to allow expanded activities for street outreach; §7.32(g) to allow expanded activities for shelters; §7.32(h) to allow expanded activities through rapid re-housing and homelessness prevention; and §7.32(i) to allow expanded activities through HMIS;; and §7.42(e) to allow temporary shelters as described in the Notice to use the waiver for shelter standards. I. EXTENSION OF WAIVERS. If as a result of the COVID-19 pandemic, HUD or the Department extends the time period for the above mentioned HUD Regulatory waivers or Department Waivers, and there are no substantive changes associated with said waiver, the Department may allow use of the waivers for the extended time period without the requirement of a written amendment hereto. In such an event, however, Subrecipient should retain any written correspondence from the Department regarding said extension of the COVID-19 related waivers. J. ACTIVITIES AUTHORIZED UNDER THE NOTICE. Subrecipient may not utilize these funds for the activities described in the Notice, Section III Part E Subsection 3 titled Additional Eligible Activities, without prior written authorization from the Department. Such written authorization may be given to Subrecipient for some or all of the activities without the requirement of written amendment hereto, unless such activities would necessitate an amendment to Exhibit A or other provision in this Contract. Subrecipient should retain any written correspondence from the Department authorizing expenditures for said activities. K. BOARD CONDITIONS. Intentionally deleted. SECTION 36. NO WAIVER OF REMEDIES Any right or remedy given to Department by this Contract shall not preclude the existence of any other right or remedy; neither shall any action taken in the exercise of any right or remedy be deemed a waiver of any other right or remedy. The failure of Department to exercise any right or remedy on any occasion shall not constitute a waiver of Department's right to exercise that or any other right or remedy at a later time. SECTION 37. ORAL AND WRITTEN AGREEMENTS A. All oral and written agreements between the parties to this Contract relating to the subject matter of this Contract have been reduced to writing and are contained in this Contract. 382 44206070041, United Way of Denton County, Inc. Page 20 of 31 B. The attachments enumerated and denominated below are a part of this Contract and constitute promised performances under this Contract: 1. Addendum A – Certification Regarding Lobbying for Contracts, Grants, Loans, and Cooperative Agreements 2. Addendum B – Certification Regarding Drug-Free Workplace Requirements 3. Addendum C – Certification Regarding Debarment, Suspension and Other Responsibility Matter 4. Exhibit A – Budget and Performance Statement SECTION 38. SEVERABILITY If any section or provision of this Contract is held to be invalid or unenforceable by a court or an administrative tribunal of competent jurisdiction, the remainder shall remain valid and binding. SECTION 39. COPYRIGHT Subrecipient may copyright materials developed in the performance of this Contract or with funds expended under this Contract. If copyrighted materials are developed under this Contract, the Department and HUD shall each have a royalty-free, nonexclusive, and irrevocable right to reproduce, publish, or otherwise use, and to authorize others to use, the copyrighted work for government purposes. SECTION 40. USE OF ALCOHOLIC BEVERAGES Funds provided under this Contract may not be used for the payment of salaries to any Subrecipient’s employees who use alcoholic beverages while on active duty, for travel expenses expended for alcoholic beverages, or for the purchase of alcoholic beverages. SECTION 41. FAITH BASED AND SECTARIAN ACTIVITY Funds provided under this Contract may not be used for sectarian or explicitly religious activities such as worship, religious instruction or proselytization, and must be for the benefit of persons regardless of religious affiliation. Subrecipient shall comply with the regulations promulgated at 24 CFR §576.406. SECTION 42. FORCE MAJURE If the obligations are delayed by the following, an equitable adjustment will be made for delay or failure to perform hereunder: A. Any of the following events: (i) catastrophic weather conditions or other extraordinary elements of nature or acts of God; (ii) acts of war (declared or undeclared), (iii) acts of terrorism, insurrection, riots, civil disorders, rebellion or sabotage; and (iv) quarantines, disease pandemics, embargoes and other similar unusual actions of federal, provincial, local or foreign Governmental Authorities; and B. The non-performing party is without fault in causing or failing to prevent the occurrence of such event, and such occurrence could not have been circumvented by reasonable precautions and could not have been prevented or circumvented through the use of commercially reasonable alternative sources, workaround plans or other means. 383 44206070041, United Way of Denton County, Inc. Page 21 of 31 SECTION 43. ALTERNATIVE DISPUTE RESOLUTION In accordance with Section 2306.082 of the Texas Government Code, it is the Department’s policy to encourage the use of appropriate alternative dispute resolution procedures (“ADR”) under the Governmental Dispute Resolution Act and the Negotiated Rulemaking Act (Chapters 2009 and 2006 respectively, Texas Government Code), to assist in the fair and expeditious resolution of internal and external disputes involving the Department and the use of negotiated rulemaking procedures for the adoption of Department rules. As described in Chapter 154, Civil Practices and Remedies Code, ADR procedures include mediation. Except as prohibited by Department’s ex parte communications policy, Department encourages informal communications between Department staff and the Subrecipient, to exchange information and informally resolve disputes. Department also has administrative appeals processes to fairly and expeditiously resolve disputes. If at any time the Subrecipient would like to engage Department in an ADR procedure, the Subrecipient may send a proposal to Department’s Dispute Resolution Coordinator. For additional information on Department’s ADR policy, see Department’s Alternative Dispute Resolution and Negotiated Rulemaking at 10 TAC §1.17. SECTION 44. TIME IS OF THE ESSENCE Time is of the essence with respect to Subrecipient’s compliance with all covenants, agreements, terms and conditions of this Contract. SECTION 45. COUNTERPARTS AND FACSIMILE SIGNATURES This Contract may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Signed signature pages may be transmitted by facsimile or other electronic transmission, and any such signature shall have the same legal effect as an original. SECTION 46. NUMBER, GENDER Unless the context requires otherwise, the words of the masculine gender shall include the feminine, and singular words shall include the plural. SECTION 47. NOTICE A. If a notice is provided concerning this Contract, notice may be given at the following (herein referred to as “Notice Address”): As to Department: TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS P. O. Box 13941 Austin, Texas 78711-3941 Attention: Abigail Versyp, Director of Single Family and Homeless Programs Division Telephone: (512) 475-0908 Fax: (512) 475-1391 abigail.versyp@tdhca.state.tx.us As to Subrecipient: United Way of Denton County, Inc. 1314 Teasley Lane Denton, Texas 76205 Attention: Gary Henderson, President and CEO 384 44206070041, United Way of Denton County, Inc. Page 22 of 31 Telephone: (940) 566-5851 Gary@unitedwaydenton.org B. All notices or other communications hereunder shall be deemed given when delivered, mailed by overnight service, or five days after mailing by certified or registered mail, postage prepaid, return receipt requested, addressed to the appropriate Notice Address as defined in the above Subsection A of this Section 47. SECTION 48. ASSIGNMENT This Contract is made by Department to Subrecipient only. Accordingly, it is not assignable without the written consent and agreement of Department, which consent may be withheld in Department's sole discretion. SECTION 49. VENUE AND JURISDICTION This Contract shall be construed under and in accordance with the laws of the State of Texas. Venue for any litigation regarding this Contract shall be fixed in any court of competent jurisdiction in Travis County, Texas; provided, however, the foregoing shall not be construed as a waiver by either party of sovereign immunity, official immunity or any other immunity or defense provided by law. EXECUTED to be effective on January 14, 2021. SUBRECIPIENT: United Way of Denton County, Inc., a Texas nonprofit corporation By: Name: Gary Henderson Title: President and CEO Date: THIS CONTRACT IS NOT EFFECTIVE UNLESS SIGNED BY THE EXECUTIVE DIRECTOR OF THE TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS, OR HIS/HER AUTHORIZED DESIGNEE. DEPARTMENT: TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS, a public and official agency of the State of Texas By: Name: Abigail Verysp Title: Its duly authorized officer or representative Date: 385 44206070041, United Way of Denton County, Inc. Page 23 of 31 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS EMERGENCY SOLUTIONS GRANTS PROGRAM (ESG) and Coronavirus Aid, Relief, and Economic Security Act (CARES Act) CONTRACT NUMBER 44206070041 WITH United Way of Denton County, Inc., A TEXAS NONPROFIT CORPORATION ADDENDUM A CERTIFICATION REGARDING LOBBYING FOR CONTRACTS, GRANTS, LOANS, AND COOPERATIVE AGREEMENTS The undersigned certifies, to the best of its knowledge and belief, that: 1. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of an agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment or modification of any Federal contract, grant, loan, or cooperative agreement. 2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant, loan, or cooperative agreement, the undersigned shall complete and submit standard form -LLL, "Disclosure Form to Report Lobbying", in accordance with its instructions. 3. The undersigned shall require that the language of this certification be included in the award documents for all sub-awards at all tiers (including subcontracts and contracts under grants, loans, and cooperative agreements) shall certify and disclose accordingly. This certification is material representation of fact on which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U. S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. Statement for Loan Guarantees and Loan Insurance The undersigned states, to the best of its knowledge and belief, that: If any funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this commitment providing for the United States to insure or guarantee a loan, the undersigned shall complete and submit Standard Form-LLL, “Disclosure Form to Report Lobbying,” in accordance with its instructions. Submission of this statement is a prerequisite for making or entering into this transaction imposed by Section 1352, Title 31, U.S. Code. Any person who fails to file the required statement shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure. 386 44206070041, United Way of Denton County, Inc. Page 24 of 31 United Way of Denton County, Inc., a Texas nonprofit corporation By: Name: Gary Henderson Title: President and CEO Date: 387 44206070041, United Way of Denton County, Inc. Page 25 of 31 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS EMERGENCY SOLUTIONS GRANTS PROGRAM (ESG) AND CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT (CARES ACT) CONTRACT NUMBER 44206070041 WITH United Way of Denton County, Inc., A TEXAS NONPROFIT CORPORATION ADDENDUM B CERTIFICATION REGARDING DRUG-FREE WORKPLACE REQUIREMENTS This certification is required by the regulations implementing the Drug-Free Workplace Act of 1988: 45 CFR Part 76, Subpart, F. Sections 76.630(c) and (d)(2) and 76.645 (a)(1) and (b) provide that a Federal agency may designate a central receipt point for STATE-WIDE AND STATE AGENCY-WIDE certifications, and for notification of criminal drug convictions. For the Department of Health and Human Services, the central point is: Division of Grants Management and Oversight, Office of Management and Acquisition, Department of Health and Human Services, Room 517-D, 200 Independence Avenue, SW Washington, DC 20201. The undersigned certifies that it will or will continue to provide a drug-free workplace by: (a) Publishing a statement notifying employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in the grantee’s workplace and specifying the actions that will be taken against employees for violation of such prohibition; (b) Establishing an ongoing drug-free awareness program to inform employees about- (1) The dangers of drug abuse in the workplace; (2) The grantee’s policy of maintaining a drug-free workplace; (3) Any available drug counseling, rehabilitation, and employee assistance programs; and (4) The penalties that may be imposed upon employees for drug abuse violations occurring in the workplace; (c) Making it a requirement that each employee to be engaged in the performance of the grant be given a copy of the statement required by paragraph (a); (d) Notifying the employee in the statement required by paragraph (a) that, as a condition of employment under the grant, the employee will: (1) Abide by the terms of the statement; and (2) Notify the employer in writing of his or her conviction for a violation of a criminal drug statute occurring in the workplace no later than five (5) calendar days after such conviction; (e) Notifying the agency in writing, within 10 calendar days after receiving notice under paragraph (d)(2) from an employee or otherwise receiving actual notice of such conviction. Employers of convicted employees must provide notice, including position title, to every grant officer or other designee on whose grant activity the convicted employee was working, unless the Federal agency has designated a central point for the receipt of such notices. Notice shall include the identification number(s) of each affected grant; (f) Taking one of the following actions, within 30 calendar days of receiving notice under paragraph (d)(2), with respect to any employee who is so convicted- (1) Taking appropriate personnel action against such an employee, up to and including termination, consistent with the requirements of the Rehabilitation Act of 1973, as amended; or 388 44206070041, United Way of Denton County, Inc. Page 26 of 31 (2) Requiring such employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for such purposes by a Federal, State, or local health, law enforcement, or other appropriate agency; (g) Making a good faith effort to continue to maintain a drug-free workplace through implementation of paragraphs (a), (b), (c), (d), (e) and (f). Place(s) of Performance [site(s) for the performance of work done in connection with the specific grant] (include street address, city, county, state, zip code): 1. __________________________________________________________________ 2. __________________________________________________________________ 3. __________________________________________________________________ 4. __________________________________________________________________ Workplace identifications must include the actual address of buildings (or parts of buildings) or other sites where work under the grant takes place. Categorical descriptions may be used (e.g., all vehicles of a mass transit authority or State highway department while in operation, State employees in each local unemployment office, performers in concert halls or radio studios). If Subrecipient does not identify the workplaces at the time of application, or upon award, if there is no application, the Subrecipient must keep the identity of the workplace(s) on file in its office and make the information available for Federal inspection. Failure to identify all known workplaces constitutes a violation of the Subrecipient’s drug-free workplace requirements. This certification is a material representation of fact upon which reliance is placed when the Department awards the grant. If it is later determined that Subrecipient knowingly rendered a false certification, or otherwise violates the requirements of the Drug-Free Workplace Act, Department, in addition to any other remedies available to the Federal Government, may take action authorized under the Drug-Free Workplace Act. United Way of Denton County, Inc., a Texas nonprofit corporation By: Name: Gary Henderson Title: President and CEO Date: 389 44206070041, United Way of Denton County, Inc. Page 27 of 31 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS EMERGENCY SOLUTIONS GRANTS PROGRAM (ESG) AND CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT (CARES ACT) CONTRACT NUMBER 44206070041 WITH United Way of Denton County, Inc., A TEXAS NONPROFIT CORPORATION ADDENDUM C CERTIFICATION REGARDING DEBARMENT, SUSPENSION AND OTHER RESPONSIBILITY MATTERS The undersigned certifies, to the best of its knowledge and belief, that it and its principals: (a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded by any Federal department or agency; (b) Have not within a three-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; (c) Are not presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State or local) with commission of any of the offenses enumerated in paragraph (1)(b) of this certification; (d) Have not within a three-year period preceding this application/proposal had one or more public transactions (Federal, State or local) terminated for cause or default; and (e) Will submit to the Department information about each proceeding that occurs during this Contract Term or during the recordkeeping period that: (1) Is in connection with this award; (2) Reached its final disposition during the most recent five year period; and (3) Is one of the following: i. A criminal proceeding that resulted in a conviction, as defined below; ii. A civil proceeding that resulted in a finding of fault and liability and payment of a monetary fine, penalty, reimbursement, restitution, or damages of $5,000 or more; iii. An administrative proceeding, as defined below, that resulted in a finding of fault and liability and your payment of either a monetary fine or penalty of $5,000 or more or reimbursement, restitution, or damage in excess of $100,000; or iv. Any other criminal, civil, or administrative proceeding if: 1. It could have led to an outcome described in this section (e) paragraph (3), items (i) – (iii) of this award term and condition; 2. It had a different disposition arrived at by consent or compromise with an acknowledgment of fault on your part; and 390 44206070041, United Way of Denton County, Inc. Page 28 of 31 3. The requirement in this award term and condition to disclose information about the proceeding does not conflict with applicable laws and regulations. (4) For purposes of section (e) of this certification the following definitions apply: i. An “administrative proceeding” means a non-judicial process that is adjudicatory in nature in order to make a determination of fault or liability (e.g., Securities and Exchange Commission Administrative proceedings, Civilian Board of Contract Appeals proceedings, and Armed Services Board of Contract Appeals proceedings). This includes proceedings at the Federal and State level but only in connection with performance of a Federal contract or grant. It does not include audits, site visits, corrective plans, or inspection of deliverables. ii. A “conviction”, for purposes of this award term and condition, means a judgment or conviction of a criminal offense by any court of competent jurisdiction, whether entered upon a verdict or a plea, and includes a conviction entered upon a plea of nolo contendere. Where the undersigned Subrecipient is unable to certify to any of the statements in this certification, such Subrecipient shall attach an explanation of why it cannot provide said certification to this Contract. The undersigned Subrecipient further agrees and certifies that it will include the below clause titled “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion-Subcontracts/Lower Tier Covered Transaction,” without modification, in all subcontracts and in all solicitations for subcontracts: “CERTIFICATION REGARDING DEBARMENT, SUSPENSION, INELIGIBILITY AND VOLUNTARY EXCLUSION – SUBCONTRACTS/ LOWER TIER COVERED TRANSACTIONS (1) The prospective lower tier participant/subcontractor certifies, by submission of this proposal, that neither it nor its principals is presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from participation in this transaction by any Federal department or agency. (2) Where the prospective lower tier participant/subcontractor is unable to certify to any of the statements in this certification, such prospective participant shall attach an explanation to this proposal. LOWER TIER PARTICIPANT/ SUBCONTRACTOR: Entity Name, Entity Type By: Signature Authority Name, Title Date: _______________________________” This certification is a material representation of fact upon which reliance is placed when the Department awards the grant. If it is later determined that Subrecipient knowingly rendered an erroneous certification, in addition to any other remedies available to the Federal Government, the Department may terminate this Contract for cause or default. 391 44206070041, United Way of Denton County, Inc. Page 29 of 31 SUBRECIPIENT: United Way of Denton County, Inc., a Texas nonprofit corporation By: Name: Gary Henderson Title: President and CEO Date: 392 44206070041, United Way of Denton County, Inc. Page 30 of 31 TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS EMERGENCY SOLUTIONS GRANTS PROGRAM (ESG) AND CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT (CARES ACT) CONTRACT NUMBER 44206070041 WITH United Way of Denton County, Inc., A TEXAS NONPROFIT CORPORATION EXHIBIT A BUDGET AND PERFORMANCE STATEMENT Subrecipient shall carry out the following activities identified herein by implementing an Emergency Solutions Grants Program and CARES Act program in accordance with the Federal Act and its implementing rules under the CARES Act, Federal Regulations, and ESG State Rules. Close-Out Process: Ends forty-five (45) calendar days after the Contract Term Contract Term: January 14, 2021 – March 31, 2022 Service Area: Denton County FINANCIAL EXPENDITURE REQUIREMENTS: A. To assure the timely and appropriate use of ESG-CV funds, the Department has established the following expenditure benchmarks. The Department will review Subrecipient performance in expending program funds on a quarterly basis. Funds may only be obligated and expended during the current Contract Term, and reported during the Close-Out Process. Subrecipient is advised that failure to expend funding according to the expenditure schedule during the Contract Term may result in deobligation of funding up to the expenditure benchmark or affect future funding opportunities. B. Subrecipient must follow the following expenditure schedule as stated herein: 1. Contract 50% expended as provided in the Budget by October 31, 2021 2. Contract 100% expended as provided in the Budget by the end of the Contract Term March 31, 2022 C. INTENTIONALLY LEFT BLANK. D. BUDGET DESCRIPTION. The Contract budget outlined in this Exhibit A to the Contract includes itemization of funds for each component. E. BUDGET. Budget Categories Budget Administration $156,136.00 Data Collection (HMIS) $12,600.00 Homeless Prevention $2,569,597.00 Rapid Re-housing $562,000.00 Total $3,300,333.00 393 44206070041, United Way of Denton County, Inc. Page 31 of 31 F. INDIRECT COST RATE. Subrecipient will not utilize an indirect cost rate. G. BUDGET AMENDMENTS. 1. Funds budgeted may be amended by moving funding from one component to another. Requests to amend the budget must be submitted in writing to the Department. Requests to move funds to Emergency Shelter or Street Outreach will only be considered if any ESG CARES first or second allocation funds are returned or made available, and are reallocated at the discretion and authority of the Department’s Executive Director or designee. Amendment requests received after the expiration of the Contract Term may not be granted. 2. Administrative funds shall not exceed 5% of the amount of the budget for Program Participant components. 394 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-132,Version:1 AGENDA CAPTION Consider adoption of an ordinance of the City Council of the City of Denton authorizing the City Manager to execute an agreement with the Texas Historical Commission to participate in the Texas Main Street Program demonstrating the City of Denton’s commitment to continue as a “Sustaining Level Official Main Street City” and authorizing payment of the annual fee in the amount of $2,600; and providing an effective date. City of Denton Printed on 2/8/2021Page 1 of 1 powered by Legistar™395 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Economic Development ACM/CFO: David Gaines DATE: February 9, 2021 SUBJECT Consider adoption of an ordinance of the City Council of the City of Denton authorizing the City Manager to execute an agreement with the Texas Historical Commission to participate in the Texas Main Street Program, demonstrating the City of Denton’s commitment to continue as a “Sustaining Level Official Main Street City” and authorizing payment of the annual fee in the amount of $2,600; and providing an effective date. BACKGROUND Since 1990, the City of Denton has administered a Downtown Development Program, using the National Main Street methodology, in conjunction with the Texas Historical Commission. The Program emphasizes downtown economic revitalization, through preservation and rehabilitation of historic buildings, in order to provide the necessary image for the downtown area, and serve as a unifying factor to encourage area merchants and building owners to reinvest in downtown. The state contract sets out the City’s responsibilities as well as the additional advantages, including group procurement, training, network and staff assistance from the state level that are part of participation as a sustaining Main Street member. As part of the contract, staff tracks monthly reinvestment in downtown. Since 1990, 515 new businesses have opened, 2,638 (net) jobs have been created, and a total of $141,0256,576 has been invested in downtown. Per the contract, the City will: • Employ a full-time paid program manager (the City contracts with Denton Main Street Association to fulfill this role) who will attend at least two professional development segments annually: 1. Real Places Conference of the Texas Historical Commission. 2. TMSP Basic Training. Required orientation for new program managers. 3. TMSP Summer Professional Development for all program managers. 4. Texas Downtown Association/Texas Main Street Annual Conference. 5. National Main Street Conference. 6. PastForward Conference of the National Trust for Historic Preservation • Carry out their Local Program work according to the Main Street Approach as promulgated by the National Main Street Center and displayed at https://www.mainstreet.org/mainstreetamerica/theapproach. • Incorporate the following “Ten Criteria” into the Local Program work: City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 396 1. Cultivate broad-based support for the downtown revitalization process. 2. Be vision and mission driven. 3. Operate under a Strategic Plan of Work/Plan of Action. 4. Apply a historic preservation ethic to all Main Street work. 5. Engage active volunteers, boards and committees. 6. Provide an adequate operating budget. 7. Employ a program manager. 8. Support ongoing education for staff and volunteers. As outlined in III.B above. 9. Comply with reporting requirements. 10. Fund and maintain national Main Street America TM membership, part of the National Main Street Center, Inc. • Track statistics such as reinvestment and job/business creation and submit them to the TMSP office. • Submit an annual report that includes an evaluation of the Local Program implementation of the Ten Criteria (as outlined above). • Pay THC an annual fee in the amount of $2,600 to defray cost of staff time and expenses for services provided under the Local Program. Summary of services to be performed by Texas Main Street Program: • Site visits to address design/planning, economic development and organizational/program capacity issues. • Services may include, but are not limited to: façade renderings/technical reports, city planning, preservation and historic building expertise by licensed architects and other design professionals; business development and funding advice, program manager and board training, program capacity. At the Feb. 18, 2020 City Council meeting, Council approved a partnership agreement between the City and the Denton Main Street Association for $90,000 to fulfill the primary requirements of the Program Agreement. That agreement was renewed Oct. 1, 2020 for FY 2020-2021. FINANCIAL INFORMATION The City will pay the $2,600 annual fee to participate in the Main Street Program. EXHIBITS 1. Agenda Information Sheet 2. Ordinance and Contract Respectfully submitted: Jessica Rogers Director of Economic Development 397 Page 1 ORDINANCE NO. _______ AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER TO EXECUTE AN AGREEMENT WITH THE TEXAS HISTORICAL COMMISSION TO PARTICIPATE IN THE TEXAS MAIN STREET PROGRAM DEMONSTRATING THE CITY OF DENTON’S COMMITMENT TO CONTINUE AS A “SUSTAINING LEVEL OFFICIAL MAIN STREET CITY” AND AUTHORIZING PAYMENT OF THE ANNUAL FEE IN THE AMOUNT OF $2,600; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, since 1990, the City of Denton (City) has administered a Downtown Development Program (“Program”), using the National Main Street methodology, in conjunction with the Texas Historical Commission; and WHEREAS, the Program emphasizes downtown economic revitalization through preservation and rehabilitation of historic buildings in order to provide the necessary image for the downtown area and serve as a unifying factor to encourage area merchants and building owners to reinvest in downtown; and WHEREAS, the attached Texas Main Street Locally Designated Program Contract (the “Agreement”), sets out the City’s responsibilities as well as the additional advantages including group procurement, training, use of trademarks, network and staff assistance from the state level that are part of participation as a Sustaining Level Official Main Street City member; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The attached agreement representing the City’s commitment to continue as a “Sustaining Level Official Main Street City” for 2021-2022 is hereby approved. SECTION 2. The City Manager is hereby authorized to execute the Agreement between the City of Denton and the Texas Historical Commission and the expenditure of funds pursuant to the Agreement is hereby authorized. SECTION 3. The City Council of the City of Denton, Texas hereby expressly delegates the authority to take any actions that may be required or permitted to be performed by the City of Denton under the Agreement to the City Manager of the City of Denton, Texas, or his designee. SECTION 4. This ordinance shall become effective immediately upon its passage and approval. The motion to approve this ordinance was made by __________________________ and seconded by _________________________________, the ordinance was passed and approved by the following vote [___ - ___]: 398 Page 2 Aye Nay Abstain Absent Mayor, Gerard Hudspeth: ______ ______ ______ ______ Birdia Johnson, District 1: ______ ______ ______ ______ Connie Baker, District 2: ______ ______ ______ ______ Jesse Davis, District 3: ______ ______ ______ ______ John Ryan, District 4: ______ ______ ______ ______ Deb Armintor, At Large Place 5: ______ ______ ______ ______ Paul Meltzer, At Large Place 6: ______ ______ ______ ______ PASSED AND APPROVED this the _________ day of ___________________, 2021. __________________________________ GERARD HUDSPETH, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY BY: __________________________________ APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: __________________________________ Digitally signed by Mack Reinwand Date: 2021.01.22 10:02:53 -06'00' 399 Page 1 Texas Main Street Locally Designated Program 2021 Contract I. PARTIES TO THE CONTRACT This contract and agreement concerning Denton Main Street Program (“Agreement”) is entered into between the City of Denton (hereinafter referred to as “Participant”) and the Texas Historical Commission (hereinafter referred to as “THC”). Denton Main Street Program (hereinafter referred to as “Local Program”) is part of a larger program within the Texas Main Street Program (hereinafter referred to as “TMSP”), as defined in 13 TAC sec. 19.3(1), wherein the Participant qualifies as a Texas Main Street Urban City, as defined in 13 TAC sec. 19.3. The purpose of the Local Program is to assist Participant with the development, revitalization, restoration, and preservation of its historic downtown or commercial neighborhood districts in accordance with the national Main Street Approach. This Agreement shall be governed by Texas Government Code, Section 442.014, and Texas Administrative Code, Title 13, Part 2, Chapter 19. II. NATIONAL MAIN STREET CENTER BRAND AND NETWORK This Agreement constitutes a designation of Participant as an official Texas Main Street City (as defined in 13 TAC sec. 19.3(2)) and allows the use of the National Main Street Center, Inc. brand, including MAIN STREET AMERICATM controlled by National Main Street Center, Inc. 53 West Jackson Blvd., Suite 350 Chicago IL 60604. If Participant’s participation in the TMSP ceases, Participant may no longer use the term ‘Main Street’ to describe its local development, restoration, and preservation program; nor utilize or display the trademarks or branding of the National Main Street Center, Inc. The designation as a Texas Main Street City allows for full participation in the TMSP network, which includes eligibility to receive Texas Main Street publications and participate in Texas Main Street networking opportunities. Designated Texas Main Street Cities, such as Participant, shall execute and submit to the TMSP office the National Main Street Center’s Trademark Sublicense Agreement (“TM Sublicense Agreement”), which grants the right to use the registered trademark, logos and brand of National Main Street Center’s membership program - MAIN STREET AMERICATM. Participant hereby agrees to, and shall comply with, all terms and conditions of the TM Sublicense Agreement, which is attached hereto as Exhibit A, and incorporated herein by reference. Additionally, Participant acknowledges and agrees that in the event National Main Street Center develops and/or releases an updated TM Sublicense Agreement (“Updated TM Sublicense Agreement”) during the Term of this Agreement, Participant shall be required to execute, and comply with, the Updated TM Sublicense Agreement or otherwise be subjected to termination pursuant to the terms of VII. (B) below. In the event National Main Street Center develops and/or releases an Updated TM Sublicense Agreement, THC will provide Participant with sixty (60) days’ notice for Participant to consider, prepare and execute an updated Sublicense Agreement. Furthermore, the parties acknowledge and agree that the execution of such Updated TM Sublicense Agreement shall not require amendment of this Agreement and shall become part of this Agreement upon its execution. In the event of conflict between multiple TM Sublicense Agreements, the most recently executed version shall control. III. RESPONSIBILITIES OF THE PARTICIPANT AND LOCAL PROGRAM 400 Page 2 A. Staffing. In operation of the Local Program, Participant shall employ a full-time paid program manager who will attend at least two professional development segments annually as outlined in subsection B below. If necessary, a Texas Main Street Small City may, after the first three years of participating in the TMSP, permit the program manager position to also perform specific economic development, tourism, and other relevant duties while remaining as a full-time paid program manager. For the purposes of this Agreement, full-time employment means that the program manager works at least forty (40) hours per week dedicated toward the Local Program and downtown revitalization. Employees of the Participant shall be subject to the sole control and direction of the Participant. Participant shall move forward in an efficient manner to fill a program manager vacancy and the THC’s State Coordinator shall be kept apprised of progress in filling vacancies. A Texas Main Street Urban City (as defined by 13 TAC 19.3(4)) shall additionally employ a full-time assistant program manager who shall also participate in the professional development under subsection B below. B. Professional development. The program manager will attend two professional development opportunities in their entirety per year from the list below: 1. Real Places Conference of the Texas Historical Commission. 2. TMSP Basic Training. Required orientation for new program managers. 3. TMSP Summer Professional Development for all program managers. 4. Texas Downtown Association/Texas Main Street Annual Conference. 5. National Main Street Now Conference. 6. PastForward Conference of the National Trust for Historic Preservation. 7. Texas Downtown Association Roundtables 8. Workshops, certification programs, and webinars of the THC or MAIN STREET AMERICATM. Experienced program managers, as determined by THC, may substitute non-Main Street specific, relevant professional development for one of the above events with prior approval of THC. New managers shall attend the TMSP Basic Training, listed second on the list above, within their first year of employment. If there is an assistant Main Street employee in addition to the program manager/s referenced above, that person should also attend at least one segment of Main Street professional development annually. If a replacement program manager is hired who has not previously attended TMSP Basic Training or does not have a background in Main Street, as determined by THC, the manager is required to attend one series of Basic Training/Professional Development. A $500 stipend shall be charged to Participant for the training series required under these circumstances. To help ensure an effectively-functioning local program, local program boards/volunteers are encouraged to attend TMSP educational opportunities or to contact TMSP for on-site training. No stipend is charged for their participation. C. Commitment. 401 Page 3 Participant agrees to carry out their Local Program work according to the Main Street Approach as promulgated by the National Main Street Center and displayed at https://www.mainstreet.org/mainstreetamerica/theapproach. Participant agrees to incorporate into their Local Program work, the following Main Street Community Accreditation Standards: 1. Broad‐based Community Commitment 2. Leadership & Organizational Capacity 3. Diverse and Sustainable Funding 4. Strategy‐Driven Programming 5. Preservation‐Based Economic Development 6. Demonstrated Impact & Result D. Reporting. To measure progress, Participant shall track statistics such as reinvestment and job/business creation along with a quarterly activity report and submit them to the TMSP office by the 10th of the month following the end of each calendar quarter. Even if there has not been reinvestment activity in a quarter, Participant shall still submit a report noting such. Additionally, Participant shall submit an annual accreditation report that includes an evaluation of the Local Program implementation of the Main Street Community Accreditation Standards outlined in Section III. C above for the previous calendar year. E. Probation. Participant agrees that their Local Program may be placed on probation, which may result in the suspension of TMSP services or possible removal from the TMSP, for any of the following reasons: 1. Failure to submit an annual accreditation report pursuant to Section III. D above; 2. Failure to achieve accreditation objectives more than two (2) consecutive years; 3. Failure to submit activity reports for more than two (2) consecutive quarters; 4. Failure to submit reinvestment reports for more than two (2) consecutive quarters; 5. Failure to adequately staff or fund the program 6. Failure to abide by this Agreement. THC shall notify Participant in writing prior to implementing probation in accordance with Texas Administrative Code, Title 13, Part 2, Chapter 19. In the case of probation, Participant will work with the THC’s State Coordinator or delegate to overcome any deficiencies. THC may terminate the Local Program’s participation in the TMSP if Participant fails to remediate identified deficiencies within a reasonable time. No fees will be refunded in cases of probation and any outstanding fees under this Agreement will remain due. During probationary status, the stipulations called for in sections III and IV of this Agreement may be temporarily altered or suspended upon THC’s discretion. F. National Main Street America TM membership. Participant shall budget for and maintain membership in the National Main Street Center. 402 Page 4 IV. SERVICES TO BE PERFORMED BY TMSP A. On-site visits and technical expertise. TMSP services are available to designated Texas Main Street Cities in good standing, including those provided through site visits to address design/planning, economic development and organizational/program capacity issues. Services may include, but are not limited to: downtown economic development assistance, façade renderings/technical reports, planning, preservation and historic building expertise by licensed architects and other design professionals; business development and funding advice, program manager and board training, program capacity-building, and strategic planning. B. Securing a Main Street Manager. Should a replacement program manager be needed, the TMSP office can assist with elements of the hiring process, including creating job descriptions, job posting and interviewing. Upon Participant’s request, the TMSP office will assist in the hiring process; however, the responsibility for selection, salary, employment and employee-related legal matters will remain with Participant. Participant is responsible for, and shall hold THC and TMSP harmless from, all acts and omissions of its managers and all of its employees, agents, representatives, contractors and/or subcontractors. V. GENERAL TERMS AND RESPONSIBILITIES. A. Confidentiality and Public Information Act. Notwithstanding any provisions of this Agreement to the contrary, Participant and THC will comply with the Texas Public Information Act, Texas Government Code, Chapter 552, as interpreted by judicial opinions and opinions of the Attorney General of the State of Texas. THC and Participant agree to notify each other in writing within a reasonable time from receipt of a request for information related to Participant’s work under this Agreement. Participant and THC will cooperate in the production of documents responsive to the request. Participant will notify THC within twenty-four (24) hours of receipt of any third- party requests for information that was provided by the State of Texas for use in performing the Agreement. This Agreement and all data and other information generated or otherwise obtained in its performance may be subject to the Texas Public Information Act. Subject to the Texas Public Information Act, Participant agrees to maintain the confidentiality of information received from the State of Texas during the performance of this Agreement, including information which discloses confidential personal information. B. Dispute Resolution. The dispute resolution process provided for in Texas Government Code, Chapter 2260, shall be used by THC and Participant to resolve any dispute arising under the Agreement. If Participant’s claim for breach of Agreement cannot be resolved in the ordinary course of business, it shall be submitted to the negotiation process provided in Chapter 2260. To initiate the process, Participant shall submit written notice, as required by Chapter 2260, to 403 Page 5 the individual identified in the Agreement for receipt of notices. Compliance by Participant with Chapter 2260 is a condition precedent to the filing of a contested case proceeding under Chapter 2260. The contested case process provided in Chapter 2260 is Participant’s sole and exclusive process for seeking a remedy for an alleged breach of Agreement by THC if the parties are unable to resolve their disputes as described above. Compliance with the contested case process provided in Chapter 2260 is a condition precedent to seeking consent to sue from the Legislature under Chapter 107, Civil Practices and Remedies Code. Neither the execution of the Agreement by Participant and THC nor any other conduct of any representative of the Participant or THC relating to the Agreement shall be considered a waiver of sovereign immunity to suit by THC or any governmental immunity to which Participant is otherwise entitled under Texas law. C. Indemnification. TO THE EXTENT ALLOWABLE BY LAW, PARTICIPANT SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS THE STATE OF TEXAS AND THC, AND/OR THEIR OFFICERS, AGENTS, EMPLOYEES, REPRESENTATIVES, CONTRACTORS, ASSIGNEES, AND/OR DESIGNEES FROM ANY AND ALL LIABILITY, ACTIONS, CLAIMS, DEMANDS, OR SUITS, AND ALL RELATED COSTS, ATTORNEY FEES, AND EXPENSES ARISING OUT OF, OR RESULTING FROM ANY ACTS OR OMISSIONS OF PARTICIPANT OR ITS AGENTS, EMPLOYEES, SUBCONTRACTORS, ORDER FULFILLERS, OR SUPPLIERS OF SUBCONTRACTORS IN THE EXECUTION OR PERFORMANCE OF THE AGREEMENT AND THE TM SUBLICENSE AGREEMENT AND/OR UPDATED TM SUBLICENSE AGREEMENT. THE DEFENSE SHALL BE COORDINATED BY PARTICIPANT WITH THE OFFICE OF THE ATTORNEY GENERAL (“OAG”) WHEN TEXAS STATE AGENCIES ARE NAMED DEFENDANTS IN ANY LAWSUIT AND PARTICIPANT MAY NOT AGREE TO ANY SETTLEMENT WITHOUT FIRST OBTAINING THE CONCURRENCE FROM OAG. PARTICIPANT AND THC AGREE TO FURNISH TIMELY WRITTEN NOTICE TO EACH OTHER OF ANY SUCH CLAIM. TO THE EXTENT ALLOWABLE BY LAW, PARTICIPANT SHALL DEFEND, INDEMNIFY AND HOLD HARMLESS THE STATE OF TEXAS, THC AND/OR THEIR EMPLOYEES, AGENTS, REPRESENTATIVES, CONTRACTORS, ASSIGNEES, AND/OR DESIGNEES FROM ANY AND ALL THIRD PARTY CLAIMS INVOLVING INFRINGEMENT OF UNITED STATES PATENTS, COPYRIGHTS, TRADE AND SERVICE MARKS, AND ANY OTHER INTELLECTUAL OR INTANGIBLE PROPERTY RIGHTS IN CONNECTION WITH THE PERFORMANCES OR ACTIONS OF PARTICIPANT PURSUANT TO THIS AGREEMENT AND/OR UPDATED TM SUBLICENSE AGREEMENT. PARTICIPANT AND THC AGREE TO FURNISH TIMELY WRITTEN NOTICE TO EACH OTHER OF ANY SUCH CLAIM. PARTICIPANT SHALL BE LIABLE TO PAY ALL COSTS OF DEFENSE INCLUDING ATTORNEYS' FEES. THE DEFENSE SHALL BE COORDINATED BY PARTICIPANT WITH THE OAG WHEN TEXAS STATE AGENCIES ARE NAMED DEFENDANTS IN ANY LAWSUIT AND 404 Page 6 PARTICIPANT MAY NOT AGREE TO ANY SETTLEMENT WITHOUT FIRST OBTAINING THE CONCURRENCE FROM OAG. D. Independent Contractor. Participant or Participant’s employees, representatives, agents and any subcontractors shall serve as an independent contractor in providing goods or services. Participant or Participant’s employees, representatives, agents and any subcontractors shall not be employees of THC. Should Participant subcontract any of the services required in this Agreement, Participant expressly understands and acknowledges that in entering into such subcontract(s), THC is in no manner liable to any subcontractor(s) of Participant. In no event shall this provision relieve Participant of the responsibility for ensuring that the services rendered under all subcontracts are rendered in compliance with this Agreement and the TM Sublicense Agreement or Updated TM Sublicense Agreement. E. Ownership of Intellectual Property. For the purposes of this Agreement, the term “Work Product” is defined as all reports, analyses, work papers, work products, materials, approaches, designs, specifications, systems, documentation, methodologies, concepts, knowledge, know-how, ideas, improvements, plans, advice, research, materials, intellectual property or other property developed, produced, or generated in part or in full by THC and/or in cooperation with Participant, in connection with this Agreement. Work Product specifically excludes pre- existing material owned by Participant, or material developed during the Term of this Agreement independently and exclusively by Participant without any THC involvement or contribution, and that does not include or incorporate any Work Product or Work Product components (“Independent Participant Material”). All Work Product generated pursuant to this Agreement is made the exclusive property of THC. All right, title and interest in and to said Work Product shall vest in THC upon creation and shall be deemed to be, and is expressly intended by the parties to be, a work made for hire and made in the course of the services rendered pursuant to this Agreement. To the extent that title to any such Work Product may not, by operation of law, vest in THC, or such Work Product may not be considered a work made for hire, all rights, title and interest therein are hereby irrevocably assigned to THC. THC shall have the right to obtain and to hold in its name any and all patents, copyrights, registrations or such other protection as may be appropriate to the Work Product subject matter, and any extensions and renewals thereof. Furthermore, if and to the extent THC provides Participant any Work Product and/or other property owned by THC (“THC Property”) to assist Participant to further the Local Program and the purpose of this Agreement, THC hereby grants Participant, commencing upon the date that Participant is designated as a Texas Main Street City, a nonexclusive, revocable, worldwide, fully paid, royalty-free, license, for the Term of this Agreement while Participant remains designated as a Texas Main Street City, to reproduce, modify, distribute, publicly perform, publicly display and use the THC Property only to the extent such use is in furtherance of the Local Program. To the extent Participant provides any Independent Participant Material to THC in connection with this Agreement, Participant hereby grants THC, and THC accepts, a nonexclusive, perpetual, irrevocable, worldwide, fully paid, royalty-free license to use, reproduce, copy, modify distribute, publicly perform, publicly display, store, post on the Internet and creative derivative works of such Independent 405 Page 7 Participant Material, and to sublicense and transfer such Independent Participant Material to third parties to use in accordance with these license terms for THC purposes. F. State Auditor. In addition to and without limitation on the other audit provisions of this Agreement, and to the extent applicable, pursuant to Section 2262.154 of the Texas Government Code, the State Auditor’s Office may conduct an audit or investigation of Participant or any other entity or person receiving funds from the State directly under this Agreement or indirectly through a subcontract under this Agreement. The acceptance of funds by Participant or any other entity or person directly under this Agreement or indirectly through a subcontract under this Agreement acts as acceptance of the authority of the State Auditor’s Office, under the direction of the Legislative Audit Committee, to conduct an audit or investigation in connection with those funds. Under the direction of the Legislative Audit Committee, Participant or other entity that is the subject of an audit or investigation by the State Auditor’s Office must provide the State Auditor’s Office with access to any information the State Auditor’s Office considers relevant to the investigation or audit. Participant further agrees to cooperate fully with the State Auditor’s Office in the conduct of the audit or investigation, including providing all records requested. Participant shall ensure that this paragraph concerning the authority to audit funds received indirectly by subcontractors through Participant and the requirement to cooperate is included in any subcontract it awards. The State Auditor’s Office shall at any time have access to and the right to examine, audit, excerpt, and transcribe any pertinent books, documents, working papers, and records of Participant related to this Agreement. G. Assignment. Participant may not assign this Agreement, in whole or in part, and may not assign any right or duty required under it, without the prior written consent of THC. Any attempted assignment in violation of this provision is void and without effect. VI. CONTRACT AMOUNT In accordance with Texas Government Code, sec.442.014(d) and 13 TAC sec.19.5(d), Participant shall pay THC a fee in the amount of $2600.00 to defray cost of staff time and expenses for services provided under the Local Program. THC shall invoice for the fee and Participant shall tender payment within 60 days. VII. TERM and TERMINATION A. Term. This Agreement begins upon the latest date the Agreement becomes fully executed by individuals who have the authority to bind the party on whose behalf he or she is signing (“Effective Date”) and shall expire on December 31, 2021 unless terminated at an earlier date pursuant to subsection B below. B. Termination. 406 Page 8 1. Either party shall have a right to terminate all performances to be rendered under this Agreement by notifying the other party in writing at least ten (10) days in advance of the termination date. 2. In the event Participant refuses or fails to execute any Updated TM Sublicense Agreement pursuant to the terms of Section II. above within sixty (60) days of receipt thereof, THC shall have the right to immediately terminate this Agreement by written notice to the Participant. 3. Upon termination of this Agreement under subsections 1 and 2 above, Participant will no longer be designated as an official Texas Main Street City (as defined in 13 TAC sec. 19.3(2)), and will no longer be allowed the use of any Work Product or THC Property, as defined herein, or the registered trademark, logos and brand of National Main Street Center’s membership program MAIN STREET AMERICATM. In such event, Participant agrees to return to THC any Work Product and THC Property in its possession. 4. No funds paid under Section VI. Above shall be refunded in any case of termination. VIII. CHANGES AND AMENDMENTS Any alterations, additions, or deletions to the terms of this Agreement shall be in writing and signed by both parties. IX. APPLICABLE LAW AND VENUE; NO WAIVER; SEVERABILITY This Agreement shall be governed by and construed in accordance with the laws of the State of Texas. The venue of any suit arising under this Agreement is fixed in any court of competent jurisdiction of Travis County, Texas. Nothing in this Agreement shall be construed as a waiver of THC’s sovereign immunity or any governmental immunity to which Participant is entitled under Texas law. This Agreement shall not constitute or be construed as a waiver of any of the privileges, rights, defenses, remedies, or immunities available to Participant, THC or the State of Texas. The failure to enforce, or any delay in the enforcement, of any privileges, rights, defenses, remedies, or immunities available to Participant, THC or the State of Texas under this Agreement or under applicable law shall not constitute a waiver of such privileges, rights, defenses, remedies, or immunities or be considered as a basis for estoppel. In the event that any provision of this Agreement is later determined to be invalid, void, or unenforceable, then the remaining terms, provisions, covenants, and conditions of this Agreement shall remain in full force and effect, and shall in no way be affected, impaired, or invalidated. X. PROHIBITED FOREIGN BUSINESSES In accordance with Texas Government Code, Chapter 2252, Subchapter F, Participant hereby represents and warrants that it is not a company identified on the lists prepared and maintained under Texas Government Code §§ 806.051 (companies with business operations in Sudan), 807.051 (companies with business operations in Iran), or 2252.153 (companies known to have contracts with or provide supplies or services to a foreign terrorist organization). Notwithstanding the foregoing, a company that the United States government affirmatively 407 Page 9 declares to be excluded from its federal sanctions regime relating to Sudan, Iran, or to a foreign terrorist organization, is not subject to contract prohibition under this clause. A company claiming such exemption must submit the official copy of the declaration. XI. FORCE MAJEURE THC shall not be responsible for performance under this Agreement should it be prevented from performance by an act of war, order of legal authority, act of God, or other unavoidable cause not attributable to the fault or negligence of THC. Participant shall not be liable to THC for non-performance or delay in performance of a requirement under this Agreement if such non-performance or delay is due to one of the following occurrences, which occurrence must not be preventable through the exercise of reasonable diligence, be beyond the control of Participant, cannot be circumvented through the use of alternate sources, work-around plans, or other means and occur without its fault or negligence: fire; flood; lightning strike; weather damage; earthquake; tornado; hurricane; snow or ice storms; equipment break down; acts of war, terrorism, riots, or civil disorder; strikes and disruption or outage of communications, power, or other utility. In the event of an occurrence under the above paragraph, Participant will be excused from any further performance or observance of the requirements so affected for as long as such circumstances prevail, and Participant continues to use commercially reasonable efforts to recommence performance or observance whenever and to whatever extent possible without delay. Participant shall immediately notify the THC’s State Coordinator by telephone (to be confirmed in writing within five (5) calendar days of the inception of such occurrence) and describe at a reasonable level of detail the circumstances causing the non-performance or delay in performance. XII. NOTICES. Any notices and/or documents required hereunder shall be deemed to have been duly provided if in writing and delivered personally or by pre-paid guaranteed overnight delivery service, or sent postage prepaid by United States certified mail, return receipt requested. Any such notice shall be effective on the date of delivery if delivered personally, on the next business day following delivery to the guaranteed overnight delivery service if the notice was so delivered and the charges were prepaid, or on the date the recipient signed for the notice if sent by certified mail. Notices shall be addressed as follows, or at such other address as any party hereto shall notify the other of in writing: If to THC.: Texas Historical Commission P.O. Box 12276 Austin, TX 78711 If to Participant: 408 Page 10 ____________________________ ____________________________ ____________________________ THE UNDERSIGNED PARTIES BIND THEMSELVES TO THE FAITHFUL PERFORMANCE OF THIS AGREEMENT. __________________________________________ Date: __________________ Authorized Signature (City Manager, Mayor, or Board Chair) Signer title: _______________________________ Signer printed name: ________________________ Signer address: ______________________________ Signer phone: _______________________________ __________________________________________ Date: __________________ Debra Drescher, State Coordinator Texas Main Street Program P.O. Box 12276 Austin, TX 78711 512-463-5758 debra.drescher@thc.texas.gov __________________________________________ Date: __________________ Mark Wolfe, Executive Director Texas Historical Commission P.O. Box 12276 Austin, TX 78711 512-463-6100 409 DocuSign Envelope ID: E0A8D7BD-9B10-451F-93DE-4989BD90F8EB 410 National Main Street Center Local Program Accredited Member Sublicensing Agreement 2 2. Grant of Sub-License. A. Subject to the terms and conditions of this Sublicense Agreement, the Coordinating Program hereby grants the Sublicensee the non-exclusive right and license to use the Trademarks to identify and promote its participation in the MAIN STREET AMERICA™ program, as well as its relationship and association with the Coordinating Program and NMSC, in connection with the following activities: i. MAIN STREET AMERICA™ word and logo marks. The Sublicensee’s rights to use the MAIN STREET AMERICA™ word mark and the following MAIN STREET AMERICA logo are limited to Sublicensees which are members in good standing at the Accredited membership level of the MAIN STREET AMERICA™ program: For use by Local Programs who are Designated Members at the Accredited Level: As a Main Street America™ Accredited program, INSERT NAME HERE is a recognized leading program among the national network of more than 1,200 neighborhoods and communities who share both a commitment to creating high-quality places and to building stronger communities through preservation-based economic development. All Main Street America™ Accredited programs meet a set of National Accreditation Standards of Performance as outlined by the National Main Street Center. ii. NATIONAL MAIN STREET CENTER® word and logo marks. The Sublicensee’s right to use the NATIONAL MAIN STREET CENTER word mark and the following NATIONAL MAIN STREET CENTER logo solely and exclusively to indicate its association with the National Main Street Center: iii. MAIN STREET® word mark. The Sublicensee’s right to use the MAIN STREET trademark is limited to use made to identify Sublicensee and/or its activities, including as part of the name of the Licensee (e.g. “Main Street Iowa”), in connection with commercial district revitalization and related consultation, education, and training. 3. Scope of and Limitations on Use. Use of the Trademarks by the Sublicensee will be subject to the following limitations: A.Sublicensee must display the Accredited level MAIN STREET AMERICA membership mark on their website. All uses of the MAIN STREET AMERICA word mark and logo by Sublicensee DocuSign Envelope ID: E0A8D7BD-9B10-451F-93DE-4989BD90F8EB A i ™ A di d INSERT NAME HERE iA i ™ A di d INSERT NAME HERE 411 National Main Street Center Local Program Accredited Member Sublicensing Agreement 3 must follow the specific mark, color, and character usage set forth in the Brand Identity Guidelines attached as Exhibit A, which are incorporated by reference as if fully set forth herein. Sublicensee will not use or develop any different logos or designs (including any symbols or stylized presentations), in connection with the MAIN STREET AMERICA mark or logo. Use of the MAIN STREET AMERICA word mark and logos by Sublicensee is a mandatory condition of membership in the MAIN STREET AMERICA program. B.The MAIN STREET mark, as part of the name and identity of Sublicensee’s organization, programs, and activities, can be used on materials designed to promote the work of Sublicensee (e.g., website, brochures, newsletter, letterhead or other printed promotional materials). The right to use the MAIN STREET mark by the Sublicensee is an optional benefit of membership in the MAIN STREET AMERICA program. C.All uses of the NATIONAL MAIN STREET CENTER logo by Sublicensee must follow the specific mark, color, and character usage set forth in the Brand Identity Guidelines attached as Exhibit A, which are incorporated by reference as if fully set forth herein. Sublicensee will not use or develop any different logos or designs (including any symbols or stylized presentations) in connection with the NATIONAL MAIN STREET CENTER mark. Use of the NATIONAL MAIN STREET CENTER logo by Sublicensee is an optional benefit of membership in the MAIN STREET AMERICA program. D.This Sublicense Agreement is subject to the terms, conditions, and limitations of the Trademark License Agreement between NMSC and the Coordinating Program. E.Sublicensee will not apply to register any of the Trademarks, or any other trademark that incorporates any part of the Trademarks or “National Trust for Historic Preservation.” Sublicensee will not state or imply that it owns any such trademarks. F.The Sublicensee will not use the Trademarks in combination with or in juxtaposition with other trademarks except as may be approved in writing by the NMSC. The Sublicensee will apply and display the ® symbol and the ™ symbol next to or with respect to the Trademarks as directed by the Coordinating Program. G.Other than as specifically provided herein, Sublicensee is not granted any other rights to use, license or sublicense the Trademarks. Term. This Sublicense Agreement will become effective immediately upon the date of last signature below, and, unless terminated early under Sections 5 or 10, will be effective through December 31, 20, at which time it may be renewed by mutual written agreement of the parties hereto. Conditions. This Sublicense Agreement between Coordinating Program and Sublicensee is conditioned upon Sublicensee having an active MAIN STREET AMERICA membership at the Accredited level with NMSC. The requirements of this membership are currently available at: http://www.preservationnation.org/main-street/about-main-street/main-street-america/main- street-america-tier.html#.VmYLY7grLIU, and are incorporated herein by reference. Acknowledgment of Ownership. Use of the Trademarks indicates acknowledgment by the Sublicensee of the NMSC’s and the National Trust’s rights and title to the Trademarks, (i.e. MAIN STREET AMERICA, NATIONAL MAIN STREET CENTER, and MAIN STREET), and that Sublicensee will not at any time do, or permit to be done, any act or thing that will in any way impair DocuSign Envelope ID: E0A8D7BD-9B10-451F-93DE-4989BD90F8EB In Processnse Agreement isse Agreem subject to the terms, conditions, and limubject to the terms, conditions, and lim ementement between NMSC and thebetween NMSC and th CoordinatingCoordinating Program. Program. 412 National Main Street Center Local Program Accredited Member Sublicensing Agreement 4 the rights of the NMSC or the National Trust. All use of the Trademarks by the Sublicensee will inure to the benefit of the NMSC and the National Trust. 7. Good will and promotional value. Sublicensee recognizes and acknowledges the value of good will associated with the Trademarks and agrees that it will not conduct any activity, provide any service, or produce or distribute goods which in any way damages or reflects adversely upon the NMSC or the National Trust. 8. Non-assignment. This Sublicense Agreement is personal to the Sublicensee, and may not be assigned to any other individual, program, organization, or agency. Any attempted assignment will be null and void. 9. Compliance Verification. It is the responsibility of the Sublicensee to verify compliance with the terms of this Sublicense Agreement, and to provide complete and accurate usage reports to the Coordinating Program. If the Coordinating Program or the NMSC has reason to believe that the Sublicensee is in violation of this Sublicense Agreement, the Coordinating Program or NMSC shall have the right to make inquiries with Sublicensee as necessary to determine compliance. In such case, the Sublicensee will cooperate with the Coordinating Program and/or NMSC in its investigation and provide in a timely fashion any and all information that is requested. 10. Termination. A. Coordinating Program may terminate this Sublicense Agreement if the Sublicensee violates any of the provisions of this Sublicense Agreement or fails to satisfy the membership criteria established by the NMSC for Accredited Local Programs. Such termination will be effective thirty (30) days after the Coordinating Program sends written notice of such termination to Sublicensee. During this thirty (30) day period, Sublicensee may attempt to cure such violation. If the violation is not cured during this period, the termination will be effective upon the expiration of the thirty (30) day period. B. This Sublicense Agreement will automatically terminate immediately without any notice required, notwithstanding the above paragraph, if the Coordinating Program or NMSC determines: (i) that sublicensee’s actions could negatively affect the goodwill, image, or reputation of the NMSC, the National Trust for Historic Preservation, the Coordinating Program, or any of the Trademarks; (ii) the Sublicensee discontinues all or a significant portion of its business; (iii) the National Trust terminates, revokes, or fails to renew the NMSC’s rights to use, license, or sublicense the Trademarks; or (iv) the NMSC terminates, revokes or fails to renew the Coordinating Program’s rights to use, license or sublicense the Trademarks. C. Upon the expiration or early termination of this Agreement, the Sublicensee will discontinue use of the Trademarks and will destroy and delete tangible and electronic documents and files containing any such marks, except for a limited number of copies retained for archival purposes only. 11. Governing Law. This Agreement is entered into in the District of Columbia and will be governed by and construed in accordance with the laws of the District of Columbia, USA, without giving effect to conflict of laws provisions. 12. Annual Report, Notices, Other Communication. Upon request by the Coordinating Program or NMSC, Sublicensee shall submit samples of any materials on which the Trademarks DocuSign Envelope ID: E0A8D7BD-9B10-451F-93DE-4989BD90F8EB In ProcessProgramProgrammay terminate thismay terminate this SublSublicense Agreement if thicense Agreement if th eprovisionsofthisiiSublSbicense Agreement or fails to satisfy thcense Agreement or fails to satisfy th 413 DocuSign Envelope ID: E0A8D7BD-9B10-451F-93DE-4989BD90F8EB 414 National Main Street Center Local Program Accredited Member Sublicensing Agreement 6 By: ___________________________ Name, Title Date: _________________________ By: ___________________________ Name, Title Date: _________________________ DocuSign Envelope ID: E0A8D7BD-9B10-451F-93DE-4989BD90F8EB In Process 415 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-170,Version:1 AGENDA CAPTION Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute an Interlocal Agreement with the Denton Independent School District for distance learning through Operation Connectivity wherein the City agrees to contribute an amount not-to-exceed $571,167.74; and declaring an effective date. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™416 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Finance ACM: David Gaines DATE: February 9, 2021 SUBJECT Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute an Interlocal Agreement with the Denton Independent School District for distance learning through Operation Connectivity wherein the City agrees to contribute an amount not-to-exceed $571,167.74; and declaring an effective date. BACKGROUND A state program called Operation Connectivity has been established to help families struggling financially. The City Council approved a resolution supporting the funding of Operation Connectivity in September 2020. Operation Connectivity is a partnership with the Texas Education Agency to connect students with devices and reliable internet connections. Denton ISD has asked the City to partner in funding the program through CRF funds with an allocation based on the number of disadvantage students in the City totaling $571,167.74. Since the City used CRF funds for public safety salaries, the funding will be paid by the General Fund. The Operation Connectivity program will match CRF contributions from other localities, allowing DISD to fully leverage the City of Denton CRF funds. This Interlocal Agreement establishes the terms of the contribution. The City’s reimbursement from DISD for School Resource Officers (SRO) will be increased by $571,167.74 for January to June 2021 through an addendum to the SRO agreement. RECOMMENDATION Staff recommends approval of the amendment. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On September 22, 2020, City Council approved Resolution 20-1933 supporting a letter of commitment for funding of Operation Connectivity. EXHIBITS 1. Agenda Information Sheet 2. Ordinance 3. Resolution 20-1933 Respectfully submitted: Cassey Ogden, Director of Finance City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 417 ORDINANCE NO. _________________ AN ORDINANCE OF THE CITY OF DENTON AUTHORZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE AN INTERLOCAL AGREEMENT WITH THE DENTON INDEPENDENT SCHOOL DISTRICT FOR DISTANCE LEARNING THROUGH OPERATION CONNECTIVITY WHEREIN THE CITY AGREES TO CONTRIBUTE AN AMOUNT NOT-TO-EXCEED $571,167.74; AND DECLARING AN EFFECTIVE DATE. WHEREAS, the City of Denton (“City”) is a home-rule municipal corporation and Denton Independent School District (“DISD”) is a unit of government established under the laws of the State of Texas for the purpose of implementing the state’s system of public education and ensuring student performance in accordance with the Texas Education Code, and the City and DISD are authorized to execute an Interlocal Cooperation Agreement under Section 791 of the Texas Government Code; and WHEREAS, Governor Abbott declared a State of Disaster in Texas due to COVID-19 on March 13, 2020, and cities, schools, universities and other governmental entities began to alter their schedules as well as closing facilities; and WHEREAS, DISD has requested that the City transfer $571,167.74 to DISD for Operation Connectivity to provide remote-learning technology for students with no effective access to computers or the internet and providing education or training delivered off campus via educational technologies where the student(s) and the instructor(s) are separated by physical distance and/or time (“Distance Learning”); and WHEREAS, the City of Denton approved Resolution 20-1933 on September 22, 2020, which authorized the City Manager to execute a Letter of Commitment to transfer funds to DISD to purchase technology for Distance Learning and increasing the DISD contribution for City expenses for providing school resource officers; and WHEREAS, the State of Texas provides matching funds to DISD for Operation Connectivity based on the City’s contribution of funds; and WHEREAS, DISD has applied for a grant from the Texas Education Agency (“TEA”) to provide matching funds for Distance Learning in accordance with Operation Connectivity; and WHEREAS, the City will transfer funds from its general fund to DISD to facilitate Distance Learning, including tech improvements, in connection with school closing; and WHEREAS, the City does not plan to transfer funds received under the Coronavirus Aid, Relief, and Economic Security Act (hereinafter “CARES Act”) to DISD, but rather, to use monies from the City’s general fund to meet the City’s obligations under this Agreement; and WHEREAS, if the City does transfer CARES Act funds to DISD, the City and DISD will comply with all requirements of the CARES Act, including that certain Interlocal Cooperation Agreement for the administration of the distribution of some of Denton County’s CARES Act (the “Denton County CARES Act Funding Agreement”); and 418 PAGE 2 WHEREAS, the City has allocated $571,167.74 of its general fund for the DISD to match the TEA grant to cover expenses incurred providing Distance Learning through ‘Operation Connectivity’ for students residing in the City of Denton; and WHEREAS, the City Council believes it to be in the best interest of the citizens of Denton to enter into the Interlocal Agreement between the City of Denton and Denton Independent School District for Distance Learning Through ‘Operation Connectivity” (“ILA”) attached hereto as Exhibit “A” and incorporated herein for all purposes; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and recitations contained in the preamble of this ordinance are incorporated herein by reference. SECTION 2. The City Council hereby approves and authorizes the City Manager or his designee to execute the ILA and expend funds in accordance therewith in the amount not-to- exceed $571,167.74 for DISD to purchase remote-learning technology for students with no effective access to computers or the internet for Distance Learning in accordance with the terms of the ILA. Minor adjustments to the attached ILA are authorized, such as filling in blanks and minor clarifications or corrections, and any modifications made by City Council in the approval of this ordinance. SECTION 3. This ordinance shall become effective immediately upon its passage and approval. The motion to approve this ordinance was made by __________________________ and seconded by _________________________________, the ordinance was passed and approved by the following vote [___ - ___]: Aye Nay Abstain Absent Mayor Gerard Hudspeth: ______ ______ ______ ______ Birdia Johnson, District 1: ______ ______ ______ ______ Connie Baker, District 2: ______ ______ ______ ______ Jesse Davis, District 3: ______ ______ ______ ______ John Ryan, District 4: ______ ______ ______ ______ Deb Armintor, At Large Place 5: ______ ______ ______ ______ Paul Meltzer, At Large Place 6: ______ ______ ______ ______ PASSED AND APPROVED this, the _____ day of _____________, 2021. _____________________________ GERARD HUDSPETH, MAYOR 419 PAGE 3 ATTEST: ROSA RIOS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: _________________________________ 420 THE STATE OF TEXAS § § COUNTY OF DENTON § INTERLOCAL AGREEMENT BETWEEN CITY OF DENTON AND DENTON INDEPENDENT SCHOOL DISTRICT FOR DISTANCE LEARNING THROUGH ‘OPERATION CONNECTIVITY’ This agreement (“Agreement”) is made and entered into as of the Effective Date by and between the City of Denton, a Texas home-rule municipality (the “City”), and the Denton Independent School District, (the “Denton ISD”) (City and Denton ISD collectively referred to hereafter as the “Parties” or individually as a “Party”) WITNESSETH: WHEREAS, Governor Abbott declared State of Disaster in Texas due to COVID-19 on March 13, 2020 and cities, schools, universities and other governmental entities began to alter their schedules as well as closing facilities; and WHEREAS, the Denton ISD is a unit of government established under the laws of the State of Texas for the purpose of implementing the state’s system of public education and ensuring student performance in accordance with the Texas Education Code; and WHEREAS, Denton ISD has requested that the City transfer $571,167.74 to the Denton ISD for Operation Connectivity in accordance with Exhibit “A” attached hereto and incorporated herein for all purposes, to provide remote-learning technology for students with no effective access to computers or the internet and providing education or training delivered off campus via educational technologies where the student(s) and the instructor(s) are separated by physical distance and/or time (“Distance Learning”); and WHEREAS, the City of Denton approved Resolution 20-1933 on September 22, 2020, which authorized the City Manager to execute a Letter of Commitment to transfer funds to Denton ISD to purchase technology for Distance Learning and increasing the Denton ISD contribution for City expenses for providing school resource officers; and WHEREAS, the State of Texas provides matching funds to Denton ISD for Operation Connectivity based on the City’s contribution of funds; and WHEREAS, the City will transfer funds from its general fund to Denton ISD to facilitate Distance Learning, including tech improvements, in connection with school closing; and WHEREAS, the City does not plan to transfer funds received under the Coronavirus Aid, Relief, and Economic Security Act (hereinafter “CARES Act”) to Denton ISD, but rather, to use monies from the City’s general fund to meet the City’s obligations under this Agreement; and WHEREAS, if the City does transfer CARES Act funds to Denton ISD, Denton ISD certifies it will comply with all requirements of the CARES Act, including that certain Interlocal Cooperation Agreement for the administration of the distribution of some of Denton County’s CARES Act (the “Denton County CARES Act Funding Agreement”); and 421 WHEREAS, costs associated with Operation Connectivity are authorized and meet all known guidance and general rules from the state and federal government regarding the use of CARES Act funds; and WHEREAS, Denton ISD has applied for a grant from the Texas Education Agency (“TEA”) to provide matching funds for Distance Learning in accordance with Operation Connectivity; and WHEREAS, the City has allocated $571,167.74 of its general fund for the Denton ISD to match the TEA grant and cover expenses incurred providing Distance Learning through ‘Operation Connectivity’ for students between March 1, 2020 and December 30, 2021; NOW THEREFORE, in consideration of all mutual covenants and agreement hereinafter set forth, and other good and valuable consideration the sufficiency and receipt of which is hereby acknowledged, the Parties agree as follows: Article 1 Term; Termination 1.1 This Agreement shall be effective upon execution by the Parties (“the Effective Date”) and shall expire on December 30, 2021, unless terminated sooner as provided herein. 1.2 This Agreement may be terminated upon written notice by either Party in the event the other Party breaches any of the terms or conditions of this Agreement and such breach is not cured within thirty (30) days after written notice thereof. In the event of termination by the City, Denton ISD shall immediately return any unexpended funds provided by the City pursuant to this Agreement. Article II Services 2.1 Administration. The Denton ISD agrees to administer the Operation Connectivity program to provide for Distance Learning for residents of the City of Denton in accordance with the provisions of Exhibit “A.” 2.2 Payment of Funds. The City agrees to pay Denton ISD up to the sum of $571,167.74 for Distance Learning in accordance with the terms of this Agreement. The Parties fully understand and agree that the City will only transfer funds to Denton ISD pursuant to this Agreement in the event additional funding is approved and provided by the TEA to Denton ISD after September 22, 2020 for Distance Learning in accordance with Operation Connectivity. Denton ISD will notify the City as soon as possible following the determination of additional funding. In the event additional funding is approved by TEA, the amount of the City payment will be equal to the funding approved and provided by TEA to Denton ISD after September 22, 2020 for Operation Connectivity, the City’s payment not to exceed the sum of $571,167.74. 422 2.3 Eligible Expenditures. The funding provided by the City shall only be applied to eligible, actual and paid Distance Learning expenditures incurred for the purpose of addressing or responding to the COVID-19 public health emergency and made between March 1, 2020 and December 30, 2021. All Distance Learning expenditures must be paid on or before December 30, 2021 to be eligible. Any Distance Learning expenditures obligated, but not yet paid by this time shall not be eligible expenditures. All Distance Learning expenditures shall only be paid for Denton ISD students residing within the City of Denton corporate boundary. 2.4 Tracking. Denton ISD shall track and document all distributions and use of the funds provided by the City pursuant to this Agreement. The Denton ISD shall keep and maintain all records of the administration and use of Distance Learning funds for a period of five years. 2.5 Use of Funds if CARES Act Funds Provided. This Section 2.5 only applies if the City provides CARES Act funding to Denton ISD. The use of Distance Learning funds shall comply with the CARES Act and all U.S. Treasury Department regulations or guidelines thereunder. Denton ISD acknowledges and understands that its use of Distance Learning funding is subject to the same terms and conditions as the Denton County Cares Act Funding Agreement and the CARES Act. Denton ISD hereby agrees to comply with all terms and conditions relating to the use of funds from the Denton County CARES Act Funding Agreement funds and the CARES Act. Denton ISD agrees to document and justify that each Distance Learning expenditure is an eligible expense under the CARES Ac and document all expenditures and distributions made for the Distance Learning to the City by no later than January 15, 2022, and keep and maintain copies of such documentation for the retention period applicable to the CARES Act. The Parties understand that the distribution of funds for Distance Learning is an eligible use of the Denton County CARES Act Funding Agreement and CARES Act funds. If the County, the U.S. Department of Treasury, or its designee, in its reasonable discretion, determines that the expenditure of Funds is not an eligible expenditure, then Denton ISD shall be responsible to make any necessary reimbursement in an amount equal to the amount of the ineligible expenditure from other of its funds. 2.6 Administration. The Denton ISD shall manage and administer Operation Connectivity within the City of Denton as follows: a) The Denton ISD shall submit to the City: 1. A letter certifying the expenditures for which the Denton ISD used funds received pursuant to this Agreement; 2. Documentation verifying the number of students that reside in Denton and attend a school within the Denton ISD; and 3. Documentation verifying the number of students that reside in Denton that received technology and hotspots from Denton ISD for reliable internet connections and the associated expenditures by Denton ISD. 2.7 Supporting Material. The City has the right to access and review any supporting 423 material and reject/refuse payment for any of the expenditures if determined ineligible or to have insufficient information. 2.8 No Duplication of Assistance Applications. Denton ISD cannot be currently seeking or have received assistance for the same expenses under any other federal, state, or local program. 2.9 Repayment of Unused Funds. Any funds not expended by Denton ISD as provided herein by 11: 59 PM December 30, 2021 shall be returned to the City within 30 days. 2.10 Reports. Denton ISD shall provide periodic reports on the use of the funds provided by City as requested or required by the City. Article III Miscellaneous Provisions 3.1 Entire Agreement. This Agreement constitutes the sole and only agreement between the Parties and supersedes any prior understandings written or oral agreements between the Parties with respect to this subject matter. 3.2 Assignment. Denton ISD may not assign this Agreement in whole or in part without the prior written consent of City. In the event of an assignment by Denton ISD to which City has consented, the assignee shall agree in writing with City to personally assume, perform, and be bound by all the covenants, and obligations contained in this Agreement. 3.3 Successors and Assigns. Subject to the provisions regarding assignment, this Agreement shall be binding on and inure to the benefit of the Parties to it and their respective successors and assigns. 3.4 Governing Law; Venue. The laws of the State of Texas shall govern this Agreement; and venue for any action concerning this Agreement shall be in a state court of competent jurisdiction in Denton County, Texas. The Parties agree to submit to the personal and subject matter jurisdiction of said Court. 3.5 Amendments. This Agreement may be amended only by the mutual written agreement of the Parties. 3.6 Audits and Records. Denton ISD agrees that during the term hereof the City and its representatives may, during normal business hours and as often as deemed necessary, inspect, audit, examine and reproduce any and all of Denton ISD’s records relating to the services provided pursuant to this Agreement for a period of one year following the date of completion of services as determined by the City or date of termination if sooner. 3.7 Severability. In the event any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions, and the Agreement 424 shall be construed as if such invalid, illegal, or unenforceable provision had never been contained in it. 3.8 Independent Contractor. It is understood and agreed by and between the Parties that Denton ISD in satisfying the conditions of this Agreement, is acting independently, and that City assumes no responsibility or liabilities to any third party in connection with these actions. All services to be performed by Denton ISD pursuant to this Agreement shall be in the capacity of an independent contractor and not as an agent or employee of City. Denton ISD shall supervise the performance of its services and shall be entitled to control the manner and means by which its services are to be performed, subject to the terms of this Agreement. 3.9 Notices. Any notice required or permitted to be delivered hereunder may be sent by first class mail, overnight courier or by confirmed or facsimile to the address specified below, or to such other party or address as either Party may designate in writing, and shall be deemed received three (3) days after delivery set forth herein: If intended for City, to: Todd Hileman, City Manager City of Denton 215 E. McKinney Denton, TX 76201 If intended for Denton ISD: Dr. Jamie Wilson, Superintendent of Schools Denton Independent School District 1307 N. Locust Denton, TX 76201 3.10 Counterparts. This Agreement may be executed by the Parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of any number of copies hereof each signed by less than all, but together signed by all of the Parties hereto. 3.11 Exhibits and Recitals. The recitals and exhibits attached hereto are incorporated herein and made a part hereof for all purposes. 3.12 Survival of Covenants. Any of the representations, warranties, covenants, and obligations of the Parties, as well as any rights and benefits of the Parties, pertaining to a period of time following the termination of this Agreement shall survive termination. (signatures on following page) 425 SIGNED AND AGREED this _______ day of _____________________, 2021. CITY OF DENTON By: Todd Hileman, City Manager Attest: __________________________________ Rosa Rios, City Secretary Approved as to Form: Aaron Leal, City Attorney SIGNED AND AGREED this _______ day of _____________________, 2021. DENTON INDEPENDENT SCHOOL DISTRICT By: ______________________________________ Dr. Jamie Wilson, Superintendent 426 427 428 429 ORDINANCE NO.20-1933 A RESOLUTION OF THE CITY OF DENTON AUTHORZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE A LETTER OF COMMITMENT TO TRANSFER FUNDS FROM THE CITY OF DENTON’S CARES ACT FUNDING TO THE DENTON INDEPENDENT SCHOOL DISTRICT TO PURCHASE REMOTE-LEARNING TECHNOLOGY; AND DECLARING AN EFFECTrVE DATE. WHEREAS, Governor Abbott declared State of Disaster in Texas due to COVID-19 on March 13, 2020 and cities, schools, universities and other governmental entities began to alter their schedules as well as closing facilities; and WHEREAS, the federal government granted money to the states to combat financial problems caused by COVID-19 through the CARES Act and the State of Texas and Denton County provided money to the City of Denton (“City”) through a subgrant; and WHEREAS, the CARES Act money can be spent on six (6) broad categories: 1 2 3. 4. 5. 6. Medical expenses Public health expenses Payroll expenses for public safety, public health, health care, human services, and similar employees whose services are substantially dedicated to mitigating or responding to the COVID-19 public health emergency. Expenses of actions to facilitate compliance with COVID-19 related public health measures. Expenses associated with the provision of economic support in connection with the COVID- 19 public health emergency. Any other COVID-19 – related expenses reasonably necessary to the function of government that satisfy the fUnd’s eligibility criteria; and WHEREAS, the grant administration documents allow local governments which have received grants to transfer some of the monies they receive to other governments with certain restrictions; and WHEREAS, Denton ISD has requested that the City transfer $571,167.74 to the Denton ISD for Operation Connectivity to provide remote-learning technology for students with no effective access to computers or the internet; and WHEREAS, the State of Texas provides matching funds to Denton ISD based on the City’s contribution of CARES Act funds; and WHEREAS, the transfer meets all known guidance and general rules from the state and federal government regarding the use of CARES Act funds; and WHEREAS, the transfer of funds will be used to facilitate distance learning, including tech improvements, in connection with school closing, which is authorized and meets all known 430 guidance and general rules from the state and federal government regarding the use of CARES Act funds; and WHEREAS, prior to the transfer of the City’s CARES Act funds to Denton ISD, the City and Denton ISD shall enter into an interlocal agreement detailing the terms of transfer and requiring compliance with all requirements of the CARES Act; and WHEREAS, the City Council believes it to be in the best interest of the citizens of Denton to provide a Letter of Commitment to Denton ISD; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES : SECTION 1. The findings and recitations contained in the preamble of this resolution are incorporated herein by reference. SECTION 2. The City Council hereby authorizes the City Manager to execute a Letter of Commitment to transfer CARES Act funds in the amount of $571,167.74 to the Denton Independent School District for use in purchasing remote-learning technology for students with no effective access to computers or the internet in accordance with the terms of an Interlocal Agreement between the City and Denton ISD to be approved by City Council at a later date and prior to the transfer of the funds. SECTION 3. This resolution shall become effective immediately upon its passage and approval at a regular meeting of the City Council of the City of Denton, Texas, on this the 22nd day of September 2020. The motion to approve this resolution was made by W\e'e\\S and the resolution was passed ;fIFapproved byB\seconded by 3a r\ the following vote la - O Aye 34 34 Jr 34\/ aZ Nay Abstain Absent Mayor Chris Watts: Gerard Hudspeth, District 1 : Keely G. Briggs, District 2: Jesse Davis, District 3 : John Ryan, District 4: Deb Armintor, At Large Place 5: Paul Meltzer, At Large Place 6: He PAGE 2 431 PASSED AND APPROVED this th, ZZnJ d,y ,f &?My\M _, 2020. mwMTS, m ATTEST: ROSA RIOS, CITY SECRETARY zAqz _ pai/). APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY J/..L - rt,G, ABY: 432 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-142,Version:1 AGENDA CAPTION Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute an addendum to Memorandum of Understanding with the Denton Independent School District, for reimbursement to the City in the additional estimated amount of $571,167.74 for compensation and benefits of Student Resource Officers assigned at DISD for the period of January 1, 2021, through June 30, 2021, and providing an effective date. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™433 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Finance ACM: David Gaines DATE: February 9, 2021 SUBJECT Consider adoption of an ordinance of the City of Denton authorizing the City Manager or his designee to execute an addendum to Memorandum of Understanding with the Denton Independent School District, for reimbursement to the City in the additional estimated amount of $571,167.74 for compensation and benefits of student resource officers assigned at DISD for the period of January 1, 2021, through June 30, 2021, and providing an effective date. BACKGROUND The Student Resource Officer (SRO) Program is a cooperative partnership between the City of Denton and DISD which assigns police officers to designated middle and high schools within city limits. Student Resources Officers work their assigned campus on a full-time basis with the purpose of providing a “student centric” approach towards building a positive relationship between police officers and students. The MOU agreement is reviewed and approved annually, which outlines the mission, goals, and the financial aspects of the SRO program. For the 2020-2021 academic year, the agreement included one (1) Police Lieutenant position to provide program oversight over the (9) Student Resource Officers. The original agreement contemplated DISD to reimburse the City for the annual salary and fringe benefits of one (1) Police Lieutenant at a rate of one hundred (100) percent and nine (9) Student Resource Officers at a rate of fifty (50) percent, effective July 1, 2020, through June 30, 2021. This addendum increases the reimbursement from DISD to the City including 100% of the estimated salary and benefits for nine (9) SRO’s and one (1) Lieutenant located at DISD High Schools and Middle Schools. The payment for January to March will be increased from $203,507 to $489,090.87. The payment for April to June will be increased from $203,507 to $489,090.87. RECOMMENDATION Staff recommends approval of the amendment. PRIOR ACTION/REVIEW (Council, Boards, Commissions) On October 13, 2020, City Council adopted Ordinance 20-1918 executing an agreement with DISD for an estimated reimbursement of $609,276 for compensation and benefits of Student Resource Officers assigned at DISD. The Denton ISD Board of Trustees voted on January 12, 2021 to approve the SRO addendum. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 434 FISCAL INFORMATION Reimbursement is received through the General Fund in account number 1000.4632. EXHIBITS 1. Agenda Information Sheet 2. Ordinance 3. Ordinance 20-1918 Respectfully submitted: Cassey Ogden, Director of Finance 435 ORDINANCE NO. _______________ AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE AN ADDENDUM TO MEMORANDUM OF UNDERSTANDING WITH THE DENTON INDEPENDENT SCHOOL DISTRICT, FOR REIMBURSEMENT TO THE CITY IN THE ADDITIONAL ESTIMATED AMOUNT OF $571,167.74 FOR COMPENSATION AND BENEFITS OF STUDENT RESOURCE OFFICERS ASSIGNED AT DISD FOR THE PERIOD OF JANUARY 1, 2021, THROUGH JUNE 30, 2021, AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Denton ("City") and the Denton Independent School District ("DISD") enter into a Memorandum of Understanding on October 13, 2020 to provide Student Resource Officers; and WHEREAS, the mission of the Student Resource Officers Program is the reduction and prevention of school related crime committed by juveniles and young adults, while providing safety and security for the students, faculty and staff; and WHEREAS, for the 2020-2021 academic year, DISD has agreed to increase the amount of reimbursement paid to the City for the annual salary and fringe benefits of one (1) Police Lieutenant and nine (9) Student Resource Officers by up to $571,167.74, for the period of January 1, 2021, through June 30, 2021; and WHEREAS, the City agrees to be bound to the mutual obligations outlined in the Addendum to Memorandum of Understanding ("MOU Addendum") attached hereto and made a part hereof by reference; and WHEREAS, the City Council of the City of Denton hereby finds that the MOU Addendum between the City and DISD serves a municipal and public purpose, is in the public interest, and of a benefit to the citizens of the City of Denton; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and recitations contained in the preamble of this Ordinance are incorporated herein by reference. SECTION 2. That the City Manager, or his designee, is hereby authorized to execute the MOU Addendum with DISD to carry out the duties and responsibilities of the City under the MOU Addendum, which is attached hereto as Exhibit "A" and made a part hereof for all purposes. Minor adjustments to the attached MOU Addendum are authorized, such as filling in blanks and minor clarifications or corrections, and any modifications made by City Council in the approval of this Ordinance. SECTION 3. That all prior actions taken by the City Manager in furtherance of the MOU Addendum are hereby ratified. 436 SECTION 4. That this Ordinance shall become effective immediately upon its passage and approval. The motion to approve this ordinance was made by __________________________ and seconded by _________________________________, the ordinance was passed and approved by the following vote [___ - ___]: Aye Nay Abstain Absent Mayor Gerard Hudspeth: ______ ______ ______ ______ Birdia Johnson, District 1: ______ ______ ______ ______ Connie Baker, District 2: ______ ______ ______ ______ Jesse Davis, District 3: ______ ______ ______ ______ John Ryan, District 4: ______ ______ ______ ______ Deb Armintor, At Large Place 5: ______ ______ ______ ______ Paul Meltzer, At Large Place 6: ______ ______ ______ ______ PASSED AND APPROVED this, the _____ day of _____________, 2021. _____________________________ GERARD HUDSPETH, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY BY: APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: ________________________________ Digitally signed by Mack Reinwand Date: 2021.02.04 13:31:16 -06'00' 437 1 of 2 ADDENDUM to MEMORANDUM OF UNDERSTANDING (MOU) The Denton Independent School District (hereinafter “DISD”) and the City of Denton, a Texas home rule municipal corporation (hereinafter “City”), hereby agree to this Addendum (“Addendum”) to the Memorandum of Understanding (“MOU”) which was executed by the City on October 13, 2020. The Parties agree that the changes herein solely pertain to the current 2020-2021 School year. The Parties fully understand and agree that this increase will only be effective in the event additional funding is approved by the Texas Education Agency (“TEA”) to offset this increase. DISD will notify the City as soon as possible following the determination of additional funding. In the event additional funding is approved by TEA, the Parties agree that the Total Reimbursements found in “Attachment A” of the MOU shall be adjusted for the remaining FY 20-21 billing payments as follows: x The payment for January – March will be increased from $203,507 to $489,090.87. x The payment for April – June will be increased from $203,507 to $489,090.87. The reimbursement includes 100% of the estimated salary and benefits for nine (9) SRO’s and one (1) Lieutenant located at DISD High Schools and Middle Schools. The Parties agree that all other provisions of the MOU shall remain in full effect. Agreed to in cooperation with the City of Denton and the Denton Independent School District. AUTHORIZED SIGNATURES: __________________________________ ________________________ Todd Hileman, City Manager Date City of Denton 215 E. McKinney Denton, TX 76201 ____________________________________ ________________________ Dr. Jamie Wilson, Superintendent of Schools Date Denton Independent School District 1307 N. Locust Denton, TX 76201 438 2 of 2 ATTEST: _____________________________ Rosa Rios, City Secretary City of Denton APPROVED AS TO FORM: _____________________________ Aaron Leal, City Attorney City of Denton Digitally signed by Mack Reinwand Date: 2021.02.04 13:31:44 -06'00' 439 ORDINANCE NO.20-1918 AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE. TO EXECUTE AN INTERLOCAL AGREEMENT IN THE FORM OF A MEMORANDUM OF UNDERSTANDING WITH THE DENTON INDEPENDENT SCHOOL DISTRICT (DISD), FOR REMBURSENIENT TO THE CITY IN THE ESTIMATED AMOUNT OF $609,276 FOR COMPENSATION AND BENEFITS OF STUDENT RESOURCE OFFICERS (SROs) ASSIGNED AT DISD FOR THE PERIOD OF JULY 1, 2020, THROUGH JUNE 30, 2021, AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Denton ("City") and the Denton Independent School District (“DISD") desire to enter into an agreement to provide Student Resource Officers; and WHEREAS, the mission of the SRO Program is the reduction and prevention of school related crime committed by juveniles and young adults, while providing safety and security for the students, faculty and staff; and WHEREAS, for the 2020-2021 academic year, DISD has agreed to reimburse the City for the annual salary and fringe benefits of one (1) Police Lieutenant at a rate of one hundred (100) percent and the nine (9) Student Resource Officers at a rate of fifty (50) percent, effective July 1, 2020, through June 30, 2021. WHEREAS, the City and DISD, parties hereto agree and by the execution hereof are bound to the mutual obligations outlined in the Memorandum of Understanding ("MOU") attached hereto and made a part hereof by reference; and WHEREAS, the City Council of the City of Denton hereby finds that the MOU between the City and DISD serves a municipal and public purpose, is in the public interest, and of a benefit to the citizens of the City of Denton; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS : SECTION 1 : The findings and recitations contained in the preamble of this Ordinance are incorporated herein by reference SECTION 2: That the City Manager, or his designee, is hereby authorized to execute the Memorandum of Understanding with the DISD to carry out the duties and responsibilities of the City under the MOU, which is attached hereto as Exhibit " A’' and made a part hereof for all purposes. SECTION 3: That all prior actions taken by the City Manager in furtherance of this MOU are hereby ratified. 440 SECTION 4. That this Ordinance shall become effective immediately upon its passage and approval. r\the OrdinmrI The motion to aDDrove this Ordinance was made by '\To hq seconded by A the following vote [Z - 1>] : R IRA and passed and approved by @ Nw Abstain Absent Chris Watts, Mayor: Gerard Hudspeth, District 1 : Keely G. Briggs, District 2: Jesse Davis, District 3 : John Ryan, District 4: Deb Armintor, At Large Place 5 : Paul Meltzer, At Large Place 6: 34 V/’ j£ Jd ,/ y’ .J \ atbPASSED AND APPROVED this the day of OC+obe (_, 2020. ATTEST: ROSA RIOS, CITY SECRETARY _,#a2 J APPROVED AS TO LEGAL FORM AARON LEAL, CITY 'ORNEY 441 MEMORANDUM OF UNDERSTANDING (MOU) This Memorandum of Understanding (MOU) is between Denton Independent School District (hereinafter “DISD-) and the City of Denton, a Texas home rule municipal corporation (hereinafter “City”). Nothing in this MOU should be construed as limiting or impeding the basic spirit of cooperation which exists between the participating entities listed above. I. Purpose This MOU establishes and delineates the mission of the Student Resource Officer Program, herein referred to as the SRO Program, as a joint cooperative effort, whereby the City hereby wishes to provide one or more Student Resource Officers for the SRO Program, and DISD wishes to share the costs of the City’s providing Student Resource Officers. Additionally, the MOU formalizes relationships between the participating entities to provide a “student centric” approach towards building a positive relationship between police officers and students. II. Mission The mission of the SRO program is to create and maintain a safe, secure, and orderly learning environment for students, school officials, teachers, and staff. The SROs will establish trusted communication between students, parents, teachers, and school officials. SROs will serve as positive role models to instill good moral standards, judgment and discretion, respect for others, and a sincere concern for the school community. SROs will promote awareness of the law to enable students to become better informed and effective citizens, while empowering students with the knowledge of law enforcement efforts and obligations, as weN as consequences for violating the law. SROs will serve as a resource for students, school officials, and parents and will provide information on available community resources. The following goals are established to accomplish this mission 111.SRO Program Goals The following goals are established to accomplish the mission of the SRO Program: 1) Promote a safe environment for students, faculty, and staff. 2) Reduce criminal offenses committed by juveniles or young adults by utilizing both proactive and reactive law enforcement measures. 3) Establish a positive approach with students, faculty, administrative staff, and parents. 1 of 6 442 IV. Organizational Structure A. Composition The SRO program will consist of full-time Denton Police Department (DPD) personnel who are certified peace ofFicers for the State of Texas and meet all requirements as set forth by DPD General Orders. gROs will be assigned to the following schools: I • • • • • e Denton High School Ryan High School Guyer High School Calhoun Middle School Strickland Middle School McMath Middle School B. Operational Procedures The daily operation and administrative control of the SRO Program is the responsibility of DPD. Responsibility for the conduct of gROs. both personally and professionally, remains with the DPD. The department shall retain supervision of SROs to oversee the SRO Program. C. SRO Duties SROs, first and foremost, are Law Enforcement Officers. SROs are responsible for carrying out all duties and responsibilities of a police officer and shall at an times, through the chain of command. remain under the exclusive control of DPD. SROs are enforcement officers in regard to CRIMINAL matters only. SROs shall not enforce any “school or house rule,” as they are not school disciplinarians and should not assume this role. SROs will not become involved in administrative matters of the DISD which are not criminal matters. SROs are to be used as a law enforcement resource to assist students, faculty, staff, and all persons involved with the DISD. SROs may be called upon to teach a variety of law enforcement related subjects to students, school staff, and officials. Teaching is not only a formal opportunity to educate the campus population, but also another method to build rapport with students. school staff, and officials. DPD SROs responsibilities will include, but not limited to: 1) 2) Enforcing criminal law and protecting the students, staff, and public at large against criminal activity. and taking enforcement action on criminal matters when appropriate; Taking initial reports of crimes committed on campus and, if practical, investigating these crimes according to the case clearance criteria of DPD; 2 of 6 443 3) Providing information concerning law enforcement topics to students, school officials and staff; 4) Providing mentoring/coaching on a limited basis, to students, school officials, and staff 5) As time allows, presenting information in the classroom on a variety of topics including, but not limited to, narcotics, personal safety, criminal law, leadership and life skills; and i 6) Assisting staff with unusual or temporary problems related to law enforcement matters which may require SROs on occasion to be assigned to monitor halls, buses, lunchroom. etc. on the school campus, but at no time will an SRO be regularly assigned to monitor such areas. D. Supervisor Duties The Parties desire to create a Supervisor position, at the level of Lieutenant for DPD, who will provide supervisory duties for DPD SRO’s assigned to the DISD and provide safety coordination for DISD. This position shall work solely with DISD, except during times when DPD emergencies require the Supervisor's presence. The Supervisor position shall be a Full-Time Employee of the Denton Police Department, and DISD shall reimburse the City of Denton at a rate of one hundred (100) percent for the salary and benefits of this position. The duties of the Lieutenant position include the following: 1) Complete State Required District Safety Audits; 2) Act as a liaison and District Representative between the school district and law enforcement agencies; 3) Ensure that gROs assigned to the DISD remain up to date in state training expectations; 4) Direct community safety and police activities at DISD extracurricular events; 5) Ensure that campus safety plans are up to date and in compliance with state expectations; and 6) Act as a liaison during assessments between the campus, school district, and police departments. I I ; 3 of 6 444 V. School District Responsibilities DISD shall provide the Lieutenant and the SRO of each campus with the following facilities and materials deemed necessary to the performance of the Lieutenant and SRO’s duties: 1) An air conditioned and properly lighted, private office, which may be used for general business purposes, located as close as possible to the main entrance of the school 2) A desk with drawers, chair. and a locking filing cabinet 3) A computer and printer A. Reimbursement Effective July 1, 2020 through June 30, 2021, DISD agrees to reimburse the City of Denton for the annual salary and fringe benefits at a rate of fifty (50) percent for nine (9) SROs and at a rate of one (100) hundred percent for one (1) the Lieutenant supervisor position. Reimbursement of the SRO's and Lieutenant’s annual salary is inclusive of any overtime, longevity pay, assignment pay, certification pay, holiday pay. and any other pay each assigned SRO or Supervisor may be eligible to receive under the Meet and Confer Agreement between the City of Denton and the Denton Police Officers Association and/or under Chapter 143 of the Texas Local Government Code for SROs assigned to the following campuses: e e • • • • Denton High School Ryan High School Guyer High School Calhoun Middle School McMath Middle School Strickland Middle School The amount of reimbursement set forth in Section V Paragraph A of this Memorandum of Understanding shall, effective the date of the execution hereof, be as set forth in Attachment A hereto and made a part of this MOU by reference. The amount of such reimbursement shall thereafter be adjusted not less frequently than annually in accordance with the setting of annual salary and benefits for the Lieutenant and the SROs by the Denton City Council. VI. Denton Police Department Responsibilities 4 of 6 445 DPD will endeavor to have SROs (including the Lieutenant) available for duty at their assigned school each day that school is in session during the regular school year. There is no requirement for DPD to furnish substitute officers on days when the assigned SRO (or Lieutenant) is absent. DPD agrees to invoice DISD quarterly for all monies owed as a result of this MOU, and to submit appropriate payroll documentation with the invoice. All invoices will be due immediately and should be paid within thirty (30) days of receipt by DISD. VII. Termination This MOU may be terminated by either party upon thirty (30) days written notice in writing to the other party at the addresses provided below. Further, this MOU will automatically terminate in accordance with provision VIII, Timeframe, below. DISD shall be responsible for its respective share of the SROs ongoing costs incurred as of the termination date of this MOU. VIII. Timeframe This MOU will commence on July 1 , 2020 and will dissolve on June 30, 2021, at the end of the 2020-2021 school year. Agreed to in cooperation with the City of Denton Police Department and the Denton Independent School District. AUTHORIZED SIGNATURES: /1 lanager /P - /3- 292‘ Me;itVTodd City of Denton 215 E. McKinney Denton. TX 76201 Date q-*b'2D20 Dr. J $iIndependent School DistrictDentc Date 1307 N. Locust Denton. TX 76201 ATTEST: 5 of 6 446 A Rosa Rios, City Secretary City of Denton 6 of 6 447 Attachment A Estimated FY20-21 DISD Quarterly Billing Plan Estimated Quarterly Billing Plan 2020 2021 Total Oct - Dec ReimbursementJuly - Sept April - JuneJan - Mar i 203,092 $m2 1 203,092 $609,276 Estimated reimbursement includes 50% of estimated salary and benefits for nine (9) SRO's located at DISD High Schools and Middle Schools and 100% of the estimated salary and benefits for one (1 ) Lieutenant. No reimbursement requested for first quarter due to delayed school opening in response to COVID19. 448 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-172,Version:1 AGENDA CAPTION Consider adoption of an ordinance of the City of Denton,a Texas home-rule municipal corporation,authorizing the City Manager,or his designee,to execute a Professional Services Agreement with OCMI,Inc.,to provide cost estimating review,cost estimating preparation,and estimate at completion projection services for the City of Denton’s capital infrastructure projects as set forth in the contract;providing for the expenditure of funds therefor;and providing an effective date (RFQ 7508 -Professional Services Agreement for Cost Estimating Services awarded to OCMI,Inc.,for two (2)years,with the option for one (1)additional one (1)year extension, in the total three (3) year not-to-exceed amount of $402,780.00). City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™449 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement & Compliance ACM: David Gaines DATE: February 9, 2021 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager, or his designee, to execute a Professional Services Agreement with OCMI, Inc., to provide cost estimating review, cost estimating preparation, and estimate at completion projection services for the City of Denton’s capital infrastructure projects as set forth in the contract; providing for the expenditure of funds therefor; and providing an effective date (RFQ 7508 – Professional Services Agreement for Cost Estimating Services awarded to OCMI, Inc., for two (2) years, with the option for one (1) additional one (1) year extension, in the total three (3) year not-to-exceed amount of $402,780.00). INFORMATION/BACKGROUND Accurate project cost estimates are a critical component of every public construction project to ensure infrastructure is delivered on time and on budget. Inaccurate project cost estimates can lead to costly change orders, project scope changes, and project delays. With the creation of the new Capital Project Delivery Team in the Capital Projects Department, dedicated project managers have been assigned to manage the scope, schedule, and budget of every City of Denton capital infrastructure project. The Capital Project Delivery Team has made strides in improving project estimates and is interested in augmenting these efforts with an outside firm to help refine estimating best practices, develop tools and templates for budget projections, and train staff on ways to better use market and industry data to ensure initial project estimates are as accurate as possible for the lifespan of a project. Should the City Council approve the proposed contract with OCMI, Inc., the firm will review and recommend improvements to current budget estimation tools, assist with the preparation and review of detailed construction cost estimates for current and proposed infrastructure projects, and provide independent construction cost validation services for estimates provided by design teams and/or contractors. OCMI, Inc. will also assist with the evaluation and enhancement of existing procurement and project management processes including the development of revised solicitation documents to provide high-quality infrastructure while minimizing the financial risk to Denton taxpayers. All new processes, tools, and techniques will be developed collaboratively with the City of Denton staff. Process revisions, updates to project budget estimates, and revised project delivery methods for infrastructure projects stemming from this proposed contract will be shared with the City Council during future Capital Improvement Plan Update Work Sessions. OCMI, Inc. was one of five qualified respondents to the request for qualifications (RFQ) for cost estimation services. The Evaluation Committee for this RFQ selected OCMI, Inc. because of their proven track record City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 450 doing similar work in major cities and counties nationwide including Los Angeles, CA; Las Vegas, NV; and Clark County, NV. OCMI, Inc. has excellent references and has several repeat local government clients who use their services to ensure major infrastructure projects have accurate cost projections. Contract pricing includes independent cost estimates and peer-review fees for capital projects and is based on the current estimate at completion for each project that OCMI will review. The table below outlines how the not-to-exceed amount of $402,780 was established: Total Projects Number of Projects Reviewed Cost Estimate Number of Projects Reviewed Peer Review Total $1-$10 Million Avg. 8 $5,500 8 $3,500 $72,000 $10-$30 Million Avg. 12 $16,800 7 $10,000 $ 271,600 Training and Template Development $40,000 5% Contingency $19,180 OCMI Contract Total 35 Total Projects $402,780 Request for Qualifications (RFQ) for professional cost estimating services was sent to 91 prospective firms for these services. In addition, the RFQ was placed on the Materials Management website for prospective respondents to download, and advertised in the local newspaper. Five (5) statement of qualifications (SOQ) were received. The SOQs were evaluated based on published criteria including probable performance, compliance with specifications, and schedule. Based upon this evaluation, the recommended award is to OCMI, Inc., and is determined to be the most qualified firm for the City. NIGP Code Used for Solicitation: 925-(Service Only)-Engineering Services, Professional & 961-(Service Only)-Miscellaneous Services, No. 1 (Not Otherwise Classified) Notifications sent for Solicitation sent in IonWave: 91 Number of Suppliers that viewed Solicitation in IonWave: 76 HUB-Historically Underutilized Business Invitations sent out: 11 SBE-Small Business Enterprise Invitations sent out: 21 Responses from Solicitation: 5 RECOMMENDATION Award a contract with OCMI, Inc., to provide cost estimating review, cost estimating preparation, and estimate at completion projection services for the City of Denton’s capital infrastructure projects, in a two (2) year, with the option for one (1) additional one (1) year extension, in the total three (3) year not-to- exceed amount of $402,780. PRINCIPAL PLACE OF BUSINESS OCMI, Inc. Dallas, TX ESTIMATED SCHEDULE OF PROJECT This is an initial two (2) year contract with options to extend the contract for one (1) additional one (1) year period, with all terms and conditions remaining the same. 451 FISCAL INFORMATION These services will be funded from the Capital Projects Department’s operating budget. Requisitions will be entered on an as-needed basis. The budgeted amount for this item is $402,780. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Evaluation Sheet Exhibit 3: Ordinance and Contract Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Rachel Wood, 940-349-7718. Legal point of contact: Marcella Lunn at 940-349-8333. 452 Exhibit 2RFQ 7508 - Evaluation Sheet Engineering and Capital Projects Cost Estimation ServicesOCMI, Inc.Peak Program Value, LLCHill International, Inc. PlummerChurchill Cost Consultants LLCDallas, TXBoulder, CO Irving, TX Fort Worth, TX Southlake, TXItem # Description1 Project Schedule (25%)17.50 17.50 15.00 15.00 16.25 2 Compliance with Specifications (35%)35.00 26.25 28.00 28.00 21.00 3 Probable Performance (40%)38.00 36.00 28.00 28.00 22.00 90.50 79.75 71.00 71.00 59.25 Total Score:Principal Place of Business (City and State):Respondent's Business Name:453 ORDINANCE NO. __________ AN ORDINANCE OF THE CITY OF DENTON, A TEXAS HOME-RULE MUNICIPAL CORPORATION, AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE A PROFESSIONAL SERVICES AGREEMENT WITH OCMI, INC., TO PROVIDE COST ESTIMATING REVIEW, COST ESTIMATING PREPARATION, AND ESTIMATE AT COMPLETION PROJECTION SERVICES FOR THE CITY OF DENTON CAPITAL INFRASTRUCTURE PROJECTS AS SET FORTH IN THE CONTRACT; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (RFQ 7508 PROFESSIONAL SERVICES AGREEMENT FOR COST ESTIMATING SERVICES AWARDED TO OCMI, INC., FOR TWO (2) YEARS, WITH THE OPTION FOR ONE (1) ADDITIONAL ONE (1) YEAR EXTENSION, IN THE TOTAL THREE (3) YEAR NOT-TO- EXCEED AMOUNT OF $402,780.00). WHEREAS, OCMI, Inc., t ) set forth in this ordinance, is being selected as the most highly qualified on the basis of its demonstrated competence and qualifications to perform the proposed professional services; and WHEREAS, the fees under the proposed contract are fair and reasonable and are consistent with and not higher than the recommended practices and fees published by the professional ot exceed the maximum provided by law; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Manager, or his designee, is authorized to enter into a professional service contract with OCMI, Inc., to provide cost estimating review, cost estimating preparation, and estimate at completion projection services for the City of Denton capital infrastructure projects. SECTION 2. The City Manager, or his designee, is authorized to expend funds as required by the attached contract. SECTION 3. The City Council of the City of Denton, Texas expressly delegates the authority to take any actions that may be required or permitted to be performed by the City of Denton under this ordinance to the City Manager of the City of Denton, or his designee. SECTION 4. The findings in the preamble of this ordinance are incorporated herein by reference. SECTION 5. This ordinance shall become effective immediately upon its passage and approval. 454 The motion to approve this ordinance was made by __________________________ and seconded by _________________________________, the ordinance was passed and approved by the following vote [___ - ___]: Aye Nay Abstain Absent Mayor Gerard Hudspeth: ______ ______ ______ ______ Birdia Johnson, District 1: ______ ______ ______ ______ Connie Baker, District 2: ______ ______ ______ ______ Jesse Davis, District 3: ______ ______ ______ ______ John Ryan, District 4: ______ ______ ______ ______ Deb Armintor, At Large Place 5: ______ ______ ______ ______ Paul Meltzer, At Large Place 6: ______ ______ ______ ______ PASSED AND APPROVED this the _______ day of ___________________________, 2021. __________________________________ GERARD HUDSPETH, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY BY: __________________________________ APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: _________________________________ 455 Docusign City Council Transmittal Coversheet File Name Purchasing Contact City Council Target Date Piggy Back Option Contract Expiration Ordinance 456 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 1 of 13 PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES FILE 7508 STATE OF TEXAS § COUNTY OF DENTON § ________________________, by and between the City of Denton, Texas, a Texas municipal corporation, with its principal office at 215 East McKinney Street, Denton, Denton County, OCMI, Inc., a California corporation, with its corporate office at 17222 Routh Street Suite 900, Dallas, TX 75201, hereinafter called WITNESSETH, that in consideration of the covenants and agreements herein contained, the parties hereto do mutually agree as follows: ARTICLE I CONSULTANT AS INDEPENDENT CONTRACTOR The OWNER has selected CONSULTANT on the basis of demonstrated competence and qualifications to perform the services herein described for a fair and reasonable price pursuant to Chapter 2254 of the Texas Government Code. The OWNER hereby contracts with the CONSULTANT as an independent contractor and not as an employee, and as such, the OWNER will not assert control over the day-to-day operations of the CONSULTANT. The CONSULTANT is customarily engaged to provide services as described herein independently and on a nonexclusive basis in the course of its business. This Agreement does not in any way constitute a joint venture between OWNER and CONSULTANT. The CONSULTANT hereby agrees to perform the services described herein based on the skills required for the scope of work in connection with the Project as stated in the sections to follow, with diligence and in accordance with the highest professional standards customarily obtained for such services in the State of Texas. The professional services set out herein are in connection with the following described project: The Project shall include, without limitation, to provide cost estimating review, cost estimating preparation, and estimate at completion projection services, as described in Exhibit A, which is on file at the purchasing office and incorporated herein (the ARTICLE II SCOPE OF BASIC SERVICES The CONSULTANT shall perform the following services in a professional manner: 457 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 2 of 13 A. The CONSULTANT shall perform all those services as necessary and as described in the RFQ 7508 Cost Estimating Services, which is on file at the purchasing office and made a part hereof as Exhibit A as if written word for word herein. B. To perform all those services set forth in CONSULT attached hereto and made a part hereof as Exhibit B as if written word for word herein. C. CONSULTANT shall perform all those services set forth in individual task orders, as described in Exhibit B, which shall be attached to this Agreement and made a part hereof. D. If there is any conflict between the terms of this Agreement and the exhibits attached to this Agreement, the terms and conditions of this Agreement will control over the terms and conditions of the attached exhibits or task orders. ARTICLE III ADDITIONAL SERVICES Additional services to be performed by the CONSULTANT, if authorized by the OWNER, which are not included in the above-described Basic Services, may be negotiated as needed, per rates included in Exhibit B. A. Preparing applications and supporting documents for government grants, loans, or planning advances and providing data for detailed applications. B. Preparing data and reports for assistance to OWNER in preparation for hearings before regulatory agencies, courts, arbitration panels or mediator, giving testimony, personally or by deposition, and preparations therefore before any regulatory agency, court, arbitration panel or mediator. C. Assisting OWNER in preparing for, or appearing at litigation, mediation, arbitration, dispute review boards, or other legal and/or administrative proceedings in the defense or prosecution of claims disputes with Contractor(s). D. Assisting OWNER in the defense or prosecution of litigation in connection with or in addition to those services contemplated by this AGREEMENT. Such services, if any, shall be furnished by CONSULTANT on a fee basis negotiated by the respective parties outside of and in addition to this AGREEMENT. E. Visits to the site in excess of the number of trips included in Exhibit B. F. Preparing statements for invoicing or other documentation for billing other than for the standard invoice for services attached to this professional services agreement. ARTICLE IV TIME OF COMPLETION CONSULTANT is authorized to commence work under this contract upon execution of this AGREEMENT. CONSULTANT shall perform and complete its obligations herein in a prompt 458 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 3 of 13 and continuous manner, so as to not delay the completion of the Project in accordance with the schedules as described in Exhibit B. The contract term will be two (2) years, effective from date of award. The City and the Supplier shall have the option to renew this contract for an additional one (1) one-year period. The Contract shall commence upon the issuance of a Notice of Award by the City of Denton and request to not renew the contract must be submitted in writing to the Purchasing Manager at least 60 days prior to the contract renewal date for each year. At the sole option of the City of Denton, the Contract may be further extended as needed, not to exceed a total of six (6) months. ARTICLE V COMPENSATION A. COMPENSATION TERMS: 1. urred by the CONSULTANT in employment of others in outside firms for services related to this agreement. 2. - incurred by the CONSULTANT for supplies, transportation and equipment, travel, communications, subsistence, and lodging away from home, and similar incidental expenses in connection with that assignment. B. BILLING AND PAYMENT: For and in consideration of the professional services to be performed by the CONSULTANT herein, the OWNER agrees to pay, based on the cost estimate detail at an hourly rate shown in Exhibit B which is attached hereto and made a part of this Agreement as if written word for word herein, a total fee, including reimbursement for direct non-labor expenses not to exceed $402,780. Partial payments to the CONSULTANT will be made on the basis of detailed monthly statements rendered to and approved by the OWNER through its City Manager or his designee; however, under no circumstances shall any monthly statement for services exceed the value of the work performed at the time a statement is rendered. Nothing contained in this Article shall require the OWNER to pay for any work which is unsatisfactory, as reasonably determined by the City Manager or his designee, or which is not submitted in compliance with the terms of this Agreement. The OWNER shall not be required to make any payments to the CONSULTANT when the CONSULTANT is in default under this Agreement. It is specifically understood and agreed that the CONSULTANT shall not be authorized to undertake any work pursuant to this Agreement which would require additional payments by the OWNER for any charge, expense, or reimbursement above the maximum not to exceed fee as stated, without first having obtained written authorization from the OWNER. The CONSULTANT shall not proceed to perform the services listed the OWNER. 459 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 4 of 13 C. ADDITIONAL SERVICES: For additional services authorized in writing by the OWNER in Article III, the CONSULTANT shall be paid based on the Schedule of Charges at an hourly rate shown in Exhibit B. Payments for additional services shall be due and payable upon submission by the CONSULTANT and approval by the City staff, and shall be in accordance with subsection B hereof. Statements shall not be submitted more frequently than monthly. D. PAYMENT: If the OWNER fails to make payments due the CONSULTANT for services and expenses within thirty (30) days after receipt of undisputed statement thereof, the amounts due the CONSULTANT will be paid interest in accordance with the Texas Government Code 2251.025. Additionally, the suspend services under this Agreement until the CONSULTANT has been paid in full all amounts due for services, expenses, and charges. Nothing herein shall require the OWNER to pay the late charge if the OWNER reasonably determines that the work is unsatisfactory dispute concerning the amount due, or the invoice was not mailed to the address or in the form as described in this Agreement. The OWNER will notify CONSULTANT of any disputes within twenty-one (21) days of receipt of the invoice. E. Invoices shall be sent directly to the City of Denton Accounts Payable Department, 215 E McKinney St, Denton, TX, 76201-4299. A pro-forma invoice shall be sent to the contract administrator. It is the intention of the City of Denton to make payment on completed orders within thirty days after receipt of invoice or items; whichever is later, unless unusual circumstances arise. Invoices must be fully documented as to labor, materials, and equipment provided, if applicable, and must reference the City of Denton Purchase Order Number in order to be processed. No payments shall be made on invoices not listing a Purchase Order Number. ARTICLE VI OBSERVATION AND REVIEW OF THE WORK The CONSULTANT will exercise reasonable care and due diligence in discovering and promptly reporting to the OWNER any defects or deficiencies in the work of the CONSULTANT or any subcontractors or subconsultants. ARTICLE VII OWNERSHIP OF DOCUMENTS All documents prepared or furnished subcontractors or subconsultants) pursuant to this Agreement are instruments of service, and shall become the property of the OWNER upon the termination of this Agreement. The CONSULTANT is entitled to retain copies of all such documents. The documents prepared and furnished by the CONSULTANT are intended only to be applicable to this Project, and In the event the OWNER uses any of the information or materials developed pursuant to this 460 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 5 of 13 Agreement in another project or for other purposes than specified herein, CONSULTANT is released from any and all liability relating to their use in that project. ARTICLE VIII INDEMNITY AGREEMENT THE CONSULTANT SHALL INDEMNIFY AND SAVE AND HOLD HARMLESS THE OWNER AND ITS OFFICERS, OFFICIALS, AGENTS, AND EMPLOYEES FROM AND AGAINST ANY AND ALL LIABILITY, CLAIMS, DEMANDS, DAMAGES, LOSSES, AND EXPENSES, INCLUDING, BUT NOT LIMITED TO COURT COSTS AND REASONABLE ATTORNEY FEES ASSERTED AGAINST OR INCURRED BY THE OWNER, AND INCLUDING, WITHOUT LIMITATION, DAMAGES FOR BODILY AND PERSONAL INJURY, DEATH AND PROPERTY DAMAGE, RESULTING FROM THE NEGLIGENT ACTS OR OMISSIONS OF THE CONSULTANT OR ITS OFFICERS, SHAREHOLDERS, AGENTS, OR EMPLOYEES INCIDENTAL TO, RELATED TO, AND IN THE EXECUTION, OPERATION, OR PERFORMANCE OF THIS AGREEMENT. Nothing in this Agreement shall be construed to create a liability to any person who is not a party to this Agreement, and nothi law or equity, to any claim, cause of action, or litigation filed by anyone not a party to this Agreement, including the defense of governmental immunity, which defenses are hereby expressly reserved. ARTICLE IX INSURANCE During the performance of the services under this Agreement, CONSULTANT shall maintain insurance in compliance with the requirements of Exhibit C which is attached hereto and made a part of this Agreement as if written word for word herein. ARTICLE X ALTERNATIVE DISPUTE RESOLUTION The parties may agree to settle any disputes under this Agreement by submitting the dispute to mediation with each party bearing its own costs of mediation. No mediation arising out of or relating precedent to suit. ARTICLE XI TERMINATION OF AGREEMENT A. Notwithstanding any other provision of this Agreement, either party may terminate by B. This Agreement may be terminated in whole or in part in the event of either party substantially failing to fulfill its obligations under this Agreement. No such termination 461 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 6 of 13 will be affected unless the other party is given (1) written notice (delivered by certified mail, return receipt requested) of intent to terminate and setting forth the reasons specifying the non-performance, and not less than fifteen (15) calendar days to cure the failure; and (2) an opportunity for consultation with the terminating party prior to termination. C. If the Agreement is terminated prior to completion of the services to be provided hereunder, CONSULTANT shall immediately cease all services and shall render a final bill for services to the OWNER within thirty (30) days after the date of termination. The OWNER shall pay CONSULTANT for all services properly rendered and satisfactorily performed and for reimbursable expenses to termination incurred prior to the date of subsequently contract with a new consultant for the continuation of services on the Project, CONSULTANT shall cooperate in providing information. The CONSULTANT shall turn over all documents prepared or furnished by CONSULTANT pursuant to this Agreement to the OWNER on or before the date of termination, but may maintain copies of such documents for its use. ARTICLE XII RESPONSIBILITY FOR CLAIMS AND LIABILITIES Approval by the OWNER shall not constitute, nor be deemed a release of the responsibility and liability of the CONSULTANT, its employees, associates, agents, subcontractors, and subconsultants for the accuracy and competency of their designs or other work; nor shall such approval be deemed to be an assumption of such responsibility by the OWNER for any defect in the design or other work prepared by the CONSULTANT, its employees, subcontractors, agents, and consultants. ARTICLE XIII NOTICES All notices, communications, and reports required or permitted under this Agreement shall be personally delivered or mailed to the respective parties by depositing same in the United States mail to the address shown below, certified mail, return receipt requested, unless otherwise To CONSULTANT: To OWNER: OCMI, Inc. City of Denton Purchasing Manager File 7508 1722 Routh Street Suite 900 901B Texas Street Dallas, TX 75201 Denton, Texas 76209 All notices shall be deemed effective upon receipt by the party to whom such notice is ARTICLE XIV ENTIRE AGREEMENT 462 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 7 of 13 This Agreement and related exhibits constitute the complete and final expression of this Agreement of the parties, and is intended as a complete and exclusive statement of the terms of their agreements, and supersedes all prior contemporaneous offers, promises, representations, negotiations, discussions, communications, and agreements which may have been made in connection with the subject matter hereof. ARTICLE XV SEVERABILITY If any provision of this Agreement is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of this Agreement and shall not cause the remainder to be invalid or unenforceable. In such event, the parties shall reform this Agreement to replace such stricken provision with a valid and enforceable provision which comes as close as possible to expressing the intention of the stricken provision. ARTICLE XVI COMPLIANCE WITH LAWS The CONSULTANT shall comply with all federal, state, and local laws, rules, regulations, and ordinances applicable to the work covered hereunder as those laws may now read or hereinafter be amended. ARTICLE XVII DISCRIMINATION PROHIBITED In performing the services required hereunder, the CONSULTANT shall not discriminate against any person on the basis of race, color, religion, sex, sexual orientation, national origin or ancestry, age, or physical handicap. ARTICLE XVIII PERSONNEL A. The CONSULTANT represents that it has or will secure, at its own expense, all personnel required to perform all the services required under this Agreement. Such personnel shall not be employees or officers of, or have any contractual relations with the OWNER. CONSULTANT shall inform the OWNER of any conflict of interest or potential conflict of interest that may arise during the term of this Agreement. B. All services required hereunder will be performed by the CONSULTANT or under its supervision. All personnel engaged in work shall be qualified, and shall be authorized and permitted under state and local laws to perform such services. ARTICLE XIX ASSIGNABILITY The CONSULTANT acknowledges that this Agreement is based on the demonstrated competence and specific qualifications of the CONSULTANT and is therefore personal as to the 463 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 8 of 13 CONSULTANT. Therefore, the CONSULTANT shall not assign any interest in this Agreement, and shall not transfer any interest in this Agreement (whether by assignment, novation, or otherwise) without the prior written consent of the OWNER. ARTICLE XX MODIFICATION No waiver or modification of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith, and no evidence of any waiver or modification shall be offered or received in evidence in any proceeding arising between the parties hereto out of or affecting this Agreement, or the rights or obligations of the parties hereunder, and unless such waiver or modification is in writing and duly executed; and the parties further agree that the provisions of this section will not be waived unless as set forth herein. ARTICLE XXI MISCELLANEOUS A. The following exhibits are attached to and made a part of this Agreement: Exhibit A RFQ 7508 Cost Estimating Services for the City of Denton (on file at the purchasing office) Exhibit B , Compensation, and Project Schedule Exhibit C What is called for by one exhibit shall be as binding as if called for by all. In the event of an inconsistency or conflict in this Agreement and any of the provisions of the exhibits, the inconsistency or conflict shall be resolved by giving precedence first to this Agreement then to the exhibits in the order in which they are listed above. B. This Agreement shall be governed by, construed, and enforced in accordance with, and subject to, the laws of the State of Texas or federal law, where applicable, without regard to the conflict of law principles of any jurisdiction. In the event there shall be any dispute arising out of the terms and conditions of, or in connection with, this Agreement, the party seeking relief shall submit such dispute to the District Courts of Denton County or if federal diversity or subject matter jurisdiction exists, to the United States District Court for the Eastern District of Texas-Sherman Division. C. For the purpose of this Agreement, the key persons who will perform most of the work hereunder shall be Justin Peterson. However, nothing herein shall limit CONSULTANT from using other equally qualified and competent members of its firm to perform the services required herein. D. CONSULTANT shall commence, carry on, and complete any and all projects with all applicable dispatch, in a sound, economical, and efficient manner and in accordance with the provisions hereof. In accomplishing the projects, CONSULTANT shall take such steps as are appropriate to ensure that the work involved is properly coordinated with related work being carried on by the OWNER. 464 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 9 of 13 E. The OWNER disposal all available information pertinent to the Project, including previous reports, any other data relative to the Project, and arranging for the access thereto, and make all provisions for the CONSULTANT to enter in or upon public and private property as required for the CONSULTANT to perform services under this Agreement. F. The captions of this Agreement are for informational purposes only, and shall not in any way affect the substantive terms or conditions of this Agreement. G. The parties agree to transact business electronically. Any statutory requirements that certain terms be in writing will be satisfied using electronic documents and signing. Electronic signing of this document will be deemed an original for all legal purposes. ARTICLE XXII INDEPENDENT CONTRACTOR CONSULTANT shall provide services to OWNER as an independent contractor, not as an employee of the OWNER. CONSULTANT shall not have or claim any right arising from employee status. ARTICLE XXIII RIGHT TO AUDIT The OWNER shall have the right to audit and make copies of the books, records and computations pertaining to this agreement. The CONTRACTOR shall retain such books, records, documents and other evidence pertaining to this agreement during the contract period and five years thereafter, except if an audit is in progress or audit findings are yet unresolved, in which case records shall be kept until all audit tasks are completed and resolved. These books, records, documents and other evidence shall be available, within 10 business days of written request. Further, the CONTRACTOR shall also require all Subcontractors, material suppliers, and other payees to retain all books, records, documents and other evidence pertaining to this agreement, and to allow the OWNER similar access to those documents. All books and records will be made available within a 50 mile radius of the City of Denton. The cost of the audit will be borne by the OWNER unless the audit reveals an overpayment of 1% or greater. If an overpayment of 1% or greater occurs, the reasonable cost of the audit, including any travel costs, must be borne by the CONTRACTOR which must be payable within five business days of receipt of an invoice. Failure to comply with the provisions of this section shall be a material breach of this contract the terms "books", "records", "documents" and "other evidence", as used above, shall be 465 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 10 of 13 construed to include drafts and electronic files, even if such drafts or electronic files are subsequently used to generate or prepare a final printed document. ARTICLE XXIV Prohibition On Contracts With Companies Boycotting Israel Supplier acknowledges that in accordance with Chapter 2270 of the Texas Government Code, City is prohibited from entering into a contract with a company for goods or services unless the contract contains a written verification from the company that it: (1) does not boycott Israel; and (2) will not boycott Israel during the term of the contract. Government Code. By signing this agreement, Supplier certifies that Supplier provides written verification to the City that Supplier: (1) does not boycott Israel; and (2) will not boycott Israel during the term of the agreement. Failure to meet or maintain the requirements under this provision will be considered a material breach. ARTICLE XXV Prohibition On Contracts With Companies Doing Business with Iran, Sudan, or a Foreign Terrorist Organization Section 2252 of the Texas Government Code restricts CITY from contracting with companies that do business with Iran, Sudan, or a foreign terrorist organization. By signing this agreement, Supplier certifies that Supplier Supplier, pursuant to Chapter 2252, is not ineligible to enter into this agreement and will not become ineligible to receive payments under this agreement by doing business with Iran, Sudan, or a foreign terrorist organization. Failure to meet or maintain the requirements under this provision will be considered a material breach. ARTICLE XXVI CERTIFICATE OF INTERESTED PARTIES ELECTRONIC FILING In 2015, the Texas Legislature adopted House Bill 1295, which added section 2252.908 of the Government Code. The law states that the City may not enter into this contract unless the Contractor submits a disclosure of interested parties (Form 1295) to the City at the time the Contractor submits the signed contract. The Texas Ethics Commission has adopted rules requiring the business entity to file Form 1295 electronically with the Commission. Contractor will be required to furnish a Certificate of Interest Parties before the contract is awarded, in accordance with Government Code 2252.908. The contractor shall: 1. Log onto the State Ethics Commission Website at : https://www.ethics.state.tx.us/whatsnew/elf_info_form1295.htm 2. Register utilizing the tutorial provided by the State 3. Print a copy of the completed Form 1295 4. Enter the Certificate Number on page 2 of this contract. 466 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 11 of 13 5. Complete and sign the Form 1295 6. Email the form to purchasing@cityofdenton.com with the contract number in the subject line. (EX: Contract 1234 Form 1295) The OWNER must acknowledge the receipt of the filed Form 1295 not later than the 30th day after Council award. Once a Form 1295 is acknowledged, it will be posted to the Texas Ethics within seven business days. ARTICLE XXVII PROHIBITION AGAINST PERSONAL INTEREST IN CONTRACTS No officer, employee, independent consultant, or elected official of the City who is involved in the development, evaluation, or decision-making process of the performance of any solicitation shall have a financial interest, direct or indirect, in the Contract resulting from that solicitation as -757 and in the City Charter chapter 2 article XI(Ethics). Any willful violation of this section shall constitute impropriety in office, and any officer or employee guilty thereof shall be subject to disciplinary action up to and including dismissal. Any violation of this provision, with the knowledge, expressed or implied, of the Contractor shall Conflict of Interest Questionnaire. IN WITNESS HEREOF, the City of Denton, Texas has caused this Agreement to be executed by its duly authorized City Manager, and CONSULTANT has executed this Agreement through its duly authorized undersigned officer on this date______________________. 467 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 12 of 13 CITY OF DENTON, TEXAS __________________________________ TODD HILEMAN, CITY MANAGER ATTEST: CITY SECRETARY BY: _______________________________ OCMI, Inc., A CALIFORNIA CORPORATION __________________________________ BY: ITS: _________2021-702506_________ TEXAS ETHICS COMMISSION CERTIFICATE NUMBER THIS AGREEMENT HAS BEEN BOTH REVIEWED AND APPROVED as to financial and operational obligations and business terms. _______________ ________________ SIGNATURE PRINTED NAME __________________________________ TITLE __________________________________ DEPARTMENT APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: ____________________________ 468 City of Denton, Texas Contract 7508 Standard Agreement for Engineering Related Design Services Revised Date: 9/11/18 Page 13 of 13 Exhibit A RFQ 7508 Cost Estimating Services for the City of Denton (on file in the purchasing office) 469 1 O’Connor Construction Management Estimating | Scheduling 1722 Routh Street, Suite 900 469.431.0571 t Dallas, TX 75201 ocmi.com 22 December 2020 Lori Hewell Purchasing Manager City of Denton 901-B Texas Street Denton, TX 76209 Regarding: City of Denton – Engineering & Capital Projects Cost Estimation Services Fee Proposal Ms. Hewell: OCMI, Inc. is please to transmit this proposal to provide on-call cost estimation, project controls and project management process improvement services to the City of Denton. We understand from the Request for Qualification (RFQ # 7508) that the City’s Engineering Department’s needs are multi-faceted and not yet fully defined in terms of quantity or deliverables. We are familiar with working with clients to define and achieve project success, step-by-step. Below we have outlined our proposed fee structure, fee schedule, and corresponding deliverables and approximate timetables for each. Recommended Contract Structure Based on our scope and fee proposal review call on 14 DEC 2020 with your office and Engineering Department representatives, we believe that an Indefinite Delivery, Indefinite Quantity (IDIQ) task order contract would be the most pragmatic approach. Under this arrangement, the City would issue orders against the IDIQ as needed for individual tasks. This will allow the City to determine what projects should be reviewed, to what extent, and in what order. Similarly, currently undefined needs for cost estimating, review, and management templates can be further refined before OCMI proposes a fee. This will ensure your scope and our cost proposal are well aligned with each individual task order. Our fee proposals would be structured as lump sum costs by deliverable or phase. Project Types and Deliverables Per Laura Hermosillo’s emails dated 14 and 15 DEC 2020, we understand that the projects to be estimated and/or reviewed can generally be categorized into three approximate categories: - Small Projects: < $1 million Project Value - Medium Projects: $1-$10 million Project Value - Large Projects: $10-35 million Project Value We also understand that two approaches to project cost analysis are being considered: Independent Cost Estimates (ICE) and Peer Reviews (PR). For the sake of aligned understanding, we have briefly defined the requirements of each deliverable below. 470 2OCMI, Inc. Independent Cost Estimates: OCMI will receive relevant design and construction drawings, along with any applicable specifications not provided by standard. Using these documents, we will independently develop a cost estimate reflective of the full scope, bidding conditions and, depending on requirements, the associated project costs aside from construction. This will be developed in format(s) congruent to the City’s current Estimate at Completion (EAC) and “00 42 43 Proposal Form Unit Price,” until such time as those templates are replaced or modified. Peer Reviews: OCMI will receive City-generated cost estimates for construction costs, project costs, or both, along with relevant design and construction documents. Using this information, we will thoroughly review the City’s estimate and provide comments on the detailed unit costs and, where appropriate, quantities. Any potential ambiguities in the construction drawings that present a clear biddability issue will be documented in our report to the City. Approximate Fee and Timetables Based on the above outlined project categories and deliverable types, we have outlined the approximate cost for each, along with the timetable for completion. Please note that these numbers are approximate and under the proposed contract, we would provide a fee proposal for each task order based on its specific attributes, such as level of detail of drawings; number of drawings; product specifications requiring vendor related communications; and line-item counts. Reconciliations with Contractors and/or other estimating parties are not included in the above range lump sums and would be billed at $1,000 per full reconciliation day. Review discussions and one (1) minor revision per deliverable are included. “Business Days” do not include holidays. Other Deliverables & Schedule of Rates In addition to the ICE and PR deliverables, we understand that process-improvement services in the form of revised templates, evaluations, and trainings are part of the deliverables of this contract. Again, the task order IDIQ arrangement will allow us to develop specific fees that align with the deliverables that are ultimately required. Additional efforts that require on-going or undefined deliverables will be billed on a time and materials basis in accordance with our attached rate sheet. Deliverable < $1M Average $1-10M Average $10-30M Average Independent Cost Estimate 1,300.00$ 5,500.00$ 16,800.00$ ICE Timetable 5-8 Business Days 10-12 Business Day 13-18 Business Days Peer Review 1,000.00$ 3,500.00$ 10,000.00$ PR Timetable 4-7 Business Days 5-8 Business Days 8-10 Business Days 471 3OCMI, Inc. We appreciate the opportunity to submit our fee proposal to the City of Denton and sincerely look forward to working with your teams to help you realize project potential and maximize value for the citizens of Denton. Respectfully, Justin Peterson President OCMI, Inc. jpeterson@ocmi.com 472 473 Exhibit C CITY OF DENTON INSURANCE REQUIREMENTS FOR CONTRACTORS Bidder's attention is directed to the insurance requirements below. It is highly recommended that bidders confer with their respective insurance carriers or brokers to determine in advance of Bid submission the availability of insurance certificates and endorsements as prescribed and provided herein. If an apparent low bidder fails to comply strictly with the insurance requirements, that bidder may be disqualified from award of the contract. Upon bid award, all insurance requirements shall become contractual obligations, which the successful bidder shall have a duty to maintain throughout the course of this contract. STANDARD PROVISIONS: Without limiting any of the other obligations or liabilities of the Contractor, the Contractor shall provide and maintain until the contracted work has been completed and accepted by the City of Denton, Owner, the minimum insurance coverage as indicated hereinafter. As soon as practicable after notification of bid award, Contractor shall file with the Purchasing Department satisfactory certificates of insurance, containing the bid number and title of the project. Contractor may, upon written request to the Purchasing Department, ask for clarification of any insurance requirements at any time; however, Contractors are strongly advised to make such requests prior to bid opening, since the insurance requirements may not be modified or waived after bid opening unless a written exception has been submitted with the bid. Contractor shall not commence any work or deliver any material until he or she receives notification that the contract has been accepted, approved, and signed by the City of Denton. All insurance policies proposed or obtained in satisfaction of these requirements shall comply with the following general specifications, and shall be maintained in compliance with these general specifications throughout the duration of the Contract, or longer, if so noted: Each policy shall be issued by a company authorized to do business in the State of Texas with an A.M. Best Company rating of at least A- VII or better. Any deductibles or self-insured retentions shall be declared in the bid proposal. If requested by the City, the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its officials, agents, employees and volunteers; or, the contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Liability policies shall be endorsed to provide the following: 474 Name as additional insured the City of Denton, its Officials, Agents, Employees and volunteers. That such insurance is primary to any other insurance available to the additional insured with respect to claims covered under the policy and that this insurance applies separately to each insured against whom claim is made or suit is brought. The inclusion of more than one insured shall not operate to increase the insurer's limit of liability. Provide a Waiver of Subrogation in favor of the City of Denton, its officials, agents, employees, and volunteers. Cancellation: City requires 30 day written notice should any of the policies described on the certificate be cancelled before the expiration date. Should any of the required insurance be provided under a claims-made form, Contractor shall maintain such coverage continuously throughout the term of this contract and, without lapse, for a period of three years beyond the contract expiration, such that occurrences arising during the contract term which give rise to claims made after expiration of the contract shall be covered. Should any of the required insurance be provided under a form of coverage that includes a general annual aggregate limit providing for claims investigation or legal defense costs to be included in the general annual aggregate limit, the Contractor shall either double the occurrence limits or obtain Owners and Contractors Protective Liability Insurance. Should any required insurance lapse during the contract term, requests for payments originating after such lapse shall not be processed until the City receives satisfactory evidence of reinstated coverage as required by this contract, effective as of the lapse date. If insurance is not reinstated, City may, at its sole option, terminate this agreement effective on the date of the lapse. SPECIFIC ADDITIONAL INSURANCE REQUIREMENTS: All insurance policies proposed or obtained in satisfaction of this Contract shall additionally comply with the following marked specifications, and shall be maintained in compliance with these additional specifications throughout the duration of the Contract, or longer, if so noted: [X ] A. General Liability Insurance: General Liability insurance with combined single limits of not less than $1,000,000.00 shall be provided and maintained by the Contractor. The policy shall be written on an occurrence basis either in a single policy or in a combination of underlying and umbrella or excess policies. 475 If the Commercial General Liability form (ISO Form CG 0001 current edition) is used: Coverage A shall include premises, operations, products, and completed operations, independent contractors, contractual liability covering this contract and broad form property damage coverage. Coverage B shall include personal injury. Coverage C, medical payments, is not required. If the Comprehensive General Liability form (ISO Form GL 0002 Current Edition and ISO Form GL 0404) is used, it shall include at least: Bodily injury and Property Damage Liability for premises, operations, products and completed operations, independent contractors and property damage resulting from explosion, collapse or underground (XCU) exposures. Broad form contractual liability (preferably by endorsement) covering this contract, personal injury liability and broad form property damage liability. [X] Automobile Liability Insurance: Contractor shall provide Commercial Automobile Liability insurance with Combined Single Limits (CSL) of not less than $500,000.00 either in a single policy or in a combination of basic and umbrella or excess policies. The policy will include bodily injury and property damage liability arising out of the operation, maintenance and use of all automobiles and mobile equipment used in conjunction with this contract. Satisfaction of the above requirement shall be in the form of a policy endorsement for: any auto, or all owned, hired and non-owned autos. [X] Compensation Insurance Contractor shall purchase and maintain Worker's Compensation insurance which, in addition to meeting the minimum statutory requirements for issuance of such insurance, has Employer's Liability limits of at least $100,000 for each accident, $100,000 per each employee, and a $500,000 policy limit for occupational disease. The City need not be named as an "Additional Insured" but the insurer shall agree to waive all rights of subrogation against the City, its officials, agents, employees and volunteers for any work performed for the City by the Named Insured. For building or construction projects, the Contractor shall comply with the provisions of Attachment 1 in accordance with §406.096 476 of the Texas Labor Code and rule 28TAC 110.110 of the Texas Worker's Compensation Commission (TWCC). [ ] Owner's and Contractor's Protective Liability Insurance The Contractor shall obtain, pay for and maintain at all times during the prosecution of the work under this contract, an Owner's and Contractor's Protective Liability insurance policy naming the City as insured for property damage and bodily injury which may arise in the prosecution of the work or Contractor's operations under this contract. Coverage shall be on an "occurrence" basis, and the policy shall be issued by the same insurance company that carries the Contractor's liability insurance. Policy limits will be at least combined bodily injury and property damage per occurrence with a aggregate. [X] Professional Liability Insurance Professional liability insurance with limits not less than $1,000,000 per claim with respect to negligent acts, errors or omissions in connection with professional services is required under this Agreement. [ ] Builders' Risk Insurance Builders' Risk Insurance, on an All-Risk form for 100% of the completed value shall be provided. Such policy shall include as "Named Insured" the City of Denton and all subcontractors as their interests may appear. [ ] Commercial Crime Provides coverage for the theft or disappearance of cash or checks, robbery inside/outside the premises, burglary of the premises, and employee fidelity. The employee fidelity including new hires. This type insurance should be required if the contractor has access to City funds. Limits of not less than each occurrence are required. [ ] Additional Insurance Other insurance may be required on an individual basis for extra hazardous contracts and specific service agreements. If such additional insurance is required for a specific contract, that requirement will be described in the "Specific Conditions" of the contract specifications. 477 ATTACHMENT 1 [ ] onstruction Projects for Governmental Entities A. Definitions: Certificate of coverage ("certificate")-A copy of a certificate of insurance, a certificate of authority to self-insure issued by the commission, or a coverage agreement (TWCC- 81, TWCC-82, TWCC-83, or TWCC-84), showing statutory workers' compensation insurance coverage for the person's or entity's employees providing services on a project, for the duration of the project. Duration of the project - includes the time from the beginning of the work on the project until the contractor's/person's work on the project has been completed and accepted by the governmental entity. Persons providing services on the project ("subcontractor" in §406.096) - includes all persons or entities performing all or part of the services the contractor has undertaken to perform on the project, regardless of whether that person contracted directly with the contractor and regardless of whether that person has employees. This includes, without limitation, independent contractors, subcontractors, leasing companies, motor carriers, owner-operators, employees of any such entity, or employees of any entity which furnishes persons to provide services on the project. "Services" include, without limitation, providing, hauling, or delivering equipment or materials, or providing labor, transportation, or other service related to a project. "Services" does not include activities unrelated to the project, such as food/beverage vendors, office supply deliveries, and delivery of portable toilets. B. The contractor shall provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any overage agreements, which meets the statutory requirements of Texas Labor Code, Section 401.011(44) for all employees of the Contractor providing services on the project, for the duration of the project. C. The Contractor must provide a certificate of coverage to the governmental entity prior to being awarded the contract. D. If the coverage period shown on the contractor's current certificate of coverage ends during the duration of the project, the contractor must, prior to the end of the coverage period, file a new certificate of coverage with the governmental entity showing that coverage has been extended. E. The contractor shall obtain from each person providing services on a project, and provide to the governmental entity: 478 1) a certificate of coverage, prior to that person beginning work on the project, so the governmental entity will have on file certificates of coverage showing coverage for all persons providing services on the project; and 2) no later than seven days after receipt by the contractor, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project. F. The contractor shall retain all required certificates of coverage for the duration of the project and for one year thereafter. G. The contractor shall notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the contractor knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project. H. The contractor shall post on each project site a notice, in the text, form and manner prescribed by the Texas Workers' Compensation Commission, informing all persons providing services on the project that they are required to be covered, and stating how a person may verify coverage and report lack of coverage. I. The contractor shall contractually require each person with whom it contracts to provide services on a project, to: 1) provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any coverage agreements, which meets the statutory requirements of Texas Labor Code, Section 401.011(44) for all of its employees providing services on the project, for the duration of the project; 2) provide to the contractor, prior to that person beginning work on the project, a certificate of coverage showing that coverage is being provided for all employees of the person providing services on the project, for the duration of the project; 3) provide the contractor, prior to the end of the coverage period, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project; 4) obtain from each other person with whom it contracts, and provide to the contractor: a) certificate of coverage, prior to the other person beginning work on the project; and b) a new certificate of coverage showing extension of coverage, prior to the end of the coverage period, if the coverage period shown on the current certificate of coverage ends during the duration of the project; 479 5) retain all required certificates of coverage on file for the duration of the project and for one year thereafter; 6) notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the person knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project; and 7) Contractually require each person with whom it contracts, to perform as required by paragraphs (1) - (7), with the certificates of coverage to be provided to the person for whom they are providing services. J. By signing this contract or providing or causing to be provided a certificate of coverage, the contractor is representing to the governmental entity that all employees of the contractor who will provide services on the project will be covered by workers' compensation coverage for the duration of the project, that the coverage will be based on proper reporting of classification codes and payroll amounts, and that all coverage agreements will be filed with the appropriate insurance carrier or, in the case of a self- insured, with the commission's Division of Self-Insurance Regulation. Providing false or misleading information may subject the contractor to administrative penalties, criminal penalties, civil penalties, or other civil actions. K. ions is a breach of contract by the contractor which entitles the governmental entity to declare the contract void if the contractor does not remedy the breach within ten days after receipt of notice of breach from the governmental entity. 480 Exhibit CONFLICT OF INTEREST QUESTIONNAIRE - FORM CIQ For vendor or other person doing business with local governmental entity This questionnaire reflects changes made to the law by H.B. 23, 84th Leg., Regular Session. This questionnaire is being filed in accordance with Chapter 176, Local Government Code, by a vendor who has a business relationship as defined by Section 176.001(1-a) with a local governmental entity and the vendor meets requirements under Section 176.006(a). By law this questionnaire must be filed with the records administrator of the local government entity not later than the 7th business day after the date the vendor becomes aware of facts that require the statement to be filed. See Section 176.006(a-1), Local Government Code. A vendor commits an offense if the vendor knowingly violates Section 176.006, Local Government Code. An offense under this s ection is a misdemeanor. 1 Name of vendor who has a business relationship with local governmental entity. 2 Check this box if you are filing an update to a previously filed questionnaire. (The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7th business day after the date on which you became aware that the originally filed questionnaire was incomplete or inaccurate.) 3 Name of local government officer about whom the information in this section is being disclosed. Name of Officer This section, (item 3 including subparts A, B, C & D), must be completed for each officer with whom the vendor has an employment or other business relationship as defined by Section 176.001(1-a), Local Government Code. Attach additional pages to this Form CIQ as necessary. A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the vendor? Yes No B. Is the vendor receiving or likely to receive taxable income, other than investment income, from or at the direction of the local government officer named in this section AND the taxable income is not received from the local governmental entity? Yes No C. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer serves as an officer or director, or holds an ownership of one percent or more? Yes No D. Describe each employment or business and family relationship with the local government officer named in this section. 4 I have no Conflict of Interest to disclose. 5 Signature of vendor doing business with the governmental entity Date 481 Certificate Of Completion Envelope Id: A1ED8EE29CBC4ED385422F48DF0AF3FF Status: Sent Subject: Please DocuSign: City Council Contract 7508 Cost Estimating Services Source Envelope: Document Pages: 26 Signatures: 4 Envelope Originator: Certificate Pages: 6 Initials: 1 Lori Hewell AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-06:00) Central Time (US & Canada) 901B Texas Street Denton, TX 76209 lori.hewell@cityofdenton.com IP Address: 198.49.140.104 Record Tracking Status: Original 1/13/2021 3:11:49 PM Holder: Lori Hewell lori.hewell@cityofdenton.com Location: DocuSign Signer Events Signature Timestamp Lori Hewell lori.hewell@cityofdenton.com Purchasing Manager City of Denton Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 198.49.140.104 Sent: 1/15/2021 4:18:13 PM Viewed: 1/15/2021 4:19:43 PM Signed: 1/15/2021 4:21:42 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Marcella Lunn marcella.lunn@cityofdenton.com Deputy City Attorney City of Denton Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 198.49.140.104 Sent: 1/15/2021 4:21:44 PM Viewed: 1/15/2021 5:03:05 PM Signed: 1/15/2021 5:05:49 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Ciaran O'Connor ciaran@ocmi.com Owner Security Level: Email, Account Authentication (None)Signature Adoption: Drawn on Device Using IP Address: 174.195.208.160 Signed using mobile Sent: 1/15/2021 5:05:53 PM Viewed: 1/15/2021 5:14:32 PM Signed: 1/15/2021 5:16:39 PM Electronic Record and Signature Disclosure: Accepted: 1/15/2021 5:14:32 PM ID: b956613e-f705-4fbf-9e94-d7a56abc4ab4 Rebecca Diviney Rebecca.Diviney@cityofdenton.com Director of Capital Projects/City Engineer Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 47.222.28.222 Sent: 1/15/2021 5:16:42 PM Viewed: 1/18/2021 7:20:58 AM Signed: 1/18/2021 7:21:23 AM Electronic Record and Signature Disclosure: Accepted: 1/18/2021 7:20:58 AM ID: db5fda12-ac15-4ba1-b4e7-279e6f7b3676 482 Signer Events Signature Timestamp Cheyenne Defee cheyenne.defee@cityofdenton.com Contract Administrator City of Denton Security Level: Email, Account Authentication (None) Sent: 1/18/2021 7:21:27 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Todd Hileman Todd.Hileman@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Accepted: 7/25/2017 11:02:14 AM ID: 57619fbf-2aec-4b1f-805d-6bd7d9966f21 Rosa Rios rosa.rios@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Cheyenne Defee cheyenne.defee@cityofdenton.com Contract Administrator City of Denton Security Level: Email, Account Authentication (None) Sent: 1/15/2021 4:21:44 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Sherri Thurman sherri.thurman@cityofdenton.com City of Denton Security Level: Email, Account Authentication (None) Sent: 1/18/2021 7:21:26 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Gretna Jones gretna.jones@cityofdenton.com Legal Secretary City of Denton Security Level: Email, Account Authentication (None) Sent: 1/18/2021 7:21:26 AM Viewed: 1/19/2021 7:56:25 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign 483 Carbon Copy Events Status Timestamp Zolaina Parker Zolaina.Parker@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 1/15/2021 4:18:13 PM Payment Events Status Timestamps Electronic Record and Signature Disclosure 484 485 486 487 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-173,Version:1 AGENDA CAPTION Consider adoption of an ordinance of the City of Denton,a Texas home-rule municipal corporation,authorizing the City Manager,or his designee,to execute a contract with Procore Technologies,Inc.through the North Central Texas Council of Governments (NCTCOG),contract #2020-064 and ratify a contract executed by Purchasing Agent with Calance Software PVT.Ltd.which is the sole provider of these commodities and services,in accordance with Texas Local Government Code 252.022,which provides that procurement of commodities and services that are available from one source are exempt from competitive bidding,for the purchase and implementation of project management software for the Engineering Department;providing for the expenditure of funds therefor;and providing an effective date (File 7533 -awarded to Procore Technologies, Inc., in the two (2) year not-to-exceed amount of $363,078.00). City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™488 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement & Compliance ACM: David Gaines DATE: February 9, 2021 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager, or his designee, to execute a contract with Procore Technologies, Inc. through the North Central Texas Council of Governments (NCTCOG), contract #2020-064 and ratify a contract executed by Purchasing Agent with Calance Software PVT. Ltd. which is the sole provider of these commodities and services, in accordance with Texas Local Government Code 252.022, which provides that procurement of commodities and services that are available from one source are exempt from competitive bidding, for the purchase and implementation of project management software for the Engineering Department; providing for the expenditure of funds therefor; and providing an effective date (File 7533 – awarded to Procore Technologies, Inc., in the two (2) year not-to-exceed amount of $363,078.00). INFORMATION/BACKGROUND The City of Denton is currently in the process of restructuring its capital project delivery procedures in an effort to effectively carry out the unprecedented volume of capital infrastructure projects on time and on budget in a consistent and predictable manner. To identify the best way to restructure capital project delivery, the City entered into a professional services agreement with Plante Moran in spring 2020 to conduct a comprehensive assessment of Capital Projects’ operational and resource needs. Plante Moran’s assessment was completed in August 2020 and included a recommendation to implement a consistent project management methodology and invest in project management software (Plante Moran's study is included as Exhibit 2). To implement a consistent project management methodology, all Utilities and Capital Projects project managers attended Project Management Training, based on industry best practices and the principles of the Project Management Body of Knowledge. All project managers are expected to obtain Project Management Professional certification within 18-months of attending the training. Additionally, the City staff is coordinating with Freese & Nichols, Inc. to update the City’s Project Management Manual, which will establish the standard methodology for the delivery of all capital projects in the City of Denton. The manual will be finalized in the second quarter of the calendar year 2021, all project managers will receive specific training and have elements of the manual incorporated into their individual performance reviews. The project management software will help City departments and project managers to consistently monitor the scope, schedule, and budget of all City infrastructure projects. Initially, Utilities and Capital Projects will implement the software, with a long-term goal to have the Procore solution serve as the standard project management software for all City of Denton construction projects. With the Procore solution, all project data will be stored and accessible from a central location rather than being stored and updated in different City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 489 locations. The system will also assist with scheduling, cost control, and budget management, improve internal communication, improve contractor invoice review, and help with general project administration. This contract pricing is provided through the North Central Texas Council of Governments (NCTCOG), Contract #2020-064, and negotiated with the service provider, Procore Technologies, Inc. Pricing obtained through the North Central Texas Council of Governments (NCTCOG) has been competitively bid and meets the statutory requirements of Texas Local Government Code 271.102. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On July 17, 2018, Council approved the interlocal agreement with the North Central Texas Council of Governments (NCTCOG) (Ordinance 18-1074). RECOMMENDATION Award a contract with Procore Technologies, Inc., for the purchase and implementation of project management software, in a two (2) year not-to-exceed amount of $363,078. PRINCIPAL PLACE OF BUSINESS Procore Technologies, Inc. Carpinteria, CA ESTIMATED SCHEDULE OF PROJECT This is a two (2) year contract. FISCAL INFORMATION These services will be funded from General Government Capital Project Funds. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Plante Moran Study Exhibit 3: Ordinance and Contract Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Rachel Wood, 940-349-7718. Legal point of contact: Marcella Lunn at 940-349-8333. 490 Make the mark. City of Denton, TX Capital Projects Process Report, September 2020 491 City of Denton Capital Projects Process Improvement 2 | Page Table of Contents Introduction ......................................................................................................................................................................... 3 Executive Summary ............................................................................................................................................. 3 Project Objectives................................................................................................................................................. 3 Project Scope and Approach .............................................................................................................................. 3 Summary of Findings ......................................................................................................................................................... 6 Client Departments ............................................................................................................................................. 6 Findings from Capital Department Staff ........................................................................................................ 6 Process Waste Summary .................................................................................................................................... 7 Key Recommendations .......................................................................................................................................8 Project Observations and Opportunities ................................................................................................................... 11 1. Project Initiation ................................................................................................................................................ 12 2. Planning ............................................................................................................................................................... 13 3. Design ................................................................................................................................................................... 15 4. Bid/ Advertise/ Award ....................................................................................................................................... 16 5. Construction ........................................................................................................................................................ 16 6. Closeout ................................................................................................................................................................ 18 Organizational Findings ................................................................................................................................................. 19 1. Role Definition .................................................................................................................................................... 19 2. Span of Control ................................................................................................................................................... 20 3. Organization Model ........................................................................................................................................... 21 4. Organizational Reinforcements ...................................................................................................................... 22 Principles of Redesign ...................................................................................................................................... 22 Appendix A: Current technology environment index (draft) ................................................................................. 24 Appendix B: Action Plan ................................................................................................................................................ 25 492 City of Denton Capital Projects Process Improvement 3 | Page Introduction Executive Summary The City of Denton’s Capital Projects department has undergone significant change in the recent past and asked Plante Moran to review operations and identify recommendations to enhance services. After our review and analysis, we recommend the following: • Create and follow a project management methodology that is consistent with the approach, tools, and templates that the Project Management Institute advise. Train project managers and stakeholders in this methodology. • Clarify responsibilities within the organization around project roles and responsibilities. Improve oversight by project managers and client departments and establish discipline to ensure projects advance only when criteria have been met. • Organize the department around the project management methodology and staff according to demand for services. Discrete recommendations relate to various phases of project management or organizational design and are included in the action plan in Appendix B. Project Objectives As the seat of the third-fastest growing county in the country, the City of Denton (“City”) is tasked with expanding roads, water, and wastewater access to developments across the City. The City sees this and is transforming their operations to become a more nimble and efficient organization. In the last few years, the Capital Projects department has a new leadership team that has kick-started project activities worth millions of dollars. As these projects have started, leadership recognized the benefit of a broader understanding of the current end-to-end process and for developing a plan for how to make the process more efficient. In addition, leadership sought the unbiased perspective of experienced consultants to advise the City on organizational structure and sufficiency of staffing. As the City has a bias for action, they requested immediate help to develop and implement a structured, prioritized process improvement plan. This plan is included in the appendix of this report. Project Scope and Approach The project was conducted using a participative and inclusive approach with significant input from City & Capital Projects Department leadership, Capital Projects Department staff, as well as client departments participating in the capital improvement process. The aforementioned groups were engaged to ensure accuracy, completeness, and ownership of the resulting recommendations. To garner a holistic understanding of the process and develop applicable and appropriate recommendations, Plante Moran followed the ensuing steps: 1. Documentation Review. Plante Moran reviewed existing documentation provided by process owners and operational leaders at the City. These documents included Department budget, capital 493 City of Denton Capital Projects Process Improvement 4 | Page improvement plan/ project list, organizational chart, and position allocation list, position descriptions, existing process documentation and standard operating procedures, previous analyses of the department, including internal audit reports, key performance indicators and other workload and quality measures. 2. Stakeholder Interviews. Plante Moran conducted interviews with City Leadership, Capital Projects Division Leadership, Capital Projects staff, and members of customer departments. The interviews were conducted to accomplish the following: • Identify current issues and opportunities within the capital projects process • Discuss the typical approach to project management • Discuss strengths of the current process • Solicit feedback regarding governance and existing policies • Discuss the departments’ perceptions as to how the current process can improve 3. Recommendations. Finally, Plante Moran summarized observations and opportunities within a presentation for the Steering Committee. After multiple validation sessions, Plante Moran drafted this report which, in addition to the observations and opportunities, includes the priority and effort required to make the suggested improvements. Throughout the project, Plante Moran met with the Steering Committee on a regular basis to provide status updates and allow members to share any concerns. This group of leaders included the following individuals:  Todd Estes  Christine Taylor  Rachel Wood  Rebecca Diviney  Ethan Cox* It is important to note that midway through the project, an additional steering committee member (*) was added. On July 15th, after the City reorganized several departments, the new General Manager of Public Works joined the Steering Committee. The goal of this project was to encourage the City to take advantage of best practices in order to significantly improve the efficiency and effectiveness of the City’s capital projects processes. Some improvements may be possible through better utilization of project management solutions. Technology should support a process, not make up for where the process lacks. Therefore, Plante Moran’s primary recommendations will focus on first fixing and optimizing the process, the tools presently available and the training of process owners and stakeholders. Below are high-level descriptions of three categories that Plante Moran uses to group our recommendations. 494 City of Denton Capital Projects Process Improvement 5 | Page  People – Any recommendations associated with communication, training, and responsibilities are people related. This may include better communicating policies, clarifying roles/ responsibilities, developing standards, and managing expectations.  Process – These include recommendations associated with the activities, procedures, and decisions that support business processes. This may include improving handoffs between individuals or departments, minimizing frequency of errors, and aligning process with policy (or vice versa). Process related recommendations focus on increasing efficiency and eliminating waste.  Technology – Any recommendations associated with the system(s) utilized at the City are technology related. This includes minimizing the number of technologies used so that processes can be streamlined and configuring existing tools to better support the City’s processes. It is important to note that these three categories are not mutually exclusive, as a change in one may necessitate a change in another. As an example, a change in process steps may require that the technology that supports that process is modified to support the improvement. We also present discrete observations and opportunities that correspond to the six project management phases in the findings below. 495 City of Denton Capital Projects Process Improvement 6 | Page Summary of Findings Client Departments Plante Moran interviewed several departments who authorize projects that are then managed by Capital Projects team. The team referred to these departments as “client departments” and they included Parks and Recreation, Facilities Management, Traffic Engineering, Water and Wastewater. High level findings were similar among the those interviewed and included the following:  The criteria that participants use to gauge effective project management include responsiveness, expertise, consistency, accessibility, and courtesy.  Participants indicated that there is sometimes an inconsistent application of policies and procedures. Multiple participants mentioned that the answer they receive to a question regarding the process or policy depends on a variety of factors: whom they speak with, when they ask the question, how many times they ask a question, etc.  Participants do not believe they have sufficient support and associated accountability regarding various processes. They would like to have greater accessibility to project status reports.  Participants reported a lack of documented procedures and guidelines. They noted that they often do not know what to expect and as a result, they become proactive in reaching out to project managers for impromptu requests for service. They did not consider the work interruption that this causes.  Client departments each shared that improvements have been made in communication and transparency in the recent past, but they felt these were still lacking. Findings from Capital Department Staff Plante Moran interviewed several department staff. The focus was on the following divisions of the department: capital improvements, design, real estate, development review, and public works inspection. High level findings based on discussions with staff are as follows:  Workload has increased significantly in the recent past for all work units. Staff were universally concerned that quality has suffered due to this increase.  The department has undergone several leadership and organizational changes. Staff indicated that the lack of consistency has also caused their work to suffer, although they were generally optimistic about the current direction of the department.  Most of those interviewed had a tenure of less than two years. The level of turnover is high and unsustainable given the complexity of work.  Project managers have not been trained in a uniform approach to project management.  The staff who Plante Moran interviewed exhibited skill sets that corresponded with their responsibilities and work duties.  The City has limited awareness of data in general and lack availability of tactical data that inform their business processes. Key performance indicators can be used to determine workload, challenges, and prioritize tasks. This information was not readily available to Plante Moran in 496 City of Denton Capital Projects Process Improvement 7 | Page aggregated form, although individuals were able to address key metrics associated with particular projects.  The City has a dedicated, courteous workforce with high focus on their work as assigned. Plante Moran is confident that any changes that the department makes will be implemented provided that it is clearly communicated and that the City takes necessary steps to assist staff with managing the change. Process Waste Summary At a high level, the processes that Plante Moran reviewed have similar challenges that are caused in large part due to the way in which the City organizes and executes its processes. Plante Moran observed a moderate degree of waste in the City’s processes. In aggregate, it is less than often encountered but it is still prevalent. The level of waste that observed can be categorized within the seven forms of waste that are identified in Lean/ Six Sigma methodology below. Rating Prevalence  In aggregate, a common form of waste at the City’s capital projects processes  A form of waste that is found in many of the City’s capital projects processes  In aggregate, uncommon form of waste at the City’s capital projects processes Type of Waste Definition Examples Prevalence Transport Unnecessary movement of Work in Process Movement of files to different locations, transport from one functional area to another  Inventory Holding material/ information longer than required Same document stored multiple places, unnecessary document retention, work in process awaiting approval  Motion Wasted movement of people Tracking down information, monitoring status, scheduling inspections  Waiting Employees and customers waiting Departments or vendors waiting for approvals or information  Over-production Processing too soon or too much Information sent when not required, unnecessary notifications  Over-processing Overly complex or redundant processing, adding value when it’s not required Excessive approvals, duplicate data entry, manual coordination, producing unnecessary reports  497 City of Denton Capital Projects Process Improvement 8 | Page Type of Waste Definition Examples Prevalence Defects Errors, mistakes, rework Incorrect data entry, projects missing milestones  Typically, Plante Moran will use data to determine the extent to which waste is present in a process in order to advance the Lean concepts of process flow and process pull. Due in part to the City’s challenges with standardized processes, it is difficult to gather tactical data that can be used to make this diagnosis and the generation of the data would likely outweigh the benefits to the City of seeing the data. Instead, the rating of prevalence is based on qualitative information relative to the experience of other Plante Moran clients. Key Recommendations Plante Moran identified many opportunities for improvement related to individual processes. In addition, the City should consider the following recommendations that do not pertain to individual processes but rather are associated with common themes that were observed throughout the engagement. Project-specific observations and recommendations are presented later in this report. People Recommendations  Standardize work expectations and invest heavily in training. The department has a standardized approach to work, but it has not been implemented or enforced. The City should improve these standards to further its consistency with the Project Management Institute. Once adopted, the City should train both project management staff and client departments in the new approach. While standards had been developed in the recent past, they were not implemented or enforced.  Use project initiation to estimate staffing resource requirements. When a project is authorized, it should include staffing needs for Capital Projects that in aggregate should mirror the department’s operating budget. If the staffing needs and operating budget do not match, the department should request staffing modifications either through the annual City budget process or as a special consideration. Based on an average demand of ten hours per week per project, Project Managers should be managing between four and seven projects.  Restructure department reporting lines. The department underwent a reorganization midway through the assessment. Plante Moran believes additional modification will further streamline operations by grouping certain functional areas together. See recommendations in the Organizational Findings section.  Institute a change management strategy. Many of the recommendations in this report will impact not only the employees in the capital projects but also the employees in client departments. A change management strategy and accompanying communications plan will help ensure that improvements are implemented in a non-threatening manner, thereby increasing likelihood of success.  Document operational procedures. The department lacks clear guidelines to direct staff in a variety of areas. For example, project standards around timeliness and responsiveness do not exist. The department has initiated an effort to document these standards as well as to document operational procedures. We encourage that this continue. 498 City of Denton Capital Projects Process Improvement 9 | Page Process Recommendations  Consolidate the City’s capital plans into a single Capital Improvement Plan (CIP). Align the CIP with the City’s master plan and the annual operation budget. This will improve the organization’s insight into all major projects and allow clarity into how future projects can be combined or staged for improved efficiency. Modifications to the CIP that require Council consideration can be grouped in a coordinated fashion.  Clarify process roles and hold departments accountable. Project standards such as project charters and interdepartmental service level agreements can assist with this accountability structure.  Make decisions at the right level within the organization. In some processes, there were bottlenecks in which decisions were funneled to a single point of authority thereby causing delays. In many cases, the decision authority can be delegated by establishing parameters for which additional authorization is required.  Institute customer feedback mechanisms. Feedback loops are a best practice way to monitor process effectiveness. To efficiently deploy this best practice with most centralized processes, the City should develop and deploy an electronic survey of services. The survey should request feedback on responsiveness, timeliness, issue resolution, and overall quality. In addition, as part of project closeout activities, the City should institute a project review and debrief to share lessons learned – especially in high priority and complex projects.  Get smarter about tactical, workload and cost data. Each process should have information related to requests, project realization, backlog, etc. so that supervisors can target improvements. Currently, it is challenging to get this information as this information can reside in various places.  Develop standards to manage expectations. Develop feed-forward mechanisms so that project participants (client department, Capital Projects, Real Estate, Procurement, Legal, etc.) understand when they can expect work of them. Standards have not been developed or communicated and one of the key insights that was shared during the interviews with client departments groups is that department representatives have various expectations regarding what a reasonable time is for issue resolution. Technology Recommendations Plante Moran’s review of technology was limited and was informed exclusively from interviews. Prior to implementing any recommendations below, Capital Projects should discuss the recommendations with technology department.  Invest in project management software. Staff use a variety of different tools to monitor projects and common software would benefit the City. While there are various options available in the market, we believe improved utilization of Smartsheet’s project management functionality may address the project management requirements of the City. As Smartsheet is already widely used and familiar to the City, it is the preferred starting point. If the City decides Smartsheet is not the optimal project management tool for its needs, the City should seek out a construction management tool via RFP. 499 City of Denton Capital Projects Process Improvement 10 | Page  Consider reducing the number of asset management systems. Though not directly controlled nor maintained by the Capital Projects teams, a disjointed asset management strategy citywide impairs the project planning and staging process. We recommend the City consider reducing the number of systems to improve processes and reduce its overall technology investment.  Develop a digital labor strategy. Many process monitoring activities involve taking information from one place and putting it into another for project reporting. These mundane and routine activities can be simplified by implementing robotic process automation (RPA) as a substitute for the manual steps that are currently executed by City staff. Plante Moran recommends this strategy only if other process improvement efforts fail to address these challenges. 500 City of Denton Capital Projects Process Improvement 11 | Page Project Observations and Opportunities The City developed a project management methodology that was finalized and published in 2017 under the title “Capital Improvement Program Engineering Services: Project Management Methodology Guidelines.” This document included tools, standards, and expectations for departmental project management as well as a process map that clearly defined the phases in a project. These phases closely mirror the phases of a project that are identified by the Project Management Institute’s Project Management Body of Knowledge (PMBOK) and other best practice standards. The major difference is that Denton treats the bid/ advertise/ award phase as a distinct phase. This seems warranted, given the strict rules related to government procurement. Reportedly, this document was created to standardize work within the department. However, most current staff were not aware of its existence or had forgotten it. Plante Moran believes this is largely due to staff turnover that coincided with the time it should have been normalized within the department. Much of this document is high-quality and it is recommended that it be updated and used as the standard for project management within the City. It is designed as a set of standards for project managers within the department. We recommend that as it is updated, the City increase the scope of the document to include project management in general by adding more information related to expectations and responsibilities of client departments and vendors. Consider developing a RACI matrix to define roles associated with those who are responsible, accountable, consulted, and informed. Once this is completed, we recommend training for staff within Capital Projects as well as with the client departments. These trainings should be part of an established, ongoing training plan to ensure that the methodology becomes embedded in the organization. Having a common project management framework will have a greater positive impact than any other recommendations in this report. Plante Moran reviewed the operations of the department and observed areas in which the City faces challenges. These observations and opportunities for improvement are presented below within the project management framework used by the City. Each phase was assigned a rating for priority and effort based on scales in the table below: Rating Priority Effort  High Priority – Requires immediate attention Requires Significant Effort and/or resources  Medium Priority – Should be addressed Requires Moderate Effort and/or resources  Low Priority – Address as time/resources permit Requires Minimal Effort and/or resources 501 City of Denton Capital Projects Process Improvement 12 | Page Priority Effort 1. Project Initiation   Overview: Project initiation includes project selection, prioritization, scheduling, assignment of project manager (whether in-house or contracted), and funding to complete the project. The initiation work is paramount to the success of the project, for it is in this phase that participants gain clarity about the major components of the project. If initiation is poorly executed, then downstream decisions may be made with inadequate or incorrect information often at greater expense. In addition, inaccurate cost estimation may allow projects to go forward that may not have financial viability. We recommend that the City begin to track the following key metrics related to Project Initiation:  Project total cost of ownership (project construction cost plus related costs of inspection, monitoring and project management)  Estimated project management costs as a proportion of total cost of ownership  Projected project management costs as it relates to the Capital Project department’s operational budget Observations:  The City does not have a consolidated capital project list. A capital improvement plan (CIP) that aligns with the City’s long-range master plan and the annual operational budget is a GFOA best practice.  Staffing levels do not correlate to department workload. A large influx of work was derived from the 2019 City bond program, but the department reduced filled positions due to retirements and a voluntary separation program.  At project initiation, the City completes an “estimate at completion” (EAC) for each project. These estimates do not have sufficient documentation that is saved and transferred to project managers. This makes it difficult for project managers to comply with estimates as project needs change.  The City does not have standards for “large” and complex projects versus “small” projects. This distinction is important because the standards and resources required will vary.  Project managers are assigned based on workload and not expertise. Opportunity:  Coordinate the capital planning process across all City departments. Consolidate all capital plans into a unified, City-wide CIP. Plante Moran recommends a five-year CIP that aligns with the City master plan and the annual operational budget.  Strengthen the handoff of a project from the client department to Capital Projects department by establishing a project authorization form. (Reportedly, this has recently been implemented.)  During project initiation, estimate the hours required for project management and inspection. Use these estimates to create staffing models for project management and inspection functions. Project managers should spend on average nine hours per week actively managing a project. Additionally, one 502 City of Denton Capital Projects Process Improvement 13 | Page Priority Effort 1. Project Initiation   hour per week should be planned for one-time per project. That brings the total time a Project Manager should spend to effectively manage a project is 10 hours per week. A Project Manager should be actively managing between four and seven projects, depending on the project complexities. Develop a template for staffing that combines project management hourly estimates by month with managers assigned to those projects. Adjust the staffing model frequently to better address staffing needs. When the department faces a short-term staffing need, address the need through contractual services.  Create a standard for EAC that includes backup documentation. This documentation should include contractual cost estimates as well as a work breakdown structure (WBS) for internal project management and inspection services. The WBS should also include estimates of the work that will be required of client departments so that their level of involvement is clearly defined.  Identify a standard that distinguishes project complexity. As an example, projects that require greater than 100 hours of oversight should be treated differently than ones that require less project management and inspection time.  Consider assigning project management workload based on a combination of availability, expertise, and professional interest. Priority Effort 2. Planning   Overview: The planning phase includes identification of project risks and stakeholders as well as development of sub-plans that might be necessary such as communication plans, right of way acquisition plans, and utility management plans. It also involves the key decision about whether to hire a design consultant or handle design components in-house. We recommend that the City begin to track the following key metrics related to Planning:  % of projects with a project charter  % of projects with a project stakeholder kickoff meeting  % of projects with communication plans, change management plans, right of way acquisition plans, and utility management plans (as a proxy for project complexity)  % of projects reassigned to different project managers over the project lifecycle Observations:  Project charters are rarely used. Doing so is a recognized best practice by the Project Management Institute and is required by Denton’s project management methodology. A project charter should include key project elements like scope, milestones, summary budget, measurable objectives, project organizational structure, communication standards, and project success 503 City of Denton Capital Projects Process Improvement 14 | Page Priority Effort 2. Planning   factors so that these factors are evaluated prior to project kickoff. This helps ensure a common understanding of the project and assist in the development of management tactics to mitigate risks.  Several program and project managers reported instances in which the Finance Department reallocates project funds to elsewhere within the City’s budget without communicating the transfer to the project team.  Client departments reported that communication from program and project managers is infrequent, leading to frustration and departments being unaware of project status.  The decision criteria for whether to design a project internally or via contractor is ambiguous. Both the design team and customer departments are often left waiting to find out who will design a project.  Project management responsibilities are frequently reassigned over the course of a project. This is to balance employee workload. However, switching managers has can be costly, as new managers need to familiarize themselves with the new project and gain rapport with the project team.  Program governance and oversight of projects is inconsistent. As a result, the department tends to focus on what is most immediate rather than what is most important. Opportunity:  Use a project charter for all significant projects. The charter should include a signed agreement from both the project manager as well as the sponsor department. Finalizing the charter should be a standard agenda item for project kickoff meetings.  Improve communication between Finance and Capital Projects. Establishing a financial manager position will assist with this. (See organizational recommendations below.)  Establish standards for communication, including timing and communication method within the project charter. Execute according to the standards that are identified.  Develop a decision framework to address the criteria that will be used to determine whether project design work is completed in-house or through a contractor.  Track project reassignments with the goal of reducing their frequency.  Establish a project oversight committee to provide coaching and evaluation for City projects. The committee should comprise of internal managers or directors from client departments and should meet monthly initially. A standard agenda should include a summarized overview of all projects and a selected handful to discuss in greater detail based on complexity, risk, and project progress. 504 City of Denton Capital Projects Process Improvement 15 | Page Priority Effort 3. Design   Overview: The design phase includes project kickoff, permit determination, and scheduling of various project reviews. It also includes reviews for budget and schedule. According to City materials, the design phase also includes an open house to share materials with interested parties. We recommend that the City begin to track the following key metrics related to Design:  % of projects with a budget modification after charter approval  % of projects with a schedule modification after charter approval  % of projects with a design modification after charter approval Observations:  Reportedly, project design modifications are frequent in this phase due to last-minute design requests. While these are not inherently bad, they often cause project delays and scope modifications at the outset of the project and there is limited understanding of the consequences of these modifications.  Plan sets are poorly indexed which leads to the need for one design technician to spend half of their time retrieving plans. The plan retrieval function does not fit neatly into the other responsibilities for the department.  Various legal documents, such as easements and contract documents, require a legal review; however, the Legal department has limited insight into the demand for their work which makes workload planning a challenge.  Easement authorization levels are low and additional approvals are common. This can cause delays in queue time and therefore delays in project execution. Similarly, participants reported that it is common for easement approvals to expire which causes the need for rework.  Reportedly, communication between the Real Estate division and client departments is inconsistent. Client departments wanted greater insight into status of acquisitions and more frequent updates. Opportunity:  Projects should not proceed to the design phase until project charters and scope is finalized and signed off.  When design modifications are necessary, they should accompany a decision log that includes the impact to the project in terms of scope, schedule, and cost.  Initiate a project to image and index the plan sets. Require a digital copy for all future plan sets so that future need of retrieval is minimized. Reportedly, the City has initiated a project to address this.  Institute notifications to the Legal department that includes estimated workload for necessary legal reviews. 505 City of Denton Capital Projects Process Improvement 16 | Page Priority Effort 3. Design    Consider modifying thresholds for easement authorizations with the intent of having a speedier process. This is an internal control that the City should evaluate from multiple facets than just efficiency.  Establish standards for right-of-way acquisition with the understanding that client departments should receive updates when there is a variance from that standard.  Conduct a formal kick-off meeting with all client departments to review scope, timing, resource needs, and communication standards. Priority Effort 4. Bid/ Advertise/ Award   Overview: The Bid/ Advertise/ Award phase is where significant project costs begin to be incurred. This phase is largely the shared responsibility of Capital Projects and Procurement to identify vendors to complete the work and to seek City Council approval of contracts when necessary. Although the resources committed during this phase is greater than the others, Plante Moran has limited feedback on this phase, as much of the procurement process is dictated by State law and Council policy. We recommend that the City begin to track the following key metrics related to Bid/ Advertise/ Award:  % of project timelines amended during this phase  % of EACs significantly amended during this phase Observations:  Several program managers shared frustration with the City’s Request for Information (RFI) process. Opportunity:  Work collaboratively with Procurement to identify opportunities for improvement while complying with regulations and guidelines.  Conduct regular monthly meetings with Procurement to review anticipated projects and future workloads. Priority Effort 5. Construction   Overview: 506 City of Denton Capital Projects Process Improvement 17 | Page Priority Effort 5. Construction   This phase includes all aspects of project monitoring, accounting, and reporting to ensure that construction occurs within the defined parameters of the project. This can include complex steps such as land acquisition and utility coordination. This phase is critical because it is where the majority of the City’s resources are spent and it is also the most time-consuming phase of the project. It is also the point at which the public often becomes aware of a project, as it can impact them directly with street closures and other visible signs that a project is underway. As a project progresses, it needs to be inspected, monitored, and reported to various stakeholders. Due to the nature of construction, changes will be necessary on many projects. However, the cost of a change during the construction phase is significantly greater than in previous phases. Therefore, construction is in many ways an evaluation of the previous phases in a project. We recommend that the City begin to track the following key metrics related to Project Construction:  Budget to actual  Estimate to complete  Project management as a proportion of total project  Number of change orders  Change orders as a proportion of total project  Adherence to project timeline: expected to actual Observations:  The City has multiple sets of specifications which can make an inspection a challenge, as there are multiple sources of truth and a project might comply with one set but not comply with a different set.  Inspections program has insufficient lead time that a project is ready for inspections. This causes frequent reassignments and workload balancing. This issue is similar to what the Legal department experiences with requests for review.  24/48-hour requests for inspection standard is not well enforced. This increases the need for workload reprioritization and negatively impacts morale.  Reportedly, staff time spent on projects is not always recorded and charged to the projects.  Project management tools are inconsistent – some project managers use Excel or written notes prior to logging information into Smart Sheet for reporting. Opportunity:  The City has undertaken a project to develop a single methodology for all City projects.  Create a feed-forward mechanism for projects that are getting ready for inspection. This will help the Inspection program with workload planning.  Enforce inspection frequency standards or adjust staffing levels to accommodate. 507 City of Denton Capital Projects Process Improvement 18 | Page Priority Effort 5. Construction    Establish an audit function to ensure that time is being captured accurately. This is necessary to get a total cost of ownership for projects and adequately evaluate project expenses. Time spent by client departments should also be charged against the project.  Develop a standard set of project management and project monitoring tools using the Project Management Institute as a best practice standard. If the logging of information remains routine and repeatable, explore the use of a Robotic Process Automation (RPA) tool to ease the reporting process.  Introduce monthly progress monitoring by the project oversight committee. Projects to be reviewed should include high risk, high complexity, and troubled projects. Monitoring activities should include budget, timing, communication plan activities, and time tracking. Priority Effort 6. Closeout   Overview: The project closeout phase includes punch list items and booking the asset. It should also include a project evaluation so that lessons from the project can be applied to future projects. We recommend that the City begin to track the following key metrics related to Project Closeout:  # of projects with an evaluation/ wrap-up meeting Observations:  Project close-out activities rarely occur. The 2017 project management manual recommends several close out activities that mirror best practices.  Project close-out does not include evaluation of project budgeting and other measures of project success.  Vendors are not evaluated on their performance. Opportunity:  Execute the project close out activities described in the 2017 manual.  Review contractors used and document experiences – both positive and negative. Share results with Procurement to inform future contracts.  Perform formal lessons learned meetings for selected projects: o Identify changes to the method and tools o Identify training needs o Review project documentation 508 City of Denton Capital Projects Process Improvement 19 | Page Organizational Findings Over the course of the engagement, Plante Moran reviewed various aspects of the organization including work allocation, organizational design, staff sufficiency, performance management, and span of control. Plante Moran’s approach to organizational design is that an organizational model should be developed after evaluating process and workload considerations, which were shared earlier in this report, along with the long-range goals for the organization. For the observations regarding these factors, the observations were organized into four categories. Below is a summary of these categories and the corresponding priority and level of effort associated with each: Project Phase Priority Effort Role Definition   Span of Control   Organization Model   Organization Reinforcements   Midway through the project, a reorganization occurred and several individuals in leadership positions received new assignments and responsibilities. Plante Moran was not consulted in these changes and we encourage the City to view our observations below with the understanding that some challenges may have already been addressed through these moves. Priority Effort 1. Role Definition   Overview: Role definition relates to the expertise and clarity that individuals have in order to efficiently execute common objectives. It includes roles, responsibilities, skills, accountability structures, and authority levels. Observations:  Staff tenure is low. Many of those interviewed had been in their role for fewer than two years. While this is not inherently a problem, the volume of changes in both leadership and line staff has created confusion regarding responsibilities.  Newer staff did not receive adequate training in standards and expectations related to project management tools, templates and resources. This industrious group invented their own methods which has caused confusion for client departments and challenges with standardized approaches.  Staff shortages have created an expectation that supervisors complete the work that they would normally delegate. 509 City of Denton Capital Projects Process Improvement 20 | Page Priority Effort 1. Role Definition    The total number of job classifications is greater than what Plante Moran normally encounters. Moreover, those interviewed were asked about job responsibilities and it was common for their responsibilities to not match the official job descriptions. Opportunity:  Work with Human Resources to develop tactics to increase staff retention.  Standardization of project management tools will improve team cohesion.  Fill existing staff vacancies, as workload demand continues to grow. Consider the use of temporary contractors as staff augmentation.  Although job descriptions had been recently updated, the City should consider an additional review. Alternatively, if the existing job descriptions are accurate, the City should improve supervision so that staff responsibilities adhere to the job descriptions. Priority Effort 2. Span of Control   Overview: Span of control refers to the ratio of supervisors to subordinates. This ratio varies with the complexity of work, experience level of staff and managers, and other organizational considerations. Observations:  Management to staff ratios varied considerably within the department.  The reporting structure for project managers is a blend of matrix and hierarchy – staff may report to one supervisor for official management decisions such as approving time off, but they may report to a different supervisor for management decisions related to specific projects. Opportunity:  Standardize a range of management to staff ratios. When determining this range, include private contractors as part of supervisory responsibility.  Streamline reporting to avoid potential conflicts. 510 City of Denton Capital Projects Process Improvement 21 | Page Priority Effort 3. Organization Model   Overview: Organizational model describes how the business units are structured to deliver services. Organization models are designed to satisfy and balance the specific challenges of: 1) delivering customer value, 2) defining and enforcing high-performance business processes, 3) developing and monitoring employee skills, and 4) meeting cost structure targets. Observations:  The real estate and plan set retrieval functions do not naturally complement the other service areas within the department.  The department has undergone a number of reorganizations and changes in leadership. The lack of predictability has caused stress for several staff members.  The City’s real estate portfolio (properties owned, properties leased, etc.) did not have sufficient personnel time dedicated to managing these assets and agreements.  Process execution is inconsistent due to lack of formal training, poor documentation, and ineffective monitoring.  Change management will be a challenge to the organization.  Coordination and execution of financial processes are a challenge to many in the organization. Opportunity:  The City has already taken steps to move real estate to be a part of Facilities. Consider shifting plan set retrieval to a different department as well.  New leadership should convey a new vision, expectations, and milestones for the new organization. These should be communicated frequently to convey a semblance of permanence.  Consider dedicating a position to managing the City’s real estate portfolio.  Make a management analyst responsible for developing procedure documentation, training materials, reinforcing standards, and executing continuous improvement and change management methods.  Create a financial manager position to be responsible for budget, financial reporting, and asset capitalization processes. 511 City of Denton Capital Projects Process Improvement 22 | Page Priority Effort 4. Organizational Reinforcements   Overview: Organizational reinforcements seek to align organizational enablers (performance management systems, compensation, and rewards, to ensure that the design components perform the way they were intended. Observations:  Position competencies are defined in position descriptions, but the department does not have feedback mechanisms to monitor progress toward the competencies.  Capital Projects does not receive formal, aggregated feedback from client departments regarding the overall performance of the department.  Internal improvement initiatives are managed similar to client projects with a defined milestones and targets. These projects require a maintenance component to be embedded within the organization. Opportunity:  As part of project closeout activities, establish a project evaluation. Use the evaluations during performance reviews throughout the year.  As part of an annual department review, conduct a survey to client departments that targets key areas of customer value.  Rely on management analysts to facilitate internal improvement projects by having project charters, communication plans, and status updates. Principles of Redesign The City asked for Plante Moran’s insights of the organizational design for the department. Feedback from the interviews was used to develop principles that were then applied to the recommendations. These principles were shared with department leadership:  Management to staff ratios should be consistent but account for complexity of work. Supervisory responsibilities should be similar across the organization.  Decisions should be pushed to the lowest level practical. If staff have the competency to make decisions, they should do so without requiring additional approvals.  Similar organizational functions should complement one another. The organization should be grouped functionally to allow for efficiencies and to enhance organizational synergies.  Resources for tactical implementation should match strategic ambitions. Staffing levels should reflect workload – of there are many long-term projects, it should be staffed by establishing positions, but short-term needs should be staffed through staff augmentation. 512 City of Denton Capital Projects Process Improvement 23 | Page  Organization should be designed independent of individuals. The skills and talents of particular individuals should not impact organizational design.  If demand is temporary, use temporary labor; if demand is long-term, create positions. Staffing levels are a key consideration in organizational design.  Institute “best practices” where applicable. The best source for project management best practices is the Project Management Institute (pmi.org) which offers a variety of resources including training, tools, certifications, and networking opportunities. These principles were applied to the organization framework by examining the functions and staffing levels of the department. Plante Moran’s review was of the organizational reporting structure that existed at the initiation of the project. The City then instituted a reorganization that addressed some of the challenges Plante Moran observed in that various functions that should complement one another were not designed to do so. We support these changes. In addition, we recommend the following additional changes: 1. Staff the number of project managers and inspectors according to demand. As part of project initiation activities, estimate the hourly allocation that will be necessary for project management and inspection as well as the timing of when those resources will be required. When aggregated, this data should demonstrate position needs. Rely on staff augmentation during peak times. 2. Establish two new positions which can be within the Capital Projects department or elsewhere within the organization:  Fiscal Manager to oversee and monitor various financial functions including grant management, fund accounting, and asset booking. This position could also liaise with Finance on a variety of additional responsibilities.  Management Analyst to be responsible for continuous improvement efforts including the documentation and training of project management standards. 3. Combine the Design and Traffic Engineering functions into a single program area that specializes in the initiate, plan, and design phases of project management. This will also normalize management to staff ratios for these functions. 513 City of Denton Capital Projects Process Improvement 24 | Page Appendix A: Current technology environment index (draft) Part of improving a process is identifying the technologies used and determining the utility and efficacy of each tool. Plante Moran compiled the below technology environment index based on the information provided during interviews. The technology environment was not a primary focus of these interviews and this index may be incomplete. We recommend that the City review this list and updates it to most accurately reflect the technology used within the capital projects processes. Initiation Planning Design Bid/ Advertise/ Award Construction Closeout JD Edwards TMA: Facilities asset management system Smartsheet: Design Schedule RFI system PowerBI Dashboard JD Edwards Microsoft Excel: Project Management spreadsheet JD Edwards JD Edwards Legistar: council agenda system Smartsheet: Project Master sheet Cartograph: Public Works asset management system Smartsheet: Project intake form Microsoft Excel: Project Management spreadsheet Smartsheet: Design Request form JD Edwards Microsoft Word: Change order form Micromain: Parks & Recreation system Cartograph: Public Works asset management system Microsoft Excel: Project Management spreadsheet Microsoft Excel: Invoicing spreadsheet InfoAsset Planner: Water/wastewater asset management system Micromain: Parks & Recreation system Microsoft Word: Inspection template TMA: Facilities asset management system InfoAsset Planner: Water/Wastewater asset management system JD Edwards Microsoft Excel: Project Management spreadsheet 514 City of Denton Capital Projects Process Improvement 25 | Page Appendix B: Action Plan Recommendations Timeline Category Stakeholder A Create and follow a project management methodology 1 Coordinate the capital planning process for all departments and consolidate into a unified CIP. Q4 2020 Initiation Capital Projects, customer departments 2 Standardize project management and monitoring tools. Q4 2020 Construction Capital Projects 3 Standardize supporting documentation required to fortify EAC assumptions. Q4 2020 Initiation Capital Projects, PMO 4 Use project charters agreed upon by all stakeholders for every significant project Q4 2020 Planning Capital Projects, customer departments 5 Execute project close out activities, including evaluation of project budgeting, for every project. Q4 2020 Closeout Capital Projects 6 Initiate the design phase only once scope is finalized. Q4 2020 Design Capital Projects, customer departments 7 Review and document experiences with vendors as part of project close Q1 2021 Closeout Capital Projects, Purchasing 8 Establish right-of-way acquisition timing standards and provide notification to customer departments when there is a deviation. Q4 2020 Design Real Estate 515 City of Denton Capital Projects Process Improvement 26 | Page Recommendations Timeline Category Stakeholder B Clarify responsibilities 9 Develop decision framework to address project design assignments. Q4 2020 Planning Capital Projects 10 Track project reassignments to reduce their frequency. Q4 2020 Planning Program Managers 11 Standardize communication frequency, timing and scope between Real Estate and Legal Department. Q4 2020 Design Facilities, Legal Department 12 Work collaboratively with Purchasing to identify opportunities for improvement while complying with regulations and guidelines. Q4 2020 Bid/ Advertise/ Award Capital Projects, Purchasing 13 Document operational procedures to limit brain drain within the department. Q4 2020 People Capital Projects 14 New leadership should convey new vision and expectations frequently to convey permanence Q4 2020 Organizational Model Capital Projects 15 Establish a project oversight committee to provide coaching and evaluation for all City projects. Q1 2021 Planning Capital Projects, customer departments 16 Implement a feed-forward notification mechanism for projects that are preparing for inspection. Q1 2021 Construction Capital Projects 17 Institute customer department feedback loops and incorporate relevant feedback into performance reviews. Q1 2021 Process Capital Projects, Human Resources 18 Develop service level agreements to manage expectations on when and how work will be completed. Q1 2021 Process Capital Projects, customer departments 516 City of Denton Capital Projects Process Improvement 27 | Page Recommendations Timeline Category Stakeholder C Organize department around project management methodology 19 Assign project managers based on availability, expertise, and professional interest Q4 2020 Initiation Capital Projects 20 Estimate project management and inspection hours to create staffing models for project duration. Q4 2020 Initiation Capital Projects 21 Categorize projects by complexity to plan hours needed to manage and inspect Q4 2020 Initiation Capital Projects 22 Establish an audit function to ensure time being charged to a project is being captured accurately. Q4 2020 Construction Capital Projects, PMO 23 Institute a change management strategy to best prepare staff for changes to department and operations. Q4 2020 People Capital Projects 24 Work with Human Resources to develop tactics to increase staff retention. Q4 2020 Role Definition Capital Projects, Human Resources 25 Review and update job description to reflect current responsibilities. Q4 2020 Role Definition Capital Projects, Human Resources 26 Assess unmet work demand and satiate with additional hiring or contract staff, depending on the duration. Q4 2020 Role Definition Capital projects, City leadership 27 Standardize management to staff ratio ranges. Q4 2020 Span of Control Capital Projects, Human Resources 28 Streamline reporting structure to be hierarchical instead of blended between hierarchical and matrix. Q4 2020 Span of Control Capital Projects, Human Resources 517 City of Denton Capital Projects Process Improvement 28 | Page Recommendations Timeline Category Stakeholder 29 Hire a management analyst to develop procedure documentation and training materials, as well as reinforcing standards and executing continuous improvement. Q4 2020 Organizational Model Capital Projects, Human Resources 30 Hire a financial manager to be responsible for budget, financial reporting, and the asset capitalization process Q4 2020 Organizational Model Capital Projects, Human Resources 31 Combine the Design and Traffic Engineering functions into a single program area. Q4 2020 Organizational Model Capital Projects, City leadership 32 Hire a financial manager to, among other responsibilities, coordinate communication between the Finance Department and Capital Projects Department. Q1 2021 Planning Capital Projects, PMO 33 Restructure department reporting lines to further streamline operations. Q1 2021 People Capital Projects, Human Resources D Other 34 Initiate a project, whether internally or outsources, to image and index plan sets. Q4 2020 Design Capital Projects 35 Invest in project management software, whether it is smartsheet or another solution. Q4 2020 Technology Capital Projects, Purchasing 36 Assess asset management systems and reduce the number of systems used, if advisable. Q4 2020 Technology Capital Projects, customer departments 37 Consider shifting plan set retrieval to a different department. Q4 2020 Organizational Model Capital Projects, City leadership, customer departments 518 City of Denton Capital Projects Process Improvement 29 | Page Recommendations Timeline Category Stakeholder 38 Dedicate a new position to managing the City’s real estate portfolio. Q4 2020 Organizational Model Facilities, Human Resources 39 Consider modifying thresholds for easement authorizations with the intent of having a speedier process. Q1 2021 Design City Manager 519 City of Denton Capital Projects Process Improvement 30 | Page Appendix C: Proposed organizational chart changes Figure 1: Current organizational chart with functions Figure 2: Future state functional organizational chart 520 Thank you. For more information on Plante Moran, contact: Dave Plomin | Engagement Partner 312.928.5359 Dave.Plomin@plantemoran.com 521 ORDINANCE NO. ___________ AN ORDINANCE OF THE CITY OF DENTON, A TEXAS HOME-RULE MUNICIPAL CORPORATION, AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE A CONTRACT WITH PROCORE TECHNOLOGIES, INC. THROUGH THE NORTH CENTRAL TEXAS COUNCIL OF GOVERNMENTS (NCTCOG), CONTRACT #2020-064 AND RATIFY A CONTRACT EXECUTED BY PURCHASING AGENT WITH CALANCE SOFTWARE PVT. LTD. WHICH IS THE SOLE PROVIDER OF THESE COMMODITIES AND SERVICES, IN ACCORDANCE WITH TEXAS LOCAL GOVERNMENT CODE 252.022, WHICH PROVIDES THAT PROCUREMENT OF COMMODITIES AND SERVICES THAT ARE AVAILABLE FROM ONE SOURCE ARE EXEMPT FROM COMPETITIVE BIDDING, FOR THE PURCHASE AND IMPLEMENTATION OF PROJECT MANAGEMENT SOFTWARE FOR THE ENGINEERING DEPARTMENT; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (FILE 7533 AWARDED TO PROCORE TECHNOLOGIES, INC., IN THE TWO (2) YEAR NOT-TO-EXCEED AMOUNT OF $363,078.00). WHEREAS, pursuant to Contract #2020-064, the North Central Texas Council of Governments (NCTCOG) has solicited, received, and tabulated competitive bids for the purchase of necessary materials, equipment, supplies, or services in accordance with the procedures of state law on behalf of the City of Denton; and WHEREAS, the City Manager, or a designated employee, has reviewed and recommended that the herein described materials, equipment, supplies, or services can be purchased by the City through the North Central Texas Council of Governments (NCTCOG) contract at less cost than the City would expend if bidding these items individually; and WHEREAS, Section 252.022 of the Local Government Code provides that procurement of items that are only available from one source, including, items that are only available from one source because of patents, copyrights, secret processes or natural monopolies; films, manuscripts or books; electricity, gas, water and other utility purchases; captive replacement parts or components for equipment; and library materials for a public library that are available only from the persons holding exclusive distribution rights to the materials; and need not be submitted to competitive bids; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies, or services approved and accepted herein and the City Council wishes to procure one or more of the items subject to sole source procurement; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. office of the Purchasing Agent, are hereby accepted and approved as being the lowest responsible bids for such items: FILE 522 NUMBER VENDOR AMOUNT 7533 Procore Technologies, Inc. $363,078.00 Calance Software Pvt. Ltd. SECTION 2. By the acceptance and approval of the items set forth in the referenced file number, the City accepts the offer of the persons submitting the bids to the North Central Texas Council of Governments (NCTCOG) for such items and agrees to purchase the materials, equipment, supplies, or services in accordance with the terms, conditions, specifications, standards, quantities, and for the specified sums contained in the bid documents and related documents filed with the North Central Texas Council of Governments (NCTCOG) and the purchase orders issued by the City. SECTION 3. Should the City and persons submitting approved and accepted items set forth in the referenced file number wish to enter into a formal written agreement as a result of the North Central Texas Council of Governments (NCTCOG), the City Manager, or his designated representative, is hereby authorized to execute the written contract which shall be attached hereto; provided that the written contract is in accordance with the terms, conditions, specifications, and standards contained in the Proposal submitted to the North Central Texas Council of Governments (NCTCOG), and related documents herein approved and accepted. SECTION 4. The City Council hereby ratifies that the sole source contract with Calance Software Pvt. Ltd., to provide integration and other services related to the Procore Technologies, Inc. procurement, constitutes a procurement of items that are available from only one source, including, items that are only available from one source because of patents, copyrights, secret processes or natural monopolies; films, manuscripts or books; electricity, gas, water and other utility purchases; captive replacement parts or components for equipment; and library materials for a public library that are available only from the persons holding exclusive distribution rights to the materials; and need not be submitted to competitive bids. SECTION 5. The City Council of the City of Denton, hereby expressly delegates the authority to take any actions that may be required or permitted to be performed by the City of Denton under this ordinance to the City Manager of the City of Denton, or his designee. SECTION 6. By the acceptance and approval of the items set forth in the referenced file number, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approval purchase orders or pursuant to a written contract made pursuant thereto as authorized herein. SECTION 7. This ordinance shall become effective immediately upon its passage and approval. 523 The motion to approve this ordinance was made by __________________________ and seconded by _________________________________, the ordinance was passed and approved by the following vote [___ - ___]: Aye Nay Abstain Absent Mayor Gerard Hudspeth: ______ ______ ______ ______ Birdia Johnson, District 1: ______ ______ ______ ______ Connie Baker, District 2: ______ ______ ______ ______ Jesse Davis, District 3: ______ ______ ______ ______ John Ryan, District 4: ______ ______ ______ ______ Deb Armintor, At Large Place 5: ______ ______ ______ ______ Paul Meltzer, At Large Place 6: ______ ______ ______ ______ PASSED AND APPROVED this the _______ day of ___________________________, 2021. __________________________________ GERARD HUDSPETH, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY BY: __________________________________ APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: _________________________________ 524 Docusign City Council Transmittal Coversheet File Name Purchasing Contact City Council Target Date Piggy Back Option Contract Expiration Ordinance 525 526 527 PO #: \poq_1\ Tax Exempt: \q_Tax_Exempt_1\City of Denton (“ ”)CustomerSignature: \s1\ Name: \n1\Title: \t1\ Date: \d1\Procore Technologies, Inc. (“ ”)ProcoreSignature: \s2\ Name: \n2\Title: \t2\Date: \q_signdate2\528 529 530 Procore Technologies, Inc. MSA_2019_V1 www.procore.com PROCORE SUBSCRIPTION TERMS These terms, including any attached exhibits (collectively, “Terms”) are entered into as of the effective date listed on the Order Form (“Effective Date”) between PROCORE TECHNOLOGIES, INC., a Delaware corporation, having its principal place of business at 6309 Carpinteria Avenue, Carpinteria, CA 93013 (“Procore” or “Party”) and the customer identified in the Order Form, (“Customer” or “Party”), collectively the “Parties.” In consideration of the mutual covenants and conditions contained herein, the Parties agree as follows: 1. BACKGROUND. Procore has developed certain construction project management Software (defined below), to which it provides access as part of its Services (defined below). Customer wishes to enter into this Agreement for a subscription to the Services identified on an Order Form. Procore desires to make those Services available to Customer subject to the terms of this Agreement. 2. DEFINITIONS. The capitalized terms listed below have the following meanings: 2.1 “Agreement” means, collectively, the terms of the Order Form and these Terms. 2.2 “Authorized User” means any individual who is authorized by virtue of such individual’s relationship to, or permissions from, Customer, to access and receive Customer Content/Customer Data and use the Services on Customer’s behalf pursuant to Customer’s rights under this Agreement. 2.3 “Construction Volume” means the aggregate dollar value of the construction work performed, planned, or put in place for all Customer Projects for which Customer utilizes the Services during a given time period, most often a one-year period. The Order Form shall set forth the service period and amount of Construction Volume purchased by Customer. 2.4 “Customer Content” means any content created by or on behalf of Customer or an Authorized User in connection with the Services and Customer Projects. 2.5 “Customer Data” means personally identifiable information provided by Customer to Procore regarding natural persons. 2.6 “Customer Project” means each distinct construction project for which Customer utilizes the Services constrained by a specific scope, budget, and schedule, as specified in a construction project agreement. The lifecycle phases for typical construction projects may include initiation, planning, design, demolition, construction, commissioning, and closeout. 2.7 “Data Center Region” means a location in which Procore or its affiliates maintain data processing operations, including the United States, Canada, the European Union, Australia, and the United Kingdom. 2.8 “Documentation” means online user guides provided and updated by Procore via https://support.procore.com/products/online/user-guide in connection with Customer’s subscription to the software Services specified on the applicable Order Form. 2.9 “Enhancements” means the following: minor modifications, revisions, and corresponding Documentation with respect to the Services, including the addition of enhancements or improved performance made available by Procore to the Services; however, Enhancements do not include the addition of New Features not originally included as part of the Services described on a particular Order Form. 2.10 “Maintenance Modifications” means bug fixes, patches, modifications, or revisions to the Services that correct errors therein; however Maintenance Modifications do not include New Features not originally included as part of the Services described on a particular Order Form. 531 Procore Technologies, Inc. MSA_2019_V1 www.procore.com 2.11 “New Features” means those new or materially different technological or service features and/or tools that Procore develops over time, which are, in Procore’s discretion, offered to Customers as additional features for a fee and are distinct from included Enhancements and Maintenance Modifications. 2.12 “Order Form” means the order form document signed by both Parties that is attached to and governed by these Terms, which specifies certain other agreed-upon terms including Customer’s specific subscription information pertaining to the Services. The Parties may enter into additional Order Forms during the Term, each of which will be subject to these Terms. 2.13 “Project Caps” means the maximum number of simultaneous Customer Projects, as stated on the Order Form. 2.14 “Services” means (1) Procore’s proprietary Software offerings, and (2) any professional services that are specified on the Order Form. 2.15 “Site” means app.procore.com and all associated Procore mobile applications that utilize Procore’s Software. 2.16 “Software” means Procore’s proprietary software programs and any associated user interfaces and related technology that Procore uses to provide the Services, and that Procore makes available pursuant to this Agreement, including any Enhancements and Maintenance Modifications thereto. 2.17 “Subscription Fee” means the agreed-upon subscription fee(s) for the Services as stated on the Order Form. 3. PROVISION OF SERVICE/RESPONSIBILITIES. 3.1 Subscription Rights and Access. Subject to the terms of this Agreement (including payment of fees), Procore will provide Customer with access to the Services during the Term. Customer, via its Authorized Users, may access and use the Services only for its intended purposes, in accordance with the specifications set forth in any Documentation and for Customer’s internal business use and the limits on Construction Volume, Project Caps, Customer Projects, and/or other use restrictions specified on the applicable Order Form. Subject to Customer’s payment of the fees set forth in the Order Form, Procore shall provide to Customer the necessary passwords, security protocols and policies, and network links or connections to allow Customer and its Authorized Users to access the Services. 3.2 Support; Compatibility. Procore shall provide the Customer and its Authorized Users with (a) support for the Services as outlined in Exhibit A, and (b) access to Enhancements and Maintenance Modifications as they become available. Customer and its Authorized Users are solely responsible for ensuring that they have sufficient and compatible hardware, software, telecommunications equipment, and Internet service necessary for the use of the Site and Services. 3.3 Site Updates. Procore may, in its discretion, change, modify, upgrade, or discontinue any aspect or feature of the Site in whole or in part. Such changes, upgrades, modifications, additions, or deletions will be effective immediately upon notice thereof, which may be made by posting such changes to the Site. In the event Procore modifies or discontinues any content or feature of the Site which results in a material reduction of functionality or degradation of the Site, Procore shall provide comparable functionality. Procore may, from time to time, develop New Features, which will be offered to customers for additional fees. 3.4 Limitations. Customer shall not, and shall not authorize or permit any Authorized User to (a) rent, loan, or license rights to access and/or use the Services and/or the Software (except as specifically provided herein); (b) copy, modify, disassemble, decompile, or reverse engineer software included as part of the Services; (c) share identification or password codes with persons other than Authorized Users, or permit Customer’s account to be accessed by individuals who are not Authorized Users; (d) access, use, or permit a third party to access or use the Services or Software for purposes of competitive analysis, including the development, 532 Procore Technologies, Inc. MSA_2019_V1 www.procore.com provision, or use of a competing software or service or for any other purpose that may be to Procore’s detriment or commercial disadvantage; (e) use the Services in any way not expressly provided for in this Agreement; (f) use the Services in a manner that infringes the intellectual property, privacy, or other rights of third parties; (g) remove any title, trademark, copyright, or restricted rights notices or labels from the Services; (h) interfere with or disrupt the integrity or performance of the Services; or (i) expose Procore to any malware, including viruses, worms, or any other malicious computer programming codes that may damage Procore or third-party systems or data. Customer shall be responsible for all activities that occur under Customer’s account and for all actions of Customer or its Authorized Users and both Customer and Authorized Users shall use the Site and the Services in accordance with the Terms of Service located at https://www.procore.com/fine-print/terms. Procore will provide a notification to Customer, via the Site, of updates to the Terms of Service. It is Customer’s responsibility to review the Terms of Service from time to time on the Site to ensure that Customer continues to agree with all of its terms. Customer’s continued use of the Site or the Services following the posting of changes to the Terms of Service will mean Customer accepts those changes. If there is any conflict between the Terms of Service and this Agreement, this Agreement will govern. Customer shall notify Procore of any unauthorized use of Customer’s passwords or account, or any other breach of security that is known or suspected by Customer. Customer and its Authorized Users shall abide by all applicable local, state, national, and foreign laws and regulations in connection with their use of the Services. Customer shall be responsible for any breach of this Agreement by its Authorized Users and agrees to enter into agreements with its Authorized Users that contain terms that impose restrictions in all material respects no less than those imposed on Customer herein, including, but not limited to, the provisions regarding the use of the Services and protection of Procore’s intellectual property, and that include additional terms as reasonably requested by Procore. 3.5 Customer Content. Procore will process Customer Content in order to provide and enhance the Services and Software. The Parties acknowledge and agree that the Customer is at all times the data controller and Procore is a data processor. Customer represents and warrants that it has all necessary rights in the Customer Content to grant Procore the right to use, and Customer hereby grants Procore a non-exclusive, worldwide, royalty-free, transferable, and fully paid license to use, modify, and distribute the Customer Content as necessary for Procore to provide and enhance the Services. All rights in and to the Customer Content not expressly granted to Procore in this Agreement are reserved by Customer. Customer represents and warrants that any Customer Content hosted by Procore as part of the Services will not (a) infringe or violate the rights of any third party; or (b) be deceptive, defamatory, obscene, or unlawful. Customer acknowledges that any use of the Services by Customer or Authorized Users contrary to or in violation of the representations and warranties of Customer in this section constitutes unauthorized and improper use of the Services. Customer shall have sole responsibility for the accuracy, quality, integrity, legality, reliability, and appropriateness of all Customer Content. The Parties acknowledge that Procore does not and cannot review all Customer Content and will not be responsible for such content, and that Customer instructs Procore to delete, move, or edit any Customer Content that Procore determines violates or might violate this Agreement, its Terms of Service, or any applicable law or regulation, or is otherwise unacceptable. Customer acknowledges and agrees that the Customer Content may be transferred or stored in a Data Center Region. Customer acknowledges and agrees that the Customer Content may be shared with third parties as necessary to provide and enhance the Services. 3.6 Customer Data. Procore will process Customer Data as needed to provide the Services. The Parties acknowledge and agree that the Customer is at all times the data controller and Procore is a data processor. Customer represents and warrants that Customer shall only provide to Procore the minimum amount of personally identifiable information, the extent of which is determined and controlled by Customer in its sole discretion, for each Authorized User, to enable the Authorized User to enjoy the benefit of this Agreement. Customer represents and warrants that Customer is entitled to transfer relevant Customer Data to Procore so that Procore may lawfully use, process, and transfer the Customer Data in accordance with this Agreement on Customer’s behalf and Customer shall ensure the same. Customer shall ensure that the relevant third parties, including data subjects, have been informed of, and have given their consent to, such use, processing, and transfer as required by all applicable data protection legislation. Customer acknowledges that Procore is reliant on Customer for direction as to the extent to which Procore is entitled to use and process the Customer Data. Procore shall process the Customer Data only in accordance with the terms of this Agreement and any written instructions given by Customer. Customer acknowledges and agrees that the Customer Data may be transferred or stored in a Data Center Region. Customer acknowledges and agrees that the Customer Data may be shared with third parties as necessary to provide and enhance the Services. Procore will not be liable for any claim 533 Procore Technologies, Inc. MSA_2019_V1 www.procore.com brought by an Authorized User arising from any action or omission by Procore, to the extent that such action or omission resulted from Customer's instructions. 3.7 Aggregate Content. Customer acknowledges and agrees that Procore may obtain and aggregate Customer Content and/or anonymized Customer Data with respect to Customer or Authorized Users ("Aggregate Content"), and Procore may utilize the Aggregate Content to analyze, improve, support, and operate the Services, during and after the term of this Agreement. Customer acknowledges that Aggregate Content is not Customer Content or Customer Data. 3.8 Customer Acknowledgement. As of the Effective Date, Customer acknowledges and agrees that Customer’s authorized representative has evaluated the features and functionality of the Services in a means satisfactory to Customer and accepts that the Services have been demonstrably shown to have all of the features and functionality to Customer’s satisfaction. Customer agrees that its purchases hereunder are neither contingent on the delivery of any future functionality or features, nor dependent on any oral or written comments made by Procore regarding future functionality or features. 3.9 Non-Procore Applications. Procore and third parties may make available third-party products or services, including, but not limited to, third-party products available on the Procore App Marketplace (https://marketplace.procore.com/) (“Non-Procore Applications”). Any use by Customer and any exchange of data between Customer and the provider of Non-Procore Applications is solely between Customer and the applicable provider. Procore does not warrant or support Non-Procore Applications or other non-Procore products or services. If Customer installs or enables a Non-Procore Application for use with the Services, Customer hereby grants Procore permission to allow the provider of that Non-Procore Application to access Customer’s data and content as required for the interoperation of that Non-Procore Application with the Services. Procore is not responsible for any disclosure, modification, or deletion of any Customer Data or Customer Content resulting from access by or integration with a Non-Procore Application. The Services may contain features designed to interoperate with Non-Procore Applications. To use such features, Customer may be required to obtain access to Non-Procore Applications from their providers, and may be required to grant Procore access to Customer’s account(s) on the Non-Procore Applications. Customer agrees to fully comply with any terms and conditions required by providers of Non-Procore Applications and obtain all consents necessary for Procore to receive Customer Data and/or Customer Content from such providers. If the provider of a Non-Procore Application ceases to make the Non-Procore Application available for interoperation with the corresponding Service features, Procore may cease providing those Service features without providing Customer any refund, credit, or other compensation. Customer uses Non-Procore Applications at its own risk and Procore is not responsible for any acts or omissions of providers of Non-Procore Applications. PROCORE HEREBY DISCLAIMS ALL LIABILITY FOR ANY HARM OR DAMAGES CAUSED BY NON-PROCORE APPLICATIONS. 3.10 Beta Services. From time to time, Procore may invite Customer and Authorized Users to try or discuss certain beta services, including pilot, limited release, developer preview, in-development, non-production, or evaluation services (“Beta Services”) at no charge. Customer may accept or decline any such trial. Beta Services will be clearly designated as such by Procore. Beta Services and discussions about Beta Services are Procore’s Confidential Information, for evaluation purposes and not for production use, are not considered Services under this Agreement, are not supported, and may be subject to additional terms. Unless otherwise stated, any Beta Services trial period will expire upon the earlier of one year from the trial start date or the date that a version of the Beta Services becomes generally available. Procore may discontinue Beta Services at any time and may never make them generally available. BETA SERVICES ARE PROVIDED “AS IS” WITHOUT EXPRESS OR IMPLIED WARRANTY AND WITHOUT INDEMNITY. PROCORE WILL HAVE NO LIABILITY FOR, AND CUSTOMER HEREBY RELEASES PROCORE FROM ANY LIABILITY OR DAMAGE ARISING OUT OF OR IN CONNECTION WITH ANY BETA SERVICE. 4. PAYMENT. 4.1 Payment Terms. Customer shall pay Procore all Subscription Fees specified on the Order Form upon receipt of invoice unless otherwise stated on the Order Form.. Overdue payments will be subject to a late fee of 1.5% for each month or fraction thereof that the payment is overdue, or the highest interest rate permitted by applicable law, whichever is lower. In addition to any other remedies available to Procore, Procore 534 Procore Technologies, Inc. MSA_2019_V1 www.procore.com shall be entitled to discontinue provision of the Services until all overdue amounts due are paid in full. Except as expressly provided in this Agreement, all payments to Procore are non-refundable and non-cancelable. Customer shall reimburse Procore for Procore’s collection costs incurred in attempting to collect any late payments, including reasonable attorneys’ fees. 4.2 The Parties acknowledge and agree that Procore is reselling to Customer the Calance Line Items as defined and set forth on the applicable Order Form. Notwithstanding the foregoing the Parties also acknowledge and agree that (i) Customer’s use and provision of the Calance Line Items is subject to Calance’s separate terms and conditions as specifically attached in the Order Form (the “Calance MSA”), (ii) use of provision by Customer of the Calance Line Items is solely between Customer and Calance, subject to the Calance MSA; and (iii) that Procore has no liability or obligation to Customer for the Calance Line Items. 4.3 Subscription Fees stated on the Order Form are exclusive of any federal, state, or other governmental taxes, duties, fees, excises, or tariffs (“Taxes”) now or hereafter imposed on the Services. Unless Customer furnishes Procore with a valid resale or exemption certificate, Customer shall be responsible for, and if necessary shall reimburse, Procore for all such Taxes on any amounts payable by Customer hereunder, except for taxes imposed on Procore’s net income. If Procore has the legal obligation to pay or collect Taxes for which Customer is responsible under this Section, Procore will add such Taxes to the amount invoiced to Customer. The parties acknowledge that Customer is a public entity exempt from the payment of certain taxes and Customer will provide the tax exemption certificate. 4.4 Procore may audit Customer’s Construction Volume (as specified on the Order Form) to ensure compliance with this Agreement. Procore will give Customer at least ten days’ advance notice of any such audit and will conduct the audit during normal business hours in a manner that does not unreasonably interfere with Customer’s normal operations. Customer agrees to reasonably cooperate with and assist Procore upon receipt of a notice of audit. Such audit will be at Procore’s expense; however, if any such audit discloses any underpayment by Customer or usage exceeding Customer’s subscription as stated on the Order Form(s), Procore may invoice Customer and Customer shall immediately pay Procore such underpaid amount, together with interest thereon at the rate specified in section 4.1, and Customer shall also pay Procore for Procore’s expenses associated with such audit. 5. TERM/TERMINATION. 5.1 Term. This Agreement commences on the Effective Date and will remain in effect for the initial term specified on the Order Form (“Initial Term”), unless earlier terminated as provided herein. Prior to the expiration of the Initial Term, or any renewal term, this Agreement may be renewed for a term mutually agreed by the Parties as evidenced by an Order Form (each a “Renewal Term”). The Initial Term and any Renewal Term(s) are collectively referred to herein as the “Term.” Any amendments to this Agreement, as mutually agreed in writing and executed by the Parties’ authorized representatives, shall be incorporated into subsequent Order Forms after the execution of this Agreement. The Subscription Fees must be paid on or before the start of any Renewal Term in order to avoid a termination of Services. For the avoidance of doubt, the Term of this Agreement shall expire upon the termination or expiration of all Order Forms entered into pursuant to this Agreement This provision supersedes the relevant termination provisions in the Master Services Agreement dated September 3, 2020, by and between Procore Technologies, Inc. and North Central Texas Council of Governments. 535 Procore Technologies, Inc. MSA_2019_V1 www.procore.com 5.2 Termination. Either Party may terminate this Agreement upon: (1) any material breach of this Agreement by the other Party that is not cured within thirty days (or within ten days in case of failure to pay) following written notice thereof; (2) the other Party becoming insolvent or bankrupt, liquidating or being dissolved, or ceasing substantially all of its business; or (3) a breach of section 11.3. Upon expiration or termination of this Agreement or Services authorized in an Order Form, Customer shall immediately discontinue all access and use of the Services. In the event Customer terminates this Agreement for a material and uncured breach by Procore, Procore shall, as Customer’s sole and exclusive remedy, refund to Customer any prepaid but unused Subscription Fees calculated on a straight-line prorated basis for the remainder of the then-current Term. In the event that Procore terminates the Agreement for a material and uncured breach by Customer, Customer shall continue to pay any fees due to Procore pursuant to section 4.1. In addition to any other remedies available to Procore, Procore may suspend Customer’s or any Authorized Users’ access to the Services, at Procore’s sole option, in the event of any violation of this Agreement. Upon termination of this Agreement, Procore shall follow the data return procedures outlined in Exhibit A. This provision supersedes the relevant termination provisions in the Master Services Agreement dated September 3, 2020, by and between Procore Technologies, Inc. and North Central Texas Council of Governments. 6. PROPRIETARY RIGHTS. Procore will retain all worldwide right, title, and interest (including intellectual property rights) in and to the Site and the Services, the look and feel of the Site, and all copyrights in and to its content. The Site is copyrighted, trademarked, or otherwise protected, and owned or licensed by Procore. Nothing in this Agreement grants Customer or any Authorized User an express or implied right to use any Procore intellectual property except as set forth in section 3.1 above. All proprietary rights in the Services, including the Software and any aggregate usage data, traffic patterns, and Aggregate Content collected by Procore in connection with use of the Services, will be the sole and exclusive property of Procore. Procore retains the royalty-free right to use any suggestions, ideas, feedback, or other recommendations provided by Customer or Authorized Users relating to the Services. Procore may use Customer’s name and/or its logo on Procore’s website and in its marketing materials to indicate that Customer is a client of Procore. Customer hereby grants Procore the right to contact Customer and Authorized Users in connection with their use of the Services unless otherwise stated on the Order Form. All other rights not expressly granted in this Agreement are reserved by Procore. 7. WARRANTIES AND LIABILITY. 7.1 Limited Warranty. Each Party warrants that it has all necessary authority to enter into and perform its obligations under this Agreement. Procore represents and warrants that (1) the Services will perform substantially in accordance with the Documentation under normal circumstances and when used in accordance with this Agreement and applicable Documentation, and (2) the Services provided hereunder will be performed in a professional manner in accordance with prevailing industry standards. Provided that Customer notifies Procore of any breach of the foregoing warranty during the Term, Procore shall, as Customer’s sole and exclusive remedy, provide the support services set forth in Exhibit A to this Agreement. The Services may contain links to sites on the Internet that are owned and operated by third parties. Customer acknowledges and agrees that Procore is not responsible for the availability of, or the content located on or through, any such external site. 7.2 Disclaimer. The Services are provided “as is”. Except as specifically provided in this Agreement, Procore disclaims all other warranties and conditions, express or implied. Procore expressly disclaims any implied warranties, including the warranties of merchantability, fitness for a particular purpose, title and non-infringement. Procore does not warrant that the operation of the Services will be uninterrupted or error-free. Specifically, third-party content and applications are provided “as-is,” exclusive of any warranty. Procore disclaims all liability for any harm or damages caused by any third-party networking or hosting providers. 7.3 Liability. Except for Procure’s indemnification obligations in section 8.1 (Indemnity), Procore will not be liable for any special, indirect, exemplary, punitive, incidental, or consequential damages of any nature (including Customer’s loss of construction business or Customer’s failure 536 Procore Technologies, Inc. MSA_2019_V1 www.procore.com to use the Services). In any event, aside from (i) Procore’s indemnification obligations in section 8.1 (Indemnity), Procore’s total maximum liability arising out of or in any way connected to this Agreement will not exceed the amount paid to Procore by Customer during the twelve-month period immediately preceding such claim. These limitations will apply whether a claim arises under contract, tort or any other theory of liability. Some jurisdictions do not allow the exclusion of implied warranties or limitation of liability for incidental or consequential damages, which means that some of the above limitations may not apply. In these jurisdictions, Procore’s liability will be limited to the greatest extent permitted by law. The limitations set forth in this section 7 will survive and apply even if any limited remedy specified in this Agreement is found to have failed of its essential purpose. The Parties acknowledge and understand that the disclaimers, exclusions, and limitations of liability set forth herein form an essential basis of the agreement between the Parties, reflect an allocation of risk between the Parties, and that absent these disclaimers, exclusions, and limitations of liability, the terms and conditions of this Agreement would be substantially different. 8. INDEMNITY. 8.1 During the Term, Procore shall defend, indemnify, and hold harmless Customer from any loss or damages finally awarded or agreed in settlement arising from a third-party action claiming that the Services infringe any duly issued U.S. patent, copyright, or trademark or misappropriate any trade secret. In addition, if the use of the Services infringes or is enjoined, or Procore believes it is likely to infringe or be enjoined, Procore shall take one of the following actions as reasonably determined in its sole discretion : (a) procure for Customer the right to continue use of the Services as furnished; (b) modify the Services to make them non-infringing, provided that they still substantially conform to the applicable Documentation; or (c) if Procore, after using commercially reasonable efforts, is unable to accomplish the foregoing remedies, terminate this Agreement and refund to Customer any prepaid but unused Subscription Fees calculated on a straight-line prorated basis for the remainder of the then-current Term. The intellectual property indemnity provided herein does not apply to the extent the alleged infringement arises from (x) any use of the Services not in accordance with this Agreement or as specified in the Documentation, (y) any combination of the Services and third-party applications (including but not limited to Non-Procore Applications), or (z) any unauthorized modification of the Services. This section states Procore’s sole and exclusive liability and Customer’s sole remedies for any threatened or actual infringement of proprietary rights. 8.2 . The Parties expressly agree that no provision of the Contract is in any way intended to constitute a waiver by Customer (the City of Denton) of any immunities from suit or from liability that the City of Denton may have by operation of law. 9. CONFIDENTIALITY. To the extent authorized by the laws of the State of Texas, the Parties and Authorized Users shall, during and after the existence of this Agreement, hold in strictest confidence and will not use for any purpose unrelated to its performance of this Agreement or disclose to any third party, any Confidential Information of the other Party. The term “Confidential Information” means all non-public information that the other Party designates as being confidential, or if unmarked and/or disclosed orally is identified as Confidential within a reasonable period of time (email sufficient). Confidential Information includes, but is not limited to, information concerning business methods, pricing, business plans, new product launches, new product development, customer and vendor information, internal policies and procedures, other financial information, technical information and design, and the terms and conditions of this Agreement. Each Party shall not disclose the other Party’s Confidential Information without the prior written consent of such other Party, except to its employees, contractors, or agents who have a specific need to know such information and are under a written obligation of confidentiality at least as restrictive as that contained in this section. Information will not be deemed confidential if it (a) was known to the receiving Party and was acquired through proper methods, prior to its receipt from the disclosing Party, as evidenced by written records of the receiving Party; (b) is now or later becomes (through no act or failure on the part of the receiving Party) generally known through no breach of this Agreement by the receiving Party; (c) is supplied to the receiving Party by a third party that is free to make that disclosure without restriction; or (d) is 537 Procore Technologies, Inc. MSA_2019_V1 www.procore.com independently developed by the receiving Party without use of or reference to any Confidential Information provided by the disclosing Party. The restrictions on disclosure imposed by this section do not apply to information that is required by law or order of a court, administrative agency, or other governmental body to be disclosed by the receiving Party, provided that in each such case the receiving Party provides the disclosing Party with prompt written notice of such order or requirement and reasonably assists the disclosing Party, at the disclosing Party’s expense, in seeking a protective order or other appropriate relief. Upon termination of this Agreement, each Party shall promptly cease all further use of Confidential Information, return to the other Party all physical materials containing Confidential Information, whether the materials were originally provided by the disclosing Party or copied or otherwise prepared by the receiving Party, and erase or otherwise destroy any Confidential Information kept by either Party in electronic or other non-physical form. The Parties acknowledge that the receiving Party will not be required to return to the disclosing Party or destroy those copies of Confidential Information residing on the receiving Party’s backup or disaster-recovery systems, or which must be maintained for regulatory or policy purposes; provided that such Party continues to abide by its obligations under this section. Procore will be deemed to satisfy its obligations to return Confidential Information if it complies with its obligations with respect to the export or availability of Customer Content in Exhibit A. Termination or expiration of this Agreement will not affect each Party’s continuing obligations under this section. 10. PRIVACY. The Procore “Privacy Policy” is located at http://www.procore.com/legal/privacy and may be amended from time to time. Any updates to the Privacy Policy will be posted to the Site and will be effective immediately upon posting to the Site. Procore will provide a notification to Customer, via the Site, of updates to the Procore Privacy Policy. It is Customer’s responsibility to review updates to the Privacy Policy to ensure that Customer acknowledges that Procore processes Customer Data in accordance with the Procore Privacy Policy. If there is any conflict between the Privacy Policy and this Agreement, this Agreement will govern. 11. GENERAL. 11.1 Waiver/Amendment. This Agreement may not be modified except by a written instrument signed by both Parties. Failure by either Party to enforce any provision of this Agreement will not be deemed a waiver of future enforcement of that or any other provision. 11.2 Assignment. Neither Party may assign, delegate, or otherwise transfer this Agreement, in whole or in part, voluntarily, involuntarily, by operation of law, or otherwise without the other Party’s prior written consent; except that Procore may assign, delegate, or otherwise transfer this Agreement without such consent to an affiliate or in connection with any merger, consolidation, reorganization, amalgamation, sale of assets, or any other similar transaction. Any attempt to assign, delegate, or otherwise transfer this Agreement other than in accordance with this provision will be void. 11.3 Compliance with Laws. Both Parties shall comply with all applicable local, state, national, and foreign laws, rules, and regulations including all applicable export and import laws and regulations in connection with their performance, access, and/or use of the Services under this Agreement. Customer represents and warrants that Customer, and its directors, officers, employees, and agents, have not taken, and during the term of this Agreement, will not take any action that would constitute a violation of the Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010, or any other anti-bribery or anti-corruption legislation of the United States, or any other jurisdiction in which Customer or Procore conducts business. 11.4 Data Controller; Export. Customer shall comply with all legal duties applicable to Customer, including obligations as data controller by virtue of Customer’s role in determining Authorized Users. Specifically, Customer shall provide relevant persons and/or participants with all information Customer is required by law to provide, and, if necessary, shall obtain the consent of these persons. The Services and derivatives thereof may be subject to export laws and regulations of the United States and other jurisdictions. Customer represents that it is not named on any U.S. government denied-party list. Customer shall not permit Authorized Users to access or use the Services in a U.S.-embargoed country (currently Cuba, Iran, North Korea, Sudan, Syria, or Crimea) or in violation of any U.S. export law or regulation. 538 Procore Technologies, Inc. MSA_2019_V1 www.procore.com 11.5 Governing Law; Attorneys’ Fees. The rights of the Parties hereunder will be governed by the laws of the State of Delaware, without regard to its principles of conflicts of law. Any suits brought hereunder must be brought in the federal or state courts serving County of New Castle, Delaware . In the event of any claim, action, or judicial proceeding arising under this Agreement, the prevailing Party will be entitled to recover reasonable attorneys’ fees and expenses incurred in resolving such claim, action, or judicial proceeding. 11.6 Severability; Notice. If any provision of this Agreement is held by a court of competent jurisdiction to be contrary to law, the remaining provisions of this Agreement will remain in full force. Any notice, consent, or other communication hereunder must be in writing, and must be given personally, or sent via overnight delivery or via email with confirmation of receipt, to either Party at its respective address set forth in the Order Form (or such other address as provided by that Party), or by Procore to Customer via notification from the Services. Notices will be deemed given when delivered. 11.7 Independent Contractors. The relationship of the Parties is that of independent contractors and nothing contained in this Agreement will be construed to make either Party an agent, partner, joint venturer, or representative of the other for any purpose. This Agreement is for the sole benefit of the Parties and their respective permitted successors and assigns, and nothing herein, express or implied, is intended to or will confer upon any other person or entity any legal or equitable right, benefit, or remedy under or by reason of this Agreement. 11.8 Force Majeure. Nonperformance by either Party (other than Customer’s payment obligations) will be excused to the extent failure to perform is beyond the reasonable control of the non-performing Party. 11.9 Entire Agreement; Survival. This Agreement, together with any URLs contained herein, any exhibits, and the Order Form(s), constitutes the entire agreement between the Parties with respect to the subject matter hereof and replaces any prior understandings, written or oral. Further, under no circumstances will the provisions of any document issued by Customer (including, but not limited to, any request for quotes or proposals, purchase orders, non-disclosure agreements, Customer exhibits to this Agreement, and vendor forms or registrations with terms that conflict with this Agreement) be deemed to modify, alter, or expand the rights, duties, or obligations of the Parties under this Agreement, regardless of any failure of Procore to object to such terms, provisions, or conditions. If there is any conflict between the terms of this Agreement and the Order Form, the Order Form will prevail. In addition to any rights that accrued prior to termination, the provisions of sections 3.7, 4, and 6 through 11 will survive any termination of this Agreement. 539 Procore Technologies, Inc. MSA_2019_V1 www.procore.com EXHIBIT A SUPPORT AND MAINTENANCE 1. Service-Level Agreement. Procore has a service-level objective for the Services of 99.9% availability, 24 hours a day, 7 days a week, 365 days a year. Downtime does not include (i) problems caused by factors outside of Procore’s reasonable control, or (ii) unavailability of the Services during scheduled maintenance. 2. Support. During the Term, Customer and Authorized Users will have access to technical support via telephone, online chat, email, or self-paced online tutorials. Support hours will be 24 hours Monday through Thursday, 12:00 a.m. to 9:00 p.m. Pacific Time (“PT”) Friday, and 7:00 a.m. to 6:00 p.m. PT Saturday and Sunday, excluding holidays. Support does not include training sessions on the features and functionality of the Services (implementation) or training in computer skills considered prerequisite to an individual’s ability to use personal computers, the Internet/World-Wide Web, Non-Procore Applications, Customer’s hardware, and online software. Upon Procore’s receipt of a support request, Procore will use commercially reasonable efforts to answer questions and provide standard error corrections to known problems. 3. Data Backup and Return. During the Term, Procore shall make commercially reasonable efforts to protect the security of Customer Content/Customer Data, as set forth below, and shall complete daily data backups that include Customer’s data in an archive format that is kept physically separate from the Procore database and web server hardware. The Services do not replace the need for Customer to maintain regular data backups or redundant data archives. Procore contracts with a third-party data center provider to provide technology services such as network connectivity to the Internet for the servers running the Services. Personnel access to the data center used by Procore for these Services is restricted, and all entrances and common areas are monitored 24x7 via closed- circuit cameras. Public access to the data center is forbidden. Fire-suppression systems are located in the data center, and power systems in the data center are designed to run uninterrupted even in the event of a total power outage. All servers are supplied with Uninterruptible Power Supply (“UPS”) power sources that will continue to run if utility power fails. The UPS power subsystem is fully redundant, with instantaneous failover in case the primary UPS fails. In the event of an extended power outage, Procore relies on onsite diesel generators. Generators are regularly tested to ensure functionality in the event of an emergency. For thirty days following the termination of this Agreement, and provided that there has been no material breach of this Agreement by Customer, Procore will make Customer Content/Customer Data available to Customer, at Customer’s request, via read-only access to the Service, solely for purpose of allowing Customer to retrieve Customer Content/Customer Data. Customer allows Procore after such thirty-day period to delete all Customer Content/Customer Data. 4. Maintenance. 4.1 Unplanned Outages. If a system failure occurs that creates an outage of the Services, Procore will utilize commercially reasonable means to end the outage as soon as possible. Outages due to the Internet, hosting providers, and/or Customer or Authorized User systems are outside Procore’s control and, in such event, Procore may assist the Customer or Authorized User in the diagnosis but may not be able to resolve the problem. 4.2 Preventative Maintenance. From time to time, Procore or its hosting providers will perform preventative maintenance, such as updating servers and routers with security patches, and software upgrades. 540 Procore Technologies, Inc. MSA_2019_V1 www.procore.com Procore will provide notice prior to any interruption in the Services for scheduled maintenance and will keep any resulting downtime reasonable. Procore will use reasonable efforts to perform such maintenance during non- peak hours. 541 Calance, 888 S. Disneyland Drive, Anaheim CA 92802 Page 1 of 12 Exhibit A Product Summary 542 Calance, 888 S. Disneyland Drive, Anaheim CA 92802 Page 2 of 12 Product Summary Integration: Procore + JDE The following table lists the integration points available with this subscription. Direction* Global Integrations Vendor <<< Address Book Project <<< Job Project Level Integrations Cost Codes >>> Chart of Accounts Original Budget <<< Budget Account Balances Budget Modifications <<< Budget Account Balances Project Costs (AP) Commitments (Subcontracts & Purchase Orders) >>> Purchase Orders Commitment Change Orders >>> PO Changes Payment Requisitions >>> AP Vouchers Payments <<< AP Payments Direct Cost Invoices <<< Non-committed AP Costs Direct Cost Payroll <<< Payroll (aggregated) Direct Cost Expenses <<< Miscellaneous GL Costs *Note, default direction indicated. Most integrations can be in reverse direction if required. Integration Access Requirements Procore User Account JD Edwards Database Account with read access JD Edwards User Account with ability to access Master Business Functions (MBFs) 543 Calance, 888 S. Disneyland Drive, Anaheim CA 92802 Page 3 of 12 Exhibit B Implementation & Ongoing Support 544 Calance, 888 S. Disneyland Drive, Anaheim CA 92802 Page 4 of 12 Implementation & Ongoing Support Services Integration: Procore + JDE Implementation Services Initial Platform Setup JDE environments. During the initial setup phase Calance will work with the Customer to establish the required connectivity, including activating required APIs, providing Calance with user accounts, and installation of Calance Dimension Integration Data Agent. Integration Configuration & Testing As outlined in Exhibit A Product Summary, the solution contains a number of pre-built integrations for moving data between Procore and JDE. Each pre-built integration has configuration options. Calance will work with the Customer to configure the pre-built Integ JDE and Procore business needs. Customer will make available technical and functional resources as needed to complete configuration activities, typically completed in working sessions and configuration workbooks. Configuration activities are typically completed in 3 months, once the initial technology setup tasks (e.g. install of Data Agent) are completed. An implementation plan will be jointly created by Calance and Customer once the Subscription Agreement is in place. Customer will test the Integrations and provide Calance with feedback during this phase. The length of time required to complete testing activities is highly dependent on the approach and resources the Customer applies to the implementation effort. 545 Calance, 888 S. Disneyland Drive, Anaheim CA 92802 Page 5 of 12 Ongoing Support Services The Integration Platform is fully managed and supported by Calance. The annual subscription covers the ongoing operation and maintenance of the core platform product as outlined in the Product Summary (Exhibit A). To access support, Customer will please use the following: Email: DimensionSupport@calance.com Phone: 657.312.3555 Incident Management Response Times for Customer Reported Incidents Our response times are based on the criticality of the incident, as described in the levels below: P1 - Critical Outage of the Dimension Integration service Support Hours: 24x7 Initial Response Time: within 30 minutes Target Resolution: within 4 hours Status Updates: every hour P2 - High Dimension is available, but one or more significant integration points is failing. Support Hours: M-F 6am-5pm PST Initial Response Time: within 2 hours Target Resolution: within 1 business day Status Updates: every two hours P3 Medium Issue that does not prevent integrations from performing as generally specified. For example, a mapping or validation which is not performing as expected. Support Hours: M-F 6am-5pm PST Initial Response Time: within 4 hours Target Resolution: within 5 business days Status Update: every two days P4 Low Item that is an enhancement request or very minor issue. Support Hours: M-F 6am-5pm PST Initial Response Time: within 2 days Target Resolution: TBD Status Update: TBD 546 Calance, 888 S. Disneyland Drive, Anaheim CA 92802 Page 6 of 12 Exhibit C Terms & Conditions 547 Calance, 888 S. Disneyland Drive, Anaheim CA 92802 Page 7 of 12 DIMENSION INTEGRATION PLATFORM SUBSCRIPTION TERMS AND CONDITIONS in the Integration Platform Order(s) and signed by the parties. The Subscription Terms and Conditions and all Subscription and Orders (collectively referred to as the related Integration Platform. In the event of a conflict between these Terms and Conditions and an Order, the terms of the Order shall prevail. 1. Usage Rights. 1.1 During the Subscription Term set forth in an Order, Calance grants to Customer a nontransferable, nonexclusive, worldwide right to permit those individuals authorized by Customer or on Customer's behalf, and who are Customer's employees, agents or contractors ("Users"), to access and use the Integration Platform subject to the terms of the Agreement. 1.2 Users will have remote access via the internet to the Administration, Reporting and Monitoring and Customer shall at all times ensure that its use does not exceed its Usage Rights. 1.3 Customer shall be solely responsible for obtaining and maintaining appropriate equipment and ancillary software needed to connect to, access or otherwise utilize the Integration Platform, including, without limitation, computers, computer operating system and web browser (collectively, "Equipment"). Customer shall ensure that Equipment complies with all configurations and specifications as required by Calance. 1.4 Customer will be provided a Data Agent which wi ERP and the Calance Integration Platform. 1.5 The Platform may automatically download and install updates from time to time on the Data Agent. These updates are designed to improve and enhance the Platform and may take the form of bug fixes, enhanced functions, new platform modules and completely new versions. Customer agrees to receive such updates (and permit Calance to deliver these to Customer) as part of 2.Usage Restrictions and Representations. 2.1 Customer shall not, directly or indirectly: (i)reverse engineer, decompile, disassemble or otherwise attempt to discover the source code, object code or underlying structure, ideas or algorithms of the Integration Platform or any software, documentation or data related to or provided with the Integration Platform; (ii)modify, translate, or create derivative works based on the Integration Platform; or copy (except for archival purposes), rent, lease, distribute, pledge, assign, or otherwise transfer or encumber rights to the Integration Platform; (iii)use or access the Integration Platform to build, support, and/or assist a third party in building or supporting, products or Integration Platform competitive to Calance; (iv)use the Integration Platform for purposes other than its own internal business operations. 2.2 Customer shall not knowingly or willfully use the Integration Platform in any manner that could damage, disable, overburden, impair or otherwise interfere with Calance's provision of the Integration Platform. Customer shall be responsible for maintaining the security of the Equipment and Customer's account access passwords. Customer and Calance agree to make every reasonable effort to prevent unauthorized third parties from accessing the Integration Platform. Customer shall be liable for all acts and omissions of its Users. 548 Calance, 888 S. Disneyland Drive, Anaheim CA 92802 Page 8 of 12 2.3 Calance may immediately suspend Customer's password, account, and access to the Integration Platform if (i) Customer fails to make payment due within ten business days after Calance has provided Customer with notice of such failure; or (ii) Customer violates Section 1.1, 2, or 8 of these Terms and Conditions. Any suspension by Calance of the Integration Platform for such violations shall not relieve Customer of its payment obligations under the Agreement. 3.Ownership. 3.1 Calance owns or has rights to all intellectual property rights in and to the Integration Platform (including all derivatives or improvements thereof). All suggestions, enhancements requests, feedback, recommendations or other input provided by Customer or any other party relating to the Integration Platform shall be owned by Calance, and Customer hereby does and shall make all assignments and take all reasonable acts necessary to accomplish the foregoing ownership. Any rights not expressly granted herein are reserved by Calance. 3.2 Customer owns any data, information or material originated by Customer that Customer submits, collects or provides in the course of using the Integration Platform ("Customer Data"). Calance has no ownership rights in or to Customer Data. Customer shall be solely responsible for the accuracy, quality, content and legality of Customer Data, the means by which Customer Data is acquired and the transfer of Customer Data outside of the Calance Integration Platform. Customer Data shall be deemed to be Customer Confidential Information pursuant to Section 8 below. 4.Invoicing and Payment. 4.1 Subscription Order From. Calance retains the right to amend this rate. Calance will provide Customer with a thirty (30) day advance notice in writing or by e-mail of the rate amendment. New Subscription rates will be applicable upon renewal of Subscriptions. 4.2 Procore shall pay all fees set forth in an Order. All fees are non-cancelable and nonrefundable, except as expressly specified in Section 6.2. Procore shall pay all fees in U.S. Dollars. Calance hereby agrees that Procore will make payments to Calance and that the City of Denton is not liable for such payment. 4.3 All amounts invoiced hereunder are due and payable as specified in the Order. Unpaid invoices that are not the subject of a written good faith dispute are subject to a finance charge of 1.5% per month on any outstanding balance, or the maximum permitted by law, whichever is lower, plus all reasonable expenses of collection. 4.4 Calance acknowledges and agrees that the awarding or continuation of this contract is solely from funds appropriated and available for this contract. The absence of appropriated or other lawfully available funds shall render the contract null and void to the extent funds are not appropriated or available and any deliverables delivered but unpaid shall be returned to the Seller. Customer will not incur a debt or obligation to pay Calance any amounts Customer does not have the current funds available to pay. 5.Term and Termination. 5.1 Agreement shall commence as of the date set forth in the Order and, unless earlier terminated as set forth below, shall remain in effect through the end of the Subscription Term. 5.2 In the event Customer terminates its Agreement with Procore, Customer may terminate its Agreement with Calance upon 10 day written notice or as of the expiration of the applicable Order, if Customer does not elect to renew. 5.3 In the event of a material breach by either party, the non-breaching party shall have the right to terminate the applicable Order for cause if such breach has not been cured within 30 days of written notice from the non-breaching party specifying the breach in detail. If Calance undisputed fees set forth on such Order are immediately due and payable. 5.4 Integration Platform covered by that Order shall terminate. Customer acknowledges and agrees that Calance does not retain Customer Data. 549 Calance, 888 S. Disneyland Drive, Anaheim CA 92802 Page 9 of 12 5.5 All sections of the Agreement which by their nature should survive termination will survive, including without limitation, accrued rights to payment, use restrictions, indemnity obligations, confidentiality obligations, warranty disclaimers, and limitations of liability. This Article supersedes the relevant termination provisions in the Master Services Agreement dated September 3, 2020, by and between Procore Technologies, Inc. and North Central Texas Council of Governments. 6.Representations, Warranties and Indemnities. 6.1 Each party represents and warrants to the other party that it has the power and authority to enter into the Agreement. Calance warrants to Customer that it will use best efforts to (a) perform the Integration Platform substantially in accordance with its documentation under normal use; and (b) provide the Integration Platform in a manner consistent with generally accepted industry standards. Customer must notify Calance of any warranty deficiencies within 30 days from performance of the relevant Integration Platform in order to receive warranty remedies. 6.2 repair/re-performance of the deficient Integration Platform. If Calance cannot repair/re-perform such deficient Integration Platform as warranted, Customer shall be entitled to a subscription fee refund on a pro rata basis for the remainder of the Subscription Term, and such refund shall be 6.3 The Integration Platform may be temporarily unavailable for scheduled maintenance or for control, but Calance shall use reasonable efforts to provide advance notice in writing or by e-mail of any scheduled unavailability of the Integration Platform. 6.4 Calance shall defend, indemnify and hold Customer harmless against any loss, damage or r brought against Customer by a third party alleging that the use of the Integration Platform as contemplated hereunder infringes the intellectual property rights of a third party; provided, that Customer (a) promptly gives written notice of the Claim to Calance; (b) gives Calance sole control of the defense and settlement of the Claim (provided that Calance may not settle or defend any Claim unless it unconditionally releases Customer of all liability); l reasonable assistance. 6.5 The Parties expressly agree that no provision of the Contract is in any way intended to constitute a waiver by Customer (the City of Denton) of any immunities from suit or from liability that the City of Denton may have by operation of law. 6.6 Customer acknowledges that the transfer of data over communications facilities, including the internet, may be subject to limitations, delays, and other problems inherent in the use of such communications facilities and that Calance is not responsible for any delays, delivery failures, or other damage resulting from such problems. 6.7 In the event Calance software is breached, Calance warrants that it will notify Customer within 72 hours of becoming aware that their service has been breached or compromised. 6.8 EXCEPT AS EXPRESSLY PROVIDED HEREIN, NEITHER PARTY MAKES ANY WARRANTY OF ANY KIND, WHETHER EXPRESSED, IMPLIED, STATUTORY OR OTHERWISE AND EACH PARTY DISCLAIMS ALL IMPLIED WARRANTIES TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW. EXCEPT WHERE EXPRESSLY PROVIDED OTHERWISE BY CALANCE, THE INTEGRATION PLATFORM ARE PROVIDED TO 7.Limitation of Liability. 7.1 Customer assumes sole responsibility for results obtained from the use of the Subscription, the Documentation by the Customer and for conclusions drawn from such use. Calance shall have no liability for any damage caused by errors or omissions in any information, instructions or scripts provided to Calance by the Customer in connection with the Integration Platform, or any actions 550 Calance, 888 S. Disneyland Drive, Anaheim CA 92802 Page 10 of 12 7.2 r related to this Agreement will exceed $14,000.00. 8.Confidential Information. ss credentials for Accounts. 8.1 To the extent authorized by the laws of the State of Texas, the Receiving Party agrees: (i)to take reasonable precautions to protect such Confidential Information; and (ii)not to use (except as expressly permitted in Section 9 below) or divulge to any third person any such Confidential Information. 8.2 The Disclosing Party agrees: (i)that the foregoing shall not apply with respect to Confidential Information that the Receiving Party can document, is or becomes generally available to the public; was in its possession or known by the receiving party prior to receipt from the Disclosing Party; was rightfully disclosed to it by a third party; was independently developed without use of any Confidential Information of the Disclosing Party; or is required by law. 9.Statistical Information. Notwithstanding anything else in the Agreement or otherwise, Calance may formance information related to the provision and operation of the Integration Platform, and may make such information publicly available, provided that such information does not incorporate Customer Data and/or identify . Calance retains all intellectual property rights in such information. 10.Notices. -mail address on record or by written communication sent by first class mail or pre-paid p record. If Customer has a dispute with Calance, wishes to provide a notice under the Agreement, or becomes subject to insolvency or other similar legal proceedings, Customer shall promptly send written notice to Calance at 7101 Village Drive, Buena Park, CA 90621. 11.Force Majeure. Neither party shall be responsible for failure or delay of performance if caused by: an act of war, hostility, or sabotage; act of God; electrical, internet, or telecommunication outage that is not caused by the obligated party; government restrictions (including the denial or cancellation of any export or other license); or other event outside the reasonable control of the obligated party. Each party will use reasonable efforts to mitigate the effect of a force majeure event. If such event continues for more than 20 days, either party may cancel unperformed Integration Platform upon written notice. This section does not excuse either party of its obligations to take reasonable steps to follow its normal 12.General Provisions. 12.1 Any action, Claim, or dispute related to the Agreement will be governed by Texas law, excluding its conflicts of law provisions, and controlling U.S. federal law. The failure of either party to enforce any right or provision in the Agreement shall not constitute a waiver of such right or provision unless acknowledged and agreed to by such party in writing.. 12.2 Integration Platform, and supersede any prior or contemporaneous, conflicting or additional communications. The exchange of a fully executed Order by fax, email or electronic signature shall be sufficient to bind the parties to the Terms and Conditions of the Agreement and such Order. The Agreement may be amended only by written agreement signed by both parties. If any provision of the Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then such provision(s) shall be construed to reflect the intentions of the invalid or unenforceable provision(s), with all other provisions remaining in full force and effect. 551 Calance, 888 S. Disneyland Drive, Anaheim CA 92802 Page 11 of 12 12.3 No joint venture, partnership, employment, or agency relationship exists between Calance and Customer as a result of the Agreement or use of the Integration Platform. Neither party may assign the Agreement without the prior written approval of the other, such approval not to be unreasonably withheld or delayed, provided that such approval shall not be required in connection with a merger or acquisition of all or substantially all of the assets of the assigning company. Any purported assignment in violation of this Section shall be void. 12.4 In the event the specific services contained herein are no longer offered by Calance, Customer will be provided with a Limited Use Agreement for the purpose of continuing to operate the functionality of the services specific to this Agreement, and Calance will provide the code products, configuration settings, and instructions required to enable the Customer to fully operate the software solution on its own and/or with the support of its agents. The Limited Use Agreement will not transfer ownership of, nor will it provide the right to distribute, sell or reproduce the Integration Platform. The Limited Use Agreement will be provided at no additional cost to the Customer. 552 Calance, 888 S. Disneyland Drive, Anaheim CA 92802 Page 12 of 12 Acceptance Sample Company Signature: ______________________________ Name: ______________________________ Title: ______________________________ Date: ______________________________ 553 Exhibit See Name of local government officer about whom the information in this section is being disclosed. This section, (item 3 including subparts A, B, C & D), must be completed for each officer with whom the vendor has an employment or other business relationship as defined by Section 176.001(1-a), Local Government Code. Attach additional pages to this Form CIQ as necessary. A.Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the vendor? Yes No B.Is the vendor receiving or likely to receive taxable income, other than investment income, from or at the direction of the local government officer named in this section AND the taxable income is not received from the local governmental entity? Yes No C.Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer serves as an officer or director, or holds an ownership of one percent or more? Yes No D. Describe each employment or business and family relationship with the local government officer named in this section. 4 5 Signature of vendor doing business with the governmental entity Date 554 555 556 557 558 559 560 561 562 563 564 565 566 567 568 569 570 571 572 573 574 575 576 577 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-174,Version:1 AGENDA CAPTION Consider adoption of an ordinance of the City of Denton,a Texas home-rule municipal corporation,authorizing the City Manager,or his designee,to execute a contract with Parker Power Systems,Inc.,to provide maintenance,inspection,and repair services on generators for various City of Denton departments;providing for the expenditure of funds therefor;and providing an effective date (RFP 7534 -awarded to Parker Power Systems,Inc.,for three (3)years,with the option for two (2)additional one (1)year extensions,in the total five (5) year not-to-exceed amount of $750,000.00). City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™578 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement & Compliance ACM: David Gaines DATE: February 9, 2021 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager, or his designee, to execute a contract with Parker Power Systems, Inc., to provide maintenance, inspection, and repair services on generators for various City of Denton departments; providing for the expenditure of funds therefor; and providing an effective date (RFP 7534 - awarded to Parker Power Systems, Inc., for three (3) years, with the option for two (2) additional one (1) year extensions, in the total five (5) year not-to-exceed amount of $750,000.00). INFORMATION/BACKGROUND In the event of power failure, generators provide temporary power to maintain critical City operations without interruption. City operations with generators include Public Safety Dispatch, various servers for Technology Services, lift stations for Wastewater, fuel distribution for Fleet Services, and Denton Municipal Electric. The proposed contract will provide maintenance, inspection, and repair services for approximately thirty (30) generators ranging from 11.5KW to 1500KW in power output. Generators will receive preventative maintenance services including weekly testing to ensure functionality during a random power failure. Based on a historical spend and future projections, the recommended NTE of this contract is $750,000 for the potential five (5) year contract. Requests for Proposals was sent to 353 prospective suppliers of this item. In addition, specifications were placed on the Materials Management website for prospective suppliers to download and advertised in the local newspaper. Six (6) proposals were received, references were checked, and proposals evaluated based upon published criteria including delivery, compliance with specifications, probable performance, and price. Based upon this evaluation, Parker Power System, Inc. was ranked the highest and determined to be the best value for the City. NIGP Code Used for Solicitation: 285 - Electrical Equipment & Supplies (Except Cable & Wire) & 690 - Power Generation Equipment, Accessories, & Supplies Notifications sent for Solicitation in Ion Wave: 353 Number of Suppliers that viewed Solicitation in Ion Wave: 5 HUB-Historically Underutilized Business Invitations sent out: 1 SBE-Small Business Enterprise Invitations sent out: 6 Responses from Solicitation: 6 City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 579 Below is the information Parker Power provided regarding the wages they pay their employees who will be assigned to the City’s contract. Position Description Number of Assigned Employees Hourly Rate of Assigned Employees Generator Technician 3 assigned technicians $25.00 to $35.00 an hour RECOMMENDATION Award a contract with Parker Power System Inc., to provide maintenance, inspection, and repair services on generators for various City of Denton departments, in a three (3) year, with the option for two (2) additional one (1) year extensions, in the total five (5) year not-to-exceed amount of $750,000. PRINCIPAL PLACE OF BUSINESS Parker Power System, Inc. Carrollton, TX ESTIMATED SCHEDULE OF PROJECT This is an initial three (3) year contract with options to extend the contract for two (2) additional one (1) year periods, with all terms and conditions remaining the same. FISCAL INFORMATION These services will be funded through the using department’s operating budget on an as-needed basis. The City will only pay for services rendered and is not obligated to pay the full contract amount unless needed. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Pricing Evaluation Exhibit 3: Ordinance and Contract Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Scott Gray, 940-349-7744. Legal point of contact: Marcella Lunn at 940-349-8333. 580 Line #Description QTY UOM Unit Extended Unit Extended Unit Extended Unit Extended Unit Extended Unit Extended 1 2 3 Preventive Maintenance 36 EA $165.00 $5,940.00 $200.00 $7,200.00 $200.00 $7,200.00 $260.00 $9,360.00 $750.00 $27,000.00 $240.00 $8,640.00 4 2 hour Load Bank Test 36 EA $500.00 $18,000.00 $500.00 $18,000.00 $720.00 $25,920.00 $520.00 $18,720.00 $927.50 $33,390.00 $420.00 $15,120.00 5 4 hour Load Bank Test 6 EA $700.00 $4,200.00 $1,000.00 $6,000.00 $870.00 $5,220.00 $755.00 $4,530.00 $1,177.50 $7,065.00 $7,189.00 $43,134.00 6 7 Technician Regular Working Hours (7:00 AM - 5:00 PM / MONDAY THROUGH FRIDAY):2,000 HR $100.00 $200,000.00 $105.00 $210,000.00 $80.00 $160,000.00 $75.00 $150,000.00 $90.00 $180,000.00 $90.00 $180,000.00 8 Assistant (if applicable)2,000 HR $0.00 $0.00 $0.00 $0.00 $30.00 $60,000.00 $75.00 $150,000.00 $90.00 $180,000.00 $75.00 $150,000.00 9 Technician - After Regular Working Hours and Holidays 1,000 HR $150.00 $150,000.00 $162.50 $162,500.00 $120.00 $120,000.00 $112.50 $112,500.00 $90.00 $90,000.00 $135.00 $135,000.00 10 Assistant (if applicable)1,000 HR $0.00 $0.00 $0.00 $0.00 $30.00 $30,000.00 $112.50 $112,500.00 $90.00 $90,000.00 $112.50 $112,500.00 11 12 Technician Regular Working Hours (7:00 AM - 5:00 PM / MONDAY THROUGH FRIDAY):500 HR $100.00 $50,000.00 $105.00 $52,500.00 $80.00 $40,000.00 $75.00 $37,500.00 $90.00 $45,000.00 $90.00 $45,000.00 13 Assistant (if applicable)500 HR $0.00 $0.00 $0.00 $0.00 $30.00 $15,000.00 $75.00 $37,500.00 $90.00 $45,000.00 $75.00 $37,500.00 14 Technician - After Regular Working Hours and Holidays 500 HR $150.00 $75,000.00 $162.50 $81,250.00 $120.00 $60,000.00 $112.50 $56,250.00 $90.00 $45,000.00 $135.00 $67,500.00 15 Assistant (if applicable)500 HR $0.00 $0.00 $0.00 $0.00 $30.00 $15,000.00 $112.50 $56,250.00 $90.00 $45,000.00 $112.50 $56,250.00 16 17 Generator and parts material mark-up from wholesale rates (%) with back-up documentation (if requested)1 18 19 Subcontractor material mark-up from wholesale rates (%) with back-up documentation (if requested)1 20 20.1 Building: Airport Tower/Runway Address: 5000 Airport Rd. Brand: Generac Model #: 13195230100 Phase: 3 Voltage: 120/208 KW: 150 KVA: 188 Fuel Type: Diesel 1 EA $717.72 $515.00 $600.00 $600.00 $400.00 $610.00 20.2 Building: City Hall East Address: 601 E. Hickory St. Brand: Onan Model #: 125DGEA Phase: 3 Voltage: 277/480 KW: 125 KVA: 156 Fuel Type: Diesel 1 EA $651.08 $495.00 $600.00 $745.00 $400.00 $554.00 20.3 Building: City Hall East Address: 601 E. Hickory St. Brand: Onan Model #: DGFA-3375326 Phase: 3 Voltage: 277/480 KW: 150 KVA: 187.5 Fuel Type: Diesel 1 EA $573.66 $515.00 $600.00 $740.00 $400.00 $610.00 20.4 Building: City Hall East Address: 601 E. Hickory St. Brand: Cummins Model #: DSGAB-1423895 Phase: 3 Voltage: 277/480 KW: 125 KVA: 156.2 Fuel Type: Diesel 1 EA $694.25 $495.00 $600.00 $740.00 $400.00 $610.00 20.5 Building: DME - Admin Address: 1659 Spencer Rd. Brand: Kohler Model #: 8OREOZJF Phase: 1 Voltage: 240 KW: 63 KVA: 63 Fuel Type: Diesel 1 EA $523.46 $425.00 $540.00 $735.00 $300.00 $480.00 20.6 Building: DME - Engso Address: 1685 Spencer Rd. Brand: Cummins Model #: DFEH-7499963 Phase: 3 Voltage: 120/208 KW: 400 KVA: 500 Fuel Type: Diesel 1 EA $1,558.48 $950.00 $1,100.00 $1,460.00 $600.00 $925.00 20.7 Building: DME - Ops Address: 1701-C Spencer Rd. Brand: Onan Model #: 11.5 DNAD Phase: 1 Voltage: 120/240 KW: 11.5 KVA: 11.5 Fuel Type: Diesel 1 EA $417.42 $365.00 $450.00 $580.00 $300.00 $393.00 20.8 Building: DEM - DEC Address: 8161 Jim Crystal Rd. Brand: Caterpillar Model #: 500 Phase: 3 Voltage: 480 KW: 500 KVA: 625 Fuel Type: Diesel 1 EA No Bid $1,265.00 $1,075.00 $1,100.00 $1,265.00 $600.00 $1,025.00 20.9 Building: Facilities Mgmt Address: 869 S. Woodrow Brand: Generac Model #: 10802190100 Phase: 3 Voltage: 120 / 208 KW: 60 KVA: 75 Fuel Type: Diesel 1 EA $417.18 $440.00 $500.00 $745.00 $300.00 $480.00 20.10 Building: Facilities Mgmt Address: 869 S. Woodrow Brand: Whisperwatt 60 Model #: DH-60A-I (DCA-60ssA-I) Phase: 3 / 1 Voltage: 240 / 480 120 / 240 KW: 20 KVA: 60 Fuel Type: Diesel 1 EA $601.33 $345.00 $500.00 $580.00 $300.00 $393.00 20.11 Building: Fire #1 Address: 332 E. Hickory St. Brand: Generac Model #: 2702070100 Phase: 3 Voltage: 277/480 KW: 200 KVA: 250 Fuel Type: Diesel 1 EA $664.06 $550.00 $880.00 $840.00 $500.00 $670.00 20.12 Building: Fire #2 Address: 110 Mockingbird Ln. Brand: Cummins Model #: DQDAB-1600381 Phase: 3 Voltage: 277/480 KW: 275 KVA: 343.7 Fuel Type: Diesel 1 EA $1,099.54 $745.00 $850.00 $1,085.00 $500.00 $740.00 20.13 Building: Fire #3 - New Address: 1401 Underwood Brand: Cummins/Onan Model #: C200 D6D Phase: 3 Voltage: 120/208 KW: 200 KVA: 250 Fuel Type: Diesel 1 EA $577.57 $550.00 $850.00 $860.00 $500.00 $670.00 20.14 Building: Fire #4 Address: 2116 E. Sherman Dr. Brand: Cummins Model #: SD0200GG1787D1SHPLY3 Phase: 3 Voltage: 120/208 KW: 200 KVA: 250 Fuel Type: Diesel 1 EA $927.53 $550.00 $850.00 $1,165.00 $500.00 $670.00 20.15 Building: Fire #5 Address: 2230 W. Windsor Dr. Brand: Generac Model #: 14009300100 Phase: 1 Voltage: 120/240 KW: 25 KVA: 25 Fuel Type: Diesel 1 EA $392.16 $345.00 $480.00 $600.00 $300.00 $393.00 20.16 Building: Fire #6 Address: 3232 Teasley Ln. Brand: Generac Model #: 005861 Phase: 1 Voltage: 120/240 KW: 17 KVA: 17 Fuel Type: Natural Gas 1 EA $295.97 $325.00 $425.00 $450.00 $300.00 $393.00 20.17 Building: Fire #7 Address: 4201 Vintage Blvd. Brand: Cummins Model #: DGFB-5775769 Phase: 3 Voltage: 277/408 KW: 175 KVA: 218.7 Fuel Type: Diesel 1 EA $583.41 $525.00 $750.00 $775.00 $500.00 $610.00 Exhibit 2 RFP 7534 - Pricing Evaluation for Generator Services 10.0% 1.35%10.0%15.0%10.0% 20.0%30.0%1.35%25.0%25.0% SECTION F - ANNUAL PM PRICING Annual PM Price Includes Oil, Oil Filter, Air Filter, Fuel Filter, Air Filter (as needed) and EPA Disposal Respondent's Business Name: Principal Place of Business (City and State): Inspection, Load Bank, & Testing Labor Services Pricing SECTION A - Inspection & Testing: SECTION B - SERVICE WORK HOURLY RATE: SECTION C - EMERGENCY WORK HOURS (1-HOUR RESPONSE TIME REQUIRED) SECTION D- CONTRACTOR Material Rates: Alturex CARROLLTON, TX Mansfield, TX Midland, TX Phoenix, AZ Fort Worth, TX Midlothian, TX PARKER POWER SYSTEMS Diversified Power Systems Inc Larmar Industries, Inc Loftin Equipment Co.On-Site Power Systems, Inc. SECTION E - SUB-CONTRACTOR Service and Material Rates: 581 Line #Description QTY UOM Unit Extended Unit Extended Unit Extended Unit Extended Unit Extended Unit Extended Exhibit 2 RFP 7534 - Pricing Evaluation for Generator Services Respondent's Business Name: Principal Place of Business (City and State): Inspection, Load Bank, & Testing Labor Services Pricing Alturex CARROLLTON, TX Mansfield, TX Midland, TX Phoenix, AZ Fort Worth, TX Midlothian, TX PARKER POWER SYSTEMS Diversified Power Systems Inc Larmar Industries, Inc Loftin Equipment Co.On-Site Power Systems, Inc. 20.18 Building: Fire #8 Address: Colorado Blvd. Brand: Generac Model #: SD150 Phase: 3 Voltage: 120/208 KW: 150 KVA: 188 Fuel Type: Diesel 1 EA $1,748.04 $515.00 $750.00 $785.00 $400.00 $610.00 20.19 Building: Fleet Address: 804 Texas St. Brand: Kohler Model #: 80RE0ZJF Phase: 3 Voltage: 277/480 KW: 81 KVA: 101 Fuel Type: Diesel 1 EA $517.46 $460.00 $550.00 $735.00 $300.00 $480.00 20.20 Building: Service Center Address: 901 Texas St. Brand: Cummins Model #: DQDAC1675541 Phase: 3 Voltage: 277/480 KW: 300 KVA: 375 Fuel Type: Diesel 1 EA $1,116.61 $775.00 $1,050.00 $925.00 $550.00 $800.00 20.21 Building: SW- Scale House Address: 1527 S. Mayhill Rd. Brand: Kohler Model #: 100RZG Phase: 1 Voltage: 120/240 KW: 95 KVA: 95 Fuel Type: Natural Gas 1 EA $383.04 $475.00 $550.00 $535.00 $300.00 $515.00 20.22 Building: SW- Truck Wash Address: 1251 S. Mayhill Rd. Brand: Generac Model #: 20A01711-S Phase: 3 Voltage: 120/208 KW: 20 KVA: 25 Fuel Type: Natural Gas 1 EA $352.14 $345.00 $425.00 $465.00 $300.00 $393.00 20.23 Building: Lake Ray Roberts Dam - North Address: 9401 Lake Ray Roberts Dam - North, Aubrey, Brand: Cummins Model #: 1500DFLE-2415 B Phase: 3 Voltage: 4160V KW: 1500 KVA: 1875 Fuel Type: Diesel 1 EA $2,086.82 $2,425.00 $2,000.00 $2,940.00 $2,560.00 $2,190.00 20.24 Building: Lake Ray Roberts Dam - South Address: 9401 Lake Ray Roberts Dam - South, Aubrey, Brand: Cummins Model #: 1500DFLE-2415 B Phase: 3 Voltage: 4160V KW: 1500 KVA: 1875 Fuel Type: Diesel 1 EA $2,086.82 $2,425.00 $2,000.00 $2,940.00 $2,560.00 $2,190.00 20.25 Building: SouthWest Booster Pump Station Address: 9800 John Payne Road, Argyle TX 76226 Brand: Kohler Model #: 800REOZM Phase: 3 Voltage: 480V KW: 800 KVA: 1012.5 Fuel Type: Diesel 1 EA $1,229.07 $1,300.00 $1,750.00 $1,885.00 $1,425.00 $1,300.00 20.26 Building: Robson SBR Plant Address: 5495 Florence Rd. Brand: Detroit Spectrum Model #: 300DSE Phase: 3 Voltage: 277/480 KW: 410 KVA: 375 Fuel Type: Diesel 1 EA $513.44 $925.00 $1,200.00 $850.00 $550.00 $925.00 20.27 Building: Robson SW Lift Station Address: 12450 Robson Ranch Blvd. Brand: Generac Model #: 14875900100 Phase: 3 Voltage: 277/480 KW: 300 KVA: Fuel Type: Diesel 1 EA $1,203.85 $775.00 $950.00 $860.00 $550.00 $800.00 20.28 Building: Beaver Creek Lift Station Address: 905 Keystone Ct. Brand: Generac Model #: SG150 Phase: 3 Voltage: 277/480 KW: 150 KVA: 188 Fuel Type: Natural Gas 1 EA $733.90 $515.00 $550.00 $530.00 $400.00 $554.00 20.29 Building: 1100 S Mayhill Address: 1100 S Mayhill Rd. Brand: Generac Model #: QT15068KNSN Phase: 3 Voltage: 277/480 KW: 150 KVA: Fuel Type: Natural Gas 1 EA $422.56 $515.00 $550.00 $530.00 $400.00 $554.00 20.30 Building: Granada Lift Station Address: 2710 B Grenada Brand: Generac Model #: QT10068GNSN Phase: 3 Voltage: 120/240 KW: 67 KVA: Fuel Type: Natural Gas 1 EA $380.76 $345.00 $575.00 $530.00 $300.00 $480.00 20.31 Building: S S Portable Address: 1100 S Mayhill Rd. Brand: Detroit Model #: 537RSL4034 Phase: 3 Voltage: 277/480 KW: 585 KVA: Fuel Type: Diesel 1 EA $795.08 $1,060.00 $1,375.00 $1,435.00 $600.00 $1,025.00 20.32 Building: CK POWER #1 Address: 1100 S Mayhill Rd. Brand: CK POWER Model #: ORDERED WILL BE DELIVERED 2021 Phase: 3 Voltage: 277/480 KW: 500 KVA: Fuel Type: Diesel 1 EA No Bid $1,125.00 $1,025.00 $1,100.00 $1,125.00 $600.00 $1,025.00 20.33 Building: CK POWER #2 Address: 1100 S Mayhill Rd. Brand: CK POWER Model #: ORDERED WILL BE DELIVERED 2021 Phase: 3 Voltage: 277/480 KW: 500 KVA: Fuel Type: Diesel 1 EA No Bid $1,125.00 $1,025.00 $1,100.00 $1,125.00 $600.00 $1,025.00 20.34 Building: Denton West Lift Station Address: 2301 E Ryan Rd. Brand: Generac Model #: SD175 Phase: 3 Voltage: 277/480 KW: 175 KVA: Fuel Type: Diesel 1 EA $935.03 $530.00 $725.00 $840.00 $400.00 $610.00 20.35 Building: McKenna Park Radio Tower Address: 705 Thomas St. Brand: Kohler Model #: 60RE0ZJB Phase: Voltage: KW: 60 KVA: Fuel Type: DIESEL 1 EA $431.25 $345.00 $550.00 $635.00 $300.00 $480.00 20.36 Building: Teasley Ln Old Alton Rd Address: 9060 TEASLEY LN. Brand: GENERAC Model #: 11757700100 Phase: Voltage: KW: 50 KVA: Fuel Type: DIESEL 1 EA $389.97 $345.00 $500.00 $745.00 $300.00 $480.00 Item # 1 2 3 4 Total Score: Evaluation Total: Contract Total (5 years):$750,000.00 $532,675.66 $562,785.00 $448,265.00 $423,240.00 $447,950.00 $521,056.00 Description Delivery/Project Schedule - 20% Compliance with Specifications - 20% Probable Performance - 30% Price, Total Cost of Ownership - 30% Larmar Industries, Alturex On-Site Power Power Parker Systems Loftin Equipment Co.Diversified Power 18.3 20.0 8.3 10.0 92.3 6.7 11.7 15.0 30.0 60.8 30.0 24.0 53.8 3.3 5 10 27.9 46.3 12.5 23.0 44.0 6.7 3.3 5.0 28.0 43.0 6.7 3.3 10.0 24.0 582 ORDINANCE NO._________ AN ORDINANCE OF THE CITY OF DENTON, A TEXAS HOME-RULE MUNICIPAL CORPORATION, AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE A CONTRACT WITH PARKER POWER SYSTEMS, INC., TO PROVIDE MAINTENANCE, INSPECTION, AND REPAIR SERVICES ON GENERATORS FOR VARIOUS CITY OF DENTON DEPARTMENTS; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (RFP 7534 - AWARDED TO PARKER POWER SYSTEMS, INC., FOR THREE (3) YEARS, WITH THE OPTION FOR TWO (2) ADDITIONAL ONE (1) YEAR EXTENSIONS, IN THE TOTAL FIVE (5) YEAR NOT-TO-EXCEED AMOUNT OF $750,000.00). WHEREAS, the City has solicited, received, and evaluated competitive proposals to provide maintenance, inspection, and repair services on generators for various City of Denton departments; and WHEREAS, the City Manager, or a designated employee, has received, reviewed and recommended that the herein described proposals are the most advantageous to the City considering the relative importance of price and the other evaluation factors included in the request for proposals; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies, or services approved and accepted herein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The items in the following numbered request for proposal for materials, equipment, supplies, or services Purchasing Agent, are hereby accepted and approved as being the most advantageous to the City considering the relative importance of price and the other evaluation factors included in the request for proposals. RFP NUMBER CONTRACTOR AMOUNT 7534 Parker Power Systems, Inc. $750,000.00 SECTION 2. That by the acceptance and approval of the above numbered items of the submitted proposals, the City accepts the offer of the persons submitting the proposals for such items and agrees to purchase the materials, equipment, supplies, or services in accordance with the terms, specifications, standards, quantities, and for the specified sums contained in the Proposal Invitations, Proposals, and related documents. 583 SECTION 3. That should the City and person submitting approved and accepted items and of the submitted proposals wish to enter into a formal written agreement as a result of the acceptance, approval, and awarding of the proposals, the City Manager, or his designated representative, is hereby authorized to execute the written contract; provided that the written contract is in accordance with the terms, conditions, specifications, standards, quantities, and specified sums contained in the Proposal and related documents herein approved and accepted. SECTION 4. The City Council of the City of Denton, hereby expressly delegates the authority to take any actions that may be required or permitted to be performed by the City of Denton under this ordinance to the City Manager of the City of Denton, or his designee. SECTION 5. By the acceptance and approval of the above enumerated bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids. SECTION 6. This ordinance shall become effective immediately upon its passage and approval. The motion to approve this ordinance was made by __________________________ and seconded by _________________________________, the ordinance was passed and approved by the following vote [___ - ___]: Aye Nay Abstain Absent Mayor Gerard Hudspeth: ______ ______ ______ ______ Birdia Johnson, District 1: ______ ______ ______ ______ Connie Baker, District 2: ______ ______ ______ ______ Jesse Davis, District 3: ______ ______ ______ ______ John Ryan, District 4: ______ ______ ______ ______ Deb Armintor, At Large Place 5: ______ ______ ______ ______ Paul Meltzer, At Large Place 6: ______ ______ ______ ______ PASSED AND APPROVED this the _______ day of ___________________________, 2021. __________________________________ GERARD HUDSPETH, MAYOR 584 ATTEST: ROSA RIOS, CITY SECRETARY BY: __________________________________ APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: _________________________________ 585 Docusign City Council Transmittal Coversheet File Name Purchasing Contact City Council Target Date Piggy Back Option Contract Expiration Ordinance 586 By signing this agreement, Supplier certifies that Supplier’s signature provides written verification to the City that Supplier: (1) does not boycott Israel; and (2) will not boycott Israel during the term of the agreement. 587 By signing this agreement, Supplier certifies that Supplier’s signature provides written verification to the City that Supplier, pursuant to Chapter 2252, is not ineligible to enter into this agreement and will not become ineligible to receive payments under this agreement by doing business with Iran, Sudan, or a foreign terrorist organization 588 589 590 591 592 et seq et seq 593 594 595 596 597 598 599 600 601 602 603 604 605 606 607 608 609 Upon contract execution, all insurance requirements shall become contractual obligations, which the successful contractor shall have a duty to maintain throughout the course of this contract. Without limiting any of the other obligations or liabilities of the Contractor, the Contractor shall provide and maintain until the contracted work has been completed and accepted by the City of Denton, Owner, the minimum insurance coverage as indicated hereinafter. Contractor shall file with the Purchasing Department satisfactory certificates of insurance including any applicable addendum or endorsements, containing the contract number and title of the project. Contractor may, upon written request to the Purchasing Department, ask for clarification of any insurance requirements at any time; however, Contractor shall not commence any work or deliver any material until he or she receives notification that the contract has been accepted, approved, and signed by the City of Denton. All insurance policies proposed or obtained in satisfaction of these requirements shall comply with the following general specifications, and shall be maintained in compliance with these general specifications throughout the duration of the Contract, or longer, if so noted: Cancellation: City requires 30 day written notice should any of the policies described on the certificate be cancelled or materially changed before the expiration date. 610 All insurance policies proposed or obtained in satisfaction of this Contract shall additionally comply with the following marked specifications, and shall be maintained in compliance with these additional specifications throughout the duration of the Contract, or longer, if so noted: 611 612 613 614 615 616 617 See 618 619 620 621 622 623 624 625 626 627 628 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-175,Version:1 AGENDA CAPTION Consider adoption of an ordinance of the City of Denton,a Texas home-rule municipal corporation,authorizing the City Manager,or his designee,to execute a contract with Patel &Patel General Partners dba Deluxe Inn,for temporary emergency shelter in hotels for the Community Development Department;providing for the expenditure of funds therefor;and providing an effective date (RFP 7547 -awarded to Patel &Patel General Partners dba Deluxe Inn, in the one (1) year not-to-exceed amount of $800,000.00). City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™629 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement & Compliance ACM: David Gaines DATE: February 9, 2021 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager, or his designee, to execute a contract with Patel & Patel General Partners dba Deluxe Inn, for temporary emergency shelter in hotels for the Community Development Department; providing for the expenditure of funds therefor; and providing an effective date (RFP 7547 – awarded to Patel & Patel General Partners dba Deluxe Inn, in the one (1) year not-to-exceed amount of $800,000.00). INFORMATION/BACKGROUND In December of 2020, City Council approved a staff request to submit a Substantial Amendment to the City’s 2020 Action Plan for Housing and Community Development, finalizing recommendations that $800,000 out of the $1,485,440 available of the CARES Act CDBG-CV1 and CDBG-CV3 funds be allocated for a Hotel Voucher Program. The program will offer emergency housing and temporary shelter sites to prevent potential breakouts of COVID-19, and allow individuals and families experiencing homelessness to have additional safe places to sleep, and a means of quarantine in non-congregate settings. Staff published a solicitation for local hotels interested in being the approved Hotel Voucher Program site and for security services. There will be forty (40) room vouchers available to local nonprofit providers to temporarily house people experiencing homelessness. The City will continue to provide 24/7 onsite security services with CDBG-CV funds. The City will enter into a Service Agreement with the procured hotel vendor and into MOUs with any local qualified nonprofit agencies that currently serve people experiencing homelessness who wish to access the Hotel Voucher Program. All projects and programs funded through the CDBG-CV CARES Act funds are approved under the annual Action Plan approved by City Council and conditional on final approval by the Department of Housing and Urban Development (HUD). Additional information regarding this program may be found in the AIS provided on this topic at the December 17, 2020, City Council meeting (ID 20-2367). In March of 2020, City Council approved funding to temporarily house individuals and families experiencing homelessness in local hotels to implement COVID-19 safety protocols. At the time of Denton’s disaster declaration (March 13th) and subsequent directives from Governor Abbott for non- essential workers to stay at home (March 31st), there was emerging information about how to remain safe from contracting and spreading the COVID-19 virus, especially in high risk congregate settings like nursing homes and shelters. City Council approved the proposed Substantial Amendment to extend the hotel program on a voucher basis on December 17, 2020. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 630 Requests for Proposals was sent to 100 prospective suppliers, including 21 Denton firms. In addition, specifications were placed on the Materials Management website for prospective suppliers to download and advertised in the local newspaper. Four (4) proposals were received. Three (3) meeting specifications were evaluated based upon published criteria including delivery/project schedule, compliance with specifications, probable performance, and price. Best and Final Offer (BAFO) was requested from the top firm. Based upon this evaluation, Patel & Patel General Partners dba Deluxe Inn was ranked the highest and determined to be the best value for the City. NIGP Code Used for Solicitation: 952 - (Service Only) - Human Service Notifications sent for Solicitation sent in IonWave: 100 Number of Suppliers that viewed Solicitation in IonWave: 15 HUB-Historically Underutilized Business Invitations sent out: 8 SBE-Small Business Enterprise Invitations sent out: 35 Responses from Solicitation: 4 Responses meeting Specifications: 3 RECOMMENDATION Award a contract with Patel & Patel General Partners dba Deluxe Inn, for temporary emergency shelter in hotels for the Community Development Department, in a one(1) year not-to-exceed amount of $800,000. PRINCIPAL PLACE OF BUSINESS Patel & Patel General Partners dba Deluxe Inn Denton, TX ESTIMATED SCHEDULE OF PROJECT This is a one (1) year contract. FISCAL INFORMATION These temporary shelter services will be funded from the CDBG-CV Hotel Voucher Program Funds. Requisitions will be entered on an as-needed basis. The budgeted amount for this item is $800,000. The City will only pay for services rendered and is not obligated to pay the full contract amount unless needed. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Pricing Evaluation Exhibit 3: Ordinance and Contract Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Dani Shaw, 940-349-7237. Legal point of contact: Marcella Lunn at 940-349-8333. 631 Patel & Patel General Partners DBA Deluxe Inn La Quinta Inn & Suites I 35 North Holiday Inn Express & Suites Denton Denton, TX Denton, TX Denton, TX Line #Description Unit Price Unit Price Unit Price 1 SINGLE OCCUPANCY ROOM (Rate per night)$53.99 $65.00 $96.00 2 DOUBLE OCCUPANCY ROOM(Rate per night)$53.99 $65.00 $96.00 $800,000.00 Item #Scoring Criteria Patel & Patel General Partners DBA Deluxe Inn La Quinta Inn & Suites I 35 North Holiday Inn Express & Suites Denton 1 Delivery/Project Schedule - 10%9.33 7.33 6.00 2 Compliance with Specifications - 20%20.00 14.67 12.00 3 Probable Performance - 30%28.00 20.00 18.00 4 Price, Total Cost of Ownership - 40%40.00 33.22 22.50 97.33 75.22 58.50 Exhibit 2 RFP 7547 - Pricing Evaluation for Temporary Emergency Shelter Hotels Respondent's Business Name: Principal Place of Business (City and State): Total Score: Contract Total (1 year): Evaluaton 632 ORDINANCE NO. _________ AN ORDINANCE OF THE CITY OF DENTON, A TEXAS HOME-RULE MUNICIPAL CORPORATION, AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE A CONTRACT WITH PATEL & PATEL GENERAL PARTNERS DBA DELUXE INN, FOR TEMPORARY EMERGENCY SHELTER IN HOTELS FOR THE COMMUNITY DEVELOPMENT DEPARTMENT; PROVIDING FOR THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE (RFP 7547 AWARDED TO PATEL & PATEL GENERAL PARTNERS DBA DELUXE INN, IN THE ONE (1) YEAR NOT-TO- EXCEED AMOUNT OF $800,000.00). WHEREAS, the City has solicited, received, and evaluated competitive proposals for temporary emergency shelter in hotels for the Community Development Department; and WHEREAS, the City Manager, or a designated employee, has received, reviewed and recommended that the herein described proposals are the most advantageous to the City considering the relative importance of price and the other evaluation factors included in the request for proposals; and WHEREAS, the City Council has provided in the City Budget for the appropriation of funds to be used for the purchase of the materials, equipment, supplies, or services approved and accepted herein; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The items in the following numbered request for proposal for materials, equipment, supplies, Purchasing Agent, are hereby accepted and approved as being the most advantageous to the City considering the relative importance of price and the other evaluation factors included in the request for proposals. RFP NUMBER CONTRACTOR AMOUNT 7547 Patel & Patel General Partners dba Deluxe Inn $800,000.00 SECTION 2. That by the acceptance and approval of the above numbered items of the submitted proposals, the City accepts the offer of the persons submitting the proposals for such items and agrees to purchase the materials, equipment, supplies, or services in accordance with the terms, specifications, standards, quantities, and for the specified sums contained in the Proposal Invitations, Proposals, and related documents. SECTION 3. That should the City and person submitting approved and accepted items and of the submitted proposals wish to enter into a formal written agreement as a result of the acceptance, 633 approval, and awarding of the proposals, the City Manager, or his designated representative, is hereby authorized to execute the written contract; provided that the written contract is in accordance with the terms, conditions, specifications, standards, quantities, and specified sums contained in the Proposal and related documents herein approved and accepted. SECTION 4. The City Council of the City of Denton, hereby expressly delegates the authority to take any actions that may be required or permitted to be performed by the City of Denton under this ordinance to the City Manager of the City of Denton, or his designee. SECTION 5. By the acceptance and approval of the above enumerated bids, the City Council hereby authorizes the expenditure of funds therefor in the amount and in accordance with the approved bids. SECTION 6. This ordinance shall become effective immediately upon its passage and approval. The motion to approve this ordinance was made by __________________________ and seconded by _________________________________, the ordinance was passed and approved by the following vote [___ - ___]: Aye Nay Abstain Absent Mayor Gerard Hudspeth: ______ ______ ______ ______ Birdia Johnson, District 1: ______ ______ ______ ______ Connie Baker, District 2: ______ ______ ______ ______ Jesse Davis, District 3: ______ ______ ______ ______ John Ryan, District 4: ______ ______ ______ ______ Deb Armintor, At Large Place 5: ______ ______ ______ ______ Paul Meltzer, At Large Place 6: ______ ______ ______ ______ PASSED AND APPROVED this the _______ day of ___________________________, 2021. __________________________________ GERARD HUDSPETH, MAYOR 634 ATTEST: ROSA RIOS, CITY SECRETARY BY: __________________________________ APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: _________________________________ 635 Docusign City Council Transmittal Coversheet File Name Purchasing Contact City Council Target Date Piggy Back Option Contract Expiration Ordinance 636 Contract # 7547 CONTRACT BY AND BETWEEN CITY OF DENTON, TEXAS AND PATEL & PATEL GENERAL PARTNERS DBA DELUXE INN (CONTRACT 7547) THIS CONTRACT is made and entered into this date ______________________, by and between PATEL & PATEL GENERAL PARTNERS DBA DELUXE INN a Texas General Partnership, whose address is 601 N Interstate 35E, Denton, Texas 76205, hereinafter referred to as "Contractor," and the CITY OF DENTON, TEXAS, a home rule municipal corporation, hereinafter referred to as "City," to be effective upon approval of the Denton City Council and subsequent execution of this Contract by the Denton City Manager or his duly authorized designee. For and in consideration of the covenants and agreements contained herein, and for the mutual benefits to be obtained hereby, the parties agree as follows: SCOPE OF SERVICES Contractor shall provide products and/or services in document RFP 7547 Temporary Emergency Shelter in Hotels, a copy of which is on file at the office of Purchasing Agent and incorporated herein for all purposes. The Contract consists of this written agreement and the following items which are attached hereto and incorporated herein by reference: (a) Special Terms and Conditions (b) City of RFP 7547 (on File at the Office of the Purchasing Agent); (c) City of Denton Standard Terms and Conditions C ; (d) Insurance Requirements D (e) Certificate of Interested Parties Electronic Filing (Exhibit "E"); (f) (Exhibit "F"); (g) Form CIQ Conflict of Interest Questionnaire (Exhibit "G"); These documents make up the Contract documents and what is called for by one shall be as binding as if called for by all. In the event of an inconsistency or conflict in any of the provisions of the Contract documents, the inconsistency or conflict shall be resolved by giving precedence first to the written agreement then to the contract documents in the order in which they are listed above. These documents shall be referred to coll Prohibition on Contracts with Companies Boycotting Israel Supplier acknowledges that in accordance with Chapter 2270 of the Texas Government Code, City is prohibited from entering into a contract with a company for goods or services unless the contract contains a written verification from the company that it: (1) does not boycott Israel; and (2) will not boycott Israel during the term of the contract. T to those terms in Section 808.001 of the Texas Government Code. By signing this agreement, Supplier certifies that Supplier s written verification to the City that Supplier: (1) does not boycott Israel; and (2) will not boycott Israel during the term of the agreement. Failure to meet or maintain the requirements under this provision will be considered a material breach. Prohibition on Contracts with Companies Doing Business with Iran, Sudan, or a Foreign Terrorist 637 Contract # 7547 Organization Section 2252 of the Texas Government Code restricts CITY from contracting with companies that do business with Iran, Sudan, or a foreign terrorist organization. By signing this agreement, Supplier certifies that Supplier s written verification to the City that Supplier, pursuant to Chapter 2252, is not ineligible to enter into this agreement and will not become ineligible to receive payments under this agreement by doing business with Iran, Sudan, or a foreign terrorist organization. Failure to meet or maintain the requirements under this provision will be considered a material breach. The parties agree to transact business electronically. Any statutory requirements that certain terms be in writing will be satisfied using electronic documents and signing. Electronic signing of this document will be deemed an original for all legal purposes. IN WITNESS WHEREOF, the parties of these presents have executed this agreement in the year and day first above written. SUPPLIER BY: ______________________________ AUTHORIZED SIGNATURE Printed Name: _______________________ Title: ______________________________ ___________________________________ PHONE NUMBER ___________________________________ EMAIL ADDRESS ___________________________________ TEXAS ETHICS COMMISSION 1295 CERTIFICATE NUMBER CITY OF DENTON, TEXAS BY: _____________________________ TODD HILEMAN CITY MANAGER ATTEST: ROSA RIOS, CITY SECRETARY BY: _______________________________ APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: _______________________________ THIS AGREEMENT HAS BEEN BOTH REVIEWED AND APPROVED as to financial and operational obligations and business terms. _______________ ________________ SIGNATURE PRINTED NAME __________________________________ TITLE __________________________________ DEPARTMENT 638 Contract # 7547 Exhibit A Special Terms and Conditions 1. Total Contract Amount The contract total for services shall not exceed $800,000. Pricing shall be per Exhibit F attached. 2. Contract Terms The contract term will be one (1) year, effective from date of award or notice to proceed as determined by the City of Denton Purchasing Department. At the sole option of the City of Denton, the Contract may be further extended as needed, not to exceed a total of six (6) months. 3. Price Escalation and De-escalation O - escalation price adjustment annually based on these special terms. Any request for price adjustment must be based on the, U.S Department of Labor, Bureau of Labor Statistics, Producer Price Index (PPI) or the manufacturer published pricing list. The maximum escalation will not exceed +/- 8% for any individual year. The escalation will be determined annually at the renewal date. The price will be increased or decreased based upon the annual percentage change Should the PPI or manufacturer price list change exceed a minimum threshold value of +/-1%, then the stated eligible bid prices shall be adjusted in accordance with the percent change not to exceed the 8% limit per year. The supplier should provide documentation as percentage of each cost associated with the unit prices quoted for consideration. Request must be submitted in writing with supporting evidence for need of such increase to the Purchasing Manager at least 60 days prior to contract expiration of each year. Respondent must also provide supporting documentation as justification for the request. If no request is made, then it will be assumed that the current contract price will be in effect. Upon receipt of such request, the City of Denton reserves the right to either: accept the escalation as competitive with the general market price at the time and become effective upon the renewal date of the contract award or reject the increases within 30 calendar days after receipt of a properly submitted request. If a properly submitted increase is rejected, the Contractor may request cancellation of such items from the Contract by giving the City of Denton written notice. Cancellation will not go into effect for 15 calendar days after a determination has been issued. Pre-price increase prices must be honored on orders dated up to the official date of the City of Denton approval and/or cancellation. The request shall be sent by e-mail to: purchasing@cityofdenton.com noting the solicitation number. 639 Contract # 7547 The City of Denton reserves the right to accept, reject, or negotiate the proposed price changes. 4. Performance Liquidated Damages The Contractor shall incur contractual payment losses, as initiated by the City for performance that falls short of specified performance standards as outlined below: Delivery beyond contracted lead times Performance below contracted levels (services only) The Contractor shall be assessed a one (1%) percent fee each month when any one of the performance standards outlined above are not met in full. The Contractor shall be assessed a two (2%) percent profit fee each month when any two (2) or more performance standards outlined above are not met in full. At the end of each month, the City will review the monthly reports and determine the percentage of penalty to be assessed to the Contrac 5. Damages Cap The Contractor may request for reimbursement for damages that shall be limited to $50 per room, per day. Invoices and requests for damaged must be submitted in writing and are to include room numbers, date of service, and details of reported damages with supporting image(s). 640 Contract # 7547 Exhibit C Standard Purchase Terms and Conditions These standard Terms and Conditions and the Terms and Conditions, Specifications, Drawings contracts/purchase orders issued by the City of Denton hereinafter referred to as the City or Buyer and the Seller or respondent herein after referred to as Contractor or Supplier. Any deviations must statement shall serve to modify the terms set forth herein. If there is a conflict between the provisions on the face of the contract/purchase order these written provisions will take precedence. The Contractor agrees that the contract shall be governed by the following terms and conditions, unless exceptions are duly noted and fully negotiated. Unless otherwise specified in the contract, Sections 3, 4, 5, 6, 7, 8, 20, 21, and 36 shall apply only to a solicitation to purchase goods, and sections 9, 10, 11, 22 and 32 shall apply only to a solicitation to purchase services to be performed -of-way. 1. . The Contractor shall fully and timely provide all cordance with the terms, covenants, and conditions of the Contract and all applicable Federal, State, and local laws, rules, and regulations. 2. EFFECTIVE DATE/TERM. Unless otherwise specified in the Solicitation, this Contract shall be effective as of the date the contract is signed by the City, and shall continue in effect until all obligations are performed in accordance with the Contract. 3. CONTRACTOR TO PACKAGE DELIVERABLES: The Contractor will package deliverables in accordance with good commercial practice and shall include a packing list showing the description of each item, the quantity and unit price unless otherwise provided in the Specifications or Supplemental Terms and Conditions, each shipping container shall be clearly and permanently mark address and purchase order or purchase release number and the price agreement number if applicable, (c) Container number and total number of containers, e.g. box 1 of 4 boxes, and (d) the number of the container bearing the packing list. The Contractor shall bear cost of packaging. Deliverables shall be suitably packed to secure lowest transportation costs and to conform to all the requirements of common carriers and any applicable specification. The City's count or weight shall be final and conclusive on shipments not accompanied by packing lists. 4. SHIPMENT UNDER RESERVATION PROHIBITED: The Contractor is not authorized to ship the deliverables under reservation and no tender of a bill of lading will operate as a tender of deliverables. 5. TITLE & RISK OF LOSS: Title to and risk of loss of the deliverables shall pass to the City only when the City actually receives and accepts the deliverables. 641 Contract # 7547 6. DELIVERY TERMS AND TRANSPORTATION CHARGES: Deliverables shall be shipped F.O.B. point of delivery unless otherwise specified in the Supplemental Terms and all delivery and transportation charges. The City shall have the right to designate what method of transportation shall be used to ship the deliverables. The place of delivery shall be that set forth the purchase order. 7. RIGHT OF INSPECTION AND REJECTION: The City expressly reserves all rights under law, including, but not limited to the Uniform Commercial Code, to inspect the deliverables at delivery before accepting them, and to reject defective or non-conforming deliverables. If the City furnish, or cause to be furnished, without additional charge, all reasonable facilities and assistance to the City to facilitate such inspection. 8. NO REPLACEMENT OF DEFECTIVE TENDER: Every tender or delivery of deliverables must fully comply with all provisions of the Contract as to time of delivery, quality, and quantity. Any non-complying tender shall constitute a breach and the Contractor shall not have the right to substitute a conforming tender; provided, where the time for performance has not yet expired, the Contractor may notify the City of the intention to cure and may then make a conforming tender within the time allotted in the contract. 9. PLACE AND CONDITION OF WORK: The City shall provide the Contractor access to the sites where the Contractor is to perform the services as required in order for the Contractor to perform the services in a timely and efficient manner, in accordance with and subject to the applicable security laws, rules, and regulations. The Contractor acknowledges that it has satisfied ocation and essential characteristics of the work sites, the quality and quantity of materials, equipment, labor and facilities necessary to perform the services, and any other condition or state of fact which could in any way affect performance of the Con hereby releases and holds the City harmless from and against any liability or claim for damages of any kind or nature if the actual site or service conditions differ from expected conditions. The contractor shall, at all times, exercise reasonable precautions for the safety of their employees, 10. WORKFORCE A. The Contractor shall employ only orderly and competent workers, skilled in the performance of the services which they will perform under the Contract. B. The Contractor, its employees, subcontractors, and subcontractor's employees may not while engaged in participating or responding to a solicitation or while in the course and scope of delivering goods or services under a City of Denton contract or on the City's property . i. use or possess a firearm, including a concealed handgun that is licensed under state law, except as required by the terms of the contract; or ii. use or possess alcoholic or other intoxicating beverages, illegal drugs or controlled substances, nor may such workers be intoxicated, or under the influence of alcohol or drugs, on the job. C. If the City or the City's representative notifies the Contractor that any worker is incompetent, 642 Contract # 7547 disorderly or disobedient, has knowingly or repeatedly violated safety regulations, has possessed any firearms, or has possessed or was under the influence of alcohol or drugs on the job, the Contractor shall immediately remove such worker from Contract services, and may not employ such worker again on Contract services without the City's prior written consent. Immigration: The Contractor represents and warrants that it shall comply with the requirements of the Immigration Reform and Control Act of 1986 and 1990 regarding employment verification and retention of verification forms for any individuals hired on or after November 6, 1986, who will perform any labor or services under the Contract and the Illegal Immigration Reform and 11. COMPLIANCE WITH HEALTH, SAFETY, AND ENVIRONMENTAL REGULATIONS and their respective employees, shall comply fully with all applicable federal, state, and local health, safety, and environmental laws, ordinances, rules and regulations in the performance of the services, including but not limited to those promulgated by the City and by the Occupational Safety and Health Administration (OSHA). In case of conflict, the most stringent safety requirement shall govern. The Contractor shall indemnify and hold the City harmless from and against all claims, demands, suits, actions, obligations under this paragraph. Environmental Protection: The Respondent shall be in compliance with all applicable standards, orders, or regulations issued pursuant to the mandates of the Clean Air Act (42 U.S.C. §7401 et seq.) and the Federal Water Pollution Control Act, as amended, (33 U.S.C. §1251 et seq.). 12. INVOICES: A. The Contractor shall submit separate invoices in duplicate on each purchase order or purchase release after each delivery. If partial shipments or deliveries are authorized by the City, a separate invoice must be sent for each shipment or delivery made. B. Proper Invoices must include a unique invoice number, the purchase order or delivery the name of the point of contact for the Department. Invoices shall be itemized and transportation charges, if any, shall be listed separately. A copy of the bill of lading and the freight address and, if applicable, the tax identification number on the invoice must exactly match the C. Invoices for labor shall include a copy of all time-sheets with trade labor rate and deliverables order number clearly identified. Invoices shall also include a tabulation of work-hours at the appropriate rates and grouped by work order number. Time billed for labor shall be limited to hours actually worked at the work site. D. Unless otherwise expressly authorized in the Contract, the Contractor shall pass through all Subcontract and other authorized expenses at actual cost without markup. E. Federal excise taxes, State taxes, or City sales taxes must not be included in the invoiced amount. The City will furnish a tax exemption certificate upon request. 13. PAYMENT: A. All proper invoices need to be sent to Accounts Payable. Approved invoices will be paid within 643 Contract # 7547 receipt of the deliverables or of the invoice being received in Accounts Payable, whichever is later. B. If payment is not timely made, (per paragraph A); interest shall accrue on the unpaid balance at the lesser of the rate specified in Texas Government Code Section 2251.025 or the maximum lawful rate; except, if payment is not timely made for a reason for which the City may withhold payment hereunder, interest shall not accrue until ten (10) calendar days after the grounds for withholding payment have been resolved. C. If partial shipments or deliveries are authorized by the City, the Contractor will be paid for the partial shipment or delivery, as stated above, provided that the invoice matches the shipment or delivery. D. The City may withhold or set off the entire payment or part of any payment otherwise due the Contractor to such extent as may be necessary on account of: i. delivery of defective or non-conforming deliverables by the Contractor; ii. third party claims, which are not covered by the insurance which the Contractor is required to provide, are filed or reasonable evidence indicating probable filing of such claims; iii. failure of the Contractor to pay Subcontractors, or for labor, materials or equipment; which is not covered by insurance required to be provided by the Contractor; time specified in the Contract, and that the unpaid balance would not be adequate to cover actual or damages for the anticipated delay; vi. failure of the Contractor to submit proper invoices with purchase order number, with all required attachments and supporting documentation; or vii. failure of the Contractor to comply with any material provision of the Contract Documents. E. Notice is hereby given that any awarded firm who is in arrears to the City of Denton for delinquent taxes, the City may offset indebtedness owed the City through payment withholding. F. Payment will be made by check unless the parties mutually agree to payment by credit card or electronic transfer of funds. The Contractor agrees that there shall be no additional charges, surcharges, or penalties to the City for payments made by credit card or electronic funds transfer. G. The awarding or continuation of this contract is dependent upon the availability of funding. The ayable only and solely from funds Appropriated and available for this contract. The absence of Appropriated or other lawfully available funds shall render the Contract null and void to the extent funds are not Appropriated or available and any deliverables delivered but unpaid shall be returned to the Contractor. The City shall provide the Contractor written notice of the failure of the City to make an adequate Appropriation for any fiscal year to pay the amounts due under the Contract, or the reduction of any Appropriation to an amount insufficient to permit the City to pay its obligations under the Contract. In the event of none or inadequate appropriation of funds, there will be no penalty nor removal fees charged to the City. 14. TRAVEL EXPENSES: All travel, lodging and per diem expenses in connection with the Contract shall be paid by the Contractor, unless otherwise stated in the contract terms. During the term of this contract, the contractor shall bill and the City shall reimburse contractor for all reasonable and approved out of pocket expenses which are incurred in the connection with the performance of duties hereunder. Notwithstanding the foregoing, expenses for the time spent by the contractor in traveling to and from City facilities shall not be reimbursed, unless otherwise negotiated. 644 Contract # 7547 15. FINAL PAYMENT AND CLOSE-OUT: A. If a DBE/MBE/WBE Program Plan is agreed to and the Contractor has identified Subcontractors, the Contractor is required to submit a Contract Close-Out MBE/WBE Compliance Report to the Purchasing Manager no later than the 15th calendar day after completion of all work under the contract. Final payment, retainage, or both may be withheld if the Contractor is not in compliance with the requirements as accepted by the City. B. The making and acceptance of final payment will constitute: i. a waiver of all claims by the City against the Contractor, except claims (1) which have been previously asserted in writing and not yet settled, (2) arising from defective work appearing after final inspection, (3) arising from failure of the Contractor to comply with the Contract or the under the Contract, including but not limited to indemnity and warranty obligations, or (5) arising other than those previously asserted in writing and not yet settled. 16. SPECIAL TOOLS & TEST EQUIPMENT: If the price stated on the Offer includes the cost of any special tooling or special test equipment fabricated or required by the Contractor for the purpose of filling this order, such special tooling equipment and any process sheets related thereto shall become the property of the City and shall be identified by the Contractor as such. 17. RIGHT TO AUDIT: A. The City shall have the right to audit and make copies of the books, records and computations pertaining to the Contract. The Contractor shall retain such books, records, documents and other evidence pertaining to the Contract period and five years thereafter, except if an audit is in progress or audit findings are yet unresolved, in which case records shall be kept until all audit tasks are completed and resolved. These books, records, documents and other evidence shall be available, within ten (10) business days of written request. Further, the Contractor shall also require all Subcontractors, material suppliers, and other payees to retain all books, records, documents and other evidence pertaining to the Contract, and to allow the City similar access to those documents. All books and records will be made available within a 50 mile radius of the City of Denton. The cost of the audit will be borne by the City unless the audit reveals an overpayment of 1% or greater. If an overpayment of 1% or greater occurs, the reasonable cost of the audit, including any travel costs, must be borne by the Contractor which must be payable within five (5) business days of receipt of an invoice. B. Failure to comply with the provisions of this section shall be a material breach of the Contract include drafts and electronic files, even if such drafts or electronic files are subsequently used to generate or prepare a final printed document. 18. SUBCONTRACTORS: A. If the Contractor identified Subcontractors in a DBE/MBE/WBE agreed to Plan, the Contractor shall comply with all requirements approved by the City. The Contractor shall not initially employ any Subcontractor identified in the Plan, unless the substitute has been accepted by the City in writing. No acceptance by the City of any Subcontractor shall constitute a waiver of any rights or remedies of the City with respect to defective deliverables provided by a Subcontractor. If a Plan 645 Contract # 7547 has been approved, the Contractor is additionally required to submit a monthly Subcontract Awards and Expenditures Report to the Procurement Manager, no later than the tenth calendar day of each month. B. Work performed for the Contractor by a Subcontractor shall be pursuant to a written contract between the Contractor and Subcontractor. The terms of the subcontract may not conflict with the terms of the Contract, and shall contain provisions that: i. require that all deliverables to be provided by the Subcontractor be provided in strict accordance with the provisions, specifications and terms of the Contract; ii. prohibit the Subcontractor from further subcontracting any portion of the Contract without the prior written consent of the City and the Contractor. The City may require, as a condition to such further subcontracting, that the Subcontractor post a payment bond in form, substance and amount acceptable to the City; iii. require Subcontractors to submit all invoices and applications for payments, including any claims for additional payments, damages or otherwise, to the Contractor in sufficient time to enable the Contractor to include same with its invoice or application for payment to the City in accordance with the terms of the Contract; iv. require that all Subcontractors obtain and maintain, throughout the term of their contract, insurance in the type and amounts specified for the Contractor, with the City being a named insured as its interest shall appear; and v. require that the Subcontractor indemnify and hold the City harmless to the same extent as the Contractor is required to indemnify the City. C. The Contractor shall be fully responsible to the City for all acts and omissions of the Subcontractors just as the Contractor is responsible for the Contractor's own acts and omissions. Nothing in the Contract shall create for the benefit of any such Subcontractor any contractual relationship between the City and any such Subcontractor, nor shall it create any obligation on the part of the City to pay or to see to the payment of any moneys due any such Subcontractor except as may otherwise be required by law. D. The Contractor shall pay each Subcontractor its appropriate share of payments made to the Contractor not later than ten (10) calendar days after receipt of payment from the City. 19. WARRANTY-PRICE: A. The Contractor warrants the prices quoted in the Offer are no higher than the Contractor's current prices on orders by others for like deliverables under similar terms of purchase. B. The Contractor certifies that the prices in the Offer have been arrived at independently without consultation, communication, or agreement for the purpose of restricting competition, as to any matter relating to such fees with any other firm or with any competitor. C. In addition to any other remedy available, the City may deduct from any amounts owed to the Contractor, or otherwise recover, any amounts paid for items in excess of the Contractor's current prices on orders by others for like deliverables under similar terms of purchase. 20. WARRANTY TITLE: The Contractor warrants that it has good and indefeasible title to all deliverables furnished under the Contract, and that the deliverables are free and clear of all liens, claims, security interests and encumbrances. The Contractor shall indemnify and hold the City harmless from and against all adverse title claims to the deliverables. 21. WARRANTY DELIVERABLES: The Contractor warrants and represents that all deliverables sold the City under the Contract shall be free from defects in design, workmanship or 646 Contract # 7547 manufacture, and conform in all material respects to the specifications, drawings, and descriptions in the Solicitation, to any samples furnished by the Contractor, to the terms, covenants and conditions of the Contract, and to all applicable State, Federal or local laws, rules, and regulations, and industry codes and standards. Unless otherwise stated in the Solicitation, the deliverables shall be new or recycled merchandise, and not used or reconditioned. A. Recycled deliverables shall be clearly identified as such. B. The Contractor may not limit, exclude or disclaim the foregoing warranty or any warranty implied by law; and any attempt to do so shall be without force or effect. C. Unless otherwise specified in the Contract, the warranty period shall be at least one year from the date of acceptance of the deliverables or from the date of acceptance of any replacement deliverables. If during the warranty period, one or more of the above warranties are breached, the Contractor shall promptly upon receipt of demand either repair the non-conforming deliverables, or replace the non- and at no additional cost to the City. All costs incidental to such repair or replacement, including but not limited to, any packaging and shipping costs shall be borne exclusively by the Contractor. The City shall endeavor to give the Contractor written notice of the breach of warranty within thirty (30) calendar days of discovery of the breach of warranty, but failure to give timely notice D. If the Contractor is unable or unwilling to repair or replace defective or non-conforming deliverables as required by the City, then in addition to any other available remedy, the City may reduce the quantity of deliverables it may be required to purchase under the Contract from the Contractor, and purchase conforming deliverables from other sources. In such event, the Contractor shall pay to the City upon demand the increased cost, if any, incurred by the City to procure such deliverables from another source. E. If the Contractor is not the manufacturer, and the deliverables are covered by a separate manu Contractor shall assist and cooperate with the City to the fullest extent to enforce such 22. WARRANTY SERVICES: The Contractor warrants and represents that all services to be provided the City under the Contract will be fully and timely performed in a good and workmanlike manner in accordance with generally accepted industry standards and practices, the terms, conditions, and covenants of the Contract, and all applicable Federal, State and local laws, rules or regulations. A. The Contractor may not limit, exclude or disclaim the foregoing warranty or any warranty implied by law, and any attempt to do so shall be without force or effect. B. Unless otherwise specified in the Contract, the warranty period shall be at least one year from the Acceptance Date. If during the warranty period, one or more of the above warranties are breached, the Contractor shall promptly upon receipt of demand perform the services again in accordance with above standard at no additional cost to the City. All costs incidental to such additional performance shall be borne by the Contractor. The City shall endeavor to give the Contractor written notice of the breach of warranty within thirty (30) calendar days of discovery of the breach warranty, but failure to give timely notice shall not i this section. C. If the Contractor is unable or unwilling to perform its services in accordance with the above standard as required by the City, then in addition to any other available remedy, the City may reduce the amount of services it may be required to purchase under the Contract from the 647 Contract # 7547 Contractor, and purchase conforming services from other sources. In such event, the Contractor shall pay to the City upon demand the increased cost, if any, incurred by the City to procure such services from another source. 23. ACCEPTANCE OF INCOMPLETE OR NON-CONFORMING DELIVERABLES: If, instead of requiring immediate correction or removal and replacement of defective or non- conforming deliverables, the City prefers to accept it, the City may do so. The Contractor shall pay accept such defective or non-conforming deliverables. If any such acceptance occurs prior to final payment, the City may deduct such amounts as are necessary to compensate the City for the diminished value of the defective or non-conforming deliverables. If the acceptance occurs after final payment, such amount will be refunded to the City by the Contractor. 24. RIGHT TO ASSURANCE: Whenever one party to the Contract in good faith has reason to assurance of the intent to perform. In the event that no assurance is given within the time specified after demand is made, the demanding party may treat this failure as an anticipatory repudiation of the Contract. 25. STOP WORK NOTICE: The City may issue an immediate Stop Work Notice in the event the Contractor is observed performing in a manner that is in violation of Federal, State, or local guidelines, or in a manner that is determined by the City to be unsafe to either life or property. Upon notification, the Contractor will cease all work until notified by the City that the violation or unsafe condition has been corrected. The Contractor shall be liable for all costs incurred by the City as a result of the issuance of such Stop Work Notice. 26. DEFAULT: The Contractor shall be in default under the Contract if the Contractor (a) fails to fully, timely and faithfully perform any of its material obligations under the Contract, (b) fails to provide adequate assurance of performance under Paragraph 24, (c) becomes insolvent or seeks relief under the bankruptcy laws of the United States or (d) makes a material misrepresentation in the City. 27. TERMINATION FOR CAUSE: In the event of a default by the Contractor, the City shall have the right to terminate the Contract for cause, by written notice effective ten (10) calendar days, unless otherwise specified, after the date of such notice, unless the Contractor, within such reasonable satisfaction that such default does not, in fact, exist. In addition to any other remedy available under law or in equity, the City shall be entitled to recover all actual damages, costs, - judgment interest at the maximum lawful rate. Additionally, in the event of a default by the any Offer submitted by the Contractor may be disqualified for up to three (3) years. All rights and remedies under the Contract are cumulative and are not exclusive of any other right or remedy provided by law. 28. TERMINATION WITHOUT CAUSE: The City shall have the right to terminate the Contract, in whole or in part, without cause any notice. Upon receipt of a notice of termination, the Contractor shall promptly cease all further work 648 Contract # 7547 pursuant to the Contract, with such exceptions, if any, specified in the notice of termination. The City shall pay the Contractor, to the extent of funds Appropriated or otherwise legally available for such purposes, for all goods delivered and services performed and obligations incurred prior to the date of termination in accordance with the terms hereof. 29. FRAUD: Fraudulent statements by the Contractor on any Offer or in any report or deliverable required to be submitted by the Contractor to the City shall be grounds for the termination of the Contract for cause by the City and may result in legal action. 30. DELAYS: A. The City may delay scheduled delivery or other due dates by written notice to the Contractor if the City deems it is in its best interest. If such delay causes an increase in the cost of the work under the Contract, the City and the Contractor shall negotiate an equitable adjustment for costs incurred by the Contractor in the Contract price and execute an amendment to the Contract. The Contractor must assert its right to an adjustment within thirty (30) calendar days from the date of receipt of the notice of delay. Failure to agree on any adjusted price shall be handled under the Dispute Resolution process specified in paragraph 49. However, nothing in this provision shall excuse the Contractor from delaying the delivery as notified. B. Neither party shall be liable for any default or delay in the performance of its obligations under this Contract if, while and to the extent such default or delay is caused by acts of God, fire, riots, civil commotion, labor disruptions, sabotage, sovereign conduct, or any other cause beyond the reasonable control of such Party. In the event of default or delay in contract performance due to any of the foregoing causes, then the time for completion of the services will be extended; provided, however, in such an event, a conference will be held within three (3) business days to establish a mutually agreeable period of time reasonably necessary to overcome the effect of such failure to perform. 31. INDEMNITY: A. Definitions: i. "Indemnified Claims" shall include any and all claims, demands, suits, causes of action, judgments and liability of every character, type or description, including all reasonable costs and expenses of litigation, mediation or other alternate dispute resolution mechanism, including attorney and other professional fees for: (1) damage to or loss of the property of any person (including, but not limited to the City, the Contractor, their respective agents, officers, employees and subcontractors; the officers, agents, and employees of such subcontractors; and third parties); and/or (2) death, bodily injury, illness, disease, worker's compensation, loss of services, or loss of income or wages to any person (including but not limited to the agents, officers and employees of the City, the Contra subcontractors, and third parties), ii. "Fault" shall include the sale of defective or non- conforming deliverables, negligence, willful misconduct or a breach of any legally imposed strict liability standard. B. THE CONTRACTOR SHALL DEFEND (AT THE OPTION OF THE CITY), INDEMNIFY, AND HOLD THE CITY, ITS SUCCESSORS, ASSIGNS, OFFICERS, EMPLOYEES AND ELECTED OFFICIALS HARMLESS FROM AND AGAINST ALL INDEMNIFIED CLAIMS DIRECTLY ARISING OUT OF, INCIDENT TO, CONCERNING OR RESULTING FROM THE FAULT OF THE CONTRACTOR, OR THE CONTRACTOR'S AGENTS, EMPLOYEES OR SUBCONTRACTORS, IN THE 649 Contract # 7547 CONTRACT. NOTHING HEREIN SHALL BE DEEMED TO LIMIT THE RIGHTS OF THE CITY OR THE CONTRACTOR (INCLUDING, BUT NOT LIMITED TO, THE RIGHT TO SEEK CONTRIBUTION) AGAINST ANY THIRD PARTY WHO MAY BE LIABLE FOR AN INDEMNIFIED CLAIM. 32. INSURANCE: The following insurance requirements are applicable, in addition to the specific insurance requirements detailed in Appendix A for services only. The successful firm shall procure and maintain insurance of the types and in the minimum amounts acceptable to the City of Denton. The insurance shall be written by a company licensed to do business in the State of Texas and satisfactory to the City of Denton. A. General Requirements: i. The Contractor shall at a minimum carry insurance in the types and amounts indicated and agreed to, as submitted to the City and approved by the City within the procurement process, for the duration of the Contract, including extension options and hold over periods, and during any warranty period. endorsements required to the City as verification of coverage prior to contract execution and within fourteen (14) calendar days after written request from the City. Failure to provide the required Certificate of Insurance may subject the Offer to disqualification from consideration for award. The Contractor must also forward a Certificate of Insurance to the City whenever a previously identified policy period has expired, or an extension option or hold over period is exercised, as verification of continuing coverage. iii. The Contractor shall not commence work until the required insurance is obtained and until such insurance has been reviewed by the City. Approval of insurance by the City shall not relieve or decrease the liability of the Contractor hereunder and shall not be construed to be a limitation of liability on the part of the Contractor. iv. The Contractor must submit certificates of insurance to the City for all subcontractors prior to the subcontractors commencing work on the project. companies licensed to do business in the State of Texas at the time the policies are issued and shall be written by companies with A.M. Best ratings of A- VII or better. The City Insurance Fund. vi. All endorsements naming the City as additional insured, waivers, and notices of cancellation endorsements as well as the Certificate of Insurance shall contain the solicitation number and the following information: City of Denton Materials Management Department 901B Texas Street Denton, Texas 76209 insured shown on any policy. It is intended that policies required in the Contract, covering both the City and the Contractor, shall be considered primary coverage as applicable. viii. If insurance policies are not written for amounts agreed to with the City, the Contractor shall carry Umbrella or Excess Liability Insurance for any differences in amounts specified. If Excess Liability Insurance is provided, it shall follow the form of the primary coverage. ix. The City shall be entitled, upon request, at an agreed upon location, and without 650 Contract # 7547 expense, to review certified copies of policies and endorsements thereto and may make any reasonable requests for deletion or revision or modification of particular policy terms, conditions, limitations, or exclusions except where policy provisions are established by law or regulations binding upon either of the parties hereto or the underwriter on any such policies. x. The City reserves the right to review the insurance requirements set forth during the effective period of the Contract and to make reasonable adjustments to insurance coverage, limits, and exclusions when deemed necessary and prudent by the City based upon changes in statutory law, court decisions, the claims history of the industry or financial condition of the insurance company as well as the Contractor. xi. The Contractor shall not cause any insurance to be canceled nor permit any insurance to lapse during the term of the Contract or as required in the Contract. xii. The Contractor shall be responsible for premiums, deductibles and self-insured retentions, if any, stated in policies. All deductibles or self-insured retentions shall be disclosed on the Certificate of Insurance. notice of erosion of the aggregate limits below occurrence limits for all applicable required minimums and are not intended to limit the responsibility or liability of the Contractor. B. Specific Coverage Requirements: Specific insurance requirements are contained in the solicitation instrument. 33. CLAIMS: If any claim, demand, suit, or other action is asserted against the Contractor which arises under or concerns the Contract, or which could have a material adverse effect on the City within ten (10) calendar days after receipt of notice by the Contractor. Such notice to the City shall state the date of notification of any such claim, demand, suit, or other action; the names and addresses of the claimant(s); the basis thereof; and the name of each person against whom such claim is being asserted. Such notice shall be delivered personally or by mail and shall be sent to the City and to the Denton City Attorney. Personal delivery to the City Attorney shall be to City Hall, 215 East McKinney Street, Denton, Texas 76201. 34. NOTICES: Unless otherwise specified, all notices, requests, or other communications required or appropriate to be given under the Contract shall be in writing and shall be deemed delivered three (3) business days after postmarked if sent by U.S. Postal Service Certified or Registered Mail, Return Receipt Requested. Notices delivered by other means shall be deemed delivered upon receipt by the addressee. Routine communications may be made by first class mail, telefax, or other commercially accepted means. Notices to the Contractor shall be sent to the address specified r at such other address as a party may notify the other in writing. Notices to the City shall be addressed to the City at 901B Texas Street, Denton, Texas 76209 and marked to the attention of the Purchasing Manager. 35. RIGHTS TO BID, PROPOSAL AND CONTRACTUAL MATERIAL: All material submitted by the Contractor to the City shall become property of the City upon receipt. Any portions of such material claimed by the Contractor to be proprietary must be clearly marked as such. Determination of the public nature of the material is subject to the Texas Public Information 651 Contract # 7547 Act, Chapter 552, and Texas Government Code. 36. NO WARRANTY BY CITY AGAINST INFRINGEMENTS: The Contractor represents and warrants to the City that: (i) the Contractor shall provide the City good and indefeasible title to the deliverables and (ii) the deliverables supplied by the Contractor in accordance with the specifications in the Contract will not infringe, directly or contributorily, any patent, trademark, copyright, trade secret, or any other intellectual property right of any kind of any third party; that no claims have been made by any person or entity with respect to the ownership or operation of the deliverables and the Contractor does not know of any valid basis for any such claims. The Contractor shall, at its sole expense, defend, indemnify, and hold the City harmless from and against all liability, damages, and costs (including court costs and reasonable fees of attorneys and other professionals) arising out of or resulting from: (i) and its use of the deliverables infringes the intellectual property rights of any third party; or (ii) the Con In the event of any such claim, the City shall have the right to monitor such claim or at its option engage its own separate counsel to act as co-counsel on the the production, development, or delivery of such deliverables will not impact such warranties of Contractor. 37. CONFIDENTIALITY: In order to provide the deliverables to the City, Contractor may ng inventions, employee information, trade secrets, confidential know-how, confidential business information, and other information which the City or its licensors consider confidential) nd agrees that the Confidential Information is the valuable property of the City and/or its licensors and any unauthorized use, disclosure, dissemination, or other release of the Confidential Information will substantially injure the City and/or its licensors. The Contractor (including its employees, subcontractors, agents, or representatives) agrees that it will maintain the Confidential Information in strict confidence and shall not disclose, disseminate, copy, divulge, recreate, or otherwise use the Confidential Information without the prior written consent of the City or in a manner not expressly permitted under this Agreement, unless the Confidential Information is required to be disclosed by law or an order of any court or other governmental authority with proper jurisdiction, provided the Contractor promptly notifies the City before disclosing such information so as to permit the City reasonable time to seek an appropriate protective order. The Contractor agrees to use protective measures no less stringent than the Contractor uses within its own business to protect its own most valuable information, which protective measures shall under all circumstances be at least reasonable measures to ensure the continued confidentiality of the Confidential Information. 38. OWNERSHIP AND USE OF DELIVERABLES: The City shall own all rights, titles, and interests throughout the world in and to the deliverables. A. Patents. As to any patentable subject matter contained in the deliverables, the Contractor agrees to disclose such patentable subject matter to the City. Further, if requested by the City, the Contractor agrees to assign and, if necessary, cause each of its employees to assign the entire right, title, and interest to specific inventions under such patentable subject matter to the City and to execute, acknowledge, and deliver and, if necessary, cause each of its employees to execute, 652 Contract # 7547 acknowledge, and deliver an assignment of letters patent, in a form to be reasonably approved by the City, to the City upon request by the City. B. Copyrights. As to any deliverables containing copyrightable subject matter, the Contractor agrees that upon their creation, such deliverables shall be considered as work made-for-hire by the Contractor for the City and the City shall own all copyrights in and to such deliverables, provided Should by operation of law, such deliverables not be considered works made-for-hire, the Contractor hereby assigns to the City (and agrees to cause each of its employees providing services to the City hereunder to execute, acknowledge, and deliver an assignment to the City of) all worldwide right, title, and interest in and to such deliverables. With respect to such work made- for-hire, the Contractor agrees to execute, acknowledge, and deliver and cause each of its employees providing services to the City hereunder to execute, acknowledge, and deliver a work- made-for-hire agreement, in a form to be reasonably approved by the City, to the City upon delivery of such deliverables to the City or at such other time as the City may request. C. Additional Assignments. The Contractor further agrees to, and if applicable, cause each of its employees to, execute, acknowledge, and deliver all applications, specifications, oaths, assignments, and all other instruments which the City might reasonably deem necessary in order to apply for and obtain copyright protection, mask work registration, trademark registration and/or protection, letters patent, or any similar rights in any and all countries and in order to assign and convey to the City, its successors, assigns and nominees, the sole and exclusive right, title, and deliver (or cause to be executed, acknowledged, and delivered) instruments or papers such as those described in this Paragraph 38 a., b., and c. shall continue after the termination of this Contract with respect to such deliverables. In the event the City should not seek to obtain copyright protection, mask work registration or patent protection for any of the deliverables, but should desire to keep the same secret, the Contractor agrees to treat the same as Confidential Information under the terms of Paragraph 37 above. 39. PUBLICATIONS: All published material and written reports submitted under the Contract must be originally developed material unless otherwise specifically provided in the Contract. When material not originally developed is included in a report in any form, the source shall be identified. 40. ADVERTISING: The Contractor shall not advertise or publis consent, the fact that the City has entered into the Contract, except to the extent required by law. 41. NO CONTINGENT FEES: The Contractor warrants that no person or selling agency has been employed or retained to solicit or secure the Contract upon any agreement or understanding for commission, percentage, brokerage, or contingent fee, excepting bona fide employees of bona fide established commercial or selling agencies maintained by the Contractor for the purpose of securing business. For breach or violation of this warranty, the City shall have the right, in addition to any other remedy available, to cancel the Contract without liability and to deduct from any amounts owed to the Contractor, or otherwise recover, the full amount of such commission, percentage, brokerage or contingent fee. 42. GRATUITIES: The City may, by written notice to the Contractor, cancel the Contract without liability if it is determined by the City that gratuities were offered or given by the Contractor or 653 Contract # 7547 any agent or representative of the Contractor to any officer or employee of the City of Denton with a view toward securing the Contract or securing favorable treatment with respect to the awarding or amending or the making of any determinations with respect to the performing of such contract. In the event the Contract is canceled by the City pursuant to this provision, the City shall be entitled, in addition to any other rights and remedies, to recover or withhold the amount of the cost incurred by the Contractor in providing such gratuities. 43. PROHIBITION AGAINST PERSONAL INTEREST IN CONTRACTS: No officer, employee, independent consultant, or elected official of the City who is involved in the development, evaluation, or decision-making process of the performance of any solicitation shall have a financial interest, direct or indirect, in the Contract resulting from that solicitation as defined -757 and in the City Charter chapter 2 article XI(Ethics). Any willful violation of this section shall constitute impropriety in office, and any officer or employee guilty thereof shall be subject to disciplinary action up to and including dismissal. Any violation of this provision, with the knowledge, expressed or implied, of the Contractor shall render the Interest Questionnaire. 44. INDEPENDENT CONTRACTOR: The Contract shall not be construed as creating an employer/employee rela be those of an independent contractor. The Contractor agrees and understands that the Contract does not grant any rights or privileges established for employees of the City of Denton, Texas for the purposes of income tax, withholding, social security taxes, vacation or sick leave benefits, control of the Contractor or any employee of the Contractor, and it is expressly understood that Contractor shall perform the services hereunder according to the attached specifications at the general direction of the City Manager of the City of Denton, Texas, or his designee under this agreement. The contractor is expressly free to advertise and perform services for other parties while performing services for the City. 45. ASSIGNMENT-DELEGATION: The Contract shall be binding upon and ensure to the benefit of the City and the Contractor and their respective successors and assigns, provided however, that no right or interest in the Contract shall be assigned and no obligation shall be delegated by the Contractor without the prior written consent of the City. Any attempted assignment or delegation by the Contractor shall be void unless made in conformity with this paragraph. The Contract is not intended to confer rights or benefits on any person, firm or entity not a party hereto; it being the intention of the parties that there are no third party beneficiaries to the Contract. ownership, or address change for the purpose of maintaining updated City records. The president of the company or authorized official must sign the letter. A letter indicating changes in a company name or ownership must be accompanied with supporting legal documentation such as an updated W-9, documents filed with the state indicating such g the action, or an executed merger or acquisition agreement. Failure to do so may adversely impact future invoice payments. 46. WAIVER: No claim or right arising out of a breach of the Contract can be discharged in whole 654 Contract # 7547 or in part by a waiver or renunciation of the claim or right unless the waiver or renunciation is supported by consideration and is in writing signed by the aggrieved party. No waiver by either the Contractor or the City of any one or more events of default by the other party shall operate as, or be construed to be, a permanent waiver of any rights or obligations under the Contract, or an express or implied acceptance of any other existing or future default or defaults, whether of a similar or different character. 47. MODIFICATIONS: The Contract can be modified or amended only by a writing signed by both parties. No pre-printed or similar terms on any the Contractor invoice, order or other document shall have any force or effect to change the terms, covenants, and conditions of the Contract. 48. INTERPRETATION: The Contract is intended by the parties as a final, complete and exclusive statement of the terms of their agreement. No course of prior dealing between the parties or course of performance or usage of the trade shall be relevant to supplement or explain any term used in the Contract. Although the Contract may have been substantially drafted by one party, it is the intent of the parties that all provisions be construed in a manner to be fair to both parties, reading no provisions more strictly against one party or the other. Whenever a term defined by the Uniform Commercial Code, as enacted by the State of Texas, is used in the Contract, the UCC definition shall control, unless otherwise defined in the Contract. 49. DISPUTE RESOLUTION: A. If a dispute arises out of or relates to the Contract, or the breach thereof, the parties agree to negotiate prior to prosecuting a suit for damages. However, this section does not prohibit the filing of a lawsuit to toll the running of a statute of limitations or to seek injunctive relief. Either party may make a written request for a meeting between representatives of each party within fourteen (14) calendar days after receipt of the request or such later period as agreed by the parties. Each party shall include, at a minimum, one (1) senior level individual with decision-making authority regarding the dispute. The purpose of this and any subsequent meeting is to attempt in good faith to negotiate a resolution of the dispute. If, within thirty (30) calendar days after such meeting, the parties have not succeeded in negotiating a resolution of the dispute, they will proceed directly to mediation as described below. Negotiation may be waived by a written agreement signed by both parties, in which event the parties may proceed directly to mediation as described below. B. If the efforts to resolve the dispute through negotiation fail, or the parties waive the negotiation process, the parties may select, within thirty (30) calendar days, a mediator trained in mediation skills to assist with resolution of the dispute. Should they choose this option; the City and the Contractor agree to act in good faith in the selection of the mediator and to give consideration to qualified individuals nominated to act as mediator. Nothing in the Contract prevents the parties from relying on the skills of a person who is trained in the subject matter of the dispute or a contract interpretation expert. If the parties fail to agree on a mediator within thirty (30) calendar days of initiation of the mediation process, the mediator shall be selected by the Denton County Alternative Dispute Resolution Program (DCAP). The parties agree to participate in mediation in good faith for up to thirty (30) calendar days from the date of the first mediation session. The City and the participation such as fees for any consultants or attorneys they may utilize to represent them or otherwise assist them in the mediation. 50. JURISDICTION AND VENUE: The Contract is made under and shall be governed by the 655 Contract # 7547 laws of the State of Texas, including, when applicable, the Uniform Commercial Code as adopted in Texas, V.T.C.A., Bus. & Comm. Code, Chapter 1, excluding any rule or principle that would refer to and apply the substantive law of another state or jurisdiction. All issues arising from this Contract shall be resolved in the courts of Denton County, Texas and the parties agree to submit to the exclusive personal jurisdiction of such courts. The foregoing, however, shall not be construed or interpreted to limit or restrict the right or ability of the City to seek and secure injunctive relief from any competent authority as contemplated herein. 51. INVALIDITY: The invalidity, illegality, or unenforceability of any provision of the Contract shall in no way affect the validity or enforceability of any other portion or provision of the Contract. Any void provision shall be deemed severed from the Contract and the balance of the Contract shall be construed and enforced as if the Contract did not contain the particular portion or provision held to be void. The parties further agree to reform the Contract to replace any stricken provision with a valid provision that comes as close as possible to the intent of the stricken provision. The provisions of this section shall not prevent this entire Contract from being void should a provision which is the essence of the Contract be determined to be void. 52. HOLIDAYS: The following holidays are observed by the City: MLK Day Memorial Day 4th of July Labor Day Thanksgiving Day Day After Thanksgiving Christmas Eve (observed) Christmas Day (observed) If a Legal Holiday falls on Saturday, it will be observed on the preceding Friday. If a Legal Holiday falls on Sunday, it will be observed on the following Monday. Normal hours of operation shall be between 8:00 am and 4:00 pm, Monday through Friday, excluding City of Denton Holidays. Any scheduled deliveries or work performance not within the normal hours of operation must be approved by the City Manager of Denton, Texas or his authorized designee. 53. SURVIVABILITY OF OBLIGATIONS: All provisions of the Contract that impose continuing obligations on the parties, including but not limited to the warranty, indemnity, and confidentiality obligations of the parties, shall survive the expiration or termination of the Contract. 54. NON-SUSPENSION OR DEBARMENT CERTIFICATION: The City of Denton is prohibited from contracting with or making prime or sub-awards to parties that are suspended or debarred or whose principals are suspended or debarred from Federal, State, or City of Denton Contracts. By accepting a Contract with the City, the Vendor certifies that its firm and its principals are not currently suspended or debarred from doing business with the Federal Government, as indicated by the General Services Administration List of Parties Excluded from Federal Procurement and Non-Procurement Programs, the State of Texas, or the City of Denton. 55. EQUAL OPPORTUNITY 656 Contract # 7547 A. Equal Employment Opportunity: discriminatory employment practice. No person shall, on the grounds of race, sex, sexual orientation, age, disability, creed, color, genetic testing, or national origin, be refused the benefits of, or be otherwise subjected to discrimination under any activities resulting from this RFQ. B. Americans with Disabilities Act (ADA) Compliance: engage in any discriminatory employment practice against individuals with disabilities as defined in the ADA. 56.BUY AMERICAN ACT-SUPPLIES (Applicable to certain federally funded requirements) The following federally funded requirements are applicable. A. Definitions. As used in this paragraph i. "Component" means an article, material, or supply incorporated directly into an end product. ii. "Cost of components" means - (1) For components purchased by the Contractor, the acquisition cost, including transportation costs to the place of incorporation into the end product (whether or not such costs are paid to a domestic firm), and any applicable duty (whether or not a duty-free entry certificate is issued); or (2) For components manufactured by the Contractor, all costs associated with the manufacture of the component, including transportation costs as described in paragraph (1) of this definition, plus allocable overhead costs, but excluding profit. Cost of components does not include any costs associated with the manufacture of the end product. iii. "Domestic end product" means- (1) An unmanufactured end product mined or produced in the United States; or (2) An end product manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. Components of foreign origin of the same class or kind as those that the agency determines are not mined, produced, or manufactured in sufficient and reasonably available commercial quantities of a satisfactory quality are treated as domestic. Scrap generated, collected, and prepared for processing in the United States is considered domestic. iv. "End product" means those articles, materials, and supplies to be acquired under the contract for public use. v. "Foreign end product" means an end product other than a domestic end product. vi. "United States" means the 50 States, the District of Columbia, and outlying areas. B. The Buy American Act (41 U.S.C. 10a - 10d) provides a preference for domestic end products for supplies acquired for use in the United States. C. The City does not maintain a list of foreign articles that will be treated as domestic for this Contract; but will consider for approval foreign articles as domestic for this product if the articles are on a list approved by another Governmental Agency. The Offeror shall submit documentation with their Offer demonstrating that the article is on an approved Governmental list. D. The Contractor shall deliver only domestic end products except to the extent that it specified delivery of foreign end products in the provision of the Solicitation entitled "Buy American Act Certificate". 57. RIGHT TO INFORMATION: The City of Denton reserves the right to use any and all information presented in any response to this contract, whether amended or not, except as prohibited by law. Selection of rejection of the submittal does not affect this right. 58. LICENSE FEES OR TAXES: Provided the solicitation requires an awarded contractor or supplier to be licensed by the State of Texas, any and all fees and taxes are the responsibility of the 657 Contract # 7547 respondent. 59. PREVAILING WAGE RATES: The contractor shall comply with prevailing wage rates as defined by the United States Department of Labor Davis-Bacon Wage Determination at http://www.dol.gov/whd/contracts/dbra.htm and at the Wage Determinations website www.wdol.gov for Denton County, Texas (WD-2509). 60.COMPLIANCE WITH ALL STATE, FEDERAL, AND LOCAL LAWS: The contractor or supplier shall comply with all State, Federal, and Local laws and requirements. The Respondent must comply with all applicable laws at all times, including, without limitation, the following: (i) §36.02 of the Texas Penal Code, which prohibits bribery; (ii) §36.09 of the Texas Penal Code, which prohibits the offering or conferring of benefits to public servants. The Respondent shall give all notices and comply with all laws and regulations applicable to furnishing and performance of the Contract. 61. FEDERAL, STATE, AND LOCAL REQUIREMENTS: Respondent shall demonstrate on- site compliance with the Federal Tax Reform Act of 1986, Section 1706, amending Section 530 of the Revenue Act of 1978, dealing with issuance of Form W-2's to common law employees. Respondent is responsible for both federal and State unemployment insurance coverage and all federal and State tax laws and withholding requirements. The City of Denton shall not be liable to Respondent or its employees for any Unemployment or Workers' Compensation coverage, or federal or State withholding requirements. Contractor shall indemnify the City of Denton and shall pay all costs, penalties, or losses resulting from Respondent's omission or breach of this Section. 62.DRUG FREE WORKPLACE: The contractor shall comply with the applicable provisions of the Drug-Free Work Place Act of 1988 (Public Law 100-690, Title V, Subtitle D; 41 U.S.C. 701 ET SEQ.) and maintain a drug-free work environment; and the final rule, government-wide requirements for drug-free work place (grants), issued by the Office of Management and Budget and the Department of Defense (32 CFR Part 280, Subpart F) to implement the provisions of the Drug-Free Work Place Act of 1988 is incorporated by reference and the contractor shall comply with the relevant provisions thereof, including any amendments to the final rule that may hereafter be issued. 63.RESPONDENT LIABILITY FOR DAMAGE TO GOVERNMENT PROPERTY: The Respondent shall be liable for all damages to government-owned, leased, or occupied property and equipment caused by the Respondent and its employees, agents, subcontractors, and suppliers, including any delivery or cartage company, in connection with any performance pursuant to the Contract. The Respondent shall notify the City of Denton Procurement Manager in writing of any such damage within one (1) calendar day. 64.FORCE MAJEURE: The City of Denton, any Customer, and the Respondent shall not be responsible for performance under the Contract should it be prevented from performance by an act of war, order of legal authority, act of God, or other unavoidable cause not attributable to the fault or negligence of the City of Denton. In the event of an occurrence under this Section, the Respondent will be excused from any further performance or observance of the requirements so affected for as long as such circumstances prevail and the Respondent continues to use commercially reasonable efforts to recommence performance or observance whenever and to 658 Contract # 7547 whatever extent possible without delay. The Respondent shall immediately notify the City of Denton Procurement Manager by telephone (to be confirmed in writing within five (5) calendar days of the inception of such occurrence) and describe at a reasonable level of detail the circumstances causing the non-performance or delay in performance. 65.NON-WAIVER OF RIGHTS: Failure of a Party to require performance by another Party under the Contract will not affect the right of such Party to require performance in the future. No the Contract shall operate to limit, impair, preclude, cancel, waive or otherwise affect such right or remedy. A waiver by a Party of any breach of any term of the Contract will not be construed as a waiver of any continuing or succeeding breach. 66.NO WAIVER OF SOVEREIGN IMMUNITY: The Parties expressly agree that no provision of the Contract is in any way intended to constitute a waiver by the City of Denton of any immunities from suit or from liability that the City of Denton may have by operation of law. 67.RECORDS RETENTION: The Respondent shall retain all financial records, supporting documents, statistical records, and any other records or books relating to the performances called for in the Contract. The Respondent shall retain all such records for a period of four (4) years after the expiration of the Contract, or until the CPA or State Auditor's Office is satisfied that all audit and litigation matters are resolved, whichever period is longer. The Respondent shall grant access to all books, records and documents pertinent to the Contract to the CPA, the State Auditor of Texas, and any federal governmental entity that has authority to review records due to federal funds being spent under the Contract. Should a conflict arise between any of the contract documents, it shall be resolved with the following order of precedence (if applicable). In any event, the final negotiated contract shall take precedence over any and all contract documents to the extent of such conflict. 1. Final negotiated contract 2. RFP/Bid documents 3. terms and conditions 4. Purchase order 5. Supplier terms and conditions 659 Contract # 7547 Exhibit D INSURANCE REQUIREMENTS AND Upon contract execution, all insurance requirements shall become contractual obligations, which the successful contractor shall have a duty to maintain throughout the course of this contract. STANDARD PROVISIONS: Without limiting any of the other obligations or liabilities of the Contractor, the Contractor shall provide and maintain until the contracted work has been completed and accepted by the City of Denton, Owner, the minimum insurance coverage as indicated hereinafter. Contractor shall file with the Purchasing Department satisfactory certificates of insurance including any applicable addendum or endorsements, containing the contract number and title of the project. Contractor may, upon written request to the Purchasing Department, ask for clarification of any insurance requirements at any time; however, Contractor shall not commence any work or deliver any material until he or she receives notification that the contract has been accepted, approved, and signed by the City of Denton. All insurance policies proposed or obtained in satisfaction of these requirements shall comply with the following general specifications, and shall be maintained in compliance with these general specifications throughout the duration of the Contract, or longer, if so noted: Each policy shall be issued by a company authorized to do business in the State of Texas with an A.M. Best Company rating of at least A or better. Any deductibles or self-insured retentions shall be declared in the proposal. If requested by the City, the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its officials, agents, employees and volunteers; or, the contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses. Liability policies shall be endorsed to provide the following: Name as Additional Insured the City of Denton, its Officials, Agents, Employees and volunteers. That such insurance is primary to any other insurance available to the Additional Insured with respect to claims covered under the policy and that this insurance applies separately to each insured against whom claim is made or suit is brought. The inclusion of more than one insured shall not operate to increase the insurer's limit of liability. Provide a Waiver of Subrogation in favor of the City of Denton, its officials, agents, employees, and volunteers. Cancellation: City requires 30 day written notice should any of the policies described on the certificate be cancelled or materially changed before the expiration date. 660 Contract # 7547 Should any of the required insurance be provided under a claims made form, Contractor shall maintain such coverage continuously throughout the term of this contract and, without lapse, for a period of three years beyond the contract expiration, such that occurrences arising during the contract term which give rise to claims made after expiration of the contract shall be covered. Should any of the required insurance be provided under a form of coverage that includes a general annual aggregate limit providing for claims investigation or legal defense costs to be included in the general annual aggregate limit, the Contractor shall either double the occurrence limits or obtain Owners and Contractors Protective Liability Insurance. Should any required insurance lapse during the contract term, requests for payments originating after such lapse shall not be processed until the City receives satisfactory evidence of reinstated coverage as required by this contract, effective as of the lapse date. If insurance is not reinstated, City may, at its sole option, terminate this agreement effective on the date of the lapse. SPECIFIC ADDITIONAL INSURANCE REQUIREMENTS: All insurance policies proposed or obtained in satisfaction of this Contract shall additionally comply with the following marked specifications, and shall be maintained in compliance with these additional specifications throughout the duration of the Contract, or longer, if so noted: [X] A. General Liability Insurance: General Liability insurance with combined single limits of not less than $1,000,000.00 shall be provided and maintained by the Contractor. The policy shall be written on an occurrence basis either in a single policy or in a combination of underlying and umbrella or excess policies. If the Commercial General Liability form (ISO Form CG 0001 current edition) is used: Coverage A shall include premises, operations, products, and completed operations, independent contractors, contractual liability covering this contract and broad form property damage coverage. Coverage B shall include personal injury. Coverage C, medical payments, is not required. If the Comprehensive General Liability form (ISO Form GL 0002 Current Edition and ISO Form GL 0404) is used, it shall include at least: Bodily injury and Property Damage Liability for premises, operations, products and completed operations, independent contractors and property damage resulting from explosion, collapse or underground (XCU) exposures. Broad form contractual liability (preferably by endorsement) covering this contract, personal injury liability and broad form property damage liability. 661 Contract # 7547 [X] Automobile Liability Insurance: Contractor shall provide Commercial Automobile Liability insurance with Combined Single Limits (CSL) of not less than $500,000 either in a single policy or in a combination of basic and umbrella or excess policies. The policy will include bodily injury and property damage liability arising out of the operation, maintenance and use of all automobiles and mobile equipment used in conjunction with this contract. Satisfaction of the above requirement shall be in the form of a policy endorsement for: any auto, or all owned hired and non-owned autos. [X]Workers Compensation Insurance Contractor shall purchase and maintain Workers Compensation insurance which, in addition to meeting the minimum statutory requirements for issuance of such insurance, has Employer's Liability limits of at least $100,000 for each accident, $100,000 per each employee, and a $500,000 policy limit for occupational disease. The City need not be named as an "Additional Insured" but the insurer shall agree to waive all rights of subrogation against the City, its officials, agents, employees and volunteers for any work performed for the City by the Named Insured. For building or construction projects, the Contractor shall comply with the provisions of Attachment 1 in accordance with §406.096 of the Texas Labor Code and rule 28TAC 110.110 of the Texas Workers Compensation Commission (TWCC). [ ] Owner's and Contractor's Protective Liability Insurance The Contractor shall obtain, pay for and maintain at all times during the prosecution of the work under this contract, an Owner's and Contractor's Protective Liability insurance policy naming the City as insured for property damage and bodily injury which may arise in the prosecution of the work or Contractor's operations under this contract. Coverage shall be that carries the Contractor's liability insurance. Policy limits will be at least $500,000.00 combined bodily injury and property damage per occurrence with a $1,000,000.00 aggregate. [ ] Fire Damage Legal Liability Insurance Coverage is required if Broad form General Liability is not provided or is unavailable to the contractor or if a contractor leases or rents a portion of a City building. Limits of not less than each occurrence are required. [ ] Professional Liability Insurance Professional liability insurance with limits not less than $1,000,000.00 per claim with respect to negligent acts, errors or omissions in connection with professional services is required under this Agreement. 662 Contract # 7547 [ ] Builders' Risk Insurance Builders' Risk Insurance, on an All-Risk form for 100% of the completed value shall be provided. Such policy shall include as "Named Insured" the City of Denton and all subcontractors as their interests may appear. [ ] Environmental Liability Insurance Environmental liability insurance for $1,000,000 to cover all hazards contemplated by this contract. [ ] Riggers Insurance Said coverage may be Installation Floater covering rigging contractors; or through ISO form IH 00 91 12 11, Said coverage shall mirror the limits provided by the CGL coverage [ ] Commercial Crime Provides coverage for the theft or disappearance of cash or checks, robbery inside/outside the premises, burglary of the premises, and employee fidelity. The employee fidelity including new hires. This type insurance should be required if the contractor has access to City funds. Limits of not less than $ each occurrence are required. [ ] Additional Insurance Other insurance may be required on an individual basis for extra hazardous contracts and specific service agreements. If such additional insurance is required for a specific contract, that requirement will be described in the "Specific Conditions" of the contract specifications. 663 Contract # 7547 ATTACHMENT 1 [ ] Governmental Entities A. Definitions: Certificate of coverage ("certificate")-A copy of a certificate of insurance, a certificate of authority to self-insure issued by the commission, or a coverage agreement (TWCC-81, TWCC-82, TWCC-83, or TWCC-84), showing statutory workers' compensation insurance coverage for the person's or entity's employees providing services on a project, for the duration of the project. Duration of the project - includes the time from the beginning of the work on the project until the contractor's/person's work on the project has been completed and accepted by the governmental entity. Persons providing services on the project ("subcontractor" in §406.096) - includes all persons or entities performing all or part of the services the contractor has undertaken to perform on the project, regardless of whether that person contracted directly with the contractor and regardless of whether that person has employees. This includes, without limitation, independent contractors, subcontractors, leasing companies, motor carriers, owner- operators, employees of any such entity, or employees of any entity which furnishes persons to provide services on the project. "Services" include, without limitation, providing, hauling, or delivering equipment or materials, or providing labor, transportation, or other service related to a project. "Services" does not include activities unrelated to the project, such as food/beverage vendors, office supply deliveries, and delivery of portable toilets. B. The contractor shall provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any overage agreements, which meets the statutory requirements of Texas Labor Code, Section 401.011(44) for all employees of the Contractor providing services on the project, for the duration of the project. C. The Contractor must provide a certificate of coverage to the governmental entity prior to being awarded the contract. D. If the coverage period shown on the contractor's current certificate of coverage ends during the duration of the project, the contractor must, prior to the end of the coverage period, file a new certificate of coverage with the governmental entity showing that coverage has been extended. E. The contractor shall obtain from each person providing services on a project, and provide to the governmental entity: 1. a certificate of coverage, prior to that person beginning work on the 664 Contract # 7547 project, so the governmental entity will have on file certificates of coverage showing coverage for all persons providing services on the project; and 2. no later than seven days after receipt by the contractor, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project. F. The contractor shall retain all required certificates of coverage for the duration of the project and for one year thereafter. G. The contractor shall notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the contractor knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project. H. The contractor shall post on each project site a notice, in the text, form and manner prescribed by the Texas Workers' Compensation Commission, informing all persons providing services on the project that they are required to be covered, and stating how a person may verify coverage and report lack of coverage. I. The contractor shall contractually require each person with whom it contracts to provide services on a project, to: 1. provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any coverage agreements, which meets the statutory requirements of Texas Labor Code, Section 401.011(44) for all of its employees providing services on the project, for the duration of the project; 2. provide to the contractor, prior to that person beginning work on the project, a certificate of coverage showing that coverage is being provided for all employees of the person providing services on the project, for the duration of the project; 3. provide the contractor, prior to the end of the coverage period, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project; 4. obtain from each other person with whom it contracts, and provide to the contractor: a. a certificate of coverage, prior to the other person beginning work on the project; and 665 Contract # 7547 b. a new certificate of coverage showing extension of coverage, prior to the end of the coverage period, if the coverage period shown on the current certificate of coverage ends during the duration of the project; 5. retain all required certificates of coverage on file for the duration of the project and for one year thereafter; 6. notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the person knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project; and 7. Contractually require each person with whom it contracts, to perform as required by paragraphs (1) - (7), with the certificates of coverage to be provided to the person for whom they are providing services. J. By signing this contract or providing or causing to be provided a certificate of coverage, the contractor is representing to the governmental entity that all employees of the contractor who will provide services on the project will be covered by workers' compensation coverage for the duration of the project, that the coverage will be based on proper reporting of classification codes and payroll amounts, and that all coverage agreements will be filed with the appropriate insurance carrier or, in the case of a self-insured, with the commission's Division of Self-Insurance Regulation. Providing false or misleading information may subject the contractor to administrative penalties, criminal penalties, civil penalties, or other civil actions. K. Th contract by the contractor which entitles the governmental entity to declare the contract void if the contractor does not remedy the breach within ten days after receipt of notice of breach from the governmental entity. 666 Contract # 7547 Exhibit E Certificate of Interested Parties Electronic Filing In 2015, the Texas Legislature adopted House Bill 1295, which added section 2252.908 of the Government Code. The law states that the City may not enter into this contract unless the Contractor submits a disclosure of interested parties (Form 1295) to the City at the time the Contractor submits the signed contract. The Texas Ethics Commission has adopted rules requiring the business entity to file Form 1295 electronically with the Commission. Contractor will be required to furnish a Certificate of Interest Parties before the contract is awarded, in accordance with Government Code 2252.908. The contractor shall: 1. Log onto the State Ethics Commission Website at : https://www.ethics.state.tx.us/whatsnew/elf_info_form1295.htm 2. Register utilizing the tutorial provided by the State 3. Print a copy of the completed Form 1295 4. Enter the Certificate Number on page 2 of this contract. 5. Complete and sign the Form 1295 6. Email the form to purchasing@cityofdenton.com with the contract number in the subject line. (EX: Contract 1234 Form 1295) The City must acknowledge the receipt of the filed Form 1295 not later than the 30th day after Council award. Once a Form 1295 is acknowledged, it will be posted to the Texas Ethics 667 Exhibit F Price Sheet Line #Description Unit Price 1 SINGLE OCCUPANCY ROOM (Rate per night)$53.99 2 DOUBLE OCCUPANCY ROOM(Rate per night)$53.99 RFP 7547 Temporary Emergency Shelter in Hotels 668 669 670 671 Exhibit CONFLICT OF INTEREST QUESTIONNAIRE - FORM CIQ For vendor or other person doing business with local governmental entity This questionnaire reflects changes made to the law by H.B. 23, 84th Leg., Regular Session. This questionnaire is being filed in accordance with Chapter 176, Local Government Code, by a vendor who has a business relationship as defined by Section 176.001(1-a) with a local governmental entity and the vendor meets requirements under Section 176.006(a). By law this questionnaire must be filed with the records administrator of the local government entity not later than the 7th business day after the date the vendor becomes aware of facts that require the statement to be filed. See Section 176.006(a-1), Local Government Code. A vendor commits an offense if the vendor knowingly violates Section 176.006, Local Government Code. An offense under this s ection is a misdemeanor. 1 Name of vendor who has a business relationship with local governmental entity. 2 Check this box if you are filing an update to a previously filed questionnaire. (The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7th business day after the date on which you became aware that the originally filed questionnaire was incomplete or inaccurate.) 3 Name of local government officer about whom the information in this section is being disclosed. Name of Officer This section, (item 3 including subparts A, B, C & D), must be completed for each officer with whom the vendor has an employment or other business relationship as defined by Section 176.001(1-a), Local Government Code. Attach additional pages to this Form CIQ as necessary. A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the vendor? Yes No B. Is the vendor receiving or likely to receive taxable income, other than investment income, from or at the direction of the local government officer named in this section AND the taxable income is not received from the local governmental entity? Yes No C. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer serves as an officer or director, or holds an ownership of one percent or more? Yes No D. Describe each employment or business and family relationship with the local government officer named in this section. 4 I have no Conflict of Interest to disclose. 5 Signature of vendor doing business with the governmental entity Date 672 Certificate Of Completion Envelope Id: 57DFC32D7EAE472293F3D7F626C910BD Status: Sent Subject: Please DocuSign: City Council Contract 7547 Temporary Emergency Shelter in Hotels Source Envelope: Document Pages: 37 Signatures: 4 Envelope Originator: Certificate Pages: 6 Initials: 1 Cori Power AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-06:00) Central Time (US & Canada) 901B Texas Street Denton, TX 76209 cori.power@cityofdenton.com IP Address: 198.49.140.104 Record Tracking Status: Original 1/15/2021 11:17:09 AM Holder: Cori Power cori.power@cityofdenton.com Location: DocuSign Signer Events Signature Timestamp Cori Power cori.power@cityofdenton.com Senior Buyer City of Denton Security Level: Email, Account Authentication (None) Completed Using IP Address: 198.49.140.104 Sent: 1/15/2021 11:18:41 AM Viewed: 1/15/2021 11:18:50 AM Signed: 1/15/2021 11:21:23 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Lori Hewell lori.hewell@cityofdenton.com Purchasing Manager City of Denton Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 198.49.140.104 Sent: 1/15/2021 11:21:25 AM Viewed: 1/15/2021 11:50:56 AM Signed: 1/15/2021 11:52:05 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Marcella Lunn marcella.lunn@cityofdenton.com Deputy City Attorney City of Denton Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 198.49.140.104 Sent: 1/15/2021 11:52:07 AM Viewed: 1/15/2021 3:22:53 PM Signed: 1/15/2021 3:31:53 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Jay Patel Deluxeinndenton@gmail.com Owner Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 163.116.129.117 Sent: 1/15/2021 3:31:57 PM Viewed: 1/15/2021 3:33:21 PM Signed: 1/19/2021 12:05:11 PM Electronic Record and Signature Disclosure: Accepted: 1/15/2021 3:33:21 PM ID: 9a5b98c1-fd70-4727-8de4-a1172fb18401 673 Signer Events Signature Timestamp Danielle Shaw Danielle.Shaw@cityofdenton.com Community Services Manager Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 198.49.140.10 Sent: 1/19/2021 12:05:15 PM Viewed: 1/19/2021 12:44:40 PM Signed: 1/19/2021 12:45:36 PM Electronic Record and Signature Disclosure: Accepted: 1/19/2021 12:44:40 PM ID: da0d3110-5f4a-4102-972f-250499749a9e Cheyenne Defee cheyenne.defee@cityofdenton.com Contract Administrator City of Denton Security Level: Email, Account Authentication (None) Sent: 1/19/2021 12:45:40 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Todd Hileman Todd.Hileman@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Accepted: 7/25/2017 11:02:14 AM ID: 57619fbf-2aec-4b1f-805d-6bd7d9966f21 Rosa Rios rosa.rios@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Cheyenne Defee cheyenne.defee@cityofdenton.com Contract Administrator City of Denton Security Level: Email, Account Authentication (None) Sent: 1/15/2021 11:21:25 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Sherri Thurman sherri.thurman@cityofdenton.com City of Denton Security Level: Email, Account Authentication (None) Sent: 1/19/2021 12:45:40 PM 674 Carbon Copy Events Status Timestamp Electronic Record and Signature Disclosure: Not Offered via DocuSign Gretna Jones gretna.jones@cityofdenton.com Legal Secretary City of Denton Security Level: Email, Account Authentication (None) Sent: 1/19/2021 12:45:40 PM Viewed: 1/19/2021 1:29:08 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Zolaina Parker Zolaina.Parker@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Zolina Parker zolina.parker@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Danielle Shaw Danielle.Shaw@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Cheyenne Defee cheyenne.defee@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 1/15/2021 11:18:41 AM Payment Events Status Timestamps Electronic Record and Signature Disclosure 675 676 677 678 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-222,Version:1 AGENDA CAPTION Consider adoption of an ordinance of the City of Denton,a Texas home-rule municipal corporation,authorizing the City Manager,or his designee,to execute a Professional Services Agreement with NewGen Strategies and Solutions,LLC,a Colorado Limited Liability Company,for transmission rate case filing services related to actions before the Public Utility Commission of Texas as set forth in the contract;providing for the expenditure of funds therefor;and providing an effective date (RFQ 7532 -Professional Services Agreement for case filing services awarded to NewGen Strategies and Solutions, LLC, in the not-to-exceed amount of $500,000.00). City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™679 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Procurement & Compliance ACM: David Gaines DATE: February 9, 2021 SUBJECT Consider adoption of an ordinance of the City of Denton, a Texas home-rule municipal corporation, authorizing the City Manager, or his designee, to execute a Professional Services Agreement with NewGen Strategies and Solutions, LLC, a Colorado Limited Liability Company, for transmission rate case filing services related to actions before the Public Utility Commission of Texas as set forth in the contract; providing for the expenditure of funds therefor; and providing an effective date (RFQ 7532 – Professional Services Agreement for case filing services awarded to NewGen Strategies and Solutions, LLC, in the not- to-exceed amount of $500,000.00). INFORMATION/BACKGROUND Transmission Cost of Service (TCOS) is an Electric Reliability Council of Texas (ERCOT) program created to promote transmission infrastructure construction that improves the overall grid. The TCOS program is a financial tool for Transmission Service Providers (TSP) to recover transmission project costs and earn a reasonable return on investment. Denton Municipal Electric(DME) has made significant investments in the transmission system infrastructure over the last 17 years. DME’s last full rate case filing in 2004 established DME’s TCOS rate at a percentage not to exceed 28.05%. In accordance with the Public Utility Commission of Texas (PUCT) requirements, TSPs file interim filings in lieu of full rate filings. DME has utilized interim filings for the last 17 years. Within that timeframe, the City has seen significant growth. The increased growth coupled with DME’s latest Earnings Report resulted in the PUCT ordering DME to file a full comprehensive rate filing package by November 2021. To assist with the PUCTs rate filings procedures, the City solicited for a consulting services specializing in rate filings. The selected firm will provide accounting calculations, document preparation, expert testimony, and other technical services as required. Request for Qualifications (RFQ) for professional surveying services was sent to 612 prospective firms for these services. In addition, the RFQ was placed on the Materials Management website for prospective respondents to download and advertised in the local newspaper. Two (2) statement of qualifications (SOQ) were received. The SOQs were evaluated based on published criteria including identification and understanding of the City’s requirements, probable and past performance and experience, and schedule. Based upon this evaluation, the recommended award is to NewGen Strategies and Solutions, LLC and is determined to be the most qualified firm for the City. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 680 NIGP Code Used for Solicitation: 918 – (Service Only) – Consulting Services Notifications sent for Solicitation sent in IonWave: 612 Number of Suppliers that viewed Solicitation in IonWave: 18 HUB-Historically Underutilized Business Invitations sent out: 53 SBE-Small Business Enterprise Invitations sent out: 187 Responses from Solicitation: 2 PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) On February 8, 2021, this item will be presented to the Public Utilities Board (PUB) for consideration. RECOMMENDATION Award a contract with NewGen Strategies and Solutions, LLC, for the services of a full rate case filing to the Public Utility Commission of Texas, in a not-to-exceed amount of $500,000. PRINCIPAL PLACE OF BUSINESS NewGen Strategies and Solutions, LLC Lakewood, CO ESTIMATED SCHEDULE OF PROJECT NewGen is available to begin work immediately after the contract is awarded and do the following: • Send a detailed data request to support the July of 2021 Interim-TCOS-RFP filing and host a Kick- Off/Planning Meeting. • Send a second data request to support the November of 2021 Full-TCOS-RFP filing. • Maintain ongoing communication with DME staff regarding any happenings at the PUCT and support any new Full-TCOS-RFPs, Interim-TCOS-RFPs, or Earnings Reports. FISCAL INFORMATION These services will be funded from Denton Municipal Electric Operating Funds. EXHIBITS Exhibit 1: Agenda Information Sheet Exhibit 2: Evaluation Sheet Exhibit 3: LLC Members Exhibit 4: Ordinance and Contract Respectfully submitted: Lori Hewell, 940-349-7100 Purchasing Manager For information concerning this acquisition, contact: Chris Lutrick, 940-349-7152. Legal point of contact: Marcella Lunn at 940-349-8333. 681 NewGen Strategies and Solutions, LLC Schneider Engineering, Ltd. Lakewood, CO Boerne, TX Item #Description 1 Delivery/Project Schedule - 30%24 14 2 Compliance with Specifications - 30%26 18 3 Probable Performance - 40%37 19 87.2 51.6 Exhibit 2 RFQ 7532 - Evaluation Sheet for PUCT Rate Filing Services Respondent's Business Name: Principal Place of Business (City and State): Total Score: 682 683 684 685 Docusign City Council Transmittal Coversheet File Name Purchasing Contact City Council Target Date Piggy Back Option Contract Expiration Ordinance DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 Christa Christian Not Applicable PSA PUCT Rate Filing Services 7532 City of Denton, Texas Contract 7532 Standard Agreement for Professional Services Revised Date: 9/11/18 Page 1 of 12 PROFESSIONAL SERVICES AGREEMENT FOR CONSULTING SERVICES FILE 7532 STATE OF TEXAS § COUNTY OF DENTON § THIS AGREEMENT (the “Agreement”) is made and entered into on ________________________, by and between the City of Denton, Texas, a Texas municipal corporation, with its principal office at 215 East McKinney Street, Denton, Denton County, Texas 76201, hereinafter called “OWNER” and NewGen Strategies and Solutions, LLC, a Colorado Limited Liability Company with its corporate office at 225 Union Blvd., Suite 305, Lakewood, CO. 80228, hereinafter called “CONSULTANT,” acting herein, by and through their duly authorized representatives. WITNESSETH, that in consideration of the covenants and agreements herein contained, the parties hereto do mutually agree as follows: ARTICLE I CONSULTANT AS INDEPENDENT CONTRACTOR The OWNER has selected CONSULTANT on the basis of demonstrated competence and qualifications to perform the services herein described for a fair and reasonable price pursuant to Chapter 2254 of the Texas Government Code. The OWNER hereby contracts with the CONSULTANT as an independent contractor and not as an employee, and as such, the OWNER will not assert control over the day-to-day operations of the CONSULTANT. The CONSULTANT is customarily engaged to provide services as described herein independently and on a nonexclusive basis in the course of its business. This Agreement does not in any way constitute a joint venture between OWNER and CONSULTANT. The CONSULTANT hereby agrees to perform the services described herein based on the skills required for the scope of work in connection with the Project as stated in the sections to follow, with diligence and in accordance with the highest professional standards customarily obtained for such services in the State of Texas. The professional services set out herein are in connection with the following described project: The Project shall include, without limitation, PUCT Rate Filing Services, as described in Exhibit A, which is on file at the purchasing office and incorporated herein (the “Project”). ARTICLE II SCOPE OF BASIC SERVICES The CONSULTANT shall perform the following services in a professional manner: DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 687 City of Denton, Texas Contract 7532 Standard Agreement for Professional Services Revised Date: 9/11/18 Page 2 of 12 A. The CONSULTANT shall perform all those services as necessary and as described in the OWNER’s RFQ 7532– PUCT Rate Filing Services, which is on file at the purchasing office and made a part hereof as Exhibit A as if written word for word herein. B. To perform all those services set forth in CONSULTANT’s proposal, which proposal is attached hereto and made a part hereof as Exhibit B as if written word for word herein. C. CONSULTANT shall perform all those services set forth in individual task orders, as described in Exhibit B, which shall be attached to this Agreement and made a part hereof. D. If there is any conflict between the terms of this Agreement and the exhibits attached to this Agreement, the terms and conditions of this Agreement will control over the terms and conditions of the attached exhibits or task orders. ARTICLE III ADDITIONAL SERVICES Additional services to be performed by the CONSULTANT, if authorized by the OWNER, which are not included in the above-described Basic Services, may be negotiated as needed, per rates included in Exhibit C. A. Preparing applications and supporting documents for government grants, loans, or planning advances and providing data for detailed applications. B. Preparing data and reports for assistance to OWNER in preparation for hearings before regulatory agencies, courts, arbitration panels or mediator, giving testimony, personally or by deposition, and preparations therefore before any regulatory agency, court, arbitration panel or mediator. C. Assisting OWNER in preparing for, or appearing at litigation, mediation, arbitration, dispute review boards, or other legal and/or administrative proceedings in the defense or prosecution of claims disputes with Contractor(s). D. Assisting OWNER in the defense or prosecution of litigation in connection with or in addition to those services contemplated by this AGREEMENT. Such services, if any, shall be furnished by CONSULTANT on a fee basis negotiated by the respective parties outside of and in addition to this AGREEMENT. E. Visits to the site in excess of the number of trips included in Exhibit B. F. Preparing statements for invoicing or other documentation for billing other than for the standard invoice for services attached to this professional services agreement. DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 688 City of Denton, Texas Contract 7532 Standard Agreement for Professional Services Revised Date: 9/11/18 Page 3 of 12 ARTICLE IV TIME OF COMPLETION CONSULTANT is authorized to commence work under this contract upon execution of this AGREEMENT. CONSULTANT shall perform and complete its obligations herein in a prompt and continuous manner, so as to not delay the completion of the Project in accordance with the schedules as described in Exhibit B. The contract shall remain effective for a period which may reasonably be required for the completion of the Project, acceptance by an authorized representative of the OWNER, exhaustion of authorized funds, or termination as provided in this Agreement, whichever occurs first. ARTICLE V COMPENSATION A. COMPENSATION TERMS: 1. “Subcontract Expense” is defined as expenses incurred by the CONSULTANT in employment of others in outside firms for services related to this agreement. 2. “Direct Non-Labor Expense” is defined as that expense for any assignment incurred by the CONSULTANT for supplies, transportation and equipment, travel, communications, subsistence, and lodging away from home, and similar incidental expenses in connection with that assignment. B. BILLING AND PAYMENT: For and in consideration of the professional services to be performed by the CONSULTANT herein, the OWNER agrees to pay, based on the cost estimate detail at an hourly rate shown in Exhibit C which is attached hereto and made a part of this Agreement as if written word for word herein, a total fee, including reimbursement for direct non-labor expenses not to exceed $500,000. Partial payments to the CONSULTANT will be made on the basis of detailed monthly statements rendered to and approved by the OWNER through its City Manager or his designee; however, under no circumstances shall any monthly statement for services exceed the value of the work performed at the time a statement is rendered. Nothing contained in this Article shall require the OWNER to pay for any work which is unsatisfactory, as reasonably determined by the City Manager or his designee, or which is not submitted in compliance with the terms of this Agreement. The OWNER shall not be required to make any payments to the CONSULTANT when the CONSULTANT is in default under this Agreement. It is specifically understood and agreed that the CONSULTANT shall not be authorized to undertake any work pursuant to this Agreement which would require additional payments by the OWNER for any charge, expense, or reimbursement above the maximum not to exceed fee as stated, without first having obtained written authorization from the OWNER. The CONSULTANT shall not proceed to perform the services listed in Article III “Additional Services,” without obtaining prior written authorization from the OWNER. DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 689 City of Denton, Texas Contract 7532 Standard Agreement for Professional Services Revised Date: 9/11/18 Page 4 of 12 C. ADDITIONAL SERVICES: For additional services authorized in writing by the OWNER in Article III, the CONSULTANT shall be paid based on the Schedule of Charges at an hourly rate shown in Exhibit C. Payments for additional services shall be due and payable upon submission by the CONSULTANT and approval by the City staff, and shall be in accordance with subsection B hereof. Statements shall not be submitted more frequently than monthly. D. PAYMENT: If the OWNER fails to make payments due the CONSULTANT for services and expenses within thirty (30) days after receipt of the CONSULTANT’s undisputed statement thereof, the amounts due the CONSULTANT will be paid interest in accordance with the Texas Government Code 2251.025. Additionally, the CONSULTANT may, after giving seven (7) days’ written notice to the OWNER, suspend services under this Agreement until the CONSULTANT has been paid in full all amounts due for services, expenses, and charges. Nothing herein shall require the OWNER to pay the late charge if the OWNER reasonably determines that the work is unsatisfactory, in accordance with this Article V, “Compensation,” there is a bona fide dispute concerning the amount due, or the invoice was not mailed to the address or in the form as described in this Agreement. The OWNER will notify CONSULTANT of any disputes within twenty-one (21) days of receipt of the invoice. E. Invoices shall be sent directly to the City of Denton Accounts Payable Department, 215 E McKinney St, Denton, TX, 76201-4299. A pro-forma invoice shall be sent to the contract administrator. It is the intention of the City of Denton to make payment on completed orders within thirty days after receipt of invoice or items; whichever is later, unless unusual circumstances arise. Invoices must be fully documented as to labor, materials, and equipment provided, if applicable, and must reference the City of Denton Purchase Order Number in order to be processed. No payments shall be made on invoices not listing a Purchase Order Number. ARTICLE VI OBSERVATION AND REVIEW OF THE WORK The CONSULTANT will exercise reasonable care and due diligence in discovering and promptly reporting to the OWNER any defects or deficiencies in the work of the CONSULTANT or any subcontractors or subconsultants. ARTICLE VII OWNERSHIP OF DOCUMENTS All documents prepared or furnished by the CONSULTANT (and CONSULTANT’s subcontractors or subconsultants) pursuant to this Agreement are instruments of service, and shall become the property of the OWNER upon the termination of this Agreement. The CONSULTANT is entitled to retain copies of all such documents. The documents prepared and furnished by the CONSULTANT are intended only to be applicable to this Project, and OWNER’s use of these documents in other projects shall be at OWNER’s sole risk and expense. In the event the OWNER uses any of the information or materials developed pursuant to this Agreement in another project or for other purposes than specified herein, CONSULTANT is released from any and all liability relating to their use in that project. DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 690 City of Denton, Texas Contract 7532 Standard Agreement for Professional Services Revised Date: 9/11/18 Page 5 of 12 ARTICLE VIII INDEMNITY AGREEMENT THE CONSULTANT SHALL INDEMNIFY AND SAVE AND HOLD HARMLESS THE OWNER AND ITS OFFICERS, OFFICIALS, AGENTS, AND EMPLOYEES FROM AND AGAINST ANY AND ALL LIABILITY, CLAIMS, DEMANDS, DAMAGES, LOSSES, AND EXPENSES, INCLUDING, BUT NOT LIMITED TO COURT COSTS AND REASONABLE ATTORNEY FEES ASSERTED AGAINST OR INCURRED BY THE OWNER, AND INCLUDING, WITHOUT LIMITATION, DAMAGES FOR BODILY AND PERSONAL INJURY, DEATH AND PROPERTY DAMAGE, RESULTING FROM THE NEGLIGENT ACTS OR OMISSIONS OF THE CONSULTANT OR ITS OFFICERS, SHAREHOLDERS, AGENTS, OR EMPLOYEES INCIDENTAL TO, RELATED TO, AND IN THE EXECUTION, OPERATION, OR PERFORMANCE OF THIS AGREEMENT. Nothing in this Agreement shall be construed to create a liability to any person who is not a party to this Agreement, and nothing herein shall waive any of the parties’ defenses, both at law or equity, to any claim, cause of action, or litigation filed by anyone not a party to this Agreement, including the defense of governmental immunity, which defenses are hereby expressly reserved. ARTICLE IX INSURANCE During the performance of the services under this Agreement, CONSULTANT shall maintain insurance in compliance with the requirements of Exhibit D which is attached hereto and made a part of this Agreement as if written word for word herein. ARTICLE X ALTERNATIVE DISPUTE RESOLUTION The parties may agree to settle any disputes under this Agreement by submitting the dispute to mediation with each party bearing its own costs of mediation. No mediation arising out of or relating to this Agreement, involving one party’s disagreement may include the other party to the disagreement without the other’s approval. Mediation will not be a condition precedent to suit. ARTICLE XI TERMINATION OF AGREEMENT A. Notwithstanding any other provision of this Agreement, either party may terminate by giving thirty (30) days’ advance written notice to the other party. B. This Agreement may be terminated in whole or in part in the event of either party substantially failing to fulfill its obligations under this Agreement. No such termination will be affected unless the other party is given (1) written notice (delivered by certified mail, return receipt requested) of intent to terminate and setting forth the reasons specifying the non-performance, and not less than fifteen (15) calendar days to cure the failure; and (2) an opportunity for consultation with the terminating party prior to termination. DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 691 City of Denton, Texas Contract 7532 Standard Agreement for Professional Services Revised Date: 9/11/18 Page 6 of 12 C. If the Agreement is terminated prior to completion of the services to be provided hereunder, CONSULTANT shall immediately cease all services and shall render a final bill for services to the OWNER within thirty (30) days after the date of termination. The OWNER shall pay CONSULTANT for all services properly rendered and satisfactorily performed and for reimbursable expenses to termination incurred prior to the date of termination, in accordance with Article V “Compensation.” Should the OWNER subsequently contract with a new consultant for the continuation of services on the Project, CONSULTANT shall cooperate in providing information. The CONSULTANT shall turn over all documents prepared or furnished by CONSULTANT pursuant to this Agreement to the OWNER on or before the date of termination, but may maintain copies of such documents for its use. ARTICLE XII RESPONSIBILITY FOR CLAIMS AND LIABILITIES Approval by the OWNER shall not constitute, nor be deemed a release of the responsibility and liability of the CONSULTANT, its employees, associates, agents, subcontractors, and subconsultants for the accuracy and competency of their designs or other work; nor shall such approval be deemed to be an assumption of such responsibility by the OWNER for any defect in the design or other work prepared by the CONSULTANT, its employees, subcontractors, agents, and consultants. ARTICLE XIII NOTICES All notices, communications, and reports required or permitted under this Agreement shall be personally delivered or mailed to the respective parties by depositing same in the United States mail to the address shown below, certified mail, return receipt requested, unless otherwise specified herein. Mailed notices shall be deemed communicated as of three (3) days’ mailing: To CONSULTANT: To OWNER: NewGen Strategies and Solutions, LLC City of Denton Joseph Mancinelli Purchasing Manager –File 7532 225 Union Blvd., Suite 305 901B Texas Street Lakewood, CO 90228 Denton, Texas 76209 All notices shall be deemed effective upon receipt by the party to whom such notice is given, or within three (3) days’ mailing. ARTICLE XIV ENTIRE AGREEMENT This Agreement and related exhibits constitute the complete and final expression of this Agreement of the parties, and is intended as a complete and exclusive statement of the terms of their agreements, and supersedes all prior contemporaneous offers, promises, representations, DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 692 City of Denton, Texas Contract 7532 Standard Agreement for Professional Services Revised Date: 9/11/18 Page 7 of 12 negotiations, discussions, communications, and agreements which may have been made in connection with the subject matter hereof. ARTICLE XV SEVERABILITY If any provision of this Agreement is found or deemed by a court of competent jurisdiction to be invalid or unenforceable, it shall be considered severable from the remainder of this Agreement and shall not cause the remainder to be invalid or unenforceable. In such event, the parties shall reform this Agreement to replace such stricken provision with a valid and enforceable provision which comes as close as possible to expressing the intention of the stricken provision. ARTICLE XVI COMPLIANCE WITH LAWS The CONSULTANT shall comply with all federal, state, and local laws, rules, regulations, and ordinances applicable to the work covered hereunder as those laws may now read or hereinafter be amended. ARTICLE XVII DISCRIMINATION PROHIBITED In performing the services required hereunder, the CONSULTANT shall not discriminate against any person on the basis of race, color, religion, sex, sexual orientation, national origin or ancestry, age, or physical handicap. ARTICLE XVIII PERSONNEL A. The CONSULTANT represents that it has or will secure, at its own expense, all personnel required to perform all the services required under this Agreement. Such personnel shall not be employees or officers of, or have any contractual relations with the OWNER. CONSULTANT shall inform the OWNER of any conflict of interest or potential conflict of interest that may arise during the term of this Agreement. B. All services required hereunder will be performed by the CONSULTANT or under its supervision. All personnel engaged in work shall be qualified, and shall be authorized and permitted under state and local laws to perform such services. ARTICLE XIX ASSIGNABILITY The CONSULTANT acknowledges that this Agreement is based on the demonstrated competence and specific qualifications of the CONSULTANT and is therefore personal as to the CONSULTANT. Therefore, the CONSULTANT shall not assign any interest in this Agreement, DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 693 City of Denton, Texas Contract 7532 Standard Agreement for Professional Services Revised Date: 9/11/18 Page 8 of 12 and shall not transfer any interest in this Agreement (whether by assignment, novation, or otherwise) without the prior written consent of the OWNER. ARTICLE XX MODIFICATION No waiver or modification of this Agreement or of any covenant, condition, or limitation herein contained shall be valid unless in writing and duly executed by the party to be charged therewith, and no evidence of any waiver or modification shall be offered or received in evidence in any proceeding arising between the parties hereto out of or affecting this Agreement, or the rights or obligations of the parties hereunder, and unless such waiver or modification is in writing and duly executed; and the parties further agree that the provisions of this section will not be waived unless as set forth herein. ARTICLE XXI MISCELLANEOUS A. The following exhibits are attached to and made a part of this Agreement: Exhibit A – RFQ 7532– PUCT Rate Filing Services (on file at the purchasing office) Exhibit B – Consultant’s Scope of Services Offer and Project Schedule Exhibit C – Consultant’s Compensation Rate Sheet Exhibit D – Consultant’s Insurance Requirements Exhibit E – Conflict of Interest Questionnaire What is called for by one exhibit shall be as binding as if called for by all. In the event of an inconsistency or conflict in this Agreement and any of the provisions of the exhibits, the inconsistency or conflict shall be resolved by giving precedence first to this Agreement then to the exhibits in the order in which they are listed above. B. This Agreement shall be governed by, construed, and enforced in accordance with, and subject to, the laws of the State of Texas or federal law, where applicable, without regard to the conflict of law principles of any jurisdiction. In the event there shall be any dispute arising out of the terms and conditions of, or in connection with, this Agreement, the party seeking relief shall submit such dispute to the District Courts of Denton County or if federal diversity or subject matter jurisdiction exists, to the United States District Court for the Eastern District of Texas-Sherman Division. C. For the purpose of this Agreement, the key persons who will perform most of the work hereunder shall be __________________. However, nothing herein shall limit CONSULTANT from using other equally qualified and competent members of its firm to perform the services required herein. D. CONSULTANT shall commence, carry on, and complete any and all projects with all applicable dispatch, in a sound, economical, and efficient manner and in accordance with the provisions hereof. In accomplishing the projects, CONSULTANT shall take such steps DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 Jill Schuepbach, Grant Rabon, Laurie Tomczyk and Joe Mancinelli 694 City of Denton, Texas Contract 7532 Standard Agreement for Professional Services Revised Date: 9/11/18 Page 9 of 12 as are appropriate to ensure that the work involved is properly coordinated with related work being carried on by the OWNER. E. The OWNER shall assist the CONSULTANT by placing at the CONSULTANT’s disposal all available information pertinent to the Project, including previous reports, any other data relative to the Project, and arranging for the access thereto, and make all provisions for the CONSULTANT to enter in or upon public and private property as required for the CONSULTANT to perform services under this Agreement. F. The captions of this Agreement are for informational purposes only, and shall not in any way affect the substantive terms or conditions of this Agreement. G. The parties agree to transact business electronically. Any statutory requirements that certain terms be in writing will be satisfied using electronic documents and signing. Electronic signing of this document will be deemed an original for all legal purposes. ARTICLE XXII INDEPENDENT CONTRACTOR CONSULTANT shall provide services to OWNER as an independent contractor, not as an employee of the OWNER. CONSULTANT shall not have or claim any right arising from employee status. ARTICLE XXIII RIGHT TO AUDIT The OWNER shall have the right to audit and make copies of the books, records and computations pertaining to this agreement. The CONTRACTOR shall retain such books, records, documents and other evidence pertaining to this agreement during the contract period and five years thereafter, except if an audit is in progress or audit findings are yet unresolved, in which case records shall be kept until all audit tasks are completed and resolved. These books, records, documents and other evidence shall be available, within 10 business days of written request. Further, the CONTRACTOR shall also require all Subcontractors, material suppliers, and other payees to retain all books, records, documents and other evidence pertaining to this agreement, and to allow the OWNER similar access to those documents. All books and records will be made available within a 50 mile radius of the City of Denton. The cost of the audit will be borne by the OWNER unless the audit reveals an overpayment of 1% or greater. If an overpayment of 1% or greater occurs, the reasonable cost of the audit, including any travel costs, must be borne by the CONTRACTOR which must be payable within five business days of receipt of an invoice. Failure to comply with the provisions of this section shall be a material breach of this contract and shall constitute, in the OWNER’S sole discretion, grounds for termination thereof. Each of the terms "books", "records", "documents" and "other evidence", as used above, shall be construed to include drafts and electronic files, even if such drafts or electronic files are subsequently used to generate or prepare a final printed document. DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 695 City of Denton, Texas Contract 7532 Standard Agreement for Professional Services Revised Date: 9/11/18 Page 10 of 12 ARTICLE XXIV Prohibition On Contracts With Companies Boycotting Israel Supplier acknowledges that in accordance with Chapter 2270 of the Texas Government Code, City is prohibited from entering into a contract with a company for goods or services unless the contract contains a written verification from the company that it: (1) does not boycott Israel; and (2) will not boycott Israel during the term of the contract. The terms “boycott Israel” and “company” shall have the meanings ascribed to those terms in Section 808.001 of the Texas Government Code. By signing this agreement, Supplier certifies that Supplier’s signature provides written verification to the City that Supplier: (1) does not boycott Israel; and (2) will not boycott Israel during the term of the agreement. Failure to meet or maintain the requirements under this provision will be considered a material breach. ARTICLE XXV Prohibition On Contracts With Companies Doing Business with Iran, Sudan, or a Foreign Terrorist Organization Section 2252 of the Texas Government Code restricts CITY from contracting with companies that do business with Iran, Sudan, or a foreign terrorist organization. By signing this agreement, Supplier certifies that Supplier’s signature provides written verification to the City that Supplier, pursuant to Chapter 2252, is not ineligible to enter into this agreement and will not become ineligible to receive payments under this agreement by doing business with Iran, Sudan, or a foreign terrorist organization. Failure to meet or maintain the requirements under this provision will be considered a material breach. ARTICLE XXVI CERTIFICATE OF INTERESTED PARTIES ELECTRONIC FILING In 2015, the Texas Legislature adopted House Bill 1295, which added section 2252.908 of the Government Code. The law states that the City may not enter into this contract unless the Contractor submits a disclosure of interested parties (Form 1295) to the City at the time the Contractor submits the signed contract. The Texas Ethics Commission has adopted rules requiring the business entity to file Form 1295 electronically with the Commission. Contractor will be required to furnish a Certificate of Interest Parties before the contract is awarded, in accordance with Government Code 2252.908. The contractor shall: 1. Log onto the State Ethics Commission Website at : https://www.ethics.state.tx.us/whatsnew/elf_info_form1295.htm 2. Register utilizing the tutorial provided by the State 3. Print a copy of the completed Form 1295 4. Enter the Certificate Number on page 2 of this contract. 5. Complete and sign the Form 1295 6. Email the form to purchasing@cityofdenton.com with the contract number in the subject line. (EX: Contract 1234 – Form 1295) DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 696 City of Denton, Texas Contract 7532 Standard Agreement for Professional Services Revised Date: 9/11/18 Page 11 of 12 The OWNER must acknowledge the receipt of the filed Form 1295 not later than the 30th day after Council award. Once a Form 1295 is acknowledged, it will be posted to the Texas Ethics Commission’s website within seven business days. IN WITNESS HEREOF, the City of Denton, Texas has caused this Agreement to be executed by its duly authorized City Manager, and CONSULTANT has executed this Agreement through its duly authorized undersigned officer on this date______________________ CITY OF DENTON, TEXAS “OWNER” __________________________________ TODD HILEMAN, CITY MANAGER ATTEST: ROSA RIOS, CITY SECRETARY BY: _______________________________ Company Name, A Colorado Limited Liability Company “CONSULTANT” __________________________________ BY: Joseph Mancinelli ITS: ____________________________ __________________________________ TEXAS ETHICS COMMISSION CERTIFICATE NUMBER THIS AGREEMENT HAS BEEN BOTH REVIEWED AND APPROVED as to financial and operational obligations and business terms. _______________ Antonio Puente, Jr SIGNATURE PRINTED NAME Executive Manager of Utilities_________ TITLE _Denton Municipal Electric___________ DEPARTMENT APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: ____________________________ DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 Director 2021-710708 Terrance Naulty 697 City of Denton, Texas Contract 7532 Standard Agreement for Professional Services Revised Date: 9/11/18 Page 12 of 12 Exhibit A RFQ 7532 – PUCT Rate Filing Services (on file at the purchasing office) DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 698 PUCT TRANSMISSION COST OF SERVICE RATE FILING SERVICES CITY OF DENTON, TX – DENTON MUNICIPAL ELECTRIC RFQ #7532 | December 17, 2020 www.newgenstrategies.net PREPARED BY: SUSTAINABILITYSTAKEHOLDERS ECONOMICS STRATEGY DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271 EXHIBIT B DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 699 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 700 Economics | Strategy | Stakeholders | Sustainability www.newgenstrategies.net 225 Union Boulevard, Suite 305 Lakewood, CO 80228 Phone: (720) 633-9514 Fax: (720) 633-9535 December 17, 2020 Submitted electronically (https://dentontx.ionwave.net) Ms. Christa Christian, CPPB Senior Buyer City of Denton 901-B Texas Street Denton, TX 76209 Subject: Request for Qualifications #: 7532 Transmission Rate Analysis and Filing Proposal Dear Ms. Christian: The City of Denton’s (City) Strategic Plan includes organization excellence, public infrastructure improvements, economic development, the health and safety of the community, and environmental stewardship. Denton Municipal Electric (DME) is helping to meet these strategic initiatives with the purchase of electric vehicles (EV) in 2018, contracts for renewable energy, rebates for efficiency upgrades and EVs, conversion of streetlights to light emitting diodes (LED), employee safety, and improvements to system reliability. As part of improving system reliability and supporting growth, DME has made significant investments in the transmission system infrastructure. As DME adds transmission assets, DME can apply at the Public Utility Commission of Texas (PUCT) to update their wholesale transmission rate in the Electric Reliability Council of Texas (ERCOT). The transmission rate is paid by all other Transmission Service Providers (TSPs) in ERCOT and allows DME to recover transmission-related expenses, as well as a return on their transmission investment. DME is requesting professional consulting services to update the DME wholesale transmission rate and provide supporting analyses, white papers, and negotiations as needed. DME’s last full comprehensive filing was based on a test year ending September 30, 2003. After reviewing the annual Earnings Reports, the PUCT ordered DME to file a full comprehensive rate filing package in 2021. Since the last full filing, DME has invested significantly in transmission plant, built the Denton Energy Center, and recently acquired a large new customer. All these changes affect DME’s balance sheet and income statement and will affect the transmission revenue requirement to be filed at the PUCT. The transmission revenue requirement is an important source of revenue to DME; therefore, maximizing cost recovery of the transmission system provides a direct benefit to DME retail electric customers. That is why we propose to provide DME with a robust, insightful, and thorough transmission cost of service analysis to recover as many transmission-related costs as possible from TSPs through the wholesale rate. We know that DME is committed to providing the safest, most reliable electric service possible at the lowest possible price while ensuring the best overall value to its retail customers. We propose to support your needs with a rate consulting team that is extremely familiar with the wholesale transmission rate filing process and has worked with numerous law firms in the Austin area. Our Project Team is staffed with professionals who have worked on wholesale transmission rate projects at the PUCT for over 20 years. Our team has a long history of working with municipal entities across the country on a variety of critical financial and economic issues. As a company, we routinely provide insight DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 701 Ms. Christa Christian December 17, 2020 2 Thoughtful Decision Making for Uncertain Times and analysis for electric, water, wastewater, solid waste, natural gas, and other municipal utility areas. For DME, we offer our combination of extensive transmission cost of service analysis and litigation experience. I will be the primary point of contact for this proposal response and the individual authorized to contractually bind the firm. My contact information is included below. Ms. Schuepbach, who is experienced in transmission cost of service (TCOS) matters, will be your Project Manager. We look forward to the prospect of renewing our working relationship with DME. If you have questions concerning this proposal or would like additional information, please contact me directly at (720) 633- 9509 or jmancinelli@newgenstrategies.net. Sincerely, NewGen Strategies and Solutions, LLC Joe Mancinelli Jill Schuepbach President & CEO Executive Consultant (720) 633-9509 (720) 924-7134 jmancinelli@newgenstrategies.net jschuepbach@newgenstrategies.net DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 702 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 Economics | Strategy | Stakeholders | Sustainability www.newgenstrategies.net Table of Contents COMPANY HISTORY AND BACKGROUND ........................................................................................ 1 PROJECT UNDERSTANDING ............................................................................................................ 1 SCOPE OF SERVICES ........................................................................................................................ 2 Task A: Rate Analyses and Filing ............................................................................................................... 3 Phase 1: Development of Interim-TCOS-RFP and Full-TCOS-RFP ......................................................... 3 Phase 2: TCOS Case Support ................................................................................................................. 6 Tasks B, C, and D: Continued Support ....................................................................................................... 7 PROJECT SCHEDULE ........................................................................................................................ 7 PROJECT TEAM ................................................................................................................................ 7 PERTINENT EXPERIENCE .................................................................................................................. 9 APPENDIX A – RESUMES APPENDIX B – LETTERS OF RECOMMENDATION APPENDIX C – SAMPLE REPORTS DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 703 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 704 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 Thoughtful Decision Making for Uncertain Times 1 COMPANY HISTORY AND BACKGROUND NewGen Strategy and Solutions, LLC (NewGen) is a management and economic consulting firm specializing in serving the utility industry and market. Established in August 2012, NewGen primarily serves public sector utilities and provides nationally recognized expertise in utility cost of service and rate design studies, load forecasting, financial feasibility studies, municipalization efforts, depreciation and appraisal studies, litigation support for state and federal regulatory proceedings, utility financial planning, and stakeholder engagement for electric, water, wastewater, solid waste, and natural gas utilities. NewGen was created by consultants who are dedicated to our clients’ missions and recognized as experts in our respective fields of service. “Thoughtful Decision Making for Uncertain Times” succinctly describes our capability to provide our clients with solutions and recommendations tempered with our keen insight into the growing role of stakeholders, resource availability (including renewables), environmental concerns, cost of providing utility services, and economic conditions. This ensures an integrated approach to delivering our products and services. NewGen employs 48 professional and administrative staff, with 10 ownership members and a Board. Our current staff has the capability to work on simultaneous assignments, and we have the capacity to add staff and/or expand support from a network of teaming partners if needed. NewGen has 10 offices located nationwide. PROJECT UNDERSTANDING Transmission Service Providers (TSPs) in the Electric Reliability Council of Texas (ERCOT) can earn a return of and on their applicable transmission assets. TSPs have the choice to set their transmission rate through a full comprehensive transmission cost of service (TCOS) filing, or an interim update filing. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 705 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 2 Thoughtful Decision Making for Uncertain Times Under a full comprehensive TCOS filing, the application is submitted with written testimony describing the analyses and results as required by the Public Utility Commission of Texas’ (PUCT) Transmission Cost of Service Rate Filing Package for Non-Investor Owned Transmission Service Providers in the ERCOT (Non- IOU TCOS-RFP or Full-TCOS-RFP) as adopted December 16, 1999 (Project No. 21276). Under an interim update filing, the filing package is submitted with written testimony describing the analyses and results as required by the PUCT’s Filing Requirements for Interim Update of Wholesale Transmission Rates - Rate Filing Package (Interim-TCOS-RFP). TSPs also file TCOS Earnings Report by June 1 of each year as required by 16 Texas Administrative Code (TAC) § 25.73(b). The PUCT Staff files a memorandum summarizing their analysis of each TSP’s Earnings Report. The PUCT Staff memorandum for the 2019 Earnings Reports recommended that Denton Municipal Electric (DME) be called in to file a Full-TCOS-RFP. The PUCT Staff’s reasons were:  DME’s last comprehensive TCOS was over 15 years ago.  DME’s revenue requirement has increased thirteenfold since 2005.  DME’s transmission rate base has increased sixteenfold since 2005.  DME’s authorized rate of return of 28.05% was based on the Cash Flow Method, which may no longer be appropriate given the growth of DME.  DME’s rate of return has consistently increased over the last three years.  DME has the 7th highest Non-IOU cost of service. The first six Non-IOUs have been in for filings more recently than DME. Per the PUCT Staff recommendations, DME is to file a Full-TCOS-RFP between September 30, 2021 and December 31, 2021 using a test year coincident with DME’s fiscal year ending September 30, 2020. The Full-TCOS-RFP must include a full development of an electric system revenue requirement, which is then allocated to the transmission business function. The Full-TCOS-RFP requires numerous schedules that contain information related to DME’s cost of doing business and operating information. The Full-TCOS- RFP must be submitted with written testimony describing the analyses and results as required by the Full- TCOS-RFP General Instructions. Once filed, the information will be scrutinized by PUCT staff and possibly other intervening parties. Given this requirement, DME is looking for a consultant with considerable experience in providing professional services to support DME with an Interim-TCOS-RFP by July of 2021, a Full-TCOS-RFP by November of 2021, and subsequent Interim-TCOS-RFPs as needed. DME is also requesting ongoing support as needed. NewGen has worked for many Texas utilities supporting Full-TCOS-RFPs, Interim- TCOS-RFPs, Earnings Reports, and utilities called in by the PUCT for overearning. NewGen has performed each of the municipal rate methodologies allowed in the Full-TCOS-RFP, which include the rate of return method, the debt service coverage method, and the cash flow method. NewGen will review each of the approved methodologies as applied to DME and will advise and recommend to DME the most advantageous method. SCOPE OF SERVICES The detailed Scope of Services supporting four primary tasks is outlined below. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 706 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 Thoughtful Decision Making for Uncertain Times 3 Task A: Rate Analyses and Filing This effort will include all analyses, schedules, workpapers, testimony, and the updated tariff to support any Interim-TCOS-RFP or the DME Full-TCOS-RFP . We will attend all meetings and coordinate with DME and DME’s Legal Team. Phase 1: Development of Interim-TCOS-RFP and Full-TCOS-RFP Phase 1 includes an Interim-TCOS-RFP to be filed in July of 2021 and a Full-TCOS-RFP to be filed in November of 2021. Task A.1 Interim-TCOS-RFP: July 2021 TSPs may update their TCOS rate by filing an Interim-TCOS-RFP or a Full-TCOS-RFP. The Interim-TCOS-RFP is an expedited process to update a TSP’s TCOS rate. The Interim-TCOS-RFP process allows TSPs to update their TCOS rate based on any changes in transmission plant and depreciation. Testimony explaining the transmission projects must accompany the required schedules. NewGen will create the schedules and workpapers as required by the Interim-TCOS-RFP. Note that interim filing must use the revenue requirement methodology previously approve by the PUCT. Task A.1.1: Data Request and Review NewGen will provide DME a detailed data request addressing important information required in developing the Interim-TCOS-RFP for test year ending June 30, 2021. The requested information will pertain to DME’s previous TCOS filings, transmission plant in service, accumulated depreciation, depreciation expense, transmission facility descriptions, and other relevant information. After reviewing the data, NewGen will host a Kick-Off or Planning Meeting with DME. The Project Team will meet via conference call with DME and their Legal Team to discuss strategy and options for the Interim-TCOS-RFP. Deliverables:  Data Request.  Kick-Off/Planning Meeting. Task A.1.2: Revenue Requirement and Schedule Development The revenue requirement, schedules, and workpapers will be developed consistent with the Interim- TCOS-RFP. We will rely on DME’s most recent financial data for either fiscal year end or more recent data based on any new transmission plant placed into service. Upon completion of this task, the Project Team will meet via conference call with DME and their Legal Team to discuss study results. Deliverables:  Draft Interim TCOS model containing all schedules and workpapers. Task A.1.3: Prepare Rate Filing Package Upon completion of Task A.1.2, we expect that DME’s Legal Team will identify the witnesses and associated scope of testimony required for the filing. We anticipate that NewGen will prepare all DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 707 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 4 Thoughtful Decision Making for Uncertain Times schedules, workpapers, testimony, and the updated tariff in support of the analysis and filing. We anticipate one NewGen witness; either Ms. Schuepbach, Mr. Rabon, or Mr. Mancinelli will be available to sponsor the TCOS calculations and supporting schedules. Deliverables:  Final Interim TCOS model containing all schedules, workpapers, and exhibits.  Updated Tariff with proposed wholesale transmission rate.  Testimony supporting the schedules, workpapers, exhibits, and tariff. Once filed at the PUCT, ongoing support will be provided as described in Phase 2 below and Task B, C, and D. Task A.2: Full-TCOS-RFP to be filed in November 2021 The comprehensive Full-TCOS-RFP includes a full development of an electric system revenue requirement which is then allocated to the transmission business function. The Full-TCOS-RFP requires numerous schedules which contain information related to the TSP’s cost of doing business and operating information. Functionalization factors are developed to functionalize costs related to operation and maintenance expense, debt service, capital, and other items which are assigned to the transmission business unit. Functionalization factors consider operation and maintenance procedures, labor cost, plant investment, infrastructure design and use, voltage, and many other considerations. The test year revenue requirement for the transmission system is prepared using these allocators. The revenue requirement is developed consistent with the PUCT’s filing requirements. The Full-TCOS-RFP is then submitted with written testimony describing the analyses and results as required by the PUCT’s rules. The following tasks outline the steps in this process. Task A.2.1: Data Request and Review NewGen will provide DME a detailed data request addressing important information required in developing the Full-TCOS-RFP for test year ending September 30, 2021. The requested information will pertain to DME’s revenues, operation and maintenance costs, debt service, capital planning, plant in service, transmission facility descriptions, system operating data, and other relevant information. After reviewing the data, NewGen will host a Planning Meeting with DME. The Project Team will meet via conference call with DME and their Legal Team to discuss strategy and options for the Full-TCOS-RFP. Deliverables:  Data Request.  Planning Meeting. Task A.2.2: Test Year Revenue Requirement Based on information gathered in Task A.2.1, NewGen will develop a test year revenue requirement for the transmission system based on the historical fiscal year 2020. Known and measurable adjustments will be made to the historical results, as appropriate. The revenue requirement will be developed consistent with the PUCT’s filing requirements. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 708 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 Thoughtful Decision Making for Uncertain Times 5 Deliverables:  Electric Revenue Requirement. Task A.2.3: Functionalization Factors NewGen will develop appropriate functionalization factors that assign costs related to operation and maintenance expense, debt service, capital, and other items to the transmission business unit. Functionalization factors will consider DME operation and maintenance procedures, labor cost, plant investment, infrastructure design and use, voltage, and many other considerations. Functionalization factors will be developed consistent with the PUCT’s guidelines. Deliverables:  Functionalization Factors.  Functionalized Revenue Requirement. Task A.2.4: Rate of Return Analysis and Strategies NewGen will perform a preliminary TCOS analysis based on a test year coincident with DME’s fiscal year ending September 30, 2020 and provide strategies for TCOS rate adjustments. For the Full-TCOS-RFP, the PUCT allows three methods to be used for municipal utilities to calculate return: Rate of Return, Debt Service Coverage, and Cash Flow. Each of the three methods will be reviewed over multiple years as the most beneficial method to DME may change as capital structure, transmission plant balances, or interest rates change. The Cash Flow method develops a transmission revenue requirement on a “cash basis” similar to the approach widely used by municipal utilities in retail rate making. The Cash Flow method determines the cash need of the transmission function which primary includes operation and maintenance expenses, debt service, cash funded capital projects, and payment of the City in lieu of taxes. The Debt Service Coverage Method is similar to the Cash Flow Method but sets the revenue requirements based on operation and maintenance expenses, debt service, and a coverage requirement as allowed by the PUCT for municipal utilities. Finally, the Rate of Return Method uses the “Utility Approach” to ratemaking and establishes a revenue requirement primarily using operation and maintenance expense, depreciation expense, interest expense, and return on rate base. Rate Base primarily consists of DME’s net transmission plant in service. The appropriate level of return is calculated using the Weighted Average Cost of Capital which examines DME’s capital structure and associated cost of debt and cost of equity. For municipal utilities like DME, the PUCT suggests a cost of equity as a function of the cost of debt. NewGen will evaluate the advantages and disadvantages of DME filing under the three methods. NewGen will develop the appropriate schedules and workpapers to support the rate of return method that benefits DME. The workpapers may include adjustments and industry references. Upon completion, the Project Team will meet via conference call with DME and the Legal Team to discuss the results. NewGen will identify specific aspects of the analyses that are straightforward and other potential areas that may be subject to alternative interpretation by the PUCT staff and interveners. NewGen will discuss the TCOS strategy going forward, including which return method benefits DME over time, and when DME should file to reset their TCOS rate. Based on the review of the analysis, revisions may be made to optimize DME’s bargaining position entering the TCOS case. Based on feedback received during this task of the Study, we will finalize the analysis. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 709 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 6 Thoughtful Decision Making for Uncertain Times Deliverables:  Preliminary TCOS analysis using three methods of return.  Conference call to discuss TCOS results.  Rate of Return Calculation. Task A.2.5: Schedules and Workpapers Applying functionalization factors developed in Task A.2.3 to the revenue requirement developed in Task A.2.2 yields the allocated TCOS for DME. Task A.2.4 results will determine the allowed ”return” on DME transmission assets that will be included in the revenue requirement. NewGen will create the schedules and workpapers as required by the Full-TCOS-RFP. Deliverables:  TCOS model including all schedules and workpapers for DME Legal Team review. Task A.2.6: Prepare Rate Filing Package Upon completion of Task A.2.5, we expect that DME’s Legal Team will identify the number of witnesses and associated scope of testimony required for the filing. NewGen will prepare all required schedules, workpapers, testimony, and the updated tariff in support of the filing. We anticipate one or two NewGen witnesses and we are flexible in assigning witnesses to the filing given the issues and the guidance of Legal Team. Deliverables:  Final full comprehensive TCOS model containing all schedules, workpapers, and exhibits.  Updated Tariff with proposed wholesale transmission rate.  Testimony supporting the schedules, workpapers, exhibits, and tariff. Once filed at the PUCT, ongoing support will be provided as described in Phase 2 below and Tasks B, C, and D. Phase 2: TCOS Case Support Our work efforts in Phase 2 will be largely dictated by the PUCT staff and any intervenors. Phase 2 is entirely reactive and is subject to the response the case receives once filed. We anticipate work efforts will be related to responding to interveners and PUCT staff questions through the discovery process, developing rebuttal testimony, and testifying at the hearing. Given the uncertain nature of this work, we propose to provide Phase 2 services on a time and materials basis. Deliverables:  Attend all requested meetings.  Support DME in response to the PUCT Staff’s requests for information.  Support DME in all negotiations or settlement meetings. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 710 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 Thoughtful Decision Making for Uncertain Times 7  Provide rebuttal testimony if required. Tasks B, C, and D: Continued Support The purpose of Tasks B, C, and D is to support DME in a variety of activities including coordinating with Legal Teams, ongoing regulatory support, analytical support, negotiation support, and consulting advice. Task B involves monitoring the PUCT’s activities including orders and staff recommendations that may have an impact on DME. New Gen will attend meetings as DME’s representative when requested by DME. NewGen will routinely communicate with DME regarding any future events. Task C involves working with both DME’s internal and external Legal Teams to draft, complete, and file all Interim-TCOS-RFPs and Full-TCOS-RFPs with the PUCT on behalf of DME. Task D includes additional analyses and project work as requested or directed by DME. Deliverables:  Attend meetings to support DME’s interests.  Monitor the PUCT’s activities as they relate to DME.  Collaborate and coordinate with DME’s Legal Teams.  Provide support including analytical, negotiations, or consulting advice. Any support provided to Denton in Tasks B, C, or D will only be performed upon written authorization of Denton. Given the unknown level of effort for this work, we propose to provide Task B, C, and D services on a time and materials basis. PROJECT SCHEDULE NewGen is available to begin work immediately. Upon award of this contract, NewGen will send a detailed data request to support the Interim-TCOS-RFP being filed in July of 2021 and host a Kick-Off/Planning Meeting. Once the Interim-TCOS-RFP is filed, NewGen will send a second data request to support the Full- TCOS-RFP to be filed in November of 2021. After the Full-TCOS-RFP is filed, NewGen will maintain ongoing communication with DME staff regarding any happenings at the PUCT and to support any new Full-TCOS-RFPs, Interim-TCOS-RFPs, or Earnings Reports. PROJECT TEAM NewGen evaluates the needs of each project and responds by assembling a Project Team of knowledgeable professionals who are uniquely qualified to provide the services needed. The Project Team includes experts in cost of service, rate design, transmission rates and tariffs, and analytical support needed to accurately execute the work. NewGen seeks to be a trusted advisor to all our clients, and our Project Team is committed to completing the identified services in a timely and professional manner. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 711 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 8 Thoughtful Decision Making for Uncertain Times Jill Schuepbach will be the Project Manager for the Scope of Work. For Task A, NewGen proposes that either Jill Schuepbach, Grant Rabon, or Joe Mancinelli will be the lead witness. Tasks B, C, and D will also be supported by Grant Rabon. Analytical and administrative staff will prove support as needed. All Project Team members have significant experience in the development of transmission rates using the various PUCT available rate of return methodologies. Our team will be based in both our Denver, Colorado and Austin, Texas offices. Jill Schuepbach and Joe Mancinelli work in our Denver office, which has 14 employees. Grant Rabon works in our Austin office, which has 6 employees. The addresses of each office are included below. Branch Office Locations & Phone Numbers Austin 8140 N Mopac Expy, Bldg 1, Suite 240 Austin, TX 78759 (512) 479-7900 Denver 225 Union Blvd, Suite 305 Denver, CO 80228 (720) 633-9514 A summary of the Project Team’s experience and qualifications follow. In addition, full resumes for each of the three proposed Project Team members are included as Appendix A. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 712 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 Thoughtful Decision Making for Uncertain Times 9 Joseph Mancinelli, President & CEO | Phone Number: (720) 633-9509 Joe Mancinelli has over 30 years of experience as a utility consultant serving the public utility industry. He is President and CEO of NewGen Strategies and Solutions, LLC and has worked extensively for public power utilities across the country. Joe has advised electric utilities, Public Utility Commissions, and large end users on utility economics, retail and wholesale rates, stakeholder engagement, and related policy issues. He regularly teaches across the country on ratemaking techniques and skills associated with being an effective expert witness. In addition to rates and stakeholder engagement, Joe has extensive experience in the areas of financial planning, bond financings, asset valuation, competitive assessments, organizational reviews, and strategic planning. Jill Schuepbach, Executive Consultant | Phone Number: (720) 924-7134 Jill Schuepbach has over 20 years of experience in the electric, water, wastewater, and natural gas utility industries. Jill has proven analytical skills in the areas of engineering economics, financial planning, and utility COS and rate design studies. In addition, Jill has experience with feasibility studies, fuel price forecasting, market research, demand- side management evaluations, litigation support, and expert witness testimony. Her project experience includes work for municipal, investor-owned, and member-owned utility clients. Grant Rabon, Executive Consultant | Phone Number: (512) 900-8232 Since 2005, Grant Rabon has managed electric, water, wastewater, and solid waste utility projects designed to safeguard clients’ financial integrity primarily through the performance of financial risk assessments and feasibility studies, valuations/appraisals, litigation support, and comprehensive cost of service analyses. He has testified at the Public Utility Commission of Texas and the Louisiana Public Service Commission. He has presented at industry conferences on the topics of rate design, financial planning, compensation for decertification, regionalization, electric transmission regulation in Texas, and distributed generation. Further, he is one of less than 20 individuals in the nation with an Accredited Senior Appraiser designation in Public Utilities from the American Society of Appraisers. PERTINENT EXPERIENCE The Project Team is well qualified to provide DME with the services identified in the Request for Qualifications (RFQ). Below we have included selected project descriptions that we believe are relevant to services being requested by DME. Greenville Electric Utility System (GEUS) | Full-TCOS-RFP, PUCT Petition to Reduce GEUS TCOS Rate, and TCOS Earnings Report Filing Date of Service: 1998 – 2020 Contact Name: Alicia Hooks, General Manager Contact Info: 6000 Joe Ramsey Blvd., Greenville, TX 75402| (903) 457-2811 | ahooks@geus.org DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 713 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 10 Thoughtful Decision Making for Uncertain Times Full-TCOS-RFP (Docket Nos. 51556, 42581, 37180, and 21648) TSPs can update their TCOS rate by filing a Full-TCOS-RFP. The Full-TCOS-RFP includes a full development of an electric system revenue requirement which is then allocated to the transmission business function. The filing package requires numerous schedules which contain information related to the TSP’s cost of doing business and operating information. Functionalization factors are developed to functionalize costs related to operation and maintenance expense, debt service, capital, and other items which are assigned to the transmission business unit. Functionalization factors consider operation and maintenance procedures, labor cost, plant investment, infrastructure design and use, voltage, and many other considerations. The test year revenue requirement for the transmission system is prepared using these allocators. The revenue requirement is developed consistent with the PUCT’s filing requirements. The Full-TCOS-RFP was submitted with written testimony describing the analyses and results as required by the PUCT’s rules. Since 1996, NewGen has periodically filed testimony before the PUCT in support of GEUS’s wholesale transmission rates in ERCOT. NewGen filed Full-TCOS-RFPs in 1996, 1999, 2009, 2014, and 2020. NewGen’s testimony was supported by a comprehensive unbundled cost of service analysis. PUCT Petition to Reduce GEUS TCOS Rate (Docket No. 27789) Each year the PUCT Staff files a memorandum summarizing their analysis of each TSP’s Earnings Reports filed under the provisions of 16 TAC § 25.73. As a result of the PUCT Staff’s review of the 2001 Earnings Reports, the PUCT filed a petition in 2003 to call in GEUS for excess earnings. NewGen negotiated with the PUCT Staff on GEUS’s behalf to justify the GEUS revenue requirement and rate base. The PUCT and GEUS settled and signed a Stipulation Agreement resolving specific contested issues raised by the PUCT Staff in the petition. TCOS Earnings Report Filing (Docket Nos. 50655, 49355, 48158, 46910, 45636, 44550, 42290, 41327, 40327, 39211, 37993, 36823, 35466, 34025, 32534, 30805, and 29343) TSPs file a TCOS Earnings Report annually as required by PUCT Electric Substantive Rule 25.73(b). The Earnings Report Filing requires the update of schedules and workpapers, and the use of the functionalization factors that were approved in the last Full-TCOS-RFP. Based on these functionalization factors, the costs related to operation and maintenance expense, debt service, capital, and other items are assigned to the transmission business unit. Functionalization factors consider operation and maintenance procedures, labor cost, plant investment, infrastructure design and use, voltage, and many other considerations. The test year revenue requirement for the transmission system is prepared using these allocators. The revenue requirement is developed consistent with the PUCT’s filing requirements. Since 2001, NewGen has prepared the annual TCOS Earnings Reports for GEUS. NewGen compiles the filing documents including schedules, workpapers, and exhibits. NewGen works in close coordination with GEUS’s legal team to file the required public and confidential documents. The most recent TCOS Earnings Report was completed on June 1, 2020 for fiscal year 2019. Bryan Texas Utilities (BTU) | Interim-TCOS-RFP and TCOS Earnings Report Filing Date of Service: 2012 – 2020 Contact Name: Doug Lyles, Chief Risk Officer & Manager Contact Info: 205 E 28th St. Bryan TX 77803| (979) 821-5825 | dlyles@btuutilities.com DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 714 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 Thoughtful Decision Making for Uncertain Times 11 Interim-TCOS-RFP (51623, 48123, 44467, and 41920) TSPs can update their TCOS rate by filing an Interim-TCOS-RFP or a Full-TCOS-RFP. The Interim-TCOS-RFP is an expedited process to update a TSP’s TCOS rate. The Interim-TCOS-RFP process allows TSPs to update their TCOS rate based on any changes in transmission plant. Testimony explaining the transmission projects must accompany the required schedules. NewGen prepared BTU’s Interim-TCOS-RFP for 2012, 2014, 2018, and 2020. NewGen worked with BTU staff to prepare filing documents: schedules, workpapers, testimony, and the updated tariff. The TCOS revenue requirement was developed consistent with the PUCT’s filing requirements. TCOS Earnings Report Filing (Docket Nos. 50655, 49355, 48158, 46910, 45636, 44550, 42290, and 41327) Since 2012, NewGen has assisted BTU in the preparation of the annual TCOS Earnings Report. NewGen works with BTU staff to prepare filing documents, analyses, and workpapers. NewGen works in close coordination with BTU’s legal team to file the required public and confidential documents. The most recent TCOS Earnings Report was completed on June 1, 2020 for FY 2019. Garland Power & Light (GPL) | Full-TCOS-RFPs and Interim-TCOS-RFPs Date of Service: 2003 – 2014 Contact Name: Darrel Cline, CFO Contact Info: 217 N. Fifth St., Garland, TX 75040| (972) 205-2671 | dcline@gpltexas.org Full-TCOS-RFP (Docket Nos. 38709, 36439, and 28090) NewGen periodically filed testimony before the PUCT in support of GPL’s wholesale transmission rates in ERCOT. NewGen filed Full-TCOS-RFPs in 2003, 2009, and 2011. NewGen’s testimony was supported by a comprehensive unbundled cost of service analysis. Interim-TCOS-RFP (Docket Nos. 42630 and 31617) NewGen prepared GPL’s Interim-TCOS-RFP for 2005 and 2014. NewGen worked with GPL staff to prepare filing documents: schedules, workpapers, testimony, and the updated tariff. The TCOS revenue requirement was developed consistent with the PUCT’s filing requirements. Texas Municipal Power Agency (TMPA) | Interim-TCOS-RFP (Docket No. 51439) Date of Service: 2020 Contact Name: Lyndi Birkhead, Director of Finance & Support Services Contact Info: 12824 FM 244 Road, Anderson, TX 77830| (936) 873-1133 | lbirkhead@texasmpa.org NewGen prepared TMPA’s Interim-TCOS-RFP for 2020. NewGen developed the filing documents to convey the transmission plant in a manner consistent with TMPA’s PUCT approved depreciation rates, including a simulated accumulated depreciation reserve, as well as accompanying testimony and schedules. The TCOS revenue requirement was developed consistent with the PUCT’s filing requirements and NewGen was the sole expert witness covering all required topics in our direct testimony. As of December 8, 2020, the PUCT Staff recommended approval of the filed rate. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 715 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 12 Thoughtful Decision Making for Uncertain Times Lubbock Power & Light (LP&L) | Full-TCOS-RFP (Docket No. 51100) Date of Service: 2020 – Ongoing Contact Name: Andy Burcham | Assistant Director & CFO Contact Info: 1301 Broadway Street, Lubbock, TX 79401| (806) 775-3430 | aburcham@lpandl.com NewGen was hired by Lloyd Gosselink to assist the firm in representing LP&L in the preparation and prosecution of LP&L’s first application for wholesale transmission rates to be filed with the PUCT. This TCOS was associated with LP&L’s integration with ERCOT. As such, it was a unique TCOS filing and rate filing package. As LP&L’s first filing, NewGen developed the fully functionalized revenue requirement based on a forecasted year with known and measurable adjustments for LP&L’s transmission system upgrades and projected costs. NewGen provided direct testimony and rebuttal testimony, responded to multiple requests for information from the PUCT Staff, and is currently supporting settlement negotiations between LP&L and the PUCT Staff. As of December 9, 2020, LP&L and the PUCT reached a settlement in principle and cancelled the hearing. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 716 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 Thoughtful Decision Making for Uncertain Times 1 APPENDIX A – RESUMES DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 717 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 718 Joseph Mancinelli President & CEO jmancinelli@newgenstrategies.net Economics | Strategy | Stakeholders | Sustainability www.newgenstrategies.net Joseph Mancinelli has over 30 years of experience as a utility consultant to the public utility industry and serves as President & CEO of NewGen Strategies and Solutions, LLC. NewGen offers a wide range of management, planning, and engineering economic services to public power clients. His direct experience includes strategic and business planning, cost of service and rate design analyses, performance management, economic analyses, asset valuation, revenue bond financing in the roles of project manager, lead analyst, and expert witness. He regularly advises senior management teams, utility boards, city councils, attorneys, and end-users. Additionally, he has taught cost of service and rate design concepts through numerous presentations, seminars and classes in association with Electric Utility Consultants, Inc., American Public Power Association, and various cooperative organizations. Education He has a Master of Business Administration in Finance from the University of Colorado and a Bachelor of Science in Geophysical Engineering from the Colorado School of Mines. Electric Cost of Service and Rate Design Mr. Mancinelli has considerable experience leading project teams in the review and establishment of utility revenue requirements, development of cost of service analyses and retail and wholesale rate design. He works with clients and stakeholders in the understanding of cost of service and rate design principles and assists clients in the development of the underlying policies and principals important in the rate setting process. He has worked for clients across the country. Clients include wholesale and retail electric utilities, various stakeholder groups, public utility commissions and large consumers of electricity. A sample of Mr. Mancinelli’s electric cost of service and rate design clients include the following:  Austin Energy, Texas  Bose McKinney & Evans, LLP  Bryan Texas Utilities, Texas  Cleveland Public Power, Ohio  Continental Divide, New Mexico  CPS Energy, Texas  Deseret Power Cooperative, Utah  Estes Park Power & Light, Colorado  Fort Collins Utilities, Colorado  Farmington Electric Utility System  City of Garland Power and Light, Texas  GEUS, Texas  HNTB Corporation  Keys Energy Services, Florida  Lafayette Utilities System, Louisiana  Lloyd Gosselink Rochelle & Townsend, P.C.  Lubbock Power and Light, Texas  Nebraska Public Power District  New Braunfels Utilities, Texas  Plains Electric Generation and Transmission Cooperative, Inc., New Mexico (now Tri-State)  Platte River Power Authority, Colorado  Richmond Power & Light, Indiana  Tri-State Generation & Transmission Association, Inc., Colorado  U.S. Army, Huntsville, Alabama  United Power Electric Cooperative, Colorado  Navajo Tribal Utility Authority  Weatherford Municipal Utilities, Texas Expert Witness and Litigation Support Mr. Mancinelli has provided expert testimony for over 20 years regarding electric utility cost of service, rate design, and ratemaking issues before state and local regulatory bodies and courts. He has national experience providing litigation support regarding ratemaking matters at wholesale and retail levels in Alaska, California, Colorado, Guam, Indiana, Michigan, Nebraska, New Mexico, Nevada, North Carolina, Texas, and Utah. Mr. Mancinelli’s expert witness and litigation support includes: DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 719 Joseph Mancinelli President & CEO Thoughtful Decision Making for Uncertain Times 2  Crawfordsville Electric Light & Power, Indiana Utility Regulatory Commission, Cause No. 44684  Tri-State Generation and Transmission Association, Inc., Federal Energy Regulatory Commission, Docket Nos. ER20-676-000, ER20-1559-000, ER20-2417-000.  Richmond Power & Light, Indiana Utility Regulatory Commission, Cause No. 45361.  Indiana Michigan Power Company, Indiana Utility Regulatory Commission, Cause No. 45235.  Joint Community Choice Aggregators, Public Utility Commission of the State of California, Application No. 18-12-009.  Farmington Electric Utility System, New Mexico; Federal Energy Regulatory Commission, Docket Nos. QF19-1082-001, QF19-1083-001, QF19-1084-001  Southern Indiana Gas and Electric Company D/B/A Vectren Energy Delivery of Indiana, Inc., Cause No. 43554 MCRA 21  U.S. Department of Defense, North Carolina Utilities Commission, Docket No. E-2, Sub 1142  Nebraska Public Power District, Nebraska; Section 70, Article 13 Arbitration Panel  Northern Indiana Public Service Company, Indiana; Cause Nos. 44688 and 44733-TDSIC-1  Bryan Texas Utilities, Texas; Docket Nos. 48123, 44467 and 41920  Lower Colorado River Authority, Texas; Cause Nos. 121-001-B and D-1GN-12-002156  Austin Energy, Texas; Docket No. 40627  Guam Power Authority, Guam; Docket No. 11-09  Brownsville Public Utilities Board, Texas; Docket Nos. 32905 and 38556  Brownsville Public Utilities Board, Texas; Texas Water Commission; Docket No. 9013-M.  Xcel Energy, Colorado; Docket Number 02S – 315 EG.  Rocky Mountain Power, Utah; Docket No. 09-035-23  GEUS, Texas; Texas Public Utilities Commission; Dockets No. 42581 and 37180  GEUS, Texas; Case Number 25591  Application of Sierra Pacific Power Company, Nevada; with respect to retail rates; Docket No. 05-10003  Lamar Light and Power versus Colorado Aquature, Colorado  AEP Texas Central Company, Texas; application of AEP Texas Central Company for authority to change rates; PUC Docket No. 28840  The City and County of Denver, Colorado; United States District Court for the District of Colorado; Civil Action No. 96-D-2968  Chugach Electric and Homer Electric Association, Alaska; Regulatory Commission of Alaska; Docket No. U-06-134  Traverse City Light and Power and Michigan Public Service Commission; Case Numbers U-13716, U-12844 and U-13071  Plains Electric Generation and Transmission Cooperative, Inc., New Mexico; New Mexico Public Utilities Commission; Docket No. 2797 Workshops and Presentations Mr. Mancinelli has given numerous presentations and participated in training and workshops in several states. These activities have focused on cost of service, ratemaking, and competitive issues. Host organizations and the topics Mr. Mancinelli presented are displayed below. American Public Power Association  Costs and Benefits of Generation Resources  Innovative Rates and Rate Riders for Key Accounts  Including Risk Management in the Key Account Function  Advanced Rate Making Concepts for Publicly Owned Electric Systems  Retail Rate Design for Publicly Owned Electric Systems Electric Utility Consultants, Inc.  Rate Case Expert Witness Preparation  Introduction to Cost of Service Concepts and Techniques for Electric Utilities  Introduction to Rate Design for Electric Utilities DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 720 Joseph Mancinelli President & CEO 3 Thoughtful Decision Making for Uncertain Times Texas Public Power Association  Establishing Effective Financial Policies for Your Utility  Contracting with Retail Customers  Developing Rate Design Strategies and Financial Policies for Your Utility New Mexico Rural Electric Association  Unbundling for Competition Utah Association of Municipal Power and Utah Rural Electric Association  Electric Rate Unbundling New Hampshire Electric Cooperative  Rate design and cost of service strategy and training program Colorado Rural Electric Association  Net Metering Overview Utah Municipal Power Agency  Cost of Service, Rates and Net Metering High West Energy – Irrigation Members  Introduction to Cost of Service and Rate Design Concepts DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 721 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 722 Jill Schuepbach Executive Consultant jschuepbach@newgenstrategies.net Economics | Strategy | Stakeholders | Sustainability www.newgenstrategies.net Jill Schuepbach has been providing financial expertise to the utility industry for over 20 years. She has proven project management and analytical skills in the areas of utility cost of service and rate design, financial planning, economic and financial analysis, engineer of record, and pole attachment fees. In addition, Ms. Schuepbach has experience with feasibility studies, litigation support, and preparation of expert witness testimony. Her project experience includes work for municipal, investor-owned, and member-owned utility clients. EDUCATION  Master of Business Administration, University of Colorado  Bachelor of Science in Mechanical Engineering, University of Missouri PROFESSIONAL REGISTRATIONS / CERTIFICATIONS  Registered Professional Engineer (PE), Colorado KEY EXPERTISE  Cost of Service and Rate Design  Project Financing  Engineer of Record  Economic and Financial Analysis  Litigation Support  Pole Attachment Fees RELEVANT EXPERIENCE Financial Forecasts, Cost of Service, and Rate Design Ms. Schuepbach has assisted with numerous utility financial forecasts, cost of service, and rate design projects. Financial Forecast tasks include developing models to balance capital spending and rate increases, support compliance with debt covenants, and assist with general short-term and long-term decision making. Cost of Service tasks include the development of the revenue requirement, functionalization and classification of costs, and allocation of costs to customer classes. Rate Design tasks include a review of existing customer class criteria, design, tariff development, and transitioning of models for the client’s future use. Additional analysis includes the evaluation of miscellaneous charges and fees based on the utility’s costs and local and state policy. She has assisted with training and workshops regarding cost of service and rate design theory, industry practice, and rate strategies to governing bodies and boards. She has also presented rate study results and provided financial recommendations to governing bodies, boards, and city councils. She has performed electric, natural gas, and photovoltaic cost of service. Her efforts have also included support in contract negotiations in developing a rate to serve a large industrial load and unbundled transmission costs. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 723 Jill Schuepbach Executive Consultant Thoughtful Decision Making for Uncertain Times 2 Ms. Schuepbach’s clients for cost of service and rate design services include:  Brownsville Public Utilities Board, Texas  Bryan Texas Utilities, Texas  Estes Park, Colorado  Farmington Electric Utilities System, New Mexico  Glendale Water and Power, California  Greenville Electric Utility System (GEUS), Texas  Lafayette Public Power Authority, Louisiana  Lafayette Utilities System, Louisiana  Loup Power District, Nebraska  Navajo Tribal Utility Authority, Arizona She has also evaluated energy consumption profiles, billing accuracy, base operations, contract terms, rate options, asset/facilities upgrades (e.g., energy efficiency/demand response), distributed generation options, and tenant billing recovery for the US Army. Transmission Revenue Requirement Compliance Filings Ms. Schuepbach has assisted with multiple transmission rate filings at the Regional Transmission Organization (RTO) level and at the Federal Energy Regulatory Commission (FERC) regarding Annual Transmission Revenue Requirements (ATRR) and methodologies for determining rates. Ms. Schuepbach’s clients include:  Bryan Texas Utilities, Texas  Greenville Electric Utility System (GEUS), Texas  City of Garland Power and Light, Texas  Independence Power & Light, Missouri Financing of Public and Private Projects Ms. Schuepbach has provided pro forma analysis supporting revenue bond financing for utilities and commercial bank financings of privately developed projects. She developed and reviewed pro forma financial models for technical and economic feasibility. The investment community that provides financing for these projects relies upon these models. In addition, Ms. Schuepbach has experience with financial modeling for municipal clients and alternative expansion plans for industrial clients interested in self-generation. Ms. Schuepbach’s responsibilities have included updating and reviewing budgets, financial statements, capital plans, and other financial inputs to the pro forma model; and reviewing technical and financial inputs to the pro forma model, including financial modeling of utility operations to determine rate adequacy, future capital funding sources, and compliance with bond covenants. Clients served by Ms. Schuepbach’s pro forma modeling experience include:  ATCO Power, Alberta, Canada  Bank of Nova Scotia and Credit Suisse First Boston, Alabama  Brownsville Public Utilities Board, Texas  Citibank North America, Oklahoma  Lafayette Utilities System, Louisiana  UFJ Bank, Ratchaburi Province, Thailand Engineer of Record and Consulting Engineer Reports Ms. Schuepbach assists in the development of Consulting Engineer Reports and associated ordinance required reviews for municipal utilities. These reviews typically require an annual assessment of each utility’s financial and physical operations for the duration of the bond period. The field review typically includes a determination of the condition of the physical assets of the utility, which also includes a review of the utility’s budgeting and planning process. Ms. Schuepbach’s project experience includes:  Lafayette Utilities System, Louisiana  Lafayette Public Power Authority, Louisiana DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 724 Jill Schuepbach Executive Consultant 3 Thoughtful Decision Making for Uncertain Times Economic and Financial Analysis Ms. Schuepbach has provided economic analyses for municipal utilities involving generation projects. These evaluations included a review of the costs and operation of new generation units added to the existing generation resources and an economic analysis of the proposed generation on retail rates. Ms. Schuepbach assisted with the allocation of Hoover Power in Arizona, which included technical advice, review of customer applications for completion and accuracy, and scenario analysis of the potential hydro power allocations. Her clients have included:  Arizona Power Authority, Arizona  Brownsville Public Utilities Board, Texas  City of Bryan, Texas  Lafayette Utilities System, Louisiana Litigation Support Ms. Schuepbach has assisted in litigation support and preparation of expert witness testimony in Texas, Louisiana, Missouri, and Indiana. Her testimony support is related to revenue requirements, cost of service, and rate design, as well as the proper allocation of generation costs given a system’s unique characteristics. Ms. Schuepbach’s litigation support clients include:  Brownsville Public Utility Board, Texas: Docket Nos. 38556 and 32905  Bryan Texas Utilities, Texas: Docket Nos. 44467 and 41920  Greenville Electric Utility System (GEUS), Texas: Dockets Nos. 45281 and 37180  Independence Power & Light, Missouri: Docket No. ER15-1499-001  Lafayette Utilities System, Louisiana: Docket No. 00994490  Northern Indiana Public Service Company, Indiana: Cause Nos. 44688, 44733, and 45159  Indiana Michigan Power Company, Indiana: Cause No. 45235 Pole Attachment Fees Ms. Schuepbach has developed pole attachment fees for several clients. She has employed various methodologies including those recommended by the Federal Communications Commission (FCC) and the American Public Power Association (APPA). She has recommended rates for cable and communications companies based on the type of poles to which they are attached. Her work also includes a review of the contract or agreement between the utility and the customer. Her projects include:  Farmington Electric Utilities System, New Mexico  Keys Energy Services, Florida  Navajo Tribal Utility Authority, Arizona  Navopache Electric Cooperative, Arizona and New Mexico Renewable Energy Feasibility Ms. Schuepbach reviewed publicly available information regarding the feasibility of utilizing renewable energy resources including wind, solar, biomass, geothermal, fuel cell, and ocean energies in the client’s service territory. Her analysis included the history of the technology, advantages and disadvantages, capital and operating costs, and expected future costs. The resultant report compared the costs of the renewable technology to existing fossil fuel technologies including simple cycle, combined cycle, and coal plant. Her renewable energy clients include:  Lafayette Utilities System, Louisiana DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 725 Jill Schuepbach Executive Consultant Thoughtful Decision Making for Uncertain Times 4 Demand Side Management Ms. Schuepbach conducted demand side management (DSM) analyses including evaluation of cost effectiveness, development of numeric goals, and development of testimony as well as preparation of technical reports based on the economic evaluation. Her DSM clients include:  Florida Municipal Power Agency, Florida  JEA, Florida  Kissimmee Utility Authority, Florida  Lakeland Electric, Florida  Orlando Utilities Commission, Florida Contract Review Ms. Schuepbach has reviewed purchase and service contracts for independent engineering reports for natural gas pipeline projects and compressor stations. Her project experience includes:  Citibank, North America and Export-Import Bank of the United States, Tamaulipas, Mexico  North Baja Pipeline LLC, Arizona and California Chilled Water Economic Evaluation Ms. Schuepbach has experience in the economic evaluation of both self-build chilled water plants and purchasing chilled water from an external entity. She has assessed the proposed rate structure for chilled water, designed chilled water rates based on the development of a financial model that projects the profitability of the chilled water plant over a six-year period and cost-of-service and rate design, reviewed terms of the chilled water service contract, and advised owner’s project management teams on negotiating tactics. Ms. Schuepbach’s chilled water clients include:  Long Center for the Performing Arts, Texas  City of Mesa, Arizona Load Aggregation Study Ms. Schuepbach has experience with load aggregation for private consumers exploring opportunities to increase their buying power. She has assisted in the evaluation of individual loads in support of a load aggregate study and in the development of a licensed load aggregate entity to capitalize on market opportunities presented by deregulation. She has also completed market assessments and energy provider profiles, developed a national request for proposals (RFP), and assisted in the negotiations of multiple commodity agreements to service facilities in multiple states. Ms. Schuepbach’s load aggregation clients include:  Level 3 Communications, Colorado  Region IV School District, Texas WORKSHOPS AND PRESENTATIONS Ms. Schuepbach has given industry presentations focused on cost of service and ratemaking. Host organizations and the topics Ms. Schuepbach presented include: Electric Utility Consultants, Inc.  Introduction to Cost of Service Concepts and Techniques for Electric Utilities  Introduction to Rate Design for Electric Utilities California Public Utilities Commission  Cost of Service Concepts for Electric Utilities DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 726 Grant Rabon Executive Consultant grabon@newgenstrategies.net Economics | Strategy | Stakeholders | Sustainability www.newgenstrategies.net Since 2005, Mr. Rabon has managed electric, water, wastewater, and solid waste utility projects designed to safeguard clients’ financial integrity primarily through the performance of financial feasibility studies, valuations/appraisals, or comprehensive cost of service analyses. His educational background facilitates a unique understanding of the financial implications for technical projects. Further, he is one of less than 20 individuals in the nation with an Accredited Senior Appraiser designation in Public Utilities from the American Society of Appraisers. EDUCATION ▪ Master of Business Administration, University of Texas at Austin ▪ Bachelor of Science in Chemical Engineering, Texas A&M University PROFESSIONAL REGISTRATIONS / CERTIFICATIONS ▪ Accredited Senior Appraiser (ASA) designation in Public Utilities from American Society of Appraisers KEY EXPERTISE ▪ Cost of Service and Rate Design ▪ Financial Feasibility ▪ Utility Appraisals and Valuations ▪ Regulatory and Litigation Support RELEVANT EXPERIENCE Some of the following projects were completed by Mr. Rabon while employed by SAIC Energy, Environmental & Infrastructure, LLC (formerly R.W. Beck). Cost of Service and Rate Design Mr. Rabon has conducted numerous comprehensive cost of service and rate design studies. Rates designed as a result of these engagements equitably recover the cost of service and align with the utilities’ goals, including special consideration for affordability and best practice rate structures. Stakeholder outreach and benchmarking analyses were common tasks within these projects. Key projects include: ▪ Austin Energy Cost of Service and Testimony – Conducted a comprehensive, unbundled cost of service analysis for the electric utility and designed equitable rates to achieve the City of Austin’s goals, including improving fixed cost recovery while incentivizing conservation through a five-tier rate structure and providing support for distributed generation, such as rooftop solar. Filed direct testimony on behalf of the City of Austin d/b/a Austin Energy at the Public Utility Commission of Texas in defense of the electric rates adopted by Austin City Council (PUC Docket No. 40627). Later, in 2015, conducted various analyses on issues of critical importance to Austin Energy, such as a financial reserves study and review of small commercial rates, and assisted Austin Energy staff in an update to the cost of service and rate design. These projects included extensive public involvement and stakeholder engagement. ▪ Lower Colorado River Authority Wholesale Water Benchmarking and Rate Analysis – Performed a benchmarking analysis to identify best practices among wholesale water entities around the nation, with an emphasis on innovative rate structures and water conservation efforts. A long-term rate analysis was conducted to incorporate projected capital projects to expand the water supply over a 90-year horizon under various rate structures. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 727 Grant Rabon Executive Consultant Thoughtful Decision Making for Uncertain Times 2 ▪ Greenville Electric Utility System (GEUS) Electric Transmission Filing – Performed a quality assurance review of a comprehensive cost of service analysis for the transmission function and regulated rate filing with the Public Utility Commission of Texas. ▪ Texas Municipal Power Agency (TMPA) Electric Transmission Filing – Developed an interim regulated rate filing for the transmission function with the Public Utility Commission of Texas and filed direct testimony on behalf of TMPA (PUC Docket No. 51439). ▪ Georgetown Electric Utility – Conducted a series of rate projects for the City of Georgetown, Texas to improve cost recovery and equity. This includes a redesign of the distributed generation rate tariff, evaluation of a large contract customer load, and design of a new rate tariff for commercial ”fast charging” plug-in electric vehicle charging stations. ▪ Other Cost of Service and Rate Design Studies – Conducted one or more comprehensive cost of service and rate design studies for the following entities: ▪ City of Athens, Texas ▪ City of Borger, Texas ▪ City of Bryan, Texas ▪ City of Del Rio, Texas ▪ City of Greenville, Texas ▪ City of Hobbs, New Mexico ▪ City of Las Cruces, New Mexico ▪ City of Longview, Texas ▪ City of New Braunfels, Texas ▪ City of Nogales, Arizona ▪ City of Olathe, Kansas ▪ City of Peoria, Arizona ▪ City of Pflugerville, Texas ▪ City of Sealy, Texas ▪ City of Sioux Falls, South Dakota ▪ City of Stillwater, Oklahoma ▪ City of Sugar Land, Texas ▪ City of Tempe, Arizona ▪ City of Temple, Texas ▪ City of Tucson, Arizona ▪ City of Vernon, California ▪ City of Weatherford, Texas ▪ Greater Ouachita Water Company, Louisiana ▪ Levi Water Supply Corporation, Texas ▪ Liberty City Water Supply Corporation, Texas ▪ Gonzales County Water Supply Corporation, Texas ▪ Manville Water Supply Corporation, Texas ▪ North Slope Borough, Alaska ▪ Pima County, Arizona ▪ Rockett Special Utility District, Texas ▪ St. Tammany Parish, Louisiana ▪ Snohomish County, Washington ▪ Town of Estes Park, Colorado ▪ Walker County Special Utility District, Texas ▪ Wellborn Special Utility District, Texas ▪ York County, South Carolina Financial Feasibility Mr. Rabon has evaluated the financial feasibility of various projects through business case analyses and the development of financial models. This includes a project to evaluate a proposed 20 million-gallon-per-day brackish groundwater desalination facility based on the relative capital and operational costs as well as total lifecycle costs under various project delivery options, including traditional DBB, DB, DBO and a customized DBOOT. Another project included financial feasibility modeling to evaluate the development of a proposed water source for a municipal client. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 728 Grant Rabon Executive Consultant 3 Thoughtful Decision Making for Uncertain Times Utility Appraisals and Valuations Mr. Rabon has conducted valuations as well as fair market value appraisals to determine an indication of value for acquisitions/dispositions, or to evaluate municipalization or privatization of utilities. His experience also includes service area valuations to determine compensation for decertification of areas covered by certificates of convenience and necessity. Key projects include: Utility Acquisition and Regulated Rate Filing – Conducted a fair market value appraisal of an investor-owned utility, including 13 water systems and 27 wastewater systems, in support of an acquisition of some of these systems by Greater Ouachita Water Company (GOWC). Subsequently conducted a comprehensive cost of service analysis for the existing water and wastewater utilities of GOWC and developed rates to recover all costs, including the acquisition and necessary capital improvements. Filed required schedules with the Louisiana Public Service Commission in support of the acquisition and rate request. (LPSC Docket No. U-32803) Other Utility Appraisals or Valuations – Conducted one or more appraisal or valuation study of the following entities: ▪ Aqua Texas, Inc. (a portion of the system) ▪ Aqua Indiana, Inc. (a portion of the system) ▪ Bi-County Water Supply Corporation ▪ Brownsville Navigation District ▪ Clear Water Estates Water System ▪ Commons Water Supply, Inc. ▪ El Jardin Water Supply Corporation ▪ City of El Paso’s Clint and McCombs Municipal Landfills ▪ EnLink (a portion of a gas pipeline in Alexandria, Louisiana) ▪ Esperanza Water Service Company ▪ Greater Ouachita Water Company ▪ Guadalupe-Blanco River Authority ▪ Jarrell-Schwertner Water Supply Corporation ▪ Johnson County Special Utility District ▪ Liberty City Water Supply Corporation ▪ Pennichuck Corporation’s water utility in the City of Nashua ▪ Rice Water Supply & Sewer Supply Corporation ▪ City of Superior’s Moccasin Mike Landfill ▪ Xcel Energy’s electric distribution system in the City of Boulder, Colorado ▪ Pacific Gas and Electric’s electric transmission and distribution system in San Francisco, California ▪ An investor-owned utility’s electric distribution system in a confidential location Regulatory and Litigation Support In addition to the regulatory work associated with some of the projects previously mentioned, Mr. Rabon has also provided litigation support to his clients. This includes a project calculating damages owed to three electric cooperatives and one municipally owned utility as part of a wholesale rate dispute with the Lower Colorado River Authority in Travis and Kerr County, Texas District Courts. This included recreating billing determinants and the development of a market access rate. (Cause No. D-1-GN-12-002156 and Cause No. 12-1001-B) In another project Mr. Rabon calculated damages owed to a municipality in a contract dispute with its ERCOT Qualified Scheduling Entity. Mr. Rabon has also been designated as an expert witness in a utility condemnation case in Louisiana. Customer Advocacy and Engagement Served as the residential rate advocate for Austin Water’s water, reclaimed water, and wastewater cost of service and rate design study, representing the interests of the residential customer class in the process, much like the Texas Office of Public Utility Counsel often does for regulated rate cases. This involved participating in a stakeholder engagement process, and presenting at a series of independent meetings with residential customer DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 729 Grant Rabon Executive Consultant Thoughtful Decision Making for Uncertain Times 4 groups around the City to explain the process and solicit feedback on important policy issues from residents. Also, reviewed and critiqued Austin Water’s prior comprehensive rate review, completed in 2009, and the validity of the methodologies employed therein. Finally, given that any rates proposed by Austin Water could be reviewed by the Public Utility Commission of Texas, provided invaluable input on acceptable practices based on extensive prior work in this venue. PRESENTATIONS AND PUBLICATIONS Mr. Rabon has given various industry presentations focused on utility finances and rates. Texas Public Power Association Conferences ▪ Adapting to Distributed Generation (2017) ▪ Is Change Coming?: Transmission Rate Filings at the Public Utility Commission (2018) ▪ Effectively Managing Significant Rate Changes (2019) Texas Rural Water Association Conferences ▪ Keeping Your System Financially Fit; Learn How to Set Good Water Rates (2012) ▪ CCN Valuations: Financial Considerations Related to Decertification and Expedited Release (2014) ▪ Water Rates 101 (2015) ▪ Financial Planning and Tools (2016) ▪ Rates that Support Current and Future Needs (2018) ▪ Financial Management and Fiduciary Responsibilities (2019) ▪ How to Structure Rates to Ensure a Successful Future for Your System (2019) USDA Rural Development ▪ Nuts and Bolts of Setting Sustainable Rates (2018) American Water Works Association and Water Environmental Federation’s Utility Management Conference ▪ Regionalization Efforts: A Louisiana Case Study (2013) ▪ Austin Water Affordability Assessment (2020) National Rural Water Association Conferences ▪ Rate Planning for a Sustainable System (2018) ▪ Small Water System Financing 101 (2019) TESTIMONY Public Utility Commission of Texas ▪ Electric Rate Filing of Austin Energy – PUC Docket No. 40627 ▪ Interim Electric Transmission Rate Filing of Texas Municipal Power Agency – PUC Docket No. 51439 Louisiana Public Service Commission ▪ Water and Wastewater Rate Filing of Greater Ouachita Water Company – LPSC Docket No. U-34865 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 730 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 Thoughtful Decision Making for Uncertain Times 1 APPENDIX B – LETTERS OF RECOMMENDATION DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 731 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 732 December 16, 2020 via email Subject: Letter of Recommendation for NewGen Strategies and Solutions To Whom It May Concern: GEUS has a long-standing professional relationship with NewGen Strategies and Solutions. For more than 20 years, Joe Mancinelli, Jill Schuepbach, and the NewGen staff have provided GEUS with professional services pertaining to financial planning, retail electric cost of service, rate design, special contract rate design, annual transmission Earnings Reports, and periodic transmission cost of service (TCOS) full comprehensive filings. Additionally, NewGen supported GEUS when GEUS was called in by the Public Utilities Commission of Texas (PUCT) for over earning with the GEUS wholesale transmission rate. NewGen is currently supporting GEUS with a full comprehensive TCOS filing at the PUCT. NewGen prepares the schedules, testimony, and tariff as required by the PUCT. NewGen works with GEUS’ legal team to file the necessary documents. The NewGen and GEUS teams also collaborate on an annual basis to file the Earnings Report as required by the PUCT. These efforts involve reviewing historical data and adjusting as needed. Throughout these various projects, NewGen team members were professional, responsive, and easy to work with, and delivered work products that met or exceeded our expectations within the agreed-upon budget and schedule. Please feel free to contact me if there are any questions regarding this recommendation. Sincerely, Alicia Hooks General Manager O: 903.457.2887 M: 972.977.4758 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 733 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 734 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 735 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 736 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 Thoughtful Decision Making for Uncertain Times 1 APPENDIX C – SAMPLE REPORTS To provide Denton Municipal Electric with a comprehensive view of NewGen Strategies and Solutions’ approach to PUCT Transmission Cost of Service Rate Filing Services and our reports, we have included both a full comprehensive rate filing package report from Greenville Electric Utility System (GEUS) – Docket No. 51556 and an interim rate filing package report from Bryan Texas Utilities (BTU) – Docket No. 51623. DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 737 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 738 PUC DOCKET NO. ___________________ APPLICATION OF GEUS TO CHANGE RATES FOR WHOLESALE TRANSMISSION SERVICE § § § § BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS DIRECT TESTIMONY AND ATTACHMENTS OF JILL A. SCHUEPBACH ON BEHALF OF GREENVILLE ELECTRIC UTILITY SYSTEM (“GEUS”) NOVEMBER 24, 2020 45 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 739 PUC Docket No. _______________ 1 Direct Testimony & Attachments of Jill A. Schuepbach PUC DOCKET NO. __________________ APPLICATION OF GEUS TO CHANGE RATES FOR WHOLESALE TRANSMISSION SERVICE § § § § BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS DIRECT TESTIMONY AND ATTACHMENTS OF JILL A. SCHUEPBACH TABLE OF CONTENTS Page I. INTRODUCTION AND QUALIFICATIONS .............................................................2 II. RESULTS: SCHEDULE A ...........................................................................................5 III. RATE BASE: SCHEDULES B THROUGH B-12 .......................................................7 IV. RETURN ON RATE BASE: SCHEDULE C-2 ..........................................................11 V. OPERATION AND MAINTENANCE EXPENSE: D SCHEDULES .......................14 VI. DEPRECIATION AND AMORTIZATION EXPENSE: SCHEDULE E-1 ...............17 VII. TAXES OTHER THAN INCOME: SCHEDULE E-2 ................................................18 VIII. OTHER EXPENSES AND REVENUES: SCHEDULES E-4, E-5, AND E-6 ...........20 IX. SUMMARY AND RECOMMENDATIONS..............................................................22 ATTACHMENTS Attachment JAS-1 Resume and Record of Testimony Attachment JAS-2 Schedules and Workpapers (REDACTED) Attachment JAS-3 Tariff for Wholesale Transmission Service Attachment JAS-3A Tariff for Wholesale Transmission Service (redlined) Attachment JAS-4 Workpapers to the Direct Testimony of Jill A. Schuepbach 46 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 740 PUC Docket No. _______________ 2 Direct Testimony & Attachments of Jill A. Schuepbach PUC DOCKET NO. __________________ APPLICATION OF GEUS TO CHANGE RATES FOR WHOLESALE TRANSMISSION SERVICE § § § § BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS DIRECT TESTIMONY AND ATTACHMENTS OF JILL A. SCHUEPBACH I. INTRODUCTION AND QUALIFICATIONS 1 Q. PLEASE STATE YOUR NAME, BUSINESS ADDRESS, AND CURRENT 2 EMPLOYMENT POSITION. 3 A. My name is Jill A. Schuepbach. I am an Executive Consultant in the Energy Practice of 4 NewGen Strategies and Solutions, LLC (“NewGen”). My business address is 225 Union 5 Blvd., Suite 305, Lakewood, Colorado 80228. NewGen is a consulting firm that 6 specializes in utility rates, engineering economics, financial accounting, asset valuation, 7 appraisals, and business strategy for electric, natural gas, water, and wastewater utilities. 8 Q. PLEASE OUTLINE YOUR FORMAL EDUCATION. 9 A. I have a Master of Business Administration degree from the University of Colorado, and a 10 Bachelor of Science in Mechanical Engineering from the University of Missouri. In 11 addition to my undergraduate and graduate degrees, I am a registered Professional Engineer 12 in the state of Colorado. 13 Q. PLEASE DESCRIBE YOUR PROFESSIONAL EXPERIENCE. 14 A. I am an Executive Consultant in NewGen’s Energy Practice. I have been employed by 15 NewGen since September 2012. Prior to joining NewGen, I was employed by R. W. Beck, 16 Inc., and its successor (SAIC Energy, Environment & Infrastructure, Inc.) since 2001. 17 Prior to joining R. W. Beck, I was employed by Black & Veatch from 1998 through 2001. 18 I have more than 20 years of experience in economic analyses for the energy, water, and 19 natural gas industries. My work includes various assignments for private industry, local 20 governments, and utilities, including financial and economic analyses, cost of service and 21 rate studies, engineer of record, and pole attachment fees. I have been extensively involved 22 47 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 741 PUC Docket No. _______________ 3 Direct Testimony & Attachments of Jill A. Schuepbach in the development of unbundled cost of service and pricing models during my career. 1 Attachment JAS-1 to this testimony provides a summary of my qualifications. 2 Q. HAVE YOU TESTIFIED BEFORE ANY REGULATORY COMMISSIONS? 3 A. Yes. I submitted testimony to the Florida Public Service Commission as shown in my 4 resume and record of testimony included as Attachment JAS-1. 5 Q. WAS YOUR TESTIMONY PREPARED BY YOU OR UNDER YOUR DIRECT 6 SUPERVISION? 7 A. Yes. 8 Q. ON WHOSE BEHALF ARE YOU TESTIFYING? 9 A. I am testifying on behalf of Greenville Electric Utility System (“GEUS”), which is a 10 municipally-owned Electric transmission and distribution utility serving the citizens of the 11 City of Greenville, Texas (the “City”) and customers outside the city limits of Greenville. 12 Q. WHAT IS THE PURPOSE OF YOUR DIRECT TESTIMONY? 13 A. The purpose of my testimony is to support GEUS’s application to change its wholesale 14 transmission service rates in accordance with the Public Utility Commission of Texas’ 15 (“Commission” or “PUC”) Transmission Cost of Service (“TCOS”) Rate Filing Package 16 (“RFP”) for Non-Investor Owned (“Non-IOU”) Transmission Service Providers (“TSPs”) 17 in Electric Reliability Council of Texas (“ERCOT”). 18 Based on the test-year ending September 30, 2019 (“TY2019”), GEUS’s TCOS revenue 19 requirement is $3,306,733 or $46.590 per megawatt (“MW”) as shown in Exhibit JAS-2: 20 Schedule A. This revenue requirement and its associated rate do not include rate case 21 expenses. I propose the rate case expenses be included as a surcharge to the tariff and 22 collected over a 12-month period. 23 Q. WHAT SCHEDULES AND EXHIBITS ARE YOU SPONSORING? 24 A. I am sponsoring the following TCOS Schedules and the supporting workpapers: 25 • Schedule A: Transmission Cost of Service 26 48 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 742 PUC Docket No. _______________ 4 Direct Testimony & Attachments of Jill A. Schuepbach • Schedule B and B-1 through B-12: Rate Base 1 • Schedule C-2: Debt Service Coverage (“DSC”) Method 2 • Schedule D-1 through D-5: Operating and Maintenance Expenses 3 • Schedule E-1 through E-6: Other Expenses and Revenues 4 • Schedules F-1 through F-7, F-9, and F-10: Functionalization Factors 5 Q. HAVE YOU PREPARED A TARIFF FOR THE TRANSMISSION ACCESS FEE 6 ASSOCIATED WITH THE GEUS TCOS? 7 A. Yes. The proposed Tariff is included as Attachment JAS-3. I am also providing a version 8 of the Tariff that shows the changes GEUS proposes relative to its current tariff. 9 Q. WHY IS GEUS FILING THIS TCOS RATE APPLICATION AT THIS TIME? 10 A. Pursuant to 16 Texas Administrative Code § 25.247,1 all Non-IOU TSPs are required to 11 submit a complete application for a comprehensive transmission-cost-of-service review or 12 an interim update by a specific date depending on the date of the order in the Non-IOU 13 TSP’s previous filing. GEUS’s last filing to change its wholesale transmission rate took 14 place in 2014 with an Order approving the rate on September 11, 2014.2 Based on this 15 date, GEUS is required to file by November 28, 2020. Rule 25.247 also requires Non-IOU 16 TSPs to file an application on an ongoing basis. 17 Q. ARE OTHER GEUS WITNESSES SUBMITTING TESTIMONY IN SUPPORT OF 18 GEUS’S TCOS? 19 A. Yes. Ms. Alicia Hooks and Mr. John Clifford Copeland of GEUS are submitting 20 testimony. Ms. Hooks, General Manager, discusses changes in GEUS’s operations since 21 GEUS’s last full TCOS filing in 2014, GEUS’s debt service, and GEUS’s plans for future 22 debt-funded transmission projects. Mr. Copeland, GEUS’s Business Services Director, 23 1 I will refer to the Commission’s rules found at 16 Tex. Admin. Code Chapter 25, as the Commission’s “Substantive Rules” or simply as “Rule 25.___.” 2 Docket No. 42581, Application of GEUS to Change Rates for Wholesale Transmission Service, Final Order (Sept. 11, 2014) ("Docket No. 42581"). 49 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 743 PUC Docket No. _______________ 5 Direct Testimony & Attachments of Jill A. Schuepbach discusses GEUS’s debt service, adjustments to amortization, and adjustments to GEUS’s 1 expenses related to its transmission and distribution operations, and sponsors certain 2 workpapers supporting Schedule C-2, Schedule D-1, and Schedule E-1. 3 Q. WHAT IS THE BASIS YEAR FOR THE APPLICATION? 4 A. The schedules and workpapers are based on a test year ending September 30, 2019, which 5 corresponds to the end of GEUS’s 2019 fiscal year. GEUS’s TCOS is based on known and 6 measurable changes to GEUS’s test-year data. I explain these adjustments throughout my 7 testimony. 8 II. RESULTS: SCHEDULE A 9 Q. PLEASE DESCRIBE THE DEVELOPMENT OF SCHEDULE A, GEUS’ TCOS 10 REVENUE REQUIREMENT. 11 A. Schedule A shows a summary of the total GEUS cost of service functionalized into the 12 three utility functions of Generation, Transmission, and Distribution and shows GEUS’s 13 TCOS for its Transmission function for the following elements of its revenue requirement: 14 • Operation and maintenance (“O&M”) expense as shown in Schedule D 15 • Depreciation expense as shown in Schedule E-1 16 • Taxes other than income tax as shown in Schedule E-2 17 • Return on Invested Capital (“Rate Base”) as shown in Schedule B 18 Q. PLEASE SUMMARIZE THE RESULTS SHOWN IN SCHEDULE A. 19 A. GEUS’s TCOS revenue requirement includes a return calculated using the DSC Method, a 20 PUC approved method for Non-IOU transmission providers like GEUS. As shown in 21 Schedule A, the transmission revenue requirement for GEUS is $3,306,733. Based on the 22 2019 ERCOT average four coincident peak (“4CP”) load of 70,981 MW,3 the resulting 23 3 PUC Docket No. 50333, Commission Staff’s Petition to Set 2020 Wholesale Transmission Service Charges for the Electric Reliability Council of Texas, Inc., Final Order (May 1, 2020) (“Docket No. 50333”). 50 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 744 PUC Docket No. _______________ 6 Direct Testimony & Attachments of Jill A. Schuepbach GEUS Wholesale Transmission Rate is $46.590 per MW per year, compared to the current 1 rate of $36.090 per MW per year. 2 In Table 1 below, I show a comparison of GEUS’s TY2019 TCOS to GEUS’s TCOS the 3 Commission approved in Docket 42581. 4 Table 1 GEUS Transmission Cost of Service 5 Item Docket No. 42581 Approved TY2013 Current Application TY2019 Difference Difference Rate Base (Invested Capital) $6,488,531 $6,677,590 $189,059 2.9% Return on Rate Base 6.28% 13.12% 6.84% 108.9% Return $407,512 $876,036 $468,523 115.0% O&M Expense $1,417,901 $1,812,764 $394,863 27.8% Depreciation Expense $303,461 $244,020 ($59,440) (19.6%) Taxes Other Than Income $227,500 $373,913 $146,413 64.4% Return $407,512 $876,036 $468,523 115.0% Less Other Revenues ($1,288) $0 $1,288 n/a Revenue Requirement $2,355,086 $3,306,733 $951,647 40.4% Access Fee ($/MW) $36.090 $46.590 $10.500 29.1% Q. WHAT SOURCE DOCUMENTS WERE USED TO PREPARE THE SCHEDULES 6 AND WORKPAPERS IN JAS-2? 7 A. The primary source for the schedules and workpapers is GEUS’s Comprehensive Annual 8 Financial Report (“CAFR”) for the year ended September 30, 2019, which presents 9 GEUS’s operations for the provision of both electric service and GEUS’s cable/internet 10 services. GEUS’s 2019 CAFR summarizes GEUS’s Electric and Cable/Internet funds. 11 GEUS separately records operating expenses, plant, depreciation, assets, and liabilities for 12 each fund. 13 GEUS provided additional detailed reports and data as needed including asset reports. 14 These documents are attached as workpapers to the schedules where appropriate. Mr. 15 Copeland provided debt service and amortization schedules to support the RFP. 16 51 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 745 PUC Docket No. _______________ 7 Direct Testimony & Attachments of Jill A. Schuepbach Q. DOES GEUS FOLLOW THE UNIFORM SYSTEM OF ACCOUNTS 1 RECOGNIZED BY THE FEDERAL ENERGY REGULATORY COMMISSION 2 (“FERC”) PRESCRIBED FOR PUBLIC UTILITIES AND LICENSEES? 3 A. Yes; for purposes of GEUS’s TCOS, GEUS follows the FERC’s uniform system of 4 accounts. GEUS’s account numbers include a FERC code allowing the plant-in-service 5 and expense data to be summarized into the FERC uniform system of accounts. 6 III. RATE BASE: SCHEDULES B THROUGH B-12 7 Q. WHAT SOURCE DOCUMENTS FORM THE BASIS FOR THE “B” SCHEDULES 8 AND WORKPAPERS? 9 A. GEUS’s 2019 CAFR and supporting detailed documents served as sources in preparing the 10 data shown in the series of the B Schedules and related workpapers . 11 Q. PLEASE DESCRIBE SCHEDULE B, TRANSMISSION RATE BASE. 12 A. The Rate Base calculation consists of the sum of GEUS 2019 Original Cost of Plant 13 (“Gross Plant”) minus Accumulated Depreciation plus Construction Work in Progress 14 (“CWIP”) plus Materials and Supplies plus Cash Working Capital plus Prepayments plus 15 Other Rate Base items. GEUS’s 2019 CAFR served as the basis for the account balances 16 for Gross Plant, Accumulated Depreciation and CWIP, Materials & Supplies, and 17 Prepayments. 18 Q. WERE ANY ADJUSTMENTS MADE TO SCHEDULE B-1? 19 A. Yes. At year end, GEUS had $1,997,332 of CWIP. GEUS placed $1,897,037 of the 20 $1,997,332 of CWIP into service and this amount is now used and useful. The remaining 21 CWIP balance not in service is $100,295, as shown in Schedule B-4. Of the $1,897,037 of 22 plant placed into service, transmission represents $376,115 of that amount, distribution is 23 $1,517,621, and general plant is $3,300. 24 Schedule B-1 includes an adjustment to transmission Account 353 of $376,115. The 25 transmission plant placed into service includes the LTV substation transformer upgrade 26 and the Dent Road 69kV tie as shown in WP/B-4/1. The LTV substation transformer was 27 52 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 746 PUC Docket No. _______________ 8 Direct Testimony & Attachments of Jill A. Schuepbach in service and carrying load on June 16, 2020. The Dent Road tie was energized on 1 March 7, 2020. 2 Schedule B-1 includes an adjustment to distribution Account 362 of $1,517,621. The 3 general plant adjustment was made on Schedule B-2. Because $1,897,037 of CWIP is now 4 plant in service, GEUS increased its plant-in-service balance shown in Schedules B-1 and 5 B-2 to show the addition of $1,897,037 to its rate base. 6 Q. ARE THE ADJUSTMENTS TO GROSS PLANT IN SCHEDULE B-1 7 APPROPRIATE? 8 A. Yes. The capital projects that were CWIP as of September 30, 2019 are now in service and 9 are used and useful. 10 Q. PLEASE DESCRIBE THE ALLOCATION OF ORIGINAL COST OF PLANT IN 11 SCHEDULE B-1. 12 A. The Generation, Transmission, and Distribution Plant Accounts 310 through 373 were 13 directly assigned to the appropriate utility function. 14 Q. WERE ANY ADJUSTMENTS MADE TO SCHEDULE B-2? 15 A. Yes; consistent with the adjustments to transmission and distribution Gross Plant on 16 Schedule B-1, the general Gross Plant was also adjusted. The CWIP shown in WP/B-4/1 17 relates to the Phase 1 of the Operations Center renovation, which was completed February 18 of 2020. CWIP related to general Gross Plant totals $3,300 and is shown as an adjustment 19 to Account 390 on Schedule B-2. 20 Q. PLEASE DESCRIBE THE ALLOCATION OF GENERAL PLANT IN SCHEDULE 21 B-2. 22 A. GEUS allocated the accounts as follow: 23 • Accounts 389: Land and Land Rights, 390: Structures and Improvements, and 24 391: Office Furniture and Equipment were allocated to the transmission function using 25 the Payroll excluding Administrative and General Salaries and excluding the Contract 26 Labor (“PAYXAG”) allocator. GEUS does not maintain records to support an 27 allocation based on building square footage utilized by each of the major utility 28 53 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 747 PUC Docket No. _______________ 9 Direct Testimony & Attachments of Jill A. Schuepbach functions. The use of the PAYXAG allocator is reasonable and consistent with 1 GEUS’s previous TCOS filing, Docket 42581. 2 • Account 392: Transportation Equipment was allocated based on GEUS’s detailed fixed 3 asset records (Schedule F-9) as GEUS does not maintain records to support the separate 4 miles driven on transportation equipment attributed to each major utility function. 5 Directly allocating transportation equipment is reasonable and is consistent with 6 GEUS’s previous TCOS filing, Docket 42581. 7 • Account 393: Stores Equipment was allocated based on a detailed analysis of GEUS 8 inventory (Schedule F-7). This allocation method is reasonable and is consistent with 9 GEUS’s previous TCOS filing, Docket 42581. 10 • Accounts 394 - 396 were allocated to the transmission function using the Net Plant 11 excluding the General Plant (“PLTXGNL-N”) allocator per the instructions in the Non-12 IOU TCOS RFP. 13 • Account 398 was allocated directly to distribution as the expenses in the account are 14 distribution related. 15 Q. PLEASE DESCRIBE THE ALLOCATION OF COMMUNICATION EQUIPMENT 16 IN SCHEDULE B-3. 17 A. Account 397: Communication Equipment was allocated to the transmission function using 18 the PLTXGNL-N allocator. The use of the PLTXGNL-N allocator is reasonable and is 19 consistent with GEUS’s previous TCOS filing, Docket 42581. 20 Q. DOES GEUS HAVE ANY CONSTRUCTION WORK IN PROGRESS SHOWN ON 21 SCHEDULE B-4? 22 A. As I noted above, as of September 30, 2019, GEUS had $1,997,332 of CWIP. All projects 23 that were in process as of September 30, 2019 but are in service and used and useful were 24 moved to the appropriate Gross Plant accounts leaving a CWIP balance of $100,295 as 25 shown on Schedule B-4. The CWIP balance of $100,295 was adjusted in Schedule B-4 26 and is not used in the calculation of Rate Base on Schedule B.27 54 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 748 PUC Docket No. _______________ 10 Direct Testimony & Attachments of Jill A. Schuepbach Q. PLEASE DESCRIBE THE ALLOCATION OF ACCUMULATED 1 DEPRECIATION SHOWN IN SCHEDULE B-5. 2 A. GEUS allocated Accumulated Depreciation to the transmission function in a manner 3 consistent with the associated Gross Plant accounts on Schedules B-1, B-2, and B-3. 4 Q. DOES GEUS HAVE PLANT HELD FOR FUTURE USE? 5 A. No; as shown in Schedule B-6, GEUS does not have plant held for future use. 6 Q. DOES GEUS HAVE ACCUMULATED PROVISION BALANCE? 7 A. No; as shown in Schedule B-7, GEUS does not have an accumulated provision balance. 8 Q. PLEASE DESCRIBE THE ALLOCATION OF MATERIALS & SUPPLIES 9 SHOWN IN SCHEDULE B-8. 10 A. GEUS directly assigned Material and Supplies to the transmission function based on GEUS 11 personnel’s thorough review of GEUS’s inventory. In certain cases, GEUS allocated 12 inventories that benefited both the transmission and distribution functions to each function 13 based on transmission and distribution Gross Plant (“TDPLTXGNL-G”). Details of this 14 allocation are shown in Workpaper WP/F-7/1. The direct allocation of the inventory 15 presented in Schedule B-8 is appropriate and is consistent with the treatment of inventory 16 in GEUS’s previous TCOS filing, Docket 42581. 17 Q. PLEASE EXPLAIN HOW THE CASH WORKING CAPITAL WAS 18 DETERMINED. 19 A. In accordance with instructions in the Non-IOU TCOS RFP, the “one-eighth” method was 20 used to calculate the allowance for Cash Working Capital. Schedule B-9 Cash Working 21 Capital shows GEUS’s Cash Working Capital, which is premised on the sum of annual 22 O&M Expenses plus Taxes Other Than Income Taxes, multiplied by one-eighth, to arrive 23 at the amount of Cash Working Capital. 24 Q. PLEASE DESCRIBE THE ALLOCATION OF PREPAYMENTS SHOWN IN 25 SCHEDULE B-10. 26 A. Prepayments were based on GEUS’s 2019 CAFR and include expenses related to the 27 generation function. The Prepayments allocated to the transmission function are $0. 28 55 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 749 PUC Docket No. _______________ 11 Direct Testimony & Attachments of Jill A. Schuepbach Q. PLEASE DESCRIBE THE ALLOCATION OF OTHER RATE BASE ITEMS 1 SHOWN IN SCHEDULE B-11. 2 A. Other Rate Base Items include Customer Deposits and were allocated to the distribution 3 function as shown in Schedule B-11. The Other Rate Base allocated to the transmission 4 function are $0. 5 Q. DOES GEUS HAVE ANY REGULATORY ASSETS? 6 A. As shown in Schedule B-12, GEUS does not have regulatory assets. 7 Q. WHAT WAS THE RESULT OF THE TRANSMISSION RATE BASE 8 CALCULATION? 9 A. The resulting GEUS transmission Rate Base is $6,677,590. 10 IV. RETURN ON RATE BASE: SCHEDULE C-2 11 Q. WHICH RETURN METHOD DID GEUS USE TO CALCULATE RETURN ON 12 RATE BASE? 13 A. The Non-IOU TCOS RFP instructions allow for four methods in determining the Return 14 on Rate Base: 1) Rate-of-Return Method, 2) Debt-Service-Coverage (“DSC”) Method, 3) 15 Cash-Flow Method, and 4) Times-Interest-Earned Method. GEUS elected to use the DSC 16 Method to determine its return. 17 Q. WHY DID GEUS ELECT TO USE THE DSC METHOD TO DETERMINE ITS 18 RETURN? 19 A. GEUS’s current debt service obligations combined with anticipated near-term future debt-20 service obligations are significant for GEUS and require minimum cash requirements that 21 are more fairly reflected under the DSC Method. Over the next five years GEUS plans to 22 fund approximately $11 million of transmission investment with debt. 23 Q. PLEASE DESCRIBE THE DSC METHOD. 24 A. The DSC Method allows a utility to earn a return based on its debt service and the debt-25 service-coverage levels stated in the TSP’s most recently issued bond and debt covenants, 26 plus an additional coverage of 0.25. 27 56 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 750 PUC Docket No. _______________ 12 Direct Testimony & Attachments of Jill A. Schuepbach Debt-service coverage is a measure of annual revenues in excess of O&M costs that are 1 available to meet total system principal and interest payments and is expressed as a ratio. 2 For example, a debt service coverage ratio of 1.50 reflects that a utility, after paying its 3 O&M costs, has sufficient annual revenue to meet its principal and interest payments, plus 4 additional funds of 50% above the principal and interest payments to satisfy other cash 5 requirements of the system, such as capital investment needs and funding cash reserves. 6 Q. PLEASE DESCRIBE THE STEPS IN DETERMINING RETURN CALCULATED 7 UNDER THE DSC METHOD. 8 A. First, the Debt Service is multiplied by the required Debt Service Coverage plus 0.25 9 resulting in the Debt Service with Coverage. Second, the utility’s depreciation, 10 amortization, and interest income are subtracted from the Debt Service with Coverage 11 resulting in the Return. Third, the Return is divided by the Rate-Base balance to calculate 12 a percentage Return on Rate Base (%). Fourth, the Return on Rate Base (%) is multiplied 13 by the Transmission Rate Base from Schedule B resulting in the Transmission Return ($). 14 Fifth, the Transmission Return is included on Schedule A as part of the Transmission 15 Revenue Requirement. 16 Q. WHAT SOURCE DOCUMENTS WERE USED TO CALCULATE THE RETURN 17 ON RATE BASE USING THE DSC METHOD? 18 A. The source of data used to calculate GEUS’s return is GEUS’s debt-service-amortization 19 schedules as provided by Mr. Copeland 20 Q. WERE ANY ADJUSTMENTS MADE TO SCHEDULE C-2? 21 A. Yes. In 2019, GEUS refinanced all outstanding debt with revenue bonds pledged against 22 GEUS’s total system revenues. Also, in consideration of the timing of the 2019 refinancing 23 and to agree with GEUS’s long-term investment strategy that has been in place since 2018, 24 I made an additional adjustment to the annual debt service as described below and by Mr. 25 Copeland. Each of these adjustments is known and measurable. 26 57 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 751 PUC Docket No. _______________ 13 Direct Testimony & Attachments of Jill A. Schuepbach Q. PLEASE DESCRIBE THE ADDITIONAL DEBT SERVICE ADJUSTMENTS. 1 A. I made two adjustments to the debt service. First, I adjusted annual debt service payments 2 to agree with the FY 2020-2021 Budget4 as adopted by the Board. GEUS will make debt 3 service payments as shown in WP/C-2/1 consistent with the utility’s long-term financial 4 plan and as supported in Mr. Copeland’s testimony. Second, the debt service payment in 5 2019 represents a partial year as the new bonds were issued during the year. Therefore, I 6 annualized the 2019 payment to represent a full-year’s payment. The debt service on 7 Schedule C-2 represents the principal and interest payments that GEUS will make for fiscal 8 year 2020. 9 Q. DOES GEUS PLAN ON ISSUING ANY ADDITIONAL DEBT? 10 A. Yes, as I noted earlier, over the next five years GEUS plans to invest $11 million in 11 transmission assets and intends to fund that capital spending with debt totaling $11 million. 12 Q. WERE THE PLANNED DEBT ISSUES INCLUDED IN THE DSC 13 CALCULATION? 14 A. No. We did not include the proposed debt service in the DSC Method calculation. 15 However, GEUS will include the proposed debt in any future requests. 16 Q. WHAT IS GEUS’S REQUIRED LEVEL OF DEBT SERVICE COVERAGE? 17 A. The Board established a DSC ratio target of 2.25 times debt service for planning purposes. 18 However, GEUS must maintain a minimum DSC ratio of at least 1.25 times the average 19 annual debt service requirement as stipulated in its bond indentures. A copy of the City of 20 Greenville, Texas, Electric System Revenue Refunding Bonds Series 2019A Official 21 Statement is included as WP/C-2/2. 22 Q. WHAT DEBT SERVICE COVERAGE RATIO WAS USED IN THE DSC 23 ANALYSIS? 24 A. Although the Board directs GEUS management to operate under a 2.25 DSC ratio, for 25 GEUS’s TCOS application, I used a 1.25 minimum DSC ratio plus 0.25 as allowed by the 26 4 http://geus.org/DocumentCenter/View/694/FY2020-21-Proposed-Budget. 58 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 752 PUC Docket No. _______________ 14 Direct Testimony & Attachments of Jill A. Schuepbach PUC (or 1.50) to calculate GEUS’s return. Based on the level of debt service and the fiscal 1 needs of the utility, a 1.50 DSC ratio is sufficient. As shown in Schedule C-2, the resulting 2 Return on Rate Base using a 1.5 DSC ratio is 13.12%. 3 Q. WHAT WAS THE RESULTING RETURN? 4 A. Applying the 13.12% rate of return to Total Rate Base for the Transmission Function yields 5 a return of $876,036 (13.12% x $6,677,590) as shown in Schedule B. 6 Q. IS THE CALCULATED RETURN USING THE DSC METHOD COMPARABLE 7 TO AN IOU RETURN? 8 A. No; the calculated Return of 13.12% is a mathematical result of the DSC method. It is not 9 comparable to an IOU rate of return. Municipal utilities like GEUS do not issue stock to 10 third party investors and are not subject to return on equity metrics commonly used in 11 determining an IOU’s weighted average cost of capital (“WACC”) calculations. GEUS’s 12 only sources of capital originate from revenue from current earnings and debt pledged to 13 system revenues. Therefore, the return calculation is simply a mathematical result of 14 comparing cash needs with rate base. Comparing such a result with an approved IOU 15 return is not appropriate and is misleading. 16 V. OPERATION AND MAINTENANCE EXPENSE: D SCHEDULES 17 Q. WHAT SOURCE DOCUMENTS WERE USED TO PREPARE THE D 18 SCHEDULES AND WORKPAPERS? 19 A. I relied on GEUS’s 2019 CAFR and supporting detailed documents to prepare the D 20 Schedules and workpapers. 21 Q. PLEASE DESCRIBE SCHEDULE D-1, O&M EXPENSE. 22 A. Schedule D-1 contains the O&M expense for Accounts 500 through 917. The O&M 23 expense shown on Schedule D-1 does not include Payroll Taxes as those are contained in 24 Schedule E-2. Generation, Transmission, and Distribution O&M accounts 500 through 25 917 were directly assigned to the appropriate utility function per the instructions in the 26 Non-IOU TCOS RFP. 27 59 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 753 PUC Docket No. _______________ 15 Direct Testimony & Attachments of Jill A. Schuepbach Q. WERE ANY ADJUSTMENTS MADE IN SCHEDULE D-1? 1 A. Yes; adjustments were made to the following accounts: 2 • Account 560: Transmission Operations Supervision and Engineering 3 • Account 566: Miscellaneous Transmission Expense 4 • Account 580: Distribution Operations Supervision and Engineering 5 • Account 588: Miscellaneous Distribution Expense 6 Q. PLEASE DESCRIBE THE ADJUSTMENT TO FERC ACCOUNTS 560, 566, 580, 7 AND 588. 8 A. GEUS does not distinguish between transmission and distribution activity when booking 9 Operations Supervision, and Engineering expenses. GEUS books all supervision and 10 engineering expenses to Distribution Account 580. To reflect that a certain portion of these 11 expenses relate to the transmission function, Mr. Copeland adjusted these expenses as 12 described his testimony. 13 Similarly, GEUS does not distinguish between transmission and distribution Miscellaneous 14 Expenses. As a result, GEUS books all Miscellaneous Expenses to Account 588. Again, 15 as Mr. Copeland explains in his testimony, he adjusted the expenses for Account 588 to 16 reflect that a certain portion of Miscellaneous Expenses are related to the transmission 17 function. In total, these adjustments added expenses to Transmission operation Accounts 18 560 and 566 and equally reduced expenses in Distribution operation Accounts 580 and 19 588. These adjustments are shown on WP/D-1/1. 20 Q. IS THE EXPENSE ADJUSTMENT CONSISTENT WITH PREVIOUS GEUS TCOS 21 FILINGS? 22 A. Yes; the adjustment is consistent with the previous full filings Docket No. 371805 and 23 Docket No. 42581. In Docket No. 42581, the Commission approved allocation of 33% of 24 5 Docket No. 37180, Application of GEUS to Change Rates for Wholesale Transmission Service, Final Order (Nov. 2, 2009) (“Docket No. 37180”). 60 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 754 PUC Docket No. _______________ 16 Direct Testimony & Attachments of Jill A. Schuepbach the engineering expenses to GEUS’s Transmission Function. In this filing, GEUS 1 allocated 29% of the engineering expenses to GEUS’s Transmission Function. 2 Q. PLEASE DESCRIBE SCHEDULE D-2, ADMINISTRATIVE & GENERAL 3 EXPENSE. 4 A. Schedule D-2 contains the expenses for Accounts 920 through 935. The expenses shown 5 on Schedule D-2 do not include labor-related taxes as those are contained in Schedule E-6 2. Accounts 920 through 935 relate to Administration and General Expense and were 7 allocated as follows: 8 • Account 920: Administration and General Expense was allocated using the PAYXAG 9 allocator per the instructions in the Non-IOU TCOS RFP. 10 • Account 921: Office Supplies Expense was allocated using the PAYXAG allocator per 11 the instructions in the Non-IOU TCOS RFP. 12 • Account 924: Property Insurance Expense was allocated using the net plant-in-service 13 (“PLTSVC-N”) allocator per the instructions in the Non-IOU TCOS RFP. 14 • Account 925: Injuries and Damages Expense was allocated using the PAYXAG 15 allocator per the instructions in the Non-IOU TCOS RFP. 16 • Account 926: Pensions and Benefits Expense was allocated using the PAYXAG 17 allocator per the instructions in the Non-IOU TCOS RFP. 18 • Account 930: Miscellaneous General Expense was allocated using the PAYXAG 19 allocator per the instructions in the Non-IOU TCOS RFP. 20 • Account 930.1: General Advertising Expense was directly assigned to the Distribution 21 Function as these expenses are associated with GEUS retail customers. 22 • Account 930.2: Miscellaneous General Expense relates to Board activities and was 23 allocated to all GEUS utility functions using the PLTSVC-N allocator consistent with 24 GEUS’s previous TCOS filing, Docket 42581. 25 61 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 755 PUC Docket No. _______________ 17 Direct Testimony & Attachments of Jill A. Schuepbach • Account 935: Maintenance of General Plant Expense was allocated to all GEUS utility 1 functions based on net general plant (“GNLPLT-N”) per the instructions in the Non-2 IOU TCOS RFP. 3 Q. PLEASE DESCRIBE SCHEDULE D-3, PAYROLL EXPENSE. 4 A. Payroll Expense was allocated to the transmission function in a manner consistent with the 5 associated O&M expense accounts in Schedules D-1 and D-2. 6 Q. WERE ANY ADJUSTMENTS MADE TO SCHEDULE D-3? 7 A. Yes. Labor contained in FERC Accounts 560, 566, 580, and 588 was adjusted consistent 8 with Schedule D-1 to reflect that a certain portion of these expenses relate to the 9 transmission function. These adjustments are shown in WP/D-3/1 and are described by 10 Mr. Copeland. 11 Q. DOES GEUS HAVE ANY EXCLUSIONS? 12 A. No; as shown in Schedule D-5, GEUS does not have any exclusions. 13 Q. WHAT IS THE RESULT OF THE O&M EXPENSE CALCULATIONS? 14 A. GEUS’s transmission expense is $1,461,052 and its A&G expense related to Transmission 15 is $351,712, for a total O&M expense of $1,812,764, shown in Schedule A. 16 VI. DEPRECIATION AND AMORTIZATION EXPENSE: SCHEDULE E-1 17 Q. WHAT SOURCE DOCUMENTS WERE USED TO PREPARE THE E 18 SCHEDULES AND WORKPAPERS? 19 A. I relied on GEUS’s 2019 CAFR and supporting detailed documents to prepare the E 20 Schedules and workpapers. 21 Q. WERE THERE ANY ADJUSTMENTS TO THE DEPRECIATION 22 CALCULATION? 23 A. Yes; I adjusted the depreciation expense associated with the amount of CWIP that was 24 transferred into Gross Plant on Schedules B-1 and B-2 to reflect a full year of depreciation 25 based on GEUS’s depreciation rates as shown in WP/E-1/1. 26 62 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 756 PUC Docket No. _______________ 18 Direct Testimony & Attachments of Jill A. Schuepbach Q. WERE THERE ANY ADJUSTMENTS TO THE AMORTIZATION EXPENSE 1 CALCULATION? 2 A. Yes; I adjusted the amortization of the bond discount (premium). The amortization in the 3 test year represents a partial year of amortization related to the Series 2019A and 2019B 4 Bonds. Consistent with the treatment of debt service on Schedule C-2, I adjusted the 5 amortization amount to represent a full year, fiscal year 2020. These adjustments are 6 shown on WP/E-1/1 and described by Mr. Copeland. 7 Q. PLEASE DESCRIBE THE ALLOCATION OF DEPRECIATION TO THE 8 TRANSMISSION FUNCTION. 9 A. I allocated Depreciation Expense to the transmission function in a manner consistent with 10 the associated Gross Plant accounts on Schedules B-1, B-2, and B-3. 11 Q. PLEASE DESCRIBE THE ALLOCATION OF AMORTIZATION EXPENSE TO 12 THE TRANSMISSION FUNCTION. 13 A. The Amortization shown on Schedule E-1 is the amortization of the bond discount 14 (premium) associated with GEUS’s outstanding debt. GEUS issued the debt to fund 15 system capital improvements. I allocated the bond discount (premium) using the PLTSVC-16 N allocator as the debt is pledged against the GEUS system. 17 Q. WHAT WAS THE RESULT OF YOUR DEPRECIATION AND AMORTIZATION 18 EXPENSE CALCULATION? 19 A. The Depreciation and Amortization Expense related to the transmission function is 20 $244,020. 21 VII. TAXES OTHER THAN INCOME: SCHEDULE E-2 22 Q. WHAT SOURCE DOCUMENTS WERE USED TO PREPARE TAXES OTHER 23 THAN INCOME IN SCHEDULE E-2? 24 A. I relied on GEUS’s 2019 CAFR and supporting detailed documents to prepare Taxes Other 25 Than Income Tax. 26 63 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 757 PUC Docket No. _______________ 19 Direct Testimony & Attachments of Jill A. Schuepbach Q. WERE THERE ANY ADJUSTMENTS TO SCHEDULE E-2? 1 A. No adjustments were made to Schedule E-2. GEUS’s 2019 CAFR served as the basis for 2 the data contained in these schedules. 3 Q. PLEASE DESCRIBE THE TAXES OTHER THAN INCOME INCLUDED IN 4 SCHEDULE E-2? 5 A. Taxes Other Than Income include Payment in Lieu of Property Tax (“PILOT”), a General 6 Fund Transfer Fee, and a Board of Development Transfer Fee. City Charter requires GEUS 7 to pay the PILOT, General Fund Transfer Fee, and Board of Development Transfer Fee. 8 The General Fund Transfer Fee is 5% of revenues. The Board of Directors Transfer Fee is 9 1% of revenues. These transfers are not discretionary and are part of GEUS’s financial 10 obligations. 11 Additionally, GEUS is required to pay payroll taxes on behalf of its employees. 12 Q. PLEASE DESCRIBE THE ALLOCATION OF THE TAXES OTHER THAN 13 INCOME INCLUDED IN SCHEDULE E-2. 14 A. I allocated Taxes Other Than Income Tax to the transmission function based on the 15 underlying cost drivers. I allocated PILOT based on Net Plant reflecting that the tax is 16 based on utility plant in service. 17 The General Fund Transfer to the City is based on utility revenues and allocated to the 18 transmission function based on total utility revenue requirements (Schedule F-6). 19 I allocated Payroll Taxes consistent with the corresponding O&M accounts. 20 Q. WHAT IS THE RESULT OF THE TAXES OTHER THAN INCOME 21 ALLOCATIONS? 22 A. Allocation of the amount for PILOT results in $35,845 assigned to the transmission 23 function. Allocation of the General Fund Transfer to the City results in $271,327 assigned 24 to the transmission function. Allocation of Payroll Taxes results in $66,741 assigned to 25 the transmission function. The total expenses allocated to transmission on Schedule E-2 26 are $373,913. 27 64 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 758 PUC Docket No. _______________ 20 Direct Testimony & Attachments of Jill A. Schuepbach VIII. OTHER EXPENSES AND REVENUES: SCHEDULES E-4, E-5, AND E-6 1 Q. WHAT SOURCE DOCUMENTS WERE USED TO PREPARE SCHEDULES E-4, 2 E-5, AND E-6? 3 A. I relied on GEUS’s 2019 CAFR and supporting detailed documents to prepare Other 4 Expenses and Other Revenues. 5 Q. WERE THERE ANY ADJUSTMENTS TO SCHEDULES E-4, E-5, AND E-6? 6 A. No. 7 Q. DOES GEUS HAVE ANY “OTHER EXPENSES” IN SCHEDULE E-4? 8 A. No. 9 Q. DOES GEUS HAVE ANY “OTHER REVENUES” IN SCHEDULE E-5? 10 A. Yes. GEUS does have Other Revenues; these appear in Schedule E-5. The Other Revenues 11 are categorized as Off System Sales, TCOS Revenues, Other Billed Sales, 12 Reimbursements, Other Revenues, and Interest Income. 13 Q. PLEASE DESCRIBE HOW “OTHER REVENUES” IN SCHEDULE E-5 WERE 14 ALLOCATED. 15 A. GEUS allocated each account and/or group of accounts based on the underlying driver for 16 the revenues as described below: 17 • Off-System Sales Revenues were allocated to the Generation function as the revenues 18 are a result of market power sales. This allocation is consistent with GEUS’s previous 19 TCOS filing, Docket 42581. 20 • TCOS Revenues were allocated to the Distribution function per the instructions in the 21 Non-IOU TCOS RFP. 22 • Other Billed Sales/Charges were allocated to the Distribution function consistent with 23 GEUS’s previous TCOS filing, Docket 42581. 24 • Reimbursements were allocated to the Distribution function consistent with GEUS’s 25 previous TCOS filing, Docket 42581. 26 65 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 759 PUC Docket No. _______________ 21 Direct Testimony & Attachments of Jill A. Schuepbach • Pole Use Revenues were allocated to the Distribution function consistent with GEUS’s 1 previous TCOS filing, Docket 42581. 2 Q. HOW WAS INTEREST INCOME ALLOCATED ON SCHEDULE E-5? 3 A. GEUS allocated interest income based on the underlying driver for the funds earning 4 interest as described below: 5 • Fund 910 was allocated on total O&M consistent with GEUS’s previous TCOS filing, 6 Docket 42581. 7 • Fund 911 was allocated to the Generation function as this fund was created to support 8 generation. 9 • Fund 913 was allocated using the PLTSVC-N allocator consistent with GEUS’s 10 previous TCOS filing, Docket 42581. 11 Q. HOW WAS INTEREST INCOME APPLIED TO THE TCOS REVENUE 12 REQUIREMENT? 13 A. As GEUS uses the DSC method for the return on invested capital, interest income is a 14 deduction in the return calculation on Schedule C-2. As interest income is deducted in the 15 calculation of return on invested capital, it was excluded from the other revenues deducted 16 from the TCOS revenue requirement on Schedule A. 17 Q. DOES GEUS HAVE ANY REVENUES ASSOCIATED WITH TRANSMISSION 18 SERVICE OUTSIDE OF ERCOT? 19 A. No; as shown in Schedule E-6 GEUS does not have any revenues associated with 20 transmission service outside of ERCOT. 21 Q. DOES GEUS HAVE ANY REVENUES ASSOCIATED WITH WHEELING 22 UNDER EXISTING CONTRACTS? 23 A. No; as shown in Schedule E-6 GEUS does not have any revenues associated with wheeling 24 under existing contracts. 25 66 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 760 PUC Docket No. _______________ 22 Direct Testimony & Attachments of Jill A. Schuepbach Q. WHAT WAS THE RESULT OF THE OTHER EXPENSES AND REVENUES 1 CALCULATIONS AND ALLOCATIONS TO TRANSMISSION? 2 A. The total Other Expenses allocated to the Transmission function are $0. The Other 3 Revenues total allocated to the Transmission function, not including interest income, are 4 $0. The Interest Income allocated to the Transmission function is $20,705 and is accounted 5 for on Schedule C-2. 6 IX. SUMMARY AND RECOMMENDATIONS 7 Q. PLEASE SUMMARIZE GEUS’S NON-IOU TCOS RFP. 8 A. GEUS is submitting this Non-IOU TCOS RFP using the DSC Methodology. As I show in 9 Schedule A, GEUS’s TCOS revenue requirement is $3,306,733. GEUS developed the cost 10 of service consistent with the Non-IOU TCOS RFP, and it is fair and reasonable. The 11 resulting access charge is $46.590 per MW per year. 12 Q. WHAT DO YOU RECOMMEND? 13 A. I recommend the PUC approve GEUS’s Non-IOU TCOS RFP as filed. 14 Q. DOES THAT CONCLUDE YOUR TESTIMONY? 15 A. Yes. 16 67 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 761 PUC DOCKET NO. ___________________ APPLICATION OF GEUS TO CHANGE RATES FOR WHOLESALE TRANSMISSION SERVICE § § § § BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS DIRECT TESTIMONY AND ATTACHMENTS OF JILL A. SCHUEPBACH Attachment JAS-1 Resume and Record of Testimony 23 68 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 762 Jill Schuepbach Executive Consultant jschuepbach@newgenstrategies.net Economics | Strategy | Stakeholders | Sustainability www.newgenstrategies.net Jill Schuepbach has been providing financial expertise to the utility industry for over 20 years. She has proven project management and analytical skills in the areas of utility cost of service and rate design, financial planning, economic and financial analysis, engineer of record, and pole attachment fees. In addition, Ms. Schuepbach has experience with feasibility studies, litigation support, and preparing expert witness testimony. Her project experience includes work for municipal, investor-owned, and member-owned utility clients. EDUCATION  Master of Business Administration, University of Colorado  Bachelor of Science in Mechanical Engineering, University of Missouri PROFESSIONAL REGISTRATIONS / CERTIFICATIONS  Registered Professional Engineer (PE), Colorado KEY EXPERTISE  Cost of Service and Rate Design  Project Financing  Engineer of Record  Economic and Financial Analysis  Litigation Support  Pole Attachment Fees RELEVANT EXPERIENCE Financial Forecasts, Cost of Service and Rate Design Ms. Schuepbach has assisted with numerous utility financial forecasts, cost of service, and rate design projects. Financial Forecast tasks include developing models to balance capital spending and rate increases, support compliance with debt covenants, and assist with general short-term and long-term decision making. Cost of Service tasks include the development of the revenue requirement, functionalization and classification of costs, and allocation of costs to customer classes. Rate Design tasks include a review of existing customer class criteria, design, tariff development and transitioning of models for the client’s future use. Additional analysis include the evaluation of miscellaneous charges and fees based on the utility’s costs and local and state policy. She has assisted with training and workshops regarding cost of service and rate design theory, industry practice and rate strategies to governing bodies and boards. She has also presented rate study results and provided financial recommendations to governing bodies, boards, and city councils. She has performed electric, natural gas, and photovoltaic cost of service. Her efforts have also included support in contract negotiations in developing a rate to serve a large industrial load and unbundled transmission costs. 24 69 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 763 Jill Schuepbach Executive Consultant Thoughtful Decision Making for Uncertain Times 2 Ms. Schuepbach’s clients for cost of service and rate design services include:  Brownsville Public Utilities Board, Texas  Bryan Texas Utilities, Texas  Estes Park, Colorado  Farmington Electric Utilities System, New Mexico  Glendale Water and Power, California  GEUS, Texas  Lafayette Public Power Authority, Louisiana  Lafayette Utilities System, Louisiana  Loup Power District, Nebraska  Navajo Tribal Utility Authority, Arizona She has also evaluated energy consumption profiles, billing accuracy, base operations, contract terms, rate options, asset / facilities upgrades (e.g., energy efficiency/demand response), distributed generation options, and tenant billing recovery for the US Army. Transmission Revenue Requirement Compliance Filings Ms. Schuepbach has assisted with multiple transmission rate filings at the Regional Transmission Organization (RTO) level and at Federal Energy Regulatory Commission (FERC) regarding Annual Transmission Revenue Requirements (ATRR), and methodologies for determining rates. Ms. Schuepbach’s clients include:  Bryan Texas Utilities, Texas  GEUS, Texas  City of Garland Power and Light, Texas  Independence Power & Light, Missouri Engineer of Record and Consulting Engineer Reports Ms. Schuepbach assists in the development of Consulting Engineer Reports and associated ordinance required reviews for municipal utilities. These reviews typically require an annual assessment of the utilities’ financial and physical operations for the duration of the bond period. The field review typically includes a determination of the condition of the physical assets of the utility, which also includes a review of the utilities budgeting and planning process. Ms. Schuepbach’s project experience includes:  Lafayette Utilities System, Louisiana  Lafayette Public Power Authority, Louisiana Economic and Financial Analysis Ms. Schuepbach has provided economic analyses for municipal utilities involving generation projects. These evaluations included reviewing the costs and operation of new generation units added to the existing generation resources and the economic analysis of the proposed generation on retail rates. Ms. Schuepbach assisted with the allocation of Hoover Power in Arizona, which included technical advice, reviewing customer applications for completion and accuracy and scenario analysis of the potential hydro power allocations. Her clients have included:  Arizona Power Authority, Arizona  Brownsville Public Utilities Board, Texas  City of Bryan, Texas  Lafayette Utilities System, Louisiana Litigation Support Ms. Schuepbach has assisted in litigation support and preparation of expert witness testimony in Texas, Louisiana, Missouri, and Indiana. Her testimony support is related to revenue requirements, cost of service and rate design as 25 70 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 764 Jill Schuepbach Executive Consultant 3 Thoughtful Decision Making for Uncertain Times well as the proper allocation of generation costs given a systems’ unique characteristics. Ms. Schuepbach’s litigation support clients include:  Brownsville Public Utility Board, Texas: Docket Nos. 38556 & 32905  Bryan Texas Utilities, Texas: Docket Nos. 44467 and 41920  GEUS: Texas’ Dockets Nos. 45281 and 37180  Independence Power & Light, Missouri; Docket No. ER15-1499-001  Lafayette Utilities System, Louisiana; Docket No. 00994490  Northern Indiana Public Service Company, Indiana; Cause Nos. 44688, 44733, 45159  Indiana Michigan Power Company, Indiana, Cause No. 45235 Pole Attachment Fees Ms. Schuepbach has developed pole attachment fees for several clients. She has employed various methodologies including those recommended by the Federal Communications Commission (FCC) and the American Public Power Association (APPA). She has recommended rates for cable and communications companies based on the type of poles to which they are attached. Her work also includes a review of the contract or agreement between the utility and the customer. Her projects include:  Farmington Electric Utilities System, New Mexico  Keys Energy Services  Navajo Tribal Utility Authority, Arizona  Navopache Electric Cooperative WORKSHOPS AND PRESENTATIONS Ms. Schuepbach has given industry presentations focused on cost of service and ratemaking. Host organizations and the topics Ms. Schuepbach presented include: Electric Utility Consultants, Inc.  Introduction to Cost of Service Concepts and Techniques for Electric Utilities  Introduction to Rate Design for Electric Utilities California Public Utilities Commission  Cost of Service Concepts for Electric Utilities 26 71 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 765 Record of Litigation Support and Testimony: Jill Schuepbach Testimony Utility Proceeding Subject Before Client Date 1.Orlando UtilitiesCommission Docket No. 010142 Demand Side Management Florida Public Service Commission Orlando Utilities Commission 2001 Litigation Support Utility Proceeding Subject Before Client Date 1.Indiana Michigan PowerCompany Cause No. 45235 Petition of Indiana Michigan Power Company for authority to increase its rates and charges for electric utility service. Indiana Utility Regulatory Commission City of Fort Wayne, City of Marion, and Marion Municipal Utilities 2019 2.Northern Indiana PublicService Company Cause No. 45159 Rate Case: Cost of Service, Rate Design and new Industrial Rate Structure Indiana Utility Regulatory Commission United States Steel 2019 3.Bryan Texas Utilities Docket No. 48123 Application of Bryan Texas Utilities for Interim Update of Wholesale Transmission Rates Pursuant to Substantive Rule 25.192(g)(1) Public Utility Commission of Texas Bryan Texas Utilities 2018 4.Northern Indiana PublicService Company Cause No. 44733-TDSIC Transmission, Distribution, and Storage System Improvement Charge Indiana Utility Regulatory Commission United States Steel 2016 5.Northern Indiana PublicService Company Cause No. 44688 Rate Case: Cost of Service, Rate Design and Interruptible Demand Credits Indiana Utility Regulatory Commission United States Steel 2016 6.City of Independence (MO)Power and Light Docket No. ER15-1499-001 Annual Transmission Revenue Requirement within SPP Federal Energy Regulatory Commission City of Independence (MO) Power and Light 2015 7.Bryan Texas Utilities Docket No. 44467 Application to Change Rates for Wholesale Transmission Service: Interim Filing Public Utility Commission of Texas Bryan Texas Utilities 2015 8.GEUS Docket No. 42581 Application to Change Rates for Wholesale Transmission Service: Full Filing Public Utility Commission of Texas GEUS (Greenville, Texas) 2014 9.Bryan Texas Utilities Docket No. 41920 Application to Change Rates for Wholesale Transmission Service: Interim Filing Public Utility Commission of Texas Bryan Texas Utilities 2013 10.Brownsville Public UtilitiesBoard Docket No. 38556 Application to Change Rates for Wholesale Transmission Service: Full Filing Public Utility Commission of Texas Brownsville Public Utilities Board 2010 11.GEUS Docket No. 37180 Application to Change Rates for Wholesale Transmission Service: Full Filing Public Utility Commission of Texas GEUS (Greenville, Texas) 2009 12.Entergy Gulf States, Inc.Docket No. 00994490 Expropriation of Electric Distribution Facilities 15th Judicial District Court, Parish of Lafayette, Louisiana Lafayette Utilities System 2006 27 72 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 766 PUC DOCKET NO. ___________________ APPLICATION OF GEUS TO CHANGE RATES FOR WHOLESALE TRANSMISSION SERVICE § § § § BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS DIRECT TESTIMONY AND ATTACHMENTS OF JILL A. SCHUEPBACH (REDACTED) Attachment JAS-2 Schedules and Workpapers 28 73 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 767 Schedule A: Revenue RequirementTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach Description Generation Transmission Distribution Total ReferenceFunctionFunctionFunctionSchedule(1)(2)(3)(4)(5)(6) REVENUE REQUIREMENTEligible Fuel 272,176$ -$ -$ 272,176$ D-1Non-Eligible Fuel -$ -$ -$ -$ D-1Eligible Purchased Power 25,400,079$ -$ -$ 25,400,079$ D-1 Non-Eligible Purchased Power -$ -$ -$ -$ D-1Operation & Maintenance (less Labor Related Taxes)5,302,428$ 1,812,764$ 9,343,101$ 16,458,294$ D-1 & D-2Other Expenses -$ -$ -$ -$ E-4Decommissioning Expense -$ -$ -$ -$ Depreciation & Amortization 1,006,466$ 244,020$ 984,432$ 2,234,917$ E-1Federal Income Taxes -$ -$ -$ -$ E-3Taxes Other Than Income (Payments to the City)2,256,035$ 307,172$ 1,148,050$ 3,711,256$ E-2Taxes Other Than Income (Labor Related)149,295$ 66,741$ 244,948$ 460,985$ E-2 Total Operating Cost 34,386,479$ 2,430,697$ 11,720,531$ 48,537,707$ Return on Invested Capital 4,836,872$ 876,036$ 3,211,634$ 8,924,541$ BSubtotal Revenue Requirement 39,223,350$ 3,306,733$ 14,932,165$ 57,462,249$ Subtotal Revenue Requirement 39,223,350$ 3,306,733$ 14,932,165$ 57,462,249$ Less: Other Revenues 13,970,011$ -$ 2,245,062$ 16,215,073$ E-5 & E-6Unbundled Revenue Requirement 25,253,339$ 3,306,733$ 12,687,103$ 41,247,176$ ERCOT 4-CP MW 70,981 Docket 50333 Wholesale Transmission Rate $/MW $46.590 Wholesale Transmission Rate $/kW $0.04659 29 74 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 768 Transmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach Description Generation Transmission Distribution Total ReferenceFunctionFunctionFunctionSchedule(1)(2)(3)(4)(5)(6) Rate BaseOriginal Cost of Plant 51,920,021$ 11,810,356$ 28,759,324$ 92,489,700$ B-1General Plant 2,708,926$ 1,343,075$ 6,789,368$ 10,841,370$ B-2Communication Equipment 28,414$ 5,215$ 14,180$ 47,809$ B-3 Accumulated Depreciation 22,650,576$ 6,920,964$ 16,936,364$ 46,507,904$ B-5Net Plant in Service 32,006,785$ 6,237,683$ 18,626,507$ 56,870,975$ Other Rate Base Items CWIP -$ -$ -$ -$ B-4Plant Held for Future Use -$ -$ -$ -$ B-6Accumulated Provisions -$ -$ -$ -$ B-7Materials & Supplies 638,029$ 170,317$ 2,179,314$ 2,987,660$ B-8 Cash Working Capital 4,115,344$ 269,590$ 1,323,629$ 5,708,563$ B-9 Prepayments 108,934$ -$ -$ 108,934$ B-10Other Rate Base -$ -$ 2,351,254$ 2,351,254$ B-11Regulatory Assets -$ -$ -$ -$ B-12 Total Other Rate Base 4,862,308$ 439,907$ 5,854,197$ 11,156,411$ Total Rate Base 36,869,093$ 6,677,590$ 24,480,703$ 68,027,386$ Rate of Return 13.12%13.12%13.12%13.12%C-2 Return on Invested Capital 4,836,872$ 876,036$ 3,211,634$ 8,924,541$ Schedule B: Rate Base 30 75 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 769 Schedule B-1: Original Cost of PlantTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method (1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Electric Plant in Service Steam Production 310 Land & Land Rights WP/B-1/3 117,341$ -$ 117,341$ 117,341$ 117,341$ -$ -$ Generation311Structures and Improvements WP/B-1/3 1,082,096$ -$ 1,082,096$ 1,082,096$ 1,082,096$ -$ -$ Generation312Boiler Plant Equipment WP/B-1/3 6,707,487$ -$ 6,707,487$ 6,707,487$ 6,707,487$ -$ -$ Generation313Engines/Engine Driven Gen.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation314Turbogenerator Units WP/B-1/3 9,067,107$ -$ 9,067,107$ 9,067,107$ 9,067,107$ -$ -$ Generation 315 Accessory Electric Equip.WP/B-1/3 950,135$ -$ 950,135$ 950,135$ 950,135$ -$ -$ Generation316Misc. Power Plant Equip.WP/B-1/3 12,913$ -$ 12,913$ 12,913$ 12,913$ -$ -$ GenerationTotal Steam Production 17,937,079$ -$ 17,937,079$ 17,937,079$ 17,937,079$ -$ -$ Nuclear Production 320 Land & Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation321Structures and Improvements WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation322Reactor Plant Equipment WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation323Engines/Engine Driven Gen.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation324Turbogenerator Units WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation 325 Accessory Electric Equip.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation326Misc. Power Plant Equip.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ GenerationTotal Nuclear Production -$ -$ -$ -$ -$ -$ -$ Hydraulic Production 330 Land & Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation331Structures and Improvements WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation332Reservoirs, Dams, and Waterways WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation333Water Wheels, Turbines, & Generators WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation334Accessory Electric Equipment WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation 335 Miscellaneous Power Plant Equip.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation336Roads, Railroads, and Bridges WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ GenerationTotal Hydraulic Production -$ -$ -$ -$ -$ -$ -$ Other Production 340 Land & Land Rights WP/B-1/3 43,850$ -$ 43,850$ 43,850$ 43,850$ -$ -$ Generation341Structures and Improvements WP/B-1/3 4,655,874$ -$ 4,655,874$ 4,655,874$ 4,655,874$ -$ -$ Generation342Fuel Holder, Producer & Acc WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation343Prime Movers WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation344GeneratorsWP/B-1/3 28,878,941$ -$ 28,878,941$ 28,878,941$ 28,878,941$ -$ -$ Generation 345 Accessory Plant Equipment WP/B-1/3 343,230$ -$ 343,230$ 343,230$ 343,230$ -$ -$ Generation346Misc. Power Plant Equipment WP/B-1/3 61,047$ -$ 61,047$ 61,047$ 61,047$ -$ -$ GenerationTotal Other Production 33,982,942$ -$ 33,982,942$ 33,982,942$ 33,982,942$ -$ -$ 31 76 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 770 Schedule B-1: Original Cost of PlantTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method (1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Total Production Plant 51,920,021$ -$ 51,920,021$ 51,920,021$ 51,920,021$ -$ -$ Electric Transmission Plant 350 Land and Land Rights WP/B-1/3 53,501$ -$ 53,501$ 53,501$ -$ 53,501$ -$ Transmission352Structures and Improvements WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission353Station Equipment WP/B-1/3 & WP/B-4/1 5,704,404$ 376,115$ 6,080,519$ 6,080,519$ -$ 6,080,519$ -$ Transmission354Towers and Fixtures WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission355Poles and Fixtures WP/B-1/3 1,156,632$ -$ 1,156,632$ 1,156,632$ -$ 1,156,632$ -$ Transmission 356 O.H. Conductors & Devices WP/B-1/3 4,519,704$ -$ 4,519,704$ 4,519,704$ -$ 4,519,704$ -$ Transmission357Underground Conduit WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission358Underground Conductors WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission359Roads and Trails WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ TransmissionTotal Electric Transmission Plant 11,434,241$ 376,115$ 11,810,356$ 11,810,356$ -$ 11,810,356$ -$ Electric Distribution Plant360Land and Land Rights WP/B-1/3 218,418$ -$ 218,418$ 218,418$ -$ -$ 218,418$ Distribution361Structures and Improvements WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Distribution362Station Equipment WP/B-1/3 & WP/B-4/1 6,239,507$ 1,517,621$ 7,757,128$ 7,757,128$ -$ -$ 7,757,128$ Distribution 363 Storage Battery Equipment WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Distribution364Poles, Towers & Fixtures WP/B-1/3 4,617,179$ -$ 4,617,179$ 4,617,179$ -$ -$ 4,617,179$ Distribution365O.H. Conductors & Devices WP/B-1/3 4,235,843$ -$ 4,235,843$ 4,235,843$ -$ -$ 4,235,843$ Distribution366Underground Conduits WP/B-1/3 1,865,939$ -$ 1,865,939$ 1,865,939$ -$ -$ 1,865,939$ Distribution367U.G. Conductors & Devices WP/B-1/3 3,078,563$ -$ 3,078,563$ 3,078,563$ -$ -$ 3,078,563$ Distribution 368 Line Transformers WP/B-1/3 4,357,638$ -$ 4,357,638$ 4,357,638$ -$ -$ 4,357,638$ Distribution369ServicesWP/B-1/3 546,593$ -$ 546,593$ 546,593$ -$ -$ 546,593$ Distribution370MetersWP/B-1/3 1,886,778$ -$ 1,886,778$ 1,886,778$ -$ -$ 1,886,778$ Distribution371Install. on Customer Prem.WP/B-1/3 94,496$ -$ 94,496$ 94,496$ -$ -$ 94,496$ Distribution372Leased Prop. on Cust. Premises WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Distribution 373 Street Lights WP/B-1/3 100,748$ -$ 100,748$ 100,748$ -$ -$ 100,748$ DistributionTotal Electric Distribution Plant 27,241,702$ 1,517,621$ 28,759,324$ 28,759,324$ -$ -$ 28,759,324$ Total Electric Plant Original Cost 90,595,964$ 1,893,737$ 92,489,700$ 92,489,700$ 51,920,021$ 11,810,356$ 28,759,324$ 32 77 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 771 WP/B-1/1: GEUS 2019 Comprehensive Annual Financial ReportTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach See Attached Exhibit 33 78 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 772 WP/B-1/2: GEUS 2019 Detailed Financial DataTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Total Account Lookup O&M W/O Payroll FICA Unemployment MedicareNo.Taxes Expenses(1)(2)(3)(4)(5)(6)(7)(8)(9) Group : [910]Electric Operating Fund Totals 45,841,805$ 8,309,347$ 379,194$ (7,524)$ 89,315$ 34 79 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 773 WP/B-1/3: Plant in Service, Accumulated Depreciation, Depreciation ExpenseTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Plant DepreciationAcct.Description G/L Balance Additions Deletions Transfers G/L Balance Balance Current Year Acc/Dep Transfers Balance No.9/30/2018 9/30/2019 9/30/2018 Depreciation Removed For Del 9/30/2019(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11)(12) Electric Land 3101 Land Steam 117,341$ -$ -$ -$ 117,341$ -$ -$ -$ -$ -$ 3401 Land Diesel 43,850$ -$ -$ -$ 43,850$ -$ -$ -$ -$ -$ 3501 Land Transmission 53,501$ -$ -$ -$ 53,501$ -$ -$ -$ -$ -$ 3601 Land Distribution 218,418$ -$ -$ -$ 218,418$ -$ -$ -$ -$ -$ 3890 Land General 110,503$ -$ -$ -$ 110,503$ -$ -$ -$ -$ -$ Total Land 543,613$ -$ -$ -$ 543,613$ -$ -$ -$ -$ -$ Steam 3110 Structures 1,455,530$ -$ -$ (373,434)$ 1,082,096$ 1,016,660$ 3,710$ -$ -$ 1,020,370$ 3120 Boiler Plt Equip 4,886,434$ 1,821,053$ -$ -$ 6,707,487$ 1,373,213$ 317,712$ -$ -$ 1,690,925$ 3140 Generators 9,067,107$ -$ -$ -$ 9,067,107$ 8,220,222$ 38,848$ -$ -$ 8,259,070$ 3150 Acc Elec Equip 956,875$ 10,000$ (16,740)$ -$ 950,135$ 454,462$ 64,549$ (16,740)$ -$ 502,271$ 3160 Mis Pwr Plt Equip 12,913$ -$ -$ -$ 12,913$ 12,913$ -$ -$ -$ 12,913$ Total Steam 16,378,859$ 1,831,053$ (16,740)$ (373,434)$ 17,819,738$ 11,077,471$ 424,818$ (16,740)$ -$ 11,485,549$ 0 -$ Engine 341 Structures 4,655,874$ -$ -$ -$ 4,655,874$ 967,425$ 126,278$ -$ -$ 1,093,703$ 344 Engines 28,633,941$ -$ -$ -$ 28,633,941$ 7,391,232$ 864,994$ -$ -$ 8,256,226$ 3442 Renewable Generators -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 345 Acc Elec Equip 216,217$ 108,818$ -$ 18,195$ 343,230$ 159,847$ 23,122$ -$ -$ 182,970$ 346 Mis Pwr Plt Equip 47,853$ 31,389$ -$ (18,195)$ 61,047$ 12,024$ 985$ -$ -$ 13,009$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Total Engines 33,553,885$ 140,207$ -$ -$ 33,694,092$ 8,530,528$ 1,015,379$ -$ -$ 9,545,907$ 0 -$ Renewables3442 Generators 245,000$ -$ -$ -$ 245,000$ 124,354$ 11,399$ -$ -$ 135,754$ Total Renewables 245,000$ -$ -$ -$ 245,000$ 124,354$ 11,399$ -$ -$ 135,754$ Transmission3530 Substations 5,714,414$ -$ (10,010)$ -$ 5,704,404$ 3,315,047$ 137,497$ (3,101)$ -$ 3,449,443$ 3555 TMPA Lines 1,156,632$ -$ -$ -$ 1,156,632$ 868,308$ 28,695$ -$ -$ 897,004$ 3565 GEUS Lines 4,241,141$ 369,821$ (91,258)$ -$ 4,519,704$ 1,790,277$ 120,087$ (91,258)$ -$ 1,819,106$ Total Transmission 11,112,187$ 369,821$ (101,268)$ -$ 11,380,739$ 5,973,632$ 286,280$ (94,360)$ -$ 6,165,552$ 0 -$ Distribution3620 Substations 6,239,507$ -$ -$ -$ 6,239,507$ 3,234,972$ 159,265$ -$ -$ 3,394,237$ 3640 Poles 4,535,340$ 215,667$ (133,828)$ -$ 4,617,179$ 2,145,115$ 141,897$ (133,828)$ -$ 2,153,184$ 3650 OH Conductors 3,995,821$ 241,671$ (1,649)$ -$ 4,235,843$ 1,769,653$ 128,454$ (1,649)$ -$ 1,896,458$ 3660 UG Conduit 1,820,226$ 126,186$ (80,474)$ -$ 1,865,939$ 957,847$ 81,428$ (80,474)$ -$ 958,801$ 3670 UG Conductors 3,031,745$ 142,626$ (95,808)$ -$ 3,078,563$ 1,578,850$ 143,653$ (95,808)$ -$ 1,626,696$ 35 80 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 774 WP/B-1/3: Plant in Service, Accumulated Depreciation, Depreciation ExpenseTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Plant DepreciationAcct.Description G/L Balance Additions Deletions Transfers G/L Balance Balance Current Year Acc/Dep Transfers Balance No.9/30/2018 9/30/2019 9/30/2018 Depreciation Removed For Del 9/30/2019(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11)(12) 3680 Transformers 4,371,693$ 254,113$ (268,168)$ -$ 4,357,638$ 2,227,643$ 198,950$ (268,168)$ -$ 2,158,425$ 3690 Service Connect 575,577$ 5,305$ (34,289)$ -$ 546,593$ 309,339$ 26,776$ (34,289)$ -$ 301,825$ 3701 Meters 1,904,404$ 48,933$ (66,558)$ -$ 1,886,778$ 813,584$ 87,924$ (66,558)$ -$ 834,950$ 3710 Vapor Lights 89,486$ 8,389$ (3,380)$ -$ 94,496$ 48,284$ 4,188$ (3,380)$ -$ 49,093$ 3750 St Lights/Signals 98,384$ 7,074$ (4,710)$ -$ 100,748$ 38,872$ 4,643$ (4,710)$ -$ 38,806$ Total Distribution 26,662,183$ 1,049,964$ (688,863)$ -$ 27,023,284$ 13,124,159$ 977,179$ (688,863)$ -$ 13,412,474$ 0 -$ General3901 Structures 5,948,457$ 30,755$ -$ (5,307)$ 5,973,905$ 2,581,676$ 183,452$ -$ -$ 2,765,127$ 3910 Furniture 564,538$ 62,065$ -$ -$ 626,603$ 197,529$ 14,753$ -$ -$ 212,282$ 3911 Office Equip -$ -$ (27,863)$ -$ (27,863)$ 275,220$ 16,341$ (27,863)$ -$ 263,699$ 3912 GENERAL / Meter 38,482$ -$ (4,356)$ -$ 34,126$ 32,293$ 1,727$ (4,356)$ -$ 29,664$ 3913 GENERAL / Customer Service -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 3914 GENERAL / Billing -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 3915 GENERAL / Cashiering 7,034$ -$ -$ -$ 7,034$ 7,034$ -$ -$ -$ 7,034$ 3920 Transport Equip 2,732,231$ 312,199$ (133,593)$ -$ 2,910,837$ 1,813,004$ 168,448$ (133,593)$ -$ 1,847,859$ 3930 WH Equip 69,324$ 14,960$ -$ -$ 84,284$ 63,913$ 3,185$ -$ -$ 67,098$ 394 Tools 13,918$ -$ -$ -$ 13,918$ 12,349$ 754$ -$ -$ 13,103$ 3950 Lab Equipment 336,292$ -$ (2,500)$ -$ 333,792$ 282,604$ 13,247$ (2,500)$ -$ 293,351$ 3960 Pwr Op Equip 317,094$ 125,120$ (43,665)$ -$ 398,548$ 240,671$ 18,635$ (43,665)$ -$ 215,642$ 3970 Comm Equip 47,809$ -$ -$ -$ 47,809$ 47,809$ -$ -$ -$ 47,809$ 3980 Miscellaneous Equipment -$ 372,382$ -$ -$ 372,382$ -$ -$ -$ -$ -$ Total General 10,075,177$ 917,481$ (211,976)$ (5,307)$ 10,775,375$ 5,554,102$ 420,541$ (211,976)$ -$ 5,762,667$ Total Electric (No CWIP)98,570,905$ 4,308,525$ (1,018,846)$ (378,741)$ 101,481,842$ 44,384,246$ 3,135,596$ (1,011,938)$ -$ 46,507,904$ 36 81 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 775 Schedule B-2: General PlantTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Electric General Plant389Land and Land Rights WP/B-1/3 110,503$ -$ 110,503$ 110,503$ 35,788$ 15,999$ 58,717$ PAYXAG390Structures and Improvements WP/B-1/3 & WP/B-4/1 5,973,905$ 3,300$ 5,977,205$ 5,977,205$ 1,935,787$ 865,380$ 3,176,038$ PAYXAG391Office Furniture & Equip.WP/B-1/3 639,900$ -$ 639,900$ 639,900$ 207,239$ 92,645$ 340,016$ PAYXAG392Transportation Equipment WP/B-1/3 2,910,837$ -$ 2,910,837$ 2,910,837$ 68,596$ 282,838$ 2,559,403$ TRANSPPLT-G393Stores Equipment WP/B-1/3 84,284$ -$ 84,284$ 84,284$ 17,999$ 4,805$ 61,480$ INV394Tools, Shop & Garage Equip.WP/B-1/3 13,918$ -$ 13,918$ 13,918$ 8,272$ 1,518$ 4,128$ PLTXGNL-N395Laboratory Equipment WP/B-1/3 333,792$ -$ 333,792$ 333,792$ 198,380$ 36,413$ 98,999$ PLTXGNL-N396Power Operated Equipment WP/B-1/3 398,548$ -$ 398,548$ 398,548$ 236,866$ 43,478$ 118,205$ PLTXGNL-N 397 See Schedule B-3 Schedule B-3 NA398Misc. Equipment WP/B-1/3 372,382$ -$ 372,382$ 372,382$ -$ -$ 372,382$ DISTRIBUTIONTotal General Plant 10,838,070$ 3,300$ 10,841,370$ 10,841,370$ 2,708,926$ 1,343,075$ 6,789,368$ 37 82 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 776 Schedule B-3: Communication EquipmentTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019 Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Communication Equipment397Communication Equipment WP/B-1/3 47,809$ -$ 47,809$ 47,809$ 28,414$ 5,215$ 14,180$ PLTXGNL-NTotal Communication Equipment 47,809$ -$ 47,809$ 47,809$ 28,414$ 5,215$ 14,180$ 38 83 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 777 Schedule B-4: Construction Work In ProgressTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Construction Work in ProgressCWIP 1,997,332$ (1,897,037)$ 100,295$ -$ -$ -$ -$ CWIP ProjectsTotal Construction Work in Progress 1,997,332$ (1,897,037)$ 100,295$ -$ -$ -$ -$ 39 84 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 778 WP/B-4/1: GEUS CWIP Adjustment to Gross PlantTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Construction Work in ProgressTransmission ProjectsCWIP LTV - Transmission Substations NA 117,204$ -$ 117,204$ 117,204$ -$ 117,204$ -$ TransmissionCWIPTransmission Substation NA 152,357$ -$ 152,357$ 152,357$ -$ 152,357$ -$ TransmissionCWIPTransmission Substation NA 103,178$ -$ 103,178$ 103,178$ -$ 103,178$ -$ TransmissionSubtotal372,739$ -$ 372,739$ 372,739$ -$ 372,739$ -$ Distribution ProjectsCWIP LTV - Distribution Substations NA 544,986$ -$ 544,986$ 544,986$ -$ -$ 544,986$ DistributionCWIPDistribution Substations NA 862,167$ -$ 862,167$ 862,167$ -$ -$ 862,167$ DistributionCWIPDistribution Substations NA 96,845$ -$ 96,845$ 96,845$ -$ -$ 96,845$ DistributionCWIPAMINA100,295$ (100,295)$ -$ -$ -$ -$ -$ Not in ServiceSubtotal1,604,293$ (100,295)$ 1,503,998$ 1,503,998$ -$ -$ 1,503,998$ Engineering Labor AllocationCWIPEngineering Labor 17,000$ -$ 17,000$ 17,000$ -$ 3,376$ 13,623$ CWIP Projects Engineering Labor Allocator Directly Allocated CWIP 1,977,032$ (100,295)$ 1,876,737$ 1,876,737$ -$ 372,739$ 1,503,998$ Share of CWIP Projects 0.0%19.9%80.1%CWIP Projects Transmission & Distribution CWIP 1,994,032$ (100,295)$ 1,893,737$ 1,893,737$ -$ 376,115$ 1,517,621$ CWIP Direct General Plant ProjectsCWIP Operations Center Architecture NA 3,300$ -$ 3,300$ 3,300$ Total Construction Work in ProgressCWIP 1,997,332$ (100,295)$ 1,897,037$ 1,897,037$ Acct.Description Reference 2019 Known Updated Plant Allocation No.Schedule Balance Adjustments Balance Method(12)(13)(14)(15)(16)(17)(18) Adjustment to Gross PlantTransmission353Station Equipment B-1 5,704,404$ 376,115$ 6,080,519$ DirectDistribution362Station Equipment B-1 6,239,507$ 1,517,621$ 7,757,128$ DirectGeneral Plant390 Structures and Improvements B-2 5,973,905$ 3,300$ 5,977,205$ Direct 40 85 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 779 Schedule B-5: Accumulated DepreciationTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Accumulated Depreciation Steam Production310Land & Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation311Structures and Improvements WP/B-1/3 1,020,370$ -$ 1,020,370$ 1,020,370$ 1,020,370$ -$ -$ Generation312Boiler Plant Equipment WP/B-1/3 1,690,925$ -$ 1,690,925$ 1,690,925$ 1,690,925$ -$ -$ Generation313Engines/Engine Driven Gen.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation314Turbogenerator Units WP/B-1/3 8,259,070$ -$ 8,259,070$ 8,259,070$ 8,259,070$ -$ -$ Generation315Accessory Electric Equip.WP/B-1/3 502,271$ -$ 502,271$ 502,271$ 502,271$ -$ -$ Generation316Misc. Power Plant Equip.WP/B-1/3 12,913$ -$ 12,913$ 12,913$ 12,913$ -$ -$ GenerationTotal Steam Production 11,485,549$ -$ 11,485,549$ 11,485,549$ 11,485,549$ -$ -$ Nuclear Production320Land & Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation321Structures and Improvements WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation322Reactor Plant Equipment WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation323Engines/Engine Driven Gen.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation324Turbogenerator Units WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation325Accessory Electric Equip.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation326Misc. Power Plant Equip.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ GenerationTotal Nuclear Production -$ -$ -$ -$ -$ -$ -$ Hydraulic Production330Land & Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation331Structures and Improvements WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation332Reservoirs, Dams, and Waterways WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation333Water Wheels, Turbines, and Generators WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation334Accessory Electric Equipment WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation335Miscellaneous Power Plant Equip.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation336Roads, Railroads, and Bridges WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ GenerationTotal Hydraulic Production -$ -$ -$ -$ -$ -$ -$ Other Production340Land & Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation341Structures and Improvements WP/B-1/3 1,093,703$ -$ 1,093,703$ 1,093,703$ 1,093,703$ -$ -$ Generation342Fuel Holder, Producer & Acc WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation343Prime Movers WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation344GeneratorsWP/B-1/3 8,391,980$ -$ 8,391,980$ 8,391,980$ 8,391,980$ -$ -$ Generation345Accessory Plant Equipment WP/B-1/3 182,970$ -$ 182,970$ 182,970$ 182,970$ -$ -$ Generation346Misc. Power Plant Equipment WP/B-1/3 13,009$ -$ 13,009$ 13,009$ 13,009$ -$ -$ GenerationTotal Other Production 9,681,661$ -$ 9,681,661$ 9,681,661$ 9,681,661$ -$ -$ Total Production Plant 21,167,210$ -$ 21,167,210$ 21,167,210$ 21,167,210$ -$ -$ Electric Transmission Plant350Land and Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission352Structures and Improvements WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission353Station Equipment WP/B-1/3 3,449,443$ -$ 3,449,443$ 3,449,443$ -$ 3,449,443$ -$ Transmission354Towers and Fixtures WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission 41 86 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 780 Schedule B-5: Accumulated DepreciationTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) 355 Poles and Fixtures WP/B-1/3 897,004$ -$ 897,004$ 897,004$ -$ 897,004$ -$ Transmission356O.H. Conductors & Devices WP/B-1/3 1,819,106$ -$ 1,819,106$ 1,819,106$ -$ 1,819,106$ -$ Transmission357Underground Conduit WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission358Underground Conductors WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission359Roads and Trails WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ TransmissionTotal Electric Transmission Plant 6,165,552$ -$ 6,165,552$ 6,165,552$ -$ 6,165,552$ -$ Electric Distribution Plant360Land and Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Distribution361Structures and Improvements WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Distribution362Station Equipment WP/B-1/3 3,394,237$ -$ 3,394,237$ 3,394,237$ -$ -$ 3,394,237$ Distribution363Storage Battery Equipment WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Distribution364Poles, Towers & Fixtures WP/B-1/3 2,153,184$ -$ 2,153,184$ 2,153,184$ -$ -$ 2,153,184$ Distribution365O.H. Conductors & Devices WP/B-1/3 1,896,458$ -$ 1,896,458$ 1,896,458$ -$ -$ 1,896,458$ Distribution366Underground Conduits WP/B-1/3 958,801$ -$ 958,801$ 958,801$ -$ -$ 958,801$ Distribution367U.G. Conductors & Devices WP/B-1/3 1,626,696$ -$ 1,626,696$ 1,626,696$ -$ -$ 1,626,696$ Distribution368Line Transformers WP/B-1/3 2,158,425$ -$ 2,158,425$ 2,158,425$ -$ -$ 2,158,425$ Distribution369ServicesWP/B-1/3 301,825$ -$ 301,825$ 301,825$ -$ -$ 301,825$ Distribution370MetersWP/B-1/3 834,950$ -$ 834,950$ 834,950$ -$ -$ 834,950$ Distribution371Install. on Customer Prem.WP/B-1/3 49,093$ -$ 49,093$ 49,093$ -$ -$ 49,093$ Distribution372Leased Prop. on Cust. Premises WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Distribution373Street Lights WP/B-1/3 38,806$ -$ 38,806$ 38,806$ -$ -$ 38,806$ DistributionTotal Electric Distribution Plant 13,412,474$ -$ 13,412,474$ 13,412,474$ -$ -$ 13,412,474$ Electric General Plant389Land and Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ NA390Structures and Improvements WP/B-1/3 2,765,127$ -$ 2,765,127$ 2,765,127$ 895,518$ 400,335$ 1,469,273$ PAYXAG391Office Furniture & Equip.WP/B-1/3 512,679$ -$ 512,679$ 512,679$ 166,037$ 74,226$ 272,416$ PAYXAG392Transportation Equipment WP/B-1/3 1,847,859$ -$ 1,847,859$ 1,847,859$ 68,775$ 214,855$ 1,564,229$ TRANSPPLT-G393Stores Equipment WP/B-1/3 67,098$ -$ 67,098$ 67,098$ 14,329$ 3,825$ 48,944$ INV394Tools, Shop & Garage Equip.WP/B-1/3 13,103$ -$ 13,103$ 13,103$ 7,787$ 1,429$ 3,886$ PLTXGNL-N395Laboratory Equipment WP/B-1/3 293,351$ -$ 293,351$ 293,351$ 174,345$ 32,002$ 87,005$ PLTXGNL-N396Power Operated Equipment WP/B-1/3 215,642$ -$ 215,642$ 215,642$ 128,160$ 23,524$ 63,957$ PLTXGNL-N397Communication Equipment WP/B-1/3 47,809$ -$ 47,809$ 47,809$ 28,414$ 5,215$ 14,180$ PLTXGNL-N398Misc. Equipment WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ NATotal Electric General Plant 5,762,667$ -$ 5,762,667$ 5,762,667$ 1,483,366$ 755,411$ 3,523,890$ Total Electric Accumulated Depreciation 46,507,904$ -$ 46,507,904$ 46,507,904$ 22,650,576$ 6,920,964$ 16,936,364$ 42 87 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 781 Schedule B-6: Plant Held for Future UseTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019 Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Plant Held For Future UseNANone WP/B-1/1 -$ -$ -$ -$ -$ -$ -$ NATotal Plant Held for Future Use -$ -$ -$ -$ -$ -$ -$ 43 88 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 782 Schedule B-7: Accumulated Provision BalanceTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Accumulated Provision BalanceNANone WP/B-1/1 -$ -$ -$ -$ -$ -$ -$ NATotal Accumulated Provision Balance -$ -$ -$ -$ -$ -$ -$ 44 89 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 783 Schedule B-8: Materials and SuppliesTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method (1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Materials and Supplies 910-9-000000-15900-1540 Materials and Supplies WP/B-1/2 2,987,660$ -$ 2,987,660$ 2,987,660$ 638,029$ 170,317$ 2,179,314$ INVTotal Materials and Supplies 2,987,660$ -$ 2,987,660$ 2,987,660$ 638,029$ 170,317$ 2,179,314$ 45 90 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 784 Schedule B-9: Cash Working CapitalTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019 Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to No.Schedule Electric Transfers Texas Generation Transmission Distribution(1)(2)(3)(4)(5)(6)(7)(8)(9)(10) Cash Working CapitalNAOperations & Maintenance Schedule D-1 & D-2 42,130,549$ -$ 42,130,549$ 42,130,549$ 30,974,683$ 1,812,764$ 9,343,101$ NA PILOT, Payroll, Transfers E-2 4,172,241$ -$ 4,172,241$ 4,172,241$ 2,405,330$ 373,913$ 1,392,998$ Total O&M 46,302,790$ -$ 46,302,790$ 46,302,790$ 33,380,013$ 2,186,677$ 10,736,099$ Total Cash Working Capital 5,708,563$ -$ 5,708,563$ 5,708,563$ 4,115,344$ 269,590$ 1,323,629$ 46 91 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 785 Schedule B-10: PrepaymentsTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Prepayments910-9-000000-13297-1657 ERCOT CRR PREPAYMENTS WP/B-1/2 (2,616)$ -$ (2,616)$ (2,616)$ (2,616)$ -$ -$ Generation910-9-000000-13299-1655 ERCOT COLLATERAL WP/B-1/2 111,550$ -$ 111,550$ 111,550$ 111,550$ -$ -$ GenerationTotal Prepayments 108,934$ -$ 108,934$ 108,934$ 108,934$ -$ -$ 47 92 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 786 Schedule B-11: Other Rate Base ItemsTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method (1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Other Rate Base Items 910-9-000000-24000-2350 Customer Deposits WP/B-1/2 2,351,254$ -$ 2,351,254$ 2,351,254$ -$ -$ 2,351,254$ DistributionTotal Other Rate Base Items 2,351,254$ -$ 2,351,254$ 2,351,254$ -$ -$ 2,351,254$ 48 93 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 787 Schedule B-12: Regulatory AssetsTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method (1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Regulatory AssetsNA NA WP/B-1/1 -$ -$ -$ -$ -$ -$ -$ NATotal Regulatory Assets -$ -$ -$ -$ -$ -$ -$ 49 94 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 788 Schedule C-2: Debt Service Coverage MethodTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Description 2019 Adjustment 2020 ReferenceDebt Service Schedule(1)(2)(3)(4)(5) Rate of ReturnDebt Service2008 Interest Payment 499,483$ (499,483)$ -$ WP/C-2/12008 Principal Payment 515,000$ (515,000)$ -$ WP/C-2/12010 Interest Payment 1,959,172$ (1,959,172)$ -$ WP/C-2/12010 Principal Payment 1,745,000$ (1,745,000)$ -$ WP/C-2/12019AB Interest Payment 599,329$ 1,697,580$ 2,296,909$ WP/C-2/12019AB Principal Payment 3,200,000$ 2,235,000$ 5,435,000$ WP/C-2/1Debt Service Requirement 8,517,984$ (786,075)$ 7,731,909$ Debt Service CoverageDebt Covenant 1.25Additional Coverage 0.251.50 Debt Service with Coverage 11,597,864$ DeductionsDepreciation & Amortization 2,234,917$ Interest Income 438,405$ Total Deductions 2,673,322$ Return 8,924,541$ Rate Base 68,027,386$ Rate of Return 13.1% Required Financial Ratios Revenue per kWh RevenuesOperating Revenues 48,537,707$ Schedule AInterest and Other Income 16,653,478$ Schedule E-5Total Revenues 65,191,185$ ExpensesOperating Expenses 46,302,790$ Depreciation & Amortization 2,234,917$ Interest Expense 1,697,580$ Total Expenses 50,235,288$ Net Income (Loss)14,955,898$ Net Income per Revenue Dollar 0.2294$ 50 95 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 789 WP/C-2/1: Long Term Debt Service ScheduleTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Copeland Payment Fiscal Year 2008 2008 2008 2010 2010 2010 2019A 2019A 2019A 2019B 2019B 2019B Total Total TotalDateEndedPrincipalInterestDebtPrincipalInterestDebtPrincipalInterestDebtPrincipalInterestDebtPrincipalInterestDebtPaymentPaymentServicePaymentPaymentServicePaymentPaymentServicePaymentPaymentServicePaymentPaymentService(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11)(12)(13)(14)(15)(16)(17) 02/15/2019 2019 515,000$ 499,483$ 1,014,483$ 1,745,000$ 1,959,172$ 3,704,172$ -$ -$ -$ -$ -$ -$ 2,260,000$ 2,458,655$ 4,718,655$ 05/16/2019 2019 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 08/15/2019 2019 -$ -$ -$ -$ -$ -$ -$ 514,346$ 514,346$ 3,200,000$ 84,983$ 3,284,983$ 3,200,000$ 599,329$ 3,799,329$ 09/30/2019 2019 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2020 2020 -$ -$ -$ -$ -$ -$ 1,935,000$ 1,040,250$ 2,975,250$ -$ 132,392$ 132,392$ 1,935,000$ 1,172,642$ 3,107,642$ 08/15/2020 2020 -$ -$ -$ -$ -$ -$ -$ 991,875$ 991,875$ 3,500,000$ 132,392$ 3,632,392$ 3,500,000$ 1,124,267$ 4,624,267$ 09/30/2020 2020 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2021 2021 -$ -$ -$ -$ -$ -$ 2,045,000$ 991,875$ 3,036,875$ -$ 79,750$ 79,750$ 2,045,000$ 1,071,625$ 3,116,625$ 08/15/2021 2021 -$ -$ -$ -$ -$ -$ -$ 940,750$ 940,750$ 3,525,000$ 79,750$ 3,604,750$ 3,525,000$ 1,020,500$ 4,545,500$ 09/30/2021 2021 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2022 2022 -$ -$ -$ -$ -$ -$ 2,140,000$ 940,750$ 3,080,750$ -$ 31,281$ 31,281$ 2,140,000$ 972,031$ 3,112,031$ 08/15/2022 2022 -$ -$ -$ -$ -$ -$ -$ 887,250$ 887,250$ 2,275,000$ 31,281$ 2,306,281$ 2,275,000$ 918,531$ 3,193,531$ 09/30/2022 2022 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2023 2023 -$ -$ -$ -$ -$ -$ 2,250,000$ 887,250$ 3,137,250$ -$ -$ -$ 2,250,000$ 887,250$ 3,137,250$ 08/15/2023 2023 -$ -$ -$ -$ -$ -$ -$ 831,000$ 831,000$ -$ -$ -$ -$ 831,000$ 831,000$ 09/30/2023 2023 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2024 2024 -$ -$ -$ -$ -$ -$ 2,370,000$ 831,000$ 3,201,000$ -$ -$ -$ 2,370,000$ 831,000$ 3,201,000$ 08/15/2024 2024 -$ -$ -$ -$ -$ -$ 8,800,000$ 771,750$ 9,571,750$ -$ -$ -$ 8,800,000$ 771,750$ 9,571,750$ 09/30/2024 2024 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2025 2025 -$ -$ -$ -$ -$ -$ 2,490,000$ 551,750$ 3,041,750$ -$ -$ -$ 2,490,000$ 551,750$ 3,041,750$ 08/15/2025 2025 -$ -$ -$ -$ -$ -$ 4,000,000$ 489,500$ 4,489,500$ -$ -$ -$ 4,000,000$ 489,500$ 4,489,500$ 09/30/2025 2025 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2026 2026 -$ -$ -$ -$ -$ -$ 2,615,000$ 389,500$ 3,004,500$ -$ -$ -$ 2,615,000$ 389,500$ 3,004,500$ 08/15/2026 2026 -$ -$ -$ -$ -$ -$ 4,000,000$ 324,125$ 4,324,125$ -$ -$ -$ 4,000,000$ 324,125$ 4,324,125$ 09/30/2026 2026 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2027 2027 -$ -$ -$ -$ -$ -$ 2,750,000$ 224,125$ 2,974,125$ -$ -$ -$ 2,750,000$ 224,125$ 2,974,125$ 08/15/2027 2027 -$ -$ -$ -$ -$ -$ 4,000,000$ 155,375$ 4,155,375$ -$ -$ -$ 4,000,000$ 155,375$ 4,155,375$ 09/30/2027 2027 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2028 2028 -$ -$ -$ -$ -$ -$ 2,215,000$ 55,375$ 2,270,375$ -$ -$ -$ 2,215,000$ 55,375$ 2,270,375$ 08/15/2028 2028 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 09/30/2028 2028 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2029 2029 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 08/15/2029 2029 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 09/30/2029 2029 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2030 2030 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 08/15/2030 2030 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 09/30/2030 2030 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2031 2031 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 08/15/2031 2031 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 09/30/2031 2031 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2032 2032 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 08/15/2032 2032 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 09/30/2032 2032 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2033 2033 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 08/15/2033 2033 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 09/30/2033 2033 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2034 2034 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 51 96 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 790 WP/C-2/1: Long Term Debt Service ScheduleTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Copeland Payment Fiscal Year 2008 2008 2008 2010 2010 2010 2019A 2019A 2019A 2019B 2019B 2019B Total Total TotalDateEndedPrincipalInterestDebtPrincipalInterestDebtPrincipalInterestDebtPrincipalInterestDebtPrincipalInterestDebtPaymentPaymentServicePaymentPaymentServicePaymentPaymentServicePaymentPaymentServicePaymentPaymentService(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11)(12)(13)(14)(15)(16)(17) 08/15/2034 2034 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 09/30/2034 2034 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 02/15/2035 2035 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 09/30/2035 2035 -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 515,000$ 499,483$ 1,014,483$ 1,745,000$ 1,959,172$ 3,704,172$ 41,610,000$ 11,817,846$ 53,427,846$ 12,500,000$ 571,830$ 13,071,830$ 56,370,000$ 14,848,330$ 71,218,330$ 52 97 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 791 WP/C-2/2: 2019A Revenue Refunding Bonds Official StatementTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach See Attached Workpaper 53 98 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 792 WP/C-2/3: 2019B Revenue Refunding Bonds Official StatementTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach See Attached Workpaper 54 99 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 793 Schedule D-1: Operation and Maintenance ExpensesTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Operation and Maintenance Expenses Power Production ExpensesSteam Power GenerationOperation500Operation Super. & Eng.WP/B-1/2 Generation501Eligible Fuel WP/B-1/2 GenerationNon Eligible Fuel WP/B-1/2 Generation502Steam Expenses WP/B-1/2 Generation503Lake & Pumping Equipment WP/B-1/2 Generation505Electric Expenses WP/B-1/2 Generation506Misc. Steam power Expenses WP/B-1/2 Generation507RentsWP/B-1/2 Generation508Operation Supplies & Expenses GenerationSubtotal Maintenance510Maint. Super. & Eng.WP/B-1/2 Generation511Maint. of Structures WP/B-1/2 Generation512Maint. of Boiler Plant WP/B-1/2 Generation513Maint. of Electric Plant WP/B-1/2 Generation514Maint. of Misc. Steam Plant WP/B-1/2 Generation515Maint. Of Steam Prod Plant WP/B-1/2 GenerationSubtotal Nuclear Power GenerationOperation517Operation Supervision WP/B-1/2 Generation518Nuclear Fuel-Direct WP/B-1/2 Generation519Coolants and Water WP/B-1/2 Generation520Steam Expenses WP/B-1/2 Generation523Electric expenses WP/B-1/2 Generation524Misc. Nuclear Power Expenses WP/B-1/2 Generation525Rents-Allocable WP/B-1/2 GenerationSubtotal Maintenance528Maint. Supervision WP/B-1/2 Generation529Maint. of Structures WP/B-1/2 Generation530Maint. of Reactor Plant WP/B-1/2 Generation531Maint. of Electric Plant WP/B-1/2 Generation532Maint. of Misc. Nuclear Plant WP/B-1/2 GenerationSubtotal Hydraulic Generation 55 100 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 794 Schedule D-1: Operation and Maintenance ExpensesTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Operation535Operation Supervision WP/B-1/2 Generation536Water for Power WP/B-1/2 Generation537Hydraulic Expenses WP/B-1/2 Generation538Electric Expenses WP/B-1/2 Generation539Misc.Hydralic Gen. Exp.WP/B-1/2 Generation540RentsWP/B-1/2 GenerationSubtotal Maintenance541Maint. Supervision WP/B-1/2 Generation542Maint. of Structures WP/B-1/2 Generation543Maint. of Reservoirs, Dams, & Waterways WP/B-1/2 Generation544Maint. of Electric Plant WP/B-1/2 Generation545Maint. of Misc.Hydralic Gen. Exp.WP/B-1/2 GenerationSubtotal Other Power GenerationOperation546Operation Super. & Engin.WP/B-1/2 Generation547FuelWP/B-1/2 Generation548Generation Expenses (Major Only)WP/B-1/2 Generation549Misc. Other Power Generation WP/B-1/2 Generation550RentsWP/B-1/2 GenerationSubtotal Maintenance551Maintenance Super. & Engin.WP/B-1/2 Generation552Maintenance of Structures WP/B-1/2 Generation553Maint. Gener. & Elect. Plt.WP/B-1/2 Generation554Maint. Misc. Other power WP/B-1/2 GenerationSubtotal Other Power Supply555Purchased Power WP/B-1/2 Generation556System Control & Load Dispatch WP/B-1/2 Generation557OtherWP/B-1/2 GenerationSubtotal Total Power Production Expense Transmission ExpenseOperation560Operation Super. & Engin.WP/B-1/2; WP/D-1/1 Transmission561Load Dispatching WP/B-1/2 Transmission 56 101 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 795 Schedule D-1: Operation and Maintenance ExpensesTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) 562 Station Equipment WP/B-1/2 Transmission563Overhead Line Expense WP/B-1/2 Transmission564Underground Line Expense WP/B-1/2 Transmission565Wheeling Expense WP/B-1/2 Distribution566Misc. Transmission Expense WP/B-1/2; WP/D-1/1 Transmission567Operation Supplies & Expenses WP/B-1/2 TransmissionSubtotal Maintenance568Maintenance Super. & Engin.WP/B-1/2 Transmission569Maint. of Structures WP/B-1/2 Transmission570Maint. of Station Equipment WP/B-1/2 Transmission571Maint. of Overhead Lines WP/B-1/2 Transmission572Maint. of Underground Lines WP/B-1/2 Transmission573Maint. of Misc. Trans.Plant WP/B-1/2 Transmission574Maint. Of Trans. Plant WP/B-1/2 TransmissionSubtotal Total Transmission Expenses DistributionOperation580Operation Super. & Engin.WP/B-1/2; WP/D-1/1 Distribution581Load Dispatching WP/B-1/2 Distribution582Station Expense WP/B-1/2 Distribution583Overhead Line Expense WP/B-1/2 Distribution584Underground Line Expense WP/B-1/2 Distribution585Street Light & Signal Systems WP/B-1/2 Distribution586Meter Expenses WP/B-1/2 Distribution587Customer Installation Expense WP/B-1/2 Distribution588Misc. Distribution Expenses WP/B-1/2; WP/D-1/1 Distribution589RentsWP/B-1/2 DistributionSubtotal Maintenance590Maintenance Super.& Engin.WP/B-1/2 Distribution591Maint. of Structures WP/B-1/2 Distribution592Maint. of Station Equipment WP/B-1/2 Distribution593Maint. of Overhead Lines WP/B-1/2 Distribution594Maint. of Underground Lines WP/B-1/2 Distribution595Maint. of Line Transformers WP/B-1/2 Distribution596Maint. of Street Lights WP/B-1/2 Distribution597Maint. of Meters WP/B-1/2 Distribution598Maint. of Misc. Dist. Plant.WP/B-1/2 DistributionSubtotal 57 102 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 796 Schedule D-1: Operation and Maintenance ExpensesTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Total Distribution Expenses Total Prod., Trans., & Dist. Expenses Customer and Information Expenses Customer Accounts Expenses901Supervision WP/B-1/2 Distribution902Meter Reading Expense WP/B-1/2 Distribution903Customer Records & Collect.WP/B-1/2 Distribution904Uncollectible Accounts WP/B-1/2 Distribution905Misc. Customer Account Exp.WP/B-1/2 DistributionSubtotal Cust. Service & Information Expense906Customer Svc. & Infor.WP/B-1/2 Distribution907SupervisionWP/B-1/2 Distribution908Customer Assistance WP/B-1/2 Distribution909Inform. & Instruct. Adv. Exp.WP/B-1/2 Distribution910Misc. Cust. Service & Inform.WP/B-1/2 DistributionSubtotal Sales Expense911Supervision WP/B-1/2 Distribution912Demonstrating & Selling Exp.WP/B-1/2 Distribution913Advertising Exp.WP/B-1/2 Distribution916Misc. Sales Exp.WP/B-1/2 Distribution917Sales Expense WP/B-1/2 DistributionSubtotal Total Cust. Serv., Inform. & Sale Exp. Total Operations and Maintenance Expenses 39,288,401$ -$ 39,288,401$ 39,288,401$ 30,129,639$ 1,461,052$ 7,697,710$ 58 103 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 797 WP/D-1/1: GEUS Engineering Expense AdjustmentTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Copeland Description Reference FERC Total Allocation to Allocation to Allocation to Allocation Schedule Account No Electric Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8) Engineering Costs Distribution Operation Super. & Engin. Total WP/B-1/2 580 904,494$ -$ 263,310$ 641,184$ TDPLTXGNL-GMisc. Distribution Expenses Total WP/B-1/2 588 124,292$ -$ 36,183$ 88,109$ TDPLTXGNL-G AdjustmentDistributionOperation Super. & Engin.580 (263,310)$ Misc. Distribution Expenses 588 (36,183)$ Transmission Operation Super. & Engin.560 -$ 263,310$ Misc. Transmission Expense 566 -$ 36,183$ Total Engineering Adjustment -$ 299,493$ (299,493)$ 59 104 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 798 Schedule D-2: Administrative and General ExpensesTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method (1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Administrative & General Expenses920Admin. & General Salaries WP/B-1/2 1,457,440$ -$ 1,457,440$ 1,457,440$ 472,009$ 211,008$ 774,423$ PAYXAG921Office Supplies WP/B-1/2 332,479$ -$ 332,479$ 332,479$ 107,677$ 48,136$ 176,665$ PAYXAG 922 Admin. Exp. Transferred WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA923Outside Services WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA924Property Insurance Exp.WP/B-1/2 187,761$ -$ 187,761$ 187,761$ 105,671$ 20,594$ 61,496$ PLTSVC-N925Injuries & Damages WP/B-1/2 80,168$ -$ 80,168$ 80,168$ 25,963$ 11,607$ 42,598$ PAYXAG926Pensions & Benefits WP/B-1/2 161,168$ -$ 161,168$ 161,168$ 52,196$ 23,334$ 85,638$ PAYXAG 927 Franchise Requirements WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA928Regulatory Commission WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA929Duplicate Charges WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA930Miscellaneous General Expense WP/B-1/2 109,003$ -$ 109,003$ 109,003$ 35,302$ 15,781$ 57,920$ PAYXAG930.1 General Advertising Expense WP/B-1/2 348,603$ -$ 348,603$ 348,603$ -$ -$ 348,603$ DISTRIBUTION 930.2 Miscellaneous General Expense WP/B-1/2 72,388$ -$ 72,388$ 72,388$ 23,444$ 10,480$ 38,464$ PAYXAG931RentsWP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA933Transportation Expense WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA935Maint. of General Plant WP/B-1/2 93,138$ -$ 93,138$ 93,138$ 22,782$ 10,771$ 59,585$ GNLPLT-NTotal Admin. & General Expense 2,842,148$ -$ 2,842,148$ 2,842,148$ 845,044$ 351,712$ 1,645,391$ 60 105 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 799 Schedule D-3: Payroll ExpensesTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Payroll Expenses Power Production Payroll ExpensesSteam Power GenerationOperation500Operation Super. & Eng.WP/B-4/2 671,569$ -$ 671,569$ 671,569$ 671,569$ -$ -$ Generation501Eligible Fuel WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation501Non Eligible Fuel WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation502Steam Expenses WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation 503 Lake & Pumping Equipment WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation505Electric Expenses WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation506Misc. Steam power Expenses WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation507RentsWP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation508Operation Supplies & Expenses WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ GenerationSubtotal671,569$ -$ 671,569$ 671,569$ 671,569$ -$ -$ Maintenance510Maint. Super. & Eng.WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation511Maint. of Structures WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation512Maint. of Boiler Plant WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation513Maint. of Electric Plant WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation514Maint. of Misc. Steam Plant WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation515Maint. Of Steam Plant 436,578$ -$ 436,578$ 436,578$ 436,578$ -$ -$ GenerationSubtotal436,578$ -$ 436,578$ 436,578$ 436,578$ -$ -$ Nuclear Power GenerationOperation517Operation Supervision WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation 518 Nuclear Fuel-Direct WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation519Coolants and Water WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation520Steam Expenses WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation523Electric expenses WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation524Misc. Nuclear Power Expenses WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation525Rents-Allocable WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation Subtotal -$ -$ -$ -$ -$ -$ -$ Maintenance528Maint. Supervision WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation529Maint. of Structures WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation530Maint. of Reactor Plant WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation 61 106 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 800 Schedule D-3: Payroll ExpensesTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) 531 Maint. of Electric Plant WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ Generation532Maint. of Misc. Nuclear Plant WP/B-4/2 -$ -$ -$ -$ -$ -$ -$ GenerationSubtotal-$ -$ -$ -$ -$ -$ -$ Hydraulic GenerationOperation535Operation Supervision WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation536Water for Power WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation537Hydraulic Expenses WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation538Electric Expenses WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation 539 Misc.Hydralic Gen. Exp.WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation540RentsWP/B-1/2 -$ -$ -$ -$ -$ -$ -$ GenerationSubtotal-$ -$ -$ -$ -$ -$ -$ Maintenance541Maint. Supervision WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation542Maint. of Structures WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation543Maint. of Reservoirs, Dams, & Waterway WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation544Maint. of Electric Plant WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation545Maint. of Misc.Hydralic Gen. Exp.WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ GenerationSubtotal-$ -$ -$ -$ -$ -$ -$ Other Power GenerationOperation546Operation Super. & Engin.WP/B-1/2 659,968$ -$ 659,968$ 659,968$ 659,968$ -$ -$ Generation547FuelWP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation548Generation Expenses (Major Only)WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation549Misc. Other Power Generation WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation550RentsWP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation Subtotal 659,968$ -$ 659,968$ 659,968$ 659,968$ -$ -$ Maintenance551Maintenance Super. & Engin.WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation552Maintenance of Structures WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation553Maint. Gener. & Elect. Plt.WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation 554 Maint. Misc. Other power WP/B-1/2 429,084$ -$ 429,084$ 429,084$ 429,084$ -$ -$ GenerationSubtotal429,084$ -$ 429,084$ 429,084$ 429,084$ -$ -$ Other Power Supply555Purchased Power WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation556System Control & Load Dispatch WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Generation 62 107 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 801 Schedule D-3: Payroll ExpensesTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) 575 Other WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ GenerationSubtotal-$ -$ -$ -$ -$ -$ -$ Total Power Production Payroll Expense 2,197,199$ -$ 2,197,199$ 2,197,199$ 2,197,199$ -$ -$ Transmission Payroll ExpenseOperation560Operation Super. & Engin.WP/B-1/2; WP/D-3/1 -$ 234,649$ 234,649$ 234,649$ -$ 234,649$ -$ Transmission561Load Dispatching WP/B-1/2 353,845$ -$ 353,845$ 353,845$ -$ 353,845$ -$ Transmission562Station Equipment WP/B-1/2 84,312$ -$ 84,312$ 84,312$ -$ 84,312$ -$ Transmission 563 Overhead Line Expense WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Transmission564Underground Line Expense WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Transmission565Wheeling Expense WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution566Misc. Transmission Expense WP/B-1/2; WP/D-3/1 -$ 33,782$ 33,782$ 33,782$ -$ 33,782$ -$ Transmission567.0 Operation Supplies & Expenses WP/B-1/2 111,392$ -$ 111,392$ 111,392$ -$ 111,392$ -$ TransmissionSubtotal549,549$ 268,432$ 817,981$ 817,981$ -$ 817,981$ -$ Maintenance568Maintenance Super. & Engin.WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Transmission569Maint. of Structures WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Transmission570Maint. of Station Equipment WP/B-1/2 104,789$ -$ 104,789$ 104,789$ -$ 104,789$ -$ Transmission571Maint. of Overhead Lines WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Transmission572Maint. of Underground Lines WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Transmission573Maint. of Misc. Trans.Plant WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Transmission574Maint. Of Trans. Plant WP/B-1/2 59,473$ -$ 59,473$ 59,473$ -$ 59,473$ -$ TransmissionSubtotal164,262$ -$ 164,262$ 164,262$ -$ 164,262$ -$ Total Transmission Payroll Expenses 713,811$ 268,432$ 982,243$ 982,243$ -$ 982,243$ -$ Distribution Payroll ExpenseOperation580Operation Super. & Engin.WP/B-1/2; WP/D-3/1 806,043$ (234,649)$ 571,394$ 571,394$ -$ -$ 571,394$ Distribution581Load Dispatching WP/B-1/2 222,245$ -$ 222,245$ 222,245$ -$ -$ 222,245$ Distribution582Station Expense WP/B-1/2 84,086$ -$ 84,086$ 84,086$ -$ -$ 84,086$ Distribution583Overhead Line Expense WP/B-1/2 147,905$ -$ 147,905$ 147,905$ -$ -$ 147,905$ Distribution 584 Underground Line Expense WP/B-1/2 146,411$ -$ 146,411$ 146,411$ -$ -$ 146,411$ Distribution585Street Light & Signal Systems WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution586Meter Expenses WP/B-1/2 110,627$ -$ 110,627$ 110,627$ -$ -$ 110,627$ Distribution587Customer Installation Expense WP/B-1/2 449$ -$ 449$ 449$ -$ -$ 449$ Distribution588Misc. Distribution Expenses WP/B-1/2; WP/D-3/1 116,045$ (33,782)$ 82,263$ 82,263$ -$ -$ 82,263$ Distribution589RentsWP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution 63 108 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 802 Schedule D-3: Payroll ExpensesTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Subtotal 1,633,811$ (268,432)$ 1,365,379$ 1,365,379$ -$ -$ 1,365,379$ Maintenance590Maintenance Super.& Engin.WP/B-1/2 90,517$ -$ 90,517$ 90,517$ -$ -$ 90,517$ Distribution 591 Maint. of Structures WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution592Maint. of Station Equipment WP/B-1/2 105,296$ -$ 105,296$ 105,296$ -$ -$ 105,296$ Distribution593Maint. of Overhead Lines WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution594Maint. of Underground Lines WP/B-1/2 652,676$ -$ 652,676$ 652,676$ -$ -$ 652,676$ Distribution595Maint. of Line Transformers WP/B-1/2 12,605$ -$ 12,605$ 12,605$ -$ -$ 12,605$ Distribution596Maint. of Street Lights WP/B-1/2 11,904$ -$ 11,904$ 11,904$ -$ -$ 11,904$ Distribution 597 Maint. of Meters WP/B-1/2 51,734$ -$ 51,734$ 51,734$ -$ -$ 51,734$ Distribution598Maint. of Misc. Dist. Plant.WP/B-1/2 3,558$ -$ 3,558$ 3,558$ -$ -$ 3,558$ DistributionSubtotal928,290$ -$ 928,290$ 928,290$ -$ -$ 928,290$ Total Distribution Expenses 2,562,101$ (268,432)$ 2,293,669$ 2,293,669$ -$ -$ 2,293,669$ Total Prod., Trans., & Dist. Expenses 5,473,111$ -$ 5,473,111$ 5,473,111$ 2,197,199$ 982,243$ 2,293,669$ Customer and Information Payroll Expenses Customer Accounts Expenses901Supervision WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution902Meter Reading Expense WP/B-1/2 439,998$ -$ 439,998$ 439,998$ -$ -$ 439,998$ Distribution903Customer Records & Collect.WP/B-1/2 424,727$ -$ 424,727$ 424,727$ -$ -$ 424,727$ Distribution904Uncollectible Accounts WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution905Misc. Customer Account Exp.WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ DistributionSubtotal864,725$ -$ 864,725$ 864,725$ -$ -$ 864,725$ Cust. Service & Information Expense906Customer Svc. & Infor.WP/B-1/2 446,541$ -$ 446,541$ 446,541$ -$ -$ 446,541$ Distribution907SupervisionWP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution908Customer Assistance WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution909Inform. & Instruct. Adv. Exp.WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution910Misc. Cust. Service & Inform.WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution Subtotal 446,541$ -$ 446,541$ 446,541$ -$ -$ 446,541$ Sales Expense911Supervision WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution912Demonstrating & Selling Exp.WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution913Advertising Exp.WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution 64 109 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 803 Schedule D-3: Payroll ExpensesTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) 916 Misc. Sales Exp.WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ Distribution917Sales Expense WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ DistributionSubtotal-$ -$ -$ -$ -$ -$ -$ Total Cust. Serv., Inform. & Sale Payroll Exp.1,311,266$ -$ 1,311,266$ 1,311,266$ -$ -$ 1,311,266$ Total O&M Payroll Expense Before Admin. & General 6,784,377$ -$ 6,784,377$ 6,784,377$ 2,197,199$ 982,243$ 3,604,935$ Administrative & General Payroll Expenses920Admin. & General Salaries WP/B-1/2 988,439$ -$ 988,439$ 988,439$ 320,117$ 143,106$ 525,215$ PAYXAG 921 Office Supplies WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA922Admin. Exp. Transferred WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA923Outside Services WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA924Property Insurance Exp.WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA925Injuries & Damages WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA926Pensions & Benefits WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA 927 Franchise Requirements WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA928Regulatory Commission WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA929Duplicate Charges WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA930Miscellaneous General Expense WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA930.1 General Advertising Expense WP/B-1/2 268,237$ -$ 268,237$ 268,237$ -$ -$ 268,237$ DISTRIBUTION930.2 Miscellaneous General Expense WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA931RentsWP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA933Transportation Expense WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA935Maint. of General Plant WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NA Total Admin. & General Payroll Expense 1,256,676$ -$ 1,256,676$ 1,256,676$ 320,117$ 143,106$ 793,452$ Total O&M Payroll Expense 8,041,053$ -$ 8,041,053$ 8,041,053$ 2,517,316$ 1,125,349$ 4,398,388$ 65 110 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 804 WP/D-3/1: GEUS Engineering Labor Expense AdjustmentTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Copeland Description Reference FERC Total Allocation to Allocation to Allocation to Allocation Schedule Account No Electric Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8) Engineering LaborDistributionOperation Super. & Engin. Total WP/B-1/2 580 806,043$ -$ 234,649$ 571,394$ TDPLTXGNL-GMisc. Distribution Expenses Total WP/B-1/2 588 116,045$ -$ 33,782$ 82,263$ TDPLTXGNL-G AdjustmentDistributionOperation Super. & Engin.580 (234,649)$ Misc. Distribution Expenses 588 (33,782)$ TransmissionOperation Super. & Engin.560 -$ 234,649$ Misc. Transmission Expense 566 -$ 33,782$ Total Engineering Labor Adjustment -$ 268,432$ (268,432)$ 66 111 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 805 Schedule D-4 is not included in the TCOS Rate Filing Package InstructionsTransmission Cost of Service GEUSPeriod Ending September 30, 2019 67 112 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 806 Schedule D-5: Summary of Exclusions from Reporting PeriodTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Description FERC Account No.Reporting Period Amount(1)(2)(3) Legislative Advocacy:See Note (a)N/A -$ Total Legislative Advocacy -$ Penalties and Fines:See Note (a)N/A -$ Total Penalties and Fines -$ Other Exclusions:See Note (a)N/A -$ Total Other Exclusions -$ Social/Recreational/Religious:See Note (a)N/A -$ Total Social/Recreational/Religious -$ Political: See Note (a)N/A -$ Total Political -$ Total Exclusions -$ Note (a): Items within each category of exclusions shall be listed separately byFERC Account No. as recorded during the reporting period. 68 113 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 807 Schedule E-1: Depreciation and Amortization ExpenseTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Depreciation Steam Production310Land & Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation311Structures and Improvements WP/B-1/3 3,710$ -$ 3,710$ 3,710$ 3,710$ -$ -$ Generation312Boiler Plant Equipment WP/B-1/3 317,712$ -$ 317,712$ 317,712$ 317,712$ -$ -$ Generation313Engines/Engine Driven Gen.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation314Turbogenerator Units WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation315Accessory Electric Equip.WP/B-1/3 38,848$ -$ 38,848$ 38,848$ 38,848$ -$ -$ Generation 316 Misc. Power Plant Equip.WP/B-1/3 64,549$ -$ 64,549$ 64,549$ 64,549$ -$ -$ GenerationTotal Steam Production 424,818$ -$ 424,818$ 424,818$ 424,818$ -$ -$ Nuclear Production320Land & Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation321Structures and Improvements WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation 322 Reactor Plant Equipment WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation323Engines/Engine Driven Gen.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation324Turbogenerator Units WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation 325 Accessory Electric Equip.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation326Misc. Power Plant Equip.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ GenerationTotal Nuclear Production -$ -$ -$ -$ -$ -$ -$ Hydraulic Production330Land & Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation331Structures and Improvements WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation332Reservoirs, Dams, and Waterways WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation333Water Wheels, Turbines, and Generators WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation334Accessory Electric Equipment WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation335Miscellaneous Power Plant Equip.WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation336Roads, Railroads, and Bridges WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ GenerationTotal Hydraulic Production -$ -$ -$ -$ -$ -$ -$ Other Production340Land & Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation 341 Structures and Improvements WP/B-1/3 126,278$ -$ 126,278$ 126,278$ 126,278$ -$ -$ Generation342Fuel Holder, Producer & Acc WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation343Prime Movers WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Generation 69 114 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 808 Schedule E-1: Depreciation and Amortization ExpenseTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) 344 Generators WP/B-1/3 876,393$ -$ 876,393$ 876,393$ 876,393$ -$ -$ Generation345Accessory Plant Equipment WP/B-1/3 23,122$ -$ 23,122$ 23,122$ 23,122$ -$ -$ Generation346Misc. Power Plant Equipment WP/B-1/3 985$ -$ 985$ 985$ 985$ -$ -$ GenerationTotal Other Production 1,026,779$ -$ 1,026,779$ 1,026,779$ 1,026,779$ -$ -$ Subtotal Electric Production Plant 1,451,596$ -$ 1,451,596$ 1,451,596$ 1,451,596$ -$ -$ Electric Transmission Plant350Land and Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission 352 Structures and Improvements WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission353Station Equipment WP/B-1/3 & WP/E-1/1 137,497$ 11,397$ 148,895$ 148,895$ -$ 148,895$ -$ Transmission354Towers and Fixtures WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission 355 Poles and Fixtures WP/B-1/3 28,695$ -$ 28,695$ 28,695$ -$ 28,695$ -$ Transmission356O.H. Conductors & Devices WP/B-1/3 120,087$ -$ 120,087$ 120,087$ -$ 120,087$ -$ Transmission357Underground Conduit WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission 358 Underground Conductors WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Transmission359Roads and Trails WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ TransmissionSubtotal Electric Transmission Plant 286,280$ 11,397$ 297,677$ 297,677$ -$ 297,677$ -$ Electric Distribution Plant360Land and Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Distribution 361 Structures and Improvements WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Distribution362Station Equipment WP/B-1/3 & WP/E-1/1 159,265$ 45,989$ 205,254$ 205,254$ -$ -$ 205,254$ Distribution363Storage Battery Equipment WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Distribution364Poles, Towers & Fixtures WP/B-1/3 141,897$ -$ 141,897$ 141,897$ -$ -$ 141,897$ Distribution365O.H. Conductors & Devices WP/B-1/3 128,454$ -$ 128,454$ 128,454$ -$ -$ 128,454$ Distribution366Underground Conduits WP/B-1/3 81,428$ -$ 81,428$ 81,428$ -$ -$ 81,428$ Distribution367U.G. Conductors & Devices WP/B-1/3 143,653$ -$ 143,653$ 143,653$ -$ -$ 143,653$ Distribution368Line Transformers WP/B-1/3 198,950$ -$ 198,950$ 198,950$ -$ -$ 198,950$ Distribution369ServicesWP/B-1/3 26,776$ -$ 26,776$ 26,776$ -$ -$ 26,776$ Distribution370MetersWP/B-1/3 87,924$ -$ 87,924$ 87,924$ -$ -$ 87,924$ Distribution371Install. on Customer Prem.WP/B-1/3 4,188$ -$ 4,188$ 4,188$ -$ -$ 4,188$ Distribution372Leased Prop. on Cust. Premises WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ Distribution373Street Lights WP/B-1/3 4,643$ -$ 4,643$ 4,643$ -$ -$ 4,643$ Distribution Subtotal Electric Distribution Plant 977,179$ 45,989$ 1,023,167$ 1,023,167$ -$ -$ 1,023,167$ Electric General Plant 70 115 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 809 Schedule E-1: Depreciation and Amortization ExpenseTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) 389 Land and Land Rights WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ NA390Structures and Improvements WP/B-1/3 & WP/E-1/1 183,452$ 100$ 183,552$ 183,552$ 59,445$ 26,575$ 97,532$ PAYXAG391Office Furniture & Equip.WP/B-1/3 32,821$ -$ 32,821$ 32,821$ 10,630$ 4,752$ 17,440$ PAYXAG392Transportation Equipment WP/B-1/3 168,448$ -$ 168,448$ 168,448$ 3,970$ 16,368$ 148,111$ TRANSPPLT-G393Stores Equipment WP/B-1/3 3,185$ -$ 3,185$ 3,185$ 680$ 182$ 2,323$ INV394Tools, Shop & Garage Equip.WP/B-1/3 754$ -$ 754$ 754$ 448$ 82$ 223$ PLTXGNL-N395Laboratory Equipment WP/B-1/3 13,247$ -$ 13,247$ 13,247$ 7,873$ 1,445$ 3,929$ PLTXGNL-N396Power Operated Equipment WP/B-1/3 18,635$ -$ 18,635$ 18,635$ 11,075$ 2,033$ 5,527$ PLTXGNL-N397Communication Equipment WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ PLTXGNL-N 398 Misc. Equipment WP/B-1/3 -$ -$ -$ -$ -$ -$ -$ NASubtotal Electric General Plant 420,541$ 100$ 420,641$ 420,641$ 94,121$ 51,436$ 275,085$ Total Depreciation 3,135,596$ 57,486$ 3,193,082$ 3,193,082$ 1,545,717$ 349,113$ 1,298,252$ Amortization Amortization of Discount (Premium)WP/E-1/2 (65,388)$ (892,776)$ (958,164)$ (958,164)$ (539,251)$ (105,093)$ (313,820)$ PLTSVC-NTotal Amortization (65,388)$ (892,776)$ (958,164)$ (958,164)$ (539,251)$ (105,093)$ (313,820)$ Total Depreciation & Amortization 3,070,208$ (835,290)$ 2,234,917$ 2,234,917$ 1,006,466$ 244,020$ 984,432$ 71 116 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 810 WP/E-1/1: GEUS CWIP Adjustment to DepreciationTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Known Asset Life Annual No.Schedule Adjustments Years Depreciation(1)(2)(3)(4)(5)(6) Adjustment to Depreciation ExpenseTransmission353Station Equipment WP/B-4/1 376,115$ 33 11,397$ Distribution362 Station Equipment WP/B-4/1 1,517,621$ 33 45,989$ General Plant 390 Structures and Improvements WP/B-4/1 3,300$ 33 100$ 72 117 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 811 WP/E-1/2: GEUS AmortizationTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Copeland Series 2019AB Series 2019AB Prior Bonds TotalDescriptionPremiumDiscountAmortizationGEUS(1)(2)(3)(4)(5) Amortization2020 (936,240)$ 58,512$ (80,436)$ (958,164)$ 2019 2020DescriptionAmortizationAdjustmentAmortization(6)(7)(8)(8) Amortization Adjustment (65,388)$ (892,776)$ (958,164)$ 73 118 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 812 Schedule E-2: Taxes Other Than Income TaxTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Taxes Other Than Income Property Tax NA Payment in Lieu of Taxes WP/B-1/2 326,809$ -$ 326,809$ 326,809$ 183,927$ 35,845$ 107,037$ PLTSVC-N Transfers to the CityNAGeneral Fund Transfer Fee (5%)WP/B-1/2 2,757,060$ -$ 2,757,060$ 2,757,060$ 1,687,994$ 221,030$ 848,036$ REV REQNABoard of Development Transfer Fee (1%)WP/B-1/2 627,387$ -$ 627,387$ 627,387$ 384,114$ 50,297$ 192,976$ REV REQ NA Payroll Taxes (1)NA F.I.C.A.WP/B-1/2 379,194$ -$ 379,194$ 379,194$ 122,806$ 54,900$ 201,488$ PAYXAG NA Unemployment WP/B-1/2 (7,524)$ -$ (7,524)$ (7,524)$ (2,437)$ (1,089)$ (3,998)$ PAYXAGNAMedicareWP/B-1/2 89,315$ -$ 89,315$ 89,315$ 28,926$ 12,931$ 47,458$ PAYXAG Total Taxes Other Than Income Tax 4,172,241$ -$ 4,172,241$ 4,172,241$ 2,405,330$ 373,913$ 1,392,998$ (1) Payroll Taxes do not include labor tax that was capitalized 74 119 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 813 Schedule E-3: Federal Income Taxes Transmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method (1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Federal Income Taxes NA None N/A -$ -$ -$ -$ -$ -$ -$ NATotal Federal Income Taxes -$ -$ -$ -$ -$ -$ -$ 75 120 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 814 Schedule E-4: Other ExpensesTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Other ExpensesNone WP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NATotal Other Expenses -$ -$ -$ -$ -$ -$ -$ 76 121 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 815 Schedule E-5: Other Revenue Items (Credit)Transmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Other Revenues Off System Sales WP/B-1/2 GenerationWP/B-1/2 GenerationWP/B-1/2 GenerationWP/B-1/2 GenerationWP/B-1/2 GenerationTCOS Revenues WP/B-1/2 DistributionOther Billed Sales WP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionReimbursementsWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionOtherWP/B-1/2 DistributionWP/B-1/2 GenerationWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionWP/B-1/2 DistributionTotal Other Revenue Items, not Including Interest Income 16,215,073$ -$ 16,215,073$ 16,215,073$ 13,970,011$ -$ 2,245,062$ Interest Income WP/B-1/2 TOMWP/B-1/2 GENWP/B-1/2 NAWP/B-1/2 PLTSVC-NTotal Interest Income 438,405$ -$ 438,405$ 438,405$ 316,484$ 20,705$ 101,216$ 77 122 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 816 Schedule E-6: Wheeling Revenue under Existing ContractsTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Acct.Description Reference Total Adjustments/Total Allocation to Allocation to Allocation to Allocation to Allocation No.Schedule Electric Transfers Texas Generation Transmission Distribution Method(1)(2)(3)(4)(5)(6)(7)(8)(9)(10)(11) Wheeling Revenue Under Existing ContractsNANoneWP/B-1/2 -$ -$ -$ -$ -$ -$ -$ NATotal Wheeling Revenue Under Existing Contracts -$ -$ -$ -$ -$ -$ -$ 78 123 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 817 Schedule F-1: Total Payroll Excluding A&G and Contract Labor (PAYXAG) Functionalization FactorTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach Description Reference Total Generation Transmission DistributionScheduleElectric(1)(2)(3)(4)(5)(6) Total Payroll Schedule D-3 6,784,377$ 2,197,199$ 982,243$ 3,604,935$ PAYXAG Factor 32.4%14.5%53.1% 79 124 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 818 Schedule F-2: Net Plant in Service (PLTSVC-N) Functionalization FactorTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach Description Reference Total Generation Transmission DistributionScheduleElectric(1)(2)(3)(4)(5)(6) Net Plant in Service Schedules B-1, B-2, B-3, B-5 56,870,975$ 32,006,785$ 6,237,683$ 18,626,507$ PLTSVC-N Factor 56.3%11.0%32.8% 80 125 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 819 Schedule F-3: Total O&M (TOM) Functionalization FactorTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach Description Reference Total Generation Transmission DistributionScheduleElectric(1)(2)(3)(4)(5)(6) Operations & Maintenance Expense D-1 and D-2 42,130,549$ 30,974,683$ 1,812,764$ 9,343,101$ Total Taxes Other Than Income Tax E-2 4,172,241$ 2,405,330$ 373,913$ 1,392,998$ Total 46,302,790$ 33,380,013$ 2,186,677$ 10,736,099$ TOM Factor 72.1%4.7%23.2% 81 126 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 820 Schedule F-4: Net Plant in Service excluding General Plant (PLTXGNL-N) Functionalization FactorTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach Description Reference Total Generation Transmission DistributionScheduleElectric(1)(2)(3)(4)(5)(6) Gross Plant excluding General Plant Schedule B-1 92,489,700$ 51,920,021$ 11,810,356$ 28,759,324$ Accum Depreciation Schedule B-5 40,745,236$ 21,167,210$ 6,165,552$ 13,412,474$ Net Plant in Service 51,744,464$ 30,752,811$ 5,644,804$ 15,346,849$ PLTXGNL-N Factor 59.4%10.9%29.7% 82 127 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 821 Schedule F-5: General Net Plant in Service (GNLPLT-N) Functionalization FactorTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach Description Reference Total Generation Transmission DistributionScheduleElectric(1)(2)(3)(4)(5)(6) General Gross Plant in Service Schedules B-2 and B-3 10,889,178$ 2,737,340$ 1,348,291$ 6,803,547$ Accumulated Depreciation Schedule B-5 5,762,667$ 1,483,366$ 755,411$ 3,523,890$ Net Plant in Service 5,126,511$ 1,253,974$ 592,879$ 3,279,657$ GNLPLT-N Factor 24.5%11.6%64.0% 83 128 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 822 Schedule F-6: Revenue Requirement (REVREQ) Functionalization FactorTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach Description Reference Total Generation Transmission DistributionScheduleElectric(1)(2)(3)(4)(5)(6) Revenue Requirement A 41,247,176$ 25,253,339$ 3,306,733$ 12,687,103$ REVREQ Factor 61.2%8.0%30.8% 84 129 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 823 Schedule F-7: Inventory (INV) Functionalization FactorTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Schuepbach Description Reference Total Generation Transmission DistributionScheduleElectric Allocation(1)(2)(3)(4)(5)(6)(7) InventoryGeneration WP/F-7/1 635,433$ 635,433$ -$ -$ DirectTransmissionWP/F-7/1 137,556$ -$ 137,556$ -$ DirectDistributionWP/F-7/1 2,092,357$ -$ -$ 2,092,357$ Direct Transmission Distribution WP/F-7/1 110,155$ -$ 32,068$ 78,087$ TDPLTXGNL-GInventory (Materials & Supplies)WP/F-7/1 2,975,501$ 635,433$ 169,623$ 2,170,445$ INV Factor 21.4%5.7%72.9% 85 130 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 824 WP/F-7/1: Allocation of Materials and SuppliesTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Item Item Item Generation Transmission Distribution T&DLocationDescriptionDescriptionUnits on Hand Value Related(1)(2)(3)(4)(5)(6)(7)(8)(9) Total Materials & Supplies/Inventory as of 09/30/19 2,975,501$ 635,433$ 137,556$ 2,092,357$ 110,155$ 86 131 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 825 Schedule F-8: Transmission & Distribution Gross Plant in Service Excluding General Plant (TDPLTXGNL-G) Functionalization FactorTransmission Cost of Service GEUSPeriod Ending September 30, 2019Witness: Copeland Description Reference Total Generation Transmission DistributionScheduleT&D(1)(2)(3)(4)(5)(6) Gross Plant excluding General Plant B-1 40,569,680$ -$ 11,810,356$ 28,759,324$ TDPLTXGNL-G Factor 0.0%29.1%70.9% 87 132 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 826 Schedule F-9: Transportation Equipment Gross Plant (TRANSPPLT-G) Functionalization FactorTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Description Reference Total Generation Transmission DistributionScheduleElectric Allocation (1)(2)(3)(4)(5)(6)(7) Transportation Equipment Gross PlantAccount 9010 (Generation)WP/F-9/1 68,288$ 68,288$ -$ -$ GenerationAccount 9101 (Admin: Customer)WP/F-9/1 20,975$ -$ -$ 20,975$ Distribution Account 9131 (Customer Service)WP/F-9/1 158,267$ -$ -$ 158,267$ DistributionAccount 9310 (Engineering)WP/F-9/1 120,587$ -$ 35,104$ 85,483$ TDPLTXGNL-GAccount 9314 (Trans Subs)WP/F-9/1 72,133$ -$ 72,133$ -$ Transmission Account 9315 (Dist Subs)WP/F-9/1 85,342$ -$ -$ 85,342$ DistributionAccount 9324 (Trans Lines)WP/F-9/1 174,327$ -$ 174,327$ -$ TransmissionAccount 9325 (Dist Lines)WP/F-9/1 2,197,811$ -$ -$ 2,197,811$ Distribution Total Transportation Gross Plant 2,897,729$ 68,288$ 281,564$ 2,547,878$ TRANSPPLT-G Factor 2.4%9.7%87.9% 88 133 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 827 WP/F-9/1: Transportation Equipment DetailTransmission Cost of Service GEUSPeriod Ending September 30, 2019 See Attached Workpaper 89 134 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 828 Schedule F-10: Transportation Equipment Accumulated Depreciation (TRANSPPLT-AD) Functionalization FactorTransmission Cost of ServiceGEUSPeriod Ending September 30, 2019Witness: Schuepbach Description Reference Total Generation Transmission DistributionScheduleElectric Allocation (1)(2)(3)(4)(5)(6)(7) Transportation Equipment Accumulated DepreciationAccount 9010 (Generation)WP/F-9/1 68,288$ 68,288$ -$ -$ GenerationAccount 9101 (Admin: Customer)WP/F-9/1 2,447$ -$ -$ 2,447$ Distribution Account 9131 (Customer Service)WP/F-9/1 90,586$ -$ -$ 90,586$ DistributionAccount 9310 (Engineering)WP/F-9/1 65,934$ -$ 19,194$ 46,740$ TDPLTXGNL-GAccount 9314 (Trans Subs)WP/F-9/1 33,959$ -$ 33,959$ -$ TransmissionAccount 9315 (Dist Subs)WP/F-9/1 27,794$ -$ -$ 27,794$ DistributionAccount 9324 (Trans Lines)WP/F-9/1 160,177$ -$ 160,177$ -$ Transmission Account 9325 (Dist Lines)WP/F-9/1 1,385,567$ -$ -$ 1,385,567$ DistributionTotal Transportation Accumulated Depreciation 1,834,751$ 68,288$ 213,330$ 1,553,133$ TRANSPPLT-AD Factor 3.7%11.6%84.7% 90 135 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 829 PUC DOCKET NO. ___________________ APPLICATION OF GEUS TO CHANGE RATES FOR WHOLESALE TRANSMISSION SERVICE § § § § BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS DIRECT TESTIMONY AND ATTACHMENTS OF JILL A. SCHUEPBACH Attachment JAS-3 Tariff for Wholesale Transmission Service 91 136 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 830 GEUS Tariff for Electric Service Wholesale Transmission Service Effective Date: _________ Sheet No. 1 of 4 Revision Date: NA _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ GEUS Wholesale Transmission Service Tariff Availability GEUS, a municipally owned electric utility owned by the City of Greenville, will make Wholesale Transmission Service (Transmission Service) available at all points where GEUS’ transmission facilities contained within the Electric Reliability Council of Texas (ERCOT) have adequate capacity and suitable voltage and are available. Service under this tariff is Wholesale service and is not available for retail service. Applicability Transmission Service is applicable to wholesale transactions involving wholesale purchase of electric power and energy. This tariff for Transmission Service is applicable to Transmission Service using any transmission facilities owned by GEUS in accordance with PUC Substantive Rules 25.191-.203. Type of Service Three phase, 60 hertz alternating current, delivered onto, or received from GEUS’ transmission system at 60,000 volts or greater and on transmission facilities that have been prepared and made available for this service. Conditions As a condition to obtaining Transmission Service, the Transmission Service Customer shall meet all ERCOT requirements as specified in the ERCOT Protocols and Operating Guides. GEUS will provide Transmission Service to any eligible Transmission Service Customer, subject to the terms and conditions hereof the Public Utility Commission of Texas (PUC) Substantive Rule 25.198, provided that: (A) the eligible Transmission Service Customer has completed an Application for Transmission Service, as provided under PUC Substantive Rule 25.198; (B) the eligible Transmission Service Customer and GEUS, or a third party, have completed installation of all equipment specified under the Interconnection Agreement, consistent with NERC and ERCOT guidelines as set forth in PUC Substantive Rule 25.198; (C) the eligible Transmission Service Customer has executed an Interconnection Agreement for service under this tariff or, if necessary, requested in writing that GEUS file a proposed unexecuted agreement with the PUC; (D) the eligible Transmission Service Customer has arranged for Ancillary Services necessary for the transaction; (E) each wholesale load for which Transmission Service is requested maintains a power factor of 95% or greater at each point of interconnection; (F) the Transmission Service Customer has constructed, maintains and operates the facilities on its side of each point of interconnection that are necessary to reliably interconnect and deliver power from a resource to 92 137 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 831 GEUS Tariff for Electric Service Wholesale Transmission Service Effective Date: _________ Sheet No. 1 of 4 Revision Date: NA _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ GEUS Wholesale Transmission Service Tariff GEUS’ transmission system and from GEUS’ transmission system to the Transmission Service Customer’s loads; (G) to the extent the Transmission Service requires the addition of facilities or upgrades to the transmission system, such facilities have been placed in service. Pricing for Transmission Service Within ERCOT Charges for Transmission Service hereunder shall be in accordance with Texas Utility Code § 35.004(d) and PUC Substantive Rule 25.192. For Transmission Service a Transmission Service Customer shall incur both an access charge, as set forth below, and loss compensation charges. Annual Access Fee $46.590 per MW of coincident peak demand determined in accordance with PUC Substantive Rule 25.192. Charges for each calendar year shall be adjusted pursuant to the schedule in the PUC’s Order approving the transmission charges for that year. Pricing for Transmission Service for Exports from ERCOT Charges for Transmission Service for exports from ERCOT shall be in accordance with Texas Utility Code § 35.004(d) and PUC Substantive Rule 25.192. Transmission Service Customers exporting power from ERCOT will be assessed Transmission Service charges for the use of the ERCOT transmission system, based on the amount of power exported and the duration of the transaction. Charges for Transmission Service for exports from ERCOT shall be determined in accordance with PUC Substantive Rule 25.192(e) and shall be calculated using the charges set forth below: Monthly Rate (June – September) $11.648 per MW Monthly Rate (October – May) $3.883 per MW Weekly Rate (June – September) $2.673 per MW Weekly Rate (October – May) $0.896 per MW Daily Rate (June – September) $0.382 per MW Daily Rate (October – May) $0.128 per MW Hourly Rate (June – September) $0.016 per MW Hourly Rate (October – May) $0.005 per MW The Transmission Service Customer scheduling the export of power over a DC tie is solely responsible to GEUS for payment of these Transmission Service charges. Charges for use of the ERCOT transmission system for export purposes monthly shall not exceed the annual transmission charge for the transaction. Wholesale exports from ERCOT are subject to the satisfaction of applicable requirements necessary to provide export service. 93 138 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 832 GEUS Tariff for Electric Service Wholesale Transmission Service Effective Date: _________ Sheet No. 1 of 4 Revision Date: NA _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ GEUS Wholesale Transmission Service Tariff Losses A Transmission Service Customer that uses Transmission Service shall compensate GEUS for losses resulting from such Transmission Service. Losses shall be calculated by the Independent System Operator (ISO) in accordance with the method set forth in the ERCOT Protocols. Reliability Guidelines To maintain reliability of the ERCOT transmission grid, GEUS shall operate its transmission system in accordance with ERCOT Protocols, ERCOT Operating Guides, NERC guidelines, and any other guidelines of the ISO that may apply to GEUS’ transmission system. GEUS reserves the right, consistent with good utility practice and on a non-discriminatory basis, to interrupt Transmission Service without liability on GEUS’ part for the purpose of making necessary adjustments to, changes in, or repairs to its lines, substations and other facilities, or where the continuance of Transmission Service would endanger persons or property. In the event of any adverse condition or disturbance on GEUS’ system or any other system directly or indirectly interconnected with GEUS’ system, GEUS, consistent with Good Utility Practice, also may interrupt Transmission Service on a non-discriminatory basis in order to limit the extent or damage of the adverse condition or disturbance, to prevent damage to generating or transmission facilities, or to expedite restoration of service. GEUS will give the Transmission Service Customer as much advance notice as is practicable in the event of such interruption and shall restore service with due diligence. The Transmission Service Customer’s failure to respond to established emergency load shedding and curtailment procedures to relieve emergencies on GEUS’ transmission system may result in the Transmission Service Customer being deemed by GEUS to be in default and may result in the termination of Transmission Service. Voltage Support GEUS will provide whatever devices are necessary to maintain proper operating voltages on the GEUS transmission system in accordance with good utility practice for voltage support and in accordance with the requirements of the ISO. Construction of New Facilities Should new facilities be required to accommodate a request for planned Transmission Service, GEUS will follow the procedures set forth in the PUC Substantive Rules in working with the Transmission Service Customer to upgrade the transmission system. Upon receipt of a request for Transmission Service, ERCOT shall, if necessary, perform a system security screening study to assess the ability of the existing transmission system to support the requested Transmission Service. If existing facilities are inadequate to support the requested Transmission Service, the Transmission Service Customer may be required to provide a contribution in aid of construction of direct assignment facilities. In that event, GEUS will provide the customer with a facilities study that will include an estimate of the contribution in aid of construction of direct assignment facilities to be charged to the Transmission Service Customer for the cost of any required facilities or upgrades, and the time required to complete such construction and initiate requested service. Payment 94 139 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 833 GEUS Tariff for Electric Service Wholesale Transmission Service Effective Date: _________ Sheet No. 1 of 4 Revision Date: NA _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ GEUS Wholesale Transmission Service Tariff Any charges due to GEUS under this rate schedule shall be billed in accordance with PUC Substantive Rule 25.202. Customers shall make payment to GEUS in a manner consistent with the procedures and deadlines set forth in PUC Substantive Rule 25.202. Any late payments by customers or customer defaults shall be handled in accordance with PUC Substantive Rule 25.202. Payment Netting This Transmission Service rate is subject to orders entered by the PUC related to payment netting. Inter-utility charges are based on the net annual payments prescribed in the PUC’s orders relating to netting of payments. Agreement An agreement for Transmission Service containing terms and provisions consistent with PUC Substantive Rules 25.191-.203 is required prior to commencement of such service. Such agreement will require approval of the GEUS Board of Directors. Definitions Capitalized terms shall have the meanings set forth in PUC Substantive Rules 25.5 and 25.191 .203. Amendments to Rules In the event PUC Substantive Rules 25.191-.203 are amended or if a new rule is adopted governing the subject matter of this tariff, this tariff shall, nevertheless, remain effective until the new tariff(s) filed pursuant to any such amendment(s) or such new rules are approved, unless the amendment(s) or new rules or an agreement of the parties provide otherwise. Rate Case Expense Surcharge In addition to the Annual Access Fee, the Transmission Service Customer shall pay $0.0____ per MW per month for twenty four months or until the rate case expenses approved in Docket No. _____ are fully recovered. 95 140 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 834 PUC DOCKET NO. ___________________ APPLICATION OF GEUS TO CHANGE RATES FOR WHOLESALE TRANSMISSION SERVICE § § § § BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS DIRECT TESTIMONY AND ATTACHMENTS OF JILL A. SCHUEPBACH Attachment JAS-3A Tariff for Wholesale Transmission Service (redlined) 96 141 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 835 GEUS Tariff Forfor Electric Service WHOLESALE TRANSMISSION SERVICE Wholesale Transmission Service Effective Date: _____, 2014_________ Sheet No. 1 Page 4 of 54 Revision Date: NA _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ GEUS Wholesale Transmission Service Tariff Docket No. _____ Availability To eligible Transmission Service Customers for Wholesale Transmission Service through the transmission system of the City of Greenville, whoseGEUS, a municipally owned electric utility operates under the name of GEUS, owned by the City of Greenville, will make Wholesale Transmission Service (Transmission Service) available at all points where GEUS’ transmission facilities ofcontained within the Electric Reliability Council of Texas (ERCOT) have adequate capacity and suitable voltage and are available to provide. Service under this tariff is Wholesale service, in accordance with Public Utility PUC of Texas (PUC) Substantive Rules 25.191-.203. and is not available for retail service. Application Applicable onlyApplicability Transmission Service is applicable to wholesale transactions involving the wholesale purchase of electric power and energy. This tariff for Wholesale Transmission Service is applicable to Transmission Service using any transmission facilities owned by GEUS in accordance with PUC Substantive Rules 25.191-.203. Type of Service Three phase, 60 hertz alternating current, delivered onto, or received from GEUS’ transmission system at 60,000 volts or greater and on transmission facilities that have been prepared and made available for this service. Conditions Transmission Service Requirements As a condition to obtaining wholesale Transmission Service, the Transmission Service customers shall comply with all requirements for initiating Transmission Service in accordance with PUC Substantive Rule 25.198, including the execution of an Interconnection Agreement with each Transmission Provider and the Transmission Service Customer shall meet all Electric Reliability Council of Texas (ERCOT) requirements as specified in the ERCOT Protocols and Operating Guides. 97 142 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 836 GEUS Tariff Forfor Electric Service WHOLESALE TRANSMISSION SERVICE Wholesale Transmission Service Effective Date: _____, 2014_________ Sheet No. 1 Page 4 of 54 Revision Date: NA _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ GEUS Wholesale Transmission Service Tariff Docket No. _____ Conditions Precedent for Receiving Service Subject to the terms and conditions hereof and of PUC Substantive Rule 25.198, GEUS will provide wholesale Transmission Service to any eligible Transmission Service Customer, subject to the terms and conditions hereof the Public Utility Commission of Texas (PUC) Substantive Rule 25.198, provided that: A. (A) the eligible Transmission Service Customer has completed an Application for Transmission Service, as provided under PUC Substantive Rule 25.198; B. (B) the eligible Transmission Service Customer and GEUS, or a third party, have completed installation of all equipment specified under the Interconnection Agreement, consistent with NERC and ERCOT guidelines as set forth in PUC Substantive Rule 25.198; C. (C) the eligible Transmission Service Customer has executed an Interconnection Agreement for service under this tariff or, if necessary, requested in writing that GEUS file a proposed unexecuted agreement with the PUC; D. (D) the eligible Transmission Service Customer has arranged for Ancillary Services necessary for the transaction; E. (E) each wholesale load for which wholesale Transmission Service is requested maintains a power factor of 95% or greater at each point of interconnection; F. (F) the Transmission Service Customer has constructed, maintains and operates the facilities on its side of each point of interconnection that are necessary to reliably interconnect and deliver power from a resource to GEUS’ transmission system and from GEUS’ transmission system to the Transmission Service Customer’s loads; and G. (G) to the extent the Transmission Service requires the addition of facilities or upgrades to the transmission system, such facilities have been placed in service. Application Procedures GEUS and the Transmission Service Customer shall comply with the application procedures for Transmission Services set forth in PUC Substantive Rule 25.198, which shall govern such procedures. Construction of New Facilities 98 143 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 837 GEUS Tariff Forfor Electric Service WHOLESALE TRANSMISSION SERVICE Wholesale Transmission Service Effective Date: _____, 2014_________ Sheet No. 1 Page 4 of 54 Revision Date: NA _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ GEUS Wholesale Transmission Service Tariff Docket No. _____ Construction of new facilities needed to accommodate a request for Transmission Service shall be in accordance with the procedures set forth in PUC Substantive Rule 25.198. Upon receipt of a request for Transmission Service, GEUS shall, if necessary, perform a System Security Study in accordance with PUC Substantive Rule 25.198. Based on the results of the System Security Study, GEUS may also perform Facilities Study, in accordance with PUC Substantive Rule 25.198. An executed Facilities Study agreement with the Transmission Service Customer is required prior to GEUS performing a Facilities Study. In the event that existing facilities are inadequate to support the requested Transmission Service, GEUS may require the Transmission Service Customer to provide a contribution in aid of construction attributable to directly assigned facilities. Load Shedding and Curtailment Transmission Service hereunder shall be subject to, and GEUS and the Transmission Service Customer will comply with, the load shedding and curtailment procedures established under PUC Substantive Rule 25.200. Any interruption shall be based on operational factors and shall not accord a higher priority to GEUS’ retail and wholesale customers than to its customers taking Transmission Service. Service to all customers shall be restored as quickly as possible. Pricing for Transmission Service Within ERCOT Charges for Transmission Service hereunder shall be in accordance with Texas Utility Code § 35.004(d).) and PUC Substantive Rule 25.192. For Transmission Service a Transmission Service Customer shall incur both an access charge, as set forth below, and loss compensation charges. The Annual Access Fee – $0.03609 $46.590 per kWMW of coincident peak demand determined in accordance with PUC Substantive Rule 25.192. Charges for each calendar year shall be adjusted pursuant to the schedule in the PUC’s Order approving the transmission changescharges for that year. Pricing for Transmission Service for Exports from ERCOT Charges for Transmission Service for exports from ERCOT shall be in accordance with Texas Utility Code § 35.004(d) and PUC Substantive Rule 25.192. Transmission Service Customers exporting power from ERCOT will be assessed an access chargeTransmission Service charges for the use of the ERCOT transmission system, based on the amount of power exported and the duration of the service requestedtransaction. Charges for Transmission Service for 99 144 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 838 GEUS Tariff Forfor Electric Service WHOLESALE TRANSMISSION SERVICE Wholesale Transmission Service Effective Date: _____, 2014_________ Sheet No. 1 Page 4 of 54 Revision Date: NA _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ GEUS Wholesale Transmission Service Tariff Docket No. _____ exports from ERCOT shall be determined in accordance with PUC Substantive Rule 25.192(e) and shall be calculated using the charges set forth below: Service Type Access Rate per kW of Peak Demand Monthly On-Peak $0.00902 Monthly Off-Peak $0.00301 Monthly Rate (June – September) $11.648 per MW Monthly Rate (October – May) $3.883 per MW Weekly Rate (June – September) $2.673 per MW Weekly Rate (October – May) $0.896 per MW Daily Rate (June – September) $0.382 per MW Daily Rate (October – May) $0.128 per MW Hourly Rate (June – September) $0.016 per MW Hourly Rate (October – May) $0.005 per MW The Transmission Service Customer scheduling the export of power over a DC tie is solely responsible to GEUS for payment of these Transmission Service charges. Charges for use of the ERCOT transmission system for export purposes monthly shall not exceed the annual transmission charge for the transaction. Wholesale exports from ERCOT are subject to the satisfaction of applicable requirements necessary to provide export service. Losses A Transmission Service Customer that uses Transmission Service shall compensate GEUS for losses resulting from such Transmission Service. Losses shall be calculated by the Independent System Operator (ISO) in accordance with the methodsmethod set forth in the ERCOT Protocols. Reliability Guidelines 100 145 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 839 GEUS Tariff Forfor Electric Service WHOLESALE TRANSMISSION SERVICE Wholesale Transmission Service Effective Date: _____, 2014_________ Sheet No. 1 Page 4 of 54 Revision Date: NA _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ GEUS Wholesale Transmission Service Tariff Docket No. _____ To maintain reliability of the ERCOT transmission grid, GarlandGEUS shall operate its transmission system in accordance with ERCOT Protocols, ERCOT Operating Guides, NERC Guidelinesguidelines, and any other guidelines of the ISO that may apply to GEUS’ transmission system. GEUS reserves the right, consistent with good utility practice and on a non-discriminatory basis, to interrupt Transmission Service without liability on GEUS’ part for the purpose of making necessary adjustments to, changes in, or repairs to its lines, substations and other facilities, or where the continuance of Transmission Service would endanger persons or property. In the event of any adverse condition or disturbance on GEUS’ system or any other system directly or indirectly interconnected with GEUS’ system, GEUS, consistent with Good Utility Practice, also may interrupt Transmission Service on a non-discriminatory basis in order to limit the extent or damage of the adverse condition or disturbance, to prevent damage to generating or transmission facilities, or to expedite restoration of service. GEUS will give the Transmission Service Customer as much advance notice as is practicable in the event of such interruption, and shall restore service with due diligence. The Transmission Service Customer’s failure to respond to established emergency load shedding and curtailment procedures to relieve emergencies on GEUS’ transmission system may result in the Transmission Service Customer being deemed by GEUS to be in default and may result in the termination of Transmission Service. Voltage Support GEUS will provide whatever devices are necessary to maintain proper operating voltages on the GEUS transmission system in accordance with good utility practice for voltage support and in accordance with the requirements of the ISO. Construction of New Facilities Should new facilities be required to accommodate a request for planned Transmission Service, GEUS will follow the procedures set forth in the PUC Substantive Rules in working with the Transmission Service Customer to upgrade the transmission system. Upon receipt of a request for Transmission Service, ERCOT shall, if necessary, perform a system security screening study to assess the ability of the existing transmission system to support the requested Transmission Service. If existing facilities are inadequate to support the requested Transmission Service, the Transmission Service Customer may be required to provide a contribution in aid of construction of direct assignment facilities. In that event, GEUS will provide the customer with a facilities study that will include an estimate of the contribution in aid of construction of direct assignment facilities to be charged to the Transmission Service Customer for the cost of any required facilities or upgrades, and the time required to complete such construction and initiate requested service. Payment Any charges due to GEUS under this rate schedule shall be billed in accordance with PUC Substantive Rule 25.202. Customers shall make payment to GEUS in a manner consistent with the procedures and deadlines set forth in PUC 101 146 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 840 GEUS Tariff Forfor Electric Service WHOLESALE TRANSMISSION SERVICE Wholesale Transmission Service Effective Date: _____, 2014_________ Sheet No. 1 Page 4 of 54 Revision Date: NA _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ GEUS Wholesale Transmission Service Tariff Docket No. _____ Substantive Rule 25.202. Any late payments by customers or customer defaults shall be handled in accordance with PUC Substantive Rule 25.202. Payment Netting This Rate for Wholesale Transmission Service rate is subject to orders entered by the PUC relatingrelated to payment netting. Inter-utility charges are based on the net annual payments prescribed in the PUC’s orders relating to netting of payments. Agreement An agreement for Transmission Service containing terms and provisions consistent with PUC Substantive Rules 25.191-.203 is required prior to commencement of such service. Such agreement will require approval of the GEUS Board of Directors. Definitions Capitalized terms shall have the meanings set forth in PUC Substantive Rules 25.5 and 25.191-. .203. AmendmentAmendments to Rules In the event PUC Substantive Rules 25.191-.203 are amended or if a new rule is adopted governing the subject matter of this tariff, this tariff shall, nevertheless, remain effective until the new tariff(s) filed pursuant to any such amendment(s) or such new rules are approved, unless the amendment(s) or new rules or an agreement of the parties provide otherwise. Rate Case Expense Surcharge In addition to the Annual Access Fee, the Transmission Service Customer shall pay $0.0597740____ per MW per month for twenty four months or until the rate case expenses approved in Docket No. _____ are fully recovered. 102 147 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 841 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 842 PUC DOCKET NO. _________ APPLICATION OF BRYAN TEXAS UTILITIES FOR INTERIM UPDATE OF WHOLESALE TRANSMISSION RATES § § § PUBLIC UTILITY COMMISSION OF TEXAS TABLE OF CONTENTS DESCRIPTION PAGE(S) Application.....................................................................................................................................2-6 Exhibit A, Form of Notice .....................................................................................................7 Testimony Direct Testimony of Jill A. Schuepbach ...........................................................................8-22 Exhibit JAS-1 Resume and Record of Testimony ...........................................................23-27 Exhibit JAS-2 Tariff for Wholesale Transmission Service (Redlined) ...........................28-33 Schedules and Workpapers Schedules and Workpapers ..............................................................................................34-45 1 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 843 PUC DOCKET NO. _______ APPLICATION OF BRYAN TEXAS UTILITIES FOR INTERIM UPDATE OF WHOLESALE TRANSMISSION RATES § § § PUBLIC UTILITY COMMISSION OF TEXAS APPLICATION OF BRYAN TEXAS UTILITIES TO THE HONORABLE PUBLIC UTILITY COMMISSION: The City of Bryan, Texas, operating its municipally owned utility under the name Bryan Texas Utilities (BTU), a transmission service provider (TSP) in the ERCOT region, files this Application for Interim Update of Wholesale Transmission Rates pursuant to 16 Texas Administrative Code (TAC) § 25.192(h)(1) and the Commission’s Interim TCOS Filing Package, and respectfully shows the following: I. BACKGROUND AND AUTHORITY BTU seeks an interim revision to its previously approved transmission cost of service (TCOS) and wholesale transmission rate pursuant to, and consistent with, the requirements of the Public Utility Commission of Texas (“Commission” or “PUC”) as set out in 16 TAC § 25.192(g)-(h), and the Filing Requirements For Interim Update of Wholesale Transmission Rates Pursuant to Substantive Rule 25.193(a)(1)1 (the “Interim TCOS Filing Package”). A transmission service provider “may apply to update its transmission rates on an interim basis not more than twice per calendar year to reflect changes in its invested capital.”2 Proceedings pursuant to this rule are not intended to determine the reasonableness of the interim costs.3 Rather, the rule provides that the Commission “shall review whether the costs of 1 Now 16 TAC § 25.192(h)(1). 2 16 TAC § 25.192(h)(1). 3 See 16 TAC § 25.192(g)(1). 2 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 844 transmission plant additions are reasonable and necessary at the next complete review of the TSP’s transmission cost of service.”4 II. BTU’S FILING With this Application, BTU files the Direct Testimony of Jill A. Schuepbach, as well as the Interim TCOS Filing Package Schedules and Workpapers. BTU’s notice is attached as Exhibit A and discussed in Section V below. III. COSTS INCLUDED IN BTU’S INTERIM TCOS UPDATE BTU’s last TCOS was approved in Docket No. 48123,5 which used plant balances as of December 31, 2017. This Application compares the actual September 30, 2020 transmission net plant balances with the December 31, 2017 net plant balances established in Docket No. 48123. The difference between these two balances constitutes the change in BTU’s rate base documented in this Application. IV. RELIEF REQUESTED The requested increase in total transmission rate base in this filing is $32,200,967 (see Schedule B), with a total annual wholesale transmission revenue requirement increase of $6,571,542 (see Schedule A). BTU further requests that the Commission approve an interim update to its wholesale transmission rate of $0.511284 per kilowatt (see Schedule A). BTU requests that this interim update to its wholesale transmission rate be effective as soon as possible and no later than 60 days after the filing of the original Application, consistent 4 See 16 TAC § 25.192(g)(2). 5 Application of Bryan Texas Utilities for Interim Update of Wholesale Transmission Rates, Docket No. 48123, Notice of Approval (Apr. 24, 2018). 3 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 845 with 16 TAC § 25.192(h)(4)(C).6 Section 25.192(h)(2) specifically removes from this proceeding any consideration or determination of whether the costs included in BTU’s Application are reasonable and necessary.7 Because such determinations are reserved for a later proceeding, the issues in this docket are very limited and it should be processed expeditiously. V. NOTICE AND PROCESSING BTU will provide written notice pursuant to 16 TAC § 25.192(h)(4)(A) to all parties in the last complete review of BTU’s TCOS,8 and to all of the distribution service providers listed in the last docket in which the Commission set the annual transmission service charges for ERCOT (Docket No. 50333).9 Such notice will be provided in the form attached as Exhibit A. Upon completion of the notice described above, BTU will file an affidavit attesting to the provision of such notice within a reasonable time and by such date as may be established by the presiding officer. BTU requests that the Commission docket this application upon receipt and issue an order establishing an intervention deadline and requiring Commission Staff to comment on the material sufficiency of the Application. Consistent with 16 TAC § 25.192(h)(4)(A), BTU 6 16 TAC § 25.192(h)(4)(C) provides that, if an application meets the requirements for informal disposition, the presiding officer shall issue a notice of approval within 60 days of the date a materially sufficient application is filed. There is also precedent for a shorter time frame for processing such applications. See Application of Texas New Mexico Power Company for Interim Update of Wholesale Transmission Rates Pursuant to P.U.C. Subst. R. §25.192(h)(1), Docket No. 40674 (Sept. 27, 2012) (Notice of Approval issued 35 days after application filed); Application of Oncor Electric Delivery Company LLC for Interim Update of Wholesale Transmission Rates Pursuant to Subst. R. § 25.192(h)(1), Docket No. 40603 (Aug. 29, 2012) (Notice of Approval issued 33 days after application filed); Application of Brazos Electric Cooperative, Inc. for Interim Update of Wholesale Transmission Rates Pursuant to P.U.C. Subst. R. 25.192(h), Docket No. 40465 (Jun. 6, 2012) (Notice of Approval issued 30 days after application filed); Application of Brazos Electric Cooperative, Inc. for Interim Update of Wholesale Transmission Rates Pursuant to P.U.C. Subst. R. 25.192(h), Docket No. 38822 (Nov. 22, 2010) (Notice of Approval issued 35 days after application filed). 7 16 TAC § 25.192(h)(2). 8 Application of Bryan Texas Utilities to Change Rates for Wholesale Transmission Service, Docket No. 22616, Final Order (May 9, 2001). 9 Commission Staff’s Petition to Set 2020 Wholesale Transmission Service Charges for the Electric Reliability Council of Texas, Docket No. 50333, Order (May 1, 2020). 4 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 846 requests that the intervention deadline be set 21 days from the date service of notice is completed. BTU intends to serve notice by December 16, 2020, thus the intervention deadline in this case should be January 6, 2021. If no timely requests to intervene are filed, BTU requests that this Application be processed and approved informally pursuant to 16 TAC § 22.35, consistent with 16 TAC § 25.192(h)(4)(C). In the alternative, and to the extent the Commission determines such is necessary, BTU requests the scheduling of a prehearing conference as soon as possible to address the processing of this docket. To the extent the relief requested herein is contested in a manner that would prevent the implementation of BTU’s request within 60 days of filing the Application, BTU respectfully requests an opportunity for hearing, pursuant to 16 TAC § 22.125(c), to establish that good cause exists for the Commission to grant BTU interim relief. In such event, BTU further requests expedited treatment of this Application to permit the Commission to issue an interim order and then a final order as expeditiously as possible thereafter. VI. PRAYER WHEREFORE, PREMISES CONSIDERED, BTU respectfully requests that the Commission: approve BTU’s Application and filing package; expeditiously order an interim adjustment to BTU’s annual revenue requirement to a total of $36,291,373 (an increase of $6,571,542); approve an interim wholesale transmission rate of $0.511284 per kilowatt effective within 60 days of the filing of this Application; and grant such other and further relief to which BTU may show itself entitled. 5 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 847 Respectfully submitted, Carl Galant State Bar No. 24050633 Travis Vickery State Bar No. 00794790 MCGINNIS LOCHRIDGE LLP 600 Congress Avenue, Suite 2100 Austin, Texas78701 (512) 495-6083 (512) 505-6383 FAX cgalant@mcginnislaw.com ATTORNEYS FOR BRYAN TEXAS UTILITIES 6 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 848 EXHIBIT A NOTICE OF RATE CHANGE REQUEST On December 15, 2020, Bryan Texas Utilities (BTU) filed its Application for Interim Update of Wholesale Transmission Rates pursuant to 16 Texas Administrative Code (TAC) §25.192(h). BTU’s Application seeks an interim adjustment to the previously approved transmission cost of service and wholesale transmission rate due to transmission investment in excess of the level currently authorized in rates. If approved, BTU’s total rate base will increase by $32,200,967, resulting in a total interim transmission cost of service revenue requirement increase of $6,571,542 above the level currently in rates. BTU’s interim wholesale transmission rate will increase to $0.511284 per kilowatt. BTU has requested that the proposed transmission rate be implemented as soon as possible. Because the Application requests a revision to BTU’s wholesale transmission rate to reflect changes in its invested capital, affected customers include all distribution service providers who pay wholesale transmission charges pursuant to 16 TAC § 25.192. A complete copy of BTU’s Application is available for inspection at the offices of McGinnis Lochridge, LLP, 600 Congress Ave., Suite 2100, Austin, Texas 78701. Persons who wish to intervene in or comment upon these proceedings should notify the Public Utility Commission of Texas as soon as possible, as an intervention deadline will be imposed. 16 TAC § 25.192(h)(4)(A) establishes an intervention deadline of 21 days from the date service of notice is completed. A request to intervene or for further information should be made to the Public Utility Commission of Texas, P.O. Box 13326, Austin, Texas 78711-3326 and reference Docket No. _______________. Further information may also be obtained by calling the Public Utility Commission at (512) 936-7120 or (888) 782-8477. Hearing- and speech-impaired individuals with text telephones (TTY) may contact the commission at (512) 936-7136. Bryan Texas Utilities 7 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 849 PUC DOCKET NO. ______ APPLICATION OF BRYAN TEXAS UTILITIES FOR INTERIM UPDATE OF WHOLESALE TRANSMISSION RATES § § § § PUBLIC UTILITY COMMISSION OF TEXAS DIRECT TESTIMONY OF JILL A. SCHUEPBACH ON BEHALF OF BRYAN TEXAS UTILITIES DECEMBER 14, 2020 8 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 850 PUC DOCKET NO. XXXXX APPLICATION OF BRYAN TEXAS UTILITIES FOR INTERIM UPDATE OF WHOLESALE TRANSMISSION RATES § § § PUBLIC UTILITY COMMISSION OF TEXAS DIRECT TESTIMONY OF JILL A. SCHUEPBACH TABLE OF CONTENTS Page I.INTRODUCTION AND QUALIFICATIONS .............................................................1 II.REVENUE REQUIREMENT: SCHEDULE A ............................................................3 III.TRANSMISSION PROJECTS ......................................................................................5 IV.RATE BASE: SCHEDULES B, B-1, AND B-5 .........................................................10 V.DEPRECIATION EXPENSE: SCHEDULE E-1 ........................................................11 VI.PAYMENT IN LIEU OF TAXES: SCHEDULE F-1 .................................................11 VII.UPDATED WHOLESALE TRANSMISSION RATE ...............................................12 VIII.SUMMARY AND RECOMMENDATIONS..............................................................12 ATTACHMENTS Attachment JAS-1 Resume and Record of Testimony Attachment JAS-2 Tariff for Wholesale Transmission Service 9 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 851 DIRECT TESTIMONY 1 JILL A. SCHUEPBACH I.INTRODUCTION AND QUALIFICATIONS1 Q.PLEASE STATE YOUR NAME, BUSINESS ADDRESS, AND CURRENT2 EMPLOYMENT POSITION.3 A.My name is Jill A. Schuepbach. I am an Executive Consultant in the Energy Practice4 of NewGen Strategies and Solutions, LLC (“NewGen”). My business address is 2255 Union Blvd., Suite 305, Lakewood, Colorado 80228. NewGen is a consulting firm that6 specializes in utility rates, engineering economics, financial accounting, asset7 valuation, appraisals, and business strategy for electric, natural gas, water, and8 wastewater utilities.9 Q.PLEASE OUTLINE YOUR FORMAL EDUCATION.10 A.I have a Master of Business Administration degree from the University of Colorado,11 and a Bachelor of Science in Mechanical Engineering from the University of Missouri.12 In addition to my undergraduate and graduate degrees, I am a registered Professional13 Engineer in the state of Colorado.14 Q.PLEASE DESCRIBE YOUR PROFESSIONAL EXPERIENCE.15 A.I am an Executive Consultant in NewGen’s Energy Practice. I have been employed by16 NewGen since September 2012. Prior to joining NewGen, I was employed by R. W.17 Beck, Inc., and its successor (SAIC Energy, Environment & Infrastructure, Inc.) since18 2001. Prior to joining R. W. Beck, I was employed by Black & Veatch from 199819 through 2001.20 I have more than 20 years of experience in economic analyses for the energy, water,21 and natural gas industries. My work includes various assignments for private industry,22 local governments, and utilities, including financial and economic analyses, cost of23 service and rate studies, engineer of record, and pole attachment fees. I have been24 10 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 852 DIRECT TESTIMONY 2 JILL A. SCHUEPBACH extensively involved in the development of unbundled cost of service and pricing 1 models during my career. Attachment JAS-1 to this testimony provides a summary of 2 my qualifications. 3 Q. HAVE YOU TESTIFIED BEFORE ANY REGULATORY COMMISSIONS? 4 A. Yes. I submitted testimony to the Florida Public Service Commission and the Public 5 Utility Commission of Texas (“PUC” or “Commission”) as shown in my resume and 6 record of testimony included as Attachment JAS-1. 7 Q. ON WHOSE BEHALF ARE YOU TESTIFYING? 8 A. I am testifying on behalf of Bryan Texas Utilities (“BTU”), which is a municipally 9 owned electric utility serving the citizens of Bryan, Texas. 10 Q. WHAT IS THE PURPOSE OF YOUR DIRECT TESTIMONY? 11 A. The purpose of my testimony is to support BTU’s application for an Interim Update of 12 its wholesale transmission rates pursuant to 16 Texas Administrative Code (“TAC”) 13 § 25.192(h)(1) and the Interim Transmission Cost of Service Rate Filing Package 14 (“Interim-TCOS-RFP”). 15 Q. WERE THE SCHEDULES AND TARIFF PREPARED BY YOU OR UNDER 16 YOUR DIRECT SUPERVISION? 17 A. Yes. 18 Q. WHAT SOURCE DOCUMENTS WERE USED TO PREPARE THE 19 SCHEDULES CONTAINED IN THIS INTERIM UPDATE? 20 A. BTU financial reports for fiscal years ending September 30, 2018, 2019, and 2020 were 21 used to prepare the schedules. 22 11 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 853 DIRECT TESTIMONY 3 JILL A. SCHUEPBACH Q.IS THIS THE TYPE OF INFORMATION THAT EXPERTS IN THIS FIELD 1 WOULD NORMALLY RELY UPON?2 A.Yes.3 Q.DO BTU’S BOOKS AND RECORDS COMPLY WITH THE INTERIM TCOS4 RATE FILING INSTRUCTIONS?5 A.Yes. The TCOS rate filing package for non-investor owned utilities requires an6 applicant to utilize the system of accounts prescribed by the Federal Energy Regulatory7 Commission (“FERC”) chart of accounts or the chart of accounts prescribed by the8 municipal governing body. BTU’s books and records reflect the chart of accounts9 prescribed by the City of Bryan and are consistent with the FERC system of accounts.10 II.REVENUE REQUIREMENT: SCHEDULE A11 Q.PLEASE DESCRIBE THE COSTS INCLUDED IN BTU’S REVENUE12 REQUIREMENT.13 A.According to 16 TAC § 25.192(h)(1), an Electric Reliability Council of Texas14 (“ERCOT”) transmission service provider may update its wholesale transmission rate15 to “reflect the addition and retirement of transmission facilities and include appropriate16 depreciation, federal income tax and other associated taxes, and the Commission-17 authorized rate of return on such facilities as well as changes in loads.” BTU’s Interim18 Update includes the appropriate depreciation expense and Commission-authorized rate19 of return on net plant additions, as well as associated taxes.20 12 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 854 DIRECT TESTIMONY 4 JILL A. SCHUEPBACH The interim transmission revenue requirement BTU is requesting is $36,291,373, 1 which is an increase of $6,571,542 since BTU’s last interim transmission rate filing in 2 Docket No. 48123.1 3 Q. PLEASE SUMMARIZE THE RATE OF RETURN CALCULATION. 4 A. BTU’s approved rate of return was set in Docket No. 226162 at 11.71% of the rate base. 5 Applying the approved rate of return to the proposed rate base of $175,575,711 results 6 in a return of $20,559,916 as shown in Schedule B. 7 Q. PLEASE SUMMARIZE YOUR RESULTS. 8 A. Based on the allowances pursuant to 16 TAC § 25.192(h)(1), BTU’s transmission 9 revenue requirement as requested in this application is $36,291,373, compared to 10 $29,719,831 as approved by the Commission in Docket No. 48123. This is an increase 11 of $6,571,542 or 22.1%. 12 Based on the 2019 ERCOT average four coincident peak (“4CP”) load of 70,981 MW,3 13 the resulting BTU Wholesale Transmission Rate is $51.1284 per MW per year, 14 compared to the current rate of $44.1779 per MW per year. In Table 1 below, I show 15 a comparison of BTU’s 2020 TCOS with the BTU TCOS the Commission approved in 16 Docket 48123. 17 18 1 Application of Bryan Texas Utilities for Interim Update of Wholesale Transmission Rates, Docket No. 48123, Notice of Approval (Apr. 24, 2018) (“Docket No. 48123”). 2 Application of Bryan Texas Utilities to Change Rates for Wholesale Transmission Service, Docket No. 22616, Final Order (May 9, 2001) (“Docket No. 22616”). 3 Commission Staff’s Petition to Set 2020 Wholesale Transmission Service Charges for the Electric Reliability Council of Texas, Inc., Docket No. 50333, Final Order (May 1, 2020) (“Docket No. 50333”). 13 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 855 DIRECT TESTIMONY 5 JILL A. SCHUEPBACH Table 1 BTU Transmission Cost of Service Item Docket No. 48123 Approved 2018 Current Application 2020 Increase ($) Increase (%) Rate Base (Invested Capital) $143,374,744 $175,575,711 $32,200,967 22.5% Return on Rate Base 11.71% 11.71% $0 0.0% Return $16,789,183 $20,559,916 $3,770,733 22.5% O&M Expense $706,683 $706,683 $0 0.0% Depreciation Expense $5,540,013 $6,862,890 $1,322,877 23.9% Taxes Other Than Income $6,683,954 $8,161,885 $1,477,932 22.1% Return $16,789,183 $20,559,916 $3,770,733 22.5% Less Other Revenues $0 $0 $0 0.0% Revenue Requirement $29,719,831 $36,291,373 $6,571,542 22.1% Access Fee ($/MW) $44.1779 $51.1284 $6.950 15.7% III.TRANSMISSION PROJECTS1 Q.PLEASE DESCRIBE THE TRANSMISSION PROJECTS INCLUDED IN2 BTU’S INTERIM UPDATE.3 A.Generally, BTU’s interim TCOS update includes the addition of transmission facilities4 at or above 60 kilovolts (“kV”) placed into service between December 31, 2017 and5 September 30, 2020. Specifically, BTU’s Interim Update includes the following6 transmission projects totaling an increase in gross plant of $45,786,203:7 Steele Store Substation 138 kV Bus Addition: BTU added a 138 kV ring bus to8 serve the existing Steele Store Substation. The station was converted from a 69 kV9 radial source to a 138 kV future looped system as part of the West System bulk10 electric system plan. The addition was placed into service in September 2020. A11 14 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 856 DIRECT TESTIMONY 6 JILL A. SCHUEPBACH certificate of convenience and necessity (“CCN”) was not required for this 1 substation project. The substation addition underwent independent review by 2 ERCOT. 3  Snook to Steele Store 138 kV Line: BTU designed and constructed a 138 kV 4 transmission line to improve reliability on the west side of BTU’s system. This is 5 a portion of the project to complete the 138 kV loop around the west side of BTU’s 6 system, which underwent independent review by ERCOT. The line was placed into 7 service in September 2020. This municipally owned utility project did not require 8 a CCN. 9  Rodgers Substation: BTU designed and constructed Rodgers Substation to replace 10 the existing Nall Lane Substation. Rodgers Substation was constructed as a 69 kV 11 ring bus to improve reliability in the inner-city load area and to provide additional 12 capacity to serve existing and future electric load. The substation was placed into 13 service in August 2020. A CCN was not required for this substation project. The 14 substation addition did not undergo independent review by ERCOT. 15  Annex 138 kV Transmission Loop-in: BTU reconstructed a section of an existing 16 69 kV transmission line to 138 kV standards to accommodate the new Leonard 17 Road Substation. The project is part of the future 138 kV line from Steele Store to 18 Atkins closing the West System. The project was placed into service in April 2020. 19 This municipally owned utility project did not require a CCN. The project did not 20 undergo independent review by ERCOT. 21  Graham Substation: BTU constructed a new 138 kV ring bus station and looped in 22 an existing 138 kV BTU transmission line to accommodate a new College Station 23 15 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 857 DIRECT TESTIMONY 7 JILL A. SCHUEPBACH distribution substation serving College Station customers. The project was placed 1 into service in May 2020. A CCN was not required for this substation project. The 2 project did not undergo independent review by ERCOT. 3 Texas Department of Transportation (“TxDOT”) FM 2818: BTU designed and4 reconstructed a section of 138 kV underground conductor to provide clearance for5 the TxDOT road work along FM 2818 between Luther Street and George Bush6 Drive. The underground cable capacity was increased to provide for future loading7 of the south side of BTU’s system. Optical ground wire (“OPGW”) was installed8 as shield wire to provide for better system reliability. The project was placed into9 service in May 2020. This municipally owned utility project did not require a CCN10 and did not undergo independent review by ERCOT.11 Greens Prairie to South Switch OPGW Installation: BTU added OPGW static to12 allow for removal of the existing fiber optic cable from the communications zone.13 The project was placed into service in December 2019. The project did not require14 a CCN and did not undergo independent review by ERCOT.15 Mobile Substation Driveway Access: BTU built new access roads into six16 transmission substations to allow for large equipment movement into and out of the17 substations. The projects were placed into service on various dates throughout18 2019. The projects did not require a CCN and did not undergo independent review19 by ERCOT.20 Nall Lane 69 kV Breaker Replacement: BTU replaced the old 69 kV oil circuit21 breaker with a new 69 kV SF6 circuit breaker. This ensures against oil spills and22 increases system reliability with a faster fault clearing breaker. The project was23 16 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 858 DIRECT TESTIMONY 8 JILL A. SCHUEPBACH placed into service in September 2018. The project did not require a CCN and did 1 not undergo independent review by ERCOT. 2 Atkins Switcher Upgrade: BTU installed a new Capacitor Switching device to3 replace a switch that had reached the end of its life and was not designed for4 capacitor switch operations. The project was placed into service in July 2018. The5 project did not require a CCN and did not undergo independent review by ERCOT.6 The capital expenditures associated with these facilities were not included in BTU’s 7 transmission rate base in its last rate proceedings in Docket No. 48123. 8 Q.ARE THESE PROJECTS DEEMED TRANSMISSION AS DESCRIBED IN 169 TAC § 25.192(C)(1)?10 A.Yes. All of these projects are transmission facilities based on the description in 1611 TAC § 25.192(c)(1). It is my understanding from the information provided by BTU12 staff that the nature and purpose of the projects included in this Interim Update were to13 meet anticipated load growth, ensure system reliability, and improve operational14 efficiency.15 Q.DESCRIBE THE TRANSMISSION PLANT RETIREMENTS INCLUDED IN16 BTU’S INTERIM UPDATE.17 A.BTU’s Interim Update includes transmission plant retirements totaling $1,170,681.18 These retirements are primarily a result of rebuilds and replacements associated with19 the projects described above. The retirements are identified below by account number.20 Account 353 Station Equipment retirements include:21 •The original circuit switchers for capacitor banks at Atkins Substation.22 •The transformer and 69 kV breaker at the Nall Substation.23 17 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 859 DIRECT TESTIMONY 9 JILL A. SCHUEPBACH • The 69 kV switch at the Briarcrest Substation. 1 •The remote terminal unit (“RTU”) at the Business Park Substation.2 •RTU at the South Switch Substation.3 Account 355 Pole and Fixture retirements include:4 •The transmission poles at Industrial Park and 28th Street.5 Account 356 Overhead Conductors and Devices retirements include:6 •The transmission poles associated with the TxDOT overhead to underground7 project.8 Account 357 Underground Conduit retirements include:9 •A duct bank associated with the TxDOT overhead to underground project.10 Account 358 Underground Conductors and Devices retirements include:11 •An underground cable associated with the TxDOT overhead to underground12 project.13 Q.PURSUANT TO GENERAL INSTRUCTION NO. 2 IN THE INTERIM-TCOS-14 RFP, ARE THE TRANSMISSION PROJECTS INCLUDED IN BTU’S15 INTERIM UPDATE LOCAL?16 A.Yes. The transmission projects included in BTU’s Interim Update are local. The17 projects are located within Brazos County and the surrounding counties to which BTU18 provides electric service.19 Q.PURSUANT TO GENERAL INSTRUCTION NO. 2 IN THE INTERIM-TCOS-20 RFP, ARE THE TRANSMISSION PROJECTS INCLUDED IN BTU’S21 INTERIM UPDATE CURRENTLY USED AND USEFUL?22 18 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 860 DIRECT TESTIMONY 10 JILL A. SCHUEPBACH A.Yes. As of September 30, 2020, the transmission projects included in BTU’s Interim 1 Update are completed, in service, and used and useful to the public. 2 Q.ARE ALL OF THE TRANSMISSION FACILITIES IDENTIFIED ABOVE3 INCLUDED IN THE PLANT IN SERVICE ACCOUNTS REFLECTED IN4 BTU’S BOOKS AND RECORDS?5 A.Yes.6 IV.RATE BASE: SCHEDULES B, B-1, AND B-57 Q.PLEASE DISCUSS THE INCREASE IN BTU’S GROSS TRANSMISSION8 PLANT INCLUDED IN THIS INTERIM UPDATE.9 A.The transmission plant increase included in the Interim Update is the difference in the10 transmission plant from BTU’s last interim transmission rate filing in 2018,11 Docket No. 48123, and the transmission plant as reflected in BTU’s September 30,12 2020 financial reports. The gross transmission plant in this filing is $226,911,509,13 which is an increase of $45,786,203.14 Q.PLEASE EXPLAIN THE INCREASE IN ACCUMULATED DEPRECIATION15 BALANCE AS SHOWN ON SCHEDULE B-5.16 A.The increase in the accumulated depreciation balance on Schedule B-5 is the difference17 between the approved accumulated depreciation balance in Docket No. 48123 and the18 accumulated depreciation from BTU’s September 30, 2020 financial reports. The19 transmission accumulated depreciation in this filing is $52,286,595, which is an20 increase of $13,585,236.21 Q.WHAT IS THE INCREASE IN NET TRANSMISSION PLANT?22 19 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 861 DIRECT TESTIMONY 11 JILL A. SCHUEPBACH A.The net transmission plant, including allocated general plant, in this filing is1 $174,624,914 as shown on Schedule B. This is an increase of $32,200,967 from Docket2 No. 48123.3 V.DEPRECIATION EXPENSE: SCHEDULE E-14 Q.PLEASE EXPLAIN HOW THE INCREASE IN DEPRECIATION EXPENSE IN5 THIS INTERIM UPDATE WAS CALCULATED.6 A.Pursuant to General Instruction No. 5 in the Interim-TCOS-RFP, the depreciation rates7 accepted by this Commission in BTU’s last full transmission rate filing, Docket8 No. 22616, were applied to the transmission plant additions included in the Interim9 Update to determine the increase in depreciation expense. This calculation is shown10 on Schedule E-1.11 VI.PAYMENT IN LIEU OF TAXES: SCHEDULE F-112 Q.PLEASE EXPLAIN THE CALCULATION OF OTHER TAXES ON13 SCHEDULE F-1.14 A.Pursuant to Commission 16 TAC § 25.192(h)(1), the Interim Update allows for15 inclusion of the increase in other associated taxes because of the increase in16 transmission plant additions. BTU’s payment in lieu of tax (“PILOT”) has increased17 because of plant additions. To determine the transmission portion of the PILOT, an18 effective rate was calculated based on the transmission PILOT approved in Docket19 No. 22616 divided by the transmission revenue requirement approved in that docket.20 The effective PILOT rate was applied to the transmission revenue requirement,21 excluding the PILOT component, which resulted in a transmission PILOT increase of22 $1,477,932 for BTU’s transmission system.23 20 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 862 DIRECT TESTIMONY 12 JILL A. SCHUEPBACH VII.UPDATED WHOLESALE TRANSMISSION RATE1 Q.PLEASE EXPLAIN THE WHOLESALE TRANSMISSION SERVICE RATE2 CALCULATION.3 4 5 6 7 8 A.The requested wholesale transmission service rate for BTU is equal to BTU’s updated transmission revenue requirement as shown in Schedule A divided by the most recent ERCOT 4CP of 70,981 MW pursuant to Docket No. 50333. BTU’s requested annual access wholesale transmission rate is $511.284 per average 4CP MW. VIII.SUMMARY AND RECOMMENDATIONS B.PLEASE SUMMARIZE THIS INTERIM-TCOS-RFP.9 A.In this filing, BTU requests approval of additions to and retirements from its10 transmission assets that occurred from January 1, 2018 through September 30, 2020.11 This Interim Update application includes schedules supporting gross plant in service,12 accumulated depreciation, depreciation expense, taxes other than income, and return13 on rate base. Since BTU’s previous Interim Update in 2018, Docket No. 48123, BTU’s14 invested transmission capital has increased.15 Q.WHAT DO YOU RECOMMEND?16 A.Pursuant to Commission 16 TAC § 25.192(h)(1), BTU is eligible for an update to its17 wholesale transmission service rates. This is BTU’s first request for an interim update18 in 2020. BTU has followed the provisions of the General Instructions for the Interim19 Update rate filing and Commission 16 TAC § 25.192(h)(1). The transmission plant20 additions included in the Interim Update are used and useful. I recommend the PUC21 approve BTU’s rate tariff as attached in Exhibit JAS-2 as filed.22 Q.DOES THAT CONCLUDE YOUR TESTIMONY?23 A.Yes.24 21 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 863 STATE OF COLORADO COUNTY OF JEFFERSON BEFORE ME, the undersigned authority, on this day personally appeared Jill A. Schuepbach who, having been placed under oath by me, did depose as follows: My name is Jill A. Schuepbach. I am of legal age and a resident of the State of Colorado. The foregoing testimony and exhibits offered by me, and the opinions stated therein are, to the best of my knowledge and belief, accurate, true, and correct. Ji fA. Schuepbach SUBSCRIBED AND SWORN TO BEFORE ME by the said Jill Schuepbach on this day of December, 2020. JENNIFER AGNES GIBBONS NOTARY PUBLIC STATE OF COLORADO NOTARY ID 20144006259 MY COMMISSION EXPIRES FEBRUARY 6,2022 DIRECT TESTIMONY NZry— 5fate otColorado 13 JILL A. SCHUEPBACH 22 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 864 Jill Schuepbach Executive Consultant jschuepbach@newgenstrategies.net Economics | Strategy | Stakeholders | Sustainability www.newgenstrategies.net Jill Schuepbach has been providing financial expertise to the utility industry for over 20 years. She has proven project management and analytical skills in the areas of utility cost of service and rate design, financial planning, economic and financial analysis, engineer of record, and pole attachment fees. In addition, Ms. Schuepbach has experience with feasibility studies, litigation support, and preparing expert witness testimony. Her project experience includes work for municipal, investor-owned, and member-owned utility clients. EDUCATION Master of Business Administration, University of Colorado Bachelor of Science in Mechanical Engineering, University of Missouri PROFESSIONAL REGISTRATIONS / CERTIFICATIONS Registered Professional Engineer (PE), Colorado KEY EXPERTISE Cost of Service and Rate Design Project Financing Engineer of Record Economic and Financial Analysis Litigation Support Pole Attachment Fees RELEVANT EXPERIENCE Financial Forecasts, Cost of Service and Rate Design Ms. Schuepbach has assisted with numerous utility financial forecasts, cost of service, and rate design projects. Financial Forecast tasks include developing models to balance capital spending and rate increases, support compliance with debt covenants, and assist with general short-term and long-term decision making. Cost of Service tasks include the development of the revenue requirement, functionalization and classification of costs, and allocation of costs to customer classes. Rate Design tasks include a review of existing customer class criteria, design, tariff development and transitioning of models for the client’s future use. Additional analyses include the evaluation of miscellaneous charges and fees based on the utility’s costs and local and state policy. She has assisted with training and workshops regarding cost of service and rate design theory, industry practice and rate strategies to governing bodies and boards. She has also presented rate study results and provided financial recommendations to governing bodies, boards, and city councils. She has performed electric, natural gas, and photovoltaic cost of service. Her efforts have also included support in contract negotiations in developing a rate to serve a large industrial load and unbundled transmission costs. Exhibit JAS-1 23 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 865 Jill Schuepbach Executive Consultant Thoughtful Decision Making for Uncertain Times 2 Ms. Schuepbach’s clients for cost of service and rate design services include: Brownsville Public Utilities Board, Texas Bryan Texas Utilities, Texas Estes Park, Colorado Farmington Electric Utilities System, New Mexico Glendale Water and Power, California GEUS, Texas Lafayette Public Power Authority, Louisiana Lafayette Utilities System, Louisiana Loup Power District, Nebraska Navajo Tribal Utility Authority, Arizona She has also evaluated energy consumption profiles, billing accuracy, base operations, contract terms, rate options, asset / facility upgrades (e.g., energy efficiency/demand response), distributed generation options, and tenant billing recovery for the US Army. Transmission Revenue Requirement Compliance Filings Ms. Schuepbach has assisted with multiple transmission rate filings at the Regional Transmission Organization (RTO) level and at Federal Energy Regulatory Commission (FERC) regarding Annual Transmission Revenue Requirements (ATRR), and methodologies for determining rates. Ms. Schuepbach’s clients include: Bryan Texas Utilities, Texas GEUS, Texas City of Garland Power and Light, Texas Independence Power & Light, Missouri Engineer of Record and Consulting Engineer Reports Ms. Schuepbach assists in the development of Consulting Engineer Reports and associated ordinance required reviews for municipal utilities. These reviews typically require an annual assessment of the utilities’ financial and physical operations for the duration of the bond period. The field review typically includes a determination of the condition of the physical assets of the utility, which also includes a review of the utilities budgeting and planning process. Ms. Schuepbach’s project experience includes: Lafayette Utilities System, Louisiana Lafayette Public Power Authority, Louisiana Economic and Financial Analysis Ms. Schuepbach has provided economic analyses for municipal utilities involving generation projects. These evaluations included reviewing the costs and operation of new generation units added to the existing generation resources and the economic analysis of the proposed generation on retail rates. Ms. Schuepbach assisted with the allocation of Hoover Power in Arizona, which included technical advice, reviewing customer applications for completion and accuracy and scenario analysis of the potential hydro power allocations. Her clients have included: Arizona Power Authority, Arizona Brownsville Public Utilities Board, Texas City of Bryan, Texas Lafayette Utilities System, Louisiana Litigation Support Ms. Schuepbach has assisted in litigation support and preparation of expert witness testimony in Texas, Louisiana, Missouri, and Indiana. Her testimony support is related to revenue requirements, cost of service and rate design as 24 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 866 Jill Schuepbach Executive Consultant 3 Thoughtful Decision Making for Uncertain Times well as the proper allocation of generation costs given a systems’ unique characteristics. Ms. Schuepbach’s litigation support clients include: Brownsville Public Utility Board, Texas: Docket Nos. 38556 & 32905 Bryan Texas Utilities, Texas: Docket Nos. 44467 and 41920 GEUS: Texas’ Dockets Nos. 45281 and 37180 Independence Power & Light, Missouri; Docket No. ER15-1499-001 Lafayette Utilities System, Louisiana; Docket No. 00994490 Northern Indiana Public Service Company, Indiana; Cause Nos. 44688, 44733, 45159 Indiana Michigan Power Company, Indiana, Cause No. 45235 Pole Attachment Fees Ms. Schuepbach has developed pole attachment fees for several clients. She has employed various methodologies including those recommended by the Federal Communications Commission (FCC) and the American Public Power Association (APPA). She has recommended rates for cable and communications companies based on the type of poles to which they are attached. Her work also includes a review of the contract or agreement between the utility and the customer. Her projects include: Farmington Electric Utilities System, New Mexico Keys Energy Services Navajo Tribal Utility Authority, Arizona Navopache Electric Cooperative WORKSHOPS AND PRESENTATIONS Ms. Schuepbach has given industry presentations focused on cost of service and ratemaking. Host organizations and the topics Ms. Schuepbach presented include: Electric Utility Consultants, Inc. Introduction to Cost of Service Concepts and Techniques for Electric Utilities Introduction to Rate Design for Electric Utilities California Public Utilities Commission Cost of Service Concepts for Electric Utilities 25 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 867 Record of Litigation Support and Testimony: Jill Schuepbach Testimony Utility Proceeding Subject Before Client Date 1.Orlando Utilities Commission Docket No. 010142 Demand Side Management Florida Public Service Commission Orlando Utilities Commission 2001 2.GEUS Docket No. 51556 Application to Change Rates for Wholesale Transmission Service: Full Filing Public Utility Commission of Texas GEUS (Greenville, Texas) 2020 26 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 868 Record of Litigation Support and Testimony: Jill Schuepbach Litigation Support Utility Proceeding Subject Before Client Date 1.Indiana Michigan Power Company Cause No. 45235 Petition of Indiana Michigan Power Company for authority to increase its rates and charges for electric utility service. Indiana Utility Regulatory Commission City of Fort Wayne, City of Marion, and Marion Municipal Utilities 2019 2.Northern Indiana Public Service Company Cause No. 45159 Rate Case: Cost of Service, Rate Design and new Industrial Rate Structure Indiana Utility Regulatory Commission United States Steel 2019 3.Bryan Texas Utilities Docket No. 48123 Application of Bryan Texas Utilities for Interim Update of Wholesale Transmission Rates Pursuant to Substantive Rule 25.192(g)(1) Public Utility Commission of Texas Bryan Texas Utilities 2018 4.Northern Indiana Public Service Company Cause No. 44733-TDSIC Transmission, Distribution, and Storage System Improvement Charge Indiana Utility Regulatory Commission United States Steel 2016 5.Northern Indiana Public Service Company Cause No. 44688 Rate Case: Cost of Service, Rate Design and Interruptible Demand Credits Indiana Utility Regulatory Commission United States Steel 2016 6.City of Independence (MO) Power and Light Docket No. ER15-1499- 001 Annual Transmission Revenue Requirement within SPP Federal Energy Regulatory Commission City of Independence (MO) Power and Light 2015 7.Bryan Texas Utilities Docket No. 44467 Application to Change Rates for Wholesale Transmission Service: Interim Filing Public Utility Commission of Texas Bryan Texas Utilities 2015 8.GEUS Docket No. 42581 Application to Change Rates for Wholesale Transmission Service: Full Filing Public Utility Commission of Texas GEUS (Greenville, Texas) 2014 9.Bryan Texas Utilities Docket No. 41920 Application to Change Rates for Wholesale Transmission Service: Interim Filing Public Utility Commission of Texas Bryan Texas Utilities 2013 10.Brownsville Public Utilities Board Docket No. 38556 Application to Change Rates for Wholesale Transmission Service: Full Filing Public Utility Commission of Texas Brownsville Public Utilities Board 2010 11.GEUS Docket No. 37180 Application to Change Rates for Wholesale Transmission Service: Full Filing Public Utility Commission of Texas GEUS (Greenville, Texas) 2009 12.Entergy Gulf States, Inc.Docket No. 00994490 Expropriation of Electric Distribution Facilities 15th Judicial District Court, Parish of Lafayette, Louisiana Lafayette Utilities System 2006 27 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 869 CITY OF BRYAN TARIFF FOR ELECTRIC SERVICE WHOLESALE TRANSMISSION SERVICE Effective Date: April 24, 2018________, 2021 Sheet No. 1 Revised: April 13, 2018 Revision: 98 Page 1 of 6 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ City of Bryan - Wholesale Transmission Service Tariff Availability To eligible Transmission Service Customers for Wholesale Transmission Service through the transmission system of the City of Bryan, whose municipally owned electric utility operates under the name of Bryan Texas Utilities (BTU), at all points where transmission facilities of adequate capacity and suitable voltage are available to provide service, in accordance with Public Utility Commission of Texas (PUC) Substantive Rules 25.191-.203. Application Applicable only to wholesale transactions involving the wholesale purchase of electric power and energy. This tariff for Wholesale Transmission Service is applicable to Transmission Service using any transmission facilities owned by BTU in accordance with PUC Substantive Rules 25.191-.203. Type of Service Three phase, 60 hertz alternating current, delivered onto or received from BTU’s transmission system at 60,000 volts or greater and on transmission facilities that have been prepared and made available for this service. Transmission Service Requirements As a condition to obtaining wholesale Transmission Service, the Transmission Service Customer shall comply with all requirements for initiating Transmission Service in accordance with PUC Substantive Rule 25.198, including the execution of an Interconnection Agreement with each Transmission Provider, and the Transmission Service Customer shall meet all Electric Reliability Council of Texas (ERCOT) requirements as specified in the ERCOT Protocols and Operating Guides. Exhibit JAS-2 28 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 870 CITY OF BRYAN TARIFF FOR ELECTRIC SERVICE WHOLESALE TRANSMISSION SERVICE Effective Date: April 24, 2018________, 2021 Sheet No. 1 Revised: April 13, 2018 Revision: 98 Page 2 of 6 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ City of Bryan - Wholesale Transmission Service Tariff Conditions Precedent for Receiving Service Subject to the terms and conditions hereof and of PUC Substantive Rule 25.198, BTU will provide wholesale Transmission Service to any eligible Transmission Service Customer, provided that: (A)the eligible Transmission Service Customer has completed an Application for Transmission Service, as provided under PUC Substantive Rule 25.198; (B)the eligible Transmission Service Customer and BTU, or a third party, have completed installation of all equipment specified under the Interconnection Agreement, consistent with NERC and ERCOT guidelines as set forth in PUC Substantive Rule 25.198; (C)the eligible Transmission Service Customer has executed an Interconnection Agreement for service under this tariff or, if necessary, requested in writing that BTU file a proposed unexecuted agreement with the Commission; (D)the eligible Transmission Service Customer has arranged for Ancillary Services necessary for the transaction; (E)each wholesale load for which wholesale Transmission Service is requested maintains a power factor of 95% or greater at each point of interconnection; (F)the Transmission Service Customer has constructed, maintains and operates the facilities on its side of each point of interconnection that are necessary to reliably interconnect and deliver power from a resource to BTU’s transmission system and from BTU’s transmission system to the Transmission Service Customer’s loads; (G)to the extent the Transmission Service requires the addition of facilities or upgrades to the transmission system, such facilities have been placed in service. 29 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 871 CITY OF BRYAN TARIFF FOR ELECTRIC SERVICE WHOLESALE TRANSMISSION SERVICE Effective Date: April 24, 2018________, 2021 Sheet No. 1 Revised: April 13, 2018 Revision: 98 Page 3 of 6 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ City of Bryan - Wholesale Transmission Service Tariff Application Procedures BTU and the Transmission Service Customer shall comply with the application procedures for Transmission Services set forth in PUC Substantive Rule 25.198, which shall govern such procedures. Construction of New Facilities Construction of new facilities needed to accommodate a request for Transmission Service shall be in accordance with the procedures set forth in PUC Substantive Rule 25.198. Upon receipt of a request for Transmission Service, BTU shall, if necessary, perform a System Security Study in accordance with PUC Substantive Rule 25.198. Based on the results of the System Security Study, BTU also may perform a Facilities Study, in accordance with PUC Substantive Rule 25.198. An executed Facilities Study agreement with the Transmission Service Customer is required prior to BTU performing a Facilities Study. In the event that existing facilities are inadequate to support the requested Transmission Service, BTU may require the Transmission Service Customer to provide a contribution in aid of construction attributable to directly assigned facilities. Load Shedding and Curtailment Transmission Service hereunder shall be subject to, and BTU and the Transmission Service Customer will comply with, the load shedding and curtailment procedures established under PUC Substantive Rule 25.200. Any interruption shall be based on operational factors and shall not accord a higher priority to BTU’s retail and wholesale customers than to its customers taking Transmission Service. Service to all customers shall be restored as quickly as possible. Pricing for Transmission Service Within ERCOT Charges for Transmission Service hereunder shall be in accordance with Texas Utility Code §35.004(d). For Transmission Service a Transmission Service Customer shall incur both an access charge, as set forth below, and loss compensation charges. Annual Access Fee – $441.779511.284 / MW of coincident peak demand determined in accordance with PUC Substantive Rule 25.192. I 30 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 872 CITY OF BRYAN TARIFF FOR ELECTRIC SERVICE WHOLESALE TRANSMISSION SERVICE Effective Date: April 24, 2018________, 2021 Sheet No. 1 Revised: April 13, 2018 Revision: 98 Page 4 of 6 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ City of Bryan - Wholesale Transmission Service Tariff Charges for each calendar year shall be adjusted pursuant to the schedule in the PUC’s Order approving the transmission charges for that year. Pricing for Transmission Service for Exports from ERCOT Charges for Transmission Service for exports from ERCOT shall be in accordance with Texas Utility Code § 35.004(d) and PUC Substantive Rule 25.192. Transmission Service Customers exporting power from ERCOT will be assessed transmission service charges for the use of the ERCOT transmission system, based on the amount of power actually exported and the duration of the transaction. Charges for Transmission Service for exports from ERCOT shall be determined in accordance with PUC Substantive Rule 25.192(e) and shall be calculated using the charges set forth below: Monthly Rate (June – September) Monthly Rate (October – May) $110.445127.821 per MW $36.81542.607 MW Weekly Rate (June – September) Weekly Rate (October – May) $25.34829.336 per MW $8.4969.832 per MW Daily Rate (June – September) Daily Rate (October – May) $3.6214.191 per MW $1.2101.401 per MW Hourly Rate (June – September) Hourly Rate (October – May) $0.1510.175 per MW $0.0500.058 per MW The Transmission Service Customer scheduling the export of power over a DC tie is solely responsible to BTU for payment of these transmission service charges. Charges for use of the ERCOT transmission system for export purposes on a monthly basis shall not exceed the annual transmission charge for the transaction. Wholesale exports from ERCOT are subject to the satisfaction of applicable requirements necessary to provide export service. Losses Losses shall be calculated by the Independent System Operator (ISO) in accordance with the method set forth in the ERCOT Protocols. I 31 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 873 CITY OF BRYAN TARIFF FOR ELECTRIC SERVICE WHOLESALE TRANSMISSION SERVICE Effective Date: April 24, 2018________, 2021 Sheet No. 1 Revised: April 13, 2018 Revision: 98 Page 5 of 6 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ City of Bryan - Wholesale Transmission Service Tariff Reliability Guidelines To maintain reliability of the ERCOT transmission grid, BTU shall operate its transmission system in accordance with ERCOT Protocols, ERCOT Operating Guides, NERC guidelines, and any other guidelines of the ISO that may apply to BTU’s transmission system. BTU reserves the right, consistent with good utility practice and on a non-discriminatory basis, to interrupt Transmission Service without liability on BTU’s part for the purpose of making necessary adjustments to, changes in, or repairs to its lines, substations and other facilities, or where the continuance of Transmission Service would endanger persons or property. In the event of any adverse condition or disturbance on BTU’s system or any other system directly or indirectly interconnected with BTU’s system, BTU, consistent with Good Utility Practice, also may interrupt Transmission Service on a non-discriminatory basis in order to limit the extent or damage of the adverse condition or disturbance, to prevent damage to generating or transmission facilities, or to expedite restoration of service. BTU will give the Transmission Service Customer as much advance notice as is practicable in the event of such interruption and shall restore service with due diligence. The Transmission Service Customer’s failure to respond to established emergency load shedding and curtailment procedures to relieve emergencies on BTU’s transmission system may result in the Transmission Service Customer being deemed by BTU to be in default and may result in the termination of Transmission Service. Payment Any charges due to BTU under this rate schedule shall be billed in accordance with PUC Substantive Rule 25.202. Customers shall make payment to BTU in a manner consistent with the procedures and deadlines set forth in PUC Substantive Rule 25.202. Any late payments by customers or customer defaults shall be handled in accordance with PUC Substantive Rule 25.202. Agreement An agreement for Transmission Service containing terms and provisions consistent with PUC Substantive Rules 25.191-.203 is required prior to commencement of such service. Such agreement will require approval of the City Council of Bryan. 32 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 874 CITY OF BRYAN TARIFF FOR ELECTRIC SERVICE WHOLESALE TRANSMISSION SERVICE Effective Date: April 24, 2018________, 2021 Sheet No. 1 Revised: April 13, 2018 Revision: 98 Page 6 of 6 _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ City of Bryan - Wholesale Transmission Service Tariff Definitions Capitalized terms shall have the meanings set forth in PUC Substantive Rules 25.5 and 25.191-.203. Amendments to Rules In the event PUC Substantive Rules 25.191-.203 are amended or if a new rule is adopted governing the subject matter of this tariff, this tariff shall, nevertheless, remain effective until the new tariff(s) filed pursuant to any such amendment(s) or such new rules are approved, unless the amendment(s) or new rules or an agreement of the parties provide otherwise. 33 DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 875 Schedule A (Interim): Summary of Interim Wholesale Transmission Cost of ServiceInterim Wholesale Transmission Cost of ServiceBryan Texas Utilities (BTU)Updated to September 30, 2020DescriptionTotalInterimInterimReferenceApprovedAnnual RevenueScheduleDocket 48123Increase Requirement(1)(2) (3) = (1) + (2)Revenue RequirementOperation & Maintenance $706,683$0 $706,683 Docket 22616Depreciation and Amortization$5,540,013 $1,322,877 $6,862,890 Schedule E-1Taxes Other Than Income Taxes $6,683,954 $1,477,932 $8,161,885 Schedule F-1Federal Income Tax $0$0$0Return on Rate Base$16,789,183 $3,770,733 $20,559,916 Schedule BTotal Revenue Requirement$29,719,831 $6,571,542 $36,291,373Other Revenues $0$0$0Docket 22616Total Revenue Requirement$29,719,831 $6,571,542 $36,291,373ERCOT AVERAGE 4 CP (kW) 67,273,101 70,980,872 Dockets 47777 and 50333Wholesale Rate $/kW$0.441779$0.511284DescriptionTariff RateTariff Rate$/kW$/MW(4)(5)Transmission Service within ERCOTAnnual Rate per kW0.511284$ 511.284$ Monthly Rate per kW 0.042607$ 42.607$ Transmission Service Exported from ERCOTMonthly Rates On-Peak 0.127821$ 127.821$ Monthly Rates Off-Peak 0.042607$ 42.607$ Weekly Rates On-Peak 0.029336$ 29.336$ Weekly Rates Off-Peak 0.009832$ 9.832$ Daily Rates On-Peak 0.004191$ 4.191$ Daily Rates Off-Peak 0.001401$ 1.401$ Hourly Rates On-Peak 0.000175$ 0.175$ Hourly Rates Off-Peak 0.000058$ 0.058$ 34DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191876 Schedule B (Interim): Summary of Interim Wholesale Transmission Rate Base Interim Wholesale Transmission Rate BaseBryan Texas Utilities (BTU)Updated to September 30, 2020Total BalanceIncrease inReferenceDescriptionApprovedas of end of Rate Base &SchedulesDocket 48123update periodReturn(1)(2)(3) = (2) - (1)Direct Assigned:FERC Accounts 350 - 362Original Plant In Service$181,125,306$226,911,509$45,786,203B-1(Accumulated Depreciation)($38,701,358)($52,286,595)($13,585,236) B-5Net Plant In Service$142,423,947$174,624,914$32,200,967Allocated Plant Accounts- Net *$436,032$436,032$0 Docket 22616CWIP *$0$0$0 Docket 22616Working Capital *$514,765$514,765$0 Docket 22616Plant Held for Future Use *$0$0$0 Docket 22616Reserve for Insurance *$0$0$0 Docket 22616Other *$0$0$0 Docket 22616Total Rate Base$143,374,744$175,575,711$32,200,967Rate of Return *11.71%11.71%11.71% Docket 22616Return on Rate Base$16,789,183$20,559,916$3,770,73335DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191877 Schedule B-1 (Interim): Change in Gross PlantInterim Wholesale Transmission PlantBryan Texas Utilities (BTU)Updated to September 30, 2020Account DescriptionBalanceJanuary 1, 2018 to September 30, 2018October 1, 2018 to September 30, 2019October 1, 2019 to September 30, 2020No.December 31, 2017Additions Retirements/AffiliateBalanceAdditions Retirements/AffiliateBalanceAdditions Retirements/AffiliateBalanceDocket 48123Adjustments ExpensesAdjustments ExpensesAdjustments Expenses (1) (2) (3) (4) (5) = (1) +…+(4) (6) (7) (8) (9) = (5) +…+(8) (10) (11) (12) (13) = (9) +…+(12)Gross PlantA350 Land and Land Rights$3,748,286$10,100 $0 $0$3,758,386$0 $0 $0$3,758,386$1,444,778 $0 $0$5,203,164A352 Structures and Improvements $6,045,327$118,663 $0 $0$6,163,990$517,844 $0 $0$6,681,834$10,583 $0 $0$6,692,417A353 Station Equipment$83,493,040$1,970,616 ($392,146) $0$85,071,511$112,602 $0 $0$85,184,113$20,126,509 $0 $0$105,310,621A354 Towers and Fixtures$0$0 $0 $0$0$0 $0 $0$0$0 $0 $0$0A355 Poles and Fixtures$57,258,404$27,892 ($13,127) $0$57,273,170$31,452 ($11,940) $0$57,292,682$5,236,416 ($14,437) $0$62,514,661A356 O.H. Conductors & Devices $26,134,317$3,470 $0 $0$26,137,787$211 $0 $0$26,137,997$12,321,613 ($31,224) $0$38,428,386A357 Underground Conduit$1,866,777$0 $0 $0$1,866,777$0 $0 $0$1,866,777($12,890) $0$1,853,886A358 Underground Conductors$2,172,888$1,759,065 ($473,500) $0$3,458,453$0 $0 $0$3,458,453$3,029,647 ($221,417) $0$6,266,683A359 Roads and Trails$406,267$2,888 $0 $0$409,154$232,131 $0 $0$641,286$406 $0 $0$641,692A360 Distribution above 60 kV$0$0 $0 $0$0$0 $0 $0$0$0 $0 $0$0A361 Distribution above 60 kV$0$0 $0 $0$0$0 $0 $0$0$0 $0 $0$0A362 Distribution above 60 kV$0$0 $0 $0$0$0 $0 $0$0$0 $0 $0$0Total Transmission Plant-Gross$181,125,306 $3,892,694 ($878,773) $0 $184,139,227 $894,240 ($11,940) $0 $185,021,527 $42,169,951 ($279,969) $0 $226,911,50936DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191878 Schedule B-5 (Interim): Change in Accumulated DepreciationInterim Wholesale Transmission Accumulated DepreciationBryan Texas Utilities (BTU)Updated to September 30, 2020AccountDescriptionBalance January 1, 2018 to September 30, 2018 October 1, 2018 to September 30, 2019 October 1, 2019 to September 30, 2020No.December 31, 2017 Depreciation Retirements/ Balance Depreciation Retirements/ Balance Depreciation Retirements/ BalanceDocket 48123 ExpenseAdjustmentsExpenseAdjustmentsExpenseAdjustments (1) (2) (3) (4) = (1)+(2)+(3) (5) (6) (7) = (4)+ (5)+(6) (5) (6) (7) = (4)+ (5)+(6)Accumulated Depreciation A350 Land and Land Rights$0$0 $0$0$0 $0$0$0 $0$0A352 Structures and Improvements$1,705,777$136,405 $0$1,842,182$186,214 $0$2,028,396$200,649 $0$2,229,045A353 Station Equipment$22,791,616$1,895,861 ($553,990)$24,133,487$2,552,590 $0$26,686,077$2,637,016 ($11,932)$29,311,162A354 Towers and Fixtures$0$0 $0$0$0 $0$0$0 $0$0A355 Poles and Fixtures$8,586,496$1,288,314 ($14,668)$9,860,142$1,718,244 ($17,697)$11,560,689$1,731,983 ($103,850)$13,188,821A356 O.H. Conductors & Devices$4,379,539$588,022 $0$4,967,561$784,134 $0$5,751,696$818,496 ($59,520)$6,510,672A357 Underground Conduit$772,085$42,002 $0$814,087$56,003 $0$870,091$55,971 ($12,890)$913,171A358 Underground Conductors$424,031$233,925 ($510,390)$147,566$103,754 $0$251,320$136,135 ($337,935)$49,519A359 Roads and Trails$41,814$9,148 $0$50,963$13,995 $0$64,957$19,248 $0$84,205A360 Distribution above 60 kV$0$0 $0$0$0 $0$0$0 $0$0A361 Distribution above 60 kV$0$0 $0$0$0 $0$0$0 $0$0A362 Distribution above 60 kV$0$0 $0$0$0 $0$0$0 $0$0Transmission Accumulated Depreciation$38,701,358 $4,193,678 ($1,079,048) $41,815,988 $5,414,934 ($17,697) $47,213,225 $5,599,498 ($526,128) $52,286,59537DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191879 Schedule E-1 (Interim): Change in Depreciation ExpenseInterim Wholesale Transmission Depreciation ExpenseBryan Texas Utilities (BTU)Updated to September 30, 2020Account DescriptionDepreciation Expense Gross Plant BalanceAccumulated Deprec. Net Plant Balance Depreciation Depreciation Increase inNo. December 31, 2017September 30, 2020September 30, 2020 September 30, 2020 % Expense DepreciationDocket 48123 (Schedule B-1, Column 13) (Schedule B-5, Column 10) in last TCOS on Balance Expense (1) (2) (3) (4) = (2) - (3) (5) (6) = (2) * (5) (7) = (6) - (1)Depreciation ExpenseA350 Land and Land Rights$0$5,203,164$0 $5,203,164 0.0% $0 $0A352 Structures and Improvements$181,360$6,692,417$2,229,045 $4,463,371 3.0% $200,772 $19,413A353 Station Equipment$2,504,791$105,310,621$29,311,162 $75,999,460 3.0% $3,159,319 $654,527A354 Towers and Fixtures$0$0$0$0 3.0% $0 $0A355 Poles and Fixtures$1,717,752$62,514,661$13,188,821 $49,325,840 3.0% $1,875,440 $157,688A356 O.H. Conductors & Devices$784,029$38,428,386$6,510,672 $31,917,714 3.0% $1,152,852 $368,822A357 Underground Conduit$56,003$1,853,886$913,171 $940,715 3.0% $55,617 ($387)A358 Underground Conductors$65,187$6,266,683$49,519 $6,217,164 3.0% $188,000 $122,814A359 Roads and Trails$0$641,692$84,205 $557,487 0.0% $0 $0A360 Distribution above 60 kV$0$0$0$0$0 $0A361 Distribution above 60 kV$0$0$0$0$0 $0A362 Distribution above 60 kV$0$0$0$0$0 $0Transmission Depreciation Expense$5,309,123$226,911,509$52,286,595 $174,624,914$6,632,000 $1,322,877General Plant Depreciation Expense$230,890$230,890Total Depreciation Expense$5,540,013$6,862,89038DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191880 Schedule F-1 (Interim): Change in Payment In Lieu Of TaxesInterim Wholesale Transmission Cost of ServiceBryan Texas Utilities (BTU)Updated to September 30, 2020Description Balance ReferenceSchedule(1) (2)Docket 22616PILOT Approved $1,131,098 Docket 22616TCOS Net of PILOT $3,898,267 Docket 22616Effective rate 29.02% Docket 22616Docket 48123PILOT Approved $6,683,954 Docket 48123TCOS Net of PILOT $23,035,878 Docket 48123Effective rate 29.02% Docket 22616TCOS Ending September 30, 2020Effective rate 29.02% Docket 22616TCOS Net of PILOT $28,129,488 Schedule APILOT Proposed$8,161,885 ProposedTCOS Ending September 30, 2020$8,161,885 ProposedDocket 48123 PILOT Approved$6,683,954 Docket 48123Increase in PILOT from Docket 48123$1,477,93239DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191881 Schedule A (Interim): Summary of Interim Wholesale Transmission Cost of Service: Docket No. 48123Interim Wholesale Transmission Cost of ServiceBryan Texas Utilities (BTU)Updated to December 31, 2017DescriptionTotal InterimInterimReferenceApprovedAnnual RevenueScheduleDocket 44467Increase Requirement(1)(2)(3) = (1) + (2)Revenue RequirementOperation & Maintenance $706,683N/A$706,683 Docket 22616Depreciation and Amortization$4,859,711$680,302 $5,540,013 Schedule E-1Taxes Other Than Income Taxes $6,045,197$638,756 $6,683,954 Schedule F-1Federal Income Tax N/AN/AN/AReturn on Rate Base$15,268,046$1,521,136 $16,789,183 Schedule BTotal Revenue Requirement$26,879,637 $2,840,194 $29,719,831Other Revenues $0$0$0Docket 22616Total Revenue Requirement$26,879,637 $2,840,194 $29,719,831ERCOT AVERAGE 4 CP-in kW 63,680,710 67,273,101 Dockets 43881 and 47777Wholesale Rate $/kW$0.4221000$0.441780040DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191882 Schedule B (Interim): Summary of Interim Wholesale Transmission Rate Base: Docket No. 48123Interim Wholesale Transmission Rate BaseBryan Texas Utilities (BTU)Updated to December 31, 2017Total BalanceIncrease in ReferenceDescriptionApprovedas of end of Rate Base & SchedulesDocket 44467 update periodReturn(1)(2)(3) = (2) - (1)Direct Assigned:FERC Accounts 350 - 362Original Plant In Service$158,207,382$181,125,306$22,917,923 B-1(Accumulated Depreciation)($28,773,496)($38,701,358) ($9,927,862) B-5Net Plant In Service$129,433,887 $142,423,947 $12,990,061Allocated Plant Accounts- Net *$436,032$436,032 $0 Docket 22616CWIP *$0$0$0 Docket 22616Working Capital *$514,765$514,765$0 Docket 22616Plant Held for Future Use *$0$0$0 Docket 22616Reserve for Insurance *$0$0$0 Docket 22616Other *$0$0$0 Docket 22616Total Rate Base$130,384,684 $143,374,744 $12,990,061Rate of Return *11.71%11.71%11.71% Docket 22616Return on Rate Base$15,268,046 $16,789,183 $1,521,13641DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191883 Schedule B-1 (Interim): Change in Gross Plant: Docket No. 48123Interim Wholesale Transmission PlantBryan Texas Utilities (BTU)Updated to December 31, 2017Account DescriptionBalanceJanuary 1, 2015 to September 30, 2015October 1, 2015 to September 30, 2016October 1, 2016 to September 30, 2017October 1, 2017 to December 31, 2017No.December 31, 2014Additions Retirements/Affiliate BalanceAdditions Retirements/Affiliate BalanceAdditions Retirements/Affiliate BalanceAdditions Retirements/Affiliate BalanceDocket 44467Adjustments ExpensesAdjustments ExpensesAdjustments ExpensesAdjustments Expenses (1) (2) (3) (4) (5) = (1) +…+(4) (6) (7) (8) (9) = (5) +…+(8) (10) (11) (12) (13) = (9) +…+(12) (14) (15) (16) (17) = (13) +…+(16)Gross PlantA350 Land and Land Rights$3,748,286 $0 $0 $0$3,748,286$0 $0 $0$3,748,286$0 $0 $0$3,748,286$0 $0 $0$3,748,286A352 Structures and Improvements$2,441,154 $0 $0 $0$2,441,154$259,476 $0 $0$2,700,630$2,725,524 $0 $0$5,426,154$619,172 $0 $0$6,045,327A353 Station Equipment$75,265,735 $1,139,537 $0 $0$76,405,272$1,461,732 $0 $0$77,867,004$6,331,037 ($705,000) $0$83,493,040$0 $0 $0$83,493,040A354 Towers and Fixtures$0 $0 $0 $0$0$0 $0 $0$0$0 $0 $0$0$0 $0 $0$0A355 Poles and Fixtures$51,102,686 $2,874,036 $0 $0$53,976,722$2,051,073 ($787,083) $0$55,240,712$2,799,531 ($781,838) $0$57,258,404$0 $0 $0$57,258,404A356 O.H. Conductors & Devices$22,786,910 $153,881 $0 $0$22,940,791$1,806,512 ($636,830) $0$24,110,473$2,647,907 ($624,063) $0$26,134,317$0 $0 $0$26,134,317A357 Underground Conduit$1,664,553 $0 $0 $0$1,664,553$0 $0 $0$1,664,553$445,859 ($243,636) $0$1,866,777$0 $0 $0$1,866,777A358 Underground Conductors$1,032,981 $0 $0 $0$1,032,981$0 $0 $0$1,032,981$1,264,694 ($124,787) $0$2,172,888$0 $0 $0$2,172,888A359 Roads and Trails$165,078 $0 $0 $0$165,078$38,913 $0 $0$203,991$202,276 $0 $0$406,267$0 $0 $0$406,267A360 Distribution above 60 kV$0 $0 $0 $0$0$0 $0 $0$0$0 $0 $0$0$0 $0 $0$0A361 Distribution above 60 kV$0 $0 $0 $0$0$0 $0 $0$0$0 $0 $0$0$0 $0 $0$0A362 Distribution above 60 kV$0 $0 $0 $0$0$0 $0 $0$0$0 $0 $0$0$0 $0 $0$0Transmission Plant-Gross$158,207,382 $4,167,455 $0 $0 $162,374,837 $5,617,706 ($1,423,913) $0 $166,568,630 $16,416,827 ($2,479,324) $0 $180,506,133 $619,172 $0 $0 $181,125,30642DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191884 Schedule B-5 (Interim): Change in Accumulated Depreciation: Docket No. 48123Interim Wholesale Transmission Accumulated DepreciationBryan Texas Utilities (BTU)Updated to December 31, 2017Account DescriptionBalance January 1, 2015 to September 30, 2015 October 1, 2015 to September 30, 2016 October 1, 2016 to September 30, 2017 October 1, 2017 to December 31, 2017 Increase InNo.December 31, 2014 Depreciation Retirements/ Balance Depreciation Retirements/ Balance Depreciation Retirements/ Balance Depreciation Retirements/ BalanceAccumulated Docket 44467 Expense AdjustmentsExpense AdjustmentsExpense AdjustmentsExpense AdjustmentsDepreciation (1)(2) (3) (4) = (1)+(2)+(3) (5) (6) (7) = (4)+ (5)+(6) (5)(6) (7) = (4)+ (5)+(6) (8) (9) (10) = (7)+(8)+(9) (11)Accumulated Depreciation A350 Land and Land Rights$0 $0 $0$0$0 $0$0$0.00 $0.00$0$0 $0$0 $0A352 Structures and Improvements$1,435,104 $54,926 $0$1,490,030$75,955 $0$1,565,984$93,180.46 $5,915.54$1,665,080$40,696 $0$1,705,777 $270,673A353 Station Equipment$16,627,553 $1,699,608 $0$18,327,161$2,299,488 $0$20,626,649$2,396,760.39 ($857,990.72)$22,165,419$626,198 $0$22,791,616 $6,164,063A354 Towers and Fixtures$0 $0 $0$0$0 $0$0$0.00 $0.00$0$0 $0$0 $0A355 Poles and Fixtures$5,586,214 $1,152,522 $0$6,738,736$1,650,880 ($891,385)$7,498,231$1,676,180.95 ($1,017,354.23)$8,157,058$429,438 $0$8,586,496 $3,000,282A356 O.H. Conductors & Devices$3,747,546 $514,601 $0$4,262,147$719,823 ($741,132)$4,240,838$741,620.92 ($798,926.60)$4,183,532$196,007 $0$4,379,539 $631,993A357 Underground Conduit$898,901 $37,452 $0$936,353$49,937 $0$986,290$49,936.56 ($278,142.40)$758,084$14,001 $0$772,085 ($126,816)A358 Underground Conductors$455,287 $23,242 $0$478,529$30,989 $0$509,518$40,677.52 ($142,460.90)$407,735$16,297 $0$424,031 ($31,255)A359 Roads and Trails$22,892 $3,714 $0$26,606$5,536 $0$32,142$6,625.45 $0.00$38,767$3,047 $0$41,814 $18,923A360 Distribution above 60 kV$0 $0 $0$0$0 $0$0$0.00 $0.00$0$0 $0$0 $0A361 Distribution above 60 kV$0 $0 $0$0$0 $0$0$0.00 $0.00$0$0 $0$0 $0A362 Distribution above 60 kV$0 $0 $0$0$0 $0$0$0.00 $0.00$0$0 $0$0 $0Transmission Accumulated Depreciation$28,773,496 $3,486,066 $0 $32,259,562 $4,832,607 ($1,632,518) $35,459,652 $5,004,982 ($3,088,959) $37,375,675 $1,325,684 $0 $38,701,358 $9,927,86243DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191885 Schedule E-1 (Interim): Change in Depreciation Expense: Docket No. 48123Interim Wholesale Transmission Depreciation ExpenseBryan Texas Utilities (BTU)Updated to December 31, 2017AccountDescriptionDepreciation Expense Gross Plant BalanceAccumulated Deprec. Net Plant Balance Depreciation Depreciation Increase inNo. December 31, 2014December 31, 2017December 31, 2017 December 31, 2017 % Expense DepreciationDocket 44467 (Schedule B-1, Column 13) (Schedule B-5, Column 10) in last TCOS on Balance Expense (1) (2) (3) (4) = (2) - (3) (5) (6) = (2) * (5) (7) = (6) - (1)Depreciation ExpenseA350 Land and Land Rights$0$3,748,286 $0 $3,748,2860.0%$0 $0A352 Structures and Improvements$73,235$6,045,327 $1,705,777 $4,339,5503.0%$181,360 $108,125A353 Station Equipment$2,257,972$83,493,040 $22,791,616 $60,701,4243.0%$2,504,791 $246,819A354 Towers and Fixtures$0$0 $0 $03.0%$0 $0A355 Poles and Fixtures$1,533,081$57,258,404 $8,586,496 $48,671,9093.0%$1,717,752 $184,672A356 O.H. Conductors & Devices$683,607$26,134,317 $4,379,539 $21,754,7773.0%$784,029 $100,422A357 Underground Conduit$49,937$1,866,777 $772,085 $1,094,6923.0%$56,003 $6,067A358 Underground Conductors$30,989$2,172,888 $424,031 $1,748,8573.0%$65,187 $34,197A359 Roads and Trails$0$406,267 $41,814 $364,4530.0%$0 $0A360 Distribution above 60 kV$0$0 $0 $0 $0 $0A361 Distribution above 60 kV$0$0 $0 $0 $0 $0A362 Distribution above 60 kV$0$0 $0 $0 $0 $0Transmission Depreciation Expense$4,628,821$181,125,306$38,701,358 $142,423,947$5,309,123 $680,302General Plant Depreciation Expense$230,890$230,890Total Depreciation Expense$4,859,711$5,540,01344DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191886 Schedule F-1 (Interim): Change in Payment In Lieu Of Taxes: Docket No. 48123Interim Wholesale Transmission Cost of ServiceBryan Texas Utilities (BTU)Updated to December 31, 2017Description Balance ReferenceSchedule(1) (2)Docket 22616PILOT Approved $1,131,098 Docket 22616TCOS Net of PILOT $3,898,267 Docket 22616Effective rate 29.02% Docket 22616Docket 44467PILOT Approved $6,045,197 Docket 44467TCOS Net of PILOT $20,834,440 Docket 44467Effective rate 29.02% Docket 22616TCOS Ending December 31, 2017Effective rate 29.02% Docket 22616TCOS Net of PILOT $23,035,878 Schedule APILOT Proposed$6,683,954 ProposedTCOS Ending December 31, 2017$6,683,954 ProposedDocket 44467 PILOT Approved$6,045,197 Docket 44467Increase in PILOT from Docket 44467$638,75645DocuSign Envelope ID: EA4AA3B2-6ABB-4501-BF57-E19983335271DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191887 CITY OF DENTON REQUEST FOR QUALIFICATIONS: #7532 PUCT TRANSMISSION COST OF SERVICE RATE FILING SERVICES COST ESTIMATE JANUARY 15, 2021 Submitted by: Exhibit C DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 888 DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 889 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 Thoughtful Decision Making for Uncertain Times 1 COST ESTIMATE NewGen proposes the following fee schedule for Phase 1, Task A: Phase 1: Development of Interim-TCOS-RFP and Full-TCOS-RFP Task A: Rate Analysis and Filing Cost Estimate Task A.1: Interim-TCOS-RFP, which includes the following tasks: Task A.1.1: Data Request and Review Task A.1.2: Revenue Requirement and Schedule Development Task A.1.3: Prepare Rate Filing Package by July 2021 Task A.1 Subtotal $20,000 Task A.2: Full-TCOS-RFP, which includes the following tasks: Task A.2.1: Data Request and Review Task A.2.2: Test Year Revenue Requirement Task A.2.3: Functionalization Factors Task A.2.4: Rate of Return Analysis and Strategies Task A.2.5: Schedules and Workpapers Task A.2.6: Prepare Rate Filing Package by November 2021 Task A.2 Subtotal $75,000 Task A Total $95,000 The cost associated with this scope of services will be based on the hourly billing rates of the project team, including the reimbursement of expenses at cost. We initially estimate the cost associated for Task A.1 to be $20,000 and Task A.2 to be $75,000 for a total of $95,000 for Task A. Total cost excludes travel- related expenses. Once the interim or full rate case is filed, the process can vary depending on the progress of the case, and because of this we cannot predict the work effort required to successfully complete the assignment. Therefore, we will assist the Legal Team as directed to support the filing. Our work efforts will likely be responding to questions by the Commission staff. If parties intervene, the process may become more complex. Accordingly, we have not developed a cost estimate for Task A Phase 2, and would invoice Denton on a time and materials basis. The level of effort for Tasks B, C, and D is unknown at this time and we propose to bill Denton based on time and materials. Once the scope of Tasks B, C, and D is known, we will provide Denton an estimate for approval before work is performed. DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 890 CITY OF DENTON, TX PUCT TCOS RATE FILING SERVICES RFQ #: 7532 2 Thoughtful Decision Making for Uncertain Times Billing rates are set forth as follows: NewGen Strategies and Solutions 2021 Billing Rates Position Hourly Billing Rate President / Managing Director / Director $230 - $360 Executive Consultant $220 - $320 Senior Consultant $190 - $220 Consultant $135 - $150 Administrative Services $110 Note: Billing rates are subject to change based on annual reviews and salary increases. DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 891 Exhibit D Bidder's attention is directed to the insurance requirements below. It is highly recommended that bidders confer with their respective insurance carriers or brokers to determine in advance of Bid submission the availability of insurance certificates and endorsements as prescribed and provided herein. If an apparent low bidder fails to comply strictly with the insurance requirements, that bidder may be disqualified from award of the contract. Upon bid award, all insurance requirements shall become contractual obligations, which the successful bidder shall have a duty to maintain throughout the course of this contract. STANDARD PROVISIONS: Without limiting any of the other obligations or liabilities of the Contractor, the Contractor shall provide and maintain until the contracted work has been completed and accepted by the City of Denton, Owner, the minimum insurance coverage as indicated hereinafter. As soon as practicable after notification of bid award, Contractor shall file with the Purchasing Department satisfactory certificates of insurance, containing the bid number and title of the project. Contractor may, upon written request to the Purchasing Department, ask for clarification of any insurance requirements at any time; however, Contractors are strongly advised to make such requests prior to bid opening, since the insurance requirements may not be modified or waived after bid opening unless a written exception has been submitted with the bid. Contractor shall not commence any work or deliver any material until he or she receives notification that the contract has been accepted, approved, and signed by the City of Denton. All insurance policies proposed or obtained in satisfaction of these requirements shall comply with the following general specifications, and shall be maintained in compliance with these general specifications throughout the duration of the Contract, or longer, if so noted:  Each policy shall be issued by a company authorized to do business in the State of Texas with an A.M. Best Company rating of at least A- VII or better.  Any deductibles or self-insured retentions shall be declared in the bid proposal. If requested by the City, the insurer shall reduce or eliminate such deductibles or self-insured retentions with respect to the City, its officials, agents, employees and volunteers; or, the contractor shall procure a bond guaranteeing payment of losses and related investigations, claim administration and defense expenses.  Liability policies shall be endorsed to provide the following:  Name as additional insured the City of Denton, its Officials, Agents, Employees and volunteers. DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 892  That such insurance is primary to any other insurance available to the additional insured with respect to claims covered under the policy and that this insurance applies separately to each insured against whom claim is made or suit is brought. The inclusion of more than one insured shall not operate to increase the insurer's limit of liability.  Provide a Waiver of Subrogation in favor of the City of Denton, its officials, agents, employees, and volunteers.  Cancellation: City requires 30 day written notice should any of the policies described on the certificate be cancelled before the expiration date.  Should any of the required insurance be provided under a claims-made form, Contractor shall maintain such coverage continuously throughout the term of this contract and, without lapse, for a period of three years beyond the contract expiration, such that occurrences arising during the contract term which give rise to claims made after expiration of the contract shall be covered.  Should any of the required insurance be provided under a form of coverage that includes a general annual aggregate limit providing for claims investigation or legal defense costs to be included in the general annual aggregate limit, the Contractor shall either double the occurrence limits or obtain Owners and Contractors Protective Liability Insurance.  Should any required insurance lapse during the contract term, requests for payments originating after such lapse shall not be processed until the City receives satisfactory evidence of reinstated coverage as required by this contract, effective as of the lapse date. If insurance is not reinstated, City may, at its sole option, terminate this agreement effective on the date of the lapse. SPECIFIC ADDITIONAL INSURANCE REQUIREMENTS: All insurance policies proposed or obtained in satisfaction of this Contract shall additionally comply with the following marked specifications, and shall be maintained in compliance with these additional specifications throughout the duration of the Contract, or longer, if so noted: [X ] A. General Liability Insurance: General Liability insurance with combined single limits of not less than $1,000,000.00 shall be provided and maintained by the Contractor. The policy shall be written on an occurrence basis either in a single policy or in a combination of underlying and umbrella or excess policies. If the Commercial General Liability form (ISO Form CG 0001 current edition) is used:  Coverage A shall include premises, operations, products, and completed operations, independent contractors, contractual liability covering this contract and broad form property damage coverage.  Coverage B shall include personal injury. DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 893  Coverage C, medical payments, is not required. If the Comprehensive General Liability form (ISO Form GL 0002 Current Edition and ISO Form GL 0404) is used, it shall include at least:  Bodily injury and Property Damage Liability for premises, operations, products and completed operations, independent contractors and property damage resulting from explosion, collapse or underground (XCU) exposures.  Broad form contractual liability (preferably by endorsement) covering this contract, personal injury liability and broad form property damage liability. [X] Automobile Liability Insurance: Contractor shall provide Commercial Automobile Liability insurance with Combined Single Limits (CSL) of not less than $500,000.00 either in a single policy or in a combination of basic and umbrella or excess policies. The policy will include bodily injury and property damage liability arising out of the operation, maintenance and use of all automobiles and mobile equipment used in conjunction with this contract. Satisfaction of the above requirement shall be in the form of a policy endorsement for:  any auto, or  all owned, hired and non-owned autos. [X] Workers’ Compensation Insurance Contractor shall purchase and maintain Worker's Compensation insurance which, in addition to meeting the minimum statutory requirements for issuance of such insurance, has Employer's Liability limits of at least $100,000 for each accident, $100,000 per each employee, and a $500,000 policy limit for occupational disease. The City need not be named as an "Additional Insured" but the insurer shall agree to waive all rights of subrogation against the City, its officials, agents, employees and volunteers for any work performed for the City by the Named Insured. For building or construction projects, the Contractor shall comply with the provisions of Attachment 1 in accordance with §406.096 of the Texas Labor Code and rule 28TAC 110.110 of the Texas Worker's Compensation Commission (TWCC). [ ] Owner's and Contractor's Protective Liability Insurance The Contractor shall obtain, pay for and maintain at all times during the prosecution of the work under this contract, an Owner's and Contractor's Protective Liability insurance policy naming the City as insured for property damage and bodily injury which may arise in the prosecution of the work or Contractor's operations under this contract. Coverage shall be on an "occurrence" basis, and the policy shall be issued by the same insurance company DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 894 that carries the Contractor's liability insurance. Policy limits will be at least combined bodily injury and property damage per occurrence with a aggregate. [X] Professional Liability Insurance Professional liability insurance with limits not less than $1,000,000 per claim with respect to negligent acts, errors or omissions in connection with professional services is required under this Agreement. [ ] Builders' Risk Insurance Builders' Risk Insurance, on an All-Risk form for 100% of the completed value shall be provided. Such policy shall include as "Named Insured" the City of Denton and all subcontractors as their interests may appear. [ ] Commercial Crime Provides coverage for the theft or disappearance of cash or checks, robbery inside/outside the premises, burglary of the premises, and employee fidelity. The employee fidelity portion of this coverage should be written on a “blanket” basis to cover all employees, including new hires. This type insurance should be required if the contractor has access to City funds. Limits of not less than each occurrence are required. [ ] Additional Insurance Other insurance may be required on an individual basis for extra hazardous contracts and specific service agreements. If such additional insurance is required for a specific contract, that requirement will be described in the "Specific Conditions" of the contract specifications. DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 895 ATTACHMENT 1 [ ] Workers’ Compensation Coverage for Building or Construction Projects for Governmental Entities A. Definitions: Certificate of coverage ("certificate")-A copy of a certificate of insurance, a certificate of authority to self-insure issued by the commission, or a coverage agreement (TWCC- 81, TWCC-82, TWCC-83, or TWCC-84), showing statutory workers' compensation insurance coverage for the person's or entity's employees providing services on a project, for the duration of the project. Duration of the project - includes the time from the beginning of the work on the project until the contractor's/person's work on the project has been completed and accepted by the governmental entity. Persons providing services on the project ("subcontractor" in §406.096) - includes all persons or entities performing all or part of the services the contractor has undertaken to perform on the project, regardless of whether that person contracted directly with the contractor and regardless of whether that person has employees. This includes, without limitation, independent contractors, subcontractors, leasing companies, motor carriers, owner-operators, employees of any such entity, or employees of any entity which furnishes persons to provide services on the project. "Services" include, without limitation, providing, hauling, or delivering equipment or materials, or providing labor, transportation, or other service related to a project. "Services" does not include activities unrelated to the project, such as food/beverage vendors, office supply deliveries, and delivery of portable toilets. B. The contractor shall provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any overage agreements, which meets the statutory requirements of Texas Labor Code, Section 401.011(44) for all employees of the Contractor providing services on the project, for the duration of the project. C. The Contractor must provide a certificate of coverage to the governmental entity prior to being awarded the contract. D. If the coverage period shown on the contractor's current certificate of coverage ends during the duration of the project, the contractor must, prior to the end of the coverage period, file a new certificate of coverage with the governmental entity showing that coverage has been extended. E. The contractor shall obtain from each person providing services on a project, and provide to the governmental entity: 1) a certificate of coverage, prior to that person beginning work on the project, so the governmental entity will have on file certificates of coverage showing coverage for all persons providing services on the project; and DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 896 2) no later than seven days after receipt by the contractor, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project. F. The contractor shall retain all required certificates of coverage for the duration of the project and for one year thereafter. G. The contractor shall notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the contractor knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project. H. The contractor shall post on each project site a notice, in the text, form and manner prescribed by the Texas Workers' Compensation Commission, informing all persons providing services on the project that they are required to be covered, and stating how a person may verify coverage and report lack of coverage. I. The contractor shall contractually require each person with whom it contracts to provide services on a project, to: 1) provide coverage, based on proper reporting of classification codes and payroll amounts and filing of any coverage agreements, which meets the statutory requirements of Texas Labor Code, Section 401.011(44) for all of its employees providing services on the project, for the duration of the project; 2) provide to the contractor, prior to that person beginning work on the project, a certificate of coverage showing that coverage is being provided for all employees of the person providing services on the project, for the duration of the project; 3) provide the contractor, prior to the end of the coverage period, a new certificate of coverage showing extension of coverage, if the coverage period shown on the current certificate of coverage ends during the duration of the project; 4) obtain from each other person with whom it contracts, and provide to the contractor: a) certificate of coverage, prior to the other person beginning work on the project; and b) a new certificate of coverage showing extension of coverage, prior to the end of the coverage period, if the coverage period shown on the current certificate of coverage ends during the duration of the project; 5) retain all required certificates of coverage on file for the duration of the project and for one year thereafter; 6) notify the governmental entity in writing by certified mail or personal delivery, within 10 days after the person knew or should have known, of any change that materially affects the provision of coverage of any person providing services on the project; and DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 897 7) Contractually require each person with whom it contracts, to perform as required by paragraphs (1) - (7), with the certificates of coverage to be provided to the person for whom they are providing services. J. By signing this contract or providing or causing to be provided a certificate of coverage, the contractor is representing to the governmental entity that all employees of the contractor who will provide services on the project will be covered by workers' compensation coverage for the duration of the project, that the coverage will be based on proper reporting of classification codes and payroll amounts, and that all coverage agreements will be filed with the appropriate insurance carrier or, in the case of a self- insured, with the commission's Division of Self-Insurance Regulation. Providing false or misleading information may subject the contractor to administrative penalties, criminal penalties, civil penalties, or other civil actions. K. The contractor’s failure to comply with any of these provisions is a breach of contract by the contractor which entitles the governmental entity to declare the contract void if the contractor does not remedy the breach within ten days after receipt of notice of breach from the governmental entity. DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 898 CONFLICT OF INTEREST QUESTIONNAIRE CONFLICT OF INTEREST QUESTIONNAIRE - FORM CIQ For vendor or other person doing business with local governmental entity This questionnaire reflects changes made to the law by H.B. 23, 84th Leg., Regular Session. This questionnaire is being filed in accordance with Chapter 176, Local Government Code, by a vendor who has a business relationship as defined by Section 176.001(1-a) with a local governmental entity and the vendor meets requirements under Section 176.006(a). By law this questionnaire must be filed with the records administrator of the local government entity not later than the 7th business day after the date the vendor becomes aware of facts that require the statement to be filed. See Section 176.006(a-1), Local Government Code. A vendor commits an offense if the vendor knowingly violates Section 176.006, Local Government Code. An offense under this section is a misdemeanor. 1 Name of vendor who has a business relationship with local governmental entity. 2 Check this box if you are filing an update to a previously filed questionnaire. (The law requires that you file an updated completed questionnaire with the appropriate filing authority not later than the 7th business day after the date on which you became aware that the originally filed questionnaire was incomplete or inaccurate.) 3 Name of local government officer about whom the information in this section is being disclosed. Name of Officer This section, (item 3 including subparts A, B, C & D), must be completed for each officer with whom the vendor has an employment or other business relationship as defined by Section 176.001(1-a), Local Government Code. Attach additional pages to this Form CIQ as necessary. A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the vendor? Yes No B. Is the vendor receiving or likely to receive taxable income, other than investment income, from or at the direction of the local government officer named in this section AND the taxable income is not received from the local governmental entity? Yes No C. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer serves as an officer or director, or holds an ownership of one percent or more? Yes No D. Describe each employment or business and family relationship with the local government officer named in this section. 4 I have no Conflict of Interest to disclose. 5 Signature of vendor doing business with the governmental entity Date NewGen Strategies and Solutions, LLC N/A X X X N/A DocuSign Envelope ID: 934167DD-0E69-4EDF-99B7-80397C61F620 12/17/2020 Exhibit E DocuSign Envelope ID: 7E461519-C4A0-4267-88EB-BE1F02954191 899 Certificate Of Completion Envelope Id: 7E461519C4A0426788EBBE1F02954191 Status: Sent Subject: Please DocuSign: City Council Contract 7532 PUCT Rate Filing Services Source Envelope: Document Pages: 214 Signatures: 3 Envelope Originator: Certificate Pages: 6 Initials: 1 Christa Christian AutoNav: Enabled EnvelopeId Stamping: Enabled Time Zone: (UTC-06:00) Central Time (US & Canada) 901B Texas Street Denton, TX 76209 Christa.Christian@cityofdenton.com IP Address: 198.49.140.104 Record Tracking Status: Original 1/22/2021 9:30:58 AM Holder: Christa Christian Christa.Christian@cityofdenton.com Location: DocuSign Signer Events Signature Timestamp Christa Christian christa.christian@cityofdenton.com Senior Buyer City of Denton Security Level: Email, Account Authentication (None) Completed Using IP Address: 198.49.140.104 Sent: 1/22/2021 9:40:53 AM Viewed: 1/22/2021 9:41:12 AM Signed: 1/22/2021 9:42:05 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Lori Hewell lori.hewell@cityofdenton.com Purchasing Manager City of Denton Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 198.49.140.104 Sent: 1/22/2021 9:42:08 AM Viewed: 1/22/2021 10:04:43 AM Signed: 1/22/2021 10:06:07 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Larry Collister larry.collister@cityofdenton.com First Assistant City Attorney City of Denton Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 47.184.80.203 Sent: 1/22/2021 10:06:10 AM Viewed: 1/24/2021 7:23:10 PM Signed: 1/27/2021 7:50:31 AM Electronic Record and Signature Disclosure: Accepted: 9/26/2017 2:27:28 PM ID: 01f5f868-f109-4e29-ad49-21db9046c882 Joseph Mancinelli jmancinelli@newgenstrategies.net Director Security Level: Email, Account Authentication (None)Signature Adoption: Pre-selected Style Using IP Address: 73.243.28.139 Sent: 1/27/2021 7:50:35 AM Viewed: 1/27/2021 10:34:39 AM Signed: 1/27/2021 4:21:04 PM Electronic Record and Signature Disclosure: Accepted: 1/27/2021 10:34:39 AM ID: 35d09002-1dc0-462d-94e4-598f5ec06fe6 900 Signer Events Signature Timestamp Terrance Naulty Terrance.Naulty@cityofdenton.com Asst. General Manager City of Denton Security Level: Email, Account Authentication (None) Signature Adoption: Pre-selected Style Using IP Address: 198.49.140.104 Sent: 1/29/2021 7:53:19 AM Viewed: 1/29/2021 8:21:05 AM Signed: 1/29/2021 8:21:33 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Cheyenne Defee cheyenne.defee@cityofdenton.com Contract Administrator City of Denton Security Level: Email, Account Authentication (None) Sent: 1/29/2021 8:21:37 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Todd Hileman Todd.Hileman@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Accepted: 7/25/2017 11:02:14 AM ID: 57619fbf-2aec-4b1f-805d-6bd7d9966f21 Rosa Rios rosa.rios@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign In Person Signer Events Signature Timestamp Editor Delivery Events Status Timestamp Agent Delivery Events Status Timestamp Intermediary Delivery Events Status Timestamp Certified Delivery Events Status Timestamp Carbon Copy Events Status Timestamp Cheyenne Defee cheyenne.defee@cityofdenton.com Contract Administrator City of Denton Security Level: Email, Account Authentication (None) Sent: 1/22/2021 9:42:08 AM Electronic Record and Signature Disclosure: Not Offered via DocuSign Sherri Thurman sherri.thurman@cityofdenton.com City of Denton Security Level: Email, Account Authentication (None) Sent: 1/29/2021 8:21:36 AM Electronic Record and Signature Disclosure: 901 Carbon Copy Events Status Timestamp Not Offered via DocuSign Gretna Jones gretna.jones@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Zolina Parker zolina.parker@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Juan Pagoada-Reyes juan.pagoada-reyes@cityofdenton.com Security Level: Email, Account Authentication (None) Electronic Record and Signature Disclosure: Not Offered via DocuSign Antonio Puente Antonio.Puente@cityofdenton.com Exec Mgr of Utilities Security Level: Email, Account Authentication (None) Sent: 1/27/2021 4:21:08 PM Electronic Record and Signature Disclosure: Not Offered via DocuSign Witness Events Signature Timestamp Notary Events Signature Timestamp Envelope Summary Events Status Timestamps Envelope Sent Hashed/Encrypted 1/22/2021 9:40:53 AM Payment Events Status Timestamps Electronic Record and Signature Disclosure 902 ELECTRONIC RECORD AND SIGNATURE DISCLOSURE From time to time, City of Denton (we, us or Company) may be required by law to provide to you certain written notices or disclosures. 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Electronic Record and Signature Disclosure created on: 7/21/2017 3:59:03 PM Parties agreed to: Larry Collister, Joseph Mancinelli, Todd Hileman 903 How to contact City of Denton: You may contact us to let us know of your changes as to how we may contact you electronically, to request paper copies of certain information from us, and to withdraw your prior consent to receive notices and disclosures electronically as follows: To contact us by email send messages to: purchasing@cityofdenton.com To advise City of Denton of your new e-mail address To let us know of a change in your e-mail address where we should send notices and disclosures electronically to you, you must send an email message to us at melissa.kraft@cityofdenton.com and in the body of such request you must state: your previous e-mail address, your new e-mail address. We do not require any other information from you to change your email address.. 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Further, if you consent to receiving notices and disclosures exclusively in electronic format on the terms and conditions described above, please let us know by clicking the 'I agree' button below. By checking the 'I Agree' box, I confirm that: • I can access and read this Electronic CONSENT TO ELECTRONIC RECEIPT OF ELECTRONIC RECORD AND SIGNATURE DISCLOSURES document; and • I can print on paper the disclosure or save or send the disclosure to a place where I can print it, for future reference and access; and • Until or unless I notify City of Denton as described above, I consent to receive from exclusively through electronic means all notices, disclosures, authorizations, acknowledgements, and other documents that are required to be provided or made available to me by City of Denton during the course of my relationship with you. 905 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 20-1635,Version:1 AGENDA CAPTION Consider approval of a resolution of the City of Denton adopting an Economic Development Strategic Plan; and providing an effective date. The Economic Development Partnership Board recommends approval (8-0). City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™906 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Economic Development ACM/CFO: David Gaines DATE: February 9, 2021 SUBJECT Consider approval of a resolution of the City of Denton adopting an Economic Development Strategic Plan; and providing an effective date. The Economic Development Partnership Board recommends approval (8-0). BACKGROUND In 2019, the City engaged economic development consulting firm TIP Strategies to lead Denton’s comprehensive economic development strategic planning process. Since November 2019, staff and the TIP team have worked together to develop a strategic plan for economic development that outlines a specific vision for Denton, as well as the strategies and tactics to bring the vision to fruition. Community members and various internal and external stakeholders were engaged throughout the process, with the Economic Development Partnership Board serving as the primary steering committee. The plan is representative of the input received through the engagement process, which included City Council, EDPB, Denton Chamber of Commerce, Denton Young Professionals, real estate professionals and local developers, industry representatives, education and workforce professionals, and entrepreneurs. In addition, City of Denton and Denton County economic development staff, and staff from the City’s Development Services, Capital Projects, Electric, and utility departments have provided valuable feedback. Due to the cancellation of planned community meetings as a result of the COVID-19 pandemic, staff posted the Plan on a dedicated webpage and allowed for an online public comment period (July 1 to July 31) to engage the community at-large in the planning process. The EDPB also reviewed the draft plan at the June 24, July 8, and August 12, 2020 meetings. The plan includes five guiding principles, developed from input from stakeholders, which help define economic development in Denton. The principles are core resiliency, future-focused, inclusive growth, entrepreneurial spirit, and cultural vitality. In addition, the plan includes three goals, including accelerating recovery, fostering growth, and strengthening community inclusion. A set of strategies and actions are identified for each goal and provide the City with a roadmap to organize its economic development efforts. In addition, the consultants have provided an implementation matrix (Exhibit 3), which outlines specific tasks, a proposed timeline, estimated costs, and identifies what entity will be responsible for implementation. The Economic Development Strategic Plan will be used to guide the work plans of the City’s Economic Development Department and many of our partner agencies over the next 3 to 5 years. Staff will provide regular updates through the EDPB and City Council regarding implementation and will bring forward any policy changes or considerations necessary to fully realize the plan. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 907 PRIOR ACTION/REVIEW (Council, Boards, Commissions) • September 9, 2019 – The Economic Development Partnership Board and City Council held a joint meeting and discussed the scope of work for a comprehensive economic development strategic plan. • November 5, 2019 – The City Council approved the contract with TIP Strategies for development of an economic development strategic plan. • January 15, 2020 – EDPB strategic plan steering committee meeting and discussion. • February 12, 2020 – EDPB strategic plan steering committee meeting and discussion. • March 5, 2020 – The Downtown Economic Development Committee participated in a SWOT analysis regarding the strategic plan development. • June 24, 2020 – EDPB strategic plan steering committee meeting and discussion. • July 8, 2020 – EDPB strategic plan steering committee meeting and discussion. • August 8, 2020 – EDPB strategic plan steering committee meeting and discussion. The EDPB recommended the City Council adopt the Economic Development Strategic Plan (8-0). The EDPB reviewed funding options and recommended City Council pursue the staff recommended hybrid option of utilizing some existing utility system fund balance and dedicating 0.5% of utility system ROI for future funding (8-0). • August 18, 2020 – The City Council held a work session to discuss the strategic plan and possible options for funding an economic development fund. • October 27, 2020 – the City Council held a work session to discuss the strategic plan and possible options for funding an economic development fund. • February 9, 2021 – Work session with City Council regarding additional considerations. EXHIBITS 1. Agenda Information Sheet 2. Resolution and Economic Development Strategic Plan 3. Implementation Matrix Respectfully submitted: Jessica Rogers Director of Economic Development 908 RESOLUTION NO. _____________________ A RESOLUTION OF THE CITY OF DENTON ADOPTING AN ECONOMIC DEVELOPMENT STRATEGIC PLAN; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, economic development is a key driver to sustaining the high quality-of-life that attracts people to live, work, and play in the City of Denton; and WHEREAS, the City of Denton’s desire for growth requires focused economic development efforts by all City stakeholders; and WHEREAS, in November 2019, the City retained TIP Strategies to develop a comprehensive economic development strategic plan for the City of Denton; and WHEREAS, TIP Strategies worked with community and business stakeholders to develop a vision and goals for economic development in the City of Denton, incorporating feedback from various forums, roundtables, interviews, and discussions with representatives and the business community, and WHEREAS, the Economic Development Strategic Plan attached as Exhibit “A” includes actionable recommendations that guide the next three to five years of economic development in the City of Denton; and WHEREAS, the Economic Development Partnership Board voted to recommend approval of the Economic Development Strategic Plan on August 12, 2020 by a vote of 8-0; and WHEREAS, the City Council finds that this Economic Development Strategic Plan is in the best interest of the community and its citizens, and outlines to goals, strategies, and tasks to further economic development in the City of Denton; NOW THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES: SECTION 1. The recitals contained in the preamble of this resolution are hereby incorporated into the body of this resolution as if set out fully herein. SECTION 2. City Council hereby approves and adopts the Economic Development Strategic Plan, attached hereto as Exhibit “A,” and is incorporated by reference herein. SECTION 3. This Resolution shall become effective upon its passage and approval. The motion to approve this resolution was made by __________________________ and seconded by _________________________________, the resolution was passed and approved by the following vote [___ - ___]: 909 Page 2 Aye Nay Abstain Absent Mayor Gerard Hudspeth: Birdia Johnson, District 1: Connie Baker, District 2: Jesse L. Davis, District 3: John Ryan, District 4: Deb Armintor, At Large Place 5: Paul Meltzer, At Large Place 6: PASSED AND APPROVED this the _________ day of ___________________, 2021. __________________________________ GERARD HUDSPETH, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY BY: __________________________________ APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: __________________________________ Digitally signed by Mack Reinwand Date: 2021.02.03 21:20:13 -06'00' 910 ECONOMIC DEVELOPMENT STRATEGIC PLAN CITY OF DENTON, TEXAS DECEMBER 2020 911 ACKNOWLEDGMENTS Marty Rivers Denton Chamber of Commerce John Baines Denton Black Chamber of Commerce Keely Briggs Denton City Council, District 2 Jesse Davis Denton City Council, District 3 Tony Clark Independent Bank Group Chris Davis Peterbilt Charlie Dromgoole Denton Chamber of Commerce Bob Eames Aviation Steve Edgar Medical City Denton Todd Hileman City of Denton Jill Jester Denton Chamber of Commerce Mark McLellan University of North Texas Jimmy Mejia Denton Hispanic Chamber of Commerce Pamela Padilla University of North Texas Erica Pangburn Denton Chamber of Commerce Jessica Rogers City of Denton Erica Sullivan City of Denton Jason Tomlinson Texas Woman’s University Jamie Wilson Denton Independent School District CONSULTING TEAM TIP STRATEGIES, INC., is a privately held economic HIZIPSTQIRXGSRWYPXMRKƼVQ[MXLSƾGIWMR%YWXMRERH Seattle. TIP is committed to providing quality solutions for public sector and private sector clients. Established in XLIƼVQƅWTVMQEV]JSGYWMWIGSRSQMGHIZIPSTQIRX strategic planning. CONTACT TIP Strategies 2905 San Gabriel Street, Suite 309, Austin, TX 78705 PH: 512-343-9113 [[[XMTWXVEXIKMIWGSQ CONSULTING TEAM Tom Stellman, CEO/Founder Jaclyn Le, Consultant Brent McElreath, SVP, Research & Development Evan Johnston, Analyst Phoebe Polakovic, Analyst Meredith Eberle, Designer TIP Strategies would like to thank the following individuals for their participation in this planning process, along with the hundreds of business leaders, community leaders, young professionals, and other major stakeholders from Denton who participated in this project. ACKNOWLEDGMENTS All images in this report were provided by the city of Denton or purchased from Adobe Stock by TIP Strategies, unless otherwise noted. 912 CONTENTS Executive Summary ..........................................1 Introduction ..............................................1 Project Background and Scope .............................. 2 Plan Framework ....................................................3 Guiding Principles ........................................3 Economic Development Goals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Strategic Recommendations ................................... 5 Goal 1 Accelerate Recovery ................................. 6 Goal 2 Foster Growth .....................................10 Goal 3 Strengthen Community Inclusion .....................42 Capacity and Resources ......................................45 Economic Development Partnership ........................46 Funding .................................................47 Programs and Policies ....................................52 Marketing...............................................52 Internal Systems .........................................53 Strategic Performance Metrics ................................55 Appendices ................................................57 %TTIRHM\%ź(EXE*MRHMRKW ................................58 %TTIRHM\&ź7;38%REP]WMW ................................60 %TTIRHM\'ź1YRMGMTEP9XMPMX]'SQTEVMWSR ....................65 %TTIRHM\(ź)GSW]WXIQ(MVIGXSV] ...........................66 913 EXECUTIVE SUMMARY INTRODUCTION Denton has changed. Once considered a quiet college town on the outskirts of XLI(EPPEW*SVX;SVXL(*; 1IXVSTPI\(IRXSRLEWKVS[RWMKRMƼGERXP]WMRGI the City’s last comprehensive economic development plan. The City leaders must be commended for the investments made in downtown Denton and the Westpark Industrial Park over the past decade. These intentional efforts have put Denton squarely in the path of growth. Today, Denton is well within the orbit of its surrounding DFW communities. The DFW Metroplex is one of the fastest-growing metropolitan regions in the country. As DFW grows, so will Denton. It is not only more connected to Dallas and Fort Worth but also the global markets and supply chains that are represented by a diverse array of industries across the region. All evidence points toward an upward trajectory for Denton. &YX(IRXSRMWEXERMRƽIGXMSRTSMRXƂSRIRSXEFSYXEXXVEGXMRKKVS[XLFYX instead about how to respond to and embrace it. Denton must determine how it will welcome the opportunities associated with growth while also preserving the culture that makes this community so unique. The community must open its arms to new residents without letting existing residents fall behind. This is no easy feat, but Denton has already demonstrated that it has the leadership and assets necessary to successfully navigate through and thrive with change. What Denton needs now is a modern approach to economic development that is appropriate for a community of its size and is capable of leveraging public and private resources to capitalize on the opportunities that lie ahead. During this planning process, the 2019 coronavirus (COVID-19) pandemic not only disrupted the writing of this plan but also upended almost every aspect of life for people around the world. The extent of the health crisis and economic damage cannot be understated. There is still immense uncertainty about the breadth and depth of the recession caused by this pandemic. The road to economic recovery will likely be bumpy, especially for a community like Denton that depends heavily on sales tax revenue to fund City operations and services. Denton’s immediate focus should be on accelerating economic recovery with a special focus on serving vulnerable populations that have been disproportionately impacted by this crisis. Still, there are a lot of reasons to be optimistic about Denton’s future. All the XLMRKWXLEXQEOI(IRXSRWSEXXVEGXMZIƂMXWQENSVMRHYWXVMIWYRMZIVWMXMIWEVXW ERHGYPXYVIHS[RXS[RWUYEVIEYXLIRXMGTISTPIERHYRMUYIGLEVQƂ[MPPEPWSFI the things that help Denton to recover. 1 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 914 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 2 This plan is meant to help focus economic development efforts to be more strategic and effective in responding to forthcoming changes in Denton. The plan’s framework, including guiding principles and goals are detailed in the next section. Strategic recommendations and actions are organized around three goals: accelerate recovery, foster growth, and strengthen community inclusion. Finally, the plan addresses the issue of organizational capacity and resources needed to modernize Denton’s economic development approach. PROJECT BACKGROUND AND SCOPE In late 2019, TIP Strategies (TIP) was engaged by the City of Denton Economic Development Department to develop an economic development strategic plan for the City. A strategic plan helps to focus and maximize economic development and workforce development efforts, especially during times SJGVMWMW8LIIGSRSQMGHIZIPSTQIRXPERHWGETIMWYRHIVKSMRKWMKRMƼGERX changes, and the economic fallout from the COVID-19 pandemic will be immense. Over the course of nine months, the TIP Strategies consulting team worked closely with the City of Denton (hereafter the City) to identify promising opportunities to capitalize on Denton’s growth. The planning process was conducted in three phases: discovery, opportunity, and implementation. The City should not view this strategic plan as a static document, but as one that invites revisions and amendments as conditions change. Now, more than IZIVWXEOILSPHIVWWLSYPHXEOIEH]REQMGETTVSEGLXSMQTPIQIRXEXMSRƂSRIthat revisits this plan on a regular basis to measure progress and to reprioritize strategies and actions as needed. ᶲ Core Resiliency ᶲ Future Focused ᶲ Inclusive Growth ᶲ Entrepreneurial Spirit ᶲ Cultural Vitality ᶲ Accelerate Recovery ᶲ Foster Growth ᶲ Strengthen Community Inclusion ᶲ Connectivity ᶲ Creativity ᶲ Sustainability ᶲ Competitiveness GUIDING PRINCIPLES ECONOMIC DEVELOPMENT GOALS STRATEGIC GROWTH AREAS PHASE 1 DISCOVERY Conducted roundtable discussions and interviews with Denton stakeholders. Important constituencies were engaged during this process, including the following. ᶲ The Economic Development Partnership Board ᶲ Denton City Council members ᶲ Denton Chamber of Commerce ᶲ Business and industry representatives ᶲ City and county staff ᶲ Entrepreneurs ᶲ Higher education leaders ᶲ Real estate developers ᶲ Workforce development organizations ᶲ Young professionals PHASE 2 OPPORTUNITY -HIRXMƼIHQENSVTVMSVMXMIWJSVXLIWXVEXIKMGTPER%WXVIRKXLW[IEORIWWIW opportunities, and threats (SWOT) analysis, guiding principles, and strategies were developed based on input from discovery. PHASE 3 IMPLEMENTATION Developed action items and tactical recommendations. 915 PLAN FRAMEWORK With rapid changes reshaping the global economy, the need for strategic focus and organization is greater now. The purpose of this plan is to enable Denton’s Economic Development Department to better anticipate, respond, and evolve with changes affecting the economic success of residents and businesses. The framework, strategies, and actions detailed in this plan are informed by extensive data analysis and thorough stakeholder input, including interviews and roundtables with City, community, and business leaders. GUIDING PRINCIPLES +YMHMRKTVMRGMTPIWVIƽIGXXLIZEPYIWSJEGSQQYRMX]-RXLIGSRXI\XSJER economic strategy, they are a set of statements expressing how a community HIƼRIWIGSRSQMGHIZIPSTQIRX8LIWITVMRGMTPIW[IVIGVEJXIHXLVSYKLMRTYX from Denton stakeholders throughout the planning process. CORE RESILIENCY Protect the City’s core economic base and major employers by retaining businesses and providing them with the support necessary to continue doing business in Denton. FUTURE FOCUSED Position Denton for future growth by understanding trends and adopting a proactive approach to economic development. INCLUSIVE GROWTH Enhance economic opportunity for all residents by utilizing different strategies that recognize the diverse needs and assets of different communities, especially those in south and east Denton. ENTREPRENEURIAL SPIRIT Cultivate the City’s entrepreneurial ecosystem by investing in quality of place and catalyzing innovation that will continue to attract creative professionals to Denton. CULTURAL VITALITY Strengthen Denton’s cultural vitality by continuing to promote arts and music while also marketing the City as DFW’s cultural hub. 3 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 916 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 4 ECONOMIC DEVELOPMENT GOALS This plan is built around three major goals: accelerate recovery, foster growth, and strengthen community inclusion. Developed based on input from stakeholder engagement and economic assessments, the set of strategies and EGXMSRWMHIRXMƼIHYRHIVIEGLKSEPEVIQIERXXSTVSZMHIXLI'MX][MXLEVSEHQET to organize its programs and bolster Denton’s vitality over the next several years. ACCELERATE RECOVERY Coordinate short-term economic recovery efforts from the COVID-19 pandemic by aggregating information, collaborating with regional partners, and allocating resources to top priorities.1 FOSTER GROWTH Attract long-term economic growth aligned with community priorities by focusing on four strategic growth areas: connectivity, creativity, sustainability, and competitiveness.2 STRENGTHEN COMMUNITY INCLUSION Align economic, workforce, and community development efforts to meet critical community needs and to strengthen community inclusion.3 917 STRATEGIC RECOMMENDATIONS 5 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 918 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 6 GOAL 1 ACCELERATE RECOVERY When the City of Denton and TIP Strategies began the planning process for this strategic plan, the original intent was to create a long-term vision for the City’s economic development efforts. The context for the planning process was one of optimism. The US was experiencing one of the longest uninterrupted periods of economic growth in history. Texas had one of the lowest unemployment rates in the country, and the DFW Metroplex was one of the fastest-growing metropolitan regions in the US. Much of that growth and opportunity was headed in Denton’s way. But now that context has shifted for everyone, everywhere. Early signs indicate that the current economic crisis might be one of the worst in US history. It is HMƾGYPXXSTVIHMGXLS[XLMRKW[MPPIZSPZISZIVXLIRI[JI[[IIOWERHQSRXLW The lasting health and economic effects of the COVID-19 pandemic are still unfolding. Because strategic plans are meant to be forward looking, this plan would be incomplete, maybe even irrelevant, if it did not address the challenges that Denton will face as a result of this crisis. While the bulk of this strategic plan is still focused on Denton’s long-term future, this section provides recommendations for how the City can work to accelerate economic recovery once the health risks subside and sheltering mandates are lifted. Many of these strategies will likely need to be implemented virtually, as social distancing measures might be in place for an extended time. The City’s Economic Development Department team has already initiated positive efforts to support Denton’s businesses and residents during the early phase of crisis relief. Those efforts should be leveraged and expanded as the community moves into a recovery phase. Recognizing that resources in Denton will be impacted by the crisis, many of the recommendations are centered around the City in a convening and coordinating role with other community and economic development partners. STRATEGIES AND ACTIONS 1.1. ECONOMIC RECOVERY NERVE CENTER. The City’s Economic Development Department should function as Denton’s economic recovery nerve center with a primary focus on a cross-functional coordination of resources and responses related to the economic fallout from the COVID-19 pandemic. 1.1.1. Pull together a small group of top-level leadership from the City, the Economic Development Partnership Board (EDPB), and the Denton Chamber of Commerce to form the economic recovery nerve center. ᶲ The purpose of the nerve center is to set the overall tone of economic recovery work, aggregate all information and actions across cross-functional teams, and allocate resources to integrate the responses of smaller teams. Coordinate short-term economic recovery efforts from the COVID-19 pandemic by aggregating information, collaborating with regional partners, and allocating resources to top priorities. 919 7 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 1.1.2. Shift the focus of the existing economic development structure from relief and policy enforcement to cross-functional elements of economic recovery, such as business retention, workforce development, and community services. ᶲ BUSINESS RETENTION. Continue to focus on establishing a relationship with leaders in Denton’s main businesses, understanding short-term and long-term needs of those FYWMRIWWIWERHGSQQYRMGEXMRKMRJSVQEXMSR[MXLEYRMƼIH voice. ᶲWORKFORCE DEVELOPMENT. Continue to work closely with Workforce Solutions, human resource leaders from businesses, and City departments to support businesses in protecting their employees while also maintaining business productivity as sheltering mandates begin to ease. ᶲ COMMUNITY SERVICES. Provide vital wraparound services XS(IRXSRVIWMHIRXW6ITVIWIRXEXMZIWSJQENSVRSRTVSƼXWfoundations, and City departments should work together on creating a centralized inventory of resources, understanding resident needs, and identifying gaps in available services. 1.1.3. Develop an internal data dashboard to guide economic recovery efforts using a limited number of indicators that can be tracked over time and shared with partner organizations. ᶲ Potential indicators include rate of full-time vs. part-time employment, retail sales, growth in construction permits, missed rent payments, access to broadband, and other qualitative information from business surveys (see Strategy 1.2). ᶲ Where possible, indicators should be disaggregated by race and income levels to track how recovery efforts are reaching vulnerable communities. 1.2. TAKING THE PULSE OF THE BUSINESS COMMUNITY. As the health issues and economic fallout from COVID-19 evolve, the City should continue to implement strategies and tools to take the pulse of Denton’s businesses on a regular basis. 1.2.1. Continue to coordinate with the Denton Chamber of Commerce and Denton Main Street Association to assess short-term needs and long-term projections for Denton’s businesses. ᶲ Ideally, the City and the chamber should distribute a joint survey to Denton businesses. Consistency in questions is integral to tracking data and information over time. ᶲAs an alternative to surveys, the City could implement monthly ZMVXYEPSƾGILSYVWSVVSYRHXEFPIW[MXLFYWMRIWWIWXSKEXLIVinformation about their needs and challenges. 1.2.2. Stay connected to DFW organizations coordinating economic recovery and community service efforts across the DFW Metroplex. ᶲ Organizations, such as the Dallas Regional Chamber, have created small business resources and a displaced workers job campaign that can be shared in Denton. 1.3. VIRTUAL BUSINESS RETENTION. The top economic development priority for the City is to continue supporting and retaining existing businesses through the recovery period. In-person visits might not be possible even after sheltering mandates are lifted, therefore, the City should create virtual business retention and expansion (BRE) options. 1.3.1. Continue to develop and maintain a database of Denton-based businesses. 1.3.2. Shift the City’s business visitation efforts to a virtual setting and establish a cadence of meetings with businesses as soon as appropriate. 1.3.3. Expand existing goals for business touchpoints on a monthly, quarterly, and annual basis. INTEGRATED NERVE CENTER RESPONSE “In an unfamiliar crisis, such as the COVID-19 outbreak, the nerve center concentrates crucial leadership skills and organizational capabilities and gives leaders the best chance of getting ahead of events rather than reacting to them.” —McKinsey & Company, “Responding to Coronavirus: The Minimum Viable Nerve Center.” GOAL 1 STRATEGIES 920 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 8 1.3.4. Reevaluate and adjust standard questions and protocols utilized in the City’s BRE program to be more responsive to the COVID-19 crisis and recovery. 1.3.5. Prioritize business retention efforts based on strategic growth areas (see Goal 2), employer size, employer growth (number of employees, revenue growth, etc.), and lease terminations. ᶲ This data can be obtained through a database of existing businesses (see the “Internal Systems” section) as well as information from pulse surveys and other interactions with businesses. 1.3.6. Structure BRE efforts to serve several purposes. ᶲ Educate businesses about resources and services offered by the City to aid in recovery. ᶲ Collect answers to a short list of questions to quantify challenges the company is facing. ᶲ Identify short-term and long-term issues the companies are grappling with across a variety of topics, including workforce and infrastructure needs. 1.3.7. Act as a concierge to priority businesses to help navigate processes within other municipal departments (e.g., partner with a project facilitator from the City’s Development Services Department). 1.4. WORKFORCE COLLABORATIVE. Focus on the workforce development function listed in Action 1.1.2 to develop broader strategies supporting Denton’s talent pipeline through recovery. 1.4.1. Prioritize engagement with the Denton County Workforce Success Leadership Team (DCWSLT) to connect City efforts to the broader regional context. ᶲ While DCWSLT might be solely focused on the Asset Limited, Income Constrained, Employed (ALICE) population, the City should also focus on developing supports for unemployed residents, including those who have been displaced from jobs and might require upskilling or retraining in order to access new employment opportunities. ᶲThe City can bring the perspectives of businesses to DCWSLT by aggregating and sharing information obtained through business retention activities and business engagement with the Denton Chamber of Commerce and the Denton Main Street Association. 1.4.2. Catalog which industries have been severely impacted by COVID-19 and determine if targeted resources can be deployed to support workers in those industries. ᶲ For example, displaced retail workers might require special support in accessing training programs in order to switch occupations and/or sectors. 1.4.3. Use insights and data from business retention efforts and surveys of the business community as a baseline for employer demand. Couple this information with other data about unemployment rates and the needs of jobseekers. 1.4.4. Develop an inventory of training resources across providers, such as North Central Texas College (NCTC), Workforce Solutions for North Central Texas, and United Way. Include capacity levels and ƽI\MFMPMX]XSWXVIEQPMRIVIHIWMKRSVGVIEXIRI[TVSKVEQWXSQIIX employer needs. 1.4.5. Engage in demand planning to understand which businesses expect to hire and when. ᶲ -JWTIGMƼGSGGYTEXMSRW[MPPFIMRHIQERHHIZIPSTTVSNIGXMSRWas well as competency requirements from employers. Communicate this information to training providers. ᶲ Create a skills inventory using existing sources of data, such as Economic Modeling Specialists International (Emsi). 1.4.6. Identify barriers to accessing training and other workforce resources. Continue to coordinate with partner organizations to help remove these barriers for those seeking jobs. 1.5. INCLUSIVE ECONOMIC RECOVERY. The COVID-19 pandemic has had a disproportionate impact on low-income residents (of all races) and people of color (across socioeconomic status). Compared to other DFW cities, Denton has a larger proportion of its community (primarily in the southern and eastern parts of the City) that is more vulnerable to both GOAL 1 STRATEGIES 921 9 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS the health and economic fallout from COVID-19. Therefore, equitable and inclusive economic recovery strategies should be central in Denton’s efforts to stabilize its economy and recover from the pandemic. 1.5.1. Extend existing collaboration efforts with the City’s Community Development Department to coordinate resources and efforts to support residents through economic recovery. 1.5.2. Coordinate with the Denton Black Chamber of Commerce and other multicultural organizations to provide targeted information for businesses owned by women and people of color. ᶲ Research indicates that these small business owners face structural exclusion from traditional sources of capital and aid packages, including the US Small Business Administration (SBA) Paycheck Protection Program. ᶲ4EVXRIV[MXLGSQQYRMX]HIZIPSTQIRXƼRERGMEPMRWXMXYXMSRWin the DFW area to expand resources and programming into Denton to aid in economic recovery efforts. 1.5.3. 'SRXMRYIXSGSPPEFSVEXI[MXLPSGEPERHVIKMSREPRSRTVSƼXWMRgathering information about what challenges residents are facing due to the economic impact of the COVID-19 pandemic. ᶲ Use this information to work closely with other City departments, business leaders, and philanthropic entities to develop solutions that directly address resident needs. ᶲ Having more accurate information about challenges and needs can be helpful in attracting funding from public and philanthropic sources. It can also help the City take actions or HIWMKRTSPMGMIWXLEXHMVIGXP]FIRIƼXZYPRIVEFPIGSQQYRMXMIW 1.5.4. Disaggregate social and economic indicators by race and income levels to show how vulnerable populations are faring in comparison to other segments of the population. 1.5.5. Highlight businesses owned by women and people of color in marketing materials and through digital marketing channels to increase awareness and promote their success. 1.6. REGIONAL COLLABORATION. The economic fallout from COVID-19 will impact US metropolitan regions in different ways. Denton’s economic recovery is tied, in part, to recovery efforts in Denton County and in the broader DFW Metroplex. While Denton has unique assets and challenges EWEGSPPIKIXS[RMXGERFIRIƼXJVSQERHGSRXVMFYXIXSVIKMSREP resources and recovery efforts. 1.6.1. Continue the City’s existing support for the United Way of Denton County Information & Referral services to assist small businesses. ᶲ If possible, add extra support for entrepreneurs and businesses owned by people of color by soliciting volunteers with expertise in these areas. ᶲ Support DFW organizations, such as Capital Factory and Venture Dallas, to provide targeted support to Denton entrepreneurs and startups. 1.6.2. Strengthen the Denton County chamber and economic development workgroup and continue to build this network throughout the economic stabilization and recovery periods. ᶲ In addition to information sharing, create task forces within the network to focus on critical issues and challenges that partner organizations are facing. 1.6.3. Leverage the Denton Innovation Group to develop targeted supports and resources to assist entrepreneurs through economic recovery. ᶲ Continue to partner with organizations such as Stoke, the University of North Texas (UNT) Murphy Center for Entrepreneurship and Innovation, the Center for Women Entrepreneurs at Texas Woman’s University (TWU), TechMill, Denton Angel Investment Group, and the Dallas Entrepreneur Center. 1.6.4. Connect with regional DFW organizations, such as the Dallas Regional Chamber, to expand the information-sharing network beyond Denton County. GOAL 1 STRATEGIES 922 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 10 Attract long-term economic growth aligned with community priorities by focusing on four strategic growth areas: connectivity, creativity, sustainability, and competitiveness. GOAL 2 FOSTER GROWTH THE TRADITIONAL APPROACH Target industries have been a cornerstone of economic development programs. The six sectors in Figure 1[IVIMHIRXMƼIHEWXEVKIXIHWIGXSVWQER]]IEVWEKS and have guided the work of Denton’s Economic Development Partnership (EDP). While these targets made sense at the time, they now cover much of Denton’s existing economy and do not capture the full extent of the City’s assets. Traditionally, target industries EVIHIƼRIHF]UYERXMXEXMZI analysis to identify a concentration of industries that exist in a city or a region. Figure 2 illustrates the process by which traditional targets are MHIRXMƼIH%REP]WMWSJHEXEJVSQ the North American Industry 'PEWWMƼGEXMSR7]WXIQ2%-'7 is used to highlight where a community already has a larger- than-average concentration of employers and jobs. For example, a community with clusters of advertising, legal services, and tax preparation services might identify corporate and professional services as a target sector. This approach has several limitations. First, targets are MHIRXMƼIHYWMRKI\MWXMRKHEXE that often fail to capture a community’s full assets and advantages. Emerging industries with growing momentum might not be captured in the NAICS taxonomy. Second, traditional targets say nothing about the institutions and organizations that contribute to building a concentration of industries. Third, traditional targets SUPPLY CHAIN LOGISTICS ADVANCED MANUFACTURING AVIATION RENEWABLE ENERGY INFORMATION TECHNOLOGY RESEARCH & DEVELOPMENT *-+96)źDENTON’S EXISTING TARGETS Quantitative analysis is used to identify a concentration of industries that exist in a city... TRADED CLUSTER LOCAL CLUSTER LOCAL CLUSTER TRADED CLUSTER Which are then grouped to form a target sector... TARGET SECTOR *-+96)źTRADITIONAL TARGET INDUSTRIES 923 11 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS are a static measure that can quickly become outdated. Or, in the case of Denton, a list of targets can keep growing until it covers most of the economy. Finally, from an organizational standpoint, traditional targets can, by default, XIQTXIGSRSQMGHIZIPSTQIRXSƾGIWXSJSGYWXLIMVXMQIERHQIEWYVIXLIMV TIVJSVQERGIMRMRIƾGMIRX[E]W The challenge that Denton faces today is how to focus efforts and resources in a more strategic manner. THE PATH FORWARD As the DFW Metroplex grows, much of that growth will spread into Denton County. Planned developments, most notably Cole and Hunter Ranch, will continue to connect Denton to the broader DFW ecosystem. While the COVID-19 crisis will affect the timing of these developments, there is reason to be optimistic that Denton will continue to experience growth after a period of economic recovery. A modernized economic development approach is focused on cultivating strategic growth areas that fully leverage the community’s major employers, institutions, and intangible elements. Quantitative data, like NAICS codes, are one of many factors that informs a community’s strategic growth areas. Instead of targeting sectors, the main role for economic development organizations is to build ecosystems around their strategic growth areas. An ecosystem is comprised of many elements, including anchor institutions, principal and emerging participants, competitions and events, building blocks, local capital, and public awareness. The ecosystem overview on the next page provides a description of each element. The process of ecosystem building is illustrated in the case studies presented in this section. ᶲ Connecting companies to top talent and innovations through the University of Arkansas Center of Excellence in Logistics and Distribution (CELDi) is one example of this concept in practice (page 19). ᶲ An innovative business model mixing philanthropy with revenues earned from consulting services was part of building an entrepreneurial community in the Fargo, North Dakota, Emerging Prairie initiative (page 27). ᶲ The focus of San Antonio, Texas, efforts to build a sustainable energy hub around its public utility was facilitating access to capital, expertise, and mentors through its )RIVK]4EVXRIVWLMTW-RRSZEXMSRGIRXIV)4-GIRXIV RSRTVSƼXpage 34). ᶲ 'LEXXERSSKE8IRRIWWIIIJJSVXWXSYTKVEHIMXWIPIGXVMGEPKVMH[MXLƼFIVSTXMG cables laid the groundwork for the growth of a high-tech ecosystem and gave the city its Gig City moniker (page 41). Ecosystem building has several advantages. First, ecosystems factor in both UYERXMƼEFPIERHMRXERKMFPIEWWIXWXLEXEGSQQYRMX]TSWWIWWIW7IGSRH ecosystem building is a team sport that requires different contributions from different organizations so that economic growth is not the sole responsibility of one entity. Finally, ecosystems are more dynamic and more adaptable as elements change over time. DENTON’S STRATEGIC GROWTH AREAS The question remains, how will Denton respond to incoming growth? There is a way for Denton to welcome and attract growth that leverages the community’s assets ERHTVIWIVZIWMXWYRMUYIGYPXYVI8SKIXLIVXLIJSYVKVS[XLEVIEWFIPS[HIƼRIE holistic approach to growth that applies to various aspects of Denton’s economy. By adopting growth areas, the City can ensure that Denton grows in a way aligned with both economic priorities and community needs. Furthermore, each of these growth areas can be used to organize economic development efforts. The following pages include more details about each growth area, including anchor institutions, principal and emerging participants, competitions and events, building blocks, local capital, and public awareness, that will drive growth in these areas. Appendix D includes more detailed information about trade associations, relevant conferences/events, and trade publications associated with each strategic growth area. CONNECTIVITY Denton’s major employers, interstate access, and planned infrastructure improvements make it a transportation and logistics hub for the DFW Metroplex. CREATIVITY A growing entrepreneurship community, including startups in the tech and arts/culture sectors, contributes to Denton’s unique vibe. SUSTAINABILITY The City’s investment in 100 percent renewable resources positions Denton to be a global leader in renewable energy and green technology. COMPETITIVENESS Denton’s economic competitiveness will continue to improve with planned housing developments, downtown amenities, digital marketing, and infrastructure improvements. 924 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 12 ANCHOR INSTITUTIONS Anchor institutions—universities, hospitals, and schools—are interwoven in a community’s economic, social, and cultural fabric. Partnering with anchors in economic development efforts can drive innovation and enrich economic vitality. COMPETITIONS & EVENTS Events can drive growth by cultivating sector-based networks, attracting tourists, and building a community’s brand. Competitions and events not only raise XLITVSƼPISJEGSQQYRMX][MXLSYXWMHIVW but also connect a community to a larger network of aligned stakeholders. LOCAL CAPITAL Access to capital can facilitate new ideas, deepen partnerships, and result in bigger impact for companies and community- based organizations. Ranging from venture capital to philanthropic grants, local capital is central to growth and success. BUILDING BLOCKS No ecosystem can thrive without a group of ecosystem builders that focus on collaboration across organizations, inclusion of diverse voices, and sustainability of economic development efforts. These builders can be coworking spaces, catalytic programs, or even visionary individuals. EMERGING PARTICIPANTS Every community has emerging players, including scrappy startups and innovative entrepreneurs, that have the potential to change the trajectory of the community. The buzz, innovation, and energy that emerging players bring is vital to renewing and reinventing a community’s economy. PUBLIC AWARENESS Branding and marketing are vital to growth. A community’s success stories should be shared widely through traditional media, social media, and industry- WTIGMƼGGLERRIPW&VMRKMRKEXXIRXMSR to the businesses and people that are the heartbeat of a community can drive investment and foster growth. STRATEGIC GROWTH AREAS ECOSYSTEM DENTON’S GROWTH ECOSYSTEM 925 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS13 %źCONNECTED DENTON THE VALUE In the past, Denton was viewed as a community on the outskirts of the DFW Metroplex, both geographically and economically. That has changed. The GSQFMREXMSRSJLMKL[E]MQTVSZIQIRXWERHWMKRMƼGERXKVS[XLMRXSEVIEWRSVXL of Dallas and Fort Worth has brought Denton into the DFW community in a more intensive way. Recent growth in Denton’s transportation and logistics-oriented businesses as well as improvements to the City’s infrastructure position Denton as a hub for business connectivity. THE ANCHORS Since the 1980s, Peterbilt has been one of Denton’s largest employers and a cornerstone of the City’s economy. Its success played a vital role in attracting other transportation and logistics companies to the west side of Denton. Both private sector businesses and publicly owned assets, such as Denton Enterprise Airport, contribute to Denton’s impressive transportation infrastructure. The airport’s recent addition of a second runway as well as the US Aviation Academy position the airport for increased business activity and usage. THE ECOSYSTEM Denton’s location at the intersection of I-35E and I-35W, as well as its proximity to three Class-1 railroad lines, makes it an ideal hub for transportation and logistics-focused businesses. Examples include companies that manufacture vehicles and transportation equipment, as well as warehousing and distribution activities. The expansion of e-commerce nationally, which has been accelerated F]XLI'3:-(TERHIQMGJYIPWHIQERHJSVPSKMWXMGWƼVQW2I[IRXVERXWWYGL as United States Cold Storage and WinCo Foods, recognize Denton’s strategic advantages. As the industry undergoes major technological change, Denton is poised to be a leader in connectivity. Leveraging existing businesses and higher education institutions will make the City a nexus for supply chain innovation, research, and development. 926 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 14 ANCHOR INSTITUTIONS ᶲ Peterbilt ᶲ Denton Enterprise Airport ᶲ US Aviation Academy ᶲ UNT Center for Logistics & Supply Chain Management ᶲ North Central Texas College COMPETITIONS & EVENTS ᶲ International Conference on Information, Logistics and Supply Chain ᶲ Accelerate! Conference & Expo ᶲ Heavy Duty Aftermarket Week LOCAL CAPITAL ᶲ Westpark Industrial Park TIRZ ᶲ EDP Investment Fund BUILDING BLOCKS ᶲ DFW Roundtable, Council of Supply Chain Management Professionals ᶲ North Texas Commission, Logistics Development and Marketing Committee ᶲ Institute for Supply Management Dallas ᶲ Texas Association of Manufacturers EMERGING PARTICIPANTS ᶲ United States Cold Storage ᶲ Tetra Pak ᶲ WinCo Foods ᶲ Tyson Foods PUBLIC AWARENESS ᶲ Item Journal of Commerce ᶲ Advanced Manufacturing Insight ᶲ Logistics Management ᶲ International Journal of Shipping and Transport Logistics DENTON’S GROWTH ECOSYSTEM CONNECTED DENTON ECOSYSTEM 927 15 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS RELATED INDUSTRIES AND SECTORS Sectors and industries that keep Denton connected include all aspects of transportation, distribution, logistics, and communication systems, as well as manufacturing of vehicles and parts related to these systems. Representative Economic Development Administration (EDA) clusters include the following. Sources: US Bureau of Labor Statistics; Emsi 2020.1—QCEW Employees, Non-Quarterly Census of Employment and Wages (QCEW) Employees, and Self-Employed; US Economic Development Administration; Institute for Strategy and Competitiveness at Harvard Business School (HBS); TIP Strategies. Note: The cluster methodology developed at HBS has been adjusted by TIP Strategies to align with the WM\HMKMX2%-'7GPEWWMƼGEXMSRWYWIHF])QWM STRATEGIES AND ACTIONS 2A.1. BUSINESS RETENTION AND EXPANSION (BRE). A strong BRE program is the foundation of any economic development program. In addition to developing a virtual business retention program (see Strategy 1.3), Denton also needs to enhance its existing BRE program in order to support existing businesses in a more intensive and robust manner. 2A.1.1. 6IƼRIERHIRPEVKIXLI'MX]ƅWHEXEFEWISJI\MWXMRKIQTPS]IVW The database should be expanded to include companies in the area that serve external markets or are suppliers to existing employers. 2A.1.2. Revise and ramp up the business visitation program to track trends among Denton employers and identify business needs. ᶲ Virtual visits should be made until the COVID-19 health crisis recedes. ᶲ Establish a visitation protocol, a list of information to be collected during each visit, and a goal for the number of businesses visited each year. DISTRIBUTION AND E-COMMERCE TRANSPORTATION AND LOGISTICS LOCAL LOGISTICS SERVICES AUTOMOTIVE (INCL. TRUCK MANUFACTURING) COMMUNICATIONS EQUIPMENT AND SERVICES CONNECTIVITY Number of jobs in the DFW metropolitan area: 423,873 Percent of jobs in the DFW metropolitan area: 10.7% EFFECTIVE BRE Businesses already in the community are well-positioned to create jobs and contribute to the tax base. Yet, often their achievements are overshadowed by the headlines of a new business moving to town. However, the effort and expense it can take to recruit a new business to town can be multiples of what it takes to support existing businesses, while the outcomes and impact of the two can be similar. An effective BRE program focuses on building relationships with existing businesses, establishing lines of communications such that any needs or challenges are voiced, and responding to those needs or challenges. One of the best means for doing this is to provide concierge services. Business concierges are often staff within an economic development organization who provide guidance to businesses in navigating planning, zoning, development, permitting, and construction processes. The concierge makes it easier for businesses to access services from different city HITEVXQIRXWWSXLEXER]GLEPPIRKIWEVIVIWSPZIHIƾGMIRXP] CONNECTED DENTON STRATEGIES 928 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 16 ᶲ Organize joint business visits with area workforce development partners, including higher education and training providers. 2A.1.3. Communicate success stories that result from BRE visits. These might not translate directly to new job creation or increased capital investment, but they can still be valuable to businesses. ᶲ Examples include assistance with permitting, workforce training, or infrastructure challenges. 2A.1.4. Provide incentives and/or grants to existing companies to assist with business expansion and help retain these valuable assets in Denton. 2A.2. ATTRACT NEW INVESTMENT. Recruiting new businesses should remain a top priority for the City’s Economic Development Department team. The City has a track record of success with business attraction, and efforts can be strengthened by focusing on external marketing and cultivating relationships in critical sectors. 2A.2.1. Cultivate relationships with real estate brokers and site selectors. ᶲ Build a database of national and regional developers, brokers, and site consultants to identify targets, raise awareness of sites, development, and investment opportunities in Denton. ᶲ Connect with site consultants in the DFW Metroplex and targeted regions on a regular basis. ᶲ ,SWXIZIRXWXLEXWLS[GEWIWTIGMƼGEWWIXWWYGL as available sites, buildings, or new projects. Some communities host site tours or reverse pitch events where developers and brokers pitch their vision for a WTIGMƼGWMXISVTVSNIGX 2A.2.2. Create a centralized lead tracking system for Denton (see the “Capacity and Resources” section). 2A.2.3. Engage with regional economic development organizations, industry groups, and professional networks in the DFW Metroplex. ᶲ Join regional industry associations and networks focused on Denton’s growth areas to remain current on critical issues, build stronger networks, and leverage resources. ᶲ Attend conferences and trade shows held in the DFW Metroplex by national industry organizations aligned with Denton’s growth areas. 2A.2.4. Maintain and enhance the site location factors that are essential for connectivity industries: labor availability, highway access, affordable land and facilities, and favorable tax incentives. ᶲ Denton’s triple freeport tax exemption is an example of a policy that is critical to business recruitment efforts in these sectors. 2A.3. WESTPARK INDUSTRIAL PARK. The industrial park is vital to Denton’s economic growth. Success in attracting new businesses, such as WinCo Foods and Tyson Foods, as well as retaining major employers like Peterbilt, is crucial for the City’s economic vitality. To build on this success, undeveloped land can be better marketed, and improvements can be made to core infrastructure. 2A.3.1. Prioritize infrastructure investments, particularly with respect to roads and utilities. ᶲ Dedicate a set percentage of the City’s capital improvements budget to projects in the area to ensure that improvements are made in a timely manner. ᶲ Expand Jim Christal Road to improve the connection between the industrial park and I-35. Stakeholders believe that the existing road cannot accommodate a growing number of businesses. This will require additional investment from the City beyond the Westpark tax increment reinvestment zone (TIRZ). 2A.3.2. Continue to track vacant properties and parcels, partnering with brokers and developers on new developments or redevelopments to increase the usefulness and value of these properties. 2A.3.3. 4EVXRIV[MXL928SRVIPSGEXMRKXLIWTSVXWVIGVIEXMSRƼIPHW located at Precision Drive and Airport Road to an area outside the industrial park to improve safety and make better use of the land. CONNECTED DENTON STRATEGIES 929 17 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 2A.3.4. Provide public infrastructure incentives (such as credits or reimbursements) for projects aligned to Denton’s growth areas. ᶲ The City already utilizes most economic development tools available to incentivize development. Continue using the Westpark TIRZ to support the industrial park. 2A.4. CENTER OF EXCELLENCE. Denton has all the necessary assets to create a center of excellence (COE) focused on logistics and supply chain management. The presence of several logistics-oriented GSQTERMIWƂ(IRXSR)RXIVTVMWI%MVTSVX2'8'ERH928'IRXIVJSV 0SKMWXMGW 7YTTP]'LEMR1EREKIQIRXƂTVSZMHI(IRXSR[MXLEHMWXMRGX advantage in the connectivity space. 2A.4.1. Leverage over $2.8 billion in planned projects from Texas Department of Transportation (TxDOT) in Denton to increase connectivity between Denton and surrounding DFW communities (Figure 3). ᶲ %WMKRMƼGERXRYQFIVSJTPERRIHMRJVEWXVYGXYVI improvements will continue to make Denton a competitive community for logistics and transportation- SVMIRXIHƼVQW ᶲ Denton’s continued competitiveness in the connectivity space, coupled with other assets, should be the basis for creating a COE. It is essential for the partners interested MRGVIEXMRKE'3)XSWTIEO[MXLEYRMƼIHZSMGIEFSYXXLI strategic advantages that Denton offers, which can be leveraged for even greater recognition and innovation. 2A.4.2. Explore the feasibility of a partnership between the businesses located in the Westpark Industrial Park, NCTC, UNT Center for Logistics & Supply Chain Management, and the City. ᶲ Form a committee comprised of representatives from these organizations and other potential partners to meet regularly to move the concept forward. ᶲ Compile an inventory of local and regional assets that would support the COE, including education and training programs, relevant university research, industry conferences and events, and companies. ᶲ Research other COEs focused on logistics and distribution to understand potential organizational models, funding strategies, and areas of focus. ᶲ Host a summit on topics affecting the logistics and distribution industry. ᶲ Identify strategies for drawing researchers and faculty to the region, such as creating an endowed chair or designing opportunities for collaboration across institutions. 2A.4.3. Include workforce partners to create career pathways for Denton students and residents into in-demand occupations for Denton’s transportation and logistics businesses. 2A.4.4. Promote opportunities in the transportation, logistics, and WYTTP]GLEMRƼIPHWXSWXYHIRXWMR(IRXSRERHMRIGSRSQMG development marketing materials. WHAT IS A CENTER OF EXCELLENCE? Centers of excellence are a collaboration between higher education institutions and businesses, leveraging the unique assets found within a VIKMSRXSWYTTSVXXLIEHZERGIQIRXSJVIWIEVGLERHXVEMRMRK[MXLMREWTIGMƼG industry. They often serve as a magnet for industry expertise and are dedicated to the success of companies within a region. Expected outcomes include the following. ᶲ Generating statewide and national recognition. ᶲ Supporting Denton’s economic growth. ᶲ Leveraging the unique assets of Denton’s higher education institutions. CONNECTED DENTON STRATEGIES 930 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 18 *-+96)źPLANNED TXDOT PROJECTS IN DENTON PHASE PROJECTS EST. COST Construction underway or begins soon 24 $99,035,892 Construction begins within 4 years 8 $421,055,003 Construction begins in 5 to 10 years 8 $756,529,022 Corridor Studies, construction in 10+ years 5 $1,394,440,290 TOTALS 45 $2,671,060,207 Source: Texas Department of Transportation, Project Tracker. CONNECTED DENTON STRATEGIES 931 CONNECTED DENTON CASE STUDY TAKEAWAYS FOR DENTON ᶲ Establish a COE in Logistics at UNT with industry leaders in the area, like Peterbilt, to facilitate collaboration between the public and private sectors. ᶲ Join CELDi to access an established network of universities, national companies, and funding. ᶲ 'VIEXMRKE'3)RSXSRP]TVSZMHIWFIRIƼXWXSI\MWXMRKGSQTERMIWFYXEPWSEGXW as a talent development strategy for Denton and its major employers. BACKGROUND Headquartered at the University of Arkansas in Fayetteville, CELDi (Center for Excellence in Logistics and Distribution) is a multidisciplinary industry and university research center established in 2001. The cooperative is comprised of six university partners from across the nation and 31 companies, ranging from global corporations to municipalities like San Pedro, Mexico. For universities, admission to CELDi is predicated on the expertise of each MRWXMXYXMSR[LMPIMRHYWXV]TEVXRIVWTVSZMHISRKSMRKƼRERGMEPWYTTSVXJSVPSKMWXMGW VIWIEVGLXLVSYKLXMIVIHQIQFIVWLMTSTXMSRW'SQTERMIWFIRIƼXJVSQMRGVIEWIH IƾGMIRG]MRXLIMVWYTTP]GLEMREWEHMVIGXVIWYPXSJXLIMRRSZEXMSRGVIEXIH[MXL university partners as well as having direct access to top students. CELDi hosts biannual joint meetings in which researchers and the Industrial Advisory Board (comprised of representatives from member companies) coordinate new projects and offer continuing education courses. CELDi’s mission is to produce the next generation of engineers in logistics and distribution centers while advancing the industry through innovations in products and systems.. PROGRAM OUTCOMES (2019) ᶲ UA has received over $3 million in industry-funded research sponsorship. ᶲ ')0(MMRHYWXV]QIQFIVWMRGPYHI;EPQEVX7XSVIW947Ƃ'LEMR Supply Solutions, Air Liquide, The Boeing Company, Lockheed Martin Aircraft & Logistics Center, and Medical Center Hospital in Odessa, Texas. CELDi | UNIVERSITY OF ARKANSAS, DEPARTMENT OF INDUSTRIAL ENGINEERING www.celdi.org ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXASTheTheTheTheTheThTheTheTUnUnUnUnUnUniveiveiveiveiveiveveversirsirsirsirsirsrsrstytytytytytytytyof of of ofofof of offffArkArkArkArkArkArkArkArArkansansansansansansansansas as asas asasassss UniUniUnUnUniUnUnUnUon onon on ononononby bybbybyby b BraBraBraBraBraBraBraBrandondondondondondondodnrunrunrunrunrunrunruurushshshshshshshshhhhsviaviaviaviaviaiviaviaviaWiWiWiWiWiWiWiWkimkimkimkimkimkimmkimmediediediediedediedeea Ca CaCa Ca Ca CaCa Commommommommommommommommommmmonsonsonsonsonsonsnso (C(C(C(C(C(CCC-BC-BC-BC-BC-BC-BC-BC-BCY-SY-SY-SY-SY-SY-SY-SSA 3A 3A 3A 3A 3A 3A 3A 333A 3.0).0).0).0).0).0)00)00 932 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 20 &źCREATIVE DENTON Photo by y yAAnnie SpSprSprSprprattattataaa vivivia UaaUnspnlasashh THE VALUE Denton’s reputation for arts and culture makes it a standout destination within the DFW Metroplex. Its cultural assets not only foster quality of place but also create an economic advantage. Over the past decade, a budding creative economy has attracted entrepreneurs to Denton, making the City a hub for big ideas and innovation. Denton has a vibe unlike any other community in the VIKMSR&]GSRXMRYMRKXSRSYVMWLXLMWGVIEXMZIIGSW]WXIQXLI'MX]GERƽSYVMWL and become a vibrant destination for talent and investment. THE ANCHORS From higher education to coworking spaces, Denton’s creative economy is anchored by diverse and thriving institutions. TWU and UNT are catalysts for innovation and drivers of the City’s talent pipeline. Stoke is the heartbeat of Denton’s startup scene, providing a hub for entrepreneurs near downtown amenities. Embracing and strengthening these anchor institutions will not only attract growth but also ensure that the creative elements at the heart of Denton’s culture will continue to thrive. THE ECOSYSTEM In recent years, a strong cluster of education technology companies has emerged in Denton. The presence of two universities along with strong support for entrepreneurs has made Denton an ideal location for edtech startups. Events such as the Denton Black Film Festival have also drawn tourists to Denton and strengthened community ties. However, Denton’s creative economy requires additional support, including stronger connections to the DFW tech scene and venture capital. The City can nurture Creative Denton by cultivating relationships with DFW capital sources and raising public awareness of Denton artists and entrepreneurs. 933 21 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS ANCHOR INSTITUTIONS ᶲUNT Murphy Center for Entrepreneurship and Innovation ᶲCenter for Women Entrepreneurs at TWU ᶲNorth Central Texas College ᶲDenton ISD COMPETITIONS & EVENTS ᶲFlintConf ᶲDenton Black Film Festival ᶲBootstrap Denton ᶲTIACON LOCAL CAPITAL ᶲDenton Angels ᶲTech Wildcatters ᶲNorth Texas Angel Network EMERGING PARTICIPANTS ᶲReady Rosie ᶲKubos ᶲWildcards ᶲiTeach BUILDING BLOCKS ᶲStoke ᶲTechMill ᶲCapital Factory, Dallas ᶲOpen Denton ᶲDallas Entrepreneur Center PUBLIC AWARENESS ᶲDenton Record-Chronicle ᶲDiscover Denton ᶲNorth Texas Daily ᶲVoice of Denton ᶲDallas Innovates CREATIVE DENTON ECOSYSTEM CREATIVE DENTON ECOSYSTEM 934 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 22 RELATED INDUSTRIES AND SECTORS Sectors and industries that make Denton creative include computer technology, research, design, and the arts. Representative EDA clusters include the following. Sources: US Bureau of Labor Statistics; Emsi 2020.1—QCEW Employees, Non-QCEW Employees, and Self- Employed; US Economic Development Administration; Institute for Strategy and Competitiveness at Harvard Business School (HBS); TIP Strategies. Note: The cluster methodology developed at HBS has been adjusted by TIP Strategies to align with the WM\HMKMX2%-'7GPEWWMƼGEXMSRWYWIHF])QWM STRATEGIES AND ACTIONS 2B.1. CHAMPION AND CONVENE. The City can strengthen entrepreneurship in Denton by advocating for local startups and serving as a connector between entrepreneurs and the talent, capital, and networks they need. 2B.1.1. Support the expansion of networking channels and opportunities for relationship building among the region’s entrepreneurs, startups, and students. ᶲ While the City might not directly oversee these programs, it can support the efforts of partner organizations, such as Stoke and universities. 2B.1.2. Establish connections with DFW entrepreneurship organizations such as Dallas 1 Million Cups, 1 Million Cups Frisco, Dallas Innovates, Capital Factory, and the Dallas Entrepreneur Center. ᶲ Connecting with regional efforts not only helps make local entrepreneurs aware of available resources but also helps raise awareness in DFW about Denton’s assets and the City’s commitment to creating an entrepreneurial ecosystem. ᶲ Networking with regional organizations and becoming more visible in these initiatives can also help attract entrepreneurs to Denton. 2B.1.3. Assemble a knowledge resource network to support entrepreneurs ERHGSQTERMIW[MXLEGGIWWXSƼRERGMEPPIKEPTSPMG]ERHVIWIEVGL information needed to grow their businesses. ᶲ Communities take different approaches to creating “entrepreneur support mechanisms,” a phrase coined by the Ewing Marion Kauffman Foundation, to connect CREATIVITY Number of jobs in the DFW metropolitan area: 179,361 Percent of jobs in the DFW metropolitan area: 4.5% COMPUTER SERVICES SOFTWARE PUBLISHERS RESEARCH ORGANIZATIONS ARCHITECTURAL SERVICES PRINTING SERVICES DESIGN SERVICES OTHER MARKETING-RELATED SERVICES PUBLISHING ADVERTISING-RELATED SERVICES PERFORMING ARTISTS “There are a lot of pearls in Denton, but they’re not on a string yet.” —Denton entrepreneur CREATIVE DENTON STRATEGIES 935 23 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS entrepreneurs with the information they need. For example, KCSourceLink, an intermediary in the Kansas City region, created a Resource Navigator with over 240 businesses that can connect entrepreneurs to different types of knowledge and resources. More examples can be found through Kauffman’s ESHIP Communities initiative. ᶲ Fargo’s Emerging Prairie initiative provides an ecosystem that brings together entrepreneurs, large corporations, IHYGEXMSREPMRWXMXYXMSRWRSRTVSƼXWERHWXYHIRXWXLVSYKL networking events, coworking space, skills training, and more (see case study on page 27). 2B.1.4. Partner with local and regional partners to design reverse-pitch competitions to engage major corporations and organizations in the DFW Metroplex with needs for innovation. ᶲIn a reverse-pitch competition, established businesses pitch a challenge to entrepreneurs and solicit solutions. Businesses have their challenges addressed while IRXVITVIRIYVWFIRIƼXJVSQIWXEFPMWLMRKGSRRIGXMSRWERH increased awareness about their startups. ᶲDenton can customize a reverse-pitch competition for its entrepreneurship community by connecting local entrepreneurs with school districts in the region to tackle edtech challenges. ᶲHelping the City solve issues, such as sustainability, housing, and other community challenges through social entrepreneurship, is another area where this approach GSYPHFIFIRIƼGMEP 2B.1.5. Ensure that targeted resources are available for businesses owned by women and people of color, who have historically faced barriers to accessing traditional economic development tools (e.g., create a dedicated fund to assist historically underutilized businesses). 2B.2. ACCESS TO CAPITAL. Increase access to capital for Denton entrepreneurs by aggregating information about diverse sources of funding and developing relationships with potential funders. 2B.2.1. Cultivate relationships with the DFW venture capital (VC) community so that local companies are not forced to relocate after they grow beyond their initial rounds of capital. ᶲGather information about trends in the DFW market, what local VCs are investing in, and projections for growth. ᶲConnect Denton’s high-potential startups to local and regional funders. ᶲCreate a database of capital resources, including local banks, angel investors, and high-net-worth individuals, to drive the City’s internal work plan (e.g., guide networking strategies and establish priorities) and share with partner organizations (i.e., Denton Innovation Group). 2B.2.2. Partner with the Denton Angels to expand access to capital for Denton startups. Work with other angel networks in the DFW 1IXVSTPI\ERHEGVSWW8I\EWXSMQTVSZIHIEPƽS[JSV(IRXSR companies and investors. ᶲ The role of the City should be focused on facilitating connections between investors and startups in Denton and making connections to regional organizations. 2B.2.3. Network with regional entrepreneurship programs so that they become familiar with Denton and the resources available for businesses looking to grow within the DFW Metroplex. 2B.2.4. Revise the funding requirements for the EDP Investment Fund to be more inclusive of innovative startups that might not meet current thresholds for employment and capital investment. ᶲOver the long term, creating a separate fund dedicated to entrepreneurship in Denton is preferable, however, a short-term solution is to create an exception for startups seeking support from the EDP Investment Fund. CREATIVE DENTON STRATEGIES 936 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 24 ᶲA potential model for a startup fund is the McKinney Innovation Fund (announced in January 2020) provided by the McKinney Economic Development Corporation. Eligibility and incentives are differentiated for startups at different phases of their life cycles. For example, growth startups have lower thresholds for minimum annual revenue and employees compared to established startups seeking to relocate to McKinney, Texas. ᶲA more rigorous analysis and exploration of the needs of startups in Denton is required to develop a new fund that IJJIGXMZIP]EHHVIWWIWFEVVMIVWWTIGMƼGXSXLMWGSQQYRMX] The City can convene a small task force of entrepreneurs and those connected to the DFW entrepreneurial IGSW]WXIQXSTVSZMHIMRTYXXLEXGERKYMHIWTIGMƼG elements of a startup fund. ᶲSome elements that the City should consider for building a startup fund include differentiated support for startups at different phases of growth, target industries and sectors, hiring of targeted residents (such as women and Black, indigenous, and people of color [BIPOC]), number of jobs, and wages. 2B.3. ECOSYSTEM BUILDERS. Thriving entrepreneurial ecosystems rely on ecosystem builders to coordinate disparate organizations and initiatives. Denton has a handful of strong builders, including Stoke and TechMill. Their efforts to foster collaboration should be supported XLVSYKLƼRERGMEPVIWSYVGIWERHGETEGMX]FYMPHMRK 2B.3.1. 7YTTSVXXLI(IRXSR-RRSZEXMSR+VSYTXSHIƼRIEZMWMSR for entrepreneurship in Denton, establish goals, measure progress, and connect with DFW organizations. ᶲThe City’s role in this effort is envisioned as a supporting partner rather than a lead. ᶲ7YTTSVXGSYPHMRGPYHIHSREXMRKƼRERGMEPVIWSYVGIWWYGL as helping to engage a consultant or facilitator to build out a detailed work plan, or the commitment of time and participation in this effort. 2B.3.2. Launch an accelerator to support growth of existing companies. ᶲAccelerators are programs that help startups scale-up by offering mentorship, facilitating connections to investors and other businesses, and building capacity for the startup to grow. Typically, accelerators support a small cohort of high-potential, early-stage startups that have already experienced some level of success or market validation. ᶲ A major challenge in Denton is the lack of resources for companies that seek to scale up. Startups tend to “outgrow” Denton and move to more well-resourced communities. Examples of successful accelerators include Techstars and Y Combinator. The Innovation Depot in Birmingham, Alabama, is another potential model to follow. ᶲState and federal resources are available to support accelerators. For example, the US SBA Growth Accelerator Fund provides over $4 million in prizes to accelerators across the country on an annual basis. 2B.3.3. Host a Citywide pitch competition to identify and develop innovative entrepreneurs in Denton. This not only builds Denton’s creative brand but also provides the City with a way of identifying top talent in the community. 2B.3.4. 7YTTSVXXLIHIZIPSTQIRXSJSƾGIWTEGI[LIVIGSQTERMIWGER expand. Continuing to prioritize redevelopment in the downtown EVIEERHYWMRKƽI\MFPI^SRMRK[MPPJEGMPMXEXIXLIWIIJJSVXW WHAT IS ECOSYSTEM BUILDING? “Ecosystem building is emerging as a new profession at the intersection of economic and community development. Successful ecosystem builders must connect traditional, top-down economic development approaches with the grassroots, bottom-up, community-driven environments in which most entrepreneurs thrive.” —Ewing Marion Kauffman Foundation, “Entrepreneurial Ecosystem Building Playbook 3.0.” CREATIVE DENTON STRATEGIES 937 25 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 2B.4. EDTECH CLUSTER. Strong higher education presence and innovation in Denton independent school district (ISD) make Denton a competitive spot for education technology (edtech) companies. A growing cluster of edtech companies in Denton is applying advanced technologies in K–12, higher education, and adult learning environments. 2B.4.1. Capitalize on Denton’s status as an emerging hub for edtech companies to drive additional growth and investment in this sector and to attract more creative professionals to Denton. ᶲ Promote Denton’s edtech companies and link them with potential business expansion/relocation prospects in other markets. 2B.4.2. Create an edtech alliance with entrepreneurial companies, Denton ISD, UNT Murphy Center for Entrepreneurship and Innovation, and the Center for Women Entrepreneurs at TWU to identify opportunities to strengthen and diversify edtech in Denton. ᶲ Research other edtech alliances across the US to understand how they are structured. ᶲ Hold an introductory meeting to identify the range of possible partners and to explore common opportunities and/or needs the alliance could address. ᶲ Consider possible activities the alliance could take on, such as hosting networking events and conferences, publishing materials, and advocating for policies supportive of edtech. ᶲ Establish channels for students to engage with edtech companies and leaders through internships and case competitions. 2B.4.3. Support the expansion of Denton ISD’s annual Technology in Action Conference (TIACON) about education technology and curriculum. ᶲ Utilize the event to highlight existing edtech businesses that have been founded in Denton, including ReadyRosie, Wildcards, ALL In Learning, From the Future, and Kinful. 2B.5. RECRUIT GROWING STARTUPS. Target and recruit growing early- WXEKIƼVQWMRXLI(*;1IXVSTPI\ERHSXLIVXEVKIXQEVOIXWMRXLI US, including larger urban areas on the coasts. Companies growing out of the startup phase might be looking for ways to expand their businesses. 2B.5.1. Engage with DFW entrepreneurship organizations, talent networks, and industry associations to identify new companies. 2B.5.2. Target successful startups in business incubators/accelerators that are on the cusp of outgrowing their existing spaces and are positioned for expansion/relocation to Denton. ᶲ Denton can target startups in several ways, including alignment with the four strategic growth areas of this plan and size of the startup (i.e., by revenue or number of employees). The City is poised to best support small XSQIHMYQWM^IHƼVQWXLEXLEZISYXKVS[RMRMXMEPVSYRHW of funding or support from incubators. Firms that are interested in expansion but not large enough to need I\XIRWMZISƾGIWTEGIMR(IRXSREVIEKSSHƼX8LI related industries and sectors listed for each growth area also offer a starting point for identifying aligned startups. ᶲMany universities in the DFW Metroplex operate incubators and/or accelerators for businesses started by students or faculty. The City could target entrepreneurs located at these institutions who are ready to expand beyond the university. For example, Denton could partner with the UNT Murphy Center for Entrepreneurship and Innovation to identify the next level of funding and support that its entrepreneurs need to expand or stay in Denton. ᶲ Some chambers of commerce and economic development organizations in the region maintain lists of major incubators and accelerators that the City can use to begin outreach and relationship-building efforts. One example is the incubator list from Say Yes to Dallas. CREATIVE DENTON STRATEGIES 938 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 26 2B.5.3. 8VEGO:'ƼVQWMR(*;7MPMGSR:EPPI]%YWXMRERHSXLIVQEVOIXW that have recently funded high-growth, innovative businesses. ᶲ Use this list to follow VC trends and identify high-growth businesses that might be targets for expansion or relocation. This will also help the City build relationships in the VC community and facilitate connections to Denton startups. 2B.5.4. Use resources like the Inc. 5000 (a list of the fastest-growing TVMZEXIƼVQWMRXLI97FEWIHSR]IEVSZIV]IEVVIZIRYI KVS[XL XSMHIRXMJ]ƼVQWXLEX[SYPHFIEKSSHƼXJSV(IRXSR Additional resources include the following. ᶲ Crunchbase (for identifying recipients of venture funding) ᶲ Fast Company (magazine about the world’s most innovative companies) ᶲ MIT Technology Review (magazine about the smartest companies) 2B.6. PROMOTING DENTON’S CREATIVE BRAND. A foundational component of building an entrepreneurial ecosystem is making residents aware of how entrepreneurship can help to drive the economy. The City should collaborate in raising awareness of success stories, both locally and regionally. More information about the need for a revamp of Denton’s marketing efforts is in the Capacity and Resources section. 2B.6.1. 6IZMWIQEVOIXMRKQEXIVMEPWXSMRGPYHIWTIGMƼGMRJSVQEXMSR about the economic impact of startups to Denton’s economy ERHXLIMRGIRXMZIWVIWSYVGIWTVSZMHIHWTIGMƼGEPP]XSWXEVXYTW 2B.6.2. Aggressively utilize the City’s social media channels to publicize successes. 2B.6.3. Pitch stories about successful Denton companies to media outlets, such as the Denton Record-Chronicle, Dallas Morning News, Fort Worth Star-Telegram, Dallas Innovates, and D Magazine. 2B.6.4. Develop a Citywide entrepreneurial recognition program to harness the strengths of local efforts that already exist in Denton. CREATIVE DENTON STRATEGIES 939 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS27 CREATIVE DENTON CASE STUDY EMERGING PRAIRIE | FARGO, ND www.emergingprairie.com TAKEAWAYS FOR DENTON ᶲ At a critical point in its history, EP changed its business model in order to HMZIVWMJ]MXWJYRHMRKWSYVGIWERHFIGSQIQSVIƼRERGMEPP]WXEFPI ᶲ While the coworking space is an important part of EP, its ecosystem consists of broader components aligned to clear economic goals and targets for growth. ᶲ Equity and inclusion are viewed as a business imperative, and intentional efforts are made to diversify the entrepreneur pipeline. BACKGROUND Emerging Prairie opened in 2013 with the mission of growing the entrepreneurial community in North Dakota and furthering economic growth for the state. 3VMKMREPP]EJSVTVSƼXSVKERM^EXMSR)4FIGEQIERSRTVSƼXMRMRSVHIVXS VIQEMREƼRERGMEPP]WXEFPIMRHITIRHIRXSVKERM^EXMSR Their revenue model is a mix of philanthropy and earned income, which is generated through consulting services, membership to the coworking space (the Prairie Den), and paid partnerships. EP has three divisions: 1) the Ecosystem which includes the Prairie Den, events, conferences, and programming, 2) the Emerging Digital Academy, a full-time, 20-week coding school that launched in 2020, and 3) the Grand Farm Initiative, which will create an AI-based working farm prototype by the year 2025 while cultivating a support system for the future of farming. PROGRAM OUTCOMES (2019) ᶲ Microsoft invested $1.5 million in the Grand Farm Initiative ᶲ EP held 135 events with more than 11,000 community members in attendance ᶲ Year-over-year membership increased by 41 percent 940 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 2828 'źSUSTAINABLE DENTON THE VALUE Cities and regions are starting to embrace the growing importance of sustainability to economic vitality. Due to its 100 percent renewable energy goal, Denton is on track to becoming one of the most sustainable communities in the country. A select group of US cities have committed to this ambitious goal, and only a handful have achieved it. Aligning the City’s economic development efforts with its sustainability goals can bring environmentally conscious growth to Denton that both enhances the City’s environmental ethos and attracts business investment. THE ANCHORS Denton Municipal Electric (DME) is one of Denton’s greatest assets not only because of affordable rates but also because of its role in fostering sustainable development and growth. Denton’s ability to meet 100 percent of its electric needs from renewable sources and have a local gas plant allows the City to maintain competitive rates, while also reducing its environmental impact. Building a sustainability-focused growth strategy with DME as a centerpiece will provide Denton with a strategic advantage in attracting green businesses and investment. THE ECOSYSTEM (IRXSRLEWEWMKRMƼGERXSTTSVXYRMX]XSPIEHXLIWYWXEMREFMPMX]IGSW]WXIQMR North Texas as well as the entire state. Its commitment to renewable energy and environmentalism is forward looking and progressive. Working closely with DME, the City’s Economic Development Department can continue to build resources ERHMRGIRXMZIWJSVKVIEXIVIRIVK]IƾGMIRG]EQSRK(IRXSRƅWFYWMRIWWIW8LI City can leverage its reputation for sustainability to attract environmentally conscious businesses and be a thought leader in DFW’s renewable energy sector. Strategies include identifying environmentally conscious businesses, preparing targeted marketing materials, helping developers and companies access federal energy incentives, and staying current on relevant trends. 941 29 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS SUSTAINABLE DENTON ECOSYSTEM ANCHOR INSTITUTIONS ᶲ Denton Municipal Electric ᶲ UNT Department of Geography and the Environment ᶲ UNT College of Engineering DENTON’S GROWTH ECOSYSTEM COMPETITIONS & EVENTS ᶲ NTAEP TCEQ Trade Fair ᶲ CleanTX GridNEXT Conference ᶲ Society of Texas Environmental Professionals Annual DFW Meeting LOCAL CAPITAL ᶲ )RIVK])ƾGMIRG]-RGIRXMZI ᶲ Solar Installation Incentive ᶲ Engineering Audit ᶲ Standard Offer Incentive ᶲ Green Business Program BUILDING BLOCKS ᶲ North Texas Association of Environmental Professionals ᶲ CleanTX ᶲ Texas Municipal Utilities Association ᶲ Advancing Data Center and IT (Information Technology) Infrastructure Professionals EMERGING PARTICIPANTS ᶲ Embassy Suites ᶲ North Central Texas Council of Governments Public Works Council ᶲ North Texas Green Council ᶲ North Texas Renewable Energy Group ᶲ Sierra Club Lone Star Chapter PUBLIC AWARENESS ᶲ Green Source DFW ᶲ Renewable Energy ᶲ Journal of Renewable and Sustainable Energy ᶲ 8LI7SPEV6IƽIGXSV 942 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 30 RELATED INDUSTRIES AND SECTORS Sectors and industries where Denton can have a sustainable impact include construction, utilities, and engineering. Representative EDA clusters include the following. Sources: US Bureau of Labor Statistics; Emsi 2020.1—QCEW Employees, Non-QCEW Employees, and Self-Employed; US Economic Development Administration; Institute for Strategy and Competitiveness at Harvard Business School (HBS); TIP Strategies. Note: The cluster methodology developed at HBS has been adjusted by TIP Strategies to align with the six-digit 2%-'7GPEWWMƼGEXMSRWYWIHF])QWM STRATEGIES AND ACTIONS 2C.1. SIMPLY SUSTAINABLE STRATEGIC PLAN. Denton’s Simply Sustainable strategic plan from 2012 was ahead of its time and offered a blueprint for improving the City’s sustainability. Integrating economic development efforts with those goals can strengthen Denton’s environmentally conscious identity and attract investments aligned with environmental priorities. This plan is not meant to replace other sustainability efforts from the City but is intended to draw attention to areas where the Economic Development Department can support and build on the City’s existing sustainability strategies. 2C.1.1. 4VMSVMXM^IXLIIRIVK]IƾGMIRG]ERHGSRWIVZEXMSRKSEPJVSQXLI Simply Sustainable plan by focusing on building standards and incentives for greener residential and business development. ᶲ Explore options for putting this priority into practice, such as creating a green incentive fund, dedicating part of an existing fund, or establishing a point system for the award of incentives. 2C.1.2. Work with DME and the City’s Development Services Department to better understand green building standards, including what is currently required of developers. ᶲ Continue to incorporate leadership in energy and IRZMVSRQIRXEPHIWMKR0))( GIVXMƼGEXMSRERH IRZMVSRQIRXEPP]FIRIƼGMEPEGXMZMXMIWMRXSMRGIRXMZI policies and development standards. ᶲ Develop tiers of building standards that will promote sustainability and can be opted into by developers who want to build more environmentally friendly buildings. 2C.1.3. Build a more robust set of incentives to encourage developers to adopt green building standards. More incentives should be offered for developments that meet higher tiers of standards. ᶲ Strengthen the commercial incentives currently offered by DME by offering stronger incentives differentiated by HMJJIVIRXPIZIPWSJIRIVK]IƾGMIRG] SUSTAINABILITY Number of jobs in the DFW metropolitan area: 265,586 Percent of jobs in the DFW metropolitan area: 6.7% ENGINEERING SERVICES GENERAL CONTRACTORS SPECIALTY CONTRACTORS DEVELOPERS ALTERNATIVE ELECTRIC POWER ELECTRIC POWER DISTRIBUTION WATER PROCESSING WATER, SEWAGE, AND OTHER SYSTEMS WATER AND SEWER LINE DISTRIBUTION SANITARY SERVICES SUSTAINABLE DENTON STRATEGIES 943 31 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS ᶲ Collaborate with the City’s Development Services Department in adding structural incentives for green buildings, such as expedited review/permitting processes and density bonuses. ᶲ Reduce or reimburse fees for developments that follow green building standards. Examples of fees include review/permitting fees and impact fees. This might require setting aside funds for fee reduction/reimbursement. 2C.2. TARGET ENVIRONMENTALLY CONSCIOUS BUSINESSES. Denton has an opportunity to target environmentally conscious businesses that are attracted to the community’s sustainability and conservation efforts. The community’s commitment to and actions toward sustainability will make Denton a national, and even global, leader in sustainable growth and green development. 2C.2.1. Identify businesses that are high electricity users, such as data centers. DME’s competitive rates and the ability to power businesses using 100 percent renewables is a good marketing opportunity for both the company and for Denton. ᶲ While data centers do not bring many jobs to a community, they consume vast amounts of electricity, which will provide Denton with additional revenue. Global innovation is focused on making data centers more IRIVK]IƾGMIRXERH(IRXSRGERFISRXLIGYXXMRKIHKI of this movement because of its renewable resources. ᶲ According to a CBRE US Data Center Trends report, the DFW Metroplex was the second fastest-growing market for data centers in 2019. Low utility costs, ease of transportation access, incentives, and safe climate conditions make DFW an ideal location for data centers. 2C.2.2. Provide technical assistance to developers and businesses that want to leverage federal incentives, such as the Business )RIVK]-RZIWXQIRX8E\'VIHMXSVSFXEMR0))(GIVXMƼGEXMSR 2C.2.3. Network with regional and statewide organizations focused on clean energy, municipal utilities, and data centers to understand trends and develop relationships with industry leaders. 2C.2.4. Connect with real estate developers and site selectors who LEZII\TIVMIRGIWYTTSVXMRKIRZMVSRQIRXEPP]GSRWGMSYWƼVQW SVMRHYWXVMIWXLEX[SYPHFIRIƼXJVSQVIRI[EFPIIRIVK] ᶲ For example, there are data center operators and developers who specialize in data center development. )\EQTPIƼVQWMRGPYHI)HKIGSVI2IX[SVOW%PMKRIH Energy, and CBRE’s Data Center Solutions group. The City WLSYPHHIZIPSTVIPEXMSRWLMTW[MXLXLIWIƼVQWERHTMXGL Denton’s value proposition for data centers, including low utility rates, 100 percent renewable energy, and other incentives offered to businesses seeking to expand or relocate to Denton. ᶲ Denton should also build stronger relationships with site selectors, both general and those specializing in specific industries. The list of related industries and sectors provided earlier in this section provides a starting point. It is worth noting that priority relocation and attraction factors still include land availability, low utility rates, access to skilled labor, and easy logistics. Denton’s renewable energy is a value-add but should not be relied on alone to drive site selection and relocation decisions. ENERGY EFFICIENT DATA CENTERS “More and more IT companies are boasting of their commitment to achieving 100 percent reliance on renewable energy8SJYPƼPWYGLTPIHKIW some of the biggest are building their own energy campuses… More often, the data titans sign contracts to receive dedicated supply from existing wind and solar farms. In the U.S., those can still be hard to come by.” —Fred Pearce, “Energy Hogs: Can World’s Huge Data Centers Be Made 1SVI)ƾGMIRX#Ɖ Yale Environment 360. SUSTAINABLE DENTON STRATEGIES 944 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 32 2C.3. THINK GLOBAL, ACT LOCAL. In 2015, the United Nations Member States adopted 17 Sustainable Development Goals (SDGs). The SDGs create a vision for economic prosperity, sustainability, and equity that is shared by many cities around the world, including Denton. The City’s leaders have an opportunity to think global and act local by adopting several SDGs focused on sustainability and economic growth. 2C.3.1. Adopt the SDGs as part of the City’s work plan and formally make them a priority for the City of Denton through Council approval. The four SDGs most related to Denton’s sustainability and economic development efforts are highlighted here. ᶲ SDG 7: AFFORDABLE AND CLEAN ENERGY. Ensure access to affordable, reliable, sustainable, and modern energy for all. ᶲ SDG 8: DECENT WORK AND ECONOMIC GROWTH. Promote sustained, inclusive, and sustainable economic growth, full and productive employment, and decent work for all. ᶲ SDG 9: INDUSTRY, INNOVATION, AND INFRASTRUCTURE. Build resilient infrastructure, promote inclusive and sustainable industrialization, and foster innovation. ᶲ SDG 11: SUSTAINABLE CITIES AND COMMUNITIES. Make cities and human settlements inclusive, safe, resilient, and sustainable. 2C.3.2. Align performance metrics with the targets and indicators associated with each SDG. Not all targets will be directly applicable, so Denton can also set its own targets aligned to the SDGs. See the “Strategic Performance Metrics” section for more details. 2C.4. GREEN MARKETING. Denton should be commended for the EQFMXMSYWWYWXEMREFMPMX]KSEPWERHWMKRMƼGERXTVSKVIWWXS[EVHXLSWI goals. These sustainability efforts should not be distinct from the City’s economic development activities. With better marketing of Denton’s sustainability as a business advantage, the City can achieve both its environmental and economic ambitions. See the “Marketing” section for more details. 2C.4.1. Incorporate Denton’s Green Business Program in economic HIZIPSTQIRXHMKMXEPQEVOIXMRK8LITVSKVEQGERFIRIƼXJVSQ more targeted promotion to the business community. ᶲ Add an annual award or appreciation period for Denton’s QSWXWYWXEMREFPIERHIRIVK]IƾGMIRXFYWMRIWWIW ᶲ Promote the Green Business Program during BRE visits and include information on participation in the City’s database of existing businesses. 2C.4.2. Revise digital marketing materials to include a greater focus on Denton’s sustainability goals and 100 percent renewable energy resources. ᶲ According to the Sierra Club, over 150 US cities have committed to 100 percent renewable electricity for their entire communities. Fewer than 10 cities have already achieved this milestone, and soon Denton will be in that elite group. This should be promoted widely and used as a focal point in economic development materials. ᶲ 'VIEXIQSVIWTIGMƼGVIWSYVGIWXSXEVKIXGSQTERMIW in the clean energy sector and include information on incentives for those companies to relocate or expand to Denton. 2C.4.3. Cultivate relationships with regional and statewide clean energy networks. Treat these networks as a channel for promoting Sustainable Denton as well as furthering business attraction efforts. SUSTAINABLE DENTON STRATEGIES 945 33 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS *-+96)źUNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS Source: United Nations, Sustainable Development Goals Knowledge Platform. SUSTAINABLE DENTON STRATEGIES 946 34 PROGRAM OUTCOMES (2019) ᶲ Since its inception in 2017, EEIA has supported six to seven startups per cohort. ᶲ EPI has hosted three international summits and conferences focused on sustainable energy. ᶲ San Antonio-based EEIA member, Terra Solar, won $50,000 in the Department of Energy’s 2020 American-Made Solar Prize. ᶲ University of Texas at San Antonio Leaptran won a Smart 50 Award for its energy monitoring and control system for buildings in 2019. TAKEAWAYS FOR DENTON ᶲ Municipal utilities can support economic development efforts in a variety of ways beyond providing utilities. ᶲ DME can play a central role in facilitating green energy innovation in Denton, especially as the City reaches its 100 percent renewable resource goal. ᶲ The combination of Denton’s entrepreneurial scene and broader sustainability goals makes Denton a prime location for clean tech and green energy startups. BACKGROUND Cofounded in 2015 by CPS Energy (San Antonio’s municipal electric utility company) and three energy technology companies (OCI Solar Power, Itron ERH0ERHMW+]V )4-GIRXIV)4- MWERSRTVSƼXMRRSZEXMSRLYFJSGYWIHSR sustainable energy research with a local, national, and global perspective. EPI advances the industry through the EPI Energy Incubator and Accelerator (EEIA) program, advisory services, and networking events and conferences. EEIA’s mission is to support early-stage startups with commercially viable technologies and services related to sustainable energy innovation. EEIA matches startups with mentors and subject matter experts to help create ERHVIƼRIFYWMRIWWTPERWEW[IPPEWGSRRIGXXSXLIJYRHMRKPIKEPERHGETMXEP WSYVGIWRIIHIHXSEGLMIZIGSQQIVGMEPM^EXMSRERHƼRERGMEPWYWXEMREFMPMX]))-% also offers tiered membership for businesses and entrepreneurs who are looking for select services or virtual support. EPICENTER SAN ANTONIO, TX www.epicenterus.org SUSTAINABLE DENTON CASE STUDY 947 35 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS (źCOMPETITIVE DENTON THE VALUE Planned developments and improved infrastructure will continue to elevate Denton as a vibrant economic node in the DFW Metroplex. Denton already has unique assets in its universities, hospital systems, and authentic town square that make it stand apart from other DFW communities. As new housing developments and transportation improvements are made over the next 10 years, Denton will be in a more competitive position for business development and talent attraction. THE ANCHORS Denton’s strong hospital systems draw visitors to the City to receive vital medical services. These hospitals provide a fundamental service for the entire GSYRX]ERHGSRXVMFYXIWMKRMƼGERXXE\VIZIRYIJSVXLI'MX]SJ(IRXSRFSXLHMVIGXP] and indirectly. Furthermore, the A-train rail service and bus system operated by the Denton County Transportation Authority (DCTA) provide critical transit infrastructure that many other DFW communities lack. Leveraging these anchors for future development is crucial for Denton’s long-term growth. THE ECOSYSTEM 2YQIVSYWVIGIRXERHTPERRIHHIZIPSTQIRXWEVIVEMWMRK(IRXSRƅWTVSƼPIERH will position the community for more business investment and new residents. Most notably, the Cole and Hunter Ranch development off I-35W will alter (IRXSRƅWTVSƼPIJSVXLIFIXXIVERHQEOIXLI'MX]EJSVQMHEFPIGSQTIXMXSVJSV DFW businesses and talent. Facilitating the success of these developments, continuing to incentivize downtown growth, and improving vital infrastructure will lay the groundwork for Denton’s long-term vitality. 35 948 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 36 ANCHOR INSTITUTIONS ᶲ Medical City Denton ᶲ Texas Health Presbyterian Hospital Dallas ᶲ Denton County Transportation Authority ᶲ University of North Texas ᶲ Texas Woman’s University ᶲ North Central Texas College DENTON’S GROWTH ECOSYSTEM COMPETITIONS & EVENTS ᶲ NTCAR Commercial Real Estate Expo ᶲ Dallas Regional Chamber Annual Meeting ᶲ Fort Worth Chamber of Commerce Annual Meeting LOCAL CAPITAL ᶲ Downtown Denton TIRZ ᶲ EDP Investment Fund BUILDING BLOCKS ᶲ Denton Chamber of Commerce ᶲ Denton Black Chamber of Commerce ᶲ Commercial Real Estate Development Association EMERGING PARTICIPANTS ᶲ Hillwood Communities ᶲ Stratford Land ᶲ Allegiance Hillview ᶲ Denton Main Street Association PUBLIC AWARENESS ᶲ Development Magazine ᶲ Texas Hospitals ᶲ BOMA Magazine COMPETITIVE DENTON ECOSYSTEM 949 37 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS RELATED INDUSTRIES AND SECTORS With the Hunter Ranch and Cole Ranch developments, Denton is poised for a major expansion of both residents and jobs. To be competitive, Denton must capture an adequate share of DFW’s growth in areas such as higher education, LIEPXLGEVIERHSƾGIGEQTYWIW6ITVIWIRXEXMZI)(%GPYWXIVWMRGPYHIXLI following. Sources: US Bureau of Labor Statistics; Emsi 2020.1—QCEW Employees, Non-QCEW Employees, and Self-Employed; US Economic Development Administration; Institute for Strategy and Competitiveness at Harvard Business School (HBS); TIP Strategies. Note: The cluster methodology developed at HBS has been adjusted by TIP Strategies to align with the WM\HMKMX2%-'7GPEWWMƼGEXMSRWYWIHF])QWM STRATEGIES AND ACTIONS 2D.1. COLE AND HUNTER RANCH. Denton City Council’s approval of the Cole ERH,YRXIV6ERGLHIZIPSTQIRX[MPPFVMRKWMKRMƼGERXGLERKIXS(IRXSR The addition of new homes, an employment center, retail amenities, and KVIIR[E]WWXVIXGLIHEGVSWWEGVIW[MPPXVERWJSVQ(IRXSRMRXSE major economic hub. The development also opens the potential for more industrial and commercial development, especially south of the airport. 2D.1.1. Dedicate staff resources to supporting Hillwood and Stratford in making the Cole and Hunter Ranch vision come to fruition. 2D.1.2. Provide concierge services to help the developers navigate processes across City departments and solve challenges that arise. 2D.1.3. Continue to work with Hillwood and Stratford to ensure that a mix of housing options, from high-density to low-density, are built to increase the diversity in Denton’s housing stock. ᶲ The development will bring higher-end housing options that are necessary to attracting and retaining many high- paying jobs and professional talent. ᶲ The City can work with Hillwood and Stratford to ensure that a mix of commercial, industrial, and retail opportunities unfold as planned. The developers already have a master plan for the development; therefore, the City should GSRXMRYIXS[SVO[MXLXLIQQEMRXEMRƽI\MFMPMX]EWMWWYIW arise, and help resolve challenges in a timely manner to not delay development. 2D.2. DOWNTOWN DEVELOPMENT. Successful downtown development and an authentic town square are among Denton’s top economic development achievements. The City should continue to prioritize the downtown area by incentivizing residential and commercial development beyond the square. 2D.2.1. Sustain implementation of the City’s Downtown Implementation Plan adopted in 2010. CORPORATE HEADQUARTERS FINANCIAL / CREDIT INTERMEDIATION SERVICES INSURANCE CARRIERS COLLEGES, UNIVERSITIES, PROFESSIONAL SCHOOLS HOSPITALS COMPETITIVENESS Number of jobs in the DFW metropolitan area: 504,819 Percent of jobs in the DFW metropolitan area: 12.8% HEALTHCARE PROVIDERS COMPETITIVE DENTON STRATEGIES 950 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 38 ᶲ The plan’s recommendations to create more mixed use, pedestrian-friendly development extending off the downtown square are still essential to Denton’s success. 2D.2.2. Continue utilizing various tools (development incentives, Chapter EKVIIQIRXW8-6>ƼRERGMRKERHLMWXSVMGXE\I\IQTXMSRW XS stimulate new private investment in the downtown. ᶲ Some communities offer incentives to developers in order to build developments aligned with the goals of the cities. Incentives for developers often come in the form of fee reimbursements, density bonuses, expedited processing, and other rebates. Developer incentives are commonly used to stimulate development of affordable housing (or mixed-income housing in dense areas) as well as energy- IƾGMIRXFYMPHMRKW 2D.2.3. Prioritize development of additional residential and GSQQIVGMEPSƾGIWTEGIMRHS[RXS[R(IRXSRIWTIGMEPP]XLI corridors extending off the square. ᶲ It is important to incentivize the location of new industrial businesses and the relocation of existing industrial businesses to Westpark Industrial Park so that downtown Denton can be more pedestrian friendly and accommodate nonindustrial companies. ᶲ Though the downtown square is thriving, more focus on the corridors extending off the square will help transform downtown Denton into a robust residential and commercial district. 2D.3. PROFESSIONAL OFFICE SPACE. (IRXSRƅWPEGOSJTVSJIWWMSREPSƾGI spaces poses a barrier to the growth of existing companies as well as XLIEXXVEGXMSRSJPEVKIVTVSJIWWMSREPWIVZMGIWƼVQW8SFSSWX(IRXSRƅW competitiveness for business investment, the City must incentivize the HIZIPSTQIRXSJSƾGIWTEGIW 2D.3.1. 4VSQSXIXLIHIZIPSTQIRXSJ'PEWW%FYMPHMRKWJSVSƾGI space and creative redevelopment of existing structures to attract professional services and tech-oriented companies. ᶲ The City could utilize a Chapter 380 agreement to incentive XLIHIZIPSTQIRXSJRI[SVVIJYVFMWLIHSƾGIWTEGIMRXLI downtown for small businesses and entrepreneurs. ᶲ Alternatively, the City might apply for a grant from the US EDA to support the public infrastructure needed for a development project. ᶲ )RWYVIXLEXRI['PEWW%FYMPHMRKSƾGIWTEGIMWHIZIPSTIH as planned in the Cole and Hunter Ranch developments to create a new employment center for Denton. 2D.3.2. 9XMPM^IƼRERGMEPMRGIRXMZIWXSWYTTSVXXLIHIZIPSTQIRXSJRI[ SVVIJYVFMWLIHSƾGIWTEGI ᶲ For example, Sugar Land, Texas, created an incentive focused on Class A building development. The existing incentives (e.g., grants, loans, tax abatements) to real IWXEXIHIZIPSTIVW[LSGVIEXIRI['PEWW%FYMPHMRKSƾGI space according to a range of guidelines. 2D.3.3. Strengthen relationships with the regional real estate development and brokerage community by hosting quarterly or annual meetings with DFW real estate professional and trade associations. 2D.4. INFRASTRUCTURE. As Denton continues to grow, the need for its infrastructure to keep up is paramount. The City’s Economic Development Department team should work with the City’s Development Services Department in prioritizing improvements that will provide the most return on investment and catalyze other transformational projects. 2D.4.1. Extend basic infrastructure to north Denton around Loop 288 to lay the groundwork for future residential and commercial development after TxDOT completes reconstruction of the loop. 2D.4.2. Improve the aesthetics and accessibility of main corridors leading into the downtown square. Dallas Drive and Fort Worth Drive are the main entrances from I-35 into the City core. COMPETITIVE DENTON STRATEGIES 951 39 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 2D.4.3. Launch a Denton Fiber initiative to expand broadband connectivity and access to all businesses and residents. ᶲ Work with all broadband internet providers in Denton to create an initiative under one brand as a tool to attract technology companies, investors, and talent. ᶲ Develop procedures and requirements for the installation of 5G infrastructure in new developments to prepare Denton for future technology. ᶲ Close the digital divide by targeting resources to expand internet access for Denton residents. As seen in Figure 5, a larger share of Denton’s residents lacks broadband internet at home compared to surrounding communities. ᶲ Explore building a municipally owned broadband network and leasing it to internet service providers to incentivize last-mile services to residents in low- and moderate- income neighborhoods. ᶲ The City can also apply for an EDA grant to help cover infrastructure costs associated with an initiative to expand broadband connectivity in Denton. 2D.5. DIGITAL MARKETING. One of the most common challenges cited by stakeholders is the ability to tell the “Denton story” in a way that fully captures the City’s advantages and leverages modern communications platforms. Digital marketing resources are necessary for a modernized economic development program. 2D.5.1. Refresh the Denton EDP website so that it serves as the City’s primary online portal for economic development prospects, site location consultants, commercial real estate brokers, and other business decision-makers. The new sites should include features and information such as the following. ᶲ 8LI'MX]ƅWWTIGMƼGJYRGXMSRWVIPEXIHXSIGSRSQMG development (e.g., incentive programs, economic development initiatives, staff directory). *-+96)źBROADBAND CONNECTIVITY IN DENTON SHARE OF HOUSEHOLDS WITH ACCESS TO BROADBAND INTERNET AT HOME Sources: American Community Survey, 2018 5-year sample; TIP Strategies. COMPETITIVE DENTON STRATEGIES 952 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 40 ᶲ Focus on providing relevant details highlighting what makes Denton competitive for investment and talent in its strategic growth areas. ᶲ 4VIWIRXMRHITXLTVSƼPIWERHHIWGVMTXMSRWSJPSGEPERH regional workforce strengths. ᶲ Include testimonials from business leaders about why Denton is a great place to do business. This information can be captured during BRE visits. 2D.5.2. Establish a digital marketing campaign to highlight Denton’s economic development advantages and success stories. Develop baseline digital marketing tools and engage in regular digital marketing activities, including the following. ᶲ Infographics created to visually highlight Denton’s core assets and advantages. ᶲ Periodic LinkedIn Pulse articles that describe Denton’s competitive business advantages, using interviews with existing businesses to tell their story. ᶲ Weekly Facebook, LinkedIn, and Twitter posts linking to the Pulse article. ᶲ Short YouTube videos created to highlight what makes Denton a great community for businesses and residents. These videos can also be aired on Denton Television. 2D.5.3. Collaborate with the Denton Chamber of Commerce to create digital materials aimed at commercial real estate brokers, describing the attractive environment for business relocation. ᶲ Use the material to teach local brokers about the top selling points of Denton and why it stands out compared with the rest of the DFW Metroplex. COMPETITIVE DENTON STRATEGIES 953 41 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS TAKEAWAYS FOR DENTON ᶲ Leverage DME’s workforce and capabilities to lay the foundation for advanced XIGLRSPSK]FIRIƼXXMRKFSXLVIWMHIRXWERHFYWMRIWWIW ᶲ Create an inclusive and affordable broadband network for residents and businesses to enable growth and prosperity. ᶲ Market Denton as a technologically advanced and inclusive community to attract new residents and drive business investment in the city. BACKGROUND In the last half of the twentieth century, Chattanooga was a city in decline. Many VIWMHIRXWHMHRSXLEZIEGGIWWXSFVSEHFERHWIVZMGIWERHXEPIRX[EWƽIIMRKMR WIEVGLSJFIXXIVSTTSVXYRMXMIW8LI)RXIVTVMWI'IRXIV8)' ERSRTVSƼXTYFPMG private partnership, was created and tasked with growing a high-tech ecosystem in Chattanooga and improving its citizens’ lives through technology. To minimize power outages and create a smart grid for the city, EPB (Chattanooga’s municipal electric utility company) began to update its electrical KVMH[MXLƼFIVSTXMGGEFPIW)4&ERHGMX]SƾGMEPWVIEPM^IHXLEXYRMZIVWEPEGGIWWXS ƼFIVGSYPHEPWSWPS[XLISYXƽS[SJXEPIRXERHEXXVEGXFYWMRIWWIW Since then, TEC has prioritized research and development of the smart grid by connecting EPB and the University of Tennessee at Chattanooga with organizations across the nation. In 2019, EPB remains the only provider in the nation to offer residential 10-gigabit internet service. EPB’s territory extends over QMPIWERHMRGPYHIWQSVIXLERGYWXSQIVWJSVMXWXIPIGSQWIVZMGIWPROGRAM OUTCOMES (2019) ᶲ In 2009, EPB received $111 million from the US Department of )RIVK]XSFYMPHMXWƼFIVRIX[SVO ᶲ &IX[IIRERHEPQSWXNSFW[IVIGVIEXIHSV maintained in Hamilton County, Tennessee. Chattanooga KIRIVEXIHRIEVP]FMPPMSREWEHMVIGXVIWYPXSJMXWƼFIVSTXMG network. ᶲ Having the fastest internet connection in the nation has attracted major businesses (e.g., Volkswagen and Amazon), startups and investors, and led to the creation of an Innovation District. GIG CITY CHATTANOOGA, TN www.chattanoogagig.com COMPETITIVE DENTON CASE STUDY 41 954 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 42 GOAL 3 STRENGTHEN COMMUNITY INCLUSION 1ER]MRXLIIGSRSQMGHIZIPSTQIRXƼIPHEVIFIKMRRMRKXSVIGSKRM^IXLIimportance of inclusive economic growth to provide opportunity for all residents, particularly those with lower incomes or levels of educational attainment. An economic development strategic plan that does not address how to deliver broader prosperity to all constituents would be shortsighted. This is especially imperative for Denton, which has a larger share of low-income residents than its peers. The median household income in Denton MWJEPPMRKFIPS[XLISZIVEPPQIHMERLSYWILSPHMRGSQIMR(IRXSRCounty of $83,400 (American Community Survey, 2018 5-year sample). Efforts to grow Denton’s existing industries and attract new business investment will not guarantee that Denton’s vulnerable communities will be able to share in this prosperity. Denton cannot afford to leave existing residents behind. Addressing the challenges and barriers that low- and moderate-income residents face will be crucial to creating a more economically vibrant and resilient community. The City’s Economic Development Department and Community Development Department teams already recognize this reality and are collaborating on efforts to expand affordable housing in Denton. This collaboration should be expanded on and integrated with workforce development priorities. Expanding affordable housing options and building career pathways in high-demand industries are two central ways that the City can align its economic, workforce, and community development efforts XSFIRIƼX(IRXSRƅWQSWXZYPRIVEFPIVIWMHIRXW STRATEGIES AND ACTIONS 3.1. WORKFORCE COLLABORATIVE. Successful communities across the US are focused on aligning the needs of businesses and creating workforce pathways for residents. Denton should convene FYWMRIWWIWXVEMRMRKTVSZMHIVWERHRSRTVSƼXWXS[SVOXSKIXLIVMRcreating meaningful career pathways in critical sectors. 3.1.1. Build off the workforce collaborative, detailed in Strategy 1.4, to focus on workforce needs during the period of economic recovery. ᶲ Convening a workforce collaborative should be an ongoing task of the City’s Economic Development Department team. ᶲ 'SRRIGXER]IJJSVXWSJE(IRXSRWTIGMƼG[SVOJSVGIcollaborative to the work of the DCWSLT focused on the ALICE population. 3.1.2. Continue to convene regular meetings with major employers, Workforce Solutions, NCTC, and other providers to identify business needs and connect unemployed residents to jobs. Align economic, workforce, and community development efforts to meet critical community needs and to strengthen community inclusion. 955 43 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS ᶲ Considering COVID-19, the immediate focus should be on supporting unemployed residents in connecting to jobs or reskilling them for new opportunities. 3.1.3. Over the long term, identify two to three occupations and/or skills that are critical to Denton employers and develop pathways to support residents in moving into those roles. 3.1.4. Organize the collaborative around sharing data, coordinating demand and supply, aligning efforts to build talent pipeline, and streamlining BRE efforts. 3.2. HOUSING AFFORDABILITY. In addition to needing higher-end housing options (see Appendix A for more details), Denton also has a housing affordability issue. Compared to surrounding cities, Denton has a larger share of high-need populations. City leaders must address the needs of low- and moderate-income residents to ensure that Denton’s growth is equitable and inclusive. 3.2.1. Continue to collaborate with the City’s Community Development Department in supporting the development or redevelopment of affordable housing in south and east Denton. 3.2.2. 4VIWIVZII\MWXMRKLSYWMRKF]SJJIVMRKƼRERGMEPEWWMWXERGIJSVVITEMVWSVVIXVSƼXXMRKXSQEMRXEMRREXYVEPP]SGGYVVMRKEJJSVHEFPILSYWMRK ᶲ Work with community development organizations to leverage and scale up existing programs (versus creating new ones). ᶲ Coordinate with the organizations and individuals preparing the City’s affordable housing strategic plan to identify the best approach. 3.2.3. Leverage the federal Opportunity Zones incentive and New Markets Tax Credit to support the development of valuable projects that will support the needs of existing residents. ᶲ Work with the Community Development Department and community organizations to identify projects that need access to capital and can add value to under-resourced neighborhoods. ᶲ -HIRXMJ]WTIGMƼGTVSNIGXWXLEX[SYPHFIRIƼXXLIGSQQYRMX]and pitch the projects to investors in the DFW area with Opportunity Funds. ᶲ 3JJIVƼRERGMEPERHSXLIVMRGIRXMZIWXSJEGMPMXEXIXLIdevelopment of these projects. Utilize community development block grants and other economic development grants as well as support through City processes. ᶲ 7IIOTLMPERXLVSTMGJYRHMRKXSWYTTSVXTVSNIGXƼRERGIWMRSVHIVto reduce risk for developers and make affordable housing TVSNIGXWQSVIƼRERGMEPP]JIEWMFPI 3.2.4. Identify opportunities for adaptive reuse of existing buildings that can be converted into multiunit housing and preserve existing structures and utility connections. 3.2.5. Improve the development review process to decrease costs for those committed to building workforce and affordable housing. ᶲ Expedited reviews, fee reimbursements, and preapproved plans at low or no cost are best practices used by other communities. TALENT-DRIVEN ECONOMIC DEVELOPMENT PRIORITIES 1. “Realign state economic development spend to invest in proven training solutions, such as customized job training grants and community college partnerships. 2. Target economic development incentives towards opportunity-rich business practices that help build local talent pipelines. 3. Develop and disseminate new skills-based hiring tools that facilitate QSVIIƾGMIRXERHIUYMXEFPILMVMRKTVEGXMGIW 4. 8IWXRI[PSGEPXEPIRXƼRERGMRKWSPYXMSRWWYGLEWVIZSPZMRKPSERJYRHW that target training toward high-demand jobs. 5. Experiment with new regional Talent Exchange intermediaries that connect middle schools, high schools, community colleges, higher education institutions, and in-demand skills providers with businesses in key growth sectors.” —Joseph Parilla and Sifan Liu, Talent-Driven Economic Development: A New Vision and Agenda for Regional and State Economies, Brookings Institution, 2019. GOAL 3 STRATEGIES 956 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 44 3.3. GROW YOUR OWN TALENT INITIATIVE. One of Denton’s top assets is the young talent and energy that the City possesses, due in part to the presence of multiple universities. Over 58 percent of Denton’s population is below the age of 35. By strengthening youth programs and retaining QSVIKVEHYEXIW(IRXSRGERWMKRMƼGERXP]WXVIRKXLIRMXWXEPIRXTMTIPMRI and competitiveness for business investment. 3.3.1. Support youth entrepreneurship programs at the local level to foster a culture of innovation and cultivate an entrepreneurial spirit. ᶲ Support could include promotion of activities, programs, and IZIRXWƼRERGMEPWTSRWSVWLMTWSVTEVXMGMTEXMSRMRXLIIZIRX and/or planning. ᶲ )RXVITVIRIYVWLMTIHYGEXMSRMWWMKRMƼGERXJSVLIPTMRKPS[ income youth to develop skills and knowledge that will support XLIMVJYXYVIWYGGIWWERHFIRIƼXXLIMVGSQQYRMXMIW ᶲ The National Consortium for Entrepreneurship Education provides resources and technical assistance for entrepreneurial education (http://www.entre-ed.org). 3.3.2. Encourage Denton ISD to incorporate entrepreneurship into academic curricula and increase exposure and access to Denton’s startups. 3.3.3. Gather data from UNT, TWU, and NCTC about graduates, including how many students stay in Denton and the DFW Metroplex versus relocating to other parts of the state or country. ᶲ Identify programs or departments that produce graduates in industries and sectors related to Denton’s strategic growth areas. ᶲ Enhance student connections to the Denton community and businesses by creating internship opportunities, showcasing Denton businesses on campus, and targeting digital marketing for some events and programs to students. GOAL 3 STRATEGIES 957 CAPACITY AND RESOURCES 45 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 958 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 46 Denton’s ability to successfully modernize its economic development programs and implement this plan will depend on a revised approach to its governance and funding mechanisms for economic development. Additionally, the City will require more robust customer relationship management (CRM) systems to track leads and manage information about Denton’s businesses. This section describes considerations for Denton’s capacity and resources to carry out a modernized economic development approach. Recommendations and considerations are provided related to Denton’s EDP, funding resources for short- term economic recovery and long-term success, and internal systems for the City. ECONOMIC DEVELOPMENT PARTNERSHIP The Denton EDP was created in 1987 to formalize shared economic development responsibilities and functions between the City and the Denton Chamber of Commerce. One of TIP’s primary recommendations in the 2003 economic development strategic plan was to create the EDPB to oversee activities of both the City and the chamber. Since then, the EDPB has grown to include representatives from the public and private sectors, anchor institutions, and major constituencies across Denton. The goals and mission of the EDP remain relevant and appropriate for Denton’s economic development efforts. As Denton navigates economic recovery from the COVID-19 pandemic, the EDP will play a critical role in supporting businesses and residents. The economic fallout will be too great for individual organizations and entities to manage alone. It is pivotal that the EDP coordinates efforts to accelerate recovery. Once Denton’s economy recovers from the COVID-19 effects, the EDP will play a leading role in fostering growth and capitalizing on planned investments, such as the Cole and Hunter Ranch development. It will be more necessary than ever to have a high-functioning EDP that can be aggressive, targeted, and strategic in its approach to economic development. *MKYVI provides an overview of the EDP governance structure. Recommendations for the EDP structure include three changes. 1. Creating a partners working group with staff to coordinate core economic development activities. 2. Aligning representation on the EDPB with priorities and strategic growth areas outlined in this plan. 3. Changing the EDPB’s meeting cadence to a quarterly, rather than monthly, basis. *-+96)źECONOMIC DEVELOPMENT PARTNERSHIP STRUCTURE PARTNERS WORKING GROUP EDP BOARD Membership City, Chamber, DME staff, EDPB Chair or Vice-Chair Broad group of stakeholders Meeting Frequency Monthly Quarterly Purpose Coordinate economic development tasks and activities with a focus on prospect generation, business attraction, BRE, and marketing. Make strategic decisions related to Denton’s economic development goals and the resources necessary to meeting those goals. To facilitate closer coordination, the EDP needs a smaller working group, including primary partners who can manage day-to-day economic development activities. ᶲ This working group should be comprised of staff from the City, the chamber, and the DME. Regular participation from the EDPB chair and/or vice-chair should be included to bridge between the working group and full EDPB. ᶲ Monthly meetings of the partners working group will provide a regular cadence of check-ins about prospects and progress toward implementing the strategies and actions in this plan. A more focused and strategic EDPB should be revised to include representatives from critical sectors and organizations in Denton aligned to the strategies outlined in this plan. ᶲ EDPB meetings should be shifted to a quarterly schedule and focused on Denton’s broad economic development goals and the resources necessary to meeting those goals. ᶲ The current size of the EDPB should be maintained, but seats on the board should be revised to include new representation from the following sectors and functions. ᶲ Denton Municipal Electric ᶲ Entrepreneurship and/or technology ᶲ Workforce development ᶲ Community development ᶲ Marketing and/or tourism 959 47 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS ᶲ Additionally, the EDPB should explore using informal, ad hoc task forces EWRIIHIH XSEHZERGI[SVOEVSYRHWMKRMƼGERXMWWYIWPMOI'3:-( economic recovery and workforce development. FUNDING One of the reasons why Texas is one of the most economically competitive states in the country is a statewide policy allowing local communities to dedicate a portion of their sales tax to fund economic development corporations (EDCs). Communities across the state utilize Type A (focused on industrial development) or Type B (focused on industrial development, parks, museums, sports facilities, and affordable housing) EDCs in order to fund economic development projects. As evidenced in Figure 7, many of Denton’s surrounding neighbors dedicate resources toward economic development in this way. Denton has elected to dedicate its sales tax resources to the DCTA rather than create an EDC. With a sizeable portion of the City’s land off the tax rolls, most of the City’s total revenue comes from sales tax and property taxes from a WQEPPIVKVSYTSJFYWMRIWWIWERHLSYWILSPHW(IRXSRRIIHWXSƼRHGVIEXMZI ways to increase the level of resources dedicated to economic development efforts. Successful implementation of this strategic plan will demand increased investment. ECONOMIC RECOVERY AND RELIEF In the short term, Denton’s resources should be focused on providing relief to and accelerating recovery for business and residents. This can be challenging for many communities, as the level of need far exceeds the resources and capacity available. Furthermore, local governments will likely see a decline in their budgets as revenue from sales and other taxes have decreased during the COVID-19 pandemic. Fortunately, Denton County received a large share of the federal 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act and plans to use $24 million for business support. Communities across the US have implemented a few best practices in supporting economic recovery that might be models for Denton. In addition to the strategies highlighted under Goal 1 Accelerate Recovery, the City should apply for federal stimulus funds, repurpose existing tools, and create public- private initiatives. ᶲ APPLY FOR FEDERAL STIMULUS FUNDS. The EDA allocated $1.5 billion from the CARES Act to supplement existing funds dedicated to the Public Works and Economic Adjustment Assistance programs. These programs provide economically distressed communities and regions with funds to support job creation and retention, innovation, enhanced manufacturing, workforce development, and business investment. Some census tracts within Denton meet economic distress criteria. The City’s Economic (IZIPSTQIRX(ITEVXQIRXXIEQLEWEPVIEH]MHIRXMƼIHTSXIRXMEPTVSNIGXW XLEX[MPPFIRIƼXMQTSVXERXGSQQYRMXMIWERHTVMSVMXMIWMR(IRXSR)JJSVXWXS package a possible grant submission to the EDA should be prioritized, as this is a prime opportunity to leverage federal funds to accelerate economic recovery and to support catalyst projects. ᶲ REPURPOSE EXISTING TOOLS. As Denton businesses start to reopen, it is possible that county-level funds will be enough to meet the needs of the business community. However, as the City continues to develop an understanding of how economic recovery is unfolding, there might be gaps MRVIPMIJERHVIGSZIV]XSSPWXLEXGERFIƼPPIHF]XIQTSVEVMP]VIZMWMRKI\MWXMRK tools. For example, the EDP Investment Fund, TIRZ funds, and Chapter 380 KVERXWQMKLXRIIHXSFIVITYVTSWIHXSFIRIƼXKVSYTWXLEXEVIYREFPIXS access county or federal funds. The City could provide targeted supports by GVIEXMRKQSVIƽI\MFMPMX][MXLMRI\MWXMRKXSSPW ᶲ CREATE PUBLIC-PRIVATE INITIATIVES. Some communities have formed a public-private partnership to coordinate resources across organizations, provide technical assistance for businesses applying for federal funds and sharing information about the effects of COVID-19 across their cities. Denton is already doing this to provide rental and residential utility assistance. A more robust example of this is #BhamStrong, a public-private partnership formed in Birmingham, Alabama. The partnership includes local businesses, the United Way, the municipal government, and more. Partners have created EVIWSYVGIHMVIGXSV]JSVFYWMRIWWIWERHVIWMHIRXWWIIOMRKVIPMIJƼRERGMEP assistance, and information. While existing resources might be limited for the City, creating an economic relief fund in collaboration with the chamber might be helpful in aiding recovery efforts. Alternatively, repurposing the EDP Investment Fund in the short term to provide relief and recovery aid is another option. The regional economic development group formed with the chamber, Denton County, and other economic development partners could potentially be expanded to play a stronger role in aggregating information, providing technical assistance, and offering other resources during economic recovery. 960 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 48 *-+96)źSALES AND USE TAX ELECTIVES AS OF MARCH 2020 Sources: Texas Comptroller of Public Accounts; TIP Strategies. Note: Larger bubble sizes indicate higher elective rates. Circles appearing gray in color are locations with both A and B type electives. 961 49 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS UTILITIES Percentage contribution from utility for economic development activities CITY Incentive rollbacks or earmarked percentage of tax revenue from future developments BUSINESSES Fundraising campaign led by the Denton Chamber to increase private sector engagement DENTON CATALYST FUND DENTON CATALYST FUND Denton’s economic competitiveness over the long XIVQ[MPPVIUYMVIQSVIWMKRMƼGERX investment in economic development. Many strategies outlined in this plan depend on an increased investment in economic development efforts. It is paramount that Denton’s leaders make a strong commitment to increasing resources dedicated to economic development. Figure 8 provides information about the level of resources invested in economic development by some of Denton’s surrounding communities. Many communities in Texas dedicate a portion of their sales tax for economic development. These resources are often funneled through local EDCs that are categorized by the intended use of those funds. Type A EDCs support industrial development projects, such as business infrastructure, manufacturing, research and development, job training, and public transportation. Type B EDCs can support not only all projects eligible for Type A funding but also parks, museums, sports facilities, and affordable housing. Without sales tax election for economic development, Denton’s best course of action is to establish a catalyst fund that can be used not only to provide MRGIRXMZIWFYXEPWSJYRHWTIGMƼGTVSKVEQWXSKVS[(IRXSRƅWIGSRSQ]'EXEP]WX funds can also be used to support transformational projects or provide seed funding for innovative initiatives. Several successful communities in Texas are turning to similar funds as either an alternative to Type A or Type B EDCs or to supplement the work of their EDCs. Developing a catalyst fund will allow Denton to better meet the strategic SFNIGXMZIWERHKSEPWSJXLMWTPERLS[IZIVQEMRXEMRMRKƽI\MFMPMX]MRHIXIVQMRMRK how to build resources to meet those goals will be necessary. What is possible and reasonable for other DFW communities might not be for Denton. It is up to Denton’s leaders to determine what level of commitment and investment they should make for economic development. Increasing Denton’s level of investment in economic development will require gradually building resources over time, and the level of resources needed to carry out the City’s strategic goals will likely not be static from year to year. Ultimately, a catalyst fund will provide Denton with more options and mechanisms to better support economic development initiatives and projects aligned with the City’s strategic priorities. A catalyst fund is often comprised of resources from both the public and private sectors. Aggregating resources from several sources not only increases the level of resources available but also builds broad community support for economic development. Typically, contributions to a catalyst fund come from major businesses and institutions as well as public investments from local and/or regional governments. In addition to public and private resources, one of Denton’s greatest untapped assets for economic development is DME. Denton can draw on its utility, public resources, and businesses to create a robust catalyst fund appropriate for modernized economic development efforts (Figure 9). ᶲ UTILITIES. Communities with municipally owned utilities often leverage their utilities to support economic development efforts. Beyond providing competitive rates and supporting incentive packages, some utilities transfer a percentage of utility revenues into a fund dedicated to economic development. This contribution is made on top of revenue transfer into a *-+96)źECONOMIC DEVELOPMENT CORPORATION REVENUE FOR SELECT- ED DFW CITIES (2019) CITY SALES TAX TYPE TOTAL EDC REVENUE ($ MILLION) Allen Type A $13.5 Type B $11.1 Coppell Type B $13.1 Flower Mound Type B $3.2 Frisco Type A $43.0 Type B $29.6 Grapevine Type B $19.3 Lewisville Type B $9.0 McKinney Type A $16.7 Type B $14.1 Southlake Type A $6.3 Type B $8.0 Source: Texas Comptroller of Public Accounts. *-+96)źRECOMMENDED STRUCTURE FOR A DENTON CATALYST FUND 962 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 50 GMX]ƅWKIRIVEPJYRH-REHHMXMSRXSGSRXVMFYXMRKƼRERGMEPVIWSYVGIWEYXMPMX] can also support economic development through education and workforce development programs that build the talent pipeline for a city’s primary industries. More information about creative uses of municipal utility funds can be found in Appendix C. ᶲ CITY RESOURCES. Cities often contribute resources to an economic development fund that can be used to provide incentives for business attraction or to support economic development programs. There are several ways that cities set aside resources for economic development. The most common way is to fund economic development through a general fund. Alternatively, cities can adopt policies to roll back expired incentives into other economic development efforts. Some communities earmark a portion of anticipated tax revenue from future developments to support economic development. For example, the City could earmark a portion of future tax revenue from the Cole and Hunter Ranch development for an investment in the catalyst fund. This would require consideration by and approval from City Council members. ᶲ BUSINESS INVESTMENT. It is critical that existing businesses continue supporting economic development efforts that will grow Denton’s IGSRSQ]7YGGIWWJYPERHIJJIGXMZIGEXEP]WXJYRHWVIUYMVIWMKRMƼGERX FYWMRIWWIRKEKIQIRXMRFSXLƼRERGMEPWYTTSVXERHTEVXMGMTEXMSRMR economic development efforts, such as business attraction and support for education and workforce development. Existing businesses often invest in a catalyst fund to maximize the effectiveness of their investments in their communities and efforts to improve economic conditions. A business-oriented organization, such as a chamber of commerce, is usually responsible for leading a fundraising campaign and ensuring continued business engagement. These organizations can set up and manage funds more easily than public sector partners. INCENTIVES Cities invest in economic development efforts in many ways. Most cities TVSZMHIƼRERGMEPERHSVSTIVEXMSREPWYTTSVXJSVTVSKVEQWERHMRMXMEXMZIW that support residents and businesses. For example, entrepreneurship and business recruitment programs often receive municipal support. In addition, GMXMIWQEOIMRJVEWXVYGXYVIMQTVSZIQIRXWXLEXLEZIEWMKRMƼGERXIJJIGXSR growth and development. Marketing, site selection support, and data analysis are also common functions provided by municipal economic development departments. Incentives are also common ways that cities support economic development efforts. They are only one tool used by cities, and there are many types of incentives that can be offered to support economic growth. Figure 10 highlights the portfolio of incentives provided by a select group of DFW communities. Denton already utilizes most incentives used by other cities; therefore, the City should update its incentive policies to align with the goals of this strategic plan in order to continue being competitive in the DFW market. Resources from a catalyst fund should support the development of various incentive funds that will promote the goals and priorities listed in this strategic plan. Currently the City’s primary vehicles for economic development investments are the EDP Investment Fund, the Westpark TIRZ, and the downtown TIRZ. Allocating resources for more targeted incentive funds will allow the City to better support its goals. Figure 11 includes a listing of recommended incentive funds. The City will likely need to adopt a phased approach to building these funds. 963 51 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS *-+96)źECONOMIC DEVELOPMENT INCENTIVES OFFERED BY SELECTED DFW CITIES ALLENCARROLLTONCOPPELLFARMERS BRANCHFLOWER MOUNDFRISCOGRAPEVINEIRVINGLEWISVILLEMCKINNEYRICHARDSONSOUTHLAKEDENTONJob cash grants Property tax abatements Sales tax rebates/credits ** Fee waivers (impact or permit)* Infrastructure grants 7TIGMEPHMWXVMGXƼRERGMRK(TIRZ, TIF, FTZ, PID) Expedited services * *-+96)źPROPOSED INCENTIVE FUNDS FUND PURPOSE GOAL ALIGNMENT DESCRIPTION Business recruitment Multiple goals Fund for recruiting and attracting new businesses to Denton. Business retention and expansion Goal 2A: Connected Denton Fund for the retention and expansion of existing businesses, particularly in the Westpark Industrial Park area. Infrastructure, utilities, and development assistance Goal 2D: Competitive Denton Fund to support major infrastructure and development needs, including broadband connectivity. Job-based grants Multiple goals Grants to businesses based on number of jobs and wages. Innovation and entrepreneurship Goal 2B: Creative Denton Fund to grow and expand Denton’s entrepreneurship ecosystem. Access for historically underutilized businesses (HUBs) Goal 2B: Creative Denton Fund to provide resources to businesses owned by women and people of color in Denton. Green incentives Goal 2C: Sustainable Denton Fund providing incentives to attract environmentally conscious businesses or WYTTSVXKVIEXIVIRIVK]IƾGMIRG] 'PEWW%SƾGIWTEGIHIZIPSTQIRXGoal 2D: Competitive Denton *YRHXSMRGIRXMZM^IXLIHIZIPSTQIRXSJ'PEWW%SƾGIWTEGIIWTIGMEPP]MRXLIdowntown area. Affordable housing or housing redevelopment Goal 3: Strengthen Community Inclusion Fund to support the City’s affordable housing goals and priorities. *Carrollton only provides sales tax rebates for data centers. Irving provides sales tax rebates for certain retail projects. McKinney provides general permitting and inspection assistance. Denton provides expedited development WIVZMGIWJSVEJII%GVSR]QWEVIHIƼRIHEWJSPPS[W8-6>XE\MRGVIQIRXVIMRZIWXQIRX^SRI 8-*XE\MRGVIQIRXƼRERGMRK *8>JSVIMKRXVEHI^SRI ERH4-(TYFPMGMQTVSZIQIRXHMWXVMGX Source: TIP Strategies research. 964 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 52 PROGRAMS AND POLICIES 8LIWXVEXIKMIWERHEGXMSRWSYXPMRIHMRXLMWTPER[MPPVIUYMVIWMKRMƼGERXGLERKIW to the City’s current economic development program; however, it is important to VIQIQFIVXLEXXLMWMWEPSRKXIVQTPERMRXIRHIHXSFIVIƼRIHERHMQTPIQIRXIH over a 5-year horizon. TIP will provide the City with a detailed implementation matrix with recommendations for how to phase all the strategies and actions in this plan. Figure 12 summarizes potential new programs and policies that will need to be enacted. While this plan has laid the foundation for what the City needs to do, the process to implement the strategies and actions will likely require several additional steps for the Economic Development Department and its partners. A framework for developing new programs and policies for adoption includes the following steps. ᶲ RESEARCH AND ANALYSIS. The City’s Economic Development Department might need to conduct additional research and analysis to provide details for a new program or policy. For example, the development of an edtech alliance (see Strategy 2B.4.2) will likely require additional research about models of similar alliances from which Denton can adopt. Analysis of existing edtech companies in Denton and trends in the edtech sector should also be conducted to inform a new program. ᶲ PARTNER CONVENING. Many of the strategies recommended require the City to work in partnership with other economic and workforce development organizations in Denton and the DFW Metroplex. Where existing partnerships do not yet exist, the City might need to convene potential partners to discuss how the entities can collaborate and for what purpose. For example, the Denton Innovation Group and Stoke could be partners with the City in developing an entrepreneurship knowledge resource network. ᶲ POLICY DEVELOPMENT.3RGIWTIGMƼGTEVEQIXIVWSJERI[TVSKVEQSV JYRHEVIMHIRXMƼIHXLI'MX]ƅW)GSRSQMG(IZIPSTQIRX(ITEVXQIRXWLSYPH draft policies for adoption by the EDPB and the City Council. Not all programs might require formal policy adoption. New incentive funds will likely require new policies to outline fund eligibility and requirements. Figure 12 lists a few policies that might need to be developed or revised in order to meet the strategic goals of this plan. Staff will be able to craft more detailed policies after conducting additional research and gathering information from TEVXRIVWJSVXLIWTIGMƼGJSGYWEVIE ᶲ IMPLEMENTATION. The City can move into an implementation phase once these additional steps have been completed. Again, not all programs or policies will require staff to go through each step. Additional work required to implement new programs and policies will vary based on numerous factors, including the level of resources required, whether there are existing partnerships, and the level of oversight by the EDPB and/or City Council. Implementation is also an MXIVEXMZITVSGIWWXLEX[MPPVIUYMVIXLI'MX]XSGSRXMRYEPP]VIƼRIERHMQTVSZIMXW strategies and actions. Flexibility is necessary for the City to adapt to changing economic conditions, address challenges in a timely manner, and respond to new opportunities that will emerge. *-+96)źRECOMMENDED NEW PROGRAMS AND POLICIES NEW PROGRAMS NEW OR REVISED POLICIES ᶲ Center of excellence for logistics and supply chain management ᶲ Entrepreneurship knowledge resource network ᶲ Pitch and reverse-pitch competitions ᶲ Startup accelerator ᶲ Edtech alliance ᶲ Broadband connectivity initiative ᶲ Expanded workforce collaborative ᶲ Youth talent initiative ᶲ Eligibility requirements and policies for each incentive fund (Figure 11) ᶲ Adoption of sustainable development goals (SDGs) ᶲ Revision of policies associated with the EDP Investment Fund, Westpark TIRZ, and downtown TIRZ (as needed) MARKETING ,S[EGMX]MWTIVGIMZIHƂF]XLITYFPMGF]ZMWMXSVWF]XLIQIHMEF] GSVTSVEXMSRWERHF]WMXIWIPIGXSVWƂMWGVYGMEPXSMXWIGSRSQMGLIEPXL8LMW TIVGITXMSRGERFILIEZMP]MRƽYIRGIHF]QEVOIXMRKTVSKVEQW8LIQSWX effective city marketing efforts build on a community’s existing brand and tell authentic stories that highlight local assets. A common theme that emerged from stakeholder input was that Denton needed to do a better job of marketing itself and telling the “Denton story” to a variety of audiences, including prospective residents, business prospects, and visitors. Effective marketing can also foster a greater sense of community and build stronger ties of existing residents to Denton. 965 53 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS While this plan is not meant to serve as a comprehensive marketing EWWIWWQIRX(IRXSRGSYPHFIRIƼXJVSQVIJVIWLIHERHVIFVERHIHQEVOIXMRK Given the new priorities and focus areas outlined in this strategic plan, the City should conduct a more extensive review of its current marketing efforts, realign marketing to the goals of this plan, and create more sophisticated branding that promotes Denton’s people, businesses, and assets. The City should consider undertaking the following steps to refresh its marketing and branding efforts. ᶲ REGIONAL MARKETING AUDIT. A marketing audit will allow Denton to gain a sense of the image it is projecting. What do people think of when they think of Denton? What is Denton’s current image to different audiences? Marketing audits typically include a review of other organizations’ websites to assess how Denton is conveyed and promoted (if at all) by other economic and workforce development organizations. ᶲ MARKETING PLAN. Based on information gathered through the marketing audit, the City should create a more comprehensive marketing plan that includes new messaging and branding. A marketing plan will help the City determine the kind of image and messaging it wishes to convey to potential residents and businesses. ;LMPIEWXVSRKIVQEVOIXMRKTPER[MPPFIFIRIƼGMEP8-4LEWEPWSMHIRXMƼIHEJI[ strategies in this plan that touch on the need for marketing improvements. ᶲ 2B.6. PROMOTING DENTON’S CREATIVE BRAND. Incorporate entrepreneurship into Denton’s marketing. The purpose of this is to both MHIRXMJ]WTIGMƼGVIWSYVGIWJSVIRXVITVIRIYVWERHXSVEMWIE[EVIRIWW about entrepreneurial success stories in Denton. ᶲ 2C.4. GREEN MARKETING. Include Denton’s sustainability goals and successes in the City’s marketing materials. Denton’s leadership in renewable energy and sustainability is a way to distinguish this community from others for both placemaking and economic efforts. ᶲ 2D.5. DIGITAL MARKETING. Lean on more digital channels to communicate the “Denton story” to different audiences. The City can do more to leverage digital platforms to raise awareness about Denton as a desirable place for people and businesses. ᶲ DIGITAL MARKETING MATERIALS. Information from a marketing audit and plan will inform what kinds of information should be included in new digital marketing materials. Modern economic development programs rely on digital marketing materials and social media to communicate to external EYHMIRGIW-RJSVQEXMSRWYGLEWXLI'MX]ƅWWTIGMƼGIGSRSQMGHIZIPSTQIRX functions (e.g., incentives, initiatives, staff contacts) should still be included. %HHMXMSREPP]XLI'MX]RIIHWXSGSQQYRMGEXIMXWWTIGMƼGZEPYITVSTSWMXMSRJSV different industries and sectors (i.e., what does Denton offer for entrepreneurs and companies interested in sustainability). Leading examples of high-quality economic development marketing include Tampa Bay EDC, Fairfax County Economic Development Authority, One Columbus, and Thrive in Fort Worth. INTERNAL SYSTEMS In addition to a revised governance structure and increased funding, the 'MX]GEREPWSFIRIƼXJVSQQSHIVRM^MRKMRXIVREPW]WXIQWXSXVEGOHEXEERH manage information about businesses. Like all business enterprises, the ability to quickly access reliable data is an essential feature of successful economic development organizations. Creating and maintaining well-organized information systems helps facilitate the best decision-making. The City’s Economic Development Department has already made great strides in improving its internal systems over the past few years. As Denton navigates economic recovery and returns to a path of growth, the need for strong systems will be even greater. High-functioning economic development organizations all LEZISVKERM^IHERHGIRXVEPM^IHMRJSVQEXMSRW]WXIQWXLEXEVIƽI\MFPIIRSYKLXS easily share information with partners. The core systems that the City should invest in and continue to improve include the following. ᶲ DATABASE OF DENTON BUSINESSES. A database of existing businesses is central to BRE efforts. Information gathered about business needs, challenges, and successes should be recorded in the database on a regular basis. It is paramount that this database is up to date so the City can generate timely reports, identify potential warning signs, and make decisions about how to support Denton’s businesses and employers. ᶲ CENTRALIZED PROSPECT/LEAD GENERATION SYSTEM. Having a centralized system to track prospects and leads is crucial so that information (and therefore opportunities) is not lost between partner organizations. Standardized information gathered about prospects should be entered into the system and be used to develop a package for potential businesses. ᶲ RELATIONSHIPS/CONTACTS DATABASE. As the Economic Development Department team builds relationships across the City, the DFW Metroplex, and beyond, maintaining an updated contacts database is vital. As RSXIHXLVSYKLSYXXLITPERRIX[SVOMRK[MXL:'ƼVQWIRXVITVIRIYVWLMT organizations, and regional economic development entities is a central function that the City needs to play. A relationships/contacts database is vital to facilitating that relationship building. 966 ᶲ PROCESS AND POLICY DOCUMENTATION. The City needs a more organized way to document different processes and polices associated with economic development. For example, the process and cadence by which the City conducts BRE visits should be clearly documented for the FIRIƼXSJGYVVIRXERHJYXYVIWXEJJEW[IPPEWQSVIGSRWMWXIRG]MRFYWMRIWW engagement. Updates to policies should also be documented in a clear and accessible manner for both City staff as well as partners, including the EDPB and the chamber. ᶲ PERFORMANCE MEASUREMENT. Tracking a short set of meaningful metrics is important for evaluating progress toward desired outcomes. The City should establish a mechanism for tracking reporting metrics to the EDPB and the City Council to establish transparency and accountability for achieving economic development goals. Metrics can rally partners around a common vision and standard for progress. Suggested metrics are provided in the next section. ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 54 967 STRATEGIC PERFORMANCE METRICS 55 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 968 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 56 A critical component of a successful strategic plan is the set of metrics by which the plan’s implementation is tracked. It is imperative that the EDPB and the City Council focus on a set of strategic metrics to track progress on critical economic outcomes. Staff should create a performance dashboard that can be used to communicate performance metrics to City leadership on a regular basis. This is vital to tracking progress as well as maintaining accountability throughout the implementation of this plan. Figure 13 provides a list of performance metrics that are intended to focus the EDPB and the City Council on high-level strategy and outcomes; however, the City’s staff will also need to identify programmatic and operational metrics to XVEGOTVSKVIWWXS[EVHTVSKVEQWTIGMƼGKSEPW8-4WXVSRKP]VIGSQQIRHWXLEX the City disaggregate metrics by race and ethnicity where possible and that disaggregated data is shared in a transparent manner. *-+96)źRECOMMENDED STRATEGIC PERFORMANCE METRICS GOAL ALIGNMENT LEGEND:Economic Recovery SConnected Denton SCreative Denton SSustainable Denton SCompetitive Denton zCommunity Inclusion METRIC DESCRIPTION SOURCE GOAL Unemployment rate Unemployment rate, overall and by gender and race/ethnicity.Texas Workforce Commission Labor force participation Civilian labor force participation rate.US Census Bureau American Community Survey Employment gap Percentage difference in employment rate between white and people of color (ages 16-64).US Census Bureau American Community Survey Retail sales growth Rate of growth or decline in retail sales within Denton. Texas Comptroller Job growth Number of jobs created and retained.Texas Workforce Commission, business surveys, and interviews S Vacancy rate Percentage of Westpark Industrial Park area with vacancies. In-house data collection, business surveys, and interviews S Startup survival Percentage of startups that are active after 1 year and 5 years. In-house data collection, business surveys, and interviews S New business establishments Number of new businesses in Denton and year-to-year growth. In-house data collection, business surveys, and interviews S Access to capital Number and dollar value of venture capital, angel investment, or other capital for startups.In-house data collection, business surveys, and interviews S Energy competitiveness Electricity cost rate (and comparison to peers).DME S )RIVK]IƾGMIRXFYWMRIWWIW 4IVGIRXEKISJFYWMRIWWIWFIRIƼXMRKJVSQJIHIVEPIRIVK]IƾGMIRG]XE\GVIHMXWSVPSGEP rebates.In-house data collection, business surveys, and interviews S Downtown retail occupancy Occupancy rate of downtown retail spaces (or vacancy decline).In-house data collection, business surveys, and interviews S Downtown housing Increase in downtown housing units over time.In-house data collection, business surveys, and interviews S 3ƾGIWTEGI %QSYRXSJRI[SƾGIWTEGIWUYEVIJIIX EHHIHEW[IPPEWZEGERG]VEXIRegional commercial real estate brokerage (e.g., Jones Lang LaSalle—JLL)S Broadband internet access Percentage of population without access to broadband internet access. US Census Bureau American Community Survey S Talent availability Population 25+ with associate’s degree or higher.US Census Bureau American Community Survey z Population 25+ with bachelor’s degree or higher.US Census Bureau American Community Survey z Cost-burdened households Percentage of households spending more than 30 percent of income on rent or mortgage. US Census Bureau American Community Survey z Portion of jobs at a livable wage Percentage of jobs in Denton that pay a living wage (see MIT living wage calculator). Texas Workforce Commission, Massachusetts Institute for Technology z 969 APPENDICES 57 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 970 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 58 %44)2(-<%źDATA FINDINGS ECONOMIC INDICATORS AND DEMOGRAPHICS ᶲ ESTABLISHED AND GROWING INDUSTRIES. The education and healthcare sectors continue to dominate in Denton, together accounting for nearly one-third of total employment in 2019.1 Manufacturing employment has steadily risen in recent years, focused on automobile and related component manufacturing, and has overtaken retail and accommodation/food services as the third largest industry sector in the City. 8LIXVERWTSVXEXMSRERH[EVILSYWMRKWIGXSVLEWEPWSFIGSQIEWMKRMƼGERX source of jobs in Denton since 2017, employing nearly 4,000 workers in 2019.1 These employment trends support the notion that Denton has been successful in strengthening some of its existing target sectors, such as supply chain logistics and advanced manufacturing. ᶲ BUILDING AN INCLUSIVE AND DIVERSE DENTON. Compared to neighboring communities, Denton is racially and ethnically diverse with BIPOC residents accounting for more than 40 percent of the population in 2018.2 Among these, the Hispanic or Latinx population is the largest, representing more than half the non-white population and nearly one-quarter of all residents. Leaders should pay close attention to the developing needs of Denton’s relatively large, BIPOC population in the wake of the COVID-19 crisis in order to promote inclusive economic recovery across racial, ethnic, and socioeconomic groups. ᶲ TRAINING AND RETAINING TALENT. Though the presence of two major higher education institutions can attract economic and research activity and talent, Denton has not been able to retain a workforce as educated as its neighboring communities. Denton is educating a substantial number of workers with potential to enter the labor market.2 However, less than 40 percent of Denton residents 25 and older have a bachelor’s degree or higher, compared to well over 50 percent in neighboring Plano and Frisco.2 This suggests that Denton’s college graduates are leaving the City to work elsewhere, possibly to seek higher wages. Denton’s relatively low household median income is partially attributable to the presence of two large universities, where students tend to have lower incomes, but Denton also lacks a base of moderate-to-high-income households compared to nearby GSQQYRMXMIWƂXLIVIEVIEFSYXLSYWILSPHWMR(IRXSR TIVGIRX [MXLER income over $150,000, compared to about 14,000 in McKinney (about 25 percent) and over 22,000 in Frisco (>40 percent).2 ŵ97&YVIEYSJ0EFSV7XEXMWXMGW)QWMƂ5');UYEVXIVP]GIRWYWSJIQTPS]QIRXERH[EKIW )QTPS]IIW Non-QCEW Employees, and Self-Employed. The City of Denton is based on the aggregation of 10 ZIP Codes (76201, 76202, 76203, 76204, 76205, 76206, 76207, 76208, 76209, and 76210).ŵ%QIVMGER'SQQYRMX]7YVZI]]IEVWEQTPI HOUSING ᶲ MORE MULTIFAMILY HOUSING. Denton has a larger share of multifamily housing and renters compared to its neighbors, in part because of the student population’s need for short-term housing options. Almost half (47.8 percent) of all housing units in Denton were occupied by renters in 2018, compared to about one-third in Plano and McKinney, respectively, and less than one-quarter in Frisco, Corinth, and Argyle.2 Moreover, multifamily housing accounted for nearly 40 percent of Denton’s housing stock as of 2018, compared to one-third of Plano’s and less than one-quarter of McKinney’s, Frisco’s, Corinth’s, and Argyle’s.2 ᶲ STRADDLING AFFORDABILITY. The median home value and rent in Denton were much lower than the surrounding communities in 2018 (more than half of Denton’s owner-occupied housing was valued under $200,000).2 Relatively lower housing costs than neighboring communities make Denton more attractive for those seeking affordable housing in the northern DFW Metroplex. However, more than one-quarter of Denton homeowner households are cost-burdened (spend more than 30 percent SJMRGSQISRLSYWMRK ƂELMKLIVVEXIXLERXLIWYVVSYRHMRKGSQQYRMXMIW with higher housing costs.2 Because Denton household incomes tend to be lower than those in neighboring communities, many households struggle with housing costs even at relatively reduced rates. For instance, suppose a (IRXSRLSYWILSPHIEVRMRKXLIQIHMERMRGSQI [LSGYVVIRXP]VIRXW EXXLIQIHMERQSRXLP]VEXI [ERXWXSFY]EQIHMERTVMGIHLSQI 2 Depending on the mortgage terms, monthly payments range from $800 to $1,200.3 While those able to get more favorable loan terms QMKLXFIEFPIXSQEOITE]QIRXW[MXLSYXƼRERGMEPWXVEMRSXLIVLSYWILSPHW [MXLPS[IVHS[RTE]QIRXWERHLMKLIVMRXIVIWXVEXIW[SYPHPMOIP]ƼRHXLI mortgage payment unaffordable. ᶲ HIGHER-VALUE HOUSING. In addition to its affordable housing challenge, Denton also has fewer high-value homes that are often needed to attract professional service businesses. Denton lacks a substantial stock of high- value housing (less than 18 percent of owner-occupied homes were valued over $300,000 in 2018),2 which stakeholders cited as a challenge in recruiting high-paying jobs and professionals to the City. In comparison, over 47 TIVGIRXSJ4PERSƅWERHSZIVTIVGIRXSJ*VMWGSƅWS[RIVSGGYTMIHLSQIWEVI valued above $300,000. ŵ)WXMQEXIHQSVXKEKITE]QIRXWERHEWWSGMEXIHEJJSVHEFMPMX]GEPGYPEXIHYWMRKEQSHMƼIHZIVWMSRSJ8I\EWA&M University Real Estate Center’s Housing Affordability Index. 971 59 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS COMMUTING PATTERNS ᶲ EXCHANGING LABOR IN DFW. In 2017, more than 43,000 Denton residents had jobs outside the City.4 More than half those jobs (22,000) were in nine DFW cities with Dallas and Fort Worth together accounting for over 10,000 jobs. Among those 22,000 jobs, about half earned less than $40,000 annually.4 In contrast, about 39,000 Denton workers who lived outside the City in 2017 had residences spread more evenly across DFW communities (i.e., 30 DFW cities account for about half these workers), and more than two-thirds of these workers (27,000) earned less than $40,000 annually.4 This suggests that the jobs in Denton that attract workers from outside the region tend to be lower-earning positions compared to the jobs many Denton residents seek outside the City. In other words, the commuting story in (IRXSREPWSVIƽIGXWXLIRSXMSRXLEXXLI'MX]QMKLXFIPSWMRKWOMPPIHPEFSVXS neighboring regions with higher-wage job opportunities. ECONOMIC DEVELOPMENT RESOURCES ᶲ GROWING DIVERSE TAX REVENUE STREAMS. Denton’s tax revenue sources have followed the same general trend between 2009 and 2018; property tax accounts for more than one-third of revenues (averaging 38 percent over 10 years), sales and use tax generate an average of 20 percent, franchise fees at 15 percent, and other sources make up the remaining 25 percent.5 Additionally, the City saw substantial revenue growth in 2017 (11 percent increase) and 2018 (19 percent increase) driven mostly by increased property tax revenues and other sources.5 Denton appears to have more diverse tax revenue sources than neighboring communities that depend more heavily on property and sales and use taxes. ᶲ AN OPPORTUNITY FOR MORE ROBUST ENTREPRENEURSHIP. The DFW 1IXVSTPI\LEWVIGIMZIHQSVIXLERFMPPMSRMRGETMXEPJYRHMRKJSVWXEVXYTW since 2009, and about two-thirds of this capital was invested in Dallas, Plano, and Irving startups. Though investors tend to be based in the capital hubs outside the state (nearly half of investment funds are sourced from California, Massachusetts, and New York), Texas accounts for about one- ƼJXLSJXLIJYRHMRK[MXLQSWXHSPPEVWGSQMRKJVSQ(EPPEWMRZIWXSVW" ŵ03()70SRKMXYHMREP)QTPS]IV,SYWILSPH(]REQMGWƅ3VMKMR(IWXMREXMSR)QTPS]IV7XEXMWXMGW ŵ8-47XVEXIKMIWEREP]WMWSJXLIQSWXVIGIRX'%*6WGSQTVILIRWMZIERRYEPƼRERGMEPVITSVXW JSV(IRXSRERHselected DFW communities. Revenue categories are generally consistent across most Texas municipal CAFRs: property taxes, sales and use taxes, and franchise fees. Other revenues is a catchall term for all other taxes and WIVZMGIJIIWJSVKSZIVRQIRXERHFYWMRIWWX]TIEGXMZMXMIW(IRXSRW'%*6WTIGMƼGEPP]RSXIWSRTEKIXLEXXLI IPIGXVMGJYRHMWRSXWLS[RWITEVEXIP]HYIXSGSRƼHIRXMEPMX]SJMRJSVQEXMSRRIGIWWEV]JSVGSQTIXMXMZIVEXIW ŵ-RZIWXQIRXHEXEJVSQ'VYRGLFEWIƂEGVS[HWSYVGIHHEXEWIXXLEXMWRSXGSQTVILIRWMZI%REP]WMWSJ:'JYRHMRKshould be interpreted with this limitation in mind. million). Denton’s startups have not received much of this funding ($3.2 million).-XQMKLXFIRIƼXXLI'MX]ƅWHIZIPSTMRKIRXVITVIRIYVMEPIGSW]WXIQXS RIX[SVO[MXL:'ƼVQWERHWXEVXYTWMRXLI(*;1IXVSTPI\ 972 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 60 %44)2(-<&źSWOT ANALYSIS A thorough SWOT analysis of Denton was developed based on direct input from WXEOILSPHIVWXLVSYKLMRXIVZMI[WERHVSYRHXEFPIHMWGYWWMSRW8LIWIƼRHMRKW offer insights into areas that can be leveraged or strengthened to support economic growth as well as potential challenges and risks that might impede growth. %VIEWSJXLI7;38EVIHIƼRIHEWJSPPS[W ᶲ STRENGTHS: Advantages that can be leveraged and strengthened to bolster economic vitality. ᶲ WEAKNESSES:Challenges and risks to economic development that might WXMƽIKVS[XL ᶲ OPPORTUNITIES:Positive trends and assets that have potential to increase prosperity. ᶲ THREATS:External factors and risks that might negatively affect the local/ regional economy. 8LSYKLXLI'MX]LEWPIWWMRƽYIRGISZIVREXMSREPERHKPSFEPXVIRHWMXGERJSGYW on how Denton should respond to those trends and prioritize local/regional opportunities (see Figure 14). The graphics on the subsequent pages summarize the results of the analysis. NATIONAL STATE LOCAL & REGIONAL GLOBAL DE G R E E O F C O N T R O L followtrends shape trends STRENGTHS WEAKNESSES OPPORTUNITIES THREATS *-+96)źSWOT FRAMEWORK 973 61 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS Downtown Convention Center Sustainability Hiking & biking trails Water rights University of North Texas Texas Woman’s University Power generation Unique culture Growing DFW metro Music & arts Land availability Interstates Airport NCTC WorkforceAffordable cost of living Growing tech scene Manufacturing Competitive tax climate Lower cost of living compared to coasts Inmigration growth LOCAL/REGIONALSTATENATIONALGLOBAL Venture capital Innovation capacity Diverse economic base STRENGTHS Denton’s numerous strengths should be leveraged to attract business investment and to develop talent pipelines for the City’s major industries. Certainly, Denton’s higher education assets make it stand out among other DFW communities. A robust arts and culture scene has also attracted students, tourists, and new residents to Denton over the years. Much of this development and growth has centered around Denton’s downtown square. What is less known about Denton is its strong base of transportation and logistics- SVMIRXIHGSQTERMIWXLEXFIRIƼXJVSQXLI'MX]ƅWTVS\MQMX]XSXLIMRXIVWIGXMSRSJ-) and I-35W. Denton’s location in the DFW Metroplex is one of its biggest strengths, especially as the DFW Metroplex continues to grow. Furthermore, the community’s commitment to sustainability puts Denton in an elite group of US cities that will rely on 100 percent renewable resources. A strategic focus on these strengths will continue to make Denton an attractive place to live and work. 974 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 62 LOCAL/REGIONAL STATE NATIONAL GLOBAL WEAKNESSES Stakeholder input highlighted housing as one of Denton’s top challenges. ,SYWMRKƂFSXLEJJSVHEFPILSYWMRKERHLMKLIVZEPYILSQIWƂMWSRISJXLIXST barriers to Denton’s growth. Compared to its DFW peers, Denton has a higher share of low-income and moderate-income residents who cannot afford to live in Denton. At the same time, Denton’s housing value tends to be lower than that of SXLIVGSQQYRMXMIWQEOMRKMXHMƾGYPXXSEXXVEGXTVSJIWWMSREPWIVZMGIFYWMRIWWIW medical professionals, and more. Beyond housing, Denton’s lack of resources available for economic development QEOIWMXHMƾGYPXJSVXLI'MX]XSGSQTIXIJSVFYWMRIWWMRZIWXQIRXERHXEPIRX The lack of an EDC or fund, along with reduced tax revenue, will require Denton XSƼRHGVIEXMZI[E]WXSMRZIWXQSVIWMKRMƼGERXP]MRMXWFYWMRIWWEXXVEGXMSR retention, and expansion efforts. Lack of affordable housing Equity & inclusion Infrastructure Limited jobs Lack of high-end housing Limited (ED) economic development resources Leadership transitions Town vs. gown No tax base for community colleges No Class ARIÀFHVWRFN Lack of uniting vision Many non-taxing entities High share of vulnerable populations Corridors into city Retention of graduates Construction costs Reliance on volatile industries (oil & gas) Workforce for skilled trades Talent shortages Aging population Growing income inequality US national debt 975 63 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS LOCAL/REGIONALSTATENATIONALGLOBAL OPPORTUNITIES Denton’s economic future depends on the community’s ability to capitalize on investments already made and opportunities that will come with growth. For example, the City should continue to prioritize downtown development and placemaking to attract businesses and talent. The City’s support of Stoke has led to increased entrepreneurship and a cluster of edtech startups that should be fostered. The biggest opportunity will be the Hunter and Cole Ranch development, which is set to add thousands of new houses, create a new employment center, and improve retail options along I-35W. Cole and Hunter Ranch will also create more possibilities for both industrial and commercial development on the west side of Denton. If the City does nothing else, it should dedicate staff time and resources to ensuring that the original vision for the development is implemented successfully and in a timely manner. Denton Catalyst Fund Leverage higher education assets Golden Triangle Mall redevelopment Telling the “Denton Story” better Utilizing DME funds for economic development Airport expansion Hunter & Cole Ranch Edtech Cluster Logistics hub Downtown development & placemaking Expand tech, R&D, innovation Talent retention Athletic complex Younger workforce Renewable energy Migration from urban areas on the coasts Growing tech sector Economic GLYHUVLÀFDWLRQ Opportunity Zones Rise of remote workers Historic preservation tax credits Federal stimulus funds New Market Tax Credits Global sustainable development goals (SDGs) Foreign Direct Investments 976 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 64 LOCAL/REGIONAL STATE NATIONAL GLOBAL THREATS It is necessary to understand threats not in order to control them, but instead XSHIZIPSTETVSEGXMZIVIWTSRWIXSJEGXSVWXLEXEVISJXIRSYXWMHIXLIMRƽYIRGI of local and regional organizations. Before COVID-19 became a pandemic, it was a looming threat that had the potential to disrupt every aspect of life. There are other looming threats that can impact Denton soon or over a long horizon. Climate change is a threat to which the City is already developing a response by investing in renewable energy sources. On a smaller scale, threats to Denton’s vitality include outmigration of talent because of a lack of professional opportunities, attractive housing, or amenities. Coupled with aggressive growth in other parts of the DFW Metroplex, the need to develop and retain talent in Denton has never been greater. Many of the recommendations offered throughout this plan are meant to support Denton’s leaders in proactively responding to these threats. Aggressive growth in other DFW communities Higher wages in other DFW cities Outmigration of talent Industries vulnerable to disruption Retention of existing employers & industries Boom/bust cycle of oil & gas industry Inequitable distribution of jobs & opportunity Aggressive business recruitment across US South Aging workforce Economic recession Workforce for skilled trades US political uncertainty Decreased defense spending Disruption in healthcare industry Immigration restrictions (workforce) Trade policy uncertainty COVID-19 Competition with China Fragile global supply chains Cybersecurity threats Climate change 977 65 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS %44)2(-<'źMUNICIPAL UTILITY COMPARISON Utility Company AE (AUSTIN ENERGY) 2018 CPS (CPS ENERGY) 2019 EPB (2019) CU (CITY UTILITIES) 2019 City Austin, TX San Antonio, TX Chattanooga, TN 7TVMRKƼIPH13 City Population 962,469 1,547,253 182,799 167,882 Economic Development Budget $47,261,386 $15,354,284 $8,268,037 $481,989 ED Budget Per Person $49.10 $9.92 $45.23 $2.87 Electricity Customers ~485,000 ~ 820,000 ~170,000 ~111,000 Total Utility Revenue $945,000,000 $2,744,159,000 (includes gas) $741,651,000 $474,126,000 Revenue Transferred to General Fund $109,000,000 (12% of total revenue) $361,351,000 (13% of total revenue) $7,618,000 (1% of total revenue) $14,559,000 (3% of total revenue) Workforce and Education Initiatives ᶲ Energy and education program with eight school districts in its service territory to increase interest in green energy. ᶲ Summer internship program for college-aged students. ᶲ Three paid internship programs for high school juniors and a Corporate College Internship Program. ᶲ New Energy Economy program generated $23M for local schools and created 600 jobs. ᶲ STEP-UP paid summer internship program for high school students. ᶲ EPB Institute of Technology and Networking to prepare students for careers in coding and IT. ᶲ Workforce development program with local high school covering team building, goal WIXXMRKGSRƽMGXVIWSPYXMSRERHcareer exploration. Sustainability Initiatives ᶲ Climate Protection Plan seeks to achieve 100% carbon-free electricity generation by 2035. ᶲ 65% renewable energy by 2027. ᶲ AE offers commercial and residential rebates when using smart thermostats and other technologies. ᶲ Solar powers more than 55K homes in the region. ᶲ Cut nitrogen oxide emissions by 75% since 1997. ᶲ Invested in a smart grid for the city and, in 2017, installed the one millionth advanced meter or gas meter-enhancing device, completing 90% of the project. ᶲ )4&S[RIHƼFIVSTXMGcommunications network provides a smart grid for the entire service area. ᶲ $3M Chattanooga Clean Energy for Low Income Communities Accelerator. ᶲ Green and Healthy Homes pilot to reduce childhood asthma through better air quality. ᶲ Since 2006, CU generates electricity from methane gas TVSHYGIHF]XLIGMX]ƅWPERHƼPP ᶲ CU Solar Farm (powers 902 homes) leased to CU through Purchased Power Agreement with purchase option after 25 years. ᶲ Commercial and residential rebates for adoption of smart technology. 978 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 66 %44)2(-<(źECOSYSTEM DIRECTORY CONNECTIVITY Industrial Supply Association www.isapartners.org Institute for Supply Management—Dallas www.ismdallas.org/index.cfm Intermodal Association of North America www.intermodal.org Logistics & Transportation Association of North America www.ltna.org National Industrial Transportation League www.nitl.org Southern Association of Wholesale Distributors the-southern.org Texas Airports Council texasairportscouncil.org Texas Association of Manufacturers manufacturetexas.org Texas Commercial Airports Association www.texas-airports.com Texas Trucking Association www.texastrucking.com Texas Warehouse Association www.texaswarehouseassociation.org Transportation Club of Dallas/Fort Worth www.tcdfw.org TRADE ASSOCIATIONS Design-2-Part Show February 26–27, 2020 | Grapevine, TX www.d2p.com International Conference on Information, Logistics and Supply Chain April 22–24, 2020 | Austin, TX 10times.com/ils-austin Aviation Conference to Focus on Innovation June 11, 2020 | Virtual www.texas-airports.com/p/getinvolved Accelerate! Conference & Expo September 23–25, 2020 | Dallas, TX www.womenintrucking.org/accelerate-conference Heavy Duty Aftermarket Week January 25–28, 2021 | Grapevine, TX www.hdma.org/content/heavy-duty-aftermarket-week-hdaw HOUSTEX February 23–25, 2021 | Houston, TX houstexonline.com RELEVANT CONFERENCES / EVENTS American Shipper americanshipper.com American Trucker www.trucker.com/american-trucker-magazine International Journal of Adv. Manufacturing Technology www.springer.com/engineering/industrial+management/journal/170 Int’l. Journal of Shipping and Transport Logistics www.inderscienceonline.com/loi/ijstl Journal of Commerce www.joc.com Logistics Management www.logisticsmgmt.com Manufacturing Technology Insights www.manufacturingtechnologyinsights.com Supply Chain www.supplychaindigital.com/magazine TRADE PUBLICATIONS Note: Events were correct at the time this document was created. Due to the COVID-19 pandemic, details are subject to change. 979 67 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS CREATIVITY Denton County India Cultural Association www.dcica.org Denton Film Society www.facebook.com/DentonFilmSociety Denton Main Street Association www.dentonmainstreet.org Keep Denton Beautiful kdb.org Master Networks, Denton Chapter www.meetup.com/Master-Networks-Denton-Chapter North Texas State Fair Association www.ntfair.com Stoke stokedenton.com TechMill techmill.co Technology Resource Center of America www.trca.com UNT Murphy Center for Entrepreneurship and Innovation cob.unt.edu/murphycenter TRADE ASSOCIATIONS FlintConf 2020 April 29–May 1, 2020 | Virtual WXSOIHIRXSRGSQIZIRXWƽMRXGSRJ Business Success Summit May 4–8, 2020 | Virtual www.mnbusinesssuccesssummit.com 1 Million Cups Frisco June 2, 2020 | Virtual www.meetup.com/1-Million-Cups-Frisco/events/skvdrrybcjbfb CONNECT 2020 August 6–8, 2020 | Allen, TX www.attend-connect.com/connect-2020 Techstars Startup Week Waco October 19–22, 2020 | Waco, TX waco.startupweek.co Denton Arts & Jazz Festival April 23–25, 2021 | Denton, TX dentonjazzfest.com DFW Open Data Day TBD 2021 | Frisco, TX www.dfwopendataday.com RELEVANT CONFERENCES / EVENTS Arts and Culture Texas artsandculturetx.com Journal of Innovation and Entrepreneurship innovation-entrepreneurship.springeropen.com Stoke Newsletter stokedenton.com/join-newsletter Techstars Startup Digest www.startupdigest.com Texas Highways texashighways.com Texas Monthly www.texasmonthly.com TRADE PUBLICATIONS Note: Events were correct at the time this document was created. Due to the COVID-19 pandemic, details are subject to change. 980 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS 68 SUSTAINABILITY Conserve North Texas conservenorthtexas.org Environment Texas environmenttexas.org North Texas Association of Environmental Professionals www.ntaep.org North Texas Green Council northtexasgreencouncil.org North Texas Renewable Energy Group www.ntreg.org Society of Texas Environmental Professionals txstep.org Texas Conservation Alliance www.tcatexas.org Texas Municipal Utilities Association tmua.org Texas Public Power Association www.tppa.com Texas Renewable Energy Industries Alliance www.treia.org Texas Solar Energy Society txses.orgtxses.org TRADE ASSOCIATIONS NTAEP Fourth Annual Texas Commission on Environmental Quality (TCEQ) Trade Fair May 12, 2020 | Austin, TX www.ntaep.org/happyhour GRIDNEXT 2020 June 3, 2020 | Houston, TX https://www.treia.org/gridnext-2020-virtual Texas STEP Annual Joint DFW Meeting July 21, 2020 | Grapevine, TX txstep.org/meetings/annual-dfw Regional Centre of Expertise North Texas Symposium September 16, 2020 | Arlington, TX sustainability.uta.edu/rce/events/rce-symposium TMUA Utility Leadership and Management Conference April 28–30, 2021 | Round Rock, TX tmua.org/future-conference-dates RELEVANT CONFERENCES / EVENTS Green Source DFW www.greensourcedfw.org Journal of Renewable and Sustainable Energy aip.scitation.org/journal/rse POWER Magazine www.powermag.com Renewable Energy www.journals.elsevier.com/renewable-energy Utilities Policy www.journals.elsevier.com/utilities-policy Texas Journal of Oil, Gas, and Energy Law tjogel.org 8LI7SPEV6IƽIGXSV X\WIWSVKXLIWSPEVVIƽIGXSV TRADE PUBLICATIONS Note: Events were correct at the time this document was created. Due to the COVID-19 pandemic, details are subject to change. 981 69 ECONOMIC DEVELOPMENT STRATEGIC PLAN | CITY OF DENTON, TEXAS COMPETITIVENESS Association of Texas College & University Facilities Professionals www.t-cuf.org BOMA Greater Dallas www.bomadallas.org Career & Technical Association of Texas www.ctat.org NAIOP North Texas www.northtexasnaiop.com National Association of Colleges and Employers www.naceweb.org North Texas Commercial Association of Realtors and Real Estate Professionals www.ntcar.org Texas Association of Healthcare Facilities Management www.tahfm.org Texas Higher Education Human Resources Association www.txhehra.org Texas Hospital Association www.tha.org Texas Medical Association www.texmed.org TRADE ASSOCIATIONS TMA Winter Conference January 29–30, 2021 | Austin, TX www.texmed.org/Winter 2020 NACE Conference + Expo June 2–5, 2020 | Minneapolis, MN www.naceweb.org/conferenceexpo/default.htm 2020 Commercial Real Estate Expo September 9, 2020 | Dallas, TX www.ntcar.org/ntcar-events/2020-expo NTCAR Reunion and Hall of Fame September 22, 2020 | Dallas, TX www.ntcarhalloffame.org THEHRA Summer 2020 October 18–20, 2020 | Galveston, TX www.txhehra.org/conferences.html 2021 TAHFM Annual Conference March 28–31, 2021 | Fort Worth, TX www.tahfm.org/general/custom.EWT#TEKI!GSRJIVIRGI RELEVANT CONFERENCES / EVENTS BOMA Magazine www.boma.org/BOMA/Research-Resources Development Magazine www.naiop.org/en/Research-and-Publications/Magazine Texas Hospitals www.tha.org/TexasHospitalsMagazine The American Journal of Medicine www.amjmed.com The Journal of Continuing Higher Education www.tandfonline.com/loi/ujch20 The Journal of Higher Education www.tandfonline.com/loi/uhej20 The Journal of Real Estate Research https://aresjournals.org/loi/rees TRADE PUBLICATIONS Note: Events were correct at the time this document was created. Due to the COVID-19 pandemic, details are subject to change. 982 Economic Development Strategic Plan Implementation Matrix POTENTIAL PARTNERS (lead partner highlighted in bold) 12-18 months 2-3 years 3-5 years Ongoing Current Foundational Aggressive POTENTIAL FUNDING SOURCES 1.1.1. Pull together a small group of top-level leadership from the City, the EDPB, and the Denton Chamber of Commerce to form the “economic recovery nerve center.” City, Chamber, EDPB <City - Economic Development IN-PROGRESS 1.1.2. Shift the focus of the existing economic development structure from relief and policy enforcement to cross-functional elements of economic recovery, such as business retention, workforce development, and community services. City, Chamber, EDPB <City - Economic Development IN-PROGRESS 1.1.3. Develop an internal data dashboard to guide economic recovery efforts using a limited number of indicators that can be tracked over time and shared with partner organizations. City, Chamber, EDPB <City - Economic Development IN-PROGRESS 1.2.1. Continue to coordinate with the Denton Chamber of Commerce and Denton Main Street Association to assess short-term needs and long-term projections for Denton’s businesses. City, Chamber, Main Street Association <City - Economic Development IN-PROGRESS 1.2.2. Stay connected to DFW organizations coordinating economic recovery and community service efforts across the DFW Metroplex. City, Chamber, Denton County <City - Economic Development IN-PROGRESS 1.3.1. Continue to develop and maintain a database of Denton-based businesses. City, Chamber <City - Economic Development Excel or free option $7,500 per year $10,000 for CRM system City General Fund IN-PROGRESS 1.3.2. Shift the City’s business visitation efforts to a virtual setting and establish a cadence of meetings with businesses as soon as appropriate. City <City - Economic Development IN-PROGRESS 1.3.3. Expand existing goals for business touchpoints on a monthly, quarterly, and annual basis. City <City - Economic Development IN-PROGRESS 1.3.4. Reevaluate and adjust standard questions and protocols utilized in the City’s BRE program to be more responsive to the COVID-19 crisis and recovery.City <City - Economic Development IN-PROGRESS 1.3.5. Prioritize business retention efforts based on strategic growth areas (see Goal 2), employer size, employer growth (number of employees, revenue growth, etc.), and lease terminations. City <City - Economic Development IN-PROGRESS 1.3.6. Structure BRE efforts to serve several purposes: educate businesses about resources offered by the City, identify challenges companies are facing, and identify short-term and long-term issues.City <City - Economic Development IN-PROGRESS 1.3.7. Act as a concierge to priority businesses to help navigate processes within other municipal departments (e.g., partner with a project facilitator from the City’s Development Services department).City, Development Services <City - Economic Development INCOMPLETE 1.4.1. Prioritize engagement with the DCWSLT (Denton County Workforce Success Leadership Team) to connect City efforts to the broader regional context. City, DCWSLT, Workforce Solutions <City - Economic Development IN-PROGRESS 1.4.2. Catalog which industries have been severely impacted by COVID-19 and determine if targeted resources can be deployed to support workers in those industries. City, Denton County, Chamber <City - Economic Development INCOMPLETE 1.4.3. Use insights and data from business retention efforts and surveys of the business community as a baseline for employer demand. Couple this information with other data about unemployment rates and the needs of jobseekers. City, Chamber <City - Economic Development IN-PROGRESS 1.4.4. Develop an inventory of training resources across providers, such as NCTC (North Central Texas College), Workforce Solutions for North Central Texas, and United Way. Include capacity levels and flexibility to streamline, redesign, or create new programs to meet employer needs. City, DCWSLT, Workforce Solutions <City - Economic Development INCOMPLETE 1.4.5. Engage in demand planning to understand which businesses expect to hire and when.City <City - Economic Development INCOMPLETE 1.4.6. Identify barriers to accessing training and other workforce resources. Continue to coordinate with partner organizations to help remove these barriers for those seeking jobs. City, DCWSLT, Workforce Solutions <City - Economic Development IN-PROGRESS 1.5.1. Extend existing collaboration efforts with the City’s Community Development Department to coordinate resources and efforts to support residents through economic recovery.City, Community Development <City - Economic Development IN-PROGRESS None None None None None None None None None 1.1. ECONOMIC RECOVERY NERVE CENTER. GOALS & STRATEGIES TIMELINE LEVEL OF COMPLETION ORGANIZATION RESPONSIBLE GOAL 1. ACCELERATE RECOVERY ESTIMATED ANNUAL COSTS 1.2. TAKING THE PULSE OF THE BUSINESS COMMUNITY. 1.3. VIRTUAL BUSINESS RETENTION. None None None None None 1.4. WORKFORCE COLLABORATIVE. 1.5. INCLUSIVE ECONOMIC RECOVERY. None None None None 983 Economic Development Strategic Plan Implementation Matrix 1.5.2. Coordinate with the Denton Black Chamber of Commerce and other multicultural organizations to provide targeted information for businesses owned by women and people of color. City, Chamber, Denton Black Chamber <Chamber IN-PROGRESS 1.5.3. Continue to collaborate with local and regional nonprofits in gathering information about what challenges residents are facing due to the economic impact of the COVID-19 pandemic. City <City - Community Development IN-PROGRESS 1.5.4. Disaggregate social and economic indicators by race and income levels to show how vulnerable populations are faring in comparison to other segments of the population. City <City - Economic Development INCOMPLETE 1.5.5. Highlight businesses owned by women and people of color in marketing materials and through digital marketing channels to increase awareness and promote their success.City, Chamber <Chamber INCOMPLETE 1.6.1. Continue the City’s existing support for the United Way of Denton County Information & Referral services to assist small businesses. City, United Way, Denton County <City - Community Development Already funded IN-PROGRESS 1.6.2. Strengthen the Denton County chamber and economic development workgroup and continue to build this network throughout the economic stabilization and recovery periods. City, Denton County, Chamber <City - Economic Development IN-PROGRESS 1.6.3. Leverage the Denton Innovation Group to develop targeted supports and resources to assist entrepreneurs through economic recovery. City, Denton Innovation Group, Stoke <City - Economic Development IN-PROGRESS 1.6.4. Connect with regional DFW organizations, such as the Dallas Regional Chamber, to expand the information-sharing network beyond Denton County. City, Chamber, Dallas Regional Chamber <Chamber IN-PROGRESS 2A.1.1. Refine and enlarge the City’s database of existing employers. The database should be expanded to include companies that serve external markets or are suppliers to existing employers.City, Chamber <City - Economic Development IN-PROGRESS 2A.1.2. Ramp up the business visitation program to track trends among Denton employers and identify business needs. City <City - Economic Development $150,000/year dedicated to Investment Fund $250,000 to $500,000 Up to $1,000,000 New job-based incentive program IN-PROGRESS 2A.1.3. Communicate success stories that result from BRE visits. These might not translate directly to new job creation or increased capital investment, but they can still be valuable to businesses. City <City - Economic Development INCOMPLETE 2A.2.1. Cultivate relationships with real estate brokers and site selectors. City, Chamber <Chamber Use existing fund and abatements $2,000,000 $3,000,000 General incentive fund IN-PROGRESS 2A.2.2. Create a centralized lead tracking system for Denton.City, Chamber <City - Economic Development IN-PROGRESS 2A.2.3. Engage with regional economic development organizations, industry groups, and professional networks in the DFW Metroplex. City, Chamber, Denton County <Chamber IN-PROGRESS 2A.3.1. Prioritize infrastructure investments, particularly with respect to roads and utilities. City, Development Services <City - Development Services Use existing funds $250,000 to $500,000 $1,000,000 for infrastructure incentive funding Utility development line funds; future TIRZ funds; IN-PROGRESS 2A.3.2. Continue to track vacant properties and parcels, partnering with brokers and developers on new developments or redevelopments to increase the usefulness and value of these properties. City, Chamber <Chamber IN-PROGRESS 2A.3.3. Partner with UNT on relocating the sports recreation fields located at Precision Drive and Airport Road to an area outside the industrial park to improve safety and make better use of the land.City, UNT <City - Economic Development INCOMPLETE 2A.3.4. Provide public infrastructure incentives (such as credits or reimbursements) for projects aligned to Denton’s growth areas. City, Development Services <City - Economic Development None $50,000 per year $100,000 per year Can be provided as reimbursements or credits as part of incentives on high priority projects IN-PROGRESS 2A.4.1. Leverage over $2.8 billion in planned projects from TxDOT in Denton to increase connectivity between Denton and surrounding DFW communities.City, Development Services <City - Economic Development IN-PROGRESS 2A.4.2. Explore the feasibility of a partnership between the businesses located in the Westpark Industrial Park, NCTC, UNT Center for Logistics & Supply Chain Management, and the City.City, Chamber, EDPB <City - Economic Development INCOMPLETE Same as 1.3.1 Same as 1.3.1 None 2A.4. CENTER OF EXCELLENCE. GOAL 2. FOSTER GROWTH 2A. CONNECTED DENTON 2A.1. BRE (BUSINESS RETENTION AND EXPANSION). 2A.2. ATTRACT NEW INVESTMENT. 2A.3. WESTPARK INDUSTRIAL PARK. None None $50,000 None None None None None None None None None None 1.6. REGIONAL COLLABORATION. 984 Economic Development Strategic Plan Implementation Matrix 2A.4.3. Include workforce partners to create career pathways for Denton students and residents into in- demand occupations for Denton’s transportation and logistics businesses. City <City - Economic Development INCOMPLETE 2A.4.4. Promote opportunities in the transportation, logistics, and supply chain fields to students in Denton and in economic development marketing materials. City, Chamber, EDPB <City - Economic Development INCOMPLETE 2B.1.1. Support the expansion of networking channels and opportunities for relationship building among the region’s entrepreneurs, startups, and students. City, Chamber, EDPB <City - Economic Development No additional staff No additional staff $150,000 for qualified staff City General Fund IN-PROGRESS 2B.1.2. Establish connections with DFW entrepreneurship organizations such as Dallas 1 Million Cups, 1 Million Cups Frisco, Dallas Innovates, Capital Factory, and the Dallas Entrepreneur Center. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.1.3. Assemble a knowledge resource network to support entrepreneurs and companies with access to financial, legal, policy, and research information needed for their businesses to grow. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.1.4. Partner with local and regional partners to design reverse-pitch competitions to engage major corporations and organizations in the DFW Metroplex with needs for innovation. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development None City General Fund or private funds INCOMPLETE 2B.1.5. Ensure that targeted resources are available for businesses owned by women and people of color, who have historically faced barriers to accessing traditional economic development tools.City, Chamber <City - Economic Development INCOMPLETE 2B.2.1. Cultivate relationships with the DFW VC (venture capital) community so that local companies are not forced to relocate after they grow beyond their initial rounds of capital. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.2.2. Partner with the Denton Angels to expand access to capital for Denton startups. Work with other angel networks in the DFW Metroplex, and across Texas, to improve deal flow for Denton companies and investors. City, Denton Angels, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.2.3. Network with regional entrepreneurship programs so that they become familiar with Denton and the resources available for businesses looking to grow and expand within the DFW Metroplex. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.2.4. Revise the funding requirements for the EDP Investment Fund to be more inclusive of innovative startups that might not meet current thresholds for employment and capital investment.City, EDPB <City - Economic Development $150,000/year in Investment Fund $250,000 $500,000 General incentive fund, programmed for entrepreneurship INCOMPLETE 2B.3.1. Partner with the Denton Innovation Group to define a vision for entrepreneurship in Denton, establish goals, measure progress, and connect with DFW organizations.City, Denton Innovation Group <City - Economic Development Work done in- house Hire limited consultant ($25,000) $100,000 for entrepreneurship plan development City funds and private funds IN-PROGRESS 2B.3.2. Launch an accelerator to support the growth of existing companies. City, Denton Innovation Group, Stoke <City - Economic Development None None $250,000 City funds and private funds INCOMPLETE 2B.3.3. Host a Citywide pitch competition to identify and develop innovative entrepreneurs in Denton. This not only builds Denton’s creative brand but also provides the City with a way of identifying top talent in the community. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development City General Fund INCOMPLETE 2B.4.1. Capitalize on Denton’s status as an emerging hub for edtech companies to drive additional growth and investment in this sector and to attract more creative professionals to Denton. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.4.2. Create an edtech alliance with entrepreneurial companies, Denton ISD, UNT Murphy Center for Entrepreneurship and Innovation, and the Center for Women Entrepreneurs at TWU to identify opportunities to strengthen and diversify edtech in Denton. City, UNT, TWU, Denton Innovation Group, Stoke <City - Economic Development City funds and private funds INCOMPLETE 2B.4.3. Support the expansion of Denton ISD’s annual TIACON (Technology in Action Conference) about education technology and curriculum. City, Denton ISD, Denton Innovation Group, Stoke <City - Economic Development City General Fund INCOMPLETE 2B.5.1. Engage with DFW entrepreneurship organizations, talent networks, and industry associations to identify new companies. City, Chamber, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 2B.5.2. Target successful startups in business incubators/accelerators that are on the cusp of outgrowing their existing spaces and are positioned for expansion/relocation to Denton.City <City - Economic Development General incentive fund, programmed for entrepreneurship; Job- based incentive program INCOMPLETE 2B.5.3. Track VC firms in DFW, Silicon Valley, Austin, and other markets that have recently funded high- growth, innovative businesses. City <City - Economic Development INCOMPLETE $10,000 for event or sponsorship costs None $5,000 for administrative, marketing, or operating costs $10,000 for sponsorships or support funding None Included in 2B.2.4. 2B.4. EDTECH CLUSTER. 2B.5. RECRUIT GROWING STARTUPS. None 2B.1. CHAMPION AND CONVENE. 2B.2. ACCESS TO CAPITAL. 2B.3. ECOSYSTEM BUILDERS. None None None None None None None $10,000 for sponsorships 2B. CREATIVE DENTON None 985 Economic Development Strategic Plan Implementation Matrix 2B.5.4. Use resources like the Inc. 5000 (a list of the fastest-growing private firms in the US based on year- over-year revenue growth) to identify firms that would be a good fit for Denton.City <City - Economic Development INCOMPLETE 2B.6.1. Aggressively utilize the City’s social media channels to publicize successes.City <City - Economic Development INCOMPLETE 2B.6.2. Pitch stories about successful Denton companies to media outlets, such as the Denton Record- Chronicle, Dallas Morning News, Fort Worth Star-Telegram, Dallas Innovates, and D Magazine.City, Chamber <Chamber INCOMPLETE 2B.6.3. Develop a Citywide entrepreneurial recognition program that harnesses the strengths of local efforts that already exist in Denton. City, Chamber, Denton Innovation Group, Stoke <Chamber INCOMPLETE 2C.1.1. Prioritize the energy efficiency and conservation goal from the Simply Sustainable plan by focusing on building standards and incentives for greener residential and business development. City, Development Services, DME <City - Economic Development IN-PROGRESS 2C.1.2. Work with DME and the City’s Development Services department to better understand green building standards, including what is currently required of developers.City, Development Services <City - Economic Development IN-PROGRESS 2C.1.3. Build a more robust set of incentives to encourage developers to adopt green building standards. More incentives should be offered for developments that meet higher tiers of standards. City, Development Services <City - Economic Development None (Scored during incentive process) $50,000 $100,000 DME; Green Sense Program INCOMPLETE 2C.2.1. Identify businesses that are high electricity users, such as data centers. DME’s competitive rates and the ability to power businesses using 100 percent renewables is a good marketing opportunity for both the company and for Denton. City, DME <Chamber INCOMPLETE 2C.2.2. Provide technical assistance to developers and businesses that want to leverage federal incentives, such as the Business Energy Investment Tax Credit, or obtain LEED certification. City, Development Services, DME <DME INCOMPLETE 2C.2.3. Network with regional and statewide organizations focused on clean energy, municipal utilities, and data centers to understand trends and develop relationships with industry leaders.City, Chamber <DME INCOMPLETE 2C.3.1. Adopt the SDGs and formally make them a priority for the City of Denton. The four SDGs most related to Denton’s sustainability and economic development efforts are highlighted here.City <City - Economic Development INCOMPLETE 2C.3.2. Align performance metrics with the targets and indicators associated with each SDG. Not all targets will be directly applicable, so Denton can also set its own targets aligned to the SDGs. City <City - Economic Development INCOMPLETE 2C.4.1. Incorporate Denton’s Green Business Program in economic development digital marketing. The program can benefit from more targeted promotion to the business community.City, Chamber <Chamber INCOMPLETE 2C.4.2. Revise digital marketing materials to include a greater focus on Denton’s sustainability goals and 100 percent renewable energy resources. City, Chamber <Chamber INCOMPLETE 2C.4.3. Cultivate relationships with regional and statewide clean energy networks. Treat these networks as a channel for promoting Sustainable Denton as well as furthering business attraction.City, Chamber <DME INCOMPLETE 2D.1.1. Dedicate staff resources to supporting Hillwood and Stratford in making the Cole and Hunter Ranch vision come to fruition. City, Development Services <City - Economic Development None None $100,000 for future staff Revenues from Cole and Hunter Ranch development INCOMPLETE 2D.1.2. Provide concierge services to help the developers navigate processes across City departments and solve any challenges that arise. City, Development Services <City - Economic Development INCOMPLETE 2D.1.3. Continue to work with Hillwood and Stratford to ensure that a mix of housing options, from high- density to low-density, are built to increase the diversity in Denton’s housing stock. City, Development Services <City - Economic Development IN-PROGRESS 2D.2.1. Sustain implementation of the City’s Downtown Implementation Plan adopted in 2010.City, Development Services <City - Economic Development IN-PROGRESS None 2D.1. COLE AND HUNTER RANCH. None None None 2D. COMPETITIVE DENTON 2D.2. DOWNTOWN DEVELOPMENT. None None None None None 2B.6. PROMOTING DENTON’S CREATIVE BRAND. 2C. SUSTAINABLE DENTON 2C.1. SIMPLY SUSTAINABLE STRATEGIC PLAN. None None None None 2C.2. TARGET ENVIRONMENTALLY CONSCIOUS BUSINESSES. 2C.3. THINK GLOBAL, ACT LOCAL. 2C.4. GREEN MARKETING. None None None None 986 Economic Development Strategic Plan Implementation Matrix 2D.2.2. Continue utilizing various tools (development incentives, Chapter 380 agreements, TIRZ financing, and historic tax exemptions) to stimulate new private investment in the downtown. City, EDPB, Development Services <City - Economic Development Use existing tools $500,000 $1,000,000 Downtown TIRZ fund IN-PROGRESS 2D.2.3. Prioritize development of additional residential and commercial office space in downtown Denton, especially the corridors extending off the square. City, EDPB, Development Services <City - Economic Development INCOMPLETE 2D.3.1. Promote the development of Class A buildings for office space and creative redevelopment of existing structures to attract professional services and tech-oriented companies.City, EDPB <Chamber INCOMPLETE 2D.3.2. Utilize financial incentives to support the development of new or refurbished office space.City, EDPB, Development Services <City - Economic Development None None Up to $1,000,000 for office space incentives General incentive fund; future TIRZ; tax abatement INCOMPLETE 2D.3.3. Strengthen relationships with the regional real estate development and brokerage community by hosting quarterly or annual meetings with DFW real estate professional and trade associations.City, Chamber <Chamber INCOMPLETE 2D.4.1. Extend basic infrastructure to north Denton around Loop 288 to lay the groundwork for future residential and commercial development after TxDOT completes reconstruction of the loop.City, Development Services <City - Economic Development INCOMPLETE 2D.4.2. Improve the aesthetics and accessibility of main corridors leading into the downtown square. Dallas Drive and Fort Worth Drive are the main entrances from I-35 into the City core. City, Development Services <City - Economic Development INCOMPLETE 2D.4.3. Launch a Denton Fiber initiative to expand broadband connectivity and access to all businesses and residents. City, EDPB, Development Services <City - Economic Development INCOMPLETE 2D.5.1. Refresh the Denton EDP website so that it serves as the City’s primary online portal for economic development prospects, site location consultants, commercial real estate brokers, and other business decision- makers. City, Chamber <Chamber Private funds INCOMPLETE 2D.5.2. Establish a digital marketing campaign to highlight Denton’s economic development advantages and success stories. Develop baseline digital marketing tools and engage in regular digital marketing activities, including the following. City, Chamber <Chamber None $10,000 $25,000 Private funds INCOMPLETE 2D.5.3. Collaborate with the Denton Chamber of Commerce to create digital materials aimed at commercial real estate brokers, describing the attractive environment for business relocation.City, Chamber <Chamber IN-PROGRESS 3.1.1. Build off the workforce collaborative, detailed in Strategy 1.4, to focus on workforce needs during the period of economic recovery. City, DCWSLT, Workforce Solutions <City - Economic Development INCOMPLETE 3.1.2. Continue to convene regular meetings with key employers, Workforce Solutions, NCTC, and other providers to identify business needs and connect unemployed residents to jobs. City, DCWSLT, Workforce Solutions, NCTC <City - Economic Development INCOMPLETE 3.1.3. Over the long term, identify two to three occupations and/or skills that are critical to Denton employers and develop pathways to support residents in moving into those roles. City, DCWSLT, Workforce Solutions, NCTC <City - Economic Development Job-based incentive fund INCOMPLETE 3.1.4. Organize the collaborative around sharing data, coordinating demand and supply, aligning efforts to build talent pipeline, and streamlining BRE efforts. City, DCWSLT, Workforce Solutions, NCTC <City - Economic Development INCOMPLETE 3.2.1. Continue to collaborate with the City’s Community Development department in supporting the development or redevelopment of affordable housing in south and east Denton. City, Community Development <City - Economic Development IN-PROGRESS 3.2.2. Preserve existing housing by offering financial assistance for repairs or retrofitting to maintain naturally occurring affordable housing. City, Community Development <City - Economic Development Use existing abatements $25,000 per year $50,000 per year Tax abatements; Neighborhood empowerment zones IN-PROGRESS 3.2.3. Leverage the federal Opportunity Zones incentive and New Markets Tax Credit to support the development of valuable projects that will support the needs of existing residents.City, Community Development <City - Economic Development INCOMPLETE 3.2.4. Identify opportunities for adaptive reuse of existing buildings that can be converted into multiunit housing and preserve existing structures and utility connections. City, Community Development <City - Economic Development INCOMPLETE 3.2.5. Improve the development review process to decrease costs for those committed to building workforce and affordable housing. City, Community Development, Development Services <City - Economic Development INCOMPLETE None None None None None TBD $10,000 for website upgrades None None None Included in 2A.1.2 3.1. WORKFORCE COLLABORATIVE. 3.2. HOUSING AFFORDABILITY. 3.3. GROW YOUR OWN TALENT INITIATIVE. 2D.3. PROFESSIONAL OFFICE SPACE. 2D.4. INFRASTRUCTURE. 2D.5. DIGITAL MARKETING. GOAL 3. STRENGTHEN COMMUNITY INCLUSION None None None TBD TBD 987 Economic Development Strategic Plan Implementation Matrix 3.3.1. Support youth entrepreneurship programs at the local level to foster a culture of innovation and cultivate an entrepreneurial spirit. City, Denton ISD, Denton Innovation Group, Stoke <City - Economic Development City General Fund INCOMPLETE 3.3.2. Encourage Denton ISD to incorporate entrepreneurship into academic curricula and increase exposure and access to Denton’s startups. City, Denton ISD, Denton Innovation Group, Stoke <City - Economic Development INCOMPLETE 3.3.3. Gather data from UNT, TWU, and NCTC about graduates, including how many students stay in Denton and the DFW Metroplex versus relocating to other parts of the state or country. City, UNT, TWU, NCTC <City - Economic Development INCOMPLETE Explore options to update and/or refine Denton's economic development operations, including a Customer Relationship Management (CRM) system for information and contact management.City <City - Economic Development Excel or free option $7,500 per year $10,000 for CRM system City General Fund INCOMPLETE Update the City's incentive policies to align with the strategies and actions outlined in the economic development strategic plan.City <City - Economic Development INCOMPLETE Develop cost estimates for implementation of the strategic plan and options for the City to allocate the resources necessary for implementation.City <City - Economic Development IN-PROGRESS None None $10,000 for sponsorship programs CAPACITY AND RESOURCES None None 988 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-171,Version:1 AGENDA CAPTION Consider adoption of an ordinance of the City of Denton authorizing the City Manager to execute a Lease Agreement between the City of Denton and the Denton Chamber of Commerce for the use and occupancy of approximately 1600 square feet of office space and 100 square feet of storage space in the City building at 401 North Elm Street; and providing an effective date. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™989 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Economic Development ACM/CFO: David Gaines DATE: February 9, 2021 SUBJECT Consider adoption of an ordinance of the City of Denton authorizing the City Manager to execute a Lease Agreement between the City of Denton and the Denton Chamber of Commerce for the use and occupancy of approximately 1600 square feet of office space and 100 square feet of storage space in the City building at 401 North Elm Street; and providing an effective date. BACKGROUND Over the last year, City staff worked with the Denton Chamber of Commerce leadership to align our strategic direction and goals within an updated contractual arrangement for the Economic Development Partnership that connects directly with the forthcoming Economic Development Strategic Plan. These discussions resulted in both parties investigating co-locating the City’s Economic Development department and the Chamber of Commerce staff in one building. Through these discussions, the City and Chamber agreed that co-locating the groups would improve communication, create a better working environment, and provide budget relief for both the City and the Chamber. During the discussions, City management suggested exploring the possibility of co-located Economic Development and the Chamber offices at the new Development Services Center. Earlier this year, the Economic Development department requested to move to the new building allow for better coordination with Development Services, Community Services, and Engineering, as they frequently collaborate. In addition, the Economic Development staff, who spent a great deal of time out of the office pre-COVID, have now implemented a modified work-from-home schedule due to new teleworking capabilities, and no longer require a full office suite in City Hall. The new building provided a great opportunity to co-locate the offices based on its flexibility and availability of space and the ongoing renovation. Staff from Economic Development, Real Estate, Facilities, Legal, Development Services, and Capital Projects have worked together with the Chamber to develop a lease agreement for Council’s consideration. General terms of the lease are: • Five-year lease, beginning on Feb. 15, 2021 and terminating on Jan. 31, 2026. • Annual rent payment of $17,600 (payments made monthly in the amount of $1,466.67). • Chamber use of 1,600 square feet of office space and 100 square feet of storage space in City building at 401 N. Elm Street. • Option to renew for one additional five-year period with approval of both parties with ability to adjust lease rate based on market. PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS) August 18, 2020 – The City held a closed session regarding the lease terms. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 990 RECOMMENDATION Authorize the City Manager to execute the lease with Denton Chamber of Commerce for a five-year term with the option to renew for one additional five-year term. ESTIMATED SCHEDULE OF PROJECT The proposed lease extension will commence on Feb. 15, 2021 and will expire on Jan. 31, 2026, unless the renewal option is exercised. FISCAL INFORMATION The Chamber will pay rent in the amount of $17,600 per year ($1,466.47 per month) for the term of the lease. EXHIBITS 1. Agenda Information Sheet 2. Ordinance and Lease 3. Presentation Respectfully submitted: Jessica Rogers Director of Economic Development Deanna Cody Deputy Directory of Real Estate Scott McDonald Director of Development Services Trey Lansford Deputy City Attorney 991 ORDINANCE NO. ___ _ AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE CITY MANAGER TO EXECUTE A LEASE AGREEMENT BETWEEN THE CITY OF DENTON AND THE DENTON CHAMBER OF COMMERCE FOR THE USE AND OCCUPANCY OF APPROXIMATELY 1600 SQUARE FEET OF OFFICE SPACE AND 100 SQUARE FEET OF STORAGE SPACE IN THE CITY BUILDING AT 401 NORTH ELM STREET; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Denton ("City") owns property located at 401 North Elm Street, located in Abstract 185 of the BBB and CRR Survey (the "Property"); and WHEREAS, the Denton Chamber of Commerce ("Chamber") desires to lease office and storage space in the City's building on the Property; and WHEREAS, Chamber has requested to lease approximately 1600 square feet of office space and 100 square feet of storage space at the Property, and the City Council fmds it is in the public interest to lease the space to the Chamber pursuant to the terms and conditions outlined in the Lease Agreement ("Lease") attached hereto as Exhibit ''A;" NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and recitations contained in the preamble of this ordinance are incorporated herein by reference as true and as if fully set forth in the body of this ordinance. SECTION 2. The City Manager, or his designee, is hereby authorized to execute on behalf of the City the Lease, as attached hereto as Exhibit "A" and made a part hereof for all purposes. SECTION 3. The City Manager, or his designee, is further authorized to carry out all duties and obligations to be performed by the City under the Lease, including, but not limited to, signing ancillary documents such as consents to assignment. SECTION 4. This ordinance shall become effective immediately upon its passage and approval. The motion to approve this ordinance was made by -----------and seconded by -------------· The ordinance was passed and approved by the following vote [_ -__j: 992 Aye Nay Abstain Absent Gerard Hudspeth, Mayor: Birdia Johnson, District 1: Comrie Baker, District 2: Jesse Davis, District 3: John Ryan, District 4: Deb Armintor, At Large Place 5: Paul Meltzer, At Large Place 6: PASSED AND APPROVED this the day of • 2021. GERARD HUDSPETH, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY By: --------------------------- APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY By:~41 ~? 2 993 Lease Agreement Basic Terms Effective Date: February 15, 2021 Landlord: City ofDenton Landlord's Address: 215 E. McKinney, Denton, Texas 76201 Tenant: Denton Chamber of Commerce Tenant's Address: 414 W. Parkway St., Denton, Texas 76201 Premises -As described on Exhibit "A," attached hereto. Term: Effective Date to January 31, 2026 Commencement Date: The Effective Date or February 15, 2021 Termination Date: (i) January 31, 2026; (ii) earlier termination of this Lease, as provided herein; or (iii) surrender of the Premises by Tenant to Landlord, whichever is the earlier to occur. Rent: The consideration for this Lease is seventeen thousand-six hundred dollars ($17,600) annually, with rent payments made on or before the first of each month in the amount of one thousand-four hundred sixty-six dollars and sixty-seven cents ($1,466.67). Permitted Use: Office and storage space and no other uses. Tenant's Insurance: As required by Insurance Addendum, attached hereto as Exhibit "B" Landlord's Insurance: Self-Insured Tenant's Rebuilding Obligations: If the Premises are damaged by fire or other elements to the extent the Permitted Use may not continue absent repair, this Lease shall terminate. Lease Agreement Page 1 of 16 994 Definitions "Arises." An Environmental Claim or Environmental Cleanup Liability shall be deemed to Arise upon each discrete Release of a Chemical Substance. "Chemical Substances" shall mean any chemical substance, including, but not limited to, any sort of pollutants, contaminants, chemicals, raw materials, metals, intermediates, products, industrial, solid, toxic or hazardous substances, materials, wastes, asbestos, asbestos-containing materials, polychlorinated biphenyls, or petroleum products, including crude oil or any derived product or component thereof, including, without limitation, gasoline and any material or substance of any kind containing any of the above. "Environmental Claim" shall mean any claim, demand, action, suit or proceeding for the injury, disease or death of any person (including, without limitation, the Tenant, or Tenant's successors, assigns, employees, agents and/or representatives), property damage, damage to the environment, or damage to natural resources made, arising or alleged to arise under, or relating to, any Environmental Law. Environmental Claim includes any damages, settlement amounts, fines and penalties assessed or costs of complying with any orders or decrees of courts, administrative tribunals or other governmental entities associated with resolving such claims, demands, actions, suits or proceedings and any costs, expenses and fees, including, without limitation, reasonable attorney's fees, incurred in the investigation, defense and resolution of such claims, demands, actions, suits and proceedings. "Environmental Cleanup Liability" shall mean any cost or expense of any nature whatsoever incurred to investigate, contain, remove, remedy, respond to, clean up, or abate any Release of Chemical Substances or other contamination or pollution of the air, surface water, groundwater, land surface or subsurface strata related to the operation, occupation, use, maintenance, abandonment or ownership of the Premises, whether such Release, contamination or pollution is located on, within, under or above the Premises or is located on, within, under or above any other lands or property including, but not limited to, any Release of Chemical Substances or other contamination or pollution arising out of or resulting from the manufacture, generation, formulation, processing, labeling, distribution, introduction into environment or commerce, or on site or off site use, treatment, handling, storage, disposal, or transportation of any Chemical Substance. Environmental Cleanup Liability includes, without limitation, any judgments, damages, settlements, costs or expenses (including, without limitation, attorneys', consultants, and experts' fees and expenses) incurred with respect to (i) any investigation, study, assessment, legal representation, cost recovery by a governmental agency or third party, or monitoring or testing in connection therewith, (ii) the Premises, as a result of actions or measures necessary to implement or effectuate any such containment, removal, remediation, response, cleanup or abatement, and (iii) the resolution of such liabilities. "Environmental Law" means any statutes or legal requirements relating to or regulating pollution, worker, employee and occupational safety and health, protection or cleanup of the environment or damage to or remediation of damage to real property and natural resources (including, but not limited to, ambient air, surface water, groundwater, and land surface or subsurface strata) Lease Agreement Page 2 of 16 995 including, without limitation, legal requirements contained in the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601, et seq., as amended (CERCLA); the Resources Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., as amended (RCRA); the Supetfund Amendments and Reauthorization Act of 1986, Pub. L. 99-499, as amended (SARA); the Clean Air Act, 42 U.S. C. § 7401, et seq., as amended; the Federal Water Pollution Control Act, 33 U.S.C. § 1251, et seq., as amended; the National Environmental Policy Act, 42 U.S.C. § 4321, et seq., as amended (NEPA); and the Safe Drinking Water Act, 42 U.S.C. § 300f, et seq., as amended; and/or any other federal, state or local laws, statutes, ordinances, rules, regulations or orders (including decisions of any court or administrative body) relating to pollution, worker, employee and occupational safety and health, damage to and protection or cleanup of, the environment, real property and/or natural resources as described above. Environmental Law shall also mean the Toxic Substance Control Act, 15 U.S.C. § 2601, et seq., as amended (TOSCA), and/or any other federal, state (including, without limitation, laws with respect to trespass, nuisance and other torts or similar legal theories which may be applied to establish liability or responsibility for Environmental Cleanup or Environmental Claims) or local laws, statutes, ordinances, rules, regulations or orders (including decisions of any court or administrative body) relating to (i) release, containment, removal, remediation, response, cleanup or abatement of any sort of Chemical Substance, (ii) the manufacture, generation, formulation, processing, labeling, distribution, introduction into environment or commerce, use, treatment, handling, storage, disposal or transportation of any Chemical Substance, (iii) exposure of persons, including agents, contractors and employees of Tenant, to any Chemical Substance and other occupational safety or health matters, or (iv) the environmental hazards relating to the physical structure or condition of a building, facility, tank, fixture or other structure, including, without limitation, those relating to the management, use, storage, disposal, cleanup or removal of any Chemical Substance. "Injury" means (a) damage, harm to or impairment or loss of property or its use, including without limitation, personal property, real property and/or natural resources, and (b) harm to or death of a person. "Landlord" means Landlord and its elected officials, agents, employees, invitees, licensees, or visitors. "Release" shall mean any spilling, leaking, pumping, pouring, emtttmg, spraying, emptying, discharging, escaping, leaching, dumping or disposing, in any way, manner or form, of any Chemical Substance into the environment (including, but not limited to, the ambient air, sutface water, groundwater and/or land surface or subsutface strata) of any kind whatsoever (including without limitation the abandonment or temporary abandonment or discarding of barrels, containers, tanks or other receptacles containing or previously containing any Chemical Substance). "Tenant'' means Tenant and its agents, contractors, employees, invitees, licensees, or visitors. Lease Agreement Page 3 of 16 996 Clauses and Covenants A. Tenant agrees to: 1. Lease the Premises as described in Exhibit "C" for the entire Term beginning on the Commencement Date and ending on the Termination Date. 2. ACCEPT THE PREMISES IN THEIR PRESENT CONDITION "AS IS," "WHERE IS" AND "WITII ALL FAULTS". TENANT STIPULATES THAT IT HAS THOROUGHLY INSPECTED THE PREMISES AND FINDS THAT THE PREMISES IS CURRENTLY SUITABLE FOR THE PERMITTED USE. LANDLORD MAKES NO REPRESENTATION, COVENANTS OR WARRANTIES, EXPRESSED, IMPLIED OR OF ANY KIND OR NATURE CONCERNING OR WITH RESPECT TO THE PREMISES, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, QUALITY, HABITABILITY, SUITABlLITY, OR FITNESS FOR PARTICULAR PURPOSE OR USE. TENANT STIPULATES TO LANDLORD THAT IT HAS PREVIOUSLY OCCUPIED THE PREMISES AND IS AWARE OF THE CONDITION OF THE PROPERTY. TENANT REPRESENTS AND WARRANTS TO LANDLORD THAT THERE HAVE BEEN NO CHEMICAL SUBSTANCES CONTAINED OR STORED OR THAT HAVE BEEN RELEASED IN OR ON THE PREMISES DURING THE LEASE TERM THAT WOULD RESULT IN AN ENVIRONMENTAL CLAIM OR ENVIRONMENTAL CLEANUP LIABILITY. 3. Obey (a) all applicable laws relating to the use, condition, and occupancy of the Premises, and (b) any requirements imposed by utility companies serving or insurance companies covering the Premises. 4. Allow Landlord to enter the Premises to perform Landlord's obligations, if any, and inspect the Premises. 5. Maintain the Premises in a good state of condition, normal wear and tear excepted. Notwithstanding the obligation to maintain the Premises, if so desired by Tenant, Tenant may repair and replace any and all parts of the Premises damaged during the Term hereof, in its entirety. In the event Tenant does not desire to repair or replace the Premises, it shall be under no obligation to do so but remit any proceeds or monies attributable to damage or loss of the buildings, structures, improvements and other facilities that are fixtures to the Property, received by Tenant from insurance coverage required herein to Landlord upon such election. Tenant hereby expressly stipulates that Landlord is not obligated to repair, replace, or maintain, any part or parcel of the Premises, including without limitation, roof systems, HV AC systems, wall systems, foundations, windows, and doors. 6. Vacate, in its entirety, the Premises on or before the Termination Date. Tenant shall remove all personal property, trade fixtures and any other property, excepting the buildings, structures, improvements and other facilities that are fixtures, other than trade fixtures, to the Premises (collectively, "Tenant's Personal Property") owned by it from the Premises on or before Lease Agreement Page4 of 16 997 the Termination Date or earlier termination of this Temporary Lease, whichever is earlier to occur, and shall execute a written stipulation waiving any and all rights the Tenant may have to the Premises and such property. 7. INDEMNIFY, DEFEND, AND HOLD LANDLORD HARMLESS FROM ANY DAMAGE OR INJURY (AND ANY RESULTJNG OR RELATED CLAIM, ACTION, LOSS, LIABILITY, OR REASONABLE EXPENSE, INCLUDJNG ATTORNEY'S FEES AND OTHER FEES AND COURT AND OTHER COSTS) OCCURRING 1N OR RELATED TO ANY PORTION OF THE PREMISES CAUSED BY TENANT'S GROSS NEGLIGENCE OR WILFUL MISCONDUCT. 8. THE INDEMNITIES CONTAINED IN PARAGRAPH 7 ARE (A) INDEPENDENT OF TENANT'S INSURANCE, (B) WILL NOT BE LIMITED BY COMPARATIVE NEGLIGENCE STATUTES OR DAMAGES PAID UNDER THE WORKERS' COMPENSATION ACT OR SIMJLAR EMPLOYEE BENEFIT ACTS, (C) WILL NOT SURVIVE THE END OF THE TERM, AND (D) WILL APPLY EVEN IF AN INJURY OR DAMAGE IS CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE, OF ANY KIND, TYPE, OR DEGREE, OR STRICT LIABILITY OF LANDLORD. 9. During the term of this Lease, Tenant will not locate, store or dispose in or on, or release or discharge from (including groundwater contamination) the Premises, any Chemical Substances that could result in an Environmental Claim or Environmental Cleanup Liability. 10. Tenant shall, at no cost or expense to Landlord, take all actions necessary to comply with all Environmental Laws affecting the Premises. 11 . Any of Tenant's Personal Property remaining on the Premises after the Termination Date shall be deemed Abandoned Property, as prescribed by Section E.19., below, and may be disposed of by Landlord in any manner prescribed by Section E.19., below. 12. In consideration for the use of the Leased Premises herein granted, Lessee shall pay to City the following rental amounts (the "Rent"). The annual rent shall be in the sum of $11.00 per net square foot, as determined and provided in Exhibit C, said sum being stipulated herein as Seventeen Thousand, Six Hundred Dollars and No Cents ($17,600.00) (sales tax included), payable in twelve equal monthly installments of One Thousand, Four Hundred and Sixty-Six Dollars and Sixty-Seven Cents ($1,466.67) (sales tax included). The first payment shall be made prior to Lessee entering the Premises to take possession under this Lease in the pro-rated amount of Seven Hundred, Thirty-Three Dollars and Thirty-Four Cents ($733.34). All subsequent rental payments will be due in advance on the first of each calendar month thereafter. The City will mail a courtesy statement on or about the fifteenth of each month. Failure to receive the statement in a timely manner does not absolve Lessee from making rental payment on the first of each month. The Rent shall be payable at the City's offices of the Customer Service Department of the City ofDenton, 601 E. Hickory St., Denton, Texas, 76205, unless otherwise designated in writing by the City. Lease Agreement Page 5 of 16 998 13. Comply with Landlord requirements related to health and safety protocols, distancing requirements, face covering requirements, or other protective measures related to COVID-19. B. Tenant agrees not to: 1. Use the Premises for any purpose other than the Permitted Use. 2. Create a nuisance. 3. Permit any waste. 4. Use the Premises in any way that would increase insurance premiums or void insurance on the Premises. 5. Change the lock system of the Premises. 6. Alter the Premises in any material respect. 7. Allow a lien to be placed on the Premises. 8. Assign this Lease or sublease any portion of the Premises. C. Landlord agrees to: 1. Lease to Tenant the Premises for the entire Term beginning on the Commencement Date and ending on the earlier to occur of (i) Termination Date~ or (ii) upon surrender of the Premises by Tenant to Landlord prior to the Termination Date. 2. Provide furniture for workspaces as outlined in Exhibit C. 3. Obtain and pay for all utility services used by Tenant. 4. Pay all costs related to the utilities and janitorial services, of any kind or nature, related to the Premises. 5. Provide tenant with access to shared spaces, common areas, conference rooms, and training rooms, subject to scheduling availability. 6. Provide tenant with access to approximately 100 square feet of storage space within a shared storage area on Premises. 7. Provide Tenant 24/7/365 access to the facility via keys, fobs, or other security devices. Lease Agreement Page6 of 16 999 D. Landlord agrees not to: I. Intetfere with Tenant's possession of the Premises as long as Tenant is not in default hereunder. E. Landlord and Tenant agree to the following: 1. Alterations. Any physical additions, improvements or alterations to the Premises made by Tenant must be consented to by Landlord, in its sole and absolute discretion. 2. Insurance. Tenant will maintain the insurance coverages described in the attached Insurance Addendum during the Term of this Lease. 3. Renewal. No later than 120 days before the end of the initial term of this Lease, the parties may agree in writing for one (1) extension of the lease term for an additional five (5) year term at a new lease rate consistent with fair market value as determined by the Lessor at Lessor's expense by a property appraisal. The granting of such extension shall be in the sole discretion of the City upon a written request by Lessee to be provided to the City not less than one hundred eighty (180) days from termination. The renewal may be executed by a letter agreement signed by the City Manager, approved by the City Council, and the President of the Chamber. However, the foregoing shall not preclude the parties from entering into a new lease to be effective after the expiration of the Lease Term. 4. Release of Claims/Subrogation. TENANT RELEASES LANDLORD FROM ANY AND ALL CLAIMS OR LIABILITIES FOR DAMAGE TO THE PREMISES, DAMAGE TO OR LOSS OF PERSONAL PROPERTY WITHIN THE PREMISES, AND LOSS OF BUSINESS OR REVENUES INCIDENT TO, ARISING FROM OR RELATED TO TENANT'S OCCUPATION OF THE PREMISES. THE RELEASE IN THIS PARAGRAPH WILL APPLY EVEN IF THE DAMAGE OR LOSS IS CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE, OF ANY KIND, TYPE OR DEGREE, OR STRICT LIABILITY OF LANDLORD BUT WILL NOT APPLY TO THE EXTENT THE DAMAGE OR LOSS IS CAUSED BY THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF LANDLORD. 5. Casualty/Total or Partial Destruction. If the Premises are damaged by casualty to the extent the Permitted Use may not continue absent repair, unless the Premises is repaired by Tenant as provided in Section A.7., above, this Lease will terminate without liability of any kind to Landlord. 6. Condemnation/Substantial or Partial Taking a. If the Premises cannot be used for the purposes contemplated by this Lease because of condemnation or purchase in lieu of condemnation, this Lease will terminate. Lease Agreement Page 7 of 16 1000 b. Tenant will have no claim to the condemnation award or proceeds in lieu of condemnation. 7. Default by Landlord/Events. Defaults by Landlord are failing to comply with any provision of this Lease within thirty (30) calendar days after written notice. 8. Default by Landlord/Tenant's Remedies. Tenant's remedies for Landlord's default are solely to either (i) enforce the terms of this Lease by specific performance~ or (ii) terminate this Lease. THE REMEDIES OF TENANT AS SET FORTH HEREIN ARE SOLE AND EXCLUSIVE AND TENANT W AlVES ANY OTHER RIGHT OR REMEDY THAT :MIGHT BE AVAILABLE. 9. Default by Tenant/Events. Defaults by Tenant are (a) Tenant abandoning or vacating a substantial portion of the Premises without surrendering the Premises to Landlord, (b) Tenant failing to comply, within five (5) calendar days after written notice, with any provision of this Lease other than the default set forth in (a) above, which shall require no notice of default to Tenant~ (c) Tenant shall become insolvent, or shall make a transfer in fraud of creditors, or shall make an assignment for the benefit of creditors~ (d) a receiver or trustee shall be appointed for all or substantially all of the assets of Tenant; (e) Tenant shall file a voluntary petition in bankruptcy or admit in writing that it is unable to pay its debts as they become due; (f) Tenant shall apply for or consent to the appointment of a receiver, trustee, custodian, intervener or liquidator of itself or of all or substantial part of its assets~ (g) Tenant shall file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization or insolvency proceeding; and (h) any of Tenant's representations or warranties contained in this Lease are untrue at any time during the Term. 10. Default by Tenant/Landlord's Remedies. Landlord's remedies for Tenant's default are to (a) enter and take possession of the Premises, (b) terminate this Lease by written notice to Tenant, or (c) pursue condemnation of the leasehold estate. THE REMEDIES OF LANDLORD AS SET FORTH HEREIN ARE SOLE AND EXCLUSIVE AND LANDLORD W AlVES ANY OTHER RIGHT OR REMEDY THAT :MIGHT BE AVAILABLE, EXCEPT FOR THE EXERCISE OF EMINENT DOMAIN, IF NECE SSARY. 11. Default/Waiver/Mitigation. It is not a waiver of default if the non-defaulting party fails to declare immediately a default or delays in taking any action. Except as to the sole and exclusive remedies of Tenant and Landlord, pursuit of any remedies set forth in this Lease does not preclude pursuit of other remedies in this Lease or provided by applicable law. 12. Holdover. If Tenant does not vacate the Premises following termination of this Lease, Tenant will become a tenant at sufferance. No holding over by Tenant, whether with or without the consent of Landlord, will extend the Term. Tenant stipulates that its possession of the Premises after the expiration of the Term, as a tenant of sufferance, will cause damage to Landlord in excess of fair market value of rent resulting, in part, due to delays to Landlord construction projects. Lease Agreement Page8 of 16 1001 13. Lease of Commercial Rental Property. Tenant represents and warrants that the Premises is commercial rental property, as defined in Chapter 93 of the Texas Property Code. 14. Attorney's Fees. If either party retains an attorney to enforce this Lease, the party prevailing in litigation is entitled to recover reasonable attorney's fees and other fees and court and other costs. 15. Venue. EXCLUSIVE VENUE FOR ANY ACTION HEREUNDER IS IN DENTON COUNTY, TEXAS, THE COUNTY IN WHICH THE PREMISES ARE LOCATED. 16. Entire Agreement. This Lease, together with the attached exhibits and addendums, comprises the entire agreement of the parties, and there are no oral representations, warranties, agreements, or promises pertaining to this Lease or occupation of the Premises. 17. Amendment of Lease. This Lease may be amended only by an instrument in writing, duly authorized and signed by Landlord and Tenant. Notwithstanding anything to the contrary herein, the authority to amend this Lease by Landlord is not delegated by the City Council of Landlord. 18. Limitation of Warranties. THERE ARE NO IMPLIED WARRANTIES OF MERCHANTABILITY, QUALITY, SUITABILITY, HABITABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, AND THERE ARE NOW ARRANTIES THAT EXTEND BEYOND THOSE EXPRESSLY STATED IN THIS LEASE. 19. Notices. Any notice given by one party to the other in connection with this Lease shall be in writing and shall be sent by certified mail, return receipt requested, with postage fees prepaid, or via facsimile or electronic mail as follows: A. If to Landlord, addressed to: Denton City Manager 215 E. McKinney Denton, Texas 76201 Fax No. 940.349.8596 w/copy to: City of Denton-Real Estate Division 401 N. Elm Street Denton, Texas 76201 Fax No. 940.349.8951 Lease Agreement Page 9 of 16 1002 B. If to Tenant, addressed to: Denton Chamber of Commerce Attn: Chamber President POBox 1719 Denton, TX 76202 E-mail: eri ca@denton-cham ber. org Notice shall be deemed received for all purposes when placed in the United States mail, as set forth herein, or when delivered by telephonic facsimile or e-mail to the other party at the facsimile number(s) or e-mail address provided above. 20. Abandoned Property. Landlord may retain, destroy, or dispose of any property, of any kind or type, including without limitation, Tenant's Personal Property left or remaining on the Premises after the Termination Date ("Abandoned Property") without liability of any kind to Landlord and without payment of consideration of any kind to Tenant. 21. No Broker. Tenant represents and warrants Landlord that it has not contracted with or otherwise retained any broker or any other third party related to this Lease to whom any commission or other fee may be payable. 22. Authority of Tenant. Tenant represents and warrants to Landlord that it has taken all actions necessary to authorize the party executing this Lease to bind, in all respects, Tenant to all terms and provisions of this Lease, and that such person possesses the authority to execute this Lease and bind Tenant hereto. 23. Delegation of Authority. Ex cept as otherwise expressly provided herein, any action that is to be or may be taken by Landlord under this Lease is hereby delegated by Landlord, pursuant to approval of this Lease by City Council of Landlord, to the City Engineer of Landlord, or his designee. Lease Agreement Page 10 of 16 1003 TENANT: Denton Chamber of Commerce, a Texas non-profit co tion ACKNOWLEDGMENT STATE OF TEXAS § COUNTY OF DENTON § This instrument was acknowledged before me on this 3<=9 day of (e.,'n,UCl.¢.-j , 20l/, by £'('· 'CA.. 'YCA...(\ , j\·e';>;c.k..<\t , a Texas ,(\(){\ -~<'0.\!i-~-· on behalfofsaid . oP-CD('()M~~c_e_ ''"'"'' ~~"'~~f,v~~-:. CATHERINE WELBORN £'~;'~'{~~Notary Public, State of Texas ,~--~ . .,:; c ~.,.;;_ .... ;;_~~ omm. Expires 02·24-202l "/,..-OF 'v:'' '''m"''' Notary ID 131018469 Notary Public, tate of Texas My commission expires: 1...-1-Lt -""2..0 "'2.. I Lease Agreement Page 11 of 16 1004 LANDLORD: CITY OF DENTON BY: ---------------------------------Todd Hileman, City Manager ATTEST: ROSA RIOS, CITY SECRETARY BY: ----------------------------- APPROVED AS TO LEGAL FORM: AARON LEAL, CIT~ BY:~4 4= TillS AGREEMENT HAS BEEN BOTII REVIEWED AND APPROVED AS TO Financial and operational obligations and Business terms. STATEOFTEXAS § COUNTYOF § This instrument was acknowledged before me on this day of , 20 _, by Todd Hileman, City Manager of the City of Denton, on behalf of the City of Denton. Notary Public, State of Texas My commission expires: __________________ _ Lease Agreement Page 12 of 16 1005 Exhibit "A" To Lease Legal Description a 2.703 acre tract in the BBB and C. RR Company Survey, Abstract No. 185, City of Denton, Denton County, Texas. Lease Agreement Page 13 of16 1006 Exhibit "B" To Lease Insurance Tenant shall procure and carry, at its sole cost and expense during the term of this Lease and as otherwise may be provided in this Lease, insurance protection as hereinafter specified, in form and substance satisfactory to Landlord, carried with an insurance company (or companies) authorized to transact business in the state of Texas, covering all aspects and risks of loss of all operations in connection with this Lease, including without limitation, the indemnity obligations set forth herein. Tenant shall obtain and maintain the following insurance coverages in full force and effect during the term of this Lease, and if coverage is afforded on a Claims Made basis, for three (3) years thereafter as concerns the Environmental Liability Coverage: Commercial General Liability: Per Occurrence Limit: $1,000,000 Aggregate Limit: $2,000,000 Business Automobile Liability (providing coverage for owned, non-owned and hired automobiles): Per Occurrence Limit Aggregate Limit: Property Insurance: Lease Agreement Page 14 ofl6 $ 500,000 $1,000,000 1007 All risk property coverage on all buildings, attachments and improvements, including the contents of all buildings, attachments and improvements, on a full replacement cost basis. Landlord shall be listed as an Additional Insured with respect to the Commercial General Liability and Business Automobile Liability and shall be granted a waiver of subrogation under both policies. Landlord shall be listed as a Loss Payee with respect to the all risk property coverage. Tenant will provide a Certificate of Insurance on or before the Effective Date of this Lease to the Landlord as evidence of coverage. The Certificate will provide 30 days notice of cancellation. A copy of the additional insured endorsement and waiver of subrogation attached to the policy will be included in the certificate. All insurance carriers must be admitted to do business in the state of Texas and have an AM Best's Rating of A-VII or better. All policies should be written on an occurrence basis. If a policy is written on a "claims made" basis the Tenant shall provide evidence of continued coverage, or "tail coverage" for a period of three (3) years following the expiration of this Lease. Lease Agreement Page 15 of 16 1008 Leased Premises: Exhibit "C" Leased Premises Approximately 1,600 square feet of office space as depicted to include 16 desks in W AE and approximately 100 square feet of storage space in IDF B. WW-2 ti'3 • .. S!ilf {\ WAB-2 u AB-26 W~1JAB-t2 ~15 [t:-2;~, y "' ' I -~I Lease Agreement Page 16 of 16 • 1009 Chamber of Commerce Lease City Council February 9, 2021 1 ID21-171; Feb. 9, 2021 1010 Background •Economic Development has relocated to the new Development Service Center to allow for better coordination of development processes. •Economic Development staff are highly mobile and have adapted a modified work from home schedule, therefore need less office space. •City and Chamber explored the possibility of co-locating Economic Development and Chamber staff. •Improves coordination and connection between offices. •Reduces duplication of work between two staffs. •Provides better support to business community. 2ID21-171; Feb. 9, 2021 1011 Lease of Space •Chamber will lease approx. 1,600 s.f.of office space and about 100 s.f.of storage space in Development Services Center. •Lease rate of $17,600 per year (paid monthly). •Includes utilities, office space, furniture, and reception services. •Five-year lease term. •Option to extend for an additional five years for total of 10 years, with ability to adjust lease rate based on market during renewal. •Lease term of Feb. 15, 2021 to Jan. 31, 2026. 3ID21-171; Feb. 9, 2021 1012 Recommendation •Staff recommends approval of the lease agreement with the Denton Chamber of Commerce. 4ID21-171; Feb. 9, 2021 1013 Questions? 5ID21-171; Feb. 9, 2021 1014 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-094,Version:1 Consider approval of a resolution of the City of Denton supporting the TX Legacy Denton,LP’s 9%housing tax credit application to Texas Department of Housing and Community Affairs for proposed new construction of The Legacy in Denton Apartments to provide affordable rental housing;committing to provide fee reductions in an amount not to exceed $500.00; and providing an effective date. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™1015 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: Public Affairs and IGR - Community Development CM/ DCM/ ACM: Sara Hensley, Assistant City Manager DATE: February 9. 2021 SUBJECT Consider approval of a resolution of the City of Denton supporting the TX Legacy Denton, LP’s 9% housing tax credit application to Texas Department of Housing and Community Affairs for proposed new construction of The Legacy in Denton Apartments to provide affordable rental housing; committing to provide fee reductions in an amount not to exceed $500.00; and providing an effective date. BACKGROUND The Texas Department of Housing and Community Affairs (TDHCA) offers a Housing Tax Credit program as one of the primary means of directing private capital toward the development and preservation of affordable rental housing for low-income households. Typical projects include apartment complexes, rental townhomes, mixed-income and mixed-use properties, supportive housing for those with special needs, and independent living facilities for seniors. There are two types of Housing Tax Credit (HTC) programs available: a 4% (non-competitive) and a 9% (competitive) program. Both programs have unique features and rules; however, in general, current policy from the TDHCA for 9% includes a scoring item that developers receive resolutions of support or no objection from the municipality in which the project is located. For the 4% program, there are threshold documents requiring that developers receive resolutions of no objection from the municipality in which the project is located. The tax credits are awarded to eligible participants and provide a source of equity financing for the development of affordable housing. Investors in qualified affordable multifamily residential developments can use the HTCs as a dollar-for-dollar reduction of federal income tax liability. The value associated with the HTCs allows housing to be leased to qualified families at below market rate rents. The Non-Competitive (4%) Housing Tax Credit program is coupled with the Multifamily Bond Program when the bonds finance at least 50% of the cost of the land and buildings in the Development. To meet the City of Denton housing and development objectives, it is the City’s policy to analyze projects requesting support for proposed Housing Tax Credits (HTC). Such analysis will determine if the project(s) comply with the principles and policies found in the City’s Denton 2030 Plan, the 5-Year Consolidated Plan for Housing and Community Development, as well as various other master, strategic, and redevelopment or neighborhood plans, adopted by the City of Denton. The goal of this analysis is to (a) establish if HTC projects merit local support, and (b) prioritize HTC submissions if more than a single proposal is received during an evaluation period. The Community Development Division serves as the City’s primary staff and point of contact for all HTC programs. Developers seeking consideration by the City of Denton for either a Resolution of Support or a Resolution of No Objection, for an HTC from TDHCA may review the HTC Policy and must submit a request for support using the City Council approved HTC Application. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 1016 DISCUSSION The City has received an application submitted to Community Services seeking a Resolution of Support for a 9% Housing Tax Credit application to TDHCA for new construction (Exhibit 2). Staff will present an overview of the application and the proposed project with the developer to City Council at the February 2, 2021 meeting. Consideration of a resolution of support for the HTC will be placed on the February 9, 2021 meeting for City Council. TDHCA Competitive HTC Application Deadlines  01/04/2021 Application Acceptance Period Begins. Public Comment period starts.  01/08/2021 Pre-Application Final Delivery Date (including waiver requests).  02/15/2021 Deadline for submission of Application  03/01/2021 End of Application Acceptance Period and Full Application Delivery Date (including Resolution for Local Government Support pursuant to §11.9(d)(1) of the 2021 CHAPTER 11, QUALIFIED ALLOCATION PLAN (QAP) PROJECT - The Legacy in Denton Apartments Figure 1 1017  Project Type: General, New Construction  Location: 4298 E. McKinney, Denton, Texas 76208  City Council District: 2  Developers: TX Legacy Denton, LP  Current Zoning: (R7) - Residential 7 (an SUP will be required)  Tenant access to services: The site’s location will give residents easy access to other parts of Denton and the surrounding communities, including direct access to the newly expanding Highway 380. Denton Connect Route 3 has service running past this site (.10 miles) on a daily basis every 22 minutes, on average starting at 6:01am and ending at 9:00pm. The property will have income restrictions to the residents, as well as rental limitations to those prospective residents. The population of the community will be families as well as seniors; however, there will not be any age restrictions on the property. Apartment Life and Meals on Wheels will provide services at the property. Located within close proximity of the project site are: 1. Several grocery stores (Aldi <.75 miles, Kroger 1.15 miles) 2. Several Pharmacies (Kroger -1.15 miles, Walgreens – 1.3 miles) 3. Kid Zone Learning Center (<.5 miles) 4. Childcare Network (<.80 miles) 5. LA Fitness (1 mile) 6. Lone Star Indoor Sports Center (.25 miles) 7. Texas Women’s University (<3.0 miles) 8. Denton Ryan High School (.10 miles) 9. Denton City Fire Station 2 (.85 miles) 10. Texas Department of Public Safety (adjacent property) 11. Denton County Law Library (1.87 miles) 12. Denton County Public Health (<.50 miles)  Project Amenities: Residents will enjoy common amenities that include a club house with a dog park, fitness center, business center with computers and internet access, a community room, swimming pool, landscaped courtyards, controlled access to the property and elevators in each building. In addition, residents will enjoy an activity room, furnished community room and wifi for the entire development. The development plans to provide high quality senior rental housing for residents in a safe, clean, beautiful environment. In addition, the development will be finished out with energy efficient appliances and features. Note that there is currently an initiative to run a path along Pecan Creek, which is located to the south of the property, and the residents will have access to this as well.  Taxable Status of the Development: This project will be seeking a Tax-Exemption. Information about tax-exempt partnerships (potential partnerships, % exemption) has not been finalized by The Legacy in Denton Apartments.  Proposed Unit Breakdown: The property will utilize income averaging for its residents, which will allow a greater spectrum of qualified applicants. This development proposal features the construction of 232 general occupancy apartment units. Using Income Averaging1, the income restrictions for these units will range from 30% of Area Median Income (AMI) – 100% of AMI.  Proposed Unit Sizes: 703 - 1,146 sq. ft  Projected Rents: Average rents will be $780 for a 1 bedroom, $964 for a 2 bedroom, and $1,106 for a 3 bedroom.  Length of Affordability: 40 Years  Experience: Primary Developer is RISE Residential Construction, LP. Since 2003, RISE has completed more than 200 single-family, multi-family, mixed-use and senior developments, providing some 7,000 high-quality residences across Texas and in New Mexico. 1018 Figure 2 1Income averaging restriction election was first incorporated into the Qualified Allocation Plan (QAP) of Texas in 2019. This income restriction election allows Housing Tax Credit properties to provide apartment units restricted at a wide range of income levels, while achieving an overall average income restriction of 60%. Income averaging allows developments to serve the lower income population as well as the 70% and 80% AMI families that have previously been left out of other programs. Draft Unit mix from Developer: Figure 3 1019 Commitment of Development Funding Additional points are available to 9% housing tax credit applicants who receive a commitment of development funding by the Local Political Subdivision, increasing the competitiveness of an application. TX Legacy Denton, LP’s has asked for a commitment for the proposed new construction of The Legacy in Denton Apartments. To satisfy the requirement of Section 11.9(d)(2) in order to gain points under the rule for this commitment of funds, the City of Denton will provide reduced fees to The Legacy in Denton Apartments development in the amount of $500 if City Council approves this resolution. OPTIONS 1. Approve a Resolution of Support as presented 2. Do Not Approve the Resolution of Support EXHIBITS 1. Agenda Information Sheet 2. Resolution of Support Respectfully submitted: Dani Shaw Community Services Manager 1020 RESOLUTION NO. A RESOLUTION OF THE CITY OF DENTON SUPPORTING THE TX LEGACY DENTON, LP’S 9% HOUSING TAX CREDIT APPLICATION TO TEXAS DEPARTMENT OF HOUSING AND COMMUNITY AFFAIRS FOR PROPOSED NEW CONSTRUCTION OF THE LEGACY IN DENTON APARTMENTS TO PROVIDE AFFORDABLE RENTAL HOUSING; COMMITTING TO PROVIDE FEE REDUCTIONS IN AN AMOUNT NOT TO EXCEED $500.00; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the TX Legacy Denton, LP ("Applicant") is proposing the new construction of a multi-family affordable rental housing development to be located at approximately 4298 E. McKinney, Denton, Texas 76208 to be named The Legacy in Denton Apartments (the "Project"); and WHEREAS, the Applicant has advised the City that it intends to submit an application to the Texas Department of Housing and Community Affairs ("TDHCA") for 2021 Housing Tax Credits funds to provide equity financing for the Project (the “Application”); and WHEREAS, pursuant to 10 TEX. ADMIN. CODE RULE §11.9(d)(1) (2020), TDHCA will provide extra points to an application for a municipality’s resolution of support for a development which will be located in such municipality’s jurisdiction; and WHEREAS, Applicant has requested that support from the City; and WHEREAS, Applicant has also requested that City provide a letter substantially in the form attached hereto as Exhibit A (the “Fee Reduction Letter”), committing to provide fee reductions in an amount not to exceed $500.00 in connection with the development of the Project as the City’s financial contribution pursuant to 10 TEX. ADMIN. CODE RULE §11.9(d)(2) (2020) for purposes of gaining points for its application to the TDHCA for 2021 Housing Tax Credits; and WHEREAS, Applicant has advised the City that it intends to seek property tax exempt status for the Project and to that end has committed to the City that it will use its best efforts to partner with a qualified charitable organization based in Denton County, Texas; and WHEREAS, the City Council of the City of Denton wishes to express support for this proposed Project’s application to TDHCA and to commit to the requested fee reductions to facilitate the possible award of Housing Tax Credits to the Project; NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF DENTON HEREBY RESOLVES: SECTION 1. The recitals contained in the preamble of this Resolution are incorporated by reference into the body of this Resolution as if fully set forth herein. SECTION 2. As provided in 10 TEX. ADMIN. CODE RULE §11.3(e) (2020) and §11.4(c)(1) of the Qualified Allocation Plan, it is hereby acknowledged that the proposed Project is located in a census tract that has more than 20% Housing Tax Credit Units per total households. 1021 SECTION 3. As provided in 10 TEX. ADMIN. CODE RULES §11.3(b) and §11.3(d) (2020) of the Qualified Allocation Plan, it is hereby acknowledged that the proposed Project may be within two linear miles from another proposed development site in the same year, and may be within one linear mile from another proposed development site within the three-year period preceding the date the Certificate of Reservation is issued. SECTION 4. The City affirms that the proposed Project is consistent with the jurisdiction’s obligation to affirmatively further fair housing pursuant to 10 TEX. ADMIN. CODE RULES §11.3(e) and §11.4(c)(1) (2020) of the Qualified Allocation Plan. SECTION 5. In accordance with the requirements of TEX. GOV’T CODE §2306.67071 (2013) and 10 TEX. ADMIN. CODE RULE §11.204(4) (2020), it is hereby found that: 1. Notice has been provided to the City in accordance with TEX. GOV’T CODE §2306.67071(a) (2013); and 2. The City has had sufficient opportunity to obtain a response from the Applicant regarding any questions or concerns about the proposed Application; and 3. The City has held a hearing at which public comment may be made on the proposed Application in accordance with TEX. GOV’T CODE §2306.67071(b) (2013); and 4. After due consideration of the information provided by the Applicant and public comment, the City does support the proposed Application. SECTION 6. The City affirms its commitment to provide Applicant with fee reductions in a total amount not to exceed $500.00 in connection with the development of the Project conditioned on: (i) the Applicant securing the 9% housing tax credit from the TDHCA, and (ii) Applicant securing development plan approvals for the Project, including any required zoning approvals, from the City. SECTION 7. The City Manager is hereby authorized, empowered, and directed to certify this Resolution to the TDHCA and to execute any other documents that may be necessary for carrying out this Resolution, including the Fee Reduction Letter. SECTION 8. This Resolution shall be effective as of its date of approval and passage by City Council. The motion to approve this Resolution was made by __________________________ and seconded by _________________________________, the Resolution was passed and approved by the following vote [___ - ___]: 1022 Aye Nay Abstain Absent Mayor Gerard Hudspeth: Birdia Johnson, District 1: Connie Baker, District 2: Jesse Davis, District 3: John Ryan, District 4: Deb Armintor, At Large Place 5: Paul Meltzer, At Large Place 6: PASSED AND APPROVED this the _________ day of ___________________, 2021. __________________________________ GERARD HUDSPETH, MAYOR ATTEST: ROSA RIOS, CITY SECRETARY BY: __________________________________ APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: __________________________________ Kendra Kennedy 1023 EXHIBIT A City Manager’s Office 215 E. McKinney St., Denton, TX 76201 y (940) 349-8307 February 22, 2021 Mr. Jack D. Traeger Legacy Multifamily Development, LLC 17304 Preston Road, Suite 800 Dallas, Texas 75252 RE: Commitment of Development Funding by Local Political Subdivision for TX Legacy Denton, LP’s for proposed new construction of The Legacy in Denton Apartments at 4298 E. McKinney, Denton, Texas 76208 in Denton, City of Denton, Denton County, Texas Dear Mr. Traeger, Pursuant to your request, I can confirm that I am the local government official with appropriate jurisdiction to state the following. TX Legacy Denton, LP has requested a de minimis amount of funding for the support of The Legacy in Denton Apartments development to satisfy a requirement of Section ll.9(d)(2) of the 2017 Qualified Allocation Plan as published by the Texas Department of Housing and Community Affairs. The City affirms its commitment to provide The Legacy in Denton Apartments development (the “Project”) with fee reductions in a total amount not to exceed $500.00 in connection with the development of the Project conditioned on: (i) the Applicant securing the 9% housing tax credit from the TDHCA, and (ii) Applicant securing development plan approvals for the Project, including any required zoning approvals, from the City. It is the intention of this letter to firmly commit this benefit to the Project in order to satisfy the requirement of 10 TEX. ADMIN. CODE RULE §11.9(d)(2) (2020) in order to gain points under that rule for this commitment of funds. Sincerely, Todd Hileman City Manager City of Denton, Texas OUR CORE VALUES Integrity y Fiscal Responsibility y Transparency y Outstanding Customer Service ADA/EOE/ADEA www.cityofdenton.com TDD (800) 735-2989 1024 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-179,Version:1 AGENDA CAPTION Consider adoption of an ordinance ordering an election to be held in the City of Denton on May 1,2021 and,if a runoff election is required,on June 5,2021,for the purpose of electing Council Members to Districts 1,2,3 and 4 of the City Council of the City of Denton,Texas;prescribing the time and manner of the conduct of the election to be in accordance with a joint election agreement and contract for election services with the Election Administrator of Denton County;providing a severability clause;providing an open meetings clause;and providing an effective date. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™1025 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: City Secretary’s Office ACM: Assistant City Manager Sara Hensley DATE: February 9, 2021 SUBJECT Consider adoption of an ordinance ordering an election to be held in the City of Denton on May 1, 2021 and, if a runoff election is required, on June 5, 2021, for the purpose of electing Council Members to Districts 1, 2, 3 and 4 of the City Council of the City of Denton, Texas; prescribing the time and manner of the conduct of the election to be in accordance with a joint election agreement and contract for election services with the Election Administrator of Denton County; providing a severability clause; providing an open meetings clause; and providing an effective date. BACKGROUND Article III (Nominations and Elections), Section 3.01 (Municipal elections), of the Denton City Charter provides that “the regular election for the choice of members of the City Council as provided in Article II shall be held each year on the uniform election day for municipal elections in May established by the Election Code.” That date is May 1, 2021. Further, Section 3.05 (Regulation of Elections) requires that “all city elections shall be governed by the applicable provisions of the Election Code of the State of Texas, as now or hereafter amended.” In May 2021, the terms expire for City Council Districts 1, 2, 3 and 4. Therefore, an election must be held on May 1, 2021 for these Districts. Under the Texas Constitution, council members continue to hold over until they are either re-elected or a new member elected to that district. Section 3.005(c) of the Texas Election Code requires a May election be ordered not later than the 78th day before election day. For the May 1, 2021 Uniform Election, the deadline for ordering the election is Friday, February 12, 2021. Tuesday, February 9, 2021, is the last City Council meeting day to order the election without having to schedule a special meeting. Approval of this ordinance would formally order the May 1, 2021 City Council election for City Council Districts 1, 2, 3 and 4. It also provides that the City will be entering into a joint election agreement and contract for election services (the “Agreement”) with the Denton County Elections Administrator to perform various election functions. The Agreement will be scheduled for formal adoption at a later date once Denton County provides all pertinent documentation. City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 1026 PRIOR ACTION/REVIEW (Council, Boards, Commissions) On January 26, 2021, a work session item presented polling location options for use during early voting and on election day. A work session is also being held on February 9 to finalize the desired early voting locations. At this time, the exhibit to the ordinance ordering the election includes those locations identified through a consensus of the City Council. As in previous years, the proposed ordinance also provides that early voting and election day locations shall be modified to include additional or different polling places designated by the Elections Administrator and to conform to the Agreement. EXHIBITS Exhibit 1 - Agenda Information Sheet Exhibit 2 - Ordinance and Exhibits Exhibit 3 - Presentation Respectfully submitted: Rosa Rios City Secretary 1027 ORDINANCE NO. _____________ AN ORDINANCE ORDERING AN ELECTION TO BE HELD IN THE CITY OF DENTON ON MAY 1, 2021 AND, IF A RUNOFF ELECTION IS REQUIRED, ON JUNE 5, 2021, FOR THE PURPOSE OF ELECTING COUNCIL MEMBERS TO DISTRICTS 1, 2, 3 AND 4 OF THE CITY COUNCIL OF THE CITY OF DENTON, TEXAS; PRESCRIBING THE TIME AND MANNER OF THE CONDUCT OF THE ELECTION TO BE IN ACCORDANCE WITH A JOINT ELECTION AGREEMENT AND CONTRACT FOR ELECTION SERVICES WITH THE ELECTIONS ADMINISTRATOR OF DENTON COUNTY; PROVIDING A SEVERABILITY CLAUSE; PROVIDING AN OPEN MEETINGS CLAUSE; AND PROVIDING AN EFFECTIVE DATE. THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. A municipal election is ordered to be held in the City of Denton, Texas on Saturday, May 1, 2021, such date being a uniform election date as defined in Texas Election Code §41.001, as amended (the "Code"), for the purpose of electing council members for Districts 1, 2, 3 and 4. In the event a runoff is required, the runoff election shall be held on Saturday, June 5, 2021. SECTION 2. The polling places shall be designated by the Denton County Elections Administrator (the “Elections Administrator”) in accordance with the provisions of a joint election agreement and contract for election services (the “Agreement”) with the Elections Administrator. The locations of such polling places are set forth in Exhibit A, attached hereto. Exhibit A shall be modified to include additional or different election day polling places designated by the Elections Administrator and to conform to the Agreement. SECTION 3. Early voting shall be conducted by personal appearance at the locations, dates and times set forth in Exhibit A, attached hereto, and during the early voting period as required or permitted by law. Exhibit A shall be modified to include additional or different early voting locations designated by the Elections Administrator and to conform to the Agreement. SECTION 4. The most accurate information on election day and early voting locations and voting times can be found or obtained by visiting the Denton County webpage noted below or contacting said County as noted: Denton County Elections Administrator 701 Kimberly Drive Denton, Texas 76208 (940) 349-3200 https://www.votedenton.com/upcoming-election-information/ SECTION 5. The Elections Administrator shall serve as the early voting clerk in accordance with the terms of the Agreement. The Main Early Voting location for the election for residents of the City shall be at the following address. Applications for early voting by mail must 1028 be received no later than the close of regular business on April 20, 2021. Applications for early voting by mail must be submitted to the following address: Early Voting Clerk Denton County Elections Administrator 701 Kimberly Drive Denton, Texas 76208 SECTION 6. The manner of holding such election and all questions pertaining thereto shall be governed by the election laws of the State of Texas. SECTION 7. The City Council has found and determined that the meeting at which this Ordinance is considered is open to the public, and that notice thereof was given in accordance with provisions of the Texas open meetings law, Texas Government Code Chapter 551, as amended, and that a quorum of the City Council was present. SECTION 8. This Ordinance shall become effective immediately upon its passage and approval. The motion to approve this ordinance was made by __________________________ and seconded by _________________________________, the ordinance was passed and approved by the following vote [___ - ___]: Aye Nay Abstain Absent Gerard Hudspeth, Mayor: ______ ______ ______ ______ Birdia Johnson, District 1: ______ ______ ______ ______ Connie Baker, District 2: ______ ______ ______ ______ Jesse Davis, District 3: ______ ______ ______ ______ John Ryan, District 4: ______ ______ ______ ______ Deb Armintor, At Large Place 5: ______ ______ ______ ______ Paul Meltzer, At Large Place 6: ______ ______ ______ ______ PASSED AND APPROVED this the _________ day of ___________________, 2021. __________________________________ GERARD HUDSPETH, MAYOR 1029 ATTEST: ROSA RIOS, CITY SECRETARY BY: __________________________________ APPROVED AS TO LEGAL FORM: AARON LEAL, CITY ATTORNEY BY: __________________________________ Digitally signed by Catherine Clifton DN: dc=com, dc=cityofdenton, dc=codad, ou=Department Users and Groups, ou=General Government, ou=Legal, cn=Catherine Clifton, email=Catherine.Clifton@cityofdenton.com Date: 2021.02.04 14:58:21 -06'00' 1030 Exhibit A *POLLING LOCATIONS & EARLY VOTING/ELECTION DAY DATES/TIMES *NOTE: Locations subject to change based on final locations as determined by a join elections contract with other participating jurisdictions. 1031 May 1, 2021 General ElectionCity Council District 1, 2, 3, and 4 (June 5, 2021 Runoff Election, if needed) Rosa Rios, City SecretaryCity Manager’s OfficeFebruary 9, 2021 File ID 21-179 1032 ELECTION DAY: MAY 1, 2021 •Contract: Denton County for administration of elections (future agenda item) •Canvass scheduled for Tuesday, May 11 (Order runoff for June 5, if needed) File ID 21-179 General ElectionCity Council Districts 1, 2, 3, and 4(Any potential runoff ordered after canvassing –June 5, 2021) ------------------------------------------------------- 1033 File ID 21-179 POLLING LOCATIONS ELECTION DAY 1034 File ID 21-179 POLLING LOCATIONS EARLY VOTING Note: Voters have the ability to vote at any early voting location during the early voting period. 1035 Voting Schedules ID 21-206 FEBRUARY 9, 2021 File ID 21-179 1036 ORDER OF GENERAL ELECTIONMAY 1, 2021 Questions? File ID 21-179 1037 City of Denton Legislation Text City Hall 215 E. McKinney St. Denton, Texas 76201 www.cityofdenton.com File #:ID 21-178,Version:1 AGENDA CAPTION Consider nominations/appointments to the City’s Boards,Commissions,and Committees:Airport Advisory Board,Animal Shelter Advisory Committee,Board of Ethics,Health &Building Standards Commission, Human Services Advisory Committee,Library Board,Parks,Recreation &Beautification Board,Planning & Zoning Commission, Public Art Committee, and Zoning Board of Adjustment. City of Denton Printed on 2/5/2021Page 1 of 1 powered by Legistar™1038 City of Denton _____________________________________________________________________________________ AGENDA INFORMATION SHEET DEPARTMENT: City Manager’s Office ACM: Sara Hensley DATE: February 2, 2021 SUBJECT Consider nominations/appointments to the City’s Boards, Commissions, and Committees: Airport Advisory Board, Animal Shelter Advisory Committee, Board of Ethics, Health & Building Standards Commission, Human Services Advisory Committee, Library Board, Parks, Recreation & Beautification Board, Planning & Zoning Commission, Public Art Committee, and Zoning Board of Adjustment. BACKGROUND On January 4, 2021, the 2020-2022 Boards & Commissions Screening & Appointment Process was presented and discussed with the City Council. This item is the first step in appointing members. Exhibit 2 includes those seats for the above-noted Boards, Commissions, and Committees for whom nominations have been received, nominees fully vetted and found to meet all necessary qualifications to serve on the respective board/commission/committee. As previously discussed, only those nominees who have been fully vetted and qualified will be presented for appointment. This is not a complete listing of nominees received to date as the vetting is still in progress for some or (re)nominations have not been received. EXHIBITS Exhibit 1 – Agenda Information Sheet Exhibit 2 – Nominations Sheet Respectfully submitted: Rosa Rios City Secretary City Hall 215 E. McKinney Street Denton, Texas www.cityofdenton.com 1039 BOARD/COMMITTEE/COMMISSION COUNCIL PLACE NOMINATING CCM NOMINEE PRESENT TERM NEW TERM STATUS &QUALIFICATION OR PREFERENCE, IF ANY Airport Advisory Board 7 Hudspeth-7 Robert Tickner 2018-2020 September 1, 2020 throughAugust 31, 2022 Reappointment Animal Shelter Advisory Committee 5 Armintor-5 Diana Leggett 2018-2020 September 1, 2020 throughAugust 31, 2022 Reappointment Qualif. 4 - Represents Animal Welfare Org. Animal Shelter Advisory Committee 7 Hudspeth-7 Sarah Kuechler N/A UNEXPIRED September 1, 2019throughAugust 31, 2021 NewQualif. 2 - City Official Board of Ethics ALL - ALT. 1 All Deborah Cosimo 2018-2020 September 1, 2020 throughAugust 31, 2022 Reappointment Pref. 9 - Lic. Professional Counselor Health & Building Standards Commission 4 Ryan-4 Sebastian Delgadillo N/A UNEXPIRED July 1, 2020throughJune 30, 2022 NewQualif. 3: Engineer Human Services Advisory Committee 5 Armintor-5 Nathaniel Johnson N/A UNEXPIREDSeptember 1, 2019throughAugust 31, 2021 New Library Board 4 Ryan-4 Jim Owen 2018-2020 - UN September 1, 2020 throughAugust 31, 2022 Reappointment Library Board 5 Armintor-5 Vicki Byrd N/A UNEXPIREDSeptember 1, 2019throughAugust 31, 2021 * Correcting the applicable term New Parks, Recreation & Beautification 4 Ryan-4 David Shuck 2018-2020 September 1, 2020throughAugust 31, 2022 Reappointment Planning & Zoning Commission 5 Armintor-5 Mat Pruneda 2018-2020 September 1, 2020through August 31, 2022 Reappointment Public Art Committee 4 Ryan-4 Adam Chamberlin N/A UNEXPIREDSeptember 1, 2020throughAugust 31, 2022 New Zoning Board of Adjustment 5 Armintor-5 Jennifer Lane 2018-2020 September 1, 2020 through August 31, 2022 Reappointment BOARDS & COMMISSIONS - NOMINATIONS LIST February 9, 2021 *Note: Vicki Byrd was presented for appointment on February 2, 2021. Her term at that time reflected an Unexpired Term of September 1, 2020 through August 31, 2021. She was actually being appointed to fill a vacancy on the Library Board with an Unexpired Term of September 1, 2019 through August 31, 2021. Therefore, her term of appontment is being corrected. 1040